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GM and Ford improving in reliability while Toyota drops in the reliability list.

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Problems President Buhari of Nigeria faces problems with the Avenger group in the Niger Delta and disruptions by the group in the flow of oil. As a result Nigeria now lags behind Angola in oil exports. The decline is about 25% in oil production compared to a year earlier.  Years of neglect and frustration in the south are fueling the movement- the Niger Delta people feel oil resources do not benefit their region and benefits going to politicians and people in the government. Buhari has not visited the Niger Delta and a recent trip was postponed leading to a a sense of alienation. The south is Christian and feels discriminated against by Buhari, a Muslim from the north.  Separatist sentiment is growing in Biafra. And the Boko Haram movement has led to 2 million refugees in the north of the country. The result is that Nigeria faces a crisis.

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Nour Malas and Joe Parkinson report from the town of Makhmour, retaken by Kurdish Peshmerga forces following airstrikes on ISIS militant positions. The crisis situation 20 miles from Erbil, capital of the Iraqi Kurdistan region and the coordination between Iranian advisors, U.S. military advisors, and the Peshmerga to push back the ISIS. Peshmerga say young Sunnis in the town joined the ISIS in droves, something never seen before. It also reveals the situation after the failure of the Maliki administration to build a state with support from all parts of the Iraqi population- Shiite, Sunni, Kurds and tribes- leading to the radical alienation of Sunnis. The late awakening of Iran, the U.S., and moderate Iraqis both Sunni and Shiite, to the dangers of the Maliki policies. The unraveling of the decade of Iraq rebuilding by the U.S. in such rapid manner leads to the stepping down of Maliki and beginning of a new non-sectarian approach and policies. The vacillating in the Obama adminstration's policies towards Syria and Iraq leads to a lack of direction in the region. ...

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Krugman points out that a centrist solution is not the panacea it sounds. A lot depends on what it is and what is seen as centrist, if it really is centrist, and if it makes sense. A centrist proposal that leaves out tax expenditures but is different from the positions staked out by the factions on both sides of the political spectrum, and sounds moderate may not be the right solution.

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House Majority Leader Eric Cantor talks with Joseph Rago of the Wall Street Journal. There is a fundamentally different world view between Obama and Cantor. Cantor does not hesitate to present his view and says President Obama did not like to be challenged on policy grounds in debt negotiations, leading to the famous "I'll call your bluff Eric" remark by Obama. Cantor sees no chance of reaching an agreement with Obama that would go towards solving the fiscal crisis and feels it would be best to focus on incremental wins. He says of the Obama-Boehner deal that it did not address the problems with Social Security and Medicare. Without the transformational changes that are needed in those programs he did not think it was worth the cost. Cantor is mainly responsible for the Republicans not agreeing to include revenue increases in the negotiations or the final deal. Cantor says the super-committee part of the deal which has to come up with savings, will only lead to incremental progress- considering the huge divide that separates their world view and that of President Obama. The real fight says Cantor is to prevent President Obama from getting re-elected....

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The Washington Post-ABC News poll of August 29- Sept 1, shows 60% of respondents disapprove of the way the Obama administration has handled the U.S. economy. Of these 60%, half "strongly disapprove." Two to one the respondents say they are worse off today financially than at the beginning of Obama's term in 2008. This is the response to the famous Reagan question for Jimmy Carter- "are you better off today?" On the issue of the size of government and services, only 38% of respondents say they want to see a larger government with more services, and 56% say they want to see a smaller government with less services.

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This editorial from the Times after the New Hampshire Republican primary- in which rival candidates attacked Bain Capital- says that leveraged buyouts by private equity firms like Bain Capital were only one of the causes of the growing income inequality, and by no means the principal cause. And they had little to do with the subprime mortgage crisis that led to the financial crisis and recession in 2008, which aggravated the income inequality. A serious factor was the lowering of wages in manufacturing in competition with lower wage countries in a globalized economy and the decline of good manufacturing jobs over three decades. The increase in low wage jobs in the retail and service sector with the decline in manufacturing did little to arrest the growing gap in wages.

