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This is an interview with Columbia University economic historian Adam Tooze about the international trade and economic issues brought about by globalization. The rapid emergence of China in manufacturing and overcapacity in steel has led to action on steel tariffs by president Trump. Tooze is typical of opinion that sees action by Trump not as limited action to level the playing field  as proposed by Trade Representative for the U.S., Robert Lighthizer, but as reckless move on trade.  Lyrarc.com shows articles from the WSJ and NYT showing how opinion got to this point in the U.S., on Robert Lighthizer's views that the U.S. was not facing a level playing field, and  on how trade has hurt communities across the U.S. a long distance away from Silicon Valley. President Trump's views reflect a different perspective that says the U.S. has to balance the favorable situation obtained by China and the European Union through moves of its own to protect U.S. interests. Political commentary that the U.S. was starting a trade war is not supported by the facts showing China's response as muted and a willingness by China to negotiate a balanced trading relationship as its trade surplus with the U.S. continues to grow. The trade surplus is so large that the Trump moves do not tell the real story. They are likely to be overshadowed by the increasing value of the U.S. dollar leading to a continued favorable situation for Chinese exports and a larger trade surplus in 2018, regardless of Mr. Trump's action.  Trump's moves are more significant in other areas- limiting China's access to advanced technologies, with the European Union also taking the same action. This is now the new field of competition for the major world economies. ...

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Finnish president Niinisto provides a new understanding of Mr. Putin and the thinking that led to the invasion of Ukraine. Mr. Niinisto has an advantage having spoken with Mr. Putin countless times says this report in WSJ, and spoke again to Mr. Putin on May 14 to tell him that Finland was planning to join NATO. Putin simply responded that Russia does not pose a threat and "you made a mistake." He says it was not the Finnish way to not call Putin and tell him directly, and that not doing so would be like sneaking away around the corner. Mr. Niinisto says WSJ, has a rare insight into the thinking that led to the behavior of Mr. Putin in launching the war. Here are some insights from this report by Adam O'Neal of WSJ. On the situation in Ukraine Niinisto says " I would be a lot more worried about Ukrainians than about how Russians feel." Mr. Putin's willingness to see Ukraine's industrial centers, its infrastructure and cities destroyed, turning them into moon craters in the east compares with the relative ease of life in Moscow, St Petersburg and other cities, cushioned by Russian oil and gas exports and financial reserves. As a student of Finland's long and violent history with Russia Mr. Niinisto has some unique insights into Russian thinking. He tells WSJ's Adam O'Neal  that if a Russian is angry, yes, be careful, but if he's calm, be even more careful. The Russian invasion of Finland led to loss of 200,000 lives in 1939-40, and another 250,000 Russian lives in fighting between 1941-1944. Finland has 300,000 men or women in military reserves and men between 18 years and 60 years are called up for military service with the Finnish Constitution requiring every citizen to contribute to national defense. Recently Finland ordered 64 F-35 fighter jets from the US. What led to the invasion of Ukraine by Mr. Putin? Niinisto says that "somehow Mr. Putin has a feeling that Russia was betrayed in the 90's by the West. Over time this thinking continued feeding the negativity says Niinisto and led to the thinking that Russia could be betrayed once more.  Another aspect of Mr. Putin which was covered during the last decade of relations with Ukraine in Lyrarc, was his perception that Ukraine under various leaders before Zelensky was basically led by corrupt leaders including one president he supported but lost power in the last decade. Mr. Putin saw protests in Kviv and Lviv that ousted a president he supported recently as orchestrated from outside. This led to thinking that Ukrainian nationalism did not exist and he believed that Kviv would not be defended and would fall easily within a week or weeks. As his nationalist perceptions and that of a small group that included his partner in office Mr. Medvedev became stronger in the last ten years Mr. Putin made the decision to take the option for invasion in the thinking that the response of the US and Germany would not be to support Ukraine with arms and other aid. The CDU and SPD was perceived as weak in Germany and Scholz not seen as able to cut down oil and gas imports to the EU. Biden was seen as not willing to stop Russia by taking on a difficult conflict because of China allying itself with Russia, considering China's interconnections with the American economy. The timing was seen as good considering that this level of dependence on oil and gas imports of Europe on Russia would never be the case after planned shifts to renewable energy. The Russian economy was cushioned by its $620 billion in reserves and by the world's need for energy even as the shift to renewable was taking place. This window my have induced Mr. Putin to take what appeared to be a rational decision that ignored the common feelings of humanity of risking the destruction of a brotherly people that spoke Russian, prayed in Orthodox churches, and where Russia as a state started in the year 1000. Cambridge historian Brendan Simms in his new book "Europe : The Struggle for Supremacy 1453 to the present," has shown all European powers susceptible of reasoning and calculation of this type in their wars since 1453 in the struggle for supremacy in Europe up to the present- the Portuguese, the Spanish, the Dutch, the British, the French, the Germans, the Russians, the Danes, the Swedes. This also led to British and French empires in Asia and Africa with subjugation of Asian and African people. The Second World War had created the perception that somehow this had changed after the loss of millions of lives- that was the perception of Merkel a pastor's daughter who had grown up in the former communist state of GDR in East Germany, and of SPD leader Steinmeier who felt strongly about the loss of lives from the Nazi invasion. Merkel and Steinmeier built the relationship of Germany with Russia that has collapsed under Germany's new leader Scholz and Habeck-Baerbock of the Greens party. Merkel and Steinmeier also built the trade relationship with China that also faces collapse with China's support of Russia under Mr. Jinping, and the unexpected shifts in Chinese leadership and policies from that pursued by premier Deng and his successors in 1990-2010 of interconnected economic links with US and EU. Mr. Scholz, the new chancellor of Germany has Brendan Simms book on Europe on his reading list for 2022 as he ponders over the lessons of 2022 and the pandemic. Mr. Biden with long experience in the Senate of the US has a memory and understanding of what happened since World War II, how America got to this point, and what it will have to do to bring back the American spirit to the Free World that America has led for most of the last two hundred years. ...

