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How ethanol picture as a useful alternative fuel has changed completely in the past year. The economics of ethanol also have changed completedly in the past year, as corn prices have risen to above $3 abushel and stayed there, even with the biggest corn crop since 1945, and prices of ethanol have dropped with huge oversupply of ethanol from $5 a gallon in June 2006 to about $1.85 a gallon today. Global ethanol production has grown from 10.9 billion gallons in 2006 to 13.4 billion gallons in 2007 according to IEA. US's ethanol production is about half of this or 7 billion gallons and is up 80% in 2 years. The production capacity of ethanol with new plants is expected to jump to about 12 billion gallons in 2008 even as demand for ethanol is about 7 billion gallons.This huge oversupply accounts for the drop in prices of ethanol with margins dropping from $2.30 in 2006 to 25 cents in late 2007. Its become less and less attractive as an alternative fuel as more studies appear and more groups cite the different ways in which ethanol has destructive effects on the environment. Corn is in demand by food companies and by livestock companies in the USA and generally across the developing world so raising corn prices is seen very unfavorably around the world. Nation Academy of Sciences study and a National Research Council study says corn based ethanol could strain water supplies and impair water quality. American Lung Assocation worries about the the air pollution from burning ethanol in gasoline. And a EPA Spring 2007 report says ozone levels increase with increased use of ethanol. A study coauthored by Nobel prize winning chemist Paul Crutzen says it might exacerbate climate change because of the added fertilizer used to produce corn raised emissions of nitrous oxide. All this has made people wary of ethanol and much of the early enthusiasm for ethanol has vanished. The lobbying struggle pits the ethanol producers and the farm lobby in the midwest against oil companies which don't like being forced to use a non-petroleum fuel even with a subsidy of 54 cents of gallon for blending ethanol into gasoline, and food and livestock companies which need corn at lower prices. Add to this the weight of environmental organizations and countries across the developing world which simply don't like the idea of using scarce food resources in this manner and find this to be just not a right thing to do for the world's poor which need corn as a basic food source. Consider Mexico where this affects the price of a staple food corn tortillas and China which bans the use of corn for making biofuels, both countries seek to keep food prices low for the country's large numbers of rural and urban poor people and could see the stability of these countries disturbed by huge rise in food or fuel prices. As a result of all this the ethanol lobby is looking to Congress to mandate a certain usage figure of ethanol in gasoline production in the new energy law. This legislation now could become controversial in the future as better ways of solving the energy crisis such as automobile fuel efficiency reducing demand and conservation, as well as other alternative sources that have fewer adverse environmental impact come into play. ...

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The authors, Becker, Davis and Murphy, are from the University of Chicago. They point out that the uncertainty created by the Obama administration's programs including healthcare and social investments in education, energy conservation, and the desire to reduce carbon emissions, all tend to slow business expansion and investments to create jobs by putting additional costs on business. The expanding federal deficit and national debt also create additional uncertainty. Their point is that it was a mistake to start making major changes to transform the U.S. economy at this time, and that it would have been wiser to do these changes after the economy had recovered completely from the crisis. All efforts they say should have been concentrated on establishing conditions for a strong recovery. When combined with the lack of regulatory reforms to fix problems left behind from the crisis, and other failures, serious questions arise about how things will turn out in coming years. See Krugman- The Feeling of 1937, where Krugman takes this up from another angle, again with concerns about the future....

