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Yale University's Robert Shiller quotes Thomas Jefferson from a letter written in 1820, where he said about the passions in the North and South about extending of slavery to the Missouri territory: "this momentous question, like a fire bell in the night, awakened and filled me with terror." He says there are serious consequences of letting longterm unemployment continue. He cites a proposal by Edmund Phelps, Nobel prize winner in economics from Columbia University, which would have the government give a subsidy of $4.50 an hour for the lowest paid workers, with declining amounts till they earn $15 an hour. This proposal would cost about $150 billion and be aimed at reducing income inequality and making these lower paid jobs attractive. Other proposals for reducing unemployment are to use work-sharing on a national basis with government help.

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Jean Raspail is the French author  of "Camp of the Saints" and of "Me Antoine de Tounens King of Patagonia," winner Grand Prize of the Novel 1981 Academie Francaise. Written by Raspail, the son of the Founder of Le Figaro French newspaper in 1973, Camp of the Saints is a book describing Raspail's extraordinary vision of how boats from Bengal would suddenly appear at French shores carrying millions of people from Bengal fleeing conditions of squalor and extreme poverty. 1971 was the year of the Bangladesh war with millions of refugees from Bangladesh at the time called East Pakistan pouring into India from Bangladesh, hit by massive floods the year prior, and then facing an army of occupation from West Pakistan's Punjab ethnic group dominated Army. While calling Raspail's Camp of the Saints "openly racist" Le Monde does not show the events described here as being entirely real- the squalid and the squalor into which Bengal had been plunged by a over a century of British rule in India that as Gandhi showed in the 1920's in "Young India" magazine spent most of the budget on policing, and very little on development except rail for logistics to hold the Empire together. On this the French Left or French Right or the European Left or Right is silent, preferring not to open up the similar situation facing China Hongkong, Shanghai as Treaty ports and Beijing after the Boxer rebellion, the Middle East with Sykes and Picot creating artificial states of Syria and Iraq, and controlling states of Iran and Egypt, and Indochina as French colony. It is not "racist" it only shows what Raspail might have seen on television at that time of the truly squalid conditions, including a famine in Bengal in 1944 that was aggravated by British policies. If Raspail imagined that boats from Bengal would arrive at the shores of France it is not something that is not connected to reality, it is the squalor and squalid conditions- except the reality the so called Right and the Left failed to say was a result of the centuries of colonization that made the region miss the Industrial Revolution. Western India around Bombay and Ahmedabad was far more developed by the 1970's and more so by 2003 when Camp of the Saints was republished. In 2026 Camp of the Saints is outdated. Northern India, Western India and Central India is in the kind of rapid modernization that happened in China, with bullet trains, ports and new highways, new industrial infrastructure, housing, going up every year under the Modi Government. In the paradox of today the Modi government is referred to as racist or religious right without reference to its essential condition, its very spirit of modernization based on science and technology acknowledging and revering the contributions of European nations and America. Bangladesh is eastern Muslim part of Bengal. West Bengal is part of the federal Union of Indian States, and has fallen into disrepair and industrial backwardness within Indian states because of the lack of the rapid modernization that India is going through, under mismanagement of the scale of Venezuela. Much of the media in the west does not report the scale of the mismanagement of some of the states in India that were built on the legacy of the early decades after independence of policy to slow down industrialization and corruption that destroyed infrastructure investment. The federal government of India and the states run by the party at the federal level in northern, western, central and north eastern India oppose migration to the US and Europe and are now growing at the fastest pace in the world, faster than China, growing at 10-12 percent a year. Bihar state in India is the home of Lord Buddha and the origins of Buddhist civilization of China and Japan. It has a population of 130 million and is growing at 22% a year in 2026. India needs its young people at home, even though it is willing to loan some of its technical people to Germany and Europe and the US. The Indian federal government policy and policy of these Indian states run under federal policy is to oppose migration and find jobs for millions in a rapidly modernizing economy at home. This then is the reality in India, as well as China, with 2.8 billion people. No one in India, not Gandhi if he were here today, not the government in the Indian federal union and states faults Raspail and others and calls them "racist," because of the extraordinary help first Japan, then China and now India receives from America and the European Union to develop and modernize quickly. In fact Indians look with admiration on the western leaders in science and technology, the scientists and inventors of Europe and the US, and are eager to emulate them in the future. And this is true also of the people of China, and reflects the aspirations of the new generation. ...

