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Chris Cillizza of the WP says there simply is no "new Trump," as mentioned in the meeting with president Nieto of Mexico. The speech on the same day in Pheonix, Arizona, following the meeting with Nieto, showed the Trump of the election primaries in which he talked about the criminal activities by undocumented immigrants and about building the wall on the Mexican border. Cillizza says Trump had left the impression that he was trying to expand his base with Hispanic voters through a meeting with Nieto, but it appears that it did just the opposite with Trump's reaffirming old positions on deportation and the wall in his speech. 

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On one hand Chinese environmental officials are aware of the pollution problems in Beijing and Shanghai and other cities. Levels of nitrogen dioxide in Beijing exceed the WHO clean air guidelines by 78%. On the other hand the newly emerging middle class is seeking car ownership, and the local government officials need growth in the car industry to show good GNP and GDP growth numbers on which their performance is judged. Beijing and Shanghai and Anhui province local governments are part owners of some auto companies. About 416,000 people are employed in the Shanghai area auto industry alone and the auto industry in Shanghai pays about 900 millon dollars in taxes, according to government figures. At seven cars per 1000 population car sales are just beginning to take off. And with China's population its clearly not going to be possible to have the same level of ownership as in the US. The same is true for India. This would increase by many times the current demand for crude oil and increase emissions to the point of creating a disaster. And even today because of lax enforcement, and older models on the road, about 40% of vehicles in Beijing have no pollution controls and the other 60% have varying degrees of pollution controls. Experts say changes to the subsidized oil price policy, refineries that produce cleaner gasoline, policies to build more mass transit which has lagged behind in China as car sales took off (and probably more GNP impact from car plants than mass transit which act as inducement for local officials), and stricter fuel efficiency and auto emissions standards are needed....

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Pope Francis is strongly critical of the manner in which the capitalist system has functioned in recent decades, increasing inequality, and hurting the marginalized, the working class and poor. Pope Francis tells people during his visit to the poorest countries in Latin America, Ecuador, Bolivia and Paraguay, that the Catholic Church committed grave errors during the period of Spanish colonialism by allying with the ruling classes and creating great inequalities and suffering. The director of the Institute for Policy Research and Catholic studies at Catholic University of America, Stephen Schneck, says the Pope is reflecting a century of activism on social issues since the Pope Leo XIII encyclical in 1891, calling for social and economic fairness for labor, with the encyclical "Rerum Novarum" - or "On the Condition of Labor." The Pope's message in Santa Cruz, Bolivia, to nearly 2000 social activists, farmers and trash workers, neighborhood activists, was that change has to come from grassroots, that the local communities have acquired the knowledge which is valuable to act for economic and environmental betterment. He praised cooperatives and local organizations that enhanced the value of labor. His message resonates say Catholics because he has stayed in close contact with local communities, and the poor, working class people in Argentina. It is focussed on empowerment of local communities. In Bolivia the left government has adopted measures that attract foreign capital and investment, so that it is a model that stays away from socialist ideology, while at the same time embracing the grassroots idea of empowering local people and communties. In this way it has improved living standards in Bolivia and received favorable ratings in capital markets....

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Vietnam devalued its currency by 8.5% on Feb 11, 2011. A series of devaluations have reduced the value of Vietnam's currency by 20%. The devaluation will lead to higher cost for imported products, especially refined oil products, thus fueling inflation that is already high in developing countries. The Communist party central committee is not giving inflation fighting a priority, and instead is focussed on keeping high growth rates. The party's inflation target is 7% annually, same as 2010 for 2011, when the inflation is already estimated to be about 11% for 2010. Barclay's now expects inflation to reach 13.5% by March and exceed 15% by June. Part of the hesitation to raise interest rates and slow inflation as is happening in China and other developing countries, is the need to create new jobs for a young and increasing workforce. Vietnam's inefficient state enterprises, poor management at some enterprises, and state subsidized lending, have created problems which are putting downward pressure on the currency. State owned shipbuilder Vinashin approached bankruptcy recently with $4.4 billion in debts and poor management decisions. Another significant reason for the devaluation is the seriously precarious situation of Vietnam's foreign exchange reserves. State media have reported that Vietnam's international reserves have fallen to "more than $10 billion" at the end of 2010, compared to $16 billon for 2009 and $26 billion for 2008. This suggests a deeper crisis from years of loose monetary policy and lending to state enterprises to create China type growth rates. Vietnam still a less developed country and not equipped to handle this kind of growth, say analysts....

