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Shipping and freight statistics show an increase of shipments from Mexico. Trains and truck shipments from Mexico to the U.S. increased by 8.7% by weight in the first 11 months of 2011 compared to the prior year. By comparison shipping containers entering the ports of Los Angeles and Long Beach went down by 0.2% in 2011. Mexico stands to benefit from the shift in dynamics as manufacturing costs in China increase with labor constraints, higher wages, higher commercial land prices and recent Asian supply chain issues making firms wary of unanticipated problems. This is expected to benefit the U.S. with the return of some manufacturig jobs and a serious rethink of outsourcing. Because of highly automated factories and advanced technologies the manufacturing process requires fewer and more skilled operators, reducing the labor component of costs. Carlisle Companies CEO, David Roberts says he is expanding tire manufacturing plants in Tennessee. He says he can make tires as cheaply or cheaper in the U.S than in China. This has serious implications as the U.S. gets down to rebuilding and renewal of its manufacturing industry....

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Nocera looks at the lack of efforts to help homeowners under water in the Obama administration. Sheila Bair comments on Geithner's role, as Geithner's book "Stress Test" provides little detail on how the Obama administration addressed the issue. A story by Dougherty in the WSJ on April 20, 2014, points out that about 10 million households in America are underwater in 2014, and another 10 million households have only 20% equity in their homes. Unemployment statistics in the same issue of the WSJ show 7 million people taking parttime jobs because they cannot find work. These households are critical for consumer spending to support growth. The weak economic recovery could very well be one of the results of poor policy decisions by the Obama administration including this one, when other alternatives proposed by Sheila Bair and Martin Feldstein were offered repeatedly in 2009-2010. Here Nocera documents the efforts by Senator Durbin to give homeowners rights to go to bankruptcy court to provide ways to negotiate ways out of foreclosure....

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John Lewis, is the last surviving speaker of the March on Washington in 1963, when Martin Luther King gave his historic speech. Here he describes how Martin Luther King would see today's America. Foremost he points out is that MLK would want to see justice not just as racial justice, but justice in a broader sense that says something about the dignity and value of human beings. And this means, says Lewis, the president getting away from advisers and polls, and talking to ordinary people. It means focussing on jobs, the unemployed and people facing foreclosure, and seniors struggling on limited incomes. He calls for a "freedom budget" that would pool resources for infrastructure and investments that would create a better environment for people to live in.

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Republican voter sentiment in Springfield, Ohio. Warren Davidson is running for former House Speaker Boehner's seat in this Congressional district in Ohio with the support of Tea Party activists. The median income in the city is $31,635, $15,000 less than the Ohio median. The population has declined from 80,000 in the sixties to less than 60,000, according to Census Bureau. Only about 15% of the Springfield population has a college degree compared to 30% in the U.S. Speaker Boehner had a small group of loyalists and tight control of the Republican party in his district, leading to charges that he was too close to the establishment and business. Trump has support from Republican voters who feel the party has drifted away from them.

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The Journal editorial title suggests that Greece chose economic decline. It puts the responsibility for this choice on one political party that lied about its fiscal position, and another party that failed to take strong action. The government unions were uncooperative and resisted making changes. Making matters worse was policy from the EU that misread the Greece situation as a liquidity problem, and not as a solvency problem considering the huge debt Greece has piled up. And austerity measures pushed by the EU are doing little for growth- leading to an acceleration in the economic decline in recent months.

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This New York Times editorial says a smaller Wall Street and growing jobs in other fields will be good for New York as well as good for the country. It says New York politicians should focus on finding new ways for New York to broaden its tax base and get new businesses and new opportunites in fields such as media, advertising, entertainment, health care and tourism. Especially welcome are initiatives such as the science and tech campus of Cornell University promoted by Mayor Bloomberg. Tighter financial rules and higher capital requirements are good for the country and for New York the editorial emphasizes, because they help control reckless banking practices that destroy capital and opportunities for growth elsewhere in the economy. It points to Kevin Rose's Nov. 21, 2011 account in the Times showing a healthy culture shift in New York and the country with the status jobs being seen not at Goldman Sachs but at Google, Apple and Facebook. Rose's account shows that in the last 3 years the number of Wall Street employees of ages 20-34 declined by 25%....

