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An argument for the market economy is that it enables social mobility, so that persons willing to work hard and use talents can do better than their parents and move up in income level.  Yet this is proving to be wrong as there is less social mobility in developed countries, and even less so in developing economies. In the U.S. it would take 5 generations or 100 years, says this OECD report, for someone in the bottom 10% of earners to secure an average income. Even in a country like Denmark it will now take 2 generations or 40 years. In Colombia it would take 11 generations, almost as long as the country has been separate from Spain. Globally, says OECD, the social mobility was better before 1975. OECD's Gabriela Ramos, the chief of staff, says families and communities have been trapped since the 1980's at the bottom rung of the social ladder. In the U.S. 42% of men with low earning fathers end up in the same income level, much higher than the OECD's 31%. At the other end 48% in high income groups see descendents in the same group, similar in the U.S. and Germany. This the OECD says is bad for economic growth in the long run. This "broken elevator" is causing a backlash against the market economy and democracy, disturbing the social cohesion in society. The answer says the OECD, is to provide federal funds to make up for gaps in education so that access to higher education is provided to people on a broad level to include all parts of society. ...

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Matt Dickinson of The times of Lonson gives this story of the youngest winner of the Tour de France, 22 years old,  from a small town 25 miles north of Bogota, Colombia. His dad is a guard for the local cathedral and is his son's motor pacer and mechanic.  Cycling is huge in Colombia. Zipaquira is 2600 metres or 8600 feet up in the Andes mountains. A nearby climb of 23 kilometres is described by Bernal as his "office" and his father rides up ahead with him on this daily training.  In the trials Bernal was 22nd and this never fazed him even though on Stage 13 in Pau he fell behind colleague Geraint Thomas by 1 minute 22 seconds. In the final run in the Alps Julian Alaiphilippe of France who had shaken up the race faltered, Geraint Thomas  also did not keep up. so that Bernal with the Andean training and serious work prevailed with 1 minute 11 seconds to spare to win. Much of his maturity comes from working within a family where the mom and dad live together to keep costs down but have separated. As the elder of two children Bernal gained maturity in having to work with both parents to keep the home together. The first thing he has done with his new earnings is to buy a flat for his mom. Sky team's Brailsford who hired Bernal describes the confidence and maturity he has encountered in Bernal. At 22 years of age he is seen as having a bright future ahead of him. ...

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For years economists and finance people left this hidden and obscured, the common sense understanding that higher interest rates in an economy based on better education with investments in infrastructure and manufacturing as Biden has put in place today would actually stimulate the economy. Why? David Uberti rightly points out this is household wealth growing larger with investment in CD's and savings accounts, dividend paying stocks at higher interest rates. Consider this important fact -Americans have earned $3.7 trillion in the first quarter alone in interest and dividends. This is $770 billion larger than in 2019, according to Commerce Department. In the last quarter of 2023 Americans had the largest wealth ever held in stocks, real estate, and other assets such as pensions, according to the Federal Reserve. Charles Schwab of the brokerage company he founded in 1971 stated this as a major loss for the American people and the economy when zero interest rates were used to tackle the problems created by greed and poor behaviors of banks in the 2009 crisis, Schwab was talking about something real. Hit the country with war burdens for Middle East wars of Reagan, Bush, Obama and Trump by taking away funds from infrastructure and education, healthcare and you have two burdens -2009 financial crisis created by banks and wars that reduce the household wealth and the capacity of the American economy to grow and create needed jobs to reduce standard of life/quality of life in the US. A third burden fell heavily on pensioners and elderly depriving them of interest and dividends with zero interest rates that no economist wanted to talk about for 30 years including  the previous administrations since 1990.  ...

