LyrArc Article Gist
Feldstein wants to see a stronger dollar, that is less inflation eroding the value or purchasing power of the dollar at home. Abroad he wants to see a weaker dollar in relation to Europe, Japan and Canada where about half of US imports originate. And a weaker dollar in relation to lower wage Asian countries to improve America's trade balance. Better to do this now than to wait a few years when the adjustments needed would be greater. America needs to export more and import less to improve the trade balance. A competitive dollar in relation to trading partners in Europe and Asia would provide the improvement in the trade balance that the U.S. needs for keeping economic growth. With the risks to the economy from declining housing prices improving the trade balance becomes important. During the 1985-1988 period the dollar declined in value significantly, falling 37%, but the inflation rate averaged 3.1%,says Feldstein. This is what he means by having astrong dollar at home, which is to say not eroding its purchasing value, while at the same time increasing exports and reducing imports. During this period merchandise exports increased by 40% while imports increased at half that pace. A repeat of that experience is possible and necessary to maintain growth, according to Feldstein. See the link to McKinnon, at Stanford, The Yuan and the Greenback, WSJ, August 29, 2006, which cautions against anything but a very gradual and carefully managed appreciation of the yuan, giving importance to inflation and interest rate differentials between the US and China. One point to note narrowing of interest rate differentials between the US and China is seen as backdrop for dollar weakening on exchange rate basis. McKinnon appears to consider a smaller interest rate differential as a cue for an even lower appreciation of the yuan, see his example of 2% inflation in the US and 3% interest rates. Interestingly the two approaches may complement each other. Offering a perspective of China maintaining its growth and not risking deflation or slowdown, and of the US maintaining its growth and not risking a slowdown from the housing market collapse, by strong domestic investment and exports. How to keep both economies going may be the policymakers challenge for strong global economic growth....

LyrArc Article Gist
Krugman coins the term weaponized Keynesians for those who say building new warplanes is a good idea because it creates jobs, but do not say the same about job creation for building bridges, and other infrastructure.

LyrArc Article Gist
The U.S. Federal Reserve Open Market Commitee takes a position of pause and wait as it decides in March 2012 not to take any new further bond buying stimulus measures. There is uncertainty in equity markets about the effect this will have on equity prices. During the last two pauses in 2010 and 2011 the equity markets experienced downturns after withdrawal of bond buying measures by the Fed, leading to Fed action with QE 1 and QE 2 followed by a surge in equity prices and the S&P at over 1400. At the peak during the 2001 and 2008 dot-com and housing propelled booms the S&P reached over 1500. At this rate the curve for U.S. equity prices for the 2008-2012 period resembles a repeat of a narrow steep V shaped curve with only a 7% climb in April 2012 needed to reach the 1500 point in the S&P 500 average at which the previous two booms in prices ended up in a bust. John Taylor, Stanford economist, in a separate op-ed in the Wall Street Journal on March 29, 2012, called for a change in the mandate of the U.S. Federal Reserve for a more rule based policy because of the dangers of repeated boom and bust periods in the U.S. economy as a result of ultra loose monetary policies. The problem at this point in April 2012 is that profits of companies are not expected by analysts to come in strongly in the second quarter, with a slightly improving unemployment picture, expected upward pressures on oil prices from the Iranian situation, eurozone debt problems in Spain and Italy, and slowing growth in China, India and Brazil. These fundamentals do not support an S&P at the levels seen during the height of the last two booms of 2000-2001 and 2007-2008....

