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James Galbraith points out how Trump appeals to aging Reagan voters on Social Security, and older white Americans. He says much of the talk about the wall is bluster to appeal to this group of voters. On the Democratic side he points out the failure of Hillary Clinton to appeal to younger voters. Galbraith says the young are voting in large numbers for Sanders, and this is likely to shape U.S. elections in 2020, even though Trump and Clinton are nominees of the Republicans and Democrats in 2016.

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Steven Mnuchin, a former Goldman Sachs executive is the new Treasury Secretary in the Trump administration. His ties to Goldman Sachs go beyond his own work at the firm. His father joined Goldman in 1957, and worked for his entire career at the investment bank. Steven's brother Alan also worked at Goldman. During the campaign Trump was severe in his criticism of his opponents Cruz and Clinton's ties to the bank. Ironies abound, not only is the new Treasury Secretary from Goldman, his connections go back a generation. The Treasury Secretary under Clinton was Goldman Sachs executive Robert Rubin. Under Bush who followed Clinton the Treasury Secretary was Goldman Sachs executive Henry Paulson. Under Republican and Democratic administrations Goldman Sachs executives have held key positions. Mr Mnuchin was campaign finance chairman for Trump for 6 months leading to him being chosen for Treasury Secretary. Mnuchin joined Goldman in 1985. During the campaign Trump was also severe in his criticism of financier George Soros, making this a key point in a debate with Clinton for taking Soros's support. This report by Das and Ensign points out that in 2002 Mnuchin left Goldman to run a credit fund set up by George Soros. In 2004 Mnuchin founded hedge fund Dune Capital Management LP with Soros support.  When IndyMac bank collapsed a deal with the government was arranged that covered a part of any future loan losses being taken by FDIC, and Dune was one of several hedge funds and private equity funds including Soros funds that acquired it for $1.5 billion. The renamed IndyMac bank was called OneWest with Mnuchin as chairman. OneWest was sold in 2014 at a large profit to CIT Group Inc. This report says CIT Group took a $230 million charge in July 2015 for accounting problems at OneWest.  During the latter part of the Trump campaign after he joined it in May 2016, Mnuchin set up a joint fundraising agreement with the Republican National Committee. This made it possible for major donors to give to the Republican party and Mr Trump. The head of the Republican National Committee is Mr. Lewis Eisenberg. Having run the technology division at Goldman, Mnuchin was prominent in Goldman and investment banking circles in New York.    ...

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With the theme of championing the interests of the people left out in the last 2 decades under both Bush and Obama, left out my technolgical changes and world trade trends, left out by the 2008 financial crisis and its aftermath of deep unemployment for older people especially white men, struggling economically, Hillary Clinton tells the Democratic convention, "I will carry all your voices and stories with me to the White House." She tells millions of Bernie supporters  that she has heard them loud and clear-  "your cause, is our cause." In this way Hillary Clinton sought to dispel any doubts about her in people's minds for not being forthright on questions related to a private email server and from earlier periods, and from overzealous fundraising. Telling people that on the things that really count and matter in people's lives, just as Bill Clinton did in his campaign at a similiar juncture- she will be there for them always, and always working to put their hearts up and centre, with her Methodist upbringing and her unmatched ability to work relentlessly in pursuit of worthy public goals. ...

