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American manufacturers are importing more of the parts that go into each product. According to Susan Houseman, a senior economist at the W.E. Upjohn Institute in Kalamazoo, Michigan, the imported portion for these parts is up to 25% from 17%. Even the Bureau of Economic Analysis figure of the share of GDP coming from manufacturing is overstated, says Houseman. That figure was 11.2% for 2009, but is closer to 10.5% if all the imported components are included instead of being counted as domestically made. This is down from 14.2% ten years ago, and about 30% in the 1950's. There is deep concern that the manufacturing decline has weakened America. Houseman says that one cannot separate manufacturing from innovation, and she asks if America can continue to be strong in R&D with a shrunken manufacturing base. James Jordan of the Interstate Maglev project, says Maglev- which uses special magnets to levitate and propel high-speed trains- was invented in the United States. Today equipment for that technology is manufactured and used in Japan, and innovation in high speed trains is taking place in Japan and Germany. The decline in manufacturing is shockingly large. From 1979 employment in manufacturing went down by 8.1 million to 11.6 million, with the largest drop occurring in the last ten years. With it America is losing something significant- all the knowhow and skills that go into making things. Today the airplane wings for several Boeing airliners are made in Japan and shipped here. In a not too distant past these wings would have been built here, and workers with the knowhow and skills for these critical components were part of Boeing's workforce....

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Saudi global forum on oil price issues meets even as differnces emerge inside OPEC with Algeria, Iran and Venezuela opposed to increasing oil supplies and to a unilateral decision by the Saudis to increase production. After the Bush visit the Saudis increased production by 300,000 barrels a day or 3% to 9.45 million barrels a day. The bulk of the unused production capacity of 2 million barrels a day in OPEC is with the Saudis. The Algerians and the Saudis blame the price increases on futures speculation, lack of refining capacity to produce gasoline in the western countries, and geopolitical tension. For the Saudis and the Kuwaitis there is also resentment that they are asked to use their declining oil supplies while the USA is not allowing offshore drilling and drilling inside its borders to the extent that it could. Note that the ordinary Saudis lower and middle classes are not seeing much change in their lives as inflation is high, and the prices of food and other needs is reducing their purchasing power. Much of the oil price windfall is going into large projects to build aluminium and other plants, and to build new cities in the desert for a growing population, which effectively rechannels the money back to western countries who are actively involved in these projects. The projects themselves may produce value but it is still an open question whether this is the best way to invest this money. And the other serious question is whether this will come at the expense of future oil earnings as the world reduces its dependence on oil. The money is also spread very disparately across the Middle East, with neighboring countries like Yemen in southern Arabia without oil revenues suffering serious lack of development. The political structures like Saudi Arabia created after the first world war by western powers, itself may impede a proper distribution of commodity resource revenues across the region....

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Core consumer price index was up 1.3% in December 2013 from the prior year, according to government information. For 2013 the index was up 0.4%, the first increase in 5 years. The Bank of Japan's target is 2% inflation. The ratio of available jobs to applicants increased to 1.03 showing 103 jobs for every 100 job seekers- the first surplus of available jobs since 2007. The jobless rate declined to 3.7% in Dec. 2013, down from 4% in Nov. 2013. A planned sales tax increase to 8% from 5% to tackle the high government debt level goes into effect in April 2014, which is expected to reduce consumer spending.

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Fletcher cites statistics from the federal Bureau of Labor Statistics showing that between December 2007 and June 2010, private sector employment in Texas went down by 0.6%. During that period public sector jobs increased by 6.4%. Government employees make up about 17% of the workforce in Texas. The Texas economy gets a large amount of federal money because of military installations and NASA- $227 billion in 2009, according to the Census Bureau. By comparison California received $346 billon in 2009. During the recession period after the global financial crisis of 2008, Texas received $25 billion in stimulus money. Richard Fisher of the Dallas Federal Reserve Bank acknowleges the federal money going into Texas, yet he points out the driving force in the economy of Texas is still the private sector. For the private sector there are several advantages to being in Texas. There are lower taxes- no state income tax and lower business taxes. The large supply of land for development and few land-use restrictions make development easier. Corporate efficiency was a key advantage cited by Fluor when it moved from Orange County, California to Texas. A growing energy sector has helped, along with the growing trade with Mexico. The housing regulations in the state have acted as a check on housing prices, and left Texas with less of the detrimental effects of the housing mortgage crisis than the rest of the nation, especially California and Florida. The governor of Texas, Rick Perry, says he is not against all regulation, and the kind of housing regulation in Texas certainly has played a good role for Texas. Perry's tort reforms have reduced the legal burden on business prevalent in the rest of the U.S....

