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Sperling shows how Biden's economic plan rescued America and set the stage for America becoming the leader in the G7 economies. Gene Sperling is adviser to president Biden, coordinator of the America Rescue Plan, and had 8 years as adviser in 2000 and 2011 after the financial crisis to previous presidents. Here he says the arguments made that the trillion dollars investment spending Biden and a bipartisan group of senators have supported with legislation in Congress were causing inflation have proved not to be true. Inflation caused by bottlenecks in the supply chain, the pandemic shifts, and the Ukraine war, has come down to 3.4% in Dec 2023. By investing in the US economy, in US manufacturing and US jobs, the US under Biden now has the best economy of the 7 advanced economies with higher growth and unemployment below 4% for 24 straight months, lower inflation apples to apples. Sperling says there were 4 lessons learned during his work with the White House. The first to avoid harm to workers whose lives get scarred by loss of jobs. This happened in 1982 and again in 2008 after the financial crisis. Unemployment took 6 years to recover after 2008. And he says the unemployment rate was 15% for younger workers. For the first time economists like Sperling and Treasury Secretary Yellen have grasped what workers feel and have gone through. Sperling cites the devastation to people's lives - the mental health, the divorce, the loss of earnings and depression. The new policy after 2020 resulted in the fastest drop in longterm unemployment ever with black and hispanic unemployment reaching record lows by 2023. A first ever national eviction prevention policy led to 20% less evictions than prepandemic. Second Sperling says 650,000 jobs were lost by state and local governments in the three years after 2008 financial crisis. State and local budget cuts and mass layoffs seriously hit the economy. This time in after 2020 1.2 million jobs were added with the money in the Rescue Plan and lost jobs recovered in one third the time it took in 2008. Third state and local governments need to deal with the harm coming from the downturn and after 2008 the cupboard was empty. Whereas after 2008 only 154 cities and counties got help to tackle commericial blight, effects on communities, foreclosure and long term joblessness in 2020 Biden was able to send direct funding to all 20,000 local governments and 15,000 school districts. This helped tackle learning loss, crime, and address mental health needs. What a difference it made. Lastly one needed to anticipate something unexpected to happen that flattened projections of recovery. In 2011 3.7% growth projected was flattened when Sperling was senior adviser, and this was flattened by Fukushima nuclear disaster, Arab Spring spike in oil prices, and debt default negotiations. This time there was cushion in the plan so that when covid variants and unexpected Ukraine war happened the rescue could withstand and deliver with resilience. Growth was 3.4% average for the first 3 years of Biden's term and unemployment went down from 8% to 4% for 24 months. Coming from someone who had seen mistakes happen and corrected them, who had served three presidents and the last Biden ,this is a story of how Sperling, Yellen, with the help of Powell at the Federal Reserve, and the bipartisan support put together by a US president in Congress , one who has served the country in the Senate more than any other recent Senator and led the nation with courage, patience and determination. ...

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Walk in clinics at drug stores like CVS and stores like Walmart now have the cooperation of hospitals. Hospitals are now affiliated with 25 Walmart clinics. THe Cleveland Clinic has lent its name and backup services to a number of CVS clinics in northeastern Ohio. And the Mayo Clinic is operaing ne Express care clinic at asupermarke in Rochester, Minnesota, and asecond one at ashopping mall. This helps clear emergency rooms of people seeking bsic medical care as for astrep throat or flu. About one thousand clincs are operating in the US at drugstores, supermarkets and big stores since the idea took root 4 years ago. Wal-Mart has partnered with hopitals like the Christus Medical Group in Texas, Aurora Health System in Wisconsin and COxHealth in Missouri to setup clinics. Mayo did so after employees and patients said they wanted more convenient treatment for minor medical problems, so there may be a need here that as not been met. The lower costs at these centers compared to primary care doctors offices or emergency rooms make it possible for them to price lower and meet the needs of the 45 million or so uninsured people in the US, numbers growing as jobless rate increases. They are typically staffed by nurse practitioers or physicians asistants. Dr Herman at Mayo Clinic, who supervises its retail store clinics, says rather than fight this trend primary care doctors should learn from it, and work with hospitals around the country to offer more convenient locations and consumer friendly office hours, including periods of walk-in care with no appointment....

