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A study done at the University of Wisconsin's Population Health Institute by health sciences professor, David Kindig and PhD candidate Erika Cheng, shows the impact of smoking, graduation rates, poor choices and availability of food, and incomes, in declining life spans of women in some parts of the U.S.

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A House budget bill passed in Texas would cut an already lean budget- because of years of prudent fiscal policies- by $23 billion from the current level of state and federal spending over the next 2 year budget cycle. This is a reduction of 12.3%. The budget makes large cuts in public education, healthcare for the poor, highways, prisons and state parks. It takes away full day preschool, cuts teacher incentive pay, and reduces scholarships for college students by two-thirds.

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UBS and Bank of America reach a settlement with Detroit before the city declared bankruptcy. The settlement was for interest rate swap contracts signed by Detroit officials in 2005, and settles the contracts for 75 cents on the dollar or $230 million. There is safe harbor for traders and banks in interest rate swaps or derivative contracts, so that the usual stay that blocks creditors from collecting debts does not operate. This kind of treatment for derivative contracts makes no logical sense in the context say experts. The swap contracts of 2005 were signed at a time the city took out a $1.4 billion variable interest rate loan to put into its pension funds, with the swaps as a hedge against rising interest rates. In fact Detroit is seeking a $350 million loan from Barclays Capital and it needs to resolve the swap for that loan. From this loan UBS and Bank of America get their $230 million leaving $120 million for streetlights, police and city services badly needed today. Public interest considerations of this kind were not considered by Congress when it made the rule for safe harbors universal in derivative contracts to reduce systemic risk of one financial institution dragging others into a systemic crisis. The safe harbor make it harder for a judge to say this thing smells and make attempts to change it. ...

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This leader in The Economist reviews an essay in the magazine's October 8-14th, 2016 edition by U.S. president Obama. In it Obama points to the unfinished tasks of his presidency and what comes next as tasks to be done for the U.S. economy. The Economist points out the problems in the 2016 election campaign where there is a lack of discussion of economic issues as a serious problem. Obama lists as priorities efforts to improve conditions of people left out in the recovery, reducing inequality, offering more job opportunities, and increasing productivity.

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One more area where the Obama administration has not acted decisively is the building of high seed rail networks. Spain has plans to invest $140 billion over next 10 years to develop a network of 6200 miles of high speed rail lines.So far the Obama administration has allocated $8 billion, and the whole issue is being put off for another 18 months. Department of Transportation has already received proposals for $100 billion of new high speed rail lines from 40 states.

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JP Morgan CEO Dimon, says the lack of enough worker training is hurting the U.S. with unemployment one or two percentage points because of this. The lack of enough training efforts by business and government to add technical skills to workers existing skills is resulting in many jobs going unfilled in manufacturing and other fields.

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Biden sees his plan for American workers and families put together in the $3.5 trillion spending package that covers child care, education, healthcare, services, climate change proposals, infrastructure building, as a way to show that democratic governments can work for the people. After two decades when American workers and families were largely put aside in the nation's priorities during a tech driven and capital markets driven expansion that benefited large corporations, America is returning to its core concept of government by the people, for the people, of the people. White House officials say this is to be seen even in the program he put forward in his upset victory many years ago for the US Senate from Delaware. Because economic strength of America depends on a strong middle class, and strong working class, strong families, and underpins the world leadership role of America, even Republicans and hesitant Democrats, cannot give in to the current situation of doing nothing or too little for workers and families which weakens America. And at a time when its leadership role in Asia and Latin America, Africa is sorely needed. The size of the package in $3.5 trillion is because too little was done in the past in the mistaken acceptance of Reagan policies of no government role in the economy- surrendering this role of guidance entirely to the capital markets driven from New York, London, and Silicon Valley. The rise of China today, and also of Japan and South Korea, and of India as it plans for 2030 shows that government guidance of the economy is needed in global competition. Trade entirely driven by capital markets, without a role for government to emphasize national priorities in spending can lead to disastrous results such as we see today where manufacturing even in critical fields such as healthcare, semiconductor driven technology, entire parts of the economic structure are ceded to China and supply chains outside the US. German elections are also leading in the same direction with Social Democrats emphasizing national priorities in child care, education, healthcare, and delivery of social services, building of infrastructure. And the Greens emphasizing climate change. Merkel in Germany and in the European Union, her predecessor Schroeder, pursued policies of no government role in emphasizing and articulating national priorities, in a way that past US presidents have done, resulting in the CDU falling to 20% support in the September German elections. Across all parts of the world, from India, China, to Europe and the US, the focus is on government voicing the national priorities  and allocating funding instead of capital markets driven from London, New York and Silicon Valley, or capital markets in Shanghai or Mumbai, as the pandemic runs into its second year. ...

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Pearlstein raises the question, are there business leaders who believe that what's good for America, is good for business, rather than the other way around. Google, like other technology companies, pays much less in taxes than the corporate tax rate suggests. Research by the Washington Post shows this to be 18%, not 35%, for 2009.

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EU leaders and proposals to limit tax avoidance by digital companies by requiring the companies to show the profits in the countries where they are made. This would require changing bilateral treaties. France is looking at proposals to tax companies by the number of clicks or user data. Large digital companies, including Apple and Google declare most of their European revenue in Ireland using legal loopholes in that country to shift profits to lower tax locations. A Senate report in the U.S. in May 2013 shows Apple using technicalities in Irish and U.S. laws to pay only a small amount in corporate taxes in four years 2009-2012 on $74 billion. Fredrik Reinfeldt, the prime minister of Sweden stated the argument for fairness in tax policy- "These companies ask for a lot of investment in infrastructure, in research and development, they want to have well educated staff members. Well, let's keep that together: Pay your taxes so we can afford all of these investments."

