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China shifts its policy to allow 3 children per family after it sees the percentage of people in the population over 60 rising. This WSJ report show that the policy shift is being followed by changes in policies related to education with more equitable educational resources and reduced expenditures for education for families. Policies that were seen as making families hesitant to have more children.  Changes of the Mao era policy of one child, one family, are very recent. Not till 2013 has this policy changed, since its implementation after the Communist Party took over mainland China in 1949. In 2013 the government allowed families to have 2 children if one of the parents was an only child, and two years later in 2015 the policy was changed to allow 2 children per family. Only half of Chinese couples are willing to have 2 children, according to a study by the state backed All China Women's Federation. A once in a decade census shows 12 million babies born in China in 2020. In 2016 there were 17.9 million births. China's leaders noticed a change in the census for people over 60 as a percentage of the population, which was growing much faster than imagined from 13.3% in 2010 to 18.7% in 2020.  The perception of experts and Chinese couples in their thirties shows that the policy is seen as not enough to convince young couples to have another child. Typical is the situation of one parent cited in this report, a Beijing father of two. He says the policy has changed but it does not mean that he would have another child. He says it takes a lot of money and energy to take care of another child. It also affects the standard of living and education of the two children as he has already moved to a new 2 bedroom apartment to be near top schools in the Chinese capital. Another facet of this development is women in China postponing children to pursue their careers. Government policy is now to raise the retirement age with fewer people of working age to support the senior population. The percentage of the population of working age 15 to 59 years dropped from 70% in 2010 to 63% in 2020. Fewer people for working at Chinese factories and manufacturing. China's retirement age is now 60 for men and 50 for women, giving the government room to do this by bringing it up to western levels that are much higher in the US and Europe.   ...

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Galston points to the study in the Economist magazine by Ray Avent showing the hugely negative effect of Tech on jobs in the last 3 decades. He calls for using the full tools kit of solutions to tackle the problem. Society will face huge problems if nothing is done as divisions in society are likely to increase with a few people doing well with a large number of unemployed and the working class having stagnant wages. He points to BLS statistics showing worker wages increased annually by 0.3% after inflation for the period 1981-2014 in the U.S. This is not just a U.S. problem. It is a worldwide problem with particular relevance for U.S., Europe, India and China. Galston was deputy assistant to president Clinton for domestic policy, 1993-1995, and holds the Ezra Zilkha chair in governance studies at Brookings Institution.

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Class and the divide between rich and poor, educated and uneducated, urban and rural, in China. Even with rapid industrialization in the urban mostly coastal regions, a large number of China's people live in rural areas and in the hinterland away from the big cities. October 1, is the 60th anniversary of communist rule. With the internet and more communication of all types, incidents in which the rich and powerful are treated differently by the judicial system- and can get away with light sentences for wrongdoing or crimes- cause a great deal of anger among the people. In this traffic accident in Hangzhou, one of the rich people's kids- the young emperors is how they are referred to in Chinese- runs over and kills on the pavement a 25 year old telecom engineer from a rural area near Changsha. He had to work hard to get to college and become a engineer, and his parents struggled to pay his tution in college. The 20 year old racing car driver gets away with a light sentence of 3 years, and is suspected to have used a stand-in for the trial, who would also serve the sentence. The public in Hangzhou was upset about this and blogs all over China began to talk about this. The police initially covered up the incident, saying the speed was 43 mph. Only after public pressure did the police say it was double that, and that the Mitsubishi racer used by the rich kid was retrofitted for speed....

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The WSJ responds to president Biden ramping up renewable energy plans and linking Republicans with Senator Rick Scott's plan for sunset provisions on federal legislation every 5 years that Biden says would include Medicare and Social Security. WSJ is critical of Biden's renewable energy plans and calls for increasing production of oil and gas to meet energy shortages and price increases. It is also against a wealth tax, Biden's $2 trillion Workers and Families Plan, and Biden's plan for Medicare to negotiate drug prices. WSJ says real disposable personal income increased $4205 under the Trump presidency 2017-2020, and has since declined by $374 with high inflation depressing purchasing power. The impact of climate change requiring brave choices and strong action is missing in the Republican plan as Republicans focus on attacking Democrats controlling the presidency and Congress on the issue of inflation. The issue of remaking supply chains are on both the Republican and Democratic agendas with president Trump giving more rhetoric against China's role in dominance of supply chains and Mr. Biden taking stronger action in Theodore Roosevelt's style of carrying a big stick and quiet posture in restoring America as a manufacturing powerhouse. The impact of climate change is short term rather than long term as seen by the heat wave in South Asia today, the fires in North America and Europe. Republicans are losing sight of the importance of making the shift on renewable energy quickly with some short term pain, as they push for oil and gas solutions and a less effective program for renewable energy. Mr. Biden is taking on bigger risks in the short term in the midterms and beyond but following a sound policy of aggressively pushing renewable energy. This can also be seen in the importance renewable energy is being given even in countries with a need for coal and natural gas such as India. Modi's plans in India are to buildup renewable energy capacity with aggressive targets for 2030. ...

