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Jackson Diehl, deputy editorial page editor of the Washington Post, says its hard not to conclude that Obama is really not engaged with the struggle for democracy and democratic process in the countries of the Middle East and the Arab World. His voice is only heard sporadically, and is missing altogether at crucial times, as the people of Egypt, Libya, and other countries express their democratic aspirations. This has been the case from the beginning of this struggle and continues today. He cites an Arab opinion poll, from Shibley Telhami of the University of Maryland with Zogby International, which shows a positive view of Obama at 34%, compared with 39% in 2009. When asked which countries have played a positive role, France and Turkey are given first place and the U.S. is close to China. This is because France's Sarkozy and Turkey have been actively engaged, and Obama has been silent for most of the time. Diehl says most Egyptians he talked to in Cairo in a recent visit, think that Obama's focus is on going along with the military and Israel. ...

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The Indian government's chief economic advisor, Kaushik Basu, says the opening up of India's retail sector would have benefitted everyone including middle traders. This would happen because the retail sector would go through a vast expansion creating room for more players even though the per unit margin from products would go down. Experts say the infusion of new technologies and investment in India's supply chain and cold storage setup would help reduce food prices and inflation. Basu made the comments at the launching of the New Oxford Companion to Economics in India in Feb 2012. Basu is co-editor and it has contributions from Ratan Tata, Pranab Mukherjee, and Nandan Nilekhani.

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Britain faces many risks as a series of spending cuts are implemented in 2011. Inflation was at 4.4% in February, 2011, above the BOE target of 2%. This increases pressure on the Bank of England's Monetary Policy Committee to increase rates from 0.5%. BOE is widely expected to keep this rate on hold because the inflation pressures are seen as temporary. The Institute of Fiscal Studies estimate is that real household incomes have fallen by 1.6% in 2008-2011. Borrowing by the government was higher in February at 11.8 billion pounds, reducing the deficit reduction in 2011. Slower growth will cut tax receipts and reduce deficit reduction in future years.

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The PBOC, China's central bank, injects $65 billion into China's banking system in Dec. 2014 to get banks to increase lending as the economy slows further. Experts say the growth rate is likely to drop below 7%. At the same time the central bank and economic policy makers are concerned about excesssive debt in the economy, shadow banking and local government debt risks. It cut benchmark interest rates by 0.25% in 2014. Other risks are developing as the property market cools off and investors shift investment to equity markets creating a surge of 50% in the Shanghai and Shenzen stock exchanges for 2014. As a result economic policy is not as effective in today's environment.

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Richard Portes of the London Business School provides two good reasons why the EU's decision to adopt the French Banking Federation's proposal for rollovers with 10% interest costs is a serious mistake. It doubles the interest costs from 4-6% to 10% with 2% Greek GDP growth and makes debt servicing untenable. Portes says the real Brady Plan from the 1980's included a 35-40% bondholders haircut. Deals of this type have a precedent- in Mexico in 1988 and in Argentina in 2001 such bond exchanges were soon followed by deals that placed bondholder haricuts on creditors. The lesson from Latin America in the 1980's, says Portes, is that the burdens of servicing a debt of such proportions under onerous conditions only extinguishes the enterprise, investment and productive capabilities of the particular country trying to service that debt, making the debt even less serviceable. See the Wall Street Journal's editorial on this deal which it calls "The French Deception." The terms sound like Greek to the editors leaving a sense that French banks are only saying "gimme." The only benefit achieved may be putting off the problem and avoiding contagion to Portugal and Spain. Yet this is not that much of a benefit when one realizes that the problem has not gone away, and is likely to look much worse six or nine months from now....

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Estimates by the Congresssional Budget Office in January 2011 show the federal budget deficit in the US at nearly $1.5 trillion in 2011. The deficit would equal 9.8% of the US gross domestic product. In 2009 the budget deficit was $1.4 trillion or 10% of GDP. The CBO estimates show the debt held by the public increasing from 40% of GDP at the end of fiscal year 2008 to about 70% at the end of fiscal year 2011. Republican senators Orrin Hatch of Utah and John Cornyn of Texas called for a constitutional balanced budget amendment in an op-ed published in Politico.

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Conversation with Ford's marketing chief Jim Farley who had 17 years with Toyota and marketed the Scion brand. He is a guy who likes to get a fresh look at things like talking to a security guard before coming up with a marketing plan for the Scion, and talking to a maintenance technician about the 150, all off the beaten track. This is reflective of the approach of Jim Farley. Even talking to psychologists about how to convince people to come and try out Ford cars. He is excited about Ford's Eco-boost engine which is a direct injection technology engine which Ford can democratize as he puts it to put it, on some 500,000 cars and trucks by 2013, something not done before. This is a technology that scales up pretty well. Drivers in Western Europe are familiar with direct injection diesels as a way to cut high gas costs and cut emissions, but Americans are not that familiar with it. It boosts fuel economy by 20% and reduces emissions by 15%, and giving a V6 the power and torque of a V8 engine. Basically it injects fuel directly into the engine in small specific amounts so that very little is wasted and the turbocharger uses waste energy from exhaust gas to drive the turbine. He is also in charge of promoting and marketing the Eco-Boost engine, which will show up first in the 2009 MKS Lincoln sedan. ...

