LyrArc Article Gist
The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...

LyrArc Article Gist
U.S. presidential candidate Romney's plan to limit deductions to $25,000 leaves the taxes deductions of middle and lower income earners intact and hits high income earners with large deductions hardest.

LyrArc Article Gist
Britain's 2013 budget provides some benefits to home buyers. Chancellor of the Exchequer Osborne says the Bank of England will have more leeway with its inflation target to aid economic growth. Britain's Office of Budget Responsibility says growth will be down to 0.6% in 2013, and 1.8% in 2014. This is a result of weak exports to the eurozone and decline in consumer spending. The government now expects to borrow 240 billion pounds more than forecast for the 5 year period ending April 2016, as a result of the weaker economy. Debt as a percentage of GDP will not decline by 2015 as planned earlier, it will be 2018 before this happens. Osborne said: the plan "is taking longer than anyone hoped. But we must hold to the right track."

LyrArc Article Gist
Just one scheme by a Dallas doctor, Dr. Jacques Roy, cost Medicare $350 million over 5 years. HHS data analysis showed Dr. Roy approved 500 times the number of patients normally approved per physician for home health care services- he approved 5000 instead of 100. A case in 2011 resulted in charges against 115 doctors, nurses and company managers, in 9 cities leading to $240 million in false billings.

LyrArc Article Gist
The Republican House health care bill AHCA  keeps some some of the more popular parts of the Affordable Care Act such as not taking pre-existing conditions to deny insurance, keeping children covered on parents insurance till age 26, and increase contributions to Health Savings accounts. It is different in that the expansion of Medicaid at 138% of poverty rate threshold is rolled back. Age is used for tax credits instead of income, hitting those approaching Medicare age harder. The maximum charged to older people is now set at  5 times compared to 3 times what young have to pay. In general the Republican bill is seen as targeting the elderly to keep premiums down. The elderly on low incomes are hit hardest. Fox News O'Reilly Show showed the host questioning House Republicans, citing the CBO estimates that elderly on low incomes may have to pay as much as $14,000 a year for insurance making it basically unaffordable, and 52 million Americans would be affected adversely. Large companies are no longer required to offer mandatory health insurance under the new bill. Conservatives from Freedom Caucus wanted to see the essential areas of benefits covered by the law limited to fewer than the ten areas in the Affordable Care Act. The ACHA Republican bill leaves to states to determine what are required essential benefits. At one point maternity benefits were to be dropped but this was changed to let states decide. As a result the bill is 33 votes short of the number needed for passing the house in March 2017.   Neither the Democrats Affordable Care Act or the Republican House bill of Speaker Ryan do much to tackle the real problem- the absolute amount and increases for health care dollars for treating each disease in the U.S. compared to European and other countries. As a result health care has become more of a partisan struggle between the two parties than a real effort by all to overcome the problems that have to be tackled. Republicans want to see premiums drop and keep the burden on the deficit down- but with the level of U.S. health care costs disproportionately high compared to Europe and the rest of the world the arithmetic is tough and ends up leaving out vulnerable groups such as the elderly on low incomes, thus making the whole proposition prone to fail. For the same reason the Democrats failed to keep premiums down with a wider safety net leading to calls for repeal of their version.   ...

LyrArc Article Gist
No country benefited more than first Japan and then South Korea till 2000, and now China till 2022 from the trade and sharing of industrial technology enabled by the American backed system of trade and industry. Walter Russell Mead says in WSJ that China has chosen to challenge the system through which it developed into an industrialized nation with the US running huge trade deficits, sharing its technology and letting Chinese manufacturing displace American local manufacturing. China is seen as challenging the system. Yet what has happened is that this process of displacing American manufacturing and industry was not sustainable anyway and continued for a decade longer than it would otherwise have lasted because American industry could not easily reverse a course it had set of setting up manufacturing in China, once that manufacturing base had already been transferred from the US to China and American companies had grown accustomed to a new state of affairs of making overseas in China. Not much thought was given to how American workers would react to that situation as companies and industries making that transfer made independent decisions. This led to the election of Trump with wins in midwestern states that had suffered from loss of manufacturing communities.  The Trump tariffs on Chinese goods and the Biden administration lining up completely behind American workers and families for the first time for Democrats has sent the signal to China that it finds the situation of China's dominance in the trade system unacceptable. The document of "China 2030" of the Chinese Government with planned dominance in key sectors and industries was met with alarm across America in all parties. The paradox of Apple as a key sector in Chinese manufacturing and the largest American company is the result of policies pursued by America without realizing the true cost of shipping manufacturing out of the country. That process is now being reversed with change of management starting at Intel Corp. and other companies to bring the manufacturing base back to the US. This policy is being resolutely pursued by the US and will speed up following the pandemic which has further demonstrated how much of a mistake the policy of sending out manufacturing in critical areas such as health could be. This is the reality behind the rhetoric and verbal exchange between China and the US. With the rapid growth of Chinese manufacturing countries such as India were put in a difficult situation  as this was preventing the local industrial base developing in India with Chinese imports in the same way as it had damaged that of the US and the EU. Worse it led to the use of US and European technology in China's defense industrial base including aviation and other sectors that threatened India's borders with repeated Chinese incursions in the Himalayas, from the Pakistan western Himalayas to Ladakh and the eastern Himalayan mountains. That situation existed long before the Trump and Biden administration and the Modi administration called for a return to America of its industrial manufacturing base and its technological leadership. Both the Bush and Obama administrations and the Indian Congress administrations failed to realize the dangers of letting the US, European and Indian industrial base wither. India is not just a country but a culture that extends from the Himalayas all the way across Bangladesh to the Indonesian islands which shares a common cultural history of Buddhism and the Vedanta. This is a region that has a population of about 2 billion people. In a larger sense the cultural history extends to  Vietnam and Japan with its Buddhist culture whose origins go back to India, and also of China itself. In the larger sense this is a population of close to 3 billion people. The economic development of this region and learning from the parliamentary traditions and scientific discoveries of the modern period since 1700 is a task for both the US, Europe and the people of the region.   ...

