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In all the coverage on the Indian election the impossible having been accomplished that of going beyond the 244 million voters in the US, beyond the 373 million voters in the European Union. The eligible voters in India 2024 are 640 million and all the counting done on one day was accomplished by the Electoral Commission and tackled under leadership of the team by Rajiv Kumar, a civil servant who earlier served as the Finance Secretary of India. The results show that the elections were free and fair as the results speak for themselves that the opposition parties did better than they expected. What was not told in media coverage in the US and EU/UK was that the Opposition and the current government are at odds on one fundamental issue that a continental country suffering from centuries of colonialism can only create a modern nation with the infrastructure enjoyed by the US, EU, China, if it creates a large enough pool of investment in the trillions of dollars, has a master plan of proven execution, with no leakages from this pool of investment. Leakages from the pool of investment only stopped after 2014, and actions of direct deposits to 400 million bank accounts or rural households was essential. For modernization to succeed another condition that had to be fulfilled was to create even through a pandemic a core of about 500 million of 1.4 billion people of the middle and lower classes who would approach the conditions o the US, EU, China consumer base for industry. This the Modi government has done with all its projects and hard work by adding the 250 million people to the consumer base pulled out of poverty. The task ahead is doing what the US, EU, China as continental nations have done to modernize and industrialize 2024-2035 to build the third largest economy ahead of the EU by 2035 and every state and city in India aspires to this transformation, from the south and northeast to the north and the west.   ...

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What harm will one ton of carbon dioxide pollution cause to the planet? Under Obama administration $50, under Trump administration $5, under Biden administration $200.  Mr. Revesz asks the obvious question others forgot to ask- how does this regulation or change affect future generations, what problems children and grand children won't face because of this action? The man who heads OIRA is given the task of doing the cost benefit analysis for billions of dollars of US government projects designed to fight climate change. Because of its looming importance Mr. Revesz of NY University School of Law was brought right into OIRA in the White House instead of the EPA. The Office of Information and Regulatory Affairs (OIRA) is located right in the White House. It is the gatekeeper and final word on new federal regulations on climate change. Astounding as it may sound, during the Obama and Trump administrations no effort was made to track the cost of climate change for future generations. Mr. Revesz is changing that. As a result of his efforts at NYU School of Law and in assisting attorneys general in the Trump administration, and now at the Whit House he is changing the way the world looks at climate change action. He shows how the EPA new rules on tailpipe emissions will promote electric cars. The benefits exceed $1 trillion from the shift and this will show that it exceeds the cost of the fossil fuel companies and the US economy making the changes required. ...

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Overall America's Infrastructure gets only a C grade- but that is the best grade since 1998 so badly has the Nation's infrastructure been neglected under Clinton-Bush-Obama.  Bridges, broadband, drinking water systems, hazardous waste treatment, inland waterways, public parks and solid waste received grades of C+, C or C–, mediocre condition needs attention. Dams, levees, roads, schools and infrastructure for aviation, energy, storm water, transit and wastewater get grades of D+ or D, poor condition. Ports get a B, Rail gets a B- dropping a notch, and Energy get a D grade in this report on US infrastructure by the US Society of Civil Engineers. It comes out every four years. The shortfall in infrastructure spending- $3.7 trillion. This after the $1.2 trillion Biden Infrastructure bill made a real difference since 2021. Grades have improved on half of the 18 categories this report tracks. “Better infrastructure is an efficient investment of taxpayer dollars that results in a stronger economy and prioritizes American jobs.” Darren Olson, chair of the committee on infrastructure of the Society of Civil Engineers. "The investment levels that we saw under the last administration have really started to move the needle, and we’re looking forward to advancing that conversation as we move into this administration.”- Kristina Swallow, president of the Society of Civil Engineers ...

