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The WSJ looks at Elizabeth Warren's Medicare for All plan that marks a major shift for the U.S. economy.  Households would see their costs go down by $11 trillion, boosting their ability to spend on other goods and services. Because income and wealth was highly skewed in the past three decades in one direction, the spending capacity of lower and middle income households was pushed down. This and other similar plans would help restore a higher level of spending and with it an essential element of inflation of 2-3% to the U.S. economy which was missing in the last decade. This sets the tone for the kind of broad based recovery that happened after 1950 that strengthened America's middle class and made it the core of the economy, the core of the post World War II recovery in America and Europe. The plan would be paid for by higher taxes on corporations, tax rate of 21% for corporations going back up to 35%, and reverse depreciation schedules in the 2017 Republican tax law. The argument that this would reduce business investment does not hold that much says the WSJ because amid new trade tensions business investment has declined over the last 2 quarters, and has been sluggish overall. The other source for the estimated $13 to $20 trillion cost of Medicare for All plan of Elizabeth Warren is a 6% annual wealth tax on billionaires, in an attempt to have all pay their fair share and reduce wide disparities in wealth. Mark Zandl, chief economist of Moody's Analytics, says his sense is at the end of the day from a macroeconomic view- because $11 trillion in the hands of 80% of households who could boost spending after lagging behind in the last decade- the negative effect on business investment will be cancelled out by the higher consumer spending. The overall effect and today's context is infused in this analysis. Private insurance, premiums for insurance, and out of pocket cost that the public pays would disappear in this new system where all health payments pass through the government. Health insurance premiums paid by employers would convert into a new employer Medicare contribution to the government starting at an amount employers pay now and adjusting gradually toward national averages over time. Smallest businesses are exempted. Mr. Zandl says the most important aspect of this now is that Mrs Warren has shown that her plan's revenue sources match the cost so that the plan would not lead to deficits increasing and pushing interest rates higher, leading to negative effects on the economy. Republicans under Mr. Trump have paid little attention to expanded deficits caused by their tax law, and economists across the landscape have also shown less concern. Still attacks are made if the plans don't add up. For this reason a sound assessment in today's context of depressed consumers and an overall impact becomes essential. The WSJ quotes from a pre- assessment of Warren's plan by Simon Johnson, a Massachusetts Institute of Technology economist who co-wrote it with Mr. Zandl and Betsey Stevenson of the University of Michigan. What they point out is that putting cash in the pockets of the lower and middle class for spending makes a lot of sense today, and taking money out of the pockets at the way upper wealthy end,  does not contract the economy at all. Other effects they say are constructive by letting all workers get health coverage from the government instead of employers, this makes it easier to change jobs increasing labor mobility and productivity. A worker getting a better job and better utilization of skills could then shift without looking at the employer health care plan. Warren says there would be a five year transition so that workers in health care insurance industry can work in other insurance fields and in Medicare, no one would be left behind. The important thing being to build America's middle class again. ...

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How the reconstruction effort in Iraq never had the clear policy goals and objectives, the technical capacity, and the organization structure, to deliver the basic services like electricity, clean water, phone connections and other infrastructure services which crumbled by 70% or broke down totally after the war. And still does not have these elements, as well as one agency or authority responsible and accountable for delivery and results. This are some of the findings of a detailed audit and investigation in a 513 page history of the American reconstruction effort in Iraq, prepared by the Office of Special Inspector General for Iraq Reconstruction , led by Stuart Bowen, Jr. The reconstruction effort has already cost by mid 2008 $117 billion with $50 billion in US taxpayer money, but the results show that all they have achieved is at best a restoration of services to what they were before the war, when Iraq was under severe sanctions and had an outdated infrastructure. One of the biggest problems was that the war effort was not prepared for such a total breakdown of the infrastructure, and never grasped the critical role the continued delivery of basic services would have in winning or losing the support of the people of Iraq, who would blame whoever was in power if things were worse than under the previous regime which is exactly what happened. The whole reconstruction effort was botched because the will was not there, the direction was not there, and no clear policy on how to go about doing this, and lacking the organization structure for its execution. Bowen concludes that the US government was not adequately prepared to take on the reconstruction mission it took on in mid 2003. When Jay Garner presented plans on rebuilding to Donald Rumsfeld, the secretary of Defense, before the invasion, the conversation shows Rumsfeld asking Garner how much they would cost. Upon being told that it would cost billions of dollars Rumsfeld responded saying, my friend if you think we're going to spend a billion dollars of our money over there you are sadly mistaken. All this becomes important in the light of another reconstruction effort underway in Afghanistan which aslo has struggled with severe problems and poor results. And as the struggle with militants in Afghanistan is growing the reconstruction effort in Afghanistan and its ability to win the support of ordinary people will be critical to winning support of the Afghan people. ...

