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Washington Post reporter, Alyssa Rosenberg's intervew with Ken Burns of the documentary "The Civil War." Burns offers his own view of race relations in 2015, 150 years after the emancipation.

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The problems divergence between developed and developing economies creates for companies- in slow growth on one side and fast growth with asset bubbles on the other side.

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The U.S. Census Bureau shows incomes of American households, the median household income, surged in 2015 by 5.2%. This increased by $2800 to $56,500. This is the largest increase since 1967. It shows that steadily improving employment and hiring is leading to improvement in incomes for the middle and working class. Ris in minimum wage has also helped . The largest increase was for the lowest 20% of the income tiers. Full time working women did better than men, with increase annually of 2.7% for women, and 1.5% for men. Nocitizen incomes increased 10.5% to $45,100, native born households went up 4.4% to $57,200. The number of people without health insurance also declined from 33 million or 10.4% of the population to  29 million people or 9.1%. Another way the changes are helping lower income households is the decline of the official poverty rate to 13.5% in 2015 by 1.2 percentage points from 14.8% in 2014. Through a series of small incremental steps the path is being set for a recovery of household incomes for the middle class and working class. A bright spot is that the improvement has affected all age groups, household types, regions and ethnic groups, though among full time workers women did better than men. In this recession older white men have had more difficulties getting back into the workforce. This is reflected in the political scene in 2015-2016 for the election season. ...

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Laurence Meyer of Macroeconomics Advisors, a former Fed governor, says monetary policy will offset the effects of tighter fiscal policies and budget cuts. This is not stated explicitly he says, but Bernanke will counteract the effects of budget cuts and austerity policies by putting off rate hikes. The expiry in December 2011 of a compromise reached between the GOP and Obama to lower payroll taxes and offering business a tax break on capital investment will lead to a reduction in GDP by 1% in 2012, according to Mark Zandl, of Moody's Analytics. Pressure for budget cuts could add another half percentage point reduction in GDP, according to IHS Consultants. Bernanke will be mindful of these considerations as he considers any rate hikes in 2012.

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Italy's National Reform Plan shows a forecast of GDP contraction in 2012 of 1.2%, up from an earlier forecast. Italy will show a budget deficit of 0.5% of GDP in 2013. Italy's Deputy Economy Minister Vittorio Grilli poitsed out that in structural, cyclically adjusted terms Italy will post a budget surplus of 0.6% of GDP in 2013, that fiscal policy was tightening. This was confirmed by the IMF which said that Italy will achieve structural balance in 2013- which means that if the economy were operating at full potential Italy would have a balanced budget.

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The IMF predicts GDP decline of 1.9% in Italy in 2012.

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Student loan default reaches 22% in 2017 up from 17% in 2013. Defaulted loans are $84 billion or 13% of $631 billion required to be paid by borrowers.

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Joe Nocera visits two plants built by Gray Construction in N. Carolina. One is a Siemens plant in Charlotte, N.C., and the other is a Caterpillar plant in Winston-Salem. Both towns have community colleges that stress manufacturing skills. Forsyth Tech created a program working with Caterpillar to train its graduates in machining skills needed at the plant. The Caterpillar plant is huge at 850,000 square feet, and makes axles for mining trucks. The Siemens plant will make 280 ton gas turbines. Siemen's manager Richard Voorberg, tells Nocera the labor cost difference is not that much of a factor in highly skilled work, with shipping costs, and other efficiencies being more significant. Gray's backlog of 22 projects suggests a similiar conclusion. The problem is that the number of skilled workers needed in an highly automated plant with complex robotics is small. Caterpillar's plant will need about 500 workers, and the Siemens plant will need about 800 workers. This makes only a small dent in the enormous job losses of the last decade. And in N. Carolina the jobs lost in the furniture industry as the industry moved to China. Dow Chemical CEO, Andrew Liveris, points to the jobs created in the supply chain for every manufacturing job. And Ford Motor Company CEO, Mullaly, points to the innovation required in state of the art manufacturing, that creates sustainable advantage. The process of creating enough manufacturing jobs will take a long time, including shifts to new technologies and new products....

