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New York Times Original article ›
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Julie Creswell and Graham Bowley look at the history of setting ratings for Greece at Moody's credit rating agency. Greece always had a history of problems with its credit standing including two defaults in its history. In 2004 Greece admitted to providing false statistics to enter the eurozone, saying that it had run deficits for each year since 1997. Before joining the eurozone Greece was assessed an interest rate of 15% on Greek bonds, after joining the eurozone borrowing rates dropped to 5%. Was such a large differential justified purely on the basis of the assumption that the eurozone would back Greece. Moody's held onto its A rating on Greek debt right upto December 2009, two years before the country faced certain default. Pierre Cailletau, Moody's head of sovereign debt ratings till the spring of 2010 admits that Moody's assessment was "mediocre" and that this is a very, very steep fall to see in a ratings- something had gone very, very wrong. The ratings agencies say bankers were selling the idea that the Greek growth story was real. This suggests bankers did not read Greece's financial history of defaults, did not understand the lessons of the recurring Latin American debt crises that countries such as Argentina could only absorb capital upto the point of productive capabilities. And the euro currency founders had left a weak gap - the perception through an implied guarantee that the whole eurozone would ante up the money for the failings of individual countries- into which bankers and Greece's political class rushed in. ...
Wall Street Journal Original article ›
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Rumsfeld talks in this interview about the conflict between the US State and Defense Departments about a post war Iraq that delayed decisions and gave time for the Iraqi insurgency to develop. Colin Powell at the State Department, and Condoleeza Rice as National Security Advisor, let Ian Bremmer continue for too long as the sole authority in Iraq operating from one of Hussein's palaces, giving the feeling of a foreign occupation force and fueling insurgency. Rumsfeld favored letting one of the Iraqi exiles provide interim leadership, wheras Powell felt the exiles did not have the legitimacy in Iraq that was needed. The result was indecision that left Bremmer in charge for too long. Asked why Rumsfeld did not fire Bremmer, he says Bremmer acted as the Presidential envoy. His criticism of Rice and Powell centers on their not letting the President decide by providing the options and the pros and the cons. He says the surge was more psychological in its impact and less significant than its made out to be, because the Anbar Awakening had already led Sunnis to move away from Al Quaeda. The insurgency came in stages, first with the Baathists and thugs from the old regime, then the foreign elements and Al Quaeda through Damascus, and then the Mohtada Sadr Shiites, it was not a single enemy or a single event. The memoir is not a defense of the Bush Presidency or decisions, but takes the kind of look at events that is reminiscent of Dean Acheson for the events of the Cold War under president Harry Truman....
Washington Post Original article ›
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Italy and Spain get Germany's chancellor Merkel to agree to direct recapitalization of eurozone banks by the European rescue fund instead of the government having to ask for rescue funds as happened for the $125 billion aid request from Spain. The condition is that a European banking regulator with wide powers to regulate eurozone banks has to be setup first. This means Spain will have to provide the initial funds to recapitalize its banks but can reduce the stress this places on its debt by letting the banks get aid directly from the European rescue fund later this year. This is one of the short term measures needed to restore market confidence. Italy pushed hard for the rescue fund to be allowed to buy Italian or Spanish bonds in the private markets to reduce the high yields on Spanish and Italian government bonds, which reached 7% for 10 year Spanish bonds in June 2012. Merkel agreed to this with fewer strings attached. These are the immediate short term measures which were very important for Spain and Italy. Through marathon 14 hour discussions described by Monti as "hard and tense," the Italian and Spanish governments stood firm on these short term measures, and at one point indicated their willingness to let the talks collapse if Germany did not agree. France's president Hollande stood by Italy and Spain in the negotiations. Other long term fixes such as a European authority for country fiscal policy review and a detailed road map were left for future meetings in October 2012....
New York Times Original article ›
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Koichi Hamada, a former professor of economcs at Yale University, is one of prime minister Abe's advisors for the policy called Abenomics. He says the increase in the consumption tax was never part of Abenomics. It was the legacy of the previous Democratic Party of Japan's policies and of prime minister Noda, who pushed for it in the last 2 years of his administration. Nikkei polls in 2011 showed 53% of the public opposed to the doubling of the consumption tax to 10% by 2015 proposed by Noda and passed in 2012. Ichiro Ozawa's group of legislators left the DPJ over this issue. The real force behind the push to double the tax was the Finance Ministry, which warned the Abe government that not increasing the tax would make Japan look fiscally irresponsible. The Finance Ministry appears to have lost sense of the timing and fiscal hawks in the LDP party had gone along with it. The deteriorating global economy in the third quarter has hurt Japanese exports, and the lack of wage increases coupled with the increase in the consumption tax to 8% from 5% made Japanese feel poorer, leading to conditions that exacerbated the situation. Recognizing this Yamamoto says Abe has called the snap election in Dec. 2014, after postponing the second increase in the consumption tax to 10% in 2015 which the Noda legislation set to the future date of 2017. He says Abe had to have the guts to take on the Finance Ministry for Abenomics to work....
