Early Bird Headlines 30 June 2015
Econintersect: Here are some of the headlines we found to help you start your day. For more headlines see our afternoon feature for GEI members, What We Read Today, which has many more headlines and a number of article discussions to keep you abreast of what we have found interesting.
Global
- If Greece Leaves Eurozone, Here’s What Will Happen to the World Economy (Mark Taylor, TheStreet) Greece will see its economy crushed, according to this professor and former senior economist with both the Bank iof England and the IMF. But the rest of the world will hardly notice:
Greece’s economy is about the size of the city of Milan in Italy, which is smaller than Detroit was back in 2005, and the world has carried on just fine with the Motor City bankrupt.
U.S.
- Texas attorney general says county clerks can refuse gay couples (Reuters) County clerks in Texas who object to gay marriage can refuse to issue marriage licenses to same-sex couples despite last week’s landmark U.S. Supreme Court ruling requiring states to allow same-sex marriage, Texas Attorney General Ken Paxton said on Sunday. Econintersect: No man is above the law unless he is a county clerk in Texas? Actually, the group above the law is larger in Ken Paxton’s mind. He also included justices of the peace and court judges in his statements.
- This isn’t the last word on Obamacare (CNBC) Hat tip to Marvin Clark. Dan Eaton, attorney and ethics professor at San Diego State University writes:
Shortly after the Supreme Court announced its ruling rejecting the latest legal challenge to his signature legislative achievement, President Obama triumphantly declared, “The Affordable Care Act is here to stay.” He is right that the structure of the law is likely to endure – no matter who the next president is. But any prediction that the law will stand without substantial change beyond his presidency is likely to be proven wrong – no matter who the next president is.
- Remarks by the President at Signing of the Defending Public Safety Employees’ Retirement Act and the Trade Preferences Extension Act of 2015 (White House Briefing Room) The president promised transparency for any negotiated trade agreement (“under this authorization, these agreements will be posted on a website for a long period of time for people to scrutinize, and take a look at, and pick apart“). Presumably (it was not stated or even directly inferred) this will be before the agreement is presented to the Senate for an up-or-down vote – 2/3 approval required to confirm any treaty. For more discussion on this see articles by Joseph M. Firestone at GEI Opinion.
- Record valuations drive 2015 M&A boom (Financial Times) Buyers paid record valuations for US takeover targets, as merger and acquisition activity soared to unprecedented levels in the first half of the year, surpassing the debt-fueled run before the 2008 crisis. The rest of the world is not far behind. One senior banker referred to the ancient city of Pompeii, buried by the 79 AD eruption of Mt. Vesuvius:
“This year feels like the last days of Pompeii: everyone is wondering when will the volcano erupt.”
EU
- If Greeks Vote to Leave the Eurozone, Which Country Will Be Next? (Mark Taylor, TheStreet) First, the author (an economics professor and former senior economist with both the Bank of England and the IMF) incorrectly assumes that next Sunday: “Effectively, the Greek nation will be voting on whether or not stay in the eurozone.” That is not clear, but is what the EU would like the Greeks to think – see next article. But, admittedly there is a distinct possibility that Grexit could follow. The professor points out that whether there would be more exits depends on what happens to Greece after an exit. If the Greeks get back on their feet and prosper than the author says Portugal and Spain would likely leave the eurozone, and possibly Italy would follow.
- Eurozone leaders take co-ordinated gamble with response to Athens Peter Spiegel in Brussels (Financial Times) The Greek government is holding a referendum Sunday for a “yes” or “no” vote on the bailout terms (severe austerity) offered by the Troika. But the Eurozone is publicly insisting that Greece’s referendum on Sunday is a choice about the country’s future in the eurozone. Europe’s leaders are taking a high-risk political gamble that their intervention will win over Greek voters rather than alienate them because Greek voters have come to resent the EU’s interference in their domestic politics.
- Robert Mundell, evil genius of the euro (Greg Palast, The Guardian) Hat tip to Ann Pettifor. The euro was designed to create crisis in order to remove government control and regulation from the economy, according to Palast.
The idea that the euro has “failed” is dangerously naive. The euro is doing exactly what its progenitor – and the wealthy 1%-ers who adopted it – predicted and planned for it to do.
That progenitor is former University of Chicago economist Robert Mundell. The architect of “supply-side economics” is now a professor at Columbia University, but I knew him through his connection to my Chicago professor, Milton Friedman, back before Mundell’s research on currencies and exchange rates had produced the blueprint for European monetary union and a common European currency.
……
The euro would really do its work when crises hit, Mundell explained. Removing a government’s control over currency would prevent nasty little elected officials from using Keynesian monetary and fiscal juice to pull a nation out of recession.
“It puts monetary policy out of the reach of politicians,” he said. “[And] without fiscal policy, the only way nations can keep jobs is by the competitive reduction of rules on business.”
He cited labor laws, environmental regulations and, of course, taxes. All would be flushed away by the euro. Democracy would not be allowed to interfere with the marketplace.
Greece
- Greece debt crisis: Defiant Tsipras seeks referendum backing (BBC News) Mr Tsipras said a clear vote against austerity would help Greece negotiate a better settlement to the crisis.Otherwise, he warned, he would not stay in office to oversee more cuts.Greek PM Alexis Tsipras has urged voters to reject creditors’ demands in a snap referendum on Greece’s debt crisis due on Sunday.
China
- Human Rights Record of the United States in 2014 State Council Information Office of the People’s Republic of China (Xinhuanet) Hat tip to Rob Carter. China rips U.S. treatment of indigenous people and minorities at homes and others in foreign lands.
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