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Jared Bernstein of the Economic Policy Institute points to trade barriers reducing competition and free trade that should raise an outcry when free trade and competition advocates focus alone on the Trump steel tariffs. He points to estimates that show $90 billion in additional costs to Americans from the barriers that prevent Americans from paying world market prices for surgeries and medical treatment, prices similar to what is paid in advanced countries like Germany, Britain and France. A bigger barrier in pharmaceuticals prices being sheltered from market competition worldwide costs a huge $370 billion in additional costs to Americans. These two costs in healthcare would help Americans by a magnitude compared to tax cuts that do not work for average Americans with the business tax cut going more into share buybacks than into increasing wages or capital investment in 2018.  Bernstein points to Neil Irwin's column in the NYT that flags statements such as Senator Mike Lee, Republican, that the steel tariffs are a huge job killing tax hike, as being misleading. Bernstein says two actions were never taken that would have used benefits of free trade to help affected communities that lost jobs in industries such as steel and textiles, other industries affected by foreign competition.  He lists these steps as sectoral employment training, apprenticeships ,and job creation efforts in the worst affected areas. Basically no one really knows what is good trade policy, the textbook concepts and theories are out of date when countries can subsidize particular industries such as steel and dump products into the American market. At a press conference on CSPAN with the Swedish prime minister Mr. Trump stated that China was exporting more than what is officially shown as there are transshipments from other countries, some of them with no steel mills.  As Mr. Trump stated at that press conference he was elected partly because of the worst affected communities- in places such as Michigan and other states in the midwestern U.S.- that suffered from unfair trade. Bernstein admonishes the economists and politicians, media, for the headlines that are misleading in showing that bad trade policy is being pursued and trade wars are being started. This deserves attention because the Trump administration and advisors such as Lighthizer who served in the Reagan administration seek fair trade, and the Commerce Secretary Wilbur Ross successfully pushed for NAFTA trade deal renegotiation not the outright rejection of NAFTA that was mentioned in the election campaign. Ironically no one is helped by this trade rhetoric and misleading headlines. In fact the strengthening of the U.S. currency as the huge trade surplus of China goes into U.S. assets, and with the election of Mr. Trump, gives foreign competitors a continued advantage. And in fact Japan, South Korea, China, had a mild response to the tariffs as reported, because these countries are aware of global overcapacity created especially by China which produces 50% of the world's steel, and as China shifts to higher technologically value added products closing many older steel mills. ...

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Feeding America, a national network of food banks, finds that 37 million, or 1 in 8 Americans, needed emergency food assistance in 2009. Even in affluent suburbs like Long Island it found 280,000 sought assistance for food in 2009. And 39% of these were children under 18. Only 30% of those seeking help received food stamps suggesting that even that program is not reaching everyone that needs help.

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China's central bank reduces its reserve requirement ratio, required money set aside by commercial banks and not used for lending. It lowered by half percentage point to 13% the amount of reserves Chinese banks are required to set aside. As the economy has cooled recently with trade tensions with the U.S., China's growth has slowed to 6%. The move frees up $126 billion for lending. In a speech this week president Xi used the word "struggle" over a dozen times. The State Council has plans to allocate more money for vocational training, to expand railways construction.  Analysts of S&P recently estimated China's economic growth over the next decade at 4.6% on average if the trade dispute gets to a stalemate, if trade dispute worsens it could drop to 3.7%. The trade dispute has dampened the mood at China Development Forum in Beijing, with attendees saying the distrust between the U.S. and China is based on deep concerns about each other. Besides the lending increase planned, the central government is pushing local governments to find projects to create jobs. Local governments fear this would worsen the already high debt burden they carry. ...

