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If the minimum wage in 1968 had kept up with inflation in the U.S. it would be $10.67 in 2013, says Ralph Nader. The federal rate for the minimum wage is $7.25 in 2013. Nader points out that president Obama's call for a federal rate of $9.00 per hour by 2016 falls well short of what it would be just to make up for inflation. This does not include productivity improvements since 1968 in which those making the minimum wage do not share, and which would make it much higher than $10.67.

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Monica Langley provides an excellent account of how U.S. Education Secretary, Arne Duncan, is using the $100 billion from the Stimulus funds in the 2009 Recovery Act to implement the Common Core education program in U.S. states and districts. Common Core is about raising student math and reading scores and standards, and implementing teacher evaluations based on test scores to make teachers accountable. This is the one significant area in which the Obama administraton in the U.S. is likely to leave a valuable legacy. Republicans in Tennessee, including Lamar Alexander, have embraced the program, showing how Duncan is using his persuasion skills to speed up the implementation across political party lines in a period of strong partisan feelings about programs. When governors have hesitated, Duncan has gone straight to the school districts using the funding. Teachers union say the program is moving too fast as evaluations would affect teacher careers, and Duncan agreed to a one year reprieve on the consequences of new teacher evaluations for states applying for an extension. This makes Duncan uncomfortable. He says he has only three and a half years left and he is going tooo slow. Business leaders such as P&G CEO, Robert McDonald, say the only political party they have is their educated workforce. Duncan has persuaded 40 states in the U.S. to sign up for higher standards in reading and math. Democrats see the Duncan initiative as helping poorer schools, which is also important to reduce the increasing inequality in the U.S. Since 2008 high school graduation rates increased by 3 percentage points, with a 5 point gain for black students and a 7 point gain for Hispanic students. After $4 billon in new funding to low performing schools, so called "dropout factories," the number of such schools has declined to 1424 from 1746. Teachers unions are only gradually adjusting to the need for accountability in math and reading scores. Duncan's father was a psychology professor at the University of Chicago, and Duncan grew up in Chicago neighborhoods before attending Harvard and playing for the basketball team. Duncan tutored younger school students in the afternoon at his mother's after school program in a black neighborhood on the South Side of Chicago. In 2001 he was made the head of the Chicago public school system by Mayor Daley, where he took action to shut down poorly performing schools and reopening them with new staff. All the time he pushed for greater parental choice, charter schools, new teacher talent and using data to track school and student performance. ...

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The first of a series of quarterly reports put out by the Federal Reserve Bank of New York, on the subject of household debt and credit. It shows that the process of unwinding consumer debt in the US is a slow and painful one. The figures tell the story, which touch every aspect of the US economy and business, with ripple effects through the world economy. Total consumer debt is $11.7 trillion as of June 30, 2010, which is down 6.5% from the crest reached in the third quarter 2008. Credit card accounts are down 23% from the high reached in second quarter 2008, and mortgage obligations down 6.4% from 2008. By mid 2010 11.4% of consumer debt was delinquent, and this was up from 11.2% in 2009. $1.3 trillion of consumer debt is delinquent, and $986 billion is seriously delinquent- that is 90 days late. Serious delinquencies are up by 3.1%. Other figures fromt he Fed report: Half million people in the USA had a foreclosure added to the credit reports for the period March 31, 2010 to June 30, 2010. This was up 8.7% above the figure for first quarter of 2010. New bankruptcies showed up in credit reports for 624,000 people during that quarter, an increase of 34%. Another major problem stacked on top of this for consumer spending- the Fed's interest rate policy according to Todd Petzel, chief investment officer of Offit Capital Advisors, burdens consumers with a tax of $350 billion in income lost from low to zero interest rates. This creates two problems of its own. Not only does it depress consumer spending. It also makes consumers reach out for riskier investments. This figure was calculated by taking $14 trillion in debt issued by Treasury, federal agencies and municipalities. Rates are near zero on short term Treasuries compared to 3% average over the years. Taking 2.5% on $14 trillion, the figure of $350 billion was arrived at. Or 2% of gross domestic product. Analysts say that it would be better not to save a few zombie banks at the expense of consumers and pension funds. It lowers the cost of the deficits through the lower interest rates the government pays on its debt, but lower consumer spending and a limping economy hurt tax revenues and increases the deficit....

