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The Economist magazine says Mr. Trump's claim that he could fix things because he is an outsider is now quickly proving to be false. The lack of experience works against the Trump administration as it stumbles from one crisis to another. The tweets that were used to turn voter sentiment against opponents now work the other way. There are other problems that are noted here but not emphasized to the extent they need to be. Mr. Trump, as Peggy Noonan, a Reagan aide, has pointed out in the WSJ, risks alienating the very blue collar vote, and older voters whose interests he claimed to defend. This happened with the Ryan Republican House health care bill as millions of poor Americans approaching retirement were one of the worst affected groups. The Economist points out that the next project to tackle tax reform has the same possible consequences for the Trump blue collar base, as it says Republican plans for tax reform are seen as regressive. Tax reform has eluded previous administrations, and requires more experience in building coalitions which the Trump administration lacks in its confrontational attitude towards Congressmen on both sides of the aisle who disagree with him. Improving the U.S. trade position, infrastructure investment are other areas that the administration plans to tackle, yet the first 100 days show that the lack of experience and the lack of a calm composed mind is hurting the Trump administration, to the point of policies that hurt the very voters who put their faith in the Trump administration to improve things. A similar process is unfolding in Britain as it faces a Brexit negotiation that the Economist points out has been badly handled by prime minister Theresa May, and could lead to worsening the economy if no deal is reached because the European Union sees that it is not in its interest to do so, and Ms. May realizes only later that she has taken nationalist sentiment a bit too far for a European economic arrangement to work and provide mutual benefit. A continent wide economic arrangement that it was the wisdom of past leaders from Britain, France and Germany to support for over six decades is not easily undone by one vote, or one government. ...

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Five rules the editors of the WSJ say should be followed when working on cleaning up the banking system. A clear no, as Krugman and other experts point out is for the government to make the rather imprudent move to take on all the debts of the banks as in Ireland. A second rule is not to underestimate the size of the problem and delay action till the problem gets much worse, when its harder to deal with. ECB president, Mario Draghi, pointed out the problem at Spain's handling of Bankia bank as a clear example, telling the European parliament recently: "There is a first assessment, then a second, a third, a fourth. This is the worst possible wayof doing things. Everyone ends up doing the right thing, but at the highest cost." A third rule is to set clear rules about banks, who gets rescued and who gets closed and why- so that its not left upto the discretion of officials. On this rule Spain's outgoing Zapatero administration gets good marks from WSJ for settting clear rules to the cajas svings banks. A fourth rule applicable to Europe is to first setup the expertise and conditions for a European banking regulator before setting up a banking union and direct injection of funds by the EFSF into banks of individual countries. A fifth rule is to avoid creating even larger mega banks by consolidating failing banks with large banks, and continuing the government's implicit guarantee of the bank because it is "too big to fail" and creates systemic risk- this is the situation after action by the U.S. Federal Reserve, regulators and the U.S. Treasury....

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Coordinated action by the governments of France, Britain and Germany each with its own package depending on its own circumstances but committing over a trillion dollars to rescue plans for financial institutions. In Britain the government moved to take majority stakes in 2 of its largest banks, the Royal Bank of Scotland, and the newly combied bank of Lloyds TSB and HBOS in exchange for a $64 billion capital infusion. In Berlin the German government setup a 480 billion euros package consisting mostly of loan guarantees, with 400 billon euros in guarantees for inter-bank loans and another $80 billion euros for direct injections of capital to help weak balance sheets and purchase toxic or illiquid assets of German banks that are at the brink of collapse. The French have setup their own 360 billion euros package. The French government will create a fund to raise money to guarantee debt for upto 5 years in a bid to make cash available to banks. The banks can access these funds in exchange for putting up their own collateral, including debt not currently accepted by the ECB. And a state sponsored company will provide upto 40 billion euros in direct capital injections to banks that request it in exchange for equity stakes. In addition Netherlands made $220 billion euros available for capital injection into banks and other efforts and Spain will insure upto 100 billion euros in bank debt. Britain's step are the boldest ones yet and Britain's crisis is also likely to be one of the worst because of years of leveraging and overborrowing. But the German financial system is also under heavy strain and strong swift action was necessary to keep its banking system functioning. While other countries have setup the funds for capital injection like other European countries and the USA, Britain has also take the lead in taking majority stakes in two of its largest banks by Monday, October 13, with the departure of the executives who got these banks into such a mess. Gordon Brown has shown cosiderable leadership in this crisis and has been at the forefront in proposing and acting on workable solutions and swift response while Germany and the USA lagged behind. France's Sarkozy's contribution has been in the area of global coordination which he has argued and worked for and successfully achieved during the last 2 weeks....

