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Mitt Romney on the weaknesses of America's position in the Middle East in policies for Syria, Libya, Egypt and the rest of the Arab world. The problems with Iran and the lack of results in bringing an end to Iran's nuclear program.

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A look at Israel at 70 by the Economist magazine shows a country that has combined early achievements of socialist governments such as free health care system and good education system with the addition of 1 million immigrants from the collapsing Soviet Union, to build a highly trained technically skilled workforce and international companies.  It says the Israeli Arabs are still poor and unable to integrate. With ultra Orthodox Jews they make up 30% of the population, and many of them who do not work. Infrastructure has suffered from lack of investment and public transport is in poor condition. About 4.5 million Palestinians in West Bank and Gaza remain a continuous source of tension with no settlement in sight. The shift of the capital to Jerusalem is recognized by the U.S. Trump administration, a win for Israel, but leaving the divisive politics of Mr. Netanyahu in place. So that with the growing economy, there are social problems and political division which need to be addressed as much as the economy. A problem left for another administration, another leader from possibly a revived Labor party and another day. ...

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Spain will allow a European banking supervisory authority to visit banks and exercize financial supervision over banks receiving aid from the EFSF, the EU rescue fund. In addition investors including small retail investors will have to take losses to reduce the loans required to recapitalize Spanish banks.

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The cost of tution for four year colleges has doubled in the U.S. since 1985 even after adjustment for inflation, according to the College Board. Over 3 million households in the U.S. owe more than $50,000 in student loans. Ths is ten times the figure of 300,000 in 1989, and about four times the figure of 794,000 in 2001. Upper middle income families with incomes between $94,000 and $205,000, based on Wall Street Journal analysis of U.S. Federal Reserve data, shows they owed an average of $32,869 in college loans in 2010, up from $26,639 in 2007, after adjusting for inflation. This is affecting the choices parents and students in the middle class are making of colleges, preferring to go to second tier colleges to better manage the costs of tution.

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The author is a resident scholar of the American Enterprise Institute. He says conservatism and the Republican Party have failed to recognize the problems of the American working class, leading to the rise of Trump. He adds that it will take more than one election cycle for Republicans to change this, it will take a lot more effort lasting many years. Speaker Ryan arranged a forum on working class problems, poverty and lack of opportunity, but only after Trump had made appeals to older white working class Americans who have done poorly in the last decade, making him the front runner in the race, and relegated Jeb Bush and Marco Rubio to single digit support.

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Kirkpatrick and El Shaikh give an account of the days and events leading to the ouster of president Morsi of Egypt in July 2013. Morsi and the Muslim Brotherhood forge an alliance with the military under Gen. Sissi, a younger officer open to working with the Muslim Brotherhood in power. Morsi is elected with the support of liberals and the military under Gen. Sissi against a Mubarak era candidate. Morsi wins with 51% of the vote, which liberals say would not be possible without their help. Morsi fails to form an inclusive government. His authoritarian tendencies from decades of working under a strictly hierarchical leadership in the Brotherhood, a personal style that does not take into account opposing views, and a lack of experience in democratic forms of governance where the opposition, the media and the judiciary, are important to balancing powers of the executive, lead to alienating liberal opinion and younger protesters who initiated the struggle against Mubarak. Gen. Sissi tries repeatedly to achieve a compromise including appointment of a new prime minister and cabinet but Morsi rejects all efforts, leading to the takeover by the military and appointment of the chief justice as president and ElBaradei, as prime minister....

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The new generation of Communist party leaders that takes over from Hu Jintao and Wen Biao. Chongqing region's party chief, Bo Xilai is one of the leaders expected to be part of the senior communist leadership, along with Li Keqiang as prime minister and Xi Jinping as president. Xi and Bo are sons of communist party veterans from the Long March. Chongqing was the main base of the Communist party in the 1930's and 1940's, as Mao and the communists fought the Nationalists and then the Japanese. Bo has suppressed the influence of Mafia elements in the region, and is campaigning for a place on the Politburo's Standing Committee with a call for a return to Maoist values of "conscientiousness." Chongqing's state companies are supporting a project launched by Bo in 2010 to build 800,0000 subsidized apartments in 3 years, with an investment of $18.5 billion. This comes as income and wealth gaps in the country are widening and housing is becoming increasingly unaffordable for ordinary wage earners....

