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C-SPAN video on authors Morone and Blumenthal interviewed for book on healthcare "Whiplash," about failure of Obama Affordable Care Act.

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David Autor at MIT authored some of the first detailed studies about the severe disruption in U.S. communities from the trade with China following China's entry into the World Trade Organization in 2001. The sheer size of the impact now appears to have been underestimated by economists and other experts. It was believed says Hilsenrath and Davis, that the U.S. having absorbed the impact of trade with Japan in the seventies and eighties, and with Mexico following NAFTA, could do the same with China. That turns out to be false. Much of 2016 election season has been spent seeing the rise of anti-trade movements led by Trump and Sanders, and reveals a deep discontent with job shifting overseas, and disruption of communities across America by trade patterns. What happened? In 2015 China's exports to the U.S. reached 2.7% of U.S. GDP. Hilsenrath and Davis say it was about 1% less with Japan and Mexico when their exports surged. The rapidity of the impact is another problem. It took 12 years following Japan's emergence as a major supplier, to reach the same level of impact that China had only 4 years after China's entry into the WTO in 2001. A similiar situation of 12 years happened with Mexico after NAFTA. Another problem is that Japan's exports impacted mostly steel and autos, China's exports impacted a whole range of industries. The speed with which China's planners sought to change and modernize their manufacturing  base is unprecedented in history, and has an impact not only on the U.S. as a recipient of low cost exports, but also on China as it struggles with bad debts and job losses today, that are a legacy of that too rapid move. This was part of the drive to urbanize China rapidly by shifting agricultural workers to factories in the cities, at a pace unprecedented in history. Another factor not mentioned is the global financial crisis of 2008-2009 that hurt U.S. manufacturing in the auto and other industries, and the wide impact this had in loss of jobs and decline in wages. By 2010 the tide of public opinion had shifted. The WSJ/NBC poll of September 2010, cited in detail in WSJ 10/2/2010 under "Americans Sour on Foreign Trade" shows over 80% consistently for all levels of income, over $75,000 and under $75,000, Republicans and Democrats, working class Americans or well educated Americans, saying that Americans were struggling and there was less hiring, because of how trade had impacted their communities. Lyrarc covered this in considerable detail since 2006. All political parties, business leaders, ignored the implications of this huge change, the media covered it but assumed it would take care of itself as trade with Japan had done previously, and it was left to Trump and Sanders as outsiders to call it like they saw it 5 years later.  Economic inequality has widened in China to the point of it becoming unrecognizable as a former socialist economy. Now both countries are faced with the job of picking up, chastened by the experience, and hoping to limit the political fallout to achieve economic recovery. The very open trading system that had generated prosperity since World War II was being put at risk by a lack of awareness that trade brings with it changes, winners and losers, and manufacturing jobs moving overseas on a scale and speed unprecedented in history, was something that no one could cope with. ...

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VW's Dieselgate settlement required it to spend $2 billion on electric charging stations in the US to compensate society for air pollution caused by its faulty diesel engines. The Washington Post looks at these EV charging stations and finds many of these do not work. An author of a reliability study on charging stations Prof. David Rempel of UC Berkeley says there should have been more oversight as he considers it to be public money. About 80% of these charging attempts are successful at 4000 fast chargers run by Electrify America according to JD Power, and customer satisfaction is low.

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David McCoullough, dies at 89 years. He is the author of two best selling biographies of American presidents at crucial points in the American experiment on Harry Truman (1992) and John Adams (2001), for which he won 2 Pulitzer Prizes. He also won the National Book Award for- Path Between the Seas- the Making of the Panama Canal. He saw writing as painting in words, and writing as an art form, did extensive research so that his Truman book took 10 years, the Adams book 7 years. 

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David Enrich of the NYT looks at the collapse of Signature bank and SVB Bank and the role of lobbying that led to president Trump setting up new legislation raising size of banks facing Fed regulatory scrutiny from $50 billion to $250 billion. Signature Bank and the author of the regulatory law after the financial crisis of 2008 caused by faulty bank practices -who in one of the anomalies of Congress joined the bank's board for 7 years and resigned this week-  lobbied with SVB bank for less regulation and government oversight. President Biden has learned from the mistakes of this Obama period, as shown by Jim Tankersley in his reporting in the NYT. this week. And made clear from Biden's State of the Union address in 2023, his effort to focus on cutting the deficit by $3 trillion over 10 years by getting everyone to pay their fair share of taxes.

