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David Brooks of the NYT says the Republican party is failing when it embraces Trump's version of populism with its racial division, tax plan that favors Republican donors and ignores fiscal conservative concern over deficits that affect future generations, supporting the election of Moore in Alabama, the constant Twitter comments that show prejudice. He says this will have destructive effects that could last an entire generation. This isn't the Republican party he has known for so long, says Brooks. The time is passed says Brooks when sensible republicans could go along in the middle by not agreeing with Trump, yet avoiding the task of opposing the elements of Trump policies that conflict with America's long held ideals shared by both parties. He calls its a corrupt deal that Republican party leaders in the Senate and Congress have agreed to make with Trump thinking that somehow this will all work out for them even if it doesn't for the party. Selling one's soul is somehow not an option that people would take in their right mid, so he wonders aloud what is happening in the party- and calls it a rot besetting the party of Lincoln, TR and Eisenhower that won't get it to any good place.   ...

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Walker of the WSJ describes how the new issues of immigration and identity are changing the way people vote in European Union countries. In the Dutch election there were other surprises. The Dutch Labor Party which won 25% of the vote in the 2012 elections fared badly and got only 6% of the vote. Much of this vote was picked up by antipopulist parties such as the Greens. Mr. Rutte, the prime minister under the current government, and his party centre right VVD won 21% of the vote. Social Democrats and Labor parties in Netherlands, France and Britain are doing badly, and even Martin Schulz's SPD's higher popularity is said to be reaching a peak and may not last till September, says Walker. Labor Party in Netherlands failed because of its participation as a junior party in a centre right government following austerity policies, say analysts. Overall as shown in Netherlands the tensions and loss of credibility of social democrats is playing out differently in each country. The Netherlands election shows that there is also an anti-populist shift that moves some of the vote from social democrats to parties such as Greens, or other parties or movements that have gained credibility as the social democrats faded.  ...

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This Economist magazine editorial says the Republican plan for health care with its roll back of Medicaid expansion by limiting funding to states after 2020, and by scaling back subsidies especially for older Americans and not basing them on income levels, is likely to have its own problems just as the Affordable Care Act. One concern is that keeping healthy people in the market with a mandate that everyone have insurance is present but in a milder form with premiums going up by 30% in one year if they change their mind. There is concern that this may not work among insurers leading to an increase in premiums, pricing people out of the market in "a death spiral." This could lead to more people being priced out of the market as premiums rise. About 12 million people were added to Medicaid by increasing eligibility level to $16400, or 138% of poverty line- this reduced the uninsured from 16% in 2010 to 8.8% today. The Economist concludes that the Republican health care bill has its own problems, and that this bill does not clear up the problems in Obamacare by substituting Ryancare as the Republican bill is called. Peggy Noonan writing in the WSJ says this may have negative consequences for the new Republican base shift to populist support. Critics on the right like Rand Paul see even the reduced subsidies as an entitlement program, yet the Republicans can only change parts of the Affordable Care Act as they need 60 votes in the Senate where they only have a small majority.   ...

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This editorial in the Economist says Spain's economy has recovered to pre crisis levels by 2018 with growth at 3 percent. It says Spain had a bigger crisis than Italy and took stronger measures under prime minister Rajoy to fix problems in its banking system, address the housing crisis, and unemployment. Italy's steps by comparison were timid and faltering. Mr. Rajoy had his problems including corruption scandals in his party and a poor handling of the Catalan drive for independence. Yet Spain owes muchas gracias to Rajoy for his leadership in bringing Spain out of the housing and economic crisis, and for running the country for two and a half years after losing his majority in parliament.  Another difference with Italy is the generally favorable attitude to immigration for all parties. Of the newer parties Ciudadanos remains at the centre and the Podemos party remains to the left in politics, as part of the populist changes in Spain during the economic crisis. The new government of Pedro Sanchez has a positive attitude to immigrants and to women, with the largest number of women in the cabinet of any European country. ...

