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Only 78 years ago a 4 year old boy Eiji Kishida became in seconds a tangled burnt mass of flesh a mile away from where the atomic bomb fell on Hiroshima. It is his second cousin once removed that is meeting leaders of the G7 countries in the same place. It will come as a surprise to know that this is Fumio Kishida the prime minister of Japan. Peter Landers and Chieko Tsuneoka tell this incredible story. Setsuko Thurlow 91 years now living in Canada is the aunt of the boy who saw him just before he died. She was at the army office in Hiroshima which itself was buried in rubble. Mr. Kishida represents Hiroshima in parliament and wrote a book in 2020 about the little 4 year old boy Eiji and the devastation that is seen in a town destroyed by a nuclear bomb. Lyrarc.com supports Mr. Kishida's ideas and vision. First Japan, then China and India have gone through the phase of resisting and overcoming colonial powers. During the phase the influence of Vedanta and Buddhism was eroded, but this does not have to be so, Communism will pass away now that it has done its job of securing for the Chinese people scientific advance and modernization. All three nations are united by the shared links of Vedanta and Buddhism which provide the guiding light for a world that not only turns away from nuclear weapons but away from the wars and conflicts of the period of colonial powers advances of the 18th, 19th and 20th century. To Mr. Kishida's "idealism" we say it is a reality that is within reach. And we remind the world of the Buddha's own words in the Paranibbana Sutta: "But when the blessed One came to the river Ganges, it was full to the brim, so that crows could drink from it. And some people went in search of a boat or a float, while others tied up a raft so they could get across. But the Blessed One as quickly as a strong man might stretch out his bent arm or draw in his outstretched arm vanished from this side of the Ganges, and came to stand on the yonder side." "And the Blessed One saw the people who desired to cross searching for a boat or a float while others were binding rafts. And the Blessed One seeing them thus gave this solemn utterance: They who have bridged the ocean vast.                                       Leaving the lowlands far behind       While others still their rafts bind,     Are saved by wisdom   unsurpassed."     ...

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As the Obama administration plans a large stimulus spending plan that may approach $1 trillion over several years, considering also the second phase of the $800 billion first phase stimulus, there is a concern that there may be wasteful spending and social costs of borrowing and spending by the government of such proportions. In economics jargon this hinges on whether there is amultiplier effect of spending, higher if its efficiently and well spent with less impact on private consumption and investment, and lower if the opposite were true. The assumption behind amultiplier of 1.0 for an additional bridge or road is that resources like manpower and capital that would be otherwise idle are deployed to produce something useful. An increase in one unit of government purchases increases by one unit the real gross domestic product. The government has effectively created the additional bridge or road without a cut in anybody's consumption or a businesses investment. The other contrasting approaches are to say there is a multiplier of zero, meaning there is a social cost in two ways. One the reduction of consumption and the crowding out of businesses investing in new products and technologies for example, and second in the inefficent use of resources if a government bureaucracy is put to work allocating money and the additional dangers of favoritism and corruption. To say that there is a multipier of 1.5 would mean that the government figures out a way to get private investment through conversion of plants for automotive parts say to make wind turbine blades by giving incentives, tax benefits and grants, spends on a dilapidated road and public transportation infrastructure that may provide benefits in increased growth capacity over future years. The limits of a government bureaucracy and inefficiency of government would in this case be addressed by transparency rules adopted and measures that track progress that are freely available to all citizens say on a website on the internet, and by bringing in fresh management talent from the private sector. There appears to be no generalization that can be applied for one multiplier for all projects. It may be that the multiplier will vary with the project. Some projects like the conversion of a factory making unneeded auto parts to a badly needed wind energy part, to change the dynamics of energy market pricing, to meet energy needs and cut emissions, may end up having a multiplier much above 1.0. A redundant or less needed bridge has a lower multiplier than a bridge rebuilt before it leads to breakdown. And also the complication that too large a movement in one direction say of stimulus spending, might result in a shift of the curve towards a smaller multiplier and diminishing returns, as the resources to track such a large expenditure and the talent to adminster are overextended. The social cost of private investment not making that investment in new technology, new product or improved product has to be figured into all this, both at the conceptual level as all costs and benefits may not be picked up in the analysis, and at the macro level keeping in mind that the animal spirits, as they were once described, may just not be there to absorb the huge outlays which a government can make. These do not come without an opportunity cost and borrowing costs. All this leads one to to conclude that spending has to be carefully evaluated and projects assessed on a case by case basis for costs and benefits. The spending has to be balanced to provide just as many incentives for private investment to invest in new products and technologies. One way the Obama team is attempting to address this is to include a $300 billion tax cut for businesses and individuals. The business tax cuts are aimed at helping small business with losses, and for future investments and making hires and forgoing layoffs. The other part relates to careful evaluation of spending projects and transparency so the people can see if they are effective. See the link to this....

