LyrArc Article Gist
Matt Miller's stump speech as an independent candidate and his 7 proposals for Renewing America.

LyrArc Article Gist
Khalid al-Falih, chairman of Saudi Aramco, says at the World Economic Forum in Davos, on Jan. 26, 2016- "If prices continue to be low, we will be able to withstand it for a long, long time." With $630 billion in foreign currency reserves the Saudis are following a long term policy of full production. Gasoline subsidies are being reduced, IPO of Saudi Aramco being discussed to raise additional capital, and other steps being taken to plan for long term oil prices. Flexibility for a change in policy is diminished with the addition of Iranian oil production to supplies following the lifting of sanctions. The events in 2015-2016 of Russian bombing campaign in Syria, and the cutoff of diplomatic relations with Iran, have worsened the standoff with Iran and Russia in the Middle East conflict. As a result it appears that the Saudis are settling down for a long term policy of full production which would keep oil prices low for the long term. India, Japan, China, the U.S. and the European Union, Turkey and other countries benefit from low oil prices when their economies need a boost in 2016-2017....

LyrArc Article Gist
Barley points out the resignation of prime minister Monti in Italy is not a cause for panic, as his likely successor Luigi Bersani, head of the centre left Democratic party which leads in the polls with its electoral alliance having about 43% support, has committed to following through with Monti's policies and committments to the EU. Berlusconi is not the factor he once was with only 15% support in the polls, and anti establishment parties opposing public corruption such as Beppe Grillo's Five Star Movement appealing to younger people have about 20% support changing the political landscape in Italy. Other factors favoring Italy- a lower level of debt redemption in 2013 of 158 billion euros compared to 200 billion euros for 2012 will lower Italian bond issuance, Italy's primary budget surplus, the Italian economy bottoming out, and credit conditions improving. Year to date Italian bonds have returned 19.5%, and he sees no reason for an exit from Italian bonds. If polls continue to show a committment to the policies introduced by Monti, Italian bonds will continue to be attractive for investors. By setting Italy on the path to restoring and strengthening governance Monti has removed a key element for volatility in Italian bonds....

LyrArc Article Gist
President Obama's speech announcing the details of his executive order on immigration on Nov. 20, 2014, starts by saying he is not bypassing Congress or the Republicans. He says Republicans had the opportunity to pass legislation in the House that passed the Senate, or come up with their own bill. And still have an opportunity to come up with a bill he could sign into law that address the shortcomings of the current immigration system. In selling the bill to Americans he points out that this is not an amnesty, that the current system which allows immigrants here to stay illegally without paying taxes or any accountability is an amnesty. He points to deportation of millions as not an option, an out of the character of America. That deportation of criminals will continue and is up 80% in his administration, without mentioning that deportation under his administration for ordinary undocumented immigrants without any criminal record had reached a high of 400,000 a year under his administration, higher than under the Republican Bush administration. In fact it had reached such levels that Hispanic groups stated they would sit out the midterm 2014 elections and not vote for Democrats or Republicans, after providing a significant part of the winning margin for Obama in the 2012 presidential election. President Obama says he has the legal authority to prevent deportation, and that this is essentially what this executive order does- providing a temporary right to stay and work in this country to undocumented immigrants here living in the shadows who are here for more than 5 years, not a permanent status or citizenship. He cites other presidential decisions of the last 50 years, Republican and Democratic, that have integrated large groups of undocumented immigrants, including an executive order by President Reagan. And he refers to the Bush presidencies 41 and 43, where both father and son, considered Hispanic Americans "a part of American life," as good hard-working people deserving a chance to be Americans. The speech ends with an appeal to the compassion of Americans urging them to look at their own individual stories going back one, two or several generations, or Ellis Island where the early waves of European immigrants entered the country in the 19th century, and to immigrants from the period after the early British settlements in the 18th century. This is typical Obama, as much as the calculated decision to pursue a aggressive deportation policy was for the first 6 years of his administration, including the decision for "Dreamers" or young people before the 2012 election. "Scripture tells us, we shall not oppress a stranger, for we know the heart of a stranger. we were strangers once, too. And whether our forbears were strangers who crossed the Atlantic, or the Pacific, or the Rio Grande, we are here because this country welcomed them in." Over 2 million deportations in one of the most aggressive deportation policies of any administration, followed by an effort to stop deportations before the next presidential election, when the NYT had called his deportation policy "infuriating." ...

