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What We Read Today 06 December 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


  • Paris climate talks slow to a crawl as obstructionists threaten the deal (The Conversation)  Negotiators have spent the summit’s opening days working tirelessly to trim down the 54-page draft text of the Paris agreement into a shorter version to take into week two of the talks. The fact that the current text is still 48 pages long speaks volumes about the pace of the negotiations.  Unfortunately, many issues have been going backwards. The discussion on legal form (whether the Paris agreement will be a legally binding treaty) is one example. Tuesday’s initial discussion of this issue lasted for more than three hours and resulted in a longer text with more disputed sections. This is by no means an exception.


  • Justice Department will launch investigation into practices of Chicago police (The Washington Post)  The Justice Department plans to launch an investigation into the patterns and practices of the Chicago Police Department, a wide-ranging review similar to those that scrutinized the police departments in Ferguson, Mo., and Baltimore, according to several law enforcement officials.  The civil probe, which the officials say could be announced early this week, comes as Chicago continues to grapple with protests after the release of a video showing the police shooting of Laquan McDonald, which promptedmurder charges for the officer involved and the resignation of the city’s police chief. 

  • Employment Situation Summary (Bureau of Labor Statistics)  E-mail from rjs points out the details of how unemployment remained unchanged:

The November household survey estimated that the seasonally adjusted count of those who were employed rose by 244,000 to 149,364,000, while the number of unemployed rose by 29,000 to 7,937,000, which left the unemployment rate unchanged at 5.0%...with the increase in the number employed and unemployed greater than the 206,000 increase in the civilian working age population, the count of those not in the labor force fell by 67,000 to 94,446,000, which was enough to increase the labor force participation rate from 62.4% in October to 62.5% in November, still just a bit more than 0.1% off a 38 year low ...with the modest increase in the employed, the employment to population ratio, which we could think of as an employment rate, remained unchanged at 59.3%...however, there was a 319,000 jump in the number who reported they were involuntarily working part time, up from 5,767,000 in October to 6,086,000 in a result, the alternative measure of unemployment, U-6, which includes those "employed part time for economic reasons", rose by 0.1% to 9.9%... 

  • Criminal Justice Reform Is Quickly Running Out Of Time (Talking Points Memo)  The racial bias of the U.S. Justice system will go unaddressed again.  Advocates and outside observers have long anticipated that the best chance for passage of criminal justice reform would be before the practical realities of electoral politics intruded in 2016. With the remainder of the year taken up by other matters, reformers will have to wait until the Senate gavels back in in the new year, in the midst of presidential primary season.  Thus is is likely that the first black U.S. president will have accomplished little in moving the country toward equality in this area.




  • Venezuela gears up for socialist party defeat (Al Jazeera)  Amid widespread discontent, today's elections pose greatest challenge in 17 years to Venezuela's 'Bolivarian Revolution'  launched by late President Hugo Chávez and continued by his successor Nicolás Maduro, when Venezuelans vote in midterm elections that could hand the opposition control of Congress.  More on results in Early Bird tomorrow morning.

  • Here's How Venezuela's Economy Has Tanked Under President Maduro (Bloomberg)  Venezuela’s President Nicolas Maduro has kept his promise to “radicalize” the socialist revolution begun by the late Hugo Chavez. And voters are not happy.  The dire state of the economy is on their minds as polls show the opposition taking Congress for the first time in 16 years in today's elections. Since taking office in 2013, Maduro has flouted the most basic economic principles from heavy state intervention to doubling down on currency controls.  There are lots of graphs in this article bu the following will serve to represent Maduro's problems (blackmarket - where the economy operates - currency devaluation by 97% and minimum wage decline by even more since Maduro's election 2 1/2 years ago):


  • The other migrant crisis: Cubans are streaming north in large numbers (The Washington Post)  The number of unauthorized Cubans arriving in the United States nearly doubled in fiscal 2015, rising to 43,159 from 24,278 the previous year, according to U.S. border officials, and the surge appears to be accelerating. The vast majority are coming not in rickety boats or rafts but right through U.S. ports of entry at the border with Mexico. Combined with the more than 20,000 who are issued immigration visas annually under existing accords, it amounts to the largest influx of Cubans into the United States in decades.


