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Analysis of 126 public pension plans by the National Association of State Retirement Administrators shows an average target rate of 7.68%. New York State Common Retirement Fund, third largest by assets, says it plans to drop the assumed rate of return to 7% from 7.5%. A drop of 1% boosts pension liabilities by about 12%, accoridng to the Centre for Retirement Research at Boston College. It means workers are required to contribute more to the pension funds for the same level of benefits, especially as lifespans grow and more Americans retire in an aging population. Other options are for states to cut payrolls and expenses. This is a positive step as it makes the assumptions realistic and improves the fiscal stability of the funds. The largest pension fund, California Public Employees Retirement System is considering dropping its assumption to below the current level of 7.5%. The lower assumed rates of return are not enough say critics, who cite the 3- 3.5% returns assumed in the 1960's for cash and bond based portfolios. The Laura and Arnold Foundation's Josh McGee says it is still not realistic. Retirement systems median actual return was 3.4% for 12 months ending June 30, 2015. Expert panel of actuaries and pension specialists says the right level for assumed returns is about 6.4%. Companies in the Fortune 1000 have already dropped the figure to 7.1%, from 9.2% in 2000, according to Towers Watson survey....

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Feldstein says GDP growth was smaller than the 1.8% that was reported for the 1st quarter of 2011, because two thirds of that 1.8% went into business inventories and not for sales to consumers or final customers. This means final sales growth at an annual rate of 0.6% and actual quarterly increase of 0.15%. With mostly inventory investment and not much response from the consumer he says business cannot be persuaded to hire and invest. A closer look at the numbers shows the growth was in February and March, with declines in April for real wages, durable goods orders and manufacturing production, existing home sales, and in real per capita disposable incomes. Feldstein sees the Obama administration's failure in several areas. The stimulus could not make up in size and structure for the loss of annual consumer spending of $500 billion and loss in housing construction of $200 billion. At $300 billion in 2009 and $400 billion in 2010 it was not enough to fill the huge gap presented by the financial crisis. President Obama allowed the Democratic leadership in Congress to put together a package that while adding to the deficit added less than a dollar to GDP for every dollar of stimulus. The stimulus lacked punch for economic growth as it consisted more of transfers to state and local governments, transfers to individuals, temporary tax cuts for low income people etc. The lack of a plan to reduce the deficit by creating higher uncertainty about future tax rates and interest rates has hurt the economy. The President's health legislation with the cost of $1 trillion over 10 years diverted much needed time, attention and bipartisan goodwill from the core issues of unemployment and the deficit. The Obama administration also did not tackle the housing issue as suggested by Feldstein with specific proposals in the first year of the Obama administration, with very little done to reduce the millions of foreclosures that have kept housing in a prolonged slump. ...

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Simon Nixon of the Econmist on the report's findings for the future of the world economy. He points to the heavy debt overhang for individuals and banks that will take years to overcome resulting in entrenched unemployment and sluggish growth, somewhat reminiscent of Japan's years of stagnation after its bubble. The entrenched unemployment he argues will permanently lower the economic potential of developed countries of US and Europe. Public debt will rise so that private debt can fall. Bank lending that is cautious will only slow any recovery for a long time. And the grim facts he presents are that about 25 million jobs will be lost in the 30 rich countries of the OECD before all this is over during the coming decade, and several million jobs probably will never come back. Auto manufacturing and manufacturing in general is an example where some jobs lost may never be regained. There is no room for complacency here.

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Japan says Russian planes intruded into Japanese airspace for over 1 minute on February 7, 2013, over the island of Rishiri, near Hokkaido. F-2 aircraft from Japan's Self Defense Forces responded to the intrusion. The intrusion comes at the time of the Northern Territories Day when Japan's government reiterates its determination to press for return of the Northern Territories from Russia. Japan did not sign a peace agreement with Russia at the end of World War II after Russia refused to leave the islands. The islands are known as the four Kuril islands in Russia. Policy experts at Japan's National Graduate Institute for Policy Studies say the Russian intrusion was an attempt to test Japan after an incident where Chinese radar locked in on Japanese naval ships in the East China Sea. The effects on public opinion are likely to create support for prime minister Abe's effort to increase the budget for Japan's Self-Defense Forces.

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Bjorn Lomborg of the Copenhagen Consensus Center says about the decision by the Obama adminisration to stop contributing to World Bank financed coal power plants- including one in South Africa- does not take into account the simple fact that 1.2 billion people living in sub-Saharan Africa and Asia have no access to electricity. In the sub-Saharan region of Africa (excluding S. Africa) the entire electricity generating capacity is about 28 gigawatts, or about the same as Arizona with a population of about 9 million compared to 860 million in the region. He says China was able to lift 680 million people out of poverty with urbanization and industry powered by coal. There is no alternative to low cost fossil fuels for the poorer regions of the earth. This is why the International Energy Agency esimates fossil fuel generated energy to remain about the same percentage in 2035 as it is today- 81%. Shale based naural gas can make a difference for air pollution and China is begining to make the shift away from coal- for sub-Saharan Africa, South Asia, this goal will take time. ...

