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The broken world economy has hurt the American people, in small communities and towns across the US whose societal fabric was destroyed by a system of world trade with abuses done by China. Japan, European Union, Canada and Mexico since 2000. Shortsighted American leaders and economists allowed this to happen. Robert Lighthizer on the New World Order a new system of world trade that replaces the old in 2026. The old trading system was one in which lip service was made to free trade while all the time the system was used by Japan, Germany, China, Canada, Mexico and other nations to build non tariff barriers and other policies to support their industry  at the expense of the United States leading to disillusionment in the US. The facts are mind boggling- the loss of 5 million jobs, many small communities across the US decimated with loss of jobs. About 20 trillion in wealth transfers to China and other countries over 2000-2020, with foreigners owning $27 trillion more of US assets than the US owns of theirs. US Trade Deficits that went up by 40% in 4 years of the Biden administration from $800 billion to $1.2 trillion. Economists and weak leaders got it all wrong allowing this to happen from Geoge W. Bush to Clinton Bush and Obama. Lighthizer says "shortsighted leaders aided and abetted this process," from 1990 to early 2010. Consider that US had 17.3 million  people in manufacturing, in factories all over the US in 1970, in 1999 we had the same number of jobs, even though there were changes in technology and productivity- the US held its own with the rest of the world. The Bush, Obama years were the worst for the US industry - by 2026 we have 12.6 million - loss of 4.7 million jobs since 1999. And real median household income took a big hit growing from $72,000 to $84,000 about 17% in the last 25 years, compared to twice that in the period 1975-2000 prior quarter century. The result is the fracturing of American society- and dire consequences for healthcare as communities suffered from loss of jobs leading to drug overdoses, alcohol abuse and suicides, which are common in post industrial American communities. Think of this fact: two thirds of America's workforce that does not have a college degree, that is working class people, lives 8 fewer years than college graduates, a gap that was only 2.5  years in 1992. The wars carried on by Bush and continued by Obama in the Middle East also wracked these same communities till Biden and DJT pulled out. One has only to drive across America to see this with one's own eyes. Trade may be an abstract topic for economists and politicians- there is nothing abstract about this. And the economic growth of the US has suffered with the unfair trading system with China, European Union, Japan, Canada and Mexico. From 1945 to 2000 American growth was 3.2% a year. Since 2000 only 2 years of growth over 3%. US has not seen historically normal growth for the last 19 years and at this rate (if we continued along this path) the Congressional Budget Office says 1.8% growth for 2027-2035. There are other factors yet the the major driver of this is our trade deficit of $1.2 trillion dollars a year. It is a story of remarkable persistence in the Nation's interest through 2 adminstrations- this Lighthizer story. Lighthizer fought Japanese commercial interests as Deputy Trade Representative under Ronald Reagan, and as US Trade Representative under DJT in the first DJT administration in 2016-2020. His Deputy at the time is Jamieson Greer who is now the US Trade Representative in the second DJT adminstration in 2025. For 30 years this brave American patriot has fought to reverse the bad actions of presidents and economists that have led to devastating losses in the American countryside. He says any new trading system must be perceived as fair to working people. It will survive only if working people think it is good for them. It cannot and must entrench a small, permanent elite. The benefits going to labour must be at least as great as those going to capital. It should create fulfilling high paying jobs for the vast majority of the American people. This is America's new promise to its people, its new compact with its people. ...

