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The implications of China's support for Russia on Ukraine for Eastern European countries and for NATO. As the war drags on Eastern European countries say China's support of Russia in trade and commercial relations prolongs the war in Ukraine.

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Portfolio manager Robert Arnett, who manages two of PIMCO's funds, has some alarming things to say about the environment retirees face in the future. In ten years for every working age person added to the workforce there will be 10 new retirees, the complete reverse of what it was ten years ago when there were 10 new working age persons for every new retiree. The impact of this will take the shape of many more retirees selling stocks and bonds to live on and fewer buyers for the bonds and securities, lowering the prospects for higher prices for bonds and securities. He expects the demand for goods and services to continue with higher prices. He sees stocks giving a nominal return of about 5%, bonds a nominal return of 2-4%, for a balanced portfolio yield of about 4%, during the next 10-20 years. After inflation and taxes the returns will be very thin. Expectations of 10% returns do not take into account deficits, debt, and demography in developed countries, says Arnott.

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The new faces in the Biden administration on economic policy are Janet Yellen, as head of the central bank, the Federal Reserve, and Cecilia Rouse, a Princeton labor economist, as head of the Council of Economic Advisors. In this report WSJ looks at the economic policies of the new administration after Mr. Trump rejected globalization and international trade agreements that were not in America's interest or that hurt American workers.  Informal conversations with experts suggest WSJ says, that globalization is now suspect as a way that benefitted China and other countries including Germany, and hurt the U.S. France, Britain and other countries in Europe that were not strong exporters. This hurt their industries which were eroded by imports resulting in the three decades long destruction of communities across these countries that depended on manufacturing. It has also hurt countries like India that let their markets be dominated by Chinese imports, with a reversal of policy in 2020 with self reliant economy under "Atman Nirbhar" policy as the new goal. Mr. Trump's tactic in this trade war was to fight back to regain America's position in manufacturing with tariffs on imports. The trade deficit had to come down with China just as it had done with Japan decades earlier. This was starting to happen. One problem in bringing down the imports was the increase in the value of the dollar, as Janet Yellen has noted. The new policies will look at what the effective policy will be while keeping this goal in mind.  Both Yellen and Ms. Rouse have spent years studying labor markets and Ms. Rouse is quoted here as saying: " With open trade there are winners and losers. The losers are really losing, and we need to take care of them and take on more nuanced models of international trade as a result." Other experts from the earlier Democratic administrations such as Prof. Frankel at Harvard say that there needs to be increased focus on American workers left behind by trade, technology and unequal education, with more spending on preschool, infrastructure and health. All this suggests that there will be a continuation of U.S. policy in challenging Chinese use of globalization to advance its interests, chastening Americans on the use of the very word globalization which can mean different things to different people based on how they can gain advantage. The word may even be entirely dropped in favor of what the policies are and what they do for the American worker, American communities including small towns, and the American people, spelling each of these out every time supply chains and the global economy is mentioned. The new administration will get an opportunity to show that it too can come up with new ideas and action plan to strengthen American manufacturing and jobs. It will also have to show substantial results as people have lost patience with Democrats and Republicans on the lack of progress in rebuilding America's leadership role in the world economy, and in defending American workers and factories. Clinton, Obama and Bush all offered false promises on trade with China ignoring the damage this had done to American leadership in the world economy. Clinton with support for China's entry into the World Trade Organization, Bush with foreign wars and costly diversions and regulatory failures with banks that led to the 2009 deep recession hurting Americans, and Obama with the lack of will and interest in America's leadership role in the world as the dominant nation in manufacturing,   ...

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Compare this fine of $100,000 for an interview with Tories Rishi Sunak by GB News Program, a British broadcaster, days before the election by British Broadcasting Regulatory Authority Ofcom, with the unregulated and free for all ways of PACS throwing their weight around days before the US election. The US democratic framework owes much for its origins in the British parliamentary democracy and its institutions and concepts, yet in the framework for parties vying for support there is a glaring missing element of restraint and rules, regulatory principle so that anyone can run for office. Under the current system which is not a given and which was written by human beings and can be corrected most people are not keen on raising huge amounts of money are excluded from public service, a great loss to the nation.

