How to blog when it’s hard to type: copy and paste Paul Krugman!
In today’s column, he points out how people who claim to speak for “the market” are usually speaking for themselves:
We have been told repeatedly that governments must cease and desist from their efforts to mitigate economic pain, lest their excessive compassion be punished by the financial gods, but the markets themselves have never seemed to agree that these human sacrifices are actually necessary. Investors were supposed to be terrified by budget deficits, fearing that we were about to turn into Greece — Greece I tell you — but year after year, interest rates stayed low. The Fed’s efforts to boost the economy were supposed to backfire as markets reacted to the prospect of runaway inflation, but market measures of expected inflation similarly stayed low….
… markets are practically begging governments to borrow and spend, say on infrastructure; … financing for roads, bridges, and sewers would be almost free.
….the next time you hear some talking head opining on what we must do to satisfy the markets, ask yourself, “How does he know?” For the truth is that when people talk about what markets demand, what they’re really doing is trying to bully us into doing what they themselves want.
The same applies to politicians and pundits who love to tell us what “the American people” want. Unless they’re quoting public opinion polls (like the ones that always say the American people want less military spending and higher taxes on the rich), they’re speaking for themselves.