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Anne Applebaum of the Washington Post points out that after the faltering campaign of Republican Party nominee Fillon, the only serious candidates remaining in the presidential election in France are Marie LePen of the National Front, and the former Economy minister in the Hollande government, Emmanuel Macron. Macron is now the only person with enough popularity to win over LePen's nationalist movement. Macron launched his En Marche movement in 2016 and his strategy is to bring together the centre right and the centre left moderate voters, and voters who favor remaining in the European Union. Older voters in France unlike that in the U.S. and the UK are favoring candidates other than LePen because they fear the impact on the French economy and their pensions from leaving the European Union. LePen favors holding a referendum to decide whether France should remain in the EU. Macron takes an opposite view fully supporting France's role in the European Union. He has not advocated the huge cuts that Fillon has for job cuts in the public sector, and is able to draw moderate centre left voters to his side. A look at the French presidential election in another piece in the Economist magazine shows that further out one goes from major cities in France there is a surge in the support for the National Front. Moderate parties other than the National Front draw support in most of the major cities and urban areas. Another similarity with the UK and U.S> is that more educated voters support moderate parties other than the National Front. As polls have been proven wrong in other elections it is difficult to know what is likely to happen in this election. Unemployment is high in France at 10% with little change since the election of the Socialist Hollande government. Other issues such as terrorism have unsettled French voters, making this election difficult to predict. Voter dissatisfaction is especially high among younger voters who face a high unemployment rate and stagnant economy. Neither candidate Macron or LePen offers a way out of the low economic growth and lack of new jobs. A lot depends on whether French voters are willing to take the risks of a LePen administration and the further uncertainty from a referendum for leaving the EU which cannot enhance the economic prospects of France.     ...

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"Kurzarbeit" job preservation programs incorporate an idea that workers make up for less pay when a company is doing well by being paid and on the job when a company is doing poorly, leading to job preservation benefitting the employee and skills preservation benefitting the company. In 2013 in the throes of the eurozone crisis France passed a labor reform law and committed to improving competitiveness by adopting some ideas from its close neighbor and partner in the eurozone experiment, Germany. But experts say little has changed. France's unemployment is at a high of 10.4% in the third quarter 2014, according to the French statistics office Insee, with little prospect of economic growth in 2015. What happened? A report commissioned by the French and German governments from economists Jean Pisani-Ferry and Henrik Enderlein, says job preservation agreements in France are too strict and ineffective. Half a million more people are without jobs in Dec. 2014 compared to May 2012 when president Hollande took office. Insolvencies in France are 35% higher in 2014 than the average between 2003-2007, for Germany 31% lower, according to credit insurer Euler Hermes. Just in the 12 months to Sept 30, 63,000 companies in France were declared insolvent. Job preservation agreements have failed because other changes in the legal system are needed. Currently a company must prove to an employee council why it is reducing wages in a downturn. A small group of employees can still reject the agreement and ask for severance packages, leading to layoffs. The reforms were done in piecemeal fashion, say economists Jean Pisani-Ferry and Henrik Enderlein....

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GDP of the USA contracted by 3.8% in the 4th quarter of 2008. Excluding the inventory adjustment which is the inventory of products made but sitting on inventory shelfs, the GDP contracted by 5.1%. In the last week of January 2009 there were 70,000 layoffs in the U.S. in all sectors from trucks to technology. 2009 is going to get a lot worse which does not bode well for Detroit automakers and other industries, and for economies overseas like China and South Korea which are heavily dependent on exports, and in turn for Germany which is dependent on the Chinese market.

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ZipRecruiter estimates shows 11.3 million job openings posted in June in the US. Economists surveyed by the WSJ shows there were 11.4 million job openings in April, and 11.1 million in May in the US. The number of people looking for jobs was 5.9 million in April. The US jobs market remains strong.

There is a slight softening because of high interest rates and slowing demand. 390,000 jobs were created in May according to Labor Department. This is expected to soften to 250,000 jobs in June. The unemployment rate staying at 3.6%. The shift out of leisure, hospitality because of covid exposure and lower wages, fewer opportunities continues. There is also as shift from schools to higher paying jobs in other sectors. The hiring in tech and real estate is not as strong as earlier with changing outlook in these sectors.

