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What We Read Today 18 November 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


  • Crude Oil Tumbles Under $40 as Record Supply Glut Deepens Slide (Bloomberg)  Oil dropped below $40 a barrel in New York for the first time since August as producers’ output swelled global inventories to a record.  U.S. crude stockpiles climbed to 487.3 million barrels last week, the highest for this time of year since 1930, government data show. Oil inventories have expanded to almost 3 billion barrels because of growing output in OPEC and elsewhere


  • Another AIG-Style Fed Bailout Is About to Become Less Likely (Bloomberg)  The Federal Reserve is on the verge of relinquishing the tools it used to rescue American International Group Inc. and Bear Stearns Cos. That probably won’t appease lawmakers who’ve said they’re still concerned the central bank might abuse its powers as the lender of last resort.  The Fed is required to write rules that eliminate some of its sweeping emergency lending authority and plans to complete the long-delayed regulations by the end of this month. The measure stems from the 2010 Dodd-Frank law, which limited the Fed’s ability to prop up banks.

  • The 10 Most Unequal Big U.S. Cities (Financial Advisor)  The idea that hard work leads to prosperity is increasingly becoming an American pipe dream, in some places more than others.  Of the 10 most unequal cities, 6 are in the South, 3 in the northeastern quadrant of the country and 1 in California.  Slide show.

Inequality happens when there's a concentration of people at the highest and lowest ends of the income spectrum without much middle-ground in between. Big cities are often hotbeds for such conditions because they attract rich individuals who can afford the cost of living — think rents in New York City or Los Angeles — as well as lower-income households who need access to services that large municipalities can often provide.

"You get this concentration both of poverty and of wealth in the same space," Jarosz said.

Places with wide ranges of educational attainment also run into inequality issues, with higher levels of schooling linked not only to a person's ability to get a job, but what type of job and what they'll be paid.

  • Obama: GOP foment on Syria refugees 'needs to stop' (Al Jazeera)  President Barack Obama has lashed out at Republicans calling for barring Syrian refugees, saying rhetoric 'needs to stop'.  Mocking GOP leaders for thinking they're tough, Obama said overblown rhetoric from Republicans could be a potent recruitment tool for Islamic State in Iraq and the Levant (ISIL). He insisted the U.S. process for screening refugees for possible entry into the U.S. is rigorous and said the U.S. doesn't make good decisions "based on hysteria" or exaggerated risk.  Obama said:

"Apparently they're scared of widows and orphans coming into the United States of America." 

  • Bloomberg Poll: Most Americans Oppose Syrian Refugee Resettlement (Bloomberg)  Americans agree with Republican presidential candidates on refugees, but are divided on whether to send U.S. troops to Iraq and Syria to fight the Islamic State.  Fifty-three percent of U.S. adults in the survey, conducted in the days immediately following the attacks, say the nation should not continue a program to resettle up to 10,000 Syrian refugees. Just 28% would keep the program with the screening process as it now exists, while 11% said they would favor a limited program to accept only Syrian Christians while excluding Muslims, a proposal Obama has dismissed as “shameful” and un-American.  Other poll findings:  U.S. is on the right track, 23% (lowest in more than 3 years); President Obama approval rating, 51% (up 4% from September); Islam is a peaceful religion, 64%; ISIS and terrorism tie with jobs (35%) as top issue - terrorism/ISIS is up from 18% two months ago.

  • Admitting Syrian Refugees Is Good Economics (Bloomberg)  Immigrants of all stripes obviously increase a country’s total gross domestic product. More people equals more production overall, which also means a larger tax base. Its effect on per capita GDP is more ambiguous, since that depends on whether the immigrants have higher or lower skill levels than the native populations that they join. If you import a bunch of engineers, local average income probably will go up, simply because engineers tend to make more money. If you import a bunch of farmworkers, the opposite will happen.

Because of this phenomenon -- called a composition effect -- what you really want to look at is the impact of immigration on the native-born. Economist David Card famously researched this in the 1990s, when he looked at what happened to Miami’s economy after the Mariel boatlift in which about 125,000 Cubans came to the U.S. He found that the flood of refugees -- which increased Miami’s labor force by about 7 percent -- had no adverse impacts on the local labor market. 

If that pattern holds throughout the U.S. -- if Miami is typical -- then it means an influx of refugees is actually good news for a region. It increases the tax base without hurting local workers. That means that if a state takes in a bunch of Syrian refugees, it will have more money to spend on roads and other public goods that benefit everyone, while not hurting its indigenous population.

When I look at the map of states whose governors have declared opposition to Syrian refugee settlement, I notice that many of the states -- Michigan and Ohio, for example -- could use an economic boost. People have been moving away from these states for years, thinning out the tax base and leaving whole neighborhoods blighted and empty in cities like Detroit. Letting in Syrian refugees would partially combat this trend. 

France (Below are the news stories as they unfolded during the day, chron order.)

  • Police raid seeking Paris attack mastermind ends with two dead (Al Jazeera)  After conflicting news stories overnight it seems that the fate of prime suspect Abdelhamid Abaaoud remains unknown, while police say they have detained eight people.  The police said Abaaoud was not arrested Wednesday morning, but did not explicitly say if he was among the dead.  So the confusion continues.  See also next two articles.

