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The $1.2 trillion bill that was negotiated a day before March 22 deadline will be voted in the House on Friday. Senator Ms. Murray of Washington state and Rep. Rosa DeLauro of Connecticut secured spending on child care and education programs- a 9% increase in Child Care and Development Block Grant, and a $275 million increase for Head Start, $120 million for cancer research.For the Border the spending bill puts in a 25% increase in funding for technology at the southern border, 8000 more detention beds (Congress funded 34,000 beds), 2000 new Border Patrol agents. Shalanda Young, Janet Yellen and Jared Bernstein of the Biden economic team went before a Appropriations committee in the House. Rep. Steny Hoyer said the Congress that passed the Inflation Reduction Act, the Science and Chips Act and other Biden legislation to aid the economy was the best he has seen in 40 years in the US Congress.

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Achievements of Elvira Nabiullina as central bank chief in Russia since 2013 are the reducing of US dollar reserves from 40% to 11%of $600 billion in Russian reserves shifting to hold most of its reserves in euros, gold or renminbi Chinese currency. She also implemented the alternative to SWIFT the global bank messaging system, and changed the payments infrastructure to process credit card transactions in the country so departure of Visa and Mastercard had minimal effect.

In this way this highly respected banker has protected Russia's economy from western sanctions, says NYT. She is trusted by president Putin and was adviser to Putin in 2012, minister of economic development before that when Putin was prime minister. When Russia suffered an economic crisis in 2014 as oil prices fell sharply and Saudis increased oil production, the ruble fell. Nabiullina increased rates to 17%, and the economy shrank till it stabilized with inflation down to 4% by 2017.

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There are four pillars to this fight Biden and Harris are now waging. Biden tackled infrastructure by getting the Congress to pass the Inflation Reduction Act and the CHIPS and Science Act to put trillions of dollars into rebuilding aging and dilapidated American roads, bridges, airports, ports, rural internet. This also tackled Manufacturing and factory jobs in the US neglected for 3 decades, the second pillar. The third pillar for Biden was getting American wages that had fallen behind to catch up by supporting labor in wage negotiations.  Something was missing as Cost of Living for housing, childcare, remained. This is where Harris has stepped in with Jerome Powell of the Fed. Powell cutting interest rates to make housing more accessible and Harris putting in $25,000 for first time homeowners for a down payment, build 3 million new homes, $6000 for childcare for parents, and $50,000 for small businesses to start. Specific programs at specific targets in FDR type "bold, persistent experimentation" activity. Put together the four pillars mean giving strength to the US economy which Powell says is "in solid shape." ...

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Yale University professor Robert Shiller, founded CAPE, the cyclically adjusted and inflation adjusted S&P price earnings ratio. It takes the average of the 10 past years of earnings and the inflation adjusted S&P 500 index to arrive at this CAPE P/E ratio. Here he looks at CAPE in 2000, 2007 and 2013, to get a sense of where the U.S. stock market stands today and investor confidence. In 2000 CAPE reached 46, in 2007 it was at 27 and in 2013 it has reached 23. The historical average for CAPE is 15- this goes back in data to 1871. Zweig in the WSJ March 8, 2013, cites data from the last 50 years showing the historical adjusted P/E at 19.7. The investor confidence in the stock market or "valuation confidence" based on work done by Shiller is at 72% for institutional investors and 62% for individual investors in 2013, it was about 80% for both categories before the market peak in 2007. This data is on the website of the Yale School of Management. Shiller says the levels of optimism can fluctuate and change easily, requiring careful thinking by investors. He confirms Browning's assertion in the WSJ March 6, 2013, that in inflation adjusted terms investors are not ahead in the last 13 years, when compared to 2000, based on the inflation corrected S&P Composite total return index....

