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This report from Taiwan in DW.com points out that German opinion has changed significantly in recent years and is not reflected in Merkel policies. With a change in government to Greens, SPD coalition under Scholz of the SPD and Annalena Baerbock of Greens, German policy towards Taiwan is likely to change. Scholz is seen as having different views from Merkel and is likely to reflect public opinion more closely which is reflected in polls that show 58% of Germans not in favor of Merkel's China policy which moves away from the US. Germany also needs to consider NATO alliance and relationship with US which will be difficult with Merkel policies now that president Biden has made Indo-Pacific  with Aukus and Quad alliances critical to his administration. France has moved closer to India, which will mean pressures from the US and France and German public opinion for Scholz to  come closer to US and France in his policies. A sense that the Merkel period had serious issues and was "grotesquely" backward in childcare, education, digital modernization, infrastructure, climate change, as one German expert puts it, also will make SPD and Greens reconsider Merkel's policies.  After the election there could be a fuller reassessment of the Merkel years and further change in German public opinion as Germans see how much was lost in the later Merkel years in the lack of much needed change inside Germany in addressing the social and economic problems. Merkel may also be seen as having a sensitive relationship with the Biden administration which the SPD and Greens in their different orientation may not see in the same way. Biden's families and workers plan has much that Germans are looking for from the SPD and the Greens and on a scale of $3.5 trillion that the SPD and Greens may see as changing everything.  Population of India combined with South East Asia, Australia and Japan is also about twice that of China, which Germany will feel sets the path for a new policy that reflects a different Europe and a different Asia for the future. ...

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US Representative Katherine Tai sets out the policy of the Biden administration on trade with China. The policy is simply to keep Trump administration policy on tariffs in place and seek dialogue with China. This report in the WSJ explains what this means.  The Biden administration is preparing a long term policy to restore American leadership in the world in technology, trade and industry. This means as in semiconductors providing $52 billion to assist US firms to make semiconductors at home. The US will build a new supply chain that is resilient and brings more of the critical technologies in manufacturing back to the US. Where Mr. Trump was the initiator of a new policy on trade but lacked a long term vision Mr Biden is giving the Trump policies new vigor and shape and a long term vision of belief in America's role in the world. He is doing this by building on America's key strength - its people. The only way to do this is to invest massively after three decades of disinvestment under previous administrations. This comes in the shape of the $3.5 trillion plan for infrastructure and the Families and Workers Plan. Biden is also building stronger relationships with allies Australia, Britain, Japan, India, and Germany for trade, supply chain, and defense.   ...

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The Pacific Alliance Trade Agreement signed in Jan 2014 will make 92% of products tariff free for trade between Mexico, Colombia, Chile and Peru. The Pacific Alliance region's combined GDP for 2012 was about $2 trillion and it exceeds the population of Brazil. Experts, including Michael Shifter of the Inter-American Dialogue think tank, say the alliance's aim to decrease trade barriers in goods and services, coordinate policy on currency issues, but it does little for the critical needs of infrastructure building and improving productivity. Colombia and Peru especially have very poor infrastructure that severely impacts transportation and trade for the region. China's focus on infrastructure development financing and execution gives it more credibility in this vital development field, and the U.S. has to create financing and project execution capabilities to fill this vital need to build credibility.

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Global infrastructure needs are expected to go up by 20% to 2.1 trillion dollars annually for the next 10 years compared to the previous ten years, according to the Samsung Economic Research Institute. India's investment in infrastructure will double to 1 trillion dollars in 2012-2017. compared to the prior five year period. Toshiba hopes to increase sales by 20% to $38 billion for nuclear power generation and distribution equipment and railway equipment, by the year ending March 2013. This is 38% of total revenue for Toshiba. Hitachi has set a goal of a 46% increase in sales to $29 billion, or 20% of total revenue for Jan 2011- March 2016. The Japanese Government and a consortium of Japanese companies are working together on deals such as the deal signed with Vietnam in October 2010 for nuclear power. The International Nuclear Energy Development of Japan entity, includes 12 companies and the Japanese government. The consortium was critical to negotiating the Vietnam deal.

