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Spain provides 14 public holidays that are mostly Catholic holidays, and an additional 22 vacation days, which is similiar to the the EU average. Unlike the practice in the U.S. and Britain to have these holidays fall mostly on Fridays and Mondays, in Spain many of these holidays fall in the middle of the week. This disrupts productivity as Spaniards use bridge days or puentes to create long weekends during which many offices and factories are empty, disrupting productivity. Most companies cannot plan for meetings and work because counterparts may be using the bridge days during these holidays, and working with international clients is difficult and hard to explain. Spain's new prime minister is determined to increase Spain's competitiveness, and bring Spain to the level of competitiveness of countries that do well in this measure, including other European and Asian economies. He describes this in his book "En confianza. Mi vida y mi proyecto de cambio para Espana." ("In confidence. My life and project of change for Spain") In his inauguration address he said Spain should correct "the work calendar to make the rights of workers compatible with the competitiveness of our companies." Vacations are a sensitive issue in Spain because tourism generates 10% of GDP and employs 10% of the workers. Alberto Nadal, who addresses labor issues at the main business association in Spain, says a change of mentality is needed in Spain, and doing away with bridges shows Spain is grasping the idea that things should be done differently for the eurozone community of nations. This also shows some of the differences in the Iberian peninsula countries of Spain and Portugal, where the countries are embracing the change and there is less unrest even with high unemployment, as compared to Greece. In Greece the changes are being resisted by politically connected groups, where political parties enjoy little support and there is much unrest, making the project difficult. Mariana Rajoy, Sarkozy and Merkel are from centre right parties in Spain, France and Germany, and have had a close association for years before Rajoy was elected- during EU meetings of centre right parties, as is evident in Rajoy's book. They also share a similiar business and political orientation. ...

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The impact on stock markets around the world of the protests in Egypt. The Nikkei fell 1.5%, the Kospi index fell 1.5%, on Jan 31, and the Dow Jones average fell 166 points on Friday Jan 28, 2011. Oil prices increased by 3.7% to $89.34 during the week of protests in Egypt. The Bipartisan Policy Center in Washington estimates a 5% increase in the price of oil takes away $5 billion dollars from the US economy. Sam Stovall, chief investment strategist at Standard & Poor's Equity Research, says that a boxer rarely gets knocked out by a punch he is expecting, and this could be what starts a decline after the market fought off fears from sovereign debt crises in Europe and interest rate increases in China. What makes Egypt significant? The Suez Canal is ony a 1000 feet wide at the narrowest point. Supertankers carrying oil do not pass through the canal but rely on smaller vessels and on the Sumed pipeline. About 2.9 million barrels of oil a day, 2.6% of global oil production passed though the Suez Canal and the pipeline according to the US Energy Department. Because prices are determined at the margin this is a lot of oil, especially considering the global spare production capacity is only 2.5 millon barrels a day. The immediate impact would be on Europe which gets much of the oil refined in the Middle East and shipped using the canal and pipeline. Egypt is also a major importer of wheat, importing more wheat than any other country. Any increase in imports to placate consumers would increase wheat prices. Already wheat prices are impacted by floods in Australia, a long drought in Argentina, and forest fires in Russia. Inflationary impact of rising food prices has been felt in China, India and other countries....

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Gujarat has a mortality rate of 6.2% compared to 2.8% for India. In total number of confirmed cases Gujarat comes fourth after Maharashtra, Tamilnadu and Delhi, with 21,500 cases. Most of the deaths are in the city of Ahmedabad and mostly at the city's large Civil Hospital. This report in the BBC says the deaths can be attributed to the reluctance of people in the city to go to the Government Civil Hospital because the quality of care is not good. Many patients come to the Civil Hospital only after failing to find a bed at other private hospitals. This means the patients condition is getting worse as he is not admitted rightaway but days afterwards when his condition has deteriorated. The weak health infrastructure of the state and the lack of quality care at the Ahmedabad Government Civil Hospital say experts has led to increasing number of deaths in Gujarat from coronavirus. Gujarat has been known for its improvements in transportation and roads infrastructure. This has not happened with health infrastructure. This situation is being seen also in China where not enough money is being invested for quality health care. Ahmedabad's Government Civil Hospital is one of the largest in Asia providing low cost care to a large population. ...

