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Steps taken by Secretary of State Tillerson are drawing criticism from Senator McCain and Democrats in Congress for weakening the diplomatic efforts of the U.S. Before taking office Tillerson, who believes the State Department has a bloated staff, announced a 31% cut in its budget. A year later  the cuts are leading to the departure of many senior diplomats. Some like Mr. Miller have received only a few minutes to talk to Tillerson, six top career diplomats were fired by Tillerson. Most hiring is stopped and a $25,000 buyout is being promoted to get 2000 career diplomats to leave by October 2018. This report describes a retirement class for diplomats with 26 senior employees, including two acting secretaries of statein early 50's who would normally wait many years before retiring. The top two position ranks at State are career ambassador and career minister. This is cut from 39 to 19. Political appointees are also missing to fill positions with only 10 of 44 political positions filled. Some experts see a loss also in diversity as this happens. Differences between the Nikki Haley, who is the next senior official in America's foreign service and a potential successor to Tillerson, and Mr Tillerson are also complicating the situation at the State Department. During the Obama and Bush administrations experts cited the weak role played by the institutions such as diplomatic services in promoting America's role in the world. This was not corrected in any significant way in the last decade. The position of the diplomatic service has weakened further, along with the abandonment of America's leadership role under the presidency of Mr. Trump. It will require a future president's concerted effort to restore the diplomatic service under new leadership and with a new generation of diplomats more in tune with the multipolar world of today.   ...

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Since 2002 when the AKP came to power consumer loans have surged from 2 billion Turkish lira to 129 billion lira or $81.55 billion. While this has created a larger middle class, the huge expansion of credit puts the economy at risk say analysts. Turkey is taking in imports at a rapid rate and the current account deficit is now 8.1% of GDP. The ratio of the current aaccount deficit to foreign exchange transactions is at 37%, according to Ankara based economic research foundation Tepav. This is significantly above the level reached before Turkey's last four economic crashes. The EU is Turkey's biggest market for exports, and the fastest growing market is the Middle East. With the economic growth sluggish in both regions the prospects for Turkish exports increasing is weak. Signs of excess are visible in Istanbul. A shopping mall for cars is being built the size of three sports stadiums with a test track on the roof called Autopia. Prime minister Erdogan talks about building a huge new shipping canal that would bypass the crowded shipping in the Bosporus. And the elections are being fought for the AKP to get more than 330 seats out of 550 in parliament, which would enable the AKP to change the constitution. This will be an unneeded distraction for the country at a time when economic policy needs a sharp focus to reduce the current account deficit before it is too late....

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British budget cuts announced in Parliament by Britain's Finance Minister, George Osborne. About 83 billion pounds in cuts by 2015 were announced. But Joseph Stiglitz, writing in The Guardian, argued that the plan was a big gamble, as declining tax revenues with lower growth, would lead to smaller deficit reductions. The gamble is that the private sector will pick up, and make up for the reduction in public outlays. If this does not happen, this risks sending the economy into a tailspin. Osborne said that 490,000 jobs will be lost over the next 4 years, some from attrition. Payments to the long term unemployed will also be cut for those who fail to seek jobs, saving $11 billion a year. A new 12 month limit will be imposed on long term jobless benefits. Increase in the retirement age will start in 2020, from 65 to 66 years. At the same time free eye tests, prescription drugs and bus passes remain. Premier Cameron promised not to make cutbacks in health care in the period before the election. This was his way of helping the Conservatives make a comeback to power....

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Wholesale inflation calculated weekly is at 7% in India. And the country's Finance Minister Chidambaram says he is more concerned about inflation than a growth that slows a bit. Experts forecast growth slowing down from 9% to 7% in the next 2 years as the global slowdown affects India. For the US India has been a good export market with sales growing at the rate of 75% a year according to the USA Commerce Department. But a look at the charts shows that China also had periods of a couple of years when growth slowed to 7% in recent years before it gradually went back up to over 10%. And China's growth will also be affected by the global slowdown and fall weel below 10%. And this may be a health y thing for China as it decides what kind of growth it wants to see that is better than the haphazard growth of the last few years with its huge environmental costs and lax regulation and the imbalances in growth between urban and rural as well as wages and benefits without labor law protections to create domestic consumption by a middle class. ...

