Not for nothing do they call economics the dismal science. Consensus held that a plummeting dollar making U.S. exports more affordable and a drop-off in the price of oil would shrink the country's yawning trade deficit. Instead, it leapt to a record $60.3 billion in November, up from $56 billion a month earlier. How to explain the missed call? Moody's Investors Service labeled it "an atrocious month for U.S. exports," suggesting "ineffective business and government leadership may be to blame."
But U.S. Treasury Secretary John Snow found a handier target: America 's major trading partners aren't buying their fair share of U.S. goods. "We need Europe to be more of an engine of growth," Snow pleaded. So who should budge? "Ultimately, the solution lies at home," says Professor Barry Eichengreen, a California-based fellow for London 's Centre for Economic Policy Research. America 's households
Losing The Controls
The French government has pledged to support "national champions" in strategic industries vital to the country, such as pharmaceuticals, aircraft manufacturing and... video games? Amid a national debate over industry policy, Paris is close to a deal to give 325 million in annual tax subsidies to France's video game publishers, on top of the 35 million it already hands out to promote innovation. The industry accounts for just 10,000 jobs and about 31 billion in revenues, but it has leapt to the center of national attention following the December purchase by U.S. giant Electronic Arts of a 20% stake in French rival Ubisoft.
"There's a lot of creativity in France, and we don't want to end up as another sweatshop for video gaming like India or Morocco," says Romain Poirot-Lellig, director of the industry association APOM. EA says its intentions are not hostile and industry sources in the U.S. point out that one of Ubisoft's best-selling games is mon dieu! that great French cultural gem, Tom Clancy's Ghost Recon.
Apple Gets Hard Core
Profits at Apple more than quadrupled to a record $295 million in the first quarter, thanks to a 525% jump in sales of the iPod. Meanwhile, the computer maker unveiled the Mac mini, a cut-price desktop, and a no-frills, smaller iPod.
|The Bottom Line|
|I want you to think about a Social Security system that will be flat bust... unless the United States Congress has the willingness to act now
|GEORGE W. BUSH, U.S. President, urging domestic pensions reform|