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Most Americans pay less in taxes, including state, local and federal taxes, today than in 1980 in inflation adjusted dollars. The taxes have gone down by 2-3% for incomes in the range of $50,000 to $150,000, and gone down by 3-4% for incomes between $150,000 and $350,000. Taxes have gone down over 7% for incomes above $350,000. The main reason is the decline in federal income taxes.Tax rates increased in the period to 1990 and declined from 1990 to 2010. The Democratic party and president Obama are pushing for increase in taxes for incomes above $250,000. Republicans are resisting the changes citing disincentives to investment and growth for small business which generates a large proportion of new jobs created in the U.S. economy. The New York Times study shows the percent of the U.S. population that makes between $200,000 and $350,000 almost doubling in the period 1980-2010 and at the same time its share of the U.S. income remaining the same - many small business owners who hire employees would fall into this income category. Republican's response is for tax reforms that reduce loopholes, deductions and other tax expeditures that disproportionately help the wealthy. Democrats say this cannot create enough revenues to address the deficit, when mortgage deductions, charitable deductions are excluded. The back and forth is leading to stalemate but also opening up discussion for the first time on whether the mortgage and charitable deductions make sense in today's environment. A significant portion of revenues lost in the mortgage deduction goes to affluent households, subsidizing larger borrowings to build larger homes than otherwise, according to the Brookings Institution. Politicians have resisted changes that would go against powerful lobyying groups in the past, yet the impasse has opened up new thinking outside the box because of the pressing need to come up with a solution....

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Alan Meltzer would like to see the Fed reverse its quantitative easing, and lower excess reserves gradually starting now. By this he hopes to see the Fed avoid the mistake of making a big shift from excessive ease to severe contraction further down the road. He also warns agains excessive deficit spending. He says a weak economy is not the time to cut spending or raise taxes, and he is not talking of draconian immediate steps. He would like to see a multiyear program to increase fiscal probity and reduce deficits size and frequency. As it stands now he takes both parties to task for lack of fiscal discipline and honest accounting. About $1 trillion in deficits each year on average for next 10 years is in the works, and is an underestimate because the savings of $200-$300 billion in medicare spending have still to be realized, and states do not have funds for increased Medicaid spending, and payments to doctors have still to go down by 25%. Chinese government purchases of half our debt will postpone the day of reckoning says Meltzer, but far better for us to strike at the problem now, before we blow a hole in the dollar and start a downturn. See the separate report on the shrinking UK economy....

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This WSJ editorial is critical of the 2015 apology of Japanese prime minister Abe on the 70th annivesary of the end of World War II. It says the use of the word "owabi" as was done by previous premiers Murayama in 1995 and Koizumi in 2005 was important for its neighbors and the U.S., yet the apology falls short of a full acceptance of the message of that period. Mr Abe's reference to the fact that 80% of the people today were not alive when the war crimes took place does not make it any less important for Japan to face recent history in a responsible way, says the Journal. Mr. Abe's reference to the view that Japan acted in this way after western powers isolated it and that Japan's empire building helped overthrow western colonialism, says the editorial is a misrepresentation of the facts of history, because Japanese colonialism and ideas of racial superiority were spread throughout Asia. Abe's apology stands in contrast with the apology offered by Emperor Akihito which expressed "deep remorse"...

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Ajami points out the risks of the deal secularists and liberals in Egypt have made in calling on the military to upset the elected government of prime minister Morsi. The liberals and the Muslim Brotherhood were both equally opposed to the military and police intervention in politics in the period following Mubarak's ouster. The six decade rule of the military in Egypt has little to show for it in the modernization of Egypt and improving economic conditions. Egypt has seen this script before, says Ajami of the Hoover Institution- in 1952 the military stepped in after corruption in the political parties and political violence. The results were dismal extending throughout the period of modernization in Asia and Latin America. It has left Egypt frightfully behind in most dimensions of education, healthcare, and technological progess. The lack of training in parliamentary and democratic governance, and in the institutions of democracy are painfully evident- the poor roadmap for democracy laid out by the military, followed by the election, the decrees and authoritarian style critics describe of prime minister Morsi in failing to incorporate liberal opinion in policy, and the flawed secularist calls for the military to overturn the elected government with only one year in office. These institutions will take a long time to build and require patience, flexibility and the gift of wisdom on all sides....

