LyrArc Article Gist
The political deadlock between U.S. Congress and the President and its impact on efforts to reduce the unemployment rate. The failure of the Obama administration and Congress to tackle the jobs issue, leaving too much of the burden of action on the Federal Reserve.

LyrArc Article Gist
This report in The South China Morning Post in Hong Kong, gives insights into the Chinese position in trade war with the U.S.  China has its own internal groups which support China being able to take a leadership role in world affairs. Xi Jinping made giving China a prominent role in the world a feature of his presidency. China  has this internal audience and its own sense that China's resurgence was won with hard work and cooperation, plus dedication of the Chinese people. In the past Japan and South Korea also used state subsidized industries, and subsidies to gain leadership in key business sectors involving high technology. China would see this state subsidies model as its own model of development. From this standpoint the U.S. demands on subsidies as unfair competition could be seen as changing a key part of its economic model.  Asking China to put everything in writing and show tangible proof of enforcement as the U.S. insisted in talks, was too much for the Chinese side. China said trust us to do this, and lift the tariffs based on our verbal assurances. The U.S. having seen decades of no progress on this point, wanted tangible proof before tariffs were lifted. Added to the demands on subsidies were the demands for no more of what the U.S. calls stealing of U.S. technology through forced transfer of technology by U.S. firms as a condition to operate in Chinese markets. With the U.S. lagging in 5G technology and Huawei ahead the issue resonates on the U.S. side. Add to this Mr. Trump's key voter base includes the former Democratic party supporting workers who have shifted to him because of trade agreements and policies of Clinton and Obama that hurt American workers through seemingly endless closure of manufacturing plants from Chinese competition.   ...

LyrArc Article Gist
Unorthodox cabinet nominees- Kash Patel at FBI, Tulsi Gabbard at Intelligence get nominated. Others where the nominee is supported broadly by moms and parents, and many senators Rand Paul and Ron Johnson who are highly enthusiastic, are RFK Jr. for Health Secretary who still faced questioning from Republican Kennedy and other Republicans. All of them get nominated by Feb 15, 2025. Republicans in Congress stay together, Democrats do the same strangely opposing everything on the other side, including action on obesity and chemicals in food, drug industry practices they have been railing against for years that are RFK's agenda.  By tapping into different ideas just because they are good, make common sense, and not worrying too much about whether it is from the opposing Kennedy clan, and willing to take some risk with Patel and Gabbard, try youngsters such as Pam Bondi at Justice Department, Elise Stefanik at the UN and Kate Leavitt as Press Secretary, a woman Kristi Noem in the toughest job there is today at Homeland Security, DJT and Chief of Staff Susie Wiles have put forward a different set of people highly motivated, more than a bit rambunctious and boisterous, to get things done on immigration zero illegal migrants, zero fentanyl deaths, and zero deindustrializing technology transfers to the Nation's competitors, and zero play except on a level playing field in trade and business. ...

LyrArc Article Gist
An intimate biographical account of new Chinese leader Xi Jinping and his connections with Muscatine Iowa, where he visited as a head of a Chinese farm delegation in 1985. Xi Jinping remembers the trip vivdly and plans to spend time with friends from that visit during a visit to the U.S. in 2012. He spent two nights during that visit in the bedroom of two college age boys of the Dvorchak family. This revealing account of Jinping's life shows that the actual story of his life is quite different from the title of "princelings" or privileged sons of former communist leaders that is suggested by this reference in the media. Because of the volatile nature of Chinese politics, his father Xi Zhongxun, who led communist partisans in the struggle of the pre World War II years, was rehabilitated twice after falling out of favor. The first period was in 1962 and it was not till 1979 when he was fully rehabilitated. During this period which coincides with the growing up period of Xi from 9-26 years of age, Xi experienced many hardships. During the years of the Cultural revoultion Xi was sent at age 15 to Shanxi province where his father had led partisans. He lived there for 7 years in a traditional cave dwelling in the village of Liangjahe doing farm work. He was denied admission to Tsinghua University twice before being accepted in 1974. There he graduated with a degree in organic chemistry. This was followed by three years working as an assistant to Geng Biao, defense minister and a partisan who was a colleague of his father. The next job was deputy Communist party chief of Zhengding county in Hebei province. Iowa Governor Branstad visited Hebei in 1984, and Branstad played host to a animal-feed delegation led by Jinping in 1985- the visit to Muscatine was part of this trip and which Jinping has told others he enjoyed more than his visits to Oregon or California that year. The second time Xinping's father went out of favor was after his criticism of the crackdown of protests at Tienanmen Square. These experiences have given Xinping a confidence and experience in different situations that other Chinese leaders including the current leaders lacked. If Jinping has inherited some characteristics from his father he may also have the courage to take China in a new direction, and make the kind of changes China needs as it shifts away from an export based economy. At the same time rule in China is by consensus of leaders on the communist party's standing committee. His father helped initiate the special economic zone in Guangdong province in 1978, and Xi Xinping held senior posts in the provinces of Fujian and Zhejiang and in Shanghai, giving him close ties with industry and local government in areas that led the export based economy. Prime Minister Lee Kuan Yew of Singapore puts Jinping in the" class of Nelson Mandela type leaders, who has great emotional stability to not let his personal misfortunes and sufferings cloud his personal judgement." Of political positions Jinping has a certain wariness. He once responded to mention of him as the potential leader with the words: "Are you trying to give me a fright."...

