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What We Read Today 22 March 2015

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.

This feature is published every day late afternoon New York time. For early morning review of headlines see "The Early Bird" published every day in the early am at GEI News (membership not required for access to "The Early Bird".).


Every day most of this column ("What We Read Today") is available only to GEI members.

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It's Ba-a-a-a-ck - An endless parade of candidates.

Critics pile on ahead of Ted Cruz 2016 announcement (MSN News)  Cruz ranks eigth in a poll of Republicans.

Sources: Rand Paul to enter GOP presidential field April 7 (MSNBC)  Will a true Libertarian catch a GOP wave?

Elizabeth Warren, run for the White House (Boston Globe)  "She would be a strong candidate — one who injects valuable ideas into the conversation and ensures the kind of debate our country needs."

Mitt Romney Reveals His 'Biggest Mistake' of 2012 Campaign (Bloomberg)  The former Massachusetts governor said he should have made his case better to minority voters.

Articles about events, conflicts and disease around the world









Lower Commodity Prices Menace Benign Outlook (John Lonski, Moody's Analytics)  Lonski attributes at least part of the shrinking number of U.S. businesses to demographics.


Japan’s Population Problem in Five Charts (Yoko Sudo, The Wall Street Journal) Japan's population is in decline, a condition in place now for the past eight years. This trend is expected to continue into the foreseeable future. With a population od 127 million today, Japan is projected to have 88.1 million people by 2048 and 86.7 by 2060. Japan is looking at modifying its notoriously strict immigration regulations to allow more temporary work visas. See Success of ‘Abenomics’ hinges on immigration policy (Reiji Toshida, The Japan Times).  See also GEI News Documentary of the Week:  Will the Japanese Become Extinct?


Shackling the Fed with the Taylor Rule (Gavyn Davies, Financial Times)  There has been recent discussion about the Taylor Rule in WWRT.  This (and the next article) are relevant to that subject from last summer.  Davies suggests that implementing a rules-based interest rate policy (say based on the Taylor Rule) would actually increase the level of political interference with the Fed. The reason is that monetary policy is not prescribed by such relationships, but is merely informed by them. Thus every action becomes subject to debate and this brings in the politicians. The following graph shows Taylor Rule defined interest rates, a modified ("balanced") approach and the most likely course for the Fed based on current policy (called "optimal control"). See also next article.


Is the Fed Behind the Curve? (Money and Banking)  The Fed has not reacted to the persistent rise in the Taylor Rule indicator.  See also the article by Philip Pilkington discussing another employment-based rule at GEI AnalysisThe Phillips Curve: Timelessly Misleading


Americans drive less as demand patterns see major change (Paul Hodges, Chemicals and the Economy)  Hat tip to Doug Short, Advisor Perspectives.  There are two important lessons in this excellent article:

  1. This one is discussed by the author - there appears to have been a driving mileage per capita peak in 2004.
  2. Try to explain this data with the microeconomic model of supply and demand.  The downward sloping demand curve and upward sloping supply curve can be found in isolated data segments, but rationalizing the entire data set requires so many "sticky" and "elastic" and "inelastic" qualifications that the usefulness is hardly defensible.

Click for larger image.

Other Economics and Business Items of Note and Miscellanea

WHO: Ingredient in Monsanto Roundup 'probably carcinogenic' to humans (Al Jazeera)  Glyphosate, found in world's most widely used herbicide, classified as probable carcinogen by cancer research experts.

U.S. multinationals set to face much more pain from strong dollar (Reuters)

Tomgram: Engelhardt, Is a New Political System Emerging in This Country? (TomDispatch)  Pour  a stiff drink of scotch before starting this one - but nurse the scotch.  Don't "throw it down" until you've finished the article, at which point you'll really need it. 

Black vs White: Historic college basketball game kept secret (Fox News)  In 1944 in the deep south two college teams of different races played a secret game behind locked doors and basketball has never been the same since.

The Irrationality of Alcoholics Anonymous (The Atlantic)  Its faith-based 12-step program dominates treatment in the United States. But researchers have debunked central tenets of AA doctrine and found dozens of other treatments more effective.

Saudi oil minister: We refuse that OPEC takes sole responsibility (Reuters)

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