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The GM management does not get it , the GM spokesman does not get it, the workers don't get it, says Andrew Sorkin from what he hears them say. GM faces many problems, too many dealerships, too many models and brands, and union benefits and retiree benefits from another world of post 50's economic expansion, that can only be solved by a government sponsored bankruptcy or GSB. GSB is a necessary part of the solution as chapter 11 makes solutions possible without dealerships suing as state laws protect dealerships, unions striking and management insisting on the status quo. In all he sees the 35 plants of GM and Chrysler cut in half, only the Chevrolet , Cadillac and Buick and Jeep brands retained and Dodge Ram pickups merged with Chevrolet, in a GM-Chrysler merger. He cites Deutsche Bank's estimates that reducing the brands to the 3 mentioned for GM would reduce costs by $5 billion annually and reducing the dealerships by another $4 billion. Buick would be retained because its a huge seller in China. The government would setup a warranty insurance fund to insure the warranties of all GM and Chrysler vehicles bought while they are in Chapter 11. And some of the rescue money would go into retraining and helping promote new industry....

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Obama adminstration officials say Mr Obama did not call for the resignation of Mubarak because it feared creating a power vacuum at the top. The administration's fears include one about Egypt under a new government not honoring the 1979 treaty Egypt signed with Israel. In doing so- as Elliott Abrams, deputy national security advisor under President George Bush, points out in the Washington Post, the administration's attempt at denying liberty in the Arab world is "nothing short of a tragedy." Abrams points out that the protestors span all classes of society, from businessmen to housewives in Cairo and Tunis,, including moderates and human rights activists. It is a supreme irony of the times that the law school analytical processes of Obama have shunted out the very voices of the dispossessed and the oppressed that Obama claimed to hear in his first book, and of his sometimes poignant personal encounters in Africa. In doing so Obama has missed an historic opportunity to put America in a right standing with the people of the Arab world, and as Abrams points out made "engagement" ring hollow, as "engagement" not with the peoples of the Arab world and Africa, but engagement with dictators who have outlived their time and place. In a separate editorial the Wall Street Journal called into question the credibility of the US foreign policy establishment that was caught by surprise with the protests in Tunis and Cairo....

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California's economy is going through tough times during the coronavirus. Unemployment is up to over 20% which compares to 14.7% for the U.S., closer to that of New York. The state depends on the tourism industry, agriculture in the San Joaquin Valley, and entertainment industry around Los Angeles for jobs. Tech in the San Jose area does not account for as many jobs. The state also has a public university system and foreign students mostly from China bringing in $7 billion.   Its port system around Long Beach and Los Angeles connects with the Asian economies and China, for goods mainly transported to the rest of the U.S.  All these sectors are the ones most badly hit during the coronavirus.  California now has a deficit of $54 billion and was the first state to borrow from the federal government to pay $13 billion in unemployment claims. Undocumented Californians are not able to collect unemployment because of their immigration status, creating an American version of the informal economy that is found in India and Italy or Spain. California has 83 million people taking plane trips to the state for a tourism industry that normally brings in $145 billion. 600,000 travel industry jobs were lost in the state. Taxes related to travel are a significant source of revenue for cities in California bringing in $12 billion. The only sector that is less affected is the tech industry, yet this makes up only about 10% of the jobs or 1.7 million higher paid but fewer jobs. This tech sector at about just 15% of the California economy GDP, is of a precarious nature with a boom bust pattern, the last boom one that happened since the 2009 financial crisis. It in no way forms a significant support for employment or income for people in California or the U.S., and may even be responsible for distortions in the allocation of capital away from infrastructure and public services, through its disproportionate influence on how the nation's capital is allocated. The broader changes underway during coronavirus are likely to affect the state over many years, as supply chains shift away from China, and as infrastructure and public services investment assume their rightful role again in the nation rebuilding effort, agriculture and rural America become a part of the American renewal story.   ...

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Mnay people who have engineering degrees and jobs which pay 60,000 to $75,000 in the auto companies are now visiting food banks as they exhaust their unemployment benefits. They live in suburbs of Detroit, in Rochester Hills, in Dearborn Heights, in Taylor and so on. THe unemployment rate has reached 14.1% and there are more layoffs ahead. THis is also affecting the health care business as companies cut benefits. By the end of of 2009 100,000 residents will have lost their benefits, according to the state's unemployment insurance agency. THe US Department of Agriculture provides 20% of the food aid in the state to food banks and is watching the situation closely. In May, the caseload of the Michigan Food Assistance Program, which adminsters the USDA's food stamp aid for the state rose to 719,000 households, up 3.1% in April and nearly triple the figure in 2000. THe USDA has doubled its shipments to Gleaners, a food bank, which says it is stretched, as it does not serve the once affluent suburbs....

