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Ian Talley provides this excellent account of how this drop in oil prices is likely to add to economic growth in major world economies, removing any ambiguity about the positive effect on the global economy. West Texas Intermediate crude dropped to about $65 from $105 between June and December 2014. The IMF estimates growth in 2015 will increase from 3.1% to 3.5% largely because of the lowering in energy costs. JP Morgan Chase economists see an addition of 0.7% points in global growth in the first half of 2015. ECB president Draghi sees the lower oil prices as an unambiguous positive. Estimates from Rhodium Group show major oil importing countries seeing import bills cut by $500 billion if prices remain low for 6-8 months, with $90 billion going into the U.S. economy. IMF estimate is that only 20% of the drop in oil prices is from lower demand, about 80% from higher fuel efficiency, increased supply using new technologies, decisions by OPEC to lower oil price, increases in supply. Based on estimates by the Rhodium Group, IEA and the IMF, the extra money flowing into the economies of the U.S., Asia and Western Europe from reduced oil import bills, as measured in percentage of GDP is: the U.S. 0.5%, Germany 0.8%, Japan 1.2%, China 0.8%, India 1.8%, South Korea 2.4%. Italy and France and other oil importing countries benefit. The impact comes at a time when Japan, China, India and eurozone economies badly needed a boost after significant slowdown in growth in 2014. It could not have come at a better time and because it is technologically driven as in the case of highly fuel efficient automobiles and new oil exploration technologies, a self sustaining process. The corresponding impact for oil exporters is: Russia -4.7%, Nigeria -5.4%, Venezuela -10.2%....

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An independent parliamentary panel in Japan described the Fukushima nuclear plant disaster as a "profoundly man-made disaster." It was sharply critical of TEPCO, the company running the plant, and the Japanese government's response. The investigation chairman Kiyoshi Kurokawa said in the report: "What must be admitted- very painfully- is that this was a disaster 'Made in Japan,' its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devotion to 'sticking with the program'; our groupism; and our insularity." This comes as a report by TEPCO shifted public attention to "a tsunami beyond our imagination," creating a large credibility gap with the Japanese people, because the public is skeptical about TEPCO's attention to safety during the period leading to the accident. The parliamentary report calls attention to safety factors that were ignored so that companies would be required to take further steps including costly modifications of plant equipment. A critical flaw was the lack of a independent safety agency that could enforce safety measures that TEPCO might be reluctant to make because of cost considerations. Astonishing as this may sound, the Nuclear and Industrial Safety Agency (NISA) in Japan is part of the same government ministry that promotes nuclear power, creating a sort of "nuclear bloc," which before the accident connected the safety agency to the bloc. Because of this the panel report says, NISA did not require TEPCO to prepare for a full station blackout- the loss of main and backup power- because the "probability was small." Other factors that need to be addressed are the breakdown in communication and cooperation between the people operating the plant and the people responsible for Japan's nuclear safety. The prime minister's office waited too long before declaring a state of emergency. To come up with the conclusions the panel made 1000 intervews and conducted 900 hours of hearings. The questions left behind by the nuclear accident in Japan are whether Japan should continue with the same level of dependence on nuclear power, whether it should shift out of nuclear power on a gradual basis as Germany is doing ironically after the Fukushima accident while Japan is reactivating its nuclear plants to meet energy needs. If Japan continues with a smaller reliance on nuclear power what changes have to take place for an effective safety agency completely outside the "nuclear bloc," and the series of other changes that have to take place in the nuclear power industry's handling of safety. Public opposition continues to focus on this because of distrust of the nuclear power industry after the accident....

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IMF research by Ocampo and Erten shows that when adjusted for inflation since the 1970's, the prices of metals have remained about the same, food prices down 58%, and energy prices up 163%.

