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A report released by the Organization for Economic Cooperation and Development (OECD) shows growing income inequality in 34 OECD countries. OECD Secretary General, Angel Gurria says: "The social contract is starting to unravel in many countries. This study dispels the assumptions that the benefits of economic growth will automatically trickle down to the disadvantaged and that the greater inequality fosters greater social mobility. Without a comprehensive strategy for inclusive growth, income inequality will continue to rise." Countries with the largest ratios between incomes at the top and the bottom, are the United States, Turkey and Israel, roughly 14 to 1. Germany, Denmark and Sweden have ratios of 6 to 1, with their ratios up from the 1980's. Gaps in Chile and Mexico are at 25 to 1. The study covers the period from 1980 to 2008. Overall inequality went up by 25% in the U.S. from 1980. In 2008 the top ten percent in the U.S. earned $114,000, 15 times than incomes for the bottom 10%. The top 1% of Americans saw incomes go up from 1980 to 2008, increasing from 8 percent to 18 percent. The richest 1% having $1.3 million in after tax income, and the lowest 20% making $17,700. The trends have accentuated an increase at the highest end- the top 1% and top 10% of the people- and a sharp decrease for the bottom 20%, which can be grasped from the $17,700 and the $1.3 million, both at extreme ends. The study attributes the rise in inequality to a growing gap in wages for highly skilled workers as technology advances, a surge in foreign direct investment and a looser regulatory regime that reduces employee protections leading to wage premiums for financial jobs and smaller incomes for workers at the bottom. Income groups and professions and sectors that had the greatest influence in government were able during this period to get the greatest protection for incomes, and able also to maximize their incomes. Incomes in the financial sector increased dramatically in the last decade, as a result of deregulation leading to higher risk and speculative activities in the financial sector, leading to the financial crisis of 2008-2009. Financial crises further depress incomes at the lower end. Similiar income inequality trends can be seen for India and China. China has a Ginni coefficient of 0.5 according to researchers at Beijing Normal University, up from 0.3 three decades ago- a Ginni Coefficient above 0.4 is considered destabilizing. Another factor that played a part in these countries is corruption and lobbying by special interests for favored treatment of sectors or groups. Austerity measures taken in Europe and in the U.S. are likely to widen income gaps by depressing the lower end income groups, creating social unrest, especially in the absence of efforts to stimulate growth....

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China's goal of creating 10 million new jobs each year.

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Alan Blinder points out that the political partisanship that has emerged in 2010 has not served America well, as it has deprived the government of the fiscal policy tools, which would be more effective than the Fed's only mildly effective tool of buying $100 billion a month of medium and long term Treasury debt. The country he says is tied up in partisan knots that prevents the use of the fiscal policy tools, and leaves the Fed with the choice of doing something only nudging the rates on government and private securites a bit (by 30 basis points for Treasury debt and 15 basis points for private securities as an example, not enough for more than a mild impact on corporate spending). The fiscal policy tools are he says of a wide variety and pack a lot more power, and he cites three as examples: offering significant lasting tax breaks for job creation, large enough to produce results (larger and long term than the HIRE program), government hiring directly onto public payrolls and government paying local and state governments for hiring at the local levels, the government offering to compensate states for a cut in the sales tax for a year to stimulate consumer spending. Would'nt this raise the deficit though? Blinder points out that the deficit problem lies in the future. Right now there is so much slack in the economy, that public spending will not crowd out private spending. And with Treasury rates at an all time low, Treasury can finance the larger deficit in the short term. A depreciation of the dollar or inflation, he says, is not a worry, because now there is worry about deflation, and the USA needs a lower dollar to push exports up and rebalance its economy. This does not slight the deficit issue and the culture of poor budgeting among both parties, as Reagan Budget Director David Stockman pointed out in an op-ed piece, but accomodates the real dangers and opportunities of difficult policy choices. This is why he laments the advertising campaign and public relations campaign against the 2009 stimulus bill, and the expected paralysis of fiscal policy from the extremely partisan 2010 midterm elections, and public opinion consumed by fear of deficits. Leaving the Fed with the unenviable choice of using only mildly effective tools. Other experts and columnists mention the risks associated with the Fed's large scale purchase of securities, if this leads to another asset bubble and subsequent collapse, and another bailout needed for financial institutions. Peter Eavis in one column in the WSJ points to the lack of effectiveness of the first round of quantitative easing of $1.7 trillion. And Kelly Evans, in the WSJ, points to the risks of "bad" inflation, if another round of quantitative easing by the Fed leads to increases in the price of commodities such as oil and food (such inflation falling heaviest on lower income households).The US Financial Regulatory Reform bill has received low grades, and recent standards for reserve capital in worldwide banking reforms are stretched out over a long period, leaving fragility in the economic system, if something were to go wrong....

