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General Mills acquired a 51% stake in Yoplait for 810 million euros. This deal includes a 50% interest in an entity that holds the worldwide Yoplait brands. Sodiaal, the French dairy cooperative, will keep the remaining stakes. For 30 years General Mills has manufactured and distributed the Yoplait products in the U.S.

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Pharma stocks are in a slump, Pfizer having lost 40% over 10 years, even with reinvested dividends down 25%. For this reason, these stocks offer high dividend yields to attract investors, Pfizer at 6.5% and Glaxo at 5%. Uncertainty about patent expiration, thinning drug pipelines and uncertainty about new President's health care legislation.

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Over 4 million Italians are preparing to get back to work after 8 weeks in lockdown. Yet they face a major dilemma. How do you get back to work when schools and daycare centers are closed till the fall? They have to first figure out who will look after the children. Starting May 4, manufacturing and building businesses will reopen if following social distancing guidelines. Followed by shops, and public venues on May 18, and restaurants hairdressers on June 1. Other countries will be looking at how the reopening is tackled in Italy, and the problem of who takes care of children will also come up in the U.S. and other countries also. Grandparents were widely accepted as a solution for childcare in Italy. Yet this raises many questions about the safety of the grandparents and increases anxiety for the parents. The Italian government is providing financial aid to families for babysitting and more parental leave but this does not cover the costs. As they tackle this problem parents face additional stress and anxiety. ...

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Air pollution over New Delhi, India, and Lahore, Pakistan, is at "hazardous" levels, with a large surge in respiratory illness for people in the region.Some hospitals in the region are seeing triple the number of patients with breathing problems. The problem is aggravated by burning of stubble from the paddy crops by farmers in the nearby region of Punjab and Haryana. The levels of fine particulate matter PM 2.5 that are bad for lungs are hovering at dangerous levels of 300.  World Health Organization guidelines say 25 is the maximum level of exposure over a 24 hour period. Delhi administration responded by increasing parking charges in the city, and banning entry of commercial trucks, banning construction activity. This is a constant part of the news with many commentators critical of the way the central government, the Punjab government, and the Delhi government are tackling the situation, unable to enforce the ban on farm burning of stubble in the fields. Lancet medical journal points out that about 2.5 million lives in India were claimed in 2015 from air pollution. WHO puts 12 Indian cities in the top 20 for air pollution worldwide. ...

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Peter Navarro points out the problem with textbook economics and concepts such as comparitive advantage. Many economists from elite universities ignored for a long time the distortions in world trade arising from state subsidies as they used textbook economics without looking at what was happening in practice. Even as the U.S. runs a trade deficit of $ 1 billion a day with China such text book economists ignored for too long the advantages of state directed industries and state directed investments in creating distortions in trade patterns, and not creating a level playing field for the U.S. Here Peter Navarro desceibes what he calls afaux comparitive advantage built on high nontariff and other barriers. Auto tariffs of China are 10 times that of the U.S. Other barriers are intrusive licensing requirements and foreign ownership restrictions. With subsidized land and capital, export subsidies, and tax preferences, unfair trade advantages can be gaine d in many industries leaving the U.S. in a disadvantaged position. Mr. Navarro is assistant to the U.S. president on trade and manufacturing policy, and director of the White House National Trade Council. ...

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Bret Stephens in the NYT points out that the Iran Nuclear Deal did not have the support it needed to become a lasting agreement. He cites a Pew poll at the time of the deal showing 21% supporting it and 49% not supporting it. It lacked the two thirds support needed in Congress for a treaty to be passed. It was a J.C.P.O.A. or Joint Comprehensive Plan of Action not an Executive Agreement or a Treaty, says Stephens. France initially called for stronger safeguards so that the Agreement would limit the development of nuclear weapons. Only later did France and the EU come into acceptance of the deal.  Stephens points out the efforts to renegotiate the deal coming from the EU, and cites this as showing that a better deal could have been negotiated. Since the deal the conflicts in the Middle East have continued to grow, so that the constructive developments of advancing Iran's economic development and reducing the role of military conflicts were not addressed, say experts skeptical of the deal. ...