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David Autor, an economist at the Massachusetts Institute of Technology, says he is quite worried about the steadily declining participation of men 16-64 in the labor force from 85% in the decade after World War II to less than 65% today. This is a blow to the men, their families , government revenues and the economy.

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In this thoughtful essay Bob Davis of the WSJ asks whether the decision of the Clinton administration to admit China into the World Trade Organization was a bad one for the U.S.  Mr. Clinton in 2000 tried to persuade Congress citing words of president Woodrow Wilson that of a dream "of a world full of free markets, free elections, and free peoples working together."  Every year China would have its most favored nation status renewed with help from supporters in Congress. After WTO entry this was not necessary. Chinese leaders saw the entry into WTO as a way to knock down trade barriers, to act a wrecking ball for the planned economy, to give the economy a big boost.  In 1994 China was a relatively backward economy with 60% of the population living on less than $1.90 a day. Hard to imagine today.  Not everyone was convinced that it was good for the U.S. This included a trade attorney who had tackled a huge trade deficit with Japan in the Reagan period- Robert Lighthizer. Lighthizer was Deputy Trade Representative negotiating with the Japanese. His prediction was that no job in America would be safe once China entered the WTO, that China would become a dominant trading nation.  Robert Cassidy, 73, trade negotiator for president Clinton looks back on that time and says that he regrets what has happened, that all his work night and a day only benefited business and hurt workers. David Autor, MIT economist and his colleagues,  in a later study documented loss of 2.4 million jobs to Chinese competition between 1999 and 2011, in many manufacturing towns dotting the landscape of America, particularly in the midwestern states. And the expectation that the higher economic growth would lead to less political control did not turn out to be true.  In the process multinationals rushed to China after WTO entry and China became the world's manufacturing floor. By 2013 China's per capita income reached $7000, after years of fast GDP growth approaching 10% a year.  About 400 million Chinese were lifted out of poverty from living on less than $1.90 per day from 1999 to 2011, according to the World Bank. A big problem was that the U.S. did not plan for the change from WTO entry. No resources were allocated for the plan to let American workers adjust through worker retraining and special trade handicapped income support, to allow for a slow planned shift. Instead the pace of growth was faster than that which the U.S. faced with the Japanese export offensive in the eighties. China experienced double digit growth after 2000. The irony is that the Republican administrations that followed Clinton followed a policy of free trade to the advantage of China's state run economy when working class Americans voted mostly for the Democratic Party. Little was done and little said in the media from Democrats and Republicans in Congress and the establishment during this time even after Mr. David Autor documented the effects of trade in the U.S.  Till Mr. Trump recognizing the alienation in communities hit by job losses from trade upended American politics, shifted this part of the electorate to the Republican base. Mr. Lighthizer's view is that complaints about China should be left out of WTO because it is naive to tackle it that way. With a $375 billion China trade deficit for 2017 the challenge has to be met in a different way, and the U.S. has to rely on regaining its economic strength within a fair trading framework. Having negotiated with the Japanese Mr. Lighthizer sees the approach adopted then as the one right for today. During the long negotiations Lighthizer is said to have received many negotiating positions of the Japanese signifying no change in long sessions. He once simply made a paper plane and sent it right back, in one of these sessions. He meant that the U.S. was serious about reversing the imbalance in trade. ...

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A 2024 US International Trade Commission report by David Riker of the effects on imports of 25% US tariff shows a 75% reduction in imports and a 5% increase in US prices.  It would lead to large new investments in the US auto industry in different states. Hyundai recently announced a $21 billion investment plan in the US and building of a steel plant in Louisiana. General Motors will increase investments in the US and expand production. Other Japanese companies will make large investments for a presence in the US market.

"A new 25% tariff on U.S. imports from outside of North America would reduce vehicle imports by 73.9%, increase average prices of vehicles in the United States by 5.0%, and increase variable profits from domestic production by 5.2%." David Riker, USITC

 

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Experts in Germany and the U.S. look at areas adversely affected by free trade and globalization and the increasing support for right wing parties in these areas. David Autor is a labor economist in the U.S. at MIT who has studied these trends. He says trends in free trade have hurt low wage workers. In 2014 he and David Dorn, Gordon Hansen, Jae Song, published a paper showing how trade with China was affecting different parts of the U.S. Lower wage workers, most of them with less education and skills were prone to be unemployed or face lower earnings in areas where cheap imports from China were replacing domestic production. Donald Trump has strong support with the white working class and less educated workers who form this group. He has accused China of "currency manipulation" and proposed a 25% tax on Chinese imports. Experts say there is no strong evidence that immigrants are causing this type of dislocation in the U.S. Yet immigrant bashing is used by Trump and other right wing politicians which is attributed to it being an easy tactic for politicians to appeal to the anxieties of working class voters....