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Two of Amgen's drugs that treat anemia in cancer and kidney-failure patients have questions raised about their safety and marketing. The two anemia drugs Epogen and Aranesp generate about half of Amgen's sales. THey now have ablack box warning placed on them by FDA requirements.

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Bret Stephens on the foreign policy debate about supporting or not supporting dictators. On the big one today of Iraq after the large gains with Maliki in Iraq it could be said that its not an easy path either way with each path fraught with dangers, but in the long run if one perseveres and again in the spirit of democracy and with the people in the region themselves and their leaders having good sense and good judgement and putting the interests of the whole region before their personal interests, given this you are always going to do better by your people and the people in the region affected, by respecting democratic ideals and principles. Pakistan is not a good example because its leaders have put their personal interests before the interests of their people but even there things are changing. Zardari's dirtier and clumsier hands are mentioned by Stephens but even here this time the opposition led by Nawas Sharif decided that its more important to respect the electoral process and democratic ideals and let Zardari run Pakistan. Administrations like the Bhuttos and Zardari's have alway been corrupt so there are no high expectations but even here the people of Pakistan will find a way to make the progress they desperately need and find the leadership that can provide it. The military muffling and jailing dissent and not respecting the independent judiciary may not affect the person on the street in Des Moines or Delaware but for people in Pakistan who have suffered under military rule this may be a different story. And in the Middle East things were not that much better with dictators in power either in Palestine and its an area where the conditional part of leadership in the region having good sense and judgement should be considered as well as history. In Iran its not between the Ayatollah and the Shah, before the Shah an elected government in Iran was overthrown when its anti western oil company stance was seen in the light of the cold war. It was the overthrow of that government that brought the Shah in. Had it continued the internal politics of Iran would have been resolved by the people there. In other words western oil interests and lobbies and the cold war distorted the process there. Without the two Iran's politics would not be of much interest to people in the USA and governments there also would have no reason to be especially friendly or especially hostile to the USA. So once one removes the distorting factors and takes out the countries which cannot be used as good example like Palestine and Iran, on the big one Iraq where the people and the leadership in the region did not fail even in very difficult situation and the US persevered, respecting democratic ideals and principles was the best course with the best results. The improved Libyan relations should not be chalked off as a point in favor of dealing with dictators. With better or worse relations with Libya it made little noticeable difference or probably no difference to the people in Des Moines or Delaware. For Iraq it makes a big difference to get it right by both peoples. Libya which had closed itself off from western technology and ideas now opens itself up because this way it can improve life for people in the region, this may be the only thing that has changed. And Stephens puts it another way its more sustainable. But why is it more sustainable to respect democratic ideals and principles given that the leadership of people in the region affected and the people themselves have good sense and judgement? Because in doing so one is respecting oneself one is more true to one's own people's idea of a good and just society and one is respecting other people....

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Republican Senators Corker and Blount are confident that a solution can be devised for the sticking points on a deal between the Republicans and the Democrats. The Republicans consider the savings in the Reid plan from the wars in Afghanistan and Iraq a "gimmick," but essentially the Reid and Boehner plans say analysts are similiar in the inital cuts in spending. The sticking point for Democrats is on the whole process of the debt ceiling extension having to be redone in early 2012. For Republicans the sticking point is in in tax increases which the Reid plan leaves out in the initial period for debt limit extension into 2013 when a new president takes office. House majority leader Boehner is facing opposition within his party and this restricts his leeway for striking a deal- the Boehner plan passed in the House by a vote of 218 to 210 on July 29, 2011, with 20 Republicans voting no. It was voted down in the Senate that same evening with a vote of 59 to 41, with 6 Republican senators joining all 53 Democratic senators. As it stands now, the weekend before the August 2 deadline, President Obama concedes that there is "rough agreement" about the size of the first round of spending cuts, and the "next step" to rein in borrowing. He went on to say that "if we need to put in place some kind of enforcement mechanism to hold us all accountable for making these reforms, I'll support that too, if it is done in a smart and balanced way." Its the design of this enforcement mechanism that is the main point in the remaining negotiation. The nature of the committee selected from both parties for the next phase of savings, its powers and the trigger in the sense of what it can ensure happening if no decisions are taken by both parties. ...