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Spencer Jakab points out reasons why interest rates will remain low for some time to come- inflation of around 2%, even lower interest rates in Europe and Japan, foreign buying of U.S. bonds keeping the dollar strong, and sluggish economic growth in the U.S.

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Large U.S. companies with overseas operations increased their hiring overseas by 4.4% in 2011 compared to only 0.1% increase for hiring in the U.S., according to the U.S. Commerce Department. Two thirds of multinational employment was in the U.S. in 2011, compared to three fourths in 1999. U.S. multinational companies provide about one fifths of all private employment in the U.S.

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Fomer U.S. Census Bureau officials Gordon Green and John Coder released a study by the firm Sentier Research. The study looks at two groups of Census data from 2005-2007 and 2008-2010, which has information on interviews with 3.5 million households for each period. The study shows 38 states with household income declining. The losses in income are greatest in the midwestern states affected by the loss of manufacturing industries. Incomes fell by 5.7% in the midwestern region of Indiana, Illinois, Michigan, Ohio and Wisconsin. Oil, shale and other energy producing states- Louisiana, Oklahoma, Texas- saw incomes rise by 0.3% from 2007 to 2010. This report looks at pretax income levels in 2010 dollars for all 50 states and 297 metropolitan areas. Michael Greenstone, professor of environmental economics at MIT, says the regional shocks from the economic crisis can last for a couple of decades. The Midwestern states showed median annual household household income decrease by 4.7% to $49,710 and the Southern states showed a drop of 2.5% to $47,389. Nationally for the U.S. the drop in annual median household income from 2007 to 2010 was 3.5% to $51,287. Another finding of the study was that of the top ten metropolitan areas with the highest percentile of incomes, nine were in Connecticut, New York and New Jersey, a region where the financial industry is based. Silicon Valley in California comes in at No. 10 in this list of metropolitan areas. In terms of growth of households reflecting migration patterns and new families the Mountain States of Arizona, Colorado, Idaho, New Mexico, and Nevada did as well as the oil patch states of Texas, Louisiana and Oklahoma, showing an increase in households from 2007 to 2010 of 5.8%....

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The Chinese government is concerned that lack of a safety net, fears about a general access to health care, and lack of other assistance for the farmers, elderly, rural poor, lack of unemployment protections and welfare, all are making Chinese to cramp up and spend less. Chinese households save a quarter of their income in normal times, now unless the government steps in a big way, which it has done only in small faltering steps, savings will increase even more in response to fears about the future. Lu Mai, secretary general of the China Development Research Foundation, says China has reached a point where it has to make a big decision, does it spend more on security and the police or on social benefits. He put out a report last week which estimates the government needs to spend 2.6 trillion yuan or 380 billion dollars by 2012 for the first phase of a social safety net. With a further spending of $838 billion dollars by 2020 to complete the improvement of health care, education, pensions for the elderly, low income housing, disability benefits, unemployment protections and welfare for the poorest. And these estimates may be low depending on the assumptions made, as the situation has taken a steep descent from the time these estimates were probably made. In the last few months tens of millions have been added to the jobless, and the severe drought has created a difficult situation on the farms in rural areas, even while millions of migrants return to these rural areas as businesses dependent on exports collapse in cities in coastal areas. What is the government allocation at this time? A target for health care overhaul of $124 billion was set recently. But the actual stimulus package is heavily skewed in favor of infrastructure and investment in construction. About 1% of the big stimulus package that was announced goes to health care and 7% to public housing. Says Zhuang Jian, an economist with the Asian Development Bank, this excessive investment in infrastructure, heavy industry and manufacturing will cause serious problems, if there is not strong consumption to match it. And Eswar Prasad of Cornell University, who was head of the China division at the IMF, says that an ambitious agenda is needed for higher social spending to take away the fears of average Chinese about the future. Chinese premier Wen says the government needs to do more, but the instincts of China's planners, and decades of development with built in incentives for promoting investment in construction, infrastructure and industry, have left China with huge unsustainable underinvestment in basics like education, health care and social benefits....

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Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.

