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Marie Le Pen and the National Front performed very poorly in French elections. Perceptions of voters are changing. The efforts in tackling the coronavirus, effective vaccination drives, public health protection, and building access to vaccine supplies, have shown the need for good leadership that believes in a science driven direction. Immigration is no longer the issue it once was and in some polls it is seventh on the list after climate change, economy,  education, pensions. The National Front in France and AfD are losing regional elections and popularity is dropping to about 10%. The Greens party in Germany and the Gaullist Republicans in France are being revitalized. Other factors are also present. The search for authenticity and effectiveness. After dismissing a popular prime minister who tackled the health crisis in 2020 France's president Macron fared badly in recent regional elections. His party En Marche was hastily put together in the last year of the administration of Mr. Hollande, the predecessor from the Socialist party. Its initial popularity has not turned into grassroots support. Mr. Hollande, Mr. Macron, are now seen as one term presidents. It is not so much that the centrist parties are gaining as a search for parties that can provide effective alternatives in the face of the challenges placed on the world by the pandemic- renewal of supply chains. climate change, public services, infrastructure, health, education, lives of the elderly. In the US, Europe, and India, countries in Latin America, there is a growing awareness of the need to rebuild with the people in mind, the people who have suffered badly in this health crisis and the financial crisis that preceded it in 2009. ...

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This Reagon Memo from 1980 was written by his advisors George Shultz, Milton Friedman, Paul McCracken and others before his first inauguration in 1980. It provides the new president with prudent advice on policy and methods to deal with soaring inflation and a stagnant economy. Its relevance today lies in the emphasis on charting out a long term plan for growth by encouraging private investment in the economy and providing a sure framework for the private sector to generate expansion.

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During the campaign and in the crucial Iowa primary Obama used newspapers, small and large, to get his ideas across. At one point he gave six interviews to one columnist for the Daily Times Herald of Carroll, Iowa, (circulation: 6,000). He chatted with reporters from papers like the Mason City Globe Gazette, Fort Dodge Messenger, and met with editorial boards of papers throughout Iowa. Some of these media may just be curious to hear a new kind of message, and Obama could use the communication skills developed in years of writing to express his ideas and his vision all in a casual setting, seeing faces, expressions, feeling the way the way people responded, and all the time listening to what they had to say. Now the same approach is to take world newspapers as another outlet through the Tribune Media Services which enables him to run an oped column in 30 papers around the globe. Here is the list: Arab papers are Al Wataan (Gulf States) Asharq Al Aswat (regional paper in Arabic), Gulf News (Gulf States), Saudi Gazette. European papers are: Corriere della Sera of Italy, Die Welt of Germany, International Herald Tribune of Paris, Eleftyropiea (Greece), Kristeligt Dagblad of Denmark, Le Monde of France, Lidove Noviny of Czechoslovakia, NRC Handelsblad of Netherlands, Svenska Dagbladet of Sweden, WPRost of Poland. South American papers: El Mercurio of Chile, Estado Sao Paulo of Brazil, Clarin of Argentina. South Asian and Asian papers: Hindusthan Times/ The Hindu of India, The News of Pakistan, South China Morning Post of HongKong, Straits Times of Singapore, Yomiuri Shimbun of Japan, Bangkok Post of Thailand. In South Africa the Sunday TImes, in Australia the Sydney Morning Herald, and The Australian, and in the USA, the Tribune papers which are Chicago Tribune, Los Angeles Times, Baltimore Sun. These are all distributed through the connection and means of the Tribune Media Services. The key point inthis communication effort is to signal something that may not have sunk in, in many parts of the world. A deep and all pervasive truth that is emerging from this crisis. We are all in this together in ways you can't imagine, as were in one boat and we float or sink in it together. Leave language, culture, borders aside, its aprofoundly new world in which the Obama story itself of multiculturalism may just be scratching the surface of really deep pervasive changes that are happening. Obama may actually not have hit this point hard enough. "Once and for all, we have learned that the success of the American economy is inextricably linked to the global economy.There is no line between action that restores growth within our borders and action that supports it beyond. If people in other countries cannot spend, markets dry up- already we have seen the biggest drop in American exports in nearly four decades, which has led directly to American job losses." This is dramatically proven by the latest Commerzbank estimates that show the 2 largest export based economies, Germany and Japan will see a contraction of GDP of 7%, USA 4% contraction and China, Eastern Europe and other parts of Asia and Latin America will also be impacted severely by the same phenomenon of markets drying up around the globe. And Obama offers the simple message that the United States is ready to lead, and asks its partners in the G20 to join with a sense of urgency and common purpose. Obama goes on to say that " we need not choose between a chaotic and unforgiving capitalism and an oppressive government-run economy. That is a false choice that will not serve our people or any people." ...