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Investments made by president Biden and Congress of $1 trillion in manufacturing and infrastructure will take time to go into effect. It is wrong to say this shows limits of this policy of investing in America as it has increased growth, maintained employment levels, and helped America recover from the pandemic. Biden did this for the National good not for Democrats and it was designed to benefit red and blue states like. Its effects will be felt long after the next election cycle in just 3 years January 2028, so that to say that president Trump or Republicans would get credit is an erroneous notion. The next president could come from the opposite party and the long term effects of this could benefit all parties, giving everyone a stake in making it work. The narrow view also overlooks the great benefits from this investment of $1 trillion for America's trading partners and allies in Asia and Europe, the American leadership role in CHIPS and Science as a result, and the respect of the world in the way America has handled its economic affairs. ...

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Greg Ip of the WSJ provides this exceptional report offering readers remarkable clarity on what the Republican Tax Law does- its high and low points.  High Points 1. It reduces the corporate tax rate to bring it in line with other advanced industrialized countries. The corporate tax rate in Germany and Japan is 30%, in the UK it is 19%. For 5 years businesses can write off capital equipment immediately instead of depreciating over a couple of years. This could boost investment and growth. 2.  The law takes aim at deductions that led to distortions. It limits the mortgage interest deduction, and caps the deduction for state and local taxes. This removes the incentive to pay more for homes that exacerbated the housing crisis in 2008. The Alternative Minimum Tax is largely removed. The Low Points 1. The biggest drawback is that lawmakers did not properly fund the tax cuts. Of the 10 costliest tax breaks nine were not touched, including employer health insurance, retirement savings, capital gains. Only the state and local taxes deduction was reduced. And a new tax deduction  was created, a 20% tax deduction for small business (proprietors and partnerships) paying taxes on their individual tax returns. Taxes on the wealthy or value added taxes, reducing tax breaks, is how other advanced industrialized countries paid for the corporate tax cuts, but did not happen here. Additional economic growth  to generate added tax revenues is the way Republicans in Congress say this is funded. Yet this is a questionable assumption as Britain reduced the corporate tax rate to 19% without seeing a surge in economic growth, as Greg Ip pointed out in an earlier WSJ article. At best the Joint Committee on Taxation estimates $500 billion over a decade in added revenues from added growth leaving $1 trillion to be added to the deficit. The WhartonPenn Budget Model (WPBM) estimates only $140 to $367 bill from the additional economic growth resulting in added tax revenues. Under this model only 0.03 to 0.08 percent added U.S. economic growth per year is expected from the Republican Tax Cuts. Such a situation would be bad  for the U.S. as the gradual improvement in Debt to GDP ratio to 78% following the financial crisis of 2008 would be sharply reversed taking the ratio to 97% by 2027. An unsustainable trajectory which will require tax increases in a few years and hurt investment in education, health and infrastructure into the future. This is what worries many experts most on both sides of the political spectrum today about what the Republican Congress has pushed through for a legislative "victory." This is why experts believe this is not serious tax reform and will require a new effort after 2019.   ...

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Gerald Seib, executive editor of of the WSJ, attributes the divisions in America both on the left and the right to a deep skepticism among people about the intentions of the U.S. political and financial establishment to conduct the country's affairs in a way that benefits all people. Both the traditional Democratic and Republican establishments, the Bush-Reagan, Clinton-Obama politicians and the financial community were seen as self-serving and looking after their own interests. The right of center supply side economics and the the tolerance for immigration levels of 30% rise in the last decade were discredited. A much larger recovery program was seen as needed from the deeply bruising effects of the financial crisis of 2008, started by the reckless financial establishment behaviours, than either the Reagan supply siders or the Obama people had understood or planned. This opened the way for Mr. Trump to take up the cause of ordinary Americans with a message of ambitious infrastructure development, confronting China's use of trade adversely affecting American workers, and slowing down immigration. And within the Democratic party the emergence of Elizabeth Warren and Bernie Sanders with programs for a wealth tax that would finance Medicare for All and college education supported by the federal government. Both the traditional Republicans under Bush and Democrats under Clinton Obama were seen not upto the task, after the 2008 financial and economic crisis created deeper scars than were imagined possible. The lack of effective policies under Bush or Obama simply aggravating the situation further. The culture wars have split Americans down the middle with a breakdown of the traditional American family and social structures creating deep anxieties in America. Obama's comments unsettled people in the heartland when he said that economic decline in the Rust Belt had made people there to "cling to guns or religion or antipathy toward people who aren't like them."   The trillions of dollars spent in wars in Asia and the Middle East were seen by Mr. Trump as an enormous waste when much needed investment was deprived of attention at home. Mr. Trump hammered this point home till today it is well accepted across America.  Even as political divisions persist they are now on how to tackle the redevelopment and growth of the U.S. The new focus of agreement has shifted with agreement across the country that infrastructure development in the U.S. and defending workers rights to jobs and opportunities is the top priority. That trade relations need to be reshaped keeping this priority ever present in negotiations. As a result all parties could agree on infrastructure and the recently concluded agreement for trade with Mexico and Canada and phase 1 of negotiated agreement with China. In overseas affairs the U.S. under Trump seeks cost sharing with a 2% of GDP defense spending by other nations so that money can be diverted to use at home. In this sense the debate has already shifted in the U.S. and the UK to how to address the problems of uneven development and growth across the two countries and better allocation of scarce resources to needs at home. Which is for the U.S. a good thing in the middle of all the perception of divisions.      ...

