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The Obama administration denied approval for the TransCanada Keystone pipeline. President Obama made it clear that the decision was made because of the "arbitrary" February approval deadline imposed by Republicans in Congress, and said this "is not a judgement on the merits of the pipeline." The administration suggested that TransCanada reapply. TransCanada CEO Russ Girling says the company is "fully committed to the construction of Keystone XL, and that it "will reapply for a presidential permit and expect a new application would be processed in an expedited manner to allow for an in-service date of late 2014." Experts say the U.S. could reuse some of the studies and analyses and that the process would take 18-24 months. Alberta's premier, Alison Redford, says she believes the project will get approved.

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Thomas Sargent of New York University, the 2012 Nobel prize winner in economics, says the EU leaders can learn from the way the federal government in the U.S. handled the issue of state's debt when it came up in the 1790's and in 1840. In 1790 the federal government- under the leadership of Washington and Hamilton- saw the need to honor state's debt because of the contribution made by states in the war of independence and the U.S. assumed state's debt. In 1840 the U.S. refused to assume state's debt and states went into default. The result was beneficial because state's passed balanced budget rules and restrained reckless spending. Another benefit was that this preserved state rights to manage their finances and the federal structure setup under the constitution.

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Tax cuts initiated by the Bush administration and to a smaller degree by the Obama administration account for $6.3 trillon of the $10 trillion deficit in 2011. This is about half the $12.7 trillion gap between the $2.3 trillion surplus predicted by the CBO a decade ago for the year 2011 and the current deficit of $10.4 trillon. Two wars and higher defense spending add another $2 trillion. The Stimulus added $700 billon. The Prescription Drug Benefit for seniors $272 billion. This is based on new analysis of CBO data by the Pew Fiscal Analysis Initiative. The record shows unrestrained spending by both parties has led to the current mess. Pete Domenici who chaired the Senate Budget Committee at the time of the first tax cuts in 2001 says "in the end the floodgates were opened." This also shows how quickly the situation can change if sound fiscal practices are abandoned. Two wars were financed entirely with borrowed money for the first time in U.S. history.

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Joe Nocera visits two plants built by Gray Construction in N. Carolina. One is a Siemens plant in Charlotte, N.C., and the other is a Caterpillar plant in Winston-Salem. Both towns have community colleges that stress manufacturing skills. Forsyth Tech created a program working with Caterpillar to train its graduates in machining skills needed at the plant. The Caterpillar plant is huge at 850,000 square feet, and makes axles for mining trucks. The Siemens plant will make 280 ton gas turbines. Siemen's manager Richard Voorberg, tells Nocera the labor cost difference is not that much of a factor in highly skilled work, with shipping costs, and other efficiencies being more significant. Gray's backlog of 22 projects suggests a similiar conclusion. The problem is that the number of skilled workers needed in an highly automated plant with complex robotics is small. Caterpillar's plant will need about 500 workers, and the Siemens plant will need about 800 workers. This makes only a small dent in the enormous job losses of the last decade. And in N. Carolina the jobs lost in the furniture industry as the industry moved to China. Dow Chemical CEO, Andrew Liveris, points to the jobs created in the supply chain for every manufacturing job. And Ford Motor Company CEO, Mullaly, points to the innovation required in state of the art manufacturing, that creates sustainable advantage. The process of creating enough manufacturing jobs will take a long time, including shifts to new technologies and new products....

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Applebaum describes how Obama as president took action on the stimulus after the 2008 financial crisis, but did not take the necessary action to stem foreclosures and aid a recovery in housing. This now appears to be one of the critical failures of his presidency.

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A leader of the Syrian moderate democratic opposition to the Assad regime calls for help from the Obama administration for the moderates and Free Syrian Army. The request for Manpads to counteract Assad's air attacks and the deteriorating situation around the city of Aleppo and in Northern Syrian areas controlled by the Free Syrian Army. The collaboration between the Hezbollah, Assad's forces, and the ISIS as each attempt to increase the areas under their control pushing out the Free Syrian Army and moderate forces fighting the Assad regime. Hillary Clinton comes out against the Obama administration's policies in August 2014, saying "don't do stupid stuff" basis of Obama policies is not the basis for a sound foreign policy. Obama comes out with a $500 million aid plan for the Free Syrian Army but the approach is vacillating and slow, leading to a rapidly deteriorating situation, and a complete breakdown of what was a period of hope called the Arab Spring.

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Adly Mansour, Chief Justice of Egypt's Supreme Constitutional Court is sworn in as interim president in July 2013, after the ouster of president Morsi.

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President Obama's nationally televised speech on Sept. 10, 2013 about the need to keep the military option for strikes in Syria alive, and an acknowledgement of the war weariness of the U.S. after two wars in the Middle East and South Asia.