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Where do you place a winner of the Democratic primary in Maine, Graham Plattner, an oyster farmer who dropped out of college at George Washington University, served briefly in the Middle East wars of Bush and Obama, and had PTSD. Is he working class, middle working class or is he from a downwardly mobile professional class considering he has parents who are well educated and father a prominent lawyer in Maine? Plattner easily defeated a 3 term governor of Maine with his average working class demeanor and language. He is for universal health care, (Medicare for All) universal child care, affordable housing, affordable college. Politics in the US has been moving away from the simple divisions before 1950 created by the Industrial Revolution- the workers in factories and the owners of capital allied with the professional middle class. The few owners of capital mostly college educated allied with people from the non college educated workers in factories who are conservative in their values and beliefs and on the other side the college educated professional middle class now downwardly mobile because of the many recessions and high unemployment from frequent financial crises, with college costing $80,000 a year putting them in deep debt. There is today in the WSJ a story of a professional worker who at $194,000 a year salary is not able to payoff $15000 debt which owners of capital have set at 26% interest and is in downward spiral. Some of this comes from large college and other debt. There is says WSJ Analysis $1.25 trillion in credit card debt alone with highest delinquency rates in decades in 2026. Cost of living has only made things worse and some of this happened as Biden poured money into the economy to help people hurt by the pandemic, yet with some short run consequences with demand strong businesses including hotels, restaurants and grocery stores, auto dealers, jacking up their prices by over 20% in 1 year and Biden failing to respond, getting overwhelmed by open borders migrants under Mayorkas and Harris (also hit by a sudden Venezuelan migrant influx). This is the America one has today- a confusing mix. This in reality means Democrats may take issue with Democrats, Republicans take issue with Republicans, and Democrats join with Republicans on issue by issue basis. It might actually be rational than irrational. On cultural issues if the country has gone over its head and moved too fast on some issues that are not for the general public good, people of different backgrounds can come together to get the best path. On economic issues things are never so straightforward, there are unpredictable consequences and the rules of economics are really not so straightforward either.  Providing relief can mean the government shouldering the burden as during the pandemic which it should, yet with caution as businesses can use the excess demand to raise prices and one is back to square one with everybody worse off as happened with Biden. Migrant flows and fears of insecurity in public spaces can lead to a severe public "discomfort that can waylay the best intentions of a Harris or Biden, leading to public "backlash." In fact the title of a recent book is "Whiplash." Current books include Floridan Marco Rubio's "Decade's of Decadence- How our Spoiled Elites Blew America's Inheritance of Liberty, Security and Prosperity." Rubio means it. Its authentic because as Rubio says repeatedly, his parents could make a living in the 1960's working in a factory with decent wages, low cost of living and low cost of college, the arithmetic between salaries and what you needed for decent home in suburbs and sending children to good public schools, then to college, all adding up. The result is that Rubio could go to college and serve in the Florida legislature. Rubio says in 2026, after the elites under Bush and Obama and faulty economic theory shipped all of our factories to China, that the story of his parents and his education would simply be impossible. This is what he told people in India on his first visit last week. His parents were Cuban immigrants, yet he identifies with Spain and with western civilization, a devout Roman Catholic. Rubio is a Republican, and is in large contrast with Alejandro Mayorkas, also from Cuba, and Biden's Head of Homeland Security. This is the mix of people and representatives in Congress,  business people, small business owners, professionals, that we have today in 2026 in the US. Plattner and Rubio, one a Democrat and one a Republican- both have something in common. Plattner also has general disdain for "the corporate interests, the billionaires, the Washington DC elites, and the establishment politicians."  The winds are blowing in the direction of getting things right- remembering that Eisenhower continued the work of the Kennedy and LBJ administrations (Eisenhower built the Interstate Highway System for instance, and LBJ gave America Social Security and Medicare). Before that Franklin Roosevelt a Democrat built on the work of his uncle Republican Theodore Roosevelt (TR gave America the idea of good governance and built the US Navy, FDR fought the Depression and stabilized a faltering economy after mistakes made by Republican Herbert Hoover could have happened even if Hoover was a Democrat. FDR was himself from a wealthy New York family and when he first met fellow New Yorker Frances Perkins before his struggle with polio, a haughty New York gentleman. That was before Frances Perkins as FDR's Labor Secretary joined forces with Roosevelt to give New York a modernized administration governance structure by 1940 that was applied to all 51 states after 1950. It allied labor with capital with fairness for all, and was the first such modern structure of this size the world had ever seen, which was the fundamental strength of the United States of America. It was imitated in Asia, first in the Shanghai region then China, and first in the Ahmedabad region and now India. The US is faced with the challenge of recreating and rebuilding this today, as first China, then India remind America of its roots which they have followed in their own style and culture.  First good governance, then good institutional structures, alligning labor and capital with fairness for all, strong affordable + accessible educational and healthcare systems, and investments of capital and labor for infrastructure + industrial development. ...

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By taking action in Venezuela in a way that benefits the Venezuelan people (and similar action in the long run interests of the Iranian people to dedicate most of the resources for development and increase share of oil revenues without discounting and removing sanctions ill effects on economy and quality of life) major new changes can improve quality of life in the world.  Venezuelan production which was 3 million barrels a day has declined to 900,000 without US investment and technological upgrades. With US investment this can be increased to put additional oil supplies on the market lost in the war with Iran and smaller traffic through the Straits of Hormuz. Venezuelan crude is best suited to US refineries which frees up shale oil for export to meet needs of India and Europe. China which had hyper growth through massive oil consumption would reduce its growth rate and its impact on climate change as it adjusts to the loss of 3 million barrels a day it no longer gets from Iran. Slower growth rate in China is good for the climate as it is the hyper growth of China that put the most pressure on climate even as Europe and the US had cut  fossil fuels consumption over the last decade. China made 2 coal plants a week and 95% of all new global coal construction in 2023. India needs additional oil supplies as it increases its growth rate from a much lower point of development (and electricity poverty) than China. By simply settling for normal development compared to hyper development targets( China has reached a point of Oil Fairness Percentage where each country gets to use the same percentage of oil as its population is as a percentage of world population- the number being about 17% for China for both, with the number being 18% for India and it having a shortfall of 12% based on its oil consumption being only 6% of the world total). China can reduce oil and coal consumption reducing pressure on oil prices and absorbing most of the impact from the loss of Iranian oil. China and Russia + (old Soviet territory) Canada, Australia, Brazil, Argentina, make up about 40% of the world's territorial landmass, would be large beneficiaries with improved climatic conditions from burning less coal. They are now highly developed countries and do not need hyper growth which requires China to build 2 coal plants a week and consume excessive amounts of crude oil and coal based on artificially set targets that make no sense by destroying the climate when no child in China lacks electricity to read. Marathon Philipps Valero with over half a million barrels of refining capacity for heavy Venezuelan crude can now put this to use using the imports by US of lower priced (by $9 to Brent crude) Venezuelan crude oil. In a few months of 2025 US has imported 280,000 barrels a day of Venezuelan crude in February 2026 alone some of it going to the large Valero refinery in Port Arthur, Texas. American oil refiners make larger margins using the Venezuelan crude than they make on light crude from shale oil producers in the US. What this does is to increase the supply of crude and refined oil products on the market as the light crude get shipped overseas to India and Europe- including countries like Spain which took in 100,000 barrels a day of shale crude from US in February 2026. ...

