LyrArc Article Gist
Japan's prime minister, Shinzo Abe, is taking carefully planned steps during his second effort as prime minister. Abe is determined to avoid the mistakes of his first effort. This time Abe has focussed on the economy and getting Japan moving again. Nationalist policies are moderated and not allowed to affect trade and economic relations with China. Abe is focussing on winning the upper house elections and creating the stability that eluded other prime ministers.

LyrArc Article Gist
Japanese prime minister Kishida joins president Biden in deciding not to run again with low popularity ratings and cost of living concerns of the public. The LDP administration of prime minister Kishida put through a $100 billion investment package to revive the economy in November 2023. In the first quarter of 2024 the Japanese economy GDP growth suffered from a 0.7% decline. Japanese prime minister Fumio Kishida of the LDP party popularity has remained at around 25% and Kishida has decided not to run again for prime minister. His term expires in 2025. A new LDP leader will be elected. This report says growing voices in the LDP party persuaded Kishida not to run and have a new leader. Inflation which was tame for over a decade has increased with surging prices for oil and gas after the Ukraine war. The situation is similar to the US and EU where rising prices have hurt ordinary people struggling to make a living. Kishida committed Japan to investing 2% of GDP on defense. The effects of economic developments is that the Japanese currency is weakening. ...

LyrArc Article Gist
The Bernanke Fed's decision on Sept. 16, 2013 to continue the pace of bond purchases is seen with relief in emerging markets and taken positively by equity markets worldwide. The Fed's decision is based on evidence of sluggishness in the economy and in the pace of job growth, as well as the likelihood of more political uncertainty about the budget because of sharp differences between Democrats and Republicans.

LyrArc Article Gist
Investors in China fear that the overheated economy and property bubbles, may see a sharp turn with excessive tightening of monetary policy. China rebounded quickly after the 2008 crisis, but did this with a huge stimulus and by encouraging excessive lending levels. Some of this local government lending is suspected to have gone into low quality projects with the danger of bad loans. Inflation was 2.8% in April, and as lending tightens the Shanghai Composite Index has fallen 16% in the last month. The crisis in Europe, the extremely short 2-3 month horizon of mainland Chinese investors, the excessive supply of shares- attempts to raise $74 billion in share issuance in mainland and Hong Kong markets and an IPO of $30 billion for Agricultural Bank of China- all put pressure on stocks. OECD index of leading indicators for March 2010 show a drop from February, and the Chinese economy grew 11.9% in the first quarter 2010.

LyrArc Article Gist
This leader in The Economist reviews an essay in the magazine's October 8-14th, 2016 edition by U.S. president Obama. In it Obama points to the unfinished tasks of his presidency and what comes next as tasks to be done for the U.S. economy. The Economist points out the problems in the 2016 election campaign where there is a lack of discussion of economic issues as a serious problem. Obama lists as priorities efforts to improve conditions of people left out in the recovery, reducing inequality, offering more job opportunities, and increasing productivity.

LyrArc Article Gist
Mortgage and other loans taken out at lower interest rates, before the US central bank the Fed started raising rates  in March 2022, is a big part of US household debt. This fact is helping to soften the impact of the Fed's increase of rates by 5% over 16 months. The increase in rates helps savers and retirees earn more on savings kept in CD's. The cut in inflation from 9% in 2022 to 3% in July 2022 helps increase the purchasing power of money. It also helps keep the US economy stronger than other world economies, with the Biden economic plan of increased business investment underpinning strong economic growth of 2.4% in the second quarter of 2023. Wars are not a distraction or cost burden for the economy, with Biden shutting down 2 wars in the Middle East and South Asia. Lessons were learned and Biden has been resolute about this, also giving a singular focus to his plan for rebuilding and renewing America on multiple fronts, infrastructure, fighting climate change, inflation, business investment, and fair taxation so that the fruits of labor are shared equally by all of America's people. Doing this required a clear vision, resolute purpose, and a path to action for each step. Biden has done that in ways that only a few presidents have done in the past. In doing this he has shown that America stands for hope and a better future, a land as he never fails to repeat, a land of possibilities. ...

