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What We Read Today 18 August 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:

  • We are Still Arguing Whether QE Worked

  • Various Views on How ObamaCare Will End

  • U.S. Wages Say Business Cycle Expansion Still Has a Way to Go

  • Twitter Shutters 260,000 Accounts for Promoting Terrorism

  • Seld-driving Uber Cars

  • Germany Angry about Trump

  • Islamic State Claims Its Agents Attacked Russian Police

  • Toxic Waste Killed Vietnamese Fish

  • Rousseff Offers a Mea Culpa (Sort Of)

  • U.S. Swimmers Lied about Being Robbed to Hide their Vandalism

  • And More

Articles about events, conflicts and disease around the world

Global

U.S.

  • Self-driving Uber cars to carry passengers soon in Pittsburgh (CNBC)  CEO Kalanick wouldn't speculate on when Uber might be ready to dispense with the human driver. But he says "this is all the marbles for Uber".

  • ObamaCare Death Spiral Accelerates as Aetna Pulls out of the Exchanges (Lambert Strether, Naked Capitalism)  LS has contributed to GEI.  ObamaCare’s mandate was supposed to keep enough healthy people in the pool so that the adverse selection problem did not arise[2]. (According to the articles cited in the notes to this Wikipedia article on adverse selection, the evidence for adverse selection in the health insurance market is mixed at best[3]; ironically, therefore, ObamaCare might end up providing that evidence!)  The death spiral is real because we are seeing its properties: A risk pool that’s sicker than expected, policies crapified to keep profits high, followed by the less sick leaving the pool, making it even sicker, rinse and repeat.  That's why Aetna (and others) are cutting back ObamaCare participation.  Strether's preferred solution is true universal healthcare coverage, not a system dependent on making a profit from insuring sick people.  He argues that data (which he specifically cites) shows that making health care available to people actually makes them healthier.  And this produces an overall superior economic result across an entire large system (like the U.S.)  See next article and another article disussed in the final section, below.

  • Sanders says Aetna move shows need for Medicare for all (LifeHealthPro)  Sen. Bernie Sanders says the ability of Aetna to disrupt the public health insurance exchange system in 2017 by withdrawing from 11 states' programs shows why letting private companies sell health insurance is a bad idea.  The Vermont independent cited the Aetna exchange move in an announcement that he will introduce a new "Medicare-for-all" bill in the next Congress.

Germany

  • Idea of a Trump White House leaves Germany angry and anxious (CNBC)  Eight years ago, a U.S. presidential candidate named Barack Obama captivated hundreds of thousands of cheering supporters at Berlin's iconic Brandenburg Gate with a promise to tear down walls between races and nations.  Over the last year, however, Republican presidential candidate Donald Trump has provoked ire from German quarters after repeatedly disparaging the country.  On Monday, Trump sought to insult Democratic opponent Hillary Clinton by comparing her to German Chancellor Angela Merkel, saying incorrectly that crime had skyrocketed under Germany's refugee policies. Those comments, and others, have left Germans — from the highest pinnacles of business to the grungiest parks — transfixed on the U.S. presidential election.

Russia

  • Islamic State claims responsibility for attack on traffic police in Russia (Reuters)  Islamic State on Thursday claimed responsibility for an attack on a traffic police post outside Moscow a day earlier in which both of the attackers were killed.  The militant group made the claim via the Amaq news agency, which it regularly uses to issue statements.  The Amaq statement said:

"Two fighters of the Islamic State assaulted Russian policemen in the Balashikha area, east of Moscow".

Vietnam

  • Fine Feared Too Small for Dead Fish Damage in Vietnam (VOA.com)  Hat tip to Rob Carter.   Observers and activists in Vietnam are concerned about a fine against a foreign-owned steel factory for polluting ocean waters along the coast.  The observers and activists say the record pollution fine would not pay all victims of the environmental disaster. They also say it does not send a strong enough warning to other export manufacturers.  The steel factory, Formosa Ha Tinh, was accused of letting toxic waste pollute the ocean in April. The pollution caused 80 tons of fish to wash up on coastal beaches.  In June, the government fined the Taiwanese-financed steel plant $500 million for fish deaths along 200 kilometers of a coastline southeast of Hanoi. That is believed to be the largest fine ever against a company in Vietnam.  The plant apologized and agreed to clean up the wastewater system. But people familiar with the issue say the fine cannot cover the continued losses to fishermen, seaside businesses and local people. Some have developed skin diseases from touching the water. The sale of seafood has slowed throughout Vietnam. That has hurt the fishing industry.

