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Chile's experience in Latin America stands out for the painful experience of the dictatorship years and the mismanagement of the economy by the government preceding it. The governments of the last 20 years of the Concertacion have studied the mistakes of these years and corrected them to aremarkable degree, like no other country in Latin America. The new politicians decided that the economy had to be managed so that inflation was under control and these Concertacion administrations produced budget surpluses in all but 4 years says Finance Minister Velasco. Velasco himself was 13 years old when the dictatorship of Augusto Pinochet was set up, and his father a law professor had to leave the country for criticizing human rights abuses. He studied economics at Columbia University, and his principal focus there was he says, " to understand how did this happen to Chile and how do we make sure it will nhot happen again." His finding was that runaway inflation had created so much unrest among the people that coup plots could take place, and that political stability could not be maintained without good management of the economy. It also meant that Chile must avoid extremes, try to take amoderate position, which meant preserving the free market reforms that had taken place, and introducing policy measures, projects and investment which helped to bring up the vast majority of the people including the least well off of society. Velasco also studied the history of Latin American economies with their boom and bust cycle, the situation in countries especially Argentina and sometimes in Brazil and other countries since the fifties. He found as he says that when " a country seems very creditworthy, everyone wants to lend to you, capital flows in and consumption booms." At some point excessive amounts of capital flow in which cannot be absorbed and is wasted in unproductive ways, which becomes adebt burden as the bust part of the cycle takes hold. So Chile has been careful to control speculative inflows of capital. But Velaco went further. In 2006 he left a Professorship at Harvard University to become finance minister of Chile under President Ms. Bachelet. Copper prices were surging and Velasco insisted on caution. In 2006 he pushed through a law requiring the annual budget to be based on an independedt committtee's estimate of the average price of copper in the next 10 years. Any copper income above the budgeted price goes into a savings fund maintained outside the country. In 2007 the copper price used in the calculation was $1.21 a pound, while the market price was $3.23 a pound. The profits $6 billion for 2007 went into the rainy day fund, which is invested conservatively in government bonds or money market instruments denominated in dollars, euros and yen. This fund is now at$20 billion. What is remarkable for Velasco is the way this was executed. The price used was conservative, the political pressures from unions and students and other groups was resisted effectively, and the whole exercize was carried out to successful conclusion even as popular support for the government dropped. When the crisi hit in December 2007 copper prices plummeted. Velasco announced a stimulus package, getting the $4 billion stimulus package through both Houses of Congress in January 2009. Chile expects only adrop of 0.5% in GDP in 2009 year over year. $500 million was given to stae owned bank BancoEstado, which reduced consumer lending rates by half. The package offers subsidies for businesses to hire younger workers, $700 million for large infrastructure program designed to create 60,000 jobs in road paving, airport upgrades and housing construction. And 1.7 million families, the poorest 40% of the population received cash stipends from the government equivalent to $70, with another stipend due in August....

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Akio Toyoda and Yoshimi Inaba answer unrelenting questioning by a Congressional panel. Toyoda reafffirms the principles his grandfather stood for in building Toyota. A rare comment by former Toyota executive Jim Press throws light on the struggle going on inside Toyota betweeen the Toyoda family and career managers from the previous two CEO's. Jim Press said that the company was hijacked some years ago by anti family financially oriented pirates as he called the two previous CEO's Okuda and others working for them. And he added these managers lacked the character to preserve the company legacy.

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Yoshimi Inaba, who now heads the North American operations of Toyota, thinks Toyota became complacent and lost touch with the customer. He says Akio Toyoda, the new CEO, wants to put some "passion" back in the company, and to see local executives speed up the decisionmaking at the company.

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Toyota plans to spend $1 billion on a marketing and advertising plan, spending that is 30-40% more than normal, to ramp up production and fill out inventory. It includes money to subsidize lease and loan rates, customer incentives and dealer ads. One aim is to raise the projected resale value of its vehicles used in calculating montly lease payments. Akio Toyoda is also giving more decisionmaking power to local executives for the markets they are more familiar with.

