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BBC's Mark Tullly reflects on the period of coverage from 1962-1994 of South Asia. He says of Indira Gandhi that she took the democratic process out of the Indian National Congress party, and set up her sons as future leaders that was undemocratic. Here he reflects on that period in an intervew with the BBC after he left the BBC.  He has deep connections to the Indian period after 1800 as his great grand father on his mothers side was around 1840 in a part of Uttar Pradesh where British planters had farmers plant opium that would later be bought by planters for export. This coincides with the period when Britain in Hong Kong traded in opium as part of British trading in the emerging colonial culture British Empire. There is mixed legacy for Britain in India and China. The history of the Opium Wars in the 1850's and opening up of colonial ports ended with the 1900's revolution and the emergence of the CCP in China by 1950. In India the legacy was mixed bringing together this part of Asia into a new nation and bringing parliamentary traditions of Britain that provided the basis for good governance.  Tully is a softspoken thoughtful Englishman who revolted against British classical education in his youth and studied history and religion at Cambridge, made friends with the future bishops of Canterbury and Lincoln at Cambridge. He is not the Englishman of the Empire as his fondest memories are of the servants verandahs on the bungalows of Britishers and the smoke from their quarters, and the language. So it is a thoughtful view that he gives of the undemocratic nature of Indira Gandhi and mismanagement of the economy that could have changed if India had gone in a different direction under other leaders in the the 1990's. Why is this significant? China's modernization drive started in the 1990's. India's by the undemocratic nature and mismanagement under Indira Gandhi did not start its modernization till 2010, about 20 years after China, opening up a huge gap that is only now being corrected leading to problems for world security, US security, European security and Indian security. And delaying the aspirations of development of 1.4 billion people for 2 decades. Vikshit Bharat cannot come fast enough for both Merz in Germany and Leyen at the European Union, who last week and this week visit Ahmedabad and India for the Kite festival and for Republic Day 2026. ...

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Fears of nervous investors is now touching the bond markets. AIG's insurance subsidiaries traded their bonds at prices ranging from 38 cents on the dollar to around 81 cents, from more than 50 cents on the dollar a month ago, according to MarketAxess. Investors are worried that future restructurings will cause cash generated by AIG's units to go to the government before its bondholders, as the government has already chalked up a huge bill of $177 billion for AIG. Long term bonds of triple rated General Electric Company, which with GE Capital is the largest US corporate debt issuer, dropped last week to 63 cents on the dollar. Again investors are worried that they may not get all their money back. And again GE's CFO Sherin had to reassure investors that GE's capital position was strong. The bonds of Citigroup are trading at 70 cents on the dollar. Sales of blocks of securities called "bid lists" are not a good sign, as big groups of sales are an indication investors are desperate to unload investments quickly. Bonds issued by Goldman Sachs and General Electric without the government's backing have dropped to 96 cents on the dollar and 73 cents on the dollar, respectively in the last few days. Their government backed debt trades at close to full value or 100 cents on the dollar. ...

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BAE Systems has a $120 million contract to provide social anthropologists to the Defense Department of the USA. In December, L-3 Communications Holdings Inc. acquired International Resources Ltd, a Washington based economic-development firm which is different from its military advisory business. This is the way the Defense Department and the suppliers to the Defense department are changing in response to Defense Secretary Gates philosophy that economic development, rule of law programs and strategic communications and a whole host of soft power initiatives are essential needs, and to the new President's philosophy. Now US Defense suppliers Lockheed and Northrop are providing peacekeepers thorugh the State Department, and BAE SYstems is providing social anthropologists in addition to armored vehicles to go with US troops on village patrols. The State Department, Agency of International Development and a changing Defense Department are all getting the attention of suppliers who are building new relationships for new needs and new services tackle the issues of terrorism, poverty, drugs and crime that generate or exacerbate conflict in other countries. In the first budget presented recently Obama pledged $50 billion double the amount before for foreign assistance. A portion of the $130 billion requested for wartime operations in 2010 will be allocated to these new kinds of services which are more effective and generate better understanding and support for the US in other countries....