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With so much coverage of other aspects of China,  to really understand China and Xi Jinping one has to understand the rural urban situation in China. Xi's long experience as a teenager in the cultural revolution of Mao was in rural areas, the 8 years he spent there till the age of 22, as this report by James Areddy with help of Yijun, Cheng and Qi aptly shows. It traces the shift and mass migration to cities starting with Deng's modernization drive in 1979. This shift of labor to city and town factories as the U.S. and Europe shifted factories and production to China is the story of our times. How it has both helped and hurt China and how it has become the dominant issue of our times, and a lesson for India in the middle of its own modernization and shift of labor to cities. It has helped China modernize with the shift during 1979 to 2016 and run into a road block with president Trump leading a movement in the U.S. of people most hurt by the outsourcing of factories and production to China. It was not meant to be this way. Yet the shift also led to ripping up the fabric of communities and towns with loss of factories across America over three decades. Because China is a large country the impact was huge decade after decade, leading to a backlash against lost jobs in the U.S. and in Europe.  Xi Jinping has romantic view of rural China as he spent 7 years in Shanxi province rural areas during the cultural revolution under Mao. During this period he toiled as part of farm labor alongside villagers which allowed him to get to know villagers and farmers in the countryside well, and formed his view of the world around him. As it is described in a description of the man in Chinese sources- "He arrived at the village as a slightly lost teenager and left as a 22 year old man determined to do something for the people."  China's system separated migrants from city dwellers not  giving same rights to better education, to schools and housing, and official documents separating the two, city dwellers and migrant populations from rural areas. As a result as China modernized and population shifted -shown here in excellent graphic charts over four decades- in 1979 from about 80% in rural areas and 20% in urban the shift goes to 50-50 by 2001. Today it is 40-60 with 60% in rural areas but a population of 40% suffering from severe inequalities and  low incomes. So that GDP per capita of $10,000 for China is deceiving. The real incomes in average disposable income is about $4300 in urban and $1700 in rural area, according to National Bureau of Statistics. High school education is hard enough to get in rural areas, medical care is very basic and the $1700 would hardly get a room in low income housing in a large town in China, says premier Li Keqiang. Keqiang did his masters thesis on urbanization and has studied this shift from his college days. Just as in Gandhi's India, Mao's China is the story of the villages, with 128,000 villages for 600 million people in Mr. Xi Jinping's anti-poverty drive. Hong Kong other issues have to be understood in the context of these concerns of China's leadership today- the sense that strong central leadership alone can keep the country together and bring a decent life to the people in the villages and in the countryside outside the cities.  Modernization of cities still set in the context of China's vast rural population and essential to its full uplift and progress. Xi has allocated $80 billion each year to bring roads, schools, medical facilities, and other amenities including electricity and modern heating. The idea now is to shift people back to the villages, find opportunities for jobs and livelihoods in farming, tourism with guesthouse facilities, and other occupations in the villages. The villages are being turned into attractive places to live one by one in this party drive and providing new enthusiasm and support for the party's efforts. India can learn from this experience in China. The western nations of the U.S. and Europe can no longer and will no longer undertake the wholesale shift of factories with loss of jobs to China or India to offer the prospect of bringing these countries to the kind of urbanization and overall prosperity of small nations like Japan and South Korea, which are a tiny fraction of the population of China and India+ Pakistan + Bangladesh. As a result China is changing strategy now with a return to some aspects of the informal economy in Chengdu with street peddlers and tiny retail, and return of migrants back to better built and improved villages in the countryside. A better life than in cities is possible this view says for people from these rural areas, if the rural areas are given modern facilities and construction and resources are allocated, job creation locally tackled. The villages can offer better air quality, better quality of life where villagers who earlier migrated to cities with ownership of land, when they are modernized with better roads and have better facilities for education, housing and healthcare, better amenities. The new approach is to strike a good balance for urbanization, by modernizing and investing in villages and small towns, so that cities can cope and overall life can be better than with mass migration and wholesale urbanization. It is also a balance that works well for the U.S. and Europe which can redirect manufacturing to their home regions as part of a better distributed and balanced supply chain than the one that was unwittingly built over the last three decades.    ...

