LyrArc Article Gist
Lower prices of European stocks makes them more attractive. Cuts in interest rates by European central banks are another factor in pushing the French stocks CAC index and the German stocks DAX index by 8% and 9% respectively. This compares to the S&P 500 Index for US up by 2.45% by February 7, 2025.

LyrArc Article Gist
John Taylor, says Obama and Alan Krueger (Obama's new head of the U.S. Council of Economic Advisors), said some of the same things in early September, 2011, that were part of Obama's old plan to revive the U.S. economy. And the old plan has failed to produce results. The part that puts construction crews to work on the roads, railways and airports was tried earlier in the stimulus plan. Because of a lack of showel ready projects, and the state governments putting most of the money in their state coffers, this only increased infrastructure by a miniscule 0.05 percent of GDP, according to research by Taylor and John Cogan. Taylor's sees the moves by the Obama administration and the Bernanke Fed as not only being ineffective, but having the opposite effect of lowering investment and consumption demand through increased concerns about the federal debt, another financial crisis or the risk of inflation or deflation. The U.S. private sector has the money to make the investments that create jobs but their concerns have led to holding back. Taylor points to the need for a comprehensive economic strategy to replace these temporary interventions. The debt limit agreement of 2011 is a part of this strategy, and he agrees with reducing spending in a gradual way in a weak economy. The other parts of this strategy he says are entitlement reform, tax reform, regulatory reform, monetary reform, including a reappraisal of the role of government in the economy. This should lead to a more stable and predictable economic environment and reduced uncertainty about the future, which is critical to improving supply and demand....

LyrArc Article Gist
What changed asks the Economist between the summer when the stimulus was petering out and analysts sniffed deflation for 2011, and today with the euphoria for stock markets and estimates of 4% growth for 2011? Much of the reason for the change is a second round of quantitiative easing for $600 billon announced by the Fed- buying bonds with newly created money to push down rates and stimulate lending. And the December 2010 compromise for across the board extension of the Bush tax cuts. But even though this improves the prospects for 2011, the situation after that is still in the medium term as treacherous as ever, even more so, says the Economist. High interest rates and shaky business confidence can be fixed with strong stimulus, but households and banks have to work off the excessive debt taken on in the last decade. And this deveraging has years to go. So expect more difficult patches where investor euphoria quickly turns to gloom. One other aspect of the current situation is worrisome. The bipartisan deal for the Bush tax cuts was not real bipartisanship, as each side agreed to the others huge giveaways. Real bipartisanship must mean more painful decisions in spending and taxes. The US government's failure to sort out its finances will continue to cast a shadow over the future of the economy....

LyrArc Article Gist
Lucie Castets, candidate for prime minister of the largest parliamentary group in the National Assembly of France, the NFP,  is interviewed in The Guardian. Kim Willsher interviews Lucie Castets at a cafe in the Marais district of Paris.  Castets says- “France is a rich country but people are getting increasingly poor, they don’t know if there’s going to be a teacher in front of their kids, they don’t know how long they’re going to wait in casualty if they break a leg, they don’t know how much their salary will be in a year. Who can accept that? Well apparently, Emmanuel Macron accepts that, but I think it’s unacceptable.” A government is needed in France for a budget to be passed by January 2025. A caretaker government of Macron's party cannot do this following its poor showing in the recent election. Macron refuses to let NFP form a government with outside support saying he was doing this for "institutional stability." Macron wants to see cuts of $25 billion. The NFP wants to spend $150 billion for the government to meet the needs of the people. It would like the US, recover most or all of this $150 billion from higher taxes for the ultra rich, and billionaires which would not affect 95% of the French people.  Castets says- Castets rejects the ideas this would be “impossible to apply or finance” and cost jobs. “We will finance each measure with new revenue, unlike the government. The accusation of economic irresponsibility irritates me because that’s not what we’re proposing at all. The NFP’s programme was heavily attacked on this aspect, so it’s important to say that these measures will only affect the ultra-rich. We want to correct flagrant tax injustices, with billionaires paying a lower percentage of tax than the middle classes.”   ...

