Econintersect: Every day our editors collect the most interesting things they find from around the internet and present a summary "reading list" which will include very brief summaries (and sometimes longer ones) of why each item has gotten our attention. Suggestions from readers for "reading list" items are gratefully reviewed, although sometimes space limits the number included.
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Topics today include:
Quantum Microscope Spies on Atoms in Chemical Reactions in Real Time
Why Pre-Existing Conditions Should Be Left to the Market
Legal Drinking Ages Around the World (Animated Map)
Banks are About to Get a Huge Windfall Thanks to Trump
$5 Billion in Muni Gains Lost by Top Insurers Since Election
Kim Jong Un Lights Fires Across Asia, Raising Dilemma for Trump
GOP Law May Cost 10 Million their Health Insurance
Trump Endorses House GOP Plan, Health Secretary Says "A Work in Progress'
Opposition Grows for GOP Heathcare Plan
U.S. Senate Revokes Obama Federal Land-planning Rule
Ivanka's Clothing Line Reports Record Sales
U.S. Women in Workforce Fall Behind Other Countries
Shifting U.S. Political Landscape 1994-2015 (Animated Graphic)
Costs to Germany Keep Rising for Eurozone Breakup
Russian Hackers Blackmail U.S. Liberal Groups
Russian Economy Much Stronger than Previously Reported
China's Running Out of Time to Cut Excess Capacity
What's Driving Australia's Property Boom?
From this point on this post is normally only available to GEI Members (free newsletter subscribers) and is accessed upon opening the newsletter e-mail each day.
Articles about events, conflicts and disease around the world
Kim Jong Un Lights Fires Across Asia, Raising Dilemma for Trump (Bloomberg) Murder in Malaysia. Protests in China. And missiles flying toward Japan. All can be traced back to North Korea and show how Kim Jong Un is managing to stir up tensions in the region while trying to provoke a reaction from U.S. President Donald Trump. The question for Trump, Xi Jinping and other leaders is how to respond, given sanctions, cajoling and military pressure have all failed to rein Kim in.
10 million may lose health insurance coverage under GOP's Obamacare replacement plan, S&P says (CNBC) Between 6 million and 10 million people would lose health insurance coverage if a Republican proposal to replace the Affordable Care Act becomes law, a new report estimates. The top end of those losses, or 10 million people, is equal to half of the 20 million or so people who have gained coverage in the past seven years under Obamacare. The sobering estimate came from S&P Global Ratings on Tuesday, less than a full day after House GOP leaders released their plan for gutting key elements of the ACA, and replacing it with new rules. S&P Global Ratings said it expected that if the plan were approved, there would be a decline in enrollment in the individual health insurance plan market of between 2 million and 4 million people. There also would be a decline of between 4 million and 6 million people in the nation's Medicaid system after 2020 to 2024, according to the report. But profitability among U.S. insurers "will likely improve", the company said, pointing to the fact that the replacement plan "can result in an improved risk pool in the individual market."
Health secretary: ObamaCare repeal plan a 'work in progress' (The Hill) Health and Human Services Secretary Tom Price labeled the House Republican plan to repeal and replace ObamaCare a “work in progress." Appearing at the White House press briefing on Tuesday, Price praised the House bills as a step “in the right direction" but stopped short of saying the Trump administration supports everything in it. The former Georgia lawmaker notably refused to accept the label “TrumpCare" to describe the proposal.
Trump endorses House Republican healthcare plan, opposition grows (Reuters) President Donald Trump on Tuesday endorsed a plan by Republican U.S. lawmakers to replace the Obamacare healthcare law but influential conservative groups came out strongly against it, complicating the proposal's prospects for passage in Congress. Republicans in the U.S. House of Representatives on Monday unveiled legislation to do away with Obamacare, eliminating the requirement that most Americans obtain medical insurance and creating a system of tax credits to coax people to purchase private insurance on the open market. Trump said the draft bill was open to negotiation, adding he was working on a system to cut drug prices. The lawmakers' plan is a key step toward carrying out pledges by Trump and congressional Republicans to dismantle Obamacare, Democratic former President Barack Obama's signature domestic policy achievement.
