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As in the US with Harris investment in America vs Trump cuts there is a distinct difference between the Tory spending plans that allowed capital spending investment in the economic future of Britain to decline from 2.5% to 1.7% of GDP over 5 years to 2030. Rachel Reeves, Britain's finance minister, says the government will adopt a new rule that changes the way it measures debt- public sector net liabilities as a percentage of GDP is the new fiscal rule. What it does is free up 50 billion pounds Britain badly needs to invest in things like climate change action, education, and other needs of the economy that will brighten Britain's prospects in the future.  “If we continued on that path, we would be embracing a path of decline. The real debate now in British politics is whether you are on the side of investment or on the side of decline. I don’t want to see public sector net investment as a share of our economy decline in a way that is currently set out. Under our current fiscal rules, we would not be able to reverse that path.” The stability rule goes with this that says strictly this money will not be used for tax giveaways, and not for public sector pay deals or the day to day functioning of government. In addition th government will borrow 25 billion pounds to  keep 30 billion pounds of headroom so that debt will keep falling over the first term of this Labour government.   ...

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WSJ describes the close friendship since 1994 between Dana Waldman, head of Disney, and Kamala Harris. It does not mention that Dana Walden is the granddaughter of Rose Freeman, a Jewish immigrant from Austria that is shown to be a survivor of a garment sweatshop the Triangle Blouse Factory Fire in 1911. This fire started America's labor reforms under France Perkins for safety, hours of work limited to 54  by NY law with help of Teddy Roosevelt Republican president, and New York Governors Al Smith, Franklin Roosevelt.  It also does not mention that Frances Perkins is the first woman to be appointed to the cabinet- as Labour Secretary by FDR in 1933. Frances Perkins told Roosevelt at that meeting in 1933 about her fight for labor reform for Social Security and Unemployment Insurance- "All this is really new. You know that don't you." Today Social Security and Unemployment Insurance is a bedrock for families- Republican or Democrat. People forget that Teddy Roosevelt and FDR were a Republican and a Democrat- yet both were on the side of decent conditions for workers and children, and families. Matt Walden and Doug Emhoff in the California entertainment industry knew each other years before Dana Walden, Matt Walden's wife and co-head of Disney Entertainment introduced Doug Emhoff to Kamala Harris in 1994 on a blind date. At the time Harris was District Attorney of Alameda County. Dana and Kamala became close friends. ...

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ECB study put out in April 2013 shows household wealth and income in eurozone countries based on 2009-2010 data for 60,000 households throughout the eurozone. The household wealth in southern European countries is higher than that in Germany. The study shows why ordinary Germans oppose bailouts for banks, Greece, and eurozone countries that experienced a boom in the 2000-2010 period, a period in which German workers took small pay raises to improve German competitiveness. Germans also see Portugal and Ireland in a different light compared to Greece, Cyprus, Italy and Spain where real estate speculation, lax accounting, tax evasion and favored treatment of certain groups, has created or aggravated the debt problems. Wealth is defined as total assets, including real estate, vehicles, bank deposits, investments and pensions, minus liabilities for mortgages, credit card debt and loans. By this measure German households had an average of 200,000 euros in wealth, and lower than this in Finland and Netherlands. At the median or midpoint German households had 50,000 euros, the lowest in the eurozone, for Greece the median was 102,000 euros. The impact of home ownership is significant in the report, as home ownership is lower in Germany than in Southern European countries, and mortgage interest is not considered favorably in German tax laws. The decline in value of homes after 2010 is also not reflected. Another indicator for comparitive wellbeing is income, and this is shown in figures released in March 2013 from the European Statistics Agency for GDP per capita. For Germany per capita GDP was 29,000 euros in 2010. The average GDP per capita for the eurozone is about 24,000 euros. By this measure Greece is at 21,000 euros, 24,000 euros for Italy and for Spain. Germany being 18-19% above Spain and Italy. If Germans, Dutch, Finns and Austrians are less well off then the argument favors having the banks, creditors, and including depositors, in a burdensharing arrangement for bailout of troubled eurozone economies. ...

