A Run of Good Numbers
Wall Street and the White House were cheered by upbeat economic and budget news. Consumer and producer prices were both unchanged last month, while retail sales and factory orders rose more than expected. And the first crop of second-quarter profit reports, like the 24 percent increase at General Electric, was also encouraging. Meanwhile the government reported that its budget deficit this year could be close to $100 million less than projected, reflecting increases in corporate profit and capital gains.
Quid Pro Quo?
Economically, trade issues with China and the proposed Central American Free Trade Agreement are unrelated. But politically, they are now intertwined. Until last week, House leaders had opposed legislation that would levy tariffs against goods imported from government-subsidized Chinese firms. But last week they promised to push through the bill to win support for CAFTA from wavering Republicans who fear political backlash on trade because of widespread voter concerns about the economic threat from China.
Investigators working for Wal-Mart alleged that ousted executive Thomas M. Coughlin used company funds to pay for CDs, beer, duck-hunting gear and even his son's graduation gift. Coughlin was a hunting buddy of Sam Walton who rose to become head of Wal-Mart's U.S. operations. The report by Gibson Dunn & Crutcher enumerated hundreds of thousands of dollars in allegedly misappropriated company funds. Coughlin's defense is that the diverted money was used for secret anti-union activities.
Hotel Project Advances
The District moved closer to resolving where to put and how to finance a mammoth new hotel near the Convention Center, breaking a long political stalemate. The convention center board recommended that the 1,220-room hotel be located next door, at Ninth Street and Massachusetts Avenue NW, as originally recommended by Mayor Anthony Williams. After reviewing various schemes for the city to own and develop the $400 million hotel, the city is considering a private-financing proposal from Marriott and BET founder Robert L. Johnson.
After 50 years of planning and controversy, Gov. Robert L. Ehrlich Jr. announced that Maryland would begin construction of the intercounty connector, an east-west highway linking Route 1 and Interstate 95 in Prince George's County with Route 270 in Montgomery County. The road -- estimated to cost $2.4 billion -- has long been a top priority of business groups. Smart-growth advocates fret it will become the first leg of a sprawl-producing "outer Beltway." Ehrlich vowed to redesign the road to address environmental concerns.