U.S. Senate revokes Obama federal land-planning rule (Reuters) The U.S. Senate on Tuesday revoked a rule that aimed to give the public more input into federal land management decisions, the latest move by the Republican-led Congress to undo Obama administration environmental regulations it sees as a burden. The Senate voted 51-48 to approve a resolution to repeal the Bureau of Land Management’s Resource Management Planning rule, known as BLM 2.0, finalized in December by the Obama administration. The rule updated the 30-year process the agency followed when developing land-use plans across the 245 million acres of federal land it manages.
Senators who voted to revoke the rule, such as Republican Lisa Murkowski of Alaska, chair of the Senate Energy and Natural Resources Committee, said it diluted local authority over decisions about how to use land for grazing, energy and mineral development and recreation, and gave outside voices an outsized say in local matters.
Supporters, such as the energy committee's top Democrat, Senator Maria Cantwell of Washington, said the rule modernized the existing BLM process to make it more transparent.
Ivanka Trump clothing line reports record sales (The Hill) Ivanka Trump’s eponymous women’s fashion line is reporting record sales figures despite calls for a boycott and the controversies surrounding President Trump. The news of a sales surge comes after Nordstrom announced in early February that it would no longer carry the 35-year-old’s clothing and accessories, citing poor product sales. Abigail Klem, the president of the Ivanka Trump fashion brand, told Refinery29 in an interview published Tuesday:
“Since the beginning of February, they were some of the best performing weeks in the history of the brand. For several different retailers Ivanka Trump was a top performer online, and in some of the categories it was the [brand’s] best performance ever."
The health of the female workforce is hugely important to the health of the overall labor force. And yet - in crucial ways - lawmakers in the United States have avoided commonsense policy changes that have been shown to make it easier for women to balance paid work and their still disproportionate share of responsibilities at home.
Policies like paid parental leave and subsidized child care increase parental labor force participation, which would boost the economy. Many of our peer nations have such policies, and, not surprisingly, their employment rates are much higher than ours. The figure below shows just how far U.S. women have fallen behind some of our international peers. The graph shows the share of women age 25 - 54 with a job between 1995 and 2015 in Germany, Canada, Japan, and the United States. While women’s prime-age employment-to-population ratio (EPOP) rose over that 20-year period in those peer nations, it actually fell in the United States.
Costs to Germany Keep Rising if Eurozone Breaks Up (Twitter) The claims on the rest of the eurozone by Germany keep rising. These could turn into losses for German banks and businesses if the euro were abandoned. Some these claims derive from Greece. Germany is resisting writing off any of those, keeping a stranglehold on then Greek economy. It seems that the Gremans are taking an "all or nothing" approach. The risk of nothing is not negligible.
Russian Hackers Said to Seek Hush Money From Liberal Groups (Bloomberg) Russian hackers are targeting U.S. progressive groups in a new wave of attacks, scouring the organizations’ emails for embarrassing details and attempting to extract hush money, according to two people familiar with probes being conducted by the FBI and private security firms. At least a dozen groups have faced extortion attempts since the U.S. presidential election, said the people, who provided broad outlines of the campaign. The ransom demands are accompanied by samples of sensitive data in the hackers’ possession.
In one case, a non-profit group and a prominent liberal donor discussed how to use grant money to cover some costs for anti-Trump protesters. The identities were not disclosed, and it’s unclear if the protesters were paid.
At least some groups have paid the ransoms even though there is little guarantee the documents won’t be made public anyway. Demands have ranged from about $30,000 to $150,000, payable in untraceable bitcoins, according to one of the people familiar with the probe.
Russia Is Running on More Than Just the Black Stuff (Bloomberg) Russia's GSP is not dependent just on the price of oil. Double-digit percentage increases in spending on weapons systems now feed directly into better output data, which hadn't been the case before. And it just so happens that President Vladimir Putin is in the midst of the biggest boost to the armed forces since the Cold War.
China's Running Out of Time to Cut Excess Capacity (Bloomberg) The tailwind from surging factory prices is strengthening corporate profits and supporting growth, opening a window for China to deepen cuts in excess industrial capacity without inflicting too much damage on the broader economy. The catch: that window may not stay open for long. That’s because factory prices (forecast to have increased 7.7% in February from a year earlier) may soon moderate as the effect of low comparisons a year earlier begins to fade. Economists forecast producer price inflation will dial back to a 2.8% pace by the fourth quarter.
