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What We Read Today 30 July 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:

  • Kyrie Irving's flat Earth talk causing headaches for science teachers

  • A Koch front group is putting out misleading attack ads on electric vehicles

  • Split-circuit reserve banking – functioning, dysfunctions and future perspectives

  • Applications for Blockchain in Finance 

  • Health Chief Says No Decision on Continuing Obamacare Subsidies

  • Meet the woman set to lead Homeland Security

  • Job and Wage Growth Diverge

  • GOP to begin vigorous sales job on tax reform

  • The geography of desperation in America

  • Lower Unemployment Rate is not Acceleratng Wage Growth in the Eurozone

  • Brexit Can Be Stopped – But The Window Of Opportunity Is Closing Fast

  • Will Ukraine join NATO? A course for disappointment

  • Putin Says Hopes Retaliation Stops After Ousting 755 U.S. Staff

  • China Bets Trump Won't Resort to Strike Against North Korea

  • The West need not fear China’s war games with Russia

  • Venezuela in Chaos

  • And More

Articles about events, conflicts and disease around the world

U.S.

  • Health Chief Says No Decision on Continuing Obamacare Subsidies (Bloomberg)  Health and Human Services Secretary Tom Price said Sunday that “no decision’s been made” on whether to continue key Affordable Care Act subsidies to health-insurance companies, but that the administration’s job is “to follow the law of the land.” A top White House aide said President Donald Trump will decide soon.

Smarting from the failure of Senate Republicans to pass an Obamacare repeal and replace bill, Trump on Saturday threatened in a tweet to end the subsidy payments, which help make insurance accessible to poorer Americans, a move that could critically destabilize health exchanges if it went ahead.

  • Meet the woman set to lead Homeland Security (The Hill)  A Department of Homeland Security (DHS) spokesperson confirmed Friday evening that Elaine Duke, who currently serves as Homeland Security Secretary John Kelly's deputy, would become acting secretary starting Monday when the agency’s current chief steps aside to take on a role at the White House.  President Trump abruptly announced Friday evening on Twitter that the current DHS secretary would be replacing Reince Priebus as chief of staff as part of a major staff shakeup.

  • Job and Wage Growth Diverge (The Daily Shot)

  • GOP to begin vigorous sales job on tax reform (The Hill)  Republicans will be vigorously selling tax reform over the August recess, following the release of shared tax-reform principles and the Senate's failure to pass even a scaled-down ObamaCare repeal bill.  Now that GOP leaders and the White House have announced a consensus on goals for tax reform, they are hoping to get voters excited about forthcoming legislation. And they’ll have business groups and conservative advocacy organizations helping them in the efforts.

  • The geography of desperation in America (Brookings)  America today is as divided as it has ever been, in terms of incomes and opportunities, politics, and, perhaps most importantly, hopes and dreams. Hope matters. As our earlier work shows, individuals who do not believe in their futures are much less likely to invest in them—as in education, health, and job training. This increases the odds of America becoming even more unequal in the future. These divisions are corrosive to our society, our polity, our civic discourse, and to our health.  The most serious problems arise among minorities.  Brookings has developed data about the range of variation of optimism, worry and economic pain across the country and created an interactive graphic map of the data.  Below is the data for optimism:

Click for large image.

EU

UK

Ukraine

  • Will Ukraine join NATO? A course for disappointment (Brookings)  After more than three years of war with Russia, Ukraine's desire to join NATO is entirely understandable. Polls show public support for a membership course. However, Petro Poroshenko is setting himself and Ukraine up for disappointment as long as its armed conflict with Russia continues to simmer.

Russia

  • Putin Says Hopes Retaliation Stops After Ousting 755 U.S. Staff (Bloomberg)  Vladimir Putin said he hoped there wouldn’t be a need for further retaliation against Washington after his government ordered the U.S. to slash staff at its diplomatic missions in Russia by 755, or nearly two thirds, in retaliation for new sanctions approved by Congress.

China

  • China Bets Trump Won't Resort to Strike Against North Korea (Bloomberg)  China is betting that U.S. President Donald Trump won’t make good on his threats of a military strike against North Korea, with Beijing continuing to provide a lifeline to Kim Jong Un’s regime.  Secretary of State Rex Tillerson singled out China and Russia as “economic enablers” of North Korea after Kim on Friday test-fired an intercontinental ballistic missile for the second time in a matter of weeks. While Tillerson said the U.S. wants a peaceful resolution to the tensions, the top American general called his South Korean counterpart after the launch to discuss a potential military response.  China seems to see the collapse of Kim’s regime as a greater threat.

