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Tankersley points to the broken links between economic growth and growth in jobs and incomes since 1989, which have created a shrinking U.S. middle class. In the postwar period before 1989, a one percent increase in economic growth generated a six tenths of one percent increase in jobs growth during economic recoveries. During the 1992 recovery under George Bush this was down to 0.4%. In the 2001 recovery under George W. Bush this dropped to 0.2%, during the current recovery under Obama this is at 0.3%. Income growth also showed a similiar pattern. Median household incomes declined from 1990-1992 and from 2002-2004, after adjusting for inflation, even with economic growth of 6% during this period. For the 2009-2011 recovery period the economic growth was about 4% yet real median incomes increased barely at 0.5%. By contrast from 1982 to 1984 with economic growth of 11%, real median incomes went up by 5%. The result workers median wages are lower now in the beginning of 2013, after inflation adjustment, than at the end of 2003, and real household income lower in 2011 than in 1989, says Tankersley. Why were the recoveries of 1990 and 2001 for the most part jobless? U.S. Federal Reserve studies show employers mindset had changed, instead of hiring back laid off workers during recoveries, employers did not add many jobs. Automation in factories requiring fewer workers, global outsourcing and supply chains, manufacturing overseas, lack of union-management cooperation on wages and jobs in industries such as the auto industry, increase in temp workers, all played a part in creating fewer and fewer good paying jobs. Some of this is playing out worldwide. In Japan the economic recovery has also come with similiar costs- moving jobs overseas for the auto and electronics industries, increase in temporary worker jobs with lower pay and benefits to about one third of all jobs, and depressed consumer spending as a result lowering the economic growth potential. Even the recent German economic recovery has come with an increase in lower paying temporary jobs and driven by exports to Asia. For the U.S. the situation was worsened by three additional factors- housing foreclosures and the hit to savings from the 2008 financial crisis, high cost of college tution and resulting debt, and the high cost of medical care. The Obama administration's effort to increase the minimum wage would help the poor, but do little to address the broken links between economic growth and jobs growth/income growth. The push for college education does not address affordability and neglects jobs training. Most of the questions raised by the changing patterns remain unanswered, which may be why Obama calls this a generation's task, not that of one administration....

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For the last 4 quarters Tesla has average profit of about $70 million each quarter yet in May Tesla awarded shares worth $800 million in May to Mr. Elon Musk, CEO, as part of the pay package, says this report in the WSJ.  These stock options need to be expensed as stock based compensation expense. These expenses put Tesla's meager profits based on GAAP in jeopardy says the WSJ. A third quarter net loss of just $226 million would put Tesla in a loss situation for the past 4 quarters. This for a company that is attracting massive amounts of capital. Is this a misallocation of capital by capital markets as structured today when there are pressing needs for infrastructure, health and education from the investment behaviour that prevailed for decades before the pandemic? Are there questions about pay packages that are thousands of times the pay of average manufacturing workers at the same company consistent with the kind of society we once were and now want to build after the pandemic? The average pay at Tesla is between $70,000 to $94,000 a year for workers making the CEO pay package about a thousand times that of the average worker. At the height of the crisis at VW it was about 170 times the average worker in 2015 in Germany. ...

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This NYT report by Eric Schmitt describes the efforts of U.S. troops in Europe under Lt. Gen. Frederick Hodges to build  a fast movement capability to counter the threat from Russian forces on the borders of countries in Eastern Europe. Hodges says speed of movement is crucial. American forces are deployed in smaller numbers than the Russian forces. A 10 day exercize under Hodges involved 25,000 American and allied forces across Hungary, Romania and Bulgaria. Russian forces exercizes involve more than 100,000 troops. The war in Ukraine involved a breakaway region in the east supported by Russian forces.

Commanders and younger officers were trained to address the Cold War threat with the soviets. Then for over a decade the focus shifted to Afghanistan, then Iraq and Syria. Now the focus shifts back to the Eastern European area with a new Russian threat.

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Petrobras remains stuck in 2016 with a huge debt load of over $125 billion and a slump in oil prices. CEO Aldemir Bendine is a career government banker appointed by President Rousseff in 2015, as she faces impeachment proceedings for a corruption scandal involving Petrobras. His 11 months in office have been marked by disagreements with the board, with Bendine walking out from one meeting. Petrobras has changed chairmen twice in the 11 months. Bendine's goal of divesting assets worth $15 billion in 2016 may not be achievable say analysts, with other oil companies also divesting assets. As an outsider Bendine faces skepticism from insiders in the company. A oil strike went on for weeks before workers won a raise, resulting in lost production.

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Simpson and Bowles travel around the U.S. to sell their plan for U.S. debt reduction. Bowles is the numbers guy and Simpson adds color and conviction to the conversation. The duo is famously bipartisan. Bowles a chief of staff to a Democratic party president, former U.S. president Clinton. Alan Simpson, is a former senior Republican senator from Wyoming. Both are highly committed to the cause and highly regarded.