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The WSJ Editorial Board speaking for the business community traditional Republican groups finally takes up the election on issues of policy difference between Trump run Republican party and Harris run Democratic Party which it should have from Day One. The former president says something that has never happened in the last hundred years- policy will be decided after the election depending on what he decides to do. Cost of Living action is No 1 on voter priorities. "Drill, Baby Drill," is the whole Republican party platform for cost of living action. What is the Harris Democrats policy plan for cost of living action? WSJ says it is spending blowouts that caused inflation, the Green New Deal, entitlement expansions and student loan forgiveness.The real reason for the increase in cost of living comes from the overconcentration of supply chain by American business in China, on which every president Bush, Obama, Trump, did little or nothing. The lack of an effective vaccination program and ineffective vaccines in China by 2021 and 2022 led to the loss of the supplies from China leading to shortages for automobiles parts and other supplies and surge in prices in 2021-2023. Powell and the US central bank correctly raised rates but cautiously and waited for this to correct, president Biden brought manufacturing home through huge investments called the "spending blowout" that brought down the inflation from 9% to 3%. Some of that "spending blowout" went to chips and science to correct the errors of American Business and Reagan-Friedman theory of the Republican party that created this problem with a culture of utter  indifference to the ultimate costs of who makes what and where. The Inflation Reduction Act also tackled higher health and other costs paid by American workers and families, and invested in public services and in repairing the dilapidated crumbling American infrastructure. Are Republicans saying let the roads, bridges, airports, built in the 1940-1960's heyday of American industrialization as China and India's is now, let them crumble? What do the educated minds of the WSJ Board say about coal in China and India and their effects on their massive use multiple times that of US and EU in history, is it not damaging to the environment and why the Chinese realized the health in North China with coal winter use was worse than in South China cut their coal use. Are they saying lets burn fossil fuels and ignore, and if investment has to be made in solar who is going to do it? Is it Ok for Republicans thet we just import from China all our solar panels indefinitely into the future. "Green New Deal" is just a perjorative term, policy has to be made thoughtfully and without prejudice or bias of any sort for the best that we can do for the American people, ignoring so called "right" or "left." Doing what is right, what makes sense, is a lot harder.     ...

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Scott Bessent, DJT's senior most economic executive says-“There’s nothing that tells me that Powell should step down right now. He’s been a good public servant." The media is making much out of DJT criticism of US central bank Fed chairman Powell. Yet Powell is one of the original appointments by DJT in 2018 and has done his job carefully and methodically, explaining to the public each step of the way. He correctly pointed out the role of supply chain in inflation during covid and was careful to calibrate his moves so that the Fed is ready to respond but does not overreact. His explanations were direct and his manner humble enough to get him respect. In fact DJT may have made one of his best appointments in Jay Powell who was nominated in the Senate by a vote 84-13 in 2018. Compared to his predecessors his style and work carefully monitoring inflation and unemployment to strike the right balance is far better than any of his predecessors going back to the 1980's, and complements the work done on trade for a level playing field by DJT.     ...

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A sharp decline in gold prices in 2013 of 19% by October 2013 as central banks in developing economies cut back on holdings of gold. Emerging market economies such as Russia diversified their foreign exchange holdings by buying gold in the period following 2009. With depreciating currencies, efforts to intervene in currency markets and need for foreign exchange as growth slows, central banks in developing economies have cut back on gold purchases. In 2013 central banks are expected to reduce goldbuying by 34%, according to Thomson Reuters GFMS. Private investors fearing rising inflation as the U.S. Federal Reserve loosened monetary policy also increased purchases of gold in this period. With inflation remaining low in 2013 the interest in gold is declining, especially as it does not offer any return and alternative invesments are becoming more attractive.

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Fed's Bernanke defends his QE II decision in a US Congressional hearing and shows no signs of tightening. He again cites low inflation and high unemployment in the US as the basis for his decision.

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Fed chairman Powell says inflation is just a bit above 2%, the employment market is strong, and the US economy is in good shape in remarks after Fed decision to keep Fed rates unchanged. The Fed is monitoring the situation carefully including the uncertainty regarding tariffs. The coming weeks and months will show what progress is made with the important trading partners of the US on bilateral trade treaties, says Powell. 