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In this interview with Varoufakis, the Greece finance minister in the negotiations with the European Union and the IMF in 2015, Suzy Hansen provides a detailed account of Varoufakis's view on the Greece bailouts and a sense of looming failure in the negotiations. Varoufakis says he was willing to make concessions by holding off on action on the minimum wage, but cannot make concessions on paying out pensions to the elderly. Varoufakis concedes he is not a good negotiator or a politician, and negotiating skills were critical for Greece to tap into the goodwill in the eurozone's southern region to win a package that would give the Greek economy a chance to grow. Additional handicaps may be his outlook which was shaped in his younger years by the "junta years" when Greece was ruled by a military dictatorship, and a family history relating to Greece's civil war between royalists and communists. In this interview he compares himself to Margaret Thatcher, who he says should not be held responsible for the state corporatism following the war, remarks that may show a finance minister out of touch with the present situation. There is no lack of criticism of the way some of the bailout actions took place to protect French and German banks in 2011 and 2012- in fact some of the strongest criticism, well formulated, was on the editorial pages of the Wall Street Journal. Yet Varoufakis had a special responsibility to build on the goodwill generated after years of austerity, and the efforts of the Samaras administration to work with the EU. On both counts he appears to have failed as he realizes that the 4 months of uncertainty ending in a total lack of communication between both sides, has cost Greece by worsening the economy. Posturing and personality, compounded by inexperience, may have distracted from the real work of serious negotiations. The IMF chief Christine Lagarde had emphasized at the outset the need for Greece to fix its tax system with high degree of tax evasion, an issue on which Syriza could have acted quickly. Some of the period before the elections was used to prepare the EU for negotiations with Syriza, and Syriza needed to be prepared on this issue. Yet no action was taken on a plan to tackle this issue- on the grounds, says Varoufakis, of lack of time. He only rationalizes this when he says it is only a short term cost for the long term future of young people. ...

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Are bubble type incentives inflating the size of the U.S. auto market in 2012-2013 as happened in the past decade. This could hurt future sales. Japanese automakers have sharply increased incentives to make a come back after the tsunami and earhtquake restricted supplies. U.S. automakers are reluctant to go further down the incentives route that hurt them in the past decade. The result is higher inventories for Detroit automakers, another undesirable result. General Motors had 5 months of Malibu supply at dealers in Nov. 2012 at the current sales rate, Ford 4 months of Fiesta subcompact inventory and 73 days of total inventory overall, Chrysler 6 months of 2013 Dodge Dart inventory. GM has 3 months of Chevy Cruze inventory, and 138 days of Chevy Silverado pickup truck inventory. GM decided to idle one of two plants making the Cruze. In contrast Toyota has 2 months inventory for the Camry and Corolla. The largest incentives in the U.S. market are from Nissan, a 55% jump to average $4,273 in Nov. 2012 from $2,764 in Jan 2012. Honda increased incentives to average $2,428 from $1,978 in Feb. 2012, a 23% increase. Toyota up to average $2,075 in Nov 2012 from $1717 in Jan. 2012, a 21% increase, according to TrueCar.com, with zero percent interest rates not counted in these numbers. Ford offers $2895 off its 2013 Focus sedan, which has 2 months inventory. General Motors offers between $2900 and $3500 in average incentives , according to TrueCar.com....

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Under new proposed changes carbon emissions permits would be sold to industry and heavier polluters would have to pay more. And to make it fair to European companies exporters in other countries like China would have to buy these carbon permits to be able to export to Europe. There is similiar discussion about this in the USA which expects caps on greenhouse gas emissions in a few years. These changes wouldn't go into effect till 2013 at the earliest and industry will be trying to create a level playing field by then. Countries like China and India because they are developing have been exempt from the greenhouse caps under the Kyoto Protocol which expire 2012. Under the Kyoto Protocol which Europe signed and the USA did not sign, European companies are giving carbon permits free to emit a certain amount of greenhouse gas every year, the heavier polluters have to buy the permits from the ones that pollute less creating an incentive for companies to reduce emisssions.

