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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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U.S. president Obama says at a rally in Philadelphia that Donald Trump is a fradulent champion of the working class, saying that Trump is simply exploiting the populist mood, that for 70 years he has shown no concern for working class people. Obama told the crowd he understood the public's mood for change and that he himself had benefitted from it. Yet he said that it did not add up. Obama said: "This guy is suddenly going to be your champion? I mean, he spent most of his life trying to stay as far away from working people as he could, and now this guy is going to be the champion of the working people. Huh." "I mean he wasn't going to let you in his golf course. He wasn't going to let you buy in his condo. And now suddenly this guy is going to be your champion." 

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Noam Scheiber of NYT provides this illuminating account of how the changes in employment affected Hispanic Americans since 2004. About 500,000 jobs were created in the U.S. construction industry in 2014. Of this 315,000 jobs went to Hispanics with the highest number in California, Florida, Texas and Illinois, which have large Hispanic population. This has enabled Hispanic employment to reach the pre-recession levels in 2015 before this happens for blacks and whites, according to the Economic Report of the President. The drop in immigrants from Mexico crossing the border as economic conditions deteriorated in the U.S. in 2009-2012, and the stricter enforcement, has resulted in native born Americans benefitting most from the jobs created. Hispanics took the biggest hit following the recession in 2009-2012, with a loss of 700,000 jobs for the 3 million Hispanics employed in construction. During the 2004-2007 construction boom Pew Research shows 1.6 million jobs going to immigrants, of which 800,000 went to native born Hispanics, before the collapse in construction in 2009. This time the recovery is benefitting native born Americans most....

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Reducing inequality and giving labor a larger share of national income to increase consumer demand, allowing more immigration, and targeting a higher inflation rate are unconventional measures necessary to increase growth as monetary policy reaches the limit of its effectiveness at near zero interest rates, says Galston. Growth in U.S. since 2000 is about 1.8% annually on average compared to 3.6% in the postwar years to 2000. Growth since 2000 rarely reaches 3% a year. Robert Gordon has pointed out the factors of a slowdown in mass education, rapidly aging population, rising inequality and increasing public debt as reasons for slower growth in the future. Glaeser and Summers also support this view. There is also the possibility that the secular stagnation idea suggested by Hansen in 1938 after years of low growth, comes at a point when growth is about to pick up pace as happened during and after the war.

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Ezra Klein cites Ed Luce, who writes in the Financial Times, that the real unemployment rate in the U.S. is 11%, when you count people who have no job but have given up looking after months of fruitless searching. These are the long term unemployed and pose risks for the economy and for society. Compared to 2007, the percent of people in the U.S with a job or actively looking for work has dropped from 62.7% to 58.5%. Luce's 11% is arrived at by considering these 62.7%, including millions of workers who have quit looking but would start looking again if the labor market brightens. This is important because U.S. government statistics show unemployment dropping below 9% in November 2009, supposedly an improvemment, when its actually the reverse that is actually happening. The real underemployment is nearly 20%.

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The limited options the US has to get China to appreciate the value of its currency, the yuan. Some of the options depend on getting the IMF or the WTO to prod the Chinese, others depend on a Plaza type Accord.

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Compared to the situation in 2008-2009 during the global financial crisis with the excess supply of labor, China in 2012 faces an excess in demand for labor. In 2009 about 20% of migrant workers were unemployed when the crisis hit, and wages dropped 10% for migrant workers, according to the Chinese Academy of Sciences and Stanford University. The situation three years later is one of tight labor markets and higer wages. A large stimulus in not only not needed today in the way it was in 2008-2009 as a way to maintain social stability, it would reduce the benefits of the anti-inflationary steps taken in 2011-2012, by putting more pressure on wages and prices. Manufacturing sector wages increased by 20.1% in 2011, according to China's statistics bureau. This may be why the Chinese government is taking measured steps to avoid creating more bad loans through indiscriminate lending, and being more selective in accelerating development projects in the pipeline. According to Hong Kong's new Chief Executive Officer China plans to have about 7% growth. This shift in approach would help China refocus on growth strategies recommended in the recent Development Reform Commission and World Bank Report on China....

