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Voters overwhelmingly oppose the tax increase in 2015 taking the consumption tax from 8% to 10%. The Abe government plans to postpone the tax increase and call snap elections in December 2014. Two thirds of people surveyed said they did not see why new elections are needed. For prime minister Abe this is an effort to win a vote now rather than later when the opposition is weak. In 2012 elections Abe won 295 of 480 seats in the lower house of parliament. LDP party officials say even if this dropped by 20-30 seats it would be a win for Abe reaffirming that his economic policies are taking Japan in the right direction towards growth, and extending the length of his mandate. They point to growth in tourism, and the addition of 1 million new jobs. Further action to stimulate the economy would reduce unemployment further and end Japan's deflationary tendencies.

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In a speech to 3000 party officials Xi Jinping says it is the "central and united leadership of the party that made possible this historic transition." He was speaking at the 40th anniversary of the Deng reforms to open up China's economy. He said China was right to have "lofty aspirations." Yet he said China "would not sacrifice the interests of other countries," while preserving its own interests. The speech comes as China is trying to find a way out of the trade tensions with the U.S. through negotiations. The U.S. sees China in the same way that it saw Japan's rise as an industrial power in the 1980's. and seeks to preserve U.S. economic strength and balanced trade relations that give no unfair advantages to Asian competitors. The U.S. negotiating team is led by the same negotiator who led the team that negotiated for the Reagan administration with Japan-Robert Lighthizer.

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The period of disorder after the collapse of Communism led the rise of oligarchs in the Yeltsin period of 1990. Mr. Putin replaced Yeltsin and established himself by expelling most of the oligarchs of that period. Expelling these corrupt oligarchs gave credibility to Mr. Putin during his decades in power. Only to see the rise of new industrial magnates who promoted national brands, efficency, and concentration of capital in key areas of steel, oil and gas and other sectors. These businessmen are also called oligarchs though they are of a different kind similar to that of the Carnegies and Mellons and Rockefellers at a time of industrialization in the US in the late 19th century. Some of them support Mr. Putin and a version of Russian nationalism that prevailed under Czarist rule till the Bolshevik takeover in 1917 that ended by 1990.  The policies for supremacy in Europe pursued since 1500 to 1990 are now the policies pursued by Mr. Putin and shown by Cambridge historian Brendan Simms in his new book "Europe 1500 to the Present."    ...

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Unemployment hits 9.5% in June, with a loss of 467,000 jobs, according to the Labor Department. The labor underemployment rate which shows not only the unemployed but also those working part time because their hours are cut or they cannot find afulltime job is up to 16.5%. The average length of official unemployment increased to 24.5 weeks, the largest its reached since 1948. Economists say that as other sources of spending power have been lost, employment remains a very significant source of spending power. And employed consumers are also watching their spending as unemployment goes up, and a new frugality sets in.

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Hubbard and Kirkpatrick in this report say Prince Salman, at 32 years one of the youngest rulers in the Middle East, has taken steps that his predecessors had shied away from. It cites the war in Yemen against Iranian faction, blockade of Qatar, and taking power from conservative clerics. This report points out that this could destabilize the efforts at modernizing Saudi Arabia that are needed because Saudi Arabia may find itself overextended in proxy wars, and ambitious projects. The Saudi financial reserves have fallen from $737 billion to $475 billion, with declining oil prices, and the public stock offering of Aramco oil company may be jeopardized. 

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A detailed look at how Enel is trying to penetrate the Russian power market. It is investing $6 billion in Russia. Mr. Fulvio Conti, CEO of Eni, has a clear idea how he is going to operate in Russia. He has developed close ties with Gazprom, has Gazprom as a partner in ownership of former Yukos gas assets which supply power plants it is acquiring ownership of (OGK-5's constellation of power plants in western Russia.) Eni uses Gazproms pipeline network to get the gas to its plants. In this way Eni feels it has a winning model to convert gas into electricity with low risk. Eni can then wait for what it expects will be gradual progress towards liberalization of electricity markets in Russia, so that prices will be higher and give Eni good margins. It will also put Eni ahead of German and other European competitors. Russia's electricity market is expected to grow rapidly as its economy grows. It needs $120 billion in investment to build further its electricity infrastructure and foreign investment is needed in this area. Eni has also offered Gazprom reciprocal ownership of power plant assets in Italy in its negotiations, to build a win-win situation....

