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The WSJ looks at Elizabeth Warren's Medicare for All plan that marks a major shift for the U.S. economy.  Households would see their costs go down by $11 trillion, boosting their ability to spend on other goods and services. Because income and wealth was highly skewed in the past three decades in one direction, the spending capacity of lower and middle income households was pushed down. This and other similar plans would help restore a higher level of spending and with it an essential element of inflation of 2-3% to the U.S. economy which was missing in the last decade. This sets the tone for the kind of broad based recovery that happened after 1950 that strengthened America's middle class and made it the core of the economy, the core of the post World War II recovery in America and Europe. The plan would be paid for by higher taxes on corporations, tax rate of 21% for corporations going back up to 35%, and reverse depreciation schedules in the 2017 Republican tax law. The argument that this would reduce business investment does not hold that much says the WSJ because amid new trade tensions business investment has declined over the last 2 quarters, and has been sluggish overall. The other source for the estimated $13 to $20 trillion cost of Medicare for All plan of Elizabeth Warren is a 6% annual wealth tax on billionaires, in an attempt to have all pay their fair share and reduce wide disparities in wealth. Mark Zandl, chief economist of Moody's Analytics, says his sense is at the end of the day from a macroeconomic view- because $11 trillion in the hands of 80% of households who could boost spending after lagging behind in the last decade- the negative effect on business investment will be cancelled out by the higher consumer spending. The overall effect and today's context is infused in this analysis. Private insurance, premiums for insurance, and out of pocket cost that the public pays would disappear in this new system where all health payments pass through the government. Health insurance premiums paid by employers would convert into a new employer Medicare contribution to the government starting at an amount employers pay now and adjusting gradually toward national averages over time. Smallest businesses are exempted. Mr. Zandl says the most important aspect of this now is that Mrs Warren has shown that her plan's revenue sources match the cost so that the plan would not lead to deficits increasing and pushing interest rates higher, leading to negative effects on the economy. Republicans under Mr. Trump have paid little attention to expanded deficits caused by their tax law, and economists across the landscape have also shown less concern. Still attacks are made if the plans don't add up. For this reason a sound assessment in today's context of depressed consumers and an overall impact becomes essential. The WSJ quotes from a pre- assessment of Warren's plan by Simon Johnson, a Massachusetts Institute of Technology economist who co-wrote it with Mr. Zandl and Betsey Stevenson of the University of Michigan. What they point out is that putting cash in the pockets of the lower and middle class for spending makes a lot of sense today, and taking money out of the pockets at the way upper wealthy end,  does not contract the economy at all. Other effects they say are constructive by letting all workers get health coverage from the government instead of employers, this makes it easier to change jobs increasing labor mobility and productivity. A worker getting a better job and better utilization of skills could then shift without looking at the employer health care plan. Warren says there would be a five year transition so that workers in health care insurance industry can work in other insurance fields and in Medicare, no one would be left behind. The important thing being to build America's middle class again. ...

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The Smer-Social Democracy party led by Robert Fico won an absolute majority in the Slovakian parliament. Smer-Social Democracy party won 83 of 150 seats in parliament. The party campaigned on the theme that the austerity measures were too hard on the poorer segments of society, and did not do enough for job creation. Unemployment in Slovakia is at 13%. The shift also marks changing opinion in Hungary, France, and other EU countries about austerity measures and the impact on countries with high unemployment, in the absence of efforts to stimulate job creation.