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 For the first time in 16 years a candidate is mounting a serious effort to challenge Mr. Erdogan's politics in Turkey. Muharrem Ince of the Republican People's Party says he favors reconciliation, end to discriminatory state hiring practices, end to politics of prestige, and a return to openness. Here a Republican party MP describes visits to parts of Turkey that were traditional and supported Mr. Erdogan as religious faithful since 2002, but which today are increasingly looking for a new path for Turkey. Mr. Ince has a flair in connecting to voters in a unique way, He is what he is- willing to debate Erdogan on television, visiting a opposition leader in prison, speaking out against the changes in Turkey under Erdogan and the failure of leaders in government to send their children to the Muslim schools they support. Inviting his sister to rallies where she wears a head scarf showing he also shares the same faith as a Muslim as Mr. Erdogan and does not put too much faith in symbols as he does in practice of humility. ...

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The country's past was a factor in the new prime minister of Thuringia, a state in Germany, resigning after a flawed election in which the FDP's head with barely 5% election support was made prime minister. This happened with support from right wing parties including odd combination of local CDU and AfD parties. Merkel on a visit to South Africa called for this to be reversed. The Die Linke Left party from post war East German roots was the leading party with 31% of the electoral vote, CDU at 22% and AfD at 23%, SPD at 8% and Greens at 5%. Because Die Linke has roots in East Germany's communist party CDU as centre right party had competed with Die Linke in the election.

The Left and the SPD had 40% of the vote and with the Greens and CDU in the centre had about 70% of the votes in Thuringia, making Merkel at the head of a CDU-SPD coalition keen to reverse the result of a FDP premier with 5%-23% support.

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Tom Rees the head of the Orniston Academies Trust with 35000 pupils in the UK says the status quo is unacceptable. In France a government report says restrict internet enabled phones to children over 13  years and to social media 16 years. This is the headline in today's The Guardian. Tom Rees says- We are seeing huge and real concerns around mental health, post-pandemic. These are not just self-reported, we’re also seeing real concerns about self-harm, attempted suicide, A&E admissions – these are facts from across the world involving young people and adolescents. “We’re seeing a clear correlation between that and mobile phone and social media use, in particular. Not all mobile phone use is equal and the relationship between that and adolescent mental health, we think, is overwhelming. “There is a responsibility for society to respond, and a responsibility for schools to make it harder for children to access inappropriate content through the school day and restrict the draw of social media.” ...

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Japan's new prime minister told the Japanese Parliament in a policy speech, that a crisis like that in Greece was possible in Japan, if trust in national bonds was lost and the policy of public spending to lift the economy was not reversed. This speech followed the resignation of Shizuka Kamei, as banking minister. Kamei was seen as an advocate of continued public spending. He cautioned that a policy of relying heavily on issuing debt could not be sustained for long. Japan has government debt of $9.7 trillion, which is close to twice its gross national product in 2009. Much of this debt is held by the public in Japan, but analysts have cautioned that with the aging population, it is possible that people who retire will need the cash from bonds, requiring the government to turn to the debt markets for financing. Among the proposals Kan suggested is raising the 5% sales tax to pay for rising social welfare costs for an aging population. Satoshi Arai, the new national strategy minister, says the government will draft a plan by June 22 to address the public debt. He said the government would not exceed $500 billion in bond issuance for fiscal year ending March 2012....

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Queen Elizabeth II gives her address to the British nation and Commonwealth on April 5, 2020, recalling the day in 1940 when she and Princess Margaret addressed the nation from Windsor. Elizabeth was only 14 years age then.

She said "we as children spoke from here at Windsor, to children who had been evacuated from their homes and sent away for their own safety."

"Today once again, many feel a painful sense of separation from their loved ones. But now, as then, we know deep down, that it is the right thing to do."

The address to Britain comes as deaths pass 5000, and there is a 25% increase in hospitals in the northwest of the country.