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Tim Walz uses a sports metaphor about being one behind, fighting for every inch in this football game to score, as he brings to life this final effort of 75 days to win the election for president Kamala Harris, for president Biden, and for workers and families across the 51 States. Read the full speech at the Convention as Tim Walz accepts the Democratic nomination for Vice President. "Their Project 2025 will make things much, much harder for people who are just trying to live their lives. They spend a lot of time pretending they know nothing about this. But look, I coached high school football long enough to know, and trust me on this: When somebody takes the time to draw up a playbook, they’re going to use it. And we know, if these guys get back in the White House, they’ll start jacking up the costs on the middle class. They’ll repeal the Affordable Care Act. They’ll gut Social Security and Medicare. And they will ban abortion across this country, with or without Congress. Here’s the thing. It’s an agenda nobody asked for. It’s an agenda that serves nobody, except the richest and the most extreme amongst us. And it’s an agenda that does nothing for our neighbors in need. Is it weird? Absolutely. Absolutely. But it’s also wrong, and it’s dangerous. It’s not just me saying so, it’s Trump’s own people. They were with him for four years. They’re warning us that the next four years will be much, much worse." ...

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What happened on September 10, 2024 in the Harris Trump ABC television debate moderators David Muir and Linsey Davis? It is hard to prepare for a debate, things can go wrong, unanticipated situations may arise. 67 million audience, 51 million for Biden Trump last debate, it can stress you out- UNLESS you Trust your authentic self knowing people can see through you if you are not honest forthright and stating it clearly. Harris could say she did approve fracking now as policy action she cast decisive vote for new oil leases. I am from a family like yours struggled with a single parent mother, ("not $400 million platter")I also support small businesses. If the other side is telling lies prolifically, make it clear vigorously yet with it not changing your demeanor and your focus on housing, cost of living, experience for NATO "from the same old playbook" and a warning about the lies to come to prepare the audience very early. Save the time responding to insult to use every moment constructively to define your message for the question at hand which is in addition to the questions put to you which are merely for organization immigration, crime, economy, cost of living, chips and science competition, Ukraine, Afghanistan. Harris said nothing about "Marxist economic professor father, other personal insults just acknowledged "It is a tragedy," don't you think fellow citizens? What would 4 years be like under Harris? (and 4 years under Trump?) Here's my plan for housing, for not starting trade wars while letting chips and science help competitors as Trump.   ...

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The Syrian war started with Arab Spring in 2011 and a popular uprising against the rule by a Alawite minority that came to power in a coup staged by the elder Assad in 1970, says this report on the civil war in Syria. The war dragged out over a decade with the northwest in the control of Kurds, and groups backed by Turkey. Groups backed by Turkey which want to restore Syria to its national origins before the current regime took Homs, Aleppo and Damascus in a week as Iran and Russia withdrew from the country following the war in Ukraine and the Israel conflict with Iran. The US has only a small presence in the country to protect against terrorist groups. One of the effects of the conflict is the flow of migrants to Europe through Hungary into Austria and into Germany during the Merkel years. The opposition to migration that led to the CDU's decline in popularity and to Brexit in Britain started with this flow of migration from North Africa and the Middle East conflicts emerging out of the Arab Spring. In Britain the migration was also from Poland and countries in Eastern Europe.  This led to Reform UK and the Brexit referendum. In the US it led to the Border becoming a major issue in 2016 with migrant surge from Mexico in the last years of Obama's second term.  The collapse of the Venezuelan economy, economic troubles in central America led to another surge in migration in 2021-2023 from these countries making the Border a major issue in the US in 2024, and giving DJT a second term in office in 2025.   ...

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Spencer Jakab provides this balanced perspective on Buffett's performance as an investor. Breaking the past 25 years into five periods gives a sense of how Buffett has fared in recent years compared to his performance in the early years. In the latest period since 2010 Berkshire stock has outperformed the market by a mere 0.9% annually. In the period 1995-1999 Berkshire performance trailed the S&P 500 significantly, making up for this in the next 5 years. As Berkshire became larger it was harder to generate results of the period around 1975. In that year returns were 129.3%. In 2015 Berkshire had to take big stakes in large companies such as Kraft. Gains for 2009 were 2.7%, 2010 21.4%, and 2011 minus 4.7%. Showing that Buffett's principles and approach remained intact- invest in what you know and be careful to respect what you don't know, invest in companies and their prospects for the long run (an option not easily available to mutual fund managers who are judged yearly), invest in companies generating large cash flows. Yet as Jakab points out performance has gradually declined over the years....

