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:
Trump Attacks Judges Hearing Travel Ban Case
Old Guard Republicans Push Carbon Tax
Trump Rips Nordstrom
Steve Bannon Thinks The Apocalypse is Coming
U.S. Consumer Credit Reaches New Record
UK Economy Shows Upturn Since Brexit
In Surprise Move Reserve Bank of India Does Not Cut Rates
Trade War Would Reduce GDP for Both China and U.S.
Australia Pushes for TPP Without U.S.
Why Your Utility Bill Could Be About to Go Up
How a Top Bank Whistleblower was Shut Up - By the Government
Consumers Ready to But EVs If Product Features are Right
Study Finds No Correlation Between Minimum Wage Hikes and Employment Loss
Debunking a Misleading Minimum Wage Study (The One Above)
Articles about events, conflicts and disease around the world
Trump attacks judges weighing travel ban (The Hill) President Trump on Wednesday went after a panel of federal judges weighing whether a court order blocking his travel ban should be lifted. Speaking to a gathering of law enforcement officials, Trump argued the judges should immediately reinstate the executive order in the name of national security. The president said at a gathering of the Major Cities Chiefs Association in Washington:
“I don’t want to call a court biased, so I won’t call it biased. Courts seem to be so political and it would be so great for our justice system if they could read a statement and do what’s right.”
Old-Guard Republicans to Push Carbon Tax at White House Meeting (Bloomberg) One of President Obama's proposals is not being promoted by Republicans now that Obama is out of office. A group of prominent Republicans and business leaders backing a tax on carbon dioxide were taking their case Wednesday to top White House aides, including chief economic adviser Gary Cohn. The group, including former Treasury Secretaries Hank Paulson and James Baker, is pressing President Donald Trump to tax carbon dioxide in exchange for abolishing a slew of environmental regulations. They unveiled their plan with a press conference in Washington and an op-ed in The Wall Street Journal.
Judges Block North Carolina Law Limiting Governor’s Powers (Bloomberg) When a Democrat won the governor's race, the legislature controlled by the opposition party passed laws, signed by the defeated lame duck governor, stripping the incoming governor of many executive powers. A temporary order was issued today temporarily suspending one of the key laws. Three Superior Court judges have scheduled another hearing in the case Friday and will decide whether to further postpone enforcement of the law until they can reach an ultimate decision.
The UK economy is gaining momentum despite Brexit fears, says the OECD (City A.M.) UK economic growth is gaining momentum despite concerns over Britain's future EU trade deal, according to the Organisation for Economic Co-operation and Development (OECD). The composite leading indicator rose to 99.5, according to the group of richer nations, continuing a clear upward trend from July 2016, the month after the UK's referendum on EU membership. The leading indicator tries to identify turning points in the economy’s momentum above long-term averages before it shows up in growth figures. A reading of above 100 suggests the economy is growing steadily. Econintersect: So the data indicates the UK economy is not growing steadily yet.
India Signals End to Easing Cycle, Unexpectedly Holds Rates (Bloomberg) India’s central bank unexpectedly left borrowing costs unchanged for a second straight meeting and signaled that its interest-rate easing cycle is coming to an end. The benchmark repurchase rate was left at a six-year low of 6.25%, the Reserve Bank of India said in a statement in Mumbai on Wednesday. The move was predicted by just five of 39 economists in a Bloomberg survey, while the rest saw a cut to 6%. The central bank forecast a sharp recovery in growth during the year through March 2018, helped by a rebound in consumption that has been hurt by Prime Minister Narendra Modi’s unprecedented cash ban.
How Goldman Sees a Trump Trade War Hurting U.S.-China GDP Growth (Bloomberg) If President Donald Trump imposes punitive tariffs against China of up to 10 percent, the country’s exports to the U.S. will fall as much as 25 percent, Ha Jiming, a China vice chairman at Goldman in Hong Kong, said in an article published by China Finance 40 Forum, a non-government research organization. Under that scenario, the Asian nation’s annual economic growth would decrease by as much as 1%, he wrote. Should Beijing retaliate, trade with the U.S. would also suffer and its economic growth could fall by as much as 0.25%.