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The idea that strongmen and populist politics are the problems of Sri Lanka is misleading. In the recovery of 2023-2024 it is PM Ranil Wickremasinghe with the help of PM Modi's financial loan assistance and arrangement through the IMF that put Sri Lanka back on the road to recovery.  Sri Lanka was called Ceylon during the colonial era. It became a Portuguese colony in 1505, and by 1600 a Dutch colony from which the Dutch extracted spices and cinnamon. In 1802 it was transferred by treaty to the British till independence in 1948. British left 1948 a country with an economy generating surplus from exports of coconuts, cinnamon, rubber and tea which financed a generous welfare state with subsidized rice. Under the British literacy was highest in South Asia. The failures were in race relations over two decades of war 1977-2009 by the attitudes of Sinhalese and Tamil leaders, and lack of a role model in northern India as PM Modi offers today for modernization. The second is the colossal failure of the "cut" politics where governments use their office for a cut in every business transaction which PM Modi has fought against with calls for good honest governance. The governments after 2009 continued these policies and let the central banks funds be depleted in the process leading to the financial crisis, inflation and inability to fund imports. Lessons are being learned and PM Modi is setting the path for all of South Asia for investment in infrastructure and modernization, good governance and Vikshit Bharat- developed India 2047. Sr Lanka is part of this vision for South Asia and Indonesia with 1.7 billion people.   ...

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Fisher and Taub in NYT give a brief history of Venezuelan politics and government since the 1950's to help readers understand today's economic and political crisis under president Maduro. How did a country with huge oil resources end up with depleted cash reserves to the point of creating shortages of basic goods on supermarket shelves, how did inflation reach over 700%, and how did the economy contract by over 10%, by some estimates close to 20%, in 2016? Venezuela's story is a reminder that populist movements do not hold the answer to political or economic problems, as they create corruption of their own as new groups of people try to perpetuate themselves in power, and new economic problems as they try to win favor with their own support base. Also through economic mismanagement worsened by economic changes such as oil prices or some other adverse development in the global economy. Internal divisions means the capacity of the country to respond is weakened. Brazil has shown the problems of corruption with new political groups and the weakening of government finances. Venezuela is the extreme example of how a lot can go wrong over time after the initial response to a new populist group is positive as it was in Venezuela in 1998, even with advantage of rich natural resources. Change that fragments a country and polarizes a country instead of pulling together the country's human talent around a program that all groups agree to support, is a signal of future problems. The rule of law is an essential component not just of democracy, but of economic development and progress of any country. These are the lessons of Venezuela for today. Economic crises in the eighties led to loss of public confidence in the two main political parties which alternated in power since the founding of democracy in 1958. In 1998 a military officer named Chavez won the election on the platform of returning power to the people and reducing corruption. Chavez reforms initially were popular. Popular protests in 2002 led to the military briefly taking power before returning power back to Chavez. This led to Chavez moving further towards consolidating power leading to a polarization of society. The oil company workers who went on strike were fired replaced by Chavez supporters and oil funds were diverted to popular programs. In the process Chavez isolated Venezuela from the world economy, leading to lack of foreign investment, and Venezuela falling behind other countries in Latin America, even though it had large oil resources. To retain control of the streets this report shows Chavez helped organize the colectivos or local supporters organized as vigilante groups, which has led to further polarization. Corruption in the military and with the colectivos has led to power being fragmented between different groups. The oil companies fund reserves were depleted by corruption depriving Venezuela of an essential cushion as oil prices dropped. Chavez died of health problems with Maduro winning the election in April 2013 by 50.6% of the vote. The parliamentary elections led to the opposition parties winning by a landslide in December 2015. The current problems with daily street protests stems from the economic crisis, with inflation as high as 700% and shortages of basic goods, the economy declining by over 10% in 2016. The uncontrolled printing of money has fueled rampant inflation.The efforts by president Maduro to nullify the powers of Congress in an effort to control the country and override Congress, has worsened the discontent with the government.   ...

