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Mortgage and other loans taken out at lower interest rates, before the US central bank the Fed started raising rates  in March 2022, is a big part of US household debt. This fact is helping to soften the impact of the Fed's increase of rates by 5% over 16 months. The increase in rates helps savers and retirees earn more on savings kept in CD's. The cut in inflation from 9% in 2022 to 3% in July 2022 helps increase the purchasing power of money. It also helps keep the US economy stronger than other world economies, with the Biden economic plan of increased business investment underpinning strong economic growth of 2.4% in the second quarter of 2023. Wars are not a distraction or cost burden for the economy, with Biden shutting down 2 wars in the Middle East and South Asia. Lessons were learned and Biden has been resolute about this, also giving a singular focus to his plan for rebuilding and renewing America on multiple fronts, infrastructure, fighting climate change, inflation, business investment, and fair taxation so that the fruits of labor are shared equally by all of America's people. Doing this required a clear vision, resolute purpose, and a path to action for each step. Biden has done that in ways that only a few presidents have done in the past. In doing this he has shown that America stands for hope and a better future, a land as he never fails to repeat, a land of possibilities. ...

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Mead points out that the world with an effective U.S. leadership based on democracy and the values we cherish is needed now more than ever, after the failures of the Bush and Obama administrations to provide the kind of balanced leadership all Americans can stand behind. A world without an effective and enlightened leadership from the U.S, is one in which the world could fall apart in regional rivalry, one in which the hundreds of millions of people in the poorer parts of India, China, Russia, Brazil, and other developing countries of the world, will have less opportunity to meet their aspirations for a better life. This is because a focus on development requires less regional rivalry and because serious missteps can reverse in a few years decades of economic progress as shown in the 2008 global financial crisis. More so because we live in an increasingly interdependent global economy. It is also the kind of world where suppression of freedoms and suppression of the opposition as in China and Russia, provides a wrong kind of message, a world in which we or our children would not want to live in. Russia, India and China, are too driven by rivalry and lack the deep experience to go it alone, multipolar is more likely to end up being multipolar rivalry leading to a race to the bottom, which would be bad for all, especially for the poor in Asia and the developing world. The 2008 crisis showed what some serious economic mistakes could do to employment and incomes in the world with output dropping by a third in most places. Political missteps could lead to a slippery slope of this magnitude but more difficult to correct. Greater participation in the political process and more enlightened leadership is needed in all countries to allow many voices and greater interaction across boundaries, focussing on the dangers of such multipolar rivalries. The world of the G-7 is already moving to the G-20 where many voices are heard and serious discussion of differences takes place, but participatory is different from multipolar....

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Former Senator Chuck Hagel of Nebraska, has called for fresh thinking in U.S. foreign policy and foreign engagements after the wars in Iran and Afghanistan cost the U.S. about one trillion dollars. He says the U.S. should avoid single issue engagement, get the participation of other countries, and increase common ground on a host of issues which concern most of the major nations in the world. This is why we have a G-20 and not a G-8, says Hagel. This policy also helps the U.S. by having other countries in Europe, Asia and the Middle East take up some of the responsibilities that would otherwise fall disproportionately on the U.S., and lets the U.S. devote attention to strengthening the domestic economy which underpins strength in world affairs. On Iran he sees continuing talks as the better approach to coming up with a solution, for which he has come under criticism from some Republicans.

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Voters overwhelmingly oppose the tax increase in 2015 taking the consumption tax from 8% to 10%. The Abe government plans to postpone the tax increase and call snap elections in December 2014. Two thirds of people surveyed said they did not see why new elections are needed. For prime minister Abe this is an effort to win a vote now rather than later when the opposition is weak. In 2012 elections Abe won 295 of 480 seats in the lower house of parliament. LDP party officials say even if this dropped by 20-30 seats it would be a win for Abe reaffirming that his economic policies are taking Japan in the right direction towards growth, and extending the length of his mandate. They point to growth in tourism, and the addition of 1 million new jobs. Further action to stimulate the economy would reduce unemployment further and end Japan's deflationary tendencies.

