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Shiller points out that statistical models used by economists can't quantify the risk of a double-dip recession. Confidence indexes show gradual trends so they too are poor at picking up the dangers inherent in the increasing levels of uncertainty and the increasing vulnerability of confidence in the economy. The potential of sudden events in derailing confidence is great. He cites the 10 percent drop in the U.S. stock market on May 6, as one example. And the potential of the BP oil spill creating havoc for the Gulf economy is another such event. Shiller says his definition of a douple dip recession looks at the long term, and doesn't see the short term as a way to correctly read the economic situation. He sees a douple dip recession as a rise in unemployment to high levels, and becomes sticky after that, only nudged down insignificantly. Before unemployment can be brought down a second recession occurs, and there could be years in between. Shiller's Buy-on-Dips stock Market Confidence Index prepared since 1989 shows a steady decline in individual investor confidence since 2009....

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This Times editorial questions whether Mayor Bloomberg did the right thing in the manner in which he ousted protestors from Zucotti park in the financial district of New York city. Now that the protestors have been forcibly removed from the park, it is the responsibility of the Mayor to keep his promise to let the demonstrators continue their protest against income inequality, says the editorial. The concern is that the end of the protests at Zucotti park could end up quashing the entire protest movement, which serves to draw attention to serious issues in a democracy.

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Romney says in the first presidential debate he will not increase taxes on the middle class: "I will not reduce taxes paid by high income Americans. And I will not, under any circumstances, raise taxes on middle-income families. I will lower taxes on middle income families." How he would do this is through limiting or eliminating deductions and loopholes among several measures, with work done on this by his advisor Martin Feldstein, Reagan's economic advisor and a professor at Harvard University- Romney's Tax Plan can raise revenue, WSJ, 8/28/2012. Where the Democrats and Republicans differ is that economic growth generated by creating incentives for business to invest and hire also plays a part in generating the additional revenues as it did under Reagan's economic plan. Behavioural factors play a large part of this as much as the incentives and other steps, to create a climate of business confidence- search in Janvoo for the Group "Reagan memo of 1980 by Shultz, Friedman," for more on this....

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Apple App Store sales are estimated at $15 billion for 2014, increasing by 50% from 2013. Apple says it has directly or indirectly created one million jobs in the U.S., with two thirds of this in software development by developers to run programs on iPhone, iPad and iPod. The App Store opened in 2008 after the introduction of the iPhone in 2007. Other jobs created by Apple are the 300,000 working at parts and materials suppliers, or construction workers at Apple facilities. Apple employs directly 66,000 workers in the U.S., with 30,000 of this in retail stores.

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Jan Corzine, Governor of New Jersey has talked to governors from the states of Ohio, Michigan, Wisconsin, New York, and Massachusetts about how best to execute an effective economic recovery stimulus program with the federal government. Here are the ideas they have come up with. The stimulus should cover five areas, infrastructure, countercyclical programs, housing, education, and middle class tax cuts. The principle to keep in mind is to take advantage of the strengths of the federal government and of the state and local governments. Infrastructure investment should be intelligent ones to modernize the capabilities of the country for the next phase of development and competition in the global economy and in making far reaching changes in transportation and energy for sustainable development in a global economy. A key point of Corzine's here is that safety net social programs will need to be shored up or the stimulus effects will be lost. Over the 2 years 2009 and 2010 he suugests the federal government boost its countercyclical spending by at least $250 billion. And it should do this by increasing the federal medical assistance percentages, federal share of Medicaid costs and other health care related programs such as reimbursement to hospitals for treating the uninsured, Temporary Asistance for Needy families, and child care grants. He proposes doubling the federal funding of unemployment trust funds under the Unemployment Insurance Modernization Act, with incentives to cover vulnerable low-wage and part-time workers who are often denied unemployment benefits. Corzine emphasizes this. That even if the Obama administration puts large sums into infrastructure spending, cutbacks in state and local safety net programs would cancel out much of the effect of the stimulus. The reason is simple while the federal government is adding to jobs on one hand, the states without the money would be cutting back jobs and services. This point will be critical in making the stimulus work. The other point Corzine appears to emphasize by quoting Roosevelt at Oglethorpe University in 1932, is that bold experimientation not clinging to rooftops in the flood, will be needed....

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This televised debate of Republican presidential candidates focussed on Iran's development of a nuclear weapon. Rick Perry said he would impose sanctions on Iran's central bank, something the Obama administration is reluctant to do because it might disrupt international oil markets. Romney and Gingrich said they would use military action if other measures failed. Huntsman called for a complete withdrawal of troops from Afghanistan and Iraq, saying: "This nation's future is not in Afghanistan. this nation's future is not in Iraq." Ron Paul said hw opposed military interventions in conflicts overseas. Perry and Gingrich said U.S. aid to Pakistan should be suspended because Pakistan was not a reliable partner.

