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Why Obama's Gamble on the Debt Ceiling Depends on the GOP Being More Sane Than It Is by Robert B. Reich, robertreich.org | January 15, 2013
A week before his inaugural, President Obama says he won’t negotiate with Republicans over raising the debt limit. At an unexpected news conference on Monday he said he won’t trade cuts in government spending in exchange for raising the borrowing limit. Well and good. But what, exactly, is the President’s strategy when the debt ceiling has to be raised, if the GOP hasn’t relented? He’s ruled out an end-run around the GOP. So it must be that he’s counting on public pressure — especially from the GOP’s patrons on Wall Street and big business — to force Republicans into submission. That’s probably the reason for the unexpected news conference, coming at least a month before the nation is likely to have difficulty paying its bills. The timing may be right. But Obama’s strategy depends on there being enough sane voices left in the GOP to influence others. That’s far from clear. read more »What the Economy Needs Is Growth (But Washington Isn't Talking About It) by Jamelle Bouie, prospect.org | January 14, 2013
If there’s anything frustrating about American politics at this moment, it’s the disappearance of mass unemployment as an area of elite concern. Now that joblessness is on the decline, Washington has moved away from efforts to further address the problem, despite the fact that unemployment isn’t expected to reach pre-recession levels for another four years. You can say the same for Washington’s attitude towards growth. Gross domestic product increased by 3.1 percent in the third quarter of 2012, up from 1.3 percent in the second quarter, and 1.9 percent in the first. Average GDP for the year will probably fall near 2 percent. Compared to the rest of the world, this is a solid recovery. But compared to what we need to close our output gap and begin to return to normalcy, it’s far from adequate. Despite this, neither Congress nor the White House seem interested in finding ways to generate more growth. Instead, both are preoccupied with austerity. read more »I Still Choose Using High Value Platinum Coin Seigniorage To End Austerity! by Joe Firestone, OurFuture.org | January 14, 2013
Yesterday, Ezra Klein reported in the Washington Post that: The Treasury Department will not mint a trillion-dollar platinum coin to get around the debt ceiling. If they did, the Federal Reserve would not accept it. read more »Ezra Klein Chooses Fear Mongering the Big Coin, I Choose Ending Austerity! by Joe Firestone, OurFuture.org | January 11, 2013
(H/t to Lambert Strether for the title!) Here's a commentary on Ezra Klein's recent diatribe against Platinum Coin Seigniorage (PCS). read more »Wake Up Progressives: the Trillion Dollar Coin Can Be Game-Changing! by Joe Firestone, OurFuture.org | January 10, 2013
Well, not really. But if you view the Trillion Dollar Coin (TDC) meme, as I do, as a short-hand for the more general idea of using Platinum Coin Seigniorage (PCS), then yes, it can change the whole political game for progressives if President Obama dares to use it. read more »An Alternative to Austerity by The Nation, The Nation | January 10, 2013
After accepting a mini-bargain that includes tax hikes for Americans making more than $400,000 a year, Senate minority leader Mitch McConnell announced: “The tax issue is finished, over, completed.” By shutting down debate on revenues while holding the line on the debt ceiling, McConnell and the GOP hope to turn their defeat in the fiscal cliff fight into a victory for austerity in the debt ceiling and sequester battles ahead. If they prevail, Social Security and Medicare benefits could end up back on the chopping block, and other cuts to government programs could trigger a “lost decade” of American economic decline. It is impossible to negotiate with this position; it would be terrific if President Obama took Nancy Pelosi’s advice and simply raised the debt ceiling by invoking the Fourteenth Amendment’s charge to maintain the “validity of the public debt of the United States.” But Obama doesn’t want to go there, and so it falls to progressives to develop smart, aggressive alternatives to the GOP agenda. read more »4 Modest Wishes for New Treasury Secretary Jack Lew by Sarah Anderson, alternet.org | January 10, 2013
happily joined the more than 200,000 people who’ve signed the “Paul Krugman for Treasury Secretary” progressive fantasy petition. It was a clever way to tell the administration to reject this nutty austerity craze. Now, however, President Obama has made the far less exciting choice of his Chief of Staff, Jack Lew, for the job. And especially given the experience with Timothy Geithner over the past four years, it’s time to develop some more modest wishes for the new top dog at 1500 Pennsylvania Avenue. 1. If you were complicit in the 2008 crash, please fess up and make a convincing case that you’ve seen the light. 2. If you oppose a popular progressive reform, have the decency to explain your position. 3. Please don’t help rich people and corporations hide their money in overseas tax havens. 4. Don’t be a jerk to other governments read more »TARP is Over, But the Bailouts Will Continue Until the Big Banks are Broken Up -- And Washington Knows It by Robert B. Reich, robertreich.org | January 9, 2013
TARP – the infamous Troubled Assets Relief Program that bailed out Wall Street in 2008 – is over. The Treasury Department announced it will be completing the sale of the remaining shares it owns of the banks and of General Motors. But in reality it’s not over. The biggest Wall Street banks are now far bigger than they were four years ago when they were considered too big to fail. The five largest have almost 44 percent of all US bank deposits. That’s up from 37 percent in 2007, just before the crash. A decade ago they had just 28 percent. The biggest banks keep getting bigger because they can borrow more cheaply than smaller banks. That’s because investors believe the government will bail them out if they get into trouble, rather than force them into a form of bankruptcy (as the new Dodd-Frank law makes possible). That’s why it’s necessary to limit their size and break up the biggest. Washington may be getting the message. read more »Back to Full Employment by Colin Gordon, cepr.net | January 9, 2013
