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Mexico sends 80% of its exports to the US, and China a significant $439 billion in additional exports to US, which makes it incredible that for so long it did not take effective action to stop fentanyl flows, and Mexico allowed migrant trafficking across it's borders through 2016-2024. Even in the face of this becoming an explosive issue in the US with DJT elected in 2016 and the Border Wall being built. A silent but still existing in plain sight idea that the US would tolerate such flows became part of the culture in media outlets in the US and Europe and China and other parts of the world, even when there was a storm of discontent building about manufacturing shipped overseas hurting communities in the US since 2010, with added burden of safety endangered in these neighborhoods from fentanyl, drugs and illegal migrants. What worsened this situation and pain in the US was the idea that somehow it was the US's fault, an incomprehensible disdain for the US, US that enabled the modernization of China, Mexico, and Canada's economies. China sends $439 billion in exports more than the US does to China (US exports $143 billion China $582 billion in 2024). It is only surface presentation of indignation of face saving that these trading partners are showing when the real facts point to an extraordinary and incomprehensible disdain for the US as a nation in decline. There is a feeling in parts of Europe of American disdain for  Europe, without mention of the disdain for the US in Europe, China, Mexico and Canada and other parts of the world. Particularly disdain for neglected communities in the US that have suffered for far too long under previous administrations of Clinton-Bush-Obama with shipping of manufacturing and jobs overseas and inaction on drugs and illegal migrant flows. The EU Canada retaliatory approach has not worked. When DJT proposed doubling the tariffs imposed by US in the face of Canada EU retaliatory steps, the EU and Canada pulled back. Part of the reason is that in the case of Canada it is an economy one tenth the size of the US. The other is that there are real concerns on the US side that Canada EU are not playing fairly in trade. And Canada, Mexico, China, have not stopped the flow of fentanyl into the US.  ...

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Chinese president Xi's determination to make good on the slogan "Housing is for living, not for speculation," by imposing a property tax on homes in 30 cities, is facing resistance within the Communist party and from local governments. Mr Xi hopes to squeeze out the excesses of the adoption of capitalist market systems in China since 2000. China's government opted to get feedback on this idea and the feedback is largely negative forcing the government to scale it back and look at other alternatives such as affordable housing to make home purchases accessible.  Some reasons for the pushback are that it is becoming a social stability issue and risks alienating officials within the ruling party and homeowners. The fact is that 90% of urban Chinese families own their homes and housing related industry makes up about a third of China's output. Also significant is that 80% of China's wealth is tied up in real estate. What could happen is that if housing prices drop in China urban consumers might cut back on spending because they feel poorer. Party officlals advised against introducing property tax in 30 cities. Now it is scaled back to ten cities, and a new law could take till 2025 to introduce property taxes in the whole of China. Cities that are likely to be used for the property tax now are Shanghai, Chongqing, where an annual charge is levied on second homes since 2011. Cities added to the list would be Shenzen, Hangzhou, China has financed much of its industrialization through land sales by the Communist local governments in a country where land ownership was with the national Communist government after the revolution in 1949.  Mr. Xi wrote in Qiushi party journal that "we should actively and steadily promote the legislation and reform of real estate tax, and do a good job in the pilot work." Local communist governments get about one third of their revenues from selling land to property developers, and they are anxious that a tax on real estate would make demand and price for the land they sell to drop drastically. To get some idea of this- the local governments had $1 trillion in revenues last year. ...

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Bill Gates resigned his seat on Microsoft Board on March 13, 2020. This report in the WSJ looks at the situation at Microsoft in late 2019 when members of the Microsoft Board hired a law firm to conduct an investigation in late 2019 after a Microsoft female engineer's letter. This was a company that Gates founded and which expanded through acquisitions of other smaller companies.  The same day he resigned his seat on Berkshire's Board led by Warren Buffett. Mr. Gates started Microsoft in 1975, was CEO till 2000, and chairman till 2014. He then turned to work with his Bill and Melinda Gates Foundation.   Microsoft has market value of $1.8 trillion, Apple a value of $2.1 trillion.  The Bill and Melinda Gates Foundation has assets of $37 billion income of $53 billion, and the personal assets of Bill and Melinda Gates have an estimated value of $130 billion. One of the mistaken assumptions is that any one foundation such as the Bill Gates foundation has the resources, knowledge, technologies, expertise and leadership to tackle problems that confront large countries such as the US, India, or a bloc such as European Union. Imagine some billionaire taking on the role of a Franklin Delano Roosevelt in tackling the Depression or a billionaire tackling the problem India faces today in public health. It is only governments of the US, India and large nations such as the UK that can pull together the resources needed and the cooperation needed between its industrial base companies to achieve goals for public health. This type of effort can pull together resources of trillions of dollars that no one company or billionaire or group of billionaires can put together, and pull together massive resources of engineers, scientists, and other people across hundreds of companies that cannot even be measured. This is one of the lessons of this pandemic because the WHO was left with the job of handling the pandemic and governments of US, France, UK, Germany, India, Russia and leading nations had retreated from their essential role as guardians of the public interest in people's health and left much of the task to others. As they reassume this role this needs to be given a firm and solid footing and lessons learned. ...