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Krueger and Posner, eminent economists, say the reason wages have stagnated in the U.S. with wages not having budged much over a decade 2008-2018, is not only because of globalization and automation as long term trends. They attribute this stagnation in wages to "monopsony power," or power American corporations have over workers because of their stronger bargaining position and because workers have few alternatives.  For most of this period 2008-2018 high unemployment as reflected by the people out of work and taking part time jobs or having stopped looking for work, shifted bargaining power to companies. The Economist magazine pointed out that workers have not shared in the profit and gains corporations made during this period. Here Krueger and Posner show additional factors such as non compete clauses in worker agreements that have depressed wages. Half of franchise agreements prohibit competition for labor. Outsourcing work to other companies that hire workers means these outsourcing companies have more power over workers than the original companies using the labor. Unions represent only 7 percent of private sector workers by 2017, compared to 35 percent in the 1950's, so that there are no mechanisms to counteract the greater bargaining power gained by companies vs. workers. The way workers have roots in the communities they live and the consolidation of employers into a few companies in a particular area, mean fewer options exist for workers.  Senators Warren and Booker and the anti-trust division of the U.S. Justice Department are in agreement on this issue of widespread use of noncompete agreements that is considered unlawful, says this report in the NYT, offering hope for a solution to bring a better balance between the rights of workers to fair wages and companies seeking profit for stakeholders. Issues about workers, lack of gains for workers, prevalent outsourcing, and the frustrations of labor with parties that had lost touch with their worker base- such as Labor in Britain, SPD in Germany, Socialist Party in France and the Democratic Party in the U.S. - have led to political upsets with support shifting to other parties. This has not led to significant change to improve bargaining power of workers to correct the imbalance that now exists between labor and companies, leading to calls for change. Eric Posner is a law professor at the University of Chicago law school and co-author of a new book "Radical Markets: uprooting Capitalism and Democracy for a Just Society." This book turns the popular notion on its head that free markets have produced the imbalances that hurt social cohesion and democracy, by saying it is precisely the suppression of free competition such as for labor that have created this unhealthy situation. This is true in other areas where monopoly power has developed in other parts of the U.S and European economies in 2008-2018, as also for distortions in capital allocation that hurt infrastructure and other public investment. Krueger is a professor of public affairs at Princeton University and former head of the President's Council of Economic Advisors in 2011 under Obama, showing that Democrats themselves failed to correct this imbalance leading to a shift to other parties and Mr. Trump, who also appear to lack ideas or solutions to this problem that affects social cohesion and democracy. This is contrary to the vision of American or European society of better opportunity for all shared by all Americans and Europeans for most of the twentieth century. ...

