(AP) Sorry Indiana!
New state unemployment figures show that as the nation moves toward an overall 10 percent unemployment rate, some politically vital states are leading the pack.
Kentucky, Florida, Georgia, Michigan, Tennessee, Indiana, California, Ohio, Oregon, Rhode Island, Nevada and North and South Carolina are all over 10 percent now and will all continue to expand their jobless rolls as the bottoming out of the first wave of a double dip recession continues.
There is much debate over whether more deficit spending is needed now in order to prevent the second phase of the recession from taking hold.
The Obama administration warns against the curtailment of the extraordinary spending and intervention too soon, while others say that the spending and the inflation it will bring will make the second dip of the recession much longer and deeper.
I will leave it to smart guys like Noam Scheiber and and Jon Hilsenrath to consider practical application of the approaches, and happily limit myself to the world of political consequences. I can tell you that the demand for a second stimulus, one that actually works, will grow within the administration and the Democratic Party as politically vital states suffer worse than the others.
The states with the worst unemployment are mostly swing states or swingable ones anyway.
Even reliable states like Rhode Island, Kentucky and South Carolina offer perils and opportunities in gubernatorial races and House and Senate seats
In California, where the second dip of the recession is well underway and the government is deeply under water, Democrats fear that voters exhausted by the trainwreck of the past decade might be vulnerable to Republican appeals on fiscal issues and taxes and an unsettled Democratic field.
But Florida, Ohio Nevada, Indiana and North Carolina were all Bush states that went for Obama. They’re key parts of the plan to keep the White House and reestablish a permanent Democratic majority.
More urgently, they are all places with contested 2010 races that may determine the outcome of the president’s agenda.
As the administration accepts that there will be a second valley after the recession ends later this year, the pressure to re-stimulate will only grow as crucial states slip under the waves.
If the politically minded Larry Summers decides that he’ll back Christina Romer’s plans for stimulus, the argument that swing states are suffering the worst will be powerfully persuasive to the president.
If Americans are still deeply worried about debt and inflation by this fall, it will be a hard choice. But if Obama really believes in the stimulative power of government spending it will be hard not to resist the calls of the economists he trusts to pump up the volume.