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The European Union, especially Sarkozy of France and Merkel of Germany want to see strict rules on banker's pay backed up by "the threat of sanctions at the national level." Both leaders see this as an urgent topic for the G20 meeting in Pittsburgh. They want to prevent the reckless lending and risktaking that caused the last financial crisis, where banker's bonuses were based on taking these kinds of risks.

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In China's state banking system larger banks will get more state support than the smaller banks. Smaller banks such as Everbright Bank and Bank of Nanjing have 20% of loans made to local government financing vehicles, this compares with 6-7% for larger banks such as ICBC, Bank of China, China Construction Bank, and Agricultural Bank of China. Because of the poor asset quality and high risk of such loans the smaller banks are likely to be the first to face trouble in a financial crisis.

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Former Defense Secretary Leon Panetta's "Worthy Fights" provides a better perspective on the Syria-Iraq conflict- about a conflict in Syria that was the result of president Obama not acting when a "red line" of the use of chemical weapons was crossed. A similiar point is made by U.S. Secretary of State Clinton. Both advisors to Obama were ignored in favor of Mr. Donilon and other White House adviosrs who lacked the experience of Panetta and Clinton. On the Iraq conflict Maliki's misguided sectarian policies were not sufficiently constrained by U.S. effort to preserve earlier hard won gains under the Bush administration. At the end of the Bush administration Iraq was returning to a peaceful period and the war had largely been won against old Saddam loyalists in Anbar province. Ultimately Obama's lack of experience in foreign policy and his failure to heed the advice of people with that experience such as Panetta and Clinton, was the basis of the crisis inadvertently created in Syria by a tendency of inaction. The Syrian situation was not fully grasped as leaving Sunnis to suffer Assad regime air attacks creating 2 million refugees, something that should have prompted action by the international community. With Sarkozy gone in France and Cameron unable to convince the U.S. alone, or move forward with the French unilaterally, the inaction phenomenon of the Obama White House left the entire Sunni communty throughout the Middle East without any support as they watched the destruction in Syria. ...

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U.S. Federal Reserve governor Daniel Tarullo tells the Council on Foreign Relations that so much remains to be done four years after the financial crisis. The law firm of Davis Polk says 67 percent of deadlines were missed for new rules required to be set in place by the Dodd-Frank legislation, including the Volcker Rule. Tarullo said: "It is sobering to recognize that more than four years after the failure of Bear Stearns began the acute phase of the financial crisis, so much remains to be done." Tarullo fears that crucial momentum may be lost because of the long delays stemming from resistance by the banks. Tarullo met with bank CEO's in April 2012. Banks have protested that Fed stress tests have not revealed the parameters for the testing. Tarullo's response given at a recent Fed conference in Chicago were that this would let banks game the exercize by running the Federal Reserve model and not improving risk management and capital planning, making this a mechanical compliance exercize. Banks have particularly opposed a requirement that limits the risk in business between two banks to 10% of their credit risk....

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Shigeru Ishiba was reappointed LDP party secretary-general in Japan. Ishiba served three terms as defence minister, is popular with the rank and file and the public. He has a good grasp of security issues. He will be the No. 2 person in the cabinet after prime minister Shinzo Abe. Ishiba was the first LDP official to give a specific trading range for the yen by publicly calling for a range of 85 to 90 yen to the dollar. The yen closed at about 85 yen to the dollar on Dec. 25, 2012. Two women join Ishiba and Abe in the leadership positions. Seiko Noda is now chairwoman of the party general council. And six term parliamentarian Sanae Takaichi is policy chief for the LDP.

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A look at the history of the founding of Pakistan and the 60 years since, looking all the way back to Muslim League's activities in the 1930's under Jinnah, and the failure of politicians and the military to help build Pakistan and improve the lives of its people. One by one the generals and the politicians, including Ms Bhutto and Sharif, have all failed and the dim prospects that it would be different this time with a new elected government.