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:
Opinion: The Only Way to Get 3% Growth is to Increase Immigration
Past U.S. Growth Depended in Part on Outsourcing Jobs
BBC Compiles Potential Conflicts of Interest List for Trump
Trump Meets with Al Gore on Climate Change
Shale Companies Hedge Production for Next 2 Years Turning Oil Market Upside Down
Elon Musk Most Admired tech Exec
Europe Wants to Weaken Bank Regulations at Absolutely the Worst Time
Colossal African Solar Farm Could Sell Power to Europe
Carson Finally Accepts Cabinet Position
Paul Ryan: First Order of Business is to Repeal Obamacare
Trump Advisors Want to Privatize Indian Reservations
Companies are Furious about the Dakota Pipeline Halt
Shooter Was 'Investigating Pizzagate'
Dollar May Have Weaker 2017
Euro May Stay above Dollar Par
Italian Vote Could Shatter Europe
U.S. Tries to Reassure China after Trump Twitter Attacks
Australia Also has Giant Solar Farm
Chinese Real Estate Purchases Surge in Seattle and Toronto after Vancouver Institutes Tax
Articles about events, conflicts and disease around the world
This Is the Absolutely Worst Time to Weaken Global Bank Rules (American Banker) Hat tip to Chris Whalen. Bankers associations complaining about Basel's updated capital, liquidity and leverage standards rarely ever cite the incredible damage that weak or failed banks inflict on ordinary individuals. It defies logic that precisely when European banks need more capital to sustain weaknesses in their loan and derivatives portfolios, European legislators are being very short-sighted in asking for lighter bank rules for banks. Because politicians' major goal is getting re-elected, they are not thinking of how important it is to teach banks to stand on their own feet. Legislators are not doing their constituents any favors by allowing banks to avoid measuring the full extent of their exposure to credit risks.
Five decades of coordinated bank regulatory efforts to improve the safety and soundness of internationally active banks is under assault.
Anti-globalism sentiment in various parts of Europe and the U.S. has spilled over to international standard setting bodies such as the Basel Committee on Banking Supervision. While it is understandable that people around the world are questioning the benefits of global trade, reverting to a "my country first" mentality will end up hurting local economies, which will adversely affect banks.
The collosal African solar farm that could power Europe (BBC News) Morocco is building solar infrastructure that may eventually provide 100% of its power. With future expansion they could export electricity to Europe. The country plans to generate 14% of its energy from solar by 2020 and by adding other renewable sources like wind and water into the mix, it is aiming to produce 52% of its own energy by 2030. The solar facilities will produce electricity 24/7/365 because the technology is based on thermal energy storage, not photovoltaic production only when the sun is shining. The same thing is happening in Nevada where a thermal technology solar farm is expected to provide 10% of California's residential energy requirements. See also article under Australia and Take a Peek Inside Nevada's New Solar Farm that Generates Power 24/7 with Molten Salt (Digital Trends) - construction time lapse video below:
After hesitation, Carson accepts Trump's offer to head U.S. housing department (Reuters) Retired neurosurgeon Ben Carson, a rival-turned-supporter of Donald Trump, overcame his stated qualms about a lack of government experience on Monday to accept the president-elect's nomination to lead the Department of Housing and Urban Development. Democrats criticized the Republican president-elect's latest pick for his incoming administration, calling Carson unqualified to take over $48-billion agency that oversees public housing. Carson, a popular writer and speaker in conservative circles, has been a close adviser to Trump since he dropped out of the 2016 Republican presidential primary contest and he is a vice chairman of Trump's transition team. Trump discussed the job with Carson before the Thanksgiving Day holiday last month, although - despite his own presidential run - Carson had previously indicated reluctance to take a position in the incoming administration because of his lack of experience in federal government.
Speaker Paul Ryan tells ‘60 Minutes’ that Affordable Care Act repeal will come first (MarketWatch) The Affordable Care Act will be the top priority come January, House Speaker Paul Ryan told CBS’s “60 Minutes” in an episode that aired Sunday evening. With the House and Senate as well as the White House in Republican hands beginning next month, Ryan said he plans to repeal the Affordable Care Act first but allow for a “good transition period” for the 20 million people who obtained health-care coverage through the law’s many provisions. The speaker’s comments aligned with reports that congressional Republicans plan to vote on a repeal the law early next year, although the actual repeal would only go into effect later, once a replacement plan has been more fully formulated.
