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As Prime Minister Aso's ratings in the polls drop to 20%, it looks increasingly likely that the Liberal Democrats will lose the election that has to be held before September 2009. Yoshimi Watanabe, who was minister for administrative reform in two previous administrations and the most visible face for reform of the bureaucracy at the current time, quit the Liberal Democratic party recently. Aso's plan to stimulate the economy with a $130 cash payment to all people in Japan is meeting with skepticism and disapproval, as it is considered doubtful it will jumpstart the economy. Polls indicate 70% of voters oppose it. Aso came in as PM in September 2008, before the full brunt of the global economic crisis hit in November 2008. Voters see him as another old face of the Liberal Democratic party, older politicians who do not have the popular appeal especially with the shift to the younger Obama type politicians in the USA. The Liberal Democratic party has ruled for all but 11 months since the Second World War. Polls also show voters trust the opposition leader of the Democratic Party, Ichiro Ozawa, more than Taro Aso....

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Zeit Online shows in this article the continued efforts of the Russian government of president Putin to discredit Chancellor Merkel, following efforts to do this for Hillary Clinton in the U.S. presidential election.  During the Ukraine crisis and the settlement accords of 2014 Germany was seen as a partner by Russia, following sanctions, and renewal of these sanctions Russia no longer sees Germany as a partner. This report shows Russian efforts to discredit chancellor Merkel and the use of RT German channel, WikiLeaks reports of Chancellor Merkel and the TTIP agreement, for the same purpose. The refugee crisis following what is happening in Syria with Russian involvement, terrorism, financial crisis aftermath from 2008, are being used  says Zeit Online to support a movement for "order" as the state ideology now put forward from the Russian government. This could be an early indicator for the 2017 German federal elections, says Zeit Online. Merkel has said that she supports continuation of western sanctions on Russia. It is hard to see what Russia has gained in improving its economy and the standard of living of the people from this type of political action. Putin was able to achieve economic goals during 2005-2010 using good Germany- Russian relations as shown in LyrArc. This was the earlier period of Putin's terms in office, with a broad group of advisors, including finance minister Kudrin, who set forward a prudent economic course for Russia including foreign investment. The world and Russia are poorer from the departure from this earlier set of policies which would have enhanced Russia's economic growth. Kudrin was fired in September 2011, and the economic course has gradually drifted away from what is most prudent for the Russian economy and growth, and for the global economy. Nationalism was part of an earlier period before 1950, that led to frequent wars and economic catastrophes. A new course has been set since then, especially by American presidents Truman and Eisenhower, and people in India, China, the developing world, in Europe and in the U.S., would see little to gain from the politics of that earlier period in world relations.  ...

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A survey of immigrants all over the world asked about their new living standards shows Mexico at the top with Taiwan, Portugal and Spain. And Kuwait at the bottom. Surprise is that New Zealand ranks next to Kuwait at the bottom. The reason is the high cost of living and jobs not paying enough, fewer opportunities, a growing rich poor divide. New Zealand ranks high in the natural environment and climate, yet the cost of living is too high in relation to salaries. New Zealand ranked below global averages in worklife- in feeling fairly paid for work, seeing purpose in work, or liking workhours. By comparison Australia ranks ninth from the top- for the economy, compensation and work hours. 

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Greg Ip of the WSJ looks at the impact on the economy worldwide from the effects of variants of Covid-19 in 2022. He cites IMF estimates that global output will be 3% lower in 2022 than it had projected in 2019, with Western Europe and Latin America taking larger hits. US growth is distorted and disrupted with the effects of absence of workers from illness (5 million American workers not working in December 2021 because they were sick, or caring for someone sick or afraid of spreading it), supply shocks from supply chains, 7% inflation. The boost to productivity from digitization conceals the impact of an overworked and fatigue prone remote working workforce, says Greg Ip.

