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This Washington Post editorial says the Obama administration is complicit in the military attack on Morsi protester camps and civilians in Cairo on August 14, 2013, because of its failure to follow through on its warning that U.S. aid would be cut of in the event of the military taking a leading role in the overthrow of an elected government. U.S. legislation requires this action. By failing to call it a military takeover and by the administration's failure to strongly condemn the massive violation of human rights in the military attack on protesters and civilians, the Post says the Obama administration becomes complicit in the action. It sees this as self-defeating for the U.S., and unconscionable.

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Ring-fencing the retail operations of UK banks from possible losses in the investment banking activities was part of proposals by the Independent Commission on Banking in the UK. Now a parliamentary commission calls for periodic reviews of such ring-fences to ensure this separation is actually still in place, and not been diluted or otherwise removed by bending the rules to favor banks because of lobbying by the banks. It says "over time the ring-fence will be tested and challenged by the banks. Politicians too could succumb to lobbying from banks and others, adding to pressures to put holes in the ring-fence." The report emphasized that a lot more needs to be done to restore standards in banking, especially after recent reports of LIBOR and other revelations of market rigging and corruption. The emphasis in the report is for banks "to be discouraged from gaming the rules."

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European Commissioner Michael Barnier calls for banning credit ratings on countries receiving financial aid. This comes after Moody's strongly downgraded Portugal's rating to Ba2 in July 2011.The downgrade was more severe than expected and comes right after the Greek parlaiment passed austerity measures in Greece. Moody's Ba2 rating suggests a 5 year default probability of 8.1% for Portugal, according to Deutsche Bank.

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Japan's Foreign Minister tells Martin Fackler of the NYT in an interview that the Abe government will follow previous governments in the postwar period that apologized for colonial policies that caused suffering in other parts of Asia. He repeatedly calls for Japanese to be humble about the past. Previous statements by persons seen to be close to the government, including the head of NHK broadcaster, were interpreted negatively in S. Korea, China and the U.S. as needlessly escalating tensions in the region. China and S. Korea responded with a public relations campaign of their own to present what happened in the prewar period. S. Korean president Park refused to meet Japan's premier Abe. Kishida used NYT and Fackler to send a message to a global audience about Japan taking a path of peace since 1945.

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Sanford Weill built Citigroup into a mega bank through repeated acquisitions. He was the strongest voice for the repeal of the Depression era Glass Steagall Act banning banks from risk taking activities in investment banking. The Glass Steagall Act was repealed in 1999, and repeal legislation was given the name of "Citigroup Authorization Act." On July 23, 2012, Weill told CNBC: "I am suggesting that they (the big banks) be broken up so that the taxpayer will never be at risk, the depositors won't be at risk... Mistakes were made." Weill said that the housing bubble and the financial crisis has proved that the repeal was a mistake.

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Jason Zweig interviews John Bogle, founder of the Vanguard Group, in September 2011, after weeks of extreme volatility in the U.S. stock market. He says the index fund concept has been "bastardized" by exchange traded funds and the speculative behaviour in ETF's with insane turnovers approaching 10,000 percent. He considers investing in a balanced portfolio of stocks and bonds a useful way to approach investing even though the last decade has produced medicore results. And predicts a 7% return for the next decade, with money doubling every 10 years. The changes today mean you have to start earlier, save and invest for longer periods, says Bogle, but the returns should still be good. It would be insane to expect the high returns of the 70's and 80's today, says Bogle. In today's market Bogle has 80% of his investments in bonds and 20% in stocks.

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Jean Brunel, chief investment officer at GenSpring, says expect returns of 2-2.5% on bonds and 5% on stocks and not much higher in the next 5 years. He points out that with low rates the whole investment environment has changed. The consensus among investment managers is that it is a good idea to lower expectations and not chase risky returns in the next couple of years.

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The election debate brodcast live on Iranian television between Moussavi and Ahmadinejad. Moussavi described Ahmadinejad's foreign policy as engaging in " adventurism, illusionism, exhibitionism, extremism, and superficiality. He also described Ahmadinejad's denial of the Holocaust as harming Iran's standing with the rest of the world, and undermining its dignity. The debate was intense with Moussavi at one point saying the Iranian president was moving towards a "dictatorship." Ahmadinejad said that Moussavi was being supported by Khatami and Hashemi to bring him down. A video showing this simple home was circulated before the debate to contrast Ahmadinejad's simple style with that of some of his opponents like Nateq Nouri, a conservative Speaker of Parliament.