LyrArc Article Gist
Pakistan's economic delegation meets Christine Lagarde, head of the IMF, at the IMF and World Bank Annual meeting in Bali, Indonesia. Lagarde calls for transparency in accounting and complete understanding of Pakistan's debt. IMF delegation will visit Islamabad to discuss terms for a loan. The previous government of Mr. Sharif came under criticism for not providing transparency on Pakistan's total debt. There is concern about debt trap diplomacy in loans from China, as loans may exceed the country's ability to repay and the interest rate terms are not seen as favorable to Pakistan. The Sharif government is criticized for not negotiating better terms for loans from China. Pakistan faces $8 billion debt load in 2018, with first payments to China under Belt and Road Initiative of $1 billion due in 2019. Pakistan's total foreign exchange reserves fell to a low of $8.4 billion, according to the central bank. Pakistan is seeking $12 billion in IMF assistance, but experts say more will be needed to bridge the financial gap. The Pakistan rupee dropped by 10% during this week in October 2018, down to 137 rupees for a U.S. dollar. The new government of prime minister Imran Khan took office in August 2018 after election promises to bring transparency to Pakistan's debt situation. Promises were also made to improve low income housing and meet needs of poor and low income public. Imran Khan opened a public housing project to build 5 million new homes. IMF terms could restrict the money available for badly needed housing and other social projects.  Pakistan's small tax base with a small percentage of the population paying taxes, also restricts the ability of the government to fund social welfare projects and infrastructure. It makes the country more dependent on outside assistance and loans. India has moved to expand its tax base, and is implementing GST tax reforms to increase the tax revenues available to fund infrastructure, health, education and housing. The war in Yemen has complicated other sources of funding traditionally accessed by Pakistan from Saudi Arabia and the UAE. The financing gap is estimated by experts to be $20 billion, with the IMF assistance sought of $12 billion falling short of the financial needs. ...

LyrArc Article Gist
The Pew Global Attitudes Project shows Chinese living in ther cities are largely contented with their lives with 82% saying the economic situation is good, and 86% agreeing withthe direction the government is taking for China. In India 62% consider the economic situation to be good, Russia at 52% and Germany with 53% are close, Brazil at 41% and USA is at 20%. Surprisingly Egypt comes in at 44%.

LyrArc Article Gist
The head of the Germany Program at Institut Montaigne in Paris, France, Robinet Borgomano looks at the renewal of German society under the ideas of "respect" put forward by Olaf Scholz of the SPD party. What does Olaf Scholz see as the main issue of our time? - Borgomano says it is the disintegration of European and American societies under the combined effects of technological progress and globalization. Where does Scholz get his ideas of "respect" for workers and families? Isn't Mr. Biden sharing the same ideas in the US? The SPD party got its start at the Bad Godesberg Convention in 1959 when it embraced the idea of a social market economy as a party of the people. Wily Brandt as chancellor from 1969 to 1974, whose personal struggle against the Germany of World War II was based in the Nordic countries, embodies best this renewal aspect of the SPD. Scholz sees his role as renewal of Germany, Europe, hand in hand with Mr. Biden's renewal efforts in the US on the same basic ideas of respect of the dignity of the worker and families that in Germany were seen with Wily Brandt and in the US with Harry Truman who followed FDR. Scholz rejects the overemphasis on the of merit in German society, European society, or American society, in the way it has taken shape in the last fifty years. Scholz cites Michael Sandel's Essay "The Tyranny of Merit" rejcting it because it makes a case for inequality based on merit, on capital allocation on an implied idea of merit of free markets managed in damaging ways for personal interest. It is wrong because it robs the worker and families of the basic dignity that is the right of every individual and of every person. It is wrong because it makes a false justification for growing inequality, and makes those who do not succeed feel that it is their fault. Meritocratic elites have made the idea that those who work hard and play by the rules get all the benefits and wealth even if the rules were first set in a way that benefits them alone. When these rules become implicit they are rarely questioned as happened in the period after 2000. It is not just in Europe and America that this happens, and not just in the 20th century.  Strange but true- During the 1850's in the heyday of industrialization in Britain the Ethnological Society of Britain justified the inequality between the British and Indians in the British Empire by saying Indians were inferior in exams and did not have the motivation or the aptitude and energy to excel in the way British students did. Dadabhai Naoroji, the first Indian member of the British parliament in Mr. Gladstone's Liberals singlehandedly took up the job Sandel and Scholz and Mr. Biden are taking on today to restore the respect of workers, farmers, and families in America and Europe and in all parts of the world. Sandel goes on to say what Scholz has heard clearly- "the parties that made the offer of upward mobility to workers and families have missed the insult implicit in it to a large number of working people." In a way it is going back to the roots, to the founding fathers in America who said in the 18th century that "all men are created equal and they are endowed by their Creator with certain inalienable rights, and among these are life, liberty and the pursuit of happiness," -nothing less.   ...

