Gretchen Morgenson gets it right:

Of course, people prefer rising stock prices to declining ones. Wouldn't it be wonderful if shares never fell? But such actions call into question the claim that ours is a free-market system. More and more, our version of free markets holds that they are free only when asset values rise. When they fall, the markets must be managed.

The Rolls-Royce brand is most firmly associated with ultra-luxury cars, but its engineering wing, Rolls-Royce plc, is also actually the second-largest maker of airplane engines in the world. Now, the company is diversifying even further, with plans to set up a full-fledged nuclear division to "manufacture equipment and provide advice to governments on their atomic energy programs."

Rolls-Royce has been supplying safety instrumentation and control technology to France's nuclear reactors for some time now, and it also has nuclear clients in the United States, China, and the Czech Republic -- creating a separate nuclear division is likely part marketing and part expansion. Since the company projects an almost 70 percent increase in the value of the civil nuclear industry by 2023, it's no surprise that it would try to leverage its unique skills and experience to cash in on the purported "nuclear renaissance."

It is surprising that the article explicitly mentions decommissioning (of aging nuclear plants) and cleanup (of plants and other nuclear sites) as potential moneymakers. Companies that deal in nuclear reactors and related products usually focus on the potential for profit in new nuclear plants and a large expansion in the use of nuclear power. Decommissioning and cleanup will become increasingly prominent issues as the world's current nuclear fleet ages, and often responsibility for such problems is laid at the government's doorstep.

Hopefully, more private entities will see fit to focus on concerns like these in the future -- and if we must have new nuclear power plants, we might as well make them Rolls-Royces.

America's finest news source nails it:

WASHINGTON—A panel of top business leaders testified before Congress about the worsening recession Monday, demanding the government provide Americans with a new irresponsible and largely illusory economic bubble in which to invest.

For more sober thoughts on the financial crisis, check out FP's Seven Questions with William Poole. A recently retired president of the Federal Reserve Bank of St. Louis, Poole has been more prescient than most about America's current economic predicament.

Today's Washington Post A1 on Saudi Arabia contains an interesting nugget on how economic transformation may force the repressive government to open up, if only just a bit:

Saudi officials said they are working on easing the lifestyle and visa restrictions that have kept foreigners from investing and living in the kingdom. One side effect of that will probably be an easing of rules that ban men and women from mingling in public unless they are close relatives.

"We're not anymore an isolated island. We realize the challenge today in order for us to be more competitive means more transparency and more gender equality," said Abdullah Hameedadin, head of the Economic Cities Agency at the Saudi Arabian General Investment Authority, the government body overseeing the projects.

Globalization at work?

As the "elite 8" wrapped up an 18-course dinner in Hokkaido earlier this week, members of the developing countries summit, or "D-8," were also focusing on food -- or rather, the lack of it. Leaders of member nations Indonesia and Malaysia spoke out Wednesday about the need to curb biofuel production. Indonesian Prime Minister Susilo Bambang Yudhoyono was blunt:

The idea is to reduce greenhouse gases and to wean themselves away from dependence on fossil fuels... It is not a good idea: it has only worsened the global food crisis."

Yudhoyono knows a thing or two about this problem firsthand. Indonesia has lost vast swathes of rainforests due to the production of palm oil, an increasingly popular biofuel. But while a little hypocrisy might make his words ring hollow, it doesn't make him wrong.

As FP's own Editor in Chief Moisés Naím tells us, increased food demand from developing countries is hardly to blame for the global food crisis. The real culprit is biofuel production, he aruges, and the government policies that promote it at the expense of crops for human consumption. Biofuels may account for as much as 75 percent of the global increase in food prices since 2002, according to the latest World Bank estimate.

The G-8, to its credit, had something to say about the crisis. Problem is, as usual the group didn't address the real policy problem -- it only "requested" that developed countries open their food stockpiles. Quick fixes, though, aren't going to feed the hungry for long. G-8 countries need to brainstorm feasible, long-term policies. Here's a healthy start: Stop dumping millions of dollars into subsidizing biofuels before this man-made disaster spins out of control.

Which economists, journalists, and business leaders are doing the best job of advancing free markets and free people? You can make your opinions known by voting for nominees for the Free Market Hall of Fame.