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Galston focusses attention on the major problem facing democracies in Europe and the U.S.- that of providing decent paying jobs and improved economic prospects for lower and middle income households. He cites the surveys from the Pew Research Report and the U.S Bureau of Labor Statistics showing how middle income households median net income remains stuck at levels of 1997, and lower income households at levels of 1996. The median net worth of American households adjusted for inflation presents an alarming picture of being at $96,000 in 1983 and $98,000 in 2013 for middle income families, and being at the level of $12,000 for lower income families the level of 1975. Most of the new jobs as much as 95% are being created in the low wage service sector and the BLS statistics show the future looking much the same- with huge numbers of low wage jobs, fewer decent manufacturing jobs because of automation and jobs shifts to low cost locations overseas, remaining manufacturing jobs in the U.S shrinking by another 800,000 to 7% of the workforce by 2025. The result is the alarming rise of populist politicians like Trump in the U.S., Le Pen in France , and populist politicians in Hungary and Poland. Cultural liberals in the Democratic Party and the Republican establishment are both threatened by the rise of cultural illiberalism, xenophobia, and nationalism, as economic anxiety increases, and fears of terrorism and immigrants add to this anxiety. Progressive tendencies in the Republican party since the days of Theodore Roosevelt and of professional elites in the Democratic Party could become endangered if no serious effort is made to come up with solutions to the problems these trends present. The disconnect between the concerns of the working and middle class and the professional elites as the gap widens and the social compact in America and Europe breaks apart, means a new mindset will be required in America and Europe to deal with this. ...

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Central Banks and populist governments clash on what is best for long term financial health in the new EU Eastern European countries. Poland, Hungary, Slovakia, face higher deficits and serious diagreement about state finances.

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Seib points out why the current political landscape with the popularity of Trump and Sanders reflects demographic, economc and social changes in America compared to when Geroge H.W. Bush won the election in 1988 and Bill Clinton won in 1992. The Republican party is more populist, with older Americans, more Southern and conservative, making it harder for Jeb Bush or Wall Street backed candidates. The Democratic Party more liberal, more popular on both the east and west coast of the U.S., with younger Americans, diverse demographic groups, making it harder for Hillary Clinton as an establishment candidate. A Journal/NBC poll of Oct. 2015 shows 28% of Republicans describing their views as very conservative, and 26% of Democrats saying they are very liberal. Yet there is another aspect that will show up once the primaries are over. And this is the steady group of somewhat conservative and moderate combined in the Republican Party of 64%, and the steady group of somewhat liberal and moderate in the Democratic Party of 62% in the 2015 Journal/NBC poll. The moderates are up from 26% in the above 1990 poll to 31% in the 2015 poll for the Republican Party, and from 26% to 33% in the Democratic Party. So that one sees about a quarter of people polled in each party pushing for fringe views and a countervailing trend for moderate or close to moderate views with about two thirds support in the 2015 Journal/NBC poll for each party....

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The moves by the Obama administration and the national feeling and mood, its views as taken in poll of 998 adults by CBS News/New York Times. On taxing those above $250,000 income levels at higher rates- 74% of respondents support it. On populist sentiment - 71% say Obama cares more about ordinary Americans than for large corporations. On the vast expansion of spending and programs 48% prefer smaller government and fewer services and 41% favor bigger government and more services. On spending to stimulate the economy at the risk of higher deficits- 45% support this. On the budget proposal- 56% support it, but 79% of Democrats like the priorities, only 27% of Republicans like them On helping banks recover- 29% supported this in Feb, 47% support this now. In the freedom to use his own judgement at a time when Republicans have rejected almost everything he does- by three to one people say they trust Obama to make better decisions about the economy than Congressional Republicans. This includes one quarter of Republicans, which is significant in giving President Obama the room to use his judgement of what is best and take aggressive action where necessary. This aggressive action may be necessary if taking over some failed or insolvent banks is considered to be the best option, and President Obama's advisors like Mr Axelrod must be taking notes from this poll by CBS News/New York Times. On security, on safety- by tqo to one people say they trust Obama to keep the nation safe. ...

