Author Archives: Yves Smith

Joe Firestone: Austerian Obama Kisses Platinum Coin Bargaining Chip Goodbye, but the Coin May Rise Again

By Joe Firestone, Ph.D., Managing Director, CEO of the Knowledge Management Consortium International (KMCI), and Director of KMCI’s CKIM Certificate program. He has taught political science as the graduate and undergraduate level and blogs regularly at Corrente, Firedoglake and Daily Kos as letsgetitdone

Yesterday, Ezra Klein mouthpieced for Treasury and Fed 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.

Needless to say, it’s not surprising that a reading of the underlying statutes suggests Obama was free to use the platinum coin to circumvent the debt ceiling, and conveniently scapegoats the Fed to hide his own preference for imposing austerity.

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The CFPB’s New Stealth Usury Law on Mortgages and Why It’s Desirable

With the looming debt ceiling pigfight consuming a lot of financial media bandwidth, some important stories are not getting the attention they warrant. One is on the hard fought and finally settled qualified mortgage rules just finalized by the Consumer Financial Protection Bureau. Georgetown law professor Adam Levitin in a new post describes how the new QM rules are a defacto usury law for the 21st century. Despite his good discussion of the QM and the history of usury laws, however, he peculiarly does not explain why usury laws are a good thing. Perhaps it seems obvious, given the explosion of economically unproductive consumer debt since they’ve effectively been eliminated.

Let me give you the reason why well designed usury laws are desirable, then I’ll turn the mortgage-related issues specifically.

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Untold History: The Coup Against Wallace and What Might Have Been

Real News Network has run an occasional series based on an interview with Peter Kuznick on what he calls “untold history,” which are important junctures in American history that are airbrushed out of the mainstream narrative. Here, Paul Jay and Kuznick continue their discussion of Roosevelt’s wildly popular vice president Henry Wallace and how he was shoved aside in favor of Harry Truman.

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Bill Black: Krugman and Obama’s Dangerous Austerity Myths

By Bill Black, the author of The Best Way to Rob a Bank is to Own One and an associate professor of economics and law at the University of Missouri-Kansas City. Cross posted from http://neweconomicperspectives.org/2012/12/kill-the-fiscal-cliff-instead-of-the-economy.html“>New Economic Perspectives

Austerity in response to the Great Recession has proven to be an economic weapon of mass destruction.

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Philip Pilkington: The Origins of Neoliberalism, Part III – Europe and the Centre-Left Fall under Hayek’s Spell

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil


In the practical art of war, the best thing of all is to take the enemy’s country whole and intact; to shatter and destroy it is not so good.

– Sun Tzu

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Wolf Richter: How Americans Stack Up In Dying From Violence, War, Suicide, And Accidents

Now some new fodder for the gun-control debate that the horrid events in Connecticut suddenly stirred into a frenzy, though it had been snoozing through the daily drumbeat of murders in Oakland, CA, a few miles across the Bay from me, or in Richmond to the north, or really in any other city. The fodder is inconvenient, however. For both sides of the debate.

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Another Nightmare, “Zombie Title” Shows How Servicer Refusal to Foreclose Hurts Stressed Homeowners and Communities

One of the popular conservative memes is to fulminate that lots of Americans have been living “rent free” in homes slotted for foreclosure, taking advantage of the fact that court dockets are crowded. An important Reuters piece documents the flip side of this picture: what happens when the servicer starts foreclosure but keeps the property in limbo-land, and the homeowner has decamped, on the mistaken assumption that foreclosure was imminent? The Reuters tag phrase for this syndrome, “zombie title” doesn’t begin to do justice to the horrorshow that borrowers experience.

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Philip Pilkington: The Origins of Neoliberalism, Part II – The Americanisation of Hayek’s Delusion

By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil

Shared psychotic disorder, or folie à deux, is a rare delusional disorder shared by two or, occasionally, more people with close emotional ties. An extensive review of the literature reveals cases of folie à trois, folie à quatre, folie à famille (all family members), and even a case involving a dog.

– Medscape Reference

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Dan Kervick: US Double-Dip Death Watch Continues

By Dan Kervick, who does research in decision theory and analytic metaphysics. Cross posted from New Economic Perspectives

I thought I would take a break from the latest outburst of debt ceiling mania to call attention once again to the bipartisan plan of budget austerity and recession-tempting economic devastation that will be implemented in March in one form or another, and from which the debt ceiling debate is designed to distract us.

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