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Yale Prof. Fair says that evidence from his model shows the yuan appreciation having a positive effect on American jobs looks better than it really is. Two negative effects are in play. The first is that Chinese output decreases will have an effect on Chinese imports that will affect US exports. And the other effect that will come into play is the increase in US prices. His conclusion is that it unlikely we will see a large increase in American jobs from the appreciation of China's currency.

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A Congressional Oversight Panel said the Obama administration foreclosure plan is not addressing the problems of today. It is borrowers with good credit who ave lost their jobs or those with complex mortgages who are not getting help, and this will add to the higher default rates. THese borrowers because they are jobless are not able to afford even the reduced monthly payments. The HAMP program for reducing payments fails to address these problems.

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Friedman reports from an election booth in the Shubra el-Khema neighborhood of Cairo during the Egypptian parliamentary elections in 2012. He says the realities are quite different as the poorly educated women who were voting described their day to day concerns to Friedman about security, education for the children and social services. The Muslim Brotherhood and the Salafist Al Nour party win most of the seats. Yet the democracy protests have empowered all parts of Egyptian society, and has created checks and balances in the process.

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Of the $787 billion stimulus program only $46 billion has gone out so far, mostly to help with unemployment checks and for Medicaid, and only $33 million has gone out for transportation projects.

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How bankruptcy courts can offer a solution to the foreclosure crisis or at least mitigate its effects on the economy and on people. Senator Durbin of Illinois is expected to introduce legislation to put this into effect. It was adopted as a Chapter 12 provision to save farmowners in distress in Iowa in the 1980's, and helped keep many farming families on the farm in that situation. Not all families would be helped as some will not be able to make even the reduced payments given by a bankruptcy judge. But it gives bankruptcy courts the authority to cut through all the red tape and reluctance of bankers and mortgage securities owners to take the initiative and reduce payments, and in the end may actually generate more money for lenders than foreclosure, which has high costs on several dimensions. One cost and one dimension that is not considered is the cost to the economy and to all businesses, from retail to other products, as foreclosures lead to declines in housing prices. This leads in a downward spiral to more homeowners going under water with their homes being worth less than the mortgage, and this in turn leading to foreclosures that lead to further house price declines. The decline in housing prices adds to the incentive to save and reduce spending, which leads to inventory buildup and layoffs. This is why the situation cannot be seen in isolation, and becomes an area where interests of individual parties like lenders and securities holders tend not to be maximized when they follow their personal interest. And there is no party that can take the collective interest in this case except the federal government. ...

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J.P. Morgan Chase announces $2 billion in trading losses in May 2012. The Chief Investment Office unit made a bet with a trading strategy that CEO Jamie Dimon said had grown very complex. These losses could grow or shrink during the rest of the year.

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David Wessel says the U.S. is in a liquidity trap. He says the 500 point drop in the Dow Jones Industrial Averages was a less significant event than the decision by the Bank of New York Mellon to charge clients for keeping large amounts of cash. In a liquidity trap investors are indifferent between keeping their money in cash or in investments providing a return, because interest rates are so low. Today the S&P 500 have in total an estimated $963 billion in cash. The solutions for gettting out of a liquidity trap include government stimulus spending, devaluing the currrency, and generating inflation that could make it easier to reduce government debt. The stimulus approach was adopted in the first 2 years of the Obama administration and there are now increasing pressures to reduce the U.S. deficit. Because of the role of the U.S. dollar as an international currrency and large sovereign holdings of U.S. currency, an outright devaluation of the dollar has not been considered an option. At the same time the weakening of the U.S. currency has helped exports and is encouraged by the Fed and the U.S. government. In a sense all three options are being tried in different degrees and ways. The stimulus was the early response till the deficit concerns began to increase and require attention, the efforts to lower the value of the dollar to increase exports is underway, and the rounds of quantitative easing by the Fed were intended to produce inflation (and avert deflation). All with limited success....

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Talk like this of home buyers getting rebates and so on to stimulate home buying on the oped page of the NYTimes shows how little the debate is focussed on the problem of existing homebuyers and foreclosure. How much can rebates change things when unemployment, company retrenchment and credit tightening is taking place? On the same page editorial on Foreclosure Politics, April 14, 2008 NYT, shows that Congress is engaging in the politics and no one has the courage and foresight to face up to the tough questions posed by the crisis before a downward spiral in prices begins and foreclosures go into large numbers.