By Anonymous
NEIL CAVUTO, FBN HOST: Now, on CAVUTO... (BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Just can't keep spending good money after bad.
(END VIDEO CLIP)
CAVUTO: What's wrong with this picture? The president talks about cutting waste, ready to sign a spending bill loaded with waste. Today, after his Treasury Secretary talks about going after tax cheats, let's just say loaded with chutzpah.
Staying on the message or mixing the message? Then they paid their bills, meet their payment and never bought more home than they could afford. Now they are about to bail out folks who did none of that and these homeowners isn't happy but they are here and only here.
And when group thing turns into group stink. When Gordon Brown lectured Congress to do today, why some in that audience should have kicked him back to England right then and there today. Here, today, now.
All right. Just for the record, three things you will hear from me. One, eat your salad. Two, try the LifeCycle. Three, put down the Ring Ding. Three things you will hear from Washington. One, show fiscal restraint. Two, spend your money wisely. Three, don't overpay. Don't buy it. Don't buy any of it. Me talking personal responsibility. Washington talking any responsibility. Welcome everybody, I'm Neil Cavuto and here is the deal.
Chutzpah that is all I can it. The nerve to say the damnest things when you're not doing a damn thing to show you mean any of it. President Obama bowing to cut wasteful spending today ahead of signing off on a new measure loaded with 9,000 cases of it which had two members of his own party saying they had enough of it. Veto that bill. He won't. Here's why?
It is easier to talk than walk the walk. Just like it is easier for the president's treasury secretary to lecture the rich for shielding money from the tax man despite his own publicized troubles with the tax man. To shear that rage with of all people, Charlie Wrangle, a man whose tax dodging takes on near Cirque du Soleil acrobatic feat.
I could go on, but why bother? Why bother talking about an administration lecturing personal responsibility but bailing out those who have shown none of it. Banks that recklessly lent. Customers who recklessly borrowed. Money for those who didn't do anything you said, nothing for those who did. You know republicans lost Congress doing this and they should have. Wall Street just lost confidence in all of this and all of them.
I do find it ironic today that Wall Street bounced back having nothing to do with what we are doing here but largely with China could be doing over there. Rebuilding its economy just like it promised with stimulus done maybe the way it should. Just like politicians here are promising, but if only they could. Like I said, hypocrisy has a way of catching up with you. Whether it is me eventually having to give up on my dream of running ballet fitness center commercials, or party eventually having to surrender its majority because of those fiscal responsibility speeches.
A pox on both parties, Houses, fair and balanced, let's ask republican strategists David Johnson and Fox News political analyst Kirsten Powers. Kirsten, it does send a wrong message, you know, when you have these two, you know, moderate senators in your party saying yes, cool it, cool it, we're not doing this right.
KIRSTEN POWERS, FOX NEWS POLITICAL ANALYST: Well, which party are you talking about? Are you talking about the earmarks or I mean, there's a lot of different things going on?
CAVUTO: Well, they are talking about waste. Stop the waste, this particular spending measure is chock-full of it, veto it.
POWERS: Well, I do think - I mean, look, Obama did say he will wasn't going to have earmarks and so I think there's a problem when he comes out and he's going to sign a bill that has earmarks in it and it has a lot of earmarks in it. And I think people rightly should be upset about that. Their explanation for it is this budget was pretty much already done. They want to get it, you know, through as possible.
CAVUTO: Right.
POWERS: You know. You can take it or not. In terms of the actual earmarks, I actually looked at some of the stuff and I don't think it is really that problematic. I mean, we're going to spend money on certain things and just because something has earmarks doesn't mean it's pork. It just means money is being spent on things that need to be done. So, maybe that needs to be communicated a little more because earmarks -
CAVUTO: You may be right but it is what it is. You know, during the campaign, the president to be, you know, David, made a big deal of it. John McCain made a big deal of it, on this show yesterday saying we got to put a stop to it. Senators Bayh and Feingold saying we got to stop it. You're right, earmarks as Kirsten pointed out, are in the eyes of the beholder, but there's a lot more in the eyes of the beholder that is undebatable here.
And I am wondering whether if Washington ever changes its ways and I want to stress since I'm you know I'm delving on democrats, stop dumping on your party too. 40 percent of this nonsense is republican nonsense. It never changes.
DAVID JOHNSON, STRATEGIC VISION CO. FOUNDER: No, it really doesn't. That is one of the reasons why the republican party lost control of Congress in 2006 and the White House in 2008. But the problem is the democrats had 12 years to learn from their mistakes and instead they come back to power very much like the Bourbons in France. They learned nothing and they forgot nothing. The Republicans were punished and now we got the message and we are stressing that fiscal responsibility and the people are rightly fed up because the democrats came in promising change.
CAVUTO: Dave, you know, they don't believe you, Dave. I mean I think it would be great if you were sort of those one of those recovering alcoholics at an AA meeting who just said look I'm a spendaholic and I'm trying to reform, I admit it. Take it from me. You go down this path that's not good, you don't even remember what you spent money on, but you are not doing that. A lot in the republican party are just now preaching this great spending morality when everyone knows you didn't exercise it.