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It may come as a surprise that even a conservative Republican Senator Lindsay Graham of South Carolina, talked recently on CSPAN television about the US needing immigration in an organized manner to meet the growing shortage of workers in the coming years in the US. This report by Alicia Caldwell in the WSJ looks at the city of Topeka, Kansas, home to University of Kansas in nearby Lawrence, which is trying to attract immigrants who are allowed to work to meet 6600 worker positions that remain unfilled. Mayor Michael Padilla of Topeka is a cross between a liberal Republican and a conservative Democrat as are many immigrants from countries in South America. The Greater Topeka Partnership is looking to attract Spanish speaking people to fill these jobs, because of stagnant population and a lower unemployment rate than the US average. This effort in Spanish language has resulted in 10,000 resumes submitted. Another effort for Uniting with Ukraine has brought 160 Ukrainians to Topeka. These efforts are happening since 2019 and in some cases the city has offered $15000 a person for relocation costs. Citywide the effort is being welcomed including the business community. Topeka, a town of 126,000 is home to 17% Spanish speaking residents. Molly Howey who heads Go Topeka and the Greater Topeka Partnership is shown here, and says Topeka had already had success with its Spanish speaking population when it started welcoming new immigrants.  The rapid recovery of the US after the pandemic and its resilience for growth over the next decade is creating a recognition among Republicans as well as Democrats, among economic planners and business of the need to fill shortages of workers as the US invests trillions of dollars in its economy in coming years in infrastructure, manufacturing and and new technologies. It is an effort that is unprecedented since the post war effort to build a modern economy in the 1950's. ...

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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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The Guardian shows pictures in both black and white and in color from the last 50 years of US president Joe Biden. The first picture is a black and white picture from 20 November 1972 showing him cutting his 30th birthday cake with his wife Nelia, sons Beau, and Hunter. He is shown taking the oath of office for the Senate as he turned 30 the youngest senator and now the oldest former senator to be president. On the Metroliner Amtrak in 1988. He spent decades riding Amtrak to Washington D.C. He campaigned with Jill Biden for president in 1988. Not till the extraordinary situation of the pandemic in 2020 did Americans who largely ignored him give him the opportunity to lead- and at what a time when the Nation desperately needed his vision and his leadership through the largest vaccination program in history with the exception of that in India. And following this with his skills in Congress to get the legislation passed with Republicans for trillions of dollars to go into aiding families recover, and the economy to recover, investing in chips and science, and in infrastructure in ways that have happened only three times in American history, first in the early days of rail transforming a largely agricultural country during Lincoln and Grant's years as president in 1860's and 1870's, and again during the TR, Woodrow Wilson years in the 1900, 1910 period, and in the period under FDR, Truman and Ike 1940's, 1950's. No other country recovered better and stronger, and yet because of the lingering effects of the pandemic with 1 million dead from the Covid virus, and increases in the cost of living even as inflation was brought down from 9% to 3% for reasons stemming from unwise decision of American business to concentrate the supply chain in China, from housing and automobile price increases, the Nation did not immediately grasp the sheer magnitude of what had been achieved. ...

