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Britain's David Cameron leads the successful effort to hold down spending in the European Union's next 7 year budget plan, supported by Germany and the Netherlands. The new 2014-2020 EU budget plan holds down government contributions to the budget to 959.99 billion euros. There is a 35 billion decrease from the last budget plan after adjusting for inflation, and less than the 1.03 trillion euros proposed by the European Commission, the EU's executive body. Actual spending is set at 908 billion euros compared to 943 billion euros for 2007-2013. Cuts were made in some areas- direct subsidies to farmers went down to 277 billion euros from 337 billion euros. EU funding to tackle high youth unemployment and build transnational infrastructure increased 37% to 126 billion euros. Funds allocated for investment projects in poorer regions slightly declined to 325 billion euros. Special rebates to the UK and the Netherlands remain- the Netherlands rebate is 1 billion euros. The mood of European leaders was summarized in the words of Britain's prime minister Cameron: "Frankly, the European Union should not be immune from the sorts of pressures that we have to reduce spending, find efficiencies and make sure that we spend money wisely that we are all having to do right across Europe."...

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France's manufacturing production level index declined to 92.1 in March 2012. Bank of France information shows zero growth in GDP for the first half of 2012.

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Polls just days before the French presidential election show independent candidate Macron getting about 60% of the 18-24 year age group. There is discontent in this age group because of high unemployment. The unemployment rate is 24% for people below age 25, higher than 18% before the financial crisis of 2008, compared to 7% in Germany for this age group. For people 25 to 29 years it is 14%. This is why Marie Le Pen has appeal in economically struggling northern towns. Yet most French people are finding it difficult to take on an agenda as radical as Le Pen's that takes France out of the eurozone. In the final debate just 24 hours before the vote Le Pen entered into a discussion about leaving the eurozone but showed she had no clear idea of what this would mean for France. She described Brexit as an example and Macron shot back that Britain was never in the eurozone to begin with, and it appeared that Le Pen was just hoping that it would all work out, without a clear grasp of the facts. She had no response to Macron on how an exit could create panic in the markets and lower the value of savings of ordinary French people by about 20%. On pensions she stated that 60 was the age for retirement under her plan opening herself up to the criticism that she had no clear idea of the facts as Macron pointed out- that it would mean lower benefits or higher payments into the retirement system. This may be why even some young people who see the banking experience of Macron as a liability, may be offset by others who see this as a possible asset because of the need for some valuable experience in an independent candidate, as described by Dalton.    ...

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Andy Street, Mayor of the West Midlands Combined Authority, says when you consider that London gets 7 times the infrastructure spending per person than West Midlands, "its not bloody surprising" that his region is not growing fast. West Midlands covers a large part of central England, including Wolverhampton, Birmingham and Coventry. Even life expectancy is lower by 8 years in Blackpool, and disposable income can be quarter in Camden compared to North London. Labor's Corbyn and Conservative's Thatcher in the British general election are both campaigning for reviving the regions outside London, that have seen investment in people and technology lag substantially behind London. Regional revival is the big issue in this election. Consider that London which accounted for about 15% of economic output in the 1980's now accounts for nearly 25% of economic output of Britain. Berlin is about 4% of Germany's economy, and Paris 10% of France's economy. A word of caution on Brexit is sounded by experts at the University of Birmingham, who say the whole process of Brexit is so complicated that it may detract from the task of reviving this region. Even though the political upheaval had origins in this discontent, was it more about shifting government attention to the gap between London and the rest of the country, and less about a complex process of withdrawal from the European Union. ...

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The US economy grew at 2% in the third quarter 2010, compared to 1.7% in second quarter 2010. Unemployment remains at 9.6%, and the growth did not generate hiring. Much of the growth came from business building inventories, exports grew at 5%, imports rose 17%. Residential construction plunged, state and local government spending contracted as it did for 6 of the last 8 quarters. This increases concerns about the economy.

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The UK's Office of National Statistics said construction output fell by 3.7% in the first quarter of 2012, compared to prior year. Output fell 3%. The revised decline in GDP for the first quarter is 0.3%.

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Florida's House of Representatives passed a bill in March that reduces the number of weeks of unemployment benefits from the standard 26 weeks to 20 weeks. A similar law was passed in Michigan recently. Both states have unemployment rates exceeding 10%.

