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President Goodluck Jonathan as "Mr. Clean" aroused many of the same hopes now aroused by the election of Buhari as president of Nigeria. Under Goodluck Jonathan Nigeria's foreign reserves declined from $50 billion to $33 billion, and there is $1 billion in the sovereign wealth fund. About $20 billion in pilfering of state funds was reported by the Central Bank of Nigeria, but no action was taken by Jonathan. Indians may pride themselves on a better performance, yet prime minister Singh of India, seen as "Mr. Clean," allowed auctioning of telecom licenses in the second term, that had to be cancelled because of corruption. Throughout emerging markets not just in oil producing countries, poverty remains entrenched, because funds that should go into infrastructure and services are misused, which creates a disincentive for foreign investment, further adding to the problems in these countries. India and Nigeria are the two fastest growing countries in the planet, and the unspoken fear is that the demographic dividend with so many young people will be wasted by corrupt and inefficient management of the economy and resources of the two countries. The time lost in the last years of the Singh administration and the four years of the Jonathan administration will never be regained, the hopes of millions of young people are dashed again and again, and the goodwill of Europe and the U.S. eager to participate with the latest technologies in the development of the two countries, as they have done in China, is wasted....

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Simon Johnson, is Professor at MIT's Sloan School, senior fellow at the Peterson Institute of International Economics, co-founder of BaselineScenario.com a widely cited site on the global economy, and is a member of the Congressional Budget Office's Panel of Economic Advisors. Here he talks to the WSJ's Deal Journal reporters. He says the stress test don't mean much because the government using a milder scenario, made the banks look better than they really are. He suggests a wait-and-see strategy, as banks have 1 month to file plans on how they will raise needed capital and 6 months to do it. He sees a steeper yield curve on Treasury debt as a result, with long term Treasury securities like 20 year Treasury notes yielding higher than short duration securities, which should stimulate long term lending. Expect banks to issue more bonds than stocks which dilute shareholders value, and as bond prices are low. Johnson sees real risks of inflation in 1-2 years, becaue of the way the government has inflated the economy, in a manner he says like the private sector bubble. Expect the government to cut back to prevent this from happening. He also sees pretty good earnings in the financial sector in the second quarter which should help stocks. The question remains about how sustainable all this will be, because he says " the government by oversubsidizing the financial sector will get us stuck in the same kind of financial bubble that got us into the mess in the first place." ...

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Serious questions about the future of the car industry and investment in fuel efficient cars as a long term viable alternative, regardless of the specific price at the pump that reflects changing economic weakness in a global economy. Decisions that Obama will have to make in steering the auto industry in a new direction. Management and culture at the car companies remains as ever a big issue and this also will come up because fuel efficiency and making money on small cars and building the cars that the public wants and would pay good prices for, are a result of the resolve, skill and perseverance of management. The only thing that one can say for current management at GM and Chrysler is that it is entrenched and with the same culture that does things the way they have always been. It also lacks the vision and skills to make the changes to get Americans to buy more cars and small cars at prices where they are profitable to car companies. As it reminds us here for all the talk about fuel efficiency and cars, light trucks madeup 58% of GM's sales through November, 64% for Ford, and 72% for Chrysler. The market is bad for all car companies including Toyota and Honda, but things are much worse for the Big Three because of the way in which their sales are way skewed in the direction of SUV's and light trucks and the absence of winning models in the medium and small car segment that command good prices....

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A big factor in U.S. car sales, which reached 7.5 million in 2015, exceeding the 7.3 million in 2000, is that a large portion of cars on the road were about 11 years old following the recession in 2008-2009. As Dexter Ford pointed out in a article in 2012 many car owners on the road had replaced the earlier 100,000 mile mark before buying a new car, with 200,000. This pent up demand, and the better technological features including gasoline conserving technology, gave new impetus to demand in 2013-2015. Lower gasoline prices at the pump of about $2.00 a gallon in Jan. 2016 across parts of the country made it economical to own SUV's and pickup trucks. The U.S. car companies Ford, GM and Chrysler-Fiat had sales of 2 million full size pickup in 2015, with the Ford F-150 leading. Car companies have come through a severe crisis and are taking steps to avoid a repeat of the mistakes of the past on fuel efficiency- Ford has introduced a lighter aluminium based version of the F-150 for example. Gasoline prices also provide buyers with extra money to meet car payments which now have been stretched to longer periods and lower rates by auto companies to reduce the cost burden per month. AAA says the average price in 2013 for a gallon of gas was $3.49, in 2014 at $3.34, in 2015 at $2.40. AAA says that 71% of gasoline stations sell gas at less than $2.00 in January 2016, and gas prices are likely to remain low for an extended period with lower demand from China, higher fuel efficiency going forward with stricter standards, new technology for shale oil production, and the replacement of cartel pricing by competing production from Saudis, Iran and Russia. On average Americans saved $115 billion on gasoline, or $550 per licensed driver, according to AAA's Daily Fuel Gauge Report of January 6, 2016. In addition to the $550 saved the higher fuel efficiency with new technology adds a corresponding amount to savings per driver. Add to this the lower payment at low rates over longer periods and the car payment per month has been reduced significantly in a improving job market, to support car sales....

