“I used to think if there was reincarnation, I wanted to come back as the president or the pope or a .400 baseball hitter,” Mr. Clinton’s political strategist, James Carville, lamented at the time. “But now I want to come back as the bond market. You can intimidate everyone.”
So it is relevant to ask: What does the bond market want at this moment of economic peril? As it happens, two leading bond traders have strong opinions — though not what the Clinton-era populists would have expected. Austerity? Yes, say Bill Gross, a Republican, and Mohamed El-Erian, a Democrat, the chief investment officers of the giant bond fund Pimco. They support curbs on entitlement spending.
But that is for the long term. Right now, they argue, the government needs to arrest America’s dangerous economic slide. In fact, their prescriptions are more aggressive than any the White House has proposed or appears to be contemplating for President Obama’s planned speech in September. Among them: direct federal hiring to reduce unemployment and increase lagging demand…..
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