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Peter Coy says that as long as unemployment numbers keep going up and foreclosures keep increasing as aresult of the job losses housing prices will keep falling. He says that they may have to fall 20% more than the level they are at today. And that the foreclosure levels could become atidal wave if it becomes easier for alot of people to just hand their keys to the banks. This was what Martin Feldstein warned aginst in the WSJ oped pages several times in 2008. As more people are under water it makes sense to just hand the keys to the banks, and as long as this goes on, the economic recovery will be put off. A study cited by Coy done by Reinhart and Rogoff shows that housing crisis of this magnitude last about 6 years before all the bad effects wear off. And in addition to housing there are other things at work in this crisis especially in the job loss rate which is increasing (663,000 jobs lost in March), and the readjustment in savings rate upto 6.4% according to BW for 2009 till March, which suggests a serious drop in the consumption rate is underway and may go on for several years crimping demand and increasing unused manufacturing capacity. The stories in the media and other information reinforce this statistical information. The bit of good new from hard hit housing markets in California and Nevada and other staes has to be seen as no more than a limited play in the foreclosure markets, that does little to the broad brush strokes that are ocurring on the national and world landscapes in job losses and consumption. Coy a veteran analyst who has covered the housing market and warned during the boom of the likelihood of abust in a cover issue at the time, brings experience and reflection to the developments, and urges serious caution in interpreting signals that may have no broad meaning....

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For the first time in decades the U.S. trade deficit with China is falling significantly. China's exports to the U.S. dropped 12.5% to $296 billion in 2019 from $323 billion in 2018, according to Chinese customs data. Actually China's trade surplus with the U.S would have fallen even more had not the U.S. exports to China declined by 21%. With the Phase 1 trade deal negotiated recently U.S. exports to China will increase significantly, while 25% tariff on $250 billion in Chinese goods still in place limits China's exports. This means in 2021 and 2022 and years ahead China's surplus should shrink much faster achieving one of the principal goals of Mr. Trump and his trade negotiator Mr. Lighthizer. Mr. Lighthizer was chosen by Mr. Trump for having accomplished a similar goal decades back in the eighties with Japan's surplus. Even though China has not stated this in writing, American officials have said China will increase purchases of American goods and services by at least $200 billion over the next 2 years from 2017 levels. China and the U.S. have essentially agreed that the two economies so tightly intertwined works to the detriment of the U.S. with the Chinese surplus creating tensions. China will now have the European Union as the largest trading partner followed by south east Asian countries, and other regions. China decided that its priority is technological development and was unwilling to meet U.S. demands to reduce its efforts for technological competition and access to western technologies. Instead opting for shifting it economy away from dependence on exports to the U.S. in a gradual way. The other demand of the U.S. for stopping state subsidies is also a concession China is not willing to make as it sees it as an economic feature of its business model that is working and a competitive advantage.  This leaves the U.S. with a limited win so that trade and resulting jobs can be brought into favoring the U.S. a key Trump goal, and not a win in the technological competition with China which will continue. ...

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How Ohio which lost quarter million jobs since 2005 and is skeptical of free trade policies that cost jobs at home is being pandered to by the Clinton and Obama campaigns in primaries March 4, 2008, before a Presidential contest. Criticism of Nafta by both candidiates and a call for 27.5% tariff on Chinese imports as action against China for manipulating exchange rates. The working class white male, steel worker or factory worker is becoming important part of the determiners of this election campaign for primaries and for President. See his concens in the link in the WSJ. One thing is for sure a tariff on Chinese goods would upset a delicate trade balance that has existed for the last 2 decades. Its also ironic as China is finally shifting policy that will make Chinese goods more expensive in the USA, which is already apparent in apparel on American store shelves. And exchange rates are gradually shifting to add to price pressures inside the USA. Whats more the Fed finds it more difficult to raise rates while inflation picks up so a tariff would add to inflationary pressures and lower consumption in the US. See the links on this under China inflation policies. ...

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The slow growth on spending in services is affecting economic recovery in the U.S. in 2011-2012. Spending on discretionary services since the second quarter of 2009- other than housing and health care- is up 2.8% according to Wall Street Journal analysis of Commerce Department data. This is affecting gym memberships, eating out, air travel, and other postponable purchases. By comparison spending on consumer goods is holding up better. Spending on goods was up 9.1% in the same period. This shows up in sales of autos, flat screen televisions, and other electronics. Alan Krueger, chairman of the President's Council of Economic Advisors, says services account for about half of GDP, and over half of jobs, and points to the lack of growth in discretionary services.

