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Unemployment is over 25% on Chicago's South Side black neighborhoods. Conditions have deteriorated with the higher unemployment since the economic crisis. Residents see little improvement since the days of Obama as a community activist in this part of the city.

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Ruth Marcus looks at the assumptions behind Romney's tax plan and questions whether simplifying the tax system with lower rates would help create the climate for higher economic growth and lower unemployment. Much of the differences between Republicans and Democrats revolve around this assumption, a core belief on one side and skepticism on the other. An effort to obtain a bipartisan assessment was made with the Simpson-Bowles commission recommendations, which advised closing loopholes and reducing deductions. The work done by Martin Feldstein on the Romney Tax plan builds on this approach of limiting deductions, and reducing taxes across the board. An issue for Democrats is inequality. Lower wages to improve competitiveness in manufacturing industry is a trend in Republican and Democratic administrations, because of the effort to improve U.S. competitiveness against other trading nations and has played a large part in lowering incomes in manufacturing oriented midwest and eastern states. The other cause of increasing inequality is the housing crisis and the effects on the economy through foreclosures and unemployment. The housing crisis developed under a Republican administration, and the lack of effective measures to prevent foreclosures under the last 4 years of a Democratic administration worsened the economic condition of the middle class, and especially so for minorities. During the housing and foreclosure crisis the proposals put forward by Republicans Martin Feldstein, a Harvard economist, and Sheila Bair, head of the FDIC who calls herself a "populist from Kansas," for bold government help to homeowners under water would have helped the middle class financially, and especially minorities, far more than the efforts of the Democratic Obama administration, and under Feldstein's plan even turned aound the housing market and boosted a recovery. Trends in world trade and industry have large effects outside what administrations of either party can control, and a lot depends on the temperament, wisdom and leadership provided....

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This Journal editorial looks into the jobs numbers for September 2012 that showed unemployment decreasing to 7.8% according to the household survey. By taking the numbers as they are in the Labor Dept. surveys and setting aside skepticism it provides useful insights into the condition of the labor market. It cites the reason for some of the skepticism about the numbers- the 873,000 jump in employment shown by the household survey which looks at 60,000 households. It is the largest increase in employment for one month in 30 years says the Journal. The household survey finds that 582,000 of the 873,000 jobs are "part-time for economic reasons" in the survey's words. The number of part-time workers for economic reasons went up from 7.7 million in March 2012 to 8.6 million in September 2012. This also returns the focus on U-6 the measure of unemployment that Fed chairman Bernanke and experts looks at. This has remained the same for Sept. at 14.7% and includes the number of people working part-time who cannot find full time work. Another useful statistic for insight into the labor market is the decline in household incomes. Studies of Census data show a $4019 decline in median household income from Jan 2009 to June 2012. And the long term unemployed represent about 40.7% of the employed in recent data, an unusually high number that worries Mr. Bernanke. By looking at the broader picture one can get a better sense of the labor market....

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Wall Street Journal analysis shows top earners at 38 U.S. banks and securities firms will get $145 billion in 2009, an 18% increase over 2008. This even after increasing public anger about exceedingly high levels of executive compensation with no relation to performance, and at a time of high unemployment.

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John Taylor on the dual mandate for inflation and unemployment and discretionary policies by the U.S. Federal Reserve that ended up creating booms and busts in the U.S. economy. He advocates replacing the dual mandate of "maximum employment" and "stable prices," which was inserted into the Federal Reserve Act in the 1970's, with a single mandate for "long-run price stability." Taylor points out that this will still give the Fed flexibility, as it is focussed on long run price stability. The Fed does not have to overreact to short run increases in inflation. And he points out that this actually will work well for unemployment as the booms caused by an overextended period of low interest rates such as that in 2003-2005, have led to booms followed by busts with high unemployment.

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A behind the scenes account of what happened at JP Morgan Chase after CEO Jamie Dimon discovered the trading losses of the London Whale through the pages of the Wall Street Journal, on April 6, 2012.