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The constructive contribution made by the G-20 meetings of leaders towards building agreement on economic and other policies for peace and progress in the global economy. The meetings were especially useful for coordinating policy and addressing issues arising in the global economy after the 2008 financial crisis. Here Li Baodong, China's vice minister for international organizations and conferences, international economic affairs, describes the path ahead: IMF reforms implementation, better coordination of macroeconomic policies, pursuing the anti-protectionist and free trade policies with further support to the WTO and ministerial MC9 meeting in Bali in Dec. 2013, and infrastructure financing proposals for developing countries on the agenda at the St Petersburg, Russia, G-2- meeting in Sept. 2013. Baodong says the mechanism called the Framework for Strong, Sustainable and Balanced Growth as part of the G-20 meetings is a major achievement. Each G-20 economy submits it macroeconomic policy plan for a Mutual Assessment Process under this arrangement. The progress from the Bretton Woods financial architecture to the new arrangement- from the G-6 to the G-20 to include developing countries from India to Mexico and Brazil- is another major achievement, not fully recognized by the public, says Baodong. Interestingly Baodong makes particular mention to global rebalancing, rather than pushing what he calls the impossible task of increasing demand to get growth. This is a realization coming to China's economic policymakers under the new Jinping-Keqiang administration after the overly aggressive effort to stimulate demand in the 2009-2011 Stimulus, and the ensuing financial problems in the banking and credit system. It is indicative of the policy shift and its implementation underway in China in 2013-2015....

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As Russia expands its intervention in Ukraine in Feb. 2015, a former Deputy Treasury Secretary in the Clinton Administration, Roger Altman, points out the importance of the response of global financial markets. Financial markets have downgraded Russian debt, and the ruble continues to lose value. With $200 billion in foreign currency reserves available to tackle the financial crisis caused by $150 billion in capital flight and 50% loss in ruble value, and a business sector with large dollar debt, Russia, he says will have to take into account its weak financial situation. Arms aid to Ukraine to which Russia can respond is not a good option compared to stronger economic sanctions, says Altman. Altman points out- what president Obama has also pointed out- Russia has a GDP the size of Italy, a population of 140 million, with its budget and economy overly dependent on oil exports, and an economy connected to the global economy and dependent on global technologies. It lacks the economic strength to continue with its more aggressive policies, and cannot ignore world opinion indefinitely or isolate itself from the global economy. This is true of any country in the global economy, and especially for any emerging market dependent on foreign capital, foreign investment and foreign technologies, making it important for Russia to play by the rules of fairness in the international community in the postwar global order of peaceful cooperation. As Schemann points out in a NYT editorial observer Russia is losing credibility in the global community....

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Chavez and the changes underway in Latin America that required economies to be part of the global economy to grow and prosper. In addition Brazil, Mexico and other countries in Latin America have added social programs and benefitted from a global economy and exports to enlarge the middle class and improve conditions of the working class and poor. This has made a social program type economy financed almost entirely through oil exports less relevant and likely to fall behind in today's world. Venezuelans now want to connect back with the global economy and things to return to normal as in the neighboring countries. A lot is changing in Latin America including the demographics with fewer children, access to education and social benefits and the benefits of technology, and no country can remain isolated for long.

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The author Li Congjun, is head of the Xinhua News agency, official press agency of the People's Republic of China. He calls for rebalancing the global economy with China depending more on domestic consumption, efforts to restrain the excesses of property and asset price bubbles, and renewed focus on technology and investment.

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The young people in Venezuela increasingly question continued support for president Chavez. About 7.5 million Venezuelans ages 18-30 make up 40% of the electorate. Chavez has won elections since 1998, and has setup a network of youth support. Yet there is now voter fatigue after Chavez's 14 years in power, and this election is being vigorously contested by opposition leader, Henrique Capriles. Voters are increasingly looking for an alternative, and an economy that creates jobs and new opportunities beyond the social welfare state supported by oil earnings offered by Chavez, especially the 42% of the working population in the informal sector. One voter puts it succintly saying what Chavez has to give has already been given, and Venezuela's future lies in a different direction. A new direction would better integrate Venezuela with the global economy bringing in new technology and foreign investment. In addition it would include efforts to enlarge the middle class and improve conditions for the working class, as Brazil has done....