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The Portuguese government asked the European Union for bailout loans. The aid the EU is providing to Portugal comes with conditions- asking Portugal to make additional austerity cuts even as new elections loom. The aid is essentially more loans at high interest rates, even if the rates are lower than the steep rates in financial markets for a country with a collapsing credit rating. There is serious concern about whether this formula applied by the EU is going to work because at this rate it may take a decade or more for Portugal to pay off all the loans. The major problem is that with severe spending cuts- a country that lacks competitiveness and cannot devalue its currency because of being the euro zone- it is that much harder to generate growth. Simon Tilford, chief economist for the Center for European Reform in London, says the EU leaders have failed to come to grips with the core of the problem for Ireland, Greece and now Portugal- which is how to restore the finances to some sustainability, and how this could ever be achieved by a policy of deeper and deeper spending cuts. Tilford points out that the other more fundamental problem EU leaders are not tackling, is that the problem is deep down the large amount of Portuguese, Irish and Greek debt held by German, French, British, Spanish and Dutch banks. If these countries default the governments of these countries would have to recapitalize their banks at the expense of the taxpayers of Germany, France, Britain, Netherlands. Political leaders of these countries want to avoid confronting angry taxpayers and lose political support. Germany has called for a bondholder haircut, something that banking interests do not support. Tilford says Portugal is not getting a bailout, because for a bailout there would need to be a default by Portugal. What it is getting along with Ireland and Greece, are loans at high interest rates, and an EU plan that simply stifles the ability to pay back accumulated debt, leaving the situation in limbo for some future resolution....

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The rapidly changing demographics as the U.S. becomes more of a multicultural society. For the first time minority babies formed a majority in 2011 with 50.4% of new babies, according to the Census Bureau. The median age of the non-Hispanic White population is 42 compared to 28 for Hispanics. Hispanics are right at the child bearing age. This also raises the issue of how the U.S. will educate the minority population. Today 13% of Hispanics have college degrees, 18% of Blacks and 31% of Whites. High school graduation rates in places like New York City for Hispanics are lagging far behind other groups. The economic downturn after the 2008 financial crisis has worsened the educational prospects for Hispanics and other minorities. The education of minority children is essential to improve the competitiveness of the U.S. in a global economy, as the educational levels in emerging markets accelerates with more opportunities.

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The influence of business executives who helped shape president Trump's views on Mexico, China, Export Import Bank, and other issues is covered by Stokols and Bender of WSJ. On Mexico the departure of Mike Flynn helped moderate views, Wilbur Ross, the Commerce Secretary also provided a moderating influence. The plans are now to change NAFTA but not entirely redo the agreement. On the Export Import Bank the views of Boeing CEO Muilenburg, who explained to Trump why the Bank supported U.S. exports and how other countries had similar banks, led to the president filling the bank vacancies. On China the influence of NEC head, Gary Cohn, former president of Goldman Sachs, and other business executives, led to a less confrontational position. The president once called NATO obsolete during the campaign but he met this week with NATO secretary general Stoltenberg this week and expressed strong support for NATO after rising tensions with Russia.

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Xi Jinping's experience as Communist Party secretary in eastern Zhejiang province, and in running Shanghai, gave him insights on how the private sector had changed the province and the weakness of state run companies; as well as how state run companies operating efficiently such as SAIC in the automobile industry in Shanghai had achieved success by diversified ownership through listing on the Shanghai Stock Exchange. Studying how Singapore's Temasek has provided efficient management of state owned enterprises, which are run like private companies and have private investors and compete in markets; has reinforced the idea in the Communist Party that state ownership in key sectors can be maintained. The idea being adopted is retaining a majority controlling interest for the state at the same time as transformation of state run enterprises to operate similar to private enterprises takes place. The new plan put out by the Communist Party and the State Council, China's cabinet, takes up reform of the large state owned enterprises in China along these lines. The enterprises will take on private investors, list on stock exchanges, and operate like private companies hiring managers at the market rate. The energy, resources and telecom sector state enterprises will be reorganized as asset investment firms, and these enterprises will be required to operate like private companies to maximize profits, hire managers, and list on stock exchanges. ...

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Mohamed Hanif of the BBC's Urdu Service points to the manner in which the CIA and the ISI collaborated in the two time destruction of Kabul. And he points to a Pakistani view outside of the military which is not obsessed with India and would like to get down to the basics- electricity and infrastructure, better lives, and a safer neighborhood. In this perspective the Pakistani military and the Americans both do not understand the basic needs of the large majority of Pakistanis yearning for a better life. Contrast this with the Thomas Friedman piece which complains on the other side, with a note of innocence, of becoming a sucker in this game of a two-faced Pakistani military and intelligence services using the Americans for their own game, supporting the Americans and the insurgents at the same time. Hanif almost has the last word in this, pointing to the ordinary Pakistanis who are just poor and looking in.

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The Italian comedy movie "Quo Vado," became a hit in Italy in 2016, premiering on Jan. 1. It tells the story of a government clerk played by Checco Zalone, whose only aspiration in life is a 9 to 5 government job for life. It lets Italians laugh at the past in a Italy that is changing. Today, the Turin newspaper La Stampa points out from its survey, two of three Italians would take some risk if it means career advancement. Yet public sector job protections remain firmly in place even as the private sector is changing rapidly not just in Italy but in Spain and other parts of the European Union.

