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Feldstein's thoughts in April 2009, on Treasury's Public-Private Investment Plan. First, he says this plan will only remove $500 billion of impaired assets. The banks he says now own $3 billion of residential mortgages, $1.5 trillion of corporate real-estate loans, and $1 trillion of consumer debt. Not all of this is impaired but the banks will have to sell much more than $500 billion to regain confidence in their solvency. And with one third of all residential mortgages exceeding the value of the houses, and thie many homeowners under water, likely to default, the negative feedback loop of foreclosures begetting falling prices begetting foreclosures, threatens the whole effort to shore up the defences. If no workable solution is executed quickly to prevent this then even larger pools of mortgage debt will be impaired irretrievably. Feldstein suggests that the Obama administration seriously look at his plan suggested in March 2008 to provide government loans at low rates of interest like 1- 2% for 20% of the principal amount of the mortgage and then reduce the mortgage principal by 20%, thus keeping millions of homeowners above water. But this needs to be done quickly. All voluntary efforts have failed and have become asmokescreen for banks and lobbying groups with support from Congress to make it appear that this problem is being addressed. Thirdly Feldstein says that if banks sell these impaired mortgage assets at a loss- say 40-60 cents on the dollar on the upside with government and the FDIC picking up alot of the risk and financing for private investors under the new plan- they will now have to show the loss whereas they could have previously shown these assets at unrealistic price levels but still not taking losses. This might push banks into insolvency, so banks will need more injection of capital by the government to make this possible. What are the risks in this situation? Without an effective plan to prevent the negative feedback loop of foreclosure waves and falling houseprices, the quantity of impaired assets will simply grow larger. In effect even if some private investors take out some of the impaired assets from the banking system, it is possible that a new set of assets equal to or larger than these assets that are taken out are added to impaired assets in the banking system as house prices fall steeply from new foreclosures. That only means the economy is in the same hole as before, or in a slightly larger one, even with all the well intentioned steps. At some point the private enterprise argument has to be seen in the correct light. It is not that there is any argument that private enterprise can function better or far superior, it is only that the banks as private enterprises are in such an enormously stressed situation that the bank executive's cannot execute a way out of this mess. ...

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A NYT report on Donald Trump's long standing relationship with his lawyer Roy Cohn,  who was also an advisor to Senator Joseph McCarthy. The report says Roy Cohn used aggressive legal tactics in lawsuits and influenced Trump's style of doing business in his real estate dealings. It is a detailed report of Roy Cohn's influence on Trump, which the reporters say has influenced the way  Trump ran his 2016 election campaign. It shows Cohn as protecting Trump in lawsuits, and Cohn's sense that Trump would someday play a big role in New York's real estate business, as Cohn's first meeting with Trump started when Trump was beginning his career in the early 70's. 

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Neil Irwin of NYT provides some counter intuitive ideas on U.S. Fed interest rate policy. He says it can't be take as a given that the Fed will raise rates in 2017-2018. This depends on how much punch there is in the Trump economic policies for stimulus, and for infrastructure spending, tax cuts. He cites Senate Majority Leader McConnell who said he would like to keep "tax reform revenue neutral." Getting large spending and pushing up the deficit is likely to run up against Republicans in Congress who have for 8 years opposed large spending increases and large deficits. Trump has given few details about his stimulus or infrastructure spending plans. He says the scale of the spending might not match the talk. Irwin cites JP Morgan Chase economists who have kept their forecasts for GDP growth just under 2% for 2017 and 2018. And he points out that even Trump appointees at the Fed might act independently. The Fed might look at being cautious considering that increased trade tensions with China, and the unpredictability of a Trump administration could hurt growth. Irwin does not mention the uncertainty in other areas such as policy towards Russia on which the Republican party and Congress have very different views than Trump, tensions over Taiwan, that can also affect growth. ...

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Binyamin Applebaum cites different experts on how U.S. Fed policy could play out in 2017-2019. He cites Fed governor Dudley that there is increased uncertainty under the Trump administration, and other economists who say that aging population, lack of innovation, and steady growth under the Obama administration with falling unemployment, make it unlikely that growth will jump well above 2%. The Fed's own forecasts are for for under 2% growth in 2017 and 2018, and Applebaum says this is not expected to change by much. Janet Yellen does not see a huge stimulus as a positive, says Applebaum, because it would increase the deficit at the wrong time. He cites Yellen who prefers to see more fiscal space now that unemployment is down to 4.6%. Steady growth in the view of Fed officials has taken up much of the backlog of people looking for work since the 2008 crisis. Yellen sees some fiscal space as desirable with high debt to GDP ratio at 77 percent, so that the government could respond to some adverse event in the future. A Republican Congress is also averse to sudden increases in the deficit. See the link to views about the uncertainty of how things can play out in a separate article by Neil Irwin of NYT. ...

