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Questions remain about how the U.S. budget battle and possible shutdown of government will affect the political support for the Democrats and Republicans.

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A 93 year old hero of the French Resistance, Stephane Hessel, publishes a pamphlet called "Indignez-Vous!," released by a small publishing house from the publisher's home. He calls for resisting the "international dictatorship of the financial markets" and "defending the values of modern democracy." He protests France's treatment of illegal immigrants, the influence on the media by the affluent, cuts to the social safety net, French educational reforms. It was first published in October, and now has sold 1.5 million copies, all through word of mouth advertising. It has been translated into Spanish, Italian, Portuguese, and Greek. New editions are planned for Slovenian, Korean, Japanese, Swedish and other languages. In Britain, it was published with the title "Time for Outrage." The pamphlet is about 4000 words and only 14 pages of text. Its timing is good, as the French are debating what to do in their politics with an election approaching and Sarkozy's standing at new lows. The short length and low price are a big plus, at $4 it made a convenient Christmas gift. Britain, Spain, Portugal and Greece are going through austerity cuts. Public sentiment has been aroused by the cuts, and by the overarching influence of financial markets on the economies of these countries. Some of these countries referred derisively as piigs- Portugal, Ireland, Greece, Spain -countries in the financial markets. The economic impact has fallen disproportionately on the young, with high jobless rate for young people from Italy to Spain, and cuts in funding for universities and schools in the UK also fall heavily on young people. A sense that something has gone wrong in the free market system and the western world. Austerity cuts in spending in the U.S. create a similiar feeling and joblessness among young people is also high in the U.S....

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Glenn Kessler goes over the numbers cited by Romney and Obama and finds distortions on both sides. Which leaves voters with going by the records of Romney as governor of Massachusetts and Obama as president during 2004-2008, and their clearly stated policy committments on how they would approach healthcare, Medicare, Social Security, unemployment, incomes, and other issues uppermost on the minds of American voters.

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With government spending currently at 24% of GDP, the budget proposed by Paul Ryan, chairman of the House Budget Commttee, proposes to bring this down to 22.5% in 2012, and to 20% by 2018. The Ryan proposal would cut spending by $5.8 trillion for 2011-2021, with spending $6.2 trillion less than proposed by the Obama administration. It is a bold effort by House Republicans to bring the deficits down from the $1 trillion plus levels of the last 3 years. Major changes are made under this proposal to Medicare, and Medicaid. People who retire after 2021, would choose from an array of private insurance programs, and the federal government would help pay the premium. Medicare under this arrangement would be a "premium support" system. Medicaid would become a block grant for the states. This proposal estimates a saving of $771 billion on Medicaid over 10 years. The Food Stamp program would also become a block grant system. In addition to this the top individual and corporate tax rates would be 25% instead of 25%, with the changes being revenue neutral as a series of tax breaks would be eliminated....

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The U.S. labor force participation rate is still at a low 63.2% in March 2014.

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Two weeks after his election Donald Trump says the U.S. will not join the Trans Pacific Trade Agreement during his term in office. Barack Obama took seven years to negotiate the trade agreement which was opposed by trade unions, the auto industry and was unpopular in the midwestern U.S. because of the impact of trade in hollowing out the manufacturing sector. Here Frank Sieren of the DW.com points out that the agreement was not really about trade, as most of the gains of trade had already been realized according to experts. It was part of the "pivot to Asia" to maintain American dominance in the region, says Sieren. After China pulled together some Asian and European countries into its trade agreement, the Regional Comprehensive Economic Partnership (RCEP), the U.S. pushed for TPP as a counterweight to the China sponsored trade zone. China says it will try to integrate the countries in TPP into the trade zone it has sponsored. President Trump has said that the U.S. is better off negotiating agreements with each country and not getting into multilateral trade agreements. He fought the election campaign on the basis of the opposition to TPP and trade agreements that unfairly hurt American workers. This could have provided the 110,000 margin of victory in the states suffering from the hollowing out in manufacturing such as Michigan, Wisconsin, Ohio and Pennsylvania. A similar hollowing out in Ontario favored Justin Trudeau's Liberals against the Conservatives in Canada's election. ...

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U.S. Senator Ben Sasse suggests an alternative approach of simply repealing the Affordable Care Act called Obamacare and replacing it at a later date. This is endorsed by president Trump. This is the new Republican strategy in July 2017. Forty nine senators voted in favor of this repeal in 2015, when president Obama vetoed this legislation. Two more senators are expected to support repeal according to Ben Sasse.

