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What We Read Today 26 May 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".).


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Articles about events, conflicts and disease around the world


  • The Great Recession May Have Been the Best Chance We Had To Address Climate Change (Vice News)  Conservative political pundits who have long made a sport out of pitting economic prosperity against environmental responsibility. But at least one economist, the UK's Lord Nicholas Stern, says the two are not mutually exclusive.
  • The Global Elite’s Crimes Against Humanity (CounterPunch)  Hat tip to Roger Erickson.  Western governments set out to con ordinary working folk by bringing us war in the name of peace, austerity in order to achieve prosperity and suffering to eventually make us happy. Is there any room for truth? Politicians never like to tell the public the truth. If people knew the truth, they just wouldn’t be happy.


  • Appeals court rules against Obama on immigration (The Washington Post)  A federal judicial panel in New Orleans on Tuesday denied the Obama administration’s request to lift an injunction on President Obama’s expanded deferred action program for illegal immigrants, throwing into doubt whether the program will begin before the president leaves office.
  • Supreme Court to hear voter district case that could affect immigrants (Al Jazeera)  The Supreme Court on Tuesday agreed to hear a case that will answer a long-contested question about a bedrock principle of the American political system: the meaning of “one person one vote.”  The court has never resolved whether that means that voting districts should have the same number of people, or the same number of eligible voters. The difference matters in places with large numbers of people who cannot vote legally, including immigrants who are here legally but are not citizens; unauthorized immigrants; children; and prisoners.  The case being heard involves Texas redistricting which was based on total population and is brought by members of a small group, the Project on Fair Representation, that has mounted earlier challenges to affirmative action and to a central part of the Voting Rights Act.  If their position is supported voting strength will be shifted away from areas that have large numbers of citizens not registered, as well as immigrants who are non-citizens, and more representation will come from areas with a high percentage of registered voters.  Representation will, in general, be diminished for urban areas and increased for rural areas.  See also The New York TimesSupreme Court to Weigh Meaning of ‘One Person One Vote’.



  • Jihadists vs. the Assad Regime: Syria's Rebel Advance (Vice News)  In just a few short weeks, a newly-united rebel coalition has captured almost all of northwest Syria's Idlib province from government forces, overturning assumptions over the war's course, and threatening the regime's ability to defend its heartland.


  • Iraq About to Flood Oil Market in New Front of OPEC Price War (Bloomberg)  Iraq is taking OPEC's strategy to defend its share of the global oil market to a new level.  The nation plans to boost crude exports by about 26 percent to a record 3.75 million barrels a day next month.  Bloomberg says this is part of a continued OPEC effort to pressure U.S. shale producers.



  • China breaks ground on lighthouse project in South China Sea (Al Jazeera)   China has held a groundbreaking ceremony for the construction of two lighthouses in internationally disputed waters in the South China Sea, state news agency Xinhua said Tuesday, a move that is likely to escalate tensions in a region already jittery about Beijing's maritime ambitions.


  • 'We will fight to the end' (Al Jazeera)   The Munduruku, an Amazon tribe on the tributary Tapajós River, would rather diw than see their land destroyed by a $9.6 billion dam.


How Dave Ramsey's bad math leads to bad advice (Michael Markey, LifeHealthPro)  One financial planner criticizes another.  The bottom line is that giving advice about managing money over time should only be done with a spreadsheet analysis in many cases.  The case study involves how a upper middle income couple should handle $245,000 of college loan debt.  Dave suggested they hunker down and do nothing else until the debt was retired.  Mike evaluated what would happen if they bought their first home while paying off the loan.   Mike ran three scenarios (see table below) and three different debt pay-off schedules:  4 years, 5 years and 7 years.  The summary results are shown in the table for Dave's plan, Mike's plan I (no tithing to church) and Mike plan II (with tithing) for the 5-year pay-off plans:

Other Economics and Business Items of Note and Miscellanea

  • John Nash's 'beautiful' contribution to economics (MarketWatch)  John Nash, who died with his wife, Alicia, in a car crash Saturday at 86, was a mathematician, not an economist.  But the phenomenon he described — known as Nash's Equilibrium — revolutionized the world of economics and game theory.  Before Nash came along, game theory was about zero-sum games: one party wins, one party loses. Nash provided a mathematical way of understanding games that more closely resemble the real world, where we don't necessarily have clear winners and losers. 
  • The strange fate of a person falling into a black hole (BBC News)  The instant you entered the black hole, reality would split in two. In one, you would be instantly incinerated, and in the other you would plunge on into the black hole utterly unharmed.  Until you reach the center  - and then ... nobody has the foggiest idea.
  • In Economics, What Calculates Isn't Always Right (Bloomberg View)  In an unceremonious outburst, Romer accused several colleagues -- including Lucas and Prescott -- of using mathematics dishonestly to support their ideological beliefs. In constructing theories about how economic growth happens, he suggested, they slipped preposterous assumptions into their economic models to guarantee the results they wanted.  Econintersect:  We entirely support Romer's thinking here.  The problems with mathematical analysis in economics has little to do with the math - it is all about the assumptions and the models built from those assumptions.  An excerpt from this article (by Mark Buchanan):

There's some weird history here. In its style, a great deal of modern economic theory follows the norm established in the 1950s by Kenneth Arrow and Gerard Debreu. They started with an extremely abstract mathematical model of an economy -- a set of producers, consumers and commodities -- and then built theorems about its properties. Their famous result was that, under a gamut of conditions, this imaginary economy would possess a unique  equilibrium, one set of prices that would perfectly match production and consumption.

  • Health Insurance Is Illegal (The Freeman)  The primary point here is that most health insurance is a form of prepaid health provision.  True insurance provides protection against the expense of very high cost, rare events and does not pay benefits for normal day-to-day health care expenses.
  • Evan Spiegel Reveals Plan to Turn Snapchat Into a Real Business (Bloomberg)  Who would have thought that a messaging social network would be successful and differentiated from competitors by erasing content after a short period of time?  A number of people who are now quite impressed that Snapchat is worth $15 billion and putting out credible monetization plans.

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