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What We Read Today 02 January 2017

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:

  • The Reputation of the Fed has Floundered

  • Remember the Scariest Chart Ever?  It Is Still Delivering Bad News

  • Duration of Unemployment in the U.S. is Still record Breaking

  • Sonny Perdue is a Leading Candidate for Agriculture Secretary

  • The Potential Cost of Tom Price as HHS Secretary

  • Is U.S. Life Expectancy Rolling Over?

  • GOP Huddle Over Obamacare

  • Will the Republican Plan for Obamacare be Repeal and Delay?

  • European Federalism

  • Costa Rica Gets Almost All Electricity from Renewables

  • Remittances to Mexico Spike with Trump's Election

  • And More

Articles about events, conflicts and disease around the world

U.S.

  • Perdue Is Trump’s Lead Pick for Agriculture Secretary (Bloomberg)  Sonny Perdue III, the former governor of Georgia, is president-elect Donald Trump’s leading candidate to be his U.S. secretary of agriculture, according to a person familiar with the matter.  Perdue, 70, would succeed secretary Tom Vilsack. Perdue met with Trump on Nov. 30 and told reporters they talked about agricultural commodities traded domestically and internationally. While Perdue is the front-runner, the decision isn’t final, the person said.

  • The potential costs of Tom Price as HHS secretary (The Conversation)  Unlike other Republican critics of the Affordable Care Act (ACA), Price, an orthopedic surgeon, has offered many replacement plans of unmatched detail. His Empowering Patients First Act was 242 pages long. It offers a market-based vision for American health care, restricting government involvement.  His plan, however detailed, lacks specifics about what will happen to the 20 million or so who gained insurance coverage under the ACA. This includes people who have preexisting conditions and those who rely on Medicaid, the federal-state program that provides insurance to poor children, pregnant women of a certain income level as well as the disabled and blind under 65.  Price’s policies could also limit access to care for children, women and for many people of all ages with chronic and mental illnesses.

  • Is Life Expectancy in the U.S. Rollong Over? (Twitter)

life.expectancy.us.1990.2015

  • Pence to huddle with House GOP on ObamaCare (The Hill)  Vice President-elect Mike Pence will attend the GOP conference meeting on Wednesday morning as Republicans plot their path forward on repealing and replacing the Affordable Care Act in the new Congress.  Republicans are reportedly considering delaying when parts of the repeal go into effect in order to buy more time to develop a replacement plan.

  • Repeal and Delay Is Forever (New York)  The author says that the healthcare prospects for Republicans are bleak because their "repeal and replace" plan has not second step after repeal.  An excerpt:

But any plan to replace Obamacare with something “terrific,” or even something almost as good as Obamacare, will violate conservative dogma. There’s no way around this. Despite the apparent complexity of the issue, it’s a very simple problem of resource allocation. In a free-market system, tens of millions of Americans will not be able to afford medical care because the cost of their treatment exceeds their income, either because they’re too poor, or because they’re too sick. A Kaiser Family Foundation analysis finds that 52 million Americans under the age of 65 have preexisting conditions that would make it impossible for them to purchase health insurance in the individual market that existed before Obamacare. An insurance-industry study from 2008 found that 13 percent of people who applied for coverage in the individual market were rejected — a figure that doesn’t even count the 34 percent of people who had to buy policies that excluded coverage of treatments for their preexisting conditions, let alone those who didn’t even bother applying because they knew they couldn’t afford it.

  • 5 tax forum complaints about the ACA (LifeHealthPro)  There is much confusion among Obamacare users about how to interact with the IRS.  This article presents what are the most common areas.

EU

  • European Federalism and EMU Experience (Constantin Gurdhiev, True Economics)  CG contributes to GEI.  Written 3 1/2 years ago, this essay is even more pertinent today.  CG suggests the direction for the EU is not toward a "United Sates of Europe" which many have suggested but more toward a "Federation of Europe" with distributed governance.  Here is a key excerpt:

If European federalism is to evolve, it will have to evolve on the basis of accommodating more diversity, not by homogenising the system by reducing differentiation and fragmentation of the political institutions. It will have to adopt market-like features where turnover of ideas is fast, deployment of solutions (goods and services) is rapid and never permanent, and the system thrives on diversity. This is the exact opposite of the harmonisation and consolidation implicit in traditional federalism, but is rather more consistent with Swiss federalism. The key to this form of federalism is that it severely limits the central powers of taxation and redistribution of resources and vests powers of policy origination, design and implementation in local hands. It also acts to encourage policy heterogeneity - an added bonus in the world of uncertainty, as it allows for creation of policy hedges: a shock impacting different systems differently necessarily shows both the pitfalls and the strengths of various institutions and regulations. In other words, Europe needs less of European centralisation and more of European diversity.