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The biography of Lula da Silva on the Brazil government site gov.br 2025. It shows Lula as one of 8 children from deep in rural Pernambuco state in northeastern Brazil. His mother brought the family to the outskirts of Sao Paulo Guaruja 60 kilometres away on a 13 day trip in an old pickup truck to leave the poor conditions in rural Brazil in 1952. By 1956 the had moved to Sao Paulo in the iparanga neighborhood. He worked at ascrew factory before joining a trade school Brazil's National School for Industrial Learning, studying to become a mechanical lathe worker, making him a metallurgist in 3 years. He then joined Industrial Villares, a large metallurgical company, in Sao Bernardo do Campo, ABC region of Sao Paulo.  This started his career as trade unionist in 1969 elected to the Board, 1972 elected First Secretary, and 1975 elected president of the Union of Workers of Sao Bernardo do Campo and Diadema, representing 100,000 workers. This was aperiod when the military dicatorship was beginning the proces of redemocratization of Brazil. Lula led strikes in 1980, formed the CUT Central Unica de Trabajodores in 1982, ran for Governor of Sao Paulo that year and in 1983 was elected to the Constituent Assembly. The Workers Party was founded on Feb. 10, 1980 during this period of redemocratization. Lular ran for elections as president losing to Cardozo twice in 1994, 1998 and wiining at ae 57 years in 2002.     ...

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The new regulations that Britain's FSA and Germany wish to see implemented. FSA would like to see hedge funds regulated, regulation of credit defalt swaps and other financial instruments not currently regulated, a larger set aside of capital to cushion losses in a downturn, and an active regulator who would probe into the books and capability of staffs at financial institutions. Germany also wants to strengthen the authority of its regulator, and wants to see a bigger set aside amount for losses in a downturn in a countercyclical manner. Britiain's FSA also wants to regulate the local branches of foreign financial insttitutions.

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A 2004 rule made under SEC Chairman Donaldson and requested by the investment banks one of which Goldman Sachs was headed by Paulson changed the whole playing field and created the dangerous situation of huge leveraging that has led to the collapse of some of these banks. Older regulations limited the amount of debt that these investment banks could take on. With the new rule billions of dollars held in reserve as a cushion against losses could now be used by these banks to invest in mortgage securities and credit derivatives, a form of insurance for bond holders. Others on the SEC who supported it included Goldschmid, an authority on securites law at Columbia who asked relevant questions but relied on the assurance of Annette Nazareth, head of market regulation that under the new rules the investment banks would also be restricted by the commission from risky activity, that under the new rule the SEC would be able to look into the books of the parent companies and subsidiaries of the investment banks. But no detailed and strict oversight methods were laid out, and instead these banks were allowed to go out on their own without any restrictions. The riskiness of investments would be measured by the computer models and brains not of the SEC but of the investment banks themselves. And these banks went on a leveraging binge with 33 to 1 for Bear Stearns which collapsed in 2008. One lone dissenter was a person who wrote the computer models to determine the riskiness of investments which were used by the banks, was at the University of Chicago, and was a risk management expert. He cautioned in a letter that these computer models had failed in the 1997 LTCM collapse and could not be relied on as environments change. At the SEC oversight was handled by 7 people and this was to oversee some $4 trillion in assets, hopelessly understaffed, and most of them believing that the investment banks would self police themselves as they were ideologically believers in deregulation. So no inspections were done for an year and half upto August 2008 even when there were clear signals of trouble according to an Inspector General's report. This group had no director since March 2007. Soon after the rule Donaldson the SEC chairman left and a Congressman from a conservative district in California became Chairman, Christopher Cox. He favored deregulation and may not have even been aware that the 2004 rule had created a new and dangerous environment, so he followed his instincts and even dismantled a risk management unit Donaldson had established. Which is why McCain has called for his firing....

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The failure of Basel 1 and 2 and the effects of the Asian market crisis in 1997 in creating a situation of current account surpluses in Asia and other countries that ended up in extra liquidity in the western countries where debt went out of control. The concerns about negotiations to enhance the role of emerging economies in the IMF, the Financial Stability Forum and other organizations, as these organizations play a larger role and need larger access to funds. The chance that with such a large agenda especially in the area of regulation and enlarged representation of emerging economies in international organizations like the IMF, the leaders of G20 may simply use this meeting and meetings in coming months to forward their own leader and country agendas, leaving these issues unresolved for now.

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Zeit Online takes a look at German chancellor Angela Merkel's statement made in a beer tent in the Muich suburb of Trudering- "The times in which we can completely rely on others are somewhat over, as I have experienced in the past few days." Zeit Online says the words "ein Stuck" in German were meant to say a bit or somewhat, but the essence of the statement that the depending on the trans-Atlantic alliance was now over comes right through.