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India is becoming a major destination for foreign investment in manufacturing in many industries. The youth population 15-24 now exceeds that of China. Over the period 2015-2019 the number of youth 15-24 will increase to be close to 250 million in India in 2019, compared to a rapidly declining youth population in China of little over 150 million in 2019, according to the International Labor Organization. China's one child policy, investigation of multinationals business practices, and increasing wages in manufacturing, are reducing its attractiveness for foreign investors. Other destinations such as Russia are less attractive because of the economic crisis after falling oil prices. India also benefits from the large drop in oil prices to help reduce its chronic deficit and lower inflation- significant dividends at a critical time. Raghuram Rajan, head of the central bank, estimates the gain from the drop in oil prices at about $50 billion. Indonesia also benefits from the same trends. Prime minister Modi is reducing the bureaucratic structures and red tape that are a legacy of the Congress governments since independence in 1947, creating a new climate for business investment. ...

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Oil prices drop below $38 by mid-December 2015, as the Saudis continue to push prices down further by continuing production increases. No change is planned for 2016 and analysts expect low oil prices into 2016. At $38 a barrel it becomes uneconomical for most shale oil producers to operate in the U.S. About 50,000 jobs are lost in Texas and 250,000 jobs worldwide. This is a boost for large oil importers such as India, Japan, and Europe. China also stands to benefit from low oil prices. Nigeria, Venezuela, Iran and Russia have the most to lose from an extended period of low oil prices. Politics in the Middle East also may play a part in decisions as the Saudis oppose intervention in Syria and Iraq by Russia and Iran. Rising shale oil production in the U.S. could also be one of the additional targets of Saudi policy. One consequence is that OPEC is divided with the Saudis going their own way.

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The protests in Hong Kong could end up as a failure because of the lack of any leadership in the movement for Hong Kong rights. In the early stage the lack of leadership helped build up mass support. As the movement grew it also had weakness in the form of a lack of a coherent program for negotiations with the central government in Beijing. The risks inherent in internet mass media communication are apparent as it brings out people in large numbers nd amplifies all grievances, but fails to produce tangible or concrete results as time passes and lack of coherent leadership weakens the mass movement or makes it overreach.  The lack of communication between the Hong Kong government and protesters with Carrie Lam Hong Kong's CEO not meeting them also led to a lack of a negotiated way out.  This overreach is what Friedman talks about in the NYT saying that the limited universal suffrage offered by China in 2014, with Beijing crossing off candidates openly critical of it, should have been accepted by Hong Kong protesters in negotiated settlement with some protections. The 1200 electoral body would vote for which candidates should stand for election in the Beijing formula. This was not such a bad thing as it offered limited suffrage where there was none in China, says Friedman. By rejecting that formula the protesters gained little because the "perfect" is not always the best option or a practical option when all the realities are taken into account. This is happening again in 2019 with the protesters and Beijing moving further apart and creating a bigger gap with very little constructive communication between the two sides. The efforts to bring the U.S. into protecting Hong Kongers rights by protestors marching to the U.S. consulate also could be seen as going too far by the rest of the people of mainland China, as the U.S. has its own problems including growing inequalities and confrontation between different socio-economic groups. The gradual shift to more disruptive tactics and confrontation with police led to damage to public structures that affected the image of the protesters. The overall lack of a coherent leadership that could negotiate some form of agreement for the future is now seen as a problem for the protest movement. It could lead to a failure to secure the Hong Kong rights protestors seek, says Friedman in the NYT, creating a story of missed opportunities with missing communication, missing negotiation around a "do-able" agenda that builds on common ground between the opposite parties. ...

