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American manufacturers are importing more of the parts that go into each product. According to Susan Houseman, a senior economist at the W.E. Upjohn Institute in Kalamazoo, Michigan, the imported portion for these parts is up to 25% from 17%. Even the Bureau of Economic Analysis figure of the share of GDP coming from manufacturing is overstated, says Houseman. That figure was 11.2% for 2009, but is closer to 10.5% if all the imported components are included instead of being counted as domestically made. This is down from 14.2% ten years ago, and about 30% in the 1950's. There is deep concern that the manufacturing decline has weakened America. Houseman says that one cannot separate manufacturing from innovation, and she asks if America can continue to be strong in R&D with a shrunken manufacturing base. James Jordan of the Interstate Maglev project, says Maglev- which uses special magnets to levitate and propel high-speed trains- was invented in the United States. Today equipment for that technology is manufactured and used in Japan, and innovation in high speed trains is taking place in Japan and Germany. The decline in manufacturing is shockingly large. From 1979 employment in manufacturing went down by 8.1 million to 11.6 million, with the largest drop occurring in the last ten years. With it America is losing something significant- all the knowhow and skills that go into making things. Today the airplane wings for several Boeing airliners are made in Japan and shipped here. In a not too distant past these wings would have been built here, and workers with the knowhow and skills for these critical components were part of Boeing's workforce....

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The auto industry has only itself to blame for shaping and sustaining the retrograde world it finds itself in, says Politico magazine. GM supported the Trump administration's efforts to push back the fuel efficiency rules setup earlier. With Chrysler and Ford it went a step further in getting out of cars altogether and having a line of SUV's and other vehicles. This step is seen as retrograde and a result of several possible lines of thought among the car executives in Detroit. One is that the SUV higher profits would provide a cushion as this cycle in the industry's revival comes to a close. Another is that in a situation where GM's shares are depressed while Tesla with no profits is seeing a higher valuation, this could increase its share price. This has not happened and President Trump is as critical of the layoffs of 15% and closure of plants in GM's announcement, as Democratic senator Bernie Sanders is. Still another is that GM needs to prepare for all the tech changes happening in driverless cars, new tech advances, that a move like this would better prepare itself for the new world of transportation. This remains nebulous however and GM has failed to take account of the fact that only a short time ago about half of all car buyers were still not buying SUV's. Gas prices are volatile and will continue to be so that strategy cannot be based on cheap gas prices and SUV profits.    ...

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US president Biden's multi-trillion dollar spending plans for infrastructure, climate change plans, education and healthcare, are based on a changing perception about the effectiveness of the public sector spending initiatives. The Reagan period idea that the public sector is not as efficient as the private sector that lingered through the Clinton, Bush and Obama, Trump administrations is no longer accepted. After the pandemic another perception is taking root that when it comes to health infrastructure the government has a leading and indispensable role to play. Gone are the doubts about this that hung like a cloud over the nation's plans for infrastructure in health, education and supply channels. Following the global competition with China a new factor is also playing its part. The need for government to play an active role in trade, in protecting technological resources, and in supporting US technological firms in competition with other countries. There is a new perception that the government should be determined to play this role. In the effort to be self-reliant after the pandemic the government is expected to play a role in redesigning the supply channels and providing the direction and incentives for supply channels worldwide that give America a competitive advantage and less dependence on other nations. ...

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A pessimistic picture of Yahoo's value. Gottfried says the company has failed to to create core value in its products and to increase growth. The moves to mobile, video, native and social have largely failed. Alibaba's stock has declined 44% in 2015, and Yahoo's stake is valued in line with Alibaba and at a widening discount since its IPO in September 2015. There is the additional uncertainty over whether the IRS will treat a spinoff of Yahoo's stake in Alibaba as tax free.

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Carlos Ghosn of Nissan Renault is under criticism for trying to manage two companies at the same time and fills positions for head of North American operations, and the CFO position at Nissan. Still there is skepticism that Ghosn may be trying to do too much himself. Is Ghosn underestimating the intense competition inthe American market as the Detroit manufacturers gear up and Toyota, Honda and the Koreans and Germans also push ahead. The international market and the market in Chiona and India also is very competitive. In Europe Renault is losing market share already and Toyota and Fiat are increasing market share. Renault's sales are down 9% for the first half and its model lineup is aging.just as Fiat is coming up with new models.

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Reliance's shares for its new IPO in the power sector fell 17% below the opening price of 450 ruppees. Instead of doubling as investors expected the shares closed at 372 ruppees for the power generation startup company of the Anil Ambani Reliance Group. Reliance raised $3 billion for the new company. Reliance sold 260 million shares to small retail investors for a 10.1 % stake in the company in less than 1 minute in mid Jan 2008. It closed for more than 70 times the the number of share offered. But the reliance name is no guarantee of rising share prices as new economic winds blow over Asia from the US credit and mortgage crisis, creating global effects of downturn in the economy.

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Said, Kent and Faucon describe the meetings and maneouvring between oil producers that led to the decision to not cut production at the November 2014 OPEC meetings in Vienna. This led to a drop in Brent crude down to below $70 by Dec. 2014, with Russia, Iran and Venezuela losing, countries such as India, and motorists benefitting from lower oil prices.

