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Bond investors are looking to Japan for clues after the U.S. credit downgrade and two years of zero interest rates. William O'Donnell, chief Treasurys strategist at RBS Securities sees similiarities with what happened in Japan- short term rates near zero and long term rates headed down. strategists see the U.S. 10 year Treasury note dropping to less than 2%, from 2.23% today. Japan's 10 year Treasury note yields 1.05%. O'Donnell's forecast is for 10 year rates to be at 1.70% by mid-2012.

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A 15% minimum corporate tax on large, profitable corporations is part of the global minimum corporate tax proposed by US central bank chairwoman Janet Yellen, and the tax proposed by US president Biden. The tax would not apply to companies making $100 million as earlier proposed. The threshold has been raised to $2 billion and affects the companies that have avoided taxes the most. This report says there are 45 such companies in the US.  A US Treasury report on the tax says "the 15% minimum tax is a targeted approach to ensure that the most aggressive tax avoiders are forced to pay meaningful tax liabilities." The Biden agenda on corporate taxes would raise more than $2 trillion over 15 years to pay for essential infrastructure renovation to replace decaying infrastructure in the US. This means roads, bridges, airports, ports, transit systems, electricity grid, broadband systems, school systems, health systems, would all be targets for investment for the first time in 50 years in a concerted drive. The tax drive would partly reverse the Republican Congress's 2017 reduction in corporate tax rate to 21% from 35%, boosting it to 28%. European Union countries such as Britain are also following similar policies after decades in which a race to the bottom led to the lack of funds to finance essential infrastructure rebuilding. As a result China which was a nation of bicycles back in the 1980's now has some of the newest infrastructure, while the US and the EU countries have what might be considered crumbling infrastructure badly in need for renovation. As the shift in mood to a competitive world not only in technologies but in infrastructure and ease of living happens there is more and more awareness of what has been lost in the last 40 years.  ...

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Ghannouchi of Tunisia's Ennahada Party puts forward ideas for a pathway that Islamists could follow to integrate into the political life of Middle Eastern countries- compromise, working together with non-Islamist parties for the common good, focussing on economic development, pursuing moderate Islamist ideas, bringing in those excluded from the political process thorough a new inclusiveness, and respecting the opposition. He sees the successful election in Tunisia in which Ennahada worked with the opposition parties to ensure a smooth transition, as a model for other countries and the Arab neighborhood. In 2014 another process of smooth transition after elections, and respect for the opposition, happened in Indonesia with the election of Jakarta governor Widodo to be the new president. This set another model of respect for democracy, fair elections, respect for the opposition, focus on economic development and inclusiveness, for Muslim countries in another part of the world. Pakistan is another Muslim country which is working to create a model in the presence of much violence from Pakistan Taliban, and interventions by the military in politics. Assistance from the U.S. helped Iraq make the transition under the Bush administration till it unraveled with the policies of the Obama administration. Libya had the potential to make the transition with continued western cooperation and support- a change in administrations in the U.S. and France resulted in policies not supportive of a stable transition. The whole process now needs to be fostered carefully by western liberal democracies. Here Ennahada's Ghannouchi tells the world about the lessons learned by Islamist parties themselves for pathways to embrace for more inclusive societies focussed on economic development and progress....

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Former U.S. president Bush says the U.S. has an important role as a beacon of freedom, human rights and democracy in the world. The U.S. should not shrink from the challenges in the name of a false and temporary stability, and flexibility should not mean ambiguity, difficulties should not mean shrugging away from America's role. Patience, creativity and active American leadership are needed. The Bush administration supported the struggles of people in central Europe and in other countries. This is from a speech Bush gave at the Bush Institute, Southern Methodist University in Dallas, a year into the Arab Spring. A speech that was giving voice to the aspirations of people in the Arab world.

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The Labor Department reports that there is no U.S. productivity growth in the 4th quarter of 2014 over the prior year. U.S. productivity growth is about 1.3% for the period since 2009, showing a weak expansion. Job gains of 295,000 in February 2015 show an improving jobs picture, yet wage gains are tepid. This is partly due to slack in the labor market not reflected in the official unemployment rate of 5.5% for Feb. 2015, with a large number of part time workers who do not have full time work. The low productivity growth is another reason for low wage gains in this economic recovery. Economic growth is also weak with economists estimating GDP growth for the 1st quarter 2015 at 1.5% annualized. GDP growth is in the 2-2.5% growth range since 2009. Hourly wages are up less than 2% since 2009, with hourly wage growth in Feb. 2015 at 2% over the prior year. Weak business investment is part of the reason for the sluggish economic growth. Macroeconomic Advisors estimates the capital investment for equipment software and buildings is seeing growth of only 0.3% in the last decade, much lower than in the last forty years. With most of the gains from the internet technology advances already made there is less prospect of a sudden increase in productivity....