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Mr. Macron is beginning to listen to young voters says this report in The Guardian, yet after this election is over it says he has to do some profound rethinking. The abstention rate of 40% for young voters under 35 should be deeply disturbing. Too much power is concentrated in the presidency and little in parliament, it is true, with Macron's aloof style making things worse. Yet for young voter to say they are indifferent to a vote for Macron or Le Pen shows that Macron has much to do to win the trust of younger voters. The Guardian cites a Cambridge University study that shows the current disillusionment outstrips ones of previous generations, and has more substance than the one that shook De Gaulle in 1968 as opportunity was growing in France for all parts of society in 1968 compared to 2022.  The frustrations at work are common to US, Britain, Germany, France and all of western Europe- precarious and unfulfilling work, low pay, and asset based inequality, that is creating a slow burn generational crisis, says The Guardian. ...

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A sense of entitlement and hold on power can be seen throughout Africa. A lack of the kind of education that creates an ethic of responsibility for the educated and ruling classes, an honest civil service, and experience with and development of democratic institutions with their own checks and balances, account for some of the principal reasons for this failure in government. Even in South Africa, which has experienced several elections and is on the path to gaining experience in democratic government, Jacob Zuma and the African National Congress display some of these tendencies of entitlement to power.

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Sadanand Dhume in WSJ reflects opinion in the US that is wary of handout politics that has been carried to an extreme in India's election. In Venezuela the bad turn for the oil rich economy was when Chavez's successor Maduro ignorant of the problems it would create decided to give oil at almost no cost to all Venezuelans. In India the leading opposition party offered $1 lakh rupees to every woman in the state of Uttar Pradesh. India's federal government under Modi has given free food to about 800 million people and renewed the pledge this year because of the pandemic's devastating the rural economy- about 60% of India is still rural. This is essential for India to advance to build a broad based growth model for India similar to China 1990-2010 and Japan 1890-1915 and 1950-1970 during the transformation of their economies, similar also to the US under FDR/Truman/Eisenhower/Kennedy 1940-1965.  Clean environments Swacch Bharat was essential for basic sanitation and toilets to reduce health risks, cooking gas to shift rural women from firewood and health risks, direct deposit bank accounts for 300 million rural households essential to eliminate leakages, solar energy is planned to cut energy cost  This has brought and will bring the level of income and consumption power of the lower and middle classes to create a 500 million strong consumer base for industry. It is a carefully planned effort based on the success in states such as Gujarat, and looking at the way this was done in China and the US for learning lessons. It is not a reckless effort to win votes such as the offer of 1 lakh rupees to every woman in Uttar Pradesh state with no plan for industrialization and modernization of the Indian economy to make it the third largest ahead of the EU by 2035. Dhume is right to point this out and it is apparent to any outsider who looks at Sab Ka Vikas Sab Ke Saath- prosperity for all, including all parts of society irrespective of caste and religion.  ...

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By a vote of 223 to 202 largely along party lines the House passed a bill that brings sweeping changes to the American financial regulatory system. The 1279 page bill creates anew federal agency for consumer protection, establishes a council of regulators to police the financial system for systemic risks, initiates oversight of the derivatives market, and gives the government power to wind down large firms that are in danger of collapse and pose systemic risk. The bill also gives sharehlders advisory say on executive compensation, increases transparency of credit rating agencies, and sets aside billions in governmet money to help unemployed homeowners.

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Young South Africans, the so called born frees- born after the end of Apartheid and free elections in 1994- are diillusioned with the African National Congress of Nelson Mandela. They are disssatisfied with the lack of jobs, a poor education system, and tired of the corruption scandals under former president Jacob Zuma. A recent IPSOS poll shows only 55% of 18-24 year olds supporting the ANC compared to 61% overall. Some polls showed support dropping from born frees to below 50%. Almost half of the 58 million people of South Africa are born frees. Their view is expressed by one mother of three living in a shack in Alexandra Township in Johannesburg. She says we tried the ANC but are still living in squatter camps and dirty places. Only the ANC's reach into rural areas, its superior organization, and lack of viable alternatives, are likely to keep the ANC back in power. The Economic Freedom Fighters led by Mr. Malema, a former head of the ANC youth wing is likely to double its vote to 12% from the last election.  ...