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Republican presidential candidate Rick Perry tells an audience in Cedar Rapids, Iowa: Printing more money to play politics at this particular time in American history is almost treacherous- or treasonous, in my opinion." He was referring to Federal Reserve chairman Bernanke when he said: "I know there's a lot of talk and what have you about if this guy prints more money between now and the election... I don't know what y'all would do to him in Iowa, but we would treat him pretty ugly down in Texas." Perry's spokesman said Perry feels strongly about printing money, and "got passionate" in his comments.

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China's jobs situation is holding up better than expected with lower levels of economic growth. In 2014 there were 115 job openings for every 100 applicants, according to an official labor survey. Part of the reason is that the services sector is playing a larger role in growth. The services sector contributed 3.8% to growth in 2014, compared to the slower growing manufacturing sector, which contributed 3.0 percentage points. With problems in heavy industry and real estate this is reducing the need for larger stimulus spending. Official figures for GDP growth in 2014 are 7.4%.

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Some startling statistics on U.S. wages and incomes and the increase of part-time workers, by the publisher of U.S. News and World Report, Mortimer Zuckerman. He cites the Pew Research Center reports that show one third of Americans identifying themeselves as lower class or lower middle class compared to one quarter before 2008. This affects social mobility with the increasing gaps in incomes, education and social behaviour acting to reinforce each other and leading to even lower future mobility. Industries that are showing growth are in low wage occupations. The Bureau of Labor Statistics shows growth in future in industries noted for low wage part time work- health care, social assistance and retail, with some jobs lacking minimum wage and overtime protections. Revealing in this respect is that in the last 2 years fully 43% of net employment growth is in the 1.7 million jobs added in low wage work in food service, retail and employment services industries. The number of Americans working full time declined by 5.9 million since Sept 2007, part time workers increased by 2.6 million. The effects of higher part time workers and job recovery predominantly in lower wage industries is likely to affect consumer spending and slow growth....

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The limited options the US has to get China to appreciate the value of its currency, the yuan. Some of the options depend on getting the IMF or the WTO to prod the Chinese, others depend on a Plaza type Accord.

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Nelson Schwartz of the NYT looks at the town of Neenah, Wisconsin, a year after the election in Wisconsin, Michigan, Pennsylvania with 80,000 votes swinging the other way from blue to red handing the election to Mr. Trump. The pressures are still there with cheaper imports, paper mills about to close, and workers still struggling to keep the same lifestyle as their parents. Even with low unemployment of about 3% in Wisconsin, with the slow increase in wages and corporate pressures for profits, trade wars, the sense is that the problems of the American middle class are still just as deep.

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International Energy Agency estimates show the U.S. surpassing Saudi Arabia as the world's largest oil producer by 2020 because of the boom in shale oil production. The estimates are for 11.1 million barrels a day from the U.S. in 2020.

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Reflections on Spanish democracy, 34 years after free elections following the Franco regime. No new solutions to problems of high unemployment (reaching 5 million "paradores" or unemployed as a recent front page headline in extra large print in the paper Cinco Dias declared) from the Socialist party and the Partido Popular. And a sense that the country is on autopilot, as decisions are being made by the EU on recapitalizing banks and other economic issues without a significant voice from the Zapatero administration.

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Krugman says China's inflation is raising labor costs in China, and in this way gradually reducing the undervaluation of the yuan vs the dollar. But he cautions this would take a long time, 4-5 years. The U.S. faces the costs of high unemployment close to 10% today, and this requires serious efforts now to reduce the undervaluation. It alone will not solve America's problems. It is one of a number of actions that need to be taken and not put off again.

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U.S. Federal Reserve chairman Ben Bernanke tells the House Financial Services Committee hearings that the Fed will give importance to underemployment, not just the unemployment rate, in making decisions about bond purchases. The unemployment rate could be a false indicator of the labor market if the rate falls below the Fed's goal of 6.5% before raising interest rates, and yet labor markets are still weak because of underemployment. Bernanke said: "There are a number of problems with the labor market. Unemployment is one problem, but long term unemployment and underemployment- and by 'underemployment,' I mean people either who are working fewer hours than they would like or possibly working at jobs well below their skill level- is also indicative of a weak labor market." In this situation of high underemployment combined with low inflation the Fed may hold off on raising interest rates when the unemployment rate reach 6.5%. In Bernanke's words: Reaching 6.5% unemployment "would not automatically result in an increase in the federal funds rate target." Since 2010 financial markets in the U.S., and to a lesser extent worldwide, have looked to U.S. Fed policy for raising interest rates, as guidance on the degree of support for the economy and by extension for markets....

