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A shift in priorities away from focussing on high growth to lower sustainable growth was announced by China's premier Wen Jiabao at the National People's Congress, China's parliament, in March 2012. This shift will reduce investment in infrastructure, power generation and exports, which will affect the level of imports of commodities from commodity producing nations in the Middle East, Australia, Canada and Brazil. It should increase imports of software, computers, entertainment, tourism and high tech goods from the U.S. and Europe. Chinese leaders have said they would make this kind of shift for some years now but growth has consistently increased more than the target rate, and domestic consumption as a percentage of the economy has actually decreased in the last decade. Now 9-10% growth rates may be a thing of the past and the target of 7.5% set this year may be actually closer to the real figure. The Chinese leaders have belatedly realized the need to make these changes now because slowing markets in Europe -which is seeing declining growth and high unemployment- and in the U.S., make the issue impossible to avoid. Wen told the Congress: "Accelerating the transformation of the pattern of economc development... is both a long term task and our most pressing task at present... Domestically it has become more urgent but also more difficult... to alleviate the problem of unbalanced, uncoordinated and unsustainable development." This is his way of saying that its unavoidable and better to start in earnest now, and at the same time recognizing the resistance to change from the stateowned companies and the other interests who have benefitted from surging growth, and now occupy a central role in the power structure. An opinion article in the People's Daily, China's official newspaper, said: "imperfect reforms are to be preferred to a crisis caused by no reforms." The World Bank's president Zoellick is respected by the Chinese leaders. He also urged them to make changes now. The recent report of the DRC, China's planning research arm, and the World Bank, also laid out the new direction away from a focus on infrastructure to domestic consumption. The fear is sudden deceleration in the absence of policy action. The impact of this will be negative for commodities over time, leading to slower growth in Australia, Brazil, and Canada. It should boost imports from Europe and the U.S. of high tech, consumer, pharmaceutical goods over time....

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Criticism of the EU's handling of the Greece crisis by IMF officials in a report. The report says the actions taken for debt restructuring in 2012 should have come much earlier to reduce the debt burden and the size of austerity measures in Greece. Similiar criticism has been voiced by president Hollande of France and in editorials by the WSJ. President Samaras of Greece says the sharp cuts in spending reduced potential for growth in the economy.

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Results of a CBS New York Times Poll of 1018 adults in the U.S., reported Feb 28, 2006. Results show 55% showed support for gasoline tax if it reduced dependence on foreign oil, 59% showed support if it also reduced global warming. There is additional support if the money is used to fight terrorism, allocated to specific projects such as electric cars, or help low income people with extra gasoline costs. The important distinction in the results is what respondents were asked. When told about their response to a gasoline tax 85% of respondents opposed it, but when told it would reduce dependence on foreign oil 55% support it. Some respondents want to see it earmarked so that its use would reduce dependence on foreign oil through fuel efficiency improvements. The gasoline tax has remained at 18.4 cents a gallon since 1993. Politicians see the 85% and stay away from the issue and at periods of higher oil prices there is more concern about the impact on consumers. Prof. Borenstein, director of an energy institute at the University of California, Berkeley, says his calculations show a 10% increase in gasoline cost would reduces consumption by 6-8%. As the tax is regressive by putting a higher burden on low income consumers, this should be offset by income tax relief that would make middle and lower income people better off , says Prof. Borenstein. Some of the revenues would be used to support projects at automakers and research universities to develop more fuel efficient technologies for automobiles. Shows support is there if the tax and where money is spent is shaped in the right way....

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Keith Bradsher visits Guangzhou, China, just as prime minister Wen Jiabao tells the National People's Congress that China is changing its priorities from high growth to sustainable development. As recently as 2007 GDP growth reached 14%! The minimum wage is expected to rise 13% each year under the five year plan. Even with the increase in wages owning an apartment is unaffordable in Guangzhou- a 1000 square feet apartment costs upward of $300,000, showing the extent to which the bubble in real estate prices affects young people who cannot afford to own an apartment. A new graduate with marketable skills such as computer engineering makes about $6000 a year, putting owning an apartmet beyond reach. Another change he notices today is that during visits to construction sites he does not see flood lit sites at night. This used to be the case because builders were scrambling to build. With government policies discouraging the property bubble there is no longer a need for work at night. The focus now has shifted to build low income housing....

