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Wessel describes the changes in American manufacturing as it goes through some of the same changes that happened in Germany in the years after reunification. With high unemployment German manufacturing companies worked with unions and the government for wage restraint over the last decade, resulting in wages barely keeping up with inflation. The increase in productivity and wage restraint helped Germany become more competitive with factories in Asia and Eastern Europe. Wages are now increasing with larger wage increase negotiated by the unions in Germany, as skilled labor is becoming scarce. In the U.S. Labor Department figures show an increase in output per hour in American manufacturing of 13% in the last 5 years and 21% in the five years before that. Typical of the wage changes in manufacturing- American Axle & Manufacturing plant in Three Rivers, Michigan hires assembly workers at $10 per hour, with older "legacy workers" making $18 per hour. General Electric brought back manufacturing work from Mexico paying workers $13 per hour for new hires, compared to to $21- $23 in prior years. At GM, Ford and Chrysler workers make $16-$19 per hour in base pay compared to older workers with legacy rates of $29-$33. The Bureau of Labor Statistics shows earnings for production workers in manufacturing averaging $19.15 per hour in April, which is where they were in 2000 adjusted for inflation. The impact of this large increase in productivity with new machinery and production methods, and the wage reductions in manufacturing, is a return of offshored jobs. Wages increased in China and Mexico in the last decade. After a 35% decrease in the number of manufacturing jobs in the U.S. from 1998-2010, the number of jobs has increased by 4.3% to 11.9 million in April 2012, according to the Labor Department....

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Reps. Eric Cantor (Va.), Kevin McCarthy (Calif.) and Paul Ryan (Wis.) have jointly written a book "Young Guns," that completely distances the new leadership in the Republican party from the leaders of a prior generation. The book says the older Republican leadership "betrayed its principles," by not controlling spending. See the the link to David Stockman who has criticized previous Republican administrations for their attitude to spending, including President Reagan. A recent NBC/WSJ poll shows only 24% of those polled seeing the Republican party positively. The idea is to differentiate the younger leaders as new voices in the party, different from the party's previous role.

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Bernard Lewis's "The Arabs in History," is a short book which confirms Zakaria's point about the openness of Islamic societies before the 19th century, with some exceptions in certain periods. Most books or a quick look at Wikipedia shows us that the Renaissance in Europe in the 15th century got its boost from books by ancient Greek authors that were available in Arab societies long after they were forgotten in Europe. His point about Indonesia and India is also true to a large extent except for periods such as the one under Aurangzeb (17th c.). Muslim societies in British India (todays Pakistan and Bangladesh) experienced less social and educational reforms under the British than Hindu societies for various reasons leading to larger backwardness, illiteracy which breed extremist ideas. This is likely to change throughout North African Arab societies and South Asia in the next 50 years, especially with the modernization drive underway in India, which is likely to spread to other parts of the region. Islam as a missionary religion with force of arms spread in the 7th-9th century rapidly over Arab North Africa and parts of west Asia, and later to South Asia. Once established there were long periods of openness to ideas and books, and different cultures ( with the exception of preferences for Muslims), and a stress on commerce which inherently reduces religious vehemence, as the example of Britain shows. For this reason the current conditions in Islamic societies is more atypical than typical. A factor that has worsened it is that 19th c.-20th c. Islamic societies have put less emphasis on commerce and industry than historically seen in prosperous Islamic societies, on which more research is needed to understand why. Another factor is the impact of the interface with technologically and scientifically progressing Europe and America not becoming a learning experience for acquisition of this science and technology and making it one's own, a pattern seen in Buddhist societies of Japan in 19th c., South Korea in 20thc.,and China 21st c. Because Buddhism sprang from Hinduism or a response to Hindu ideas in India, India could be put alongside China for the 21st c. rapid assimilation of western science and technology making it one's own. When there is a violent collison between Japan and U.S. Admiral Dewey's ships, or China and British advances around 1900, the initial reaction of rejection is reversed with adoption of western technology and practices making it one's own. Similiar response in India. Islamic societies have had an extended period of rejection for reasons not fully understood even today. This is likely to generate the kind of internal debate about how to revert back to the usual mode of adoption in Islamic civilization, with the potential catalyst in India and other locations in the Middle East. The most respected German of the 19th century is Alexander Von Humboldt, a naturalist who advanced scientific knowledge, and a mentor to Charles Darwin in England, author of "Origin of the Species." Humboldt says- "There are no inferior races, we are all humans, and we are all destined to reach for and grasp liberty." That Humboldt spent most of his best years in Paris, France, which he compared to the provincialism in his native Berlin, goes to show how Humboldt, Darwin and Humboldt's friend Aime Bonpland of France, maintained close cooperation and friendship and anticipated the close cooperation in Europe since the second half of the 20th c., long before European politicians and governments grasped this. Commerce, science, travel, media and free exchange of ideas, are as favorable to progress as politics and ideology is inimical to it....

