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Orlik cites a 2011 survey from China's South Western University of Finance and Economics, which surveyed 8000 households and found that 55% of Chinese households had little or no savings for that year. 10% of households control 86% of wealth and 56% of household income. Surveys in 1995 and 2002 showed 10% of households controlled 31% and 41% of wealth. In the U.S. top 10% of households control 74% of the wealth, according to the Federal Reserve figures. What this means, says Orlik, is that before China can shift to consumption based growth the low incomes of the majority of households have to go up, requiring a major policy shift. Under current policies and even with movement in the direction of the DRC/World Bank policy report for China for a gradual shift away from state owned enterprises, there is little prospect for rebalancing the world economy.

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Ring-fencing the retail operations of UK banks from possible losses in the investment banking activities was part of proposals by the Independent Commission on Banking in the UK. Now a parliamentary commission calls for periodic reviews of such ring-fences to ensure this separation is actually still in place, and not been diluted or otherwise removed by bending the rules to favor banks because of lobbying by the banks. It says "over time the ring-fence will be tested and challenged by the banks. Politicians too could succumb to lobbying from banks and others, adding to pressures to put holes in the ring-fence." The report emphasized that a lot more needs to be done to restore standards in banking, especially after recent reports of LIBOR and other revelations of market rigging and corruption. The emphasis in the report is for banks "to be discouraged from gaming the rules."

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The recent appointment of fast food executive Andrew Puzder as Labor Secretary has caused great concern among union leaders. Puzder supports a $9 minimum wage compared to $15 supported by Democrats. Unions now represent 7% of the labor force, down from a high of 20% during Reagan's time when Reagan appointed a construction company executive as Labor Secretary and cut regulations.  Globalization has thinned the ranks of workers in unions. And the failure of Democratic administrations to stem the shift of factories overseas to China, Mexico and other places, as part of global supply chains focussed on cost, has weakened Democratic support among workers since the period of Bill Clinton. It eroded to the point where Obama won 65% of support among unions and Hillary Clinton won 56% in 2016. Interestingly the Republican Romney gained 33% versus 37% for Trump, showing voters were more inclined to move away from Democrats and only a smaller number willing to support Republicans, but the shift enough to give Republicans a win in 2016 for the presidency. The figures are from a Election Day survey of trade union AFL-CIO, and a larger proportion in midwestern states showed disaffection with policies from Clinton to Obama. In fact Obama spent years promoting another free trade agreement TPP that favored tech more than auto and older industries, just as Bill Clinton had promoted NAFTA, without giving thought to what this was doing to its worker base of support. A similar situation happened with Social Democrats in Germany as a SPD administration moved to the centre and handed Christian Democrats led by Merkel a win in parliamentary elections. As Democrats such as former Labor Secretary Reich, a professor at UC Berkeley who served under Bill Clinton, describe the problems of working class people their is less reflection on the impact of the changes from globalization and how Democrats handled or mishandled it, and more on the politics between the two parties.   ...

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Full face veils for women are now a topic in the immigration debate in Germany. Interior Minister Thomas de Maiziere now favors a ban on full face veils, agreeing with state level party members of the Christian Democratic Union. CDU interior ministers are now in agreement to come up with legislation to require that people show their faces where necessary "for living together in our society." Maziere says the Social Democrats SPD party agrees with much of this agreement, called the Berlin declaration. Chancellor Merkel told news group RND that she understands and accepts that "a fully covered woman has little chance of integrating in Germany." Some CDU officials such as state premier of Hesse, Volker Bouffier, say its all about liberating women, because he thinks it simply isn't true that this is what a woman wants. Other CDU leaders interior ministers in Berlin and Mecklenburg, Henkel and Caffier, say dual citizenship needs to be abolished. The Berlin Declaration put off this issue by requiring a report on this by 2019, on whether it helps integration. The Berlin Declaration calls for 15,000 additional police officers, though the association BDK of police officers says this is not enough. ...

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This Wall Street Journal editorial comes out in favor of higher capital reserve requirements similiar to that suggested by Federal Reserve Board governor Daniel Tarullo. The Journal says that if regulators are serious in the U.S. about controlling systemic risk, then the 14% rule or a 15% rule for assets held in reserve by banks should be adopted. Daniel Tarullo had suggested a 14% capital reserve requirement. These requirements would be phased in gradually over several years. Basel III requirements require only a 7% requirement and is phased in over many years. Capital standards are likely to be gamed. For this reason the requirement for only Tier 1 capital to be eligible is essential. What about the Basel III standards and the European banks? Would this put them in a better position to earn higher returns. This should be a problem left for European taxpayers to tackle says the Journal. As long as U.S. taxpayers are supporting U.S. banks with an implicit subsidy to take on larger amounts of risk -because they will be saved in a crisis with taxpayer dollars- the Journal says it makes sense to require 10-14% in capital reserves. It cites the Japanese banks which were highly overleveraged with lower capital reserves compared to American banks, and fared poorly. The Dodd-Frank bill imposes a complicated set of regulatory requirements with regulators required to write new sets of rules. The editorial concludes that it is far better to tackle the problems in the banking system with a sufficiently high requirement for capital reserves to manage risks than to have the detailed rule making on every subject that Dodd-Frank suggests....

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This editorial in the Washington Post describes joining Russia in joint action in Syria and Iraq as a dangerous policy for the U.S., for several reasons. The main being that Russia has been the obstacle to peace in the region because of the way all Sunnis in the Muslim world now see Russian actions as leading to millions of refugees and the prolonged war. It also says Russian forces are not effective in the current campaign. It cites Secretary of State Kerry's comments about Sunni perceptions of Russia's role.

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President Obama proposes changes in taxes to fund programs to aid students such as free 2 years of community college, aid for student loans, and financial help for middle class families. Senate Majority Leader McConnell says the proposals to raise income taxes for high income Americans with $320 billion in new revenues over 10 years, reduced prospects for changes in the tax system. He said the Obama proposals were designed " to excite the base but not designed to pass." Obama says "the shadow of crisis has passed," and calls for "middle class economics," and improving incomes for anyone making the effort. The call comes as inequality widened during the long recession and some of the Obama administration's policies such as on homeowner foreclosure, and lack of focus on unemployment during the first term, may have actually worsened inequality. The call also comes late in the second term in Jan 2015- with presidential elections in 2016- after the Republicans gain control of both Houses of Congress, which is why Republicans dismiss this as mere political talking points for the base....

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Entous, Malas and Abushakra of the WSJ give a detailed account of the series of smaller chemical attacks that ended with this large attack in the suburbs of Damascus in August 2013, the actions of key participants, and the responses of the global community.

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Israeli intelligence from a Syria unit that oversees the movement of chemical weapons in Syria was the source confirming that the weapons were moved to Damascus suburbs to prepare for an attack on a rebel held area.

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Bank of England Governor warns that British banks are undercapitalized in Nov. 2012 and need to add to reserves for additional losses.