LyrArc Article Gist
The Congressional Budget Office says the U.S. is likely to experience "a significant recession" if Congress does not prevent tax increases and spending cuts setup for January 2013. If the Bush era tax cuts expire as scheduled at the end of 2012, these tax increases and spending cuts of $100 billion on military and other programs would reduce the deficit in the fiscal year ending Sept 30, 2013 to $641 billion from the $1.13 trillion level at fiscal year end Sept 30, 2012. The impact would be to reduce the budget deficit from 7.3% of GDP to about 4%. The result- a contraction in GDP by 2.9% in the first half of 2013, and 0.5% for the full year, and unemployment would rise to 9.1% at the end of 2013 from about 8% today. If Congress postpones the tax increases and spending cuts the deficit would be at $1.04 trillion or 6.5% of GDP and unemployment would remain at about 8% at the end of 2013. A 9% unemployment rate with the "fiscal cliff' means 2 million fewer jobs. Romney's plan is to extend all the Bush era tax cuts for 1 more year and no spending cuts till he has a chance to make hs own review on spending cuts in 2013. Obama's plan is for extending all Bush era tax cuts except for those earning more than $250,000- resulting in savings of $2 billion in 2013 and $824 billion in 10 years- and making smaller spending cuts than Romney....

LyrArc Article Gist
Matt Miller, a former Clinton aide, says both U.S. parties have failed to do serious problem solving. The reason is that both are looking primarily for election advantage and are not interested in blending the best of liberal and conservative thinking. He even goes so far as to say both parties don't trust the public enough to lay out all the facts openly and explain what action needs to be taken. This is clearly true in one of many examples- the way Clinton advisor Bowles and Republican Senator Simpson took up the job of coming up with a deficit reduction plan looking at things from all angles, and laying out all the facts. Contrast that with the way a Democratic president Obama shied away from openly discussing Bowles-Simpson's closing of most tax expenditures as a key a part of a new action plan. Republican leaders Boehner, Cantor, McConnell, instead of seriously challenging the Democrats to take up the Bowles-Simpson or Rivlin-Domenici proposals, focussed their attention on defunding the government unless certain conditions were met. Serious debates and discussion that should have taken place to arrive at a consensus never took place, eroding the credibility of politicians of both parties, as Miller points out. The failure of leadership brings America back to its roots in community organizing through independent intitiative at all levels for crucial problem-solving discussion. This is the way to arrive at a consensus of what needs to be done for renewing America....

LyrArc Article Gist
Walmart sold three of its overseas store operations in the last 2 months, some at a loss as it decides to focus on e-commerce. Walmart exited operations in Japan keeping a 15% stake and selling the rest of the operation to other companies. Walmart sold Asda Group Ltd. in UK at a non-cash after tax loss of $2 billion and operations in Argentina at a non-cash aftertax loss of $1 billion. In 2018 Walmart sold its operations in Brazil at a loss.

It has been hard for Walmart to use the same strategies that it used in the U.S. to achieve dominant position by squeezing out inefficiencies in supply chain and getting the best price from suppliers.  In Japan its subsidiary Seiyu required infusion of $2 billion in 2008 without generating any income in recent years. 

LyrArc Article Gist
ProPublica Report that shows taxes paid by Warren Buffett of Berkshire, Jeff Bezos of Amazon, Michael Bloomberg of Bloomberg, Soros of financial business, and Elon Musk of Tesla. This report put out by Americans for Tax Fairness shows tax rates of a group of 25 such business persons at 3.4% on wealth growth between 2014-2018 of $401 billion. This is not to say that Democrats or Republicans can be elected to solve this, which is basically a problem not of fairness but of how it enables underfunding of America's basic infrastructure of health, education, transportation, and public services such as parks, clean air, and renewable energy, energy grids, water supplies, heating infrastructure, on and on on the list. Why because the difference between a modern industrial base country and a backward, lack of industrial base country is just this list. When the companies also unfund maufacturing in the US as Apple does by making almost  all products overseas it means lossof manufacturing knowhow and loss of leadership of the free world which simply means chaos without America's leadership based on its founder's values.   ...

