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Like Japan China is looking to wean its exporters away from dependence in the export markets- one of the steps agreed on at G-2- in Pittsburgh- and increase spending by Chinese consumers to buy more of the same products at home. Bicycle manufacturer Tandem has lost 40% of the American sales, now it is looking to the Chinese market as incomes are rising in China. As Tandem's general manager puts it in the US the shift is now to buying cheap things. Chinese exports after rising 20% each year for years, recorded a drop in August 2009 of 23% down over August 2008. In China urban household spending was up 9.2%. THe savings by American households jumped to an annualized $566 billion in the second quarter of 2009, quadruple the rate at the start of 2008. Batson gives this account from Shunde in Chinawhere Tandem has it head offices. He talks with managers at Tandem and sees the struggle within the company to some up with anew mindset, and organization, to sell bicycles in the domestic market where other bicycle manufaturers like Giant Manufacturing Company of Taiwan already have a large share in the high end market. Mr Tseng had to convince his fellow managers and the board that it was a good idea, as the domestic market is tough to pentetrate, kickoffs are common, and competition is intense. Tseng says Tandem will approach first the children's market where competitors haven't focussed, and treat as atoy for kids. Tandem will bring higher quality better built bikes into this market. And this is similiar to what it sells to American kids with lots of colors and funny names. Tandem managers aren't sure Chinese distributors or retailers will pay enough attention to their bicycles so they decided to open astore in Shunde and start small and scale up. Tseng says that Tandem will have to pay its tution first and learn about the market. This means it will still continue selling to America and Europe. Chinea's government is now encouraging these efforts to target the domestic market with tax breaks and coupons. But as China and Japn also become more inward looking economies and trade inside Asia increases, the domestic demand is not enough to make up for the loss in the American and European markets. The US and Europe each put in $9.5 trillion into the global economy, even at their current recession diminished pace, compared to the $1.5 trillion spent by Chinese households. Per capita incomes tell the story. In the US $35,486 and in China $2,270. T...

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Former World Bank chief Zoellick points to the need for investments in human capital and productivity improvements in emerging markets such as India, China and Brazil to overcome the problem of slow growth in 2013.

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About 680,000 homeowners applied for the Home Affordability Modification Program, or HAMP, and had their loans modified so that their mortgage payments are reduced. This is only one in four of the 2.7 millon homeowners who tried to to join the program. This according to a Wall Street Journal analysis of data released by the Treasury Department. In 2009 the Obama administration launched the program to reverse the rising home foreclosures in the U.S., by reducing the monthly mortgage payments through lower interest rates and extending the term of loans. About $75 billion was estimated as the cost of the program at the time. Only $1 billion of this has been spent by the Obama administration. The program offered payments to 100 mortgage servicers as inducement to complete loan modifications. About half the applicants or 1.3 million were declared ineligible from the beginning, and the program used stricter qualification criteria than loan modification programs offered by individual banks. Applicants were rejected because the necessary paperwork was not submitted or it was lost by the mortgage company- 266,000 falling in this category. An additional 770,000 homeowners who started the program were later disqualified mostly for the paperwork and eligibility problems, with only a small number rejected for failing to make trial payments. Mortgages less than 31% of pretax income were considered affordable and considered ineligible-255,000 were in this category. Over 80% of homeowners in the southern states of Arkansas, Louisiana, Oklahoma, Texas, Alabama, Kentucky, Mississippi, and Tennessee, received no loan modification....

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In a television debate Jan 18, 2017, Benoit Hamon, a 39 year old former Education minister is seen as the most effective of the French Socialist presidential candidates. He proposes a universal income that particularly supports and creates work for young people ages 18-25 years.

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Since 2004 consumer spending's share of the economy in China has fallen from 40% to 35%.