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Epic Systems of Verona, Wisconsin, is one of the companies engaged in digitizing health records. It has helped develop records for 40 million patients in hospital systems such as Cedars-Sinai Medical Center in Los Angeles, Kaiser Permanente, the Cleveland Clinic, and John Hopkins Medicine in Baltimore and the Weill Cornell Physicians Organization of New York. Epic provides the software, the IT systems, the training and support. Epic is one of the pioneers in this, having been in the business for 30 years. About 40% of primary care doctors in the U.S. and 25% of hospitals use electronic patient records. The Federal government has provided $2.7 billion in funding from $27 billion of Stimulus funds assigned for the purpose of conversion to electronic medical records. This is likely to speed up the conversion. Other providers are Cerner, Allscripts, Meditech, Siemens Healthcare, G.E. Healthcare, and IBM. Epic Systems is considered the defacto standard in the industry for medical schools and some of the major hospital systems in the country. New contracts are leading to a major expansion of Epic Systems which employs 5100 people. Epic plans to hire an additional 1000 people. Revenue for the privately owned company are estimated at $1.2 billion, a 45% increase over the prior year. Epic is expected to have 127 million patients under medical records by mid 2013. To get the feedback essential for such a large conversion, CEO Faulkner relies on feedback from 250,000 doctors who use the Epic systems software, and on nurses and doctors from Epic who visit customer's sites to see first hand how it works and what needs improvement. Judith Faulkner started Epic more than 30 years ago. A project for the Psychiatry department led to other projects after she graduated in computer science from the University of Wisconsin. Epic continues to attract programmers to Wisconsin by making the Epic campus a fun environment and a great place to work. ...

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This editorial in the WSJ points out the dangers to the Republican party in taking the stand on immigraton along the lines suggested by Donald Trump in August 2015- deportation for all illegal immigrants, no birthright citizenship for children of illegal immigrants, and no remittances allowed for illegal immigrants to their home countries. It points out that remittances actually improve the economies of the countries south of the U.S. border in Latin America and reduce illegal immigration. There is a need for seasonal workers in farm areas where there is a severe shortage of workers even at $17 an hour. Reducing immigration is better accomplished by more guest worker programs. A likely result would be the move of farms and factories to regions with low cost labor in Latin America or other countries. For the Republican Party this type of policy would bring back the period of the 1920's, says the WSJ, when Irish and Italian immigration was opposed by the party, alienating the two ethnic groups till they were won back in the Reagan period- a sure way to lose in 2016....

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Fred Hiatt of The Washington Post describes U.S. president Obama's mishandling of Syria during his second term as president leading to the situation today.

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China surpassed Germany as the world's No. 1 exporter in the first 10 months of 2009, with $957 billion in exports compared to Germany's $917 billion, according to customs data compiled by Global Trade Information Services, a Geneva based firm. With the global financial crisis China's exports fell 20.4% in the first 10 months of 2009 compared to 27.4% for Germany and 21% for the USA. Global consumer spending has fallen more than the capital goods and machinery exported by Germany. Yet these numbers suggest that there has been no significant change to the export models of the two countries even after the global economc crisis revealed cracks in the export model.

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Lower amounts for financial aid available offset the lower rise in tution costs to leave students just as worse off as before with large amount of student debt in 2013-2014.

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Experts compare the performance of two states with thriving economies California and Texas, but run by governors who are different, one passionately liberal Democrat and the other passionately conservative Republican. The Texas economy is slowing following the drop in oil prices. The Dallas Fed has lowered the forecast for growth in Texas to 0.5%-1% from the 1.5% rate projection. This compares with a growth rate of 3.4% in 2014. During the economic downturn following the financial crisis of 2008, Texas was lucky to have laws that prevented the kind of housing bubble that happened in California. It also benefitted from high oil prices. California has recovered from the worst effects of the crisis with unemployment dropping from 12% in 2011 to 6.3% in 2015, and half million jobs added in the last 12 months. Many of the jobs are in the higher paying tech sector. Critics point to the weakness in education and lower paying jobs in Texas. Texas has diversified ite economy since the 1980's, with about 13% of the state's GDP from the oil and gas industry in 2015 compared to 19% in the earler period. ...