LyrArc Article Gist
Mexico's Congress passes changes to the constitution and new oil legislation which will allow foreign companies to compete with state owned Pemex. Challenges remain in the form of creating transparent regulators to implement the legislation, and ensuring that the benefits of the increased investment in the oil industry benefit ordinary Mexicans through a higher growth rate, using cheaper natural gas to support the manufacturing sector, and additional revenues from the increased oil and gas production tha support health, education and infrastructure development.

LyrArc Article Gist
Philipp Rosler, head of the FDP party and Germany's Economy minister, says he opposes further involvement by German taxpayers or the ECB in the debt restructuring for Greece. He pointed out that the current negotiations between Greece and the bondholders (mostly French and German banks) were about private sector involvement. Tax payers of Germany and other European countries are already making a contribution he said. The IMF is pushing for the ECB to take a haircut or writedown on the $40 billion of Greek bonds it holds to supplement the haircut taken by bondholders of over 50%. Rosler said in an interview with the Journal that Athens should keep its side of the bargain by implementing reforms and not letting them just be on paper. On Germany or the EU directly taking responsibility over the Greek budget, Rosler said this should be the responsibility of the Greek parliament. At the same time he pointed out that its important to have a specific and rigorous montiroing process just to be fair to taxpayers in the EU....

LyrArc Article Gist
Changes to China's five year plan to include critical social goals, reduce income inequality, and provide a social safety net. The influence of local governments in distorting central government policy.

LyrArc Article Gist
The Saudi government announced sharp cuts in spending and subsidies to cut the deficit in 2016. The deficit in 2015 was about $98 billion or 367 billion riyals , according to Al Arabiya Saudi news channel. In 2016 the budget is designed to cut the deficit to $87 billion or 326 billion riyals. The 2016 budget is for 840 billion riyals, compared to 975 billion riyals in 2015. Saudi Arabia's foreign exchange reserves of $640 billion could be exhausted at this rate by 2020, experts say. Actions being taken by the government include increasing the price of some grades of gasoline sold domestically by 50%, as subsidies are being cut. The drop in oil prices to about $35-$40 is hurting Russia, Saudis and Venezuela. The Saudis have increased defense spending for conflicts in Yemen, and in other areas, as they oppose Iran and Russia in the Iraq- Syria conflict.

LyrArc Article Gist
U.S. president Obama invited NYT's columnist Thomas Friedman to the White House for an interview on Saturday afternoon April 4, 2015. Here Friedman gives president Obama's response to his questions, and Obama's concerns about the heated rhetoric in the U.S. and Israel on the negotiations with Iran detracting and distracting from his key goals of protecting U.S. interests and Israel. On the Sunni states, Saudi Arabia and Egypt, Obama points out that there are some tough conversations needed about changes inside their societies which pose a greater threat to the governments than Iran. Obama says he understands perfectly that Israel and the Jewish people after their experience of the last hundred years are determined to not let Iran develop a nuclear weapon, and their right to be concerned that the agreement could let Iran clandestinely develop one. Obama says the verification is extensive and covers any facility in Iran, any suspicion about secret facilities, yet it leaves the subsequent decisions if Iran created difficulties, to a international body over which the U.S., UK, France, have no control. This is a principal issue for critics of the negotiated agreement. No mention is made of why Iran simply discarded the option of sending the atomic material to Russia to be processed into nuclear rods for the Bushehr nuclear plant built by Russia only a few days before the final outline was developed. And why the U.S., with allies Germany, France, UK and Japan, did not offer the Iranians an economic aid package if needed in return for the billions Iranians invested for that atomic material, to ensure that the atomic materials are shipped out of the country- to create a nuclear agreement that would be credible to all parties. The economic aid would benefit Iran modernize its oil industry, including refining operations, meet basic import needs, and provide tangible proof to the Iranian people of our best intentions for the future, that president Obama strongly espouses in the interview. The interview does show the quandary president Obama faces in Iran for strong action, that is a result of failed policies with Iran since the Eisenhower administration's intervention 1953 during the Cold War that displaced the elected government of Mosaddegh in Iran and setup the Shah's regime in 1956, the support of Saddam Hussein in Iraq in the war against Iran, which Obama mentions in this intervew. In the light of the repeated failures of the U.S. policies a Democratic party leader faces increasing reservations for taking strong action against Iran's development of nuclear weapons capabilities, preferring to exhaust every diplomatic channel, and take risks in the hope that time will give the Iranian people an opportunity to to reintegrate in the global community and pursue the peaceful development of nuclear energy. This strain in president Obama's thinking is evident throughout the interview with Friedman. Other aspects of president Obama's policy in the Middle East shared in the interview are about supporting the Sunni states in some areas, and Iran in some areas, at the same time as the nuclear issue is "put in a box" and separated from the regional conflicts. Friedman presents this as the Obama doctrine, yet it appears to be coming after a series of improvisations in foreign policy following a failure to act in 2011-2013, when the "once in a lifetime" opportunities presented by the Arab Spring were not taken up by the Obama administration, leading to the region's current disintegration....

