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EpiPen's price has jumped 550% over 8 years. Mylan Pharmaceuticals is dominant in the $1 billion market for treating serious allergic reactions. Mylan acquired reights to sell EPiPen in late 2007. A pack of two list price is now $608.61. Last Nov. Sanofi's competing product Auvi-Q was recalled giving Mylan price dominance. A problem for consumers is that EpiPen expires in one year. Mylan launched a campaign to make parents aware of the product for children with peanut and other allergies, and also lobbied the governments to make ready supply of EpiPens available in schools and other public places. Now the controversy over price increases, with Hillary Clinton citing this as an example of exorbitant pharmaceutical pricing, is likely to change the environment around EpiPen and other overpriced drugs or healthcare products.

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Scott Anderson of the NYT provides an indepth look at the Arab World and its fragmentation through the eyes of five people from each part of the Arab world- Egyptian, Kurd, Syrian, Iraqi and Jordanian. He says the countries that fell apart are precisely the ones that were formed by the British and the French, and Italy, following the defeat of the Ottoman Empire  using divide and rule policies- Britain in Iraq, France in Syria, and Italy in Libya- without much thought given to setting up viable nation states. This is why Iraq has a Sunni-Shia divide, Syria has similar divisions, and Libya with a largely tribal based structure, never really held together after the colonial powers left, and were held together only by strong dictators. Today's problems trace back to these historical events. This is complicated by the largely young demographic and restlessness of the people for change coupled with problems of underdevelopment in education, tribal loyalties, religious loyalties, and lack of political and social structures that could keep the countries together as change and transition to democratic processes took place. The role of the military further complicated matters in Egypt. Even Iran experienced these divisions because of the intervention of the great powers including Russia in Iran since 1900, leading to swings between liberal governments, foreign power supported governments, and a swing back to religious leadership as at present. This is one view of the region, others are presented by Ramadan (Oxford),  Bernard Lewis (Princeton), and leaders in Qatar and Emirates, other experts, some of whom point to the failure in leadership and the elites to find solutions to the problems of underdevelopment, in education, health, infrastructure, and aspirations for a voice in their governance. As the same divisions left by colonial powers affected Asia- in India, China, and Korea, but a larger vision of progress prevailed through crises and difficulties.        ...

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Kenneth Rogoff of Harvard University, expert on debt crises, and author of "This Time is Different," says China is one of the best examples of the idea that this time is different, with the idea created that somehow China was impervious to the massive build up of debt. The debt is now over 250% of GDP, and this was possible for so long because of the high savings rate of 30% of disposable income and the millions of young migrants moving to cities to work in manufacturing. The growth of shadow banking, opaqueness in decisionmaking, unreliable data, use of local government financing vehicles, the bubble in housing with a large portion of loans tied to the real estate market, all combine to create serious problems that will take a long time to sort out. Rogoff says the crisis in Tianjin with the deadly explosions in the port area, and the government's inability to provide answers to questions from a alarmed public, only added to the uncertainty and loss of credibility. Rogoff says he hopes the trillions of dollars in reserves will provide China with the tools adequate to tackle the debt problems before they spread to other countries....