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French plans to cut energy use by 10% from 2019 levels in 2 year are announced by prime minister Elisabeth Borne. The target is 40% reduction in energy use by 2050. The key is to make energy use more efficient says president Macron. The efforts include turning down thermostats in buildings to 66 degrees Fahrenheit. Households are asked to start heating 2 weeks later than usual and end heating 2 weeks earlier than usual this winter. Civil servants will get about 3 euros a day for working from home. Remote work for some days a week is encouraged and carpooling is expected.

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Of the $12 billion in planned improvements for NY subway infrastructure this year only $2.9 billion will be spent in 2024. Congestion pricing is expected to generate $15 billion which is allocated to fund NY subway infrastructure. Lawsuits from the Governor of New Jersey and others now affect how much money goes into the subway improvements. This is not for a modernization of the NY Subway which would cost much more. It shows how year after year essential infrastructure is being starved of funding even as money gets allocated to non essential investments by capital markets in the US, and waste is rampant in capital market investments.

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The US dollar is rapidly appreciating against currencies such as the Indian rupee, the Japanese yen, the euro and the pound. The aggressive interest rate policy in the US and investor sense that the US central bank will take action against inflation is one reason the US dollar is stronger and will continue to strengthen in coming years. The weakness of emerging market currencies, the Bank of Japan's policy to continue keeping interest rates low, and the stronger US economy vs the European economy as Europe struggles with a war and cutoff of energy supplies from Russia, are other reasons for a stronger dollar in 2023 and beyond.

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A popular show on Japan's television network TBS and on Netflix Japan is "Extremely Inappropriate" that takes a widowed physical education teacher boarding a bus in 1986 Japan straight into 2024 and shows him with his rebellious teenage daughter. It contrasts the casual sexism, long work hours and culture of that time in the early postwar years with the concern for sexual harrassment in the workplace, and a culture that is moving away from long work hours. It sees something to value in both eras as the father changes as he adapts to the present and still keeps some of the better parts of the previous era. 

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Mira Kamdar provides this first hand account of life in Pantin, France, in March 2015, a banlie on the northeastern outskirts of Paris, postal code 93. She describes the exceptional effort of Mayor Kern to bring the community together for a brighter future, and the plans to better integrate Paris with the suburbs.

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The situation in Brazil for empregadas or domestic workers is similar to the situation in India, two of the hardest hit countries by coronavirus. Domestic workers played a large role in Indian homes in cities, and in Brazilian cities. With the dangers of virus spread and social distancing many of the domestic workers are kept away and homes are now cleaned, meals cooked, by the homeowners. Some empregadas are finding other ways to make a living by preparing meals and selling them or providing them to homes they worked in. Domestic workers in India are also doing this.

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This report in the NYT looks at median household checking account balances of households in the lower classes, middle classes and upper income groups as they changed during the pandemic. The deep plunges are seen in the graph for the lower classes making below $30,000 and a jump of as much as 100% after every effort by the government to send in pandemic aid money. The income groups making over $70,000 also benefited from the government aid money by as much as 40%. Six months after the aid the household checking balances show sharp declines.

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About 14.5% of U.S. households went through some form of food insecurity in 2013, according to the U.S. Department of Agriculture.The problem is acute on some campuses. In the 10 campus system of the University of California about 40% of the student undergraduates now come from households with yearly income of less than $50,000. Many students with full tution aid come from a low income household, and have to reduce meals or use a food pantry. About 183 schools are now part of the College and University Food Bank Alliance.