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Phelps compares the Continental European system with the American system. He sees the role of creative careers and the satisfaction scores of creative people, and all people who love their work and like to see it made interesting and challenging, as the big positive point for a system that encourages this. But he does not dwell on how this does not happen when society and the institutions and companies inside it redirect these energies to wasteful ways. This article in the WSJ was written the day after he was awarded the Nobe Prize in 2006.

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The top 1% of Americans owns more wealth than the 90% at the bottom, according to the Economic Policy Institute. The Economic Mobility Project points out that the U.S. provides less intergenerational mobility than most other industrialized countries. A key factor is less educational investments to give better educational opportunities to the less advantaged. Michael Spence, a nobel prize winning economist, says we have in America gone from one propertied man, one vote; to providing voting rights to all regardless of color or gender or property, and back to where it is now one vote for so many dollars. The financing of political campaigns has made good policy decisions for the financial sector based on merits and wise judgement impossible, as Congress and the White House are beholden to interests that finance political campaigns, says a former head of the Commodity Futures Trading Commission.

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According to this report in The Times money taken from a sovereign investment fund was used for the film "Wolf on Wall Street," starring Leonard Di Caprio. Details of the 1MDB story first investigated by the Wall Street Journal read like a detective novel. Malaysia's former prime minister in his 90's returned this year to defeat his former protege Najib in an election that revolved around the 1MDB story and how the state investment fund had funds diverted away from development goals by Najib. Malaysia's Attorney General files criminal charges against Goldman Sachs bank for collusion in the loss of billions of dollars from the 1MDB Malaysia fund intended for development goals, according to this report in The Times. Two former employees are accused of misappropriating $2.7 billion. The statement by the Attorney General, Tommy Thomas about Goldman Sachs bank said: "They have fallen short of any standard... they have to be held accountable." ...

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Yelena Chizhova was given the 2009 Russian Booker Prize for her novel "Time for Women." Chizhova describes how she gained a glimpse into the life of the period before the 1990's- during the Brezhnev period and the siege of Leningrad- from stories told by her great grandmother when she was only five or six years of age but which remain in her memory. In her book she tells the story of three elderly women raising a girl in a communal apartment in the 1960's. She says her book is part of this search for moral bearings in Russia that looks back to look forward.

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Paul Krugman, Nobel prize winning economist points out an astonishing fact about the 2016 U.S. presidential election- U.S. television networks nightly news devoted only 32 minutes in 2016 to all policy issues combined. And these networks devoted 100 minutes to Clinton emails. He calls this "disgraceful."  For weeks at a time in September and October the main television networks lacked the integrity and courage to ask questions and persist on the major questions facing the country of the economy, correcting income distribution that has been skewed away from the middle and working class, infrastructure rebuilding, education and healthcare, and what the policy proposals of each candidate would do for the country. Krugman does not mention this but the media devoted hardly any time to the economic plan devised by Trump that respected economists and economic analysis showed would increase the deficit by $5.3 trillion, and lead to a short term temporary increase in growth followed by a sharp decline. The worst thing that could happen to middle and working class families struggling to recover from the blow to their finances from the last recession.  The cyber hacking of a U.S. presidential election by a foreign power never received the unanimous rejection that it deserved from the television networks, not just Fox News as Krugman points out, but by all the networks. The future landscape of the media needs assessment to bring in new ideas and new entrants to bring constructive improvements, and for older media organizations to rebuild after the loss of confidence among young people. Only about a quarter of young people in the U.S. have confidence in the large media organizations news coverage according to surveys done recently. There are other pressures coming from the tech world that make it imperative to do this. Many experts point to the destructive effect of social media in spreading rumors or information disguised as facts, which are spread instantly by Twitter and Facebook, without any obligation to check the facts. This is also dangerous with a public that is now divided between better educated and less educated along political lines, older more settled in their views people, and younger people quicker in looking for the facts and checking things out before believing them. ...