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Toyota is reducing senior management positions to 60 from 77. The board of directors will also be smaller, with 11 members instead of the current 27 members. It was felt that the large board did not enable discussion of important issues and slowed down decisionmaking. This is part of the new Business Plan and the new global vision for Toyota. The thrust is on sales in emerging markets which Toyota will target for increasing sales to 50% of the total sales by 2015, up from 40% currently. Sales in developed markets are set to decline to 50% of the total sales by 2015, down from 60% currently. The other push is in the hybrid sales area. Toyota will roll out 10 more hybrid vehicles by 2015, in addition to all electric cars, plug-in hybrids. Toyota will continue to have an all-Japanese board, and will use a committee of outside advisors to stay abreast of opinion in other countries. Akio Toyoda announced these plans recently and did this by himself, as he puts his own ideas to work for setting Toyota's direction....

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From the beginning, the infrastructure building component of the $787 Stimulus Bill, was never really what it was described in the rhetoric of the Obama administration. Even using the broadest definintion of infrastructure spending, the money allocated was never more than $150 billion, by one estimate. And only 8% of the total or $64 billion, went to roads, public transport, rail, bridges, aviation, and waste-water systems. The money allocated to high speed rail was about $8 billion, too small for high speed rail network for the US, and this has proved to be a debacle. Work moved slowly, so that by October 2009 work under the highway and transit programmes had seen work start on $14.3 billion of projects. The new $50 billion infrastructure plan from the Obama administration, includes ideas for a National Infrastructure Bank. But by now the public mood has turned against spending, and political support for a gas tax to pay for it is lacking. The ultimate irony of this situation is that the public thinks the stimulus bill has taken care of infrastructure. So many false expectations were created, and vigorously built up by the Obama administration, such as describing the stimulus investment as "the largest new investment in infrastructure since Eisenhower built an interstate highway system in the 1950's." The irony is that the public perception is that the stimulus has already taken care of the US's infrastructure needs, says the transport director of the Chamber of Commerce....

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Damian Paletta of the Washington Post says that credit goes to Gary Cohn a former Goldman Sachs president, and head of the president's National Economic Council for the way he has quietly built up a group of leading experts on major initiatives of the Trump administration such as tax reform, infrastructure plans. Compared to the infighting and other problems in the first 100 days of the Trump presidency, Cohn is credited with building a core of ideas and experts that bring Trump more to the centre and with the prospect of winning Democratic party support. He has helped shift the president to set up a more balanced approach, less confrontational with China and not calling China a currency manipulator, getting support for the Export Import Bank, and more receptive to the Federal Reserve led by Janet Yellen. This report says an alliance of moderates is centering around Adviser Jared Kushner, Cohn, and in other reports Tillerson in foreign affairs is seen as being part of this group. On NAFTA the president has moved to a less confrontational approach with Mexico, which has helped the Mexican peso recover and improved prospects for the Mexican economy.  On infrastructure new ideas to find financing are needed and a plan to tax carbon emissions is intended to draw Democratic support as well as provide some of the funding. About $200 billion in taxpayer money and $800 billion from private investors is being discussed at the National Economic Council. This report says Cohn suffered from dyslexia in childhood, graduated from American University, and joined Goldman Sachs in an unconventional way. He shares a passion for deal making with president Trump, yet at the same time values the views of experts he has brought to formulate concrete plans for the way ahead. About 25 experts with extensive experience in government helped put together new tax changes, infrastructure plans, and international trade deal plans. His predecessor at the NEC, Gene Sperling, gives him credit for quietly pulling together the experts and doing the planning that the Trump administration now depends on. ...