  • Terrorists Likely Planned Another Attack, Paris Prosecutor Says (Bloomberg)  Terrorists had likely planned another attack, Paris prosecutor Francois Molins said, citing findings from a predawn police raid in a Paris suburb (preceding article).  In the seven-hour assault that began at 4:30 a.m., one young woman blew herself up, and another extremist was killed by bullets and hand grenades, he said at a press conference in Paris Wednesday.  See also next article.

  • Prosecutor: Paris attacks mastermind not arrested in raid (Associated Press)  But the dead are not yet identified.  Police fired more than 5,000 rounds in the early morning attack.  See next article.


  • Syrian Observatory: 15-day ceasefire near Damascus to be announced shortly (Reuters)  The Syrian Observatory for Human Rights said on Wednesday a local 15-day ceasefire between Syrian rebels and government forces in the Eastern Ghouta area near Damascus would be announced "in the coming hours".  The ceasefire will take effect early on Thursday as a "test period" that could be extended if there is further agreement, the British-based Observatory said.


  • Afghan refugees in Pakistan face harassment, discrimination, HRW says (Al Jazeera)  New Human Rights Watch report details worsening condition for Afghans after a deadly 2014 attack on a school in Peshawar.  Regardless of their legal status, Afghans complain of being refused appointments and medication at public hospitals, forced relocation to government-managed refugee camps, lessening job opportunities and a perpetually threatened atmosphere where police can raze shops to the ground, loot and demand bribes on a daily basis.


  • Ancient Board Game Found in Looted China Tomb (Scientific American)  Archaeologists have found a 14-face die made of animal tooth, 21 rectangular game pieces with numbers painted on them and a broken tile which was once part of a game board in a 2,300 year-old tomb near Qingzhou City in China. The tile when reconstructed was "decorated with two eyes, which are surrounded by cloud-and-thunder patterns".  Archaeologists think this 14-face die was used to play a game called "bo" that hasn't been played for at least 1,500 years.


  • Honduras detains five Syrians said headed to U.S. with stolen Greek passports (Reuters)   Honduran authorities have detained five Syrian nationals who were trying to reach the United States using stolen Greek passports, but there are no signs of any links to last week's attacks in Paris, police said.  The Syrian men were held late on Tuesday in the Honduran capital, Tegucigalpa, on arrival from Costa Rica, and had been planning to head to the border with neighboring Guatemala. The passports had been doctored to replace the photographs with those of the Syrians, police said.

Can the National Debt Be Paid Down? If So, Who Will Pay It? (Ellen Brown, Public Banking Institute)  This is a Power Point presentation delivered to American Freedom Alliance Center for the Investigation of the National Debt November 17, 2015, Los Angeles, CA.  Her point is that the current monetary system with virtually all money created as debt creates unsustainable situations (bubbles and crashes) and fails to maintain stable currency values.  She offers examples of how debt free money (and public banking for public "goods and services" has proven to offer controlled inflation - monetary stability). Some selected slides (there are many more excellent slides):




Other Economics and Business Items of Note and Miscellanea

The three development and poverty charities, NGOs, ActionAid, Oxfam and Christian Aid have released a report arguing that companies should be cuddlier when dealing with the tax rules in developing countries. Don’t try to avoid paying the corporate income tax in those places, even if you can, because everyone should be nicer. Sadly, their report betrays a complete and total ignorance of the economics of corporate taxation. They simply do not understand who actually pays the tax in the proper economic sense. And as such they are in fact arguing that the poorest people in the world, the workers in those developing countries, should be poorer than they need be. Their recommendations are entirely counter-productive to the goal they claim they want, that the poor get richer.

  • The Argument for a 70% Pay Raise for Women (The Wall Street Journal)  Starting with productivity and wages normalized to the 1979 levels, the first graph below shows that if productivity and wages increased at the same rate since 1979 women would be making 71% more today than than they are.  (Men would be making 42% more.)  Shown in the first graph but emphasized by the second, women have made progress vs. men since 1979.  Since 1979 men have seen a 9% decline in real hourly wages while women have had a 20% increase



Despite having the toughest gun control laws in the country Chicago remains one of the most violent and deadliest cities. A concealed carry law will make Illinois better and safer.

Gun control advocates just need to look at Virginia. Between 2006-2011 gun sales went up by 73% and at the same time gun-related violent crimes fell 24%. Virginia Commonwealth University professor Thomas R. Baker, who specializes in research methods and criminology, said this proves that more guns do not in fact cause more violence.

  • The Clean-Energy Revolution Gathers Speed (Scientific American)  The U.S. has an energy revolution underway,  One example is the use of LED lighting replacement of incandescent filaments.  With the cost of LED bulbs 90% less than just a few years ago, the widespread use of the new technology will cut the amount of electricity used for lighting by 50% over the next 5-10 years.  Wind, solar and other technologies have seen similar explosive growth, providing a glimmer of hope that the world might be able to combat climate change this century. National commitments made under the auspices of climate negotiations in Paris could further drive the adoption of clean-energy technologies, not just in the U.S. but in the European Union as well as China, who has already begun investing in clean technologies and whose president last year set a joint goal with Pres. Barack Obama to stop greenhouse gas pollution growth by 2030.

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