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Russia's leading business paper Vedemosti summed up the situation on Dec. 17, 2014, in its editorial- "This is a very dangerous situation; we are separated from a fully fledged run on the banks by just a few days..If the currency market is not reassured right now, the banking system will require large external support." Warning signs were evident at a banking conference in Moscow in October 2014 when the Economy minister, the central bank head Nabiullina, and the head of the largest bank Sberbank, German Gref, expressed skepticism about the economic policies and the risks involved. Not until Dec. 17, was a decisive response evident and the risks of a collapsing ruble openly addressed with economic actions by the Putin administration. A collapsing ruble would have repercussions on the global financial markets and slowing global economy, increasing potential geopolitical risk, and adding to risk of contagion for other emerging markets, which was reflected in the nervousness of global financial markets on Dec 15-16, 2014....

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Paul Peterson, a professor who heads the Program on Education Policy at Harvard, says that public school education has not done as well as private or charter school education. In two areas character or values, and school discipline, public schools lag far behind private schools or charter schools. Private schools score 59% and 46% in these two areas, public schools lag far behind at 21% and 17%, in the 2016 Education Next Survey, says Peterson. He says by appointing Betsy DeVos as Education Secretary, the Trump administration sees the need to think how public schools can benefit from improvement in these areas.

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Von Mark Schieritz of Germany's Zeit Online describes the changes underway following the election campaigns in the U.S., and France, and the Brexit vote in Britain, all signalling the discontent of people left behind by the tech, capitalism, trade and globalization changes of the last two decades. The appeal of one time fringe politicians using racist slogans and divisive rhetoric to appeal to those left behind, appealing to people lacking intergenerational mobility, and without much hope for a better future, is a serious concern. People who are gullible enough, lack college education, or racially isolated so that they are not likely to look carefully at what is being offered in terms of programs and change of competing parties, and likely to overlook the hard and difficult road for corrective course of action, because of anger and pentup fears. Schieritz cites as part of this change the unanimously approved conclusion in its final declaration at the G-20 meeting in Chengdu, China- "The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness." Yet this can be a sort of "too little, too late."  Bankers who are cited in an email going around Wall Street lack credibility with groups on Main Street, to people adversely affected by tech, trade and globalization changes that have been persistently ignored for over a decade, close to two decades. More convincing is the tone of Theresa May, the British prime minister's first statement outside 10 Downing Street- who spoke of the "burning injustices" and her determination to make this a top priority of her government. Still more convincing are the programs to invest $275 billion over 10 years in infrastructure put forward by the leading candidate in the U.S. presidential election of 2016, to provide easier access to public universities and colleges to those left behind, as a sure way to create new jobs and address intergenerational mobility. In fact every leading candidate had made the loss of upward mobility their central plank already in 2015, long before Trump and Sanders started their campaign. The real hope lies in western leaders Merkel, May, and Clinton, all keenly aware students of changes, all women by the way who have sensed the injustice and have the ability to come up with something new and promising for the future, after learning the lessons of the past. ...

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A study by Prof. Peter Petri of Brandeis University, shows the Trans Pacific Trade Agreement boosting economic output in the U.S. by about 0.4% by 2025 or $77 billion. Winners are biologic drugs which get long term patent protection, tech firms and software engineering services. Losers are the Detroit auto industry with higher auto parts imports, light manufacturing, and some heavy manufacturing sectors. Prof. Douglas Irwin of Dartmouth College and other experts say it is not clear how U.S. consumers and businesses will benefit. The import duties as a percentage of total imports are now at about 1.4%. Experts say about 4/5ths of the benefits of TPP for the U.S. are from opening up trade in services and new rules for investment and commerce. TPP includes Pacific countries Canada, Australia, New Zealand, Chile, Mexico, Malaysia, Singapore, Vietnam, and Japan. Issues are environmental rules, worker protection and standards, agricultural imports in sensitive countries such as Canada and Japan, affordable drugs in poor countries....

