Adam Davidson

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There is a global race on, an odd one. Countries are competing to be the cheapest source of goods. We're not talking about low-wage countries, like China or Bangladesh. No. This is a battle between Japan and Germany and the United States. And today, the Bureau of Labor Statistics revealed the latest scores in this race.

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And a record close. That's what we've been hearing both today and yesterday as the Dow Jones industrial average climbs upwards.

BLOCK: That may be an ear-grabbing headline after a recession and years of unimpressive growth. But we begin this hour with a different take from Adam Davidson of NPR's Planet Money. Hey, Adam.

ADAM DAVIDSON, BYLINE: Hey, Melissa.

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We're going to dig into some of those policy differences now between Republicans and Democrats. When it comes to reducing the deficit, both sides insist it's time for compromise. But President Obama says tax cuts for the richest Americans must end.

PRESIDENT BARACK OBAMA: When it comes to the top two percent, what I'm not going to do is to extend further a tax cut for folks who don't need it.

Peter Frew is one of a tiny number of people left in the United States who can — entirely on his own, using almost no machinery — make a classic bespoke suit. He can measure you, draw a pattern, cut the fabric and then hand-stitch a suit designed to fit your body perfectly.

Frew spent more than a decade as an apprentice for a remarkable tailor in his native Jamaica. He now sells his suits for about $4,000. Since New York is filled with very rich people who see their suits as an essential uniform, Frew has all the orders he can handle.

Every day at 11 a.m., a few big banks tell the British Bankers' Association what it costs them to borrow. Out of that comes LIBOR — the London Interbank Offered Rate, a dull but vital interest rate that underpins trillions of dollars of transactions globally, from home mortgages and personal credit cards to major corporate lending.

For more, see our video, Inside The Matzo Factory, and see Adam Davdson's latest NYT Magazine column

The matzo business may be the most heavily regulated business in the world.

Why are some nations rich and others poor? In a new book called Why Nations Fail, a pair of economists argue that a lot comes down to politics.

To research the book, the authors scoured the world for populations and geographic areas that are identical in all respects save one: they're on different sides of a border.

Turn on the news on any given day, and you're likely to hear about the Dow Jones industrial average. It is the most frequently checked, and cited, proxy of U.S. economic health. But a lot of people — maybe most — don't even know what it is. It's just the stock prices of 30 big companies, summed up and roughly averaged. That's it.

And what does the daily movement of this number have to do with the lives of most Americans? Not much.

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