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What We Read Today 29 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:

  • Public Banks and Credit Unions

  • A Recipe for Stagnant Wages

  • Canadian Doctor Testifies Before U.S. Congress

  • Global Ocean Circulation Appears To Be Collapsing Due To A Warming Planet

  • Harvey Recharges Offshore as Crippled Houston Counts the Cost

  •  August 28, 2017 Weather and Climate Report - Warmer Means Wetter

  • Harvey Continual Update and Damage Assessment.

  • Harvey:  The Next Two Days

  • Will the "Comeuppance Caucus" get help for Harvey?

  • Why is Tropical Storm Harvey so extreme?

  • Special counsel subpoenas Manafort's former attorney and spokesman

  • Gorka: Trump ‘isolated,’ GOP leaders living ‘fantasy illusion’

  • Amazon Cuts Whole Foods Prices as Much as 43% on First Day

  • Full U.S. Tanks May Ease Risk of Fuel Shortages From Harvey

  • Sky stops broadcasting Fox News in UK

  • North Korea missiles: Trump warns 'all options' on table

  • No response from Trump on Mexico's Harvey relief offer

  • And More

Articles about events, conflicts and disease around the world

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  • Special counsel subpoenas Manafort's former attorney and spokesman (CNN)  Special Counsel Robert Mueller has issued subpoenas to a former lawyer for Paul Manafort and to Manafort's current spokesman, an aggressive tactic that suggests an effort to add pressure on the former Trump campaign chairman.  The subpoenas seeking documents and testimony were sent to Melissa Laurenza, an attorney with the Akin Gump law firm who until recently represented Manafort, and to Jason Maloni, who is Manafort's spokesman, according to people familiar with the matter.  Manafort is under investigation for possible tax and financial crimes, according to US officials briefed on the investigation. The allegations under investigation largely center on Manafort's work for the former ruling party in Ukraine, which was ousted amid street protests over its pro-Russian policies.

  • Gorka: Trump ‘isolated,’ GOP leaders living ‘fantasy illusion’ (The Hill)  Former Trump adviser Sebastian Gorka believes Speaker of the House Paul Ryan and Senate Majority Leader Mitch McConnell’s “credibility is lost and unrecoverable,” and that major changes at the White House over the summer have left the president feeling “isolated” in a wide-ranging interview with The Hill.   Gorka said Ryan (R-Wis.) and McConnell (R-Ky.) are living in a “fantasy illusion” and have failed on promises made to the American people, most notably on repealing and replacing ObamaCare. 

  • Internet giant bought upscale grocery chain for $13.7 billion

  • Some prices unchanged but favorites like avocados are cheaper

  • Full U.S. Tanks May Ease Risk of Fuel Shortages From Harvey (Bloomberg)  As devastating as the flooding has been for oil refiners in the U.S. Gulf Coast, surplus fuel inventories may help the industry withstand the worst storm to hit the country in more than a decade.  The floods in Texas forced shutdowns across a regional energy hub that supplies fuel to millions of Americans from Oklahoma to Florida to New York. As much as 30% of U.S. fuel production may come off line temporarily, according to energy investment consultant Tudor, Pickering, Holt & Co.

UK

  • Sky stops broadcasting Fox News in UK (BBC News)  Sky is to stop broadcasting Fox News in the UK after low audience figures, the media firm has said.  21st Century Fox, which is owned by Rupert Murdoch, said the channel was being withdrawn as it was not commercially viable.  The decision was not related to Fox's takeover bid for Sky, a source told the BBC.

North Korea

  • North Korea missiles: Trump warns 'all options' on table (BBC News)  US President Donald Trump has said North Korea's latest missile launch signals "contempt" for its neighbours and the UN.  He said the North would only increase its isolation and that "all options" were on the table.  The missile flew over northern Japan's Hokkaido island before crashing into the northern Pacific Ocean.

Pyongyang says it is being provoked by US-South Korea military exercises which it says are a rehearsal for invasion.

Russia and China have also cited the drills as the source of the latest tensions.

