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About 11% of student loans outstanding amount were over 90 days past due in Sept. 2012, increasing from 8.9% at the end of the second quarter 2012, according to the Federal Reserve Bank of New York. This now exceeds the figure for credit cards. U.S. student loan debt is now at $956 billion for the third quarter 2012, increasing by 4.6%. About 93% of student loans made in 2011 were made by the U.S. government, which is promoting access to loans without asking for information about borrowers finances and education plans and ability to pay the loans back. Because student loans have to be paid back and are hard to discharge even in bankruptcy, this means many borowers who cannot find jobs are deep in debt, and unlikely to get loans for many years for cars and other needs. Moody's warns of a wave of student loan defaults in coming years.

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How taking sweep shots on the black soil pitch at Kotla where the ball tended to bounce low did the Australian batsmen in. Rahul Dravid and Rohit Sharma decided to remain calm and not keep changing the fielding. They decided to let Jadeja, Ashwin and Axar know that this was the best way to approach it. Australia lost wickets quickly after the Dravid Sharma huddle and decision to tackle the situation calmly, just when the Australian batsmen appeared to be settling in for a long run haul. Australia were all out for 113 from 62 for 1 wicket.

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Jon Stewart's farewell on "The Daily Show," on August 6, 2015- the first show appeared in 1999- ended on the day the first Republican presidential debate was put on by Fox News. A year after Jon Stewart started his show he made his mark on television by creating a new genre- comedy that informs people. "Indecision 2000" was a new show that covered the 2000 U.S. presidential election ending with the small number of paper ballots in Florida determining the election. A whole generation of young people grew up watching his show which provided some of the bold vigilance so essential for a effective democracy, including coverage of the 2009 financial crisis. It included a show in which the host of the CNBC show "Mad Money" was told boldly that it was disingenuous that the crisis caught everybody on Wall Street by surprise, when informed people knew about the bad mortgages that were being wildly securitized. This was handled with the subtle humor that continued the conversation in an intelligent way, so typical of Jon Stewart. He is also remarkable for helping so many of his colleagues make a mark, including Stephen Colbert, which amplified his influence on discourse in American society. It included questionning those who benefitted from the intelligent debate with humor that Jon Stewart engaged in- president Obama was asked why the homeowners got so little help compared to the banks involved in the faulty mortgages, as a question of fairness. Veterans from the Iraq war were welcomed to see how the show was developed and get training. Stewart defused anger and channelled it into constructive discourse in American society, during 2 wars, a global financial crisis, and 4 presidential elections- "with malice towards none, with charity for all"- he will be sorely missed....

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The FDIC chairman, Mr. Gruenberg has defined the agency's strategy under the "orderly liquidation authority" given by the Dodd-Frank legislation to deal with financial firm failures. The Lehman Brothers collapse ruffled fianncial markets worldwide because of the lack of such authority and a organzed well defined plan to deal with bank failures. Gruenberg described the plans to the WSJ. Once the Treasury Department and federal agencies agree that a financial institution has to be taken over, the FDIC would first unwind the parent holding compay of the firm by putting it in receivership and revoking its charter. Unlike the situation for Lehman, the firm's subsidiaries can continue to operate, with financial support from the FDIC held parent company provided by the U.S. government under Dodd-Frank legislation. The next step would be for FDIC to create a "bridge company," with most of the firm's assets going into it. At that point equity holders would be wiped out and a debt for equity swap would be made with creditors. The firm would come out of this process as with a Chapter 11 bankrupcy, as a new recapitalized private firm. The FDIC is trying to build credibility in the markets that it has the ability to do this smoothly, and Gruenberg admits that till it happens its hard to convince markets in a decisive way. Another problem is that 85% of the international assets and derivatives of top U.S. banks are in the UK. Former Fed chairman Volcker is guiding the FDIC, and he sees the FDIC's efforts to work closely with the UK very favorably. These efforts are significant and vital to avoid the worldwide disruption in financial markets that ocurred after the Lehman collapse, and provide a well planned action plan in place of an ad hoc day by day response....

