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Brazilian President Lula's interview witht the Economist, just before leaving office. It is not still clear how Lula will be seen, even though his popularity at the moment is helping elect his chief of staff Ms. Rousseff, as his successor. Lula's success in office is seen as a continuation of the policies of President Cardozo, who helped tame Brazil's inflationary crisis. Lula has benefitted from the continuation of the policies of his predecessor, and also from the boom in exports to China for soya, metals and other exports. By helping expand Brazil's middle class and the aid to poorer segments of society with the Bolsa programme, he has earned credibility and wide popular support. The dangers lie in the areas of an extremely overvalued currency- see the link to the Brazilian currency Real- with the Real at 1.7 and analysts with computer models showing the Real really worth 2.65 dollars. Part of the problem is government deficits to finance increased spending which require inflow of foreign capital and higher interest rates. Brazil is very dependent on exports to China for the increased level of growth, this poses risks if China's growth slows as expected from the high growth rates of the past. This poses risks for the level of infrastructure spending the Lula and Ms. Rousseff goverments plan on developing. Brazil's educational system is weak and efforts to improve this under the Lula government have not produced results. So the longer term assessment of the Lula goverment will have a balanced score card of wins and losses, without the euphoria of the moment....

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With Whitacre in charge at GM there is a change of style and substance that just flows from who the man is. He is a no-nonsense guy, who once told a colleague from his days at Southwestern Bell, that God gave us two eyes and one mouth for the right reason so we should use it in that proportion. He is quite matter of fact about approaching the probems at GM right from the beginning. From those early meetings at the Westin airport hotel in Detroit, where he would tell GM executives and Henderson that if things did not happen the way they should and quickly he would find the right people. After there was a lot of soul searching about Henderson's decision to sell Opel- and three directors with private equity background decided it was bad for GM, that GM needed Opel for its compact and midsize car engineering and sales volume- Henderson was replaced as CEO. The decision was reversed. Within 3 months of Henderson's departure four other executives were let go, 20 more were reassigned and seven outsiders were brought in to fill top jobs. Lutz was marginalized. Reuss in his forties was placed in charge of N. America. The metrics were simplified from Wagoner's days to six: market share, revenue, operating profit, cash flow, quality, and customer satisfaction. His approach to get managers who make decisions fast and correct mistakes speedily. Vice chairman and CFO, Christopher Liddell, is from Microsoft and joined in January. Liddell points out that 12 of the 13 person GM executive committee are either new to the auto industry or outsiders. And the seniormost Whitacre and Liddell, are new to the auto industry and outsiders, so Whitacre can point out that GM has run the business in a more complicated way than it needs to be. The big changes are cultural. And making these changes for a company the size of GM and with the trauma that happened at GM with the speedy decline, required someone with the experience Whitacre gained in tackling the problems he faced at Southwesten Bell and the new AT&T, with its changing culture. The tough down-to-earth nature of the guy, with no affectations or layers to his personality whatsoever, proved an asset at the new AT&T and now at GM. Other decisions he has made at GM, are some strategic ones like bringing down incentives to sell cars, the latest being letting market share drop in March in the face of Toyota's heavy use of incentives to recover from the recall crisis, but sticking to reducing the incentive dollars by $1200 to $3500 per car. This made it possible to achieve sales goals. And some tactical but of great significance, from a common sense approach to GM advertising with his remark "I'm sick of Howie Long." Pitchman Long was a football player, and what Whitacre insisted on was showing off GM's best models and features to blow the competition, like the "May the Best Car Win," campaign. That many of GM's ads didn't focus on the cars and didn't make any sense, like little Cadillacs flying out of a birdhouse, makes this truly incredible to an outsider. Other things Whitacre brings are a change in his expectations, and his overall demeanor. This impatience may be a good thing for GM especially with the capital investment in new models, plant investment and better decisionmaking, and commonsense approach, to back it up. In the car industry it can't hurt for the top guy to look at the car clay models and ask why they can't be brought to market in 12 months. It gets people thinking differently. Asking a Cadillac dealer he knows in San Antonio why they should'nt be selling twice as many Cadillacs if the marketing was better. It helps when the top guy can visit a plant and have "diagonal slice meetigs" with plant staff, workers and UAW people, to talk about things in sweat shirt and jeans with no airs about yourself whatsoever, and to follow this up with a repeat meeting some months later and announce a $136 million investment, as he did with the Fairfax plant in Kansas....

