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Angela Merkel loses a local election in her region of Mecklenburg Pomerania in Germany. The CDU comes in third at 19% following the AfD anti-immigration party with 21%. The Social Democrats party gets over 31%. Commentators say this region is more likely to take an anti-immigrant stance, compared to other parts of Germany. The next elections are on Sept 18 in Berlin, which is very different from parts of the former communist East Germany. The CDU has embraced the themes of "homeland," and public safety, and Merkel says about the decision a year ago on immigration-"it was not about opening the border to everyone- it was about not shutting it to those who made their way to us from Hungary, on foot and in great need of help." Merkel is likely to regain her footing with voters, as the vote in Mecklenburg was more of a protest vote and Merkel has adapted current policy to check immigration. Peter Tauber, general secretary for the CDU, Merkel's party, sees the vote also reflecting anger of those who have lost out in the moves to globalization, and not just about immigration. ...

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Peter Fisher spent 15 years at the New York Fed and was Under Secretary of the Treasury for domestic finance. Interviewed by Maria Bartiromo he says the fourth quarter is going to be very hard and its going to take several quarters to get some stability and freeing up credit markets. Why did this happen. We had says Peter Fisher several years of negative interest rates the middle of this decade, and its this essentially free money that distorted the system. Capitalism he says is premised on the idea that capital is a scarce commodity rationed with a price mechanism. And everybody took advantage of this to leverage themselves too far from the clever guys on Wall Street to people in the housing and financial services industries. This in his view was the engine that led the economy so far astray. Fisher does not believe all financial institutions should be treated by fed and treasury the same way. The ones that overly leveraged with weak managements and are doing poorly ad not likely to survive should be closed. Once it is clear that the prospects for some financial institutions are dim and their survival is uncertain he thinks Fed and Treasury should not wait around for consolidation but close these as quickly as possible. He sees some banks being closed and not just commercial banks. ...

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John T. Chambers has some very useful guidance on questions to ask and what to look for in hiring. Fairly simple but a lot of attention needed to get the right answers and make sure the hiring is done right. Here he talks to NYT's Adam Bryant. How did Chambers respond to dyslexia as a child? See it as a curve ball said a teacher,once you see it and observe that it comes a certain way, then you can handle it. He reads right to left. And he learned about near death experiences with Cisco in 2001. And he learnt from Jack Welch why they are very powerful and useful. He learnt from his parent, an obstetrician, that you are best being calm when there is an accident happening and people are not. People express emotions at such times and this says little about what's really going on, said his dad. Chambers admits his virtue and fault about being a command and control person, possibly from his early training at IBM. But he is open to changing when pushed, he says. He says his wife of 35 years keeps him from becoming too self-conscious. Questions he asks new people interviewed about joining the company. Tell me about your results. Tell me about your mistakes and failures. All of us have mistakes and failures, he says, so someone who says "I can't think of one, immediately loses credibility." The ability to be candid about mistakes made, and what they would do differently this time, helps make people learners and adapters as they go into different things. He says that he learns more from these two questions than from anything else. He also asks who are the best people you recruited and developed, and where are they today. He does this one gently , which is to figure out if they are oriented towards the customer or merely see the customer as someone who gets in the way. And then he looks for communications skills, and the key part of that is listening. He likes to see how they listen, how they interpret, and are they willing to challenge you. And then he looks for their knowledge in the industry segments, and the areas he is interested in. And that kind of covers the things he has looked for in the last 20 years. For today's world he looks especially for collaboration skills, teamwork skills, and their use of technology to share information, collaborate and work as a team. As its not immediately clear whether someone who says he is a team player is actually a team player, he checks with other people who know the person. Chambers grew up in a individualist world. So he is candid about this. He says that when he was trained it was about me and winning as an individual. The future, he adds, is about how do groups think and work together collaboratively. And how can one add discipline to that through practice and capability, and being able to use the necessary technologies. ...

