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Fisher and Taub of the NYT look at the populist politics in Europe and the U.S. following the French election first round. Trump won in the U.S. with the deep polarization of politics in the U.S.- leading to the Republican Party to decide to support him to avoid the result of four more years of an administration led by Democrats, and with the support of discontented voters in midwestern states with falling living standards. The situation in Europe is different as the mainstream parties have united in the past to block populist politicians with negative messages on immigration and an open economy. This happened in the Dutch election, by the co-opting of the nationalist message of populist politicians by mainstream parties and mainstream politicians, and is likely to continue in the French and German elections in 2017. Fisher and Taub point to another development that is happening- shifting the debate to ethnonationalism vs. open economies, which has happened with Brexit and the UK Independence Party. They cite the 2015 British elections in which UKIP won 13 percent of the vote, as having influenced prime minister Cameron to call for a referendum on Brexit, in a effort to revive the fortunes of the Conservative Party. In the end this resulted in the 52 percent vote supporting Brexit.  Another way of looking at the populist movement is that with Trump it called attention to trade and the way working class Americans were being marginalized especially in the industrial midwest. With this problem being addressed in a Trump administration and a reviving economy, the mainstream parties have an opportunity to reassert themselves. In Europe the AfD called attention to immigration issues, and the Merkel coalition government of CDU and SPD by making changes such as the deal with Turkey, and returning economic refugees, is able to assert the role of mainstream parties. In Britain the situation could be a result of a brash decision by a Conservative prime minister Cameron, in making a bad miscalculation, that has put Britain on a course that is likely not in its best interest. The Brexit referendum yes vote galvanized opinion by showing an endless stream of refugees in their advertising- a development following the opening of borders by Germany and Austria to address the plight of Syrian war refugees. That situation has passed and is unlikely to happen again as both the SPD and CDU parties in Germany have pointed out that this was a one time situation that they responded to following the exodus from Keleti rail station in Hungary under special circumstances. With this kind of perspective populist politics can be seen as reflecting other voices in a democracy, that are heard and responded to, yet keeping the sense of balance and openness necessary in today's global economy and societies. This is also the perception of Germany's outgoing popular president Gauck in his final address, pointing to the need to listen to other voices in a democracy, and the need for openness in a democracy, as well as democracies always in the process of Becoming and evolving to adapt to new situations in economy, society, and politics.     ...

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Powell needs agreement of others on Fed Board to set US interest rates August 2025. There is now a divergence of opinion with some Fed members looking to lower interest rates in coming months to aid the US economy as it resets the terms of world trade for a level playing field for all, something that had not happened by the ineptitude of previous presidents.

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The US and the EU, China, poor developing countries are following diverging paths. The US in investing heavily in its infrastructure rebuilding under president Biden and its economy is growing, unemployment declining compared to Germany and China where the economy is slowing and facing hurdles. Poor and middle income developing countries in Africa and Asia, Latin America face the hurdles from high interest rates and rising debt burdens. India is also increasing growth by building  infrastructure and manufacturing capabilities.

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Support from U.S. Federal Reserve chairman, Ben Bernanke, and IMF head, Christine Lagarde, for Japan's Abe government's efforts to reduce the value of the yen. Bernanke says policy conducted with a view to improving the domestic economy is good policy.

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The EU with its $15.4 trillion economy is a bloc comparable in size to the U.S. $19.4 trillion economy. The French State Secretary for Europe, Mr. Lemoyne, says EU does not need to be worried about the way the USMCA, new version of NAFTA was negotiated with pressure from president Trump, as the Europeans are the largest trading power in the world. The EU exports to the U.S. are $252 billion, and up 5% in the seven months of 2018 over the preceding period. The U.S. by comparison exports $153 billion which has remained at the same level with a $600 million decline in the same period in 2018.  President Trump has put pressure on the EU to help improve the trade imbalance. Soya bean exports are pointed to by the EU as this has doubled in 2018, after China responded to U.S. sanctions by limiting soyabean imports. President Trump has stated his intention to impose tariffs on European car imports - trade worth $60 billion- to get the EU to offer concessions.  ...

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New information shows a crisis is developing in higher education as student debt passes $1 trillion with the unrelenting rise in the cost of college. Higher debt levels is leading to higher droput rates. According to think tank Education Sector, 30 percent of college students taking out loans dropped out of school, compared to 25% ten years ago. And work can be a large factor as students take parttime jobs to lower the loan burden- half of college dropouts attributed dropping out to work, according to a 2009 study by Public Agenda. It also adds another burden to the productive potential of the U.S. economy. The director of the Center on Education and the Workforce at Georgetown University, Anthony Carnevale, estimates the cost to the U.S. economy at half a trillion dollars in terms of skills not available for increasing economic output and income lost for dropouts.

