Chinese President Hu Jintao, who travels to Washington this week for a state visit after a year marked by disputes and tension with the United States, said the two countries could mutually benefit by finding “common ground” on issues from fighting terrorism and nuclear proliferation to cooperating on clean energy and infrastructure development.

“There is no denying that there are some differences and sensitive issues between us,” Hu said in written answers to questions from The Washington Post and The Wall Street Journal. He said “We both stand to gain from a sound China-U.S. relationship, and lose from confrontation.”

To enhance what he called “practical cooperation” on a wide range of issues, Hu urged an increase in dialogues and exchanges and more “mutual trust.” He said, “We should abandon the zero-sum Cold War mentality” and, in what seemed like an implicit rejection of U.S. criticisms of China’s internal affairs, said the two should “respect each other’s choice of development path.”

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Aided by at least $43 million in assistance from the government of Massachusetts and an innovative solar energy technology, Evergreen Solar emerged in the last three years as the third-largest maker of solar panels in the United States.

But now the company is closing its main American factory, laying off the 800 workers by the end of March and shifting production to a joint venture with a Chinese company in central China. Evergreen cited the much higher government support available in China.

The factory closing in Devens, Mass., which Evergreen announced earlier this week, has set off political recriminations and finger-pointing in Massachusetts. And it comes just as President Hu Jintao of China is scheduled for a state visit next week to Washington, where the agenda is likely to include tensions between the United States and China over trade and energy policy.

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As our economic conditions continue to deteriorate, mentally disturbed people like Jared Loughner are the first to breakdown and lose it, but there will inevitably be many to follow. This tragedy is not an isolated incident. In just the past few days there have been two more incidents. A lobbyist, who was the wife of a White House adviser, was found dead in a burning car. A man upset over his Social Security benefits threatened to set fire to Senator Michael Bennet’s office and shoot his staff. There have been dozens of similar incidents over the past two years. From John Bedell, the man who opened fire on the Pentagon, to Joe Stack, the man who had a tax dispute and flew his plan into the Austin, Texas IRS building, an increasing number of Americans are beginning to resort to violence as a last desperate act of vengeance.

We can dismiss and write off all of this as just crazy people doing crazy things and go back to living with our heads in the sand, business as usual, or we can begin the urgent task of fixing a society that is severely out of balance.

The choice is ours.

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I will take comments on this submitted by email only to at KSHarmon[at]mindspring[dot]com.

Two leading credit rating agencies on Thursday cautioned the U.S. on its credit rating, expressing concern over a deteriorating fiscal situation that they say needs correction.

Moody’s Investors Service said in a report Thursday that the U.S. will need to reverse an upward trajectory in the debt ratios to support its triple-A rating.

“We have become increasingly clear about the fact that if there are not offsetting measures to reverse the deterioration in negative fundamentals in the U.S., the likelihood of a negative outlook over the next two years will increase,” said Sarah Carlson, senior analyst at Moody’s.

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“Industrial relations” are back at the heart of politics””not as an old-fashioned clash between capital and labour, fought out so brutally in the Thatcherite 1980s, but as one between taxpayers and what William Cobbett, one of the great British liberals, used to refer to as “tax eaters”. People in the private sector are only just beginning to understand how much of a banquet public-sector unions have been having at everybody else’s expense…. In many rich countries wages are on average higher in the state sector, pensions hugely better and jobs far more secure. Even if many individual state workers do magnificent jobs, their unions have blocked reform at every turn. In both America and Europe it is almost as hard to reward an outstanding teacher as it is to sack a useless one.

While union membership has collapsed in the private sector over the past 30 years (from 44% of the workforce to 15% in Britain and from 33% to 15% in America), it has remained buoyant in the public sector. In Britain over half the workers are unionised. In America the figure is now 36% (compared with just 11% in 1960). In much of continental Europe most civil servants belong to unions, albeit ones that straddle the private sector as well. And in public services union power is magnified not just by strikers’ ability to shut down monopolies that everyone needs without seeing their employer go bust, but also by their political clout over those employers.

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Left unsaid [by the President], however, was the fact that job growth was not enough to absorb people entering the work force in the United States, much less to shrink the unemployment rolls.

R. Glenn Hubbard, dean of Columbia University’s business school and former chairman of the council of economic advisers for President Bush, remains a guarded optimist. He sees signs of the economy gaining speed.

“We could run as high as 200,000 per month this year, but keep in mind that might only bring the unemployment rate down to 9 percent,” Mr. Hubbard said. “That does very little for the person who is long-term unemployed.”

The so-called real unemployment rate, which includes those workers who are discouraged or have given up looking for work, stands at 16.7 percent.

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Another big California health insurer has stunned individual policyholders with huge rate increases ”” this time it’s Blue Shield of California seeking cumulative hikes of as much as 59% for tens of thousands of customers March 1.