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The Washington Post survey of 1200 readers on how the Republican healthcare plan of Speaker Ryan and the House of Representatives looks to them, how it affects them in their lives. Here Somasekhar of the Post gives the stories of 5 Americans. Some see the prospect of losing their insurance under the Republican plan even as they reach an older age, others a smaller segment says the Post, whose premiums jumped under the Affordable Care Act say they faced high premiums and high deductibles. The Post says the large majority of opinions have expressed anxiety over the proposed Republican Ryan House plan for healthcare. One of them is an uninsured poor farmer, Mr. Woosley,  income about $18000 who gained benefit from expanded Medicaid under the Affordable Care Act,  one Mr. Smith, 32 years, a personal injury attorney who faces paying $10,000 if he did not take insurance and $10,000 if he took insurance because of high premiums so a wash either way deciding to do without it, one a tech worker Mrs. Powers, 62 years, income $22,000 on year and $4000 the next, from middle class during the tech boom but facing fewer opportunities and uncertain income from part time work, hit by the deep recession facing fewer opportunities as she gets older and now the prospect of losing insurance without government subsidies, one who is from the middle class who sees little benefit from the Affordable Care Act and is forgoing insurance because of the high premiums yet faces a penalty for not being insured under the ACA, another Mr. Blanchard, 52 years, is from the middle class, a computer programmer who lost his job in downsizing, earns $100,000 as a consultant self-employed, pays $767 in premium a month and relies on the Affordable Care Act which helps him gain freedom from working at a company that could downsize,  another is a middle class programmer Mr Riffle,age 44, and his wife, who does not qualify for a subsidy with a $71,000 family salary from working 4 jobs between himself and his wife- this person finds it too expensive for his salary to buy insurance $900 a month and $14,000 deductible under the Affordable Care Act. His views are worth listening to as they go to the crux of the problem- he says he may not be any better with the Republican plan. He sees the real problem as the high cost of health care in the U.S. and the only way this can be fixed is for members of Congress to be asked to use the insurance exchanges they create. If this sample is representative it shows that there are real problems with both the Affordable Care Act and the Republican plan, that the high cost of health care the problem lurking behind every plan that does not squarely address this, and till that happens and members of Congress experience what ordinary people face, this problem can never by fully solved.   Woosley, Smith, Powers, Blanchard, Riffle, and their personal experience is at the crux of what is right and wrong  with the Affordable Care Act, and also with the new Republican plan of Speaker Ryan and the House of Representatives. For every Woosley, Powers and Blanchard who benefit, there is a Smith and a Riffle who are indifferent or are affected by the high cost under Affordable Care Act and the current system of medical care with its high cost. The Affordable Care Act does not  tackle high cost, for that to happen the culture in America that makes it possible and acceptable to charge high prices must change. Another problem apart from bringing health care costs is that any solution needs to have the whole country behind it. If the notion that all people are entitled to basic health care is to stand, the whole country needs to believe it as they do in countries like France, Britain, Germany and Japan. If this has to be made a workable proposition health care has to be offered at a price that makes this possible to achieve, and that idea also needs the deep and broad sense of support from the culture in America similar to that in these other countries. Until that happens politicians in America will get elected and turned out of office in turns on issues such as health care, based on which side they take and which problems they choose not to face squarely and responsibly. ...

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Efforts to boost the share of national income that goes to rural households and workers in China. The share of income taken by state owned enteprises and taxes paid by the enterprises would have to change for reducing the gap in incomes and reducing inequality in China.

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Close to half of the respondents in the 2010 Annual Survey of the American Chamber of Commerce in Shanghai, say that they face regulators who show a preference for domestic companies. About 80% of respondents said their operations were profitable in 2010. In 1999, 58% of Shanghai members of the chamber said their profit margins were below worldwide levels. In 2010, 78% said their profit margins matched world levels. Just under half of the respondents said they feared a negative impact from China's effort to build "indigenous innovation" and encourage domestic champions in each industry. 63.1% of respondents say regulations are getting worse or staying the same. Chinese President Hu on a state visit to the US in January 2011 is presenting the idea of a level playing field for American companies.

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Spanish banks agreed to reforms and job cuts as a condition for a 37 billion euro loan from the eurozone bailout fund, the European Stability Mechanism. The restructuring plan applies to Bankia, Novagalicia Banco, Catalunya Banc and Banco de Valencia, with the largest job cuts at Bankia bank. Bankia will have 6000 job cuts, 28% of the total employees, and cut branches by 39%. Banco de Valencia will be absorbed into Caixabank and receive 4.5 billion euros of the loan payment approved.

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Spain's Bankia bank makes headway in the recovery by 2014. Bankia chairman Goirigolzarri says it was "not impossible" that the government would recover the 22.4 billion euros it put in Bankia. Bankia reported net profit of 512 million euros for 2013. Problems remain as 15% of its total loans are more than 90 days overdue yearend 2013, increasing from 13% in 2012. There are billions of dollars of bad loans in a "bad bank." Shares are up 65% since Sept 2013, up to 1.31 euros in Jan 2014. The government valued the bank shares at 1.35 euros at the time of the bailout in 2012.

