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Because India is still largely rural with about 65% of the population in the countryside rural poverty is a matter of huge importance. In a country of a billion people this is easily about 600-650 million people the vast majority of the world's poor. Though low inflation in agricultural produce and in agricultural wages have increased concern for rural poverty in India there are changes in multiple dimensions that have raised the quality of living in a big way. There is a major thrust in government programs directed at multiple levels for clean India, housing healthcare, cooking gas, electricity, banking, in the rural villages. About 4 million homes are built annually with government assistance and investment in rural programs has more than doubled in the last 7 years.  The National Food Security programs NFGSA guarantees purchases of rice and wheat at very low prices -set at 2 rupees per kilogram of wheat and  3 rupees per kilogram of rice or about $0.03 per kilogram.  This reduces the pressure on migration to cities making cities less inhabitable and finding it hard to cope as in countries like Indonesia, Philippines and in Africa. It gives more time for urbanization to take place in a better way as more resources and infrastructure is created for urbanization. Some states in India are about 50% urbanized with Tamilnadu (Madras or Chennai),  and Kerala (Cochin, Thiruvanathapuram) in the south and Maharashtra (Bombay or Mumbai) and Gujarat (Ahmedbad) in the north west, are at about 50% urbanization rate. The low inflation rate for agricultural wages affecting farm incomes combined with contributions by rural people to complement government contributions for housing, healthcare,  reduces the mount of money available for consumer spending in rural areas, affecting the economy. A problem in the short run, but with synergistic changes across multiple dimensions pushing the country forward across urban and rural areas. With the huge urban infrastructure spending increases creating more space for economic growth across the country. There is a general sense that for development a multi dimensional approach is needed, and a rising tide lift all boats as India urbanizes like China has done in the last 20 years. ...

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China's breakneck growth was enabled by housing construction, and coal in a way that created problems of climate change. Now China's largest housing developers Evergrande and Country Garden together have a staggering $500 billion in debt and in serious financial trouble in or near default. How will China's government respond? It let Evergrande who had defaulted on debt payments build 300,000 apartments last year, just to protect home buyers. Now it's founder Mr. Xu is taken in for questioning and "illegal crimes." Making sure that the apartments on which people made deposits are built would cost another $72 billion, says Nomura. Yet suppliers, painters, builders and brokers are owed another $390 billion, in one estimate. And foreign creditors are getting together for complicated restructurings. Evergrande had entered wealth management promising 8 or 9% returns and has stopped making payments. All this is affecting public confidence in the future and China's growth story. For decades China depended on housing construction for high growth rates. Now the process is unwinding with both in financial difficulties. This NYT report says that after Evergrande's default, Country Garden failed to make a payment on $200 billion in debt last week and has 400,000 apartments that it sold but has not finished building. ...

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The biggest part of oil use in the USA is in transportation and this is where the savings have to come from. Americans were driving twice as many miles a day as they did in the last oil crisis in 1979. So a lot of the savings are to be expected in fewer miles driven as prices rise. The other saving will have to come from more efficient cars with better fuel efficiency and use of alternative fuels. Americans consumed 9.1 million barrels a day of gsoline in April 2008, two million barrels a day more than in April 1979. In 1979 of every 100 barrels of oil produced globally 29 wnet into American transportation, homes and power plants. This figure is only slightly down to 24 barrels so there is much room for significant reduction in a world economy where new technology can be accessed and the Japanese model for conservation shows further gains have already been made in other countries. So Chinese and Indian demand and demand in other newly developing countries will play a part but the US and Europe by showing the way in new technologies that can be adapted for use to reduce overall emissions and to get more out of each barrel of oil would find that these technologies are attractive to China and India in stretching a limited resource for increasing numbers of users in large demographics. Figures from Cambridge Energy Associates....