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Pearlstein says the major news stories of today all are about the same theme- of how the US was encouraged to live beyond its means by trading partners who prospered as this went on, with the tacit agreement of financial and political leadership in the US who raised no alarm about this. These stories are: the G-20 meeting in South Korea with the goal of rebalancing the world economy, the President's Deficit Commission Report recommending bold steps in changing the tax and spending policies of the US, the criticism of the Fed's decision on $600 billion of quantitative easing, and the renewed concerns about Ireland where severe cuts in public spending have failed to reverse a downward slide.These trading partners prospered by lending Americans the money to consume more than they produce. It was he says a wonderful arrangement while it lasted, because it helped bring millions out of poverty in Asia, while letting Americans enjoy a transitory period of a higher standard of living. This unsustainable arrangement converted the US from world's biggest creditor nation after World War II to the world's bigggest debtor nation. He credits Geithner for coming up with a more convincing and less confrontational way to correct the imbalances by setting limits on the deficits and surpluses of trading nations. He points out that the Chinese have barely budged on the issue of an undervalued currency, the world be damned. And the German and Chinese criticism rings hollow he says, as both countries are the main beneficiaries of the current system. The normal mechanism of correcting imbalances with a floating rate exchange system is hardly relevant, as it is incompatible with state run economy and strategy of export growth of China. Erskine Bowles and Alan Simpson have presented he says a bold deficit reduction plan that is credible, fair, economically sound. Even though it was received with the usual complacency and lack of awareness both in the media and in Congress. The simple reality after all the awfully complicated details and the painful implications is this: Americans have to consume less and produce more, and trading partners have to consume more and produce less. And this shift cannot be pushed into the future as our trading partners would like....

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Gerald Seib points to the damage done by the Sanders campaign on Hillary Clinton's prospects in a general election by increasing her negative perceptions in polls. He says both the front runners Trump and Clinton have gained by winning in their home state New York primary, but there is an arduous road ahead for Trump in gaining enough delegates, and for Clinton in regaining the trust of young Sanders supporters.

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Florida's House of Representatives passed a bill in March that reduces the number of weeks of unemployment benefits from the standard 26 weeks to 20 weeks. A similar law was passed in Michigan recently. Both states have unemployment rates exceeding 10%.

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The growing middle class in Brazil, new aspirations and the demand for better public services in transportation, education and healthcare. Alexandre Peppe, a 29 year old from the outlying parts of Sao Paulo, is a new member of the middle class, being the first to go to college in his family and finding a job in the state government. He was one of the protesters on the streets of Sao Paulo. The growing middle class has new hopes and aspirations that see serious shortcomings in the corruption of political leaders, neglect of public services such as transportation and overspending on the soccer stadiums for the FIFA and World Cup championships. Economic growth is slowing to about 1% in Brazil for 2013, creating new constraints for public spending just as demand for infrastructure and services is growing for the now large middle class.

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This commentary in the WSJ says it is essential that the U.S. get back manufacturing of all technological goods back to the U.S. or its allies. The dangers of depending on China or other countries not clearly allied with the U.S. is quite clear especially after the pandemic. The U.S. and European supply chains need to be completely remade, restructured, to avoid dependence on China or countries that are not allies. This is what supply chain renewal is about. Yet initiatives alone with hundreds of billions of dollars price tag re not the answer to the problem. What is needed are specific targeted actions such government direct assistance to key sectors to ensure U.S. technological advantages in worldwide competition. Giving a hole range of incentives and direct financial support to industries making everything from electronic and computer components to high tech parts that go to defense and civilian production.   The U.S educational component in this puzzle is university students in all high tech courses which should be kept for U.S. citizens or from key allied nations at American universities. The manufacturing base would mean securing incentives and aid to manufacturing industries, component by component, part by part, to secure American leadership and distinct advantage.  Job losses have to be reversed and industries relocated back to the U.S. And only in cases where it is advantageous to manufacture overseas to relocate in allied countries India, Japan or South Korea. U.S. labor has to be brought into the picture as a key participant in the national interest and given an important role. R& D efforts have to be developed component by component, technological part by part, and technology by technology, so that a systematic plan can be followed to secure American leadership for the rest of this century, is what experts including this one say is required today. ...