Washington Post Original article ›
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Yanukovych, the president of Ukraine, is from the industrial eastern part of Ukraine centring on Donetsk. He is intensely disliked by the protesters in Ukraine and unpopular with the western part of the country which favors joining the European Union. Polls show 45% of the people support joining the EU, and only 14% joining Russia in a economic union. Yanukovych failed to bring the country together. The EU had called for the release of a former prime minister Ms. Tymoshenko in prison for the last 2 years, and Yanukovych's failure to do this worsened relations with Germany. The U.S. sees Yatsenuyk 39, a economist who served in the Tymoshenko administration as economy minister, as a person with the credibility in Ukraine and the experience to be part of a transition government. Figures who are popular with protesters but have no connections with previous governments include Vitali Klitschko, 42, a boxing champion, who has his own party Udar, meaning punch. Tymoshenko, was popular during the Orange Revolution in 2004, but her two terms as prime minister came under criticism for mismanagement. Parliament selected the prime minister under the 2004 constitution, and the protests focussed on consolidation of power under the president, including the appointment of the prime minister. As a first step parliament took on powers to appoint the prime minister on Feb. 21, 2014, freed Tymoshenko from prison, and set a date for elections in May 2014. Yanukovych fled Kiev and left for the eastern part of the country as parliament began the transition to a new government. ...
Washington Post Original article ›
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Nawaf Obaid, a fellow of the Belfer Center for Science and International Affairs at Harvard University's Kennedy School of Government, is also senior fellow at the King Faisal Center for Research and Islamic Studies. Here he describes the events leading to the Saudi turndown of a seat on the UN Security Council. The Saudi foreign policy establishment made this decision after several weeks of debate in Jeddah considering the U.S. and Russia's effort to make only a muted criticism of the use of chemical weapons in Syria in the Security Council; and the U.S. effort to have the British, French and Saudis give up on demands for firm language in a Security Council resolution on action to be taken against the use of chemical weapons. For the Saudis, says Obaid, better not taking a temporary seat on the UN Security Council, than to be left a docile member without its own voice and the voice of others in the international community being heard. Obaid also points out that this is the beginning of Saudi effort to exercize its own influence in the Middle East, as it faces three separate developments in 2013- the Iranian rapprochement with the West under new president Rouhani, the Arab Awakening and the new consciousness in the Middle East, the U.S. policy under president Obama of not taking leadership in the Middle East. This also comes as the Saudis parted ways with the Obama administration on the role of the military in Egypt, and has differences with Turkey and Quatar on support for Islamic groups in Egypt and Syria....
Wall Street Journal Original article ›
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China plans $29 billion of local bond sales (200 billion yuan) through the central government, to meet the needs of cash strapped local governments. Its proceeds would go to projects approved by Beijing, for airports, power plants and railroads. In earlier year local governments depended on land sales as abig source of money. China's tax system sends most revenue to the central government, while provincial and municpal governments are left to handle most of the spending on education and healtcare, which is why these needs may not be getting the funding they need. Land sales are now drying up as asource of money as the property market declines. This does not mean that the local governments are not indirectly taking on debt. Chinese law prohibits cities and provinces from taking on debt without Beijing's approval, but companies owned by local governments have borrowed heavily to fund public works projects. Shanghai Chengtou Corporation, a municipal government company that builds infrastructure has taken on 200 billion yuan in debt in 15 years. Economists say this kind of debt may be 20% of annual GDP, which added to the central government debt of 20% of GDP, would bring the combined debt to 40% of GDP. What this new effort does is make the taking on of new debt official and more transparent. The principle behind the earlier tight control of debt issued by local governments was to prevent local governments going overboard and the central government having to take responsibility, as happened in the 1990's in India, Mexico, Russia and in the USA....
Washington Post Original article ›
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On one hand the issue of the $165 million in bonuses going out to employees in the 370 person Financial Products Group, and oth the other the need to wind up the complex derivative contracts that are causing these huge losses at AIG. But are such huge payouts needed for these employees to do their job? Isn't this aprofessional responsibility of these employees? And AIG's retention-payment program was disclosed a year ago and the amount of the bonuses $400 million, says the Washington Post, had been widely reported. The company is set to pay according to the WPost $600 million in retention awards to about 4700 people throughout the global insurance units. WHat happens to the $600 million, as no opinion has been voiced on these upcoming payments. The whole idea of retention payment raises another question. Will the skills of these employees be needed in a long drawn out economic downturn spread over several years or longer. And will thefailure of such things as derivatives, and the tighter regulation, mean that they will play amuch smaller role in the future. And even in the insurance units will these skills draw a premium in a market where the supply of new talent is larger than the job market ? One expert has sugggested that even if some of them left, there would be younger people to replace them who might bring an even better set of qualifications, with amix of skills, caution and prudence. So is there something self-interested and spurious in the retention argument itself and shouldn't this bluff be called? ...
The New York Times Original article ›
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A open conversation with the NYT's Baker, Schmidt and Haberman by president Trump in mid July 2017. This conversation of the president with the NYT is remarkable for its frankness about people close to the president during the election campaign, particularly Jeff Sessions of Alabama. Sessions was the only leading Senator in Congress who supported Mr. Trump from the beginning. Southern states came out heavily for Mr. Trump as part of the traditional Republican base. Trump says of Sessions that had he known Sessions was going to recuse himself from the Russia investigation he would not have appointed Sessions as the new Attorney General. About Deputy Attorney General Rosenstein Trump says he should never have appointed Mueller as Special Counsel. The president also says Mueller should stay only with information related to Russia and not stray from that to delve into Trump's finances. During the election efforts were made to get Mr. Trump to disclose more about his finances as a real estate businessman- most of these efforts failed and not much is known about president Trump's finances. The president says he never said he would order the Justice Department to fire Mr. Mueller, yet he left open this possiblility, according to the NYT, as the president feels it has affected the first 6 months of the Trump presidency. This interview with president Trump was published on July 20, 2017, the day after an editorial in the WSJ by the Editorial Board of the Journal on July 19, 2017, calling for transparency from president Trump on the Russia investigation. This was an exceptional and powerful editorial by its editorial board telling president Trump that he must tell everything he knows now or face the risk of losing public confidence, and risk his presidency. It said that president Trump was wrong to think that his larger than life personality and social media role could insulate him from the effects of this lack of transparency. ...