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Krueger and Posner, eminent economists, say the reason wages have stagnated in the U.S. with wages not having budged much over a decade 2008-2018, is not only because of globalization and automation as long term trends. They attribute this stagnation in wages to "monopsony power," or power American corporations have over workers because of their stronger bargaining position and because workers have few alternatives.  For most of this period 2008-2018 high unemployment as reflected by the people out of work and taking part time jobs or having stopped looking for work, shifted bargaining power to companies. The Economist magazine pointed out that workers have not shared in the profit and gains corporations made during this period. Here Krueger and Posner show additional factors such as non compete clauses in worker agreements that have depressed wages. Half of franchise agreements prohibit competition for labor. Outsourcing work to other companies that hire workers means these outsourcing companies have more power over workers than the original companies using the labor. Unions represent only 7 percent of private sector workers by 2017, compared to 35 percent in the 1950's, so that there are no mechanisms to counteract the greater bargaining power gained by companies vs. workers. The way workers have roots in the communities they live and the consolidation of employers into a few companies in a particular area, mean fewer options exist for workers.  Senators Warren and Booker and the anti-trust division of the U.S. Justice Department are in agreement on this issue of widespread use of noncompete agreements that is considered unlawful, says this report in the NYT, offering hope for a solution to bring a better balance between the rights of workers to fair wages and companies seeking profit for stakeholders. Issues about workers, lack of gains for workers, prevalent outsourcing, and the frustrations of labor with parties that had lost touch with their worker base- such as Labor in Britain, SPD in Germany, Socialist Party in France and the Democratic Party in the U.S. - have led to political upsets with support shifting to other parties. This has not led to significant change to improve bargaining power of workers to correct the imbalance that now exists between labor and companies, leading to calls for change. Eric Posner is a law professor at the University of Chicago law school and co-author of a new book "Radical Markets: uprooting Capitalism and Democracy for a Just Society." This book turns the popular notion on its head that free markets have produced the imbalances that hurt social cohesion and democracy, by saying it is precisely the suppression of free competition such as for labor that have created this unhealthy situation. This is true in other areas where monopoly power has developed in other parts of the U.S and European economies in 2008-2018, as also for distortions in capital allocation that hurt infrastructure and other public investment. Krueger is a professor of public affairs at Princeton University and former head of the President's Council of Economic Advisors in 2011 under Obama, showing that Democrats themselves failed to correct this imbalance leading to a shift to other parties and Mr. Trump, who also appear to lack ideas or solutions to this problem that affects social cohesion and democracy. This is contrary to the vision of American or European society of better opportunity for all shared by all Americans and Europeans for most of the twentieth century. ...

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What the French take for granted today- 99% of the French people are covered by national health care- started when Charles De Gaulle faced rising scial discontent in the postwar period, and accepted a demand for worker protections. During the postwar period Frenchmen are paying higher taxes, but in the first 30 years because French salaries were growing fast this was not noticeable. With slow growth and rising healthcare costs its getting harder to increase these tax deductions for overall social security, which have reached one third of apaycheck at the low end, say for ataxi driver in Marseilles. So you have the government running deficits of $15 billion in 2004, even after increasing co-payments for routine care and doctors visits. Experts say this could reach $40 billion in 2010 and $90 billion in 2020. In 2007 health care cost the government $300 billion, or 11 % of GDP, (OECD numbers) and the bureaucracy and rules are getting more complicated. This 11% is well below what Americans pay for asystem that leaves out about 50 million people. France ranked 8th on the OECD list in cost per capita, the US at the top. And the French life expectancy is higher at 80.98 vs. 78.11 for the USA, higher by about 3 years. For this cost the system is cost effective according to the OECD. And the French find the American debate abouthealthcare public option "altogether surreal", as the newspaper Le Monde put it. To keep the system in viable form the government is increasing copayments, such as the decrease in reimbursements from 80% to 65% for routine care and doctors visits in 2004. As aresult the deficit dropped to $6 billion in 2008. ut the global economic crisis and rising unemployment has made this grow to estimated $13 billion for 2009. Measures under consideration: increasing hospitalization copayments to $28 a day from $22. To fill this substantial gap for routine care and other costs the French system has private insurance companies called mutuals that offer different policies. Which is where the Fench notion for equal treatment in health care gets distorted because different people can have different coverage. The French though compare their system to the British system and say theirs is not as nationalized as it appears and the Brisih one is much more so. The French system though supervised by the government is different from government run health care as in Britain. French people are free to choose their own doctor who is often a private practitioner. ...

