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Ivan Rogers, UK ambassador to the European Union for three years till 2017 was sharply critical of the British government and forecast some of the Brexit problems. He has a book "9 Lessons in Brexit," which appeared in Feb. 2019. Here he is interviewed by Der Spiegel. He says he expected some of the problems but is still surprised that 4 weeks before the deadline the political class in Britain has not yet figured out what kind of Brexit they want. Here he points out that Cameron and Blair represented the centre in British politics. But that centre has now collapsed after the financial crisis and the period of austerity led to widening gaps between the different parts of British society. The public is now deeply alienated from both major parties. In both parties the populists on the left and the right have gained a bigger influence, as a result there are no centre right or centre left figures who command public influence. Rogers is a civil servant of high rank who has worked with several prime ministers including Blair and Cameron. His comments are worth listening to.  Was Theresa May the right person to tackle Brexit? Her problem says ROgers is that she started with a hardline position of reducing the number of people entering the UK from inside or outside the EU. Once you do this you cannot have free movement of goods, services and capital, so you have to leave the single market. And if Britain wanted a fully autonomous trade policy then it cannot stay in the customs union. Rogers thinks Theresa May never really understood what this meant- that it was going much further out of the European Union than Norway or Switzerland, or even Turkey. Now as she is trying to go back her right wing cries betrayal. Do British prime ministers understand the single market, the customs union, or how the EU really works? Rogers worked on European issues for a long time and he says after working very closely with British prime ministers that none of them had a deep understanding of how the European Union works. Plus they lack any emotional attachment to the EU, because of the mercantile relationship Britain has had with its neighbors. About the relationships in Europe between the Germans, the French, the British, what is it and what will it be like? Rogers says he has not seen a thinner relationship in his lifetime. He thinks the European political elites are not talking to each other anything like what was done 20 or 30 years ago. He says the Brits have to take a lot of the responsibility because the British political class lost interest in Europe. What could the Europeans have done? Rogers says the chaos continues because the British don't really know where they want to go. It opaque about the relationship on purpose. Have the Europeans thought about what kind of a continent they want to see after all this is over? This interview tells you more about the Brexit problem that many reports and opinions, bringing a thoughtful way of looking at the problem. ...

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Russia's economic planners and president Putin underestimated the importance of foreign investment to build its tech sector and diversify the economy away from its dependence on oil and gas commodity exports. The strong balance sheet with only 20% of GDP in government debt and over $300 billion in foreign exchange reserves created a false sense of security. An adventurous foreign policy has resulted in western sanctions and a poor investment climate crippling much needed foreign investment. Capital flight exposed vulnerabilities in the economic situation and cracks were evident in the emerging markets crisis in early 2014. Russian corporations were exposed as they depended on access to financial markets which was reduced with EU and U.S. sanctions. These problems were compounded by Dec. 2015 as OPEC led by Saudi Arabia did not cut back production to offset higher shale oil supplies, leading to the drop in oil prices below $50. Experts see the drop as being a lasting factor and Russia's finance minister sees no rebound of oil prices to $100 as happened after 2008, accepting a long term situation of low oil prices. This increases dependence on oil says Barley. It shows how Russia under Putin had grown complacent about the risks to the economy of not forging ahead with an aggressive plan of diversifying into tech and related sectors. In a competitive global economy the risks of standing still, of complacency, misallocation of resources, poor decisions, and weak political processes, can be disastrous....

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DW.com has this exceptional story on the elections in France through the pictures drawn by cartoonists in French newspapers. As polls show Macron with over 60% of the vote, cartoonists reflected on the situation of a new president with little experience and his "en marche" movement only one year old, looking at it with skepticism. Cartoonist Antoine Chereau shows a common person reflecting on the situation, with the title Macron leads in the first round, the person says that after being deceived by the right and the left, the French are now choosing to try out deception from the centrist. Loic Secheress shows Macron at the steering wheel of a car, with the title the second round Uberized, two passengers in the back saying they do not want to go right or left, and Macron saying- then alright we are going straight into the wall. On the Socialists splitting the vote between Hamon with 6% and Melenchon with about 20%, instead of putting up one candidate and heading into the runoff,  cartoonist Plantu shows Hamon and Melenchon riding one bike in opposite directions, with the title - the losing machine. Cartoonist Soulcie drawing for Le Monde shows a tour guide in front of the Louvre museum pointing to the pyramid architecture in front of the museum and saying- here are the last remains of the socialist civilization. Allan Barte's drawing looks at the elections as another disappointing experience for voters. He shows two voters in front of posters of Marine Le Pen and Macron, one saying I hadn't realized what the expression really meant until now, and the girl next to him says "election piege a cons," meaning "elections are a trap for idiots" used in the May 1968 street protests in France. ...