World Markets Weekend Update: A Mixed Bag with a Downward Skew (Doug Short, Advisor Perspectives)

Only three of the eight indexes on our world markets watch list posted gains last week, down from six the previous week and eight the week before, and the skew was definitely downward. The average of the eight was a distressing -1.46%. The Shanghai Composite was the top performer with an impressive 2.58% weekly gain. Hong Kong's Hang Seng was a distant second, up 0.76%. The S&P 500 finished the week with a tiny 0.08% advance. The top performer loser, India's SENSEX, was down 1.88%, and the worst performer, Germany's DAX, plunged -4.80%.

Other Economics and Business Items of Note and Miscellanea

  • Jimmy Carter Says His Cancer Is Gone (The Huffington Post)  Jimmy Carter announced to a Sunday School class today that the MRI taken this week showed no signs of remaining cancer in his brain.  Carter was diagnosed with melanoma earlier this year and has undergone several radiation treatments. Last month, doctors said the former president was responding well to treatment and the cancer was showing no signs of worsening.  Econintersect:  Jimmy Carter may not have been one of our most highly regarded presidents, but he was arguably one of the greatest humanitarians to have held the office. 

  • Global Tax Dodging Just One Part of Pfizer’s Corrupt Business Model (Institute for New Economic Thinking)  William LazonickÖner Tulum, and Matt Hopkins charge that the tax avoidance (evasion?) practices of Pfizer end up with the American taxpayers "paying for corporate behavior that crushes innovation, cheats taxpayers, cost jobs, and heightens inequality".

  • FIFA Investigation Outlines Offers of Bribes for Rights to Broadcasts (The New York Times)  FIFA (Federation International de Football Association) ) turned over every stone to collect bribes.  See also The Soccer Officials Indicted on Corruption Charges and Latest Justice Department Indictment of Soccer Officials.

  • Profits Without Prosperity: How Stock Buybacks Manipulate the Market, and Leave Most Americans Worse Off (Institute for New Economic Thinking)  William Lazonick argues that "maximizing shareholder value" through such manipulations as stock buybacks and a rentier operation of corporations to extract money at the expense of decreasing overall value.  See also next article.

  • Stock Buyback Binge Continues (Dana Lyon's Tumblr)  Rock bottom financing has fueled the stock buyback binge for several years as companies can borrow money much cheaper than what they are reaping through their share repurchases. Whether or not that is a prudent use of resources is another matter. But one thing is certain – the binge has continued. According to he most recent data from Factset, companies in the S&P 500 spent $134.4 billion on share repurchases in the 2nd quarter. And while that figure was down slightly from the 1st quarter, the $278.8 billion total for the 1st half of 2015 was the highest figure on record for a first half of a year, surpassing the previous high set in both 2007 and 2014. The amount of money now spent for stock buybacks exceeds free cash flow.  The use of capital in this way has corresponded to an great decrease in Capex (capital investment expenditures) which are key for developing future growth.  Econintersect:  This looks like a classical example of "eating the seed corn".


  • Acid Rain Reductions Should Inform Climate Change Strategy (John Sheehan, Adirondack Almanack)  John Sheehan says that the U.S. management of its acid rain problems can be an example for addressing climate change.  Below the excerpt are (1) a picture of forest devastation from acid rain and (2) the change in acid rain and associated pollutants since 1985.

The amount of sulfur-based air pollution falling on New York State has been reduced by a whopping 92 percent since 1985. That was the year when New York enacted the nation’s first law to control acid rain.  Nitrogen oxides have decreased by more than 70 percent over those same 30 years.

In the near future, additional cuts are expected in acid rain. The U.S. Environmental Protection Agency’s Cross-State Air Pollution Rule and the proposed Clean Power Plan will help. The cross-state rule requires reductions in sulfur and nitrogen pollution to protect public health from smog and fine particles of soot. The Clean Power Plan is aimed at reducing carbon, but the efficiencies needed to accomplish that task will reduce acid rain too.

If EPA can revive its recently suspended rules for mercury emissions, those too would bring acid rain side-benefits. Last year, the Province of Ontario stunned and thrilled New York by announcing it had stopped burning coal to create electricity.

All of this is great news for the Adirondack Park – a six-million-acre national treasure that has suffered the worst acid rain damage in the nation. Its pure waters and wilderness don’t receive the most pollution of any region, but its thin soils allowed acid rain to cause the first, and most lasting, damage here.



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