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Powell and Rashbaum's interview with New York City Police Commissioner Raymond Kelly. Kelly changed the idea that crime was an everpresent fact of urban life in the heart of America's cities. He also considered increasing the number of officers alone as a political number not related to improving safety. Crime reduces the quality of life in inner city neighborhoods and in downtown areas and a safe city benefits all communities. Could this have been done without "stop and frisk" or had things deteriorated to the point that such measures had to be resorted to is the controversy surrounding the tactics. This had less to do with the increasing inequality in the city that the new Mayor De Blasio cited in the election, which was aggravated by the 2008 financial crisis and cuts in state and federal funding, which affected minority communities disproportionately.

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Matthew Kaminski gives his assessment of Angela Merkel's years in office. He cites a former German chancellor Helmut Schmidt's words: "People who have a vision should go see a doctor." She is no Konrad Adenauer or even Helmut Kohl. A scientist by training she is dispassionate, intelligent, diligent and takes the time to understand the details of the financial situation from her advisors, then sorting out the situation in her own mind. She gets less credit for bold action than she deserves because of her down to earth manner.She gave banks no option as bondholders to share losses in late night meetings at EU headquarters, called the president of Italy and secured a change in government after Berlusconi lost the confidence of the EU. In the current impasses between the Bundesbank and the ECB's Draghi over sovereign bond purchases with Jens Weidmann, Germany's representative at the ECB, supporting Mario Draghi's position, she has navigated the fine line between the German public's reluctance to take on the debts of its neighbors in the eurozone and the need for lowering the borrowing costs of Italy and Spain to save the euro. After the visionaries from Adenauer to Monet, todays eurozone leaders are focussed more on the nuts and bolts of making this idea of Europe work, requiring the skills and ability to learn and grow that she has demonstrated....

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Portfolio manager Robert Arnett, who manages two of PIMCO's funds, has some alarming things to say about the environment retirees face in the future. In ten years for every working age person added to the workforce there will be 10 new retirees, the complete reverse of what it was ten years ago when there were 10 new working age persons for every new retiree. The impact of this will take the shape of many more retirees selling stocks and bonds to live on and fewer buyers for the bonds and securities, lowering the prospects for higher prices for bonds and securities. He expects the demand for goods and services to continue with higher prices. He sees stocks giving a nominal return of about 5%, bonds a nominal return of 2-4%, for a balanced portfolio yield of about 4%, during the next 10-20 years. After inflation and taxes the returns will be very thin. Expectations of 10% returns do not take into account deficits, debt, and demography in developed countries, says Arnott.

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The critical variable in knowing whether lockdowns of cities and countries are working is called the coronavirus RO, or reproduction ratio. This ratio measures the average number of people infected by a carrier A. It could be that he infects 1 person at work and transport call it B people , or in large gatherings call it C people he infects 2 persons, or in other surroundings such as restaurants he infects 1 person call it D people. The people A has infected B+C+D are the ones now not infected by A with the lockdowns such as in New York, Italy, Germany, UK and France. It is determined by global health experts that the number of B+C+D is about an average of 4 persons infected by 1 person A with coronavirus, though it may be much higher in practice in some areas. The natural rate of RO or reproduction ratio is considered by the European Centre for Disease Prevention and Control to be 3.86 or about 4, if no lockdown or social distancing or other prevention is practiced. This in a situation where people behaved as before unaware that the virus was around them. Governments such as New York and France, UK, Germany are including this key variable in their determination of how long a lockdown lasts, and for determining if the reopening is not going the right way or failing. In such situations the lockdown would be reinstated, or if it is a phased reopening such as in the U.S. and other countries go back to the previous phase. In Italy and Germany the RO reproduction ratio for coronavirus is estimated by official experts at 0.8. Germany's RO estimated by the Robert Koch Institute and Italy's by Franco Locatelli, scientific advisor to the government. In New York the margin is thin- with RO of 0.9, estimate from the state's governor. In France which has one of the tightest lockdowns of all with a document required to go outside it is at 0.6, the figure coming from the prime minister Mr. Philippe. In the UK it is below 1.0 but no accurate figure is reported. As Dr. Birx- leading the coordinated response in the U.S. - emphasizes over and over again this is a very contagious virus, about which not much is known. Social distancing, wearing masks, basic prevention measures such as frequent handwashing, and not gathering in large numbers of people, is essential for defeating this virus. This has to be followed up with extensive testing and contact tracing to win this fight.   ...