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Zombrun describes the effect of low interest rates on savings for the bottom half of households in the U.S., the pressure to invest in stocks without the skills and experience of the better educated part of households in the top 20% of households by wealth and income. This resulted in a negative effect, a depletion of savings compared to an increase under a higher interest rates scenario with less pressure to take risks in a volatile stock market. This is the direct cost of the crises in stock and financial markets of 2000 caused by a internet bubble, and the larger crisis of 2008-2009 caused by the bubble in mortgages and housing. The secondary effects of the mortgage price bubble and faulty mortgage securities was in the millions of homeowners who went into foreclosure in 2009-2013, which further depleted wealth and savings of households in the bottom half lacking the experience and skills to navigate this type of housing market. The failure of the Obama administration to stem the foreclosures with practical steps which would have helped not hurt the banking sector, as suggested by FDIC's Sheila Bair and Harvard economist Martin Feldstein in many WSJ op-eds in 2010-2012, added to the erosion of savings and wealth of the bottom half. Minorities in particular were hit hard. A third effect is of communities across America that are feeling the effects of job migration to emerging markets such as China that has been underway as part of the globalization of the last three decades. A fourth effect in the rising cost of education, particularly since 2000, has reduced the opportunities for struggling working class people to enter the middle class and enjoy the higher incomes in precisely the very period when the divergence of incomes between less educated, less killed people and the more educated and better skilled people was taking place. The last two effects were neutral as part of the overall process of emergence of a globalized economy with a premium on more skills and education, requiring action by the government, universities and business for a concerted effort to mitigate in some places the negative effects and enhance in other places the positive effects. The first two effects were man made crises which required managing in constructive and positive ways for the entire American people, taking risks where necessary such as fears about the financial system if foreclosures did not go through. The risks of a long period of extremely low interest rates for savers and the middle as well as working class were poorly understood by the Fed since 2000. A similiar crisis is being faced in Europe with extremely low interest rates. Janet Yellen was only doing the honest thing by acknowledging how far and how different the situation is now compared to the period of three decades following 1945- a question not just of values cherished in America, also of the need for societies to advance through creation of wealth across all sectors of society or regress, as described by Smith in the Wealth of Nations....

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Ayn Rand's philosophy. She writes in "Capitalism: The Unknown Ideal" - "Economic crises and runaway government power grabs don't just happen by themselves; they are the product of the philosophical ideas prevalent in a society, particularly its dominant moral ideas." Rand says the message in our society is always "selfishness is evil; sacrifice for the needs of others is good." But Rand's message is selfishness rather than being an evil is a virtue." Adam Smith wrote about this but in adifferent way, saying that man looks to people around him and is looking for the respect of his peers, this itself is a needed good, something that men and women need badly, the respect and esteem of their peers. For this reason they temper their selfish actions for the common good, or this motive can be tapped for the common good to emerge from self interested actions. The question and the answer not like Rand's which is categorical, is put by Smith in the context of how a man views his actions, and what is best in his enlightened self interest. The answer depends on the values in a society at a particular time, because if everyone is pursuing this self interest by distorting things so that he can pretend to himself that he is doing something for an enlightened motive when there are the crasses motives behind it, like Mr Mozilo of Countrywide promoting mortgages for the poor and unqualified, and society or his peers don't call him to account, or others of more respectable background like Mr Thain and Mr Rubin and many others do the same in nore fashioable ways, then the whole fabric of society is corroded. When the fabric of society is corroded then it doesn't matter which philosophy is held, Marxist, libertarian, free enterprise, right or left as used up terms, because its moral underpinnings which are the only true support are corroded. This may be the reason Smith wisely talked about this in somewhat moral undertones such as winning the respect of peers in society for what you do, given that society had the moral element built into it its mores, customs and ways. This is the difference between Smith and Rand, and Smith and Marx, and Smith and other philosophies that are categorical and rigid. That Alan Greenspan was a member of the Collective or group that was closely associated with Rand, and with Rand's philosophy, may have put blinkers or concealed things from him, which he might have seen if not biased by such views of categorical and rigid nature about the virtues of laissez fairre capitalism in all situations. Reagan's admiration for Rand also may have created a bias in favor of laissez fairre capitalism, when what was needed was an effort to avoid excesses in the other direction of state involvement, without getting tied down to some rigid philosophy that might seriuously impair one's ability to respond in a very different situation of excess in another direction, of individuals promoting their self interest to the ruin of the economic fabric of American society....

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Apple and protests over working conditions at factories of suppliers like Foxconn which make the iPads and iPhones. Issues related to Apple's large profit margins and the low wages paid to workers at supplier factories in China and other countries.

