Economische aanraders: Veren of Lood biedt u op zondag wekelijks een inkijkje in (minstens) 15 belangrijke of informatieve artikelen en interviews die vooral de voorafgaande 7 dagen op economisch terrein verschenen op onafhankelijke sites.

De kop is de link naar het oorspronkelijke artikel, waarvan de samenvatting of de eerste (twee) alinea’s hier gegeven worden. Er zijn in deze rubriek altijd verschillende economische scholen vertegenwoordigd, en we streven er naar die diversiteit te handhaven.

We nemen wekelijks ook een paar extra links op naar artikelen die minder specialistische kennis vereisen. Deze met *** gemerkte artikelen zijn ons inziens ook interessant voor lezers met weinig basiskennis van economie.

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***America Needs a New National Strategy – Charles Hugh Smith
30 november
A productive national Strategy would systemically decentralize power and capital rather than concentrate both in the hands of a self-serving elite.
If you ask America’s well-paid punditry to define America’s National Strategy, you’ll most likely get the UNESCO version: America’s national strategy is to support a Liberal Global Order (LGO) of global cooperation on the environment, trade, etc. and the encouragement of democracy, a liberal order that benefits all by providing global security and avenues for cooperation.
This sounds good, but it overlooks the Endless Wars ™ and global meddling that characterize America’s realpolitik dependence on force, which it applies with a ruthlessness born of America’s peculiar marriage of exceptionalism and naivete.
The happy UNESCO story also overlooks the rapacious incoherence of America’s political system which is ultimately nothing but the Corporatocracy’s advocacy of self-interest. This system is based on the bizarre notion that private-sector corporations with revolving-doors to central state agencies lobbying for state protection of their monopolies will magically benefit the entire populace.
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The Big Con: Reassessing the ‘Great’ Recession and its ‘fix’ – Laurence Kotlikoff
28 november
The general consensus on what caused the Great Recession can be summed up as “bad banks full of bad bankers did bad things”. This column argues, however, that this narrative doesn’t fit the facts. And worse, it diverts attention from the real problem, which was regular use of a bad banking system – a banking system built to fail.
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***The Many Ways Governments Create Monopolies – Mike Holly
1 december
Politicians tend to favor authoritarianism over capitalism and monopoly over competition. They have directly created monopolies (and oligopolies) in all major industrial sectors by imposing policies favoring preferred corporations and preferred special interests.
In 2017, University economists Jan De Loecker and Jan Eeckhout found monopolies behind nearly every economic problem. They have slowed economic growth and caused recessions, financial crises and depressions. These monopolies restrict the supply of goods and services so they can inflate prices and profits while also reducing quality. In addition, monopolies have decreased wages for non-monopolists by decreasing the competition for workers. This has led to wealth disparity, underemployment, unemployment and poverty
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G20 and the financial war – Alasdair Macleod
29 november
This weekend, the G20 nations meet at Buenos Aires. The most important issue will be America’s use of trade policy, ostensibly to bring an end to China’s unfair trade practices. Rather, it could mark a significant milestone in the cold war against China and drive the global economy into a slump.
Introduction
President Trump initiated the trade war with China. There is a widespread assumption he is pursuing his “art of the deal”, coming into negotiations aggressively to get a satisfactory compromise. Therefore, the script goes, China will be forced to climb down on its restrictive practices, technology and patent theft, and modify its Made in China 2025 (MiC2025) initiative to open it to American corporations. Trade negotiators from both sides have been working in the background to achieve some sort of progress before Presidents Trump and Xi meet at the G20 this weekend, which buoys up hopes of a positive outcome.
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State-dependent effects of monetary policy: The refinancing channel – Martin Eichenbaum, Sérgio Rebelo, Arlene Wong
2 december
Mortgage rate systems vary in practice across countries, and understanding the impact of these differences is critical to the design of optimal monetary policy. This column focuses on the US, where most mortgages have a fixed interest rate and no prepayment penalties, and demonstrates that the efficacy of monetary policy is state dependent, varying in a systematic way with the pool of potential savings from refinancing. As refinancing costs decline, the effects of monetary policy become less state dependent.
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How Private Banks Create Bubbles — with the Help of Central Banks – Frank Shostak
30 november
With meagre resources at his disposal, an individual is likely to allocate these resources (i.e., his wealth) towards essentials such as food, clothing and a roof over his head.
He is unlikely to allocate his meagre wealth to less essential goods as far as life and wellbeing is concerned. His variety of consumer goods is likely to be very limited.
As his real wealth begins to expand, the individual is likely to expand the variety of goods consumed, thereby raising his living standard.
Instead of being limited to basic essentials, he can now afford a bit of luxury, or less essential goods, so to speak.
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Pockets of risk in European housing markets – Jane Kelly, Julia Le Blanc, Reamonn Lydon
25 november
Loan-to-value limits and other borrower-based macroprudential measures are now used in two-thirds of advanced economies. This column uses survey data to document changes in credit standards in a cross-section of countries in the run-up to, and aftermath of, the financial crisis. There is clear evidence of laxer credit standards in countries that experienced a real estate boom-bust, and a significant tightening after the bust. The results imply that compared to earlier years, younger and lower-income borrowers have to save for longer before buying.
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The Most Splendid Housing Bubbles in America Deflate – Wolf Richter
27 november
Seattle home prices drop at fastest pace since Housing Bust 1. Feeble declines in San Francisco, Denver, Portland, etc. Flat prices in others. Condo prices in NY City suddenly jump.