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Britain's prime minister survives a vote in parliament called by the camp in her part that opposes a hard Brexit that calls for Britain severing connections with the EU. After she caved in to some demands from the camp that supports a hard Brexit on the issue of EU customs union, others with different views in her party called for a vote in parliament through an amendment. Theresa May survived this vote by just 6 votes following a vote a few days before called by the Brexit hard liner camp in her party which she survived. Britain's electoral Commission ruled that the Vote Leave campaign had violated the law by exceeding the spending limit of 7 million pounds by funnelling 675,000 pounds to BeLeave a pro Brexit youth group. There is now no certainty that a Brexit deal can make it through parliament if it is reached with the EU. A fresh election, or a second referendum on Brexit or terms of Brexit are likely if May's government collapses in 2018.  ...

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Historian David Kennedy points out that Franklin D. Roosevelt was a fiscal conservative. On Social Security which FDR signed into law in 1935, he insisted that it be self-supporting, saying "no dole." Deficits of the "New Deal" Roosevelt would say were a result of the "emergency budgets." Only in 2 of the New Deal Years 1934 and 1936 did the federal deficit as a percentage of Gross National Product exceed the 4.6% of Herbert Hoover's last year in office. The 1936 absolute deficit of $4.4 billion or 5.3% of GNP was largely because of the $2 billion Bonus Bill passed by Congress over Roosevelt's veto, which awarded the money to World War 1 veterans.

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After the huge crisis the debate about capitalism. What went wrong, and importantly what did not go wrong. Not in the sense of more punditry to place the blame but to ask questions to have a better grasp of the fact and better understanding of the twists and turns of the last decade, the complexities, the frailties, the errors of judgement, and the failings, and the outright falsehoods and ethical breaks. So that the good things are not lost for instance the individual initiative and the bad things are corrected and measures put in place to prevent recurrence and minimize damage. Has the model of anglo-saxon capitalism failed? Actually some specific things failed, deregulation at a time when banks and markets were behaving irresponsibly and without any restraint internal or external, credit ratings agencies failed, financial institutions failed in performing their first line of business which is to finance investment in the economy not in housing and mortgages, and American consumerism failed in that value of saving disappeared and abundance of debt brought American savings to zero, leaving little for investment in the economy and infrastructure except by borrowing from other countries. And living on illusions and not on sound basics the leadership failed thinking that free enterprise and technology and productivity improvements somehow allowed a country or group of countries to live way beyond their means, and a tendency to excess in the popular mood of the country, excesssive consumption, excessive and profligate use of energy which sent trillions of dollars overseas over decades, and excessive expectations of the lower classes for housing and goods beyond their means, all played a part. What did not fail is the freedom to trade, the fall of "barriers to intercourse" between nations, that produced gains on a big scale so that computer and cell phone technology developed in one part of the world quickly spread around the world and the innovations and technology developed in one country spread producing benefits all over the world. It created amood of optimism in developing countries whose incomes rose especially where countries encouraged growth as in China, India, Russia, Brazil, Eastern Europe and pulled hundreds of millons out of poverty. With China, America and Germany in effect shipped technology goods in return for lower value added goods like textiles and shoes, to help China industrialize, and American consumption played a useful part until things reached an extreme and the system was abused by forgetting the basics and allowing excesses and failing to respect ethical responsibilities. Regarding regulation excessive regulation and red tape has proved to be bad as in the license Raj in India which stifled private initiative and new enterprise till it was abandoned in 1990, and no one in India is calling for more regulation. What is bad is to abandon good common sense and to rely on the illusion that no regulation is needed to run a complex financial system like we have today, a laissez fairre libertarian philosophy that was rampant in the Bush administration and in the country's leadership in the Bush years. As a result an underfunded SEC failed to deliver on its basic mission and responsibility, and the lack of a centralized regulatory authority with powers and funding to meet the challenges of modern finance as for instance ineffective derivative regulation under the CFTC, simply aggravated things further. ...

