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The discussion on whether it is feasible to achieve any significant cost savings as long as middle class consumers are not cost conscious about their employer provided health insurance. This would be so as long as their health insurance benefits are not taxed as income. America suffers from a particularly strong case of not minding the price increases imposed by the health care industry as long as its not out of pocket cost. But Obama seems stuck on his insistence that the middle class not take on any burden, that there be no middle class tax in the form of this tax on health care benefits. Critics say even FDR did this by having the middle class pay with payroll contributions for Medicare and Social Security. And even if the 5% of Americans who make more than $280,000 are taxed it will not generate by itself the money to pay for the $1 trillion cost of the plan, as the prospects of cost reduction are uncertain- especially when the basic nature of America's health care system are not changed, like the lack of cost consciousness of consumers of health care when its perceived to be free and employer provided....

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How companies like United Health are lobbying aggressively to shape the new helathcare legislation to their benefit. BW says the health insurers like United Health, Aetna and Wellpoint are already winning through clever and effective lobbying of Congress. Former Senator Tom Daschle works as aconsultant for United Health. Senator Conrad who has led aeffort to replace the public plan with nonprofit medical cooperatives, which would be a weaker competitive threat to insurers, is also influened by the insurers. United Health's CEO Helmsley and its person working with Congress on healthcare Simon Stevens met with Conrad on June 4. When lawmakers in Congress cite consulting group Lewin Group, that 88 million or 56% of those with employer provided coverage would desert private insurance for a government run program, they are quoting acompany owned by United Health. The Congressional Budget Ofice says these numbers are too high. United Health has used savy presentations on how to cut costs, and help Blue Dog and other Democrats articulate their positions, to gain influence in shaping the plan to their interests. United Health thus counts a lot with Matheson, and Mike Ross of Arkansas, who are prominent with the 52 Blue Dog Democrats. and with Senator Mark Warner of Virginia. And United Health put together an effective lobbbying group, even hiring the chief of staff of House Democratic leader Steny Hoyer. ...

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Average land prices in China in October 2011 are down 40% from the peak in Sept. 2009, when real estate companies purchased large amounts of land. This means large losses for companies that bought when prices peaked. When this happened in 2008 companies were rescued by the large Stimulus by the Chinese government. It is uncertain what will happen this time as a similiar Stimulus effort is not expected. Prices nationwide for residential land were down 8% in October from the prior year, and transaction volumes were down 37%, according to property firm Soufun. In October and November 2011, land auctions at a number of major cities in China failed, with either no bidders or low bids. According to CLSA property analysts, China Overseas Land & Investment Ltd. and Longfor Group have reduced prices of homes by 20% -25% for projects in Shanghai.

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An account of the education, influence, political and economic positions of sons, and grandsons of the Communist leaders under Mao-tse-tung from the 1940's and 1950's. This story by Jeremy Page covers Bo Yibo, a veteran Communist leader under Mao, his son Bo Xilai, party secretary in Chongqing, Politburo member and candidate for the Politburo standing committee in 2012, and his son Bo Guagua, a graduate student at Harvard's Kennedy School of Government. The salary for aminister is said to be 140,000 yuan or $22,000 a year. Yet because of the power and economic influence of the Communist party leaders and their offspring, and the state run economy, a great deal of wealth and influence is controlled by this group. In 2010 an internet account described the son of a former vice president buying a $32.4 million harbor-front mansion in Australia.

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Krugman points to the economic muddle that China is getting itself into. He says one way of looking at what is happening now with high inflation is that inflation is the market's way of undoing the currency manipulation that China has engaged in. By following aweak currency policy to protect export interests China has created an artificially high trade surplus. But this is now turning into a lose-lose proposition for both China and the US as market forces push wages and prices up, whittling away at any competitive advantage of China's weak currency policy. He says some estimates he has seen show that Chinese undervaluation could be gone in two or three years. Chinese consumers are asked to accept interest on savings limited to 2.75% and below inflation, with the spread designed to help banks earn their way out of bad loans made during the stimulus lending binge of 2009-2010. What is happening is a massive allocation of capital away from consumers to lending for state owned companies that have created overcapacity in many industries, and use part of this capital to engage in real estate speculation. Krugman says China may be on its way to some kind of crisis with collateral damage to the rest of the world as it is a major importer of commodities from Canada, Brazil, Argentina, Australia, and a major importer of high tech goods from Germany and the USA....

