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A new West Coast Model is emerging with ballot measures in the states of Washington, California and Oregon. The model is to make up for decades of faulty income distribution which favored tech communities in west coast states leaving behind people from minority communities and the working class outside tech hubs such as San Francisco, San Jose and Seattle. During this period budgets for education and healthcare, social services and essential infrastructure suffered as budgets were squeezed for local governments. Minimum wage also lagged behind and communities struggled to keep up. Washington votes for a ballot measure that raises the minimum wage to $13.25 statewide and mandate paid sick leave for workers. In California a ballot measure makes permanent an income tax surcharge on millionaires to use these funds for education. In Oregon measure 97 places a gross receipts tax on corporations with annual sales in Oregon over $25 million, raising $3 billion a year for schools, health care and other programs. The California and Washington measures are likely to pass, Oregon uncertain, say experts. And even in Oregon supporters have learned from the experience to put forward new proposals on the ballot. The Washington measure is supported by Nick Hanauer, and Zach Silk, president of Civic Ventures in Seattle, who say it is essential to put more money in workers wages to increase growth and to bring better lives outside the tech hub areas. Most of the tech booms of the last two decades have not touched the areas outside tech hub metropolitan areas. The conservative approach adopted in Louisiana and Kansas of reducing taxes first and then when holes in state budgets developed to cut education, health and other service expenditures has not worked, and it has led to the backlash in the form of the new West Coast Model, which is expected to be brought up in other states in the east and midwest. The tech hub areas have grown with the boom in tech but this has largely ignored the rural areas, communities just outside of the tech cities, and led to uneven and distorted growth shortchanging the working class and the middle class, and hurting investment in education and healthcare across each state. Bill Whalen, a research fellow at Stanford University's Hoover Institution conservative think tank ,says that its hard to deny that the balanced growth for all communities across the state has lagged far behind as the tech booms boosted growth in the economies of California, Oregon and Washington. An article in the German online site Zeit on Silicon Valley described this vividly showing how this can happen in communities sitting side by side in the San Jose area, with minority Hispanic communities and working class communties seeing very little of the benefits of growth. ...

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Galston of the Brookings Institution says globalization has hurt workers in manufacturing with job losses and declining incomes. It has produced outcomes that have favored some industries such as tech, and not others such as automobiles which in the past helped create the broad middle class by offering good paying jobs to people with less than a college education. Immigration has created an issue that political leaders outside of the main parties have appealed to in France, the U.S. and Britain. The result is a polarization in the voters that has rarely been seen to this extent before. The middle class in the period from the 1950's to the 1980's is not the middle class that we see today in Europe and the U.S. The 2008 financial crisis added to the problems with the slow and uncertain recovery for some groups such as white men, the less educated, students, and people on minimum wage. 

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The recent appointment of fast food executive Andrew Puzder as Labor Secretary has caused great concern among union leaders. Puzder supports a $9 minimum wage compared to $15 supported by Democrats. Unions now represent 7% of the labor force, down from a high of 20% during Reagan's time when Reagan appointed a construction company executive as Labor Secretary and cut regulations.  Globalization has thinned the ranks of workers in unions. And the failure of Democratic administrations to stem the shift of factories overseas to China, Mexico and other places, as part of global supply chains focussed on cost, has weakened Democratic support among workers since the period of Bill Clinton. It eroded to the point where Obama won 65% of support among unions and Hillary Clinton won 56% in 2016. Interestingly the Republican Romney gained 33% versus 37% for Trump, showing voters were more inclined to move away from Democrats and only a smaller number willing to support Republicans, but the shift enough to give Republicans a win in 2016 for the presidency. The figures are from a Election Day survey of trade union AFL-CIO, and a larger proportion in midwestern states showed disaffection with policies from Clinton to Obama. In fact Obama spent years promoting another free trade agreement TPP that favored tech more than auto and older industries, just as Bill Clinton had promoted NAFTA, without giving thought to what this was doing to its worker base of support. A similar situation happened with Social Democrats in Germany as a SPD administration moved to the centre and handed Christian Democrats led by Merkel a win in parliamentary elections. As Democrats such as former Labor Secretary Reich, a professor at UC Berkeley who served under Bill Clinton, describe the problems of working class people their is less reflection on the impact of the changes from globalization and how Democrats handled or mishandled it, and more on the politics between the two parties.   ...