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Instead of a jinx much to the contrary the US economy outlook for 2030 in Feb 2026- a surge in investment spending in 2026-2030, new manufacturing investments and lower energy costs, moderating inflation, are likely to propel the US economy ahead to 2030.The effect of tariffs as a policy making tool has been muted because of exemptions, reversal of tariff rates once key objectives were secure for tariffs as a way to get action on foreign policy as with Indian purchases of Russian oil, deals with Japan, South Korea and China, India, UK and the EU. Some sources such as the Philadelphia Fed see price rises reaching 3% in some inflation guages more than the moderate 2.5% in the consumer price index for January 2026. These sources see the hiring slowing down just as layoffs begin to happen in the latter part of the year which is a possibility but less likely. At this point in Feb 2026 there is a tendency not to layoff and to hang onto employees, and hiring has been slow in 2025. January's report of 130,000 jobs added is the first sign of strengthening of the jobs market. Overall a cautious view would be to call it a soft landing after the inflation surge of the covid period. Another way of looking at is is more in line with the strategic direction of the US economy- freeing up the economy with investments in energy,  reducing the key costs of production, tax policy of Bessent's complete one shot depreciation of equipment increasing business investment, tariff policy making the world trading system fairer and now more attuned to US interests, all creating an investment and jobs surge in 2026-2027. There is an added benefit from US efforts to free up the world trading system from the stranglehold placed on it by China with its control over world manufacturing. A dominance and unwise concentration gained from the serious mistakes of the Bush-Clinton period of not putting in safeguards for US factories and jobs (that form the backbone for families in neighborhoods towns and regions across the US), and US business interests growing indifference to the very communities they were based in by outshoring to China destroying whole regions in America. Even where it is criticized or seen as negative there are huge benefits when the US acted. Tariff increase on India is a clear example- it built Indian resilient attitude in June-Feb 2026, and during this period it cut funding Russia's war in Ukraine by sourcing energy from other sources, the US policy led to India and EU+ Germany signing trade agreements to double their effort and double trade and scientific cooperation ( a goal secured for the US as it reduces concentration in China), was followed by US signing its own trade agreement with India within days, and increases world trade of US and EU and Germany in ways that will bring 2.5 billion people into a strong partnership that overshadows anything that happened in China in the Clinton-Bush-Obama years of failure. ...

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The dollar remains the dominant force in capital markets. It is strengthening after US central bank raised interest rates 8 times in 2021-2022 to about 5.25%. China is cutting interest rates as its economy with debt at about 290% of GDP is slowing, the EU increasing rates as it faces inflation fueled by price increases and some price gouging. In the US inflation is cut in half by Fed policy to 4% in May 2023, Biden's policies to help with the cost of living and restrain price gouging, and by supply chains working better than in 2021. The US looks the strongest of the lot.

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Jack Horton of BBC Verify screens the former president Trump's speech at the Republican National Convention. “Our crime rate is going up, while crime statistics all over the world are going down".  Fact: FBI data shows crime down 6% and a drop in the murder rate by 13% in 2023. For the First Quarter of 2024 crime down by 15% and recorded murder rate down 26%. "We've had the worst inflation we've ever had under this person [Biden]. I will end the devastating inflation crisis immediately, bring down interest rates and lower the cost of energy . We will drill, baby, drill."  Fact: Inflation went up to 9.1% from 1.4% at the end of the Trump term in the first 2 years of of the Biden Administration by June 2022. Biden and Federal Reserves Powell brought this down to 3%. Explained: This inflation jump to 9% would have happened from supply chain in China for Trump administration as well. Trump's last year was 2019 the Covid pandemic started in January the lockdown by midyear meant sharp drop in demand and little room for inflation. The concentration of supply chain in China was the cause of the surge in inflation as China shut down and restarted late into 2022 causing shortages in factory parts and supplies. Biden focused on vaccination in 2020-2021. This inflation would have happened under Trump- this concentration of supply chain started with Reagan economic philosophy to ship production (and jobs) overseas, Clinton Bush Obama and Trump did little about it. Biden invested heavily in Make in America manufacturing and jobs at home. Biden and Powell did a good job of bringing this inflation down by 2023 to 3% before the European Union and UK. Younger voters don't know this they get their news from the internet and show little interest, see only that the low inflation under Trump and the higher inflation during the pandemic recovery under Biden and blame Biden. will Trump do better on inflation in 2024-2028. The WSJ does not think so its analysis shows inflation higher under Trump than Biden because of a planned 60% tax on imports from China. Trump follows Reagan/Friedman theory of the old Republican party of higher tax cuts for the wealthy, so no money is left for investing in American manufacturing and jobs as Biden free of this theory is able to do, leading to slowing growth with inflation under Trump.        ...

