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February 24th, 2009
05:00 PM ET

Capitol Hill more trusted than Wall Street?

From CNN's Jack Cafferty:

Here's a sign of just how bad things are: when it comes to the economy, more Americans trust our politicians than our business leaders.

Capitol Hill more trusted than Wall Street?

Traders on the floor of the New York Stock Exchange. More Americans trust politicians than business leaders on economic matters.

A new CNN/Opinion Research Corporation Poll asks people how confident they are that the following institutions will make the right economic decisions.

30% say they're confident in Wall Street, 28% feel that way about bankers and financial executives, and 26% are confident in the auto executives.

Compare that to a whopping 75% who express confidence in President Obama on economic issues, 66% who back Democrats in Congress to make the right calls, and 53% who feel the same about Congressional Republicans.

In light of that, it's no surprise that most people surveyed are opposed to government bailouts for banks and auto companies, while more actually favor government assistance to homeowners who can't pay their mortgages and government influence to lower health care costs.

This is probably uncharted territory for many of those in Washington. The fact that more Americans have confidence in government to get us out of our collective financial nightmare frightens me.

Here’s my question to you: What does it mean when politicians are more trusted than business leaders on economic matters?

Interested to know which ones made it on air?

FULL POST


Filed under: US Congress • US Economy
February 23rd, 2009
04:41 PM ET

Worse than the Great Depression?

From CNN's Jack Cafferty:

The financial crisis that's consuming the U.S. along with the rest of the world is worse than the Great Depression, and more along the lines of the collapse of the Soviet Union.

Worse than the Great Depression?

Three boys play marbles in a dirt alley, 1930s. Financier George Soros says the current financial crisis is worse than the Great Depression.

That's according to renowned billionaire investor George Soros.

He points to the September collapse of Lehman Brothers as a turning point. Said Soros, "The economy went into freefall and is still falling and we don't know where the bottom will be until we get there and there's no sign that we are anywhere near a bottom."

Soros describes the collapsed financial system as still being on "life support" since that point. He says the current turmoil can be traced back to the financial deregulation of the 1980s, and that it marks the end of the free-market model.

There's more. Soros believes the Obama administration's plan to buy bad assets from banks won't be enough to get our financial institutions to start lending again. Instead – he suggests injecting capital directly into the banks.

Meanwhile – it looks like most Americans sense we're headed to a pretty dangerous place. A new CNN/Opinion Research Corporation poll shows that 73 percent of those surveyed are "scared" about the way things are going in the country today. That's up 6 points from October.

Here’s my question to you: What does it mean when one top investor says the economic crisis is worse than the Great Depression?

Interested to know which ones made it on air?

FULL POST


Filed under: US Economy
February 23rd, 2009
12:41 PM ET

Realistic to halve the deficit by 2013?

From CNN's Jack Cafferty:

President Obama is vowing to cut the budget deficit in half by the end of his first term.

Realistic to halve the deficit by 2013?

President Obama vowed to halve the deficit at the White House today.

The president says the deficit needs to be brought under control, adding that the country "cannot and will not sustain deficits like this without end."

The White House says it's inherited a $1.3 trillion dollar deficit, and that Mr. Obama's budget will bring the deficit to $533 billion by 2013. And the cow jumped over the moon.

Some private analysts estimate that this year's deficit could soar to more than $1.5 trillion when you take into account the cost of the recently-passed stimulus package.

Administration officials say they plan to cut the deficit by winding down the war in Iraq and by raising taxes on those who make more than $250,000 a year. The president also says he'd like to bring back a pay-as-you-go policy on federal spending programs, to get rid of programs that don't work and end tax breaks for companies that send jobs overseas.

Here's the problem - it's all well and good for President Obama to talk about reducing the deficit, but that money could end up being just a drop in the bucket compared to the trillions of taxpayer dollars we're spending on economic stimulus packages, bailing out the banks, auto companies, you name it.

Here’s my question to you: How realistic is it for President Obama to plan to halve the deficit by the end of his first term?


Filed under: US Economy
February 20th, 2009
06:00 PM ET

What are the signs of bailout fatigue?

From CNN's Jack Cafferty:

Have you noticed it's become nearly impossible to wake up in the morning without hearing about another big-time bailout by the federal government?

What are the signs of bailout fatigue?

The stock market takes a hit every time the government announces a new initiative.

President Obama recently signed the almost $790 billion economic stimulus bill. His Treasury Secretary Tim Geithner unveiled the bank bailout plan that could mean another trillion dollars spent on bailing out our nation's drowning financial institutions. That's on top of the $700 billion financial bailout package from last fall.

Then there are the auto companies – they were back in Washington this week wanting another $21.6 billion of your money, on top of the more than $17 billion they got last fall. Then there's the administration's $275 billion plan to help up to 9 million struggling homeowners refinance or modify their mortgages so they don't lose their homes.

