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:
Is Herbalife Involved in Money Laundering and Drug Trade?
Apple Foresees Higher-Than-Expected Holiday Sales for iPhones
Apple Current Quarter iPhone Sales Fall 5% from Last Year
CO2 Can Be Electrochemically Converted to Ethanol
Productivity and Employment by Governments and Manufacturing
How Much Do Government Regulations Cost?
Global Capacity for Renewal Energy Now Larger than for Coal
Why Productivity Improvement Can't Save the World
What if Russia Had Nothing to Do with Clinton and DNC E-mail Hacking?
Trump Says Clinton Policy Would Lead to World War III
Schools Fear Election Day Violence, Take Protective Action
The Three Classes of American Elite, and Why One is Not Represented
Where in the World Do Most 18-34-Year-Olds Live With Their Parents?
Most UK Public Sector Jobs Will Be Gone in Less Than 15 Years
Turkey Replacing Kurdish Mayors
How Could Syria Become a Trap for Russia?
Articles about events, conflicts and disease around the world
Renewable energy capacity overtakes coal (BBC News) The International Energy Agency says that the world's capacity to generate electricity from renewable sources has now overtaken coal. The IEA says in a new report that last year, renewables accounted for more than half of the increase in power capacity. The report says half a million solar panels were installed every day last year around the world. In China, it says, there were two wind turbines set up every hour. Renewable energy sources, such as wind, solar and hydro are seen as a key element in international efforts to combat climate change. At this stage, it is the capacity to generate power that has overtaken coal, rather than the amount of electricity actually produced. Renewables are intermittent - they depend on the sun shining or the wind blowing, for example, unlike coal which can generate electricity 24 hours a day all year round. So renewable technologies inevitably generate a lot less than their capacity. Even so it is striking development.
Productivity Won’t Save the World (Bloomberg) Thomas Malthus was wrong for one simple reason. Humans have survived his 1798 forecast that growing populations wouldn’t be able to feed themselves because he failed to recognize the great productivity gains of the following 2 centuries. Now productivity gains have been slowing in recent decades, but even if productivity growth could be revived, it’s not clear those gains would have as much of an impact on living standards as in the past. Simply being able to make more stuff isn’t terribly helpful in an era of excess capacity and also weak aggregate demand. Many innovations actually eliminate jobs and depress wages. They allow a few creators to capture large benefits but don’t aid the majority of the population. Fewer workers mean even less demand. Given that consumption makes up 60 to 70% of economic activity in developed economies, productivity gains may thus depress rather than boost growth. Even if the world can solve this one conundrum, plenty more questions -- about employment, income and inequality -- await.
So Who Hacked Clinton? The Truth Could Be More Shocking Than You Expected (Strategic Culture Foundation) Hat tip to Roger Erickson. This report from an established investigative journalist (who has an established record of investigating the Clintons and Obama) questions the assertion by U.S. intelligence authorities that the hacking of the Clinton campaign is a Russian government-backed effort. This reporter suggests that the motives were quite different. He says that there is circumstantial "evidence" that the hackers were after hidden evidence of extraterrestrial aliens connected to John Podesta and Hillary Clinton (not the aliens connected, but hidden evidence about their existence).
Exclusive: Trump says Clinton policy on Syria would lead to World War Three (Reuters) U.S. Republican presidential nominee Donald Trump said on Tuesday that Democrat Hillary Clinton's plan for Syria would "lead to World War Three", because of the potential for conflict with military forces from nuclear-armed Russia. In an interview focused largely on foreign policy, Trump said defeating Islamic State is a higher priority than persuading Syrian President Bashar al-Assad to step down, playing down a long-held goal of U.S. policy. Trump questioned how Clinton would negotiate with Russian President Vladimir Putin after demonizing him, and blamed President Barack Obama for a downturn in U.S. relations with the Philippines under its new president, Rodrigo Duterte.
Fearing Election Day trouble, some US schools cancel classes (Associated Press) Talk of fraud, vigilante observers and angry voters is prompting communities around the U.S. to move polling places out of schools or cancel classes on Election Day. Parents and officials fear there could be confrontations or even violence that could endanger students. Some of those anxieties are being stoked by Donald Trump's appeal to supporters to stand guard against fraud at the polls. Authorities fear there could be clashes between self-appointed observers and voters.
Aetna CEO Says Young People Pick Weekend Beer Over Obamacare (Bloomberg) Adverse selection is the big problem for Obamacare. Healthier people will avoid buying Affordable Care Act health insurance plans as premiums climb, threatening the stability of the market, Aetna Inc. Chief Executive Officer Mark Bertolini said. Premiums for health plans sold to individuals under the ACA, known as Obamacare, are going up by about 25 percent on average for next year. Bertolini said that as costs rise, more individuals will decide not to buy health plans. That’ll push premiums even higher, unless a new president and lawmakers can find fixes for the new markets created by the 2010 health law. (Econintersect: If you don't buy it until you need it then it is not insurance. Obamacare is trying to operate with a system that is analogous to only buying homeowners' insurance after the house catches on fire.) Bertolini said:
“As the rates rise, the healthier people pull out because the out-of-pocket costs aren’t worth it. Young people can do the math. Gas for the car, beer on Fridays and Saturdays, health insurance.”
The Cold War of the American Elite (Strategic Culture Foundation) This article argues that the 2016 campaign has revealed the three major groups of elite power and influence in the U.S.:
The America of Wall Street and the bureaucrats in Washington, Chicago, and Los Angeles. This is the United States of the one-percenters, the America of «banksters» - the lords of the securities marketplaces, banks, hedge funds, insurance companies, and investment houses. These are the merchants of smoke and mirrors in whose hands vast financial resources are concentrated. Hillary Clinton is their representative.