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Indian prime minister Modi shown in a meeting together with Biden of the US, Fumio Kishida of Japan and Albanese of Australia at the Izumi Gallery in Tokyo during the announcement of the joint efforts for launching and promoting the Indo-Pacific Economic Framework for Prosperity. The IPEF led by the US will have four pillars of trade and supply chain resiliency, clean energy and climate change action, taxes to promote investment in infrastructure, and good governance. Seven of 10 members of ASEAN have joined including Indonesia. India is a key partner of US and Japan for the new IPEF economic alliance. Prime Minister Modi of India says about IPEF- "India will work together with its IPEF partners to build an inclusive and flexible Indo-Pacific Economic Framework. I believe that resilient supply chains must be based on three pillar foundation of trust, transparency and timeliness, and I am sure that this framework will make these pillars strong and lead to prosperity, peace and prosperity in the Indo-Pacific region." Attracting large investments in India and other reliable partners in a new supply chain that shifts out of China are part of the Biden plan working together with Japan and South Korea. Investments directly into the US are also part of the same plan. Gina Raimondo US Commerce Minister says- "I would say, especially as businesses are beginning to increasingly look for alternatives to China, the countries in the Indo-Pacific Framework will be more reliable partners for US businesses." US National Security Advisor Jake Sullivan says the IPEF is intended to boost US manufacturing. By boosting US manufacturing and technological advancement with investments inside the US that directly benefit American workers and families the IPEF will serve the US and the free world in ways that will shape the coming decades to 2030 and 2040. With investments in the US will come investments in India as a reliable manufacturing partner to replace China by 2030 is envisioned by Jake Sullivan and president Biden. ...

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Parents feel that the UK system is failing the country by focusing too much on exams and not enough attention is paid to well being of students. Not enough investment is being made in education for Britain to increase productivity and generate growth. A false division is being created in the debate between knowledge and skills when both are needed. Business is not finding the well educated people it needs. If the Conservatives don't do it Labor will take it up at the next election. These are some of the conclusions from the Times Education Commission Report for the UK in this analysis that proposes a set of fundamental changes.

 

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Was president Biden right to get the Fed, the FDIC and Treasury to cover the uninsured deposits in Silicon Valley Bank. Is it a good use of taxpayer money? $25 billion was provided by the Treasury to the Fed to stabilize other medium sized banks. The answer from the administration is that it was necessary to protect working families from any effects on the overall economy of the ripple effect on medium sized banks that were left unregulated by former president Trump's 2018 roll back of regulation on banks with less than 250 billion in assets.The Office of the Budget has shown that the government recovered all except $31 billion from the much larger bailout of 2008. Paul Krugman in NYT says the assets of SVB are invested in long term US Treasury securities which have value and should cover most of the cost of insuring depositors. Moral hazard is covered by the management at SVB and Signature losing their jobs and by the losses in stock value and bonds which are left unprotected as a cautionary signal to investors. A much larger impact is hidden in the hearts and minds of Silicon Valley who will be expected to reflect on the nature of their self serving deal where they oppose regulation of tech monopolies and of regulatory action except where it serves their  own interests, and see a laissez faire system that works for them but not for workers and families across communities in states across America. A situation made worse by the loss of America's manufacturing base on which issue Silicon Valley neither reflected or acted. ...

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Mike Clancy of The Prospect writes in The Times of London that he has found that two thirds of remote workers working from home would like to have the right to unplug from work and not be expected to connect with the office at some point in the day, and that this would have a hugely beneficial impact on mental health.   The biggest problem that workers working from home have found during this pandemic for one year now is that it blurs the line between work and life outside of work having a negative impact on one's mental health. Surveys have found that about half of remote workers like the idea of working from home, having time from commute and being able to be have more freedom from being tied down to the office space. Companies are looking at cutting about 25 to 50% of office space but have not looked at the problems workers have and not set new rules about when the line for work is set and workers can cut off from work and not be expected to be reachable by the office. Clancy even goes on to say that companies have looked at the problems of the last century not this one and largely stayed away from tackling the real problems of workplace- stress, burnout and surveillance. Lyrarc recommends readers look at the way Germans approach this idea of blurred distinctions between work and life outside of work in the idea of "Feierabend" that literally means breaking away from work at some point say 4.00 pm or 5.00 pm to take a bike ride or walk or do something else. ...