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The Japanese yen surged in value following the 2008 financial crisis as it was seen as a safe haven. As a result the Korean won declined by 42% against the Japanese yen. This continued till 2012. Japanese companies had to compete overseas at 80 yen to the dollar and shifted operations overseas. Now with the policy of monetary expansion of the Japanese central bank the situation is reversed in December 2014. The Korean won is up 40% against the Japanese yen since 2012. The Japanese yen is now down to 118 to the dollar in Dec. 2014. Abenomics gets a new mandate with the snap election in Dec. 2014. Aaron Back says Samsung may have gained ground in televisions and smartphones but other areas in electronics such as chips, displays and image sensors remain competitive and responsive to price. In autos Hyundai market share has declined to 4.4% by Dec. 2014 from 5.1% in 2011, according to MotorIntelligence.com. So far Japanese companies have used the currency advantage to improve profits and come up with better products. By using profits to invest in new technology and productivity Japanese companies can provide more features at the same price points to gain market share without having to cut price. After years of declining margins in electronics, autos and other markets this appears to be the current strategy. Another reason for this is that Japanese companies have already shifted production overseas, the shift being higher for Honda than for Toyota. Technological improvements from investments in R&D in Japan can be transferred to manufacturing operations overseas just as Apple is doing with smartphones manufacturing in China. The currency shift also improves Japan's position relative to American and European competitors in international markets....

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Both sides harden positions before the June 30th deadline for 1.5 billion euro repayment of debt to the IMF. Greece's prime minister Tsipras accuses the IMF of "criminal responsibility" for the pain of austerity programs in Greece. Eurozone leaders says Greece's default on its debt and exit from the eurozone is a possibility. The Economist points out that a Greek default and Greece's exit from the eurozone would be a mistake. It points out that this means repudiating debts of 317 billion euros, or about 180% of GDP. Yet the repayment is at low interest rates spread out over decades. Until the early 2020's interest rates are about 3% of GDP a year. In theory a devaluation would help exports, but Greece with its small trading position, may not see much benefit. The drop in nominal wages by 16% has not led to a surge in exports. The cost in terms of broken banks, sharp decline in savings, and collapse of confidence could be disastrous. The very people Syriza is trying to protect the poor and elderly, would be hit hardest, as the collapse in the currency would lead to a shift to a barter economy as in Argentina during its default crisis. For the European Union, the problem would not go away, as it would have to deal with a bigger problem of a failed state on the Aegean on the EU's southern flank. Syriza's gamble that this can be used to extract concessions by holding off till the last minute is failing, because it is leading Greece back to contraction after the small growth in 2014 under prime minister Samaras- with capital flight from the banks and investors leaving in a general fall in confidence. The management of the economy and negotiations by Syriza is now seen as incompetent and has jeopardized any difficult progress made....

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The collapse of the will of people around Yanukovych, including a deputy interior minister, as fighting units moved with weapons taken from an armory in Lviv towards Kiev, may have been the decisive event that decided the fate of the Yakunovych government. The deputy interior minister then negotiated with a protest leader Levus realizing that other than the front line of police the rest of the police were ready to abandon the fight. Levus then negotiated a safe corridor for the police to withdraw. As the Polish diplomat Sikorski came out to the square he found to his complete astonishment the police simply disappearing from the Square in Kiev. Hours earlier he had warned protesters that a crackdown was coming and they would all be wiped out, according to a report in the WSJ by Benoit, Norman and Fidler, 2/22/2014, so that they should accept a deal which would set a date for new elections but not lead to the immediate resignation of Yakunovych. That deal it also appears came after a Putin call to Yakunovych and not simply from diplomatic pressures, and it is probable that Putin had realized earlier than the diplomats that most of the police were not going to fight. Bringing in the army would have had dangerous consequences for relations between Germany and Russia in particular- as German public and chancellor Merkel felt strongly about the situation in Ukraine- and relations with the European Union and the U.S. Putin, Yakunovych, and even the EU diplomats may have missed the depth of feeling in Ukraine and the organization of the protest movement. Germany and chancellor Merkel, with her determination to make things come out right in Europe after a flawed history, gave hope to the protest movement. ...

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Increasing regional tensions with a more assertive Japan and China. U.S. president Obama's so called "pivot to Asia," appears to have little impact. China has tended to look for its own security architecture in Asia that excludes the U.S. U.S. efforts to reduce tensions are being ignored by China in May-June 2014, as China asserts itself in waters that are in dispute with Vietnam. The lack of U.S. influence compares unfavorably with the situation that prevailed since 1900, when the U.S. had the most significant influence in Asian waters. It has more to do with a policy of withdrawal under the Obama administration than U.S. capabilities. The policy of withdrawal in the Middle East comes after much of the sacrifice had been made and the situation in Iraq changed, so that for a much smaller incremental effort the U.S. could have both lived up to its principles and ideals for democracy and freedom as well as win public opinion in the Arab countries of North Africa and the Middle East. This withdrawal in the Middle East has given Russia and China the wrong signal leading to more assertive stance in Europe and Asia, and creating uncertainty where little uncertainty existed about U.S. determination. Under whatever terms it is wrapped the policy of the Obama administration is one of withdrawal. It is dangerous because it will mean a more costly effort would be needed under a future administration to restore the situation which prevailed earlier- in which the U.S. has helped create a climate in which the entire region including China and Japan have prospered economically, without the region descending into a competition between Russia, China, Japan, South Korea and India. The Obama administration with its muddled policies has inadvertently created this situation....

