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Krugman points out that the inflation adjusted wages of non-supervisory workers in the retail field in America has declined by 30% since 1973. He says there are no adverse effects on unemployment because workers in retail are not competing with workers in other countries as happens in manufacturing. They are also some of the lowest paid workers to begin with, and the numbers are not small. One estimate is that here are 30 million workers who would benefit from an increase in the minimum wage from the current level of $7.25 to $10.10. State by state comparisons provide proof of this as no evidence of losses in employment are to be seen when one state has raised the minimum wage and another neighboring state has not. Germany is facing a similiar problem of low paid temporary workers and a new coalition government is planning an increase in the minimum wage in 2014 as a response to increasing inequality and disparity in incomes developing in the last two decades.

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If the minimum wage in 1968 had kept up with inflation in the U.S. it would be $10.67 in 2013, says Ralph Nader. The federal rate for the minimum wage is $7.25 in 2013. Nader points out that president Obama's call for a federal rate of $9.00 per hour by 2016 falls well short of what it would be just to make up for inflation. This does not include productivity improvements since 1968 in which those making the minimum wage do not share, and which would make it much higher than $10.67.

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According to a report from the Southern Education Foundation about 51% of the students from pre-Kindergarden to 12th grade in the U.S. were eligible for the federal program of free and reduced price lunches, using an analysis of 2013 federal data. With the highest proportion of students in poverty concentrated in states in the southern and western U.S.. States all across the south, including Texas, show high concentrations approaching 60-70%, and states in the west such as California show about 50-60%. Midwestern states such as Illinois and Michigan show rates over 50%. The implications of this data are that these children from poor and sometimes chaotic backgrounds trail other children in educational development, are less likely to have educationally enriching activity, and more susceptible to dropping out or never attending college. Kent McGuire, president of the Southern Education Foundation says the map showing this is striking. He points to the disinclination to invest in young people today, compared to the focus on leadership in areas of creating opportunity and upward mobility in the decades of the 50's through the 80's. Michael Rebell of Teachers College at Columbia University, says reaching this point where a majority of public school children are from poor backgrounds has happened sooner, and the trend has accelerated over time. ...

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Even though E-Bay executive Meg Whitman has outspent Jerry Brown by $130 million, much of it her own money, she trails Brown by 8 percentage points in an Oct 20 survey by nonpartisan Public Policy Institute of California. That survey showed Brown leading 44% to 36%. She had a hard line stance on illegal immigration in her ads for the primaries, which changed later in the campaign to attract Latino voters. Her campaign crafted by consultants focussed on three themes- cut government spending, create jobs, and fix education. Brown is a former Governor of the state and current attorney general. Experts attribute the lagging Whitman campaign to voters leery of 2 kinds of politicians- the first is the career politician and the second is longtime corporate executives. In other polls Senator Barbara Boxer is leading Ms Fiorina, former HP executive, 43% to 38%. Because of last minute surges in the polls, a lead of 8 points or more is considered necessary for the governor's campaign, for a candidate to win. Another factor is that Governor Schwarznegger came in with no political experience, and was beset by the state's fiscal troubles, with his poll ratings now at 28%....

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Damian Paletta of the Washington Post says that credit goes to Gary Cohn a former Goldman Sachs president, and head of the president's National Economic Council for the way he has quietly built up a group of leading experts on major initiatives of the Trump administration such as tax reform, infrastructure plans. Compared to the infighting and other problems in the first 100 days of the Trump presidency, Cohn is credited with building a core of ideas and experts that bring Trump more to the centre and with the prospect of winning Democratic party support. He has helped shift the president to set up a more balanced approach, less confrontational with China and not calling China a currency manipulator, getting support for the Export Import Bank, and more receptive to the Federal Reserve led by Janet Yellen. This report says an alliance of moderates is centering around Adviser Jared Kushner, Cohn, and in other reports Tillerson in foreign affairs is seen as being part of this group. On NAFTA the president has moved to a less confrontational approach with Mexico, which has helped the Mexican peso recover and improved prospects for the Mexican economy.  On infrastructure new ideas to find financing are needed and a plan to tax carbon emissions is intended to draw Democratic support as well as provide some of the funding. About $200 billion in taxpayer money and $800 billion from private investors is being discussed at the National Economic Council. This report says Cohn suffered from dyslexia in childhood, graduated from American University, and joined Goldman Sachs in an unconventional way. He shares a passion for deal making with president Trump, yet at the same time values the views of experts he has brought to formulate concrete plans for the way ahead. About 25 experts with extensive experience in government helped put together new tax changes, infrastructure plans, and international trade deal plans. His predecessor at the NEC, Gene Sperling, gives him credit for quietly pulling together the experts and doing the planning that the Trump administration now depends on. ...