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Wall Street Journal analysis shows top earners at 38 U.S. banks and securities firms will get $145 billion in 2009, an 18% increase over 2008. This even after increasing public anger about exceedingly high levels of executive compensation with no relation to performance, and at a time of high unemployment.

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

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President Obama's proposed legislation for the fight against Islamic State proposes a three year effort with use of Special Commandos, but no major ground combat effort. It also rescinds a broad Bush era 2002 legislation for the Iraq war, but leaves in place 2001 legislation for the war against al-Qaeda and affiliates.

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Problems this time as during the last ten years South Korean took oh a lot of consumer debts to increase consumption. During the last slowdown in the 1990's consumers were encouraged to take on more debt and this fueled growth. But this time the government expects private consumption to grow only 1% next year. South Korean household debt went up by 10.7% in the third quarter over last year, according to the Bank of Korea, and total debt per household has reached a high of 40 million won or $29,000 per household.

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Proposed ideas being considered at the EU headquarters in Brussels include the European bailout fund, the European Financial Stability Facility (EFSF), being made a bank with funding from the European Central Bank. The EFSF would be able to buy the bonds of Spain and Italy in primary and secondary markets alongside private buyers. As an alternative the ECB would be able to buy Spanish and Italian bonds directly. Here the problem is keeping private investors in the market given the large financial needs of Spain and Italy. In the restructuring of Greece's government bonds the ECB took the position that it would subordinate the claims of private investors in Greece's government bonds and not take loss. Concerns of private investors could be addressed by the eurozone governments giving an explicit indemnity to the ECB to cover any losses suffered in the purchase of Spanish and Italian bonds. Both steps, the direct purchase of Spain's and Italy's bonds by the ECB or through the EFSF would mean doing something that is not in the ECB's charter- the financing of government debt- and would be done cautiously and only in a crisis situation. The caution would also be motivated by the need to ensure there is action to improve the competitiveness of Spain, Italy and other eurozone countries through specific measures, and no backtracking bygovernments....

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This report says fewer jobs alone is not going to reduce inflation, US inflation is propelled by factors beyond economic theory. The Phillip's Curve is a inverse relationship between unemployment and inflation that was a convenient tool for the 1960's to get the economy to do well with low unemployment at 4% with moderate inflation. It was torn apart by high inflationary expectations in the 70's. In today's world Robert Gordon of Northwestern University suggests central banks consider inflationary embedded expectations, supply shocks and cost push as in the pandemic 2021-2022, and demand changes. The job that Mr. Powell at the Fed has is lowering inflationary expectations by reducing private sector investment and job creation by raising the cost of capital through interest rate increases. Yet today the government is a huge partner in capital investment for America in clean energy and infrastructure building which means job creation remains strong as it has in America. President Biden's effort to reduce pharmaceutical costs and for inflation reduction by fighting price increases through stealth fees, has at the same time cut into inflation. So as lower demand and increased supply in 2022 as the government better manages the supplies of energy, including release of oil stocks from the national reserves. Explained- The Phillips curve is an inverse relationship between unemployment and inflation observed by a New Zealand economist William Phillips in a paper in 1958 based on British unemployment and inflation data1861-1957. Economist Robert Samuelson turned it into a textbook concept as a simple tradeoff in 1960 more inflation gets you less unemployment- which fit the period of the 60's- but warned that it could change over time. Milton Friedman and others during the 1970's period of high inflationary expectations setting rejected it. In reality Mr. Phillips never meant for economists like Samuelson to generalize from his statistical observation of data on the British economy before 1958 and apply it to the US for the closing decades of the 20th much less the 21st century. ...

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A decision by management of the Ginori porcelain tableware company near Florence, Italy, to compete at the low end leads to its bankruptcy. Ginori was considered a prestigious maker of porcelain tableware since 1735, and hired top designers. The decline in formal dining led to a decline in demand. The decision to move to the low end is considered by workers to have been a mistake as low end Chinese imports have dominated the market in Italy. The difficulty of competing at the low end and the need to come up with a product and technological advantage that commands a higher price is a challenge facing Italy's manufacturing industry.

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Spanish banks agreed to reforms and job cuts as a condition for a 37 billion euro loan from the eurozone bailout fund, the European Stability Mechanism. The restructuring plan applies to Bankia, Novagalicia Banco, Catalunya Banc and Banco de Valencia, with the largest job cuts at Bankia bank. Bankia will have 6000 job cuts, 28% of the total employees, and cut branches by 39%. Banco de Valencia will be absorbed into Caixabank and receive 4.5 billion euros of the loan payment approved.

