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What We Read Today 13 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:

  • Adair Turner on Synchronizing Fiscal Stimulus and Central Bank Independence

  • Wells Fargo’s Fake Accounts Grow to 3.5 Million in Suit 

  • First Quarter Restaurant Sales Performance Disappoints Despite Improvement in March

  • A Middle Class Which Aligns with the Rich Cuts Its Own Throat

  • The Crop That Ate America

  • Global cyber attack slows but experts see risk of fresh strikes

  • U.S. fails to reassure Europe, Japan over 'Trumponomics'

  • Five story lines to watch in Trump-Comey fight

  • Inside the White House: Comey Damage Control And No Easy Way Out

  • Comey Willing To Testify, But Only In Public Setting

  • There's a plan in Congress to start charging troops for their GI Bill benefits

  • States Where the Economy Isn't Struggling to Recover

  • NHS cyber-attack: Amber Rudd says lessons must be learnt

  • Germany can save the euro by bringing back the Deutsche mark

  • Two years after the earthquake, why has Nepal failed to recover?

  • North Korea Would Talk to U.S. If Conditions Right

  • Lessons for China in failed US Silk Road initiative

  • In blow to Trump, GE backs NAFTA and voices support for Mexico

  • How Venezuela's Protests are Different this Time Around 

  • And More

Articles about events, conflicts and disease around the world

Global

  • Global cyber attack slows but experts see risk of fresh strikes (Reuters)  A global cyber attack forced a European carmaker to halt some production lines, hit Russian computers with more than half of suspected infections, struck schools in China and hospitals in Indonesia, though it appeared to be dying down on Saturday.

  • U.S. fails to reassure Europe, Japan over 'Trumponomics' (Reuters)  The United States said on Saturday the world's other rich economies were getting used to the policy plans of President Donald Trump, but Europe and Japan showed they remained worried about Washington's shift.  Officials from the Group of Seven nations met in southern Italy hoping to hear more about Trump's plans which they fear will revive protectionism and set back the global approach to issues such as banking reform and climate change.  U.S. Treasury Secretary Steven Mnuchin said the United States reserved the right to be protectionist if it thought trade was not free or fair.

U.S.

  • What will Comey say?

  • What will Rod Rosenstein say and do?

  • Will GOP continue to back Trump?

  • What will happen with the FBI investigation?

  • Will Trump be able to restrain himself on Twitter?

  • Inside the White House: Comey Damage Control And No Easy Way Out (Bloomberg)  People familiar with the inner workings of the White House sought to portray the situation as serious, but not frantic or desperate -- more like a bad news cycle the president needs to put behind him, in the words of one outsider who is in frequent contact with White House staff.

But Trump’s team recognizes that they’ve been forced on the defensive. One White House staffer expressed frustration, saying the media was “crying wolf” with every controversy and by portraying the week’s events as threatening Trump’s grip on the presidency. 

The consensus in some parts of the administration is that the best thing Trump can do to help himself would be to pick a strong replacement for Comey who can garner broad support in Congress. But the timing for a nomination is unclear.

  • NYT: Comey Willing To Testify, But Only In Public Setting (Talking Points Memo)  Fired FBI Director James Comey is willing to testify before Congress on the condition that he is able to do so in public, the New York Times reported Friday.  Comey declined an invitation from the Senate Intelligence Committee to be interviewed in a closed-door hearing next Tuesday, according to Sen. Mark Warner (D-VA), the ranking Democrat on that panel.  But a “close associate” of Comey’s told the Times he is willing to speak as long as he can do so in an open hearing.

  • There's a plan in Congress to start charging troops for their GI Bill benefits (Military Times)  Hat tip to Roger Erickson.  A congressional proposal to make service members buy into their Post-9/11 GI Bill benefits surprised veterans groups on Tuesday, with advocates divided over whether it amounts to a long-term fix for the benefit or an unfair bill for veterans. The plan (draft legislation from House Veterans Affairs Committee Chairman Phil Roe, R-Tenn.) would deduct $2,400 from future service members’ paychecks to establish eligibility for revamped post-military education benefits. This was first reported Tuesday by Task & Purpose.  Veterans of Foreign Wars National Commander Brian Duffy, in a statement:

“This new tax on troops is absurd.  Ensuring veterans are able to successfully transition back to civilian life after military service is a cost of war, and not a fee that Congress can just pass along to our troops.  Congress must stop nickeling and diming America’s service members and veterans.”

states.top.bottom.gdp.4q.2017

UK

Germany

Germany can leave the eurozone and return to the Deutsche mark. Judging from PPP comparisons, the Deutsche mark would probably trade at about a 25 percent premium to the U.S. dollar and around a 30 percent to 40 percent premium to the euro. Post exit, the euro would probably fall to about 0.90 US dollars, while the Deutsche mark would trade around 1.25 US dollars. Exchange rates would be volatile as financial institutions, including central banks, rushed to dump euros and buy Deutsche marks.

Italy and the other members of the eurozone would benefit from a cheaper euro. German consumers and industry would get a windfall; paying off euro denominated debt with more valuable Deutsche marks. How big a windfall would depend on where the initial exchange rate was set. German exporters would have to deal with higher export prices, but they would have the benefit of lower import costs as well as the benefit of a de facto debt reduction. Switching to the Deutsche mark would be deflationary for Germany, more reason to set the exchange rate low and give German consumers more buying power.

