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.
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Topics today include:
The Cluelessness of Central Banks
Has monetary Policy Reached Its Limits?
How are Economics and Religion Alike?
The New Generation Gap
Can Finance and Economics be Optimized the Same Way as Vehicular Traffic?
Can Inflation and Interest Rates Move in the Same Direction?
Has Public Opinion on Global Warming Reached a Tipping Point?
Can U.S. Politics Get Any Crazier?
A Mysterious Disease is Spreading in the U.S. Midwest
New EU - Turkey Deal Finalized
American IS Fighter "Captured" (He Actually Surrendered)
An Isolated Hong Kong Has a Limited Future
Articles about events, conflicts and disease around the world
Bernanke: Monetary policy 'reaching its limits' (CNBC) Monetary policy in the United States and other developed countries "is reaching its limits", but the Federal Reserve has not yet run out of responses to a potential slowdown, former Fed Chairman Ben Bernanke wrote Friday. In a blog post for the Brookings Institution, he argued a "balanced monetary-fiscal response" would better boost the economy than monetary tools alone. Bernanke assessed policy options for the Fed, saying negative interest rates hold "modest benefits" but are unlikely. For more details see What tools does the Fed have left? Part 1: Negative interest rates (Brookings).
'A tipping point': record number of Americans see global warming as threat (The Guardian) Polling firm Gallup, which has been tracking public sentiment on the topic annually since 1997, found that 41% of US adults feel warming will pose a “serious threat” to them during their lifetimes. This is the highest level recorded by Gallup, a 4% increase on 2015. A total of 64% of those polled said they worried about global warming a “great deal” or a “fair amount”, the highest level of recorded concern since 2008. Just 36% of Americans said they did not fret about it, or only worried a little. The results show a solidifying belief that changes in the climate are under way, with 59% of people thinking so. A record 65% of Americans said global warming was down to greenhouse gases released by human activity – a 10% leap on last year. Just 31% said the warming was due to natural causes, the lowest level of such skepticism in 15 years. The March polling involved more than 1,000 adults in all 50 states.
Obama's choice of Garland complicates presidential campaign (Associated Press) In choosing a centrist judge with Republican appeal, President Barack Obama hoped to corner GOP opponents who pledge to block his Supreme Court pick. He also boxed in the Democrats vying to succeed him. For Hillary Clinton, locked in a fight for the hearts of progressive voters, Merrick Garland's nomination presents a political puzzle. She had no choice but to embrace the mild-mannered moderate whom Democrats plan to make into a symbol of Republican obstruction. But she does not want to hold him so close that she angers the party's left, wary of Garland and worried the party may end up forfeiting a chance to install a more liberal justice on the court.
Mitt Romney Voting for Ted Cruz in Utah (The Daily Beast) Romney urges others to vote for Cruz because "there a contest between Trumpism and Republicanism". Romney says his strategy is to try for an open convention wherein the primary leader, if failing to gain an absolute majority of delegates, could gbe defeated by an eventual amalgamation of all opposition behind some other candidate.
The mysterious infection that might be behind 17 deaths in Wisconsin has spread to a second state (The Washington Post, MSN News) The biggest outbreak of Elizabethkingia in recorded public health history just got bigger. The Michigan Department of Health and Human Services (MDHHS) confirmed Thursday that an older adult from the western part of the state has died after contracting the obscure blood infection, which has sickened more than 50 in Wisconsin. Seventeen of those patients died, though it’s not clear whether the infection was to blame. All of the victims were people with underlying health conditions, including the latest one in Michigan. Elizabethkingia anophelis is commonly found in soil, rivers and reservoirs, and usually not dangerous to people — until last November, when people in Wisconsin started falling ill. When they do occur, most cases of Elizabethkingia (named for Elizabeth O. King, the CDC microbiologist who first isolated the bacterium) happen in ones and twos, usually in hospital settings, in people whose immune systems are already weak. An outbreak like this one is thought to be unprecedented — according to the Milwaukee Journal-Sentinel, most prior outbreaks had fewer than ten patients. Officials don’t know where this outbreak is coming from, or why it’s so deadly.
Key suspect in Paris attacks captured in Brussels raid; two others arrested (The Washington Post) Belgian counterterrorism police raided an apartment block in Brussels on Friday and arrested Salah Abdeslam, a key suspect in last year’s bloody terrorist attacks in Paris, after a shootout that left him wounded, European leaders said. Two other suspects described as accomplices were also arrested, and one of them was also wounded, the leaders of France and Belgium announced.
Putin’s long game has been revealed, and the omens are bad for Europe (The Guardian) To get a glimpse into Vladimir Putin’s mind, it’s worth reading the recent writings of his foreign minister, Sergei Lavrov. In a long article published this month by the Moscow-based magazine Russia in Global Affairs– translated here into English – Lavrov spells it out with clarity. What Russia wants is nothing short of fundamental change: a formal, treaty-based say on Europe’s political and security architecture. Until Russia gets that, goes the message, there will be no stability on the continent. The key sentence in the article is this:
“During the last two centuries, any attempt to unite Europe without Russia and against it has inevitably led to grim tragedies.”
E.U. strikes deal to return new migrants to Turkey (The Washingtpn Post) The European Union and the Turkish government struck an accord Friday to contain Europe’s largest migrant crisis since World War II, agreeing to a deal that turns Turkey into the region’s refugee camp and leaves untold thousands stranded in a country with a deteriorating record on human rights. After a day and half of wrangling, European leaders and Turkey hashed out the specifics of a broad agreement announced last week that was the brainchild of the Turks and German Chancellor Angela Merkel. Under the deal coming into effect Sunday, virtually all migrants — including Syrians fleeing war — who attempt to enter Europe via the Aegean Sea will be sent back to Turkey.