Mexico

  • No response from Trump on Mexico's Harvey relief offer (The Hill)  The Trump administration has yet to say whether it will accept a pending offer of disaster relief aid from Mexico following Tropical Storm Harvey.  Mexico offered assistance Sunday, in a press release that also responded to President Trump's tweets over the weekend.

In the tweets, Trump said Mexico would pay for a border wall. He also criticized Mexico's crime rate in the tweets and said he was considering terminating the North American Free Trade Agreement.

In its response, Mexico countered Trump's points, adding its offer of humanitarian assistance.

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

  • Public Banks and Credit Unions (Marc Armstrong, PDF)  Marc Armstrong is the president of Commonomics USA and co-founded the Public Banking Institute.  The complete essay:

Anything that takes control from Wall Street banks is viewed by many as a positive development. Public banks, credit unions, and, to some extent, the new fintech firms all do this: they change the competitive landscape and provide a variety of services that appear to compete with traditional banks. Two of these players, public banks (of which the Bank of North Dakota is presently the only one in the United States) and credit unions, are considered by some to be in the same space, but they are actually quite different. This post will map out some of the key similarities and differences.

Public banks are government owned entities that act in a not-for-profit capacity to finance public goods, with their earnings passed back to the people in the form of lower interest rates on loans or government dividends. Public banks have many measures of democratic control, such as a more participatory form of governance. But since low interest rates on loans and local control are also the hallmarks of credit unions, what are the differences between public banks and credit unions?

The main difference is distinct and important: Thanks to the banking lobby, federal law prohibits credit unions from making commercial loans that exceed 12.25% of their total assets. This is a significant limitation that keeps credit unions out of the core business of banks: issuing credit. Of course credit unions can make consumer loans and mortgages, but this focus on member loans, savings, and other consumer-oriented services places them in the same market as most retail banks.

Public banks, on the other hand, are in decidedly different markets: commercial lending and public finance. They can ignore the retail sector entirely and have laser-like focus on generating credit to fund commercial and infrastructure loans. Because there is no need to provide costly retail banking services, an already crowded market in many areas of the country, public banks can be the engine for a state or city’s economic development program by providing affordable loans. Anyone who supports a good idea like renewable energy, worker-owned cooperatives, or effective public transit systems knows that very often the roadblock for each is always the same -- lack of money. Without taxpayer funding many of these ideas die or the implementation gets postponed. But with low cost credit, available through a public bank, many of these good ideas can get funded. A credit union does not have the lending capacity of a public bank to fund these kind of loans, many of which run into the hundreds of millions of dollars.

There are other differences. Public banks are owned by governments and credit unions are owned by their members, who are the depositors, and with whom credit unions work collaboratively to share resources for convenience and savings. CU Service Centers and the CO-op ATM Network are two examples of this cooperation, something that a public bank as we normally conceive it would not consider (although new forms of public banking are always possible).

Both government-owned public banks and cooperatively-owned credit unions are ways to create a more democratic approach to banking. While their differences are significant, they both move in the same general direction, returning banking to our communities and sharing in the many benefits that come from localized control of banking. 

  • A Recipe for Stagnant Wages (Peter Morici, The Washington Times)  Prof. Morici blames high U.S. wages for lack of investment in the U.S. which creates an environment where wages cannot grow.  The argument sounds circular (in a way it is) but also has merit.  Where Econintersect would argue is the proposition that U.S. labor would become more competitive if costs were reduced for safety nets like  Medicaid.  Where we support Prof. Morici's argument is the area of better training for the U.S. labor force.  Millions of jobs appear to be going unfilled because there are no qualified applicants.  Back to our disagreement on safety nets - the tacit assumption in the professor's logic is that the private sector and the government compete for the same dollars and therefore Medicaid costs must be subtracted from potential return on private investments.  That is absurd on two levels: (1) The federal government creates money needed for Medicaid when it exceeds money from tax revenues - it doesn't take additional money from the private sector. (2) Total Medicaid expenditures (state and federal) in 2016 were 553 billion ($553,453,647,756).  Total U.S. military expenditures in 2015 were $598 billion.  If $553 billion inhibits investment, why isn't $598 billion an even bigger problem in that regard? 

  • Canadian Doctor Testifies Before U.S. Congress (U.S. Senator Bernie SandersFacebook)


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