LyrArc Article Gist
Questions about the viability of Canadian crude oil production from tar sands and shale as oil prices for Canadian crude are at about $17 in Jan. 2016. Western Canadian Select from Alberta traded at about $14 in Jan 2016. Crude oil NY benchmark is at $31, other crude is priced lower if transportation costs and other factors including quality and grade have to be figured in.

LyrArc Article Gist
It is written in the Bhagavad Gita (Swarupananda) "Know that these (two prakritis) are the womb of all beings, I am the origin and dissolution of the whole universe, Beyond me, O Dhanajaya, there is naught. All this is strung in me, as a row of jewels on a thread." Indonesian president Subianto won election by 58% of vote with promise for 90 million children free school lunches. He was invited guest for Bharat (India's) Republic Day parade in New Delhi alongside prime minister Modi of Bharat (India). Indonesia and Bharat in this part of Asia, it has 1.7 billion people. The ancient god Hanuman is revered in Indonesia and Bharat, the people here are determined to breakthrough into the modern world of science and technology. Japan, South Korea and China made progress since the 1890's over 135 years. Bharat is poised with Indonesia to bring 1.7 billion people into the Modern World for Vikshit Bharat Developed Bharat by 2047, the 100th anniversary of Independence. For this much of the work was done by Mohandas Gandhi, and less well known the selfless leadership of Atal Bihari Vajpayee in 1998-2004 and Modi 2016-2025. Without Vajpayee's leadership there would be no base for Modi's effort for modernization. Swami Vivekananda inspired in turn Gandhiji, Sukarno, Vajpayee, and Modi- the thread of yoga and Bharat runs right through it all as it is said in the Bhagavad Gita.     ...

LyrArc Article Gist
Edward Chancellor reviews the book by Greg Steinmetz on Jacob Fugger of Augsburg, Germany. Fugger (1459-1525) grandfather and brothers established textile factories in Venice and Northern Italy, and made money in the textile trade. Fugger added to this by loaning money to mine owners and buying shares in mines near Salzburg, and establising new mines in Hungary and other parts of central Europe for copper and silver. Augsburg was a free Imperial City and a center of trade with Italy. Hugger financed the election of Charles V of Spain as Holy Roman Emperor, and benefitted from the Hapsburg dynasty's dominant role in Europe made possible through strategic marraiges. This was a period of transition from feudalism to a period of free cities and merchants, of early stage of capitalism. Augsburg briefly holds a new role as the trade and centre of activity shifts from Italy and the Mediterranean to the Netherlands, Britain and the Atlantic. It is also a period of tumult in Europe as the Protestant Reformation and Luther are active in this period, the peasants are also staging revolts for their rights, and merchants are increasing their role through trade and finance....

LyrArc Article Gist
Fuel Subsidies in China and India that keep the price of fuel for transportation moderate tends to reduce the conservation otherwise possible. And biofuels are not encouraged for fear of raising farm prices for the poor. And conservation and efficiency of fuel use in factories and other places also is not as vigorous as it could be. With growth exceeding 10% China will continue to put pressure on demand for some years to come.

