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This WSJ editorial points out that the current corruption drive in China is opaque and politically driven. Transparency International in its Corruption Perceptions Index shows China at 36 points having dropped by 20 places because of the lack of transparency in tackling corruption. Whistleblower protection should be part of an effecive drive says Transparency International. Also needed is an independent judiciary, free speech and the rule of law, institutions China has still to develop.

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GM's decision to close the NUMMI plant, a joint venture with Toyota that makes the Pontiac Vibe which is being discontinued, the Corolla, and the Tacoma truck. Its a way to reduce excess capacity for Toyota but also is a sensitive point as Toyoa has pledged to keep plants open. Toyota may decide to make the Prius at NUMMI. About 4600 workerts are employed in the San Francisco Bay area at the NUMMI plant.

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Ms. Park Geun-hye of the conservative party was elected president of S. Korea on Dec. 19, 2012. She received 51.6% of the vote compared to 48.0% for liberal candidate Moon Jae-in with about 87% of votes counted. Issues in the election included the high amount of household debt, welfare payments, high cost of student tution, and lack of jobs for new college graduates. Both candidates favor moderate policies towards N. Korea and the communist neighbor was not a factor in the election. The focus is on uncertainties about the economy and regional disparities between the southeast and southwestern provinces.

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The Dutch model for counterinsurgency which intertwines the civilian efforts with aid workers working inside the military, and military work focussing on security for the people so that economic development projects can go on, is an inspiration for the US effort. It has also reduced casualties for the Dutch. Only 19 deaths have occurred for the Dutch for 2000 personnel employed since they deployed in Uruzgan province in March 2006, where 350,000 Afghans live, according to icasualties.org. Sec of state Hillary Clinton describes this 3 D effort of defense, diplomacy, and development, as the model for her own efforts and that of the Obama administration. Dutch soldiers are ingrained in their training for this mission that their main work in Afghainstan will be economic development. The aid workers work closely with the soldiers and the commander Col. Gert-Jan Koolj says over time the focus has been on pure development. In fact diplomats from the Dutch foreigh ministry help to command the Dutch team in Uruzgan. One problem Clinton is facing is the shortage of civilian personnel to work in provincial reconstruction teams. About 500-600 more civilians are needed to complement the additional 21,000 troops that are to be added in 2009. ...

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The irony of the Afghan war is that the same pilots and planes that worked for the Soviet supported Afghan government, that the US under President Reagan supplied weapons and antiaircraft missiles to bring down, are now fighting the American war against insurgents. Antonov aircraft for transport and Mi-35 Hind helicopters, and Afghan crews that flew them are part of the airforce that the US is training and building up. The commander of Afghanistan's air corps is a formerMiG-21 pilot. By 2016 the 32 aircraft airforce is expected to grow to 120 aircraft at a total cost of $5 billion.

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BAE Systems has a $120 million contract to provide social anthropologists to the Defense Department of the USA. In December, L-3 Communications Holdings Inc. acquired International Resources Ltd, a Washington based economic-development firm which is different from its military advisory business. This is the way the Defense Department and the suppliers to the Defense department are changing in response to Defense Secretary Gates philosophy that economic development, rule of law programs and strategic communications and a whole host of soft power initiatives are essential needs, and to the new President's philosophy. Now US Defense suppliers Lockheed and Northrop are providing peacekeepers thorugh the State Department, and BAE SYstems is providing social anthropologists in addition to armored vehicles to go with US troops on village patrols. The State Department, Agency of International Development and a changing Defense Department are all getting the attention of suppliers who are building new relationships for new needs and new services tackle the issues of terrorism, poverty, drugs and crime that generate or exacerbate conflict in other countries. In the first budget presented recently Obama pledged $50 billion double the amount before for foreign assistance. A portion of the $130 billion requested for wartime operations in 2010 will be allocated to these new kinds of services which are more effective and generate better understanding and support for the US in other countries....

