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What We Read Today 28 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:

  • Nominal Wage Growth Shows U.S. Economy is Not Overheating

  • The Betrayal of the Promise of Barack Obama

  • Women's Pay Equality in the U.S. has Not Improved for 5 Years

  • Hilarious Video Lip Reads What Was Said on Inauguration Day

  • Silver Stocks are On a New Upleg

  • Multinational Companies Have Been in Decline - Now They are in Trouble

  • U.S. Wage Disparity Continues to Worsen in 2015

  • For 37 Years the Earnings of U.S. Rich have Gotten Richer Much Faster than Poor

  • Trump immigration curbs cause worldwide chaos, panic, anger 

  • Green Card Holders Subject to Case By Case Review

  • Is a Border Wall a Terrible Idea for Both Immigrants and Americans?

  • From Various Sources, There are Five Supreme Court Nominees in the Running

  • Does Betsy DeVos Really Owe Ohio Taxpayers $5 Million?

  • Lady in Red Enchants President Trump

  • Finland Starts Guaranteed Income Pilot

  • Syrian family with U.S. visas denied boarding Paris-Atlanta flight

  • Iran Bans U.S. Citizens

  • Modi Defends Diversion of Indus Basin Water to Punjab

  • Made in Vietnam Was on a Lot of Heads at the Inauguration

  • And More

Articles about events, conflicts and disease around the world

Global

  • The multinational company is in trouble (The Economist)  President Trump is unusual in his aggressively protectionist tone. But in many ways he is behind the times. Multinational companies, the agents behind global integration, were already in retreat well before the populist revolts of 2016. Their financial performance has slipped so that they are no longer outstripping local firms. Many seem to have exhausted their ability to cut costs and taxes and to out-think their local competitors. Mr Trump’s broadsides are aimed at companies that are surprisingly vulnerable and, in many cases, are already heading home. The impact on global commerce will be profound.

U.S.

  • U.S. Wage Disparity Took Another Turn for the Worse Last Year (Bloomberg)  Top wage earners last year made 5.05 times what their lowest-income counterparts took home, the widest gap in data going back to 1979, according to the Labor Department. What’s worse, it shows the most recent improvement (in 2014) was just a blip, and the trend is again moving in the wrong direction seen over almost four decades.  Resilient economic growth and a solid stretch of hiring the past few years had raised expectations that the gap between rich and lower-income workers would shrink in a sustained manner. The reality was disappointing. The growing divide underscores the angst that helped land President Donald Trump in the White House, with his appeal to working-class voters feeling left behind in the economy.

  • Trump immigration curbs cause worldwide chaos, panic, anger (Reuters)   President Donald Trump's most far reaching action since taking office plunged America's immigration system into chaos on Saturday, not only for refugees but for legal U.S. residents who were turned away at airports and feared being stranded outside the country.  Immigration lawyers and advocates worked through the night trying to help stranded travelers find a way back home. Lawyers in New York sued to block the order, saying many people have already been unlawfully detained, including an Iraqi who worked for the U.S. Army in Iraq.  Confusion abounded at airports as immigration and customs officials struggled to interpret the new rules, with some legal residents who were in the air when the order was issued detained at airports upon arrival.

  • 'Case by case' approach for U.S. green card holders under Trump's new order (Reuters)  U.S. green card holders from Syria and six other Muslim-majority countries traveling outside the United States need to check with a U.S. consulate to see whether they can return, senior U.S. administration officials said on Saturday. New restrictions on immigrants and refugees in an executive order signed by President Donald Trump will mean legal permanent residents who have passports from the seven countries have to be cleared back into the United States on a case-by-case basis, an official told reporters in a briefing.  The official defended the scope and execution of the new rules, saying it moved with "astonishing rapidity" but worked as intended.  the official said:

"It's being cleared on a case-by-case basis and being moved expeditiously." 

Advocates for a border with a full wall—more drones, 5000 more Border Patrol agents—will argue that it’s just on the border, so it’s not something everyone should worry about. The internal immigration checkpoints, the horror stories of searches for drugs, criminalizing helping immigrants, or even giving them a ride somewhere, as Alabama decided to do—when will it be enough? When will America be safe enough from terrorists, and from poor, migrant workers alike?

Building a few hundred miles of border wall, just sent immigrants across more dangerous patches of desert, and emboldened people smugglers. A full wall may stop them all initially, but maybe then they’ll come by boat like Cubans or Haitians. There is a market for cheap labor, and a willing workforce fighting like hell to get to it.

A wall will punish both Americans and peaceful immigrants in the meantime, yet never changing the basic truth that if people want to move, they will.

 On Wednesday, January 25, President Donald Trump stated that he would announce his nominee to succeed Justice Antonin Scalia on the U.S. Supreme Court on Thursday, February 2.  Various reports indicated a consensus of three names on Trump’s short list: Judges Neil GorsuchThomas Hardiman, and William Pryor. In addition to those three names, Bloomberg reported that Judge Raymond Kethledge was a fourth judge on Trump’s short list, while CNN reported that Judge Diane Sykes was on Trump’s list along with Gorsuch, Hardiman, and Pryor.