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The attack against the ill trained and ill equiped Pakistan poilce forces in the Punjab and across the country. It also resembles the attacks against police forces and suicide bombings by insurgents in Iraq. The police force of 167,000 recruits the same way as it did during the times of the British rule, which is to take poorly educated recruits and train them to protect the ruling elites and maintain order. THe Punjab police officer in charge of logistics says the force has only 80% of the weapons needed for the 167,000 men. Because police officers take bribes routinely they are also not like by the public, whereas the terrorists act like pious Muslims and mix with the people. The terrorists by contrast are very well equiped and trained making the police no match for them. Making things worse the terrorist groups that were supported by the Inter Services Intelligence or ISI of Pakistan and encouraged to operate against India are now coordinating actions in Pakistan with the Taliban. These terrorists have even more training and equipment than the Taliban, operating in places like Kashmir fighting the Indian military....

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Bret Stephens of the WSJ puts the -question what is Pakistan? And looks at possible answers. Starting with Mohammed Ali Jinnah, who he says had aquite different idea from that of the Taliban. He quotes Jinnah 'you will find that in the course of time Hindus would cease to be Hindus, and Muslims cease to be Muslims , not in the religious sense, because this is the personal faith of each individual, but in the political sense as citizens of the State." His idea was of religion as apolitical identification of the state as opposed to asecular idea like that of India, not of a religious state in a religious sense.This Bret Stephens says is why a majority of Pakistanis have rejected religious parties at the polls but still find the idea of political religion identification appealing. He sees these aims as immodest or overreaching in the modern world of technology, mass communications and economic deveopment. Only by remaining backward can such aspirations be supported because economic development, technology and mass communications can only supplant such religious politcal identification with aspirations for higher standards of living. Witness the current general elections in India with 730 million people voters. The common driving force for all parties is how they can deliver on the economic aspirations of people for better living standards, better infrastructure, and better services such as health care and education. And communal parties like the BJP also have to shift their focus to delivering on these aspirations to get support. So Bret Sephens makes the point quite effectively when he says that the threat to Pakistan is existential, so he would like to put the point existentially - just accept simple countryhood, or face nothingness. ...

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Friedman describes the leaks on income and expenses by wives of Chinese government officials after the officials took on mistresses. This has provided an unusually detailed acccount of the corruption of government officials in China.

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The Congressional Budget Office's Elmendorf says without spending cuts in payments to doctors and hospitals and other providers, providing coverage to the unisured will put the nation deeper into debt. Popular measures such as increasing preventative care, expanding medical records and rewarding doctors for choosing treatments that improve cost and quality have potential but its not proven how much the savings from this would be. The administration and the White House Budget Director, Peter Orszag, say they are in agreement with the CBO that something needs to be done to seriously reduce costs, reducing payments for Medicare and Medicaid to doctors and hospitals, and making other changes.

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Tyler Cowen, Professor of Economics at George Mason University, points out some basic truths about health care as it is practiced today in the USA, and healthcare spending as it stands today. He questions whether starting out with extra spending plans to provide coverage to all will help solve the basic problems facing American health care. Too many tests and diagnostic procedures used by doctors is not aproblem that will be solved by spending more money to cover everyone. And government taking on more spending to cover all will not address all the other major shortcomings of the American way of practicing medicine, like prescribing a battery of tests, that tend to drive up costs, to just mention one of the problems. And it will not address any of the shortcomings in the way Americans take care of their health, diet, exercize and healthy lifestyles. THese are critical to get good health outcomes for the people, and which combined with careful spending of dollars where it will provide the greatest benefit, is the only way the health care solutions can be found....