LyrArc Article Gist
John Harwood provides an insight into the polarized positions of each side in the negotiations and the changes in the national scene that have led to a polarized political climate and a polarized Congress. The political positions on the Republican and Democratic sides in Congress and the Senate are different from any other time in many decades of government. Between Tea party members of the House and Pelosi Democrats in the House there is a serious divide. The senior leaders of each party command less support. Consider the loud "no" given by newly elected House Republicans led by Rep. Cantor to Senate Republican leader Mitch McConnell's backup plan. The written pledge for no tax increases has given the Cantor House Republicans little room for compromise. And as Harwood points out each side, the tea party House Republican group, the Democrats in Congress, and the President, all know there is every chance that they could be voted out of office in 2012.The media is also splintered with vocal positions on either side. As Senator Chambliss of the Gang of Six Senators said on a talk show a week before the August 2 deadline for raising the U.S. debt ceiling: "Frankly, we don't know what's going to happen for sure." ...

LyrArc Article Gist
The major provisions of the Republican House healthcare bill that passed by a vote of 217-213 are- 1. To help people buy insurance coverage the bill offers $2000 to $4000 a year, upto $14,000 a year in credits based mainly on age, reducing them for families making $150,000, individuals making $75,000. 2.  Under the Affordable Care Act insurers cannot charge older Americans more than 3 times for same coverage they offer to younger people, the new bill makes this 5 times. This would increase premiums for older Americans and reduce it for younger Americans. This is the most controversial part of the bill. Older Americans supported the Republican party in the presidential election. 3. The new bill ends Medicaid as an open ended entitlement and places this on a budget with cuts of $880 billion over 10 years. 4. To mollify conservative Republicans a provision allows state to opt out some provisions of the ACA that requires minimum benefits such as maternity care and emergency services. It retains coverage for pre-existing conditions to mollify moderate Republicans. The bill provides states with $138 billion over 10 years to subsidize premiums, provide coverage for pre-existing conditions, mental healthcare and drug addiction. 5. The bill removes the taxes imposed under the Affordable Care Act (ACA) on high income people of about $300 billion over 10 years by repealing a payroll tax increase and tax on investment income. This bill and the ACA offer 2 competing visions on healthcare, both bills passed only by a margin of 4-5 votes in the House. The ACA overlooked the impact on premiums causing discontent among middle income Americans. The new bill lets premiums rise for older Americans in order to keep premiums down for other Americans. This shows the many tradeoffs involved and choices being made, and the lack of a consensus on the issue of healthcare in the U.S., becoming a highly politicized issue instead of the way it is treated in western Europe.     ...

LyrArc Article Gist
What date should one keep in mnd if both sides fail to reach agreement in U.S. "fiscal cliff" negotiations? Payroll tax and other tax increases go into effect Jan. 1, 2013. Spending cuts could be backloaded to the latter part of 2013. Early January would be when a debt ceiling increase would lead to more negotiations and if no increase in the debt ceiling is made by March 27, the government would go into partial shutdown.

