LyrArc Article Gist
Von Mark Schieritz of Germany's Zeit Online describes the changes underway following the election campaigns in the U.S., and France, and the Brexit vote in Britain, all signalling the discontent of people left behind by the tech, capitalism, trade and globalization changes of the last two decades. The appeal of one time fringe politicians using racist slogans and divisive rhetoric to appeal to those left behind, appealing to people lacking intergenerational mobility, and without much hope for a better future, is a serious concern. People who are gullible enough, lack college education, or racially isolated so that they are not likely to look carefully at what is being offered in terms of programs and change of competing parties, and likely to overlook the hard and difficult road for corrective course of action, because of anger and pentup fears. Schieritz cites as part of this change the unanimously approved conclusion in its final declaration at the G-20 meeting in Chengdu, China- "The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness." Yet this can be a sort of "too little, too late."  Bankers who are cited in an email going around Wall Street lack credibility with groups on Main Street, to people adversely affected by tech, trade and globalization changes that have been persistently ignored for over a decade, close to two decades. More convincing is the tone of Theresa May, the British prime minister's first statement outside 10 Downing Street- who spoke of the "burning injustices" and her determination to make this a top priority of her government. Still more convincing are the programs to invest $275 billion over 10 years in infrastructure put forward by the leading candidate in the U.S. presidential election of 2016, to provide easier access to public universities and colleges to those left behind, as a sure way to create new jobs and address intergenerational mobility. In fact every leading candidate had made the loss of upward mobility their central plank already in 2015, long before Trump and Sanders started their campaign. The real hope lies in western leaders Merkel, May, and Clinton, all keenly aware students of changes, all women by the way who have sensed the injustice and have the ability to come up with something new and promising for the future, after learning the lessons of the past. ...

LyrArc Article Gist
An account of ECB chairman Mario Draghi's efforts to overcome the opposition of the Bundesbank to unlimited bond purchases by the ECB of sovereign bonds to reduce borrowing rates of Italy and Spain. Draghi argued that it was within the mandate of the ECB because of irrational fears in bond markets that were creating excessive rates for bond yields and not normal behaviour of capital markets, and therefore within the ECB's mandate to maintain financial stability and protect the euro currency. This was supported by finance minister Schauble and German chancellor Merkel over opposition of the Bundesbank and German media on July 23, 2012, when Draghi said of his determination to protect Spain and Italy from excessive yields and of the ECB action: "believe me it will be enough."

LyrArc Article Gist
Alexis Tsipras, leader of Syriza, Greece's second largest party, is interviewed by WSJ's Bret Stephens. Tsipras describes the problems inside Greece. He describes the bribery in healthcare, tax evasion, burden of taxes on the middle class and honest citizens, a large and inefficient bureaucracy. In its current state Greece would build up debt and deficits all over again if the debts were forgiven tomorrow, says Tsipras. He is for Greece remaining in the eurozone. Tsipras understands the problems Germans have with putting money into Greece with the current state of economic management and lack of conscience of its elite, and why they see this as not fair. He suggests as a model for solving the Greece debt crisis, the London Conference of 1953 forgiving half of Germany's debts and putting the rest on a 30 year scheduled repayment. This would have to come with results in cutting bureaucracy, reducing corruption, and efficient tax collection for Greece democracy to work.

LyrArc Article Gist
As expected Iran boycotts the talks in Doha of 16 major oil producers seeking to stabilize oil prices. Saudi Arabia, Russia, Qatar and Venezuela sought to stabilize oil production at January levels to support oil prices. Wth the Saudia and Russia producing all out, Iran seeks to do the same, effectively closing the door on any agreement to freeze production levels.