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Glenn Hubbard, Professor at Columbia University and Bush adviser who helped design the Bush tax cuts, has an uneasy sense about the tax cuts today. He says the tax cuts have been undermined by years of deficit spending. The Bush tax cuts expire Dec 31st 2010 in the USA if Congress does not act. Macroeconomic Advisors estimates that letting the tax cuts expire will take 0.9% off the growth rate. Nobel Prize winning economist Paul Krugman prefers to let the tax cuts expire and provide more help to state and local governments to preserve jobs that are being lost due to budget shortfalls. But becuase of the political climate he prefers to let the tax cuts go on for a limited period. The Obama administration may decide to continue with the tax cuts rather than fight the serious battles for deficit reduction, after spending much of its political capital on health care reform. Hubbard also thinks in the current situation its best to keep the tax cuts even with the concern for the deficits. He says the spending during the Bush administration, especially the Medicare prescription drug benefit, which is estimated to cost $400 billion from 2004-2013, was a major problem. The incentives to business and investors for productive effort in the Bush tax cuts is uncertain, if it becomes clear that the price for these cuts is higher taxes later on to cover growing deficit spending. Hubbard does not see any serious action on the deficit till the next Presidential term and sees it better to keep the tax cuts till then, when some serious discussion can take place....

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Turner Adair, head of Britain's Financial Regulatory Authority thinks that banks have assumed an outsize role in the British and world economy, and are coopting their regulators. He sees the need to check many of the excesses. Why not use profits to build up reserves rather than give out huge bonuses and paychecks, he asks. He sees the need to challenge the accepted thinking on Wall Street and in the City of London, where the ideology of efficient markets became embedded, as it did also in the regulatory community. He came in the week Lehman Brothers collapsed as chairman of the FSA. And he wants to shake up the existing thinking. In March, the Turner Review. a 126 page report was published. A lot of attention was paid to his suggesting atax on financial transactions, called the Tobin tax, but its designed more to get people thinking and questionning the existing way of running banking as Turner said in an interview, "we have begun to accept this idea of liquidity as the new God." Can British or American society and the financial industry in both countries work to the benefit of both? Nobel prize winning economists and other experts have advised ashift to productive investments that grow the economy using technology, science and brainpower and new ideas, as opposed to the investment in mortgages and other speculative investments. As the regulators -including former and current heads of the SEC, and other regulatory bodies in the US, Cox, Schapiro and others- once held on to the same theory of uninhibited operation of free markets as best for generating increased wealth for society as the banking community, they tended to get co-opted in letting bad practices flourish. Went to sleep on the job as it were. See the links in Intelilinks. Adair Turner's admonitions are designed to get people thinking. He says, "banks need to be willing, like the regulator, to recognize that there are some profitable activities so unlikely to have a social benefit, direct or indirect, that they should voluntarily walk away from them." Investments in science, technology and new products, as in the 60's that generated a revolution in living standards, than the mortgages and consumer lending of the last decade, is what he may be saying, as do these Nobel prize winning economists....

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About 6% of textbook sales are forecast to be digital in 2012, up from 3% in 2011, according to MBS Direct Digital. The $14.99 price for a digital copy of a textbook for 1 year announced by Apple is designed to increase sales. Apple's Phil Schiller, senior vice president of worldwide marketing, says there are 1.5 million iPads in use at schools and colleges. Future price reductions on the iPad below the current $499 level would make the device more accessible and affordable for students. Apple iBooks are designed to work only on the iPad. Other device manufacturers are Amazon and Barnes & Noble, and Apple is in third place for digital books according to Forrester Research. Over time digital copies digital textbooks will dominate the market. MJB Direct Digital sees 50% of textbooks being digital by 2020.

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Smaller biotech firms typically have products in the development stage and are not making money. Now they are facing increasing financial hardship. Even in good times except for a few names like Genentech and Amgen, the others are struggling. They have a hard time raising money, and its coming at a higher price, 90% of equity instead of 50% like before for 5 or 10 or 20 million dollars. Older shareholders are diluted with new capital raised. And some are selling out. Others are going into bankruptcy liquidation, after wrenching periods of firing most of the staff. Even blue chip firms like Helicos of Cambridge, Massachusetts, which went public in 2007, and has backing of advisors like Steven Chu, the Nobel Prize laureate, are in trouble; with its DNA reader designed to produce custom tailored cancer treatments at $1 million a piece. It has not booked a sale, faces competition from a reader developed by two companies, Roche and Illumina of San Diego. It almost ran out of cash last year. Helicos shares $18 last year, are at 54 cents. According to Burrill and Company, a venture capital concern, 100 of the publicly traded biotechs this year may be lost as companies fail or get taken over. 120 of the 360 publicly traded biotechs have less than 6 months cash left, compared with 12 a year ago, says Burrill. Already 10 have declared bankruptcy according to Biotechnology Industry Organization. BIO is asking Congress to step in and for the government through the National Institutes of Health to provide matches for private investment in small startups with promising treatments. All this is happening as companies are spending large sums for mergers like the Pfizer Wyeth merger. ...