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Katya Adler, Europe Editor of the BBC, points out the change in Germany as AKK, Anne Margaret Kampbrauer, the new leader of the ruling CDU party, brings a change of tone in its outreach to Britain. AKK is slated to be the next chancellor. Her vision was expressed in a letter to The Times saying with other Germans that her wish was for Britain to remain in the EUroepan Union, that she was asking Britain to reconsider. She also supports a second referendum on Brexit.    There is also anxiety in Germany about the effects of no-deal Brexit taking out 0.5% of German GDP at a time when Germany's economy is struggling in 2019. About 100,000 job loss is expected from no-deal Brexit in Germany. As Germany's tone is changing, AKK offers a new face in German relations with Britain that looks towards building a better relationship with Britain. Could this change minds in Britain as a new mood takes place in Germany, and in some ways in France with the emergence of populists in recent years calling for France to leave the EU. AKK tell BBC that Brexit has been a strain for all of us, that in some ways it has paralyzed us. She tells the BBC's Adler that anything that keeps Britain in the EU is something that would make her personally very happy. Rarely have German leaders or public expressed it in this way. Compared to the indifference of the past Germans and Britons having second thoughts offer some more light to the issues of Germany and Britain at a more personal level. ...

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In May 2008 the Honda Civic takes the leader position with most sales for a brand passing the Ford F 150 pickup, Honda's Accord and Toyota's Camry and one other car probably the Corolla also passed the F150 in sales, as the sales of the F150 plunged by 33% in May. This according to figures from Autodata, an industry statistics firm. A lot of new things are happening which will change the face of the industry forever. Japanese cars outsold American cars in the American market for the first time with 48% of the market compared to 44% for the US carmakers. And American carmakers now see the changes that are taking place to be permanent. In a sense economics and public perceptions are doing what makes sense in a globalized economy and a global workforce and globally shared aspiratuions for a better life in rising middle classes throoughout the develping world. For Americans to drive around in gas wasting vehicles was riding against the face of scarce energy resources being used in the best possible manner around the world to meet the aspirations of a global workforce of global companies. IBM now has as many or more people working for it in other countries and a huge number in India, how can scarce energy resources be used to meet in the best possible way to meet the aspirations of all of IBM's people, or for that matter the people of any other global company? Its only by Americans shifting to smaller cars and fuel conserving cars that this could happen. ...

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A joint article by Robert Rubin, Clinton era Treasury Secretary and Jared Bernstein of the Economic Policy Institute. Rubin was senior adviser to Citigroup during the period that Citigroup leveraged itself and invested in lower quality securities that have left the firm exposed to substanital losses, and led to hiring a new CEO Vikram Pandit to clean up the mess. And this may explain the joint article with a less well known economist Jared Bernstein, and the tentative nature of their advice as the two differ on the important issue of long term fiscal deficits and still agree on investing heavily in healthcare, education infrastructure, worker training and energy. In a short recession they may be complementary and you could have the best of both worlds as in the other postwar recessions. But this is unlike any of the postwar recessions and is shaping up to be a long and deep downturn unlike anything seen in the postwar period. That Rubin does not even mention this shows that probably he is out of touch, as he was during his years when Citigroup was acting much like the other banks that were in serious trouble this year. Some of the decisions for lax regulation during the Clinton years were taken with the support of Rubin and Greenspan. What Rubin calls the longest expansion could have been for the most part good fortune and a steady period for the economy with Rubin's contribution being fiscal discipline, stewardship of the Mexican rescue package and committment to free trade policies, but not facing upto huge headwinds in the economy that required challenging leadership and judgement. Here Rubin mentions nothing that suggests bold vision and judgement, instead hoping that old policies that worked during the good times would somehow work today. And on some issues like labor being squeezed and getting a smaller portion of the economic pie with no support for unionization, a drop in the number of unionized workers and weakened labor bargaining strength, Rubin who now sees this as a bad trend for the working middle class incomes, did little in his years in the Clinton administration to reverse or slow this trend. He cites productivity growth of 20% from 2000 to 2007, and yet the real income of working age middle class households was falling $2000 or 3%. ...

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David Malpass is the choice of the Trump administration to head the World Bank. He has worked with Latin American countries at the State Department, was the Treasury official responsible for the World Bank in the Reagan administration, and worked on Argentine currency, China trade matters in the Trump administration.

Malpass negotiated a $13 billion replenishment for the World Bank in 2017, with U.S. share of $1.2 billion. This capped the bank's lending at $25 billion.