LyrArc Article Gist
Serious concern about lower consumer spending in the U.K that would reduce growth and reduce government tax receipts. The unemployment rate has remained at 7.6% for 22 months. Wage levels are not keeping up with inflation of about 4.5%. The increase in the sales tax from 17.5% to 20% has added three quarters of one percent to the inflation rate, according to the National Statistics Office. VocaLink says annual wage growth in the three months through May 2011 was 1.8%, much lower than the inflation rate. Deep spending cuts are going into effect in 2011-2012, and about 300,000 jobs would be lost in the public sector with spending cuts by 2015. The IMF has reduced its estimate for growth in the U.K. to 1.5% from 1.7%. At the same time the Bank of England is under pressure to increase the interest rate of 0.5% (which is a record low), to control inflation. Britain under prime minister Cameron plans to cut government spending from 47% of GDP to 40% of GDP over six years. This will take 6 years of spending cuts, something even a previous prime minister Margaret Thatcher was not able to do. The government's Office of Budget Responsibility predicts a drop in the deficit from 11% of GDP to 7.9% by March 2012. Yet a lot depends on government tax receipts which in turn depend on economic growth. Britain showed a large deficit of 10 billion pounds in April 2011, and the situation is fraught with a high degree of uncertainty....

LyrArc Article Gist
A crisis situation exists in state revenue and spending needs. According to a Census Bureau report overall state revenue in the US dropped 30.8%, to $1.1 trillion, between fiscal 2008 and 2009. The gap between the spending needed to provide services in the recession and revenues is very large. States fiscal problems along with housing losses, will be the two forces acting as a drag to the US recovery in 2011-2012. State payrolls will be cut back and contracts to private companies reduced to cut spending. Declining federal help in 2011-2012, with the new focus on reducing the federal deficit, will worsen the situation. According to the Center for Budget and Policy Priorities, even with large federal help 46 states had to raise taxes and make cuts to close a combined gap of $130 billion in their current budgets. And next year 40 states already have projected gaps totaling $113 billion. Even as revenues drop, the Census Bureau report says the state government expenditures went up by 3% to provide essential services, safety net programs and education. Illinois has a budget deficit of 45 percent of its overall budget, according to the Pew Center on the States. In California it is equal to 13% of te state's total budget, and in Arizona it is 15%. For 2009 tax collections fell by 8.5%, and were partially offset by a 12.9% increase in federal help, which was a total of $477.7 billion, according to te Census Bureau report....

LyrArc Article Gist
Greg Ip provides useful insights into the nature of the economic recovery in Britain compared to the U.S. by 2015. The recovery in Britain has done better than in the U.S. in job creation, but has lagged behind in productivity gains. The labor force participation rate is 72% in Britain compared to 68% in the U.S., going back up to 2007 levels in Britain, whereas in the U.S. it has steadily declined with some older working class Americans too discouraged to look for work and left behind. Stagnant wage growth is a major issue in Britain, more so than in the U.S. where wage growth is slow. Economic austerity is not the main cause of the economic difficulties as the coalition government of prime minister Cameron relaxed earlier goals for austerity by 2012 with tax revenues and growth below forecasts. The structural budget deficit has been reduced by 6.6% of GDP since the peak, and the Office of Budget Responsibility estimates the UK economy was 1.5%-2% smaller by 2013 because of the austerity policies. Britain was also affected by the eurozone crisis to a larger degree than the U.S. Productivity remains a long term challenge- with needed investments in housing, education and infrastructure, improved lending for new business, and higher tech improvement exports....

LyrArc Article Gist
Guardian newspaper reports that this maybe the beginning of a technological cold war between western spy agencies and Beijing. The head of the UK's secret service said in a speech that "we need to have a conversation" about Huawei's involvement in UK's telecom network. Following this BT, Brtiish  Telcom, stated it is removing Huawei's networking kit from its EE mobile network. Huawei has struggled against the suspicion that it is under the influence of the government to tap into telecom systems in other countries. This has resulted in it being banned from selling telecom equipment to the U.S., Australia and New Zealand. The Trump administration put a ban on ZTE for breaking sanctions against Iran. Now the Trump administration is making its case that Huawei also is breaking U.S. sanctions against Iran with the arrest in Canada of founder Ren's daughter Meng, who is the CFO. Ren started out working in IT for the military before setting up Huawei in 1987. ...