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The new iPad coming out in March 2012 will be priced at $499, with the prior version being priced now at $399. Tim Cook, Apple's CEO, says the iPad sales in the 4th quarter of 2011 surpassed sales of PC's by any individual manufacturer. To give some idea of the impact Apple's sales of $9.5 billion for iPads in the 4th quarter were twice the sales revenue made by Microsoft for Windows software and close to the total revenue of Google during the quarter. This third generation iPad looks like the previous one. It has an A5X quad-core chip for faster processing and a higher resolution screen with 2,048 by 1,536 pixels. The new iPad also works on the new cellphone network technology called LTE. It works on AT&T and Verizon's networks. Users can dictate e-mail on this device.

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In an effort to calm unsettled global financial markets ECB president Mario Draghi said in a speech on July 26, 2012: "Within our mandate, the ECB is willing to do whatever it takes to preserve the euro and, believe me, it will be enough." Yields on Spain's government bonds reached 7.5% as investors shunned Spanish bonds fearing the need for a government bailout.

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The publisher of the Wall Street Journal, Dow Jones & Co., is working to overturn a court injunction that prevents the public from seeing the Medicare billing records of individual doctors. Dow Jones & Co., filed court papers in January 2011, to overturn the court injunction. The American Medical Association has fought to keep secret the amounts of money individual doctors get paid by Medicare. The AMA filed a lawsuit against the government to keep secret these Medicare records, on the grounds of privacy rights, and won a court ruling in 1979. This court ruling still stands. The position of Dow Jones in its efforts to change this situation, is that giving the public access to the records is essential to the monitoring of so large a public expense as Medicare. These records would then be available to state medical boards, nonprofit organizations, universities and newspapers who can act as watchdogs over the $500 billion Medicare program. Such transparency and monitoring is an essential feature for the proper functioning of such programs and to prevent misuse of public money. For a program like Medicare, fraud and waste has enormous implications, as it adds to the spiralling cost of healthcare and to the unsustainable budget deficits. In one of the largest cases so far, the FBI, Justice Department, 700 state, federal and local agents, worked together to charge 114 defendents nationwide with Medicare fraud in February 2011. A senior law enforcemet official says Medicare fraud is so rampant, "there's no way in hell you can prosecute your way out of this problem, no way." He says the the answer is more effective monitoring of the money that goes out. And a key part of that is transparency and public access to how the money in Medicare is spent, what individual doctors and healthcare providers are getting paid by Medicare. The lack of this transparency for a program the size of Medicare can only lead to a lack of monitoring as the Dow Jones suit asserts, and make it difficult for the government to check abuses in the way money goes out. At a time when teachers and public workers and seniors are expected to make their share of the sacrifices to fix the budget deficits, it is incomprehensible that money should then be allowed to go out of the Medicare system through fraud and waste, because of a lack of transparency....

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Krugman questions Bair's idea of the aggregator bank buying up toxic assets of the banks because the government may be assuming these huge liabilities at taxpayer expense to shore up shareholders. He questions whether these banks will not continue to be the zombie banks, that they are today, if the so called toxic asets are priced in today's market. The idea that today's market prevents these assets being priced at fair value may be deceiving he says. As the economy deteriorates, these banks even after the government at great expense buys up "toxic" assets, may still be losing money and remain that way for years, essentially zombie banks. Better he says for the government to face up to reality and nationalize these banks and then do what the Resolution Trust Corporation did with the savings and loans in the 1980's, which is clean up these banks and sell them after fixing them to new owners. The government might end up with amuddle headed approach that looks like the Resolution Trust type of action but without taking over the banks end up with something else. All because nationalization is thought of among Republicans, Democrats and Obama's people as some kind of dreaded word, when these banks are already dependent on the government for survival....

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Voter sentiment changes in Italy for the Democratic party led by prime minister Letta, only a few months after the national elections. Under Letta who belongs to a younger generation of Italian leaders, the Democratic party which supports being in the EU and pro-growth policies, has staged a comeback in Italian mayoral elections for 67 cities. The party of Mr. Berlusconi lost ground, and the party of newcomer Beppe Grillo also lost ground. Voter turnout was 48.5%, after years of failed politics of the national parties in Italy. This is new reason for optimism for the future of Italy.

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This NYT editorial provides statistics for the problems of young people facing high student debt, high unemployment, and working in jobs that do not require their educational qualifications. Federal Reserve data show 44% of young college graduates in 2012 working at jobs that did not require a college degree. Underemployment stands at 16.8% in the U.S.- this includes young people too discouraged to look for work and those stuck in part time jobs. Put another way the hope that existed in the 1970's for a better future is simply lacking. The boom, bust, and corrective policy preceding and following the 2000 and 2008 crises have acted as a huge distraction for needed policy steps and imposed additional penalties on young people, just as other trends in the globalized manufacturing and IT industry were shifting jobs overseas.

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With the introduction of the iPhone 4S, Apple announced the iPhone 3GS will be offered free, and the iPhone 4 for $99. This puts Apple iPhones priced to compete with smartphones in the middle and lower price ranges in the market. The free iPhone is a model first introduced in 2009. As the expansion of the smartphone market is now ocurring at the low and mid price ranges, companies making smartphones using Google's Android software and Blackberry's RIM are targeting this market. In the U.S., as of the end of July 2011, 82 million Americans owned smartphones, increasing 10% from the prior quarter, according to comScore. 42% of U.S. smartphone users use Android phones, only 27% use Apple phones, as of the end of July 2011, because of the price difference. In India Apple iPhones have barely made a dent because of large price differences. Rapid growth expected in emerging markets will also make this low end of the smartphone market attractive for Apple.