If these dizzying numbers aren't enough to give you a headache, how about the fact that the stock market keeps tanking every time the government announces a new initiative? Yesterday the Dow closed at its lowest level in more than 6 years and today it took another big hit. Investors are nervous that the government won't be able to right our economic ship, despite the trillions of dollars it's pouring in.

All of which has probably left millions of Americans either pulling their hair out or reaching for the Jack Daniels.

Here’s my question to you: What are the signs you’re suffering from bailout fatigue?

Interested to know which ones made it on air?

FULL POST


Filed under: Bailout • US Economy
February 18th, 2009
05:58 PM ET

Should U.S. banks be nationalized?

From CNN's Jack Cafferty

The idea of nationalizing struggling U.S. banks is starting to pick up steam, even among some Republicans.

Should U.S. banks be nationalized?

Some in Congress favor nationalizing the banking system.

Senator Lindsey Graham tells the Financial Times that many of his colleagues, including Senator John McCain, agree that nationalization of some banks should be "on the table." He says many people think it just doesn't make sense to keep throwing good money after bad when it comes to institutions like Citibank and Bank of America. Graham says people shouldn't get caught up on the word "nationalization" that we can't keep funding what he calls "zombie" banks without the public taking control.

Several people, including President Obama himself, have pointed out that's what the Japanese did, and they never really got credit flowing. The president has said he's leaning more toward the "Swedish model" – where they nationalized the banks and then auctioned them off once they were cleaned up.

The administration is opposed to nationalization in principle. Treasury Secretary Geithner has said "governments are terrible managers of bad assets", but the way things are going there may be no choice.

In fact, we are already on the road to nationalization when you consider how much money the government has already dumped into this nation's banks. According to the Treasury Department - about 400 banks in 47 states have gotten government aid since the program started in October.

And when the banks begin to report first quarter earnings in a few weeks, the decision may be made for us.

Here’s my question to you: Should the U.S. to nationalize its banks?

Interested to know which ones made it on air?

FULL POST


Filed under: US Economy
February 18th, 2009
05:00 PM ET

More money for GM and Chrysler?

From CNN's Jack Cafferty:

Two of the Big Three American automakers are holding out their hands again for more of your taxpayer dollars.

More money for GM and Chrysler?

Chrysler will discontinue the Dodge Durango, PT Cruiser and Chrysler Aspen.

General Motors and Chrysler say they need another $21.6 billion to stay afloat, this is in addition to the more than $17 billion they received a couple months ago. The companies have both put out plans for how they'll restructure in order to survive. I thought they were supposed to have already done that.

G.M. says it will cut 47,000 more workers, close 5 more plants in North America and cut half of its brands - Saturn, Pontiac, Hummer and Saab - leaving them with only Chevrolet, Buick, Cadillac and GMC. The company also says it's making headway in its talks with the United Auto Workers union and bondholders to find more ways to cut costs. Chrysler says it will cut another 3,000 jobs and discontinue 3 models - the Dodge Durango, PT Cruiser and Chrysler Aspen.

Meanwhile, this all puts the Obama administration in a tricky spot. Either they give the money and hope that the car companies don't come back asking for more in a few months. Or they say "no", which will probably force GM and Chrysler to declare bankruptcy. Both companies pointed out that the cost of a bankruptcy reorganization would be a whole lot steeper than their most recent loan requests.

The White House says it's reviewing the automakers' proposals and insists that "more will be required" from all parties involved to turn around their prospects.

The third Detroit company – Ford Motors – posted its biggest loss ever in the fourth quarter, but insists it can survive without government loans.

Here’s my question to you: Should General Motors and Chrysler be given additional taxpayer money?

Interested to know which ones made it on air?

FULL POST


Filed under: US Economy
February 17th, 2009
06:00 PM ET

Worried about losing your job?

From CNN's Jack Cafferty:

The U.S. economy is hemorrhaging jobs. Almost 2 million have been lost in the last three months, but it turns out most Americans are not worried about losing their job.

Worried about losing your job?

Job seekers fill out applications at a California job fair.

A new USA Today-Gallup poll shows 68% of workers polled say they haven't been laid off in the last 6 months and aren't worried about getting a pink slip in the near future. Two percent say they have lost their job in that time - while 29% are worried about that happening. Also, 41% say they have family or close friends laid off in the last 6 months.

Meanwhile – there are some who suggest there can be an upside to losing your job. The Bishop of London says it actually might be a blessing in disguise. "Sometimes, people seem to be relieved to get off the treadmill and to be given an opportunity to reconsider what they really want out of life," said the bishop. He describes the so-called "crackberry" culture as being dangerously addictive.

The online magazine Mental Floss writes about 8 successful people who were actually grateful when they lost their jobs - including Jerry Seinfeld, Michael Bloomberg, Robert Redford and Bill Bellichick. After getting the boot from one gig, each of these folks was inspired to reach even higher levels of success.

Still, may not be totally convincing for the millions of Americans out of work and struggling to make ends meet.

Here’s my question to you: How concerned are you about losing your job?

