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Jim Dwyer discusses proposed legislation in the New York City Council in November 2011, to set a "living wage" of $10 per hour, plus benefits, for workers at new developments receiving more than $1 million in public money. Under this legislation employers who do not include benefits would pay an hourly wage of $11.50. Discussion in the City Council has led to questioning this legislation on the grounds that the developments would not be built under the new rules. Dwyer points to San Francisco, which has set the minimum wage at $10.24 for January 2012, plus mandatory contributions to health insurance funds. The number of low wage workers in New York City with some college education has increased by 70%, according to the Fiscal Policy Institute. Wages at the bottom were $10.85 an hour, adjusted for inflation in 1990, in 2010 the wages were $10. What this does is further increase the income disparities and inequality in the U.S. Because of the demographic changes in America with Hispanic children representing a large proportion of young children, and the high rate of dropouts from highschool in the Mexican American community in New York, this means more children in New York City growing up below the poverty line....

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The European Union Commission says Ireland must recover 13 billion euros in back taxes for giving tax preferences to Apple that are against EU rules. The EU Commission says Ireland allowed Apple to pay a corporate tax rate of 1% on its European profits in 2003, and .005% in 2014. The EU Commissioner says the use of Ireland as the place where Apple pays taxes on operations in Europe has no base in reality, as most profits are earned in other countries outside Ireland. Taxable profits of Apple "did not correspond to economic reality," according to Ms. Vestager, the EU Commissioner.  In the current environment where political upheaval is unsettling the democratic process in the U.S., Britain, Spain, France and Italy, as well as in Brazil and other countries in the developing world- because of deep recessions, and efforts to cut the deficits with deep cuts in state spending including in education and healthcare, basic services- the moves by companies to reduce taxes to these absurdly low levels such as .005% when other companies in the EU are paying 12.5%, is becoming increasingly unpopular. As pointed out in this BBC News article this sounds like the way Carnegie, Rockefeller and Vanderbilt operated during the late 19th century, and were seen as operating in a manner that was above the law. Janet Yellen pointed out at a Boston Fed Conference on inequality in Oct 2014 that the bottom half of the distribution or 62 million households in the U.S. in 2013, had a net worth of about $10,000, One quarter of these households had a net worth of zero dollars. The working class and blue collar workers in the U.S. provide much of the support at Trump rallies. Younger college educated people support Sanders, because of the situation of the working and middle class in the U.S., and a similar situation exists in Europe. It is for the sake of the democratic process and delivering services in education, healthcare, and other basic areas to all, that companies small and large need to pay their fair share of taxes, regardless of size, influence, or technological advantages. Today this is is seen by most leaders who draw public support as the right way forward for the U.S., Latin America, Europe and Asian countries, including proper allocation of resources to best serve the needs of working people. For example the 13 billion euros is equal to all of Ireland's healthcare budget, and 66% of its social welfare budget.    ...

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Casey describes the crucial policy errors in Brazil with over spending and lack of transparency in the years leading to the crisis in 2014-2015. Brazil raised interest rates half a percentage point in May 2015 to 13.25%. Inflation was at 8.13% in Brazil in March 2015. Brazilian companies have large dollar denominated debt accumulated during the boom years which needs to be refinanced as its currency the real declines. With current policies economic growth is likely to continue at 0-1%. Russia made policy errors with the departure of Kudrin as finance minister for Putin's second term as president. Policies to attract foreign investment, controlling military expenditures, and continuing growth were reversed as Russia took positions on Ukraine that led to western sanctions, capital outflows, and a sharp decline in the ruble. By May 2015 the ruble and oil prices had recovered from lows, but the ruble was still 35% below the level in June 2014, and the oil prices were still only two thirds of the peak in 2014. Russia sees the decline in the ruble as a way to reduce imports and increase import substitution for many products. The economy is weakened by high inflation- inflation was 6.9% in March 2014, going up to 16.9% in March 2015. In May 2015 Russia lowered the target repo rate by 1.5 percentage points to 12%. Russia faces stagflation- high unemployment with low GDP growth, and high inflation....