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Bill Keller describes the diversity of news sources available today from the BBC and Guardian websites to Al Jazeera and websites of other foreign news organizations. Radio stations are another source. Yet this diversity exists with one troubling factor- the decline in foreign news bureaus and experienced journalists covering events in distant locations. As a result many of the important foreign events are now covered by free lance journalists who take many risks and are still underpaid. Without experienced journalists it becomes more difficult to sort out the good information from the bad or poorly researched, and the average reader facing a glut of information or misinformation is faced with the prospect of being as uninformed as before or worse misinformed. Keller gives the example of NYT's journalist C. J. Chivers who carefully researched information from a UN report- compass bearings for two chemical rockets- to show that the chemical weapons attack in Syria originated with the Assad military forces in Damascus. This was after much of the media went with the stories spread by different sources that there were doubts about who was responsible. Unusual and cause for concern is that many governments around the world may have found the ambiguity useful by taking off some of the moral pressure for action, of having to intervene so soon after the Bush invasion of Iraq....

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German perceptions of Mikhail Gorbachev are shown here in DW.com. He is revered in Germany because of Gorbachev's efforts to end Soviet rule in East German state called the GDR, leading to the fall of the Berlin Wall. Gorbachev supported German reunification but did not do this is in a way that ensured that ordinary Russians and citizens of the GDR could make the transition to democratic processes in a smooth way. He also failed to grasp that economic transition could be difficult and would require extensive aid and grants from the west, and that safeguards and protections for retired pensioners and vulnerable sections of society needed to be in place. The following is a reflection of the background in political government and economy of the events in Europe leading to the war in Ukraine.  As a result Gorbachev's instincts were right by first 1956 as a student, and then 1979 as government official about the need for democratic processes to realize the real potential of Russia, just as has happened in many countries that lacked these processes for change in government- Japan, Germany, South Korea, India, Brazil and many countries in Asia and Latin America. But not realizing that these countries made the transition with considerable American and British assistance. Even where there was no direct assistance indirectly the British setup the first limited Swaraj or free rule in India, with elections and elected assemblies in Indian states in the 1930's, following the pattern in Dominion states Australia and Canada. Mohandas Gandhi negotiated within these processes for rights of South African Indians and Colored people, gaining experience, including study of British law.  A son of poor farmers in the agricultural region of North Caucasus, in Stavropol, it is relevant today that his maternal grand parents were from Chernihiv in Ukraine. He came to power in 1980 after entering the Politburo that year. These were the waning years of Leonid Brezhnev, president of the Soviet Union who followed Nikita Khrushchev (1953- 1964). Khrushchev was from eastern Ukrainian region near Donetsk. Leonid Brezhnev was a protege of Krushchev since 1931, from Kamianske, Ukraine.   Gorbachev was influenced by Khrushchev's speech that denounced Stalin in 1956 in favor of a freer and more open society. Khrushchev, became first secretary of the Communist party in 1953 after the death of Stalin and set the pace of post war Soviet society from 1950 to 1964. He removed the fear of the dictatorship of the proleteriat working class, increasingly dictatorial under Lenin, and blatantly arbitrary under his successor to make Soviet Union a freer society.  Yet his tendency to make decisions on his own without consulting others, and the failure of agriculture in the Soviet Union including food shortages led to his replacement by his protege Brezhnev. Brezhnev's whole career was built under Krushchev in Ukraine, in the army in Ukraine, and as a political leader in the Soviet 18th Army that entered Prague in 1945 defeating the Nazis. Why is this relevant? Gorbachev was educated at Moscow State University when the Soviet Union was in the Sputnik era, and felt at the time that it could reach the 1950's standard of living in the US- very different from the earlier leaders. Yet he may have been too much of an optimist and not hands on in understanding the working of a modern economy as large as Russia and the interests of different groups of society that had to be be balanced and protected. His understanding of the US and of how the US and British economies had evolved was limited or nonexistent. The isolation of the Soviet period may have compounded this. The Russian state in the Soviet Union could not simply unwind the power of the state and its intervention and everything would come out right of its own accord.   