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A new West Coast Model is emerging with ballot measures in the states of Washington, California and Oregon. The model is to make up for decades of faulty income distribution which favored tech communities in west coast states leaving behind people from minority communities and the working class outside tech hubs such as San Francisco, San Jose and Seattle. During this period budgets for education and healthcare, social services and essential infrastructure suffered as budgets were squeezed for local governments. Minimum wage also lagged behind and communities struggled to keep up. Washington votes for a ballot measure that raises the minimum wage to $13.25 statewide and mandate paid sick leave for workers. In California a ballot measure makes permanent an income tax surcharge on millionaires to use these funds for education. In Oregon measure 97 places a gross receipts tax on corporations with annual sales in Oregon over $25 million, raising $3 billion a year for schools, health care and other programs. The California and Washington measures are likely to pass, Oregon uncertain, say experts. And even in Oregon supporters have learned from the experience to put forward new proposals on the ballot. The Washington measure is supported by Nick Hanauer, and Zach Silk, president of Civic Ventures in Seattle, who say it is essential to put more money in workers wages to increase growth and to bring better lives outside the tech hub areas. Most of the tech booms of the last two decades have not touched the areas outside tech hub metropolitan areas. The conservative approach adopted in Louisiana and Kansas of reducing taxes first and then when holes in state budgets developed to cut education, health and other service expenditures has not worked, and it has led to the backlash in the form of the new West Coast Model, which is expected to be brought up in other states in the east and midwest. The tech hub areas have grown with the boom in tech but this has largely ignored the rural areas, communities just outside of the tech cities, and led to uneven and distorted growth shortchanging the working class and the middle class, and hurting investment in education and healthcare across each state. Bill Whalen, a research fellow at Stanford University's Hoover Institution conservative think tank ,says that its hard to deny that the balanced growth for all communities across the state has lagged far behind as the tech booms boosted growth in the economies of California, Oregon and Washington. An article in the German online site Zeit on Silicon Valley described this vividly showing how this can happen in communities sitting side by side in the San Jose area, with minority Hispanic communities and working class communties seeing very little of the benefits of growth. ...

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This WSJ editorial points to the median income levels for 2014 being 6.5% below the level in 2007, median income level declining in 2011 and 2012, stagnant in 2014, according to the Census Bureau, as a reason why there is so much economic anxiety for average Americans. The appeal of Sanders and Trump reflects this anxiety and anti-establishment feeling. The official poverty rate at 14.8%, means 46.7 million Americans are below the poverty line. About 34.5% of the people experienced 2 or more months below the poverty line in 2009-2012, showing how it is hitting the middle class.

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A new report on American driving habits by Samantha Gross and Aaron Brady of Cambridge Energy Associates shows that finally the gasoline price increases are beginning to bite the consumer and American drivers are changing their habits. After increasing from about2.5 trillion miles of total vehicle miles travelled by Americans in 1998 to about 3.0 trillion miles in 2007 the last 6 months are showing a downward trend for the first time. In the late 1970's and early 1980's something similar happened with a deep recession, rising gasoline prices and improved fuel efficiency standards, during this period gasoline consumption declined by 12 % accordingt o CEA. What is different now? For one thing the environmental issues are a big factor now and they take a new meaning as developing countries like India China Brazil and Rusia as well as other countries with much larger numbers of people than the US and Europe are now part of the car buying and electricity using peoples of the world. Its impossible both for the environment and for resource supplies to meet the needs of billions of new people joining the global economy and western ways of living without doing something radically different. And he problem is immediate as China becomes the second largest car buying country and India is not far behind with an explosion in Nano sales expected in the next few years, and the huge demands on electricity in these countries meaning burning huge amounts of coal to generate this electricity and create global environmental problems. All this makes the 70's and early eighties period remotely relevant. We are looking at something hugely different and 21st century defining now as its clear fuel has to be conserved and resources shared between the western world and the developing world, and technology moved forward quickly to meet the needs of a new world of Asia, Africa, Europe and the Americas all bundled into one both by the global ecoomy and the way business operates and by the needs of people everywhere. And the media and public perceptions may be just catching up to these changes which are already taking place on the lands and under the feet of millions of people around the world. Some clues to what might have happened. Americans spent 4.5% of their after tax income on transportation fuels in 1981 according to Global Insight, a forecasting firm, and this went down to 1.9% in 1998, and is back up to 4% now in 2008. In California and more affluent areas of the country where the incomes are higher and gasoline prices are higher over 4% is spent on transportation fuels, whereas in areas of Alabama and Mississippi in the poorest areas where gasoline is less expensive this is over 16% according to the New York Times interactive graphic. During this period 1998 to 2008 demand increased for gasoline, in terms of the number of miles driven went up by 25% from 2.5 trillion miles driven to 3.0 trillion miles driven, and the sales of large pickup trucks and SUV's soared to make them the largest number of vehicles sold each year. At 1.9% of after tax income nationally, transportation fuels were cheap and consumers reacted rationally by splurging on gasoline in the USA. As a sobering note to all this sign of improvement in conservation of fuel the miles driven are still at about 3.0 trillion miles the high reached last year 2007. It will take a lag of a couple of years before a changing fleet to smaller vehicles and more fuel efficient vehicles and better driving habits and conserving fuel habits to make itself felt in transportation fuel usage across the USA and this requires prices at least at these levels to make the change seen as necessary to meet global needs and global environment....