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Tracy Dolgin, CEO of the YES cable sports network takes a novel approach to managing by reversing the Peter Principle. The Peter Principle pointed out that people start by being good at doing what they do, every time they get promoted they manage more and do less, to the point that they are not hands on anymore and are into meetings, shuffling paper, sending too many memos, often into political interdepartmental rivalry, making them worse at their job in terms of productive effort. Dolgin's says she created a flat organization and hired people who were good at doing and with functional expertise who loved to be hands on.

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The WSJ's Joyu Wang looks at the life and political career of Taiwan's new president Lai Ching-Te. Lai has a completely different background from his mentor Tsai the DDP leader who led Taiwan for two terms. In contrast to Tsai who was from an affluent family and worked in the ministries, Lai is from a family with 6 children in northern Taiwan. His father was a coal miner who died in a work accident when he was a few months old. He studied medicine at Cheng Kung University medical school, before leaving medicine for politics at the urging of his teachers. Taiwan was in the middle of a pro democracy movement as the Koumintang party lost its grip on government in the 1980's. The DPP was in its early days and Lai was elected to the National Assembly in 1994. In 2010 he was elected mayor of Tainan. In 2014 by 72% of the vote he is reelected and 2017 the DPP's Tsai serving a first term as president brings Lai in as premier. People who know him say he shows great empathy with working people yet can be slow to change once he has made up his mind. This WSJ report says compared to Tsai Lai is less predictable as he believes in Taiwanese independence and does not hesitate to say this. He once having said he would like to walk into the White House to talk with the US president. This means he is less predictable than Tsai for both China and the US who seek to keep the relationship with Taiwan stable so that US-China business and other relations can be stable -without the distraction of a Chinese response to every move by Taiwan towards independent policies. Lai built a new science park in the city of Tainan, a new art museum and a new flood management system. ...

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The Guardian sends its reporters along with UN special envoy on poverty Australian Prof. Alston as he spends two weeks in the world's richest country looking at poverty in urban areas.  They look at some of the 55,000 homeless people in Los Angeles, homelessness exacerbated by the tech boom in California that has sent housing costs skyrocketing. LA saw homeless people increase by 25% in 2017. The safety net is not being reinforced as the Trump administration cuts many social safety net programs. Next they visit the Tenderloin district in San Francisco where homeless people can be found at St Boniface Church sleeping in the pews. As the Guardian points out the cuts to social programs disproportionately hurt people of color who make up 39% of the homeless in the U.S. This report looks at the incongruity between the tax cuts that are likely to hurt poor whites who supported the Trump administration, as well as hurt the social protections that are part of today's democracies across the western world. This is most evident when one looks at the European Union. They were put in there in Europe for a reason- fairness is good for all classes, and most of all it protects democracies. Authoritarian regimes arise out of social dislocation from wars, or from lack of social protections and ineptitude of elites. Which is why a Lincoln or a Theodore Roosevelt from the Republican party supported fairness and social protections as much as FDR and Truman from the Democratic Party. The view expressed in this report in the Guardian is that the U.S. may have moved in the wrong direction under the Reagan and Clinton administrations creating the "me first" culture that prevails in the U.S. today. ...

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The story of how Mr. Rausing of Sweden built Tetra Pak from a small Swedish packaging company. Today 500 millon Tetra Pak containers a day are sold globally, making it possible to store milk, juice for over 6 months. Mr. Rausing says he understood machinery, but not finances, and had no idea how much money he had.  Estimates run to $12 billion. In Europe Tetra Pak containers are known for storing milk, and in the U.S. for fruit juice with straws that puncture a foil seal. They are very popular in India, Latin America and Africa. Teta Pak's innovation was to devise machinery that could fill long tubes of paperboard with fluid and pinch the material into individually sealed containers, with box like shapes for easy storage. Hans Rausing studied economcs, statistics and Russian at Lund University. The Rausing brothers were patient in building up their fathers small company which was unprofitable for more than two decades. Eventually Rausing moved to Britain, to East Sussex in 1982. As a privately held company Tetra Pak was nimble and made long term bets. In 1984 it started China operations with a factory long before other companies when China was just opening up. Rausing invested in Ecolean AB in 2001.  Tetra Pak is considered one of the most important Swedish inventions of all time with a display at the British Science Museum. ...