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Amol Sharma and Paul Beckett of the WSJ interview Finance Minister Chidambaram about the Indian government's decisions to open up the insurance, retail and airline sectors to foreign investment, and bring the deficit down to close to 5.3% in 2013. Faced with slowing growth and the risk of credit ratings agencies lowering India's credit ratings the government of prime minister Manmohan Singh has decided to take some decisive steps, including a shift in coalition partners to maintain parliamentary support for these steps. When asked about what influenced the government's resolve to take these decisions, Chidambaram says credit ratings was one factor, another was the difficulty Indian companies were having raising capital inside the Indian market and overseas. In addition he says growth could not be sustained at earlier levels without new capital, and new foreign investment was needed for sustained growth. The Kelkar committee report provided a sense of urgency to the government by providing an independent view and showing the worst case scenario if the government maintained the status quo. Chidambaram says subsidies will now be transferred in the form of cash directly to beneficiaries and reduce costs by cutting leakage in the system.The government will use the list of LPG cooking gas households to transfer the subsidy for 6 gas cylinders directly to beneficiary accounts. The plan is to do the same for the Rural Employment Guarantee Program and subsidized foodgrains to cut the leakage that stems from duplication and falsification. The Indian government's ongoing program to use information technology to have computerized records of the the entire population and linking to the financial system, incuding a large rural population, now makes it possible to take these steps. On the Kelkar committee's recommendation to increase prices of basic commodities cooking gas, kerosene and food to reduce government subsidies, Chidambaram says this is ambitious and the government has to consider the political context even though it agrees that this has to be done over time....

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Porter of the NYT points out that the figures released from census information that the U.S. median household income increased by 5.2% in 2015 to $56,500 is good news for Americans including minority and working class families at the lower tiers. However more needs to happen compared to previous recoveries in the mid-90's, and for people who suffered during the recession to finally put that experience behind them, says Porter. 

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Amar Bhide touches on the unpredictable consequences of devaluations while commenting on the supposed benefit of a country having its own currency vs a currency such as the euro. The euro takes away the advatantage of devaluing the national currency as a way to regain competitiveness. Bhide points out that devaluations hurt the elderly on fixed incomes and low wage workers. Protections have to be put in place for the sections of the population that are badly affected. Large union negotiated wage increases can also reduce the benefits of devaluation in terms of regaining competitiveness.

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How will countries like India generate jobs when technology enables manufacturing and other activity to do work with fewer and fewer people. Even Hon Hai in China is shifting work to robots. Technological progress is leaving more people unemployed and widening income gaps with the benefits going to a few people, says the Economist in this research based essay. It will require carefully managed governance to invest in infrastructure, raise skills of less skilled workers through education, and wage subsidies for those left behind to ensure our current system works in the future.

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EpiPen's price has jumped 550% over 8 years. Mylan Pharmaceuticals is dominant in the $1 billion market for treating serious allergic reactions. Mylan acquired reights to sell EPiPen in late 2007. A pack of two list price is now $608.61. Last Nov. Sanofi's competing product Auvi-Q was recalled giving Mylan price dominance. A problem for consumers is that EpiPen expires in one year. Mylan launched a campaign to make parents aware of the product for children with peanut and other allergies, and also lobbied the governments to make ready supply of EpiPens available in schools and other public places. Now the controversy over price increases, with Hillary Clinton citing this as an example of exorbitant pharmaceutical pricing, is likely to change the environment around EpiPen and other overpriced drugs or healthcare products.

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Systemic risks from "too big to fail" and the pushback on capital reserve requirements that leave banks with lower reserves. Ewing describes the role of the president of the Swiss Central Bank, Mr Hildebrand, in setting rules for higher capital reserves for Swiss banks than that of other countries and the pushback from the banks resisting the new regulations. "He will never find another job in Switzerland," a Swiss newspaper Der Sonntag quoted one banker saying this about Mr. Hildebrand. Losses at Swiss bank UBS during the financial crisis and the $2 billion loss at a UBS trading desk in 2011 have created a new awareness of systemic risk at banks. During the financial crisis banks used an optimistic estimate of "risk weighted assets" which led to insufficient capital reserves in a crisis even as the banks were shown to be well capitalized. A sense that banks in Europe and the U.S. will continue to have insufficient capital reserves at 3-4% of assets under new rules and with the longer phase in times for the new Basel III regulations of reserves at 7% of assets to after 2016....

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Galston cites a Federal Reserve Board of Chicago 2014 study showing setbacks for black people in achieving improvement in income status. Even for children born into middle income black families about 55% are expected to fall below middle income status compared to 36% for children of white middle income families. The problem is not just the gap as Galston points out but what it says for the declining income mobility for the white middle class when 36% are likely to see declining status and prospect for the future, and 23% will see no improvement. Overall it shows a lack of income and social mobility for whites and minorities alike compared to the past improvements since the 1960's, not a bright prospect and less hope for the future the way things are, and why so many of the establishment candidates and existing policies are being questioned by voters.

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Unemployment is over 25% on Chicago's South Side black neighborhoods. Conditions have deteriorated with the higher unemployment since the economic crisis. Residents see little improvement since the days of Obama as a community activist in this part of the city.