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Adly Mansour, a judge with the Supreme Constitutional Court in Egypt, is appointed by the military as president of Egypt. He was to take office as Chief Justice before the June 2013 protests in Egypt intervened to delay this. On July 3, 2013 he was sworn in as president before the Supreme Court. Mansour is one of two judges selected by president Morsi. He is a graduate of Cairo University, and studied public affairs and management in Paris before joining the judicial sytem in 1977. His decisions as judge went against both Mubarak and Morsi, showing his independent position as a judge on the Supreme Court. The judiciary is now taking an important role in Egypt similar to the role it has played in Pakistan, another Muslim country adopting democratic forms of governance after decades of coups and military rule since the 1950's. The larger Muslim countries in the Middle East, Turkey, Pakistan, Iran, and Egypt are faced with the challenge of balancing the demands of modernization with tradition, the demands of educated urban population with the more devout Islamist rural population, and creating stable transitions in democratically elected government. Islamists such as president Erdogan in Turkey who described western democratic forms of government as a train to get to a destination have still to take in to account the need to incorporate opposing secular views in governance. In this sense Turkey is not the model for governance as it once appeared for Egypt, Pakistan Iran and other Muslim countries. A new consensus in society needs to develop that respects all aspects of democratic governance including respect for the role of the opposition in a democracy, the role of an independent impartial judiciary, and the role of independent media. This will take time to develop just as it took time to develop in Europe and North America....

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Building extensive subway systems in large cities is the next focus for China's infrastructure building effort. China's prime minister, Li Keqiang supports "new urbanization, with people at the center." Building convenient mass transit for cities with subways and light rail is seen as a way to improve living in urban environments. Other related priorities are water supply, garbage disposal and more sidewalks. Subway lines reaching further into the fringes of cities helps push population out further and lead to less overcrowding and pressures on limited space in core areas of cities This also takes pressure off increasing automobile use inside the centre of cities, reduces overall automobile use in urban areas, and frees up money for consumers to spend on products other than automobiles. This fits in with the plan to urbanize China, by taking pressure off property prices, reducing air pollution from automobile use, and improving quality of life. It is also seen as a way to stimulate economic activity in the fringe areas as subways extend further to outlying urban areas. An example is the $300 million three station line to Kunshan, an extension above ground to Shanghai's subway, which is expected to connect with a line to Suzhou. China's cities have spent about 22% of the total debt of $1.76 trillion in 2010 on transportation infrastructure, according to national audit. The subway and light rail effort is taking place in 26 cities with new or expanding lines, according to the Transportation Technology Development and Planning Research Center. Subways charge much less in China compared to New York- 2 yuan or 30 cents compared to $2.50 base fare in New York city, and will need local government and state subsidies. ...

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Martin Feldstein on the U.S. economy in 2014 and the risks of the U.S. Federal Reserve tackling the economy on its own with monetary policy, without Congress taking on the task of policies to promote economic growth. Feldstein points out the 3.6% GDP growth estimate for the third quarter 2013 does not look that good considering that half of this is from buildup of inventory. GDP growth is about 2% as net result. With paralysis of Congress and the Executive branch the Fed's policy of huge buildup of long term bonds to reduce short term interest rates to zero and stimulate stock and home prices, he describes as the only game in town. The problem is that the size of the effect of increase in consumer spending from this increase in household wealth is small and not enough to contribute to significant GDP growth. The risks of this approach are that it contributes to destabilizing the economy as investors buy risky securities and bid up prices. He suggests a five year $1 trillion infrastructure development program, including defense, as a stimulus Congress should consider. Not the kind of stimulus that happened after the 2008 crisis. If not enough investment ready projects are available as in 2008 that will contribute to future growth, Congress should take another one year to prepare for this before moving forward. Debt reduction is key, and debt as a percentage of GDP should be reduced and set on a path to go where it was before 2008 to about 40%, deficits to below 2% of GDP. This should be done by slowing growth of Social Security and Medicare, and increasing revenues by limiting subsidies in the tax code that Feldstein as pushed for since 2010....