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Chinese car company Shuanghuan's CEO was on display at the Franfurt auto show. Its rear looks like a BMW X5 and BMW has charged that it copied the X5 and filed suit to prevent it from being marketed in Germany. Shuanghuan also has a minicar that is called Noble which looks like the Daimler's Smart minicar. Daimler also is taking legal action to prevent the marketing of the Noble in Germany. Only the X5 was shown at the Frankfurt Auto show getting criticism from Reithofer who is head of BMW. Critics say that the Chinese actually have borrowed from several car designs and from different aspects such as the interior aand exterior of different brands,thus the X5 is seen as borrowing from the front of a Toyota Land Cruiser and the rear of a BMW X5. The price difference is huge 29,000 euros for the CEO vs 59,000 euros for a X5. Currently the Chinese are struggling with safety issues in their cars by makers such as Brilliance and the Landwind. Both cars did badly in tests conducted by the German automobile club ADAC. Landwind's model is being retooled for safety while the Brilliance which has a collaboration with BMW for the Chinese market presented a new subcompact the BS2 as an alternative to the VW Golf....

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What is theaverage income of a Ohio plumber and how many have health insurance? Is he a working class man? Well it turns out that Joe the Plumber Republican candidate for President 2008 refers to could be an exception but the average plumber makes $47,930 according to the Bureau of Labor Statistics occupational earnings report for May 2007 for plumbers in Ohio. And the Ohio plumbers income was only 15% higher than in the 2000 report when the consumer prices in midwest rose by 17%. According to the Kaiser Family Foundation in 2007 only 45% of companies with fewer than 10 employees offered health benefits, down from 57% in 2000. And 2007 was a good year, the statistics for 2008 and 2009 would look much worse as the downturn takes shape. As Chapman another Nobel prize winning economist wrote in the WSJ oped pages the stimulus checks were spent on more purchase of consumer goods merely continuing a high debt low savings spendthrift pattern of consumer behaviour and delayed the economic crisis for 6-12 months. Underlying incomepatterns like the one above where working class Americans were actually more and more worse off in an accelerating pattern may have become glossed over in consumer debt and housing boom behaviour....

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Michael Fathers reviews two detailed accounts of Mao's Great Leap Forward. From 1958-62 Mao launched an effort to industrialize China in its effort to surpass Krushchev's effort to surpass the U.S. and western nations in one decade. Yang Jingsheng's account in the book 'Tombstone,' is a result of decades of research to find what happened during this period. He lost his own father to starvation during this period when all Chinese agriculture was forced into communes with communal living and communal kitchens. The result were disastrous as agricultural production suffered badly leading to famines and loss of an estimated 45 million lives. The policy was continued even as the result showed a looming disaster by 1959. It was only by 1962 that Mao was forced to accept the failure of the program. As an editor of Xinhua news agency, Jingsheng had access to accounts of waht happened in provincial documents and archives. The other book reviewed is 'The Great Famine' by Frank Dikotter which provides an illuminating account of what happened in these years. Dikotter says the final responsibility rested with Mao for calling for higher grain deliveries from the countryside at the height of the famine and for continuing the policy of force and coercion leading to starvation- he quotes Mao who said: "It is better to let half the people die so that the other half can eat their fill." The truth about this period was hidden by propaganda and the mistake accounts of westerners who visited China including Francois Mitterand till the 1990's. Jasper Becker, a former correspondent in China for the Guardian, gave one of the first accounts of what had happened in "Hungry Ghosts: China's Secret Famine" (1996). What shocked readers was the extent of the dead, the violence, and the fear of speaking out even after 30 years. The fear of speaking out is evidenced in the pen name Mo Yan of the Nobel prize winner in Literature for 2012 which means do not speak out in Chinese because his parents were from a more affluent farming family in the village. Mo Yan uses animal and fairy tale characters and Chinese history in his novels and stories including his effort to describe the behaviour of arrogant local officials. The chronology of this period also tells a story. China's Communists took control in 1949, the famine and violent repression to establish the commune system occured in 1958-1962 only 8 years later, and the Great Proleterian Cultural Revolution was launched by Mao in 1966 and was to last a decade till his death in 1979- a period which saw a new effort of upending of China's countryside to establish communism....

