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The European Union Commission says Ireland must recover 13 billion euros in back taxes for giving tax preferences to Apple that are against EU rules. The EU Commission says Ireland allowed Apple to pay a corporate tax rate of 1% on its European profits in 2003, and .005% in 2014. The EU Commissioner says the use of Ireland as the place where Apple pays taxes on operations in Europe has no base in reality, as most profits are earned in other countries outside Ireland. Taxable profits of Apple "did not correspond to economic reality," according to Ms. Vestager, the EU Commissioner.  In the current environment where political upheaval is unsettling the democratic process in the U.S., Britain, Spain, France and Italy, as well as in Brazil and other countries in the developing world- because of deep recessions, and efforts to cut the deficits with deep cuts in state spending including in education and healthcare, basic services- the moves by companies to reduce taxes to these absurdly low levels such as .005% when other companies in the EU are paying 12.5%, is becoming increasingly unpopular. As pointed out in this BBC News article this sounds like the way Carnegie, Rockefeller and Vanderbilt operated during the late 19th century, and were seen as operating in a manner that was above the law. Janet Yellen pointed out at a Boston Fed Conference on inequality in Oct 2014 that the bottom half of the distribution or 62 million households in the U.S. in 2013, had a net worth of about $10,000, One quarter of these households had a net worth of zero dollars. The working class and blue collar workers in the U.S. provide much of the support at Trump rallies. Younger college educated people support Sanders, because of the situation of the working and middle class in the U.S., and a similar situation exists in Europe. It is for the sake of the democratic process and delivering services in education, healthcare, and other basic areas to all, that companies small and large need to pay their fair share of taxes, regardless of size, influence, or technological advantages. Today this is is seen by most leaders who draw public support as the right way forward for the U.S., Latin America, Europe and Asian countries, including proper allocation of resources to best serve the needs of working people. For example the 13 billion euros is equal to all of Ireland's healthcare budget, and 66% of its social welfare budget.    ...

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Chancellor Merkel of Germany proposed bilateral or trilateral deals between smaller groups of countries as a temporary solution till some agreement can be reached on immigration. She said "The European Council will not yet provide an overall solution to the migration problem." Hungary, Poland, Slovakia, Czech Republic which have opposed a quota system for asylum seekers did not attend.  Austria, Denmark, and Italy with the new government openly opposing immigration, attended the summit. Merkel said  a "lot of goodwill" was created, and leaders agreed that borders need to be better protected to prevent people from entering illegally, and reducing immigration at its source points in Africa. The migration problem has persisted as an issue long after the huge surge in immigration in 2015 has diminished to a trickle, and after chancellor Merkel has accomodated critics with new policies strictly limiting new immigration. New governments in Denmark, Austria and Italy, and the government in Hungary under Viktor Orban, have kept the issue alive by running on anti-immigration platforms. The European summit in 2018 was used by Merkel to reduce disagreement on this issue by allowing different countries to express their views and working in smaller groups for mutual benefit. It also reduces tension inside her CDP-CSU coalition after Bavaria based CSU decided to run in 2018 state elections on a platform calling for securing borders. ...

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The president of the Pew Research Center, Andrew Kohut, says Romney was an especially weak candidate for Republicans and this has to be taken into account in understanding the results of the 2012 U.S. presidential election. Romney failed when it came to establishing empathy with voters compared with Obama and this was a significant factor- 53% to 43% for Romney in exit polls. Even on the economy which should have been a Republican strong point Romney failed to get an advantage over the president with both tied at 48% to 49% for Romney. Republicans were favored in their approach to government- only 43% favored activist government in 2012 compared to 52% in 2008, and 49% disapproved of the Obama health care law and only 44% approving in 2012. On social issues exit polls showed 59% believe abortion should be made legal, and on immigration 65% support a pathway to citizenship for illegal immigrants. Early in the primaries some commentators said the Republicans were not fielding strong candidates for president who could relate to voters and this has turned out to be true. This also explains the Republicans retaining a majority in the House of Representatives and continuing the hold on governorships. ...

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The UN Refugee Agency says 7.6 million Syrians were displaced and refugees in their own country, 3.6 million Syrians are in other countries as refugees. Worldwide it says about 60 million are refugees. About half of the refugees are children. Of this about 14 million people were displaced in 2014, with 11 million of this displaced in their own country. Fighting in Iraq, Syria and Libya, appear to be the main cause of displacement in 2014. Never before in the agency's 50 year history are there so many displaced people in their own countries.