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The Tax Plan of Jeb Bush, with the help of advisors Martin Feldstein and Kevin Warsh, lowers the top personal tax rate from 40% (including surcharges) to 28%, and reduces the corporate tax rate from 30% to 20%. The plan is designed to jumpstart the economy for higher growth by increasing business investment and incentives. Businesses are allowed to deduct 100% of new investment immediately. The idea is to increase capital investment so that benefits also go to workers in higher wages. The Bush economic advisors see 50% of the corporate tax burden as affecting workers wages- average compensation would go up by $2750 a year by 2020 and $6200 by 2025 in 2015 dollars. Companies can pay a one time 8.75% tax on money earned and held overseas, paid over 10 years- about $2.1 trillion of this income held overseas can be added to the pool available for business investment. As proposed earlier by Feldstein the itemized deductions including mortgage interest can be taken only upto 2% of adjusted gross income, suggestions during the reform effort not taken up by Obama. To reduce the excessive use of leverage in business decisions the field is levelled for use of debt and equity by removing the deduction for business interest expense. This editorial says that by putting in the details, which political leaders tend to leave vague on specific figures, Jeb Bush and his advisors have taken a crucial step forward. This it says, shifts the debate from current shallow posturing to how America can lay the groundwork for the kind of growth needed to help increase wages, increase economic growth to higher levels, and preserve America's position in the world....

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This is an indepth article on Donald Trump's financial holdings, looking at the debt that Trump has built up in his real estate dealings, by Susanne Craig of the NYT. To get a detailed look of this the NYT inquiry into the holdings engaged RedVision Systems, a national property information firm to search publicly available data. Much of Trump's business is shrouded in mystery. But it is well known that Trump has used debt to build his business in a way that is not considered good practice in business, having led to three bankruptcies. Trump says he "is the king of debt." And "he loves debt." The recovery of real estate values during a rescue effort for the country's financial system also helped Trump tackle debt in a way that was not available to other entrepreneurs who suffered from the oil price collapse- one of them McClendon also used debt aggressively and his business collapsed leading to suicidal car crash. You can love excessive debt only if the government supports you with some sort of financial guarnatee misplaced, or you are lucky to get away with it- just ask McClendon. The irony is that the rescue of the financial system led to the low interest rates that hurt savings of the middle and working class, and the lack of help to Main Street in the home foreclosure crisis also hurt the same people disproportionately. The Obama administration policies in this regard rescued the very same business interests such as the New York real commercial estate symbolized by Trump, that are now appealing to those hurt as president Obama worked to let the financial system recover. The intention was never to support excessively overleveraged banks or overleveraged real estate built on debt, but in reality this is what happened. A nation cannot run its financial affairs in this manner of overleveraging to extract high profits that an investment bank such as Lehman or Goldman Sachs does, or a real estate company such as Trump's does- if regulators let them do this. Normally after the financial crisis of such dimensions that it shook the world economy in 2008-2009 leading to fears of a collapse as happened in the 1930's, the same faces would not still be there. But this is a strange period or a transition period where things are being sorted out, and the same faces Blankfein at Goldman Sachs and Trump in New York commercial real estate are with us.  And though the bashing of Goldman Sachs connection to Clinton is evident in the campaigns of Trump and Sanders, the bashing of Trump real estate and finance companies with its overleveraging and bankruptcies is evident in the campaign of Clinton against one posing as a representative of the working class. John Paulson who benefitted by shorting mortgage securities that caused the financial crisis of 2008 is on Trump's top economic advisory team, including the hedge funds and financial interests on Wall Street that Trump is saying support Clinton. No one, not the NYT or WSJ, can answer this, its just the paradox of today's situation. Hillary Clinton can say she has learned her lesson, with her Methodist upbringing and her own supporters such as Robert Reich and others, and break with the past especially as it in no way contributes to her success as president, not one bit. In fact rebuilding the middle class and infrastructure require entirely different connections and views on life, a different imagination.  Trump has billions of dollars and a real estate business that is so complex that even the NYT and property information firms can only say that in the end it is shrouded in mystery. Companies owned by Trump says the NYT from this inquiry have debt of $650 million. Other Trump business activities through 3 passive partnerships owe an additional $2 billion. It is a lot easier for Hillary Clinton to put the speech fees behind her as they have little to do with what she is as a Methodist and a proponent of improving women's lives, than it is for Donald Trump- for whom his business is everything that he is including his art of the deal- to reject who he is. ...

