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Germany has 60.4 million people who can vote in the upcoming September 26 parliamentary elections. Of this more than half are over age 50 years. This is part of a demographic change in Germany with falling population, more deaths than births in the country. As a result German voting population is getting older and smaller, 1.3 million smaller this time than in the last election. In 1987 23% of voters were under age 30 years, in 2021 this is down to 15%. For older voters in 1987 26% of voters were over age 60 years, in 2021 this is up to 38%. Older voters also have higher turnout of about 81% compared to voters age 21 to 24 years at 67% turnout. Older voters had a strong party affiliation early in their life says one polling expert for Infratest. Older voters tend to vote mostly for SPD or CDU the two main parties. The far right and far left parties have support in East Germany's 12.5 million population out of 82.5 million in Germany. CDU gets its vote from workers with higher than median income, and SPD from voters at the median income. Greens are supported by higher income groups.   ...

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Germany's Bundestag parliament vote eases constitutional "debt brake" March 2025. CDU's Merz and the SPD join with Greens to provide the two thirds majority to remove a constitutional debt brake put in in the Merkel years. Germany's dilapidated infrastructure from rail to other transport and public facilities, to poor childcare are a sign of how the Merkel debt brake has hurt the German economy. Four years of the Greens SPD coalition government of Scholz were wasted when the SPD and Greens wanted investment in infrastructure starting in 2021 but included Lindner of the super cautious Free Democrats as Finance Minister who opposed spending and vetoed it every step of the way. The results can be seen in Frankfurt and other cities and in the underinvestment in Deutsche Bahn rail and all over the country. Merz of the CDU and the SPD and Greens finally fix this problem starting with removing the debt brake.  What happened to Lindner and Free Democrats? They did not make the threshold of 5% for representation in the German parliament, the Bundestag in Berlin. Lindner resigned for his failure. ...

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Policies of four term chancellor Angela Merkel and positions of SPD's Steinmeir, Schroeder, come under serious scrutiny following the Ukraine invasion with millions of refugees and attacks on civilian population. Their serious miscalculations are now seen in a different light of daily reports of the war and the devastation in Ukraine. Increasing Germany's dependence on energy supplies from Russia from 36% after annexation of Crimea to 55% today is seen as a serious error of chancellor Merkel by the German people, whose views are changing following the millions of refugees and new reports of attacks on civilian population in Ukraine.

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US inflation eases to 7.1% in November after the aggressive action by the US Fed under Jay Powell. The Labor Department reported that the CPI index was up 7.1% over a year ago. It peaked at 9.1% in June and was up 7.7% in October 2022. Gasoline prices which peaked at $5.26 a gallon in June are now at $3.50. Supply bottlenecks in June have also eased. Economists say there is still more room for inflation to fall as housing prices moderate and supply chains return to normal. A tight labor market and consumer purchases with higher wages have also fueled inflationary price increases.

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The dollar remains the dominant force in capital markets. It is strengthening after US central bank raised interest rates 8 times in 2021-2022 to about 5.25%. China is cutting interest rates as its economy with debt at about 290% of GDP is slowing, the EU increasing rates as it faces inflation fueled by price increases and some price gouging. In the US inflation is cut in half by Fed policy to 4% in May 2023, Biden's policies to help with the cost of living and restrain price gouging, and by supply chains working better than in 2021. The US looks the strongest of the lot.

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With 362 delegates out of 642 voting yes at a party convention in Bonn, the SPD now enters formal talks for a coalition government with the CDU under chancellor Merkel. The party's 440,000 members will also vote, with experts predicting a favorable vote. A new government could be in place by Easter 2018.

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Janet Yellen empasizes that she will provide "a great deal of continuity in the Fed's approach to monetary policy," in testimony before the U.S. Congress in Jan. 2014. She served as vice chairwoman with Fed chairman Bernanke, and she says helped formulate the current strategy. She pointed out the job reports with low job creation for Dec. 2013 and Jan. 2014 could be a result of recent bad weather and one should be careful not to jump to conclusions. Yellen says it is important to look beyond the unemployment rate to understand conditions in the labor market, especially people out of a job for more than 6 months, and people working parttime but prefer working full time, both numbers unusually high.