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Infosys CEO Vishal Sikka resigned saying he was responding to criticism which he called "a continuous drumbeat of distractions and negativity." The company's founders including Narayana Murthy had serious differences with the new CEO. Vishal Sikka was hired by the founders in 2014, bringing in an outsider for the first time in the company's history. Sikka worked for SAP before joining Infosys, and was in charge of innovation and development at SAP. Issues of concern to the founders including Murthy were the size of executive pay and the culture changes at the company under Sikka. A similar situation happened at the Tata Group when long time CEO Ratan Tata selected Cyrus Mistry to succeed him. Serious differences about the culture and the changes made by Mistry led to Ratan Tata moving to oust Mr. Mistry from the Tata Group. Narayana Murthy's response to Sikka's statement was that he was concerned "by the deteriorating standard of corporate governance at Infosys." Having an element of public service is part of the tradition at Infosys, and a focus simply on executive pay and shareholder returns to the exclusion of other values may have troubled the founders. In 2009 co-founder Nandan Nilekhani left Infosys to lead the Unique Identification Authority of India at the request of prime minister Manmohan Singh.  Both Ratan Tata and Narayana Murthy are leaders in the business community in India and may have misjudged in their selection of a successor, putting other factors ahead of tradition, governance and culture, leading to this separation in a short time of 2-3 years. This may become part of the broader debate about culture in Indian companies as the country modernizes and moves forward, what aspects from outside to adopt and what aspects of the culture of the founders that are valued to retain and preserve. In the case of Tata the culture goes back from Ratan Tata to legendary figures JRD Tata during the post independence period, and Jamshedji Tata under the British, and is taken seriously. Ratan Tata even considered joining the Quit India Movement during the British Raj , according to biographer R. M. Lala. ...

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In a new WSJ/NBC New poll, conducted July 24-27, 2009, 42% called the Obama health plan a bad idea, and 36% called it a good idea. In mid June the poll showed Americans evenly divided on this question. It reflects rising anxiety over the costs of the health plan and what it will do to the deficit, and also shows public anxiety about the ways in which Obama and Congress are reaching compromises to pay for it and to control costs. Added to this are the anxieties raised about government involvement in healthcare and medical decisions about care. Noteworthy are two differing pieces of evidence. In the WSJ/NBC News poll, only two in ten people thought the quality of their own care would improve, only 15% of those with private insurance thought that it would improve the quality of their care. And 4 in ten people thought quality of care would get worse, and 45% of those with private insurance thought quality of care would get worse. By focussing on the cost of health care, the administration seems to have ignored or missed the concerns of people about the quality of care if government focussed on cutting costs. These concerns are real as a vast majority of the public, or about 85% of the people, as Martin Feldstein points out in a recent Washington Post column, are insured. The question is what cost would they be willing to pay for the admittedly worthy cause of insuring the uninsured? And even with the unisured, it seems likely with the current Obama reform plan that immigrants and other people may still remain uninsured, at least for some time. Would a huge burden of $1 trillion make this worthwhile, and is there some better way to do this without the prospect of higher taxes further down the road to pay for this. These are points Feldstein makes. The other piece of evidence is that at the same time that there are reservations about what is coming out of Congress today, there is general support for making constructive changes to healthcare. The WSJ poll showed 56% of respondents favoring the basic ideas in the reforms being considered in Congress, with 38% opposing it....

