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The market for copper experienced a global oversupply in the last 4 years with a sharp decline in prices. The Sierra Gorda mine in Chile and the Constancia mine in Peru will add more supply of copper. Prices of iron ore dropped 50% in 2014, and copper 14%. The CEO of Glencore PLC, Ivan Glasenberg, says the problem is a huge misallocation of capital, as companies in the mining business continued to invest heavily with supplies outstripping demand.

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The Trump administration's early proposal for NAFTA moves away from campaign pledges to completely renegotiate the treaty, instead taking the approach of working to improve the U.S. trade position in relation to Mexico and Canada. It includes seven objectives for tougher rules for labor and the environment favored by Democrats in Congress, and it also has support from Republicans with its effort to update NAFTA for changes in technology and in other areas since the accord was signed during the Clinton administration. The area in which U.S. and Mexican business are wary is one in which the Trump administration still seeks to keep the option of imposing protective tariffs, and a border-adjusted tax to level playing field for differences in taxes, as well as other measures to protect American jobs and interests. Because any renegotiated NAFTA also has to pass both houses of Congress this proposal took into account the different constituencies and interests for this issue. Robert Lighthizer, trade representative under president Reagan is likely to become the next U.S. Trade Representative and lead negotiator. We first profiled Lighthizer in a group in Lyrarc for pointing to the need for a level playing field in trade. As early as 2010 Lighthizer argued in op-ed articles that globalization and trade practices should ensure a level playing field for the U.S., and was covered in Lyrarc. ...

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The commodities boom allowed Brazil under president Lula to commit to heavy state spending, subisidies, protection of favored sectors with large tariffs, that led to inefficiency and high debt. The policies continued under president Rousseff. Corruption scandals in the latter part of the Lula administration led to more populist policies for the Workers Party to stay in power, says Porter. Compared to Mexico and Chile, Brazil and Argentina under presidents Lula and Kirchner moved in the direction to closing up their economies to trade and foreign investment that would make corporate sectors more competitive and less dependent on the state for subsidies and favors. Mexico's economy other than the automobile sector is struggling, as mismanagement also plays a part as with the handling of Pemex and huge capital injections needed. Mindfulness and thoughtfulness is needed in setting policy direction, aware of the risks free of illusions about rosy scenarios, knowing that ideology plays less of a part than exercizing good judgement....

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Two weeks after his election Donald Trump says the U.S. will not join the Trans Pacific Trade Agreement during his term in office. Barack Obama took seven years to negotiate the trade agreement which was opposed by trade unions, the auto industry and was unpopular in the midwestern U.S. because of the impact of trade in hollowing out the manufacturing sector. Here Frank Sieren of the DW.com points out that the agreement was not really about trade, as most of the gains of trade had already been realized according to experts. It was part of the "pivot to Asia" to maintain American dominance in the region, says Sieren. After China pulled together some Asian and European countries into its trade agreement, the Regional Comprehensive Economic Partnership (RCEP), the U.S. pushed for TPP as a counterweight to the China sponsored trade zone. China says it will try to integrate the countries in TPP into the trade zone it has sponsored. President Trump has said that the U.S. is better off negotiating agreements with each country and not getting into multilateral trade agreements. He fought the election campaign on the basis of the opposition to TPP and trade agreements that unfairly hurt American workers. This could have provided the 110,000 margin of victory in the states suffering from the hollowing out in manufacturing such as Michigan, Wisconsin, Ohio and Pennsylvania. A similar hollowing out in Ontario favored Justin Trudeau's Liberals against the Conservatives in Canada's election. ...

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Street protests in Brazilian cities with economic growth slowing to about 1% in 2012 and inflation at about 6%. Street protests in Brazil reflect public disconten over corruption, overspending on the World Cup and Olympics, and lack of good education, health and other public services. Increase in bus fare and police response against small protests using tear gas set off the large scale protests of tens of thousands in Brazilian cities. President Rousseff's sees her popularity ratings drop 8% percentage points from the March level to 57% in June 2013, according to polling firm Datafolha. Ths includes high popularity in poor northern states. Rousseff's popularity in more industrialized southern states declined by 13%, and by 16% among college educated youth.

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Juarez, the city across from El Paso, has done well in the last 10 months with 27,000 jobs added in the maquiladoras. These foreign owned factories continue to attract business interest even with a drug war raging in the background. The reason is that Juarez connects straight to American Interstate highways and this makes it possible to deliver goods in 3-4 weeks in some cases from the time of order compared to 10 weeks for China. And wages can run as low as $4.21 an hour. Companies get incentives in the tax treatment and worker training is supported by the local government.

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."