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An hour by hour, day by day account of how Thain and Fuld, two men at the top of Merrill and Lehman, handled the crisis facing their firm. Also an account of how both men acted in the year and the months before the climactic week when Lehman filed for bankruptcy and Merrill Thain arranged for Bank of America to buyout Merrill. How Thain did it and how Fuld failed to save his firm, their background and personalities offer a striking contrast to different approaches to the crisis one facing reality and taking actions one after the other palatable or not, and the other too complacent and missing opportunites to save the firm even after the collapse of Bear Stearns left Lehman exposed to the next crisis of confidence. For example while Lehman failed to raise capital and get rid of undesirable or toxic assets, Thain sold $31.1 billion in toxic assets to a investment company Lone Star for 22 cents on the dollar, even financing 75% of the sale. It raised $8.8 billion in a deal that diluted Merrill's shareholders severely, and announced Merrill would sell its stake in Bloomberg for $4.4 billion. Lehman and Merrill were both heavily leveraged. So are Morgan Stanley and Goldman Sachs at this time in a financial market that is coming down hard on these highly leveraged investment banks....

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The employment to population ratio in August 2011 was 58.2%, down from 62.7% in December 2007, according to the Labor Department. For men the ratio is 63.6%, down from 69.4% in 2007 when the recession began. About one percentage point of this is a result of a surge of retirements during this recession period.

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Anne Lowrey looks at the situation facing the 7.4 million Americans working parttime in March 2014 because they cannot find full time jobs. She cites Alan Krueger, former chairman of President Obama's Council of Economic Advisors, for research that shows only 1 of 10 workers who were counted as long-term jobless betwen 2008 and 2012 had a full time job a year later. In Nov 2013 7.2 million worked parttime because they could not find full time work showing an increase of 0.2 million by March 2014.

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Krugman sees Japanese style deflation as a plausible threat in 2011. He says that there is a very real possibility that the US would be seeing deflation in 2011.

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The Bernie Sanders 2016 U.S. presidential campaign is compared to the Howard Dean 2004 U.S. presidential campaign. Both are from Vermont- Sanders was Mayor of Burlington, Dean was governor of Vermont. Dean and Sanders draw many white, educated, affluent voters to their campaign rallies. Yet the situation in 2015 is different. Dean's major issue was his opposition to the Iraq war started in 2003. Sanders says his position is more class based, and calls for a revolution to help working class Americans gain upward mobility as wages remain stagnant, and educational opportunity restricted. The Democratic Party today is also different, with more ethnic voters, and 40% female.

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The political deadlock between U.S. Congress and the President and its impact on efforts to reduce the unemployment rate. The failure of the Obama administration and Congress to tackle the jobs issue, leaving too much of the burden of action on the Federal Reserve.

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A sad situation at the library system in San Jose with exorbitant late fees turning young people from low income families, immigrant children- the very group that needs to be integrated better into society with improved English language skills and a path to higher literacy and reading scores that can lead to college- turning these children away from libraries to avoid the late fee penalties. Parents with low incomes can ill afford the high late fees in the San Jose library system, and some residents keep a distance after being pursued by collection agencies, according to this report by Carol Pogash in the NYT. The situation is different in San Francisco which charges less in late fees, and with the openness of libraries in New York which counts more reading time in libraries as a way to pay off any late fees. The numbers are significant as this report shows 187,000 accounts at the San Jose library system, or 39 percent of all cardholders owe the library late fees. Compared to 50 cents a day for unreturned books at San Jose, San Francisco charges 10 cents a day for adults and no late charges for users under 17 years. Here the principal of Washington Elementary School in San Jose, Maria Arias Evans, and librarian Ms. Bourne, draw attention to a problem when 95 percent of the children attending the school qualify for free and reduced lunch programs. When America is seriously reflecting on the issue of lack upward mobility through education in 2016, better integration of immigrants into society, turning away young students from libraries is the last thing we need as a society and a nation. The digital and other divide in San Jose has never been so evident even from the outside. In March the German new weekly ran a story on San Jose and Silicon Valley satirically titled "Beyond Awesome."...