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Showing how short lived and misdirected were the efforts to use election wins to make the presidency all powerful under Gotabaya Rajapaksa, prime minister Wickremasinghe proposed an amendment to restore the powers of parliament in a parliamentary democracy. Sri Lanka stumbled badly into economic mismanagement with debt pileup and no action till it was too late without the checks and balances inherent in a parliamentary democracy. Prime minister Mahinda Rajapaksa resigned and with protests calling for the president Gotabaya Rajapaksa to resign, Mr. Wickremasinghe a four time former prime minister was brought back to lead the country out of the crisis. Mr. Wickremasinghe returned with an agreement with the president to restore the powers of parliament which were established since the independence of the country in 1948. Mr. Wickremasinghe has support of the western lending agencies and governments in US and Europe as he and an independent central bank governor Nandalal Weerasinghe with many years of experience working with the IMF seek a way out of the economic crisis. A level of transparency that was present in the early years after independence is being restored as the public suffers from energy shortages and 40% inflation. The foreign exchange reserves of Ceylon (Sri Lanka) were exhausted to the point that the country lacked the funds to let oil tankers in Colombo harbor unload oil and be paid for oil supplies. As a lack of oversight is being corrected Ceylonese are beginning to realize the costs of a unneeded war, wild swings in sentiment for and against parties, deconstructing parliamentary democracy and its checks and balances, corruption and economic mismanagement. ...

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For the first time Ukrainian faces doing great work in wartime, staying calm in unbelievable stress, as part of Ukraine Rail, can now be seen. The amazing work done by Ukrainian Railways for helping get refugees to Poland from cities like Kharkiv and Kviv hard hit by shelling, is shown in this Guardian picture essay. On the return trip the trains bring back humanitarian aid from Poland sent by the US and European Union countries. The Ukrainian Railways has 230,000 workers and all of them have remained in the country to operate the trains and train stations in this war and refugee crisis. Many of the trains operate in darkness into stations that are dimly lit. "The soul is torn and the heart aches, as a train driver I see what is going on," says Chumak, 43, the train driver for the Kviv to Lviv trains for evacuation of women, children and other refugees. At the peak 200,000 people were travelling every day going west to Lviv, trains were free of charge for everyone with women and children having priority. In the first 2 weeks of the war 2 million passengers were taken to safety. Shown here also is the train driver Yaroshenko, 36, for Train No. 82  the Uzhorod to Kviv train going to the Slovakian border. During the journey the train lights are turned off near Kviv or anywhere that is dangerous, as he says who knows who might be lurking nearby. He sees himself as part of the Ukrainian war effort. Tetjana, 36, and her daughter Sofia, 5, are shown on a train to Przemysyl in Poland. She worked as a train conductor on evacuation trains till she decided to take the refugee train herself for the sake of her daughter. If tracks are damaged, they are quickly repaired. Territorial defense units protect the key places and bridges so that the risk is reduced, though shrapnel from missile attacks elsewhere can damage windows of trains.   ...

