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What We Read Today 27 October 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


  • Exxon Knew about Climate Change Almost 40 Years Ago (Scientific American)  “It is difficult to get a man to understand something, when his salary depends on his not understanding it.”  (Upton Sinclair)  Here is the introduction to this article which indicates the cynicism of Sinclair:

Exxon was aware of climate change, as early as 1977, 11 years before it became a public issue, according to a recent investigationfrom InsideClimate News. This knowledge did not prevent the company (now ExxonMobil and the world’s largest oil and gas company) from spending decades refusing to publicly acknowledge climate change and even promoting climate misinformation—an approach many have likened to the lies spread by the tobacco industry regarding the health risks of smoking. Both industries were conscious that their products wouldn’t stay profitable once the world understood the risks, so much so that they used the same consultants to develop strategies on how to communicate with the public. 


  • Jason Chaffetz Moves To Impeach IRS Chief (Huffington Post)  The Republican chairman of the powerful House Oversight Committee, Rep. Jason Chaffetz of Utah, has moved to impeach the head of the Internal Revenue Service, saying he has violated the public trust and obstructed congressional investigations into the treatment of conservative groups.  After more than two years of investigation, eighteen Republicans on the committee joined Chaffetz in co-sponsoring the impeachment resolution. The measure now goes to the full House Judiciary Committee.

  • US Natural Gas Rallies After Falling Below $2 For First Time In Over 3 Years (Oil Price)  Follow the weekly wrap-up reports at GEI every Friday late afternoon from which have a section on Natural Gas.  Here are two charts from this article:




  • Forget the data roaming charge overseas: It's just been banned across the EU (City A.M.)  The European Parliament today voted to ban data roaming charges across all EU countries, starting 15 June 2017.  Roaming charges are what mobile operators charge you to use mobile internet overseas. You know the drill: Either remember to turn your data off as your plane touches down in a foreign country or risk accidentally racking up far more than you were planning to on your next phone bill.  But no more. The full ban will come into effect in less than two years, and before that there will be an interim cap set on charges, coming into effect just six months from now on 30 April 2016.  From that point, telecoms operators will be allowed to charge no more than €0.05 extra per megabyte of data used across all 28 EU countries, which the European Commission estimates will make roaming 75% cheaper.   The vote was a resounding success for the ban, with 665 of the 751 MEPs voting in favour.


  • Pound falls as UK economic growth misses expectations (City A.M.)   Sterling dipped 0.05%  to €1.3875 ($1.53) this morning, after official figures showed the UK's economic growth slowed in the third quarter of this year, held back by falls in manufacturing and construction output.  The Office for National Statistics (ONS) said the economy grew 0.5% between July and September, missing economists' expectations for 0.6% growth, and down from 0.7%t in the second quarter.  This also meant annual gross domestic product growth slowed to 2.3%, from 2.4%.

  • Nine key tips for the campaign to keep Britain in the EU (The Conversation)  There is still no date for the UK’s EU referendum and the deadline of 2017 may seem a long way off, but the “In” campaign is starting late and on the back foot for several reasons. Most Britons are naturally Eurosceptic and many are also seriously ill-informed about the benefits of EU membership. The subject is, in reality, too big, too complex and too far-reaching for most to comprehend.  The author says the late start to the "in" campaign needs both grass roots involvement and participation by "brilliant people".  Support videos produced, like the one below, have failed to make emotional connections with Britons.


  • Drop in consumer confidence may reflect in the ballot box (Hurriyet News)  Turkey is going to the polls again on 01 November just when there is deterioration in the confidence of the consumer. It is now wondered whether this dissatisfaction will be reflected in the ballot box.  Data on consumer confidence goes back only to 2007 so there is no real historical reference.  The AKP (party of President Recep Tayyip Erdogan) inherited the vital IMF/Kemal Derviş-produced reforms in banking, public sector, privatization in 2002 when it first came to power. Inflation was rapidly dropping, and with price stability, a reformed Turkey coincided with the abundance of international liquidity, launching a rapid foreign investment inflow.  Now the economy is going in the opposite direction and the effect on what happens at the ballot box is about to be tested.  See also next article.

  • Turkey Is on the Path to Rogue Dictatorship (National Review)  Middle East expert Daniel Pipes thinks that President Erdogan will not share power if his AKP party loses a majority position in the 01 November elections.  And losses by AKP are quite possible - see previous article.


  • 'Ignoring Ambedkar's economic thoughts unjust' (The Statesman)  Indian society has done great injustice to itself by ignoring the economic thoughts of national icon BR Ambedkar, a new book says.  "After all, his economic thoughts were not parochial," says scholar Narendra Jadhav in his latest book, Ambedkar: An Economist Extraordinaire (Konark).  Ambedkar (1891-1956), a contemporary of John Maynard Keynes, was awarded the degrees of MA and PhD in economics by Columbia University in the US in 1915 and 1917 respectively.  The degree of doctor of science (DSc), which the London of School of Economics conferred on him in 1923, was also for research in economics.  This article discusses Ambedkar's role in the development of India's economy, both before and after independence from Great Britain.  It also mentions that he had interactions with Keynes as well where apparently there were disagreements over how India's monetary policy should proceed.


