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President Obama tells Hispanic high school students he supports a bipartisan plan for immigration reform from Senators Graham, McCain, Rubio, and Schumer. A critical part of the plan and the President's plan is a pathway to citizenship for 11 million illegal immigrants. Obama wants to see a pathway "from the outset," senators say this should happen after stricter enforcement requirements are met. If the senators do not move ahead with this plan the White House will put forward his own plan.

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This Wall Street Journal editorial says the Balanced Budget Amendment (BBA) currently being put through the House is unlikely to pass especially with a supermajority tax limitation. It raises questions about the advantages of BBA considering that the 1981 Reagan tax cuts may not have survived the BBA, a period when the U.S. experienced robust growth for 7 years. Unintended consequences could put defense spending at risk such as the Reagan spending on defense that helped end the Cold War, which may not have survived the BBA. The editorial calls instead for a repeal of the Nixon administration's 1974 Congressional Budget and Impoundment Control Act, a law which tilted control of spending in the favor of Congress after Nixon's impoundment battles with Congress over spending. This would mean getting rid of budgeting that uses baselines and increases the budget from one year to the next automatically, restoring the President's impoundment powers, and requiring a two thirds majority for tax increases. The editorial supports the House Republican majority's plan to cut spending in fiscal 2012 by $111 billion and cap spending as a share of GDP in future years....

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Corruption in the election and democratic process in India.

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A sense of entitlement and hold on power can be seen throughout Africa. A lack of the kind of education that creates an ethic of responsibility for the educated and ruling classes, an honest civil service, and experience with and development of democratic institutions with their own checks and balances, account for some of the principal reasons for this failure in government. Even in South Africa, which has experienced several elections and is on the path to gaining experience in democratic government, Jacob Zuma and the African National Congress display some of these tendencies of entitlement to power.

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Steven Mnuchin, a former Goldman Sachs executive is the new Treasury Secretary in the Trump administration. His ties to Goldman Sachs go beyond his own work at the firm. His father joined Goldman in 1957, and worked for his entire career at the investment bank. Steven's brother Alan also worked at Goldman. During the campaign Trump was severe in his criticism of his opponents Cruz and Clinton's ties to the bank. Ironies abound, not only is the new Treasury Secretary from Goldman, his connections go back a generation. The Treasury Secretary under Clinton was Goldman Sachs executive Robert Rubin. Under Bush who followed Clinton the Treasury Secretary was Goldman Sachs executive Henry Paulson. Under Republican and Democratic administrations Goldman Sachs executives have held key positions. Mr Mnuchin was campaign finance chairman for Trump for 6 months leading to him being chosen for Treasury Secretary. Mnuchin joined Goldman in 1985. During the campaign Trump was also severe in his criticism of financier George Soros, making this a key point in a debate with Clinton for taking Soros's support. This report by Das and Ensign points out that in 2002 Mnuchin left Goldman to run a credit fund set up by George Soros. In 2004 Mnuchin founded hedge fund Dune Capital Management LP with Soros support.  When IndyMac bank collapsed a deal with the government was arranged that covered a part of any future loan losses being taken by FDIC, and Dune was one of several hedge funds and private equity funds including Soros funds that acquired it for $1.5 billion. The renamed IndyMac bank was called OneWest with Mnuchin as chairman. OneWest was sold in 2014 at a large profit to CIT Group Inc. This report says CIT Group took a $230 million charge in July 2015 for accounting problems at OneWest.  During the latter part of the Trump campaign after he joined it in May 2016, Mnuchin set up a joint fundraising agreement with the Republican National Committee. This made it possible for major donors to give to the Republican party and Mr Trump. The head of the Republican National Committee is Mr. Lewis Eisenberg. Having run the technology division at Goldman, Mnuchin was prominent in Goldman and investment banking circles in New York.    ...

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Ajami points out the risks of the deal secularists and liberals in Egypt have made in calling on the military to upset the elected government of prime minister Morsi. The liberals and the Muslim Brotherhood were both equally opposed to the military and police intervention in politics in the period following Mubarak's ouster. The six decade rule of the military in Egypt has little to show for it in the modernization of Egypt and improving economic conditions. Egypt has seen this script before, says Ajami of the Hoover Institution- in 1952 the military stepped in after corruption in the political parties and political violence. The results were dismal extending throughout the period of modernization in Asia and Latin America. It has left Egypt frightfully behind in most dimensions of education, healthcare, and technological progess. The lack of training in parliamentary and democratic governance, and in the institutions of democracy are painfully evident- the poor roadmap for democracy laid out by the military, followed by the election, the decrees and authoritarian style critics describe of prime minister Morsi in failing to incorporate liberal opinion in policy, and the flawed secularist calls for the military to overturn the elected government with only one year in office. These institutions will take a long time to build and require patience, flexibility and the gift of wisdom on all sides....