LyrArc Article Gist
Janet Napolitano, president of the University of California, says the Obama plan for ratings of colleges in the U.S. will not add much value because much of the information is already available. More important she says is to tackle the bad actors in education leading to high student debt. She says she will cut costs by a couple of hundred million dollars in the next few years, and will keep pushing on costs as there is a natural tendency to revert back. With less state support the UC system is admitting a larger number of students from out of state who pay higher tution.

LyrArc Article Gist
This NYT editorial provides statistics for the problems of young people facing high student debt, high unemployment, and working in jobs that do not require their educational qualifications. Federal Reserve data show 44% of young college graduates in 2012 working at jobs that did not require a college degree. Underemployment stands at 16.8% in the U.S.- this includes young people too discouraged to look for work and those stuck in part time jobs. Put another way the hope that existed in the 1970's for a better future is simply lacking. The boom, bust, and corrective policy preceding and following the 2000 and 2008 crises have acted as a huge distraction for needed policy steps and imposed additional penalties on young people, just as other trends in the globalized manufacturing and IT industry were shifting jobs overseas.

LyrArc Article Gist
A study by the National Employment Law Project shows most of the job creation in the economic recovery to 2014 in the U.S. is replacing the better paying jobs with lower paying jobs in fast food retail and similiar low paying industries.

LyrArc Article Gist
Portugal in 2012-2013 stands as a good case study of what is good and what is bad about austerity measures, about what makes sense and is needed and what does not make sense and is bad both in a fiscal sense and for growth. Patricia Knowsmann does a good job of bringing this out, from the hundreds of stories written about austerity vs growth in the media. During 2011-2012, the elected government of Passos Coelho has supported an EU-IMF-ECB program that reduced wages, raised taxes, privatized state owned companies and changed labor laws that reduced hiring by businesses. During this time the Portuguese have patiently accepted the program compared to other countries and the budget deficit is shrinking from 9.8% in 2010 to an expected 5% in 2012. The unemployment rate has gone up to 15%. Now a new plan by prime minister Coelho in September has created an uproar and sparked popular opposition to the austerity measures threatening what has been achieved in deficit reduction, including the credibility of the austerity program. The plan is to reduce the portion of salaries that employers contribute to the social security system from 23.5% to 18%, in the hope that employers would increase hiring. At the same time it increases the portion of salaries employees pay from 11% to 18%. Coelho was looking at Germany and Slovenia where employees pay more than 20% of salaries to Social Security. What he failed to look at was the situation in Portugal where workers and pensioners have lost about 24% of their income through wage cuts and tax increases. The new plan would reduce incomes even further. Portugal's small business owners expressed strong disapproval for the plan because it would mean a drastic drop in consumer spending. The president of a Portuguese shoe maker, Kyaia, with 600 employees, says it makes no sense to reduce companies contribution if the company can't sell enough shoes to keep its workers. Kyaia has already experienced a 25% decline in demand and its CEO Fortunato Frederico, says he cannot understand how a company can hire workers if demand declines. This impact on consumer demand and sentiment is a fact that policymakers cannot ignore throughout the eurozone as austerity measures are implemented, especially when demand has already declined to an unacceptable point. The move by Coelho ignored a study by Portugal's finance ministry and central bank that showed export businesses may be induced to hire from the savings in contributions, but the businesses serving the domestic market would simply take in the savings. The EU-IMF-ECB recognized this and suggested increasing taxes to pay for the reduction in employer contributions, which would also depress demand by reducing incomes further. Portugal's economy and business is not focussed on exports, small business makes up 97% of Portugal's companies and most of them do not export. The introduction of such a plan gives credibility to the idea that there is a transfer of wealth from workers to business under the austerity programs, which affects the credibility of the entire deficit reduction and competitiveness improvement programs. For Coelho it also means the strong opposition of a minority party in his coalition government and from members of his Social Democratic Party. Large demonstrations were held on Sept 15 in 40 cities in Portugal in the first large scale opposition to further austerity measures and the Coelho social security contribution plan. Capital markets in Europe also see a problem with such plans because it removes the essential element of popular acceptance of deficit reduction plans jeopardizing the entire program. After the failure to win popular acceptance in Greece capital markets see additional risks and failures as one too many for the eurozone. ...