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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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Peter Galbraith explaining the true reason for his firing by Eide and the UN Secretary General Moon. The statement announcing his dismissal to be accurate would have said that this was over differences whether the UN was going to remain silent over evidence of electoral fraud in the Afghan elections, and the issue of ghost polling stations. There is another angle of this which risks endangering the US trrops in the north of the country. Karzai's opponent in the elction is half Tajik and half Pashtun, fraud in the elections may turn the Tajik north against US and coaltion troops, further complicating life for the US, and this is on top of the loss of credibility with the Afghan people of the Karzai government. See the separate article on General Jones telling McChrystal who commands US forces in Afghnistan to cooperate with the strategic review now underway, by not making statements to the press. The other questions arise about the manner in which this dismissal ocurred. A few days before this Hillary Clinton, Eide, and other representatives from the coalition told the press that they think Karzai would win. Had Obama authorized this and what would be the point of such a statement, and at the same time trying to conduct an unbiased assessment of the war in Afghanistan. Here Galbraith comes across as one who had the courage to decide according to what he believed would be right for America and the values it represents. His point is that he could not tolerate the last act of dishonesty in the dispute that went on for months, because of the loss of credibility for the UN itself among the many Afghans who do not support Karzai. This would destroy also the credibility of the US in the country. Can any number of troops make up for this? Wars in Asia have proven that popular support decides the eventual fate of the mission. Only by standing up for its values can the US not undermine the very principles that the troops are fighting for and the people support. ...

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Obama is not going to shy away from developing a solution for the 12 million estimated illegal immigrants in the country, for some form of path to legal staus. The issue will be taken up this year. It does not have the same priorities as health care and energy and education, but as a human issue it will be addressed this year. The lives of people who are doing a lot of the work Americans normally do not want to do is entertwined with the economic crisis, as the lives of these immigrants are likely to be made even more difficult by this crisis. The idea is to give those who are here, and as it appears are likely to remain here, and their families, the opportunity to lead normal lives. Not see families broken or torn apart as a husband or wife has status and the other does not, or lives worsen for those who have done the menial and labor intensive jobs in factories, agriculture and in construction, that Americans born to parents from an earlier generation of immigrants do not wish to do because they have better opportunities. As it is an issue that has drawn opposition and aroused emotions, it will be tackled by framing it as "policy reform that controls immigration and makes it an orderly system." Rep. Gutierrez, who is from Chicago, is building support for the cause by speaking at churches around the country, and having church leaders speak at these meetings, in a movement that is reminiscent of the civil rights struggles for black people. Mr. Obama will speak publicly on the issue in May, in the summer he will convene working groups, including lawmakers from both sides and a range of immigration groups, to begin discussing possible legislation by early fall. The plan would not add new workers but normalize the living conditions of people already here, and who information shows are not returning home. Its also supported by a key and growing constituency in American politics, the Hispanic voters. It was a campaign promise that Obama intends to keep, and if successful only draws the Hispanic vote closer to Obama....

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Complacency from the Bush Administration reflected in the remarks of Edward Lazear the Chairman of the Council of Economic Advisors in the outgoing Bush administration. He sees no recession in the USA. "I would be very surprised if the NBER looking back at this period would date this as a recession" is what he is quoted as saying to reporters. He went on to say that the $152 billion stimulus of government checks mailed to the people, and Fed interest rate cuts should make the second half of the year a "solid growth period." What this means is that the moves by Congress to help homeowners stave off a new wave of foreclosures through a bill that just passed through Congress on May 7, 2008, is likely to be vetoed by Bush and efforts along the lines suggested by Martin Feldstein, Chairman of Council of Economic Advisors under Reagan, and Sheila Bair at FDIC, to help homeowners avoid foreclosure in her proposal may remain just that as proposals. This situation is likely to be turned over to a new President and make for an election that may revolve around economic issues, as the next wave of foreclosures lead to the start of a declining spiral in home prices leading to further loses in the credit markets and corporate bankruptcies of weaker firms and resulting losses in employment. Rising crude oil prices may result in much of the stimulus being eaten up by paying of some of the debt burden of consumers and rising costs of gasoline at the gas pump. And Feldstein has been very vocal, as have others, about the ineffectiveness of interest rate cuts in the current situation, even doing an oped piece titled "Enough of Interest Rate Cuts." In this sense the current spell of calm in the financial markets may be deceiving, giving Paulson an others in the administration a false sense of hope, and deprive the world economy of some reasonable action to prevent the wave of foreclosures and falling home prices that could set things distinctly downward in the world's largest economy and impacting the rest of the world....

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China's new national energy law in a draft stage. The government will retain control over pricing and to adjust prices in its national distribution network of oil and gas pipelines and the power grids. It will set up an Energy department under the State Council, China's cabinet, to to bring all energy sectors administration and policy into one place. It will handle China's strategic reserves of oil, natural gas and uranium, and decide on timing for their release.