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Unorthodox cabinet nominees- Kash Patel at FBI, Tulsi Gabbard at Intelligence get nominated. Others where the nominee is supported broadly by moms and parents, and many senators Rand Paul and Ron Johnson who are highly enthusiastic, are RFK Jr. for Health Secretary who still faced questioning from Republican Kennedy and other Republicans. All of them get nominated by Feb 15, 2025. Republicans in Congress stay together, Democrats do the same strangely opposing everything on the other side, including action on obesity and chemicals in food, drug industry practices they have been railing against for years that are RFK's agenda.  By tapping into different ideas just because they are good, make common sense, and not worrying too much about whether it is from the opposing Kennedy clan, and willing to take some risk with Patel and Gabbard, try youngsters such as Pam Bondi at Justice Department, Elise Stefanik at the UN and Kate Leavitt as Press Secretary, a woman Kristi Noem in the toughest job there is today at Homeland Security, DJT and Chief of Staff Susie Wiles have put forward a different set of people highly motivated, more than a bit rambunctious and boisterous, to get things done on immigration zero illegal migrants, zero fentanyl deaths, and zero deindustrializing technology transfers to the Nation's competitors, and zero play except on a level playing field in trade and business. ...

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Economist Lawrence Lindsey says the Fed has boxed itself and has little choice but to keep interest rates low. Borrowing at the more normal interest rates of 5.7%- which is what it was over the last three decades- and not at the current 2.5%, would mean an increase in borrowing costs for the U.S. government of $800 billion in 2021, says Lindsay. Lindsay bases this on the U.S. debt growing from $14 trillion in 2011 to $25 trillion by 2021, and interest rates going back to normal levels by 2021. Just to put this in perspective Lindsay says it would require all the cuts Republicans and Rep. Ryan are asking for just to pay for the added interest, not even about reducing the size of the U.S. debt. This would be a disaster for the U.S. Treasury, so we're stuck with really low rates. The term used by economists is "financial repression." Savers and retirees will have to put up with low returns. Lowering unemployment is only one aspect of U.S. Fed policy, the other aspect is in the constraints Bernake faces....

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Full Yield is a startup in Boston that is trying to help address the nation's obesity problem by introducing healthier foods and meals in cafeterias. It plans to introduce a line of Full Yield branded food made from fresh items and natural ingredients for sale in corporate cafeterias and prepared food sections of local supermarkets. It is based on a simple idea that if you eat healthier food you will be healthier. A study in the Jan-Feb issue of journal Health Affairs says 75% of the $2.5 trillion in health care spending deals with obesity, Type 2 diabetes, heart disease and cancer. And how much of this traceable to obesity and bad eating habits, smoking and lack of exercize? This study says most of the cases are preventable by changing these behaviours. Dr. Kenneth Horpe, chairman of the department of health policy and management at Rollins School of Public Health, Emory University, shows that if trends continue U.S. annual health care costs related to obesity would reach $344 billion by 2018, which is 20% of total health care spending. In 2009 it accounts for 9%. Thorpe says if even the 1987 levels of obesity were reached it would free up enough money to cover the uninsured population today. For American companies the problem has grown to alarming proportions and yet no nationwide coordinated plan bringing together companies, government, universities, public interest organizations, and other groups exists in the U.S. The CEO of U.S. grocery chain Safeway, Steven Burd, says Safeway was spending $1 billion to cover health care insurance for workers by 2005, with costs rising 10% a year- this meant putting out twice in health care insurance than Safeway's earnings and hitting another $500 million by 2010. Between 2004-2009 the costs of insurance surged 31%, making this the fastest growing single corporate expense, according to Towers Perrin. This reduces incomes of workers as companies pass on part of the extra cost, and reduces the profits that can be put back in new investment for economic growth....