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Experts say there may not be much difference whether a voluntary deal is reached between Greece and the Institute of International Finance or a deal is forced on private bondholders by Greece for the 93% of Greek bonds that are based on Greek laws. Most of the large banks that hold Greek bonds will be subject to persuasion by European authorites (EU, ECB) to accept the deal offered by Greece that brings debt down to 120% of GDP by 2020. The remaining holdouts are the hedge funds that will want to opt out of a voluntary arrangement anyway, because a forced deal by Greece would allow them to collect payments on their credit default swaps. Adam Lerrick, an expert on sovereign debt restructurings, says the hedge funds and other private bondholders are framing the discussion into one of a voluntary agreement that is orderly and an involuntary agreement that is disorderly, as a tactic to scare the European authorites (the EU, ECB) and Greece. He says not only can forced restructurings be orderly, but in this case the improved prospects for Greece with serious debt reduction would lead to a ratings upgrade for Greece. Some hedge funds have said they will sue if forced into the deal. Michael Waibel, at the Lauerpacht Centre for International Law at Cambridge University, says the case would first go to Greek courts where it would be received without much sympathy, and then to the European Court of Human Rights. Only the small number of bonds under Swiss and English law with pari passu clauses insisting on equal treatment of bondholders have any prospects, and even then legal enforcement of any awards is uncertain as shown in the case of Argentina. The 93% of bonds under Greek law have no such clauses and this gives Greece the option for special treatment of bonds held by the ECB....

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The younger generation and women remain underrepresented in Japanese political life and government. Only about 10% being women and almost all leaders in local and federal government over 50 years old. Lee and Inuma say in the Washington Post that the change that was expected has not come- Shigeru Ishiba 68 years as new LDP leader and prime minister replacing Fumio Kishida is not the way Harris took over from Biden in the US for a younger leader with new energy and skills. Ishiba is a second generation LDP politician. Surely there are younger leaders outside second generation family with new ideas and solutions is the sentiment in Japan. The LDP has been in power for 65 of the last 69 years making some question whether it is truly representative of what Japan is today. LDP came into power with US support in 1955. Japan has changed a lot since yet a small fraction of LDP party members about 1% of the population have chosen leaders of the government, raising questions about how representative it is, and how Japan could bring a younger generation of leaders to the forefront without the backing of the family background as second generation politicians.    ...

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Note this comment by the head of the U.S. National Highway and Traffic Safety Administration in the Bush Administration. NHTSA Administrator Jackie Glassman says the average mileage for the fleet today is 30 miles per gallon and raising the current standard of 27.5 mpg for an automakers passenger fleet by 2.5 mpg won't put much pressure on automakers. The Bush administration- and the prior Clinton administration- has not committed to making major improvements to the national mileage standards, with the current standards of 27.5 mpg not having changed since 1990! Glassman says the NHTSA starts with the manufacturers product plans and then sees whether it can get additional fuel savings with these plans. This suggests an NHTSA that is more follower to the auto industry rather than a leader in setting the standards that the auto industry then tries to achieve to reduce the U.S. dependence on foreign oil. Also note that it takes 2 years for things to change, as it will take months for rule changes, and 18 months have to be given to automakers to implement the new rules. By 2008 the fuel efficiency based on market competition and Toyota focussing on hybrids and higher fuel efficiency across the whole car lines, might well exceed any new standards that are watered down, especially if crude prices hold up. Lawsuits by attorney generals of different states and the Lugar-Obama bipartisan bill pushing the adminsitration to mandate higher standards are intended to put pressure on the Bush administration to come up with new higher standards. The failure of Democrats and Republicans in the Clinton and Bush years to raise standards and require the auto companies to use new technology to meet these standards with government assistance is one of the significant failures. This will affect the prospects for the U.S. economy in the years ahead....