Interested to know which ones made it on air?

FULL POST


Filed under: US Economy
February 17th, 2009
01:36 PM ET

Stimulus bill too little too late?

Stimulus bill too little too late?

It is not clear if the almost $790 billion in the stimulus bill will be enough to do the trick. (PHOTO CREDIT: MARK RALSTON/AFP/GETTY IMAGES)

From CNN's Jack Cafferty:

President Obama may have signed that massive stimulus bill into law today, but the scary part is it's not clear if the almost $790 billion in government spending will be enough to do the trick.

The stock market tanked this morning, dropping 230 points in the first 90 minutes of trading. The stock market is now close to its lowest level in ten years. Investors are nervous that the stimulus plan won't have the kind of impact it needs to begin to turn the economy around. Wall Street also gave a thumbs down to Treasury Secretary Geithner's banking plan last week.

Then there's Detroit. GM and Chrysler are set to tell the government today how they plan to stay afloat, they've already gotten more than $17 billion in government loans. If they can't prove how they'll survive in the future, they may not get any more.

Some states are treading water even before the stimulus plan has a chance to trickle down to them. If California lawmakers don't pass a budget soon up to 20,000 state workers could lose their jobs. The state faces a $42 billion deficit and lawmakers can't seem to agree on a budget, particularly on more than $14 billion in tax increases. California may also halt nearly 300 state funded public works projects. That would mean more layoffs.

In Kansas, the state government has run out of money to pay its bills. They've suspended income tax refunds and may not be able to pay employees on time. Officials say the state might also have to delay payments to public schools and to doctors who provide care to the needy under Medicaid.

Here’s my question to you: Is the stimulus bill too little too late?

Interested to know which ones made it on air?

FULL POST


Filed under: Stimulus Plan • US Economy
February 12th, 2009
06:00 PM ET

Would you spend extra money or save it?

ALT TEXT

Are you a spender or a saver? (PHOTO CREDIT: GETTY IMAGES)

From CNN's Jack Cafferty:

With the economy in a tailspin, Americans are saving more. And while that's a good thing for Americans, believe it or not that's a bad thing for the economy.

We have gone from a negative savings rate a year ago to saving 3-point-6 percent of our income in December. That translates to 36 dollars saved for every one-thousand dollars of after tax income.

Although our current savings rate isn't a record high and is still lower than other countries, it's a lot higher than it's been. And therein lies the problem. Our economy relies on consumer spending for its mojo. Consumers drive two-thirds of our economy. If Americans aren't opening their wallets, the economy isn't going anywhere.

But as more people are laid off and family budgets are tightened, many understandably want to save more. Also, more Americans are saving more as they're seeing their access to credit cut off.

This is all a lot different from what we saw before the bottom fell out of the economy: the savings rate was at historic lows from 2005 through early in 2008, occasionally even falling below zero. Those were the days when a strong stock market and skyrocketing real estate prices led many to believe they had an endless supply of money- or certainly an endless supply of credit.

But those days are over, and we suddenly find ourselves in a rather strange position. Although it's better for your bottom line to save as much as you can, doing that might just prolong our economic woes.

Here’s my question to you: If you come into extra money, will you spend it or save it?

Interested to know which ones made it on air?

FULL POST


Filed under: US Economy
February 12th, 2009
05:00 PM ET

Change immigration policy in light of job losses?

From CNN's Jack Cafferty:

With the U.S. economy hemorrhaging jobs, it might be time to reconsider this country's immigration policy.

Change immigration policy in light of job losses?

Immigrants arriving at Ellis Island in 1905. Is it time to change our immigration policy?

Just last month our economy lost nearly 600,000 jobs, hitting an unemployment rate of 7.6%. Since December 2007 the economy has shed 3.6 million jobs, with almost half of those losses occurring in the last 3 months alone.

Meanwhile, there are millions and millions of legal and illegal immigrants who have jobs in this country. These job losses also come at a time when President Obama is under increasing pressure from Hispanic groups, who helped get him elected, to loosen up on the more aggressive immigration policies of the Bush administration. They're calling on the new president to push for comprehensive reform that would balance law enforcement with new legal avenues to citizenship.

But some might wonder if now is the right time to make it easier for more people to get into this country when millions of Americans are struggling to find work. Remember when all we heard was that illegal aliens do the work Americans are unwilling to do? I wonder if that's still the case today.

Others insist that this is the wrong time to close immigrants out. Tom Friedman writes in the New York Times about the importance of opening the U.S. economy to a smart and energetic immigrant workforce. Friedman says protectionism didn't cause the Great Depression but did helped make it "great". Writes Friedman, "When the best brains in the world are on sale, you don't shut them out. You open your doors wider. We need to attack this financial crisis with green cards not just greenbacks."

Here’s my question to you: Should the government change its immigration policy in light of the tremendous loss of American jobs?

Interested to know which ones made it on air?

FULL POST


Filed under: Immigration • US Economy
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