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Krugman points out that about 13 million Americans without insurance gained health insurance under the Obama plan. He says if it is turned back 8 million whites without a college degree in that 13 million will lose health insurance. Of these eight million about two out of three voted for Trump, so that 5 million Trump supporters could now lose health insurance even though they are older and have more health conditions. Krugman says this aspect of the election campaign was not covered well in the misinformation and social media information of the 2016 campaign, and the lack of media focus on the important issues in the election. On manufacturing jobs he says most of the jobs lost are not returning, and only token jobs such as at a Carrier plant in the news will take their place.

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GE's decision to exit the banking business ends a period of aggressively reducing taxes using GE Capital operations. This ended in disaster in the 2008 global fianncial crisis with GE shares down to $6 and GE needing a government rescue. GE reported in its securities filing that its tax rate of 10.3% in 2014 would have been 17% without the use of GE Capital operations to reduce taxes. Experts say GE's tax rate is lower using GE Capital because of doing business in lower tax jurisdictions overseas and global funding base. In 2013 securities filing cited in the Washington Post show GE taxes were an astonishing 4.2%. GE will repatriate $36 billion in overseas earnings as the first step and pay taxes to the U.S. Treasury of $6 billion.

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NYT's Kristof reflects on the low levels of discourse in public life to which the 2016 U.S. primaries had sunk by March 2016, and the role the media may have accidentally played in this development. This gives the media a lot to reflect on and correct in the coming months.

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Athenahealth, a provider of software for physicians, is intervewed by Jon Kamp about the efforts to promote digitization in physician's offices.

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How to best integrate iPad reading to children with reading paper books to children and libraries is an effort that is still being developed.

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Apple shares are down 25% says this WSJ article and asks the question whether Apple's best days are past. In the fastest growing markets in Asia and Africa, Apple iPhones are beyond the reach of about 95% of the population. The number of Apple iPhones sold in India have dropped 40% in 2018 compared to 2017. Apple's market share in India has fallen from 2% to 1%, according to Canalys research firm. The $1.8 billion in Indian sales is about half of what Apple executives had hoped for when Tim Cook visited India in 2016. Some call it a rout. Tim Cook seldom mentions India now. At the center of this is Apple's reluctance to change its business model of getting the highest margins, making not a range of handsets, but a few models selling at high prices. This is the strategy that Apple has used to revive the company from near bankruptcy in 1997. Competitors including Xiaomi, the Apple for China and India, tweak their phones constantly to address local concerns for battery life, and lower prices to get market penetration. Only 24% of Indians have a smartphone and India is fastest growing market. Friction with the Modi government which cannot be favorable to Apple's plans to push a high  margin product when competitors have similar but better value packages.   In price sensitive markets of Africa and Asia most people buy phones outright and use pay as you go plans, Apple is not popular. Even in China Apple's market share is down from 12.5% in 2015 to 8% in 2017, according to Canalys. Apple is reluctant to make many models offering lower prices and to address concerns such as battery life in India. In India 39 million people will add smartphones in 2018 with 75% costing less than $250, 95% costing less than $500. In Apple's lineup the iPhone 7 costs around $550. Competitors such as Xiaomi, OnePlus, Oppo, and Vivo flooded India with smartphones costing less than $200. Unlike Apple which spurns market research these companies do extensive research work on local situation. OnePlus has focussed on battery life and gained 30% share of the premium segment to Apple's 25%. By making the devices in India these companies avoid having to pay the 20% tariff. Apple has so far not put up a new plant with the restriction that India places of single brand retailers over 51% foreign owned to buy locally 30% of manufacturing materials. The Modi government felt Apple was not focussed enough on bringing high tech jobs to India and helping local manufacturing, a perception not conducive to expansion in India where "Made in India" is the government plan. This means opening Apple stores in India is less likely now.  The turnover of Apple India executives is also increasing with 3 new CEO's 2017- 2019. Apple's strategy of targeting wealthier Indians makes it not even a fringe player in the Indian market down to 1% of the market. Just as it shrinks in the Chinese market where most customers are price sensitive and the economy is slowing.   ...

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Credit default swaps on the $70 billion in CDS on Greece for different parties were activated in March 2012, resulting in payouts of $3.2 billion. This editorial points out that this happened without causing any tremors. Jean Claude Trichet as president of the ECB insisted in 2010-2011 that a default in Greece would result in systemic risks caused by the swaps and derivatives issued and in the contagion effects. The result was a delay in cuttting Greece's debt to sustainable levels with a private bondholder haircut that would have come much earlier. The delay and the burden of correction falling on austerity measures alone means Greece's economy is in much worse shape and debt still is not sustainable with Greece's rapidly declining economy.

