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Wages in emerging markets such as Indonesia, Thailand and Malaysia are rising following an increase in wages in China. Malaysia's government announced a minimum wage for the first time. China increased its minimum wage by 8.6% to 1260 yuan ($199) in January 2012. Shenzen region minimum wage was raised 14% to 1500 yuan, and Tianjin region's by 13% to 1310 yuan, according to Xinhua news agency. Rise in minimum wage has ranged from 40% in Thailand to 20% in Indonesia. The new minimum wage proposed by Malaysia's government is about 900 ringgit ($264-$297). In Thailand the new minimum wage is set at 300 baht ($9.78) a day, an increase of about 40%.

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Obama's State of the Union address in 2014 focusses on increasing the minimum wage, reducing inequality and creating opportunities for the middle class. It marks a shift to doing things by executive order wherever possible to avoid protracted debates and delays by Congress.

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Faces of the U.S. unemployment, foreclosure and housing crisis in Hagerstown, Maryland, in 2011.

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Browning points out the record Dow Jones Industrial Average (DJIA) average was not in 2007 but in 2000 when adjusted for inflation- on Jan 14, 2000. Since 1994 consumer prices measured by the Bureau of Labor Statistics have risen by 55%. Using 1994 dollars the March 5, 2013 closing DJIA average is at 9256, the 2007 high at 10194, and the record on Jan 14, 2000 at 10424, according to calculations made by Bespoke Investment Group. In inflation adjusted terms these calculations show the Dow barely making any progress in relation to the 2000 figure. When dividends and taxes are included, Browning says the inflation adjusted Dow is still not back up to the 2000 level. For retirees and sensible investors the real value of this money has to be taken account. Yale University professor, who founded the CAPE cyclically adjusted P/E, confirms what Browning says in an article in the WSJ March 10, 2013. There Shiller says that the inflation adjusted S&P 500 index has not made it to the 2000 level, so that investors have not made up for money lost in inflation in 13 years....

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The Italian comedy movie "Quo Vado," became a hit in Italy in 2016, premiering on Jan. 1. It tells the story of a government clerk played by Checco Zalone, whose only aspiration in life is a 9 to 5 government job for life. It lets Italians laugh at the past in a Italy that is changing. Today, the Turin newspaper La Stampa points out from its survey, two of three Italians would take some risk if it means career advancement. Yet public sector job protections remain firmly in place even as the private sector is changing rapidly not just in Italy but in Spain and other parts of the European Union.

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Jeremy Grantham and Jason Zweig share the view that this market has gone up too fast too quickly. Stocks that went down the fastest of companies in industries like finance and banking, insurance and autos, went back up with government support. And many of these companies that have poor earnings prospects are issuing more shares to raise capital now that the credit markets are working, so that they have some cushion if credit markets tighten again. Grantham thinks this dilution of shares spreads future earnings thin over a larger number of shares. Zweig says whatever was garbage has done good, which suggests that what is seen as a recovery in the stock markets is not perceived as a healthy recovery. Grantham's comment that "the junky companies may be diluted to hell just to keep them alive," and Zweig's comment that these "garbage" stocks are hot, but can be expected to sink for precisely that reason, do not offer a reassuring view of this kind of fragile recovery. Companies with stable businesses and stable earnigs prospects haven't done as well as these so called "garbage" businesses to use Zweig's term. Companies like Microsoft, Procter and Gamble and Johnson, and Wal-Mart which have low debt and stable returns. Grantham sees them as offering value in today's market. ...

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Erskine Bowles, a former chief of staff under President Clinton, and Alan Simpson, former senator from Wyoming, say the U.S. Supercommittee members should remember that their personal priorities and the common good are not at odds. The authors of the Bowles-Simpson Presidents Commission for deficit reduction say there is growing discontent among voters with politicians who are obsessed with gaining partisan advantage. Using issues of national importance that require a common approach from all parties as a way to score political points will only backfire on these politicians. Personal priorities of members of Congress are now no longer at odds with the common good, they are converging. It is upto the Congress, members of both parties, to push back against the special interests and partisan politics, and show leadership on the deficit. The eurozone crisis has shown the dire consequences of any sluggishness or procrastination. The failure of the political class and leadership in Italy and Greece, and in other nations of the EU, has put the fate of these countries in the hands of markets, which have relentlessly pushed up the borrowing rates of Greece, Italy, Spain and other countries, and taken future direction out of the hands of politicians. Erskine and Bowles say don't wait for a fiscal crisis to take action because it will be disastrous economically and politically, with everyone as losers and no winners. Timidity is not an option, leadership is required to take action that is big and broad, tackling tax expenditures, entitlement expenditures, defense, across the board....

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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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Italy's borrowing costs increased by one percentage point one week after the July 22, 2011 eurozone debt deal for Greece. The Italian Treasury sold 2.7 billon euros of 10 year bonds with a yield of 5.77%. The yield in late June for a similiar bond issue was 4.94%. Yields on Spain's 10 year bonds increased to 6%. German bonds are getting investors with a 10 year bond yield that has decreased to 2.62%, which means the gap between the German bonds and the bonds of southern European countries is widening.

