Day: August 28, 2015

...Go back to the politics of 2009, when the new Obama administration was trying to cope with the most terrifying crisis since the 1930s. The outgoing Bush administration had already engineered a bank bailout, but the Obama team reinforced this effort with a temporary program of deficit spending, while the Federal Reserve sought to bolster the economy by buying lots of assets. And Republicans, across the board, predicted disaster. Deficit spending, they insisted, would cause soaring interest rates and bankruptcy; the Fed's efforts would "debase the dollar" and produce runaway inflation. None of it happened. Interest rates stayed very low, as did inflation. But the G.O.P. never acknowledged, after six full years of being wrong about everything, that the bad things it predicted failed to take place, or showed any willingness to rethink the doctrines that led to those bad predictions. Instead, the party's leading figures kept talking, year after year, as if the disasters they had predicted were actually happening. ...How would the men and women who would be president respond if crisis struck on their watch? And the answer, on the Republican side at least, seems to be: with bluster and China-bashing. Nowhere is there a hint that any of the G.O.P. candidates understand the problem, or the steps that might be needed if the world economy hits another pothole.

Five major banks Wednesday agreed to plead guilty to criminal charges and pay more than $5.5 billion in collective penalties to settle charges their traders routinely manipulated the world's foreign-exchange market for their own profit. The Department of Justice, the Federal Reserve and other U.S. and European authorities and regulators said corporate units of Citicorp(C), JPMorgan Chase (JPM), London-based Barclays(BCS) and Royal Bank of Scotland(RBS) acknowledged their traders rigged foreign exchange prices of U.S. dollars and euros from Dec. 2007 to Jan. 2013.