LyrArc Article Gist
The slowing of China's growth with GDP growth for 2012 estimated by the government at 7.5%. Growth was 8.1% in the first quarter of 2012, with expected decline in the second quarter. In response China's National Development and Reform Commission, which executes economic policy in China, has accelerated the approval of major infrastructure investments starting in April. This includes hydropower stations, clean energy projects, 4 new airports and renovations of 3 large steel plants, a subway in Nanjing. The investments total about $150 billion. Another stimulus comes from investments by local governments with central government support, including highways, sewage treatment plants, and $55 billion investment by state corporations in the Chongqing municipality. To revive the auto industry a cash-for-clunkers program is also planned, and this may include cash incentives for home appliance purchases. In addition to this the State Council headed by premier Wen Biao is making plans for 20 major projects in 7 strategic industries, from advanced equipment manufacturing to energy conservation. The result is a Stimulus that will be much smaller than the $585 Stimulus spending of 2008-2009, with a measured response compared to the earlier splurge in spending. Experts say the Communist party sees this as ensuring a smoother transition to a new president and prime minister in 2012, with added credibility for the nations growth and for the leadership of the Communist party in the modernization drive. ...

LyrArc Article Gist
Venezuela faces an uncertain future after U.S. efforts to support Mr. Guaido and call for new free and fair elections have failed. With help from Russia the Venezuelan economy is showing signs of recovery from the steep decline and high inflation in 2019. Oil production is expected to reach 1 million barrels a day in 2020 after falling to 650,000- 700,000 barrels a day in 2019. Russia's oil company Rosneft provides critical help for Venezuelan oil sales and maintenance in oil fields.  National Security Adviser John Bolton is faulted for his advice to president Trump on Venezuela, that merely voicing support for 36 year old Guaido, would lead to regime change without action from the U.S. With the recovery in Venezuela with help from Russia and Cuba, Mr. Guaido's popularity has dropped by 20 points to 38%, according to a Venezuelan pollster Datanalisis. Most Cubans and Venezuelans in the U.S. are in Florida where there is support for new elections, and Mr. Trump continues to support Mr. Guaido. The lack of support for change from other countries including Europe, India, Turkey, and Mexico have led to a stalled situation in Venezuela. There is concern for the steep inflation, the migration of about 4.5 million Venezuelans, the shortages of critical supplies as a result of the economic collapse in 2019. The situation is stabilizing for the government yet the future of Venezuela with U.S. sanctions and weak economy leaves Venezuela in a precarious situation. Venezuela continues to be an example of how well meaning changes for social justice can lead to political changes that bring about economic collapse. This happens  when business and the economy flounder under mismanagement and corruption under crony socialism, a variant of crony capitalism. The old capitalist class and the privileged families who ran the country under its old two party system are gone. Replaced with a new class. The trying out of untested economic ideas in the quest for social balance leads to economic mismanagement, loss of critical human resources which leave the country, and a higher degree of poverty with shortages than before.  Today in Latin America Brazil shows how allowing generous pension benefits at the expense of basic needs and public services in the budget can hurt the economy. Argentina's overborrowing once again shows how this leads to IMF loans and harsh economic austerity. Chile shows how not financing pensions and public services can lead to collapse of public confidence and riots. Venezuela shows how the quest for social justice and reducing privilege can itself get flawed, leading to mass migration of as many as 4.5 million citizens. This happens under models that vary from free enterprise models to socialist or nationalist models showing that models can be less relevant than good sense and good management. In the beginning and for some time each of these models worked well, commodity price supported booms concealed real problems. Avoiding extremes, prudent spending, good investment and hard work, investment in education and infrastructure, building consensus, and good management, is critical for the future to avoid the bad outcomes facing much of Latin America. A lesson also for Asian and African countries that basic virtue is more important than socialism or free enterprise or nationalism when it comes to development.   ...

