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 dayin the early am at GEI News (membership not required for access to "The Early Bird".).
New day for House as Paul Ryan becomes 54th speaker (Associated Press) Paul Ryan became the 54th speaker of the U.S. House on Thursday in a day of high political theater, a young new leader for a fractured Congress, charged with healing Republican divides and quieting the chaos of Capitol Hill.
U.S. Innovation (Council on Foreign Relations) Although the United States leads the world in technology innovation, it may fall behind if the government does not address emerging gaps in innovation policy and invest more in scientific research. At 2.8% of gross domestic product, the United States as a whole spends more on research and development (R&D) than other countries. But major Asian economies—including Korea, Taiwan, and Japan—have ramped up R&D spending, and are graduating more scientists and engineers than ever before. By about 2020, China is projected to surpass the United States as the world's largest R&D spender.
“There continues to be a dearth of available listings in the lower end of the market for first-time buyers, and REALTORS® in many areas are reporting stronger competition than what’s normal this time of year because of stubbornly low inventory conditions. Additionally, the rockiness in the financial markets at the end of the summer and signs of a slowing U.S. economy may be causing some prospective buyers to take a wait-and-see approach.”
Greater than the sum of its parts (The Ecomonist) It is rare for a new animal species to emerge in front of scientists’ eyes. But this seems to be happening in eastern North America. It started over a century ago when dwindling wolf populations in southern Ontario began breeding widely with dogs and coyotes. Interbreeding between animal species usually leads to offspring less vigorous than either parent. But the combination of wolf, coyote and dog DNA that resulted from this reproductive necessity generated an exception. The consequence has been booming numbers of an extraordinarily fit new animal spreading through the eastern part of North America. Some call this creature the eastern coyote. It has also been called the "coydog" and the "coywolf". There are now millions of these animals and research has identified the averge DNA mix to be about 65% coyote, 25% wolf and 10% dog. This vigorous hybrid is nearly twice the size of the native (western) coyote, weighing in at 55 lbs and up and they have hunting skills more like a wolf than a coyote.
Syria conflict: Saudis say Iran must accept Assad exit (BBC News) Saudi Arabia has said Iran must accept the removal of President Bashar al-Assad as part of any solution to the conflict in Syria. Saudi Foreign Minister Adel al-Jubeir made the remarks as talks among international foreign ministers on the crisis get under way in Vienna. Iran is for the first time taking part in such talks, which will also include Russia and Turkey. Russia and Iran both support Syrian President Bashar al-Assad.
China to end one-child policy and allow two (BBC News) China has decided to end its decades-long one-child policy, the state-run Xinhua news agency reports. Couples will now be allowed to have two children, it said, citing a statement from the Communist Party. The controversial policy was introduced nationally in 1979, to slow the population growth rate. It is estimated to have prevented about 400 million births. However concerns at China's ageing population led to pressure for change.
Australia’s plantation boom has gone bust, so let’s make them carbon farms (The Conversation) Perhaps it is time to reconsider whether to credit the carbon captured by trees planted in vast plantations intended for timber late in the last century, given that their plantings were sponsored by our taxes. Intensive plantations don’t count as carbon sinks under Australia’s carbon farming rules. Changes to the carbon farming rules might make these and other multi-use plantations more viable.
It’s been Australia’s hottest ever October, and that’s no coincidence(The Conversation) This has been Australia’s hottest October on record. Barring an (extremely unlikely) cold snap, it will also be the hottest October for Victoria, and for Melbourne. And the record-breaking temperatures are at least six times more likely thanks to human-induced global warming. New record highs have been set for monthly and seasonal average temperatures across Australia at 12 times the rate of new record lows and the farther south you go the greater the high temperature anomalies observed.
In the US, the future of solar energy will be made in California. Earlier this month, the state's governor signed legislation that commits California to obtaining half of its electricity from renewable sources by 2030. And to some extent, that future is now—the state's utilities are working to meet a goal of one-third renewables by 2020.
