The other day I was on the radio with Bill Gross, the director of the big bond fund Pimco. I thought Bill, who in the past has made big news with worrisome noises about US debt levels, made many great points about the need for a substantive jobs package, as well as strong arguments in support of a much more aggressive domestic manufacturing policy.
This should be big news, but as Mike Konczal (aka Rortybomb) points out here, it isn’t. Mike argues that there are asymmetries in the bond market:
“When the bond vigilantes are making noise about hyperinflation or deficits spiraling out of control they get a huge amount of coverage, but when they are calling for a more aggressive fiscal stimulus and a larger infrastructure bank they get none.”
They (the allegedly feared bond vigilantes) somehow terrify everyone when they want the gov’t to borrow less but are ignored with impunity when they want the gov’t to borrow more.
That’s a troubling bias…I mean it’s one thing to snub academic scribblers, but these guys manage serious money!