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Britain has fallen way behind under Conservatives Tories misrule. On just about all indicators of the economy the US is ahead of Britain, on cost of living, on investment in infrastructure, on chips and science, on unemployment and on economic growth. The US economic growth was 2% compared to 0.5% for Britain.  Britain under the Tories over the last ten years lost so much ground fighting for Brexit and hurting it's economy. The Tory party is itself torn apart again today by Farage's Reform party, much of it from poor leadership- Cameron, Boris Johnson, Sunak. The result today is that Labour's Starmer says he has a 22 billion pound gap in the Budget that the Tories Conservatives have left him, a hole he says that will lead to Labour cutting winter fuel payment for pensioners this winter.  The US with president Biden is so far ahead of Britain with $1 trillion in investments taking place under the Inflation Reduction Act and $53 billion under the CHIPS and Science Act. Harris plans to build 3 million homes and offer $100 billion to small business to spur growth. There is just no comparison and owes much to president Biden and Harris, and to senior Republicans who supported the administration on the economy. ...

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Coy cites Paul Krugman's Willie Coyote scenario for the dollar, where the famous character runs off a cliff, but starts to fall only when he starts to look down. One foreign exchange expert says there is a 40% chance of the dollar falling into a crisis point. Two forces are working in that direction. Near zero rates in the USA is making it a speculative play to borrow dollars cheaply, and then sell them to buy other currencies where stocks and bonds yield higher returns. The other is that experts feel that the US may eventually make its huge debt affordable by devaluing its currency. David Malpass does not see rising import prices and inflation as healthy for the US economy. He says the fall of the dollar in the 1980's gave the Japanese the buying power to strengthen their automakers. Coy also sees the risk of a major failure of a financial institution, as a possibility, if it made a bet that made it vulnerable to a falling dollar. At this point 88% of derivatives credit risk exposure in the USA is residing in 5 banks in the second quarter in 2009....

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The U.S. Federal Reserve released its new economic projections for GDP growth, inflation and unemployment in 2012-2014 and the decisions reached by the June 2012 Fed Open Market Committee (FOMC) meeting. This follows uncertainty in financial markets with the $125 billion rescue of Spanish banks by the EFSF, the eurozone rescue fund, and 10 year Spanish bond yields reaching 7% even after the rescue announcement. The Fed lowered all its forecasts to reflect the gloomier outlook. The "central tendency" is for the U.S. GDP to be in the range of 1.9%-2.4%, dropping it by 0.5% from the April forecast and 2013 forecast with a similiar drop to 2.2%-2.8%. 2014 GDP forecast is at 3.0-3.5% Inflation is forecast at 1.2%- 1.7% range, instead of 1.9%-2.0% for 2012 and is at 1.5%-2.0% for 2014. Unemployment is is forecast at 8.0%-8.2%, increasing by 0.2% for 2012 from the April forecast, and with a similar increase is at 7.5%-8.0% in 2013. Unemployment gradually declines to 7.0-7.7% in 2014. The decision reached by the FOMC is for the Fed to continue its program called Operation Twist to extend the average maturity of its balance sheet beyond June 2012....

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A report by two former Census Bureau officials, Gordon Green and John Coder, shows the inflation adjusted median household income in the U.S. declined by 6.7%, to 49,909, between June 2009 and June 2011. From December 2007 to June 2009 household income declined by 3.2%. The forces behind this are the large number of people not working or not looking for work who are outside the labor force, and the hourly pay for workers not keeping up with inflation. Prof Henry Farber at Princeton, says his study shows that people who lost jobs in the recession found work again with an average of 17.5% less income than in their prior jobs. This makes this downturn very different than earlier downturns, and giving credence to the argument "that this time its different." Another statistic from the U.S. Bureau of Labor Statistics shows why- in the period December 2007 to June 2009 average length of time for a person who lost a job to be unemployed increased from 16.6 weeks to 24.1 weeks, with the same figure up to 40.5 weeks in September 2011. Higher declines for Hispanics and other minorities further increased income inequalities. Coder and Green call the impact a substantial decline in the American standard of living....