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DJT calls for 10% cap on credit card interest for affordability crisis for US families. Most of the credit card companies in the US base these operations in places without usury laws such as Nevada, and charge exorbitant rates on credit cards, a practice that is going on for 6 decades since the 1960's. It makes it harder for families to get out of poverty and living from paycheck to paycheck. It is another aspect of the affordability crisis. Democrats have never raised this up for action. “Please be informed that we will no longer let the American Public be ‘ripped off’ by Credit Card Companies that are charging Interest Rates of 20 to 30%, and even more,” the president says he wants the cap to start Jan. 20, 2026 If this happens it will be a big win for the American people and end a decades long usury type business in credit cards that violates the idea on which the US was founded of opportunity for all and access to credit as critical in making this happen. Interest rates of 30% are a way to reduce social mobility in the way a feudal order once did in the years before the Modern World and the Scientific Revolution. A society without social mobility is one in decline can be seen in the way Spain went into decline after 1700 and Britain emerged to lead the Modern World and the Industrial Revolution. This is the crisis America faces today- change or cede leadership to China or some other nation. It is about this not the capitalist system or other system as many like to portray it, and Adam Smith was all about growth and social mobility that were part of his system which today is sadly forgotten, yet needs to be bravely put forward. ...

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Russian shadow fleet and about 80% of Russian oil now sanctioned after US sanctions on Rosneft and Lukoil- Feb 2026. This is putting more oil onto a fleeet of vessels operating under Comoros, Sierra Leone and third nation flags, or even two flags, which the Americans and Europeans are tracking and diverting. Russia seeks to put this oil on an alternative tanker fleet it owns and which is insured by Russia, that goes from the Baltic and Black seas to the Mediterranean to refineries in Turkey, India and China. What thsi does is increases risks for Russia in shipping and for the Euroepans and Americans when ships fly Russian flags with military convoy. The overall effect of cutting Russian oil exports in addition to India committing to buy American oil and Venezuelan oil instead of Russian oil in its trade agreement with US, is that Russian economy may be in risky territory. Inflation is higher than official 6 percent at 16% interest rates, and this increases the risk. Budget needs within Russia may not be met as this continues. It is in Russia's interest now to conclude a peace agreement with Ukraine, now that the US has moved away from NATO/Europe to peaceful cooperation with Russia and competition with China. ...

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Surveys of American, European and Japanese companies show souring of outlook for China investment. And Biden administration new rules leading to investment of China profits in the US economy. About $110 billion moved out of yuan denominated China bonds since 2022. There is a sharp decline in the profits of US and EU companies in China that are reinvested in China after China's sporadic lockdowns in 2022 and increase in interest rates in the US. WSJ Analysis shows $170 billion profits reinvested in 2021 to net decline in third quarter 2023 outflows of capital over inflows declining by $11.8 billion, the first ever since 1998. Unlike in the past profits are being repatriated back out of the country so that investments can be made in the US economy or in other countries in the supply chain. This is a fundamental shift as risk of doing business in China increases. 

