When one travels in economists' circles, one tends to tap into the issues, controversies and policy ideas 'dismal science' practitioners are debating.

And one issue economists have rattled around concerns the speed of fiscal policy stimulus, or more accurately, the lack thereof. In the digital age, the internet has propelled a host of speed-enhancing changes, and it occurred to this group of economists that U.S. Government policy is decidedly behind the curve in this area.

Here's why: economist David H. Wang noted that the U.S., in an attempt to jump-start its economy stalled by the nation's worst housing slump in more than 15 years, has implemented a host of monetary policy changes to provide monetary stimulus quicker. The U.S. Federal Reserve cut key, short-term interests multiple times during a 10-week span (and later implemented additional rate cuts), and devised two, new, Fed-administered institutions to address the credit crisis, provide liquidity, and ensure the orderly operation of financial markets.

As serious as the oil issue is in the United States, the west, and globally, considering its impact on economic development, circumstances could become even more challenging, in the quarters ahead, if present trends continue.

That's because, due to emerging market growth and per capita energy consumption rates in the United States - the oil -producing world "could be in a position of unprecedented pricing power," according to economist Glen Langan.

Langan says "could be" because the pricing power oil producers currently have, while significant, is not absolute. And oil-consuming nations still have time to regain some control over their oil bills. Oil Thursday reached a record high of $123.74 per barrel before closing slightly lower.

Here's the current global oil supply / demand landscape, as Langan sees it: daily global oil supply exceeds demand by the smallest of margins. It's the major reason the price of oil has been trending up for more than 5 years, but oil-consuming nations can increase that margin, via conservation, increased efficiency, and alternative sources of energy.

U.S. stock futures were higher early Thursday morning as investors digested Toyota's earnings and awaited sales reports from several large retailers.

This is after on Wednesday, U.S. stocks dropped as oil futures surged past $123 a barrel and financials showed more weakness. The Dow industrials fell 206 points, or 1.59%, the Nasdaq Composite fell 44 points, or 1.80%, and the S&P 500 dropped 25 points, or 1.81%.

But today stocks looked set to recover from the previous session large pull back. While Toyota's results show the automaker also struggling in the U.S. market, a stronger dollar may have helped boost sentiment. Investors also expect April retail sales to be strong rising about 1.5% to 2% due to an extra selling day and warmer weather at the beginning of the month.

Not much economic data is due today, only weekly initial jobless claims and March wholesale inventories.

Also on the docket today is a vote the housing aid bill, the Democrats' plan to help strapped homeowners refinance into government-backed mortgages. Already blamed by many for not doing enough to address the crisis, President Bush will likely veto the measures.

Countrywide (NYSE:CFC) got called before Congress. All of the elected officials and their staff members wanted to know how the mortgage firm screwed up by lending people without the resources money to buy homes. Was there fraud involved? Did brokers inflate buyers' salaries? Did they take down any pertinent information at all?

As would be expected, Countrywide said it had not done anything illegal. All that happened was that its people made a few mistakes. All that has been fixed and everything is fine.

According to The Wall Street Journal, Countrywide "told a U.S. Senate Judiciary subcommittee Tuesday that the company is taking steps to address concerns that misconduct in bankruptcy proceedings by mortgage companies is exacerbating the nation's foreclosure crisis." In other words, the company gave out loans which people could not pay and then beat them up with fees which they could hardly afford when they got behind on payments.

The FBI and a number of other agencies looking into Countrywide's practices. They obviously are not willing to settle for the company's comments before Congress. These investigators think that the mortgage operation knew a great deal about what it was doing and was doing it on purpose to make more money.

Countrywide can testify all it wants. There is no poll of home buyers, federal investigators. or Congressmen that will show anything other than the belief that the company is not telling the truth. Not even close.

Douglas A. McIntyre is an editor at 247wallst.com and author of the Ten Stocks Under $10 letter.

Bipartisan legislation aimed specifically at increasing government regulation of railroads threatens to hamstring 25 years of successful growth and investment by that industry. The Railroad Antitrust Enforcement Act of 2007 (H.R.1650) would effectively undo specific and narrow antitrust process exemptions that were provided for the railroads by the Staggers Rail Act of 1980. The Staggers act effectively halted what had previously been a massive and staggering decline by American railroads. Currently, the railroads are effectively and efficiently regulated by the Surface Transportation Board.

