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Cuts in capacity are exceeded by drop in demand across all regions of the world including North America.

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A chemical attack on a rebel held area in northern Syria leads to international outrage and protests.

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It appears that the Russian strategy is to forge deals with companies the likes of BP and Shell with which it had negotiated deals under the pre Putin regime when Russia was hard pressed to negotiate what it sees as fair deals. It has pulled out of those deals and is now negotiating new agreements with the same partners. Both sides see somethig to gain under the new arrangement. Shell needs new sources of oil and natural gas exploration and ways to build its reserves. Russia finds a partner to help it build its own technology and expertise in oil exploration development.

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Defense Secretary Gates does not see Russia as the threat it was in the Cold War, first because Russia's conventional forces are a "shadow" of what they were during the Cold War, and Russia has adverse demographic trends that will diminish Russia's ability in conventional forces. He sees the Georgian war in the context of Russia's seeking to exorcize, as he puts it, past humiliations. And Gates sees opportunities in the relationship with Russia. Such things as Russia's willingness to work with the US on Afghanistan. Evidence of this is Russia supporting the renwal of the UN resolution on Afghanistan. Another indication is that Russia he says is very worried about the drugs coming out of Afghanistan, and has been supportive to provide alternative routes for Europeans to get equipment and supplies into Afghanistan. These views come across in an interview on December 17, with Charlie Rose, a five time elected Congressman, for the PBS Charlie Rose show. They are also reflected in an article in Foreign Affairs journal's current issue. Gates was a CIA analyst and has some insightful observations. Gates told Charlie Rose that he does not see the Islamic radicals and violent Islamic extremists as a threat in the same way as the threat in the Cold War years. This threat is not as big as the threat to freedom during the Cold War. He says the failure in strategic communications was huge as agencies of the US government engaged in activities in other countries, like the Agency for International Development and the US Information Agency, were neglected starting in the in the 1990's. Communications in other countries of what the US represented and stands for was left to the Pentagon, a role the Pentagon was ill-suited for. He sees the Islamic terrorism as more of an ideological conflict. Speaking at a town hall meeting at the Balad Air Force base in Iraq, in December, Gates pointed to these communications failures as a real challenge for the new administration. But he now sees a huge opportunity in this past failure, and ways of addressing it creatively, in addition to commiting resources and people to this effort. Walter Pincus wrote this article, and its part of the fineprint analysis effort at the Washington Post in which speeches, reports, and other documents are examined by people like Pincus, to catch the really important things, uncovering the fine print that really makes the headlines. Another aspect of this fineprint effort is that there are a huge number of reports, and speeches and documents that had a tone reminiscent of the Cold War during the Georgia war and yet they do not correctly reflect the real situation about Russia, as Gates sees it from his analysis of what is actually happening. Gates has used Foreign Affairs, the Dec 17 Charlie Rose Show on PBS in which he was interviewed, and the speech at the Balad Air Force base in Iraq, to communicate his views and analysis. They are important to underline and emphasize precisely because they show that all that cold war hysteria reporting and speeches may be misleading and lead to improper conclusions and mistakes in policy, wasted effort, wasted resources, and lost lives. And just as the US strategic communications was starved of resources and effort, so also this necessary work to retrieve and give emphasis to the important things is neglected. One additional link to this is the speech, discussion, and QA session in Washington DC at the time of the G20 summit in which President Medvedev and the new administration's elder statesman and diplomat Marilyn Albright, former secretary of state, expressed their hopes and plans for a new era in Russian-American relations. ...

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China's Environment Ministry has not released the results of a soil survey from across China. Independent estimates from Nanjing Agricultural University in a 2007-2008 survey showed about 10% of rice in China contaminated by high levels of cadmium. In May 2013 officials found a large number of samples of rice from markets in Guangzhou contaminated with cadmium. Cadmium is a carcinogenic metal that damages the kidneys and weakens bones when unknowingly taken in excessive levels.

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Pollution on China's Tai lake, near Shanghai. The lake pollution just as bad as before the cleanup effort. The sense that China's anti-pollution efforts have suffered after the 2008 financial crisis. Things have moved backwards as the focus on economic growth and jobs again assumed top priority at the expense of other goals. The costly cleanup effort China faces after three decades of such growth that ignored environmental damage. The personal cost of activists supporting social goals in today's China. It also points to the impact of runaway growth in developing countries, in the areas of pollution, corruption and the misallocation of resources. Misallocation of resources through crony capitalism and low productivity of capital led to the Asian financial crisis of 1997.

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Senator Edward Kennedy turned a close election around with an ad in 1994 attacking Romney for job cuts. The result was a 58% to 41% defeat for Romney. In Iowa a Perry ad presses this issue saying "Mr Romney made millions buying companies and laying off workers."

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This editorial by the Washington Post says private equity taking risks on troubled firms is Capitalism 101, and fulfills the role of "creative destruction" in capitalism as it functions in the American system as compared to the European system. It says private equity's gains in its investments are taxed as "carried interest," at a lower rate than ordinary income, and this needs to be changed so that government does not favor private equity investments.