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"To Invest (at home), To Align (with allies), To Compete (with the world)" sums up the approach of president Biden with China. It also sums up the approach at home and overseas. Biden senior adviser, Jake Sullivan at Council of Foreign Relations sets out the framework and path for managing US-China relations into the future for many decades. Here at the Council of Foreign Relations he shows how- through careful study of the relationship's history, the changes in the relationship, and where it is today in 2024. Having participated in previous administrations Jake understood how it has evolved, where mistakes were made by both China and the US, where misperceptions took hold and need for clarification, for action. The old Strategic Dialogue followed by Paulsen under Bush 2000-2008 allowed the relationship to be guided by business interests, -without any clear strategy or idea where it was going except maximizing interests of business on both sides- was continued by Kerry under Obama 2008-2016. Sullivan, Blinken and Biden have built a Strategic Economic Cooperation Framework that has clear goals on the American side and goals on the Chinese side, and work between the two presidents and their cabinet ministers. Trump 2016-2020 rejected the earlier Strategic Dialogue but was not able to set up a sound framework that would guide future relations for decades. Sullivan helped set up a new framework around three principles- To Invest, To Align, and To Compete.   Here he describes how the plan to invest trillions in infrastructure in the US was part of this plan's principle To Invest. On Align it was to derisk not decouple by reducing the excessive concentration of supply chains in China, that was revealed as a problem in the pandemic years. Building up manufacturing at home and in India, Vietnam and Japan. Align also was to have allies Japan, South Korea and India to be aligned with the US policy. It also meant that all three countries would follow the same framework for their economies To Invest, To Align, To Compete.  By combining the strengths of the 2 largest economic centers Seoul/Tokyo with New Delhi/Sydney in Indo-Pacific the leveraging effect of US strength could be felt to support its position. And third to compete on level field so that America retained control of its technologies and implementing exports controls. And sharing this in  open communication with China that the US was protecting its technology and interests the way China has done in the past for its interests. The benefit of open communication even where there are differences had the advantage of not turning this into open rhetoric that damaged relations as had happened under previous administrations. Wang Yi on China's side having seen and approached it with careful study and reflection had similar goals to stabilize and put the relationship on a sound footing. Sullivan met extensively with Wang Yi in meetings in several locations around the world. Ministers Yellen, Raimondo, Blinken, Kerry, were sent to China for extensive discussions as part of this strategy in 2023 leading to remarkable change in the mood and confidence in US- China relations after tumult in 2016-2020 and uncertainty in previous administrations. Much credit goes to president Biden and Jake Sullivan, Anthony Blinken, and also to Wang Yi and Jinping in no way diminishing their own initiative, so that for the first time in decades the US China relationship is now on a stable footing. Both countries faced common challenges around counter narcotics, around climate change, and other issues. These are being addressed. Competition is managed carefully and no rhetoric is taking place so that the largest two economies and about 1.7 billion in US and China and 2 billion people who are allies in India/Indonesia/Vietnam/ Korea/Japan living on the same planet earth can have economic and other cooperation  with different cultures, economic structures and systems of government. The result of such a framework also gives the basis for cooperation with America's allies to invest in Africa and Latin America and in the people of these two continents as another level of alignment and investment for a safer better world. ...

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A WSJ/NBC News poll taken in Dec. 2015 after the San Bernardino terrorist attack on Donald Trump's proposed total ban on Muslims entering the country, shows 57% of the people surveyed opposed to it, and 25% supporting it. Among Republican primary voters 39% oppose it and 38% support it showing the Republican voters almost evenly divided on the issue, and the proposed ban not affecting Trump's standing with his supporters. About 56% of Republican voters see Trump in a positive light compared to 26% negatively, showing that Trump has strong support in the Republican party. The divergence in views sharpens when considering that half of Republican primary voters have an unfavorable view of Muslims while 79% of Democratic primary voters having a favorable view. In the country as a whole the poll shows about 60% have a favorable view of Muslims.

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Greg Ip of the WSJ cautions about thinking that the GDP growth of 3% is likely to be achieved with the Trump plan for a corporate tax rate of 15%. He says evidence from Britain and Canada- Britain reducing the tax rate from 30% in 2007 to 19% today, and Canada from 28% in 2000 to 21% in 2004- is disappointing. In Britain the increase in GDP averaged about 0.1% a year. Business investment increases with cut in corporate taxes, and the U.S. corporate tax rate is higher than other advanced countries such as Germany, yet GDP growth includes other factors, such as the business cycle, demographics, productivity growth, aging, technology, regulation, says Ip. It is better if the tax cuts are spread broadly over the population, and tax cuts are offset to a greater extent by savings in other areas, and that tax cuts promote productivity boosting investment, to create enough of a surge in growth above 2%.

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Following the fifth North Korean nuclear test DW.com talks with Rudiger Frank about the test and what this means. Frank says the negotiations with North Korea and efforts to limit the program so far have been a colossal failure. Tests have continued and without a change in strategy more tests will be followed by the usual condemnations by world leaders and further sanctions. Frank says this change in strategy would include recognizing North Korea as a nuclear state, and getting North Korea to ensure the weapons are safe and secure in the country, getting a clear idea of what and where the weapons are. The International Atomic Agency would be asked to go in and make inspections. The next step would be to freeze the program at some level agreed to. This is a tough step to take but it only recognizes the reality of the situation, and continued development by North Korea of nuclear weapons if no steps for change are taken. 