LyrArc Article Gist
Paul Krugman describes the situation of slowing inflation in America and the prospects for president Biden in 2024. In just a few months since the midterms inflation is receding. Shoppers are showing resistance to price increases in retail stores. The Fed under Jay Powell has taken a resolute stand against inflation slowing inflation in house sales and rental, in automobile pricing and other sectors of the US economy. New investments under the climate change bill passed in Congress and the CHIPS and Science Act, Inflation Reduction Bill, mean more factory openings and jobs in America. A milder winter in Europe is helping it tackle an energy shortage and bringing oil prices under control.

LyrArc Article Gist
Krugman points out the gains on three fronts evident from the Census Bureau report of 5.2% gain in median income of households in the U.S. He says the first is the growth in incomes of ordinary working class and middle class families, second the large decline in the poverty rate, and third the further rise in insurance coverage in 2015 for people without health insurance. He points to the steady efforts of the Obama administration to improve lives of ordinary families as working based on the Census report though results have taken time, and could have been better. The Stimulus, says Krugman could have been larger following the blow of the 2009 financial crisis and increased unemployment at the time. Janet Yellen at the inequality conference of the Boston Fed in 2014 pointed out the problems of 62 million households having net worth of about $10,000, and why this was running against the American idea of a better life for all Americans. In that sense the Census report is a movement in the right direction but a lot remains to be done.   ...

LyrArc Article Gist
This article in the NYT explains why the loss of jobs particularly in the auto industry to Mexico, with the experience of NAFTA passed by president Bill Clinton, has caused widespread opposition to the TPP trade agreement proposed by president Obama. Both Hillary Clinton and Donald Trump in 2016 oppose the TPP.

LyrArc Article Gist
Greg Ip in the WSJ says president Biden's popularity has not surged because of lack of results in the fight against inflation. Yet inflation has been cut in half as reported in the WSJ recently, with May inflation of 4% in the US being about half of what it was at its peak of 9% in 2022.  Inflation is much worse in Europe. Biden policies that helped fight inflation included the Inflation Reduction Act to control health costs, the policies to keep Russian oil below a certain level that reduced oil prices to $75 a barrel, and the sequential interest rate increases by Jerome Powell at the Fed. The long term benefits of increased investment in manufacturing in the US for jobs growth, and competitive policy to gain US leadership in many technologies also provide for sound growth in the long term. 

LyrArc Article Gist
Unemployment in Fort Wayne, Indiana, is 6.8%, and 14,600 workers are looking for a job. Peters and Wessel talk to employers in this midwestern U.S. city and find that employers are looking for people in manufacturing with just the right set of skills, in other cases the benefits and parttime local school system jobs paying $8-$12 per hour with no benefits go unfilled because of the lower wage.

LyrArc Article Gist
The U.S. government has spent $18 billion on training and job-search programs, with 47 programs offering training for the year ending Sept. 2009, according to the Government Accountability Office. President Obama proposed spending $8 billion more over 3 years to train 2 million people for new jobs. In addition there are state and local programs which get federal funding. Lawrence Katz, a Harvard labor professor says the money is given out on a haphazard basis and does not have a good track record of matching the training to the job openings. Part of the problem is that the government leaves it to state unemployment offices to evaluate labor markets and help trainees decide on professions to prepare for. A better approach is now being take by getting employers to offer on-the-job training. This approach is being adopted by community colleges and the Labor Department to improve matching of skills training to job openings.

