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Japanese prime minister, Yoshihiko Noda, of the Democratic Party of Japan, is pressing forward with a plan to increase Japan's 5% consumption tax to 10% by 2015. Noda told reporters in Tokyo: "There is no waiting in responding to this question" of how to strengthen the social security system. Adding that Japan is "faced with an aging society and a declining birthrate unprecedented in the history of humankind and we cannot sidestep the challenge." In theory the Liberal Democratic party supports this, but in reality the LDP sees a chance to force a new election. Japan has a lower consumption tax rate compared to other OECD countries. It was last increased in 1997. Polls show both parties are deeply unpopular- the LDP has 17% support from voters, the DPJ has 16%, and over 50% support no party. An increase in the consumption tax comes with its own risks for the Japanese economy, as Japanese exporters have been hit hard by the yen's rapid rise in the last year. At 76-77 yen to the dollar Japanese automakers find making compact cars in Japan unprofitable. A chip maker Elpida recently filed for bankruptcy, with its CEO saying he never imagined the yen at this level. Another difficulty maybe the size of the increase in the consumption tax, effectively doubling it at a time when European markets for Japanese exports are showing a marked slowdown....

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European Central Bank president, Mario Draghi, addressing the European Parliament in Brussels on April 25, 2012, supported both sides in the issues facing the eurozone, calling for continued vigilance on structural reforms to improve competitiveness of countries in the eurozone such as Spain and Italy, and at the same time saying it was imperative to generate economic growth. He told the European parliament: "The uncertainty about the present situation is very, very, high... Any exit strategy is premature given the current economic situation." Saying that the fiscal compact had been negotiated recently to control spending, yet what Europe needed was also a growth compact- "but my most present thought right now is to have a growth compact." He emphasized that it was now upto governments and banks to pick up the ball. The ECB's achievement was buying time with its 3 year loans to banks in Spain and Italy and other EU countries in Dec. 2011-March 2012, which he described as no ordinary achievement. Francois Hollande and Angela Merkel seized on Draghi's comments to show they were doing the right thing. Merkel conceded that growth was needed, saying sustainable initatives would be good for Europe, that what Germany was opposing was simply stimulus spending that would increase debt without the structural reforms to improve competitiveness. Hollande for his part said he would call for eurozone bonds to pay for industrial and infrastructure projects, and a financial transactions tax....

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The increasing likelihood that Greece will exit the eurozone. This happens as the New Democracy party fails to form a coalition and the other parties are offered a chance to form a coalition. The other opposition parties gained far more votes than New Democracy and Pasok in the elections and some parties favor Greece exiting the eurozone. New elections will be held in June if no government is formed. The current government of Lucas Papademos says it needs an extra year to complete the privatizations, public sector layoffs and improvements in tax collection, giving Greece till 2015 to get the job done. As a senior advisor to Papademos, George Pagoulatos, put it: "There is a sense that Greece has passed its pain threshold... Greece needs some oxygen to breathe." Both the Ifo Institute's Sinn and John Taylor see the exit from the eurozone as the best option for Greece, as interest rates on Greek debt have been reduced and Greek banks recapitalized with the March 2012 bailout. John Taylor, WSJ, Feb. 22, 2012, A Better Grecian Bailout/ WSJ, Feb. 17, 2012, Interview: Ifo's Sinn: In Greece's Interest to Leave the Eurozone.This may already be the preparation the IMF, ECB, EU, and the Greece government has laid out as an option if the voters in Greece overwhelmingly rejected further austerity. This now appears to have happened and far more quickly than politicians in Athens, Brussels and Berlin had anticipated....