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India's largest state, Uttar Pradesh, goes to the polls in February 2012. Uttar Pradesh in the northern region has an estimated population exceeding 200 million. 15% of the parliament seats are from U.P. Uttar Pradesh used to be a major stronghold of the ruling Congress party since independence in 1947 during the Nehru and Indira Gandhi years. More recently in the 2002 and 2007 elections Congress failed to get more than 25 seats out of a total of 219 in this state. The state government is now run by a caste based party called the Bahujan Samajwadi party- which draws its support from Dalits a caste lower placed in the caste hierarchy- led by Kumari Mayawati. The election campaign is also being conducted under new rules designed to limit campaign expenses and limit extravagance in election campaigning.

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Tushar Morzaria, CFO at Barclays is leading the effort for restructuring of Barclays and its large investmetn banking business. He was hired from JP Morgan Chase, where he was made the finance chief for the investment bank in 2010. Morzaria is the son of Indian immigrants to Britain who left Uganda during the Idi Amin dictatorship. Colleagues at Chase say he has a broader outlook and is able to look beyond the numbers.

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The British economy has contracted for 6 consecutive quarters. Third quarter 2009 show a 5.2% decline over the same quarter of 2008, and a 0.4% decline over prior quarter.

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Petrobras CEO, Aldemir Bendine, faces the difficult tasks of regaining investor confidence, establishing better governance, and carrying out a divestment program to cut the debt load of $133.9 billion. He is a bank executive from Banco do Brasil appointed in February 2015 following the corruption scandal at Petrobras. The new board at Petrobras following the corruption scandal is now free of political appointees, and includes academics, business leaders and technical experts. Bendine says, today there is not the same atmosphere as in the past with political appointees, and he sees no chance for government interference.

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Members of the debt panel from the Republican side are Rep. Jeb Hensarling of Texas, Rep Dave Camp of Michigan, and Rep. Fred Upton of Michigan. From the Senate the members are Sen. Jon Kyl of Arizona, Sen Pat Toomey of Pennsylvania, and Sen. Rob Portman of Ohio. Jeb Hensarling will lead the committee from the Republican side.

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Elections in 5 Indian states and India's ruling Congress party in Feb. 2012.

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Hernando De Soto, a prominent economist, heads the Institute for Liberty and Democracy. He has an intimate knowledge of the workings of the Egyptian economy, and describes the socio-economic marginalization of large parts of Egyptian society as Economic Apartheid. Simply put Egypt has fallen behind the times, way behind the economic progress in large developing countries.The Institute was hired by the Egyptian government in 1997, with the financial support of the US Agency for International Development, to look into what reforms were needed. It presented its 1000 page report in 2004- after years of work involving 120 Egyptian and Peruvian technicians, participation of 300 local leaders and interviews with thousands of ordinary people- to the Egyptian cabinet. The then Finance Minister Hassanein supported it and the cabinet approved it. What followed was a cabinet shakeup, and blocking of any reforms by hidden interests wanting to protect the status quo. De Soto's objective was to find out how many people were marginalized in Egypt, and how much of the economy operated outside the legal system- small business that did not have the protection of property rights or access to normal business tools and credit, that makes businesses grow. He found that 9.6 million people were employed in this sector operating "extralegally" with no protections. This being the largest sector of employment in Egypt. His action plan was intended to remove the legal impediments to these people and businesses urban and rural, so that they could grow. He says the value of these businesses outside legal protections is $248 billion or 30 times larger than the total value on the Cairo stock exchange, and 55 times greater than all the foreign direct investment in Egypt since 1800 including Suez Canal and Aswan Dam. De Soto says that because of burdensome, discriminatory and bad laws it takes 500 days to open a small bakery, getting a legal title on a vacant piece of land would take 10 years of red tape. This barrier of bad laws, poorly trained bureaucrats, inertia of the status quo, prevents people from legalizing their property and business. As a result whereas one of these types of small businesses is now India's largest company called Reliance Industries, and another Infosys is the second largest software company, most Egyptian enterprises are stuck being small and relatively poor, and do not generate jobs for the demographic surge of young people. De Soto's point is that Egypt will need good leadership to pull off this task of legal reform, and democracy alone will not be enough. Empowering the large majority of the Egyptian people operating outside the legal protections will mean giving property rights for $400 billion of assets, De Soto says. And this would unlock an amount of capital hundreds of times larger than what foreign direct investment and aid has brought to the country....