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Better management of the economy has sustained Russian economic growth in past crises such as in 2008 when oil prices collapsed. Russian central bank chief Nabiullina has helped steer the economy holding US dollar reserves to just 11% the rest of $600 billion reserves in renminbi, euros and gold. Yet the war in Ukraine has introduced limits. With labor shortages and the technological isolation the war in Ukraine is setting new limits on economic growth, says the WSJ. Going forward the limit is about 0.9% economic growth a year. Before 2008 the Russian economy growth was at 7% growth a year, it dropped to 3.5% after the invasion of Crimea in 2014. With China facing deflationary trends, little recovery in growth, this shows that geopolitical tensions are changing the prospects of important economies. With globalization dimming the prospects of Singapore and UK have suffered. The US is investing in growth, and Germany is following the US model.

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In a Washington Post-ABC News poll conducted June 2-5, Republican presidential candidate Romney receives more support than President Obama. Among all Americans Romney and Obama receive 47% each, among registered voters Romney leads 49% to 46%. Independent voters gave Romney 50% to 43% for Obama. The poll shows Obama is being viewed with increasing skepticism because of the economy. By 2 to 1, Americans say the U.S. economy is on the wrong track, and 9 in 10 see the economy as doing poorly. The poll also show a significant shift to Republicans being seen favorably for running the economy, 45% now see Republicans as being better able to tackle the economy, a 11 point increase from a March poll.

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Indian Foreign Minister Jaishankar visits Ahmedabad for the introduction of the new Gujarati language edition of his book, The India Way- Strategies for an Uncertain World. At the meeting to take questions on the Gujarati edition at IIM Ahmedabad,  Jaishankar said India is now the fifth largest economy in the world. During the Nehru period it was the 20th largest economy in the world. It now has the capacity to take a leading part in world affairs. In a few years by 2030 India is expected to become the third largest economy in the world. And with its economy integrated into that of the US economy in a way that no other economy has been it will make the US-India economy by far the largest of any economic combination in the world. Because both are English speaking and both are modern democracies, and the traditions of Lincoln and Mohandas Gandhi, of St Paul and the Vedanta with Buddhism deeply rooted in each country. This is the true meaning of the Indo-Pacific. As Jaishankar pointed out in Ahmedabad there is no point in the water that says here is where the Pacific starts- that is the reality. Once you are in the Indian Ocean east of Africa you can travel on the ocean all the way past India to Indonesia, the Japanese Islands and the Hawaiian Islands till you reach the western shores of the United States. For India, the US and Australia, and Japan this is the ocean pathways that they are committed to keep open and with the international rule of law for all nations. In renewable energy, in climate change action, in managing soil and water, in agricultural innovation, and in technologies of all kinds India can now lead the way. Scientific curiosity, learning curve, manufacturing and innovation, education that brings new skills for a large workforce, India can tap into the resources of the world and make its own contributions to this resource for all mankind.  ...

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Value added industrial output in China increased by only 4.4% in August, showing deteriorating economy. Fixed asset investment outside rural areas, was up to 5.5% in Jan-August 2019 compared to year earlier period. Premier Li Kequiang says "Against the backdrop of a complicated international situation and given the higher  base of comparison, it is not very easy for China to still sustain a medium to high growth speed of above 6%." 
China's economy expanded at 6.3% in the first half of 2019- the government's target is between 6 and 6.5%.

In the light of this situation in the economy China is taking aflexible approach to trade negotiations with U.S. trying to separate issues of competition and technology of the long run from trade, and seeking areas of agreement after the rhetoric of the past 6 months.

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Even though volatility is high in stock markets, the U.S. stock market has rebounded to levels in August 2019. The level on March 10, 2020 after effects of the coronavirus on the global economy was for the DJIA average in the U.S. to be at the level it was on August 14, 2019, as shown on the graph in the WSJ, in the neighborhood of 25,000. In the last quarter of 2019 there were steep gains in the Dow Jones averages that could not be fully explained, these gains have disappeared. Considering the suddenness of the crisis from the coronavirus in China, and the double whammy of impact on global manufacturing supply chains of first the tariffs on Chinese exports to the U.S., followed by the coronavirus, the impact on stock markets seen in this overall context is comprehensible. Particularly the sharp gains in the last quarter of 2019 which now appear to be muted. There is also some good news for economies such as China and India, which are large oil importing countries, and the rest of Asia, in the sharp drop in oil prices that helps cushion some of its impact on the global economy. For the U.S. this also happens at a time when the economy is in much stronger shape than at any time in the last ten years. ...