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The US central bank the Fed's Powell leaves interest rates unchanged July 30, 2025- as he waits to see what happens with inflation following tariffs action by DJT to level playing field with EU, Japan, China. A tariff of 15% is set in US Trade Agreements with Japan, EU and South Korea. Powell says the impact on US consumers will be minimal but not zero, with some effects expected even though EU, Japan and South Korea will not attempt to pass through the tariffs and risk the other benefits of trade access to the US market.

Overall both the European Union and the US have a good economy, with inflation at 2% and the the unemployment situation the best it has been in some decades near 6% in EU and near 4% in the US. 

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Conventional monetary policy is ineffective in a liquidity trap. At that point short term interest rates are at zero, and conventional monetary policy is ineffective at this zero bound. Unconventional policies such as buying long term Treasury bonds by the Federal Reserve may be adopted, but their effectiveness has not been proven. This is something the Fed is attempting to do in the U.S. after the 2008 financial crisis. This was tried in Japan in a deflationary situation and the results did not show conclusively that it works, because Japan remained at a borderline deflationary situation for years while this policy was implemented by the Bank of Japan. The $600 billion bond buying program of the U.S. Fed in late 2010, known as QE II, was implemented to reduce the chance of deflation taking hold and to stimulate growth. Krugman and others argue for the need of fiscal policy and government spending to step in to support the unconventional monetary policy. This becomes more difficult to do with the increasing budget deficit the U.S. is facing in 2011....

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The CDU gets 36% of the vote in the state of Saxony-Anhalt in east Germany. The FDP gets 7%. This was a result that surprised the CDU as the AfD party was polling well before the election, The result gives the ruling CDU party hope of doing better in east Germany where it had lost votes to the right wing AfD party. This was a crucial election ahead of German elections for a new government to replace Merkel. The Greens are polling well nationally.

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Results in the Saarland election show the AfD party with only 6.2% of the vote. The CDU is well ahead of the Social Democrats. This result shows that the support for the AfD is strongest in the east. With the refugee crisis not as big an issue as it was in 2016, and the larger effort put forward in push back by CDU/CSU and SPD in the western part of Germany, the AfD sees its support declining from the levels it had in 2016.

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Germany's defense chief Carsten Breuer talks with the BBC ahead of a NATO summit at the Hague, Netherlands inJune 2025. He says Russia is producing tanks and ammunition at a rapid rate that suggest some of it is going into stocks, which may be a threat to Baltic region. Under the SPD government with the Greens of chancellor Scholz Boris Pistorius of SPD was Defense Minister and was favored as candidate for chancellor. SPD true to its origins under Willy Bradt sought  German good relations with Russia even after the Ukraine war and limited its scope. Under CDU chancellor Merz note that Boris Pistorius is the only SPD minister from the Scholz government to remain, and in the position of Defense Minister. As the US deescalates with Russia for a larger role in Asia-Pacific Germany takes on a bigger defense role in Europe, yet with a desire for a swift end to the Ukraine conflict and a settlement that secures independence of Eastern European states.  ...

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This Wall Street Journal editorial on August 18, 2011, says Texas Governor and U.S. presidential candidate Rick Perry made a poor choice of words when he called the Fed chairman's policies "treacherous or treasonous." While admonishing Rick Perry for the use of the wrong words, it says Perry has done a public service to draw public attention to Fed policies. These policies of the U.S. Federal Reserve- Bernanke's and Greenspan's- which allowed the tech and mortgage bubbles to develop and then engaged in loose monetary policies to correct its errors over a ten year period since 2000, should be the subject of debate. Current monetary easing has also added a large element of inflation, and some experts such as Kenneth Rogoff are calling for inflationary levels of 4-6%. Critics of Fed policy such as Allan Meltzer and some Fed governors of regional banks, including Hoenig of the Kansas City Fed, say the Fed has not given enough thought to the long term consequences of its actions. The U.S. needs to address these major changes in policy as serious issues with the public and presidential candidates engaged in the debate. They have everything to do with a vision of a future America....

