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This report in WSJ looks at the impact of the 2018 Trump tariffs retained by president Biden as the US seeks to reduce its overdependence on Chinese imports and bring back American manufacturing. This followed misguided policies of previous administrations since Clinton that weakened American manufacturing strengths. Have the US tariffs on Chinese goods worked? The WSJ graph with information from US Census Bureau shows that imports from China in 2022 going down to the levels in 2007 of about 16-17% as a share of US imports, down from a high of 21% before the Trump tariffs halted a rapidly rising curve. Imports from Germany, South Korea and Japan in 2022 were down slightly hovering around 4.5%. Imports increased from Canada and Mexico, the US's traditional partners in North America, around 13.5% as a share of US imports for each country. Also increasing were imports from Vietnam. Some of the imports from Vietnam are Chinese products shipped through Vietnam to evade tariffs, and it is not clear whether the figures from Vietnam have been adjusted for this. President Biden is looking at different scenarios in an effort to tackle inflation. One supported by Janet Yellen, an economist at US Treasury is for the US to relax some of the China tariffs. Most economists in previous administrations including Yellen failed to understand what surrendering American manufacturing to China on the scale and speed that happened would do to communities across America that depended on factory jobs. The devastation of these communities has led to increased divisions in America, weakened American manufacturing, and led to outflow of technologies vital for national security and national well being.  Republican senators, US Trade Representative Katherine Tai and National Security Advisor Jake Sullivan are opposed to any relaxation of tariffs. Studies show the removal of the tariffs would have only a small impact on the consumer price inflation index reducing inflation by 0.26%. Lifting some tariffs on school supplies and summer bicycles as proposed by the US Chamber of Commerce would have little or no impact on the consumer price index for inflation. This is because the inflation is triggered by oil and gas price increases stemming from the Russian policies and invasion of Ukraine. This has also aggravated food and grocery costs  through blocking of agricultural imports from Ukraine. An additional factor was the increased demand after the pandemic easing in 2022, but that demand is already easing in July with glut in inventories at Walmart and Target, and excess warehouse capacity at Amazon. It would also send the wrong signal to China that the tariffs imposed by president Trump after a Section 301 trade investigation and based on improper loss of technologies to China are not being taken seriously by the US, says Republican Senator Hagerty of Tennessee. The Labor advisory committee to the US Trade Representative Katherine Tai also opposes any such move after the serious damage done to US workers and to US national well being and security. This happened under the Clinton, Bush and Obama administrations with failed trade policies that ceded manufacturing to China. ...

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This report in WSJ says Mr. Musk's agreement with Twitter for the $44 billion merger had terrible timing. It comes with the future for social media companies becoming dimmer and the plunging shares in Tesla with the high inflation and the war in Ukraine hitting stocks.  It is striking that Musk around January 2022 before the invasion of Ukraine referred to Twitter as "the future of civilization," as reported by WSJ. This was typical of the hyperbole and talk typical of the last two decades that hyped up internet stocks. Musk said- "Having a public platform that is maximally trusted and broadly inclusive is extremely important for the future of civilization. I don't care about the economics at all." Twitter stock meanwhile has dropped to 20% below the price it came into public markets in 2013, now at about $35 a share. Mr. Musk agreed to buy Twitter at $54.20 a share about 50% more than it stands now. Twitter ad revenue outlook is dimming further as has happened at other social media companies and the company is now cutting jobs says the WSJ. ...

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A dwindling supply of basic smaller models and higher new car prices that peaked with shortages in the supply chain in 2022 are still problems in 2023, says this report in WSJ. Car manufacturers and dealers have not increased the supply of new cars. Higher interest rates and higher prices have led to a situation where car leases can run on an average car to $736 compared to $585 2 years before. This report also says new cars will run you an average of $51,000 up 30% over 2 years. The situation is really bad for buyers compared to the situation before the pandemic, after problems in the supply chain and profit seeking by car dealers. One lower income buyer cited here during the pandemic ended up with a lease of a basic Toyota Corolla for $500 with $236 in insurance payments costing $736 a month that was almost as much as her payment on rent, leaving little in savings or for other expenses. A significant part of inflation today can be attributed to the higher price of cars that constitute basic transportation for the large majority of buyers. Profit seeking behavior of carmakers and car dealers makes the situation that much worse as dealers seek to preserve the high profit margins of the last 2 years, that were the highest in a long time. ...