The American Association of Railroads reported in a press release, "Since Staggers, railroads and their customers have benefited enormously. Railroads have reinvested $420 billion back into their systems since 1980. The result has been improved service and safety, and nearly double their traffic volumes -- all while lowering average rates by more than 50 percent in inflation-adjusted terms. That means the average rail [shipping customer] can move twice as much freight today for the same price as in 1980." AAR further reports that a just-released Morgan Stanley survey found customer satisfaction with rail service is at a historical high.

It should also be noted that the devastating decline suffered by the railroads prior to passage of Staggers is arguably the lynch pin of this nation's inability to establish reliable, desirable, and profitable mass transit for commuters by rail. The rate of investment by our freight railroads since 1980 could be one facet in bringing effective local and nationwide passenger rail service back within our grasp. The passage of H.R.1650 may effectively destroy any further hope of developing high-speed, cross-continental passenger rail service and the further expansion of local commuter rail services.

In an age when surface transportation is becoming incredibly more expensive and our airlines are in perilous distress, do we really need to limit our options by passing legislation which could severely injure a system that works? You may wish to consider contacting your legislators in an effort to halt H.R.1650 dead in its tracks.

In the latest chapter of "Politicians must have something to say about everything," Hillary Clinton wants you to know that she doesn't like the fact that Exxon Mobil (NYSE: XOM) traded down after after reporting $11 billion in quarterly earnings.

Senator Clinton -- whom I would vote for by the way -- said that "There is something seriously wrong with our economy when Exxon's record $11 billion in quarterly profits are seen as a disappointment by Wall Street."

Then, in a twist that reminded me of watching a poorly coordinated fellow slam an ice cream cone into his forehead, Clinton added that this was further proof that the gas tax should be suspended.

Has Senator Clinton seen the number of SUVs on the road? And has she noticed that 60% of people are obese? I promise you they didn't get that way by walking everywhere to save money on gas. Given the state of the federal budget -- and the increasing concern about the impact of fossil fuels on the environment -- we shouldn't be doing anything to encourage increased use of fuel.

A separate issue that may of interest to investors: some analysts have suggested that Exxon is actually understating its profits -- and boosting capital investments -- in an effort to appease politicians. If that's the case, the stock may be cheaper than it appears at first glance.

As was reported in AP online, "Members of the Rockefeller family are pressuring Exxon Mobil (NYSE: XOM) to focus more on renewable energy. The family members, who say they are the oil giant's longest continuous shareholders, say Exxon is too focused on short-term gains from sky-high oil prices. They also argue splitting the roles of chairman and CEO will help the company be more flexible in the future."

Last time I checked, companies had a responsibility to provide value for shareholders, and no one has done it better than the oil giant. It has been producing record earnings quarter after quarter, and that is exactly what it is supposed to do. Corporations are not supposed to be politically correct organizations that throw money around at the latest fad. Maybe Exxon doesn't believe that there is a global warming problem? Or maybe it wants to see a lot more scientific evidence of the problem before committing billions and billions of dollars to research. If I were a shareholder, I would want management to take the exact approach that it has been taking. The fact that it is the most profitable company in the world means something. It should be commended for providing shareholder value.

In fact, Bloomberg has an article that says that ocean cooling will stop global warming. Moreover, the article indeed mentions that the authors tried to spin the article because of Exxon. "We thought a lot about the way to present this because we don't want it to be turned around in the wrong way," Keenlyside said. "I hope it doesn't become a message of Exxon Mobil and other skeptics."

Sounds to me that they are right to be skeptical.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 5/1/08

The Fed's job is to control inflation. But is was established originally to keep financial panics from getting out of control. Since last August, it has reverted to its original role and failed miserably. Since it began cutting its Fed Funds rate 57% from 5.25% to 2.25% the price of a barrel of oil has risen 62% from $71 to $115. Simply put, the weaker the dollar, the higher the price of oil. Bloomberg News proves it -- noting that in the last year, there was a 0.96 correlation -- a correlation of 1.0 would be a completely safe bet -- between the Euro-dollar exchange rate and the price of oil.

If it bothers you to pay $3.66 for a gallon of gasoline you can thank the Fed along with cheerleader, Hank Paulson who brags that he's been talking about the U.S.'s strong dollar policy consistently. Of course saying and doing are two different things. Since January 2001, the dollar has lost 70% to the Euro. And since oil is traded in dollars, a drop in the dollar leads to a rise in price. And lower interest rates erode further the value of the dollar since it pays government bond holders a lower rate of return so they sell the U.S. currency and buy higher yielding ones.