The New York Times Original article ›
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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. ...
WSJ Original article ›
WSJ Original article ›
Original article ›
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This article in the New York Times makes an extraordinary report about Rod Rosenstein, U.S. Deputy Attorney General and his views on president Trump following Trump's firing of FBI Director Comey. New York Times says it has based its report on meetings in which Rosenstein participated with Justice Department and FBI officials. Mr. Rosenstein and Mr. Sessions, the Attorney General, attended a meeting at the White House last year with Mr. Trump in which he agreed to write the memo cited by Mr. Trump for firing Mr. Comey. Rod Rosenstein had no idea at the time that Mr. Trump would cite his memo, and felt afterwards that he had been used by Mr. Trump, according to this report in the NYT. Leading Democrats were very critical of Mr. Rosenstein for providing the memo that served as the basis for firing Mr. Comey. Mr. McCabe who succeeded Mr. Comey and others also left the Justice Department and the FBI, and the events of that time has created dissension in the FBI and the Justice Department, leading to the release of this information to the New York Times.  Mr. Rosenstein according to this report based on internal meetings with Justice Department officials, was concerned about the chaotic situation in the White House following the firing of Mr. Comey of the FBI. During this time it is reported here Mr. Rosenstein suggested recording of the president and invoking of the 25th Amendment. The 25th Amendment of the U.S. Constitution provides for removal of the President by the Vice President and cabinet officials on certain grounds such as when the president "is unable to discharge the powers and duties of his office." Mr. Andrew McCabe, who was head of FBI following Mr. Comey's firing was also fired, and he has memorialized his interactions with Mr. Rosenstein in memos that are now with the Mueller investigation.  Not everyone thinks this is a constructive step as a letter in the New York Times questions the wisdom of such a report leading to the departure of Mr. Rosenstein. Mr. Rosenstein is seen by some as defending the Mueller investigation into Russian interference in the U.S. presidential election. But even this may be overstated or in doubt as the criticism of Democrats leading to the the release of the report by the NYT on Rosenstein shows. Mr. Rosenstein says in response to the NYT report that he sees no need for invoking the 25th Amendment. ...
United States Department of State Original article ›
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Marco Rubio speaks for the US with profound convictions and long experience in the Florida legislature and the US Senate, and as akey member of the DJT administration. In his speech in Munich at the MSC he recalls his grandparents being from Piedmeont Sardinia in Italy and from Sevilla in Spain. He talks proudly of his Spanish and Italian heritage, of America founded by European settlers. For Europe this is a speech that shows America is profoundly part of Western Civilization that started in Europe. Here are some parts of the speech and Rubio's call for America and Europe to respond strongly to the mistakes in migration and deindustrialization that have hurt the people of Europe and America, with deeply felt negative consequences. "That infamous wall that had cleaved this nation into two came down, and with it an evil empire, and the East and West became one again.  But the euphoria of this triumph led us to a dangerous delusion:  that we had entered, quote, “the end of history;” that every nation would now be a liberal democracy; that the ties formed by trade and by commerce alone would now replace nationhood; that the rules-based global order – an overused term – would now replace the national interest; and that we would now live in a world without borders where everyone became a citizen of the world.  This was a foolish idea that ignored both human nature and it ignored the lessons of over 5,000 years of recorded human history.  And it has cost us dearly.  In this delusion, we embraced a dogmatic vision of free and unfettered trade, even as some nations protected their economies and subsidized their companies to systematically undercut ours – shuttering our plants, resulting in large parts of our societies being deindustrialized, shipping millions of working and middle-class jobs overseas, and handing control of our critical supply chains to both adversaries and rivals.  We increasingly outsourced our sovereignty to international institutions while many nations invested in massive welfare states at the cost of maintaining the ability to defend themselves.  This, even as other countries have invested in the most rapid military buildup in all of human history and have not hesitated to use hard power to pursue their own interests.  To appease a climate cult, we have imposed energy policies on ourselves that are impoverishing our people, even as our competitors exploit oil and coal and natural gas and anything else – not just to power their economies, but to use as leverage against our own.  And in a pursuit of a world without borders, we opened our doors to an unprecedented wave of mass migration that threatens the cohesion of our societies, the continuity of our culture, and the future of our people.  We made these mistakes together, and now, together, we owe it to our people to face those facts and to move forward, to rebuild.  Under President Trump, the United States of America will once again take on the task of renewal and restoration, driven by a vision of a future as proud, as sovereign, and as vital as our civilization’s past.  And while we are prepared, if necessary, to do this alone, it is our preference and it is our hope to do this together with you, our friends here in Europe.  For the United States and Europe, we belong together.  America was founded 250 years ago, but the roots began here on this continent long before.  The man who settled and built the nation of my birth arrived on our shores carrying the memories and the traditions and the Christian faith of their ancestors as a sacred inheritance, an unbreakable link between the old world and the new.  We are part of one civilization – Western civilization.  We are bound to one another by the deepest bonds that nations could share, forged by centuries of shared history, Christian faith, culture, heritage, language, ancestry, and the sacrifices our forefathers made together for the common civilization to which we have fallen heir. And so this is why we Americans may sometimes come off as a little direct and urgent in our counsel.  