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WHite children born in 1992 fared worse in income levels than white children born in 1978. The reverse is true for black children- the income gap narrowing for black children born after 1992 and widening for white children born after 1992. In this unusual twist lies some of the angst about social divisions in America in 2024 where income mobility is a major issue. The Biden administration has achieved a lot with bipartisan legislation such as the Inflation Reduction Act, cancelling student loan debt or reducing it, creating 16 million jobs, bringing supply chain disruption inflation down from 9% to 3%, and yet more action is needed. Inflation in housing that for 25% of apartment renters takes 50% of household income is a challenge. Biden proposed a 5% cap on rent raises, Harris proposed capping rent payment at 30% of household income and  government aid for amounts above 30%. By contrast Trump program promises little to help with housing costs, and economic policy is limited to tax cuts heavily skewed to wealthier households. ...

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The unaffordability of housing is pushing more people to rent homes and apartments. The price increases for housing was 4.4% in January 2025 over 2024. This is lower than during Covid years. The supply of housing is tapering off and declining. As a result in the next 2-3 years says the WSJ the housing rental costs will rise sharply again. Added is the effect of deportation on construction workforce which has 13% of workforce as migrant labor. 

Housing makes up one third of the price index. Expect this cost to go up and inflation will not be coming down to 2%. The Fed will have to hold off on cutting rates to prevent another surge in inflation. 

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Taking Social Security early by age 62 years to invest in stocks is a crazy idea, says Jason Zweig in WSJ November 2025. Money for social security accumulates faster after age 62 in Social Security. If you take social security at age 70 instead of now at 62 years the money in social security will be 77% higher than if you start taking it now at age 62 years. At the rate of spending $400 billion for $20 billion in returns in 2025 for AI and AI overspending in future years suggests poor returns in AI Tech stocks. Social Security by contrast offers inflation adjusted returns risk free.

For those who have a decent amount of fixed income assets including bonds selling these bonds for additional income is better than taking social security early, say experts cited in this WSj article.

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This analysis by Mackintosh in WSJ points out that the low to negative interest  policy of the ECB has hurt savers, bank profits, and makes the ECB unpopular, yet it has shown tangible signs of success in creating jobs. This is true even though unemployment in the EU is still over 10% in some countries. He says that the unemployment is back to where it was in Nov. 1998 before the euro. There are 7.5 million jobs created in EU since beginning of 2014, the point at which ECB went to ultra low interest rates. This is above the 6.3 million created in the U.S. upto 1st quarter 2016. Big difference now is that companies and households are borrowing as rates fell. Inflation at 0.2% in August 2016 for EU is a weak spot, but considering where the EU was just 2-3 years before in 2013, the change is a largely positive one.

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The Turkish lira drops sharply on November 23, by 18%. This is likely to worsen inflation that is already at 20% in 2021. This also makes it harder for businesses to pay off foreign currency debt. President Erdogan is following an unconventional policy of cutting interest rates when the currency value is declining. The Turkish central bank is cutting its key policy interest rate. Growth and investment are expected to be affected as foreign investors move away from Turkey. 

