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.

——————————————————————————————————
The Gathering Storm In The Treasury Market – Global Macro Monitor
21 september
Our analysis provides kind of a Grand Unified Theory (GUT) of what is currently taking place in global financial markets
The massive borrowing by the U.S. Treasury is crowding out emerging markets capital flows
The structural factors that have kept long-term interest rates low and term premia repressed are fading
We expect a measured move in the 10-year Treasury yield to 4.25 to 4.40 percent, much sooner than the market anticipates
——————————————————————————————————
The productivity-wage premium: It’s productivity, not size, that matters in a service economy – Giuseppe Berlingieri, Sara Calligaris, Chiara Criscuolo
19 september
The evidence that bigger firms pay higher wages and have higher productivity is mainly based on manufacturing, which nowadays accounts for a small share of the economy. Drawing on a unique micro-aggregated dataset, this column reveals that while the size premia for both wages and productivity are significantly weaker in market services than in manufacturing, the link between wages and productivity is stronger – the most productive firms at the top are not necessarily the largest ones in terms of employment, but they do pay the best. This increases the likelihood of productivity and wage gains being shared with fewer workers, a further challenge to achieving inclusive growth in the new service economy.
——————————————————————————————————
Who Bought the $1.47 Trillion of New US National Debt over the Past 12 Months? – Wolf Richter
18 september
China, Japan, other foreign investors, the Fed, US government funds? Nope.
Foreign private-sector investors and “foreign official” investors – central banks, governments, etc. – whittled down their holdings of US Treasury Securities by $21 billion at the end of July, compared to a year ago, to $6.25 trillion, according to the Treasury Department’s TIC data released Tuesday afternoon.
Over the same period, the US gross national debt – fueled by a stupendous spending binge and big-fat tax cuts – soared, despite a booming economy, by a brain-wilting $1.468 trillion, in just 12 months.
——————————————————————————————————
We Still Haven’t Learned the Right Lessons from the 2008 Crash – Brendan Brown
17 september
Financial media-administered history lessons — whether by commentaries or interviews — on the Great Crash that occurred 10 years ago are frightening. The would-be history teachers are in total denial (or ignorance) of the key fact that 2008 was a monetary-made disaster. This climate of denial continues to foster ever greater danger in the future not to mention a heavy cumulative burden in the decade since — as measured by prosperity lost.
In effect, the Central Bankers Club and their backers among the political elites have been totally successful, it seems, in expunging monetary forces as the key driver — or even as a major factor — in the journey to the 2008 Crash. This started with President George W. Bush nominating Ben Bernanke as a Fed Governor (effective August 2002) in the clear expectation that this Princeton Professor would prove effective in implementing the monetary inflation which he preached. True, Alan Greenspan was still the chief, but by then on shaky footing, given the known hostility of the Bush-Baker “clan” which resented his earlier close cooperation with the Clinton Administration. And Before that, Greenspan was perceived to have some responsibility for the 1991-2 economic downturn which spelled defeat for the older Bush. The implicit term extension deal for Greenspan in 2003 (by two years) was that he would “listen” to the new Governor from Princeton.
——————————————————————————————————
Meanwhile in China, Implosion of Stock-Market Double-Bubble – Wolf Richter
17 september
Bubbles don’t end well for those who don’t get out in time.
US tariffs and threats of more tariffs have not been particularly well received in China, which is already being rattled by corporate credit problems, quakes in the shadow banking system, a peculiar Enron-type phenomenon at provincial and municipal governments called “hidden debt,” and the implosion of nearly 5,000 P2P lenders that have sprung up since 2015. And so today, the Shanghai Composite Index dropped 1.1% to 2,651.79.
——————————————————————————————————
What Keynes should have said – Roger Farmer
17 september
Originally published in February 2009, this column proposes a new paradigm to reconcile Keynesian economics with general equilibrium theory. It suggests that, just as it sets the fed funds rate to control inflation, the Fed should set a stock market index to control unemployment. This would not let every manufacturing firm and every bank fail at the same time “as a result of speculative movements in markets that serve no social purpose.”
——————————————————————————————————
Supply-side health care – John H. Cochrane
19 september
The discussion over health policy rages over who will pay — private insurance, companies, “single payer,” Obamacare, VA, Medicare, Medicaid, and so on — as if once that’s decided everything is all right — as if once we figure out who is paying the check, the provision of health care is as straightforward a service as the provision of restaurant food, tax advice, contracting services, airline travel, car repair, or any other reasonably functional market for complex services.