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Aizenman in this must-read describes the National Soda Summit and the presentation of one man Todd Putnam, a former executive from Coca-Cola that throws light on one of the truly important things that happened in the lives of Americans in the postwar period of development and growing prosperity. This is the development of marketing and advertising and its singular application in the case of Coca Cola to promoting sugary drinks. It is also related to what even business people describe as the single biggest problem in America. And it is happening at a time when the story is being repeated in developing countries such as China and India. Putnam describes the exhilaration, he and other Coca-Cola managers felt when the graphs at internal presentations showed Coke passing milk in consumption per capita in America. Several other facts stand out in Putnam's description of his experience- the ignorance on health issues among his marketing peers, the huge marketing prowess and dollars brought to bear once a goal such as increasing per capita consumption of sugary drinks was set- he was hired out of Purdue by P&G and worked at Disney before joining Coca-Cola- and the focus on the 12-24 demographic with 90% of all soft drink marketing targeted at this segment. What he regrets most is the focus on minorities who suffer some of the highest levels of obesity in America. No mention is made of the efforts underway in developing coutnries such as China and India which are seeing a surge in obesity rates and diseases such as diabetes. Coca-Cola says 41% of its sugary drinks are low calorie, but compared to milk, fruit juice and other healthier alternatives where does this rank? The cost to the nation's health care system alone would show that the performance of Coca-Cola's stock price over the postwar period came with a price tag that was never even thought about, when healthier alternatives as health drinks companies have found sell well when well marketed and formulated for different groups....

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China is implementing president Xi Jinping's policy to reduce foreign influence in China's internet, and promote local tech suppliers. Restrictive policies went into effect for IBM, Cisco, Microsoft, Qualcomm, to reduce their influence in China's core tech industries. Apple remained an exception till April 2016 when Apple was asked to shut down Apple iBooks and iTunes services in China. China sees this as an effort to promote in Jinping's words local "high quality content with positive voices for a healthy, positive culture that is a force for good.," according to Xinhua news service. It also increases the role of Huawei, Alibaba, and Tencent in the internet in China.

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Baker and Rudoren of the NYT describe how the relationship between Netanyahu and Obama gradually deteriorated over a number of years.

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The Indian economy is expected to grow by 8.5% this year compared to 6.5% in 2009. But a major problem looms in the high inflation facing India. The poor monsoon in 2009 led to higher prices for foodgrains, lentils, and sugar. And the government's cut in the fuel subsidies will lead to more efficient use of energy, but will lead to one additional percentage point in wholesale price inflation according to the Reserve Bank of India, India's central bank. The whoesale price index in India went up by 10.5% in June from the prior year, and this after a 10.1% increase in May. Bloomberg's tracking of consumer prices in the Asia-Pacific region shows India at the top of 17 countries in inflation, and consumer prices paid by industrial and farm workers in India are shown to be increasing at 14% annually. The government is coming under criticism for not releasing more grains from its stocks to soften the impact of last year's monsoon. The Manmohan Singh government finds inflation at above 10% unacceptable and is looking for further action from the central bank. Reserve Bank of India governor Subbarao has raised rates 3 times since March 2010 to 5.5%, and a further increase is expected at its next meeting on July 27. A better harvest in September, from a better monsoon season, could help lower food prices. If this does not happen, more tightening by the central bank could hurt economic growth, putting the government in a quandary....

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Israeli prime minister Netanyahu retracts his statement about rejecting a two state solution in an interview with Andrea Mitchell of NBC News. He says he meant that it was not possible under the current conditions with terrorism in the Middle East, Iran pursuing a nuclear weapon, and the Palestinian Authority having an alliance with the militant Hamas movement. In 2009 Netanyahu said he supported a two state solution in a speech at Bar-Ilan University, and the statement before the election was meant to bring out larger number of right wing votes. He also clarified his comments about Israeli Arabs "voting in droves," as meant to bring out large numbers of his own voters to vote, saying Israeli Arabs voting was "sacrosanct." The White House response was to say that it was free to support a two state solution at the United Nations, and U.S. president Obama discussed the comments on Israeli Arabs- seen widely as racist baiting- with Netanyahu in a phone conversation. The rift between the two leaders is now seen as irreparable and bigger than ever....