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Christina Romer, Prof. of Economics at the University of California, Berkeley, was chairwoman of the Council of Economic Advisors under U.S. president Obama. Here she discusses the different aspects of the debate on raising the minimum wage. Romer says the negative effects on unemployment are small. The impact on consumer spending is also limited. The anti-poverty effects are real for raising the minimum wage from the current $7.25 an hour, says Romer, as over half the families earning a minimum wage make less than $40,000 an hour. President Obama called for raising the minimum wage to $9 an hour in 2013. Studies show 13 million U.S. workers earning less than $9 an hour. Raising the incomes of these families by about $3500 an year under the president's proposal gives workers badly needed income to cope with rising cost of gas, food and other basic necessities. The effects on consumer spending are small, estimated at between $10 to $20 billion. Its main virtue is keeping the principle of fairness and maintaining social cohesion at a time of increaing inequality. Romer says there is competition for workers which makes it possible for workers at the lower end to get a fair wage, but does not account for the effect of high unemployment which takes pressure off raising the minimum wage in the market economy. Another benefit for countries of keeping a fair minimum wage is that other actions can be taken to improve competitiveness for business and manufacturing and reducing the deficit and be seen in a positive context of overall improvement. This is part of the case made in Europe for boosting the mnimum wage as austerity measures are taking place....

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The Editorial Board of the Washington Post draws attention to the speculative bubble in housing in China, the policies for sale of land by local governments that fuel the bubble, the corrupt local officials, and GDP growth that reflects overinvestment in housing creating serious imbalances in the economy. The structure of the economic and political system which promote this overinvestment in real estate has also reduced the role of the Chinese consumer in GDP growth, and is preventing a rebalancing of the world economy.

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The U.S. Census Bureau shows incomes of American households, the median household income, surged in 2015 by 5.2%. This increased by $2800 to $56,500. This is the largest increase since 1967. It shows that steadily improving employment and hiring is leading to improvement in incomes for the middle and working class. Ris in minimum wage has also helped . The largest increase was for the lowest 20% of the income tiers. Full time working women did better than men, with increase annually of 2.7% for women, and 1.5% for men. Nocitizen incomes increased 10.5% to $45,100, native born households went up 4.4% to $57,200. The number of people without health insurance also declined from 33 million or 10.4% of the population to  29 million people or 9.1%. Another way the changes are helping lower income households is the decline of the official poverty rate to 13.5% in 2015 by 1.2 percentage points from 14.8% in 2014. Through a series of small incremental steps the path is being set for a recovery of household incomes for the middle class and working class. A bright spot is that the improvement has affected all age groups, household types, regions and ethnic groups, though among full time workers women did better than men. In this recession older white men have had more difficulties getting back into the workforce. This is reflected in the political scene in 2015-2016 for the election season. ...

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Pulliam and Demos look at the murky world of pre IPO trading of shares by venture capital companies and by employees of the pre-IPO companies in the secondary market. Federal and state laws permit pre-IPO trading for unregistered securities. The SEC has not issued more than a couple of enforcement actions for the trading of pre-IPO shares from startup companies. Wealth is now created before an IPO is done. During the 2000 tech boom most of the surge in price happened after the IPO- Amazon's IPO giving the company a valuation of $400 million based on IPO price then, compared to $171 billion in 2015, and Facebook worth $104 billion at the IPO price in 2012, and twice that in 2015. 78 privately held companies are worth over $1 billion in 2015, with combined valuation of $310 billion. The surge in prices of pre-IPO shares comes from the huge demand from investors, who are willing to accept that not much financial information will be disclosed by the startup companies, in the hope of quickly earning a large profit. The estimates of pre-IPO trading for the shares is in the range of $10- $30 billion in shares traded in 2014. This is what the WSJ's Puliam and Demos learned from extensive interviews with traders, investmetn bankers, hedge fund managers, venture capital executives, lawyers and company officials....

