The right and wrong side of a consensus

I haven’t paid too much attention lately to the cable-news chatter, but Josh Marshall noted yesterday some of the recent talk about President Obama’s upcoming economic speech.

If you listen to the establishment press the president’s speech will determine whether the president listens to “liberals” and ditches the move toward economic austerity or “moderates” and Republicans and sticks to budget cutting.

Really? That’s what the establishment press has been telling mainstream news consumers lately?

It’s important to realize how wrong this kind of media coverage is.

Economists and the financial industry want policymakers to boost the economy. The bond market wants the government to be aggressive in creating jobs. Wells Fargo lowered its growth projections recently, and said conditions will get worse “without policy intervention.” The conservative Financial Times argued the other day, “In broad terms, the needed elements are plain: further short-term stimulus combined with credible longer-term fiscal restraint.”

The pushback against the Republican austerity agenda is arguably even more intense. Jamison Foser explained recently:

J.P. Morgan says “fiscal tightening” will worsen the “negative feedback loop” hindering economic growth. Greg Ip notes, “A shift toward fiscal and monetary austerity in the United States in 1937 helped prolong the depression. Fiscal tightening helped push Japan back into recession in 1997.” Jared Bernstein argues for more stimulus. Larry Summers, too. Bruce Bartlett, a policy advisor to Ronald Reagan and Jack Kemp, writes, “the important thing is for policy makers to stop obsessing about debt and focus instead on raising aggregate demand.”

And this doesn’t even include warnings from the Federal Reserve and the Congressional Budget Office that aggressive spending cuts would weaken an already fragile economy.

We’re approaching an economic consensus among those who know what they’re talking about. If President Obama pushes an ambitious jobs agenda, he’ll be siding with economists, the financial industry, business leaders, and even the Fed, not just those rascally “liberals.” Republicans won’t like it, and apparently the establishment media won’t either, but that’s the reality of the situation.