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The first of a series of quarterly reports put out by the Federal Reserve Bank of New York, on the subject of household debt and credit. It shows that the process of unwinding consumer debt in the US is a slow and painful one. The figures tell the story, which touch every aspect of the US economy and business, with ripple effects through the world economy. Total consumer debt is $11.7 trillion as of June 30, 2010, which is down 6.5% from the crest reached in the third quarter 2008. Credit card accounts are down 23% from the high reached in second quarter 2008, and mortgage obligations down 6.4% from 2008. By mid 2010 11.4% of consumer debt was delinquent, and this was up from 11.2% in 2009. $1.3 trillion of consumer debt is delinquent, and $986 billion is seriously delinquent- that is 90 days late. Serious delinquencies are up by 3.1%. Other figures fromt he Fed report: Half million people in the USA had a foreclosure added to the credit reports for the period March 31, 2010 to June 30, 2010. This was up 8.7% above the figure for first quarter of 2010. New bankruptcies showed up in credit reports for 624,000 people during that quarter, an increase of 34%. Another major problem stacked on top of this for consumer spending- the Fed's interest rate policy according to Todd Petzel, chief investment officer of Offit Capital Advisors, burdens consumers with a tax of $350 billion in income lost from low to zero interest rates. This creates two problems of its own. Not only does it depress consumer spending. It also makes consumers reach out for riskier investments. This figure was calculated by taking $14 trillion in debt issued by Treasury, federal agencies and municipalities. Rates are near zero on short term Treasuries compared to 3% average over the years. Taking 2.5% on $14 trillion, the figure of $350 billion was arrived at. Or 2% of gross domestic product. Analysts say that it would be better not to save a few zombie banks at the expense of consumers and pension funds. It lowers the cost of the deficits through the lower interest rates the government pays on its debt, but lower consumer spending and a limping economy hurt tax revenues and increases the deficit....

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Chile, Mexico and the U.S. rank high in the diabetes rate for top soda consuming countries. In the U.S. the diabetes rate is at 7.7% of the population, in Chile 9.6% and Mexico 9%. Soda consumption per capita was at 165 litres in the U.S., 146 litres in Mexico and 134 litres in Chile, and 145 litres in Argentina where the diabetes rate is at 3.9%, for 2012. A new public service ad in Mexico City subway stations says it all, showing an ad with a soda bottle and the words- "Would you take 12 teaspoonfuls of sugar? Soda is sweet, diabetes isn't." The new Pacto de Mexico agreed to by all major political parties includes the soaring diabetes rate in Mexico as a problem to be tackled, including lunches at public schools and the consumption of coke and sodas by children. A particular acute problem in Mexico is the lack of clean drinking water in many areas and the dependence on coke and sodas for liquids. But bottled water could be used in its place if available at lower prices. One proposal is for a soda tax which could generate $2 billion and be used for setting up clean drinking water fountains in schools and other places. Elected officals in Mexico are firm about the need for action, as Mexico recently became the first country over 100 million inhabitants with the highest obesity rates at 7 adults out of 10 over the age of 20 obese or overweight, and the consequently high diabetes rate. Diabetes is the No. 2 killer in Mexico, and a serious health danger. Coca Cola gets its second highest revenues from Mexico after Europe, and the situation has evolved after years of heavy coke advertising to the point where Coca Cola is taken at every meal by some Mexican families, and is a sign of prestige. The company's response is to fight the public service ads with ads showing people burning off 149 calories by walking. The country now faces a long and uphill fight. Russia is one of the countries which is also conducting a similiar fight against soda drinks. The Bloomberg Philanthropy is financing efforts against soda drinks in Mexico, as part of its campaign against smoking and sodas as health hazards, and this maybe Bloomberg's bigger contribution to society than his service to New York City. Developing middle income countries such as Mexico, Chile, India, China, Brazil, are the hardest hit by soaring diabetes. And the costs to their health systems in 10-20 years from uncontrolled obesity and diabetes will be enormous. The U.S. is a developed country with similiar high rates of obesity and diabetes, with soaring medical costs, and serious problems that strangely have not received the public awareness and efforts that one should expect. ...

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The truth is very different from the rhetoric coming from the Obama administration about helping Main Street America and ordinary workers against "fat-cat bankers," says Goldfarb. Under the Obama administration banks have grown larger and gained more influence over administration decisions. No conditions were made part of the agreement that would require banks to lend a portion of the money handed out to the banks to ordinary borrowers. And not much of significance was done to help homeowners under water, which would enable a faster recovery. In this respect the policies slanted in favor of banks of the Obama administration worsened the prospects of an economic recovery. Experts from Reagan advisor Martin Feldstein- who as early as 2008 advocated serious help to homeowners under water to reduce principal and interest- to the FDIC's Sheila Bair and Princeton Prof. Krugman, across the ideological spectrum, perceived this being in the national interest. Feldstein's first op-ed on his plan appeared in the Wall Street Journal on 3/7/2008, followed by ones on 4/15/2008, 10/4/2008, 1/20/2010/ 10/12/2011 in WSJ, and a oped on 10/30/2008 in the Washington Post, repeating the call for siginificant debt reduction to homeowners. Banks had extraordinary influence on successive administrations in the U.S., both Republican and Democratic- the Clinton, Bush and Obama administrations- so that policy actions could be distorted from what would otherwise take place. A study by two University of Michigan professors shows that banks did not increase lending after receiving government money. Instead taxpayer money was used to invest in risky securities for profits from short term price movements, resulting in gains of about 10% in investment returns. Ran Duchin, one of the two professors, says helping ordinary borrowers was not the most profitable use of capital for banks. Without the necessary conditions from the Obama administration, the banks depolyed capital in ways that did not help the economy. Similiarly when banks needed to be restructured no preparatory action was taken because of resistance within the administration- a request by President Obama to Treasury Secretary Geithner for preparing a plan for the restructuring of Citigroup was ignored, according to a report by Goldfarb and Wallsten on 9/17/2011 in the Washington Post....

