Interesting & Important News & Analysis, June 10, 2019

Cross-Laminated Timber Will Save Time, Labor Costs On Local Commercial Construction Projects

“Drop ceilings and suspended ceilings are not permissible in mass timber design,” he said. “As a result everything is exposed: sprinkler lines, wiring, suspended light, air vents. There is a key opportunity to really coordinate well from an engineering perspective to arrive at an interior design product that doesn’t look thrown together.”

Google Confirms Android Smartphone Security Backdoor

The Android system images were infected through “a third-party during the production process,” Siewierski explained. When a device manufacturer wants to include features that aren’t part of the Android Open Source Project itself, and Siewierski uses the example of face unlock here, it might engage a third-party to develop this and so sends the entire system image to them for that development process.

This is how the backdoor came to be pre-installed on straight from the factory smartphones. It’s a classic supply chain attack. …

… Google Play Protect also tracks, and removes, Triada and any related apps it detects [on] user devices.

From Glyphosate to Front Groups: Fraud, Deception and Toxic Tactics

The Washington-based International Life Sciences Institute (ILSI) is used by corporate backers to counter public health policies. Its members have occupied key positions on EU and UN regulatory panels. It is, however, an industry lobby group that masquerades as a scientific health charity. The ILSI describes its mission as “pursuing objectivity, clarity and reproducibility” to “benefit the public good”. But researchers from the University of Cambridge, Bocconi University in Milan, and the US Right to Know campaign assessed over 17,000 pages of documents under US freedom of information laws to present evidence of influence peddling.

Industrial methane emissions are underreported, study finds

Using a Google Street View car equipped with a high-precision methane sensor, the researchers discovered that methane emissions from ammonia fertilizer plants were 100 times higher than the fertilizer industry’s self-reported estimate. They also were substantially higher than the Environmental Protection Agency (EPA) estimate for all industrial processes in the United States.

“We took one small industry that most people have never heard of and found that its methane emissions were three times higher than the EPA assumed was emitted by all industrial production in the United States,” said John Albertson, co-author and professor of civil and environmental engineering. …


Russia-China: a Strategic Alliance for the 21st Century

… the alliance being consolidated by Russia and China is one that offers renewed hope in a progressive and peaceful future for the planet.

China progressive, peaceful? Even Russia isn’t progressive. China, though, is about as far from progressive as is gets. As for peaceful, ask China’s neighbors if they feel threatened by China’s pronouncements concerning the South China Sea and Taiwan. Ask the progressives in Hong Kong if China is progressive and has peaceful intentions.

This is an economic issue and a risk-management issue of the highest order. Xi of China wants the world to become authoritarian, anti-democratic. In their zeal to condemn mistakes made by US administrations, some people build up enemies of the People, such as Xi.

This is not what affordable insurance is designed to cover or could ever cover:

Our Dying World

The altered climate will cause multiple catastrophes, listed in Wallace-Wells’ table of contents: heat death, hunger, drowning, wildfires, out-of-control weather – typhoons, tornadoes, floods and droughts – a fresh water drain, dying oceans, unbreathable air, the spread of plagues not seen in millennia and of tropical diseases throughout the world, climate wars and more.

Here’s another one on China. This one blurs all sorts of lines that are otherwise quite clear. First of all, it makes the false claim that the Democracy Movement wasn’t for or about democracy but capitalism. Second, it speaks of the Chinese one-party dictatorship as if it was, and still is, some benevolent entity rather than a totalitarian dictatorship that tolerates no dissent. Also, just because there were shortsighted Americans spitefully using some Chinese people in the Democracy Movement does not in any manner prove that the Movement was not genuine. Third, it paints a picture of the demonstrators as sheer evil and the Chinese military as the victims even though the Chinese People have never been allowed to vote for those they might want to lead. The military did crush the Movement and did so not for the People but for the dictators. It’s ironic that China is state capitalism while the dictator’s sympathizers point to those who wanted capitalism in China as villains.

Well, I remember reading the Democracy Wall writings at the time, and the vast, vast majority of those demonstrating were calling for grassroots democracy, not “free markets,” not libertarian capitalism.

Tiananmen: The Massacre that Wasn’t

As I did, Chris Williamson also found problems with Jonathan Reynolds’ critique of MMT.