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During the Civil War and the two World Wars it was called the War Department till changes were made in 1947-1949. The US Navy was independent of the Army and operated independently. Harry Truman changed this in 1947.Since then the US has been on the back foot even in its on backyard, where once the Monroe Doctrine made clear that colonial powers had no place in this hemisphere, today even in places like Venezuela and central America regimes operate against the interests of their people and create a massive refugee problem for the United States of America and other countries in the neighborhood. The USA was also on the back foot in the Korean and Vietnam Wars, and after prematurely declaring victory in the Cold War finds that nothing of the sort of a win in the Cold War happened, as the adversaries in the Cold War reassert their interests. And the US faces crises of refugees and on its borders, Europe faces crises of refugees and on its borders.    ...

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Kissinger on great power diplomacy and balance of power in the Middle East. He ignores the Arab Spring, the aspiration of peoples in the region, the role of the Maliki administration in reviving Sunni-Shiite antagonism and its corrupt incompetent administration that led to the rise of ISIS, the Obama administration's policy of paralysis in the Middle East and errors in policy that has led to some of the chaos in the region, and the vacuum left by the U.S. lack of any interest or involvement with partners in Turkey, Saudis, moderate Sunnis and Shiites in Iraq. Most of the people want education, civil rights, protection from religious militias, and U.S or other countries score a win-win only by aligning themselves with the interest of the people in the region which will assert itself in the long run.

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The Hindu provides this look at the life and career of European Union president Ursula von der Leyen. Today Leyen is one of the prominent leaders in the European Union, and leads the fight against the Russian invasion of Ukraine. Leyen has visited places destroyed in the Russian invasion such as Bucha and talked to refugees, mostly women and children She has stated on Twitter after proposing a complete ban on Russian crude oil to Europe- "we want Ukraine to win this war." After a mediocre performance as Minister of Defense Leyen took the position at the EU headquarters in Brussels, where her father had served as a civil servant. Her father was  elected as Minister President of Lower Saxony province after working at EU in Brussels. Leyen went to secondary school in Brussels. Studying economics at London School of Economics before shifting to medicine, getting her degree in 1991. She followed her husband to Stanford University, and after her return to Hanover in 1996 was elected to the state parliament in Lower Saxony in 2003. She joined Merkel's cabinet as Minister of Youth and Family Affairs in 2005, deputy leader of CDU in 2010 and Defense Minister in 2013. ...

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The Agnipath scheme for Indian Army, Navy and Air Force is explained here in The Indian Express. The scheme is for 45,000 to 50,000 people between about 18 and 21 years to be hired each year. These trainees will be kept for 4 years, and only 25% of those in training will be selected to continue for another 15 years. The recruits will receive between Rs 30,000 and 40,000 a month. 30% of this will be retained for benefits trainees will receive.  The idea behind it is to lower the average of soldiers in the armed services from 32 years to 26 years to reflect India's youthful population and to help those returning to the job market to find jobs in business or as entrepreneurs starting new business with government help. The experience gained in the armed services is seen as also becoming attractive to businesses that are hiring good disciplined employees. The circulation of people joining the services also makes the army a leaner force of about 1.3 million and keeps the cost of pensions at reasonable levels. With India's rapid growth in coming years the trainees leaving after 4 years will have better job opportunities and can contribute to the economic development of the country in many ways. Upon leaving the armed services the trainees will get about Rs. 1.2 million as a package to make a new start in the economy. If there was a death then Rs 1 crore would be given by the government. The government will offer skill certificates and bridge courses so that the quality of trainees remains high and this would provide a skilled workforce for the economy during a period of high growth. A modern armed services like that of India constantly being filled with next generation technology should be able to offer these new recruits the skills and training in advanced electronics, computers, and other technical fields with field training to supplement courses, and the motivation to excel, that would be valuable to many companies. This is the idea behind Agnipath. It is also a tested path as the US armed services also provides this kind of training and many people who have joined and left the US armed services have performed at high levels in American companies in technical and managerial positions. Another feature is "All India All Class" which will make it open to all caste, all region, all religion, and free up the armed services from the current situation of regiments having a caste and region bias. This is a constructive and well thought through aspect of the plan. ...