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Lulu Garcia-Navarro interviews Homeland Security head Alejandro Mayorkas and asks him direct questions about the border with Mexico, published Feb 2, 2024 in NYT. Why the surge in migrants asks Navarro. Mayorkas is himself a Cuban born immigrant. Republicans in the House are impeaching Mayorkas. Navarro asks can you clearly say what has gotten us to this place and what went wrong? Clearly something had happened in Latin America. Central America drove migrants north after conflicts in Salvador, in Nicaragua and drought affecting Guatemala's agriculture for over 2 decades under different administrations. Mayorkas says in response to the question that the world is experiencing the largest level of human displacement that it has seen since World War II. He says the entire hemisphere is experiencing the enormous displacement in Venezuela as its economy collapsed. During the nineteenth century after president Monroe put forward the Monroe Doctrine that created a uniquely American sphere that asked European powers to stay away from the Americas north and south, any attempt by European powers was seen as an hostile act. It was American opposition to European colonialism. By the time of the Eisenhower and Kennedy administrations this policy was not followed with the intervention of the Soviet Union in Cuba leading to a a wave of refugees from Cuba in the sixties. In the last decade the situation in Venezuela has worsened to the point that 8 million people have left Venezuela for neighboring nations, 2 million to Colombia alone, destabilizing the southern hemisphere. Venezuelans many from the educated middle class form the bulk of the surge in migrants across the US border with Mexico in 2022 and 2023. The problems were actually exacerbated under the Republican administration as the Venezuelan inflation spiralled after 2016 skyrocketing into hyper inflation by 2018 leading to the flow of immigrants outward that reached 8 million. This kind of hyperinflation the worst in the history of Latin America need not have happened with better managing of the crisis at that time. Mayorkas says the problem is that America's system of asylum is broken and both parties need to fix it. This is proposed by Tillis-Graham and Lankford all Republicans in the US Senate with president Biden's support. When he joined the Department of Homeland Security in 2009 Mayorkas says, US Border Patrol chief told him the real problem was that from the moment a migrant claims asylum at the border under US law and the adjudication of that claim it takes several years. This is the root of the problem the law can be fixed with the will of enlightened persons in both parties by simply passing a new law. Immigrants from Latin America are just as likely to vote Republican as Democratic and this may be particularly true for Venezuela's middle class that left the country as the economy collapsed with policies that led to inflation not seen in this hemisphere.  The other alternative is for the US and both parties to agree to what would be today's version of the Monroe doctrine- then opposing European colonialism, now opposing the breakup from within of Democratic countries in Latin America leading to waves of migration north of the border and causing upheavals all over the western hemisphere. Much less a policy of such resolution both parties have failed to fix basic policies of asylum and parole that today are being addressed by legislation being put together by Senator Lankford of Oklahoma, Lindsay Graham of South Carolina, Senator Tillis of North Carolina, three core states that are Republican since the Civil War, with the help of the White House and Senator Schumer. Yet in the House of Representatives Speaker Mike Johnson calls it dead on arrival simply refusing to break the status quo. ...

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Mervyn King, governor of the Bank of England, says growth is expected to be "sluggish" with higher inflation. Inflation increased to 2.7% in October from 2.2% in Sept. 2012, with rising costs of university fees. The growth of 1% in the third quarter he described as a one time situation because of the Olympics in Britain. The strength of the pound relative to the euro and the GDP decline in the eurozone also hurt Britain's exports. Economsts at IHS Insight expect the Bank of England to keep the benchmark interest rate at current level of 0.5% for at least 2 more years and increase asset purchases by 50-79 billion pounds in Jan-March 2013. Some economists see the need for other approaches because of tight bank lending. King says the central bank committee retains faith in asset purchases as a policy instrument.

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Much of the economic debate by economists in the US takes place separated by walls from the reality of huge inequalities in the country such as half of retirees having zero savings, the cost of living surge, job insecurity, and two third of children in 4th grade no able to pass the ACT test for reading comprehension. Here economists at the US Fed are cited in a discussion about ultra low interest rates that hurt savers and in particular retirees who number 57 million. Ultra low interest rates lead to wasteful use of capital and misallocation of capital in the US, and were largely a result of the effort to correct for the mistakes of the financial industry causing the crisis of 2009. The US was the leading economy in th world and the standards of living in the US were higher during the post war period 1950-1990 that covered the Kennedy-LBJ, Reagan administrations when inflation was accepted at 4% and interest rates were for the most part around 5-8% on average. As Krugman points in a recent NYT column in August 2023 Fed research has been wrong in estimating the right inflation rate for the economy. The best rate for the economy requires knowledge of and careful judgement about the situation of different parts of the American population, of workers and families that are struggling with the cost of living, and half of retirees with no savings. ...