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Societe General's Jerome Kerviel worked at a Delta trading desk in the investment banking operation. Kweku Adaboli, 31, a UBS trader, worked at a Delta One trading desk specialized in exchange-traded funds and other securities positions. He is charged with two counts of false accounting and one count of fraud. Delta is a term in the banking industry for how a bank can customize a security for a client, and following this closely replicate another transaction that acts to mitigate the risk. The first transaction is a "derivative" trade, which is basically a bet on the direction of a group of stocks or other securities. Jerome Kerviel was accused of trying to hide $7.2 billion in losses and was sentenced to three years in prison. The Delta One trading desks can generate $1 billion in annual revenue for banks and are used by Societe Generale, BNP Paribas, Goldman Sachs and Morgan Stanley U.S. At the same time risk is increasing with unpredictability and higher volatility in the financial markets in 2011. Another feature of the trader problems at UBS and Societe Generale is the relative youth and lack of experience of the traders, and that risk management systems allow traders with insignificant experience to make such large transactions. Other questions about how much risk a bank should be allowed to take, and about ring fencing the investment banking units of each bank, are relevant. Swiss banking regulators were working to ringfence the investment banking units of UBS and other Swiss banks after earlier problems at Swiss banks in the global financial crisis of 2008. Under the proposed regulation by Swiss regulators UBS investment banking unit would be headquartered in another country and hold its own capital, and be subject to local regulators. ...

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Rich Kramer, CEO of Goodyear since April 2010, says the tiremaker's turnaround strategy was to focus on selling higher technology tires directly to customers at premium prices. About 75% of tires now sold sell at $130 and up. As recently as 2007, 40% of Goodyear's tires were low-end tires selling at retail stores for $60 each. Goodyear has shifted focus from selling to automakers to selling to customers at retail stores. The prior strategy was focussed on covering operating costs and achieving sales volume. Goodyear now sees itself as a consumer products company, in addition to being an auto supplier. Sales were 89.7 million tires in the first half of 2011. A small increase in sales of 2% from the prior period resulted in a 25% increase in revenue to $11 billion, and income of $143 million. Another reason for improvement in sales and profits is better labor relations. This was achieved by investing in new technology and plants, and putting $1 billion into the union health care fund for retired workers. The union agreed to a two tier wage system with more flexible work rules. The new technology introduced by Goodyear includes tires that reduce rolling resistance for commercial trucks and passenger vehicles. Goodyear is working on new technology to increase fuel efficiency. A $1.5 million grant from the Department of Energy funds research for tires with a miniaturized air pump that maintains air pressure. Other research involves tread design that improves fuel efficiency. ...

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The Spanish government said on May 23, 2012 that it will provide 9 billion euros to help Bankia cover capital provisions for bad loan losses. The government took control of Bankia in early May 2012. Bankia was formed by merging 7 troubled cajas savings banks. It has about 10% of Spain's loans and deposits. Bankia has the largest exposure of financial institutions in Spain to real estate loans. Of 37.52 billion euros in loans for real estate, about half or 17.85 billion euros are troubled loans. Spain's approach to the banking crisis from the real estate bubble was to merge failing banks with smaller amounts of government money as aid, and having the new entities raise cash through initial public offerings. For Bankia most of the nonperforming loans were separated and placed in BFA, the parent company. Bankia did an IPO in July 2011 raising 3 billion euros. Since the IPO Bankia has lost half the value in its share price for large losses to investors. Under new capital provisioning rules set by the government for banks to adequately cover nonperforming real estate loans, Bankia needs 7.1 billion euros. An additional 1.9 billion euros is needed for capital requirements for a total of 9 billion euros, which is the amount of the capital injection by the Spanish government. Finance minister Guindos told parliament that the rest of the Spanish banking system can withstand adverse scenarios....

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A test supply of 170 megawatts from the Kudankulam nuclear project in Tamilnadu state is added to India's southern grid. Full supply of 1000 megawatts is to be added by the Nuclear Power Corp. of India Ltd. by end of 2013. India's Supreme COurt dismissed petitions questioning the project's safety in May 2013. India signed a preliminary contract for nuclear project in Gujarat with Westinghouse. The state owned Nuclear Power Corp. of India is in negotiations for a project planned in Maharashtra state. Over the next 20 years India plans to increase nuclear production capacity from 4700 megawatts to 63,000, a 12 fold increase. The first Kudankulam reactor going into operation in 2013 comes into operation after a delay of 7 years because of antinuclear and land protests as well as court cases. The slowing of growth in India, depreciation of the currency, and the acutely felt energy shortages as industrialization moves forward, are leading to a new perception of the importance of nuclear energy to supplement energy generated from coal and other sources. China is also moving forward aggressively with development of nuclear energy and working with Areva and other companies for safe nuclear energy development. The new planned reactor by Areva in the south of England is also likely to offset the perception of nuclear energy after the Fukushima nuclear disaster. For these reasons nuclear energy development in India is likely to accelerate without the long delays seen earlier....

