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:
Ayn Rand and 2016 Presidential Politics
How Understanding Evolution, Ecology, and Collective Behavior Can Save Economics
Why Economics Will Be Our Ruination
Lessons from Vietnam for a Divided America
IMF to Governments: Spend More Money
Role of China in Global Trade Slowdown
How Do Muslims View ISIS?
Hollowing Out of the Middle Class Correlates With Hollowing Out of Centrist Politics
Muslims in Europe
The Recent History of Public and Private Debt in the UK
Erdogan Shuts Churches and Schools
Russian Balloonist Breaks 'Round the World Record
Articles about events, conflicts and disease around the world
IMF calls for more government spending as rate cuts lose their impact (The Guardian) The International Monetary Fund has called on G20 nations to boost government spending as the impact of ultra-low interest rates begins to reach its limits in developed countries. Central bank chiefs and finance ministers from the world’s top 20 economies gathered in the south-western Chinese city of Chengdu on Saturday to tackle problems facing the global economy, which have been aggravated by the British vote to leave the European Union. In an update to its April forecast, the IMF lowered its forecasts for global growth this year and next by 0.1%, to 3.1% and 3.5% respectively. But the IMF wants advanced economies like Germany and the United States to channel more public spending into infrastructure investment to help boost global growth, an issue that has sparked divisions among G20 members.
The Role of China in the Trade Slowdown (LinkedIn) Article shows that global IP (industrial production) and global trade are highly correlated (see graph below). The authors argue that industrial production of Emerging Asia is the only “autonomous” variable in global IP, i.e. it causes all other series and is not caused by any other variable. Emerging Asia imports (and exports) do not cause global trade, only industrial production does. Changes in global trade seem therefore to be largely driven by supply shocks (industrial production) in Emerging Asia and particularly in China. See China’s great rebalancing: Promise and peril (McKinsey). Econintersect: The result is that rebalancing in China is driving rebalancing for the world.
Trump Would Fund Super-PACs Aimed at Taking Down Cruz, Kasich (Bloomberg) It's payback time. Donald Trump plans to create and fund super-PACs specifically aimed at ending the political careers of Ted Cruz and John Kasich should either run for office again, after both snubbed the Republican nominee during his party's convention this week, a person familiar with Trump’s thinking told Bloomberg Politics on Friday. The plan would involve Trump investing millions of his own money --perhaps $20 million or more -- in one or two outside groups about six months before their respective election days if Texas Senator Cruz or Ohio Governor Kasich stand for office again. The person said Trump is willing to set up two separate super-PACs – one for Cruz and one for Kasich – and put millions into each.
Obama vetoes cuts to former presidents' expense accounts (USA Today) President Obama took steps to preserve the office allowances given to former presidents Friday, by vetoing a measure that would have capped those expenses at $200,000 a year. The veto comes less than six months before Obama will become a former president himself. But Obama suggested in a message to Congress that his veto was more about the "unintended consequences" the bill would have on his predecessors. White House Press Secretary Josh Earnest said in a statement that Obama agrees on the need to reform presidential pensions, and would sign a bill if Congress makes "technical fixes to resolve these issues". "These issues" refers to the lack of transition for previous presidents to change from the current system of support for a staff and facilities to the lower level expense allowance.
5 facts about the Muslim population in Europe (Pew Research) Many of the most negative views of Muslims are in countries where the fewest Muslims are living. Exceptions are Greece and Italy, the two most common entry countries for Muslim refugees and migrants.
Merkel Vows to Protect Germans as Terrorism Ruled Out in Munich (Bloomberg) Chancellor Angela Merkel sought to reassure Germans that the state will keep them safe as she pledged all resources to get to the bottom of the rampage in Munich that left 10 people dead and more than 20 wounded in an attack with no known link to terrorism.
Turkey's Erdogan shuts schools, charities in first state of emergency decree (Reuters) President Tayyip Erdogan tightened his grip on Turkey on Saturday, ordering the closure of thousands of private schools, charities and other institutions in his first decree since imposing a state of emergency after the failed military coup. Turkish authorities also detained a nephew of Fethullah Gulen, the U.S.-based Muslim cleric accused by Ankara of orchestrating the July 15 coup attempt, the Anadolu state news agency reported. A restructuring of Turkey's once untouchable military also drew closer, with a planned meeting between Erdogan and the already purged top brass brought forward by several days. The schools and other institutions are suspected by Turkish authorities of having links to Gulen, who has many followers in Turkey. Gulen denies any involvement in the coup attempt in which at least 246 people were killed.
