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Germany went through a period of stagnant growth and persistently high unemployment leading to reforms of the welfare system and entitlements under the Schroeder administration. The reforms led to lower unemployment benefits and an effort to get the unemployed take up jobs. Instead of unemployment benefits that amounted to half the salary indefinitely, unemployment benefits ended in 12 months under the reforms, and workers were forced to take up jobs or dig into their savings. The cuts to benefits led to more of the unemployed taking jobs that were not their first choice with lower incomes. Unions agreed to defer wage demands and wages remained relatively flat for a long period. The "kurzarbeit" system of government subsidizing employers to retain workers during economic downturns, helped cushion the workforce from ups and downs in the economy. Unemployment which was in double digits a decade ago, is now 6.1%. The system still preserved some other aspects of generous benefits- parental leave of 14 months at two-thirds salary, vacation time and publicly sponsored health insurance. Recent changes include raising the retirement age to 67 from 65. The Organization of Economc Cooperation and Development estimates that the 200,000 jobs saved in Germany during the recession of 2008-2009 cost the government $7 billion. Government funds helped companies retain workers by paying a portion of worker salaries and averting layoffs.This comes to $35,000 per job. Compare this with the $38.9 billion allocated to a loan program at the Energy Department under the U.S. stimulus. 8050 jobs were created under this program according to the Washington Post- for the money spent so far in Sept 2011- 2 years into the loan program, of $19.3 billion. This comes to $2.4 million in government guaranteed loans per job. The Energy Department says that 33,000 jobs were saved under the $5.9 billion that was given to the auto industry under this program for investments in manufacturing to improve fuel efficiency. This comes to $178,000 per job. The Energy Department and Congress estimated a 5%-10% loss on the $38.6 billion loan program for loans that go sour, such as the Solyndra solar company $535 million loan. This comes to $1.9 billion at 5% loss and $3.8 billion for a 10% loss. The purpose of these figures is to show the cost of programs when the programs fail to achieve job goals or produce too little for the investment. The $3.8 billion loss under the program is over half the $7 billon Germany invested for the 200,000 jobs saved as estimated by the OECD. That ranks as a far superior investment than the Energy Department program. For the U.S. there are aspects of German reforms such as "kurzarbeit" that bear emulation, with serious questions about the effective use of the U.S. stimulus funds. For the rest of Europe the stingier unemployment benefits, raising the retirement age to 67, and other reforms send a different message. From the average German the message is: we made the tough changes, the rest of Europe cannot expect Germans to pay higher taxes while they put off similiar changes. Italy needs to change its retirement age, just as the Germans have done. As Chancellor Merkel puts it: "People in countries like Greece, Spain, Portugal shouldn't be able to retire earlier than in Germany. It's important for everybody to put in effort to make it roughly equal. Germany will only help when others really make an effort." Which is why Greece, Spain, Italy, even France are faced with making serious changes. This isn't stalling when it comes to euro bonds, from the German perspective. And it isn't about the lack of committment to the idea of a European Union, as all major political parties in Germany, the CDP, the SDP and the Greens, all strongly support the idea of a European Union. ...

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This report in WSJ says China's government faces severely strained government finances. Local government entities sale of land financed 40% of local government revenues in China, and most of these have dried up with the very real loss of confidence in property sector. Government now faces $900 billion in shortfall in revenues says this report. There may be psychological hurdles in China's growth with the effects on mental health from lockdowns in major cities, the revolt in the property sector with home buyers losing confidence in developers, the loss of confidence of foreign investors from US and EU. The dependence on the property sector to carry so large a burden of growth for the last 2 decades in China may now look like an error. The dependence on foreign investment may also be an error as the loss of confidence could mean some withdrawal and a lack of sustained investment.  It could even be said that restraints on both sectors property and foreign investors could have created alternative paths to growth, and reduced the shift of factories from the US and Europe to China that have now caused trade friction and and a reverse shift of investment back to home countries of US and EU. Trade friction has it appears backfired in a way that extends to the overall relationship which could have been prevented by preventing the hyper growth that happened. Greg Ip of the WSJ has argued that compared to Japan's growth in the sixties and seventies from a country of 100 million the hyper growth for a country of 1 billion for 2 decades created a massive impact on communities in US and EU that were dependent on factories that were lost to China. This has alienated large sectors of the public in the US and EU which could have been prevented by restraints on hyper growth in China. Ip says the growth was too large and too fast for the US to cope. It may have permanently damaged the relations between the two countries showing that trade and globalization had unintended effects when left to business which has no comprehension of how the macro developments can affect the relations between the peoples if the other effects in the relationship such as community impacts are ignored which business says is not its role,  and governments staying away from keeping an eye on how it was happening and adjusting for ill effects with restraint and redirection of business policies. ...