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Bernanke's plan to address the deep downturn is very aggressive and he is pulling out all the stops. This includes the purchase of mortgage backed securities, Fannie Mae and Freddie Mac corporate debt and other assets, Since it stated its intention in late November to buy such securities, the 30 year mortgage rates have fallen to 5.2% from 6%, and refinance applications have tripled. Now the purchases will be greatly expanded. See the related link to this in Hubbard and Mayer article based on their research paper, in the WSJ, that shows that at a mortgage rate of 4.5% the housing market prices could stabilize. Next step the Fed will, starting early 2009, pump money into markets for student, auto, credit card ansd small business loans in hoping to bring life to those markets. How much money is involved? Quite a bit. All told the Fed's assets could add up to $5 trillion says Ed Yardeni of Yardeni Research, up from $2.2 trillion now. Its these sweeping moves and decisions that have overshadowed the December 16 announcement cutting the target federal funds rate to a range from zero to 0.25%, the lowest in its history. Whats the thinking behind this? Coy of BW points to Bernanke's research on the depression years and the lost decade years in Japan. In 1999, in a book he contributed to, Bernanke referred to Japan's monetary policy and passive approach as a self induced paralysis, including all the zombie loans that were allowed to continue on company books and no effort to clear up the bad assets quickly. He always thought highly of the aggressive approach taken by Franklin Delano Roosevelt, and felt that more tools available and a better understanding of the market system since FDR's day enabled a lot more actions to be taken to reverse the kind of steep global downturn that might occur. Yardeni's view is that even though this huge asset buildup could lead to inflation down the road, the economy in the medium term faces a deflationary environment, and the only way to cope with this series of bubbles bursting is to create another bubble, rather than risk anything going seriously wrong. Basically Bernanke is making an assessment of the current situation, and he sees bad credit situation getting worse, bad unemployment situation getting worse, consumer spending falling off and getting worse, continued home foreclosures and falling prices, the transition between administrations and lack of policy direction for a few critical months complicating things, and he sees the economies of all trading partners in Asia and Europe weakening in great speed, and sees very tough years for 2009 and 2010 no matter what the administration and the Fed do. Not enough aggressive actions to forestall the worst is as bad as inaction in Bernanke's view. And with all the aggressive moves, including the $1 trillion stimulus and infrastructure spending to create 2.5 million jobs that Obama administration plans, the US and global picture for the next 24 months will still be a long uphill climb. So the risks for Bernanke are all in the region of not doing enough and not doing it vigorously and speedily to get the best results. ...

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Krugman points out that the U.S. Federal Reserve's forecasts in March 2012 show the U.S. will experience low inflation and high unemployment for many years. These forecasts are in sharp contrast to the expectations in the equity markets based on an uptick for a couple of months of unemployment numbers. The Fed's own statements suggest the improvement in hiring may be temporary and a response to the overreaction in hiring in 2009-2010 to the financial crisis, and not a lasting improvement. The Fed pointed out that the long term unemployed are at about 40% of the total unemployed and the share of the population that is working in March 2012 has barely budged from 58% in 2009.

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 Mayor Reiter of Munich, Christian Kern, head of Austrian railway OBB, say here that the actions of Viktor Orban of Hungary gave the German government very little time, only a few hours, to act. The first motivation was to act in a humanitarian way, which is what happened. The German government had asked Orban to register and handle immigrants in an orderly way. In the end with the failure of Orban to do this, the immigrants who would have come north anyway, streamed into Germany and Austria in buses and trains. Clearly Hungary and Germany could have handled this better. The German public provided support with a large number of volunteers helping. One German minister is cited here as saying that if Orban wanted to build a fence he should have done it in a quiet way, as there are fences between Bulgaria and Turkey, and Turkey and Greece and it has not bothered anyone.

