In 2011 and 2012, many thought the Euro might break up due to the sovereign debt crisis. Unlike countries that have their own currency, countries in the Eurozone are dependent on the monetary policy of the European Central Bank (ECB). This disconnect makes Euro countries much more vulnerable than other countries to solvency crises. Since, then, however the new chief of the ECB, Mario Draghi, has engaged in a bond-buying program of Outright Monetary Transactions (OMTs) which has helped struggling periphery countries (Spain, Greece, Portugal, Italy, etc) stay solvent.
But while this has lowered interest rates in the struggling countries — and done enough to keep the Euro together — it has not been enough to get Europe out of the woods. Unemployment still remains cataclysmically high in Greece, Spain, Portugal, Italy, and high throughout the Eurozone. And now with inflation rapidly falling, many are worried that Europe is falling into debt deflation. Of course, Europe as a whole is not in deflation yet.
But as Paul Krugman argues, the process is already under way:
I'd say that to have debt deflation — in which falling prices due to a weak economy increase the real burden of debt, which depresses the economy further, and so on — you don't need to have literal deflation. The process begins as soon as you have lower inflation than expected when interest rates were set. It's also noteworthy that inflation rates in the highly indebted countries are all well below the eurozone average, with actual deflation in Greece and near-deflation in the rest. So the debt deflation spiral is in fact well underway. [The New York Times]
Europe's approach throughout the crisis has been to do the very minimum necessary to keep the Euro system afloat. It remains to be seen if that is an approach compatible with an economic recovery anytime soon. John Aziz
We already know Gwen Stefani ain't no hollaback girl, but now there's definitive proof that George Clooney isn't one, either.
In the latest installment of carpool karaoke with James Corden, Stefani and the host drive around Los Angeles, singing some of Stefani's greatest hits from her No Doubt and solo albums. Between songs, Stefani, bouncing with so much energy her seatbelt can barely contain her, acts out emojis (except the eggplant) and shares her tips for looking ageless (fall in love and have a hit record). Realizing that they need two more people in order to use the carpool lane, Corden picks up a few very special guests — Clooney and Julia Roberts — and we soon learn that Clooney can spell out "bananas" and knows enough of Stefani's lyrics that he could fill in for her onstage if it's ever necessary.
Watch the video below to see the foursome tackle Queen and share their deep thoughts on what exactly it means to be a hollaback girl. Catherine Garcia
A lot has gone on in the past 48 hours — after Ted Cruz and John Kasich dropped out of the presidential race, Donald Trump became the presumptive Republican nominee, but not before he repeated a conspiracy theory about Cruz's father being with Lee Harvey Oswald before JFK's assassination and Cruz was heckled by a middle schooler.
On Wednesday, Seth Meyers took a closer look at all of these events, and how Trump became the last candidate standing. Republicans, he said, should really think about how a "race baiting, xenophobic, serial liar" like Trump became the presumptive candidate. "It's not a fluke," Meyers said. "The Republican Party is the party of Donald Trump and has been for years." With that, he introduced a clip from all the way back in 2009, when the birther movement, which starred Trump, was going strong. Watch the video below to hear more from Meyers on how Republicans are falling in line behind Trump, including those who previously said they'd never hop aboard the Trump Train. Catherine Garcia
Now that the Republican field has been whittled down to Donald Trump, Conan O'Brien decided to give a proper farewell to the 16 candidates who failed to outlast him. Starting with Rick Perry and ending with John Kasich, O'Brien shared the "reason" why each person dropped out — try to guess which candidate was "kicked to death by mother for shaming family name" and who "actually passed away three years ago." Catherine Garcia
With Donald Trump the only Republican left in the 2016 race, Jimmy Fallon put on his Trump outfit on Wednesday's Tonight Show and called his President Obama impersonator to brag a bit. Fake Obama congratulated fake Trump on the real Trump's presumptive victory, and Fallon poked fun at Hillary Clinton. "Now that Ted Cruz dropped out, there's only one man standing in my way," Trump said. "You mean, John Kasich?" Obama asked. "No, Hillary."