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The components in the 6.1% drop in GDP for 1st quarter 2009, from the prior quarter. See the all important graph that shows how things in the breakdown look, and how the economy is behaving, and how it might behave in the future. What is the impact of a10% drop in world trade? For the US which was abig importer, the last 2 quarters saw a shift in consumer buying habits, as economy became the norm, and frugality was in. Imports drop by 6.05%. But exports drop too, with fewer purchases of products the USA makes. THis drop was 4.06%. Consumer spending collapsed in the 4th quarter of 2008. A rebound ocurred in the 1st quarter 2009, as consumer confidence improved as aresult of strong government intervention through the $787 billion stimulus bill, and the new budget that funded priorities in health, education and energy, and supported local governments spending. Consumer spending went up by 1.5%. Residential investment went down by close to the same amount - 1.36%. What was happening in manufacturing capacity utilization. This dropped as inventories were run down, and the change in inventories was a drop of 2.79%. The feeling here is that as inventories were run down there is now the prospect of increasing production and capacity utilization. But unemployment and job losses are not figured into this, and the unknown impact of the new frugaility of the American consumer as it sets in in earnest. If consumer spending remains sluggish, then there is less prospect for increasing capacity utilization. Manufacturing capacity will either be reduced as plants close as in the auto industry, or it will remain unused. And the prospect of exports picking up the slack is remote. This gets one to the crux of the matter which is declining investment in buildings, and equipment. As businesses pull back and lay off employees, a process that will continue for many quarters into 2010 and beyond, with credit tight and demand sluggish at best, the prospect here is of large contribution to negative GDP numbers in the future. For 2009 1st quarter the decline in nonresidential investment was 4.68%, the largest component and the decisive part impacting jobs and production....

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The first budget of the Obama government makes a sharp swing away from decades of earlier policy, and puts America on a new direction focussed on priorities in education, health care for all, and energy. The 134 page doocument on the budget defines the governing principles and priorities of the new government. "This is the legacy that we inherit- a legacy of mismanagement and misplaced priorities, of missed opportunities and of deep, strutural problems ignored for too long," the document says. It declares that "government must lead" in contrast to Reagan's "government is not the solution, government is the problem." In contrast to "trickle down" policies of Reagan it proposes "trickle up" policies- shifting income from rich to the poor. It creates a $630 billion fund towards a national health insurance program built with the help of savings and cuts elsewhere. Government takes over most student lending, and dramatically expands Pell grants for poor college bound strudents, transforming it into something like Medicare that is automatic rather than approved each year by Congress. Businesses that emit carbon and heat trapping gases will have to purchase permits to do so starting in 2012. Hundreds of billions of dollars from these permits will pay for clean-energy technology and for tax credits for working couples. Income tax rates will rise for couples earning more than $250,000 beginning in 2011 and will have lower personal exemptions, lower itemized deductions, and higher capital gains tax rates. The estate tax will be preserved. Hedge fund and private equity managers wil have to pay income tax rates for that compensation as high as 39.6% after 2010, not the low 15% capital gains rate they pay now. The Defense Department would see a $20.4 billion boost or a 4% increase in 2010 over 2009, it will request an additional $75.5 billion in 2009 for the wars in Iraq and Afghanistan, and an additional $130 billion for 2010. The budget is for $3.6 trillion for 2009, and projects a deficit of $1.75 trillion for 2009, or 12.3% of GDP- a level see in 1942 when the US entered World War II. Under optimistic White House assumptions for a strong economic rebound, the deficit would drop to $533 billion by 2013....

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What does transformational liberalism mean? What does fairness mean? What does it mean to have unemployment insurance, to have health care, to have jobs, to open the door to the middle class for a college education. Is this transformational liberalism? Or is this "transformational liberalism" a part of a vocabulary of cliches that have lost meaning as the nation confronts job losses of the magnitude of 500,000 a month, and this is only the beginning. Much of the increased debt the nation is occurring is going to provide government help to financial institutions like the $177 billion that has gone to AIG so far, just one company, and there are the Citigroups and other companies like AIG. What does it mean to have "burden sharing," when the rest of the country is frightened, scared, losing jobs, losing savings, and at this juncture cliches may have lost meaning, as its those who profited most and got us into this crisis like the investment bankers and senior management of companies in industries like the mortgage industry, auto industry who will be paying their larger share not because of redistribution, but because they may be the ones who can most bear this burden wihtout great sacrifices like cutting down on necessities and basics. See the link to Countrywide's Kurland who plans to profit both by overselling mortgages and creating the tinder that started this fire, and now to profit by buying distressed properties at pennies on the dollar, with $200 million from Black Rock as an investor, and $200 million on stock he sold before the crisis. Is a Kurland who has not been subject to any regulatory action, or management of AIG, or Citigroup or GM or the other companies receiving federal money by the hundreds of billions of dollars about to ask the half amillion of unemployed and the others threatened with job loss each month, for "burden sharing"? Nobody wants to see any of this happen, what has happened, including the debt, but it has happened, and it was not engineered in the new budget or in the few weeks since early January 2009....

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The U.S. government has spent $18 billion on training and job-search programs, with 47 programs offering training for the year ending Sept. 2009, according to the Government Accountability Office. President Obama proposed spending $8 billion more over 3 years to train 2 million people for new jobs. In addition there are state and local programs which get federal funding. Lawrence Katz, a Harvard labor professor says the money is given out on a haphazard basis and does not have a good track record of matching the training to the job openings. Part of the problem is that the government leaves it to state unemployment offices to evaluate labor markets and help trainees decide on professions to prepare for. A better approach is now being take by getting employers to offer on-the-job training. This approach is being adopted by community colleges and the Labor Department to improve matching of skills training to job openings.

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