Brazil

  • Rousseff Offers Rare Mea Culpa on Eve of Brazil Impeachment Vote (Bloomberg)  Dilma Rousseff offered an uncommon mea culpa just days before she faces an impeachment trial, saying she made mistakes in choosing a running mate who turned against her and in adopting tax policies, which helped erode public finances.  Rousseff, 68, said her biggest political mistake was choosing as vice president Michel Temer, a constitutional lawyer who she now accuses of leading the push to topple her government through impeachment. Tax breaks that cost hundreds of billions of reais didn’t manage to prevent Brazil’s economic downturn on her watch, she said.

  • Brazil police: Swimmers covered up act of vandalism (CNN)  Four American Olympic swimmers lied when they said they were robbed at gunpoint during a night out in Rio de Janeiro, Brazilian police said Thursday.  Instead, the athletes concocted a story to cover up their act of vandalism at a gas station that led to a confrontation with security guards, said Civil Police chief Fernando Veloso at a press conference.  "The surveillance tapes show that there was no violence against the athletes at the gas station," Veloso said. "Their claim that they are a victim of an assault or robbery or any kind of violence is not true."  He added the the athletes -- Ryan Lochte, James Feigen, Jack Conger and Gunnar Bentz -- should "provide apologies to the city of Rio."

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

  • Why We're Still Arguing Whether QE Worked (Barry Ritholtz, Bloomberg)  The problem with any line of economic policy argument is that there often isn't much of a way to test any one thesis in order to prove or disprove the underlying claim. There is, for example, no laboratory where we can test side-by-side how QE performed for the U.S. economy versus an alternative scenario without QE.  But there are some experiments that do have comparisons and we should watch them closely.  Some states have raised minimum wages, others have not.  Some states have cut taxes, others have raised them.  Some state pension funds have added investments in hedge funds, others have pulled out.

  • This is How the Obamacare Story Will End (Foundation for Economic Education)  The only possible outcomes for Obamacare are extremely onerous taxes, healthcare rationing, or both. There is no other way for this to end. Obamacare’s subsidies made very generous insurance affordable for poor, sick Americans. The subsidies meant that millions of Americans were insured for the first time in decades. But the ACA didn’t make insuring poor, sick Americans profitable for insurance companies. The ACA doesn’t force companies to sell insurance to poor, sick Americans. So you have to buy it, but the companies don’t have to sell it to you.  Econintersect:  This article is very narrow: It doesn't address what is to become of sick people.  The author infers there is no profitable way to do this.  The author says that only insuring and providing healthcare for people who are not sick is profitable.  So what is our objective?  Making a profit or treating sick people?  We will vote for treating sick people.  There is a workable system for doing that in place for over 50 years, called Medicare.  Its problem is that it only accepts people 65 and older (which happens to be the age demographic with the highest ratio of sick people).  Now, how can we achieve our objective of treating all people, well and sick, as they need care? Let us know if you can figure it out!  See Bernie Sanders' article under U.S. above.  See also The Unstable Economics in Obama’s Health Law (The Wall Street Journal).  This writer says this shows the defects of government action.  Econintersect:  The defect we see is that a law was passed after it was written by insurance company lobbyists.  This is not mentioned by The WSJ.

  • Flood Destroys Home Of Hate Group Leader Who Claims God Sends Natural Disasters To Punish Gays (The Daily Grind)  Karma?  Tony Perkins, president of the Family Research Council, an organization labeled an anti-LGBT hate group by the Southern Poverty Law Center, was left homeless by the destructive flooding that has ravaged southern Louisiana this week, killing 11 people and destroying an estimated 40,000 homes.  Perkins, who has claimed that God uses natural disasters such as hurricanes and flooding to punish people for sinning (in particular homosexuals and their supporters), had his own home destroyed by the Lord Almighty.

  • What do US wages tell us about the business cycle? (MacroBusiness)  Hat tip to Yves Smith, Naked Capitalism.  Past cycles had another 18 to 36 months to peak once wage increases reached this point.


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