At this year's FreedomFest—which describes itself as the world's largest annual gathering of free minds and is the brainchild of contrarian economist Mark Skousen—the first five members of the Free Market Hall of Fame will be inducted at a July 12 gala banquet in Las Vegas. Unlike with FP's top public intellectuals poll, however, the nominees receiving the highest vote counts won't necessarily make it into the Hall of Fame. Rather, "[a] select group of economists and other free-market supporters will make the final decision and vote on upcoming Hall of Fame members," according to the hall's Web site. I guess the Hall of Fame isn't ready to surrender the commanding heights to the tyranny of the Internet majority.

Meanwhile, I recommend voting for Andrew Carnegie for question 6: "Vote for your favorite free market business leader and entrepreneur (past)." Without this industrialist and philanthropist, FP's publisher, the Carnegie Endowment for International Peace, wouldn't be here!

Some may say it was done for profit, but there is a certain cultural je-ne-sais-quoi about the return of the franc for the village of Collobrières.

The town of 1,600, nestled deep in Provence, has re-allowed the use of its country's former currency for everyday purchases, prompting citizens to turn out in droves with fistfuls of francs. Baker Nathalie Lepeltier, who came up with the idea, claims it will convince her fellow townspeople to spend more:

The euro has made life more expensive; prices are much higher... people have lost the concept of the value of money with the euro."

That's a questionable claim, but the franc's reintroduction has helped the villagers of Collobrières strengthen one value -- their French identity. The French public has long shown aversion to EU membership, most notably in 2005 when the country voted "non" on the EU constitution. Now, poised to take the EU presidency tomorrow, the French government has promised a "citizen-centered" approach and to "reconcile Europe with French citizens" during its tenure. Bonne chance: 63 percent of French citizens polled earlier this year do not think that the French presidency will bring Europe closer to the French population.

It'll be especially tough to convince villages like Collobrières, where national and local identity often reign supreme. Some of those interviewed from the town knew nothing about the Lisbon Treaty, the set of EU institutional reforms that Ireland rejected earlier in June. But Collobrières' citizens don't have to know much about global affairs to feel their impact -- inflation has heavily impacted the franc's value. Says Lepeltier:

People remember the price in francs, and they're shocked now when they use francs at how much more everything costs."

If you're a struggling American newspaper trying to maintain quality and improve local coverage, what's one possible solution?

Outsource to India, says the deputy editor of the Orange County Register, California's fifth-largest newspaper. On a one-month trial basis, Mindworks Global Media, an India-based company, will copy-edit some of the Register's stories and lay out pages for a community newspaper at the same company that owns the Register.

This isn't the first time an American news outlet has outsourced to India. Last year, Passport blogged about a Pasadena, California, news Web site that hired Indian journalists to cover meetings of the Pasadena City Council, which are broadcast over the Internet.

There are bound to be some hiccups and gaffes along the way, but it could work better than expected. Mindworks says on its Web site that its workers are "trained thoroughly to become familiar with the client publication and the region," and some employees are bound to have been educated at American universities. And perhaps articles about India and other countries will include more nuance and context.

For American editors and reporters, increased outsourcing is understandably scary. But what if it's key to fundamentally reinventing newspapers, whose U.S. circulation and advertising revenue have been plummeting? Those of us who work in journalism will have to up our game and make ourselves relevant. It's creative destruction at work.

Jeff Rubin, chief economist at CIBC World Markets, a top Canadian investment bank, has put together a fascinating PowerPoint presentation (ppt) on "The Age of Scarcity." Here's one slide that illustrates the astonishing rate at which the world is decreasing its reliance on the U.S. economy:

(Hat tip: Paul Kedrosky)

Felix Salmon checks in on the inflation rate in Zimbabwe:

Comparing Old Mutual's share price in London and Harare, Josh Giersch concludes that there are now 35 billion Zimbabwean dollars to one US dollar - up from a mere 17 billion on Friday. Which would put annualized inflation, he says (I haven't checked his math) at 430,000,000,000,000,000,000,000,000,000,000,000,000%. May as well just round it up to the nearest billion quadrillion quadrillion, at this rate.

Officially, the central bank still lists annual inflation as 100,580.2 percent, and another official estimate from February has it at 165,000 percent. Other market estimates put it at 1.7 million or higher.