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The components in the 6.1% drop in GDP for 1st quarter 2009, from the prior quarter. See the all important graph that shows how things in the breakdown look, and how the economy is behaving, and how it might behave in the future. What is the impact of a10% drop in world trade? For the US which was abig importer, the last 2 quarters saw a shift in consumer buying habits, as economy became the norm, and frugality was in. Imports drop by 6.05%. But exports drop too, with fewer purchases of products the USA makes. THis drop was 4.06%. Consumer spending collapsed in the 4th quarter of 2008. A rebound ocurred in the 1st quarter 2009, as consumer confidence improved as aresult of strong government intervention through the $787 billion stimulus bill, and the new budget that funded priorities in health, education and energy, and supported local governments spending. Consumer spending went up by 1.5%. Residential investment went down by close to the same amount - 1.36%. What was happening in manufacturing capacity utilization. This dropped as inventories were run down, and the change in inventories was a drop of 2.79%. The feeling here is that as inventories were run down there is now the prospect of increasing production and capacity utilization. But unemployment and job losses are not figured into this, and the unknown impact of the new frugaility of the American consumer as it sets in in earnest. If consumer spending remains sluggish, then there is less prospect for increasing capacity utilization. Manufacturing capacity will either be reduced as plants close as in the auto industry, or it will remain unused. And the prospect of exports picking up the slack is remote. This gets one to the crux of the matter which is declining investment in buildings, and equipment. As businesses pull back and lay off employees, a process that will continue for many quarters into 2010 and beyond, with credit tight and demand sluggish at best, the prospect here is of large contribution to negative GDP numbers in the future. For 2009 1st quarter the decline in nonresidential investment was 4.68%, the largest component and the decisive part impacting jobs and production....

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Cerberus will lose control of GMAC, and this may be a good thing, as decisions at Cerberus and GMAC while under its control were made not in the interests of GM and its customers but of Cerberus,s efforts to extricate itself from its troubled investments. One of these decisions was the decision in September 2008 to raise the credit scores for prospective GM customers to 700 before approving credit. Johnson of Barclays Capital says that in November 2008 only 1% of GM's customers used GMAC financing from a figure that was normally at 45%. During September, October, and when the credit crisis hit hardest in November 2008, GM continued to suffer hugely declining sales, and the decision to cut GM's customers off from GMAC credit must have only aggravated a bad situation from GM's concentration in SUV's and trucks and the tight credit conditions. With the November situation worsened by customers simply postponing car purchases due to concerns about job security (as about 586,000 jobs were lost in November), the credit scores decision could only hurt GM badly. Now Treasury is stepping in with $5 billion to GMAC with another $1 billion to GM to invest in GMAC. The result will be reducing Cerberus control of GMAC from 51% to 14.9% of voting shares and 33% of total equity. Cerberus will also stop providing consulting services to GMAC and the 2 companies will no longer share executives. And the GMAC Board will be reconstituted reducing the number of members affiliated to GM and Cerberus, and adding agovernment appointed board member. The government's $5 billion stake will pay an 8% dividend and it will put the government ahead of Cerberus's common equity holdings. Originally Cerberus and dozens of co-investors paid $7.4 billion for the 51% stake in GMAC in 2006. Now Cerberus plans to distribute piev=ces of it current GMAC stake directly to coinvestors. Cerberus has other troubled investments. With its flagship $4 billion fund down 15.8% as of November 30, 2008, and the firm has suspended withdrawal requests from investors after suffering big losses in October and November on a bet in fixed income markets....

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It is a landmark agreement and more innovative than the GM and Chrysler agreeements, with the UAW getting a significant stake in Ford, something that is a first. UAW supported money going into creating 5 flexible body shops so that investment to get Ford new models and manufacturing capability is put in place in this agreement- showing union management unanimity in understanding Ford's situation. The UAW Ford Agreement details: UAW gets about 18% ownership of Ford and becomes Ford's largest shareholder with about 4 times the shares of the Ford family. Ford will build 5 new flexible body shops in unionized assembly plants, invest separately $200 million in new technology and equipment in unionized stamping plants, and make substantial new investments in engine operations. All new hires will get a starting rate of $14.20 an hour and a full rate of $15.34 an hour, nearly half the curtrent level and its good till Ford reaches 20% of the Ford UAW workforce. When this is reached for entry level positions Ford must first move those hired at the lower wage upto the higher wage before filling in more positions at the lower rate. The VEBA health trust will work this way. Ford will only put in $6.5 billion in cash into the trust and $450 million each year in current dollars. The rest is done innovatively to conserve cash and give the union a stake in Ford that will be a first time in such a deal. It may change the labor vs. management atmopsphere in the long run as Ford recovers. A $3.3 billion convertible debenture note will be issued giving the union a stake of about 18% at current share prices, which terms are still not clear. Ford will also issue a $3 billion secured note. And to cover retiree health obligations until the trust makes payments Ford will pay $2.2 billion. The Jobs Bank is restricted to 2 years. After 2 new job offers are declined the worker goes off the payroll. Ford will also trim about 10,000 to 14,000 workers with buyout packages. ...