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The Volcker rule is named after former chairman of the Federal Reserve, now 82 year old Paul Volcker. In its complete form it would ban banks from investing in trading activities. But with Treasury Secretary Geithner and economic advisor Summers being part of the team that supported deregulation in banking, the Volcker rule was put in a diluted form in the proposed financial reform bill. Only after it was supported by financial leaders with long years of experience, such as John Bogle, Nicholas Brady and William Donaldson, and with active participation by Volcker, did the Volcker rule in a modified form get the support of Congress and the White House. What grade does it get from Paul Volcker? A B not even a B+ says Volcker. Volcker regrets his earlier silence on this issue. His view is that there is a sense of nervousness about the long term, and this is justified. He says a lot will depend on a 10 member regulatory council that is created by the bill, and all depends on how tough and vigilant it is on a day to day basis with the banks. Analysts share Volcker's concern about "the certain circularity in this businesss," where things are going well for some time followed by another crisis. Volcker's concern is that the bill doesn't prevent bank's from getting into activities such as investing in hedge funds and other similiar activities....

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Flexibility from the IMF, the ECB and the EC in negotiating new terms for Greece after the June 2012 elections and initial efforts for revising the March 2012 loan agreement.

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Greek tax evasion is estimated by three economists who studied data from Greek banks at about $11 billion based on a 40% tax rate, a third of the country's annual deficit for 2009. Unreported income is estimated at $28 billion. Doctors, dentists, lawyers, architects, engineers are the biggest groups underreporting income. Greece's parliament took up a bill in 2010 but the bill failed because of oposition from these groups. It remains to be seen if the Samaras government with support of the IMF-EC can take action similiar to that taken by the Monti government in Italy to go after tax evaders. By cutting the minimum wage and incomes of lower income groups disproportionately compared to cracking down on tax evasion and protecting incomes of higher income groups the economic plan for Greece proposed by the IMF-EC and the Greek government becomes unworkable and threatens the social fabric. By not raising this issue Germany's media and government have appeared callous in their pursuit of austerity measures as working class Greeks protested in Athens in 2011-2012, even though some of the issues raised by the Germans are legitimate. France and Italy are imposing a wealth tax to cut the deficit but this is not taking place in Greece. Global financial media has also not reported adequately on these aspects of the problem in Greece and Italy....

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This editorial in the NYT calls for the IMF and the EU to rip up their I.O.U.'s after five years of debt negotiations with Greece and a contracting Greek economy. German public opinion looks at it differently having shifted to favoring Greece's exit from the euro. Chancellor Merkel says "if the Euro fails, Europe fails," what she means by this is that the economic responsibility of countries in the eurozone is a condition for the Euro to succeed. The two sides are far apart as Greece faces a "yes" or "no" vote to remain in the eurozone in the July 5, 2015 referendum.

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The IMF's estimate of extra aid needed for Greece to meet the damage done in the first 6 months of 2015 is $60 billion euros ($66.6 billion). The additional aid required is because of the worsening of the economy under the Tsipras Syriza party administration in the first half of 2015, the collapse in the negotiations, loss of trust, the imposition of capital controls, closing of the banks, and the growing uncertainty created by the referendum of July 5, 2015 on the debt talks and membership in the European Union. This may leave Greece worse off than before, as the cost of the cuts at issue in the talks were significantly smaller, and the small gradual improvement in the economy under the Samaras administration in 2013-2014 has suffered a serious setback. This is an unfortunate setback as Greece was allowed the needed flexibility on the most important points of the percentage of surplus and dateline, and cuts in the public sector employees.

