LyrArc Article Gist
Gerald Seib of the WSJ points out that the midterms helped America rebuild its democratic institutions and practices. Independent thinking prevailed in the midterms and the results provide an opportunity to move forward with investments in aging infrastructure, improving governance and helping tackling issues related to the cost of living, climate change action. 

LyrArc Article Gist
Pearlstein points to the need for the structural changes in the U.S., Europe and China to address the serious imbalances that are at the root of the problem. This process will be painful and mean a short term drag on the economy even if the right actions are taken. The process of unwinding the imbalances will take time. Lower growth in China will be good for the bubble in real estate markets and the reduction in the trade surplus, even though this will reduce imports of European and U.S. machinery. Higher savings in the U.S. and reduction of consumer debt will slow retail sales but this is healthy for longer term growth. The same is true for savings in deficit reduction that will result in more layoffs at the local level. The government needs to have similiar action take place at the banks to end their "extend and pretend" practices and finally write off bad loans in residential and commercial real estate. There is no easy way out, no solutions that can be made without a sharing of the pain. Policy makers around the world have tried to look for painless solutions for years and this may be the end of the road. There is some action that the governments and central banks can take. Pearlstein suggests that the European Central Bank buy up some of the sovereign bonds being dumped on the market even if it means printing money. The Fed, the Bank of Japan and the central bank of China can also swap some of the Treasuries they own for European sovereign bonds. This would give time for the EU leaders to give the European Financial Stability Facility the resources and powers to replace the sovereign bonds with more reliable European bonds. The Fed can take this opportunity to sell some of its huge pile of Treasury bills into the market so that it has more room for action in future years. The U.S. government can move up the spending for infrastructure in years 8, 9, and 10 to the next 2-3 years to give some support to the economy as these changes take place. The spending decisions should be left to an independent Infrastructure Bank. See the related article by Krauthammer in the Washington Post, August 5, 2011, which provides a companion policy prescription for U.S. deficit reduction based on the work done by the Bowles-Simpson Commission and by preserving efficiency and fairness....

LyrArc Article Gist
The Trans Pacific Partnership (TPP) free trade pact led by Japan and the U.S. moves to the next stage with legislation introduced by Orrin Hatch and Ron Wyden in the U.S. Congress for granting trade promotion authority to the U.S. president. This would facilitate the negotiation of an agreement leading to concessions by different countries. Talks between Japan and the U.S. intensified with the U.S. president Obama saying in his 2015 State of the Union message that China wanted to write the rules for trade in Asia, and asking why the U.S. should not work to write its own rules. Defense Secretary, Aston Carter, called it more important than another aircraft carrier. Support from Europe, India and other countries for the China sponsored Asian Infrastructure Investment Bank, as a rival to the U.S. dominated World Bank and IMF, also give urgency to the TPP. The TPP countries, Vietnam, Malaysia, Singapore, Australia, New Zealand, Japan, Peru and Chile, make up over $400 billion of about $4 trillion in U.S. trade, according to the Peterson Institute for International Economics. The TPP is now seen not just a free trade pact, but also as away to counter China's influence in Asia. Experts see the Obama administration as having bungled its handling of the Asian Infrastructure Investment Bank which the U.S. did not join, and its allies in Europe, other Asian countries including India, decided to join as founding members. Democrats in Congress led by Senator Schumer, Warren, oppose the legislation granting fast track for free trade pacts citing the loss of jobs and lowering of wages for workers in manufacturing in the U.S., with only about a dozen Democrats favoring the legislation, leading to a split in the party. Projections by Peter Petri, Michael Plummer, Fan Zhai, of the Peterson Institute for International Economics, show a net negative impact on depressed wage sectors such as U.S. manufacturing with additional $45 billion in U.S. imports and $35 billion in exports for heavy manufacturing from the TPP free trade pact, and additional $33 billion of U.S. imports and $10 billion exports in light manufacturing by 2025. Higher wage sectors such as U.S. Services including IT get a boost with additional $42 billion in exports and $ 8 billion imports. Agriculture shows insignificant gains with additional exports of $2 billion and imports of 0.5 billion. The auto and transport sector disproportionately favors Japan with $33 billion in additional U.S. imports and $8 billion in exports. ...