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Paul Krugman points out in the NYT that September 2022 high inflation numbers for core inflation excluding energy and food of 6.6% on annualized basis, is still not a good way to measure actual inflation. This is because housing costs as measured by the core inflation index used by the Labor Department are represented by housing rental costs. The rental costs have a time lag in this index and after a sharp spike are now cooling off. Add to this slowing economies and recessions in European economies and the situation suggests that the economy and inflation may be moderating more than expected. Additional factors are that the effects of sharp prior 2 increases in interest rates by the Fed of 0.75% and a third of 0.75% expected soon, are still not fully realized in the economy. This view was also expressed by experts in the WSJ. It was widely perceived that the high inflation that we are seeing is a result of temporary factors such as the war in Ukraine, food and oil supply constraints, supply chain bottlenecks, new adjustments to manufacturing at home after covid. As these factors ease and after the Fed's action to raise interest rates, slowing economies in Europe adjusting to climate change actions,  the moderating effects on the economy of the costs in switching to renewable energy also a factor, this high inflation has prospects of moderating. The successful switch to renewables particularly solar, and better agricultural practices, could set along term trajectory of moderate inflation in costs of energy and food supplies.  ...

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Germany scraps 3 year path to German citizenship replaces it with 5 years and B+ in German. The change in the law by SPD coalition to 3 year path was criticized by CDU as "turbo path." Dual citizenship will be retained. The new law for 5 year path to citizenship is the policy of the new government the CDU-SPD coalition led by CDU's Merz. Those non citizens who pose a risk to the democratic order will be sent back to their home countries.

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Applebaum talks to two researchers at the University of Chicago and Princeton, Prof. Sufi and Prof. Mian, on the record of U.S. president Obama and Fed chairman Bernanke in helping homeowners facing foreclosure and underwater borrowers, comparing that record with their record in helping the banks. The issue is relevant as the policy and handling of homeowners had to be part of an overall effective plan for recovery in the U.S. economy, because ultimately without the U.S. consumer any recovery would be weak in the long run- a situation the U.S. faces in early 2014. The response to the issue of irresponsible homeowners borrowing beyond the limit without an equally robust response to irresponsible bank management that allowed wildly excessive leveraging of assets, and successful aggressive lobbying by banks in a shortsighted policy of going through with a wave of foreclosures; besides creating questions of fairness and equitable handling of the problem, also had major ramifications for the future of the U.S. and global economic growth. Here Christina Romer and other administration advisors say Bernanke was right in tackling the problem from the perspective of the banks needing to be recapitalized. Thoughtful advisors looking at the entire problem, Martin Feldstein and Sheila Bair strongly pushed for providing the same help to homeowners without getting caught up in the issue of who was responsible home buyers or the banks, and looking at the interests of the U.S. economy and the U.S. people. Proposals by Feldstein and Bair were equally robust in helping banks as they were in helping homeowners, only the banks understood their interests narrowly and had more access to policymakers in the Bush, as well as the Obama administration, Paulson as well as Geithner. This leaves us with the ultimate irony of the Obama administration pushing for the minimum wage, even to the point of electoral posture, when lasting damage had been inflicted on homeowners from the weaker portions of America's middle class by a policy that went against what two respected financial and economic experts from the Reagan period, Sheila and Bair had strongly advocated. See links and groups on Feldstein and Bair. Applebaum has followed most aspects of this problem closely and continues to provide exceptional reporting including the piece on the thinking of new Fed chairman, Janet Yellen. Private enterprise rules that require management at banks just as for other companies to take responsibility for failures, and be replaced with new management, was largely avoided leading to a fundamental failure in how a free market economy such as the U.S. and western European economies are supposed to function. Rules aggressively pushed by Geithner's mentor Treasury Secretary Rubin for a vigorous cleanup at banks in South Korea during a similiar situation in 1997, were not followed in any way here, also setting wrong precedents for the long run. ...