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At the New Year's eve service on National Day of Prayer January 1, 1942 president Franklin Roosevelt and Winston Churchill worshipped together at Christchurch Episcopal in Alexandria, Virginia. The Reverend Wells said on this day 82 years ago. The idea that we could not prevail with military strength alone but with deep humility depend on God's help was one of the great strengths of Franklin Roosevelt. That it says much to the present, to the divisions of the present and lack of humility cannot be overstated.

"Our president has appointed this first day of 1942 as a Day of Prayer, for asking forgiveness for our shortcomings of the past, power for the present task of achieving victory... but spiritually we are in bad shape. We must have a deep spiritual unity that will make us ready to sacrifice our material possessions and even life itself for the moral principles for which this war is being fought." 

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A heat wave over northern India with New Delhi recording temperatures never seen of over 50 degrees centigrade happens just as voters go to the polling places in May 2024. Results will be announced June 5 for parliament's 543 seats. Turnout is considered to be resilient in the face of the heat wave with only 20% of the voting seats having lower numbers of voters than 2019. The drop in voting was slight of 1.5 percentage points overall from 67.2% to 65.6%. The last phase starts June 1, and 485 seats have voting completed.This vote is all about development and delivery of infrastructure, jobs, and modernization, improving governance and rapidly developing the country held back for about six decades after independence during which Japan recovered from the war, and China rapidly modernized its economy, and India only setting the beginnings of recovery in the administration since 2014, with prime minister Modi setting the goal of a modernized country by 2047 or Vikshit Bharat. ...

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U.S. Federal Reserve chairwoman Janet Yellen's speech at the Federal Reserve Bank of Boston conference on inequality was remarkable in the clear focus on the increase in inequality of the last three decades. Yellen calls it "the most sustained rise in inequality since the nineteenth century." Yellen also described the stark inequality between the lower half of households and those at the top- "The lower half of households by wealth held just 3 percent of wealth in 1989 and only 1 percent in 2013. To put that in perspective... the average net worth of the lower half of the distribution, representing 62 million households, was $11,000 in 2013. About one fourth of these families reported zero wealth or negative net worth, and a significant fraction of those said they were "underwater" on their home mortgages, owing more than the value of the home." Without saying this explicitly Yellen has accepted the Fed's own role in this situation under Greenspan and Bernanke. Under Bernanke Yellen was vicechairwoman. Yellen participated in many of the decisions of the Fed that kept interest rates low- hurting savers and those who could not take the risks of a volatile stock market. Yet Yellen has shown courage in stating the problem with all the facts she could muster, and making clear that Fed sees the long term unemployed as a critical driver for Fed policy....

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Harold Meyerson poses some difficult questions for those who like Mitt Romney say America's choice is between the merit based society Romney sees and the "European social democratic vision." In Romney's words- "a merit-based opportunity society- an American-style society- where people earn their rewards based on their education, their work, their willingness to take risks and their dreams." Meyerson cites several studies to show that European societies today are more dynamic on several measures of performance than America's. In intergenerational mobility he cites a Brookings Institution study by Julia Isaacs, that shows incomes are three times more likely to remain the same in America compared to Denmark, Norway and Finland, and one and a half times more frequently than in Germany. Another measure evident from Germany's experience is the degree of union-company-government cooperation to worker retraining, corporate boards that have representatives of workers and management, the "kurzarbeit" program of retaining employees to smooth out impact of cyclical swings in the economy on workers and companies, and worker's willingness to show restraint on wages especially because management wages are not way out of line as in America. Meyerson reminds readers that the U.S. had a more merit based society in terms of upward intergenerational mobility, distribution of rewards of work between workers in manufacturing and service sectors and management, educational mobility with the G.I. bill, in the first 30 years after the Second World War. In a separate article in the Washington Post on Jan. 5, 2012, David Ignatius poses questions about the effects of globalization in shrivelling the middle class. The access to lower wage manufacturing in China, India, Mexico, and other countries, and lowering of wages in the U.S. to be competitive, was part of globalization. The two tier wage structure in the U.S. automobile industry is one example, making middle class wages a thing of the past. Globalization opened up new markets for American companies. Yet many of the gains in employment were made in emerging markets, as the example of GM's expansion in China showed, with automobile manufacturing expansion inside China....

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AIG and GE Capital are designated "systemically important" financial institutions by the U.S. Treasury in 2013.

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Total compensation and benefits at publicly traded Wall Street banks and securities firms was a record $135 billion in 2010, according to an analysis by the Wall Street Journal. This is up 5.7% from the $128 billion in 2009 for the same firms. The 25 largest financial firms saw revenues increase to $417 billion. Things are going back to where they were before the financial crisis with total compensation and benefits now exceeding the levels in 2007. In 2010 deferred compensation made up half of the total pay compared to being one third of total pay in prior years.

