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As factories fail and owners flee China, leaving behind unpaid suppliers, the suppliers are ripping up all the equipment to pay what they are owed. The lack of good bankruptcy laws makes the situation ugly, see pictures.

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If there is no good succession in Medvedev's view the economic and social development of Russia will slow down significantly, for this reason the First Deputy Prime Minister under Putin puts a lot of significance on getting a good leader in place to continue the development progress of recent years. It is interesting that the thought process behind the remarks shows that the person has reflected a lot on these things, on leadership and good succession and its role in development, on a government and the importance of a good constitution and getting the best out of it, on studying the experience of other countries and being aware of their historical development, the role of a national leader, the constitution and everybody abiding by it, on corruption and its presence in latent and other forms and its different character in different societies. He talks about the importance of a Presidential system for Russia with strong presidential power, and the complete unsuitability of a parliamentary republic for Russia because it appears that the government could end up being weak with a many party coalition, especially in Russia at this time where there are many parties and factions each would be jockeying for power. Coalition governments would not accomplish much leading to stalled economic and social development. Manufacturing is very important to Russia, and adding a high portion of the value added to products is very important,  that Medvedev understands. It appears he has reflected on a lot of things that matter to Russia's development, and would make a different kind of President than Putin. He just might carry forward Russia's development for the next 8 years in a proper manner. From the standpoint of oil prices and availability of supplies, a good environment for cooperation in the energy sector between foreign companies and Russian companies, it appears that Medvedev would offer good leadership for the next 8 years in a Medvedev- Putin combination as President and Prime Minister, a Medvedev-Putin administration. This would also be true in the manufacturing sector in the expanding industries like automobiles and others. ...

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The U.S. 2010 Project study's lead author, Barrett Lee, sociology professor at Pennsylvania State University, says diversity is becoming a part of daily life in America throughout the country not just in large gateway cities like New York, Miami and Los Angeles. Hispanic immigrants are moving eastward changing the faces of towns and cities in the South and Midwest. Hispanic population increased 42% from 2000 to 2010 to 50.5 million, Blacks increased 11% to 37.7 million in that period. Asians quadrupled between 1980 and 2000 to about 18 million.

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The Center for Strategic Studies in Moscow was prescient in predicting problems of declining support for Mr. Putin before the December 2011 parliamentary elections. Work with 32 focus groups by the Center in May 2012 shows a continuing erosion of support for Putin as efforts to open the political system have faded. The discontent focusses on the delivery of basic services such as healthcare, education, law enforcement, infrastructure.

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Kadish says interest on the national debt is 383 billion dollars or over 40% of the national individual income tax revenues of $904 billion. This according to Treasury's Bureau of the Public Debt. THe COngressional Budget Offfice estimates the 2009 budget deficit to be about $1.4 trillion or about 10% of GDP. OMB estimates total government revenues at $2 trillion. As of 2009 the national debt waas $12 trillion according to Treasury. and OMB forecasts $9 trillion of projected deficits over the nexxt 10 years. This means the natioanl debt could reach $21 trillion by 2019. OMB projects $13.5 trillion of revenue increases over the next 10 years but this says Kadish is optimistic and minimizes the rise in interest rates from larger debt burden. In the light of this adding more social programs he says could lead to asituation of high interest rates double or triple the 2.9% now, on refinanced or new debt.

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Stephens says the lack of swift military action to protect the U.S. consulate in Benghazi by all means available was not undertaken by President Obama from Wall Street Journal accounts of what happened. The reason given was not to violate Libya's sovereignty, instead an effort was made by the State Department to get the Libyan government to send reinforcements. This was the situation at 5 pm on Sept 11, in an Oval Office meeting, when news of the attack on the consulate reached President Obama. A suggestion was made according to WSJ reports for U.S. planes to fly in from the closest airbase to scare away the attackers but was not adopted. The Obama adminstration was slow to act decisively in the struggle for freedom from the Gaddafi dictatorship and agreed to support the French-British effort after the war was underway for some time. This is likely to have left the U.S. with a lack of sufficient intelligence on the ground about the movement of remnants of Gaddafi's army, mercenaries from Mali, and terrorist groups, which are suspected of involvement in the attack, and which had threatened Ambassador Stevens according to his diary. The U.S. consulate in Benghazi was burned down in a deliberately planned attack and one of America's finest diplomats Stevens lost his life in the attack. ...

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The lack of education mobility in the U.S. with rising student debt and soaring tution.

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Bloomberg television interviews Russian President Medvedev.