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How will posterity view Angela Merkel. As she ends a fourth term this BBC News report says it will remain a contested legacy. Much of what went right has already been written. A woman, a pragmatic scientist who hewed to the center not just as a scientist but with a knack for politics. Much of her early period in office was one in which she had to tackle the eurozone crisis. The euro's weakness had its roots in the way Mr Kohl allowed eurozone membership for countries such as Greece without adequate entry requirements. Some of the other problems were also left behind by an overzealous mentor Helmut Kohl who pushed for German reunification that never really happened in terms of bringing all east Germans into the idea of the Federal Republic. These problems in a neglected eastern part of Germany around Dresden were never tackled by Merkel. They were social issues that Merkel's pragmatic thinking failed to grasp. Letting in migrants from Arab and African countries was a move that Merkel made without realizing the full implications. This policy was reversed but led to the emergence of extreme right wing sentiment in parts of the country. It is left to a future German leader to tackle the social and economic disparities that affect Germany today. As time passes people reflect and a more careful view prevails. Dr Rudiger Schmitt-Beck reflects this when he says that the Merkel years were about  a bizarre mix of modernization and backwardness. Merkel rejected nuclear energy after the events at Fukushima nuclear plant in Japan. As a scientist she was able to tackle such issues. Yet on the major social issues of the day Prof. Schmitt-Beck of the University of Mannheim, says she left Germany "grotesquely behind"- on child care, climate policy, digitization, infrastructure building, on demographic change. These are the issues that the Social Democrats and the Greens are standing up for today. Ironically Merkel may be remembered more for something that is not even mentioned in this BBC report. This is the European solidarity shown by action to financially support all EU countries including Italy with EU funding during the coronavirus pandemic.  This may be her biggest achievement because it will be lasting. Without it Europe would not be the better place it is today, resilient in the face of the pandemic.  Seen from outside Merkel will be seen as a German leader who failed to see the potential for India and other Asian countries with almost twice the population of China. Fascinated with 13 visits to China she studied Chinese history, politics and economics, says the WSJ. And did too little to balance Germany's close business and trade ties with China, with efforts in India and other countries. Seen from America as pointed out in the WSJ front page on September 23, Merkel made no effort to rebuild US relations with the Biden administration after the tumultuous period under presidents Obama with spying on her phone and with Mr. Trump over the EU's participation in NATO defense. She seemed resigned to a view that America had seen her best years, a belief that today does not exist anywhere in America. US president Biden's first phone call to Merkel was put off for a few days says the WSJ, and Merkel continued to build close ties with China, ignoring the fact that this was a new administration closer to that of presidents FDR and Harry Truman who did so much for Germany. And a president very different than any of Biden's five predecessors. ...

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McDonalds Russia opens under a new name and logo in Moscow. The chain was bought by a Siberian businessman Alexander Govor, who previously owned a McDonald's franchise in Siberia. The rebranded restaurant will keep the same menu, staff and standards. About 62,000 employees work for McDonald's and the company had local suppliers that employed tens of thousands of people. All of the restaurants will remain open and Mr. Govor plans to increase the number to 1000. This ensures employment for about somewhere in the range of 100,000 people in Russia and maintains a degree of normalcy in life for cities across Russia. McDonald's owned 84% of the restaurants a high number and this made the transfer of ownership easier. McDonald's has an option to buy back the chain in 15 years.  There is some symbolism in this as McDonald's had a line of 30,000 people in Pushkin Square during the first opening in Moscow in 1990 following the collapse of Communism. ...

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Mr. Andrew Bailey, the top financial regulator, chief executive of the Financial Conduct Authority, takes over as the next governor of the Bank of England. He has held several positions in the Bank of England including as head of a group that studied the global economy. He left in 2016 to head the FCA. The Bank of England last changed interest rates in August 2018, raising it to 0.75% from 0.5%. Uncertainties remain with Brexit even after the election victory of Boris Johnson because Brexit plans are to get it done including negotiations very quickly.  One change from before is that both the Bank of England and the government of Mr. Johnson are committed to keeping steady growth. The Bank supporting the economy and Mr. Johnson with plans to spend heavily on infrastructure, NHS and schools. It was this plan that helped Mr. Johnson win support across England. Previous Conservative governments reduced spending following the financial crisis of 2009 which happened under Labour administration of Mr. Brown following Mr. Blair. ...