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Krugman points out the gains on three fronts evident from the Census Bureau report of 5.2% gain in median income of households in the U.S. He says the first is the growth in incomes of ordinary working class and middle class families, second the large decline in the poverty rate, and third the further rise in insurance coverage in 2015 for people without health insurance. He points to the steady efforts of the Obama administration to improve lives of ordinary families as working based on the Census report though results have taken time, and could have been better. The Stimulus, says Krugman could have been larger following the blow of the 2009 financial crisis and increased unemployment at the time. Janet Yellen at the inequality conference of the Boston Fed in 2014 pointed out the problems of 62 million households having net worth of about $10,000, and why this was running against the American idea of a better life for all Americans. In that sense the Census report is a movement in the right direction but a lot remains to be done.   ...

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There are similarities in the Republican and Democratic party platforms in 2016. One area of agreement is in the reinstatement of Glass Steagall Act. That legislation made in the Depression period to separate commercial banking from investment banking was changed  when president Clinton made changes in a deal with Senators Phil Gramm and Jim Leach in 1999. The too big to fail problems of banks and the problems of investment banks during the 2008 financial crisis are attributed to the lack of Glass Steagall protections for financial stability and safety. The result is that in the post 2016 environment banks can expect a tougher regulatory environment. Another are is in trade where both parties are expected to take tougher positions to protect U.S. interests. The Republican platform calls for "better negotiated trade agreemets that put America first."

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Michael Getler describes the missed opportunity under President Obama for using one of America's most talented diplomats to engineer a peace agreement between the warring factions in Afghanistan- the U.S., the Pakistan army, the ISI and its support in the army, the Taliban, and the other parties such as the Haqqani faction and the Afghan government of Karzai. Holbrooke had used his experience for another President, with the same force of his larger than life personality, when he helped bring about the Dayton Accords in a similiar area of stubborn ethnic strife. Could Obama have tapped Holbrooke's skills and set aside the distractions of his personality as coming from an American with unique gifts, talent and achievement, is the question Getler asks. And is this a comment on the nature of the Obama Presidency and America's poorly invested hopes.

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How will countries like India generate jobs when technology enables manufacturing and other activity to do work with fewer and fewer people. Even Hon Hai in China is shifting work to robots. Technological progress is leaving more people unemployed and widening income gaps with the benefits going to a few people, says the Economist in this research based essay. It will require carefully managed governance to invest in infrastructure, raise skills of less skilled workers through education, and wage subsidies for those left behind to ensure our current system works in the future.

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

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Galston cites a Federal Reserve Board of Chicago 2014 study showing setbacks for black people in achieving improvement in income status. Even for children born into middle income black families about 55% are expected to fall below middle income status compared to 36% for children of white middle income families. The problem is not just the gap as Galston points out but what it says for the declining income mobility for the white middle class when 36% are likely to see declining status and prospect for the future, and 23% will see no improvement. Overall it shows a lack of income and social mobility for whites and minorities alike compared to the past improvements since the 1960's, not a bright prospect and less hope for the future the way things are, and why so many of the establishment candidates and existing policies are being questioned by voters.

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Kenneth Rogoff of Harvard University, expert on debt crises, and author of "This Time is Different," says China is one of the best examples of the idea that this time is different, with the idea created that somehow China was impervious to the massive build up of debt. The debt is now over 250% of GDP, and this was possible for so long because of the high savings rate of 30% of disposable income and the millions of young migrants moving to cities to work in manufacturing. The growth of shadow banking, opaqueness in decisionmaking, unreliable data, use of local government financing vehicles, the bubble in housing with a large portion of loans tied to the real estate market, all combine to create serious problems that will take a long time to sort out. Rogoff says the crisis in Tianjin with the deadly explosions in the port area, and the government's inability to provide answers to questions from a alarmed public, only added to the uncertainty and loss of credibility. Rogoff says he hopes the trillions of dollars in reserves will provide China with the tools adequate to tackle the debt problems before they spread to other countries....

