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A poll by Reuters and the University of Michigan in mid 2012 shows U.S. voters by a large margin of about 10% feel they are worse off in 2012 than they were in 2008. The situation in working class towns such as Allentown, Pennsylvania, is likely to be critical for the outcome of the U.S. presidential election of 2012.

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How Hiroshi Harunari is changing the way Mitsubishi is doing business. He personally answers emails from employees and dealers from 7 to 9 am every day to know what frustrated employees and dealers are thinking and have to deal with. He flies into Dallas and personally drives an Outlander to dealers in Dallas, San Antonio, Austin and other cities to talk to them and listen to what they are struggling with and what their customers are telling them. In 2 months in early 2006 his first 2 months on the job, Hiroshi visited 139 Mitsubishi dealerships in 29 states. He has launched a dealer co-op program to help dealers with advertising (as dealers had suggested) and Mitsubishi uses an upbeat advertising slogan " the next 25 years begin today" suggesting a completely new way of doing things. Hiroshi came from the Mitsubishi Group which financed struggling Mitsubishi Motors with $3 billion infusion after Daimler Chrysler pulled out in 1995. As part of the new plan for Mitsubishi it decided to get out of the old situation where younger drivers with bad credit had been targeted resulting in bad consumer loan losses. It now targeted more financially able customers with the Lancer sedan. It had Merrill Lynch do the financing of customer loans. For the year ending March 31, 2007 Misubishi sold 124,000 cars up 8% over the previous year with sales at dealerships increasing 24%, reversing a 4 year decline in sales, and pulling Mitsubishi USA to a $5 million profit. In 2005 Mitsubishi had lost nearly $2 billion so its quite a reversal. Hiroshi says he had to show that he was ready to pick up the chestnut from the flames, that he had the courage and energy to go out and listen to hundreds of dealers and customers and employees in 29 states in the USA and act immediately to satisfy their concerns. ...

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China is implementing president Xi Jinping's policy to reduce foreign influence in China's internet, and promote local tech suppliers. Restrictive policies went into effect for IBM, Cisco, Microsoft, Qualcomm, to reduce their influence in China's core tech industries. Apple remained an exception till April 2016 when Apple was asked to shut down Apple iBooks and iTunes services in China. China sees this as an effort to promote in Jinping's words local "high quality content with positive voices for a healthy, positive culture that is a force for good.," according to Xinhua news service. It also increases the role of Huawei, Alibaba, and Tencent in the internet in China.

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Alan Meltzer is a respected voice on US Federal Reserve policies since the time Paul Volcker was Fed chairman He says the Bernanke Fed is making some serious policy mistakes. The first is concentrating on near term events, such as business response to Obama administration policies, over which it has little influence, while neglecting the long term consequences of its policies. The second is its effort to tackle unemployment by interpreting its mandate as a dual mandate of tackling both unemployment and inflation. By tackling one at a time, he says, the Fed is likely to fail totally. The US is unlikely to not feel the inflation that is going on around the world. By ignoring the changes in money supply growth the Fed is making another mistake. His advice is for the Fed to increase interest rates it controls to 1%, to signal that it is aware of inflation risks. Second, the Fed should annonce a specific, detailed plan explaining how it will reduce $900 billon of the $1 trillion banks continue to hold in excess of the legally required reserves. Third, the Fed should end QE II, the most recent round of treasury bond purchases. Meltzer says if the Fed waited for two more months in Nov 2010, it would have found that a double dip recession was not about to occcur and it could have held off from pursuing QE II. Meltzer emphasizes that slow growth and unemployment is not a monetary problem, because of the ample liquidity already in the financial system. Uncertainty about government policy and the future direction has been clarified by the election which will help put the economy back on track. Philadelphia Fed chairman expresses similiar views in other articles and an interview with O'Grady of WSJ....

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Fred Brooks, IBM executive who led the development team for the IBM System/360 mainframe, is the author of Design of Design and of an earlier book Mythical Man-Month that sold 500,000 copies. His unique insights into completing large development projects have helped many tech companies. Brook's law from Mythical Man-Month is that it is futile to simply add engineers to projects in the hope of getting things done faster, as there are a lot of other factors to consider. This is stated by programmers as: "Adding manpower to a project only makes it later." The original design team has to bring newcomers up to speed, and the added distraction is one of the many factors that slow down the project. Brooks offers many new insights in the book Design for Design. One is that constraints are friends which help shrink the designer's search space. Another is that Design is a lot more about art as it is about science. Simply improving the process does not get you great design, it gets you from bad to average....