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The different strategies of Apple and Samsung in getting to the point where the two companies now dominate the smartphone market. Whereas Apple makes only one phone, its iPhone, Samsung's strategy is to have multiple phones in each price segment. It has five levels of Android based phones, with 2-3 models in each price segment. Samsung also benefits from doing its own maufacturing. When faced with a number of technologies Samsung's strategy is to bet on all of the technologies until one of them emerges as a winner, and then concentrate resources on that technology. It uses a similiar strategy for televisions. Apple by contrast places more emphasis on original design and profit margins over sales, gaining sales without eroding margins by being the first innovator in the market. It also has its own unique arrangement for manufacturing at lowcost with Foxconn in China that supports its high margins. Apple is secretive about its designs and promotes its brand heavily with its own retail stores. Apple also uses its innovative edge as leverage to steer profits away from carriers. Analyst estimates are that carriers such as AT&T and Verizon pay about $400 per iPhone to subsidize its cost because this is the only way to get customers into their retail stores. IDC estimates are that the smartphone market is $219 billon in 2012. Both companies are very close in volume- IDC estimates Apple shipped 93.2 million smartphones in 2011, compared to Samsung's 94 million units. Apple has market share of 23.5% in the fourth quarter 2012, up from 16% in 2010. Samsung has 22.8%, up from 9.4% in 2010. Apple and Samsung have together taken 91% of operating profits of all cellphone companies in the fourth quarter, an increase of 30% from 2011, according to Strategy Analytics....

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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.

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E.J. Dionne, of Gerogetown University and the Brookings Institution, says the current situation in U.S. politics resembles the 1912 presidential election when a Princeton professor Democrat Woodrow Wilson called for stronger curbs on big financial institutions, and Republican Teddy Roosevelt, a former president, called for tighter regulation. During his presidency Roosevelt had helped pass legislation to curb monopolies, and represented the Progressive wing of the Republican party. Taft who was president was Teddy Roosevelt's protege and vice president before becoming president, and alienated Roosevelt by moving away from progressive actions taken during Roosevelt's administration. Dionne says Hillary Clinton's views are similiar to Teddy Roosevelt's views, and Bernie Sanders' views to Wilson's views. Wilson won 435 electoral votes to Roosevelt's 88, and Tafts 8. The big difference now is that on the Republican side the progressive wing that Teddy Roosevelt established is non existent, with Cruz's positions similiar to Reagan's, Kasich and Cruz at best close to Jack Kemp's views on broadening the Republican base with concern for working class issues, and Trump's views not clear because of lack of clear policy or programs beyond the personality based campaign. Dionne points to the problems facing the "progressives" of Sander's young supporters staying away from the polling booths with Hillary Clinton as the nominee, putting a Republican nominee into the White House. Overlooked here is the idea that much of the election campaign even in an advanced country like the U.S. is fought on slogans, leaving out some critical facts. The problems progressives face emerged during a period when a Democrat was president, and the influence of lobbyists had not diminished. Outsiders on the Republican side are focussed on diminishing the power of lobbyists, the political calculus of elections, and other interests that have affected policy in the last 8 years hurting the middle class and working class. ...

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Mitt Romney describes his experiences with different companies he worked with at Bain Capital and how he would use that experience in his job as President. One approach he emphasizes is proactive problem solving and tackling problems early.

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Seib draws parallels between the situation in 1889 with the large immigration, growing inequality, impact of science and technology, and progressive parts of the two main political parties. Teddy Roosevelt and Woodrow Wilson pulled together progressives in the Republican and Democratic parties in the next two decades, and FDR-Truman continued progressive policies in the nineteen thirties and forties to tackle the Depression and promote economic recovery. Financial crises are not mentioned by Seib. The recurring financial crises since that period led to the creation of the central bank, the U.S. Federal Reserve and financial regulations for banks. The financial crises with asset bubbles in 2000 for tech and bubble in real estate in 2009, resulted from the lifting of financial regulation and lack of close supervision of financial markets.

