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:
Who are the Poor in the U.S.?
Changing Face of Energy for U.S. Electricity Generation
SCOTUS Rejects Challenge to State Bans on Assault Weapons
Whole Foods is Being Challenged by Competition
Orlando Gunman Transcript: Pledged Allegiance to ISIS
How Obama Contributed to the Decline of the U.S. Postal Service
How GOP Accounting Law Crippled the Viability of the USPS
EU is Softening Toward Russia
ISIS Counterattacks in Syria
Russia-Boeing Plane Deal Under Discussion
IMF's Misguided Advice to Japan
Articles about events, conflicts and disease around the world
U.S. Supreme court rejects challenge to state assault weapon bans (Reuters, MSN News) The U.S. Supreme Court on Monday left in place gun control laws in New York and Connecticut that ban assault weapons like the one used in last week's massacre at an Orlando nightclub, rejecting a challenge brought by gun rights advocates. The justices declined to hear an appeal of an October ruling by the New York-based 2nd U.S. Circuit Court of Appeals that upheld laws prohibiting semiautomatic weapons and large capacity magazines in the two northeastern states. The laws in New York and Connecticut, among the strictest in the nation, were enacted after a gunman with a semiautomatic rifle killed 20 young children and six educators in 2012 at Sandy Hook Elementary School in Newtown, Connecticut. In total, seven states and the District of Columbia ban semi-automatic rifles.
The 365 concept is Whole Foods’ response to three quarters of sales declines at stores open at least a year. The parent store’s focus on organic and local has been copied elsewhere, cheaper. It’s getting killed by Trader Joe’s and Aldi (which are owned by the same German company), because they offer lower prices; smaller, easy-to-navigate stores; and an ever-rotating selection of inventive items covered in chocolate or Sriracha. Whole Foods is a victim of its own success: It got shoppers to buy fresh groceries instead of stuffing their freezers. But that meant they were going to the store more often, so they wanted to get out faster, without having to choose among 100 olive oils. And if you’re going to get them to drive somewhere, the destination has to feel like an “experience” they can’t get online. Instacart andAmazonFresh have the competitive advantage there, among folks who want to stay on the couch, snacking on something other than cereal.
Full Orlando 911 transcript released; gunman pledged allegiance to Islamic State (Reuters) The U.S. Justice Department and the FBI on Monday released what they said was the complete transcript of the phone conversation between the Orlando, Florida, shooter and 911 police operators as he threatened to strap explosives to his hostages. In the full transcript, the gunman, Omar Mateen, is quoted pledging allegiance to Islamic State leader Abu Bakr al-Baghdadi.
Obama's Partly to Blame for the Postal Service's Backward Ways (New Republic) A recent recommendation by the U.S. Postal Service inspector general that the agency offer basic banking services to customers has generatedlots of discussion. Senator Elizabeth Warren endorsed the idea as a way to aid the post office’s search for new revenue and provide needed access to financial services to millions of low-income Americans. And the fact that bank lobbyists have been freaking out at the prospect shows they recognize the potential for this to catch on. But reform has not been supported by the Postal Service Board of Governors, which has no Obama appointees and has 5 vacancies (out of 9 positions). Obama has offered no nominations for those positions since he has been in office.
A Manufactured ‘Crisis’: Congress Can Let The Post Office Save Itself Without Mass Layoffs Or Service Reductions (Think Progress) This artcile is from 2011 - most people have lost track of why the U.S. Postal Service is not profitable. What has been lost in the political debate over the Post Office is why it is losing money. Major media coverage points to the rise of email or Internet services and the inefficiency of the post model as the major culprits. While these factors may cause some fiscal pain, almost all of the postal service’s losses over the last four years can be traced back to a single, artificial restriction forced onto the Post Office by the Republican-led Congress in 2006. At the very end of that year, Congress passed the Postal Accountability and Enhancement Act of 2006 (PAEA). Under PAEA, USPS was forced to
“prefund its future health care benefit payments to retirees for the next 75 years in an astonishing ten-year time span” — meaning that it had to put aside billions of dollars to pay for the health benefits of employees it hasn’t even hired yet, something “that no other government or private corporation is required to do.”
Cracks emerge in the European consensus on Russia (Reuters) Some German and European officials have begun questioning how many fronts Europe can afford to fight at a time when the bloc faces major threats like Brexit, attacks from Islamic State militants and the simmering refugee crisis.