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This is an highly important interview by the BBC with U.S. Trade Representative Robert Lighthizer. We have followed the path breaking work of Mr. Lighthizer at Lyrarc.com over 10 years, and have great respect for his effort on behalf of the American people and American workers. Here are some of the remarks he made at the end of the term of the Trump administration. Lighthizer says the objective of trade is not just efficiency, it must be working men and women. This is the shift that Mr. Trump has made. It will be a lasting change as leaders in both parties see this as important, says Lighthizer. There are companies that immediately want to go back to the way things were but Lighthizer says members of both parties will prevent this. This will be a lasting change. Democrats in particular could soon face strident criticism that they have let down the working class from within their party, increasing the risks of the party to represent large parts of the American population. Lighthizer says its not accurate that we started a lot of trade wars, we have simply enforced our laws and insisted on fairness for American workers. There was really no trade war in the improved NAFTA deal in the interests of American workers, which also enhanced worker protections in Mexico, for a win-win on both sides of two neighbors. "We want strong communities in the U.S. and if that means T-shirts will cost another nickel, they will cost another nickel," sums up the way Lighthizer sees it, and the way all of America would see it if one regained the idea of government for the people, of the people and with the people. "We are proud of what we have done to reorient American trade towards working people in the U.S. and less towards outsourcing and corporations," says Lighthizer. And he says that was important to do. Lighthizer only highly underestimates what he has done for America and American workers.  A lot remains to be done. The about $800 billion in overall trade deficit the U.S. has with China, Germany and the rest of the world is not sustainable, he says. The job only gets harder now that the direction is clear.    ...

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Yaroslav Trofimov gives his reflections on what the war means for Russia in this Essay in WSJ, and the sense within Russia that the war itself was a mistake. A result of miscalculations and a result that leaves Russia in no way better than it was in 2021 before the conflict. Hard won economic gains achieved by Mr. Putin during the last two decades have in fact been compromised by the conflict. No discussion has even been done on the transition away from fossil fuels that have been accelerated by the conflict. This is particularly relevant for Russia where the question of redundant fossil fuel assets during the rapid transition to renewable energy is a problem that needs to be tackled. The Ukraine diversion in this way affects the Russian economy and acts as a distraction from important economic goals. Global public opinion is also affected in ways that do not look favorable for Russia the longer the war goes on particularly the effect on food insecurity in poor countries, and energy security in Europe for poor households, the senseless destruction of infrastructure in Ukraine and millions of women and children displaced, all creating a sense of overwhelming moral failure. Mr. Modi of India is reported by FR24 to have told Mr. Putin at a meeting on September 15 that "this is no time for war." This is shown on today's pages in Lyrarc. How could it be a time for war when the pandemic has taken lives of over 1 million people in the US, over 2 million in Europe, millions in Asia, Latin America and Africa, and the world is only now coming out of it. The competition is not between countries for major power status but between countries on achieving better lives for its people, stronger economies, and better job, health, infrastructure and services to ordinary people, tackling problems on a common basis such as climate change. In most situations even the advanced countries of North America and Europe are facing the same problems faced by middle income countries such as China,Russia, and developing countries such as India- how to combine market economy with State participation in the economy and government ensuring fairness to all, better distribution of incomes and wealth, ensuring that there is a level playing field for all and opportunities for all. ...

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John Thain is interviewed by the WSJ's Andrew Johnson and Aaron Luccheti. He expresses regrets about taking the Merrill job.

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At the site of the crash in Ukraine of Malaysian Airlines Flight 17 one year later.

