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What We Read Today 04 June 2016

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".).


Every day most of this column ("What We Read Today") is available only to GEI members.

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Topics today include:

  • Lack of Demand Creates Lack of Supply

  • Supply Creates its Own Demand

  • Does Either Pure Supply-side or Demand-side Thinking Make Sense?

  • Economics and Natural Beauty

  • Blockchain Could Reduce Custody Risks

  • Lotteries are for Losers

  • Important Tick Warning

  • Hockey Has Escaped from Canada

  • What Will Crispr Bring?

  • CO2 Cuts Will Impoverish the World

  • Okinawa Murder Threatens U.S. Continued Presence

  • U.S. Vows South China Sea Action

  • And More

Articles about events, conflicts and disease around the world


  • No Canada: Americans, Finn prospects top NHL draft class (Associated Press)  "Canada's sport" has become international.  First, Canada's seven NHL teams were shut out of playoffs. Now, the nation's prospects are taking a backseat in a draft class top-heavy with international talent.

  • The Genetic Tool That Will Modify Humanity (Bloomberg)  Crispr allows scientists to control the blueprints of life, for better or worse.  It took millions of years for apes to evolve into humans. It may take only a century for humans to change again.  Genetic engineering, which for decades never quite lived up to its promise, is being transformed.

  • Climate accord 'irrelevant,' and CO2 cuts could impoverish the world: Scientist (CNBC)   The world's historic effort to reduce carbon emissions is likely to be a costly if not quixotic endeavor, according to one expert, whose recently published research warns that decarbonizing the globe could have devastating consequences on the world's way of life.  In a report published this week, the International Energy Agency issued a call for "concrete action" to match the ambitions of last year's landmark climate change agreement, which was recently ratified by nearly 200 countries. The energy watchdog said the transition to a low-carbon future would require "massive changes in the energy system" to prevent the globe's temperature from rising by more than 2 degrees Celsius.  Yet the agency also put a steep price tag on efforts to combat climate change. In order to decarbonize the power sector within the next 40 years, the world would have to invest at least $9 trillion — and an additional $6.4 trillion to make other industries more environmentally friendly.  Those vast sums are why M.J. Kelly, a University of Cambridge engineering professor, recently wrote that the push to restrict carbon "is set to fail comprehensively in meeting its avowed target, and a new debate is needed." For that reason, Kelly is skeptical that initiatives like the 21st Conference of the Parties (COP21) in Paris will achieve its lofty goals.  In peer-reviewed research, Kelly argued carbon dioxide should be considered the byproduct of the "immense benefits" of a technologically advanced society. Cutting carbon, he added, could result in a dramatic reduction in the world's quality of life that would usher in mass starvation, poverty and civil strife. Massive decarbonization is "only possible if we wish to see large parts of the population die from starvation, destitution or violence in the absence of enough low-carbon energy to sustain society." 


  • Sanders: 'The Democratic National Convention will be a contested convention' (CNN)  Vermont Sen. Bernie Sanders on Saturday vowed to continue his fight for the Democratic nomination beyond the primary season, telling reporters at a news conference in Los Angeles that he plans to go after Hillary Clinton's superdelegates.  Clinton currently has 2,313 total delegates -- 1,769 of which are pledged and 544 of which are superdelegates -- and she is expected to cross the 2,383-delgate threshold in the next few days to clinch the nomination. But Sanders, who has 1,501 pledged delegates and only 46 superdelegates, says he can still woo enough of her superdelegates between now and the Democratic convention in July to swing the nomination his way.


  • Okinawa Murder Case Heightens Outcry Over U.S. Military’s Presence (The New York Times)  A recent murder that has angered Okinawans and damaged relations between Tokyo and Washington.  The killing of the 20-year-old Okinawan woman, whose body was found decomposing in a suitcase last month, has been linked to an American military contractor who is a Marine veteran. The outcry after the man, Kenneth Franklin Shinzato, was arrested on 19 May has been so strong that Prime Minister Shinzo Abe protested publicly to President Obama during the president’s recent trip to Japan.