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Economist Paul Krugman points out the risks of a trade war in the tariffs announced for steel and aluminium by president Trump. Yet he accepts that he advocated stronger action on China's currency in 2009-2010 when the U.S. economy was weaker. In the past on the TPP agreement proposed by president Obama, Krugman said that it would have an insignificant impact as most of the gains on trade were already made. Here Krugman is critical of the language used by president Trump about trade wars being "easy."  This is taken out of context though as president Trump is saying that it is easy in the context of a country enjoying a $100 billion surplus with the U.S., because that country is going to have incentives to maintain a good trading relationship with the U.S. Essentially this means that the steel industry in the U.S. benefits. China also benefits as it closes many of the older steel plants that led to overproduction. This would reduce overcapacity in China's steel industry, a problem China's economic planners see as a priority. China already is making the shift to higher technology products and this process will be accelerated, as it puts less emphasis on steel and metals as it did in its earlier stage of development. As a result contrary to textbook economics this has the potential to be a win-win solution for the U.S. and China in the long run. So little was done under the Bush and Obama administrations to manage trading relationships with other countries so that the interests of small communities across the U.S. were protected from unfair trade- that Reagan administration trade expert Robert Lighthizer took up the cause of the U.S.,workers in these communities. Surveys showed U.S. public opinion also had shifted among educated, professionals and middle class on this issue by 2015, against unfair trade that hurt U.S. interests. Robert Lighthizer is now the Trade Representative for the U.S. in the Trump administration. Reports in the WSJ about the discussion within the Trump economic council, show Gary Cohn favored not imposing the tariffs on steel and aluminum. Lighthizer advocated the tariffs and was able to convince the president.  For Trump this presents a win-win situation, as a mild response by China -and other trading nations that have enjoyed a favorable situation in the past -with its huge surplus and favorable trading relationship with the U.S. would present a win for the president. Economist Krugman accepts this when he says tariffs in the current context of the trading field- that is more favorable to other countries- are not such a big deal, only the use of such policy that is likely to endanger world trade.  As in much of the debate that takes place this adds to the headlines today yet provides delayed and limited relief to communities across the U.S. devastated by world trade as documented by experts who studied trade patterns and their effect on regions across the U.S.  As the WSJ points out in one report the trade deficit itself may continue to grow under president Trump because of other factors. The U.S. dollar surged 8% during the last 2 years of the Obama administration with the economic recovery underway. With Trump's election win the dollar surged another 3%. This may play a bigger role in the direction of the trade deficit than the new steel tariffs announced by president Trump. Workers and unions matter. As TPP pushed by Democratic party president Obama was opposed by the unions, and by the auto industry (workers and auto companies) in the midwestern states which suffered a hollowing out in the last decade. A WSJ survey after the election showed Clinton received 56% support from union workers in 2018 compared to 65% for president Obama in the 2012 election. Some of that erosion in support may come from Obama's TPP stand fervently opposed by the unions and workers in the auto industry. A similar situation took place in Ontario with hollowing out of the auto industry in this large industrial state in Canada and led to the rejection of the Conservative government and election of the Liberal Party under Justin Trudeau. This lesson is so far lost in the Democratic Party's debate.     ...

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Michael Phillips of the WSJ provides a profile of typical Donald Trump supporters, a couple Joey and Tina Elias, driving from Alabama to Pensacola, Florida to attend a Trump rally. Joey, 46 years old, lost his job in 2010, and has since worked at jobs a little above the minimum wage. Tina, 44 years old, is assistant director of a daycare center. They have worked hard to build a house on a 3 acre plot of land, after living for several years in a mobile home. They have 2 children, and Joey says he has to worry about job security before making any purchases. They are against free trade, as its not seen as favoring working Americans. They favor a strong military, because they see president Obama as defunding the military and weakening America overseas. They say they are not racially motivated, believe in God, but not church going. They don't feel strongly about social cultural issues, believing in live and let live. They say they like Trump not because he is saying anything new, only because he has voiced their concerns, they have felt this way for a long time. They want to see America winning- and to win as the country wins. What is striking is that the couple face some of the same job insecurity, and the paycheck to paycheck job insecurity and fear of losing what they have with job loss, that is being felt by average working Americans after the 2009 economic crisis. On the Democratic side Bernie Sanders is gaining support from white working class people who share the same anxieties about economic insecurity following the 2009 economic crisis....

