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Matteo Renzi's effort to push electoral reforms that would give the elected party or coalition a stronger mandate to govern than the current system, which has made Italy less governable. Stronger government action is needed to pull Italy out of the economic slump, with 12% unemployment and production down in December 2013, say business and industry leaders. Confindustria, Italy's major business association, expressed its sentiment: "We are worried that time is passing and nothing is happening." Renzi and prime minister Letta are from the same Democratic Party. Renzi was recently elected party leader. He has expressed doubts about the pace of change under the Letta administration.

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Fed Governor Kevin Warsh who is an investment banker and was an important participant in shaping the Fed's response to the credit market crises commented about the crisis and what lies ahead at a New York University conference. The credit crisis poses meaningful downside risks to the econmy and especially now as the crisis developes to small businesses and consumers he said suggesting that consumption spending is likely to take the next big hit. He sees credit replacing liquidity as the primary antagonist. For financial markets the curative process is unlikely to be swift or curative. Underscoring the problems ahead- he said we are fighting against the wind. The Fed does not know what to expect whats the next crisis around the corner, as each time things settled down in the last 6 months something else developed because of the crisis in confidence, the perception that the financial architecture itself is not working, and fragility of credit markets. Telling is his remark that a new financial architecture born of the forces of creative destruction is in the early stages of construction. More creative destruction lies ahead before all participants, the mortgage industry, political parties and poiliticians, lenders and financial institutions, homeowners, and the public can be persuaded that some sacrifice will be required of all and things that normally would not be palatable will have to be swallowed to help forge a solution that avoids a downward spiral....

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The situation in Boise, Idaho. Home to many electronics and high tech companies like Micron Technology, Boise has weathered many downturns with unemployment rates well below the national average. This time things are not looking at all like previous downturns, as the unemployment rate in Boise climbed to 6% from 2.7%- it has already approached the national average of 6.7%, and is climbing. This suggests that high tech is also being affected seriously. Unemployment is expected to reach 8% in 2010, about the same as the national average forecast according to Moody's Economy.com. Goldman Sachs forecast is for the 2009 savings rate to be between 6% to 10% by 2009. Families like the Capps and Muirs that have young children or children in teenage years, are now serious savers, as profiled in this description. Down to getting their meat from a calf grown on a family farm in the Rocky mountain region where Boise is located, cutting their own wood in the mountains, buying 11 dozen eggs and freezing the insides of the eggs, buying on deals like $8 winter coats at Old Navy's store, bulk purchases of sugar and staples, growing and canning vegetables, handcrotcheting hats and scarfs for sale on Craigslist and local bazaars. All this from Mrs and Mr Muir including starting a Moneysavers Club, an email group of 30 people. The Muirs are a young family with their first child 5 years ago, who have stable employment, with Mr Muir working as a grape researcher for the state Dept of Agriculture, and his wife a dental assistant. But having taken 2 mortgages to buy their $144,000 home because they could not afford the 20% down payment. The wife's 401K of $3000 going for insulation and fence , and the husband's 401 K savings down to $13,000- reduced to half by the stock market. Suggesting poor decisions on housing debt with low savings for a couple in their thirties. The Capp couple in its forties has also low savings, having $40,000 in student loans, and credit card debt of $11,000 just paid off by using the $10,000 severance package for Mr Capp. The Capps are economizing on everything from skiing to using washable rags instead of paper towels. He worked as a field service engineer for Electroglass, a semiconductor equipment manufacturer based in San Jose which fired two thirds of its field service engineers, including Capp. They also used a $25,000 line of credit on their home to buy a used Toyota 4Runner. Considering their economizing skills, their responding to the downturn by paring down debt as quickly as possible, the information of Mrs Muir's skills at saving, the Capps continuing to use their 253,000 miles Toyota Corolla- these are families that were not crazy spenders, but just families that did not take saving seriously. The Capps made $65,000 from Mr Capps salary and $10,000 from Mrs Capps work at a mental health clinic (after getting a BS in psychology), yet their $2700 in savings suggests no effort was made to save for a rainy day. What this saving and economizing means is that restaurants are closing in large numbers in Boise. Retail stores, including electronics and clothing, are shuttering, All this is leading to higher unemployment, leading to saving measures like those used by the Capps and the Muirs. Meanwhile the numbers for savings accounts at Home Federal Bancorp in Boise, Idaho, a $725 million bank with 15 area branches, shows savings accounts up 26% in December from the previous year. And says the banks consumer banking head, the balances are increasing even as the unemployment rate is going up. Which suggests that Rodriguez and Goldman Sachs may be right (seee link) that the savings rate may reach 10%, and even higher, from what is happening in Boise. Views on currency valuation and the dollar as indicated in the analysis of the article about Rodriguez /Grantham/Scheiff, WSJ, January 2, 2009, may have to be separated from the analysis of what is happening in savings, as the weakening of the dollar relates also to the weakening of other economies and currencies. This steep upturn in saving is likely to affect Chinese exports severely and the Chinese economy. This also affect the German economy, as China imports less from Germany, especially its midsized manufacturers. See links. What is happening on saving, on the other hand, is very real, and happening before our very eyes....

