Monday, September 29, 2008
CNN: Larry King, Anderson Cooper pound Congress on Bailout failure: What if China calls in our debt?
"Larry King Live" (CNN) tonight provided more post-mortem on the bailout vote failure.
The most alarming speaker was probably Oprah’s Suze Orman, who has said on other shows that she does not expect the economy to recover until 2015. She gave straightforward advice, but one of her most interesting points is that credit card companies are lowering credit limits, which will lower FICO scores for people who have significant balances relative to their limits. Most credit counselors say that consumers should not use over 30% of their limits for best scores. She did point out that there is no connection between your 401K or savings balance and your FICO score. If your FICO score goes down, interest rates will go up, and your auto insurance premiums can rise.
Suze also said that $1.2 trillion today evaporated, over a $700 billion.
Charles Rangel (D-NY) and Marilyn Musgrave (R-CO) appeared. Musgrave voted against the bill, and babbled about Freddie and Fannie, which had little to do with the immediate problem of the bailout. Yes, they need to be reformed, and yes, they were corrupt, but that has nothing to do with putting out a main street fire.
Then, Ben Stein (“Expelled”) and Paul Krugman spoke. Both suggested that the bailout was a bad plan, but that credit market problems are so serious that there was no practical choice but to pass them. Stein suggested a bottom-up approach of helping homeowners, but that wouldn’t come close to dealing with the credit default swap problems, which are actually much larger.
Anderson Cooper’s 360 continued with more discussion of the outrageous behavior of Congress, with partisan bickering. Suze Orman appeared and repeated her 2015-to-recovery prediction. She said, "Remember 9/11? You have to be prepared for the worst.” (I don't think you can prepare personally for nuclear terror.) She also reminded us that student loan debt cannot be removed by bankruptcy. She also said that some people with relatively little debt should soon consider buying homes rather than going into the stock market, because homes are becoming fairly priced now.
David Gergen, a Republican whom President Clinton appointed to his staff, also called Congress's behavior patently irresponsible.
I’ve noted that single people facing eldercare possibility could look at home ownership as a way to protect their “sovereignty.” Perhaps Suze will talk about this some day. Maybe I will, if I can get on TV myself. There is a whole host of other problems that very few people understand that are going to crawl out of the woodwork, like blobs.
A University of Maryland economics professor said on WJLA “doing nothing is doing something. As we speak, wealth is being destroyed all over the world.” This is very urgent.
I think it’s disgraceful that Congress goes home for two days to campaign while the financial markets burn.
I can’t say this too often. Today’s partisan breakdown in Congress was disgraceful. How can the rest of the world take us seriously. If I were Wen Jiabao in China, I would think about playing the financial “nuclear bomb” and calling in the US T-bills. Didn’t anybody notice his hidden warning on Fareed Zakaria’s show on CNN Sunday? Congress, did you notice? Nobody has mentioned it. Doesn’t anybody in Congress connect the dots?
Watch Steve Forbes ("flat tax") on Fox support the need to get credit markets moving again here.
President Bush will address the nation at 8:45 AM EDT Tuesday morning, Sept 30, on all networks.
Earlier today, Lance Bass (formerly of ‘Nsync) appeared with “Lacey” on "Ellen" for some break dancing. That show was interrupted with NBC reporting that the Bailout vote in Congress had failed.
I think Lance Bass and Clay Aiken make much more refreshing guests on television than anyone from Congress now (even including Barney Frank).