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The Washington Post's Lally Weymouth interviews prime minister Enrico Letta of Italy. Letta makes it clear that he sees his mission as restoring confidence in Italy by putting a younger generation in charge in Italy. He describes the Italy he sees as breaking free from the old ways, breaking free from the geriatric Italy where the professors are old, the politicians are old, and where the old ways prevail. Letta is pro-European and sees his major priorities as keeping the credibility of financial markets and economic growth.

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The Obama administration's proposed budget for fiscal 2013- for the year beginning Oct. 1, 2012- shows the budget deficit for the year at over $1 trillion. It shows new revenue of $1.7 trillion over 10 years mostly from ending the Bush period tax cuts on families earning more than $250,000 a year, restoring the estate tax to the 2009 level and limiting subsidies for oil and gas companies. It proposes raising the tax rate on dividends from 15% to as much as 39.6%, for households earning more than $250,000 a year. This measure is expected to generate $206 billion over 10 years. The budget also offers "principles" for future tax reform by proposing the Buffett rule replace the Alternative Minimum Tax (AMT). The AMT was not indexed for inflation so it has the weakness of putting more middle class taxpayers into AMT, leading to temporary solutions by Congress. The Buffett rule would have people earning more than $1 million pay a tax rate of at least 30%. Many wealthy Americans like Mitt Romney paid lower taxes using deductions to lower tax rates- Romney's tax disclosures show he paid effective tax rate of 14%. The White House says the budget will reduce the deficit by $3 trillion over 10 years through the new taxes, and small changes to Medicare and Medicaid and other spending cuts. This is in addition to the $1 trillion in spending cuts agreed to in a deficit reduction agreement in 2011 between Democrats and Republicans in Congress. The budget proposal proposes investment in education and transportation projects of $137 billion, and continuing through Dec. 2012, a tax break for businesses to increase investment. It includes mandatory spending of $2.7 billion for new community college programs, $6 billion to modernize schools, and $1.8 billion to make homes more energy efficient. It also increases the resources of the Securities and Exchange Commission and the CFTC (two agencies overseeing the banks), $26 million for a new Interagency Trade Enforcement Center to counter unfair trade practices, and cuts U.S. postal delivery to 5 days a week. The result is a program designed to be balanced in terms of economic fairness, making modest investments in the future for education and energy, continuing policies to stimulate growth, and extending the date for bringing the deficit under control to 2018 instead of 2014 as planned earlier....

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The participation of Islamist men who did a lot of the hard fighting against Gaddafi with secular leaders in the new government of Libya. Islamist leaders complain the west does not understand them and their aspirations for freedom above all else. One Islamist leader says westerners think we want to lock up our women in boxes. See the amazing account of Belhaj in an interview with Nordland of the New York Times, Sept. 1, 2011. Belhaj is an Islamist who led the rebel fighters into Tripoli and was appointed head of the administration in Tripoli. He tells Nordland he is grateful to NATO for its help and holds no rancor for the past.

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The Obama administration is pushing for new U.S. fuel efficiency standards of 56.2 mpg by 2025. In May 2009 President Obama announced domestic car and light truck fuel efficiency standards of 35 mpg by 2016. Europe is expected to reach fuel efficiency of 60 mpg by 2020. This would still leave Europe considerably ahead of the U.S. in fuel efficiency for automobiles, but the gap would be much smaller. For the last several decades the U.S. has fallen sadly behind Europe and Japan in fuel efficiency. The perception of poor fuel efficiency hurt the automakers badly during periods of high fuel prices and when buyers were facing difficult economic choices. The automakers are beginning to grasp this fact. Mark Reuss, president of General Motors, commented that- "it's very challenging, but its upto us engineers to provide high value to the customer and support the environment." This is an issue that has serious national and global implications as it affects the future prices and demand for oil, emissions, and future economic growth. It would also bring the U.S. in line with Europe and Japan when it comes to fuel efficiency of automobiles. ...