LyrArc Article Gist
ECB president, Mario Draghi, is interviewed at his office in Frankfurt by the Wall Street Journal's Blackstone, Karnitschnig, and Thomson. Draghi quotes economist Rudi Dornbusch, who told him in the old days that the Europeans were rich enough to afford paying for it if everybody didn't work. Draghi, was head of the Bank of Italy, before becoming president of the ECB. He is acutely aware of the problems faced by Italy and other countries like Spain which have let labor markets become rigid, with extensive job protections and generous benefits for the unemployed. The result is that employers are reluctant to hire and young people face high unemployment rates- as high as 50% in Spain. For this reason Draghi sees the old social model in Europe as obsolete and already out. Draghi's sees austerity measures and spending cuts with the structural changes underway in Spain, Italy and other countries as the only way to generate economic renewal. On the Long Term Financing Operation launched by the ECB in Dec. 2011, Draghi says there was agreement within the ECB and the decision was unanimous. He makes it one of his objectives to achieve as much consensus as he can, to do what is right for Europe and to do it together with his colleagues in the ECB and the EU. That financing operation, and the binding deficit controls achieved at a recent summit of European leaders, he sees as all part of the pathway to fiscal union. ...

LyrArc Article Gist
The logjam continues between the French and German banks- represented by the Institute of International Finance and its negotiator Charles Dallara- and the governments of Germany and Greece, supported by the IMF. The position of the Greek government is that the interest rate on new bonds stretching out over a long time period that woud be exchanged at 50% face value of existing bonds should be set at rates well below 4%, because Greece faces a growing deficit and rapidly worsening economy. The German government which is faced with the prospect of providing additional funds to Greece supports this. The IIF position is for an interest rate of between 4-5%.