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Kristof of the NYT writes about DJT Action in Venezuela January 3, 2026.  Some of the least understood aspects of the US president's language on Venezuela- The president's reference to oil resources is not for the US to benefit from the oil reserves. It is about oil in the sense that the oil industry in Venezuela is in total disrepair and broken from years and decades of nationalization followed by lack of investment, lack of western technology.  Sanctions put a huge price on the Venezuelan economy with the brunt of it borne by ordinary people- the same people that a socialist like Hugo Chavez thought he could help with his erratic ideology. As China, and now India has learned the only way to get ahead in this world for nations is to invest, invest, invest with larger and larger pools of capital, technologies and labour. By alienating the US or EU there is a loss of technologies and of investment so that one is going to bat with only one strike and you are out, so that from Day 1, China under Mao, India under Nehru had lost the race, so did all the "socialist" regimes in the world. Conversely China under Deng and successors, and India under Modi are breaking development records. How does the US change this? First it removes the sanctions on the Venezuelan economy. Second it gives Chevron the green light for increased production. Oil facilities of the Venezuelan oil company will get foreign investment and US investment from American oil companies with returns for both and the state oil revenues invested under a government that is able to invest it free of corruption or it being funneled out of the country to support other regimes in Latin America. This will rebuild the country's health system, its broken infrastructure, restore its finances, and make it in a decade one of the advanced economies in Latin America. But only if- the gangs and other private militias, the other military elements from the two decades of utter mismanagement and drug trafficking are  removed. A new way will have to be devised that the US as to work out ad hoc meaning in the process of doing, invented that meets the conditions of getting this done and the process of reconstruction of Venezuela under the Monroe doctrine of keeping the entire western hemisphere free of such elements. The US achieved this with the help of Great Britain in 1823 when it was only 50 years since it's founding in 1776. The US has the resources in 2026 to make this happen in the interests of the people of the western hemisphere, in the quality of life of people in the western hemisphere. It does not seek any country's resources, it seeks the development of the countries in the western hemisphere in the great tradition of Jefferson, Monroe, Lincoln, FDR and JFK. ...

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The Fed's interest rate policies to fight inflation have increased the return on US assets vs overseas emerging market countries such as Brazil and India. US Treasurys now offer 2% return after inflation. This means investors shy away from emerging markets as the extra yield offered by emerging market country bonds is diminishing. This reduces inflow of investment into countries from Turkey to Brazil. Higher rates also increase the value of the dollar vs other currencies including that of China and India, Brazil, Mexico. This means it is costlier for other countries to buy goods priced in dollars (India, Mexico)  or service dollar denominated debts (Argentina or Turkey). Where countries had raised rates to fight inflation this means central banks have less room to cut rates to stimulate their economies. This also happens as China's growth of 5% in 2023 as it has high debt and little room for stimulus measures, reduces any growth in countries in Latin America or Africa that export commodities from copper and iron to other materials. ...

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The WSJ cites economic studies that show 60% of China's overseas loans are troubled in 2022 compared to 10% in 2010. China has scaled down the Belt and Road Initiative and is reorganizing the effort to introduce risk controls and reduce lending. China's preferred approach in an increasing interest rate environment is to extend the maturity of loans. Yet the climate change disasters and rising rates have put many countries into a highly indebted position. China no longer touts the Belt and Road as a way for developing countries to advance their economies and infrastructure development.

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John Taylor on the dangers of a loose U.S. monetary policy and the effects this had in fueling a housing bubble in Spain, Ireland and other EU countries. Taylor points to the bubble ocurring in emerging market economies from low interest rates. Taylor says the ECB's interest rate moves in 2003-2005 were affected by the Fed's low interest rates. He estimates the ECB set rates about two percentage points too low leading to housing bubbles in EU countries. A similiar process is taking place today with the Fed's near zero interest rate policy. Taylor points to interest rates in a group of 18 emerging market economies- including Brazil, China, India, Mexico and Turkey, which have held interest rates on average about 5 percentage points below widely used benchmarks fueling a doubling of global commodity prices between 2009-2011. The U.S. Fed's policies make it harder for central banks in emerging market economies to take aggresssive action against bubbles developing in these countries. Taylor says his does not mean that the Fed should not pay attention to the U.S. unemployment rate and long term unemployed, but should keep in mind the negative effects of slowing demand in emerging market economies and in the EU as a result of its monetary policy of keeping rates at near zero for long periods of time. This feeds back to the U.S. economy at a critical time....

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The other title of this article in the NYT was "California's fading Political Machines and volatile race for Governor." Gone are the days when Pat Brown was able to put his son Jerry Brown in the race for governor, there are 9 persons running for governor of California in 2026. The current governor Gavin Newsom is said to be promoting his book in Nashville, Tennessee, where many Californians are moving with the inflated cost of housing in the state. Gavin Newsom's grand father gave a $5000 check to Pat Brown in 1943 to run for District Attorney, this report says citing the book. From that time Pat Brown became Attorney General and then governor of California in 1958, defeating Richard Nixon in 1962. In 1962 Pat Brown seemed vulnerable as his signature accomplishment setting up the UC system of college campuses and the water reservoir, tax increases to pay for this, were in their beginning stages and their lasting value not recognized at the time. Nixon from Whittier, California, was a former Vice President and was seen as likely winner. This toughly fought election created the Pat Brown myth and so called machine that helped his son Jerry Brown to two terms as governor 1975 to 1983, and again after serving as Mayor of Oakland and Attorney General to come back to governors race again in 2011 (because term limits came after 2011) and be governor again 2011-2018. Another way of looking at it is that in his last two terms it was also Jerry Brown's careful balancing of the budget and finances of the state, his environmental support, that made him a reliable figure for the public interest not just the political machine backing him.  California to be sure has had popular governors on both sides Reagan won in 1966 as governor of California to succeed Pat Brown. The Kennedys and Pat Brown are matched by the Reagan supporters in the state. In today's situation where China's dominance in industry and manufacturing has affected all parts of deindustrialized America, California is no exception, where much of the middle class has seen their savings eroded, the issues are different and the challenges are different. ...