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The contrarians not just then, but still today, as many economists shrug off facts about the new savings rate and predict a bounce back in 2009. Jeremy Grantham, co-founder of Boston money mangement shop GMO LLC, got the date right, predicting real risk to the financial system in October 2008. He pointed out for years since 2000 that the Fed's moves and the government's fiscal actions (including 2 costly wars) after the 2001 terrorist attacks, had simply postponed "a sensational bust". Its useful to see how these three, Peter Schiff, President of EuroPacific Capital, Bob Rodriguez of the FPA New Income Fund, and Jeremy Grantham agree and where even they disagree, and where the common thread of logic runs. Currency valuations including the US dollar, are the hardest to predict, and the predictions in this regard are also hardest to state for their timing. When separated from the rest of the picture, they give a better sense of what this common thread of logic in most of the crisis picture is. Grantham saw this crisis coming, but its not clear that he sees this running for a long period of a decade. He agrees with Rodriguez and Schiff about another 30% fall in the S&P 500 stock index, but at the same time he predicts over the next 7 years returns in the US stock markets will be 7.5% annually. Rodriguez sees this going on far beyond periods 1 and 2 to periods 3 to 10. And he sees government efforts to jump start the economy leading to some progress and then sputtering out because consumers are turning frugal. The savings rate will grow eventually going up to 10% by 2010. What this means is that as 70% of the US economy depends on consumption spending, and consumption spending has been too deeply damaged to recover in a few years, the downturn will only deepen in 2009 and 2010. This is his central point, and the analysis free of clutter and controversy. Basically he says the policy makers do not fully grasp that the US consumer has turned into a saver, and while the Obama administration puts one foot on the accelerator to stimulate spending, consumers will be pushing on the brakes. Schiff sees difficulties in financing the debt leading to higher interest rates and a serious drop in the value of the dollar. The views on the dollar face a lot of uncertainty as to timing, the relative strength of currencies in countries in Europe which have weak economies (UK, Ireland and Spain), and the rapidly weakening Chinese economy. But the common thread of logic runs through Rodriguez's argument about the savings rate and consumption spending, with debt and the overstretched consumer in the US running through every discussion about a weakening economy. Something much like what is happening to the auto industry because of its extraordinary degree of oversupply (with capacity reaching 94 million vehicles worldwide and demand inflated by the boom years and easy money now deflating) playing out in a few quarters, is likely to happen across the whole economy. In a gradual pattern playing out over a few years, as consumers postpone purchases of retail goods. Already this is showing up in the inventories of electronic goods that is building up. See links. Kelly Evans in the WSJ front page on January 6, 2009, confirms the signs of a seriously frugal American consumer....

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During the election campaign Obama talked about sending at least 2 more combat brigades to Afghanistan. The Defense Department is already planning to send 20,000 additional troops in response to a request of General David McKiernan, top commander in Afghanistan,including 4 combat brigades and an aviation brigade with helicopters, increasing the American troop levels to 58,000, with an additional 30,000 NATO troops already there from other countries. The timeline for this is 12-18 months but with the escalating insurgent attacks in Afghanistan this will probably be done more quickly. Obama and some Democrats talked about Afghanistan as somehow being the good war and he vowed to defeat the Taliban and militants in Afghanistan. But Afghanistan is a different place and most military experts are suggesting that a good strategy will be needed, for example winning over the tribals and some of the militants, and not trying to win militarily. However with the deteriorating situation there the only way to win over tribals and militants may be to get the situation to where the NATO and US forces are in a strong situation. The two big handicaps in this are first history, where the terrain and rural distribution of the people make it difficult to exercize any control over the vast region of mountains and deserts. So throughout history no one has controlled this region and there is no history of centralized government, with different tribes controlling their regions. The other is the problem created by the corruption and lack of any popular support for the Karzai government, which is made worse by the involvement of its officials in the opium trade with opium growing booming in the southern part of Afghanistan. How does the US and NATO create an effective Afghan army and police under a state that does not enjoy any popular support. And yet the strategy that Gates. Petraeus and McKiernan are pursuing involves preparing the Afghan army and police for the task of controlling the vast mountainous region against a rural insurgency that knows its way in the mountains enjoys rural support because of the independent spirit of the Afghan people who find it easy to see the NATO forces as white foreigners in their country. The Afghan army is small for such a vast mountainous region, only 70,000 in a nation of 32 million people, and the police forces of 80,000 mostly corrupt and ineffectual. The present plan is to build the Afgan army to 134,000 still small for such a large region. The other problems stem from the Pushtun population in Pakistan that supports the rural insurgency in Afghanistan and the support of tribal people in the border areas of Pakistan. The picture tells the story, a small number of NATO soldiers in a remote ridge in Afghanistan. And the problems actually are across the whole of the far northern region of what was once British India, of Afghanistan and Pakistan, as the Pakistan government is quite fragile, having an army that operates as a power center of its own with little accountability to the central government. And years of war during the previous military government of Pakistan under Zia Ul Haq, in which Zia with the support of the Reagan administration supported another rural insurgency in Afghanistan that drove the soviets out of Afghanistan, and the subsequent sponsorship of the Taliban movement by the Pakistan military in Afghanistan, has created a situation in Pakistan where militants now operate freely and with impunity in Pakistan itself, disregarding both the Pakistan military and the Pakistan elected government's power structures....

