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Jenna Wortham asks the question do tech companies have undue influence in Washington especially when they are pursuing their own ecosystem expansion, citing an example from Facebook app Free Basics. There is another question that comes with the election campaigns of Sanders, Trump and Clinton, and issues of upward mobility. With this issue raised also by Janet Yellen of the U.S. Federal Reserve of the loss of intergenerational mobility in the U.S. at a conference in Oct. 2014. This question is whether the tech world in California can be sensitive to the problems of cities depending on manufacturing in the midwest and the eastern U.S. that are recovering from deep recession, because the environments are so different. Working in the tech world in California is so different from the rest of the country, almost a different way of life. It also has deep political implications, because the priorities are different. Sometimes as with the TPP trade agreement they may conflict- this includes an industry such as the auto industry that also is incorporating technology at an accelerating pace and which has employed many times more people than does the tech industry in California, and in many states. This leads to president Obama's support for the TPP trade agreement, an agreement which analysis by some experts shows is more beneficial to the tech industry in California than to the auto industry in the midwestern states. The NYT's Krugman says overall for the U.S. it is marginally helpful as most of the gains in free trade are already behind us. See Lyrarc using search terms-Trans Pacific Trade Agreement, Trans Pacific Partnership. Yet it remains a mystery why president Obama has made it a part of his legacy, when Hillary Clinton realizing the issues in this election has clearly stated she will not support it. It has other implications as well, as it has given rise to demagogic rhetoric in this election, where other issues far more significant such as the condition of western democracy are at stake. ...

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O'Malley, Sanders, and Clinton emphasize the issue of wages, income disparities, rising inequality, and a shrinking middle class in the first Democratic debate of the U.S. 2016 presidential election. Clinton points out that "at the center of my campaign is how we're going to raise wages." Sanders says that "the middle class of this country for the last 40 years has been disappearing." Clinton points out her opposition to the Trans Pacific Partnership trade agreement because it does not help raise American wages. Clinton calls herself a progressive, but "a progressive who gets things done," and a moderate when it comes to getting things done. Sanders points to the "deep injustice, an economic injustice that threatens to tear our country apart, and it will not solve itself." Sanders points to the wealth concentration in the U.S. "with the top one tenth of 1 percent owning about as much as the bottom 90 percent, and 57% of all new income going to the top 1 percent." Clinton comes to Sanders defense on the issue saying "it's our job to rein in the excesses of capitalism so that it doesn't run amok and doesn't cause the kind of inequities we're seeing in our economic system."...

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An independent parliamentary panel in Japan described the Fukushima nuclear plant disaster as a "profoundly man-made disaster." It was sharply critical of TEPCO, the company running the plant, and the Japanese government's response. The investigation chairman Kiyoshi Kurokawa said in the report: "What must be admitted- very painfully- is that this was a disaster 'Made in Japan,' its fundamental causes are to be found in the ingrained conventions of Japanese culture: our reflexive obedience; our reluctance to question authority; our devotion to 'sticking with the program'; our groupism; and our insularity." This comes as a report by TEPCO shifted public attention to "a tsunami beyond our imagination," creating a large credibility gap with the Japanese people, because the public is skeptical about TEPCO's attention to safety during the period leading to the accident. The parliamentary report calls attention to safety factors that were ignored so that companies would be required to take further steps including costly modifications of plant equipment. A critical flaw was the lack of a independent safety agency that could enforce safety measures that TEPCO might be reluctant to make because of cost considerations. Astonishing as this may sound, the Nuclear and Industrial Safety Agency (NISA) in Japan is part of the same government ministry that promotes nuclear power, creating a sort of "nuclear bloc," which before the accident connected the safety agency to the bloc. Because of this the panel report says, NISA did not require TEPCO to prepare for a full station blackout- the loss of main and backup power- because the "probability was small." Other factors that need to be addressed are the breakdown in communication and cooperation between the people operating the plant and the people responsible for Japan's nuclear safety. The prime minister's office waited too long before declaring a state of emergency. To come up with the conclusions the panel made 1000 intervews and conducted 900 hours of hearings. The questions left behind by the nuclear accident in Japan are whether Japan should continue with the same level of dependence on nuclear power, whether it should shift out of nuclear power on a gradual basis as Germany is doing ironically after the Fukushima accident while Japan is reactivating its nuclear plants to meet energy needs. If Japan continues with a smaller reliance on nuclear power what changes have to take place for an effective safety agency completely outside the "nuclear bloc," and the series of other changes that have to take place in the nuclear power industry's handling of safety. Public opposition continues to focus on this because of distrust of the nuclear power industry after the accident....