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A professor of sociology at the University of Basel describes the growing inequality in Germany, in graphic terms. For the lower middle class the efforts to gain upward mobility are like trying to move up on a downward escalator. About one third of jobs are temp jobs which lack the protections of permanent jobs which were at one time 90% of all jobs. Her book is titled- "The Hidden Crisis; German Social Decline at the Heart of Europe." Nachtwey says on the surface Germany has become competitive and has maintained its growth rate, benefiting from the strong manufacturing sector with trade surpluses, low unemployment. Yet this conceals the underlying crisis of the cost which this has come at- a persistent erosion of the social compact of one elevator where everybody moved up together that was the norm in the early postwar period, fulltime employment, a strong welfare state. Job protections weakened, and while manufacturing sector pay remained stable or rose, less skilled and low wage workers suffered. This has also led to the fracturing in the vote with the fragmentation of political parties following the refugee crisis and the weakening of centrist parties. Voters are now open to different messages after the increase in inequality and uncertain economic future for the lower middle class. ...

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Whats different about the May unemployment numbers? The Labor department reported job losses were 345,000 in May, 2009, which is a drop from previous months. Manufacturing posted half of these job losses. Factory job losses have been aconstant inthis downturn, with losses of 156,000 in May, 154,000 in April, and the average monthly decline for the fourth quarter 2008 and first quarter 2009 of 171,000. Auto job losses are likely to be permanent, and further downsizing at GM and Chrysler could lead to steady job losses in manufacturing. The job losses in service related companies was 120,000 jobs for May 2009, much smaller than the 230,000 jobs lost in April, and much smaller than the average job losses of 334,000 in the fourth quarter 2008 and first quarter 2009. The steep losses in the service sector is unprecedented in ths downturn going back to the 70 years the Labor Department has tracked this data. But continued losses in manufacturing will weaken a recovery, especially as many of these jobs in construction and manufacturing are permanently lost. This recession is impacting men more than women because of construction and manufacturing job losses, blacks and hispanics more than whites, the less educated hit the hardest, and young people also hit hard....

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This article in the Guardian points out that Britain did not just wake up one morning and find itself in a strange predicament of leaving the European Union. This was happening over two decades as leaders appealed to immigration fears on the right to win voters and the leaders of the Labor party failed to protect their traditional working class base. Voter turnout declined and it points out that Cameron of the Conservative party won the election in 2015 with only 24 percent of the eligible voters, as the hold of the Conservatives and Labor parties declined with each successive election on their voter base as they desperately tried to shore up support by appealing to voters fears even as they literally abandoned their traditional voter base and appeared elitist to less educated, poor workers. The economic crisis and austerity policies created a new voter group of disaffected voters who turned to the UK Independence Party (UKIP) and the Scottish National Party (SNP). The referendum offered by Cameron in 2015 on the EU against the advice of coalition partner Vince Cable and the Liberal Party, without an understanding of the situation in the country after years of austerity policies was only one of a long series of developments that unfolded over two decades unraveling years of work building a better Britain following 1945. ...

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Brenner of McGill University and Fridson of S&P say the Bernanke Federal Reserve in the U.S. is doing what President Truman and Treasury Secretary Snyder did in the war and postwar years- paying down the U.S. debt as cheaply as possible by inflating the money supply. There are no new monetary insights here, and even though the policy is maintained outwardly as one to promote economic growth and employment, the main focus is to keep the cost of paying down the debt as cheaply as possible with low rates. This hurts savers and retirees earning very little on savings. They cite Bernanke's writings that show he is imitating the policy of the war years when the U.S. held down interest rates and succeeded in doing this for a decade.