Australia Strives for ‘TPP Minus 1’ After Trump Withdraws (Bloomberg) Australia will push the case for a Pacific trade deal without the U.S. at a meeting with other potential members in Chile next month, Trade Minister Steven Ciobo said. The Trans-Pacific Partnership remains “absolutely” relevant without the U.S. and the text of the accord would only need minor tweaking to allow for America’s withdrawal, Ciobo said in a Bloomberg TV interview on Wednesday.
Other Scientific, Health, Political, Economics, and Business Items of Note - plus Miscellanea
Why Your Utility Bill Could Be About to Go Up (Kent Moors, Oil & Gas Investor) KM has contributed to GEI. Energy prices around the rest of the world are up because of the strong dollar and they may be about to do the same in the U.S. Border taxes will do that because the U.S. still is (and is likely to remain for some time) a net energy importer.
Bankers Gone Bad (Full Measure) Hat tip to Roger Erickson. This is an interview with Citigroup whistleblower Richard Bowen, with some inserted interview items from Peter Wallison, a banking system apologist who blames the Great Financial Crisis on government housing policy. Roger points out that url for this article reveals what might have been the original title: http://fullmeasure.news/news/cover-story/immaculate-corruption. Inspired words! If Matt Taibbi had thought of this title first for something he wrote, it might never have been changed. Some excerpts:
Richard Bowen knew where the figurative bodies were buried at banking giant Citigroup, once the largest company in the world.
Richard Bowen: Over 60% of these mortgages and my largest area, did not meet our guidelines.
As a senior vice president, Bowen blew the whistle on Citigroup’s practices leading up to the banking crisis. Practices like buying and selling risky mortgages and misrepresenting them to the public and investors.
Richard Bowen: I started issuing warnings in June of 2006. I sent my warnings um, in a very wide distribution. I made committee presentations. I cornered people in the hallways.
Citigroup played a major role in crashing the U.S. market. It ended up getting a $45 billion taxpayer bailout to survive and eventually paid $7 billion to settle federal and state complaints.
But to this day, the Justice Department hasn’t charged any top bank executive with a crime.
This is the story of how systems intended to hold people accountable failed and Bowen claims even helped cover for them.
In 2009, Congress created the Financial Crisis Inquiry Commission. Six members were appointed by Democrats, four by Republicans.
Bowen was asked to testify. And he was eager to do it. It was a setting where he says he could publicly tell what he knew, exempt from his Citigroup confidentiality agreement. He wrote up his testimony, naming names and laying blame. But shortly before he testified something mysterious happened.
Richard Bowen: They went through and told me to take out much of the damning evidence that they had originally told me to put in.
He says the commission wanted major edits.
Richard Bowen: Now what they also conveyed is that the edits were not optional. If I did not make the edits I would probably be taken off the witness list.
Bowen says he had to cut out eight pages almost a third of his planned testimony. And almost nobody knew that when he testified on April 7, 2010.
Study: Consumers Ready to Buy EVs If Product Right (Wards Auto) A just-released study by the consulting firm, based largely on market research in the U.S., Germany and Norway, suggests a large cross-section of consumers routinely gives purchasing an EV serious consideration until late in the buying process, ultimately opting for a conventionally powered vehicle because they can’t find an EV that precisely meets their needs. For some, limited driving range between charges continues to be a factor, but for many the decision to avoid EVs is more about the limited variety of model types available, higher purchase costs and somewhat erroneous maintenance concerns.
Raise Wages, Kill Jobs? (National Employment Law Project) Seven decades of historical data find no correlation between minimum wage increases and employment levels. The study finds that loss of employment is associated with recessions and depressions, not with minimum wage increases. This work has been criticized - see next article.
Debunking a Misleading Minimum Wage Study (Foundation for Economic Education) The author takes the data without recognizing general economic conditions and finds that for years following no minimum wage changes there were none with job losses. He suggests that this indicates the researchers in the preceding article "asked the wrong question". Econintersect: The author does not say how many of the 25 years mentioned in the excerpt below did not have a recession or depression. That would be a significant consideration. If the majority did not then his conclusion might well have been that loss of employment is correlated with recessions rather than increasing minimum wage. The graphic he presents (shown below) does not present a very convincing argument to us that raising the minimum wage. This review needs more work.
Of the 34 usable years, only 9 are after minimum wage changes. Of these, 3 show job loss in the restaurant industry (1991, 2008, and 2009) - that's 1 in 3. Of the 25 years with no minimum wage change, none show job loss in that industry. None.
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