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President Trump reset the border debate after the government shutdown on border wall funding by emphasizing immigration issues but not repeating his threat to call an emergency. This time he was more conciliatory on the border wall issue, explaining that it be " a smart, strategic, see through steel barrier, not just a simple concrete wall," and deployed in areas identified by border agents as having the greatest need. On withdrawal from Middle East, the president said "great nations do not fight endless wars." Trump now faces a rocky second half of his term because Democrats control the House of Representatives after the 2018 Congressional elections. He said "if there is going to be peace and legislation, there cannot be a war and investigation." He faces the Mueller investigation by Special Counsel Mueller on the meddling by foreign powers in U.S. 2016 presidential election, with the arrest of lawyer Roger Stone recently, and Democrats in no mood to compromise on the wall. ...

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European leaders meeting in Brussels set Sunday July 12, 2015, as the final day by which Greece is expected to submit proposals and reach an agreement with the EU. All EU leaders will be present at the Sunday meeting at which Greece's postion as a member in the eurozone will be settled, and measures for humanitarian aid to Greece can be discussed. EU chief Juncker called Sunday July 12, 2015 the deadline date. Greece's finance minister Tsakalotos surprised European leaders by not having any proposals to submit. German chancellor Merkel said at a news conference- "There are only a few days left for a discussion on what's going to happen in the future. What we need now is a multi-annual program tht goes far beyond the program that we discussed ony 10 days ago." Experts at Bruegel research organization in Brussels say the ECB providing emergency financing is dependent on Greece coming to an agreement with the EU, and if no agreement is reached Greece's exit from the eurozone is very likely....

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U.S. Commerce Secretary, Wilbur Ross, has balanced the rhetoric of president Trump on trade in the NAFTA debate by saying the U.S. is looking for win-win solutions in trade relations with Mexico. At the WSJ CFO network Ross says the trade regime from the post war years is now an anachronism and does not work well especially for the U.S. Many experts agree that the trade framework from that period is problematic. It does not take into account, for instance say experts, the situation where a command economy such as China could help manufacturing industries with state policies, including currency policies. The rapid growth in China was different from the rapid growth in an earlier period of Japan, in terms of its impact say experts. The U.S was the dominant economy during the sixties, and the growth in Japan was not at the accelerated pace and of the magnitude that happened in China. As a result the impact on  some communities in the U.S. was much more intense in the last two decades, as documented by prominent trade studies, leading to the sense that trade did not work for these communities. ...

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US House Republicans are pursuing cuts in spending of as much as 50% in many programs that are considered essential, such as a 50% cut in foreign aid at a time of global food insecurity, deep cuts in the FBI's counter intelligence budget, deep cuts in healthcare services and housing to low income Americans following the pandemic and high inflation, and other cuts to services benefiting workers and families. Democrats in Congress and president Biden oppose such cuts and hope to eliminate the deficit with cuts that do not place an unfair burden- taxes on the wealthiest with over $100 million and on stock buybacks would generate about $2 trillion to cover the whole deficit which is in the range of $1.4 trillion in 2023 moving to $2 trillion a year. Much of the Republican plan is being shaped by Mr. Trump's former Budget Director, Russell Vought, says this report in the NYT. Mr. Vought calls it an attack on the bureaucracy and woke spending. Other Republicans see this as an ideological approach that does not address today's problems. Chuck Schumer, Democrats Senate Majority Leader asks Republicans to spell out their plan. ...

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IBM performance may be affected by the shift to the cloud computing environment. Businesses increasingly prefer to rent computing capabilities and software in smaller packages and easier implementation than the costly software packages IBM sells. IBM shares declined by 8% on April 19, 2013 after revenues declined by 5% in 1st quarter 2013.