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Daniel Bell at Tsinghua University in Beijing, Andy Xie, economist in Shanghai, Zhang Habin, professor at Peking University, and Michael Meyer, author and hutong expert, talk about what issues are important. Bell says Obama mania is absent among the young in China, though they respect his intellectual abilities, and Chinese are not looking to the USA for ideals. They are looking to Chinese culture and characteristics, and democracy is seen in this light with emphasis on Chinese characteristics. This means the US has to engage at a deeper level with China. Treat China as an equal with something positive to offer, says Bell. Andy Xie is concerned about the US-China relationship, based as it is today on tenuous grounds, where what happens in Florida and California can have a significant and immediate effect on what happens in Guangdong. With 70% of the furniture sold in the US made in China, the effects are immediate when housing slumps. So he says the US lost 3 million jobs since the subprime crisis, and China lost 20 million jobs. And for the 5 million college graduates coming out in 2009, they will be adding to the 5 million college graduates from previous years who are seeking jobs. Ten million unemployed college graduates mean China is seeing whole new conditions as the backdrop of US-China relations. Habin says its important for the US to set an example in climate change and emissions of greenhouse gases. The US should sign an agreement with China with binding targets, make its technology available to China, and provide development aid to make this technology and other assistance accessible to China. Cooperation on this issue is vital to future relations says Habin. Meyer says the hutong, small enclaves of old Beijing with lanes and small homes, that the city officials call neighborhood slums, but actually have a sense of community and a vibrant life, are worth preserving. He questions the Walmart and Pepsi commercial culture, and questions building of the American car culture urban plan that generates pollution, lacks community feeling, and is not energy efficient. In fact he has a point here, because the US is shifting away from its own older urban planning design that encourages urban sprawl, as in California. The new Sacramento urban plan that is being adopted for the future in America has energy efficiency, more community and easy interaction, less urban sprawl in mind. See the link to this. But Meyer says Chinese planners insist on their right to make the same mistakes American urban planners made. And Meyer quotes the head of the first Chinese environmental NGO, who says, "if the Chinese want to live the American way of life we need 7 earths to support them". Which raises a disturbing question of the US postwar way of life with its large SUV's, urban sprawl, and less sense of community. Wouldn't the US have to join India and China in the worldwide scramble for resources to preserve this way of life? Just this week China signed $51 billion of deals for natural resources, see the link. And is the rapid decline of the SUV, just the first sign of changes that are taking place, with the economic changes in coming years leading to grappling with issues of better quality of life, smaller quantity of things, health and obesity and lifestyles, community, all coming to the fore. ...

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During the election campaign Obama talked about sending at least 2 more combat brigades to Afghanistan. The Defense Department is already planning to send 20,000 additional troops in response to a request of General David McKiernan, top commander in Afghanistan,including 4 combat brigades and an aviation brigade with helicopters, increasing the American troop levels to 58,000, with an additional 30,000 NATO troops already there from other countries. The timeline for this is 12-18 months but with the escalating insurgent attacks in Afghanistan this will probably be done more quickly. Obama and some Democrats talked about Afghanistan as somehow being the good war and he vowed to defeat the Taliban and militants in Afghanistan. But Afghanistan is a different place and most military experts are suggesting that a good strategy will be needed, for example winning over the tribals and some of the militants, and not trying to win militarily. However with the deteriorating situation there the only way to win over tribals and militants may be to get the situation to where the NATO and US forces are in a strong situation. The two big handicaps in this are first history, where the terrain and rural distribution of the people make it difficult to exercize any control over the vast region of mountains and deserts. So throughout history no one has controlled this region and there is no history of centralized government, with different tribes controlling their regions. The other is the problem created by the corruption and lack of any popular support for the Karzai government, which is made worse by the involvement of its officials in the opium trade with opium growing booming in the southern part of Afghanistan. How does the US and NATO create an effective Afghan army and police under a state that does not enjoy any popular support. And yet the strategy that Gates. Petraeus and McKiernan are pursuing involves preparing the Afghan army and police for the task of controlling the vast mountainous region against a rural insurgency that knows its way in the mountains enjoys rural support because of the independent spirit of the Afghan people who find it easy to see the NATO forces as white foreigners in their country. The Afghan army is small for such a vast mountainous region, only 70,000 in a nation of 32 million people, and the police forces of 80,000 mostly corrupt and ineffectual. The present plan is to build the Afgan army to 134,000 still small for such a large region. The other problems stem from the Pushtun population in Pakistan that supports the rural insurgency in Afghanistan and the support of tribal people in the border areas of Pakistan. The picture tells the story, a small number of NATO soldiers in a remote ridge in Afghanistan. And the problems actually are across the whole of the far northern region of what was once British India, of Afghanistan and Pakistan, as the Pakistan government is quite fragile, having an army that operates as a power center of its own with little accountability to the central government. And years of war during the previous military government of Pakistan under Zia Ul Haq, in which Zia with the support of the Reagan administration supported another rural insurgency in Afghanistan that drove the soviets out of Afghanistan, and the subsequent sponsorship of the Taliban movement by the Pakistan military in Afghanistan, has created a situation in Pakistan where militants now operate freely and with impunity in Pakistan itself, disregarding both the Pakistan military and the Pakistan elected government's power structures....

