263 (4 May 2016)

Welcome to week 263!  The articles below caught my attention this week.  Please note that what are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  The links to articles preceded by [SR] require a subscription to be read in their entirety, although complete articles may frequently be found by an Internet title search.

(7 April 2016): “The sugar conspiracy” (http://www.theguardian.com/society/2016/apr/07/the-sugar-conspiracy-robert-lustig-john-yudkin)

********I came across this article by way of a link in “Sugar Has Always Been Bad” (http://daily.jstor.org/sugar-has-always-been-bad/) but I thought this was the most interesting—if much, much longer—article.  It is, in fact, this week’s “Long Read” of The Guardian.  It relates the story of the development of low fat orthodoxy in nutrition science and how one scientist effectively had his career destroyed because he ran afoul of that orthodoxy.  The name of the scientist was John Yudkin and the book that embodied his seemingly heretical ideas about the role of sugar in heart disease was Pure, White, and Deadly (http://www.amazon.com/Pure-White-Deadly-Sugar-Killing/dp/0143125184/), published in 1972.  It is a fascinating tale where the desire to save face and maintain professional status seem to have played a large role in blocking scientific progress, although economic forces play their role, too.

********As it turns out, there is also an audio version of the “Long Read.”  It is 44 minutes long.

(28 April 2016): “The Real Hamilton: What’s Not to Love?” (http://www.bloomberg.com/news/articles/2016-04-28/the-real-hamilton-what-s-not-to-love)

——–In this year of the hit musical Hamilton, election, and $10 bills, it is perhaps worth taking another look at Alexander Hamilton.  “He was vain and opinionated.  He was also usually right.  No libertarian, he believed the federal government could and should play a central role in economic development.  His arguments deserve fresh consideration for today’s problems—even if taking them seriously will make it harder for everyone to agree on his wonderfulness.  For starters, Hamilton rejected Scottish economist Adam Smith’s then-novel doctrine of laissez-faire.  [Furthermore, he] wanted the federal government to have the power to tax and spend, giving it real agency.  ‘Power without revenue is a bubble,’ he wrote.”

********As the article points out, Hamilton also advocated tariffs “to protect infant industries.”  Putting these ideas together, we can see why development economist Ha-Joon Chang says that Hamilton brought together “all the key elements of the economic system that have made the U.S. one of the most successful economies in human history.”

********Two books provide some additional background on Hamilton.  First is the just published Concrete Economics: The Hamilton Approach to Economic Growth and Policy (http://www.amazon.com/Concrete-Economics-Hamilton-Approach-Economic/dp/1422189813/), by Stephen Cohen and Bradford DeLong.  For a much broader view of the man, there the widely read Alexander Hamilton (http://www.amazon.com/Alexander-Hamilton-Ron-Chernow/dp/0143034758/), by biographer Ron Chernow.  According to Michael Lind, the author of Land of Promise: An Economic History of the United States, “There is no real successor to Hamilton of the political scene today,” noting that “The right . . . is nativist, and the left is antibusiness.”

(30 April 2016): “A Private Equity Alum’s Guide to Better Payday Lenders” (http://www.nytimes.com/2016/04/30/your-money/at-nerdwallet-guide-to-better-payday-lenders-james-zhang.html)

——–“James Zhang has collected plenty pf prestigious stamps on his resume in the nine years since he graduated from high school and pursued a career in high finance.  But he’s also an immigrant, the grandson of an illiterate rice farmer who did not have indoor plumbing until the late 1990s.  So perhaps he was the most likely person to find and then shame the many state pension funds and university endowments that invest, through private equity, in the payday lending industry. . . . starting Friday, through a new guide on the website NerdWallet, where he now works, Mr. Zhang hopes to redirect as many people as possible who are seeking these loans.”  Although NerdWallet makes “no money in the short term from its payday lending redirection, it is well aware that people in financial trouble now could be customers next year.”