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The squeeze on consumers and consumer spending in Britain as wage growth cannot keep up with the consumer price index from 2007 to 2013. A widening gap between average wages and the consumer price index. Basic items such as potatoes, milk, butter, ham, eggs, apples, pork and other food items have gone up much faster in price compared to wages. From 2007 to 2013 basic food staples such as butter are up 99%, potatoes 148%, apples 56%, ham and eggs 50%, milk 31%, pork sausage 37%. Gasoline up 40%. The gap between average wages and the consumer price index has steadily increased since 2010 when Cameron and the Conservatives took office and the austerity measures were introduced to cut the deficit. Upto that time wages kept up with the consumer price index except for a period during the 2008 financial crisis, according to information from the UK Office of National Statistics. Government figures show wages up 1.1% for the 2nd quarter of 2013, much less than half the rate of inflation of 2.8% in July. The household saving ratio is forecast to drop from 7% in 2012 to 3.5% in 2013, and Britons are dipping into savings to pay for basics, according to the National Institute for Economic and Social Research. The House of Commons library compiled data shows average hourly wages down by 5.5% in real terms in Britain since mid-2010. Weak consumer spending hurts economic recovery and hopes of cutting the deficit. In the Bank of England's minutes for the August meeting policy makers said consumption growth cannot occur without increase in household incomes. ...

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The largest and most diverse parliament in German history will now convene. The 736 members of German parliament are much younger, with one 23 year old. 47 members are younger than 30 years. Michael is the most common name. 80 years is the oldest member from AfD. 83 members are from migrant families. 11% are from immigrant families. 

There are children of guest workers from Turkey. There are few doctors or healthcare workers, and not enough small business owners, and still too many lawyers. 34% are women. The Bundestag president is a woman from Social Democrats, Barbel Bas, a health policy specialist, she won 576 votes to 90.

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A study by ITEP, Institute for Taxes and Economic Policy shows the top 1% pay less in taxes on income than every other group in 42 American states. The poorest fifth pay taxes 60% higher than top 1%. The most regressive states are Florida, Washington, Tennessee, Pennsylvania and Nevada. The tax systems seen as reducing inequality are D.C. Minnesota, New York, Vermont, New Jersey. This happens at a time of growing inequality, high cost of living, and the aftereffects of the pandemic on health and mental health, with high cost of pharmaceuticals with entrenched lobbies, low enrollment of men in colleges with increasing dropouts, the huge burden of student debt on young people.

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Hangzhou, hard hit by closing export focussed factories, is trying a$100 million voucher program to increase spending. Since January, a fifth of the residents of this city have received $30 vouchers, and more vouchers are being issued. Taiwan just tried a voucher program with $102 going to each Taiwanese citizen. Taiwanese President Ma says 50,000 retailing jobs were saved and about two-thirds of one percent addded to GDP. The problem in China is the lack of a safety net and poor access to health care, that is making average Chinese to save over one fourth of incomes. Consumer spending is 35% of GDP. The government has focussed on exports, and used export generated revenues for huge infrastructure spending. With exports down by over 25% in January, the export model is fading away quickly. Japan and Taiwan have seen much higher drops in exports, and China should see even more deceleration in exports, with a lag of some months, as a lot of products made in China use parts made in countries like Japan and Taiwan. The China Development Research Foundation says one fourth of the population have no health insurance at all. Though by some estimates this number may be about two thirds of China's 1.3 billion people. Hundreds of millions of people have huge bills for treatment of serious illness that are not covered by even the most basic insurance. Public pensions cover less than one third of the workers. And an estimated 130 million migrant workers have no unemployment insurance. Even payments to the poor reach only a fraction of people eligible. The government has only tentatively moved to correct his. And outside economists say that something needs to be done in abig way to build this safety net. The government has announced a $123 billion 3 year initiative to deliver basic, universal health care and health insurance. This follows a 3 year drive to provide compulsory and free education to students through 9th grade. David Dollar, the World Banks's country director, described ameeting with Finance Ministry officials, and wrote in areport on the Bank website that the government had the resources to expand these programs quickly. Instead the government has taken a piecemeal approach when action on a large scale is needed. One of the problems may also be that to make universal health insurance, the current health system may need to be examined and rebuilt, so that economical cost effective treatments are encouraged and costs are managed effectively. This would make universal health care affordable by keeping costs manageable, in the same way that the Obama administration is trying to do in the USA. ...

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Easterly's thoughts on how the swing away from individual initiative, innovation and private enterprise hurt developig countries the last time state run enterprises and state intervention in all aspects of the economy became fashionable, in the 40's and into the 60's and 70's, costing decades of lost progress in many countries. He cautions against learning the wrong lessons from the American experience. The housing bubble and the failure of regulation to be modernized to keep up with changing financial scene and the simple failure of ethical and moderation in behaviour and good business practices teaches other lessons than simply going back to letting the state run things which has not worked in the past.