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Raghuram Rajan, Professor of Finance at the Graduate School of Business, University of Chicago, was appointed chief economist at the IMF in 2003. He presented a paper, titled "Has Financial Development Made the World Riskier," at the annual Jackson Hole meeting of economists and central bankers for 2005. Rajan says he had planned to write about how financial developments during Greenspan's 18 year old tenure had made things safer, but the more he looked the more evidence came up that the risk reward relationships in a normal functioning financial market had been terribly distorted. Market participants were being rewarded for wins but were not being asked to take on commensurate risks and impacts on their bonuses and rewards. He also cautioned about the use of credit default swaps which acted as insurance against bond defaults, and said insurers were generating big returns on this but with the appearance of little risk- even though the pain could be immense in a default. Banks were carrying credit securties on their books that posed risks to the whole financial system if things went wrong with the credit securities. Reaction from the gathering was unfavorable. Lawrence Summers, a former Treasury Secretary said, "the basic, slightly lead eyed premise of the paper was misguided."...

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A detailed account of the developments that unfolded for Bankia bank during and after the initial public offering of its shares, after it was put together from seven failing cajas savings banks with bad real estate loans made during the housing bubble. The procrastination and small steps taken to paper over the problems by the Spanish government and regulators during the last year of the Zapatero administration and into the first year of the Rajoy administration.

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A report released by the Organization for Economic Cooperation and Development (OECD) shows growing income inequality in 34 OECD countries. OECD Secretary General, Angel Gurria says: "The social contract is starting to unravel in many countries. This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that the greater inequality fosters greater social mobility. Without a comprehensive strategy for inclusive growth, income inequality will continue to rise." Countries with the largest ratios between incomes at the top and the bottom, are the United States, Turkey and Israel, roughly 14 to 1. Germany, Denmark and Sweden have ratios of 6 to 1, with their ratios up from the 1980's. Gaps in Chile and Mexico are at 25 to 1. The study covers the period from 1980 to 2008. Overall inequality went up by 25% in the U.S. from 1980. In 2008 the top ten percent in the U.S. earned $114,000, 15 times than incomes for the bottom 10%. The top 1% of Americans saw incomes go up from 1980 to 2008, increasing from 8 percent to 18 percent. The richest 1% having $1.3 million in after tax income, and the lowest 20% making $17,700. The trends have accentuated an increase at the highest end- the top 1% and top 10% of the people- and a sharp decrease for the bottom 20%, which can be grasped from the $17,700 and the $1.3 million, both at extreme ends. The study attributes the rise in inequality to a growing gap in wages for highly skilled workers as technology advances, a surge in foreign direct investment and a looser regulatory regime that reduces employee protections leading to wage premiums for financial jobs and smaller incomes for workers at the bottom. Income groups and professions and sectors that had the greatest influence in government were able during this period to get the greatest protection for incomes, and able also to maximize their incomes. Incomes in the financial sector increased dramatically in the last decade, as a result of deregulation leading to higher risk and speculative activities in the financial sector, leading to the financial crisis of 2008-2009. Financial crises further depress incomes at the lower end. Similiar income inequality trends can be seen for India and China. China has a Ginni coefficient of 0.5 according to researchers at Beijing Normal University, up from 0.3 three decades ago- a Ginni Coefficient above 0.4 is considered destabilizing. Another factor that played a part in these countries is corruption and lobbying by special interests for favored treatment of sectors or groups. Austerity measures taken in Europe and in the U.S. are likely to widen income gaps by depressing the lower end income groups, creating social unrest, especially in the absence of efforts to stimulate growth....

