Blatant Reality

With a weaker dollar, it only makes sense that more countries will be buying goods from the United States. This fact is illustrated in the recent news that last year our deficit had the largest decrease it has seen in the past 17 years.

For all of last year, the deficit shrank 6.2 percent to $711.6 billion, the biggest decrease since 1991. Last year was the first time the trade gap narrowed since 2001.

 

Exports rose 1.5 percent to $144.3 billion in December, setting a record for a 10th straight month and reflecting more demand for U.S. made capital equipment and industrial supplies. For the year, exports rose 12 percent to a record $1.622 trillion.

 

Imports in December declined 1.1 percent to $203.1 billion, reflecting lower demand for foreign-made autos, consumer goods, food and capital equipment.

 

Also contributing to the drop in imports was a 14 percent decline in purchases from China, which helped shrink the month’s trade gap with the Asian nation 22 percent to $18.8 billion. Petroleum imports rose 4.2 percent to a record $36 billion as the average price rose to $82.76 a barrel, also the highest monthly average ever. Prices increased in late December and early January and may push up the value of imports for the January report. They have since declined.

John Hawkins from Right Wing News conducted an interview with Thomas Sowell about his new book Economic Facts and Fallacies. Sowell is the author of such books like The Vision of the Anointed which discusses the incorrect views of those who view the world as just a series of problems and solutions and not one of variable trade-offs. In this interview, Hawkins asks several interesting questions concerning many of the modern “facts” about poverty and the economic disparity between races. Here is just one of the questions he asks and the answer he gets:

The subprime mortgage crisis has been in the news quite a bit of last. Tell us what caused the subprime mortgage problems and what we should do to fix them.

 

There were any number of things that contributed to it. One of the things was that the Fed lowered the interest rate by a tremendous amount, down to about 1% and under those conditions, many people thought that they could afford to buy a house and in fact, they could afford to buy a house so long as the interest rates remained low and the housing prices kept rising. (However), markets go up and down and have for centuries, so those who got themselves out on a limb, got themselves in deep trouble in part because of that.

 

The government was also, at the same time, leaning on lenders to lend to people they would not lend to otherwise, particularly under the Community Reinvestment Act, that empowered politicians to tell lenders that they ought to put so much money here rather than there — as if politicians know better, which they don’t.

 

Between those two things, you had a lot of people out there in very dicey situations and now the politicians are saying that they want to ride to the rescue. Well heavens, they created the problem and I can only imagine that they’re going to make it worse, the more they intervene.

It is a pretty interesting interview with a lot of the questions directly relating to current economic issues. I would definitely recommend reading the whole article.

Gateway Pundit posted a news clip from FOX news where several people discuss why they don’t want a democrat in office in ‘08. The bottom line is this: Democrats want to take us back to the tax structure of the 1970s which is very, very bad news for our economy if that happens.

Gateway Pundit has an article today that shows the contrasting views about unemployment between the Clinton and Bush years.

S&P released an article today that outlines how stocks might be influenced by whether a Democrat or Republican takes office next fall. The main topics of discussion are health care, defense, and energy stocks. One thing is for certain, no matter who wins next fall, the advertisers will always come out on top…

Regardless of which party gains the White House, advertisers will likely be the big winners, as spot TV advertising spending is projected to rise 9% to 10% in 2008, according to the Television Bureau of Advertising.

What presidential candidate would be the financially smart choice for you? The website Election Stocks may have the answers for you.

(h/t Dominic Basulto)

Election Stocks is an investment site. Our purpose is to examine the 2008 elections from a financial market perspective. The goal is to help investors make wise decisions.

The material at Election Stocks reflects the work of our research team — political scientists (current or former college professors), investment professionals, and some talented students. We intend to use the conclusions in making our own investment decisions.

 

Why make public the results of our research? The answer is simple: Sharing can help us all.

 

We hope and expect that this will be a community-based effort. Anyone who learns something important about a candidate’s issue positions should join the discussion. Issue positions, if adopted, have implications for specific stocks. The discussion forums provide a place for everyone to discuss candidates, issues, and the affected stocks.

Today, 1,028 economists signed a petition in opposition to raising tariffs against China. These protectionist policies are likened to the Smoot-Hawley Tariff Act that Hoover signed into being in 1930. This act was seen as one of the things that contributed to the Great Depression and at the time was also opposed by 1,028 economists.