Daily Archives: July 20, 2013


Chinese Scientists Announce ‘Safe’ Way To Create Stem Cells

Design & Trend has the story Chinese Scientists Announce ‘Safe’ Way To Create Stem Cells.

The previous method of accomplishing this had been extremely complicated–and as a result of that complication, limited the clinical uses of such cells. This new method however has no such drawback.  Professor Deng Hongkui of Peking University. the leader of the Chinese team, said in their study that his team validated “a whole new route” to pluripotent stem cells.

Besides the value of this discovery by Chinese scientists in China, there is another take away from this article.  Though much of our semiconductor technology is now in China, India, and South Korea along with many of our high tech jobs, we can always count on our lead in biotech to lower the unemployment rate. Certainly, none of the emerging countries in Asia will be able to catch up to our lead.  Certainly, the Republican effort to prevent funding for embryonic stem cell research in this country will not drive our biotech scientists to other countries to do some of their research. Anyway, the Republicans have a moral position to uphold, and economic concerns pale in the face of morals.  You surely know that Republicans think morality comes before business and profit.

Just as assuredly, you cannot find any irony nor any sarcasm in what I have said before. Moreover, nobody could see any circular reasoning in what I have said.

Remember that you will not find the definition of the word gullible if you were to look it up on the internet.


G-20 backs plan to curb tax avoidance by large corporations

The Boston Globe has the story G-20 backs plan to curb tax avoidance by large corporations.

The world’s richest economies for the first time endorsed a blueprint Friday to curb widely used tax avoidance strategies that allow some multinational corporations to pay only a pittance in income taxes.

I have been realizing for quite some time that the solution to the race to the bottom of international companies meeting their tax obligations must come at an international level.  No single country, even one with the large economy of the United States, can solve this problem.  We might have come to this solution many years ago had not George Bush put a stop to the efforts by our country to work with other countries to solve these problems.  What a difference a President makes.

If you cannot get to The Boston Globe article through their pay wall, there is a hint to what is in this article on The Boston Globe free site, in the article G20 finance ministers aim for more growth.

Stashing profits offshore may soon get tougher for companies, thanks to an ambitious plan released Friday by the finance chiefs of leading world economies aimed at forcing multinationals to pay more taxes.

 


There Is No Liquidity Trap: Understanding 21st Century Monetary Policy

The Peterson Institute for International Economics has this short piece on their web site, There Is No Liquidity Trap: Understanding 21st Century Monetary Policy.

As long as there exist assets whose price would be pushed up (and rate of return pushed down) by extra demand, monetary policy remains effective and there is no liquidity trap. Fiscal policy may be a useful alternative or complement to monetary policy in certain circumstances, but it is not a necessary alternative even when the short-term risk-free interest rate is zero.
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There is no reason to doubt that central bank purchases of equity or real estate could significantly influence the prices of those assets.

I was thinking of all the arguments against these ideas, and wondering if I needed to broaden my thinking to accept what this author, Joseph E. Gagnon, was saying.  Then I started to think beyond the examples of equity and real estate.  The Fed could buy roads and bridges.  At this point I realized why monetary policy could do all the things that we think only fiscal policy can do.  You just change your definition of monetary policy to include all the things in fiscal policy, and then everything becomes possible.

The official explanation of the Peterson Institute says:

The Peterson Institute for International Economics is a private, nonprofit, nonpartisan research institution devoted to the study of international economic policy.

While The Peterson Institute does employ some very respectable economists, I am always a little suspicious of the Institute because of some of the strongly held, and wacky, economic ideas held by the founder and money bags behind the institute, Pete Peterson.

It might be very interesting and worthwhile to follow up the links to citations in the article.


Elizabeth Warren, hard-liner

Here is another one for my fellow Elizabeth Warren fans.  Politico has the article Elizabeth Warren, hard-liner.

Earlier this week at the White House, President Barack Obama tried to use his powers of persuasion on Elizabeth Warren, privately urging the consumer watchdog-turned-Massachusetts senator to back the student loan deal he was reaching with Senate leaders.

It didn’t work.

On Thursday, she went to the Senate floor to attack the plan, saying it would hurt students and benefit big banks. “I think this whole system stinks. We should not go along with any plan that continues to produce profits for the government. It is wrong,” Warren said.

Warren’s stance accomplished two things.  The compromise bill got passed so that an immediate problem was ameliorated.  She moved the center of debate farther left.  The failings of the bill that got passed can be fixed after the debate moves to where it ought to be.

I particularly liked one comment that I saw in response to the article.

After living in a house with a bunch of smoker, or a bunch of dogs, or in the case of the US house and senate, no one ever flushing the toilet, it is refreshing to hear someone walk in to the place and say this place stinks.

It’s about time.