Russian balloonist 'breaks Fossett's round-the-world record' (BBC News) A Russian balloonist has set a new record for flying non-stop around the world, his support crew have said. Fyodor Konyukhov's balloon was said to have passed directly over the airfield in the Australian town of Northam where he began his journey 11 days ago. If his record is confirmed by the World Air Sports Federation, he will have taken more than two days off the record set by American Steve Fossett in 2002.
IS attack on Afghan protest kills at least 80, wounds 231 (Associated Press) At least 80 people were killed and another 231 wounded in the Afghan capital on Saturday, when a suicide bomber detonated his explosives-packed clothing among a large crowd of demonstrators, officials and witnesses said. In a statement issued by its news agency, Aamaq, the Islamic State group claimed responsibility for the attack on a protest march by Afghanistan's ethnic Hazaras. The marchers were demanding that a major regional electric power line be routed through their impoverished home province. Most Hazaras are Shiite Muslims, while most Afghans are Sunni. The attack is one of the deadliest in Afghanistan since the Taliban launched a violent insurgency in 2001. If the IS claim is correct, the bombing would mark the first time the group has launched an attack in the Afghan capital. IS has been building a presence along Afghanistan's eastern border with Pakistan, mostly in Nangarhar province, for the past year.
Map Overlay(Tadas Viskanta, Abnormal Returns, Twitter) Informative map overlay for the geographically challenged. Just don't forget that for Oz, the tropics are where it says Ontario and Saskatchewan; the longitude of Tasmania is similar to that of New England in the U.S. for the northern hemisphere.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
Would Ayn Rand Approve of Rule by a Rich and Powerful Capitalist? (Foundation for Economic Education) Hat tip to Rob Carter. Econintersect: This essay might well have been entitled "The Fountainhead Unveiled in the World of 2016". This essay compares Donald Trump to Ayn Rand characters John Galt (Atlas Shrugged) and Howard Roark (The Fountainhead), with a lengthy discussion about The Fountainhead. The author says that Rand's iconic, larger than life characters, like Galt and Roark, are defined by Roark's statement at the end of The Fountainhead (excerpt below). The author here compares Trump to the counterfoil character in The Fountainhead, Peter Keating, who Rand described as: “The exact opposite of Howard Roark, and everything a man should not be. A perfect example of a selfless man who is a ruthless, unprincipled egotist – in the accepted meaning of the word. A tremendous vanity and greed, which lead him to sacrifice all for the sake of a ‘brilliant career.’” From Howard Roark near the end of The Fountainhead:
“The egotist in the absolute sense is not the man who sacrifices others. He is the man who stands above the need of using others in any manner… This is the only form of brotherhood and mutual respect possible between men.”
Orthodox Economics Is Broken. How Evolution, Ecology, and Collective Behavior Can Help Us Avoid Catastrophe (Evonomics) This is a castigation of the neoclassical assumption that societal progress occurs through the actions of individuals operating in "free markets". (Econintersect: We would suggest that discoveries often (but not always) come from individual insights but that implementation usually ( but not always) comes from vast collaborative efforts.) This article is a well written argument along the lines of our simplistic generalization.
Lessons from Vietnam for a Divided America (Foundations for Economic Education) Hat tip to Rob Carter. From 1954 until the 1970s, the North and South of Vietnam were each determined to defeat the other at all costs. The author says that in a time when "both sides were blinded by extreme ideologies, cost-benefit analysis ceased to matter". She suggests that the Vietnamese experience has lessons for the U.S. of today. One lesson, she says, is to "be skeptical of all propaganda: every picture, video, and meme on social media". The author, a native of Vietnam aptly choses a quotation from Friedrich Hayek:
“[Knowledge] never exists in concentrated or integrated form, but solely as the dispersed bits of incomplete and frequently contradictory knowledge which all the separate individuals possess”.
Your Life on Earth(BBC) Interactive website allows you to explore how life on earth has changed since you were born.
Economics Will Be Our Ruination II (Cato Institute) Econintersect: Shortform (and oversimplified) summary - by measuring benefit in terms of dollars, human wellbeing can be diminished.
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