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The firing of John Bolton as National Security Adviser opens up the possibility of a meeting of Trump with President Rouhani of Iran. There is a need for both sides to begin talks on a nuclear deal that would replace the one Iran signed with president Obama to address issues raised by Mr. Trump and Republicans. Iran and countries that buy oil from Iran such as India, China and Japan have an interest in relief from sanctions imposed by the Trump administration on imports of Iranian oil. The European Union is keen to preserve aspects of the nuclear deal. Relief from sanctions is critical for Iran to develop its economy. The last two decades have seen Iran struggle to develop its economy with the sanctions imposed by  different U.S. administrations.   President Trump expressed flexibility on sanctions saying "we will see what happens. I think Iran has potential. They are incredible people." President Rouhani urged Mr. Trump "to put warmongers aside." Mr. Trump told reporters that he had resisted Mr. Bolton's opinions on issues and realized he had moderate views when compared to someone like Bolton.  Trump told Iran "We are not looking for regime change. We hope we can make a deal and if we can't make a deal thats fine too. But I think they have to make a deal." Helping the U.S. and Iran come to talks is president Macron of France who hopes to setup a meeting at the UN General Assembly which meets next week following his efforts at the G-7 meeting in France last month. In the past when tensions were high in the Straits of Hormuz President Trump refrained from aggravating this by saying actions that are "disproportionate" should not be taken and respected Iranian intentions. The tone of the conversation between the two sides has moderated to the point where both sides realize the need for coming to some compromise. This is in sharp contrast to the period a few months ago with rising tensions in the Straits of Hormuz and the seizure of an Iranian ship. Bolton's opinions were not the only issue for president Trump. He was also seen as the source of leaks including one that said Mike Pence, the Vice President, had opposed Mr. Trump's plan to bring the Taliban to Camp David. Also contributing to the new climate for talks is Mike Pompeo the Secretary of State, who has promoted the idea of talks with Iran. He told the media about such a meeting at the UN General Assembly in New York- "Sure. The president has made it very clear that he is prepared to meet with no pre-conditions." The willingness to try new ideas even contrary ones to policy pursued only a short while ago as long as the desired goal is reached is a feature of this presidency and key advisers. From the beginning of the Trump administration there is a firm sense of the need to end the wars in Afghanistan and Iraq. and reduce foreign entanglements that have dragged on wasting resources and destroying priorities. With a willingness to try all sorts of approaches even ones that appear to be contradictory always keeping the end goal in sight. ...

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Inozemtsev of the Institute of Post-Industrial Studies in Moscow, asks the question wht if the Russian economy shows no growth in 2017, and 2015-2016 become the beginning of a serious downturn. If oil prices remain low for an extended period as now looks likely with factors such as shale oil technologies, Iranian oil, and Saudi policy, playing an increasingly long term role, Russia could face some of the problems former finance minister, Alexei Kudrin, other business leaders including head of Sberbank, warned about. A major problem that Inozemtsev points to is the change in the business climate for foreign investment in 2012-2016 as the Russian economy looks more inward, and the departure of many foreign companies. During the period 2000-2008, a major boost to the economy came from foreign investment which brought with it management and technological improvements. No emerging market country, including China, can have a bright future without access to new technologies and investments from foreign investment. The current period starting in 2009 stands in sharp contrast to the earlier period with the Russian economy lacking the boost from foreign investment, facing capital outflows, and international conflicts creating a long term effect on oil prices. Russia needed time to move its economy away from commodity dependence through technological improvements and investment, yet this does not appear to be happening, raising serious questions....