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David Gelles interviews heads of companies in his column for the New York Times called Corner Office. Here he talks about CEO's frquently bringing up the topic of meditation in his interviews. Gelles practices meditation and mindfulness since his college years when he spent junior year in India at Buddhist monasteries and retreats as part of the Antioch Buddhist Studies Program. He is also the author of columns in the NYT on meditation and mindfulness.  The head of Salesforce, Marc Benioff, tells Gelles that meditation practice helps him step back and listen deeply with a beginners mind aware of the present moment. Benioff has set up meditation rooms in Salesforce Tower in San Francisco, and invites Buddhist monks to his house.  After a skiing accident in 2004 Marc Bertolini, head of insurance company Aetna recovered using meditation practice. He setup mindfulness classes at Aetna and says this has changed the corporate culture for the better with efforts for improvement and people coming up to him with new ideas.  Designer Eileen Fisher practices meditation and this has helped her in business as she set goals to improve factory conditions for clothing workers in China. The head of Hyatt Hotels says mindfulness is helpful in bringing empathy in relations through the practice of being in the present. He made mindfulness the key part of the company's Wellness programs. Google, Ford and McKinsey now offer meditation programs in the office. Similar trends are taking place in Europe. When asked about a company's responsibility to society, Benioff of Salesforce says his company is part of the whole that includes society, that we are all connected and part of the one.     ...

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China sees a principal peacemaker role for Ukraine peace settlement with its economic benefits in US/EU trade as foreign policy. NYT's David Sanger reports from the G-7 meetings in Italy in June 2024. He says the G7 sentiment is changing about China in the last few months of 2024 compared to 2023. In 2023 China was seen as a nation that had more in common with the US than Russia considering historical differences between the two nations. As the US veered round to the view China's indirect economic support and its technology was helping Russia in escalating attacks on Kharkiv and the border regions of Ukraine, Europeans were skeptical. No longer, the Europeans now see China's relationship with Russia in the same way. Another change observed is that China is not pursuing a peace settlement participation to end the war by not joining a Swiss effort. Instead says Sanger China is seen as wanting to wait so that at some future date it would be the principal actor in bringing all parties to a peace settlement for Ukraine. With Ukraine facing escalating attacks in the Kharkiv region the mood has changed and China is now seen differently from just a year back. This as shown in the adjoining article in NYT on student exchange for US and China and China's view that racism exists towards Chinese students in the US is affecting the effort for closer understanding between the people's of the two nations sought by the two nations since 1972, and in the interwar period with Gen. Joe Stilwell fighting the Imperial Japanese Army alongside the Chinese people. ...

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Researchers David Autor of the Massachusetts Institute of Technology, Gordon Hanson of the University of California, San Diego, and David Dorn of the Center for Monetary and Fiscal Studies in Madrid, in independent research, studied the impact of trade on 722 clusters of interrelated counties in the U.S. They focussed on the surge in Chinese imports and found a pattern. Counties with higher exposure to Chinese import growth showed higher unemployment and higher expenditures by the government for unemployment benefits, food stamps and disability benefits. Their calculations show the increased government payments amount to one to two thirds of the gains from trade with China. This does not include the losses suffered by people losing jobs who deplete savings as they look for new jobs. Hanson studied the effects of trade and Chinese imports in the 1990's and found the effects were relatively small. This time the effects are large and show counties that lacked local investments in industrial machinery and technologies in which China was still playing catchup such as Caterpillar in Peoria, Illinois, and Boeing in Everett, Washington, were most susceptible to higher jobless rates and in need of government support payments. Autor and Hanson found that from 2000-2007, communities in the 75th percentile- ones with greater exposure to Chinese import growth than 75% of all communities- saw a manufacturing jobless rate of about one-third more than communities in the 25th percentile. The government payments mean higher taxes or larger deficits are needed to support these communities, and long periods of unemployment reduce the incentive to work. Michael Spence, a Nobel prize winning economist from New York University, says the world has never seen such a rapid pace of growth as China experienced between 2000-2011, with rates approaching 12% in some years, making past experience and prevailing theories on trade an insufficient guide to what is happening....