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Greece's new Syriza government plans to put a bill through parliament on the minimum wage as one of its first steps. It will reverse plans to sell the government's 67% stake in the port of Piraeus, and a planned sale of the state controlled utility will be held back. Sigmar Gabriel, the Social Democratic leader in the coalition government in Germany says Germany is ready to show solidarity with the Greek people, and says the new government has the opportunity to take better action against corruption and tax evasion in Greece than previous governments. Previous governments including governments of the Pasok and New Democracy parties which make up the ruling political elite in Greece failed to make the serious changes in tax collection needed in Greece whereby the upper class in Greece pay the fair amount of taxes due. The IMF's Lagarde also emphasized the tax collection, and separated it from austerity issues where most of European and American opinion believes growth oriented policies are the right path....

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Brent crude drops below $60 by Dec. 15, 2014.

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Now that finance ministries around the world are trying to save their economies with trillions of dollars in aid packages their finances are stretched to the limit. The so called digital tax is not really a digital tax. And efforts to recover lost tax revenues in Europe are being opposed by the U.S. because tax levies by France go only to France, not the U.S. The U.S. Treasury or U.S. government or the American people would not turn down tax revenues that it normally gets when its finances are stretched to the limit with trillions of dollars for cornavirus leaving little for crumbling infrastructure and essential public health services, other services that determine quality of life in America.  This Washington Post report shows that there is greater awareness that the right approach is to pay taxes based on where revenues are located and by the number of users in each country. But the problem goes deeper than that. The coronavirus changes the entire perspective and take this back to roots. Companies pay taxes because it is the right thing to do. In Japan Panasonic's founder Matsushita felt that it was a national duty to pay its share of taxes as it too was sharing in the benefits provided by society- in the health, sanitation, education and transportation, parks, and hundreds of services provided by government. Once this is seen as dispensable or somebody else's problem, then these very services and infrastructure can be starved of capital. Coronavirus changes this perspective. People crave for outdoor spaces- who is going to maintain them and set up new spaces. People crave for not moving around on crumbling bridges, roads, subway systems. Who is going to provide them? People crave for good schools, community colleges. Who is going to provide them? People crave for good sanitation systems? Who is going to provide them? People crave for good public health systems. Who is going to provide them? Its just good common sense. Is it possible for common sense to be missing? It is- just ask people today, and it is good common sense to have good critical infrastructure such as sanitation, medicine, public health, and local manufacturing of medicine, yet economic experts and economic theories thought it made sense not to do this.  ...

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G-7 nations reach agreement for a global minimum tax of 15% a floor for taxes that the Biden administration finds acceptable. This agreement was reached at a meeting of the Treasury chiefs of the 7 G-7 countries in London on June 5, 2021. The G-7 countries are Canada, France, Germany, Italy, Japan, UK, and US. Next agreement from Russia, China, India and Brazil in the G-20 nations would establish new ground rules for the major economies. The G-20 meeting is in Venice July 9-10. The OECD is steering the international efforts to achieve that goal. For the agreement to be effective a number of small nations that use tax rates of below 15% to attract business have to be part of the new rules. One of these countries is Ireland with a tax rate of 12.5%. For the Biden administration in the US the goal is a significant one as president Biden seeks business to pay its fair share so that long neglected priorities for education, healthcare, infrastructure, post pandemic improvements can be met. France and other nations in the EU face similar needs in the post pandemic environment. By setting a floor the Biden administration is both creating a new cultural concept of fairness in taxation and making it possible to finance the $2 trillion spending programs for these priorities of president Biden. Behind this are important facts that have left the large tech businesses paying little or no tax depriving governments of the very revenues that are needed for infrastructure and services for a modern well run state. The Biden administration seeks to include the tech businesses as well as all businesses in the new tax rules so that a uniform idea of fair taxation applies across the whole economy for the first time in two decades. In this way it makes up for the missed opportunities in the OBC administrations of Obama, Bush, Clinton that have led to loss of faith in the state and institutions in the US. A similar situation prevails in the UK,  France and Germany where previous administrations failed to address this important issue of fair taxation and financing infrastructure and priorities in health, education, and critical needs of the people.   ...

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This report in the WSJ gives a detailed profile of Liu He, who as vice premier and top regulator is now a top economic official in charge of the financial system and the industrial sector. The appointment will be confirmed at the annual meeting of China's legislature in March 2018. Liu He is a classmate of Jinping at Beijing's Middle School 101, went to Renmin University for a degree in Industrial Economics, and studied at the Kennedy School of Government, Harvard. As the superregulator and overseeing the central bank, Liu He's team has set the goal of bringing financial risks in the Chinese economy under control in 3 years. This team also setup the 2018 economic blueprint that made "Xi Thought" the guiding principles for running China's economy. Financial risks in China's economy from the high debt to GDP ratio which worsened after the 2008 financial crisis and higher lending practices, are seen as a threat to the economy. Policy now is focused on stabilizing the economy and setting a long term path to slower but sustained growth, so that the entire country can share in the benefits of modernization that the coastal regions and parts of the country in the east have experienced during a period of rapid growth. Even the quashing of term limits for presidentcould be seen in the light of this economic blueprint as financial risks could lead to other serious problems if a stable path for the economy is not set and followed over the next decade. As part of this effort Xi Jinping has focused his efforts on corruption to improve perception of the party in the country. Liu He is the main economic official speaking for Jinping at Davos Forum. Another member of the circle advising Jinping is Wang Quishan, who has helped run the anti-corruption campaign. Both Liu He and Wang are expected to handle the future relationship with the U.S. Liu He's policy ideas are for strengthening the state sector with mega mergers, closing less profitable competitors, reducing industrial overcapacity, and making the remaining companies stronger and more profitable. This includes making firms more efficient, better run and more profitable- in the words of the economic blueprint to make "state capital stronger, better and bigger."   ...