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Elected to the Politburo in 1980, Gorbachev became president of USSR in 1985. In the six year period to 1991 he launched a movement to free the USSR from the rigid constraints of communist party rule called Perestroika to improve productivity, freedoms and quality of life. He came from a peasant family with Ukrainian origins and was born in 1931 during the period of upheaval in Russia. The rapid removal of Soviet rule was something Russia was not able to adapt to in the early years with no experience in democratic process. By 2000 after drop in life expectancy and fall in the standard of living Mr. Putin emerged as president.  Russia's economy recovered under Putin's three terms till the miscalculations in the invasion of Ukraine in 2022, that were itself a result of a sense that Russia had lost something with the fall of the Soviet Union and the advancement of NATO and the European Union. Gorbachev's sense in his memoirs was that Russia would do best under democracy. Even in 2017 he wrote that Russia and its people were "ready for a real multiparty system, fair elections and a regular rotation of government." Yet he was too much of an optimist and not enough hands on to grasp that Russia was a large economy and safeguards had to be put in place for the rule of law to prevent lawless elements that could control companies, safeguards for the vulnerable sections of society such as pensioners and older people, and limited self government through elected assemblies and parliaments were needed for a decade before democracy to take roots. Gorbachev's knowledge of American and British democracies, constitutions and parliaments and their evolution over centuries was non existent, with little contact and education of this sort under the Czar or Soviets. The democracies in Germany and Japan were established with American power and extensive education, the Marshall Plan, and unlimited imports by the US from Japan to prevent economic catastrophes of the kind experienced by the Weimar Republic in Germany in the 1920's. No plan from western aid and assistance, limited self government of the people was introduced as training ground as in India. In India the British introduced limited self-government or Swaraj in the 1930's with elected assemblies in Indian states, in the pattern of Dominion states such as Canada and Australia. Mohandas Gandhi negotiated the rights of indentured Indians in South Africa in this arrangement and studied British law and constitutions. This led to the catastrophic failure of the rule of law in Russia after 1979, lawless elements emerging under Yeltsin  that controlled companies and the state, high unemployment, failure of the economy, and drop in life expectancy between 1979 and 2005. How this led to the Putin years and now led to the war in Ukraine is covered in more detail under the Lyrarc article on Gorbachev and how he is seen in Germany. ...

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The U.K.'s deficit in trade in goods widened to 8 billion pounds in January 2010, even with the 25% decline in the value of sterling against the dollar and the euro. This suggests that devaluation is not likely to help rebalance the economy and things will have to be adjusted the hard way in the manner being done in Greece, Ireland and possibly Spain with cuts in spending. In the past the devaluations were accompanied by drop in interest rates, but this time interest rates are already low. And the U.K.'s weak manufacturing and excessive reliance on financial services does not help in boosting exports.

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In comments made to the editors of the New York Times, Mario Monti, the prime minister of Italy, says the European Union will endure because it was in the vital interests of Germany. Competitive devaluatations if a number of countries exited the eurozone would have an enormous harmful effect on Germany. Germany is an export dependent economy and sends two thirds of its exports to EU countries. In the unlikely event Greece leaves the eurozone, Monti says effective political policy responses can be expected to prevent this from affecting the rest of the eurozone. Monti is on a visit to the U.S. for talks with President Obama. He praised the effort by Greece's prime minister Papademos to meet the demands of international lenders in difficult conditions.

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Audi is the second largest car company in the premium car category in China after BMW. Audi now plans to make 700,000 cars in China by 2015 instead of 2020 as planned earlier. Audi say executives say the premium car segment in China is growing rapidly in China. It expects sales to grow overall at a a more normal pace than the frenetic pace of recent years. The slower growth in the economy at 7-8%, which is reflected in slower sales in the overall market, is not the case with the premium cars. Because of rapid growth in 4-5 years the Chinese market for premium cars will look more like mature markets in the U.S. and Europe, says Audi sales chief Schwarzenbauer.

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Einsinger points out that Treasury Geithner's performance reflects the mindset of U.S. president Obama, reflected also in Obama's other appointments in his administration which favored one group over another. Change that Obama talked about in the 2008 election campaign that propelled his candidacy, turned out to be more at the margins than change and action that reflected a vision of the priorities for America's middle class and vast majority of average Americans. By leaving homeowners to a wave of foreclosures, the administration weakened a middle class at the lower end already hit by the lower wages from globalization in manufacturing, other changes in the global economy, high levels of student debt of over $1 trillion, and the lasting damage to unemployment from the global financial crisis.