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The Indian PC market is expected to grow rapidly from now on with growth of 30% a year. About 9 million PC's will be sold in India in 2007. Lenovo, Dell and HP and local maker HCL are all gearing up with extensive sales plans and product lines. The Indian market will see increased sales from larger companies and strong growth also from consumers and small business. In March HP opened a new factory near Delhi, and Lenovo will open a new plant in Baddi in northern India in july to make 2 million PC's, Dell opened a new factory in Chennai in August. HCL is partnering with Intel to make a lowcost PC called the Classmate. HCL once dominated the market but has lost market share to H-P as it made the mistake of being late in the notebook market, only introducing notebooks in 2005. H-P increased its market share by selling in smaller cities in India. H-P has 21% of the market compared to 13.5% for HCL in 2007, according to IDC estimates. Over the past 3 years prices have fallen from $500 to $350, if prices fall significantly again, and there is strong competition between Dell, HP, Intel, HCL, Sony, Acer and other makers, then one should see the Indian market really take off across the spectrum, from larger companies, to small business and the consumer....

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Kostantin Ernt pulls together all the threads of the Russian story from modernization with Peter the Great, Tchaikovsky, Tolstoy and opera to performance of athletes- following national narratives in Beijing and London of previous Olympics.

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The Australian dollar surges as metals prices surge, with bearish sentiment for the dollar and new liquidity pumped into the economy by the world's central banks. A recovery in China is also part of this picture.

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Sales of autos once at 14 to 24% increase year after year was down to essentially flat in the latter part of the year with full year growth at about 6.7% over 2007. And 2009 could be flat or see declines in sales. Consumers are feeling the effects f drop in the stock market and drop in housing prices as well as a slowing economy.

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Martin Feldstein says the eurozone summit of Dec. 9, 2011, was a failure because the plan for closer economic integration and financial discipline does not address the immediate problems of increasing bond yields for Italy and Spain. The summit concluded with decisions to set up a constitutional rule for each euro-zone country to balance its budget, take corrective action if the "structural" deficit exceeds 0.5% of GDP, and impose penalties if the actual deficit is larger than 3% of GDP. German chancellor Merkel wanted to have these rules put in a revised version of the EU Treaty, enforceable by the European Commission through the European Court of Justice. With Britain not agreeing to accept the plan without safeguards it requested, the new rules apply to the eurozone only, are not part of a revised Treaty and are not enforceable by EU institutions. Feldstein says it is wrong to have a common solution for Italy and Greece. For Greece the best option is to go back to the drachma, because of its shrinking economy and high debt load, and the need for a competitive currency. Italy, he says has a good chance of convincing investors to lower yields by taking strong steps. Italy's fiscal deficit is 4% of GDP, and the IMF projected Italy would have a balanced budget in 2013. How should Italy plan for the 300 billion euros of Italian bonds that need to be sold in the next 12 months? Feldstein says only 40 billion euros are needed to finance the projected budget deficit and for the rest is for existing bonds to be rolled over when they are due. Italy can repay the maturing debt with new bonds and not cash. And Italy can get the help of the IMF for some of the funds needed. On the issue of the ECB engaging in large scale buying of Italian and Spanish government bonds, Feldstein says Mario Draghi is doing the right thing by rejecting French proposals to do this, because this would be against ECB rules in the Maastricht Treaty to bailout governments and would reduce the incentive to make changes in Italy and Spain for lower deficits. ...

