Articles posted on Monday, 26 May 2014
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The Piketty Moment, the Democrats, and the Upcoming Elections
Tax Talk: Pre-distribution or Redistribution?
by L. Randall Wray, New Economic Perspectives, with significant contribution from Lambert Strether
I've been blogging a series on the role of taxes. In the first piece, I argued that 'taxes drive money', in response to a silly claim that MMT argues we do not need taxes. In the second instalment I examined other uses for taxes - including to reduce excessive aggregate demand and to discourage 'sin'. Most importantly, I argued that we do not need taxes to 'pay for' sovereign government spending. In the third piece, I argued against the 'Robin Hood' view that we need taxes to 'take from the rich to give to the poor'. That should be obvious - we can spend on the poor without any tax increase, and indeed could spend on the poor while reducing everyone's taxes.
Predictably, that third instalment riled the liberals. There's nothing they like more than using the need to spend on the poor to justify raising taxes on the rich.
 Agricultural Weather and Climate Forecast and More
Econintersect Weather and Climate Forecast Update 26 May 2014
Written by Sig Silber
Let's talk about agriculture.
Certainly an important question is how will El Nino impact food production in the U.S. and elsewhere. It is not a simple question with an easy answer.
Flying robots inspired by nature Market Commentary: Markets Closed For Memorial Day -- May 26, 2014
Written by Gary
Market Commentary For 05-26-2014
Markets are closed today in observance of Memorial Day in the UK and US.
Please enjoy your day off, shake the hand of at least one veteran or solder for serving and take at least one moment to remember the fallen heroes who have paid the ultimate price.
Below are some titles I read this morning that might be of interest.
A Word from This Newsletter's Sponsor
Americas most important day of 2014?
On Tuesday July 1st, 2014, a new law (part of HR Bill #2847) goes into effect in America.
On the surface, it looks like just another tax law - but it actually has huge implications far beyond the tax code. This law actually changes our entire financial system... overnight.
Even the normally liberal Atlantic Monthly magazine said it "seems to be turning into a nightmare and disaster."
Yet 99% of Americans have no idea what is about to happen. Make sure you get the facts and protect yourself. Details here...
What We Read Today 26 May 2014 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 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.
EURUSD: Edging Toward a Trend Reversal
Weekly Outlook 25 May 2014: Drivers, Ramifications, How to Profit
by Cliff Wachtel, FX Empire
FX Traders' weekly EURUSD fundamental and technical picture, this week's market drivers that could change it, plus the bullish, the bearish and likely EURUSD direction. New drama feeding old drivers.
The following is a partial summary of the conclusions from the fxempire.com weekly analysts' meeting in which we cover outlooks for the major pairs for the coming week and beyond.
 2014: Year of the Great Wage Debate
Written by William R. Rusk, GEI Associate
I'm sorry but you will never be able to support your family working at McDonald's... even with a substantial minimum wage increase.
Beginning late last year, fast-food employees organized by local social rights operations and the SEIU began coordinated strikes across the country demanding that the minimum wage be increased to $15/hour. The protests were based largely on employee frustration, not being able to support a family or live by themselves, they directed their rage at their employers.
 Uneven Recovery, Monetary Policy and Inequality in the U.S.
Written by Yajing Tu, GEI Associate
Since 2009, the U.S. economy has experienced a steady yet uneven recovery. Although the overall household net wealth in America saw a 14% increase from 2009 to 2011, the mean net worth gap has enlarged between the top 7% and the lower 93% of the households. According to the 2009-2011 data from the Census Bureau, the mean net wealth of the upper 7% affluent households in the U.S. jumped by approximately 28%, while the 111 million households' mean net wealth distributed in lower 93% was reduced about 4%. At the end of 2011, the mean net wealth of the most affluent household group (top 7%) was 24 times more than that lower 93% (see graphic below).
 Forty-Nine Million Tons of E-Waste Were Generated in 2012
by Felix Richter, Statista.com
According to StEP, an initiative that advocates reduction and proper treatment of electronic waste, a record amount of 48.9 million metric tons of e-waste was generated worldwide in 2012.
 Elections: Anti-Establishment Revolution in Europe
Econintersect: Parties opposed to the EU, to the euro, to austerity and to immigration made big gains in the once-every-five-years election for members of the European Parliament (EP). Socialist parties lost strength and right wing and even Nazi parties gained. The 751-seat EP will still be controlled by pro-Europe Christian Democrats and Social Democrats, but the increased strength of minority parties, some never before represented in the EP, will make the chamber far more contentious than in the past and produce impediments to the creation of a politically unified super state analogous to the U.S.
 What Is the Impact of a Low Interest Rate Environment on Bank Profitability?
from the Federal Reserve Bank of Chicago
The economic conditions and low interest rate environment of recent years have been challenging for banks that rely on a wide spread between long- and short-maturity yields to generate earnings. The authors' analysis indicates that a low interest rate environment is associated with decreased profitability for banks, particularly for small institutions. However, the estimated negative effects on bank profits are economically small and are outweighed by the likely positive effects on profits of low interest rates boosting economic activity.
 Forecast Disagreement in the Survey of Professional Forecasters
by Philadelphia Fed
Many people engaged in activities related to business, financial markets, and policymaking closely follow economic forecasts. Our interest in forecasts stems from the fact that, to an important degree, the decisions we make today are influenced by our expectations about the economy. Accurate forecasts lead to better decision-making and more efficient use of economic resources, and so there is a clear benefit to identifying good forecasts.
 Infographic of the Day: The End of TV?
The cable TV business had its worst year ever in 2013, and both cable and broadcast TV have seen negative ratings growth since 2011.
 U.S. Is Not Japan Or Europe
by EconMatters, EconMatters.com
There has been a trend of late to compare European and Japanese Bond yields to that of the United States and England so I think it necessary to define some large flaws in these comparisons.
 Will Music Streaming Ever Be Profitable?
by Felix Richter, Statista.com
Music streaming services have become very popular in recent years and services such as Spotify and Pandora have gathered millions of users across the globe.
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