Last year the World Bank provided China with $60.5 billion in loans for 400 projects, which this WSJ editorial says is loans China does not need with its $3.07 trillion in foreign reserves. This editorial is critical of the current World Bank head Dr. Kim for taking a job with a World Bank partner the private equity fund GIP.

The World Bank has played a significant role in development for South Asia and China in the early years after World War II.

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The WSJ's Laurence Norman talks to Yukiya Amano, head of the UN agency, the International Atomic Energy Agency (IAEA), which has the responsibility of verification and inspection of Iran's nuclear development and facilities. Amano describes the issues raised by a 2011 report which outlined 12 sets of concerns to which Iran has to explain, a condition included in the final nuclear agreement. Iran has to respond by mid-August, IAEA then responds, and does work in Sept and Oct, and submits its report by Dec. 2015. Yamano says he has to fill in all the missing pieces in this jigsaw puzzle to get a full picture of Iran's nuclear development. Iran has denied access to military sites and Mr. Amano couldn't say if he has access to the Parchin military site. A concession that was made in the agreement is the long interval of three weeks before access to a particular site that arouses suspicions-the agreement gives Iran the right to appeal an IAEA request to visit such a site to a special commission. The U.S. and its European allies have a majority on the commission yet three weeks are allowed in which Iran could move material to some other location. For critics the question will be why such a concession was needed if Iran truly has decided not to develop nuclear weapons technologies. The U.S. president's response at a news conference on July 15, 2015, was that with the laws of physics the U.S. monitoring tools would detect nuclear activity at that site. The agreement also gives Iran an earlier than planned lifting of a ban on sales of arms and missiles and missile parts if the IAEA says Iran's nuclear activities are peaceful. Iran could conceivably wait till the ban is lifted and its economy in a much stronger position to withstand any future limited sanctions to pursue nuclear weapons development. This would have delayed development for a few years during which time the hope is that Iran has changed into a more peaceful nation pursuing economic development in its region, yet even if this is the case as as happened with India and Pakistan it could still pursue nuclear weapons development. The alternative is a status quo till a better agreement is reached with the leverage of tight economic sanctions and continuing dialogue during which time Iran continues to get closer to a nuclear weapon, or the use of force to prevent this. Iran added the arms embargo issue during the last weeks of the negotiation in June, a controversial move on Iran's part, as this may have complicated the picture with ballistic missiles technology exports to Iran approved after 8 years in the final agreement, compared to the agreement reached in April 2015 which made no mention of the lifting of the arms embargo. Iran played on the notion that if Zarif returned to Iran without an agreement hardliners including Khamanei would veto any agreement, yet this could just be the Iranian negotiating strategy. U.S. president Obama stated at the July 15, 2015 news conference that it would be hard to hold sanctions for longer. Critics might argue that China was already benefitting from the small easing of sanctions by increasing Iranian oil imports by 30% in 2014, and would have less incentive to withdraw from sanctions, as it is dependent on the U.S. and the EU, major markets for its exports and access to technologies. A WSJ/NBC poll in July shows almost half of the people polled in the U.S. saying they do not know enough to express an opinion, a steady 36% support an agreement, showing that the public has not been educated and taken along during the different steps in the largely secret negotiations....

