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What We Read Today 05 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".).


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Topics today include:

  • U.S. National Trail Wonders

  • 19th Century Scientific Economics was Founded on Now Defunct Physics

  • How Economists Killed Your Conscience

  • Ominous Cycle Peaks

  • Origin of Dogs

  • Clinton's E-mail Turmoil

  • Will Trump Eclipse Ryan's Agenda?

  • Private and Public Sector Payroll Jobs by President since Late 1970s

  • Economic Case for Brexit is Shaky

  • Swiss Reject Uniform Basic Income

  • Saudi Arabia Raises Oil Prices for Asia

  • The Secret of Putin's Survival

  • China's Struggle to Move from Debt to Equity

  • And More

Articles about events, conflicts and disease around the world


  • A New Origin Story for Dogs (The Atlantic)  Here is a good review article on a topic we have covered before.  Dogs were the first domesticated animals, and their barks heralded the Anthropocene. We raised puppies well before we raised kittens or chickens; before we herded cows, goats, pigs, and sheep; before we planted rice, wheat, barley, and corn; before we remade the world.  Study of DNA from fossils of wolves and early dogs has revealed that dogs likely were originally domesticated twice, once in what is now Europe and the other in eastern Asia.  And when migrations occurred over the millenia the two species interbred with the Asian species eventually dominating the European kind, much as homo sapiens dominated and drove Neanderthals to extinction.  What is unusual about dogs is that all other species studied appear to have a single geographic origin of original domestication.  How long ago did the dog domestication occur?  The estimate is between 18,000 and 33,000 years ago.  Note:  Some have criticizes this work because it is based on a single ancient DNA sample.


  • Clinton's IT aide keeps email server shrouded in mystery (The Hill)  A former State Department IT expert has refused to answer questions about his work on Hillary Clinton’s private email server, keeping its operations shrouded in mystery.  Bryan Pagliano’s laywers have said that he would remain silent during a deposition with the conservative watchdog Judicial Watch, originally scheduled for Monday but now delayed until further notice.  His decision increases the odds that Clinton herself will be forced to testify in the case.  And, because of quirks of the legal system, his decision to stay quiet could be seen as an implicit confirmation that he or the State Department had done something wrong.

  • California or bust? Clinton hopes to strike gold in pivotal vote (Reuters)  A win in California's primary Tuesday would provide additional strength to the nomination of Hillary Clinton.  But a loss in a populous Democratic stronghold like California could lend credence to Donald Trump’s claim that she is a weakened candidate.

  • Will Trump eclipse Ryan agenda? (The Hill)  Speaker Paul Ryan this week will begin rolling out an election-year agenda for House Republicans in what his team is branding as “A Better Way”.  But that agenda is at risk of being overshadowed by Donald Trump, the party’s polarizing standard-bearer with a reputation for going his own way.

  • Public and Private Sector Payroll Jobs: Carter, Reagan, Bush, Clinton, Bush, Obama (Calculated Risk)  Econintersect:  Interesting data but it could be argued that presidents do not have a significant direct impact on employment.  That being said, here is some of the CR data:




  • A British Test of Reason (Project Syndicate)  The article was written by Jean Pisani-Ferr, a professor at the Hertie School of Governance in Berlin, and currently Commissioner-General of France Stratégie, a policy advisory institution in Paris. He says that lately, as John Van Reenen of the London School of Economics recently put it, the economic case for Brexit has been largely missing in action. Its advocates are at pains to explain what kind of trade and partnership agreements, if any, Britain could enter into with the EU, much less how those agreements would be superior to the current arrangement. As a result, it is tough to argue that the UK would receive a net economic boost – or even that it will not suffer considerably – by leaving the EU.  If voters in the United Kingdom decide in the country’s referendum on June 23 to leave the European Union, it will not be for economic reasons. They may choose Brexit because they want full sovereignty, because they hate Brussels, or because they want migrants to return home, but not because they expect great economic benefits. 


  • Swiss reject free income plan after worker vs. robot debate (Reuters)  Swiss voters rejected by a wide margin on Sunday a proposal to introduce a guaranteed basic income for everyone living in the wealthy country after an uneasy debate about the future of work at a time of increasing automation.  Supporters had said introducing a monthly income of 2,500 Swiss francs ($2,563) per adult and 625 francs per child under 18 no matter how much they work would promote human dignity and public service.  Opponents, including the government, said it would cost too much and weaken the economy.  Provisional final results showed 76.9% of voters opposed the bold social experiment launched by Basel cafe owner Daniel Haeni and allies in a vote under the Swiss system of direct democracy.

Saudi Arabia

  • Saudi Aramco Raises Most Asia Oil Pricing Amid Robust Demand (Bloomberg)  State-owned Saudi Arabian Oil Co. increased its official selling price for Arab Light crude by 35 cents a barrel to 60 cents more than the regional benchmark for sales to Asia, it said in an e-mailed statement.  It raised the premium for Super Light crude by 10 cents, to $4.05 a barrel more than the benchmark. Medium crude will sell at a $1 a barrel discount in July, 30 cents higher than in June.  The price of Extra Light blend was unchanged.