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Bret Stephens of the WSJ puts the -question what is Pakistan? And looks at possible answers. Starting with Mohammed Ali Jinnah, who he says had aquite different idea from that of the Taliban. He quotes Jinnah 'you will find that in the course of time Hindus would cease to be Hindus, and Muslims cease to be Muslims , not in the religious sense, because this is the personal faith of each individual, but in the political sense as citizens of the State." His idea was of religion as apolitical identification of the state as opposed to asecular idea like that of India, not of a religious state in a religious sense.This Bret Stephens says is why a majority of Pakistanis have rejected religious parties at the polls but still find the idea of political religion identification appealing. He sees these aims as immodest or overreaching in the modern world of technology, mass communications and economic deveopment. Only by remaining backward can such aspirations be supported because economic development, technology and mass communications can only supplant such religious politcal identification with aspirations for higher standards of living. Witness the current general elections in India with 730 million people voters. The common driving force for all parties is how they can deliver on the economic aspirations of people for better living standards, better infrastructure, and better services such as health care and education. And communal parties like the BJP also have to shift their focus to delivering on these aspirations to get support. So Bret Sephens makes the point quite effectively when he says that the threat to Pakistan is existential, so he would like to put the point existentially - just accept simple countryhood, or face nothingness. ...

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The politicians in Japan are seen as aself-selecting elite, not just the LDP which has been the party in power for mostly all the post war years, but also the Democratic Party of Japan. Mr Ozawa the DPJ leader was from the LDP, and the new leader Hatoyama's grandfather was an LDP founding father. The LDP prime minister is Mr Aso whose grandfather was Shigeru Yoshida, a prime minister after the war. Mr Hatoyama and another DPJ leader are defectors from the LDP, and both have large family fortunes, as do many LDP leaders. Mr Hatoyama has abrother in the current cabinet. And LDP olitical families treat seats in the paliament the Diet, as inheritable sinecures. Actually half of the current cabinet of Mr Aso are offspring of former politicians. So the Economist is pessimistic about the prospects of real change and fresh ideas for Japan from this crowd of politicians. It sees the need for new ideas. The economy has seen asharp decline in exports. Companies like Toyota are seeing a drop in sales. Government debt is twice the annual output, larger than Italy's. Export led growth which was the basis of recovery since 2002 has crumbled. The demographics estimates show that Japan's working age population will fall fastest as its overall population drops significantly in coming decades. This makes the schemes of the LDP like sending back immigrants of Japanese descent to Brazil with no chance of return as a particularly nutty in the light of the demographics. Leaving change to Mr Hatoyama and Ozawa of the DPJ now makes the prospects of new ideas just as elusive as before. And the public is just as disillusioned, considering the very low ratings of Mr Aso and other politicians....

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Barry Schwartz, a Psychology Professor at Swarthmore College, and author of Paradox of Choice: Why More is Less, points out that the 35 years of research shows that you get exactly what you pay for, but it turns out to be the opposite of what you want, and there are a lot of ways that incentive based compensation can go wrong. In theory choosing a parameter like share price and creating incentives to promote shareholder interests through higher share price as a measure of executive performance is reasonable, but it assumes that there is no manipulation of share price, or other external factors do not distort the measure of performance. In reality you get a situation like Merrill Lynch and other financial firms that gave out huge bonuses and executive pay even while bad decisions- that were later to sink the firms- were being incentivized. Schwartz points to research worldwide by Bruno Frey, Oberhozer-Gee, Uri Gneezy, James Heyman and Dan Ariely, that shows that incentives tend to remove the moral dimension from decisionmaking. Heyman's reaearch showed that when people offer passers by a token payment for help lifting a couch from a van, they are less likely to lend a hand when they are offered nothing. The question people ask themselves he says when money isn't part of the equation is very different he says: what are my responsibilities, what should I do that will fulfill these responsibilities to other people and to my country? In his view even though we put a lot of faith in incentives as a society to influence behaviour in a positive way, they actually do the reverse. Even if they work for some time, after a while some people who have fewer scruples learn ways to game the system and gradually distort the way it functions, leading to perverse results endangering all....

