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What We Read Today 21 March 2014

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 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.

  • The other Social Security battle: the squeeze on customer service (Mark Miller, Reuters, MSN Money) Personal service has been cut back. For example the annual statements that used to be mailed were eliminated in 2011 in order to save $70 million a year. Only 6% of workers now are accessing their online statement which replaced the mailing. Almost every year (14 of the last 16) the Social Security Administration has received less than requested, partly as a consequence of opponents hoping to "starve the beast".

  • Rethinking the Monetization Taboo (Adair Turner, Project Syndicate) The former chair of the UK FSA(Financial Services Authority speaks out again on the use of debt-free money. He says that the only unwind possible for Japan is just that, which he terms "monetization" of debt. He quotes a Ben Bernanke recommendation to that effect in 2003. This is a repeated theme for Turner. See GEI News.
Anyone with an ounce of economic common sense will quickly realize Turner's scheme as just another mindless "print your way to prosperity" proposal.

Monetization of government debt is undoubtedly technically feasible (at least until it isn't) as Bernanke has shown. Yet it promotes a "free lunch" mindset that government debt simply does not matter.

A technicality here is that Bernanke has not monetized a dime. He has expanded the Fed balance sheet but the debt still exists to the penny. Turner is talking about something else: Printing money to retire debt. That is something different. Of course, if you read Shedlock's post you will quickly conclude that he would consider true monetization as an even worse action than the large scale asset purchases that have occurred.

Today there are 10 articles discussed 'behind the wall'.



  • When Marxists Deploy the Quantity Theory of Money and Other Economic Nonsense (Philip Pilkington, Fixing the Economists) Philip Pilkington has contributed to Global Economic Intersection and has agreed to contribute regularly in the future. More on Pilkington's criticism of monetarism economics. Inflation is not about the amount of money but about the use of money, he says. In this article he discusses how Marxists ally themselves with faulty monetarism thinking because the alternative view totally contradicts their ideology. He unravels their (Marxists') arguments like a surgeon with a scalpel, drawing on the writing of Joan Robinson. Pilkington's conclusion:
The typical refrain now would be to say: "Oh, if only they read their Marx properly!". But I don't buy this at all. I think that Marx is a muddle. And I think that Robinson is correct: Marx is not read to be understood; he is read to endow the reader with a mystical sense that some sort of Truth has been accessed.
  • Your Coffee Pods' Dirty Secret (Maddie Oatman, Mother Jones) Single serve instant brewed coffee at home is a big business. But is it environmentally friendly and is it healthy? These questions and other factors are mentioned in this article.



  • Space Ripples Reveal Big Bang’s Smoking Gun (Dennis Overbye, The New York Times) Very nice summary of great things like cosmic inflation, matter moving faster than the speed of light and ripples in space-time. No, it is not science fiction, it's where science thinks it is right now.
  • The slow death of the microwave (Roberto A. Ferdman, Quartz) A combination of long operational life and a growing penchant for fresh food is slowly driving down microwave sales.


  • Cloudy forecast (Gabriel Popkin, Science News) Hat tip to Sig Silber. Could increased cloud cover start to cool the earth? Current scientific thinking is that will not happen. Here is a summary of the effects involved:

All told, clouds cool through reflection far more than they warm through the greenhouse effect. Without them, Earth's surface would be, on average, about 5 degrees Celsius warmer. "Clouds are really at the heart of the climate system," says Sandrine Bony, a climate scientist at the Université Pierre et Marie Curie in Paris.

That clouds both warm and cool is established. But how the global balance between those two effects will shift as the climate heats up is not. Even seemingly minor shifts in clouds' behavior could substantially dampen or accelerate global warming.

Click on graphic for larger image at Science News.

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