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Microsoft's Satya Nadella got his start at age 24 at Bing search engine. He is now 56 years. During this period he worked with both Bill Gates and Steve Ballmer who succeeded Gates at Microsoft. He is now remaking the Bing Search engine by using AI. This has happened since 2018 when he met Altman at the Sun Valley Tech conference in Idaho. He invested $1 billion in Altman's OpenAI, and has recently brought in Suleyman of Inflection who is a competitor of  Altman's OpenAI into Microsoft with the idea of setting up an internal AI business as well. To do this he has invested $10 billion in advanced AI chips that he has bought from chipmakers which have reduced the capital available for Microsoft's other businesses. This WSJ report by Dotan and Jin says Altman started his venture because he did not want to let AI to be led by Google silently developing its own version and doing leapfrog over competitors. A At this point in 2024 Google, Facebook and Amazon are building their own AI talent and making large investments in the chips that support AI. It is rapidly becoming an oligopoly of a few tech companies that makes deals among themselves for strategic advantage and protect themselves from public or government regulatory scrutiny. The controversy surrounding the firing and rehiring of Altman at OpenAI has brought new scrutiny from the FTC. The monopolistic behaviour of tech companies and their splitting the tech market among themselves as Google and Apple have done show the need for government action to prevent a repeat of this in AI. And to take action to break up existing monopolies in Search engines and in the Internet as Theodore Roosevelt did at the turn of the century for the oil business, breaking up Rockefeller's Standard Oil and Esso. Only when that happens can the true potential of the Internet be realized for Education, Health and other fields. Who can say that the iPad or iPhone or Google's Search engine has increased global literacy or American literacy? By freeing up these technologies- that belong to the people of America and the world- for education, health and other fields of human development mankind can advance once again. By regulating provide the ground rules for good use instead of the current danger of the Internet acting in ways to reduce public knowledge to levels that cannot sustain democratic process, and create stratified society where each group only sees what it has seen before and does not explore the world or knowledge in all its variety, all its ability to surprise us with new discoveries. ...

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Mnay people who have engineering degrees and jobs which pay 60,000 to $75,000 in the auto companies are now visiting food banks as they exhaust their unemployment benefits. They live in suburbs of Detroit, in Rochester Hills, in Dearborn Heights, in Taylor and so on. THe unemployment rate has reached 14.1% and there are more layoffs ahead. THis is also affecting the health care business as companies cut benefits. By the end of of 2009 100,000 residents will have lost their benefits, according to the state's unemployment insurance agency. THe US Department of Agriculture provides 20% of the food aid in the state to food banks and is watching the situation closely. In May, the caseload of the Michigan Food Assistance Program, which adminsters the USDA's food stamp aid for the state rose to 719,000 households, up 3.1% in April and nearly triple the figure in 2000. THe USDA has doubled its shipments to Gleaners, a food bank, which says it is stretched, as it does not serve the once affluent suburbs....

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Howard Dean, former Governor of Vermont, where Dean helped set up health care improvements, says the bill currently in Congress for health care reform does not deserve to be called reform and may do more harm than good. He points out that it does not insert competition into insurance markets, does not significantly lower costs, and does not improve the delivery and use of health care services. And few Americans will see any benefits till 2014, by which time premiums will have increased significantly. He sees insurance companies as winers in this bill, and the American taxpayer about to be fleeced with a bailout in a situation that dwarfs even AIG. One of his keen criticisms is already apparent to the public in this health care bill, that clear thinking has been thrown out in favor of compromise and political calculus, and by political moves the bill has been stripped of real reform , the end result being a bill crafted for votes and not to reform health care. It also then sets an irreversible course of how future healthcare reform is done, doing more harm in the future. ...

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The differences in the Democratic party between conservatives and liberals that make it difficult to get things done in healthcare, energy and other areas. The lack of White House leadership in a number of areas, and in anumber of instances. The lack of Senate leadership on these issues with the Senate not having done much in energy and healthcare legislation. Add to this the influence of the $133 million that lobbyists spent in the 2nd quarter 2009 alone. The failure of Republicans and Democrats in Congress to push vigorously for cost control in the health care industry adds to these problems.