This is why President Trump demands seriousness and reciprocity from our friends here in Europe.  The reason why, my friends, is because we care deeply.  We care deeply about your future and ours.  And if at times we disagree, our disagreements come from our profound sense of concern about a Europe with which we are connected – not just economically, not just militarily.  We are connected spiritually and we are connected culturally.  We want Europe to be strong.  We believe that Europe must survive, because the two great wars of the last century serve for us as history’s constant reminder that ultimately, our destiny is and will always be intertwined with yours, because we know – (applause) – because we know that the fate of Europe will never be irrelevant to our own.  National security, which this conference is largely about, is not merely series of technical questions – how much we spend on defense or where, how we deploy it, these are important questions.  They are.  But they are not the fundamental one.  The fundamental question we must answer at the outset is what exactly are we defending, because armies do not fight for abstractions.  Armies fight for a people; armies fight for a nation.  Armies fight for a way of life.  And that is what we are defending: a great civilization that has every reason to be proud of its history, confident of its future, and aims to always be the master of its own economic and political destiny. It was here in Europe where the ideas that planted the seeds of liberty that changed the world were born.  It was here in Europe where the world – which gave the world the rule of law, the universities, and the scientific revolution.  It was this continent that produced the genius of Mozart and Beethoven, of Dante and Shakespeare, of Michelangelo and Da Vinci, of the Beatles and the Rolling Stones.  And this is the place where the vaulted ceilings of the Sistine Chapel and the towering spires of the great cathedral in Cologne, they testify not just to the greatness of our past or to a faith in God that inspired these marvels.  They foreshadow the wonders that await us in our future.  But only if we are unapologetic in our heritage and proud of this common inheritance can we together begin the work of envisioning and shaping our economic and our political future. Deindustrialization was not inevitable.  It was a conscious policy choice, a decades-long economic undertaking that stripped our nations of their wealth, of their productive capacity, and of their independence.  And the loss of our supply chain sovereignty was not a function of a prosperous and healthy system of global trade.  It was foolish.  It was a foolish but voluntary transformation of our economy that left us dependent on others for our needs and dangerously vulnerable to crisis. Mass migration is not, was not, isn’t some fringe concern of little consequence.  It was and continues to be a crisis which is transforming and destabilizing societies all across the West.  Together we can reindustrialize our economies and rebuild our capacity to defend our people.  But the work of this new alliance should not be focused just on military cooperation and reclaiming the industries of the past.  It should also be focused on, together, advancing our mutual interests and new frontiers, unshackling our ingenuity, our creativity, and the dynamic spirit to build a new Western century.  Commercial space travel and cutting-edge artificial intelligence; industrial automation and flex manufacturing; creating a Western supply chain for critical minerals not vulnerable to extortion from other powers; and a unified effort to compete for market share in the economies of the Global South.  Together we can not only take back control of our own industries and supply chains – we can prosper in the areas that will define the 21st century." ...
WSJ Original article ›
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This WSJ report looks at the situation in American cities where black people suffer disproportionately from the lack of resources to build better lives. Detroit, Milwaukee, St. Paul and St Louis are some of the worst hit cities in the lack of decent housing in the cities. Lenders once used redlining during the Depression era when most of the white population was still in the city so that the areas with black people were burdened with more restrictions and higher rates on loans. This report shows that the situation has changed little after the 1950's after 70 years of alternating Republican and Democratic administrations.   Now that most of the wealth and the white population has left the city of Detroit the population has declined from about 1.8 million to about 700,000. Only 1700 mortgages were made in the city because banks do not make money on tiny mortgages with the declining value of houses in black areas of the city. Black residents are largely shut out of financing, making home ownership harder, says this WSJ report.. Banks made subprime loans in the city and other cities in the U.S. before 2008 with politicians in both political parties supporting this in the name of home ownership. But these loans lacked financial due diligence as loans were made without attention to lender ability to pay off mortgages. After 2008 a financial crisis and higher unemployment hit the U.S. economy from the impact of these bad mortgages packaged and sold as assets. These loans ended up with foreclosure on homes leading to a drop in home ownership from 50% to 40% after a slight increase from 50%. Lacking genuine good intentions with sound financial sense these intentions of improving home ownership fell by the way side, worsening instead of improving things. The pandemic has hit black people and cities particularly hard. With the situation in Detroit continuing to languish from a lack of resources and a system that is failing, says this report in the WSJ.  The loss of manufacturing jobs has hurt black Americans particularly hard and a reversal of the manufacturing decline in the U.S. of the past three decades is needed for the situation to improve. This loss of manufacturing jobs has only increased the gap between the white and black unemployment rates in urban areas of the U.S., as it has also increased the gap in unemployment rates between white professionals with college degrees and whites lacking college education.  This ripping apart of the social fabric is a problem also seen in Europe with decline in manufacturing and other  problems leading to economic decay, coupled with housing and other issues inside cities.      ...