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Denning says that because of the enormous repercusions on Iran's economy of a war in the Persian Gulf, a more likely scenario is not the cutoff of supplies of Iranian oil altogether but a smaller list of buyers for Iranian oil, making Iran sell the oil at a discount. Saudi Arabia's and Libya's added production would bring more oil to the market. The impact will be larger on Europe because of the decline in the value of the euro, with Brent crude on a 12 month average basis costing 14% more now than in the peak price in 2008. By comparison in dollar terms the comparable figure is 4% higher for the U.S. At a price of Brent crude of $120 in 2012, according to Citigroup, energy costs would take up 9% of world GDP, putting pressure on a economic recovery in Europe and the U.S.

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Manish Sabharwal writes in the Indian Express that India missed it economic tryst with destiny and economic freedom for its citizens in 1947 and the decades after that. Today with AtmanNirbhar Bharat, he says,  the country is finally making its economic tryst with destiny. It is about self-reliance, yet it is also about opening up to new supply chains set up by allies U.S., France and Japan, South Korea, opening up to trade, investment and technology flows in new and exciting ways. The prime minister's message called for a quantum leap in technology. India was already moving up in GDP terms and set to surpass both Japan and Germany to become the largest after the U.S. and China in GDP. But there was something missing in it for the people. Here he sets out what the huge investment of 10% of GDP and the possible sequel investment to this would mean for people of India, from farmers to workers in different sectors of the economy, including the informal economy. India has fallen behind in per capita GDP and this is now the focus of the people and the government, federal government and the states, to build an economy that provides the best opportunities and growth for all its people. True Gandhian Swa-raj in the best sense of the term.   ...

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The reckless behaviour of German elites in pursuing increased dependence on Russian oil and gas and ignoring American warnings is shown in this report in The Guardian. The first links to Russian oil and gas were started under chancellor Brandt in 1970. At that time the dependency on oil and gas supplies was much less than 10%. Dependence increased during the Schroeder and Merkel years to the extremes that exist today. Not much more even in the year of the fall of the Berlin Wall in 1989. It was the misconception of chancellor Schmidt of the SPD in his differences of opinion with presidents Carter and Reagan on the risks of increasing dependence on Russian energy that marked this period. Schmidt believed Germany was right in its conviction that increased trade would bring peaceful cooperation without realizing that economic dependency is never a good thing. Poland had a skeptical view- German elites including business elites were being corrupted. Cheap Russian energy was being used in the Schroeder and Merkel years as a competitive business advantage without considering the risks involved and the admonitions of American presidents of the dangers. With Steinmeier of the SPD there was the immense guilt of the millions of war dead from the German invasion of Russia in 1941 that acted as a brake on evaluating the increasing dependency for energy that reached over 35% by the time he was foreign minister. The fall of the Berlin Wall was seen not as a result of multiple factors including the positions taken by Carter and Reagan, the losses to the Russian economy from the war in Afghanistan, and the general decline of the Russian economy. German leaders saw this as coming from the new relationship being built with Russia. German business and Schroeder- Merkel even allowed not just new Nordstream pipelines under the Baltic Sea but also transferred ownership of reserves, the gas and oil storage inside Germany to Russia's Gazprom. German Economy minister Habeck says the storage tanks were emptied so that there would be added surge for oil and gas prices after the attacks on Ukraine. This Guardian report ends by saying that Mr. Steinmeier still needs to show why he pursued policy of cooperation with Russia with increasing dependency to the point that a cut off of Russian oil and gas supplies would lead to gas rationing in Germany in the event of a sudden cutoff. Was it a form of sensible cooperation taking dependency to such extremes. Similar questions remain for chancellor Merkel. With the added question for Merkel about the increase in trading ties with China even after the Trump administration had warned of the serious risks to US and European competitive advantage in technology and manufacturing, and the increased dependence on a supply chain that was fundamentally weak as shown clearly by the pandemic.     ...

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In tackling the new Omicron variant president Biden is choosing to avoid the toughest restrictions and broad mandates that American would find it tough to accept and which affect upward mobility and the economy, and widen gaps between red and blue states. The fatigue is high as well as mental health impact says one of Biden's advisors. Biden announced stricter travel restrictions and a mandate for masks for public transit but avoided mention of lockdowns and shutdowns.

New York Governor Kathy Hochul says the situation is different now that 70% of the population is fully vaccinated and children over 5 are being vaccinated. She said "its a different situation right now and we don't need to have a knee-jerk reaction."