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Peter Eavis, in the Heard on the Street column, says something similiar to what Krugman said when the Geithner plan (for troubled assets to be bought by private investors with cheap money from the government,) was announced March 23, 2009. His point is similiar to Krugman's in that if the market is experiencing just ashortfall in confidence and liquidity Geithner's plan might work, but if the underlying properties are not worth that much, the government engaging in agame of price support can't really win. The securitizztion of mortgages ocurred in a period of easy money. Now that that period is gone the basic underlying structure that supported it is gone. With more job losses at the rate of half amillion a month does anyone think the government can make the underlying mortgages for these securities profitable even with the government putting in its money to leverage the returns? He is right in pointing out that investors would need to build abig margin or error and will likely bid well below what banks are willing to sell at. CreditSights projects collective losses of the 4 biggest US banks through the end of 2010 of $250 to $450 billion....

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Key Indian projects in Sri Lanka or Ceylon are the Kankesanthurai harbor in northern Sri Lanka and the Ind0-Japanses East Container Terminal at Colombo port. In Maldives it is the Greater Male Connectivity Port.With its expertise and leadership in solar energy India is also launching solar initiatives in Sri Lanka. India has focused efforts on developing human capital and employment intensive sectors. This contrasts with the non concessional loans that finance infrastructure projects often with Chinese labor that do not generate the jobs Sri Lanka or Ceylon so desperately needs. Earlier period of Chinese infrastructure projects led to the debt trap with building of Hambantota port and facilities which Sri Lanka could not effectively utilize, and led to buildup of interest on loans. Sri Lanka now has the opportunity to make a new beginning as part of the SAGAR (Security and Economic Cooperation for All). The whole range of intitiatives in many areas show India's long experience in working with Sri Lanka since 1900 when early development projects were initiated. India has a long list of projects to help Sri Lanka keep up with India in its development- two education tourism projects, ITEC Indian Technical and Economic Cooperation, and Technology Adoption Project. This opens a new path for Sri Lanka to make steady progress on a wide range of projects for the next 10 years for sustainable development. As India grows this will expand the range of possibilities for Sri Lanka that it could never achieve on its own. Many new projects can also be done with the economic cooperation and assistance of UK, U.S. Japan and India to broaden the range of possibilities and financing. ...

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This opinion by Mr. Swain, editorial page writer at the Wall Street Journal says it is regrettable that the expert class in America has failed to acknowledge its errors or conduct self-criticism. A new generation of journalists, think tank authors, and experts, will soon replace the old. They, he says, will make a fair assessment of the Trump years and look at their forerunners as acting in crucial moments, as idiots. He offers an alternative view of lockdowns as hurting the economy and causing a sharp recession in which people had to go without income, and some even hungry. To support this he says many parts of the country did not lock down and managed to keep hospitals running fine. California and New York with Democratic governors and large numbers of Democratic voters have borne the brunt of the pandemic in America. He points out the changes in the Middle East with policy that has brought Israel and the Arab world closer. The wars in foreign lands that are no longer being fought wasting precious resources. Democrats and the news media acted to consider Mr. Trump's election as illegitimate and the result of collusion with a Russian president, says Swain, till the Mueller investigation proved this to be not true. The real reason for Trump's election being that the Clinton-Obama Democrats had neglected working class interests and sent jobs overseas, and the Democratic party had shifted far from its working class base. That there is much for reflection in both political parties is stated in this view as the Democrats rush to a second impeachment Feb. 9, after president Biden has setup his new administration, and in the middle of a national emergency pandemic.   ...