WSJ Original article ›
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This interview of president Trump by Matthew Bender of the WSJ is following the release of John Bolton's book. Mr.Bolton says Mr. Trump was willing to make compromises in China policy to win reelection. Mr. Trump says Mr. Bolton's statements are not true. Mr. Bolton says in the book and in a WSJ article that Mr. Pompeo and Mr. Pence also called for Mr. Trump to censure China for its treatment of minorities in Xinjiang province. Instead he says Mr. Trump told Xi Jinping that he could go ahead with the building of camps In Xinjiang province for minorities. Mr. Trump says he signed the deal for censure of China passed by Congress because he wanted to. The reporter from WSJ say Pompeo and Pence had called for it earlier,  but that this was signed only today. Mr. Trump does say that he has changed his views on China after what he calls the Chinese plague. Mr. Bender says he is wondering if Mr. Trump thinks differently about the trade deal now. Mr. Trump says he thinks that the trade deal is a great deal but that "But ever since we got hit with the Chinese plague.I feel different about everything having to do with China." He says he is hardline on China. And he believes Bolton had no idea he could get tariffs payments by China. In his view Bolton just lacks the economic sense. Bolton is a hard liner but stupid says Trump. That he Trump is also hardliner, but with economic sense. Early on in the interview Mr. Trump says he sees a V type recovery is likely after the good jobs numbers 17.7% increase in retail sales. He also says he left a lot of tariffs in the deal, a big portion about 25%.. In any case Mr. Trump says repeatedly since the virus hit America his view his perspective has changed, a very different perspective on China, views it very differently.  Mr. Trump says he had hardly signed the deal and soon after the virus hits. So now he views the whole deal differently today, he now views the relationship with China differently. The conversation started with Mr. Trump signing about 254 nominations for new judges. He says 75% of small business is now open.  Mr Trump says his goal for a second term is to have a strong powerful economy. Mr.Bolton agrees that Mr. Trump was doing the right thing here to build a strong economy to support its policy. Only that he was making him, Pompeo, Pence and Lighthizer on trade issues, think that Trump would give in on national policy issues to China, on issues of U.S. national interest.  ...
New York Times Original article ›
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Polls taken before the June 16 elections in Greece show the leading New Democracy party and the Syriza party running very close to each other. Both Tsipras of the Syriza party and Antonio Samaras of New Democracy are calling for renegotiating the agreements with the IMF, EU and the EC, referred to as the troika, so that austerity programs do not fall too hard on ordinary Greeks. Tsipras says the goal is to reach "a just and viable European solution." He added in a news conference in Athens that "We don't claim there is plenty of money. Greeks are not asking for money. They are asking for work and the ability to make a living." The troika imposed a 22% reduction in the monthly minimum wage of 751 euros, or $930. This is unpopular in Greece and both New Democracy and Syriza now support reversing this, and extending unemployment benefits. Syriza proposes a moratorium on debt payments till growth is restored, and stabilizing public spending at 43% of GDP, below the 46% that is the eurozone average and above the 37% demanded by creditors. Syriza says it will scale back the value added tax which falls largely on the poor, raise taxes on the wealthy, and reduce tax breaks....
France 24 Original article ›
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French parliamentary election first round results show Macron's party neck and neck with the left parties bloc led by Jean Luc Melenchon. Melenchon is shown in polls to be slightly ahead. The second round of the election is on June 19. Macron is unlikely to have a majority and may need the support of the centre right Les Republicains. The voter demographic of the Macron party and the Les Republicains is older voters, centre right, who tend to vote in larger numbers than younger voters. Voter abstention is high with 48% of the voters having voted in the first round and shows deep voter dissatisfaction with the political elites in France. Before Macron two one term presidents led the government- Sarkozy of the Les Republicains and Hollande of the Socialist party. Macron was Economy, Industry and Digital Affairs minister in the Socialist party Hollande government before he formed his own party in April 2016 months before the election calling for a revitalization of French politics away from the two leading parties. His party was named Le Republique En Marche with younger people not connected to traditional parties.   Macron won a second term with the help of Mr. Melenchon's socialist supporters. Melenchon called for not a single vote for Marie Le Pen the far right candidate in the second round of the presidential election. Melenchon and Marie Le Pen were neck and neck in the first round.  Within Macron's party Louis Philippe a popular prime minister leads a faction that Macron will need to negotiate with in addition to Mr. Melenchon for parliamentary support. There is also a situation of cohabitation that would happen if Mr. Melenchon wins a majority in the National Assembly. Melenchon says the results in the first round "offer an extraordinary opportunity for the destiny of the common homeland to defeat the disastrous politics of the majority, of Macron." In 1997-2002 France went through cohabitation with the president and prime minister from different parties. Lionel Jospin was prime minister with Jacques Chirac as president. Yellow vest protests in 2018, gilets jaunes, were a result of increase in automobile fuel prices and the cost of living, and the general sense of dissatisfaction with policies of president Macron that were seen as not favoring workers and families finding it hard to make ends meet. The working class vote and vote of younger people is evenly split between the far right of Marie Le Pen which does well in rural areas, and the socialists under Melenchon in working class districts of larger cities. In providing support for the European Union and traditional French foreign policy, Macron and the socialist parties have common ground compared to the anti- EU policies of Le Pen resulting in votes cast for Macron that were really for melenchjon in the presidential election in which Macron secured a second term. Cohabitation then offers the popular alternative for a prime minister such as Melenchon for domestic policy and a president in the form of Macron for foreign policy at a critical time for Europe with the EU response to Russia including the embargo. ...