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The problems Brazil faces with a sea of liquidity from developed countries with low interest rates going to emerging market countries with higher interest rates. Brazil is taking steps including a recent cut in interest rates to stem the flow. But interest rates at 12% are still too high not to attract business people in the carrying trade who borrow at low rates in the U.S. and Europe and invest the money in Brazil. The foreign direct investment has also increased. The result is an artificially overvalued currency- by as much as 36% since Jan 1, 2009 according to analysts- which hurts exporters and job creation in Brazil, as it becomes cheaper to import products than manufacture at home. Workers from VW recently protested in Sao Paulo as imports of cars are up significantly and there is a fear of job reduction at VW plants in Brazil. Brazil's automakers association estimate is for car imports to make up 25% of all cars sold in Brazil in 2011. This compares with 5% of cars sold being imported in 2005. It also shows up in production statistics. Brazilian industrial production declined by 1.6% in June 2011 from May. The cost of inputs are increasing rapidly for labor, raw materials, transportation, making Brazil a costly place to do business. The cost of living is now higher in Sao Paulo than in New York city. Cynthia Benedetto, the CFO of Embraer, a large Brazilian aircraft maker, says she always thought since she was a little girl that Brazil was the place of the future. But its deceptive now that the future is here, because this euphoria of progress could be shortlived. Embraer is investing in technology to reduce labor costs and is opening factories overseas. Bombardier, one of Embraer's competitors from Canada recently announced plans to build a manufacturing plant in Mexico. Brazilian president Rousseff is aware of this, and told Latin American leaders in Lima, Peru: "we have to defend ourselves against this immense, fantastic, extraordinary sea of liquidity that finds its way to our economies in search of returns that it can't find in its own." At the same time Rousseff has election promises to fulfill that require larger spending and for which the capital inflows are convenient but could prove erratic- for social welfare projects, and for infrastructure spending in advance of the Olympics. Turkey is seeing a similiar situation with booming consumer credit sustained by capital inflows even as its manufacturing competitiveness has remained weak. ...

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Systemic risks from "too big to fail" and the pushback on capital reserve requirements that leave banks with lower reserves. Ewing describes the role of the president of the Swiss Central Bank, Mr Hildebrand, in setting rules for higher capital reserves for Swiss banks than that of other countries and the pushback from the banks resisting the new regulations. "He will never find another job in Switzerland," a Swiss newspaper Der Sonntag quoted one banker saying this about Mr. Hildebrand. Losses at Swiss bank UBS during the financial crisis and the $2 billion loss at a UBS trading desk in 2011 have created a new awareness of systemic risk at banks. During the financial crisis banks used an optimistic estimate of "risk weighted assets" which led to insufficient capital reserves in a crisis even as the banks were shown to be well capitalized. A sense that banks in Europe and the U.S. will continue to have insufficient capital reserves at 3-4% of assets under new rules and with the longer phase in times for the new Basel III regulations of reserves at 7% of assets to after 2016....

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November 2012 light vehicle sales of cars and light trucks shows sales up significantly for Honda at 39%, Toyota 17%, and sales at Ford up 3%, GM 6%. GM decides to reduce production and not reduce prices with incentives that match competitors. VW sales increased 29%, Audi 24%, Daimler 13%, and BMW up 45%. Experts expect the better conditions in the U.S. auto market to continue especially as many cars that reach a life of 11 years need to be replaced. Light vehicle sales reach 1.14 million in Nov. 2012, up 15% over the prior year, and seasonally adjusted auto sales of 15.5 million are the highest since Jan 2008, according to Autodata Corp.

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Francesco Gurrerera, Money and Investing Editor for the WSJ points to the risks in the U.S. and global economy in April 2012- overdependence on the U.S. Federal Reserve and the European Central Bank, not enough "de-leveraging" of financial institutions after the 2008 global crisis, and the increasing risk associated with individual investors and businesses investing in risky securities in search of yield in a low-interest rate environment.

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The Journal cites figures from the U.S. Department of Agriculture showing 44.7 million participated in the Supplemental Nutrition Assistance program in fiscal 2011. This is a big jump from the 28.2 million people in 2008. Texas has 4 million on food stamps, California 3.7 millon, Florida 3.1 million.

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Van Dam says its not that great being a worker in the U.S. because it is hard for the unemployed resulting from competing with workers in other countries with lower wages, and for those who are unemployed harder because worker collective bargaining is weakened over 3 decades. He cites a 296 page OECD report showing very little government support for unemployed and at risk American workers. It says this has contributed to higher income inequality and larger share of lower income people than almost any other advanced a nation. Only Spain and Greece are shown as having more households earning less than half the median income- showing large numbers of people are poor or close to being poor. In the U.S. an average of 1 in 5 lose their jobs each year, and 23% of workers 15 to 64 are in their job less than a year in 2016. The job churn hurts workers because of firing and layoffs being frequent, more than is healthy for a economy. The U.S. and Mexico are the only two countries not requiring advance notice before firings. And fewer than half of workers find a job within a year in the U.S. Two in three families with a displaced worker fall in poverty for some time. Unemployed workers with typically 26 weeks support get less support than any other country in the study. Only 12% of workers in U.S. are covered by collective bargaining. ...