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Washington Post editorial on the Obama Georgetown speech of April 13, 2009. It questions whether President Obama has the candour and courage to tackle the tough issues of deficit reduction and entitlement reform. New healthcare spending for coverage itself will add to entitlement, and it says some of the savings mentioned by the President are phony or already needed for new spending for the economic recovery and health care. At the same time the paper gives Obama good marks for his clarity and grasp of the crisis and steps for recovery, and the policy agenda in the areas of health care, energy and education. The questions about courage and candor also raise all the questions about facing upto the facts about insolvent banks that Krugman, Rosenfeld, the Economist and others have raised. Is Obama dodging the hard choices, is he dithering? On the toughest issues like foreclosures, insolvent banks, global regulation pushed by the Europeans, will he end up making inadequate or faulty choices, and when he comes around to making the tough choices, will he have lost so much valuable time as to prolong the crisis and stretch it out to many years....

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Some startling statistics on U.S. wages and incomes and the increase of part-time workers, by the publisher of U.S. News and World Report, Mortimer Zuckerman. He cites the Pew Research Center reports that show one third of Americans identifying themeselves as lower class or lower middle class compared to one quarter before 2008. This affects social mobility with the increasing gaps in incomes, education and social behaviour acting to reinforce each other and leading to even lower future mobility. Industries that are showing growth are in low wage occupations. The Bureau of Labor Statistics shows growth in future in industries noted for low wage part time work- health care, social assistance and retail, with some jobs lacking minimum wage and overtime protections. Revealing in this respect is that in the last 2 years fully 43% of net employment growth is in the 1.7 million jobs added in low wage work in food service, retail and employment services industries. The number of Americans working full time declined by 5.9 million since Sept 2007, part time workers increased by 2.6 million. The effects of higher part time workers and job recovery predominantly in lower wage industries is likely to affect consumer spending and slow growth....

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In December 2009, the Obama administration assumed an economic recovery was underway. But administration economist Christina Romer was proven wrong in her assessment of the situation. Many of the new jobs added at the time were from temporary surge due to census hiring. The administration lost its focus on unemployment and failed to grasp the economic situation.

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This Wall Street Journal editorial comes out in favor of higher capital reserve requirements similiar to that suggested by Federal Reserve Board governor Daniel Tarullo. The Journal says that if regulators are serious in the U.S. about controlling systemic risk, then the 14% rule or a 15% rule for assets held in reserve by banks should be adopted. Daniel Tarullo had suggested a 14% capital reserve requirement. These requirements would be phased in gradually over several years. Basel III requirements require only a 7% requirement and is phased in over many years. Capital standards are likely to be gamed. For this reason the requirement for only Tier 1 capital to be eligible is essential. What about the Basel III standards and the European banks? Would this put them in a better position to earn higher returns. This should be a problem left for European taxpayers to tackle says the Journal. As long as U.S. taxpayers are supporting U.S. banks with an implicit subsidy to take on larger amounts of risk -because they will be saved in a crisis with taxpayer dollars- the Journal says it makes sense to require 10-14% in capital reserves. It cites the Japanese banks which were highly overleveraged with lower capital reserves compared to American banks, and fared poorly. The Dodd-Frank bill imposes a complicated set of regulatory requirements with regulators required to write new sets of rules. The editorial concludes that it is far better to tackle the problems in the banking system with a sufficiently high requirement for capital reserves to manage risks than to have the detailed rule making on every subject that Dodd-Frank suggests....

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The largest U.S. bank holding companies, including Bank of America, J.P. Morgan Chase and Citigroup, and two foreign banks Deutsche Bank and Barclays PLC must submit initial plans for "living wills" by July 1, 2012. The Dodd-Frank legislation requires financial firms to develop plans that lay out how they could be liquidated if they went under in a crisis. This legislation gives the FDIC and other regulators the power to seize and dismantle a failing financial firm, to help mitigate the problems of "too-big-to-fail" firms. The FDIC and U.S. regulators lacked such powers at the time of the collapse of Lehman Brothers in 2008. The FDIC and the U.S. Fed co-wrote the living will rule for "comprehensive and coordinated resolution planning." In all, 124 banks, including 100 foreign banks with U.S. affiliates, which have over $50 billion in assets worldwide, must submit plans and update on a regular basis. Smaller banks will have the deadline extended to December 2013.