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Glen Hubbard, who was Chairman of the Council of Economic Advisors under President George W. Bush and is now Dean of Columbia University Business School, Hal Scott professor of International Fiancial Systems at Harvard Law School, and Luigi Zingales professor of finance at the University of Chicago Booth School of Business, say a different plan of action is needed from what the Obama administration is doing to tackle the banking crisis. They are really skeptical about the the Public Private Investment Program and other plans put forth upto now for several reasons. First, in every case they say there is a lot of carrot but very little stick, and this won't work. TARP program was mostly carrot, with Treasury getting back securities worth $78 billion less than the $254 billion invested, as pointed out by the Congressional Oversight Panel.The FDIC's guarantee of short term debt was worth $100 billion just for the original nine TARP participating banks, and the mortgage related asset guarantees offered Citibank and Bank of America were worth tens of billions. They see anew round of TARP injections with the conversion of the government's preferred stock into equity after release of the stress test results. Then there is PPIP the Public Private Investment Program, and its plans to subsidize the purchase of bank's"toxic assets" by hedge funds and other investors. They estimate the government will spend $2 for every $1 the private sector puts up. And even with this subsidy their thinking is that the probability of succes is low for the same reason that has prevailed since the earlier efforts by Treasury Secretary Paulson- there is just too big a gap between the bid and ask prices on the toxic assets, and add to that the reluctance of investors to partner with the government. Its time for more stick say these experts as the problem of toxic assets, and of credit and lending in the economy, will hang like a large shadow over the economy, as long as these tough problems are not wrestled with. This is the Hubbard-Scott-Luigi Plan: 1) The FDIC should announce that its guarantees of short term debt set to expire in October will not be renewed. Insolvent banks, defined not by stress tests but as those that cannot fund themselves in the private market, will be taken over by the FDIC under aclear and credible action plan. 2) The FDIC lacks the resources to run several large and complex banks which may become insolvent. And waving the idea of nationalization the creditors may try to get the government to bail them out. The authors of this plan say the FDIC should solit each bank into a "bad bank" and a "good bank." The "bad bank" would carry all the residential and commercial real estate loans and securitized mortgages as assets, and all the long term debt as liabilities. THe "bad bank" would obtain along term laon from the good bank to fund the assets of the bad bank. Al the remaining assets including the derivative contracts and the loan to the bad bank would be assets of the good bank. It would also have all the insured deposits and the FDIC guaranteed short term debt as liabilities. With the split accomplished the good bank can be released from FDIC receivership. 3) The long term debt holders would be compensated by receiving all the equity of the good bank. The old shareholders would get the equity in the bad bank. And in any restructuring bondholders should do better than equity holders. If banks are not really insolvent as some say and just facing temporary dislocations, then the bad bank will eventually surge in value, and the equity holders will do alright, and if not they will receive nothing as they should. 4) For this to work legislation needs to take effect before October for FDIC procedures for handling failed banks to be also applicable to bank holding companies. And this new legislation puts no new cost on the taxpayer....

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US president Biden proposes to reduce the US deficit by $2 trillion by increasing taxes on American households worth more than $100 million that would apply to their earned income, and their unrealized gains on liquid assets like stocks. Biden also plans quadrupling the tax on stock buybacks by companies, a tax approved in the Inflation Reduction Act of 2021. The deficit in 2023 will be about $1.4 trillion and rise to about $2 trillion, so that Biden's plan is to practically eliminate the  large deficit if the Republicans come on board. Republicans prefer cuts in spending. US companies have engaged in a dramatic increase in stock buybacks in recent years leading to calls for increasing the tax on stock buybacks. Biden says even high income households will not see an increase in their taxes, only the wealthiest households with over $100 million who have benefited vastly through the Reagan type policies of the last two decades. These households with over $100 million in assets will not be affected in the same way as students, workers, and middle income households are affected in shouldering a large part of the burden of these Reagan type policies that did not adequately fund education, healthcare, and manufacturing in communities across America. This was a period when Democrats in Congress awed by Reagan type policies failed to vigorously oppose policy that increased the US deficit and burden on households for health costs by not allowing Medicare to negotiate prices with pharmaceutical companies. A senior AARP official says that when we talk about the Biden Inflation Reduction Act of 2021 the key component is the Medicare price negotiation with companies that is now law. Why Republicans and Democrats before Mr. Biden allowed such a gross distortion for two decades since 2001 that burdened ordinary  working Americans while neglecting American manufacturing, till Mr. Biden assumed the presidency, says much about the policies of the last two decades and how it has affected ordinary working families. Shriveling factory towns and creating much distress in these communities with these distortions that are a legacy of Reagan type laissez faire policies that government should do little. The result of these policies is that manufacturing is concentrated in only one country for the whole supply chain something that would never have happened with a thoughtful policy planning process. India and Vietnam are only today seen as alternatives for the supply chain in 2023 when policies were in place in these countries since 2014 for the supply chain to be distributed in a way that would be a win-win situation for all countries, avoiding the national security threats of today with overconcentration of manufacturing in China. This has not benefited China or the US because of the rancor and tension it has created. It was the fall of the Berlin Wall that created some of this awe for Reagan, when looking at it objectively it was nothing more than a course correction in Europe after the Hungarian revolution suppressed in 1956, Czech in 1968. It had little to do with what policies the US should pursue for workers and families, just as the war in Ukraine today remains another course correction in a different direction in Europe, and does not affect domestic policy in the US to build a better society for workers and families that Mr. Biden is doing. ...