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New York state governor Andrew Cuomo says the turnaound in the last 15 months for the state budget shows that things went from "a model of dysfunction to a model of function."

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A study by the National Employment Law Project shows most of the job creation in the economic recovery to 2014 in the U.S. is replacing the better paying jobs with lower paying jobs in fast food retail and similiar low paying industries.

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Andy Grove makes this passionate plea for the dignity of workers in America in 2010. It is worth reading in 2020 what this founder of Intel Corp and pioneering spirit of Silicon Valley has to say. Andy Grove of Intel says there is something seriously wrong when the unemployment rate in the Bay Area is higher than the 9.7% national average for the USA. American companies have added jobs like crazy in Asia, but things are sputtering back home. Hon Hai has 800,000 employees and makes most of the electronic and computer products for American companies. Grove says startups are not the answer, unless they scale up and create jobs the way Intel did starting back in 1968, with a $3 million capital infusion by investors. The move from the first production model to mass production is critical, as companies hire thousands of people. Innovation and scaling up have to go together. He makes his point clearly by pointing out that Apple has 25,000 employees. For every Apple employee there are 10 employees in China working on Apple iMacs, iPods, iPhones. And he adds that the same 10 to 1 relationship applies to other U.S. tech companies. And here Grove asks the tough question by first posing an answer. He says it sounds like- no big deal, we keep the high paying jobs, we keep most of the profits, but what kind of society are we going to have with highly paid professional workers and lots of people unemployed? And he doesn't mention that there are a lot more young people unemployed. He says the US has become very inefficient at creating tech jobs, and it would be a great mistake not to act decisively early on. And adds that the investments in such areas as solar power and electric car batteries have to be made early on to maintain leadership in these areas. Grove faults academics like Alan Blinder and others who say loss of manufacturing jobs and whole industries was no big deal. The U.S. has forgotten the value of manufacturing jobs. He wants to see America focus on jobs and rebuild its industrial base. And less of transferring engineering knowhow and new technologies overseas, technology that can help bring innovation and scaling up of factories at home. In his view individual companies doing their own thing, in a misguided fashion that jobs don't matter, is not the answer to the situation we face. The industrial economies of Asia, China at the present day, have focussed on jobs and technology, and scaled up. Grove reminds readers of the situation in America in 1932, when jobless veterans demonstrating outside the White House in large numbers were dispersed by soldiers with live ammunition and fixed bayonets. This makes him shudder at the very thought of it, and brings back memories of his early years in Hungary, as a young man in 1956. Are we listening? ...

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Stephen Moore of the WSJ interviews Grover Norquist, head of the advocacy group Americans for Tax Reform. Republicans in Congress and other Republican leaders have signed on to the "no new taxes pledge" promoted by Norquist. There is increasing pressure on Norquist as the media, White House, and executives on Wall Street call for flexible positions from both sides on taxes and spending cuts. Norquist insists that not much has changed. He says that the increase in taxes on the rich is only symbolic and has to be followed up with increasing taxes on the middle class. He cites a Rasmussen poll that shows 75% of Americans believe this. Norquist is convinced that the Democrats with their spending plans are out to take the U.S. in the direction of European economies, the tax increase on the rich would be followed up with a energy tax or a value added tax to pay for unrestrained spending. His solution is for Republicans to pass a bill that extends the current tax rates past January after roughing it through the tax cliff date. Even the sequester option is better than increasing taxes says Norquist, letting the Defense Department make the cuts where appropriate. Norquist does not favor the option of reducing tax loopholes and deductions as a way to increase taxes as proposed by Simpson Bowles commission and Ryan-Romney in the election campaign. ...

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Roosevelt say experts was a great crisis manager but not great when it comes to policies to create jobs. His achievements were stabilizing the banking system with deposit insurance, government investment in banks, and restrictions on banking practices, creation of the SEC, and fireside chats that steadied the national mood. Unemployment when he took office in 1933 was 25% from 3% in 1929, and industrial production had dropped 40% since 1929. So FDR took office when a lot of the damage had already been done, compared to that Obama takes office earlier in this downturn. And Roosevelt did not fully grasp John Maynard Keynes's advice when he visited the White House in 1934. Keynes complained to Labor Secretary Ms. Perkins that he had thought the President was more literate economically speaking, while the President felt Keynes had a rigmarole of figures he did not understand. Roosevelt said of Keynes: "He must be a mathematician rather than a political economist." It took some time for government spending to take hold. Throughout the 1930's government spending remained around 20% as a share of the economy. Today its 35%. And the average unemployment stayed at stubborn 17% on average for the decade of the 1930's. It was not till the 1940's that things changed. Total government spending as a share of the economy reached 52% in 1942 with the onset of the war, and peaked at 70% in 1944 when the unemployment rate dropped to 1%. One lesson experts say is that its easier to stem unemployment and job losses by action earlier in the downward spiral through vigorous action by government. In retrospect because industrial production fell by 40% during the 1930's experts say Roosevelt was actually timid in his response. U.S. Fed chairman Bernanke is a student of this period and draws a similiar lesson from that period for vigorous action early in the crisis....