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Olivier Blanchard, chief economist of the IMF says that as government borrowing around the world surges, interest rates will go up. Governments borrow by selling bonds to investors, and to attract investors the government competes with stock and corporate bond markets for investor's money, leading to rising yields for investors. As the confidence has returned to corporate bond markets this is already happening. From the end of 2008. the yield on the benchmark 10 year Treasury note has increased by one and ahalf percentage points, rising to 3.54% from 2%, the sharpest upward movement in 15 years. In Germany the yield on German 10 year bonds has also risen, rising to 3.57% from 2.93%. Similiarly British bond yields have risen to 3.78% from 3.41%. Congressional Budget Office estimates are that net government debt for the USA will rise to 65% of GDP at the end of fiscal 2010, from 41% at the end of fiscal 2008. In 2009 and 2010 the US government will sell $5 trillion in new debt, according to Citigroup. A decade from now the government's outstanding debt could equal 82% of GDP, or about $17 trillion. Every one point rise in interest rates costs the Treasury $50 billion annually over a few years, and Kenneth Rogoff estimates that this could reach $170 billion annually if the average yield on 10 year Treasury note goes up to 4.7%, as the Congressional Budget Office estimates. This will dampen the effects of stimulus spending. It is a big issue says Rogoff. A year ago under old policy and assumptions before the financial crisis the Congressional Budget Office projected outstanding debt at $5.3 trillion in 10 years. Now the estimate is $17 trillion, which is triple the old number and an increase of $11 trillion. A recovering economy would make these numbers less relevant. But with struggling industries like autos and banks needing more help from the government, and with consumers having to reduce a mountain of debt, a weak economy for a long time and small growth for a decade would make this a story that won't go away. Rogoff says its like what happened to the subprime borrowers, people assuming that the funding is always going to be there. In 2009 and 2010 Citigroup says, the Euro zone countries will sell nearly 1.6 trillion euros or $2.6 trillion in new debt, and Britain will offer 490 billion pounds or $799 billion in new debt. Over the next decade this would slow Europe's recovery and prolong the downturn. Britain faces a bigger problem in the near term as Britain's governmetn debt equals 55% of GDP, and Standard and Poors estimates it could approach 100% by 2013. South America and Eastern Europe will also face the situation of rising rates. Asian countries like China with lower levels of debt are in a better situation, IMF's Blanchard says....