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Mario Draghi, president of the European Central Bank appears before the Economic and Monetary Affairs Committee of the European Parliament. He said the ECB had resumed normal lending to Greece's four major banks after the 18 billion euro recapitalization of the Greek banks by the government of Greece using bailout funds assigned for this purpose. Draghi tod the parliament: "The ECB will continue lending to solvent banks. We will avoid bank runs on solvent banks." At the same time he asked the EU to setup a deposit insurance fund for European banks and regulation of banks at the European level. On the actions taken by European leaders Draghi had strong criticism for the slow response always one step behind action needed and a day late, saying: "The next step is for our leaders to clarify what is the vision for a certain number of years from now. The sooner this has been specified the better. Dispel this fog." He described the configuration for the eurozone of the last ten years as unsustainable unless steps are taken, with leaders having to decide quickly what kind of eurozone they want to see. On Bankia's recapitalization by the Spanish government, Draghi said everybody winds up doing the right thing after many delays at the highest possible cost and price. It showed the need for centralization of supervision at the Europe wide level because Spain took too long to tackle the bad real estate loans at Bankia....

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Italy's prime minister, Mario Monti, in an interview with Britain's Guardian newspaper, June 22, 2012, says the detailed blueprint for action will not come out of the meetings in Rome of European leaders at the end of June. But he added: "there will be some strong elements and a short road, I hope, short, a few months, to get from there to the overall project." Separately Christine Lagarde, head of the IMF, said after meeting European financial leaders in Luxembourg: "A determined and forceful move towards complete European monetary union should be reaffirmed in order to restore faith. At the moment, the viability of the European monetary system is questioned." Monti is a former senior EU official, and Christine Lagarde was France's finance minister under president Sarkozy. The difference now compared to meetings in 2010, is the changes in France, Italy, and Spain, and at the IMF, with new leaders Hollande in France, Monti in Italy, and Rajoy in Spain, and Lagarde at the IMF, and a new context in that the austerity policies by themselves are seen as failing to produce the desired results. A further change in the dynamic is the win by Social Democrats in regional elections in Germany and Hollande opening a dialogue with the German Social Democrats. The dialogue with Merkel has been enhanced by appointing seasoned EU officials in key positions in the Hollande administration in anticipation of a tighter fiscal union in the EU....

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Unemployment in the U.S. will be hard to bring down with the mismatch in skills for new jobs created. The National Skills Coalition, which works to promote job training, says in a report that 46% of the jobs in New York state in 2009 were in the middle skills category, and only 39% of New York workers had the skills for these jobs. Mid-skilled workers are workers with a high school diploma and training, an associates degree or vocational training. The problem is that students from public schools and community colleges who are not prepared with mid-skills and training, or lack a two year degree, are not prepared for these mid-skilled jobs in health care, transportation and other fields. This report says 40% of new jobs created in New York state will be for mid-skilled workers. In the low skilled workers category there is downward pressure on wages because there are more workers than jobs- 21% of new jobs are low-skilled and 23% of New York workers are low-skilled, according to the report. The problem is serious because funding for training programs has been cut over the years, and at the same time government policy- including that of the Obama administration- has focussed on getting people to college. Less attention has gone to training programs and vocational education. This at a time when a college education has become costly and difficult for families....

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Matt Bai's interview with Mario Cuomo, former governor of New York. The conversation covers different topics: Mario Cuomo's speeches, the affinity and the dissonance with his son Andrew Cuomo's idea of liberalism and his own, about the kind of triangulation practiced by Clinton and Obama, and his sense of being a liberal in the old fashioned way. The talk goes to a speech Mario made about helping the poor without crushing the middle class and the sense today that the task ahead is about helping the middle class without crushing the poor. Mario mentions a conversation with Bill Clinton about an offer to join the Supreme Court. Mario said he told Clinton he would not be able to debate and talk freely about his views if he accepted that position. Considering Mario Cuomo's speeches this is sincere. He is torn between the struggles experienced by his father and others of the most ordinary working men and women of the period between the wars, the idea that there had to be a better way, and the difficulties of making that better way work in the real world in the postwar period. There is a sense that one has been forgotten or is now out of place- the dissonance with the times- when a serious contribution was made at one time and place that will always be there. One generation taking over from the last, adapting in its own way, the values timeless....

