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Russia faces inflation of 7%, and the central bank policy is to fight inflation by increasing interest rates to 7% in March 2014. The crisis in Ukraine and Russian intervention in the Crimea has worsened the prospects for the economy at a delicate time after Russia's growth rate was slowing rapidly in 2013. Capital flight in 2013 accelerated in the 1st quarter with the Ukraine crisis- with about $60 billion in capital outflows in the 1st quarter 2014. Speaking at an investor conference in Moscow, the former finance minister Alexei Kudrin, who strengthened Russia's finances in Putin's previous term continued to warn about taking risks with the economy and Russia's finances. He had earlier warned about higher defense spending. He now says the sharp economic slowdown expected with a possible contraction of 1.8% in 2014, is the price Russia is paying for an independent foreign policy. The policy is popular in Russia now with Putin's rating at about 80% in April 2014, but Kudrin says this does not reflect the situation if the contraction leads to falling real incomes. As investment spending stalled in the 1st quarter, only consumer spending supports growth for the remainder of the year. Russia's Economics Ministry favors stimulus to support growth, but the central bank is concerned about keeping inflation of 7% in check, and the Finance Ministry favors current policy of building up the rainy day fund from higher oil prices. As a result no stimulus is planned even as the economy slips into a risky contraction phase. For emerging markets in 2014 political problems have exacerbated slowing growth first in Turkey in 2013, and now in Russia in 2014, with the reverse taking place in India and Indonesia where elections and a change in government lead to more optimism....

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Ilan Berman, vice president of the Foreign Policy Council in Washington D.C., cites former finance minister Alexei Kudrin about capital flight from Russia reaching as high as $160 billion in 2014. This is a result of Russian policies in Ukraine that are creating a high degree of uncertainty and investor fears about the Russian economy. The result Kudrin says would be a stagnating economy. This follows the emerging market crisis in the beginning of 2014, which hit Turkey, Argentina, and Brazil. Kudrin is respected for his efforts to strengthen Russia's finances in Putin's first term in office, and left the administration over disagreement with prime minister Medvedev on damage to finances from higher defense spending. This suggests Putin and Medvedev in their first terms as president conducted more prudent policies for the economy than they are doing in Putin's second term. A certain recklessness seems to have crept in as many respected advisors from that period have left over differences in policy, including how protests and the opposition's views should be handled. This includes Medvedev's early efforts after elections for dialogue with the opposition parties which were set aside by Putin. The danger with having a Bolivarist class of tycoons as in Venezuela and some developing countries, instead of wiser heads around him for Putin, is that he will lose the advice and counsel he so badly needs to conduct policies without letting emotions getting the better of a sound judgement. A large foreign exchange reserve is a buffer for Russia, but this needs to be used to diversify the economy away from dependence on oil and commodities by investing in technology industries to create jobs in other fields, and not wasted in higher defense spending and fighting investor sentiment for the value of the ruble. It also shows that there is an inherent value in having a "loyal opposition" and "shadow cabinet," and these institutions were not invented over centuries of practice in government without a reason, in that they actually help the governing administration pursue prudent policy without arbitrary actions. The irony is that the very fears of 1998 repeating itself with the "chaos" of western style democracy and politics and manipulation by oligarchs- a Putin complaint- is reversing the gains made by Russia since then, with another set of tycoons and vested interests in place. Russians, like the Germans can learn to make democracy work without a centuries long history of democratic traditions, elections and free media. Czarist traditions can be overcome just as the Prussian traditions were overcome, and Russians can come up with their own Wily Brandts and Gaucks, leaving behind the old history of suppressing contrary opinions. For this to happen Russians including Mr. Putin need to leave their own fears behind, and trust the Russian people for the right instincts and values and maturity of judgement, just as the Germans have done and succeeded. ...

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General McChrystal gets the support he is looking for against the Taliban in Afghanistan, as Gates, Obama and Clinton, make the decision to continue backing the Karzai government, even though it is very unpopular and the ground reports suggest that this would be amistake. It was NATO that announced the support because the Obama administration had deep concerns about the Karzai government. The US and the UN representative Kai Eide wanted to see arunoff for the elections but the "assumption" that he would be reelected suggests the Obama administration, the UN representative, and the UK and Canadian foreign ministers in ameeting have decided to continue the war in Afghanistan on Karzai's side.

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Emperor Akihito's efforts to remind Japanese about Japanese war history after the Manchurian Incident in 1931. In his New Year's address Akihito tried to address the importance of learning from history as memories of the war fade with the young generation- "It is important for us to take this opportunity to study and learn from the history of this war, starting with the Manchurian Incident of 1931, as we consider the future direction of our country." The Abe administration's effort to revise Article 9 of the constitution to allow "collective self-defense" is unpopular in Japan, and the Emperor nudges the Japanese people in the right direction.

