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A report from the U.S. Federal Reserve on the impact of the financial crisis of 2008-2009 on the wealth of American households. Between 2007 and 2010 says the report the median net worth of American families went down by 39%, from $126,400 in 2007 to $77,300 in 2010. This had the result of putting Americans back to the level of net worth in 1992. Much of the loss in net worth was from asset value reductions. The median value of stock market based retirement accounts decreased by 7% to $44,000. The biggest drop was in housing values- falling by 42% to $55,000 in the three years. Americans are working down their debt- a quarter of families are debt free, credit card balances declined 16% to $2600 from $3100 from the period 2007 to 2010 of the report. Yet the median level of family debt remains the same as more families support their kids education by taking out college loans. Median income fell about 8% to $45,800 in 2010, with income losses especially large in the manufacturing industries as the U.S. manufacturing sector worked to improve competitiveness. Other factors supplement this picture. The burden of college loans increased to over $1 trillion for middle and working class families. With the burden of college debt young people were more likely to delay buying first homes, indefinitely dealying recovery in the housing market. Seniors on retirement see interest income from savings negligible with low interest rates and higher risk in a volatile stock market. ...

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This article in the NYT explains why the loss of jobs particularly in the auto industry to Mexico, with the experience of NAFTA passed by president Bill Clinton, has caused widespread opposition to the TPP trade agreement proposed by president Obama. Both Hillary Clinton and Donald Trump in 2016 oppose the TPP.

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Matthew Slaughter of the Tuck School, Dartmouth, says that the principle of comparitive advantage should determine what America exports and imports. Under comparitive advantage each country concentrates its energies on the particular goods and services that it does better than other countries. Free trade operates under the idea of comparitive advantage, but in practice it is quite different than its textbook economic counterpart. It is constantly changing as new countries or industries in different countries try to upset the existing pattern. Under a textbook example Airbus should not exist because Boeing was the most efficient manufacturer upto that time, and new entrants in a industry are nurtured for years with support from the governments of their countries. And in some situations the governments may exclude certain companies or industries from support such as Komatsu and construction equipment in postwar Japan, and Infosys and software outsourcing in India, and still survive and grow. Under comparitive advantage Japan should still be importing construction equipment from Caterpillar in the US, and there would be no serious competition in that industry. This would work to the detriment of the principle of competition in free trade which is just as important to free trade as the idea of comparitive advantage, with new entrants in an industry upsetting the old way of doing things and creating price/quality improvements. Slaughter simply pulls back off the shelf the old idea of comparitive advantage without seriously considering its real life aspects. Without dealing with trade distortion from currency manipulation, from the impact on jobs, without considering the continuing critical role of manufacturing in developed economies to provide the standards of living for a large middle class, and creating the kind of society that people of developed countries aspire to. He mentions GE's Immelt and the President's Council on Jobs, but makes no effort to engage Immelt 's statement in his recent op-ed article in the Washington Post, that the concept of transitioning from a export-oriented economic powerhouse to a services led consumption based economy could be done without loss of jobs, prosperity and prestige, was fundamentally wrong. He has only one line for manufacturing's role in America's economy. This line says knowledge intensive industries such as education and software are just as important as manufacturing, but fails to mention that manufacturing has received less attention in recent decades. In so doing he is discounting his own profession of concern for the high rate of joblessness in the U.S., and the need for a new focus on manufacturing in the U.S. to reverse that trend. By saying that imports are not a sign of failure but can raise standards of living, and leaving it at that, Slaughter does not acknowledge that consumer debt that US consumers have taken on in the process certainly affects future prospects for the US economy. And he makes no mention of the need for rebalancing the world economy, which is exactly how free trade should work ideally. Countries that have high imports export more to rebalance the world trading system, as currency valuations are allowed to adjust makig their exports more attractive. By not taking into account the realities of free trade, and the need for practical measures to rebalance without policy induced distortions by state run economies, Slaughter ignores the idea of free trade that works as it should and for all countries. The irony is that Immelt's own committment to jobs and competitiveness has been questioned in online blogs and most recently by an editorial in the Wall Street Journal on January 26, 2011, titled "The Misallocators." That editorial refers to the outsize role of GE Capital in GE's earnings during the past decade, and the lack of credibility of a focus on competitiveness and jobs that this creates for GE. It mentions the loss of 34,000 GE jobs in the US during the last decade. ...