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BMW's first mass production electric car the i3 will go on sale inthe U.S. in the second quarter of 2014, priced at $41,350. It is a city car with a range of 100 miles from one charge. BMW will launch a i8 in 2014. The i8 is a super sports car with high fuel economy. A electric motor drives the front wheels and a 3 cylinder gasoline engine drives rear wheels. BMW's CEO Reithofer has increased spending on R&D so that it can meet the 30% of automobiles that have to be hybrids or electric vehicles by 2025 for BMW to meet higher European auto emissions standards. R&D spending was up 17% in 2012 to 9.2 billion euros, and capital spending up 42%.

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The Agnipath scheme for Indian Army, Navy and Air Force is explained here in The Indian Express. The scheme is for 45,000 to 50,000 people between about 18 and 21 years to be hired each year. These trainees will be kept for 4 years, and only 25% of those in training will be selected to continue for another 15 years. The recruits will receive between Rs 30,000 and 40,000 a month. 30% of this will be retained for benefits trainees will receive.  The idea behind it is to lower the average of soldiers in the armed services from 32 years to 26 years to reflect India's youthful population and to help those returning to the job market to find jobs in business or as entrepreneurs starting new business with government help. The experience gained in the armed services is seen as also becoming attractive to businesses that are hiring good disciplined employees. The circulation of people joining the services also makes the army a leaner force of about 1.3 million and keeps the cost of pensions at reasonable levels. With India's rapid growth in coming years the trainees leaving after 4 years will have better job opportunities and can contribute to the economic development of the country in many ways. Upon leaving the armed services the trainees will get about Rs. 1.2 million as a package to make a new start in the economy. If there was a death then Rs 1 crore would be given by the government. The government will offer skill certificates and bridge courses so that the quality of trainees remains high and this would provide a skilled workforce for the economy during a period of high growth. A modern armed services like that of India constantly being filled with next generation technology should be able to offer these new recruits the skills and training in advanced electronics, computers, and other technical fields with field training to supplement courses, and the motivation to excel, that would be valuable to many companies. This is the idea behind Agnipath. It is also a tested path as the US armed services also provides this kind of training and many people who have joined and left the US armed services have performed at high levels in American companies in technical and managerial positions. Another feature is "All India All Class" which will make it open to all caste, all region, all religion, and free up the armed services from the current situation of regiments having a caste and region bias. This is a constructive and well thought through aspect of the plan. ...

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Response to question whether this $100 a barrel oil is possible is yes, if something big happens in the oil flows from middle east or if there is a Katrina style hurricane. Reason being that oil demand has not slackened up either from Asia or from the U.S. automobiles. How would this impact the USA, Europe, Asia? The impact on Japan and Europe would be less because of the high efficiency in use energy use. This could slowdown the U.S. economy considerably as gasoline approaches $5 a barrel. India would be hurt with a drop in GDP growth from 8% to 6% according to an estimate by Crisil, Mumbai. It would affect Chinese growth also but the main impact would be indirect through a decline in the U.S. market for Chinese made products. Russia would gain and economic growth there could accelerate further from 6% to 9% according to estimate by MDM Bank, Moscow.

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Having Powell at the Fed at this time is a major asset for the US economy as he tries to navigate the tariffs situation in 2025. Powell is widely credited with tackling inflation and the supply chain shock following the pandemic that led to surging inflation. Powell has said that the DJT tariffs have come from other nations not allowing a level playing field by subsidizing their industries and giving unfair advantage to their companies, DJT has justified tariffs action as limited to ensuring a level playing field, calling reciprocal as limiting tariffs to what the other nation charges the US, a way of saying this is based on fairness principle in trade and business.

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The European Union's trade relations with China, and the trade and industry relationship between Germany and China built during the Merkel years is a part of the overall trade setup of the Free World that is likely to be questioned by Habeck, Baerbock of the Greens and chancellor Scholz after Mr. Biden's launch of the IPEF economic alliance for Asia. During her period in office Merkel also built the German trade relationship with Russia leading to Germany being dependent on Russia for 51% of its oil and natural gas supplies. The German dependence on Russia for energy is now being reversed by the efforts of Economy Minister Habeck of the Greens party in the Scholz coalition. The supply chain renewal and redesign by president Biden is likely to be followed by Germany and France and the EU. With it more investments will be shifted back to the US and the EU and allies in Asia such as India that offer a large pool of well trained workers similar to China's. In this sense the IPEF arrangement will be repeated in European Union's new relationships with Asia under the Greens SPD German coalition's leadership. ...

