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Politics : View from the Center and Left -- Ignore unavailable to you. Want to Upgrade?

To: Mary Cluney who wrote (125459)	11/23/2009 10:03:05 PM
From: JohnM	Respond to of 542214

My guess remains that two things are correct, but it's only a guess. First, that Baker and Krugman et al are correct in that the bond market is reading the present fiscal situation as not even close to a default. If it were the interest rates would be well above their present levels. I don't even see fears of inflation built into those numbers. Second, the reason for this story appearing now is the proverbial fears of Wall Street that the federal government will take actions to alleviate unemployment. Best I can tell they are still hung up in the mind set which says unemployment is good for business because it lowers the costs of employment--wages and benefits. They, at least most of them, don't get the quite opposite story that unemployment, at these levels, leads to lower levels of consumption, leads to lower levels of production, leads to lower levels of profit. Etc.