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An official report after a 7 year survey finds 19.4% of arable land in China is polluted. The pollution comes for the most part from inorganic materials such as heavy metals cadmium, nickel which are byproducts of mining. Pollution is severe in the Pearl River Delta in the south, in Yangtze River Delta in the east, and in older industrial zones in the north east. Earlier efforts to get this data were stymied by some officials calling it a state secret about the time of the discovery of cadmium contaminated rice in Hunan province. China's 334 million acres of arable land, according to the most recent land survey at the end of 2012, is only 37 million acres above the minimum considered necessary to feed the large population, making this a major issue for China.

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The calls for major changes in education and healthcare in a rebellious voter environment in 2016 by Bernie Sanders, represents a struggle for the soul of the Democratic Party between Sanders and Hillary Clinton's more incremental approach. The huge support from younger Americans for Sanders makes this a struggle for the soul of the party after the Obama years. Clinton's message is tempered with a realization that some of the changes in income disparities are a result of technological change and globalization, which does not resonate as well as the Sanders message that this is a result of rules being turned to their advantage by privileged groups. A similiar appeal on the right by Cruz says influential lobbies are writing the rules to their advantage, while also appealing to marginalized Americans, and struggles for the soul of the Republican party against the establishment politicians, governors such as Bush, Christie and Kasich, who have done poorly in Iowa.

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Charges of embezzlement filed against democracy activist Alexei Navalnyi by the government of President Putin. This is part of a government crackdown on activists in Russia.

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The new head of Roche, Severin Schwan, sees a huge opportunity in the current state of pharmaceuticals. He says drugmaking is still "so crude," because half of all known diseases cannot be treated at all, and the drugs for the diseases that are being treated don't work as well as they should and with a lot of side effects that make serious drawbacks in using them. He compares this state of affairs to acar that starts only half of the time and has brakes that don't always work. What gets hime excited is the rapid advances in diagnostics, genomics and biotechnology that can bring a"brand new revolution" in personalized medicine. He is pushing forward in the areas of biotechnology with the $47 billion deal that integrates Genentech into Roche, and in molecular diagnostics with the integration of 454 Life Sciences and Ventana. Doubts were raised during the integration of Genentech into Roche about whether the research climate at Genentech could be preserved and whether research scinetists would leave. But most have stayed. With the resources of a larger company behind Genentech and the patient approach that a firm with a founding family controlling the firm can take under a leadership determined to invest in research, experts like Tim Anderson of Bernstein Research see Roche well positioned to grow by aquarter over the next five years....

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The huge risks the misallocated stimulus capital from real estate speculation poses for the Chinese economy. China's government rapidly expanded lending after the 2008 global financial crisis. One estimate is that about 10 trillion yuan in new loans were made in 2009, over twice the amount of 2008, expanding the loan portfolio and money supply by one third. A major problem is vacant homes as Chinese put their money in second homes as an investment. Chinese are not investing in the stock market because of the volatility, and with the low yields in bonds and banks money is going into real estate. According to a Morgan Stanley economist, about 25-30% of private commercial and housing space is vacant. This happens just as middle class Chinese are being priced out of the housing market. Prices went up by 12% in the housing market this year according to the China National Bureau of Statistics. Couples wanting to leave their parent's homes find it difficult to do so. It was the topic for a Chinese TV series "Dwelling Narrowness." ...

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How the Bush presidency started with hopes in domestic policy that were never to come to fruition. Jacob Weisberg, editor of Slate, reflects on the promise of the Bush State of the Union address of Feb. 2001, and the compassionate conservatism it evoked- the Bush priorities of education, setting higher educaion standards, immigration reform, helping needy and at risk children, health care access. He recalls the words used by Bush in Spanish: "Juntos podemos," we can do it together. As governor of Texas Bush had focussed on racial disparities and gaps in education, winning 27% of black votes and a third of Hispanic votes. Then came 9/11 (2002), weapons of mass destruction (from 2003 onwards), which soon overshadowed the education efforts, grants to extend health insurance coverage, initiative to encourage mentring of at-risk children. The $10 billion program to fight AIDS in Africa and the Caribbean is a part of the Bush legacy, other areas were overcome by the distraction of wars in the Middle East....