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India is running a large current account deficit with imports exceeding exports. The curent account deficit for the year ending March 31 was $88.2 billion, about 4.8% of GDP. With foreign investment declining remittances from Indians abroad are a major source of incoming capital. Indians overseas sent about $69 billion in remittances home in 2012, increasing from $63 billion in 2011, according to the World Bank. In August 2013 India's central bank relaxed restrictions on interest rates for overseas Indian rupee accounts and on foreign currency denonimated deposits. This has led to a sharp increase in remittances by Indians overseas, with HDFC bank reporting a 30% increase in remittance volumes in June 2013 compared to January 2013.

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The Federal Reserve Open Market Committe voted 7 to 3 to carry out "Operation Twist." This does not involve printing new money as was done for the $600 billion QE II Fed program. This time the Fed will shift its holdings to hold fewer short-term Treasury bills and notes and increase holdings of Treasury securities with longer maturities. The overall impact would be to increase the average maturity of its Treasury securities portfolo to 8 years from the current 6 years. The idea is to put pressure to reduce long tem rates. The Fed says the impact on short term rates is expected to be small because of its conditional pledge made in August 2011 to hold short term rates near zero until mid-2013. The impact of the Fed's move is likely to be modest considering the fact that the average rate on 30 year fixed rate mortgages is already low. It is at 4.09%, according to the latest Freddie Mac survey.

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The new budget in France is designed around two goals. The first is to take aggressive action to bring the deficit down to 3% by 2013, not a gradual program but one intended to send a strong message to capital markets that France under a Socialist government is dead serious when it comes to the deficit and debt reduction. Every 0.1% increase in France's borrowing rate would mean $260 million going into interest payments on the debt, according to Pierre Muscovici, the finance minister. France's borrowing rate is close to Germany's 1%, and the French are determined to keep it this way. The other goal was stated by Mr. Muscovici: "I don't want a policy of austerity, hitting salaries, weakening the state and turning it into a pauper." The idea being that hitting the common man would mean decline in consumer spending and lower growth and tax revenues that would create the kind of negative spiral facing Spain of declining growth and rising unemployment, worsening deficits, and higher debt payments. The way Muscovici raised the $39 billion- beyond the $9 billion in higher taxes and savings already implemented for 2012- is through $13 billion in new taxes on corporations, and additional $10 billion from new income taxes, including a higher tax rate of 45% on incomes over $193,000. Additional $13 billion will come from a freeze in public spending, so that some ministries take cuts adjusted for inflation keeping the overall budget the same. Spending cuts could come later to balance the budget as growth picks up to 2% in 2014, is the government reasoning, softening the impact. The new budget is well received by German public opinion as showing the resolve of Germany's key partner in the EU. Part of the reason the French are able to get business and people with higher incomes to contribute is that France is unique in that there is a greater consensus than in other countries on the steps needed and a sense that austerity measures targeting the middle class would be counterproductive. The aggressive action with considerations for equity and fairness also gives France the chance for a faster turnaround and avoid the problems plaguing Spain and Italy, which French public opinion and business appears to have grasped and the government's experienced ministers for the economy have successfully presented. ...

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Saudis unilaterally cut prices of crude oil without consultation with other members of OPEC at the beginning of Oct. 2014. Saudi oil minister Ali al-Naimi says there is not much point in talking to other members of OPEC as everyone does as they please. The old cooperation between Gulf states Qatar, U.A.E., Kuwait and Saudi Arabia is breaking down with each country backing different rebel factions against the Assad regime in Syria-Iraq. Ali al-Naimi who normally comes in ahead of the OPEC meetings in Vienna, which meet twice a year, arrived this time at the last minute. He said meetings should be conducted only once a year and consulting can be done remotely. The old style when he guided discussion at OPEC meetings is gone. OPEC now produces about a third of the world's oil, has large spare capacity of 3.8 million barrels a day in 2014 or 4% of global oil supply in a crisis, according to IEA. Yet it faces pressures from the increasing shale production in North America and the decline in demand from Asia. Brent crude is at about $92 in October 2014. OPEC production in August 2014 was split as follows- Saudis 9.6, Iraq 3.0, Iran 3.0, U.A.E. 2.9. Kuwait 2.9, Venezuela 2.3, Qatar 0.7, Libya 0.5, Algeria 1.2, Nigeria 1.8, Angola 1.7 (millions of barrels a day, source: OPEC)...