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It appears that P&G and Unilever have caught on to what may be one of the biggest developments in consumer products as the global economy incorporates hundreds of millions of small budget buyers in developing countries from Mexico to India. Just look at the figures here- these high frequency stores like the one in Leon, Mexico mentioned here, bring in per shopper 23 pesos or about $2, with annual sales of about $16 billion. As their incomes increase they could be buyers of the same brands they are accustomed to and move upscale in the years ahead. Another article talked abot Walmart's success in Mexico's urban areas. It appears that there are two trends one of the high frequency stores in the rural areas and the smaller villages and towns, and the other of large stores in the growing urban areas with buyers from the newly affluent urban classes. What is interesting is the close attention that is required to sell to high frequency stores and the sense of respect that needs to be shown for the economy, price and budget, buying habits to tailor products for their special needs. As for example: the one time use Head and Shoulders shampoo that costs 2 pesos, the feminine hygiene pad product with aloe that can be used longer with extra absorbent cotton, the Downy Single Rinse to conserve water usage. All the time the attention to a quality product that delivers and gains sales by word of mouth....

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Foreign investment in the auto industry is having a significant impact in the growth of Mexico's middle class. VW has plants in Puebla, General Motors in Silao, Chrysler in Toluca, Nissan in Aguascalientes. Production increased by 24% in February 2012 over the prior year. The growth is likely to continue. Facilities in Mexico have high productivity and are technologically equiped comparable to plants in the U.S., Europe and Japan. Nissan plans a $2 billion investment in a plant in Aguascalientes. Because of the lower cost of living, with food, transportation and health care costing less, even though household appliances cost more, workers at a Mexican plant earning $4 an hour in pay and benefits or $130 a week can still have a decent standard of living. Foreign investment is likely to grow with Mexico's emphasis on technical education - about 130,000 engineers graduating each year according to Mexico's president Calderon- the work ethic of young Mexicans joining manufacturing plants, the productivity of these lower cost plants, and a growing market in Latin America. Nissan plans to produce 1 million cars in Mexico with an investment of $2 billion in Aguascalientes. Nissan has succeeded in taking over from VW as the preeminent manufacturer in Mexico, and has 32,000 workers in the Aguascalientes area, once a small town but now a thriving city of 700,000. Drug cartels have no interest in places like Aguasalientes, which is why foreign investment continues to come into Mexico. The lack of economical credit- interest rate on car loans is about 10%- and the flow of about 600,000 used cars each year into Mexico from the U.S. has restricted growth in Mexico's automobile market. Jose Munoz, Nissan's senior executive for Latin America sees this changing as more credit including Nissan's new financing center in Aguascalientes make lower cost credit easily available to a growing middle class....

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The caretaker government of prime minister Mark Rutte in the Netherlands will commit to following austerity plans in its Stability Program report to the European Union. Elections are now set for September 12, 2012. The government was able to get the support of two smaller left-leaning parties to austerity plans. Opposition parties have questioned the policies and said they will reverse them if elected. Rutte's Liberal party and Jaeger's Christian Democrats, with the help of the Christenunie, D66, and Groenlinks, now hold a slim 2 seat majority in the 150 seat Dutch parliament. The Freedom party that had previously supported Rutte withdrew support for austerity policies that it said would hurt pensioners. The moves help avert a credit ratings drop by the credit ratings agencies leading to a loss of the Dutch triple A credit rating. The measures will increase the sales tax from 19% to 21%, make health care spending cuts and impose a pay freeze on civil servants. Savings achieved will be 11 billion euros. Rutte described his actions as: "the government's respose to the acute crisis in confidence in the financial markets." Earlier in the week Fitch Ratings had threatened to lower the Netherlands credit rating. The measures will reduce the Dutch deficit to 3% in 2013 from 4.5% in 2012 to meet EU fiscal compact rules. The changes to the health system are part of changes advocated by the OECD and the IMF because of surging health care costs for an aging Dutch population. There is concern about the sales tax increase because of its effect on consumer spending, and recent comments by S&P managing directors and others in financial markets emphasize the need for economic growth, as austerity measures by itself are inadequate solutions....