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A critical part of the Affordable Care Act is the setup of marketplaces or exchanges to let people without insurance buy individual health plans. Some states setup their own exchanges, and some states let the federal government step in and run them. To help the lower middle class and poor the Act provides health subsidies to buy insurance in the exchanges, and 85% of customers in the exchanges qualify for this benefit. The U.S. Supreme Court voted 6-3 in 2015, compared to a tight vote in 2012 on the Affordable Care Act, to maintain the health subsidies. Justice Roberts wrote the majority opinion, saying "Congress passed the Affordable Care Act to improve health insurance markets, not destroy them." Justice Scalia dissented calling it "interpretive jiggery-pokery." Justices Clarence Thomas and Samuel Alito Jr. dissented. Voting in favor were Justices Anthony Kennedy, Ruth Bader Ginsburg, Stephen Breyer, Sonia Sotomayor, Elena Kagan, Justice Kennedy dissented in the 2000 case. The challengers petition to the courts was based on a reading of phrases in the Affordable Act which had not occurred to the writers of the law. The reading suggests only people enrolled in state setup exchanges are eligible for subsidies. If the Supreme Court ruled in favor of the plaintiffs the 6.4 million Americans who are enrolled in the federal exchanges would lose the subsidies provided under the law and lose health insurance. And the economic foundations of the Affordable Act would be undermined with insurance companies required to provide insurance to all regardless of pre-existing conditions and subsidies removed, leaving the companies with sicker pool of customers resulting in destabilizing the exchanges and higher premiums. The court ruled in favor of an interpretation that is compatible with the whole law and the intentions of the statute to help the middle class and the poor buy health insurance. The chaos in the insurance markets that would result in going with the plaintiffs because of a careless writing of a phrase, was uppermost in the majority's mind. Chief Justice Roberts emphasized this, saying- "The statutory scheme compels us to reject petitioners' interpretation, because it would destabilize the individual insurance market in any state with a federal exchange and likely create the very 'death spirals' that Congress designed the act to avoid." This case originated with 4 plaintiffs from Virginia who challenged the IRS regulation that said subsidies were allowed regardless of whether the exchanges were run by the state or the federal government, arguing that this was at odds with the particular phrase in the law that was ambiguous about federal exchanges eligibility for health subsidies. Judge Roger Gregory of the Fourth Circuit Court of Appeals in Richmond, Virgina, ruled that the phrase was indeed ambiguous, but the IRS was owed deference in its opinion. Chief Justice Roberts made it clear that this was not a case for the IRS, saying "it is instead our task to determine the correct reading." ...

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After a severe financial crisis that could have snowballed into a Depression type situation and the credit rating agencies playing their critic-for-hire role in causing the crisis, there has been very little done to reform or correct the basic way in which credit ratings are made. Other than small patches to the system that failed the country badly by 2008, it has been left alone by Congress, the Obama administration, and regulatory agencies. The Attorney General of Ohio, Richard Cordray, says the "rating agencies total disregard for the life's work of ordinary Ohioans caused the collapse of our housing and credit markets and is at he heart of what's wrong with Wall Street today." Richard Blumenthal, Connecticut's Attorney General says he plans to join the suit against the credit rating agencies, Fitch, Standard and Poors and Moody's. Cordrays suit was filed Nov. 20, on behalf of Ohio's pension funds. It seeks billions of dollars in damages from these ratings agencies and accuses the agencies of negligence and fraud. About the failure of Congress to make even the basic change to the system of ratings, Joseph Grundfest, a professor of securities law at Stanford says ; "What you see in these bills are Botox shots, for a little while everyone is going to be frozen into a grin, and then the shots are going to wear off.'' A deputy dean at Yale Law School, Jonathan Macey, was a member of a bipartisan task force on credit ratings reform and met with lawmakers in Congress on this issue. He says its mortifying to see that this problem which is different from other complicated issues like water shortages around the world has been left unsolved, as it could be easily solved if there was even a basic degree of political will to do so. Congress looked at the option of creating an independent fee financed credit rating agency along the lines of the Public Company Accounting Oversight Board, established after the Enron, but did nothing with this idea. Rep. Kanjorski and Senator Reed have led the efforts to look at the credit ratings agencies in Congress and have basically decided this to leave the system very much the same as before the crisis, with the conflict of interest problem and incentives to improve profitability at the expense of the integrity of the ratings process still intact. Bills in Congress give more oversight powers to the S.E.C. and require companies to strengthen their compliance teams. In the period leading to the 2008 crisis the internal compliance teams did not get top management support at the credit rating agencies and there is skepticism about the effectiveness of compliance teams. S.E.C. regulatory efforts face push-back from the credit ratings agencies and the effectiveness of S.E.C. regulatory supervision is uncertain given the critical role that is given to credit ratings in bond and securties issuance....

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U.S. Federal Reserve chairman Yellen launches a sweeping review of practices for supervision of large banks in Nov. 2014. The review is designed to check "whether there are adequate methods for decisionmakers to obtain all necessary information to make supervisory assessments and determinations," and whether channels exist for decision makers to take into account divergent views when important issues arise. This is in response to questions about how the culture at the New York Federal Reserve may have stifled differing opinions on how banks should be supervised and what is proper information sharing between regulators and banks.