This week, I have been mostly reading:

• Bankers, art and tax paranoia driven Ponzi schemes — Richard Murphy: The evidence it is that the vast majority of this art does not end up being displayed on the walls of a home, gallery, office, or anywhere else. Most of it is stored in the vaults of one of the art warehouses in the free ports of the world. […] What is more, this art market, pumped by a continual stream of new clients created by finance houses seeking to advise clients to join the trend, creates not just another asset bubble, but in fact an alternative currency as a mechanism for transferring value. The fact that art can also be stored in tax-free warehouse locations, beyond the reach of even local tax authorities with regard to any form of taxation in the state where it physically resides, just adds to this appeal. Who needs bitcoin to achieve anonymity when a Picasso in a warehouse achieves the same goal without all the risks that cryptocurrency entails?
• The Alcohol and Health Puzzle — Nigel Barber in Psychology Today: Denmark has more drinkers than any other country (95.3 percent women, 97.1 percent men). Despite drinking a lot, Denmark has repeatedly come out at the top of the heap in surveys of happiness. A skeptic might retort that more Danes take the survey while actually intoxicated. Amusing as this explanation is, it seems far-fetched. A more plausible explanation could be that the Danes, like the Irish, spend more time in pubs that play a central role in social networks in these countries. Another source of happiness in Denmark could be the very good quality of life that residents enjoy thanks to their affluence and the well-developed social democracy that minimizes inequality and alienation
• Central Bankers as ‘Dealers of Last Resort’ — Marshall Auerback in Naked Capitalism and elsewhere: A CDS is an instrument used by a buyer of corporate or sovereign debt. It was designed to eliminate possible loss arising from default by the issuer of the bonds. In theory, the swap acts like an insurance policy, the only difference being that (in the words of Mehrling): insurance is “organized as a network of promises to pay in the event that someone else doesn’t pay whereas our own world [the credit default swap] is organized as a network of promises to buy in the event that someone else doesn’t buy.” Of course, as we learned from the AIG fiasco, it becomes impossible to act as a credible writer of insurance, if you don’t have the financial resources to make good on the insurance payment if and when disaster strikes. Unable to make good the insurance payments arising from the swaps, AIG eventually had to be bailed out. By contrast, the Treasury/Federal Reserve (it’s useful to think of them as a unified whole in this instance) is uniquely placed to make the CDS a credible instrument, as it can always create the dollars required to make good the payment in the event of default (or financial accidents). But for the CDS system to work going forward, the Fed (or any other central banker/dealer of last resort) has to “charge” the right premium to reflect the risks being undertaken by the parties who enter into a contract to buy and sell the CDSs. And if that means charging such an extortionate premium that the underlying activity (or event) isn’t undertaken, so much the better for financial stability.
• Young couples 'trapped in car dependency' — Roger Harrabin, BBC environment analyst: Researchers visited more than 20 new housing developments across England in what they say is the first piece of research of its kind. They found that the scramble to build new homes is producing houses next to bypasses and link roads which are too far out of town to walk or cycle, and which lack good local buses. Gosh. Imagine such a thing! Oh, hang on, I don't have to…
• Bizarro — Wayno & Pirarro:
  
• Cesar Sayoc’s Home Was Foreclosed on by Steve Mnuchin’s Bank, Using Dodgy Paperwork — David Dayen at the Intercept, with everything you need to know to understand US politics: It’s highly doubtful Sayoc knew any of this when he allegedly sent bombs through the mail. But it shows how political partisans cannot often assess what forces carry the greatest impact on their lives. A miscreant bank foreclosed on Sayoc. Democrats could have done more to punish that bank and others like it for a mountain of foreclosure-related crimes, but they failed to do so. That created a sense that the system was rigged, providing an opening for a right-wing populist like Trump.
• Forget jobs. Will robots destroy our public services? — Atif Shafique for the RSA: In her groundbreaking but frightening book Automating Inequality, academic Virginia Eubanks examines how in the US advancements in technology - particularly automated decision-making, data mining and predictive analytics - are being used to control the poor and sever their access to public support. The book shows that this is nothing new: it is part of a historical trend stretching back decades. Crucially, Eubanks doesn’t entertain the science fiction notion that the real threat comes from machines outsmarting humans, becoming unaccountable and wreaking havoc as people look on helplessly. Neither is it just a case of human biases unintentionally finding their way into technology, as critics of algorithmic decision-making have cautioned. Instead, some of the worst features of the tech are intentional and baked in from the beginning.
• Why positive thinking won’t get you out of poverty — Farwa Sial and Carolina Alves in openDemocracy: Poverty alleviation, however, is a hugely complex subject that touches on the strengthening of institutions, the health of governance, the structure and dynamics of markets, the workings of social classes, macroeconomic policies, distribution, international integration and many other issues, none of which can be replicated from one context to another. That means that analyses of poverty have to be based on a critical examination of processes and actors that cannot be ‘controlled’ against—thus violating the principle of [Randomised Controlled Trials]. Recent developments in economics have failed to account for these fundamental determinants of poverty. Instead, the success of RCTs can be narrowed down to essentially statistical arguments that seek to identify ‘what works’ and ‘which interventions’ should therefore be employed to improve the lives of the poor. In such processes, the focus tends towards the individual or the household and (initially at least) to the design of small changes that are supposed to enable them to exit poverty, although eventually the ‘scaling up’ of interventions might also occur. Akin to the ‘nudge’ approach that has been popularised by Cass Sunstein and Richard Thaler, the idea is that people’s choices can be shaped to allow them to escape from poverty and dispossession. As a consequence, this approach individualises the ‘problem’ of poverty whilst failing to acknowledge, contextualize, highlight or analyse the structures, institutions and actors that actually make and keep some people poor.
• 'It's Like Amazon, But for Preschool' — Audrey Watters: A year ago, the richest man in the world asked Twitter for suggestions on how he should most efficiently and charitably spend his wealth. And today, Jeff Bezos unveiled a few details about his plans – other than funding space travel, that is. His new philanthropic effort, The Day 1 Fund, will finance two initiatives: the Families Fund will work with existing organizations to address homelessness and hunger; and the Academies fund “will launch an operate a network of high-quality, full-scholarship, Montessori-inspired preschools in underserved communities.” “We’ll use the same set of principles that have driven Amazon,” Bezos wrote in a note posted to Twitter. “Most important among these will be genuine intense customer obsession. The child will be the customer.”
• On “the policy” and the Governor of the Bank of England — Ann Pettifor for Progressive Economy Forum: Mark Carney was appointed by George Osborne in late 2012 in the hope that new blood at the Bank would give both the institution and the economy a boost. His salary was set at a considerably higher rate (at £480,000) than that of predecessor (£305,000) in the hope that he would deliver. Instead he has presided over a period of prolonged stagnation. In his defence, the persistent weakness of the UK economy cannot be attributed to him, or to any single man or woman. The setting of post-crisis policy by the Treasury and the Chancellor; the stubborn insistence on contracting the economy by grinding it down with austerity – these policies were endorsed by Carney, but were not of his design. He never raised any substantial objection to the dysfunctional nature of ‘monetary radicalism and fiscal consolidation’. Instead, he once remarked correctly that the Bank was “the only game in town.” Five years after his appointment, and ten years after Lehman’s bankruptcy, the economy continues to vegetate.