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Moritz Kramer, a managing director at S&P, says Spain, Italy, France and Portugal cannot depend on austerity measures and cuts in spending alone to resolve the eurozone crisis. This is only one aspect of the problem facing the countries in southern Europe. The major reason for the problem is the lack of competitiveness in their economies. Nobel winner Stiglitz also points this out and adds that its important to note that the human and natural resources of Europe are the same and the potential just as good today as before the eurozone financial crisis. He says southern Europe has failed to utilize its human and capital resources and improve its technologies in ways that would make it more competitive with Asian countries. Experts point to the decade it took Germany to address problems created by inflexible labor markets, wage competitiveness, and investments in technology and human resources to get to where it is today.

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This Journal editorial on Oct 5, 2012, says that by not offering leadership in the Syrian conflict beause it would lead to a wider conflict the U.S. and the European Union face a wider conflict. The current crossborder shelling between Syria and Turkey is the latest evidence of this. Turkey and the Saudis cannot handle this on their own. Without U.S. leadership the costs of this conflict will be even greater, and even poses risks for the Turkish economy if handled badly.

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A report released by the Organization for Economic Cooperation and Development (OECD) shows growing income inequality in 34 OECD countries. OECD Secretary General, Angel Gurria says: "The social contract is starting to unravel in many countries. This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that the greater inequality fosters greater social mobility. Without a comprehensive strategy for inclusive growth, income inequality will continue to rise." Countries with the largest ratios between incomes at the top and the bottom, are the United States, Turkey and Israel, roughly 14 to 1. Germany, Denmark and Sweden have ratios of 6 to 1, with their ratios up from the 1980's. Gaps in Chile and Mexico are at 25 to 1. The study covers the period from 1980 to 2008. Overall inequality went up by 25% in the U.S. from 1980. In 2008 the top ten percent in the U.S. earned $114,000, 15 times than incomes for the bottom 10%. The top 1% of Americans saw incomes go up from 1980 to 2008, increasing from 8 percent to 18 percent. The richest 1% having $1.3 million in after tax income, and the lowest 20% making $17,700. The trends have accentuated an increase at the highest end- the top 1% and top 10% of the people- and a sharp decrease for the bottom 20%, which can be grasped from the $17,700 and the $1.3 million, both at extreme ends. The study attributes the rise in inequality to a growing gap in wages for highly skilled workers as technology advances, a surge in foreign direct investment and a looser regulatory regime that reduces employee protections leading to wage premiums for financial jobs and smaller incomes for workers at the bottom. Income groups and professions and sectors that had the greatest influence in government were able during this period to get the greatest protection for incomes, and able also to maximize their incomes. Incomes in the financial sector increased dramatically in the last decade, as a result of deregulation leading to higher risk and speculative activities in the financial sector, leading to the financial crisis of 2008-2009. Financial crises further depress incomes at the lower end. Similiar income inequality trends can be seen for India and China. China has a Ginni coefficient of 0.5 according to researchers at Beijing Normal University, up from 0.3 three decades ago- a Ginni Coefficient above 0.4 is considered destabilizing. Another factor that played a part in these countries is corruption and lobbying by special interests for favored treatment of sectors or groups. Austerity measures taken in Europe and in the U.S. are likely to widen income gaps by depressing the lower end income groups, creating social unrest, especially in the absence of efforts to stimulate growth....

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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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This Journal editorial points to the 3 page letter from Gen. Dempsey that make a U.S. response in Syria seem difficult and laborious, cost $1 billion a month, and endless. Gen. Keane points to the Syrian air force operating from just 6 main air strips and with about 50 aircraft out of 100 operational, using this to terrorize the opposition and the countryside indiscriminately including civilian population. Taking these out with cruise missile and other strikes is all that is needed, not even a no-fly zone says Keane. Short of a proper response the U.S. and the Obama administration could only end up leaving the Assad regime in place for longer, says the Journal. Aid to rebel groups that can then do the work of completing the transition is the right strategy, says the Journal.