LyrArc Article Gist
Former World Bank chief Zoellick says the U.S. should provide leadership with economic and trade policies that revive growth in the global economy.

LyrArc Article Gist
Economic aid from Qatar enables the Morsi government in Egypt to defer agreement for an IMF loan of $4.8 billion which requires Egypt to cut social programs, further aggravating a difficult economic situation for the people of Egypt. It also comes as Egypt's economy has suffered a decline from two years of protest and its foreign exchange reserves have hit new lows. Qatar gave Egypt $3 billion in low interest loans at 3.5%. Earlier Qatar deposited $4 billion at the Egyptian central bank, and gave $1 billion in grant aid.

LyrArc Article Gist
Paul Krugman points out in the NYT that September 2022 high inflation numbers for core inflation excluding energy and food of 6.6% on annualized basis, is still not a good way to measure actual inflation. This is because housing costs as measured by the core inflation index used by the Labor Department are represented by housing rental costs. The rental costs have a time lag in this index and after a sharp spike are now cooling off. Add to this slowing economies and recessions in European economies and the situation suggests that the economy and inflation may be moderating more than expected. Additional factors are that the effects of sharp prior 2 increases in interest rates by the Fed of 0.75% and a third of 0.75% expected soon, are still not fully realized in the economy. This view was also expressed by experts in the WSJ. It was widely perceived that the high inflation that we are seeing is a result of temporary factors such as the war in Ukraine, food and oil supply constraints, supply chain bottlenecks, new adjustments to manufacturing at home after covid. As these factors ease and after the Fed's action to raise interest rates, slowing economies in Europe adjusting to climate change actions,  the moderating effects on the economy of the costs in switching to renewable energy also a factor, this high inflation has prospects of moderating. The successful switch to renewables particularly solar, and better agricultural practices, could set along term trajectory of moderate inflation in costs of energy and food supplies.  ...

LyrArc Article Gist
The NYT says many of India's largest and most profitable companies are "relative models of probity," and several ranking among the world's best governed companies including companies in the software and pharmaceutical sectors. Large parts of the Indian economy have little appetite for the risk taken on by the Adani Group and are run on a financially conservative basis. Infrastructure is unique for this kind of risk taking because of decades of neglect of Indian infrastructure during the 1995-2015 period, when China was rapidly building infrastructure with large investments and India fell behind. It is that catchup mode that induced Adani Group's aggressive efforts taking on debt for outsize goals that it was willing to adopt for coal, solar and port logistics. As a result the Indian economy with companies such as Infosys and Dr. Reddy's Labs says the NYT, is largely not affected by the problems of the Adani group's debt structure.    ...

LyrArc Article Gist
This report by Thomas Erdbrink of the NYT from Tehran, shows the Iranian economy almost at a standstill as sanctions are lifted in Jan. 2016- with little or no growth after years of western economic sanctions. Iranians in Tehran do no expect an immediate improvement in conditions after the lifting of sanctions. The expectation is that it will take years to undo the damage done by sanctions.

LyrArc Article Gist
The US added 167,000 jobs in July 2023 from a month earlier, according to the Labor Department, less than 200,000 anticipated. Higher population numbers and higher labor force participation rates offset the increasing  number of retired people in the US. More people added to the population from immigration and more younger people participating in prime age under 54. This means the US is where it would like to be with the Fed not having to increase rates that much in coming months, says Justin Lahart of WSJ. The Labor Department increased its estimates of population by 867,000, and the labour force participation for prime age is up to 84%. These are good signals for the US economy, that there is room for more jobs growth and income growth with an unemployment rate at 3.5%, and less need for increasing interest rates by the Fed.