JOHNSON: No, we didn't and as I said that is why we lost control of Congress. That is why we got rid of the leadership and now we're seeing that fiscal responsibility and we do have to earn the public's trust. But I'll tell you, the democratic party right now is a party divided among itself and it's helping the republicans more and more when we have people like Russ Feingold and Evan Bayh getting criticized for the broken promises of the democratic Congress.
CAVUTO: I don't know but to be fair, because the democrats seemed to be, these guys notwithstanding, more in lockstep than republicans -
POWERS: Yes, they are.
CAVUTO: ... lately with their own little sideshows.
POWERS: Yes.
CAVUTO: But having said that -
JOHNSON: Not really.
(CROSSTALK)
JOHNSON: Barack Obama and the Nancy Pelosi part -
CAVUTO: You're right. We can go down that tangent, but it's my show and we are not going to. I'm kidding. I'm kidding. But let me ask you, Kirsten, I always thought with Barack Obama because I do accept it at face value that he is trying to be a pragmatic individual. He is trying to do the right thing. He's trying to change the tone in Washington and then he does the stuff like this. And I'm thinking, you know what, you're no different than the people you blasted.
POWERS: Yes, actually - but I think that you're right about what you were just saying. I do think at the end of the day both parties are pretty much the same when it comes to this kind of stuff.
And I think that Americans have a lot to be disgusted about and you know the other guest was talking about whether republicans have learned their lessons. Well this isn't the first time republicans have lost Congress, even in my adult life. So I mean, it just goes back and forth between the democrats and republicans.
CAVUTO: Well do you think democrats doing this, is in the risk of losing it too?
POWERS: Well, I think, actually the republicans are in a more precarious position frankly just because Barack Obama is so popular that I think people are in a bad place get behind him, help support him and they're coming out and gleefully saying or we're just going to say no to everything even if they are being sincere about it.
CAVUTO: Yes.
POWERS: I don't know that it plays that well. It sort of plays is politics.
CAVUTO: Well, what do you make of that, David, a lot of people and we're going to get on this more on the show, they like this president, he is a new president. He is keeping pretty much with the numbers. The new president is very popular. And it does extend to a lot of the things that he's proposing and republicans fairly or not are just looking like, you know, whining, bitching critics.
JOHNSON: The are. A lot of people - there is a disconnect but what is really interesting is if you want to talk a similarity, it seems the similarity is very much like it was in the 1980s when democrats could not understand how Ronald Reagan could be so popular but a lot of the specifics of his policies weren't and we're seeing the same with Barack Obama. Personally, he is very popular. People do want him to succeed but when we get into the specifics that's when he begins ringing into trouble in the democratic party and I'll tell you the republican party never won, had to re-secure its base and that is by saying no to a lot of these programs that are being proposed. CAVUTO: All right. Good luck on the above on both parties. I want to thank you both for joining us.
POWERS: Thank you.
JOHNSON: Thank you.
CAVUTO: Well you know, still Americans, a good majority of them in fact, as Kirsten pointed out, are so finds this president on the right track that for now they are not tracking all of those inconsistencies. The latest "Wall Street Journal" pulse show support for the new president, still very high, support for his efforts to turn the economy around, surprisingly high too. But other presidents have enjoyed similarly strong support and other presidents have seen what happens when they think that support last forever. It does not.
With me now, presidential historian Richard Shenkman. Richard, nevertheless, this president has the wind at his back, how long do you suspect he will?
RICHARD SHENKMAN, PRESIDENTIAL HISTORIAN: Well if you look at the first president who inherited bad times, Jimmy Carter, Ronald Reagan, it depends. That's the answer. Jimmy Carter, the honeymoon lasted about four months and then the American people said they didn't have confidence in the way he was handling the economy.
For Ronald Reagan, they gave him a full year and then they started dumping on him. Barack Obama, we will have to see.
CAVUTO: You know, Richard, it's interesting in this puzzle, you can't reveal but we will keep some of it up a little bit and go back and forth, so folks can comprehend it. But there sometimes can be a disconnect, right? Between the personal property of a president, let's say, and some of the very tough medicine or controversial medicine he is proposing, right? Ronald Reagan had a disconnect between his own personal charm and of course let's say at that time building up the military which didn't have nearly the support. Bill Clinton, very popular early on, not nearly as much as this president is now - but his deficit reduction package not nearly so popular. So how does that ever get reconciled, or does it?
SHENKMAN: Well, if you're going to be president of the United States, you certainly prefer to be likable than not being likable.
CAVUTO: That's true.
SHENKMAN: Richard Nixon's problem was he was not very likable and when he'd run into trouble that public support often disappeared very quickly. With the presidents who were going into office likable, Eisenhower, Kennedy, Reagan, a little bit but not all that, not as much with Eisenhower and Kennedy. That was a huge advantage and it carried them through bad times.
With Barack Obama this being likable, it's a huge factor in his favor but of course, he wants to frontload right now, while he is at really the height of his power during this big honeymoon, during the first 100 days. He wants to frontload a lot of the things that he wants to get done. Because -
CAVUTO: Right, use that honeymoon now. use the honeymoon but you know I wonder -- you're the historian but I have a number of crackpot historical theories, so I'll defer to you, the expert. In my opinion -
SHENKMAN: All right. Good. Good. Sure.