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April 2025 WSJ forecast of recession in next 12 months is 45%. In 2022 and 2023 forecasts for recession in US were at 60% higher than the 2025 forecast of 45%, yet no recession happened.  It all depends on the USTR's Jamieson, and DJT's advisers Bessent, Luttnick, and Navarro, and Lighthizer, DJT using all their experience and carefully using Tariffs to achieve US goals. This means working out the details of the US economy, of inflation, GDP growth, cost of living, to maintain confidence of people in America, the confidence of the working people in America. Action on pharmaceuticals bringing production back home is a win as here it is a clear way to get companies to reduce prices. Permitting imports removing backward looking laws restricting pharmaceutical imports would create the competition that was missing. US automobile companies knowing the government has their back can actually cut prices in the first 12 months of 2025, with Toyota and Hyundai-Kia following suit. This would remove another source of inflation. On iphones and computers getting companies to create a new US+1 with India by 2027 would enable 60% of iphones and computers to be made in India and the US by 2027, The new strategy would be to combine the industrial base of India with the US to create plenty of good US jobs as the priority. Piece by piece the puzzle can be put together with attention to details and keeping overall goals in mind to restore US manufacturing and US industrial base, jobs, that will create its own tailwinds for decades of future growth.   ...

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Food security for India comes with the achievements of agricultural scientist MS Swaminathan. Coming from Kumbakonam Tamilnadu, the eminent scientist's father was inspired by the movement of Gandhi for independence. Swaminathan took up the cause of farmers who were the vast part of the population of India in the 1920's when urbanization was just beginning. He studied at agricultural colleges in Coimbatore and New Delhi, and at Cambridge and U of Wisconsin, before heading the Agricultural Research Institute. By the late 1960's he was a leader in India's Green Revolution supported by the Kennedy and Johnson administrations in the US.

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Teachers are packing up classrooms for the last time says this report in WSJ. Worn out by the covid pandemic, under staffed schools and political battles teachers are leaving in large numbers. About 300,000 public school teachers and other staff left the field during the 27 months of the pandemic, according to Bureau of labor Statistics data. More teachers are thinking of doing the same, A National Education Association poll conducted in 2022 found 55% of teachers saying they would leave earlier than planned. Teachers are finding better pay and working environment in other professions and in business. Teachers of younger students in the early grades say teaching should be about kids learning but that isn't true anymore. 

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Coronavirus cases reach a daily high of 53,000 in the UK, December 28, 2020. London has twice the rate as England. There are calls for a nationwide lockdown as the NHS faces a crisis.

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The Federal Trade Commission says food companies in the U.S. spent $2.3 billion in 2006 for advertising to children. With the epidemic in childhood obesity in the U.S., this raises serious questions about how product packaging, images and themes affect the eating behaviour of children. New guidelines have now been written at the request of Congress. They were written by the F.T.C., the Food and Drug Administration, the Agriculture Department, and the Centers for Disease Control. The regulatory agencies say they will take comments and consider changes before submitting a report to Congress. The guidelines call for foods advertised to children to include healthy ingredients such as whole grains, fresh fruits and vegetables, or low fat milk. The foods cannot contain unhealthy amounts of sugar, saturated fat, trans fat and salt. The sugar requirement would have cereals contain no more than 8 grams of added sugar per serving. Fruit Loops for example contains 12 grams of sugar per serving. The guidelines apply to both children and teenagers. However these guidelines are voluntary. At this time an industry led effort has not produced results. The Children's Food and Beverage Advertising Initiative, which is operated by the industry, lets each company set its own nutritional criteria. The regulatory agencies see the need for the food industry to follow a uniform set of standards. Without serious action on this issue the U.S. healthcare system will continue to be burdened with high rates of obesity related illnesses in the general population, and out of control costs. And the U.S. will continue to face the urgent problem of a lack of healthy eating habits of children teenagers, and adults....

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President Biden's plan to reduce payments to 5% of income instead of 10% for income driven payments on student loans. Loan balances would not grow as long as payments are made. After 10 years of payments student loan balances would be forgiven where balances are less than $12000 in place of the current 20 years.   This is the first effort to create a student loan safety net. Borrowers making less than $30,600 as individuals or $64,200 for a family of four will not be required to make monthly payments on loans. Under the current system loan balances kept growing till borrowers were left with huge and often unpayable student undergraduate loans.