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Young Chinese spend freely like Americans. Some spend most or all of their paychecks each month in contrast to their frugal parents. This consumption helps China as its dependence on exports is creating trade tensions with the U.S. In the long run it creates high consumer debt to add to the debt problems in the economy and limits growth in China.

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The Fed votes 9-3 to cut the benchmark federal funds rate by quarter percentage point to between 3.5 and 3.75% in December 2025. US president DJT is pushing the Fed to cut rates as tariff policies are being implemented to cushion the economy as it adjusts to tariffs.

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Mexican president Nieto's poll numbers are at all time low of 24%, according to Reforma newspaper. He took office in late 2012 and has been hurt by human rights scandal of the murder of 43 students in the state of Guerrero, corruption issues, and failure to improve the economy. The invitation to Trump to visit Mexico left even people close to the president surprised, and was criticized widely inside Mexico. It is not clear what Trump or Nieto gained from the trip. As Trump continued his talk about building a wall on the Mexican border and having Mexico pay for the estimated $23 billion it would cost. He did this in a speech to supporters in Pheonix on the same day he met Nieto, showing the use of teleprompters and prepared script was not his way of campaigning. Just as the message to black people that Democrats take them for granted cannot resonate without the basic message delivered with compassion and understanding- such as done by the presidents Bush and Reagan- so also the message to Hispanic people is suffering from the same lack of empathy. Recent polls show only 3% of blacks support Trump. McCain and Romney gained only 4-6% in the U.S. presidential elections of 2008 and 2012. The message of the wall is also baffling as an election strategy. A Gallup poll in July 2016 shows only 15% of Americans opposing a pathway to citizenship for illegal immigrants, and only 24% of Republicans. There is another problem in the strategy. The rhetoric about walls and mass deportations, and the Trump temperament combined with handling of nuclear weapons is not winning college educated women in the suburbs with polls showing Trump lagging behind Clinton by about 20 points or 4 million voters with this group. It is hard to undo the damage done by this kind of rhetoric used in the primary elections as it gains distrust of voters. It would require a bad economy with illegal immigrants taking local jobs, and handling of immigration seen as weak, for such a message to gain some national traction. Both are absent for the most part with a steadily improving economy since 2012, lower unemployment, a tough enforcement policy on deportatons under Obama that exceeded that under Geoge W. Bush, and the talk of a wall comes with illegal immigration having declined steeply since the 2008 financial crisis. The real culprit appears to be elsewhere, the triple hit taken from hollowing out of the manufacturing economy that hurt the Conservatives in Canada, the insecurity created for older whites from the job losses and hits to net worth from the 2008-2009 financial crisis, and the increasing loss of access to health care and educational opportunities with high  costs. About 62 million households or the bottom half of the distribution in the U.S. have a net worth of about $10,000, a quarter of this group having zero net worth, according to the Federal Reserve's Janet Yellen at an Inequality Conference in Oct 2014. Problems no wall is going to solve, problems that built up over 2 decades, problems that will take a generation to fix.  It shows the tech miracle of the last 2 decades as a mirage for quality of life of the middle and working class. Tech as a tool to a goal, not a goal in itself, is the better way forward. ...

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Now that the trigger mechanism in the August 2, 2011 Debt Ceiling and Deficit bill is in place- with the trigger calling for 50% of the cuts of $1.2 billion to come from defense spending- thoughts are turning to how and what to trim, and what the overarching framework should be. Former Assistant Secretary of Defense, Joseph Nye, says there is a right way to trim Defense spending. The winding down of the two Bush wars could be used to cut ground forces to 1990 levels, trim the purchases of F-35 Joint Strike Fighters, make better use of drones and less costly technologies, and cutting health care costs in defense. This would not affect U.S. national security. What is needed now is also a framework of what the U.S. wants to see happen in its role in the world. Here Nye reminds readers that President Eisenhower decided not to get involved in Vietnam on the side of the French in 1954, saying it was more important to strengthen the U.S. economy. Its important to remember that this decision came only a couple of years after the end of the Korean War. The idea being the U.S. could not police different countries or engage without considering the big picture. In today's context this also means not engaging in nation-building in remote places and in environments that make it not worthwhile to engage precious resources. The U.S. says Nye should consider itself more in Reagan's terms of "a beacon on the hill." Another factor he alludes to is that 70% of the world's military expenditures are now made by the U.S. and its allies. This means there is great potential for burden sharing. Just as the U.K and France essentially combined their resources for achieving overall defense goals of the two countries to accomplish the same things that they did before, the U.S. can do much in combination with its allies. This helps frame policy and solutions for defense. Pearlstein offers policy and solutions for the economy, and Krauthammer offers policy and solutions for deficit reduction in the Washington Post, August 5, 2011, giving an overall picture of what the U.S. and Europe should strive for in coming years....

