Economy & Budget

Default debacle: Epic crisis or epic opportunity

Congress would be well-advised to solve the crisis that has driven its popularity down to levels of defective dog food. There is a real prospect of a U.S. default that would crash the markets and the economy. If default happens, the people of an angry nation would surround both houses of Congress waving pitchforks and lifting a finger that would not be a thumb pointed upward for victory.

In preparation for my column on Thursday I have been privately canvassing opinion on both sides of the aisle and suggesting my own version of a deal, which will be detailed in my column if and only if I believe there is some prospect of success.

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Shutdown and debt-ceiling crises: Tea Party Republicans could crash the world economy

Because of the extremism of their policies and tactics in threatening to shut down the U.S. government within the day and destroy the full faith and credit of the U.S. by denying a debt ceiling increase in mid-October, Republicans in the House of Representatives, dominated by Tea Party fanatics, could crash financial markets around the world this month.

Many of the great financial crashes have historically occurred during October. It could happen again. Let's understand the interplay between the shutdown crisis over spending, which reaches a crescendo today, and the debt-ceiling crisis, which reaches a crash point in mid-October. 

Today the House GOP fanaticism would close the Statue of Liberty and undermine the ability to government to function. And then, the debt-ceiling crisis would be a direct attack on the financial integrity of the U.S. The shutdown crisis further erodes what little credibility remains for the Congress. The debt-ceiling crisis would destroy the good faith and credit of the U.S. itself, shattering confidence throughout global markets and probably causing a financial crash.

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Bailed-out bank to raise rates on Christmas Eve 2013

In my latest column, Banana Republicans 2013, I criticized rightist Republicans who again threaten to shut down the government over spending bills and then trigger a default during the coming debt-ceiling debate.

That column generated significant reader interest, and this sequel is equally noteworthy. A coming financial firestorm will involve banana republic bankers: bailed-out banks jacking up fees and interest rates as their holiday gift to taxpayers who paid for their bailout.

The "Today" show on Friday aired an excellent segment about the latest surge in bank fees. I just learned that my own bank, one of the largest banks in America that received some of the largest bailouts, is attacking its customers with new fees and Mafia-like interest rates. In my case — I kid you not — they go into effect Dec. 24, 2013, on Christmas Eve.

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DC mayor suggests sequester may have played a role in latest gun violence

Don't miss the story in The Hill in which Washington Mayor Vincent Gray suggests that cuts in the defense budget from the sequester may have contributed to the latest mass murder that shook the nation Monday.

It is too early to conclude, and I am not suggesting here, that Defense Department security spending was cut in a way that helped the killer gain access to the Navy Yard. Though I am charging this: The sequester has done significant harm to the American economy and should be repealed.

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The Federal Reserve and economic folly

The chairman of the Federal Reserve Board is the most important economic job in America. With President Obama and Congress unable to agree on major economic policies, the leadership of the Fed is more economically important than the president, the secretary of the Treasury, the House, and the Senate.

To some degree I agree with the view of libertarians such as former Rep. Ron Paul (R-Texas) that the Fed has become a de facto bailout agency for banks. I strongly disagree with Paul and others about this: The great economic folly is the failure of any policy to boldly create jobs, and the Fed needs to boldly act, but act in different ways than top-down monetary policy.

With Lawrence Summers no longer under consideration for the Fed job, Obama should nominate Janet Yellen to chair the Fed. Yellen is an internationally respected economist with a long track record of being proven right.

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Jobless rate is a national scandal, and nobody in Washington cares

The new jobless numbers are out, and the core jobless rate is a punishing 7.3 percent. It would be much higher, except the number of Americans who became depressed and just dropped out of the labor force is now at its highest in 35 years.

The real jobless rate is almost double that. This is a scandal. Shame on President Obama. Shame on Republicans. Shame on Congress. And shame on the media.

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Bitcoins, the Boston Bruins and the free state of Texas

Before you buy a bitcoin you should recognize that its logo is almost identical to that of the Boston Bruins. Was this intentional? Hard to say. I’d ask, but I can’t find them. 

As I understand it, the bitcoin is about “placelessness,” like the beginning of the computer days when people would not sign journals or letters with a place stated because they were from the computer astral zone — the world, the universe, like Andromeda, someplace in the sky, hovering. 

The Boston Bruins, however, understand what the circle divided into eight parts, which some bitcoins have as background for the B, means. They are smart. Their totem animal is the bear. An eight-sided divided circle — “Lost” devotees and Tibetan monks know this — is called a bagua. It is a diagram of the universe and comprehensive map of human consciousness. It is why some of the Bruins' very best hockey players, like Bobby Orr, can — like those kung fu monks — actually fly.

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Ron Paul, Elizabeth Warren, John McCain can agree about Fabrice ('Fabulous Fab') Tourre

In my last column, I opposed the potential nomination of Lawrence Summers to be the next chairman of the Federal Reserve Board.

America does not need a Fed Chairman who embodies the revolving door between Washington and Wall Street. And now the jury has spoken on the matter of Fabrice Tourre, the very young multimillionaire from Goldman Sachs who called himself "Fabulous Fab" and has now been convicted of fraud.

Anybody notice the case of this junior Goldman Sachs employee involved the highest-ranking official charged by the SEC after the financial scandals, as the statute of limitations soon expires for his superiors?

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The Cuckoo Caucus

There is a new group in town – that's ready to take the country over the cliff.

I am not talking about the Tea Party members of the House — the Michele Bachmanns, Steve Kings and Joe Wilsons, and 50 or so others who are members of the Tea Party Caucus. I am talking about the Senate, the greatest deliberative body.

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