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.
Globalisation 'not to blame' for income woes, study says (Financial Times) The "hollowing out" effect in the 80th to 90th percentiles of global income does not reflect on losses in the developed world to emerging economies; it is rather largely from losses in the former Soviet Republics and Japan. Poor in the U.S. actually had a higher global ranking in 2008 than they did in 1988.
Government funding talks stall (The Hill) Negotiations over a stopgap measure to fund the government until Dec. 9 have stalled amid squabbling among Republicans over controversial riders related to Zika funding and the Export-Import Bank. Minority leader Harry Reid said Democrats expected an offer on Friday, but the proposal was delayed because of dissension within the Senate GOP conference over letting Planned Parenthood, a family-planning services group, have access to federal funds for fighting the Zika virus, which can cause severe birth defects. Republicans reject assertions that they have purposefully targeted Planned Parenthood as a "poison pill" rider.
Buffett Loses $1.4 Billion as Wells Fargo Tumbles on Scandal (Bloomberg) Warren Buffett had $1.4 billion wiped from his fortune Tuesday after Wells Fargo & Co. fell 3.3% as the fallout continued from revelations that bank employees had opened more than 2 million accounts without clients' approval. Berkshire Hathaway Inc., the lender's biggest shareholder, fell 2%, causing the 86-year-old's fortune to drop more than anyone else's on the Bloomberg Billionaires Index. The U.S. investor is the world's fourth-richest person with a net worth of $65.8 billion. Wells Fargo (NYSE:WFC) is down over 13% year-to-date. The second graph below shows 2016 returns for Berkshire Hathaway (NYSE:BRK-A, NYSE:BRK-B) top holdings.
U.S. household income posts record surge in 2015, poverty falls (Reuters) U.S. household income posted a record increase in 2015 after years of stagnation, suggesting the recovery from the Great Recession was finally lifting ordinary citizens who had been largely left behind. The Census Bureau said on Tuesday that median household income surged 5.2% last year to $56,500, the highest since 2007, in large part due to solid employment gains. The jump was the biggest since record keeping began in 1968. Trudi Renwick, an assistant division chief at the Census Bureau, said on a conference call with reporters it was striking that median household income rose across the board. "It's up for almost every age group of household heads. It's up for almost every racial group," except Asians, she said. See also next two articles.
Why Working-Age Men Are Disappearing From The Workforce (Advisor Perspectives) A book by Nicholas Eberstadtof the American Enterprise Institute, entitled "Men Without Work" is discussed in this article by Mark Halburt. Some 8-10 million working-age (25-54) US males have disappeared from the workforce and many, if not most, have given up looking for work. According to Mr. Eberstadt, nearly one out of six working-age men have no job and are no longer looking for one. In less than a generation, he says, it will be one out of five (20%) if something doesn't change. This has been building over several decades. Eberhart sees this as a social crisis. Here are two excerpts:
Who are America's new cadre of prime-age male unworkers? They tend to be: 1) less educated; 2) never married; 3) native born; and 4) African-American. But those categories intersect in interesting ways. Black married men are more likely to be in the workforce than unmarried whites. Immigrants are more likely to be working or job-hunting than native-born Americans, regardless of ethnicity.[Emphasis added.]
What do unworking men do with their free time? Sadly, not much that's constructive. About a tenth are students trying to improve their circumstances. But the overwhelming majority are what the British call NEET: 'neither employed nor in education or training.'
"What we might call 'sociological' factors are evident, not least the tremendous rise in unworking men who draw from government disability and means-tested benefit programs. There are also the barriers to work for America's huge pool of male ex-prisoners and felons not behind bars. Regardless of its cause, this new normal is a threat to America's national interests.
Declining labor-force participation and falling work rates have contributed to slower economic growth and widening gaps in income and wealth. Slower growth in turn reduces tax revenue and increases budgetary pressures, producing higher deficits and national debt. Unworking men have increased poverty in the US, not least among the great many children whose fathers are without jobs.
There are the social effects, too. The male retreat from the labor force has exacerbated family breakdown, promoted welfare dependence and recast 'disability' into a viable alternative lifestyle. Among these men the death of work seems to mean also the death of civic engagement, community participation and voluntary association.
In short, the American male's postwar flight from work is a grave social ill. Strangely, nearly everyone - the news media, major political parties, intellectuals, business leaders, policy makers - has managed to overlook it. The urgency of the moment is to bring this invisible crisis out of the shadows.
Republicans criticize Obama's plan to admit 110,000 refugees (The Hill) Some Republicans have criticized President Obama's plans to admit 110,000 refugees to the United States over the next year. That number is 10,000 more than the president's original goal, according to Politico. A senior Obama administration official told Politico late Tuesday night the decision to admit 110,000 refugees "is consistent with our belief that all our countries should do more to help the world's most vulnerable people." The administration said it would attempt to admit a "significantly higher" number of Syrian refugees in the next fiscal year, according to an 82-page report to Congress obtained by Politico.
Jean-Claude Juncker: EU is facing existential crisis (The Guardian) The European Union is facing an existential crisis, the president of the European commission, Jean-Claude Juncker, will say on Wednesday, as he announces a raft of economic and security plans in the search for common ground in the wake of the British vote to leave. In his annual state of the union address to the European parliament, Juncker will say commonality between EU member states has never been so low, with governments everywhere quicker to say what they don't want from Brussels rather than work together. The EU executive hopes to find the elusive common ground with a plan to boost the EU's infrastructure fund by increasing its value to €500 billion (£425 billion, $560 billion). Juncker will also press for speedy implementation of a recently agreed law to create an EU border and coastguard to ensure better control of migrants arriving from the Middle East and Africa.
Syria ceasefire: Emergency aid expected soon for Aleppo (BBC News) Aid trucks are waiting to deliver supplies to besieged Syrians amid a nationwide ceasefire that largely appears to be holding on its first full day, the UN says. It is hoped that emergency aid deliveries will start on Wednesday. Russian forces are monitoring the ceasefire along a key access road in northern Syria that leads to rebel-held eastern Aleppo, reports say. Some 250,000 civilians are trapped there.
Is Mosul heading for a last 'apocalyptic' IS stand? (BBC News) The operation to drive so-called Islamic State (IS) from Iraq's second-largest city has been long promised and much delayed. The latest indications are it could begin next month, more than two years after IS took Mosul and proclaimed its caliphate. The northern city is now the last bastion of IS in Iraq. The authorities in Baghdad say the liberation of Mosul will spell the end of IS on Iraqi soil. Some predict the likely power-struggle afterwards could spell the end for Iraq, in its current form.
Westpac jobs index tanks with PMIs (Macro Business) The latest update of the Westpac Jobs Index reveals at first glance what appears to be a considerable dip in Australian business' assessment of the labor market. However, at 50.0 the Aug reading of the Index is still consistent with average or trend employment growth.
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