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Andy Grove of Intel teaches a class at Stanford- he taught aclass earlier this year- and talks about his experiences. Some see Grove's disciplined management style as areflection of his experience escaping the Nazis from Czechoslovakia. Dr Grove says it comes from his experience at the CIty COllege of New York He recounts this in one of his books, where aparticular Professor helped mentor him but who was in the beginning very tough on the young Grove. Grove says that what impressed him most in those early years at City College was the way hard work and talent were rewarded and where students challenged their Professors without any attention to rank. Interestingly this is still true at many universities, and meritocracy prevails there. The opposite is true when one thinks of this at many corporations which gradually fall into astultifying mode where senior managers are not challenged and politics prevails. GM is a good example. Grove says he experienced this at Fairchild -where he worked with computer chip pioneers Moore and Noyce -with its elitist, back-stabbing and lax corporate culture. Senior executives at Fairchild walked in whenever they felt like, and younger employees were penalized or fired for similiar behaviour. When he took charge at Intel Grove imposed a strict arrival time of 8 am with latecomers forced to sign asheet. He also did not go along with trends like flexi-time and teleworking. He became known as ablunt and demanding manager, but afairminded boss who rewarded good ideas whatever the source. Asked about the strict arrival time Grove says that people don't understand that he was never that disciplined himself and he was not even amorning person. His view is that he wanted to avoid what he saw as aoutrageous double standard at Fairchild. With a better culture he was able to attract the best talent to Intel, and he used the strong discipline to improve the lousy manufacturing at Intel. Three decisions shaped Intel. The first, is the recognition of the strategic inflection point when current strategy is no longer viable, because unanticipated external forces make an existing business strategy obsolete. This happened when Intel got clobbered by the Japanese in the memory chip field it had dominated. And at such moments there are internal forces and inhibitions to overcome that make starting over or doing something totally different extremely difficult. For Intel this was the habit forming tendencies from having done one thing so well- the companies roots and the founders and engineering staff's knowledge and preferences lay in memory chips- such that that it became an emotionally stormy thing to break from this past. Grove made a complete U turn to go in another direction which he describes so well in his book -Only the Paranoid Survive. Timing is critical, and instinct and judgement is all that you have got to rely on. Its like a group of hikers in the woods and after suspecting that they are on the wrong track one of them says, "Hey guys I think were lost." Grove even describes the scene with acomparison to a scene in the World War II movie Twelve O'Clock High, where a new commander is called in to straighten out an unruly and undisciplined squadron of fliers in sel-destruct mode. The commander on his way to take charge, stops his car, steps out smokes acigarette while gazing into the distance. Then he he throws the cigarette down, grinds it with his heel and tell his driver "Okay Sergeant, lets go." Grove says he related to this scene in this decision at Intel, with every fiber of his being experienced this crisis personally, and learned what it takes to claw your way through a strategic inflection point, inch by excruciating inch. He says it takes objectivity, the willingness to act on your convictions, and the passion mobilize people into supporting those convictions. The second and third decisions was less gruelling but also courageous. The Intel Inside advertising campaign meant building abrand with customers even though Intel had never done this before. The decision to not have secondary suppliers and press the issue of manufacturing quality within Intel till Intel got it right also had never been done before. Andy Grove's strategic inflection point is what GM missed and set the process in motion towards bankruptcy. See the links in Intelilinks. The management style is also relevant to that discussion. Grove also provides insights in the Cross-Industry Insight Mechanism. He sees strategic inflectionpoints in autos and health care industries. He says the auto industry is going to be increasingly divorced from oil and the next big company will come in the auto battery technology field. He also believes health care and the pharmaceutical industry can learn from chipmaking. The clinical trials in pharmaceuticals take way too long, are slow-moving and bureaucratic. The pharmaceutical firms can learn from the fast "knowledge turns" in chipmaking, so that cycles of learning are accelerated....