American ISIS fighter captured by Kurds: ‘I found it hard’ (The Washington Post) The 26-year-old Virginia man who was taken into custody in Iraq after he purportedly deserted the Islamic State told a Kurdish TV station Thursday that he decided to escape after he grew dissatisfied during intensive religious training in Mosul. Mohamad Khweis told Kurdistan 24 that his life under the Islamic State in Mosul was a “very strict” regimen of prayer, eating and eight hours of daily instruction in religion and sharia law. He said he soon came to realize that “I didn’t really support their ideology”. Khweis said he stayed only about a month, then reached out to someone who could help him make his way toward Turkey. He said he planned eventually to return to the United States.
Mikhail Khodorkovsky Is Putin’s Most Powerful Enemy (in Exile) (The Daily Beast) The most recent survey by the Levada Center shows that Khodorkovsky, albeit in exile, is the most famous opposition figure in Russia: 45 percent of Russians know his name. About the same percentage, 47 percent of the population, approved of Putin’s decision to let Khodorkovsky out of jail, where he spent 10 years for tax evasion, fraud, and embezzlement. That decade of incarceration gave him plenty of time to think of Russia’s future. And he feels like he can wait another 10 years, if that is what it takes. Members of his team talk about Khodorkovsky as a thinker with great endurance
In the face of furious protests from opposition lawmakers, Hong Kong's Legislative Council approved additional funding of HK$19.6 billion (US$2.52 billion) for an already over-budget high-speed rail link to the mainland cities of Shenzhen and Guangzhou on March 11.
The new funding round pushed the project's cost still further above an original estimated budget of HK$65 billion, and some lawmakers and citizen groups have called for the project to be scrapped due to its ballooning budget and possible border control complications. A document from the Transport and Housing Bureau cut forecasts of the rail's economic return from 6% to 4%. But the territory's government disclosed in December that abandoning the project would entail a loss of HK$75.6 billion.
That some people in Hong Kong still want the territory to cut its losses partly reflects just how deep ambivalence toward greater integration with the mainland runs. But there may be no other option.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Whatever Happened to the Invisible Hand of Capitalism? (John Maulden and Vitaliy Katsenelson) Essays by these two erudite analysts discuss the lack of understanding by the planet's central banks of how money works. There may or may not be a theoretical basis for the policies employed over the last several years, but if there is such a basis it is likely the theory is wrong, based on the consequences observed for their actions. Econintersect: The theme for these essays might well be: Never mind the invisible hand, how do we deal with invisible minds? See also next article.
Economics Is Like A Religion – Just Faith In Theory (Zero Hedge) How are religion and economics similar? They are both comprised of theories founded on a set of assumptions. Econintersect: There are not many more profound understandings of human philosophical thinking than that.
The New Generation Gap (Joseph Stiglitz, Project Syndicate) Something interesting has emerged in voting patterns on both sides of the Atlantic: Young people are voting in ways that are markedly different from their elders. A great divide appears to have opened up, based not so much on income, education, or gender as on the voters’ generation. There are good reasons for this divide. The lives of both old and young, as they are now lived, are different. Their pasts are different, and so are their prospects. Econintersect: The 21st century and the 20th century are "worlds apart". As Prof. Stiglitz points out, the center left and center right political parties are fading in the face of more extreme politics which are reinforced by increasing youthful political activism. He suggests that reform (the first re-) could be effective but that entrenched political positions are inhibiting change. We suggest that could lead to the the second re- (revolution).
When Slower is Faster—A Traffic-Light-Free Transportation Scenario (R&D) Imagine a scenario where sensor-laden vehicles pass through intersections by communicating with each other, rather than grinding to a halt at traffic lights. A newly published study co-authored by MIT researchers claims this kind of traffic-light-free transportation design, if it ever arrives, could allow twice as much traffic to use the roads. Econintersect: This is a fascinating result. It could be compared to the efficiency of natural systems, such as ant colonies. By sacrificing self-will, return on coordination (see next article) is maximized and the system becomes more efficient. This is diametrically opposed to a libertarian approach to organizing society and the free market laissez faire approach to commerce and finance. But it is also opposed to the regulation of markets as has been attempted in developed economies, where individuals still have free will with certain groundrule boundaries imposed. This traffic control idea totally removes all observational human judgment from the equation. Is this realistic forfinancial and economic system optimization? Maybe not with human egos involved but it is certainly worth discussion. And, if someone figures out how to get rich with such systemic optimization, we suggest others will follow.
Why does the economics field neglect return-on-coordination so thoroughly? In all complex systems, the highest return, by far, is the return on coordination. It pays to invest in coordination skills, by optimally distributing resources. Post WWII growth of the middle class proved that, as does asset allocation in all team activities, including military forces. No system is stronger than the weakest link, etc, etc.
So why can't a nation full of such smart people act more cooperatively, and leverage more of the compounding, potential return-on-coordination? It's a function of the behavioral habits citizens learn, and the drifting balance between multiple habits. What's our ratio of personally hoarding static assets vs collectively hoarding dynamic coordination capabilities? The balance between those two habits follows social connectivity, which follows our social methods, training & practice.
Fed's Bullard: Low rates may be causing low inflation (CNBC) Low rates may be causing low inflation, St. Louis Fed President James Bullard theorized in Friday remarks. Bullard, who is a voting member of this year's Federal Open Market Committee, suggested in prepared remarks for a policy conference in Frankfurt, Germany that the current period of low interest rates and low inflation could potentially persist for a long period of time. Furthermore, raising rates could conceivably increase inflation, he said. He didn't conclude this argument was correct, but suggested it deserved further analysis.
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