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In the last 3 years foreign exchange reserves from Iraqi oil revenues have tripled to $22 billion, and there are an additional $8 billon in bank accounts in New York from unused funds from oil exports. Yet Americans are shouldering most of the burden for reconstruction of Iraq with $47 billion spent so far and both Senators Warner and Levin are raising questions about why Iraqi oil revenue cannot bear some of thses costs. These questions will grow louder as the US faces its own economic crisis from financial markets in turmoil. Meantime only 22% of Iraq's $6 billion capital budget for infrastructure expenditures has been spent so far. The infrastructure budget itself seems to be very small. After the war and years of decline under economic sanctions of the previous regime one would expect the needs to be huge, yet only $2 billion spent so far is very strange. Even the account here of bureaucratic bungling and loads of signatures required to prevent corruption, and the lack of a computerized banking system requiring the physical handling and moving of truckloads of cash seem strange considering the extraordinary amount of investment and huma effort the US has put into this war and reconstruction. Even this article fails to account for this bizarre situation of dire needs for infrastructure and for basic services of sewage, health and basic food supplies and housing going unmet while oil revenues and US funds go unused. Has this something to do with the militias, lack of security, insurgent fighting, and ethnic cleansing, and lack of agreement and decision power in the administration, that has created a bizarre situation in which nothing much happens. The oil revenues also complicate matters in that in any defacto partition and separate administrations of Sunni and Shiite areas and Kurdish areas the oil revenues need to be fairly divided so that it supports neigborly coexistence of the communities. This delays creation of separate administrations and accountability which could lead to dramatic improvement in services and rebuilding as accountability is missing today with every bureaucrat and politicain waiting to see what happens and what the future will look like....

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Greg Ip of the WSJ cautions about thinking that the GDP growth of 3% is likely to be achieved with the Trump plan for a corporate tax rate of 15%. He says evidence from Britain and Canada- Britain reducing the tax rate from 30% in 2007 to 19% today, and Canada from 28% in 2000 to 21% in 2004- is disappointing. In Britain the increase in GDP averaged about 0.1% a year. Business investment increases with cut in corporate taxes, and the U.S. corporate tax rate is higher than other advanced countries such as Germany, yet GDP growth includes other factors, such as the business cycle, demographics, productivity growth, aging, technology, regulation, says Ip. It is better if the tax cuts are spread broadly over the population, and tax cuts are offset to a greater extent by savings in other areas, and that tax cuts promote productivity boosting investment, to create enough of a surge in growth above 2%.

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The comparison of the British economy and the American economy with Japan, where debt constantly eats away at the economy, a long period of stagnation, is one possible outcome, says Buttonwood in the Economist. Central banks in both countries are allowing the banks to earn more money to replenish their capital, by letting them borrow short term at very low rates and invest the proceeds in higher yielding longer dated government bonds. Its acozy relationship where the banks are rescued by the government and they in turn finance the government by buying government bonds, but in the long run this means diverting lending from productive private sector projects and productive investment.

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The last days of the Gaddafi regime as a final assault begins in Tripoli, Libya on August 22, 2011.

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Baby boomers born in 1955 had 2 more years of schooling than their parents by age 30. By contrast baby boomers born in 1980 had 8 months more schooling than their parents by age 30. This is the shown in a study by Harvard professors Goldin and Katz. A big part of the problem is the high dropout rates at some high schools in the U.S. Another part of the problem which is growing today is the high cost of tution discouraging students from going to college, and the large student debt being borne by parents. Student debt reached $1 trillion in the U.S. by 2012.

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Antonis Samaras visits Bavaria and meets with Christian Social Union leader Horst Seehofer, who offers his support to Greece's recovery efforts and plans a return visit to Greece. After the meeting, Seehofer said "today, we've turned over a new leaf," and Samaras said "I've received a lot of appreciation for our efforts."

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Russia experts Robert Nurick of the Atlantic Council, and Graham Allison of the Belfer Center of International Affairs at Harvard, see a sea change in attitudes to Russia following the interventionist policies of president Putin. The Obama administration will now focus on limiting Russian influence for the remaining two years of Obama's second term. There is a loss of faith in Putin on the part of Obama and close advisors. Russia is seen as a regional power, and the Ukraine crisis is seen as having a serious impact on the Russian economy through decline in trade, foreign investment and capital outflows. Russia is a regional power because it is not the same as the old Soviet Union, it is much smaller, with a declining population, and dependent on oil revenues, and in this sense not the Russia U,S, president Truman and Kennan faced during the Cold War. Obama advisors see Putin's actions as counterproductive for Russia, as the economy is now seen as contracting in 2014, making its actions in Syria, and in Ukraine, unwise foreign policy moves that hurts Russia's economy and future prosperity. Democratically elected leaders in Turkey and Russia with control over the media and shutting down the opposition using control of the judicial process, have shortchanged democratic ideals, and in the process concentrated powers in one leader. This creates risks of arbitrary exercize of power without the checks and balances that are built into a truly functioning democracy, with foreign policy errors eventually leading to a resolution of the conflicts created as these policies are increasingly called into question. Putin and Erdogan were reelected because of economic growth- a contractionary economy or steep declines in growth put everything at risk. A footnote on Kennan, American diplomat and linguist, is appropriate. A quick reading of Wikipedia's excellent account of Kennan will show that Kennan was in favor of a nuanced approach to Russia based on changing conditions. He observed that policies that were seen as anti-Russian actually helped Russian leaders throughout history solidify autocratic type rule, which actually hurts Russia's normal evolution and development. Normal development and evolution similiar to ways Germany and other nations left behind Prussian history and traditions for a open, free society, and in the ways even the U.S. left behind older practices such as slavery in the south and limited representation democracy. In fairness to Kennan it should be said that containment of the Cold War was more a Truman-Acheson doctrine- continued under Eisenhower by Dulles-Nitze, and under Kennedy by Rusk-McNamara- which has roots in Soviet intentions of destabilizing war ravaged western Europe starting with Greece, following similiar efforts in Eastern Europe. Truman was right in aiding Greece, but the U.S. needed to be aware of changing conditions and not take a rigid stance, and get locked into supporting client states just because they were "our guys," a lesson Kennan emphasized throughout his life. Putin and Erdogan use appeals to Russian and Turkish nationalism to improve electoral support and stifle free expression of ideas necessary for growth in any society. This also provides a way to have a discussion with our German friends on engagement and economic relationships, without the rigid outlook of a Wilsonian or Acheson-Dulles kind. ...