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Athenahealth, a provider of software for physicians, is intervewed by Jon Kamp about the efforts to promote digitization in physician's offices.

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Italy's bond auction of three year debt showed lower borrowing costs and strong demand from domestic investors, even as Moody's downgraded Italy by two notches on July 12, 2012. Italy's Treasury sold 3.5 billion euros of July 2015 BTP, having 6.06 billion euros worth of bids. The interest rate of 4.65% was below the 5.3% paid in mid June. Interest rates were overall slightly higher on 1.75 billion euros of longer dated benchmark bonds. Barclay's described the Moody's move as "somewhat perplexing," conisdering the steps taken at the June 2012 summit of EU leaders, at least moving in the right direction. Italy's Treasury cancelled the Aug. 14 BTP auction, because of improvements in the budget situation.

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France's CFDT trade union says both Sarkozy and Hollande have shown agreement with a plan for workers to show flexibility in wages and benefits in return for preserving jobs. This comes at a time when France's trade deficit is widening. It was 69.6 billon euros in 2011. Hourly labor costs in France are 34.20 euros, 14% higher than in Germany, where similiar wage restraint was shown by the unions during the last decade to reduce high unemployment. It is 20% higher than the euro-zone average, according to Eurostat. Now France is looking to adopt some aspects of the German model to improve competitiveness and reduce unemployment.

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Mr. Kasowitz  is hired by U.S. president Trump as his personal attorney on the Russia probe by Congress of ties between the Trump campaign and Russia. Kasowitz  has worked with Trump for 15 years helping keep his divorce records sealed, and in lawsuits. He is known as an aggressive litigator with his own firm of 270 attorneys- Kasowitz, Benson Torres LLP. This follows the appointment of Special Counsel Mueller to investigate Russian interference in the U.S. election with wide ranging powers. This report says Senator Joe Lieberman who is being considered for the post of new FBI chief works at this law firm, creating a potential conflict of interest situation.

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The Spanish government said it will inject 19 billion euros into Bankia SA.

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The German approach to soccer with fans running the sport is seen with envy in Britain, Italy and Spain, now that the Super League plan to split off the richer well known teams into a Super League has failed miserably. It did not last 48 hours before the organizers, a Liverpool billionaire and others apologized. Fans were angry that the clubs built into their local communities in London, Manchester and other British cities were being taken away from them. Noteworthy is that German teams and French teams at the top of world soccer never joined in the Super League plan. In fact Borussia Dortmund made a vigorous protest. Bayern Munich stayed out, so did Paris St Germain. Klopp and Guardiola were the first to protest. In this report Uli Hesse of The Guardian tells us why German clubs are rooted in their communities. German clubs started as amateur clubs run by volunteers and remained that way till some professionalism was brought in by 1963. The communities and fans are very much a part of German clubs, which are not seen as part of the larger entertainment industry as in the US and Britain. The clubs are still run as part of the communities and fans in the local area. There are some Austrian entrepreneurs, but owned by locals and fans, and nothing like what is happening in the British or American approach to soccer. Most of the clubs were set up in Germany to support multiple sports in their communities. So that track and field was part of Dortmund, and chess was part of Bayern Munich Club sports. After the disaster with the fans British prime minister Boris Johnson has called for a review, and this includes bringing back the original spirit of the sport as community based and owned by fans or the local community, not business interests and billionaires from outside. ...

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Karishma Vaswani of the BBC points out that the Trump administration tariffs and the response from China with tariffs of its own, are not the beginning of a trade war but negotiating tactics of both sides. Behind the scenes and behind the declarations and position statements both sides are talking to each other and considering the options open to each. The U.S. position is that China has emerged with a bigger share of the global economy by dumping products, subsidizing its industries from solar panels to high tech ventures, and stealing American technology by forcing U.S. firms into joint ventures that increase pass through of advanced technology. U.S. firms seeking access to the Chinese market or using China as a manufacturing base such as Boeing, Apple, GE and other high tech companies are in ventures or manufacturing arrangements where China has access to advanced American technology. Nathaniel Taplin in his article in the WSJ also sees this as a negotiating position set out in the U.S. for talks with China. Taplin says the U.S. is in a stronger position in this negotiation because of the huge surplus of about $300 billion that China now has with the U.S., and which is increasing in 2018 with the strength of the dollar. The Trump administration is looking to correct the trade imbalance in the future by focussing on China's access to advanced U.S. technologies in the next phase of competition between the U.S., Europe and China. This limited objective is more likely to lead to concessions by China Taplin argues, because of two reasons. China needs the dynamism of U.S. firms and technology advances because these firms and Chinese firms that are getting foreign investment are the most productive part of the Chinese economy with jobs generated, rate of return about twice that of inefficient state run firms. China also needs access to advanced U.S. and European technologies even in a limited form as it pursues further modernization.   ...