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Lahart says adjusting for inflation the DJIA average in early March 2013 would be about 12,900 instead of 14,254, much less than it was in Oct 9, 2007 peak. If dividends are reinvested the Dow would be at 16,600. With inflation and dividends taken together the Dow would be around 15,000. Lahart does not cite his source. Browning in a separate piece says the DJIA adjusted for dividends, inflation and taxes, according to Bespoke Investment calculations is still below the 2000 level in 1994 dollars, and provides a different view.

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As long as free and fair presidential elections do not happen migration from Venezuela will continue said this report from CSIS in 2023. a clear warning to the US, to Latin America and the world. This is relevant to the actions taken by the Republican party and by DJT to make the immigration an issue in 2024 elections and as shown alongside in the action by DJT to revoke the Chevron license because of Venezuela's failure to take in deportees quickly and the failure of the Maduro regime to allow free and fair elections to let Venezuelans decide their future.  Eight million Venezuelans have left the country because of mismanaging the economy, runaway inflation, repression, and failure to honor free and fair elections. Taking the 2015 population of 30 million this is about 25% of the population with millions fleeing to Colombia, Peru and the US. "If no indication of regime change seems in sight and the 2024 presidential elections are not free or fair, upticks in migration should be expected, as Venezuelans will continue to leave the country in search of better opportunities. Therefore, it is critical not to overlook this migrant crisis nor normalize it, as it is evidence of the persistence of the democratic and economic breakdown in this country, which continues to be a threat to the stability of the region and the world." (CSIS, Nov. 27, 2023) ...

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The Seattle area, Bay area, Denver show slowing in rent and housing prices with improvement in affordability, increasing vacancies for rental housing. The housing and rental part makes an outsize part of the CPI index -35%. As prices of housing decline this has an effect on inflation. Fed chairman Powell says activity in the housing area has flattened out and remains well below levels in 2022. One reason Powell says he may cut interest rates next year.

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After a second round of price increases P&G's last price increase of 10% leads to first quarter revenues up 4% on sales volume declines of 3% for the first quarter of 2023. The company making Gillette razors, Charmin toilet paper and Tide detergent for household supplies has shown the persistence of inflation as companies increase prices to pass on the increase in price of raw materials. Some of this money will go to buy back stock- P&G plans to buy back $8 billion of its own stock. Companies such as P&G are countering criticism of price increases by saying they offer premium products or use the term "irresistable superiority" says this report in NYT. This leads to "profit price spiral" and adds to "wage price spiral" effects. A executive board member in eurozone says half of the price increases in EU can be attributed for the last quarter of 2023 to company profits.

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Martin Feldstein says China is gaining control of three problems it faces of shrinking export markets, the effects from a large stimulus in response to the 2008 financial crisis, and inflation especially high real estate prices. The economy is shifting to higher role for services and less dependence on exports under the new five year plan. The real estate prices are levelling off after steep increases. And inflation is under control. New investment will go into infrastucture needs such as power development and low income housing. As the economic problems are being tackled, the political problems remain. China faces an aging population under its one child policy, and it will have to support an increasing number of retired people in the future. Inequality and corruption are two problems that continue to grow and present challenges to the new leadership taking over in 2013.

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Apple follows Microsoft in increasing workers pay. Apple increased the hourly pay for workers to $22, increase of 45% over 2018. It follows Microsoft which has doubled its worldwide budget for meit based pay increases. Annual increases are moved up by 3 months and new pay increases take effect in July at Apple. Apple shares have fallen 21% this year to May, making stock based awards ineffective.  Apple has paused plans to call workers to office for at least 3 days a week as coronavirus cases rise again in California. Apple was one of the first companies to move to remote work in 2020. The pandemic has increased Apple sales tremendously of laptops and iphones so that the increase in workers pay was long overdue. In this sense the Biden administration has brought with it president Biden's genuine and deeply felt concerns for workers and families to the forefront of company and workers attention. Overall for private and government employers the first quarter of 2022 brought with it a 4.5% increase in workers pay, says the Labor Department. Inflation was higher and outpaced worker wage increases so that worker pay has more room to grow under president Biden's leadership. ...

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US inflation was up 3% in January 2025. Egg prices were up 15%.