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Unorthodox cabinet nominees- Kash Patel at FBI, Tulsi Gabbard at Intelligence get nominated. Others where the nominee is supported broadly by moms and parents, and many senators Rand Paul and Ron Johnson who are highly enthusiastic, are RFK Jr. for Health Secretary who still faced questioning from Republican Kennedy and other Republicans. All of them get nominated by Feb 15, 2025. Republicans in Congress stay together, Democrats do the same strangely opposing everything on the other side, including action on obesity and chemicals in food, drug industry practices they have been railing against for years that are RFK's agenda.  By tapping into different ideas just because they are good, make common sense, and not worrying too much about whether it is from the opposing Kennedy clan, and willing to take some risk with Patel and Gabbard, try youngsters such as Pam Bondi at Justice Department, Elise Stefanik at the UN and Kate Leavitt as Press Secretary, a woman Kristi Noem in the toughest job there is today at Homeland Security, DJT and Chief of Staff Susie Wiles have put forward a different set of people highly motivated, more than a bit rambunctious and boisterous, to get things done on immigration zero illegal migrants, zero fentanyl deaths, and zero deindustrializing technology transfers to the Nation's competitors, and zero play except on a level playing field in trade and business. ...

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A former Apple and H-P executive, Jean-Louis Gassee, says the Apotheker decision to exit the PC and tablet business comes from a corrrect evaluation that it is becoming more of a commodity business than ever before, with falling prices and margins. Even a good manager could ony do so much, maybe increase the margins by one or two points, says Mr. Gassee. Apple's profit margins come from its software capabilities and pioneering of new devices that created the kind of demand and exclusivity which other competitors cannot match. Either they had no comparable software capabilities and experience, or lacked the combination of CEO capabilities that Jobs could bring, pioneering software and years of expertise of working with hardware suppliers to create new products.

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An off the cuff remark by Romney in Nashua, New Hampshire- "I like to fire people who provide services to me"- referred to health insurers that are not providing good care. Perry, Gingrich and Huntsman, the other candidates in the Republican primaries seize on this reference to firing, and another about pink slips made by Romney, to focus attention on the people Romney fired at the companies he acquired for Bain Capital. Huntsman tells reporters in Concord- "Governor Romney enjoys firing people, I enjoy creating jobs." Gingrich tells NBC's "Today" show- "Look I'm for capitalism, but if someone comes in, takes all the money out of your company and then leaves you bankrupt while they go off with millions, thats not traditional capitalism."

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"Trees not Warehouses" read signs protesting the building of more warehouse space in the US as residents protest the bringing of more noise, pollution and heavy duty trucks to their neighborhoods.Companies added over 1.5 billion square feet of new industrial space across the US from 2017, says this report in WSJ. A similar wave of building industrial space is taking place in Europe for warehouses. Communities from Pittsburgh to Madison, Wisconsin and neighborhoods in expanding logistics regions in Southern California and eastern Pennsylvania. Many say their communities are under siege. To get goods to people faster companies are still planning but have not made the shift to bringing construction back home or closer to home so that this kind of huge warehousing space is no longer needed. Much of this warehousing space may no longer be needed as more sustainable, more reliable,  shorter supply chains take the place of current ones that have concentrated all manufacturing in one country, China, at the hidden costs to local communities and companies. Through many hidden costs that have not been fully quantified in terms of quality of living in communities, loss of jobs and infrastructure through loss of tax revenues, carbon footprint of products shipped over thousands of miles, hidden logistics costs, rampant inflation in logistics costs, and significant loss of manufacturing knowhow that cannot be easily replaced. This is a result of decades of building such supply chains that no longer fit the needs of today. ...