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Hon Kongers have tripled the amount of renminbi they hold to about US$11 billion because of the clear path of yuan appreciation signaled by the government. It has appreciated 7.1% so far this year with the Chinese government controlling the changes in the exchange rate. Forward markets price in another 4.4% gain in the next 12 months. The flood of outside money is why the Chinese reserves have grown by $1.6 billion a day in 2008. At the end of June it stood at $1.81 trillion up 18% from the beginning of the year even though the trade surplus is down 12% from a year earlier and Shanghai's index of domestically owned stocks is down 49% this year. In the first half of 2008 analysts estimate about $50-$200 billion were brought into China even with the tight currency controls. All this new money creates inflationary pressures in China and the central bank knows that it poses risks for the financial system but China is also intesrested in maintaining growth so it may not want to kill this inflow altogether and some of it may go to finance investment in the country....

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Texas law written into the constitution of the state when it was founded in 1845 banned home equity loans. This was a result of a bank panic and foreclosures of that period when many homesteaders lost their land. The change banned lenders from selling mortgages to homesteaders. Till 1998 Texans could not take out home equity loans. New laws restricted the total debt on a home to 80% of its appraised value. This loan to appraised value limit plus the restriction that home equity loans could not be used to pay other debt kept homeowners in Texas from facing a high rate of foreclosures. Fed studies show that in 2005 U.S. homeowners took out $500 billon from their home's appraised value through home equity loans and cash out refinancing. Of this $263 billion went into consumer spending and paying off debts. This Fed study co-authored by Greenspan shows that 80% of the three fold increase in American mortgage debt between 1990 and 2006 came from home equity taken out on rising home values.

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Neil Irwin of NYT provides some counter intuitive ideas on U.S. Fed interest rate policy. He says it can't be take as a given that the Fed will raise rates in 2017-2018. This depends on how much punch there is in the Trump economic policies for stimulus, and for infrastructure spending, tax cuts. He cites Senate Majority Leader McConnell who said he would like to keep "tax reform revenue neutral." Getting large spending and pushing up the deficit is likely to run up against Republicans in Congress who have for 8 years opposed large spending increases and large deficits. Trump has given few details about his stimulus or infrastructure spending plans. He says the scale of the spending might not match the talk. Irwin cites JP Morgan Chase economists who have kept their forecasts for GDP growth just under 2% for 2017 and 2018. And he points out that even Trump appointees at the Fed might act independently. The Fed might look at being cautious considering that increased trade tensions with China, and the unpredictability of a Trump administration could hurt growth. Irwin does not mention the uncertainty in other areas such as policy towards Russia on which the Republican party and Congress have very different views than Trump, tensions over Taiwan, that can also affect growth. ...

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Kraft reaches an agreement to acquire Cadbury at 830 British pence per share in a meeting between Ms. Rosenfeld, Kraft CEO, and Cadbury CEO, Mr. Carr. This is about 50% premium over the price of Cadbury shares in Sept, 2009. Cadbury CEO Carr was opposed to the merger of the two companies and stated he saw "no strategic, operational, managerial or financial reason" for the two companies to merge. Cadbury described the Kraft management as one that had unattractive categories and which "under-delivers." In the end Carr was pushed into the deal because hedge funds had acquired about 30% of Cadbury shares in hopes of making gains, creating the danger that Cadbury could end up with a lower offer. The acrimony is likely to make a merger of the two companies difficult and costly. Kraft coveted Cadbury for its penetration of emerging markets, but lacks the experience and talent in this area of its own to carry out a smooth merger of vastly different companies with different focus.