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A young socialist leader in the Sanders campaign effort asks what it is about aging socialist leaders Jeremy Corbyn, 68 years, in the UK, and Bernie Sanders, 75 years, that makes them popular with young people. She says both leaders stood up consistently for decades on issues important to ordinary working class people, when Labor under Blair and Democrats under Clinton abandoned their base to a point when one political expert could say Democrats  were the "second most enthusiastic capitalist party" in the U.S. She says under Blair Clause IV was rewritten. That clause committed the Labor party in Britain to "common ownership of the means of production, distribution and exchange." Under Corbyn, with support from young people, Labor received 40% of the vote. The party was reenergized on issues important to students such as making higher education accessible to all. A similar situation happened with Sanders in the U.S., who received more of the young people's vote in 2016 primaries than Trump and Clinton combined. ...

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Former U.S. president Bush says the U.S. has an important role as a beacon of freedom, human rights and democracy in the world. The U.S. should not shrink from the challenges in the name of a false and temporary stability, and flexibility should not mean ambiguity, difficulties should not mean shrugging away from America's role. Patience, creativity and active American leadership are needed. The Bush administration supported the struggles of people in central Europe and in other countries. This is from a speech Bush gave at the Bush Institute, Southern Methodist University in Dallas, a year into the Arab Spring. A speech that was giving voice to the aspirations of people in the Arab world.

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Hillary Clinton narrowly loses the Michigan primary to Bernie Sanders in March 2016, as the Sanders campaign focusses on Clinton's support for trade agreements that hurt American workers and lead to loss of manufacturing jobs. About three fifths of voters in the Michigan primary considered this a major issue. Many less educated younger workers see their job prospects diminish and wages drop with free trade that hurts American manufacturing jobs. Bill Clinton signed the NAFTA agreement with Mexico, and as a member of the Obama administration Clinton supported the Trans Pacific Trade Agreement, later opposing TPP when she left the cabinet. Sentiment against trade that hurts manufacturing jobs in the U.S. is strongest in midwestern states such as Michigan, Ohio and Illinois. This was also a major issue benefitting the Liberals under Justin Trudeau who won in Canada's industrial Ontario province which has suffered hollowing out and loss of manufacturing jobs under the Conservative Harper administration. In the U.S. the issue goes back to the Clinton Administration for two decades. New jobs created by Apple, Google, and other tech companies pale in comparison with the industrial jobs created in another era that benefitted working class families. This issue and high unemployment or under employment, lower wages for working class families, was a major issue in the 2016 U.S. presidential election campaign. Widening wealth disparities, and lack of upward mobility, high tution and healthcare costs for ordinary families, dominated the campaign in the U.S....

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Hillary Clinton returns on September 15, 2016, to the campaign trail after 3 days of rest to recover from pneumonia. She chose to speak at the University of North Carolina in Greensboro, with N. Carolina  now considered a state that is winnable, and with a new focus on young people on campuses where she wants to regain her once large lead in the summer. She said that the break had given her time to reflect on what it is she represents. "The campaign trail doesn't really encourage reflection and its important to sit with your thoughts every now and then. It helped me reconnect with what this campaign is all about." Adding that it was about quality health care, financial security, clean water and other critical needs of people.

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The CEO of the New York Times and the former director general of the BBC, takes a look at the public discourse in the 2016 U.S. presidential election and in the Brexit campaign, and finds some troubling changes. The use of words that can eaily be picked up by Twitter and social media to attack opponents, the complete disregard for facts, and outright attempts to denigrate and destroy using rhetorical tactics, and a section of the public that has turned away from the facts or is disinterested in facts, is deeply troubling for Mark Thompson. When the public discourse fails, then the politics as a whole starts to collapse, says Thompson. We are children of the enlightenment, says Thompson, and were taught to look underneath statements to discern the truth. This is a crisis in public discourse. Worse it is one in which truth telling by people who say they are outsiders and tell it like it is, is not about telling the truth. Which is what makes it so dangerous. Thompson cites the statement by Michael Gove that "people in this country have had enough of experts," as another dangerous sign. He says it is time that experts make themselves understandable and talk in a way the public can understand. The media needs to explain issues in clear ways, and professional policymakers language of discourse needs to be conveyed in better ways that the public can grasp, in which the Brexit Remain campaign failed, says Thompson. Its important to acknowledge the problem, as the health of our democracies depends on finding solutions to what has happened in 2015-2016 to change the public discourse and let it deteriorate to unimaginable levels.  ...

