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Raghuram Rajan, Professor of Finance at the Graduate School of Business, University of Chicago, was appointed chief economist at the IMF in 2003. He presented a paper, titled "Has Financial Development Made the World Riskier," at the annual Jackson Hole meeting of economists and central bankers for 2005. Rajan says he had planned to write about how financial developments during Greenspan's 18 year old tenure had made things safer, but the more he looked the more evidence came up that the risk reward relationships in a normal functioning financial market had been terribly distorted. Market participants were being rewarded for wins but were not being asked to take on commensurate risks and impacts on their bonuses and rewards. He also cautioned about the use of credit default swaps which acted as insurance against bond defaults, and said insurers were generating big returns on this but with the appearance of little risk- even though the pain could be immense in a default. Banks were carrying credit securties on their books that posed risks to the whole financial system if things went wrong with the credit securities. Reaction from the gathering was unfavorable. Lawrence Summers, a former Treasury Secretary said, "the basic, slightly lead eyed premise of the paper was misguided."...

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This WSJ editorial points out that the lack of action from the Obama administration has led to the current situation in the Middle East with Russian intervention, the wave of refugees from Syria, and the increasing sectarian conflict. It cites from president Obama's address to the UN General Assembly that "the nations of the world cannot return to the old ways of conflict and coercion," yet failing to take action in the Middle East to prevent this from happening.

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Arango takes a look back at the history of Iraq- the 400 years of Ottoman rule and the role of Gertrude Bell in defining Iraq's current borders under British rule. Saddam Hussein, Maliki and Islamic State pitted Sunnis against Shiites and Sunnis against Kurds for the last 40 years, leavig a divided country. The current effort to put Iraq together as a country with different faiths and communities under prime minister Abadi will take many years after so much bloodshed. Northern Ireland shows that it can be done after much pain and loss, when all realize putting the past behind is the only way forward.

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Van Dam says its not that great being a worker in the U.S. because it is hard for the unemployed resulting from competing with workers in other countries with lower wages, and for those who are unemployed harder because worker collective bargaining is weakened over 3 decades. He cites a 296 page OECD report showing very little government support for unemployed and at risk American workers. It says this has contributed to higher income inequality and larger share of lower income people than almost any other advanced a nation. Only Spain and Greece are shown as having more households earning less than half the median income- showing large numbers of people are poor or close to being poor. In the U.S. an average of 1 in 5 lose their jobs each year, and 23% of workers 15 to 64 are in their job less than a year in 2016. The job churn hurts workers because of firing and layoffs being frequent, more than is healthy for a economy. The U.S. and Mexico are the only two countries not requiring advance notice before firings. And fewer than half of workers find a job within a year in the U.S. Two in three families with a displaced worker fall in poverty for some time. Unemployed workers with typically 26 weeks support get less support than any other country in the study. Only 12% of workers in U.S. are covered by collective bargaining. ...

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This Journal editorial looks into the jobs numbers for September 2012 that showed unemployment decreasing to 7.8% according to the household survey. By taking the numbers as they are in the Labor Dept. surveys and setting aside skepticism it provides useful insights into the condition of the labor market. It cites the reason for some of the skepticism about the numbers- the 873,000 jump in employment shown by the household survey which looks at 60,000 households. It is the largest increase in employment for one month in 30 years says the Journal. The household survey finds that 582,000 of the 873,000 jobs are "part-time for economic reasons" in the survey's words. The number of part-time workers for economic reasons went up from 7.7 million in March 2012 to 8.6 million in September 2012. This also returns the focus on U-6 the measure of unemployment that Fed chairman Bernanke and experts looks at. This has remained the same for Sept. at 14.7% and includes the number of people working part-time who cannot find full time work. Another useful statistic for insight into the labor market is the decline in household incomes. Studies of Census data show a $4019 decline in median household income from Jan 2009 to June 2012. And the long term unemployed represent about 40.7% of the employed in recent data, an unusually high number that worries Mr. Bernanke. By looking at the broader picture one can get a better sense of the labor market....

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Barry Ritholtz lists the causes of the financial crisis, He says New York Mayor Bloomberg's exoneration of the financial industry is simply false- what he calls "the Big Lie"- even though Congress, regulators and the Greenspan Fed acted irresponsibly and created favorable conditions for the actions of the financial industry.