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U.S. Federal Reserve chairman Bernanke, says the Fed will keep interest rates low till unemployment reaches 6.5%, as long as inflation remains at about 2%. If unemployment reaches 6.5%, and this is because more people are dropping out of the labor market, he will take this into account. If unemployment stays high the Fed indicated in its statement that it would tolerate a higher inflation of 2.5%, as long as the longer term outlook was for inflation to be at 2%. Bernanke said this doesn't mean monetary policy is on autopilot, because the Fed will watch conditions carefully and will leave room for flexibility- keeping an eye out for new asset bubbles that could develop, and monitoring labor market conditions and inflationary pressures and inflation expectations. If inflation falls well below 2%, or unemployment rate falls mainly because of people dropping out of the labor market, the Fed may continue to keep interest rates low. This policy was announced as U.S. fiscal cliff deficit negotiations continued in Dec. 2012 with one scenario being considered by both political parties being going over the Jan. 1 deadline before coming to an agreement. Bernanke pointed to this, saying "this is a major risk factor right now." The Fed's activist policy in economic policy has given financial markets and business a measure of stability not provided by government and Congress. Fed policy is to buy $40 billion of mortgage securities, and $45 billion of long term Treasury securities for each month in 2013. It will fund the purchases by adding reserves to the banking system, which is to say that it will print money to buy more bonds. This is a major decision by the Fed in that the Fed has shied away from unemployment targets in the past. Bernanke described this action as a new"automatic stabilizer" in the U.S. financial system- if unemployment rises investors know this pushes the Fed's interest rate increases further down the road and would drive interest rates down, if unemployment drops sooner than expected, investors anticipating Fed's rate increases would drive long term interest rates up, to keep stable growth....

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Friedman reports from an election booth in the Shubra el-Khema neighborhood of Cairo during the Egypptian parliamentary elections in 2012. He says the realities are quite different as the poorly educated women who were voting described their day to day concerns to Friedman about security, education for the children and social services. The Muslim Brotherhood and the Salafist Al Nour party win most of the seats. Yet the democracy protests have empowered all parts of Egyptian society, and has created checks and balances in the process.

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Krugman points to the connection between the failure to achieve debt reduction through debt forgiveness and the sluggish economic growth in the eurozone and U.S., five years after the global banking and financial crisis of 2009 and four years after the beginning of the eurozone debt crisis in 2010. In the U.S. debt reduction for homeowners was delayed with a wave of foreclosures, and in Europe austerity budgets were the norm as Germany pushed hard for austerity policies. In 2014 small relaxation of austerity to give relief to voters took place in Greece, France, Italy and Spain, with austerity budgets still in place. Growth also slowed in Germany to slight contraction in the third quarter and no growth in the fourth quarter of 2014. This is leading to the formulation of new policy to address growth challenges in the eurozone. Debt to GDP is growing in eurozone countries and Britain because of lack of growth, even though spending cuts have been made, showing the need for rethinking policy. ...

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Coral Davenport of the NYT provides some of the basics of the Paris climate change agreement. This includes an effort to cut greenhouse gas emissions by half to avoid a situation in which atmospheric temperatures rise by 2 degrees Celsius or 3.6 degree Fahrenheit.  The earlier effort to negotiate an accord failed in 2009 in Copenhagen. This time all 186 countries were asked to signup with the USA and China, the No. 1 and No. 2 polluters and India leading the way. Germany is well on its way to self sufficiency through development of solar and wind energy with the German government leading the way, and France leads in the use of nuclear energy. How did this happen now? As Davenport points out there are scientific studies. But this is not the primary reason China is shifting.Davenport fails to emphasize the health concerns and pollution concerns that motivated China to shift away from coal. China's industrial revolution of the last 3 decades has come at a huge cost in pollution of air and water, and president Xi Jinping has decided to make the shift away from coal a top priority. It is estimated that mortality rates for areas of high coal use north of the Yangzte river have higher mortality rates than areas of lower use of coal south of the Yangzte river. The other big polluter India is shifting because it is learning from China's experience. Davenport mentions the resistance to the scientific evidence in the Republican party. As a result it is already clear that it lacks support in Congress and under a future Republican administration. In a fashion similar to healthcare, president Obama failed to create a consensus before proceeding in the hope that this would be better than waiting. However American industry is already moving away from coal as documented in Links- "The Trump executive order on coal and the continuing shift to natural gas." Utilities in the U.S. are making the shift away from coal because of the economics and planning ahead as governments can change every four years. ...