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In this interview with Der Spiegel Bernie Sanders reflects on the 2016 election. He says that the Democratic Party missed the fact that many people in the midwest, south and other parts of the country, were worse off after president Obama left than when he came in in 2008. He also says Hillary Clinton relied too heavily on speechwriters and advisers upto the point of  having three speechwriters say why she was running for president. He finds the cuts proposed to healthcare, in the budget, and action on climate change, immoral. He also points out about the investigations that Mr. Mueller is someone everybody respects and that it would be wrong to offer a biased opinion, that Trump supporters would see this in the way that he is picked on when he just came in. He also believes Trump supporters are like other voters and are likely to look at the results, how better off they are under the Trump administration.

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This article in the Economist describes the different perspectives on the Greece crisis in July 2015 as seen inside Germany. It cites a poll showing German 51% to 41% favoring a Greek exit from the eurozone. About 85% reject further concessions in a July 1, 2015 poll, including 68% of the supporters of The Left, a post-Communist party. Social Democrats leader Sigmar Gabriel, said of the Greece timeout from the euro proposal by finance minister Schauble- that it was the appropriate thing to consider all options. And 78% polled see Greeks not keeping their side of the deal. Some experts see stronger sentiment about Greece after the events in July 2015, and the raising of the issue of the debt haircut given to Germany in 1953, because Germans see themselves as having gone to great lengths to build a strong Europe after their own troubled history in the 20th century. If the goal was to win German support in 2015, this has come across as poor tactics and poor strategy, considering how it has changed German opinion across the spectrum of political opinion....

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Jackson Diehl, deputy editorial page editor of the Washington Post, says its hard not to conclude that Obama is really not engaged with the struggle for democracy and democratic process in the countries of the Middle East and the Arab World. His voice is only heard sporadically, and is missing altogether at crucial times, as the people of Egypt, Libya, and other countries express their democratic aspirations. This has been the case from the beginning of this struggle and continues today. He cites an Arab opinion poll, from Shibley Telhami of the University of Maryland with Zogby International, which shows a positive view of Obama at 34%, compared with 39% in 2009. When asked which countries have played a positive role, France and Turkey are given first place and the U.S. is close to China. This is because France's Sarkozy and Turkey have been actively engaged, and Obama has been silent for most of the time. Diehl says most Egyptians he talked to in Cairo in a recent visit, think that Obama's focus is on going along with the military and Israel. ...

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The Economist cites a think tank that says about 600,000 young educated Kashmiri adults are jobless. Kashmiri religious and political leaders worry that their youngest followers might take up radical positions. The violent insurgency has so far subsided but is now replaced with stone pelting and hartals (strikes). The fear is that the influence of moderate leaders such as Mr Geelani, who is in his eighties, will be replaced with leaders who would reignite tensions and an insurgency. Dr Mushtaq Margoob, of the psychiatric hospital in Srinagar, talks about the throngs of patients with stress and anxiety, with the youngest the most damaged. He sees "a collective anger, a traumatized generation." A three man team, comprising 2 academics and a journalist, was sent by the central government to Kashmir to prepare a series of reports by talking to all sides in the conflict The team has proved ineffective as the members do not carry political weight to influence decisions. A Wahhabi organization, al Hadith is using Saudi funds to establish itself as a strong welfare, religious, and cultural force. The non-muslim minority in Kashmir sees al Hadith as bringing Saudi Islamization to a region long known for its Muslim's religious tolerance, building community centres, mosques, schools and clinics. Are there creative better ways to bring peace to Kashmir and redirect the resources India has to commit to the region, Pakistan has to commit to its border with India, and the U.S. has to commit to its ground war in Afghanistan. For now India is locked into a silence about Kashmir in international discussions, Pakistan is playing out its own "security objectives" in Afghanistan, and the U.S. is locked into its anti-terrorism objectives in Afghanistan. Only by connecting all these dots can peace and redirection of resources be achieved. The U.S., Pakistan and India, would come up with a creative solution only if each side finds itself pushed to the point where continued commitment of resources is no longer tenable because of economic crises, or the US and the Western alliance see the need to pull South Asia together to act as a balancing element in Asia in relation to China and Japan; and push for negotiations with an offer of stronger economic ties. ...

