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.
Russian Oil Tycoon: US Shale Boom Is 'On-Par' With Dot-Com Bubble (Myles Udland, Business Insider) Russian oil tycoon Leonid Fedun thinks that OPEC is on a mission to get rid of the "marginal" (high production cost) oil players in the U.S. shale market. For how this price war will impact oil patch players, see the next article.
There are 14 articles discussed today 'behind the wall'.
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The economic pie and labor’s dwindling piece (John Haskell, Pine Tree Economics) If a picture is worth a thousand words, why did Haskell write an article? Actually he wrote less than 100 words and added a short quote from Noah Smith.
The economics of pay raises: Bloomberg opinion (Noah Smith, Oregon Live) There is a common myth that standard economics predicts that people are paid an amount of money proportional (Smith incorrectly says "equal" and that puts the discussion he has later in the article off track) to the value of the things they produce. That is not true. According to Smith:
People generally don't produce things individually. They produce things together, with the assistance of capital such as machines and buildings. So when a company hires you, its marginal productivity changes, because your presence affects the marginal productivity of everyone else at the company. In other words, in a competitive, classical economy, your wages are set not by your own effort and skill, but by how your effort and skill combine with the effort and skills of all the other people at the company, as well as all the company's capital assets.
Prisoners get millions from IRS in bogus refund claims, watchdog finds (Fox News) In 2007 there were 37,000 fake tax returns filed from U.S. prisons and $166 million in refunds were claimed. In 2013 the bogus returns way more than tripled (to 137,000) with about $1 billion claimed in refunds. Numbers were obtained from a report by the Treasury Inspector General for Tax Administration.
The Next Phase of China’s Financial Deepening (Andrew Sheng and Xiao Geng, Project Syndicate) These authors argue that a fundamental structural change is needed for China to successfully rebalance. The country must move away from credit which has been the financial mechanism of growth to this point, to equity and bond funding. The growth of shadow banking can be brought back under control with this change.
Work, save, move (Buttonwood, The Economist) More than half of all Americans are not prepared for retirement. This article says the three components for the solution to the problem are to work longer, save longer and downsize living style.
Other Economics and Business Items of Note and Miscellanea
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