LyrArc Article Gist
German perceptions of Mikhail Gorbachev are shown here in DW.com. He is revered in Germany because of Gorbachev's efforts to end Soviet rule in East German state called the GDR, leading to the fall of the Berlin Wall. Gorbachev supported German reunification but did not do this is in a way that ensured that ordinary Russians and citizens of the GDR could make the transition to democratic processes in a smooth way. He also failed to grasp that economic transition could be difficult and would require extensive aid and grants from the west, and that safeguards and protections for retired pensioners and vulnerable sections of society needed to be in place. The following is a reflection of the background in political government and economy of the events in Europe leading to the war in Ukraine.  As a result Gorbachev's instincts were right by first 1956 as a student, and then 1979 as government official about the need for democratic processes to realize the real potential of Russia, just as has happened in many countries that lacked these processes for change in government- Japan, Germany, South Korea, India, Brazil and many countries in Asia and Latin America. But not realizing that these countries made the transition with considerable American and British assistance. Even where there was no direct assistance indirectly the British setup the first limited Swaraj or free rule in India, with elections and elected assemblies in Indian states in the 1930's, following the pattern in Dominion states Australia and Canada. Mohandas Gandhi negotiated within these processes for rights of South African Indians and Colored people, gaining experience, including study of British law.  A son of poor farmers in the agricultural region of North Caucasus, in Stavropol, it is relevant today that his maternal grand parents were from Chernihiv in Ukraine. He came to power in 1980 after entering the Politburo that year. These were the waning years of Leonid Brezhnev, president of the Soviet Union who followed Nikita Khrushchev (1953- 1964). Khrushchev was from eastern Ukrainian region near Donetsk. Leonid Brezhnev was a protege of Krushchev since 1931, from Kamianske, Ukraine.   Gorbachev was influenced by Khrushchev's speech that denounced Stalin in 1956 in favor of a freer and more open society. Khrushchev, became first secretary of the Communist party in 1953 after the death of Stalin and set the pace of post war Soviet society from 1950 to 1964. He removed the fear of the dictatorship of the proleteriat working class, increasingly dictatorial under Lenin, and blatantly arbitrary under his successor to make Soviet Union a freer society.  Yet his tendency to make decisions on his own without consulting others, and the failure of agriculture in the Soviet Union including food shortages led to his replacement by his protege Brezhnev. Brezhnev's whole career was built under Krushchev in Ukraine, in the army in Ukraine, and as a political leader in the Soviet 18th Army that entered Prague in 1945 defeating the Nazis. Why is this relevant? Gorbachev was educated at Moscow State University when the Soviet Union was in the Sputnik era, and felt at the time that it could reach the 1950's standard of living in the US- very different from the earlier leaders. Yet he may have been too much of an optimist and not hands on in understanding the working of a modern economy as large as Russia and the interests of different groups of society that had to be be balanced and protected. His understanding of the US and of how the US and British economies had evolved was limited or nonexistent. The isolation of the Soviet period may have compounded this. The Russian state in the Soviet Union could not simply unwind the power of the state and its intervention and everything would come out right of its own accord.   Leonid Brezhnev, the Ukrainian Russian who succeeded Krushchev from 1964 to 1979 let the system of Soviet rule remain as it was, in the Great Stagnation, leading to lethargy, lack of innovation, and a weak economy with military expansion. Gorbachev tried to regenerate the system by opening it up, but failed to see that there was a risk that it could come apart quickly as it did in just 4 years after he became president in 1985. Only the centralized power of the state had kept the Russian state together from the Tsarist period through the Communist period. The risks of this Gorbachev failed to grasp. What if it happened too quickly without a safety net for the people who could not make the transition. What lawlessness and failure of the rule of law could happen. The US and Britain had evolved their democracies over centuries. Wars were fought in the US and Britain over rights and responsibilities of kings and parliaments. In the US Lincoln fought the civil war not just for emancipation but to ensure safeguards for free white men on the farms so that Labor did not get disabilities placed on them by Capital (entrenched forces of Capital of which the southern plantation economy was only one aspect.)  