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Voters overwhelmingly oppose the tax increase in 2015 taking the consumption tax from 8% to 10%. The Abe government plans to postpone the tax increase and call snap elections in December 2014. Two thirds of people surveyed said they did not see why new elections are needed. For prime minister Abe this is an effort to win a vote now rather than later when the opposition is weak. In 2012 elections Abe won 295 of 480 seats in the lower house of parliament. LDP party officials say even if this dropped by 20-30 seats it would be a win for Abe reaffirming that his economic policies are taking Japan in the right direction towards growth, and extending the length of his mandate. They point to growth in tourism, and the addition of 1 million new jobs. Further action to stimulate the economy would reduce unemployment further and end Japan's deflationary tendencies.

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This WSJ editorial says the recent agreement at the Caterpillar Joliet plant in llinois is not about leverage but about increasing U.S. manufacturing competitiveness. As U.S. competitivness improves and the economy grows wages will increase. It does little service to management, labor and the U.S. economy for above market wage rates to lead to loss of manufacturing competitiveness as happened in the U.S. automobile industry, resulting in closing of plants.

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Jennifer Hassan reminds readers of the significance of the date June 8, election day in Britain. On this day 104 years earlier Emily Wilding Davison lost her life running in front of the king's horse in the Epsom Derby, a desperate act to gain support for women's right to vote. In response women voted in large numbers leading to a turnout above 69%. 200 women were elected to parliament. Preet Kaur Gill, a Sikh woman became the first Sikh woman in parliament, representing the Labor Party in parliament for Birmingham Edgbaston.

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Alan Blinder points out that the political partisanship that has emerged in 2010 has not served America well, as it has deprived the government of the fiscal policy tools, which would be more effective than the Fed's only mildly effective tool of buying $100 billion a month of medium and long term Treasury debt. The country he says is tied up in partisan knots that prevents the use of the fiscal policy tools, and leaves the Fed with the choice of doing something only nudging the rates on government and private securites a bit (by 30 basis points for Treasury debt and 15 basis points for private securities as an example, not enough for more than a mild impact on corporate spending). The fiscal policy tools are he says of a wide variety and pack a lot more power, and he cites three as examples: offering significant lasting tax breaks for job creation, large enough to produce results (larger and long term than the HIRE program), government hiring directly onto public payrolls and government paying local and state governments for hiring at the local levels, the government offering to compensate states for a cut in the sales tax for a year to stimulate consumer spending. Would'nt this raise the deficit though? Blinder points out that the deficit problem lies in the future. Right now there is so much slack in the economy, that public spending will not crowd out private spending. And with Treasury rates at an all time low, Treasury can finance the larger deficit in the short term. A depreciation of the dollar or inflation, he says, is not a worry, because now there is worry about deflation, and the USA needs a lower dollar to push exports up and rebalance its economy. This does not slight the deficit issue and the culture of poor budgeting among both parties, as Reagan Budget Director David Stockman pointed out in an op-ed piece, but accomodates the real dangers and opportunities of difficult policy choices. This is why he laments the advertising campaign and public relations campaign against the 2009 stimulus bill, and the expected paralysis of fiscal policy from the extremely partisan 2010 midterm elections, and public opinion consumed by fear of deficits. Leaving the Fed with the unenviable choice of using only mildly effective tools. Other experts and columnists mention the risks associated with the Fed's large scale purchase of securities, if this leads to another asset bubble and subsequent collapse, and another bailout needed for financial institutions. Peter Eavis in one column in the WSJ points to the lack of effectiveness of the first round of quantitative easing of $1.7 trillion. And Kelly Evans, in the WSJ, points to the risks of "bad" inflation, if another round of quantitative easing by the Fed leads to increases in the price of commodities such as oil and food (such inflation falling heaviest on lower income households).The US Financial Regulatory Reform bill has received low grades, and recent standards for reserve capital in worldwide banking reforms are stretched out over a long period, leaving fragility in the economic system, if something were to go wrong....

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Chief Justice Roberts let the Obama healthcare law stand arguing that the individual mandate for everyone to carry health insurance acted as a tax, and was on these grounds constitutional. Justice Roberts found middle ground by first rejecting the Obama's administration's argument that asking every American to buy health insurance was legal under the commerce clause, and following this with the a non partisan approach that found the mandate legal under the tax clause. Roberts was guided by the writings of an eminent legal authority, Justice Oliver Wendell Holmes. Roberts referred to this in his opinion saying: "It is well established that if a statute has two possible meanings, one of which violates the constitution, courts should adopt the meaning that does not do so." Legal scholars speculate whether Roberts changed his vote later on or whether the Justice had used the questions in the hearings on the law to explore the idea that the law could be constitutional on different grounds. During the arguments in the hearings Roberts said: "The idea that the mandate is something separate from whether you want to call ita penalty or tax just doesn't seem to make much sense."...

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Estimates by the Congresssional Budget Office in January 2011 show the federal budget deficit in the US at nearly $1.5 trillion in 2011. The deficit would equal 9.8% of the US gross domestic product. In 2009 the budget deficit was $1.4 trillion or 10% of GDP. The CBO estimates show the debt held by the public increasing from 40% of GDP at the end of fiscal year 2008 to about 70% at the end of fiscal year 2011. Republican senators Orrin Hatch of Utah and John Cornyn of Texas called for a constitutional balanced budget amendment in an op-ed published in Politico.