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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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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....

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Ajami cites his own memories of Egypt's Gamal Abdul Nasser, who had a way with crowds and rhetoric in the Arab world, as giving him an insight into the way Barack Obama found his way into the American imagination as a popular leader in 2008. He points out that the coalition of black people who put their faith in him as one of their own, of white educated professionals who liked his cool image, of Hispanics who had hope for better immigration policies, and working class Americans who set aside reservations of elitism to give their support, was put together on the basis of hope and charisma and the uncanny ability of Obama to let himself be seen as all things to all people. Because of the way it was put together it was bound to come apart, particularly for a candidate without enough experience, says Ajami. The aloofness of the president, reliance on Congressional leaders Reid and Pelosi, and relying on a very small circle of advisors whose eyes were focussed on reelection, made this more so. He cites as one example, the controversial decision on Syria's chemical weapons made on a walk with chief of staff Dennis McDonough. Ajami gives a picture of how Obama may be seen from the outside, especially in the Arab and Muslim world- from Turkey and Egypt to Saudi Arabia- a sense of illusions. A European and particularly a German perspective also may have similiar sense of illusions about having gone for the ride and believing the image put out by image handlers. The lack of sensitivity to German sentiments about the tapping of chancellor Merkel's mobile phone- herself a former East German resident of the Soviet backed GDR- bringing this out. A similiar sense seems to have taken hold in Brazil, after Brazilian president Rousseff cancelled a trip because of lack of sensitivity to the tapping of her phone, as she is a survivor of brutal dictatorships in Brazil. This is ironically a full circle, as happens in these situations of euphoria encouraged by politicians inevitably followed by disillusionment, because Turkey, Germany and Brazil were some of the countries where enthusiasm for the new president was highest. More so because president Lula of Brazil, Merkel of Germany,and Erdogan of Turkey were leaders Obama seemed to relate to the most. This acts as a cautionary note for the future....

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The Bank of Cyprus and the Cyprus Popular Bank (Laiki Bank), passed stress tests given by the EU in 2010 and 2011. By the end of 2010- even as other banks such as Barclays were cutting their Greece government bonds by over 50%- the two banks held 5.8 billion euros of Greece bonds, over $1 billion euros larger exposure to Greece than nine months earlier, according to European regulators. Regulatory supervision failed to alert the banks and the banks risk management failed to see the warning signs in Greece. The Laiki Bank Risk Officer went in the opposite direction actually increasing exposure to Greece, saying in a conference call in August 2010, that he had used the bank's capital position "to deepen selectively some highly profitable client relationships." What went wrong with the stress tests by the EU regulators in July 2010 of these two banks, was that the tests looked at what would happen if economic conditions deteriorated, but did not consider the possibility that government bonds could produce losses. The two banks suffered total booked losses of 4.3 billion euros in 2013 from holdings of Greece bonds. The EU stress tests of July 2010 showed the two banks having total of 572 million in surplus capital. The two banks then went on to issue dividends in 2010-2011 totalling 141 million euros. By March 2013 the Laiki Bank was "on respirator" for a few months, according to the Central Bank of Cyprus, until the 10 billion euro EU bailout in March 2013 with the closing of Laiki Bank and the sharp downsizing of Bank of Cyprus....

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Germany's calls for closer political and fiscal union for the eurozone countries to complement and support the euro currency arrangement. German chancellor Merkel calls it "more Europe," "step by step." It all hinges on French president Hollande and how well the Socialist party does in the elections to the National Assembly on June 10 and June 17, 2012. If he does well and gets a working majority with other like minded parties he will not need the support of parties that are opposed to giving up sovereignty. Hollande's mentor is Jacques Delors, a former president of the European Commission and a strong supporter of the idea of European Union. England under the Conservatives remains Euro-skeptic. France and Germany were driven closer by the idea of European Union by necessity, because of history and three wars. The European Union had strong support after 1945 from French and German leaders, Monnet and Adenauer, who struggled with political opposition but won over skeptics, with the process continued by German chancellor Kohl, a mentor of Angela Merkel....

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Krugman reflects on the discontent in Europe reflected in anti-EU opinion at the time of the elections to the European parliament in 2014.

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Amar Bhide touches on the unpredictable consequences of devaluations while commenting on the supposed benefit of a country having its own currency vs a currency such as the euro. The euro takes away the advatantage of devaluing the national currency as a way to regain competitiveness. Bhide points out that devaluations hurt the elderly on fixed incomes and low wage workers. Protections have to be put in place for the sections of the population that are badly affected. Large union negotiated wage increases can also reduce the benefits of devaluation in terms of regaining competitiveness.