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China's push in renewable energy with large 10,000 MW wind farms and solar energy panel manufacturing. China has built the world's larges solar panel manufacturing industry by exporting 95% of the product to Europe and the USA. WHen CHina built its first solar power plant in 2009 it required 80% of the parts to come from domestic manufacturers. And when the Chinese government took bids for 25 large contracts to build wind turbines, all contracts were won by domestic companies. One energy NGO expert in CHina says that this is because Chinese government investment in wind and solar energy even though it is much costlier than coal, cahn happen only if it helps build up the domestic industry in renewable energy.

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Anti-dumping tariffs imposed by the U.S. on solar panels from China. This applies only to solar cells produced in China. Solar cells from other countries can still be used in assembled solar panels without being affected by the new tariff.

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China's perception of the US as a declining power is a miscalculation, yet it appears to influence Chinese policy in 2010-2011.

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A black supporter of Obama, Ms. Hart, tells him- " I'm exhausted of defending you, defending your administration. I've been told that I voted for a man who was going to change things in a meaningful way for the middle class." This encounter happened at an hour long town hall meeting on CNBC, which John Harwood moderated. Harwood asked Obama whether he was having difficulty connecting with average Americans because of attending Ivy League schools and spending part of his youth overseas. The incident reflects the frustration and disappointment felt by average Americans with the Obama administration and with Obama.

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The German Statistical Office reported that GDP growth in Germany was 0.1% in the second quarter of 2011. This compares with GDP growth of 1.3% in the first quarter. This is slower than Italy which came in at 0.3% for the second quarter. France had no growth in the second quarter. The German Statistical Office said the causes were: lower household consumption and construction investment, imports rising faster than exports and a buildup of inventories. Analysts at Commerzbank say the warm spring resulted in construction activity starting earlier and taking out some of the growth in the second quarter, in its absence the growth would be 0.4% for the second quarter. The statistics office said an additional 553,000 persons were added to employment compared to the prior year, with a total of 41 million employed.

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The increasing competitiveness of Mexico compared to China and India as an investment destination in 2013. Foreign companies are investing heavily in Mexico because of investment advantages in labor cost, supply of engineering and management talent, and proximity to the U.S.

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About the reorganization of IBM under Sr. Vice President Robert Moffat Jr. that is underway. The idea is to make IBM more efficient by increasing the productivity of its people and reduce costs. There are over 200,000 people in the IBM services business. Operating margins increased by 2.3% to 10.3% with productivity improvements in the 1st quarter of 2006. IBM's revenues declined by 1.2% in the 1st quarter to $11.6 billion. This IBM Tech services restructuring will be watched closely by Indian IT and IBM's competitors. Moffat hopes to attack the IT tech services business with a new format to improve productivity and reduce costs, and bring IBM' strengths such as research capabilities to bear. The format is being a virtual factory with competency centres of excellence across the globe. The question is can Moffatt pull this off and convince a bureaucratic large organization to overcome inertia and do things differently. Especially as Indian IT is smaller and not yet affected by Big Company Syndrome. What Moffatt is attempting to do is to create a virtual global factory with specialized centres of compency in different global locations so that work can be transferred from one location to another- much as we see in the automobile industry- based on who does best what at what cost. Nilekani of Infosys, says American competiitors are "seeing it as a compelling threat after years of putting their head in the sand." They are responding to megatrends but not fast enough, according to Business Week. This may be attributable to the fact that Indian IT is younger, smaller, faces more competition inside India, and is more agile for these reasons compared to an IBM or an EDS. Hamm points out that IBM is shifting to a new posture as a globalized business, one that puts behind it its days as a multinational company or MNC, no more MNC geographically based independent country businesses, not an outsourcer as frequently assumed when IBM shifted some jobs overseas recently. The new IBM is an organization that builds on competency centers across the globe with concentration of skills and talent in different locations worldwide. It uses the competency centres to pull together the best people and sequence of operations to meet customer needs. ...