********NerdWallet (https://www.nerdwallet.com/) “makes it simple to find the best deals on credit cards, insurance, mortgage rates and more.”  Although the reporter notes, “There’s something pretty rich about a company like NerdWallet, which earns commissions from credit card issuers that charge double-digit interest rates, channeling those commissions toward keeping other customers away from the triple-digit effective interest rates that the payday lenders charge,” there seems no doubt which offer is the best for someone of limited means, i.e., everyone.

(4 May 2016): “Jane Jacobs And The American City” (http://daily.jstor.org/jane-jacobs-and-the-american-city/)

********Today would have been the 100th birthday of Jane Jacobs had she lived longer; she died in 2006.  In recognition, the “Google Doodle” of the day calls attention to her life and work.  A search on “Jane Jacobs” will take you to a range of materials.  I was struck by the Slate article (http://www.slate.com/articles/business/metropolis/2016/05/happy_100th_birthday_jane_jacobs_it_s_time_to_stop_deifying_you.html), entitled “Bulldoze Jane Jacobs.”  This sentence caught my attention: “Seemingly every Jacobsian paradise, from Portland, Oregon to San Francisco to the newly revitalized parts of Detroit and New Orleans, is mostly white and well-off.”  Evidently, in her last book—Dark Age Ahead—she “warned that American cities would become more unequal, boring, corporate, and stricken by police brutality if we did not address underlying issues of societal decay.”  JSTOR Daily provides links to a variety of articles that provide perspective on her life and work.

(4 May 2016): “Bountiful Afghan Opium Harvest Yields Profits for the Taliban” (http://www.nytimes.com/2016/05/04/world/asia/taliban-afghan-poppy-harvest-opium.html)

——–According to an Afghan proverb, “It is spring that determines how a year turns out.”  The poppy fields of Helmand Province of Afghanistan this spring indicate that “the Taliban will have a very good year.”  Farmers and officials are reporting high yields and without eradication campaigns by the Afghan cancelled, and much of the land in Taliban control, “it was with peace of mind that farmers, and thousands of seasonal laborers . . . scraped the gum from the opium bulbs.  Taliban fighters were just around the corner to lend a hand—and to receive their share of wages and taxes, in cash or kind.  The crowded fields amounted to an insurgent recruiter’s dream.”

********The article provides a glimpse at the interdependencies between the financing of Taliban activities and opium production.  So-called Taliban tax collectors go to the farmers and collect the “tax” from farmers with little apparent questioning.  According to Zabihullah Mujahid, a Taliban spokesman, indicates that “opium cultivation was a regional and ‘traditional’ issue the brings people the income they need for the rest of the year.”

********Evidently the Taliban is not troubled by regional and traditional practices of opium production.  In this light, the article “When economists turn to crime” (http://www.economist.com/news/united-states/21697826-how-cost-benefit-analysis-might-save-americas-criminal-justice-system-when-economists-turn).  It provides a brief commentary on the recently issued report by the Council of Economic Advisers entitled “Economic Perspectives on Incarceration and the Criminal Justice System.”  You can read the Executive Summary and download the report at: https://www.whitehouse.gov/the-press-office/2016/04/23/cea-report-economic-perspectives-incarceration-and-criminal-justice.  The report confines itself “to questions of costs and benefits: whether locking so many people up for so long is an efficient way to reduce crime.  Its conclusion is a resounding no.  Incarceration does prevent some crimes from being committed . . . But hefty prison spells turn out to be a costly and clumsy way to deter offenders.”  On Monday, April 25th the White House, the Brennan Center for Justice, and the American Enterprise Institute and the Brennan held a program on the topic “Criminal Justice as an Economic Issue.”  You can view the almost two-hour event by a video at the link: https://www.brennancenter.org/event/criminal-justice-economic-issue.  The program begins at 47:05 of the video.

May you have a good week!

Bruce

 

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