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During a public dialogue during the federal government's open day German Chancellor Scholz takes time to go over the origins of the war in Europe as he understands it. Of Russia acting "clearly with the intention of conquering its neighboring country," in an imperialist manner. Here is what he said- On Nato During talks before the war started in February when he met Putin in Moscow Scholz assured Putin that Ukraine would not join NATO "in the next 30 years." NATO was never a threat to Russia even though Putin says NATO's increasing eastward expansion was to the detriment of Russia's interests. On the origins of the war in Europe- Scholz says Putin launched the war for "completely absurd reasons." During his talks with Putin for example he says Putin told him that Belarus and Ukraine should not be independent states. "This is a war that Putin, Russia, started, clearly with the intention of conquering its neighboring country. I think that was the original goal." "Putin actually had the idea of swiping a felt-tip pen across the European landscape and then saying, 'This is mine and this is yours.' " Something Germany could not accept. Scholz condemns Putin's imperialism. He compares Russia's actions to the early days of imperialism. Scholz was reported to be reading Cambridge historian Brendan Simms book Europe- The Struggle for Supremacy in Europe from 1453 to the Present, before the war started. Simms shows a Europe that fought intermittent wars for supremacy between European powers Spain, Britain, Dutch, French, Germany, Austria- Hungary, Russia, Sweden over most of the period 1450 to 1950. The last part of the period was marked from 1850 to 1900 by an openly imperialist land grab for territory in Africa and Asia between Britain, France, Japan and Germany.  The period 1950 to 2000 marked by the Cold War between the US and the Soviet Union and China.    On planning for the war in advance- DW.com reports that Olaf Scholz is convinced that Putin planned this war long before the Russian invasion of Ukraine on Feb. 24. On the future of the war- Scholz says he will not end the dialogue with Putin. Scholz and Germany, Biden and the US want to show that the imperialist type of expansion into neighboring states is no longer accepted, not for Russia or China. Scholz says Russia is currently engaged in gaining territory in eastern Ukraine, but it is not certain that it will stay that way, so giving in is not a sensible strategy.  Ukraine needs the Black Sea ports and the area around Kherson on the Dnieper river to maintain its economy through exports of foodgrains. There is international consensus that these exports are essential to most of Africa and other parts of the world. The war in the remaining part of 2022 into the winter is being fought in this area. Another area of international consensus is that of the refugees mostly women and children in other parts of eastern Europe, and the displaced people within Ukraine moving from the east and south to the west. For the first time the US and Germany are providing Ukraine with the air defense systems that it needs to protect refugees, something that was missing for the many early months of the war leading to millions of refugees inside and outside Ukraine.       ...

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Consumer Financial Protection Bureau comes out of a playbook of one party that supported no changes in the Financial system in the US and no consequences for financial wrongdoing in the mortgage and banking speculation financial crisis of 2009 that upended the world's financial system. The Obama administration did little to tackle the root causes of the crisis and no serious consequences for financial wrongdoing. With financial interests vested in the structure of both parties work in the financial business could go on as usual with minor changes such as the Consumer Financial Protection Bureau and financial settlements of no serious consequence. Along with this rural areas, farmers and agriculture were given less priority than Silicon Valley during the years of the Obama administration 2008-2016. The passion for a serious overhaul stems from the sense of injustice suffered by rural America and by tens of millions of middle class Americans who took the first blows with patches of period of less work or parttime work at low wages in a battered economy in the aftermath years of the global financial crisis caused by irresponsible bankers in the years 2010-2014. This strained finances and savings only to be followed in 2019 by the Covid pandemic imposing more strains on finances of American middle class and working class people. ...

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The International Energy Agency sees a shortfall of 12.5 million barrels a day when it compares the needed 37.5 million barrels a day by 2015 with the planned supply increases showing 25 million barrels a day. A lot depends on the assumptions and what the 37.5 million barrels a day is based on. Does it account for a slowdown in the world economy and a drive for fuel efficiency and conservation habits by 2015? How much of this is reflected in the numbers? And on the planned increases of 25 million barrels a day- does it account for increases that may be planned in 2009 and 2010 in response to prices above $150 a barrrel which is expected? The IEA has a team of 25 analysts working on the forecasts but it gets no cooperation from Saudi Arabia about its individual fields production, and Venezuela, Iran and China also keep their information a secret. This makes supply forecasting a difficult business. IEA uses IHS Inc a data provider, USA Geologic Survey, oil and service companies information and national petroleum councilds information....