CAVUTO: I think Richard Nixon was ultimately forced to resign, Richard, and he would have survived had the economy and the economy not been so bad. Bill Clinton had a very different kind of scandal on his hands but because the economy was so strong even Wall Street didn't want to see the guy go. So he stayed on. So I'm of the view that when things are good, you know, the president has sort of a longer leash. When things are bad, a shorter leash. I mean, Jimmy Carter comes to mind, he got a very lousy environment that most people thought couldn't get worse and low and behold, it did. So it's a long (inaudible) ask you, how long does this president have, you think?
SHENKMAN: Well, here's the thing, four years from now either this recession will have been solved and we will be well on our way to prosperity, or not. And if we are, he will get reelected probably. If not, it doesn't matter how likable he is, he is not going to get re- elected.
Now we do have the experience of Franklin Roosevelt during the Great Depression. He comes in and his 25 percent unemployment, four years later it's still high unemployment of 14 percent but you know what, the American people appreciate it wasn't 25 percent anymore and they re-elected him overwhelmingly. In other words -
CAVUTO: Right, if things are getting better or optimistic.
SHENKMAN: Exactly. That's -
CAVUTO: Most Americans think, I don't know the exact numbers, I apologize that we are on the right track. Whereas it's the opposite of his predecessor. How far does that carry us?
SHENKMAN: Well, that is the chief measure that Gallup has been using for half a century or more and is a very good way to kind of it get into the heads of the American people. If the American people are unhappy with the direction of the country, they almost always blame that on the president. You know, Americans don't follow politics very closely but here's what they do get. They get home runs and they get strikeouts.
CAVUTO: And if they perceived that the countries basically like a ballplayer who is striking out at the plate, they're going to punish the president. So, let's say the president and some of his prescriptions are picked apart as they have been. There's a lot of waste. A lot of pork, a lot of little weird things going on and he is saying it's is the collective stuff I'm telling you that is good, and the American people so far in this polar buying it. If it keeps on getting picked apart, that's in doubt, isn't it?
SHENKMAN: Well, it's going to depend on whether or not he can keep on racking up victories. He has had one big victory so far in the last month and that was a stimulus bill. If he has a steady supply of victories, he will carry public opinion with him for a long time. jimmy Carter's problem was he wasn't racking up victories. He was racking up failure after failure.
CAVUTO: And his own party turned on him. Richard, Jimmy Carter's party turned on him, let's hope Barack Obama does not. But I'm wondering whether these two senators bolting today as a sign that it could.
SHENKMAN: Well, it's a little bit of a problem. We'll have to wait and see if it develops any momentum. One thing that I have talked about and I thought you were going to talk about was whether or not a president can be a polarizing figure or not, and what kind of a factor that is.
CAVUTO: Interesting.
SHENKMAN: You know, it's kind of interesting for me as I was going back and reviewing the last half-century of public opinion polling numbers, what I found was that the least polarizing president over the last half- century, you won't believe it, it was Carter and Lyndon Johnson.
CAVUTO: Wow. All right.
SHENKMAN: And Eisenhower.
CAVUTO: OK. Enough said. I want to get you back, my friend. You did a great job. Thanks. We'll have more after this.
(COMMERCIAL BREAK)
CAVUTO: Well you know, over your head, Uncle Sam head over heels to help. The administration committed to a mortgage rescue plan that would rework up to nine million mortgages largely for folks who bit off more borrowing than they could chew and now they will be chewing on, well, our money to make it happen, which doesn't suit these two homeowners well at all. They are Tim Cranston in Denver and Robin Staudt in Raleigh, North Carolina.
Robin, to you first. What do you think about this, a lot of folks are going to be getting a lot of help, you are not.
ROBIN STAUDT, ANGRY HOMEOWNER: No, I am not getting help and I will tell, I don't want help. I'm a freedom works activist and we are a national organization, but also our members are all members of values and we take responsibility for our actions. One of the things I'm so angry about is that irresponsible behavior on the part of our legislator, our Congress, our banking industry and mortgage holders have left us in this mess.
CAVUTO: All right. Now, Tim, Robin is being modest because unperceived circumstances hurt her. She lost a job. It's no fault of her own and the argument is that a lot of folks are in this duress. Lost their jobs, through no fault of their own, they need help. Now, Robin might not want it but they do. They think they deserve it, what you think?
TIM CRANSTON, ANDRY HOMEOWNER: Well there are 50 million of us who have been paying on time for years and we are talking about a problem that's going to be solved by $275 billion crisis package. Who is going to end up paying for that but the very people who have been responsible in the first place. Those who are under water right now, there's a lot of opportunities for them.
First of all, there is no shame in renting. I rented almost half of my adult life. And there's nothing wrong with that. If you can't afford a home it's time to go find other options. And believe me, Neil, there are millions of other options out there today.
CAVUTO: You know, Robin, you probably heard the argument for helping these folks out is that if we don't, they're going to hurt folks like you and Tim and the value of your homes which are probably already been hit are going to get hit harder. What do you think when you hear that argument?
STAUDT: It isn't just the fact that we're going to get hit harder. It hurts everybody who owns a home, anyone who owns property whatsoever. We're keeping our markets because of these bailout, artificially inflated. And it's impacting every level. It's impacting the building industry. Our local governments are looking at it as a revenue stream that if they keep these homes and businesses artificially inflated they can then in turn raise more revenue but it is not going to happen. People don't have it. CAVUTO: It's an interesting take. In other words, Tim she is saying and I think you concur that you let the markets do their thing, painful as it might be, and they might be. That thing could be another 20, 30 percent fall from where we are but if that is the equilibrium, that is the equilibrium the government cant mask or gloss over.