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Experts say Chief Justice Roberts somehow found a path through in bridging the ideological divide and avoiding a show of partisanship in an election year. He somehow navigated and found a path through in his vote on the U.S. healthcare law letting it stand. Early on Roberts advocated "judicial modesty and humility" in jurisprudence. He compared the judge's role to that of an umpire in baseball during the 2005 confirmation hearings. The umpire would not pitch or bat, his job would be to call balls and strikes. It was seen as a determmined show of independence at a time when Justice Kennedy was seen as the swing vote. He has also earned political capital to be able to vote independently on other issues before the court instead of becoming embroiled in controversy about the role of the Court in overturning the work of Congress during the early part of the Obama administration.

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Paul Ryan, chairman of the House Budget Committee, explains his U.S. budget proposal to bring down the deficit. Ryan's Republican budget proposal is a bold effort to make a break from a status quo which is leading to higher levels of U.S. debt as a percentage of GDP. It envisions changes to Medicare, Medicaid, and the tax code. It is built on the idea that sustainable finances will lead to a better economic future for America, compared to small changes to the staus quo envisioned in Democratic proposals and the 2012 budge proposal of the Obama administration. It is also bold in its effort to tackle Medicare with a "premium-support" system, and Medicaid by turning it into a block grant system. It also incorporates the Bowles -Simpson President's Deficit Commission's ideas for simplifying the tax code.

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What Krugman makes of the $1.089 trillion dollar U.S. deficit for fiscal year ending in Sept. 2012. He points out that the U.S. can have a stable to declining debt to GDP ratio with $400 billion debt. He cites the Clinton years (1992-2000) when the debt to GDP ratio declined from 49% to 33% with steady growth. What about the remaining $600 billion. He attributes this mostly to temporary factors which are reversible as growth picks up. Of this remaining excess deficit he says $400 billion is from lower tax payments to Treasury because of the 2008 economic crisis and the recession that followed. This includes the payroll tax cut which is also temporary to keep up consumer spending in the recession. The $150 billion is from unemployment insurance, food stamps, and other aid which is also reversed once growth picks up. He places emphasis on restoring economic growth as early as possible and reducing unemployment and using the recession for business to continue to invest in R&D, productivity, and government to preserve the social fabric, invest in education, and provide incentives for growth. S&P Nov. 8 report says the net government debt to GDP ratio is estimated to be over 80% in 2013. It will have to stabilize at current levels for S&P to preserve the U.S. credit rating, says S&P executive Chambers. The higher debt to GDP ratio in 2013 and lower growth rates expected makes the situation different from the lower debt to GDP ratios during the Clinton period. Britain, France and other major industrialized nations with political parties at either end of the political specrum have also chosen to stabilize or reduce debt to GDP ratios rather than take on the risks of them going much higher. The U.S. has the added problem of health care costs out of control with an aging population and about 17.9% of GDP going to healthcare costs in 2010 expected to increase significantly, as Medicare actuaries estimate enrollee numbers jump to 80 million in 2030 from 50 million in 2012. Democrats and Republicans have largely sidestepped this underlying problem in fiscal cliff negotiations....

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Samuelson warns that turning seniors into a protected class making no sacrifices whatsoever, will mean shrinking all other social programs, defense and investments in education and infrastructure. This is the reality of the budget deficits facing the U.S. He cites the Congressional Budget Office projections that even with cutting defense and non defense discretionary spending by a third, the U.S. risks a deficit in 2023 of about 6.75% of the economy or gross domestic product (GDP). To cover this would require $1 trillion in higher taxes, an increase of a third above the 1970-2011 average. He says Democrats are using demagoguery and intimidation on this issue, and ironically even Paul Ryan's proposal reflects a desire not to touch seniors benefits and willingness to pass on the costs to the young to pay for these programs. Social Security and Medicare are a critical part of the American fabric, and no one wants to dismantle them, it is about modernizing them to reflect higher life expectancy and larger wealth accumulated by the elderly compared to previous generations, and to reduce the burden on the young. ...

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In the third Democratic presidential debate in Dec. 2013 Hillary Clinton came out looking much stronger than Sanders and Malloy. She described the Sanders government programs to make helath care and college free as too expensive requiring a 40% increase in federal spending, or $18 trillion-$20 trillion. Clinton said "we have to be really thoughtful about how we're going to afford what we propose." And said she would not increase taxes on those making less than $250,000 a year. On foreign policy issues she differed with Sanders and Malloy on the Assad regime and civilian deaths in Syria, saying Sanders had supported the removal of the Qaddafi regime in Libya. She used her long experience as Secretary of State to display a better command of the issues. On Hillary Clinton's comment about Donald Trump's statement for barring Muslims from entry into the U.S., that it was becoming a recruiting tool for ISIS videos, a NYT fact check shows no proof of this. Clinton said she preferred not to turn the issue of terrorism into a clash of civilizations with Islam, as her Republican opponents have done....