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Germany's chancellor Merkel sees Britain as necessary for Europe and the European spirit. This even though she has differences with British prime minister Cameron on how to elect the new president of the EU following EU parliamentary elections in May 2014. She told the German parliament in June 2014- "Britain is really no cozy partner. Yet Germany and Britain share values and interests. I consider it grossly negligent, in fact unacceptable, how easily some people say that it is really all the same whether Britain goes along or not, or more: whether Britain remains a member of the European Union or not."

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The Chinese Academy of Environmental Planning, under the Ministry of Environmental Protection, has estimated cost of pollution in a new study of the costs of environmental pollution in China. The cost is estimated at $230 billion for 2010, or 3.5% of GDP, and close to 4 times the cost in 2004, showing the rapid degradation of the environment from rampant industrialization. The first such estimates were made in 2006 and since then come out spradically from the Environment Ministry. For 2004 the Environment Ministry estimated cost of pollution was $62 billion, for 2008 partial cost estimate was $185 billion. Even the $230 billion figure fo 2010 is incomplete say researchers. Only after strong public protests over Beijing's air pollution have government officials allowed candid reporting on environmental costs. Environmental costs extend to food contamination. A report on China Central Television recently said farmers in a village in Henan province used wastewater from a paper mill to grow wheat, which was then sent to cities as farmers in the village grow wheat for their own use from well water. A Deutsche Bank report in Feb 2013 says there will be a continuing decline in the environmental degradation for the next decade under current policies, higher coal consumption and growth in automobiles....

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The Hulme Company mail order catalog business in Minnesota may not be representative of small business, considering the errors and the scale of the debt taken on. But even if a small fraction of this debt taking tendency is representative of small business, it means that small business will not generate jobs as it did in the past. Small business will actually layoff people. And small business will not be able to provide the bounce the economy will need in years to come. The following is an an anaysis of this venture. The owners of this small business Bidwell and Ms. Guarino bought a luxury goods maker that was losing money for $600,000. Their business was to sell $500 garment bags and $1200 duffel bags. The experience of Bidwell was with Target, Tonka Toys and a cigarette distributor. Ms Guarino had a $130,000 job with a magazine publisher, running regional magazines like Minnesota Parent, which she quit. She had some experience as a handbag designer in California before that. They had never seen hard times, no, they had only seen good times. And were willing to spend heavily on the business like the $600,000 for a business, Hulme Company, that lost $150,000 on sales of $450,000 making duck hunting gear, the business they bought in 2003. All this for a tiny factory employing 3 seamstresses, and with no brand name for luxury goods like leather duffels. Their lender's experience- Kassim who founded Maple Bank in Champlin, Minnesota, considered it pretty typical of small business in those days to do everything on debt and loaned $550,000 over 5 years. So the lender was in for the ride. Another bank Stephens bank loaned on SBA approved loans which were later cut off. Guarino had no experience in this business, and simply relied on Bidwell's experience. The borrowing went on and on from friends, taking in debt with total lack of understanding of what debt means, from their daughter, the entire $50,000 savings of Bidwell's wife, and finally with banks refusing to lend after having friends put up their CD's and collateral on loans. Debt to equity ratio gets to 5 to 1. Second mortgages on the house getting Bidwell and extra $130,000. Even in the best year 2006 sales at $1.4 million, and earnings before taxes and other items at $325,000, not enough to pay the interest and other payments on loans that later totaled $2 million by year end 2007. $500,000 from friends and family including $20,000 from his daughter or two thirds of their savings. 600,000 catalogs went out in 2007. With the Hulme Company behind on payments in 2008, the catalogs mailed in 2008 dropped to 175,000. It is a very capital intensive business from the standpoint of catalog cost. $1 million in inventory at year end 2007, or two thirds of sales of $1.5 million in 2007, was a sign of how expansion preceded even getting the financing in place, and going out into the dark thinking sales wil materialize. So even in the best year 2006 the business was not viable, and would have collapsed even without the financial and credit conditions of 2008, ruining the owners in the process. By 2008 it led to the usual things in this kind of business failure, Bidwell's divorce, loss of his home as he falls behind on mortgage payments, Guarino's loss of job and friends whom she borrowed from, and both deeply in debt. Evaluation of the failure is as follows. Seamstresses and the small factory space could be obtained for a fraction of the cost in an emerging market country, even in an eastern European country, and no cost needed to be incurred for the purchase of Hulme Company or for sending out catalogs. Only travel expenses to meet high end retailers who might carry this merchandise, and go to the country where the plant was setup. Sales would come first, and expansion to meet sales very carefully done so that the plant could be downscaled if sales dropped. Even then scores of small luxury goods makers in China or other emerging market countries could put the owners out of business. The lesson if you can't watch costs, if you don't understand what debt means, then you don't pass the most basic of tests. You cannot run business on savings, home equity or credit card loans, or business loans with personal guarantees. Costs tend to just run up to the money one has artificially created. It will ruin you. If you don't have experience with the business and the product area, or can't put together a group of people with the experience to guide you on the pitfalls and what to watch for, you don't pass the next basic test. Only then does one get to the other tests about whether there is a market, the price and value of the offering and so on. This is before the current economic crisis. Now all these tests become more important than ever, or it will kill you and quickly. One has to be paranoid and very careful after 2008. Stephens Bank loaned money on SBA loans ...

