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Senator Mitch McConnell, the Republican Majority leader in the U.S. Senate has come up with a new health care bill that is aimed at winning over reluctant Republican Senators. Two taxes on high income people on 3.8% investment income and a payroll tax of 0.9% on incomes over $200,000 for individuals and $250,000 for couples are retained in this version of the bill, which adds $231 billion over a decade. Some of this is used to offset rising premiums in the new bill, and provide additional funds. The deep cuts to Medicaid are retained and Senator Collins of Maine says she is opposed to the new bill because this will hurt people in rural areas of Maine, and does nothing to change this. Senator Rand Paul of Kentucky is also opposed to the bill. Opposition comes from moderate Senators opposed to deep cuts to Medicaid in Republican health care alternatives to president Obama's Affordable Care Act, and from conservative Senators opposed for other reasons.  Senator Graham of South Carolina and Bill Cassidy of Louisiana introduced their own version just minutes before Mitch McConnell brought up his revised bill. All Democratic Senators are opposed to the Republican bill and call the deep cuts to Medicaid disastrous for lower income people.  ...

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This opinion piece in DW.com says India's prime minister should not isolate prime minister Sharif of Pakistan, as he had no part in the escalation of tensions in Kashmir. Foreign and military affairs are now run by the Pakistan Army, and isolating Sharif only entrenches the Army it says, which has kept up tensions similar to the situation in 1999 with the Kargil crisis when the Pakistan Army initiated a conflict in Kargil region. At that time Indian premier Vajpayee and Pakistan premier Sharif were improving relations. 

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Paul Peterson, a professor who heads the Program on Education Policy at Harvard, says that public school education has not done as well as private or charter school education. In two areas character or values, and school discipline, public schools lag far behind private schools or charter schools. Private schools score 59% and 46% in these two areas, public schools lag far behind at 21% and 17%, in the 2016 Education Next Survey, says Peterson. He says by appointing Betsy DeVos as Education Secretary, the Trump administration sees the need to think how public schools can benefit from improvement in these areas.

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Indian rating agency Crisil says expeditious settlement of stressed assets in India's banking system is needed for the private sector to play its part in the country's infrastructure development. In the last 4 years much of the effort in infrastructure was undertaken by the government. Crisil CEO Ashu Suyash, says Rupees 50 lakh crore needs to be allocated for capital investment in infrastructure for the 5 year period 2018- 2022. About Rupees 3000 crore investment per day is required. In addition to improving the banking system, other actions needed are new private-public partnership efforts, front ending of projects, and a deepening of the infrastructure financing system. Infrastructure investments have suffered from lack of investment in India and this should be a top priority for the government, say experts. This includes tapping into pension and insurance funds under new arrangements. The central government has announced a 7 lakh crore investment plan to build 83,000 kilometres of highways by 2022. Crisil has developed an "investability index" to track and measure the attractiveness of such projects.   ...

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Note this comment by the head of the U.S. National Highway and Traffic Safety Administration in the Bush Administration. NHTSA Administrator Jackie Glassman says the average mileage for the fleet today is 30 miles per gallon and raising the current standard of 27.5 mpg for an automakers passenger fleet by 2.5 mpg won't put much pressure on automakers. The Bush administration- and the prior Clinton administration- has not committed to making major improvements to the national mileage standards, with the current standards of 27.5 mpg not having changed since 1990! Glassman says the NHTSA starts with the manufacturers product plans and then sees whether it can get additional fuel savings with these plans. This suggests an NHTSA that is more follower to the auto industry rather than a leader in setting the standards that the auto industry then tries to achieve to reduce the U.S. dependence on foreign oil. Also note that it takes 2 years for things to change, as it will take months for rule changes, and 18 months have to be given to automakers to implement the new rules. By 2008 the fuel efficiency based on market competition and Toyota focussing on hybrids and higher fuel efficiency across the whole car lines, might well exceed any new standards that are watered down, especially if crude prices hold up. Lawsuits by attorney generals of different states and the Lugar-Obama bipartisan bill pushing the adminsitration to mandate higher standards are intended to put pressure on the Bush administration to come up with new higher standards. The failure of Democrats and Republicans in the Clinton and Bush years to raise standards and require the auto companies to use new technology to meet these standards with government assistance is one of the significant failures. This will affect the prospects for the U.S. economy in the years ahead....

