Daily digest – Repeating the past
What you need to know to navigate today’s most critical debates.
Did 9/11 Cause the Financial Crisis? (TAP)
Low interest rates were meant to soften the economic impact of 9/11, but Linda Bilmes believes the Fed’s good intentions paved the road toward a catastrophic housing bubble.
Johnson and Roosevelt Legacies at Stake in Fiscal Fight (NYT)
As the deficit reduction debate plays out, Republicans are hoping to prove once and for all that Social Security and Medicare are ineffective and insolvent by cutting the programs’ benefits and denying them adequate funding.
FDR’s lessons for Obama (WaPo)
If Barack Obama is going to be fighting his predecessor’s battles, Andrei Cherny advises him to study how FDR won them: by drawing clear contrasts with his opponents and having the courage to offer new ideas.
To Pass Jobs Act, Obama Should Channel LBJ (Bloomberg)
Jonathan Alter thinks Obama needs to enforce a new rule with the GOP: Either get on board with the jobs plan and reap the benefits, or vote against it and let other districts enjoy the extra money, which won’t help them anyway… right?
One Obstacle to Obama’s New Plan to Help Homeowners: A Gov’t Regulator (ProPublica)
If the president’s new mortgage refinancing plan seems a bit vague, it’s because he’s trying to slap a fresh coat of paint on the old one, and the Federal Housing Finance Agency isn’t so sure it wants to hand over the brush.
The Infrastructure Privatization Bank (Reuters)
Cate Long notes that with Obama’s plan likely to be modeled on one that emphasizes the role of private investment, the infrastructure bank could turn “If you believe that, I’ve got a bridge to sell you” into a genuine offer.
Who Will the Super-Committee Fight For? (The Nation)
Katrina vanden Heuvel writes that the twelve knights of the deficit round table should keep in mind that they’re supposed to be representing their constituents, not the lobbyists who kicked in the most money to their last campaign.
The magical world of voodoo ‘economists’ (WaPo)
Steve Pearlstein notes that the GOP presidential field has rejected Keynesian economics as thoroughly as the theory of evolution, and if they turn back the clock much further, they may wind up debating the shape of the Earth.
An Impeccable Disaster (NYT)
Paul Krugman argues that the ECB’s moral crusade against inflation is forcing countries like Spain and Italy to pay for sins they never committed. Sadly, facilitating a total economic collapse can tarnish any central bank’s sterling reputation.
Volcker Rule Delay Is Likely (WSJ)
Regulators are going to blow Dodd-Frank’s October 18 deadline for adopting limits on proprietary trading, since they’re still working on finishing their first draft. The law can say whatever it wants, but you just can’t rush this kind of art.
Clawbacks Without Claws (NYT)
Sarbanes-Oxley was supposed to keep financial execs in line by empowering the SEC to make them fork over their incentive pay, but Gretchen Morgenson reports that the regulator has decided that actually demanding all that money is too gauche.
Is Manufacturing Falling Off the Radar? (NYT)
Louis Uchitelle points out that for all their talk of boosting exports and renegotiating trade deals, policymakers haven’t really bothered to figure out a plan to get America to start making things again.
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