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Friedman says Putin acted emotionally by letting impulsive reaction to the anti-Russian feelings in western Ukraine determine Russian policy following the collapse of the Yakunovych government. The months long Russian response in Crimea and eastern Ukraine may have secured Russian pride at a large cost. This includes the damage to the relationship with Germany, seting the EU on a path to look for other sources of energy to reduce dependence on Russian gas, a natural gas deal with China in which the price was kept "a secret" and may have provided China with a bargaining edge considering the timing of the negotiations. The most severe impact is in the loss of confidence within Russia, reminding the Putin administration that though the economy has grown in the Putin years it is still fragile and connected to the global economy. The capital outflows of the magnitude of $160 billion at a time of high inflation and sharply slowing growth actually put at risk the gains Putin and Russia made in the last decade, and risk the future agenda to improve the standard of living of the Russian people eyond the major cities. Putin's own assessment would eventually be closer to that of Alexei Kudrin. Kudrin, finance minister in Putin's previous term, correctly saw the dangers of impulsive policy concentrated in one figure, and the suppression of other voices including the opposition needed for Russia to be governed in a manner similiar to western Europe, to attain a similiar level of economic progress and standards of living. In today's global economy even the U.S., France, UK and states inside Germany need foreign investment for jobs, new ideas and technology, and the opinion expressed on media television and internet shapes investor sentiment to a larger degree than fully understood....

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Scott Bessent on restoring the mission of the IMF "brutally calling out imbalances" including China's surplus economy and unfair trading practices instead of "whistling by the graveyard"- in his address to the IMF, Feb 15, 2025. Bessent says the IMF and World Bank had mission creep and lost track of financial stability and were not asking the hard questions about China's focus on exports at the expense of the manufacturing capacity and jobs of America and Europe.  Hee are his remarks meant to show that Bessent is taking an all of the above approach on energy, knows climate change is real but cals for flexible approach, an approach he wants the World Bank to take. And for the IMF to focus on key issues that have led to deindustrialization of US and Europe essential for financial stability before getting into social and cultural issues that are not its mandate for which it is ill equipped to address. Bessent told the IMF and World Bank - "Instead, the IMF has suffered from mission creep. The IMF was once unwavering in its mission of promoting global monetary cooperation and financial stability. Now it devotes disproportionate time and resources to work on climate change, gender, and social issues.   These issues are not the IMF’s mission. And the IMF’s focus in these areas is crowding out its work on critical macroeconomic issues. The IMF must be a brutal truth-teller, and not just to some members. Instead, today’s IMF has been whistling past the graveyard. Its 2024 External Sector Report was entitled “Imbalances Receding.”  This pollyannish outlook is symptomatic of an institution more dedicated to preserving the status quo than asking the hard questions."  Some of these hard questions are about surplus countries- about China and their focus on exporting their way till they destroy the manufacturing sector of the rest of the world. ...

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With Hong Kong affected by the protests, then the crackdown by China, the pandemic, large companies that used it as a base for operations in China are now shifting to Singapore,Shanghai and other locations. Except for finance, retail and other industries are moving out of Hong Kong. Shanghai is seen as more connected to the Chinese economy. And for others Hong Kong is no longer as global now with its integration into China.

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After overly aggressive bank lending following the financial crisis of 2008 China is now badly overextended. China has also learned from the U.S. experience about the risks inherent in growth generated from a credit boom. In 2009-2010 China was also getting less bang for the buck in terms of the increase in lending needed to generate growth compared to earlier periods. Orlik says don't expect China to help the global economy the way it did in 2009-2011, and that there is no Plan B for China.

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India's central bank chief, Rajan, favors a lower inflation target of 4%, with fluctuations of 2% up or down. Lower inflation is critical for India to achieve higher growth rates. The World Bank lowered the rate of growth in the global economy but kept the rate of growth of 6.4% for India unchanged. Rajan also favors creating a more formal system for setting rates, with a committee like the Open Market Committee in the U.S. deliberating over the different factors for such a decision. Rajan was a professor at the University of Chicago, and chief economist at the IMF, before joining the central bank. Central bank policies have helped stabilize India's currency, the rupee. The lower cost of oil for India with an oil import bill of $100 billion is a big boost for economic growth. For the global economy this comes at a time when China's growth rate is slowing to below 7%.

