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.
Closing Irish Tax Loophole May Spook Corporations but Not Economy (Marlene Y. Satter, Think Advisor) Ireland is ending it's corporate income tax loophole that allowed companies organized in a specific way to avoid paying any (or almost all) of the tax that would otherwise be due under Ireland's 12.5% corporate income tax. Companies already organized to take advantage of the so-called "Double Irish" tax loop hole (described below) have another five years to end that arrangement. It will not be available to any new corporate reorganization or move into the country as of January 01.
The way the Double Irish works is that companies put their intellectual property into an Irish-registered company that is actually controlled from a tax haven, perhaps Bermuda or the Caymans. Since Ireland taxes companies based on where they are run from, instead of where they are registered (the U.S. does the opposite), that means Ireland taxes royalty payments on those intellectual properties either minimally or not at all.
A satirical look at student loan debt (Cartoon) (Michael Haltman, LinkedIn) Michael Haltman contributes to GEI. Clever cartoon about a whimsical solution for some of the over-indebted, underemployed recent college graduates. It is worth the click!
Q and A: For Supreme Court, a Case of Economics and Politics (Robert Pear, The New York Times) The clearest summary of what's behind the latest Supreme Court case challenging Obamacare. And it has a surprising conclusion: If the court finds in favor of the plaintiff and rules that subsidies for insurance premiums can not be available under the law in the 36 states that did not provide their own state exchanges, there will be a groundswell of support for Democrats in 2016 as Republicans try to explain why they took affordable health insurance away from millions of people.
There are 14 articles discussed today 'behind the wall'.
Do not miss "Other Economics and Business Items of Note", the final section every day.
Please support all that we do at Global Economic Intersection with a subscription to our premium content 'behind the wall'.
There are between 75 and 100 articles reviewed most weeks. That is in addition to the 140-160 articles of free content we provide.
You get a full year for only $25.
France as number one ! (Gabriel Paulot, inuente: Emerging Finance) Projecting current growth rates forward, France should become the most populous European country ahead of Germany, and at the same time, also become the leading economic power (GDP per capita being relatively close) by 2040. The article suggests that Germany is investing too much abroad and failing in "the renewal of German's productive system". The aging demographic in Germany is cited as a contributing factor the the projected decline of that country. But Econintersect suggests that the aging demographic is a symptom with the underlying cause the repression of German labor and the Main Street economy to support exports. See next article. Birthrate reduction is a natural response to squeezing the Main Street population economically.
Germany’s Passive-Aggressive “Stimulus” Program (William K. Black, New Economic Perspectives) William K. Black contributes to GEI. As Germany teeters on the edge of recession, they are implementing a €3.3 billion annual increase in infrastructure spending as a "stimulus". Prof. Black calls this 'attack' in the amount of 0.3% of Germany's €1 trillion infrastructure shortfall "farcical" when he estimates that at least €70 billion annually is needed simply to keep the shortfall from increasing. He calls the effort "economically illiterate" and an "oxymoron stimulus plan".
Germany and France: Austerity Divergence (Walter Kurtz, The Daily Shot email, no url) Germany and France are on diverging debt-to-GDP trajectories. Over the next couple of years this will generate significant tensions in the Eurozone's core, according to Kurtz.
(What’s Left of) Our Economy: When Private Sector Jobs…Aren’t (Alan Tonelson, Reality Check) Tonelson argues that the reported private sector jobs contain work that is really government supported: healthcare services, private educational services, and social assistance. If he subtracts all the jobs in these occupations then the employment gains for 2014 (first ten months) are 181,000 instead of 223,000 average reported per month. Econintersect: Point well taken that the government supports health care and private education but Tonelson is overstating the situation by assuming that all growth is coming from the government. He needs to present more data if he thinks there is no other growth in these sectors.
Shareholder Value Maximization: The World’s Dumbest Idea? (Usman Hayat, European Investment Conference, CFA Institute) The shareholders who gain the most are the top executives who manipulate the corporate affairs to get maximum short-term gain upon which their compensation incentives are based. Corporate governance has lost its long-term objective-setting operations which built many of the world's great companies in the past. Because the manipulations are not illegal they are not technically accounting control fraud - but they are a form of stealing from the companies' futures.
How Home Prices Are Faring In Your City (Joe Light, The Wall Street Journal) The National Association of Realtors this week released data showing how home prices have changed in 172 metropolitan areas. The median, existing single-family home price rose 4.9% to $217,300 between the third quarters of 2013 and 2014, but there was a big disparity between some cities.
Realtors More Bullish On New Home Sales Than Builders (Kris Hudson, The Wall Street Journal) The National Association of Realtors' chief economist Lawrence Yun sees single family new home sales rising 41% next year. He says that 57 million Americans live in multi-generational homes and that represents a pent-up demand for the American Dream, which includes a home of one's own. He doesn't discuss the burden of American Reality in his discussion. The National Association of Home Builders is forecasting a less ambitious 24.3% increase for 2015, but Econintersect wonders if that is also too aggressive. But one has to be impressed when a year-ahead forecast is so accurate that it needs three significant figures.
Econintersect wants your comments,
data and opinion on the articles posted. As the internet is a
"war zone" of trolls, hackers and spammers - Econintersect must balance its
defences against ease of commenting. We have joined with Livefyre
to manage our comment streams.
To comment, just click the "Sign In" button at the top-left corner of
the comment box below. You can create a commenting account using your
favorite social network such as Twitter, Facebook, Google+, LinkedIn or
Open ID - or open a Livefyre account using your email address.
Econintersect Behind the Wall
Print this page or create a PDF file of this page
The growing use of ad blocking software is creating a shortfall in covering our fixed expenses. Please consider a donation to Econintersect to allow continuing output of quality and balanced financial and economic news and analysis.
Take a look at what is going on inside of Econintersect.com