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Joe Nocera of the NYT, says prosecution of individuals responsible in the 2008 mortgage financial crisis is mostly a joke. Not one official of Countrywide Financial, says Nocera, that was at the heart of the financial wrongdoing in the crisis has been prosecuted. This may be one of the strangest aspects of this crisis and the behaviour of the Obama administration, the Justice Department and the regulatory agencies including the SEC remains dubious at best, when it comes to how little can be seen in this area that Nocera points out. By contrast says Nocera, about 1100 prosecutions were done in the S&L crisis and Charles Keating, a key figure in the crisis was prosecuted. When he inquired why the government was so intent on prosecuting figures involved in the S&L crisis, Nocera was told it was because the country insisted that this happen. This is because without this the deterrent effect no longer has an effect in preventing future behaviour of this type. Now he points out this is what the country is insisting happen. Regulatory actions alone may not create enough of a deterrent to protect the ordinary people who were worst hit in the crisis from another crisis. The exacerbated social tensions emerging from the crisis have created a large fragile part of the population with minimal savings that can hardly afford future hits of this type....

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A Joint Editorial by U.S. president Barack Obama and India's prime minister Narendra Modi in the Washington Post on September 30, 2014. Strobe Talbot, a former deputy Secretary of State says he does not remember a situation in which this type of joint editorial was put out by two heads of government. Speaking on Indian television "Times Now" with Arnab Goswami, Talbot says this is a result of intense advance preparation on both sides that he is personally aware of from his contacts in the two governments. The editorial says the two countries are "natural allies" using the words of former BJP Indian prime minister Vajpayee. It emphasizes the fact recognized by both sides that the true potential of the relationship has not been realized. It sees the election of a new government in India (with a decisive mandate) as a natural opportunity to move the relationship in line with India's rapid development agenda, and the U.S. own need to generate economic growth. Specifically Modi and Obama plan to discuss building up Indian manufacturing, and expanding affordable renewable energy including nuclear. The "Clean India" program is received with particular enthusiasm and an area of collaboration for improving sanitation and hygiene throughout the country. The relationship is viewed as bigger than projects and investment, in that it can add to helping build a more peaceful future for the global community- with the two countries tradition of interest in peaceful development that benefits all nations....

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Former Defense Secretary Leon Panetta's "Worthy Fights" provides a better perspective on the Syria-Iraq conflict- about a conflict in Syria that was the result of president Obama not acting when a "red line" of the use of chemical weapons was crossed. A similiar point is made by U.S. Secretary of State Clinton. Both advisors to Obama were ignored in favor of Mr. Donilon and other White House adviosrs who lacked the experience of Panetta and Clinton. On the Iraq conflict Maliki's misguided sectarian policies were not sufficiently constrained by U.S. effort to preserve earlier hard won gains under the Bush administration. At the end of the Bush administration Iraq was returning to a peaceful period and the war had largely been won against old Saddam loyalists in Anbar province. Ultimately Obama's lack of experience in foreign policy and his failure to heed the advice of people with that experience such as Panetta and Clinton, was the basis of the crisis inadvertently created in Syria by a tendency of inaction. The Syrian situation was not fully grasped as leaving Sunnis to suffer Assad regime air attacks creating 2 million refugees, something that should have prompted action by the international community. With Sarkozy gone in France and Cameron unable to convince the U.S. alone, or move forward with the French unilaterally, the inaction phenomenon of the Obama White House left the entire Sunni communty throughout the Middle East without any support as they watched the destruction in Syria. ...

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China's leading online retailer with its own warehouses and delivery similiar to Amazon is JD.com. It has 118 warehouses in 39 Chinese cities, and 1045 smaller pickup centers in 500 smaller cities. Its online service and infrastructure to support it has been built carefully since 2006. It can now deliver by 3pm the next day and handles 2 million orders per day. The company raised $1.78 billion on the NASDAQ in the U.S. in 2014. Hong Kong venture capital firm invested $10 million in 2006. As it added new systems and software other investors including Tiger Global, Yuri Milner, and the Waltons invested in the firm. JD focusses on low cost and reliable fast delivery using motorbikes for 20,000 couriers for China's congested traffic in cities. It is a unique combination of Amazon, UPS and Wal-Mart in its innovative way of running its retail operation. Liu is the son of a cargo shipowner from Jiangsu province who studied sociology at Renmin University in Beijing, before starting an electronics store in Beijing's high tech zone Zhongguancun. The online retail idea took off when he setup an online store in 2004. He says a lot has changed since the early days when delivery was slow with many customer complaints, and says logistics is important because of user experience. Because JD charges little for delivery margins are thin, and the company has focussed on growing the user base over profitability....