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Senators in the US Congress, Rubio and Schumer, have asked the US government to look into Apple's plans to work with Chinese semiconductor company YMTC. As a result the Commerce Department has placed export restrictions on YMTC. This NYT report looks at the two decade long rise of China and of Apple after Steve Jobs returned to Apple in 1997 and shifted manufacturing to China. When Jobs returned to Apple he found major quality issues at Apple's manufacturing facilities, a demoralized workforce, and financial losses, with CEO Michael Spindler running the company into the ground. Jobs had to start with afresh model for Apple and decided to shift manufacturing to China under the engineering leadership of Tim Cook. Alabama native Cook went to Auburn University for his engineering degree and Duke for his business degree. Cook joined Jobs in 1998 at Apple and for ten years till 2007 the two cut costs, shifted to contract manufacturers and rebuilt Apple with new products, iPod, iPad and the iphone. By not manufacturing Apple avoided quality control issues, and the costs of maintaining inventory. It was Tim Cook who ran operations worldwide, and he gradually built up the manufacturing relationships in China with Foxconn, which makes most of Apple's products in sprawling Chinese factories that employ 20 years later about 3 million Chinese workers. Foxconn was chosen by Apple in 2000 to manufacture the Apple Mac laptop. Before that it was a parts supplier to Apple. Increasingly Apple relied on Foxconn to make its new products including the iPhone. Both companies growth relied on the manufacturing of Foxconn to the point where Apple was dependent on Foxconn and had intertwined its operations with Foxconn in China. Today the whole relationship is being called into question after two decades in which American workers suffered the effects of the outshoring of manufacturing jobs. It should be noted that though Mr. Trump raised the issue of manufacturing exclusively in China with Apple, the Trump administration did little to change the practices of the company that pioneered this type of massive manufacturing role for China. That surrendered the entire supply chain to foreign suppliers in the interest of cutting costs and maintaining huge profit margins, with which it financed an array of new products and reached $1 trillion in sales from $10 billion, hundredfold increase over 2 decades. American workers and families for the first time in American history got very little from this Cook-Jobs project. American infrastructure in communities that would have been supported by American factories including the services and infrastructure in communities financed through local taxes, a practice throughout the Industrial Revolution in the US, was sharply disrupted over 2 decades. It caused a rupture in social relations and increased inequality in the US, and defunded infrastructure that comes with manufacturing.  It is the task of the Biden administration to now correct what Mr. Trump simply talked about but never induced or required Apple to do- lead the resurgence of American manufacturing, and make its major investments in the US, invest in its workers and families, invest in America. ...

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Ryan Tracy and Anthony DeBarros try to address the question of patchy internet service for America's heartland, rural areas from the prairies of Iowa to the west, and in the south and southeast. Public funds were allocated through the Rural Digital Opportunity Fund for broadband service with the latest optic fiber technologies in 750,000 census blocks in all states except Alaska in the US. This was supposed to bring digital internet with fast speeds enjoyed by urban users to every American home. Instead after this and another program the Connect America program why is internet service serving some customers and not others in rural areas, with patches of areas in each rural part of a state without internet service at the speeds one should expect for streaming and other uses? This WSJ research looks at data and conducted interviews on this important issue and found that internet service providers were given public funds by the FCC yet allowed to pick customers leaving some customers out. FCC rules till 2021 did not require service for all customers equally as long as they provided service to a minimum number of locations statewide say former senior FCC officials. One senior former FFC official says it is not surprising that companies made the decision to do the bare minimum required.  In Heavener, Oklahoma this meant that during the pandemic and lockdown when schools were closed the lack of good internet service affected learning from home. Many students could not get online from home. In 2021 another effort was made. This time funds will not go through the FCC but through the states. The Biden $1 trillion infrastructure spending for workers and families includes $42.5 billion for a rural broadband program in America. This WSJ report does useful service to America by putting the spotlight on one of the issues that divides America today the gap between the quality of life in rural vs. more affluent areas of urban America. It also shows that it is the federal bureaucracy that is at fault in this case for poor internet service in rural areas. Careful attention to this is needed so that rural America gets the attention it deserves from the prairies of Iowa to the mountains, the breadbasket of the country, and the heartland.   ...