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Next five year plan for China calls for more concentration on industry, dominance in key sectors identified by China such as rare earths, and more exports- not less in each of these areas. Chinese Communist Party is very conservative and once this has worked for China it is not going to change its reliance on exports even at the risk of leaving goods unsold in China or oversupply. The result is that the US effort to reduce the trade deficit, trying every tool in the book does not work, leading to an effort to resort to tariffs as a last resort to cut the unhealthy and risky $1 trillion trade deficit China has with the world. Has it worked? WSJ and other reports show that large companies are diversifying their supply channels, only smaller companies without the resources are sticking with China dependence for supplies. The tariffs themselves make headlines yet the US has made careful calculations not to upset relationships with key partners Britain, European Union, and Japan, keeping tariffs low at 10% with EU, and 15% with Japan which exports automobiles to the US to recover some of the years US made concessions to Japan. There are also loopholes on certain products where it is in the US interest to do so. As a result the effective tariff is 10-12.5% not 17-20% shown in reports. Of this 10% what is passed on to consumers is small- as in autos 80% of tariffs are not passed on by auto importers such as Toyota and Subaru because of the higher margins postpandemic. In retail only 30% is passed on again because of the post pandemic higher margins. The administration of DJT has also carefully worked with world oil suppliers to keep oil prices low, lower than in 2023-2024. The result is that inflation is at about 3% in September 2025. The idea that a capricious DJT is doing the tariffs is a myth as careful economic planners including Bessent, Jamieson, Lighthizer, and Luttnick, economic advisors in the Republican party, are carefully articulating the policy with room for DJT's political talk and appeal to public sentiment. ...

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The economy slows and China's central banks cuts two interest rates. No major stimulus is planned as in Europe and the US after record debt levels that have accumulated over the last decade of hyper growth. Youth unemployment reaches 19%. The drop in demand for oil from China with the slowdown leads to a drop in the price of oil to about $93 for Brent Crude in August 2022, providing some relief for oil price to the EU and US. China is the largest importer of oil and it takes in 15% of the world's oil supply.

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Xi Jinping's effort to shift the economy of China more towards serving the interests of Chinese who were left behind in the boom years includes a shift away from coal, away from real estate for speculation, and away from reliance on trade with the US and Europe as a driver for growth. This is proving to be difficult as the pandemic has increased demand for Chinese exports making trade a bigger driver for growth than before the pandemic. Introduction of a property tax to cut into real estate speculation has been scaled down to trials in 10 cities.  China did not put stimulus checks in the accounts of its people the way the US did which has led to Chinese domestic consumption not rebounding the way it has done in the US. Figures for consumer spending in China for September show an increase of 4.4% from the year earlier far below the pace of 8% set for 2019. The lack of social security and other safety nets in China makes people to save even more today. Chinese savings rate was 40% in 2019, today it is 45.2% for May 2021, according to one survey. Personal consumption makes up 38% of China's GDP in 2020, it was 39% in 2019. In the US it went up in 2021 June to 69% compared to 67% by the end of 2020. Infrastructure and construction deepened debt problems in China, and expanding exports created trade tensions. Both these problems have deepened with the pandemic. As this report says Chinese exports have gone gangbusters. Problems in production in Vietnam and Malaysia have added to export surge from China. China's trade surplus with the world is now at $535 billion in 2020, and surplus with US increased by 7% to $317 billion in 2020 from 2019.  Chinese government policy is now for "common prosperity" to reduce inequality and spread wealth and income more evenly for all the Chinese people. This is taking time and Chinese government policy is now set for the long run with these short run problems. ...

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Obesity in the US is as high as about 40% in West Virginia, Louisiana, and Oklahoma. It is lowest about 25% in Colorado, Vermont and Hawaii. About 22 states have obesity rate over 35%. Compare this with China which is seeing obesity increase from about 15% in 2023 to 20% in 2034. Real competition between the two countries starts with areas like health care coming out of the pandemic when looking at the true interest of both peoples instead of geopolitics creating a huge distraction from problems of health, climate change and education. Meat intake has tripled in China and a return to more vegetable and fruits and ancient grains is something that is needed badly, also helping tackle climate change. The states in the South and midwestern US have higher rates of obesity followed by northeast and western states. This includes in the South Kentucky, Georgia, Texas, Alabama, Tennessee, South Carolina, Mississippi, Arkansas. In Midwest it includes Ohio, Indiana, Wisconsin, North Dakota, South Dakota, Iowa and Kansas. It is useful to note that this is in Voice of America news which is aimed at an overseas audience and this kind of information is not seen widely in US media. Robust food programs ae needed especially for people living in poverty. Health consciousness needs to be emphasized in all aspects of life and worklife, workspaces, living locations and transportation options all need to be devised around this. Bussel of the Robert Woods Foundation says even ten years back no state had over 35% of the population being obese. Clearly headed in the wrong direction with all the discussion in media run by billionaires on everything but what most affects the quality and ease of living of ordinary people. ...