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The large increase in auto sales in 2013 to 15.6 million follows a strong rebound in the U.S. market. The gains in sales over 2009 at the peak of the financial crisis, shows Chrysler at 93% gain in sales over 2009, VW at 92%, Nissan 62% and Ford 54%, according to Autodata. Smaller gains of 33% and 26% for Honda and Toyota. Chrysler's sales were 1.8 million in 2013- the company which depended on policymakers in the Obama administration for survival showed remarkable gains under Fiat's CEO Marchionne. VW returning to the market and stumbling repeatedly in the previous ten years, made serious gains with Jetta and Passat models designed and priced for the U.S. market. VW achieved sales of 0.6 million in 2013. Ford sales were 2.5 million, Nissan 1.2 million, Honda 1.5 million and Toyota 2.2 million for 2013. GM sales 2.8 million increasing by 35% in 2013 over 2009. The automobile story may be the biggest story in the U.S. manufacturing recovery. It also may have made a difference in the election campaign of 2012- with winning campaign points in key midwestern states such as Michigan and Ohio for the Obama administration's backing of a renewed auto industry around fuel efficiency improvements, new management, and new relationship with unions. In the period 1998-2007 average sales were 16 million in the U.S. market, with a nosedive to 10.4 million vehicles in 2009, and a rebound to 15.6 million in 2013, according to Autodata. Under previous union contracts with higher wages and pension costs, and a flurry of price incentives, car makers needed higher volume to make profits. Changes since the bankruptcy of 2 automakers include bringing in management from outside the auto industry- Marchionne at Chrysler, Whittaker and Akerson at GM came from other fields (telecom, finance) bringing new perspectives. Mulally at Ford was from Boeing commercial aerospace. Other changes were lower wages and pension costs with renegotiated contracts and relationships with unions, discipline to lower incentives, younger managers moved up and brought in from outside including Reuss and Barra at GM, Farley at Ford, lower sales to fleets, improved fuel efficiency for SUV's and pickups to change the cost of operating, a mix shifted to smaller and midsized cars, improved quality, and changing the buyer perception of American brands....

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The Egyptian military announced the names of a eight member Constitutional Committee. The committee will be given the task of rewriting six articles of the constitution. These articles relate to presidential term limits, judicial oversight of elections, and parts related to curbing the president's powers to amend the constitution and restrict civil liberties, including sending civilians to military tribunals. The committee is asked to come up with recommended rewriting of these articles in 10 days. Reports say the constitutional changes will then be put to a popular referendum. The committee will be led by Tareq al-Bishry, who is a retired judge and a prominent historian. Mr Bishry and a Cairo University law professor, Atef al-Bana, are thought to be followers of a modern Islamic school of thought. Other members are Sobhi Saleh, a popular member of the Muslim Brotherhood who represented Alexandria in parliament from 2005 to 2010. About the selection of the committee, Abdel Yousef, a senior official of ElBaradei's National Association for Change, says the names are a good sign from the military. See the heart rending account of Sobhi Saleh and a prison set on fire from which he makes his way out after his arrest during the protests. The account is by Nicholas Kulish in the New York Times, Feb 4, 2011....

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Joe Parkinson of the WSJ gives a in-depth account of the emergence of Recep Tayyip Erdogan in Turkey's politics, with contributions by Emre Peker, Ayla Albayrak, Yeliz Candemir. Erdogan grew up in a poor neighborhood of Istanbul, and became the head of a local youth branch of the Islamist National Salvation Party in 1976 after an adolescent period steeped in mosque culture and Islamic ideas. In 1994 he is elected Mayor of Istanbul amid voter discontent with corruption and problems with infrastructure and public services. He served for four years making improvements. After reciting a poem publicly that said "the mosques are our barracks, domes our helmets, minarets our bayonets and faithful our soldiers," he is jailed for 4 months by a military backed secular government in 1999. During this period Erdogan, described by friends from his youth as having a unique ability to adapt to difficult situations, makes a transformation. He moves to the centre, coming out in favor of stronger ties to the EU, and works hard to attract support from the secular and nationalist voters to add to his conservative religious base. In 2003 he is elected prime minister as head of the Justice and Development Party. This begins a period of ten years in which Turkey sees remarkable period of economic growth during which Turkey's GNP nearly quadruples from a little over $200 billion in 2002 to $794.5 billion in 2012, according to the IMF. It may be partly coincidence and partly good management of the economy under Erdogan. Turkey's previous banking and currency crises before 2003 created a better understanding and discipline for managing the economy. Emerging markets such as Brazil, India, China, Russia, Indonesia, and other parts of Asia and Latin America were able to achieve high rates of growth during this 10 year period. Competitiveness in Brazil and Turkey has not improved significantly in this period according to experts, and large capital inflows into Turkey partly supported the credit boom in Turkey. And just as growth is slowing significantly in all emerging markets, Turkey under Erdogan faces a new test. Especially now that Erdogan is seen as autocratic in his effort to suppress protests to build an Ottoman era army barracks in Taksim Square, Istanbul. The fears of secularists in Turkey are that this is the Erdogan of the period in 1999, after serving as Mayor of Istanbul. Just as Turks turned away from the overreaching actions of the military, the public sentiment may be shifting beyond the overreaching actions of the religious parties in Turkish politics. The protests in Brazil against the Rouseff administration after the popularity of the Lula administration, show that slowing economic growth and missteps by the elected government can alienate younger voters. The parties still retain a majority but face an uncertain future in which lower economic growth and missteps lead to a search for alternatives. At the same time Turkey's efforts for accession to the EU are beng put on hold as Germany opposes the actions to suppress protests of the Justice Party in Turkey. ...

