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Feldstein says that for the 85% of the people who have healthcare the Obama proposals are not a good deal. The Obama proposals mean higher taxes in the long run to pay for the $1 trillion cost of healthcare for the uninsured group over 10 years. This lower income group has no coverage despite the $300 billion Medicaid program. Feldstein says there surely must be better and less costly ways of getting this lowincome group healthcare. Raising the top income tax rate to 45% from 35%- as a result of letting the Bush tax cuts expire and adding aproposed health surcharge on higher income individuals- would actually lower revenues for the government, as it would change behavior of high income individuals in ways that lower their taxable inome. The result is higher deficits and higher taxes when even without this large deficits are projected for the future. How to slow the rapid growth in healthcare spending? The Obama plan is to cut spending on Medicare. Feldstein sees the govenment's effort aimed at reducing the amount of medical services, as reduced spending comes from fewer services, not reduced payments to providers. Will this result in enough of acost reduction to make the system work. And if the cost reductions are too heavily weighted towards reduced services and not reduced payments to providers would this result in large cuts to services to affect the quality of healthcare for the 85% who are accustomed to a different pattern of healthcare, even though it is structured to allow cost escalation. Feldstein offers no solutions to the problems of cost escalation except to suggest that the Obama plan does not really tackle the cost escalation issues directly with providers, and instead burdens the national finances to an extraordinary degree. And the need for apause and reflection....

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The singer Pete Seeger about life after 90 - he turned 90 in 2009- and what he has learned over the years, and what he is still learning now. That includes homely stuff like how best to boil corn- he eats right, with less fat, less salt and sugar, which he says has helped him stay healthy. He lives in the house he built in Duchess county, New York. He loves to cut wood and describes the whack in cutting wood as something that started with man from the earliest times.

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American folk singer continued the folk song tradition set by Woody Guthrie with songs such as "Good Night Irene." He came from a family deeply committed to music, with his father a music teacher and mother a concert violinist. His own career spanned the period from the 1940's when he toured with Guthrie as part of the Almanac Singers, all the way to 2009 when he sang "This Land is Your Land," with Bruce Springsteen at the Lincoln Memorial. The key to the future said Seeger is to find the optimistic stories and let them be known. He lived in a wood cabin on 17 acres near the Hudson River in New York, and was the inspiration for other contemporary singers like Bob Dylan and Bruce Springsteen.

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Pictures and videos of creative ways in which Germany is responding in reopening its economy from DW.com. This shows how creative ideas are being used to seat people in restaurants, theatres, and music concerts. The Berliner Ensemble theater setup by Bertolt Brecht after the war is shown with new seating arrangement. The Dresden Palais Sommer,  a major summer festival will have 100 events from July 17 to August 23. Also open is the Frankfurt Book Fair. In every case the social distancing required by the German government till June 29 is being followed with a sense of good humor and willingness even when only a fraction of the capacity is used.

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The constructive influence of John McDonnell in the Labor Party. McDonnell played a part in running the Greater London Council and understands what it takes to run an administration. He sees the dissension in the Labor Party as a distraction from the very real task of offering an alternative to the fracturing in the Conservative Party over soft or hard Brexit. 

Labor Party still has about 40% support edging out the Conservatives and can be seen as ready to form the next government, says the Economist magazine.  What is important is Corbyn's continued ability to compromise to bring together different elements in the party and focus on big initiatives.

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Seib cites a career foreign service officer, William Burns, who says that China is offering its model of government as a competing model to that of the U.S. and Western Europe for Asian countries. He says he cannot recall a time in the last 40 years when China was doing what it is now in showing China as role model. Here Seib also mentions the Electoral College and the shift in demographics as creating strains for American democracy. The electoral college does not give enough weight to the largest states in deciding who wins the presidential election as happened in 2017- which gets worse in future years as people move to the west and southern states.

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Japan and South Korea which rely on the U.S. for defense offered only a mild response to president Trump's announcement of  25% tariff on steel imports. Australia also defended free trade but offered no response to the U.S. duties on Australian steel and aluminium exports to the U.S. of $388 million.  There was no criticism of Mr. Trump. 