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Some startling statistics on U.S. wages and incomes and the increase of part-time workers, by the publisher of U.S. News and World Report, Mortimer Zuckerman. He cites the Pew Research Center reports that show one third of Americans identifying themeselves as lower class or lower middle class compared to one quarter before 2008. This affects social mobility with the increasing gaps in incomes, education and social behaviour acting to reinforce each other and leading to even lower future mobility. Industries that are showing growth are in low wage occupations. The Bureau of Labor Statistics shows growth in future in industries noted for low wage part time work- health care, social assistance and retail, with some jobs lacking minimum wage and overtime protections. Revealing in this respect is that in the last 2 years fully 43% of net employment growth is in the 1.7 million jobs added in low wage work in food service, retail and employment services industries. The number of Americans working full time declined by 5.9 million since Sept 2007, part time workers increased by 2.6 million. The effects of higher part time workers and job recovery predominantly in lower wage industries is likely to affect consumer spending and slow growth....

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Zweig points out that P/E multiples fall quickly in the midst of higher uncertainty. Benjamin Graham's "cyclically adjusted" P/E refined by Yale economist Robert Shiller smooths out the top and bottoms of the market by averaging the past 10 years of earnings and incorporating effects of inflation. This "cyclically adjusted" P/E for the U.S. market for the last 50 years is 19.5. The P/E for the market when the S&P 500 was at 1325 in late July 2011 was 22.9, and at the low in the first week of August 2011 of 1167 was 20.2. With the higher uncertainty- as for instance Bank of New York Mellon charging clients to hold cash- the P/E multiples are in a different territory. The P/E dropped to 13.3 in March 2009 after the financial crisis of 2008. Larger macroeconomic trends and uncertainty may have yet to play out and not registered fully in the market indexes. Jack Hough throws light on this from a different angle in the Wall Street Journal, August 5, 2011 comparing stagnant wages and its relationship with corporate earnings....

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Jackson Diehl, deputy editorial page editor of the Washington Post, says its hard not to conclude that Obama is really not engaged with the struggle for democracy and democratic process in the countries of the Middle East and the Arab World. His voice is only heard sporadically, and is missing altogether at crucial times, as the people of Egypt, Libya, and other countries express their democratic aspirations. This has been the case from the beginning of this struggle and continues today. He cites an Arab opinion poll, from Shibley Telhami of the University of Maryland with Zogby International, which shows a positive view of Obama at 34%, compared with 39% in 2009. When asked which countries have played a positive role, France and Turkey are given first place and the U.S. is close to China. This is because France's Sarkozy and Turkey have been actively engaged, and Obama has been silent for most of the time. Diehl says most Egyptians he talked to in Cairo in a recent visit, think that Obama's focus is on going along with the military and Israel. ...

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This editorial in the WSJ describes the sharp increase in premiums under the Affordable Care Act of president Obama. The average premium increase is about 24.2% according to a Barclay's analysis, and as high as 43.9% in states such as Illinois. Bill Clinton calls it the craziest thing with small business affected, and some premiums doubling. Of the 17 million people in the individual market eight million buy without subsidies. One in five enrollees cannot qualify for subsidies. Democrats say subsidies are too small. Hillary Clinton has proposed to have a Medicare "buy-in" for people ages 55-65, and a "public option" government run plan. Republicans want to rewrite the law. But this depends on which party wins the Senate, with the election in Missouri giving Democrats an opportunity to maintain a Senate majority.