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Sony has lost its focus, it is in so many lines of business, that its brand identity has been lost. Especially in Japan where it is in cosmetics, massage, mailorder shopping club, insurance, finance, robots etc. It has 1000 subsidiaries and affiliates worldwide, of which a third are unrelated to its core electronics business. How does this hurt? It hurts because management is distracted, and when top management is distracted then its not focussing on customers, changing business trends, creativity in its business pioneering new products. In a big company this problem is just magnified by the bureaucracy that develops. Problems similiar to the ones faced by IBM and General Motors. The analysts and Howard Stringer talk about restoring the Sony premium. What is a premium, its not just the brand, its the innovation or something special behind the brand that enables it to command the premium. Stringer probably understands that its the innovative edge that Sony as lost. See the other piece "Howard Stringer, Sony's Road Warrior" by Siklos and Fackler in the Sunday NYT, May 30, 2006 with Stringer shown in a large picture imagining him as a Sumo wrestler. An unforgettable picture. In that piece it becomes clear that Stringer is keenly aware about Sony's and Japan's weakness in software which is increasingly driving success in products when combined innovatively with new bold concepts. He says there that Sony takes great pride in its hardware, and this is true of Japanese creative spirit in innovative and miniature gadgetry, but its capabilities in software are very modest. As one action step Stringer has hired Tim Schaaf , a senior Apple executive to lead that effort at Sony. The other part, getting the focus back by focussing on customers of electronic products is evident in this piece. Ryoji Chubachi, head of electronics and co-head of Sony with Stringer, regularly visits large retailers to offer incentives for making Sony products more visible, something the prior management failed to do. The prior management failed to focus on customers, and thought it beneath their highflying ways. One of the decisions by Chubachi in TV's is to price HDTV sets close to the price of Panasonic, Samsung and Sharp at large retailers in Japan. This makes sense to gain market leader status, as it shows Sony is living in the real world and taking decisions appropriate and relevant to a premium free environment in television sets. You a manufacturer cannot imagine a premium, a premium is a perception in the minds of customers and most likely reflects a perception of uniqueness, creativity, fashion and some other attribute, which can include engineering. Sony's philosophy has stated in Akio Morita's book "Made in Japan", was to be a pioneer, to walk the untrodden ways, break new ground. One aspect of this in comparison to Matsushita, Sharp and other competitors, was going to be its individuality, something Morita borrowed from his days in the US, because it is typically American and sort of unJapanese in a way. Though this is a generalization and many American companies merely follow and some Japanese companies have their own way of doing things even if it is thought of as being very Japanese like, witness Toyota in its Aichi prefecture surroundings. In this light the surveys show Sony significantly deteriorating in "conspicuous individuality." The New York Times cites a survey from BP Nikkei Consulting in Tokyo that the number of consumers saying that Sony showed "conspicuous individuality dropped to about 25% from about 40% the year before. ...

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People in California did not feel the early blows of the coronavirus like New York. This is now turning into a disadvantage as people in California have now failed to follow the guidelines for social distancing and masks as carefully as they should be. The state reopening  took place as the case numbers were increasing as the economy and unemployment became an issue.  State hospitalizations are up 40% on July 1 from 2 weeks ago. Percentage of tests coming positive are close to 6% but in some counties much higher- in Riverside county has rate positive in tests at 11.7% and bars are only recommended to close. In Los Angeles county it is 8.2%. On June 20 the day after the bars were allowed to open 500,000 people visited bars in Los Angeles County. A big problem is that for lockdown the whole state was asked to lockdown by the governor. For reopening it is done by county and each county is doing this differently. Pressure to reopen has led to counties with increasing and poor metrics for cases still reopening. Some counties felt pressured to open when other counties had reopened. Even when a county such as Riverside or Los Angeles county is doing poorly the governor waits 14 days for it to be on a watch list before acting. This is too long for the extremely contagious virus giving it time to spread quickly. Governor Newson is now facing serious problems tackling the coronavirus. ...

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India needs more dams to collect, store and channel water to where it is needed. The rainy season is becoming shorter, with alot of the rain as much as 50% falling in about 15 days. This means some areas are flood prone and the water if not collected in dams would be lost. THe other problem is that a lot of water is wasted without proper maintenance of the existing dams and storage areas. Much of the state governments investment in this is ineffective so water is lost for lack of maintenance. The state irrigation departments are underfunded, overmanned and corrupt and are not upto the task of maintaining the existing irrigation systems. This presents ahuge problem because India is estimated to lose the equivalent of two thirds of the new storage it builds to siltation. Between 1992-2004 India built 200 medium size irrigation projects but the area irrigated by these projects actually shrank by 3.2 million hectares. New dams are not coming on fast enough and India has 200 cubic metres of water per person, compared with 1000 cubic metres in China. Groundwater -with the governments providing free electricity to farmers for pumps- is used widely but this is becoming unsustainable. The WOrld Bank estimates that 15% of India's food production comes from "mining" which is the use of unrenewable groundwater supplies. Many of these wells are drying out. Also free electricity is causing electricity boards to have insufficient funds for expanding supply causing chronic shortages. One quarter of India's electricity is given free or cut rate to farmers. And politicians trying to reform this system are often booted out of office. All this as 400 million Indians have no electricity. The answer is not merely to raise prices in places like Haryana state- where according to aWorld Bank study farmers with electricity spend 25% of their incomes for it and to repair engine pumps- but also for the utilities to improve supply. Farmers also need to learn to use water more efficiently. ...