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Germany holds the presidency of the G-20 in 2017. This provides chancellor Merkel an opportunity to provide German leadership on many issues. The ministerial conferences will lead to the summit in Hamburg in July 2017. Concern about the incoming Trump administration views on trade in international circles gives Germany and China a larger role in the meetings for 2017. Germany plans to put more focus on the real causes of migration and flight from poor countries and war zones.

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Donald Trump's remarks at a Wilmington rally that caused a storm- "Hillary wants to abolish, essentially abolish the Second Amendment. By the way, and if she gets to pick her judges, nothing you can do folks. But the Second Amendment people, maybe there is, I don't know." The second Amendment in the U.S. Constitution gives people the right to bear arms. Some newspapers saw it as threat, especially considering the heated rhetoric in Trump's other remarks in his campaigning. Speaker Paul Ryan called it a joke gone bad, and that the Second Amendment should not be talked about in this way.

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Sheila Bair releases her new book in Sept 2012 on the financial crisis of 2008-2009 and the efforts to introduce financial reforms for a safer financial system: "Bull By the Horns: Fighting to Save Main Street from Wall Street and Wall Street from Itself." She is particularly critical of U.S. Treasury Secretary, and former head of the New York Federal Reserve, Timothy Geithner, as protecting the interests of Citigroup and Wall Street in his position as Treasury Secretary of the U.S. government. She describes in detail the situations in which Geithner tried to water down essential reforms to the financial system to make it safer, including the Volcker Rule. Of particular concern is the revolving door by which banking regulators or government officials join banks after service in the government which leads to weakening of regulatory and government oversight and systemic risks as in 2008-2009. Sheila Bair is widely respected for her efforts during the financial crisis from 2008 to 2011, when she headed the Federal Deposit Insurance Corporation, the FDIC. Her active involvement in defending reforms and setting up the system by which financially failing banks could be taken over and unwound without risks to the U.S. financial system are lasting contributions. She also succeeded as a manager by setting up an experienced and effective successor in Martin Gruenberg as head of the FDIC, to continue this work. A former Congresswoman, she describes herself as a Republican populist from Kansas. Her current role is as senior advisor to the Pew Charitable Trusts, which itself is a rare phenomenon today for a senior government official leaving government....

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Ruth Marcus looks at the assumptions behind Romney's tax plan and questions whether simplifying the tax system with lower rates would help create the climate for higher economic growth and lower unemployment. Much of the differences between Republicans and Democrats revolve around this assumption, a core belief on one side and skepticism on the other. An effort to obtain a bipartisan assessment was made with the Simpson-Bowles commission recommendations, which advised closing loopholes and reducing deductions. The work done by Martin Feldstein on the Romney Tax plan builds on this approach of limiting deductions, and reducing taxes across the board. An issue for Democrats is inequality. Lower wages to improve competitiveness in manufacturing industry is a trend in Republican and Democratic administrations, because of the effort to improve U.S. competitiveness against other trading nations and has played a large part in lowering incomes in manufacturing oriented midwest and eastern states. The other cause of increasing inequality is the housing crisis and the effects on the economy through foreclosures and unemployment. The housing crisis developed under a Republican administration, and the lack of effective measures to prevent foreclosures under the last 4 years of a Democratic administration worsened the economic condition of the middle class, and especially so for minorities. During the housing and foreclosure crisis the proposals put forward by Republicans Martin Feldstein, a Harvard economist, and Sheila Bair, head of the FDIC who calls herself a "populist from Kansas," for bold government help to homeowners under water would have helped the middle class financially, and especially minorities, far more than the efforts of the Democratic Obama administration, and under Feldstein's plan even turned aound the housing market and boosted a recovery. Trends in world trade and industry have large effects outside what administrations of either party can control, and a lot depends on the temperament, wisdom and leadership provided....