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Under a new program to increased spending on healthcare from 1.3% of GDP to 2.5% the Indian government plans to provide free pharmaceuticals at state run hospitals. This is expected to cost $5 billion over 5 years. Initially 350 drugs would be on a list of essential medicines and would be purchased from generics manufacturers in India. Dr. K. Srinath Reddy, heads the committee advising the Indian government on healthcare. He says this will help improve access to medicines for the vast majority of the people. Estimates show 70% of out of pocket medical costs for Indians come from spending on drugs. About 40 million people are pushed into poverty each year because of the high cost of medicines, says Dr. Reddy. He said that in 1984 31% of the medicines at government run hospitals were provided free to admitted patients, dropping to 9% in 2004. For outpatients this dropped from 18% to 5%. The free medicine program would be part of a larger universal health care program to be introduced over the next decade. India's large generics pharmaceutical industry makes the provision of free medicines on a large scale a feasible option in India because of the lower prices, with additional pricing advantages when purchased in larger volumes by the government. This would also have a major impact on the quality of healthcare in the country of 1.2 billion people for a relatively small investment. It also promotes a sense of fairness and equal access because the benefits of decades of modernization have been unevenly distributed and because of widespread poverty....

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The large response triggered on the internet by Anne-Marie Slaughter's article in the July/August 2012 issue of the Atlantic on women and work, how it is difficult for women to work and raise children without making changes in today's American society so that a healthy balance can be achieved.

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To make custom loan modifications of the type that became necessary overnight on a large scale requires resources, investment in people and technology. On top of this a bank makes about $500 a year on a $200,000 mortgage loan, and if the loan is delinquent the bank may already have lost $2500, say experts, so there is little incentive to do much about custom loan modification. As a result, they used what a former J.P. Morgan executive called "Burger King kids." Or the banks outsourced the operation, some to law firms like David Stern, which in turn used outsourcing firms in Guam or the Philippines. The result is a largely chaotic process according to former mortgage officers of banks, and clerical staff that did not know what they were doing. Now atttorneys general in all 50 states have stated that they will investigate foreclosure practices of banks. It all started with the lone effort of Pine Tree Legal Assistance in Denmark, Maine, in succesfully challenging one of these improperly conducted foreclosures. See the NYT article on Pine Tree. In that case it was about a mother with two children who had her payment go up to $474 after loan modification, who is on food stamps after losing her job as an employment counselor....

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Feldstein points out that Obama economic plans missed the real target, which was on the home front where it came down to addressing the problems of 15 million homeowners under water- with mortgages exceeding the value of their homes- and lack of solutions to deal with the $1.5 trillion in troubled commercial real estate loans. Administration plans really did not help more than a couple of hundred thousand homeowners to reduce their monthly mortgage payments. Getting banks to start lending again by selling impaired loans to nonbank investors, also failed to work, as banks were reluctant to do so and reduce their accounting capital. Health care legislation simply distracted attention from the real problems. See the links to Feldstein's repeated insistence that the new administration (and even during the late stages of the Bush administration) focus on these problems. Health care legislation that passed simply would not control the increase in health care spending, that the public correctly perceived as the real problem if the other health care issues were to be resolved. Instead Obama's health care legislation offered to increase the deficit to unsustainable levels, with no solutions to more pressing home front problems in sight. Feldstein, is one of the most eminent US economists....

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Friedman points to the need for workers to have a Curiosity Quotient or C.Q., and Passion Quotient or P.Q., in addition to Intelligence Quotient I.Q. to compete in a digital hyperconnected world. The ubiquitiousness of tech devices, instant access to information, learning and knowledge, for people in remote cities to smaller towns everywhere, reduces the span in which a particular knowledge subset is relevant. New developments take place faster creating continual obsolescence and need for constant learning and curiosity.

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The problems facing U.S. Speaker of the House of Representatives, John Boehner, as a government shutdown occurs in October 2013. Republicans and Demorats fail to agree on raising the debt ceiling and financing of the government. Boehner faces a movement in the Republican party led by Senator Ted Cruz of Texas for defunding the Obamacare law.

