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How U.S. -Chinese relations today parallel relations between the U.S. and Japan in the late eighties and early nineties. The dnagers of extrapolating from the enormous growth in China today and Japan then, into the future decades. The prospect say anlaysts that the model of development in Japan then, and China today, with an emphasis of state driven direction, works for several decades and then starts sputtering. At some point it becomes a model that cannot be sustained. Some analysts like Arthur Kroeber, of Dragonomics, an economic forecasting firm based in Beijing, see it as a model that is right for that stage of developmment in a country's progress from an agricultural to an industrial economy. But there are critical differences with Japan, for one China has not completed its transition to urbanization as it has large parts of the country that are rural. And industrialization has increased the level of inequality in China. See the articles citing Gini coeficcients for China which show significant deterioration. The other difference is that Japan still had a pioneering secotr of companies in the export sector from Toyota to Panasonic, whereas China's companies in most secotrs are state run or heavily financed by state run banks. Japan has one other striking difference in that it has a democratic form of government and a thriving and independent media, which makes Japan's transition to a post industrial economy with an increase in private initiative less difficult....

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An audit of Spain's banking system by the consulting firm Oliver Wyman, shows that Spanish banks would need 53.745 billion euros to be cleaned up if mergers and acquisitions underway are completed.The amount goes up to 59.3 billion euros if this does not happen. Bankia bank will need 24.7 billion euros to meet capital requirements. Three other nationalized banks need 21.5 billion euros, including 3.2 billion euros for Banco Popular. Of the 14 audited banks only 7 need capital infusions. The other banks considered healthy include BBVA, Santander and La Caixa. These findings are similiar to a preliminary finding by Oliver Wyman and estimates provided by Luis de Guindos, Spain's economy minister, that Spanish banks will need 51 billion to 62 billion euros of capital infusion. Spain's secretary of state for the economy, Fernando Jimenez Latorre, says Spain will soon request about 40 billion euros of the 100 billion euro bailout offer for banks negotiated by Spain in June with the EU. It is not clear whether the capital infusion will go directly to Spain's banks as Spain has argued, or go through the Spanish government. The audits were important to provide credibility through independent assessment of losses in Spain's banking system, and remove the fog of uncertainty that is pushing up Spain's borrowing rate in capital markets....

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Official results show Putin wins the Russian presidential election with 64.6% of the vote with 90% of precincts counted. Exit polls showed a result of Putin winning by 58-59% of the vote over 4 other candidates. Putin's presidential term will be for 6 years after a constitutional amendment increased the term from 4 years to 6 years. Putin relied on voters outside Moscow and in the provinces for support.

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Elizabeth Rosenthal looks at Obamacare's contribution to cost containment in 2013-2014. Rosenthal says its is a kind of delicate maneuvring at the edges, because serious work needs to be done. The fee-for-service and many of the drivers for increases in medical costs, the old system of pricing, are still in place. In 20 years at the current rate and after Obamacare health care will still take 25% of the U.S. budget if nothing is done. Healthcare costs are about half that of the U.S. in some of the advanced European countries. She calls Obamacare a trickle down theory of cost containment becaue it leaves most of the drivers for cost increase in place and works at the margins. Princeton economist Uwe Reinhardt calls it an ugly patch on a somewhat ugly system. Rosenthal cites the armies of consultants anticipating every move to reduce prices, and working on "strategic billing'' to increase revenues for hospitals and doctors. For those who say the prices are now up more slowly than in the past, Michael Chernew of the Harvard Medical School, has this to say- its like a diet, reminding us that that we haven't even lost weight, just gaining weight slower than before. ...

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Efforts by Spain's government of prime minister Rajoy to come up with credible estimates about the actual needs for recapitalization of troubled parts of the banking system, and which banks should be closed. Report out in June by consulting firms Oliver Wyman and Roland Berger relies on information from the Bank of Spain. A detailed audit examining the books of the 14 largest banks in Spain will be completed by audit firms by the end of July 2012. Considerable criticism in banking circles in Barcelona and London about the procrastination by Spanish banking authorites in coming up with credible estimates of the actual bad loans and losses in the Spanish banking system. This would improve confidence in financial markets that the problems can be controlled and a way forward planned.

