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Instead of "ring fencing" bad loans one bank at a time, which is what is being done for Bank of America and Citigroup by the government , Bair, Bernanke and others favor something like the Resolution Trust Corporation, which would contain all bad assets of banks. Bair in an interview said she would like to see them priced at what they would get in today's market, meaning that the steep discounts issue would be faced squarely. What this will need is a lot of government money to restore confidence so that investors are willing to put their private money in the banks. And Senator Schumer says he is hearing the number of $1 trillion or more. This would let banks take these bad assets off their balance sheets, like they did with the Brady bonds for bad Latin American assets and with the Resolution Trust Corporation for bad assets in the savings and loan crisis. It was the original intent of TARP but two things happened, first the pricing of these assets was in limbo, with nobody willing to say how steep the discount should be. The auction process proposed was a vague and shaky one. Second, things deteriorated so quickly that it became urgent to instead do bank recapitalizations for $250 billion. Now the same issue has to be addressed directly by another administration with control of Congress, so that the big bucks funding of $1 trillion can be possible to do. Something like a separate institution that holds all bad bank assets. And the government taking on a big part of the burden, and with it some ownership of the banks that hopefully could payback some of this $ 1 trillion....

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Samuelson warns that turning seniors into a protected class making no sacrifices whatsoever, will mean shrinking all other social programs, defense and investments in education and infrastructure. This is the reality of the budget deficits facing the U.S. He cites the Congressional Budget Office projections that even with cutting defense and non defense discretionary spending by a third, the U.S. risks a deficit in 2023 of about 6.75% of the economy or gross domestic product (GDP). To cover this would require $1 trillion in higher taxes, an increase of a third above the 1970-2011 average. He says Democrats are using demagoguery and intimidation on this issue, and ironically even Paul Ryan's proposal reflects a desire not to touch seniors benefits and willingness to pass on the costs to the young to pay for these programs. Social Security and Medicare are a critical part of the American fabric, and no one wants to dismantle them, it is about modernizing them to reflect higher life expectancy and larger wealth accumulated by the elderly compared to previous generations, and to reduce the burden on the young. ...

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Fomer Defense Secretary Leon Panetta says America needs to take up a vigorous foreign policy in his book "Worthy Fights." Both Panetta and Hillary Clinton, and Gen. Dempsey of the Joint Chiefs, Gen. Petraeus of the CIA, supported U.S. taking a strong stand in Syria by supporting Syrian opposition forces in the summer of 2011 and were overruled by president Obama and his election advisers because of the approaching 2012 election. Here Mark Landler provides more insights into Hillary Clinton's deeply held belief shared with Panetta that the U.S. had to take strong action where necessary to deter foes, to get into the ring to use Panetta's expression. The U.S. support for action in Libya to support Britain and France comes from the efforts of Clinton, and any lack of followup one of president Obama's errors in foreign policy. In April 2016 president Obama said that he considered his failure to followup in Libya to help the new Libyan government his biggest mistake in his presidency. Here Mark Landler looks at Hillary Clinton's entire career as showing a conviction and belief on the need for action where necessary in the U.S. global engagement. Compared to the bluster of the candidates Trump, Cruz and Sanders, with little experience to back this up in their careers in real estate, law or the Senate , Landler says Clinton is the last remaining hawk. Here he describes Hillary Clinton's contact and empathy for the troops from her trip to the American base in Tuzla, Bosnia, in March 1996. In fact many have forgotten that Yugoslavia is what it is today after the Milosevic years and the ethnic wars with Slovenia, Croatia, Montenegro, members of the EU and Serbia negotiating to enter EU, because of the bombing campaign taken by Bill Clinton through NATO in 1999 to prevent ethnic cleansing in Kosovo, and peacemaking following the Bosnian War using diplomat Holbrooke to negotiate the 1995 Dayton Accords. Here Landler describes the meetings with Gen. Keane who pushed for the troop surge that worked in Iraq under president George W. Bush. Clinton supported Keane's proposal made in April 2015, for a no-fly-zone in Syria that would help opposition forces till a settlement could be negotiated. Keane pointed out to Clinton that there was a flaw in Obama's policies- that negotiation would work only if the no-fly-zone was used to support opposition forces. By the end of 2015 Hillary Clinton publicly adopted this position. During a period when Americans are weary of foreign entanglements but understand the need to provide leadership where needed, Hillary Clinton, provides a balance between the pendulum swinging too sharply in one direction in the Bush years and in another direction in the Obama years, says Landler. A view also articulated by Leon Panetta, who was chief of staff for President Clinton during the Bosnian conflict and the Dayton Accords, where the U.S. showed strength of purpose in war and also in negotiating the peace without major entanglements....