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The impact of foreclosure in one Detroit neighborhood called Boston-Edison, where Henry Ford once lived and how the residents who have a neighborhood association going back many years to the 1920's are coping. The human consequences of foreclosures for a neighborhood. How could either side win, the lenders or the borrowers in a foreclosure situation and the need for the government to step in and bring some sense to the whole thing before it sinks both and blights towns and neighborhoods across America. One home bought for $179,000 in April 2006 was sold in the Boston-Edison area for guess how much, $6,500. Which shows that by the time thieves who for the copper and metal mining of these homes can destroy tens of thousands of dollars in value in minutes, and the deterioration of the neighborhood with crime and boarded up looks, and the very presence of foreclosures on each street destroys enormous amounts of value so that in this case the bank and its lenders got how much, less than $6500 or less than 4% of its original price. Repeated all across America this just does not make sense. Just as it never made sense for those who benefitted from the housing boom to say that subprime lending was a good thing because it brought home ownership to the less well off. Only lending that is at rates that are reasonable and considers the borrowers true finances, and on ethical and fair terms can be good lending and only government regulation designed to be easily enforceable and keeps lenders responsible, can ensure that this happens, as a free market is not good for this sort of thing. And this is all the more true for lending to those who are less well of because their ability to screen these contracts and their wording is not adequate and their own understanding of their finances inadequate. Barclay's Capital estimates that there are 811,000 bank owned homes in the USA, up from 129,000 in 2006, and predicts that it will grow by 60% before peaking in late 2009. ...

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Prime minister Modi cites the successful Mars mission "Mangalayan" as showing India's technological capabilities and its ability to do things speedily at very low cost. For foreign investors India offers a stable politcal climate because his party has an absolute majority in parliament and controls many state governments, as well as being a democracy with a vibrant and internet connected young generation. A young population with 55% of the people under age 35 makes India the manufacturing powerhouse of the next two decades, said Modi. And the consumer base of over 1.2 billion people an attractive market. It was a rare combination of hands on salesmanship rarely seen ever on television from a prime minister. In one exceptional response about the condition of women, Modi said he personally led his ministers and legislators through Gujarat state's rural areas house to house in 45 degree centigrade summer heat on June 11-13 school opening days. He did this urging parents to send their daughters to school with the slogan "Send your daughter to school, Save a Girl." The result he said was 100% school enrollment in these rural areas for girls. A rare person at a special moment in India's history pushing the goals of development with uncommon tenacity....

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As the USA and Europe move into a deep and prolonged recession China loses some of its biggest export markets and faces a significant slowing down of its economy. China's leaders are pondering how to respond to the crisis which will affect China, and meet the challenges of lower living standards of a neglected rural countryside and farmers compared to the urban coastal areas. This is still where some 800 million of the Chinese people live by official count, so something needs to be done to improve prospects and help generate higher incomes and opportunities for people in the farming countryside. Making land use rights of farmers able to be bought or sold for the first time would generate additional income for farmers, and help consolidate farmland into larger plots, which can use technology and improvements for better yields to keep China self sufficient in agricultural production. Keeping the situation the way it has remained for the last two decades, where local party officials and local leaders controlled the land and where farmers rights were ignored leading to suppression of farmer's protests for illegal land seizures and corruption, may have made it easier for plants to be setup across China and attracted foreign investors. But it has not been good for China's farmers. Chinese party officials at the local level who realized the advantages to them by controlling land and making it easier to set up manufacturing plants with foreign investors may have steered state policy in this direction from the early days after Deng's opening to capitalism and trade. Now with a success in the urban coastal areas and in building infrastructure Chinese leaders in the central government must be faced with a difficult issue of how to move on from here with the loss of China's export markets for its heavily export dependent economy. The need to generate a domestic consumer driven economy must not be lost on the Chinese leadership in Beijing. Something that will keep China's economy moving in the new situation. This is the context in which land use rights may be extended from 30 to 70 years and able to be bought and sold to improve farm incomes and generate internal momentum in the rural areas where most of China's people live. It also offers a contrast to the situation India faces where even the Nano plant of Tata Motors had to be moved from W. Bengal state to Gujarat state over farmers rights to land which in that case was also used as an issue for political agitation. The move by China accelerated industrialization and setting up manufacturing plants as land was taken over by local officials for use with foreign investors but also ended up neglecting the countryside, and created too big a dependence on exports....