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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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A slight shift in American opinion favoring a deal with Iran is shown in a WSJ/NBC poll in July 2015 compared to the poll in April 2015. Support for reaching a nuclear deal with Iran remains stable at 36% in both polls, the opposed drops by 6 percentage points to 17% from 23%, and the percentage of people who say they do not know enough to formulate an opinion goes up to 46% from 40%. The intricacies of a nuclear technology deal and the sites involved lead to a high percentage of don't know enough to give an opinion. Factors hindering a deal include inspection of military sites, and Iranian intentions. Factors favoring reaching a deal now is the risk that this would mean Iran would go back into isolation and the opportunity to work with moderates might be lost. The Rouhani administration was an effort by voters to elect a government that could ease or remove sanctions to improve the economy and living conditions- its failure would lead to Iran losing an opportunity to open up to the world. The pressure from the U.S. Congress and Israel served to push for a verifiable and effective agreement to control development of nuclear technology for weapons systems. Behavioural factors involved are the very young population in Iran which has no memories about the period before the revolution in 1979- 70% of the population of 74 million are people under the age of 35. This group is eager for ties to the outside and could change Iran's outlook and policies int the future towards moderation. Risks in not reaching a deal also include the possibility of the Saudis developing nuclear technology and nuclear proliferation. Winners from a deal because of the flow of Iranian oil to world markets and a period of extended low oil prices are the U.S., Europe, China and India. Germany gains new markets to replace the growth in the Russian market after sanctions. Lifting of an arms embargo, an added risk in the last days of the talks, would be mitigated by making the lifting of that embargo very gradual....

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The median net worth of Hispanic and Black families has been severely affected by the recession. Because minorities hold a much larger part of their assets in household equity the foreclosure crisis and the recession have had a devastaing impact on both minority groups. The median net worth of Hispanic families dropped by two thirds and black families by half after the 2008 recession from the 2005 figures, and was around $6000 for 2009 for both groups, according to data from the Pew Research Center. The Pew report shows median net worth of a white family is 20 times that of a black family, and 18 times that of a Hispanic family, with the gap between these minorities and whites twice as large in 2009 compared to the period before the recession in 2005. This was even true for Asian American families, whose median net worth dropped by half from 2005 to 2009, to $78,000. The figure for whites dropped much less from $135,000 to $113,000 during the same period. Another significant finding is that within each group the share of the wealthiest 10% of the people increased between 2005 and 2009, for all households this went up from 49% to 56%, for Hispanics from 56% to 72%, for Blacks from 59% to 67%....

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David Brooks on the candidacy for U.S. President of Senator Rick Santorum. He says Santorum genuinely represents the working class- a grandson of a coal miner and the son of Italian immigrants who has represented workers of the steel manufacturing region of western Pennsylvania. Santorum has pushed hard in this campaign largely ignored by the media. He has visited 370 towns riding in a pickup truck trying to cover as much ground as possible and talking with great conviction about his positions distant from the corporate and financial wings of the Republican party, about family, and communities. Bring someone like Sherrod Brown of Ohio together with someone like Rick Santorum and you have good representation of the working class across the political spectrum to win this election for the working class of America, says Brooks, who sees this as a lot better alternative today than Harvard Law.

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Moritz Kramer, a managing director at S&P, says Spain, Italy, France and Portugal cannot depend on austerity measures and cuts in spending alone to resolve the eurozone crisis. This is only one aspect of the problem facing the countries in southern Europe. The major reason for the problem is the lack of competitiveness in their economies. Nobel winner Stiglitz also points this out and adds that its important to note that the human and natural resources of Europe are the same and the potential just as good today as before the eurozone financial crisis. He says southern Europe has failed to utilize its human and capital resources and improve its technologies in ways that would make it more competitive with Asian countries. Experts point to the decade it took Germany to address problems created by inflexible labor markets, wage competitiveness, and investments in technology and human resources to get to where it is today.

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U.S. Defense Secretary Panetta describes plans to support forces of the Free Syrian Army during the summer of 2012. The efforts had the backing of key members of the National Security team and Secretary of State Clinton. The plans were rebuffed by president Obama and the election campaign team because of the approaching November 2012 election and the president's hesitation to get involved in the Syrian war. Plans were developed by CIA director Petraeus, supported by General Demsey of the Joint Chiefs, and Leon Panetta. Plans were to vet forces in the Syrian resistance, to provide training and arms. After Petraeus resigned because of an extramarital affair and Clinton had a concussion, these plans were not taken up again. This shows that by summer 2011 the consensus was for supporting Syrian democracy forces in the Obama administration, only to be held back by president Obama. This is likely to be a question for future generations of Americans as they assess the record of the U.S. in the Middle East and the missed opportunity. ...