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The US gets the lowest score among the large industrialized nations- way behind Europe- in its record on greenhouse gas emissions and air pollution policies, agricultural policies, smog, and other environment criteria in a survey done jointly by researchers at Yale and Columbia Universities. On regional smog the US has a very poor score.

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First signs that OPEC may relent on production increases, as price of oil takes a new turn and becomes driven by forces that are beyond what OPEC may either foresee or be able to control. OPEC's different oil countries' senior officials are probably studying these new signals. Shukri Ghanem of Libya, a former prime minister and former head of Libya's national oil company, comments on new developments and shows willingness to increase production, to support a meeting before September and to look at the option of increasing production is his comment to Bloomberg News, May 8, 2008. Shukri was trained at the Fletcher School, Tufts Unversity, with a Masters degree in International Economics, and may have a better understanding of what is happening in international oil markets than senior officials of other OPEC countries. The signals that OPEC as well as the rest of the business community are watching are first the estimate by analysts at Goldman Sachs, Deutsche Bank and CERA's Yergin that prices are headed in the direction of another spike to $150 to $200 per barrel before coming down sharply. Ghanem and others at OPEC may find that it is not in their interest to actually lose all control of prices if this happens, that is lose the market stability that enables a cartel to do well. Price spike would generate huge spike in revenues for a short period 6-12 months before setting up for a big fall as a result of setting in motion a whole set of new forces in the use of oil. Some of this are much higher and aggressive automobile fuel efficiency targets for Europe, the US and also in places like India and China, conservation in a big way, fuel efficiency in other uses such as generating electricity and other industrial uses in plants and so on, almost like the race to the moon, with new urgency. The spike in revenues followed by a drop may actually hurt OPEC long term revenues over next 5 years as the moderation in growth in developing countries like China and India is quite likely as the US slows down and this would only accelerate the pace of this moderation. With focus on efficiency in the use of oil worldwide, accelerated new production in non-opec oil fields, and moderated growth worldwide, enough savings could be generated in 24-36 months to bring oil prices down from the demand side and reduce speculative investments. The second signal was a WSJ survey of 53 respondents n this case economists, and 51% of the economists surveyed said that the oil price rise's key reason was on the demand side from developing countries. And speculation was a smaller factor attributed to by 11% of the economists. So the combination of these 2 factors added up to 62%. Foreign exchange was cited by 15% of the economists, adding all three factors would attribute 77% of the rise in oil prices to demand from developing countries, speculation based on rising demand, and the weakness of the dollar. If demand the key element in this drops as a result of an even bigger spike in oil prices to $150-$200, with demand moderating in developing contries, and the dollar strengthens in 12-18 months, then the spike would be temporary, leading to significant correction afterwards. This sharp correction would then become entrenched as the world would look at oil in a new way entirely different from the way it did in the years 1945-2007. ...

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A small tax on the $800 trillion foreign exchange industry of 0.005%- with the tax on currencies where the leaders of these countries approve like Merkel of Germany and Sarkozy of France- would generate much needed money to help the word's poorest, says Philippe Jouste-Blazy, a former foreign minister of France. For instance he says tuberculosis killed nearly 1.8 million people in 2007, and caused the GNP of some countries to fall as much as 7 %. THis would bring serious gains to economic growth in the poorest countries. Look at the $1 to $5 tax imposed on airline tickets in France and 10 other countries since 2005.It has raised $700 million and financed three quarters of the AIDS treatment now being received by the world's HIV positive children. Unitaid, is an organization Blazy leads. It manages the money from the airline tax, and has negotiated 50 to 60% reductions in the price of pediatric anti-retroviral drugs in low income countries. The reason why the banking community should support this tax. One it is tiny, 0.005% on a foreign exchange transaction, and should not affect the flow of transactions. It is done automatically by computer systems. The currency trading system right now is untaxed. More importantly the bankers says Blazy have been benficiaries of taxpayer money. Isn't it time to give back to those worst affected by the global crisis the bankers helped create? Does'nt it create more credibility for the global financial, monetary and trading systems? He says the tax money could be managed by the Global FUnd to fight AIDs Tuberculosis and Malaria, with upholds programs in 100 countries to high performance standards....