The economic virtuous circle at the centre of MMT

The notion that an FCR would be flexible is moot, to say the least. Although the FCR states that it could be suspended in the event of an economic shock, the decision to do so wouldn’t be taken by the democratically accountable Chancellor of the Exchequer. In fact, the FCR explicitly states that: “Only the [Bank of England’s] Monetary Policy Committee (MPC) can make this decision.” In other words, it would be the MPC who would determine whether the conditions were met for suspension, and their threshold on when to suspend could be very different to the threshold preferred by an elected Labour government.

It is that unnecessary straitjacket that could force a future Labour government to implement unpalatable austerity policies. If that happened, it would do lasting damage to Labour’s reputation, just as Denis Healey did when he needlessly went to the IMF in 1976, which paved the way for Thatcherism.

Assisting people to achieve an MMT understanding will inevitably shift the Overton window and help to usher in a new era where the public insist that the economy works for the many not the few.

That’s why we need a political rather than a fiscal credibility rule to ensure we are always focused on serving the interests of the people rather than the elites.

As I posted on June 8, 2019, the Employment Situation is stagnant.

Dollar whacked as economic slowdown spreads to U.S. jobs data

Nonfarm payrolls increased by 75,000 jobs last month, falling below the roughly 100,000 needed per month to keep up with growth in the working-age population.

Tepid employment added to lackluster data on consumer spending, business investment, manufacturing and homes sales suggesting the economy was losing momentum in the second quarter. Growth has cooled as the stimulus from last year’s tax cuts and spending increases fades.

“Unlike a lot of the reports we’ve seen where the headline is strong and the details are soft, or vice versa, this is just soft. Headline is soft, details are soft,” said Anderson, noting that the average duration of a spell of unemployment rose substantially and the employed share of the population fell.

Don’t let the lower dollar concern you, though. It’s actually a good thing. A weaker dollar makes imports more expensive but exports cheaper to sell. It also drives more Americans to buy American. Loans are easier to pay off with a weaker dollar too. Meanwhile, the US remains the safe-harbor currency/bond for the world.

Will a recession fix LA’s housing crisis?

Regardless of whether the next recession makes housing more affordable, says United Way homeless initiatives director Chris Ko, it’s clear the recent bull market hasn’t benefitted LA’s poorest residents.

“There are more ways than one to grow and prosper,” he told reporters Tuesday. “And I think the one we have chosen socially right now leaves people behind.”

Everything You Need to Know About Modern Monetary Theory

Five Republican senators have responded by introducing a resolution condemning MMT on the grounds that it “jeopardizes the United States’ economic security.”

Those senators were responding to the common caricature of MMT that every problem can be solved by printing money. Many others who ought to know better have made the same mistake. Bill Dudley, the former president of the Federal Reserve Bank of New York, blamed MMT-like policies for hyperinflation in Weimar Germany, Zimbabwe, and Venezuela. Larry Summers, the former U.S. Treasury secretary, called MMT “ludicrous,” “fallacious at multiple levels,” and a “recipe for disaster.”

These criticisms miss the mark. MMT is actually grounded in old and uncontroversial economic ideas, and its appeal is neither ideological nor partisan.

Want to learn a few things or lots of things depending upon how much you already know about macroeconomics? Read Ann Pettifor’s statement at the “Lessons from the Great Financial Crisis” event of the the TUC’s Economics and Social Affairs department.

International coordination saved the finance sector, but not the world

Lessons were not learned from the crisis.

Instead policy-makers resorted to the deflationary policies of the 1930s. Monetary radicalism was coupled with fiscal conservatism. …

Fiscal contraction and austerity transferred the burden of adjustment on to those innocent of the crisis – the 99%. This in turn led to rising inequality, popular unrest and the rise of nationalisms around the world, and even fascism in parts of Europe.

Ten years after the crisis Europe, and much of the world are experiencing social insurrections and political crises reminiscent of the inter-war years – the 1920s and 30s.

Higher interest rates aimed at vast bubbles of debt pose a real threat to the global economy, as they render debt unpayable. In this sense the Fed is repeating the errors of both the gold standard era, and the Greenspan era. Between 2003-6 the Fed had steadily raised interest rates intending to take away the ‘punchbowl’ from financiers ‘drunk’ on debt. Instead higher rates took the form of a ‘dagger’ aimed at, and then bursting a vast bubble of debt.

So no, madam Chair, we have not learned the lessons of history, or of the last financial crisis. And John Maynard Keynes’s monetary theories and policies for a stable international financial framework aimed at international recovery based on public, not private authority, have been firmly killed off by Thomas Lamont’s successors on Wall St and in the City of London.