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Nawaf Obaid, a fellow of the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government, is also senior fellow at the King Faisal Center for Research and Islamic Studies. Here he describes the events leading to the Saudi turndown of a seat on the UN Security Council. The Saudi foreign policy establishment made this decision after several weeks of debate in Jeddah considering the U.S. and Russia's effort to make only a muted criticism of the use of chemical weapons in Syria in the Security Council; and the U.S. effort to have the British, French and Saudis give up on demands for firm language in a Security Council resolution on action to be taken against the use of chemical weapons. For the Saudis, says Obaid, better not taking a temporary seat on the UN Security Council, than to be left a docile member without its own voice and the voice of others in the international community being heard. Obaid also points out that this is the beginning of Saudi effort to exercize its own influence in the Middle East, as it faces three separate developments in 2013- the Iranian rapprochement with the West under new president Rouhani, the Arab Awakening and the new consciousness in the Middle East, the U.S. policy under president Obama of not taking leadership in the Middle East. This also comes as the Saudis parted ways with the Obama administration on the role of the military in Egypt, and has differences with Turkey and Quatar on support for Islamic groups in Egypt and Syria....

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This WSJ editorial in September 2014 says many of president Obama's statements and decisions on Obama healthcare legislation and implementation, Syria, NSA and privacy, the Middle East, Russia, showed poor judgement. It refers to a piece by Peter Baker in NYT where it is said that Obama mocked how people see him as too professorial, diffident, in a sarcastic statement. The problem says WSJ is that president Obama has poor judgement. Being academically credentialed and quick grasp of subject matter is not the same as having the ability to discern things, instinct and grasp of the essence of the matter. George Bush senior had a long resume and was academically credentialed. By comparison Truman had a short resume and was not academically credentialed or quick with data and analysis. He had something more essential and important- a discerning mind and grasp of the larger picture, as well as listening abilities for exceptional advisors such as General Marshall and Acheson he gathered around him....

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A leader of the Syrian moderate democratic opposition to the Assad regime calls for help from the Obama administration for the moderates and Free Syrian Army. The request for Manpads to counteract Assad's air attacks and the deteriorating situation around the city of Aleppo and in Northern Syrian areas controlled by the Free Syrian Army. The collaboration between the Hezbollah, Assad's forces, and the ISIS as each attempt to increase the areas under their control pushing out the Free Syrian Army and moderate forces fighting the Assad regime. Hillary Clinton comes out against the Obama administration's policies in August 2014, saying "don't do stupid stuff" basis of Obama policies is not the basis for a sound foreign policy. Obama comes out with a $500 million aid plan for the Free Syrian Army but the approach is vacillating and slow, leading to a rapidly deteriorating situation, and a complete breakdown of what was a period of hope called the Arab Spring.

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Krugman says austerity measures alone won't work as the economies in the eurozone shrink in 2012.

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Germany went through a period of stagnant growth and persistently high unemployment leading to reforms of the welfare system and entitlements under the Schroeder administration. The reforms led to lower unemployment benefits and an effort to get the unemployed take up jobs. Instead of unemployment benefits that amounted to half the salary indefinitely, unemployment benefits ended in 12 months under the reforms, and workers were forced to take up jobs or dig into their savings. The cuts to benefits led to more of the unemployed taking jobs that were not their first choice with lower incomes. Unions agreed to defer wage demands and wages remained relatively flat for a long period. The "kurzarbeit" system of government subsidizing employers to retain workers during economic downturns, helped cushion the workforce from ups and downs in the economy. Unemployment which was in double digits a decade ago, is now 6.1%. The system still preserved some other aspects of generous benefits- parental leave of 14 months at two-thirds salary, vacation time and publicly sponsored health insurance. Recent changes include raising the retirement age to 67 from 65. The Organization of Economc Cooperation and Development estimates that the 200,000 jobs saved in Germany during the recession of 2008-2009 cost the government $7 billion. Government funds helped companies retain workers by paying a portion of worker salaries and averting layoffs.This comes to $35,000 per job. Compare this with the $38.9 billion allocated to a loan program at the Energy Department under the U.S. stimulus. 8050 jobs were created under this program according to the Washington Post- for the money spent so far in Sept 2011- 2 years into the loan program, of $19.3 billion. This comes to $2.4 million in government guaranteed loans per job. The Energy Department says that 33,000 jobs were saved under the $5.9 billion that was given to the auto industry under this program for investments in manufacturing to improve fuel efficiency. This comes to $178,000 per job. The Energy Department and Congress estimated a 5%-10% loss on the $38.6 billion loan program for loans that go sour, such as the Solyndra solar company $535 million loan. This comes to $1.9 billion at 5% loss and $3.8 billion for a 10% loss. The purpose of these figures is to show the cost of programs when the programs fail to achieve job goals or produce too little for the investment. The $3.8 billion loss under the program is over half the $7 billon Germany invested for the 200,000 jobs saved as estimated by the OECD. That ranks as a far superior investment than the Energy Department program. For the U.S. there are aspects of German reforms such as "kurzarbeit" that bear emulation, with serious questions about the effective use of the U.S. stimulus funds. For the rest of Europe the stingier unemployment benefits, raising the retirement age to 67, and other reforms send a different message. From the average German the message is: we made the tough changes, the rest of Europe cannot expect Germans to pay higher taxes while they put off similiar changes. Italy needs to change its retirement age, just as the Germans have done. As Chancellor Merkel puts it: "People in countries like Greece, Spain, Portugal shouldn't be able to retire earlier than in Germany. It's important for everybody to put in effort to make it roughly equal. Germany will only help when others really make an effort." Which is why Greece, Spain, Italy, even France are faced with making serious changes. This isn't stalling when it comes to euro bonds, from the German perspective. And it isn't about the lack of committment to the idea of a European Union, as all major political parties in Germany, the CDP, the SDP and the Greens, all strongly support the idea of a European Union. ...

