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The Economist cites the Dartmouth Atlas Project which shows differences in cost across the country for health outcomes and spending involving Medicare. It cost $5000 per person in Salem, Oregon in 2006, $8000 in San Francisco, and more than $16,000 in Miami, with outcomes for health tending to be better in places where the costs were lower. This is one of the statistics that Peter Orszag of the Congressional Budget Office uses to come up with his estimate of 30% waste in health care spending in the United States. Prof. Skinner at Dartmouth and Prof. Garber at Stanford point out that of most health systems around the world the American system is "uniquely inefficient" and wasteful. The Economist cites information that the American system is twice as costly per person for healthcare than the Swedish system, and that it costs twice as much in Minnesota as in Miami. A poll done for the Economist shows 52% of the people in the UA are dissatified with the quality of care, 40% think the system needs fundamental change, and 29% think that it should be fundamentally rebuilt. The lack of uniform coverage is also causing turmoil in the system. About 49 million are uninsured, and a quarter or more are able to buy insurance and do not buy it because it is so costly, has exclusions and coverage is inadequate. But these people also end up in the emergency rooms along with the indigent costing the whole system tens of billion of dollars for costly late interventions that could have been avoided with preventive care early on. With the economic crisis and rise in joblessness, the dire condition of state and local budgets, the situation has probably drastically worsened, and the system near breakdown. ...

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Exchange of remarks between Ben Bernanke of the Fed and James Dimon of JP Morgan Chase Bank on regulation and new capital reserve requirements for large U.S. banks. Fed governor Tarullo has proposed a 14% requirement of capital reserves for banks that are "too big to fail."

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The U.S. Labor Department reports that 4.4 million unemployed workers in the U.S. were out of work for more than one year. For the U.S. this is 30% of all unemployed. In some of the largest states about one in three unemployed workers have been out of work for more than one year. For New Jersey which has a 9.4% unemployment rate compared to 9.6% nationally, 37.1% were out of work for more than one year. Older Americans, the highly educated workers, are more likely to have longer stretches of unemployment. This is the situation in New Jersey and Florida where there is a larger population of older workers.

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Reasons why the U.S. Stimulus spending failed to give the economy the boost it needed.

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The IMF in its 2012-2013 Global Economic Outlook Report presented at its annual meeting in October 2012 estimates global economic growth of 3.3% in 2012 and 3.6% in 2013. This is a drop of 0.2% for 2012 and 0.3% for 2013 from its earlier forecast in July 2012. Under the IMF definition the global economy GDP does not have to decline for a recession. Advanced economies growth estimate is 1.3% in 2012 and 1.5% in 2013. Emerging market economies growth estimate is of 5.3% in 2012 and improving to 5.6% in 2013. Specifically for the eurozone growth estimate is decline of 0.4% in 2012 and 0.2% growth in 2013. U.S. growth is estimated at 2.2% for 2012. China's growth rate is estimated at 7.8% in 2012 with a growth uptick to 8.2% in 2013 as a much smaller stimulus than the one in 2009 kicks in. This will help commodity exporters like Brazil, Australia, and Canada. Two surprises are Brazil's growth with a significant improvement to 4% in 2013 from 1.5% in 2012 because of sharp interest rate cuts and improving demand from China. The other is India which is expected to show a significant slowdown with a growth estimate of 4.9% as the government faces what the Kelkar committee report calls "a perfect storm" of a large current account deficit and a budget deficit, and failure to attract foreign investment. Growth in Japan is expected to slow to 1.2% in 2013 from 2.2% in 2012 as the government imposes a sales tax increase to reduce its deficit. ...