CRANSTON: We've already seen our IRAs and everything else in the stock market and the bond markets hit by over 53 percent. We should let the markets clear, the more government, the more federal government has gotten involved, the worse it has gotten. It happened during the Great Depression. It happened until Reagan started his tax policies in the 1980s, it's going to hurt again. The more you have people like Barney Frank and Chris Dodd who have already proven that they can't solve the problems for us, they exacerbate the problems. We're just going to get into more mess and the piper's going to be paid later in a far worse situation that we have today unless we let the markets clear.
CAVUTO: Robin, there are a lot of folks saying that we're rewarding the very folks who got it over their heads, who bought more home than they could afford. Sign on the no doc loans when they didn't have the document income to even remotely prove that they could pay. And now they're getting helped. Are you bitter?
STAUDT: Indeed.
I'm not bitter. I just want the government to get out of my life. To get out of the average mortgage holders life. Let us pay our bills. Let the markets work. There are times markets go down and times markets go up but as long as government keeps their hand in, they artificially manipulate and impact us all in a very negative way.
CAVUTO: Well, Robin and Tim , we don't often hear your viewpoints, in the general media, we thought fair and balance, people should. Thank you both. Good luck.
CRANSTON: Well, Neil, we who are about to die salute you.
CAVUTO: Well I hope that doesn't happen. We'll have more after this.
(COMMERCIAL BREAK)
CAVUTO: So why talked a bad budget when you can have good fun taking a bad soap opera going on in the other party? House minority leader John Boehner telling me earlier that the whole Rush Limbaugh dust-up is a White House creation intended to be a big distraction. So no one pays attention to the president's lousy policies.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER, HOUSE MINORITY LEADER: This whole thing beholden was created by the White house to be a distraction from his policies in the budget whether it's a stimulus package, the omnibus package, the 9000 earmarks, or his plan to raise taxes on all Americans and have the largest increase on spending that we have ever seen. And so I think the American people are looking for both parties to work together, to solve the problems that they are dealing with everyday and that is what the White House ought to be focused on and that is what we are focused on, up here on Capitol Hill.
CAVUTO: Without belaboring the point then, do you think that this stuff of the original list agreement between Michael Steele and Rush Limbaugh complicated that pitch?
BOEHNER: Well, listen, again, it's just part of what became an ongoing distraction. It is time to get back to do the real work, the American people sent us here to deal with. Listen, Americans, and I believe all of us, want America to succeed. We want to get our economy rolling again. We have disagreements over the presidents policies because frankly I'm afraid they are not going to work and I want to make sure that American families and small businesses, the real engines of our economy, get back up out of the dust and put people back to work.
I am just afraid that all of these policies we're seeing out of the administration won't accomplish that.
CAVUTO: Well that's kind of have been Rush's messages, you know, and I spoke to John McCain about this yesterday, Congressman. He said, there might be somewhat of a point there. This is from yesterday.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: I think Mr. Limbaugh speaks for a number of republicans. I think Governor Pawlenty and Jindal and Palin and others too, and Charlie Crist. Now I think a lot of us speak - I think I speak a little for the republican party. Let's all speak for the things that we value and the things we believe in.
(END VIDEO CLIP)
CAVUTO: I guess the argument now though, congressman, is republicans are not clear where they stand. I mean, there is more and sniping these days among each other than there is another guy or such is the perception. What do you say?
BOEHNER: Neil, Neil, listen. The White House started this the day after the president was sworn in. They started this little skirmish to draw attention away from what was going on here in Washington and I'm not going to go into some debate with the White House about why they did it. The American people want us to get the economy moving and that is what I'm focused in on everyday and that's what republicans on Capitol Hill ought to be working with our democratic colleagues who have policies that are sensible, that will put Americans back to work and get the economy moving and keep the stock market going up like it was today.
CAVUTO: All right. Now, what is odd about the stock market run up today, Congressman is that a lot to with stimulus, not here but in China. But a response to the fact that China might be getting it but we do not because a lot of China stimulus is built on tax cuts and that sort of thing. What do you make of just that?
BOEHNER: Well as you're well aware, when the president passes $800 billion stimulus plan, that in my view will do nothing but grow the size of government, republicans had a plan to say hey, let's let American families and small businesses keep more of what they earn. Our plan would cost half as much as the administration's plan and create twice as many jobs.
At the end of the day, it's the American small business person, it's the American family that are going to get those economy going again. Not growing the size of government.
CAVUTO: But you're also right in making all sure tax cuts are key thing going forward and does not appear that they will be. There's already a move not only to raise taxes on the upper income but if a number of big states have their way, New York, New Jersey, Connecticut, California, among those considering a tax hike on top of that for the wealthy on their state which could bring the top rate over 50 percent.
You have argued it is just a matter of time before others feel the same pinch. But it doesn't seem to be registering, Congressman, in these poll numbers. And you're right, they are murky and unreliable but they are consistent enough to say that Americans at this point don't seem to care about that. What do you make of that.