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Speaking at the Economc Club of Indiana, U.S. Federal Reserve chairman Bernanke, says responsibility for fiscal policy lies fully on Congress and the administration. Monetary easing through QE I,II and III, which reduces the borrowing costs of the U.S. government by keeping interest rates low, cannot be seen as taking pressure off Congress and the administration, as critics claim. He countered criticism by saying: "Suppose notwithstanding our legal mandate, the Federal Reserve were to raise interest rates for the purpose of making it more expensive for the government to borrow. Such an action would substantially increase the deficit, not only because of higher interest rates, but also because the weaker recovery that would result from premature monetary tightening would further widen the gap between spening and revenues." Lawmakers would be no more inclined to come up with a program to reduce the deficit in this situation argues Bernanke. This statement of Bernake only reaffirms that low interest rates are an important goal here in the U.S.,- just as they are for France and other countries in Europe that are faced with tackling large debt and deficits- and are part of the overall solution for the government to manage its finances....

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Serious issues with China's export of drug and food related items. The same is true for the domestic use of drugs and food which has been contaminated by hazardous chemicals. Zheng eas head of China's FDA from 1998 to 2005. China is reviewing some 170,000 production licenses issued during this period.

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As Britain goes to general elections in May 2015, one of the issues in the election will be new referendum on membership in the European Union promised by prime minister David Cameron. Cameron has said he will negotiate a better deal for Britain in the EU and hold a referendum by 2017. The last referendum was in 1975, in which two thirds of voters supported membership in the EU. British disapproval of the EU has increased with immigration from newer EU members since the 2008 financial crisis, and increasing unemployment. Some recent polls show 42% voting to stay in the EU, and 39% opting out, suggesting a close vote. Negotiations for better terms mean treaty change, which would be opposed by France. Germany's Merkel also opposes changes on the immigration rules that do not allow free movement of labor. Other EU leaders see Cameron's moves on the EU being an effort to counter the UK Independence Party's push for EU exit, as the UKIP could draw Conservative right wing voters in the 2015 general election. ...

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Ghannouchi of Tunisia's Ennahada Party puts forward ideas for a pathway that Islamists could follow to integrate into the political life of Middle Eastern countries- compromise, working together with non-Islamist parties for the common good, focussing on economic development, pursuing moderate Islamist ideas, bringing in those excluded from the political process thorough a new inclusiveness, and respecting the opposition. He sees the successful election in Tunisia in which Ennahada worked with the opposition parties to ensure a smooth transition, as a model for other countries and the Arab neighborhood. In 2014 another process of smooth transition after elections, and respect for the opposition, happened in Indonesia with the election of Jakarta governor Widodo to be the new president. This set another model of respect for democracy, fair elections, respect for the opposition, focus on economic development and inclusiveness, for Muslim countries in another part of the world. Pakistan is another Muslim country which is working to create a model in the presence of much violence from Pakistan Taliban, and interventions by the military in politics. Assistance from the U.S. helped Iraq make the transition under the Bush administration till it unraveled with the policies of the Obama administration. Libya had the potential to make the transition with continued western cooperation and support- a change in administrations in the U.S. and France resulted in policies not supportive of a stable transition. The whole process now needs to be fostered carefully by western liberal democracies. Here Ennahada's Ghannouchi tells the world about the lessons learned by Islamist parties themselves for pathways to embrace for more inclusive societies focussed on economic development and progress....