But it's unfair to give the Fed all the blame. After all, we have been running the Federal budget at a deficit -- expected to hit $413 billion this year. Since the Fed has started cutting rates, other factors such as speculation by leveraged traders -- relying on the 0.96 correlation -- and political instability seem to have remained at the same level -- although the degree of speculation seems difficult to measure. And U.S. demand has declined due to the economic slowdown. So it looks like those dollar-weakening rate cuts are the one factor powerful enough to offset the demand slowdown to drive prices up.

With investors awaiting the Fed's interest rate decision, the focus of the decision will be felt in the currency markets. In an AP report: "The Federal Reserve is poised to deliver another interest rate cut to millions of people and businesses this week, although that could be the last break they get for a while."

This scenario may be just what the doctor ordered for the dollar. In anticipation of the announcement, the greenback has staged a minor technical rally, albeit on lackluster volume. If the currency market would get the news that future rate cuts are on hold, the dollar may very well start a recovery.

The reason for the recovery is twofold: Firstly, there is interest rate differential. This has been the major driver in the currency market over the last few years. If the Fed would signal an end to rate cuts, by definition this would mean that the differential would no longer widen. The second reason is economic growth. The US was the first major country in the world to enter this period of lackluster growth and with the steps taken( fiscal stimulus and rate cuts), the right measures were implemented to make sure that the US is the first country to get out of the mess. My hunch is that we will see currency markets move away from the 'interest rate differential trade' to that of one focused more on growth.

As I have mentioned many times, the situation in the Euro-zone is nothing to write home about. Surging inflation, slow growth, the banking sector in turmoil. Sounds familiar. The only difference is that the ECB has done nothing to try and right the ship, while the Fed has. Ultimately, when the US gets back to above-average growth late this year or early '09, the aggressive stance the Fed took will be viewed as the reason for the recovery.

Aaron Katsman is the lead Portfolio Manager and Managing Director of America Israel Investment Associates, LLC. and Senior Editor of IsraelNewsletter.com. DISCLOSURE: Writer's fund has no position in any stock mentioned, as of 4/29/08

For the purposes of this examination, let's set aside the fact that you can find reliable clinical research that shows that tobacco smokers cost the insurance industry less over their lifetimes than svelte nonsmokers do. This is simply due to the fact that we tend to die sooner. But that's a matter of insurance industry/government/pharmaceutical hijinx, to possibly discuss another time.

That aside, the item I'm bringing forward today is how the issue of lying smokers should be pursued by Whirlpool Corp.(NYSE: WHR). I'll not take issue against Whirlpool's insurance plan demanding a different level of premium payment from smokers. I'll not take issue against Whirlpool asking smokers to document their participation in the addiction. I'll not take issue against Whirlpool taking action against smokers who lied when claiming that they don't smoke. What I do argue against is the ludicrous notion that Whirlpool employees have turned on one another. It appears that's what the company expects us to believe.

Whirlpool management wants you to believe that they had 39 instances of one employee reporting another for serving their nicotine addiction in violation of what should be a confidential declaration of status. Whirlpool expects you to believe that these company "rats" know which smokers lied on their paper work and which didn't. Whirlpool expects you to believe that all policy violators are of hourly status and that violations by management staff either don't exist or aren't yet worth pursuing. Whirlpool expects us to believe that the company itself wasn't at the root of this all.

John McCain is famous for many things. One of those is the McCain-Feingold Act designed to limit the role of corporate money in politics. But his actions suggest an eagerness to accept corporate money as a means to his political ends.