BOEHNER: Well, listen, you know, it won't work. I know it won't work. And part of my job is to help the American people understand that if you took all of the wealth that the top five percent in America have, it will not fix the problem and it will hardly put a dent in the budget deficit as being proposed.
It's wrong. The last person to do this to raise taxes like this in the middle of a recession was Herbert Hoover and we know what happened there.
CAVUTO: Now, the idea that spending could be stimulative, something has got to stick, right? I know you're against this but the argument is something sticks and if it does, and if the economy does stick, he'll take full credit for that, that is democrats and argue that you and your colleagues were mere dirsuptionists, what say you?
BOEHNER: Well, listen, Neil, if you throw enough paper, enough money against the wall, some of it is bound to stick. I think our job is to be responsible with the American people's money because at the end of the day, we have to remember it's the American people's money, not government's money. It doesn't belong to the president. It doesn't belong to Congress. This belongs to real people around America.
And when they see how some of their money is going to be spent in the stimulus package, let me tell you about that and they're not going to like it. And I don't worry about the poll numbers. What I worry about is doing the right things for the right reasons because if you do that every day, the right things will happen.
CAVUTO: I knew you've been trying to keep your troops in line here. But the dirty little secret is, you know, 3800, 4000 of those nearly 9000 earmarks were republican earmarks in the spending bill. So republicans are just as guilty of this, how do you rein them in?
BOEHNER: Listen, I have tried to solve this problem over the last three years, unsuccessfully. That is actually why I've asked the president to veto this bill. It has 9,000 earmarks in it and he has campaigned against this kind of spending and he can't get by with this idea well, that's last year's work, and so I'm just going to let it go by. It's this Congress that's passing this bill. He is the president of the United States. This bill does require his signature. And if he is serious about ending wasteful Washington spending, he ought to veto this bill.
What we ought to do is not increase spending by some 30 billion dollars for the balance of this fiscal year, through September 30th. What we ought to do is just have a CR, a spending freeze for the balance of this fiscal year, and show the American people we are serious about holding the line on spending. CAVUTO: You might be. A lot of your colleagues aren't. A lot of Democrats aren't. Is this just going to be the same old game?
BOEHNER: I have already promised the president of the United States that if he vetoes this bill, I will deliver 146 votes to uphold his veto from the Republican side of the aisle.
CAVUTO: All right, I hate to rain on your market parade, but we are all going to die! The threat from Iran sooner than you think?
(COMMERCIAL BREAK)
CAVUTO: A Fox Business alert, the end of the world. Iran could develop a nuclear weapon within, now has enough material to apparently make 50 or more. That is according to a new report signed today by a panel of current and former U.S. officials advising the Obama administration. Now could this news speed up -- it gets better -- an Israeli attack on Iran, perhaps as soon as this Spring? Could that make you at least forget all the market troubles you've been having, because is such a scheme you be dead?
To Lieutenant Colonel Robert Maginnis, a senior strategist for the U.S. Army on what is really going on. Good to have you. Man, oh, man, if it breaks into that colonel, Katie bar the door, right?
LT. COL. ROBERT MAGINNIS (RET), US ARMY: It would be serious if, in fact, they could deliver all those weapons. Even the satellite launch, Neil, they had recently was a small bundle they put into outer space. They are not going to be able to launch a nuclear weapon on a ballistic weapon at the United States anytime soon.
Now, that doesn't mean they don't have the technology that they can evolve. They certainly could, if they had a weapon, deliver it perhaps by airplane, but that is not going to be easy either, with the air defense systems.
CAVUTO: I've got to tell you, Colonel, when I had Benjamin Netanyahu here not too long ago, he was telling me they're getting close. They're getting much closer. I got the sense from him, long before his election and being able to cobble together this government now as prime minister, that he wasn't going to book around with this. And obviously it is a tense relationship with the Obama White House that has more sort of pacifist type of strategy going forward. He doesn't seem to be of that mind set. I'm wondering, let's say he does something. What then?
MAGINNIS: Well, they have certainly practiced. There is plenty of evidence that they have the ability to execute a mission, both with special-ops submarine, dolphins, as well F-16 and bunker- busters.
CAVUTO: What would the fallout be?
MAGINNIS: The fallout, of course, is going to stop -- they're going to halt the flow of oil through the Strait of Hormuz, 21 miles wide, two miles in the center is the channel. They have underwater rockets. They have, you know, C-801s, which are basically exo-sat missiles. They have a host of capabilities down in that area.
We have the fifth fleet down there that is very aware of all their capabilities. But they could damage that area. They could also, with hundreds of ballistic missiles, they could disrupt activities in Iraq, in Kuwait and, of course, the oil fields on the eastern part of Saudi Arabia, which is well within range of what they have out there.
And then they could unleash Hezbollah, which of course could create a real hell in the northern part of Israel as --
CAVUTO: Strait of Hormuz, they might want to lock it down and prevent stuff. Is there anything any other country can do, even in an odd position, Russia? I know Hillary Clinton as secretary of state is trying to cultivate good relations with Russia and maybe get them to be a wedge versus Iran. Anything any of those parties could do to prevent just that?
MAGINNIS: Well, certainly, Russia could pull out some of its aid. They put S-300 air defense systems, which are very sophisticated, which the Israelis are concerned about. The Saudis could try to buy them off, but they're trying to do that now and they haven't been very successful.