LyrArc Article Gist
The MIT Economics Department helped shape the thinking of influential central bank governors, Mervyn King of the Bank of England, Ben Bernanke of the U.S. Federal Reserve, and Mario Draghi of the European Central Bank. Bernanke (1979) and Draghi (1977) received their Ph.D.s in economics from MIT in the late 1970's, with Prof. Stanley Fischer (1973-94) as their advisor. Charles Bean, deputy governor of the Bank of England followed them a few years later. Mervyn King was a visiting professor at MIT (1983-84). King and Bernanke shared an office as professors at MIT. The MIT school came up with a pragmatic and activist approach which argued there was a role for government when markets and the economy stumbled. This followed a period when economists from the universities at Chicago, Minnesota and Rochester were influential, making the case for efficient markets and businesses holding rational future expectations which were ahead of government planners; saying government should play a minimal role. The MIT trained central bankers have made shaping public and market expectations an important part of policy actions. Draghi's July 23, 2012 remark- "Believe me this will be enough," was an effort to shape expectations after the European Central Bank's July 2012 bond buying actions in the eurozone. Germany has a competing version based in Bonn. Germany's former Bundesbank president, Axel Weber, was the tutor at Bonn University for current Bundesbank president, Jens Weidmann. Both Weber and Weidmann supported austerity measures, inflation fighting efforts of former ECB head Claude Trichet, and opposed Draghi's monetary easing and bond buying efforts to reduce excessive yields of Italy and Spain....

LyrArc Article Gist
How will countries like India generate jobs when technology enables manufacturing and other activity to do work with fewer and fewer people. Even Hon Hai in China is shifting work to robots. Technological progress is leaving more people unemployed and widening income gaps with the benefits going to a few people, says the Economist in this research based essay. It will require carefully managed governance to invest in infrastructure, raise skills of less skilled workers through education, and wage subsidies for those left behind to ensure our current system works in the future.

LyrArc Article Gist
Krugman points to the connection between the failure to achieve debt reduction through debt forgiveness and the sluggish economic growth in the eurozone and U.S., five years after the global banking and financial crisis of 2009 and four years after the beginning of the eurozone debt crisis in 2010. In the U.S. debt reduction for homeowners was delayed with a wave of foreclosures, and in Europe austerity budgets were the norm as Germany pushed hard for austerity policies. In 2014 small relaxation of austerity to give relief to voters took place in Greece, France, Italy and Spain, with austerity budgets still in place. Growth also slowed in Germany to slight contraction in the third quarter and no growth in the fourth quarter of 2014. This is leading to the formulation of new policy to address growth challenges in the eurozone. Debt to GDP is growing in eurozone countries and Britain because of lack of growth, even though spending cuts have been made, showing the need for rethinking policy. ...

LyrArc Article Gist
How Obama's new selection for Fed governor, Daniel Tarullo- who taught banking law at Georgetown University- is shaking things up at the Fed. He is in charge of regulation of the banking system at the Fed. He has instituted a review of bank review practices and supervision at all of the regional Federal Reserve banks. With many banks failures in the south, the Atlanta Fed came in for serious review, and regulators from outside the area were sent to the Atlanta Fed. Tarullo did not hesitate to make new appointments for serious oversight, as regulators had simply become lax. Tarullo has brough in economists to take a fresh look at how the banking system would perform in the event of another crisis, and what action needs to be taken. This compares to individual bank examiners having alimited perspective what damage the overall banking system could do with lax regulation. He has also asked the Fed regulatory staff to look closely and hard at the troubled commercial real estate loans and toughen regulatory measures. Welcome and overdue as this is, in another banking crisis this could be too little too late. Congress has weakened regulatory reforms proposed by the Obama administration, and the Obama administration itself has not the will to address the tough issues raised by the banking crisis. Both have buckled under pressure from the lobbying of the banking industry, and the close connections between some banking executives and the administration. This has raised the level of urgency felt by Tarullo, Volcker, Mervyn King and some in the financial industry itself, with the issue of "too big to fail" and breaking up the larger banks into smaller ones, moving to the top of everyone's agenda. With the simple fact that if banks were "too big to fail" before the crisis, then they are much bigger now, and the question of what action must be taken shoved aside as too big to tackle....