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We show here several articles from The Guardian on the topic of family time. Keir Starmer said he would keep Friday nights after 6 pm for family time. His wife Vic Starmer 50 years, works in occiupational health at the NHS and wants to continue her life as usual unaffected by Labour's and her husband's win. The couple wanted to stay at their north London home and not move to 10 Downing Street as the two value their privacy highly. One of the children is taking the GCSE's and the wish is for the family to keep going on as normal. Starmer says he also get a direct insight into the NHS from Vic Starmer's interaction with the NHS staff.

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Poor performance by UK Tories leader Kemi Badenoch at PMQ Prime Ministers Questions in the British parliament, broadcast on C-SPAN every Sunday at 9.00 pm US EST, is leading to speculation among Tories that she may not be around after local elections. Robert Jenrick who contested the leadership election is around says skeptics. Tories have changed leaders from  Cameron to May, May to Johnson, to Truss, to Sunak, to Badenoch, and now Jenrick? That would be the seventh new Tory leader since David Cameron assumed office in 2010. Then followed Brexit and Covid pandemic, and Labour taking office with the British now favoring being part of the European Union, all coming in full circle through 7 prime ministers in 15 years. 

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Madison Keys of the US makes it to the Australian Open finals with a show of resilience after years of competing in world tennis. Keys burst through mental barriers to beat Iga Swiatek this time after struggling since a loss in 2017 US Open at age 22 years. She is now 30 years and playing at her best overcoming mental barriers. Her record goes back to being a child prodigy at age 14, then struggling and now back in the game. She brings back memories of Althea Gibson in 1956, now on a US postage stamp. Not given the spectacular coverage  given to other athletes she brings a modest yet endearing manner, overcoming struggles in the way Althea Gibson had done in the 1950's.

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A native of Turin, who was a debonair lawyer then retrained as a physiotherapist, is beloved as "Alberto" to the Afghan people. He runs the Red Cross Afghan Rehabilitation Center in Kabul, and is the most loved westerner in Afghanistan. Its a visible location, but in all these years of war it has never been attacked. In the tradition of the Red Cross founded in 1860 as a neutral entity, the Red Cross's orthopedic centers make no distinction by political affiliation and help combatants on all sides because only the name is asked, as well as civilians who have lost legs to landmines. About 90,000 people have received new limbs since 1988, and 70,000 revisit the centers each year for replacement or adjustment of their prostheses, which last an average of 2 to 3 years for adults and as little as 6 months for children. All the treatments, including overnight stays at the centers that can run for weeks, are free. About 10 million mines were strewn across the landscape in the Soviet invasion from 1979 to 1988. Because most of these mines have been cleared by the UN and charities like the Britain's Halo's Trust, patients now recieve help for congenital deformities, polio, tuberculosis, and accidents as well as other war injuries....

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The Kingdom of Saudi Arabia is building huge aluminium smelters powered by crude oil. Some of these aluminum smelters are near new economic cities coming out of desert landscape. This is part of an effort to create new jobs for young people at the cost of about $600 billion. The Saudi unemployment rate for young people is officially 12%, but probably more like 24%, because there aren't that many of the kinds of jobs which Saudis would accept. But a smelter like one being built on the Persian Gulf Coast creates about 10,000 jobs, and even 10 of these smelters couldn't create more than 100,000 jobs, and takes up 600,000 barrels a day of Saudi production. With a population of 24 million there is a need to create more jobs in which these smelters make only a small dent. Most countries use natural gas for electricity and for a high energy consuming industry like aluminium use natural gas. Because Saudi Arabia needs a lot of electricity to power heavily subsidized and wasteful use of electricity and has not been able to get natural gas production upto where it should be, the government has made the decision to use its crude oil for producing electricity to meet its growing needs. This means a lot of crude is being used in a manner that its normally not used and quite wastefully because its heavily subsidized. Because of the soaring electricity needs the head of the Saudi Electricity Company sees the need for six big power plants to raise generating capacity to 55,000 megawatts over 7 years, about what the United Kingdom uses, all using crude oil. As production is not going up by that much it means more of Saudi crude will be used up in Saudi Arabia and not available for export. The figures show that Saudis used more than 2 million barrels a day in 2006, up 6% from 2005 when Saudi production dropped by 2.3%. Just to remain level with the current production of 9 million barrels a day the Saudis have to bring an additional 600,000 barrels a day each year to make up for depleted and declining wells. And it is becoming more difficult to increase capacity. Apart from the fact that more Saudi oil will be in future used up by a growing population, there is a question about whether the investments in aluminium, petrochemicals and new economic cities estimated at $600 billion in future years is the best allocation of resources to create jobs. If oil prices decline and oil revenues decline with prices then these projected investments especially in the economic cities and costlier projects may have to be abandoned In that situation there will be more oil available for domestic use but the situation for unemployment may not be much improved. ...