Trump got his share of mockery, too. "I watched your speech at the White House Correspondents' Dinner — it was hilarious," Fallon's Trump said. "I watched your speech on foreign policy, and the feeling is mutual, buddy," Obama replied. Watch below to see the two discuss Bernie Sanders, Game of Thrones, Beyoncé, and whether Obama would be Trump's running mate (spoiler: "Oh hell no!"). Peter Weber
President Obama is being sued by an Army captain who says the president doesn't have the congressional authority to fight the Islamic State in Syria and Iraq.
On Wednesday, Army Capt. Nathan Michael Smith filed his suit in U.S. District Court in Washington. The White House is using congressional authorizations given to George W. Bush after the Sept. 11, 2001, attacks, and says it has all the authority necessary to wage a war against ISIS. Smith says he wants the court to order Obama to ask Congress for a new Authorization for the Use of Military Force, The Associated Press reports. In his suit, Smith says "this lawlessness has made it impossible" for him to "determine whether his present mission is inconsistent with his oath to 'preserve, protect, and defend the Constitution of the United States,' thus requiring him to seek an independent determination of this matter from the court."
Smith calls ISIS an "army of butchers," and says he supports the war on military and moral grounds. The White House has not commented on the suit. Catherine Garcia
Former Sen. Bob Bennett of Utah died Wednesday after a suffering a stroke and battling pancreatic cancer. He was 82.
Bennett, a Republican, was born Sept. 19, 1933, in Salt Lake City. His father, Wallace F. Bennett, was also a senator, serving from 1951 to 1977, and for a time, his son was his top aide. Before he was first elected to the Senate in 1992, Bennett worked as a lobbyist for J.C. Penney Co., was a congressional liaison for the Transportation Department during the Nixon administration, and purchased Robert R. Mullen Co., a public relations firm and CIA cover organization, the Salt Lake Tribune reports. One of his most famous clients was the reclusive tycoon Howard Hughes.
Bennett was known for working with both Republicans and Democrats to get things done, and helped bring federal dollars to Utah for a freeway project and the 2002 Winter Olympics in Salt Lake City. "He was respected by men and women on both sides of the aisle, not only for his expertise but also for his common touch, his common sense, and his commitment to uncommon virtues," Mitt Romney said in a statement. Bennett was criticized by members of the Tea Party for voting for the Troubled Asset Relief Program (TARP), and lost his 2010 re-election bid at the Republican state convention to Sen. Mike Lee. After leaving the Senate, he started a consulting firm and taught at the University of Utah and George Washington University School of Media and Public Affairs. Bennett is survived by his wife, Joyce, six children, and 20 grandchildren. Catherine Garcia
California Gov. Jerry Brown (D) signed a bill on Wednesday that raises the state's smoking age to 21, from 18.
"The governor's signature on Tobacco 21 is a signal that California presents a united front against Big Tobacco," state Sen. Ed Hernandez (D) said in a statement. "Together, we stand to disrupt the chain of adolescent addiction." Brown also signed a bill that restricts the use of e-cigarettes in public spaces. California is now the second U.S. state to raise the smoking age to 21, after Hawaii. Active military members are exempt from the law.
The bills were backed by the American Heart Association, American Lung Association, and American Cancer Society, and will become effective on June 9. The National Survey on Drug Use and and Health reports that 90 percent of tobacco users start smoking before the age of 21 and 80 percent try it before 18, and a 2015 Institute of Medicine study estimates that by making 21 the legal age to buy tobacco, there will be 200,000 fewer early deaths for people born between 2000 and 2019. Before the bills were signed, the tobacco industry threatened to seek a referendum vote to overturn them, the Los Angeles Times reports. Catherine Garcia