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The U.S. Senate voted 79-19 to go forward with a bill on sanctions against China for undervaluation of the yuan. The IMF says China's currency is "substantially undervalued."

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China's purchase of 2.3 trillion yen in Japanese government bonds, which aroused controversy in Japan. This was seen as driving up the value of the Japanese yen. China later reversed this action in August 2010.

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Japan's efforts to rebuild Myanmar's economy and infrastructure after decades of stagnation under a military regime.

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As expected Iran boycotts the talks in Doha of 16 major oil producers seeking to stabilize oil prices. Saudi Arabia, Russia, Qatar and Venezuela sought to stabilize oil production at January levels to support oil prices. Wth the Saudia and Russia producing all out, Iran seeks to do the same, effectively closing the door on any agreement to freeze production levels.

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General Electric, GE, experienced a steep decline in the last decade. The worst news came in 2018 with the loss of half its share price and market value. One story tells about an employee who was forced out of retirement back to work seeing the loss of value in GE shares in 2018. Rarely has a company of this size seen a fall in stock price this steep, for a stock that was once seen as safe for widows. About 60% of GE business comes from jet engines, electric power generators and wind turbines. GE now plans to sell its health care business and other business that do not relate to core infrastructure in energy, aerospace, and other markets. Under Jack Welch a faulty model of adding diverse businesses that had nothing to do with its core business and expertise in infrastructure were added. A home mortgage lending business was added and GE Capital expanded. NBC Universal was added with little justification in a period when CEO's acted without much consultation. The home mortgage lending unit collapsed with large losses during the 2008 financial crisis and GE's share price dropped drastically to $6.00. Under Welch's successor Mr. Immelt the GE Capital unit was shrunk in size, but losses continued to mount. An oil field service unit was added which also sustained losses.  Immelt's successor Flannery faced a loss of $15 billion from the financial lending unit. Sale of some businesses was not sufficient to meet the loss. Flannery is now taking GE out of all the businesses which were not core business. The NBC Universal television business was sold to Comcast in 2013. GE Healthcare is next. This closes a bad chapter in GE's story under Welch and Immelt. GE's dividend was cut for the second time since the Great Depression. The story of GE is also the story of American business during the last two decades, with icons such as GM, Ford and GE suffering decline, businesses that operated like little fiefdoms of old nobility in Europe, with CEO's operating in a CEO centric culture, not tolerating contrary opinion for informed debate on issues facing the business. Alfred Sloan founder of Genral Motors called constructive debate central to good management. Later Intel CEO Andy Grove coined the phrase constructive confrontation as a way of constructive debate, and the CEO was shown as the first of equals. The CEO centric management ignored these warnings and admonitions in running their fiefdoms.   ...

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The private sector ignores health insurance. And state coverage in China is inadequate. More than two thirds of China's 1.3 billion people have no health insurance at all. If you have insurance you still pay up front in cash, if you do not have the cash up front you cannot get a surgery, treatment of any kind or any drugs, even if the insurance will later reimburse you. The Chinese health care system is dysfunctional and in a crisis because of the way it is structured, and the faulty policy incentives. It caps prices for basic drugs and procedures at below market rates, yet it lets hospitals profit from everything else from advanced drugs to sophisticated diagnostic tests. So hospitals invest heavily in technology and expensive testing. and drug sales account for 45% of revenues. And enforcement is lax. Doctors in Shanghai make monthly incomes of about $400, about what a taxi driver makes, so they supplement their income with bonuses earned by prescribing more expensive tests and drugs. There is no utilization review so the state reimburses for whatever the hospitals charge regardless of whether the test was needed or not. So the system is dysfunctional and lurching towards a crisis. In fact heavily burdening the middle class. The private outlays and burden of total health care spending has increased from 20% to 60% of total health care spending from 1978 to 2003, as the the health care system got the same dose of unfetterred capitalism as the rest of the system. The Government's share of total health care spending has dropped sharply. In addition there are design flaws that push expensive care and build in incentives for expensive care at the expense of good medical care. The government recognizes this problem and sees it as athreat to social stability. It has committed to increase spending on healthcare. ...

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Product obsolescence in a matter of weeks- the situation with the HP Touchpad. The Touchpad tablet is introduced at a retail price of $399 for 16GB and $499 for 32GB versions on July 1, 2011. The product is scrapped by CEO Apotheker after disappointing sales within weeks of introduction. It is now sold at a sale price of $99 in the last week of August 2011. This shows the astounding rate at which things change in the high tech product markets. Nokia, Nintendo, and now HP have seen their fortunes change quickly in 2011.

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Krugman points to the low productivity improvement in the U.S. since 2005, and looks at the nature of tech changes since 2005 with products from Apple, Google, Microsoft, Amazon and other companies targeted more at consumers than at the core industrial economy. Listening to my favorite music or using smartphones does not add to productivity in the same way that changes in an earlier period improved productivity. Low productivity improvement hurts workers in the U.S., Britain and in the eurozone, as this is holding back growth in wages. Figures actually show a further deceleration in productivity since 2010 to a mere 0.3% annual growth in the U.S., from 1.3% since 2005, and 2.9% for the period from 1995 to 2005.

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Hon Hai has about 800,000 workers. About 400,000 are employed in the southern industrial town of Shenzhen. After a number of worker suicides (13 people have committed or attempted to commit suicide in 2010 so far), the company has announced that it will give 20% raise to its workers. Workers at one plant in Longhua are paid 900 yuan or $132, the legal minimum wage in Guangdong province, though many workers work overtime at 1.5 times the standard rate. The company is secretive about its activities and uses the trade name of Foxconn. It makes personal computers and other products for Apple, HP and other companies. The company uses a military style discipline and it is reported that there is excessive stress in working conditions.

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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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Krugman points to the need for action on revaluation of the yuan, and sees the vote in the House of Representatives sponsored by Sander Levin as a necessary step to get China to act. He sees China as dragging its feet on this issue for many years, and the need to keep the heat on US policy makers, who have acted very passively on this issue. He describes the US policymakers as being infuriatingly, incredibly passive in the light of the Chinese inaction and stalling on currency appreciation. China he says denies manipulating the exchange rate, even as $2.4 trillion foreign currency was purchased by China. Krugman says China is not letting what is a natural process to unfold that would help the world economy as a whole to recover. Its manipulation of the exchange rate, is in effect subsidizing its exports at the expense of other countries like the US. See the link to Roubini, who shows how this is bad for China. Roubini says China will see a growth collapse in 2-3 years, if it does not change direction and let the yuan appreciate. He says it is in effect a large transfer of income from Chinese households to Chinese state owned companies which is dangerous because of increasing misallocation of resources and real estate speculation. See David Barboza for information on the real estate speculation of these Chinese state owned companies. When all this information is added up, it shows China's serious need to act. This would make possible a transition to a new model of development that relies on domestic consumption, and bettter allocation of resources and investment. ...