Housing prices may have some folks running for shelter, but that doesn't mean  everyone has given up on the U.S. real estate market. Hotpads, an online real estate and housing search engine, has created a set of "Rent Ratio Heat maps," which show nationwide relationships between renting prices and purchasing prices. These handy maps show you where you should rent and where you should buy.

Take a look at their map of Washington, D.C. below:

 

The formula is pretty simple. Areas marked with red grids tell you where to rent, while blue areas (where the ratio is lower) tell you where it makes more sense to buy. You can also see examples of average rental costs.

Are you reading too much Drudge and freaking out about the potential sale of Anheuser-Busch to a European beverage conglomerate?

Perhaps you haven't been paying attention. FP Editor in Chief Moisés Naím has been predicting this moment for months:

Everything from corporate behemoths to family-owned companies are about to come to America on a corporate buying spree. Call it the Euroinvasion. Not only will many U.S. companies now have European owners, but the American marketplace will witness an infusion of new foreign competitors that will manufacture their products in the United States. They will use their new American base both to export to the world—including back to their own European market—and to serve the U.S. market from inside its borders. Such a trans-Atlantic shift will have an enormous impact on Europe's levels of employment and exports. Inevitably, the move will also ignite a political firestorm on both sides of the Atlantic. European politicians will denounce the companies for "exporting jobs" to America, while U.S. politicians, already rattled by the threat of foreign competition, will be infuriated by what they will brand as "the foreign takeover of America." CNN anchor Lou Dobbs will be foaming at the mouth.

Why is this happening now? The plummeting U.S. dollar has made the move across the Atlantic affordable for many European companies. And this may be a once-in-a-lifetime chance to relocate: American companies have rarely been so cheap. Five years ago, a German or Spanish company that coveted a U.S. competitor worth $500 million needed roughly 430 million euros to purchase it. Today, it would take just 316 million euros to buy a company worth half a billion dollars.

Read the whole thing, and let us know if you catch any vintage Lou Dobbs moments.

The LA Times recently picked up on an interesting trend. With the dollar plumbing record depths, game manufacturer Nintendo has been shipping more units of its popular, scarce Wii Fit to Europe:

[Nintendo] also is shrewdly maximizing its profit by sending four times as many units to Europe, reaping the benefits of the strong euro, said Michael Pachter, an analyst with Wedbush Morgan Securities. Pachter estimated that Nintendo shipped just 500,000 copies of the game in North America but as many as 2 million units to Europe. "The shortage demonstrates one consequence of the weak dollar. We're seeing companies ignore their largest market simply because they can make a greater profit elsewhere," Pachter said.

With the iPhone going global today, this Nintendo story leads me to wonder if we aren't eventually going to be seeing a similar calculus from Apple. Why keep your inventories high in the United States if you can bank more cash elsewhere? (The potential difference, of course, being that Nintendo is a Japanese company and Apple is American.)

(Hat tip: Slashdot)

It's easy to identify a global crisis, but much more difficult to resolve it when all parties act exclusively in their own self-interest.

At the U.N. food summit in Rome, heads of state and other global leaders met today to address skyrocketing global food costs. Among those in attendence? Zimbabwe's President-for-life Robert Mugabe, who should know a thing or two about food crises.

Surprisingly, the attendees may have reached a consensus as to what must be done to reverse the "silent tsunami":

There was little disagreement about how to resolve the spiraling costs of food and its impact on the world’s poor: more food aid to feed the world's hungry, additional seeds and fertilizer for poor farmers, fewer export bans and tariffs that restrict the flow of trade, and more research to improve crop yields.

Unsurprisingly, there was strong disagreement over the key causes of rising global food prices, particularly with regard to the so-called food vs. fuel argument. 

When developing countries blamed shortages on the transferring of crops from food to biofuels, leaders of countries investing heavily in ethanol and biolfuel production, notably Brazilian President Luiz Inacio Lula da Silva, fired back:

Biofuels are not the villain menacing food security in poor countries ... It offends me to see fingers pointed against clean biofuels -- fingers tainted with oil and coal."

The debates on farm subsidies for biofuel production is unlikely to end anytime soon. Then again, with gas prices at $4 a gallon, I'd say you can safely bet that biofuels -- subsidized or no -- are here to stay.