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Debate in Germany over whether there should be exception to the minimum wage agreement of 8.50 euros per hour. The head of the federal employment agency, Heinrich Alt, says a universal minimum wage would reduce incentives for young people to join vocational training. The new labor minister, Social Democrat Andrea Nahles, says "there will be no exceptions, notwithstanding all the escape fantasies." The Social Democrats insisted on the minimum wage to win support from rank and file working class members after losing support in its own base with the increase in the low wage sector in Germany. Unemployment in Germany is less than 5%, but this comes with an increase in lower wage workers as part of the reforms under the Social Democrat Schroeder administration when unemployment was close to 10%. Economists say the increase in wages would increase weak consumer spending in Germany and increase imports from other eurozone countries. In 2011 the share of the German population making less than the new minimum wage of 8.50 euros an hour, according to the German Institute for Economic Research, is- for former East Germany 27%, for former West Germany 15%, for ages under 24 years 44%, for ages 25 to 60 years 15%. This does not affect the manufacturing sector in East Germany as wages in the sector are above 8.50 euros. The other problem is that wages appear to be declining in Germany, with wages decreasing by 0.3% in October 2013, according to the Federal Statistical Office. ...

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The U.S. initial jobless claims for unemployment estimate for March 21 is about 3 million. How to keep layoffs of workers to a minimum and keep businesses from closing. These are the questions lawmakers and governments are addressing today. The British, Dutch and Denmark governments have plans to pick up most of the wage bill for businesses, that do not layoff employees, for as long as 3 months, and if needed longer. The U.S. government has a similar plan. Of the $1.6 trillion aid package being discussed in the U.S. Congress, $350 billion is allocated as loans to businesses which may be forgiven if used for payroll for workers.  The idea is to build a safety net quickly for workers. The U.S. plan is to give families direct aid of $1200 per person and $500 per child with checks sent to each home. A separate allocation in the package increases unemployment insurance from 26 weeks to 39 weeks. The direct aid to large industries and business is a way for these companies to avoid layoffs. Direct aid should be based on how much companies do to retain employees, a move that is in the interest of large companies which will need to have experienced employees once the situation returns to normal by the third or fourth quarters of 2020. This will also help companies return to normal activity quickly. ...

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The corporate share buybacks announced by U.S. companies in the last 3 months now exceed $200 billion, more than double than in 2017, according to a WSJ analysis. This includes Cisco, Wells Fargo, AbbVie, Amgen, Alphabet (Google). The surge in corporate buybacks started in December after the tax cut of the Trump administration cut U.S. taxes by $1.5 trillion over a decade, cutting the corporate tax rate for large companies from 35% to 21%. The tax cut also included a one time tax for repatriation of $2 trillion held by U.S. companies overseas. This WSJ analysis says there are questions whether the tax cut is working, whether it will encourage new investment, lead to companies increasing wages, or whether this will largely result in corporations returning money to investors with larger dividends and corporate buybacks. Morgan Stanley's analysis of earnings transcripts of companies in the S&P 500 show 44% of the companies say they will use some portion of the tax gains to make capital investments and increase wages, with 28% going in the opposite direction and using them to return money to shareholders. Experts caution that corporate buybacks do not always lead to the company's stock outperforming the stock market. The future of companies depends more on the capital investments and in human capital. There is a sense that workers wages have stagnated since the mortgage financial crisis in 2008, with the economic crisis, globalization and outsourcing, reduced alternatives for workers, geographic pressures in relocation, all pushing wages down.  This is being closely watched with articles on stagnation in wage growth this week in the NYT and WSJ, and earlier in the Economist magazine. Reports on the Trump administration tax cuts passed by a Republican Congress suggested a large tilt towards benefitting the highest income households. Problem with higher stock prices reaching the broader middle class are recognized in that one third of stocks are owned by overseas investors, and 84% of the remaining stocks are owned by the wealthiest 10%. Republicans have turned to bonuses typically of $1000 per person given by companies yet this amounts now to about a few billion dollars over an estimated 4 million Americans, says this WSJ analysis. This is not enough to justify a huge tax cut and raise the deficit by over a trillion over 10 years on the assumption that it would lead to higher wages or capital investment when about $200 billion goes to boosting stock prices. This comes at a time when the American middle class is not broadly invested in the stock market after the exit following the battering stock prices took during the 2008 financial crisis. ...