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This interview with Donald Trump by the publisher, editors and columnists of The Washington Post, Ryan Jr., Hiatt, Lane, Marcus, Diehl, Armai, Attiah, provides an exceptional insight into the views of Donald Trump on domestic and foreign policy, on his campaign for president. It is the result of an effort to get Trump to state his policies on different issues without the fuzziness in which Trump has carried out his campaign, often taking different sides of the same issue. In some situations Trump is pressed hard on his positions or controversial statements, to clarify what he has not clarified in the burst of media attention Trump received in the past 6 months, especially on television media. First some myths and realities. A recent March 19, 2016, issue of the Economist cites the Pew Trust in showing that only about 17% of eligible Republican voters voted in the primaries. A person watching television news media coverage on Fox News, CNN, or MSNBC, would get the impression that the voter turnout was tremendous- this is not confirmed by the Pew Trust survey. The Economist points out that had the other eligible voters cast their ballots and even if Trump had a share of these votes, the results might look different. With a highly fragmented vote in the Republican primaries, and about half of the vote going to candidates other than Trump, Trump's voter support would add up to about 8-9% of eligible Republican voters based on the Pew Survey results. The question here would be is this a representative sample of the U.S. or of the Republican Party. And is one likely to make false generalizations about the nature of the Republican party from such a limited sample of voter opinion. Is voter sentiment inadequately reflected, and results hopelessly skewed because of the lack of good candidates in the Republican Party, and Trump's tactical rhetoric appealing to a group of working class Americans left out in the technological progress of the last decade. In the process is the hard work of the founders of the Republic, Washington, Adams, Jefferson, Madison and the framers of the Constitution being undone by a minority of disaffected voters with legitimate grievances on distribution of economic benefits of the technological progress, trade and global manufacturing networks- with a level of divisive rhetoric and decline in levels of public debate rarely seen. These are the clarifications sought from Trump and his response. Attiah raises the question of divisive rhetoric on minorities Hispanics and Black people- Trump says he is only talking about people here illegally, that he gets support from Hispanics here legally. He turns the question to Muslims and says there is a serious problem there that means being careful about how people are being admitted into the U.S. Questions about Trump's controversial statements about a wall with Mexico are not raised. Ryan pushes hard on the question of the libel laws standard that Trump says he is going to change, asking whether this would happen if Trump thinks the reporting "is wrong" but there is no malice. Trump wants the reporting to be fair for him, that reporters call him to check if he did this or that and why, before writing stuff about him, and he sees the reporting from the Post as very bad about him. He says his lawyers would have to tell the media, that he believes he should loosen up the standards so that this kind of coverage does not continue. On ISIS Trump pulls back when asked by Diehl about statements that suggested he would send the number of troops the generals wanted on the ground- estimated at 20,000 to 30,000- saying he would find it very, very, difficult to do that. On a nuclear option for ISIS Trump says he does not favor that. Suggesting that Trump like the other candidates in the election know there are no easy ways to tackle ISIS. Trump would rely on other countries in the region for help with troops on the ground, something that president Obama also favors, with limited results. Diehl also pushes hard on NATO- Trump says hundreds of billions of dollars are going to NATO and the whole burden for defending South Korea falls on the U.S. when it is not now a rich country that it once was. Diehl corrects him by saying for the public record that its not hundreds of billions, and South Korea, Japan pay 50% of the cost for defending their region. Trump wants to see 100% for the Korean peninsula defense borne by the South Koreans and Japan. Trump seees NATO as a good concept but needing more help from Germany, Poland, Baltics. At one point the Washington Post journalists tell Trump this is a position he shares with president Obama. Trump responds to questions from Hiatt about how he would handle the situations in black communities such as Ferguson, Missouri, and Baltimore, Maryland. Trump says he feels law enforcement is important and should play a big role in preventing the destruction of property from day one. He says jobs are what hurts inner cities but offers no solution about how to get the jobs lost in the steel industry for Baltimore, black neighborhoods sitting ironically next to the John Hopkins high technology university complex. Trump brings up the response that jobs could be created if the U.S. simply did not spend money on supporting nationbuilding overseas, a policy that president Obama has supported, and which the public has favored in the U.S. As Holman Jenkins brings up in a column on March 22, 2016 in the Wall Street Journal, these policies are being pursued today, and most of these jobs are not coming back so how would Trump bring them back or do anything about it, especially when Chinese workers in China's factories are being displaced by robotics in places such as Hon Hai factories. The more one thinks about it many of things Trump is saying are already being done, and there are no new solutions Mr. Trump has for today's problems of lack of upward mobility for the middle and working class- a priority for Sanders and Clinton also, not just for Trump. As a television personality and a candidate with a understanding of voter concerns, Trump artfully voices voter concerns of working class Americans for problems that defy easy solutions. Are there risks with Trump's approach that Trump has failed to think through or grasp? Does the unpredictable behaviour Trump suggests that would get allies thinking and trade partners responding lead to unpredictable consequences? Divisive rhetoric creates additional distractions in tackling the problems of the middle class and working class Americans. Divisive rhetoric within the NATO alliance would create additional distractions in tackling the problems of defending the European Union, such as using the very show of unpredictability. Diehl pushes Trump on this question. Would trade threats to China lead to a withdrawal from the Senkaku Islands by China? Trump says he thinks this would cause the Chinese to retreat . What if the Chinese see it differently, in their relations with Japan and South Korea, with a long difficult history, not necessarily in their relations with the U.S. Would a trade war hurt the global economy, and hurt confidence in U.S. fianncial markets just when the U.S. and European economies are staging a recovery, and when the economes of China, Japan and India are in a sensitive phase? These questions could not be raised because of time constraints, but must be on the minds of the editors of the Post and the WSJ, coming from different ends of the political spectrum. How would this help tackle the problem of upward mobility for working class Americans that all the candidates in the presidential election share? ...

