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Chancellor points out that economists from Irving Fisher in 1929 to Ben Bernanke in the mid-1990's have often played the role of academic shills during each successive period of "This Time its Different, " claiming that there was some new event, technology, or innovation, that justified higher valuations of assets and higher institutional debt levels. He quotes Walter Bagehot who says about merchants and bankers of his day-" they fancy the prosperity they see will last always, that it is only the beginning of a greater prosperity." The significance of the book is that it suggests an hypothesis that is quite different from the general idea in 2011 that there won't be a protracted period of slow or marginal growth after a bubble of this nature. Because the bubble is also in other countries, in countries of the euro-zone, China, Turkey, Brazil, and other countries, the situation takes a much longer time to heal.

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Rockwell Collins CEO, Clay Jones, talks to the Journal's David Kesmodel, about Rockwell's strategy as the U.S. Defense Department faces large cutbacks. Rockwell supplies the cockpit electronics on military aircraft. With the growth in sales of Boeing's 787 Dreamliner and Airbus's jumbo jet, Jones is shifting resources, capital investments and engineers to the commercial aircraft business. He tells Kesmodel that his No.1 problem is to position Rockwell in the international area to benefit from sales to India, Saudi Arabia, Brazil, Turkey, South Korea, Australia, countries which he says will have to build their own aircraft capabilities as the U.S. pulls back from overseas bases. He sees international sales going up from 33% to 40%. Only small acquisitions are planned, of between $50-100 million, as Rockwell prefers organic growth.

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Seib cites as a key reason why the presidential race in the U.S. could change- Romney leads by three percentage points over Obama among voters most intensely interested in voting. Another related reason is the plan to reach out to low intensity voters, with the Romney campaign having knocked on 2 million more doors already than they did in all of 2008. Some of the intensely interested voters are more against Obama than in favor of Romney, something Obama experienced in 2008 with the anti-Bush sentiment over the war in Iraq carrying over to support for the Democratic ticket. Another part of the undecided voter sentiment is that more of these voters compared to other voters are dissatisfied with the current condition of the economy and the direction the country is taking. Other reasons that could be cited are the volatile situation in the Middle East which could create questions in voter minds about American resolve in that region, dissatisfaction among some black voters with the deteriorating economic situation for black people, and the lack of intensity among Hispanic voters who feel the Obama administration did not keep its promises on immigration changes, the poor performance of the economy in industrial states of the midwest and east with decline in incomes....

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An assessment of progress in free trade and generating jobs in N. America under the NAFTA agreement between the U.S., Canada and Mexico. The agreement was signed under President Clinton in 1994. NAFTA removed existing tariffs on over half of the exports from Mexico to the U.S. and phased out remaining tariffs between the U.S., Canada and Mexico. The U.S. had two way trade of $918 billion with Canada and Mexico in 2010, according to the Office of the U.S. Trade Representative. Canada is the U.S.'s top trading partner, with $462 billion in trade through Sept. 2012, and U.S. trade with Mexico- expected to overtake China- is at $369 billion in the same 9 month period of 2012.

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China adopts a two child policy nationwide in October 2015, abandoning a one child policy adopted in 1980. Experts had warned for years of a policy that would lead to fewer young people, and a rapidly aging society. UN forecasts show China will have about 400 million people over the age of 60 in 2030, 25% of the population in 2030, compared to 14% today if current trends continued. Growth of elderly people would burden the pension and health care systems. The birth rate of 1.4 children per woman is lower than in the U.S. today.

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Romney emphasizes that he supports some of the popular parts of the Obama Healthcare Law such as coverage for people with pre-existing conditions. He tells voters he got everybody in his state insured. He also says there will not be a huge cut in taxes that would worsen the deficit. He would close loopholes and deductions to offset any deductions as shown by his advisor Harvard economist Martin Feldstein. The idea is to get a message across that will resonate with women, minorities, the middle class, workers, and business- the 100%, something he is able to do with some credibility having come from Massachusetts, a liberal state in the eastern United States.

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The global auto industry has capacity for producing 92 million vehicles in 2009, but only 60 million cars will be sold next year, according to CSM Worldwide. And CSM forecasts capacity utilizations will not return to the 2007 rate of 80% till 2014. And because of their better product mix, more new models, and better fuel efficiency, the Japanese, Korean and European carmakers have a better capacity utilization than the Detroit Big Three, even though they are also hurting badly as credit collapses and and an overextended American buyer is wary of new purchases. Robinet, the head of global vehicle forecasting at CSM Worldwide, estimates that the Big Three Detroit automakers will only need half their current production capacity in 2009, something he says is not sustainable for any industry. If these estimates hold true then there is a major earth shaking experience ahead for Detroit automakers that is not reflected in the attitudes and the bargaining about who benefits and who concedes what from unions, management, workers, bondholders, dealers and suppliers, even after the near miss for the bridge loans. It is a situation in which even globally and among the strongest automakers like Toyota and Honda there is going to be a lot of misery in 2009 and beyond. Only some automakers around the world will survive this shakeout. ...

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The non-partisan approach taken by Republican governor Snyder of Michigan contrasts sharply with the approach of Governor Walker in Wisconsin and Governor Brownback in Kansas.

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Britain's GDP declined by 0.7% in the second quarter of 2012.

