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What We Read Today 24 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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Special notice:  Due to staff travel there will be no 'What We Read Today' coulmns from Friday 25 August through Monday 28 August.


Topics today include:

  • WTF is Ethereum?

  • How Economics Can Free Itself from Religious Dogmatism

  • Why are Stock Returns Lower under Republicans?

  • The Amazing Arab Scholar Who Beat Adam Smith by Half a Millennium

  • Three Critical Steps to Making America Great Again Are Not on Trump’s Agenda

  • China's 'Belt and Road' initiative could be the next risk to the global financial system

  • Ryan warns Trump not to shut down government over border security funding

  • Judge Approves Warrant For "Antifa" User Data From Anti-Trump Website

  • DDHQ 2018 House Midterm Forecast

  • The many unearthed interactions between Trump-world and Russia, documented

  • U.S. Export Decline

  • EU at risk of disintegration ‘unless it changes priorities’

  • Can large primary surpluses solve Europe’s debt problem?

  • U.S. Treasuries are Very Attractive to Europeans

  • Is Britain the new Norway? Stance on ECJ suggests London seeks a softer Brexit

  • Here’s a better vision for the US-Mexicoborder: Make the Rio Grande grand again

  • And More

Articles about events, conflicts and disease around the world

Global

  • China's "Belt and Road" initiative aims to create physical and digital connections between more than 60 countries

  • China wants to export its overcapacity

  • But some are worried that the project could create a problem for China's banking sector — which would be a problem for the world

Concerns over whether One Belt, One Road will be a success in the long run from CNBC.

U.S.

  • Ryan warns Trump not to shut down government over border security funding (CNN)  Speaker Paul Ryan Wednesday rejected a threat by President Donald Trump to shut down the government to force Congress to approve funding for a border wall with Mexico.  Ryan argued the House had already passed funding for border security but that the narrowly divided Senate -- where Democrats have considerably more sway over what gets into funding bills -- would need more time to act.  The leader of the Republican-controlled House said at a news conference in Oregon where he was promoting tax reform:

"I don't think a government shutdown is necessary and I don't think most people want to see a government shutdown, ourselves included." 

  • Judge Approves Warrant For "Antifa" User Data From Anti-Trump Website (Zero Hedge)  A District of Columbia Federal Judge has approved a government warrant seeking information about users and subscribers to an anti-Trump website which has been linked to rioting during the presidential inauguration in Washington, D.C., but he added protections to safeguard "innocent users."

Chief Judge Robert Morin ruled that DreamHost, an LA-based web-hosting company, must turn over data about visitors to the website disruptj20.org, which is a home to political activists who organized protests at the time of Donald Trump's inauguration as U.S. president in January, many of whom have since morphed into the controversial "antifa" movement.

  • DDHQ 2018 House Midterm Forecast (Decision Desk HQ)  The 2018 House Midterm Election is bound to be one of the more interesting in recent memory. With Donald Trump in the White House, infighting on both sides of Congress, and an American public that is bursting at the seams we have a recipe for a perfect political storm.  This article indicates that in House races,Dems will get 54% of the votes, but only 47% of the seats.

Click for large image.

  • The many unearthed interactions between Trump-world and Russia, documented (CNN)  The White House acknowledged this week that President Donald Trump met Russian President Vladimir Putin during the G20 dinner for an hour -- a meeting that went undisclosed for weeks until it came out in press reports. This non-disclosure follows a pattern when it comes to some meetings between Trump associates and Russians. The interactions span back to the in-person meeting at Trump Tower in the summer of 2016 between senior Trump campaign officials and a group of well-connected Russians.  This article reviews the details of 11 meetings that took plave before Trump was inaugurated, none of which was dislcosed by the participants but came to light from other sources.

  • U.S. Export Decline (Brookings)  In 2016, exports did not drive significant economic growth in most parts of the country. The export slowdown was linked to declines in manufacturing exports, particularly in the industrial Midwest.  The recent decline marks a departure from the national post-recession trend. Between 2009 and 2014, exports accounted for 26 percent of the growth in U.S. gross domestic product (GDP). But U.S. exports declined in 2015 and again in 2016, hampered by a strong dollar and sagging global demand. Exports recovered slightly in the first quarter of 2017, but not enough to counteract losses in the previous two years.

The combination of export decline and broader economic growth meant that, for the first time since 2009, average export intensity—the share of regional GDP generated by exports—dipped below 10 percent in large metro areas.

Click for large image.

us.exports.goods.services.2003.2016

Click for large image.