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BW's report says Housing will go back to normal by 2012. This is a better case scenario. But there are serious downside risks and unknowns. A study done by Rogoff and Reinhart shows that it takes about 6 years or longer before things return to normal after a serious crisis. This could mean 2012 is the earliest things could return to normal. And this assumes that housing demand remains at about 1.5 million homes a year as in the past, and with only about half a million homes being built now as developers scale back the difference of 1 million homes would cut into the inventory to bring demand and supply back into balance. But changing demographics with an aging population and different needs, new frugality with buyers renting for longer, and the perception that homes are not a investment, slowing immigration, all factors that could change the nature of the market and demand in housing, could lead to things dragging out for longer. BW has assumed a more optimistic level of GDP numbers from Moody's Economy.com estimates made in May 2009, with GDP declining 3% in 2009, growing 1.4% in 2010, 4.7% in 2011, and 5.8% in 2012. These estimates are on soft ground because no one really knows for sure what will happen in anumber of areas in the years ahead. In terms of deflation and inflation in the years ahead, capacity utilization is at 68% but a look at the declines in manufacturing show that some of it will be a permanent loss as in the auto manufacturing base, export markets depend on how economies in Asia and other countries are performing, a new frugality and different consumer behaviour because of debt levels at 100% of GDP could permanently lower demand to levels different from that in the past. The regional nature of the recovery in housing will still be very much present, as areas with surging population growth and areas where housing price rises were modest, from Nashville to Austin, do a lot better than California and Florida....

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As exports and manufacturing decline, China is continuing to maintain high rates of fixed asset investment with the focus now away from factory construction to infastructure like roads, bridges and rails. The National BUreau of Statistics reported that urban fixed asset investment expanded 26.5% in Jan-Feb 2009, compared to 26.1% growth rate for 2008. Fixed asset investment was 42% of GDP in 2008, according to JP Morgan strategist Jing Ulrich. Now it could go up higher to 45%. China's growth has been off-balance say experts, now it is becoming even more so. As long as factory construction as fixed asset investment a lot of new jobs were being created in the manufacturing sector, now these jobs are not being created. China's small and mid sized companies that generated about half of the 4.42 trillion GDP, like GenTech of Mr Yu profiled in the other linked article in WSJ, and which created 90% of the new jobs, are now contracting. With smaller private consumption, and the efforts to improve the safety net and provide universal medical care inadequate and coming late, domestic demand will not help balance the economy and boost manufacturing. Private consumption is only 35% of GDP in China, a much lower percentage than India. The comparable figures for the US are 71%, UK 64%, Australia, Canada, France, Germany and Japan 57%. The balance is now heavily skewed towards government spending. Investment spending from HongKong and Taiwan, the home bases of industrialists with made for export industries inceased investment by 1% in Jan-Feb of 2009 from the year earlier, compared to 17% growth in all of 2008. And foriegn funded companies have comparable figures of 2% for Jan-Feb 2009 compared to 15% growth in all of 2008. Real estate investment growth also fell to 1% for Jan-Feb 2009 compared to 21% for all of 2008. In short the other pillars of growth in housing, and investments from Hong Kong, Taiwan and the West are declining. ...

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Consumer spending boom is over and when you look at the detail in the government numbers on spending consumer spending is already declining. So the idea that consumer stocks like P&G, J&J and Coca Cola and Kimberly Clark will hold up better than other stocks is a mirage. Just this week the idea that stocks of companies doing a lot of business overseas and in infrastructure will hold up better turned out to be an illusion as GE fell by 12% in one day, April 11, 2008, because of earnings shortfalls in its finance units as a result of the new climate in the credit and financial markets. Consumers spent heavily. If consumer spending had continued the trends from the 1990's then it would have gone up $3 trillion less today. It would have been 70% ratio of household debt to GDP, right now its close to 97% of GDP. Some of this $3 trillion estimate of Business Week economist Mandel using Fed data will be what the American consumer will be dealing with as he reduces spending in the years ahead. According to OECD data the ratio of household liabilities to disposable income (charts P11 of BW, April 21, 2008) is close to 1.0 in France and Germany which is contrary to what one would expect considering the more conservative spending there especially Germany, exceeds 1.0 in Japan, and far exceeds 1.0 in the US, and in Canada aabout 1.3, with the highest ratio in Britain at a whopping 1.7, using a ballpark view of the charts. This suggests that Britain is way off the charts in spending, see the link to this so expect spending to be hit hardest in Britain and with financial services being a bigger part of the GDP and the economy in Britain expect higher unemployment in Britain than the rest of Europe....