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Chinese companies are executing plans to put them at the forefront of new technologies and innovation in many fields. Example of BYD which plans to make a hybrid by the end of 2008. It is already the second largest battery producer and started up less than 10 years before. And BYD has built a 16 million square feet assembly plant in Shenzen to make the hybrid on a large scale. And Hasee a computer maker is focussing on innovative computers and laptops that now sell for just $370 , and hopes to become the top computer maker in the next 10 years . It is already selling 100,000 laptops a month in China and is now the second biggest computer maker in China. It is Chinese government policy to support innovative technology companies to take leadership positions in worldwide industries and products. Speaking at the Chinese Academy of Sciences in June President Hu said : "we are ready for a fight to control the scientific high ground and earn a seat on the world's high technology board. We will make some serious efforts to strengthen our nation's competence."...

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There is strong cirticism from many quarters about low interest rates as a prime culprit in causing the bubble in housing prices. In comments before the American Economic Association, America's Fed Chairman Bernanke defended his role as Fed governor in 2003 when he along with Greenspan was an advocate of the decision to cut the Fed's target interest rate to 1%, and to leave it here for a year and raise it only slowly. Bernanke says countries like Britain, New Zealand, and Sweden had tighter monetary policy but there home prices rose more, and monetary policy explains only 5% of the variation in home prices. Analysis has shown he says that capital inflows such as those the U.S. received from China and other Asian countries explains 31% of the variation in home prices, supporting a contrasting theory that that its these global imbalances that drove the crisis. He also placed the primary fault for the housing bubble on relaxed lending standards and views that housing prices would rise forever. Alongside these comments Fed chairman Bernanke also said that bank supervisors and other financial regulators of which the Fed was one, has a better ability to contain the excesses that led to the economic crisis including housing bubble and other excesses, than the Fed as a monetary policy maker. By saying this Bernanke is acknowledging that the failure of regulation was a key part of what happened in the economic crisis. The failure to fix the regulatory system even now leads Bernanke to say that he is open to using monetary policy as a supplementary tool for addressing risks should another bubble develop, if the regulatory system isn't reformed. Still Bernanke and Greenspan were quite complacent at the time of the low interest rates and did not point out the dangers of global capital imbalances which were evident at the time, preferring to say that the United States could benefit from the inflows of capital from overseas without serious risks. And the Fed did not exercize its role of vigilance in alerting the country to excesses in the way the housing industry operated and in exercizing its own powers to that effect. Instead the Fed as regulator and in role as asafeguard for serious risks let itself become part of the cheering section as the worst excesses in housing were being exposed....