EU

For the debts of European countries to be sustainable, their governments will have to run large primary budget surpluses. But there are both political and economic reasons to question whether this is possible. The evidence presented in this column is not optimistic about Europe’s crisis countries. Whereas large primary surpluses for extended periods of time did occur in the past, they were always associated with exceptional circumstances.

Click for larger image.
eu.rates.us.treasuries

UK

  • Is Britain the new Norway? Stance on ECJ suggests London seeks a softer Brexit (The Conversation)  The British government has outlined its vision for what role the European Court of Justice will play after Brexit. As speculated, its position papers outlining this vision state that it wants to end the ECJ’s “direct jurisdiction” in the UK.  But what’s really interesting is that the UK expresses the intention of being part of the Lugano Convention – the rules on jurisdictional matters that apply to EEA states. This is a strong indication that the UK is eyeing a Norway-style Brexit.

Mexico

The United States and Mexico have shared their current international border for nearly 170 years. Today they cooperate at multiple levels on issues that affect the border region, although you would not know it from the divisive rhetoric that we hear in both countries. President Trump’s focus on building a border wall threatens to undermine many binational initiatives, as well as our shared natural environment.

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

  • WTF is Ethereum? (HackerNoon)  Although ‘Bitcoin’ and ‘Ethereum’ are terms that are often paired together, the reality is that they are vastly different. The only thing Ethereum shares with Bitcoin is that it’s a cryptoasset running on top of blockchain.  Instead of being just a cryptocurrency, like Bitcoin, Ethereum also has features which effectively makes it a huge decentralized computer.

A blockchain can be used to store any kind of data, and the kind of data a blockchain stores, gives it its value. Bitcoin’s blockchain stores the records of financial transactions, therefore, making it analogous to a currency like dollars or pounds. Bitcoins serve no additional purpose than what dollars serve. Ethereum is different.

Ethereum isn’t just a cryptocurrency to be traded; its real value lies in its purpose. Ethereum’s purpose is to allow the owner to use the distributed world computer that several thousand nodes are powering.

Of course, because every tiny statement has to be executed by every node in the network, the decentralized, distributed computer becomes slow and expensive. But slow compared to what? The faster but centrally controlled servers.

To enjoy the lower costs of using a centralized computer, we give them the power to control us. If the central computer (server) goes down or gets hacked, it takes down with it all the clients attached to it. A decentralized computer will only go down if every single node goes down, making it a computer that will always be available. Wherever there’s internet, there’s Ethereum.

  • How Economics Can Free Itself from Religious Dogmatism (Economics)  Much of human behavior belies the principles of neoliberal economics, the authoir argues.  Many humans are "reasonably altruistic and selfless" rather than living by a "sort of rational “utility-maximizing” calculus that orthodox economic models take as a given", he says.  He refers to Nobel laureates George Akerlof and Robert Shiller write in their recent book, Phishing for Phools:

Akerlof and Shiller contend that the idea that free markets work perfectly, and the idea that big government is the cause of so many of our problems, are part of a story that is actually misleading people into adjusting their behaviour in order to fit the plot. They thus believe storytelling is a “new variable” for economics, since “the mental frames that underlie people’s decisions” are shaped by the stories they tell themselves.  

  • Why are Stock Returns Lower under Republicans? (Chicago Booth Review)  Though Republican presidential candidates often campaign on pro-business policies, historically the stock market has performed significantly worse when there’s been a Republican in the White House. Chicago Booth’s Lubos Pastor and Pietro Veronesi find that the reason has to do with timing, economic cycles, and voters’ tolerance for risk.

  • The Amazing Arab Scholar Who Beat Adam Smith by Half a Millennium (Economics)  Ibn Khaldun wrote of principles associated with Adam Smith, such as division of labor, value adding processes, and theory of money, more than 400 years before Smith wrote "Wealth of Nations".  He even created what is known today as the "Laffer curve" describing taxation rates and tax revenues.

  • Three Critical Steps to Making America Great Again Are Not on Trump’s Agenda (Pam and Russ Martens, Wall Street on Parade) PM and RM have contributed to GEI.  The Martens write that the structure of corporate and financial America has moved away from an economy driven by competition to one that is controlled by a few large banks and a small number of mega-corporations.  They call for (our words) a new age of trust busting.  The 21st century has become characterized by extraction rather than construction (again, our words).  They offer 20 years of IPO data to illustrate (graph below).  They also mention the sharp decline in the number of publicly listed companies over the 20 years:  7,300 reduced to 3,700.  Their concluding paragraph:

Darkness, fraud and a rigged wealth transfer system currently constitute the business model of Wall Street. Until critical structural reforms are made to Wall Street, all that the Trump followers have is a meaningless slogan on a red hat growing tattered and dusty with age.


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