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Russia invades Ukraine on multiple fronts, across Belarus, across its western border with Ukraine, on the pre dawn hours of February 24, 2022. Russian foreign minister Lavrov says "tense and detailed discussions" with US and NATO are still taking place. In talks with the US, president Putin of Russia had demanded that Ukraine commit to not joining NATO. The US insisted that this was upto Ukraine and that the territorial integrity of Ukraine had to be respected. Interventions by Macron of France and other leaders failed to bring the two sides closer. The US and Europe with a reluctant Germany looked at sanctions as a deterrent. This proved to be wrong. Mr. Putin has a passionate view of Ukraine and Kviv's historical role in the formation of the Russian state, evident in his televised address only 48 hours before the actual invasion. Ukraine has shifted between Poland and the Baltic states, Germany on one side and Russia on the other in its thousand year old history. The shift away from Bolsheviks and Communists under the Soviet Union after 1990 changed the relationship of Ukraine with its neighbors once again as Ukraine became closer to Poland and the Baltics, and Germany. Germany remains reluctant to revert to the relationship with Russia that led to 2 World Wars. During the leadership of Willy Brandt and successive German SPD leaders, as well as with Konrad Adenauer and CDU leaders, the goal was to build a good relationship with Russia. Merkel of the CDU went as far as accepting dependence on Russia for 40% of its gas supplies, after shifted out of nuclear energy and supporting a new Nordstream undersea pipeline for gas supplies.  The early reaction on DW.com and German television was one of shock as no one really expected that this would lead to a full scale invasion. Scholz of the SPD the new chancellor in 2022 was not active in forging anew consensus allowing NATO's Stoltenberg who is a former Norwegian prime minister 2005-2013 to frame the response of Europe. Norway's role in European security was marginal for most of the twentieth century. Other events had detracted from bringing active German and American participation in coming up with a framework of dialogue to address concerns of both sides and still build a common ground for peace- Afghanistan, the pandemic in its third year, China's deteriorating one sided trade relationship with America that hurt American workers and manufacturing. As a result China and Germany were essentially absent in building the framework for peace. Afghanistan hasty withdrawal made it harder for president Biden to come up with new approaches to build a common framework. President Macron made some faltering efforts on the fringes even as president Putin focused on the US response and its intentions with NATO on European soil, and declared that it was directly US Russia negotiations that needed to work. With this the whole framework of relations since the presidency of Reagan and the relations with Russia and China come to a close. And a new framework needs to be constructed that draws in India already or soon to be the most populous nation in the world, in an effort to build an enduring new framework. The voices of Eastern Europe need to be heard, yet balanced with the voices from India, China, Germany, Russia, and other countries in Asia, Latin America and Africa that are affected by world events. ...