LyrArc Article Gist
Pollock's interview with Geroge Shultz, Reagan's senior economic advisor and Secretary of State, at his office in the Hoover Institution, Stanford University. He says the U.S. can find its way out of the current economic crisis the way it did during the early Reagan years. On the Fed's loose monetary policy he says the Bernanke Fed's contribution to the economic crisis was very easy money. Now that we have it we realize that its going to take something different from easy money to get the economy moving- not just more money. Three quarters of the debt issued by the U.S. in the last year was bought by the Fed, and the Fed is monetizing debt when it buys debt because at some time this ends up getting out into the economy. Shultz sees the tax rules as being about more than rates. Corporate tax rates should be lowered by cleaning up preferences. But what is most important is predictability and an environment where business feels there is less uncertainty when investing. Shultz says Romney should read his memo to Reagan before Reagan assumed office, excerpted in the WSJ, "Advice to a New President," May 26, 2012. He also recommends John Taylor's new book- "First Principles: Five Keys to Restoring America's Prosperity." ...

LyrArc Article Gist
The U.S. trade dispute with China takes a new turn after tit for tat tariffs, with the U.S. president Trump claiming that China was interfering in the U.S. midterm elections. This plays into the narrative in China that the U.S. does not want to see China's ascent as a global power. President Trump and Trade Representative Lighthizer have singled out "Made In China 2025," China's plans for tech leadership as a serious issue for the U.S. President Trump made his claim in a speech at the United Nations, saying that he was "the first president ever to challenge China on trade."

Many of China's tariffs on U.S. exports are targeted at agricultural products such as soyabeans and corn in heavily pro-Trump states, and in rural areas where the Republican party has a significant base. 

 

LyrArc Article Gist
Sebarros of the WSJ takes a closer look at the key words used by U.S. president Trump in rallies in city after city during the 2016 election campaign and in the months before the Congressional elections in 2018. Analysis by the WSJ counted the unique two word phrases, how often Trump highlighted topics, the content of audience respones in 48 post election rally speeches through Oct 27.  In 2018 the words "tax cuts,"fake news," and "health care," appeared more often than in 2017 after the Republican party's win in passing a tax cut. Other phrases used frequently were "law enforcement," "North Korea," and "Supreme Court" after the win in nominating Judge Kavanaugh. The use of the 2 word phrases are carefully done. The words "fake news" were not used during sensitive periods such as when pipe bombs were mailed to government offices, yet resumed few weeks later. His own name is the seventh most used word, even for someone such as Mr. Trump, showing that behind the impromptu remarks there is a carefully worded effort to steer voters in a particular direction with carefully developed appeals. Another example is when the Dow Jones averages were reaching new highs in September and October Mr. Trump highlighted the stock market growth, and then when volatility increased by November said much less on this topic. Graphs by Jessica Wang provide a good look at how frequently and in what manner Mr. Trump has continued his unique campaigning style before the 2018 Congressional elections, with two word appeals to already receptive audiences. The audience participation is a singular feature and the words "U.S.A." were used in 85% of the rallies with "Build that Wall" at 65% as the next most frequent.  Much of it is repetitive in city after city and the WSJ analysis shows that the major television networks including Fox News are not covering the speeches from beginning to end as they did before, only C-Span public network does. To receptive audiences in carefully scripted surroundings, including larger ones such as the Toyota Center Houston, where larger numbers of supporters worried about immigration, health care, trade, and other issues can come together, president Trump has rallied core supporters with this kind of appeal. ...

LyrArc Article Gist
John Taylor, a professor of economics at Stanford, points out that the numbers being thrown back and forth in the budget debate can be confusing. He suggests a better way to look at this. The U.S. budget was 20% of GDP in 2007, and has been at or below that level in recent years, before the higher spending to counteract the effects of the 2008 financial crisis. As the economy recovers and private investment increases it makes sense to bring the spending back to levels where it has been- spending levels that do not endanger the country's credit rating and are a prudent way to manage the nation's finances. Taylor asks the question- if the U.S. got by by spending 20% of GDP in 2007, then why is it not possible to do this in future years when the GDP will be higher. In 2000 spending was actually 18.2% of GDP. Taylor says that with higher incomes people will be moving into higher tax brackets which should increase revenues in future years. In three years since 2009 the spending levels are up to 24.4%. Under this scenario private investment would make up for lower government spending and debt, leading to higher employment and GDP as business confidence rises. ...

