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"We're going to be a channel for America—not for old white men with money." — Neil Cavuto, Fox News senior vice-president and managing editor of business news, on Fox's new business channel, expected to launch in the fourth quarter, as reported by MarketWatch

Yes, the $764 billion U.S. trade deficit racked up last year is a record-breaker. The bill for oil imports set a new high, as did America's deficit with China, according to the Commerce Dept. report released on Feb. 13.

Still, behind the headline numbers was some little-noticed good news.

The U.S. actually posted smaller deficits with most of its big trading partners, including Canada, Britain, Europe, South and Central America, South Korea, and Hong Kong, than in 2005. American exports of corn, copper, and aircraft, among other things, increased. So did royalties and license fees for movies and other intellectual property. "It's stealth improvement," says Michael Englund, chief economist at Action Economics, a Boulder (Colo.) research firm.

According to BusinessWeek's calculations, the trade deficit, excluding oil and China, has shrunk dramatically since peaking at 2.6% of gross domestic product in first-quarter 2005. It was just 1.6% of GDP in the last quarter of 2006. What's behind the improvement? A slight decline in the dollar from its 2002 highs helped a bit. What helped more: strong worldwide growth, which pushed demand for U.S. goods—everything from Boeing (BA) jets to Paramount (VIA) films. Action Economics' Englund estimates that global growth was a robust 5.3% in 2006 and will be 4.9% in 2007. Such rapid growth used to trigger high inflation, which led to recessions. But countries have gotten better at controlling inflation so growth cycles aren't cut short.

To be sure, the overall U.S. trade deficit is still a whopper. And while oil's contribution to that imbalance will diminish if prices stay at $60 a barrel or below this year, China is another story. The U.S. boosted exports to China by $13 billion last year, to $55 billion. But imports from China rose $44 billion, to $288 billion. Beijing's gradual revaluation of the yuan won't resolve the problem anytime soon, says Oded Shenkar, an Ohio State University economist. The China deficit is "the big boy," Shenkar says. The bright spot for the U.S.: That widening gap is now the exception, not the rule.

Saying the nation is addicted to oil, President Bush has called for a sharp jump in the supply of renewable and alternative fuels. What about the R&D needed to get there? The White House's 2008 budget, released on Feb. 5, asks for just a 1% increase in real R&D spending in energy, transportation, and the environment. The total amount, $7.5 billion, looks paltry compared with what was spent in the past. In real terms, it is almost 19% lower than in 1994 and about 40% less than its 1979 peak. Here's how the amount measures up historically as a share of GDP.

LinkedIn—the online professional site that is partly a social network and partly a virtual business card exchange—allows its 9 million users to list their connections to other site members on their profile page. So which members are the most linked in? Ranked by employer, those who work at (CRM) and at Google (GOOG) (on average, 48 connections), says LinkedIn spokesperson Kay Luo. The site boasts 130,000 recruiters, but the most connected users by job title are founders and CEOs (76), followed by board members (74) and, a bit further down, MBA students (44), who outlink senior recruiters.

School ties also matter. Students and graduates of Stanford business school have an average of 60 connections, followed by those from MIT's Sloan School (58), and Harvard Business School (57). And LinkedIn says the top-growing industries among new users include arts and crafts, libraries, and fitness.

Are gadgets and software becoming bloated with features? "The typical company innovates by making their products bulkier," says Forrester Research analyst Bruce Temkin, who studies customer experience.

To find the balance between functionality and the wow factor, makers of high-tech products are turning to cognitive psychologists at firms like Perceptive Sciences. The Austin (Tex.) market researcher, which has helped Eastman Kodak (EK) streamline its photo kiosks and Dell (DELL) improve its Web site's navigation, says its six cognitive psychologists' training in reasoning and perception enables them to understand the limits of memory and comprehension.

A recent project involved testing an envelope-free ATM deposit feature for Diebold (DBD). Perceptive's psychologists interviewed a group of potential users, along with some ATM repair technicians. They then observed the group's behavior at the new type of ATM, focusing on the ease or difficulty of making deposits this way and any signs of frustration. The results prompted Diebold to make its design more intuitive, with modular parts that can be swapped for quick repairs. (The new ATM feature will roll out later this year.)

Perceptive's CEO, Jamie Rhodes, says the approach counteracts a tendency to equate more features with a better product. Forrester's Temkin echoes that thought. "[Companies] should do deep, primary research on what customers really need and want," he says.