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Comment by a former Tory leader, Sir Ian Duncan Smith, on negotiations with the European Union's Ursula Leyen, show how much the term sovereignty has become the word on which everything depends. Smith said on December 10 about the EU demands that Britain adhere to EU environmental and other rules after leaving the EU, "either Britain is sovereign, or it is not."  The word sovereign is discussed in this context in this Times analysis. The word comes from the old French word "sovereinete" during the period when the King's authority was being contested by feudal lords in 16th century France. The Oxford dictionary defines it as the authority of a state to govern itself, and to do this without outside interference. Tory leaders such as David Davis and others including Smith see this as meaning making your own laws. For the European Union to insist on its laws being primary and British law asked to conform with EU law making it secondary, would not only be outside interference, but also divided authority. Older French and British political philosophers Hobbes and Rousseau see this as divided authority. Even though the meaning has changed in modern times, the essential definition in the Oxford Dictionary remains undivided authority. Which is why these Tory leaders insist on the original definition as the right one. Behind the wrangling there is the sense among Leavers that Britain could do better in economic terms by setting its own direction, and doing business its way. How would a new economic power in India by 2030 affect Britain, would it create many more opportunities for Britain to grow because of its history and cultural ties. Could the relationship with the U.S. provide more opportunities for growth? What about French indifference and even disdain of Britain, does Britain have other options? Isn't the European Union merely a Franco-German alliance led politically by France and economically by Germany, and propelled by their three wars since 1871, with a bunch of European countries added in, and what has Britain got to do with it? Closer to the negotiations with Leyen there is also the question - isn't France trying to make certain with its demand that Britain not violate EU law, that Britain's ingenuity and free wheeling spirit outside the European Union does not let it grow faster than France? Where one gets Boris Johnson's immediate reply that Britain is better off not being stuck inside "EU's regulatory orbit."   At the other end of the world you have India with "Atman Nirbhar Bharat" calling for a self-reliant economy and taking the time for transitioning out of the trade relationship with China, at short term cost and long term advantage. Britain is closely watching India as it makes big strides in developing infrastructure, in renewable energy, and setting a bold vision for the future. Even France is mapping out a pathway to self-reliant economy as it looks at ways to bring production home after the pandemic. The pandemic has only reinforced the drive to be self-reliant. ...

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Questions about the every 5 years 20th Party Congress of the CCP or Chinese Communist Party, and the 2300 representatives attending from all parts of China are answered in this report in The Guardian.  Xi Jinping is expected to get a third term. To outsiders in US and Europe it is all about power in China, to insiders in China it is about China making it through the 100 years since the 1901 revolution and the tumult, the chaos of the first 100 years, and now a period of modernization and growing incomes,  the need to create jobs, tackle climate change, ensure a good future for the Chinese people. 2300 party members representing millions of party members in China attend the gathering. New appointments and retirements take place at this Congress. Of this there are 200 elite members of the Central Committee with voting rights. This central committee is responsible for electing a 25 member Politburo, of which the seven most senior persons are appointed to the Politburo Standing Committee. Xi Jinping is the General Secretary, the most senior position in this hierarchy. Age related retirements are at 68 years and a new Politburo standing committee is announced at each Congress. After the Bo Xilai effort to take power and take China in a new and unknown direction, and the gradual loss of the party's respect from corruption and abuses of power by local officials, Xi Jinping sensed problems in the future and conducted a anti-corruption campaign. Most of the system of government set up during the Deng and Jiang Zemin years after 1980 remains in place with Jinping calling for a revival of China, the next stage of modernization, under the banner of the CCP. The result of the anti-corruption campaign and a third term assumed by Xi including lifting of a term limit for heading the CCP, gives Xi Jinping an opportunity to shape the future for China as Deng did after 1980. Jinping in the manner of Deng sees the CCP as the organization that can continue the modernization and growth of China. The model set by Deng and Zemin of local autonomy for economy and centralized overall direction continues under Jinping who is General Secretary since 2012. China has made rapid growth during the period 2000-2022, but faces challenges of reorienting its economy away from dependence on a tight economic export oriented relationship with the US and EU, as supply chains are being shifted after the pandemic. This means more unemployment and need for careful economic planning and investment to create jobs in other sectors, and to meet the challenges of unequal distribution of wealth in China after hypergrowth that hurt China in some ways, and in the climate change effects of use of coal other fossil fuels. As focus of interest is on Jinping externally, within China it is these three challenges that must be uppermost in the minds of the 20th Congress members. Much of this stems from the tumult of the century that began with the 1901 revolution through Japanese invasion and upheavals in the 60's and 70's, leading to the rare period of stability and growth in the last 20 years. Jinping like Deng and Zemin has personal memories of the anguish of this period and the tumult, the chaos of the 20th century for China, and the yearning for stability with modernization.   ...