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U.S. president Trump's 2017 budget is an effort to reshape spending priorities by the Republican party. Apart from Medicare and Social Security all other entitlement programs from the days of Lyndon Johnson's Great Society are subject to cuts. Deep cuts to Medicaid and food stamps, including introducing work requirements. The philosophy behind it is that compassion will now be measured not by how large these programs are but by how much the government can get people "off these programs and back in charge of their lives,"  according to Budget Director Mulvaney.  The cuts are $616 billion to Medicaid and Children's Health programs, $193 billion in cuts to Food Stamps, $143 billion in student loans, $72 billion in disability programs. The overhaul of the Affordable Health Care Act is part of this change. The reallocation would put more money into infrastructure for $200 billion, and in tax cuts, $19 billion in a parental leave program and $29 billion for veterans programs, plus added spending on the military. William Hoagland of the Bipartisan Policy Center, a Republican who worked on budget issues says it will be politically difficult as the cuts to lower income groups come with tax cuts for small businesses and higher income individuals.  Beyond the policy priorities there is an area where both Republicans and Democrats are skeptical of the budget. This is how it impacts the U.S. debt. Under Congressional Budget Office estimates the U.S. debt as a percentage of GDP which rose to about 75% after the Great Recession starting in 2008, is projected to grow to about 85%. In sharp contrast the Trump administration estimates of the Office of Management and Budget are for it to drop to 65% based on rosier estimates of 2% inflation, 3% growth for the decade ahead. Experts say this is unlikely once the Fed raises interest rates and the unemployment rate currently at 4.4% leads to rising inflation, undercutting growth which has remained below 2% for a long period. These concerns are also voiced by Hilsenrath in the WSJ based on the experience of other countries such a Britain that cut corporate taxes without seeing an uptick in economic growth. ...

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In this interview with Gerald Seib of the WSJ, U.S. president Obama responds to criticism within his party as he pushes for the Trans Pacific Partnership free trade agreement with Japan and other countries in Latin America and Asia. European nations and India have joined the Asian Infrastructure Investment Bank setup by China, creating pressure for the U.S. to respond to China's influence in the region. The interview shows president Obama taking the criticism from inside the Democratic party personally about his lack of concern for middle class and working class families during his six and half years in office.

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President Obama's proposal on Dec. 17, 2012, in the fiscal cliff negotiations sets the figure at which Bush era tax cuts are permandently extended at $400,000 instead of the $250,000 in earlier proposals. Speaker Boehner's Republican proposal was for a figure of $1 million. The $400,000 proposal would mean that the top tax bracket of 35% would increase to 39.6%. Currently the tax rate increases to 35% from 33% at the cutoff point of $388,500. The White House plan now cuts spending by $1.22 trillion over 10 years. $800 billion comes from cuts to programs, with half of these cuts in federal health care programs, $200 billion in programs like farm price supports, $100 billion in military spending, and $100 billion in other domestic programs over which Congress has control. The White House proposal also supports additional spending on infrastructure, extension of expiring unemployment benefits, protection of "vulnerable populations" such as the disabled and wounded veterans on Supplemental Social Security benefits in inflation calculations, and permanently stop expansion of the alternative minimum tax affecting the middle class. On business investment the president's proposal would make permanent the credit for corporate research and development....

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The Congressional Budget Office report in 2011 shows after tax resource flow that a family has to pay for consumption, a better approach to measuring the growth in incomes since 1970 including government help to lower income people and gains in the stock market for upper class Americans. This report shows after tax resource flow for the top 1% in the U.S. tripled from 1970 to 2011. For the middle fifth of the distribution families experienced real net income gains of 36 percent, and the bottom fifth of the distribution real net income gain of 50 percent.This suggests gains of about 10 percent a year if averaged over 30 years for the top 1 percent compared to 1% a year for the middle fifth and 1.5% for the bottom fifth. The report was done in 2011 and this could skew the results. Between 2011 and 2015 the stock market recovered and this would suggest a much higher gain for the top 1% of incomes and the top 10%, while also providing improvement in incomes for the middle fifth and the bottom fifth as unemployment decreased. Working class and minimum wage slowly recovered, and interest income on savings extremely low, with large student and other household debt, so that even at 10-12% gains per year for the top 1%, and 1-2% for the middle fifth of the distribution and 1.5-2% for the bottom fifth the last three decades have not been good for working class and middle income Americans compared to the the period 1950-1970 early postwar period recovery....

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Whitacre is basically blunt about his mission from the Obama adminstration when he attends meetings at the Tech Center in Warren or at the Westin Detroit Airport hotel and the San Antonio club: get GM growing again, he wants to see market share north of 20%. The Obama administration, Bloom and others are clear about the government wanting to get its $50 billion for the USA and $9 billion for Canada back as early as possible. He has told GM's Henderson he will be replaced it things don't change fast enough, and he wants product out faster, 2 year development times for new cars instead of three years today. The same message has been passed on to middle and upper middle managers in diagonal meetings. And what are readers commenting on this- and readers views matter a lot because GM has a wrong perception out there that hurts sales- a third of twelve readers said they cannot understand why young people are not moved up to run the company especially from design and engineering, one mentions Whitacre's age 70 years. A third just don't think much will change, and one says he will buy aFord. And a third says Whitacre is the guy who can shake things up and he should. ...