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President Obama in his speech at Georgetown, April 13, 2009, describes the thinking behind the decisions made in the first 12 weeks of his administration- why the actions are not aggressive and overreaching as some critics say, and why they are not timid as other critics have said. This was not a typical downturn of the business cycle, but a perfect storm arising from irresponsibility and poor decisionmaking in Washington, Wall Street and Main Street- in effect several crises colliding for something like an explosion, if not dealt with at once, and with strong action. He says "the key to dealing with our deficit and debt is to get a handle on out-of-control health care costs, not to stand idly by as the economy goes into free fall." The recognition that the crisis itself brings with it new possibilities, the opportunity for coming to grips with and forging a good solution to health care, energy and education issues that were neglected while Wall Street directed investments to areas other than investment in building for the future. To the critics like Krugman, Rosenfeld and others who say that the takeover of insolvent banks should be done quickly before the situation worsens, he says it is not because of any ideological or political judgement he has made about government involvement in banks, but because it is more likely to undermine than create confidence at this point. He goes on step by step, through the process of decisionmaking, first to step in and boost spending vigorously, second to get lending flowing again to businesses and families, strengthening the non-bank credit market for consumer purchases and loans, the housing plan, the auto plan, and the work at the G-20. Then President Obama goes on to project his vision and the road to getting there. The five pillars he sees for the future are: redirecting Wall Street and banking to constructive investments for the future, investments in education, investments in renewable energy and technology to create new industries and new jobs, investments in health care to cut costs for businesses and families, and new savings in the federal budget to bring down the deficit. Obama says he will look for savings line by line in every corner of the budget, and has already identified two trillion dollars in deficit reductions over the next decade. And the goal is to reduce discretionary spending for domestic programs as share of the economy by more than 10% over the next decade. Procurement reform will greatly reduce no-bid contracts and save $40 billion. Secretary Gates is attacking th problem of hundreds of billions of dollars in waste and cost overruns that have bloated the defense budget, without adding to the nation's safety. And education programs that don't work will be removed, and waste, fraud and abuse in the Medicare program will be controlled. Finally, Mr Obama points to the nation's political system as one more reason we are in this perfect storm- "a fundamental weakness in our political system." He cites the putting off hard decisions for another day, scoring political points instead of rolling up up sleeves to solve real problems, an impatience that is only worsened by the 24 hour news cycle, and a short attention span that focusses on the immediate results and on poll numbers. And there is too much responding to the "tempest of the moment until the furor has died away and the media coverage has moved on, instead of confronting the major challenges that will shape our future in a sustained and focussed way." After these 12 weeks President Obama says, for the first time there are glimmers of hope, and way off in the distance can be seen a vision of America's future that is far different than its troubled past. And citing the parable in the Sermon on the Mount about that "house built on a rock", he sees America's house built on a rock, a house for which we use this moment to lay a new foundation, come together and begin the hard work of rebuilding, persisting and persevering in the face of disappointments and setbacks that surely lie ahead. Then he has no doubt "that this house will stand and the dreams of our founders will live on in our time." Its a remarkable speech in its directness, its simplicity in approaching the subject, and its borrowing from the Bible for that story of that house built on a rock, and its Lincolnesque reference to the house that will stand. And more than a speech, it describes a vision, and the set of actions and steps taken and to be taken to get there. ...

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Unemployment hits 9.5% in June, with a loss of 467,000 jobs, according to the Labor Department. The labor underemployment rate which shows not only the unemployed but also those working part time because their hours are cut or they cannot find afulltime job is up to 16.5%. The average length of official unemployment increased to 24.5 weeks, the largest its reached since 1948. Economists say that as other sources of spending power have been lost, employment remains a very significant source of spending power. And employed consumers are also watching their spending as unemployment goes up, and a new frugality sets in.

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Lawmakers in Congress finally get overwhelming bipartisan support behind a plan to help homeowners facing foreclosure. The rate of homeowners going into foreclosure is 8000 a day or 2,920,000 between now and the same time next year, with the burden falling more heavily in some regions or states like Nevada, Arizona, California and Florida, and in states where the economy is weak as in the auto industry states of Michigan, Ohio and Indiana. This took some time apparently as there was some hope a couple of months before that the economy would recover and taxpayer money need not be spent to rescue homeowners and lenders from their folly. Now the economy looks sure to go into a serious downturn and homeowner prices measured by the Case-Shiller index show a 16.5% drop in prices from this time last year. Lenders earlier had balked from reducing the size of the loans and balance owed by lenders as part of their contribution. Now with losses of 40-60% in foreclosure the new federally guaranteed mortgages which require reducing the loan money owed to 85% of current value are looking attractive. The new mortgages are 30 year fixed loans with a federal guarantee. Only borrowers wanting to stay in their primary home are eligible. Borrowers also have to pay hefty fees to save taxpayer money. Buyers who purchase unoccupied properties will get a $8000 refund tax credit. There is some concern that because the bill is fairly complicated homeowners and lenders would not make larger use of it....