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Indian Foreign Minister Jaishankar says- “The cessation of firing was agreed between the military commanders of both sides through direct contact.” In fact that is what India asked the US - that Pakistan initiate by its general calling the Indian general asking for the war to stop only then would India agree to stop the war, as India had clearly informed Pakistan that it was not targeting Pakistan military only selected terrorist bases inside Pakistan and Pakistan occupied Kashmir. Jaishankar was responding in an interview with a European news reporter about his question on whether the nuclear aspect was kept in mind. It was an interview with German newspaper Frankfurter Allgemeine Zeitung.  Jaishankar made this clear to Dutch Broadcaster NOS- “We made one thing very clear to everybody who spoke to us, not just the US but to everybody, saying if the Pakistanis want to stop fighting, they need to tell us. We need to hear it from them. Their General has to call up our General and say this. And that is what happened.” "We have sent a clear signal to the terrorists that there is a price to be paid for carrying out such attacks, as they did on us in Kashmir in April. The firing was then started by the Pakistani military. We fired back in self-defense and once the Pakistanis understood that they were taking a harmful course, we were able to stop firing. This situation has not changed for two weeks, that is the status.”   ...

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Fannie Mae and Freddie Mac are required to send nearly all profits to the U.S. Treasury in the form of dividends. By the end of 2013 the two companies will have paid $185 billion in dividend payments, close to all the $186 billion in aid provided by the U.S. government during the housing and mortgage crisis. Fannie will have paid $113.9 billion of the $116.1 billion in aid given by the U.S. Treasury, and Freddie will have paid the entire $71.3 billion in aid given by the U.S. government. This was possible because of the recovery in housing prices since the collapse of the housing market in 2009. Most of the housing price recovery occuring in the worst hit states California, Arizona, Nevada and Florida as buyers were attracted to lower price homes in foreclosures and provided Fannie and Freddie a large boost, followed by recovery in prices as traditional homeowners entered the market. At one point in 2010, Nick Timiraos cited estimates of $680 billion for total aid that would be needed for Fannie and Freddie, which shows how far things have come from the low point in the housing market. ...

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As automakers rettol their plants all three GM Ford and Chrysler look for ways to win support at the party conventions in Denver and Minneapolis and in Congress for a bipartisan support to get the $3.75 billion Congress has to appropriate for insurance and other costs to get the $25 billion loan program signed by President Bush in 2007. Debbie Stabenow, a Senator from Michigan backs an increase of this loan program to $50 billion and its presented as a way to help the country become more fuel efficient and develop alternative sources of energy. This loan program could make a critical difference to the cash strapped American companies when credit is hard to get in financial markets or the cost is too high. Note the importance of the states in the midwest like Michigan, Ohio and Indiana to both Presidential candidates make it increasingly likely that both will favor fully funding the automobile companies retooling plants and funding new technologies. These states could decide the election and the weak economy and high unemployment in the midwestern states means the candidates and the political parties will have to support the auto industry's efforts to remake the companies and America's energy future....

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The changes needed in 2008 for money market funds to provide stability in a crisis situation were not made resulting in the Federal Reserve having to step in again to support money market funds. The Fed setup a new lending facility to support these funds that are offered to retail investors at $1 a share without price fluctuations, and are used as an alternative to savings accounts by individual investors. Former FDIC head Sheila Bair says it is frustrating that we never really fixed this stuff and industry lobbyists did'nt let this happen. These funds are a key short term financing source for many companies including banks. The funds buy the short term commercial paper that company issuers use to finance day to day needs.  One of the changes made in 2008 was that money market funds could charge a redemption fee if there was a huge surge in withdrawals in a market panic leading to their holdings of cash or market equivalents falling below 30% of their portfolio. The SEC also let the funds suspend redemptions in that situation. The result of this is that there were large withdrawals from prime money market funds this week after the coronavirus impact on the economy increased, resulting in 11% drop in assets of prime funds to $546 billion. ...