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The new minimum wage of $15 effective Nov. 1, 2018, applies to 250,000 current employees at Amazon, 40% of its global  workforce. An additional 100,000 seasonal workers also get the $15 wage. California's minimum wage is set to go to $15 an hour in 2022. The Amazon move helps it attract and retain workers in competition with other retailers such as Target, UPS and Fedex. In doing this Amazon is removing certain incentive pay and stock compensation for these hourly employees. Target has set 2020 as the date for $15 per hour wage, currently it is $12 at Target. Walmart with 1.5 million employees set $11 per hour as the starting hourly pay for workers in 2018. Overall median salary annually for Amazon workers worldwide was $28,446 in 2017, which works out to about $13.68 an hour, but this includes software engineers and lower wage workers overseas. That figure is lower than the poverty level set by the U.S. government for a family of four. Much of the criticism has focused on wages at companies such as Amazon, as lack of upward mobility is a major issue in the U.S. - growing worse over two decades of tech advances, also carrying with it literacy levels for children which have also deteriorated. ...

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As a group Hispanics are reported to be hit hardest by this recession, harder than African Americans. In a Feb 9, Washington Post poll, both African Americans and Hispanics were optimistic about the future for the next generation, even with the dismal economic prospects, because things have improved greatly for this generation of black people and Hispanics compared to their parent's generation. And this progress is projected into the future. As a group the most pessimism was shown by white people. Whites say the Obama administration is doing very little for their families, and not doing enough for the middle class and working class Americans and small businesses. They were much more critical about the the administration's cozy relationship and doing "too much" for Wall Street financial institutions. By a 2 to 1 margin whites saw the Obama administration's economic program as harming the national economy.

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Richard Cohen, Washington Post reporter, on the "no fly zone" option in Syria and how it could have prevented the loss of 300,000 lives, prevented millions of refugees, and moving politics in Europe in a direction that reverses the gains made in the post war period towards a more tolerant society.

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How will countries like India generate jobs when technology enables manufacturing and other activity to do work with fewer and fewer people. Even Hon Hai in China is shifting work to robots. Technological progress is leaving more people unemployed and widening income gaps with the benefits going to a few people, says the Economist in this research based essay. It will require carefully managed governance to invest in infrastructure, raise skills of less skilled workers through education, and wage subsidies for those left behind to ensure our current system works in the future.

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This WSJ editorial says president Obama's inaction, including the smaller step of not putting in place a safe zone in Syria, comes at a price for Liberals. The recent action by Governors in Michigan and other states turning down Syrian refugees, it says is one of the moral consequences of Obama's policies. For Liberals it says a policy of inaction and turning America's back to the needs of ordinary Syrians during the Arab Spring is not neutral, it also has consequences. The consequences for Liberals is the steady stream of refugees to Europe, and the greater intolerance in western societies as the safe havens created by these policies in the Middle East lead to terrorist actions in Europe or the U.S. In short doing little or nothing carries risks for the kind of society liberals want to see. Through developing policy in response to the Bush Administration's policies the Obama administration makes a series of errors of its own that compromise liberal values, including the collapse of the Arab Spring without American and western support, and the creation of a huge refugee crisis in Syria, Iraq, with a spillover to Jordan and Turkey, and further spillover to Europe. Liberals in Europe also face a similiar situation, including Liberals in France....

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This Journal editorial on Oct 5, 2012, says that by not offering leadership in the Syrian conflict beause it would lead to a wider conflict the U.S. and the European Union face a wider conflict. The current crossborder shelling between Syria and Turkey is the latest evidence of this. Turkey and the Saudis cannot handle this on their own. Without U.S. leadership the costs of this conflict will be even greater, and even poses risks for the Turkish economy if handled badly.

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Daniel Yergin of consultancy firm IHS describes the geopolitical disputes in the Middle East between Russia, Saudi Arabia, and Iran that are leading to likely continued oversupply of oil in 2016, keeping prices in the $30-$40 range. Saudi Arabia is not likely to change its policy of going after market share, Venezuela is affected but lacks a voice in OPEC decisions, Russia continues its policies in Syria and Iraq under the Putin government affecting other Sunni states, and Iran following the lifting of sanctions is likely to ramp up supply to make up for its lost market share- all leading to an extended period of low prices. This situation benefits China, the European Union countries, India, Turkey and the U.S. in a period of slow economic growth in 2015-2016. Russia looks to use this period of low oil prices to shift to domestic industry after a period of rising imports when oil prices were high. The Saudis seeing their interests in the region threatened by Iran and Russia, and dissatisfied with the foreign policy of president Obama, see a policy of pushing for market share as appropriate in the current geopolitics of the region....