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Boris Johnson, who heads a minority government in Britain following resignation of Theresa May, will do just about anything to push Britain out of the European Union by October 31st. He has said he would "rather be dead in a ditch" than ask for an extension of the October 31st deadline. The British parliament is dead set on preventing that and has passed legislation requiring a extension of the October 31st deadline to January 2020. Johnson is even willing to go to jail for breaking the law, on the grounds that he is simply supporting the people's referendum choice over an elected parliament. This is itself a strange situation because the elected representatives in parliament decide for the people, and views in a referendum can change over time. Johnson says the reports of Britain's economy taking a blow from simply falling out of the European Union without a negotiated deal are exaggerated. He even once said all it means is that there might be "a shortage of Mars chocolate bars." Before becoming prime minister with a one vote majority in parliament which he promptly lost on the first day parliament met, Boris was a journalist who was elected Mayor of London. His only other position was for a brief period with controversy as Foreign Secretary in Theresa May's government. By taking in as chief adviser the head of the Brexit referendum Leave campaign Mr. Cummings, Mr. Johnson shows he believes he could win a general election with a carefully orchestrated campaign like that of Leave that blames the Labour Party, and the Scottish National party for stopping Brexit and halting the people's mandate.  The question is whether Cummings has gone too far or Boris Johnson has gone too far using Cumming's methods and views. Many Conservative moderates were expelled from the Conservative Party by Johnson and Cummings leaving the Conservative Party in self-destructive mode and the worst shape it has been in its history. It is not clear that after 10 years of austerity and rule by the Conservative party, and the mess from the single minded pursuit of Brexit that has overshadowed Britain's other priorities, that the British public would simply give a broken Conservative Party another mandate without thinking carefully about all the consequences. More so amid the lack of trust that is a feature of the Boris Johnson minority government.  ...

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This report in the WSJ provides details on the groundwork that was laid by the Trump administration as it worked to find a solution to the problems facing Venezuela with refugees and economic crisis, and months of protests. The plans were set in the days before Nicholas Maduro took office for the second term as president. The night before Juan Guaido, head of the National Assembly, declared himself president, U.S. vice president Mike Pence stated that the U.S. would support him if he took the reins of government from Maduro by invoking a clause in the Venezuelan Constitution that makes the head of the National Assembly take the office of president if the existing president is declared illegitimate taking office unlawfully. About 60 nations did not recognize the elections that gave Maduro a second term. On Jan 2 Mr Trump who feels deeply about the collapse of the Venezuelan economy and rising poverty, the suffering of the Venezuelan people, met with presidents of Brazil and Colombia. Colombian president Ivan Duque and Trump hinted at a plan to cooperate to help people fleeing Venezuela and respecting its democratic heritage. Mr Pompeo spoke to allies of the U.S. The National Assembly laid out its plans on Jan 15, for using a constitutional mechanism that allows the head of the Assembly to lead an interim government till new elections are held if the existing president is declared illegitimate. A leading Republican senator of Cuban origin Mr. Rubio supported the move. On the eve of protests in Venezuela Rubio and two other senators from Florida met Mr. Trump and Pence at the White House. Also present were Bolton, Pompeo, Ross and Treasury Secretary Mnuchin. Mr. Trump then decided to do it. He placed a call to Mr. Guiado  to tell him that if the National Assembly invoked Article 233 the U.S. president would back him.  The U.S. believes the rank and file in the military are with the opposition even though its leaders back Maduro. After the U.S. action, the governments of Brazil, Argentina, Chile, Peru, Colombia, backed the move for an interim government. The European Union called for free and credible elections. Russia and Mexico supported Maduro.  The State Department instructed the U.S. Federal Reserve about Guiado government as the sole representative for Venezuelan assets in banks. Sanctions could be placed on Venezuelan oil exports as backup efforts proceed to support the interim government. ...