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Changes Republican Governor Sam Brownback is making in the state of Kansas, which focus on conservative values, lower taxes, and major cuts to spending to reduce the footprint of government in the state. Kansas has a large Republican majority in the House of Representatives and strong tea party fervor, giving Brownback an opportunity to remake government in the state. Yet there is some skepticism about how lasting these changes can be with the cuts in government services. Some Republicans say the question is how much in government services do the people of Kansas want- if the cuts are too steep the people of Kansas may find too many services have been cut. Over the the last century Kansas has usually voted for moderate Republican governors, making this a major change.

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The US economy is in a far healthier place and the country is a better place today because of direct government aid to people, including stimulus checks deposited directly into bank accounts. Similar action took place in India, Britain, European Union countries with deposits of aid made directly to people's accounts. As a result Europe and India are in a much better place today.

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US president Biden joins a UAW picket line in Detroit. Biden says he supports the UAW in its wage negotiations for 40% increase in wages. Workers wages are depressed because of concessions made a decade ago to ensure the survival of the US auto companies. UAW leader Shain Fawn was elected directly by the rank and file members for the first time. He has gone back to the UAW's roots for strike action, as it seeks to reverse concessions on tiered wages and address the cost of living crisis. 

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Adjusted for inflation wages for automakers have fallen 19% since 2008 because of tiers new workers making about $17 an hour significantly less than the $32 an hour. UAW seeks an end to tiered hiring.  For GM it is about committing to a long term contract in an industry that is unpredictable and uncertain. GM wants to make substantial investments in the EV industry with president Biden's help even when not making profits from EV's. For the UAW Ms. Janis of Jobs to Move America says labor is a very small part of what it costs to make EV's, batteries are the most. None of the earlier difficulties are likely because much fewer workers are needed making labor cost a much smaller component. Toyota has been slow in its EV start, BYD in China is leading but US carmakers are supported by the US government for EV's. Auto workers want a fair contract . And GM working with partners can still build joint venture factories for batteries in the South just like Tesla where work is not unionized. In the competition in EV's R&D and quality of management will play a bigger role. Fairness for workers will motivate American carmakers, with worker training and quality+value of EV's important for success.   ...

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Worklife balance is now at the center of negotiations between UAW speaking for 150,000 autoworkers and Stellantis, Ford, GM. During the pandemic with mandatory overtime and working upto 6 days week, 10 hours a day, for product launches for many factory workers, meant a detrimental impact on personal health. A shorter workweek is proposed.

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Autoworkers want a raise of 40% from depressed levels with two tiers one for entry level workers set really low during a crisis when auto companies were near or entering bankruptcy. Automobile companies want to use high profits for EV vehicles.  Autoworkers have worked hard through the pandemic and have suffered low wages for a decade, now face a cost of living crisis- the 40% should be seen in the context of starting a depressed level trying to meet costs of living that have surged in 2021-2022. If both conditions are removed the increase might be a modest closer to 10% over a hypothetical higher wage and lower cost of living.

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Hard hitting article by an expert in the field of manufacturing and the automobile industry. Problems facing GM and Ford in his view- Note the following: 1) The engineering system with chief engineer in charge of product, concurrent and simultaneous engineering. Better development system for new products at Toyota. 2) How to work with suppliers by leaving room for suppliers to make a profit while attacking every kind of waste jointly. 3) Hardest hitting point on the culture. GM and Ford have cultures that turn competent people into Dilberts. And noting that if ordinary people -Dilberts even- are put in a great business process they become great team players. 4) Customer Service at Lexus. Customers cheerfully pay more because they love the treatment. 5) Labor relations- Union and management know what does not make sense yet no accomodation has been reached, because their conversation has broken down. Womack's comments leave a lot to think about and reflects a feeling that seems to run outside of the midwest- that if GM and Ford can't get a grip on their problems and fix them other companies like Toyota can replace them. A sense that Toyota as a global company is as much of an American company as GM or Ford. ...

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Friedman describes the lack of decisionmaking, initiative and courage in the Eurozone, India and China to tackle difficult problems. During his visit to India he describes the problems India faces. A serious problem with lack of good governance within the democratic framework. India also has a growing population that will soon surpass China's population, which makes the task of development that much harder, with the small steps India is taking to move forward not making a serious impact. Azim Premji, chairman of Wipro, described it this way: "There is a complete lack of decision-making among leaders in the government. If prompt action is not taken, the country will face a setback. You must appreciate how serious it is." Friedman sees a similiar situation in the eurozone countries as new governments are being formed in Greece and Italy by Papademos and Mario Monti, both technocrats from the European Union. This has the added complication because these experts have not been elected. The fact that they have support and goodwill is because of the failure of the political class in Greece and Italy. The failure of the political class in the U.S. is evident from the stymied negotiations over the deficit, and the lack of leadership from President Obama....