LyrArc Article Gist
Krugman points out that a centrist solution is not the panacea it sounds. A lot depends on what it is and what is seen as centrist, if it really is centrist, and if it makes sense. A centrist proposal that leaves out tax expenditures but is different from the positions staked out by the factions on both sides of the political spectrum, and sounds moderate may not be the right solution.

LyrArc Article Gist
The IMF report on Italy in July 2012 says Italy faces another year of recession. Debt as a percentage of GDP is expected to reach 126% in 2013. One bright spot is that Italy is expected to post a primary surplus by 2013- that is government revenues will cover promised services, excluding interest payments on oustanding bonds of $2 trillion. Because of the recession small shocks could change the outlook says the IMF, and it emphasized the importance of the changes being made to the labor market and for improving competitiveness. These changes need to be implemented early because of elections expected in spring 2013. A key concern is borrowing rates which are near 7% for Italy and Spain. The European Stability Mechanism, the rescue fund, was authorized to make purchases of Italian and Spanish bonds in the June 2012 summit. The ESM becomes operational in the summer of 2012, after the German Constitutional Court makes its ruling about it being legal and after ratification by national governments....

LyrArc Article Gist
Protests over efforts to change laws for public workers collective bargaining rights in Wisconsin.

LyrArc Article Gist
Simpson and Bowles travel around the U.S. to sell their plan for U.S. debt reduction. Bowles is the numbers guy and Simpson adds color and conviction to the conversation. The duo is famously bipartisan. Bowles a chief of staff to a Democratic party president, former U.S. president Clinton. Alan Simpson, is a former senior Republican senator from Wyoming. Both are highly committed to the cause and highly regarded.

LyrArc Article Gist
Erlanger and Castle look at the reasons given for the resounding defeat of the Labor party in 2016 British elections. Mr. Blair's view is that Labor as a traditional left wing party going against a right wing party produces a traditional result, reflects the Thatcher years when Britain was looking for a new way forward after the previous Labor governments and state involvement in the economy. More forces were at work in this election, say experts. Peter Mandelson of the Labor party and Bloomberg Editor-in-Chief Micklethwait, say other forces are at work, with Scottish nationalism depriving Labor of a core constituency it had relied on, with 40 seats in the 2010 elections going down to 1 in 2015 general election. English nationalism meant the only gains for Labor in England came from Liberal Democrats not from Conservatives. Cameron appealed to Englsih voters that a Labor left oriented government in alliance with the Scottish National Party, which is more to the left than Labor, would be bad for England. Other commentators have suggested that liberal economics of the type espoused by Blair and Gordon Brown had failed to reduce inequality or improve living standards of working class people, led Britain into the 2008-2009 financial crisis, and lost credibility. Globalization, the decline of heavy industry in Scotland, and other changes in the global economy have also changed the playing field. The Conservatives showed flexibility in relaxing deficit rules after 2012, and were intent on protecting the National Health Service, giving their campaign theme about putting Britain on the right path to economic recovery more credibility. Other issues such as immigration also played out against Labor, hurting labor more than the Conservatives, with the defeat of Labor's Ed Balls in Leeds attributed to the increased votes going to the UK Independence Party from working class and centrist voters. In the end Labor received only 30.1% of the popular vote. ...

LyrArc Article Gist
On the negative side Japan has public debt that is about twice the size if its $5 trillion economy. In the USA government debt is up to 98% of GDP.On the positive side only 10% of it is owed to foreigners compared to 46% of it for the USA. Japan is also rich in personal savings and assets. Over half of government bonds are held by the public sector and the rest are with long term investors like banks and pension funds and insurance companies. So any sudden sell off of bonds is very unlikely.

LyrArc Article Gist
Brooks takes a different view about the 1986 Reagan tax reforms providing a way forward in 2013. He says growth is slower now in the U.S. with changes in the global economy and any growth killing tax increases or disincentives for investment are risky changes. He suggests taxing consumption and providing incentives for savings and investment. Closing loopholes will have to tackle the major deductions such as charitable deductions says Brooks.