LyrArc Article Gist
Merkel's leadership as Germany goes through the economic crisis. There is not much enthusiasm for further reforms among the Social Democrats or the Christian Democrats. Other than raising the retirement age to 67, the mood is not for any changes in that direction. The economy will contract by 6.1% but Merkel's decision is not to go in for a big stimulus under pressure from the US, and instead stay with the status quo combined with help to workers for unemployment benefits and for retention of workers by companies. As elections approach Merkel is considered favorably, and according to a recent poll by Forschungsgruppe Wahlen nearly 60% are satisfied with the grand coalition of the CDU and the SPD, 78% think Ms Merkel has done well as chancellor, and 58% want her to remain on the job. Actually Merkel's popularity is behind the CDU's prospects, the CDU itself is popular among only 35% of voters. Her analytical habits from her training as a physicist show in the way she is governing, which is thoughtful, and connects well with voters. Merkel benefits from the reduction in unemployment. Unemployment fell from around nearly 5 million in 2005 to around 3 million in 2008. The risk is that Merkel's popularity may be affected by an increase in unemployment to 5.1 million from the averaage of 3.3 million in 2008, according to an OECD estimate. Merkel stands behind a German response to the crisis which is to support the priciples of a social-market economy, make unemployment as least painful as possible to the jobless, to keep every job that can be saved in the nonfinancial sector with a 115 billion euro "Germany fund" providing guarantees and credits to companies that are in trouble because of the credit crisis. Stimulus packages of 64 billion euros supported the auto industry with subsidies to car buyers, and subsidies to keep workers intheir jobs. The idea was to come up with a German version of the response to the crisis by balancing the need to respond based on German conditions, and the concerns for inflation and the budget deficit, that is shared by most Germans. THe vision offered by Merkel is that of a physicist daughter of a protestant minister in East Germany, who is low on the rhetoric and good on substance, and willing to make decisions based on careful study and discernment rather than ideology, without sharp swings in any direction. Her vision comes from her days as environment minister, which is quietly pushing Germany into the forefront of countries developing renewable energy, moving ahead in energy efficiency, with anational goal of cutting emissions by 40% by 2020. The other areas are immigration and education, both key to the future of Germany because of the huge demographic change happening there. She has afamily minister Ursula von der Leyden, who introduced "parents pay", a14 month stipend for parents of newborn children linked to salaries, and to to improve daycare by providing places for 35% of children aged three or less by 2013. And Merkel has approved 18 billion euros of additional funding for research and universities. Says Leyden Merkel has made "daycare" an acceptable term in the CDU, and made Germans accept that they are an immigration country. Which tells you that you have to look closely to find the reasons for Merkel's popularity, which does not carry the rhetoric of an Obama, but is just as effective in German conditions. There are deepseated demographic changes going on in German society, which require a cultural change, and change in mindset, such as that for daycare, immigration, and blending the best of the old in the social market economy with the new like the changes in the educational system. The Economist says that in big cities today nearly half of the children under 15 are immigrants or their children and grandchildren, who are more likely to be poorer, unemployed and with less education. ...

LyrArc Article Gist
The first presidential debate in Denver, Oct 3, 2012. For the first time Romney came out as a recent Republican governor of Massachusetts, the most liberal leaning state in the U.S. For a reason that remains a mystery, except that Romney had to shore up support with the conservative base of the Republican party, Romney did not aggressively adopt positions that would appeal to the vast majority of Americans- from people on foodstamps which he said in this debate had increased by millions under the Obama administration, working class Americans, ordinary Americans about to lose insurance with higher premium costs from the unending increase in the cost of healthcare, seniors on Social Security, workers insecure or losing jobs as the economy fails to recover, and young people who cannot find work. As governor of Massachusetts Romney had to be able to address the needs of different income groups, the middle class and working Americans, and his own father who is his role model was a governor of Michigan, a liberal leaning midwestern state with the largest number of autoworkers in the U.S. He asked Obama directly how he could have focussed on Obama care and passed it without a single Republican vote when 23 million Americans were out of work and the first priority should have been high unemployment. Obama responded by saying he would defend the middle class but did not say what he would do in the next 4 years that was different from the economic policies between 2004-2008. Romney made clear that he was not going to reduce taxes if it would increase the deficit even though Obama said Romney planned to increase taxes by $5 trillion and worsen the deficit. At one point Romney said looking at Obama that he could own a house, a plane, but could not own the facts....