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The Guardian's Greenhouse says the UAW sees the tariff action with 25% tariff on cars imported into the US starting April 2 2025, as a positive step.  Shawn Fain of the UAW who had the support of president Biden during his term 2020-2024 says DJT's actions match those taken by Biden to help working class Americans and the middle class. Supporting the president “for stepping up to end the free trade disaster that has devastated working-class communities for decades”. “Ending the race to the bottom in the auto industry starts with fixing our broken trade deals, and the Trump administration has made history with today’s actions.” Greenhouse is concerned that the way it is being implemented can create problems with tariffs on one day and off the next. The reason for the on again off again action was to give Mexico, Canada, and China time to respond with action they have not taken on fentanyl flows into the US, and Mexico time to address migrant trafficking across its borders. The US International Trade Commission study in 2024 on the 25% tariff on US auto imports cited by BBC shows it would reduce imports by 75%, increase prices by a modest 5%, and increase revenues of auto makers in the US by 5%. Figures such as prices going up by $6000 may apply to BMW's that are imported from Germany and carry high price tags for a very small very affluent customer group unrepresentative of the US automobile market. ...

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Jacobs and Richtel of the NYT give this exceptional story of how Mexico changed between 1980 and 2016. Following the joining of NAFTA free trade zone the Mexican diet and food ecosystem began to more closely resemble the food diet system in the U.S. bringing with it severe health consequences. Soda and coke are now more entrenched in Mexico, as are fast food outlets. In 1980 only 7% of Mexicans were obese, compared to 20% in 2016, according to Institute for Health Metrics at the University of Washington. And diabetes kills 80,000 people a year, becoming the top killer according to the World Health Organization. A trade expert at Tufts University, Timothy Wise, says Mexico took on the worst aspects of a first world country like the U.S., with few protections. A similar problem is taking place in India and China as obesity grows, according to the T.H. Chan School of Public Health at Harvard, as low nutrient highly processed foods of large food companies with huge advertising budgets take a prominent place in diets. This is a growing problem for countries from Colombia to Ghana and Nigeria. ...

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India needs more dams to collect, store and channel water to where it is needed. The rainy season is becoming shorter, with alot of the rain as much as 50% falling in about 15 days. This means some areas are flood prone and the water if not collected in dams would be lost. THe other problem is that a lot of water is wasted without proper maintenance of the existing dams and storage areas. Much of the state governments investment in this is ineffective so water is lost for lack of maintenance. The state irrigation departments are underfunded, overmanned and corrupt and are not upto the task of maintaining the existing irrigation systems. This presents ahuge problem because India is estimated to lose the equivalent of two thirds of the new storage it builds to siltation. Between 1992-2004 India built 200 medium size irrigation projects but the area irrigated by these projects actually shrank by 3.2 million hectares. New dams are not coming on fast enough and India has 200 cubic metres of water per person, compared with 1000 cubic metres in China. Groundwater -with the governments providing free electricity to farmers for pumps- is used widely but this is becoming unsustainable. The WOrld Bank estimates that 15% of India's food production comes from "mining" which is the use of unrenewable groundwater supplies. Many of these wells are drying out. Also free electricity is causing electricity boards to have insufficient funds for expanding supply causing chronic shortages. One quarter of India's electricity is given free or cut rate to farmers. And politicians trying to reform this system are often booted out of office. All this as 400 million Indians have no electricity. The answer is not merely to raise prices in places like Haryana state- where according to aWorld Bank study farmers with electricity spend 25% of their incomes for it and to repair engine pumps- but also for the utilities to improve supply. Farmers also need to learn to use water more efficiently. ...

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SEC's whistleblower cash for tips program once paid out $279 million on an Ericsson case. The Foreign Corrupt Practices Act is an anti bribery law of the US that prohibits the payment of bribes to foreign officials to win or keep business. In this case the prosecutors from the Southern District of New York in Manhattan bring charges about wrongdoing by Ericcson in Djibouti, China, Vietnam, Kuwait and Indonesia from 2000 to 2016. Ericcson paid out $1.1 billion in a settlement with US authorites in 2019.