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Krugman points to some striking facts about China in 2011. Consumer spending in China is only 35% of GDP and has declined over the years. There are no signs of rebalancing the economy away from exports by increasing consumer spending. China's dependence on exports for trade surpluses is greater than ever. Beyond this there is another disturbing fact. With weak consumer spending and heavy investment spending at about half of GDP, Kugman raises the question where is all that increase in spending going? Real estate investment takes up about half of the increase in investment spending, as the share of GDP of real estate investment almost doubles compared to figures for 2000. Much of the rest of the increase Krugman attributes to firms selling to the construction industry. The speculative fever, the corruption at the local level, the shadow banking system which is not protected and unsupervised, the poor quality of statistics, suggest a bubble phenomena that may not be under control of policy makers, and risks damaging China economy and the world economy in 2012-2013. After all China's economic and financial planners and banks are no better than America's or Japan's, where asset bubbles burst causing serious damage....

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One of the good things after the pandemic is that people are going to spend more time in their home countries instead of travelling overseas, says this report in the DW.com. World tourism has grown too quickly and too fast in the last two decades. Places everywhere are becoming extremely congested. I remember visits to Paris, to Notre Dame cathedral and its surroundings, in the eighties and nineties and compare them to two decades later with regret that it has changed for the worse. By 2010 everyplace looked different, transport, hotels, streets were so congested as to make trips less exciting and less fun to do.  The question posed here is whether having 3 million less people travelling around the world is such a bad thing? It says the tourism industry has grown so quickly and so fast that it poses a danger to the environment, to the quiet of neighborhoods and cities, driving a commodities culture. As this writer says it drives locals away from the cities they have lived in for generations, and robs those who stay of the quiet lives they have enjoyed. In fact once the cities experienced so much less pollution during gradual reopening, and streets had less traffic, a lot of people turned to use bicycles. Bicycle lanes were replacing car traffic lanes. A return to calmer living with enjoyment of one's own neighborhoods and cities, and travel within one's own country, is becoming an attractive alternative. People now remember that it was the huge amount of airline traffic that spread the pandemic from cities in Asia to cities in Europe, and cities in America. It also spread quickly through tourist destinations inside Asia and Africa, and Latin America. Even some of the early clusters in Germany, Italy and the U.S. had their origins in the the spread of globalized supply chains in China, Germany, and Italy for automobiles. Auto industry business people traveled to places in or near Wuhan, then to Bavaria, and on to northern Italy in the global supply chain for automobile manufacturing.  As new nations like China and India with billions of people are added to world tourism this changes everything in a way never imagined before. This pandemic gives one a pause to rethink whether it was a good idea in the first place to seek fulfilment by travel outside one's own country, without first exploring it and one's own neighborhoods in a quieter setting. We travel to new places seeking fulfillment. There comes a time when the tourism today has become so big that it is not sustainable, safe or economical anymore. A rethink and new habits make sense.     ...