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Efforts by China's Environment Ministry to control environmental damage after three decades of growth. The ability to control local officials who put growth above any environmental considerations is a key part of the struggle to minimize the damage to China's environment. Local officials are now evaluated by how well they do on environmental protection goals in addition to other goals. Promotions can be blocked by the environment ministry for officials who do poorly on environmental compliance. Vice minister Li Ganjie says the shift of dirty industries from cities to rural areas is leaving the countryside more polluted.

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Government data show that the German GDP declined by 0.5% in the thrid quarter after declining 0.4% in the second quarter. IMF predicts GDP decline of 0.8% in 2009. Germany's recession look like the worst in Europe except for the UK which has many of the same problems as the US economy. Germany's housing market has seen prices grow by almost zero in the last 10 years and German consumers are not in debt so Germany felt fairly immune to the troubles facing the US and the UK and Spain. But Germany is a big exporter and it has become more dependent on exports in the last 10 years. Exports account for 41% of GDP and CHina sucked up alot of machinery exports from Germany and China is in the midst of a drastic slowdown. In fact for the first time China is seeing a decline in monthly electricity output. And China's GDP growth rate may go from 12% to the range of somewhere around 6% in 2009, considering that Chinese export factories are closing down as the USA its main export market is seeing a rapid slowdown. Its already reached 9% and the slowdown is just beginning as the US market is also at the beginning of its slowdown. As the US market declines further in 2009 China's export factories will face a further decline in orders. Comparing the US at 10%, Japan at 20% and Germany at 41% of GDP one can see how heavily dependent the Germans have become on exports, especially with Asia's booming economies sucking up German exports. New orders for German goods declined by 18% from their peak in November 2007. And this is just the beginnning. So German unemployment is expected to increase. Its true that German banks invested heavily in mortgage related securities and other risky assets abroad, and the international financial crisis has led to a bailout fund of 500 billion euros setup by the German government. But Bundesbank figures show that what is causing the drastic contraction is the drop in investment spending as loan demand has dropped. ...

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Dunne and Nawaz say the situation in Egypt is developing into something similiar to Pakistan where the military has special privileges and controls what happens in the country even when democratic governments are elected. Dunne and Nawaz are directors of the Middle East and South Asia centers at The Atlantic Council. They say that the U.S. government should suspend military assistance if the conditions are not met for the clear leadership of the elected government and for democratic processes to work.

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Raising the minimum wage to $10.10 an hour would help 16.5 million U.S. workers improve wages at a time when 45 million workers are below the poverty line in 2016, according to the Congressional Budget Office (CBO) projections. Most of the low wage workers are in retail and fast food industries. The total number of workers in 2016 the higher minimum wage pulls out of poverty in 2016 are 900,000. About 500,000 fewer workers would be hired because of the higher wage.

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Americans are using diesel in only about 3% of cars. Diesel is now available at many pump stations. About 50% of cars in Europe run on diesel, cleaner better diesel engines are now made by the Germans, and new diesel models are being introduced in the USA by foreign automakers. This could lead to a jump in the use of diesel in the USA. Diesel may be 15-20 cents more expensive per gallon than gasoline but gives much better mileage

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A lunar eclipse that begins on Tuesday October 8 at 12.02 Pacific Time and a total eclipse at 2.16 am. The bright red moon lighting up the night sky a sight to behold.

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Wuhan has announced  only 3 new confirmed cases since March 18. Restrictions on travel were lifted after a 77 day lockdown on the city, allowing inbound and outbound travel. Some restrictions on housing complexes have been tightened after reports of dozens of asymptomatic cases. The number of asymptomatic cases remains unknown. There is a fear of a second outbreak and authorites are staying vigilant, as it is feared that the first outbreak was worse than previously thought. Epidemiologists, intelligence agencies, and health experts believe the number of cases reported in Wuhan and China are undercounted. This could be they say a result of local officials wanting to present a better picture, of not enough testing in the early stages, not counting people who died at home, and including people who died of pneumonia under pneumonia instead of coronavirus. Dr Birx, head of the U.S. response effort,  says the U.S. lists people who died of pneumonia in New York as coronavirus deaths because of how widespread it is there, hitting seven people in a thousand. In addition there is a problem for all countries in counting people without symptoms. No one even knows how big that is, and Dr Birx in the U.S. says it is important to find out. ...