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Hillary Clinton narrowly loses the Michigan primary to Bernie Sanders in March 2016, as the Sanders campaign focusses on Clinton's support for trade agreements that hurt American workers and lead to loss of manufacturing jobs. About three fifths of voters in the Michigan primary considered this a major issue. Many less educated younger workers see their job prospects diminish and wages drop with free trade that hurts American manufacturing jobs. Bill Clinton signed the NAFTA agreement with Mexico, and as a member of the Obama administration Clinton supported the Trans Pacific Trade Agreement, later opposing TPP when she left the cabinet. Sentiment against trade that hurts manufacturing jobs in the U.S. is strongest in midwestern states such as Michigan, Ohio and Illinois. This was also a major issue benefitting the Liberals under Justin Trudeau who won in Canada's industrial Ontario province which has suffered hollowing out and loss of manufacturing jobs under the Conservative Harper administration. In the U.S. the issue goes back to the Clinton Administration for two decades. New jobs created by Apple, Google, and other tech companies pale in comparison with the industrial jobs created in another era that benefitted working class families. This issue and high unemployment or under employment, lower wages for working class families, was a major issue in the 2016 U.S. presidential election campaign. Widening wealth disparities, and lack of upward mobility, high tution and healthcare costs for ordinary families, dominated the campaign in the U.S....

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."

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David Stockman was Budget Director under President Reagan and known for his prodigous grasp of statistics in the national budget. Here he takes on what he describes as disproportionately large and destructive banking system for the U.S. economy, which he says the nation desperately needs less of. He supports the small tax of 0.15% of the debts other than deposits of financial conglomerates. His words are some of the strongest yet to come from one of the most prominent people on Reagan's economic team about how the nation's banking system has beome unproductive in supporting economic activity which is its reason for existence. The destructive effects on social cohesion and the middle class is emphasized. He says for years the Fed has run an insanely loose monetary policy that has encouraged this behaviour and socially detrimental profit seeking by the banks and other companies. He sees the big banks as dangerous institutions in today's economy engaged in a bull market culture which believes in entitlement and profitseeking behaviours regardless of its detrimental nature for the national economy. The recent profits of the banks in 2009 and the resulting bonuses are a result of the Fed's easy money policy and bank's gambling at the Fed's monetary casino as he puts it, with money obtained at little cost from Fed-controlled money markets. This article helps to eliminate the distorted perspective in today's climate that paints criticism of splitting up the banks, or otherwise restricting banks in engaging in proprietary trading and risky behaviours, as government interference. As Stockman puts it these banks are already in some sense wards of the state and not private enterprises and this issue is not relevant. The question now is how to set things right and this involves possible solutions such splitting up banks that are too big to fail, restricting risky behaviours and preventing proprietary trading, and other actions as unusual steps for unusual times to get things working back to normal. In other times Stockman would not have said this in an op-ed piece if this were not so....

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Researchers David Autor of the Massachusetts Institute of Technology, Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Fiscal Studies in Madrid, in independent research, studied the impact of trade on 722 clusters of interrelated counties in the U.S. They focussed on the surge in Chinese imports and found a pattern. Counties with higher exposure to Chinese import growth showed higher unemployment and higher expenditures by the government for unemployment benefits, food stamps and disability benefits. Their calculations show the increased government payments amount to one to two thirds of the gains from trade with China. This does not include the losses suffered by people losing jobs who deplete savings as they look for new jobs. Hanson studied the effects of trade and Chinese imports in the 1990's and found the effects were relatively small. This time the effects are large and show counties that lacked local investments in industrial machinery and technologies in which China was still playing catchup such as Caterpillar in Peoria, Illinois, and Boeing in Everett, Washington, were most susceptible to higher jobless rates and in need of government support payments. Autor and Hanson found that from 2000-2007, communities in the 75th percentile- ones with greater exposure to Chinese import growth than 75% of all communities- saw a manufacturing jobless rate of about one-third more than communities in the 25th percentile. The government payments mean higher taxes or larger deficits are needed to support these communities, and long periods of unemployment reduce the incentive to work. Michael Spence, a Nobel prize winning economist from New York University, says the world has never seen such a rapid pace of growth as China experienced between 2000-2011, with rates approaching 12% in some years, making past experience and prevailing theories on trade an insufficient guide to what is happening....

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Analysts see the likelihood of Greece exiting the eurozone at over 50%. The actions of the ECB under Mario Draghi to provide funding to weak banks through the Long Term Financing Operation have reduced the effect the effects of contagion from a Greek default spreading to banks in other EU countries. The fiscal pact signed in Jan 2012 at the EU summit with automatic penalties for countries lacking budget discipline provides Angela Merkel more room with her domestic political base to support the EFSF's capacity to help other eurozone countries. Greece with its deteriorating economic situation would then be considered a special case.