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The IEA which is the energy agency of the OECD has updated its demand estimates for oil based on the updated estimates of growth in the US and Europe of the IMF and the OECD. The IEA reports have been behind the curve like the IMF estimates and more after the fact revisions. Their current forecast of world demand growth drops their January estimate of demand by 35% to 1.3 million barrels a day from 2 million barrels a day in 2008 vs 2007. This reflects the one percentage point drop in growth in the USA from 1.5% to 0.5% in the recently revised IMF estimate. This should lead to drop in oil prices from the high of $110 currently. But the IEA is leery of predicting this because of what it sees as robust growth in India and China. Partly IEA is caught between different views of world economic growth, one view holds that Europe will see some impact from the US slowdown but Asia will see less of an impact, another view sees this as a global economic slowdown. More likely considering the extent of the bubbles and the excesses in different countries its likely that whats happening in the US will see effects worldwide and lead to a global slowdown. So look for a further downward revision of numbers for oil demand growth as well as estimates that suggest lower oil prices once the effects are felt on the ground in factories, plants and industry worldwide....

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Only 78 years ago a 4 year old boy Eiji Kishida became in seconds a tangled burnt mass of flesh a mile away from where the atomic bomb fell on Hiroshima. It is his second cousin once removed that is meeting leaders of the G7 countries in the same place. It will come as a surprise to know that this is Fumio Kishida the prime minister of Japan. Peter Landers and Chieko Tsuneoka tell this incredible story. Setsuko Thurlow 91 years now living in Canada is the aunt of the boy who saw him just before he died. She was at the army office in Hiroshima which itself was buried in rubble. Mr. Kishida represents Hiroshima in parliament and wrote a book in 2020 about the little 4 year old boy Eiji and the devastation that is seen in a town destroyed by a nuclear bomb. Lyrarc.com supports Mr. Kishida's ideas and vision. First Japan, then China and India have gone through the phase of resisting and overcoming colonial powers. During the phase the influence of Vedanta and Buddhism was eroded, but this does not have to be so, Communism will pass away now that it has done its job of securing for the Chinese people scientific advance and modernization. All three nations are united by the shared links of Vedanta and Buddhism which provide the guiding light for a world that not only turns away from nuclear weapons but away from the wars and conflicts of the period of colonial powers advances of the 18th, 19th and 20th century. To Mr. Kishida's "idealism" we say it is a reality that is within reach. And we remind the world of the Buddha's own words in the Paranibbana Sutta: "But when the blessed One came to the river Ganges, it was full to the brim, so that crows could drink from it. And some people went in search of a boat or a float, while others tied up a raft so they could get across. But the Blessed One as quickly as a strong man might stretch out his bent arm or draw in his outstretched arm vanished from this side of the Ganges, and came to stand on the yonder side." "And the Blessed One saw the people who desired to cross searching for a boat or a float while others were binding rafts. And the Blessed One seeing them thus gave this solemn utterance: They who have bridged the ocean vast.                                       Leaving the lowlands far behind       While others still their rafts bind,     Are saved by wisdom   unsurpassed."     ...