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The countries of Central and Eastern Europe are building closer relations with Taiwan. Central European and Eastern European countries trade less with China and see close relations with the US as essential for their security. This includes Poland, Slovakia, Lithuania, Czech Republic. Taiwan is increasing investments in Eastern Europe after investments by China failed to materialize in the last decade. Taiwan foreign minister is now on a visit to Slovakia and the Czech republic. For many Eastern Europeans the dominance of China brings back memories of the dominance of Soviet Union and the Cold War.  Taiwan says it is looking to deepen ties in the industrial, scientific and green energy fields with the region. Eastern Europe's perception of China has changed in the last three years as shared values of rule of law, democracy, and human rights with the rest of the world and the US are seen as important for the region.  Western Europe with France and Germany is also gradually moving away from its close dependence on trade with China. The French Senate is leading an effort to build closer ties with India by hosting Ambition India 2021 starting on October 29. Germany under Scholz of SPD and Baerbock of the Greens is moving away from the Merkel CDU era of close dependence on China in trade. ...

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Mario Draghi, former head of the European Central Bank, who ran ECB policy to rescue the Euro currency in 2012 is being asked to form a new government by the president. Mr. Conte's coalition failed to get the support of Matteo Renzi's left party in parliament leading to its collapse.  Italians are wary of the austerity policies of Mario Monti,  professor and EU bureaucrat appointed by premier Berlusconi to the EU Commission, who was appointed  during the eurozone financial crisis in November 2011 by the president.  At the time prime minister Berlusconi had lost the confidence of EU officials. Mario Draghi has a different history after his work at the European Central Bank counteracting the austerity approach of German finance ministry. He also steered the ECB policy at a difficult time for Italy with rising interest on debt. Today Italy has lost about 89,000 lives, and 8.8% of GDP was lost in 2020. Moderate factions of all parties right and left wing are expected to support Draghi. Draghi also has the advantage of 200 billion in euro funds coming from the EU for Italy's recovery in 2021. Germany today is not the austerity policy Germany of 2011, as it supports going big and spending for the recovery. ...

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In January 2020 employees met at a local Maryland bar to find out how they might salvage their careers in a 33 year old company that had failed to develop an approved vaccine, says this story in WSJ. Only months later following the coronavirus pandemic everything changed as in a miracle for Novavax. The company had to sell manufacturing assets at one point, and had enough cash for another 6 months just months before. By Feb. 2021 shares which had dropped to $4 were up to $229 and valuation which had declined to $127 million went up to 15 billion. Coronavirus has turned things upside down where newcomers are using previously unproven technologies and making them work in this pandemic. The persistence, perseverance and confidence of Novavax even in the most difficult situations shows how the right attitude can lead to remarkable results. Novavax vaccine can be kept in refrigerators for 3 months, and do not require very low freezing temperatures like Moderna and Pfizer vaccines. This is considered a potent weapon in the fight against coronavirus. Novavax says it can produce a couple of billion doses over the next 12 months beginning in April. Novavax has released data showing its vaccine is effective for protection against coronavirus. Results of late stage US trials are expected in March. ...

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Carrie Lam, the chief executive of Hong Kong, who has struggled through the crisis triggered by the extradition bill she introduced has decided to finally withdraw it. Protests have gone beyond the issue of the extradition bill as Lam herself agrees. She pointed out in her video message that the protests are about housing, land supply, income distribution, social justice, mobility, and many social, economic issues in addition to political ones. Protestors have five demands and the freeing of all those arrested is not something Lam has agreed to. Lam says some protestors violated the rule of law. Protest leaders including Joshua Wong, see the withdrawing of the extradition bill as poor timing. Hong Kong has seen 13 weeks of protests and the pictures are all over the world showing how much the issues and the the lack of responsiveness of Carrie Lam has resulted in this standoff.  Lam would like to replace the confrontations with police "with conversations." Why she took so long to meet or seek meetings and conversations is not fully understood and will be discussed for a long time. This brought China to the brink of a crisis that would have repercussions including on trade issues, when it needed to be handled in a better way. ...

