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Operation Deceive the People

Reported by Melanie - January 24, 2005

U.S. consumer (No, citizen. I loathe the word "consumer.") debt and the deficit seem, finally, to be breaking into Wall Street's consciousness. Citizen spending, much of which is fueled by citizen debt, is what has kept our economy running over the last several years. It stands to reason that corporate media would want to keep the party going, no matter how much high interest payments and high levels of debt hurt US citizens. Corporate media, the pimp for corporate America, isn't interested in warning its listeners about the danger of high debt or wild spending, certainly not Neil Cavuto of Fox News.

Howard Davidowitz (Davidowitz & Associates) was a guest in a wide-ranging segment about oil, last weekend's blizzard, and the stock market today (January 24, 2005) on Your World w/Neil Cavuto. Toward the end of the segment, Davidowitz raised the issue of consumer debt, saying it is up 30% over the last five years, and at 1% there is "no savings." He said "the economy can't be sustained," we have the "world's greatest deficit," that "we're taking 80% of the world's savings to fund this deficit, we're off the charts," that Wall Street is "listening to the whispers before they become roars," and that consumers are "coming to the end of the rope." (As Davidowitz spoke on this topic Cavuto interrupted him twice.)

A few minutes later during a round table discussion, Neil Cavuto tried to dispel Davidowitz's gloomy (but true) assessment with guest Tom Atkins. Tom Atkins runs the CommonConservative website. He is a frequent guest on Your World yet I have no idea what makes him qualified to give financial advice and to comment on the economy of the United States of America.

Cavuto said that "we had a retail analyst here" who said we're "all tapped out," we're "up to debt to our eyeballs," and "now there's hell to pay."

Atkins said "You know, somebody tells you that, they're just missing the whole point of capitalism when we keep creating wealth. So if you put all the money you had, you know, made last year someplace, well, next year you're going to make more of it and you're going to put that someplace too." (Comment: What??? Oh, pray tell, if only it was that simple!)

Cavuto said, "Yeah, but ah, his point was we're taking more than we earn and we're spending it and that's the problem." Atkins again: "Well, again, it's temporary. If you spend one percent more than you earn and the next week you make 5% more, you're still ahead of the curve and we keep seeing that." (Comment: We do?) Cavuto asked him if he was "dismissing this whole consumer debt issue; it's much adieu about nothing?" Atkins said "I'm not saying I'm dismissing it but I don't think it's that critical. You're creating more wealth than you had," and you're "ahead and you're okay."

Guest Rob Stein of Astor Asset Management said it was becoming more and more difficult for the consumer to continue spending at this pace but Fox reporter Brenda Buttner brought up the rear with, "It's always the issue [consumer debt] that people trot out when they're trying to say the economy is bad." There are "so many good things" happening, jobs are "coming back," and "growth is good."

Comment: Message to viewers: If you have no savings, if you're deep in debt, don't worry. Keep spending. (This from the same crowd that wants to pull Social Security out from under the indebteded people who are propping the country up, spending instead of saving, even as we speak. Oh, and by the way, Bush asked for another $80 billion (that's with a "b") for Iraq today. Seems to me that even with loads and loads of "consumer" spending, with the Bush administration spending money like it is, we citizens are in a lose-lose situation. Too bad most of us don't know it - we sure won't hear much, if anything, about it on "the news.")

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