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A report of the Transportation Department shows that over the past 8 months Americans have reduced their driving by more than 40 billion miles. Higer gasoline prices led to Americans driving less. In April 2008 Americans drove 1.8% less miles than the year earlier April, and in May this increased to 3.7% fewer miles than a year earlier. And this trend is not going to change or go back as as happened previously. So its a permanent feature of the new landscape according to experts. Everythng the kinds of cars people drive (smaller and fuel efficient), where people live (closer to work, and in closer proximity), the way they drive (less and use bicycles and small Smart vehicles also), and the way they use alternative transport ( frequent use of mass transit and better quality of mass transit with new investment), all tis is about to change permanently. The way the USA funds road and bridge repair and maintenance and new road and bridge construction is through gasoline taxes at the federal level (18.4 cents a gallon) and state taxes. With reduced driving there is less money available to fund these road projects. But this happens at a bad time because existing road and bridge infrastructure is crumbling. About 25% of the country's bridges are in bad shape or obsolete or structurally deficient and one in seven miles of roads are in bad shape according to the National Surface Transportation Policy and Revenue Study Commission, and most people can see this when they drive around intheir cities. And big increases in the cost of asphalt and other construction materials are only compounding the problem. The Commission says it will cost $225 billion a year to tackle national transportation infrastructure needs. Worse still only 40% of this is getting funded. So a huge gap in funding looms and Congress is being pushed to come up with funding solutions as states struggle to deal with the problem....

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Will reminds readers about what King wrote in his "Letter from Birmingham Jail," about being labeled an extremist, the same words that he sees Democrats saying about Ryan's plans as being extreme for Medicare and Social Security, now that he is Romney's running mate in the U.S. presidential race. "But though I was initially disappointed at being categorized as an extremist, as I continued to think about the matter I gradually gained a measure of satisfaction...Perhaps the South, the nation and the world are in dire need for creative extremists." Will's point is that Ryan is unfairly being labeled an extremist for coming up with creative solutions because "ending Medicare as we know it" will happen though the laws of arithmetic for the U.S. deficit with runaway health care spending and uncontrollable medical care price inflation. This would produce more drastic results than through the kinds of creative changes that Ryan is proposing. Will's other point is that the entitlement spending increases cannot be solved by simply raising taxes on the rich especially at a time when costs are out of control. This is especially true because the U.S. economy depends on private sector confidence and investment for growth, and even more so now that the stimulus has had limited results and served its purpose in crisis management. Ryan has also modified some of his ideas in discussions with other voices in his party, a process which will continue to evolve with the infusion of ideas from Dave Camp, Romney, and others in his party....

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The World bank president Robert Zoellick in an interview with Sudeep Reddy of the Wall Street Journal. He says its frustrating to see Europe respond to problems in banking, sovereign debt and competitiveness that have a chance to work, but only to find that the action is a bit late and a bit short every time. He says the Germans are right in insisting that credit cannot be given away freely, and that reforms have to be made. Yet these reforms in the case of Spain and Italy to increase competitiveness will take time and in the meantime both countries will need bridge financing. A direct recapitalization of European banks by the European Financial Stability Facility is needed to avoid this slow and continuous decline in confidence from negative news and uncertainty. Because the problem now is of a longer term nature with debt issues that will take time to resolve and energy price volatility, Zoellick says simply doing short term stimulus and monetary will not work, and a longer term plan needs to be implemented. Zoellick supported the China Development Report of the World Bank and China's DRC which called for a shift in the economy away from reliance on state owned companies and heavy infrastructure spending. Here he says the new stimulus plan for China was necessary because of slowing growth. Yet he hopes China's leaders keep this in mind as they develop solutions for the long term that avoid the rampant credit expansion and investment of the 2008 Stimulus, and come up with a new policy mix....

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Vernon Smith asks the question why when $10 trillion in losses were experienced in equities in 1999-2002 the financial system did not collapse, and in 2008 losses of $3 trillion in mortgages held by homeowners resulted in a collapse of the financial system. In the 2002 period the losses, he says, were borne largely by institutional and individual investors who largely owned the assets outright. In the 2008 crisis homeowners purchased about 90 to 100% of the housing assets on margin, and declines in value of 50% or more in the low price tier were seen for homes bought at the peak of the bubble. These losses were transmitted to banks and lending institutions. The consumption binge added to the debt of households. The result is that lending went down sharply for durable goods consumption, and this is seen in the decline of auto sales of 41% from Feb. 2008 to Feb. 2009. The collateral damage then occurs in retail and labor markets. This is similiar to how Ben Bernanke viewed the Great Depression crisis in an important paper- the inability of the financial system to perform its economic role of lending to households for durable goods consumption and to companies for production and trade. This understanding is different from the Friedman view of a contraction of the money supply, and the view that excessive speculation caused it. Bernanke's experience studying the causes of the Great Depression uniquely qualified him to address the causes of the global financial crisis of 2008....