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Mohamed El-Erian, CEO of PIMCO, on the European crisis. Things he says to watch, whether the Greece problem is treated for what it is, which is a solvency not a liquidity problem. The current solution he says relies too much on fiscal cuts which can end up worsening the recession, and keeps Greece under a cloud that will further reduce new investment and lead to drops in GDP, and the increase in the debt-to-GDP ratio for Greece is likely. He calls defending Greece's high debt not something that can be defended with the actions taken to date. Other things to watch are whether ways can be found to limit the damage for European growth and the world economy, and whether serious steps can be taken to limit market swings that are a result of investors again overleveraging themselves. See other expert opinions Shiller, Grantham, Roubini. As in earlier comments he sees slower growth ahead.

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Simms looks at the Plaza Accord of 1985 and the 60% appreciation of the yen, the lowering of interest rates and the real estate bubble that followed, and what this tells China's economic planners about managing the renminbi. A academic member of the People's Bank of China, Yu Yongding, sees one of the lessons as how Japan mismanaged the aftermath and creation of the asset bubble. There may be different complexities in China's situation with the increase in local government debt and loans in the shadow banking system, so that China cannot become complacent.

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The limited options the US has to get China to appreciate the value of its currency, the yuan. Some of the options depend on getting the IMF or the WTO to prod the Chinese, others depend on a Plaza type Accord.

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Taylor on the Bernanke Federal Reserve's quandary over its exit strategy from a loose monetary policy. He points to the consensus among leading economists, Rajan, Meltzer, Feldstein, who share his view that the costs of a loose monetary policy outweigh its benefits, that the Fed's policies are not working, and the need for a more rules based monetary policy.

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Italy's bond auction of three year debt showed lower borrowing costs and strong demand from domestic investors, even as Moody's downgraded Italy by two notches on July 12, 2012. Italy's Treasury sold 3.5 billion euros of July 2015 BTP, having 6.06 billion euros worth of bids. The interest rate of 4.65% was below the 5.3% paid in mid June. Interest rates were overall slightly higher on 1.75 billion euros of longer dated benchmark bonds. Barclay's described the Moody's move as "somewhat perplexing," conisdering the steps taken at the June 2012 summit of EU leaders, at least moving in the right direction. Italy's Treasury cancelled the Aug. 14 BTP auction, because of improvements in the budget situation.

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Germany's Economy minister Zypries warned that Germany would take legal action by taking the case to the World Trade Organization if president Trump imposes tariffs above that allowed by WTO rules. She said this before a meeting at the White House between president Trump and Chancellor Merkel. The U.S. is Germany's largest export market with 107 billion in imports and the U.S. exports 58 billion euros of products to the U.S. Zypries accepted that the large trade surplus of Germany was "a problem," but that America "needs our machines and industrial plants" for the time being. Germany has insisted that it does not provide unfair advantages to its companies, and that German companies were simply more competitive. Trump has focussed largely on China for anti-competitive practices, though he mentioned BMW by name during the campaign. In the last 2 years the euro has depreciated significantly against the dollar giving German companies competitive advantage, largely as a result of the ECB- in opposition to German economic policy- trying to stimulate the economy of other southern eurozone countries such as Spain, Italy and France. ...

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In 2015 the new government of Antonio Costa took a U turn from austerity policies followed in return for a bailout from the European Union. This has helped Portugal achieve the highest growth in a decade coming back from a severe slump. Unemployment is cut in half with growth in the tourist industry, and investment in agriculture, construction, aerospace.  Traditional industries such as paper mills and textiles have invested in new technology resulting in a boom in exports. German companies Bosch, Mercedes Benz, and others have also invested in the country. Portugal has a good relationship with Germany and the European Union which has also helped attract foreign investment. Prime minister Antonio Costa says "too much austerity deepens a recession and leads to a vicious circle." Antonio Costa came to power in 2015 on promises to reverse cuts in income made by the previous government to reduce the deficit in exchange for a 78 billion euro international bailout. The government backed by left parties left out of government since 1974 with the collapse of the dictatorship, was able to increase public sector salaries, the minimum wage and pensions, over objections of the IMF and the German government. Incentives were given to small business in the form of tax incentives, development subsidies and funding. Budget balancing was achieved by cutting expenditure on infrastructure and other spending, cutting the budget deficit from 4.4% when Costa took office to 1%. A surplus is planned for 2020, ending a quarter century of budget deficits. ...

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Peter Coy of Bloomberg Business Week points out that the debt ceiling and proposed deficit reductions in the range of $4 trillion really obscure the real size of the problem which is much larger. The real problems hit when the U.S. faces a larger graying population by 2020 with sharply higher per capita health care spending; and at the same time workers from this generation retire and become beneficiaries of Social Security and Medicare with fewer younger workers to support the system with tax revenues. Another problem is that older Americans are likely as a voting bloc to vote themselves benefits that will cost the younger generation, benefits that the younger generation will not be able to enjoy. Even the Paul Ryan plan with its cuts to Medicare insulated todays seniors from the sharp cuts, as it becomes political necessity for both Republicans and Democrats to shy away from touching the current beneficiaries.