Japan and Germany were set up as democratic states through American power and constitutional frameworks with Marshall Plans or agreement to take in unlimited imports from Japan. This bad scenario happened in Russia because Gorbachev failed to set the conditions first and work patiently to achieve them including introducing limited  elections and parliamentary processes first in Russia.  Leaders such as Yeltsin who succeeded Gorbachev in 1989, winning the elections that followed, failed to provide a safety net for the vulnerable in the 1980's. Unemployment increased rapidly, life expectancy dropped in Russia, and the economy failed in the early years after 1980. A Marshall Plan like that offered to Germany could have helped but Gorbachev's failure may have been his failure to provide this transition by arranging for West Germany and the US to support a planned transition, a kind of Marshall Plan of Aid, and maintaining a gradual move to democracy as the country was given time to learn institutions of American and British parliamentary democracy. No such Marshall Plan was negotiated for a smooth transition over inevitable obstacles, no safeguards were put in place for illegal efforts to control the state by rogue elements and to seize assets of state companies, no efforts to first introduce limited elections and parliamentary processes for learning democratic process in Russia, and the people of Russia were left with a memory of the this period as a bad lawless period from 1989 to 2005.  Leading to the situation today under Putin of aspiring to the Soviet period as a kind of period that had offered Russia the world recognition it had lost. And this had happened even though the Russian economy had recovered and the standard of living had risen under Putin. Putin's career spanned the period as a Russian official in Dresden, Germany Democratic Republic or Soviet period East Germany to working in the St Petersburg City Council under Yeltsin. He personally witnessed the fall of the Berlin Wall and the fall of the German Democratic Republic from Dresden and Gorbachev's refusal to build a transition period for the changes so that it would not be traumatic for the GDR. Even after reunification these traumas remain in some segments of the older population in East Germany that saw themselves as neglected and support extreme right wing parties in eastern German states by 2020- considering the Soviet period as one in which their lives were less neglected.  After three terms as president Putin with his own traumas from that period in Dresden, and with a mother lost in the period after the Nazi invasion of Russia, a father who survived the Battle of Stalingrad, saw the period of lawless behaviour in the collapse of the Soviet Union as the"greatest geopolitical disaster of the century."  Putin and people around him made missteps and miscalculations launching a war in Ukraine, leading to the situation today- jeopardizing hard won gains for the Russian economy. By 2022 Russian standards of living had risen and the economy was in the best shape it had been in the modern period since the Industrial Revolution. Yet largely exposed because of the dependence on oil and gas during a period of climate change and focus on building future economies free of fossil fuels.  Putin in his own peculiar logic may have seen this as the only opportunity in 2022 before deliinking from fossil fuel reduced the importance of the Russian fuel dependent economy to make some territorial readjusments in Ukraine with a quick war taking Kviv. That turned into a massive miscalculation with the emergence of nationalist fervor in western Ukraine spreading to the whole country of 40 million people. In the future to 2030 with phasing out of the fossil fuel economy, Russia without the connections to the US and European Union's technology and resources it had during Putin's three terms, and facing strict sanctions from US and EU, faces a difficult future. This has cautionary lessons for all countries- the US that read too much into the fall of the Berlin wall and indulged in a losing proposition with free markets that damaged its infrastructure and manufacturing with shifts to China, China understanding of how it to was dependent on the world economy for its future development, India that had to navigate a difficult period and what lessons to draw for building a bigger economy, the EU realizing the failure of its policies of depending on Russia for energy and China for manufacturing with fragile supply chains,  and Russia that there were twists and turns and the need for safeguards and experience building democratic processes before these processes would work for the economy, its people and for Russia as a nation. ...