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Laurent Berger, head of the French Confederation of Labor, C.F.D.T., is a moderating force in France as president Macron leads an effort to make a revision to France's labor code. With a large parliamentary majority president Macron is expected to push for a shift to a Scandinavian version of "flexible security," that allows companies and the economy to adjust the work force, introduce retraining and create flexibility so that new jobs can be created. His union is now the largest, after surpassing the militant General Confederation of Labor. Issues in labor changes proposed by president Macron are- direct negotiations between management and employees bypassing unions, and a cap to compensation in unfair dismissal cases. Berger's view is that though the interests of labor and management conflict, there has to be dialogue instead of constant confrontation. He is willing to see some jobs lost if business creates new jobs with improvement in the economy. Macron has summoned labor leaders for marathon talks. ...

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Goldfarb says everyone is focussed on the "fiscal cliff," yet there are other issues which when put together could lead to a drop of 1 percentage point in growth and add a million people to the jobless. The temporary payroll tax cut for 160 million workers was setup in Dec. 2010. The payroll tax which funds Social Security is 4.2% since then, down from 6.2%, adding about $1000 for the average family to spend. The unemployment insurance benefits which expire for millions of people will also have an impact. As will the $60 billion in spending cuts on domestic and defense spending under an agreement made in the summer of 2012.

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Bernanke in reflections on his policies for quantitative easing in response to the 2008 financial crisis, says the policies were intended to protect Main Street and the average American, even though this is not readily apparent. He says the policies did not lead to inflation as critics have stated, and one has only to look at today's inflation statistics to know this- referring critics to the government CPI report in Jan 2014 that consumer prices went up by 1.5% in 2013 and less than 2% for 2012. Bernanke says he hopes he took the right actions, and still retains the conviction that the American economy will recover losses from the 2008 financial crisis- even though the answers to this questions won't be seen for some time.

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India's central bank chief, Raghuram Rajan, points to the risks for developing economies from changes in monetary policy of the U.S. Federal Reserve. The Indian rupee lost about a fourth of its value in 2013 as the U.S. Fed announced plans to withdraw from its quantitative easing policies. Large depreciations in other developing economies, Indonesia, Turkey and Brazil, happened at the same time. Rajan and India's Reserve Bank increased the interest rate by half a percentage point in 2013 to deal with the impact on inflation as a result of the large depreciation of the rupee. The volatility of capital flows and sudden reversal in inflows of capital to developing economies leaves these countries exposed to sharp declines in economic growth. India's growth has slowed to 5%, larger than expected from the slower growth in the global economy in 2013, largely as a result of decreases in direct foreign investment and capital outflows.