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The benchmark price of U.S. crude oil dropped to $31.41 a barrel on January 11, 2016, as oil prices continued to drop sharply following a slowdown in China, appreciation in the U.S. dollar and no cuts in production from Saudi Arabia. Analysts expect a crisis for energy producers that is deeper than ones in 1986, and five plunges in oil price all the way back to 1970. With the oil prices at $30 and expected to drop below $30, the companies that took on a lot of debt have no choice but to keep up production. In the process many may find themselves in bankruptcy. Private equity with capital of $100 billion is likely to come in at this point to buy cheap assets without the debt, say analysts. U.S. banks energy portfolios are small, with Wells Fargo energy exposure only 2% for oil and gas loans in the third quarter of 2015, or about $17 billion. Loans that are rated "sub-standard. doubtful or loss," are projected at 15% of loans to energy producers, about $34.2 billion, in a biannaual review by banking regulators. The unusual aspect of this energy price slump is that production is not declining with falling prices- oil production in the U.S. was estimated by the government at 9.2 million barrels a day in Jan 2016- 1% higher than at the beginning of 2015 when prices were over $40 a barrel....

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Systemic risks from "too big to fail" and the pushback on capital reserve requirements that leave banks with lower reserves. Ewing describes the role of the president of the Swiss Central Bank, Mr Hildebrand, in setting rules for higher capital reserves for Swiss banks than that of other countries and the pushback from the banks resisting the new regulations. "He will never find another job in Switzerland," a Swiss newspaper Der Sonntag quoted one banker saying this about Mr. Hildebrand. Losses at Swiss bank UBS during the financial crisis and the $2 billion loss at a UBS trading desk in 2011 have created a new awareness of systemic risk at banks. During the financial crisis banks used an optimistic estimate of "risk weighted assets" which led to insufficient capital reserves in a crisis even as the banks were shown to be well capitalized. A sense that banks in Europe and the U.S. will continue to have insufficient capital reserves at 3-4% of assets under new rules and with the longer phase in times for the new Basel III regulations of reserves at 7% of assets to after 2016....

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Moritz Kramer, a managing director at S&P, says Spain, Italy, France and Portugal cannot depend on austerity measures and cuts in spending alone to resolve the eurozone crisis. This is only one aspect of the problem facing the countries in southern Europe. The major reason for the problem is the lack of competitiveness in their economies. Nobel winner Stiglitz also points this out and adds that its important to note that the human and natural resources of Europe are the same and the potential just as good today as before the eurozone financial crisis. He says southern Europe has failed to utilize its human and capital resources and improve its technologies in ways that would make it more competitive with Asian countries. Experts point to the decade it took Germany to address problems created by inflexible labor markets, wage competitiveness, and investments in technology and human resources to get to where it is today.

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The lack of economic opportunities for an increasingly urbanized African younger generation is a major challenge. The median age of 19 makes Africa the world's youngest continent. Megacities are growing up in places such as Lagos and Kinshasha as millions leave subsistence farming to go to cities. Unlike Asia and Latin American countries men and women are coming to shantytowns in cities at a time when Africa is much poorer for a similar level of urbanization that Asian and Latin American nations reached decades earlier. In 1993 this WSJ analysis and graphs show the Asian emerging economies and sub Saharan Africa had similar GDP per capita of $2415, by 2019 this was $4000 for Africa and $12,000 for Asian emerging economies. Latin America was at $10,000 in 1993 and in 2019 was at about $15,000. The gap widened considerably between Asia and African countries. Asian emerging economies increased GDP to 5 time from the same starting point as Africa in 1993, Africa doubled GDP over the period of 25 years to 2019. Latin America started from a much higher point and increased GDP by only 50% over 25 years. Asian economies that performed better over this period did better because of stable even entrenched governments such as in Singapore with Le Kuan Yew and in China with stable successive governments under CPC leadership of prime minister Deng. The difference in Asia was a commitment across all classes and groups to development, a sense of development as a way to make up for the years lost under colonialism of foreign powers in the eighteenth and nineteenth centuries. A sense of correcting historical injustice and wrongs. This is a missing ingredient in the processes unfolding in Latin America and Africa in the last 25 years. ...

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WIth India's oil imports at four fifths of the country's oil needs, the depreciation of the Indian currency, the rupee, is especially painful. The rupee exchange rate has declined from 55 per dollar at the end of May 2013 to 64 per dollar in August 2013, a 14% decline. India provides full subsidies and this accounts for a large part of the current account deficit. Government cuts in fuel subsidies to reduce the current account deficit are diluted by the depreciation of the rupee, with a fall of one rupee in the exchange rate equal to 4 months of cuts in subsidies, according to Moody's analyst Vikas Halan.