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Citing the drop in oil prices (with housing having to hit bottom at some point) and the stimulus package, Alan Blinder, says the recession should end by the 4th quarter of 2009. This is in sharp contrast to Ferguson's, Spence's, Roach's and Reinhart's view on the editorial pages of the NYT. The difference is whats striking. Ferguson, Roach and Reinhart say 3-4 years, Spence, is of a similiar view, if actions taken don't work the way they are expected to, and they don't put any dates down because too much is happening in the economy, with so much uncertainty. The titles of these three economist's pieces are also instructive, Beware of False Dawn by Roach, Rule of Four by Reinhart, and Spence's A Long Goodbye. Here is Blinder not only saying there won't be any surprises from now on (who knows for sure?) but also puts down an approximate time. He also ventures an exact impact of the stimulus, of 5% impact on real GDP in 2 years. With all that has gone wrong under Greenspan's leadership, one wonders about the credibility of being Vice Chairman of the Federal Reserve during Greenspan's time at the Fed. And as if to ridicule his own forecast he says without any hesitation: "But here's the rub. My forecast assumes that no other (big) shoes will drop. Sad to say, shoes have been dropping like rain." Whats the use of a forecast that has a remark like that tagged on to it, and how responsible is a statement that doesn't suggest caution, when businesses and jobs have been destroyed through overoptimistic forecasts and lack of decisive action. A case in point being General Motors, and the government and the American people are being asked to put $100 billion into General Motors. This is no time for reckless forecasts or for any but the most carefully thought through analysis. Lives and livelihood depend on it. Is this what the President means, when he talks about an era with a lack of responsibility in government and in companies, and those in leadership positions in the country, for their statements and their actions....

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Pensions amount to over 10% of GDP in Hungary, and its becoming harder to run these deficits, as international investors are no longer buying the bonds sold by the government to finance some of these deficits. In Eastern Europe, only Poland and Slovenia have as large a portion of GDP going into pensions. And for a population of 10 million people, Hungary has 3 million pensioners, far too many for the system to be able to support them. It is easy to join the pension system at an early age. The average Hungarian retires at 58, and only 14% of the people 60-64 are working. Getting disability, even if the disability does not prevent working, and becoming a pensioner, is considered attractive in Hungary as the pension payout at about 70% of wages or higher is generous. The pension is about 80,000 forints on average or $350 amonth, and the untaxed pension is close to the average after tax income of $500 in Hungary. Four million working Hungarians support the 3 million pensioners. And employers pay ahefty amount, discouraging new investment in Hungary. For an employee to take home 400,000 forints amonth payroll and income taxes can mount to 1 million forints. Politicians under the Soviet sponsored regime and more recently in the post soviet period have used the pensioner socialist bloc to win elections and are reluctant to disturb the situation. And under the privatization schemes, newly privatized companies simply dumped people off the state payrolls into the pension system , as generous payouts made it an attractive alternative to working. Now at a time when jobs are being lost and the economy is in trouble Hungary is having to address these generous pensions and because of the already strained finances has no stimulus in place for the economic downturn. Hungary imports heavily from Germany and Hungarians have borrowed heavily from Austrian and Italian banks. The deteriorating economic situation has led to a steep decline in its currency. And there is a fierce debate going on in the EU about rescuing Hungary. Deterioration in Hungary could create crises in other Eastern European countries like Czech Republic, Romania and others....

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Most of the problems in Eastern Europe follow from overborrowing by the privae sector , consumers and corporate borrowing, in foreign currencies. According to David Roche of Independent Strategy, private sector foreign currency debt rose to 126% of foreign exchange reserves between 2002 and 2007. Roche is former head of research and global strategy at Morgan Stanley. As a result he says, 50% of household debt is in foreign currency in Hungary, 30-40% in Poland and Romania, and over 70% in the Baltic states. The debt in lowcost foreign currencies like Swiss Frances, Euros, and even yen, also expanded in the corporate sector. BY mid 2008 non-financial corporate debt in foreign currencies reached over 45% of corporate laibilities in Bulgaria, over 30% in Ukraine and Baltics, and over 20% in Hungary and Russia. To get an idea of the way the foreign subsidiaries of major western european banks expanded their lending, note that lending to homeowners between 2002 and 2007 doubled each year in Romania, rose 60-80% in the Baltics and Bulgaria, rose 20-30% in Poland and Hungary. And lending to corporations grew 20-30% a year. There is aclear suggestio of reckless lending and reckless borrowing in these numbers just as was seen in the way mortgage lending ocurred in the USA. The history of this kind of lending goes back to the reckless lending in Latin America in the eighties that led to lost decades many years before, and is a recurring story. Now Roche sees loss of GDP of 5%-6% for Turkey, Russia, Romania, Czech Republic and Poland, and 8-10% in Hungary, Bulgaria and the Baltic states. That would take 40% of foreign exchange reserves in Turkey,Czech Republic, Poland, Hungary and Ukraine. And this will have a human cost in jobs lost, crime, poverty, and years of progress lost in these countries. And it will ricochet back to the parent companies of the European banks that did a lot of this lending, with $130 billion additional losses, and a loss of 10% of tier one capital (equity capital plus disclosed reserves) of Western European banks....