  • The West need not fear China’s war games with Russia (The Economist)  China’s naval build-up worries American officials. Hardly a week goes by without some new development that troubles them. In April the country launched its first domestically built aircraft-carrier, and then in June its first 10,000-tonne destroyer—similar in size to the ones America deploys in the region. This month Chinese ships filled with troops sailed for Djibouti to set up the country’s first overseas military base. China’s naval build-up is giving it the wherewithal to seize and hold disputed territory to which it lays claim in the East and South China Seas, and to threaten Taiwan. In the event of a conflict, America could be drawn in.  But this article suggests that the U.S. should welcome the new build-up and invite China to particiate in joint naval maneuver exercises.

Venezuela

  • Venezuela in Chaos (The Economist)  Venezuela is sliding from economic catastrophe to dictatorship. A rigged election, due to be held on July 30th, would perpetuate the unpopular state-socialist regime led by President Nicolás Maduro. This article argues that sanctions should target the government, not its victims.  (Print edition, subscription required.) 

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

  • Kyrie Irving's flat Earth talk causing headaches for science teachers (CBS Sports)  Hat tip to Roger Erickson.  Everyone had a good laugh back in February when Kyrie Irving came out as a flat-Earth truther during an appearance on Richard Jefferson and Channing Frye's podcast, and his steadfast belief in our planet's lack of curvature has continued to be a source of jokes.  One group isn't laughing, however, and that would be middle school science teachers. It turns out that Irving is quite influential to the teens, and has converted some of them into believing the Earth is in fact flat. Which, of course, is a source of consternation for science teachers no matter what level.  Econintersect:  If this is causing a problem, how can we ever hope that the same students will learn anything about subjects like government which is much more susceptible to influence by propaganda?  For an example of how propaganda gains traction, see the next article.

  • A Koch front group is putting out misleading attack ads on electric vehicles (Think Progress)  Hat tip to Roger Erickson.  Transportation recently overtook the electricity sector as the biggest source of greenhouse gas emissions in the United States.  Now a front group backed by petrochemical billionaires Charles and David Koch has launched a series of videos attacking electric vehicles.

Last month, Fueling U.S. Forward put out a heart-wrenching video about how batteries use cobalt mined by children. This week, they put out another video, claiming that taxpayers are subsidizing rich white men (yes, this is an ad from the Koch brothers) to buy Teslas.

Most people can agree that children should not be mining anything. But it’s a false dichotomy to suggest that because of child labor, we shouldn’t use electric cars. Children aren’t being put to work because of electric vehicles. Children are being put to work because of a global economic system that exploits the poor and the vulnerable. It’s also misleading to say that because children are being exploited for one product, we should necessarily use another product. It’s flat wrong to say, as the ad does, that electric vehicles are “more toxic to humans than average cars.”

  • Split-circuit reserve banking – functioning, dysfunctions and future perspectives (Real World Economic Review)  Hat tip to Roger Erickson.  This paper provides an up to date outline of the workings of the money and banking system – how money is created, how it circulates in the payment system, how it is temporarily de- and re-activated, and how it is finally deleted. This then helps clarify why a number of orthodox money and banking theories are obsolete, in particular the financial intermediation theory of banking in connection with the loanable funds model of deposits, the models of a credit multiplier, the reserve position doctrine, and other rather fictitious elements of present-day monetary policy.

"... a most fundamental feature of the system, which is the split-circuit structure of modern reserve banking. The system consists of two different money circuits. One is the public circulation of bankmoney among nonbanks. Bankmoney is another term for demand deposit or sight deposit or overnight deposit in a current account. The latter is also called a giro account, used in cashless payments. The term nonbank refers to the bankmoney-using public, including nonmonetary financial institutions such as funds or trusts, non-financial firms, private households, and public households as far as the latter run bank accounts. Nonbanks run their accounts with banks. Except for some government bodies, nonbanks are not admitted to central bank accounts."

split.circuit.banking

  • Applications for Blockchain in Finance (Power Trading Radio)  GEI contributors John O'Donnell and Merlin Rothfeld of Online Trading Academy interview Caitlin Long, Chairman and President of Symbiont.  The future of cyrpto currency and blockchain technology in the world of finance is the topic.  One interesting aspect is the revolution that may occur in property ownership identification and streamlining transactions.  Symbiont is focused on the development of technology for security trading and settlement.  The turmoil in the current systems is described - and the data is shocking.

  • Cartoon forwarded by a reader.


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