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Bernard Lewis's "The Arabs in History," is a short book which confirms Zakaria's point about the openness of Islamic societies before the 19th century, with some exceptions in certain periods. Most books or a quick look at Wikipedia shows us that the Renaissance in Europe in the 15th century got its boost from books by ancient Greek authors that were available in Arab societies long after they were forgotten in Europe. His point about Indonesia and India is also true to a large extent except for periods such as the one under Aurangzeb (17th c.). Muslim societies in British India (todays Pakistan and Bangladesh) experienced less social and educational reforms under the British than Hindu societies for various reasons leading to larger backwardness, illiteracy which breed extremist ideas. This is likely to change throughout North African Arab societies and South Asia in the next 50 years, especially with the modernization drive underway in India, which is likely to spread to other parts of the region. Islam as a missionary religion with force of arms spread in the 7th-9th century rapidly over Arab North Africa and parts of west Asia, and later to South Asia. Once established there were long periods of openness to ideas and books, and different cultures ( with the exception of preferences for Muslims), and a stress on commerce which inherently reduces religious vehemence, as the example of Britain shows. For this reason the current conditions in Islamic societies is more atypical than typical. A factor that has worsened it is that 19th c.-20th c. Islamic societies have put less emphasis on commerce and industry than historically seen in prosperous Islamic societies, on which more research is needed to understand why. Another factor is the impact of the interface with technologically and scientifically progressing Europe and America not becoming a learning experience for acquisition of this science and technology and making it one's own, a pattern seen in Buddhist societies of Japan in 19th c., South Korea in 20thc.,and China 21st c. Because Buddhism sprang from Hinduism or a response to Hindu ideas in India, India could be put alongside China for the 21st c. rapid assimilation of western science and technology making it one's own. When there is a violent collison between Japan and U.S. Admiral Dewey's ships, or China and British advances around 1900, the initial reaction of rejection is reversed with adoption of western technology and practices making it one's own. Similiar response in India. Islamic societies have had an extended period of rejection for reasons not fully understood even today. This is likely to generate the kind of internal debate about how to revert back to the usual mode of adoption in Islamic civilization, with the potential catalyst in India and other locations in the Middle East. The most respected German of the 19th century is Alexander Von Humboldt, a naturalist who advanced scientific knowledge, and a mentor to Charles Darwin in England, author of "Origin of the Species." Humboldt says- "There are no inferior races, we are all humans, and we are all destined to reach for and grasp liberty." That Humboldt spent most of his best years in Paris, France, which he compared to the provincialism in his native Berlin, goes to show how Humboldt, Darwin and Humboldt's friend Aime Bonpland of France, maintained close cooperation and friendship and anticipated the close cooperation in Europe since the second half of the 20th c., long before European politicians and governments grasped this. Commerce, science, travel, media and free exchange of ideas, are as favorable to progress as politics and ideology is inimical to it....

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Lower amounts for financial aid available offset the lower rise in tution costs to leave students just as worse off as before with large amount of student debt in 2013-2014.

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Brenner of McGill University and Fridson of S&P say the Bernanke Federal Reserve in the U.S. is doing what President Truman and Treasury Secretary Snyder did in the war and postwar years- paying down the U.S. debt as cheaply as possible by inflating the money supply. There are no new monetary insights here, and even though the policy is maintained outwardly as one to promote economic growth and employment, the main focus is to keep the cost of paying down the debt as cheaply as possible with low rates. This hurts savers and retirees earning very little on savings. They cite Bernanke's writings that show he is imitating the policy of the war years when the U.S. held down interest rates and succeeded in doing this for a decade.

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Peter Altmaier is director of the chancellery in Berlin, and is the person closest to Angela Merkel. This report in the Economist points out that Altmaier has played a critical role in steps taken by Merkel- as chief whip in parliament for the CDU during the Greece financial crisis and bailouts, as environment minister implementing the program away from coal based electricity, and in negotiating deals such as the deal with Turkey on refugees, and now with Brexit negotiations. Merkel has asked Altmaier to write her manifesto for the September 2017 election. A member of the CDU's liberal wing, Altmaier is known for being a scholar on German history, especially Bismarck, and a workaholic. Here he is mentioned as a bridge maker for the CDU to the Greens Party and was part of a group of CDU and Green Party politicians who met at an Italian restaurant in Bonn. As the moderates are now dominant in the Greens Party, a CDU coalition with the Greens could be shaped by Altmaier if the election results move in that direction. ...

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In 2010 Chicago Federal Reserve president Charles Evans sugggested the Fed adopt a "7-3 rule"- the Fed would keep interest rates low and credit flowing till unemployment dropped below 7%, and inflation was below 2.5% and not taking off. He modified this to keeping rates low till unemployment reaches 6.5%, as long as inflation remained below 2.5%, on Nov. 27, 2012. In Fed meetings Evans was supported by vice chairman Janet Yellen, with Minneapolis Fed president Kocherlakota and Boston Fed president Rosengren offering similiar proposals. On Dec. 12, 2012, Fed chairman Bernanke announced a position very close to what Evans has suggested. Charles Evans, worked on the staff of the Chicago Fed for 20 years before being appointed president of the Chicago Fed in 2007, at the beginning of the financial crisis.