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Krugman says the TPP is no big deal because most of the trade in that region is free, protectionism is way down. He cites a recent report on American import restraints by the International Trade Commission putting their total cost at 0.01% of GDP.

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The new labor law of prime minister Mario Monti's administration was passed in the Italian parliament by a vote of 393-74 on June 27, 2012. Passage of the major labor law reform was an important piece of legislation for Italy to regain cometitiveness in the eurozone and increase growth. It was seen as a confidence vote in the Monti administration.

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Vladimir Putin presents his views on democracy in Russia, on prevalent corruption, and ways to introduce democratic processes through internet referendums on legislative initiatives, the election of governors and local officials. He says democracy cannot be built overnight, that sovereignty of the people of Russia is the true basis of democracy and this was achieved through the fight with the oligrachy and anarchy of the 1990's. Rights that Russians want to see democracy ensure are: right to work, free medical care and education for children. In addition with the development of civil society and the advance of the middle class in Russia democratic processes have to keep pace. But he doesn't see democratic processes working with what he calls " a circus of candidates making unrealistic promises" with "spin doctors and image makers controlling politicians." And he does not see modern democracy limited to casting votes, and calls for internet based democracy and referendum based democracy to be integrated into the overall development of institutions, particularly at municipal and regional levels. He calls for a change in the mindset of Russians away from corruption in public service, saying that as long as the mindset is there one set of thieves are unmasked only to be replaced by another set of thieves. And cites polls that show teenagers aspire to be public servants because of the easy money to be made in public service. To correct this he proposes salaries that are high enough and at the same time have absolute transparency, declaration of expenses and family purchases, residences, vacations etc. Other steps include separating executive power and property and separating executive power from the system of checks over it....

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The serious problem of the large number of long term unemployed in the U.S. in 2012, strikingly different from any previous recession the U.S. has experienced. This means that if the problem is not addressed or solved these unemployed people will simply fall by the wayside, say experts. U.S. Federal chairman Bernanke, says this is a priority to be taken into account in setting interest rate policy. His fears are that this will be a permanent loss to the productive capacity of the U.S. Evidence of the extent of this problem is that the share of the population that is working has barely budged since late 2009 when the global financial crisis hit. It dropped from above 62% to about 58% in late 2009. It was 58.6% in ealry 2012, based on Labor Department data, even though the unemployment rate edged down to 8.3% by Feb. 2012.

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Manufacturing in the US is adding jobs for the first time since 1997, according to government data. Job growth in 2010 was 1.2%, or 136,000 jobs. IHS Global Insight expects total manufacturing jobs in the US to increase in 2011 to 12 million. Manufacturing will be a modest contributor to job growth according to economists. Economists projections show a gain of 2.5% or 330,000 manufacturing jobs in 2011. Moody's Analytics estimates job growth of 2% a year through 2015. Government incentives, need to replace aging equipment and rehiring in the automobile industry will help manufacturing. At the same time manufacturers are cautious about hiring and increases in automation reduce the need for workers compared to earlier periods. Overall the loss of about 6 million manufacturing jobs since 1997 will not be made up. Yet the improvement is a positive sign as the US faces high unemployment and companies make investment in new factories overseas to meet growth in emerging markets.