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This interview with Donald Trump by the publisher, editors and columnists of The Washington Post, Ryan Jr., Hiatt, Lane, Marcus, Diehl, Armai, Attiah, provides an exceptional insight into the views of Donald Trump on domestic and foreign policy, on his campaign for president. It is the result of an effort to get Trump to state his policies on different issues without the fuzziness in which Trump has carried out his campaign, often taking different sides of the same issue. In some situations Trump is pressed hard on his positions or controversial statements, to clarify what he has not clarified in the burst of media attention Trump received in the past 6 months, especially on television media. First some myths and realities. A recent March 19, 2016, issue of the Economist cites the Pew Trust in showing that only about 17% of eligible Republican voters voted in the primaries. A person watching television news media coverage on Fox News, CNN, or MSNBC, would get the impression that the voter turnout was tremendous- this is not confirmed by the Pew Trust survey. The Economist points out that had the other eligible voters cast their ballots and even if Trump had a share of these votes, the results might look different. With a highly fragmented vote in the Republican primaries, and about half of the vote going to candidates other than Trump, Trump's voter support would add up to about 8-9% of eligible Republican voters based on the Pew Survey results. The question here would be is this a representative sample of the U.S. or of the Republican Party. And is one likely to make false generalizations about the nature of the Republican party from such a limited sample of voter opinion. Is voter sentiment inadequately reflected, and results hopelessly skewed because of the lack of good candidates in the Republican Party, and Trump's tactical rhetoric appealing to a group of working class Americans left out in the technological progress of the last decade. In the process is the hard work of the founders of the Republic, Washington, Adams, Jefferson, Madison and the framers of the Constitution being undone by a minority of disaffected voters with legitimate grievances on distribution of economic benefits of the technological progress, trade and global manufacturing networks- with a level of divisive rhetoric and decline in levels of public debate rarely seen. These are the clarifications sought from Trump and his response. Attiah raises the question of divisive rhetoric on minorities Hispanics and Black people- Trump says he is only talking about people here illegally, that he gets support from Hispanics here legally. He turns the question to Muslims and says there is a serious problem there that means being careful about how people are being admitted into the U.S. Questions about Trump's controversial statements about a wall with Mexico are not raised. Ryan pushes hard on the question of the libel laws standard that Trump says he is going to change, asking whether this would happen if Trump thinks the reporting "is wrong" but there is no malice. Trump wants the reporting to be fair for him, that reporters call him to check if he did this or that and why, before writing stuff about him, and he sees the reporting from the Post as very bad about him. He says his lawyers would have to tell the media, that he believes he should loosen up the standards so that this kind of coverage does not continue. On ISIS Trump pulls back when asked by Diehl about statements that suggested he would send the number of troops the generals wanted on the ground- estimated at 20,000 to 30,000- saying he would find it very, very, difficult to do that. On a nuclear option for ISIS Trump says he does not favor that. Suggesting that Trump like the other candidates in the election know there are no easy ways to tackle ISIS. Trump would rely on other countries in the region for help with troops on the ground, something that president Obama also favors, with limited results. Diehl also pushes hard on NATO- Trump says hundreds of billions of dollars are going to NATO and the whole burden for defending South Korea falls on the U.S. when it is not now a rich country that it once was. Diehl corrects him by saying for the public record that its not hundreds of billions, and South Korea, Japan pay 50% of the cost for defending their region. Trump wants to see 100% for the Korean peninsula defense borne by the South Koreans and Japan. Trump seees NATO as a good concept but needing more help from Germany, Poland, Baltics. At one point the Washington Post journalists tell Trump this is a position he shares with president Obama. Trump responds to questions from Hiatt about how he would handle the situations in black communities such as Ferguson, Missouri, and Baltimore, Maryland. Trump says he feels law enforcement is important and should play a big role in preventing the destruction of property from day one. He says jobs are what hurts inner cities but offers no solution about how to get the jobs lost in the steel industry for Baltimore, black neighborhoods sitting ironically next to the John Hopkins high technology university complex. Trump brings up the response that jobs could be created if the U.S. simply did not spend money on supporting nationbuilding overseas, a policy that president Obama has supported, and which the public has favored in the U.S. As Holman Jenkins brings up in a column on March 22, 2016 in the Wall Street Journal, these policies are being pursued today, and most of these jobs are not coming back so how would Trump bring them back or do anything about it, especially when Chinese workers in China's factories are being displaced by robotics in places such as Hon Hai factories. The more one thinks about it many of things Trump is saying are already being done, and there are no new solutions Mr. Trump has for today's problems of lack of upward mobility for the middle and working class- a priority for Sanders and Clinton also, not just for Trump. As a television personality and a candidate with a understanding of voter concerns, Trump artfully voices voter concerns of working class Americans for problems that defy easy solutions. Are there risks with Trump's approach that Trump has failed to think through or grasp? Does the unpredictable behaviour Trump suggests that would get allies thinking and trade partners responding lead to unpredictable consequences? Divisive rhetoric creates additional distractions in tackling the problems of the middle class and working class Americans. Divisive rhetoric within the NATO alliance would create additional distractions in tackling the problems of defending the European Union, such as using the very show of unpredictability. Diehl pushes Trump on this question. Would trade threats to China lead to a withdrawal from the Senkaku Islands by China? Trump says he thinks this would cause the Chinese to retreat . What if the Chinese see it differently, in their relations with Japan and South Korea, with a long difficult history, not necessarily in their relations with the U.S. Would a trade war hurt the global economy, and hurt confidence in U.S. fianncial markets just when the U.S. and European economies are staging a recovery, and when the economes of China, Japan and India are in a sensitive phase? These questions could not be raised because of time constraints, but must be on the minds of the editors of the Post and the WSJ, coming from different ends of the political spectrum. How would this help tackle the problem of upward mobility for working class Americans that all the candidates in the presidential election share? ...

