Spot the Price

Currencies and Commodities @ NYT 4:00PM CST

Watch me bitch about metal prices for a moment. Let me just say tha $940 for a troy ounce of gold is fucking ridiculous. And $2,100 for a troy ounce of platinum? My god, who is buying all of this? It can't all go to computer parts and catalytic converters. If you want a sign that the economy is shaky just keep your eye on the spot prices for precious metals. Three years ago a troy ounce of gold fetched around $350 to $400. Fucking ridiculous.

Silver Linings Amid Dark Clouds

Weak Dollar Fuels China's Buying Spree of U.S. Firms - Ariana Eunjung Cha @ Washington Post

I'm not an economist so take my opinion here with a grain of salt. Even so, I see the rapid rise in acquisitions of U.S. firms by Chinese ones as something of a positive. While the falling dollar makes it more difficult for U.S. firms to buy into foreign companies, the opposite is that foreign firms feel they have the ability to invest in American companies at bargain prices. Some may see a weak dollar as a sign of falling U.S. financial power in the world but if foreign companies believe that there are good investment opportunities in the states then that's a reassuring sign of the strength of the American economy. As Cha notes, we have experienced the same thing in the 70s and 80s with the Germans and the Japanese respectively. Yes, there is some warranted concern but that has more to do with the politics between China and the U.S. than with the economy. Chinese companies either operating or opening U.S. firms bring in much needed jobs and job security. On an even brighter note, such investments from China are a sign of a lessening militaristic stance against the U.S., if China has had one since the 90s. You don't press too many political hot buttons if you have serious investments in a particular nation. At the same time, yes it is worrisome that China will have greater pull with U.S. lawmakers since more American jobs will depend on China's money. But ultimately, this infusion of cash into the U.S. economy will help it stave off any serious recession. Now if only the price of precious metals like gold and platinum would come down then jewelers like me won't have to raise our prices so much.

Economics and Other Things Pulled From My Ass

For Clinton, Government as Economic Prod - David Leonhardt @ NY Times

I'm going to show some of my less liberal and more libertarian tendencies here by: a) calling Sen. Clinton a dolt; and b) saying that the role of the federal government in the national economy is one of referee, not babysitter. I do admit there are times when the federal government must act more vigorously but those time are rare and rarely does government intervention actually achieve positive results in a meaningful time period. It's the government's charge to keep the economic playing field fair, either through regulation or strict and swift punishment, but beyond taxing the people only enough to sustain the projects and institutions of the federal government, they need to keep their camel nose out. If it is truly the wish of the current administration and Congress to provide a relief package to American citizens then it needs to come in the form of serious tax relief and a reworking of payroll taxes (including excising the cap on Social Security taxes) so that working Americans will have a larger paycheck every month and not just one time.

A 'Stimulating Package' for Bush

Bush Calls for Economic Stimulus Package - William Branigin @ Washington Post

You know, this is one of the few times President Bush has acted something like a real leader. He's set out a goal, an economic plan amounting to nearly 1% of our GDP, weighted heavily on tax cuts but left the details for Congress, himself and the Treasury Dept to work out. Personally, I'd like to see something much more radical in the sense of slashing middle class taxes in half while closing most, if not all, of the corporate tax loopholes and then flattening out corporate taxes downwards by a few percentage points. Index Social Security taxes and remove the cap at $90,000. Cut a lot of the farm subsidies, particularly for farms that net more than ten million a year to make up the loss in revenue from middle class taxes. Increase food stamp availability while shoring up the subprime mortgage mess by backing the homeowners for a limited time if they fall into a hardship and can't pay their mortgages. There's a lot more than can be done, but the most important aspect is giving the middle class the money and assurances that turn into consumer confidence and thus consumer spending. While tax cuts for the rich work in theory that's generally not how it works in real life in terms of stimulating the economy. It's the middle class that we need to focus our efforts on and I do hope Congress realizes this, or at least does something to alieviate the burden on the middle class.

The Politics of Hope

Change is in the Air - Andrew Sullivan

I get the feeling, much like the Anchoress, that this year of electoral politics will throw the populous into a turmoil. but after years of bad economic indicators and a malaise among the people, I also get the feeling that this election cycle will raise people's spirits and might even keep the nation out of a recession. The fact that my entire family is excited now about politics since Iowa, that any mention of politics leads to a bare minimum 20 minute discussion, gives me serious hope for what will come.