Sizing up the Michigan Primary and GOP Voters

TOM HUDSON: The race for the Republican presidential nomination goes
through Arizona and Michigan today. Willis Sparks is along with us, an
analyst at EurAsia Group, focusing on U.S. politics. Willis, welcome to
the program. Nice to see you tonight.

WILLIS SPARKS, ANALYST, EURASIA GROUP: Thank you for inviting me.

HUDSON: I want to ask you about some of the pledges we’ve heard on
the campaign trail when it comes to the economy. But what about the
importance of the economy playing in the primaries we’re seeing tonight in
Arizona and Michigan?

SPARKS: Obviously, the economy is always the most important issue in
just about any presidential election, particularly given the depth and
breadth of this recession. Everyone came into this race expecting that that
would be even more true this year. But you led your show with a story of
rising consumer confidence, rising markets. What we’re seeing is
Republicans trying to pivot back to the economy where they think they have
promising political ground to make up on Barack Obama. But some of these
promises are actually more designed to draw attention to them in a moment
of a close race than to actually set policy markers that they may keep in

HUDSON: Willis, some of those policy markers, some of those pledges
heard about in the last 10 days leading up to tonight’s elections,
primaries, Governor Romney out with a tax plan. Senator Santorum talked
about economic growth and House Speaker Newt Gingrich talking about energy
going so far as saying if he’s elected White House, $2.50 gasoline isn’t
too far behind. Which economic policy is gaining traction with voters?

SPARKS: Well the gasoline issue I think is going to draw some
skepticism because we’ve heard these kind of pledges before, not just from
Mr. Gingrich but from different candidates in both parties. And I think
that voters have become more sophisticated over the years about how little
impact a particular government may have on gasoline prices. I think in
terms of specific promises, the larger messages that Romney and Santorum
are trying to convey, Romney’s trying to suggest Santorum has never had a
job in the private sector, doesn’t know how markets work or how to create
jobs. Mr. Santorum is saying Romney is a Republican in name only. He
wants to increase taxes on the highest income group. This is not a
conservative principle. And I think it’s the sort of larger messages that
are resonating with the Republican electorate this year more than the
policy details.

HUDSON: That larger picture obviously is the economy. But let’s
drill down to energy because in the last week, it really has become the
campaign issue, not only for Republicans but President Obama also has made
it an issue already. Could energy, specifically energy overtake the broad
economy as the political issue?

SPARKS: If we get down to talking about gasoline prices, it very well
could because that certainly is a pocketbook issue. Everybody knows how
much it takes out of your wallet to put gas in your car. It may be a little
bit much to suggest as Mr. Santorum did that it was actually the cause of
the market meltdown in 2008. But certainly, when we see rising gas prices
that reach a certain level, the president will have to deal with it and the
Republicans will do everything they can to try and take advantage of it.

HUDSON: We’ll see if we get $4 gasoline before super Tuesday next
week. Willis, we appreciate the context and the analysis. We’ve got Willis
Sparks along with us. He’s with EurAsia Group.

GHARIB: Here’s another intriguing development in the markets today.
Gold is now outshining platinum. Prices for the yellow metal have surpassed
those of platinum, something that is historically unusual. Erika Miller
takes a closer look at what’s behind this switch and what it says about the
outlook for the economy.

MILLER: Platinum is often called the rich man’s gold and the most
precious of precious metals. Platinum is more rare and more expensive to
mine than gold, so it normally trades at a higher price to its neighbor on
the periodic table. But starting last September, that relationship turned
upside down. Analysts say the reversal reflects gold’s growing investment

That has lifted the overall demand for gold specifically as an investment,
but also as a reserve asset for central banks and governments. And that, I
think is what finally culminated in at last, the switch from gold trading
at a discount, to platinum, to gold trading at a premium.

MILLER: The fact that gold is delivering shinier returns than
platinum may be a negative economic omen. Both metals are used in jewelry,
but platinum has far more industrial uses. In fact, about half of the
world’s platinum is used for catalytic converters. That’s the part of the
car that removes pollutants from exhaust.

a consumable material, so it’s supply and demand that really drives the
need for platinum, whereas gold is used as more of a hedging instrument.

MILLER: Many analysts think gold will continue to hold the upper
hand. A recent survey of metals forecasters predicts gold will average
$1,766 an ounce this year versus $1,624 for platinum. Part of the reason
some analysts are more bullish on gold is ease of investment, thanks to the
growing number of gold exchange-traded funds.

MILLING-STANLEY: It has been very, very important. It made gold
available as an accessible investment to a whole new universe of investors
who hadn’t considered gold any way at all previously.

MILLER: So what would it take for platinum to regain its edge over
gold? One possibility is a disruption in supplies. Another is a big
surge in vehicle production. Erika Miller, NIGHTLY BUSIINESS REPORT, New

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