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1. GEOGRAPHICAL LOCATIONS WHERE STEAM INJECTION IS BEING TRIED TO GET HEAVY OIL OUT. Chevron has a pilot project for heavy oil reserves in Wafra, in the neutral zone between Kuwait and Saudi Arabia. Saudis are considering the Manifa field which has a large heavy oil component. Occidental Petroleum is planning to spend $2 billion on a large scale steam injection project in the Mukhaizna field in Oman. Kuwait is planning a pilot project to exploit its northern heavy oil fields. Three years ago the Geological Survey estimated that the world has more than one trillion barrels of heavy oil, mostly in Canada, Venezuela, and elsewhere in the western hemisphere. The Middle East has large heavy oil reserves which have been underestimated. 2. STEAM INJECTION TECHNIQUES TO EXTRACT HEAVY OIL. Heavy oil can be sludge like or thick as molasses is tough to bring up to the surface. It also contains more contaminants like metals and sulfur than light oil, which means in addition to extraction costs for steam injection there are costs for special refineries that can process heavy oil. Without steam the recovery rates for heavy oil reserves run as low as 5% compared to 35% for conventional pumping of light oil deposits. At the Wafra field a Chevron oil recovery project with the Saudis only 3% could have been recovered of the heavy oil, with new steam techniques this figure goes up to 40%. Costs for similiar steam injection widely used by Chevron in its Bakersfield oil fields are about $14 per barrel which leaves a hefty profit margin at today's prices. The heavy oil in the Middle East is different from Bakersfield in that its locked inside carbonate formations of softer rock with fissures. If steam leaks through fissures in the rock then its harder to heat the heavy oil and would cost more in natural gas that makes the steam. At Bakersfield some reservoirs have seen recovery rates go upto as high as 80%. The Wafra project will move into its 2nd stage with 16 injection wells and 25 producing well as well as the installation of water treatment facilities and steam generation facilities. Once the molasses like heavy oil is heated it turns into watery syrup, the oil drains down with gravity and is pumped out from outlying producing wells....

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For passengers air travel nowadays is travelling on planes that are often totally booked. This is because airlines are cutting flights. And with fewer passengers after the economic crisis hit, airlines are having a difficult time cutting flights enough to meet the continuing drop in the number of passengers. Before the crisis business and international travel was a good source of revenue, now this is fading as there is more competition on transatlantic routes with about 50 airlines offering flights between US cities and European cities. The liberalization of air travel between the two continents with the 2007 "open skies" agreement is keeping downward pressure on prices. The International Air Transport Association says the number of passengers travelling on business and first class tickets between N. America and Europe was down 18.4% in April 2009, compared with same month in 2008. Traffic between N. America and Asia was down 26%, for the same period. This is hitting Lufthansa ansd KLM-Air France hard, but is helping Easyjet, Ryanair, and Air Berlin. As demand drops airlines will continue to cut capacity, and this will be done by cutting the number of flights on a route and using smaller planes. After all this capacity cutting takes place by September, OAG Aviation estimates that the seats on domestic flights will drop to 66.5 million from a peak of 84 million in 2001, a drop of 21%. Some airlines which rely less on corporate travellers will not see as steep a drop. These airlines are Southwest, JetBlue and AirTran. Airlines that may not survive the effects of the economic crisis, with tight credit and drop in air travel, and volatile oil prices, are United Airlines and US Airways. United relied heavily on corporate and trans-Pacific fliers before the economic crisis. Fitrch Ratings cites this in reducing the credit rating for United to junk status, as well as the heavy debt maturities in 2009 and 2010. In June 2009 United raised $175 million by issuing new debt, but at an interest rate of 17%. At US Airways the combined airline with America West after a$1.5 billion merger is struggling. It has the thinnest cash position of any airline according to a Morningstar research analyst, and may need further borrowing to meet debt payments. With all assets already mortgaged US Airways may have little borrowing capability left....