LyrArc Article Gist
A number of issues came up at the Women20 Summit in Berlin. Annette Niederfranke, Director of the International Labor Organization, brought up the issue of family reconciliation as "one of the toughest challenges for working women worldwide," that in order to meet obligations women tended to work in "non standard forms of employment and in part time work linked to lower wages, lower social security, lower benefits, and fewer training possibilities." Childcare was also an issue that was prominent considering the lack of adequate childcare in many countries including in the European Union. With responsibilities for the elderly, babies, and small children women tend to be in the workforce for shorter periods leading to men taking up many of the higher positions. Angela Merkel pointed out that Gemany tended to take a narrow view of professions available to girls, saying- "So it is very very important that we take a broader view of things while girls are still at school." Merkel also supports a Africa compact that would help women set up small and middle size businesses in poor countries. The "Digital" aspects of this and other efforts for women were a major topic being discussed. One idea that came up was that more cooperation from men was needed to make things happen. This is the third Women20 Summit after ones in Turkey and China, and a sense of momentum was felt by women. ...

LyrArc Article Gist
Former U.S. president Bush says the U.S. has an important role as a beacon of freedom, human rights and democracy in the world. The U.S. should not shrink from the challenges in the name of a false and temporary stability, and flexibility should not mean ambiguity, difficulties should not mean shrugging away from America's role. Patience, creativity and active American leadership are needed. The Bush administration supported the struggles of people in central Europe and in other countries. This is from a speech Bush gave at the Bush Institute, Southern Methodist University in Dallas, a year into the Arab Spring. A speech that was giving voice to the aspirations of people in the Arab world.

LyrArc Article Gist
Van Dam says its not that great being a worker in the U.S. because it is hard for the unemployed resulting from competing with workers in other countries with lower wages, and for those who are unemployed harder because worker collective bargaining is weakened over 3 decades. He cites a 296 page OECD report showing very little government support for unemployed and at risk American workers. It says this has contributed to higher income inequality and larger share of lower income people than almost any other advanced a nation. Only Spain and Greece are shown as having more households earning less than half the median income- showing large numbers of people are poor or close to being poor. In the U.S. an average of 1 in 5 lose their jobs each year, and 23% of workers 15 to 64 are in their job less than a year in 2016. The job churn hurts workers because of firing and layoffs being frequent, more than is healthy for a economy. The U.S. and Mexico are the only two countries not requiring advance notice before firings. And fewer than half of workers find a job within a year in the U.S. Two in three families with a displaced worker fall in poverty for some time. Unemployed workers with typically 26 weeks support get less support than any other country in the study. Only 12% of workers in U.S. are covered by collective bargaining. ...

LyrArc Article Gist
The yuan is up 5.5% since the peg to the dollar ended in 2010, reaching 6.469 to the dollar. But this is not helping the U.S. trade deficit. The U.S. Bureau of Labor Statistics shows the price of imports from China are up 2.8% in May over the same month prior year. And the trade surplus for China in the first four months of 2011 is higher than the same period in 2010. What is happening? The improvements in productivity of Chinese manufacturers and the acceptance of lower margins is reducing the effects on trade balance of a small appreciation of the yuan, so that only a fraction of that appreciation is showing up in higher prices for Chinese goods. Also significant is that the yuan's small appreciation against the dollar is not enough to make up for the dollar's fall against other currencies. The yuan is down 8.3% against the euro and has actually declined 3.7% on a trade weighted basis in the last year.