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With Whitacre in charge at GM there is a change of style and substance that just flows from who the man is. He is a no-nonsense guy, who once told a colleague from his days at Southwestern Bell, that God gave us two eyes and one mouth for the right reason so we should use it in that proportion. He is quite matter of fact about approaching the probems at GM right from the beginning. From those early meetings at the Westin airport hotel in Detroit, where he would tell GM executives and Henderson that if things did not happen the way they should and quickly he would find the right people. After there was a lot of soul searching about Henderson's decision to sell Opel- and three directors with private equity background decided it was bad for GM, that GM needed Opel for its compact and midsize car engineering and sales volume- Henderson was replaced as CEO. The decision was reversed. Within 3 months of Henderson's departure four other executives were let go, 20 more were reassigned and seven outsiders were brought in to fill top jobs. Lutz was marginalized. Reuss in his forties was placed in charge of N. America. The metrics were simplified from Wagoner's days to six: market share, revenue, operating profit, cash flow, quality, and customer satisfaction. His approach to get managers who make decisions fast and correct mistakes speedily. Vice chairman and CFO, Christopher Liddell, is from Microsoft and joined in January. Liddell points out that 12 of the 13 person GM executive committee are either new to the auto industry or outsiders. And the seniormost Whitacre and Liddell, are new to the auto industry and outsiders, so Whitacre can point out that GM has run the business in a more complicated way than it needs to be. The big changes are cultural. And making these changes for a company the size of GM and with the trauma that happened at GM with the speedy decline, required someone with the experience Whitacre gained in tackling the problems he faced at Southwesten Bell and the new AT&T, with its changing culture. The tough down-to-earth nature of the guy, with no affectations or layers to his personality whatsoever, proved an asset at the new AT&T and now at GM. Other decisions he has made at GM, are some strategic ones like bringing down incentives to sell cars, the latest being letting market share drop in March in the face of Toyota's heavy use of incentives to recover from the recall crisis, but sticking to reducing the incentive dollars by $1200 to $3500 per car. This made it possible to achieve sales goals. And some tactical but of great significance, from a common sense approach to GM advertising with his remark "I'm sick of Howie Long." Pitchman Long was a football player, and what Whitacre insisted on was showing off GM's best models and features to blow the competition, like the "May the Best Car Win," campaign. That many of GM's ads didn't focus on the cars and didn't make any sense, like little Cadillacs flying out of a birdhouse, makes this truly incredible to an outsider. Other things Whitacre brings are a change in his expectations, and his overall demeanor. This impatience may be a good thing for GM especially with the capital investment in new models, plant investment and better decisionmaking, and commonsense approach, to back it up. In the car industry it can't hurt for the top guy to look at the car clay models and ask why they can't be brought to market in 12 months. It gets people thinking differently. Asking a Cadillac dealer he knows in San Antonio why they should'nt be selling twice as many Cadillacs if the marketing was better. It helps when the top guy can visit a plant and have "diagonal slice meetigs" with plant staff, workers and UAW people, to talk about things in sweat shirt and jeans with no airs about yourself whatsoever, and to follow this up with a repeat meeting some months later and announce a $136 million investment, as he did with the Fairfax plant in Kansas....

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Krugman looks at the economies of indusrialized countries in 2014-2015. He points to the errors made by the Riksbank in Sweden to increase interest rates prematurely when a recovery was not on firm ground, ignoring the advice of deputy governor Lars Svensson. Sweden now faces the prospect of little growth and deflationary tendencies. He compares the decision of the ECB to raise rates in 2011 with Japan's decision to prematurely raise rates. The austerity policies in the EU driven by Germany and the lack of political consensus in the U.S., are faulted for making the situation worse when compared to Japan's poor handling of the situation. He says fiscal policy did not do enough in Japan to create growth, in the EU he says austerity policies were actually destructive of growth.

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President Obama proposes changes in taxes to fund programs to aid students such as free 2 years of community college, aid for student loans, and financial help for middle class families. Senate Majority Leader McConnell says the proposals to raise income taxes for high income Americans with $320 billion in new revenues over 10 years, reduced prospects for changes in the tax system. He said the Obama proposals were designed " to excite the base but not designed to pass." Obama says "the shadow of crisis has passed," and calls for "middle class economics," and improving incomes for anyone making the effort. The call comes as inequality widened during the long recession and some of the Obama administration's policies such as on homeowner foreclosure, and lack of focus on unemployment during the first term, may have actually worsened inequality. The call also comes late in the second term in Jan 2015- with presidential elections in 2016- after the Republicans gain control of both Houses of Congress, which is why Republicans dismiss this as mere political talking points for the base....

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Days after firing Henderson, and leaving Lutz with an advisory role with no reports, Whitacre who is now the CEO has moved to bring younger managers in important positions. Mark Reuss assumes the role of head of the North American operations. One year ago he was running the Australian operations. He was only recently in charge of engineering at GM. The Board is pushing for these changes. Whitacre says the GM culture and tendency for top managers not to bring in younger managers to run things has stifled talented younger people at the company. Susan Docherty was given additional responsibilities of marketing. Some of these moves were long overdue. The old echelons simply stayed on for too long risking the jobs of tens of thousands of GM workers and taking the company to the brink of disaster.