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Anne Lukits brings this exceptional bit of evidence about improved parenting and family life. Only about 15% of families in a University of British Columbia research study had fathers who shared equally in household work with mothers. About 65% of fathers and 14% of mothers reported inconsistent behaviour about their beliefs in gender roles and how they acted at home. Girls were seen as more likely to pursue careers in science and nontraditional fields if fathers played out their beliefs in real life by taking active part in household work, from doing the laundry, washing dishes, vacuuming and cooking meals. The study is discussed in the August 2014 issue of Psychological Science. This means that only one in four fathers who believe women should not have to do all the household work and work outside in paid jobs, actually play their beliefs out in real life roles in the home by sharing in the household work. Other aspects of this that are still to be researched are how much an active role by fathers in the home can improve the number of meals that are home cooked with fresh ingredients, with fathers taking daughters or sons out to fresh food markets, which have a significant bearing on how families can eat healthy and pass this onto the next generation. An unnoticed aspect of this is that it improves the overall quality of life for families through healthy eating and healthy living. When companies recognize this and encourage their employees with some extra time for family acitivity and work the overall benefits would include- healthier employees able to do more productive work in shorter time, less paid for employee medical coverage, and healthier members of society....

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As farm product rotted on farms because of a lack of buyers, India has come up with new ways of getting farm agricultural product to buyers in urban areas. The Indian government has approved online sales direct from farmers to buyers outside the country. Within the country enterprising farmers  and app developers for farm produce sales directly to consumers in cities are changing the way agricultural produce distribution works. This report in the Guardian shows how sales are being made from remote Meghalaya state to buyers in cities for product ranging from turmeric, pineapple, jackfruit, and cashew. Prices are about 70% higher helping boost farmers incomes.  Several states have relaxed rules allowing farmers to sell anywhere in the country.  In other parts of the country this is happening with a proliferation of such apps creating a virtual marketplace. Other examples are a grape orchard farm in Gudahalli with sales made in Bengaluru at 30 apartment complexes. One site founder in Chandigarh says he has in 2 months sold 20,000 tons of produce ranging from avocados of the Nilgiris to papaya from Chattisgarh. His app Harvesting Farmer Network also helps with packaging and delivery. In other developments Gaia Agritech is helping farmers on the Konkan coast in Maharashtra hit hard by a pause in exports, sell to housing societies in Pune and Mumbai. This is part of a broader debate in India after coronavirus pandemic. One idea is that people have a family farmer just like they have a family doctor, encouraging organic agriculture, fresh produce for healthier living. By helping farmers it makes for a better economy, as about a sixth of India's GDP comes from farmers and most of the jobs are in farming and agricultural economy. ...

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Krugman points out the gains on three fronts evident from the Census Bureau report of 5.2% gain in median income of households in the U.S. He says the first is the growth in incomes of ordinary working class and middle class families, second the large decline in the poverty rate, and third the further rise in insurance coverage in 2015 for people without health insurance. He points to the steady efforts of the Obama administration to improve lives of ordinary families as working based on the Census report though results have taken time, and could have been better. The Stimulus, says Krugman could have been larger following the blow of the 2009 financial crisis and increased unemployment at the time. Janet Yellen at the inequality conference of the Boston Fed in 2014 pointed out the problems of 62 million households having net worth of about $10,000, and why this was running against the American idea of a better life for all Americans. In that sense the Census report is a movement in the right direction but a lot remains to be done.   ...

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The latest Commerzbank estimates show Germany and Japan, both with large capital goods industry, showing declining GDP of about 7% in 2009. That is a steep decline stemming from the lower demand in industrializing countries like China, India and other countries. The German government has only committed so far 88 billion euros ($120 billion) or 3.5% of GDP. To get some idea what the German government is thinking look at the GDP numbers from the government, which show only a 2.25% decline. Compare this with other estimates closer to Commerzbank's estimate- BNP Paribas shows 5.4% contraction, Deutsche Bank 5%, German think tank DIW 4-5% drop. And the government estimate scheduled date for revision is April 29. This may explain the gap between what the Obama administration is saying to the Europeans: you need further stimulus, and what the Chancellor Merkel is saying: we will be just fine. The French government is saying saying the same thing the German government is saying. But France with a smaller export industry is expected to see a drop of less than 4%, the USA 4%, by Commerzbank estimates. Experts say as German elections approach in September, Merkel is going to have to respond with larger stimulus amid large job losses. And sentiment may be shifting in France as job losses mount, as evidenced by large turnout across France calling on the government to help in recent demonstrations....