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The picture on the cost of living action is mixed. In this report some Easterners in Pennsylvania and New York are shown taking loans to pay for groceries at high prices. In Michigan trips to the supermarkets show a modest increase of 1% in prices and prices coming down. Overall the faster the situation the better it is for working people and a top priority for president Joe Biden. Biden has approached it on a macro and micro level with a range of actions to bring cost of living down for people, from action on student debt for 5 million people, from health care cost cuts setting a ceiling on what health care cost would be, to cutting costs in areas such as housing, groceries and gas through concerted action across the economy.

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The EU with its $15.4 trillion economy is a bloc comparable in size to the U.S. $19.4 trillion economy. The French State Secretary for Europe, Mr. Lemoyne, says EU does not need to be worried about the way the USMCA, new version of NAFTA was negotiated with pressure from president Trump, as the Europeans are the largest trading power in the world. The EU exports to the U.S. are $252 billion, and up 5% in the seven months of 2018 over the preceding period. The U.S. by comparison exports $153 billion which has remained at the same level with a $600 million decline in the same period in 2018.  President Trump has put pressure on the EU to help improve the trade imbalance. Soya bean exports are pointed to by the EU as this has doubled in 2018, after China responded to U.S. sanctions by limiting soyabean imports. President Trump has stated his intention to impose tariffs on European car imports - trade worth $60 billion- to get the EU to offer concessions.  ...

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A unanimous vote of the Chinese Communist Party Congress now puts "Xi Jinping Thought on Socialism with Chinese Characteristics in a New Era" into the Chinese Constitution. As the 19th Party Congress ends Xi Jinping joins two other leaders of the Communist Party Mao  Zedong and Deng Xiaoping, who were so honored. It also appears that unlike previous leaders Jiang Zemin and Hu Jintao, Xi Jinping is concentrating authority and direction for China. This Congress marks the end of Xi's second five year term as party general secretary.  Under Hu Jintao there were efforts by some Communist leaders to create new power bases. This period ended with Xi Jinping bringing a clear direction and authority under the Communist Party. This has led to China taking on a leadership role in the world economy and global political affairs after the election of Trump in the U.S. in 2017. The management of the economy also has provided a soft landing after threats of disruptions in trade relations with the U.S. ...

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As Macron struggles to present EU's case in Washington DC the problems in Germany loom large.The debt brake Merkel to stop debt based infrastructure investment is what ails Germany and the EU. It has had two pernicious effects. It created the AfD's surge by lowering economic growth and investment in public needs - housing, transport, public services. It worsened the SPD and CDU performance by not investing in security, with no policies to return crime committing refugees to their home countries. A combination of aid and other assistance, diplomacy, would have secured the cooperation of countries to take them back. A strong display of action on removing refugees committing any offenses would have lessened the number of terrorism incidents and reduced a surge in the AfD performance with loss of confidence in chancellor Scholz.  CDU's Merz says he wants to remove the constitutional brake from the German constitution. The SPD under a new leader would want the same as it seeks to invest in the economy. Scholz lacked the foresight not to enter into a coalition with the Free Democrats in 2021 who flatly opposed public spending to meet pressing infrastructure needs lowering growth.  Both CDU of Merkel and SPD of Scholz lacked the foresight and the courage to invest and not settle for less for Germany. ...

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Paul Krugman, Nobel prize winning economist points out an astonishing fact about the 2016 U.S. presidential election- U.S. television networks nightly news devoted only 32 minutes in 2016 to all policy issues combined. And these networks devoted 100 minutes to Clinton emails. He calls this "disgraceful."  For weeks at a time in September and October the main television networks lacked the integrity and courage to ask questions and persist on the major questions facing the country of the economy, correcting income distribution that has been skewed away from the middle and working class, infrastructure rebuilding, education and healthcare, and what the policy proposals of each candidate would do for the country. Krugman does not mention this but the media devoted hardly any time to the economic plan devised by Trump that respected economists and economic analysis showed would increase the deficit by $5.3 trillion, and lead to a short term temporary increase in growth followed by a sharp decline. The worst thing that could happen to middle and working class families struggling to recover from the blow to their finances from the last recession.  The cyber hacking of a U.S. presidential election by a foreign power never received the unanimous rejection that it deserved from the television networks, not just Fox News as Krugman points out, but by all the networks. The future landscape of the media needs assessment to bring in new ideas and new entrants to bring constructive improvements, and for older media organizations to rebuild after the loss of confidence among young people. Only about a quarter of young people in the U.S. have confidence in the large media organizations news coverage according to surveys done recently. There are other pressures coming from the tech world that make it imperative to do this. Many experts point to the destructive effect of social media in spreading rumors or information disguised as facts, which are spread instantly by Twitter and Facebook, without any obligation to check the facts. This is also dangerous with a public that is now divided between better educated and less educated along political lines, older more settled in their views people, and younger people quicker in looking for the facts and checking things out before believing them. ...