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Dana Milbank of the WP says the views of some Democrats on Trump as a good Republican nominee based on the notion that he has high negative perception with voters is fraught with dangers for U.S. democracy. Milbank points out that this ignores what is good for the country. Having Trump as the nominee of one of the two main parties would create a divisive atmosphere and is not good for the country, says Milbank. In comparing Trump with Cruz, he says Trump is likely to follow his instincts to operate outside the U.S. constitutional system. Cruz as a person believes in the U.S. constitution and would never endorse violence or action against minorities. Cruz has not done enough to come across as a likable person with his persistent focus on conservative or Reagan values to the exclusion of everything else. This is changing in mid-April 2016 following a CNN interview with the Cruz family, a MSNBC town hall answering questions from undecided voters, and NYT coverage of Cruz at a Brooklyn bakery, that shows a different human face that people have never seen about Cruz. Cruz's self-deprecating humor in a NYT article where he talks about voters not liking "a hectoring scold," is part of this needed change that could have happened earlier in the campaign. About Trump Milbank cites Conservative party prime minister Cameron who says Trump would unite all Britons against him if he ever came to Britain....

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The direction Germany is moving is now clear. The Greens polling as the second largest party in Germany have a good chance of forming the next government in a coalition with one of the other parties the CDU or the SPD. Policy will shift to invest in the environment, health, education, social care, digitization as the Greens will have a leadership role. This was neglected in the Merkel years with the financial crisis in the eurozone limiting investment and only shifting public perceptions with the pandemic. Annalena Baerbock, MP from the eastern city of Potsdam, is elected as the new leader of the Greens party. She could be the next chancellor to succeed Merkel in elections on September 21, 2021. Baerbock and co-leader Robert Habeck 51, are together the leaders in the Green party going into this election. Baerbock has a masters degree in International law from the London School of Economics. She is respected by German business leaders and chancellor Merkel. By contrast the CDU/CSU is divided today with no clear direction for the future. The SPD, the party of Willy Brandt, still comes in third with only about  fifth of the voters favoring it. Years of neglect of its working class base during the Schroeder administration has led to the SPD playing a less significant role. This leaves the Greens in a favorable position with climate change becoming a major issue in Germany and the shift to renewable energy underway. Neglect of digitization, education, healthcare and social care under Merkel now offer German voters an opportunity to vote in a government that cares about this. ...

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The US Federal Trade Commission is changing its focus after two decades of letting monopolies grow in many industries. It is now headed by Lina Khan, a 32 year of student of anti-trust and its role in US history to preserve the negotiating power of individuals and groups with large corporations. For decades since the breakup of large companies including oil and energy by Theodore Roosevelt at the start of the 20th century, anti-trust has followed a clear road that said large companies could not monopolize business in industries. This only changed with Reagan in the 1970's leading to the situation today where large corporations are seen as insensitive to what the public wants and what is good for the country. Apple can do most of its manufacturing overseas when communities in America have lost factory jobs for 20 years. IT companies can pay little in taxes by offshoring manufacturing and headquarters to places outside the US. The models simply don't work because they are outdated from a different time. Not just pricing but negotiating power has to be considered. Taxes to fund infrastructure are part of the overall goal that society needs to pursue. In this situation anti-trust is to be redefined in a much broader context. Does it regulate the structures of business in a way that does not affect the national interest to be competitive in technology, independent in supply channels, to keep manufacturing jobs, build infrastructure, improve public services. Antitrust, taxation, administration, all have to work together to achieve an overall goal of improving the living conditions of the people. ...

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There are 5000 heavy truck charging stations in the US, mostly in depots and warehouses. And just five, only five public charging stations for heavy trucks. Imagine taking billions of tons of emissions from the heaviest polluters heavy trucks when very few only 2% of electric heavy trucks are sold today. New emissions rules that restrict the amount of emissons in a truck manufacturers product line would mean that 25% of heavy trucks and 40% of medium trucks will be electric by 2032. This includes school buses to cement mixers, and includes 100 types of heavy vehicles that cover tractor trailers, RV's, ambulances, garbage trucks and moving vans. The infrastructure law and the Inflation Reduction Act provide government aid- $7.6 billion electric charging infrastructure including heavy trucks, and $5.6 billion for zero or low emission buses. Another $1 billion for electric trucks and $40,000 as tax credit for companies buying electric trucks. For cars the new EPA rules from the Biden administration target an all electric or hybrid car population in the US by 2032.  This will be done by focussing on the two thirds of heavy trucks that go for less than 250 miles a day and trucks like moving vans, school buses and garbage trucks that drive less and go back to the same depot point to recharge. Volvo Trucks, Kenworth, BYD and Nikola, and Cummins engine are manufacturers who are working on new technologies and manufacturing. The bIden administration has changed the curve to make most of the gains to be done after 2030, in 3 years 203-2032 to achieve goals.  ...

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Jon Hilsenrath of WSJ provides an illuminating account of how Daniel Tarullo as head of the Large Institution Supervision Coordination Committee has changed the way bank supervision and rules are set for U.S. banks since the days of the 2008 financial crisis. Tarullo started the effort under Ben Bernanke and continues this in 2014-2015 under Fed chairwoman Janet Yellen. The New York Fed is seen as ineffective in bank supervision and the supervisory role is now entirely performed under the leadership of Tarullo, assisted by Kenneth Gibson and Timothy Clark. The trio are some of the great unsung heroes of the effort to put the U.S. financial system and the economy on a safer footing.