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Li Keqiang, China's new premier, is a member of the "Class of 77," who gained entry to Peking University when university entrance exams were reinstated after Mao's death. This is a period of great curiosity in China about the outside world. Li described it this way in 2008: "In this period knowledge was expanding with the speed of an explosion. I came here not just for knowledge, but to mold a kind of temperament, to master a kind of academic discipline." This he did by working extremely hard trying to master the English language and Western legal theory. He is now the only leader in China who can speak fluent English and is familiar with western concepts of law. For this he owes much to one of his professors, Gong Xiangrui, who studied at the London School of Economics in the 1930's and supported a multiparty system for China. Li was selected as one of the students to translate "The Due Process of Law" by Lord Denning, a British jurist. He spent the next 15 years in the Communist party's Youth League and moved up through the ranks. Many of the "Class of 77' " are still close friends and in academic positions in Singapore, Hong Kong and other universities. He understands the weaknesses in China's legal system because many of his close friends are lawyers, judges and law professors. Evidence of his intellectual openness, is his return to Peking University for a masters degree in economics years later, his thesis on urbanization, and his sponsorship through the Development Reform Commission think tank and the World Bank's Zoellick, of the report published in 2012, "China 2030." That report called for China to change course and reverse the role of state owned firms in the economy, giving consumers a bigger role. Like many of China's leaders this openness also meant during the period of turmoil of the Mao period and the decades following this, of a reticence to talk about political change that came over the entire country, in the words of the 2012 Chinese Nobel Prize Laureate's name, Mo Yan, a kind of "Don't Speak." Taking any kind of political position was simply too risky. The presence of 4 older Politburo members in their mid-60's who are close allies of former president Jiang Zemin and likely to preserve the status quo, also suggests a cautious approach in making changes. One key difference between Jinping- Keqiang from the Jintao-Wen Biao leadership is that Jinping has experience in provincial leadership positions in Hebei, and Keqiang was provincial leader in Henan, China's most populous province, as well as leader in industrial Liaoning province. By odd contrast Hu Jintao was a leader in the remote Tibet region and Wen Biao was a geologist in the northeast for many years. This gives the new leadership team a first hand knowledge of conditions in populous provinces, and the connections with the World Bank's Zoellick a kind of window to the outside that no other leader has had. Jiang Zemin, a former mayor of Shanghai, China' most westernized city in the 1930's and today, was himself a experimenter in his own right when he initiated the changes tht gave China entry into the World Trade Organization. His support of Xi Jinping gives Xi the needed backing for making change happen when the time comes....

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On February 11, 2011, the day Mubarak leaves office, Mohamed ElBaradei, has this to say in the New York Times. ElBaradei won the Nobel Peace Prize in 2005, and headed the International Atomic Energy Agency. He says the only thing to fear for Egyptians and the international community is the shadow of a repressive past. He sees the rebirth of Egypt as representing the hope of a new era in which Arab society, Muslim culture and the Middle East, are no longer seen through the lens of war and radicalism, but as contributors to the forward march of humanity, modernized by advanced science and technology, enriching society by its diversity of art and culture. To get this process started he calls for a three member presidential council with one member from the military, and a transitional government of national unity to run the country. Its first tasks would be to dissolve the Parliament, abolish the old constitution, replace it with a provisional constitution. The primary job of the new interim governmet and presidential council would be to set in motion the process to turn Egypt into a free and democratic society. The first step for that process would be drafting a democratic constitution to be put to a referendum, and preparing for free and fair presidential elections within one year....

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Pakistan prime minister Imran Khan visits the White House to meet president Trump. Mr. Trump welcomes Khan and lauds the Pakistani leader as an athlete and a leader. He tells him trade deals can be struck, future was bright and flow of aid can be turned on. Trump makes a casual offer to help mediate the dispute between India and Pakistan over Kashmir, even though it is certain that nothing comes out of this, because of India's position not welcoming other countries doing any mediation. At the heart of this reconciliation is Afghanistan and president Trump's conviction that Pakistan can get the U.S. out of Afghanistan. Trump stated this- "I think Pakistan is going to help us out, to extricate ourselves. Pakistan is going to make a difference." The idea is that Pakistan can persuade the militants, the Taliban, into a face saving settlement that will allow American troops to come home. Mr. Khan in turn stated that Pakistan had given up its policy of using Afghanistan to give it "strategic depth" against India. The army would not go behind the back of the civilian government to conduct a policy of its own. Mr. Pompeo and Mr. Trump are impatient to get this done. The deadline of Mr. Pompeo is September 1 and talks continue between the Taliban and representatives from Afghanistan. The U.S. effort is handled by Zalmay Khalizad. How Afghanistan is governed in the future is not determined and Pakistan has a key role to play in making a sensible solution take place if it decides that something new has to be tried.  In the past U.S. governments from both parties lacked the ability to take a good hard look at the facts the origin and evolution of this dispute. To tackle it directly with a willingness not only to call it for what it is but also to give the other side an incentive to try new solutions. The inventive style of the Trump administration to tackle the situation directly, but also come up with new and novel solutions is what is now being tried. ...