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US - EU Trade Agreement with 15% tariff on EU imports to the US and $750 billion in US exports over 3 years of LNG, oil and gas, semiconductors etc. Including military purchases. EU would invest $650 billion in the US.  Aircraft and their components, particular chemicals, semiconductor equipment, some agricultural products looked set to be exempted from the new tariffs placed by the US on EU imports into US. To even the playing field where German and Japanese cars had a free ride into the American market since 1980, 15% tariffs lower than the 24-25% proposed tariff will be place on German cars. Business in the US sees this as a least bad outcome says WSJ. Yet this ignores that the US gave special privileges to Japanese and American car makers to export into the US since 1980 with no corresponding benefit to the US in other industries or to the US auto industry. This gives the US industries and the US science and technologies opportunities to get back into the game of exporting, opportunities that the US gave to Europe and Japan since 1960. It also strengthens the US economy by helping restore the US as the industrial power it was from 1920-1980.  ...

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The discount for Canadian crude oil prices, because of higher shale oil output in the U.S. midwest and lack of enough pipeline capacity to get Canadian crude to Gulf Coast refineries, is affecting the Canadian economy. The lower price for Canadian crude was at about $20 per barrel lower than the U.S. benchmark price in April 2013. This discount has reduced Canada's GDP growth for the second half of 2012 by 0.4%, according to the Canadian central bank. The discount was as high as $40 to U.S. benchmark price for Canadian heavy crude in January and Febuary 2013. Continued discount is expected till enough pipeline capacity is created for Alberta's heavy crude to get to Gulf Coast refineries in the U.S.

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Germany's aging rail system, the Deutsche Bahn, will get a makeover with a 86 billion euro inverstment over 10 years. FOr years it has suffered from delays, broken bridges, older trains, and lack of modernization. As the economy slows down infrastructure investment which has suffered from the Tech years, is now back in popularity with the public mood shifting across Europe and the U.S. A current five year plan budgeted just 5.6 billion euros per year and is replaced with a ten year plan with 86 billion euros so that it sends a signal for the economy, but more importantly creates planning security for investments, and makes building sites cheaper to run. As a sign of the times trains running 6 minutes were considered as "on time" in recent years. Merkel's CDU was not pursuing infrastructure investment during the austerity decade 2008-2018. As finances are being cleaned up in Europe and the U.S. and the banking mess clears, the shrinking of banks such as Deutsche Bank as a vivid and educational example, and the mood of the public shifts away from the flashy Tech years, there is a sense of the value in the public mind of the investments in infrastructure that benefit all, that prevailed in the post war years. ...

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A warning from Britain about tax cuts and not investing in the US economy that could put the US in the same bad shape as Britain under the Tories with Trump/Vance tax cuts and high tariffs stifling the economy. Krugman, with his long experience in studying economic policy of governments,  says the unforced error for Britain was not even Brexit as much as it was the austerity policies put forward by Cameron and his finance minister Osborne in 2010. What it did was to push austerity policies when the right move would have been to invest in the economy and in public services. In 2010 he says the Greece crisis and eurozone debt crisis led to Britain adopting austerity when it was in a different situation. Britain's debt was in its own currency and at home. The British economy was just recovering from the 2009 banking crisis which meant that economic capacity was underutilized and more people needed to be employed. In this situation Britain instead of Cameron/Osborne austerity that starved public services and investment in infrastructure, jobs, needed to invest in public services. A decade and half later this has put Britain in a bad place with a weak economy and dilapidated public services. Britain lacks the courage and right policy of the Biden administration in investing in the economy with support from Congress, so that even Labour is not in a position to soon reverse the effects of this austerity policy. ...

