November 11 2008 show notes
Nov. 13, 2008 9:14 pm
By Thom Hartmann A...
- Veterans Day.
- Thom and Louise's 36th wedding anniversary.
- Guest: Tax attorney Roni Deutch. Investment losses in this economic crisis...what can you do?
- Economic depression rant.
- Guest: Eric Eve, Senior Vice President of Global Community Relations for Citi. Citi Announces New Preemptive Initiatives to Help Homeowners Remain in Their Homes.
- Guest: Robert J. Samuelson. Author of "The Great Inflation and Its Aftermath: The Past and Future of American Affluence".
- Guest: Larry Scott, founder and Editor of VA Watch Dog. "The American Veteran's On-Line News Magazine". Thanks to him and all veterans for their service to the country.
- Guest: Dr. John Lott. PhD in Economics...author of "Freedomnomics," "More Guns, Less Crime" and "The Bias Against Guns".
Topics, guests, upcoming events, quotes, links to articles, audio clips, books & bumper music.
- Veterans Day
- Thom and Louise's 36th wedding anniversary.
- Guest: Tax attorney Roni Deutch. Investment losses in this economic crisis...what can you do? Companies can buy a company with a loss and put that on its balance sheet so they do not have to pay taxes. Individuals have lost lots too, buy you can only deduct money against gains, and who has made any gains? There is no bailout for taxpayers. You can only deduct $3,000 losses per year. Open your statements. You have to know what the pain is and sell to get the loss. This is a glitch and you can see gains again in the future and offset your losses. Retirement plans. Do not sell your 401(k) to get losses, you have to pay a 10% early payment penalty. If you are not on the point of retirement ride it out. Keep putting money in, but demand more conservative investments if you are close to retirement. You currently have to take a mandatory distribution at age 70.5, but Obama will change that. Outside a 401(k) which has a penalty, sell to get the $3,000 loss. While there are layoffs, still in downward spiral, don't start buying. Fear runs deeper today than decade did a decade ago.
- Afterwards Kate sent Thom a note saying if you are over 55 and have lost your job you can withdraw your 401(k) with no penalty and transfer it to another retirement plan. You can put it in a Roth IRA that you can draw from without penalty.
- Quote: "The government is us; we are the government, you and I." Republican president Theodore Roosevelt (1858-1919).
- Article: Retail Losses Sap a Jobs Safety Net.
"Circuit City Stores Inc.'s bankruptcy-court filing Monday underscores how this economic downturn may differ from others in recent memory: The U.S. retail sector is losing its place as the employer of last resort for the newly unemployed. Circuit City, the country's second-largest electronics chain, had already announced it would cut 6,800 people as it conducts going-out-of-business sales at one-fifth of its outlets. On Monday, the company filed for Chapter 11 bankruptcy protection, and said that the number of job losses was likely to rise to 8,000.
Circuit City is the latest of at least 14 major retail chains, including Linens 'n Things and Mervyn's LLC, to file for bankruptcy protection in the past 12 months...
The retail sector is rapidly losing its place as the employer of last resort for the newly unemployed...
Roughly one of every 10 Americans is employed in the retail sector. But since November 2007, about one in every four lost jobs -- about 320000 in all - have been retail jobs...
Retail employment has traditionally been relatively resilient in times of recession
- This isn't a recession. This is the second great Republican depression. The first great Republican depression came about because they took all regulation off the sale of securities and commodities. There was a huge land bubble that started in Florida in the early 1920s, spread across the United States. It burst in 1927, which spread to a credit crisis in 1929 which spread to Wall Street in October/November 1929, which brought down Wall Street. Then you had a Republican president who said, "well, just let it work its way out, the free market will correct everything". And you had a Federal Reserve which said, "we need to tighten money". Bottom line, wages were falling like crazy throughout 1929-1934. As wages were falling, demand was falling, because wages are the driver of demand. So as people lost their job or they got paid less, there was less demand in the system. Demand is what balances or produces supply. Supply comes along to meet demand. So supply fell. Businesses started closing.
We've seen the same thing in the last 27 years. Since Ronald Reagan declared war on the working class in America in 1981 we have seen wages for working people flat and in many cases actually declining. They had been steadily growing from 1934 to 1981. Supply continued increasing and people kept buying things. In 1983 the average family was setting aside 11% a year of their money in savings. Today the average is -0.5%. People are spending more money than they are actually earning. That's how bad it's gotten. This is the direct result of Reaganomics. Today's Wall Street Journal deadlines...
- Article: GM's Shares Plunge on Cash Fears Subscriber. "General Motors Corp. stock fell to its lowest level since 1946 as concern intensified that the auto maker could run out of cash and be forced to file for bankruptcy protection". "GM Stock at 1946 Level as Dire News Grows".
- Article: Circuit City Seeks Haven In Bankruptcy Protection.
- Article: DHL Beats a Retreat From the U.S..
- Article: Nortel Posts Big Loss, Faces Calls to Break Up.
- Article: Tough Times Complicate the Case for Buying Super Bowl Ads.
- Consumers create demand. Demand had been driven from the 1930s, when FDR got a filibuster-proof majority in 1935, until 1980, wages and demand were steadily increasing. Wages started flattening off in the early 1980s. In order to continue paying their mortgage and car payments (as there was no cheap public transportation and they needed to get to work), people went into debt. That debt has finally hit the wall. This is the credit crisis, and it's going to get worse. It's going to bleed into the credit card sector in the next year or so. This is all the bad news.
The good news is that this is the shake out, the clean-up, that's going to get rid of this insane conservative economic theory that has gripped America like some sort of hypnotic trance since Reagan was elected, and shake us back into economic sanity.
- Article: A Town Drowns in Debt as Home Values Plunge.
"Mountain House, Calif.