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Barry Ritholtz lists the causes of the financial crisis, He says New York Mayor Bloomberg's exoneration of the financial industry is simply false- what he calls "the Big Lie"- even though Congress, regulators and the Greenspan Fed acted irresponsibly and created favorable conditions for the actions of the financial industry.

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Turkey increases security at its borders limiting the flow of refugees and to control terrorism.

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The surging demand for children's reading activities at New York's neighborhood branch public libraries in 2015.

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The Obama administration's failure to correctly grasp the situation and articulate a clear position on the democracy protests in Egypt, is raising many questions. On many of the events occurring about the transition, the administration was caught unawares. And its position gave a muddled message to the people of Egypt, not a clear statement of the US support for the democratic process. Senator John McCain said in an interview: "Every day that goes by, you have to ask: who profits from this? Its the Muslim Brotherhood and Islamic extremists. There's the perception that we're on the side of Mubarak."

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Class of 1977 was first after the Cultural revolution. In 1977 China held its first competitive national university entrance examination since 1965. A period of 12 years of the cultural revolution till 1977 were a lost decade in terms of education and getting the best minds and training them for careers in various fields for development and modernization. The year 1977 with the reinstatement of university entrance exams was remarkable in the outpouring of energy as young people prepared for entrance exams in a period of a few weeks. Textbooks were hard to find, for over ten years most had no schooling and worked in rural areas doing farming work. Students scrambled to find teachers to guide them. 273,000 were admitted to universities that year- only 4.7% of the the students taking the test. In comparison 58% of nine million students in 2007 were admitted to universities three decades later in 2007. Li Keqiang is one of these students who worked really hard to get into Peking University. He is the new prime minister, part of the new generation of leaders in China. Others include Zhou Qiang, governor of Hunan province, Wang Yi, party secretary of Foreign Affairs Ministry, and Jin Liqun, vice president of the Asian Development Bank, filmmakers Yimou and Kaige. and the writer Chen Cun. ...

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Yan Xuetong, is professor of political science and dean of the Institute of Modern International Relations at Tsinghua University, Beijing. He is the author of Ancient Chinese Thought, Modern Chinese Power. In this essay translated from the Chinese, Xuetong says China's new leaders should borrow ideas from ancient Chinese philosophers and theorists like Guanzi, Confucius, Xunzi and Mencius who pointed to the importance of morally informed leadership as the key to success in the long term. Xuetong presents this as the best way for China to compete with the U.S. At the same time it gives Xuetong a basis for calling on the new Chinese leadership to create a less unequal society, with attention paid to social justice and balanced development free from corruption, similiar to the calls made in the U.S.

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The Italian government is making changes that would increase competition, provide funds for infrastructure and reduce red tape. Mario Monti, the Ialian prime minister, told a news conference: "Italy's economy has for decades been hindered in its economic and social growth by three big problems: insufficent competition, inadequate infrastructure and too much red tape." There are fears that the $40 billion in tax increases and spending cuts set in December 2011 to cut the deficit would lead to a sharp contraction in the economy. The IMF predicts a 2.2% decline in GDP for 2012, the Bank of Italy's estimate is 1.5%. Changes planned would permit gas stations to choose providers, improve the legal system, add 5,000 pharmacy licenses, and add 500 notaries. Industry minister Passera says the cabinet approved 5.5 billion euros for infrastructure projects.

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The number of households without a car increased the fastest in Detroit of any city in the U.S. from 2007 to 2012- by 5% to 26%. In a city which neglected to put in a rail system, many residents endure subzero temperatures for long waits and long commutes to job locations in the winter of 2014.

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The problems for Chrysler may not be as much the culture gap between nationalities, as Daniel Howe of the Detroit News points out, as in other areas. It is not going to be in the union area as the President's auto task force has studied the other risks facing Chrysler, and is aware of the failed effort of United airlines unions to run that airline. In the agreements by which 55% ownership of Chrysler is given to the UAW union, the government leaves the union entirely out of the management of the company, which is left to Fiat. And the UAW seeks to sell off its ownership share at the earliest favorable opportunity. The risk lies in the fact that the new models such as the 40 miles per gallon car Fiat is required to build as one of 3 milestones, each worth an additional 5% stake above the inital 20% stake, will not be built till 2012. Meantime as the President said, Chrysler will have to find ways of staying afloat in a market where it is seeing a 40-50% drop in sales each month this year over 2008, with cars that are "less reliable, less popular, and less fuel efficient than foreign competitors." ...