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A new state government in Bihar state, India, takes shape with Nitish Kumar as Chief Minister and 2 Deputy CM's from the BJP party. Bihar is the second largest state in India after Uttar Pradesh, with Maharashtra the third, West Bengal fourth making up the top four by population each with over 100 million people. Rajasthan, Madhya Pradesh, and Gujarat make up the top 7 states each of these three with about 75 million population. Rapid economic development depends on state governments working with the federal government on investment, technologies and effective governance. Gujarat and Maharashtra form an industrial core for India with investment increasing in Uttar Pradesh and Madhya Pradesh which forms the rural interior in the Ganges plains. In contrast to China where industrial development is state driven led by the CCP in a centralized form embedded in the complete authority of the central government, India has to achieve this through the democratic process based on delivery of infrastructure projects and standards of living. Much of this depends on the combined effort of federal and state governments ,with seven of these eight states having this coordinated effort in 2024, at a time when foreign investment in the economy is increasing rapidly to diversify global supply chains. This provides an opportunity for India to change from a developing economy to an advanced industrial economy in stages by 2030 and 2040. ...

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A 35% rise against the dollar of the Brazilian real and a rise of 80% of the Brazilian Bovespa index in 2009, following quickly after the global financial crisis, shows the big swings in emerging markets stock and currency values. Brazil is a big exporter of agricultural and mining commodities. Brazilian government is concerned about short term investors who are piling into investments there, but could pull out quickly in another crisis. The government imposed a 2% tax on foreign investments- designed to reduce currency volatility and discourage short term speculative investors. A slowdown in demand for commodities from China or other countries could quickly reverse this rise. And a rise of this proportion in so short a time, coming on the heels of a financial crisis, shows the nature of swings in the global economy that are of increasig concern today. In October 2008 Brazil's currency lost a third of its value compared to August 2008, and the Bovespa index fell by 50%. The central bank had to use its currency reserves to prevent a severe drop in the value of the real. Short term investors were pulling money out of the stock market resulting in dollar outflows, and many Brazilian companies that had bet against the dollar in currency derivative contracts suffered huge losses. The situation was similiar in Mexico. It shows the fragility of economies depending on commodities exports, and the lack of mechanisms to track these derivatives and to restrain speculative short term investors. ...

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Officials of 130 countries met virtually to agree on a global minimum tax rate. A minimum tax rate of 15% would be paid by corporations in each of the countries in which they operate so that tax avoidance is prevented. The Group of 20 major economies including India and China also agreed to this change in taxation to ensure that all companies pay their fair share of taxes. It is also part of the Biden plan for tax revenue generation to fund the infrastructure and human needs in health, education and public services that were neglected for so long. US president Biden says- "This will level the playing field and also make America more competitive. And it will allow us to devote the additional revenue we raise to make generational investments, which are necessary to keep America's competitive edge razor sharp in today's global economy." This tax change was needed to prevent companies shopping for low tax locations such as Ireland. This kind of locating in low tax rate locations worked badly for the major G-20 economies for decades as it prevented the generation of revenues needed for essential services and infrastructure investments. Tax changes include Biden's plan to increase the corporate tax rate to 28% from 21%, and raise the minimum tax on US based companies foreign profits to 21% from 10.5%.  ...

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The stronger dollar, low inflation, slowing economy in China and slowing global economy, are factors that the U.S. Federal Reserve is considering in its plan to raise interest rates in 2016.

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U.S. companies with international operations or exports are seeing lower profits in 2015 with the surge in the value of the dollar, as it approaches parity with the euro currency in a short period of time. At the same time the dollar has surged to 120 yen to the dollar. The currency shifts are part of a new global dynamic in which the eurozone and Japan increase competitiveness and exports to boost their economies, fend off deflation, and help return the global economy to a sustained growth phase. Aggressive bond buying and QE by the ECB is part of this new dynamic in the global economy.

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At a critical juncture in the global fight against the pandemic eight in ten U.S. counties are in lockdown. About 29% of the U.S. economy is offline on April 5, 2020, according to Moody's Analytics. U.S. daily output has fallen by 29% compared to March 2019. Moody's Analytics predicts a 30% annualized decline in the second quarter GDP as businesses gradually reopen in the summer. Higher unemployment and loss of household wealth are likely to cause demand side drops making the recovery very gradual in this scenario. It all depends on how long this lasts and how effective the fight against the pandemic is including the steps taken to cut the spread of the virus, the action taken for rapid testing and isolating of clusters as happened in South Korea and Taiwan, which remain models for effective action. 