LyrArc Article Gist
Gerard Baker in the WSJ points to issues of transgender, illegal migrants in US cities, and race in politics as issues on which the "correct" views were causing anxiety for the American public. Parental anxiety on transgender at school for their children, public anxiety on illegal migrants in American cities, and anxiety about race as a defining factor in political life. The illegal flow of fentanyl and loss of life in the US is a basic issue- how could the US as the largest advanced economy in the world become so feeble that it cannot stop illegal flows of fentanyl and human smuggling. Baker also says that he doubts that the new Department of Government Efficiency will work and eliminate waste, that he thinks imposing tariffs will depress domestic productivity and reduce living standards of the people. And that installing what he calls "oddballs" will work except to create chaos. On the issues of infrastructure, cost of  manufacturing revival in the US which were issues in 2016 and turned into the agenda of the Biden years little is said, and on cost of living nothing tangible about reversing the 20-30 percent of price increases in housing and groceries that have happened in the pandemic years 2019-2023. ...

LyrArc Article Gist
Andrew Jacobs provides this exceptional accoount of disillusionment of ordinary people in Brazil with the corruption scandals, deep recession, and the drop in president Rousseff's popularity from 50 percent in 2014 to 16 percent in April 2016.

LyrArc Article Gist
Mr. Trump's conflict with the Justice Department in the last weeks of his presidency to appoint a new Attorney General with intent to contest the results of the presidential election of 2020, is shown in this report in NYT. This created risks for American democracy. The cracks in social cohesion following four decades of foreign wars 1980-2021, irresponsible behavior of financial institutions leading to financial crises and impoverishment of America, incompetent elites, neglect of rural America, ceding of technology and competitive position to China, failure to fund education, healthcare and infrastructure, under presidents Reagan, elder Bush, Clinton,  Bush, Obama, led to a situation of revolt against the status quo by a maverick politician using a new and proven dangerous form of communication social media. Ultimately this put democracy at risk. Lessons from this are only now being learned as people in the Biden administration and outside of it reflect on what happened. In this WSJ report Mr. Trump is seen pressuring officials of the Justice Department to agree to appointment of a new Attorney General shortly after the election. This was seen as an effort to question the results of the 2020 presidential election. A leading senator on the Judiciary Committee says this would lead to "shredding the US Constitution to stay in power." Of this and also of four decades of neglect in America Washington has this to say in his first Inaugural Address on April 30, 1789- "The blessed religion revealed in the word of God will remain an eternal and awful monument to prove that the best institutions may be abused by human depravity; and that they may even in some instances be made subservient to the vilest of purposes. Should, hereafter, those entrusted with the management of this government, incited by the lust of power and prompted by the supineness or venality of their Constituents, overleap the known barriers of this Constitution, and violate the inalienable rights of humanity: it will only serve to shew, that no compact among men (however provident in its construction and sacred in its ratification) can be pronounced everlasting and inviolable- and if I may so express myself, that no wall of words, that no mound of parchment can be so formed as to stand against the sweeping torrent of boundless ambition on the one side, aided by the sapping current of corrupted morals on the other." ...