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Actually some of this is a healthy development as more nations and people have a stake in the world economy. Take the Brazil situation for example . Clearly the Brazilian people are more favorable to globalization and its benefits than they were a decade ago at the height of the Asian crisis and the contagion effect on Brazil. Actually the advantages of free trade and a global trading system that benefits Brazil as well as China and India and other countries that buy its commodities such as iron ore is more now than ever because these nationas are benefitting from this trade. Because of the high prices of commodities and the agricultural products of Brazil, it has a currrent account surplus and its currency is strengthening. Instead of having to go to the IMF for assistance Brazil has large foreign exchange reserves that support its currency and which help it push up its investments as a share of GDP from 19% to closer to 25%, which should enable it to sustain about 5% growth year after year., according to Sergio Vale of MB Associados. A strong real, lower interest rates, and consumer credit have boosted the purchasing power of the middle class and the antipoverty programs of the Lula government have helped the poorer classes have a stake in the development. According to a recent Observador/Ipsos survey 23 million Brazilians have left social classes D and E and joined class C whose distinctive markings are a rented apartment, a car and some new gadgets. Actually quite to the contrary of the impression created by this article Brazil according to a former central bank governor is now showing a new enthusiasm for this kind of development which encompasses free trade and markets, a feeling that the stockmarket is not a casino and being part of the world economy is a good thing. The big discoveries of oil at Tupi and Carioca-Sugar Loaf in Atlantic offshore waters by Petrobras even though they are in miles deep waters and require special expertise must only have reinforced this mood. The danger to Brazil's enthusiasm comes not from nationalism of different countries trying to find better ways of meeting the aspirations of their people but from the risks in a global slowdown that started with the US subprime and mortgage crisis, the resulting credit tightening, and fall in consumption thats expected after years of overspending by the American consumer. Its now upto these individual countries, like Brazil, China, India and Russia, Japan as well as Germany France and other countries that are not directly part of the housing bubble and subprime and mortgage securitization mess affecting the USA, and the UK and Ireland and Spain to a lesser extent, to find ways of maintaining more modest but still substantial growth to meet the growing aspirations of people in these countries. In this sense the policy errors and regulatory errors made during this last decade in the US will actually have hurt the world economy and markets in a serious manner, and it is this that has now to be managed in a better way by these countries with the close cooperation between them and the USA. The situation in Brazil is repeated in the experience of India, China and Russia where for the first time there is enthusiasm for being part of the world economy. In the light of this development there is more reason for hope and more need for careful navigation mechanisms for these and other countries to weather the difficulties from a global slowdown and still sustain development that itself could help the USA work its way out of the current crisis through its exports....

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Italy's finance minister Carlo Padoan, the EU president Jean-Claude Juncker, and Vitor Constancio, vice president of the ECB, express the need for increased public spending and investment to reverse increasingly sluggish economic growth by Septembr 2014. In a letter to Paduan, finance ministers of France and Germany, Sapin and Schauble, express support for a new investment program in 2014-2015.