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This NYT editorial says that before he was elected Mexico's president Nieto, with his book "Mexico- The Great Hope," (Mexico- La Gran Esperanza)presented himself as a candidate who would transform Mexico. Yet says NYT three years into his administration it has turned out to be very different, with no effort to clear up the questions about the murder of 43 students in Guerrero state. Economic growth has not matched the hopes generated after the Pacto de Mexico was approved and new legislation limiting monopolies passed. The slump in oil prices has led to limited results following the opening up of the oil industry to foreign investment. The result is an administration increasingly unpopular in Mexico and failing to deliver on the hope generated in the early months of Pena Nieto's administration. Many of the tasks for transition of Mexico to a modern economy- free of monopolies, crime, a better education system, economic growth in all parts of the country, remain unrealized. During his term as governor of the state of Mexico 2011-2015, Pena Nieto's main achievement was the 608 Compromisos or promises which were placed on the internet website tracking progress on the health, infrastructure, highway and other projects. During the current administration the early results were achieved in the first year through agreement with the rival PAN party for the Pacto de Mexico, to reduce monopolies and open up the oil industry which had falled behind technologically with lack of investment. Since then the progress has been slow, the one bright spot being the auto industry with increased foreign investment. Regional disparities persist with the Bajio region, and the areas around Queretaro, Aguascalientes, near Mexico City growing fastest. Pena Nieto won the 2012 election with 38% of the vote mostly from this region, the incumbent PAN party at 25%, and the left front Of Lopez Obrador 32% drawing support from less developed areas in the south and the rest of the country. Just as the earlier Atenco protests and police action to clear protesters blocking land acesses by the state for expansion of Mexico City's airport, and the Soy 132 student protest movement during Pena Nieto's term as Governor of State of Mexico 2011-2015 affected perception of his administration, the murder of students at Guerrero affects perception of this administration. Nieto comes from the upper sections of the PRI as the nephew of two former governors of the state of Mexico, has a law degree from the Ibero-American University, and a masters degree in business administration from ITAM....

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Chinese government data show that inflation was 3.1% in May 2010. The spread of wage increases in manufacturing after a series of strikes at Hon Hai and Honda Motor suggest that price pressures will grow even further. Analysts warn that China's central bank will have to raise interest rates to control the boom in the economy and property markets; that merely reining in credit will not work. They also suggest the need for swifter action in revaluing the yuan. As wage increases spread throughout manufacturing, this will eventually be reflected in higher prices of end products.

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Mervyn King, governor of the Bank of England, says growth is expected to be "sluggish" with higher inflation. Inflation increased to 2.7% in October from 2.2% in Sept. 2012, with rising costs of university fees. The growth of 1% in the third quarter he described as a one time situation because of the Olympics in Britain. The strength of the pound relative to the euro and the GDP decline in the eurozone also hurt Britain's exports. Economsts at IHS Insight expect the Bank of England to keep the benchmark interest rate at current level of 0.5% for at least 2 more years and increase asset purchases by 50-79 billion pounds in Jan-March 2013. Some economists see the need for other approaches because of tight bank lending. King says the central bank committee retains faith in asset purchases as a policy instrument.

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Figures from the Labor Department show the unemployment rate in the U.S. unchanged for June 2012 at 8.2% and job additions of only about 80,000.

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A recent study by the IMF shows that China has accumulated foreign exchange reserves that are twice what would be needed for traditional purposes such as supporting the economy in a financial crisis. China is still very much a developing country with per capita annual income of $3000, low consumer spending, and rising inflation. This makes the policy of accumulating reserves and preserving an undervalued exchange rate to support export companies counterproductive. There is growing debate about this as inflation is becoming difficult to control. Yu Yongding, an advisor to the PBOC monetary policy committee says China as a developing country should not be exporting capital, which should be used to raise living standards. A rising exchange rate would increase spending power of people throughout China. Fan Gang, head of China's National Economic Research Institute, was a member of the central bank monetary policy committee. He wrote in a recent essay arguing for a higher exchange rate, and societal, tax and other changes that help increase China's household spending. Central Bank governor Zhou Xiaochuan said recently that China's foreign exchange reserves have exceeded reasonable levels that the country needs, adding to inflation risks and making it difficult to conduct monetary policy. The reserves are now over $3 trillion, pasing that mark in March 2011 after increasing 25% in the last year....

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The cost of tution for four year colleges has doubled in the U.S. since 1985 even after adjustment for inflation, according to the College Board. Over 3 million households in the U.S. owe more than $50,000 in student loans. Ths is ten times the figure of 300,000 in 1989, and about four times the figure of 794,000 in 2001. Upper middle income families with incomes between $94,000 and $205,000, based on Wall Street Journal analysis of U.S. Federal Reserve data, shows they owed an average of $32,869 in college loans in 2010, up from $26,639 in 2007, after adjusting for inflation. This is affecting the choices parents and students in the middle class are making of colleges, preferring to go to second tier colleges to better manage the costs of tution.

