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What We Read Today 09 November 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.

  • 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.

Satter writes:

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.
  • Articles about the Mid-Term Election

5 Things To Ponder: GOP Takes Control (Lance Roberts, StreetTalk Live, Talk Markets)

Romney: Democrats Lost Because They Weren't 'Proud' Enough Of Obama (Huffington Post)

How Much Did Your Vote Cost? Spending Per Voter in the 2014 Senate Races (Brookings Institute)

What the GOP Wave Means for Utilities (Investing Daily)

Why the Democrats lost: Progressive policies had success: too bad the party didn't run on them (Al Jazeera)

Time's Joe Klein Goofed In Predicting End of 'Extreme Supply-Side Economics' in Kansas (

What the 2014 Election Results Really Mean for Health Care (Brookings Institute)

Mitch McConnell's Triumph Strikes Worry In The Hearts Of Campaign Finance Reformers (Huffington Post)

Voting (Barry Ritholtz, The Big Picture)

  • Recent articles about Scotland and Spain Independence and Similar Movements

Catalonian Secession and ‘Pure’ Motives (Mises Economics Blog)

  • Articles about problems, conflicts and disease around the world


Exclusive: Scientists tell U.S. - find recipe for Ebola cure in survivors' blood (Reuters)

WHO Hopes Safe Burial Practices Will Help Fight Spread Of Ebola Virus (International Business Times)


U.S. air strikes target Islamic State convoy in Iraq (Reuters)


Iran says nuclear deal within reach by November 24, no alternatives (Reuters)


Israeli Arabs declare strike after police kill man during arrest raid (Reuters)


Pentagon Says No Evidence Of Alleged Russian Military Incursion Into Ukraine (International Business Times)

Ukrainians hunker down for long war despite win for 'party of peace' (Al Jazeera)

Trading with Moscow: the law, the politics and the economics (


Gorbachev says world is on brink of new Cold War (Reuters)

US money-laundering probe draws in Putin's inner circle: WSJ (CNBC) Hat tip to Marvin Clark.

As Russia Draws Closer to China, US Faces a New Challenge (The New York Times)


Musharraf's efforts on Kashmir were ‘frustrated’ by India, Ram Jethmalani says (The Times of India)


Houthi expansion puts Yemen on edge of civil war (Reuters)


India's Imperatives in Sri Lanka (

Kashmir: India army says sorry over teenager deaths (BBC News)

Bardhaman blast kingpin arrested (The Hindu)

Multilateral Test for India's Modi (

North Korea

Two Americans freed by North Korea, returning home (Reuters)

North Korean Laborers In Qatar Working As 'State-Sponsored Slaves' During World-Cup Lead Construction Boom: Report (International Business Times)


Brazil Military Drills to Defend Amazon (The New York Times)

There are 14 articles discussed today 'behind the wall'.

Do not miss "Other Economics and Business Items of Note", the final section every day.

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  • 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.

Click to view list of cities with data.

  • 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.



  • Other Economics and Business Items of Note and Miscellanea

Guru Dreams and Competition: An Anatomy of the Economics of Blogs (Social Science Research Network)

QS World University Rankings by Subject 2014 - Economics & Econometrics (QS Top Universities)

Taylor Swift and the Economics of Music as a Service (Harvard Business Review)

China to establish $40 billion Silk Road infrastructure fund (Reuters)

Apple details plans to take over your office (CNBC) Hat tip to Marvin Clark.

Planetary Economics: macroeconomic and international implications (Michael Grubb, University College London) Podcast of lecture on global energy and environmental problems and policy efforts.

It's the Inequality, Stupid: Achieving Donut Economics to Solve Climate Change (Kate Raworth,

The hidden force in global economics: sending money home (Dilip Rathe, TED)

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