WSJ Original article ›
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Indonesia is a country with a long history of Hindu and Buddhist culture before conversion to Islam through traders from Malaysia and Sufi saints in the sixteenth and seventeenth century. Hanuman and other deities from India are also part of the existing culture and traditions. Communist influence has been alien to this culture and tradition as in India. It was part of the Dutch empire in the east and a source of European trade in spices from the seventeenth century. It is also a extensive island chain of Java, Sumatra and other islands with a population of 280 million very closely linked to India culturally and with links to America since independence. Indonesia was given a great deal of importance during the Cold War with Robert Kennedy and other leaders visiting Indonesia during the period after Sukarno in the sixties. By 2000 the US engagement with China had evolved to the point that neglected India, Indonesia and the entire south east Asian region in a preference for links with China.  The British division of India led to the US links with India and Indonesia being shaped by that division and the Cold War with Russia. The confusion of the struggle against colonial rule of the British and Dutch led to leaders such as Nehru and Sukarno who compounded the difficulties of the Cold War and perpetuated with it the old British idea of a divided South Asia on a religious basis that had supported British rule and set the conditions that made it possible for a small group of English civil servants to run the country. This led to the Indian and Indonesian relationship with the US being stifled as the US struggled to rid itself of the British obsession with a divided India. Culturally India and Indonesia are part of an extended region in Asia with development aspirations and a youthful population that aspires to better infrastructure, better education, healthcare and ease of living, and the better opportunities in life. This is what migration did for Europeans who left for America for a new life on the east coast and on the prairies of America. It has little to do with the obsessions of the British and the Dutch that divided the region between the Indus and the Ganges and divided the Indonesian islands. That phase is now coming to an end as China reverts to its Communist period leadership under a new generation led by Mr. Jinping, a son of one of the veterans of the Communist Revolution of 1949. The US has to evolve its relations with India, Indonesia, Vietnam and other countries into new ties of trade, culture and technological exchange. This is needed as it winds down its close trade relations with China in its supply chain to rebuild a new supply chain after the trade wars and the pandemic revealed the deep flaws of that supply chain. What is needed is not the efforts of one changing adminstration after another, but an effort started by president Biden that will last through different administrations as the US engages with Asia in the way that it engaged with Europe after FDR and Truman for most of the twentieth century. And one that rids itself of the obsessions of divided regions from the colonial period of the Dutch and the British. The1.6 billion people in India and Indonesia share a  common aspiration of being a major part of the Free World with America. ...
The Economic Times Original article ›
LyrArc Article Gist
It took 75 years for a British prime minister to visit Gandhi Ashram on the banks of the Sabarmati river in Ahmedabad. George Bernard Shaw, the English writer, in a handwritten note at the Nehru museum in Allahabad after meeting Gandhi says "ask somebody 100 years hence" about Gandhi's contribution to the world. Today it is more clearer than ever. Mohandas Gandhi wrote Hind Swaraj on a ship from South Africa to London in 1910 after negotiating with the British government on behalf of Indians in South Africa. In 1915 Gandhi returned to India and used his savings to buy 110 acres of land for the ashram on the banks of the river Sabarmati in Ahmedabad. By 1923 Gandhi was questioning the expenditures of the British government that did little for the development of the country and a budget that was focused on military expenditures, in his magazine Young India, with nothing for developing the country except for railways and transport. Gandhi launched his non cooperation movement for self-rule or Swaraj from the Ashram. By 1937 elections were held and the first provincial assemblies were set up in an experiment for self-rule. In 1930 the Salt March for noncooperation in the British salt monopoly, salt seen as the common man's right, was launched from the Ashram. In 1942 the Quit India movement was launched in the middle of World War II. In 1945 after Labour party's Clement Atlee won the election in a landslide against Winston Churchill the path opened for Britain to start negotiations with Gandhi for independence. In 1947 India was free. Why 75 years for a British prime minister? Much of the period after 1950's was lost in the recovery from partition, wars on Kashmir, China's entry into Tibet and the invasion of India. The non aligned movement under Nehru and Indira Gandhi and successor governments to 2000 appearing more as voicing a grievance for being left out led to an ambivalence of the US and UK towards India, and reflected a period when India was small in economic terms and lacked the opportunity to find its place in the world as a country with the largest population in the world. Which today with with Bangladesh and Indonesia sharing a common history of Hinduism and Buddhism represents 1.6 billion people. In the Nehru home museum in Allahabad there is a hand written note by British writer George Bernard Shaw who visited India and the Nehru home. It says it would take maybe 100 years before the world realized the significance of what Gandhi had done and only at that time would the world truly understand Mr. Gandhi. Mr. Boris Johnson's effort to make up for 75 years that went by without UK prime minister's visit to Gandhi Ashram in Ahmedabad is one such moment that George Bernard Shaw had seen coming.  George Bernard Shaw's handwritten not at the Nehru Museum in Allahabad says- "What is the place of Mahatma Gandhi in political philosophy? I do not know. Ask somebody a century hence. I recollect Gandhi as only a very likeable fellow- Mahatma from India. We did not talk Mahatma shop."       G. Bernard Shaw            28/6/1947     ...