Blue Shield’s action comes less than a year after Anthem Blue Cross tried and failed to raise rates as much as 39% for about 700,000 California customers.

San Francisco-based Blue Shield said the increases were the result of fast-rising healthcare costs and other expenses resulting from new healthcare laws.

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Advocates for diabetes patients are voicing concerns that Medicaid cuts taking effect in February will reverse gains South Carolina has made over the past decade in managing diabetics’ health.

Doctors have treated diabetes aggressively in recent years, but cuts in the number of drugs Medicaid covers — reductions state health officials called difficult but necessary — might compromise that focus, they said.

The number of diagnosed cases of adult-onset diabetes has risen dramatically, but the rate of lower- extremity amputations has decreased, according to preliminary findings from the annual report of the Diabetes Initiative of South Carolina.

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JEFFREY BROWN: So it is the end of the year, so we’re allowed…to think big, not just the week.

What defines — what defines this year in politics?

MICHAEL GERSON: I don’t know. I — I think it was a year of impatience….

JEFFREY BROWN: E.J. The year?

E.J. DIONNE, The Washington Post: You know, I think the great political scientist, Bono, explained the last three elections — they still haven’t found what they’re looking for….

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Consider an average-wage, two-earner couple together earning $89,000 a year. Upon retiring in 2011, they would have paid $114,000 in Medicare payroll taxes during their careers.

But they can expect to receive medical services – from prescriptions to hospital care – worth $355,000, or about three times what they put in.

The estimates by economists Eugene Steuerle and Stephanie Rennane of the Urban Institute think tank illustrate the huge disconnect between widely-held perceptions and the numbers behind Medicare’s shaky financing. Although Americans are worried about Medicare’s long-term solvency, few realize the size of the gap.

“The fact that you put money into the system doesn’t mean it’s there waiting for you to collect,” said Steuerle.

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From my perspective, homes are still overvalued not just because of these long-term price trends, but from a sober analysis of the current economy. The country is overly indebted, savings-depleted and underemployed. Without government guarantees no private lenders would be active in the mortgage market, and without ridiculously low interest rates from the Federal Reserve any available credit would cost home buyers much more. These are not conditions that inspire confidence for a recovery in prices.

In trying to maintain artificial prices, government policies are keeping new buyers from entering the market, exposing taxpayers to untold trillions in liabilities and delaying a real recovery. We should recognize this reality and not pin our hopes on a return to price normalcy that never was that normal to begin with.

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Baby Boomers are about to create a record population explosion in the nation’s health care program for seniors.

Starting on Saturday, Baby Boomers begin turning 65 and qualifying for Medicare ”” one every eight seconds. A record 2.8 million will qualify in 2011, rising to 4.2 million a year by 2030, projections show.

In all, the government expects 76 million Boomers will age on to Medicare. Even factoring in deaths over that period, the program will grow from 47 million today to 80 million in 2030.

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As a society, we’ve recoiled from a candid discussion of public and private responsibilities for retirement. The long-ducked question is how much government should subsidize Americans for the last 20 to 30 years of their lives. Social Security and Medicare have evolved from an old-age safety net into a “middle-age retirement system,” as Eugene Steuerle of the Urban Institute puts it. In 1940, couples reaching 65 lived an average of almost 19 years, Steuerle notes. Now, the comparable figure for couples is 25 years. For Americans born today, the estimate approaches 30 years.

Overhauling Social Security and Medicare has many purposes: to extend people’s working lives; to make them pay more of the costs of their own retirement, as opposed to relying on subsidies from younger Americans; to prevent spending on old-age welfare from crippling other government programs or the economy; to create a bigger constituency for cost control in health care. America’s leaders have tiptoed around these issues, talking blandly about limiting “entitlements” or making proposals of such complexity that only a few “experts” understand.

Just because this is an awful time to discuss these questions does not mean they shouldn’t be discussed. The longer we wait, the more acute our fairness dilemma grows. We can’t deal with it unless public opinion is engaged and changed, but public opinion won’t be engaged and changed unless political leaders discard their self-serving hypocrisies. The old deserve dignity, but the young deserve hope. The passive acceptance of the status quo is the path of least resistance – and a formula for national decline.

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Sadder, wiser, those of us gathered on the Washington Mall in the freezing morn of Mr Obama’s inauguration can see now that of all the brave, unsustainable hopes uttered by the new young president, the most unsustainable of all turned out to be his Biblical plea to “put away childish things”. He might as well have tried to legislate the word “dream” out of American public discourse. Dreams? Reality? It’s not even close, is it?

Whether fantasy will prevail over factuality, adolescent wishful thinking over maturity, will be the great political motif of the next few years. The omens are not auspicious….