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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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With so much coverage of other aspects of China,  to really understand China and Xi Jinping one has to understand the rural urban situation in China. Xi's long experience as a teenager in the cultural revolution of Mao was in rural areas, the 8 years he spent there till the age of 22, as this report by James Areddy with help of Yijun, Cheng and Qi aptly shows. It traces the shift and mass migration to cities starting with Deng's modernization drive in 1979. This shift of labor to city and town factories as the U.S. and Europe shifted factories and production to China is the story of our times. How it has both helped and hurt China and how it has become the dominant issue of our times, and a lesson for India in the middle of its own modernization and shift of labor to cities. It has helped China modernize with the shift during 1979 to 2016 and run into a road block with president Trump leading a movement in the U.S. of people most hurt by the outsourcing of factories and production to China. It was not meant to be this way. Yet the shift also led to ripping up the fabric of communities and towns with loss of factories across America over three decades. Because China is a large country the impact was huge decade after decade, leading to a backlash against lost jobs in the U.S. and in Europe.  Xi Jinping has romantic view of rural China as he spent 7 years in Shanxi province rural areas during the cultural revolution under Mao. During this period he toiled as part of farm labor alongside villagers which allowed him to get to know villagers and farmers in the countryside well, and formed his view of the world around him. As it is described in a description of the man in Chinese sources- "He arrived at the village as a slightly lost teenager and left as a 22 year old man determined to do something for the people."  China's system separated migrants from city dwellers not  giving same rights to better education, to schools and housing, and official documents separating the two, city dwellers and migrant populations from rural areas. As a result as China modernized and population shifted -shown here in excellent graphic charts over four decades- in 1979 from about 80% in rural areas and 20% in urban the shift goes to 50-50 by 2001. Today it is 40-60 with 60% in rural areas but a population of 40% suffering from severe inequalities and  low incomes. So that GDP per capita of $10,000 for China is deceiving. The real incomes in average disposable income is about $4300 in urban and $1700 in rural area, according to National Bureau of Statistics. High school education is hard enough to get in rural areas, medical care is very basic and the $1700 would hardly get a room in low income housing in a large town in China, says premier Li Keqiang. Keqiang did his masters thesis on urbanization and has studied this shift from his college days. Just as in Gandhi's India, Mao's China is the story of the villages, with 128,000 villages for 600 million people in Mr. Xi Jinping's anti-poverty drive. Hong Kong other issues have to be understood in the context of these concerns of China's leadership today- the sense that strong central leadership alone can keep the country together and bring a decent life to the people in the villages and in the countryside outside the cities.  Modernization of cities still set in the context of China's vast rural population and essential to its full uplift and progress. Xi has allocated $80 billion each year to bring roads, schools, medical facilities, and other amenities including electricity and modern heating. The idea now is to shift people back to the villages, find opportunities for jobs and livelihoods in farming, tourism with guesthouse facilities, and other occupations in the villages. The villages are being turned into attractive places to live one by one in this party drive and providing new enthusiasm and support for the party's efforts. India can learn from this experience in China. The western nations of the U.S. and Europe can no longer and will no longer undertake the wholesale shift of factories with loss of jobs to China or India to offer the prospect of bringing these countries to the kind of urbanization and overall prosperity of small nations like Japan and South Korea, which are a tiny fraction of the population of China and India+ Pakistan + Bangladesh. As a result China is changing strategy now with a return to some aspects of the informal economy in Chengdu with street peddlers and tiny retail, and return of migrants back to better built and improved villages in the countryside. A better life than in cities is possible this view says for people from these rural areas, if the rural areas are given modern facilities and construction and resources are allocated, job creation locally tackled. The villages can offer better air quality, better quality of life where villagers who earlier migrated to cities with ownership of land, when they are modernized with better roads and have better facilities for education, housing and healthcare, better amenities. The new approach is to strike a good balance for urbanization, by modernizing and investing in villages and small towns, so that cities can cope and overall life can be better than with mass migration and wholesale urbanization. It is also a balance that works well for the U.S. and Europe which can redirect manufacturing to their home regions as part of a better distributed and balanced supply chain than the one that was unwittingly built over the last three decades.    ...

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U.S home prices declined by 3.9% for the third quarter compared with the prior year, according to the S&P/Case-Shiller index of 20 major metropolitan areas. Prices are expected to be affected by an increase in foreclosed properties put by the banks for sale in coming months. Affordability has increased as prices are down by 31% from the 2006 peak and mortgage rates are at 4%. Yet as one appraiser puts it the problem remains one of tight credit and strict mortgage lending standards, and further home price declines could depress the market.

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Bernanke in reflections on his policies for quantitative easing in response to the 2008 financial crisis, says the policies were intended to protect Main Street and the average American, even though this is not readily apparent. He says the policies did not lead to inflation as critics have stated, and one has only to look at today's inflation statistics to know this- referring critics to the government CPI report in Jan 2014 that consumer prices went up by 1.5% in 2013 and less than 2% for 2012. Bernanke says he hopes he took the right actions, and still retains the conviction that the American economy will recover losses from the 2008 financial crisis- even though the answers to this questions won't be seen for some time.