Nepal

North Korea

  • North Korea Would Talk to U.S. If Conditions Right (Bloomberg)   A senior North Korean official said his country would be willing to talk to the U.S. government if conditions were right, according to South Korean news agency Yonhap.  Choe Sun-hui, director general for North American affairs at North Korea’s foreign ministry, made the comment to reporters in Beijing.  The remarks follow comments by U.S. President Donald Trump that he would be “honored” to meet North Korean leader Kim Jong Un under the right conditions. Trump has also pledged to consider all options to rein in Kim’s nuclear-arms ambitions.

China

This month’s Belt and Road Forum for International Cooperation, a gathering of existing and potential stakeholders in China’s trade development initiative, will welcome national leaders including Russia’s Vladimir Putin, Myanmar’s Aung San Suu Kyi and Indonesia’s Joko Widodo to Beijing.

Meanwhile, US President Donald Trump, already in office for more than 100 days, has yet to appoint an ambassador to Afghanistan, which sits at the centre of a Silk Road initiative the US Department of State began promoting in 2011.

Compared with China’s “Belt and Road Initiative”, Washington’s plan was underfunded and under-resourced after then secretary of state Hillary Clinton formally proposed it in 2011, observers say.

The US initiative also lacked the Pacific-to-Atlantic scope that would have made it more appealing to stakeholders across the world’s biggest land mass and that might have attracted more international support.

Mexico

  • In blow to Trump, GE backs NAFTA and voices support for Mexico (Reuters)  General Electric (GE.N) on Friday praised Mexico as a big part of its future and said the company is "very supportive" of the North American Free Trade Agreement (NAFTA) that U.S President Donald Trump has threatened to ditch.  GE Chief Executive Officer Jeff Immelt said on a visit that Mexico had great potential and was not properly understood. He touted the conglomerate's Mexican operations and the trade deal binding Mexico, Canada and the United States.

Venezuela

  • How Venezuela's Protests are Different this Time Around (Stratfor)  Stratfor contributes to GEI.  Unlike the protests in 2014, which were led by a relatively small faction of opposition parties, these demonstrations have maintained their momentum despite several weeks of violent government crackdowns. The frequency of violent confrontations between protesters and security forces suggest that the demonstrations will not quietly taper off, even though each day the government has managed to disperse the protesters. Venezuela's protests have passed the point of no return, though their final outcome depends on actions by the protesters, the government and, most importantly, the armed forces.

Support for the Venezuelan government has steadily eroded under two years of severe economic crisis. Polls and anecdotal evidence suggest that only a third of the population would support the ruling party in an election. Complicating the government's position is the fact that the ruling United Socialist Party of Venezuela (PSUV) is split.

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

Some economists wrongly fear that this implies the end of central-bank independence and the return of “fiscal dominance.” Central banks’ independence is threatened if fiscal authorities can instruct central banks to finance public deficits and monetize debt, even in circumstances where harmfully high inflation results. But it is not threatened if central banks independently decide to facilitate fiscal expansion through ultra-low interest rates and quantitative easing when inflation is running below target. If we had recognized that reality sooner, and provided more fiscal stimulus, recovery from 2008 could have been more robust and its benefits more widely spread.

  • Wells Fargo’s Fake Accounts Grow to 3.5 Million in Suit (Bloomberg)  Wells Fargo & Co. may have opened as many as 3.5 million fraudulent accounts in the last 15 years, according to consumers who are trying to beef up a settlement with the bank over abusive sales practices.  The bank reached a $110 million deal in late March to resolve a national class-action lawsuit over claims that employees may have opened more than 2 million deposit and credit-card accounts without customers’ permission since 2011. After the bank last month agreed to expand the accord to include dates as early as May 2002, lawyers for consumers on Thursday raised their estimate on the number of fake accounts.

The class-action settlement, if approved, would cover reimbursement of wrongly charged fees, credit-damage relief and cash compensation amounting to $40 to $70 per fake account, if each consumer harmed by the bank submits claims. Plaintiffs’ attorneys have capped their fees at 15 percent of the deal value -- up to $21 million of the $142 million settlement.

The case is Jabbari v. Wells Fargo & Co., 15-cv-02159, U.S. District Court, California Northern District (San Francisco).

restaurant.data.2017

If it aligns with the rich, the policies it favors benefit the rich exponentially more than they do the middle class. Tax cuts went primarily to the rich, by magnitudes, for example. Real estate prices rising faster than wages made some middle class families rich, but benefited the rich magnitudes more than the middle class.

Money translates almost directly to power in capitalist societies and even more directly in capitalist democracies without adequate corruption controls (which is almost all of them). The rich become powerful faster than the middle class and ultimately the policies they favor do not include keeping the middle class healthy: The rich want low wages, “flexible” labour laws, bankruptcy laws that favor their interests but not that of the middle class, plenty of financialized rent streams, and so on.

  • The Crop That Ate America (Bloomberg)  Go to the article for time-lapse animation of the following and several other informative agricultural graphics.

corn.production.and.all.else


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