Dean Baker: How does Politico know what the stock markets want?

Center for Economic and Policy Research
“Apparently Politico is among the small group of analysts who know what will move markets,” writes economist Dean Baker, referring to this line in a Politico story about the deficit reduction supercommittee: “If the committee were to take up changes to Social Security, it could show that Congress is looking for systemic changes to the nation’s finances — something markets and credit rating agencies want to see.” What credit agencies want is clear, Baker writes, but how does Politico know what the markets want? “It would be interesting to see Politico provide the evidence that is the basis for this assertion. Alternatively, if this is just intuition on the part of the reporters/editors at Politico, it would be important to disclose this fact as well.” Although Baker doesn’t mention it, Politico reporters Jake Sherman and Manu Raju aren’t the only ones to make this assertion in the story. Speaker of the House John Boehner is quoted as saying, “Nothing, nothing, would send a more reassuring message to the markets than taking bipartisan steps to fix the structural problems in Medicare, Medicaid and Social Security.”