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What Handan Iron and Steel in Hebei Province 300 miles south of Beijing and ThyssenKrupp in Dortmund, Germany, have in common. The transplanting of Germany's aging defunct iron and steel furnaces and plant to Handan, boxed and crated away- its unreal that in 1998 Handan Iron and Steel bought and transferred an aging polluting plant to a city where the steel works are located in China which has 8.5 million residents. When years later the steel works were debated to be moved to a distance away from the city with Baoshan Steel, the decision was made to instead put a new plant there instead. The solution was to make pollution payments to residents of Handan. It was Mao's dream to build a steel industry in Hebei province ,which has large deposits of iron ore and coal and a rail line. Couple of questions come up to mind- one why did the first steel works go up right in Handan, and same is true of Dortmund, labor supply perhaps but couldn't homes be built nearby instead and these plants located away from cities. Second the deal for bringing the ThyssenKrupp plants was as recent as 1998, by this time China was already a big steel producer (producing more than the US by one estimate) and in a few years Chinese steel production was to exceed the US, Europe and Japan combined. With steel production already on the rise why didn't China move more carefully. Some of the Thyssen Krupp assets were built only a few years before 2000 and met stringent environmental control. China bought these.. Why didn't China pick out the best assets instead of old aging blast furnaces. The possible answers are that they were available at cut rate prices, but were they worth it. The second is that Hebei must be competing with other parts of China, and there wasn't a rational allocation of capital as would happen if a sophiticated company like a Mittal or a Tata Steel is involved. Is China operating on a outmoded concept- nationalism, competition between provinces with local government officials running the show? The other question is that in the case of the automobile industry a different pattern is seen, the most modern technology was selected , and in the case of Cherry, the most recent technology was selected for manufacturing cars, then why was this same pattern not adopted in the case of steel. In the end China has a surplus of steel mills, which makes this rush into steel production without carefully thinking through this appear to have been a mistake. The visual picture if one flies into Dortmund of manmade lakes, green park areas and residential housing and shopping from the $22 billion the EU and Germany are investing to turn the Ruhr valley region of Dortmund into a centre of education, technology and tourism now contrasts sharply with Handan in Hebei province. Can emerging countries do better, build manufacturing for jobs but keep living conditions in mind, be patient and work to achieve the best overall results, and build education, technology, appropriate for their own situation. ...

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An intimate biographical account of new Chinese leader Xi Jinping and his connections with Muscatine Iowa, where he visited as a head of a Chinese farm delegation in 1985. Xi Jinping remembers the trip vivdly and plans to spend time with friends from that visit during a visit to the U.S. in 2012. He spent two nights during that visit in the bedroom of two college age boys of the Dvorchak family. This revealing account of Jinping's life shows that the actual story of his life is quite different from the title of "princelings" or privileged sons of former communist leaders that is suggested by this reference in the media. Because of the volatile nature of Chinese politics, his father Xi Zhongxun, who led communist partisans in the struggle of the pre World War II years, was rehabilitated twice after falling out of favor. The first period was in 1962 and it was not till 1979 when he was fully rehabilitated. During this period which coincides with the growing up period of Xi from 9-26 years of age, Xi experienced many hardships. During the years of the Cultural revoultion Xi was sent at age 15 to Shanxi province where his father had led partisans. He lived there for 7 years in a traditional cave dwelling in the village of Liangjahe doing farm work. He was denied admission to Tsinghua University twice before being accepted in 1974. There he graduated with a degree in organic chemistry. This was followed by three years working as an assistant to Geng Biao, defense minister and a partisan who was a colleague of his father. The next job was deputy Communist party chief of Zhengding county in Hebei province. Iowa Governor Branstad visited Hebei in 1984, and Branstad played host to a animal-feed delegation led by Jinping in 1985- the visit to Muscatine was part of this trip and which Jinping has told others he enjoyed more than his visits to Oregon or California that year. The second time Xinping's father went out of favor was after his criticism of the crackdown of protests at Tienanmen Square. These experiences have given Xinping a confidence and experience in different situations that other Chinese leaders including the current leaders lacked. If Jinping has inherited some characteristics from his father he may also have the courage to take China in a new direction, and make the kind of changes China needs as it shifts away from an export based economy. At the same time rule in China is by consensus of leaders on the communist party's standing committee. His father helped initiate the special economic zone in Guangdong province in 1978, and Xi Xinping held senior posts in the provinces of Fujian and Zhejiang and in Shanghai, giving him close ties with industry and local government in areas that led the export based economy. Prime Minister Lee Kuan Yew of Singapore puts Jinping in the" class of Nelson Mandela type leaders, who has great emotional stability to not let his personal misfortunes and sufferings cloud his personal judgement." Of political positions Jinping has a certain wariness. He once responded to mention of him as the potential leader with the words: "Are you trying to give me a fright."...