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This opinion in The Guardian points out the difficulty that Lula da Silva faces in governing after a narrow margin of victory of about 1.8 percentage points in the presidential election in Brazil. It is a very different country than the one in which he was first elected in 2003. The right wing parties gained 249 seats compared to 141 seats for the Lula PT party in the lower house of parliament. This means Lula will have a harder time governing, needing centrist party support, and tackling the large fiscal deficit of 8% of GDP.

In the elections for the governors of states Bolsonaro won in 14 of 27 states including the large state of Sao Paulo. Lula owed his victory to large margins in the 10 relatively poor northeastern states where incomes are below $400 a month including Bahia. Where incomes are over $400 as in Sao Paulo the vote was in Bolsonaro's favor.

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E.J. Dionne, of Gerogetown University and the Brookings Institution, says the current situation in U.S. politics resembles the 1912 presidential election when a Princeton professor Democrat Woodrow Wilson called for stronger curbs on big financial institutions, and Republican Teddy Roosevelt, a former president, called for tighter regulation. During his presidency Roosevelt had helped pass legislation to curb monopolies, and represented the Progressive wing of the Republican party. Taft who was president was Teddy Roosevelt's protege and vice president before becoming president, and alienated Roosevelt by moving away from progressive actions taken during Roosevelt's administration. Dionne says Hillary Clinton's views are similiar to Teddy Roosevelt's views, and Bernie Sanders' views to Wilson's views. Wilson won 435 electoral votes to Roosevelt's 88, and Tafts 8. The big difference now is that on the Republican side the progressive wing that Teddy Roosevelt established is non existent, with Cruz's positions similiar to Reagan's, Kasich and Cruz at best close to Jack Kemp's views on broadening the Republican base with concern for working class issues, and Trump's views not clear because of lack of clear policy or programs beyond the personality based campaign. Dionne points to the problems facing the "progressives" of Sander's young supporters staying away from the polling booths with Hillary Clinton as the nominee, putting a Republican nominee into the White House. Overlooked here is the idea that much of the election campaign even in an advanced country like the U.S. is fought on slogans, leaving out some critical facts. The problems progressives face emerged during a period when a Democrat was president, and the influence of lobbyists had not diminished. Outsiders on the Republican side are focussed on diminishing the power of lobbyists, the political calculus of elections, and other interests that have affected policy in the last 8 years hurting the middle class and working class. ...

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The controversy surrounding the statement by Trump following the hacking of the DNC emails and putting it out on the 1st day of the Democratic National Convention was covered widely. Trump said: "Russia, if you are listening, I hope you're able to find the 30,000 emails that are missing. Let's see if that happens." This coupled with Trump statements that he would not assure the Baltic Republics and other parts of Eastern Europe  that the U.S. would come to their aid in the event of a Russian attack have created new tensions in Europe. This has also led to heavy criticism from U.S. military commanders, from NATO leaders, and from leaders in the Republican and Democratic parties including Speaker Ryan. Some called it "a seismic development," and unprecedented, with involvement of foreign powers in the U.S. elections generally resented by the American people, according to experts.

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The Kristian Anderson memo to Dr. Fauci is the No. 1 story in the WSJ on June 5. This memo written on Jan 31, 2020 shows the initial reaction of the leader of five virologists to the coronavirus genome. Nicholas Wade writing in WSJ cites this memo as having missed the censors marker as the emails to Fauci were released under the Freedom of Information Act. The initial reaction is cited in the Anderson memo to Dr Fauci as seeing "unusual features" in the virus. These were in a small percentage of the genome, "so that one has to look really closely at all the sequences to see that some of the features (potentially) look engineered." Mr. Anderson goes on to note that he and his team of virologists 'all find the genome inconsistent with expectations from evolutionary theory." What does Anderson mean by this important phrase? Anything inconsistent with evolutionary origin has to be man-made is the conclusion drawn by many virologists including David Baltimore, cited here in the WSJ. Virologist later modified their stand saying it was evolutionary because of professional interest in not starting a what WSJ calls "storm of condemnation" over gain of function research, a exotic name for genetically enhancing the pathogenic power of viruses or increasing its transmissibility effect. Nicholas Wade is a Science writer who has worked for Nature, Science and The New York Times. ...