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Janet Yellen is nominee to be Treasury secretary in the new administration of Joe Biden. The economic rebound from the pandemic that started in the summer is faltering without additional stimulus and help to businesses and people affected by the pandemic. She is the former chairman of the U.S. central bank the Federal Reserve.  Yellen faces a divided country and likely a divided Congress on many issues facing the country. She says of these divisions and the challenging task she faces of forging compromises- "Right now we live in a country where people look at the same set of facts and come to diametrically opposite conclusions, so that is a big challenge to anyone who takes that job, to build support for your policy outcomes." Yellen believes that the slow recovery after the 2009 financial crisis was because of a lack of a big enough stimulus and policy consensus across parties and with public opinion backing this up. During the pandemic in March 2020 the first stimulus was passed for $3.3 trillion  with support from the Congress and the Trump administration. Today Congress is split on the second stimulus with Democrats pushing for about $2.2 trillion for aid to state and local governments, jobless workers virus testing strategy. Republicans calling for about one third of this or $650 billion to help small businesses and industries such as tourism, retail and airlines. Because  interest rates are near zero much depends on getting an effective stimulus for speedy economic recovery. Conversations between the Treasury Secretary and the Federal Reserve, America's central bank, are critical to getting things done. A lot also depends on how Democrats and Republicans can put aside differences for the sake of getting the recovery back in place where it was during the summer. The media has a role to play in not stoking differences in public opinion which was the case close to the election to an unprecedented degree. One critical aspect of American process in getting things done is to bring Congress and the public with an elected president. Without a conciliatory approach and humility few presidents have succeeded as Congress and public opinion is also critical to getting things done. The House changes every 2 years so that even with  majorities- made transient by the founders of the constitution- nothing is certain without getting the other political party on your side. For the sake of the country and the people devastated by the pandemic, the professional class, media and politicians, Congress and the president need to bring a clear and transparent willingness to look at the national interest going forward.  ...

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President Biden addressed the Nation from the Rose garden today November 7, 2024. His remarks were conciliatory. "You can't love your neighbor only when you agree."  "Something I hope we can do, no matter who you voted for, is see each other not as adversaries, but as fellow Americans. Bring down the temperature." It is a remarkable end to a remarkable presidency which history will judge as perhaps a single term in which more was done than in any other 4 year term of a presidency, except for FDR in 1932 and Lincoln in 1861, tackling a once in a century pandemic, and rebuilding the economy, manufacturing, and infrastructure. And even correcting missteps on immigration by getting the legislation to fix it. It is a tall order for anyone who succeeds Biden though in the current post election situation there will be the typical euphoria on one side and losing on the other.  During the Republican sweep by Herbert Hoover in 1928 Franklin Roosevelt was elected governor of New York and he used the intervening years to 1932 to prepare for the monumental task ahead by testing his plan for economic recovery using New York and a couple of states from Illinois, Ohio, Pennsylvania, Massachusetts, Maine and New Hampshire, setting up the first unemployment insurance, shorter week, annual employment and other ideas to stabilize employment for one third of the US economy. Biden says he has asked his administration to work with Trump's team for the peaceful transition to a newly elected president. None of the fears about the transition came true with the new president getting a clear mandate to tackle the cost of living crisis for Americans. ...