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Wallsten describes the tense and now frayed relationship between Obama and immigration groups and the way this has evolved from idealism to frustration to mere coexistence amid loss of faith. Obama's frustration expressed in words such as "I am not a king." And the immigration groups voicing their concerns about Obama's loss of credibility, as minorities especially Hispanics have fared poorly during his adminsitration, hit by rising deportations, foreclosures and the impact of high unemployment in construction and other sectors.

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523 European banks borrowed 489 billion euros from the European Central Bank on Dec. 21, 2011, under the newly created Long Term Financing Operation of the ECB. This is designed to meet the financing needs of European banks which are shutoff from normal financing of selling unsecured bonds to private investors because of market anxiety. Much of this is for replacing other outstanding ECB loans, with analysts estimating about 190 billion euros of new liquidity being injected into the banking system. This also has the effect of reducing the borrowing rates for government bonds. In Spain the government sold 5.6 billion euros of government bonds at an auction on Dec. 20, 2011, with the interest rates dropping from 5.7% a month earlier to 1.7%. Small and midsize banks in Spain helped surging demand by buying the bonds to use as collateral for three year loans from the ECB at 1%.

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Simon Nixon points out that most of the 490 billion in euros borrowed by European banks under the Long Term Refinancing Operation of the ECB in Dec. 2011 is for rolling over maturing debt, rather than buying of government bonds. European banks financing needs based on figures from Barclay's Capital are over 300 billion euros for the 1st quarter of 2012. This suggests huge demand for the Long Term Financing Operation in the next quarter. For Spain and Italy the newly created lending facility should lead to higher bond buying by small and midsized Spanish banks and Italian banks, as this will boost their profitability. Spanish bonds yield 5% and Italian bonds yield 6.5% and loans from the ECB using the bonds as collateral are available at 1% for three years, which makes this an opportunity for these banks to boost profitability. The proportion of government bonds of Spain of Spanish banks bank assets is 7% and the figure for Italian banks is 9%. Nixon says an increase of this ratio by three percentage points by Spanish banks would created additional demand for Spanish government bonds of 45 billion euros, which is a third of the issuance for 2012....

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Chandrasekeran looks back on the troop surge ordered by President Obama on the advice of General Petraeus and General McChrystal in Afghanistan, and the results in Afghanistan as the U.S. withdraws troops in 2012-2013.

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Italy's prime minister, Monti, says he will submit his "irrevocable" resignation, after about 1 year in office, following the withdrawal of support from Berlusconi's People of Liberty party. He told president Giorgio Napolitano he would make an effort to pass the budget and a financial stability law to defer "the consequences of a government crisis" before turning in his resignation.

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A study by the National Employment Law Project shows most of the job creation in the economic recovery to 2014 in the U.S. is replacing the better paying jobs with lower paying jobs in fast food retail and similiar low paying industries.

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Seib points out why the current political landscape with the popularity of Trump and Sanders reflects demographic, economc and social changes in America compared to when Geroge H.W. Bush won the election in 1988 and Bill Clinton won in 1992. The Republican party is more populist, with older Americans, more Southern and conservative, making it harder for Jeb Bush or Wall Street backed candidates. The Democratic Party more liberal, more popular on both the east and west coast of the U.S., with younger Americans, diverse demographic groups, making it harder for Hillary Clinton as an establishment candidate. A Journal/NBC poll of Oct. 2015 shows 28% of Republicans describing their views as very conservative, and 26% of Democrats saying they are very liberal. Yet there is another aspect that will show up once the primaries are over. And this is the steady group of somewhat conservative and moderate combined in the Republican Party of 64%, and the steady group of somewhat liberal and moderate in the Democratic Party of 62% in the 2015 Journal/NBC poll. The moderates are up from 26% in the above 1990 poll to 31% in the 2015 poll for the Republican Party, and from 26% to 33% in the Democratic Party. So that one sees about a quarter of people polled in each party pushing for fringe views and a countervailing trend for moderate or close to moderate views with about two thirds support in the 2015 Journal/NBC poll for each party....