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The racial polarization in the U.S. before the presidential elections of 2012 between Romney and Obama. During the 2008 elections Obama did as well as Clinton by getting 43% of the white vote, it now appears headed into the 30's. This situation is reminiscent of the one facing Mondale in the 1980 election with Reagan, when Mondale received only 35% of the white vote. Fully 91% of the support for Romney comes from white voters as he passes 50% among overall voters in a late Oct. 2012 ABC/Washington Post poll. One irony in this situation is that Obama contested the 2008 election as a person who could bridge the racial divide.

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Porter of the NYT points out that the figures released from census information that the U.S. median household income increased by 5.2% in 2015 to $56,500 is good news for Americans including minority and working class families at the lower tiers. However more needs to happen compared to previous recoveries in the mid-90's, and for people who suffered during the recession to finally put that experience behind them, says Porter. 

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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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Did U.S. Treaury Secretary, Timothy Geithner, ignore a key request by President Obama to present plans for the restructuring of Citigroup after the government bailout of Citigroup? Ron Suskind says this is what happened in his book on the Obama administration and how the White House operated to make key decisions. Ron Suskind, intervewed key members of the Obama White House economic policy team, Lawrence Summers, Christina Romer, Peter Orszag. In all Suskind conducted 700 hours of interviews for his new book in Sept 2011: "Confidence Men: Wall Street, Washington and the Education of a President." According to the book, in early 2009 after Obama authorized a series of stress tests for banks he told Geithner to develop a plan for restructuring Citigroup. A month later at a meeting not attended by Geithner Obama raised a question about the status of the plan. He was told by Romer that no restructuring plan had been developed for Citi. Suskind says Geithner disagreed about a plan to restructure Citi and decided to ignore the request. Geithner and the Treasury Department say Obama asked Geithner to develop a backup plan to overhaul banks if the government was forced to keep a big ownership stake in the companies, and "there was fortunately never a need to put them in place." Geithner told Suskind that he doesn't slow-walk the President on any matter. Other aspects of the operation of the economic policy team that Suskind covers are a series of memos from top aide Pete Rouse raising questions that ongoing communication between some members of the economic team and Summers was giving Summers power to shape policy. Summers, Director of the National Economic Council, is shown as trying to keep out the views of Romer and budget director Orszag from reaching the President without going through him. When Orszag gives a private report to the president on the deficit, Summers objects saying that this was immoral. Obama lacked the fresh ideas needed to tackle the problems created by the mortgage and banking crisis of 2008, when he used the Clinton administration economic policy team of the 1990's- Rubin, Bernanke, Summers and Geithner. Fresh approaches were needed two decades after Clinton's election in 1992, and the Bush administration that followed, as many of the problems developed during this period. The similiar embedded thinking was shared during the Clinton and Bush administrations and the economic advisors about dealings with the banking sector, but the situation for deficits, unemployment, housing, and the economy had completely changed requiring fresh approaches. ...

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Five rules the editors of the WSJ say should be followed when working on cleaning up the banking system. A clear no, as Krugman and other experts point out is for the government to make the rather imprudent move to take on all the debts of the banks as in Ireland. A second rule is not to underestimate the size of the problem and delay action till the problem gets much worse, when its harder to deal with. ECB president, Mario Draghi, pointed out the problem at Spain's handling of Bankia bank as a clear example, telling the European parliament recently: "There is a first assessment, then a second, a third, a fourth. This is the worst possible wayof doing things. Everyone ends up doing the right thing, but at the highest cost." A third rule is to set clear rules about banks, who gets rescued and who gets closed and why- so that its not left upto the discretion of officials. On this rule Spain's outgoing Zapatero administration gets good marks from WSJ for settting clear rules to the cajas svings banks. A fourth rule applicable to Europe is to first setup the expertise and conditions for a European banking regulator before setting up a banking union and direct injection of funds by the EFSF into banks of individual countries. A fifth rule is to avoid creating even larger mega banks by consolidating failing banks with large banks, and continuing the government's implicit guarantee of the bank because it is "too big to fail" and creates systemic risk- this is the situation after action by the U.S. Federal Reserve, regulators and the U.S. Treasury....

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With inflation running at 6.7% in Russia, the central bank has decided not to increase interest rates following the U.S. Fed's bond purchase tapering decision in Jan 2014. The ruble declined by 6% in Jan 2014 and 15% for the last year. With the economy slowing the central bank finds it difficult to raise interest rates, and with inflation the bank has less flexibility to lower rates and increase credit availability. The ruble's lower value is a result of a shrinking current account surplus, with the added effect of capital flight from markets seen as riskier by investors. Currency collapse is a sensitive issue for many Russians after the 1997 crisis and collapse of the ruble. Central bank chief Ms. Nabiullina was on television explaining the decline to ordinary Russians, saying- " It's not that the ruble is weakening but the dollar and the euro are rising in price." Economists say the ruble's weakening won't add as much to inflation as slowing demand will make it harder for retail chains to raise prices....