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Economist Lawrence Lindsey says the Fed has boxed itself and has little choice but to keep interest rates low. Borrowing at the more normal interest rates of 5.7%- which is what it was over the last three decades- and not at the current 2.5%, would mean an increase in borrowing costs for the U.S. government of $800 billion in 2021, says Lindsay. Lindsay bases this on the U.S. debt growing from $14 trillion in 2011 to $25 trillion by 2021, and interest rates going back to normal levels by 2021. Just to put this in perspective Lindsay says it would require all the cuts Republicans and Rep. Ryan are asking for just to pay for the added interest, not even about reducing the size of the U.S. debt. This would be a disaster for the U.S. Treasury, so we're stuck with really low rates. The term used by economists is "financial repression." Savers and retirees will have to put up with low returns. Lowering unemployment is only one aspect of U.S. Fed policy, the other aspect is in the constraints Bernake faces....

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Former U.S. Federal Reserve chairpersons Volcker, Greenspan, Bernanke and Yellen, are together at the International House, on the campus of Columbia University, in April 2016, in a forum hosted by journalist Fareed Zakaria. The discussion covers topics related to the financial crisis of 2008 and its aftermath, with quantitative easing, Fed communication as policy tool, and the gradual increase in interest rates.

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U.S. Federal Reserve chairman Bernanke, says the Fed will keep interest rates low till unemployment reaches 6.5%, as long as inflation remains at about 2%. If unemployment reaches 6.5%, and this is because more people are dropping out of the labor market, he will take this into account. If unemployment stays high the Fed indicated in its statement that it would tolerate a higher inflation of 2.5%, as long as the longer term outlook was for inflation to be at 2%. Bernanke said this doesn't mean monetary policy is on autopilot, because the Fed will watch conditions carefully and will leave room for flexibility- keeping an eye out for new asset bubbles that could develop, and monitoring labor market conditions and inflationary pressures and inflation expectations. If inflation falls well below 2%, or unemployment rate falls mainly because of people dropping out of the labor market, the Fed may continue to keep interest rates low. This policy was announced as U.S. fiscal cliff deficit negotiations continued in Dec. 2012 with one scenario being considered by both political parties being going over the Jan. 1 deadline before coming to an agreement. Bernanke pointed to this, saying "this is a major risk factor right now." The Fed's activist policy in economic policy has given financial markets and business a measure of stability not provided by government and Congress. Fed policy is to buy $40 billion of mortgage securities, and $45 billion of long term Treasury securities for each month in 2013. It will fund the purchases by adding reserves to the banking system, which is to say that it will print money to buy more bonds. This is a major decision by the Fed in that the Fed has shied away from unemployment targets in the past. Bernanke described this action as a new"automatic stabilizer" in the U.S. financial system- if unemployment rises investors know this pushes the Fed's interest rate increases further down the road and would drive interest rates down, if unemployment drops sooner than expected, investors anticipating Fed's rate increases would drive long term interest rates up, to keep stable growth....

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Professors Cole and Ohanian of the University of Pennsylvania and UCLA, provide a new interpretation of FDR's economic policies during the period 1932-1934 and the period 1937-1941, based on their research. This suggests conclusions different from that of Obama advisor, Christina Romer, and Fed chairman, Bernanke about that period. Changes in economic policies under the Roosevelt administration that helped bring wages in line with productivity, reduced strikes, and gradual elimination of the undistributed profits tax, improved incentives for business investment during 1938-1939. Cole and Ohanian, say that by 1941, before the U.S. entered the war, close to half of the increase in nonmilitary hours worked in the U.S. between 1939 and the peak of the war, had already been achieved. And this was primarily the result of the changes in FDR's policies in 1938. They say a similiar opportunity is presented by the proposals of the Bowles-Simpson commission on deficit reduction, by lowering the corporate income tax through simplification of the tax code and reducing or eliminating most tax expenditures. Improving the incentives for business to hire and invest through this and other steps is likely to do more for the economy than the steps tried so far since 2009....