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Biden's address to Congress after three years of the pandemic marks a turning point for America like Lincoln in 1962 and FDR in 1933. As Biden surveys the damage done to the country not just by Covid loss of 1 million lives, he sees the closing of factories and abandoning of communities that depended on them all over America, abandoned by administrations of either party. Which has led to a loss of faith in the fairness of the system and of democracy itself.  "And two years ago democracy faced its greatest threat since the Civil War. And today though bruised, it remains unbowed and unbroken. . . That's always been my vision for this country, and I know its many of yours. To restore the soul of this nation. To rebuild the backbone of America, America's middle class." Biden sees a complete rebuilding of America to bring back manufacturing, restore American leadership in manufacturing. And invest three hundred billion dollars for the effort that will create jobs and new opportunities.  "For decades, the middle class has been hollowing out, and more than- and no one administration, but for a long time. Too many good paying manufacturing jobs moved overseas. Factories closed down. Once thriving cities and towns that many of you represent became shadows of what they used to be. And along the way, something else we lost. Pride, our sense of self-worth. I ran for president to fundamentally change things, to make sure our economy works for everyone so we can all feel that pride in what we do. To build an economy from the bottom up, not from the top down. Because when the middle class does well, the poor have a ladder up, and the wealthy still do very well. We all do well." "Folks I've been criticized for saying this, but I am not changing my view. We're going to make sure the supply chain for America begins in America. The supply chain begins in America." "And when we do these projects- and again I get criticized for it but I am making no excuses for it- we're going to buy American. We're going to buy American. Folks, and it's totally consistent with international trade rules. Buy American has been the rule since 1933. But for too long, past administrations, Democratic and Republican, have fought to get around it. Not anymore. . . Folks my economic plan is about investing in places and people that have been forgotten. So many of you listening to me tonight, I know you feel it. So many of you felt simply that you've been forgotten. Amid the economic upheaval of the last four decades, too many people have been left behind and treated like they're invisible."   ...

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Chinese president Xi's determination to make good on the slogan "Housing is for living, not for speculation," by imposing a property tax on homes in 30 cities, is facing resistance within the Communist party and from local governments. Mr Xi hopes to squeeze out the excesses of the adoption of capitalist market systems in China since 2000. China's government opted to get feedback on this idea and the feedback is largely negative forcing the government to scale it back and look at other alternatives such as affordable housing to make home purchases accessible.  Some reasons for the pushback are that it is becoming a social stability issue and risks alienating officials within the ruling party and homeowners. The fact is that 90% of urban Chinese families own their homes and housing related industry makes up about a third of China's output. Also significant is that 80% of China's wealth is tied up in real estate. What could happen is that if housing prices drop in China urban consumers might cut back on spending because they feel poorer. Party officlals advised against introducing property tax in 30 cities. Now it is scaled back to ten cities, and a new law could take till 2025 to introduce property taxes in the whole of China. Cities that are likely to be used for the property tax now are Shanghai, Chongqing, where an annual charge is levied on second homes since 2011. Cities added to the list would be Shenzen, Hangzhou, China has financed much of its industrialization through land sales by the Communist local governments in a country where land ownership was with the national Communist government after the revolution in 1949.  Mr. Xi wrote in Qiushi party journal that "we should actively and steadily promote the legislation and reform of real estate tax, and do a good job in the pilot work." Local communist governments get about one third of their revenues from selling land to property developers, and they are anxious that a tax on real estate would make demand and price for the land they sell to drop drastically. To get some idea of this- the local governments had $1 trillion in revenues last year. ...