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How much of the rise in price of oil is from speculators? About 20%. How much money is chasing oil? About $85 billion or thereabouts. What is causing the volatility, price shock atmosphere? Losses in production in Venezuela after a strike, Nigerian production in a backward region (issues of redistribution of wealth and periodic violence), and Iraq (Sunni insurgency). And now the Iran standoff with the USA over nuclear proliferation. According to Cambridge Energy Research Associates, an energy consulting firm owned by IHS, Iraq is 900,000 barrels a day below its prewar output; Nigeria has shut 530,000 barrels a day; Venezuela is still 400,000 barrels below its prestrike production; and the Gulf of Mexico remains down by 330,000 barrels a day. In all, this amounts to more than two million barrels of disrupted oil, Cambridge Energy estimates. The impasse with Iran on nuclear proliferation is the latest factor in oil prices. One analyst says the hedge funds have come into this commodities market in a big way and are willing to take risks. Energy funds make up 5 percent of the global hedge fund business, with about $60 billion in assets, according to Peter C. Fusaro, principal at the Energy Hedge Fund Center, an online research community. The gains on the oil market have attracted a fresh class of investors: pension funds and mutual funds seeking to diversify their holdings. Their investments have been mostly channeled through a handful of commodity indexes, which have ballooned to $85 billion in a few years, according to Goldman Sachs. Goldman's index holds more than $55 billion, three times the amount in 2002....

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Elvira Nabiullina, head of Russia's central bank, is a think tank economist who was Economy minister before becoming chief economic advisor to Russian president Putin in 2012. She is one of the liberal economists in Russia who see the years of economic growth following ruble devaluation in 1998 as an example of how devaluation can actually help the economy. The devaluation lowers costs for manufacturing and agriculture, and is seen by some economists as having done more than oil price increases to help the Russian economy grow during president Putin's first term from 1999 to 2004. Nabiullina's position to support a free float after the sharp decline in the value of the ruble following the plunge in oil prices, is based on the need she sees to use the crisis to reduce Russian overdependence on imports. This policy had other advantages by reducing the need to tap Russia's foreign currency reserves to defend the ruble. Russia's gold and foreign currency reserves are at $385 billion. In Jan 2015 the central bank cut interest rates. A policy of increasing rates would trigger a sharper recesssion. Russia faces a unique situation in that the oil price decline and the decline in the value of the ruble occurred at about the same time of about 50%, so that the budget continues to be balanced. The number of rubles coming in from oil exports remains the same after the crisis. Nabiullina told Russia 24 television- "We have to live in a different zone, Russians should orient ourselves more toward our own sources of financing projects, and to give a chance to import substitution."...

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China's new foreign policy team under the Jinping-Keqiang administration. Foreign minister Yang Jiechi, becomes state councilor, and senior official on the team. The new foreign minister Wang Yi, was China's ambassador to Japan 2004-2007. The new ambassador to the U.S. is Cui Tiankai, a diplomat who graduated from the Johns Hopkins School of Advanced International Studies in the U.S. Cui was ambassador to Japan 2007-2009. Managing the China-Japan and China-U.S. relationships is critical for China because China depends on U.S. and Japanese companies for investment and new technology, for continued economic progress. The relationship has been affected by the territorial disputes with Japan in the East China Sea. Germany as an advanced technology manufacturer and commodity exporters Australia, Canada, Argentina and Brazil depend on the Chinese market for exports, creating an interwoven economic dynamic that is likely to be the dominant factor in relations. This is also the perception of Li Keqiang who told a press conference in Beijing that the competition with the U.S. has been overemphasized, that he "does not believe conflicts between great powers are inevitable." Foreign affairs remains subordinate to domestic policy and priorities in China, as China tackles the problem of reorienting its economy to give an important place to the private sector and consumers. Itself not an easy task, as prime minister Keqiang pointed out at his first press conference: "Talking the talk is not as good as walking the walk." One of Keqiang's main allies in this effort is Robert Zoellick, former president of the World Bank, who helped put together with China's DRC, the report "China: 2030," outlining these priorities....

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Paul Nuttall, a 39 year old history lecturer, takes over the leadership of the UK Independence Party, UKIP, from Nigel Farage. The Daily Telegraph cites a new analysis by the House of Commons that shows UKIP could replace Labor Party in 13 parliamentary seats if only one voter in fifty shifted to UKIP. Farage says UKIP inspired the Trump campaign in America. Nuttall in his acceptance speech said "I want to replace the Labor Party and make UKIP the patriotic voice of working people." Nuttall is seen as being the best bet for UKIP to retain its hold on former Labor supporters in traditional working class constituencies in the north of England.