You know, they are rational players to a certain degree, Neil, there in Tehran. You have the people that talk about the 9th Imam and the theological issues. But they don't want to die. They want to continue to prosper. Unfortunately, they have run into some tough times. So, perhaps, you know, working on gasoline issue, they want to continue running their cars. Perhaps there is some sanctions out there.
But at the end of the day, they are going to have happens, I believe. And Benjamin Netanyahu, if he forms a government, will probably launch an attack and try to destroy them.
CAVUTO: Interesting, colonel. Thank you very much. I just want to remind folks, as you're aware of these life and death things, there are life and death issues out there that get caught up with our 401(k) debates. Sir, always a pleasure.
MAGINNIS: Thank you.
CAVUTO: Don't look now, but the bloom could be coming off the Obama media rose, high poll numbers not withstanding. More newspapers, magazines, websites and TV news shows citing growing frustration with market sell-off, and taking it out on the new administration trying to stop those sell-offs. There's a recent page one "USA Today" story blaming much of Wall Street's freefall on a market showing zero confidence in any of the president's prescriptions. Sign of things to come?
Here to connect the dots is Jim Naureckas of Fair, a national media watch organization. Trickling in, more -- more connecting the dots, saying this guy's prescription isn't winning over Wall Street guys. Not a lot. What do you think?
JIM NAURECKAS, FAIRNESS AND ACCURACY IN REPORTING: Well, I think there is a common mistake in the media to look at Wall Street as a kind of opinion poll. And it's not. These are business people who are looking at stocks, and trying to figure out how much they're worth, which means how much other people will pay for them.
CAVUTO: But usually it's always about confidence, right? If they're confident in the environment they're in, they tend to buy and when they're not, they tend not to, right?
NAURECKAS: The confidence -- to run the economy on sort of optimism or pessimism, I think, is probably what we've been doing for the past decade or so.
CAVUTO: Wouldn't you want win Wall Street over?
NAURECKAS: I think that Wall Street is looking more at what those businesses are doing and what they're likely to be doing in the near term, in terms of profits than they are.
CAVUTO: You're right. They were doing diddly before the president took office and they're doing diddly since he took office. You're right, this is equal bastion for bashing, because they were bashing the last president's big government prescriptions and they're bashing this guy. All things being equal then, if the market were encouraged, it would show it, right? And I guess to drive to the media point, Jim, that didn't come out of the media before. The media collectively kind of assumed that Wall Street is doing it's thing, the president is trying to do his thing; never the two shall meet.
But this is first instance last week or so where I've seen some connecting dots or trying to. Should they, am I making big deal of it?
NAURECKAS: I think there is a level of anxiety that you see among TV hosts about what the stock market is doing. And you do see a real disconnect between the poll numbers that Obama is getting on handling of the economy, and the attitudes that you see on from some of the talking heads.
CAVUTO: Which wins out? Not the talking heads, because I'm rooting for them. I'm serious. Is it the market numbers that eventually validate the Main Street numbers, or other way around?
NAURECKAS: I think that the focus on Wall Street is something that matters a lot more to people who are in the income level of people who have TV shows than the income level of --
CAVUTO: Newspapers are doing it too.
NAURECKAS: Other than watching TV shows.
CAVUTO: To disagree with you, I think more people are invested in the market today than they used to be. So when FDR went after the markets and a lot of the greed back then, a small percentage of regular folks were invested. Today, it is seven out of 10 of us. Isn't that a difference?
NAURECKAS: Really the bulk of investment is owned by the top 20 percent of people of incomes.
CAVUTO: So more than just TV hosts?
NAURECKAS: It is more than just TV hosts. But it is not the bulk of the country.
CAVUTO: How about weather men? How much do weather men make? How much does that guy with the plaid jacket on Sportscenter make?
NAURECKAS: The average person who is watching TV is more concerned about their job than about --
CAVUTO: That I think you and I agree on. What do you read then into the fact that for the first time the media, maybe with the frustration in the economy, maybe the frustration of down sizings in their own media, are now finally saying, maybe impatiently so, because it's only five or six weeks into this guy's presidency, we're running out of patience? We're so in the moment. We don't like the moment. And we're going to start taking it out on you?
NAURECKAS: I think there is a bit of impatience in the idea that you ought to be able to talk the market up, and fix the problems by talking about them. And really I think that --
CAVUTO: But apart from the market, there's just a feeling, not to paraphrase a president, just a feeling of malaise that is setting in. And they will take it out on the guy who is trying to get us out of it.
NAURECKAS: Well, I think there is a certain anxiety that is being projected onto the president, as the person who is supposed to take care of us. But the economy is a huge enterprise that does not turn around on a dime. Recessions, ordinary recessions, usually have a time period that they go through. This is not an ordinary recession. Whether the time period -- CAVUTO: Is the media, slightly turning against him?
NAURECKAS: I think you do see more people, talking heads saying
CAVUTO: Leave the talking heads out.
NAURECKAS: In the media.
CAVUTO: What you read, the newspapers, local papers. I read quite a bit, talking head notwithstanding, and I do see that -- I'm not saying they're bashing the guy. I'm saying that more often I read frustration and they are taking it out on him.