Leonid Brezhnev, the Ukrainian Russian who succeeded Krushchev from 1964 to 1979 let the system of Soviet rule remain as it was, in the Great Stagnation, leading to lethargy, lack of innovation, and a weak economy with military expansion. Gorbachev tried to regenerate the system by opening it up, but failed to see that there was a risk that it could come apart quickly as it did in just 4 years after he became president in 1985. Only the centralized power of the state had kept the Russian state together from the Tsarist period through the Communist period. The risks of this Gorbachev failed to grasp. What if it happened too quickly without a safety net for the people who could not make the transition. What lawlessness and failure of the rule of law could happen. The US and Britain had evolved their democracies over centuries. Wars were fought in the US and Britain over rights and responsibilities of kings and parliaments. In the US Lincoln fought the civil war not just for emancipation but to ensure safeguards for free white men on the farms so that Labor did not get disabilities placed on them by Capital (entrenched forces of Capital of which the southern plantation economy was only one aspect.)  Japan and Germany were set up as democratic states through American power and constitutional frameworks with Marshall Plans or agreement to take in unlimited imports from Japan. This bad scenario happened in Russia because Gorbachev failed to set the conditions first and work patiently to achieve them including introducing limited  elections and parliamentary processes first in Russia.  Leaders such as Yeltsin who succeeded Gorbachev in 1989, winning the elections that followed, failed to provide a safety net for the vulnerable in the 1980's. Unemployment increased rapidly, life expectancy dropped in Russia, and the economy failed in the early years after 1980. A Marshall Plan like that offered to Germany could have helped but Gorbachev's failure may have been his failure to provide this transition by arranging for West Germany and the US to support a planned transition, a kind of Marshall Plan of Aid, and maintaining a gradual move to democracy as the country was given time to learn institutions of American and British parliamentary democracy. No such Marshall Plan was negotiated for a smooth transition over inevitable obstacles, no safeguards were put in place for illegal efforts to control the state by rogue elements and to seize assets of state companies, no efforts to first introduce limited elections and parliamentary processes for learning democratic process in Russia, and the people of Russia were left with a memory of the this period as a bad lawless period from 1989 to 2005.  Leading to the situation today under Putin of aspiring to the Soviet period as a kind of period that had offered Russia the world recognition it had lost. And this had happened even though the Russian economy had recovered and the standard of living had risen under Putin. Putin's career spanned the period as a Russian official in Dresden, Germany Democratic Republic or Soviet period East Germany to working in the St Petersburg City Council under Yeltsin. He personally witnessed the fall of the Berlin Wall and the fall of the German Democratic Republic from Dresden and Gorbachev's refusal to build a transition period for the changes so that it would not be traumatic for the GDR. Even after reunification these traumas remain in some segments of the older population in East Germany that saw themselves as neglected and support extreme right wing parties in eastern German states by 2020- considering the Soviet period as one in which their lives were less neglected.  After three terms as president Putin with his own traumas from that period in Dresden, and with a mother lost in the period after the Nazi invasion of Russia, a father who survived the Battle of Stalingrad, saw the period of lawless behaviour in the collapse of the Soviet Union as the"greatest geopolitical disaster of the century."  Putin and people around him made missteps and miscalculations launching a war in Ukraine, leading to the situation today- jeopardizing hard won gains for the Russian economy. By 2022 Russian standards of living had risen and the economy was in the best shape it had been in the modern period since the Industrial Revolution. Yet largely exposed because of the dependence on oil and gas during a period of climate change and focus on building future economies free of fossil fuels.  Putin in his own peculiar logic may have seen this as the only opportunity in 2022 before deliinking from fossil fuel reduced the importance of the Russian fuel dependent economy to make some territorial readjusments in Ukraine with a quick war taking Kviv. That turned into a massive miscalculation with the emergence of nationalist fervor in western Ukraine spreading to the whole country of 40 million people. In the future to 2030 with phasing out of the fossil fuel economy, Russia without the connections to the US and European Union's technology and resources it had during Putin's three terms, and facing strict sanctions from US and EU, faces a difficult future. This has cautionary lessons for all countries- the US that read too much into the fall of the Berlin wall and indulged in a losing proposition with free markets that damaged its infrastructure and manufacturing with shifts to China, China understanding of how it to was dependent on the world economy for its future development, India that had to navigate a difficult period and what lessons to draw for building a bigger economy, the EU realizing the failure of its policies of depending on Russia for energy and China for manufacturing with fragile supply chains,  and Russia that there were twists and turns and the need for safeguards and experience building democratic processes before these processes would work for the economy, its people and for Russia as a nation. ...