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This article in the Economist following the state election in Berlin, says it shows Merkel and the CDU as still the only likely option to form a new coalition in the 2017 federal elections. Even though six parties emerged in the Berlin election- the left parties SPD and Die Linke, the Greens,CDU, AfD, FDP- the situation is so fragmented that the CDU still remains the leading party nationwide. The Economist points out that a Greens and left parties coalition as in Thuringia is not an option at the federal level, because most Germans are not in favor of a SPD, left party Die Linke, and Greens coalition at the national level. The opposition from the CSU inside the CDU-CSU parties to Merkel's refugee policy,  with Seehofer calling for a numerical limit to refugees, is it says presents the only real challenge to Merkel. Yet Merkel has already tackled that problem, as the new refugee numbers are dropping dramatically. and Merkel has already pointed out that the refugee crisis came when she and her government were caught unprepared. By taking the right steps to assuage voter sentiment as she has deftly done throughout her terms in office, staying close to what voters generally accept as the best way forward, a year from now Merkel and the CDU may as she says be seen as having taken actions that best reflect Germany's interests in the long term. ...

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Pete Pyhrr is interviewed by the WSJ's David Kesmodel 40 years after his zero based budgeting method became popular in the Carter administration. Pyhrr developed the method as a controller at Texas Instruments in the 1970's, and says it is a great tool in difficult economic times or periods of rapid technological change to make cost reductions. WIth zero based budgeting budget figures are not simply adjusted upwards or downwards from last years numbers, but the budget is developed from scratch to reflect purposes served in the current environment. It brings costs and benefits of each expenditure into focus, so that more profitable projects can be financed over less profitable projects. Pyhrr published "Zero-Based Budgeting: A Practical Management Tool for Evaluating Expenses," in 1977. It was used by President Carter in managing the budget process in the state of Georgia and in the Carter administration, but fell out of favor in the Reagan administration. Pyhrr says he sees the need for using the method in today's budget cost reductions for government agencies to help taxpayers. As with TQC under Deming, which came back to the U.S. following Japan's use of quality control methods developed decades earlier in the U.S., zero based budgeting is coming back to the U.S. through its use by private equity firm 3G Capital Partners of Brazil in its Heinz operation....

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The Cajas, local savings banks, are a symbol of the excesses and lack of financial controls of the bubble years in Spain. The local savings banks were run by authoritarian leaders who remained in office for many years, and were influential in the political system. The Cajas expanded into real estate during the real estate bubble, and many of the cajas had to be merged by the federal government under new management after the bursting of the bubble. Minder describes the culture at Cajas banks in Galicia, the region in the northwest of Spain that is the home region of prime minister Mariano Rajoy. Julio Fernandez Gayoso, or known as Don Julio in the old baronial manner, was one such bank executive who ran the the larges cajas bank in Galicia as his own fiefdom till he was 80, and only quit when forced to resign in an investigation.

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President Macron of France puts forward the basic building blocks for an agreement to reduce tensions with Iran. In a speech to the General Assembly of the United Nations he says that there should be negotiations between Iran, its regional neighbors, the U.S. , European countries and China. The Obama period nuclear deal of 2015 failed because of a lack of a comprehensive settlement and including Iran's neighbors in the region. Macron pointed out that the U.S. approach under president Trump of "maximum pressure" with tighter economic sanctions has produced a response from Iran of maximum pressure on its neighbors, including the attack on Saudi oil facilities with drones that took out half of the Saudi oil supplies. Macron put forward five issues for negpotiations to focus on: certaity that Iran never acquires nuclear weapons, solution to the Yemen civil war, a regional security plan that addresses other conflicts, ensuring security of maritime navigation especially in Straits of Hormuz, lifting of economic sanctions. He pointed out that "today we have a risk of serious conflict based on miscalculation and disproportionate responses." Mr. Trump even alluded to this when he told reporters after the dismissal of John Bolton as National Security Adviser, saying Bolton made Trump look like a voice of moderation. A lot depends on who are the advisers and whether moderation is exercised on all sides.  Macron, Merkel and Britain's prime minister Johnson met with Rouhani on the sidelines of the UN meetings to encourage dialogue. Countries likely to be severely affected by oil shutoff through the Straits of Hormuz are Japan, South Korea, India and China, and are quietly pushing for an easing of tensions.  ...