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Boeing machinists Union by 64% rejects a wage and benefits deal for 35% increase in wages over 4 years. This extends the strike at Boeing.

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Murali Krishnan of DW.com has this interview with Adar Poonavalla of Serum Institute of India the largest vaccine maker in the world that makes about 60% of all vaccines used in the world. It is beginning manufacturing of the Oxford vaccine so that the manufacturing process is ready to turn out a billion vaccine doses over a short period of 1 to 2 years. Serum's Oxford vaccine would be priced at $13 per dose for coronavirus. Serum is conducting its own trials for the vaccine. About 40 million doses would be ready by October. 

India's pioneering work in vaccine production on a large scale is one of the reasons the world can tackle the future with some confidence for the economy and the health of billions of people all over the world.

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This report by Goodman in the NYT shows that the ANC has lost most of the moral authority it had under Mandela. After 9 years under president Zuma, and after the term of his predecessor Mr. Mbeki from 1999-2008, South Africa remains stuck with stagnant economy, and about two thirds of young people in the townships being jobless. The challenge is how to change the economy to where growth is generated and benefits go to a broader section of the population. Problems the new president Ramaphosa faces are how to change the protections given to conglomerates that dominated the economy under Apatheid, and the patronage network that evolved with the ANC in the post Apartheid era. Growth performance of the South African economy is dismal. According to the World Bank the South African economy in 2016 was about the size of the economy in 2009. Many warnings about the economy and the operation of the state run electric utility appeared during Mr. Zuma's presidency, including one by former president De Klerk. Growth in 2018 is expected to be only about 1.1%. The economic gains by the largely black population have suffered with lack of growth and mismanagement of the economy. Official unemployment is at 27%, with about two thirds of the young people in the townships being jobless.  ...

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Because of pervasive corruption, low oil prices, and the effects of years of sanctions on the Iranian economy, experts now see the Iranian economy recovering only slowly in 2016-2017. The low oil prices below $30 a barrel in Jan. 2016 could cancel out the effects from unfreezing of about $50 billion in Iranian assets and removal of sanctions. Another severe problem is the way the Iranian economy is now structured with benefits going to businesses and groups close to the military and government, some of the benefits lost through corruption, taking it even longer for benefits to be seen for ordinary Iranians. This could even lead to Rouhani losing some of the credibility with the public that he had gained during the negotiations, says Warrick of the Washington Post.

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Former QWest CEO was convicted of insider trading for selling $52 million in stock in Qwest when he knew the company's finances were failing. He was sentenced to 6 years in prison. Some of the people involved in the previous tech bubble are being sent to prison years later.

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S. Korea and the U.S. propose limiting trade imbalances to 4% of each country's GDP by 2015. S. Korea is the host of the current G-20 meeting. Germany and Japan oppose this move, arguing that their governments cannot engineer such outcomes, as it was determined by economic activity in the private sector. Japan's representative, Finance Minister Yoshihiko Noda, said that while he was dubious about the idea of setting strict numerical goals, it would be acceptable to use them as reference numbers. Germany has traditionally opposed the idea. Germany wants to be counted as part of the European Union, rather than as a single nation, in any such reference goal. China has not commented on the target. S. Korea has presented the idea as a way to use more than currency exchange rates to achieve a global rebalancing. And People's Bank of China Deputy Gov. Yi Gang said Oct 10, that China is planning policies that could result in its surplus falling below 4% of GDP in 3 to 5 years, from about 5.8% in 2009....

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ACE Ltd will acquire Chubb Corp. for $28.3 billion in cash and stock to form one of the largest property casualty insurers in the world. Conditions in this part of the industry are creating a surge in M&A activity as the capital bases of these companies have grown as a result of smaller hurricane claims since 2012 from individuals and business. More competition is reducing prices in the industry and lower interest rates are reducing investment income. Chubb is a well known name based in New Jersey and a large provider of homeowners' insurance to affluent Americans. ACE is in the personal insurance business, and the 2 companies have significant operations in providing insurance to midsize business. ACE shareholders will own 70% of the new company which will assume the Chubb name worldwide. ACE is led by Evan Greenberg, son of Maurice "Hank" Greenberg of AIG. He worked at AIG for 25 years before joining ACE in 2001, becoming CEO in 2004 and chairman in 2007. He expanded ACE in overseas markets, and added more lines of coverage. The company will be based in ACE's location of Switzerland....