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German chancellor Merkel is interviewed by DW.com's Max Hofmann as her 16 year period as Germany's leader comes to a close. She discusses immigration to Germany, climate change and other issues. Not discussed are the issues of neglect of infrastructure and failure in preserving upward mobility in Germany society during that period. She is described as a "compromise machine," which she refutes by saying "I'm not a machine, of course, but... a human being." Through compromise she was able to extend the Christian Democrats hold on power for this long. Yet for much of the time she kept the Social Democrats, who were lacking in conviction at the time for real upward mobility, out of power; by compromises that meant she would do just so much not enough on social values. In the end her party the CDU fell to a low of about 22% support of Germans in the 2021 election. The Greens with more conviction and the Social Democrats surpassed the CDU under Baerbock and vice chancellor Scholz. Her achievements came reluctantly in the end in the face of the coronavirus pandemic. This time she put all her convictions and support behind the German and European Union financial package for trillions of euros of support that would enable Europe to get back on its feet after the pandemic's devastation. This may be her singular achievement, long after everything else is forgotten. Yet not one word of this interview talks about this achievement made with the full conviction of both Scholz and Merkel. Scholz and Baerbock will lead a new Social Democrat+ Greens coalition that will finally rebuild Germany along new lines on pillars of social mobility, infrastructure building, and climate change action for the New Germany. Baerbock is just 40 years, and Germany now moves to be run by a new generation so unlike the last in conviction and vision, and more in line with the vision and aspirations after World War II. With both Willy Brandt's vision of the Social Democrats, and the vision of Konrad Adenauer of the Christian Democrats, now carried forward with the help of the Greens Baerbock and the young generation of Germans. ...

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Robert Frank, an economist at Cornell and visiting Professor at the Stern School of Business at NYU, says this deficit increasing our debt burden is entirely different from the way in which the Bush administration increased the national debt. During the last 8 years the Bush deficits increased the national debt by almost $5 trillion. But people went for larger mansions, and consumers went on aconsumption binge, and the Bush tax cuts were skewed to help the wealthy. Now to address the economic crisis a similiar amount of about $5 trillion will be needed but it will be spent quite differently. Money spent on ropads and building infrastructure that is needed is money well spent on any dimension. Especiallyfor America's crumbling roads and bridges and highways. If postponed these would cost more or twice as much to fix. Frank's point is that alot depends on what you do with the money. At recent interest rates servicing $10 trillion in debt costs about $400 billion annually. He says thats quite manageable. Just by instituting agasoline tax of $2 agallon as the Europeans do and are not alot poorer dfor this, the US could generate $100 billion ayear. When Americans are using mass transit in the largest numbers in 50 years, it also makes sense to build better faster transportation systems between major cities, like the high speed trains in Europe....

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Much of the cost of the Common Prosperity campaign of president Xi to increase access to healthcare, education and housing will fall on heavily indebted local governments in China, says WSJ. Today in 2022 these three education, healthcare and housing are moving beyond reach of ordinary Chinese because of rising costs and referred to as the "three big mountains." In education and housing the government has moved to improve access. Today parents like Ding Jianxiong in Beijing can give their children two extra hours of classes in school for not cost. It saves money and time compared to tutoring classes that the government is discouraging. Teachers have to work longer hours for this to happen and the cost is borne by local governments. Governments at provincial, municipal and county level finance 80%, 70%, and 60% of China's fiscal expenditures on education, healthcare and housing projects. Data from China's Finance Ministry shows local governments have built up $4 trillion in debt at end of 2020, up 20% from a year earlier, much of it to finance infrastructure projects in the last 20 years. This experts say is an underestimate with additional debt buried and camouflaged in financing vehicles, other forms of debt. In 2020 the central government restricted sales of land that were creating an overinflated housing market and driving cost of housing ever higher, depriving local governments of a principal source of revenues. Land sales are now down about 15% and falling. Experts say a new property tax could only bring in one fifth of what was derived through land sales by local governments. The result is a fundamental mismatch today between revenues and costs for local governments that has not been addressed. ...