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China is still interested in a trade deal with the U.S. even after Mr. Trump signed a bill passed by Congress that it criticized as interference in its internal affairs. Mr. Trump's signing statement gave China an opening to continue its persistent effort to seek a trade deal that would lessen the effect of tariffs on its economy. It mentioned "constitutional authorities with respect to foreign relations," and stated Mr. Trump had signed the bill "out of respect for Mr. Xi, China and Hong Kong." This has credibility because Mr. Trump has consistently supported an effort to bring a peaceful end to protests and any efforts to that end that Mr. Xi has and would continue to make. Both sides see the role of the biggest economies in the trading system as too significant to be affected by different views on Hong Kong, as long as mutual respect is sustained.  

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In this exceptional piece Krugman says Greece has won flexibility in the negotiations with the EU in April 2015, contrary to the media coverage. He says under the Samaras government negotiated agreement with the EU the primary surplus, the difference between the revenue and expenditures not including interest on debt, would have to be triple what it would be now for the next few years. This is the only figure that matters, says Krugman, as it is the amount that is transferred to the creditors. The Syriza government plans to run only a small primary surplus, which itself involves large sacrifices in Greece with the drop in revenues from the decline in the economy. Language about future surpluses is left obscure, and Greece continues to get financing for the next few months. In other areas Syriza agreed to structural reforms in the labor market regulations, and to take strong action against tax evasion, which he describes as constructive steps on the path to economic recovery.

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Only 1.9 million hourly workers in manufacturing now earn more than $20 per hour, its down 60% since 1979, according to the Bureau of Labor Statistics. Of all hourly workers in every sector of the economy the percentage of people earning more than $20 per hour shrunk to 18% in 2008 from 23% in 1979, thus losing some of the gains the US made since World War II which helped build the American middle class. One can see this unwinding clearly in the auto industry as wages are being reduced to match nonunion Japanese plants, and the industry itself is going through a huge downsizing fast. The hourly work force totals 76 million or 52% of all workers ranging from managers and professionals to factory and construction workers to technicians, educators and sales people. The wages of salaried workers show a similiar trend but are not converted into hourly amounts. As the numbers for 2007 are at the point where the economy was still booming, the path ahead as things go through a steep downturn can only have serious implications such as a slow recovery for demand in 2010. If a number of trends converge, employers shift to part time employment, auto related workers downshift to lower wages and benefits, shift to nonunion plants in the south or the midwest, and work is offshored or outsourced, this could worsen effects on consumption for years ahead especially with the credit remaining tight and consumers paying off old debt. Frank Levy, a labor economist at MIT, says that all this is happening wihtout a political debate or discussion, as people are worried more about having a job, and only secondly about what it pays and whether they are losing ground. Even the Pennsylvania primary debate, says Levy, between Hillary Clinton and Obama was conducted without quantifying the decline, and no one mentioned the eroding of the $20 per hour wage. What happened to support the consumption and support imports, was to pay for consumption by going into debt or refinancing the home. This has implications that range from the future of export industries in China's booming coastal sector, to how long the recovery drags on, and to what the future would look like....

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Spain's 7 LNG terminals, its renewable energy projects, its ties with the Middle East and North Africa, make it a potential exporter of energy in Europe. Spain is too dependent on tourism. The Pedro Sanchez government plans to use 140 billion euros from the European Unions's Next Generation Fund for the green conversion of its economy. This includes reviving the Midi Catalonia project, a gas link between Spain and France. This pipeline would have a capacity of 7.5 billion cubic meters of gas in its first stage, one seventh of the Nord Stream pipeline from Russia that was shut down by Germany.