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French surgeon, Dr Jacques Beres, who is 71, was one of the founders of Medecins San Frontieres, or Doctors Without Borders. He operated on 89 people in Homs and Homs province, during the attack on the region by forces loyal to President Bashar of Syria. Hager, Hodge and Rouselle give an account of the efforts to save lives by Dr. Beres. His trip to Syria was supported by the France-Syria Democracy group and by UAM93, which represents Muslim associations in the Paris suburb of Seine St-Dennis. Dr. Beres told the French radio network RTL that he was sad, and that he saw useless suffering in Homs, with cruelty and meanness for children and families.

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Los Angeles Unified School District has voted for a ban on smartphone use in schools starting in January. Governor Newsom is proposing to have a state wide ban in California to support children and parents in school education. Florida and Indiana are Republican led states with state bans on smartphone in schools. New York Governor Kathy Hochul seeks one in 2025. California Governor Newsom says: "When children and teens are in schools they should be focused on studies, not on screens." He has four children in schools. Dr. Murthy says in NYT that children spending more than 3 hours a day on social media were feeling the double the effects of depression and anxiety symptoms. And the actual use is 4.8 hours per day for this age group.

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U.S. president Trump set up a separate task force called the Great American Revival Industry Groups. He read each of the names out loud during his press conference on Monday, a list of about 200 industry leaders from all the main industry groups, many of whom he personally knows. The first meeting of this group met in a hour long call with about 35 participants.  Most of the leaders praised the strong action taken by the president. On the task of reopening the economy the participants told president Trump that current testing levels were inadequate for effectively reopening the economy.  This is the first of four calls the president plans to make and included leaders from banking, retail, hospitality,  and food industries. The tasks facing the task force are to provide advice on how to reopen the economy and how to respond to the economic damage.  The U.S. president decided to set up this task force after talking to his friends in the business world so that he could get the broadest possible range of advice and thinking. Dr. Fauci, the leading helth expert on the president's team along with Dr. Birx, said on April 14 that reopening would require testing and virus tracking that was efficient and reliable and that the U.S. was not there yet. U.S. has conducted about 3 million tests. Health experts say there should be millions of tests per day before people can return to work. ...

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Argentina's new president takes over a failing economy in 2019. Mr. Fernandez declared a public emergency until 2020. A legislative package recently passed includes tax increases on the wealthy, tax relief for the poorest, a 30% tax on foreign currency transactions abroad, and a currency cap of $200 per person per month imposed by the previous Macri administration.  About 70% of new revenues will go to social programs, including free food vouchers for two million of the poorest Argentines. About 40% of the people in Argentina are in poverty, according to the World Bank, a shocking figure for a country that should be doing better given its natural resources and agricultural resources. The economy is suffering from hyper inflation at over 50%, jumping external debt at 90% of GDP. Total debt is $332 billion including a $57 billion IMF loan. About half the total debt is in foreign currency and is hard to service now that foreign currency reserves have fallen from $66 billion to $43.5 billion. The debt restructuring strategy now is to delay as much of the $70 billion of repayments due before the end of 2020.  ...

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Photos of leaders from US, Europe and Japan at the G-7 meeting on the coastline at Cornwall, UK. Scathing humor from Hannah Jane Parkinson with the photos as The Guardian looks at the other side of these meetings.  Some of this humor- About Merkel- she may be looking forward to taking a break from keeping control of this kindergarden of people who run the world. Justin Trudeau- looks like he has morphed into Llewelyn-Bowen a British television personality who does home renovation, and the suggestion that Johnson could have had Trudeau do his $200,000 home renovation for much less.  Biden and Boris Johnson with Biden's hand over Johnson's shoulder- probably Jane Parkinson says Biden telling Johnson not to pretend and act like a walrus over dinner which Johnson is plain to see planning to do, because I know you are a bit of a clown. All said in humor. Johnson in parliament a lot more human, responsive and caring than any of his predecessors, and Biden taking on the role of Truman and FDR in the mature years of their presidency. ...