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Productivity as measured by GDP per hour worked was $44 in Italy in 2009. It has remained the same as in 1999. In the EU-15 (first 15 members of the EU) the GDP per hour worked increased from 47.9 in 1999 to 49.0 in 2009. For the U.S. this GDP in the same period went up from $56.0 to $58.0. This shows the lack of productivity growth in Italy. With the current focus on Italy's slow economic growth efforts are underway to make changes that would increase growth. GDP growth in Italy was 1.3% in 2010, compared to 1.8% for the eurozone, according to Eurostat. Italy's Minister for Public Administration Renato Brunetta says he would like to cut that gap in half. Some of the measures in the recently passed $40 billion spending cuts package, include efforts to help the underdeveloped southern region. This includes cutting red tape for real estate developers, and streamlining accounting for business. Italy's growth comes mainly from exports that make up about one fourth of GDP. But this comes from lower tech sectors such as textiles, chemicals and machinery, where it must compete with China and other countries. In May 2011 industrial output was up by 1.8% in Italy,compared to 7.5% for Germany. Another problem is the large and inefficient public sector and the gap between protected state workers and a younger generation- with one in three Italians 15-24 unemployed....

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The Times correspondent in Beijing says he sees two Chinas one that is showing technological advancement in 5G, in space technologies, in information technologies, infrastructure building in big cities. The other China is in rural areas away from the big cities, in smaller towns in regions away from Beijing and Shanghai. These areas have suffered neglect and have changed little over decades, with the focus during industrialization on larger cities and the coastal areas. This is evident in the manner health services infrastructure and development of medical personnel and doctors were neglected in the rush towards building manufacturing and infrastructure of road and rail. There is a shortage of doctors and hospitals, health services are costly, and waiting lists for beds at hospitals is huge. Doctors are also not held in high esteem because the focus is on profit in the market economy that has taken over the health sector.  Education of citizenry on respecting the common welfare which is expected and normal in Europe and America has also suffered during the rush to industrialization. Efforts to ban and eliminate use of certain wild animal foods not being respected by fellow citizens can be seen in this context. This caused the SARS virus epidemic and the epidemic today from the coronavirus. Seen from this angle a slowdown in construction, infrastructure building, and a slowdown in the economy, can even be healthy, so that focus can be shifted to better health, better sanitation, and better medical infrastructure including medical human resource capabilities. Investment in public education on health and self enforcement of rules by citizenry for a better society is indispensable for progress. It is in these conditions that the challenge of the national and international emergency of the coronavirus can be seen today. It also provides an opportunity to reflect on progress so far and the needs of the future. These challenges are even tougher than repeating what one has done before such as building more and more infrastructure, as they involve building a better society through public discipline along with investment in health and education services. This provides a lesson for many Asian, Latin American and African countries in the rush to industrialization. Turning over the health sector to a market economy making services costly and distributed unevenly in the population has not worked in the U.S. for the betterment of all citizens and a healthy society. Carrying this over from U.S. to China and not learning from Europe in what Europe has done well in the less costly and broad distribution of health services for the people, is one of the poorer lessons learned. This is also true for India and South Asia, South East Asian countries in their rush towards industrialization.  ...

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The head of the World trade Organization Okonjo-Iweala and the prime minister of Bahamas Mia Mottley say that overconcentration of manufacturing in China creates fewer opportunities for growth for poor countries. The supply chain needs to be redesigned after the pandemic not just because it creates a more dependable supply chain for the US and the European Union. It also  needs to be resdesigned to increase manufacturing in countries such as India and Mexico because this will create more opportunities for growth in other countries. For this to happen the infrastructure has to be made similar to that in China. This program of rapidly building the latest infrastructure and logistics with next generation technologies is underway in India with the Modi administration building new pools of capital, skilled labor, land and logistical infrastructure for the purpose of  rapid export led growth. A target of 2 trillion dollars in exports by 2030 has been set by India. This will affect a broad region from Indonesia to Vietnam in Asia and Mexico, Brazil in Latin America, bringing the benefits of trade to a wider region for the first time and making allies of the US and the European Union true partners in trade and manufacturing for the supply chain. ...