By the conventional “peak to trough” measure, the recession that began in December 2007 ended 18 months later, in June 2009. But you’d be hard-pressed to find much evidence of “recovery” in the labor market. Job creation is barely keeping up with population growth. The marginal decline in the unemployment rate (from about 10 percent at its worst to just under 8 percent at the end of 2012) has been driven mostly by people dropping out of the labor force. And long-term unemployment remains stubbornly high. All of this begs a bigger question: What would real recovery look like? The first and simplest measure is simply to chart our progress towards regaining the jobs lost during the downturn. This yields a flat threshold at the December 2007 employment levels, and a jobs deficit that pushed past 8 million in late 2009 and now sits at about 3 million. read more »The Banks Win Again by Robert Kuttner, prospect.org | January 9, 2013
Last February, the big banks agreed to a major “settlement” to protect themselves from litigation by state attorneys general stemming from fraudulent documentation of mortgages. Though some, such as New York’s crusading attorney general Eric Schneiderman, believed that the government had leverage to get a lot more, the settlement required the banks to pony up some $25 billion to settle outstanding charges. The banks, without admitting wrongdoing, agreed to reform fraudulent practices, such as “robo-signing” and proceeding with foreclosures on one track while supposedly helping borrowers to adjust terms on another. The settlement reserved the government’s right to continue criminal prosecutions. Schneiderman was made co-director of a federal task force on banking and mortgage abuses headquartered at the Justice Department. Schneiderman’s hope was that the leverage of increased prosecution efforts would compel the banks to part with a lot more money in a second round of settlement talks. But now, the other shoe has dropped and the banks have won again. read more »
The Latest
TARP expected to cost U.S. only $25 billion, CBO says, The Washington Post | November 30, 2010
The Troubled Assets Relief Program, which was widely reviled as a $700 billion bailout for Wall Street titans, is now expected to cost the federal government a mere $25 billion - the equivalent of less than six months of emergency jobless benefits. more »
Bernanke's `Cheap Money' Stimulus Spurs Corporate Investment Outside U.S., bloomberg.com | November 18, 2010
Among all the rhetoric about jobs, stimulus, Keynes, Friedman, the true nature of what grinds on in America's Corporate circles is revealed in this article.
If your in copper you have to go where the copper is. If someone is keen to give you cheap taxpayers' money to do it and is not too bothered about where it gets spent. - you would be a fool not to take it.
Bank Of America Tries To Frame Foreclosure-Gate As Simply A Case Of Misspelled Names, wonkroom.thinkprogress.org | October 26, 2010
Since the foreclosure fraud scandal — in which banks were caught allowing “robo-signers” to approve potentially fraudulent foreclosure forms — first hit the national airwaves, Wall Street banks have been trying to downplay the extent of the problem, claiming that it only has to do with paperwork mistakes and not a compete disregard for due process and property rights. more »
If GOP wins, Expect More Obstruction, The Washington Post | October 19, 2010
I'm cautious about the conventional wisdom that the Democratic Party is about to get flattened by a Republican steamroller. Pollsters are less certain than they'd like you to believe about who's a "likely voter" and who isn't. more »
Sorkin: Felix Rohatyn Looks Back, and Sighs, dealbook.blogs.nytimes.com | October 19, 2010
Felix G. Rohatyn, one of Wall Street’s last old wise-men, was sitting in his office at Lazard overlooking the Empire State Building on Monday morning. more »
The New Tax Man: Big Banks and Hedge Funds, huffpostfund.org | October 19, 2010
Nearly a dozen major banks and hedge funds, anticipating quick profits from homeowners who fall behind on property taxes, are quietly plowing hundreds of millions of dollars into businesses that collect the debts, tack on escalating fees and threaten to foreclose on the homes of those who fail to pay.
How Do We Judge the Homeowner?, Huffington Post | October 19, 2010
In the rush to foreclosure, the banks and even government officials have been taking the position that the borrower/homeowners are fully to blame for the situations they find themselves in and that the paperwork technicalities just need to be worked out in order for there to be a just outcome, which is to say, a foreclosure.
The Washington Post's Entry in the "How Many Big Things Can You Get Wrong in a Short Article?" Contest, cepr.net | October 19, 2010
The Washington Post appears to have outdone itself in a discussion of the politics surrounding the foreclosure crisis. For beginners, it told readers that:
"Reviving the economy requires repairing the housing market." more »
Bondholders Pick a Fight With Banks, The Wall Street Journal | October 19, 2010
As banks restart foreclosures they had suspended, bondholders are stepping up efforts to recoup losses on soured mortgage portfolios amid concern about sloppy mortgage servicing and underwriting practices. more »
Foreclosure Fortune Buys Bugatti, Yacht, Mansions for Attorney, bloomberg.com | October 19, 2010
For Americans, the foreclosure crisis has wiped out fortunes, bringing destitution and homelessness. For Florida attorney David J. Stern, it has brought mansions, a Bugatti sports car and a luxury yacht. Florida has the third-highest residential foreclosure rate in the U.S., and Stern, 50, has made a fortune off the bust. more »