LyrArc Article Gist
The Italian government is making changes that would increase competition, provide funds for infrastructure and reduce red tape. Mario Monti, the Ialian prime minister, told a news conference: "Italy's economy has for decades been hindered in its economic and social growth by three big problems: insufficent competition, inadequate infrastructure and too much red tape." There are fears that the $40 billion in tax increases and spending cuts set in December 2011 to cut the deficit would lead to a sharp contraction in the economy. The IMF predicts a 2.2% decline in GDP for 2012, the Bank of Italy's estimate is 1.5%. Changes planned would permit gas stations to choose providers, improve the legal system, add 5,000 pharmacy licenses, and add 500 notaries. Industry minister Passera says the cabinet approved 5.5 billion euros for infrastructure projects.

LyrArc Article Gist
China is increasing export rebates aand investing in vocational training to keep the economy growing . Laid off workers are returning to their farms. THe real impact on growth and industrial production will come in 2009 according to Clement Chen, the chairman of the Federation of Hong Kong Industries. Because China has sustained a high growth rate for so long and the US has not yet felt the full impact of the recession it is possible to underestimate the impact on China's export dependent economy of a deep slump in exports as western markets shrink. The current 9% for the third quarter which does not reflect the credit crisis of October in global markets shows merely the early impact of slowing growth, with serious debt induced dowturn in the western economies China could see its growth drop to 6-7%.

LyrArc Article Gist
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%.

LyrArc Article Gist
Starmer and Yvette Cooper plan action on speeding up 32,000 asylum cases which cost $5.4 billion in 6 months of 2025 for migrants and asylum hotels. Yet speeding up and creating alternative ways to cut asylum cases may not be enough to address the problem which at its root goes to the fact that the British system of justice was not designed to handle people of other countries freely entering the country on boats. Already the Times of London repoirts that there are 111,000 asylum cases up from 7000 in 2022 by June 2025.  A clear warning that Labour's entire program of action on housing, on immigration, on the economy and cost of living, can be derailed by not recognizing the fact that illegal migrants are simply making a travesty of the British system of justice which was not designed for people of other countries freely entering the country. The simple question is can thousands of illegal migrants be placed ahead of the interests of 60 million people of England, Wales and Scotland.  ...

LyrArc Article Gist
On the negative side Japan has public debt that is about twice the size if its $5 trillion economy. In the USA government debt is up to 98% of GDP.On the positive side only 10% of it is owed to foreigners compared to 46% of it for the USA. Japan is also rich in personal savings and assets. Over half of government bonds are held by the public sector and the rest are with long term investors like banks and pension funds and insurance companies. So any sudden sell off of bonds is very unlikely.

LyrArc Article Gist
A confidential report made for the British government is leaked to Buzzfeed News. The report points out that under every plausible scenario the British economy would take a hit from Brexit even it it remains in the single market. In the best possible scenario that it remains in the single market after leaving the EU Britain's GDP would decline by 2% over a 15 year period. In the scenario where Britain made a comprehensive trade deal with the EU, yet remained outside the single market growth would be lower by 5% than current forecasts. Ever sector of the economy is negatively affected except agriculture, according to the report- "EU Exit Analysis- Cross Whitehall Briefing." The current situation is that of a transition period for Britain with the EU  giving Britain 21 months of membership benefits, without the power to form new EU laws. UK economic growth of 1.8% for 2017 is the lowest since 2012, with the decision for Brexit affecting the economy adversely. This even leaves open the possibility of a new referendum on Brexit in coming years. ...

LyrArc Article Gist
Indian finance minister Sitharaman announces Rs. 60 billion ($857 million) in equity for the National Investment and Infrastructure Fund to provide Rs. 1000 billion  ($14.2 billion) debt financing for infrastructure to 2025. This is part of a wide ranging stimulus 3.0 package for creating jobs, providing aid to borrowers during the pandemic, aid to farmers, and aid for the informal economy including street vendors and small retail. With the largest population in the world the Indian Ocean region of India, Bangladesh, Pakistan, Burma, and Indonesia from the former British and Dutch empires, requires a resilient response to the coronavirus pandemic. This is crucial for the future revival of the world economy. 