Before this can be delivered, however, Europe needs to systemically dismantle or reduce those institutions that act as an impediment to bottom-up governance - the institutions of centralisation of power.

The first for a review should be the strictest of them all - the euro. Here, the required change will see assisted exits from the euro of non-core states, leaving behind only those countries for which monetary harmonisation makes sense. Most likely these are Germany, Finland, Czech, Austria, and possibly Belgium and the Netherlands. Other countries can revert to their own currencies and/or run open currency system with euro remaining one of the legal tenders in their economies. Belgium and Luxembourg can run in a union with France, if so desired.

Costa Rica

  • Costa Rica barely used any fossil fuels in 2016 (Mashable)  Costa Rica ended 2016 on a particularly green note.  The Central American nation ran entirely on renewable energy for more than 250 days last year, the country's power operator announced.  Renewables supplied about 98.1% of Costa Rica's electricity for the year, the Costa Rican Electricity Institute (ICE) said in mid-December. Fossil fuels provided the remaining 1.9%.  The country of 4.9 million people gets most of its electricity from large hydropower facilities, which are fed by multiple rivers and heavy seasonal rains.  Geothermal plants and wind turbines are also prominent sources of power, while biomass and solar power provide a tiny but growing share of electricity. 

Mexico

  • Remittances to Mexico spike after November election (The Hill)   Remittances to Mexico saw the biggest spike in more than a decade during the month that President-elect Donald Trump was elected, Reuters reported Monday.  Mexican citizens in the U.S. sent home nearly $2.4 billion in transfers in November, which is a nearly 25% increase from the previous year, according to Mexican central bank data released Monday.  Total remittances are projected to reach a record $27 billion in 2016, which is $2 billion more than the previous year. Mexicans sent a total of $24.8 billion in remittances in 2015, overtaking oil income as a source of revenue for the country.  The jump could be a reaction to Trump’s stunning victory, as the businessman has threatened to block the transfers and has made building a wall on the border with Mexico a centerpiece of his campaign.

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

  • Years of Fed Missteps Fueled Disillusion With the Economy and Washington (The Wall Street Journal)   In the past decade Federal Reserve officials have been flummoxed by a housing bubble that cratered the financial system, a long stretch of slow growth they failed to foresee and inflation persistently undershooting their goal. In response they engineered unpopular financial rescues, launched start-and-stop bond buying and delayed planned interest-rate boosts.  Why?  Because they don't know what they are doing.  And the public confidence in the Fed has faded as the incompetence has played out.  According to Eric Rosengren, president of the Federal Reserve Bank of Boston:

“There are a lot of things that we thought we knew that haven’t turned out quite as we expected.  The economy and financial markets are not as stable as we previously assumed.”

How confidence in the Fed leader has shifted

How much confidence do you have that the Fed leader will do the right thing for the economy?

How Americans rate federal agencies

Share of respondents who said each agency was doing either a ‘good’ or ‘excellent’ job, for the eight agencies for which consistent numbers were available.

  • Remember that America's Scariest Chart? (Constantin Gurdgiev,True Economics) CG contributes to GEI.  Since the election of Donald Trump, the U.S. media has been full of praise for President Obama's record on economic recovery, setting the stage for an argument that Trump Administration is about to inherit a very strong economy, the one that, in mainstream media's minds, Trump is likely to mess up.  (The author notes that the weak recovery cannot be blamed on President Obama, just that credit for a strong recovery is misplaced.)  The chart below clearly shows:

  1. Today's employment figures represent the worst recovery from a recession on record (for any terminal point of previous recoveries, current recovery is associated with lower employment levels).

  2. Even stretching time of this recovery to present day - yielding the second longest period of a recovery since 1945, after the 1990 episode - current recovery is still the worst performing one.

  3. Looking at the slope of the 2008 line, increases in employment relative to pre-crisis situation are weaker in the current post-crisis recovery than in every other recovery, except the 2001.

employment.recessions.scariest.chart

  • U.S. Unemployment Duration is Still Record-Busting (Constantin Gurdgiev,True Economics) CG contributes to GEI.  The duration of unemployment during the Great Recession and in the subsequent recovery has been far more severe than for any post-World War II recession.

employment.unemploy.duration.recessions.since.wwii


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