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As Japanese sales in the USA drop from 4.35 million vehicles in 2007 to 4 million in 2008 and an estimated 3.67 million in 2009 according to CSM Worldwide, even the Prius and the Honda Civic are afected. The Mississipi Blue Springs plant originally designed for the Higlander SUV , then assigned the task of making Prius after the shift to smaller cars, now will not make the Prius. The plant investment will stop at $300 million, with the plant construction being completed but the equipment not being installed, and no plans to manufacture cars there till things improve and the plant is made fully operational. At the same time it is noteworthy that employees Toyota has hired at the plant will keep their jobs. Toyota has not laid off permanent staffers at its plants in North America or any other region despite slowing sales in its worldwide markets. What does this mean? The culture of the United Autoworkers Union developed through the prewar confrontations between the union and the auto companies, and union workers and union officials and company managers came to a consensus through these struggles with the coexistence of high executive compensation and union medical benefits and other benefits and job security. But its not really been a frutiful arrangement as it has constantly been whittled away and eroded to the point of going out of existence even as the union clung on to the old ideas and management just went on with the status quo. Jobs security is nonexistent and jobs constantly cut as plants close, and now high executive compensation will face government oversight with the auto loans. See the link to Business Week which states that the numbers show the auto workersin Detroit union plants pay about 5% of their medical costs as opposed to 30% for workers who have healtcare coverage in the USA. But what good is the additional benefit in an environment where plants are constantly closing and jobs being cut. Is'nt aworker at a Toyota plant with no job cuts but costlier medical benefits better off than his Detroit counterpart? Which is to say with forward looking management that lowered executive compensation and unions that discarded an entitlement attitude and proactively matched its medical benefits to levels to nonuninized Japanese plants, and management that proactively shifted to higher fuel efficency and smaller cars in the interest of energy conservation and good strategy to be level with companes like Honda ad Toyota in that performance measure, wouldn't that have led to fewer plant closures and jobs, and public support across the country including in dealer showrooms?...

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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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The struggle between the Detroit automakers and the states over auto emissions of carbon dioxide and other heat trapping gas emissions. California adopted the first state law requiring auto manufacturers to reduce emissions of carbon dioxide in 2002 and in 2004 set standards for the emission reductions. Vermont, as well as Connecticut, New Jersey, New York and Pennsylvania adopted the same standards. Automakers sued toblock these standars in Vermont and California. While the California case is pending, Judge Sessions issued a ruling on the Vermont case this week against the auto manufacturers. This follows a decision by the US Supreme Court in April 2007 that the Environmental Protection Authority has the right to regulate heat trapping gases like carbon dioxide as air pollutants. This endorses the idea that states can set their own limits. What is needed for a state to do this is to get a waiver from the EPA, as the federal Clean Air Act has a provision that allows California to set ists own standards with a waiver from the EPA, and for other states to follow California's lead. A detailed opinion includes analysis by the Judge in this case stating why the Transportation Department's authority is limited to automobile fuel economy standards and does not carry over into auto emissions as pollutants of the atmosphere, the area of pollutants being reserved for the EPA and the individual states to work out together. Under California law as it is now emissions reductions for cars could be 30% or more below the current levels in the 2016 model year. By 2012 emissions are required to be below 2005 levels by 25% for cars and light trucks, SUV's and larger trucks 18%. Note that what is technologically feasible to accomplish in the area of auto emissions is an unknown. At the same time its a function of determination, R&D investment, collaboration between companies to pool technological and capital resources, development of engineering and manufacturing investment and knowhow to learn mass manufacture at low cost, introduction of the already feasible features quickly such as stop start engines which the Germans have already in the works for mass manufacture across product lines, and so forth. The first comer in these technologies enjoys an advantage as Honda constantly advertises itself, and the the only way to say what is technologically feasible or not is by pointing to these pioneers. In this case because of the stronger environmental movement in Europe especially in Germany, some of this pointing will be done in the direction of the German auto manufacturers progress in this direction to meet the new EU standards of 120 micrograms of CO2 per kilometre. ...