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U.S. president Obama says at a rally in Philadelphia that Donald Trump is a fradulent champion of the working class, saying that Trump is simply exploiting the populist mood, that for 70 years he has shown no concern for working class people. Obama told the crowd he understood the public's mood for change and that he himself had benefitted from it. Yet he said that it did not add up. Obama said: "This guy is suddenly going to be your champion? I mean, he spent most of his life trying to stay as far away from working people as he could, and now this guy is going to be the champion of the working people. Huh." "I mean he wasn't going to let you in his golf course. He wasn't going to let you buy in his condo. And now suddenly this guy is going to be your champion." 

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A report from the U.S. Federal Reserve on the impact of the financial crisis of 2008-2009 on the wealth of American households. Between 2007 and 2010 says the report the median net worth of American families went down by 39%, from $126,400 in 2007 to $77,300 in 2010. This had the result of putting Americans back to the level of net worth in 1992. Much of the loss in net worth was from asset value reductions. The median value of stock market based retirement accounts decreased by 7% to $44,000. The biggest drop was in housing values- falling by 42% to $55,000 in the three years. Americans are working down their debt- a quarter of families are debt free, credit card balances declined 16% to $2600 from $3100 from the period 2007 to 2010 of the report. Yet the median level of family debt remains the same as more families support their kids education by taking out college loans. Median income fell about 8% to $45,800 in 2010, with income losses especially large in the manufacturing industries as the U.S. manufacturing sector worked to improve competitiveness. Other factors supplement this picture. The burden of college loans increased to over $1 trillion for middle and working class families. With the burden of college debt young people were more likely to delay buying first homes, indefinitely dealying recovery in the housing market. Seniors on retirement see interest income from savings negligible with low interest rates and higher risk in a volatile stock market. ...

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John Bolton looks at the continual dithering behaviour of the U.S. president in the Middle East- Iran, Libya, Syria, Iraq in sequence- and provides some insights into the president's behaviour. He says it comes from Obama's distrust of the U.S. role in the world as a positive factor, and a deterministic view of the "arc of history" bending towards outcomes he finds ideologically acceptable. This coincides with a different public perception of America's role in the world, not so much of mistrust and skepticism, as of indifference and focus back on domestic issues following the event of the first war in Iraq and of the 2008-2009 financial crisis. The two are different in nature as the public including women may not share the ideological frame of mind of the president that the U.S. is not overall a serious positive factor in the world through the presidencies of TR, Wilson, FDR, Truman, Ike, to Kennedy, Reagan and Clinton, from the Russo-Japanese war, through the First and Second World War, the Berlin Airlift and the Korean War, to the Balkan conflict. Bolton writes at a time when the two perceptions are about to diverge as the U.S. returns to its normal role of positive and constructive engagement with the world....

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WSJ's Trofimov talks to some of the 2.5 million refugees and displaced people in the sectarian conflict in Iraq in 2015. He finds a mood of despair and resignation to a permanent partition of the country following sectarian conflict between Shiites and Sunnis. The situation is being dictated by the facts on the ground as the refugees see little prospect of returning to their homes, and the different regions controlled by Sunni, Shiite and Kurdish forces with borders.

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Izzo looks at the diverging picture presented by two Labor Department surveys of unemployment in the U.S. for July 2012- an increase of 163,000 jobs or 195,000 fewer people working. One, the Household Survey is based on survey of individual households counts people and the other the Establishment Survey based on a survey of employers counts jobs. If one person holds two jobs he would be counted twice in the Establishment Survey and once in the Household Survey. If a person is a unincorporated self employed person, a family employee who isn't paid, a farm worker who is employed but not paid he is counted in the Household Survey, but left out in the Establishment Survey. The Labor Department prepares a third measure of the number of people working by adjusting for multple jobholders and for workers not counted in the survey of businesses. By this third measure the U.S. economy added 108,000 jobs in July, which is far less than the 163,000 jobs shown added in the Establishment Survey. Because of the increase in parttime work it is likely that more people are doing multiple jobs which may explain some of this difference. Another reason could be the severe drought in the U.S. that may be reducing the opportunities for work for freelance construction maintenance and day laborers because of restrictions on water use. This shows that it takes several months of data to get some sense of where unemployment is headed, adjusting the numbers for unusual events or weather, and looking behind the numbers to the sectors generating jobs. In the first quarter of 2012 more jobs were generated in the U.S. because of a mild winter, followed by fewer jobs in the second quarter, which required looking at the two quarters together to get a better picture. Adjusting for the long term unemployed who have quit looking is also necessary to get a correct reading of U.S. unemployment levels....