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Krugman is critical of ECB president Trichet's decision to raise interest rates in 2010, because of the way it affects Spain, Italy, and Portugal. Increase in interest rates by the ECB affect the entire eurozone and this means, he points out, that inflation in Germany would be extremely low -about 1% for the next five years- and the result being that inflation would be much lower in debtor countries like Spain. A decrease in interest rates with inflation at 3-4 % in Germany would be better for the debtor countries (Spain, Italy, Portugal, Ireland) as this would enable them to cut prices and costs relative to Germany and other creditor countries. The first step taken by the new ECB president, Mario Draghi, was a small increase in interest rates. Krugman asks if the private demand is affected negatively by the end of a debt financed boom in the debtor countries, and austerity programs reduce any growth in the public sector, then where are the new jobs supposed to come from? A policy that reduces the prices of the products of debtor countries relative to creditor countries like Germany- so that exports can generate necessary growth- is needed says Krugman. ...

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Senate Foreign Relations Committee chairman's view of Afghnistan differs significantly from New York Times correspondent Filkins understanding from years of reporting going back about a decade. Filkins sees the complexities of Pastun country inside Afghnistan and Pakistan and the military and ISI's involvement, and other correspondents have pointed to the narcotics trade and corruption. Kerry's simplistic view is that the Taliban do not enjoy much support, when actually Americans are seen on the ground as foreign occupiers. These correspondents in the field point to this as an everpresent danger, which would tilt support to those fighting foreigners, with nationalist and Muslim sentiment prevailing over everything else. And Kerry appears to be too willing to dismiss allegations of narcotics involvement of the Karzai administration with the "show me" comment. For critics of the Bush administration this is simply astounding, when so much is at stake. Does patient mean digging in one's heels slowly? But that is how the Vietnam intervention ran into trouble, without public sentiment in support of the plans....

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An indepth look at Mexico, its assets, its huge potential and what is holding Mexico back. It ranks much higher than Brazil in many respects- higher investment as a fraction of its GDP, technical education, an easier place to do business, less regulation, better management talent, more industrialized. In 2010 Mexico had $400 billion of business with the U.S. With rising Chinese wages Mexico is an attractive place for foreign investment, with a hardworking and educated workforce. Mexico suffered badly during the 2008 recession in the U.S. It is trying to reduce its dependence on exports to the U.S in key areas such as the automotive industry. Exports to the U.S. by the automotive industry are now 65% of the total, and the auto industry association in Mexico is working to bring this figure to 50% by exporting to Latin America and Europe. Economic growth was 5.4% in 2010, and expected to be 4-5% in 2011. Drug violence may have reduced the growth by one percentage point according to some estimates. The think tank, Mexican Institute for Competitiveness, estimates that economic growth would be 2.5% percentage points higher if labor market and competition laws are changed, and the oil industry is opened up to foreign investment as happened in Brazil. A study by OECD and the Federal Competition Commission (CFC) of Mexico has shown that 31% of Mexican household spending goes to products operating in high price monopolistic or oligopolistic markets. The bottom ten percent spend even higher proportion of incomes, around 38%, for products supplied in such markets. This includes pharmaceuticals, airline travel, banking, and electricity. Taking on these cartels is a difficult task. The CFC is beginning to take the first steps in this direction, in what will be a long road to fair prices for Mexican consumers. Banking was opened to Wal-Mart. The collapse of Mexicana was an opportunity to auction landing slots to other airlines. An auction system has been developed by CFC for drugs. A new competition law sets penalties for collusion in pricing, with upto 10 years in jail. And Carlos Slim's telephone monopoly was fined $1 billion for its telecom monopoly practices. In 2009 the Calderon government shut down Luz y Fuerza, a state electricity company costing the governmment $3 billion in subsidies for an highly inefficient operation. ...

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Systemic risks from "too big to fail" and the pushback on capital reserve requirements that leave banks with lower reserves. Ewing describes the role of the president of the Swiss Central Bank, Mr Hildebrand, in setting rules for higher capital reserves for Swiss banks than that of other countries and the pushback from the banks resisting the new regulations. "He will never find another job in Switzerland," a Swiss newspaper Der Sonntag quoted one banker saying this about Mr. Hildebrand. Losses at Swiss bank UBS during the financial crisis and the $2 billion loss at a UBS trading desk in 2011 have created a new awareness of systemic risk at banks. During the financial crisis banks used an optimistic estimate of "risk weighted assets" which led to insufficient capital reserves in a crisis even as the banks were shown to be well capitalized. A sense that banks in Europe and the U.S. will continue to have insufficient capital reserves at 3-4% of assets under new rules and with the longer phase in times for the new Basel III regulations of reserves at 7% of assets to after 2016....

