The commentary on the debt ceiling standoff has featured a bunch of mistaken conceptions from across the political spectrum. Let's address them.
Myth #1: The 14th Amendment Prohibits a Default
A variety of commentators claim that the 14th Amendment prohibits the United States from defaulting. It does nothing of the sort. Read the text of the Public Debt Clause:
This fall the Supreme Court will be hear a case captioned Community Financial Services of America v. Consumer Financial Protection Bureau, dealing with the constitutionality of the CFPB's funding mechanism. I'm pleased to announce that Patricia McCoy and I filed an amicus brief today in support of the CFPB.
Anna, Adam, and myself have a piece up on Alphaville about section four of the 14th Amendment, which is all the rage these days.
When I was a law student the rule I learned about secured claims was that they accrue post-petition interest and attorneys' fees (if provided for by contract or statute) up to the amount of the value of the collateral that exceeds their claims, but then nothing further once they are fully secured. That was an easy enough rule to apply.
(Why) do prices and inflation rates differ within the euro area? We study the relevance of a national border for grocery prices in the otherwise homogenous and highly integrated border region between Austria and Germany. Using transaction data on prices and quantities from a large household panel survey, we compare the prices of identical products within a narrow band along the border. We find large assortment and price differences between the two countries. Even within multinational retail chains the prices of identical products on each side of the border differ on average by about 21%.
(Why) do prices and inflation rates differ within the euro area? We study the relevance of a national border for grocery prices in the otherwise homogenous and highly integrated border region between Austria and Germany. Using transaction data on prices and quantities from a large household panel survey, we compare the prices of identical products within a narrow band along the border. We find large assortment and price differences between the two countries. Even within multinational retail chains the prices of identical products on each side of the border differ on average by about 21%.
[Updated 4.12.23 to reflect the transcript of the first day hearing with much more detailed analysis of LTL's arguments regarding fraudulent transfer allegations.]
This post is a joint post by Hon. Judith K. Fitzgerald (ret.)[*] and Adam Levitin
Here we go again. Precisely one hour and thirty-nine minutes after the dismissal of the bankruptcy filing of LTL, Johnson & Johnson’s artificially created talc-liability subsidiary, the company was right back at it again with the filing of a new chapter 11 case in New Jersey, again assigned to Judge Kaplan.
In a few hours, I'll have the pleasure of hosting CFPB Director Rohit Chopra for a virtual talk at UCI Law (today at 12pm PDT, 3pm PDT). You can still join us by registering for the Zoom link here.
A mid-sized regional bank specializing in lending to tech start-ups, crypto companies, or law firms hardly seems of systemic importance, even if its failure would have caused disruption in some industries regionally and might have triggered a cascade of corporate bankruptcies because of large uninsured deposit balances. That sort of collateral damage from a bank failure is unfortunate and painful for those involved, but that's the nature of market discipline.