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CNN reporter Cassie Spodak provides this exceptional report into the minds of New Hampshire Democratic voters who gave Bernie Sanders a 22 percent lead in the New Hampshire Democratic primary over Hillary Clinton. In October 2016 Hillary Clinton has the support of Bernie Sanders against Donald Trump in the U.S. presidential election. She described it as "100 percent support" in television debate. Sanders has appeared with Clinton twice, and campaigned 4 times in New Hampshire, and continually across the country. Younger New Hampshire voters still long for Sanders as their favored candidate. Older voters and some who have been motivated by Sanders to run for local office see the shaping of the Democratic Party platform as a victory for Sanders. Key planks of Sanders, taxes on the wealthy and higher incomes to pay for student tuition, infrastructure, and helping working class families, are now key parts of the Democratic platform. These voters see this as a pragmatic step and are enthusiastic in their support for Hillary Clinton. Overall Clinton now has 87 percent of Democratic voter support in New Hampshire according to a WMUR/UNH poll in mid October 2016, and she is doing well with millenials and independents nationally, a critical bloc of voters for Clinton to show nationwide support. One member of the steering committee for Sanders in New Hampshire named Dudley Dudley, reflects the opinion that has shifted the party to emerge united during and even more so in the final months of the presidential campaign of 2016- she tells the CNN reporter Spodak that she supports Hillary because "of the way she has grown, and stretched," and the way Clinton and Sanders are now campaigning together and working together. Both Clinton and Sanders deserve credit for their extraordinary ability to grow during their campaigns and during the party's way to shape the way forward. ...

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People from Denmark are known for fluency in English, and are some of the best non-native speakers of the English language. About 38 percent of courses at Danish universities are in English. Yet debate is shifting to the inflluence of immigrants in society as "pizza-Dansk" or "pizza-Danish" is spoken by Middle East immigrants at pizzerias. One Danish member of parliament from the DF Party is suggesting the government prevent the spread of "pizza-Dansk" and help preserve the Danish language spoken by 6 million people in the country. It is reflection of the anti-immigrant mood in Sweden, Denmark and other European countries, where parliamentary elections have given parties opposed to immigration a larger number of seats.

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This editorial in the Wshington Post is sharply critical of the Obama administration's policies of inaction in Syria and Iraq. It says president Obama and his administration will have to answer for the policies to the American people and the people of the Middle East and Europe.

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This WSJ editorial says president Obama's inaction, including the smaller step of not putting in place a safe zone in Syria, comes at a price for Liberals. The recent action by Governors in Michigan and other states turning down Syrian refugees, it says is one of the moral consequences of Obama's policies. For Liberals it says a policy of inaction and turning America's back to the needs of ordinary Syrians during the Arab Spring is not neutral, it also has consequences. The consequences for Liberals is the steady stream of refugees to Europe, and the greater intolerance in western societies as the safe havens created by these policies in the Middle East lead to terrorist actions in Europe or the U.S. In short doing little or nothing carries risks for the kind of society liberals want to see. Through developing policy in response to the Bush Administration's policies the Obama administration makes a series of errors of its own that compromise liberal values, including the collapse of the Arab Spring without American and western support, and the creation of a huge refugee crisis in Syria, Iraq, with a spillover to Jordan and Turkey, and further spillover to Europe. Liberals in Europe also face a similiar situation, including Liberals in France....

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Working America, an arm of the U.S. trade union the AFL-CIO, conducted conversations with 350,000 voters in 17 U.S. states. Here a representative of Working America, says the overwhelming response to the question "does it make a difference whether Democrats or Republicans are in power for my well being," is reflected in one of the responses- "does it even matter?"

The suggested approach here is for Democrats in particular who have represented working class voters in the past, to start with a fresh approach by creating new conversations with working class Americans.

