[The Wall Street Journal warned on] May 29, 2009:
They’re back. We refer to the global investors once known as the bond vigilantes, who demanded higher Treasury bond yields from the late 1970s through the 1990s whenever inflation fears popped up, and as a result disciplined U.S. policy makers. The vigilantes vanished earlier this decade amid the credit mania, but they appear to be returning with a vengeance now that Congress and the Federal Reserve have flooded the world with dollars to beat the recession.
What does it take for a media outlet to be permanently disbarred from making economic commentary?
But here’s the thing: it wasn’t just the WSJ. Pundits, Very Serious Politicians, and more have spent the past two years plus doing everything they can to make the deficit the center of public discourse, to focus all our fears on the attack by bond vigilantes that was supposedly just over the horizon.
And now it turns out that what really terrifies the markets, let alone the suffering unemployed, is the prospect of a second Great Depression — a prospect that has become much more likely thanks to the utter wrongness of elite policy priorities.
Great work, guys.