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The tough job President Obama faces as he faces opposition from politicians who have interests to protect, and healthcare businesses with interests to protect. The President has to come up with a plan that is deficit neutral, because financial markets could see a healthcare bill that further widens the deficit as a signal for higher interest rates that would deepen the recession. At the same time each of the three sources of revenue puts him at loggerheads with political leaders in Congress or groups with interests to protect. Limiting income tax deductions for high earners could raise $267 billion in 10 years. It would require taxpayers in the top tax brackets deduct their mortgage interest, state and local taxes, and charitable donations, at the 28% tax rate instead of the 33% and 35% tax rates. The opposition is with democratic leaders that it would hurt charities, universities that depend on tax deductible donations, and taxpayers in high tax cities like New York city that are the home base of Democratic leaders. Yet only 1.4% of households would be affected says the nonpartisan Tax Policy Center. The Center on Philanthropy at Indiana University, says charitable giving would decrease by 2%. The other opposition on this comes from the preference of Senators Baucus and Grassley, who head the Senate Finance Committee, for tax increases or cost savings to come from the health sector. Specifically they want to see the value of workers' employer provided health benefits subject to income taxes. It is a situation in which every sensible person admits the need for healthcare reform and would see the current pace of healthcare costs as unsustainable and dangerous; and after that will just go back to his group and try to preserve as much of the status quo as possible, so as not to disturb by much the benefits or compensation they have secured from the system over the years. Then there are political leaders in Congress with their own preferences, and Congressmen who are the subject of heavy lobbying by these interests. The administration and the Presidents job is to navigate this stream with a workable deficit neutral plan, without any requirement for any group to make sacrifices, and in some situations even small sacrifices for the public interest. Would charitable institutions be hurt that much, what if charitable institutions were exempted, why would other interests the try to obtain the same exemption. Its like the unions trying to keep the old unsustainable goldplated healthcare and other benefits at GM even as the ship was going down. Taxing employer provided employee health benefits as income would raise $2.5 trillion over a decade. The opposition here is from unions which are a force in the Democratic party and which count tax free health benefits as a legacy of the labor movement. Employer provided health insurance covers 160 million American employed and their dependents under the age of 65, so it has a wide impact. Yet most economists favor ending the tax break. They say it mainly goes to upper income taxpayers, and discourages cost consciousness among consumers of health care, thus encouraging excessive spending and surging health care costs. Senior Obama advisors, Peter Orszag, the budget director, and economist Jason Furman favor this approach. So do Republicans in Congress. Senators Baucus and Grassley are not asking for the complete removal of the tax break, what they want to see is capping the value of benefits that go untaxed. If the tax-free limit is $13,000, a policy worth $15,000 would pay income taxes on $2000. A third spource is to spend less on Medicare. About two thirds of the $948 billion in savings Mr Obama has proposed over 10 years comes from a number of reductions in Medicare spending. $177 billion comes from insurance companies bidding for government reimbursements for offering private plans to seniors. $106 billion comes from cutting the subsidies to hospitals serving the uninsured as universal coverage should remove this need. And $110 billion in reduced payments to hospitals and doctors because of productivity gains. A range of industries insurance companies, hospitals, doctors drugmakers, nursing homes, home health care companies and medical device makers, all stand to lose from reduced payments from Medicare and Medicaid. And these groups with interests to protect are another factor in this process of working out a healthcare plan. ...

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Micky Hammon sponsored Alabama's HB 56, Alabama Taxpayer and Citizenship Protection Act, which passed in the legislature in 2011. The illegal immigrants it was said would follow "self-deportation" as the law would require frequent checks by police, and make renting a house or giving a job to an illegal immigrant a crime. The policy would be followed in schools also. At the time Donald Trump is cited by the Washington Post's David Weigel as telling reporter Kessler that the policy was "crazy," and "maniacal."

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The slowing economy of Turkey as the wars in Syria and Iraq take their toll reducing demand for Turkey's exports. The conflict with Russia also affects Turkish exports. Growth slows to 2-3% a year in 2015-2016.

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Economic growth in India has slowed to 6.9% for the June to September period 2011, compared with the prior year, according to a government report. The sequence of rate increases by India's central bank have failed to slow inflation, and foreign investment is declining. Economists now forecast growth at 6% for 2012, a low rate of growth for India, which has a growing population approaching 1.2 billion people and serious infrastructure problems. This creates a scenario of stagflation- high inflation and low growth. The fears are now for a combination of high government debt, infrastructure issues, and lack of foreign investment. This is leading to moves by the Indian government to bring up long delayed efforts in the area of opening the retail industry to foreign investment. And lifting quotas on foreign ownership of Indian bonds, allowing foreign pension managers into India. The value of the Indian currency has declined 15%, in 3 months since August 2011. The eurozone crisis and the combination of slowgrowth and high unemployment in the U.S. are leading to foreign investors withdrawing from emerging markets, with a sharp impact on India. A combination of domestic and international factors are hitting India after two decades of high growth. ...

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Participation by the Democratic Left party led by Fotis Kouvelis is necessary to form a stable government. Kovelis says the harshest austerity measures such as the demand to cut the minimum wage would have to be revoked in a new platform for New Democracy, Pasok Socialist party, and the Democratic Left. The timetable for Greece to meet budget deficit targets would also need to be extended. This comes as the three parties negotiate terms for a new government led by Antonis Samaras.

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Incentives for automobile sales are increasing back up to about $3000 a year from $2000, as auto sales reach a level of 16.3 million annual sales in month of October 2014, according to KBB analysts.