What we’re reading (10/4)
“Wonking Out: Biden Should Ignore The Debt Limit And Mint a $1 Trillion Coin” (Paul Krugman, New York Times). Caveat emptor—not sure this kind of devaluation is advisable, but worth reading nonetheless: “there’s a strange provision in U.S. law that empowers the Treasury secretary to mint and issue platinum coins in any quantity and denomination she chooses. Presumably the purpose of this provision was to allow the creation of coins celebrating people or events. But the language doesn’t say that. So on the face of it, Janet Yellen could mint a platinum coin with a face value of $1 trillion — no, it needn’t include $1 trillion worth of platinum — deposit it at the Federal Reserve and draw on that account to keep paying the government’s bills without borrowing.”
“Car Sales Plunge As Chip Shortages Choke Off Supply” (CNN Business). “New car sales plunged over the last three months in the United States despite strong demand, as the shortage of computer chips and other supply chain issues caused shutdowns at auto factories and choked off the supply of vehicles. General Motors reported sales fell a third from a year-ago last quarter, and they were off 40% from the same quarter of 2019 before the pandemic roiled the car market. Sales at Stellantis, the company formed by the merger of Fiat Chrysler and France's PSA Group, fell 19% from a year ago, and 27% from the pre-pandemic period.”
“Balancing Honesty And Optimism In Silicon Valley” (DealBook). “‘It’s a thin line between a start-up and a Ponzi scheme,’ Mr. Ries [an entrepreneur] said. ‘Generally speaking, you are asking people to invest in something that doesn’t yet exist on the basis that you will bring it into existence.’ That requires a certain amount of bravado, optimism and experimentation, a combination that has often been rewarded: Zappos bought shoes from a shoe store before it shipped them from its warehouse, Apple announced its first iPhone before it had figured out how to mass-produce its prototypes, and Reddit populated its site with fake users to demonstrate desired behavior.”
“Powell Said The Fed Has No Plans To Ban Crypto. Here Is What Experts Say May Lie Ahead For Crypto Regulation As Authorities Tighten Their Grip.” (Insider). “When Federal Reserve Chair Jerome Powell said he has no intentions of banning cryptocurrency during a Congress testimony just days after China intensified its crackdown by banning all related transactions, many in the digital asset space were pleased but not surprised. ‘It's hard for me to believe that US regulators would decide that was the best course of action given the role that cryptocurrencies are playing in so many citizens' lives,’ Bobby Zagotta, US CEO of crypto exchange Bitstamp, told Insider. ‘I think doing that would be incredibly disruptive and it would really put the US and the economy in a compromised situation.’”
“Pandora Papers: Biggest Ever Leak Of Offshore Data Exposes Financial Secrets Of Rich And Powerful” (The Guardian). “The secret deals and hidden assets of some of the world’s richest and most powerful people have been revealed in the biggest trove of leaked offshore data in history. Branded the Pandora papers, the cache includes 11.9m files from companies hired by wealthy clients to create offshore structures and trusts in tax havens such as Panama, Dubai, Monaco, Switzerland and the Cayman Islands.”