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This Economist article looks at India-China relations and the Wuhan Summit between prime minister Modi and president Xi Jinping. It sees India's reluctance to follow a containment strategy in an historical light from the period in which India followed a non-alignment policy in the early post independence period under prime minister Nehru. During the period of the Eisenhower administration with Secretary of State John Foster Dulles India adhered to a strict nonalignment policy avoiding choosing sides in the Cold War. As a result U.S. policy tilted towards Pakistan during the Eisenhower administration. A balance was restored under president Kennedy, with Adlai Stevenson a close friend of India.  The short Sino-Indian war of 1962 led to a situation in which the U.S. backed India and improvement of relations. A semblance of non-alignment in foreign relations continued under Nehru's daughter Indira Gandhi. By 1990 with the opening of the Indian economy to foreign investment, the collapse of the Soviet Union, and the integration of China into the global economy, a new period of good bilateral relations with the U.S. and Europe was maintained. In 2017 the potential for a conflict in Doklam, Bhutan revived fears from 1962 in India. In 2018 After the U.S. administration of Donald Trump and Trade Representative Lighthizer imposed trade tariffs on China and restrictions on export of advanced technologies China pursued a policy of conciliatory relations with India. China's relations also improved with Japan and South Korea as the U.S. policy was unanticipated and seen as a significant change that would seriously affect China's economy. India's response was to pursue a policy of good relations with China and the U.S., even as the economies of the U.S. and India were drawn closer in India's pursuit of modernization.  ...

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A look at the economic collapse in Lebanon as reported in the NYT. Lebanon depended on foreign inflows of money for its economy and standard of living. The economy has collapsed in recent years because of mismanagement, corruption and sectarian conflict. A civil war in Syria. and wars in the Middle East hurt Lebanon's economy after 2011.  After Lebanon's civil war ended in 1990 the central bank decided to tie the currency lira to the US dollar at 1507 lira to the dollar. To be able to exchange lira for dollars the central bank had to attract dollars. To attract foreigners to deposit dollars the central bank head decided to pay 15% interest. With insufficient US dollars as dollars were also needed for imports, the central bank ended up paying depositors with dollars from new deposits, what is called a Ponzi scheme says the NYT. When these deposits stopped coming in 2019 people could not withdraw their money. Three developments after 2019 hurt the economy. The pandemic hurt tourism which makes up 18% of the Lebanese economy. The pandemic hit Lebanon hard. Then in 2020 a bomb blast hit Beirut port from an abandoned ship in the port destroying three large neighborhoods that could not be repaired. ...

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John Taylor, says Obama and Alan Krueger (Obama's new head of the U.S. Council of Economic Advisors), said some of the same things in early September, 2011, that were part of Obama's old plan to revive the U.S. economy. And the old plan has failed to produce results. The part that puts construction crews to work on the roads, railways and airports was tried earlier in the stimulus plan. Because of a lack of showel ready projects, and the state governments putting most of the money in their state coffers, this only increased infrastructure by a miniscule 0.05 percent of GDP, according to research by Taylor and John Cogan. Taylor's sees the moves by the Obama administration and the Bernanke Fed as not only being ineffective, but having the opposite effect of lowering investment and consumption demand through increased concerns about the federal debt, another financial crisis or the risk of inflation or deflation. The U.S. private sector has the money to make the investments that create jobs but their concerns have led to holding back. Taylor points to the need for a comprehensive economic strategy to replace these temporary interventions. The debt limit agreement of 2011 is a part of this strategy, and he agrees with reducing spending in a gradual way in a weak economy. The other parts of this strategy he says are entitlement reform, tax reform, regulatory reform, monetary reform, including a reappraisal of the role of government in the economy. This should lead to a more stable and predictable economic environment and reduced uncertainty about the future, which is critical to improving supply and demand....

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The world is truly changing again. China followed Japan as Asia's second economy going through rapid industrialization and urbanization in the 1990's. After two decades of hypergrowth with huge imbalances of trade with the US, China is not only slowing, it is now experiencing the kind of deflation that hit Japan at this point in its development as a modern economy. 

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Some American companies are drawn to Mexico's manufacturing based economy, its closeness to the US and free trade agreements. 

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Household debt levels declined in the U.S. to 108% in 2014 for ratio of total debt to disposable income, returning to levels in 2003, according to the U.S. Federal Reserve. The level reached a high of 130% for the U.S. in 2007. The reached a level exceeding 150% in Canada for 2014, which combined with decline in oil revenues with lower oil prices puts additional stress on the Canadian economy. In Japan the level has declined to 125% in 2014. France is close to the U.S. level, up significantly since 2003. Germany's ratio declined significantly to about 90% in 2014. In the U.S. consumer credit levels were up 2.3% in the 3rd quarter as credit for consumer purchases such as autos and appliances increased. Credit for home mortgages increased only slightly by 0.1%, as demand for new homes remained sluggish and banks imposed stricter standards following the mortgage crisis. U.S. households continued to pay down mortgage and credit card debt.