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Reporters at the Washington Post put together the events leading to the formation of a bloc of freshman Republicans in the U.S. House of Representatives who refused to compromise on debt ceiling and deficit reduction negotiations. The role of Cantor, McCarthy and Ryan in these events.

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The non-partisan approach taken by Republican governor Snyder of Michigan contrasts sharply with the approach of Governor Walker in Wisconsin and Governor Brownback in Kansas.

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IG Metall, the union representing 3 million workers in metals and engineering industries, negotiated a 4.3% wage increase over 13 months. The union had asked for a 6.5% increase. Unions won wage increases of more than 6% in the public and telecommunications sectors. Workers in chemical, agriculture and hotel industries are pushing for increases of over 6%. The union wage negotiations help set the pattern for wage increases for the 41 million employed workers in Germany. This will help France and other EU countries close the gap with Germany in wages and improve competitiveness.

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The heavy monsoon rains this year and the lack of adequate storage facilities may result in the loss of 10-15% of the wheat and rice harvest this year, according to Indian government sources. This means food prices are rising because of this loss of grain. India badly needs more and better warehouses to store grain and control food prices.

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Pearlstein says American Airlines (AMR) management had hoped to reduce employees count by 13,000, reduce benefits for employees and retirees and reform work rules by going through bankruptcy in the manner of other airlines such as Delta and Northwest. As it turns out AMR's unions and US Airways have made their own deal and come up with labor agreements that are likely to result in a merger deal with AMR with 1.2 billion in savings from synergies, instead of relying on labor savings for $800 million as AMR management had planned. This is because US Airways CEO, Doug Parker, sees increased savings and revenue from a new combined airline and a better hands on management team. Part of the reason is also the the way the combined airline provides additional feeder traffic from smaller cities to hubs in the east coast and midwest markets and in the Miami routes to South America. The Pension Benefit Guarantee Corporation also tacitly sees the benefit of a stronger airline so that its funds are not depleted further by having to support AMR's underfunded pension plan. The creditors have also realized what all this means by increasing the value of AMR bonds to 50 cents on the dollar from 30 cents on the dollar....

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How Renault- Nissan execute plan to build low cost cars for markets in Eastern Europe, Russia, Brazil, Mexico, North Africa and India, China. A new plant with initial capacity of 200,000 Logan type small cars to open in Tangiers, Morocco. Plants already operate in Brazil, Columbia, Mexico and Russia for Logan type vehicles. The Logan small car at $7500 is still a middle class car in countries like India so Renault is talking to Bajaj Auto of India,a maker of motorbikes and scooters, about making a $3000 car. The scenario that large automakers are looking at is one in which makers of small cars in India like Tata and Cherry in China master the art of making small cars with lower cost components and good quality and then move upscale using this expertise to underprice them in their segments like Toyota and Honda have done. Renault moved into the low cost segment in Sept 2004 with the Logan made in Romania, so its moving quickly in this segment and it is becomin a key part of Renault-nissan's global strategy. Note that Logan sales are about 400,000 but only 50,000 of these sold in France and Germany relatively small sales in Western Europe. ...

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Two way trade goal of $60 billion goal set for 2010 during the visit of Indian Prime Minister Manmohan Singh to China. The focus on both sides is on improving the lives of the people in their countries, where even rapid growth still leaves vast gaps in the country's development between urban and rural, coastal and remote regions in the interior, and huge challenges wherever they turn from the environmental degradation of industrialization, to health care in a capitalist economy for both countries, and worker and human rights in a capitalist economy for China, to infrastructure development in India. So the sobering tone of Wen " its not a matter of who outdoes whom" and the thrust of Manmohan Singh's "our people are united in their aspirations for a better future". See Wen's speech to the Japanese Parliament in 2007 where he referred to two temples or monasteries in China where lamps were burning continuously to promote the cooperation and peaceful development in the two countries. He strikes one as thoughtful and focussed on improving the lives of the Chinese people, but that said is part of the system of development in China which is focussed on manufacturing for export with few of the worker protections and much corruption....