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Christina Romer, Prof. of Economics at the University of California, Berkeley, was chairwoman of the Council of Economic Advisors under U.S. president Obama. Here she discusses the different aspects of the debate on raising the minimum wage. Romer says the negative effects on unemployment are small. The impact on consumer spending is also limited. The anti-poverty effects are real for raising the minimum wage from the current $7.25 an hour, says Romer, as over half the families earning a minimum wage make less than $40,000 an hour. President Obama called for raising the minimum wage to $9 an hour in 2013. Studies show 13 million U.S. workers earning less than $9 an hour. Raising the incomes of these families by about $3500 an year under the president's proposal gives workers badly needed income to cope with rising cost of gas, food and other basic necessities. The effects on consumer spending are small, estimated at between $10 to $20 billion. Its main virtue is keeping the principle of fairness and maintaining social cohesion at a time of increaing inequality. Romer says there is competition for workers which makes it possible for workers at the lower end to get a fair wage, but does not account for the effect of high unemployment which takes pressure off raising the minimum wage in the market economy. Another benefit for countries of keeping a fair minimum wage is that other actions can be taken to improve competitiveness for business and manufacturing and reducing the deficit and be seen in a positive context of overall improvement. This is part of the case made in Europe for boosting the mnimum wage as austerity measures are taking place....

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Three very important point about a soda tax. First, obesity was rated as the No 1 problem of concern for business leaders at a WSJ conference for business leaders at the beginning of the Obama administration in January 2009. If obesity related costs are taken out of health care, and even though they are not collected as statistics they must be significant, it would reduce the costs of providing universal health insurance. Especially considering that most diseases are exacerbated by obesity, and in some obesity figures as one of the leading causes. Second, Centers for Disease Control Data shows that a typical person now consumes 190 calories a day from sugary drinks, up from 70 a day in the late 1970's. That 120 calorie increase, an almost threefold jump in consumption of sugary sodas, represents one-half of the total daily caloric increase during that span per person, according to C.D.C. data. This is a crucial finding. Just one product alone can cause so much disruption in people's lives. Just as thrifty ways of living are becoming popular in America, better education in schools and communities on good nutrition and eating habits can become popular to reverse the bad habits acquired in the last 20 years, habits that are careless and reckless. Third, research shows that soda drinkers are price sensitive, so that in the past when soda prices went up by 10%, consumption dropped about 8%. So a tax on sugary sodas would make sense. The huge soda sizes at fast food places are one of the signs of the excess of this age with no regard for the consequences to health. living habits....

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U.S home prices declined by 3.9% for the third quarter compared with the prior year, according to the S&P/Case-Shiller index of 20 major metropolitan areas. Prices are expected to be affected by an increase in foreclosed properties put by the banks for sale in coming months. Affordability has increased as prices are down by 31% from the 2006 peak and mortgage rates are at 4%. Yet as one appraiser puts it the problem remains one of tight credit and strict mortgage lending standards, and further home price declines could depress the market.

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A severe drought is affecting parts of Mexico in January 2012. About two million people are left without access to water. The Agriculture Ministry estimates total loss for 7% of Mexico's agricultural land. The worst affected areas are in the Sierra Madre in the north. The Mexican government has approved $2.63 billion in aid to the worst affected regions. These are rural parts of 19 of 31 Mexican states. The drought is likely to increase inflation in the latter part of 2012, as it is leading to higher prices for corn and beans.

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Growth in China is supporting growth in other Asian countries. But other Asian countries are still dependent on the economies of Europe and the USA. About 60% of the exports to China by Malaysia, say Malaysian officials, are components for products that are re-exported to the western countries. Domestic demand in China is insufficient to support the high level of growth in China and other Asian countries; in the event demand in Europe and N. America slides back in the face of austerity cuts in 2011, growth across Asia is likely to fall sharply.

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Of the $41 billion borrowed by states in the US from the federal government to pay unemployment insurance benefits, $8.8 billion was borrowed by California by mid-Nov 2010, according to the Labor Department. As states try to pay back these loans state payroll taxes are rising. One estimate showed 41 states increased unemployment insurance payroll taxes in 2010 by 34%. As unemployment periods are stretched out this time, states are running short of funds. In 2008-2009 fiscal year, states collected $31 billion of unemploymet insurance taxes and spent $79.4 billon on jobless benefits.