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EpiPen's price has jumped 550% over 8 years. Mylan Pharmaceuticals is dominant in the $1 billion market for treating serious allergic reactions. Mylan acquired reights to sell EPiPen in late 2007. A pack of two list price is now $608.61. Last Nov. Sanofi's competing product Auvi-Q was recalled giving Mylan price dominance. A problem for consumers is that EpiPen expires in one year. Mylan launched a campaign to make parents aware of the product for children with peanut and other allergies, and also lobbied the governments to make ready supply of EpiPens available in schools and other public places. Now the controversy over price increases, with Hillary Clinton citing this as an example of exorbitant pharmaceutical pricing, is likely to change the environment around EpiPen and other overpriced drugs or healthcare products.

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A Sept 2012 Census Bureau report shows the median income of a typical U.S. family declined or was flat in almost all states in 2011. Median household income declined in Nevada by 6%, in California by 3.8%. In Arizona and Florida incomes declined by 2.9%. For the U.S. median income declined by 1.3% to $50,502 in 2011. Poverty continues to increase, with California showing 335,760 people falling into annual income levels below $23,021 for a family of four in 2011, giving the state a 16.6% poverty rate.

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David Stockman was Budget Director under President Reagan and known for his prodigous grasp of statistics in the national budget. Here he takes on what he describes as disproportionately large and destructive banking system for the U.S. economy, which he says the nation desperately needs less of. He supports the small tax of 0.15% of the debts other than deposits of financial conglomerates. His words are some of the strongest yet to come from one of the most prominent people on Reagan's economic team about how the nation's banking system has beome unproductive in supporting economic activity which is its reason for existence. The destructive effects on social cohesion and the middle class is emphasized. He says for years the Fed has run an insanely loose monetary policy that has encouraged this behaviour and socially detrimental profit seeking by the banks and other companies. He sees the big banks as dangerous institutions in today's economy engaged in a bull market culture which believes in entitlement and profitseeking behaviours regardless of its detrimental nature for the national economy. The recent profits of the banks in 2009 and the resulting bonuses are a result of the Fed's easy money policy and bank's gambling at the Fed's monetary casino as he puts it, with money obtained at little cost from Fed-controlled money markets. This article helps to eliminate the distorted perspective in today's climate that paints criticism of splitting up the banks, or otherwise restricting banks in engaging in proprietary trading and risky behaviours, as government interference. As Stockman puts it these banks are already in some sense wards of the state and not private enterprises and this issue is not relevant. The question now is how to set things right and this involves possible solutions such splitting up banks that are too big to fail, restricting risky behaviours and preventing proprietary trading, and other actions as unusual steps for unusual times to get things working back to normal. In other times Stockman would not have said this in an op-ed piece if this were not so....

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Harold Meyerson poses some difficult questions for those who like Mitt Romney say America's choice is between the merit based society Romney sees and the "European social democratic vision." In Romney's words- "a merit-based opportunity society- an American-style society- where people earn their rewards based on their education, their work, their willingness to take risks and their dreams." Meyerson cites several studies to show that European societies today are more dynamic on several measures of performance than America's. In intergenerational mobility he cites a Brookings Institution study by Julia Isaacs, that shows incomes are three times more likely to remain the same in America compared to Denmark, Norway and Finland, and one and a half times more frequently than in Germany. Another measure evident from Germany's experience is the degree of union-company-government cooperation to worker retraining, corporate boards that have representatives of workers and management, the "kurzarbeit" program of retaining employees to smooth out impact of cyclical swings in the economy on workers and companies, and worker's willingness to show restraint on wages especially because management wages are not way out of line as in America. Meyerson reminds readers that the U.S. had a more merit based society in terms of upward intergenerational mobility, distribution of rewards of work between workers in manufacturing and service sectors and management, educational mobility with the G.I. bill, in the first 30 years after the Second World War. In a separate article in the Washington Post on Jan. 5, 2012, David Ignatius poses questions about the effects of globalization in shrivelling the middle class. The access to lower wage manufacturing in China, India, Mexico, and other countries, and lowering of wages in the U.S. to be competitive, was part of globalization. The two tier wage structure in the U.S. automobile industry is one example, making middle class wages a thing of the past. Globalization opened up new markets for American companies. Yet many of the gains in employment were made in emerging markets, as the example of GM's expansion in China showed, with automobile manufacturing expansion inside China....