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What We Read Today 28 July 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 (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.

  • Ukraine launches offensive to retake Donetsk (Ayse Weiting and David McHugh, AP, Yahoo News) The Ukrainian military has gained control of some key areas close to the city of more than 1 million. Russia is reported to be moving artillery across the border to support the rebels.

Russia continues to act and react in the Ukraine crisis in a way that betrays a dangerous sense of desperation, betting on military escalation by proxy that is ultimately beyond the Kremlin's control.
  • Bill to Legalize Unlocking Cellphones Passes Congress (Nick Wingfield, The New York Times) The law says you could pay huge fines and go to jail for years if you unlock your cell phone case. The new bill will decriminalize the act. This is something users for users of GSM (Global System for Mobiles) will find this useful when they want to change carriers. However, it will do nothing for CDMA (Code Division Multiple Access) users. Most U.S. systems are CDMA, European GSM.
  • Global Analysis - June 2014 (National Climatic Data Center) The combined average temperature for June was the highest on record for the month, besting June 1998 for top spot. The ocean was the strongest contributor to the record; land temperatures were 7th highest for any June on record. The first six months of 2014 were the third highest on record for that period. Follow climate economist Sig Silber's weekly reports for detailed updates on weather and climate issues.

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  • The Typical Household, Now Worth a Third Less (Anna Bernasek, The New York Times) Median household wealth adjusted for inflation is down 36% for the median U.S. household over the past ten years. The change from 2007 is even more dramatic, down 43%. See next article for more details.


  • Wealth Levels, Wealth Inequality and the Great Recession (Fabian T. Pfeiffer, Sheldon Danziger and Rovert F. Schoeni, Russell Sage Foundation) The effects of the Great Recession on wealth distribution is dramatic and depressing. The effects amount to an economic "shock and awe". Below we have the data displayed in a graph from the Russell Sage report.


  • Challenges for Amazon's Cloud Computing Hopes (Quentin Hardy, The New York Times) Amazon Web Services (AWS) is seeing slowing growth far short of its goal of becoming the dominate cloud computing space. It seems that they are getting competition from Microsoft and IBM, among others.
  • The US Phillips curve (Walter Kurtz, Sober Look) Does current data indicate that we should be calling it a "Phillips loop"? In this cycle we can see one curve with rising unemployment and another curve for falling unemployment.


  • Repeal Prohibition, Again (Editorial Board, The New York Times) It only took 13 years to repeal prohibition on alcohol; why is it taking 40 years to not do the same for marijuana?

What is striking is a spate of articles from not exactly expected sources on the potential costs to Europe of putting the screws on Russia. The Financial Times has displayed quite a lot of blood lust on the topic of Russia, so it was instructive to see Wolfgang Munchau, who is based in Germany, sound a cautionary note in one of his comments.

Munchau points out that he's surprised by the IMF's latest forecasts, which simultaneously show Russian GDP for 2014 1.1% lower than previously estimated as a result of the sanctions implemented so far, while increasing Germany's by 0.2%. Munchau thinks the two in combination are not credible.


  • Financial Predators Move On From Foreclosure Rescue, Enter Student Debt, Military Lending Spaces (David Dayen, Naked Capitalism) Dayen remarks that the "punishment" of mortgage fraudsters has been something like letting letting the arsonist go free and jailing the person who steals $5 off a dresser during the fire. He worries that the same type of "regulation" and "enforcement" may be infiltrating the credit predation on our military and the $1.2 trillion world of college loan debt.
"I do not find these results surprising," says Riley Dunlap, a sociologist at Oklahoma State University who has extensively studied the climate denial movement. "It's the countries where neo-liberalism is most hegemonic and with strong neo-liberal regimes (both in power and lurking on the sidelines to retake power) that have bred the most active denial campaigns-US, UK, Australia and now Canada. And the messages employed by these campaigns filter via the media and political elites to the public, especially the ideologically receptive portions." (Neoliberalism is an economic philosophy centered on the importance of free markets and broadly opposed to big government interventions.)


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