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Stephen Miller, as both intellectual and organizer, is shaping policy on immigration at the White House as adviser to Kristi Noem, head of Homeland Security. He is a dedicated follower of DJT and White House deputy chief of staff. He also brought Prof. Navarro to the attention of DJT on trade policies.  He was a key figure in the first DJT administration at the age of 31 having served as communications secretary for Senator Jeff Sessions and developed his ideas during the period with Sessions. As director of speech writing and senior adviser to DJT,  he wrote some of president DJT's policy speeches in the first term, the speech to the Republican National Convention 2016 , and the Inaugural Address of 2017,  including the speech on Jan. 6th 2020 following the storming of the Capitol building.  Who is Stephen Miller? He comes from a Jewish family that immigrated in his grandfather's generation in 1903 to Ellis Island from Belarus, during a period of discrimination in Russian regions. During the period on campus at Duke University where he graduated in Political Science, Miller was a follower of a prolific author, David Horowitz. Horowitz was part of the Jewish leftist intellectual movement in New York in the post war period, but after the 1980's joined the Reagan movement and questioned the ideas he had believed in, questioned what he saw as the antisemitism on US campuses. At Santa Monica public school in California in 2000-2003 Stephen Miller questioned the multiculturalism that replaced the America of the founding fathers, that he saw at the school. It is this perspective that also underlies Stephen Miller's ideas about universities, about immigration, about the economy and China under Bush, Obama and Biden. Miller is also an organizer as he set up the America First Legal in 2020 with funding from donors on the right which has filed many lawsuits during Biden's term in office.  ...

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In this essay in Der Spiegel, Charles Hawley says that the Trump movement has become a movement of patriotic downtrodden whites, with a whole range of interests-of extreme right talk show hosts, Tea Party politicians, white power supremacists, those left out by globalization in the working class especially in the midwestern states. The danger he says is that this movement of which Trump has become a part, rejects the narrative on which America is based of the Constitution and the Founding Fathers establishing a country based on principles of "the inalienable rights of man," that have evolved through the years to include black people, women, and minorities.  To put this in perspective, president Obama writing for The Economist magazine in October 2016, puts this movement in a different context- that of the Alien and Sedition Acts of 1798, Know Nothing Movement of the 1800's, the anti-Asian sentiment in the late nineteenth and early twentieth century, periods when anti-immigrant or anti-foreign sentiment gained prominence. Obama's view is that it is not fundamentally economic. In this he is right in that some of the forces on the far right do not stem from globalization. Yet he would be missing a great deal if he did not address the economic problems for the middle and working class that have given such views the support of a broad segment of the population, especially in some midwestern and older industrial states compared to say the economy of California or New York. Obama is aware of the problems in his essay as he points to the problems of workers trying to get a decent wage, of job losses through globalization, and the aggravation of these problems by the financial crisis of 2008 when some of the potential physicists and engineers as he calls them went into the financial sector to create faulty mortgages. Yet he goes back to the free trade and global networks of supply chains as having reduced global poverty, without showing a keen awareness of how it has through a combination of events and decades of policy indifference to manufacturing communities in the U.S.- as documented by experts and shown in Lyrarc, with David Autor and Gordon Hansen in the WSJ, 2016- 08-16. A Gallup Study, WSJ, 2016-05-16, supports Obama's assertion by showing that many of Trump supporters are actually self-employed and not in economic distress. Yet the movement would not have taken its proportions without the merging of different groups particularly largely disadvantaged working class voters, and fortunately Hillary Clinton, Bernie Sanders, have a better sense of this than the president. It is by their efforts that income and wealth disparities can be tackled in a way that restores the social fusion of all parts of society- in Hillary Clinton's emphatic words in the final debate by "growing the middle," growing the middle class. This is the task of the next decade, or possibly two decades. (For Gallup study see WSJ, How Economic Anxieties Explain Trump's Appeal- And Where They Fall Short, Nick Timiraos, 08-16-2016. And for Autor, Hanson, see Tallying the Toll of U.S.-China Trade, Justin Lahart, 08-27-2011)   ...