LyrArc Article Gist
CNN reporter Cassie Spodak provides this exceptional report into the minds of New Hampshire Democratic voters who gave Bernie Sanders a 22 percent lead in the New Hampshire Democratic primary over Hillary Clinton. In October 2016 Hillary Clinton has the support of Bernie Sanders against Donald Trump in the U.S. presidential election. She described it as "100 percent support" in television debate. Sanders has appeared with Clinton twice, and campaigned 4 times in New Hampshire, and continually across the country. Younger New Hampshire voters still long for Sanders as their favored candidate. Older voters and some who have been motivated by Sanders to run for local office see the shaping of the Democratic Party platform as a victory for Sanders. Key planks of Sanders, taxes on the wealthy and higher incomes to pay for student tuition, infrastructure, and helping working class families, are now key parts of the Democratic platform. These voters see this as a pragmatic step and are enthusiastic in their support for Hillary Clinton. Overall Clinton now has 87 percent of Democratic voter support in New Hampshire according to a WMUR/UNH poll in mid October 2016, and she is doing well with millenials and independents nationally, a critical bloc of voters for Clinton to show nationwide support. One member of the steering committee for Sanders in New Hampshire named Dudley Dudley, reflects the opinion that has shifted the party to emerge united during and even more so in the final months of the presidential campaign of 2016- she tells the CNN reporter Spodak that she supports Hillary because "of the way she has grown, and stretched," and the way Clinton and Sanders are now campaigning together and working together. Both Clinton and Sanders deserve credit for their extraordinary ability to grow during their campaigns and during the party's way to shape the way forward. ...

LyrArc Article Gist
In its May 2011 special report on international banking the Economist points out the need for banking regulators to take stronger action than they have so far. What it calls "pre-emptive insurance" it says is needed - stronger regulation, larger capital cushions, and some form of separation of different kinds of banking. Without this the dangers of excessive risk taking and banks that are "too big to fail" will continue to threaten the world's economy. Banks that are smaller and better capitalized says the Economist can fail more gracefully than the large mega banks that exist at this time. In fact the banks today in the U.S. are larger than at the time of the 2008 crisis. Other analysts also point to the lack of major changes in banking and financial structures today compared to the situation before the 2008 crisis, both in Europe and the U.S.

LyrArc Article Gist
A shift in priorities away from focussing on high growth to lower sustainable growth was announced by China's premier Wen Jiabao at the National People's Congress, China's parliament, in March 2012. This shift will reduce investment in infrastructure, power generation and exports, which will affect the level of imports of commodities from commodity producing nations in the Middle East, Australia, Canada and Brazil. It should increase imports of software, computers, entertainment, tourism and high tech goods from the U.S. and Europe. Chinese leaders have said they would make this kind of shift for some years now but growth has consistently increased more than the target rate, and domestic consumption as a percentage of the economy has actually decreased in the last decade. Now 9-10% growth rates may be a thing of the past and the target of 7.5% set this year may be actually closer to the real figure. The Chinese leaders have belatedly realized the need to make these changes now because slowing markets in Europe -which is seeing declining growth and high unemployment- and in the U.S., make the issue impossible to avoid. Wen told the Congress: "Accelerating the transformation of the pattern of economc development... is both a long term task and our most pressing task at present... Domestically it has become more urgent but also more difficult... to alleviate the problem of unbalanced, uncoordinated and unsustainable development." This is his way of saying that its unavoidable and better to start in earnest now, and at the same time recognizing the resistance to change from the stateowned companies and the other interests who have benefitted from surging growth, and now occupy a central role in the power structure. An opinion article in the People's Daily, China's official newspaper, said: "imperfect reforms are to be preferred to a crisis caused by no reforms." The World Bank's president Zoellick is respected by the Chinese leaders. He also urged them to make changes now. The recent report of the DRC, China's planning research arm, and the World Bank, also laid out the new direction away from a focus on infrastructure to domestic consumption. The fear is sudden deceleration in the absence of policy action. The impact of this will be negative for commodities over time, leading to slower growth in Australia, Brazil, and Canada. It should boost imports from Europe and the U.S. of high tech, consumer, pharmaceutical goods over time....