EconVue Spotlight

Trust is the common thread that runs through recent research at EconVue.  Robert Pringle discusses the lack of trust in our financial institutions, which was worsened by the Great Recession.  Collin Canright tracks the debate over alternative trustless financial systems such as bitcoin. Karim Pakravan feels that the dollar is weak because of lack of trust in the US economy, and Marsha Vandenberg writes about consumers who are unable to trust technology companies to protect their children.  David Johnson envisions a merging of dental care and primary care,  and  a new platform for health care. Will we share our most personal information with the companies we work for as they create their own internal healthcare systems? Today nurses, doctors, and dentists are our most-trusted professionals. This could change under a new regime with different incentives.  

In this week’s Spotlight, we feature a range of provocative opinions and analysis.  The funniest interview by an economist I have ever read is Austan Goolsbee’s home economics quiz on NPR.  The deepest dive is Paul Robert’s Pulitzer-worthy article in Politico on what happens when a town is taken over by bitcoin mining.  The most iconoclastic analysis is by Derek Scissors who says that TPP and the recent steel and aluminum tariffs are inconsequential.  He then warns that either NAFTA’s failure, or US trade actions against Chinese technology companies, could be highly impactful.  If both occur, the results could be devastating not just for North America or China, but for the global economy.

RESEARCH BY ECONVUE EXPERTS

The Capture of Money - Why People do not Trust it
Robert Pringle 

In the case of money, we hand over responsibility for it, i.e. for how it functions as a social institution, to governments and official guardians appointed by the state, i.e. central banks and regulators. 

Dollars and Deficits: A Vote of Non-Confidence
Karim Pakravan 

In the past few months, the stars seemed aligned for a stronger dollar:  strong U.S economic growth and rising interest rate differentials between the dollar and other major currencies.  Yet, we have witnessed the opposite: the dollar (as measured by the DXY, a weighted average of the dollar relative to the currencies of the U.S. main trading partners) has weakened significantly, falling by 13.3% in the year through early March, and losing 2.3% year-to-date. This vote of non-confidence comes from the confluence of several factors:  bond markets concerns about an overheating U.S. economy and the surging twin deficits.

FinTech Marketing
Collin Canright 

International FinTech startups are looking to the United States as a vast consumer and business market for their applications and services. Despite the difficulties posed by a dual regulatory system, in which multiple federal regulators join agencies in all 50 states, the wealth and size of the market beckons.

Platforming Healthcare: Owning Hospitals Is So 2015
David W. Johnson 

The news that Amazon, Berkshire Hathaway and JP Morgan Chase joined forces to create their own healthcare company rocked the industry. The ten largest health insurers and pharmacy businesses lost $30B in market value in two hours.

Upsizing Dentistry: Putting More Bite into Primary Care
David W. Johnson 

It’s time to “think different” about the organization, delivery and purpose of dental care. Oral health is a key component of overall health. New business models are emerging that will enhance dental care with lower costs, greater access, improved convenience and a broader range of services.

Investor Activists Want a Bite at the Apple
Marsha Vande Berg 

California teachers have teamed up with an East Coast activist hedge fund to petition Apple Inc. to step up its game and give parents the tools and choices they need to ensure smartphones don’t damage children’s health. Together, CalSTRS and JANA Partners are turning an old adage on its ear about gifting shiny apples to teachers.

STORIES IN OUR SPOTLIGHT

How much does trade impact Americans? Not all that much
Derek Scissors 3/12/2018 The Hill

Both sides of the debate exaggerate the influence of the latest White House actions on trade. 

The market dogs that didn’t bark
Anatole Kaletsky 2/27/2018 Project Syndicate

Oil and bond prices, and currencies have remained stable. This could change.

Saudi Aramco IPO delayed until 2019, UK officials told
Anjli Raval, Henry Mance and Patrick Jenkins, 3/11/2018 Financial Times

A lot could happen in equity markets by 2019.

Crude oil’s next move? Clues from soybean oil
Erik Norland 3/1/2018 CME Group

Not my job: We quiz economist Austan Goolsbee on home economics
NPR, 3/10/2018

In the year 2018, when I said that I write about economics, I was actually asked if I meant home economics. But I think I would have done pretty well on this quiz.

This is what happens when Bitcoin miners take over your town
Paul Roberts March/April issue Politico Magazine

This is superb long form journalism. If you invest time in reading pieces like this, you will understand the world of cryptocurrencies.

Illinois has been quietly considering Bitcoin for tax payments
Stan Higgins 3/6/2018 Coin Desk

So much for regulatory blowback. Once local governments start accepting tax payments in cryptocurrencies, it is over

Cryptocurrency investor sees gold in the tokenized infrastructure
Mark Albertson 3/2/2018 Silicon Angle

From tolls to tokens, the intersection of cryptocurrency and infrastructure. Interview with Brad Rotter.

Alexa, play the financial-industry finale  
Karen Petrou 3/9/2018 Federal Financial Analytics

Will the convenience of combining banking and shopping lead to monopolies and unforeseen systemic risks?

Australia’s student loan problem is a teachable moment for the U.S.
Jason Delisle and Alex Usher 3/2/2018 Brookings Institute

 The downside of income-based repayment programs.

Uber launches Uber Health, a B2B ride-hailing platform for healthcare
Darrell Etherington 3/1/2018 Tech Crunch

This is a great idea. Solves the last mile problem for autonomous vehicles as well.

Why has the US fallen behind the UK in labor force participation?
Ernie Tedeschi 2/23/2018 Medium

We are older and less healthy than our British cousins. But the biggest reason we have fallen behind the UK in labor force participation, is that due to more generous maternity leave policies, women in the UK stay in the labor force longer

Beijing and Shanghai overbuild suggests growth hit by 2019
Benn Steil and Benjamin Della Rocca 2/27/2018 Council on Foreign Relations

Don’t forget new property taxes. @BennSteil estimates that a 10% fall in housing would knock .5% off Chinese GDP. Beijing and Shanghai Overbuild Suggests Growth Hit by 2019

A Chinese puzzle: Why economic “reform” in Xi’s China has more meanings than market liberalization
Evan A. Feigenbaum 2/26/2018 Macro Polo Blog