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Moore points out that there are twice as many people working for the government in the U.S. (22.5 million) than in manufacturing (11.5 million). In 1960, the situation was quite different, there were 15 million workers in manufacturing and 8.7 million working for the government. More workers in the U.S. work for the government than in construction, farming, fishing, forestry, manufacturing, mining and utilites put together. Every state in the U.S. has more people working for the government- except for Indiana and Wisconsin- than people in manufacturing industrial goods. And California has 2.4 million government workers, which is twice the number in manufacturing in that state. New York and Florida have a 3:1 ratio, and New Jersey a 2.5:1 ratio of government workers to workers making industrial goods. Part of the reason for this is the huge increase in productivity and the advances in technology that make it possible to have higher production with fewer workers. This kind of productivity is missing in the government sector. And efforts to improve productivity tend to be blocked by the unions who favor the status quo....

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For the first time since the 2008 global financial crisis a initiative has been put to voters for tackling executive pay and bonus. A large majority of 68% of Swiss voters supported the 24 item Minder Initiative which restricts executive pay and bonuses. The Minder Initiative sends a signal to the rest of the world, says Christa Markwalder, a legislator for the pro-business Free Democratic Party. It provides other countries with a distinct approach to corporate governance and executive compensation. The EU decision to impose strict limits on executive pay and bonuses influenced Swiss voters. The EU decision bans bankers bonuses from exceeding fixed salary without shareholder approval, and limits flexible pay to twice the salary. The 24 item Minder measure gives shareholders the right to block proposed executive pay and bonuses. It also has penalties for violators of 6 times annual salary or imprisonment of upto 3 years. Businessmen and politician Thomas Minder has worked for three years promoting his Initiative and it was finally put to voters in 2013. For the first time since the 2008 global financial crisis, serious action is being taken to limit excessive executive compensation and bonuses in banking and other industries. It comes as austerity measures and high unemployment are influencing public opinion in Spain, UK, Italy and other European countries which have suffered banking crises....

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Views of students and former Chief Secretary Anson Chan are expressed in this piece by Wan on the protests for more democracy in Hong Kong. Chan says if he had known what Hong Kong would be like today he would not have been so enthusisastic about the handover to China in 1997. He is one of the leaders pushing for a compromise.

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The Economist magazine says China needs to find a way for Chinese citizens to participate in governance without risking the kinds of upheavals that have happened in the past, including Tiananmen. One way to do this is to see Hong Kong more as opportunity than threat, and allow an experiment to happen in a place ideally suited for this with its long traditions of free expression. Jinping is faced with a chance to do his country a great service.

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The pictures of a 4 year Syrian Kurds child Aylani- dead on a Turkish beach after the small boat carrying the parents and 2 children capsized on the way to the Greek island od Kos- made headlines in the media and created anguish in Europe.

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What is happening here appears to be that the whole American system of government as it operates today has some serious weaknesses, which if exposed in a critical situation- and with some life threatening situation for an industry group- can subvert the whole system and the economic life of the country. The serious weaknesses are the lobbying of Congress that is legal, and the financing of Congressmen and Senators election campaigns by industry groups which is legal. The life threatening situation for an industry group are the accounting rules and nuances that require that the banking and financial industry that holds these mortgage home loans, if they change one loan to lower payments in one geographic area, have to then show the lowered value of that loan in their books on all other loans of that type in that geographic area. Without this the banks and financial institutions were already or close to insolvent with losses of over $1 trillion. With that accounting change the industry losses would make large parts of the industry insolvent. This becomes incentive enough to fight loan modifications at all costs for the industry, and explains why Hope for Homeowners has generated only 25 loan modifications when it was advertised to generate 400,000. This creates a once in a lifetime or once in a hundred year chance of the whole system of democratic government working to destroy the economic life of the country. How? By providing a big enough reason for the banking and financial industry to fight loan modifications almost to the death, against even their better judgement when in late 2008 and January 2009 this would mean suicide for the economic life of the country, and the chance that they would both go down into the depths, the industry and the boat that is the American economy. This is what this story tells us, all key Congressmen and Senators were taken into their fold by the lobbying groups with large donations to their election funds, both Republican and Democrat, Shelby, Frank, Dodd, Durbin, and their aides. After Hope for Homeowners program failed, the new Hope Now program was again designed with the connivance of lawmakers in both parties by the banking industry representatives. It was designed so it would largely fail by not doing enough to keep homeowners in their homes. The industry faced with a life threatening situation did the wrong thing. Instead of saying lets get the government to help to change the accounting rule, and advocating that the government join the industry to share the losses and go out aggressively to restructure the loans in a three way loss sharing arrangement with homeowners, government and the industry, the industry instead decided to stick its head in the sand and let nobody do anything period. To do this it had to create the illusion that somehow the problem would fix itself with housing recovering on its own. In addition to the donations many Republicans like Preston, Secretary of HUD with oversight of FHA, and others in the Bush administration, may have had the mistaken notion that somehow the housing industry would recover without much help, that the economy was basically still healthy, that the crisis was not as bad as it appeared, that freemarket principles were still the best guide, and that toxic assets of banks and foreclosures were two entirely different things, with foreclosures for those who had borrowed recklessly not a bad thing....

