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What We Read Today 06 May 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:

  • Why Ralph Nader is Ripping Bernie Sanders

  • Seven Ways to Transform 21st-Century Economics — and Economists

  • Data Says Big Governments can be Best

  • They Go Together: Freedom, Prosperity, and Big Government 

  • Quality of Government, Not Size, Is the Key to Freedom and Prosperity

  • Globalization is the solution, not the problem, Asia's economic leaders say

  • Goldman says oil prices on the brink of ‘capitulation’

  • How the House healthcare bill measures up to Trump's promises

  • Obama's big speech paydays may do the Dems a favor

  • ObamaCare vote throws curve into tax reform

  • Here’s the path the health bill could take in the Senate

  • Why 60 percent of small-business owners want Obamacare repealed

  • U.S. Rents are the Highest in 57 Years

  • Buffett warns China that markets can sometimes become a 'casino'

  • And More

Articles about events, conflicts and disease around the world

Global

  • Globalization is the solution, not the problem, Asia's economic leaders say (CNBC)  Asian nations are pressing forward with globalization.  Protectionist rhetoric may be in vogue in among some Western politicians, but many of the top economic leaders in Asia are saying they aren't worried. These officials suggest trade will become more open and free, and globalization is the solution to many of the world's problems.  From the pulpit at this week's Asian Development Bank meeting in Japan, central bankers and finance ministers from across the region fought back against the idea that international commerce should face more restrictions. Some even rejected the notion that such moves were feasible, despite the occasional setback like the U.S. pulling out of the Trans-Pacific Partnership (TPP) — a trade deal that would have established rules and opened markets between 12 nations accounting for roughly 40% of global GDP.

  • Goldman says oil prices on the brink of ‘capitulation’ (Market Watch)   After crude-oil prices took a beating over the past week, falling to their lowest level since before OPEC-led a deal to curb output in November, analysts at Goldman Sachs say crude may reaching a “capitulation” point.  In a research note dated Friday, Goldman commodity strategists, headed by Damien Courvalin and Jeff Currie, said their 2017 forecast for Brent crude oil trading on London’s ICE exchange (LCON7, +2.25%) to hit $50 a barrel could be in jeopardy, if the prices continue to come under pressure.  An unrelenting ramp up by U.S. shale-oil producers is being widely credited with the recent downturn in price action for oil, which peaked in late February.

U.S.

  • How the House healthcare bill measures up to Trump's promises (The Hill)  This article explains why measuring the House-passed healthcare bill against the president's campaign promises depends on how his words are parsed.  But there are many possible outcomes which would be interpretted by many as broken campaign promises.

  • Obama's big speech paydays may do the Dems a favor (CNBC)  Much of the political world, especially liberals, are still having a bit of tough time processing former President Barack Obama's decision to accept a $400,000 offer from a Wall Street firm to deliver a speech this coming fall.  Even Massachusetts Democratic Senator Elizabeth Warren called the decision "troubling."  And the fact that Mr. Obama warmed up for that Wall Street speech by making a separate $400,000 appearance for a cable TV network event late last month didn't make it any easier for liberals to swallow this new reality.  But here is the summary from this commentary:

  • Former President Obama's decision to take a huge Wall St. speech payday is an embarrassment.

  • But it's a needed wake up call for Democrats who need to get back to their roots.

  • And it will help Democrats avoid the nostalgia trap moving forward.

  • ObamaCare vote throws curve into tax reform (The Hill)  The House’s passage of legislation to repeal and replace ObamaCare has thrown a new curve into Republicans’ efforts to overhaul the tax code.  If the Senate gets could get bogged down on healthcare, the entire legislative agenda could suffer.  Republicans plan to pass both healthcare and tax legislation through a process known as “budget reconciliation” so that the bills can advance without Democratic support.  They have already passed a fiscal 2017 budget that contains instructions for a healthcare bill under reconciliation, and want to finish ObamaCare repeal before moving to tax reform legislation. How long that might take is anyone’s guess.  Senate GOP leaders haven’t set a timetable for passing a healthcare bill, signaling quick action is unlikely.