LyrArc Article Gist
Narendra Modi is now the choice of the BJP party in India to lead it against the ruling Congress party of Sonia and Rahul Gandhi. The corruption in government and the slowing growth have improved the chances of Modi, the chief minister of Gujarat state in northwestern India, near Mumbai. Modi has done well in Gujarat state in a number of areas- from foreign investment in manufacturing, infrastructure development, and better governance. His plan is to replicate this at the national level. His slogan is minimum government and maximum governance.

LyrArc Article Gist
ECB president, Mario Draghi, is interviewed by Wall Street Journal reporters Blackstone, Karnitschnig, and Thomson, at his offices in Frankfurt. The reporters press questions such as- are austerity measures going to work in Greece, what happens with Portugal, what is "good" and "bad" austerity, why aren't eurobonds the answer. Draghi sidesteps the Greece question by saying it will depend on implementation of the commitments in fiscal policy and structural change. He takes the discussion to the general situation in southern Europe, in Italy and Spain, with the high youth unemployment and inflexible labor markets, making the point that there is no alternative to fiscal consolidation considering the excessive debt to GDP ratios of Italy, Spain and other countries. Good fiscal consolidation is where the taxes are reduced and government expenditure is on infrastructure and capital investments. Bad fiscal consolidation merely raises taxes, leaves current expenditures as is, and reduces capital investments. From his experience with the situation in Italy- and a similiar situation exists in Spain- Draghi points to the ways in which inflexible labor markets for the protected part of the population leads to temporary work contracts and few job opportunities for young people. The unemployment rate in Spain for young people exceeds 50%. Draghi's view is that fiscal consolidation is contractionary in the short term, but leads to growth in the longer term as structural changes are made and the confidence channel operates. It is also necessary to be put in place first, so that there is time to put the structural changes in place. He sees the program in Portugal on track. At the same time Draghi is aware of the drying up of credit in Spain, Italy and other countries even after the Long Term Financing Operation, and will respond as the situation changes. On the point of eurobonds, Draghi says it cannot be accepted that you spend and I pay, countries spend as they see fit and then they issue bonds jointly. For there to be trust its essential that each country stand on its own, and this is also a condition for setting up a durable fiscal union. This aspect of his views are consistent with the views of German chancellor Merkel and the northern European countries, Germany, Netherlands, Finland. Draghi is not new to this job after being president of the ECB for 4 months. He was on the Governing Council of the ECB for 6 years and has a good grasp of decisions made in the past. When asked if there is more that he could do for growth, Draghi's response is that the ECB will do the most it can do for price stability in the medium term and at the same time within the terms of the Treaty to promote financial stability. ...

LyrArc Article Gist
This New York Times editorial says a smaller Wall Street and growing jobs in other fields will be good for New York as well as good for the country. It says New York politicians should focus on finding new ways for New York to broaden its tax base and get new businesses and new opportunites in fields such as media, advertising, entertainment, health care and tourism. Especially welcome are initiatives such as the science and tech campus of Cornell University promoted by Mayor Bloomberg. Tighter financial rules and higher capital requirements are good for the country and for New York the editorial emphasizes, because they help control reckless banking practices that destroy capital and opportunities for growth elsewhere in the economy. It points to Kevin Rose's Nov. 21, 2011 account in the Times showing a healthy culture shift in New York and the country with the status jobs being seen not at Goldman Sachs but at Google, Apple and Facebook. Rose's account shows that in the last 3 years the number of Wall Street employees of ages 20-34 declined by 25%....

LyrArc Article Gist
The warning light is again on for Greece in the beginning of 2012, as the rapidly deteriorating economy makes a 50% loss by private creditors insufficient to help it meet repayment or refinancing of bonds coming due in 2012. Additional funds will be needed from EU countries unwilling to do this. 14.5 billion euros in Greek bonds come due on March 20, 2012. Greece also faces a public increasingly resistant to austerity cuts. A vountary exchage of existing Greek bonds by private creditors for new bonds at 50% face value and maturing over a longer period will be done under English law. This will be harder to change in the future. Most of the existing bonds were issued under Greek law which can be altered by Greece's parliament.

LyrArc Article Gist
Strikers at a Honda transmission factory in Hoshan, 100 miles northwest of Hong Kong are asking for raises of $117 or 800 renminbi in cash above the $132 a month or 900 renminbi that they are now paid. About 950 of 1900 workers at the plant are trainees, young people from vocational schools or high schools earn $132 a month. Older employees earn upto 1500 renminbi or $220 a month. The significance of this strike is that the Chinese government is tacitly encouraging the strike as it begins making moves to increase domestic consumption and make the economy less dependent on exports. This requires consumer's having larger purchasing power and higher wages. It also means that China will not remain the low cost manufacturer for manufacture goods makers around the world for very long. Consider the size of the increase and the policy change of the government and this implies a significant shift by China.

LyrArc Article Gist
A new generation of younger leaders takes over at the European Central Bank under Mario Draghi. Belgian economist Peter Praet succeeds Peter Stark of Germany in the Economics Department. Portugal's Vitor Constancio is vice president. Jorg Asmussen, 45, from Germany is on the ECB executive board, so is Benoit Coeure, 42, from France, and Klaas Knot, 44, from the Netherlands. Asmussen will head the ECB's International Division. Jens Weidmann,43, is the new head of the Bundesbank. The result experts say could be a reorientation of the ECB's outlook away from the rigid anti-inflation stance of Draghi's predecessor, Claude Trichet, and a willingness to try new approaches to help Europe tackle this recession.