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Obama's comments during a visit to Greece about the challenges facing multiracial and multicultural societies such as the U.S. and the people left behind through globalization. He says "we are going to have to guard against a rise in a crude sort of nationalism or ethnic identity or tribalism that is built around an "us" and a "them."  Obama also referred to a global elite "that seems to live by a different set of rules, such as being able to avoid taxes," which he said "fuels a feeling that globalization only benefits those at the top," and leads to a push back from people who feel they are losing control over their future." The problem for workers is that fewer and fewer workers are needed in todays advanced automated factories and manufacturing moves across borders leading to anxiety. The president may have realized the extent of the damage only in the closing days of the campaign in 2016, because of his support for trade agreements without talking in this manner about the lives of workers.  ...

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Local customs, tradition and history of development play a part in each region. This is the message from Islamist politicians who want to bridge the differences with the USA in the northwest frontier province of Pakistan. They want to keep some of their Islamic ways of life and still work with the US. These Islamic organizations are working to reduce the violence in the region and promote democratic discourse and electoral representation. This is happening amid widespread mistrust of the U.S. of all Islamist politicians. There are negative perceptions about things Western which are not automatically accepted in these highly tradition bound areas of Pakistan, especially the Afghanistan border regions. Some kind of rapprocement could bring peace to the region and cool growth of militants. Is there a basic misunderstanding of the area and are their other more gradual ways of bringing these areas into the mainstream. Of modernizing these societies over time so they gradually accept women's rights, education and development as opposed to the sudden onset of change. One sign - these areas need hospitals, they need roads and there is no disagreement about this. Once they see the benefits of development and militancy drops then it s easier for them to understand the benefits of schools for girls, women's rights, and education and all other development. Its like the American South trying to baccept negro rights after years of blatant racism, took some time but now some of the southern states can't even be recognized from what they used to be in their perception of black people....

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John Taylor looks one step ahead of the March 2012 Greece bailout and sets up the most plausible scenario for the future. He says the risks of contagion were always exaggerated from the beginning- a planned default or restructuring of debt such as happened in Argentina in 2001, does not have the contagion risks associated with a chaotic and unplanned default as in Russia in 1998. Predicability in policy makes a huge difference, says Taylor. The European banks which stood to lose from writedowns exaggerated the fears of contagion- a process that always occurs for people who are adversely affected by writedowns- resulting in top officials in the European Union delaying the unavoidable serious restructuring. It was not until Chancellor Merkel handed Charles Dallara, who negotiated for the European banks, a note stating a demand for 50% bondholder writedown, on October 27, 2011, at EU headquarters in Brussels, did any serious writedown of debt begin. Merkel told Dallara: "this is my last offer." The July 2011 summit by contrast had only a 10% bondholder writedown in the agreement, when insolvency not illiquidity was the real issue. Walker Forelle and Meichtry, give a detailed account of what happened in the Wall Street Journal, Dec. 30, 2011. The important thing for Greece, says Taylor, is for what the IMF calls "growth enhancing structural reforms" - greater reliance on private markets, incentives, rule of law. He says this bailout won't work because IMF growth forecasts do not reflect the rapid shrinking of the Greek economy. Antonis Samaras, leader of the major opposition party, is in favor of pro-growth measures and has stated his desire to change the agreement. The 130 billion euro bailout provides 90 billion euros for recapitalizing Greece's banks, and financing the budget. This puts Greece in a situation where the political leaders win voter support by discarding the conditions from the Northern EU nations and come with a plan that is better suited for Greece. The EU in this scenario would cut off further bailout funds to Greece. Taylor sees this as the better outcome for Greece than the current situation, which leaves Greece no hope for growth, and also for the EU by getting out of bailouts that have little prospect of working. It would be difficult but doable for Greece says Taylor, because interest payments would be low and Greek banks would be recapitalized after the current March 2012 bailout. ...

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Mark Landler's interview with Hussain Haqqani in Oct. 2013 provides insights into the misperceptions on both sides of the U.S.-Pakistan relationship since 1947. Particularly the way Pakistan cannot shake free from seeing everything through the prism of India. He points out that Ambassador Holbrooke had a forward looking approach to the South Asian region, but failed to get the support of president Obama and the weak leadership of president Zardari, resulting in a squandered opportunity for the region to look beyond the twentieth century's conflicts towards a brighter future.