The Guardian Original article ›
LyrArc Article Gist
Milan will host the World Cities Culture Summit in 2020, and the Winter Olympics in 2026 shared with the Alpine town of Cortina. The international book fair of Turin is moving to Milan. The left of centre Mayor Giuseppe Sala has promoted the city to increase tourism by 50%. And foreign investment is increasing for new construction projects with $21 billion to be taken up in the next 15 years. Experts are asking if this is coming at a price as the rest of Italy has stagnated for 20 years, and the rural large city gap is increasing throughout Europe. The flow of professionals to cities such as Milan, Paris, Munich, Berlin, from other towns and cities is creating a huge shift that experts at the Centre of European Reform see as a problem because of the political turmoil, and rising inequality with ever widening gaps between smaller cities and towns and rural areas with the big cities. This is compounded by ageing and demographics such as seen in the eastern part of Germany, and parts of France. Experts call it The Big European Sort, where a sifting or sorting process is increasingly transforming the demographics of European countries and driving polarisation. This process is also happening in the U.S. Experts say the big cities benefitted from the change with the European single market and the European Union. Places where working class people live are not seeing and increase in wealth which is disproportionately going to professionals clustered in big cities. Deindustrialisation has turned places like Mezio only 20 miles from Milan into industrial ruins. Towns that once voted socialist are now voting far right in these hollowed out industrial places. In the U.S. and in Europe the process was exacerbated by the flow of cheap imports from Asia hollowing out factories in regions around big cities, and by the growth of services industry in big cities with globalization in finance, legal, and other professional services. Fro 1980 to 1995 Paris region lost about $5.5 billion in industrial output and gained $20 billion in services output that also aligns with globalization in areas such as finance, according to CER, Eurostat. The process had accelerated in 1995-2020. By telling this story about Milan and the Lombard region around it like Mezio, The Guardian is saying it is time to look at how everything works together rather than breaking apart- citing the Finnish architect Saarinen about how a chair fits into a room, a room into a house, and a house into its environment, an environment in a city. So the question is how can we build the future by seeing that the city fits into a region, and a region fits into a country. As a young professional described this on BBC television interview recently this is a difficult period with the ability to design the future seemingly snatched away by the times, but also an opportunity to rethink and take the actions today for a better tomorrow for all. This is part of the coverage on Cities in The Guardian looking at how cities can work, and how cities can become part of healthy regions, for organic growth. ...
WSJ Original article ›
LyrArc Article Gist
It is not a story that most people grasp or understand- the long term effects of the US immigration surge of 2023 and its source mostly from Venezuela. The  US Congressional Budget Office says labor force in 2033 ten years from now will be larger by 5.2 million people and younger as a result of the immigration surge in 2023 from about 1 million immigrants each year in the 2010's to 3.3 million. About 2.5 million crossed the southwestern border in 2023. Much of it the result of the collapse of the Venezuelan economy and its middle and upper classes leaving the country. This was worsened by the US sanctions on the Maduro government including under president Trump, say experts in an adjoining NYT article on the 7 million people who left Venezuela to go to Colombia, Peru, Ecuador and Chile since 2012, then making their way up the Darien Gap to the US. Something that could have happened under a Republican president if the US Congress could not reach bipartisan agreement on correcting asylum and parole policy. As a result of this surge US Gross Domestic Product  in 2033 will be 3% larger. When the large Asian economies are seeing a aging workforce, Japan for the last decade and China now following Japan, the US labor force will be younger than it would be without this unusual surge in immigration of the last 2 years. The federal deficit will be smaller at 6.4% instead of 7.3% in 2033 as immigrants will pay taxes on income. Another aspect of this larger infusion of immigrants is that after the pandemic shut down immigration entirely there were severe shortages in the hospitality and restaurant, construction, healthcare industries. And with the trillions of dollars in investment that the Biden administration is making with more factories - this will absorb most of the immigrant surge by 2033. With some positive effects in the competition with rising Asian economies China and India. Particularly consider with the younger demographic India of 1.4 billion people. It will mean more factories can be built in the US and there will be workers for these factories in the US at wages that keep the US economy competitive years from now in 2033. This is a sobering aspect of the current situation viewed from what will be seen by America's younger generation. And under the bipartisan compromise in Congress correcting asylum and parole policy that was shut down by the former president, Republican senators understood very well that the immigration surge of 2023 would have some constructive effects for the long term, while its effects on the short term would be mitigated by Biden's commitment to close the border in 2024. This did not happen, yet the future for America's younger generation is bright under the Biden plan for massive investment in manufacturing and jobs in the US, and with the millions of immigrants needed to fill the jobs that investment will create by 2033. It will make America with a younger work force than Europe or China, only India having a younger workforce in 2033. ...