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The Panic of 1907, the run on the bank for the Knickerbocker Trust Company, and its collapse. The intervention of JP Morgan that year came too late for Charles Barney, the President of Knickerbocker Trust, who shot himself and died after 4 hours. In the preceding years Knickerbocker went through rapid growth in deposits, and in 1903 Barney even had a huge Corinthian columned structure of Vermont marble, and a lavish banking room inside built at Fifth Avenue and 34th Street. See the pictures of that structure. It shows how things end up with rampant expansion. Growth, rampant expansion, flamboyant display, excess, crisis, panic, disaster and rescue. A cycle that repeats itself as new generations have no recollection of what had happened before, and no sense of history. With the expansion a sense of exhilaration and selfcongratulation makes way for abandonment of caution, excess, paving the way for disaster. And this hits those involved in the excess as the AIG's and the Citigroups, but also those who have gone to sleep like the GM's, and those who have some exposure like GE with its GE Capital business. What is different in today's economy, and true of the 1930's, is the global nature of this when the excesses are of a global nature, and the countries are intertwined. In this sense the current period involves Asian economies also, in addition to the European and American economies that was true in 1930's. The contrast with today is that a year later by October 1908 the panic had ended, and depositors of the Knickerbocker and other banks had received their money in full. A recovery was on the way. This was isolated to the US economy and to the banks. The global crisis of the 1930's was 23 years away. In 1997 the Asian economies like S. Korea, Thailand and Indonesia suffered a banking crisis, before this there was a finacial crisis in Mexico, and around this time a financial crisis in Russia. There were smaller crises like the LTCM crisis in the US but most were localized like the 1907 Panic. Now 11 years after the 1997 crisis in Asia, we have a global crisis and it is multifaceted, affecting banks, but also consumers and export driven economies in Europe and Asia with spillover effects. ...

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Detail about Tata's $2500 car. What it looks like- a jelly bean small in front, larger in the back for aerodynamics, 30-35 horsepower, with bearings good for 45 mph, top speed 75 mph, trunk in front to hold a briefcase and battery, rear mounted engine with continuous variable transmission, a hollowed out steering wheel shaft, engine designed by Bosch 600 to 660 cubic centimetres 35 hp. Tata CEO, Ratan Tata, says in a interview the car will do far better on emissions than today's low end cars, and that the emissions standards were much easier to meet than the crash and safety tests, because of the lightness of the vehicle. Todays lower emissions standards in developing countries makes it easier by not having to use more expensive technologies. Electronic sourcing and internet auctions are used by Tata to a greater degree, 30-40 % of parts sourced this way compared to 10-15% by other larger carmakers. This helps meet the aggressive cost target. On the safety isssue its interesting to note that most of the people buying this car will be millions of motorcycle families and individuals (typically a couple of people can ride an Indian motorcycle). They may be safer in a light car than on a motorcycle. This has to be seen in the particular context of India. Renault-Nissan used the experience of lowcost car engineering techniques and secrets from its Logan car made in Romania and transferred it to its other models. Tata started with a clean sheet of paper, asked the quesion what they really had to have and was there some other way. It was Ratan Tata's dream to build a car in 1 lakh or 100,000 rupees or about $2500. The project had all out backing and tested Indian engineers ingenuity. The Tata effort will be studied by carmakers from around the world. Bosch does not underestimate the value of this business, as the car will target a market of hundreds of millions of people in India and China and developing countries. Ariba a supplier to Toyota, and BMW a supplier to Tata, helped Tata buy parts through electronic sourcing. China's Cherry Automobile company, another pioneer, had an Austrian firm help it design its engine for its small car. Tata worked with German company Bosch on the engine. And both must have used cutting edge technology but with a different goals and specifications to achieve unique tasks....