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The election of Sebastian Pinera only confirms a new emphasis in Latin America towards a social cohesion agenda. In Mexico with Calderon, in Columbia with Uribe, in Brazil with Luiz Inacio Da Silva, in Chile with Pinera promising to work closely with the Concertacion and carry on social programs introduced by that coalition which reduced poverty, the trend is the same. It is to put behind Latin America the struggles between the military, the universities, business, unions and other parts of society and forge a common consensus for coupling social programs for the less well off with business friendly policies to improve the economy. Its even a process that is taking place in Spain which has a great deal of influence on Latin America, as Spain combines social support programs with business friendly policies. And the Concertacion President in Chile, Michelle Bachelet, leaves with personal popularity ratings of about 75% showing that these policies are popular with Chileans, as they are in places like Brazil and Mexico. The fatigue with 20 year old Concertacion rule shows with a change in administration but overall policy direction will in large measure continue....

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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Friedman compares the anti-corruption movements in India and the U.S., the world's two largest democracies. The Occupy Wall Street anti-corruption movement in the U.S. focusses on the excessive influence of banks on lawmakers, regulators, and the government, through the use of campaign money, revolving door for government officials and regulators to join banks, and intense lobbying. The anti-corruption movement focusses on corruption in government at higher levels, such as the handling of government licenses, and at the basic levels of needing to bribe officials for something as simple as getting a birth certificate or other government document. Both have pernicious effects, in the U.S. excesssive bank influence leads to taking excessive risk for higher bonuses, putting the entire financial system at risk and creating a crisis in housing that delays the economic recovery. And in India the corruption leads to retarded progress, as funds to invest in infrastructure and development are siphoned off, business and entrepreneurs are required to pay bribes at each step, and ordinary people face the need to pay bribes for the most routine interactions with government officials. In the process this creates more unequal societies by skewing the distribution of benefits from wealth created to groups that are better equipped to game the system. The economic system once distorted in these ways has tendencies to take talent away from productive activity and innovation which create wealth, and direct it towards speculative activities....

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France is moving quickly with spending on the $37 billion stimulus. Public buildings, museums, cathedrals and historical sites are being renovated in 2009. About 50 chateaus, and 75 cathedrals are part of 100 million euros for cultural centres. About 75% of France's stimulus money will be spent in 2009, in contrast to the slow work in the USA.

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France's central bank chief Christian Noyer, says public spending to create jobs has the drawback of creating yesterday's jobs, but lasting job creation has to look at today and the future for effective job creation. Once government spending crosses a certain level, about 55% of GDP, a level France has crossed, further spending becomes counterproductive, reducing public confidence in the economy, as higher future taxes are anticipated canceling any benefits.

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Mexico's economy grew at 1.34% in the third quarter of 2011, according to the national statistics institute. Annual growth is estimated at 4% for 2011. The war against organized drug trafficking in Mexico cost the economy one percentage point of economic growth, according to estimates by BBVA Bancomer, Mexico's largest bank. Mexico received $20 billion in foreign investment in 2011, about the same as in 2010. Cars and aerospace have drawn large foreign investment. Mazda will invest $500 million on a new plant in central Mexico. Honda says it will spend $800 million on a second Mexican plant. In recent years with higher costs in China, higher transport costs, and a weaker peso with a stronger yuan, Mexico is becoming more competitive with China as a manufacturing investment location. The younger workforce, low inflation and technical education schooling, offer Mexico additional advantages. Mexico is the second largest manufacturer of flat screen television sets, and is now the fourth largest location for outsourced IT such as call centers. Axa CEO, Henri Castries, and Siemens CEO, Louise Goeser, have very favorable views of doing business in Mexico. Siemens sees sales increasing by double digits through 2015, and has located one of three global R&D centers in the state of Queretaro. Goeser says many parts of Mexico are safer than parts of the U.S. A large part of the violence is concentrated in a few states, and in border cities like Juarez, and affects smaller businesses more than the large manufacturing enterprises of overseas companies. As a result it is as if there were several economies in Mexico, with foreign enterprises largely insulated from the violence. ...