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Hilsenrath cites Robert Hall, a Stanford University professor whose research shows three fourths of American households do not have two months worth of income put away as cash or other liquid assets. The Federal Reserve researcher Karen Pence says 41% of households can borrow less than $3000 on their credit cards and 23% have been turned down or discouraged from applying for credit. This shows the general financial weakness of overly indebted American households and the overlayed effects of the housing crisis, and higher unemployment. It suggests the margin for consumers to weather difficulties and increase spending is thin.

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U.S. president Trump signs an executive order on March 28, 2017, reversing the American commitment to the Paris climate change agreement. The executive order also lifts a moratorium on the sale of coalmining leases on federal lands. The Obama administration 2015 clean power plan was designed to restrict greenhouse gas emissions from power plants. It was blocked by courts in 2016. Trump says he is reversing president Obama's war on coal. Earlier he approved the Keystone pipeline for bringing oil from oil sands in Canada to the U.S.. Under the Paris agreement the U.S. agreed to cut greenhouse gas emissions 26-28% by 2025 from 2005 levels. Market changes including the availability of cheap natural gas from technology advances fracking and hydraulic fracturing is leading a shift away from coal, apart from Obama administration regulations. Another factor is the long term trend towards cleaner energy, with large energy producers such as American Electric Power and other companies planning for the long term which is likely to be in the direction of cleaner energy. These companies see the Trump administration changes as a situation that may not be for the long term. ...

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The increasing competitiveness of Mexico compared to China and India as an investment destination in 2013. Foreign companies are investing heavily in Mexico because of investment advantages in labor cost, supply of engineering and management talent, and proximity to the U.S.

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Turkey increases security at its borders limiting the flow of refugees and to control terrorism.

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Greg Ip of the WSJ points to the economic changes in China's economy and the threat of deflation in 2016 with the large debt and slowing economy. For the last decade China was seen as a currency manipulator as it kept the value of its currency lower to increase imports. With the large changes in China's economic situation in 2015-2016 China may face a situation similiar to Japan with deflationary trends. China faces political pressures in 2016 with the U.S. presidential election in 2016 to not intervene with the currency. The goal of making the yuan a global currency adds to these pressures. Other factors are the need to service debt in dollars of Chinese property companies.

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Couple of things stand out. First an aging workforce at the oil companies. At ConocoPhillips half of the workers are eligible for retirement in 5 years. According to the Society of Petroleum Engineers about 40% of petroleum engineers are over 50 today. This also means that they are higher paid employees and takes up more of Conoco's budget for exploration of $11 billion as a compared to a younger workforce. What the industry needs is lots of people to do the explortation and drilling jobs from construction labor to project managers, to geologists and petroleum engineers to geoscientists. About half a million petroleum related jobs were lost between 1982 and 2000 when the oil industry had low prices and plenty of supply leading to large layoffs. During 1982 to 2003 petroleum related undergraduate programs saw enrolment drop dramitically by 85%. Now the industry is paying the price with severe people constraints when demand has picked up. Cambridge Energy Associates estimate is that there would be about a 10-15% deficit of people even a few years from now in 2010 because it takes time to turno out new engineers and geologists. Today there is big interest on campuses in petroleum engineering and petroleum related fields. Its the highest paid field for college grauates at $68,000 average and at schools like Texas Tech its $100,000 average. Still only 3700 petroleum engineering students are enrolled on campuses compared to the peak of 11,000 in 1983 so there is some hesitation about this field because of the cycles of ups and downs. The novel approach that oil companies are adopting of turning to the auto industry and to academia to fill the people needs is worth watching because here are 2 industries going in opposite directions and whereas one has a shortage the other has qualified people who have no opportunity, a shift makes sense and training to make that shift makes a lot of sense. The Association of Drilling Contractors has teamed up with Ford Motor Company to hold a career fair to attract auto employees who are subject to buyouts....

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Federal Reserve chairman Bernanke says he plans to keep interest rates low till the end of 2014. Bernanke told a news conference after a two day policy meeting of the Fed April 23-24: "It's a little premature to declare victory. Keeping interest rates low is still appropriate for our economy."