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Mr. Chatzis is being forced to choose between paying a $372 real estate tax bill to keep his lights on, and paying for his wife's medicines on a $720 a month pension. Under new laws Greece now incorporates new property tax bills in the electricity bills ordinary Greeks receive. He says he cannot pay this. This was added as part of conditions agreed to by Greece for aid from the EU. Ordinary Greeks have paid real estate taxes in the past when they bought or sold property, and paid much lower taxes yearly to municipalities- about $133 yearly for Mr. Chatzis. The new tax means he will have to pay an additional $372 for the next two years. The new tax is added to electricity bills from the government owned electricity company to ensure payment. The tax makes no exceptions for the elderly or the unemployed. It is based on square footage, age of the building, and average value of the neighborhood, and has no relation to income. The feeling in Athens is that of growing resentment. Union workers have occupied the electric company's billing center, and the power company is holding off on electricity cutoff notices till the government decides. ...

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GM says it will end traditional pension contributions and instead use a 401 (K) plan. GM's pension plan was underfunded by $8.7 billion as of Sept 30, 2011. GM will also freeze salaries for 26,000 salaried workers. Salaried workers will get an extra week of vacation. GM's 48,500 UAW union represented hourly workers will receive bonuses under a formula dependent on profitability and quality. Salaried employees will receive smaller bonuses because other metrics such as free cash flow and earnings before interest and taxes, and not just profit, are used to determine bonuses. GM's management sees GM as not having enough margins to reduce risk to the level it should be. The pension shortfall and the losses in Europe are also on their minds. Margins at GM lag behind compettitors. GM's margins are at about 6%, compared to Hyundai and BMW having margins of 10% in 2011. These changes come as GM plans to show a record profit of $8 billion in 2011. Management sees no room for complacency after the missteps in the last decade leading to the government bailout. A strategic decision made by GM in 2011 was to reduce the overhang of high inventory by reducing production, changing the way GM operates now compared to the years before bankruptcy....

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In Bagour, Egypt, in the crowded Nile delta, the old order was represented by Kamal-al-Shazli, a member of Parliament from the ruling party for 46 years. This means he entered Parliament in 1964, eight years after the Suez Crisis of 1956, when Egypt under a young military officer Gamal Abdel Nasser confronted the British and the French over the Suez Canal. Everything here in this town was done through Mr Shazli, the ultimate system of paronage was in place, and everything was named after him. Only the slogans of the anti-colonialism days, the days of hope of improving the living conditions of the people, remain. Everything else has stayed much the same for the vast majority of people. Now the task of changing things requires people to think for themselves and learn to work together to guide their own affairs under a democratic system of government and free expression. And this is quite different from the system in place for over 50 years, just as happened in the old Soviet Union. The old system was held together through a patronage system, bribes, enforced by the ruling party and its state security, and one in which individuals had to trust in the state to do their thinking for them about running the country....

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GM announces loss for 2008 is $30.9 billion and loss for the fourth qurter is $9.6 billion. The company also said it may not be able to meet its auditors going concern requirements. GM burned through $5.2 billion in cash in the fourth quarter, and $19 billion in 2009. This puts the cumulative net loss to $82 billion since CEO Wagoner began restructuring in 2009. Its obvious now that notwithstanding the media attention it got and what was said by key players, not much was done and the dangers in continuing existing strategy on fuel efficiency, and on too optimistic assumptions about what could happen to car sales, and on acquiescing to union demands on benefits that no company could sustain if economic conditions turned for the worse. All this has played out and in dramatic fashion in the last 6 months. Astonishingly the Board and GM are going down with the ship, the same management and the same board are in place, proving again that capitalism does not necessarily follow rules of pay for performance, except when things are looking good when management skills are not really tested. The banks have proved this in ample measure in recent months....

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Toyota is reducing its dependence on the US market by growing in China, Russia and the Miidle East and with plans for growth in India with a lowcost car. The market in China and Russia has grown by 40% for example and this should mean there is room for overall global growth even with the slowdown in the US. In China Toyota is falling short of demand as its consistently underestimated the growth in the market. When Toyota thought the Chinese market would hit 8 million vehicles by mid 2007 it actually hit 8.5 million. So in many countries like China, Russia and the Middle East and India Toyota may be scrambling to meet demand in the future which suggests that in the long term Toyota may be less affected by the ups and downs in the US market. The US manufacturers like GM are following a similiar strategy. Competing with Toyota overseas the US makers have none ofthe liabilities they face in the US market, years of sloppy service and image, pension and health liabilities, union rules and restrictions, and they are moving some of the best technology and design into overseas markets so the competition there should be on more even ground....