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Only by learning the lessons of "normal" trade with China, and accepting a feeling of "buyers remorse," says Senator Sherrod Brown of Ohio, will a better bilateral trade relationship with China evolve. He points out that every $1 billion of the trade deficit with China, has destroyed 13,000 net jobs, making the $226 billon deficit a tale of shuttered factories and devastated communities. He says China uses illegal subsidies and currency manipulation, and punitive steps are needed, not the moral suasion that the Obama administration keeps doing with no result. He says price manipulation keeps Chinese products 40% cheaper than comparable American made products. He wants the Senate to give tariff authority to the President, to impose tariffs on countries that manipulate their currency, when it convenes next month. Brown is the author of the book- Myths of Free Trade.

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France with about 6 million Muslims and a history of colonial rule in North African Arab countries (Algeria, Tunisia, Morocco, and other countries) faces a challenge of integrating Muslims into French society. Germany with a large population of Turkish origin also faces a similiar challenge. The attack on the satirical weekly Charlie Hebdo for poking fun at Islam, in a manner similiar to its satirical work on Catholicism, leads to the death of 12 journalists, a policeman and a policewoman. Erlanger and Bennhold describe the reaction of people in France. Peter Neumann, director of the International Center for the Study of Radicalization at King's College , London, says about anti-immigrant sentiment increasing in Europe to the point where it is uncoupling working class families from the elites in Europe and reaching into the mainstream of society.

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Migrant workers in China are not allowed to bring their children with them when they move to work in factories located in urban areas. This is the large price being paid for the rapid industrialization in China for 2 decades 1990-2010 by the 61 million children of migrant workers. Lixin Fan's documentary "Last Train Home" documents the life of children of migrant workers separated from their parents for long periods of time. Analysis from the All China Women's Federation shows 75% of the 61 million children left behind by migrant workers have parental visits once a year mostly during the national Spring holiday. 82% of these children want their parents to come back home and 42% say they have no one to talk to when they feel bad. A large proportion of the children are missing parental attention at the most sensitive age when they most need it- 38% left behind are ages 1-5, 32% ages 6-11.

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Harold Meyerson poses some difficult questions for those who like Mitt Romney say America's choice is between the merit based society Romney sees and the "European social democratic vision." In Romney's words- "a merit-based opportunity society- an American-style society- where people earn their rewards based on their education, their work, their willingness to take risks and their dreams." Meyerson cites several studies to show that European societies today are more dynamic on several measures of performance than America's. In intergenerational mobility he cites a Brookings Institution study by Julia Isaacs, that shows incomes are three times more likely to remain the same in America compared to Denmark, Norway and Finland, and one and a half times more frequently than in Germany. Another measure evident from Germany's experience is the degree of union-company-government cooperation to worker retraining, corporate boards that have representatives of workers and management, the "kurzarbeit" program of retaining employees to smooth out impact of cyclical swings in the economy on workers and companies, and worker's willingness to show restraint on wages especially because management wages are not way out of line as in America. Meyerson reminds readers that the U.S. had a more merit based society in terms of upward intergenerational mobility, distribution of rewards of work between workers in manufacturing and service sectors and management, educational mobility with the G.I. bill, in the first 30 years after the Second World War. In a separate article in the Washington Post on Jan. 5, 2012, David Ignatius poses questions about the effects of globalization in shrivelling the middle class. The access to lower wage manufacturing in China, India, Mexico, and other countries, and lowering of wages in the U.S. to be competitive, was part of globalization. The two tier wage structure in the U.S. automobile industry is one example, making middle class wages a thing of the past. Globalization opened up new markets for American companies. Yet many of the gains in employment were made in emerging markets, as the example of GM's expansion in China showed, with automobile manufacturing expansion inside China....