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The doubts among the unvaccinated and America's pandemic of the unvaccinated in the south and west of the country, difficulty reaching a consensus on things as basic as spending $45 billion or 2% of the $2 trillion Biden plan for workers and families on 2 years of community college, or finding a way to stem what is an alarming decline in enrollment in college of young men in America, all go back to a standoff between Republicans and Democrats. Tennessee in the South is Republican yet passed a bill supporting state paid community college with a supermajority, yet at the national level it is lacks support of Republicans and centrist Democrats. To see how this happens this NYT report presents the picture from the Democrats side of how Montana residents blocked a National Heritage area in the state. Other stories relate to distortions from the other side from the Republican point of view. One man, one vote is not entirely the way Democracy was designed by Jefferson, Madison and other founders. The Senate of the US is based on one state one vote, giving Montana an equal vote as California or New York. At one time Mike Mansfield, Democrat of Montana was the Senate majority leader. The intent was to design a system that looks not just for democracy but checks on majorities of the moment.  This means unity is the way to renewal of America, for building its infrastructure, education and health care. If Tennessee feels that way about community college it should express it, so should other states in supporting president Biden's plan to Build Back Better. ...

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The Economist cautions that recovery is nowhere in sight, the hope points to only amoderating of the steep downturn. The 20% rise in the stock market for two thirds of the 42 stock markets that the Economist tracks in the past 6 weeks, can easily fizzle out as has happened before. Between 1929 and 1932 the Dow Jones Industrial Average went up more than 20% four times only to fall back to previous lows, and this crisis has seen 5 separate rallies of more than 10% only to fall back. But toxix assets have not been cleared up at Us and European banks, And consumption in the US, Germany, Japan and China shows no signs of coming back for years especially in the US where saving is increasing. And European banks have about $1 trillion in losses in central and Eastern Europe that have not been recognized, and the slide in the British and Spanish economies proceeds. And developing cpuntries have $1.8 trillion worth of borrowing to roll over this year, with less access to foreign investment. At one point the emerging countries imported capital worth 5% of their GDP, now cautious investors will keep that money at home. In America rising foreclosures and rising unemployment, combined with lower consumption, will keep economic growth down for years. Rising debt will limit future fiscal stimulus in countries like Japan and the US. Chinese growth will be constrained by its overdependence on infrastructure spending and lack of serious changes to its healthcare system which makes consumers save more for medical crises....

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The loss of some 4 million jobs is expected by experts in 2009, and Obama economic advisor Christina Romer has presented information at a meeting that shows the current downturn will be more severe than anything we experienced in the last 50 years. At that meeting on December 16, 2008, Obama met with Romer and other economic and policy advisors for 4 hours. It was decided that the target for jobs should be 3 million jobs created in 2009 and 2010. This still means a lot of the 4 million job loss will still occur in 2009, even if the infrastructure jobs estimated at $136 billion by the nation's governors get off to a fast start as they are supposedly ready to go. Money to states and local governments will reduce job losses and loss of services, and money in the form of lower payroll taxes would probably be saved to reduce debt by the public. Money to the poor to support medicaid and health care services and expanding healthcare coverage for those who lose coverage will be safety net reinforcement and support. So finding places to spend where jobs can be created quickly will be a challenge going forward and some of the $1 trillion stimulus will not go directly to job creation but as support. For the December 16 meeting Romer consulted with Martin Feldstein the senior Republican economist who said that " without action the economy will continue to decline rapidly." For a long time Martin Feldstein has been advocating strong action especially to reduce foreclosures and help stabilize housing prices. As the economy has weakened he has revised upwards what needs to be done, and his estimates are close to the lower end of the $800 billion to 1.3 trillion that is being estimated for 2 years. Lawrence Lindsay and other economists are supporting upto $1 trillion stimulus. ...

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The size of the stimulus package announced at 4 trillion yuan ($586 billion) involves only 1 trillion yuan in new spending according to analysts, the larger number was announced to bolster consumer and company sentiment. Export order are falling quickly from 27% increase in 2007 over 2006, to 21% increase in Sept 2008, to 19% increase in October 2008. over same month prior year. But imports are falling more quickly which is not good news for European exporters like Germany and for American exporters except for infrastructure exporters, and for commodities exporters like Brazil, Australia and Canada. In October imports slowed from 21% in September to 15% in October, which actually increased China's trade surplus from $29 billion in September to $35 billion in October. Exports of iron ore from Australia and Brazil are down and machinery from Germany. For China's urban middle class and rural poor the one relief is in inflation for fuel and food, the consumer price index rose 4% in October compared to 4.6% in September and down from a peak of 8.7% in February 2008. The spending will come in infrastructure including railways. Railways construction spending will be increased from 300 billion yuan in 2008 to 350 billion yuan and double to 600 billion yuan in 2009. This is expected to create 80,000 new jobs to replace jobs lost in the toys and furniture export sectors and other job losses. ...