  • Earthquake rocks Afghanistan and Pakistan – an area prone to magnitude 7 quakes (The Conversation)  A devastating earthquake struck the Hindu Kush region of north-east Afghanistan just after lunchtime on October 26, rocking communities as far away as Tajikistan, Pakistan and even India.  The quake is the second large shake to hit the Alpine-Himalayan earthquake belt this year, following the one that devastated Nepal in April. A region stretching from the Mediterranean through Anatolia, Iran and Central Asia into the mountains of South-East Asia, the Alpine-Himalayan belt is the home of around a fifth of the world’s largest earthquakes.  This type of deep fault, a near-vertical a thrust fault, is a process that has previously been associated with the tearing off of sections of ancient ocean floor sinking into the Earth’s mantle beneath today’s continent. Researchers have previously suggested that earthquakes in the Hindu Kush can be caused by the break off of strips of such slabs, stretching and tearing free, on geological time scales, as they fall deep into the mantle.  The origins of this fault line begin with tectonic plate movement from the Triassic period over 200 million years ago when the Threthys Sea began to close as what is now India separated from today's Africa and Antarctica and started moving toward what is now Eurasia.



  • Shock result forces Argentine election to second round – and threatens humiliation for Scioli (The Conversation)   Against all predictions, the provisional results from the first round show the ruling Victory Front (VF) candidate Daniel Scioli with a tight lead of 36.78%, followed by the Cambiemos (Let’s Change) coalition with 34.40%. Former Kirchner ally Sergio Massa of A New Alternative (UNA) was eliminated with just over 21%.  This is a pretty remarkable result. Turnout was high by Argentine standards, at over 80%, and all the opinion polls were radically wide of the mark.

Steel prices in China continue to decline (Walter Kurtz, The Daily Shot)  If you need a posterchild for nearly 4 years of declining producer prices in China and for the recent acceleration downward, steel prices over the past 6 months are a good candidate with a decline of 30%.


This recession indicator just collapsed to a 6-year low (Akin Oyedele, Business Insider)  An offbeat economic indicator is signaling a recession.  The "McCulley indicator" — which measures "core" capex orders, or orders of capital goods excluding military orders and planes — is now at its lowest level since 2009. The indicator is named for former PIMCO managing director Paul McCulley, who views it as a leading recession indicator.  The last time the indicator was almost this low was in 2012.  This time it is a major cutback in oil and gas capex (capital expenditures) which is leading the decline of durable goods orders.


Other Economics and Business Items of Note and Miscellanea

  • 8 flu shot myths debunked (Employee Benefit News)  Presented in a quick-read slide show.  Starts with the myth that "you can get the flu from the flu shot".

  • Crude Oil, the Sword and the Power of Economics (Stay Thirsty Media)  In March 2001, on the occasion of the turn of the century and the millennium, the Department of Energy made a study with the title of "International Energy Outlook," giving a 20-year projection of the world energy requirements and supply. The primary purpose of the study was to project the price and supply sources of crude oil 20 years into the future.  The projection was that prices would rise in a fairly steady pattern and reach $36 a barrel in 2015.  What was the price of oil in the middle of 2015?  Almost exactly as forecast.  Of course it went up to nearly $150, down to about $30 and up to around $115 along the way in between.  This essay points out that the price of oil has averaged about $20 a barrel (2001 dollars), and adjusted for inflation $36 dollars in 2015 is $20 in 2001 dollars.  That was also the nominal price in 2001.  The author says that the only thing that drives the high price spikes are geopolitical and economic stress issues.  Econintersect:  Not mentioned by the author are the pressures to lower energy prices being produced by renewable energy.  These seem very likely to help continue the relatively low inflation adjusted baseline price for oil in coming decades and to mitigate the past propensity for price spikes.

  • People Who Earn THIS Much Are Happier Says Economics Expert (   According to Nobel Laureate Angus Deaton it is true that money cannot buy happiness only above about $75,000 (which is approximately €68,000 or  £49,000).  Deaton calls this level the “happiness plateau” and earning more than this does not result in increased “frequency and intensity of experiences of joy, stress, sadness, anger and affection that make one's life pleasant or unpleasant”.  Deaton has found that higher earnings can increase feelings of life satisfaction but not other characteristics of "happiness".  From this article it is not clear if Deaton refers to per capita or household incomes.  But if it is per capita then in the U.S. nearly 88% of the population has income below $75,000 (2010 date from Wikipedia).  So money could buy happiness for a vast majority of Americans. 

  • Do Science and Religion Conflict? (Slate)  Hat tip to Lorne Warwick, Newsana.  This is a commentary on a new Pew Resarch survey (see next article).  This author thinks the survey did not ask all the right questions:

One of the limitations of most of these surveys is that they force respondents to fit themselves into a narrow box: Either science and religion contradict each other, or they don’t. In reality, many of those who choose “conflict” probably mean something far different, Hill wrote in 2015. “What they’d probably prefer to answer is that they have nothing to do with each other; they’re separate domains that don’t interact,” he says. This becomes evident once you give respondents this as a third option, which Hill did in the National Study of Religion and Human Origins. When respondents were asked whether they agreed or disagreed with a third statement—“Science is about facts and religion is about faith. The two do not overlap”—a full one-third agreed. If the Pew survey gave the same option, you might expect fewer people to answer that they conflict.

All this is to say that we may know less than we think about those who are different than us.

  • Religion and Science (Pew Research)  Those who are self-identified as "religious" find fewer conflicts between science and religion than do those who say they are not very religious.

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