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XI Jinping tells China's National People's Congress that "western nations- including the US- have implemented all round containment, encirclement and suppression against us, bringing unprecedentedly severe challenges to development." Addressing the private sector Chamber of Commerce representatives which create significant number of jobs in China he said the Communist Party "has always regarded private enterprises and private entrepreneurs as our own people, and will always support them whenever they run into difficulties." Job creation in China is a challenge with high youth unemployment estimated at about 20%. The pandemic worsened the situation for state finances and for unemployment for migrants, the construction slowdown has added to this. The burden of trillions of dollars of local government debt increased during the pandemic with the central government lacking the resources to help, creating problems in the local economies.  This WSJ report says Xi's speech seeks to present his government's performance in the light of these challenges and future challenges as growth slows in China. The trading relationship with US-EU added to employment and income problems for China's economy and people, yet it had one weakness an over concentration in manufacturing in one country that European and US business placed in one country. The building of a  new supply chain that creates manufacturing in other countries to reduce this concentration, and the limits placed on access to western technologies by China to protect US-EU in competition, places new development challenges for China, which Xi alludes to. In the past China was able to use huge stimulus to tackle its debt by creating more growth that supported this debt creation. The pandemic may finally have reversed this as trillions of dollars of debt have built up, and construction of homes and infrastructure has reached a saturation point. This is the kind of situation that Japan entered in the 1990's after three decades of torrid growth and development rates. History is being repeated as China like Japan is entering a new phase of an aging society. In this sense the challenges China is facing are very different from that of Russia. Creating jobs is a perennial problem in India and China with their large populations and rising aspirations of people after centuries of underdevelopment, something that Europe including Russia does not face in anywhere to a similar degree. in this sense there is more in common between the EU and Russia even when they are in a war, than Russia and China, and China has more in common with India. The struggle in Europe as Cambridge historian Brendan Simms has pointed out in his History of Europe, is more about the balance of power which is the story of European history since the 1450's where no one country has been allowed to act with impunity in invading its neighbors and other countries formed a concerted group to prevent this. Be it France, Austria, Britain or Russia that acted seemingly with impunity. China has little to do with it or Europe's history. President Biden is right to say that the US only competes with China in the economic and business fields, and seeks to find common ground on climate change and food insecurity. The US has supported China throughout the twentieth century since the time of Woodrow Wilson in 1913, around the period when Tsinghua University was established with US help. The US helped China during the Japanese invasion and the Cold War period ended with renewed relations.  ...

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Joanna Stern of the WSJ uses the original iPhone that came out in 2007 for one day in June 2017 and sees how it felt to use the introductory version. The original one worked on a 2G cellular network. It took about a minute for the president's Twitter feed to fully load in the old phone's Safari browser, it now takes 5 seconds. A lot has changed with the smartphone revolution in ten years. Lunch spot search results, Stern points out, might take longer than the time to eat lunch in the Maps App with that old phone. No emojis, predictive text, no Siri, and no third party apps, no Apple Music or Spotify, all that came later. The 2 megapixel camera took decent shots but not without good light. What is useful in Joanna Stern's little experiment is that it makes one reflect on how quickly people forget, how so much is now taken for granted as smartphones change the way people live their lives and interact with technology on a daily basis. Not mentioned here is how common smartphones have become with the Android versions made in China offering so much more for the budgets of ordinary people. And how it has changed the lives of billions of people in China, India, other parts of Asia and Latin America, bringing them into contact with the outside world. What is also interesting in this sense is that what took a huge effort over many years and many disappointments- the idea of a touchscreen that works- shows what an idea and the courage to persist in the face of innumerable hurdles can accomplish. See the link to how  Steve Jobs accomplished this. Daisuke Wakabayashi talked with Apple engineer Greg Christie in his article-"Apple Engineer on iPhone's Birth," Wall Street Journal, March 26, 2014. Christie had worked on a digital personal assistant at Apple in 1996, one that had tried the first touch screen Apple made. The device failed in the market. In 2004, eight years later the touch screen is the idea Jobs had Christie work on again. Many frustrations and obstacles later the first smartphone was developed by 2007. It took 10 years and undaunted effort which is the Apple story under Jobs. ...

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Side work earns book royalties of $2 million for Barrett on "Listening to the Law" and Ketanji Jackson $3 million Sotomayor and Gorsuch also have books and royalty advances. This provides the public with a closer view of the Justices on the highest Court in the Nation. It also means Justices live a sheltered life away from the concerns of ordinary Americans about cost of living, cost of health care and pharmaceuticals, cost of childcare, cost of education, cost of fentanyl and other drug trafficking to American families and mothers. During the Depression only three Justices the most prominent of whom were Harlan Stone of New Hampshire and Wendell Holmes of Massachusetts supported New Deal legislation to provide government help with other Justices rejecting New Deal legislation right in the middle of the Great Depression when people were literally without food and shelter, without jobs and in despair. Today there is a permanent exhibition of Harlan Stone in the US Supreme Court for the longest service on the Court. It took till 1940 for FDR to appoint new Justices to get the Court to support the New Deal. Today Justice Barrett is a lone voice among Conservatives willing to listen to all opinions on both sides along with but more than Justice Roberts. This is heartening to both sides. Barrett like Justice Sandra O'Connor before her puts great importance on the Constitution's intent and wording, its pages are in her book. O'Connor from a rural ranch in Arizona carried the Constitution with her at all times and had her own books- the Lazy B about growing up on a ranch on the Arizona- New Mexico border in the middle of big country, big sky, so wide an expanse that she writes about it in her preface to her next book The Majesty of the Law citing Wallace Stegner. ...