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Shipping and freight statistics show an increase of shipments from Mexico. Trains and truck shipments from Mexico to the U.S. increased by 8.7% by weight in the first 11 months of 2011 compared to the prior year. By comparison shipping containers entering the ports of Los Angeles and Long Beach went down by 0.2% in 2011. Mexico stands to benefit from the shift in dynamics as manufacturing costs in China increase with labor constraints, higher wages, higher commercial land prices and recent Asian supply chain issues making firms wary of unanticipated problems. This is expected to benefit the U.S. with the return of some manufacturig jobs and a serious rethink of outsourcing. Because of highly automated factories and advanced technologies the manufacturing process requires fewer and more skilled operators, reducing the labor component of costs. Carlisle Companies CEO, David Roberts says he is expanding tire manufacturing plants in Tennessee. He says he can make tires as cheaply or cheaper in the U.S than in China. This has serious implications as the U.S. gets down to rebuilding and renewal of its manufacturing industry....

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The Italian comedy movie "Quo Vado," became a hit in Italy in 2016, premiering on Jan. 1. It tells the story of a government clerk played by Checco Zalone, whose only aspiration in life is a 9 to 5 government job for life. It lets Italians laugh at the past in a Italy that is changing. Today, the Turin newspaper La Stampa points out from its survey, two of three Italians would take some risk if it means career advancement. Yet public sector job protections remain firmly in place even as the private sector is changing rapidly not just in Italy but in Spain and other parts of the European Union.