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U.S. Fed governor, Daniel Tarullo, said in a recent speech that U.S. financial institutions could be required to meet stronger capital requirements than the Basel international standards. The Fed is considering requiring the riskiest financial institutions to put aside 8.4% to 14% of capital. The Basel standards require institutions to gradually increase the capital cushions to 7% by 2019 from about 2% at this time. Less risky institutions would would have a smaller increase over the Basel standards- about 20% compared to the 100% increase over Basel for the riskiest institutions. Speaking at the Peterson Institute for International Economics, Tarullo said- "The regulatory structure ...should discourage systemically consequential growth or mergers unless the benefits to society are clearly significant." Tarullo said no one wants to see another TARP. Banks would have to build up their capital reserves using common equity and not other forms of less reliable capital such as contingent capital, where banks convert debt instruments into equity in an emergency. Tarullo emphasized the need for the U.S. to move beyond the Basel requirements, known as Basel III, because they are narrowly designed for individual institutions and do not adequately address the systemic risk. When there is a high degree of risk correlation among many actors in fast moving markets additional risks are created which require stronger capital standards. Tarullo said systemically important institutions have "no incentive to carry enough capital to reduce the chances of such systemic losses."...

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About half of the people in a FES/ Bonn University report say they are fairly or very satisfied with German democracy. Skepticism about democracy is highest among people with less education and income. This is why the author of the study Handrych is concerned about social cohesion. As in the US with Biden the Greens Habeck and SPD's Scholz have to meet the challenge of social cohesion, a challenge put up by our times and the economic changes of the last few decades with the inequality of wealth. And the need for governance to serve the interests of all the people, not just a few that do well.

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The $42 billion withdrawal on Thursday March 9 from SVB bank is the largest one day withdrawal in US banking history, over twice that of Washington Mutual when it collapsed in 2008, says this report in the WSJ. By concentrating on Silicon Valley, SVB bank went on a growth spree, but its concentration in the Valley proved to be its undoing. The optimism turned awry in 2021 with the decline in NASDAQ of 33%, and tech companies facing layoffs with more scrutiny from the government and the US Congress, efforts to breakup monopolies, the Fed chairman Powell's and president Biden's efforts to focus on the cost of living crisis.

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US public companies, manufacturers and retailers that make up more than half of the S&P 500 index, came out with strong sales per share of 24% increase in 2022 over 2019. This means slower growth is expected ahead in 2023, says Justin Lahart in the WSJ.  The shift to consuming more services such as dentist visits and tourism from buying washing machines and appliances will mean slower sales for these large companies that are manufacturers and retailers. Fed chairman Jay Powell's higher interest rates will also limit growth in sales in 2023. Overall the US economy may barely skirt a recession, and this depends on which forecaster one talks to.

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Something that Bernanke has studied for adecade and has spent time preparing for. He took the step yesterday to proceed with a $300 billion purchase of Treasurys by the Fed. The idea is to reduce long term borrrowing rates on consumer loans to corporate bonds that are benchmarked to Treasury bonds. By reducing the yields on Treasurys the Fed hopes to keep borrowing rates lower, now that it is clear from the jobless numbers of 500,000-600,000 a month that slack in manufacturing capacity will keep inflation down and risk deflation. The Fed will purchase Treasurys of 2 to 10 years maturity. THe Fed also increased its ceiling on purchases of mortgage backed securites guaranteed by Fannie and Freddie to $1.25 trillion from $500 billion previously laid out. So far Fed has purchased $69 billion of mortgage backed securities and committed to buying $148 billion more. It will increase the amount of Fannie and Freddie debt that it buys to $200 billion from $100 billion. So far to March 11, it has purchased $48 billion of their debt....