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Rising wages and rising production costs for Chinese exports of low tech products like shoes, clothing, toys, clothing, furniture, means a lot of these factories will shut down and move to lower wage countries like Vietnam and India or elsewhere. Elimination of rebates on more than 2000 export items raises cost of manufacturing 14-17% according to Guangzhou based American Chamber of Commerce in South China. And the the tough new labor law enforcing worker rights would increase manufacturing costs by 40% according to the Textile Council of Hong Kong. Additional costs would be incurred to meet tougher environmental controls and anti pollution laws and stricter enforcement. As a result of this Adidas wants its suppliers like Taiwan based Apache Footwear with 18000 employees in Guangdong to move as fast as they can to India where it opened a second factory. This process will unfold over several years till India and Vietnam bercome the new sources of cheaper goods because of the large supply of manufacturing labor for lower value added products, as it will take years to build the logistics and infrastructure for these plants in these countries. But because wages will also rise in India and the laws in India are more likely to be enforced than they were in the atmosphere in China where the Communist led government may have turned a blind eye to enforcement and worker rights in the interests of growth, the export of deflation to the west in the way of cheap Chinese products may be a thing of the past. China is doing this as a planned move it appears. Why? On the surface it makes sense that the heavily polluting factories making lower value added products like shoes, clothing, toys, furniture, would not receive rebates from te state and to improve living conditions and promote consumption at home the government woud pass tough new laws to ensure employee benefits and collective bargaining rights, and employee job security. It also reduces trde tensions at a time when the US economy will be in poor shape and jobs lost become a political issue in the 2008 presidential campaign. But there may bigger pressing concern and urgency in these moves after so many years of this being discussed and this may be that China finally may be at a moment when it is confronted with a sober fact that the US consumer is heavily in debt and may not support China's export growth model much longer and with it China faces a really significant slowdown in its growth rate from 11% to maybe half that if China does not develop its own domestic markets for growth. The old foreign investment model may not work anymore. See the link to Ireland where growth is falling off quickly. Higher wages and longer term jobs with benefits would enable a large middle class to develop from this huge manufacturing worker base especially as China moves to more value added products where even higher wages would be paid. This in turn creates a domestic market over time that would insulate China to some extent from the winds that would be blowing from a US economy suffering from a deep recession that may last several years. This may be evident in the words of the Governor of Guangdong when he says that the government is not abandoning the exporters but that selling domestically is good for the country and good for the people. Something deeper is at work here and one would expect an about turn in policy where instead of workers not receiving back wages and lax enforcement that went on freely in the last decade we would see an effort to build the kind of middle class that would provide the market for Chinese goods that would sustain growth at a more modest but sustainable pace. Which means in the short term all those workers at factories that make toys, shoes, clothing and furniture in provinces like Guangdong would be jobless. Some of these factories may move to provinces in the interior like Sichuan and Hunan provinces which may pickup employment. A report by the American Chamber of Commerce in Shanghai written by Booz Allen says that a fifth of the companies surveyed are considering relocating outside China, and that over half of foreign manufacturers surveyed think that mainland China is losing its competitive advantage to places like Vietnam and India....

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The first presidential debate in Denver, Oct 3, 2012. For the first time Romney came out as a recent Republican governor of Massachusetts, the most liberal leaning state in the U.S. For a reason that remains a mystery, except that Romney had to shore up support with the conservative base of the Republican party, Romney did not aggressively adopt positions that would appeal to the vast majority of Americans- from people on foodstamps which he said in this debate had increased by millions under the Obama administration, working class Americans, ordinary Americans about to lose insurance with higher premium costs from the unending increase in the cost of healthcare, seniors on Social Security, workers insecure or losing jobs as the economy fails to recover, and young people who cannot find work. As governor of Massachusetts Romney had to be able to address the needs of different income groups, the middle class and working Americans, and his own father who is his role model was a governor of Michigan, a liberal leaning midwestern state with the largest number of autoworkers in the U.S. He asked Obama directly how he could have focussed on Obama care and passed it without a single Republican vote when 23 million Americans were out of work and the first priority should have been high unemployment. Obama responded by saying he would defend the middle class but did not say what he would do in the next 4 years that was different from the economic policies between 2004-2008. Romney made clear that he was not going to reduce taxes if it would increase the deficit even though Obama said Romney planned to increase taxes by $5 trillion and worsen the deficit. At one point Romney said looking at Obama that he could own a house, a plane, but could not own the facts....