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Entergy is one of the largest energy companies. Its CEO for nine years, Wayne Leonard, talks to Joseph Rago of the Wall Street Journal. Its the No.2 generator of nuclear power in the USA, and uses coal for only 7% of its energy. He has made his name in nuclear energy, and here he talks about the government's cap and trade program and nuclear energy. He points to today's technology as far superior to the technology that was used in the Failed Three Mile plant, that put back nuclear energy plants in the USA for decades. He believes that price signals are needed for CO2, and the cap and trade program helps to do this, so he supports the cap and trade program. He admits that self interest colors perception of Entergy, compared to coal using utility producers like Duke Energy and American Electric Power. With coal only 7% in its portfolio of plants, and big in nuclear energy, it stands to gains from a cap and trade program, whereby Congress will set a ceiling on emissions, then allows businesses to sell any of its extra allowances that stand for the right to make emissions. And in doing so creating the largest commodity market, in carbon backed securiites. He and the government agree on the point that the allowances should be auctioned off, rather than given away as the companies with many coal plants believe. And the billions in new revenue from these allowances would be returned to the public. He understands that the view of companies like Duke and AEP, that use coal and would have to increase rates, and face the anger of ratepayers as they pay more for the allowances. He also thinks the bill should be written with a fine pen, so that if Congress mandates 20% of energy come from renewables. That it should specify replacing coal not natural gas as what this replaces, to get rid of the most polluting sources. He points to the real need for looking at things globally, as doing things locally, even to show responsible leadership in the world community, can lead to no progress in the global picture. The reason is that China is going ahead with the rapid construction of conventional coal plants. It has surpassed USA coal capacity, and is on track to double it sometime in the next decade. If the USA closed down every single coal plant, and all the time new coal plants are going up in China and India, then we would have ruined our economy, and it was'nt making much difference globally. And he says, if we just say lets lead and people will follow us, "its silly", because China isn't going to follow us, especially when they have $2 trillion invested in their coal plants, and they still aren't feeding feeding all their people. So how to deal with this? Develop the new technology for carbon capture for existing conventional coal plants, and help the Chinese with retrofit technology to curb emissions in a realistic manner. At this time most current funding is devoted to technology for second generation systems, that are still 10-20 years away....

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Ayn Rand's philosophy. She writes in "Capitalism: The Unknown Ideal" - "Economic crises and runaway government power grabs don't just happen by themselves; they are the product of the philosophical ideas prevalent in a society, particularly its dominant moral ideas." Rand says the message in our society is always "selfishness is evil; sacrifice for the needs of others is good." But Rand's message is selfishness rather than being an evil is a virtue." Adam Smith wrote about this but in adifferent way, saying that man looks to people around him and is looking for the respect of his peers, this itself is a needed good, something that men and women need badly, the respect and esteem of their peers. For this reason they temper their selfish actions for the common good, or this motive can be tapped for the common good to emerge from self interested actions. The question and the answer not like Rand's which is categorical, is put by Smith in the context of how a man views his actions, and what is best in his enlightened self interest. The answer depends on the values in a society at a particular time, because if everyone is pursuing this self interest by distorting things so that he can pretend to himself that he is doing something for an enlightened motive when there are the crasses motives behind it, like Mr Mozilo of Countrywide promoting mortgages for the poor and unqualified, and society or his peers don't call him to account, or others of more respectable background like Mr Thain and Mr Rubin and many others do the same in nore fashioable ways, then the whole fabric of society is corroded. When the fabric of society is corroded then it doesn't matter which philosophy is held, Marxist, libertarian, free enterprise, right or left as used up terms, because its moral underpinnings which are the only true support are corroded. This may be the reason Smith wisely talked about this in somewhat moral undertones such as winning the respect of peers in society for what you do, given that society had the moral element built into it its mores, customs and ways. This is the difference between Smith and Rand, and Smith and Marx, and Smith and other philosophies that are categorical and rigid. That Alan Greenspan was a member of the Collective or group that was closely associated with Rand, and with Rand's philosophy, may have put blinkers or concealed things from him, which he might have seen if not biased by such views of categorical and rigid nature about the virtues of laissez fairre capitalism in all situations. Reagan's admiration for Rand also may have created a bias in favor of laissez fairre capitalism, when what was needed was an effort to avoid excesses in the other direction of state involvement, without getting tied down to some rigid philosophy that might seriuously impair one's ability to respond in a very different situation of excess in another direction, of individuals promoting their self interest to the ruin of the economic fabric of American society....

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Joe Nocera of the New York Times, says that it is the Attorney Generals of the 50 states in the USA, that have taken up the rights of homeowners, not the federal authorites. He points out that the Obama administration, the Treasury department and the federal agencies, have failed miserably in getting the banks and servicers to take loan modification seriously. It was the attorney generals of the states that were with homeowners from the beginning, to prevent predatory lending and outright fraud. Until they were stopped by federal bank regulators, who sided with the banks in court. The subprime lending crisis might never have ocurred, says Nocera, had the states not been obstructed in this way. As the subprime lending mounted, the state AG's were talking to people in their communities, and knew the reality on the ground. The Office of the Comptroller of the Currency and the Office of Thrift Supervision, two primary regulators of the banking industry, saw their role as protecting banks from consumers rather than protecting consumers. Professor Prentiss Cox, of the University of Minnesota Law School, who was an assistant attorney general in Minnesota in charge of consumer enforcement, says federal regulators should have been listening to us, instead of trying to shut us down....