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This Times editorial questions whether Mayor Bloomberg did the right thing in the manner in which he ousted protestors from Zucotti park in the financial district of New York city. Now that the protestors have been forcibly removed from the park, it is the responsibility of the Mayor to keep his promise to let the demonstrators continue their protest against income inequality, says the editorial. The concern is that the end of the protests at Zucotti park could end up quashing the entire protest movement, which serves to draw attention to serious issues in a democracy.

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Alan Blinder, Princeton University professor and former vice chairman of the Federal Reserve, says the biggest reason for the growing deficit in the years out to 2040 is because of increases in health care spending. Its not that there is runaway spending in other areas. He cites CBO projections that show other costs stable relative to GDP from 2015 to 2035 and declining. This is why healthcare spending is at the heart of the problem. And why tackling the deficit has a lot to do with reducing healthcare cost increases.

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About 680,000 homeowners applied for the Home Affordability Modification Program, or HAMP, and had their loans modified so that their mortgage payments are reduced. This is only one in four of the 2.7 millon homeowners who tried to to join the program. This according to a Wall Street Journal analysis of data released by the Treasury Department. In 2009 the Obama administration launched the program to reverse the rising home foreclosures in the U.S., by reducing the monthly mortgage payments through lower interest rates and extending the term of loans. About $75 billion was estimated as the cost of the program at the time. Only $1 billion of this has been spent by the Obama administration. The program offered payments to 100 mortgage servicers as inducement to complete loan modifications. About half the applicants or 1.3 million were declared ineligible from the beginning, and the program used stricter qualification criteria than loan modification programs offered by individual banks. Applicants were rejected because the necessary paperwork was not submitted or it was lost by the mortgage company- 266,000 falling in this category. An additional 770,000 homeowners who started the program were later disqualified mostly for the paperwork and eligibility problems, with only a small number rejected for failing to make trial payments. Mortgages less than 31% of pretax income were considered affordable and considered ineligible-255,000 were in this category. Over 80% of homeowners in the southern states of Arkansas, Louisiana, Oklahoma, Texas, Alabama, Kentucky, Mississippi, and Tennessee, received no loan modification....

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Former Fed Governor Kevin Warsh's views on the need for greater transparency and disclosure from the large U.S. banks and the risks to the financial system from "too-big-to-fail" banks in 2012-2013. He says the U.S. should not be dependent on the Basel standards for capital requirements and use its own system of stricter requirements similiar to the UK and Switzerland. His views are that the Dodd-Frank law puts too much dependence on regulators doing the right thing, information transparency is lacking for markets to impose discipline, and delegates too much to Basel standards which are not rigorous enough for protecting the U.S. economy.

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Warren Stephens, head of Stephens Inc, in Little Rock, Arkansas, says repeal of the Glass-Steagall Act was a mistake. U.S. banks should have a 5% cap on holdings of total deposits in the U.S., and no "grandfathering" of banks over the 5% limit. Five institutions controlling 50% of the deposits in the U.S. creates too much systemic risk in another financial crisis. Banks should be expected to be one or the other, commercial banks or investment banks, not both. These recommendations are not new. Bank of England Governor, Mervyn King, called for breaking up the largest banks or shrinking the size of the largest banks during the global financial crisis in 2008. This position for banks that are smaller in size is supported by veteran bankers Paul Volcker, Thomas Hoenig and other experts.

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A big hurdle for local brands in China is the Chinese consumer's interest and respect for foreign brands. Asked about local brands buyers say they can't think of any, or say Chinese brands are shoddy in quality and value. Brands such as Haier in consumer appliances and Lenovo in tech are an exception. During the big surge in consumer sales in the last two decades Chinese companies producing local brands thought it adequate to simply imitate foreign brand names rather than take the difficult route of establishing the credibility of their own brand- an effort which might take years. Often the foreign name was changed slightly to keep the resemblance but mean something positive to Chinese consumers in the local language. Common are names such as Adidos, Hike, Cnoverse and Fuma for sneakers. Clio Coste keeps the connection to Lacoste with its crocodile logo. Coca Cola in Chinese is Kekoulele, translated to mean Tasty Fun. Only now are local companies giving serious attention to creating long term brand entity and image. The serious attention to brand names and branding comes at a time when China increasingly depends on consumer sales to power the economy with the decline in real estate and slower manufacturing. For the 11 months of 2014 retail sales were up 12 percent over the prior year period to $3.8 trillion, according to the National Bureau of Statistics. ...

