A roundup of what The Globe and Mail's market strategist Scott Barlow is reading this morning on the World Wide Web.
Massachusetts Institute of Techonolgy economics professor Daren Acemoglu, also author of the best-selling Why Nations Fail, published a paper that, to me, represents the most important criticism of Thomas Piketty's Capital in the 21st Century.
Using historical examples, Prof. Acemoglu argues that political institutions, not capitalism, is primarily responsible for economic inequality. He writes, "The focus on the share of top incomes gives a misleading characterization of the key determinants of societal inequality, but also that inequality dynamics are closely linked to institutional factors and their endogenous evolution, much more than the forces emphasized in Piketty's book."
The definitively class-oriented unrest in Ferguson, Mo. and recent poll results showing record low approval rating for U.S. Congress underscores the importance of Prof. Acemoglu's view. Societies that don't trust political leadership and institutions like local police, and that despise the financial system as composed almost entirely of rent-seeking jackasses, is ripe for financial and cultural instability.
"The rise and fall of general laws of capitalism" – Acemoglu, Robinson, M.I.T.
The Atlantic's Derek Thompson has been my go-to source for analysis on the media sector for a long while. His post today is on a bit of a different topic, adding to the inequality discussion by noting that economic inequality is breeding health inequality. He writes:
"Compared to adults making $75,000 or more, those making less than $20,000 were 50 percent less likely to exercise, 42 percent less likely to drink a lot of water, and 25 percent less likely to eat less fat and sweets. And adults making between $20,000 and $75,000 were about 50 percent more likely to use over-the-counter diet pills, which aren't proven to work."
"Rich people exercise, poor people take diet pills " – Thompson, The Atlantic
On a lighter note, investment blogger Brian Lund published a hilarious post on why George Soros' investment theories will be of no value whatsoever to the average investor.
After describing how back pain often drives Mr. Soros' investment decisions, Mr. Lund lists a number of questions that must be answered positively before investors follow Mr. Soros' investment method. These include, "Have you ever booked a $1 billion dollar single-day profit by breaking a sovereign bank?" and "Have you booked over $40 billion in cumulative profits?"
"There is nothing you can learn from George Soros" – Stocktwits
As recently as a year ago, a headline like "China's economy flashed red, again" would be at the top of this post. But reader statistics suggest China fatigue has set in, even though the country's economy still, to a great extent, determines global commodity prices.
Chinese manufacturing data came in well below expectations overnight and consumer spending has failed to compensate.
"China's economy flashed red, again" – WSJ
"China's big bosses face massive pay cuts" – Business insider
Tweet of the Day is from @barnejek and includes a disturbing photo, "Russian Rail sanctions anyone? MT"@StateOfUkraine: shipment of artillery that #Russia has delivered to the border pic.twitter.com/q22XV4eMDF"
Diversion: "Stop pretending there's a line dividing politics and tech " – Paleofuture
Follow Scott Barlow on Twitter @SBarlow_ROB
Scott Barlow