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David Leonhardt on the policy errors of the Obama administration in managing the economy. Why he asks did the Obama administration not take the risks it took for "undeserving" recipients in the auto industry to provide significant help to GM and Chrysler and at the same not provide large scale and situation changing help to millions of mortgage holders who were under water? The housing crisis with millons of foreclosures depressing home prices has played a significant part in the lagging economic recovery. He points out that Obama economic advisors had read Rogoff and Reinhart's book "This Time Its Different," about the longer times it takes for a economic recovery after a housing bubble, and still made the mistake of believing economists who suggested that the stimulus by itself would be sufficient and that recovery was underway in 2010. Others in the Democratic party had pointed to the lack of focus on unemployment by the Obama administration. Why were such voices not heard?

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The school as an extension of the caring nurturing family, starts with the good motivated teacher, one student at a time. The example of teachers at a Union city public school in New Jersey. At one time a failing school it is now an example of what can be done with good motivated teachers. David Kirp, professor of public policy at the University of California, Berkeley, is the author of the book: "Improbable Scholars: The Rebirth of the Great American School System and a Strategy for America's Schools." Kirp reminds us that the answers are closer to us than we think, the nurturing influence of the schools extends the work of the family, more intuitive, and resembling more of the ways we think and feel children respond to good teachers.

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Vauban is a "car- free" upscale communitynear Freiburg, Germany, close to the German-Swiss border. Except for the main street where atram to Freiburg runs, and two parking lots outside the community, there is no place to park cars. About 70% of the people there do not have cars and 57% sold their cars to come here. There are no car garages or parking places with each home. Bicycles are hte main means of transport. Vauban hasd 5500 residents in one square mile. The basic concept of having stores placed only awalk away is being followed more and more as America and Europe shifts away from intensive auto based use of space for living. The whole post war location of housing and stores and community activities was based on large use of the automobile. This is now going through big changes. David Goldberg, of Transportation of America says " how much you drive is as important as whether you have ahybrid." A fast growing coalition of hundreds of groups is advancing the cause of building communities with stores only a walk away and less need for the automobile to get around. Outside Hayward, California, Quarry Village is anew development that is trying to reduce autos to one per home. So car based is American culture that most zoning laws require 2 parking spaces per residential unit, and in the federal transportation bill 80% of appropriations in prior years used to go by law to highways and only 20% to other transport. This even though passenger cars are responsible for 12 percent of greenhouse emissions in Europe , and upto 50% in some car-intensive areas of the USA. One solution to the problem is to use smart planning to avoid the suburban sprawl, and shift to smaller more fuel efficient automobiles, and build better mass transit and rapid transit and fast rail linking most towns and cities, that will moderate all the excess that took place after the war. This may be the direction smart planning is taking us, and places like Vauban remaining niche communities for green advocates and a sort of reminder that its possible to go in this direction....

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The Obama administration's foreclosure prevention programs were designed for subprime lending situations. They were not designed for the high unemployment experienced in the U.S. A Treasury Department effort allows jobless people to postpone mortgage payments for 3 months, the average length of unemployment however is 9 months. Only 7,397 participants are in this program. As part of the bailouts Treasury had $46 billion to spend to prevent foreclosures, as of May 2011 Treasury has spent only $1.85 billion. Because housing provide so much of the underpinnings for the U.S. economy, it is essential to put housing back on a stable footing for an economic recovery. The lack of a sensible plan in this area is simply incomprehensible. Morris Davis, a former Federal Economist, has estimated that a million more homeowners went into foreclosure because of a lack of help for the unemployed. Davis is an associate real estate professor at the University of Wisconsin. He says its simply outrageous that the Obama administration has done so little. President Obama recently took credit for a recovery and jobs saved in the auto industry in Detroit. The failure to come up with a workable plan and to do so little in the larger area of housing and unemployment, is likely to overshadow everything else. This is especially so with the Fed approaching its limits after QE II, and with the administration and the Congress in a stalemate over further stimulus and the deficit....

