The Economy Today: Speculators and Stimuli

Headlines from D.C., Seattle, St. Louis, and elsewhere

Two big economic questions that have been percolating recently rise to the top of the news today: Does something need to be done to curb speculation among energy traders? And does the U.S. need another stimulus package?

The New York Times leads its print edition with the speculation story, noting that federal regulators are considering new restrictions on trading of oil and gas futures and other energy-related commodities. There’s a belief in some circles that speculators – basically, investors who bet on the future direction of energy prices – are behind the extraordinary swings in energy prices over the last year, and the chairman of the Commodity Futures Trading Commission is talking tough about cracking down. Two approaches under discussion: limiting of the volume of trading in which speculators can take part, and bringing more transparency to the energy futures markets.

The anti-speculation effort gets a boost in The Wall Street Journal today, courtesy of an op-ed bylined by British prime minister Gordon Brown and French P=president Nicolas Sarkozy. The European leaders presentt a multi-pronged case for stabilizing oil prices, which includes greater supervision of futures markets by international regulators.

The latest stimulus debate gets full treatment from The Washington Post, which notes that, with the economy miserable five months after the $787 billion package was passed, people are starting to wonder when, exactly, things will improve. President Obama and top administration officials maintain the package was adequate, but as Bloomberg reports, not all Democrats are so sure.

Meanwhile, for all the stories we’re reading about the slow flow of stimulus funds, the Journal notes that, according to a Government Accountability Office report, the disbursement of funds is actually “slightly ahead of estimates.” The biggest problem? Seems the economy, and especially the job market, are even worse than most people expected when the stimulus bill was passed.

In regional news, The Seattle Times reports that Boeing and its biggest union are engaged in a high-stakes game of chicken. The airplane manufacturer will decide this fall where to build a second 787 production line, and unless the International Association of Machinists agrees to a long-term deal with a no-strike clause, the location will be somewhere outside of Washington. Representatives for the Machinists, who have gone on strike four times in the last twenty years, are reluctant to cede that bargaining chip. As interesting is the story is how it came to light: Boeing has apparently been making its case to key state and federal lawmakers, who in turn described the situation to the Times. (Boeing, meanwhile, declined to comment for the story).

The St. Louis Post-Dispatch, meanwhile, files a report from one factory that’s up and running for the first time in awhile. The Granite City Works mill, owned by U.S. Steel, had been idle for seven months due to a steep drop in demand from the construction, automobile and other industries. But even without an improvement in the economy, excess inventory is being worked through, creating new demand. About 800 workers have been recalled to the facility.

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Greg Marx is an associate editor at CJR. Follow him on Twitter @gregamarx.