As anyone who has ever visited a hospital knows, this is nowhere near the case. The health care market in the US is profoundly screwed up. The ridiculous bills you get after the fact are only one sign of evident dysfunction. The dysfunction comes down to a simple core: lack of competition. Airlines would love to charge you the way hospitals do. But if they try, competitors will come in and offer clearer, simpler and better service at a lower price.
——————————————————————————————————
Re-emerging currency mismatches – John D. Burger, Francis Warnock, Veronica Cacdac Warnock
19 september
A large share of Turkey’s bonds are denominated in foreign currencies, and the Turkish lira has depreciated. This recalls the currency mismatches that contributed to many crises in the 1990s. The column argues that many emerging economies like Turkey’s are better able to avoid these crises thanks to improved policies, such as inflation targeting, that have helped foster local currency bond markets. Emerging markets policymakers must not backslide on this progress if they want to maintain financial stability.
——————————————————————————————————
What Can Cause the Next Mortgage Crisis in the US? – Wolf Richter
16 september
The soothingly low mortgage delinquency rate is a deceptive indicator: the New York Fed weighs in.
Mortgage delinquencies at all commercial banks in the US inched down to 3.14% in the second quarter, the lowest since Q2 2007, according to the Federal Reserve. But after those soothingly low delinquency rates in 2007, something happened. By Q3 2008, the delinquency rate hit 5.2%, and in Q4 2009, it went over 10%, and stayed in the double-digits until Q1 2013. This was the mortgage crisis. And we’re a million miles away from it, thank God. Or are we?
——————————————————————————————————
***Politicians Make the Promises —You and Your Children Pay for Them – Gregory Bresiger
21 september
Democratic governments, almost all of them, are normally run by career pols. They have ravenous appetites for wealth. They almost always have big plans to expand the government, which means they always want more money. (I remember Hillary Clinton’s recent book, What Happened. Here she spoke about her plans for a presidency and said she likes “to think big”.) Most popular governments, faced with money problems, will usually pretend they’re only after the wealth of the rich, but it is the great middle class that is bloodied.
Why?
In a typical democracy the first order of business of the pols is get elected. The second order is get re-elected.
——————————————————————————————————
“Abusive” & Draconian Mortgages Are Creating Legal S**t Storm for Spanish Banks – Don Quijones
19 september
They were supposed to protect banks and punish homeowners in difficulties — but they didn’t prevent banks from collapsing.
In a somewhat unexpected move, the EU Advocate General, Maciej Szpunar, recommended that all Spanish mortgages containing a clause allowing banks to initiate foreclosure proceedings on the basis of just one missed payment is abusive and therefore should be annulled. While the EU Advocate’s ruling is not binding, in most cases it presages the ruling of the Court of Justice of the European Union (CJEU), which is expected to take place in the coming weeks.
——————————————————————————————————
It’s The Customer, Stupid: A Marx vs. Menger Battle on Netflix – Allan Stevo
17 september
Somehow, an all-star Hollywood cast created The Company Men (2010) and it got past the usual censors. The movie is an effective rebuttal to Arthur Miller’s 1949 Death of a Salesman. The recently-laid-off characters spend the movie living their lives after rounds of layoffs. In doing so, they effectively act out a debate between a proponent of communism — Karl Marx, and a proponent of the free market — Carl Menger.
——————————————————————————————————
India’s NPL Crisis Erupts: A Major Shadow Bank Defaults On Three Debt Payments – Tyler Durden
22 september
IL&FS Investment Managers, a unit of India’s Infrastructure Leasing & Financial Services (IL&FS) – an Indian infrastructure development and finance company and one of the nation’s largest “shadow banks” – which announced three debt defaults on Friday, said on Saturday morning its Managing Director Ramesh Bawa had resigned as managing director and chief executive officer as a management exodus begins. The company’s independent directors – Renu Challu, Surinder Singh Kohli, Shubhalakshmi Panse and Uday Ved – had also submitted their resignation papers.
The company first defaulted on commercial paper, then on short-term borrowings known as inter-corporate deposits according to Bloomberg. It has also failed to pay Rs 4.5 billion ($62 million) in ICDs to government-backed lender Small Industries Development Bank of India.