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The U.S. unemployment rate shows a surprising improvement. The unemployment rate drops to 13.3% in May dropping from 14.7% in April. Employers added 2.5 million jobs, as states reopen in phases. Hiring was seen in the hospitality, construction and education sectors. This is a piece of good news suggesting that the pandemic is likely to follow a pattern of rapid decline in economic activity and rapid gain in economic activity in 2020, till it gets back to close to the original level in January before the pandemic hit the U.S.  One of the reasons for the rapid gains after steep loss in economic activity is that the errors in preparing for the pandemic led to a loss of crucial weeks before responses were made giving the very contagious virus time to spread. Yet once the response was made in mid March it was coordinated - with U.S. and India acting together, and Europe also moving together with the U.S. The economic response was unprecedented in scale with the U.S. putting in close to 1.5 trillion and the European Union and British response also about $1.5 trillion. Jobs were protected in different ways either by loans to business, or payment of wages by the government or from funds for this purpose. After some vigorous debate the reopening also was done rapidly with regions less affected, and others following soon afterwards even taking some risks so that the economy could recover. ...

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After denying clearances for development projects for three decades, the Indian Supreme Court green bench of Justices Gavai and Vikram Nath clears 118 development projects already delayed for 5 years for pending litigation. 118 projects were cleared, including 15 held up for 10 years, based on the "sustainable development" idea that takes a look at the bigger picture, the aspirations of youth, and the bigger possibilities for renewables and environment with a bigger economy. It shows how India which at one time in 1990 had about the same GDP as China, has today one fifth the GDP of China, and with it lacks the same scale of investment for renewable energy and climate change action that China has because of China's larger economy. In this sense the whole country of 1.2 billion Indians, including hundreds of millions of farmers and urban residents, the Supreme Court and India's institutions, have suffered more than the one lost decade the prime minister referred to in the Budget session of parliament. It is more like three decades since China pushed ahead after 1990. China having suffered from the Japanese invasion and civil war for three decades in the 1920-49 period and three decades of drift in economic direction following 1949. India faced its own period of failed governance that matches the failures in China by 1990. The SC bench stated- "The Supreme Court is flooded with applications after applications, seeking permissions to construct primary schools, public health centers, anganwadi centers, an other public utility buildings in remote areas. Himachal Pradesh is constrained to approach the Supreme Court even for seeking permission to connect villages in remote areas by roads. Needless to state, the citizens residing in the remote areas cannot be deprived of the developmental activities that are being done in other parts of the country."  The Supreme Court called it ridiculous that the states were required to rush to the Supreme Court to do the minimal developmental activities.  That the Supreme Court and other institutions have taken so long to say and do this is itself one of the reasons India has fallen behind China. It will need to accelerate its efforts, in the way that the rest of the country and the world is doing to create an environment in which development can meet the aspirations of the Indian people. Efforts for climate change action can take place at the same time with bigger investment capabilities from the larger economy and advanced technological capabilities. The two can and do go together, a point missed for far too long.  An approach even the US has grasped and is doing under president Biden. The US has gone through its own period of failed governance for four decades of neglect of manufacturing and infrastructure that president Biden talked about in his State of the Union address to the US Congress last week.  Biden now sees the problem itself as an opportunity to get it right. So can India.   ...

