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What We Read Today 02 August 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:

  • Mysterious Map Emerges at the Dawn of the Egyptian Civilization and Depicts Antarctica Without Ice – Who Made it?

  • Economics With a Humanities Face

  • What tally sticks tell us about how money works

  • Why Tax Cuts for the Rich Solve Nothing

  • Is Tesla Building A Moat With HD Maps?

  • Trump rips Congress, brags about deal-making prowess in Russian sanctions statement

  • Senate GOP eyes end to August session

  • Trump Drops To New Low, Close To 2-1 Disapproval, Quinnipiac University National Poll Finds; 71 Percent Say President Is Not Levelheaded

  • Residential Investment Growth

  • Mammoth Mountain Announces Closing Date for 16/17 Season

  • Pentagon and State Department Said to Propose Arming Ukraine

  • How China is viewed by Pakistan & the world 

  • Caixin Markit Manufacturing PMI Ticks Up

  • How China beats US economy by a trillion dollar every year

  • Two Different Valuations For China's Currency

  • Ancient African Coins Found in Australia Pose Interesting Questions About the Nation’s History

  • And More

Articles about events, conflicts and disease around the world

U.S.

  • Trump rips Congress, brags about deal-making prowess in Russian sanctions statement (The Hill) President Trump is ripping Congress in an unusual statement criticizing the Russian sanctions bill, which he signed into law on Wednesday.  Trump said in two separate statements that while he favored the policy objectives in the legislation overwhelmingly approved by Congress, he believes the new law encroaches on his power.  Trump also repeatedly writes that he is a better negotiator than Congress, which he notes has been unable to approve ObamaCare repeal.  Trump said in one of the statements:

"I built a truly great company worth many billions of dollars.  That is a big part of the reason I was elected. As President, I can make far better deals with foreign countries than Congress."

  • Senate GOP eyes end to August session (The Hill)  GOP senators are eyeing an early end to their extended session as leadership works to lock down deals on the few remaining agenda items.   The Senate is currently scheduled to be in Washington through the end of next week, after Majority Leader Mitch McConnell (R-Ky.) announced they would delay the summer break to try catch up on a backlog of nominations and legislation.  Senators signaled on Wednesday they thought the Senate could wrap up its work on Thursday, allowing lawmakers to leave town a week earlier than currently scheduled.

  • Trump Drops To New Low, Close To 2-1 Disapproval, Quinnipiac University National Poll Finds; 71 Percent Say President Is Not Levelheaded (Quinnipiac Poll)  President Donald Trump plunges to a new low as American voters disapprove 61 - 33%of the job he is doing, according to a Quinnipiac University national poll released today. White men are divided 47 - 48% and Republicans approve 76 - 1%. White voters with no college degree, a key part of the president's base, disapprove 50 - 43%.  

Today's approval rating is down from a 55 - 40% disapproval in a June 29 survey by the independent Quinnipiac (KWIN-uh-pe-ack) University. This is President Trump's lowest approval and highest disapproval number since he was inaugurated. 

  • Residential Investment Growth (The Daily Shot)  In the last three quarters single-family home construction has seen little growth, although last quarter (Q 2017) has shown a little life.

Following a record snow year, many ski resorts have indulged in an endless winter of slushy pow, high stoke, and a strong après game deep into the dog days of summer.  But all good things must come to an end. Mammoth Mountain has officially announced an August 6 closing date for the 2016/17 season. For the next 4 days, skiers can relish the resort’s 3-for-1 deal: ski, bike, and golf for just $99.

Mammoth’s snowfall, totaling 618 inches at its main lodge, hails second to their snowiest winter season. In 2010/11, the resort received 668 inches. Similarly, this season is the second-longest recorded winter in Mammoth’s history, with a 270-day season, from November 10, 2016 to August 6, 2017. In 1994/95, the California resort opened October 8, 1994 and closed August 14, 1995, the longest recorded winter in their history.  Picture below: Recent skiing on one of Mammoth's high snowfields.

Ukraine

  • Pentagon and State Department Said to Propose Arming Ukraine (The New York Times)  Hat tip to Roger Erickson.  The Pentagon and State Department have proposed to the White House a plan to supply Ukraine with anti-tank missiles and other arms, according to Defense Department officials.  The proposed transfer — which also would include antiaircraft arms that would be defined as defensive weaponry — comes as fighting between Ukrainian troops and Russian-backed separatists has increased in recent days, and the United States is taking steps to deter aggressive military actions by Moscow.

China

  • How China is viewed by Pakistan & the world (walizahid.com)  In its new Rating World Leaders Report, released in May, Gallup highlights that most countries in Africa, and Pakistan and Tajikistan in Asia approve of China as the world leader.  China’s highest, 86% approval rating in the world in Gallup survey, came from Pakistan.

  • Caixin Markit Manufacturing PMI Ticks Up (The Daily Shot)  The Markit PMI report shows solid manufacturing sector growth in China.  This survey covers smaller and privately ownwed companies in China

  • How China beats US economy by a trillion dollar every year (walizahid.com)  Hat tip to Roger Erickson.  Since 2014 when China first overtook the US economy by GDP purchasing power parity (PPP), China has been leaving the US economy behind by nearly a trillion dollar every year.  With $23.2 trillion in size by PPP in 2017, China is now $3.8 trillion ahead of the US, currently at $19.4 trillion, according to World Data Atlas which monitors the global economies through a variety of indicators.  (Econintersect:  The problem with PPP is there is a great deal of subjectivity in how currency pruchasing power is calculated.  See Two Different Valuations For China's Currency.)

The US had been the world’s largest economy for over 140 years. In 1872, the US had deprived Britain, then the world’s largest economy, of this title. In 2014, China did the same for the US.