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Much of what is written here about Xi Jinping pursuing Chinese socialist vision was known since he became president in 2013 when China's Communist party was losing its appeal, and efforts were made to seize power within the communist party by a leader in the western province of Chongqing. Bo Xi Lai attempted to take advantage of the situation with appeals to the working class and without any genuine commitment beyond a power grab. It was well known that Xi Jinping is a son of one of the veterans of the Communist party under Mao, Xi Zhongxun, unlike leaders who followed premier Deng Xiaoping such as Jiang Zemin. Zemin was a relatively unknown figure who was in university during the crucial period of 1947-49 when Mao came to power in mainland China. It would not be correct to say that little was known about Xi's own ideas about socialism as the long term answer to China's problems. Xi also came in as president at a time when the Communist party was losing its appeal to working class people after three administrations that followed premier Den Xiaoping. These three administrations followed a form of state capitalism that allowed companies to pollute the environment, compete without any regulations, and allowed to operate without any controls as long as they pursued growth aggressively and expanded the economy.There was an effort by Communist party regional leader in western Chinese province of Chongqing, Bo Xi Lai, to use this as an opportunity to grab power in China. During his first year as president Xi had to resolve this issue by having a court trial after revelations of corruption and misuse of power by Bo Xi Lai.  Xi's father Zhongxun's role in the revolutionary movement offers clues to Xi's own convictions and faith in the party. Zhongxun was a communist soldier who set up the revolutionary base areas in Shanxi-Gansu northwest border region of China that provided a refuge for Mao's army following the Long March. Other clues come from Zhongxun's role as head of propaganda during the period after 1944 and in 1952. Xi's family background particularly on his mother's side shows a fervent commitment to Chinese socialist vision during the chaotic years when the Japanese invaded China and Chiang Kai-Shek's nationalist forces failed to defend China's sovereignty. One reason Xi has been less understood is that little attention is paid to Xi's mother, Qi Xin who was highly educated and fervently believed in Chinese socialism and nationalist spirit during the Japanese invasion in 1938. In fact Qi Xin had to leave middle school after the Japanese took over Beijing. She joined the Counter Japanese Political and Military University to continue education and in 1941 attended the Central Party school. She met Xi's father Zhongxun in 1944. In 1953 she enrolled in the Marx School of Communism, and it was her position at the school that offered her husband added protection during the Cultural Revolution that affected Deng Xiaoping and others. With such a history in the 1930's, 1940's, and 1950's it is likely that Xi was profoundly influenced by his father's role in the revolutionary movement, and his mother's faith in socialism with national spirit as the way to protect against the foreign invasions. It would now appear that by the time Xi joined the Politburo in 2003 there was no question about the future course China would take given the role of his parents, and the events of 1938 the fall of Beijing, his mother having to flee, and the events that followed. Xi showed resilience during the period of the Great Proletarian Revolution when he was sent to the villages at a time when he would be studying in school and college. He was sent to an agricultural commune in largely rural Shanxi province where he worked as a manual laborer alongside other people and developed a relationship with the local farmers. Unlike other leaders during that period which could even be said about premier Deng Xiaoping in 1989, Xi took a different lesson from this experience largely because his father and mother were committed to the socialist vision for the long run. His father was still not fully rehabilitated by premier Chou en-lai when Xi was allowed to enter Beijing's Tsinghua University in 1975. He studied chemical engineering at Tsinghua graduating in 1979. Upon graduation he worked as a assistant for 3 years to a vice premier who was minister of defense. He then left Beijing for Hebei province to work as a deputy secretary of the provincial CCP. He was made Mayor of Xiamen, then governor of Fujian province in 1999 where he tackled environmental conservation before moving to Zheziang province. His father passed away in 2002 and it would appear that he was carefully trained in different provinces instead of staying in Beijing, for a position of national leadership. Xi got his break in 2007 when the upper leadership of Shanghai city was tainted in a wide ranging pension fund scheme. He was made party secretary for Shanghai. This was the position Jiang Zemin had held before he succeeded premier Deng Xiaoping. In only a few months in October 2007 Xi was made one of the 8 Politburo members, ready to succeed Hu Jintao as president. Xi's perception of being sent to the villages and making it to university education was that it was part of the long run socialist struggle, with pain that his father had also endured as simply a phase in which things would be right in the end. Xi's mother comes across as a resilient figure and one who had herself gone through the struggles of the 1930's and aided her husband on one occasion. Some of this resilience could have been passed on to the son. Xi's wife is a zealous participant in Chinese dance and music performances that created enthusiasm for the Chinese socialist revolution from the 1930's period. In his conversations  with colleagues in the party, in culture and temperament, Xi has been forthright about this background and his style of work.  Xi is unlike premier Deng and the presidents who succeeded him such as Hu Jintao mentored by a former mayor of Shanghai Jiang Zemin who came to power in 1989. Xi is more in line with the leaders around Mao like his father in his outlook and thinking, with a cautious temperament that comes from years going through ups and downs of political struggles. He is once said to have responded with dismay about being in a top position in the government knowing how precarious this had been for his father. The education at Tsinghua, his engineering background, and his easy familiarity with farmers in the provinces, mean that he understands China and its history well enough to have the confidence to shape Chinese policies in a way that none of his predecessors had except Mao, premier Chou-en-lai, Liu Shao Chi and a few veterans from that time in the 1930's. That Xi waited patiently for so long to gradually assert his ideas about socialist vision for China may be the surprising part of his behaviour till 2021.  It may be that he wanted to make the changes only after he could persuade party leaders and colleagues of his vision and long run goals. And because the Chinese economy had grown so large that it would take time to steer the ship in a different direction for the long term. In most of the negotiations with president Trump he cautiously let trade negotiators handle the situation, all the time learning about how to tackle problems of China's relationship with US and Europe. US president Biden also has a vision that is veering towards a socialist perspective in terms of bringing gains of progress to workers and families. So does Mr. Trump, Mr. Boris Johnson in UK, and Social Democrat's Scholz in Germany. It is both economic and political as Mr. Xi is quoted as saying in this WSJ report. The necessities of such action are both economic, social and politically driven as capitalism has veered way off course.  In this report it is mentioned that Soho China 40% stake was taken by a large capital markets firm in New York in the hope of large gains, as Soho China developer was a tycoon who wanted to leave China. Seeing it as not favorable to his company following events in Hong Kong. This behaviour of capital markets groups in New York and tech companies in Silicon Valley, driven by profits and not aware of the social and economic problems of working class American families is a problem in the US and in Europe. It is also what has driven so many large tech companies to expand manufacturing operations in China, that hurt US manufacturing capabilities and American workers jobs- an issue raised by president Trump and taken up by president Biden. Biden has already moved to make Intel Corporation change its plans and invest in American manufacturing technologies in a quietly implemented U turn. US president Biden is left with the unenviable job of solving this huge problem during the pandemic. He has also committed to a somewhat socialistic vision with a $3.5 trillion plan for workers and families, as has vice chancellor Scholz in Germany with his own version of programs, after the failures of unregulated forms of capitalism. Scholz goes so far as to say his mission is to show that there is really no such thing as a self-made man, that it is help from society, his fellow citizens, and government, that makes it possible for him to do his work. In a sense the world is shifting away from Reagan forms of capitalism without regulation after seeing disastrous results during the pandemic. Not just China. Some form of government guidance and regulations are now seen as essential in China, the US, UK, Germany and India for a better society and a better, healthier life, and for opportunity for all in each country.   ...

