The U.S. government made the decision to offer tax rebates to help offset the economic slump. Based on recent unemployment figures, that may not be working.

Rising commodities and oil prices may be a more significant threat to consumers than the very modest growth in personal income.

That begs the issue of whether the U.S. is putting capital distributed to tax-payers in the right place. It may be that giving consumers subsidies to offset oil and gas prices is a much more effective way to keep the economy on track. And, that is what South Korea plans to do.

According to Bloomberg, the government in South Korea will put up about $10 billion "to help consumers and businesses cope with surging energy costs." These benefits will go mostly to those with modest incomes and small companies. Arguably, the rich and large corporations are better able to cope with high energy costs.

Estimates vary, but the U.S. economy is 10 to 15 times larger than South Korea's, so any similar program in the U.S. could cost $120 billion.

Not a ton of money to keep the skids greased.

Douglas A. McIntyre is an editor at 247wallst.com.

CNNMoney reports that oil closed up a record $11 a barrel today -- closing at $138. Can $200 a barrel be far off?

As I posted, this record price spike could have something to do with speculators' fear that they will no longer be able to take advantage of the swaps loophole the gives them unlimited ability to control the oil market. Perhaps rumors that regulators will close the loophole are scaring speculators to buy up as much oil as they can before the loophole closes.

Or it could be a plunge in the dollar. As I posted, the European central banks are talking about raising interest rates further to fight inflation. But the Fed is only talking about inflation and not doing anything about it. The dollar has lost 70% of its value since January 2001. With oil trading in dollars, it's taking more and more of them to buy a barrel of oil.

It has definitely been a tough week for airlines, and yesterday Skybus became the third airline to stop operating.

Once again, the main culprits are rising fuel costs and the slowing economy, making it almost impossible for small, low-cost airline companies to compete in the current market. Skybus decided that it would be shutting down all operations as of yesterday, and plans to file for bankruptcy over the course of the next week.

Skybus has not been around for too long. The company started up about a year ago and operated around 75 flights a day. The company had 350 employees working out of Columbus, Ohio, and 100 in Greensboro, N.C.

The U.S. Labor Department announced Tuesday producer prices surged 1.0% in January 2008 on energy costs, well above the 0.3% consensus estimate.

Meanwhile, the core PPI rate, which excludes food and energy costs, increased 0.4%, also well above the 0.2% estimate.

The 1% January 2008 PPI increase follows a 0.3% increase in December 2007.

Economist Steve Affinito told BloggingStocks Tuesday the January PPI stat is going to make it very rough for the U.S. Federal Reserve to maintain low interest rates for a long period of time.

Fed won't be pleased

"Wow! This number is hot, really above what we expected," Affinito said. "This almost guarantees that the Fed will be raising interest rates in a year about as fast as they lowered them this year. We have accelerating inflation at the wholesale level, so expect the Fed to clamp down on these inflationary pressures at the first sign they believe the economy is growing."

To say the bears on Wall Street have gained some momentum in late November 2007 would be an understatement.

The consensus now argues that U.S. GDP growth has slowed substantially, with growth likely to remain sub-par through at least June 2008, and the Dow's 1,400-point drop in about a month reflecting that consensus.

Nearly every sector looks vulnerable. Still, some sectors are faring reasonably well. The rails are one, and among the rails, Burlington Northern (NYSE: BNI) is worth an evaluation.

For nearly 30 years, the rails -- long neglected in the United States -- were considered passé. Then the globalization era dawned, along with its exports and demand for agricultural products and coal. Add intermodal shipments and a price of oil that's basically risen for ten years and the results is - the rails are back.

Wall Street and its scoreboard stock exchanges are jubilant with the 0.5% cut in the prime rate. But all is not well. As expected, gold and oil hit record highs on the news yesterday and the sky's the limit. The dollar will be losing value and foreign investors will be buying increasing amounts of our equities, including land, buildings, public and private companies. Expect American ownership to decrease.

The fact that the Federal Reserve sought to pacify investment bankers and individuals who made bad deals in an effort to shore up what was starting to look like big trouble in the "heartland" is not, I think, worthy of celebration. Yes, we should be grateful that Ben Bernanke and crew are keeping a watchful eye on the pulse of the economy and did not wait until we drowned to throw in a lifeline. But for this conservative group to make the cut they had to think things were bad, and that is not exactly heartening news.

Transportation stocks are not doing well this morning, and neither are delivery companies. FedEx Corp (NYSE: FDX) and United Parcel Service (NYSE: UPS) are showing losses or treading water, even though the overall market is notably up. Why? Fuel costs.

The third name in my list of the top 25 stocks for the NEXT 25 years (again, in no particular order) is Color Kinetics (NASDAQ: CLRK). This Boston-based company has the opportunity to redefine the world of lighting -- a massive market. Color Kinetics closed at $21.55 and currently sports a market capitalization of $459 million. Color Kinetics has $100 million of cash on its balance sheet. My estimates for this year call for revenues of $85 million and earnings per share of $.44-.47 and for 2008, revenues of $110-112 million and earnings per share of $.65-.67.

Color Kinetics makes intelligent solid-state lighting systems using light emitting diodes (LED). The company has 68 awarded patents in its portfolio with another 100+ applied for. The intellectual capital that Color Kinetics possesses is becoming extremely valuable. Its business model is to directly sell lighting systems, from architectural design to implementation, to licensing its technology, to third party partners.

The world of lighting is undergoing a revolution and Color Kinetics is emerging as one of the de facto leaders. The traditional incandescent light bulb is going the way of the horse and buggy. The incandescent bulb uses far too much energy to operate efficiently, and the lifespan is limited to normally a couple of thousand hours. LED lighting, not yet economical for mainstream homeowners, is winning in the commercial world. Color Kinetics systems are the choice for casinos, theaters, new commercial building projects, and street lighting. The technology included allows the customer to change the color of the lights from pure white to an array of different colors. The physical beauty of the systems are awe-inspiring.