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Some startling statistics on U.S. wages and incomes and the increase of part-time workers, by the publisher of U.S. News and World Report, Mortimer Zuckerman. He cites the Pew Research Center reports that show one third of Americans identifying themeselves as lower class or lower middle class compared to one quarter before 2008. This affects social mobility with the increasing gaps in incomes, education and social behaviour acting to reinforce each other and leading to even lower future mobility. Industries that are showing growth are in low wage occupations. The Bureau of Labor Statistics shows growth in future in industries noted for low wage part time work- health care, social assistance and retail, with some jobs lacking minimum wage and overtime protections. Revealing in this respect is that in the last 2 years fully 43% of net employment growth is in the 1.7 million jobs added in low wage work in food service, retail and employment services industries. The number of Americans working full time declined by 5.9 million since Sept 2007, part time workers increased by 2.6 million. The effects of higher part time workers and job recovery predominantly in lower wage industries is likely to affect consumer spending and slow growth....

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The Congressional Budget Office report in 2011 shows after tax resource flow that a family has to pay for consumption, a better approach to measuring the growth in incomes since 1970 including government help to lower income people and gains in the stock market for upper class Americans. This report shows after tax resource flow for the top 1% in the U.S. tripled from 1970 to 2011. For the middle fifth of the distribution families experienced real net income gains of 36 percent, and the bottom fifth of the distribution real net income gain of 50 percent.This suggests gains of about 10 percent a year if averaged over 30 years for the top 1 percent compared to 1% a year for the middle fifth and 1.5% for the bottom fifth. The report was done in 2011 and this could skew the results. Between 2011 and 2015 the stock market recovered and this would suggest a much higher gain for the top 1% of incomes and the top 10%, while also providing improvement in incomes for the middle fifth and the bottom fifth as unemployment decreased. Working class and minimum wage slowly recovered, and interest income on savings extremely low, with large student and other household debt, so that even at 10-12% gains per year for the top 1%, and 1-2% for the middle fifth of the distribution and 1.5-2% for the bottom fifth the last three decades have not been good for working class and middle income Americans compared to the the period 1950-1970 early postwar period recovery....

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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.

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The yuan is up 5.5% since the peg to the dollar ended in 2010, reaching 6.469 to the dollar. But this is not helping the U.S. trade deficit. The U.S. Bureau of Labor Statistics shows the price of imports from China are up 2.8% in May over the same month prior year. And the trade surplus for China in the first four months of 2011 is higher than the same period in 2010. What is happening? The improvements in productivity of Chinese manufacturers and the acceptance of lower margins is reducing the effects on trade balance of a small appreciation of the yuan, so that only a fraction of that appreciation is showing up in higher prices for Chinese goods. Also significant is that the yuan's small appreciation against the dollar is not enough to make up for the dollar's fall against other currencies. The yuan is down 8.3% against the euro and has actually declined 3.7% on a trade weighted basis in the last year.

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Max Fisher of the NYT points out the unique approach taken by Canada in the U.S.-Canada relationship - to cultivate a grassroots network of Americans in legislatures, business, and at different levels of government. This has enabled the Trudeau government to build a relationship with president Trump, and at the same time have relationships at different levels of government and with business in the U.S. to tackle issues where the Trump administration has acted in ways unfavorable for Canada. Provincial governments in Ontario and Quebec lobbied against a New York state government provision for Buying American on state contracts worth over $100,000. By emphasizing the $10 billion in exports from New York to Ontario this lobbying persuaded the New York legislature to cancel the provision. Premier Trudeau's popularity helps and the proximity to the U.S. means Canadians can visit quickly and understand the U.S. as a close neighbor. Still Premier Kathleen Wynne of Ontario says Canadian businesses are nervous about the uncertainty from the Trump administration.   ...

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Economists using data from Greek banks estimate the tax evasion in 2009 through unreported income at 28 billion euros. Using a tax rate of 40% 11.2 billion euros of taxes were evaded by Greek taxpayers. This is one third of the Greek deficit in 2009. The economists say doctors and engineers were prominent in the tax evasion list and find that these groups have large representation in Greece's parliament. Italy has taken steps under the Monti government to crackdown on tax evasion, but Greece is still to take action in this area, which is particularly glaring considering that the previous Greek government agreed to cut the minimum wage in Greece.

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Peter Coy of Bloomberg Business Week points out that the debt ceiling and proposed deficit reductions in the range of $4 trillion really obscure the real size of the problem which is much larger. The real problems hit when the U.S. faces a larger graying population by 2020 with sharply higher per capita health care spending; and at the same time workers from this generation retire and become beneficiaries of Social Security and Medicare with fewer younger workers to support the system with tax revenues. Another problem is that older Americans are likely as a voting bloc to vote themselves benefits that will cost the younger generation, benefits that the younger generation will not be able to enjoy. Even the Paul Ryan plan with its cuts to Medicare insulated todays seniors from the sharp cuts, as it becomes political necessity for both Republicans and Democrats to shy away from touching the current beneficiaries.

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China expands the trading range of the yuan to 1%. The yuan is set by the People's Bank of China, China's central bank, at 6.2879 yuan per U.S. dollar on March 14, 2012 or 15 to 16 U.S. cents to the yuan. The yuan rate is set daily by the PBOC, called the parity rate, and was previously allowed to trade in a 0.5% trading range.

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U.S. President Obama's 2013 State of the Union address focussed on the problems facing the U.S. middle class, calling it "our generation's task" to tackle this problem. Economic changes have changed the patterns of economic growth and jobs, growth, income growth, that prevailed from the end of the Second World War to about 1989. But he offered few solutions beyond increasing the minimum wage to $9.00 from $7.25 to reduce poverty.