Daily Digest 4/13 - Natural Gas Is Sticky, 24 Shocking Tax Code Facts, Why $200 Oil Won't Cause A Recession

• Philippines Pushes to End China Sea Standoff Before Weekend Trip
• Green Slime Drives Our Financial Crises
• Current Tax Code: 24 Shocking Facts About Taxes In The United States
• For Capitalism to Survive, Crime Must Not Pay
• Treasury Faulted in Effort to Relieve Homeowners
• Natural Gas Is Sticky
• High Oil Prices: Why $200 Oil Won’t Cause A Recession
• What the EIA's World Oil Production Data for 2011 tells us about 2012
• 48% of Chicken in Small Sample Has E. Coli

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Economy

Philippines Pushes to End China Sea Standoff Before Weekend Trip (John M.)

The Philippines and China issued competing accounts yesterday of the confrontation on the Scarborough Shoal. While the Philippines said Chinese ships had prevented it from arresting fisherman on its territory, China said the Philippines had illegally blocked the passage of ships seeking shelter from rough weather.

Green Slime Drives Our Financial Crises (adam)

Pink slime was originally limited to dog food, but it has secretly been fed to Americans for a decade. Major hamburger chains, grocery stores, and school lunch programs added it to make up 15% of our burgers. The government didn’t require disclosure of pink slime or ammonia. Tests have established that pink slime remains more likely to harbor dangerous bacteria and that the only way to reduce that problem is to add so much Mr. Clean that the pink slime stinks and tastes awful. Because BPI could not sell the product if it continued to stink and taste awful they reduced the amount of Mr. Clean they used in processing and the risk of the pink slime harboring dangerous bacteria rose.

Current Tax Code: 24 Shocking Facts About Taxes In The United States (David B.)

Our tax system has become so complicated that it is almost impossible to file your taxes correctly. For example, back in 1998 Money Magazine had 46 different tax professionals complete a tax return for a hypothetical household. All 46 of them came up with a different result.

For Capitalism to Survive, Crime Must Not Pay (June C.)

The net result of unequal justice is likely to be the destruction of the overall wealth of our society. I don’t mean the wealth of individuals; I mean the total wealth of goods and services that are the benefits of healthy competition. To the extent that unequal justice prevails, entities that are exempt from the laws will, in all likelihood, be more profitable than law abiding competitors. Then they use their profits to further weaken competitors by using their illegal profits to further build their businesses at the expense of competitors. All of this business building activity is based on a foundation of sand, and ultimately the entire industry — or even the larger economy — becomes distorted. The “rogue” company gains power, changes markets, and destroys direct and indirect competitors because it is playing by different rules...

Treasury Faulted in Effort to Relieve Homeowners (jdargis)

The report is just the latest to criticize the Obama administration’s efforts to relieve homeowners battered by the nationwide drop in housing prices and the broader recession. The office of the special inspector general has repeatedly criticized Treasury’s management of the Home Affordable Modification Program, Washington’s main initiative to prevent foreclosures.

The Treasury Department had estimated that the program would reach three million to four million homeowners. It has aided fewer than a million, though the program has been completing more and more permanent modifications recently.

Natural Gas Is Sticky (James S.)

This trip, he spoke of the pressing need for diversity in an interconnected energy market. He warned that pipelines like BTC and Nabucco may sometime in the future "become somewhat archaic." In theory, that means bad things for a U.S. foreign policy based on what geopolitical scholar Walter Russel Mead dubbed sticky power -- "attracting other countries to the U.S. system and then trapping them in it." Much like the Marshall Plan in the aftermath of World War II, sticky power works because even though the United States isn't always the global superpower, its economic principles are defined largely in global terms. Integration into the global system means U.S. economic influence, for all intents and purposes, is geopolitical flypaper.

High Oil Prices: Why $200 Oil Won’t Cause A Recession (David B.)

Indeed, it is one-seventh the size of President Obama’s stimulus the following year, which didn’t have much visible effect. Thus the high oil prices of 2008 might have made the difference between marginal growth and marginal decline, which according to the “butterfly effect” of chaos theory could have caused other larger changes.

However, high oil prices were certainly not sufficient to push an otherwise healthy economy into recession.

What the EIA's World Oil Production Data for 2011 tells us about 2012 (James S.)

The shortfall in oil production relative to what would have been expected based on the 1983-2005 growth pattern amounted to 4.7 million barrels in 2011. This is far more than any country claims as spare capacity. This is no doubt one of the reasons why oil prices are as high they are now. These high oil prices tend to interfere with economic growth of oil importing nations.

The shortfall in growth especially occurred in crude oil. Figure 2, below, shows crude oil production separately from substitutes.

48% of Chicken in Small Sample Has E. Coli (jdargis)

Dr. Doyle emphasized that the findings by the nonprofit group were different from the recent uproar over “pink slime,” the inexpensive filler containing ammonia gas or citric acid that is often added to ground beef products to kill E. coli and other bacteria. “That’s an additive,” he said.

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