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Though tens of thousands of workers in the French rail network are protesting in the streets about changes in the labor laws, the atmosphere in the National Assembly where president Macron has an absolute majority is different. In the National Assembly most of the legislators are young, inexperienced and there for the first time after the recent elections. Most owe allegiance to president Macron and his party En Marche. The labor code changes were passed without much discussion and on a thumbs up or down vote.  Legislators from Mr. Macron's party are seen by older surviving legislators from an earlier period in French politics as arrogant and do not consult with older legislators. The entire sociology of the National Assembly is overturned and presents a complete culture shock, says a leader of Macron's party who selected members for seats in parliament. Three fourths of members are here for the first time, 60% in Macron's party En Marche. About one third never held public office before. These members spend a whole week in parliament instead of the few days during the earlier Assembly. Yet for all the work and enthusiasm these members act as more of a rubber stamp for Macron's policies instead of offering healthy discussion so that policies can be modified where needed to better accomplish the goal of changing the French system where it can be improved. The result is a form of government that critics increasingly see as autocratic. For Macron this means the lack of a process of consultation that could improve legislation and increase consensus, creating larger support for the changes to the labor laws and the pension system. ...

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Italy's political scene is fragmented with two far right parties one the League under Matteo Salvini with a base in the north and the other called Brothers of Italy, under Giorgia Meloni with a base in the south. In Italian politics of the last decade popularity of a party lasts on the right or the left remains for 3-4 years before fading. In sequence after the fading away of Berluconi's party, voters swung to the socialist party, then the party of Beppe Grillo a comedian called Five Star Movement, followed by the League and Salvini on the far right, and now Brothers of Italy. At no time is any such party having at the height of its popularity having more than 20-25% support. Brothers of Italy under Meloni is the newcomer with 23% support mostly in the south, Rome, Palermo, Sardinia.    Brothers of Italy is different from Salvini's party as Meloni is staunchly pro-EU and supports Italy taking a strong stand on Ukraine. The withdrawal of Salvini from the national unity government led by Mr. Draghi, former head of the European Central Bank, and formed during the pandemic, led to its collapse last week. Meloni benefited by being the main party in the opposition during that time, so that it is not clear that if she forms a government after the September election whether Italy will still have a stable government. The difference between Salvini's League with connections to Russia and Meloni's EU positions means far right politics is itself fragmented and the socialist parties are within a point of the Brothers of Italy. Mr. Berluconi's Forza remains a fringe player with 8%. With 200 million euros of EU assistance Italy decided to form a government under Mr. Draghi in a kind of national unity government during the pandemic so that these funds could be managed effectively, and to tackle pandemic related problems. Some of Meloni's appeal may come from broadening her appeal by policies that support nurseries and mothers, the family, and from her working class background in Rome at a time when the pandemic has created serious economic problems for families. Like France Italy is divided with Meloni playing the kind of role Le Pen has in France of being for working class yet facing competition for working class votes from the socialist parties that are close rivals for support. The Five Star and League parties in northern Italy have their own local support base. ...

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Britain's general election results show Conservatives losing their majority in parliament. Conservatives gained 318 seats, but only because voters in Scotland voted tactically for Conservatives to avoid Scottish independence, leading to 19 fewer seats for the Scottish National Party. Labor gained seats in England and Wales. The Liberals added 3 seats. The final tally was Conservatives 318 seats, Labor 260 seats, Scottish National Party 35 seat, Liberals 12 seats Democratic Unionist Party 10 seats, others 13 seats, UKIP 0 seats. Conservatives can form a government only by joining with the Unionist Party based in Northern Ireland to have the 226 seats for forming a government. This election creates questions about the whole idea of Brexit, as a majority of the voters supported Labor, SNP and Liberal Democrats, with a total of 50.4% of the vote, according to BBC, for parties that did not see Brexit as the priority for Britain. Labor 40.0%, SNP 3.0% and LD 7.4%. By contrast UKIP, Conservatives and DU, pro-Brexit together had total of 46.1% of the vote. Any Conservative government is likely to be weak, and according to this report in WSJ may lead to new elections by the end of the year. The high turnout of 69% shows voters wanted to send a message about their doubts on Brexit. A Labor government cannot be ruled out. ...

