It’s tempting to think Bill Gross’ perspective on the economy would be taken fairly seriously. After all, he’s the co-founder of investment management giant PIMCO and one of the most influential investors in the world.
And as Brian Beutler reports today, Gross has prepared a prospectus for his clients arguing that the political world’s focus on the debt in the midst of a struggling economy is ridiculous, and what’s needed is another meaningful stimulus package.
“Both parties, in fact, are moving to anti-Keynesian policy orientations, which deny additional stimulus and make rather awkward and unsubstantiated claims that if you balance the budget, ‘they will come.’ It is envisioned that corporations or investors will somehow overnight be attracted to the revived competitiveness of the U.S. labor market: Politicians feel that fiscal conservatism equates to job growth.
“It’s difficult to believe, however, that an American-based corporation, with profits as its primary focus, can somehow be wooed back to American soil with a feeble and historically unjustified assurance that Social Security will be now secure or that medical care inflation will disinflate.
“Admittedly, those are long-term requirements for a stable and healthy economy, but fiscal balance alone will not likely produce 20 million jobs over the next decade. The move towards it, in fact, if implemented too quickly, could stultify economic growth. Fed Chairman Bernanke has said as much, suggesting the urgency of a congressional medium-term plan to reduce the deficit but that immediate cuts are self-defeating if they were to undercut the still-fragile economy.
Gross went on to say that government “must take a leading role in job creation,” adding that agendas that dictate leaving this to the private sector are “simply dazed or perhaps crazed.”
I mention this, not because it’s new, but because it’s amazing that Wall Street giants, economists, and even many in the Fed all agree what the economy needs. And yet, their preferred prescription — significant public investment — is considered so beyond the pale that progressive policymakers don’t bother proposing it, and conservative policymakers scoff at the very idea of considering it.
Americans’ top concern, by far, is job creation and economic growth. The single best way to address the issue isn’t even on the table, thanks in part to Republican dominance of the discourse, progressive timidity, and the public’s conditioning to oppose “spending.”
This is why we can’t have nice things.