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Reflecting the volatile nature of the global economy with systemic risks remaining, impact of sharp cuts in spending, and the danger of oil prices exceeding $150 with a mideast crisis, the IMF provided a wide range of possibilities around its basic forecast. The IMF says it expects the global economy to grow 3.5% in 2012, up 0.2% from a Jan. forecast, and a forecast of 4.1% for 2013. But the IMF says this depends on the eurozone crisis, which could take off 2% from global output and 3.5% from output in the eurozone if things went wrong in Europe. Higher oil prices above $165 with supply disruptions after Iranian sanctions are another danger. Its forecast for Europe is 0.3% contraction in 2012 and 0.9% growth in 2013. Because of the risks in the outlook the IMF cautions countries from cutting spending too quickly, and says the best approach is to reduce deficits gradually over the long term and not to move too fast in the short term. This word of caution applies to Spain, the UK, France and Germany. To maintain enough funding in a crisis the IMF plans to increase its lending capacity from $380 billion by an additional $280 billion, with pledges of $60 billion from Japan, $26 billion from the Nordic countries, and $200 from other eurozone countries. ...

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Ezra Klein cites Ed Luce, who writes in the Financial Times, that the real unemployment rate in the U.S. is 11%, when you count people who have no job but have given up looking after months of fruitless searching. These are the long term unemployed and pose risks for the economy and for society. Compared to 2007, the percent of people in the U.S with a job or actively looking for work has dropped from 62.7% to 58.5%. Luce's 11% is arrived at by considering these 62.7%, including millions of workers who have quit looking but would start looking again if the labor market brightens. This is important because U.S. government statistics show unemployment dropping below 9% in November 2009, supposedly an improvemment, when its actually the reverse that is actually happening. The real underemployment is nearly 20%.

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With the UK budget deficit approaching 12%, Mervyn King, Governor of the Bank of England, said at a postelection conference that he intended to intervene as little as possible in the election, yet it was important that he comment on the measures for reducing the fiscal deficit as it would color monetary policy for years to come. During the election King warned the the UK's top credit rating, "was ours to lose," and his comments were seized by Cameron to question Brown's handling of the economy. King said that Greece was a clear warning of what could happen if budget deficits were not brought under control. He also described the agreement to trim the budget deficit reached between the Liberals and the Conservatives as a very strong and powerful agreement. Conservatives say they plan $6 billion pounds in budget cuts this fiscal year.

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Landon Thomas Jr. looks at the situation in Spain and finds it hard not to conclude that austerity policies are not working in the absence of economic growth, and increasing unemployment. Unemployment in Spain is at 24% and growing. Deficit reduction is likely to take longer with the deteriorating economic outlook. Spain's economy minister, Luis de Guindos has announced Spain plans to increase consumer taxes in 2013, including the VAT, which is currently at 18%. This would further depress consumer spending. Bondholders sense dangers from lack of economic growth and competitiveness, as much as they sense dangers from uncontrolled regional spending. As a result investors are leaving Spain. According to analysts at Credit Agricole Cheuvreux in Madrid, 100 billion euros (132 billion) have left Spain, including distress sales- coming from insurance companies, pension and sovereign wealth funds reducing holdings of Spanish bonds.

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The IMF loans of $18 billion approved in March 2014 are conditional on structural reforms in Ukraine which will be painful. This includes a 50% increase in the price of natural gas on May 1, tax increases and spending cuts, flexible exchange rates. About 10% of the state officals will be cut and decreases in pensions for judges. Higher taxes will be placed on alcohol and tobacco products. Prime minister Yatsenuyk, says without the reforms and IMF-EU loans the economy woud contract by 10%, with the package GDP would decline by 3%. Ukraine's 10 year dollar denominated government bonds had a yield of 8.94%. Years of large state subsidies for natural gas, mismanagement and corruption have left Ukraine's finances in bad shape. Ukraine now faces austerity measures similiar to that in other Eastern European countries and Greece, leading to continued political unrest.

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The educational system in Italy suffers from the same problems as the economy- a strong tendency to exclude young people who can bring new energy and new skills to the classroom or the workplace. New teachers are made temporary working at lower salaries with only 1 year contracts. The average age for teachers is 50. A teaching exam for new positions would normally be held every 3 years. The Education Ministry simply postponed this and the exam held in 2012 is the first since 1999. Upto now hiring freezes and budget cuts were common. The exam held in 2012 attracted 321,000 applicants for 11,500 job openings. Young people in other professions such as law who were stuck in temporary work also applied. This also reflects a high unemployment rate of 14% for people ages 24-35.