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Louis Gallois, CEO of EADS gives his views about reviving European industrial competitiveness.

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European Central Bank president, Mario Draghi, addressing the European Parliament in Brussels on April 25, 2012, supported both sides in the issues facing the eurozone, calling for continued vigilance on structural reforms to improve competitiveness of countries in the eurozone such as Spain and Italy, and at the same time saying it was imperative to generate economic growth. He told the European parliament: "The uncertainty about the present situation is very, very, high... Any exit strategy is premature given the current economic situation." Saying that the fiscal compact had been negotiated recently to control spending, yet what Europe needed was also a growth compact- "but my most present thought right now is to have a growth compact." He emphasized that it was now upto governments and banks to pick up the ball. The ECB's achievement was buying time with its 3 year loans to banks in Spain and Italy and other EU countries in Dec. 2011-March 2012, which he described as no ordinary achievement. Francois Hollande and Angela Merkel seized on Draghi's comments to show they were doing the right thing. Merkel conceded that growth was needed, saying sustainable initatives would be good for Europe, that what Germany was opposing was simply stimulus spending that would increase debt without the structural reforms to improve competitiveness. Hollande for his part said he would call for eurozone bonds to pay for industrial and infrastructure projects, and a financial transactions tax....

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Republican voter sentiment in Springfield, Ohio. Warren Davidson is running for former House Speaker Boehner's seat in this Congressional district in Ohio with the support of Tea Party activists. The median income in the city is $31,635, $15,000 less than the Ohio median. The population has declined from 80,000 in the sixties to less than 60,000, according to Census Bureau. Only about 15% of the Springfield population has a college degree compared to 30% in the U.S. Speaker Boehner had a small group of loyalists and tight control of the Republican party in his district, leading to charges that he was too close to the establishment and business. Trump has support from Republican voters who feel the party has drifted away from them.

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Fed chairman Bernanke estimates the impact of "Operation Twist," will be to bring down long term rates by about 20 basis points, or one fifth of a percentage point. This he said is equivalent to reducing the Fed's benchmark short term rates by half a point. The Fed chairman said he is not ruling out expanding the Fed's portfolio by buying securities, but has no immediate plans for this action.

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This NYT editorial describes the failure of president Obama's immigration policy and the deportation of large numbers of illegal immigrants. It says Obama has deported more immigrants faster than any other U.S. president. And it says president Obama has used even the statement that he would look for ways to make the process "more humane" a delaying action. It says that after some 2 million deportations the whole situation is infuriating.

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Tax cuts initiated by the Bush administration and to a smaller degree by the Obama administration account for $6.3 trillon of the $10 trillion deficit in 2011. This is about half the $12.7 trillion gap between the $2.3 trillion surplus predicted by the CBO a decade ago for the year 2011 and the current deficit of $10.4 trillon. Two wars and higher defense spending add another $2 trillion. The Stimulus added $700 billon. The Prescription Drug Benefit for seniors $272 billion. This is based on new analysis of CBO data by the Pew Fiscal Analysis Initiative. The record shows unrestrained spending by both parties has led to the current mess. Pete Domenici who chaired the Senate Budget Committee at the time of the first tax cuts in 2001 says "in the end the floodgates were opened." This also shows how quickly the situation can change if sound fiscal practices are abandoned. Two wars were financed entirely with borrowed money for the first time in U.S. history.

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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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Krugman points out that without aid to state and local governments, cash strapped cities and states will be cutting back on services and employment, undoing much of the work of the stimulus. These cutbacks by local governments is showing up in the unemployment figures from the Commerce Department. And social cohesion is being strained as the outlook for those without jobs for more than 6 months looks worse with the economy slowing down.

