I was pleased to read this week that Bill Gross, co-founder and managing director of the investment giant PIMCO, believes the US federal government should be doing more to address the unemployment problem. According to Gross, "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."
Gross's brief also contains some valuable commentary reminiscent of the past insights of the now-retired PIMCO partner Paul McCulley (now with the Global Interdependence Center). Gross's dismissal of the Ricardian equivalence proposition (the notion that budget deficits dampen consumer and investor confidence) and his reference to the ideas of economist Hy Minsky reminded me of this excellent commentary by McCulley.
Also, it's interesting to see Gross giving clear support for more activist fiscal policy measures. In the past, some of Gross's views could have been interpreted as being somewhat dismissive of the effectiveness of Keynesian-type remedies (for instance, see here, p.4).
That being said, if Gross is serious about his plea for more government action, perhaps he should warn the current author of PIMCO's Global Central Bank Focus column, Tony Crescenzi, to ease-off on the anti-inflation rhetoric (see here). First of all, much of what Crescenzi writes in regard to the effects of inflation is not supported by the facts. Secondly, Crescenzi's views on inflation are exactly the type of commentary that opponents of government intervention would use to attack the very proposals now being recommended by Gross.