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GM's joint venture with Luizhou Wuling Motors has produced a win-win situation for both companies. Wuling was a small, regional manufacturer when the joint venture started. Now Wuling has more than 1 million in unit sales. And GM has benefitted from the rapidly growing sales. Year over year sales were 29% in 2010, and were slowing to 10% in 2011, with the end of government incentives. Wuling vans can now be sold under the GM brand in India, using lower cost manufacturing in China. Looking back this was good for GM. The future however has some twists and turns and could turn out to be different. Wuling joint venture will produce cars at a lower price point under the Baojun brand. These cars were shown at the Shanghai Auto Show, and will be marketed to customers who are looking for affordable cars in the second and third tier cities in China. The Baojun brand joint venture will have one difference. This brand involves intellectual property being held in common with Wuling Motors. This is part of China's new plan for American and European manufacturers in China- the price of access to the Chinese market is greater technology sharing with Chinese partners. In the long run this should enable Chinese manufacturers to be dominant inside China. This process is already underway. According to J.D. Powers, Chinese brands had 32% of the domestic passenger vehicles market in 2010, up from 18% in 2000. Something similiar happened with Japan, where Nissan was making Britain's Austin A40 series in the mid-1950's. By the 1960's the foreign tieups were replaced by Japanese manufacturers dominant in the home market and exporting their own models. ...

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South Korea's democratic form is recent. Since Sygman Rhee in the 1950's and student protest in 1960's three decades of military rule have weakened the country's democracy transformation efforts. Only since 1988 have free elections given Koreans a respite- just 36 years. Presidents are impeached and resign many times in these 36 years showing the fragility of the democratic forms of government in South Korea. The presence of a Communist North Korean regime and memory of the Korean War in 1950 add to the polarization in the country between right wing and left wing parties and politicians. Yoon is a clear example of a prosecutor becoming a candidate for president who was not anchored in a clear grasp of the limits of the power of the president and need to work with opposition parties. When he dabbled wildly in right wing politics that described the North Korean threat as close to home, this led to martial law and his presidency unraveling. 

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The increase in natural gas supplies from shale in the U.S. is dampening the interest of energy companies in the development of nuclear reactors. It is also changing the whole trajectory for energy sources in the U.S. The Energy Information Administration's forecasts for new additions of power generation capacity 2010-2035 show that natural gas will be the dominant source with 58.1%, nuclear is only 4%. Wind is 13% and other renewables including solar is 16%, giving renewables about 29%. Coal and fossil fuels are at 8% and hydropower 1.6%. This is a major development in the energy industry, for the U.S. efforts to reduce dependence on imported energy supplies.

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Krugman on taxes, Simpson Bowles and "low rates." He describes the U.S. under Dwight Eisenhower, a Republican president and war hero. A period which he describes in which unions had bargaining power, a third of workers were union members, and in contrast to to the 1920 business executives lived modestly and paid higher taxes. And yet the U.S. registered high rates of growth. There are several aspects to this period in contrast to the present that also need to be kept in mind. The post war booming economy after two decades of slow growth and war. Much of the present infrastructure in the U.S. was built during this period including the interstate highway system started under Eisenhower. The workers of developing countries of China, India and other parts of the world were not a part of the global labor force till the 1990's, with technology and transportation making global manufacturing a reality. The major factor in lowering wages and creating lower levels of unionized workers in the automobile as in other industries is the competition from lower wage labor in China and other Asian countries, and the presence of non unionized plants in the U.S. The choices made by economic decisionmakers of both parties in the last two decades, say experts including Fed chairman Bernanke, created a huge inflow of capital from Asia that led to housing and other bubbles, creating economic crises such as the one in 2008 and aggravating economic inequality. ...

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The peaceful transition in Zambia as Michael Sata wins the election. Sata's party won the election with 43% of the votes compared to Hastings Banda's party's 36%. The outgoing president Hastings Banda's party had been in power for two decades. This is a remarkable peaceful transition of power after disputed elections in the Ivory Coast, Zimbabwe and Nigeria. Sata's support came from the urban young, jobless people and the labor unions. He was critical of mining investments by western companies and China for paying low wages, and campaigned for higher tax revenues from the mining industry. This is a remarkable transition and a good example for future elections in Africa. Recent elections in the Ivory Coast led to a transition that had to be enforced with French support.

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Feldstein sees the need for some kind of tax cut in 2008 that would be triggered by increase in unemployment. He advocates further decreases in interest rates by the Fed in 2008. He doesn't see much relief for subprime borrowers. The doollar in his view is still overly strong and a lower dollar would help the US reduce its trade deficit by stimulating exports even further.