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Moody's says Spanish banks have not set aside reserves for $160 billion in potential losses.

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New York city Mayor Bloomberg, says President Obama and Republicans should stop promising a free lunch, or something for nothing. He points to Obama's reelection strategy of higher taxes for the rich- by taxing those earning over $1 million at minimum of 30% in federal income taxes- as generating $1.1 billion, according to Congress's Joint Committee on Taxation. This would make little difference on a federal government with $1.2 trillion gap in spending and revenue. And he says Republicans who say making the Bush tax cuts permanent while at the same time cutting the deficit are promising a free lunch, with no connection to reality. The answer says Bloomberg should be to eliminate the Bush tax cuts for all groups, for shared sacrifice, and for Congress to pass the Simpson-Bowles deficit reduction plan with $4 trillion in savings on an up or down vote.

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Jeb Bush on the Republican party and lack of willingness to compromise to come up with viable solutions to economic problems facing the U.S.

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The Bernanke Fed's low interest rates are hurting seniors and savers who are earning very little on their savings. This is taking money away from millions of savers and reducing consumption spending by seniors and savers. According to the Labor Department average annual investment income for 24.6 million American households headed by seniors over the age of 65 was $2,564 in 2009. This is down significantly from prior years. A survey by the Employee Benefit Research Institute shows that one in three retirees have had to dig deeper into their savings to cover basic necessities in 2010. With inflation at an annualized rate of 5.6% in the first quarter 2011, interest rates of 0.24% on savings accounts do little to cover inflation. There is a sense that this is hurting retirees who have lived prudently and worked hard and on savers of different ages. This actually discourages healthy savings that would protect Americans from job losses and build a safer future. American contributions to bank and 401 (k) accounts is only 4% of disposable income in 2010, according to the Fed. Another danger is that the smaller 401 (k) accounts of the average American family after losses in earlier stock market declines, will again be exposed to the fluctuations and risk in the stock market. This could happen as money is shifted to the stock market in the hope of earning better returns. Seniors are an active voting group, and voting patterns show a shift to Congressional candidates who question Fed policy....

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A decade after the 2004 speech at the Democratic National Convention, Obama's message of change and hope as seen by American voters in 2014.

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The bleak situation for Americans facing retirement as most people age 65 are likely to outlive their savings. The median financial net worth of an American household is $10,890, according to work done by Edward Wolff, an economics professor at New York University. This estimate is based on 2010 Federal Reserve data updated for the movement in market indexes. Even the ten percent of Americans who have saved $1 million will have difficulty as a 2% withdrawal rate would provide only $20,000 to supplement Social Security income. Earlier generations of Americans could depend on income from bonds. In today's low interest rate environment, the benchmark 10 year Treasury note is at 2.2% in 2013, bonds will provide only a fraction of the income generated in earlier periods. Stock markets are volatile and pose additional risks for seniors in retirement.

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Kristof says social ills- the lack of stable marraiges, drug use, poor day care resources- compound the problems of lack of education beyond high school in America's white underclass. The lack of good manufacturing jobs and lower wages have hit people with only a high school education the hardest. Two decades of decline in good manufacturing jobs with globalization have hit this part of the population in the U.S. hard creating increasing inequality in America. He sounds a Moynihan type call to the plight of America's poorest white communities.

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Unemployment is over 25% on Chicago's South Side black neighborhoods. Conditions have deteriorated with the higher unemployment since the economic crisis. Residents see little improvement since the days of Obama as a community activist in this part of the city.

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Herbert cites figures from the Center for Labor Market Studies at Northeastern University in Boston which divides households into 10 groups based on annual household income at looks at unemployment levels in eachfot 4th quarter 2009. The highest group with incomes of larger than $150,000 had unemployment of 3.2%, the next group at $100,000 to $149,999 at 4%, households earning $60,000 to $75,000 had jobless rate of 6.4%, with $50,000 to $59,000 a 7.8% jobless rate. Its only when you get $40,000 to $49,000 that you see jobless rates of 9%, that is close to the national average. The worst pain is in the lower middle class groups with the 7.8% and 9% unemployment and in the income groups of $12,500 to $20,000 which have 19.1% unemployment. For workers at the bottom the unemployment rate is 31%! The workers in service industries, such as food preparers, building cleaners, less educated, high school dropouts, blue collar workers, workers in the construction industry, many blacks and Hispanics, are all hard hit. This also gives some idea why the jobless situation does not cause the same anguish in the media coverage as most of it is concentrated among young people, immigrants, illegal immigrants, Hispanics, minorities, and in service and construction industry type occupations. This creates a fragile situation from a social cohesion perspective especially as the lower middle class is also in the same situation and this combined with the working class blue collar and service and construction workers is a large segmet of society....

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Jennifer Rubin of the Washington Post says the Republican candidates Rubio and Kasich have the best chance in the 2016 presidential election because they are seen as truly concerned about the problems of working class Americans. Coming from aspiring working class families they are familiar with the problems of working class whites and minorities, and understand the significance of upward mobility in America's future.