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Following Brexit on January 31, 2020, Britain's government led by Boris Johnson prepares to negotiate new trade deals with the U.S. and other countries. The freedom to negotiate these trade deals was a key part of the plan of Brexit supporters and Mr. Johnson. The Times, Britain's leading newspaper, looks at the prospects of trade deals with each country- the U.S., Australia, New Zealand, Japan. Facing re-election Mr. Trump is seen as favorably inclined to work out a trade deal that he can show during the campaign. Trade discussions have taken place between the UK and Australia, Japan. Mr. Morrison in Australia and Mr. Shinzo Abe want to see strong trading ties and investment with Britain. Japan or Australia could be the first countries that work out a trade deal with Britain as discussions are at an advanced stage.  Britain has a small deficit with Japan in trade. It has a small dollar surplus in trade with the Australia and New Zealand. With the U.S Britain has a large surplus, it exports 121 billion pounds and imports 76 billion pounds. The prospects of trade deals are enhanced by the similarity in outlook of the governments of the U.S., Australia, and Japan, which share views on jobs expansion, economic growth and are centre right in economic philosophy. They also share a strong connection with working class voters under Johnson,Trump and Morrison. Mr. Trump is seen as a strong deal maker so that any deal would involve some concessions from Britain that increase U.S exports, including farm exports. Difficult issues with the U.S. are -pharmaceutical drug imports that could increase Britain's NHS cost for drugs, the digital services tax from Britain on U.S.  companies such as Google and the Trump retaliatory threat to impose tariffs beyond the current 2.5% on car imports of $11 billion from Britain. On agricultural imports Britain's natural foods preference conflicts with imports of genetically modified (GMO) foods from the U.S. Experts say this could lead to a partial or Phase 1 deal that does not need approval from the U.S. Congress, similar to the Phase 1 trade deal with China which sidestepped the thorny issues on trade. This is something both sides can show their support base as a win. ...

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Remember the pictures of all the bicyclists in cities in China, now there are cars instead, and that we assumed was progress. But crammed as we are into small urban areas, and with so many people in the planet and so many with aspirations for a better life in China, India, Brazil and Russia and other countries, this does not point to a sustainable future. We need bicycles back and a new kind of automobile that is sustainable on the streetsof urban areas. So here we are in New York City and commercial buildings like the Rockefeller Center operated by Tishman Meyer following old rules prohibiting bicycles, looking down on bicyles, and seeing bicycles as affecting safety in the building. So cyclists are on their own. The city has about 5000 bicycle racks, and will add 1200 by 2009, and expects to add 37 bike shelters each for 8-9 bikes by the end of the year at transit hubs. The number of bike racks are inadequate as nearly 131,000 people ride bicycles daily in New York City according to Transportation Alternatives. The city has plans to add 200 miles of new bicycle lanes but mparking is a huge problem. Parking on the street is also risky because of bike thieves in New York City. So new solutions have to be found and it would be nice if building had an area on the ground floor with a separate access for cyclists or a way to go to underground parking through a separate acess and directly park and take elevators just as one does for underground car parking. This would be really commuter friendly but till then its the shop owner who lets youpark there or a friend who has a business and an area where he lets you park your bike and so on, everybody having to be creative. But make no mistake bicycles matter for clean air, the environment, for congestion, for people, for healthy living, and to create a good living environment in urban areas....

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Haruhiko Kuroda, 68 years old, a senior finance ministry expert who ran the ministry's currency policy as vice finance minister for 4 years in the early 2000's, is prime minister Abe's nominee for central bank chief. He lectured at Hitoshibashi University for two years before becoming the head of the Asian Development Bank. His book "Success and Failure in Fiscal and Monetary Policy," is critical of the Bank of Japan for mistakes in being first too accomodative in monetary policy to set up the 1987 crash, and then tightening too quickly leading to the deflation and recessions of the last two decades. By choosing an expert with a long experience in the field of monetary policy and a vigorous advocate of getting things right to shake off the deflationary trends, Abe is sending a strong signal to financial markets. Kuroda says he is looking at a shorter time frame to achieve a 2% target for inflation- about two years. In essence Kuroda is taking a page from the policy book of a small group of MIT trained economists, Bernanke at the U.S. Federal Reserve, Draghi at the European Central Bank, and Mervyn King at the Bank of England to boost domestic economies in the context of increasing global growth. The yen weakened to 94.77 to the dollar on Feb 25, 2013, after the announcement. Abe's nominee for one of two deputy governor appointments is Kikuo Iwata, a 70 year old economist who was also critical of Bank of Japan monetary policy since the 1990's. The Abe administration has also carefully communicated this message. Speaking at the Centre for Strategic and International Studies in Washington D.C. Abe said Japan's goal was to increase exports, but at the same time it will increase imports which should benefit the U.S., China, India and other countries. He described a recovery in Middle America from the Dakotas to the Carolinas and sees something like this happening also in Japan. Even the appeals to nationalist sentiment are also coupled with the message to China and S. Korea of not climbing up the escalation ladder and seeking good relations to promote mutually beneficial development. Abe's focus is on building the U.S.- Japan relationship....