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The personal saving rate of savings as a percentage of disposable income increased from 3.2% in November 2011 and 4% in May 2012, to 4.4% in June 2012. This happens as consumers reduce spending in mid 2012.

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Micheline Maynard gets diverse views on bankruptcy filing and bailout for General Motors and Ford. Out of hundreds of comments, (looking at the comments based on reader recommends from 70 to 15 readers recommend range), with over 90% of comments favoring no bailout money for automakers without coming to grips with problems and replacing management and the board, it is clear that readers cite in order of importance the following against the automakers. Complicity with Congress and lobbyists in keeping fuel efficiency low. This sent billions of dollars to mideast nations for oil, which in turn bloated liquidity here at home, helping fuel the cheap credit era in the US and building consumer and mortgage debt. This lack of conservation in gasoline use burdened economies around the world with high oil prices, and then hit the car companies in Detroit hard as sales of large vehicles collapsed. Its entirely the Detroit carmakers own shortsightedness they say. Second most mentioned is bad management, and bad decisions and arrogance. Third the unions bloated contracts, and bankruptcy as the only way to get rid of them. Fourth failure to make green cars. Fifth the lack of any idea what $25 or $50 billion given to GM and Chrysler would get the taxpayer, because if the market has collapsed then more money will be needed each year to pay salaries and contiinue operations in 2009, followed by 2010. The market has gone from 16 milllion to a 10 million rate in October 2008, if it drops to 8 million in 2009, it would require the companies to shrink by 50% as a rough guess, and the union contracts just negotiated would be totally inappropriate for the new market and financial conditions. Getting rid of those union contracts could only be done in a bankruptcy filing, as in bankruptcy everything would have to be done from scratch. Whereas in a bailout the unions would simply refuse to cooperate as they have done in the past. This is also what readers are saying when they say let the market economy work. A look at the reader comments on similar articles in the Washington Post and the WSJ also show an overwhelming number of readers not favoring taxpayer money for automakers without serious changes, and bringing a completely new management and board to get things off to a fresh start, with no legacy from the past. ...

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CEO Norbert Reithofer who became head of BMW in September is pushing BMW in the direction of more collaborative work with other car companies. He has set as a goal collaborations in the areas of components, drive systems and modules. Daimler's new chief Dieter Zetsche s also rethinking how it approaches its business. One way to develop new technologies and purchase parts and components efficiently is to work with other companies who are striving to do the same things. Both CEO's see their companies as midsize manufacturers in a world of auto manufacturing where Toyota and VW, GM and Ford have the advantage of much larger sales over which to spread their research dollars, or to make efficient purchasing by using volume purchasing. Daimler is encourged by its participation in a combined effort in the area of hybrid technologies with BMW, GM and Chrysler, and the progress made in that area through collaborative effort. This is making both companies rethink their intense rivalry since the 1930's, one based in Stuutgart and the other in Munich. Both companies have good profits and as the environment gets harsher with steel prices rising, with demands from the public for tougher new auto emission and fuel efficiency stadards requiring allocating more dollars for R&D, a strong euro and a struggling US economy. The challenge they face is sustaining this profitability as it becomes more costly to operate in this environment. Both companies have appointed some of their talented executives to profitability teams which are working at developing more collaborative efforts....

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EpiPen's price has jumped 550% over 8 years. Mylan Pharmaceuticals is dominant in the $1 billion market for treating serious allergic reactions. Mylan acquired reights to sell EPiPen in late 2007. A pack of two list price is now $608.61. Last Nov. Sanofi's competing product Auvi-Q was recalled giving Mylan price dominance. A problem for consumers is that EpiPen expires in one year. Mylan launched a campaign to make parents aware of the product for children with peanut and other allergies, and also lobbied the governments to make ready supply of EpiPens available in schools and other public places. Now the controversy over price increases, with Hillary Clinton citing this as an example of exorbitant pharmaceutical pricing, is likely to change the environment around EpiPen and other overpriced drugs or healthcare products.