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A report from the U.S. Federal Reserve on the impact of the financial crisis of 2008-2009 on the wealth of American households. Between 2007 and 2010 says the report the median net worth of American families went down by 39%, from $126,400 in 2007 to $77,300 in 2010. This had the result of putting Americans back to the level of net worth in 1992. Much of the loss in net worth was from asset value reductions. The median value of stock market based retirement accounts decreased by 7% to $44,000. The biggest drop was in housing values- falling by 42% to $55,000 in the three years. Americans are working down their debt- a quarter of families are debt free, credit card balances declined 16% to $2600 from $3100 from the period 2007 to 2010 of the report. Yet the median level of family debt remains the same as more families support their kids education by taking out college loans. Median income fell about 8% to $45,800 in 2010, with income losses especially large in the manufacturing industries as the U.S. manufacturing sector worked to improve competitiveness. Other factors supplement this picture. The burden of college loans increased to over $1 trillion for middle and working class families. With the burden of college debt young people were more likely to delay buying first homes, indefinitely dealying recovery in the housing market. Seniors on retirement see interest income from savings negligible with low interest rates and higher risk in a volatile stock market. ...

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Krugman points out that the federal tax rate for the top 1% is 34% in 2013, according to the Congressional Budget Office, because president Obama let the high end Bush tax cuts to expire. It is the number to remember says Krugman- 34. In 2008 the figure was 28.2. Under Hillary Clinton the average tax rate for the top 1% would go up by 3.4 percentage points, according to the Tax Policy Center. Some of this would help pay for the tution plan to provide access to the middle class to public universities. Under populist Trump, Krugman points to the elimination of the inheritance tax and tax rates going down substantially, and no such programs to promote the upward mobility that everyone is talking about, and no way to pay for a big infrastructure building effort for growth and jobs- upward mobility that is the focus of every candidate's election campaign including Sanders, Trump in appealing to older white working class families, Clinton, Ryan, Bush, and others in both parties.   ...

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Most Americans pay less in taxes, including state, local and federal taxes, today than in 1980 in inflation adjusted dollars. The taxes have gone down by 2-3% for incomes in the range of $50,000 to $150,000, and gone down by 3-4% for incomes between $150,000 and $350,000. Taxes have gone down over 7% for incomes above $350,000. The main reason is the decline in federal income taxes.Tax rates increased in the period to 1990 and declined from 1990 to 2010. The Democratic party and president Obama are pushing for increase in taxes for incomes above $250,000. Republicans are resisting the changes citing disincentives to investment and growth for small business which generates a large proportion of new jobs created in the U.S. economy. The New York Times study shows the percent of the U.S. population that makes between $200,000 and $350,000 almost doubling in the period 1980-2010 and at the same time its share of the U.S. income remaining the same - many small business owners who hire employees would fall into this income category. Republican's response is for tax reforms that reduce loopholes, deductions and other tax expeditures that disproportionately help the wealthy. Democrats say this cannot create enough revenues to address the deficit, when mortgage deductions, charitable deductions are excluded. The back and forth is leading to stalemate but also opening up discussion for the first time on whether the mortgage and charitable deductions make sense in today's environment. A significant portion of revenues lost in the mortgage deduction goes to affluent households, subsidizing larger borrowings to build larger homes than otherwise, according to the Brookings Institution. Politicians have resisted changes that would go against powerful lobyying groups in the past, yet the impasse has opened up new thinking outside the box because of the pressing need to come up with a solution....

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David Stockman was Budget Director under President Reagan and known for his prodigous grasp of statistics in the national budget. Here he takes on what he describes as disproportionately large and destructive banking system for the U.S. economy, which he says the nation desperately needs less of. He supports the small tax of 0.15% of the debts other than deposits of financial conglomerates. His words are some of the strongest yet to come from one of the most prominent people on Reagan's economic team about how the nation's banking system has beome unproductive in supporting economic activity which is its reason for existence. The destructive effects on social cohesion and the middle class is emphasized. He says for years the Fed has run an insanely loose monetary policy that has encouraged this behaviour and socially detrimental profit seeking by the banks and other companies. He sees the big banks as dangerous institutions in today's economy engaged in a bull market culture which believes in entitlement and profitseeking behaviours regardless of its detrimental nature for the national economy. The recent profits of the banks in 2009 and the resulting bonuses are a result of the Fed's easy money policy and bank's gambling at the Fed's monetary casino as he puts it, with money obtained at little cost from Fed-controlled money markets. This article helps to eliminate the distorted perspective in today's climate that paints criticism of splitting up the banks, or otherwise restricting banks in engaging in proprietary trading and risky behaviours, as government interference. As Stockman puts it these banks are already in some sense wards of the state and not private enterprises and this issue is not relevant. The question now is how to set things right and this involves possible solutions such splitting up banks that are too big to fail, restricting risky behaviours and preventing proprietary trading, and other actions as unusual steps for unusual times to get things working back to normal. In other times Stockman would not have said this in an op-ed piece if this were not so....