——————————————————————————————————
Immigrant entrepreneurship in America: Eight important facts from the survey of business owners – Sari Pekkala Kerr, William Kerr
21 september
There is a contentious global debate surrounding the impact of immigrants on local labour markets. One less contentious aspect has been the notion that immigrant entrepreneurs can have major positive effects for the host economy. This column uses novel US data to explore how immigrant entrepreneurs affect local labour markets and compare with native entrepreneurs. Key findings include substantial geographic variation in immigrant startup rates, lower hiring and salaries, and slightly higher female ownership in immigrant-owned firms.
——————————————————————————————————
The Myth Of The Beneficial Influence Of Immigration – GEFIRA
22 september
As Africa’s population doubles, a lot of them, whatever the circumstances, will becoming to Europe as economic migrants or as refugees. They will be coming – many of them and that is a good thing if they come into a place with an open mind and those economies are doing well because we will be senile. We will be senescent demographically. We’ll need their youthful energy to do stuff. So, that is just what the economic statistics tell you and the demographic data demands, you know… and demography is destiny.
——————————————————————————————————
***3 Ways Marxists Get Capitalism Wrong –
21 september
Only for a short while did the collapse of the Soviet Union silence Marxism. The fatal attraction of the thoughts of Karl Marx has returned — not because they are right but because they are wrong. Marxism serves to convert resentment into a social problem. Marxism is attractive because this ideology offers a huge arsenal of bile to fire up personal ire and to transform wrath into a political agenda. Here we shall address just a few of the wrong ideas of Marxism: the role of the capitalist and of inequality in a market economy and the function of profit and loss.
——————————————————————————————————
Multiple Online Banking Systems Go Down in the UK – Don Quijones
21 september
Payment chaos: For bottom-line-obsessed bank executives, IT systems are an expense to be slashed. The results are in.
Internet banking has become a crisis-prone business in the UK, as the online platforms of big banks suffer regular outages and other forms of IT disruption.
Friday morning, the online systems of the Royal Bank of Scotland, Ulster Bank and Natwest — all part of the RBS Banking Group — crashed in unison, leaving millions of customers unable to pay bills or view their balance on their online and mobile accounts. The group has 19 million customers in the UK and Republic of Ireland and 5.5 million active mobile app users.
——————————————————————————————————
***The influence of leaders on criminal decisions – Carlos Díaz, Eleonora Patacchini , Thierry Verdier, Yves Zenou 23 september
Many policies to tackle youth involvement in crime have been suggested over the years. This column argues that being ‘socially’ close to criminal leaders strongly affects a person’s involvement in crime. Focusing on criminal activities in schools in the US, it shows that a policy that removes all criminal leaders from a school can, on average, reduce criminal activity by about 20% and the individual probability of becoming a criminal by 10%.
——————————————————————————————————
Digging into Wealth and Income Inequality – Charles Hugh Smith
10 september
That changes our perspective on the wonderfulness of ever-expanding household wealth.
The assets of U.S. households recently topped $100 trillion, yet another sign that everything is going swimmingly in the U.S. economy. Let’s take a look at the Federal Reserve’s Household Balance Sheet, which lists the assets and liabilities of all U.S. households in very big buckets (real estate: $25 trillion). (For reasons unknown, the Fed lumps non-profit assets and liabilities with households, but these modest sums are easily subtracted.)
If we look at the numbers with a reasonably skeptical view, we start wondering about aspects that might have previously been taken as “facts” that were above questioning.
For example, households hold $11.6 trillion in cash (deposits). That’s unambiguous. So is the $29.3 trillion in stocks (owned directly and indirectly, i.e. retirement funds, etc.).
But what about the $16 trillion in “other financial assets”? This isn’t cash, stocks, bonds, retirement funds or noncorporate businesses–then what is it? Offshore banking?
——————————————————————————————————

Disclaimer: De VoL-redactie selecteert deze artikelen op interessante inzichten, of naar wij denken nuttige informatie. Wij kunnen echter geen enkele aansprakelijkheid aanvaarden voor de gevolgen van beslissingen die op grond hiervan door lezers zijn genomen, zakelijk zomin als privé.

Eerdere afleveringen van dit wekelijkse overzicht vindt u hier.