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Walker of the WSJ describes how the new issues of immigration and identity are changing the way people vote in European Union countries. In the Dutch election there were other surprises. The Dutch Labor Party which won 25% of the vote in the 2012 elections fared badly and got only 6% of the vote. Much of this vote was picked up by antipopulist parties such as the Greens. Mr. Rutte, the prime minister under the current government, and his party centre right VVD won 21% of the vote. Social Democrats and Labor parties in Netherlands, France and Britain are doing badly, and even Martin Schulz's SPD's higher popularity is said to be reaching a peak and may not last till September, says Walker. Labor Party in Netherlands failed because of its participation as a junior party in a centre right government following austerity policies, say analysts. Overall as shown in Netherlands the tensions and loss of credibility of social democrats is playing out differently in each country. The Netherlands election shows that there is also an anti-populist shift that moves some of the vote from social democrats to parties such as Greens, or other parties or movements that have gained credibility as the social democrats faded.  ...

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President Trump's focus in the State of the Union message in 2020 in the U.S. Congress was on what he had done for U.S. prestige and perception- "In three short years, we have shattered the mentality of American decline and we have rejected the downsizing of America's destiny. We have totally rejected the downsizing." "We are moving forward at a pace that was unimaginable just a short time ago, and we are never going back." The theme of the speech- "The Great American Comeback." No longer were other nations be allowed to take advantage of America, American interests would come first, and this also meant blue collar working families and middle class. Trade deals with Mexico and Canada, trade deal with China, reversing of the trade deficit, bringing back about 12,000 of the 60,000 thousand factories lost over two administrations Democratic and Republican of the last 16 years with many more factories in the pipeline, increasing jobs and incomes in an unprecedented way, were all the focus of the speech. The president basically sidestepped the impeachment for Ukraine policy and implementation, and focussed on the optimism from reversing American decline in trade, jobs, and manufacturing under past Republican and Democratic administrations.   ...

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The May 6 episode of the stock market plunge of 900 points in the U.S. and then recovering had the effect of rattling investors nerves especially retirees. The impact of this episode is recorded in the experience of one Charles Schwab broker office in Englewood, Colorado. By the end of that day this broker had 50 calls on his answering machine from a fifth of his clients, all seeking to know what happened. Charles Schwab, who helped launch a period of individual investing in the U.S. after 1982 by cutting fees and going after the average investor, (along with others like Jack Bogle of Vanguard Funds), is also on edge. He says he has not seen anything like this since his early days. Schwab confirms Yale Prof. Shiller who says (see link) that his index for markets shows a lot of nervousness. Saying that 98% of people are still very concerned, coming after the May 6 incident, and the Greece and eurozone crisis that impacted US stock markets. One other factor he points out is the constant flow of headlines that suggest certain business people engaged in fradulent practices, something that fuels a lack of trust. Charles Schwab ponders from his office across the San Francisco Bay Bridge, whether words like safety and soundness mean anything anymore. Another factor of concern, Bogle points out, is that institutional investors now own 70% of American corporations, up from 35% in 1975. And the advantage has veered sharply in their direction as institutions, hedge funds, and investment banks trade on their own account, with wealth moving in that direction. This leaves the individual investor and especially the retiree or those about to retire in a severe predicament....