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The world is too dependent on one semiconductor manufacturer, Taiwan Semiconductor Manufacturing Company, TSMC. Companies in Taiwan make 65% of the dollar value of the world's chips. How did this happen? It poses a threat to the US and to the world economy. Finally the US is making an effort to correct this. The European Union already has plans to produce 20% of the world's next generation chips in 2030. Intel plans $20 billion investment for 2 chip factories in the US. Only months earlier this report in WSJ says Intel president Bob Swan was giving more contracts to TSMC for next generation chips.  It shows how much the pandemic has changed views on supply chain security. Intel ousted Mr. Swan for missteps in relying too much on TSMC as this dangerous policy became evident during the pandemic. Such was the culture that existed before the pandemic on supply chains, on investment allocation, and related issues. As a single semiconductor factory can cost $20 billion, the Biden administration is getting involved with Congress to rebuild America's semiconductor industry and independent supply chain. TSMC is built on subsidies from Taiwan government. Morris Chang founded TSMC in 1987 after studying at MIT and working 30 years at Texas Instruments. At founding half of the investment for TSMC came from Taiwan government. The US to rebuild will require the government to support the chip industry in many ways. In this sense the US manufacturers who ceded manufacturing to TSMC were shortsighted- AMD, Intel, Qualcomm Apple. They without realizing it built the model on which TSMC would thrive and invest and grow. Take just one example- to meet Apple's first order TSMC spent $9 billion with 6000 people working round the clock to build a factory in 11 months. Yes Apple did not have to worry about chip manufacturing and quality by contracting it out. Yet over the years it was ceding the manufacture of the most important chips in its products to an exclusive supplier. It was also ceding away the technologies that went with it. Americans were told not to care by the best universities and professors, by economic departments and scientific educational institutions for two decades leading to the situating facing America today. Meanwhile Taiwan is supporting its chip industry even further as it relies on the chip industry to provide protection in its struggle to maintain its independence from China. A situation no American manufacturer understands or had planned to create, but is now left to the Biden administration and president Biden to solve. After twenty years of unchecked capital allocation and investments by the leaders of American manufacturing based on an inadequate and incomplete understanding of the role of manufacturing and manufacturing technologies in the life of America since its founding two hundred years ago, president Biden faces the task of restoring confidence in America. And this at the time of a pandemic that has taken hundreds of thousands of lives.      ...

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This exceptional article in the NYT by Emily Feng and Carlos Tejada shows the social changes taking place in China as more women and men decide to postpone marraige. For the first time there are more women than men in master's degrees programs in China. Women in China are now increasingly better educated and prefer to be independent, not dependent on their spouses as in the previous generation. A typical Chinese household has 3.1 people in 2015 compared to 4.43 people in 1982, according to the China National Bureau of Statistics. Fewer children, more people living alone, women living independently, and seniors living alone are some of the reasons.

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The US sees no contradiction to India looking for bargain priced oil from Russia to meet the growing needs of its economy and is actually furthering the goals of the G-7 by lowering the price Russia gets for its oil. It helps the economy of 1.2 billion people that like the rest of the world has struggled to fight the pandemic and has incurred the kind of heath costs that even China is now struggling to pay for. President Biden clearly understands and supports this. Democracies an only succeed if they fulfill the aspirations of their people. On this point Biden made clear in his State of the Union that he will generate what it takes from large corporations that paid no tax, to invest in America. Rather than fuel the profits of large oil companies India has increasingly chosen to use Russian discounted oil to invest in India. The Biden and Modi policies are identical generate savings and invest big time in trillions of dollars over the next few years to put democracies ahead in meeting rising aspirations that have been unfulfilled for far too long, which is where the real battles are being fought and will be won, and rightly so. US Assistant Secretary of State for Energy Resources, Geoffrey Pyatt,  said during a visit to New Delhi on Feb. 16-17- "Our experts now assess that India right now is enjoying a discount of about USD 15 a barrel in the price that it is paying for its imports of Russian crude. So by acting in its own interest, by driving a hard bargain to get the lowest price possible, India is furthering the policy of our G7 coalition, our G7 plus partners in seeking to reduce Russian revenues."  Looking at the bigger picture the problem was created by Germany under Merkel who built Germany's over dependency on Russian oil to power a cheap fuel economy it thought was in Germany's interest. This is now being reversed by the hard work of Mr. Habeck of the Green party in the coalition government of Scholz in securing alternative supplies in record time for the EU to avoid a recession. In this sense the perception created early of India which has suffered itself from invasions in 1962 and incursions in the Himalayas more recently, it is not a problem India can solve by becoming energy short at a time when it has invested so much in fighting the pandemic. A similar problem was created by Republican and Democratic administrations of the past that concentrated the supply chain in one country. India lost much investment in the last 8 years as a result of the policies of Merkel's Germany and past Republican Democratic administrations in concentrating the supply chain in one country. ...