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As George Osborne of the Tories once pointed out China does not want to be thought of as a sweat shop on the Pearl River. And particularly not in a British attitude. How hard does China work is a question Tom Phillips tried to answer Oct 6, 2015 from Beijing for The Guardian. The migrant workers are the ones who work the hardest. And productivity is low. Among the higher classes there are longer hours with the work pressures, family obligations and long work hours leading to insomnia, fatigue, obesity, and ill health conditions. A comparison shows Britons working 1677 hours on average according to the OECD. The average Chinese worker is shown to work 2000 hours, by a researcher at Beijing Normal University. A labor economist in Beijing says as the economy improves and working conditions get better workers are working fewer hours every year. He says China lags behind in productivity. The longer working hours he says are not good for worker's health and for productivity. This was said in 2015 when China was still chasing GDP growth without the level of technology the US and Europe had. Now the focus has shifted to better quality growth in advanced technologies and old factories closed. ...

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Senior Republicans Wicker and McConnell both push for the putting pieces of the defense puzzle in place so that American can offer leadership to the world in the 21st century. Biden has put pieces of the puzzle on the economic front, these are the pieces in defense and security. On D-Day 80 senior Republican leader Mitch McConnell cautions against the lethargy of so called left parties and the isolationist tendencies of so called right parties. He says America should put preparedness first, that the better part of valor is to build credible defenses before they are necessary so that American leadership is not doubted further as it has been before. He commends the plan put forward by Roger Wicker in the US Congress Senate Armed Services Committee. The plan calls for raising defense spending to about 5% from 2.9% now over 5-7 years, with $55 billion more in 2025. Wicker says the military has a backlog of $180 billion just for maintenance. For the Navy 357 new ships by 2035, for the Air Force 340 additional fighters. This in light of China's additions and in light of the Russian economy being put into a position for a long term conflict with NATO over Ukraine.  ...

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NYT says DJT would use tariffs "as a economic sledgehammer to nations that refuse to meet his demands" and claims not to know what they are. Saying further that DJT has been far less clear about what those demands were. NYT has clearly not followed what DJT has said time and again. It is OK to use economic power when Canada and Mexico, and China have not taken the action they could have taken a long time back that they are now taking, and will take, after years of acting as if they could not see the fentanyl flows across its borders destroying America. These countries two land neighbors of the US and the last a country which from the open door policy against European colonial Empires and through the Joe Stillwell years in the War against Japanese colonialism in China, and in the years of China's building its economy in the 1990-2010 period, offered a helping hand. It makes the victim -and one that had reversed TR's advice about carrying big stick and speaking softly to its bitter regret- the bully, in the words of the NYT.   ...

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The SEC requirement that companies disclose the ratio between median worker pay and the pay of senior executives. The SEC says it is putting out the rule as part of implementing Dodd-Frank legislation to control excessive executive pay. Companies will be allowed to survey a fraction of their workforce as appropriate for companies with global operations. Executive pay will include pension benefits and stock options under the new rule. A WSJ chart using information from the University of Southern California and the Bureau of Labor Statistics, shows the ratio between what CEO's on average make and rank and file workers make remained at about 30 times in the post war period till about 1970, a period of rapid growth in the U.S. economy. By 1980 this climbed to about 60 times and exceeded 100 times by 1990. The period of stratospheric growth for CEO pay and extreme widening of the gap then occurs between 1990 and 2000. By 2000 the dot com boom- telecom boom and the internet- creates a surge in executive pay reaching over 500 times. This drops to about 280 times in 2008 and picks up again to reach about 320 times in 2011. Many of the poor business practices, the excessive leveraging and risktaking in the financial industry, take place against this background of excessive pay for senior executives. Some of that risk was passed on to others through such methods as securitization in the period leading to the 2008 financial crisis, so that executives were compensated with higher pay for taking excessive risk that they personally or their companies did not assume. Dodd-Frank legislation following the 2008 financial crisis sought to correct this imbalance by having pay information disclosed. The excessive pay has also coincided with an increase in the frequency of boom-bust cycles in the economy. The busts prompted the needs for intervention by the U.S. central bank, the Federal Reserve, to drop interest rates more than would otherwise have happened during this decade, culminating in the huge bond purchases and monetary easing by the Bernanke Fed. The SEC under Mary Jo White is mindful of these distortions in the economy as a result of misallocation of resources based on excessive executive pay, and the need to take action before the next crisis. ...