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Galston points to the study in the Economist magazine by Ray Avent showing the hugely negative effect of Tech on jobs in the last 3 decades. He calls for using the full tools kit of solutions to tackle the problem. Society will face huge problems if nothing is done as divisions in society are likely to increase with a few people doing well with a large number of unemployed and the working class having stagnant wages. He points to BLS statistics showing worker wages increased annually by 0.3% after inflation for the period 1981-2014 in the U.S. This is not just a U.S. problem. It is a worldwide problem with particular relevance for U.S., Europe, India and China. Galston was deputy assistant to president Clinton for domestic policy, 1993-1995, and holds the Ezra Zilkha chair in governance studies at Brookings Institution.

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Robert Lighthizer, U.S. Trade Representative, makes a passionate plea for the dignity of work in America, the founding principle for the society of opportunity that America has been and the reason it was settled by immigrants from Europe over 200 years. He points out that trade policy is not about geopolitics or about efficiency as others perceive, it is about what kind of society we want to live in. Is it about a society of opportunity? This is the foundation on which this American continent was settled by settlers from Britain and Europe, and the basis of the growth over two hundred years till the last four decades. From 2000 and China's entry into the World Trade Organization under president Clinton to 2016 the U.S. manufacturing base has shrunk with the loss of five million jobs, two million jobs lost to China in the period 1999-2011 alone. And 350,000 automobile manufacturing jobs to Mexico since 1994, one third of all U.S. automobile jobs. Without the initiative and hard work of Mr. Lighthizer both American workers and Mexican workers would be stuck in low paying jobs. The USMCA he negotiated changed all that by giving Mexican workers fair wages and American workers and manufacturing the opportunity for revival.  This view was also expressed by Intel founder Andy Grove, a founder of one of the first pioneer companies in Silicon Valley. Grove asked the question after seeing the outsourcing of production out of America and the condition of the American worker- he said for him it was about what kind of society he wanted to live in. It was all about the dignity of the American worker long ignored by economists who live in a world of theory and the elite that has lived for so long apart from the places where the fabric of American workers and working life was torn apart. It was a question that touched Andy Grove's heart just as it does for Robert Lighthizer and others who are fighting to make America a society of opportunity for the American worker and opportunity for the American people, for dignity in America. It also charts a new course for the French worker, the British worker, the Indian worker, as other countries learn from the American experience. We have covered Grove and Lighthizer from the early days of their leadership and wise reminders to the people of what America is and stands for. Lighthizer points out one huge error that makes the thinking of these economists and elite that have not listened for so long, more than a bit crazy, reckless and callous. He says there about half of 250 million adults who lack a college diploma in America. Historically manufacturing has provided stable well paying employment. Even if with investment in education they were taught to write software code, there aren't enough jobs for them. The combined total of jobs at Apple Google, Facebook and Netflix is 300,000 jobs. Never has so much been at stake for so many and defended by so few. ...

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The Labor Department report for September 2013 shows 148,000 jobs added, lower than expected. The lower jobs figures and the political uncertainty provide additional support for new Fed chairman Janet Yellen to continue pursuing the policies of Ben Bernanke aimed at reducing high unemployment.

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Under the Volcker Rule setup during the global financial crisis of 2008-2009, banks total investments in private equity, hedge funds and similar higher risk funds cannot exceed 3% of high quality capital. During the financial crisis investment banks were highly leveraged leading to the collapse of Bear Stearns and Lehman Brothers, and the precarious financial condition of other banks. Goldman has pared down about 60% of such investments. Remaining are $4.8 billion in private equity investments, $1.2 billion in real estate, and about $1.1 billion in both credit and hedge funds. Regulators have given the bank till July 2017 to comply. As banks recovered from the impact of the crisis, the tearing of the social fabric that happened with high unemployment in some groups especially older white men, has remained six years after the crisis- as evident in the U.S. election campaigns this year. As a result the mood has shifted for tighter regulation and both party platforms, Republican and Democratic, now call for reinstatement of the Glass Steagall Act, which separated commercial banking from investment banking as part of the lessons learned from the Great Depression. Volcker, was chairman of the U.S. Federal Reserve during the Carter administration, known for taking a tough line against inflation. He was the principal driver of the move to restrict banks from risky activity, and faced considerable opposition from banks during the 2009-2013 period when the rule was being formulated.  ...