LyrArc Article Gist
Warnings to governments and leaders in industry and pharmaceutical research about epidemic preparedness by Bill Gates were ignored. He spent hundreds of millions of dollars to develop new vaccines and create disease tracking systems. But only governments could tackle this problem. He tells the WSJ in an interview that he feels terrible and that he wishes he had done more. His fear that a once in a century pandemic has come true. Governments did respond to the public health preparation needs as reported in France 24 to both SARS and the H1N1, both in Britain and France. It was the disbanding of this effort in the period of the global financial crisis and the eurozone financial crisis that led to the level of unpreparedness that Western Europe finds itself in today. This was caused by irresponsible banking practices. The response was austerity measures in Britain, France, Germany and Spain that led to leaving public health system investment being neglected, without fixing the original source of the problem. Misallocation of capital and lopsided priorities continued through most of the period leading up to the pandemic. There is a lot that Gates and other public spirited leaders could do now do in the new reordering of priorities and shifting the allocation of capital to public services and investments in infrastructure, and supply chain renewal to safeguard national interests. Today he is working with pharmaceutical executives and governments to produce billions of doses of vaccines while they are being tested. His foundation has reserved space in a manufacturing plant so that production can begin quickly once an effective vaccine is found. He says nobody has made 7 billion vaccines so that it will need all the help that it can get and international cooperation.  In an earlier interview with WSJ he told the interviewer in November 2014 that the world as a whole did not have preparedness. France and Britain prepared and then abandoned the effort for epidemic response by 2012 following the global financial and eurozone financial crises. Gates repeated the warning to 2016 presidential candidates in the U.S.  In 2017 at the Munich Security Conference he reminded people- "getting ready for a global pandemic is every bit as important as nuclear deterrence and avoiding a climate catastrophe." One focus of Gates was to come up with faster ways to a vaccine by using ready made components and then customizing it. This is an approach being adopted today by Oxford scientists and by Quidel Corp. in the U.S.   ...

LyrArc Article Gist
Biden calls ending the war in Afghnistan a "wise decision" for the American people. He says in his foreign policy speech that "it is about ending an era of major military operations to remake other countries." A Pew Research poll shows 54% of American adults support the decision.  In a sense the decision had already been made. Biden cited the Doha agreement president Trump signed a year ago with Taliban that called for the release of 5000 Taliban prisoners which included most of the top commanders, and no agreement on the future of Afghanistan. The decision had come much earlier than that when the wars in Iraq and Afghanistan from the period of George Bush were rejected by the American people for the cost and lack of purpose during the presidential election of 2016. That period marked the rejection of policies set under Reagan, Bush and Obama for starting American involvement in the Iraq-Iran conflict first on one side and then on the other side. All the time precious resources that were needed for infrastructure and services in education and healthcare were diverted to these wars, impoverishing America and also Europe. Looking beyond the words thrown around for political advantage both Trump and Biden and the American people, had decided to put these wars behind them 5-10 years earlier. Biden said assertively that America had made a tragic wrong turn, that was all he could say about Reagan, Bush, Obama policy. In the meantime he stated something else was happening- the US was losing its position in the world by wasting its resources in these wars that do not serve the interests of America. "There is nothing China and Russia would want more in this competition than the US to be bogged down for another ten years in these wars."  Biden was saying that he had the courage and tenacity to make a decision that was the right one and a wise one for America against all the transient opinion of people who lacked a grasp of what was happening to the American people- the increasing impoverishing of America in both rural and urban areas. And a similar situation in Europe. It was time to take a new turn, close this chapter, and write a new one in American history, brighter and with new sense of hope. ...

LyrArc Article Gist
In the meeting in the Oval Office Biden and Modi had this to say about India US relations. Modi called it a "transformative" decade. Mr. Biden called it a "new chapter" in ties, taking on tough challenges in coronavirus vaccines for the rest of Asia outside India and China, tackling climate change, and ensuring rule of law in the Indo-Pacific region.  Biden's view- "I think that the relationship between India and the US, two of the largest democracies in the world, is destined to be stronger, closer, tighter, and I think it can benefit the whole world." A look at the US under the Biden administration shows a US that is very different from that of the US in the period of presidents since Harry Truman when he met Jawaharlal Nehru at the White House in October 1949. Biden sees the US needing renewal of its infrastructure, reviving worker incomes and families, regaining its leadership of the free world, for its role and place in the world. Throughout the period 1949 to 2020 for 70 years India was never seen as a modernizing nation of 1.2 billion people. For most of this period it lacked the good governance and speedy implementation of modernization of economy that is essential for a truly good relationship. By releasing the potential of the younger generation in a country where people under 35 years form the major part of the population, with good governance and development agenda, the Indian prime minister has changed the entire dynamics of the India US relationship. This is happening in the way China had done in its relationship with the US after 2000 by modernizing the country. India is now the country with huge potential and the country the US sees as helping it build its own role and place in the world. The sheer size of India and its population with countries around it in the east such as Bangladesh, Indonesia, Malaysia and Vietnam with shared values in south and southeast Asia bring together a population of close to 2 billion people much larger than China, to determine the direction of Asia.  This is the new chapter that president Biden has in mind, and it is also the "transformative decade" in the eyes of prime minister Modi as India finally puts behind it years of bad governance, and speeds up modernizing its economy.   ...