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The National Assessment of Educational Progess (NAEP) test scores in the U.S. for K-12 show a lack of progress since 2013. Scores for math and reading dropped for 8th grade students, and scores for reading were stagnant while dropping in math for 4th grade students. The test scores reflect progress in rural, suburban, urban environments, for communities that are affluent, less affluent and poor, different ethnic backgrounds. The test started in 1990 is the only one measuring national progress. The new results of NAEP are on a scale of 0 to 500, and show that in 2015 64 percent of 4th graders and 66 percent of eighth graders were not reading proficient, 60 percent of 4th graders and 67 percent of 8th graders were not math proficient. Massachusetts, Vermont, New Hampshire, do much better in the tests than Mississippi and New Mexico. Experts say a state to state comparison should separate the non native English speaking students from native English speaking, especially in states like Texas. With about two thirds of students failing the math and reading proficiency levels, growing proportions of minority Hispanic students in many states, larger proportion of less affluent students, the tests show the challenges facing America's K-12 education even after the changes introduced by Education Secretary Duncan since 2008....

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Women executives at a panel discussion sponsored by Columbia Universiy in New York, in Dec. 2014, provide ideas for getting more women in Tech fields. Ideas include, mentoring, with early education exposure to technology careers- as early as middle school. One executive says she takes in 150 female high school students to Washington D.C. for leadership training. Other ideas are to turn maternity leave into a positive feature of women's lives by letting women who do well keep their duties by delegating them to others while they are away, and making a smooth pathway back to work full time. The suggestion is to allow a gradual transition to ramp back up to full time work, and allow flexible hours, working from home. In daily work women are encouraged to look for partnerships with other areas of the organization for getting results, and being sensitive to which areas of the organization they need to build support in.

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The slowing growth in China is reducing growth and depreciating the currencies of iron ore producing countries Brazil and Australia. China makes 50% of the world's steel and imports 1.2 billion tons of iron ore traded annually. Australia exports 80% of its iron ore to China valued at $67 billion in 2013. Brazil sends 50% of production to China. For the first time in 15 years China's steel use declined 0.3% to 500 million tons in the Jan-Aug. 2014 period. The mining companies have invested heavily in ports and railroads for expanded production. BHP CEO Mackenzie says the strategy is to maximize production because reducing production increases costs on a unit basis. The result is a decline in price from $135 a ton at the beginning of 2014 to $69.80 on Nov. 28, 2014. Prices could decline to the $50 range in 2015, according to Citigroup analysts, because of an estimated iron ore surplus of 300 million tons by 2018. As China expands recycling of older cars and washing machines to produce steel this will reduce future iron ore demand in China. JP Morgan forecast for Australia reduces GDP growth to 2.8% from 3.3% for 2015, and Brazil reduced its forecast for 2015 to 0.9% from 1.8%....

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Robert Gordon of Northwestern University describes the problems in American Education and how this is the first generation which will not do better than its parents in educational attainment. The cost says Gordon comes in lower potential economic growth rates.

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A recent book "The Spirit Level" has become popular in Britain. It says that countries with greater disparities in income also do worse in a number of social indicators, from higher murder rates to lower life expectancy. It also affects the consensus in society which is a necessary underpinning for sustained economic development and economic growth. Inequality when it affects the middle class and reduces the size of incomes in the middle, or creates stagnation in incomes, poses large risks for society and affects economic growth. In the US the home foreclosure crisis and the lack of bargaining power of wage earners in the middle class has created this problem. This is exacerbated by the banking crisis and bad loans in the banking system. Studies show that slow growth in college graduating rates in the USA after 1970 compared to the period 1900-1970, has increased inequality, especially with today's knowledge economy. Germany is also affected by this problem as wages for workers have remained stagnant with the labor reforms. Interestingly a combination of economic growth and payments to the poor have increased the size of the middle class and its incomes in Brazil. The austerity policies in Britain will affect incomes and income growth in Britain for the middle class. In China the gap is widening quickly between the urban areas and the rural areas. And the policy of residency permits- the hukou system-which limits internal mobility from rural areas to the cities and towns, makes the inequality all the more glaring. The lack of democratic election makes the situation worse in China compared to Brazil, because free elections in Brazil enabled leaders from the working classes such as Luiz Inacio Da Silva and Ms. Rousseff to emerge as heads of government. These leaders pursued policies that would explicitly bring a more shared prosperity in Brazil compared to the leadership in China. In China policies are determined by entrenched interests in its model of development- the state-owned companies and banks and their managers, local and government officials of the Communist party, and businesses with the networks and connections with the Communist party and local governments. This is why the ginni coefficient which measures inequality has dropped significantly in China, putting it in the rank of developing countries with poor records in equality. Inflation in China, India and Africa also affects the poor and lower middle classes to a greater extent. Current trends suggest that rebuilding the middle class in the developed countries and providing fairer distribution in developing countries will be of serious importance in coming years. Especially with the likelihood of more economic crises which tend to adversely affect the middle and lower classes disproportionately....