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Lawrence Katz, Harvard labor economist, talks to Friedman about the jobs crisis in the U.S.. Katz identifies three jobs crises occurring at the same time today. One is the drop in the demand for goods and services that resulted from the longer term effects of the financial crisis of 2008, with rising foreclosures, weak housing markets, bad debt on the balance sheets of banks, and interest rates at close to zero reducing the scope of action by the Federal Reserve bank. The second, is the widespread long term unemployment with workers dropping out of the labor market. The third, is the nature of new factories and hiring. Work in new factories is done through increased automation, information technology and fewer workers. As a result job creation is a fraction of what it was in the past. Not mentioned here is the shrinking of the public sector under the strain of budget deficits for local, state and federal government. This leads to the question of how America will create jobs in the future. Katz believes the answer is creating more "hubs," networked urban areas like Austin, Silicon Valley, and Raleigh-Durham, by bringing together universities, high-tech manufacturers, software providers, and startup companies, to cooperate in creating new products that enhance people's lives worldwide. This has to be done by the private sector and government working together to build the infrastructure and make the investments in education, training of workers, and equipment for new job creation....

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David Autor, an economist at the Massachusetts Institute of Technology, says he is quite worried about the steadily declining participation of men 16-64 in the labor force from 85% in the decade after World War II to less than 65% today. This is a blow to the men, their families , government revenues and the economy.

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Different estimates on how quickly and how much additional oil would come into world oil markets if sanctions are lifted. The time estimates range from quickly to 6 months for additional new supplies into world oil markets. Estimates of how much production can be added range from 500,000-800,000 barrels a day from private estimates to 1 million additional barrels a day from Iran's oil company, if sanctions are lifted. UK foreign secretary, Philip Hammond, says "there is still a long way to go if we are going to get there." He told a parliamentary committee that the nonnegotiable part is a window of one year advance notice if Iran were to break out and go for a nuclear weapon, which would be based on technical expert opinion of how long it would take Iran to build a nuclear weapon using its knowhow and materials at that Mr Zanganeh took over as oil minister after the election of Rouhani as president 18 months ago. Zanganeh calls the effect of sanctions and the mismanagement of the previous government as "a catastrophe," and he has tried to instill anew discipline in the oil sector. Iran currently produces about 1-1.2 million barrels a day under sanctions, half of earlier levels before sanctions were tightened in 2012 because of the nuclear weapons development issues....

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Prof. Peterson of Harvard and Hanushek of the Hoover Institution, authors with Woessmann of the book "Endangering Prosperity: A Global View of the American School," offer some startling reminders about the importance of education to economic growth and incomes in countries. Simply by raising the math standards in the U.S. to the higher standards in Canada would raise GDP by three fourths of one percentage point. One advantage that the U.S. enjoys comes from its good university systems, open markets, rule of law, tax rates, and open immigration policies, which give it about two thirds of a percentage point in higher GDP growth per year. The estimates are from the authors calculations. For the period 1960-2009, a period of rapid growth in Asian countries Korea, Taiwan, Singapore and Hong Kong, higher test scores in math and reading compared to the wrold average as measured by NAEP test and PISA, have led to 2% higher GDP growth. NAEP shows only 32% of U.S. high school students proficient in math compared to 45% in Germany and 49% in Canada and 63% in Singapore. By contrast to Korea and Taiwan, Peru, Argentina, the Philippines and S. Africa have about 2% less in GDP growth because of lower scores compared to the world average....

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Some startling statistics on U.S. wages and incomes and the increase of part-time workers, by the publisher of U.S. News and World Report, Mortimer Zuckerman. He cites the Pew Research Center reports that show one third of Americans identifying themeselves as lower class or lower middle class compared to one quarter before 2008. This affects social mobility with the increasing gaps in incomes, education and social behaviour acting to reinforce each other and leading to even lower future mobility. Industries that are showing growth are in low wage occupations. The Bureau of Labor Statistics shows growth in future in industries noted for low wage part time work- health care, social assistance and retail, with some jobs lacking minimum wage and overtime protections. Revealing in this respect is that in the last 2 years fully 43% of net employment growth is in the 1.7 million jobs added in low wage work in food service, retail and employment services industries. The number of Americans working full time declined by 5.9 million since Sept 2007, part time workers increased by 2.6 million. The effects of higher part time workers and job recovery predominantly in lower wage industries is likely to affect consumer spending and slow growth....