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February 1, 2011, the day when a million demonstrators were expected to come out on Tahrir Square in Cairo, the Washington Post makes a call for a democratic transition in Egypt. The Post says unfortunately the debate has been affected by considerable misinformation and mistaken ideas. It singles out three for correction. The protestors have no platform, that the radical Islamists are likely to assume power, and that the US has little power to influence the change. The April 6 Movement is a principal organizer of the protests and is run by young people. The party of Mohamed El-Baradei and the Muslim Brotherhood have joined together with the young protestors movement to have a common platform. And in a country where an estimated two thirds of the population is under 30 years, the older leaders in the El-Baradei party and the Muslim Brotherhood are deferring to the younger leaders. The movement is middle class, centrist, and its main grievance is the yearning for liberty. Eliott Abrams, the deputy national security advisor to former President George W. Bush, and Mr Bush on C-SPAN, have come out in favor of the Egyptian people's struggle for freedom. See Abrams column in the Post. The Muslim Brotherhood is unlikely to win anything more than a minority of seats in any elections, because the overwhelming influence in the protests is secular, middle class, and seeks the democratization and modernization of Egypt. For the American people this is an opportunity to support the aspirations to freedom and a modernized economy for the Egyptian people....

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The problem of information providers is linked to the problem of the recipient of the information- the common man in America. For the common man in America these are distant places with strange cultures and manners of living, remote from his everyday existence in an industrialized country. Why should the common man in America care if a small fraction of GNP and a trained military with advanced equipment will be sufficient to deal with situations in remote places. A fast growing economy between 1950- 2000 could also absorb the costs of local conflicts. The reason the common man in America should care is that the economy is expected to grow slowly, so that poor information leading to poor decisions on allocating limited and declining resources for different local conflicts- a war in Iraq costing 1 trillion dollars, and a war in Afghanistan 1 trillion dollars- can compromise future economic security, investment in America and overall defense needs. Especially when money wasted with poor decisions cannot be retrieved or put back in the Treasury, and creates future problems....

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One of the severe problems noted in the recall disaster of 2010 was that practically all important quality and safety decisions are made in Japan. Without key American decisionmakers in the process this leaves Toyota exposed to all sorts of errors like the errors that ocurred in stalling the National Highway and Traffic Safety investigations into acceleration and braking accidents in Toyota vehicles. To compound theses errors managment at Toyota focussed on the $100 million in savings that avoiding or minimizing the recalls would generate, as revealed in internal documents. Early warning signs of similiar problems in Europe were not linked to problems in the U.S.. All this was ocurring against the backdrop of a change in management at Toyota- with the Toyota family once again regaining control of the company- and the failure of the management under Watanabe and previous CEO's to put quality before rapid expansion. The new changes are to have 2 new senior executive positions in the U.S. to focus on quality and safety. A chief safety executive will focus on safety and recalls, and a chief quality officer coming from the top ranks of the American operation will now sit on a special committee for Global Quality led by CEO Akio Toyoda. The commitee for Global Quality will address the global quality issues around one table with the highest ranking executives at Toyota right at the table to talk things out. ...

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Anger in Greece at the austerity measures was evident in the results of the April 2012 elections. The two major parties polled even less than the low poll numbers that they expected. The Socialist Pasok party of former premier Papandreou received only 13% of the vote and not the 15-18% expected, the New Democracy party of Antonio Samaras received only 18.8% and not the 25% expected. As a result the two main parties that have ruled Greece received less than one third of the vote combined. The second largest party after New Democracy is now the Coalition of the Radical Left or Syriza, which received 16.78% of the vote. It is led by young Alexis Tsipras, 38, who has said the bailout treaties witht the EU and the IMF were "not salvation, but a tragedy." Syriza opposes the austerity measures and prefers to exit the eurozone. A extremist far right anti-immigrant party New Dawn received 7% of the vote showing the desperate situation. New Democracy's Samaras tried hard but failed to form a government, and under the Greek constitution each party gets a few days to form a government. The outcome is likely to be new elections in June 2012 and a caretaker government appointed by the president....