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Mexican president Nieto's poll numbers are at all time low of 24%, according to Reforma newspaper. He took office in late 2012 and has been hurt by human rights scandal of the murder of 43 students in the state of Guerrero, corruption issues, and failure to improve the economy. The invitation to Trump to visit Mexico left even people close to the president surprised, and was criticized widely inside Mexico. It is not clear what Trump or Nieto gained from the trip. As Trump continued his talk about building a wall on the Mexican border and having Mexico pay for the estimated $23 billion it would cost. He did this in a speech to supporters in Pheonix on the same day he met Nieto, showing the use of teleprompters and prepared script was not his way of campaigning. Just as the message to black people that Democrats take them for granted cannot resonate without the basic message delivered with compassion and understanding- such as done by the presidents Bush and Reagan- so also the message to Hispanic people is suffering from the same lack of empathy. Recent polls show only 3% of blacks support Trump. McCain and Romney gained only 4-6% in the U.S. presidential elections of 2008 and 2012. The message of the wall is also baffling as an election strategy. A Gallup poll in July 2016 shows only 15% of Americans opposing a pathway to citizenship for illegal immigrants, and only 24% of Republicans. There is another problem in the strategy. The rhetoric about walls and mass deportations, and the Trump temperament combined with handling of nuclear weapons is not winning college educated women in the suburbs with polls showing Trump lagging behind Clinton by about 20 points or 4 million voters with this group. It is hard to undo the damage done by this kind of rhetoric used in the primary elections as it gains distrust of voters. It would require a bad economy with illegal immigrants taking local jobs, and handling of immigration seen as weak, for such a message to gain some national traction. Both are absent for the most part with a steadily improving economy since 2012, lower unemployment, a tough enforcement policy on deportatons under Obama that exceeded that under Geoge W. Bush, and the talk of a wall comes with illegal immigration having declined steeply since the 2008 financial crisis. The real culprit appears to be elsewhere, the triple hit taken from hollowing out of the manufacturing economy that hurt the Conservatives in Canada, the insecurity created for older whites from the job losses and hits to net worth from the 2008-2009 financial crisis, and the increasing loss of access to health care and educational opportunities with high  costs. About 62 million households or the bottom half of the distribution in the U.S. have a net worth of about $10,000, a quarter of this group having zero net worth, according to the Federal Reserve's Janet Yellen at an Inequality Conference in Oct 2014. Problems no wall is going to solve, problems that built up over 2 decades, problems that will take a generation to fix.  It shows the tech miracle of the last 2 decades as a mirage for quality of life of the middle and working class. Tech as a tool to a goal, not a goal in itself, is the better way forward. ...

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Noam Scheiber of NYT provides this illuminating account of how the changes in employment affected Hispanic Americans since 2004. About 500,000 jobs were created in the U.S. construction industry in 2014. Of this 315,000 jobs went to Hispanics with the highest number in California, Florida, Texas and Illinois, which have large Hispanic population. This has enabled Hispanic employment to reach the pre-recession levels in 2015 before this happens for blacks and whites, according to the Economic Report of the President. The drop in immigrants from Mexico crossing the border as economic conditions deteriorated in the U.S. in 2009-2012, and the stricter enforcement, has resulted in native born Americans benefitting most from the jobs created. Hispanics took the biggest hit following the recession in 2009-2012, with a loss of 700,000 jobs for the 3 million Hispanics employed in construction. During the 2004-2007 construction boom Pew Research shows 1.6 million jobs going to immigrants, of which 800,000 went to native born Hispanics, before the collapse in construction in 2009. This time the recovery is benefitting native born Americans most....

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Phased retirement is becoming a popular option for many Americans nearing retirement. An example is a employee taking 25% less income for 13 weeks of additional time off to spend more time with a reitred spouse, for vacation, and for trying out new locations for retirement. It gives working Americans an opportunity to gradually adopt a more relaxed lifestyle, to better understand what it would be like in retirement. This option also has the advantage of using good health to add some working years and improve the retirement portfolio, with less demands of work.

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Retirement and close to retirement planning for 2015 from Jonathan Clements of the WSJ.