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The accompanying article from Pro Publica about Lighthizer's term at USTR shows the lack of results as China shifted production to Mexico and Vietnam - it shows it was going to be a long struggle, carried over into another 4 DJT years this time in 2025. That article showed tariffs are really not so much a weapon against other countries  as they are a way to signal to America's corporations to invest in supply chains in the US.  In Congressional hearings towards the end of his term at USTR in 2020 Lighthizer said -

“They have a system, and their system is challenging our system.”  Lighthizer told Senators that the U.S. struggle with China is “going to go on for years.”

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Amazon expands during the pandemic when retail on line delivery has helped people reduce trips to the grocery or retail stores. Amazon hired 427,000 people to expand its workforce to 1.2 million people by November 2020, 9 months into the pandemic. Almost doubling the employee workforce. These workers are mostly at warehouses, with some software engineers and hardware specialists. This includes hiring in India and Italy and is worldwide hiring. This does not include 100,000 temporary workers for the holidays, and 500,000 delivery drivers working for contractors.  Only hiring of 230,000 people by Walmart about 2 decades a ago in one year comes close. Walmart hired 180,000 people during the pandemic. Walmart has 2.2 million employees. With the expansion underway Amazon looks to become the largest private employer in the world in 2 years, say experts.  Amazon pay is $15 an hour after an increase of $2 recently. Its coronavirus safety practices have been upgraded after early criticism in April and May. Recent expansion in Italy and in India are also part of worldwide expansion after Walmart has pulled back from its worldwide expansion. This also shows how quickly major aspects of life are changing during the pandemic as some companies in online business are becoming more prominent than others. Target and Walmart have also increased in size. Best Buy has changed its focus with its conversion into a company that leads with personal service in online plus store hybrid retail and a focus on seniors and older people for healthcare service and product delivery. Companies are changing the way they run or getting a new life in remaking their business. This is also a time when other aspects of business such as social media are becoming evident. Subtle aspects such as reports of higher rates of mental depression through use of social media platforms. There is also the awareness that information technology companies in Silicon Valley generate most of their money in advertising and this advertising of $100 billion is only a small fraction of the $12 trillion U.S. economy. Should Silicon Valley based in California decide priorities on where capital allocation should go through the part it plays in moving startups based less on America's priorities than other considerations. Healthcare, education, cities, and infrastructure have not received funding they need and capital allocation by financial markets has failed the American people, as it has failed in Europe and other parts of the world for similar reasons. This has hit hard communities and people across the U.S. and Europe and also in Latin America, Africa and Asia, with the loss of manufacturing to China and other countries from the U.S. India and Europe. ...