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The U-2 plane of the US Air Force flies at 70,000 feet. It is in service for 70 years and was last made in 1989. The U-2 Dragon Lady was used to track the Chinese spy balloon at altitudes not reached by conventional airplanes. The USAF has a fleet of 31 U-2 planes. The U-2 made by Lockheed first flew in 1955 with flights over the Soviet Union. 2 U-2 planes flew around the Chinese spy balloon with sensors that enable it to examine the balloon and jam its electronic signals.

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Chantix Pfizer's anti-smoking medication faces new questions as Safe Medication Practices, a drug safety group, releases a report that shows 988 accidents linked to Chantix in the USA during the 4th quarter 2007. The FAA reacted to this report by banning the use of Chantix by pilots and air traffic controllers. Chantix has already been connected with psychiatric problems and this report shows links to heart trouble and diabetes.

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Janet Yellen, Fed chairwoman, says the financial system is safer now after the financial regulation, stress testing, living wills and other changes that the Federal Reserve has implemented. She says there is no need for a reduction in these key regulatory rules. One of the changes is that banks now use a safer mix of financing- equity financing has doubled for capital, and wholesale borrowing is cut in half, since the 2008 financial crisis that took the U.S. and with it the global financial system to the brink of disaster. The appointment of Randall Quarles to the Fed by the Trump administration was intended to  reduce regulation, and this is Yellen's response to such proposed ideas. 

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China is closing energy inefficient aging factories. The Chinese government plans to close 76 factories in cement, 279 in paper, 175 in steel, and 84 in leather as part of this effort. This still leaves China with a lot of work to do to acheve the 20% reduction per unit of economic output in 2010 compared to 2005, that its current five year plan calls for. Efficiency went up by 14.4% in the first four years of the current plan, but went down by 3.6% in the first quarter causing serious concern.

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Frances Haugen testifying in the US Congress says "Facebook products harm children, stoke division and weaken our democracy." This understates the problem which is that over a short period of 5-7 years new tech companies have used capital markets in the US to rapidly take up most of the space in the internet pushing out established news organizations. They have also lobbied hard to prevent new legislation from being drafted to regulate the internet space. They have also rapidly acquired smaller companies to create a monopolistic control over the new internet space. This situation has also led to one where these companies set up in overseas locations such as Ireland do not assume fair responsibilities for maintaining the infrastructure in their home countries by paying their fair share of taxes. In doing so these companies run by persons in their twenties an early thirties are doing the work of established news organizations that have been doing it for most of the twentieth century, without these new tech companies being qualified in any way to do so. The result is distortions spread by internet technologies over a wide space creating a toxic effect for children, women, and the dialogue necessary in a democracy. The perverse effects extend to vaccination where distortions spread by algorithmic and artificial intelligence in selection and dissemination of information has led to negative effects on the vaccination drive. This even created much frustration for president Biden as he watched a stalled vaccination drive in the US and complained about Facebook and social media's ill effects. Ultimately the national interests of the US, European Union, Britain and India are affected because other countries see democracies as being weak and ineffective even in protecting their own citizens, and weak even in the time of the pandemic. ...

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Current responses to China's different posture in international relations obscure the huge investments made by US and European Union business in China that lead to about $1 trillion in exports from China to US and EU in 2021. This could not happen without the hyper investment in China by business in the US and EU that not only neglected manufacturing technologies in the home country but did this on a immense scale that would end up shipping almost the whole of the manufacturing supply chains to China from the US and EU. Done as a carefully planned shift of some manufacturing operations it could have benefitted both China and the US and EU. In what way was this hyper move in pace and scale damaging? China's water, air and land was contaminated at a rapid pace never before seen in history, seen as early as 2005. And the hyper shift by 2015 and in 2020 is now showing the severe effects of climate change with droughts, floods and fires all over the world. The German Environment Ministry today counts the cost at 90 times in the use of coal and fossil fuels over time. On the scale that this massive and fast shift was done of manufacturing to China even more so- a hugely imprudent response of US and EU business management and executives. Instead of tackling and confronting head on the challenging problems of quality control and cost in the 1990's through 2000 and beyond at home, management at Apple and other companies simply shifted all manufacturing to China. The other ill effect of the imprudent response of American business was in the massive and wholesale shift of supply chain to China by offshoring practically the entire manufacturing base. It was to lead to the massive losses that workers, families  and communities in the US and EU that countries could not cope with as it moved on an accelerated hyper level and pace. The result was to lead to intense criticism of China and a level of rancor that has poisoned the relations with China. Some of this counsel to China was given to leaders of the Communist party who had little knowledge of American capitalism operating within constraints of social democracy in 1990. Some of that counsel was self interested given by investment banks to Chinese officials- investment bankers that have now disappeared from view- who themselves lacked an understanding of the social constraints of American and European democracies. It is that rancor that is now leading to China and the US disconnecting the supply chains leading to questions one is certain within China about how this will affect unemployment in China in the years to come. The pandemic simply accelerated this realization on both sides of this untenable situation. Still a trillion dollars in exports are taking place even as the political situation is now totally adrift -as the situation in Taiwan in August 2022 shows- the political and trading relationships at opposite ends and seemingly at war with each other. ...