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This report in the Economist magazine says views in the Trump base of support in rural areas and among white working class voters are likely to persist for some time. One reason given is that many of these people live in isolation and little contact with the more educated urban voters in America. Another factor cited here is that only a fifth of voters follow politics closely, and of these voters only a small fraction have a good grasp of the positions of the two major parties. Most people follow the instincts and thinking of the groups they are with. As a result many of the issues covered in the media such as climate change and U.S. withdrawal from the Paris agreement, the Comey firing and the Mueller investigation into Russian meddling in the election, president Trump's Twitter comments, are not having much impact on the president's ratings among his support base at this early stage of the Trump presidency. Yet it is too early to tell only 6 months into the Trump term in office. After 8 years of president Obama's two terms in office voters who feel left out are not likely to change their views in so short a time. Republican voters as distinct from the core Trump base voter are also unlikely to change their views after 8 years of Democratic party administration. By staying close to traditional Republican party positions president Trump is likely to continue to have the support of the lifelong Republican party voters unless things change. Can a centrist position emerge after voter fatigue with excessive partisan opinion, as voters seek to make America a more quieter place and a consensus on working together to lift all boats emerges. This could be expected as time passes.   ...

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As corporate America takes stock of the damage it finds on April 12, 2020-

270 companies have draw on existing credit lines or added ones for a total $221 billon in new debt.

100 companies furloughing 3 million employees.

Unemployment insurance claims filed by 17 million people.

Airlines, retail and automobiles some of the worst hit industries.

President Trump acted quickly on April 11, to save the oil and gas industry by negotiating cuts with OPEC+ so that oil prices do not collapse at the opening of markets on April 13 from the price of $22  barrel. He also pledged to save Boeing.

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Joel Peterson describes how he got his start at Trammel Crow, a real estate developer company, seeing an ad on the bulletinn board at school for somebody fluent in French to go and work in the south of France. He says a big part of his relationships with lenders and partners in the business was about trust. He describes trust as coming from listening from the heart, genuinely interested in what people have to say, not some listening techinque. Its also about you as a person, authenticity, openness, being able to see things as they really are, and being direct. Its listening without an agenda, because any sort of frame in the mind means one is thinking about one's response is to what someone said, and one needs to listen fully and process what someone says to listen well. He describes it as being allowed entry in that person's world, which helps to build trust.

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The amazing story of how the human march of Syrian refugees on highways from Keleti station Budapest to the Austrian border got started, told by WSJ reporters Thomas, Bradley and Geiger in an exceptional way.

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The Iraqi army moves against Kurdish Peshmerga in northern Iraq after taking Raqqa from ISIS and Kirkuk from the Kurds. The fragile peace between the autonomous Kurdish region and the central government in Iraq broke down after the Kurdistan autonomous government held a referendum in all Kurdish controlled regions in Iraq, including parts taken from ISIS. The Kurds held the referendum for an independent state on Sept 25, 2017. This puts the U.S. in a difficult position as it supported the Kurds against ISIS, when the Iraqi army was disorganized in 2015-2016. Turkey also opposes the Kurds move for an independent state that could include parts of Turkey.