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Kevin Maurer looks back at 15 years of covering Afghanistan since 2004, and asks was it worth it.  The conflict has cost 145,000 lives for the U.S. period of the war alone. Not counting the war in which the Russians were involved in the decade before the U.S. involvement. In fact the Russian involvement in Afghanistan was costly enough to hasten the collapse of the Soviet Union and bring Gorbachev to power to unwind the war and make the changes that led to the collapse of the Berlin Wall.  2400 U.S. servicemen dead and 20,000 Americans wounded. The cost to the U.S. is $737 billion for this war, according to a report in 2018 from Brown University's Costs of War Project. Just as the Soviet Union showed the damage from this war the U.S. has seen the cost of this war and foreign entanglement in another war that started accidentally with international interventions in the Iran-Iraq region as a cost that was borne with consequences. This includes the neglect of infrastructure and the damage to the middle class prosperity built up in the 1950's and 1960's after the Second World War. The U.S. got into this war with 9/11 attacks on New York City. By 2010 what began as a war fought by a few Special Operations teams turned into a war with troop levels reaching 100,000. Presidents Bush and Obama both failed to end the war by winning it. In 2014 finally combat operations stopped and American troops mainly conducted anti-terrorism operations and trained Afghan forces. In recent years the war has gradually disappeared from the national discussion in the U.S. and is barely talked about. President Trump wants to end the war even if it means talking to the Taliban and negotiations directly with the Taliban are ongoing.  One result of this war is the aversion to costly international entanglements and the highly unpopular nature of the conflicts. There are serious costs of the conflict in terms of neglected domestic priorities including infrastructure, loss of U.S. technological edge in key industries, and the competition from China, an the investments in health, education, services that were not made, the increase in inequalities and the diminishing of the middle class. The global financial crisis of 2008, the result of faulty banking, added an economic dimension through the loss of middle class savings in the U.S., worsening the financial situation of the middle class in the U.S.    ...

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After a weeks long standoff both sides disengage expeditiously in the India's border dispute with China over construction of a road in the Doklam plateau region of Bhutan. In this NYT report experts in Hong Kong point out that it is not in China's economic interest with an aging population and debt crisis, tense economic relations with the U.S., and for India struggling with modernization issues, to turn a remote border issue into an open conflict. It would also complicate relations in the Asian region with Japan and economic relations with the U.S, countries with whom China's economy is intertwined through supply chains and other ways. Disputes with China and South Korea have in the past affected the Chinese economy, and China has developed trade with India as its companies look for growing markets. India's Modi administration is focussed on the economy. In this context of broader relations the road construction in Doklam appears to be an aberration that is hard to explain except as a miscalculation and poor understanding of the best interests of the region and of the world.   ...

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Jimmy Carter visited North Korea during a tense moment in US North Korea relations after US concerns about fuel rods being taken out of Yongbon nuclear development plant in 1994. Through his contacts in China and the US  Carter was encouraged to visit Pyongyang, North Korea to negotiate directly with North Korean leader Kim Il Sung. He did this during the Clinton Administration and negotiated with Kim who this report in the BBC says was keen on settling the dispute with the US that could lead to war in the Korean peninsula. 

Jimmy Carter is seen as a one term president. Yet he accomplished  a lot using his experience as a former president in improving relations with China, and in relations with other countries around the world. This is almost as effective as a second term even more so, and covered a span of 40 years from 1980 to 2020.

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As Dr Harsh Vardhan, India's representative and Health Minister, takes on responsibilities as the Chairman of the Executive Board of the World Health Organization this can be said about this critical juncture.The WHO is going through soul searching and a reevaluation of how it has implemented the vision of its founders during the closing years of a world torn apart  by war in 1945, and actual founding in 1946.  At the UN conference in San Francisco in 1945, Dr. Szeming Sze of China, Dr. Geraldo da Paula Souza of Brazil and Karl Ewang of Norway, were keen to set up an international organization for cooperation on health. The Indian representative was Arcot Ramaswamy Mudaliar, a member of Winston Churchill's War Cabinet, who chaired the committee on economic and social problems. He was the president of the Economic and Social Council which called for an international health conference in Feb. 1946. It was at that conference on 19 June 1946 that the World Health Conference came into being. A native of Madras he then returned to Mysore as chief minister. The vision at the time for international cooperation on problems such as smallpox which killed 2 million people each year were quite different from the fast moving epidemics with international travel in 2020. Today 4.4 billion passengers traveled by air in 2018, according to International Travel Association, 100 times compared to less than 40 million in 1950, and about 10 times the 400 million when Nixon's visit opened up China in 1972. The world we live in is different and the World Health Organization needs to be redesigned for the 21st century. The entire process of how the WHO operates has to be rethought. Immediate steps include- 1. The appointment by Executive Board should be reinstated as this is more representative of the world population and the major centres of advanced public health, including the major countries. Throughout its life the WHO made appointments through the Executive Board not by election. The election in 2019 by 200 countries was actually not representative of the world population as it gave India, Brazil and other early founders at the 1945-46 conferences only 1 vote each with population of 1.2 billion and 210 million, the same as tiny countries Barbados population 385,000 and Laos 7 million. 2. Reassessment of the entire process in which nations are requested to give permission of teams from major countries in Europe, North America and Asia, major population centres, so that the 6-7 week delay between the U.S. request to China for a special team to go to Wuhan on January 6, 2020 and the permission granted Feb 16, a costly delay of 7 weeks which added millions of cases and hundreds of thousands of deaths. In a super fast moving pandemic with international sports stadiums and 4 billion air passengers spreading it like wild fire around the world, there is little room for error, every day counts. Never should this happen again, as Dr. Sze Szeming China's representative said once in 1945 we must learn from mistakes, as mistakes were made in the years before World War II that were costly for China, India, North and South America, Other Asia, Africa, large population centres. 3. As was the effort then in 1946 and the early years, the effort to keep the staffing positions of leadership in the World Health Organization should be kept far from politics. Very experienced and capable people are needed from major countries with long records of public health experience and committed to the huge task, as was the vision of the founders.     ...