In the absence of open political competition, Putin has built a system of checks and balances within the elite. A group of loyalist liberals hold key financial and economic posts, balancing the hawks in the military and special services, including structures like the Security Council, which frequently serves as an incubator for elegant conspiracy theories about Western plots. Of course, all members of the elite must continuously demonstrate their loyalty to Putin.

This system keeps Russia’s elites from pushing for change (unlike in the past, when those elites did attempt to initiate reforms), as it precludes the possibility of anti-Putin intrigue. And the regime does seem relatively stable, at least for now. Indeed, it has only gained strength since 2012, and now, with post-Crimea popular support having bought it some time, the regime is trying to adapt to the protracted economic, political, and social malaise Russia is facing. 


  • Moving From Debt to Equity in China (Project Syndicate)  Author Xiao Geng, Director of the IFF Institute, is a professor at the University of Hong Kong and a fellow at its Asia Global Institute.  The author says the Chinese debt situation is not comparable to other high debt situations, such as the EU and the U.S., even though the aggregate numbers are nearly the same.  This was pointed out by a recent HSBC report:  The reasons for China’s rapid accumulation of debt, which is concentrated in the corporate and local-government sectors, suggest that the situation is not nearly as dangerous as many are making it out to be:

For starters, China has a very high saving rate – above 45% over the last decade, much higher than in the advanced economies – which enables it to sustain higher debt levels. Moreover, China’s banking system remains the primary channel for the deployment of the household sector’s savings, meaning that those savings fund corporate investment through bank lending, rather than equity financing (which accounts for only about 5% of net investment). Indeed, the sharp acceleration in the debt-to-GDP ratio is partly attributable to the relative underdevelopment of China’s capital market.

Once these factors are taken into account, China’s overall debt levels do not seem abnormally high. While debt might be a problem for Chinese companies with excess capacity and low productivity, companies in fast-growing, productive sectors and regions may not be in too much trouble. More generally, China has made recent progress in boosting labor productivity, encouraging technological innovation, and improving service quality in key urban areas, despite severe financial repression and inadequate access to funding by small and medium-size private enterprises. 


A once-unified network of Italian mobsters, street gangs, bikers, and corrupt city officials has decayed and crumbled in the last decade. Violence has flared as a result, and the stack of bodies is growing higher. 

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

How to discover the most scenic National Trails in the US (Easyvoyage, MSN)  The US is preparing once again to celebrate its scenic routes and challenging footpaths. To celebrate National Trails day this June 4, many of the routes' caretakers have organized hikes and projects in states across the country.  The American Hiking Society held its first trails day in 1993 and now draws over 175,000 participants across all 50 states to hike and maintain the famous routes. From the well-known ways of the Appalachian Trail to the winding bridges of the Florida Trail, the routes are designed to showcase the very best of America's natural areas.  You may have heard of many of the national trails but probably not all.  The longest of the 11 officially authorized trails is one of the lesser known, the 4,600 mile North Country Trail, from Crown Point in New York to Lake Sakakawea State Park in North Dakota.  Along the way here is one the areas traversed: 

The Economist Has No Clothes (Scientific American)  This early 2008 article dissects the scientific formulation of 19th century economics.  Here is the introduction:

The 19th-century creators of neoclassical economics—the theory that now serves as the basis for coordinating activities in the global market system—are credited with transforming their field into a scientific discipline. But what is not widely known is that these now legendary economists—William Stanley Jevons, Léon Walras, Maria Edgeworth and Vilfredo Pareto—developed their theories by adapting equations from 19th-century physics that eventually became obsolete. Unfortunately, it is clear that neoclassical economics has also become outdated. The theory is based on unscientific assumptions that are hindering the implementation of viable economic solutions for global warming and other menacing environmental problems.

How Economists Killed Your Conscience (Evonomics)  Economic models based on personal financial incentives only are missing much of the potential of mankind to build a better world, according to this author.  Here is an excerpt from this article:

Over the past half-century, behavioral scientists have devised an ingenious parade of experiments to test what real people do when placed in situations where their material interests conflict with the interests of others. “Social dilemmas,” “ultimatum games,” “dictator games,” and “trust games” all test what human subjects actually do in various situations where they must choose between selfishness and prosociality. The results of such experiments demonstrate beyond reasonable dispute that, far from being rare, unselfish prosocial behavior is endemic. Researchers around the globe have run hundreds and perhaps thousands of experimental studies that consistently demonstrate that unselfish prosocial behavior is a real and very common phenomenon. Sometimes—in fact quite often—we sacrifice our own material payoffs in order to help or to avoid harming other people.

Chart Of The Day: Bear Market? Or Different This Time? (See It Market)   This post is date 22 April 2016.

Similar circumstances produced bear markets.  Is this time different?

  • Industrial Production peaks

  • Wilshire 10 month moving average cross 20 month average 6-10 months later

  • 4th highest valuation period on record


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