Jim Armitage: Cash for bankers won't help Obama but it's the right ticket for economy

Outlook It's raining money, hallelujah, it's raining money, from the sky… That's not exactly how the Weather Girls hit went, but it's how it felt on Wall Street after Ben Bernanke swung his bottle of Mumm into the good ship QE3 this week.

Without doubt, the biggest beneficiaries of this latest bit of munificence by the world's biggest central bank will be, as ever, the JP Morgans and Goldman Sachs of this world.

For in one stroke of his Montblanc, the Federal Reserve governor signed the biggest cheque to the world's wealthiest investment banks since the post-Lehman Brothers bailouts. Or at least, it will probably be the biggest cheque. We don't know for sure, because he's actually left it blank.

The bearded one has pledged to inject an extra $40bn (£25bn) into the financial system every month, indefinitely, until employment picks up in the US. Given the rotten jobs numbers lately, that could be a mighty long time. A lot of $40bns.

And how's he doing it? By buying mortgage-backed securities (MBS) – financial products owned and traded by the investment banks who will end up, as ever, trousering huge profits from the scheme.

Banks stand to gain both from the commissions they'll charge on trading the MBSs and, of course, from the surge in asset prices across the world that the QE3 announcement triggered as the markets opened yesterday. Shares, gold, oil, leaped like popcorn in the pan.

"Bigger bonuses for bankers" is really not the kind of message Barack Obama wants to be campaigning on in the forthcoming elections. But you can bet that, in the coming days and weeks, as Republicans get their heads around this distasteful side effect of QE3, it will be a handy placard used to beat the President. So in a way, the argument that Mr Bernanke was simply acting as an arm of the Democratic party – pumping up the economy weeks before the election – can be discounted.

In fact, the US polls show that most voters had already decided that President Obama's handling of the economy was all wrong a long time ago. To be precise, since June 2010, if the Washington Post's voter survey is to be believed, the majority of Americans have been opposed to his economic policies. So, a complicated-sounding initiative from the Federal Reserve really ain't going to make much difference over the next few weeks.

Ah, but look at the boost to the stock market – that's got to cheer up a weary electorate, comes the counter-argument. Possible, but unlikely. Yesterday may have been fun for investors, but those gains could well fizzle out pretty quickly. The reaction of the electorate, as American teens would say, will be pretty much: "meh".

But that shouldn't be the response. For, despite the distasteful side effects – another flaying for older Americans' savings being the other major one – this was the right policy. The US, like the UK, needs to keep heaving the stimulus pump until the economy really begins to stabilise.

With his open-ended commitment to print more dollars every time the economy wobbles, Mr Bernanke gives businesses and investors confidence that the chance of a sudden collapse is less likely. That means they're more likely to make longer-term decisions about expanding, buying more kit for their factories, hiring more workers and reinforcing the economy for the longer term.

That's a crucial point for Mitt Romney and co to remember. QE3's impact is not really going to be felt in the real economy until long after the election. It's a policy that will benefit the next administration and possibly the one after: certainly not the dying days of this one.