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President Obama's speech announcing the details of his executive order on immigration on Nov. 20, 2014, starts by saying he is not bypassing Congress or the Republicans. He says Republicans had the opportunity to pass legislation in the House that passed the Senate, or come up with their own bill. And still have an opportunity to come up with a bill he could sign into law that address the shortcomings of the current immigration system. In selling the bill to Americans he points out that this is not an amnesty, that the current system which allows immigrants here to stay illegally without paying taxes or any accountability is an amnesty. He points to deportation of millions as not an option, an out of the character of America. That deportation of criminals will continue and is up 80% in his administration, without mentioning that deportation under his administration for ordinary undocumented immigrants without any criminal record had reached a high of 400,000 a year under his administration, higher than under the Republican Bush administration. In fact it had reached such levels that Hispanic groups stated they would sit out the midterm 2014 elections and not vote for Democrats or Republicans, after providing a significant part of the winning margin for Obama in the 2012 presidential election. President Obama says he has the legal authority to prevent deportation, and that this is essentially what this executive order does- providing a temporary right to stay and work in this country to undocumented immigrants here living in the shadows who are here for more than 5 years, not a permanent status or citizenship. He cites other presidential decisions of the last 50 years, Republican and Democratic, that have integrated large groups of undocumented immigrants, including an executive order by President Reagan. And he refers to the Bush presidencies 41 and 43, where both father and son, considered Hispanic Americans "a part of American life," as good hard-working people deserving a chance to be Americans. The speech ends with an appeal to the compassion of Americans urging them to look at their own individual stories going back one, two or several generations, or Ellis Island where the early waves of European immigrants entered the country in the 19th century, and to immigrants from the period after the early British settlements in the 18th century. This is typical Obama, as much as the calculated decision to pursue a aggressive deportation policy was for the first 6 years of his administration, including the decision for "Dreamers" or young people before the 2012 election. "Scripture tells us, we shall not oppress a stranger, for we know the heart of a stranger. we were strangers once, too. And whether our forbears were strangers who crossed the Atlantic, or the Pacific, or the Rio Grande, we are here because this country welcomed them in." Over 2 million deportations in one of the most aggressive deportation policies of any administration, followed by an effort to stop deportations before the next presidential election, when the NYT had called his deportation policy "infuriating." ...

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Honda plans to move more of its manufacturing to the U.S. as the value of the yen drops below 80 to the dollar in 2011. Honda faces problems from parts shortages after floods in Thailand, and U.S. market share down 1.5 percentage points to 9% in 2011. Honda's profit declined by more than 50% for the third quarter of 2011. The yen trading at 77 to the dollar in Dec 2011 is making it impossible for Honda to make a profit from vehicles made in Japan and sold in the U.S. Honda plans to double the capacity of the Civic plant in Greensburg, Indiana, increase capacity at its other assembly plants. It will build a new plant in Celaya, Mexico, in 2014, to manufacture the Fit subcompact. This will raise North American production from 1.29 million vehicles to close to 2 million. About 200,000 to 300,000 of these vehicles will be exported to other international markets. Profits on small subcompacts are small, making manufacture of the Fit more economical in North America than in Japan. In 2011 Honda manufactured between 30-40% of vehicles in Japan, the new plans are to reduce this to 10-20% in the next 10 years, a major shift....