NAURECKAS: Absolutely. I think -- if you talk about liberal bias in the media, conservative bias in the media; I think that there is bias that comes from your bread and butter, from your pocketbook issues.
CAVUTO: I think the media left and right are just whiners.
NAURECKAS: I think there is something to that.
CAVUTO: Yes.
NAURECKAS: The part of the stimulus debate was about extending unemployment benefits. This was almost always talked about in terms of how much is it going to cost. Is this going to --
CAVUTO: Right.
NAURECKAS: It was rarely talked about in terms of what is this going to do for unemployed people? Is this -- how hard is it to get a job right now?
CAVUTO: All right.
NAURECKAS: People's unemployment benefits running out.
CAVUTO: Got you. Turning it upside down. That is a very good point. Jim, thank you very much. I want to see you back. When we come back, he called it, he feared it, and now he says we're going to be getting it. The housing tsunami to come that will get worse. He says much worse.
(COMMERCIAL BREAK)
CAVUTO: You think the administration's 75 billion dollar rescue that ends at nine million homeowners stops there? Think again. Reports now that one out of five homeowners is underwater. Ready for the tidal wave. Howard Rosencrans, Tracy Byrnes, John Layfield and Jonathan Hoenig. Layfield, this sounds like government rescue could take on tsunami proportions.
JOHN LAYFIELD, FOX BUSINESS ANALYST: Absolutely, 48 percent of homes in Nevada under water right now on their mortgage. This is spreading. IT's actually getting worse. This is not a stimulus package at all. This is a stabilization package. They will put a lot more money into this.
CAVUTO: Jonathan, I want to be fair to you, you kind of saw the writing on the wall, in that we would be writing a lot more checks. I suspect that if those numbers are right, it's one out of five of us who are in this type of pickle, then it is going to be more than nine million of us getting relief. What do you think?
JONATHAN HOENIG, FOX BUSINESS ANALYST: I think you're right, Neil. Obama seems to operate on this notion that only needy matter. So once again with this, the housing rescue, we have another example of wealth being transferred from responsible individuals, from productive individuals, like the two home owners you had on earlier in the show, to those who have been irresponsible and unproductive.
I don't understand how Obama can claim that a responsible homeowner is somebody who is not paying mortgage. It's kind of tough for many of us, especially in financial markets, to understand. I think the plan is immoral and I think it's impractical. It is not going to provide the help and stabilization of the housing market that the president would like to have us believe.
CAVUTO: A reminder to a lot of your new viewers who hooked up with dish and some of these others, Hoenig would never lend you a dime, period. Wasting your time if want to get a cup of coffee from the guy.
Tracy, talk to those two home owners earlier. One thing the woman pointed out to me was just remarkable. She lost her job. She is not a victim, even though she lost her job through no fault of her own. Just a downsizing. She doesn't want any help. She is saying, furthermore, that all this government intervention is complicating the help and complicating the housing picture, and making her situation worse.
TRACY BYRNES, FOX BUSINESS ANALYST: Right. I thought that was really interesting as well, mainly because now you have the government strong- arming banks. The banks don't know what they're doing. Everyone is still afraid to make a move and loan money to people. It is just making the whole thing more complicated. Where, if she allowed to go fix this and potentially work with the local bank on her own, without having big Uncle Ben and everybody looking over their shoulder, they would probably be more than willing to work with her.
CAVUTO: I wonder, I talked to on Fox News Channel earlier, Howard, with the Citigroup mortgage head. The guy is redoing a lot of these mortgages, leaving outside the fact that he might have been strong armed to provide this help, which he denies. Why didn't we do this at the beginning? The answer isn't the government, but if you're in such disarray, try to work with a lender privately. Try to see what you can do before you hit up the taxpayer for something. Why -- maybe if some had started that, if they were really going down this road, they wouldn't be in this position?
HOWARD ROSENCRANS, FOX BUSINESS ANALYST: The reality or hope was that the banks were going to be extremely proactive and do it. But as Tracy has often suggested, the levels that they would take it to would end up having these people back in restructuring or having that end up in default or --
CAVUTO: Six out of ten do defaults.
ROSENCRANS: I think if they bring this down, it is not going to have that Draconian restructure. However, this is the wrong answer, because this is going to keep people in homes who shouldn't be maintaining their home ownership. We should not have 69 or 70 percent home ownership. In a downturn, we should get to 60. This plan that Barack has put together --
CAVUTO: Barack now?
ROSENCRANS: Awfully or unfriendly or too friendly Pelosi, et cetera. The reality is you are not doing enough for the demand side. You've got to do something to stimulate that, or housing prices are going to remain substantially over-valued for a long time.
CAVUTO: We're going to take a quick break here. So Barack, the man, oh meister, if you're watching, stick around.
(COMMERCIAL BREAK)
CAVUTO: All right, welcome back. A "Wall Street Journal" poll says the president is still a rock star. A Wall Street period that says he most definitely is not. So who do you go with? Jonathan Hoenig, who's right?
HOENIG: Well, I mean, Neil, Wall Street and Main Street are a lot closer than I think many pundits would have you believe. And the president's obviously riding quite a honeymoon right now. I wonder what happens six months, a year, two years down the line, when all the investments we're making don't work out, and, of course, we're down with all these financial messes, when inflation starts to rear its head, when productivity slows? I really doubt that his popularity is going to last as long as his budget ideas will.