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Samuelson discusses the differences between the Bureau of Labor Statistics figures for June 2014 using the Payroll Survey and the Household Survey, each telling a different story. According to the Payroll Survey 288,000 jobs were added. The Payroll Survey is a monthly survey of 554,000 business locations, with firms asked to give the number of people on payrolls, pay and occupations. The Household Survey of the BLS asks households in monthly interviews with 60,000 Americans whether they have a job, is it part time or full time, are they looking for full time work, or jobless and for how long. The Household Survey showed June 2014 job increase at 407,000, using an estimate of 1,115,000 increase in part-time jobs and a loss of 708,000 full time jobs. Of the two the payroll survey is larger and considered by economists to be more representative. Other statistics show the parttime workers at about 3 million higher than 2007 before the 2008 financial crisis, suggesting the shift to part time jobs has been one negative result of the crisis....

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The Editorial Board of the Washington Post draws attention to the speculative bubble in housing in China, the policies for sale of land by local governments that fuel the bubble, the corrupt local officials, and GDP growth that reflects overinvestment in housing creating serious imbalances in the economy. The structure of the economic and political system which promote this overinvestment in real estate has also reduced the role of the Chinese consumer in GDP growth, and is preventing a rebalancing of the world economy.

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Von Mark Schieritz of Germany's Zeit Online describes the changes underway following the election campaigns in the U.S., and France, and the Brexit vote in Britain, all signalling the discontent of people left behind by the tech, capitalism, trade and globalization changes of the last two decades. The appeal of one time fringe politicians using racist slogans and divisive rhetoric to appeal to those left behind, appealing to people lacking intergenerational mobility, and without much hope for a better future, is a serious concern. People who are gullible enough, lack college education, or racially isolated so that they are not likely to look carefully at what is being offered in terms of programs and change of competing parties, and likely to overlook the hard and difficult road for corrective course of action, because of anger and pentup fears. Schieritz cites as part of this change the unanimously approved conclusion in its final declaration at the G-20 meeting in Chengdu, China- "The benefits of growth need to be shared more broadly within and among countries to promote inclusiveness." Yet this can be a sort of "too little, too late."  Bankers who are cited in an email going around Wall Street lack credibility with groups on Main Street, to people adversely affected by tech, trade and globalization changes that have been persistently ignored for over a decade, close to two decades. More convincing is the tone of Theresa May, the British prime minister's first statement outside 10 Downing Street- who spoke of the "burning injustices" and her determination to make this a top priority of her government. Still more convincing are the programs to invest $275 billion over 10 years in infrastructure put forward by the leading candidate in the U.S. presidential election of 2016, to provide easier access to public universities and colleges to those left behind, as a sure way to create new jobs and address intergenerational mobility. In fact every leading candidate had made the loss of upward mobility their central plank already in 2015, long before Trump and Sanders started their campaign. The real hope lies in western leaders Merkel, May, and Clinton, all keenly aware students of changes, all women by the way who have sensed the injustice and have the ability to come up with something new and promising for the future, after learning the lessons of the past. ...

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The facts that guide one's understanding of what is happening in Greece relate to the size of the public sector for a small country like Greece, and the failure of people from all classes of society from cab drivers and civil servants to small business and the shipping industry, to pay taxes. These two twin facts and a splurge of spending during and after the 2004 Olympics without proper and correct account keeping, has brought Greece to its present situation. One estimate is that every Greek person would owe 27,000 dollars, that is how much the national debt has swollen to- a massive 300 billion euros debt for a small country. This is 115% of its GDP. And the public sector spending simply went unchecked by different governments trying to win votes. Estimates are that the public sector makes up 40% of Greece's GDP, and government workers are 15% of the active workforce. Not paying taxes has become a societal trait in Greece, as a result the government does not collect an estimated 25 billion euros a year in taxes each year. And this does not include the taxes that would be paid if owners in the Greek shipping industry were to not take advantage of an exemption from paying taxes granted by the government. The result- Greece's socialist government of Prime Minister Papandreou has accepted a $110 billion euro bailout from the European Union and the IMF which comes with cuts in public spending and austerity measures designed to reduce the deficit form 13.6% of GDP to 3% in 3 years. Its important to understand what is happening in Greece, because from Prime Minister Cameron in Britain (with his cuts in government department spending of 25% over 5 years), to Prime Minister Naoto Kan of Japan (with a planned doubling of the sales tax), the mood in Europe and Japan is shifting to austerity measures that would correct excessive government spending. In Greece Papandreou and his ministers are making serious efforts to change a culture of not paying taxes. See the groups and links for Papandreou and Greece....