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A study by Blanchard and Bernanke shows energy prices and supply chain constraints were key factors in creating the surge in inflation that happened in 2022. The Ukraine war played apart in raising energy prices . How much effect did president Biden's $1.6 trillion American Rescue Plan have on inflation? Bernanke and Blanchard say not what critics had suggested. Once energy prices were brought under control through the president's policies to $75 energy prices played less of a role in inflation. Supply chain effects also eased throughout 2022. The persistent effect remained the mismatch between supply and demand that is called The Great Resignation that came as a response from teachers, nurses, hospitality sector workers with low minimum wage on which it was hard to make a living. President Biden's payments to these workers gave them enough room to make a definite choice that they would not take the risks during the pandemic and the stress and opted for shifting to other jobs. Employers struggled to fill vacancies and raised wages in response. To reduce inflation the Fed opted to raise rates to slow the demand for goods and services in the economy which has led to a moderating of inflation from the high of 7% in 2022 to falling below 5% by April 2023. Fed chairman Powell's aggressive attitude to inflation was based on not letting an inflationary psychology set in, that could damage the interests of workers and families who had already suffered from the pandemic's effects. This is where we are today as the economy adjusts to the fight against climate change, investments in renewable energy and infrastructure, and efforts to reduce the deficit by president Biden in a way that reduces the widening gaps and social divisions in society.   ...

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Senator Kent Conrad, chairmanof the Budget Committee says "the next President will inherit a fiscal and economic mess of historic proportions. It will take years to dig our way out." This as the cost of war in Afghanistan is enlarging, the stimulus package is to be added to the $700 billion bailout plan and the help to homeowners facing foreclosure will come as the next President takes office in January. All of which in the consensus now in Congress and among the Presidential candidates will not come by raising taxes except in Obama's case on the highly paid over $200,000 a year and that too to pay for spending programs that will be additional for health care and infrastructure and education. So most if not all will come as deficit spending by other countries buying American Treasury's at 4% which for a $1 trillion borrowing costs $40 billion a year because of America's role as a safe haven.

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US president Biden's $2 trillion Families and Workers plan, for early childhood education, paid leave, healthcare and climate change investment, is coming up for a vote in Congress. Paid leave that also includes maternity leave and leave that would help women return to the workforce, has been added back to the bill. Community college aid was earlier removed from the package with resistance from private colleges that expect to lose tuition paying students, even though male students are falling dangerously behind in attending college without government support. The Biden administration is facing resistance from just a couple of Democratic Congressmen- about five led by a Congressman from New Jersey, and 2 Senators from Arizona and West Virginia- on community college government aid that helps young American men and women from the working class and on paid leave that helps women. Many Republicans have supported taking this action for renewal of America on serious issues that face the country, making it likely that these issues will only become more pressing in the next three years. Sometimes as is happening today some isolated or eccentric situations can block major legislation for the good of the country such as the makeup of a Congressional seat in New Jersey with large pockets of conservative Republicans who oppose spending, and conservative instincts of two Democratic senators from Arizona and West Virginia. This WSJ report looks at Biden's position that deterrence when filing tax returns will generate close to $400 billion and not $150 billion that the Congressional Budget Office says is its estimate. To accomplish this Biden plans to spend $80 billon in large investments to increase the resources of America's tax collecting agency. Much of this was never done and policies geared to where large corporations never paid their fair share of taxes. The first step was to prevent outshoring of headquarters to reduce taxes- and this was achieved in the first year of the Biden Administration with over 100 countries agreeing on a corporate minimium tax. In the same way president Biden now seeks to correct other flaws in the tax system so that much needed investments can be made by generating new revenue not just in infrastructure, but for renewal of America through renewal of support for women, children, and America's working classes. Much of that was badly neglected by different  administrations over the last three decades.     ...