LyrArc Article Gist
The stark divergence between 2011 and 2013 forecasts for Portugal's economy show the need for better terms on Portugal's EU loans. The 2011 forecasts of EU lenders estimated a much lower level of contraction in the economy and unemployment. In 2011 the lenders estimate was for a economic contraction of a combined 4% in 2011 and 2012 and returning to growth in 2013, with unemployment peaking at 13%. The forecasts in 2013 estimate the economic contraction at 7% for 2011-2013, with unemployment reaching 17.3%. Portuguese government officials say they overestimated tax revenues and underestimated the payouts for social benefits to the unemployed. Prime minister Coelho is criticized for increasing taxes and making spending cuts blindly. He faces angry protestors singing the anthem of Portugal's revolution against the dictatorship in 1974- "Grandola, Vila Morena."

LyrArc Article Gist
The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...

LyrArc Article Gist
This essay in the Economist magazine describes the voter rejection of ruling parties and their candidates in France. Two presidents and two former prime ministers from the Socialist party and the Republican Party, Hollande and Sarkozy, Valls and Fillon face rejection. And another candidate from the Republican party Juppe also has fared poorly. This leaves two outsiders LePen of the National Front, and Macron a former Economy minister in the Hollande government who launched En Marche as his own movement for moderate change alternative in 2016. The rural-urban and less educated-more educated divide which was evident in voting in the U.S. election and the Brexit referendum is now seen in France, says this essay. Research from the Economist shows National Front support highest in outlying areas of major cities. The fears of immigration, terrorism, and globalization leaving parts of the working class behind are factors in this election. Support for the European Union is also a factor as it has suffered in recent years.     ...

LyrArc Article Gist
The US Federal Reserve's interest rate increases are having an effect in cooling inflation in the US. The inflation report for May shows US inflation at 4%, half the inflation at its peak in 2022. The policies of the Biden administration are leading to increased investment in infrastructure and manufacturing in the US. This combined with lower inflation, assistance to the needy for the increases in cost of living, are helping boost the US economy in 2023. This is also setting the foundation for the kind of growth and confidence that the US has not seen since its recovery from World War II in the nineteen fifties and sixties.

LyrArc Article Gist
A Wall Street Journal/NBC poll conducted in September 2010 shows a big change in public opinion in the US towards outsourcing of production and on free trade agreements. Poll respondents were asked "Do you think free-trade agreements have helped or hurt the US?" The response in 1999 was close to 30% for those who said hurt and those saying helped. By 2005 the curves diverged seriously with more people saying that it hurt and fewer saying it helped. In 2010 this swing is sharp with about 50% saying it hurts the US and only about 10% saying it helps. When asked "Do you agree or disagree that outsourcing of production and manufacturing work to foreign countries is a reason the U.S. economy is struggling and more people are not being hired?" the response is overwhelmingly agreeing that this is bad for the U.S. job situation. The answers are the same across party affiliation, in fact higher for Republicans than Democrats 90% to 84%, higher by income level with 93% for those making over $75,000 agreeing and 86% for those making less than 75,000 agreeing, 93% of professionals and managers agree compared to 89% white collar and 83% blue collar agreeing. This shows all segments of society agree that that the manner in which free trade and outsourcing of production is taking place is not helping the U.S., and this time the highly educated segments are leading the way. Bill McInturff, the Republican pollster who helped do the survey points to the big change in the way well educated and upper income people perceive free trade agreements. In 1999 only 24% of this group making over $75,000 said free trade hurt the U.S., now 50% of this group says it hurts the US. This is sure to lead to big changes in U.S. trade and currency issues with China and other countries. ...