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After OPEC says in a joint decision that it will stick to strictly followin quotas set earlier this year which would mean a modest drop in production, Saudi officials spread the word that they will continue to pump out as much oil as the world needs. So what is the end result? The Saudis are saying they went along yet they will continue to pump oil like before. Part of the reason is the Saudi belief in their own argument that with high prices the world economy would be further affected resuklting in a possible collapse of demand and of prices something it seeks to avoid and is in everybody's interest. This makes sense if one looks at the deep financial crisis facing the US and which has ripples around the world, most recently in financial mmarkets the collapse of Fannie Mae and Freddie and the possible collapse or sale of Lehman Brothers. And as U.S. elections are up in a few weeks the Saudis do not want to anything that can be interpreted one way or the other, and also a wait and see attitude because a lot of information about the US and world economy is not yet in....

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David Brooks of the NYT describes the themes taken up at the Democratic National Convention that of humility, justice, patriotism, civility, and hope, that are truly American. Along the way taking up themes that were strongly presented at Republican conventions from Theodore Roosevelt to Eisenhower and Reagan- respecting the military and fallen men and women. He says the Republicans have ceded this ground by nominating someone like Silvio Berlusconi.  Yet he says this is an unusual year and it tells more about the country and people than anything else- has it changed or is it still the same and looking for direction with the middle and working class still thoughtful, looking for sincerity and real programs from their politicians and government about creating a better future. Democrats face the challenge of showing this time its real, no matter the distractions and challenges, as the only thing that matters- to get the middle and working class back on their feet.   ...

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Long term changes in voting patterns, with voters shifting allegiance to third parties in larger numbers led to the need for a coailtion government. The Liberals with 23% of the votes won 57 seats. In this election 35% of the vote went to third parties, the highest proportion since 1918, and these patterns are seen as likely to remain. Far smaller number of seats now are close Tory and Labor contested elections, and the Conservatives win their constituencies with large majorities, as a result some of the Tory votes does not register in the way of seats. With a seven point lead over Labor Margaret Thatcher won an overall majority of 44, now Cameron struggled all the way and fell short.

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The lack of economic opportunities for an increasingly urbanized African younger generation is a major challenge. The median age of 19 makes Africa the world's youngest continent. Megacities are growing up in places such as Lagos and Kinshasha as millions leave subsistence farming to go to cities. Unlike Asia and Latin American countries men and women are coming to shantytowns in cities at a time when Africa is much poorer for a similar level of urbanization that Asian and Latin American nations reached decades earlier. In 1993 this WSJ analysis and graphs show the Asian emerging economies and sub Saharan Africa had similar GDP per capita of $2415, by 2019 this was $4000 for Africa and $12,000 for Asian emerging economies. Latin America was at $10,000 in 1993 and in 2019 was at about $15,000. The gap widened considerably between Asia and African countries. Asian emerging economies increased GDP to 5 time from the same starting point as Africa in 1993, Africa doubled GDP over the period of 25 years to 2019. Latin America started from a much higher point and increased GDP by only 50% over 25 years. Asian economies that performed better over this period did better because of stable even entrenched governments such as in Singapore with Le Kuan Yew and in China with stable successive governments under CPC leadership of prime minister Deng. The difference in Asia was a commitment across all classes and groups to development, a sense of development as a way to make up for the years lost under colonialism of foreign powers in the eighteenth and nineteenth centuries. A sense of correcting historical injustice and wrongs. This is a missing ingredient in the processes unfolding in Latin America and Africa in the last 25 years. ...

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President Obama's proposal on Dec. 17, 2012, in the fiscal cliff negotiations sets the figure at which Bush era tax cuts are permandently extended at $400,000 instead of the $250,000 in earlier proposals. Speaker Boehner's Republican proposal was for a figure of $1 million. The $400,000 proposal would mean that the top tax bracket of 35% would increase to 39.6%. Currently the tax rate increases to 35% from 33% at the cutoff point of $388,500. The White House plan now cuts spending by $1.22 trillion over 10 years. $800 billion comes from cuts to programs, with half of these cuts in federal health care programs, $200 billion in programs like farm price supports, $100 billion in military spending, and $100 billion in other domestic programs over which Congress has control. The White House proposal also supports additional spending on infrastructure, extension of expiring unemployment benefits, protection of "vulnerable populations" such as the disabled and wounded veterans on Supplemental Social Security benefits in inflation calculations, and permanently stop expansion of the alternative minimum tax affecting the middle class. On business investment the president's proposal would make permanent the credit for corporate research and development....