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posted on 13 August 2016

Early Headlines: Equal Pay For Women GDP Boost, New Pipeline From N. Dakota, 'Austerity Based On Lies', Record Shorts For Pound, Italy, Ireland New Bond Rate Lows, Foreign Labor Nightmare Saudi Arabia And More

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Early Bird Headlines 13 August 2016

Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.



  • How advancing women's equality can add $12 trillion to global growth (McKinsey) A new McKinsey Global Institute report finds that $12 trillion could be added to global GDP by 2025 by advancing women's equality. The public, private, and social sectors will need to act to close gender gaps in work and society. This number is not the highest estimate: In a "full potential" scenario in which women play an identical role in labor markets to that of men, as much as $28 trillion, or 26%, could be added to global annual GDP by 2025. MGI's full-potential estimate is about double the average estimate of other recent studies, reflecting the fact that MGI has taken a more comprehensive view of gender inequality in work. Econintersect: This appears to be a measure of increased cash flows only. No consideration seems to be given to increased production. So what is proposed is an increase in labor compensation for the same output. That raises two questions: (1) How does this not produce inflation increased by about 0.9% a year (or 2% for the "full-potential" estimate)? Perhaps this is desirable in today's disinflationary environment - but will that last for another 9 years? (2) Doesn't this expansion of wages constitute a redistribution of income from capital to labor? Perhaps this is economically desirable, or perhaps not, but the question is not even mentioned by McKinsey.



  • Big Dakota pipeline to upend oil delivery in U.S. (Reuters) At the moment, crude oil moving out of North Dakota's prolific Bakken shale to "refinery row" in the U.S. Gulf must travel a circuitous route through the Rocky Mountains or the Midwest and into Oklahoma, before heading south to the Gulf of Mexico. The 450,000 barrel-per-day Dakota Access line, when it opens in the fourth quarter, will change that by providing U.S. Gulf refiners another option for crude supply. Gulf Coast refiners and North Dakota oil producers will reap the benefits. Losers will include the struggling oil-by-rail industry which now brings crude to the coasts. The pipeline also will create headaches for East and West Coast refiners, which serve the most heavily populated parts of the United States and consume a combined 4.1 million barrels of crude daily. They will have to rely more on foreign imports.

  • Donald Trump claims 'cheating' is only way he can lose Pennsylvania (The Guardian) Donald Trump has stepped up his argument that the presidential election will be rigged in favor of Hillary Clinton, claiming that the only way he can lose Pennsylvania is "if cheating goes on". Whereas Trump regularly cited opinion polls when he was winning the Republican primaries, his poor showing in recent national surveys has left him sowing doubt about the integrity of the process, even before a vote is cast.


  • Owen Jones talks to Ha-Joon Chang: 'austerity is based on lies' - video interview (The Guardian) International bestselling economist, Ha-Joon Chang, tells the Guardian's Owen Jones that there is no need for the Conservative party's austerity program. Chang says austerity is a 'self-defeating strategy' and an attempt to undermine the welfare state. The Cambridge professor also discusses inequality, asking whether the UK has 'socialism for the rich and capitalism for the poor'.


  • Carney to Ignore Inflation Overshoot as Economists See Rate Cut (Bloomberg) Economists in a Bloomberg survey predict another interest-rate cut in November, adding to the stimulus unveiled this month, even as they see U.K. inflation busting through policy makers' 2% target just months later. The survey also puts the probability of Britain sliding into a recession in the next 12 months at a record 48 percent, underscoring the dilemma as the BOE weighs the risk of stoking further inflation against inaction in the face of a Brexit-induced slump.







Saudi Arabia

  • Saudi Building Bust Traps Thousands in Desert Nightmare (Bloomberg) First they had no pay, and then no work. For a time, there wasn't even food in the squalid, concrete camps where they had been abandoned to live in the searing heat of the Saudi Arabian desert. Medical supplies dried up two months ago. Owed weeks and weeks of back pay from construction companies squeezed by the kingdom's economic slowdown, thousands of foreign laborers from South Asia face the grim uncertainty of how long their plight will continue. Abandoned laborers, including nearly 16,000 from India and Pakistan alone, according to their governments, haven't seen a paycheck in about eight months. Under a system of sponsorship known as kafala that leaves many workers at their employers' mercy, they're also not being given the exit visas they need to leave the world's largest oil exporter. In Saudi Arabia, it's up to employers to arrange such visas, but before doing so they'd have to pay back wages and end-of-service benefits.


  • Acceptable Losses (Andrew Cockburn, Harpers) Hat tips to Roger Erickson and Chuck Spinney. The U.S. and NATO are guilty of aiding and abetting the Wahhibi Sunni's governing Saudi Arabia who are slaughtering the Shia tribal areas of Yemen. Here is the introduction to this article:

Just a few short years ago, Yemen was judged to be among the poorest countries in the world, ranking 154th out of the 187 nations on the U.N.'s Human Development Index. One in every five Yemenis went hungry. Almost one in three was unemployed. Every year, 40,000 children died before their fifth birthday, and experts predicted the country would soon run out of water.

Such was the dire condition of the country before Saudi Arabia unleashed a bombing campaign in March 2015, which has destroyed warehouses, factories, power plants, ports, hospitals, water tanks, gas stations, and bridges, along with miscellaneous targets ranging from donkey carts to wedding parties to archaeological monuments. Thousands of civilians - no one knows how many - have been killed or wounded. Along with the bombing, the Saudis have enforced a blockade, cutting off supplies of food, fuel, and medicine. A year and a half into the war, the health system has largely broken down, and much of the country is on the brink of starvation.

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