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Mercedes is seeing signifcant sales growth in China. It is Mercedes's third biggest market with sales of 100,000 cars compared to 67,000 in 2009. Daimler CEO Dieter Zetsche says that given no downturn in the world economy Mercedes-Benz cars should reach its target for return on sales of 10% by the second half of 2012. He predicted EBIT of 2.5-3 billion euros for 2010, and plans to boost expenditures for R&D in fuel efficient technology and capital investments in new vehicle models in the second half of 2010. Analyst Warburton at Sanford and Bernstein, writes that Mercedes is likely to pass 7% margins in the first half of 2010, and will get a boost from a weaker euro plus strong sales in China. The only question is, as Dieter Zetsche noted, prospects depend on no downturn in the global economy. China's economy is growing too fast to be sustainable growth and a property bubble is developing, and its not certain how long strong sales in China will last. There are other signs of a slowdown in the global economy. See global economy....

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Profit outlook for global airlines dims with the sluggish global economy and high fuel prices. This is affecting most airlines including Etihad and Emirates airlines in the Middle East. Qantas forecast a 91% drop in pretax profits for the fiscal year ending June 2012 falling to A$50 million.

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Climate policy changes lead to $1.3 trillion savings according to analysis from DJT administration and EPA's Zeldin, with $1.1 trillion in savings from lower vehicle prices which addresses unaffordability of cars. Using the average price of a new basic Toyota Corolla the price in 2020 was $19,000 which has gone up to $23,000 a price increase of 21% by 2025 over a 5 year period. The cost in 2026 of operating a Gas powered vehicle is on average about $2500, for EV car about $1000 with $1500 in savings per year for EV's that need to be figured into the equation at gas prices that prevailed in 2024 of $4-$5 per gallon . At prices of $3 per gallon the gas costs come down to $1200 when driven 12,000 miles at 30 mpg for 400 gallons of gasoline consumed. This makes the difference between gas and EV yearly savings on gasoline costs down to about $200 from $1500. This makes gasoline powered cars attractive as car companies can reduce EV investments and pass on some of these savings in lower car prices in 2027 in exchange for favorable rules on emissions and EV transition dates.  Are there losses through the emissions and climate change? The DJT/Zeldin EPA analysis points to global climate emissions from China and India (the coal powered plants) continuing at a pace that would determine the overall change in climate for 2026-2027. In this kind of approach the goal is to make cars affordable over a 2-3 year period for US and European carmakers who would be expected to cut prices. It is about flexibility in fighting the Cost of Cars a big component in the Cost of living with housing as the next large component. It is not a long term strategy, simply one that offers a flexible approach. Will the US, Europe and Japan fall behind in EV's technology? Hybrids a focus of Japanese cars will continue to advance that technology which is becoming a preference where it is affordable for customers. Toyota for instance will have a wide lead in hybrids technology by 2030. Much of the Chinese market will have EV's and the EV's technology will advance in China in 2026-2027, and tariffs will be needed to protect European and American carmakers for 2026-2028. It is a strategy tradeoff to deal with the cost of living crisis in US, Europe and Japan answering call for a flexible approach that was also heeded by the Biden administration in relaxing carbon emissions rule changes. It will require automakers to step up and cut prices for gasoline models for buyers at the entry and lower range for affordability by 2026-2027. What about climate action? The strategy is based on the idea that climate action requires India and China (coal powered plants) on board to make a real difference so that over 2-3 years to 2027 the US, Europe and Japan need to address affordability for the lower end entry cars. There is an element of denial of climate change in parts of the DJT administration in the US but not in Europe and Japan. It is also true that leading DJT administration officials Secretary Bessent see the problem of climate as real and one that needs to be addressed yet leaving room for flexibility to tackle affordability crisis for ordinary workers with low incomes struggling to make a living. Bessent and others in the DJT administration are calling for using all of the resources to address needs of people struggling to make a living, and for a strategy for the US to get back its manufacturing capacity from China and for rebuilding the US economy after deindustrialization (caused by Clinton's huge US economy shattering failure to provide safeguards for abuse of the trading system by China in signing a poorly drafted agreement for China's entry into WTO at the end of his term in 1999-2000 just when he had fought impeachment.  ...