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U.S. presidential candidate Mitt Romney is questioned about the depth of his beliefs by John Harwood, at the November 9, 2011, Oakland University, Michigan, televised presidential debate. Harwood asked Romney if his positions on issues "are rooted in something deeper than the fact that you are running for office." Romeny's response was that he had been married for 42 years, and "been in the same church all my life," and worked at the same firm Bain & Co. and Bain Capital, for 25 years, that he was a man of steadiness and constancy." On key economic issues such as revival of the auto industry and foreclosures, both major issues in Michigan, Romney continued to maintain that the loans made by the government to Chrysler and GM were a mistake. Oakland University is only half a mile from Chrysler headquarters. This view was challenged by Rick Snyder, Republican governor of the state of Michigan, who said- "it wasn't just one or two companies that were at risk, but the entire national suply chain." On foreclosures Romney maintained his position that the government should let the market work, even if this means millions of foreclosures. Romney said: "Markets work. When you have government play its heavy hand, markets blow up and people get hurt," putting the blame for the housing crisis on Fannie Me and Freddie Mac, agencies with a government guarantee that encouraged indiscriminate housing loans. ...

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Research from Australian National University shows steadily improving conditions for migrant workers in China. Migrant workers were able to spend more time in cities- an average of 8.9 years. The hukou sysem ensures migrants return to rural areas when they have to raise a family. About 252 million migrant workers work in factories and construction jobs in urban areas. Migrants with children leave them with grandparents back home. Improving the conditions of these workers is important to reduce the wage and income disparities in China and to reduce inequality. About a fifth of the migrant population now has pension and health benefits. Creating a balanced economy with domestic consumer spending making a larger share of GDP also requires improving wages and benefits of migrant workers. Incoming prime minister Li Keqiang says in a statement on a government website: China "must take migrant rural workers and gradually change them into urban residents. This requires that we push forward household registration reform." If done seriously this will create a new kind of China as these migrant workers are integrated into urban society after years of being shunned and ignored by China's educated middle class. Professor Meng's research at Australian National University of migrant workers shows the proportion of migrant workers with unemployment insurance increased from 11% in 2008 to 21% in 2012. The research shows similiar figures for health and pensions. Improving their living standards also make it attractive for more young people from rural areas to migrate to cities increasing urbanization....

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Friedman says Obama's 2012 presidential campaign lacks bold vision, a failure to articulate tangible achievements, and owes too much to campaign consultants. He describes it as being developed in test tube fashion. The failure to embrace and strongly advocate his own presidential commission's Simpson-Bowles deficit reduction plan, which could be coupled with long term investment in the productive potential of the U.S. economy, shows the lack of courage to prepare a plan going forward. It is likely to cost support of independent, center and center-right voters in the 2012 U.S. presidential election.

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Taylor on the Bernanke Federal Reserve's quandary over its exit strategy from a loose monetary policy. He points to the consensus among leading economists, Rajan, Meltzer, Feldstein, who share his view that the costs of a loose monetary policy outweigh its benefits, that the Fed's policies are not working, and the need for a more rules based monetary policy.

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Another significant development in this crisis, is how small businesses got addicted to credit card debt as a way to operate for ongoing expenses of the small business, from a small nursery, to abed and breakfast or a solo law practice. There are an estimated 27.2 million small businesses who are supposed to be one of the growth engines of the economy. Credit card debt when banks are tightening up credit and businesses are unable to meet expenses, is extremely costly because of the underlying usurious nature of the industry in the US and lax regulation. It will only push more businesses, that have acquired the bad habit of credit cards to finance operations, into bankruptcy. There were 5 million business credit cards in 2000. By 2009 after Visa Inc, American Express Co, and MasterCard Inc. and Discover Financial Services Inc. pushed these cards aggressively, using a new credit scoring system that looked less at the business and more at personal credit scores, the number jumped six fold to what Nilsen Reports estimates as 29 million business credit cards. The spending on these cards jumped for this period four fold, from $70 billion to $296 billion. As the average debt on each credit card jumped so did the likelihood of some of these card holders difficulties. Missed payments could lead to interest rates for some card holders jumping to 30+% from initial rates of 7-8%, all in the last 12 months. This makes small businesses less likely to create the jobs they created in the past, and one more troublespot in this economy....