360 (13 March 2019)


Welcome to week 360!  The articles below caught my attention this week.  What are intended to be relatively objective “briefs” are preceded by dashes (——–), whereas additional material or relatively subjective comments are preceded by asterisks (********).  Article titles preceded by [SR] require a subscription.

(5 March 2019):Here’s Where to Find the World’s Super Rich, From Paris to TokyoBloomberg.com

********Articles about the super rich don’t draw me in but maps and graphs about them do.  This piece show’s the world’s top 10 cities and the number of their inhabitants with wealth of at least $30 million.  London has the largest number (4,944), followed by Tokyo (3,732), Singapore (3,598), and New York City (3,378).  The data behind the map comes from The Wealth Report for 2019 from Knight Frank, see page 87 of the report for city-level data.

(9 March 2019):Money to Launder?  Here’s How Hint: Find a BankBloomberg.com

********Money laundering, i.e., making ill-gotten money look good, can be done in many ways.  This Quicktake takes a tour through some of the most commonly used methods: shell companies, countries with poor regulatory oversight, seemingly legitimate trade, mirror trades, mixing clean and dirty money, and (my favorite) “smurfing.”  The website of Global Financial Integrity, an organization that “works to curtail illicit financial flows by producing groundbreaking research, promoting pragmatic policy solutions, and advising governments” seems like a good place to learn more.

(11 March 2019):Women Made Butter a BehemothJSTOR Daily

——–“Do you put butter on your toast?  If so, you likely use a product that’s as mass-produced as they come: the final product of a long chain from cow to kitchen.  But between 1750 and 1850, butter was produced in small batches by farm women in the American colonies and early United States.”  Jensen’s story begins with buttermaking in rural Pennsylvania in the late eighteenth century, where there were few cows and women “began to make and sell butter, in addition to what they already produced for their families.”  At that time “Women used the revenue from butter sales to buy household goods . . . while men used the revenue from selling grain and animals to buy farm equipment and more land.”  But changing economic conditions and soil depletion increased the importance of butter relative to grain.  “Soon, men were seeing the value of butter and began investing in more dairy cattle, especially on land that wasn’t good for growing grain.”  Ultimately, “men took over dairying entirely, denigrating women-made butter as ‘unscientific’ and of lower quality—but not before women made the entire industry possible.”

********The post is brief and clearly shows how once buttermaking became a central activity of the dairy farm, the role of women in its production was diminished.  This seems like the work of the invisible handshake.  You can download the 18-page article at a link at the end of the post.  Of related interest is “When Margarine Was ContrabandJSTOR Daily.

(11 March 2019): [SR]’Extension Cord’ to Carry Green Power From Midwest to EastThe Wall Street Journal

——–“Two European firms are backing an ambitious $2.5 billion project to carry renewable electricity underground through the American heartland.”  The 349-mile electrical transmission line . . . would carry wind and solar energy from Iowa into the Chicago area . . . The link would allow renewable energy from the Upper Midwest to travel all the way into the eastern U.S. by hooking up to the PJM Interconnection, the power grid that serves all or part of 13 states, including Illinois, Ohio and Pennsylvania.”  Called the SOO Green Renewable Rail the “vast majority of the line will run in a Canadian Pacific railroad corridor.  The project’s developers expect that going underground on an existing railroad right of way will make it easier to obtain permits and local permission.”  Although investors “have tried to build more than a half-dozen long-distance, direct-current power line

[like the one the SOO project will be using]

in the U.S.  So far, the aboveground efforts have been delayed or derailed by permitting delays as well as local and political opposition.”  It is expected that building belowground will be “nearly twice as expensive per mile as an aboveground line on towers” but there will be fewer risks of power interruption from tornados and other weather-related events.

********The article goes on to note that developers hope “to take advantage of electricity price arbitrage, as well as abundant renewable energy in the Upper Midwest and Great Plains.”  I.e., moving electricity from regions with relatively low prices to those with relatively high prices.  Very reminiscent, this, to the movement of crude oil in recent history.  I’m especially impressed by the strategy of going underground and using existing rail corridors.

********Another aspect of energy greening involves lightbulbs, as made clear by “America’s Light Bulb Revolution” The New York Times.  In 2010, 68% of bulbs installed in homes were traditional incandescent bulbs and 31% were compact fluorescent.  In 2016, traditional incandescents had fallen to 6% and compact fluorescents had grown to 44%.  Most surprising to me is the growth of halogen incandescent bulbs, from virtually none to 37%; LEDS rose from none to 14%.  See the graph in the article for additional detail.  The shift in light bulb usage is perhaps the main reason why “After climbing for decades, electricity use by American households has declined over the past eight years.”  Will this decline in energy use be reversed by the declared intention of the Department of Energy to “withdraw an Obama-era regulation at nearly doubled the number of light bulbs subject to energy-efficient requirements”?  Such a change will be muted because newer light bulbs last longer than traditional incandescents.

(11 March 2019):Voodoo Economics of Keynes Redux?  How Lawrence Summers and MMT AlignBloomberg.com

********Modern Monetary Theory is going to be in the news for some time.  My guess is that it will now be a continuing part of macroeconomic policy debate, as this article, by putting matters in historical perspective, does.  To me it seemed like a more even-handed discussion of its place in macroeconomic thinking that other articles, for or against, have provided.  For an exposition of leading themes of MMT, there is the article by “Stony Brook University professor and MMT proponent Stephanie Kelton” entitled “Modern Monetary Theory Is Not a Recipe for DoomBloomberg.com.  (Kelton was described by Kai Ryssdal as “almost universally acknowledged as the person to talk to about MMT.)  In thinking about these matters, it is important to keep in mind that the conditions under which policies are likely to work are often forgotten—if ever known at all—in policy debates.  Likewise, political action seldom proceeds on a linear path.

(12 March 2019):Baby Nancy, the first ‘black’ doll, woke the toy industryThe Los Angeles Times

——–“This month marks the Barbie doll’s 60th birthday, with a lot of attendant hoopla. . . . Barbie deserves her party, but that celebration has overshadowed another doll anniversary that is arguably more relevant to our cultural moment.  Fifty years ago this month, Baby Nancy made her debut at the American Toy Fair.  A 13-inch black baby doll, Nancy transformed what was racially acceptable in Toyland.  The revolutionary doll’s manufacturer was a newcomer to the trade: Shindana Toys.  Nancy was its maiden doll, a product of the rebirth of Los Angeles after the 1965 Watts rebellion.”  It was important for Shindana to make “an authentic doll representing African American children” and not, as had been the case, “a white doll ‘dipped in chocolate,’ . . . with stereotypically Caucasian facial features and hair that had had been merely tinted brown.”  Toward that end, with few exceptions, “the company’s employees—in the front office, in research and design and on the factory floor—were black.”

********An interesting look at the context and some of the challenges of bringing Baby Nancy to market.  One of those challenges dealt with hair.  “The toy industry had never genuinely attempted to replicate short, natural African American hair before.”  To do so, “Shindana imported a special oven from Italy and slid synthetic doll hair under the heat to achieve a crimped, matted texture.  The factory line workers used a hair comb to fluff out the natural and give it a more realistic appearance and texture.”  The result was a doll that “employees called Natural Nancy.”  An unexpected part of this story is the role that toy giant Mattel played by providing financial and technical support, as well as industry contacts, to the organization that helped birth Shindana.  Mattel, presumably, could have undertaken this project itself but did not.  Surely there is a story to be told.  Perhaps when Rob Goldberg publishes his book “on the politics of toys during the 1960s and 1970s” we will know the answer.

May you have a good week!

Bruce

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