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 dayin the early am at GEI News (membership not required for access to "The Early Bird".).
Trump health chief says no one will lose money under plan, despite expert views (The Guardian) The Trump administration claimed on Sunday that no Americans would lose money under the controversial Republican plan to overhaul healthcare, an extraordinary promise that experts have so far widely contradicted. Tom Price, Trump’s health and human services secretary, told NBC’s Meet The Press that “nobody will be worse off financially” under the party’s Affordable Care Act replacement proposal, which has come under withering bipartisan criticism.
Analysts have concluded that the Republican plan, the American Health Care Act, would in fact drastically cut tax credits for many people who buy health insurance on the open market; allow insurance companies to charge older people more; and sharply cut Medicaid, the government program that provides free or low-cost healthcare to the poorest Americans.
Insurance industry figures have also warned that, by scrapping the government mandate that forces Americans to buy health insurance, the plan will push more younger and healthier people away from buying coverage, which would sharply increase prices for those who do.
White House vows plan will offer insurance to every American, downplays upcoming CBO report (Fox News) The White House’s top economic adviser said Sunday that every American enrolled in ObamaCare will continue to have access to health insurance under the Republicans’ replacement plan, amid arguments that millions will lose their coverage. White House Chief Economic Adviser Gary Cohn said on Fox News Sunday, when asked if many of the insured will lose their health care:
“We don’t think so. We believe if you want to have coverage, we're providing you access to coverage. We have to make a better plan."
Cohn said Americans who have bought ObamaCare insurance through Medicaid will continue to have that option while others will be offered tax credits to buy insurance.
How the EPA chief could gut the agency’s climate change regulations (The Hill) The head of the Environmental Protection Agency (EPA) is fueling speculation that he could try to repeal the lynchpin of the federal government’s climate change regulations. In an interview Thursday with CNBC, Scott Pruitt cast doubt on his own agency’s 2009 conclusion that greenhouse gases “endanger both the public health and the public welfare of current and future generations.” The so-called endangerment finding was the backbone of the Obama administration’s climate change regulations. Under Obama, the EPA argued that the 2009 finding compelled it to issue greenhouse gas emissions limits for sectors like cars, trucks and power plants.
Drug dealers as murderers? Proposed Florida law targets sellers fueling overdose crisis (Miami Herald) For Miami homicide detectives, holding a drug dealer accountable for a drug OD death has often proven a futile task. And even when investigators find evidence, making a prosecution stick is challenging. Florida law specifically allows for cocaine and heroin suppliers to be charged with felony murder, but does not address peddlers of fatal doses of fentanyl or other increasingly common synthetics. But as the Florida Legislature opens Tuesday, lawmakers could close that loophole with a bill that would make prosecuting drug dealers easier if their product - a wide array of synthetic drugs including fentanyl and, more importantly, a mixture of those drugs - causes a fatal overdose. Econintersect: This has the same logic as charging the seller of alcohol with homicide for a drunk driving death, the seller of a gun with homicide if it is used in a fatal shooting, or the manufacturer (or seller) of a car if it is involved in a fatal accident.
Netherlands 'will pay the price' for blocking Turkish visit – Erdoğan (The Guardian) Turkey’s president accuses the west of nazism as row escalates after Fatma Betül Sayan Kaya, minister for families, was turned away from Turkey's Rotterdam consulate. The Dutch prime minister, Mark Rutte, who faces a stiff political test in parliamentary elections on Wednesday, said Turkey had crossed a diplomatic line by sending Kaya afdter the Dutch government had informed Turkey she would not be welcome. The Turkish government’s attitude was bizarre, said Rutte:
“We’ve ended up in a bad movie: the Turks have ramped this up themselves.”
Other Scientific, Health, Political, Economics, and Business Items of Note - plus Miscellanea
Kanth: A 400-Year Program of Modernist Thinking is Exploding (Lynne Parramore, Institute for New Economic Thinking) Across the globe, a collective freak-out spanning the whole political system is picking up steam with every new “surprise” election, rush of tormented souls across borders, and tweet from the star of America’s great unreality show, Donald Trump. But what exactly is the force that seems to be pushing us towards Armageddon? Is it capitalism gone wild? Globalization? Political corruption? Techno-nightmares? Parramore discusses the new book by Rajani Kanth: Farewell to Modernism: On Human Devolution in the Twenty-First Century. Here is a kernel (Econintersect has added emphasis):
He first caught the scent that something was off as an economics student in India, wondering why, despite his mastery of the mathematics and technology of the discipline, the logic always escaped him. Then one day he had an epiphany: the whole thing was “cockeyed from start to finish.” To his amazement, his best teachers agreed. “Then why are we studying economics?” demanded the pupil. “To protect ourselves from the lies of economists,” replied the great economist Joan Robinson.