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This piece in the Economist magazine points out why people in Portugal, Spain and Italy resent the remarks of Dutch finance minister, Jeroen Dijsselbloem, current head of the Eurogroup council of finance ministers, In an intervew with Germany daily Frankfurter Allgemeine Zeitung, he said he was proud of the solidarity shown by northern European countries with the southern ones, but solidarity he said means obligations- " I cannot spend all my money on schnapps and women, and then ask for your support."  It also points out that Dijsselbloem's Labor Party lost three fourths of its seats in the recent Dutch elections and so is an unrepresentative presence in the Eurogroup. By supporting austerity policies in a coalition with a centre right party the Labor Party lost most of its seats. Dijsselbloem did this in the EU with strict rules for Italy for injecting money to recapitalize its banks and increase growth that have hurt Italy, and earned the resentment of Mr. Renzi, says the Economist magazine.He may even be replaced by an official from Spain or another southern European country, says the magazine. In any case it does little for EU unity at a sensitive time, and was a serious mistake. The timing was even worse, as the EU faces a test in elections in France and Germany, after Netherlands, and needs popular perceptions to be positive about what has been achieved since the dark days of 1945. ...

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Compared to 2008 Hillary Clinton is now very clear that she will stand up for woman's issues openly- "it is about no ceilings, no limits, for any of us." About playing the women's card she says "deal me in." One of the paradoxes of this election season is that white women registered voters 35 to 64 years of age have shown less enthusiasm for Hillary, around 34-36 percent in polls such as the NBC-WSJ poll. Interestingly the figure climbs to 66 percent for ages 18-34, and to 56 percent for ages over 64, for all women. Experts attribute this to the fact that women over 35 are facing fewer barriers than the women over 64 who remember the hard won battles for women's rights when it was hard for women to get a credit card or run for office, or be promoted in business. Traditional career choices were being teachers or nurses. A lot has changed in the last 20 years, and this has left some women who are no longer facing such barriers turning to other issues to choose their candidate such as happened in their enthusiasm for Bernie Sanders. Overall for all women registered voters  Hillary gets 52 percent support, Trump 37 percent, according to a July 2016 NBC/WSJ poll.   ...

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What Peter Bernstein, 90, remembers about the Great Depression. He says one was conscious of it evertime you walked outside on the stree, and people looked so threadbare. A mass of policy errors made the situation worse. And life was different then, more like a developing country as the USA went through the throes of urbanization and industrialization. Food took up about a quarter of disposable income compared to one tenth today. About 20% of the jobs were in agriculture in 1930, compared to 2% today. Less than half of the jobs were in service industries in 1930 compared to 75% today. And there were no food stamps, no unemployment insurance, no social security, no medicaid and medicare, none of the automatic income things that maintain income in the USA today for people out of work. Economist Robert Solow, 90, remembers growing up in Brooklyn, New York, and how his parents constantly worried about the next month's money. Paul Samuelson, another economist, 93, remembers attending classes at the University of Chicago during the depression years. And he says the economics lecures were on laissez-faire principles, which stopped making sense when he looked out the windows and from what he saw and heard on the street. Showing how out of touch policies were in the early years when the depression's worst chartacteristics took shape. However we are in the early stages of this, and it can still be very painful as people make it through the storms ahead. What will things look like as the nations unemployment rate hits 10% by 2010,? Which means things are much much worse in parts of the country like the midwest, where industries like the automobile industry depend on sales of vehicles which have seen sales go down from 15 million vehicles down to 9 million annualized in 2009, and may see further declines in 2010....

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This FR24 article is from November 2, 2022. 

 She calls herself a 4th generation Social Democrat and sees working class families as the worst hit by the politics of the open migration policies of the past. These policies only created the politics that did little for working families struggling to make a living and for an economy that supports working families. She now favors zero immigraton policies. Mette Frederiksen is favored by 58% in a recent poll. She won 50 seats in parliament for the Social Democrats with a majority for her centre left bloc in Denmark elections. In Denmark's fragmented political landscape her party Social Democrats won 28% of the vote.