The post-deindustrialized America, or the America of the «corporatocracy», consisting of the representatives of transnational corporations that were spawned by the second industrial revolution. They are the owners and senior executives at primarily non-financial and non-high-tech companies such as manufacturing firms. Donald Trump is their representative. Donald Trump is their representative.
The «cognitariat» faction that has emerged over the last 40 years (from the Latin «cognito» or «learning» and a play on the word «proletariat»), the America of figures, algorithms, and «geekonomics». This segment of the US has not put forth a candidate - they do not yet command the necessary resources.
The Nation Where the Most Under-35s Live With Their Parents (Bloomberg) Buffeted by the European Union’s slow-moving economy, many young people save money by still living with their parents. That’s the case for 78% of Croatian men aged 18 to 34. Young Finnish women are the most eager to break loose, with only 14% still living with their parents. In the U.S. 32% of adults 18-34 live with parents, about the same as the UK and France.
“Robotic processes are supporting local government in their data entry, driverless trains are becoming more widespread and sensor technology is being used in hospitals and care homes to monitors patients and give nurses and carers more time for quality patient interaction.”
Mayors of Kurdish Turkey city Diyarbakir held in terror probe (BBC News) The co-mayors of Diyarbakir, Turkey's largest Kurdish-majority city, have been detained as part of a terrorism investigation, security officials say. Gultan Kisanak was held at the local airport, while Firat Anli was arrested at his home in the south-eastern city. President Recep Tayyip Erdogan has vowed to prosecute local officials accused of links to the banned Kurdistan Workers' Party (PKK). In September, 28 elected mayors in largely Kurdish towns were sacked. They were replaced by trustees appointed by the government using an emergency law that came into force following a failed army-led coup in July.
For years, it has been speculated by critics that Herbalife could have a layer of fraud to it that transcends the pyramid scheme allegations of late. However, in a new research report prepared by 10/10 Research, and released today, a new layer of allegations of previously unreported - and thus unsubstantiated - criminal impropriety has emerged.
In the report, the researcher outlet makes several grave accusations involving not only money laundering at Herbalife, but also of being a participant in the Latin American drug trade, and suggests that one particular agency that may want to take a closer look at Herbalife's dealings.
As it notes, "the company’s success in countries like Mexico and Colombia and the immense amount of undocumented cash that trades hands at the over 40,000 nutrition clubs between the two countries could make for a perfect environment for wrongdoing involving cash."
Apple Sees Higher-Than-Expected Holiday Sales on IPhone 7 Demand (Bloomberg) Apple Inc. forecast better-than-expected sales over the holiday period thanks to strong demand for its latest iPhone 7 smartphone. Revenue in the three months through December will be between $76 billion and $78 billion, Apple said Tuesday. Analysts estimated $75.3 billion, according to data compiled by Bloomberg. In its latest fiscal quarter, which ended Sept. 24, Apple said it sold 45.5 million units. That was down 5% from the same period last year, however analysts surveyed by Bloomberg expected 45 million iPhones sold. Apple shares closed at $118.25 in New York trading Tuesday, up 0.5%.
High-Selectivity Electrochemical Conversion of CO2 to Ethanol using a Copper Nanoparticle/N-Doped Graphene Electrode (Wiley Online Library) It has been widely thought that carbon emissions sequestration would involve an expensive and inefficient production of carbonate salts which could be secured by underground burial. This paper reports a new process which involves the production of ethanol from CO2 in water. So far, however, the researchers conclude that "probably precludes economic viability" for the exact catalyst utilized but further work could produce valuable results. The researchers do not suggest that carbon "sequestration" is one of the goals that could be achieved.
Is Weak Productivity to Blame for Sluggish Consumer Spending? (Frank Holmes, U.S. Global Investors) FH has contributed to GEI. The generally used definition of productivity on a national level is calculated by measuring the output per cost of labor input (see Harvard Business Review, No-Nonsense Guide to Measuring Productivity. Frank Holmes has looked at almost 70 years of productivity data and the last 52 years of manufacturing and government employment. He attributes an important factor to current low productivity numbers to a decline in manufacturing jobs and an increase in government jobs. He infers that a way to improve productivity is to reform government regulation. Econintersect: While Holmes may be correct that reduced regulation would the data presented does not support that assertion. First, it appears that he is assuming that increases in government employees correlate to increased regulation - but there is no evidence presented. In fact, government employment has dropped under Obama (second graph below), although regulation has increased (see next article). Secondly, manufacturing employment saw almost all of its decline since 1964 under G.W. Bush with rapid government employment growth (second graph below) while productivity growth was the second highest of the last 50 years (first graph below). Econintersect: We suggest that there is no clear relationship between regulation and productivity based on the data presented. That does not mean that there is no effect - simply the data presented does not establish what the effect is.
Red Tape Rising 2016: Obama Regs Top $100 Billion Annually (The Heritage Foundation) There appear to be some inconsistencies in the data presented, or at least in the interpretation. The first graph presents new regulations and costs for regulations only in the year initiated, whereas the second graph appears to show the numbers for each year representing the cumulative effects of all regulation (yearly costs and employees). The focal point of the criticism of the Obama administration is the cost of energy policy. The authors go through extensive arguments to say that the regulations underestimate the costs of regulations but simply accept the presented numbers for benefits. Others have researched the historical record and have found that costs of regulations have been systematically less that estimated originally and benefits higher. See Government Regulation: Costs Lower, Benefits Greater Than Industry Estimates (Pew Charitable Trust). The question of what regulation and how much is a debatable one and Econintersect is not ready to accept either position put forward by the two foundations at this point is time.
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