Here are three:

• Protects campaign contributor from S&L regulators costing government billions. In the 1980s, McCain intervened to keep regulators away from Charles Keating, a Savings & Loan operator, who contributed to McCain's campaign and let McCain's wife co-invest in a real estate deal. Keating's Lincoln Savings and Loan ultimately failed, costing taxpayers $3.4 billion.
• Sways $100 billion U.S. Air Force contract to European company. In February the Air Force awarded a $100 billion contract for refueling Tankers to EADS, the parent of Airbus, and Northrop Grumman (NYSE: NOC). As I posted, McCain's campaign finance chair was a lobbyist for EADS who arranged to send much of this contract to non-U.S. workers. McCain now employs the people who lobbied for EADS on his own staff. EADS retained The Loeffler Group to lobby for the tanker deal in 2007. Loeffler Group lobbyists on the project included Tom Loeffler, who lobbies for EADS and serves as McCain's national finance chairman and Susan Nelson, who left Loeffler and is now the campaign's finance director. EADS employees donated $14,000 to McCain's presidential campaign, more than any other member of Congress this election cycle; and

In the April 23, Wall Street Journal, Senator Sherrod Brown, (D) Ohio, made a realistic assessment of current government trade policy and how it is diluting the strength of our country. I think that Senator Brown was just a bit gentle with his words, and understandably so when given his position. Suffice it to say that I agree with him for the most part, but he should have just cut to the chase. The American working class has been sold out. He also failed to make one critical point about NAFTA. It was his party and the guidance of Bill Clinton that navigated that document into law.

Partisan politics aside, I believe that current American trade standards are something we need to be ashamed of. As a free market capitalist, I have nothing against the survival of the fittest in the worlds of manufacturing and business. However, we're beholden to good sense to provide a level playing field and to maintain benchmark standards. In that regard, American workers have been shorted. Our trade deficit is a testament to the decline of the American Dream. It's a dream, while not referred to by that name, that resides in the hearts of workers the world over. Every parent wants their children to have a greater degree of opportunity and safety than they had.

Despite excellent earnings from Boeing Co. (NYSE: BA) yesterday, a bit of a shadow still hangs over the company. That's because in February the Air Force awarded a $100 billion contract for in-flight refueling craft -- known as tankers -- to EADS's Airbus and Northrop Grumman (NYSE: NOC). Boeing is currently challenging this award. But an interview I did for my book on Boeing suggests that Boeing will not win this contract because George W. Bush and John McCain want to award the contract to Bush's new friends: France's Nicolas Sarkozy and Germany's Angela Merkel.

I got this theory from a veteran Wall Street analyst who covers the aircraft industry. He suggested that Boeing lost the Tanker bid because John McCain -- who is ranking member on the Senate Armed Services Committee -- had the Air Force change the specifications for the tanker bid so Airbus and Northrop would be able to field a competitive bid. My source noted that the one problem with the change was that the Air Force did not inform Boeing about it.

After the bid was awarded to Airbus, it became clear that the original specifications had changed from a small, 767-sized craft to a medium-sized 777 one. During the review process, my source contends that Boeing asked the Air Force if the 767-sized craft was what it wanted. Boeing also told the Air Force that it would be happy to bid with a different model if the Air Force wanted. But the Air Force told Boeing that it still wanted the 767-sized craft.

Most Americans don't want to be poisoned by medications or components used to make medications which come from overseas. Imports from China come to mind.

Over the last month, the government has disclosed that over 80 people in the US have died from tainted Heparin, a blood thinner. So far, the most likely cause is problems with a basic ingredient for the drug which is made in China.

Now word comes that for just $70 million, inspections could be much better and more widespread. That is $70 million dollars which could save lives and protect consumers from bad drugs. Only $70 million.

According to The Wall Street Journal the FDA "would need about $15 million to inspect about 700 facilities in China alone." That seems like a very modest investment.

The Wall Street Journal recently reported (subscription required) that the Securities & Exchange Commission wants more money from Congress to invest in the oversight of investment banks and credit-rating agencies. Given all the problems that have emerged there, it seems like it might be necessary.

But the problem is that many of the Chris Cox-led SEC's failures have not been a result of a lack of funding, but rather a lack of a political will to stand up to the Business Roundtable that no amount of additional funding can compensate for.

In a glaring betrayal of the investing public back in December, Cox and the GOP-controlled Commission took steps to insulate poorly performing directors from dissident shareholders.

Separately, investigative journalist Gary Weiss charges that, rather than cracking down on serious problems in the securities markets like the rating agencies and investment banks, Cox has devoted an inordinate amount of time to the topic of naked short selling. Weiss asked the question "Why is naked short selling the only `fraud' that has no victims and no perpetrators, only a bunch of crackpots yammering about conspiracies?"

Maybe the SEC does need more funding to protect the interests of investors. But it could do a lot more without any additional money if Cox and company actually took their duty to the American people seriously.