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For the regions hardest hit by the coronavirus and its variants- the US, Brazil, India, Europe, Russia, China and Africa, the researchers and the frontline workers in South Africa are doing an incredible job. This report by Stephanie Nolan in the NYT shows the work of researchers at KRISPS advanced medical research center and the frontline workers in South Africa, who are making a difference. Shown are researchers and scientists at KwaZulu Natal Research Innovation and Sequencing Platform in Durban, South Africa on whom the world depends for stepping up the fight against the coronavirus- Dr Tulio de Oliveira, principal investigator of the national genetic monitoring network, and Saleem Abdul Karim, epidemiologist. On the frontline workers who visit patients homes to make sure immune compromised patients have access to their medications is Sizakele Mathe, community health worker. Stephanie Nolan has provided a much needed account of what work is being done on the frontlines to keep us all safe. ...

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Berlin Brandenburg Airport or BER was supposed to open in 2011 or 2012,instead it will open in October 2020, nine years behind schedule, three times over budget. There were 2 parliamentary probes into what went wrong. The planning was faulty and plans were changed, blueprints were not finalized, resulting in a long sequence of problems with such basic items such as the fire safety system, and shoddy electrical wiring, faulty smoke extractions systems. A technical manager was jailed for three years for accepting a bribe from a contractor who then went bankrupt.  The airport CEO Mr. Daldrup says his job was to mop up problems like a "crime scene cleaner." It may be an example of how German values in hard work and good engineering declined as the country lost its focus in the period after reunification and the austerity years under chancellors Schroeder, Merkel, a period when new infrastructure and public services suffered neglect.

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A small rise in interest rates of 1% can add about $7 billion to revenues for Wells Fargo, Bank of America, and JP Morgan Chase banks, according to estimates cited in WSJ. This is because short term loans which predominate today can reprice quickly for banks and rates for depositors at banks do not change much. This is a more reliable source of revenue and one on which the banks have depended for much of the past 100 years. The use of complex instruments and shady instruments such as the mortgages devised in the 2009 mortgage financial crisis did little for banks and instead caused a major financial crisis in the shape of economic depression with income and job losses for families and workers in the US and in the rest of the world. Complexity meant less transparency in this context, more chances of messing up finances, and bad news for America and the world.

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This amazing story about Bend Oregon is a reminder of the mental health crisis that lurks behind the homelessness crisis in America's cities. It is also most unusual because it is about the Mayor of Bend, Oregon, grandson of the mayor of Bend, Oregon then a timber capital in the 1900's, who is a public defender attorney, and finds himself at at a homeless shelter in 2023 in the city he built, the result of mental health issues. He reconciles with two daughters before his death after periods of isolation from his family and ending up in a homeless tent on city streets. At one point he had helped turn Bend into a tourist destination pushing up average home prices to $800,000 to protect residents when timber demand dropped. He finds himself unable to afford a home in this very same town after his mental illness and losing his job.

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The U.S. and China sign Phase 1 of the trade agreement in a sign of reduction of trade tensions between the two countries. Difficult issues of state subsidies under China's state enterprise model of development, and technological competition were put off for the future. China made the deal possible by agreeing to double its purchases of agricultural products, and offering to purchase about $200 billion in American goods and services over the next two years. This gives relief to farmers, a key part of Mr.Trump's support base. This also helps achieve a key Trump and U.S. goal of cutting the U.S. trade deficit with China quickly, just as happened decades ago with Japan.  See the related article and link on how for the first time in decades China's trade surplus with the U.S. is now set on a path for permanent decline. It dropped significantly in 2019 by 12.5% even though China's imports from the U.S. dropped by 21%, based on Chinese customs data released for 2019. With China increasing these imports significantly and the U.S. holding on to tariffs of 25% on $250 billon of China's exports to the U.S. which are outside the Phase 1 agreement, the downward course is set for the next few years for correction of a dangerous trade imbalance. That imbalance was allowed to develop over successive Republican and Democratic administrations. China already has the European Union as its first leading trading partner and south east Asia as its second. China plans to not be so closely intertwined with the U.S. in trade, and yet preserve its state sponsored development model and drive to compete in technology. China's increased purchases from the U.S. of $200 billon are broken down in terms of farm products- $32 billion, manufactured goods- $80 billion, energy products- $50 billion, services $35 billion. In effect the U.S. gets its goal of cutting the unsustainable China trade surplus quickly and with certainty in 3-5 years. China uses the period to transition for less trade linkage with the U.S. yet preserving its state sponsored model of development and drive for technological advancement.   ...