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Glenn Hubbard says a Romney economic plan for the U.S. with tax cuts and spending restraint and reducing uncertainties over policymaking will increase GDP growth by 0.5 to 1% per year over the next 10 years. It would set the U.S. on the path to solid economic recovery by getting the private sector to generate 200,000 to 300,000 new jobs per month during Romney's first term in office. Hubbard is dean of the Columbia University Business School in New York, and economy advisor to Romney. A study by Scott Baker and Nicholas Bloom of Stanford University and Steven Davis of the University of Chicago shows that uncertainty over policy under the Obama administration reduced GDP by 1.4% in 2011, and returning to pre-crisis levels of uncertainty would increase jobs by 2.3 million in 18 months. See the Reagan memo and the interview with George Shultz, economic advisor to former President Reagan. The Shultz-Hubbard approach puts great emphasis on reducing uncertainty for business and creating the right climate for business to invest in a recovery. In this way its distinctly different from the approach of the Obama administration....

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Samuelson warns that turning seniors into a protected class making no sacrifices whatsoever, will mean shrinking all other social programs, defense and investments in education and infrastructure. This is the reality of the budget deficits facing the U.S. He cites the Congressional Budget Office projections that even with cutting defense and non defense discretionary spending by a third, the U.S. risks a deficit in 2023 of about 6.75% of the economy or gross domestic product (GDP). To cover this would require $1 trillion in higher taxes, an increase of a third above the 1970-2011 average. He says Democrats are using demagoguery and intimidation on this issue, and ironically even Paul Ryan's proposal reflects a desire not to touch seniors benefits and willingness to pass on the costs to the young to pay for these programs. Social Security and Medicare are a critical part of the American fabric, and no one wants to dismantle them, it is about modernizing them to reflect higher life expectancy and larger wealth accumulated by the elderly compared to previous generations, and to reduce the burden on the young. ...

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This editorial in the NYT points out that the new minimum wage proposed of $10.10 only provides 17 million working age people with about the same purchasing power that the minimum wage in 2013 dollars of $9.40 did in 1968. It also shows how far behind working age people many with small children have fallen behind. The $8 for the minimum wage in New York is now about one third of the $21 average wage in the U.S. in 2014. At $10 it would be about half. Another 11 million Americans slightly above the $10 per hour wage would also see their incomes increase. Even with the increase the incomes would only be $21,000 a year for this group of Americans up from about $15,000, many who are disproportionately women of average 35 years of age struggling to make ends meet. For 5 years the U.S. has seen no increase in the federal minimum wage. 600 American economists have sent a letter to leaders in Congress calling for the change without delay, saying that it would have a "stimulative effect on the economy" through higher consumer spending and spillover effects in jobs created by stimulating demand....

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It is not clear how China's president Jinping's support for the idea of "China Dream," -of China as a world power on a level with the U.S.- should be interpreted. China will increase its defense budget and continue its efforts to be the dominant power in its region, even as the U.S. and Japan begin to build closer ties in the Pacific. Is it simply a new assertiveness for its rights in relation to territorial disputes with Japan, and a continuation of a policy of peaceful development of earlier leaders. The move could also be an effort to build close ties with the military as the new leadership of Jinping-Keqiang prepares to make major changes in the economy. A speech in Dec. 2012 to Communist party officials in Guangdong province by Jinping, on how the lack of unity with the military led to the collapse of the Soviet Union under Gorbachev, could throw light on the thinking. In a few days an old party was gone, as he put it. This also follows the Bo Xilai episode which involved contacts with the military and the risks of division in the military and political leadership....