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Greg Ip tells India's story, piped water for hundreds of millions of Indians, massive increases in road and rail, rapid development of infrastructure, aviation, ports logistics. WSJ graph shows country growth of economies for Japan, China, India, Germany in 2000 and 2020. By 2000 Japan had grown its economy to become about half the size of the US economy with two decades of rapid growth since 1980. China repeated this process with two decades of hyper growth since 2000 to become about 75% of the US economy by 2020. The graphs also show Japanese growth tailing off so rapidly after 2000 in relation to the US economy that it is now only about 25% of the US economy. China is likely to follow the same path as growth slows and with an aging population to become about 35-40% of the US economy by 2040 from 75%. India following the process that happened in Japan and in China is likely to become close to 35-40% of the US economy by 2040 from about 18% today, with the fastest growth over the next two decades for the most populous country in the world. Greg Ip points out what has been achieved since 2014 with the Modi government. Good governance without leakages of public funds dedicated to infrastructure, ease of living, GST one India one tax so that growing pool of funds from taxes fund rapid development with no leakages to corrupt officials,  Swacch Bharat or Clean India, clean water from taps, electricity and cooking gas for the whole population of India with dates for completion. All this Ip calls removal of the shackles that existed for far too long even past 2000 and 2010 when China had vastly surpassed India from its low point in 1980 after Mao and the Great Proletarian Cultural Revolution. India today is in as much a pace of development as China in the 1990's and Japan in the 1960's, except that it now has the benefit of grasping how development can be done in a way that does not affect climate and health in adverse ways as happened with China's hyper growth -which also led to the tragic loss of manufacturing for workers and communities in the US and Europe due to the economic theories of laissez faire of the Reagan era. Reagan theory for governments not working with industry that were applied indiscriminately during the Clinton, Bush, Obama and Trump presidencies for three decades led to shipping manufacturing overseas with no regard for the risks and dangers. What Greg Ip fails to mention is the uniqueness of India that is united by Vedanta, Hinduism and Buddhism for thousands of years, and which keeps the fabric of society together when it is divided by 13 language groups. These 13 language groups are: Hindi 43% of the population, Bengali 8%, Marathi 7%, Telugu 7%, Tamil 6%, Gujarati 5%, Urdu 4%, Kannada 4%, Odia 3%, Malayalam 3%, Punjabi 3%, Assamese 1%, English 1%. It was the vision of the early leaders Vivekananda, Gokhale, Mohandas Gandhi, Nehru, Sardar Patel, that united a diverse country with many languages and cultural variation. And it is this vision of Vivekananda that is creating the Good Governance under Sab ka Vikas, Sab ka Viswas, Sab ke Saath, Sab ka Prayas of today- development for all, with the confidence of all, with the support of all, the efforts of all. Without a disciplined direction based on hard work India could not make it this far or fulfill the aspirations of its youthful population by 2040. ...

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The pandemic exposed Germany's digitization infrastructure weaknesses. A lot will need to change in education in Germany to meet new upheavals as digitization changes the nature of work in the job market. Digitization, automation, and rise of electromobility, knowledge economy will change how the world and Germany works. More and more knowledge work means Germany will need to change its education in many fields. Some experts say it is the political failing of the state that digital education is not a subject in schools. In the car industry alone the rise of electromobility could cost 200,000 jobs a result of a study by Ifo for car industry association VDA. New jobs will be created in other professions and industries as many as 2.1 million jobs in health, training, teaching, management and administration.

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More evidence in Commerce Department trade figures that president Trump's strategy of imposing tariffs on $200 billion of Chinese goods and renegotiating trade pacts with Canada, Mexico and South Korea was not sufficient to reverse the huge U.S. trade deficit. The international trade deficit in goods and service increased 19% in December from prior month to $59.8 billion. Excluding services that U.S. sells to foreigners such as tourism, intellectual property and banking, the deficit grew to $891 billion the largest on record.

Mr. Trump's tax policy of increasing the fiscal deficit increased growth in the U.S. at a time when the rest of the world economy was slowing leading to higher demand for imports, and the 4 increases in interest rates by the U.S. Federal Reserve helped strengthen the U.S. dollar that pushed up imports.