LyrArc Article Gist
This article in the Economist says the bad loans in the financial system threaten to derail India's rapid growth. It points out that about 17 percent of all loans are estimated to be non-performing. Government plans to set up a bad bank and have bad loans transferred at steep discounted rate to the bad bank are still at an early stage. India weathered the 2008 financial crisis with a financial system in better shape. Since then a surge in lending has led to an increase in the bad loans. Today both banks and corporate firms are facing this problem. The political system and dysfunctional governance with frequent changes for management at state controlled banks are part of the problem.

LyrArc Article Gist
NYT fails to see the importance of delivering on infrastructure building in scale, reshoring, wages and jobs for workers, and climate change action that president Biden is achieving to build a better America. NYT looks at the 2023 and the midterm elections and points out a well known fact that women (and men) in the suburbs care about legalized abortion rights for women, and this extends to states that vote Republican in the south. No attention is given to the importance of infrastructure building, increasing wages and jobs for working class and middle class Americans, bringing factories and investment back to the US, three issues that brought Mr. Trump into office in 2016 coming out of nowhere. Mr. Biden is old is the refrain. Yet it is president Biden who has delivered on infrastructure where Mr. Trump merely talked about it -Building America Better- as Biden pointed out in the State of the Union address in 2023. Biden has delivered in support for wage increases for workers, even joining the picket line at the UAW auto workers strike in Detroit. He was able to do this because he has spent more years in Congress than any other senator, and like Lyndon Johnson for the Great Society programs and desegregation in the 1960's was able to win support from moderate Republicans. Being older, having the wisdom and experience was and is indispensable in the American project started by Washington and sustained by Lincoln, who nurtured wisdom, experience, fully comprehending the people's problems, and mindfulness in the way Mr. Biden does. ...

LyrArc Article Gist
The Labor Department reports that there is no U.S. productivity growth in the 4th quarter of 2014 over the prior year. U.S. productivity growth is about 1.3% for the period since 2009, showing a weak expansion. Job gains of 295,000 in February 2015 show an improving jobs picture, yet wage gains are tepid. This is partly due to slack in the labor market not reflected in the official unemployment rate of 5.5% for Feb. 2015, with a large number of part time workers who do not have full time work. The low productivity growth is another reason for low wage gains in this economic recovery. Economic growth is also weak with economists estimating GDP growth for the 1st quarter 2015 at 1.5% annualized. GDP growth is in the 2-2.5% growth range since 2009. Hourly wages are up less than 2% since 2009, with hourly wage growth in Feb. 2015 at 2% over the prior year. Weak business investment is part of the reason for the sluggish economic growth. Macroeconomic Advisors estimates the capital investment for equipment software and buildings is seeing growth of only 0.3% in the last decade, much lower than in the last forty years. With most of the gains from the internet technology advances already made there is less prospect of a sudden increase in productivity....

LyrArc Article Gist
Krugman looks at the economies of indusrialized countries in 2014-2015. He points to the errors made by the Riksbank in Sweden to increase interest rates prematurely when a recovery was not on firm ground, ignoring the advice of deputy governor Lars Svensson. Sweden now faces the prospect of little growth and deflationary tendencies. He compares the decision of the ECB to raise rates in 2011 with Japan's decision to prematurely raise rates. The austerity policies in the EU driven by Germany and the lack of political consensus in the U.S., are faulted for making the situation worse when compared to Japan's poor handling of the situation. He says fiscal policy did not do enough in Japan to create growth, in the EU he says austerity policies were actually destructive of growth.

LyrArc Article Gist
Mervyn King, the governor of the Bank of England, is coming under increasing criticism for supporting the Conservative-Liberal coalition government's austerity plan, and for lack of efforts to fight inflationary pressures. On a major issue on which King has taken a clear stand- that the largest British banks should increase capital levels exceeding the international standards- not much has happened. Consumer prices in Britain were up at a 3.7% annual rate in December, and the government's austerity policies will also cause pain. In a recent speech King said that the Bank of England had limited ability to fight the higher unemployment and increased inflation. It was an admission of the limits of central bankers in the current situation. King said "a squeeze in living standards is the inevitable price to pay for the financial crisis and the subsequent rebalancing of the UK and world economies.