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This interview with Indian Health Minister, Harsh Vardhan, by Amitabh Bachchan and Anant Goenka of the Indian Express covers a range of questions including India's low fatality rate for coronavirus of 1: 46, its vaccination programs for polio, malaria and other diseases long before the pandemic for a population of 1.3 billion people, respect for healthcare workers, and the distribution of the new vaccines under development in India. Vardhan says there are of the 100 vaccines being developed 30 are in India,and of the ones nearing approval 5 are in India.  India makes 60% of the world's vaccines and its distribution capacity for such a large population has been proven many times. During this coronavirus months of preparation are going into reaching the whole population including remote parts in the mountainous areas. Vardhan says the plan is to vaccinate about 30 crores or 300 million people by June-July 2021 out of a total population of 135 crores or 1.35 billion. The vaccination will start with health care workers, moving on to essential service personnel in the military, police and other occupations, and to vulnerable parts of the population based on age and health conditions. Vardhan who is also the chair of the executive board of the WHO as India's representative, says the prime minister is personally holding two 3 hour long meetings to monitor the preparations for the vaccine and its distribution. Vardhan lists the achievements of the Modi administration and the quality of leadership provided by the prime minister- 2100 testing labs, 97% of the country having a testing facility within 3 kms, testing 1-1.5 million people each day, 1 million testing kits produced daily, 2 million beds in India with oxygen support or in ICU, 13,000 quarantine centers. By personally visiting the vaccine development facilities in Ahmedabad, Pune and Hyderabad, the prime minister also directly supported and encouraged scientists and their efforts. ...

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Three out of four existing-home sales in Merced county are foreclosures, the highest in the state. 4397 homes some running to about half a million dollas were built by developers in a place which is a working class agricultural town with some of the worst air quality in the country according to American Lung Association.

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Paul Ryan asks President Obama to put forward his plan for deficit reduction the day after the passage of the August 2, 2011 Debt Ceiling and Deficit Reduction bill in Congress. Ryan points out that health care cost increases are on an unsustainable path with costs going up by 8% in 2011 and projected to go up by 8.5% in 2012. The Obama Health Care legislation tries in Ryan's view the same failed bureaucratic efforts of the past to cut health care costs. Without a genuine and sure plan to cut costs the only way to pay for Medicare with new mandates is to increase taxes again and again. He cites the CBO's Long Term Outlook in June that total tax revenues would have to double by 2050 to finance the current rate of spending on Medicare and other programs. For Ryan the failure of the Obama administration to come up with its own plan for deficit reduction after passing the Health Care legislation- with expanded mandates and no certain cost control in the reform - is the most difficult to swallow. ...

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The first results of India's new vaccine policy with vaccine supplies and vaccination drive entirely run by the federal government are now showing up. Early reports are for vaccine supplies of 135 million doses in July for advance planning, and 250 million vaccine doses in August. Ramped up manufacturing of vaccines in India with the entire pharmaceutical industry in India taking part is part of the new policy. Collaboration with US manufacturing and research partners is also part of the new policy being implemented.

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Thanks go to Pfizer and CEO Albert Bourla for their latest effort the antiviral pill Paxlovid, says the editorial Board of the WSJ. It reduces viral load ten fold and is a game changer in the pandemic, says the WSJ, when vaccinations are not as effective as they could be with the large number of unvaccinated. Pfizer charges $530 per treatment for the 10 million doses ordered by the Biden Administration and signed a voluntary licensing agreement with UN backed Medicines Patent Pool for worldwide access. This should enable access in all countries.