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A new study by the Washington Post and the Kaiser Family Foundation shows partisan politics will affect the new president in the U.S. in 2013, to the point of making it difficult to govern.

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That Chrysler was pushing its new Dodge Ram pickup with a cattle drive through the streets of Detroit in January 2008, and GM and Ford were counting on new redesigned pickups to help them through the year shows how badly the three companies miscalculated the market and how costly it will end up being. The Big Three may end up being the Big Two as Chrysler depends even more on larger vehicles like vans, SUV's and pickups and sales decline is the highest on Chrysler vehicles in June, and Chrysler does not have the money to come up with a completely new product line like its competitors. It also does not have the overseas operations that are earning money. For all three companies its finance arms which used to bring in earnings now are at a loss especially as loans go sour and the resale value of pickups and trucks is in a sharp decline. See the Manheim US auction prices May 2008, source of graph Morgan Stanley.

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In May 2008 the Honda Civic takes the leader position with most sales for a brand passing the Ford F 150 pickup, Honda's Accord and Toyota's Camry and one other car probably the Corolla also passed the F150 in sales, as the sales of the F150 plunged by 33% in May. This according to figures from Autodata, an industry statistics firm. A lot of new things are happening which will change the face of the industry forever. Japanese cars outsold American cars in the American market for the first time with 48% of the market compared to 44% for the US carmakers. And American carmakers now see the changes that are taking place to be permanent. In a sense economics and public perceptions are doing what makes sense in a globalized economy and a global workforce and globally shared aspiratuions for a better life in rising middle classes throoughout the develping world. For Americans to drive around in gas wasting vehicles was riding against the face of scarce energy resources being used in the best possible manner around the world to meet the aspirations of a global workforce of global companies. IBM now has as many or more people working for it in other countries and a huge number in India, how can scarce energy resources be used to meet in the best possible way to meet the aspirations of all of IBM's people, or for that matter the people of any other global company? Its only by Americans shifting to smaller cars and fuel conserving cars that this could happen. ...

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The ECB stands ready to act with the unanimous support of its 25 member governing policy, says Mario Draghi, president of the ECB. Draghi said that "if oil feeds into other prices, that could generate exactly what we want to avoid, namely a spiralling downward phenomenon" for wages and prices. Mark Carney of the Bank of England, says he will see "how things evolve." The U.S. Federal Reserve might slow planned rate increases in 2016, if inflation remains well below the target of 2%, and conditions indicate adverse effect on the economy.

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Daniel Altman's proposal for a tax on wealth over $1 million. He makes the case for taxing wealth not incomes to reduce inequality as this is where the situation in terms of inequality has worsened for the U.S. in recent decades. To support this proposal Altman cites the change in the U.S. Ginni coefficient, which measures inequality. The Ginni coefficient is anumber from 0 to 100 which goes up with higher income inequality. From the late 70's to the 1990's, the Cnesus Bureau showed this to be in the low 40's. By 1992 the Ginni coefficient went up to the mid-70's, according to the Federal Reserve data. It increased to about 80 in 2010. In 1992 the top 10% in the U.S. population controlled 20 times the wealth of the bottom 50%. By 2010 this figure triples to 65 times. and the graduated income tax even if it redistributes a small share of the wealth does little to affect the trend of wealth extremes from building up and threatening the social fabric of America, reducing mobility and opportunities for the bottom 50% to unprecedented levels since the 1950's. ...

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About 65% of voters reject the 1:12 Swiss Fair Pay Initiative supported by the Social Democratic Party, only 34% support it. The Swiss government, parliament and business community opposed it on the grounds that it would make Switzerland less attractive for companies and have an impact on jobs. The earlier Minder initative to limit pay passed after public disapproval of a large retirement package for the retiring CEO of Novartis announced at the time.

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Kristof says social ills- the lack of stable marraiges, drug use, poor day care resources- compound the problems of lack of education beyond high school in America's white underclass. The lack of good manufacturing jobs and lower wages have hit people with only a high school education the hardest. Two decades of decline in good manufacturing jobs with globalization have hit this part of the population in the U.S. hard creating increasing inequality in America. He sounds a Moynihan type call to the plight of America's poorest white communities.

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Johnson Controls offered $1.25 billion for Visteon's auto interiors and electronics businesses. Visteon is reorganizing under Chapter 11 protection. Johnson Controls CEO, Roell, says the combined operations would give global scale and complementary capabilities. For Johnson Controls there are particular advantages to combining the Visteon operations in China with its own operations there, resulting in scale and combined revenues for China of $7 billion. Johnson Controls says Visteon's main customer and joint venture partner support the acquisition.