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The $369 billion climate and tax package that is coming out of a deal arranged by Schumer in the US Senate could be a path breaking action. It would enable president Biden to get close to the climate goals he promised last year of cutting US carbon emissions by 50% by 2030 over 2005 levels to combat effects of climate change. The $369 billion package would get the US to reduce carbon emissions by 40% in 2030 over 2005 levels.  Severe effects of climate change with fires and floods in the US, Europe, and Asia have brought a new spotlight to the issues facing the world and the fact that something needs to be done quickly with the US leading the way. Senator Manchin a holdout because he comes from a coal mining state was a holdout. He was persuaded to join as the new legislation provides for support for transmission lines and other investment during a transition period so that it does not affect the economy in his state. The transition period is now accepted as Europe now looks at gas and coal as a temporary resource following the cutoff of Russian supplies and the US will be shipping more LNG to Europe during this period. The vote for this legislation is planned under reconciliation so that the vice president MS. Harris can cast the deciding vote for Democrats in a 50-50 split Senate. Republicans oppose the legislation. Manchin now says it will reduce inflation. Briefly it will give $7500 to every buyer of an electric vehicle EV, and $4000 for a used EV. It would give rebates for heat pumps that increase home energy efficiency. Billions of dollars would be spent for clean energy industries, and for solar, wind, geothermal, other renewable energy projects. Democrats want to get the legislation through the Senate quickly by next week, and so secret were Schumer's negotiations that most Democrats did not know about it. Coming on the heels of the $280 billion CHIPS and Science bill for $280 billion investment in US semiconductor industry, this will be a big win for president Biden and shows the persistence and patience of Mr. Biden is paying off.   ...

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Vikram Pandit's style at Citigroup after 4 months, thoughful, asking lots of questions, fixing the little things that actually matter a lot, like the unwillingness of some heads of divisions to sit together in the same room, some hiring decisions and new lines of reporting and responsibiity and interaction in the organization structure that call for teamwork, discussion and collaboration. The oldtimers like Krawcheck used to clear lines of reporting are now getting used to the new culture of collaborative working. His style is first to come to grips with issues and not to come to snap decisions based on intuition, such as interviewing at length and asking tough questions at length to Ajay Banga, head of Citi's international group about the extensive defaults in Citi's consumer loan business in Japan. One of his views is that only if you get the foundation right can you talk about vision. Regarding pettiness in management and small grudges, its either going to be a partnership or you're not going to be here. some of his colleagues like James Forense say that they would take substance over form, judgement over form, any day of the week. And while he does not shy away from details like expecting lower level employees to pay for sporting event tickets Citigroup earlier gave out free, and he himself rides the subway sometimes, he has made some of the bigger decisions. Among these, getting capital from outside sources by travelling extensively abroad, urging Citigroup's board to slash the dividend for the first time in 20 years, selling off 2 peripheral units that did not belong and a third Primerica on sale also. And urged by his mentor former Treasury secretary Rubin who also used a note pad and a thinking thoughtful style like Pandit's at Treasury during the Asian banking crisis and the Mexican financial crisis, Pandit has been direct and realistic. He tells Wall Street that the fate of Citigroup is going to be decided to some extent by the duration of the environment we are going through, the twin perils of the debt-market crisis and the sluggish US economy. And that for now issues like these are going to overwhelm our actions. Pandit's father was a senior executive of one of India's leading pharmaceutical companies when the family moved to New York, so he has grown up around business, and is able to ask the question quite sincerely and matter of factly of his managers at the beginning of every meeting. "What are you doing with the shareholder's money?" After which come the torrent of well thought out questions, probing deeper each time, especiually where issues are festering for a long time, and remain unresolved. ...