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Eisinger says the Federal Reserve's staff plays an important role in regulatory reform. He quotes Cornell law professor, Robert Hockett, who says the general counsels tend to become more conservative over time and inclined to support the status quo. This makes required regulatory changes such as increasing the capital reserves at banks and reducing leverage more difficult. Eisinger describes the position of the U.S. Federal Reserve's general counsel, Scott Alvarez, on disclosure of lending by the Fed during the banking crisis, and on capital reserves, which veered more to the position of the banks which preferred less information be released and capital reserves be left at the 5% level than the 6% proposed by the FDIC and the Office of the Comptroller of the Currency. Comments by Alvarez in nonpublic hearings to Congressional staff members on May 18, 2012, about the JP Morgan London Whale trading losses, according to Eisinger, shows lack of awareness of the overall implications of the breakdown in financial controls and supervision inside the bank....

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Anat Admati, is a professor of finance and economics at Stanford University School of Business. He says banks should depend on generating 30% of their assets from equity, something the banking industry of today in the U.S. and Europe considers heretical. More of the bank's assets should come from equity and much less from borrowed funds. Outside of banking healthy corporations in the U.S. carry debt at about 70% of assets and there is no reason banks should not do the same. In 2013 says Admati, the situation is not much different from that after the 2008 global financial crisis- large banks carry liabilities and debt at over 90% of their assets. The $2.2 trillion in debt at JP Morgan Chase bank is about 91% of assets of $2.4 trillion. Basel III regulations allow banks to borrow upto 95% of assets, and proposed banking regulations in the U.S. put this at 95%, with the way this is measured still being debated. At such high levels of debt the margin of error is small, and systemic risk which is high in a globally interconnected banking system means the whole banking system can freeze from one large bank going into failure such as Lehman Brothers. This happened in 2008 and the margin of error is still small, which is why global banking is such a high wire act with the U.S. Federal Reserve, the ECB and other central banks issuing regular warnings and regulators faced with the task of keeping the banking system in check through vigilance and investigations of banks violating laws. How much difference has Dodd-Frank legislation in the U.S. made after 2008? Jason from Atlanta says in response to Admati's article, that the Glass-Steagall Act of 1933 was 37 pages and the banking system did not freeze up in the way it did in 2008 for the rest of the twentieth century until its repeal. The 879 page Dodd-Frank legislation of 2011 is overly voluminous and still leaves 243 rules to be written by regulators in consultation with the financial industry. Banks are larger now than they were in 2008 and have an outsized influence in shaping the rules, leaving the U.S. Federal Reserve's supervisory committee and Fed Governor Daniel Tarullo with the job of somehow keeping banks out of trouble. JP Morgan Chase, Admati reminds readers, has $2.4 trillion in assets as of June 30, 2013, and debts of $2.2 trillion, with $1.2 trillon in deposits and $ 1 trillion in other debt owed to money market funds, other banks, bondholders and the like. ...

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The 129 page internal report on what caused the trading losses of $6 billion at the London based investment unit of JP Morgan Chase bank. The report shows the trading was intended to offset losses of $100 million. Instead the trading assumed large proportions and supervisors ignored the risks, management showed lax oversight. This type of situation occurs in other industries. The costcutting at BP and suppliers resulting in the Gulf Oil Spill and the Toyota costcutting saved small amounts by creating large risks that threatened the companies, with bankruptcy in BP's case and loss of confidence of the customer base in Toyota's case. They also reflected years of costcutting that were showing up in smaller problems that remained unrecognized. BP refinery fires occurred for lack of adequate maintenance. Problems were already developing at JP Morgan Chase with managment changes at the London unit leading to poor oversight and complacency of top management, a culture that took undue risks even as management remained confident in its strategies....