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"Progressive" is a misused word, people are just interested in the words "decent," "fairness," and "Christian" from the color of the heart.  It is just how Republicans see the contest for the US Senate  that reveals their sense of priorities for the Nation.The main concerns of Republicans, old traditional Republicans shown here in this WSJ Editorial are that somehow gains on the US Supreme Court could be reversed with retirement of Alito and Thomas in their seventies, and fears of the same policies that set up Medicare and Social Security- following the changes of the Industrial Revolution and dismal factory conditions and wages at the turn of the century- under Republican Teddy Roosevelt  (the incipient changes), Woodrow Wilson an academic from Princeton, and Franklin Roosevelt. A new version of old Tory politics still exists in the US. It is these industrial conditions rewritten with work safety laws, workmen's compensation, first 54 in 1918 after the Triangle Factory Fire,  then 40 hour week, unemployment insurance, worker union rights for fair negotiations on wages, that made the US a strong manufacturing nation and Industrial power, creating the synergies for worker contributions combining with technologies, managerial skills for a decent standard of living that surpassed all other nations. It is this achievement that was put at risk in the 21st century by shipping factories overseas and thoughtlessly sending the technologies with it, which happened under a series of administrations since the 1980's Reagan, Bush, Clinton, Bush Jr., Obama and Trump. Done thoughtlessly and recklessly. And the wars that started with president Reagan in Iraq/Iran/Afghanistan that diverted the two trillion dollars that would have rebuilt America's aging infrastructure. Biden was the first president to have a clear focus on the changes needed to rebuild infrastructure and manufacturing, technologies and science, and rural America, in a concerted push that has made gains that surpass any that exist in Europe or China. Restoring the US economy to No. 1. Harris in her own way offers the pieces of the puzzle to reverse the pandemic induced cost of living increases that complement the work of president Biden in 2024, continuing the work of rebuilding infrastructure and manufacturing for leadership in the world.     ...

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The protests in Hong Kong could end up as a failure because of the lack of any leadership in the movement for Hong Kong rights. In the early stage the lack of leadership helped build up mass support. As the movement grew it also had weakness in the form of a lack of a coherent program for negotiations with the central government in Beijing. The risks inherent in internet mass media communication are apparent as it brings out people in large numbers nd amplifies all grievances, but fails to produce tangible or concrete results as time passes and lack of coherent leadership weakens the mass movement or makes it overreach.  The lack of communication between the Hong Kong government and protesters with Carrie Lam Hong Kong's CEO not meeting them also led to a lack of a negotiated way out.  This overreach is what Friedman talks about in the NYT saying that the limited universal suffrage offered by China in 2014, with Beijing crossing off candidates openly critical of it, should have been accepted by Hong Kong protesters in negotiated settlement with some protections. The 1200 electoral body would vote for which candidates should stand for election in the Beijing formula. This was not such a bad thing as it offered limited suffrage where there was none in China, says Friedman. By rejecting that formula the protesters gained little because the "perfect" is not always the best option or a practical option when all the realities are taken into account. This is happening again in 2019 with the protesters and Beijing moving further apart and creating a bigger gap with very little constructive communication between the two sides. The efforts to bring the U.S. into protecting Hong Kongers rights by protestors marching to the U.S. consulate also could be seen as going too far by the rest of the people of mainland China, as the U.S. has its own problems including growing inequalities and confrontation between different socio-economic groups. The gradual shift to more disruptive tactics and confrontation with police led to damage to public structures that affected the image of the protesters. The overall lack of a coherent leadership that could negotiate some form of agreement for the future is now seen as a problem for the protest movement. It could lead to a failure to secure the Hong Kong rights protestors seek, says Friedman in the NYT, creating a story of missed opportunities with missing communication, missing negotiation around a "do-able" agenda that builds on common ground between the opposite parties. ...

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One more sign of the complete failure of the ratings process, at Standard and Poors in this case. August 15 Cheyne Capital Management's arm Cheyne Finance's short term notes received the highest investment grade rating, two weeks late these notes ratings are dropped 6 notches by Standard and Poors in one day! Result the $2.2 trillion commercial paper market considered a really safe place to keep money including for money market funds, is now becoming jittery as demand for commercial paper has dried up.

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Northwest to respond to higher fuel costs by cutting flights 5% and raising fares and fuel surcharge. For flights to Japan the fuel surcharge goes from $140 to $160. Second checked bag is $25 and 3bags checked is $100. Fees for bags over 50 pounds double to $50. Northwest will take 15-20 planes out of service after the summer travel season. And international flights will go up. For Northwest the higher fuel tab since May 2006 projections is $1.7 billion in higher fuel costs. Aloha Airgroup, Champion Air and ATA airlines will close according to announcements this week.