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Japan's central bank chief, Shirakawa, has come under criticism from both the governing Democratic Party of Japan and the LDP for not acting strongly enough to support Japan's economic growth in 2012. He diluted efforts of setting a 1% inflation target by showing a lack of determination, saying the Bank of Japan could only do so much to tackle deflation, with effort to tackle structural inefficiencies required from the government. The impact of this was to strengthen the yen which weakens Japanese exporters. The LDP candidate for prime minister, Shinzo Abe, in Dec. 2012 general elections, was particularly critical of Shirakawa. Abe is likely to appoint Takatoshi Ito, a Tokyo University economist as the new central bank chief. Ito says Shirakawa talked down each BOJ monetary easing move with cautious language, describing it as a cold shower following each move. This is very different from the talk of the U.S. central bank chief Ben Bernanke, who gave clear signals to financial markets in his statements following monetary easing efforts of QE 1-3. Abe prefers a 2% inflation target and an activist central bank policy comparable to the U.S. Federal Reserve under Ben Bernanke. Financial markets and exchange rates for yen have responded positively to Abe's policy goals....

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Domestic tourist trips up 19% over 2019 in China as China opens up to tourism are leading to only a 1% increase in total tourist spending, as tourists are just plain thrifty. Food inflation that is 10-15% in the US is about a catastrophic 40% in Europe with creeping higher margins of grocery stores. Compare that with China where inflation is less than 1%. WSJ looks at Zibo a city in China that was like hundreds of smaller industrial cities in China until a government publicity campaign got about 4.7 million people to visit it for its barbecue pancakes. The prices were relatively inexpensive with two people eating for $20. Yet this type of tourism is not boosting the Chinese economy when exports are slowing and the construction sector is in poor shape financially. 

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Greg Ip says inflation will be moderate about 2.3% instead of 2% as tariffs will probably be use as a negotiating method and tariffs at 20% with 60% tariff as a negotiating tactic by Trump.  Greg Ip says as important than inflation and GDP are the workers displaced and with loss of income through surge in imports and loss of manufacturing in the US. 

Robert Lighthizer, who was trade ambassador in Trump’s first term and is likely to return to manage trade says-

“Globalization produces disruption, dislocation, and destruction. Conservatives by contrast seek to defend traditional values and institutions, preserve the social fabric, and ensure the conditions for families and communities to flourish.”

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Romney picks seven term Wisconsin Congressman Paul Ryan as his running mate for the 2012 U.S. presidential election. It is a daring pick because Ryan has clear ideas about reducing the U.S. deficit which are in sharp contrast to the approach taken by Obama and Biden, offering American voters a clear choice. This is similiar to the contrasting choices between Reagan-Bush and Carter-Mondale during a period of high unemployment and inflation in the 1980 presidential election. The contrast was also made clear by the release of the Shultz memo to President Reagan and the comparisons with the Reagan election by Romney economic advisor Glenn Hubbard, both recently published in WSJ.

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Pat Schumer Democratic Senate leader takes a position to support passage of the spending bill in the US Senate proposed by Republicans, as not doing so would hurt ordinary Americans. Schumer sees this as important as a shutdown would not be good for the American economy. Other Democrats see things only from the point of partisan politics and not the interests of the Nation as a whole. It is to Pat Schumer in the US Senate that president Biden looked to for the legislation that supported rebuilding American infrastructure in the Inflation Protection Act. The same responsible attitude is taken by senior Republican senators and governors who are keen on working together on a bipartisan basis in the interests of the Nation. This was on display at the recent Governors conference when Oklahoma Governor (Republican) discussed how to address US needs in various areas with Beshear of Kentucky and Shapiro of Pennsylvania, both Democrats. The strength of the US economy with growth, lower inflation at 3% and low unemployment at 4% is a result of the farsighted thinking, and efforts to work together of senior members of the Senate from both parties, and of governors in different states. ...

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Krugman says China's inflation is raising labor costs in China, and in this way gradually reducing the undervaluation of the yuan vs the dollar. But he cautions this would take a long time, 4-5 years. The U.S. faces the costs of high unemployment close to 10% today, and this requires serious efforts now to reduce the undervaluation. It alone will not solve America's problems. It is one of a number of actions that need to be taken and not put off again.