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Timothy Egan points to the huge gap between a T.R. in 1910 making the speech in Osawatomie, eastern Kansas, and Professor Obama making an election speech in 2011. T.R.'s was an election manifesto that brought up the issues of conservation, child labor, a plea for an income tax, call for worker protections, limits on corporate power and influence on the laws and direction of the country. The speech was made in 1910, after Taft had assumed the presidency with Roosevelt's backing, and would lead to T.R. running against Taft and Woodrow Wilson. Most of what T.R. advocated became part of the country's social and economic fabric, much of the work beginning with Theodore Roosevelt's two terms as president, and also pursued by Woodrow Wilson, the president elected in 1912. By contrast, in line with the timidity of today's politics, Obama's speech called for approving his nominee for consumer protection bureau chief, and continuance of tax cuts for the middle class. Egan calls it a curse of today's politics and national debate that no politician can set the course for revitalizing America the way T.R. did. Some of what T.R. said in Kansas that day is: "There can be no effective control of corporations while their political activity remains. To put an end to it will be neither a short nor an easy task, but it can be done." "The right to regulate the use of wealth in the public interest is universally admitted." Jackie Calmes covered the extensive ties of both candidates, Obama and McCain, to Fannie Mae and Freddie Mac, in her report for the New York Times, on September 9, 2008- "For 08' Rivals a Skein of Ties to Loan Giants." Paul Gigot, editorial page editor of the Wall Street Journal, who with his reporters did some of the difficult reporting on Fannie and Freddie, wrote in one of his columns with a note of pessimism, that he wasn't sure that either of the presidential candidates were interested in what was happening. ...

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Two Harvard economists, Lawrence Summers and Lant Pritchett, say China is likely to revert to the mean of average long term growth of developed countries after this spurt of growth is over. Growth is likely to slow to 6% by 2016, and revert to the mean of 2% for industrialized countries in the long term. Goldman Sachs banker Jim O'Neill, says the growth at a higher rate could be sustained because of urbanization. Summers does not rule out this outcome as he accepts a range of outcomes, with the most likely outcome being a reversion to the mean. The factors often cited for slowing growth are lower of productivity of capital as corruption and close connections determine where capital is allocated, misallocation of capital, large increases in credit in the economy since 2009 leading to bad debt in the financial system, aging society and demographics with increasing numbers of older people. Other reasons are the choices being made by Chinese leaders for slowing down to address the problems of air pollution and contamination of water supplies, inflation in housing prices, overdependence on exports, need to shift to increasing domestic consumer spending but unable to do this with the lack of spending power of large parts of the population because wealth is excessively concentrated in the upper ranks of society. The need to manage these forces ensuring some measure of stability depends on finding ways to reduce the growing concentration of wealth and power, in itself a challenge for the Communist Party elite. A combination of different factors with some still unknown factors are likely to play a part in this reversion to the mean for China, a situation encountered by every country so far in North America, Europe and Japan. This makes it even more important that each developing society structure its development around the most optimal goals with the least costs attached to the development....

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About 41% of Unilever's $53 billion in sales come from developing countries, up from 22% in 1990. In 2006 developing world sales increased by 8%, sales in Europe only 1%, and sales in the USA only 2.4%. This shows the growing significance of developing countries sales to Unilever. With head offices in Rotterdam and London, Unilever was formed from a 1930 merger of a Dutch food company and a British soap company. Unilever has been selling its bar soaps and cooking oils in the Dutch and British Empires, in countries like India, Indonesia, and South Africa since the 1880's. CEO Patrick Cescau is focussed on promoting products in fast growing regions of the world. The management structure is being changed to recruit new and nurture promising managers in countries like India and South Africa. These managers are being trained in western countries to learn new marketing methods, and are being asked to come up with their own new ideas for products from scratch for developing countries with low price points. Its not about adapting existing western products, but dreaming up new ones for low income shoppers. Its introducing a product called Cubitos- miniature bouillion cubes - tailored to low income shoppers in 25 developing markets and their tastes, for as little as 2 cents. The stakes are huge. Its competitors like P&G are doing this in Mexico. Nestle is expanding in Brazil with a new plant dedicated to shoppers making less than $10 a day, and setting up a distribution network to sell to small stores in shantytowns in Latin America. Unilever estimates are that 1.2 billion consumers will buy packaged goods for the first time in 2010, mostly all in the developing world. Detergent sales are soaring in places like India, as shoppers use powders to clean their clothes, moving up from bar soaps. Estimates are that each week 40,000 people in Asia use a washing machine for the first time. ...