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This report in the Economist points to the improved situation for Mexico after the scare from Trump's plans to build the wall and deport large numbers of immigrants. The peso dropped by 15% between mid November 2016 and January 2017, but has since recovered, and non-oil exports were up 5.5% in February 2017 over prior year with the manufacturing growth in the U.S.  Growth forecasts are now up from about 1% GDP growth previously to 2% for 2017, close to the 2.3% in 2016. Much of the change in mood in Mexico is a result of the failure of the early travel bans being blocked in the courts, the failure to get health care legislation through Congress, and the effort by the trade advisers and economic advisers around Trump to move Trump's positions more to the centre and closer to traditional Republican party positions. Wilbur Ross, the Commerce Secretary, says " a sensible agreement" can be reached with Mexico. Peter Navarro, trade adviser, talks about making "a mutually beneficial regional powerhouse." Robert Lighthizer, a veteran from the Reagan days, is likely to be made the new U.S. Trade representative. Still as the Economist points out the "20% border adjustment tax" continues to be supported by Paul Ryan in Congress to pay for tax cuts. But certainly the mood has lifted in Mexico in the first 100 days. This is true for economic policy in relation to China and Germany, and the close circle of Ross, National Economic Council head Gary Cohn, and Secretary of State Tillerson is moving Trump to the centre in policy statements to get things done. Mexico is faced with internal challenges of reestablishing the rule of law, improving infrastructure, reducing red tape and corruption, addressing problems in the education system, to promote economic growth. These challenges may prove to be as large as the external challenges were once thought to be. ...

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Obama says oil sand leave a big carbon footprint in his interview with the Canadian Broadcasting Corporation, just before his visit for talks with Candian Prime Minister Harper in Ottawa, Canada. The talks will focus on climate change, whether the oil sands can continue to be exempt from regulation, and other issues including a "Buy America" provision.

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There is over $150 billion of additonal spending on education in the Obama stimulus plan being worked on in January 2009. There are several important aspects of this plan. One action will prevent literally hundreds of thousands of layoffs of teachers, according to Education Secretary Arne Duncan, as revenues of local districts drop. In a response to requests from Democratic party governors Congress has allocated $79 billion to help states facing large fiscal budget gaps to maintain government services, and especially to prevent cuts to education services fro kindergarden to college. Another aspect is the effort to reinforce Title 1, a program of specialized classroom efforts to help educate poor children, by increasing 2009 fiscal year spending from $14.5 billion to $20 billion, and raise spending for disabled children from $11 billion to $17 billion. This helps meet the unmet needs of the No Child Left Behind program. Another effort on the stimulus side which would create jobs for construction activity and do this with spending that will bring benefits in future years for along number of years in the future, is the federal government now taking abig role in the building and renovation of schools. The federal government will now spend $14 billion for the renovation and modernization of elementary and secondary schools, and $6 billion for the same for higher education. The stimulus also has tax provisions under which the federal government will pay the interest on construction bonds issued by school districts. The Education Secretary says that the $20 billion for this will create a huge number of construction jobs because so much of the school system building infrastructure needs repairs. In the area of higher education the allocation for Pell Grants used for student aid is increased to $27 billion from $19 billion. These aspects of the stimulus program are ones that will pay off over a number of years into the future. ...

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The US needs 100,000 jobs a month just to keep up with population growth. And 7.2 million jobs have been lost since December 2007. Where will the new jobs come from to replace lost jobs in retail, banking auto and other job losing sectors and when, and will some jobs never come back. Global Insight forecast show 8.1% unemployment in 2013, suggesting that jobs needed for population growth and some jobs from the pool of job losses will not be recovered for some years.

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The economic relationship between Texas and Mexico and the presidential elections in Mexico. The effects on immigration of policies pursued by the presidential candidates.

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During the Ozzie and Harriet era of the 1950's Americans saved 8% of their disposable income. Now thrift is becoming popular again. And one estimate is that as Americans go back to saving like this again about 10% of disposable income may be saved. This is also because of the need to pay down debt. And this means consumption will be much lower and businesses slow to add jobs.