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Ford CEO, Alan Mulally, says the electric battery in the newly designed Ford Focus EV electric car costs about $12,000 to $15,000. The car price is $39,200. The similiar gasoline powered car price is about $22,000. This car has a 23 hour kilowatt hour battery pack. Based on this information the cost is $522- $650 per kilwatt hour. The U.S. Department of Energy has set a goal reaching $300 per kilowatt hour by 2013, as it funds new electric car development in the U.S. The Ford Focus EV is directly competing against the Nissan Leaf. The Leaf starts at $35,200, with a range of 73 miles on a full charge compared to 76 for the Focus EV. The Focus can be recharged in three and half hours using a 240 volt charger, compared to 7 hours for the Leaf. What the battery cost tells us is that the electric car development has to bring costs down rapidly for electric cars to become price competitive.

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Moody's Investor's Service downgrades China's credit rating to A1 from Aa3. Moody's predicts a slowdown in growth for China. GDP growth for 1st quarter 2017 was 6.9%. Total debt has grown from 149% of gross domestic product in 2008, to 213% in 2013, and is now 253%, according to JP Morgan. The problem is that ever higher levels of credit have supported growth and more of this is coming from the shadow banking sector. Higher levels of debt in future years from the already high levels will weigh heavily on growth, leading to an eventual slowdown in the economy's growth rate.

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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....

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Spain's central bank was lauded for macroprudential supervision before the housing bubble burst. Will China's central bank and financial authorites which have managed the housing bubble upto this point face similiar problems? Can China be the sole exception even as housing bubbles burst with wide repercussions in the U.S., UK and Spain? Nicholas Lardy, of the Peterson Institute of international Economics, says urban housing stock makes up 41% of Chinese household wealth in 2011. The same figure for the U.S. is 26%. Chinese buyers invest in homes because low interest rates on savings accounts cannot keep up with inflation. Real estate investment was 13% of GDP in 2011. Home ownership is a recent development in China, only since 1990, Chinese have never experienced large price declines. Household debt as a percentage of disposable income has increased significantly in recent years, up to 53.6% in 2011 from 31.3% in 2008, according to Lardy.

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A recent book "The Spirit Level" has become popular in Britain. It says that countries with greater disparities in income also do worse in a number of social indicators, from higher murder rates to lower life expectancy. It also affects the consensus in society which is a necessary underpinning for sustained economic development and economic growth. Inequality when it affects the middle class and reduces the size of incomes in the middle, or creates stagnation in incomes, poses large risks for society and affects economic growth. In the US the home foreclosure crisis and the lack of bargaining power of wage earners in the middle class has created this problem. This is exacerbated by the banking crisis and bad loans in the banking system. Studies show that slow growth in college graduating rates in the USA after 1970 compared to the period 1900-1970, has increased inequality, especially with today's knowledge economy. Germany is also affected by this problem as wages for workers have remained stagnant with the labor reforms. Interestingly a combination of economic growth and payments to the poor have increased the size of the middle class and its incomes in Brazil. The austerity policies in Britain will affect incomes and income growth in Britain for the middle class. In China the gap is widening quickly between the urban areas and the rural areas. And the policy of residency permits- the hukou system-which limits internal mobility from rural areas to the cities and towns, makes the inequality all the more glaring. The lack of democratic election makes the situation worse in China compared to Brazil, because free elections in Brazil enabled leaders from the working classes such as Luiz Inacio Da Silva and Ms. Rousseff to emerge as heads of government. These leaders pursued policies that would explicitly bring a more shared prosperity in Brazil compared to the leadership in China. In China policies are determined by entrenched interests in its model of development- the state-owned companies and banks and their managers, local and government officials of the Communist party, and businesses with the networks and connections with the Communist party and local governments. This is why the ginni coefficient which measures inequality has dropped significantly in China, putting it in the rank of developing countries with poor records in equality. Inflation in China, India and Africa also affects the poor and lower middle classes to a greater extent. Current trends suggest that rebuilding the middle class in the developed countries and providing fairer distribution in developing countries will be of serious importance in coming years. Especially with the likelihood of more economic crises which tend to adversely affect the middle and lower classes disproportionately....

