Elizabeth Warren is officially running for the Senate seat held by Scott Brown.

There are several reasons to cheer this. For starters, she is the most compelling new progressive leader to come along in many a year. At a time with few genuine public figures who command admiration, Warren is one.

She knows how to play inside politics brilliantly, but is also a figure of rare integrity on rallying the spirits of a grass roots progressive base.

In the late 1920s, the French minister of war was one Andre Maginot, a World War I veteran with a handlebar mustache and a limp. M. Maginot, learning the lessons of the last war, had the idea that if France could just build an impregnable fortification on its eastern frontiers, Germany could never again invade it.

So between 1930 and 1940, at a cost of 3 billion francs, France constructed the unfortunate Maginot Line. When Hitler decided to invade, his Wermacht simply went around it, via Luxembourg and Belgium.

In the financial crisis, the signature of the credit-rating companies has been that they are a day late and a dollar short. In this case, $2 trillion. S&P made a $2 trillion error in the computations that were the basis of its rationale for downgrading Treasury securities.

But that was petty cash compared to what credit-rating companies cost the world economy when they corruptly took money from issuers of subprime bonds to help them come up with a formula to justify a triple-A rating.

A number of commentators have asked: Why did the president categorically reject recourse to the 14th Amendment to raise the debt ceiling, even as a bargaining chit, when that rejection forced Democrats to accept a deal mostly on Republican terms?

The New York Times' Joe Nocera writes:

My own view is that Obama should have played the 14th Amendment card, using its language about "the validity of the public debt" to unilaterally raise the debt ceiling....Inexplicably, he chose instead a course of action that maximized the leverage of the Republican extremists."

Well, let me explain the inexplicable.

The deal negotiated last night is a disaster politically and economically. The liberals who went all out to elect Barack Obama have been reacting with increasing dismay to the president's combination of center-right impulses and inept negotiating habits.

The right plays hardball, is rewarded for its intransigence, creating incentives to play more hardball. Its success in this crucial round portends an even harder line when Congress has to take up Part II of the bargain.

That construction is heads-I-win-tails-you-lose. As a precondition to the next increase in the debt ceiling, Congress either votes even deeper cuts or a "trigger" causes them to take effect automatically.

Like most American spectators watching this slow-motion train wreck of a budget disaster, I have assumed that at the last minute the damsel would be pulled off the track of the oncoming train. Somehow, the Republicans would appreciate the stakes, a compromise (albeit on sickeningly Republican terms) would be reached, and the nation would be spared the catastrophe of default -- a gratuitous deepening of an already dire economic mess.

Now I am not so sure. In the last 48 hours, the Republicans have dug in even more, and Democrats are drawing the line at the Reid plan (which is already far too Republican).

The EU's bailout deal for Greece was slightly more generous than expected -- $159 billion of refinancing, of which private bondholders, mainly banks, are expected to eat about 20 percent of the loss. However, rating agencies are arguing that this will be technically considered a default, triggering payments under credit-default swaps; and there is still the ticklish matter of persuading banks to "voluntarily" accept the loss.