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This NYT editorial points to the dangers lurking behid the jobless numbers. The House bill that passed recently for $154 billion to extend unemployment benefits- set to expire in Feb 2010- to June 2010, and increases aid to local and state governments. It also includes infrastructure spending and help for small business. But it does not do enough for young people whose joblesness is at all time high. For instance only 4 in 100 low income black students found work in Fall 2009 This according to a study by the Northeastern University Center for Labor Market Studies. According to the analysis done by this Center the employment rates among teenagers has risen four times faster than the rate among adults since 2000, and todayme over 65 are more likely to find jobs than youth of 16-19 years.

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Harold Meyerson looks into the causes of the decline of white working class Americans by 2015. A whole section of society that was helped by the work of FDR is being undone by a combination of forces, from the decline in working class wages and jobs through globalized business, social structures unravelling, and support structures weakening. Meyerson refers to the Deaton-Case Princeton study on increasing death rates for this group. The white working class is much smaller now than in 1940 when he says 82% of Americans over 25 had only an high school education, down to 29% in 2007. The result is that it has less power to affect policies, yet is close to one third of Americans. Economic recovery, the American dream, all remain hobbled without efforts to tackle this problem. Trump's effort to appeal to this class, Meyerson points out, is similiar to the National Front's effort in France, making the political dialogue even more divisive by targeting immigrants.

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43.6 million Americans are on food stamps More than 14% of the US population used food stamps in November 2010, according to the US Department of Agriculture. This is up 14% from a year earlier. The year over year rise in the use of food stamps shows 5,411,000 more people on food stamps. In the midwest industrial states Michigan has 19.4% of the population on food stamps, Wisconsin 13.6%, Ohio 15.4%, Illinois 13.5% In the larger states California has 9.5%, Florida 15.9%, New York 15.1%, Texas 15.6%. The year over year rise in the number of people on food stamps is largest in Texas 697,000, and in Florida with 563,000.

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Meet Victor Brown, one of the remaining 450 workers at Buick City, GM's sprawling plants in Flint, where in the 1980's 27,000 workers built GM cars. Victor Brown of Clio, Michigan, and O.C. Cooper do not want to leave, and have repeatedly turned down buyout offers from GM preferring to stay with GM even if it enters bankruptcy, and take their chances. Since 2006, GM has persuaded 60,000 of its hourly employees- about half of the total hourly workforce at GM in the USA- to take cash buyouts and leave. Cooper says, this is the only life he knows, he is 64, a machine operator at Flint North, a run down engine plant in Flint, Michigan. Every day for the 42 years he has worked here, he gets up, washes up, and drives to the plant. He can't imagine anything else. If he leaves he will give up $60,000, for apension half that amount, with no guarantee that its secure after a GM bankruptcy. Victor Brown is 55, a repairman with 36 years at GM, he is divorced and putting a son through college. A year ago he and others turned down a buyout offer for $62,500 to retire with all benefits, now this is down to $20,000, and a car voucher for $25,000. GM needs an additional 21,000 jobs to be cut and closing of 13 plants in its latest restructuring under help and supervision from the Obama administration. ...

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A new bipartisan plan on comprehensive immigration reform with support from Senators Graham, McCain, Schumer, sets forth principles for legislation. This includes Democratic requirements for a pathway to citizenship for 11 million illegal immigrants and Republican requirements for stronger enforcement. A separate bill sponsored by Senator Orrin Hatch would expand the H1-B program for skilled immigrants and increase the number of green cards. Senator McCain said on a television news show: "We can't go on forever with 11 million people living in this country in the shadows in an illegal status."

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Not since the days of the Vietnam War has Madison, Wisconsin seen the kinds of demonstrations that were seen last week. This raises a question whether this creates an awakening of the progressive movement. Wisconsin, New Jersey, Ohio, seem to suggest that whats happening in the states will become more important in shaping public opinion as the U.S. elections of 2012 approach. Ohio also has a plan by Governor John Kasich that restricts collective bargaining rights of public workers. A key question is how much public support there is for reduction of pension and health benefits of public employees. Even though the favorable ratings of unions are at a low, according to a survey by the Pew Research Center, the public is divided over whether it supports unions or state governments in disputes about benefits, with slightly more support for the unions. And other states such as Michigan with new Republican governors and majorities in state legislatures say they are not taking the path of Wisconsin in limiting collective bargaining rights, suggesting caution in this respect, even as they plan cuts in benefits. Because of the intensity and passion that has been aroused something more than the calculations of the politicians, including the President, may be at play. President Obama, says the Washington Post, is playing a longer game on the budget, with a measured response, but also saying that teachers, firefighters and police officers were being vilified. The demonstrations in Wisconsin were more bottom up than top down, and have the potential to affect the political dynamic and the way the U.S. addresses its problems in unpredictable ways....

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Expectations of lower inflation in the U.S. for 2012. The Commerce Department showed inflation slowing with consumer prices up 2.5% over the prior year in November, down from 2.7% in October and 2.9% in September. The Labor Department's consumer price index went up by 0.8% annual rate in the last 3 months. Increase in labor costs are also mild. Hourly wages of private sector U.S. workers were up 1.8% in November 2011 over the prior year. Commodity demand in emerging markets is slowing with lower growth, which reduces pressure on commodity prices. The consumer price index is expected to rise by 1.2% in 2012, according to J.P. Morgan economists. The Federal Reserve in its recent statement after a Dec. 13 meeting stated it expects inflation at below 2%.