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In his second part of the series on Capitalism and Globalization Schieritz says Trump's arguments have backing, and goes back to the studies done by David Autor of MIT on the adverse impact of free trade on communities across the U.S.. Lyrarc has covered this issue since 2006, and the reality is that this issue was brought up long before the Autor study gained prominence. On Nov. 12, 2010 Robert Lighthizer, Deputy Trade Representative under U.S. president Reagan wrote an op-ed in the NYT titled "Throwing Free Trade Overboard," that made a strident and strong case for what Trump says 5 years later, and from no less than a top trade official under Repubican Reagan.Trump comes late to this in 2015 when it was already amply clear what was happening. It is not so much Trump having discerned this, than others who should have paid attention, including Lew and leaders in both parties, and the business community,  who for too long ignored it. Or as Hilsenrath in a recent WSJ report says, simply said we have seen this before with Japan's entry into the American market, not realizing the speed and widespread impact of the changes in trade with China, that are unprecedented in history- evident just from the great speed of urbanization and manufacturing work force growth in China, policy rapidly impacting vulnerable communities across the U.S. The corrective course has to be credible which is why it has to come from a a reawakening among leaders such as May, Merkel and Clinton, who are keen students of change, and capable of designing and executing a corrective course of action, and winning the popular support and patience needed to stay the course which could run for most of the next decade. It would also provide leadership and show the way for societies in Brazil, China, India and other countries facing similar problems.     ...

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WSJ reporter Bob Davis writes this report on the end of the China economic miracle in 2014 as he completes a 4 year assignment covering China. He says China's economy is slowing rapidly and he is pessimistic abou the future. Construction cranes visible across China's skyline says Davis, can no longer be interpreted as growth inducing. With rows upon rows of empty flats in third and fourth tier cities which account for the bulk of the increase in housing construction, the consequences of a debt fueled construction boom are easy to see. Davis cites the IMF on the dangers of credit fueled growth in China- only 4 countries have experienced as rapid an increase in credit to GDP ratio in 5 years. Each of the 4 countries Brazil, Ireland, Spain and Sweden experienced a sharp decline in GDP growth and banking crises following the credit bubble. Estimates of debt to GDP are as high as 250% for China. Krugman, Roubini and other economists have warned about the credit bubble, saying China is no exception to the rule for the risks posed by such a bubble. ...

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Ghannouchi of Tunisia's Ennahada Party puts forward ideas for a pathway that Islamists could follow to integrate into the political life of Middle Eastern countries- compromise, working together with non-Islamist parties for the common good, focussing on economic development, pursuing moderate Islamist ideas, bringing in those excluded from the political process thorough a new inclusiveness, and respecting the opposition. He sees the successful election in Tunisia in which Ennahada worked with the opposition parties to ensure a smooth transition, as a model for other countries and the Arab neighborhood. In 2014 another process of smooth transition after elections, and respect for the opposition, happened in Indonesia with the election of Jakarta governor Widodo to be the new president. This set another model of respect for democracy, fair elections, respect for the opposition, focus on economic development and inclusiveness, for Muslim countries in another part of the world. Pakistan is another Muslim country which is working to create a model in the presence of much violence from Pakistan Taliban, and interventions by the military in politics. Assistance from the U.S. helped Iraq make the transition under the Bush administration till it unraveled with the policies of the Obama administration. Libya had the potential to make the transition with continued western cooperation and support- a change in administrations in the U.S. and France resulted in policies not supportive of a stable transition. The whole process now needs to be fostered carefully by western liberal democracies. Here Ennahada's Ghannouchi tells the world about the lessons learned by Islamist parties themselves for pathways to embrace for more inclusive societies focussed on economic development and progress....

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The views being currently argued in meetings with the President about the war in Afghanistan and Pakistan. Vice President Biden's view: Completely change the goal and strategy. Scale down the military presence. Change the goal from protecting the people from the Taliban- and note that reports on the ground suggest that the people are indifferent and see the Americans and the Taliban as equally bad, with the Americans as foreigners far worse, see Doris Kearns others- to accelerated training of the Afghan forces to fight the Taliban. The focus of US interests would shift to Pakistan. Biden points to the disparity for every $1 spent in Pakistan $30 goes to Afghanistan, and the US real interests lie in Pakistan, not Afghanistan. The US would work with Pakistan to take out Al Quaeda in the border regions. And the proof is that this is working, as Al Quaeda figures have been taken out with Pakistan's help. Counterinsurgency would be replaced by counter terrorism so the US doesn't get bogged down in support of a failing government. The fraud in the recent elections and increasing isolation and loss of support for the Karzai government, supported by unofficial evidence from the ground, make this a serious option, especially as President Obama knows the Karzai government does not merit support and presents a losing proposition. The second view is that of Secretary of State Hillary Clinton- Ike Shelton of Missouri on the Armed Services Committee and Leslie Gelb (see links) share this view- who said in an interview on PBS, "Well Al Quaeda's no longer in Afghanistan. If Afghanistan were taken over by the Taliban, I can't tell you how fast Al Quaeda would be back in Afghanistan." The problem with this view is that the US has only a limited presence in a large mountainous country with the difficult terrain that Afghanistan has, and its not American ground troops that have done the damage in taking out Al Quaeda, its mostly high tech drones. WIth a wider engagement and expanded US ground troops in support of a failing government, that is alleged to have corrupt and narcoltics connections, the popular support would dwindle to the point that the extra troops would not be seen as protecting the population- because how do you protect a people who simply don't care or are suspicious of you? The solution requires some sort of settlement with the Taliban, which guarantees that it not serve as a haven for Al Quaeda. Progress with schools and modernization would have to be, at least in the short run, be given upon the basis of the U.S. coming to terms with what it can and cannot accomplish at an acceptable cost, and the idea of vital interests not lying in Afghanistan but Pakistan. The missing elements in this puzzle would help this strategy, bringing together key countries in South Asia, India and Pakistan, to assume greater joint responsibilities and abandon the entire postindependence. approach to relations. The third view is that presented by Bruce Reidel, who led the Obama administration's strategy review of Afghaistan and Pakistan earlier this year, and is based on pragmatic considerations and the unofficial information on the ground. Reidel puts it this way: "A counterinsurgency can only work if you have a credible and legitimate Afghan partner, and thats in doubt now." And he goes on to say "part of the reason you are seeing a hesitancy to jump deeper into the pool is that thay are looking to see if they can make lemonade out of the lemons we got from the Afghan election." For a complete change in policy and focus Obama would have to admit that he now has different information, and he is willing to admit to have misread the situation during the first 6 months and during the campaign. That is a test of leadership, being able to change after looking at the reality of the situation and digesting it fully. ...