  • Verbatim fact check: Does Betsy DeVos owe Ohio taxpayers $5 million? (Ballotpedia)  In a press release announcing his opposition to the confirmation of Betsy DeVos as secretary of education, Sen. Sherrod Brown (D-Ohio) claimed, “If Betsy DeVos wants to support education, she can start by paying the $5 million she owes Ohio taxpayers – that could support nearly 100 more teachers across our state.” Brown’s statement is incorrect in stating that DeVos owes $5 million to Ohio taxpayers. Brown is referring to unpaid fines levied against All Children Matter, a national political action committee, and its now defunct state affiliate, All Children Matter Ohio, for violations of state election law. DeVos was a director of All Children Matter when the fines were levied, but PAC officers are not personally liable for such fines under Ohio law.

UK

  • Lady in red enchants host with plan for a great British welcome (The Times)  Donald Trump beamed with delight yesterday as Theresa May announced that he is to pay a state visit to Britain.  In a joint press conference noted for the obvious personal warmth between the leaders, she said she had extended an invitation from the Queen which he had accepted. As she announced the invitation a clearly enchanted president, who has spoken affectionately of his mother’s love for the Queen, nodded and smiled his approval.

Finland

  • Finland’s jobless get money for nothing in pilot scheme (The Times)  A pay cheque arrives every month for 2,000 unemployed Finns whether they decide to work or spend their days on the sofa.  At the start of the year Finland became the first country in Europe to pay an unconditional basic income in an experiment to see how it affected the lives of the recipients and whether the country could afford it.  With unemployment at 9% (about 237,000 people) and the number of unfilled job vacancies at its highest since 2007, the centre-right government wanted to see whether a universal wage encouraged people into work by helping them to avoid the “benefits trap”. With Finland’s generous welfare payments, many chose not to take part-time work for fear of losing handouts.

Syria

  • Syrian family with U.S. visas denied boarding Paris-Atlanta flight: Lebanese airport sources (Reuters)  A Syrian family with visas to travel to the United States was prevented from boarding a flight bound from Paris to Atlanta on Saturday, and returned to their departure airport of Beirut, Lebanese airport sources said.  The family had traveled from Beirut to Paris overnight where they waited for their U.S.-bound journey, the sources said.  New U.S. President Donald Trump on Friday put a four-month hold on allowing refugees into the United States and temporarily barred travelers from Syria and six other Muslim-majority countries.

Iran

  • Iran to ban US citizens after Trump order (The Hill)  Iran is furious.  The Teheran government will ban Americans from entering the country after President Trump signed an executive order barring people from several Muslim-majority countries including Iran from traveling to the U.S., Reuters reported Saturday.  Iran's Foreign Ministry said in a statement:

"While respecting the American people and distinguishing between them and the hostile policies of the U.S. government, Iran will implement the principle of reciprocity until the offensive U.S. limitations against Iranian nationals are lifted." 

India

Vietnam

  • 'It's made in Vietnam!' At inauguration, origin of red Trump hats shocks many (Reuters)  One of the biggest cheers President Donald Trump received from supporters watching his inaugural address on Friday was his call to "buy American and hire American".  It was a moment rich in irony.  Many of those supporters were sporting Trump's trademark red "Make America Great Again" baseball caps that were made in China, Vietnam and Bangladesh.  Some were horrified when they discovered their Trump hats were foreign made.

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

The year 2017 looks to be the year that the Fed begins raising short-term interest rates in earnest. The Fed should raise rates only when it fears the economy is growing too fast and pushing unemployment low enough that workers are empowered to demand (and get) raises above what their productivity justifies. Data on nominal wage growth show that the economy is not getting overheated and thus a rate increase is not justified.

The pace of economic growth should be considered unsustainable only when increases in labor costs force firms to raise prices enough to accelerate inflation above the Federal Reserve’s stated goal of 2 percent inflation. An absolutely crucial link in this chain is wage growth. If nominal (i.e., not inflation-adjusted) wages simply grow at the rate of economy-wide productivity, then wages are putting no upward pressure on prices.

Click for larger image.

Source: Adapted from EPI’s “Nominal Wage Tracker

  • Barack Obama’s Betrayal (Strategic Culture Foundation)  Hat tip to Roger Erickson.  A thorough review of how Barack Obama's presidency failed to live up to its promise:

The Obama presidency ends after eight years of intense controversy. Elected on the promise to make a clean break with the previous Republican administration, to mitigate the effects of globalization, and to resolve social inequities, it instead exacerbated the global situation, in the process accelerating the decline of the United States.

  • Women's Pay Equality is Not Improving (Bloomberg)  A stubborn gender gap persists among workers 16 years or older, the age-group usually used for such comparisons. Women's weekly take-home pay relative to men’s has hovered within a narrow range during most of this economic recovery, instead of building on the improvement seen in prior decades.

  • Silver stocks are embarking on a major new bull market upleg. After getting crushed in Q4 in a few anomalous gold selloffs, this sector has rebounded dramatically over the past month.

  • The silver miners' great inherent profits leverage to silver is kicking in again as silver mean reverts higher. Investors and speculators alike are returning to chase this earnings growth.

  • Silver stocks' market-leading gains are likely just the vanguard of far larger ones coming. As a small sector, it doesn't take much capital flowing in to propel silver stocks dramatically higher.

 


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