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Bangladesh is seen as doing better than India and Pakistan in life expectancy, hunger, fertility rates, and other key development indicators. The new Padma Bridge over the Ganges river operational in 2019 will link different parts of the country and is expected to add 1% to GDP growth. Other infrastructure projects are being planned with $30 billion in projects planned with China including a new port south of Chittagong. The Vision 2021 Plan plans to take Bangladesh out of the poorest nation group by 2021, the 50th anniversary of independence. Germany is the second largest donor and the gender equality in Bangladesh with coeducation in schools is seen by experts as unique among all Muslim countries. The growth of Dhaka and the social and economic change from 5 million garment workers, mostly women and rural could lead to social and cultural change that may be underestimated, says DW.com, providing the view from Germany. DW.com also warns that there are risks for Bangladesh in relying on remittances from Gulf countries, and in not diversifying so that it is not dependent on textile exports alone. Overall German view is that development aid works, and Bangladesh is welcomed from that perspective in Germany. ...

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The IMF's changing views on the value of fiscal austerity. In the current debate about the value of fiscal austerity, there is the IMF view, a German view based on its own experience, and the views of other countries in Europe. The IMF's view has shifted over time. The IMF World Economic Outlook 2010, describes its view of the effects of austerity measures in the form of spending cuts and tax increases- "Fiscal consolidation typically has a contractionary effect on output. A fiscal consolidation equal to 1% of GDP typically reduces GDP by about 0.5% within 2 years and raises the unemployment rate by about 0.3% percentage points." Over the longer term there are benefits as the private sector is not crowded out in the search for captal funding by the excessive government borrowing. The IMF's economic models suggest that it would take 5 years before reaching the breakeven point when the benefits of austerity measures exceed the effects of austerity. The German view held by German central bankers is that the actions stimulate growth in the short term. Manfred Neumann, professor emeritus at the Institute for Economic Policy at the University of Bonn, says this is called the "German hypothesis" as it reflects the experience of Germany from austerity actions taken by Germany. Laurence Ball, professor of Economics at John Hopkins University, is critical of the "German hypothesis" and its application across Europe in different situations. Germany is a large exporting nation and exports helped counterbalance the effects of austerity measures. Within the eurozone with fixed exchange rates the exports of less competitive countries cannot be boosted through devaluing the currency to gain price competitiveness. The other problem is that with interest rates close to zero in the euro zone the central banks cannot cut rates aggressively to counteract the effects of spending cuts. The problem gets compounded when a number of countries are taking austerity measures at the same time accentuating the downturn....

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IMF economist Oliver Blanchard, says the euro's depreciation vis-a-vis the dollar "would be a good thing." Because "in a way Europe needs it more than the U.S., and the U.S. could probably offset it in some way." The IMF forecast is for a 0.3% contraction in the eurozone in 2012 and growth at 0.7% in 2013. Blanchard says a drop in the euro exchange rate of 10% would normally boost growth in GDP by 1.4%.

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The competing choices offered between the Romney-Ryan ticket and the Obama-Biden ticket in the 2012 U.S. presidential election on how large the government should be. Romney-Ryan would keep U.S. government spending to around 19-20% of GDP, closer to its historical average, compared to around 22-23% for the Obama-Biden Democratic approach. The difference is in the approach with Republicans counting on reduced uncertainty for private sector investment to grow and generate jobs.

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David Stockman, director of the Office of Management and Budget under Reagan, is interviewed by Tom Keene. Stockman says the US has $52 trillion of debt on a $14.5 trillion economy, a ratio of 3.6 times GDP. Historically, before 1980, it has been around 1.6. This debtification of the US, he says, is the major problem facing the US today. Stockman sees little or no economic growth in the next 5 to 10 years, as debt reduction progresses.