The end of the Arctic as we know it

Less oxygen and ice, more acid and heat. Jonathan Watts joins an expedition studying what this means for the planet

Together, millions of these species form an oceanic pump, says Mattias Cape, a biological oceanographer with the University of Washington. Phytoplankton help the oceans produce more oxygen than all the world’s forests. They also sequester carbon dioxide more effectively because copepods and the bigger creatures that eat them take the gas down to the depths, where it can be stored for hundreds of years. Nowhere is this pump more effective than near the poles – the zooplankton here are bigger, so they sink deeper.

But this is changing. When Cape observes the zooplankton through a microscope in the hold of the ship, he can see that the chubby Arctic copepods have competition from their slimmer and shorter Atlantic counterparts. This invasion has been recorded in other parts of the ocean. “We see a shift from big to small, which is a concern, because it will make this pump action weaker,” he says. …

… Wagner speculates that when this calming barrier melts away, the swells will churn the ocean and bring warm water to the surface, which could further accelerate the fragmentation of the polar cap. It is yet another potentially grim area of study, but he views it – like other signs of the Arctic’s demise – with professional composure.

“Emotionally, I detach myself,” he says. “The Arctic is an object of study. It’s like a doctor observing a patient to see how sick they are.” He is reluctant to offer a prognosis without a longer-term study, but he says the physics make a recovery extremely unlikely.

“I have to hurry up or my science will become archaeology,” the 34-year-old jokes. “There will still be sea ice during the winter, but in the summer it will probably disappear. It won’t be the death of the Arctic, but will be the end of the Arctic as we know it.”

1 killed, 5 injured when crane topples on Dallas apartments

A construction crane buffeted by high winds during a storm toppled on a Dallas apartment building Sunday, killing one woman in the building and injuring five other people, two of them critically, a fire official said.

… Earlier, he had said that six people were injured but said the figure would likely change.

Recession Anxieties, June 2019

What about Leamer’s thesis of the business cycle as housing cycle? In the last recession, investment and real house prices peaked about two years before the onset of the recession. Real investment peaked in 2018Q1. Real housing prices, on the other hand, have not yet peaked.

The Case-Shiller indices only go up through March. Looking at the monthly Zillow price indices, which extend through April, one can see an apparent peak: March for nominal, February for real.

Moreover, in the top 12 home markets, 11 are experiencing decreasing prices from March to April (the largest — New York city — is flat).

Interestingly, the Zillow index (which differs from the Case-Shiller, see discussion here) peaks one year before the recession. If we get a repeat performance, the recession begins in February 2020.

Why Universal Basic Income Is a Bad Idea by Daron Acemoglu – Project Syndicate

… UBI is a flawed idea, not least because it would be prohibitively expensive unless accompanied by deep cuts to the rest of the safety net. In the US (population: 327 million), a UBI of just $1,000 per month would cost around $4 trillion per year, which is close to the entire federal budget in 2018. Without major cost savings, US federal tax revenue would have to be doubled, which would impose massive distortionary costs on the economy. And, no, a permanent UBI could not be financed with government debt or newly printed currency.

“… could not be financed with … newly printed currency ….” That’s nonsense. Notice he doesn’t offer anything as to why he makes the statement/claim. Of course it could be financed with new currency. The question is whether too much money would be in the economy chasing too few goods and services. That’s why a guaranteed living income would have to be planned. However, most of the people who need the income have debts to pay down, especially student debts. Paying those down wouldn’t be price inflationary. Only after they are paid down or off would income be freed up to buy goods and services. There again, many if not most people would choose to save rather than excessively spend.

… a more sensible policy is already on offer: a negative income tax, or what is sometimes called “guaranteed basic income.” Rather than giving everyone $1,000 per month, a guaranteed-income program would offer transfers only to individuals whose monthly income is below $1,000, thereby coming in at a mere fraction of a UBI’s cost.

I’m not for setting the line at $1,000. It’s way too low to help enough. It would be better than nothing, which is what we have now; but, we could do much better without causing runaway price-inflation or wage inflation.

I’ve been using the terms “universal” and “guaranteed” interchangeably. I do see the distinction. My personal preference is to target those at the bottom, not the top. The amount of money could go down on a sliding scale indexed to the cost of living. Millionaires and billionaires don’t need it and probably shouldn’t get it because of the undo influence of money in politics and against democracy.