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U.S. president Trump's statement calling for a list of goods for tariffs on $200 billion of Chinese goods leaves China without a clear response and facing new risks. The U.S. exports about $150 billion in goods to China so that China would have to impose penalties to respond at the same level. Placing restrictions on American firms on access to China's market, and imposing other penalties would have the effect of reinforcing the perception of unfair practices targeting American business and lead to hardening of U.S. response.  The U.S. sees itself as being in a better position with the U.S. economy experiencing a growth trend. China with large local government and bank debt faces a difficult situation. President Jinping's policy of reducing the risks of bad debt in the banking system involved sacrificing some growth to stabilize the system. China's GDP growth in 2017 was 6.9%, the target at 6.5%. Future targets and actual growth now look to be much lower.The trade war with the U.S. has the effect of dampening growth leading to calls for the central bank to loosen its monetary stance. In response to Trump's announcement the People's Bank of China pumped $31 billion into the nation's banks. China is studying Japan's response in the 1980's and 1990's when the U.S. took strong action against Japan's growing trade surplus. Japan responded by appreciating its currency and using stimulus to cushion the effect of lower exports on the economy. The stimulus led to the housing bubble and over time a period of low growth and stagnant economy. The large China stimulus in 2008-2009 has compounded the problems in the banking system. Not deleveraging and controlling financial risks in China's banking system because of the trade war would bring a new set of risks. ...

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Prof. Peterson of Harvard and Hanushek of the Hoover Institution, authors with Woessmann of the book "Endangering Prosperity: A Global View of the American School," offer some startling reminders about the importance of education to economic growth and incomes in countries. Simply by raising the math standards in the U.S. to the higher standards in Canada would raise GDP by three fourths of one percentage point. One advantage that the U.S. enjoys comes from its good university systems, open markets, rule of law, tax rates, and open immigration policies, which give it about two thirds of a percentage point in higher GDP growth per year. The estimates are from the authors calculations. For the period 1960-2009, a period of rapid growth in Asian countries Korea, Taiwan, Singapore and Hong Kong, higher test scores in math and reading compared to the wrold average as measured by NAEP test and PISA, have led to 2% higher GDP growth. NAEP shows only 32% of U.S. high school students proficient in math compared to 45% in Germany and 49% in Canada and 63% in Singapore. By contrast to Korea and Taiwan, Peru, Argentina, the Philippines and S. Africa have about 2% less in GDP growth because of lower scores compared to the world average....

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Monica Langley provides an excellent account of how U.S. Education Secretary, Arne Duncan, is using the $100 billion from the Stimulus funds in the 2009 Recovery Act to implement the Common Core education program in U.S. states and districts. Common Core is about raising student math and reading scores and standards, and implementing teacher evaluations based on test scores to make teachers accountable. This is the one significant area in which the Obama administraton in the U.S. is likely to leave a valuable legacy. Republicans in Tennessee, including Lamar Alexander, have embraced the program, showing how Duncan is using his persuasion skills to speed up the implementation across political party lines in a period of strong partisan feelings about programs. When governors have hesitated, Duncan has gone straight to the school districts using the funding. Teachers union say the program is moving too fast as evaluations would affect teacher careers, and Duncan agreed to a one year reprieve on the consequences of new teacher evaluations for states applying for an extension. This makes Duncan uncomfortable. He says he has only three and a half years left and he is going tooo slow. Business leaders such as P&G CEO, Robert McDonald, say the only political party they have is their educated workforce. Duncan has persuaded 40 states in the U.S. to sign up for higher standards in reading and math. Democrats see the Duncan initiative as helping poorer schools, which is also important to reduce the increasing inequality in the U.S. Since 2008 high school graduation rates increased by 3 percentage points, with a 5 point gain for black students and a 7 point gain for Hispanic students. After $4 billon in new funding to low performing schools, so called "dropout factories," the number of such schools has declined to 1424 from 1746. Teachers unions are only gradually adjusting to the need for accountability in math and reading scores. Duncan's father was a psychology professor at the University of Chicago, and Duncan grew up in Chicago neighborhoods before attending Harvard and playing for the basketball team. Duncan tutored younger school students in the afternoon at his mother's after school program in a black neighborhood on the South Side of Chicago. In 2001 he was made the head of the Chicago public school system by Mayor Daley, where he took action to shut down poorly performing schools and reopening them with new staff. All the time he pushed for greater parental choice, charter schools, new teacher talent and using data to track school and student performance. ...

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David Autor, an economist at the Massachusetts Institute of Technology, says he is quite worried about the steadily declining participation of men 16-64 in the labor force from 85% in the decade after World War II to less than 65% today. This is a blow to the men, their families , government revenues and the economy.

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Arne Duncan describes the improvements in K-12 education in two regions of the U.S.- the District of Columbia and Tennessee between 2011 and 2013, shown by the 2013 National Assessment of Educational Progress (NAEP). The hard work of educators, parents and school officials is paying off and offers examples for other parts of the country, says Duncan. Lessons include facing the facts, not dumbing down by setting low standards. With higher standards Tennessee students were only 34% proficient in math and 45% in reading compared to the 91-92% with lower standards. Republicans followed up on the work of Democrats in the state. Soliciting feedback from critics and experts- the feedback was used to improve systems and learning to help teachers and students. Schools chancellor Kaya Henderson says improving teacher quality was critical, and so was academic rigor. Still Duncan says more needs to be done, this only shows the right direction for states lagging behind, and one should not get complacent. The other areas college enrollment and dropout rates need to be followed carefully. International PISA results still show the U.S. at 27th in math and 14th in reading of 65 countries- making this only the beginning in setting the future course for U.S. educational improvements....