LyrArc Article Gist
"Ram Rajya" is a concept of a just society that serves the needs of the people based on the ancient history and ancient paths of Bharat or India. It is easily understood among the farmers and ordinary people of India. During the long period of colonialism it meant to Gandhi and hundreds of millions in the villages of India a sense of society free of colonialism and colonial rule that did not invest in the country or its people, no matter their religion or caste or language group. In this sense Ram Rajya is all about a just society of governance that meets the needs of all the people, that makes investment in the resources of the country to the benefit of the people. In the modern period in the transformation of rural societies such as China or India or other parts of Asia, Ram Rajya or Buddha Rajya as an extension of the same concept, and about what Abraham Lincoln called society for the people, of the people, by the people, in his call to America for a Just Society. In this sense it has connotations for the world as it struggles to build a style of governance in society that builds the infrastructure, invests in the education and minds of the people, in their health and wellbeing along all dimensions. In this way it is a social concept that is embodied in the best of human society throughout history. It embodies the aspirations of the people of Asia to modernity inspired by ancient tradition, aspirations to science and technology and building modern societies. Of India with Ram and the Buddha, China in its connections to the Buddha, to the people of Indonesia with the connection to Hanuman, and the people in South East Asia and Japan through their connections to the Buddha which were embedded in the ancient society of Ram and the Upanishads in the land south of the Himalayas. No one is too small, no effort is ordinary or small- "I am very small, I am very ordinary, if someone thinks so one must remember the contribution of the squirrel. Remmbering the ocntribution of the squirrel will dispel our hesitation, and teach us that every effort big or small, has its strength and contribution. The foundation of Sabka Prayas (everyone's efforts) will be the foundation of a divine, and capable, just and good Bharat or India for all its 1400 million people."   ...

LyrArc Article Gist
Indian manufacturing sector continues to grow rapidy at close to 12% as its starting off a small base and existing infrastructure needs upgrading badly and foreign investment is only now coming into India.

LyrArc Article Gist
NYT fails to see the importance of delivering on infrastructure building in scale, reshoring, wages and jobs for workers, and climate change action that president Biden is achieving to build a better America. NYT looks at the 2023 and the midterm elections and points out a well known fact that women (and men) in the suburbs care about legalized abortion rights for women, and this extends to states that vote Republican in the south. No attention is given to the importance of infrastructure building, increasing wages and jobs for working class and middle class Americans, bringing factories and investment back to the US, three issues that brought Mr. Trump into office in 2016 coming out of nowhere. Mr. Biden is old is the refrain. Yet it is president Biden who has delivered on infrastructure where Mr. Trump merely talked about it -Building America Better- as Biden pointed out in the State of the Union address in 2023. Biden has delivered in support for wage increases for workers, even joining the picket line at the UAW auto workers strike in Detroit. He was able to do this because he has spent more years in Congress than any other senator, and like Lyndon Johnson for the Great Society programs and desegregation in the 1960's was able to win support from moderate Republicans. Being older, having the wisdom and experience was and is indispensable in the American project started by Washington and sustained by Lincoln, who nurtured wisdom, experience, fully comprehending the people's problems, and mindfulness in the way Mr. Biden does. ...

LyrArc Article Gist
With her popularity rating dropping to a low of 13%, and a corruption scandal facing her Worker's Party for misuse of state funds, the Brazilian parliament votes for impeachment of president Dilma Rousseff in April 2016. Following the boom years under the Lula administration Brazil is experiencing a second year of over 3% decline in GDP. The judge who is taking action against corruption in Petrobras and in the ruling Worker's Party, Sergio Moro, is popular in Brazil. The Worker's Party under former president Lula helped bring more people into a rising middle class, yet their were weaknesses in the boom years of the Lula administration of the Worker's Party- in lack of infrastructure, poor public services, a weak educational system, overdependence on commodities for growth, overextended public finances, and corruption. Emotions are running high in Brazil with one television commentator, Ricardo Boechat, saying he does not remember a situation like this even during the dictatorship years. The Lula and Rousseff supporters at political rallies say the judge and investigators are working to stage a "golpe" or takeover in government for conservative opposition parties....