Single-family house prices in the US, according to the S&P CoreLogic Case-Shiller National Home Price Index, were essentially flat on a month-to-month basis in September, and rose 5.5% compared to a year ago (not seasonally-adjusted). This year-over-year growth rate is below 6% for the second month in row, after having been above 6% all year. This leaves the index 11.5% above the July 2006 peak of “Housing Bubble 1” in this millennium, which came to be called “bubble” and “unsustainable” only after it had begun to implode during “Housing Bust 1”:
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Correlating social mobility and economic outcomes – Maia Güell, Michele Pellizzari, Giovanni Pica, Sevi Rodriguez Mora
26 november
Measuring intergenerational mobility and understanding its drivers is key to removing the obstacles to equal opportunities and assuring a level playing field in access to jobs and education. This column uses the informational content of Italian surnames to show that social mobility varies greatly across regions in the country, and that it correlates positively with economic activity, education and social capital, and negatively with inequality. The findings suggest that policies and political institutions are unlikely to be the main drivers of geographical differences in social mobility.
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***What’s Behind the US-Saudi Nuclear Mega-Deal? – Leonard Hyman, Willian Tilles
28 november
Up to 16 nuclear power plants for civilian purposes? Really?
Last week, the NY Times ran a front-page story on Saudi Arabia’s efforts to purchase nuclear fuel enrichment capabilities and as many as 16 nuclear power generating plants from the US. The principal concern expressed here was the Saudi’s insistence on ownership of nuclear fuel-enrichment technologies.
Typically, when the US has exported its reactor technology, it is accompanied by a fuel purchase agreement. We sell the fuel more or less as finished product. In the past, reluctance to export fuel-processing technology stemmed from concerns regarding proliferation of nuclear weapons. Saudi Arabia does have domestic sources of uranium they could mine but they have also expressed the need to respond to a potential nuclear arms rivalry with Iran.
But this article omitted the most important point. The key question is what are the Saudi’s motives regarding construction of a vast number of nuclear power plants for supposedly civilian purposes? The answer is obvious. There is no earthly commercial or economic reason for them to produce those quantities of electricity in the proposed nuclear fashion.
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This Is How the “Everything Bubble” Will End – Nick Giambruno
30 november
I think there’s a very high chance of a stock market crash of historic proportions before the end of Trump’s first term.
That’s because the Federal Reserve’s current rate-hiking cycle, which started in 2015, is set to pop “the everything bubble.”
I’ll explain how this could all play out in a moment. But first, you need to know how the Fed creates the boom-bust cycle…
To start, the Fed encourages malinvestment by suppressing interest rates lower than their natural levels. This leads companies to invest in plants, equipment, and other capital assets that only appear profitable because borrowing money is cheap.
This, in turn, leads to misallocated capital – and eventually, economic loss when interest rates rise, making previously economic investments uneconomic.
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Global banking, local stress: How multinational banks transmit shocks – José L. Fillat, Stefania Garetto, Arthur V. Smith
30 november
How relevant are global banks in the transmission of shocks across countries? This column discusses the effects that the presence of foreign banking institutions has on the transmission of shocks during crises. Using a model that microfounds a bank’s decision on whether and how to expand into foreign markets, it quantifies the extent of shock transmission and examines the effects of counterfactual regulatory and monetary policies across borders.
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The Fed Is Now Addicted to Easy-Money Policy – Thorsten Polleit
29 november
“I think we have much more of a Fed problem than we have a problem with anyone else”, said US President Donald J. Trump on 20 November 2018. While the press, mainstream economists, and bankers cry wolf, the US President hits the nail on its head: The Fed is the source of significant economic and political trouble. By issuing US dollar out of thin air, it sets into motion unsustainable booms, which sooner or later turn into bust.
What is more, the Fed, expanding the US dollar quantity through credit expansion, nurtures the “deep state”: Providing it with the financial means to buy voter consent; to increase its impact on all walks of peoples’ lives; to make possible its aggressive military adventures on a world-wide scale; and to keep alive and kicking its monetary system – that couldn’t survive without an ever deeper state.
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***Troubled Pemex Announces a Big Boost – Don Quijones
30 november
Mexico’s embattled oil giant Pemex has almost tripled its estimate of the potential reserves offered by Ixachi, a recently discovered onshore oil field in Veracruz. The field, located to the south of the major port city of Veracruz, was discovered in November last year, when its 3P reserves (proved, probable and possible) were estimated at 366 million boe (barrels of oil equivalent).
At the time of the discovery the company asserted that the field could hold far more reserves. On Tuesday it revised the figure to over 1 billion boe after drilling two new wells. The new estimated total value of the field is $40 billion. If the estimate proves to be accurate, Ixachi would represent one of the largest discoveries worldwide made this decade — and according to Antonio Escalera, Pemex’s director of reserves, “the most important discovery in Mexico in the last 25 years.”
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Per capita income, consumption patterns, and carbon dioxide emissions – Justin Caron, Thibault Fally
1 december
With global emissions of CO2 still growing, understanding the determinants behind energy use and emissions is as relevant as ever. This column looks at the role of per capita income and consumption choices. It finds that the share of expenditures spent on energy, as well as energy-intensive goods, across a large set of countries tends to decrease with income, while simulations indicate that income growth shifts consumption patterns in a way which reduces emissions. But increasing emissions in low- and middle-income countries and a shift from direct to indirect consumption of energy mean that the effect on total world emissions is modest.
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