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Bernanke in reflections on his policies for quantitative easing in response to the 2008 financial crisis, says the policies were intended to protect Main Street and the average American, even though this is not readily apparent. He says the policies did not lead to inflation as critics have stated, and one has only to look at today's inflation statistics to know this- referring critics to the government CPI report in Jan 2014 that consumer prices went up by 1.5% in 2013 and less than 2% for 2012. Bernanke says he hopes he took the right actions, and still retains the conviction that the American economy will recover losses from the 2008 financial crisis- even though the answers to this questions won't be seen for some time.

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P/E ratios for stocks in the U.S., Europe and the emerging market countries in 2013. A large gap between the U.S. and Europe for longer term returns, 22 for the U.S. compared to 10 for southern European countries such as Spain, Italy and Ireland. This uses the cyclically adjusted returns based on the Shiller P/E which takes average ten year earnings adjusted for inflation. Using earnings expectations for the next year the U.S. P/E is 13.5 compared to 12.7 for developed markets including Germany and the UK.

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The Indonesian currency, the Rupiah, has declined by 13% in 2013- by Sept. 3. It reached a level of 11,050 rupiah for one dollar on Sept 3. Economic growth has declined to 6% for the second quarter of 2013. The depreciation of the rupiah is likely to increase inflation significantly and affect the consumer spending boom in Indonesia. Indonesia had a $2.3 billion trade deficit in July 2013 after a continuing surge in imports. This will affect car prices and prices of international brands popular in the country. Toyota set the rate at 9500 rupiah to the dollar and plans to increase prices now that the rate has passed 11,000 rupiah.

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Gerard Baker in the WSJ says the abortion rulings of the Supreme Court and the Inflation Reduction Act, Climate Change bills have energized Democrats. He says that as the chances of president Trump running as the nominee of the Republican party in 2024 increased in August, the electoral prospects for Congress of the Republican party have diminished. He says the Mar-a-lago taking of documents by FBI and investigation are also now seen as part of national security issues.

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The Tories are seen shifting their position from working with the unions during the pandemic and Boris Johnson's position that there would be no return to the period of "low wages, low skills, and low productivity," in this analysis in The Guardian. Faced with risks of higher inflation in Britain the conservatives have shifted to supporting no more than a 3% wage increase for rail workers in the face of 8% increase in inflation in Britain in 2022. Rail airline, other workers,, and the government now are on opposite sides on wages after joining together during the pandemic. Shortages of workers have pushed up wages in some sectors but others are lagging behind including transport workers, leading to the rail strike and other strikes of public sector workers.

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Turkey's elections for parliament and for president are on May 14, 2023. President Erdogan is running again after two decades in power. Turkey faces high inflation of over 57% which has created a serious cost of living crisis in Turkey. Erdogan has issued a wide range of stimulus measures- energy subsidies, a doubling of the minimum wage, pension increases, and a chance for 2 million retirees to retire immediately. A kilogram of tomatoes used to cost 8-10 liras and now costs 25 liras. Rents are going up with steep increases. Turkey has been hit hard by the war in Ukraine as it depends on Ukraine for grain supplies. A popular mayor of Istabul Ekrem Imamoglu from the Opposition is shown here as an alternative for president. Erdogan started his political career as Mayor of Istanbul with the military opposing him. His management of the economy helped him win two terms as president, which is now in a severe crisis.

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India's central bank chief, Raghuram Rajan, points to the risks for developing economies from changes in monetary policy of the U.S. Federal Reserve. The Indian rupee lost about a fourth of its value in 2013 as the U.S. Fed announced plans to withdraw from its quantitative easing policies. Large depreciations in other developing economies, Indonesia, Turkey and Brazil, happened at the same time. Rajan and India's Reserve Bank increased the interest rate by half a percentage point in 2013 to deal with the impact on inflation as a result of the large depreciation of the rupee. The volatility of capital flows and sudden reversal in inflows of capital to developing economies leaves these countries exposed to sharp declines in economic growth. India's growth has slowed to 5%, larger than expected from the slower growth in the global economy in 2013, largely as a result of decreases in direct foreign investment and capital outflows.