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WIth governments of conservative parties in power in France, Germany and Italy, taking steps to help industries and companies affected by the financial crisis, and working to protect jobs, these parties have shelved their market oriented reforms and are enacting policies that protect workers. As a result they are becoming stronger and the socialists and social democratic parties are looking weaker, especially when these parties in France and Germany and Italy have fractured into many groups. Another reason the conservative parties are popular is that by preserving and strengthening the social safety net for health care and by strengthening infrastructure and public transport investment, and exercizing good judgement and pragmatic and unideological based policy in a global economy facing unanticipated problems, they have come to be seen as reliable.

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China's tariffs on US products could be called self-respect tariffs as US exports to China are small compared to China's $1 trillion surplus a year. $143 billion mainly oilseeds and grains! US business not willing to rely on US labor created the outshoring that built Chinese industrial growth, shipping out technology in the process, that created this situation. Consultants to Apple at the time such as myself bringing Total Quality of Management from Japan to the US, could see the failure of production quality at the Colorado Springs plant just before Steve Jobs returned to the company in 1998. About 20-25% of PC product was defective on the production lines seen with my own eyes. Looking back I believe it was not just the workers but the managers and engineering that needed to guide and motivate the workers with new ways to build in quality control. These were the days when Apple's Steve Jobs hired Tim Cook to revamp production and ship it to China. American workers got blamed. Yet as Jim Carlton shows in "Apple the Inside Story of Intrigue, Egomania, and Business Blunders," by 1996 a new German CEO Michael Spindler 1993-1996 had driven the company to the ground. The struggle with Microsoft gave Jobs an idea- by shifting production to a low cost location he could make the high margins to outinvest all competitors with new products-ipods, iphones, ipads. There is nothing wrong with American workers and their craftsmanship. Timeline- Steve Jobs returns to Apple 1997-1998 Tim Cook is hired from Compaq to revamp manufacturing in 1998 1999-2000 - the strategy is made to shift all of the production to China. Jobs could generate the margins and quality to challenge Microsoft, and profits to invest in new products 2020 -   the weakness of the strategy is apparent with supply side shock for chips and computers with the pandemic stopping shipping 2024 - after taking small steps to shift production to India does little to shift back to America 2025- Apple facing serious tariffs and the country's mood shifting to Make in the USA tells the new US president DJT it will invest $500 billion to shift production back to America. ...

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Seib of the WSJ compares the Reagan election in 1980 with Trump's bid in 2016. He finds the idea of an outsider when the public mood was for change favoring Trump, but says the comparison with Reagan falls short because Reagan had behind him 8 years as governor of the largest state in the country, and a bid for the nomination 4 years earlier. He also had personal positive approval ratings of about 70 percent compared to 27 percent for Trump.  Reagan's first trp after the convention in 1980 was to Alabama to win the support of George Wallace people in the Deep South. His focus was on reuniting all parts of the Republican Party something absent in 2016. Seib's comment about Trump being stronger on the economy is not clear. With the economy recovering, and slowing down as the presidential election approaches amid increasing uncertainty, it is possible that voters would not want to risk abrupt and sudden changes with an untested candidate. Working class voters could still see some of their concerns for change addressed by the Bernie Sanders part of the Democratic platform with help in college tution, addressing wage concerns, and opposing export of jobs, when Trump's program gives few specifics. Another difference between Reagan and Trump is that Reagan had put together an economic team under Shultz which was able to win credibility with an actual plan to implement in the first 100 days. ...