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The Soviet threat actually receded after 1964 when Brezhnev became head of Soviet Union till 1982. During that period in the 1960's till today the face of NATO as today was from a series of heads of governments of Dutch Stikker in mid 1960's or other small European states such as Norway Stoltenberg and Rutte Netherlands again in 2025. It could be said that none of these leaders  of small EU countries represented US interests- or even European interests- a point the DJT administration is trying to make. First NATO head UK's Hastings Ismay's NATO for "keeping the Russians out, the Americans in and the Germans down" is more British Imperial policy of 1904 -1940's as the Indian Viceroy's Assistant, not US policy or in America's or even Europe's interest in 2025. It hurt the US in Venezuela as Russia propped up a regime which led to millions of refugees entering the US illegally. And it hurt Europe as Russia propped up the Syrian regime with millions of refugees entering Germany and destabilizing its political structure. Going back if a new defense institution was set up to replace NATO by the Europeans in 1970's this would have been the right step which would have not led to Russia propping up regimes in the Americas or the Middle East. A goal that is being discussed with Russia by the DJT administration to refocus American efforts in a new direction and pause not just the Ukraine war but also put the US  and Russia in a new direction with the new competition from 3 billion people in China and India changing everything we know about the world. ...

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The port of Lazaro Cardenas in the western state of Michoacan was taken over by Mexico's military in November 2013 in a fight to control the drug cartel Templars. The Templars have infiltrated the local administration and police in the state. Templars are involved in illegal mining of iron ore in the state which is shipped to China. This led to the killing by the cartel of the head of institutional relations at the ArcelorMittal plant in the state in Jan 2014. A detailed account of the events leading to the killing of Virgilio Camacho of ArcelorMittal, the highest profile executive killing in Mexico.

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Blinder cites the reasons why the stock market declines are showing a disconnect with the economy in the U.S. which benefits from low oil prices, and the small impact of a slowdown in China on the U.S. economy. Yet other reasons may account for nervousness of investors, as Grep Ip points out in the WSJ, the lack of support from the Fed with its gradual rate hike path, and lack of support from the Chinese government with its policy of reducing debt and no significant stimulus.

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India's Ministry of Finance predicts GDP growth of between 7 and 7.5% for 2018-2019, after faltering GDP growth in 2017-2018 following action on demonetization and introduction of a national Goods and Service Tax. The IMF predicts growth of 7.4% for India in 2018 compared to 6.8% in China in 2018, with growth of 7.8% predicted for India in 2019.  Chief Economic Advisor Arvind Subramanian says there are "robust and broad based signs of revival," though risks remain in rising oil prices and inflation. The level is below what it could be, yet robust considering the policy actions taken by the government for the long term such as the nationwide GST implementation, which was taken up by previous administrations of both parties in government but never implemented till 2017. In addition the government faces the tasks of recapitalization of banks, the issues of job creation as manufacturing in India in the global context is only beginning to take shape, and agrarian distress.  The new Budget takes up the issues facing rural areas of the country by compensating farmers to the extent of 150% of agricultural cost and introducing the largest health care security scheme in the world for poor families. This comes a year before new national elections. The Modi administrations's focus appears to be for taking steps that will generate growth over the long term and learning from errors, yet being bold enough to take the necessary action based on experience.   ...

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Pearlstein points to the need for the structural changes in the U.S., Europe and China to address the serious imbalances that are at the root of the problem. This process will be painful and mean a short term drag on the economy even if the right actions are taken. The process of unwinding the imbalances will take time. Lower growth in China will be good for the bubble in real estate markets and the reduction in the trade surplus, even though this will reduce imports of European and U.S. machinery. Higher savings in the U.S. and reduction of consumer debt will slow retail sales but this is healthy for longer term growth. The same is true for savings in deficit reduction that will result in more layoffs at the local level. The government needs to have similiar action take place at the banks to end their "extend and pretend" practices and finally write off bad loans in residential and commercial real estate. There is no easy way out, no solutions that can be made without a sharing of the pain. Policy makers around the world have tried to look for painless solutions for years and this may be the end of the road. There is some action that the governments and central banks can take. Pearlstein suggests that the European Central Bank buy up some of the sovereign bonds being dumped on the market even if it means printing money. The Fed, the Bank of Japan and the central bank of China can also swap some of the Treasuries they own for European sovereign bonds. This would give time for the EU leaders to give the European Financial Stability Facility the resources and powers to replace the sovereign bonds with more reliable European bonds. The Fed can take this opportunity to sell some of its huge pile of Treasury bills into the market so that it has more room for action in future years. The U.S. government can move up the spending for infrastructure in years 8, 9, and 10 to the next 2-3 years to give some support to the economy as these changes take place. The spending decisions should be left to an independent Infrastructure Bank. See the related article by Krauthammer in the Washington Post, August 5, 2011, which provides a companion policy prescription for U.S. deficit reduction based on the work done by the Bowles-Simpson Commission and by preserving efficiency and fairness....

