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The sectarian tensions between Sunnis and Shiites in the Middle East worsen as the Saudi government of the royal family executes a Shiite cleric, Baqr al-Nimr, involved in Arab Spring related protests in Saudi Arabia calling for change in the country to improve the conditions of minorities. The continuing war in Syria with the support of Iran, the involvement of Russia and bombing of Turkey related ethnic groups, worsen tensions in the Middle East. The Obama administration's efforts to work with Russia to bring a peaceful resolution to the Syrian civil war, cited by WP's correspondent Liz Sly, may have lost credibility with Sunni states because of Russia's bombing campaign in Syria and on the border with Turkey.

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Feldstein says GDP growth was smaller than the 1.8% that was reported for the 1st quarter of 2011, because two thirds of that 1.8% went into business inventories and not for sales to consumers or final customers. This means final sales growth at an annual rate of 0.6% and actual quarterly increase of 0.15%. With mostly inventory investment and not much response from the consumer he says business cannot be persuaded to hire and invest. A closer look at the numbers shows the growth was in February and March, with declines in April for real wages, durable goods orders and manufacturing production, existing home sales, and in real per capita disposable incomes. Feldstein sees the Obama administration's failure in several areas. The stimulus could not make up in size and structure for the loss of annual consumer spending of $500 billion and loss in housing construction of $200 billion. At $300 billion in 2009 and $400 billion in 2010 it was not enough to fill the huge gap presented by the financial crisis. President Obama allowed the Democratic leadership in Congress to put together a package that while adding to the deficit added less than a dollar to GDP for every dollar of stimulus. The stimulus lacked punch for economic growth as it consisted more of transfers to state and local governments, transfers to individuals, temporary tax cuts for low income people etc. The lack of a plan to reduce the deficit by creating higher uncertainty about future tax rates and interest rates has hurt the economy. The President's health legislation with the cost of $1 trillion over 10 years diverted much needed time, attention and bipartisan goodwill from the core issues of unemployment and the deficit. The Obama administration also did not tackle the housing issue as suggested by Feldstein with specific proposals in the first year of the Obama administration, with very little done to reduce the millions of foreclosures that have kept housing in a prolonged slump. ...

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With 5.7 million jobs lost since December 2007 fewer people are paying payroll taxes to support Medicare and Social Security says Labor Secretary Solis. As aresult Medicare will run out of funds by 2017, 2 years earlier than predicted last year. Medicare and Social Security issued their annual report yesterday, suggesting the nation cannot afford the cost of Medicare at the rate of current expenditure growth. Social Security will run out of money by 2037 four years earlier than predicited before. The only way to keep Medicare solvent says Mr Geithner is to reduce the rate of growth of health care costs.

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Prakash Singh Badal was chief minister of Punjab over many years and his career would go on "to mirror that of the Punjab itself," says this report in The Indian Express.

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Growth in airline travel is coming from higher income buyers, as people earning around $75,000, the lower and middle income buyers are holding back struggling to meet the rising cost of living.

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This WSJ report by Collins, Belkin, Parti and Whyte takes an indepth look at the issues surrounding anti-semitism on US campuses, in particular UC Berkeley, U Penn, Harvard, Columbia universities. It looks at what happened in the first term and how with the Gaza war the issues of antisemitism on US campuses increased and the DJT administration, Education Secretary McMahon, Assistant Attorney General for Civil Rights Harmeet Dhillon, and domestic advisers in the Trump administration, decided it was time to rein in the antisemitism seen at top ranked universities.  On the campus of UC Berkeley in Feb 2019, Hayden Williams was a young conservative activist who set up a table to recruit students to Turning Point USA. He was punched in the face in an argument which attracted media attention. DJT said at the time that "we got to do something about this." In meetings with Hayden Trump discussed actions such as cutting off federal funding to universities with free speech violations. This is the genesis of the current action says WSJ where Harvard faces cut offs of funding for lack of action to control antisemitism on campus and the president asking Harvard to stop enrollment of international students. Some international students have been involved in the activism tending towards antisemitism.  There is also the sense that some universities are admitting far too many, as many as 40% of the enrolment, from overseas students- a form of neglect of local American students, who now have less access to the resources that the federal government is giving to these universities which they should be entitled to as Americans. U Chicago, Harvard and Penn are in the 30%+ range for overseas students and Columbia around 40%. ...

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It is "bonkers" says this NYT report about how the baseball game has switched back and forth 9-0 and 8-0 from LA Dodgers favor back to Mets 12-6 in favor of Mets over 5 games. Dodgers winning 3 games, Mets 2. Into the 6th game.