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U.S. Senator Ben Sasse suggests an alternative approach of simply repealing the Affordable Care Act called Obamacare and replacing it at a later date. This is endorsed by president Trump. This is the new Republican strategy in July 2017. Forty nine senators voted in favor of this repeal in 2015, when president Obama vetoed this legislation. Two more senators are expected to support repeal according to Ben Sasse.

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The Guardian provides this first account of what happened in the Galwan Valley border between India and China at the Line of Actual Control. It is described as the worst fighting in 60 years. On the high steep ridge lines above the rapidly moving Galwan River a patrol of Indian soldiers encountered Chinese troops in a steep section of a high mountainous region. They believed the PLA Chinese Army had withdrawn from the ridge in line with a June 6 disengagement agreement. The Indian government says that what happened afterwards was pre-meditated ambush by the PLA forces. In the fighting that ensued the Indian commanding officer was pushed from the narrow ridge falling to the gorge below. Reinforcements from the Indian side were called from a post 2 miles away and about 600 men were fighting in near total darkness in high mountain ridge with stones iron rods for upto 6 hours. Following a decades long tradition to avoid escalation of hostilities because of nuclear weapons of both countries the two sides have not used other weapons. Most deaths on both sides were from soldiers falling or being knocked from mountain ridges. The main problem in the conflict is the Line of Actual Control exists but since China's takeover of Tibet in 1950 there is no agreement that has set the official border. The British Simla agreement in 1912 set the border with Tibet in an agreement between Tibet and the British Empire in India, when Tibet was an independent country. China claims that historically going back to Ming and Qing dynasty Tibet was part of its region. For most of its history Tibet was an autonomous region with closer contacts with India because it is close to Nepal and Nepal is very near the Indian Bihar state border.  A new rail link from Raxaul, Bihar in India to Kathmandu is only 137 kilometres, and from Kathmandu to the Tibet border is only 205 kilometres. Fast rail or road links would put Tibet within a few hours by rail or road to Tibet from India. For the entire period the US exists as a nation about 250 years and from the first landing of the colonists on American shores about 1607 Tibet was a mountainous region that was so remote that few people even knew about the country's existence. Beijing and Shanghai are four thousand kilometres away, India much closer to Tibet through Kathmandu, Nepal and India sharing a common culture, and no one thought much about the mountainous borders at 15000- 20,000 feet in the western Himalayas, till China's takeover of Tibet in 1950. India had no clear idea what this meant in 1950- no clear border except for what was agreed between the Tibetan independent government  and the British in 1912 which was set under the British Empire- resulting in a fluid border. And China had no clear idea that this would put in a place it would not want to be thousands of miles from the Yangtse valley region home to most of China's population, in a remote mountain region at heights of 15,000 -20,000 feet, with little to gain. Throughout history since 1000 and earlier Tibet remained a region that acted as a buffer between China's western provinces and India, the high mountains at 15,000- 20,000 feet making it inaccessible. Which is why the Ganges plains and the Yangtse river valley plains contact was made more through the oceans than by land, and the areas developing distinctly different language and cultures. All this changed after 1954 when the Qinghai Tibet highway was built, the closest city on the Chinese side is Xining. Xining to Tibet is a distance of about 2000 kilometres at an average height of 4500 metres or about 14,000 feet.  ...