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Hillary Clinton narrowly loses the Michigan primary to Bernie Sanders in March 2016, as the Sanders campaign focusses on Clinton's support for trade agreements that hurt American workers and lead to loss of manufacturing jobs. About three fifths of voters in the Michigan primary considered this a major issue. Many less educated younger workers see their job prospects diminish and wages drop with free trade that hurts American manufacturing jobs. Bill Clinton signed the NAFTA agreement with Mexico, and as a member of the Obama administration Clinton supported the Trans Pacific Trade Agreement, later opposing TPP when she left the cabinet. Sentiment against trade that hurts manufacturing jobs in the U.S. is strongest in midwestern states such as Michigan, Ohio and Illinois. This was also a major issue benefitting the Liberals under Justin Trudeau who won in Canada's industrial Ontario province which has suffered hollowing out and loss of manufacturing jobs under the Conservative Harper administration. In the U.S. the issue goes back to the Clinton Administration for two decades. New jobs created by Apple, Google, and other tech companies pale in comparison with the industrial jobs created in another era that benefitted working class families. This issue and high unemployment or under employment, lower wages for working class families, was a major issue in the 2016 U.S. presidential election campaign. Widening wealth disparities, and lack of upward mobility, high tution and healthcare costs for ordinary families, dominated the campaign in the U.S....

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Frederick Harris of Columbia University says there is a price to be paid for a black president and it may just be too much for the average black person. There is a difference betwen symbols and substance, betwen a role model and accountability in a representative democracy, which is sadly lacking when the black elites, clergy and politicians fail to debate the issues about the problems facing the black community. Problems related to the increasing poverty among black Americans, and the 14% unemployment for black people. There is he says a strange reticience among the black elite to hold the president accountable on these issues just as they would have done for any Democratic president, even one who was as popular with blacks as Mr. Clinton. He says the experience with Obama is not even remotely comparable to the transformative nature of the work of Rev. Martin Luther King in the black community. It may stem from Obama's multiracial background, growing up in many countries, his elite education and being part of a liberal elite more than of the black community. The price is too high in economic and social terms for the poor or average black person and it has created a divide between the average black person and the black elite, with different concerns and different priorities. Harris points out that poor and poverty are words not mentioned often by Obama. Related to this is the foreclosure crisis in which ordinary black people were hardest hit with no effective help from the president to homeowners badly needing relief. Sheila Bair of the FDIC and Martin Feldstein advocated aggressive help for homeowners under water which did not come from the president. Showing not just the limits of a black presidency, but false hopes, inexperience and lack of leadership in issues that mattered to all Americans in the housing and foreclosure crisis. A populist from Kansas, as Sheila Bair describes herself, had the right instincts and courage of convictions which the president lacked and the entire country needed....

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Porter cites a report by Kai Daniel Schmid and Ulrike Stein of the Macroeconomic Policy Institute in Dusseldorf. The report shows the top 10% of Germans having 26% of the country's income before taxes and transfers in 1991. This increased to 31% by 2010. For the same period of about 20 years the bottom half of the population took in 17% in 2010 dropping by 5% from 22%. The growing income inequality in Germany is comparable to what has happened in the U.S. over this period.

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The benchmark price of U.S. crude oil dropped to $31.41 a barrel on January 11, 2016, as oil prices continued to drop sharply following a slowdown in China, appreciation in the U.S. dollar and no cuts in production from Saudi Arabia. Analysts expect a crisis for energy producers that is deeper than ones in 1986, and five plunges in oil price all the way back to 1970. With the oil prices at $30 and expected to drop below $30, the companies that took on a lot of debt have no choice but to keep up production. In the process many may find themselves in bankruptcy. Private equity with capital of $100 billion is likely to come in at this point to buy cheap assets without the debt, say analysts. U.S. banks energy portfolios are small, with Wells Fargo energy exposure only 2% for oil and gas loans in the third quarter of 2015, or about $17 billion. Loans that are rated "sub-standard. doubtful or loss," are projected at 15% of loans to energy producers, about $34.2 billion, in a biannaual review by banking regulators. The unusual aspect of this energy price slump is that production is not declining with falling prices- oil production in the U.S. was estimated by the government at 9.2 million barrels a day in Jan 2016- 1% higher than at the beginning of 2015 when prices were over $40 a barrel....