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As inflation eases and job growth continues in the US, and to a lesser extent also in the European Union, there are different opinions on why this is happening. One camp says that the surge in inflation was from temporary supply shocks. Once these shocks abated and supplies came back into the market the situation has eased. Central bank increase in rates played a smaller part in easing inflation say these experts. With interest rates up on loans there is less demand for cars in the US that leads to sellers having less pricing power. The other camp says the increase in interest rates at consecutive meetings had a strong impact on expectations of inflation. Higher interest rates played apart in cooling demand for cars and home purchases.

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The average annual UK household energy bill is expected to double from about 2000 pounds now to over 4000 pounds by April 2023.

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Shavit, a senior columnist for the Israeli newspaper Haaretz, says the conditions for peace in the Middle East exist in the changing political and social landscape after the Arab Spring and the social protests in Israel. This was reflected in the emergence of a new party with popular support in the recent Israeli elections. Both movements are focussed on internal changes within society- Arab societies and Israeli society. This creates new opportunities says Shavit for a quiet movement and contacts betwen the people in the Middle East to improve living conditions and democracy. This is more firmly grounded than past efforts because it is based on popular sentiment, and less dependent on failed negotiations between the leaders in the Middle East. He points to failures in decades of such negotiations and finds a more promising atmosphere in the general feeling in the Middle East that focusses on the region's problems in inequality, jobs, infrastructure, and opportunity.

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About 570,000 Asians live in the Washington D.C. area, making it the area with the largest concentration of Asian people in the East coast of the U.S.. Chinese in the District and Montgomery County, especially in Rockville and Potomac. Filipinos in Prince George and Charles counties. Indians in Loudoun and Fairfax counties. Koreans in Centreville. The 2010 census shows a 60% increase in the Asian population for the Washington D.C. area. Washington D.C. now compares with New York, Northern California, and Boston in the number of Asians living there. Indians are the fastest growing group among Asian-Americans. In Loudoun county, near the high tech corridor surrounding Dulles International airport, the Indian population has gone up from 400 in 1990, 2300 in 2000, up to 20,000 in the 2010 census. They also make up the biggest group of Asians in Virginia.

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The growth of China's economy is likely to have a slight or no effect on growth in the US. Some estimates even show negative impact on the US if China's growth pushes up oil prices. Growth in China will come mainly from consumption spending and growth in services. This consumption spending may not not last beyond the first half of the year, according to one estimate. Even the more optimistic estimates such as Oxford Economics show the impact on global growth of growth in China of 5% to be not much more than 0.2%.

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Social unrest in France from student unions and worker unions of the SUD and CGT. The effects of the higher joblessness with unemployment moving upward from 7.9% and expected to hit 10% in 2010, is showing up in strikes and worker action in the streets as well as student union protests. Because of the way hiring practices have evolved, a 2 tier labor market has developed with overly protected permanent jobs and flexible short term contract labor. Its the jobs in flexible short term contracts that are the first to go, and as they are concentrated among the young, the joblessness among young people in France is much higher.

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Inflation is about too much money chasing too few goods or services. Paul Krugman, economic expert, says in the NYT that this inflation episode in 2021 is still he thinks transitory, as does the Fed's Jerome Powell. It is Krugman says a demand pull situation in which higher demand is  a result of the lockdowns easing and pent up consumer demand being released, just when the productive capacity of the country is affected by about 4 million fewer workers in factories and other places. The supply is crimped also by supply chain bottlenecks with covid affecting supply from countries in Asia also with fewer factories operating. Added to this is the whole logistics chain near Long Beach California moving ever so slowly because of fewer workers, and ships lined up all the way out to sea. The Fed chairman Powell thinks this is what is happening. Krugman says this reminds him of the 1946-48 episode of inflation after the war, when the disaster of war was followed by peace time 1946 and the release of pent up demand like today. At the same time in 1946 factories were still not fully operational for consumer goods after bombing in Europe and war time conversion in the US. The result too much money chasing too few goods available. In this situation Krugman says a calibrated effort that is based on new information is needed with moderate action, very small rate increases in 2022 so that inflation signals are sent out by Fed but not in a way that would disturb the long term trajectory of the economy for growth. After the pandemic has hit so many Americans so hard. Action that would preserve the long term strength and productive capacity, and technological competitiveness of America during this period of renewal. ...