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World Bank estimates are for the damage from Japan's earthquake and tsunami to cost $122 billion to $235 billion, or between 2.5% and 4% of Japan's GDP. By comparison the Kobe earthquake in 1995 cost $100 billion in damages. Growth will slow in the first half of 2011 by 0.5 percentage points, but it will accelerate in the second half of 2011. Growth will also slow in countries such as Thailand, Indonesia and Philippines which export to Japan.

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The central bank of China, People's Bank of China, cut its benchmark one year deposit rate by 0.25% in Nov 2014 to 2.75%, and reduced the one year lending rate by 0.4% to 5.6%. Banks will be allowed to offer interest rate on deposits of 120% of the benchmark instead of 110% previously. Experts say the effect on GDP is small. The cut helps large firms reduce debt pressures. China is going through a phase of slowing growth.

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Spain's statistics institute INE reports the unemployment rate declined in the third quarter of 2014 to 23.7% from 24.5% in the second quarter of 2014. Emigration declined by 21% and GDP increased by 0.5% in the third quarter 2014. Jobless claims declined by 64,405 in December 2014 to 4.45 million compared to the prior month. Job security also improved with the new contracts up by 2 million in 2014 compared to 2013, following the recent labor reforms.

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The transition for forming Great Britain Railways after three decades of privatization and failed results is now taking shape under Labour. 

The aim is stated in the transition team's messsage-“make the railway simpler and better for everyone”. The GBR website reads: “We are focused on supporting organisations across track and train to work better together to start creating a railway that is easier and better to use; lower cost to taxpayers; better at supporting local and national ambitions; and a simpler sector to work in and do business with.”

The privatization was a mess with failed franchises, delays, and industrial disputes.

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Greg Ip provides useful insights into the nature of the economic recovery in Britain compared to the U.S. by 2015. The recovery in Britain has done better than in the U.S. in job creation, but has lagged behind in productivity gains. The labor force participation rate is 72% in Britain compared to 68% in the U.S., going back up to 2007 levels in Britain, whereas in the U.S. it has steadily declined with some older working class Americans too discouraged to look for work and left behind. Stagnant wage growth is a major issue in Britain, more so than in the U.S. where wage growth is slow. Economic austerity is not the main cause of the economic difficulties as the coalition government of prime minister Cameron relaxed earlier goals for austerity by 2012 with tax revenues and growth below forecasts. The structural budget deficit has been reduced by 6.6% of GDP since the peak, and the Office of Budget Responsibility estimates the UK economy was 1.5%-2% smaller by 2013 because of the austerity policies. Britain was also affected by the eurozone crisis to a larger degree than the U.S. Productivity remains a long term challenge- with needed investments in housing, education and infrastructure, improved lending for new business, and higher tech improvement exports....

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The economics situation in Eastern Europe is looking much better now after the recovery of confidence in the USA and Western Europe with stimulus measures and other steps to ease credit, and the decision at the G20 summit in London in early 2009 to provide a strong line of credit to emerging market economies struggling in this crisis. The European Bank for Reconstruction ad Development sees a 5.2% drop in GDP in 2009 over 2008, and the IMF 4.9% for Eastern European economies. The region varies country by country, with GDP decline forecast for 2009 over the prior year by the IMF showing a modest decline of 0.7% for Poland which is doing well, Czech Republic 3.5%, Hungary 3.3%, Bulgaria 2%. Other countries Lithuania 10%, Ukraine 8% and Russia at 6% decline in GDP for 2009 are hit hardest but thing there are also improving compared to last quarter. The stock market in Poland went up by 40% since the low in February 2009, Hungary by 50%, and Russia by nearly 90%, reflecting this increased confidence. A big difference is in the way the IMF under Dominique Strauss Kahn is operating. WIth the new mandate to help emerging market countries and the new funds from western countries, China and Japan, the IMF is working in cooperation with the European COmmission, the banks, and the national governments in Eastern Europe, to lessen the effects of this crisis. This is afirst for the IMF and aremarkable change. In May 2009 the IMF gave a$21 billion credit line to Poland with no strings attached , the kind of loan it made to Mexico, as aproactive measure to restore confidence. IMF told the Ukraine that a deficit of 4% of GDP was realistic when it released a $2.8 billion tranche recently. Latvia was allowed to run adeficit of 7% for 2009, with a committment to bring this down to 4% in 2010. Another change is that more aid is now given to western banks with souring loans in eastern Europe, so that these banks do not cut back severely or pull out of Eastern European economies. The EBRD has raised $24.5billion to lend to banks and other companies in the region. And $590 million went to UniCredit Italia, an Italina bank heavily exposed to Eastern Europe. Ther EBRD is looking at investing in 12 other western European banks. The Swedes have national schemes too to help the Baltic countries. The political situation is improving also, as the transition to new administration as aresult of voter discontent is being managed wisely. In the Czech Republic acompetent tranisiton government is headed by Jan Fischer, chief statistician, till elections in October 2009. In Hungary the transition government is run by an economist Gordon Bajnai, till an election next spring....