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Defense Secretary Gates does not see Russia as the threat it was in the Cold War, first because Russia's conventional forces are a "shadow" of what they were during the Cold War, and Russia has adverse demographic trends that will diminish Russia's ability in conventional forces. He sees the Georgian war in the context of Russia's seeking to exorcize, as he puts it, past humiliations. And Gates sees opportunities in the relationship with Russia. Such things as Russia's willingness to work with the US on Afghanistan. Evidence of this is Russia supporting the renwal of the UN resolution on Afghanistan. Another indication is that Russia he says is very worried about the drugs coming out of Afghanistan, and has been supportive to provide alternative routes for Europeans to get equipment and supplies into Afghanistan. These views come across in an interview on December 17, with Charlie Rose, a five time elected Congressman, for the PBS Charlie Rose show. They are also reflected in an article in Foreign Affairs journal's current issue. Gates was a CIA analyst and has some insightful observations. Gates told Charlie Rose that he does not see the Islamic radicals and violent Islamic extremists as a threat in the same way as the threat in the Cold War years. This threat is not as big as the threat to freedom during the Cold War. He says the failure in strategic communications was huge as agencies of the US government engaged in activities in other countries, like the Agency for International Development and the US Information Agency, were neglected starting in the in the 1990's. Communications in other countries of what the US represented and stands for was left to the Pentagon, a role the Pentagon was ill-suited for. He sees the Islamic terrorism as more of an ideological conflict. Speaking at a town hall meeting at the Balad Air Force base in Iraq, in December, Gates pointed to these communications failures as a real challenge for the new administration. But he now sees a huge opportunity in this past failure, and ways of addressing it creatively, in addition to commiting resources and people to this effort. Walter Pincus wrote this article, and its part of the fineprint analysis effort at the Washington Post in which speeches, reports, and other documents are examined by people like Pincus, to catch the really important things, uncovering the fine print that really makes the headlines. Another aspect of this fineprint effort is that there are a huge number of reports, and speeches and documents that had a tone reminiscent of the Cold War during the Georgia war and yet they do not correctly reflect the real situation about Russia, as Gates sees it from his analysis of what is actually happening. Gates has used Foreign Affairs, the Dec 17 Charlie Rose Show on PBS in which he was interviewed, and the speech at the Balad Air Force base in Iraq, to communicate his views and analysis. They are important to underline and emphasize precisely because they show that all that cold war hysteria reporting and speeches may be misleading and lead to improper conclusions and mistakes in policy, wasted effort, wasted resources, and lost lives. And just as the US strategic communications was starved of resources and effort, so also this necessary work to retrieve and give emphasis to the important things is neglected. One additional link to this is the speech, discussion, and QA session in Washington DC at the time of the G20 summit in which President Medvedev and the new administration's elder statesman and diplomat Marilyn Albright, former secretary of state, expressed their hopes and plans for a new era in Russian-American relations. ...

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This WSJ editorial points out that the lack of action from the Obama administration has led to the current situation in the Middle East with Russian intervention, the wave of refugees from Syria, and the increasing sectarian conflict. It cites from president Obama's address to the UN General Assembly that "the nations of the world cannot return to the old ways of conflict and coercion," yet failing to take action in the Middle East to prevent this from happening.