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Some startling statistics on U.S. wages and incomes and the increase of part-time workers, by the publisher of U.S. News and World Report, Mortimer Zuckerman. He cites the Pew Research Center reports that show one third of Americans identifying themeselves as lower class or lower middle class compared to one quarter before 2008. This affects social mobility with the increasing gaps in incomes, education and social behaviour acting to reinforce each other and leading to even lower future mobility. Industries that are showing growth are in low wage occupations. The Bureau of Labor Statistics shows growth in future in industries noted for low wage part time work- health care, social assistance and retail, with some jobs lacking minimum wage and overtime protections. Revealing in this respect is that in the last 2 years fully 43% of net employment growth is in the 1.7 million jobs added in low wage work in food service, retail and employment services industries. The number of Americans working full time declined by 5.9 million since Sept 2007, part time workers increased by 2.6 million. The effects of higher part time workers and job recovery predominantly in lower wage industries is likely to affect consumer spending and slow growth....

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Dan Balz says former prime minister Blair's policies in Britain (1997-2007) closely followed the policies of moving to centrist positions of U.S. president Clinton, with Blair's election in 1997 following Clinton's wins in 1992 and 1996. Clinton followed the Reagan years and Blair the Thatcher years in government, in modifying the early postwar ideas about the economy. The election of Corbyn by 59.5% of the vote of Labor party members, exceeds the 57% achieved by Blair in 1994. The opposing candidates did very poorly. Yvette Cooper, who most resembled Blair's positions was seen as waffling on issues by not taking clear positions. She lost badly with 4.5% of the vote, showing that something significantly has changed with the the deep recession following the 2008 financial crisis, and the recovery through years of austerity policies under Cameron's Conservative government. Balz's view is that this is likely to bring up the same debate in the Democratic party- Corbyn proposes a national investment bank for large investments in education, health services and infrastructure, and a reversal of Labor policies introducing fees for college education to increase opportunity. Sanders has not proposed a national investment bank, but says he would invest in education ( including reversing the spiralling education costs), health services, infrastructure, and other areas. Hillary Clinton has made the issue of upward mobility for the middle and working class a central issue in her campaign, but lacks the authenticity claimed by Sanders, who has tapped into anti-establishment feeling following the lack of recovery in wages under 7 years of the Democratic party government in the U.S. In this context Jeb Bush has also stated at the 2013 CPAC conference that social and economic mobility is the central issue of our times, only he would approach it by giving business incentives to increase business investment to create jobs and increase wages; and by adopting a tax code that would be also fair to the middle and working class....

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Samuelson discusses the differences between the Bureau of Labor Statistics figures for June 2014 using the Payroll Survey and the Household Survey, each telling a different story. According to the Payroll Survey 288,000 jobs were added. The Payroll Survey is a monthly survey of 554,000 business locations, with firms asked to give the number of people on payrolls, pay and occupations. The Household Survey of the BLS asks households in monthly interviews with 60,000 Americans whether they have a job, is it part time or full time, are they looking for full time work, or jobless and for how long. The Household Survey showed June 2014 job increase at 407,000, using an estimate of 1,115,000 increase in part-time jobs and a loss of 708,000 full time jobs. Of the two the payroll survey is larger and considered by economists to be more representative. Other statistics show the parttime workers at about 3 million higher than 2007 before the 2008 financial crisis, suggesting the shift to part time jobs has been one negative result of the crisis....