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Helena Morrissey of the 30% Club has helped increase the representation of women on Board of Directors in Britain to 23%. This is nearly double the figure in 2010. Helena Morrissey uses a non-confrontational approach, getting men to join the organization and having them act as advocates with other men in senior positions. She learned this after using other approaches which were less effective. She focusses on telling chairman of the boards that having women on the board provides different perspectives, and points to studies that show about 30% lets a minority voice be heard. Homogenous boards have been known to provide no new thinking or fresh perspective, a problem at many companies. The opportunity opened up with the finsncial crisis of 2008 and widespread opinion that the boards had failed to understand the crisis that was coming. She and 14 other women got the support of 2 prominent board chairmen in 2010 to start the 30's Club. A Commision by the new government led by Lord Davies provided additional impetus by recommending that 25% of a board be voluntarily set for women. Early in her career Helena was turned down for a promotion because she had a baby. She has nine children, which her husband a journalist helps take care of at home, making her situation even more unique. Helena Morissey is CEO of Newton Asset Management in London's financial district....

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Ailworth and Faucon describe the ways in which shale oil producers such as Continental Resources in Texas and S. Dakota are responding to the drop in oil prices. One strategy adopted is to put off 60% of the expense of production by not completing the final stages of production of hydraulic fracturing, but keeping the wells ready so that production can quickly be ramped up if prices go to the $60-65 range. EOG Resources, Andarko, Apache, Chesapeake Energy, are also following this strategy. There are about 3000 such wells, not pumping but drilled and ready for hydraulic fracturing, according to RBC Capital Markets estimates. This strategy would mean large shale oil supplies well into the future to keep oil prices low. Production from lower cost wells continues with U.S. oil production climbing to a new high of 9.4 million barrels a day for week ending March 6, 2015, according to federal data. This shows that this is a new situation and the resilience of shale oil supplies may have been underestimated. Another strategy adopted by other large companies such as Exxon is to continue to develop technology by learning to get the oil out of the rock in the most cost efficient way. The capital investment in U.S. shale oil has dropped by $50 billion in 2015 compared to 2014. The number of oil rigs drilling declined to 866 in the U.S. by March 2015, according to Baker Hughes....

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Growing number of parttime workers and poverty levels in Japan. About 16% of the population in Japan lives on an income that is half the national median income, which is the way the government defines poverty. OECD studies in 2011 show Japan as sixth from the bottom of 34 members of the OECD. The poor quality of jobs is worsening the problem of the working poor, just as it is in the U.S. with lower wage manufacturing jobs and very low wage jobs in retail/ restaurant industries. Experts say the problem has worsened since 2012 when prime minister Abe was elected. Since 2012 the number of part time or irregular workers without permanent contracts has increased by 1.5 million, with parttime workers at 20 million, or 40% of the Japanese workforce. They point to the parental support with many young workers living at home, as is true also of Spain and Italy, that has mitigated their difficult situation. This piece in the Economist provides insights into the condition of parttime lower wage workers in Japan, a large number of whom are young people, a situation similiar to that in some European countries such as Spain and Italy. At the very low end as Japanese local and national governments- under pressure to cut spending with its high debt- reduce benefits, more people have been added to the welfare rolls with 2 million people now on welfare....