  • US vows 'action' if China builds new S. China Sea structures (AFP, MSN News)  Chinese construction on a South China Sea islet claimed by the Philippines would prompt "actions being taken" by the United States and other nations, US Defense Secretary Ashton Carter warned Saturday.  Speaking at a security summit in Singapore, Carter said Beijing risks building a "Great Wall of self-isolation" with its military expansion in the contested waters, but he also proposed stronger bilateral security cooperation to reduce the risks of a mishap.  Hong Kong's South China Morning Post has reported that China plans to establish an outpost on the Scarborough Shoal, 230 kilometres (140 miles) off the Philippine coast, which Manila says lies in its exclusive economic zone.  Beijing claims nearly all of the strategically vital sea and has developed contested reefs into artificial islands, some topped with airstrips.  Manila says China took effective control of Scarborough Shoal in 2012, stationing patrol vessels and shooing away Filipino fishermen, after a two-month stand-off with the Philippine Navy.  The following map is from Econintersect files.  It shows the position of the Scarborough Shoal within Philippines' 200-mile limit and nearly 1,000 miles from the nearest Chinese occupied land (Hainan Island, northwest of the Paracel Islands) and nearly 400 miles from the interationally recognized Chinese 200-mile limit:



  • Higher Australian household debt mounts to ‘unsustainable’ levels (The Australian Business Review)  Hat tip to Steve Keen.  Both main political parties are rightly and routinely admonished for doing little to stem the rising tide of federal and state government debt, which has tripled to about 34% of GDP over the past 10 years. But the spectacular ascent of private debt, which has doubled to about 160% of GDP over the past 20 years, hasn’t rated a mention by either side of politics in this election.  Public debt peaked above 170% of GDP during the Great Depression but private, and in particular household, debt has never been remotely close to its present proportion. Its previous peak of just over 60% ­occurred in the 1880s property boom, and we know what happened after that.

Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea

“We have lost 5 percent of capacity… $800 billion[/year]…. A soft economy casts a substantial shadow forward onto the economy’s future output and potential.” It is now three years later than when Summers and the rest of us did these calculations. If you believe Janet Yellen and Stan Fischer’s claims that we are now effectively at full employment, the permanent loss of productive capacity as a result of the 2007-9 financial crisis, the resulting Lesser Depression, and the subsequent bobbling of the recovery is not 5% now. It is much closer to 10%. And it is quite possibly aiming for 15% before it is over.

Yet you’d be hard pressed to find the word ['beauty'] in any official document, or to hear any politician utter it today. In fact we seem almost embarrassed to talk about beauty, other than in private. Instead we have invented all kinds of pseudo, management-speak words to describe the things we need to look after: words like ecosystem services, natural capital and sustainable development. And when we’re making decisions about the future, all we seem to care about is whether we will deliver growth or generate an economic return.

But it wasn’t always like that. Beauty was a word and an idea that people in previous centuries used freely and confidently, including in legislation and public policy. And because people celebrated beauty it was something they sought to create, in town and country, and enacted laws to protect the things and places people loved.

Beauty is written deeply into our culture. Some of the earliest texts show a yearning for beauty, with Chaucer reminding us that it was the beauty of an April spring that “longen folk to goon on pilgrimages”. Medieval stonemasons constructed fabulous churches and cathedrals, carving flowers and animals into their stone. Throughout history, artists and architects have sought to achieve aesthetic perfection, and nature has inspired countless poets and authors.

  • London School of Economics Paper Says Blockchain Could Reduce Custody Risks (CoinDesk)  A new paper from the London School of Economics argues that the existing infrastructure for holding and transmitting securities puts asset owners at risk – and that blockchain applications could alleviate some of these problems should adoption take place.  Penned by Eva Micheler of the LSE’s Law Department and Luke von der Heyde of South Africa-based law firm ENSafrica, the paper posits that while the evolution from paper-based securities to wholly electronic settlement led to faster communication times, there have been negative trade-offs along the way.  According to the authors, "computers have all but eliminated transaction risk while at the same time introducing custody risk".  But blockchain technology, the technology upon which virtual currencies like bitcoin operate, could change all that.

  • A loser's lottery (Salil Mehta, Statistical Ideas)  SM has contributed to GEI.  Dr. Mehta argues that buying lottery tickets is a sucker's game. If that is so then the 10 dark blue states in the map below have less guilible suckers than other states.  There are a number of other fascinating statistical facts about lotteries in this article.

  • Forwarded by Gary (GEI Market Commentary) via E-mail (Source Unknown)


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