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Frederick Harris of Columbia University says there is a price to be paid for a black president and it may just be too much for the average black person. There is a difference betwen symbols and substance, betwen a role model and accountability in a representative democracy, which is sadly lacking when the black elites, clergy and politicians fail to debate the issues about the problems facing the black community. Problems related to the increasing poverty among black Americans, and the 14% unemployment for black people. There is he says a strange reticience among the black elite to hold the president accountable on these issues just as they would have done for any Democratic president, even one who was as popular with blacks as Mr. Clinton. He says the experience with Obama is not even remotely comparable to the transformative nature of the work of Rev. Martin Luther King in the black community. It may stem from Obama's multiracial background, growing up in many countries, his elite education and being part of a liberal elite more than of the black community. The price is too high in economic and social terms for the poor or average black person and it has created a divide between the average black person and the black elite, with different concerns and different priorities. Harris points out that poor and poverty are words not mentioned often by Obama. Related to this is the foreclosure crisis in which ordinary black people were hardest hit with no effective help from the president to homeowners badly needing relief. Sheila Bair of the FDIC and Martin Feldstein advocated aggressive help for homeowners under water which did not come from the president. Showing not just the limits of a black presidency, but false hopes, inexperience and lack of leadership in issues that mattered to all Americans in the housing and foreclosure crisis. A populist from Kansas, as Sheila Bair describes herself, had the right instincts and courage of convictions which the president lacked and the entire country needed....

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German views on Trump's economic policies are described by DW.com's Jeffrey Michels. German business sees a Trump presidency increasing the uncertainty affecting the global economy, a kind of second hit after the hit from Brexit. There is concern about the $114 billion euros in exports made by Germany to the U.S., because of Trump's increasingly protectionist policies. Trump could move to the centre, but so far these populist policies have helped Trump win in the primaries, and this is unlikely to change in the election campaign,  says DW.com.  Trump opposes the TTIP trade agreement with European Union, and because of opposition in Germany, these negotiations are likely to flounder. Even under a Clinton presidency there is little support for more trade agreements, and economist Krugman points out that most of the gains from free trade have already been made. 

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De Aenile describes the volatility in stock markets after the Brexit vote. Earnings growth is slow and expectations are declining. Indexes of emerging markets are trading at 10 times earnings, say experts. The S&P 500 ended the quarter at 19 times earnings, compared to historical average of 15, according to this report. Uncertainty remains high in Europe and the U.S., and monetary policy is stuck in a low interest rate environment.

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Privileged minorities ethnic or white among large native populations. Amy Chua argues that free markets that empower the white minority giving it special privileged status, and democracy that empowers the native peoples, leads to conflict and exacerbates tensions. She talks about the Venezuelan experience with Chavez. Before Chavez Venezuela had free markets and elections in which two parties alternately controlled the government. Even before Reagan era and post Reagan era promotion of free markets and democracy this existed. However people were fed up with corruption and the native peoples did not see their lives improve. They tried a populist politician in Chavez who redistributes petroleum wealth to the poorer classes. Some of this tension is inevitable, but if all sides use good sense and understanding, and manage this tension constructively there still exists a better situation than there was before- when looking at overall public welfare and considering the welfare of the people and the educated professional classes. When there is a failure to work together it shows the shortsightedness of both sides, the poor understanding and lack of joint effort for mutual benefits, and not the shortsightedness of free markets and democracy. And one is not talking of free markets as American type, but free markets as crafted for each individual country based on its own history, culture, time and place, as free markets are not the same in America, Britain, Germany, France, Japan and South Korea, China and India in the post war period. China is not even a democracy and has practiced one of the wildest kind of free market economy based on its own unique situation, calculated consensus to use exports, foreign investment, and domestic investment in infrastructure as engines of development- its own peculiar use of free market ideas for its own situation. If it works, for as long as it works its good. Now as the situation changes with loss of export markets expected in 2009, China is changing to another kind of use of free market ideas tailored to its idea of free markets for development of the Chinese economy and distribution of benefits to urban and rural areas. ...