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About 15% of black men of working age in the population, and 21% of black women, were employed in the U.S. public sector, according to the population survey. The Labor Department reports 500,000 jobs in the public sector were lost since 2007. This reverses an historical trend of resilience in jobs for the public sector during economic downturns. If population increase since 2007 is figured in there are even fewer jobs considering more jobs might have been added, with estimates as high as 1.8 million. This is bad for black people in the U.S. because many work in public sector jobs driving school buses, in the post office, in the police and in other public services, with black people being 30% more likely than whites to hold a public sector job, and twice that of Hispanics. Thic comes at a time when the black community has seen a devastating impact from the foreclosures and other economic damage that followed the 2008 financial crisis. The result is shown in a study of foreclosures for 2005-2009 at Cornell University showing mostly black and Latino neighborhoods were affected by foreclosures at three times the rates for white neighborhoods. According to Pew Research Center the median white family had net assets of $142,000 compared to $11,000 for the median black family. With median black household income at 60% of that of white households the gap keeps increasing especially with high unemployment in black neighborhoods....

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Gretchen Morgenson cites two views on the newly approved Volcker Rule in December 2013. Prof. Richard Sylla of New York University sees the rule as going part way in the direction of the Glass-Steagall Act, which gave the financial markets five or six decades of financial stability. Just the fact that the rule is on the books should give the bank officers pause before engaging in questionable financial activities, is his view. Prof. David Skeel of the University of Pennsylvania Law School, believes only aggressive enforcement can make the law work because of the way it is written. He says regulators have fallen short in enforcement in the past and have not been held accountable. Only by making regulators accountable, including penalties for regulators failing to do their job, would this work says Skeel. By not imposing penalties for regulatory failures in the last crisis there is more likelihood for this sort of behaviour to continue. Instead the same regulators are now given greater powers after an earlier failure. Considering the Skeel view, the importance of the attestation- that is now required from bank senior executives that the Volcker Rule's provisions are being followed- take on an important role in ensuring enforcement. This also coincides with Mr. Volcker's view that the bank officers should have to take on the responsibility for making sure that they are doing it the right way....

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In the 2004 elections Islamic parties in Indonesia had 38% of the vote, this dropped to 28% in 2009, and polls show it is expected to drop to 20% in upcoming 2014 elections. The high of 38% in 2004 followed years of corruption under the Suharto regime and promises of clean government from Islamic parties. The anti-corruption issue has been taken up by successive governments and the popular Yudhoyono administration, leaving Islamic parties without that issue. Missing in this account of Indonesia and Islamic parties is a little bit of history that throws light on the subject. Indonesia was Hindu for the longest period of any large Muslim nation in Asia. In fact Indonesia converted to Islam only about 400 years ago, and has a strong underlying Hindu and Buddhist tradition including reverence for the Hindu god Hanuman, which can be found nowhere else. The Islam of the Crusades and of expansion across the Asian and European continent is a phenomenon foreign to the Indonesian islands. Gajah Mada who helped bring most of Malaya, Indonesia and parts of the Philippines under the Hindu Majapahit empire around 1350, was a symbol of patriotism in the fight against Dutch colonial rule from 1700-1948. The conversion to Islam came with Muslim traders from Malaya in the period 1400-1600. The name Indonesia itself is from a Greek word indus and enos for islands used by British ethnologist George Earl to refer to the archipelago. ...

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Mark Leibovich gives a detailed account of David Plouffe, one of President Obama's close political advisors, who has Obama's confidence on campaign and political issues. Leibovich says Mr. Obama has always been attracted to people who are loyal and act as fixers. He cites the film "The Godfather" as Obama's favorite movie, and Plouffe as the unyielding cop in a mob film "The Departed." Characteristics of Plouffe described by colleagues are extreme competitiveness, extremely unsentimental, extremely data driven. In a way the President's closest advisors offer clues to the nature of the President's style, approach to politics, and the conduct of the U.S. presidential office during this Presidency, as in others. Plouffe is described by colleagues as most in sync with Mr. Obama. And William Daley, the president's former chief of staff, says the Plouffe and Obama relationship is extremely private- using 6 very's to accent this. Issues relating to the shrinking middle class are coming to the fore in this election. A friend of Plouffe's, Steve Elmendorf, describes him by saying that he isn't sure whether Plouffe has any convictions about the middle class, its mostly a passion for winning and putting together the outfit to do this. For the bigger vision things Plouffe's colleague, David Axelrod, another campaign advisor has put together the themes and lofty phrases that President Obama has supported. The sense given by Mark Leibovich is of some wonderfully good packaging with a steely attitude. ...