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Zappos gets rid of job postings, saying they are a conversation killer, preventing a two way conversation with young people who are interested and fascinated with the company's unique way of doing business. Instead people who send out hundreds of resumes get to crowd out those who want to really engage in a relationship with the company. The answer is Zappos Insider which offers special membership for people who want to learn more about Zappos and its unique culture. Zappos ambassadors will act as people who carry the conversation forward with those who are interested.

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A sign that investors are moving too quickly is the manner in which investors are putting money in emerging markets. THe sovereign credits of Argentina, Ecuador, Pakistan and Ukraine have risen by 100% to date on teh benchmark JP Morgan's Energing Markets BOnd Index Global. Gavin of Barclays Capital says the odds that current level rise to bubble levels are very high. Emerging market funds have absorbed more than $40 billion so far this year according to EPFR GLobal fund tracker, reversing the outflows during the crisis in early 2009.

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Tom Walsh, columnist at the Detroit Free Press is very skeptical that anything will change with Gettelfinger and the UAW, Cerberus, GM executives and other stakeholders who will stall and try to look for advantage even as Detroit's workers are at risk. Communities in Michigan are at risk and communities across America. He calls for President elect Obama to appoint a really good car czar who will force the different parties to make the changes that are required, or nothing will happen and things will get to the worst outcomes possible.

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About 680,000 homeowners applied for the Home Affordability Modification Program, or HAMP, and had their loans modified so that their mortgage payments are reduced. This is only one in four of the 2.7 millon homeowners who tried to to join the program. This according to a Wall Street Journal analysis of data released by the Treasury Department. In 2009 the Obama administration launched the program to reverse the rising home foreclosures in the U.S., by reducing the monthly mortgage payments through lower interest rates and extending the term of loans. About $75 billion was estimated as the cost of the program at the time. Only $1 billion of this has been spent by the Obama administration. The program offered payments to 100 mortgage servicers as inducement to complete loan modifications. About half the applicants or 1.3 million were declared ineligible from the beginning, and the program used stricter qualification criteria than loan modification programs offered by individual banks. Applicants were rejected because the necessary paperwork was not submitted or it was lost by the mortgage company- 266,000 falling in this category. An additional 770,000 homeowners who started the program were later disqualified mostly for the paperwork and eligibility problems, with only a small number rejected for failing to make trial payments. Mortgages less than 31% of pretax income were considered affordable and considered ineligible-255,000 were in this category. Over 80% of homeowners in the southern states of Arkansas, Louisiana, Oklahoma, Texas, Alabama, Kentucky, Mississippi, and Tennessee, received no loan modification....

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Wessel summarizes the existing thinking of the administration and its critics on ways to prevent the next banking crisis. The Shultz-Mervyn King School which says breakup the largest banks into smaller banks so they are not too big to fail. The Volcker school which says separate utility banking from thre risk taking banking of the trading desks of investment banks. And the Geithner-Frank school of avoiding these tough choices in the face of intense lobbying by the banks by glossing over the problem, their latest proposal suggesting that Treasury collect the bill of abank bailout from the remaining weakened banks in afinancial crisis of the future. But the Geithner -Frank solution still has Treasury, meaning the government footing the bill, as collecting the bailout from remaining banks that are weak in such a financial crisis may not be feasible. and it would further worsen the government's finances, raising questions about these proposals which may amount to doing a little better than nothing. In effect avoiding the tough choices of breaking up the larger banks or separating utility banking from trading desks of investment banks....

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U.S. will no longer allow Chinese flights to the U.S. if U.S. airlines are not given permission for flights to China. Chinese airlines continued flights to the U.S. after U.S. airlines stopped flying in February and March. Air China, China Southern, Xiamen, and China Eastern operate reduced flights to the U.S. President Trump's order could bar flights starting June 16, or earlier.