LyrArc Article Gist
The asymptomatic coronavirus infected people are a large fraction of the people with coronavirus. This is a huge problem as these people unaware of the danger are unwittingly spreading the virus. This is one of the most unusual aspects of this virus compared to other virus epidemics, and why it has become so dangerous. It is also why social distancing alone is not enough. Strict enforcement of stay at home orders by public health authorites, state and federal governments is essential as the unwitting spread by asymptomatic people who are not following the required guidelines is a huge problem.  Even as the public now calls for stricter action the lax behaviours in March in U.S. Britain, France, Germany, and in Italy in February, have created a population of infected people that acts as a backlog for testing, creating a surge in April. One of the novel features of this public health crisis is that lax behaviours stemming from a lack of understanding of the severe contagiousness of the coronavirus is making it a larger crisis on a scale not encountered before.  The contamination potential of this virus is only now being tackled with experts in fluid dynamics at labs such as the MIT Lab in the U.S. looking into how it can contaminate environments, as shown on BBC News.  With pieces of the contamination puzzle only now being put together. Heeding public health expert warnings and guidelines is all the more essential for this reason. ...

LyrArc Article Gist
The total government expenditure of the US including the individual states spending is 37% of US GDP (IMF). Musk $2 trillion cuts is 92% of the 2.17 trillion excluding defense, veterans benefits, interest on debt, Social Security, Medicare. The simple math means he plans to shut down the government. US  37.5%  Germany 48% France 57% UK and Canada 43% Japan 42% This shows that the US that has no universal health insurance and  subsidized public transportation, spends less than the developed OECD countries as a percentage of its GDP. Of the Budget of $6.75 trillion in 2024 Social Security $1.46 trillion   22% Medicare            $874 billion   13% Interest on Debt  $880 billion    13% Trump plans to remove tax on Social Security which would take this from 48% to over 50% meaning half of the Budget is off limits. If defense spending goes up not down then $874 and $325 for Veterans benefits are $1.2 trillion also off limits.  This means cuts of $2 trillion on $2.17 trillion or 92%. Do the simple math and this would shut down the government. ...

LyrArc Article Gist
This Washington Post editorial says Obama and the politicians, both Democrats and Republicans, want something for nothing. The Ryan budget, Obama's health care plan, all require paying for it with higher taxes, but the mention of the word "tax" is the last word any of the politicians will say. These comments come as the U.S. Supreme Court considers the mandate that young Americans and others be forced to pay for health care along with the rest, as required by the health care mandate, with the idea of keeping costs down. The idea of getting something for nothing was also emphasized in an op-ed in the WSJ, March 29, 2012, by Mayor Bloomberg of New York City, where he called for letting the Bush tax cuts expire for all income groups, and an up or down vote in Congress on the Simpson-Bowles deficit reduction plan, as part of a two step plan.

LyrArc Article Gist
 A look up close at US Foreign Trade Representative Katherine Tai, focused on a trade policy that is fair to American workers and workers families. She says "I'm a bicultural kid." One of two children of immigrants in the Biden cabinet, the other Kamala Harris.  With Jake Sullivan and Biden doing everything so that American trade and supply chains are based on pillars of resilience, fairness, respect for American workers and families, to support climate change action and build infrastructure. She has been with the US Office of the Trade Representative and in trade related positions in US Congress since 2007. Tai says what helps is bringing a very disciplined approach, as she deals with the PRC to stay on the message, on what the problem is. As she goes about her work the spirit from her dad carries her everyday- "to go out and win it" for America, for the common people of America. ...