A spoof of Second Life—the online universe in which members create avatars to cavort and consume—has arrived, courtesy of the comic mind of Darren Barefoot. A Canadian blogger and marketer, Barefoot recently created to poke fun at those so busy with their virtual worlds that they're missing the real one. Billing itself as a "3D analog world where server lag does not exist," the site's home (and only) page promises answers to real life's vexing questions: ("What's this body thing...?" "Why can't I build a dirigible with my mind?") And it proudly displays its number of "total residents" (6.5 billion so far), with pictures of some of them: kids in pirate costumes, a reference to "the dress-up nature of Second Life," Barefoot says.

The target of this satire is exhibiting a sense of humor about the send-up. Shortly after Barefoot put up the site, a lawyer at Linden Lab, the owner of Second Life, posted a proceed-and-permit note on Barefoot's blog, a parody of the standard cease-and-desist letter.

Get a First Life has drawn 350,000 unique visitors since it went up on Jan. 20. Barefoot says he doesn't hate Second Life, just the recent "corporate invasion and media hype" about it.

For the second time in two weeks, an automaker has chosen suicide to fuel the plot of a new ad, to the chagrin of suicide prevention groups and the bewilderment of marketers. On Feb. 9, General Motors agreed to edit an ad first aired during the Super Bowl, following complaints by the American Foundation for Suicide Prevention about a dream sequence in which an assembly-line robot jumps off a bridge after messing up at work. The AFSP said the scene treated the jump casually and was too vivid for families suffering the aftermath of a suicide. Three days later, Volkswagen of America debuted an ad in which a young man prepares to jump from a building, only to be deterred by news of three VW cars starting under $17,000. "When did suicide become the thing to do in ads?" asks marketing consultant Dennis Keene. "And how does VW not rethink it after GM got nailed?"

Spokesman Steve Keyes says Volkwagen was aware of the GM issue but that "the point of the campaign is that optimism can prevail over despair." AFSP executive director Robert Gebbia argues that graphic suicide depictions can be dangerous to vulnerable people. About VW's plan to keep running its ad, he says: "Let's hope they change their mind."

Deadbeat parents in a Cincinnati suburb are getting an extra topping on their pizzas: their mug shots. The Butler County Child Support Enforcement Agency is providing three local pizza parlors with "Wanted" posters to glue onto their boxes. The posters, featuring the faces of non-support-paying parents for whom criminal warrants have been issued, have just produced an arrest, says the agency's chief, Cynthia Brown. Community support is strong, she adds, with similar agencies in two other Ohio counties contemplating similar programs. Brown says she gives tips to Karen's Pizzeria, Angilo's Pizza, and Fairfield Pizza on what to do if one of the 10 featured offenders is a customer. (Act normal. Call 911 afterward.) "Almost everyone who's in hiding," she figures, "orders pizza."


John Mack, publisher of e-newsletter Pharma Marketing News, uses this blog to sound off on drug industry ad campaigns. Recently up for discussion: The poorly received Super Bowl spot for Flomax, used to treat benign prostate disease. "If you are going to show an ad on one of the manliest sports events broadcast in the U.S.," Mack argues, be sure it's for something that doesn't require mentioning sexual side effects. Other topics touch on the controversy over whether Merck's (MRK) new cervical cancer vaccine should be mandatory for young women and, on a lighter note, the attire favored by drug reps.

Ford (F) is reviving the Taurus. Ray-Ban announced a relaunch of its original Wayfarer shades. What else would you like to see make a comeback?

"Bring back Braniff, People Express, and Pan Am. The planes were just as fast as they are today, the airports less crowded, and there were no superstitious bureaucrats obsessed with how much liquid I had in my shaving gel." — Seth Godin, founder,; author

"The Horn & Hardart automat, but contemporized: Put in $10 and get Martha Stewart mac and cheese. And the Volkswagen bus. It has so much more charm than an SUV." — Faith Popcorn, CEO, Faith Popcorn BrainReserve

"The trait of embarrassment. CEOs caught back-dating options aren't embarrassed; they spin their transgressions. And Alan Greenspan. We could never understand him, but we knew what he was going to do." — Robert Brusca, chief economist, Fact and Opinion Economics

Toyota's Hydrogen Man
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