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What We Read Today 30 June 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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Articles about events, conflicts and disease around the world


  • State Department Will Release More Hillary Clinton E-mails at 9 P.M. (Bloomberg Politics)  Saying that it is releasing another batch of e-mails from Hillary Clinton's time as secretary of state "in further demonstration of our commitment to transparency," the State Department told journalists Tuesday that it would post some 3,000 pages worth online at 9 p.m. ET.  Some journalists expressed outrage at the circumstances.
  • Avril Lavigne Breaks Down in Tears Over Her Battle With Lyme Disease (ET)  Lavigne suffered through months of misdiagnosis, a common ecperience of many who contratc Lyme disease.
  • New York State Officially Bans Fracking (Adirondack Almanack)  The New York State Department of Environmental Conservation (DEC) today officially prohibited high-volume hydraulic fracturing (HVHF) in New York State by issuing its formal Findings Statement, completing the state’s seven-year review.  The Findings Statement concludes that there are no feasible or prudent alternatives that adequately avoid or minimize adverse environmental impacts and address risks to public health from what is known in the industry as fracking.  This finding is in direct conflict with the conclusions published by the EPA following a three-year study.


  • The European Union is not a conspiracy against democracy (The Guardian)  Rafael Behr says the hard left should be careful what it wishes for. An end of ‘Brussels’ would not lead to better capitalism.
  • The Delphi Declaration (Osun Defender)  The Delphi Declaration is a manifesto signed by 44 promonent economists, political scientists and former government officials calling for an end to Structural Adjustment Programs (SAPs), a series of killer economic programs on most African countries, as well as South America and a large swathe of Asia in the late ’80s and early ’90s, which the western neo-liberal institutions now seek to impose on the European periphery.  See also the next article. 
  • On the Delphi Declaration (Counter Punch)  This is written by Michael Hudson who has contributed to GEI.  Note:  According to this article the "Troika" are now requesting to be known as the "Institutions".  MH argues that the eurozone’s rejection of what obviously is an attempt at reason has greatly strengthened Syriza’s hand to say “NO” to deeper austerity. It would bring yet more unemployment, yet more emigration, yet more bankruptcy – and deeper distress prices for the public domain that the Institutions are insisting be sold off.

At stake is much more than Greece itself. What the attendees at Delphi want is to rescue not only the Greek economy, but all Europe — by replacing the euro and the ECB with a less austerity-based monetary ideology. If they are driven out of the eurozone, they will be able to create a real central bank (via the Treasury) to monetize deficit spending to revive the economy.

It is clear that what is needed is to replace the IMF with an institution able to assess the ability to pay debts, and to write down bad debts accordingly. Such an institution would replace Chicago School austerity and fiscal policy with a more progressive monetary and tax policy.


Click for BBC video.

  • Where did the Greek bailout money go? (The Guardian)  Only a small fraction of the €240 billion (£170 billion, $320 billion) total bailout money Greece received in 2010 and 2012 found its way into the government’s coffers to soften the blow of the 2008 financial crash and fund reform programmes.  More than 90% of the money went to the banks that lent Greece funds before the crash.  This was a massive transfer of private debt into public debt.  This was not a bailout of Greece; it was a bailout of banks.


  • Barack Obama warns Iran that any nuclear deal must stick to outline (The Guardian)  President Obama has warned that he would walk away from a deal on Iran’s nuclear programme if Tehran did not stick to an outline agreed in April.  Obama spoke minutes after foreign ministers meeting in Vienna gave themselves an extra week to conclude negotiations on what is intended to be a comprehensive and detailed agreement, after failing to clinch a deal by an end-of-June deadline.  The president's remarks suggested that Iranian negotiators had called that framework into question.

Europe is bigger than the US (Bob Bryan, Business Insider)  The EU region has the largest economy in the world with nominal GDP of $25.4 trillion, larger than the U.S. ($22.5 trillion) and far greater than China ($13.4 trillion). But when adjusted according to purchasing power parity (adjusts value to local prices in individual countries) China, with lower local prices actually exceeds the U.S. adjusted GDP.  But the EU region still remains on top.


The Wizard of Oz and the Case for a Later Liftoff (Tony Sagami, Mauldin Economics)  As time goes by the expectations for a Fed hike keep moving out on the time line.