Islamic State launches counterattacks on U.S.-backed forces and Syrian army (Reuters) The Islamic State group launched a counter attack against fighters trying to capture the Syrian city of Manbij on Monday, inflicting heavy casualties on the U.S.-backed forces, the Syrian Observatory for Human Rights and the militants said. The monitor said the ultra-hard line militants won back three villages south of the besieged city in a surprise assault against fighters from the U.S.-backed Syria Democratic Forces, in which at least 28 SDF fighters were killed. Two years after IS proclaimed its caliphate to rule over all Muslims from swathes of territory in Iraq and Syria, its many foes are advancing on a number of fronts in both countries, with the aim of closing in on its two capitals, Raqqa in Syria and Mosul in Iraq.
Boeing, Russian Firm Said Near $4 Billion Deal to Save 747 (Bloomberg) Boeing Co. is nearing a $4 billion deal with Russia’s largest air-freight company that would help extend the life of the iconic, hump-nosed 747 jumbo jet amid waning demand for four-engine aircraft. The U.S. plane maker is in advanced talks with AirBridgeCargo Airlines and its Moscow-based parent, Volga-Dnepr Group, to convert a year-old commitment into more than 10 firm orders for 747-8 freighters.
IMF calls for overhaul of Abenomics stimulus policies (Reuters, CNBC) The International Monetary Fund (IMF) on Monday urged Japan's government to overhaul its stimulus policies by moving income policies and labor market reform to the forefront, supported by more monetary and fiscal stimulus. The global lender called for a more flexible monetary policy framework with the Bank of Japan abandoning a specific calendar date for achieving its 2% inflation target. It added that Japan would need to raise the sales tax to at least 15% to strike the right balance between growth and fiscal sustainability. "Without bolder structural reforms and credible fiscal consolidation, domestic demand could remain sluggish, and any further monetary easing could lead to over-reliance on depreciation of the yen," the IMF said. Econintersect: Double the sales tax? Take twice as much money out of the economy? Another misguided missive from the IMF. If consumption in Japan is not growing is it because the consumers have too much money? See next article.
Japan Current Account (Trading Economics) Econintersect: In the IMF review discussed in the preceding article, one of the IMF stated objectives is for a government budget surplus. If that is to happen without shrinking the domestic economy Japan must have a current account surplus: Government Balance + Domestic Private Balance + Foreign Balance = 0, an accounting identity. The foreign sector balance has only significantly deviated from zero in recent years with the yen devaluation above 100 to the U.S. dollar since the middle of 2014. Even the peak though, at less than ¥3 trillion per month, has been less than 12% of government expenditures so the key swing balance is the domestic private sector expenditures. Reducing that by 7-10% with doubling the sales tax would create a huge deficit increase unless government expenditures were reduced by that amount or more. Does anyone see a death spiral here?
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Who is poor in the United States? (Brookings) In order to be able to do anything about poverty we need to know who the poor are. Understanding the characteristics of the poor is crucial for crafting effective anti-poverty policies. In this Economic Analysis, the characteristics of the 46.7 million Americans (14.8% of the population) who lived in poverty in 2014 are examined. Using the Current Population Survey Annual Social and Economic Supplement (CPS ASEC) collected in March 2015, the source of official poverty statistics, this study describes who lives in poverty as well as the characteristics of the working-age poor and those working-age poor who were employed less than full-time year-round. Only 25% of the poor are in the labor force. Only 3% more who might be considered employable are 'not in the labor force'. Thus 72% of the poor are not poor because they are considered able to work but are not working. And 25% of the poor are working or actively looking for work. Students and early retirees who are poor are presumably poor by choice - total of 10%. Thus 87% who are poor are not in that condition because they chose it. Here is one of severaly informative graphics:
May 2016 Monthly Energy Review (U.S. Energy Information Administration) This comprehensive energy report (over 200 pages) contains much useful information. Below is a graphic that shows more than 65 years of history for U.S. electricity generation (from p. 108). It shows the strong rise of natural gas, the sharp decline of coal and the gradual rise of renewable sources of energy. Nuclear has been essentially flat since the turn of the century. Econintersect has calculated the contributions of energy source to 2015 electricity:
Nat Gas: 31.6%
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