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Nickel cadmium batteries - this year 2008 the European Union is banning the sale of all nickel cadmium batteries. Question is why is the US not banning them. And why are companies like Energizer, Duracell, P&G, Mattel, Toys R Us and Walmart still buying them? Why is Panasonic making them? A toy costs $1.50 less to make using nickel cadmium batteries. Are parents aware of what it does to workers making them? Are plants safe in developing countries especially in corruption prone coercive environments like the one in factories in China? Some of the owners of such factories are in Hong Kong, Hong Kong based companies, are they aware enough of the risks and the ethics of doing is? This story is of an engineer who was exposed to factory conditions in a company GP that was supposed to be a good company to work for, and few knew about the effects of cadmium in the year 1995 when she joined. The Panasonic factory is in Wuxi which is not in some remote part of China. And note this about 10% of China's arable land is contaminated with heavy metals such as cadmium according to China's own State Environmental Protection Agency, and the metals are entering China's food supply. 12 studies have shown unsafe level of cadmium in fruits and vegetables. Is this a necessary price of industrialization or is it possible to find a way thats better- a challenge for countries like India. Can there be better protection of workers and still have industrialization? Wouldn't it make sense that a motivated well treated work force will perform better in better working conditions. Aren't there costs involved for workers and owners of such plants. Owners also bear costs, bad press, medical payments, workers leave and good workers are hard to find in the wave of bad publicity and health risks, customers in the west refuse to buy the product, the company's brand name is tarnished forever, as would happen for GP in this case. The coercive patterns of using police to suppress publicity for a Hong Kong Company shows owners in Hong Kong have the same disregard for worker rights, even when living in an area that one hears talk about democratic rights. See the link to chemical spills contaminating a river in China also by a Hong Kong based company. ...

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The documentary "Last Train Home," directed by Lixin Fan, shows the life of migrant workers and their families in China. Fan sporadically spent 3 years with one family, Zhang Changhua and Cheng Suqin, to capture glimpses of this family's life as one of China's 130 million migrant workers. The family left a village in Sichuan province, to work in a factory in Guangzhou, which manufactures denim jeans. For 7 days a week -once working 15 hours a day for 29 days straight- the Zhang family works continuously, just to send money back home to the grandmother who raises 17 year old Qin and another child. The daughter is rebellious as she is resentful of the parent's absence. This is the story of migrant families throughout China, the quiet hidden ordeal, that is behind the cheap products available in western countries. And Fan documents this well with scenes at the railway station, as the family catches the last trains back to Sichuan, for the yearly trip back to the village. There is a whole society in transition, and there are many sides to this story, this is the human one of families caught up in this transition. Lack of farm subsidies and taking over of farmland for building and construction has hurt life in agricultural areas. The Communist party has made dissent difficult. And the imposition of a decades old registration system that denies education and social services to migrant workers from the villages, creates huge strains on family life. Fan says- before the showing of this film at the IFC Center in Greenwich Village- that he hopes to raise questions in the minds of viewers. Does the blame for this go to the government, the factory owners and companies, or the West, something Fan says he is not able to answer. That there is little official opposition to the film- in the same manner that the suicides at Hon Hai, and the factory conditions there and in other factories across China, are being freely reported- suggests that China is coming to terms with the different angles from which to view the economic transition that has taken place over the last two decades. It is also a belated recogniton of the whole range of questions raised by a singleminded policy of manufacturing for western markets, especially when these markets with debt-laden consumers may present huge uncertainty in the future....

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London's new Crossrail system adding 10% to existing rail capacity, about 200 million passengers a year.