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The stark divergence between 2011 and 2013 forecasts for Portugal's economy show the need for better terms on Portugal's EU loans. The 2011 forecasts of EU lenders estimated a much lower level of contraction in the economy and unemployment. In 2011 the lenders estimate was for a economic contraction of a combined 4% in 2011 and 2012 and returning to growth in 2013, with unemployment peaking at 13%. The forecasts in 2013 estimate the economic contraction at 7% for 2011-2013, with unemployment reaching 17.3%. Portuguese government officials say they overestimated tax revenues and underestimated the payouts for social benefits to the unemployed. Prime minister Coelho is criticized for increasing taxes and making spending cuts blindly. He faces angry protestors singing the anthem of Portugal's revolution against the dictatorship in 1974- "Grandola, Vila Morena."

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Aaron Back says this time China is likely to feel the effects of the volatility in the stock markets. The surge in the stock markets added about half a percentage point to GDP growth in the 1st quarter of 2015, according to Capital Economics. GDP growth in the 1st quarter 2015 was 7%. Capital Economics says removing the boost from the stock market to a sluggish economy would mean a loss of 1 percentage point in GDP growth. Equity issuance was one way China hoped to reduce high debt levels at companies, and that avenue would the be that much harder to access to reduce debt levels. Margin financing is about $354 billion, or 3.5% of GDP according to Goldman Sachs, posing another source of problems and potentially affecting growth if stock losses lead to defaults. Declining investor sentiment and confidence in management of the economy would be another casualty in this situation. Only 10% of Chinese households own stocks compared to 50% in the U.S., yet Aaron Back says the effects of this are likely to be felt in lower economic growth and shaken confidence in the economy....

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Greg Ip provides useful insights into the nature of the economic recovery in Britain compared to the U.S. by 2015. The recovery in Britain has done better than in the U.S. in job creation, but has lagged behind in productivity gains. The labor force participation rate is 72% in Britain compared to 68% in the U.S., going back up to 2007 levels in Britain, whereas in the U.S. it has steadily declined with some older working class Americans too discouraged to look for work and left behind. Stagnant wage growth is a major issue in Britain, more so than in the U.S. where wage growth is slow. Economic austerity is not the main cause of the economic difficulties as the coalition government of prime minister Cameron relaxed earlier goals for austerity by 2012 with tax revenues and growth below forecasts. The structural budget deficit has been reduced by 6.6% of GDP since the peak, and the Office of Budget Responsibility estimates the UK economy was 1.5%-2% smaller by 2013 because of the austerity policies. Britain was also affected by the eurozone crisis to a larger degree than the U.S. Productivity remains a long term challenge- with needed investments in housing, education and infrastructure, improved lending for new business, and higher tech improvement exports....

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Sheila Bair, former head of the U.S. FDIC, points out flaws in the rules for capital adequacy ratios and risk weighted assets which allow banks to increase their capital adequacy ratios. The ratios show the financial strength of the banks and their ability to absorb losses, which makes their accurate calculation very important for the safety of the U.S. banking system, especially with large "too big to fail" banks. Bair says the 2013 U.S. Fed stress tests showed Bank of America as having a capital adequacy ratio of 11.4%, when it should actually be 7.8% without the risk weighted adjustment. The mortgage banking crisis showed how the risk wieighting can be flawed and give a distorted representation of the acutal risks facing the banks in its assets. For Morgan Stanley the 2013 stress tess by the U.S. Fed showed the capital adequacy ratio at 14%, taking out the risk weighting adjustment this drops to 7%. Bair says its not the idea of risk weighting that is the problem, but the way it is applied- for example considering sovereign government bonds in the eurozone as zero risk, or that only 20% of the accounting value of debt one banks buys from another bank is to be taken into account in setting the ratio. Go back to the drawing board she says, it makes no sense that Citibank debt be shown as having one fifth risk of IBM's. ...

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The experience of shift worker Randy Johnson, at Ampad. American Pad & Paper (Ampad) was acquired by Bain Capital in 1992.

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This WSJ editorial points to the median income levels for 2014 being 6.5% below the level in 2007, median income level declining in 2011 and 2012, stagnant in 2014, according to the Census Bureau, as a reason why there is so much economic anxiety for average Americans. The appeal of Sanders and Trump reflects this anxiety and anti-establishment feeling. The official poverty rate at 14.8%, means 46.7 million Americans are below the poverty line. About 34.5% of the people experienced 2 or more months below the poverty line in 2009-2012, showing how it is hitting the middle class.