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Jim Dwyer discusses proposed legislation in the New York City Council in November 2011, to set a "living wage" of $10 per hour, plus benefits, for workers at new developments receiving more than $1 million in public money. Under this legislation employers who do not include benefits would pay an hourly wage of $11.50. Discussion in the City Council has led to questioning this legislation on the grounds that the developments would not be built under the new rules. Dwyer points to San Francisco, which has set the minimum wage at $10.24 for January 2012, plus mandatory contributions to health insurance funds. The number of low wage workers in New York City with some college education has increased by 70%, according to the Fiscal Policy Institute. Wages at the bottom were $10.85 an hour, adjusted for inflation in 1990, in 2010 the wages were $10. What this does is further increase the income disparities and inequality in the U.S. Because of the demographic changes in America with Hispanic children representing a large proportion of young children, and the high rate of dropouts from highschool in the Mexican American community in New York, this means more children in New York City growing up below the poverty line....

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People at street protests in France are increasingly asking whether the pension reform from 62 to 64 years is that much of a priority in 2023 when people are just recovering from the pandemic and a cost of living crisis with high inflation and high energy costs stemming from the Ukraine conflict. The independent Pension Advisory Council stated "pension spending is not out of control, it is relatively contained." More people turned out than before in a second round of street protests by over half a million people in Paris. The reforms come down harder on women who worked part time to raise children. Age discrimination for jobs in France is widespread. The pandemic has created additional stress and burnout at work leading to early retirement in the US and other countries. Some of the pension changes are being used to finance an expansion of the military budget. Social justice is seen as at risk in France in a society that is socially fragmented.

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Wages have gone up less in Europe than in the US. In the last 3 months of 2021 wages were up 1.2 % and inflation was up 4.7% for a fall in real wages of 3.1%, which has accelerated since then with the war in Ukraine and shortages of energy and food supplies. A YouGov poll shows that 15% of Germans cannot afford basic necessities and 53% are concerned about rising prices. Because basic things like food and energy where prices have gone up the most also take up large portions of the budget for lower income households. In Germany some unions are giving one off payments for energy bills and other costs to workers till negotiations lead to a settlement on increasing wages. The situation is similar in Greece, Italy and France. In Greece the government has given $3 billion for subsidies on gas and electric bills. Elections are now focusing on cost of living as in France where the second and third place winners in the first round Le Pen and Melenchon together took about half of the vote. ...

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This editorial in the WSJ shows a different view of the passage of the $280 billion semiconductor bill in the US Congress and the Biden Schumer negotiation for the $369 billion climate change and tax bill that was done at rapid pace in the span of 24 hours. It sees this from the view of the Republican party that hoped to present president Biden as a failure, unable to tackle inflation or achieve much for action on climate change, renewable energy, and building America's supply chain.  All this is happening quickly and shows the value of patience and persistence, and faith in the ultimate fairness of the American cause during a difficult time of war in Europe and rancor at home. It is not that 17 Republican Senators got played as the WSJ puts it, they voted for the $280 billion semiconductor bill on its merits and their ultimate faith in the fairness of the American cause and faith in America's workers and families, in its people. ...

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Nirmala Sitharaman, the Finance Minister, says India's approach to pandemic aid appears to be the right one because it avoided handouts that have in the form of large stimulus packages in the US and Germany, created high inflation. India's focus was on providing food for weaker members of society during the pandemic.  The basic idea behind the approach was to conserve capital, and use increased GST tax revenues in such a way that capital could be concentrated where it would deliver the most in projects that would take India forward in infrastructure and development for 2042. This is essentially the approach taken by first, Japan, then South Korea, then China, in becoming advanced industrial nations, increased revenues and capital concentrated on projects that would deliver in terms of industrial progress such as infrastructure, today in climate change renewable energy, and other actions. Gati Shakti integrates this into a Master Plan for the country for 2042. ...

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Cheap fixed rate mortgages make up two thirds of home mortgages in the US. Most are at 4% or lower interest rate. A new 30 year home mortgage in 2024 would be about 7%. About 660,000 job offers that required moving and selling the home were turned down. This means fewer homes left for people to buy leading to higher home prices. The additional equity people have in their home on average is $119,000 over 4 years and this means consumer spending is resilient in the face of higher interest rates and keeps inflation at 3%. How does this affect the economy? Fewer homes on the market means there is a loss to the economy of 3% to 5% of output, according to NAHB. The smaller supply of homes means there is less home inventory to search from- instead of 62% in more normal times affordability for someone with a $100,000 in income is now 37% of the listings. This is not expected to change in the next 2 years.