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The U.S. Federal Reserve's decision to extend Operation Twist beyond June to the rest of the year after the June 2012 FOMC meeting. By extending Operation Twist the Fed will buy $267 billion in long-term Treasury bonds and notes and sell short term Treasurys.

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Jeremy Stein tells Eisinger that it is important for the Fed to recognize when a bubble is taking place and take action including jawboning and regulatory action to limit bubble behaviour in capital markets. Fed chairman Yellen did this for social media stocks and bio tech sector stocks in 2014 by pointing out that that the rise in stock prices were excessive, resulting in a pullback.

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Economists predict annualized growth of 0.9% for the second quarter U.S. GDP growth, suggesting that the U.S. economy is stalling and the U.S. Federal Reserve will continue its bond buying QE program.

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Bill De Blasio wins the Mayoral election in New York in 2013 by a 49% margin. Only Mayor Ed Koch exceeded this with a 68% margin in 1985. Issues in this campaign were police stop and frisk searches, income inequality that De Blasio said created a tale of two cities, lack of affordable housing, leaving large numbers of people behind. Republican issues of education, crime and quality of life did not play a part in this election. The election was a kind of referendum on policies of two decades that have increased the income disparities in this traditionally Democratic city.

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The U.S. Federal Reserve chairman, Ben Bernanke, will have his first Q&A and press conference on April 27, 2011. This is an effort to reach a broader audience with the Fed's view of the economy, his defense of the $600 billion quantitative easing decision, and views on inflation and the U.S. dollar.

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The US is on track to bring back 350,000 jobs in 2022 that were taken overseas during the two decades of hyper growth in China, according to the Reshoring Initiative. A false idea was created mostly by economists and business that shifted jobs to China during two Democratic and one Republican administration, the Clinton, Obama and the Bush administrations, that this would benefit the American workers and families through lower prices at the retail level. It ignored the severe damage this would do to jobs, incomes and whole communities when factories on which they depended for a living were shipped overseas. It damaged labor in ways that destroyed much of the American working class and the families built during the years of FDR, Truman, Eisenhower, Kennedy and Johnson. Business failed during this period to meet the challenge of higher American wages and productivity issues by using innovation and other steps to keep manufacturing at home.  This led to the hyper growth that did not benefit China, because a moderate pace of growth would have helped China control the rampant contamination of its air, water and soil. It also was leading China to a dead end reached during the 2016 election campaign with the election of president Trump with deep discontent from workers in midwestern states. The pandemic simply underscored the need for supply chains that were close to home and reliable in crises. By 2020 president  Biden was committing to a restructuring of the supply chains and pushing forward with it with legislation in the $369 billion Climate bill, and SCIENCE and Chips Act, to make solar panels, semiconductors and other products in the US. Reports from China showed that growth was slight or flat during 2022 and youth unemployment at 20%. The policy was to shift people back from the cities to the rural areas and support the informal economy, a sense of nationalist sentiment, and preparing for a future where the supply chain for the US and the European Union had moved away from China. In the long run the policies now look as ones that benefitted neither the US, the European Union, India or China.  ...

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Moody's Investors Service estimates the cost of fuel subsidies to increase to 1.7 trillion rupees or $24.7 billion for the Indian government in the next fiscal year beginning April 1, 2013, up from 1.6 trillion rupees the prior year. This is the result of the rapid depreciation of the rupee in 2013. The rupee depreciated by 8% between Aug 25-Aug 28, and is now at 68 rupees to the dollar. A new Food Security bill that passed the lower house of parliament provides subsidies for grains to about 70% of the people, and will cost $20 billion, up from $16 billion for the prior year. Government borrowing costs are up. Th yield on 10 year bonds maturing in 2023 was at 9.44% on Aug. 21. The rupee depreciation is a result of the wide current account deficit of about 4.8% and India's dependence on foreign borrowing to finance the deficit. A pull back of foreign investors from emerging markets is happening after the U.S. Fed announced it was planning a winding down of its easy monetary policy and low interest rates. Because India imports 75% of its oil, the depreciation of the rupee will hurt government finances. The danger lies in what this does to the growth rate at a time when growth is alreeady slowing. In the current year ending March 31, the growth rate declined to 5% from 6.2% the prior year. A poll of 18 economists conducted by the WSJ found growh estimated to be 4.6% for the second quarter of 2013. India is the second most populous country in the world and faces huge needs for infrastructure and development, and needs to create millions of jobs for new graduates....