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As the federal revenues rise to about 18.1% of GDP (close to historical rates after return to growth) and outlays to offset the effects of the 2008 recession diminishing, the deficit is forecast to drop to 3% of GDP in 2014, and 2.6% in 2015, close to the average for the last 40 years. The deficit is estimated to be total $514 billion for fiscal year 2014, declining from $1.4 trillion in 2009. Real GDP growth (adjusting for inflation) of 3% is forecast for 2014-2017. In 2018 and the years to 2024 the deficit will increase because the pace of growth slows, and spending will increase- slower growth of the labor force as the population ages, increasing health care costs, subsidies for health care, and increasing cost to service debt. Outlays other than for health care, Social Security and interest payments on debt for year 2016-2024, are set to be the lowest percentage of GDP since 1940, according to the CBO report in 2014. Debt will increase to 79% of GDP by 2024 from an estimate of 74% for 2014. CBO projects unemployment only slowly decreasing, remaining above 6% till late 2016, with the rate of participation in the labor force- lower now because many people have opted to not look for work discouraged by the job prospects- slow to recover....

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Lagging growth in GDP per capita, productivity growth, in Italy, with small family business unwilling to take risks for growth, and bureaucratic hurdles for business. To get an idea how Italy has lagged severely behind other countries in Europe, consider that GDP per capita increased by 28% in Spain, and 22% in France, compared to only 8% in Italy during the 20 year period 1993-2013, according to the Conference Board. Productivity growth measured by GDP per hour worked for Italy showed growth of only 13% in that 20 year period, compared to 30% in France and 23% in Spain. Since the 2008 global financial crisis the Italian economy has shrunk by 9% and growth is barely 1% in 2014. During 1993-2003 top performers Germany showed 31% increase in GDP per capita and 32% increase in productivity growth, the UK showed 44% increase in GDP per capita and 38% in productivity growth. Because of slowing population growth GDP growth has to come from productivity increases in Europe. France is the strongest in terms of productivity with $59 of GDP per hour worked, UK $51, and Germany $57. Italy at $45 has fallen behind Spain at $50. Conference Board statistics show GDP per capita in inflation adjusted, purchasing power adjusted 2013 dollars at $35,847 for France, $40,868 for Germany, $30,145 for Spain, $39,904 for Britain, and Italy lagging behind at $31,386. Most of the gains were made before 1993 for Italy, whereas Spain surged in the period after 1993 only slowing after 2008. The struggles in the U.S. auto industry showed how well meaning changes for labor in the early postwar period if not adapted to changes in the global economy decades later can lead to sharp decline before adjustment is made. In Italy well meaning labor laws in the early postwar period not adapted to changes in the global economy decades later, combined with cultural behaviour of entrenched group interests, and a bureaucratic government, have stifled growth and productivity....

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Speaker Boehner's difficulties getting Republican votes in the U.S. House of Representatives. 151 Congressmen and majority leader Cantor voted against the McConnell-Biden fiscal cliff agreement of Jan. 1, 2013.

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Under the McConnell-Biden fiscal cliff deal of Jan. 1, 2013, $620 billion is raised for deficit reduction over 10 years. This is made up of $395 billion from raising the top marginal income tax rate to 39.6% from 35% for the top 1% of filers who make $450,000 for couples or 400,000 for singles. Raising the top rate on capital gains and dividends to 20% from 15% raises $55 billion. Limiting the personal exemption and itemized deductions on incomes over $250,000 is a key component as it raises $150 billion. This reduction of tax expenditures was recommended by Simpson-Bowles deficit commission and Republican advisor Martin Feldstein, with more money raised under their proposals than the current proposal which follows the Pease format. Under the Pease limits named after a Congressman who proposed this in the 1990's, 3% of the amount above the threshhold income is deducted from the total deductions. Feldstein's proposal limited deductions to 2% of adjusted gross income. Romney offered a plan to limit deductions to $25,000. Finally, increasing the estate tax to 40% from 35% raises $20 billion....

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Liberal groups feel president Obama has lost the leverage he had after the McConnell-Biden fiscal cliff deal of Jan. 1, 2013, saying this only sets the stage for talk of spending cuts.