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The Naval Innovation and Indeginization Organization of the Indian Navy, NIIO, sets. a new pace and direction for the Indian Navy and its mission in the Indian Ocean. The goal is to use the idea of the Gati Shakti plan to bring together industry, academia, research organizations, government in partnership for adopting 75 indeginized innovations in a few years. In the last year 54% of the Indian defense budget was given to companies within India for product and services, and in the coming year the plan is for it to go up to 70%, according to defense minister Rajnath Singh. This means even aircraft carriers will be be developed and built in India at Indian shipyards using Indian technology.

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Raila Odinga runs for a third time in the Kenyan elections. He ran against Uhuru Kenyatta in the 2013 and 2017 elections. After supporting his deputy vice president William Ruto for president, Kenyatta shifts to Odinga. The Times looks at Kenya today and the current election in a country long split along tribal lines with the Kikuyu tribe of Kenyatta family dominating  since independence. In the 2007 election Odinga ran against Mwai Kibaki with the results being considered flawed even though Kibaki was made president. A reconciliation after post election violence was arranged by Kofi Annan, UN Secretary General. In that arrangement Odinga was made prime minister. This is the fourth time Odinga at 77 years is contesting the election.

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Shabana Mahmood, Labour MP, is Keir Starmer's campaign chief for the Labour party. She describes how she struggled over the years to bring the party to where it is now- having a new level of support from the British people. She is Labour MP for Birmingham Ladywood. Her first experience with Labour comes from being with her father who was chairman of the Labour party in the area she represents in parliament. Her father was an engineer who came from Kashmir, had been to Saudi Arabia and Kuwait, and had a great deal of reverence for the British system of parliamentary government. Mahmood met Sunak at Lincoln's College, Oxford, in her junior year. 

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Missing workers in direct contact service industries with the Great Resignation in the US and Europe. The US is missing 4.3 million workers. This also includes many women who have not returned to work as the pandemic drags on. The share of the population in the US 16 years or older either working or looking for work is at 63.3%. Workers are quitting at the highest rates in manufacturing, retail and trade, transportation and utilities, and in professional or business services. Quitting is high for women, workers without college degree and in low paying service industries such as hotels, restaurants, and child care. It appears now that these trends will stay and not be reversed easily.

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Bringing together all ministries and parts of government into an integrated planning and execution sought under the Indian prime minister's Gati Shakti Master plan for infrastructure is likely to bring a change in the culture of ministries and government at every level in India. Before for the years since independence in 1947 no attention was given to this idea of one team of many teams all working under one master plan at every level of government, much of the activity was conducted for development in separate silos. This massive culture change will accelerate development and ensure every rupee or dollar is spent to get the most out of infrastructure building efforts that benefit the public in India.

 

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The recovery effort in Japan following the tsunami has increased to $300 billion with the cost of construction doubling over 10 years. Half a million people were displaced and the Fukushima nuclear reactor in meltdown. Many people have not returned. At the time of the disaster half of the people affected by tsunami in the northeastern Tohoku region were over 65. Population is now down by 6% as people move to large cities. The effort was meant to rebuild homes, damaged infrastructure, and to revive agriculture, fishing and tourism. It has cost $2400 for every person living in Japan.

The tsunami crashed into 1000 miles of northern coastline, putting entire communities 6 miles inland under water.

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The vaccine cost varies with the company Astra Zeneca at $4 and Moderna at $25. Government money is taking away much of the risk for manufacturers. The U.S. government has allocated massive investments with different manufacturers to ensure that a vaccine is available. Worldwide demand is about 2 billion doses over 2 years. Seven manufacturers have joined together to reassure the public that a vaccine will be tested carefully for safety and effectiveness. Some manufacturers excluding Pfizer and Moderna have stated that the vaccine will be provided at cost.

To return to some level of normal economy and people able to live normal lives the vaccine has to be available to all people at an affordable and widely available level.