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In his second part of the series on Capitalism and Globalization Schieritz says Trump's arguments have backing, and goes back to the studies done by David Autor of MIT on the adverse impact of free trade on communities across the U.S.. Lyrarc has covered this issue since 2006, and the reality is that this issue was brought up long before the Autor study gained prominence. On Nov. 12, 2010 Robert Lighthizer, Deputy Trade Representative under U.S. president Reagan wrote an op-ed in the NYT titled "Throwing Free Trade Overboard," that made a strident and strong case for what Trump says 5 years later, and from no less than a top trade official under Repubican Reagan.Trump comes late to this in 2015 when it was already amply clear what was happening. It is not so much Trump having discerned this, than others who should have paid attention, including Lew and leaders in both parties, and the business community,  who for too long ignored it. Or as Hilsenrath in a recent WSJ report says, simply said we have seen this before with Japan's entry into the American market, not realizing the speed and widespread impact of the changes in trade with China, that are unprecedented in history- evident just from the great speed of urbanization and manufacturing work force growth in China, policy rapidly impacting vulnerable communities across the U.S. The corrective course has to be credible which is why it has to come from a a reawakening among leaders such as May, Merkel and Clinton, who are keen students of change, and capable of designing and executing a corrective course of action, and winning the popular support and patience needed to stay the course which could run for most of the next decade. It would also provide leadership and show the way for societies in Brazil, China, India and other countries facing similar problems.     ...

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People with doubts about Obama and McCain being agents of change or just bearers of the latest popular slogan for electioneering, would benefit from looking at the details gathered by the New York Times about the two candidates ties to lobbyists. Obama is second only to Senator Dodd in the amount of donations received from employees and PAC's of the 2 companies Fannie and Freddie. Mr McCain's campaign manager, Rick Davis, is a longtme lobbyist, and previously was head of Homeownership Alliance. Homeownership Alliance is a coalition of banks and housing industry interests led by Fannie and Freddie to counter another organization FM Watch, which was an alliance of financial institutions and lobbying associations that wanted to even the playing field against Freddie and Fannie by challenging the implicit government guarantee that allowed them to borrow funds at lower rates. And both candidate's vetters for vice Presidential picks have links to Fannie. Its former chairman, James Johnson, initially led Obama's search committee and Arthur B. Culvahouse Jr., McCain's vetter was a Fannie Mae lobbyist. For McCain, confidant and adviser, Charlie Black, and deputy Finance Chairman, Wayne L. Berman, lobbied for the 2 companies. For Obama, Robert Tsien, Freddie Mac VP, and directors. William Lewis , Brenda Gaines, a Chicago businesswoman, come up as names of contributors. There are so many such names right at the top of these two candidates advisors, that it makes one wonder seriously who are these people fooling when they make statements about Fannie and Freddie- like the one made recently by McCain about Fannie and Freddie enriching their executives by millions of dollars while things were going downhill, and the picturesque phrase "going to hell in a handbasket". And did he talk to Rick Davis about this. And Obama did he talk to James Johnson about this, and Brenda Gaines? One, McCain is a maverick yes, meaning he is independent, and the other can talk intellectually and excite young people about the future, but its a thin veneer, when all is said and done both promote their careers above anything else, and the difference is in degrees with one perhaps more than the other. And people have short memories. The Times reminds us that McCain was one of the "Keating Five" senators investigated by the Senate, accused of interceding with federal regulators for the operator of a failing thrift and received a rebuke. This is what Paul Gigot, who as editorial page editor of the Wall Street Journal has directed the investigative reporting on Fannie and Freddie for years, says in his recent column about all the dishonesty and failure and efforts to corrupt the whole political system across the political spectrum with lobbying and donations and tactics. In a note of pessimism he says "not that either presidential candidate is interested." Quite a comment on the political system. Which is also why Vincent Reinhart, who headed the Monetary affairs section at the Federal Reserve, when asked about the bailouts of Bear Stearns and of Fannie and Freddie, and the help Detroit auto companies are seeking, on Bloomberg News on September 8, 2008, said that "free markets is a thin veneer" when things really get rough. ...