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A sad situation at the library system in San Jose with exorbitant late fees turning young people from low income families, immigrant children- the very group that needs to be integrated better into society with improved English language skills and a path to higher literacy and reading scores that can lead to college- turning these children away from libraries to avoid the late fee penalties. Parents with low incomes can ill afford the high late fees in the San Jose library system, and some residents keep a distance after being pursued by collection agencies, according to this report by Carol Pogash in the NYT. The situation is different in San Francisco which charges less in late fees, and with the openness of libraries in New York which counts more reading time in libraries as a way to pay off any late fees. The numbers are significant as this report shows 187,000 accounts at the San Jose library system, or 39 percent of all cardholders owe the library late fees. Compared to 50 cents a day for unreturned books at San Jose, San Francisco charges 10 cents a day for adults and no late charges for users under 17 years. Here the principal of Washington Elementary School in San Jose, Maria Arias Evans, and librarian Ms. Bourne, draw attention to a problem when 95 percent of the children attending the school qualify for free and reduced lunch programs. When America is seriously reflecting on the issue of lack upward mobility through education in 2016, better integration of immigrants into society, turning away young students from libraries is the last thing we need as a society and a nation. The digital and other divide in San Jose has never been so evident even from the outside. In March the German new weekly ran a story on San Jose and Silicon Valley satirically titled "Beyond Awesome."...

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Britain's National Institute for Health and Clinical Excellence (NICE) says Glaxo's drug Benlysta for lupus is not "good value for money." The drug is priced at 10,000 pounds a year in the U.K. ($15,600) and much higher at $35,000 a year in the U.S. Benlysta is covered by insurers in the U.S. and some European state run health systems according to Glaxo. NICE also rejected a new multiple sclerosis drug Gilenya, which costs 19,000 pounds a year in the U.K. ($29,700), and $48,000 a year in the U.S.

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An account of how Sobhi Saleh, former secretary general of the Muslim Brotherhood's parliamentary group, escaped from a prison set on fire during the first week of February, 2011.

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The Center for Economics and Business Research in London estimates GDP growth for the UK of 0.4% in 2012. According to Britain's Office of National Statistics the UK economy contracted by 0.3% in the fourth quarter of 2011 compared to the third quarter.

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Britain's Office of National Statistics said that GDP declined by 0.2% in the first quarter of 2012 from the prior quarter. GDP declined by 0.3% in the fourth quarter of 2011. This means Britain is officially in a recession, with two consecutive quarters of negative growth. The ONS said GDP was 4.3% below its precrisis peak in the first quarter of 2008. The UK registered growth of a mere 0.4% since the coalition government of David Cameron took over in May 2010. This presents problems for prime minister Cameron in tackling the UK deficit. It also shows how difficult it will be for EU countries to address their deficits without economic growth. This has come into increasing focus with recent events in the Netherlands with the collapse of the government and upcoming elections on the issue of austerity cuts, and in France with the presidential elections and the swing to parties questioning austerity measures without economic growth.

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France's Finance Minister Michael Sapin introduces a no-austerity budget in September 2014 as France's growth is forecast at 0.4% in 204 and not reaching 2% till 2017. Sapin says "we have taken the decision to adapt the pace of deficit reduction to the situation in the country." The government will put off large parts of the 50 billion euros in cuts in spending towards the latter part of the period to 2017. Critics on the left say the cuts are undermining the social welfae model of France. President Hollande's popularity has declined to very low levels in 2014. Prime minister Valls wins support in the National Assembly for the government's strategy to tackle the economy and growth- increase business confidence and postpone cuts till the economy recovers by 2016.

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A report by two former Census Bureau officials, Gordon Green and John Coder, shows the inflation adjusted median household income in the U.S. declined by 6.7%, to 49,909, between June 2009 and June 2011. From December 2007 to June 2009 household income declined by 3.2%. The forces behind this are the large number of people not working or not looking for work who are outside the labor force, and the hourly pay for workers not keeping up with inflation. Prof Henry Farber at Princeton, says his study shows that people who lost jobs in the recession found work again with an average of 17.5% less income than in their prior jobs. This makes this downturn very different than earlier downturns, and giving credence to the argument "that this time its different." Another statistic from the U.S. Bureau of Labor Statistics shows why- in the period December 2007 to June 2009 average length of time for a person who lost a job to be unemployed increased from 16.6 weeks to 24.1 weeks, with the same figure up to 40.5 weeks in September 2011. Higher declines for Hispanics and other minorities further increased income inequalities. Coder and Green call the impact a substantial decline in the American standard of living....