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How diagnostic tests in portable toolskits, that patients can use themselves, are being developed at low cost in developing countries like China. This creates the kind of care appropriate for poor countries, where patients need something they can afford, and something that does not require repeat visits to doctors offices or clinics. Ustar Biotechnologies is a Chinese startup, that says it has the technology, costs that the founder says "no one can compete with," and affordable prices for poor countries. The sales of such diagnostic test portable devices or kits is expected to soar in coming years. Quimin You, the inventor and founder of Ustar, graduated in North America and worked with multinationals. His proposals for cheap diagnostic technologies were turned down by multinationals, who in their narrow focus saw these thechnologies undermining their existing products. Now Qimin is back in China with a startup that will do this.

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Work requirements is one area in which Biden and McCarthy have a point of agreement in the debt ceiling discussions. Biden says he has supported work requirements in the past. Biden also says he would do nothing that affects health benefits. Under Biden the jobs market is the best it has been for over two decades which makes it easier to have some sort of work requirement for people able to work before they can collect government aid benefits. This makes an agreement possible in which Biden and McCarthy continue discussions with Biden building some form of rapport with a Congressman he has known in the past from his days in the US Congress. An agreement he pulls together would then have the support of most Republicans and be passed with the help of all Democrats. This would meet with opposition from a small faction of the Republican party, opposition that McCarty has become accustomed to including the prolonged voting it took to get himself elected as Speaker. McCarthy and most Republicans are in favor of Ukraine and the EU support for Ukraine at a critical time. They including Mitch McConnell who is present in the negotiations would not want to do anything that spirals America into a financial crisis during a Ukraine counteroffensive with Biden and Scholz's support that could end the war in Ukraine. Biden probably shared the concerns of his G7 counterparts with the Republicans about this. McCarthy and Biden could then simply say they only worked to do the possible and move on to the bigger battle in 2024. ...

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US president Biden proposes to reduce the US deficit by $2 trillion by increasing taxes on American households worth more than $100 million that would apply to their earned income, and their unrealized gains on liquid assets like stocks. Biden also plans quadrupling the tax on stock buybacks by companies, a tax approved in the Inflation Reduction Act of 2021. The deficit in 2023 will be about $1.4 trillion and rise to about $2 trillion, so that Biden's plan is to practically eliminate the  large deficit if the Republicans come on board. Republicans prefer cuts in spending. US companies have engaged in a dramatic increase in stock buybacks in recent years leading to calls for increasing the tax on stock buybacks. Biden says even high income households will not see an increase in their taxes, only the wealthiest households with over $100 million who have benefited vastly through the Reagan type policies of the last two decades. These households with over $100 million in assets will not be affected in the same way as students, workers, and middle income households are affected in shouldering a large part of the burden of these Reagan type policies that did not adequately fund education, healthcare, and manufacturing in communities across America. This was a period when Democrats in Congress awed by Reagan type policies failed to vigorously oppose policy that increased the US deficit and burden on households for health costs by not allowing Medicare to negotiate prices with pharmaceutical companies. A senior AARP official says that when we talk about the Biden Inflation Reduction Act of 2021 the key component is the Medicare price negotiation with companies that is now law. Why Republicans and Democrats before Mr. Biden allowed such a gross distortion for two decades since 2001 that burdened ordinary  working Americans while neglecting American manufacturing, till Mr. Biden assumed the presidency, says much about the policies of the last two decades and how it has affected ordinary working families. Shriveling factory towns and creating much distress in these communities with these distortions that are a legacy of Reagan type laissez faire policies that government should do little. The result of these policies is that manufacturing is concentrated in only one country for the whole supply chain something that would never have happened with a thoughtful policy planning process. India and Vietnam are only today seen as alternatives for the supply chain in 2023 when policies were in place in these countries since 2014 for the supply chain to be distributed in a way that would be a win-win situation for all countries, avoiding the national security threats of today with overconcentration of manufacturing in China. This has not benefited China or the US because of the rancor and tension it has created. It was the fall of the Berlin Wall that created some of this awe for Reagan, when looking at it objectively it was nothing more than a course correction in Europe after the Hungarian revolution suppressed in 1956, Czech in 1968. It had little to do with what policies the US should pursue for workers and families, just as the war in Ukraine today remains another course correction in a different direction in Europe, and does not affect domestic policy in the US to build a better society for workers and families that Mr. Biden is doing. ...