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Krugman points out the gains on three fronts evident from the Census Bureau report of 5.2% gain in median income of households in the U.S. He says the first is the growth in incomes of ordinary working class and middle class families, second the large decline in the poverty rate, and third the further rise in insurance coverage in 2015 for people without health insurance. He points to the steady efforts of the Obama administration to improve lives of ordinary families as working based on the Census report though results have taken time, and could have been better. The Stimulus, says Krugman could have been larger following the blow of the 2009 financial crisis and increased unemployment at the time. Janet Yellen at the inequality conference of the Boston Fed in 2014 pointed out the problems of 62 million households having net worth of about $10,000, and why this was running against the American idea of a better life for all Americans. In that sense the Census report is a movement in the right direction but a lot remains to be done.   ...

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This New York Times editorial describes the impact on lower income Americans of spending cuts that are part of the Romney-Ryan plan.

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The new head of U.S. President Obama's Council of Economic Advisors, is Princeton economics professor, Alan Krueger. Kueger is known as the academic's academic, whose office is located with other labor scholars in the Princeton library. His work has focussed on what he calls "Rockenomics" (research about which bands do well and the reasons for this), on commuting, on studies such as the one with a suggestive title, "Sorting in the Labor Market: Do Gregarious Workers Flock to Interactive Jobs?" His appointment suggests the Obama administration is looking at no new policy initiatives, focussing on an incrementalist approach in policy actions, with the hope that he can get both political parties behind smaller changes. Putting a micro-specialist in charge at a time of huge volatility in financial markets shows an administration that is likely to continue the status quo with small changes till the presidential elections in 2012- the opposite of strong action because the Obama adminstration has no idea how to turn this economy around and only hopes things will change....

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The racial polarization in the U.S. before the presidential elections of 2012 between Romney and Obama. During the 2008 elections Obama did as well as Clinton by getting 43% of the white vote, it now appears headed into the 30's. This situation is reminiscent of the one facing Mondale in the 1980 election with Reagan, when Mondale received only 35% of the white vote. Fully 91% of the support for Romney comes from white voters as he passes 50% among overall voters in a late Oct. 2012 ABC/Washington Post poll. One irony in this situation is that Obama contested the 2008 election as a person who could bridge the racial divide.

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China's breakneck growth was enabled by housing construction, and coal in a way that created problems of climate change. Now China's largest housing developers Evergrande and Country Garden together have a staggering $500 billion in debt and in serious financial trouble in or near default. How will China's government respond? It let Evergrande who had defaulted on debt payments build 300,000 apartments last year, just to protect home buyers. Now it's founder Mr. Xu is taken in for questioning and "illegal crimes." Making sure that the apartments on which people made deposits are built would cost another $72 billion, says Nomura. Yet suppliers, painters, builders and brokers are owed another $390 billion, in one estimate. And foreign creditors are getting together for complicated restructurings. Evergrande had entered wealth management promising 8 or 9% returns and has stopped making payments. All this is affecting public confidence in the future and China's growth story. For decades China depended on housing construction for high growth rates. Now the process is unwinding with both in financial difficulties. This NYT report says that after Evergrande's default, Country Garden failed to make a payment on $200 billion in debt last week and has 400,000 apartments that it sold but has not finished building. ...

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Krugman points to the low productivity improvement in the U.S. since 2005, and looks at the nature of tech changes since 2005 with products from Apple, Google, Microsoft, Amazon and other companies targeted more at consumers than at the core industrial economy. Listening to my favorite music or using smartphones does not add to productivity in the same way that changes in an earlier period improved productivity. Low productivity improvement hurts workers in the U.S., Britain and in the eurozone, as this is holding back growth in wages. Figures actually show a further deceleration in productivity since 2010 to a mere 0.3% annual growth in the U.S., from 1.3% since 2005, and 2.9% for the period from 1995 to 2005.

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Senator Warren says weak leadership at the S.E.C. is the reason for the lack of effective enforcement and lack of prosecution of individuals for financial wrongdoing.

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An export rebound is not matching the growth in imports. Imports went up 31% since May 2009, while exports went up 27%. The result is that the trade deficit is growing, primarily because of imports from China and imports of costlier oil. The trade deficit is expected to reach $40 billion in December 2010, compared to $25 billion in May 2009.

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Commerce Department figures for May shows sales at retail establishments fell 1.2% in May 2010 from April 2010. The decline induced by drop in autos and building materials was the first decline since September 2009's 2.2% drop.