Japan's prime minister Abe talked to Trudeau of Canada as a 11 nation group pushes ahead with the TPP or Trans Pacific Trade Agreement, and are set to sign the agreement in Chile this week, on  March 8, 2018.

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Ken Adelman, who headed arms control negotiations under Reagan with Russia under Gorbachev, says the Reykjavik summit in October 1986 between Reagan and Gorbachev was a failure because Reagan refused to give up the U.S. Strategic Defense Initiative. Months later Russia restarted arms control talks that led to 80% reduction in nuclear missiles and weapons. He says like Reykjavik the failed Trump Kim Jong-Un summit could lead to new talks with important results in denuclearization and normalization in the Korean peninsula. Both leaders Trump and Kim adore being in the spotlight and could return to continue talks he says. Failed talks are not always dead ends is the view expressed by Adelman.

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Critics say president Macron's appointment of an obscure official, a mayor of a town in the foothills of the Pyrenees (Prades with 6000 people), is a sign that he plans to be both prime minister and president for the remainder of his term. By selecting someone from the right wing Le Republicain party of Mr. Sarkozy, Mr. Macron now hopes to win reelection in 2020 with a shift to the right. His popularity at 35% is way below that of Edouard Philippe the outgoing prime minister who is at 50% of those polled recently.  Mr. Sarkozy and Mr. Macron represent a self focused presidency.

 

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In a piece of good news in the reopening U.S. job losses declined in May sharply to match levels seen before the coronavirus. In May 1.8 million workers were laid off from jobs, according to the Labor Department. This is down significantly from 7.7 million in April and 11.5 million in March. May job losses were in line with January and February job losses before the pandemic.

There were 5.4 million job openings in May also a good recovery sign. There are still 21 million Americans shown as unemployed in May. Overall U.S. job gains were 7.5 million jobs added in May and June, after 22.2 million jobs lost in March and April.

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Recovery of New York office space as vacancy drops to 15% in Manhattan office buildings from the 8% before the pandemic in 2019's final quarter. The Park Avenue $60 story tower that has head offices of Chase Bank is one of the recovery spots. The return ot office attendance is back up to levels before the pandemic in 2019, slightly higher by 1.3%. A younger workforce is attracted to work in Manhattan with short commutes from the suburbs around it.  The Park Avenue Corridor near the Grand Central Terminal Building is  another one of the areas with easy commute into New York City from suburbs.

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The Economist points to a second hit from bad debt in the post 2008 stimulus binge of spending in China. This is after an earlier hit, that was absorbed as a result of high growth rates and high savings. About $420 billion was injected into 5 state owned banks since 1998, according to one estimate, as a result of the first hit to China's banks from bad debt. In this second round of bad debt, covered in more detail by David Barboza in the New York Times, and merely alluded to here, many bad loans to infrastructure projects were rushed through by local governments. The Economist considers this one of the successes of the state directed banking system, that loans were quickly made and projects started in the post 2008 crisis period; and expresses the view that this hit will be absorbed just like the last hit. However the more detailed account by David Barboza and in Business Week, points to the working of a system of incentives gone astray in a capitalist system without the necessary controls or regulation. Local governments used investment companies to take on loans, which were then used to prepare properties to be auctioned off at a profit and speculative prices to state owned companies in different industrial sectors. This is part of rampant speculation in China in real estate markets. Can China with its high savings and growth absorb a second hit? This depends on the magnitude of the hit and the size of the bad debt, which depends on how long this speculative market continues to operate, and how bad debt is hidden in the books. The difference this time is that large state owned companies in different industrial sectors are engaged in this speculation. The other difference is that the high growth rates in China depend on continued large trade deficits with the USA and Western Europe, something which is not likely to continue for long, as consumers in Europe and the USA with high debt are becoming cautious spenders. This suggests that China, like the US with the mortgage crisis, faces the same effects of unregulated or uncontrolled speculative behaviours, that can endanger the banking system....