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The fee-for-service system that is seen as the main reason for the inability to control costs. Patients don't see the costs of healthcare as long as they see companies and employers paying for their health care. About 75% of those with insurance say they are satidfied with their care even though the system encourages excessive testing and increases costs year after year.

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The Dutch had their tulip bubbble, the Chinese have their Pu-er tea bubble which has just burst. It was a pure speculative bubble with speculators cornering the market and bidding up the price of tea in Yunnan province on the Burmese border. From 1997 to 2007 the price of these green tea leaves from Yunnan- that make a fermented brew called Pu-er- wentup from $15 to $150 a pound. Actually a group of manipulative buyers drove prices up. Production doubled from 2006 to 2007 to 100,000 tons. Unlike other teas this tea is said to grow better with age and is packed into compressed cakes for transport. Now prices of this tea have collapsed to $3 a pound. Russia had its own experiment with unbridled capitalism, now China is struggling with the effects of the aftermath of its own unbridled capitalism.

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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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Raphael Minder points out one episode in the life of Emilio Botin that shows how intertwined Spain and Santander had become. During the period when Spain took EU help after the collapse of Bankia bank in 2012 there was pressure on Spain to take a full government bailout. Finance minister Guindos says it was Botin who called him at that time and told him: "You know what you have to do and I will back you up." Botin's advice to the Spanish government was to resist the pressure. Botin expanded what was a family bank based in Santander in Northern Spain, through a series of successful acquisitions. He had a rare intuitive sense for timing of acquisitions, going into Brazil around the time candidate Lula of the Workers Party was elected president, with considerable uncertainty about how financial markets would respond to the election. About a quarter of the bank's profit now comes from Brazil. Besides Brazil Santander has commercial banking presence in Britain and the U.S., taking a bank that had 20 billion euros in assets in 1998 to 1.1 trillion euros by 2013, which is about the value of Spain's GDP....

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Revival of the old city of Diriyah in Riyadh province, Saudi Arabia, where Imam Wahhab and Muhammad ibn Saud, the original chief from the Saud family have their origins. With the help of Imam Wahhab, this tribal chief united the Arabian peninsula in 1744, till the fall to the Ottomans in 1818, lasting 74 years. U.S. president Franklin Roosevelt helped set up Ibn Saud of the original Saud family, as monarch of a new Saudi state in 1932, when it was possible for the French, British and Americans to setup states in the Middle East region to protect their interests. Ibn Saud's son is the current King Salman, who plans to set up a museum complex in Diriyah, and visits the place on weekends.

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The trial of former Security Chief Zhou Yongkang is held in Tianjin, China, in secrecy. He is senteched to life in prison in June 2015. This is part of president Xi Jinping's fight against corruption in China.

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A difficult period for the monarchy in Spain after a number of scandals affected the reputation of King Juan Carlos. His son has a graduate degree in international relations from Georgetown University. He has distanced himself from the scandals, brings a youthful look at 46, aand was groomed by his parents for the job. Though Juan Carlos has seen his repuation tarnished in recent years, especially with the continuing economic hardships of high unemployment in Spain, he played a large part in Spain's transition to democracy after the Franco years. Even with such difficulties just over half of Spaniards respect the monarchy down from much higher numbers before the economic crisis, when Juan Carlos was seen as a modernizer for Spain. Because of Spain's history of Republicanism at odds with a conservative culture and the Franco years of division accompanied by great distress, the monarchy's role requires a special touch- a feeling for the needs of the people which Carlos showed in the early years, and for which Felipe was trained....