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The coronavirus pandemic and the disaster in nursing homes, the chaotic conditions in the first wave, the lack of staff and poor attention to residents during the pandemic, has exposed the major weakness of nursing home care in western countries. Much of this sector is in the hands of private operators seeking a profit.  The staff is paid low wages and lacks the experience and empathy needed for care of older people. During a virus all these factors turn deadly. With some staff sick the other staff is overburdened. If the sick turn up for work they are likely to risk the safety of other staff and the residents. With the incubation period lack of testing there is no way to know. When deaths occur and the nursing homes are sealed from the outside world the deaths happen with no goodbyes as happened in U.S., Britain and Sweden. This has exposed the scandalous and shocking way in which the elderly are treated in today's environment where ridiculous amounts of money are being spent on other things and the the most basic "one's parents" are neglected and allowed to die in horrific manner in a pandemic. The new trend for home care for the elderly is a welcome trend and long overdue as one of the worst aspects of the system in the west is the treatment of elderly parents in nursing homes run for profit. The new technology tools available for monitoring a elderly person at home, and the help of stores such as Best Buy which are serving elderly at home, is making this more and more a choice for the elderly. Even older patients and ones needing significant care can recover and spend time at home in a better environment, a less costly one, as hospital managers and families have learned in 2020. Some hospitals in the U.S. say they never want to go back. That the drive to get every patient home who can be home is the right one for patients and families and for the government paying for the care so that dollars are well spent in quality of care. Home health care companies are working on providing new services for sicker patients recovering at home. Technology helps do better monitoring. Medicare now pays for digital doctor visits and intense hospital type care at home after coronavirus showed this as vitally needed.  Both the Biden and Trump administrations are firmly focused on this issue. Seema Verma as head of Medicare is clear about the need for a national conversation on how we take care of the elderly, of our parents. And Mr. Biden wants to spend $450 billon to make certain that people who need long term care can get the support they need in the home and the community. This report looks at the home health care companies and how they are improving their services. This and telemedicine are two of the major constructive changes coming out of the pandemic, clearing out some of the worst aspects of the old system of living the older years in the western world.  Nothing speaks more about humanity and a human world than the story here of Savanna Hollar, 90 years old and almost blind. She broke her shoulder in August, Her sons decided not to send her to a the rehab facility she went to after a broken hip 3 years earlier. The sons brought her home to recover in the farmhouse near Yadkinville, N.C., where she has lived since 1951. One of her sons himself 63 years says that at a nursing home she would be lonely, scared and afraid to move. The sons hired two people to help her during the day and a rotating system was used for having people help her. At home Mrs. Hollar could enjoy her gray cat, Buddy, her favorite recliner and tomato sandwiches made with produce from her garden. Really, if we can't do this much what good is the U.S.A.? or Britain? or Sweden? or India? ...

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Lina Nilsson, the innovation director of the Blum Center for Developing Economies at the Universityof California, Berkeley, says female engineers are attracted to programs and research that focusses on achieving societal needs and goals, humanitarian projects, and meeting the special needs of developing economies. Better engineering that helps people improve lives attracts the involvement of women. She cites enrollment at the Blum Center for Developing Economies programs, PhD. minors in development engineering at UC Berkeley, undergraduate international minors at University of Michigan, the D-Lab at M.I.T., humanitarian engineering programs at Arizona State University, University of Minnesota, Penn State, Santa Clara University, Princeton's Engineers Without Borders chapters and clubs, where women's enrollment exceeds that of men. She contrasts this with the low numbers of women engineers in general- less than 20% of tech engineers at Google and Apple, and less than 14% in the U.S. workforce. Her advice- make work meaningful to society and women will enroll in large numbers, not just in computer engineering, also in mechanical and chemical engineering....

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Lt. Gen Trainor and Michael Gordon describe the situation during the last months of U.S. presence in Iraq. President Obama is ambivalent about the size of the military presence he would like to leave, settling for 3000 troops and a few F-16's from a inital figure of 10,000. Obama sees the presidential election approaching and sets an objective of keeping it minimal. The military cooperation treaty with Iraq has to be approved by a Iraqi parliament with different factions in parliament not likely to approve it. Prime Minister Malliki decides not to move ahead. In the end no military cooperation treaty is signed after 8 years of war and a date is set for a complete withdrawal. Iraqi airspace is used by Iran to ship supplies to Syria's Assad regime, and the U.S. has less leverage in the region as the Arab world goes through a transition to popular government and elections. The Obama administration shifts most of its attention to Afghanistan where the U.S. has no vital stake in the long run compared to the Middle East region, with its large population, growing economies, move towards democracy and meeting the aspirations of hundreds of millions of young people. One Middle Eastern leader says the U.S. had no long term policy under the Obama administration for Iraq, and this applies also to the rest of the Middle East region, and mostly reacted to events as they happened. The Obama administration's committment to the war in Afghanistan, just as it focussed on winding down the war in Iraq, responded to the American public's waning support for the war in Iraq. It did not reduce the total cost of the conflicts because of the initial escalation of the war in Afghanistan and later slow progress towards a negoiated settlement to that conflict. A negotiated settlement is the best the U.S. could achieve, and the best desired objective considering the limited interests in Afghanistan. In Afghanistan most of the dynamics would be determined in the long run by the situation in Pakistan, and India-Pakistan relations, which the U.S. could influence constructively only through dialogue, promoting cooperation between the two countries, and economic relations....