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The aggressive effort of the US central bank, the Federal Reserve, to increase interest rates to dampen inflation will have an effect on Asian currencies and trade. The Japanese yen lost 14% of its value and the Korean won 8%, Chinese yuan 5% since the beginning of 2022. This is a result of the widening gap between interest rates in the US and Japan where the interest rates have not been increased due to mild inflation.  Asian trade is done in US dollars and exports to the US are invoiced in dollars. Citigroup says about three quarters of trade in Asia-Pacific is invoiced in dollars. Weaker currencies would translate into higher effective prices for imported commodities - energy and food. This pushes up domestic inflation and hurts manufacturing.   Add to this a shift in the US demand from goods into services in 2022 and there is weaker external demand for the economies of Asia. This will exacerbate the slowdown in Asian economies. Many countries such as South Korea and Thailand have increased their external borrowing in dollars. Debt service ratio was 21% in South Korea and 14.5% in Thailand, according to Bank for International Settlements. Years of low rates allowed governments in Asia to borrow more without incurring high interest bills. Now that situation is changing quickly and will result in difficulties for South Korea and Thailand says this report in WSJ. In the last 10 years Asian economies excluding China increased debt to GDP ratios by 15 percentage points, according to Gavekal. The result might not be debt crises as in Sri Lanka but painful slowdowns in economy with combination of loss in external demand from the US and higher inflation, higher interest bills. ...

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The US central bank the Fed's Powell leaves interest rates unchanged July 30, 2025- as he waits to see what happens with inflation following tariffs action by DJT to level playing field with EU, Japan, China. A tariff of 15% is set in US Trade Agreements with Japan, EU and South Korea. Powell says the impact on US consumers will be minimal but not zero, with some effects expected even though EU, Japan and South Korea will not attempt to pass through the tariffs and risk the other benefits of trade access to the US market.

Overall both the European Union and the US have a good economy, with inflation at 2% and the the unemployment situation the best it has been in some decades near 6% in EU and near 4% in the US. 

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The Brazilian economy is growing too fast, and this pace not only won't be sustained, but it has signs of serious trouble ahead. The Brazilian economy grew at an estimated annualized pace of 10% in the last 6 months and generated 962,000 jobs between Jan-April of 2010. Growth in 2010 is expected to be 7%. The jump in growth is partly the result of the stimulus measures of the Lula government. But a consensus of experts is that Brazil still saves too little, has not invested enough in infrastructure,and its economy has the potential of 5% sustainable growth each year. The central bank has increased interest rates - increase of 0.75% in April 2010, and economists in Brazil think the rate will go up to 13% in 2011. About $10 billion in cuts in spending have been announced but they are cuts to an already growing budget approved by Congress, so in reality it will only slow the increase in spending. Public debt is at 42.7% of GDP. Real interest rates have fallen from close to 20% in 2003 to between 5-10%. Costs per unit of labor are increasing at about half the rate of real wages according to a finance official. The National Development Bank or BNDES played a role in helping the economy with subsidized loans when the financial markets ran into trouble. It has expanded lending by 50%, with money from the Treasury of 180 billion reais. Some of the measures of the Lula government has reduced the skewed income distribution Brazil, and in doing so has increased consumer demand. Meeting high consumer demand, and meeting the need for commodities like soyabeans and metals from China, has boosted growth in Brazil to twice the sustainable rate and it is now at a par with China and India. But this places Brazil too dependent on the boom in Chinese demand, especially as the stimulus in China slows and the property bubble threatens China's economy. See links to China. A new President after the upcoming Presidential election will have to tackle the high interest rates in 2011, lower commodity prices, and the need for better infrastructure, and make the adjustment to a sustainable pace of growth....