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One in six dollars generated by the U.S. economy goes to pay for health care, almost twice the average for rich countries. It hurts America in many ways; by being a burden on the taxpayer when it comes to Medicare and Medicaid paying for the poor and the elderly, on companies being one reason GM went bankrupt, it eats up federal and state budgets, rising costs make any form of future coverage for all unsustainable, and it robs other priorities such as infrastructure building and other national scale investments. The Economist says that if it had to design a system from scratch, it would go for a system based mostly around publicly funded health care. For the uninsured the solution of an employer mandate is now well accepted, so this is not an issue. What is an issue is how to make the new system affordable? Here the Economist says that whether in stages or in one move, the tax deductability of employer paid health insurance, which is costing the U.S. government $250 billion ayear, has to go. It is necessary to remove this deduction, and its something all interests involved will have to swallow, as other savings are smaller and will not be adequate. The deductability of insurance makes the true cost of insurance transparent, so it supports gold plated insurance. This does not make cost control the pressing priority it needs to be. So the deducatability of employer paid health insurance hurts both ways. The other necessary action is in the area of moving out of the current culture where most doctors work on a fee-for-service basis, where the more tests they prescribe or procedures they perform the greater their incomes. This acts as a perverse incentive, and has aruinous effect in mushrooming health care costs in America. Cutting back on unnecessary tests and procedures, and prescriptions , would save 10% to 30% of health costs says the Economist. And it says this has been proven with the Mayo Clinic in Minnesota and Kaiser Permanente in California showing that cutting back doesn't hurt care and outcomes., so much so that cutting back would occur along with improved outcomes. But Americans with employer paid insurance just take things for granted as its not much out of pocket expense for them. THis creates the lack of a force for controlling costs even as employers are shouldering abigger and bigger burden, and the employee who thinks he is doing fine actually is seeing more of his salary dollars going to pay for his health insurance. In a way the consumers of health care are stuck with the perception that they are not somehow paying for these mushrooming costs and too manytests, procedures and prescriptions. This perception leads them a false sense of comfort with the system they are in, and a fear of something new fanned by the medical lobbies, that any change will impact users negatively. This makes the whole discussion on health care or the process of finding solutions to become an exericize in which terms like "rationing" and "choice" play a distorting role. ...

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Apple reports a slowdown in iPhone sales, with a less than 1 percent in increase in sales, for fiscal first quarter ending Dec. 26, 2015, over the prior year quarter. Revenue is expected to decline by 11% for the quarter ending in March 2016, over the prior year, first such decline in 13 years. Analysts say Apple will have to reduce gross margins of about 40% to increase sales. Apple CFO Maestri says Apple increased prices in some markets because of the strong dollar. When the stronger dollar is excluded from results for the quarter ending Dec. 26, 2015, sales revenue increased by 8% over prior year quarter, according to Apple. As Apple slows down its shares financial performance is stalled at about $100. Apple tried to present a different picture now that China sales are slowing down- it said that users had "engaged" with 1 billion Apple devices whether iPhone, iPad, Mac, or Apple TV, in the last 90 days, by downloading an app, song or movie. These services geneated $5.5 billion in revenues for the quarter ending in December, a 15% increase over prior year quarter....

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USC Justices Roberts, Gorsuch and Coney Barrett questioning Solicitor General Sauer, and lawyer for the small business Katyal, on Tariffs by the US president DJT in November 2025. Coney Barrett says the whole thing is a big mess. Treasury Secretary Bessent who watched the proceedings in the Court benches says the issue of fentanyl is one of the reasons for tariffs on China which has played a uncooperative role on this issue of fentanyl sourced by drug trafficking gangs on America's borders. Bessent saying that it is a policy tool when unfriendly powers seek to hurt America. DJT says a SCOTUS ruling against the Tariffs would reduce America to Third World status. Most American themselves are being told by the media interests that the issue of young Americans dying from fentanyl is an issue like many others not that it is the heart of the issue that more Americans have died from fentanyl than the youth of America who died in the Korean, Vietnam and First World Wars combined. The wine import company with 19 employees whose lawyer Katyal filed a petition to SCOTUS is a tiny part of the people harmed by tariffs. It could easily be compensated from the tariffs revenue of $500 billion in 2025-2026 as could other businesses. How does the SCOTUS decide what policy the US is to use. With recalcitrant Asian nations Japan and China the only way is years of negotiations that lead nowhere on world trade. Is SCOTUS responsible or Congress to the American people when the supply chain disruptions caused by concentration of the supply chain in China led to huge price increases making life unaffordable for the low income earners,  including cost of automobiles? Large companies acting on the DJT signals are reducing this concentration in China actively, the trade deficit is coming down, the tariffs revenue is a fund to offset the cost to Americans mostly smaller businesses as large businesses increased their margins in 2022-2024 pricing moves so that today only about 30% of the tariff cost is borne by the average Americans, the rest by large businesses and some of it by exporters in China and Japan. ...