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Questions readers raise about Lewis Sorley's account of wins in the latter part of the war in Vietnam. The idea presented that had the country stood behind the war effort it could have been turned around. Here President Johnson's own deputy national security advisor, Francis Bator, who is Professor emeritus at the Harvard Kennedy School, refutes this notion by saying that: "in Vietnam the goal was clear but unattainable by any means not grossly disproportionate to the American stake." He goes on to say that false inferences from that failure will not help President Obama with the hard question of deciding what feasible goals and means in Afghnistan and Pakistan and other places will minimize chances of amajor terrorist attack on the United States, whaterver its origating location. And doing this in a cost-effective way. The wording is designed to first focus on what is the minimum that America wants- safety from another attack. Second, to focus on doing this in a cost-effective way. At some point resources added become disproportionate to the American stake in Afghanistan. An infantryman in the Vietnam war describes a people in villages that he was supposed to protect who would not even alert American soldiers of bombs when they knew exactly where they were placed. People in villages who were basically indifferent to the central government in South Vietnam. Are the Afghan people any different? See the links to this....

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Blinder, a Professor of Economics at Princeton, and former Vice Chairman of the Fed, always supported Sheila Bair's efforts at FDIC to help reduce forclosures. He says, Secretary Paulson has released little of the TARP money for reducing foreclosures and helping homeowners and none of it went to buying up troubled mortgage assets. So he argues the nations mortgage crisis, which is at the root of its problems goes on. The government that gave us Katrina and the Iraq war will now give us the TARP program, which apart from supporting the banks has done little to address the other serious problems that it had been approved for. And no conditions were made with the banks that required them to continue lending, all it accomplished is unfreeze the credit markets, a serious objective but clearly not sufficient to address the underlying causes of this crisis. Martin Feldstein, Professor of Economics at Harvard, has also repeatedly this year, from the early months of 2008, called for help to homeowners to reduce foreclosures. Little in the way of his counsel is being heeded, even though he has represented Republican administrations including Reagan and Bush in the past. Clearly too many conflicting interests stalled any progress, and the repeated crises since summer left Secretary Paulson and Fed Chairman more of a role putting out fires or forestalling dangerous developments in financial markets, than setting serious policy measures in place. ...

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Shoichiro Toyoda's son Akio takes over as new CEO of Toyota. He got the MBA degree from Babson College in Massachusetts and joined the company at 27. Initially Shoichiro was opposed to Akio joining the company. Even today with the Toyoda family owning only 2% of company shares there is a faction that supports Akio and a faction that dislikes the founding family's involvement in running the company. So the job has not been an easy one for Akio. At one point Akio admitted himself into a hospital early in his career after friction with one of his bosses. Things settled down after that and eventually Akio headed the China operations, where he engineered the merger of Tinajin with FAW to give Toyota a more capable partner to expand in China. And to get Akio to take on the new role, the elders at Toyota like his father and others had to ask Fujio Cho to stay on as chairman, even though he has a back ailment that made him keen on resigning. Current CEO Watanabe will become vice chairman and help Cho with his duties. The idea may be to have more experienced people at the top as Akio takes over and makes changes to the conservative culture and bureaucratic ways of Toyota. This eases the transition especially if there are people who are wary of the founding family and Akio's more direct and bolder style of management....