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Cohn and Monkovic of the NYT show how the shift of blacks, hispanics, and white collar professionals is doing to the demographics in the eastern, coastal and southern states, and how this will impact 2016 and future presidential elections in the U.S. This includes North and South Carolina, Georgia, Florida, Virginia, and Florida. It means the electoral map may have changed by 2016 and 2020, as the less educated voters in rural areas are balanced by a growing minority and white collar vote in the suburbs and major cities of the South.

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Automakers will have to ensure that 40 to 45% of a car's content is made by workers in the U.S. earning at least $16 per hour. If this is not met automakers pay a 2.5% tariff for cars brought in from Mexico. Mexico makes 2.3 million cars and Canada 1.8 million. Automakers invested tens of billions of dollars in Mexico turning it into a lower cost export hub. This has led to job loss in the U.S. Mr. Trump's efforts in the new trade deal with Mexico are designed to increase investment in the U.S. auto industry.

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Leonhardt points out in the NYT that Hillary Clinton actually won in the popular vote by a substantial margin, by more than 2 million votes and more than 1.5 percentage points. He says that Democrats need to pay more attention to the working class in midwestern states- the job losses, crumbling infrastructure, and the plight of communities such as Detroit, Michigan which suffered through the bankruptcies of Chrysler and GM, and again with the foreclosure crisis, the financial crisis of the City of Detroit. With a similar situation in the neighboring states of Wisconsin and Ohio, in places like Toledo and other parts of communities facing industrial decline. While the Silicon Valley centred region powered the economy in California, and the financial industry and real estate powered New York, older midwestern communities never really recovered from a long decline stretching over 2 decades. The result was the loss of faith in Democrats among union workers and young people, leading to the loss of Wisconsin, Ohio and Michigan. For most of its history the Democratic Party was based on its union and working class base including a large number of white voters. Only under Obama because of his unique candidacy was the coalition so dependent on the minorities vote. Before minorities were part of the Democratic coalition, but not in the way under the Obama candidacy. A return to its historic and normal base among whites in unions and working class communities, liberals, minorities, is a way to go back to the historic and natural base of Democratic support. In a sense dependence on tech communities for election funding and the tech booms, globalization, may have distorted Democrats sense of their historic role as champions of the working class and middle class communities throughout the country. There is now an opportunity to restore this lost mission of protecting the interests of the middle and working class who have seen huge drop in net worth as reported by Janet Yellen of the Federal Reserve at the Inequality Conference on October 17, 2014-"62 million households with a net worth of $11,000 for the year 2013." Poorly covered in the media and not made the utmost priority by Democrats (or Republicans). In the words of Janet Yellen, this was in the past several decades "the most sustained rise in inequality since the 19th century after more than 40 years of narrowing inequality since the Great Depression." She added the shocking words "by some estimates, income and wealth inequality near their highest levels in the past hundred years, and probably much higher than much of American history before then." Even discussion in the media goes back to the Obama coalition and treats it as a way forward for Democrats, when history shows it was different and the situation described by Yellen calls for a serious response. ...

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The 25% auto imports tariff goes into effect April 2nd 2025. How much will it increase prices in the US for automobiles? The average is about 10%, say some experts cited in WSJ. This includes price increases on higher priced brands such as German brands BMW's and Audis, Mercedes Benz, and VW cars made in Mexico to ship into the US. It also includes European car makers including Stellantis that make cars in Europe and Mexico to ship into the US which could lose market share to American car makers who make most of their cars in the US. Ford makes 80%, GM 60%.  Overall US international Trade Commission in 2024 looked at the 25% US tariff in a study and showed 5% increase in auto prices in the US. President Trump's call to GM and Ford asking for restraint in pricing may be coupled with the government returning some of the money in tariffs revenue pool to American or foreign manufacturers investing more to make more cars in the US including to Hyundai which announced a $21 billion investment. More such investment decisions are expected from Japanese automakers. For example Subaru has capacity for 450,000 cars in Lafayette Indiana plant and sells 650,000 cars in the US. One would expect it to increase the capacity of the plant or add a new plant in the US. The Japanese government and Japanese business will have additional incentives to invest in the US because of the US support for Japan in the Asia-Pacific, US openness to give trade benefits to Japan in the post war period, incentive to make the Republican DJT plan for tariffs to work as a united Japan-US effort. This would include restraint on pricing.  Toyota is in much better financial shape than VW and has a large market share in the US which it will work protect with pricing restraint and more US investment. Only VW and German luxury car makers BMW, Mercedes may not cooperate. Yet VW sells only 300,000 cars in the US compared to 2.3 million for Toyota. BMW and Mercedes sell luxury cars where buyers could absorb the additional luxury brand cost without impacting inflation overall. Some of VW's car sales would be absorbed by American and other automakers considering VW was losing market share and nearly exiting the US market. before this. ...

