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 dayin the early am at GEI News (membership not required for access to "The Early Bird".).
Trump's economic plan: no 'death tax', less business tax, and fewer regulations (The Guardian) In an attempt to reset a campaign recently flogged by a series of controversies, Donald Trump outlined an economic vision for the US, including dramatically slashing taxes, and took sharp aim at Hillary Clinton. In a nearly hour-long speech, unusually reading from a teleprompter, the Republican presidential nominee suggested Detroit itself was an example of “the living, breathing example of my opponent’s failed economic agenda”. He proposed reducing income tax brackets from seven levels to three – of 12%, 25%, and 33% – and entirely eliminating income taxes for individuals who earn less than $25,000 annually, or $50,000 for a married couple. In addition, Trump said he would lower corporate and small business tax rates from 40% to 15% – a rate he said punished “companies for making products in America”. He would eliminate the estate tax, which currently applies to estates larger than $5.45 million for individuals, or $10.9 million for married couples. He pitched a plan to allow families to “fully deduct” all childcare expenses from their taxes, which he said would “reduce cost in childcare, offering much needed relief to American families”. See also How Trump's Economic Vision Measures Up (Bloomberg).
U.S. housing agencies would need more taxpayer funds in a crisis: regulator (Reuters) Fannie Mae and Freddie Mac, two government-controlled housing finance agencies, would need a big cash injection to weather another financial meltdown, a government regulator said on Monday. Fannie and Freddie would need as much as $126 billion in taxpayer funds to come through a serious downturn, according to a 'stress test' from the Federal Housing Finance Agency. The companies, which were once owned by shareholders, have drawn $187 billion from the U.S. Treasury since they were seized by the government in September 2008 as the global financial crisis tightened. Since then, as the housing market has strengthened, they have returned roughly $250 billion to the Treasury. Lawmakers have not settled on the future of two companies. The 'stress test' required by the Dodd Frank reform legislation of 2010 projected the companies would have to draw at least $49 billion to $126 billion in the case of a serious economic downturn. Econintersect: At this point the government has made approximately $63 billion from Fannie and Freddie. In a crisis that could be reduced to $14 billion gain or, worst case, a loss of $63 billion.
The US Has 10GW of Utility-Scale PV Projects Under Construction (Green Tech Media) According to data from GTM Research's Utility PV Market Tracker, the United States now has over 10 gigawatts of solar PV projects under construction. Just three years ago, the U.S. was on the cusp of installing its 10th cumulative gigawatt -- and that was across all market segments. It was a milestone several decades in the making. Now, we're going to see 10 gigawatts of PV come on-line within a single market segment over the course of just a few quarters. See also next article.
Electricity Generating Capacity (U.S. Energy Information Administration) In the preceeding article the total of all utility scale solar PV (photovoltaic) generating capacity (operating, contracted and announced, pre-contract) is approximately 72 GW. Here is how the total production capacity has been slowly changing over recent years (graph below). The 72 GW of operating and planned solar PV generating capacity is less than 1% of the total capacity in the U.S. in 2011.
U.S. urges Russia to halt Syria sieges; Russia slams aid politicization (Reuters) The United Nations Security Council must not allow civilians on both sides of the Syrian city of Aleppo to be cut off from humanitarian aid, the United States said on Monday as Russia accused Washington of politicizing a humanitarian issue. Insurgents effectively broke a month-long government siege of eastern, opposition-held Aleppo on Saturday, severing the primary government supply corridor and raising the prospect that government-held western Aleppo might become besieged.
No to Trump: Philippine lawmaker seeks to ban U.S. presidential candidate (Reuters) A Philippine lawmaker is seeking to permanently ban U.S. Republican presidential nominee Donald Trump from visiting the Southeast Asian nation after the billionaire called it one of the "terrorist nations". Trump has no major business in the Philippines, but developer Century Properties Group Inc (CPG.PS) is building a $150-million Trump Tower, a high-rise residential building under license from the American real estate mogul. In a bill filed in Manila's House of Representatives, Congressman Joey Salceda said:
"There is no feasible basis or reasonable justification to the wholesale labeling of Filipinos as coming from a 'terrorist state' or that they will be a Trojan horse."
Japan's Emperor Akihito says health is failing and hints at abdication (The Guardian) Japan’s Emperor Akihito has made a rare televised address to the nation, expressing his fears for his health and his ability to carry on as emperor, and hinting that he wants to stand down. In the 10-minute pre-recorded speech, the monarch, 82, said he wanted an orderly imperial family succession, stopping short of saying he intended to abdicate. Japanese law says the emperor must serve until death and is forbidden from appealing directly for retirement or abdication. This does raise the prospect of appointing a regent to represent him until he dies.
Other Scientific, Health, Political, Economics and Business Items of Note - plus Miscellanea
The Accidental Millionaire in Jet.com’s Sale to Wal-Mart (Bloomberg) Working at a startup that gets acquired can feel like winning the lottery. Not working at a startup, but still cashing in on its acquisition, can feel pretty good too, as Eric Martin learned when Jet.com Inc. sold to Wal-Mart Stores Inc. in a $3.3 billion deal. Martin, who works for a custom bath installation company, received 100,000 Jet shares last year when he won a contest to see who could get the most people to sign up for memberships to the online shopping site. He spent $18,000 on online ads and came away with a stake now worth millions in one of 2015’s buzziest startups. Video discusses why Walmart is making this move:
What did Ancient Romans feed their poor? (Quora) According to this piece, there was a grain ration that was handed out to all Roman citizens (it was a kind of incentive to become a Roman citizen and was a means of preventing uprisings against the Emperor), once a month I think?, and it would feed two people for a month. Econintersect: So the Roman's had a universal basic income. We can hardly wait until someone offers this as a reason the Roman Empire fell.
... heterodox models didn’t “predict” the crisis in the sense of an actual quantitative forecast.
This is because much of heterodox theory is non-quantitative. Basically, people write down English words explaining their conceptual ideas about how the economy works. This describes the ideas of mid-20th-century economist Hyman Minsky, who wrote books and essays about the instability of the financial system. Minsky, though trained in math, chose not to use equations to model the economy -- instead, he sketched broad ideas in plain English.
Broad idea-sketching is certainly a valuable activity. If theorists get lost in the specifics of their models, they can blind themselves to truly new hypotheses and mechanisms that would let them make big, radical changes. I do think this has happened to some degree in mainstream macro, where most modern models are variants of an old workhorse -- the Real Business Cycle model -- that was probably broken to begin with.
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