Other Economics and Business Items of Note and Miscellanea

  • Milevsky’s Bold Plan to Reinvent Retirement Income (ThinkAdvisor)  Is the tontine the once and future king of annuities?  In his new book, “King William's Tontine: Why the Retirement Annuity of the Future Should Resemble Its Past”, Moshe Milevsky argues convincingly that retirees have a product problem. Today's financial marketplace of investment and insurance products doesn't offer the perfect solution. To find that solution, he goes on an archeological dig in Renaissance Europe and unearths the tontine. Cast away years ago, the tontine may hold secrets to solving the income puzzle faced by retirees looking for a private sector solution to replace employer pensions.  Instead of today's retiremnt tools (individual risks with "defined" contribution plans based on IRAs, 401(k)s, etc. or defined benefit plans based on employer or insurance company born risk like annuities and pensions, a tontine is a device in which the risk is shared among a group of participants.  A tontine is an investment pool with share for each individual defined by contribution and benefit determined by individual share and investment pool perfomance.  It is like an investment club conceptually (without the U.S. IRS defined limit on number of members - 100), with annuity-like features for payout, and with right of survivorship.  The last to survive gets the residue which may be a windfall or a meager amount based on performance over the final years of the tontine investments.  Thus risk and reward for most of the participants is effectively shared and only a few suffer or benefit disproportionately at the very end.   
  • The Moynihan Report at Fifty (Boston Review)  Daniel Patrick Moynihan (D, NY) was perhaps the most intellectual senator ever (apologies to Daniel Webster and John C. Calhoun, among others).  Fifty years ago, in July 1965, a social science study with a prosaic title—“The Negro Family: The Case for National Action”—was leaked to the press. Its author was Daniel Patrick Moynihan, then a young and obscure assistant secretary in the Department of Labor.  The timing of the Moynihan report, as it came to be called, was significant. With the passage of the Civil Rights Act of 1964 and the Voting Rights Act of 1965, the Civil Rights Movement had achieved its legislative objectives, and its future was in abeyance.  Then the Watts riots followed and the discussion of lower class black family disintegration turned from Moynihan's call for action to a blame game for the riots.  This focus of blame continues to this day (most recently for the Baltimore riots) and the author of this article discusses how it has deflected attention away from other institutional problems that have been ignored.  He says that at the root of this deflection has been a turning away from a focus on personal liberty and opportunity which Moynihan presented to decades of focus on equality.  Moynihan, generally reagrded as a liberal, had a very liberatrian view of how the the disintegration of poor black families in cities should be addressed and it was not the way that the welfare society has progressed.  The author places significant blame on President LyndonJohnson for the deflection away from the institutions of inequality to trying to address the individual victims of those institutions.  Econintersect:  We see this as an argument that we have been trying to treat the symptoms (individuals) and not the disease (centuries of societal bias) in addressing America's most basic racial problem.  Read this outstanding essay (both scholarly and very readable) - it will prompt reaction from almost all political persuasions, which reflects appropriately on Moynihan himself who had the same effect during his senate career.    
  • The four global forces breaking all the trends (McKinsey)  The world economy’s operating system is being rewritten. In this exclusive excerpt from the new book No Ordinary Disruption, its authors explain the trends reshaping the world and why leaders must adjust to a new reality.  

In the Industrial Revolution of the late 18th and early 19th centuries, one new force changed everything. Today our world is undergoing an even more dramatic transition due to the confluence of four fundamental disruptive forces—any of which would rank among the greatest changes the global economy has ever seen. Compared with the Industrial Revolution, we estimate that this change is happening ten times faster and at 300 times the scale, or roughly 3,000 times the impact.

  • Creeping Toward Bubble Land (Wealth Management)  Jeremy Grantham, GMO’s chief investment strategist, kicked off Morningstar’s annual investment conference in Chicago warning that equity markets are overvalued and “creeping nicely and slowly toward bubble land”, but that we weren’t there yet. Rapacious capitalism, buoyed by the Federal Reserve’s easy money policies, is to blame.  Grantham’s investment philosophy is based on a belief in reversion to historical means – valuations in the market will cyclically get out of whack, but always revert to a long-term historical average.  This not a new theme; he has been predicting an economic pullback for the past few years.  See also next article.
  • Morningstar: Economy is Doing Fine, Says JP Morgan’s David Kelly (Wealth Management)  In contrast to Jeremy Grantham in the preceding article, JP Morgan Asset Management’s David Kelly was, relatively speaking, optimistic.  A litany of economic indicators—housing, auto sales, employment, retail sales, capital good orders—are all pointed in the right direction.

“It’s not a booming economy, but it’s bouncing back.  We are tied for the fifth longest economic expansion in modern history, but it’s been miserably slow.  It reminds me of a Yankees, Red Sox game. It’s long because it’s slow.” 

  • Same-Sex Marriage Is Not Sexual Liberation (Boston Review)  The author discusses the sexual repression of our society which sees many people in prison for years (and on the registry of sexual preditors for decades) for hands-off offenses like flashing, chatting online with a federal agent masquerading as a minor, or downloading child pornography—a category that includes everything from pictures of babies being sodomized to photos of adults morphed to look like minors.

Cartoon courtesy of the Public Banking Institute (in email):


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