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This report in the NYT looks at the support for the AfD stalled at about 11% nationwide but closer to twice that in East Germany where years of neglect have led to voters shifting to far right parties. The view is presented that there is a core hard right of 10%. Yet it ignores or prefers to overlook what happened in the east which provides the real clues to what happened, so that future policy could be designed to address social goals in a way that never happened in Germany. This is in line with developments in China where president Xi is addressing social goals after years of tech and infrastructure expansion that neglected rural areas and urban poor. It is in line also with the same action taken to address social goals in US president Biden's $3.5 trillion workers and families plan. Social Democrats under Mr. Scholz and a younger generation represented by the Greens have the same challenges facing them to come up with the plans to correct these problems in Germany and with a plan designed for the neglected eastern part of the country. Helmut Kohl pushed for reunification of Germany. With the collapse of the Berlin Wall the momentum was set for this to happen. Yet looking back over that period since 1990, German chancellors and administrations for three decades from both CDU and SPD have failed to invest and create opportunities in eastern part of Germany. It makes German reunification an empty concept looked at from outside. The previous administrations including Kohl and Merkel relied too much on market capitalism to do what it has been shown not capable of doing- tackling social goals and economic crises, much less  political storms such as creation of GDR following Soviet army entering Berlinin 1945. Much commentary on the issues in east Germany show people there left to themselves after mass migration out of the east to the west leaving older people and pensioners in the east, and a sense of being ignored or forgotten. US president Biden said today in ther UN General Assembly- "Our shared grief is a poignant reminder that our collective future will hinge on our ability to recognize our common humanity and to act together." And he went on to say the next ten years to 2030 "will quite literally determine our futures."  The Social Democrats under Scholz and the Greens under Baerbock and Habeck have to come up with plans and programs that will increase ease of living and opportunities for a thriving eastern part of Germany, after the failures of market capitalism in its unregulated form during the Merkel years and predecessor administrations. ...

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Moody's Investors Service estimates the cost of fuel subsidies to increase to 1.7 trillion rupees or $24.7 billion for the Indian government in the next fiscal year beginning April 1, 2013, up from 1.6 trillion rupees the prior year. This is the result of the rapid depreciation of the rupee in 2013. The rupee depreciated by 8% between Aug 25-Aug 28, and is now at 68 rupees to the dollar. A new Food Security bill that passed the lower house of parliament provides subsidies for grains to about 70% of the people, and will cost $20 billion, up from $16 billion for the prior year. Government borrowing costs are up. Th yield on 10 year bonds maturing in 2023 was at 9.44% on Aug. 21. The rupee depreciation is a result of the wide current account deficit of about 4.8% and India's dependence on foreign borrowing to finance the deficit. A pull back of foreign investors from emerging markets is happening after the U.S. Fed announced it was planning a winding down of its easy monetary policy and low interest rates. Because India imports 75% of its oil, the depreciation of the rupee will hurt government finances. The danger lies in what this does to the growth rate at a time when growth is alreeady slowing. In the current year ending March 31, the growth rate declined to 5% from 6.2% the prior year. A poll of 18 economists conducted by the WSJ found growh estimated to be 4.6% for the second quarter of 2013. India is the second most populous country in the world and faces huge needs for infrastructure and development, and needs to create millions of jobs for new graduates....

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Compared to chancellor Scholz Merz sets his goals and is clear about his goals. His active style is different from previous chancellors. His first meeting with Trump showed this personal style which is proving to be more effective than Merkel or Scholz. Merz had to wait for a long time in the private sector till Merkel retired to come back to politics. During Merkel's early years Merz challenged Merkel for leadership of the Christian Democrats party. Merkel's policy on migrants has proved to be a failure, and Merz is now in a position to take the CSU in a new direction closing the border and working closely with the US and Britain, Italy, on border enforcement. Merz is also unique and very different from the disinvestment period under Merkel which let German infrastructure deteriorate and fall apart, another failure of Merkel's years as chancellor. Merz's first action was to get close to a trillion dollars of new funding to rebuild defense and infrastructure over the next decade. Merz is head of a coalition with the SPD with SPD's leader Lars Klingbeil as finance minister. Scholz headed a coalition that was dysfunctional as the Free Democrats Lindner was opposed to investment in German economy from the outset. Under Merkel the Christian Democrats took no action to rebuild Germany, and were preoccupied with eurozone finances. ...