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A NYT report on Donald Trump's long standing relationship with his lawyer Roy Cohn,  who was also an advisor to Senator Joseph McCarthy. The report says Roy Cohn used aggressive legal tactics in lawsuits and influenced Trump's style of doing business in his real estate dealings. It is a detailed report of Roy Cohn's influence on Trump, which the reporters say has influenced the way  Trump ran his 2016 election campaign. It shows Cohn as protecting Trump in lawsuits, and Cohn's sense that Trump would someday play a big role in New York's real estate business, as Cohn's first meeting with Trump started when Trump was beginning his career in the early 70's. 

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German leadership in the eurozone and the EU- with the strong stand for eurozone countries to do their economic homework and restore fiscal balance, and the action taken to bring the EU countries together on Russian intervention in Ukraine- is leading to questions about the dominant role played by Germany. Chancellor Merkel has played a leadership role partly because of the absence of other leaders with strong support in their home base who could provide such leadership. Merkel's poll rating in Germany actually shot up during the eurozone crisis from 40% in 2010 to 70% in 2013, and steady at 67% in June 2015, as German taxpayers and voters see Merkel as preventing debt ridden countries in the eurozone passing on higher costs in the debt crisis to Germany. With German wages kept low for the last decade to ensure a economic recovery and lower unemployment, Germans see no reason to support other eurozone countries when a low wage sector exists inside Germany, except under conditions that ensure fiscal balance. In a Harris poll taken in France June 30-July 1, 2015, Chancellor Merkel is rated higher at 43% expressing approval compared to 36% saying they approve of French premier Hollande's handling of the Greece and eurozone crisis. Over 50% of people in Spain and in France disapprove of Merkel's handling of the eurozone crisis, yet two thirds of France's main centre right party support Merkel's handling of the eurozone crisis. In the Harris poll when asked how Merkel, IMF, Hollande and Tsipras handled the Greece crisis people polled in France gave 43% approval to the IMF and Merkel compared to 36% for Hollande and Tsipras of Greece, and 60% disapprove of Hollande and Tsipras handling of the crisis compared to 53% disapproval for the IMF and Merkel. The Christian Democrats party in Germany has dominant leaders in its tradition starting with Konrad Adenauer in the early postwar years, through the Kohl years during reunification and Merkel in the eurozone crisis. By contrast the Social Democrats from the period under Wily Brandt, through the Schmidt years and Schroeder have operated under more of a consensus leadership. Under Sigmar Gabriel or some other Social Democratic leader Germany is likely to have a different style of leadership in the future, especially because the German public does not favor Germany playing this kind of dominant role. At different points in the eurozone crisis Merkel's leadership was needed for decisionmaking- making banks take a 50% writedown on their loans in negotiation with Charles Dallara in Brussels, calling for Italy's president to bring in a new government (led by Mario Monti) when premier Berlusconi failed to make needed changes, and providing flexibility for spending rules for Spain, Italy and France. Merkel has actually moved to the centre to maintain popular support inside Germany, especially since the new coalition government was formed with Social Democrat leader Sigmar Gabriel. On the other major issue of immigration Merkel has provided decisive leadership to prevent the rise of anti-immigrant parties in Germany. Herfried Munkler, author of "Power in the Middle," about why Germany is playing this role may provide clues to Germany's role- by representing different aspects of German public opinion Merkel has prevented the rise of right wing populist or nationalist parties in Germany, which would distort the German narrative about what it sees as its role in keeping Europe together after three wars. ...