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Issues of inequality and lack of upward mobility came up in the last presidential election. A Federal Reserve Survey for 2018 shows the financial fragility facing many Americans. One quarter of working individuals say they do not have any retirement savings. About 17% of households say they cannot pay all their monthly bills. About 40% of Americans say they do not have enough cash to cover an unexpected $400 expense, and would have to rely on credit cards balances or loans from family to make the payment. This survey by the Federal Reserve is done each year since 2013, after the financial crisis hit in 2009 it became more important. Still Americans are showing unusual resilience and upbeat spirit. About 75% say they were doing Ok or living comfortably up from 63% in 2013. And two out of three described lovcal economic conditions as "good" or "excellent."  This shows that the financial vulnerability resulting in the loss of jobs in the U.S. both from jobs lost in manufacturing going overseas,  jobs lost through automation or industrial decline in some sectors, and the hit from job loss during the financial crisis and its aftermath years of 2009-2014 is still leaving a lot of families financially vulnerable. Low interest rates and stagnant wages also meant savings growth for ordinary Americans was less than it should be in a healthy economy without booms and busts. This is also the environment in which the U.S. is tackling challenges to its technological leadership in 5G following a decline in sectors such as autos and electronics, with job losses to Japan and South Korea. New trade agreements are focussed on correcting the imbalance, first with Mexico, South Korea, and now with China. Focus is also on fair wages and labour overseas to raise American wages in key sectors. The damage done by a low interest rate to savings of ordinary Americans outside the stock markets is also being seen as a downside in the boom bust cycle, that includes loss of jobs for vulnerable American families. The rise of the tech sectors has diluted the traditional protections of working class Americans with the shifts and realignment of the major parties. ...

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For the first time in three decades US economic growth will be much faster than China's. Second quarter 2021 growth in the US was 12.2% compared to 7.9% in China, and will continue to be much higher for five consecutive quarters. This report in the WSJ says it is the result of the US response to the Covid pandemic. The US vaccination drive, massive fiscal stimulus and near zero interest rates have helped, including the confidence generated by the $1 trillion infrastructure investments planned for this decade. Over the longer term Capital Economic estimates China's GDP around 2030 will drop to 2% growth with demographic decline, just as the demographic factors favor Indian growth to levels that China has seen in the last two decades. This was the plan and vision set out by the Indian prime minister for 2047, on the 100th anniversary of independence. For the future government help has helped US households accumulate $2.6 trillion in excess household savings, which Moody's estimates is 7 times that in China.  In the longer term gaps will have narrowed between Asia and Europe, the US, which is a good thing. More will need to be done in Africa and Latin America. Much of the talk about who leads ignores the local needs in cities and towns across all parts of the world for a better quality of life, better education, better nutrition, better healthcare, meeting aspirations of young people, and supporting hope for a better future. ...

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With the change in U.S. position on climate change, carbon emissions, and the move to raise tariffs on China's exports to the U.S. China faces a new dimension in its global relationships. Against this background China is shifting to a long term view of its relationship with India. China's new foreign policy leaders after the recent party Congress, vice president Wang Qishan and Foreign Minister Wang Yi, now see the need for new partners in a multipolar global world for the long term as China and India countries with large populations and a need for stable world trade share common interests. Wang steers the Central Foreign Affairs Commission with Yang Jiechi as director. China now sees " a lot of shared interests, concerns and positions," in the words of China's Representative Lu, in the long term issues of globalisation, urbanization, pollution, and concern for achieving stable development with high growth rates.  China now takes the long view looking back at the unprecedented change of the last 100 years, as it maps out its plans for the future. The U.S. has challenged the ideas in the blueprint for development of "Made in China 2025," particularly as it relates to western transfer of technology to China. This has created a new situation for which China is still looking for answers, and ways to come up with new strategies for development without the nearly unrestricted access to western technology of the last 2 decades.  Shared positions on world trade with India and India's close relations with the U.S. add credibility in China's  negotiating positions with the U.S.                  ...

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After decades of neglect by different administrations and apathy at US semiconductor companies, semiconductor production investment in the US is beginning to take place. But the US Chamber of Commerce warns this is only a small trickle compared to investment in Asia. In a report on Nov. 22, 2021, the US Chamber of Commerce warns that only 6% of new semiconductor global capacity added over the next 10 years is expected to be located in the US, and urging that $52 billion in direct subsidies in the US for new chip factories be approved quickly by the US Congress. That the cost of owning a new chip factory in the US compared to South Korea, Taiwan and Singapore is higher by 30%, and in China by 50% is largely attributable to  the availability of subsidies in these countries from the government, and the absence of these incentives and subsidies in the US, according to the Semiconductor Industry Association report published last year. South Korea, China and Japan are now accelerating the pace of these subsidies and incentives. So that the US has a lot to do to make up for the years of neglect of its technology and competitive leadership. This WSJ Investigation report says South Korea aims to double its annual chip exports from today to $200 billion by 2030, and is offering billions of dollars in tax breaks, lower interest rates, other investments, including asking local governments to ensure adequate water supply for chip making. To keep up the US needs to change its entire approach to investments in critical industries from the approach and lethargy of the previous administrations since the 1980's.  US semiconductor companies, the Semiconductor Industry Association and the Biden Administration need to put together a concerted effort for US chip leadership beyond the slight increase from 16% to 24% the US hopes to gain in production of advanced chips by 2027 under the present plans cited in the WSJ. The Biden Administration issued a joint statement Nov. 23 that it is working around the clock with the US Congress, and more work remains to be done to "ensure that America remains the most innovative and productive nation on Earth." ...