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A study by Northwestern University’s Kellogg School of Management calculates the combined underfunding of pensions in all municipalities at $574 billion. States have an estimated $3.3 trillion in unfunded pension liabilities.

Nunes says 10 states will exhaust their pension money by 2020, and all but eight states will by 2030.

States’ troubles are becoming bigger. Hitherto, local governments have acquired infusions of funds from federal budget earmarks, which are now forbidden. Furthermore, states are suffering “ARRA hangover” – withdrawal from the American Recovery and Reinvestment Act, aka the 2009 stimulus.

There are legal provisions for municipalities to declare bankruptcy. Some have done so. As many as 200 are expected to default on debt next year. There are, however, no bankruptcy provisions for states.

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South Carolina will gain a seventh congressional seat in two years, expanding its presence in the U.S. House of Representatives to a level not seen since 1930.

The state’s 15.3 percent growth rate during the past decade was slightly above the 14.3 growth rate in the South, the nation’s fastest-growing region, according to 2010 census data released Tuesday.

South Carolina’s population increased in part because of people like Timothy and Lillian Worster, who moved to Charleston several years ago.

“We came down here for two weeks on the beach about 10 years ago and said ‘To hell with that. We’re not going back to Maine. We found paradise,’ ” he said.

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Consumers for the first time got federally approved rules guaranteeing their right to view what they want on the Internet. The new framework could also result in tiered charges for web access and alter how companies profit from the network.

The Federal Communications Commission on Tuesday voted 3-2 to back Chairman Julius Genachowski’s plan for what is commonly known as “net neutrality,” or rules prohibiting Internet providers from interfering with legal web traffic. President Barack Obama said the FCC’s action will “help preserve the free and open nature of the Internet.”

The move was prompted by worries that large phone and cable firms were getting too powerful as Internet gatekeepers.

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Republican-leaning states will gain at least a half dozen House seats thanks to the 2010 census, which found the nation’s population growing more slowly than in past decades but still shifting to the South and West.

The Census Bureau announced Tuesday that the nation’s population on April 1 was 308,745,538, up from 281.4 million a decade ago. The growth rate for the past decade was 9.7 percent, the lowest since the Great Depression. The nation’s population grew by 13.2 percent from 1990 to 2000.

Michigan was the only state to lose population during the past decade. Nevada, with a 35 percent increase, was the fastest-growing state.

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It would be reasonable to ask why the government should subsidize charitable contributions at all. But for now, let’s discuss this simpler and more politically relevant question: If we are going to continue subsidizing these donations, what is the best way to do it?

First, I should clarify a simplification I’ve made. In the current system, strictly speaking, your eligibility to deduct a charitable contribution doesn’t depend on whether you have a big mortgage. But it might as well. You can deduct charitable contributions only if you itemize rather than take the standard deduction, and the most common way a household collects enough deductions to make itemizing worthwhile is to have a big mortgage. (Living in a high-tax city like New York can also help a taxpayer cross that threshold, because state and local taxes are deductible, at least for now.)

But I challenge anyone to justify a system in which we essentially subsidize contributions made by people with big mortgages. For one thing, this set-up magnifies the already large distortion created by the mortgage interest subsidy, since having a mortgage qualifies taxpayers for other subsidies as well.

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The United States is too reliant on China for minerals crucial to new clean energy technologies, making the American economy vulnerable to shortages of materials needed for a range of green products ”” from compact fluorescent light bulbs to electric cars to giant wind turbines.

So warns a detailed report to be released on Wednesday morning by the United States Energy Department. The report, which predicts that it could take 15 years to break American dependence on Chinese supplies, calls for the nation to increase research and expand diplomatic contacts to find alternative sources, and to develop ways to recycle the minerals or replace them with other materials.

At least 96 percent of the most crucial types of the so-called rare earth minerals are now produced in China, and Beijing has wielded various export controls to limit the minerals’ supply to other countries while favoring its own manufacturers that use them.

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A drive through Atlanta’s older “intown” residential areas quickly bears out new Census findings: That segregation by race in the US is fading in many, though far from all, American neighborhoods.

Atlanta is one of several predominantly Southern and Western cities that showed a noticeable integration trend over the last five years as both middle-class blacks and whites moved into each other’s neighborhoods, according to the Census Bureau’s American Community Survey of 10 million Americans, released Tuesday. The ACS is the largest demographic survey ever done in the United States.

The shift is part of a “complicated story with lots of nuances” that includes changes in social attitudes, the emergence of new housing and economic opportunity, and an age gap that shows young America is dramatically more diverse ”“ and open to diversity ”“ than older generations, says Kenneth Johnson, a demographer at the University of New Hampshire, in Durham.

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Senate Democrats have filed a $1.1 trillion omnibus spending bill that would fund the government through fiscal year 2011, according to Senate GOP sources.