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Andy Stern, head of the Service Employees International Union, in an interview with WSJ's Matthew Kaminski. Membership at the SEIU has doubled to 2 million while other unions have gone into steady decline. In 2005, Stern took the SEIU out of the AFL-CIO preferring grassroots organization over political emphasis and emphasizing the shift to a service and global economy. He sees a new situation from the one in 1993, as the issues facing the country have changed. He lists the income inequality and stagnation of wages. He prefers the European model. Better a little more unemployment as Western Europe has done, but a lot more equality, says Stern. And as the ranks of the uninsured swell with the half a million laid off workers in November in the USA reported by the Labor Department, the first priority for the union is universal health care. With donations of $85 million from the SEIU being the largest of the total union donations of $450 million for this years elecion campaigns, the SEIU hopes to hold the new administration accountable....

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The National Highway Traffic Safety Administration failed to take action when asked by drivers to investigate incidents of unintended acceleration. It also failed to take up action with the company's quality staff in Japan- who were in charge of things related to quality- after what appeared to be years of inaction and stalling by Toyota. Where it did investigate, the agency did nothing about the complaints when Toyota failed to provide the necessary information. Internal agency documents show that since 2003 the agency opened inquiries into possible Toyota problems, and six times closed them without action of any sort. With agency managers joining Toyota after their work at the agency, there appears to have been a cozy relationship with Toyota. Add to that the lack of a steady hand at the agency- with about 6 changes in directors since 2005- and the current administrator David Strickland only confirmed in December 2009. Throughout its 6 investigations NHTSA regulators were told they have to talk not with Toyota USA but Toyota people in Japan who made the decisions and had the answers, yet no effort was made to break the logjam and get Toyota Japanese managers to provide answers. At one point State Farm Insurance brought the incidents of accidents and near accidents to the attention of NHTSA, something that happened a decade before this in the Ford Explorer roll over accidents. On both occasions NHTSA was slow to act....

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This report in the NYT looks at the support for the AfD stalled at about 11% nationwide but closer to twice that in East Germany where years of neglect have led to voters shifting to far right parties. The view is presented that there is a core hard right of 10%. Yet it ignores or prefers to overlook what happened in the east which provides the real clues to what happened, so that future policy could be designed to address social goals in a way that never happened in Germany. This is in line with developments in China where president Xi is addressing social goals after years of tech and infrastructure expansion that neglected rural areas and urban poor. It is in line also with the same action taken to address social goals in US president Biden's $3.5 trillion workers and families plan. Social Democrats under Mr. Scholz and a younger generation represented by the Greens have the same challenges facing them to come up with the plans to correct these problems in Germany and with a plan designed for the neglected eastern part of the country. Helmut Kohl pushed for reunification of Germany. With the collapse of the Berlin Wall the momentum was set for this to happen. Yet looking back over that period since 1990, German chancellors and administrations for three decades from both CDU and SPD have failed to invest and create opportunities in eastern part of Germany. It makes German reunification an empty concept looked at from outside. The previous administrations including Kohl and Merkel relied too much on market capitalism to do what it has been shown not capable of doing- tackling social goals and economic crises, much less  political storms such as creation of GDR following Soviet army entering Berlinin 1945. Much commentary on the issues in east Germany show people there left to themselves after mass migration out of the east to the west leaving older people and pensioners in the east, and a sense of being ignored or forgotten. US president Biden said today in ther UN General Assembly- "Our shared grief is a poignant reminder that our collective future will hinge on our ability to recognize our common humanity and to act together." And he went on to say the next ten years to 2030 "will quite literally determine our futures."  The Social Democrats under Scholz and the Greens under Baerbock and Habeck have to come up with plans and programs that will increase ease of living and opportunities for a thriving eastern part of Germany, after the failures of market capitalism in its unregulated form during the Merkel years and predecessor administrations. ...

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Friedman points to the parallel between the democracy movements in Eastern Europe and the Arab World, and sees one difference. Whereas the countries in Eastern Europe were mostly homogenous except for Yugoslavia, the countries in the Arab world are homogenous only in Egypt, Tunisia and Morocco. Which makes the transition to democracy that much harder with sectarian interests, the Sunni-Shiite divide, tribal differences, and the lack of a transition period for building democratic institutions. This will require vision, leadership and perseverance from Arab peoples and from the outside world.