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The Bank of England under Governor Carney cut interest rates 0.25% from a low of 0.5%, and suggested further cuts were on the way. This follows Brexit and action by the central bank to avoid a recession. The British pound fell about 1.6% to $1.3112 against the dollar, and euro 1.770 against the euro. Government borrowing costs declined, and the 10 year bonds yield dropped to 0.639%. Economic growth in Britian for the second half 2016 will be little or none. The GDP growth forecast for 2017 is now 0.8%, down from 2.3% before the Brexit vote. Bank of England staff say their calculations show Brexit vote has "conservatively" reduced growth by 2.5 percentage points over 3 years even after the rate cuts and stimulus action of the Bank of England, which other estimates show could add 0.5% over 2 years. This brings the Brexit impact to about 3% loss in GDP over 3 years, with these reliable estimates. Months after the Brexit vote the question remains whether Brexit supporters misled British voters, leaving the Bank of England to come up with a way to prevent a recession. After the austerity cuts since 2009 and the prospect of some improvement in the economy, this is a step backwards at a time when some of the working and middle class find themselves left behind. ...

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California's governor Jerry Brown has put forward his budget plan for fiscal 2013 showing a budget surplus of $851 million. Brown was able to get Proposition 30 passed in the November 2008 elections. Higher income earners pay more in taxes for several years and the sales tax is increased. An improved economy with unemployment down from 11.3% in 2011 to 9.8% in Nov. 2012 is helping with higher tax revenues. General fund revenues are expected to increase 3.3% to $98.5 billion in the 2013 fiscal year from $95.4 billion the prior year. Brown has accomplished a remarkable feat of balancing the budget for 2013 and still continuing to invest in education and healthcare. Spending will increase 5% to $97.7 billion in fiscal 2013 from $93 billion in fiscal 2012 with higher spending on education and health care and lower spending in other areas. Brown's path to achieving this was eased after Democrats won control of both houses in the the state legislature. Says Brown: "Right now, for the next 4 years, we'll be talking about a balanced budget, we're talking about living within our means... This is new." Even Republicans praise this effort from a veteran of California politics- his father was governor in the Kennedy years, and he was governor in the 1980's....

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PC shipments in China of 18.5 million units in the second quarter of 2011 exceed U.S. shipments of 17.7 million, according to research firm IDC. IDC estimates China's PC shipments in 2012 at 85.1 million units, and U.S. PC shipments at 76.6 million. Lenovo has grown rapidly in China and now has 12.2% of the global PC market. Lenovo has a larger market share in China than H-P or Dell.

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Hubbard was Chairman of the Council of Economic Advisors under President Bush. His plan is for the government and Congress to allow all residential, mortgages on private residences to be refinanced into 30 year fixed rate mortgages at 5.25% and place those mortgages under Freddie and Fannie. The idea is to have a low enough rate to support house prices. Where the homes are worth less than the total amount of the loan balance the mortgages would be refinanced into a 30 year fixed rate loan to be held by a new agency modeled on the 1930's era Homeowners Loan Corporation. New mortgages would be made of upto 95% of the current value of a home, with owners and servicers of the loan splitting the losses on refinancing the mortgage with the government agency. Servicers would have to accept refinancing on all or none of their mortgages, no cherry picking. And the government could take an equity position in return for the mortgage writedown so that taxpayers do well with a better housing market....

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Baby boomers born in 1955 had 2 more years of schooling than their parents by age 30. By contrast baby boomers born in 1980 had 8 months more schooling than their parents by age 30. This is the shown in a study by Harvard professors Goldin and Katz. A big part of the problem is the high dropout rates at some high schools in the U.S. Another part of the problem which is growing today is the high cost of tution discouraging students from going to college, and the large student debt being borne by parents. Student debt reached $1 trillion in the U.S. by 2012.