So far, reflation has been a virtuous circle for China. Capacity cuts last year helped fuel a rise in global commodities, which combined with rising home values and an avalanche of credit to turn producer prices positive in September for the first time since 2012.
The swing away from deflation boosted company revenues and margins and lowered real borrowing costs. That is making corporate debts -- at 156 percent of gross domestic product last year -- easier to service.
What's Driving Australia's Property Boom: QuickTake Q&A (Bloomberg) On the one hand, the average number of people living in each household has dropped, raising demand for housing. On the other, property’s become a more accessible and popular asset class. The proportion of new property finance going to investors stands just below 50%, compared with 16% in 1991. Baby boomers in search of returns have piled into buy-to-let properties, encouraged by a uniquely Australian tax break known as "negative gearing."
Other Scientific, Health, Political, Economics, and Business Items of Note - plus Miscellanea
Quantum Microscope Spies on Chemical Reactions in Real Time (Scientific American) A quantum microscope that uses a sensor built from diamonds could allow researchers to study such nanoscale mysteries as how DNA folds in a cell, why drugs work or how bacteria metabolize metals. Crucially, the microscope can image individual ions in a solution and reveal biochemical reactions as they occur - without interfering in the process. The team behind the system described the results in a February 14 preprint on the arXiv server. Researchers have long wanted an imaging system for molecular structures that works like hospital magnetic resonance imaging (MRI) machines, which reveal structures inside the human body without harming them. The idea behind a quantum MRI - which images at the quantum level using electron spins - is to do the same for chemical reactions including those involving metal ions. The first indications that this is achievable has been demonstrated with diamonds containing atom sized crystal flaws and magnetic resonance of copper ions changing oxidation state.
Why Pre-Existing Conditions Should Be Left to the Market (Foundation for Economic Education) Econintersect: This article criticizes the penalty to the healthy imposed by the pre-existing conditon clause of ObamaCare. The author is absolutely right. But he ignores the problem of how to provide healthcare for those with pre-existing conditions without such a clause.
As you probably know, different countries have different legal age limits for drinking alcoholic beverages. In the United States, the age is 21. In some places in the world, there is no set age. In most places, the legal age is 18 to drink a non-spirit beverage such as beer in a public place without a guardian.
The map [below], based on data from Wikipedia, shows where in the world you’re legally allowed to drink a beer in a public place. It’s slightly generalized and doesn’t take into account that in some places you have to be older to purchase the beverage, but it gives you a good idea of the age limits globally.
Banks are about to get a huge cash windfall thanks to Trump (CNBC) Changes in banking regulations could result in a big windfall for the industry, much of which would make its way into investors' pockets, according to a Goldman Sachs analysis. In a best-case scenario, slashed regulations would result in as much as $218 billion in excess capital which "could either be returned to shareholders or reinvested in the business," Goldman said in a report for clients this week.
That excess cash would result from likely reduced requirements for banks to retain buffers against emergencies. Reforms under the Dodd-Frank law in 2011 sought to make sure the industry doesn't suffer another crisis like the one that began 10 years ago and nearly capsized the global economy. The current level of excess capital is $131 billion.
President Donald Trump has made easing banking restrictions a key part of his platform. He's specifically looking to increase bank lending. Bank credit is up 38 percent, and commercial and industrial loans are up 36 percent since the beginning of 2010, but Trump believes lending is expanding too slowly and businesses are having trouble accessing credit.
Trump Wipes Out $5 Billion of Muni Gains at Top U.S. Insurers (Bloomberg) The insurance industry has seen more than $5 billion of gains erased on state and local bonds after Donald Trump’s victory in the presidential race, with American International Group Inc. and Travelers Cos. among the hardest-hit companies. While the yield on state and local debt is typically exempt from federal taxes, that advantage would be diminished if Trump follows through on plans to lower the levy on all corporate profits. Beyond that, investors are concerned that an overhaul of federal laws could end the favorable treatment on munis.
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