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Here be dragons

Money | The U.S. economy keeps improving. So why is everyone so nervous?

Issue: "Return to war?," May 5, 2012

The Standard and Poor's 500 had its best first quarter in 14 years, and the Nasdaq its best in nearly 20 years. And on April 6, we learned March unemployment ticked downward another 10th of a percent, to 8.2 percent.

Signs of smooth sailing? Almost no one thinks so, because every time the seas calm, dragons appear. Take the jobs report, announced on Good Friday. The March unemployment rate dropped, but the economy created only 120,000 private sector jobs, well below economists' expectations. When the markets opened the following Monday, the Dow dropped 150 points.

The European debt dragon has reared its head again, too. Spain's finance ministry said on April 3 that Spain's 2012 debt would jump to its highest level since 1990-if it can find anyone to buy its bonds. Spain's April debt auction was a disaster. It couldn't sell as many bonds as it hoped, and it had to offer a high interest rate to sell the ones it did. The Spanish stock market dropped 2.7 percent on the news.

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Even the manufacturing sector, the main driver of the recovery, is cooling off. The Commerce Department reported factory orders gained only 1.3 percent in February. Economists polled by MarketWatch had expected a 1.5 percent rise.

So is the recovery an illusion? Christina LeGarde, managing director of the International Monetary Fund, in Washington on April 4 to speak to journalists, said the U.S. recovery is real, but we "should not delude ourselves into a false sense of security. The recovery is still very fragile." She further warned the United States about borrowing more money, saying that just because the United States can borrow at low interest rates doesn't mean it should.

Analysts took her comments to mean two things. First, the United States has to maintain its ability to backstop the global economy if things get out of control. Second, it's a warning that even the debt-happy Europeans are nervous about the level of U.S. debt, and if the Europeans are nervous, maybe we should be too.

Attacking ALEC

Robinson (Photo by Sonia Recchia/Getty Images)

State legislators are often overworked, underpaid, and have no staff. So many conservative legislators turn to ALEC, the American Legislative Exchange Council, for ideas and practical help. The group is known for drafting model legislation that legislators can adapt state by state, taking the heavy lifting out of preparing a bill for consideration.

More than 2,000 legislators, a third of the nation's elected lawmakers, pay $100 for a two-year membership, but fees from corporations, not lawmakers, keep ALEC alive. Corporations pay between $2,500 and $25,000 for annual memberships.

One of ALEC's success stories has been the crafting of voter identification laws now in force in at least 31 states. Advocates say the laws have reduced voter fraud. Critics say they repress minority turnout, which is why the liberal group ColorofChange.org threatened a boycott of ALEC's corporate sponsors, prompting Pepsi, Coca-Cola, Kraft, and Intuit to withdraw from the group for fear of being branded racist.

This type of racially charged activism is not new to ColorofChange.org. The group became famous in 2006 for supporting the "Jena Six," six black teenagers who severely beat a white teenager. The Jena Six were later convicted (or accepted plea deals) and forced to make financial restitution to the victim.

But being on the wrong side of the law proved lucrative for ColorofChange.org. The group raised millions from the highly politicized case. So it's no surprise the group is now trying to link ALEC to the Trayvon Martin shooting, accusing ALEC of promoting "stand your ground" laws now under fire in the aftermath of that tragedy. A spokesperson for ALEC says the group had nothing to do with those laws.

It's a denial unlikely to deter ColorofChange's new executive director, Rashad Robinson. He honed his skills working with liberal groups such as People for the American Way, the ACLU, and GLAAD (Gay and Lesbian Alliance Against Defamation), organizations that have raised coloring the truth to a high art. -Warren Cole Smith

Warren Cole Smith
Warren Cole Smith

Warren, who lives in Charlotte, N.C., is vice president of WORLD News Group and the host of the radio program Listening In. Follow Warren on Twitter @WarrenColeSmith.

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