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Not only have directors at companies like Washington Mutual, Countrywide Financial and Fannie Mae not taken responsibility for the crisis. They have simply moved on to other boardrooms says Gretchen Morgenson of the NYT. These direcotrs did little when these companies were leveraged and made dubious loans or risky investments. Says Paul Hodgson of the Corporate Library, "these directors have avoided the corporate limelight as far as blame is concerned." Companies like Sunoco, the oil company, Paccar, a truck manufacturer, and Tetra Tech each have directors from these failed companies. Thomas Gerrity, a professor of managemet at Wharton is one of the outside directors at Fannie Mae who is now at Sunoco. Robert Parry, a former president of the Federal reserve bank of San Francisco, was adirector at Countrywide from 2004 to 2008. Parry is on the board at Paccar. Says Frederick Rowe, president of Invesotrs for Director Accountability, a nonprofit shareholder advocacy group, the board member gets $475,000 a year, he plays golf with the CEO, he is apersonal friend, goes to nice places for board meetings, and he is just not going to one word that would jeopardize his position on the board. In the case of GM the board held together in one voice right up to the bankruptcy with a director who was a former CEO of Eastman Kodak and the lead person on the board, insisting that management had done everything right, all the way up to the end. These directors had to be fired once the government took an ownership interest in GM, and before this they survived just about everything, including tens of thousands of jobs lost in Michigan, and the devastation of communities and people around the state. Gretchen points out that the director dysfunction is because its almost impossible to have adirector fired for sleepwalking through the job or simply rubberstamping the maagement's decisions. Shareholders have to launch an expensive proxy fight to oust a director. Currently proposed changes by the SEC to allow those who have at least a stake of 1% in a big company to put up their own nomiees are not effective steps say shareholder advocates. John Gillespie, co-author of "Money for Nothing," a forthcoming book on board failures with David Zweig, says the problem lies in the culture of the boards which determines how directors behave. Solutions he suggests are instituting term limits for directors and separating the positions of board chairman and chief executive....

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One big concern says Nancy Keates of the WSJ about the National Association of Realtors, is that the organization collects and puts out objective data about home sales, and at the same time provides a commentary on the statistics. It also has a mission to advance the interests of its members. There are 2.6 million licensed real estate agents, and NAR represents about 1.3 million of these real estate agents. Would the real estate agents and the NAR tolerate an economist who raised concerns about the boom in lending? David Lereah, is former chief economist for the NAR ,and worked there from 2000 to April 2007. He remained upbeat throughout these years, even when the market was headed downwards. And the way he sees it he was doing for 7 years everything the NAR wanted him to do, and he was pressured to issue these upbeat reports. Critics called him "Baghdad Dave", after a Iraqi information minister for his false upbeat reports even when the war on the Iraqi side was lost. And a Credit Suisse analyst called him Liar-eah for some of these upbeat assesments, when things were clearly going wrong. The way Nancy Keates sees it this economist was eager to profit himself in the boom years. He was an economics Professor at Rutgers, at the University of Virginia, and later an economist and regulator at the Federal Deposit and Insurance Corporation. He himself bought condos 2 in Washington in 2003 and 2004, and one each in Tampa, Richmond, Va. and Alexandria, Va. and Naples, Florida. Owning by 2006 six condos worth between $150,000 and $400,000 a condo. He had an expensive lifestyle says his wife, with a big house worth $780,000, a country club, sports fishing boat. So in some ways suggests this reporter, he was caught up in the boom himself with his investments and the demands of a expensive lifestyle, with little room left for independent opinion and analysis. This is a striking example of things gone wrong, with all the meticulousness and comprehensiveness with which data is collected having its value destroyed by the lack of strict objectivity in the analysis. And the intrusion of strong personal interest bias in one direction making the destruction of objectivity complete. Looking at the economists at companies and associations, there is a subtle bias in operation that needs to be discounted by CEO's and association heads, a bias for giving the CEO's better and optimistic assessments on a consistent basis. An example is the way a large number of economists see the recovery taking place in 2009. Another related example is the sales forecasts for the Detroit auto companies that continued to assume sales in the 16-17 million a year rate into the latter half of 2008, even after the Bear Stearns collapse in March and the increasing foreclosures suggested something was amiss. All with horrendous consequences for the companies or industries involved, and the US and global economies....

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A poll by Reuters and the University of Michigan in mid 2012 shows U.S. voters by a large margin of about 10% feel they are worse off in 2012 than they were in 2008. The situation in working class towns such as Allentown, Pennsylvania, is likely to be critical for the outcome of the U.S. presidential election of 2012.

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Friedman calls for the President to make the tough decisions whether it is the nationalizing of banks or enlarging the stimulus. He calls for the President not to be afraid of risking his Presidency and his credibility on some tough issues, as this is what may be required by the tough issues of the banks, the toxic assets, decisions on nationalization or the stimulus expansion, and also by the task of winniing the trust of ordinary people suffering from this crisis. Even if this means howls of protest from some quarters as long as the people are basically behind the actions and the strategy.

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The unemployment rate in the U.S. state of Ohio drops to 7.2% in June 2012 from 10.6% in the second half of 2009. But polls show two thirds of the respondents see the economy as being worse or the same as in 2011. Because of lower wages in some industries such as auto manufacturing which are reviving there appears to be a lowering of incomes and expectations.