The 1,924-page bill includes funding to implement the sweeping healthcare reform bill Congress passed earlier this year as well as additional funds for Internal Revenue Service agents, according to a senior GOP aide familiar with the legislation.

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I was very sorry to hear this.

Update: A WSJ article on him is here–read it all.

People who wonder what America’s budget problem is ultimately about should look to Europe. In the streets of Dublin, Athens and London, angry citizens are protesting government plans to cut programs and raise taxes. The social contract is being broken. People are furious; they feel betrayed.

Modern democracies have created a new morality. Government benefits, once conferred, cannot be revoked. People expect them and consider them property rights. Just as government cannot randomly confiscate property, it cannot withdraw benefits without violating a moral code. The old-fashioned idea that government policies should serve the “national interest” has given way to inertia and squatters’ rights.

One task of the National Commission on Fiscal Responsibility and Reform ”” co-chaired by Erskine Bowles and Alan Simpson ”” was to discredit this self-serving morality. Otherwise, changing the budget will be hard, maybe impossible. If everyone feels morally entitled to existing benefits and tax breaks, public opinion will remain hopelessly muddled: desirous in the abstract of curbing budget deficits but adamant about keeping all of Social Security, Medicare and everything else. Politicians will be scared to make tough decisions for fear of voter reprisals.

Unfortunately, Bowles and Simpson ducked this political challenge….

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Failure by the U.S. Congress to pass a tax cut deal soon would “materially increase” the risk of the economy stalling and a double dip recession, White House economic adviser Larry Summers said on Wednesday.

Summers, who is leaving his post as Obama’s top economic adviser this month, said Obama’s deal with Republicans to extend Bush-era tax cuts for the middle class and the wealthiest Americans would provide more fiscal support for the economy than most observers expected only weeks ago.

“Failure to pass this bill in the next couple weeks would materially increase the risk that the economy would stall out and we would have a double-dip,” Summers told reporters at the White House.

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….in the two years since the peak of the financial crisis, the government has not brought one criminal case against a big-time corporate official of any sort.

Instead, inexplicably, prosecutors are busy chasing small-timers: penny-stock frauds, a husband-and-wife team charged in an insider trading case and mini-Ponzi schemes.

“They will pick on minor misdemeanors by individual market participants,” said David Einhorn, the hedge fund manager who was among the Cassandras before the financial crisis. To Mr. Einhorn, the government is “not willing to take on significant misbehavior by sizable” firms. “But since there have been almost no big prosecutions, there’s very little evidence that it has stopped bad actors from behaving badly.”

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The Obama administration is pressuring Fannie Mae and Freddie Mac, through their primary regulator, the Federal Housing Finance Agency. The administration wants the firms to join a program run by the Federal Housing Administration that allows banks and other creditors, which agree to write down mortgages, to essentially hand off the reduced loans to the FHA.

Federal officials estimate that 500,000 to 1.5 million homeowners could benefit from the program””a fraction of the estimated 11 million borrowers who were underwater as of June 30, according to CoreLogic Inc. That figure represents about 23% of all U.S. households with a mortgage.

Industry executives say the FHA program””as well as a related initiative by Treasury””will be only marginally helpful to the housing market without the participation of Fannie Mae and Freddie Mac. The program completed three loan modifications during its first three months and received 61 applications

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Is WikiLeaks a serious journalistic enterprise or a wrecking party? The organisation had given the impression that it had been trying to be more responsible in the past month, after having been accused of endangering the lives of US troops and their helpers by releasing the Afghanistan war logs. But yesterday’s publication of a list of facilities deemed vital to US national security is a step back in the wrong direction. There is a dangerous nihilism in the refusal to distinguish between information that embarasses the powerful, and information that potentially puts lives at risk.

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Julian Assange, the founder of WikiLeaks, will hand himself in to police – possibly as early as Tuesday – after a fresh European Arrest Warrant was issued by the Swedish authorities.

Mr Assange is expected to voluntarily attend a police station within the next 24 hours, and will then appear in a magistrates’ court. He is wanted over allegations of sexual assault in Sweden.

He is currently in hiding in the south-east of England but police are understood to have the necessary paperwork to arrest him.

Mark Stephens, Mr Assange’s British lawyer, said: “We are in discussions about him going to the police by consent.”

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President Obama and congressional Republicans agreed Monday to a tentative deal that would extend for two years all the Bush-era income tax breaks set to expire on Dec. 31, continue unemployment benefits for an additional 13 months and cut payroll taxes for workers to encourage employers to start hiring.

The deal has been in the works for more than a week and represents a concession by Obama to political reality: Democrats don’t have the votes in Congress to extend only the expiring income tax breaks that benefit the middle class. The White House estimates that the proposed agreement would prevent typical families from facing annual tax increases of about $3,000, starting Jan. 1.

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