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GDP expanded at 3.5% in the fourth quarter of 2016, according to the Turkey Statistics Office. This follows a contraction by 1.8% in the third quarter of 2016. For the full year the GDP growth is 2.9 percent, a decline from the 6.1% in 2015. In 2015 Turkey gained from lower oil prices. This was offset in 2016 by the politics in the region- the increased instability in the country following a crackdown on the opposition and media, internal conflict in the Kurdish region which appeared for a time to be leading to peaceful settlement. As a result tourism revenues declined by 30% and this was offset by increased government spending. The uncertainty before the referendum also leads to decline in foreign investment and investment by domestic firms.

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Three new cable stay bridges are coming up in New York, the first between Queens and Brooklyn replaces the old Kosciuszko bridge and is already constructed, the second replaces the Tappan Zee across the Hudson river just 10 miles north of the Bronx, the third  replaces the Goethals between Staten Island and Elizabeth, New Jersey. The cable-stay design is becoming popular because of its aesthetic looks and because its easier and economical to construct. This gives a face lift to the city. Much of the work is done under the leadership of the State Department of Transportation, New York State Thruway Authority, Port Authority of New York and New Jersey. The Brooklyn Bridge built in 1883 has this kind of cable design but from an earlier era.

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According to Foresight Analytics in just 4 months the delinquencies rate for condominium builders accelerated from 5.9% in thrid quarter to 10% in fourth quarter 2007 for about $42 billion in condominium debt. The National Association of Realtors estimates that an oversupply that would meet 10 months of demand is where the condominium building ended up in 2007.

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The Economist cites estimates from the Bank of England showing Britain's national output peaking at 1.5 trillion pounds in 2007 and not likely to return to that level till 2015. It points to fears of a lost decade. Meanwhile debt is rising from 600 billion pounds in 2008 to 1.1 trillion in 2012, making reducing the debt to GDP ratio by 2017 even more difficult. Lower growth affects tax revenues even as social benefit costs increase. Part of the problem is that from 2009-2010 to 2011-2012 public sector net investment declined from 48.5 billion pounds to 28 billion pounds. The Economist suggests Chancellor Osborne take up an additional investment in infrastructure of 28 billion pounds, even borrowing 14 billion pounds in the bond markets if needed, as a prudent step to revive growth. Small improvements in rail, roads and bridges could make up for a lack of large projects. Other suggestions include expanding the "funding for lending" scheme with banks to get capital to small business, finding more savings in the National Health Service, and changing the way Britain taxes development land that remains undeveloped. Britain, now joins, Portugal, Spain, France and Italy, in the failure of austerity measures alone creating a return to economic growth and lower deficits. In 2013 improving competitiveness and boosting economic growth become critical following years of austerity measures....

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Laurent Berger, head of the French Confederation of Labor, C.F.D.T., is a moderating force in France as president Macron leads an effort to make a revision to France's labor code. With a large parliamentary majority president Macron is expected to push for a shift to a Scandinavian version of "flexible security," that allows companies and the economy to adjust the work force, introduce retraining and create flexibility so that new jobs can be created. His union is now the largest, after surpassing the militant General Confederation of Labor. Issues in labor changes proposed by president Macron are- direct negotiations between management and employees bypassing unions, and a cap to compensation in unfair dismissal cases. Berger's view is that though the interests of labor and management conflict, there has to be dialogue instead of constant confrontation. He is willing to see some jobs lost if business creates new jobs with improvement in the economy. Macron has summoned labor leaders for marathon talks. ...

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The size of Matteo Renzi's win in the nationwide primary, with about 70% supporting him of 2.9 million voters, suggests the mood is changing in Italy for making changes to the old system. Renzi talks about changing education, the government health system, taking a new look at union positions, and coming into a consensus with conservative voters. Renzi and prime minister Letta are moderates from a younger generation in Italy from the same party and need to work together. Angelino Alfano of the centre right is also from the younger generation, marking a shift in Italy.