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With Toyota facing amajor crisis the company speeded up the appointment of the new CEO, the grandson of Kiichiro Toyoda, who founded the automaker as it diversified from its textile automated looms in the prewar years. Note the statement by Koji Endo, analyst of Credit Suisse in Tokyo, that he expects Toyota to lose up to three times the 1.7 billion loss of the current fiscal year ending March 31, in the next fiscal year of 2009. This suggests that a lot will be happening at Toyota as major actions to reduce capacity and to improve management, reduce bureaucracy and speedup decisionmaking are taken by the new President. Especially so as Akio Toyoda, the new CEO, is different from the tradiitonal CEO's who have come up through manufacturing and not educated in the U.S. He will not have the same patience and comfort factor with Toyota's bureaucracy as these other CEO's like Watanabe who preceded him. By pushing the transition up the other elders like Shoichiro Toyoda may want to give Akio time to prepare for the tough decisions he will have to make, and to setup his own management team as early as possible....

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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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Putin was born in St Petersburg, then called Leningrad, where his father worked in a factory making railway cars. He studied law at Leningrad State University, graduated in 1975 and went through KGB training before going to Dresden in 1985, where he remained with the KGB till 1990 and the collapse of the Berlin Wall. By 1990, the Soviet Union collapsed and from 1990 to 1996, Putin worked in St. Petersburg first as assistant and then as Deputy Mayor with Anatoly Sobchak, a law professor at Leningrad State University, and Mayor of St. Petersburg. After Sobchak narrowly lost the election, Putin left for a position in the property department in the Kremlin, joining other Sobchak associates who worked in the Kremlin. From 1996 to 1999, Putin moved up quickly in the chaotic Yeltsin years. In 1998 he was promoted to head the FSB, the successor to the KGB. And in August 1999, Yeltsin appointed Putin Prime Minister. In December 1999, Yeltsin appointed Putin acting president. Putin named Medvedev, deputy chief of staff in 2000. The five years in the St. Petersburg city administration and the years in Moscow in the Kremlin under Yeltsin were chaotic years for Russia and for Putin, as he observed first hand the lawlessness and general breakdown in Russia. This may have influenced the early Yeltsin years enthusiasm for democracy, to an appreciation of the problems for democracy in the actual environment that he was facing in Russia. He developed a distrust of the innocent enthusiasm of Americans for a wholesale transfer of American and British political institutions to the Russian environment. This was a period of great shock in Russia, as even the lifespan of Russians was declining rapidly in this period, and there was a lot of poverty. The struggles between the Mayor and the city council in St Petersburg, even as the city was facing food shortages and economic collapse, and the latter Yeltsin years may have convinced Putin of the need to combine democratic society and elections with a strong central administration, with authority concentrated in a Presidential system and not a parliamentary democracy. In bringing central direction he brought in his KGB connections, but in choosing his successor he turned to a law student at Leningrad State University of Sobchak's, who is quite different from Putin's KGB associates. Medvedev is a softspoken thoughtful administrator and intellectual compared to Putin, and his experience covers the 10 years both Putin and Medvedev spent together both in St. Petersburg and Moscow in 1990-2000, and the period from 2000 to the present day- when Medvedev served both as Putin's head of staff and as head of Gazprom. See the link to the St Petersburg Times, November 6, 2007 on Medvedev. From his St. Petersburg days Putin clearly understood the need for foreign investment and the need to create a climate for attracting foreign investment. This seems to be happening as Russia draws more foreign investment for industry and infrastructure. His background with the KGB shows up in the centralization of authority in the light of the chaotic years and economic collapse preceding it. And his days as part of Sobchak's efforts to bring democracy to St Petersburg shows up in his continuing respect for democratic elections and the Russian constitution. One compromise was made in the process- a consolidation of the media so that opposition's access to the media may not be what it could be, and at the same time it does reflect the tide of popular opinion in Russia that credits the economic recovery and progress and optimism for the future to the Putin administration. ...