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The Trump administration sends an official notice to Congress that it intends to renegotiate the NAFTA treaty with Mexico and Canada. The new U.S. Trade Representative Mr. Lighthizer served as Deputy Trade Representative under president Reagan in 1983. He says the focus of the negotiation will to promote economic growth and jobs by making improvements to the treaty. The notice does not mention major modifications of the type that were hinted at by president Trump earlier. The leaders of Canada and Mexico had asked president Trump to renegotiate. Republicans in Congress and business in the U.S. favor improvements instead of the drastic changes. Mr. Lighthizer's approach is stated in his letter that said "NAFTA was negotiated 25 years ago, and while our economy and business has changed considerably in that period, NAFTA has not." New provisions will be needed said Lighthizer for intellectual property rights, state owned enterprises, labor and environmental areas, with effective enforcement.  Because of the rhetoric and language used in the election campaign, it is important to note that Lighthizer has in the past negotiated favorable terms for the U.S. steel industry to prevent dumping from overseas. His style is the opposite of the president. He has stated- "I am friendly when negotiating. I am not theatrical. The art of persuasion is knowing where the leverage is." ...

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After many banks and financial companies did not admit wrongdoing in the last two decades even after huge losses to families and working class communities from financial activities, the SEC may finally be asking the right questions after president Biden's democracy summit. Democracy can be damaged as much from inside by impunity for wrongdoing as it is from outside by failed states and authoritarian states. President Biden's initiative in getting together countries was to think of new initiatives as the lessons for democracy have to be relearned by every new generation anew.  The appointment of Mr. Gurbir Grewal can only be seen in this light as Mr. Biden's initiative for democratic processes that work for families and American workers. Gurbir Grewal who takes the top job of making the correction America needs is straightforward about malefactors in finance and banking- "We can't arrest them. We can get them out of the industry." Gurbir Grewal is the the new director of the SEC's enforcement program after serving in difficult jobs in New Jersey and NY state, first as prosecutor and then as Attorney General of New Jersey.  Democracy can be shattered as much by hate crimes as by financial crimes. Either way families and working class families in the US are affected, as are minorities and the less well off sections of the community affecting the credibility of the commitment of the well off to honest governance and to fairness. This credibility was severely damaged in the 2009 financial crisis and the situation continues to this day. To understand first hand by being in the shoes of families and workers, minorities and the less well off, gives Gurbir Grewal the courage to take on this job. He told the New York City Bar Association that Americans have grown cynical about how business and government agencies interact- "the perception that we, the regulators, are failing to hold them appropriately accountable, or worse still, the belief by some that there are two sets of rules."  Mr. Biden can see that if anything can make democratic processes lose even more credibility with the people is when new administrations fail to act. Mr. Obama and particularly Mr. Trump raised the issue of revolving door between government agencies and the finance industries, more recently Tech, yet strong action on wrongdoing was missing leading to a loss of faith in democratic processes working for families and workers in the US. The result is weakening the fabric of society from within just as mounting national security challenges grow for the US from outside in in its industrial competitiveness, and its technological leadership, something that affects all Americans and America's allies overseas in Asia, Africa and Latin America.   ...