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The Guangzhou to Wuhan train high speed line covers the 664 mile trip in 3 hours. 42 such high speed rail lines are set to open by 2012. These trains run at 215 miles per hour. Original plans were to build these lines by 2020 but the global economic crisis led to state planners moving the date up to 2012 and allocating $100 billion for this purpose. Moving passenger traffic to high speed rail lines also frees up the existing lines for more freight. Plans are to build an additional 3000 miles of track for passenger and fast freight trains at 155 miles per hour. Practically every seat on the Guangzhou- Wuhan 14 car train was full on a typical day last week, filled with migrant workers going home. What makes building these lines affordable is construction workers who earn less than $100 a month, a national savings rate of 40%, and rising tax revenues.This particular line cost $17 billion to build because of the many tunnels needed for the line. The three hour train actually makes the journey faster than the 2 hour flight to Wuhan from Guangzhou because of faster check-in times. Train stations are built in industrial districts away from the city, in the case of Guangzhou, a 40 minute bus ride from the city....

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The NYT's look at the televised debate between Macron and Le Pen for the presidential election. Macron has this to say in closing about Le Pen's shelving her plans for exit from the European Union compared to her position in the last election. "It's a project that doesn't say its name but entails leaving the European Union. I'm not lying about the goods, you are lying about the goods." Macron says Le Pen is being disingenuous about this, arguing that by reducing French contributions to the Eu budget and by ignoring fundamental rules of the EU such as freedom of movement and the single market, that would lead to a de facto exit from the European Union for France. Lyrarc has shown today on this page how the debate was covered in FR24, DW.com, The Guardian, BBC News, WSJ, and NYT. One of the key questions is what would she or some other candidate such as Mr. Melenchon done differently than Mr. Macron- For the once in a century pandemic? Macron is not faulted by any one for the work done by two prime ministers he appointed for the task. What would she or some other candidate done differently for today's surging inflation, considering that it is happening worldwide? Are their aspects of France's welfare state, and her economy and the currency that are better protected under the European Union than in a situation of de facto exit. The absolute power in the French presidency is something that happened after a weak system of prime ministers and coalition governments in the period between the two wars, and that power used wisely enabled De Gaulle to take decisive steps  over a decade for France in the post war modernization of France. This was a problem for Melenchon with his calls for a new Republic and a new constitution. Yet many of todays problems of decaying communities and once prosperous industrial towns in decay in the north, northeast and the south require a next generation industrial revolution to bring manufacturing back to France and back to the European Union, and large scale investment in France, as is happening today in the US which is confronting the same problem.    ...

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As with so much in life too much of anything is bad. Obsession for dealing with inequality without grasping the potential of new technology and people with skills, has hurt both China and India, with both moving to correct this in the last 20 years. Allowing too much inequality disturbs the balance in society damaging democratic processes and creating new dangers for democratic processes.  Today Piketty, and other Western and Asian leaders are presenting the argument for fairer societies principally because this is the only way to generate the kind of cycle for growth seen after the second  world war in the 1940's, 1950's and 1960's  following FDR and Truman, De Gaulle and Adenauer. At some point the curve for growth simply drops with extreme disparities in society- something that happened with disastrous consequences in the history of China and India in the 1500's and the long descent into colonial or semi-colonial rule. That pattern is documented in Adam Smith's Wealth of Nations. And it is a drop no nation or society would want to repeat because of the immense suffering, and the decline of Asian societies in a social and cultural sense, leading to a closed outlook to science in general and knowledge accumulation behaviours based on scientific observation of Nature over the course of the 17th to 19th century.  Some traces of this in the early stages are evident in the US and Europe which is why all well meaning people and people of goodwill for their countries seek a way out of this endless fracturing, the rural-urban divide, the society blind and morally neutral views of tech, and the starving of resources which benefit the broad segments of society for infrastructure, health and education through the misallocation of resources to other places. In the long run what is important is not the long theories which can fail, but to "Just Do," follow good common sense, do the right thing as Modi has done for women in essentials such as water, toilets, cooking gas, digital bank accounts, dignity, safety, access to education. And what Xi is attempting to do for Common Prosperity in China. And what Biden and Scholz are setting out to do in the US and Germany. ...