Trump advisors aim to privatize oil-rich Indian reservations (Reuters) Native American reservations cover just 2 percent of the United States, but they may contain about a fifth of the nation’s oil and gas, along with vast coal reserves. Now, a group of advisors to President-elect Donald Trump on Native American issues wants to free those resources from what they call a suffocating federal bureaucracy that holds title to 56 million acres of tribal lands, two chairmen of the coalition told Reuters in exclusive interviews. The group proposes to put those lands into private ownership - a politically explosive idea that could upend more than century of policy designed to preserve Indian tribes on U.S.-owned reservations, which are governed by tribal leaders as sovereign nations. The tribes have rights to use the land, but they do not own it. They can drill it and reap the profits, but only under regulations that are far more burdensome than those applied to private property. Markwayne Mullin, a Republican U.S. Representative from Oklahoma and a Cherokee tribe member who is co-chairing Trump’s Native American Affairs Coalition, said:
"We should take tribal land away from public treatment. As long as we can do it without unintended consequences, I think we will have broad support around Indian country."
Standing Rock protest: Companies attack Dakota Pipeline ruling (BBC News) Two firms behind a controversial oil pipeline in the US have accused the White House of political interference for failing to approve its completion. The US Army said it would not authorise the final section of the Dakota Access Pipeline to allow alternative routes to be considered. The decision is a win for the Standing Rock Sioux Tribe who have protested against the pipeline for months. But the next US president, Donald Trump, says he supports the project. The multi-billion, 1,200-mile (1,900 km) pipeline, crossing four states, is intended to slash the costs of transferring crude. It is nearly complete except for a section planned to run under Lake Oahe, a reservoir on the Missouri River. The Standing Rock Sioux Tribe and their supporters fear it will contaminate drinking water and run over sacred burial sites.
N.C. man told police he went to D.C. pizzeria with assault rifle to ‘self-investigate’ election-related conspiracy theory (The Washington Post) A North Carolina man was arrested Sunday after he walked into a popular pizza restaurant in Northwest Washington carrying an assault rifle and fired one or more shots, D.C. police said. The man told police he had come to the restaurant to “self-investigate” a false election-related conspiracy theory involving Hillary Clinton that spread online during her presidential campaign. Police said 28-year-old Edgar Maddison Welch, of Salisbury, N.C., walked in the front door of Comet Ping Pong and pointed a firearm in the direction of a restaurant employee. The employee was able to flee and notify police. Police said Welch proceeded to discharge the rifle inside the restaurant; they think that all other occupants had fled when Welch began shooting. Welch has been charged with assault with a dangerous weapon. Police said there were no reported injuries. See next article.
The saga of 'Pizzagate': The fake story that shows how conspiracy theories spread (BBC News) Fake news can get too real (see preceding article). No victim has come forward. There's no investigation. And physical evidence? That doesn't exist either. But thousands of people are convinced that a paedophilia ring involving people at the highest levels of the Democratic Party is operating out of a Washington pizza restaurant. The story riveted fringes of Twitter - nearly a million messages were sent last month using the term "pizzagate". So how did this fake story take hold amongst alt-right Trump supporters and other Hillary Clinton opponents? Let's start with the facts:
In early November, as Wikileaks steadily released piles of emails from Clinton's campaign chairman John Podesta, one contact caught the attention of prankster sites and people on the paranoid fringes.
James Alefantis is the owner of Comet Ping Pong, a pizza restaurant in Washington. He's also a big Democratic Party supporter and raised money for both Barack Obama and Hillary Clinton. He was once in a relationship with David Brock, an influential liberal operative.
Alefantis - who's never met Clinton - appeared in the Podesta emails in connection with the fundraisers. And from these thin threads, an enormous trove of conspiracy fiction was spun.
"Everyone thinks the dollar's going to go higher because the Fed's going to raise rates. [There have] been five major rate hikes during recoveries by the Federal Reserve, and every one of them resulted in a lower dollar, not a higher dollar."
It looks like the dollar won't be catching the euro quite yet (CNBC) The euro looks set to put a pause in its post-U.S.-election drop. The euro was near $1.072 on Monday, following a drop to a 20-month low of $1.0503 against the dollar overnight after Italians voted down a referendum that would have changed how their parliament works. See also article under U.S., above. Marc Chandler, global head of currency strategy at Brown Brothers Harriman commented:
"If the [euro] doesn't sell off on bad news, I think it's telling us something. I think it's going to correct higher."