Ideas that originated with economists have “poisoned the well” from which we now draw our ideas of appropriate personal, organizational, and national behavior. This is having severely detrimental effects on human life on the planet.
Economics 101 teaches that people act out of rational, individual self-interest, that the essence of business firms is to maximize profit, and that the measure of success in national policy is a growing GDP per capita. These teachings have become increasingly performative. That is, while they originally purported to merely describe the world, they are increasing shaping people’s behavior and the structure of organizations.
The message seems to be, from both right and left, that business is–by its very nature–an ethics-free, and care-free, sphere. And the pool of poison continues to spread, even beyond the business sphere. One recent article, for example, proclaimed “Whether we like it or not, colleges and universities are a business. They sell education to customers….While the typical for-profit firm tries to maximize its profit, non-profit universities generally try to maximize their endowments or operating revenue…” The poison has even spread to thinking about nations: Applying to nations the economists’ dictum that only actions that serve self-interest will be chosen, Posner and Weisbach argue that global climate “justice” will likely involve poorer nations, who are feeling this environmental crisis first, making payments to richer ones, to compensate them for the loss of GDP they will suffer by taking action.
These narrow, doctrinaire, and ethically scandalous claims could—and should—seem ridiculous to anyone with a modicum of social sophistication and humanistic sensibility. But even if you put ethics aside, standard economics doctrines don’t stand up to a pragmatically and empirically grounded view of the world. Any serious, grounded analysis shows that economic systems actually require a good deal of concern with ethics, interpersonal trust, and other-regarding behavior to function well. Purely opportunistic personal behavior, far from driving a market system, actually destroys it.
We seriously undermine the ability of the economy to do its job—that is, to provide for the sustaining and flourishing of life—if we continue to imagine it as an ethics-free and care-free sphere. Economic dogmas, misleadingly presented as scientific and widely disseminated through education and the media, are largely to blame for this damage. The field of economics is far overdue for an thorough-going ethical wake-up call.
The masterpiece first appeared in German in 1940 and then disappeared, only to reappear in English in 1949. It was a sensation, the largest and most scientific defense of human freedom ever published.
As is well known, Mises's book is the best defense of capitalism ever written. It covers basic economics through the most advanced material. Reading this book is the best way you could ever dream up to learn economics. Every attempt to study economics should include a thorough examination of this book.
Why Economists Don’t Know How to Think about Wealth (or Profits) (Evonomics) (Econintersect: This outstanding discussion addresses a conundrum that has preoccupied us for several years: The existence of profit is unaccounted for in economics! We have found that astounding and have not yet rationalized any solution other than the existence of profits is a destabilizing force in current monetary systems - one man's profit is another man's loss. Steve Roth really gets into the weeds of this in this article.) Steve Roth starts off with a condemnatory statement: "Until 2006, they [economists] quite literally weren’t playing with a full (accounting) deck. Most still aren’t."
After praising the sectoral balance accounting methodology for what it does address, Roth then points out it is still an incomplete statement of the financial functioning economy. He points out that MMT economists, one school that uses sectoral accounting as a basis framework, have acknowledged the incomplete nature of the description. But, Roth says, they have not advanced from that realization to propose a more complete financial description of the economy. That requires use of Integrated Macroeconomic Accounts (IMAs), first published by BEA and the Fed in 2006, with data extending back to 2006. But he points out, the data is still not complete: there were no quarterly tables in these accounts until 2012, and still not for all subsectors of the financial sector.
One of Roth's most significant points is that economists do not have a satisfactory definition of wealth. This arises, he suggests, because they have not defined the terms commonly used. The absence of capital gains from income and wealth models is one example of poor definition. If such a process is attempted, then zero sum accounting is destroyed, because unrealized capital gains are not accompanied by a money flow.
If you want to expand you understanding of the primitive state of financial economics, READ THIS ARTICLE! One interesting suggestion is that:
With the tallies of assets and net worth in the IMAs, it’s possible to replace that problematic “pool” of “money” (M) with a more solid measure: wealth. The “velocity of wealth” at least provides some alluring long-term correlations with other economic measures. Here for instance, the velocity of wealth, interest rates, and inflation over the last half century:
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