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Eric Cantor, a House member from the Richmond area, who is the face behind the zero Republican votes in the House for the Stimulus Plan. He says Democrats should not take the message from this that they should not mess with the Republicans anymore in discussing the plans for the economy. Is this good policy though, when the bill has given some middle ground between tax cuts and spending, and the spending is on areas neglected for years such as roads and bridges, classrooms and energy infrastructure? And is there an element of lack of comprehension by Republicans stuck on ideological grounds, of the seriously deteriorating nature of this crisis which is likely not to come back with recovery in several years, and is a global crisis? When Prime Minister Thatcher, UK Prime Minister, left office, the British infrastructure rail, rapid transit, hospitals and schools, had been neglected for many years and voters were looking for ways to rebuild the dilapidated infrastructure. The economy was weakening under her Conservative party successor, giving the Labor Party its chance to make a come back on the grounds of rebuilding infrastructure and services, and improving the economy. In which case there are just as many risks in this approach of being left out entirely and losing credibility across the country. Sometimes a feel good position may not be the best, or the wisest option, and may be shortsighted. ...

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Remittances to developing countries are an important part of the social safety net in these countries. They are spent quickly so they help support food and housing costs, help reduce the impact of an economic downturn, and leave more money for health and education expenses. Remittances to Latin America and the Caribbean were at about $69 billion for 2007 and 2008. Now these remittances are declining. Mexico's declined by 12% in January 2009, Columbia suffered a16% drop, Brazil a14% decline, Guatemala and El Salvador a 8% decline. For countries like Guatemala remittances at $4.3 billion are ahead of coffee, and sugar, and 10% of the people some 1.35 million live in the USA, And 3.5 million people in Guatel=mala depend on these remittances. Any appreciation of the US dollar cushions the decine in colume of remittances. Ecuador has a dollarized economy and has been hit hard. That is because it has alarge population in SPain, and Spain is one of the hardest hit economies, and the euro has declining versus the dollar. Low skilled professions in which these people work, in construction, manufacturing, hotels and restaurants, are oftent he hardest hit. Migrants are stayingput in these countries even turning doen incentives like those in Spain of lump sum payments to return home, and tend to be resilient, working odd jobs and longer hours and making do with less to tide over abad period....

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WSJ says that administration officials are considering aplan whereby on the first day of bankruptcy the government would announce the setting up of a "new GM" with Chevrolet, Cadillac, and good assets as part of it and a separate "old GM" that would hold the bad assets, retiree and health care obligations, Hummer and Saturn. The "good" GM would have responsibility for $20 billion in government loans. THe old GM could stay in bankruptcy for longer till buyers are found for parts of it or as it is wound down, with proceeds from the sales of assets going to creditors claims. WSJ sources familiar with the developments and the administration's views say that the administration prefers this route, and GM will likely will be forced into filing for bankruptcy protection in mid-May. That would be 45 days into the 60 day period President Obama has given GM to come up with a new plan that will work. The submitted plan was rejected by Obama's team on grounds that the assumptions for sales were too optimistic, none of the concessions from bondholders and the UAW that were needed had been made, the Chevy Volt was not going to pe price competitive, and fuel efficient car production was not a critical part of the plan. The government has asked Fiat to scale back its planned ownership of Chrysler to 20%, as part of an agreement for more government loans....

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A technology that has been known for years but with problems to solve before it can go on the road is being developed by automakers. It will increase fel economy by about 15% and reduce emissions of oxides of nitrogen a key smog component. GM is working on getting HCCI which stands for Homogenous-charge Compression- Ignition to work in a gasoline engine. For it to work the combustion process in such an engine has to meet certain conditions, the mixture of air an fuel has to be homogenous and be at certain temperatures. Once this is achieved combustion occurs without a spark. The trick is to get the temperature and gas mixture to just the right homogenous levels so that it sparks and burns efficiently, which at this time is being achieved by computer controls keeping the engine rpm within a certain optimal range of 1000-3000 rpm which covers typical driving. Problems that remain to be tackled are the faint rattling type noise when the engine shifts to spark ignition when its outside this range of rpm, and the emissions reduction at low loads, and handling a range of fuels. GM has made progress upto the advanced engineering and road test phase for the Saturn Aura. German automakers Mercedes and VW are perfecting there own versions of HCCI and Honda is developing its version and its a top priority for these automakers. ...