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

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Krugman points out that a centrist solution is not the panacea it sounds. A lot depends on what it is and what is seen as centrist, if it really is centrist, and if it makes sense. A centrist proposal that leaves out tax expenditures but is different from the positions staked out by the factions on both sides of the political spectrum, and sounds moderate may not be the right solution.

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Thomas Hoenig was Governor of the Kansas City Federal Reserve Bank for 20 years. Here he talks about the dangers of "too big to fail" with Gretchen Morgenson of the New York Times. He is due to retire at the age of 65 in 2011. Hoeinig has stood for conservative safe financial practices for U.S. financial institutions throughout his 20 year old career, and cautioned against extending the government safety net for banks that engage in risky financial activities including derivatives trading. And essential element of safe financial practice and part of necessary market discipline, he has pointed consistently, is the fear that taking on risky activities or acting recklessly has a price- creditors can take out their funds if they see a banks as unsafe, and the financial institution may have to be broken up or closed. He joins Alan Meltzer in his criticism of Federal Reserve policies under first Greenspan and then Bernanke that take on the job of stimulating the economy and creating jobs through a very loose monetary policy after the collapse of a bubble. Hoenig sees the role of the Fed in such situations as a neutral player. The reason say Meltzer and Hoenig is that the Fed has not given enough thought and attention to the long term consequences of its policies. What were the consequences of the low rate policies in 2003 asks Hoenig? It promoted another bubble and the mortgage meltdown of 2008. What were the consequences of QE II asks Meltzer in an op-ed piece in the Wall Street Journal on August 11, 2011, "The Folly of Economic Short-Termism?" It has failed to revive the economy or reduce unemployment. Hoenig also points to questions of fairness and equity that arise when banks are treated differently and farmers, seniors and other groups are asked to make sacrifices....

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Brazil's infrastructure needs include port and road facilities for its agricultural exports and mining industry. Road and rail transport networks for passengers are small considering Brazil's size. The rail network is smaller than that of France and only 12% of the one million mile road network is paved. Brazilian petroleum fund Petrosal will invest in infrastructure needs. Investments are being made to upgrade port facilities by Santos Brazil, and investment in toll roads by CCR, a private-highways company. The government is planning investments in infrastructure to prepare for the World Cup in 2014 and the Olympic Games in 2016.

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A study by Charles Elson of the Center for Corporate Governance of the University of Delaware which refutes the idea that excessive compensation is needed to retain good talent in industry.

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Raghuram Rajan, former chief economist of the IMF, is appointed the chief economic advisor to Indian prime minister Manmohan Singh. He says his focus is on increasing foreign investment, including letting foreign banks operate in the country, reducing waste in food storage and distribution, and promoting new business so that growth does not depend largely on the large companies in the country.

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The inflated costs for spinal surgeries at some hospitals in California. How surgeons, doctors, consultants, distributors and hospitals operated in a flawed system to make revenue gains through overbilling, and focus on increasing the number of surgeries performed.

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As its economy slows and facing high debt levels, China benefits by an estimated $18 billion a month from lower oil prices in 2015. The estimate is from Starfort Holdings, investment and private equity group. The estimates as China benefits from lower prices of all commodities, including oil, are of about $250 billion annually as China replenishes its stocks of commodities. With $12 million barrels imported daily China is a major emerging market beneficiary, along with India, of the drop in oil prices. Continuing pressure on prices from the expected resilience in shale oil production in the U.S. with learning and the development of new production methods means the benefits are likely to continue. China has also not renegotiated price points in deals made earlier at higher prices with China and Venezuela, as it pursues its foreign interests. Stockpiling of grains and edible oils are being increased by 33% in 2015 by $24.7 billion.

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Brazil faces a debt crisis in 2015-2016. Between 2010 and 2015 foreign debt of local governments and Brazilian firms increased from $100 billion to $250 billion, and dollar debt in local currency from 210 billion reas to 655 billion reas, according to Bank of International Settlements data. State banking institutions BNDES and Caixa Economica Federal financed 35% of loans in 2010, by 2015 this increased to 55%. Subsidized loans at 5.5% by BNDES to firms make Brazilian banking a fiscal operation, requiring additional funding. Petrobras increased debt issuance enormously during this period, and now needs government support as its debt is now one notch above junk status. Interest payments on Brazil's debt is 6% of GDP in 2014. Public sector debt is 66% of GDP, and credit to the private sector is 55% of GDP up from 25% in 2005. It will take Brazil years to recover from a huge borrowing binge.