  • Here’s the path the health bill could take in the Senate (Market Watch)  For some lawmakers, getting it right will mean modifying the House’s bill’s $800 billion cut to Medicaid. That includes Republican Sens. Rob Portman of Ohio and Shelley Moore Capito of West Virginia — whose states expanded Medicaid under Obamacare.  Other lawmakers may try to ensure that more Americans keep health insurance than under the House plan. A Congressional Budget Office analysis of the original House bill estimated that it would leave 24 million more Americans uninsured over a decade. 

  • Why 60 percent of small-business owners want Obamacare repealed (CNBC)  Health care has become an ongoing source of pain for many small-business owners. It was the top issue owners wanted Trump to address in a survey of 700 owners and prospective buyers in late February by BizBuy Sell, a marketplace for small businesses.

Among respondents, 60 percent favored an ACA repeal. The major reason: spiraling health insurance premiums — often a result of insurance companies fleeing the marketplace.

It is a trend affecting business owners in all states. Ross Coulter, 49, and his wife, who run a two-person public relations firm in Dallas, have been hunting for a new health insurance plan after Humana notified them it was discontinuing their current one. They had no immediate plans to slow their search after the House vote. They are looking for an affordable replacement by July 1 for the high-deductible plan, for which premiums are $900 a month for the couple and their three children.

China

  • Buffett warns China that markets can sometimes become a 'casino' (CNBC)  The Oracle of Omaha offered advice to the world's second-largest economy, which in recent years has struggled to manage the fallout from an economic slowdown. Chinese authorities have imposed capital controls, and tightly manage the levels of its currency, the yuan:

"Early on in the development of markets there's probably some tendency for them I think to be more speculative than markets that have been around for a couple hundred years."

Australia

Brazil

Canada

Mexico

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

  • Nader Rips Sanders and Democrats for Putting Single-Payer on Back Burner (CounterPunch)  Last month, Senator Bernie Sanders (I-Vermont) promised single payer activists that he would introduce his single payer bill in the Senate within the next couple of weeks.  Now, according to Sanders’ staff, it’s not going to happen.  In putting single payer on the back burner, Sanders has reverted to his November 2016 position when his staff told activists that no single payer bill would be introduced in the Senate because the Democrats wanted to focus on defeating the Republicans.  Consumer advocate Ralph Nader is highly critical:

“It’s one thing for Bernie Sanders to lead his followers back into the established Democratic Party.  But why can’t he pull the Democratic Party to adopt his highly popular agenda, led by single payer, which garnered many millions of voters last year? Those voters must be starting to wonder.”

No one can deny it: economics matters. Its theories are the mother tongue of public policy, the rationale for multi-billion-dollar investments, and the tools used to tackle global poverty and manage our planetary home. Pity then that its fundamental ideas are centuries out of date yet still dominate decision-making for the future.

Today’s economics students will be among the influential citizens and policymakers shaping human societies in 2050. But the economic mindset that they are being taught is rooted in the textbooks of 1950 which, in turn, are grounded in the theories of 1850. Given the challenges of the 21st century—from climate change and extreme inequalities to recurring financial crises—this is shaping up to be a disaster. We stand little chance of writing a new economic story that is fit for our times if we keep falling back on last-century’s economic storybooks.

Using indicators of economic freedom, personal freedom, and prosperity for a sample of 144 countries, I arrived at two significant results. First, I found that the data showed economic freedom to be positively associated with both personal freedom and prosperity. Second, I found that greater personal freedom and prosperity were associated with larger, not smaller, governments.

Click for large image.

  • They Go Together: Freedom, Prosperity, and Big Government (Ed Dolan; Evonomics) The Cato Institute has reported that economic freedom and personal freedom are closely related -see first graph below.  The relationship between economic and personal freedom is partly explained by the fact that both are positively associated with income. As the the second graph below shows, that relationship is nonlinear for both measures of freedom. The log of real GDP per capita, expressed in U.S. dollars at purchasing power parity, provides a reasonably good fit. The correlation coefficients are 0.51 for log GDP and the personal freedom index, and 0.56 for log GDP and the economic freedom index.  An even stronger correlation exists between the quality of government provided and/supported functions of education, health, and safety and personal freedom - see third graph below.


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