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Khalid al-Falih, chairman of Saudi Aramco, says at the World Economic Forum in Davos, on Jan. 26, 2016- "If prices continue to be low, we will be able to withstand it for a long, long time." With $630 billion in foreign currency reserves the Saudis are following a long term policy of full production. Gasoline subsidies are being reduced, IPO of Saudi Aramco being discussed to raise additional capital, and other steps being taken to plan for long term oil prices. Flexibility for a change in policy is diminished with the addition of Iranian oil production to supplies following the lifting of sanctions. The events in 2015-2016 of Russian bombing campaign in Syria, and the cutoff of diplomatic relations with Iran, have worsened the standoff with Iran and Russia in the Middle East conflict. As a result it appears that the Saudis are settling down for a long term policy of full production which would keep oil prices low for the long term. India, Japan, China, the U.S. and the European Union, Turkey and other countries benefit from low oil prices when their economies need a boost in 2016-2017....

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A report from the U.S. Federal Reserve on the impact of the financial crisis of 2008-2009 on the wealth of American households. Between 2007 and 2010 says the report the median net worth of American families went down by 39%, from $126,400 in 2007 to $77,300 in 2010. This had the result of putting Americans back to the level of net worth in 1992. Much of the loss in net worth was from asset value reductions. The median value of stock market based retirement accounts decreased by 7% to $44,000. The biggest drop was in housing values- falling by 42% to $55,000 in the three years. Americans are working down their debt- a quarter of families are debt free, credit card balances declined 16% to $2600 from $3100 from the period 2007 to 2010 of the report. Yet the median level of family debt remains the same as more families support their kids education by taking out college loans. Median income fell about 8% to $45,800 in 2010, with income losses especially large in the manufacturing industries as the U.S. manufacturing sector worked to improve competitiveness. Other factors supplement this picture. The burden of college loans increased to over $1 trillion for middle and working class families. With the burden of college debt young people were more likely to delay buying first homes, indefinitely dealying recovery in the housing market. Seniors on retirement see interest income from savings negligible with low interest rates and higher risk in a volatile stock market. ...

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David Autor, an economist at the Massachusetts Institute of Technology, says he is quite worried about the steadily declining participation of men 16-64 in the labor force from 85% in the decade after World War II to less than 65% today. This is a blow to the men, their families , government revenues and the economy.

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Krugman points out that the federal tax rate for the top 1% is 34% in 2013, according to the Congressional Budget Office, because president Obama let the high end Bush tax cuts to expire. It is the number to remember says Krugman- 34. In 2008 the figure was 28.2. Under Hillary Clinton the average tax rate for the top 1% would go up by 3.4 percentage points, according to the Tax Policy Center. Some of this would help pay for the tution plan to provide access to the middle class to public universities. Under populist Trump, Krugman points to the elimination of the inheritance tax and tax rates going down substantially, and no such programs to promote the upward mobility that everyone is talking about, and no way to pay for a big infrastructure building effort for growth and jobs- upward mobility that is the focus of every candidate's election campaign including Sanders, Trump in appealing to older white working class families, Clinton, Ryan, Bush, and others in both parties.   ...

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Porter of the NYT points out that the figures released from census information that the U.S. median household income increased by 5.2% in 2015 to $56,500 is good news for Americans including minority and working class families at the lower tiers. However more needs to happen compared to previous recoveries in the mid-90's, and for people who suffered during the recession to finally put that experience behind them, says Porter. 

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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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Romney says in the first presidential debate he will not increase taxes on the middle class: "I will not reduce taxes paid by high income Americans. And I will not, under any circumstances, raise taxes on middle-income families. I will lower taxes on middle income families." How he would do this is through limiting or eliminating deductions and loopholes among several measures, with work done on this by his advisor Martin Feldstein, Reagan's economic advisor and a professor at Harvard University- Romney's Tax Plan can raise revenue, WSJ, 8/28/2012. Where the Democrats and Republicans differ is that economic growth generated by creating incentives for business to invest and hire also plays a part in generating the additional revenues as it did under Reagan's economic plan. Behavioural factors play a large part of this as much as the incentives and other steps, to create a climate of business confidence- search in Janvoo for the Group "Reagan memo of 1980 by Shultz, Friedman," for more on this....