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Matthew Slaughter of the Tuck School, Dartmouth, says that the principle of comparitive advantage should determine what America exports and imports. Under comparitive advantage each country concentrates its energies on the particular goods and services that it does better than other countries. Free trade operates under the idea of comparitive advantage, but in practice it is quite different than its textbook economic counterpart. It is constantly changing as new countries or industries in different countries try to upset the existing pattern. Under a textbook example Airbus should not exist because Boeing was the most efficient manufacturer upto that time, and new entrants in a industry are nurtured for years with support from the governments of their countries. And in some situations the governments may exclude certain companies or industries from support such as Komatsu and construction equipment in postwar Japan, and Infosys and software outsourcing in India, and still survive and grow. Under comparitive advantage Japan should still be importing construction equipment from Caterpillar in the US, and there would be no serious competition in that industry. This would work to the detriment of the principle of competition in free trade which is just as important to free trade as the idea of comparitive advantage, with new entrants in an industry upsetting the old way of doing things and creating price/quality improvements. Slaughter simply pulls back off the shelf the old idea of comparitive advantage without seriously considering its real life aspects. Without dealing with trade distortion from currency manipulation, from the impact on jobs, without considering the continuing critical role of manufacturing in developed economies to provide the standards of living for a large middle class, and creating the kind of society that people of developed countries aspire to. He mentions GE's Immelt and the President's Council on Jobs, but makes no effort to engage Immelt 's statement in his recent op-ed article in the Washington Post, that the concept of transitioning from a export-oriented economic powerhouse to a services led consumption based economy could be done without loss of jobs, prosperity and prestige, was fundamentally wrong. He has only one line for manufacturing's role in America's economy. This line says knowledge intensive industries such as education and software are just as important as manufacturing, but fails to mention that manufacturing has received less attention in recent decades. In so doing he is discounting his own profession of concern for the high rate of joblessness in the U.S., and the need for a new focus on manufacturing in the U.S. to reverse that trend. By saying that imports are not a sign of failure but can raise standards of living, and leaving it at that, Slaughter does not acknowledge that consumer debt that US consumers have taken on in the process certainly affects future prospects for the US economy. And he makes no mention of the need for rebalancing the world economy, which is exactly how free trade should work ideally. Countries that have high imports export more to rebalance the world trading system, as currency valuations are allowed to adjust makig their exports more attractive. By not taking into account the realities of free trade, and the need for practical measures to rebalance without policy induced distortions by state run economies, Slaughter ignores the idea of free trade that works as it should and for all countries. The irony is that Immelt's own committment to jobs and competitiveness has been questioned in online blogs and most recently by an editorial in the Wall Street Journal on January 26, 2011, titled "The Misallocators." That editorial refers to the outsize role of GE Capital in GE's earnings during the past decade, and the lack of credibility of a focus on competitiveness and jobs that this creates for GE. It mentions the loss of 34,000 GE jobs in the US during the last decade. ...

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Education policy reform and serious action expected from the government. Obama has agood grasp of what is needed and what actions to take to improve the quality of education in our schools, and the support from parents.

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This editorial in the New York Times is strongly critical of former president Barack Obama for accepting $400,000 in speaking fees from Wall Street for a single speech. It says the news is causing people to question the ideas and words presented by Obama in his books about the dangers of losing sight of the interests of ordinary people. It gives the impression says the NYT, that Obama is cashing in like everybody else, and that his talk was empty. The editorial says the millions raised by Hillary Clinton led to her defeat in the election. Obama is reported to plan a foundation with the work of training a new generation of political leaders. This NYT editorial says it would be better to stay true to vision and purpose, to walk the talk for president Obama, especially now that a recent poll shows two thirds of voters, including about half of Democrats say that the Democratic Party is out of touch with the interests of the American People. By associating this closely with wealthy donors leading Democrats contributed to this. During a period when some of the remarkable achievements of the last fifty years such as the European Union are being called into question, when ordinary working people, young people and older people are struggling, this is all the more a tone deaf approach by politicians. The idea of helping train a new generation of political leaders through a foundation sounds bizarre in this context, and seems to suggest politicians believe there is always a solution through marketing their audacity and money.   ...