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Joe Nocera describes his personal situation which also reflects the situation of the average investor in his 401(K) for retirement - inexperience in handling the boom-bust cycles in the market and loss of savings, especially in the last two decades with sharp swings in the market. The Employee Benefit Research Institute statistics on savings of the average American are striking, dismal is the right word- only 22% of workers 55 or older have more than $250,000 set aside for retirement, and 60% have less than $100,000 in a retirement account. The average savings of an American near retirement are $100,000.

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Compared to the situation in 2008-2009 during the global financial crisis with the excess supply of labor, China in 2012 faces an excess in demand for labor. In 2009 about 20% of migrant workers were unemployed when the crisis hit, and wages dropped 10% for migrant workers, according to the Chinese Academy of Sciences and Stanford University. The situation three years later is one of tight labor markets and higer wages. A large stimulus in not only not needed today in the way it was in 2008-2009 as a way to maintain social stability, it would reduce the benefits of the anti-inflationary steps taken in 2011-2012, by putting more pressure on wages and prices. Manufacturing sector wages increased by 20.1% in 2011, according to China's statistics bureau. This may be why the Chinese government is taking measured steps to avoid creating more bad loans through indiscriminate lending, and being more selective in accelerating development projects in the pipeline. According to Hong Kong's new Chief Executive Officer China plans to have about 7% growth. This shift in approach would help China refocus on growth strategies recommended in the recent Development Reform Commission and World Bank Report on China....

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The new generation of Communist party leaders that takes over from Hu Jintao and Wen Biao. Chongqing region's party chief, Bo Xilai is one of the leaders expected to be part of the senior communist leadership, along with Li Keqiang as prime minister and Xi Jinping as president. Xi and Bo are sons of communist party veterans from the Long March. Chongqing was the main base of the Communist party in the 1930's and 1940's, as Mao and the communists fought the Nationalists and then the Japanese. Bo has suppressed the influence of Mafia elements in the region, and is campaigning for a place on the Politburo's Standing Committee with a call for a return to Maoist values of "conscientiousness." Chongqing's state companies are supporting a project launched by Bo in 2010 to build 800,0000 subsidized apartments in 3 years, with an investment of $18.5 billion. This comes as income and wealth gaps in the country are widening and housing is becoming increasingly unaffordable for ordinary wage earners....

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For senior executives of financial firms investing in August 2011- following weeks of extreme volatility in the U.S. stock market- is all about capital preservation. Executives interviewed here have moved all their money to high grade bonds and cash. This is happening even as the advisors of financial firms are telling the public to stay in the stock market for the long term, and even as many middle class investors have seen their savings shrink from the crash of 2008. It is the crash of 2008 that has made the executives interviewed here turn highly cautious.

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FactSet Research Systems shows that of 13,339 ratings of U.S. listed companies 96% were buy, hold or overweight. Only 4% were sell or underweight. Mike Mayo describes the difficulties he faced giving true ratings of banks that reflected loan and other problems- in over 2 decades as a bank analyst- in his book "Exile on Wall Street." A significant culture change is required, says Mayo, for the hundreds of analysts who do the ratings to perform their function of providing proper scrutiny of companies. The clout of banks in the American capitalism of today also works to the severe detriment of the economc system to perform the way it should. He says the U.S. should look to the Financial Services Authority in Britain for the kind of actions that are needed for the financial sector supervisory officials. He points out that the FSA fired many of its existing staff and looked for new talent, at the same time increasing the salaries and benefits so that regulatory supervisors were not looking for opportunities in the private sector....

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China's shift in emphasis from heavy manufacturing and the auto industry to other technologically advanced and less environmentally sensitive industries including new energy sources. The National Development Reform Commisson lists industries in 3 categories- encouraged, allowed, and restricted. The auto industry is now in the allowed or permitted category, and is no longer encouraged for the purposes of foreign investment and the granting of preferential tax or streamlined approval processes. Alternative energy cars, internet equipment and some service industries are moving to the encouraged category. The growth in the auto industry has slowed to about 3% in 2011 from 32% in 2010, with the change hitting the domestic Chinese brands the most. As a result more laws are expected to help technical know-how flow towards Chinese auto companies, according to IHS Automotive.