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The tensions that exist in Australian society, as a result of the large Chinese investments and imports of infrastructure building commodities such as iron ore, natural gas and other commodities. Australia's Pilbara region in the northwestern part of the country, has become one huge quarry for China, as an estimated 1 million tons of iron ore raw material is loaded onto 2 story high trucks each day- with automated driverless trucks system being implemented- and shipped by 2 mile long trains to waiting ships on the coast. Australians remember this done on a smaller scale in the 1980's by Japan. At the time Japan brought in Japanese workers. The same is true today but on a bigger scale, with China bringing in workers with lower pay. The concern now is what it was then, as one local leader put it- are we going to have towns with mines or mines with towns, he asked. The mining companies are looking at it purely as a commercial venture, and not investing in the towns. The towns now fear they will find the boom times gone someday and nothing tangible to show for it, no schools, hospitals and no infrastructure. And because the mining project companies fly people in and out, the 8000 aboriginal people in Pilbara- the original people of this land- see little of the mining expansion's benefits. Wandoan, a small place with 300 homes in the outback in Queensland, in eastern Australia, is an example of the gut wrenching change taking place in the mining areas. The lives of the people from the local pharmacy, the local supermarket, and the local ranchers, depend on the mining decisions made in China. This area was part of a planned, on again off again, $6 billion coal mine -part of a A$150 billion complex of natural gas and coal projects for exports to Asia in Queensland- and involved Xstrata buying 70,000 acres of the best grazing land for 7 coal mines. With the locals selling off, the mining uncertain, the supermarket closing, the whole town has the feeling of being up in the air, and fading out someday. Australian public sentiment recognizes this feeling, and at the same time is ambivalent about the impact. Polls conducted by the Lowy Institute for International Policy, show 73% of Australians feel Chinese economic growth has a positive impact, and at the same time 57% feel that there is now excessive Chinese investment, and 46% feel China will be a military threat in 20 years. Australians remember the same feeling about Japan's investments in raw material sources in the eighties. In 1988, polls then showed 70% of Australians saying there was too much Japanese investment, even though they also recognized that Australia had benefitted. The difference now is that there are also fears of China's influence, and foreign investment guidelines limit investments in Australian mining companies to below 50%. China's investment in Australia's natural resources comes in several ways: in the year upto July 2009 A$42 billion in export demand, A$3 billion in direct investment in Australian companies, and about A$5 billion in project financing. Iron ore sales to China amount to A$22 billion each year, and about one fourth of Australia's exports went to China, growing at a rate of 31% in 2009. According to the chief economist of Austrade, the government trade organization, Australia benefits from the economic relationship with China- this adds A$3,400 per year to every Australian household. Efforts to use some of the profits made by mining corporations for infrastructure and other public purposes, by increasing the mining tax have failed; as the mining industry launched a campaign against the government of Kevin Rudd, who was removed from office by his party. In the recent national elections, the ruling Labor party lost its majority, after losses in the resource rich states of Western Australia and Queensland. In the meantime the Australian currency has become the currency used by currency speculators who cannot use the yuan to make a bet on the currency- as the yuan is pegged to the dollar- and instead use the Australian dollar as a proxy. This makes it volatile, with the Australian dollar losing 10% of its value in a single day, when pessimism increased about China's growth forecasts. It also shows how much of the good story of employment and gdp growth in Australia is tied to the story in China, and the extent of the negative impact a reversal in this area can mean for Australians; especially now that the bad debt in the post-2008 explosion of bank lending poses risks to China's banknig system. ...

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A fact check on Alice Weidel Musk interview on X. The current polls show the leading candidate for chancellor is Habeck of the Greens at 28%. Habeck is known for the work he did to get Germany through a difficult period of cutoff of energy supplies from Russia. He was Deputy Chancellor and Economy Minister in the Scholz government. Scholz is at 20% so is Weidel of AfD. Others are Merz of the Christian Democrats at 25%. Sarah Wagenknecht leads a Socialist party BSW that opposes migrants given asylum similar to the Socialist party in Denmark under PM Mette Frederiksen with 21%. The AfD has 20% support, Christian Democrats have 30%. Social Democrats 20% and Greens about 20%. 7 million immigrants entered Germany since the Merkel years in 2015. The situation in 2015 when Merkel allowed migrants to enter Germany from Austria and Hungary is remembered as a controversial decision. Merkel reversed this decision during the last years of her government. Of the 7 million only 3 million are asylum seekers applications of which some were rejected. The rest were legally allowed into the country. This included Ukrainian refugees from the war with Russia.   ...

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Saudi Arabia which was seeing GDP growth of 4% a year is slowing and should see GDP growth at 2% in 2009. Overall Saudis are in much better shape than their cousins in the United Arab Emirates like Dubai and Abu Dhabi. THis is because the Saudi banking system followed conservative practices and parked its $500 billion in foreign assets in US and European government bonds. Saudis can use these funds to increase infrastructure, education and healthcare spending by an estimated 10% this year to about $150 billion. At the samt time the Saudis will have to pull back from the $600 billion of megaprojects that were planned and will have to put more government money in projects that do go ahead. There is likely to be a hold on the projects to build a number of new cities in remote parts of the country. Some like the King Abdullah Economic City planned for the Red Sea coast may get the go ahead.