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Friedman on the ouster of president Morsi after only one year in office following large scale protests. He sees this as the beginning of a fallback of political Islam, with the protests of secularists in Turkey, the shift to a moderate candidate Rouhani in Iran's presidential election, the shift of the Emhada Islamist party in Tunisia to work with center-left parties in writing the constitution, and the election of a western educated political scientist to lead a coalition government in Libya. In each country the secular and liberal leaders and the young people felt the revolution was being stolen from them by Islamist parties and are asserting themselves to gain a voice in government. The Islamist party in Egypt has older leaders, an authoritarian structure and hierarchy, which failed to incorporate liberal and other opinion in writing the constitution and in forming the government. A more tolerant and open Islamist party needs to be part of a broad based government with other parties, which can focus on the economy, unemployment, infrastructure and public services....

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Germany's finance minister, Wolfgang Schauble, says Germany can move faster than expected to allow shared liability of eurozone debt. He also accepts the need for short term measures such as the European Stability Facility buying bonds of Spain and Italy in private markets to drive down yields. Schauble indicated this flexibility in an hour long interview with the WSJ on June 27, 2012. This comes after Angela Merkel's remarks made in talks with coalition partners the Free Democrats that she would not accept any mutualization of debt in the eurozone in her life time. Schauble reiterated his view that before joint liability of debt can take place there has to be a joint EU fiscal policy, and sequencing was critical. He called for a EU fiscal commissioner arrangement for reviewing EU member budgets and policies. At the same time he said Germany was open to some level of mutual financial support between members of the eurozone, under the right conditions.

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Germany opposes aggressive buying of the bonds of Italy and Spain by the European Central Bank. Prime Minister Zapatero of Spain calls on the ECB to take action as Spanish bond yields reach 7% on Nov. 17, 2011. Germany sees the crisis as serving a constructive purpose as forcing the fiscally unstable countries to make changes.

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The CDU convention in Leipzig, Germany passed a compromise resolution that lays the ground for a EU country to voluntarily leave the euro zone and still maintain membership in the European Union. The resolution called for changes to the Lisbon Treaty to allow a euro zone member that is "unable or unwilling to permanently obey the rules connected to the common currency... to voluntarily... leave the euro zone without leaving the European Union." Merkel told delegates that Europe must change the EU treaty to allow for strong automatic sanctions for violations of the monetary union treaty. "We need to send a clear signal. We don't whine; we don't complain. We know instead that we have a job to do." On the issue of voluntary withdrawal from the eurozone, the earlier decision by Merkel and President Sarkozy of France- when prime minister Papandreou of Greece decided to put the issue of membership to a referendum- was to tell Greece that leaving the eurozone would mean leaving the European Union. This CDU resolution provides a basis for Greece to resolve its debt problems outside the euro currency, as experts suggest....

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European Central Bank president, Mario Draghi, addressing the European Parliament in Brussels on April 25, 2012, supported both sides in the issues facing the eurozone, calling for continued vigilance on structural reforms to improve competitiveness of countries in the eurozone such as Spain and Italy, and at the same time saying it was imperative to generate economic growth. He told the European parliament: "The uncertainty about the present situation is very, very, high... Any exit strategy is premature given the current economic situation." Saying that the fiscal compact had been negotiated recently to control spending, yet what Europe needed was also a growth compact- "but my most present thought right now is to have a growth compact." He emphasized that it was now upto governments and banks to pick up the ball. The ECB's achievement was buying time with its 3 year loans to banks in Spain and Italy and other EU countries in Dec. 2011-March 2012, which he described as no ordinary achievement. Francois Hollande and Angela Merkel seized on Draghi's comments to show they were doing the right thing. Merkel conceded that growth was needed, saying sustainable initatives would be good for Europe, that what Germany was opposing was simply stimulus spending that would increase debt without the structural reforms to improve competitiveness. Hollande for his part said he would call for eurozone bonds to pay for industrial and infrastructure projects, and a financial transactions tax....