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The story of Lara Gass, a law student in Virgina, whose brakes, power steering and power failed causing a fiery crash, because of a faulty ignition switch in a 2006 Saturn Ion. The failure of GM to take the cars with that defective switch off the road till they are repaired is cause for anguish for 21 grieving families that lost a family member.

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Prof. Peterson of Harvard and Hanushek of the Hoover Institution, authors with Woessmann of the book "Endangering Prosperity: A Global View of the American School," offer some startling reminders about the importance of education to economic growth and incomes in countries. Simply by raising the math standards in the U.S. to the higher standards in Canada would raise GDP by three fourths of one percentage point. One advantage that the U.S. enjoys comes from its good university systems, open markets, rule of law, tax rates, and open immigration policies, which give it about two thirds of a percentage point in higher GDP growth per year. The estimates are from the authors calculations. For the period 1960-2009, a period of rapid growth in Asian countries Korea, Taiwan, Singapore and Hong Kong, higher test scores in math and reading compared to the wrold average as measured by NAEP test and PISA, have led to 2% higher GDP growth. NAEP shows only 32% of U.S. high school students proficient in math compared to 45% in Germany and 49% in Canada and 63% in Singapore. By contrast to Korea and Taiwan, Peru, Argentina, the Philippines and S. Africa have about 2% less in GDP growth because of lower scores compared to the world average....

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The Washington Post is critical of the military's arrangements for the transition to democracy in Egypt. It calls on the Obama administration to make the military in Egypt accountable for a return to democratic government in Egypt, including suspension of aid. The military's role in ousting an elected government which would have been tested in coming legislative elections is seen as a serious mistake.

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Rosa Ines Rivera, a cook at the cafeteria for the Y.H. Chan School of Public Health, Harvard University, with 2 small children, describes the protests over the increase by Harvard administration of the premiums charged on health insurance that now take up over 10% of the income. She says she lives in public housing with her parents as she lost her apartment because she is behind on the rent, and now cannot afford to pay the increase in premiums. About 750 workers at Harvard are on strike on this issue. She says dining hall workers want the current pay of $31,193  a year increased to $35,000 to provide a living wage that helps them afford medical care, because of the high cost of living in Boston.  To get some idea of the plight of workers who provide the kind of nutritious meals that a lot of students depend on for healthy living- Rivera says she takes in about $450 a week after taxes, or about $1800, rent is $1150, which leaves $650 for herself and two children for all food, and expenses in Boston. The $4000 in premiums for health insurance would be about 330 per month, leaving her about $320 for food and living expenses with 2 children. Why the need to bring up children in poverty in America, for generation after generation, after putting in a full day of work? ...

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Bernie Sanders announces his support for Hillary Clinton as nominee of the Democratic Party after a long season of bruising primaries. The effort is now to heal the divisions in the Democratic Party. Hillary Clinton has adopted some parts of the Sanders agenda including some aspects of providing tution free education in public colleges. Both Hillary and Bernie appeared at a joint rally in New Hampshire. Sanders said that at the Democratic Platform Committee ending on July 10, 2016, the two had come together on setting a platform that he believes is the most progressive ever for the Democratic Party.

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According to First American CoreLogic, a real estate information company, 10.7 million households had negative equity in their homes. That is they were under water because they owed more on their mortgages than the properties are worth. The proportion is 23% or one in four homeowners. Mark Fleming CoreLogic's chief economist points out that having negative equity lowers labor mobility and in that way makes it harder to sell the house to look for jobs elsewhere. This is happening in Michigan and other states and is a discouraging sign for improving the job numbers. In this way the poor prospects in housing, banking bad loans in commercial real estate with tight bank lending, and the already high 10.2% umnemployment rate intersect to make 2010 pose significant risks for the economy.