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Jim Campbell will replace Dewar as head of Chevrolet. He reports to Susan Docherty, head of sales, service and marketing for GM.

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Reinhart and Rogoff, 2 eminent economists who worked together on a book on financial crises since 1300, think that the current crisis has much deeeper to go, and the slight recovery in financial markets does not suggest that the imbalances in the economy are corrected. They point to economic weakness as a mechanism by which these imbalances are corrected. For example the economic weakness may be corrected by the weakening dollar resulting in accelerating exports from the U.S. The 1987 crisis had overvalued stock markets relative to earnings as an imbalance, and the 1998 LTCM crisis excessive hedge fund borrowing. Once these underlying imbalances were corrected the economic recovery was back on track. But the Fed's bailout of Bear Stearns has only put the financial markets on a safer footing. It has done little to correct the basic imbalances in the economy of over indebted consumers, and of lost wealth in housing, at the very moment that there is restricted access to credit. The financial market crisis only opened up the weakness from the extremely high leveraging used by the investment firms something like 1:30 by firms from M. Lynch to Goldman Sachs. The Fed's actions gave them time to shore up their finances and recover and the interest rate cuts and government checks help the economy, but not significantly enough to promote investment or increase consumption. The government checks would be used experts estimate for paying down debt and in this way it helps indebtedness a little, but does little to support consumption or promote investment, This the Fed's action also fails to do. The economy contracts and exports help the economy in recovering. The contraction itself say these economists is a necessary mechanism to make the adjustment in every crisis, until something else like exports helps create a recovery. Take December 1997, the Korean crisis. In this crisis the Korean companies invested heavily and were overextended , they borrowed heavily from the banks which in turn borrowed from overseas in dollars. When the Korean currency hit a record low against the dollar it became difficult for Korean companies to pay the increased cost of the dollar loans and many companies failed. As investment was slashed unemployment went up from 3% to 7.9%. Ted Truman, who worked on the Korean rescue effort as a Fed official, is now a scholar at the Peterson Institute of International Economics. He sees as similar to the overexpansion of housing and consumption in the U.S., the overexpansion and excessive borrowing in Korea's corporate sector in the years preceding 1997. After the rescue in Jan 1998, the Korean currency recovered by rising 63% in that year. Did this mean the crisis was over, just as the Bear Stearns bailout leads to gradually settling markets this year? During 1998 the Korean economy sank into a deep recession, the economy shrank 6% in 1998 when it was used to growing at 8%. Nouriel Roubini, another economist, who heads RGE Monitor, a financial and economic forecasting service, sees it this way. First, the mortgage loan imbalances are set into correction mode mechanism, then second, the economy contracts from housing and consumer debt going in reverse mode, then the third effects come into place as this feeds back into the financial system in the form of defaults on industrial loans, municipal bonds, and consumer credit. Additional sequences are in finacial system distress and government and Fed response to set the corrective mechanisms in place, but to also reduce the distress to the financial system and ensure that it is safe. We are where the first effects have ocurred, but before the second and third effects which should take place sometime in 2008 and 2009. The importance of understanding this cannot be overstated for business, planners, and investors because conducting business in this environment or planning or investing will require special skills and temperament which are different from the skills and temperament required in the expansion mode if one is to produce good results....

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Most Congressmen are skeptical of Obama's plan to give the Fed new powers to meet the kind of emergency created by the glovabal economic crisis. Their concern is that the Fed may let the property bubble develop wihtout taking any action, and that the Fed failed as abank regulator. Congressman Ron Paul is co-sponsoring abill that would require Congressional audits of the Fed, which has the support of two thirds of the House.

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The Dutch model for counterinsurgency which intertwines the civilian efforts with aid workers working inside the military, and military work focussing on security for the people so that economic development projects can go on, is an inspiration for the US effort. It has also reduced casualties for the Dutch. Only 19 deaths have occurred for the Dutch for 2000 personnel employed since they deployed in Uruzgan province in March 2006, where 350,000 Afghans live, according to icasualties.org. Sec of state Hillary Clinton describes this 3 D effort of defense, diplomacy, and development, as the model for her own efforts and that of the Obama administration. Dutch soldiers are ingrained in their training for this mission that their main work in Afghainstan will be economic development. The aid workers work closely with the soldiers and the commander Col. Gert-Jan Koolj says over time the focus has been on pure development. In fact diplomats from the Dutch foreigh ministry help to command the Dutch team in Uruzgan. One problem Clinton is facing is the shortage of civilian personnel to work in provincial reconstruction teams. About 500-600 more civilians are needed to complement the additional 21,000 troops that are to be added in 2009. ...

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A shocking fact about oversupply in one crucial industry. Automakers worldwide have the industry capacity to make 94 million vehicles. According to researcher CSM Worldwide the current sales in late 2008 reflects demand for 60 million vehicles worldwide. This is about 34 million extra vehicles and represents about 100 plants. Toyota has already cut production in Japan by 27% in November, the biggest cuts seen at Toyota in 30 years. The numbers for 2009 will reflect a deepening downturn from higher unemployment and lower spending. Not all of this capacity wil be cut as automakers will look for a rebound as customers replace aging vehicles, but as sales decline in Russia, China and emerging markets and in the USA and Europe, some consolidation will take place and many plants will have to close in the US, China, Portugal, Italy and Spain.