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The problems with a second phase of quantitative easing, go back to asking why the first phase hasn't worked to prevent the economy from sliding back. So far the Fed has engaged in buying $1.7 trillion in bonds in that first phase. This shows the limitations of this approach. A lot of money was injected into banks. And the banks have $1 trillion on their books that is not being used for lending. The reason being its hard to find borrowers, as borrowers are cautious and concerned about the economic future. The Quantitative Easing in this second phase is supported by the reasoning that deflation risks remain. But this raises another question, what level of quantitiative easing would work, and would such enormous levels itself cause bigger problems.

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The US economy expected to grow 1.5% in 2008 down 0.3% from estimate in October 2007 World Economic Outlook after taking into account a recent update in the model that lowered all forecasts 2005-2008 by half a point. Of this about 0.2 or 0.3% may be the impact of the stimulus package which is included in the estimate. Is this a bit on the high side? Its expectation of growth suggests it does not expect a recession or that it will periodically revise its estimate downward based on new information and the extent of consumption, housing and investment deterioration it sees unfolding in the months ahead. For the European economy it has taken its earlier estimate of 2.1% down to 1.6%. This suggests that it sees the US crisis having an impact in Europe. China's rate of growth will be 10% down 1.4% from 2008 and the Middle East growth about 6% unchanged from 2007, Latin American growth 4.3% down from 5.4% in 2007. This suggests global growth outside USA will remain healthy. However its not clear what would happen if the idea of a recession in the US becomes likely with new information in coming months, and if this is introduced into the model how much would growth in China and the Middle East and India come down in that event. This is the kind of scenario that should also be available from the IMF to know the downside and whether the global growth would sustain till the US recovers from the housing and credit crises in years beyond 2009, given that it would take some time for the excesses there to correct themselves....

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Traditional IPO's have raised $7 billion down a huge 94% from this time last year says this report in the WSJ. IPO of Rivian a new electric car manufacturer in 2021 was priced so high that it made the valuation of the new company at over $70 billion more than that of Ford Motor. Rivian had only made a little over 1000 cars in 2021 and about 7000 cars in the first half of 2021, which shows the size of the excess and the potential waste of capital that could be better allocated to vital needs for the economy such as achieving self reliance in semiconductor chips for the US which is not getting the funding it deserves and needs. These kinds of excesses are now a thing of the past. Larger companies, well known names such as Intel's Mobileye subsidiary or companies with a with a proven track record are now the companies that are more likely to have success with IPO's, as the economic environment, higher interest rates and other changes lead to the withering away of the novel idea startups of the past. Startups that had no meaningful effect on improving people's lives in any significant way, or strengthened the US economy and industrial base, and merely sucked up valuable resources.  It is not that the US lacks the resources to compete effectively with any country in the world including China, in renewables, in semiconductors, in 5G, in new technologies, it is just that hundreds of billions of dollars are going into unproductive channels and wasted. ...

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Krugman has some legitimate concerns. Noting that 600,000 jobs were lost in February, 2007, which would mean several million jobs lost, anywhere from 5 to 7 million jobs lost in 2009. In the face of this generating 3.5 million jobs by the end of 2010 as Obama plans to do, looks like not having done enough, and letting the worst effects of the downturn go on. And the lack of a plan to resolve the situation of failing banks, which are only drawing more of the government's capital, leaves continued weakness in credit markets and the economy that will hurt the unemployment picture through 2009. So in spite of all the rhetoric and good intentions, the lack of experience in dealing with a crisis of this magnitude, political deadlock, and an element of trial and error, learning and observing, as the President and his advisors deal with the evolving crisis, leaves the American economy exposed to many risks.

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BRICS is becoming an obsolete concept as Brazil, India and South Africa are essentially looking for ways in which they can increase opportunities for growth. It was a concept started by a Goldman Sachs investment banker Mr. O'Neill at a different time in 2010. The world has gone through the 2009 financial crisis, the pandemic, and the supply chain crisis with overconcentration of EU and US supply chain in China. These events are leading to a shift under the Biden administration to bring India  into the G7 into a new G8 that includes India. Only Russia, China and South Africa remain from the original BRICS. Russia because of the war in Ukraine now depends on Chinese support and trade. Brazil will gradually shift back to its position as part of the US alliance in Latin America with Mexico, Argentina and Chile. India with its plans for rapid growth to build the modern third largest economy by 2040 seeks supply chain integration with the US and EU in the position that China holds today.   ...