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BILL GROSS: IT’S TIME FOR A JOBS PROGRAM

Bill Gross appears confused.  Either that, or he is in the process of a brilliant game of hedging his bets.  Just a few months ago Mr. Gross was complaining about how we are “worse off than Greece“.  He predicted that the USA would likely default on its debts.  He sold his US Treasuries because he was worried that there might not be buyers when QE2 ended.  And then today he’s an advocate of a massive job’s program:

“In the end, I hearken back to revered economist Hyman Minsky – a modern-day economic godfather who predicted the subprime crisis. “Big Government,” he wrote, should become the “employer of last resort” in a crisis, offering a job to anyone who wants one – for health care, street cleaning, or slum renovation. FDR had a program for it – the CCC, Civilian Conservation Corps, and Barack Obama can do the same. Economist David Rosenberg of Gluskin Sheff sums up my feelings rather well. “I’d have a shovel in the hands of the long-term unemployed from 8am to noon, and from 1pm to 5pm I’d have them studying algebra, physics, and geometry.” Deficits are important, but their immediate reduction can wait for a stronger economy and lower unemployment. Jobs are today’s and tomorrow’s immediate problem.”

I am not sure what to make of all of this.  We can afford a massive job’s program, but we’re likely to default?  We are worse off than Greece yet we need to spend more?  His comments are aggravatingly confused.  The billionaire is clearly used to having his cake and eating it too.  At least he’s eating his cake with a copy of Minsky next to him.  That’s a good start.  As for the job’s program – yeah, good luck getting that one passed by this Congress.  The best we’ll do is another tax cut (that will be offset by a Fed Chief who thinks he needs to “fund” it via QE3 when in reality, all this will do is create a commodity rally large enough to spark cost push inflation that offsets the entire positive effect of the tax cut).  The deficit fear mongerers have this situation under control and they’re convinced that we’re the next Greece.

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