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Keith Bradsher's NYT interview with Raghuram Rajan, Governor of the Reserve Bank of India, comes when Rajan has come under criticism from the business sector and the small business support base of prime minister Modi's party. The criticism centers on the drop in oil prices since Nov. 2014, and Rajan's failure to drop interest rates at the Dec. 2, 2014 central bank meeting. Rajan says it was not clear whether oil prices would remain low for an extended period at the Dec. 2, 2014 meeting. Since then new inventory data, EIA estimates and OPEC policy guidance have confirmed low prices will remain for an extended period. Rajan lowered interest rates on Jan. 14, 2015, by one quarter of a percentage point. Under India's setup the central bank chief makes decisions on interest rates, compared to the decisions made by the Federal Open Market Committee at the U.S. Federal Reserve. Rajan says there is full understanding between the central bank and the Modi government economic team led by finance minister Arun Jaitley, Jayan Sinha, deputy minister of state for finance, and chief economic advisor Arvind Subramanium. Modi and Jaitley prefer to rely on the advice and policy direction of economic policymakers with long experience in the U.S. and international circles. Both Subramanium and Rajan bring this level of experience and expertise. Subramanium brings experience from his years at the GATT which preceded the WTO, the IMF, and the Peterson Institute of International Economics, and Rajan brings experience at the University of Chicago, and as chief economist of the IMF. Modi is a dilgent listener and policymaker giving careful attention to the best advice, making it unlikely that Rajan would be seen as a holdover from the administration of Manmohan Singh. Other criticism that the business sector has made of Rajan are as financial regulator in asking state banks to increase collateral required from large business firms for large bank loans. Rajan points out the need for business to bear the costs as well as the benefits of taking risks. Under previous governments the state banks allowed large firms to keep their holdings at companies even when the risk taking resulted in losses. Rajan has also not tried to reverse the sharp decline in the rupee, which hurts business firms which took on dollar denominated loans. Rajan has instead followed policy of building up the reserves by buying dollars. The reserves were depleted in 2013 by a policy of currency interventions to reverse that decline. Inflation in India reached 9.9% in Dec. 2013, with policy of the central bank under Rajan set to bring it down to 8% in 2014, and below 6% in 2015, so that India could get out of the trap of persistently high inflation with slow growth. This is critical for a new Indian success story. A goal set by Rajan in Oct. 2012 when he was appointed as central bank chief, was to increase foreign investment and encourage new business so that India was no longer dependent on large companies for growth. This is also critical for a new Indian success story, as the Modi administration and the central bank are both keenly aware. Just as Bernanke and now Yellen at the U.S. Fed face criticism for quantitative easing monetary policy, focus on the high long term unemployed, and not focussing on inflation- with their focus on the long term economic recovery in an environment of low inflation below 2% in the U.S.- India's Reserve Bank faces a different kind of criticism for careful and prudent policies to ensure long term growth....

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On Jan 19, 2023 the US hit its debt ceiling of $31.4 trillion. Republicans control the House of Representatives by only a few votes after a strong showing in midterms by Democrats who control the Senate. A small section of the Republican party insists that raising the debt ceiling- a task performed by the House of Representatives- should only be done with serious cuts to Biden programs to help workers and families during a cost of living crisis. Biden says he will not negotiate, simply won't.  This report in NYT by Jim Tankersley, says president Biden in the last resort could resort to the 14th Amendment which says: "The validity of the public debt of the United States, authorized by law, including debts incurred for payment of pensions shall not be questioned." What this means is that in the last resort if Republicans insist on serious cuts because of a faction within the party, and not because the whole party supports it, Mr. Biden could continue public borrowings to pay social security and make other payments. Moody's says this would lead to a rise in borrowing costs temporarily but would not lead to a recession, and have long term benefits as the debt ceiling could not be applied in the future. It would be challenged by Republicans and go to the Supreme Court which would have to decide on the issue: "the validity of the public debt of the United States shall not be questioned." This drew 1338 comments on NYT. ...