LyrArc Article Gist
A biography of Steve Jobs that Jobs asked Walter Isaacson to write about his life. Isaacson is the author of biographies of Ben Franklin and Albert Einstein. After being diagnosed with cancer in late 2003, Jobs called Isaacson and asked him whether he would write Jobs's biography. He told Isaacson he wanted his kids to know him as Jobs wasn't always there for them. Jobs told Isaacson to write freely and sought no control over the content. The book delves into the effect on Jobs of his adoption, his search for meaning in life, the women in his life, his extreme behaviour and a sense even among his friends that he could be mean. He fathers a daughter at age 23, and does not have much to do with her till she is 10, and he coud treat his adoptive parent sometimes with callousness. His adoption affects Jobs early on as he describes it- at age 6 a girl living across the street asks Jobs if his adoption really expressed that his "real parents did not want you." His adoptive parents who did not have a college education, were very supportive and caring of Jobs. The effect of his adoption led Jobs on a search for meaning in life, on a seven month visit to India, into Zen Buddhist readings, extreme diets and primal scream therapy. Jobs was not interested in mechanical things and "did not want to get his hands dirty," says his adoptive father. It was the excitement of the surroundings in the early eighties in the area around Palo Alto and San Francisco that affected Jobs. The book describes his relationships with Joan Baez, a folk singer, computer consultant, Tina Redse and former Goldman Sachs trader, Laurene Powell. Right down to his last days Jobs met with Isaacson, reflecting on the meaning of death and what survives after it. Maybe its just an an on-off switch he says....

LyrArc Article Gist
China's National Bureau of Statistics made an announcement in Beiijing that 51.27% of the Chinese people now live in urban areas. In 1949 the figure was 10.6%, in 1979 it was 19%. In the space of three decades China has urbanized rapidly. This has brought with it economic growth, infrastructure development and increased employment in the manufacturing sector as new workers moved from rural areas to the cities. With it also come major problems for the country and the leaders of the Communist party led government. Of the 691 million urban residents, 253 million are migrant workers- 37% of urban residents and 19% of the population are in this grey zone described as the "hukou" or household registration system. Under "hukou" these migrants from rural areas cannot access public services in the cities, and have rights to access them in their own villages where they are registered. Integrating these migrant workers who are different than their more affluent and better educated neigbors in the cities so that they become truly a part of the urban areas will remain a huge challenge for China. One of the ways China is addressing this is with the plan to build 36 million units of affordable housing for these migrant workers by 2016. Ever so gradually Chinese officials are relaxing the restrictions on migrant workers- such as Shanghai Mayor Han Zheng's announcement for allowing all migrant workers to rent subsidized housing in the outer parts of Shanghai and committing to "increase the migrant population's involvement in the community affairs, cultural life and show genuine care for them." Food security is another issue as more development on prime agricultural land means less land available for agriculture. Appropriation of agricultural land for industrial use is bringing the country down to the limit of 120 million hectares of agricultural land needed for self sufficiency in food, according to the Land Ministry. At the same time China's leaders want to avoid what the World Bank calls "the middle income trap," where a country reaches a level of modernization and urbanization, and then stalls at that level- the level being around $3000 per capital GDP, which is China's GDP per capita today, according to the National Bureau of Statistics in China. Li Keqiang, who takes over from premier Wen Biao, sees the building of affordable housing for migrant workers as a critical way to continue the urbanization process, and shift the country from its export focus by increasing consumption and the development of industries that support this. A slowing economy dominated by state owned companies focussed on a decelerating export model and an aging but still growing population- NBS says China's overall population was up by 4.8% in 2011 over 2010 and has reached 1.35 billion- presents a tougher set of challenges to the new leadership in China than was faced by the current leadership....

LyrArc Article Gist
The NYT editorial talks about growing inequality and the falling back of both the people below the poverty line defined as $22,205 for afamily of four, and the falling back of the middle class. According to the Census Bureau median household income fell in 2008 to $50,300 from 52,200 in 2007. Economists Piketty and Saez found that from 2002 to 2007 the top 1% of households- those making ,ore than $400,000 a yea- received two thirds of the USA's total income gains, largest sine the 1920's.