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U.S. president Obama called Libya and the policy of not following up on helping establish a stable democratic government in Libya his biggest mistake. Kristof of the NYT says people looking back would say Syria and not establishing safe zones is Obama's biggest mistake. He describes the 470,000 deaths in Syria as a huge tragedy that could have been avoided to a large extent by setting up safe zones. In addition the UN estimates that millions of refugees on a scale similar to the partition of India in 1947 were created.There is bipartisan opinion on this. Kristof cites General Cartwright's opinion in a conversation he had with Cartwright that this should have been done. Others who agree are Madeleine Albright, Bill Clinton's Secretary of State, who spoke at the Democratic Convention about how America helped change her life as a young refugee after Russia's invasion of Czechoslovakia following Prague Spring. Albright says force should be used carefully so as not to aggravate the situation but action taken where needed, something that was done successfully under Bill Clinton in the Bosnian conflict following Serbia's ethnic cleansing policy under Milosevic. Not only that, with the diplomacy of ambassador Holbrooke Clinton was able to negotiate the peace accords that hold till today- a huge achievement.  Kori Schake, director of defense strategy in the George W. Bush White House also agrees. This would have improved U.S. relations with Turkey as this was a key Turkish request. And it would have reduced the dimensions of the refugee crisis in Europe, which has hurt the European Union. The Brexit "No" vote many in Britain have attributed to ads showing refugees in endless numbers streaming across Europe's borders. Similar ads were used in Austria's elections. Kristof points out that Secretary of State Kerry's job of negotiating a peace is difficult in these conditions. Another issue raised by Kristof is the lack of Obama's leadership in helping the refugees in Jordan, Lebanon and Turkey, as he points out only 41% of this is funded. David Miliband former British Foreign Secretary, who heads the International Rescue Committee , says 200,000 Syrian kids are growing up in Lebanon without an education. George Washington counseled against getting involved in the wars on the European continent for a young nation, this advice was not followed in the Reagan and other administrations without showing the carefulness needed before action is taken. As Hillary Clinton has once pointed out the situation has resembled a pendulum swinging in the other direction under president Obama, and former Defense Secretary, Panetta, has expressed similar views. Hillary Clinton and Leon Panetta, Gates, Gen. Jones, served in the first term of the Obama administration, many of these mistakes were made in the second term by president Obama and his White House advisors Dennis McDonough, Valerie Jarrett who clearly lacked the deep foreign policy experience of Hillary Clinton, Leon Panetta (who served under Bill Clinton), and Gates who served under many presidents). ...

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O'Malley, Sanders, and Clinton emphasize the issue of wages, income disparities, rising inequality, and a shrinking middle class in the first Democratic debate of the U.S. 2016 presidential election. Clinton points out that "at the center of my campaign is how we're going to raise wages." Sanders says that "the middle class of this country for the last 40 years has been disappearing." Clinton points out her opposition to the Trans Pacific Partnership trade agreement because it does not help raise American wages. Clinton calls herself a progressive, but "a progressive who gets things done," and a moderate when it comes to getting things done. Sanders points to the "deep injustice, an economic injustice that threatens to tear our country apart, and it will not solve itself." Sanders points to the wealth concentration in the U.S. "with the top one tenth of 1 percent owning about as much as the bottom 90 percent, and 57% of all new income going to the top 1 percent." Clinton comes to Sanders defense on the issue saying "it's our job to rein in the excesses of capitalism so that it doesn't run amok and doesn't cause the kind of inequities we're seeing in our economic system."...

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Former Defense Secretary in the second term of the Obama administration, Chuck Hagel, says U.S. president Obama hurt his credibility when he failed to act on his own comments of a "red line" being crossed following the chemical attacks in Syria by the Assad government. Hagel was critical in an article in Foreign Policy magazine of the way the national security advisor, Susan E. Rice, ran discussions on foreign policy issues, with too many meetings and discussion followed up with deferring difficult decisions.

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Friedman on the ouster of president Morsi after only one year in office following large scale protests. He sees this as the beginning of a fallback of political Islam, with the protests of secularists in Turkey, the shift to a moderate candidate Rouhani in Iran's presidential election, the shift of the Emhada Islamist party in Tunisia to work with center-left parties in writing the constitution, and the election of a western educated political scientist to lead a coalition government in Libya. In each country the secular and liberal leaders and the young people felt the revolution was being stolen from them by Islamist parties and are asserting themselves to gain a voice in government. The Islamist party in Egypt has older leaders, an authoritarian structure and hierarchy, which failed to incorporate liberal and other opinion in writing the constitution and in forming the government. A more tolerant and open Islamist party needs to be part of a broad based government with other parties, which can focus on the economy, unemployment, infrastructure and public services....