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The European Union Commission says Ireland must recover 13 billion euros in back taxes for giving tax preferences to Apple that are against EU rules. The EU Commission says Ireland allowed Apple to pay a corporate tax rate of 1% on its European profits in 2003, and .005% in 2014. The EU Commissioner says the use of Ireland as the place where Apple pays taxes on operations in Europe has no base in reality, as most profits are earned in other countries outside Ireland. Taxable profits of Apple "did not correspond to economic reality," according to Ms. Vestager, the EU Commissioner.  In the current environment where political upheaval is unsettling the democratic process in the U.S., Britain, Spain, France and Italy, as well as in Brazil and other countries in the developing world- because of deep recessions, and efforts to cut the deficits with deep cuts in state spending including in education and healthcare, basic services- the moves by companies to reduce taxes to these absurdly low levels such as .005% when other companies in the EU are paying 12.5%, is becoming increasingly unpopular. As pointed out in this BBC News article this sounds like the way Carnegie, Rockefeller and Vanderbilt operated during the late 19th century, and were seen as operating in a manner that was above the law. Janet Yellen pointed out at a Boston Fed Conference on inequality in Oct 2014 that the bottom half of the distribution or 62 million households in the U.S. in 2013, had a net worth of about $10,000, One quarter of these households had a net worth of zero dollars. The working class and blue collar workers in the U.S. provide much of the support at Trump rallies. Younger college educated people support Sanders, because of the situation of the working and middle class in the U.S., and a similar situation exists in Europe. It is for the sake of the democratic process and delivering services in education, healthcare, and other basic areas to all, that companies small and large need to pay their fair share of taxes, regardless of size, influence, or technological advantages. Today this is is seen by most leaders who draw public support as the right way forward for the U.S., Latin America, Europe and Asian countries, including proper allocation of resources to best serve the needs of working people. For example the 13 billion euros is equal to all of Ireland's healthcare budget, and 66% of its social welfare budget.    ...

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Some of the crude rhetoric at Donald Trump rallies, and use of coarse language, according to the NYT. Working class and older Americans show their anger at a system that appears to have left them behind with slogans, stickers, T-Shirts. The idea of the wall figures in much of this and shows that the wall has become not jut about Mexico but a metaphor that captures this anger, that reflects this anger. Another aspect of the 2016 campaign is that those most vulnerable and most in need of help have not sought the comfort of knowing about programs to improve middle class and working class wages, incomes, to build infrastructure, create jobs, stop companies from shifting jobs overseas, plans for improving accesss to health care and education, to ask for specifics and delivery. This is the supreme irony of the 2016 election campaign that not enough attention is going to what will be done for the middle and working class, and what specifics will be delivered, in what time frame- which is essential for restoring the condition of the American middle and working class to where it was in the 2 decades after the Second World War. ...

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Harold Meyerson poses some difficult questions for those who like Mitt Romney say America's choice is between the merit based society Romney sees and the "European social democratic vision." In Romney's words- "a merit-based opportunity society- an American-style society- where people earn their rewards based on their education, their work, their willingness to take risks and their dreams." Meyerson cites several studies to show that European societies today are more dynamic on several measures of performance than America's. In intergenerational mobility he cites a Brookings Institution study by Julia Isaacs, that shows incomes are three times more likely to remain the same in America compared to Denmark, Norway and Finland, and one and a half times more frequently than in Germany. Another measure evident from Germany's experience is the degree of union-company-government cooperation to worker retraining, corporate boards that have representatives of workers and management, the "kurzarbeit" program of retaining employees to smooth out impact of cyclical swings in the economy on workers and companies, and worker's willingness to show restraint on wages especially because management wages are not way out of line as in America. Meyerson reminds readers that the U.S. had a more merit based society in terms of upward intergenerational mobility, distribution of rewards of work between workers in manufacturing and service sectors and management, educational mobility with the G.I. bill, in the first 30 years after the Second World War. In a separate article in the Washington Post on Jan. 5, 2012, David Ignatius poses questions about the effects of globalization in shrivelling the middle class. The access to lower wage manufacturing in China, India, Mexico, and other countries, and lowering of wages in the U.S. to be competitive, was part of globalization. The two tier wage structure in the U.S. automobile industry is one example, making middle class wages a thing of the past. Globalization opened up new markets for American companies. Yet many of the gains in employment were made in emerging markets, as the example of GM's expansion in China showed, with automobile manufacturing expansion inside China....