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Jon Gertner makes several critical points about the importance of supporting and investing in manufacturing. The U.S. private sector in new industries such as alternative energy, and electric cars is competing not just with the private sector in Germany, S. Korea or Japan. It is competing with the governments of these countries which are investing heavily to build innovation and jobs in their home countries. Innovation, design and manufacturing are woven together in these new industries in a manner that is different from the iPhone/ iPad/ Search algorithms /Facebook software type industries dominated by names such as Apple, Google and Facebook. The software industries are the opposite of jobs intensive industries with Facebook having 2000 employees and Google having 29,000 employees. By comparison the lithium battery industry could generate over 62,000 jobs in the next 10 years, and the electric car industry as a whole with its supplier networks could generate much larger numbers of jobs. Because of the advanced technology involved these are good well paying jobs. The finance industry in the U.S. is attracted to the quick returns in the software related fields, leaving a gap for the American government to fill a role nurturing these industries. This would be similiar to the manner that the German and Japanese governments do working with their own private sector. The private sector in the U.S. needs only the early nurturing and can operate on its own by innovating its way to competitiveness in manufacturing and cost after the early years. Because of missteps in failing to support manufacturing in the U.S., the U.S. may have to import some of the technology from countries such as Japan and S.Korea to make up for these missteps. This is happening in the lithium ion battery manufacturing technology and facilities, which experts say is being successfully imported from these countries to the U.S.. The Obama administration has provided $2.5 billion dollars from the stimulus investments to support projects of 30 companies operating in the advanced battery technology field. This includes companies such as A123 Systems and LG Chem Power in Michigan. As a result of these efforts the Department of Energy estimates that by 2015 the U.S. will have the capacity to manufacture 40% of the world production of lithium batteries for the autombile industry. In 2009 the U.S. had capacity to manufacture 2% of the batteries....

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German management consultancy Roland Berger says in astudy that the cash for clunkers plan in Germany is likely to backfire by pulling in sales from 2010. It says car sales in Germany may fall by 20% in 2010, about 90,0000 jobs may be lost, and one in 2 car dealerships could be threatened with failure. GDP in Germany it says could take ahit. Roland Berger's partner Ralf Landmann says the German car market is good for 3.0 to 3.3 ,million cars per year. With sales in 2009 expected to be at 3.7 million, the forecast for 2010 are at 2.7 million to 2.8 million. Economist Carsten Dreger of DIW research institute in Berlin goes further. He says the cash for clunkers program was cannibalizing sales of other consumer products, in addition to taking sales from 2010.

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GMAC under Cerberus 51% ownership is actually restricting credit for purchases of GM cars by insisting on credit scores over 700. To the point that GM is encouraging dealers to look for financing outside GMAC. Not a good state of affairs. Cerberus motivation may be that it wants the rest of GMAC instead of Chrysler and wants GM to give its 49% of GMAC in exchange for Chrysler's merging operations with GM. But anywhere upt half of Chrysler employees could lose their jobs in such a merger because there is no time for long term integration and the costcutting would be immediate. Again a bad state of affairs. And merging a money losing company with another money losing company at the beginning of a deep recession is not the kind of merger that has the chances of some success.

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High unemployment and sluggish growth in hiring-only 1.1 milllion jobs added in 2010 and only 103,000 in December 2010, according to the Labor Department- will restrict profit growth. Industries such as airlines, food, construction and telecom that lagged the recovery, will continue to face difficulties. Airlines face higher fuel prices and labor wage pressures. Standard and Poor's expects profits for the S&P 500 Index companies to reach a 3 year peak in the ist quarter 2011, then move lower for the next 5 quarters. Earnings reached $22.62 a share for these companies, up 29% from one year ago.

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Brazil's growth is seeing a surge in the size of the middle class. Since 2003 about 32 million people have entered the middle class and 20 million haven risen above poverty, in a country of 198 million people, according to the Center for Social Policies at the Getulio Vargas Foundation, a Rio policy group. Marcelo Neri, the foundation's economst says 8.5 million jobs were created since 2003 and an active social policy has been pursued in one of South America's most unequal societies.These policies provide food assistance to the poor and low interest credit for first time buyers and small business owners.