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Russian president, Vladimir Putin, tells academics and journalists at an event called the Valdai Discussion Club, he had reservations about expanding the state sector by approving the deal for Rosneft to acquire TNK-BP assets. His motivation for doing this was the endless shareholder conflict between the Russian partners and BP. Putin says he warned British prime minister Tony Blair that a 50%-50% ownership venture would not work as nobody was in control, and described this as so bad that "sometimes they were fighting each other with their bare hands." The injection of private ownership into Rosneft with the 20% stake for BP would provide stability for the company and was the bright side to this. Foreign academics and journalists participate in three days of discussions with Russian academics and journalists in this event. Putin has no new vision for this third term beyond consolidating and protecting the achievements of the last decade. He cited as his achievements- growth of the economy, expansion of the foreign exchange reserves, and the increase in the birthrate....

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This editorial from the Times after the New Hampshire Republican primary- in which rival candidates attacked Bain Capital- says that leveraged buyouts by private equity firms like Bain Capital were only one of the causes of the growing income inequality, and by no means the principal cause. And they had little to do with the subprime mortgage crisis that led to the financial crisis and recession in 2008, which aggravated the income inequality. A serious factor was the lowering of wages in manufacturing in competition with lower wage countries in a globalized economy and the decline of good manufacturing jobs over three decades. The increase in low wage jobs in the retail and service sector with the decline in manufacturing did little to arrest the growing gap in wages.

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Brett Arends cites several factors for his skepticism about the 4th quarter 2010 US stock market rally. Cyclically adjusted price to earnings ratios that are 75% above their average value. A market value for US equities excluding financial stocks, that is within 15% of the October 2007 peak. Fed data that shows nonfinancial corporations have debt of $7.4 trillion at the end of the third quarter 2010, an increase of $250 billion in one year, and up from $5.5 trillion in 2005. This Fed data shows the debt for nonfinancial US corporations is 58% of their net worth, up from 41% five years ago. US consumers are still have the kind of debt burdens they had in 2008, with US households having reduced their debt by only about 3.5%. Arends says the leveraging is through the roof when you add up the debt that government and corporations have run up. Total debt has risen to $36 trillion, up 15% from the fall of 2007. He cites other experts who were right for the last decade who are skeptical this time- Rosenberg at Gluskin Sheff, Albert Edwards at S.G. Securities, John Hussman at Hussman Funds. The latest analysis by Jeremy Grantham at GMO is that large cap US stocks are not likely to beat inflation by much over the next 7 years. Arends has not mentioned global risk indicators such as the asset price bubbles developing in emerging markets, and the sovereign debt restructuring needed in debt burdened countries of the European Union. Analysis by the Economist in year-end 2010 points to the diverging directions of austerity in Europe, spending in the US and asset price bubbles in emerging markets, as a disturbing sign for 2011-2012. Risks in the US that Arends has not mentioned include problems in housing. Nouriel Roubini sees problems in housing in 2011. ...

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Mervyn King, the governor of the Bank of England, is coming under increasing criticism for supporting the Conservative-Liberal coalition government's austerity plan, and for lack of efforts to fight inflationary pressures. On a major issue on which King has taken a clear stand- that the largest British banks should increase capital levels exceeding the international standards- not much has happened. Consumer prices in Britain were up at a 3.7% annual rate in December, and the government's austerity policies will also cause pain. In a recent speech King said that the Bank of England had limited ability to fight the higher unemployment and increased inflation. It was an admission of the limits of central bankers in the current situation. King said "a squeeze in living standards is the inevitable price to pay for the financial crisis and the subsequent rebalancing of the UK and world economies.

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Greenberg of AIG asks why Goldman got paid in full while AIG suffered and languished? Questions he raises about the way Goldman Sachs acted during and before the crisis, with its actions helping precipitate the crisis, and the need for investigative reporting to uncover the facts. Serious questions raised by Greenberg.

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Fiat Chrysler CEO Marchionne's strong opposition to the deep discounting of cars and focus on market share of the Detroit automakers. He scrapped discounting plans of the sales team at Chrysler and fired executives who pushed this strategy. Marchionne's office is located on the fourth floor of the technology center at Chrysler headquarters, next to Chrysler engineer's offices, and the management team meets in a nearby conference room. Fiat engineers and managers in Italy participate through videoconferencing.