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During the primaries Trump appealed to blue collar voters of a white working class that felt neglected by leaders and policies of both parties that did not seem to work for ordinary people. Having caught onto this early long before Republican candidates, Trump registered a series of wins in the Republican primaries. He continued this theme in his acceptance speech at the Republican National Convention on July 21, 2016, saying- "The forgotten men and women of our country- people who work but no longer have a voice: I am your voice." The idea was to couple this with the theme of law and order and put perception of Hillary Clinton as part of the rigged system of the past that Trump would change, with Clinton's legacy described in terms of "death, destruction, terrorism and weakness." As a change agent Trump described his entering the political arena in terms of coming into this election only to help blue collar people "so that the powerful can no longer beat up on people that cannot defend themselves." The two themes for the rest of the election season- law and order, and blue collar lives- and who can best defend them a traditional Democratic politician with a fighting spirit for traditional Democratic values, or a blustery newcomer adept with slogans and the public mood and ironically representing the Democratic values of representing the working class to become the  Republican nominee, with the law and order theme thrown in. The voter or independent listening in to all this will hopefully ask what all this means. As the WSJ, July 19, 2016, pointed out in a recent look at economc policies under the two candidates- on Glass Steagall Act being reinstated to increase safety of the banking system that caused many of today's problems through the 2008 financial crisis both Trump and Clinton are similiar, on opposing trade agreements similiar except that Trump's bluster is a riskier approach, on infrastructure building similiar with Clinton's $275 billion plan spelled out out for source of financing and Trump's unclear as to source of financing. On immigration the candidates are different, on the minimum wage which impacts low income people Clinton supports $15 minimum wage and Trump has not taken a stand. On ISIS and the Middle East Clinton is in reality a hawk and not much difference in the candidates, on law and order more chance of divisions in the country with Trump than Clinton. Overall for the working class and blue collar voter his life will take a decade or more to rebuild, with both candidates commiting to go in that direction. And the bluster and ads to come- just that.  ...

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Weakness and lack of economic growth in the rest of Europe is having an impact on the growth rate in Germany. In the second and third quarters of 2011 combined, economic growth in Germany was 1.6%. The economic growth for France during that period was 0.6%. For the third quarter, acccording to Eurostat, the European statistical agency, Belgium had no growth, and the Netherlands reported a GDP decline. Spain showed no growth. Germany had higher growth rates during the early period of recovery after the 2009 financial crisis, and it now appears that this may be because German companies were better able to export, having held down labor costs, and the euro was weaker than what the rate for the deutsche mark would be. This shows a slowdown across the whole of Europe replacing the earlier situation where Germany far outpaced other European countries.

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Krugman says there is cause for concern from May's U.S. jobs report of only 38,000 jobs added- low even with Verizon strike jobs added back in- compared to the 200,000 a month average since Jan 2013. One cannot read too much into one months report, yet the political uncertainty in a election year adds to the problem. The low interest rates near zero offering little possibility for rate cuts, make it difficult to come up with a policy response. Under a Clinton administration the infrastructure spending option would face Republican resistance.  It is not clear how a Trump administration would respond. Krugman says the jobs figure reflects a stronger dollar- a result partly of the Fed's plan to raise rates- that is hurting U.S. exports.

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Friedman reviews Acemoglu and Robinson's new book, "Why Nations Fail." Acemoglu says that nations fail when wealth and opportunities are concentrated in the hands of few people, that a condition for societies to succeed is to create opportunities for more people. For this to happen it is important to create inclusive political and economic institutions. This is an important insight, but for Western society this is an insight as old as Adam Smith when he pointed out the importance of this aspect of western societies after the feudal period in his "Wealth of Nations." For Smith it was the failure to create inclusive societies that led to the gradual unravelling of societies in the river valleys of the Yangste and the Ganges, in China and India, of increasing poverty and the gradual disappearance of what constituted the middle class in India and China. Chapter 8 titled "Of Wages and Labor" in the "Wealth of Nations" makes specific reference to this.

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Landon Thomas Jr. asks the question now on the minds of many bankers in the City of London- did the conditions British prime minister present to the EU leaders at the summit on Dec 9, 2011, help or hurt the City of London and Britain's financial sector? Will the City now have to deal with rules set by the other 26 countries, with Britain's role in their formulation marginalized.

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Immigration, welfare and membership in the E.U. emerge as issues in Britain's 2015 election, making it harder for the Conservative party under Cameron to get a majority. Polls show Labor running neck and neck with the Conservative party at 36%, and UKIP at 12%, the Greens at 5%. The Conservatives introduced proposals to make it difficult for E.U. citizens to get welfare payments, but this is seen as not enough action. E.U. rules allow free movement making it harder to curb immigration. Prime minister Cameron has higher personal popularity than Ed Milliband, and is campaigning on the theme of having set Britain on the right path to economic recovery after spending by Labor had increased the national debt.