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Dow Chemical CEO, Anthony Liveris, is co-chair of the Advanced Manufacturing Partnership, an effort to bring together federal government, industry, universities and other groups to invest in new technologies that would generate good-quality jobs and increase U.S. competitiveness. He writes this letter in the Wall Street Journal to correct two misperceptions. The first, is that government has no significant role in nurturing an environment that is good for business and manufacturing industry. Because other countries, including China, are now operating like companies, it is important not to let the U.S. be in a disadvantageous position. Government has always been involved in its writing of tax and incentive policies, regulations, trade agreements, and creating a climate of certainty. The second, is that the loss of manufacturing capacity and job losses in the last 10 years are different from the job losses in the 1980's. These are not the low tech and less efficient manufacturing job losses of the 1980's, but job losses as a result of moving advanced manufacturing capacity and research and development centers to outside of the U.S. Of the 8 million jobs lost in the last recession, he says two million manufacturing jobs of higher pay and supporting employment in other sectors were lost. His point: its time to focus on expanding manufacturing in the U.S. because manufacturing is the sector with the highest multiplier effect on other sectors. Public-private partnerships are critical to this effort for increasing technology development and increasing investment. This view is supported by other experts....

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The authors, Becker, Davis and Murphy, are from the University of Chicago. They point out that the uncertainty created by the Obama administration's programs including healthcare and social investments in education, energy conservation, and the desire to reduce carbon emissions, all tend to slow business expansion and investments to create jobs by putting additional costs on business. The expanding federal deficit and national debt also create additional uncertainty. Their point is that it was a mistake to start making major changes to transform the U.S. economy at this time, and that it would have been wiser to do these changes after the economy had recovered completely from the crisis. All efforts they say should have been concentrated on establishing conditions for a strong recovery. When combined with the lack of regulatory reforms to fix problems left behind from the crisis, and other failures, serious questions arise about how things will turn out in coming years. See Krugman- The Feeling of 1937, where Krugman takes this up from another angle, again with concerns about the future....

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Using a new methodology India's statistics agency revises growth for 2013 to 5.1%, for 2014 fiscal year to 6.9%. Growth for 2015 is forecast at 7.4%. For the 3 months Oct-Dec. 2014 the growth in GDP was at 7.5%. Changes in methodology include computing it at market price, not at factor cost. This adds up consumer and firm spending instead of producer costs.

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It may come as a bit of a shock to learn, that the entire country of Nigeria produces about as much electricity at electricity generating facilities, as the electricity used around Japan's Narita airport. Most people in this country of 150 million people, get electricity only for a few hours a day. As a result two thirds of all electricity consumed in Nigeria is produced using small scale generators. President Jonathan's plan to raise $3.5 billion to increase electricity supply 13 fold. Since the 1990's the capacity increased by half, but distribution is extremely poor, so that the actual supply has remained flat. One result is a very small manufacturing sector, of about 4% of GDP.

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Lawrence Katz, Harvard labor economist, talks to Friedman about the jobs crisis in the U.S.. Katz identifies three jobs crises occurring at the same time today. One is the drop in the demand for goods and services that resulted from the longer term effects of the financial crisis of 2008, with rising foreclosures, weak housing markets, bad debt on the balance sheets of banks, and interest rates at close to zero reducing the scope of action by the Federal Reserve bank. The second, is the widespread long term unemployment with workers dropping out of the labor market. The third, is the nature of new factories and hiring. Work in new factories is done through increased automation, information technology and fewer workers. As a result job creation is a fraction of what it was in the past. Not mentioned here is the shrinking of the public sector under the strain of budget deficits for local, state and federal government. This leads to the question of how America will create jobs in the future. Katz believes the answer is creating more "hubs," networked urban areas like Austin, Silicon Valley, and Raleigh-Durham, by bringing together universities, high-tech manufacturers, software providers, and startup companies, to cooperate in creating new products that enhance people's lives worldwide. This has to be done by the private sector and government working together to build the infrastructure and make the investments in education, training of workers, and equipment for new job creation....

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Inflation in the eurozone is running at 0.7%, well below the target of 2%. In a opening speech for a 2 day conference organized by the ECB in May 2014, ECB president Draghi said the increase in the value of the euro since 2011 has made commodities like oil cost less in euros, contributing to lower inflation. A key concern referred to in Draghi's speech is the data from Spain and Portugal about the difficulty for business to get loans in Spain and Portugal. About 25% of Spanish businesses and 33% of Portgual's businesses have difficulty getting loans. Even profitable companies have difficulty getting loans. One way the ECB could tackle this is to make cheap loans available to eurozone banks conditional on the money being lent to businesses and not invested in government bonds, as has happened during prior ECB efforts to capitalize banks.

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NYT reporters Lyman and Eddy show how the city of Weimar in Germany is coping with the arrival of about 900 refugees, and how well the integration efforts are working.