The Guardian Original article ›
LyrArc Article Gist
This picture essay in The Guardian shows the 700,000 additional people displaced inside Afghanistan in 2021 in addition to the 2.9 million displaced people by 2020. The British stayed out of Afghanistan except for brief forays from concern about Russia entering close to British India. Not much happened till Zahir Shah, the King of Afghanistan was seen as not doing much for a famine that struck the country in 1972. Drought struck much of the country in 1972 leading to the deaths of over 100,000 people from starvation. The King had ruled since 1933. And for a brief period his cousin and brother-in-law Daud Khan had actually run the administration between 1953 to 1963, before being dismissed with a new constitution adopted not allowing the royal family to rule the country without consulting parliament. The poor handling of famine relief led to the fall of the government appointed by King Zahir Shah in 1972. In 1973 Daud Khan violates this constitution and assumes control of the country. British India was in 1972 the India of the Nehru period, with his daughter Indira Gandhi the democratically elected prime minister. India fought a brief war with Pakistan in 1971 that set up the new nation of Bangladesh from territory of East Bengal. India preoccupied with Bangladesh refugees did not do what the British had done to keep outside powers out of Afghanistan and maintain a stable monarchy. Daoud Khan's repression of Communist party leaders led to Communist party military factions in the army taking over the country in 1978. The Afghan military led by officers in the army's Communist factions had little support in the traditional Islamic nature of the countryside for their land reforms. Leading to a rebellion and entry of Soviet troops under a friendship treaty signed in 1978 with Soviets under Leonid Brezhnev. It is this disrupting of the stability of the Afghan monarchy or the entry of Soviets or Americans or any other foreign influence that was carefully prevented in British India by Britain's India policy, which resulted in a period of peace and stability in that region. The events of 1974 with the fall of the monarchy, and the entry of Russia in 1978 broke two of the main rules the British had observed from 1750- a stable monarchy and no outside influence in Afghanistan. A policy the British also followed for Tibet. When China entered Tibet in 1950 Nehru was too preoccupied with the millions of refugees from Pakistan and failed to prepare in the years 1947-50 for following British policy on Tibet by preparing or anticipating the entry of foreign powers. The entry of China into Tibet in October 1950 led to the Sino India border war of 1962, and led to the current situation of India facing a Chinese army all along the border of Arunachal Pradesh, Ladakh, Nepal and all the way in the Himalayas to Kashmir. The result has been billions of dollars spent by the US every week starving domestic priorities, as president Biden observed this week, and a burial place for empires. Ten years for Russia, and twenty for the US with the same result. It has left the whole region poorer and in humanitarian crisis for 50 years, and created crises for Russia, Pakistan, India, and the US. ...
Washington Post Original article ›
LyrArc Article Gist
Mexican president Nieto's poll numbers are at all time low of 24%, according to Reforma newspaper. He took office in late 2012 and has been hurt by human rights scandal of the murder of 43 students in the state of Guerrero, corruption issues, and failure to improve the economy. The invitation to Trump to visit Mexico left even people close to the president surprised, and was criticized widely inside Mexico. It is not clear what Trump or Nieto gained from the trip. As Trump continued his talk about building a wall on the Mexican border and having Mexico pay for the estimated $23 billion it would cost. He did this in a speech to supporters in Pheonix on the same day he met Nieto, showing the use of teleprompters and prepared script was not his way of campaigning. Just as the message to black people that Democrats take them for granted cannot resonate without the basic message delivered with compassion and understanding- such as done by the presidents Bush and Reagan- so also the message to Hispanic people is suffering from the same lack of empathy. Recent polls show only 3% of blacks support Trump. McCain and Romney gained only 4-6% in the U.S. presidential elections of 2008 and 2012. The message of the wall is also baffling as an election strategy. A Gallup poll in July 2016 shows only 15% of Americans opposing a pathway to citizenship for illegal immigrants, and only 24% of Republicans. There is another problem in the strategy. The rhetoric about walls and mass deportations, and the Trump temperament combined with handling of nuclear weapons is not winning college educated women in the suburbs with polls showing Trump lagging behind Clinton by about 20 points or 4 million voters with this group. It is hard to undo the damage done by this kind of rhetoric used in the primary elections as it gains distrust of voters. It would require a bad economy with illegal immigrants taking local jobs, and handling of immigration seen as weak, for such a message to gain some national traction. Both are absent for the most part with a steadily improving economy since 2012, lower unemployment, a tough enforcement policy on deportatons under Obama that exceeded that under Geoge W. Bush, and the talk of a wall comes with illegal immigration having declined steeply since the 2008 financial crisis. The real culprit appears to be elsewhere, the triple hit taken from hollowing out of the manufacturing economy that hurt the Conservatives in Canada, the insecurity created for older whites from the job losses and hits to net worth from the 2008-2009 financial crisis, and the increasing loss of access to health care and educational opportunities with high  costs. About 62 million households or the bottom half of the distribution in the U.S. have a net worth of about $10,000, a quarter of this group having zero net worth, according to the Federal Reserve's Janet Yellen at an Inequality Conference in Oct 2014. Problems no wall is going to solve, problems that built up over 2 decades, problems that will take a generation to fix.  It shows the tech miracle of the last 2 decades as a mirage for quality of life of the middle and working class. Tech as a tool to a goal, not a goal in itself, is the better way forward. ...
New York Times Original article ›
LyrArc Article Gist
Pope Francis is strongly critical of the manner in which the capitalist system has functioned in recent decades, increasing inequality, and hurting the marginalized, the working class and poor. Pope Francis tells people during his visit to the poorest countries in Latin America, Ecuador, Bolivia and Paraguay, that the Catholic Church committed grave errors during the period of Spanish colonialism by allying with the ruling classes and creating great inequalities and suffering. The director of the Institute for Policy Research and Catholic studies at Catholic University of America, Stephen Schneck, says the Pope is reflecting a century of activism on social issues since the Pope Leo XIII encyclical in 1891, calling for social and economic fairness for labor, with the encyclical "Rerum Novarum" - or "On the Condition of Labor." The Pope's message in Santa Cruz, Bolivia, to nearly 2000 social activists, farmers and trash workers, neighborhood activists, was that change has to come from grassroots, that the local communities have acquired the knowledge which is valuable to act for economic and environmental betterment. He praised cooperatives and local organizations that enhanced the value of labor. His message resonates say Catholics because he has stayed in close contact with local communities, and the poor, working class people in Argentina. It is focussed on empowerment of local communities. In Bolivia the left government has adopted measures that attract foreign capital and investment, so that it is a model that stays away from socialist ideology, while at the same time embracing the grassroots idea of empowering local people and communties. In this way it has improved living standards in Bolivia and received favorable ratings in capital markets....

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