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This BBC report of Queen Elizabeth since 1953 when she took on the leadership of an impoverished nation that was no longer an Empire, shows how she has responded to one change after another till the coronavirus. She has appeared almost as a rock of ages for Britain in the midst of upheavals.  Here are some of her own words of these periods of change. "The traditional values etched across our history equip us well for this age of change." On the Commonwealth of Nations an entirely new conception in 1950's. "To that new conception of an equal partnership of nations and races I shall give myself heart and soul every day of my life." Warning of triumphalism after the fall of the Berlin Wall in 1989, aware of the pitfalls of capitalism and socialism now more obvious than ever in 2022- "We, who claim to be of the free world, should examine what we really mean by freedom, and how we can ensure that, once in place, it is there to stay." On other happenings standing back from the fray, trying to filter out the "ephemeral from the enduring." "Distance can lend an extra dimension to judgement, giving it a leavening of moderation and compassion - even of wisdom - that is sometimes lacking in the reactions of those task it is in life to offer instant opinions." For Elizabeth, in the midst of all the changes what truly mattered was "the regular worthy rhythm of life."   ...

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This commentary in the WSJ says it is essential that the U.S. get back manufacturing of all technological goods back to the U.S. or its allies. The dangers of depending on China or other countries not clearly allied with the U.S. is quite clear especially after the pandemic. The U.S. and European supply chains need to be completely remade, restructured, to avoid dependence on China or countries that are not allies. This is what supply chain renewal is about. Yet initiatives alone with hundreds of billions of dollars price tag re not the answer to the problem. What is needed are specific targeted actions such government direct assistance to key sectors to ensure U.S. technological advantages in worldwide competition. Giving a hole range of incentives and direct financial support to industries making everything from electronic and computer components to high tech parts that go to defense and civilian production.   The U.S educational component in this puzzle is university students in all high tech courses which should be kept for U.S. citizens or from key allied nations at American universities. The manufacturing base would mean securing incentives and aid to manufacturing industries, component by component, part by part, to secure American leadership and distinct advantage.  Job losses have to be reversed and industries relocated back to the U.S. And only in cases where it is advantageous to manufacture overseas to relocate in allied countries India, Japan or South Korea. U.S. labor has to be brought into the picture as a key participant in the national interest and given an important role. R& D efforts have to be developed component by component, technological part by part, and technology by technology, so that a systematic plan can be followed to secure American leadership for the rest of this century, is what experts including this one say is required today. ...

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The House of Representatives just passed a bill to stem foreclosures and stabilize house prices by having the government through the Federal Housing Administration reinsure upto $300 billion of problem loans. The bills backers estimate 1.5 million foreclosures could be prevented by this bill but the Congressional Budget Office estimates only about 500,000 foreclosures can be averted this way. Under this bill lenders would have to writedown their loans to 85% of current value of the house. Borrowers pay a fee for the insurance and give up any share in future price appreciation to the government. According to the Congressional Budget Office the cost to the government is modest about $1.7 billion over years. The reason for the limited effectiveness of this bill is that it is voluntary, not much government money is extended. Many of the comments in the blog on this article as is the case with other articles on help to homeowners facing foreclosure show the widespread idea that its a bailout of irresponsible decisions by homeowners and mortgage companies who made the loans. This may be the reason why so little has been done in this regard and the limited government money extended even in plans put forth by Congressional Democrats like Barney Frank. Feldstein who is a former Chairman of the Council of Economic Advisors under Reagan has taken a different approach focussing on homeowners who may see the rational decision is to walk away from homes where they have no equity in their homes as prices drop by 20% and for government to prevent a wave of foreclosures in this manner. The danger is if not much is done there could be a downward spiral in home prices as foreclosure reach a new high in 2009. Last year according to Economist's charts foreclosures were averaging more than 100,000 a month now they are averaging more than 200,000 a month, this would take it from 1.5 million foreclosures in 2007 to 2.5 million in 2008. According to the Economist 9 million people owe more than their house is worth, the homeowners who have negative equity, and if they were to foreclose at the rate of 2-3 million a year and accelerating as the economy deteriorates, this could be enough to start a downward spiral. At that point a new President and Congress would have to take drastic action with a substantial amount of the government's money. In that kind of crisis not much thought would be given to the cost because like the financial meltdown that was feared during the Bear Stearns crisis the fears of a global severe economic crisis would make action necessary on many fronts of which housing would be one....

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A study by Dr. McCormick of the Harvard Medical School and professors at the City University of New York School of Public Health at Hunter College, shows that the anticipated savings from conversion to medical records may not materialize to the extent expected. This study of data from 1100 doctors of 28,000 patient visits shows that with access to digital records doctors actually increased the number of tests ordered- from 12.9% of visits without digital records to 18% of visits with digital records. For more advanced tests such as MRI and CT scan the rate was 70% higher. Dr. McCormick says this may be because the new digital technology may have made it easier to order tests.