In terms of GDP Nominal, the US is still the largest economy in the world, with 2017 GDP at $19.4 trillion, compared with China’s $11.8 trillion.

Australia

  • Ancient African Coins Found in Australia Pose Interesting Questions About the Nation’s History (Ancient Origins)  Seventy years ago, when Australia was preparing for a potential Japanese invasion during WW2, a soldier patrolling the strategically important Wessel Islands off the north coast of Australia stumbled upon a handful of old coins (some pictured below).  Eventually they were studied.  Australian archaeologist Ian McIntosh, a professor of anthropology at Indiana University in the United States, was stunned when he first saw the coins, as he immediately recognized their historical importance – the coins were minted by a lost Islamic civilization , commissioned by a sultanate of Kilwa near Tanzania, and are dated back as early as 900 AD. Could it have been Arabs, rather than Europeans, who first set foot on Australia (aside from the aboriginals, that is)?

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

  • Mysterious Map Emerges at the Dawn of the Egyptian Civilization and Depicts Antarctica Without Ice – Who Made it?  (Ancient Origins)  Did Columbus have in his possession a map that showed the complete coast of South America and part of Antarctica?  He never ventured south of the mouth of the Oronoco River so where did this other charting come from?  These are the questions explored in this article.  Below is a representation of how the complete map might have looked.  The portions in black were shown on a map drawn in 1513 by Piri Reis using older map sources which are not available today, including maps captured by Turks from one of Columbus' ships. 

  • Economics With a Humanities Face (Project Syndicate)  Hat tip to Roger Erickson.  In a 2006 survey, American university professors were asked whether it was better to possess knowledge from numerous fields of study, or from just one. Among professors of psychology, 79% were enthusiastic about interdisciplinary learning, as were 73% of sociologists and 68% of historians. The least enthusiastic? Economists: only 42% surveyed said they agreed with the need to understand the world through a cross-disciplinary lens. As one observer put it bluntly: “Economists literally think they have nothing to learn from anyone else.”

In fact, economists would benefit greatly if they broadened their focus. Dealing as it does with human beings, economics has much to learn from the humanities. Not only could its models be more realistic and its predictions more accurate, but economic policies could be more effective and more just.  

Whether one considers how to foster economic growth in diverse cultures, the moral questions raised when universities pursue self-interest at the expense of their students, or deeply personal issues concerning health care, marriage, and families, economic insights are necessary but insufficient. If those insights are all we consider, policies flounder and people suffer.

In their passion for mathematically-based explanations, economists have a hard time in at least three areas: accounting for culture, using narrative explanation, and addressing ethical issues that cannot be reduced to economic categories alone.

  • What tally sticks tell us about how money works (BBC News)  Hat tip to Roger Erickson.  in 1834, the British government decided to destroy 600 years of precious monetary artefacts. It was a decision that was to have unfortunate consequences in more ways than one.  The artefacts in question were humble sticks of willow, about eight inches (20cm) long, called Exchequer tallies. The willow was harvested along the banks of the Thames, not far from the Palace of Westminster in central London.

Tallies were a way of recording debts with a system that was sublimely simple and effective.

The stick would contain a record of the debt, for example: "£9 4s 4d from Fulk Basset for the farm of Wycombe". Fulk Basset was a Bishop of London in the 13th Century. He owed his debt to King Henry III.

The stick would be split in half, down its length from one end to the other. The debtor would retain half, called the "foil". The creditor would retain the other half, called the "stock" - even today, British bankers use the word "stocks" to refer to debts of the British government.

Because willow has a natural and distinctive grain, the two halves would match only each other.

  • Why Tax Cuts for the Rich Solve Nothing (Joseph Stiglitz, Project Syndicate)  JS has contributrd to GEI.  Although America’s right-wing plutocrats may disagree about how to rank the country’s major problems – for example, inequality, slow growth, low productivity, opioid addiction, poor schools, and deteriorating infrastructure – the solution is always the same: lower taxes and deregulation, to “incentivize” investors and “free up” the economy. President Donald Trump is counting on this package to make America great again.  Prof. Stiglitz says:

It won’t, because it never has. When President Ronald Reagan tried it in the 1980s, he claimed that tax revenues would rise. Instead, growth slowed, tax revenues fell, and workers suffered. The big winners in relative terms were corporations and the rich, who benefited from dramatically reduced tax rates.

The sordidness of all of this will be sugarcoated with the hoary claim that lower tax rates will spur growth. There is simply no theoretical or empirical basis for this, especially in countries like the US, where most investment (at the margin) is financed by debt and interest is tax deductible. The marginal return and marginal cost are reduced proportionately, leaving investment largely unchanged. In fact, a closer look, taking into account accelerated depreciation and the effects on risk sharing, shows that lowering the tax rate likely reduces investment.

Of course, the Treasury could simply have kept a record of these transactions in a ledger somewhere. But the tally stick system enabled something radical to occur.

If you had a tally stock showing that Bishop Basset owed you £5, then unless you worried that he wasn't good for the money, the tally stock itself was worth close to £5 in its own right.

If you wanted to buy something, you might well find that the seller would be pleased to accept the tally stock as a safe and convenient form of payment.

So the tally sticks themselves became a kind of money, a particular sort of debt that could be traded freely, circulating from person to person until it utterly separated from Bishop Basset and a farm in Wycombe.

This move highlights just how far ahead the technology in Tesla’s production cars is compared to its competitors, none of which even provide over-the-air software updates. This technology is much more than a bunch of cool bells and whistles for Tesla drivers. It enables an advanced research and development program that far exceeds what any other car company is currently capable of.


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