Kevin Drumm in Mother Jones:
I opened up my LA Times this morning and here's what I read (the headline is from the print edition):Sadly, I believe so. Not that Our Owners will actually do anything, of course. Pas du Tout.
Stocks Sink As Market Fears MountOh really? Now you tell us?
Two years after the last recession ended, Wall Street is showing rising fear that the U.S. economy could be headed for a new downturn...
"Investors are looking past the budget situation and realizing this is an austerity plan," said Jack Ablin, chief investment officer at Harris Private Bank in Chicago. "We have an economy that's struggling to stay afloat and we don't have the ammunition to keep prodding it forward."
There are really only two options here. (1) The Times is wrong. (2) The Times is right and America has the stupidest goddamn investors on the planet. For months they sat around cheering on the tea partiers and declaring solemnly that the federal budget was just like a household budget and we needed "real action" on the debt in order to build confidence in the economy.
Then, suddenly, when they got it, they realized that what they really wanted wasn't dumb slogans but actual policies that would help spur the recovery. And that means looser monetary policy and fiscal stimulus.
So which is it? Has Wall Street really been sitting idly by during the whole debt ceiling debacle and has only now realized what it really means? Can they really be so steeped in the Fox News fantasyland that it never occurred to them until now that cutting federal spending during an economic downturn wasn't really a great idea? Seriously?