What you need to know to navigate today’s most critical debates.
S&P Seen Yielding to Tea Party at Taxpayer Expense (Bloomberg)
S&P has downgraded America’s credit rating for the first time in history, citing Congress’s failure to do as it was told in the debt ceiling battle. They shouldn’t feel too bad; it’s not like Congress listened to voters, either.
Credibility, Chutzpah And Debt (NYT)
Paul Krugman makes a compelling case that S&P is a clown car disguised as a ratings agency, but thanks to the GOP’s antics, the US political system isn’t much better.
Standard & Poor’s Predatory Policy Agenda (Naked Capitalism)
Roosevelt Institute Fellow Matt Stoller argues that S&P isn’t wrong by accident, but by design: The agency consistently manipulates the law to serve financial interests.
Standard and Poors versus Mitch McConnell (WaPo)
Greg Sargent notes that Republicans should pause their victory lap and reread the part of S&P’s report that calls out their hostage-taking and refusal to raise a cent of new revenue as reasons to doubt the country’s creditworthiness.
A Contagion of Bad Ideas (Project Syndicate)
Roosevelt Institute Senior Fellow Joseph Stiglitz writes that policymakers in the US and EU have created a feedback loop of self-destructive austerity and regulatory capture that guarantees a long, painful slog toward recovery.
Once Upon a Time in the West (Der Spiegel)
Jakob Augstein confirms that America’s political and social disintegration looks just as bizarre and frustrating from the outside as it does from the inside, and adds that our experience should serve as a wake-up call for Europe to get its act together.
Global Finance Leaders Pledge Bold Action to Calm Markets (NYT)
The ECB is stepping up its efforts to keep Spain and Italy from becoming the next to fall in the eurozone, since they’re more like load-bearing beams than dominoes.
Monetary Policy and Central Banking After the Crisis (NAF)
Thomas Palley challenges the insider notion that central banking can never fail, but only be failed, and proposes a fundamental overhaul of the macroeconomic theory that drives the system.
Second Recession in U.S. Could Be Worse Than First (NYT)
Catherine Rampell warns that like most unnecessary sequels, a second installment of the Great Recession would be really painful. The economy is starting from a weaker position, and policy responses that could have helped are now out of the question.
Geithner tells Obama he will remain as Treasury secretary (WaPo)
Luckily, even if things do take a turn for the worse, we’ll have Tim Geithner’s steady hand at the till for at least another year and a half. If he sticks around long enough, he may even get to write “Welcome to the Recovery, Again (For Real This Time).”
Wall Street’s Tax on Main Street (NYT)
Wall Street’s tricks and traps aren’t just for individual consumers. Gretchen Morgenson reports that many municipalities are experiencing buyer’s remorse over complex financial products that have helped drive them into bankruptcy.
Liberals’ Strange Retreat on Government Spending (TNR)
John Judis worries that some progressives have resigned themselves to the idea that public opposition to more stimulus spending is an immutable fact of life rather than something they can and should be fighting to change.
Revenue Increases on Highest-Income Households Appropriate for Balanced Approach to Budgeting (TCF)
A new report finds that the best way for the government to reduce deficits is to start bringing in more money, according to an advanced formula known as addition and subtraction.
The Spoilsmen: How Congress Corrupted Patent Reform (HuffPo)
Zach Carter provides a detailed account of how what started as an attempt to streamline patent registration and tamp down frivolous lawsuits became yet another opportunity for corporations to rig the system in their favor.
How Congress Devastated Congo (NYT)
A disclosure requirement in Dodd-Frank that was meant to help cut off funding to Congolose warlords has led to a de facto embargo that’s killing the local economy and homegrown reform efforts.
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