CAVUTO: What wins out though, Tracy? History on this is a little dicey. Ronald Reagan was popular in the early part of his presidency, but not so with Wall Street. Later on, he lost that popularity, and then Wall Street in the early '80s was beginning to boom. There is always a disconnect. Which wins out?
BYRNES: Yes. That's why I'm surprised Jonathan thinks they're connected. I still think they're vastly disconnected. I think Wall Street is saying they don't buy any of this crap.
CAVUTO: Wall Street could be wrong, couldn't they?
BYRNES: They could be. But at the same time, it's, in theory, forward thinking. It's already thinking that hey, taxes are going up on most of them that trade down there. Taxes are going up on most businesses that trade down there.
CAVUTO: Careful, Barack's watching. Howard knows he is watching. But go ahead.
BYRNES: People on the street who vote and take these polls, all they see is potential handouts coming down the loop. That's why I think why the polls are so good right now. I think there is a big disconnect.
CAVUTO: Oh man, her opinion. What do you think of that?
LAYFIELD: I think Tracy is right. I think Americans want to have hope. I think they want to pull for Barack, as Howard would call him. I call him President Obama. I do too. He is my president. I want to pull for him. I want to have hope as well. I think Wall Street sees --
CAVUTO: So yes, we can.
LAYFIELD: Yes, we can. I saw a pie place down in the south that has Yes Pecan pie, a special on President Obama.
CAVUTO: I got it. If he is very popular right now -- the thing that struck me in the Journal poll, Howard, that his measures are popular as well. What's more, when asked about the direction of the country, these measures and the nuances and the hitting them on spending notwithstanding, they think they're going in the right direction.
ROSENCRANS: Well, it is certainly incredibly populist, socialist mandate. There's no question about it. I think it's way over- reaching, particularly in the context of the economy. But you're going to buy some votes in the short term on the perception, hey, you are going to help out these nine million people. -- it ultimately encompasses.
However, I agree with Jonathan wholeheartedly. A year or two down the road, these things are going to merge together when the efforts he is making are not necessarily --
CAVUTO: Jonathan, wouldn't that be a pickle if it doesn't, if we're moved by osmosis out of what we're in and they take the credit?
HOENIG: Neil, I would be surprised. You're much more of a -- on the story than I am, but I don't remember a lot of great economic booms being built on bail out and stimulus. CAVUTO: We don't know. That is why you, Oh man, are getting it done and watching you get it done. When we come back, when losers unite and the world pays. Or when groupthink becomes group stink.
(COMMERCIAL BREAK)
CAVUTO: All right, now, I don't know about you, but when I was a kid in school, I really dreaded group projects. Here's why: invariably my group would always, always have the slacker. Never me, mind you. But usually someone who figured he could coast while the rest of us worked. Happened to me back in high school; a big social studies project, we were doing something like comparing systems of government and their respective economies. I don't remember the details.
Bear with me. I have a point. Anyway, it was a pretty good group. All except for one guy. While most of the group really got into the assignment, including this incredibly hot girl who sat next to me -- but I digress -- there was this one dude who never even bothered to get involved, to even start getting involved. Just sat through all our meetings sulking and yawning, then blinking real slowly. So slowly that he started napping.
One meeting, I literally had to wake him up, really thought the dude had died. We tried to coax him, psych him, wake him, anything we could, to no avail. Quickly, we surmised he was total loser. So we kept his contribution to an absolute minimum. All he had to do was get five large poster boards and find an easel to put them on.
The night before the project due to be presented to the class, he shows up, posters, no easel. It's 10:00 at night. He says, sorry. No stores open back then. So we scrambled, used another kid's bed sheet, without telling that kid's mom. Mom wasn't happy. Messy story. I'll leave that out.
Next day, the teacher couldn't figure it out, because the sheet kept falling from the blackboard. Said it looked sloppy. We looked sloppy. Then the sheet really hit the fan. Teacher gave us all a C. And guess who was ticked off the most? The slacker! I kid you not.
This is what happens, my friends, when groups do things. One guy brings down entire group. Then has the nerve to blame the group, sometimes more than one guy. Like when you do what global leaders are kicking around doing right now, getting together with a global New Deal. Pool your resources, money and manpower to combat the world's financial ills. Same financial ills they've each individually proven so adept at handling. Not.
I've seen this group project before. It doesn't work. It won't work. Not because the individual members are bad, but because they all are.
END
[Copy: Content and Programming Copyright 2009 Fox News Network, LLC. ALL RIGHTS RESERVED. Transcription Copyright 2009 CQ Transcriptions, LLC , which takes sole responsibility for the accuracy of the transcription. ALL RIGHTS RESERVED. No license is granted to the user of this material except for the user's personal or internal use and, in such case, only one copy may be printed, nor shall user use any material for commercial purposes or in any fashion that may infringe upon Fox News Network, LLC'S and CQ Transcriptions, LLC's copyrights or other proprietary rights or interests in the material. This is not a legal transcript for purposes of litigation.]
2009 Fox News Network, Inc.
(c) 2009 CEO Wire. Provided by ProQuest LLC. All rights Reserved.
A service of YellowBrix, Inc.