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Google will give 60 million euros to a fund that will support France's newspapers to better navigate a transition to the internet. A dispute between French newspapers and magazines and Google, with the demand that Google pay for every click on online versions of their stories, has been settled. Google says it would have removed French newspapers from its index if the demands were not withdrawn. It took 3 months of tense negotiations with a government appointed mediator to reach the settlement. For Google this means it can get a bigger part of the French online advertising market. A setlement has not been reached in Germany. In Belgium it took 6 years of litigation before it was settled. The Google fund will be used to aid the transition of newspapers with projects for digital media and new ways of generating revenue online. Google will also help French newspapers with its online advertising services. Google CEO Schmidt says the agreement is a win for the citizens of France giving them fast access to media articles....

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The effort to impeach US Homeland Secretary Mayorkas fails in the House of Representatives with a vote of 216- to 2014 with 4 Republicans voting with all Democrats. Constitutional experts say there are no grounds for impeaching Mayorkas and no cabinet official has ever been impeached before. The WSJ Editorial Board also says there are no impeachable offences. A Senate bipartisan effort to change asylum and parole laws to end the migrants flow over the US border with Mexico with president Biden's support to close the border the day it is passed is now stalled because of Republican opposition. This also keeps aid to Ukraine and Israel in a bill before Congress in a state of uncertainty.

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Empowering people and civil society was the main goal of En Marche movement founded by Emmanuel Macron. As president Macron has governed in the presidential style of De Gaulle, creating dissatisfaction. Macron is criticized for centralizing power and decision making process so that the style of governing is in sharp contrast to the way En Marche draws on grass roots support. En Marche itself was critical of how the older politicians had governed France. The Interior Minister and Environment Minister resigned with the Environment Minister saying he felt "all alone" in government. This is happening as the European Union election is approaching with the poll numbers of Macron dropping to about 26%. Marie Le Pen's RN is ahead of Macron's En Marche for the first time in polls taken in November 2018 for the May 2019 European Union elections. The think tank Friends of Europe shows 41 percent of French respondents in a survey saying life would be the same without the EU, while only 21 percent thought it would be worse.    ...

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This NYT editorial points out that the cuts to Medicaid amount to taking out a fourth of its budget and are sure to hurt low income Americans. The cuts are about $880 billion over 10 years for Medicaid. The $300 billion less in subsidies over ten years is likely to hurt the elderly. It also points out that removing the individual mandate will make it harder to reduce premiums as fewer healthy adults offset the costs of sick patients.

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The European Union response to Britain's decision to begin negotiations to leave the EU is a tough one that presents serious problems for Britain. EU Council president, Donald Tusk said that no talks on Britain's future trading relationship with the EU could take place till all the issues relating to Britain leaving have been resolved. Included is a bill of 60 billion euros, according to European authorites, for settling British committments in the EU. Tusk also said the EU wanted to see the rights of the 3 million EU citizens living in the EU, and the 1 million British citizens in the EU protected as a priority in negotiations. Without negotiations on a future trading relationship Britain faces tariffs and duties putting it at a disadvantage after the exit. Talks also cannot extend beyond March 2019 or new approval is needed from 27 EU states. The European parliament also has veto rights if the agreement is not seen as strong enough for the EU. Tusk says that Brexit has made the EU more united. Chancellor Merkel of Gemany has also separated exit from future trading relationship negotiations, the second only being discussed after the first is complete. The issue of Scottish independence also hangs in the balance, as the Scottish parliamentary leader Jack Salmond refused to accept prime minister May's point that her own constituency Islington had voted against Brexit yet she was negotiating for the whole of UK- Salmond responded in parliament that not taking Scotland's interests into account after it had voted against Brexit made "Scottish independence inevitable." The EU leaders are taking a calmer approach, in contrast to the more nationalist appeal in parliament to Tory back benches of prime minister May with promises she may have difficulty keeping.   ...