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How Northwestern University Kellogg School's Inaba Yoshimi is trying to turnaround Toyota's performance in China. Toyota is a latecomer in the China market and cultural hurdles hamper Japanese managers in China. Because Toyota dealerships in Japan use a salesforce that gets income from salary and does not depend on commissions, selling only Toyota cars, the Japanese experience seemed irrelevant to China. The experience of Toyota in China is more like the experience in the U.S. market with a sales force earning income from commissions and dealers selling many brands. In other respects China's market is different from the U.S. The Chinese market is growing very fast, and millions of cusomers are joining the carowning population, all first time buyers in an internet information intensive environment with savy informed customers. Keeping the salesforce motivated and interested in selling Toyota cars is a challenge in China. Also how to allocate cars to dealers based on how many cars move off their lots, and how to buildup a large network of Toyota dealerships and widen the range of product available in China. Management challenges have been tackled by bringing experienced veteran managers from the U.S. to China, who are culture neutral and are seen positively by the Chinese managers and staff. General Motors has a big headstart in China and is marketing to the younger demographic in China. Median age of Chinese buyers is 35 years age. See the related article on Chinese buyers and what drives their buying habits in article by Bremner in Business Week, May 17, 2006....

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The story of Eiji Toyoda is largely the story of the modern Toyota company. He guided the company as president from 1967 to 1982 and following that as chairman and senior advisor, a service that spans the entire period from the formation of Toyota during the 1930's by Sakichi Toyoda and his son Kiichiro Toyoda till today. Eiji was Sakichi Toyoda's nephew, and 18 years younger than Kiichiro. He worked in the company's textile loom business in the early days before the formation of the company to manufacture automobiles as an entrepreneurial venture by Sakichi and Kiichiro. An auobiography by Eiji Toyoda pubished by Kodansha in 1985 tells the story- Toyota- Fifty Years In Motion. Most of the prewar period was spent manufacturing buses and motorized vehicles for the military. It was after visits to Ford's Rouge automobile plant in Detroit in the fifties that Eiji first picked up the ideas for a suggestion system and getting workers to provide ideas and make improvements that later became kaizen. Eiji was born in 1913 before the beginning of the first world war and passed away at the age of 100 in 2013. He lived a remarkable life that witnessed most of the events of the twentieth century, the transition from a militaristic to a peace loving nation, and technological progress in many fields. The technological evolution continues with the development of electric cars. In the early days of the automobile Sakichi had imported a German electric car which was limited by the short battery charge, a limitation Toyota and other companies are still tackling to this day, showing the technological challenges still ahead. The story of Toyota shows pioneering efforts and progress is continuous, as Toyota picked up the ideas from Ford and added new ones of its own for better products. Family companies with dedicated service spanning a century are rare and Toyota is one of these companies. When the recall crisis of 2011 brought the young CEO, Akio Toyoda, Kiichiro's grandson, to the verge of tears at a public event, the memories of a generation of leaders and the need to live up to their ideals and the work that preceded him must have gone through his mind....

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GM's management decisons in the last 20 years have failed to put innovation and making courageous decisions right up front. Instead its management with the support and acquiescence of its board favored the status quo and stuck too long with what worked at the time like the SUV's that it had invested in, and refused to take any bold decisions in favor of fuel efficiency. ANd it starved new projects like Saturn of resources.

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China's campaign against corruption and the popular programs that the Chinese government of Jinping encourages on television. This includes the 52 part series on television called "In the Name of the People." The programs show how the Communist party's upright officials stand up against the corrupt ones. The idea is to build up the reputation of the Communist Party, as it sagged under the previous administrations during the period of rapid growth when such behaviour was tolerated to in some ways.

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Jose Maria Aznar, former prime minister of Spain, describes the political legacy of King Juan Carlos of Spain in putting Spain on the track of democracy, free elections, consensus, and modernization, after the traumas of the civil war and the period under General Franco.

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Toyota projects net income for fiscal year ending March 2014 of 1.9 trillion yen or about $18.8 billion, exceeding combined earnings of GM, Ford and Chrysler.