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Another useful piece giving insights to the way China has approached the economic development tasks and what this means for the future. China's development is very capital intensive because the cost of capital is really low. Inputs like land and energy costs are also kept low by the government. Cost of labor is low and this has resulted in the share of wages as a percentage of GDP to drop from 53% in 1998 to 41% in 2005 and it is dropping further. In America wages to GDP is 56% and includes investment income which in China is lessthan 2% but much larger in the USA. The pool of surplus labor in China does work to depress wages. The percentage of consumption to GDP in China has fallen from 47% in early 1990's to 36% in 2006, the lowest of the large economies. But this does not reflect a higher savings rate. In fact the household savings rate also has fallen as a percentage of GDP. According to World Bank's Beijing office this has fallen from 21% in mid 1990's to 15% in 2006, relative to personal disposable income it has fallen from 30% to 25%. This is lower than India's household savings rate. So what is going on. The Economist points to the lower share of wages as a percentage of GDP because the large pool of surplus labor has depressed wages from where they might otherwise be so that consumption is not where it could or should be for China to move away from manufacturing led export driven economy to one that depends on the domestic market for growth. Higher consumption and a bigger domestic market would make it easier to sustain strengthening of its currency, a key demand of western countries. This would also provide a fair deal to millions of migrant workers and reduce labor unrest. It would also reduce pollution as the economy would not be focussed on production at all costs. It appears that the existing model has worked well for China in bringing millions of people from the villages into cities and growing manufacturing industries, and in urbanizing China. But China is so large that there are millions another 200 million who would migrate from villages and rural areas into cities as migrant labor to 2020 according to what the Government envisions ( see article in this issue of the Economist "Barefoot Doctors"). But this model needs fixing or changing as the pollution costs are already severe and can prove catastrophic if continued, and the western countries are demanding strengthening of the yuan to correct imbalances in the trade deficits as a result of this model of development focussed on manufacturing and export industries and short on consumption in the domestic market enough to drive the economy. ...

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President Trump escalates the trade battle with China by increasing tariffs on $200 billion Chinese goods from 10% to 25%. The U.S. says China went back on its commitments in a 150 page agreement at the 11th hour or last minute, by deleting these commitments in all 7 chapters of this agreement. These are firm commitments sought by the U.S. in a number of areas of deep concern to the U.S. and the U.S. Trade Representative Mr. Lighthizer had already conveyed the determination of the U.S. to not relent on this. In the past China was seen to go back on its commitments and the U.S. side now wanted to ensure promises were kept. The U.S. concerns cover- theft of intellectual property and trade secrets, forced technology transfers, competition policy, access to financial services and currency manipulation.  The situation has been building up fro a decade with the Trump campaign honing in on this issue of China stealing U.S. jobs, and factory closures in the U.S., because of unfair trading practices. It also led to Mr. Trump's winning election campaign in the American midwestern states. With China seen as gaining an unfair technological advantage over the U.S., most recently over 5G telecom networks, the U.S. is not likely to back down. The U.S. is less dependent on trade with China. China is more dependent on the U.S. and a lot of manufacturing jobs in China are affected by the U.S. tariffs. This is why president Trump has decided to take a strong stand, including putting on tariffs on and additional $300 billion of Chinese goods.   ...