Abe to become first Japanese PM to visit Pearl Harbor (Reuters) Japanese Prime Minister Shinzo Abe will visit Pearl Harbor this month with U.S. President Barack Obama, becoming his country's first leader to travel to the site of the Japanese attack 75 years ago that drew the United States into WW II. The Dec. 26-27 visit will come seven months after Obama became the first serving U.S. president to visit the Japanese city of Hiroshima, on which the United States dropped an atomic bomb in the closing days of the war, in 1945. Abe will hold his final summit meeting with the outgoing U.S. president during the trip to Hawaii. Abe told reporters on Monday:
"This will be a visit to console the souls of the victims. I would like to show to the world the resolve that horrors of war should never be repeated."
Trump attacks China in Twitter outburst (BBC News) US President-elect Donald Trump has posted a series of tweets criticising China for its monetary policy and its operations in the South China Sea. "Did China ask us if it was OK to devalue their currency" and "build a massive military complex?" he asked. "I don't think so!" China said both sides should "stick to basic principles" of the relationship. Last week Mr Trump risked a diplomatic rift with China by speaking directly with Taiwan's president. The highly unusual move saw China lodge a complaint with the US. In response to the latest tweets, without directly referring to them, the Chinese foreign ministry said the US and China have long had "highly mutually beneficial" relations. A spokesperson declined to comment on "he and his team's method and what's the thinking behind it", referring to Mr Trump.
U.S. seeks to reassure Beijing after Trump call with Taiwan leader (Reuters) The White House said on Monday it had sought to reassure China after President-elect Donald Trump's phone call with Taiwan's leader last week, which the Obama administration warned could undermine progress in relations with Beijing. The statement from a spokesman for U.S. President Barack Obama highlighted concerns about the potential fallout from Trump's unusual call with Taiwan President Tsai Ing-wen on Friday, which prompted a diplomatic protest from Beijing on Saturday. White House spokesman Josh Earnest said senior National Security Council officials spoke twice with Chinese officials over the weekend to reassure them of Washington's commitment to the "One China" policy and to "reiterate and clarify the continued commitment of the United States to our longstanding China policy". The policy has been in place for 40 years and is focused on promoting and preserving peace and stability in the strait separating China and Taiwan, which is in U.S. interests, Earnest said.
American Shale Companies' Rush to Hedge Is Turning the Oil Market Upside Down (Bloomberg) U.S. shale oil companies are using the post-OPEC rally to hedge their oil price risk for next year and 2018 above $50 a barrel, bankers, merchants and brokers said, pushing the forward oil curve upside down. The rush to hedge -- locking in future cash flows and sales prices -- could translate into higher U.S. oil production next year, offsetting the first output cut by the Organization of Petroleum Exporting Countries in eight years. As such, the producer group could end up throwing a life-line to a sector it once tried to crush. The change in futures contract prices over the past 5 days is shown below:
Al Gore meets Donald Trump and Ivanka for climate talks (BBCNews) Something thamany would say is unexpected has happened. Former Vice President Al Gore has met President-elect Donald Trump and his daughter Ivanka Trump to discuss climate policy. The meeting "was a sincere search for areas of common ground", said Mr Gore, a climate change activist. During his presidential campaign, Mr Trump called man-made climate change a "hoax" perpetuated by China. His daughter Ivanka reportedly wants to make the subject one of her signature issues. It is unclear what role she will have in her father's administration, but he had said that his children would take over his global business interests. All three of Mr Trump's adult children are serving on his transition team.
Opinion: Sorry Mr. Trump, the only way to get to 3% growth is to hire more Mexicans (MarketWatch, MSN Money) There are only two ways to get the economy to move faster over a sustained period: Hire more workers, or make the workers we have more productive. Those two factors — working harder and working smarter — determine the economy’s potential growth rate, or its speed limit. Potential growth is the sustainable level of output that the economy can supply, and right now it’s below 2%. Unless we can magically get productivity to improve at the fastest rates in the past 50 years, the only way to get to the gross domestic product to grow at 3% on a sustainable basis would be to hire 33 million workers over the next 10 years. The problem? With the working-age population barely growing, the supply of qualified and willing Americans to hire would quickly run out, which means we’d need to open up the borders and let more immigrants in. See also next article. Here’s the economic equation: Potential growth = labor-force growth + productivity growth.
U.S. Had to Export Jobs for Demographic Reasons (John Lounsbury, GEI Analysis) In this February, 2011 study, the conclusion was that the labor market in the U.S. was insufficient to have produced all the manufactured goods needed to maintain domestic consumption without "exporting jobs" between 1995 and 2008. Econintersect: Of course, the same result could have been obtained by "increasing immigration" over the same 14 years.
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