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Morse's reasoning and figures for a fall in oil prices by the end of this year and eventually settling down in the $90 price range? On the supply side he sees the OPEC decision to last year withhold oil production increases and this year's decision to put more oil on the market putting an additional 1.2 million barrels a day on the supply side. About 500,000 barrels a day are added to this from Iraq as security improves in Iraq to make this 1.7 million barrels a day. And refined product with refining capacity for the heavier crude has increased creating more competition among refiners leading to refined product increases lagging behind crude price increases. Add to this the large investments in the middle east and especially in Saudi Arabia to increase production, also in places like Nigeria and Angola, says Morse. On ther demand side he sees an astonishing decline of as much as 900,000 barrels a day year over year from 2008 over 2007 in the USA as fuel conservation is kicking in. On this score he sees a decline in oil price even if this decline had not happened in the USA. (From the video interview). This underscores the importance of everything else that is happening. He sees demand in China declining after the Olympics. The Chinese economy will slow as the Indian economy is already doing and oil imports will decline for China. At this point demand from India, China and other developing countries says Morse is increasing at 1 million barrels a day year over year and will now head downward. A couple of points are relevant in this context. One is that credit contraction in one study by University of Chicago economist Anil Kashyap is expected to be $1 trillion, in recent BW report on the economic situation and banks lending. With such a big impact industrial production by the end of this year and into 2009 will be severely impacted, especially as other countries in the EU and Asia are affected. This plus the dramatic nature of the shift to smaller cars as companies like Ford and its CEO Alan Mulaly vow to transform their production by 2009 to smaller cars is sure to bring further declines in demand. See recent statements by Mulaly and Ford. Morse's credentials show that he brings experience un teaching monetary policy at Princeton, as well as experience going back to being Deputy Assistant Secretary of State for international energy policy in the Carter administration , cofounder of consultants PFC Energy and publisher of Petroleum Intelligence Weekly, following the petroleum industry for many years. He has in the past predicted the emergence of Russia as a dominant oil supplier rivalling Saudi Arabia, and predicted the oil price increases based on fundamentals. So as he says the oil price has always been affected by fundamentals, that being the reason for the oil price increases in the last few years and now the moderating influences that reverse someof these oil price increases in the coming year and continue to exercize that moderating effect in coming years. ...

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Thomas Friedman of the NYT sees a climate change as an area in which Trump has ignored the information of eminent scientists. He sees a weakness of the Trump administration in Trump's putting no importance to briefings by experts from climate change to national security briefings. Friedman sees Russia and hacking as a major issue facing the new Trump administration, including the new hearings in Congress from leading Republicans on the cyberattacks.

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Supply chains are unraveling in many industries with the tariffs imposed by president Trump on imports from China, and renegotiated trade deals with South Korea and other countries. The growth in the value of foreign value added was possible with cuts in tariffs in the period after 1990 and the emergence of China as a low cost manufacturer with cheap labor. Foreign value added increased from 20% in 1990 to 30% in 2011. The impact on factory towns and communities in the U.S. of trade in which the U.S. manufacturing declined as it shifted to China resulted in the surge in support for president Trump. The tariffs war with China is an effort to correct this imbalance. The result is a shift in supply chains away from China in some industries and gradual shift in others. Rising wages in China had already resulted in early shifts and the the environmental costs adding to this trend. President Trump temporarily suspended a threatened imposition of duties of 25% on $325 billion of Chinese imports. A renegotiated Nafta agreement with Mexico for automobile production and determination of U.S. based content and wages was designed to reset the relationship with Mexico and the auto supply chain for production in Mexico. A threat of tariffs on European auto imports to the U.S. is set for a decision in November. The trade dispute between Japan and South Korea and threat of tariffs also shows the effect this is having in other countries. With the U.S. looking at its own interest in the global supply chain and its advantage or disadvantage, industries and companies are not free to make decisions based on which country offers the best arrangement and deal for manufacturing. Notions of competitive advantage in the tech race with China are affecting the way the U.S. and European nations are acting. ...