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Friedman compares the anti-corruption movements in India and the U.S., the world's two largest democracies. The Occupy Wall Street anti-corruption movement in the U.S. focusses on the excessive influence of banks on lawmakers, regulators, and the government, through the use of campaign money, revolving door for government officials and regulators to join banks, and intense lobbying. The anti-corruption movement focusses on corruption in government at higher levels, such as the handling of government licenses, and at the basic levels of needing to bribe officials for something as simple as getting a birth certificate or other government document. Both have pernicious effects, in the U.S. excesssive bank influence leads to taking excessive risk for higher bonuses, putting the entire financial system at risk and creating a crisis in housing that delays the economic recovery. And in India the corruption leads to retarded progress, as funds to invest in infrastructure and development are siphoned off, business and entrepreneurs are required to pay bribes at each step, and ordinary people face the need to pay bribes for the most routine interactions with government officials. In the process this creates more unequal societies by skewing the distribution of benefits from wealth created to groups that are better equipped to game the system. The economic system once distorted in these ways has tendencies to take talent away from productive activity and innovation which create wealth, and direct it towards speculative activities....

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A leader of the Syrian moderate democratic opposition to the Assad regime calls for help from the Obama administration for the moderates and Free Syrian Army. The request for Manpads to counteract Assad's air attacks and the deteriorating situation around the city of Aleppo and in Northern Syrian areas controlled by the Free Syrian Army. The collaboration between the Hezbollah, Assad's forces, and the ISIS as each attempt to increase the areas under their control pushing out the Free Syrian Army and moderate forces fighting the Assad regime. Hillary Clinton comes out against the Obama administration's policies in August 2014, saying "don't do stupid stuff" basis of Obama policies is not the basis for a sound foreign policy. Obama comes out with a $500 million aid plan for the Free Syrian Army but the approach is vacillating and slow, leading to a rapidly deteriorating situation, and a complete breakdown of what was a period of hope called the Arab Spring.

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Bernard Lewis's "The Arabs in History," is a short book which confirms Zakaria's point about the openness of Islamic societies before the 19th century, with some exceptions in certain periods. Most books or a quick look at Wikipedia shows us that the Renaissance in Europe in the 15th century got its boost from books by ancient Greek authors that were available in Arab societies long after they were forgotten in Europe. His point about Indonesia and India is also true to a large extent except for periods such as the one under Aurangzeb (17th c.). Muslim societies in British India (todays Pakistan and Bangladesh) experienced less social and educational reforms under the British than Hindu societies for various reasons leading to larger backwardness, illiteracy which breed extremist ideas. This is likely to change throughout North African Arab societies and South Asia in the next 50 years, especially with the modernization drive underway in India, which is likely to spread to other parts of the region. Islam as a missionary religion with force of arms spread in the 7th-9th century rapidly over Arab North Africa and parts of west Asia, and later to South Asia. Once established there were long periods of openness to ideas and books, and different cultures ( with the exception of preferences for Muslims), and a stress on commerce which inherently reduces religious vehemence, as the example of Britain shows. For this reason the current conditions in Islamic societies is more atypical than typical. A factor that has worsened it is that 19th c.-20th c. Islamic societies have put less emphasis on commerce and industry than historically seen in prosperous Islamic societies, on which more research is needed to understand why. Another factor is the impact of the interface with technologically and scientifically progressing Europe and America not becoming a learning experience for acquisition of this science and technology and making it one's own, a pattern seen in Buddhist societies of Japan in 19th c., South Korea in 20thc.,and China 21st c. Because Buddhism sprang from Hinduism or a response to Hindu ideas in India, India could be put alongside China for the 21st c. rapid assimilation of western science and technology making it one's own. When there is a violent collison between Japan and U.S. Admiral Dewey's ships, or China and British advances around 1900, the initial reaction of rejection is reversed with adoption of western technology and practices making it one's own. Similiar response in India. Islamic societies have had an extended period of rejection for reasons not fully understood even today. This is likely to generate the kind of internal debate about how to revert back to the usual mode of adoption in Islamic civilization, with the potential catalyst in India and other locations in the Middle East. The most respected German of the 19th century is Alexander Von Humboldt, a naturalist who advanced scientific knowledge, and a mentor to Charles Darwin in England, author of "Origin of the Species." Humboldt says- "There are no inferior races, we are all humans, and we are all destined to reach for and grasp liberty." That Humboldt spent most of his best years in Paris, France, which he compared to the provincialism in his native Berlin, goes to show how Humboldt, Darwin and Humboldt's friend Aime Bonpland of France, maintained close cooperation and friendship and anticipated the close cooperation in Europe since the second half of the 20th c., long before European politicians and governments grasped this. Commerce, science, travel, media and free exchange of ideas, are as favorable to progress as politics and ideology is inimical to it....