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Li Keqiang, China's new premier, entered Peking University in 1978 by excelling in merit exams. Li and a fellow student, Yang Baikui, translated the English book "The Due Process of Law" by British jurist Lord Denning. Professor Gong Xiangrui, brought the book to China and educated his students in the ideas of constitutional law and western liberalism. Yang says Li learned English on his own and meticulously carried a stack of notecards with English on one side and Chinese translation on the other. Li would study the cards while waiting for a bus or in the line at the school cafeteria. Li has political discusions with students from that time, some of whom joined the pro-democracy demonstrations of 1989. He is the son of a mid level county official from Anhui province and moved in the party ranks through diligent effort. Li's doctoral thesis is in economcs and he is expected to focus on economic changes, with Xi Jinping, the new president, taking the lead in making changes to the political system. Fellow students from Li's days at Peking University say the difference between them and Li is the pace of democratization, with Li looking at it as a longer process. Recent articles by Li Keqiang on economic change show his emphasis on urbanization as a way to improve agricultural conditions with a smaller number of farmers improving producitvity in agriculture, and the importance of creating a better social safety net for people in China....

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Spain's National Court is looking into the problems at Bankia and the leadership of Rodrigo Rato, a former head of the IMF and Economy minister in the government of Mara Aznar of the Partido Popular. The current prime minister Rajoy was deputy prime minister in the Aznar government which lost the election in 2004.

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Former U.S. president Bush says the U.S. has an important role as a beacon of freedom, human rights and democracy in the world. The U.S. should not shrink from the challenges in the name of a false and temporary stability, and flexibility should not mean ambiguity, difficulties should not mean shrugging away from America's role. Patience, creativity and active American leadership are needed. The Bush administration supported the struggles of people in central Europe and in other countries. This is from a speech Bush gave at the Bush Institute, Southern Methodist University in Dallas, a year into the Arab Spring. A speech that was giving voice to the aspirations of people in the Arab world.

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A recent book "The Spirit Level" has become popular in Britain. It says that countries with greater disparities in income also do worse in a number of social indicators, from higher murder rates to lower life expectancy. It also affects the consensus in society which is a necessary underpinning for sustained economic development and economic growth. Inequality when it affects the middle class and reduces the size of incomes in the middle, or creates stagnation in incomes, poses large risks for society and affects economic growth. In the US the home foreclosure crisis and the lack of bargaining power of wage earners in the middle class has created this problem. This is exacerbated by the banking crisis and bad loans in the banking system. Studies show that slow growth in college graduating rates in the USA after 1970 compared to the period 1900-1970, has increased inequality, especially with today's knowledge economy. Germany is also affected by this problem as wages for workers have remained stagnant with the labor reforms. Interestingly a combination of economic growth and payments to the poor have increased the size of the middle class and its incomes in Brazil. The austerity policies in Britain will affect incomes and income growth in Britain for the middle class. In China the gap is widening quickly between the urban areas and the rural areas. And the policy of residency permits- the hukou system-which limits internal mobility from rural areas to the cities and towns, makes the inequality all the more glaring. The lack of democratic election makes the situation worse in China compared to Brazil, because free elections in Brazil enabled leaders from the working classes such as Luiz Inacio Da Silva and Ms. Rousseff to emerge as heads of government. These leaders pursued policies that would explicitly bring a more shared prosperity in Brazil compared to the leadership in China. In China policies are determined by entrenched interests in its model of development- the state-owned companies and banks and their managers, local and government officials of the Communist party, and businesses with the networks and connections with the Communist party and local governments. This is why the ginni coefficient which measures inequality has dropped significantly in China, putting it in the rank of developing countries with poor records in equality. Inflation in China, India and Africa also affects the poor and lower middle classes to a greater extent. Current trends suggest that rebuilding the middle class in the developed countries and providing fairer distribution in developing countries will be of serious importance in coming years. Especially with the likelihood of more economic crises which tend to adversely affect the middle and lower classes disproportionately....

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Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.