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In its May 2011 special report on international banking the Economist points out the need for banking regulators to take stronger action than they have so far. What it calls "pre-emptive insurance" it says is needed - stronger regulation, larger capital cushions, and some form of separation of different kinds of banking. Without this the dangers of excessive risk taking and banks that are "too big to fail" will continue to threaten the world's economy. Banks that are smaller and better capitalized says the Economist can fail more gracefully than the large mega banks that exist at this time. In fact the banks today in the U.S. are larger than at the time of the 2008 crisis. Other analysts also point to the lack of major changes in banking and financial structures today compared to the situation before the 2008 crisis, both in Europe and the U.S.

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This article by General James Jones is the second from the highest ranks of the Obama administration, saying the entire Middle East policy of U.S. president Obama was flawed and could lead to dangerous consequences. Gen. Jones, former National Security Advisor to Obama 2009-2010, says the situation today is worse than in 1991 when the U.S. launched Operation Provide Comfort to protect Kurdish refugees in Northern Iraq from Saddam Hussein, with an engagement of about 5 years and 25,000 Allied troops. Jones says the crisis in Iraq and Syria is of an order several times worse than 1991 and at any time since the 2003 invasion, as it involves the setup of a terrorist ISIS state in the heart of the Middle East. What went wrong? Jones says all the warnings from other Middle East nations about Maliki's corrupt policy and sectarianism used to stay in power turned to be true. Even Maliki's own advisors and colleagues say in a separate report by Matt Bradley that Maliki battled not for the Iraqi state but only to preserve his own power. Jones calls the U.S. president's decision not to act in Syria when the "red line" of use of chemical weapons was crossed, the failure to maintain a limited military training presence in Iraq after 2011, and not insisting that Mr. Maliki arm the Kurds, as having gravely aggravated the problem in 2014. Jones calls for arming the Kurds directly with sufficient weaponry for defending their region and providing immediate expanded aid to the Abadi government, appointment of a special envoy to ensure direct and immediate communications with Baghdad and with Kurdish, Sunni and Shiite leaders. He calls also for close air support of Iraqi and Kurdish operations, and an aggressive diplomatic effort to unify the Middle Eastern nations to remove ISIS from the region. Jones says this is the right thing to do in the name of all the Iraqi people yearning for peace, for the U.S. service personnel who made sacrifices in Iraq for 23 years, and for U.S. national security....

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A recent book "The Spirit Level" has become popular in Britain. It says that countries with greater disparities in income also do worse in a number of social indicators, from higher murder rates to lower life expectancy. It also affects the consensus in society which is a necessary underpinning for sustained economic development and economic growth. Inequality when it affects the middle class and reduces the size of incomes in the middle, or creates stagnation in incomes, poses large risks for society and affects economic growth. In the US the home foreclosure crisis and the lack of bargaining power of wage earners in the middle class has created this problem. This is exacerbated by the banking crisis and bad loans in the banking system. Studies show that slow growth in college graduating rates in the USA after 1970 compared to the period 1900-1970, has increased inequality, especially with today's knowledge economy. Germany is also affected by this problem as wages for workers have remained stagnant with the labor reforms. Interestingly a combination of economic growth and payments to the poor have increased the size of the middle class and its incomes in Brazil. The austerity policies in Britain will affect incomes and income growth in Britain for the middle class. In China the gap is widening quickly between the urban areas and the rural areas. And the policy of residency permits- the hukou system-which limits internal mobility from rural areas to the cities and towns, makes the inequality all the more glaring. The lack of democratic election makes the situation worse in China compared to Brazil, because free elections in Brazil enabled leaders from the working classes such as Luiz Inacio Da Silva and Ms. Rousseff to emerge as heads of government. These leaders pursued policies that would explicitly bring a more shared prosperity in Brazil compared to the leadership in China. In China policies are determined by entrenched interests in its model of development- the state-owned companies and banks and their managers, local and government officials of the Communist party, and businesses with the networks and connections with the Communist party and local governments. This is why the ginni coefficient which measures inequality has dropped significantly in China, putting it in the rank of developing countries with poor records in equality. Inflation in China, India and Africa also affects the poor and lower middle classes to a greater extent. Current trends suggest that rebuilding the middle class in the developed countries and providing fairer distribution in developing countries will be of serious importance in coming years. Especially with the likelihood of more economic crises which tend to adversely affect the middle and lower classes disproportionately....

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The Washington Post is critical of the military's arrangements for the transition to democracy in Egypt. It calls on the Obama administration to make the military in Egypt accountable for a return to democratic government in Egypt, including suspension of aid. The military's role in ousting an elected government which would have been tested in coming legislative elections is seen as a serious mistake.