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This interview with Donald Trump by the publisher, editors and columnists of The Washington Post, Ryan Jr., Hiatt, Lane, Marcus, Diehl, Armai, Attiah, provides an exceptional insight into the views of Donald Trump on domestic and foreign policy, on his campaign for president. It is the result of an effort to get Trump to state his policies on different issues without the fuzziness in which Trump has carried out his campaign, often taking different sides of the same issue. In some situations Trump is pressed hard on his positions or controversial statements, to clarify what he has not clarified in the burst of media attention Trump received in the past 6 months, especially on television media. First some myths and realities. A recent March 19, 2016, issue of the Economist cites the Pew Trust in showing that only about 17% of eligible Republican voters voted in the primaries. A person watching television news media coverage on Fox News, CNN, or MSNBC, would get the impression that the voter turnout was tremendous- this is not confirmed by the Pew Trust survey. The Economist points out that had the other eligible voters cast their ballots and even if Trump had a share of these votes, the results might look different. With a highly fragmented vote in the Republican primaries, and about half of the vote going to candidates other than Trump, Trump's voter support would add up to about 8-9% of eligible Republican voters based on the Pew Survey results. The question here would be is this a representative sample of the U.S. or of the Republican Party. And is one likely to make false generalizations about the nature of the Republican party from such a limited sample of voter opinion. Is voter sentiment inadequately reflected, and results hopelessly skewed because of the lack of good candidates in the Republican Party, and Trump's tactical rhetoric appealing to a group of working class Americans left out in the technological progress of the last decade. In the process is the hard work of the founders of the Republic, Washington, Adams, Jefferson, Madison and the framers of the Constitution being undone by a minority of disaffected voters with legitimate grievances on distribution of economic benefits of the technological progress, trade and global manufacturing networks- with a level of divisive rhetoric and decline in levels of public debate rarely seen. These are the clarifications sought from Trump and his response. Attiah raises the question of divisive rhetoric on minorities Hispanics and Black people- Trump says he is only talking about people here illegally, that he gets support from Hispanics here legally. He turns the question to Muslims and says there is a serious problem there that means being careful about how people are being admitted into the U.S. Questions about Trump's controversial statements about a wall with Mexico are not raised. Ryan pushes hard on the question of the libel laws standard that Trump says he is going to change, asking whether this would happen if Trump thinks the reporting "is wrong" but there is no malice. Trump wants the reporting to be fair for him, that reporters call him to check if he did this or that and why, before writing stuff about him, and he sees the reporting from the Post as very bad about him. He says his lawyers would have to tell the media, that he believes he should loosen up the standards so that this kind of coverage does not continue. On ISIS Trump pulls back when asked by Diehl about statements that suggested he would send the number of troops the generals wanted on the ground- estimated at 20,000 to 30,000- saying he would find it very, very, difficult to do that. On a nuclear option for ISIS Trump says he does not favor that. Suggesting that Trump like the other candidates in the election know there are no easy ways to tackle ISIS. Trump would rely on other countries in the region for help with troops on the ground, something that president Obama also favors, with limited results. Diehl also pushes hard on NATO- Trump says hundreds of billions of dollars are going to NATO and the whole burden for defending South Korea falls on the U.S. when it is not now a rich country that it once was. Diehl corrects him by saying for the public record that its not hundreds of billions, and South Korea, Japan pay 50% of the cost for defending their region. Trump wants to see 100% for the Korean peninsula defense borne by the South Koreans and Japan. Trump seees NATO as a good concept but needing more help from Germany, Poland, Baltics. At one point the Washington Post journalists tell Trump this is a position he shares with president Obama. Trump responds to questions from Hiatt about how he would handle the situations in black communities such as Ferguson, Missouri, and Baltimore, Maryland. Trump says he feels law enforcement is important and should play a big role in preventing the destruction of property from day one. He says jobs are what hurts inner cities but offers no solution about how to get the jobs lost in the steel industry for Baltimore, black neighborhoods sitting ironically next to the John Hopkins high technology university complex. Trump brings up the response that jobs could be created if the U.S. simply did not spend money on supporting nationbuilding overseas, a policy that president Obama has supported, and which the public has favored in the U.S. As Holman Jenkins brings up in a column on March 22, 2016 in the Wall Street Journal, these policies are being pursued today, and most of these jobs are not coming back so how would Trump bring them back or do anything about it, especially when Chinese workers in China's factories are being displaced by robotics in places such as Hon Hai factories. The more one thinks about it many of things Trump is saying are already being done, and there are no new solutions Mr. Trump has for today's problems of lack of upward mobility for the middle and working class- a priority for Sanders and Clinton also, not just for Trump. As a television personality and a candidate with a understanding of voter concerns, Trump artfully voices voter concerns of working class Americans for problems that defy easy solutions. Are there risks with Trump's approach that Trump has failed to think through or grasp? Does the unpredictable behaviour Trump suggests that would get allies thinking and trade partners responding lead to unpredictable consequences? Divisive rhetoric creates additional distractions in tackling the problems of the middle class and working class Americans. Divisive rhetoric within the NATO alliance would create additional distractions in tackling the problems of defending the European Union, such as using the very show of unpredictability. Diehl pushes Trump on this question. Would trade threats to China lead to a withdrawal from the Senkaku Islands by China? Trump says he thinks this would cause the Chinese to retreat . What if the Chinese see it differently, in their relations with Japan and South Korea, with a long difficult history, not necessarily in their relations with the U.S. Would a trade war hurt the global economy, and hurt confidence in U.S. fianncial markets just when the U.S. and European economies are staging a recovery, and when the economes of China, Japan and India are in a sensitive phase? These questions could not be raised because of time constraints, but must be on the minds of the editors of the Post and the WSJ, coming from different ends of the political spectrum. How would this help tackle the problem of upward mobility for working class Americans that all the candidates in the presidential election share? ...