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Greenspan testifes before the House Oversight Committee headed by Congressman Henry Waxman (D., California). Congressmen read back quotations from Greenspan where he talked about the resilience and efficiency of American free markets and defended derivatives and complex financial instruments. Some referred to the comments he made saying that housing markets would not collapse and the worst may well be over. Almost by 10 to 1 the readers responding to a WSJ poll say Greenspan was responsible for easy money for most of the decade and his lack of the most elementary safeguards for the economy instead defending derivatives and complex financial instruments, and considering the bubble in house prices as not the Fed's concern. Many used expletives deleted or the words "clowns" or "illiterates" for Greenspan and associates at Treasury. A congresswoman from Minnesota asked pointed questions about state effforts to stop predatory lending that were nixed by the federal authorites under Greenspan and Treasury's watch. She thensuggested that they the stewards of the economy try pragmatism and commonsense for policy decisions. Describing the present crisis he seemed so out of touch that when asked about rising foreclosures and need to stabilize home prices, he still was trapped in his libertarian ideology and impulses. He said transfer payments should be tried instead as modifying the mortgages would not be good in the long run when markets return to normal. He said this crisis has still some months to go. In these observations he showed that he has still not grasped the full extent of the crisis, as a realistic assessment of the economy suggests that the economic downturn has not really hit in terms of unemployment and drops in consumption, which will hit in 2009 and 2010 and years beyond. He looked old and worn out showing every bit of his 81 years, which begs the question how could he have been chairman for 17 years till he was nearly 80, as he was still Fed chairman just 2 years ago. There are term limits for mayors, and for President, how is it that there are no term limits for Fed chairman? Should'nt the Clinton administration or the Bush administration have made a new appointment to get fresh blood, fresh thinking, just as corporations do. Wells Fargo chairman Kovacevich is supposed to retire, even though he has good skills for accomplishing the merger of Wachovia having done this for Norwest. Bloomberg is fighting the term limits to stay on for another term and will need a special vote. Doesn't senility hit the best of us, and isn't there an age when people should have to retire from these positions, long before they get close to 80. An assessment of Greenspan watching him over the years would show that he loved data and data analysis, and trusted data as almost carrying infallible weight. As most of the data he looked at was for the postwar expansion of the USA economy, he saw as he himself testified this week data that showed the economy with small setbacks to be sure but on a constant upward trend. The way down he said in response to a question the data looks completely different, with fear and lack of trust and other things making this pattern have no relationship whatsoever with the way up. Greenspan and the nation's misfortune maybe that for too long the country's political leaders trusted over two decades a man who did not have the healthy skepticism of data even when it appeared to reflect certainty, and did not have the healthy impulses for safety and safeguards that surpass all ideological thinking, and a respect for basic ethics and common sense that goes beyond everything and puts it above everything else. This is a misfortune because these are qualities required for good leadership especially leadership entrusted with such huge responsibilities which can never be taken lightly. ...

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Ghannouchi of Tunisia's Ennahada Party puts forward ideas for a pathway that Islamists could follow to integrate into the political life of Middle Eastern countries- compromise, working together with non-Islamist parties for the common good, focussing on economic development, pursuing moderate Islamist ideas, bringing in those excluded from the political process thorough a new inclusiveness, and respecting the opposition. He sees the successful election in Tunisia in which Ennahada worked with the opposition parties to ensure a smooth transition, as a model for other countries and the Arab neighborhood. In 2014 another process of smooth transition after elections, and respect for the opposition, happened in Indonesia with the election of Jakarta governor Widodo to be the new president. This set another model of respect for democracy, fair elections, respect for the opposition, focus on economic development and inclusiveness, for Muslim countries in another part of the world. Pakistan is another Muslim country which is working to create a model in the presence of much violence from Pakistan Taliban, and interventions by the military in politics. Assistance from the U.S. helped Iraq make the transition under the Bush administration till it unraveled with the policies of the Obama administration. Libya had the potential to make the transition with continued western cooperation and support- a change in administrations in the U.S. and France resulted in policies not supportive of a stable transition. The whole process now needs to be fostered carefully by western liberal democracies. Here Ennahada's Ghannouchi tells the world about the lessons learned by Islamist parties themselves for pathways to embrace for more inclusive societies focussed on economic development and progress....

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China's premier, Wen Jiabao, opened the National People's Congress, annual meeting of the Chinese parliament, by saying that China had lowered its growth rate to 7.5% from 8%. GDP growth for 2011 was 9.2%. Wen set an inflation target of 4%. The CPI index increased by 5.4% in 2011. Wen set 14% growth target for M2, China's broadest measure of money supply.