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Jose de Cordoba of the WSJ provides this excellent story on the nature of the migration crisis in the U.S. that is creating political divisions in the U.S. What is causing this surge in migration to the U.S.? Cordoba provides some useful insights to understand the nature of this problem. Nine out of ten migrants in Guatemala which sends most of the migrants from Central America are moving north from Guatemala through Mexico to the U.S. for financial reasons, it points out. Only 10% are because of violence in the region, the rest for financial reasons according to the United Nations International Organization for Migration The jump in apprehension of Guatemalans at the American border shows a surge from 15,000 in 2007 to 236,000 in 9 months of 2019, according to U.S. government data. The surge began in 2008 and jumped in 2014 after U.S. court rulings that first required migrant children to be allowed to join relatives in the U.S. followed by a ruling in 2015 that allowed a parent to join the children and allowed court proceedings to take place that takes years. The result was that smugglers advertised on radio and families sold small plots of land to join relatives in the U.S. who had gone before them. The migration is also specific to certain areas hit by damage to crops, including coffee crop from drought, or certain towns that simply sent more people simply for financial reasons advertised openly.  For 8 hours of work a migrant could make at $12 per hour amount of $96 per day, in Guatemala the daily wage would be about $5.  Overwhelmingly it is financial reasons or economic opportunity that sends migrants north. After it became known that kids could help migration the people in family groups apprehended at the border jumped from about 40,000 in 2015 to 390,000 in fiscal 2019. Smugglers charge $8600 per adult and half that for a child and an adult that can be dropped off at a checkpoint. The efforts of president Trump to close the border to this migration include having Mexico sign an agreement to police its southern border with Guatemala using its newly setup National Guard. As a result the migration has actually surged in 2019 with migrants seeing this as their one last opportunity to join relatives in the U.S. or to migrate to the U.S. The Trump administration tried separating families because of the loophole in the law that allows children to be not deported and parents to join their children. But this created a public outcry and the effort now is to close the loophole in the law. It is also strange that as many migrants are coming from one town Joyabaj  with population 100,000 as from Guatemala City the capital population 2.5 million. In fact the economy has grown by 3.4 % a year in Guatemala and efforts have been made to improve conditions with the help of donor countries in the West for several years, though the drought conditions exist. The situation is similar to that in Europe. If one looks at the violence by gangs in central American region after the end of the guerilla wars and compares it to the wars in Syria and Iraq, one can see how humanitarian concerns preceded what eventually turned out tobe a full blown migration for economic reasons. Initially chancellor Merkel adopted a humanitarian stance but failed to recognize that there was another side to his situation that would attract a wave of economic migrants from places as far apart as North Africa to Afghanistan. Poverty has existed in these regions for many many years before the current migration, with drought and lack of economic opportunity going far back in time. Merkel only recently recognized this problem and the new CDU leader Kambrauer has clearly recognized this. CDU policy shifted in 2018-2019 with curbs on economic migration that has reduced it to a trickle. This process is underway in the U.S. at its border with Mexico and for Mexico with its border with Guatemala. In the short run Europe and the U.S. are paying a price. Not just in the way it has divided each country with a far left and a far right eroding the centrist parties that existed before. In some cases centrist parties that were popular on the right and the left now hve leaders from a far right or a far left faction within the centrist ruling parties. Boris Johnson in Britain, Trump in the U.S., leaders in Italy, Austria and Hungary. Or as in Germany and Spain new far left or far right parties causing the centrist parties to dwindle in influence or as in Germany this combined with a shift to the Green Party in Germany and Liberals Party in Britain as a show of disapproval for how the migration issue has been tackled.  The Economist in a July 2019 issue also points out that the country's own citizens have fared worse with migration. It shows how the Conservative Party's austerity cuts for welfare budgets was popular in Britain as long as eastern European migration at high levels in Britain were allowed starting with the Labour party under Blair. This disproportionately hurt the middle class and the poor after the hit already taken from the faulty banking caused recession. With the drop in migration it is now felt by a majority in Britain that the austerity cuts have just gone too far and a mood is set in to restore many of the cuts and fund public services. Meantime some of the damage has been done and will take a decade to correct as the issues that mangled the centrist parties and led to fragmentation on views of what society should look like have taken place with Brexit and high levels of poverty, income inequality in Britain, lack of investment in infrastructure with overallocation to tech with declining productive benefit for every additional dollar spent. ...

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Higgins cites the IMF and other experts on Greece's debt being unsustainable. He includes a long discussion with Charles Dallara who negotiated in the Brady Plan restructurings for Latin American debt, and for the European banks in 2010-2012 with the EU. Dallara says the issue has become politicized with national parliaments involved making it difficult to tackle the issue of debt reduction. Dallara points out that the Brady plan restructurings were possible because national parliaments were not involved.

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Kaushik Basu, economist at Cornell University, and Chief Economist at the World Bank, says the U.S. Federal Reserve should consider the current low labor participation rate and low inflation in its rate policy setting decisions in 2015. Basu points out that in the recent past unemployment has gone below the current 5.5% without increasing the risks of inflation. He cites the period from July 1997 to August 2001 when inflation was below 5%, and at some points below 4%, yet inflation in 2002 was close to 2%. The large number of discouraged workers in this economic cycle has placed the unemployment rate below what it really is, says Basu.

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The first signs of a return to growth are seen in the European automobile market. The European Automobile Manufacturers Association reports a 1.7% increase in new passenger car registrations for May compared to April 2013.

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Interviews by Robett Pollock with Iraq's Maliki and Turkey's Erdogan, and what they have to say about the future of 2 places in the Middle East that the US has a lot to do with. Erdogan proposes a new constitution for Turkey that will go to a referendum to the Turkish people. He won 47% of the vote for this party in recent elections.