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Liu He, the author of the 2013 DRC report on recommended changes to China's banking and financial system, is now the director of the Communist party's top financial policy committee and senior advisor to president Jinping. Changes he is pushing for relate to increasing focus on credit risk for China's banks, promoting competiion between banks, a mechanism for letting banks fail, and a deposit insurance program to protect the public against failing banks. To open up the sector dominated by state owned banks, opening private banks would be encouraged. Local governments would be allowed to issue bonds in an effort to reduce their dependence on land sales and opaque off-market borrowing. The urgency of this agenda comes from the realization in top Chinese policy circles and the Jinping-Keqiang administration of the risks to the banking sysem from the lack of attention to credit risks in bank lending.

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The effects on Greece of a pullback in global financial markets in October 2014. Assurances that the Greek financial system and banking will be supported by the government and the EU. The pullback complicates the Samaras government's plan to exit the bailout program with the IMF early. There is also the prospect of new elections in early 2014 leading to a left of centre Syriza party government. Syriza's Tsipras says he would renegotiate the terms of the debt agreement to reduce debt owed to Germany and other countries in the EU.

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Karen Elliott House, a former publisher of the Wall Street Journal, who won a Pulitzer prize for reporting on the Middle East, is now researching Saudi society. She now writes this scathing report from Saudi Arabia. She says that just as in Egypt, an old corrupt leadership continues in power for several decades, an old corrupt leadership in the form of 7000 princes in a vast royal family. King Abdullah is in his eighties and the ruling princes have an average age of 83, and have illnesses for which they are under medical treatment. They continue to lead a nation where 60% of the people are young people under the age of 18! Itself an astounding fact. Karen House points out that the internet and social media have also made the young very knowledgeable about the conditions in the country- where 40% of Saudis live in poverty and 70% cannot afford a home. Bad managemet by the princes has affected basic services including the sewage and drainage problems in Jeddah after the floods. It is astounding that far less wealthy Gulf sheikdoms are doing a better job of providing education, jobs and health care. Thirty years of visiting Saudi Arabia, and the last four years of intensive reporting, has persuaded Karen House that this situation is at an impasse that might end up resolving itself through some sort of upheaval. To Karen House this looks like the last days of the aging leadership under Brezhnev before the Soviet Union collapsed....

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Faces of the street protests in Rio de Janeiro, Sao Paulo, and other Brazilian cities.

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A new report, "China: 2030," by the World Bank and the Development Research Center (DRC), has major implications for the course of action taken by new Chinese leaders. The limits to China's economic model with the dominant role of state owned companies has been pointed out in the past. It has now reached a point where China must choose to move to a modified model or face the "middle income trap" of countries like Brazil and Mexico, where income levels and growth reaches a certain level and then decelerates suddenly with little warning. The report makes some major recommendations that would modify the current system. It says the state owned companies should be supervised by asset management firms focussed on commercializing these companies, and not supervised by the State-owned Assets Supervision and Administration Commission (SASAC). The asset management firms would restrict the state owned companies on what areas they participate and sell off businesses to make it possible for private companies to compete. Zoellick says- "China needs to restrict the role of the state-owned companies, break up monopolies, diversify ownership and lower entry barriers to private firms." The state owned companies would be required to pay sharply higher dividends to the government which could then be used for social programs. Currently state owned companies invest in land which is sold by local governments for revenue helping fuel the real estate bubble. Significantly, the report had its origins when it was proposed by Mr. Zoellick, head of the World Bank, during a visit to Beijing in Sept 2010. It was supported by Li Keqiang, then vice premier, and now expected to be the new prime minister of China. The World Bank is widely respected by Chinese leaders because of its assistance during the early stages of reform in the 1980's. The DRC reports to China's State Council, a top governmental institution, and the No. 2 person at DRC, Liu He, is a senior advisor to the Politburo Standing Committee. He helped draft the current five year plan and is close to Li and Xi Jinping, the next president of China. The SASAC has opposed these ideas, especially any shift in its personnel selection of management at the state owned companies, which it shares with the Communist party's personnel department. Respected China economists say China faces large risks of a sudden sharp slowdown because the the state owned companies have largely copied foreign technology and have not generated enough technological advances, which will be needed for the next stage of growth. Lower growth rates could worsen problems in China's banking system leading to a crisis. The Conference Board, estimates China's growth at 8% for 2012, slowing to an average annual growth rate of 6.6% from 2013 to 2016. Barry Eichengreen of UC Berkeley, Donghyun Park of the Asian Development Bank, and Kwanho Shin of Korea University, say the annual growth rate will drop by at least 2 percentage points by 2015....