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Vernon Smith, Professor of Economics and Law at Chapman University, 2002 Nobel prize winner, makes an effort to explain in simple language what has happened in the housing bubble, the various aspects of this crisis, and what might help and what might be difficult to accomplish in the rescue plan. He thinks that a reverse auction is awfully hard to do with some success especially as Treasury has no experience with this, and thinks its better to inject capital in banks and companies in return for equity stakes, which incidentally is what Gordon Brown's plan in the UK intends to do. With that Chapman believes Treasury has experience having recently demonstrated that several times including the way Treasury and the FDIC assisted JP Morgan takeover Washington Mutual. He asks readers to look at the Shiller price index graph from 1987 and asks do they think the home prices which only in 2006 and 2007 gradually turned downward and plumetted in 2008, has it run its course. The answer from the graph looks like a no after such a long runup in prices since 1987 and there is a ways to go in 2009 and into 2010. In this context and the context of a declining economy wiith higher unemployment what are the prospects of stabilizing home prices anytime soon? Which suggests injection of capital in return for equity by the government to recapitalize them and get lending back up, as well as act a a clearinghouse to take some of the fear risk out of transactions, as some of the more sensible solutions. And at the same time putting in a comprehensive homeowner relief program with taxpayer money and lender participation to have the lenders modify mortgages, or something like the Hubbard or Feldstein plans, to keep homeowners in their homes. And there is one bit of good news in all this oil prices have already hit $80 a barrel and are headed downward, and so are the prices of all commodities including steel, and the prices of soybeans, corn wheat and so on. ...

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Researchers David Autor of the Massachusetts Institute of Technology, Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Fiscal Studies in Madrid, in independent research, studied the impact of trade on 722 clusters of interrelated counties in the U.S. They focussed on the surge in Chinese imports and found a pattern. Counties with higher exposure to Chinese import growth showed higher unemployment and higher expenditures by the government for unemployment benefits, food stamps and disability benefits. Their calculations show the increased government payments amount to one to two thirds of the gains from trade with China. This does not include the losses suffered by people losing jobs who deplete savings as they look for new jobs. Hanson studied the effects of trade and Chinese imports in the 1990's and found the effects were relatively small. This time the effects are large and show counties that lacked local investments in industrial machinery and technologies in which China was still playing catchup such as Caterpillar in Peoria, Illinois, and Boeing in Everett, Washington, were most susceptible to higher jobless rates and in need of government support payments. Autor and Hanson found that from 2000-2007, communities in the 75th percentile- ones with greater exposure to Chinese import growth than 75% of all communities- saw a manufacturing jobless rate of about one-third more than communities in the 25th percentile. The government payments mean higher taxes or larger deficits are needed to support these communities, and long periods of unemployment reduce the incentive to work. Michael Spence, a Nobel prize winning economist from New York University, says the world has never seen such a rapid pace of growth as China experienced between 2000-2011, with rates approaching 12% in some years, making past experience and prevailing theories on trade an insufficient guide to what is happening....

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China faces three main challenges and how well it handles them will determine if China does well in the future because the things that helped China in the last 30 years of development are now gradually coming to a close. The three main challenges are a changing work force and the gradual phasing out of the demographic dividend thats responsible according to some experts for a third of the progress this far, the gap between the rich and the poor, and severely constrained resources and supplies of energy and environmental resources. On the first its not something China can do to much about, on the second its going to have to have a more balanced development and repair the network of social services and redirect resources to the poorer sections (see the link to the conference at Lindau, Germany and Nobel Prize Winning economists opinions on this issue). This will bring more discussion and challenges about how to proceed as a lot of actions to build new infrastructure and new construction has been done by taking over land where needed. And on the third challenge has not been done so well so far as the amount of energy required to each yuan of economic output has not changed much, seeing a 3.7% improvement over 2006 in 2007 and only a 2.9% improvement in the first half of 2008 over 2007. All this is why Secretary Paulson cautions that many American might be worrying about the wrong thing, China overtaking the USA, what really is the worry he says is whether serious troubles in China will affect the stability of the USA and global economies....