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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.
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Jon Stewart's exit as a phony newsman is a loss to real news (Associated Press, Fairfield Daily Republic) Phony news will never be the same. It will go back to being just, well, phony, but for real instead of for satire.
See also Bill O’Reilly On Jon Stewart: “The Left Losing A Big Thing” – So Is Bill (Lisa de Moraes, Deadline Hollywood). Below are two excerpts from one of the famous O'Reilly - Stewart debates. The first is 15 seconds, the second is just over 4 minutes. For the full context see this week's Documentary of the Week.
Articles about events, conflicts and disease around the world
Race, Ethnic, Terror and Religious Issues
The Austerity Con (Simon Wren-Lewis, London Review of Books) In 2010, the world switched from fiscal stimulus to austerity; in 2011, doubts about the switch began to emerge. By 2012 in the UK the actual deficit reduction started to fall short of what had been in the austerity plan projections. And then the shortfalls accelerated.
Americans Are About to Get a Nice Fat Pay Raise (Anthony Mirhaydari, The Fiscal Times) A summary of things covered in GEI News and GEI Anaylsis last week is viewed with a very optimistic outlook. The JOLTS survey showed 5 million current job openings. With the uptick in median household income at the end of 2014, expectations are for continued rising incomes in 2015. But there are some limitations to the optimism here. See the next article.
5 Million Job Openings, So Why Can’t You Get Hired? (Mike Cassidy, The Fiscal Times) There are 5 million job openings (the most in 14 years) and 8.7 million officially unemployed so why aren't the jobs being filled?
(Econintersect: This is especially an important question when one recognizes that there are 2.25 million more people between the ages of 25 and 54 not in the labor force today than there were 10 years ago before the Great Recession - January 2005. Adding this number to the officially unemployed means that there are potentially nearly 11 million people available for the 5 million job openings.)
Mike Cassidy addresses the questions raised above. First he points out that there are relatively few job openings in the lower paying sectors where the unemployment is the highest (upper part of graphic below) while the openings and unemployment numbers are nearly matched in the higher paying sectors (lower part of graphic).
Another factor has to do with income distribution which has been becoming ever more "unequal". The reason for this is the biggest percentage wages increases have been going to the highest paid jobs. (See graph below.) This is a reason that Steven Hansen observed this week that median income growth has been negative.
What We Know About Recessions Might Be Wrong (Noah Smith, Bloomberg View) Smith discusses a model developed by Roger farmer of UCLA. The model addresses the business cycle as a sequence of equilibrium positions for the macro system. He sees human expectations driving the economy.
Econintersect: It seems a fundamentally flawed restriction to assume that the economy moves through a sequence of equilibria. Why not assume continuously variable conditions that create a economy that "flows" through time? A train traveling from New York to Chicago can be depicted by a time sequence of snapshots ("stills"). But we do not have an accurate description of the trip until we have many, many stills taken at small time intervals. If there is a clock in each picture then a physical description of motion can be developed. The greater the number of stills, the more precisely the progression of the trip in time is described.
The ultimate description is derived when the number of stills approaches infinity. But long before one gets to that very large number of images it is likely that a much simpler flow of the train through time will be developed by a series of empirical equations involving spatial coordinates and time, based on Newton's Laws on of motion involving velocity and acceleration. And that is where the empirical evaluation of macroeconomic conditions must go: to a flow through time, not a sequence of steps from one "stable" condition to the next. That leads to very arbitrary decisions about what is stable and can leave one in a Wiley Coyote condition with the road suddenly disappearing beneath the feet.
7 companies getting hammered by rising dollar (Jeff Cox, CNBC) Companies that import commodities or do most of their business within the U.S. the rising dollars has generally been good. But companies that do a lot of business over seas or have significant export business, it has been a big negative. A company with $10 billion dollars of business overseas a year ago, say in the Eurozone, would have only around $8 billion in revenue this year for the same euro-value sold. Cox highlights the seven companies below as especially hurt by the change in exchange rates. The changes shown are for Friday trading.
Yanis Varoufakis: Greece is Finished (Naked Capitalism) Excerpt from a June 2012 interview:
The Daily Shot February 13th 2015 (Walter Kurtz) Here is an interesting data snippet for Canada. If oil doesn't recover within a year or two parts of Canada will suffer greatly, especially if average compensation in the oil producing provinces moves close to the other provinces.
Other Economics and Business Items of Note and Miscellanea
Defend life: Economics without ethics are deadly, cardinal says (National Catholic Reporter)
Uncertainty is the only sure thing in economics (The National)
Powell Continues Push Against ‘Audit the Fed’ Bill (The Wall Street Journal)
Does the Federal Reserve Need to Be Audited? (Barron's)
Rand Paul’s Fed ‘Audit’ Is a Dangerous Idea (National Review) His legislation is really a political move to thwart the independence of monetary policy.
Top 20 Countries for Retirement Security: 2014 (ThinkAdvisor) U.S. is 19th.
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