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The Guardian sends its reporters along with UN special envoy on poverty Australian Prof. Alston as he spends two weeks in the world's richest country looking at poverty in urban areas.  They look at some of the 55,000 homeless people in Los Angeles, homelessness exacerbated by the tech boom in California that has sent housing costs skyrocketing. LA saw homeless people increase by 25% in 2017. The safety net is not being reinforced as the Trump administration cuts many social safety net programs. Next they visit the Tenderloin district in San Francisco where homeless people can be found at St Boniface Church sleeping in the pews. As the Guardian points out the cuts to social programs disproportionately hurt people of color who make up 39% of the homeless in the U.S. This report looks at the incongruity between the tax cuts that are likely to hurt poor whites who supported the Trump administration, as well as hurt the social protections that are part of today's democracies across the western world. This is most evident when one looks at the European Union. They were put in there in Europe for a reason- fairness is good for all classes, and most of all it protects democracies. Authoritarian regimes arise out of social dislocation from wars, or from lack of social protections and ineptitude of elites. Which is why a Lincoln or a Theodore Roosevelt from the Republican party supported fairness and social protections as much as FDR and Truman from the Democratic Party. The view expressed in this report in the Guardian is that the U.S. may have moved in the wrong direction under the Reagan and Clinton administrations creating the "me first" culture that prevails in the U.S. today. ...

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The share of new mortgage loans backed by the US government through Fannie Mae and Freddie Mac is at 92%. This makes the fast overhaul of the two agencies much more difficult. Treasury Secretary Geithner said last week that overhaul of the two agencies could take 5 to 7 years. The problems with Fannie and Freddie are real. The U.S. government subsidizes mortgages through Fannie and Freddie, encouraging Americans to take on more debt. Their balance sheets pose serious risks in another crisis, as long term investments are financed with short term borrowing. Any losses will be the responsibility of the US government. A recent paper from the US Treasury outlined some of the steps needed to wind down both agencies and to reform the way they operated including- requiring larger down payments and lowering loan limits, and increasing the fees charged for the government's guarantees to be more in line with the risk being taken. Slower reform in this area means additional systemic risks in the event of another crisis....

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The Chicago Board Options Volatility Index has dropped frm a high of 80 last fall around the time of the Lehman brothers collapse, to 30 last week. So has the volatility gone? No one can be sure. Sam Stovall, investment strategist for Standard and Poors does not thinks so. He says history has shown that the rallies in the depths of bear markets are different, because they are almost always followed by a retesting of market lows. The market tends to get adecline after it looks at the fundamentals and any deep seated problems that remain. Stovall's research shows that the market retested going back to 1957, and the average event lowered stock prices 7%, but in the really big downturns like the current one, the S&P went down about 14%, on average. Assuming that the market peaked on May 8 with the S&P 500 at 929, and acorrection of 14% ocurred, the S&P would be at 799. A drop of this magnitude would mean that panic would return, says Stovall.

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The U.K.'s deficit in trade in goods widened to 8 billion pounds in January 2010, even with the 25% decline in the value of sterling against the dollar and the euro. This suggests that devaluation is not likely to help rebalance the economy and things will have to be adjusted the hard way in the manner being done in Greece, Ireland and possibly Spain with cuts in spending. In the past the devaluations were accompanied by drop in interest rates, but this time interest rates are already low. And the U.K.'s weak manufacturing and excessive reliance on financial services does not help in boosting exports.

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Manuel Barroso, president of the European Commission, tells Italian newspaper La Repubblica on September 1, 2014, that Russian president Putin made some abnormal remarks in a phone conversation. Responding to Barroso's question about whether Russian troops had crossed into eastern Ukraine, Putin is reported to say: "That is not the question... But if I wanted to, I could take Kiev in two weeks." The WSJ editorial on September 3 referred to an earlier editorial on "Putin Bonaparte," giving some idea of how such comments by Putin are seen in the media, and how Putin's actions in Ukraine are creating new tensions with the NATO alliance and the U.S.