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In a crucial demographic Donald Trump's provocative remarks cause a stir and a slide by 13 percentage points. In late July NYT/CBS polls show 72% support among Republican women. McCain won 89%, Romney 93%, George W. Bush 93%.  Divisive tactics hurt particularly with women, say experts. In states such as Pennsylvania this is evident, as Trump has 27% there for women overall and Clinton 58%, according to one poll. The Rutgers Center for Women and Politics has studies on how women diverge in their concerns and lives from men- from lower pay, longer life expectancy, and role of government in helping them,  to cite a few. Clinton has released television ads in 5 swing states directly appealing to mothers, showing children, and emphasizing kitchen table issues, job creation. College educated white women in particular carefully look at the issues, and make independent judgements based on character and temperament, and are less likely to ignore repeated provocative remarks or clearly sexist comments. ...

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Another significant development in this crisis, is how small businesses got addicted to credit card debt as a way to operate for ongoing expenses of the small business, from a small nursery, to abed and breakfast or a solo law practice. There are an estimated 27.2 million small businesses who are supposed to be one of the growth engines of the economy. Credit card debt when banks are tightening up credit and businesses are unable to meet expenses, is extremely costly because of the underlying usurious nature of the industry in the US and lax regulation. It will only push more businesses, that have acquired the bad habit of credit cards to finance operations, into bankruptcy. There were 5 million business credit cards in 2000. By 2009 after Visa Inc, American Express Co, and MasterCard Inc. and Discover Financial Services Inc. pushed these cards aggressively, using a new credit scoring system that looked less at the business and more at personal credit scores, the number jumped six fold to what Nilsen Reports estimates as 29 million business credit cards. The spending on these cards jumped for this period four fold, from $70 billion to $296 billion. As the average debt on each credit card jumped so did the likelihood of some of these card holders difficulties. Missed payments could lead to interest rates for some card holders jumping to 30+% from initial rates of 7-8%, all in the last 12 months. This makes small businesses less likely to create the jobs they created in the past, and one more troublespot in this economy....

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What Peter Bernstein, 90, remembers about the Great Depression. He says one was conscious of it evertime you walked outside on the stree, and people looked so threadbare. A mass of policy errors made the situation worse. And life was different then, more like a developing country as the USA went through the throes of urbanization and industrialization. Food took up about a quarter of disposable income compared to one tenth today. About 20% of the jobs were in agriculture in 1930, compared to 2% today. Less than half of the jobs were in service industries in 1930 compared to 75% today. And there were no food stamps, no unemployment insurance, no social security, no medicaid and medicare, none of the automatic income things that maintain income in the USA today for people out of work. Economist Robert Solow, 90, remembers growing up in Brooklyn, New York, and how his parents constantly worried about the next month's money. Paul Samuelson, another economist, 93, remembers attending classes at the University of Chicago during the depression years. And he says the economics lecures were on laissez-faire principles, which stopped making sense when he looked out the windows and from what he saw and heard on the street. Showing how out of touch policies were in the early years when the depression's worst chartacteristics took shape. However we are in the early stages of this, and it can still be very painful as people make it through the storms ahead. What will things look like as the nations unemployment rate hits 10% by 2010,? Which means things are much much worse in parts of the country like the midwest, where industries like the automobile industry depend on sales of vehicles which have seen sales go down from 15 million vehicles down to 9 million annualized in 2009, and may see further declines in 2010....

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Figures from the Labor Department show the unemployment rate in the U.S. unchanged for June 2012 at 8.2% and job additions of only about 80,000.