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James Pressley reviews Simon Johnson and James Kwak's new book - "13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. " He suggests reading the first and last chapter for what the authors recommend, limiting banks to no more than 4% of GDP in assets or $570 billion maximum, and investment banks to 2% of GDP or $285 billion. Pressley agrees that incremental steps are not going to change the situation. And the authors have thought this thing through, with Simon Johnson, a former chief economist at the IMF and writer of the Economix columns in the New York Times on the current crisis in Greece, Portugal and Spain. Some of their analysis on that crisis has been borne out by developments, as Greece lurched towards default with the slow response of Germany enlarging the dimensions of the crisis, and requiring a larger bailout for Greece of $160 billion in late April.

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Yale Prof. Fair says that evidence from his model shows the yuan appreciation having a positive effect on American jobs looks better than it really is. Two negative effects are in play. The first is that Chinese output decreases will have an effect on Chinese imports that will affect US exports. And the other effect that will come into play is the increase in US prices. His conclusion is that it unlikely we will see a large increase in American jobs from the appreciation of China's currency.

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Inherent conflicts between views of Reidel, Biden and other policy advisors such Richard Holbrooke, all wary of Hamid Karzai's government in Afghanistan and General McChrystal -whose experience in tactical strategy was his strong point, not an overall perspective that took into account factors outside US control such as the people, their history, recent history, the terrain, lack of viable government, neighboring Pakistan- spill out into the open. Holbrooke, the special ambassador to the South Asian region has serious differences over Karzai with ambassador to Kabul, Eikenberrry, and with Jones, National Security Advisor. Eikenberry has his own differences with Karzai. See the group "Eikenberry Cables," which provides his cable reports from Afghanistan which talk about Karzai, the Afghan military, and the prospects there, in bleak terms. The same Eikenberry is shown here telling Jones that Holbrooke's chilled relations with Karzai are not helping, and Jones assuring Eikenberry that Holbrooke is on the way out. Followed by Secretary of State Clinton supporting Hilbrooke by talking to Obama. See also the group "April 2010 Biannual Defense Departmet Report on Afghanistan," which shows that of 92 districts surveyed none supported the Karzai government, somethig that must cause policy team members to pause and think....

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Harvard professor, Benjamin Friedman, reviews journalist Timothy Noah's book "The Great Divergences: America's Growing Inequality Crisis and What We Can Do About It." Friedman says, Karl Marx got it wrong when he predicted greater inequality based on the situation he saw in Europe and the U.S. in the late nineteenth century. Inequality actually decreased in the U.S. and Europe with industrialization, technological progress, higher educational and income levels by the early part of the twentieth century. Similiarly Simon Kuznets, Nobel Laureate, also got it wrong when he extrapolated from what he saw in the early postwar period, assuming greater equality and better opportunities in future decades. The approach Noah and Friedman advise is to look at individual factors that promote or discourage less divergence in income levels, opportunities and upward mobility. And based on this shape policy and action agenda for better outcomes. A whole range of issues fall in this range- promoting manufacturing and higher wage jobs, immigration policy, investments in education to upgrade skills, better educational opportunities, vocational training, upgrading education to keep up with new technology, and investments in research and new technologies for new industries that would create better opportunities. Because inequality is increasing worldwide, and countries are focussing on improving competitiveness as well as preserving the social fabric in a global economy, this is an issue facing all countries that seek a better future....

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JP Morgan CEO Dimon, says the lack of enough worker training is hurting the U.S. with unemployment one or two percentage points because of this. The lack of enough training efforts by business and government to add technical skills to workers existing skills is resulting in many jobs going unfilled in manufacturing and other fields.

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President Obama tells Hispanic high school students he supports a bipartisan plan for immigration reform from Senators Graham, McCain, Rubio, and Schumer. A critical part of the plan and the President's plan is a pathway to citizenship for 11 million illegal immigrants. Obama wants to see a pathway "from the outset," senators say this should happen after stricter enforcement requirements are met. If the senators do not move ahead with this plan the White House will put forward his own plan.