LyrArc Article Gist
Concerns that the austerity cuts announced by Spanish prime minister Zapatero may not address the deeper causes of the financial crisis in Europe- taking on too much debt, government spending and the imbalances in the global economy. And the concern on the other side that even these small cuts and eventual larger cuts can squeeze domestic demand in countries with severe recession, weaken the tax base, test social cohesion, and dampen the prospects for recovery. Zapatero announced a 5% pay cut for public sector employees this year and a freeze for next year, cancelling index-linked pension increases, and cancelling a baby bonus tax break of 2500 euros, cutting back regional spending budgets, and postponement of infrastructure projects, all adding up to $15 billion in savings. This is intended to reduce the budget deficit to 6% of GDP from 11.2% in 2009. With Spain's unemployment at 20%, and the construction sector stalled, pain will be felt. Spain's large informal economy tied to tourism helps in this situation. Trade union Comisiones Obreras gave a muted response about a general strike saying that "it is the last thing this country needs at a time like this," after meetings with Zapatero. ...

LyrArc Article Gist
Shiller says policy is captured and communicated by metaphors, the most effective being belt tightening for a family. However what works for a family does not work for a country in the same way, especially if not accompanied by other measures and implemented in a strict manner without looking at the real situation. Better suggests Shiller, and more real is the metaphor of "winter on the family farm," where people work to do other chores than planting and harvesting, because a lot of other things need to be done and this is a good time to do it. This would include cleaning up the place, fixing the farm and the barn, fixing machinery, building fences. The farm's members pay a tax in terms of donated labor which goes to do all the work needed and helps the farm's productiveness as the weather changes. Similiarly the Salant-Paul Samuelson balanced budget theorem from the FDR days shows an increase in national output by the amount of a tax, such as the one proposed in France by president Hollande; that would then be invested in hiring more teachers (the labor) and investing in education infrastructure....

LyrArc Article Gist
Egypt's presidential candidate Mohammed Morsi, leads in the first round of presidential elections over Amr Moussa. He has no ties with the Mubarak regime and comes from the Muslim Brotherhood. Morsi is an engineer trained in Egypt and the U.S. Morsi graduated with bachelors and masters degree in engineering from Cairo University, and a PhD. from the University of Southern California in 1982. From 1982 to 1985, he was a professor at California State University at Northridge, California. In 1985 he returned to teach at a university in Egypt. He was elected to parliament as an independent candidate as the Mubark regime banned the Muslim Brotherhood. In 2011 he was elected head of the Freedom and Justice Party and made its candidate for president. Because of the severe economic problems facing Egypt- a demographic explosion of young people with few job opportunities, enough foreign reserves to finance a limited period of food and essential imports and dependent on the IMF for financing, neglected infrastructure development during decades of misrule under Mubarak- a candidate with an advanced engineering background trained in the U.S. could bring the right set of skills to the job of rebuilding Egypt. ...

LyrArc Article Gist
According to U.S. Senate investigators Apple recorded $26 billion, 65% of its income worldwide for 2012, in Ireland. Ireland Operations International is based in County Cork, Ireland. Ireland has about 4% of Apple's worldwide workforce. Laws in the European Union allow digital companies such as Apple and Google and other large companies to pay little in taxes through such arrangements. Apple CEO Cook says Apple is not using any tax gimmicks. Apple negotiated a low 2% tax rate with the Irish government. The Senate hearings in the U.S. and a meeting of EU leaders has raised concern about this practice being allowed at a time when much needed infrastructure investments are being shelved in the U.S. and Europe because of budget deficits. Spending cuts in education and in R&D hurt long term economic growth. Government statistics show the average Ireland tax rate on gross income of companies in 2010 was 6%. Ireland has a low corporate tax rate for companies of 12.5% which it retained after EU pressures to change the rate when the Irish bailout was provided. Ireland has 4000 Apple workers, and 600 American companies employ 100,000 Irish workers....