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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....

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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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Gen. Martin Dempsey took a cautious approach to U.S. involvement in Afghanistan and Syria. He did not approve of the way Gen. McChrystal expanded U.S. involvement in Afghanistan, and the hasty manner in which the Iraqi army was trained under his predecessors leading to some commanders being appointed who later became members of sectarian death squads. Under his command the U.S. limited its role in Afghanistan and Iraq and handed more responsibility to local forces. Gen. Dunford who succeeded Dempsey as chairman Joint Chiefs of Staff for the U.S. follows the cautious approach set by Dempsey. Dempsey's approach extends to what he believes is an Heisenberg effect in physics where when you you observe or touch something it changes the way it functions and operates. For critics such as Senator McCain, who served in Vietnam as a pilot, if Dempsey did not want to intervene in some country, he could invent the reasons not to get involved. President Obama exceeded the caution exercized by Dempsey, leading to a situation where the U.S. after hasty action under a Republican president seemed to lurch in the opposite direction under his Democratic successor by not taking action where U.S. presence was needed, followed by a corrective course to make up for this....

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Kessler in the WP corrects Obama's claim that he created 800,000 jobs. He says this is clever arithmetic as it takes a low point in Feb. 2010 following the financial crisis. Kessler points out that according to the Bureau of Labor Statistics, U.S. manufacturing jobs were 12.56 million in Jan. 2009 when Obama became president. In Nov. 2016, early estimates show there were 12.26 million manufacturing jobs, a loss of 300,000. This loss does not reflect the problems in the U.S. auto industry and older industries in the midwestern states as a result of trade and globalization that speeded up with the rapid industrialization of China. And led as Greg Ip pointed out in a recent WSJ report to a rapid acceleration of job losses in a decade that did not happen in the same scale during Japan's industrialization and urbanization in the sixties. This aggravated the situation in Michigan, Ohio, Wisconsin, Indiana, and Pennsylvania, and was met with a feeble response from Democrats. Even a economist like Krugman favoring the Obama administration's efforts came to the conclusion that TPP did not add much to gains from trade as most of the gains had already been realized. More of the gains went to tech and IT in California, at the expense of the auto industry based in the midwest. A report in WP show a president too close to IT in California and failing to grasp the situation in the midwest. Voters punish whoever is in power, regardless of being Conservative or Liberal, in Canada the hollowing out of manufacturing under Harper in Ontario and Quebec led to the win by Trudeau's Liberals.  ...

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A number of issues came up at the Women20 Summit in Berlin. Annette Niederfranke, Director of the International Labor Organization, brought up the issue of family reconciliation as "one of the toughest challenges for working women worldwide," that in order to meet obligations women tended to work in "non standard forms of employment and in part time work linked to lower wages, lower social security, lower benefits, and fewer training possibilities." Childcare was also an issue that was prominent considering the lack of adequate childcare in many countries including in the European Union. With responsibilities for the elderly, babies, and small children women tend to be in the workforce for shorter periods leading to men taking up many of the higher positions. Angela Merkel pointed out that Gemany tended to take a narrow view of professions available to girls, saying- "So it is very very important that we take a broader view of things while girls are still at school." Merkel also supports a Africa compact that would help women set up small and middle size businesses in poor countries. The "Digital" aspects of this and other efforts for women were a major topic being discussed. One idea that came up was that more cooperation from men was needed to make things happen. This is the third Women20 Summit after ones in Turkey and China, and a sense of momentum was felt by women. ...

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Michael Getler describes the missed opportunity under President Obama for using one of America's most talented diplomats to engineer a peace agreement between the warring factions in Afghanistan- the U.S., the Pakistan army, the ISI and its support in the army, the Taliban, and the other parties such as the Haqqani faction and the Afghan government of Karzai. Holbrooke had used his experience for another President, with the same force of his larger than life personality, when he helped bring about the Dayton Accords in a similiar area of stubborn ethnic strife. Could Obama have tapped Holbrooke's skills and set aside the distractions of his personality as coming from an American with unique gifts, talent and achievement, is the question Getler asks. And is this a comment on the nature of the Obama Presidency and America's poorly invested hopes.