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Krugman points to some striking facts about China in 2011. Consumer spending in China is only 35% of GDP and has declined over the years. There are no signs of rebalancing the economy away from exports by increasing consumer spending. China's dependence on exports for trade surpluses is greater than ever. Beyond this there is another disturbing fact. With weak consumer spending and heavy investment spending at about half of GDP, Kugman raises the question where is all that increase in spending going? Real estate investment takes up about half of the increase in investment spending, as the share of GDP of real estate investment almost doubles compared to figures for 2000. Much of the rest of the increase Krugman attributes to firms selling to the construction industry. The speculative fever, the corruption at the local level, the shadow banking system which is not protected and unsupervised, the poor quality of statistics, suggest a bubble phenomena that may not be under control of policy makers, and risks damaging China economy and the world economy in 2012-2013. After all China's economic and financial planners and banks are no better than America's or Japan's, where asset bubbles burst causing serious damage....

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Senator Mitch McConnell, the U.S. Senate Majority leader, and Speaker Ryan, achieved a win in the U.S. Congress which is expected to set a new trend of bipartisan cooperation, as the House passed the bill in Dec. 2015 for $1.1 trillion spending with a vote of 316 to 113, and the Senate with vote of 65 to 33. The persuasion on the Republican side was based on giving Speaker Ryan a strong hand in negotiations with the White House in 2016. Ryan secured a lifting of the oil export ban for the Republican side in return for flexibility in spending. Ryan deftly sent the issue of Puerto Rico having access to bankruptcy laws to the committe chairmen to come up with a plan in March to get the needed votes. Democrats had pushed for aid to Puerto Rico. Also included in the bill that passed is giving more voice to emerging market countries China and India in the running of the IMF.

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Lawrence Katz, Harvard labor economist, talks to Friedman about the jobs crisis in the U.S.. Katz identifies three jobs crises occurring at the same time today. One is the drop in the demand for goods and services that resulted from the longer term effects of the financial crisis of 2008, with rising foreclosures, weak housing markets, bad debt on the balance sheets of banks, and interest rates at close to zero reducing the scope of action by the Federal Reserve bank. The second, is the widespread long term unemployment with workers dropping out of the labor market. The third, is the nature of new factories and hiring. Work in new factories is done through increased automation, information technology and fewer workers. As a result job creation is a fraction of what it was in the past. Not mentioned here is the shrinking of the public sector under the strain of budget deficits for local, state and federal government. This leads to the question of how America will create jobs in the future. Katz believes the answer is creating more "hubs," networked urban areas like Austin, Silicon Valley, and Raleigh-Durham, by bringing together universities, high-tech manufacturers, software providers, and startup companies, to cooperate in creating new products that enhance people's lives worldwide. This has to be done by the private sector and government working together to build the infrastructure and make the investments in education, training of workers, and equipment for new job creation....

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Apple faces large hurdles in China with models made locally by Huawei and other Chinese companies that offer similar features at a price about one third less. Chinese buyers are also looking for products that are made locally by Chinese companies. As a result Apple's market share in China has declined from 9% in 2015 to 7% in 2016. The future for Apple does not look bright apart from a core group of Apple fans that look for new product launches every year. Social media comments cited here show the comments about the iPhone 7 that say buyers should not pay $159 for Air Pods, the cordless earbuds. With the economic situation changing buyers are careful to pay so much for the iPhone 7, when it looks so much like the iPhone 6. In India Apple iPhone price are much higher and remain a significant hurdle for price conscious buyers.

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The National Assessment of Educational Progess (NAEP) test scores in the U.S. for K-12 show a lack of progress since 2013. Scores for math and reading dropped for 8th grade students, and scores for reading were stagnant while dropping in math for 4th grade students. The test scores reflect progress in rural, suburban, urban environments, for communities that are affluent, less affluent and poor, different ethnic backgrounds. The test started in 1990 is the only one measuring national progress. The new results of NAEP are on a scale of 0 to 500, and show that in 2015 64 percent of 4th graders and 66 percent of eighth graders were not reading proficient, 60 percent of 4th graders and 67 percent of 8th graders were not math proficient. Massachusetts, Vermont, New Hampshire, do much better in the tests than Mississippi and New Mexico. Experts say a state to state comparison should separate the non native English speaking students from native English speaking, especially in states like Texas. With about two thirds of students failing the math and reading proficiency levels, growing proportions of minority Hispanic students in many states, larger proportion of less affluent students, the tests show the challenges facing America's K-12 education even after the changes introduced by Education Secretary Duncan since 2008....

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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. ...