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A congressional oversight panel reported in October 2009 that fewer than 2000 of 500,000 loan modification applications in progressunder the Making Homes Affordable program of the Obama adminsitration had become permanent. When Treasury reports on the program in December 2009 its expected to report that the number of permanentloan modifications are in the tens of thousands out of 650,000 borrowers in the program. Mortgage companies are collecting lucrative fees on long term delinquencies so there is not enough incentive to make permanent loan modifications according to lawers defending homeowners.

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Colonel Stevenson's efforts to limit features on a new bomber for the U.S. Air Force to replace aging B-52's and B-1's. Contractors added a kitchenette in one design which was turned down by Stevenson and senior officers at the Air Force. Senior officers were mindful of how it might be seen by the public and aware of the need to keep costs down during a period of austerity budgets. Barnes describes the efforts of Colonel Stevenson as he led efforts to limit the new plane to essential features, turning down contractor proposals for a plane that could be converted into a drone, reconaissance and cyberdefense features, and other embellishments that would drive up the price tag per plane. In 2011 budget negotiations defense officials agreed to limit the cost to $550 million per bomber, a third of the cost of the B-2 which cost $1.8 billion per plane. Because new planes take a decade or more to design and build with cost overruns, it is also important not to venture too far into technological unknowns. This adds more time to build and proves costly. The Long-Range Bomber project started in 2011 with Secretary Gates signing off on the requirements for it to give the president the option to move quickly in a matter of hours to penetrate distant airspace. The cost is $600 million spent till Oct 2013 for research, and $8.7 billion budgeted to 2018. The Air Force is sticking to existing engine design, and Stevenson says if the technology has not been tested the Air Force is not interested in experimenting with it. In the process Stevenson finds himself trying to change the culture at the Air Force, where putting cost as the top priority is a new concept....

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Richard Thaler, a Professor of Economics at the Booth School of Business, University of Chicago, on the reasons why millions of homeowners under water- owing more on their homes than their homes are worth- have not defaulted in large numbers. In places like Nevada nearly two thirds of homeowners are under water. Changing a home, changing school for children, losing one's credit rating, social stigma. He points out that the costs are outweighed by the benefits of getting out of an underwater mortgage, and research has shown this is contagious once the process of defaulting has started. So once the neighbors are defaulting its much easier to do so and the proces picks up momentum, the psychic costs simply decline. So he says the result is that we may face a tsumani of strategic defaults. Professors Posner and Zingales of the University of Chicago have a proposal. Banks should be required to provide loan modifications in neighborhoods with home prices having dropped over 20%. Banks would reduce the payment by the average price reduction in the area and get in return 50% of the average gain in prices when the house is eventually sold. This requires Congress to pass legislation....

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Feeding America, a national network of food banks, finds that 37 million, or 1 in 8 Americans, needed emergency food assistance in 2009. Even in affluent suburbs like Long Island it found 280,000 sought assistance for food in 2009. And 39% of these were children under 18. Only 30% of those seeking help received food stamps suggesting that even that program is not reaching everyone that needs help.

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Krugman looks at the economies of indusrialized countries in 2014-2015. He points to the errors made by the Riksbank in Sweden to increase interest rates prematurely when a recovery was not on firm ground, ignoring the advice of deputy governor Lars Svensson. Sweden now faces the prospect of little growth and deflationary tendencies. He compares the decision of the ECB to raise rates in 2011 with Japan's decision to prematurely raise rates. The austerity policies in the EU driven by Germany and the lack of political consensus in the U.S., are faulted for making the situation worse when compared to Japan's poor handling of the situation. He says fiscal policy did not do enough in Japan to create growth, in the EU he says austerity policies were actually destructive of growth.

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President Obama proposes changes in taxes to fund programs to aid students such as free 2 years of community college, aid for student loans, and financial help for middle class families. Senate Majority Leader McConnell says the proposals to raise income taxes for high income Americans with $320 billion in new revenues over 10 years, reduced prospects for changes in the tax system. He said the Obama proposals were designed " to excite the base but not designed to pass." Obama says "the shadow of crisis has passed," and calls for "middle class economics," and improving incomes for anyone making the effort. The call comes as inequality widened during the long recession and some of the Obama administration's policies such as on homeowner foreclosure, and lack of focus on unemployment during the first term, may have actually worsened inequality. The call also comes late in the second term in Jan 2015- with presidential elections in 2016- after the Republicans gain control of both Houses of Congress, which is why Republicans dismiss this as mere political talking points for the base....