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John Taylor, says Obama and Alan Krueger (Obama's new head of the U.S. Council of Economic Advisors), said some of the same things in early September, 2011, that were part of Obama's old plan to revive the U.S. economy. And the old plan has failed to produce results. The part that puts construction crews to work on the roads, railways and airports was tried earlier in the stimulus plan. Because of a lack of showel ready projects, and the state governments putting most of the money in their state coffers, this only increased infrastructure by a miniscule 0.05 percent of GDP, according to research by Taylor and John Cogan. Taylor's sees the moves by the Obama administration and the Bernanke Fed as not only being ineffective, but having the opposite effect of lowering investment and consumption demand through increased concerns about the federal debt, another financial crisis or the risk of inflation or deflation. The U.S. private sector has the money to make the investments that create jobs but their concerns have led to holding back. Taylor points to the need for a comprehensive economic strategy to replace these temporary interventions. The debt limit agreement of 2011 is a part of this strategy, and he agrees with reducing spending in a gradual way in a weak economy. The other parts of this strategy he says are entitlement reform, tax reform, regulatory reform, monetary reform, including a reappraisal of the role of government in the economy. This should lead to a more stable and predictable economic environment and reduced uncertainty about the future, which is critical to improving supply and demand....

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A 3 page July 14, 2015 update on the IMF's July 2015 debt sustainability analysis paper on Greece, points to severe damage to the Greek economy in the last year, especially under the uncertainty and closing of the banking system, making debt unsustainable without haircuts or extension of maturities and grace periods. About 85 billion euros is the additional financing needed as a result of the mismanagement under the Syriza government and closing of the banking system. It draws the conclusion that "haircuts could be avoided if instead there was a significant further extension of the maturities of the entire stock of European debt (GLF, EFSF) , in the form of doubling of grace and repayment periods, with similiar concessional terms on new financing." The paper adds that the maturity extension would have to be "very dramatic extension with grace periods of say, 30 years on the entire stock of European debt, including new assistance." One shocking part of the analysis is that within the space of one year from July 2014 to July 2015 the Greek economy went from reaching Debt to GDP ratio of 105% in 2022, to 170% after the closing of the banking system by July 12, 2015, according to the IMF. In 2014 it was at 177% of GDP....

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The view from Asian officials and scholars that it was not the savings glut that originated in Asia that caused the economic crisis in the U.S. The idea of a"savings glut" that caused low rates for along time and set up conditions for a housing bubble was presented by Ben Bernanke in 2005 before he was governor of the Fed. It was considered acontributing factor in the crisis. Mr Panitchpakdi, head of the UN Confreence on Trade and Development says that Asians did not borrow heavily for consumption and Americans did. Consumption levels he says are normal in Asia and average 40% of GDP. Household consumption in China is 36% but thats because growth in investment and exports has been very strong, npot because consumption has been weak. Speaking at the same conference Chinese central bank governor Zhou Xiaochuan sais Chinese consumption needs to rise and saving rate fall but micro factors like regulation played an overwhelming part. Zhou says the increase in the savings rate in recent years comes not from households but from corporate savings as retained profits. Lawrence Lau, another economist, says China's trade surplus was at 2% for many years till 2005 when it jumped to 5% of GDP. ...