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Ekrem Imamoglu, three time elected Mayor of Istanbul follows a career similar to that of Erdogan who became Mayor of Istanbul and was then elected prime minister in 2003, as the administration of the CHP party failed to manage the economy. A period of economic growth followed with increasing foreign investment and Erdogan was reelected till 2013 when he decided to run for president following the term limits for prime minister. At that time his rule had become increasingly authoritarian. He was elected with smaller majorities with no effective opposition leader ,and the Middle East in turmoil with ISIS and Syria's civil war. Erdogan fought a tough election against a civil servant candidate from CHP turning out the nationalist  and conservative vote.in 2020. By this time the economy was having high inflation and his popularity was down, and he won barely with 52% of the vote. By 2019 Ekrem Imamoglu, 47 years, emerged as a more effective opposition leader, winning election for Mayor of Istanbul. He won again in 2024 and is now emerging as an alternative to run the country. Erdogan is 71 years and the world around Turkey has changed with DJT in the US, and Russia- Ukraine peace talks, trade tariffs worldwide, and the investment climate completely different, inflation increasing to 39 percent, and no easy solutions to economic problems. Some of the conservative and small business vote is no longer assured for Erdogan as the economy and Turkey's situation in Europe has changed. ...

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The Public-Private Investment Program of the U.S. Treasury Department has not had a good start. With most banks passing the U.S.government's stress tests and raising $50 billion in the markets, PPIP which was intended to to help resolve the situation of all the toxic securites siting on the bank's books, has gone the way of all the prior efforts to solve this problem. Simply postponed this time hoping that the housing market recovers. With the Rogoff-Reinhardt study showing that it takes about 6 years or longer before housing recovers from such aserious crisis as this one, it would be 2012, before one sees an improvement. See the link to the Business Week analysis that shows housing markets in the USA having some aspect of normalcy in 2012. Yet even this analysis is using an optimistic scenario, because it assumes Moodys Economy.com estimates of economic growth for GDP of 4-5% in 2011- 2012. This assumes the consumer debt that has reached over 100% of GDP will be reversed quickly in 2010, and the the factory capacity utilization currently at 68% and expected to drop further in 2009- with more automobile manufacturing capacity remaining to be scrapped -will recover quickly in 2010-2011. This is unrealistic considering the combination of factors at work. Here Devin Leonard talks to PIMCO chief Bill Gross, who with Warren Buffett and PIMCO CEO Mohammed El-Erian, are key proponents of the PPIP program. Both El-Erian and Warren Buffett say they conceived independently of such a program, in which toxic securties are taken off bank's books with government help. As PIMCO is one of the largest traders of mortgage bonds in the country and has years of successful experience in dealing with mortgage bonds, the New York Fed under Geithner turned to PIMCO for advice in 2008. By this time PIMCO was under ownership of Allianz, a German insurer, which bought PIMCO for $3.3 billion in 2000, with $233 million and a $40 million retention bonus going to Bill Gross. Bill Gross describes how the program would function. PIMCO puts up $500 million, and Treasury matches this with $500 million. Analysts estimate that this partnership would be able to attract as much as $ 4 billion in low interest financing from Treasury and the Fed. Gross says that some of these securities pay as much as 14% interest, and even with a 70% default rate, this partnership could make $250 million a year on the $5 billion partnership, or a 5% return, with PIMCO making a 25% return on its original investment. This isn't exactly pro bono work as Buffett had originally suggested to Bill Gross in the midst of the crisis. But a more fundamental concern is that no one really knows exactly how much of toxic securties the banks have on their books, even though estimates have been made. If this is closer to $1 trillion, PIMCO's expertise and efforts will simply fall short of dealing with a problem of this size, and the window dressing of a problem of this magnitude could only hurt efforts for the eventual resolution of this problem. If housing does not recover as is expected till 2012 at the earliest, and the economy continues to deteriorate in unemployment and factory utilization, then the toxic securities on the bank's balance sheets may pose a bigger problem that will require serious action....

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A former Fed Governor sees the advantages of a dollar depreciation for US exports when the USA economy is facing severe adjustments in other areas, and reducing the trade deficit as a bright spot in the generally poor economic situation. The dooar may be sacred but no particular exchange rate is, is the tone of his views.

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Rates are falling all over Europe and in other countries Not since 1039 have rates reached 2% in the UK, eurozone rates down to 2.5% and Sweden down to 2%. ANd the Fed in te Us where rates are down to 1% is looking at unconventional measures to stimulate the economy including buying out delinquent mortgages.