In a lot of ways, this should be easy for California. The price of solar power has plunged—for utility scale solar, it can be cheaper to build and operate a plant (given existing incentives) than it is to simply supply fuel to a natural gas plant. Plus, countries like Spain and Germany (which also has a goal of 50 percent by 2030) have already done extensive solar rollouts and can provide valuable lessons.
Other Economics and Business Items of Note and Miscellanea
The trust machine (The Economist) Bitcoin’s shady image causes people to overlook the extraordinary potential of the “blockchain”, the technology that underpins it. This innovation carries a significance stretching far beyond cryptocurrency. The blockchain lets people who have no particular confidence in each other collaborate without having to go through a neutral central authority. Simply put, it is a machine for creating trust that may yet take its place alongside double-entry book-keeping and the limited-liability company as a way of oiling the wheels of commerce.
Column: Proposed budget bill would have devastating effects on millions’ Social Security benefits (Lawrence Kotlikoff, PBS News Hour) Prof. Kotlikoff argues that the biggest impact of the new budget bill agreement is not on the high income people it will obviously affect but on millions of low and moderate income people who will lose important flexibility that can protect them against "excessive longevity — that is, outliving their assets and other non-Social Security means of support". The rules being phased out are quite arcane and we refer you to this article for review. See also next artcile for a counter view.
Budget Bill’s Ending of Social Security File-and-Suspend Strategy ‘Not All Bad’ (ThinkAdvisor) Jamie Hopkins, associate director of the American College’s New York Life Center for Retirement Income, wrote in his Thursday Forbes blog that while the gutting of the file-and-suspend strategy under the budget bill will mean “reduced benefits”, which will “have a negative impact on many people relying upon these Social Security payments”, he sees the changes as also “beneficial to the Social Security system and to the American people.” Why? Two reasons, Hopkins argues:
First, Social Security claiming strategies “had become incredibly complicated with the ‘file and suspend’ system in place,” he writes. “The budget agreement will remove a lot of the claiming strategies by extending the deemed filing rules up to age 70, simplifying the Social Security claiming decision for millions of Americans.”
How the New Budget Deal Will Affect the Oil Market (Kent Moors, Oil & Energy Investor) KM contributes to GEI. Hidden in the new U.S. budget agreement is a plan to start selling petroleum from the Strategic Petroleum Reserve (SPR) starting in 2023. Why? Dr. Moors says its because the SPR is no longer needed. It was set up after the 1973-1974 Arab oil embargo against the U.S. as a national security matter. Dr. Moors says:
"Never again will oil be used as a weapon to pressure the U.S. Prospects are now strong that both the U.S. and Canada will be energy independent within the next decade."
History is getting its revenge on economics (Quartz) The increasing use of empiricism framed with historical context comaprisons is displacing the post World War II shift of economics to theoretical modeling paired with advanced mathematics to propose cause and effect in economic activity. This recent shift is returning economics to its roots which used historical, cultural, political, and legal context as key elements in economic reasoning. This is reflected by data on papers published. Share of literature on economics history has roughly tripled over the past 30 years.
Last night’s Republican debate brought the idea of “trickle-down economics” to the forefront again. The theory — essentially that a lot of money at the top will eventually mean a lot of money for the poor, too — is popular with people like Marco Rubio. Note that when we say “people like Rubio,” we don’t necessarily mean “Republicans.” We mean “people who don’t know sh*t about economic theory.” That’s because while trickle-down economics, occasionally, provides cool anecdotes for presidential candidates, it doesn’t work on a large scale.
The top of the pile is good at absorbing the influx of money — that bit is a smash. But then, a strange and TOTALLY PREDICTABLE thing happens: It sticks. Or as financial economist Thad Beversdorf put it to Uproxx: “Any policy that narrows income distribution, even if total income increases, will necessarily hurt economic growth and, thus, standard of living for most of us.”
Trickle down Economics Explained (Paul Harris, YouTube) The speaker is in favor of trickle-down economics. He poses the subject in terms of the question: Can the government spend money more efficiently for society than can the wealthy?
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