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Matthew Slaughter of the Tuck School, Dartmouth, says that the principle of comparitive advantage should determine what America exports and imports. Under comparitive advantage each country concentrates its energies on the particular goods and services that it does better than other countries. Free trade operates under the idea of comparitive advantage, but in practice it is quite different than its textbook economic counterpart. It is constantly changing as new countries or industries in different countries try to upset the existing pattern. Under a textbook example Airbus should not exist because Boeing was the most efficient manufacturer upto that time, and new entrants in a industry are nurtured for years with support from the governments of their countries. And in some situations the governments may exclude certain companies or industries from support such as Komatsu and construction equipment in postwar Japan, and Infosys and software outsourcing in India, and still survive and grow. Under comparitive advantage Japan should still be importing construction equipment from Caterpillar in the US, and there would be no serious competition in that industry. This would work to the detriment of the principle of competition in free trade which is just as important to free trade as the idea of comparitive advantage, with new entrants in an industry upsetting the old way of doing things and creating price/quality improvements. Slaughter simply pulls back off the shelf the old idea of comparitive advantage without seriously considering its real life aspects. Without dealing with trade distortion from currency manipulation, from the impact on jobs, without considering the continuing critical role of manufacturing in developed economies to provide the standards of living for a large middle class, and creating the kind of society that people of developed countries aspire to. He mentions GE's Immelt and the President's Council on Jobs, but makes no effort to engage Immelt 's statement in his recent op-ed article in the Washington Post, that the concept of transitioning from a export-oriented economic powerhouse to a services led consumption based economy could be done without loss of jobs, prosperity and prestige, was fundamentally wrong. He has only one line for manufacturing's role in America's economy. This line says knowledge intensive industries such as education and software are just as important as manufacturing, but fails to mention that manufacturing has received less attention in recent decades. In so doing he is discounting his own profession of concern for the high rate of joblessness in the U.S., and the need for a new focus on manufacturing in the U.S. to reverse that trend. By saying that imports are not a sign of failure but can raise standards of living, and leaving it at that, Slaughter does not acknowledge that consumer debt that US consumers have taken on in the process certainly affects future prospects for the US economy. And he makes no mention of the need for rebalancing the world economy, which is exactly how free trade should work ideally. Countries that have high imports export more to rebalance the world trading system, as currency valuations are allowed to adjust makig their exports more attractive. By not taking into account the realities of free trade, and the need for practical measures to rebalance without policy induced distortions by state run economies, Slaughter ignores the idea of free trade that works as it should and for all countries. The irony is that Immelt's own committment to jobs and competitiveness has been questioned in online blogs and most recently by an editorial in the Wall Street Journal on January 26, 2011, titled "The Misallocators." That editorial refers to the outsize role of GE Capital in GE's earnings during the past decade, and the lack of credibility of a focus on competitiveness and jobs that this creates for GE. It mentions the loss of 34,000 GE jobs in the US during the last decade. ...

LyrArc Article Gist
Rapidly increasing credit to GDP ratios between 2008 and 2012 in Hong Kong, Singapore, Malaysia, Thailand, and Taiwan.