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What We Read Today 30 June 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:

  • Inflation Down in May But Real Estate Booming (or is it?)

  • Inflation Adjusted Housing Prices

  • The New Normal: Demand, Secular Stagnation and the Vanishing Middle-Class

  • The New Normal is part of a 70-year trend

  • Islamic State under pressure in Iraqi and Syrian strongholds

  • 20 states refusing to provide voter data to Trump election panel

  • Donald Trump’s Washington is paralysed

  • The Mystery of Trump, Morning Joe, and the National Enquirer

  • The Logic of Trump's Sexist Attacks

  • Trump: Repeal ObamaCare now, replace it later

  • Why Washington, DC’s programme for homeless families isn't working

  • Do minimum wage hikes aid workers? The jury is still out.

  • Russia says will respond "with dignity" if USA mounts Syria strike

  • Trump calls for firm response to North Korea, targets Seoul on trade

  • China's Xi sees 'challenges' in Hong Kong as Beijing dismisses any UK role

  • And More


Special Note:  There will be no 'What We Read Today' columns over the U.S. holiday weekend (01, 02, 03, and 04 July).


Articles about events, conflicts and disease around the world

Global

  • Islamic State under pressure in Iraqi and Syrian strongholds (Reuters)  Syria U.S.-backed Iraqi forces pressed Islamic State fighters holding out in Mosul's Old City on Friday, while in Syria the militant group launched a counter-attack against an alliance of militias trying to oust it from its de facto capital of Raqqa.

U.S.

The Presidential Advisory Commission on Election Integrity, formed by President Trump to investigate his widely debunked claim that millions of illegal votes cost him the popular vote in the 2016 presidential election, sent letters this week to the 50 secretaries of state across the country requesting information about voters.

The letter, signed by commission vice chairman and Kansas Secretary of State Kris Kobach (R), asked for names, addresses, birth dates and party affiliations of registered voters in each state. It also sought felony convictions, military statuses, the last four digits of Social Security numbers and voting records dating back to 2006, according to a copy of the letter obtained by The Hill.

  • Donald Trump’s Washington is paralysed (The Economist)  This Op Ed says that Donald Trump's approach is not working. Five months into his first term, Mr Trump presides over a political culture that is even more poisonous than when he took office. His core voters are remarkably loyal. Many businesspeople still believe that he will bring tax cuts and deregulation. But their optimism stands on ever-shakier ground. The Trump presidency has been plagued by poor judgment and missed opportunities. The federal government is already showing the strain. Sooner or later, the harm will spread beyond the beltway and into the economy.

  • The Mystery of Trump, Morning Joe, and the National Enquirer (The Atlantic)  Mika Brzezinski and Joe Scarborough alleged on Friday that White House staff said the tabloid would “publish a negative article about us unless we begged the president to have the story spiked.”  See also The Logic of Trump's Sexist Attacks.

  • Trump: Repeal ObamaCare now, replace it later (The Hill)  President Trump on Friday said Republicans should just repeal ObamaCare and replace it later if they are unable to agree on healthcare legislation.  In doing so, he appeared to offer support for an idea that conservative lawmakers, including Sen. Rand Paul (R-Ky.), have floated in recent days.

obamacare.repeal.tweet

  • Why Washington, DC’s programme for homeless families isn't working (The Economist)  In the past 15 years, as the city’s economy has boomed and its population increased—by around 100,000 to 670,000—gentrification has pushed rents up for everyone in the city. At the higher end of the housing market, income gains have outstripped rental increases, according to the DC Fiscal Policy Unit. But incomes lower down the food-chain have remained flat. Between 2002 and 2013 the number of low-cost apartments—those costing less than $800 a month—fell by 42%. 

What, absent a crash in the rental market, is the answer? More affordable housing is the obvious solution. But without the big investment that this would require, many believe it would be better to provide families in homeless shelters with long-term housing vouchers—cashless benefits that must be spent on rent. Rental vouchers would be more expensive than rapid rehousing: an additional $1,300 per family in rapid rehousing annually over the next five years, estimates Max Tipping of Washington Legal Clinic.

A National Bureau of Economic Research working paper from researchers at the University of Washington finds that the recent minimum wage increases from $9.47 to $11 in 2015 to $13 in 2016 resulted in a 9-percent decline in hours worked in low-wage jobs, while hourly wages rose by 3 percent. On net, low-wage workers lost an average of $125 per month in 2016.

In contrast, the study from IRLE Berkeley finds that average wages rose marginally for certain types of restaurants following the minimum wage hike and had insignificant dis-employment effects. How can two studies focused on the same city, tracking the same minimum wage change in law and using the same “synthetic control” methodology arrive at vastly differing results?

Some of the differences are the result of the industries covered. The NBER working paper includes in their analysis all low-wage workers across different industries that earn below a certain hourly wage, such as $13 or $19. The authors worry that if the analysis only focused on workers who are either at or below the minimum wage, it would overstate the dis-employment effects if employers moved some workers to wages above the threshold minimum wage.

Russia

  • Russia says will respond "with dignity" if USA mounts Syria strike (Reuters)  Russia will respond with dignity and proportionately if the United States takes pre-emptive measures against Syrian government forces to stop what Washington says could be a planned chemical attack, Russian Foreign Minister Sergei Lavrov said on Wednesday.

South Korea

  • Trump calls for firm response to North Korea, targets Seoul on trade (Reuters)  U.S. President Donald Trump called for a determined response to North Korea after talks with South Korean President Moon Jae-in on Friday at which he emphasized the importance of their alliance but took aim on trade and sharing the cost of defense.  Trump said the United States was renegotiating what he characterized as a "rough" trade deal with South Korea agreed to five years ago by his predecessor, Barack Obama, and reiterated that an era of "strategic patience" over North Korea's nuclear and ballistic missile programs had ended.

China

Xi's visit comes amid heightened tension between China and the former British colony, where many are concerned at increasing interference by Beijing in the city's affairs, despite the promise of wide-ranging autonomy under the "two systems" agreement.

The battle for full democracy, vividly illustrated by 79 days of "Occupy" street protests in 2014, has been a defining issue for the city of 7.3 million. It has sown distrust, polarized politics and hampered governance.

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

  • Inflation Down in May But Real Estate Booming (or is it?) (InflationData.com)  Annual inflation for the 12 months ending in May 2017 was 1.87%. Inflation has steadily moved lower month by month from its peak of  2.74% in February. First falling to 2.38% in March, then down to 2.20% in April, and finally 1.87% in May. Although Inflation has fallen it is still slightly  above its 12 month moving average (Red Line) indicating that the short-term trend is still up, although the gap is closing, a cross below the moving average would indicate that the short term trend has switched to "down". Since 2008, there has been a battle between inflation and deflation with the FED fighting against deflation. In March, the FED has switched sides and is raising interest rates.  See also next article.

  • Inflation Adjusted Housing Prices (InflationData.com)  Inflation Adjusted Real Estate Prices-  Lets take a look at the idea that housing prices always go up. Of course, each neighborhood is different, so some neighborhoods might be going down while a few miles away housing prices are skyrocketing but by looking at the nationwide average and by adjusting those prices for inflation we can get a better picture of how real estate prices really act.  

For many years people believed that “housing prices always go up” and that “you can’t go wrong buying a house” and that “houses are good investments”. These core beliefs were shaken from 2008-2012 and many people became disillusioned and decided that houses weren’t worth the hassle.  But, on average, those who bought 2009-2014 are money ahead.  And many of those who bought 2003-2008 are still losing money.

Click for large image.

sec.stag.1950.2016

sec.stag.labor.1950.2016


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