LyrArc Article Gist
President Obama's proposal on Dec. 17, 2012, in the fiscal cliff negotiations sets the figure at which Bush era tax cuts are permandently extended at $400,000 instead of the $250,000 in earlier proposals. Speaker Boehner's Republican proposal was for a figure of $1 million. The $400,000 proposal would mean that the top tax bracket of 35% would increase to 39.6%. Currently the tax rate increases to 35% from 33% at the cutoff point of $388,500. The White House plan now cuts spending by $1.22 trillion over 10 years. $800 billion comes from cuts to programs, with half of these cuts in federal health care programs, $200 billion in programs like farm price supports, $100 billion in military spending, and $100 billion in other domestic programs over which Congress has control. The White House proposal also supports additional spending on infrastructure, extension of expiring unemployment benefits, protection of "vulnerable populations" such as the disabled and wounded veterans on Supplemental Social Security benefits in inflation calculations, and permanently stop expansion of the alternative minimum tax affecting the middle class. On business investment the president's proposal would make permanent the credit for corporate research and development....

LyrArc Article Gist
Chile is relatively better off than other Latin American economies because of the $20 billion in its sovereign wealth fund. This helps the government carry out astimulus of $4 billion. This includes additional $1 billion in investments for state owned copper company Codelco, $700 million for infrastructure projects, extra benefits for poorer Chileans, temporary tax cuts for small businesses. Government spending will rise by about 11% in 2009. Public debt is minimal at 4% of GDP in December 2008, and the fiscal deficit for 2009 is estimated at 2.9% of GDP. The copper prices have dropped by two thirds, but the decision to save much of the reevenue gained when copper prices rose is now showing up as an extremely wise decision and one that is critical for crisis prone Latin American economies. Inflation that rose to 9.9% for 2008 to October to 7.1% in December, and should fall witin the 2-4% range says one economist by the end of 2009. In addition to the other moves the government has given a$500 million capital boost to BancoEstado, a stateowned bank which is Chile's third largest bank, to support expanded lending for mortgages and small businesses.. ...

LyrArc Article Gist
Krugman says the TPP is no big deal because most of the trade in that region is free, protectionism is way down. He cites a recent report on American import restraints by the International Trade Commission putting their total cost at 0.01% of GDP.

LyrArc Article Gist
Adam Neumann, the 40 year old startup founder of WeWork, which is basically a subleaser of real estate space, resigns. Aggressive brash attitude, a party heavy lifestyle, unpredictable decision making,  are cited by WSJ as reasons he lost the confidence of investors. Mr. Dimon of JP Morgan Chase was a key banker for the company. Chase under Dimon pursued startups in the hope of doing the IPO's. The company has substantial losses, and new management was brought in after Softbank decided Neumann should leave. Growth was fast, losses also mounted fast to $1.6 billion. WSJ says many investors decided that WeWork was not a tech company so much as a overvalued real estate company that engaged in business of leasing office space tricked out in millenial friendly decor. The greed for outsize returns has led to the accumulation of capital that could otherwise be spent wisely on infrastructure and other improvements in health and education, even though many of the gains in tech are behind us.  Recently the head of Uber was also asked to resign for an aggressive approach and questionable management style, also with substantial losses, and new management brought in. Fast expansion in an imprudent manner affects established companies. It led to collapse of India's Jet Airways, Britain's Thomas Cook in 2019. Yet the huge amount of capital of tens of billions of dollars wasted as investors seek outsize returns and are disappointed, is a pattern seen mostly in capital markets in the U.S. and to a lesser extent in Europe, China, Japan. The ideas piggyback on some aspect of tech already developed and are not major tech advances by and of themselves, and many as in the case of WeWork are touted as tech because of the catch and appeal of the word for everyone hoping to make an outsize return.    ...