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Xi Jinping is seen in this WSJ report as putting China on a course as a competitor of the US compared to other leaders such as Hu Jintao and Jiang Zemin, yet these prior leaders faced a enoromous gap in technology and capital to make it ludicrous. The shrinking of this gap is a result of free markets theory that took no account of the national interests of the US or of the European Union in shifting manufacturing lock stock and barrel to China.  A deeper look at China requires looking at it from putting oneself in China's situation since the period of the 1912 revolution and the 1919 May 4th movement for Science, Modernization and Democracy, to better understand its motives and realities. Jiang Zemin could not pose the question of competing with the US at the time because China's per capita GDP was less than $100 in 1990 and by 2000 during Hu Jintao's term still about a tenth of American per capita GDP.  Even today with population in North America of about 500 million in the economies of US, Canada and Mexico, China lags far behind in technology and capital resources. The Biden administration does not believe in this idea of free markets theory, wrong from the beginning that prevailed incredibly and puzzingly for too long, that it does not matter where you make as long as it is made at the least cost anywhere. It ignored what China and the US under Biden both believe for the US or China that the US is its people and the people is the country. For the US the Civil war itself as Lincoln said in rallying people to the Union, was fought because labor was more important than capital. When looked at the situation in China as stated by Xi at the party congress recently is for having made progress for the overriding goal of Modernization to build a moderately prosperous socialist economy. Huge problems in China remain hidden- ensuring self governance that is honest and accountable to the people, creating jobs and opportunities for hundreds of millions of young people even as supply chains shift after the pandemic in Europe and the US, India and other countries to their home countries for Made In USA, Made in Europe, and Made in India. China is not such a believer in the flawed free markets theory of the non existence of national interest to not grasp the natural aspects of the US and EU, India wanting to build their own manufacturing up again to the fullest. In this situation it also probably realizes the need for a pause to the rampant free markets type of growth that has damaged China's water, air and environment as much as it has damaged the world through climate change. Quality of growth is the new ethos and this gives the US and China, India, the EU and other countries a common frontier to shoot for. The nuclear aspect is also there and managing this well is a common interest for all countries exercizing responsible leadership. ...

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This editorial in the Economist magazine says the banks have paid large fines for wrongdoing but individual accountability has not been achieved. Only one individual conviction has been achieved related to market rigging in Britain. The penalties paid by banks between 2009 to 2014 worldwide add up to $245 billion, according to CCP, a research group. The problem says the editorial is that without individual accountability this is likely to be seen just as a cost of doing business. For the culture at banks to change individual acountability has to be established, and only now are banking regulators realizing that the public's disillusionment with the political parties in power during the last decade in Europe and the U.S. has its roots also in the way accountability has been tackled. Editorials in the WSJ and the NYT have addressed the same theme and expressed the same concern. The May 21, 2014 editorial on the U.S. Justice Department's legal settlement with Credit Suisse. "Holder convicts Switzerland," was critical of the Justice Department because this settlement did not bring accountability or justice. Columnists Eavis and Reilly in the WSJ, Protess and Greenberg in the NYT, were also critical of the settlement. Other legal settlements followed the same pattern throughout 2012-2015. Another aspect of this and a larger problem is that the same management has remained in place in some places. Shareholders expressed their feelings at the recent Deutsche Bank meeting in June 2015 when one shareholder association asked the question: "Mr. Jain are you the solution to the problem or part of it?" questioning how the same management that created the problems was going to fix the problems. A week later the two co-CEO's departure was announced and a new CEO appointed. BaFin, Germany's regulatory authority was described as not providing effective oversight on management at Deutsche Bank, by Eyk Henning in the WSJ March 28, 2014. It is too early to say if the public's frustration with the slow pace of establishing accountability and generating culture change is at long last registering with regulators and the political parties running the government. Prime minister Cameron and chancellor George Osborne's decision to put $1 billion into communities throughout Britain from the fines, described in the WSJ May 31, 2015, and an additional $227 million pounds from a legal settlement with Deutsche Bank in April 2015 for creating 50,000 apprenticeships, is the first sign of a conviction developing in political parties that instincts of fairness and the compact between the people and their government handed down over many, many years and generations, need to be respected. In the U.S. communities devastated by the recession and foreclosure crisis, especially inner cities, could benefit from Cameron and Osborne's exceptional idea. For the political parties and the political elites in Europe and the U.S. it is a way to restore some of the trust lost in the last decade. For banks a change of management, cultural change, will benefit the employees and shareholders, and improve relationships with customers, restoring trust over the next decade....