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Japan is meeting a shortage of workers by bringing in workers from other countries including China. In jobs ranging from apple picking to airport baggage handling Japan is getting foreign workers, and making changes in its immigration laws. Prime minister Abe is pushing for these changes to increase growth of the Japanese economy. In the past 4 years the number of foreign workers has nearly doubled to 1.46 million and a new visa system will accelerate the process to bring in more workers. Out of 27 countries in a Pew Survey Japan is the only country where more people favor immigration to rise than those who think it should decline. The Chief Cabinet Secretary Mr. Suga says- " In my view that shows how real the labor shortage problem is." Immigration authorities say they gave visas to only 82 refugees in 2018, less than 1% of those applying, so that there is not a sense of recasting Japan as a nation of immigrants or fulfilling any obligation to accept people from war torn nations. The problem Japan is facing is that 3 in 10 people are over 65 years old. In 2018 the population declined by 430,000, causing a need for job applicants. In fact cities and towns are looking for new ways to hire older workers who retired by offering flexible hours. ...

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A sign of the growing people to people relationship of the US and India is the number of Indians in US graduate schools which went up from 68,000 to 102,000 in the 2021-2022 academic year, up 48%. There almost as many Indians taking the GRE exam for entry into US graduate schools in 2023 as Americans taking GRE in the US. Another sign of the expanding people to people relationship is the decision of the Biden administration to give 1 million visitor visas to Indians in the coming year. In India physical sciences and humanities for GRE exceed engineering by a wide margin, showing the shift in subjects. Under India's new education policy NEP the shift is to a more multidisciplinary approach and allowing students to mix science subjects, math with humanities. This approach is seen as best for India to produce a new generation that can think for itself better than the purely engineering science or medical track graduates of the past who had limited knowledge of the humanities. This overly engineering focus has prevailed in the educational approaches of Japan and China during their rapid growth period. India under the Modi administration is betting on a wider knowedge of different and contrasting subjects and disciplines for its future. ...

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Donald Trump's remarks at a Wilmington rally that caused a storm- "Hillary wants to abolish, essentially abolish the Second Amendment. By the way, and if she gets to pick her judges, nothing you can do folks. But the Second Amendment people, maybe there is, I don't know." The second Amendment in the U.S. Constitution gives people the right to bear arms. Some newspapers saw it as threat, especially considering the heated rhetoric in Trump's other remarks in his campaigning. Speaker Paul Ryan called it a joke gone bad, and that the Second Amendment should not be talked about in this way.

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Michael McConnell, was Assistant General Counsel of the Office of Management and Budget from 1981-1983. He is now a professor of constitutional law at Stanford University. Here he tries to throw light on how the budgetary process that is required by law, and which makes the formal budget proposed by the president available for public scrutiny, was circumvented through a sequence of events starting in February 2011. The Budget Act of 1974 sets specific deadlines and a process for generating revenue, setting spending priorities, and setting the debt limit. The President first submits his administration's budget by the first Monday in February. The Congressional Budget Office has until Feb. 15 to score the budget using identical metrics for all proposals for a consistent scoring. The budget President Obama put forward in February did not take into account the growing deficit and was rejected by the Senate 97-0. The President proposed a new plan in April 2011, but the proposed budget was so vague that CBO Director Douglas Elmendorf said he could not score it. The subsequent efforts in June and July 2011 were carried out in closed door negotiations between senior Republican leaders and the Obama White House. This subverts the original intention of the law. The Budget Act says that both the House and Senate hold hearings on the proposal, with testimony from the administration, "national organizations" and the "general public." Transparency, openness and accountabilility are key aspects of a proper process that is democratic and prevents the parties from engaging in blame and competing claims. The closed door negotiating sessions and the lack of a concrete written budget proposal from the President has turned the current budget process into an effort by each side to see how it can best position itself for the 2012 presidential election. ...

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A live interview by BBC Hindi with Arvind Kejriwal, chief minister of Delhi. In the interview Kejriwal says there are 55 deaths from the demonentisation by removal of 500 and 1000 rupee notes in India. When questioned about this and proof, Kejriwal says BBC is biased. The effort by the the Modi government to  remove these rupee notes is an effort to get people in the informal economy,  the deals in real estate, and people in other parts of the economy which pay little or no taxes to bring the cash to banks and pay the taxes due. This is intended to increase government revenue for investments in infrastructure and education, healthcare. services. The large scale of the shift has caused difficulties for ordinary people, and the upper classes, and the government is working to work through these problems. In India the black money as it is called is estimated to run to about 1 trillion dollars. It is also the result of corruption and has deprived the economy of needed investments and modernization. ...

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Israel and Hamas agree to a pause in the fighting with a deal brokered by Qatar and Egypt. The top Middle East envoys of Biden and Trump were involved in the 96 hours of negotiations that preceded the deal.