Hits Keep Coming

" Welcome to The Journal Editorial Report finds good -- industry -- you go -- self. Could the wheels becoming off the administration's economic recovery plan well -- bad news just keeps on coming. Retail sales fell unexpectedly last month raising fears that they key back to school shopping season will hit negative territory for the first time in years. And use this week that the number of homeowners delinquent on and mortgages or in foreclosure. Rose to the highest level in four decades more than full -- of them all -- was all in full closure. About 9% I've missed at least one payment. It is a triple whammy if you asked about the continuing problems with unemployment. -- joining the panel this week Wall Street Journal columnist and deputy editor Dan Henning editorial board member Jason Riley. And senior economics writer Steve Moore Steve we'll start with you -- The stock market a terrific rally. We hear that the recession is winding down and maybe Obama so why is the president's recovery plan being questioned so harshly."

" Well the one piece of good news -- is that the stock market has really been -- soaring up. Increase over the last three or 45 weeks so that's good news and I've always regarded the stock market is -- an important forward looking indicator -- but you're also right Stewart and every time it looks like the economy's picking up a little bit of steam. You see these statistics they come out this adjusted stumbling he got and I think. I think what's making Americans most nervous right now Stewart is these lousy unemployment numbers we saw unemployment numbers clock climb a little bit. Hot last weekend so this suggests that we might be and the throngs -- Jobless recovery -- where we just don't see that unemployment rate fall much and when you got fifty million. Americans who are unemployed it's hard for them to pay their rather -- for them to pay their mortgages hard for them to go out and shop."

" Dan I'm looking at the credibility of the president's recovery plan and I saw that credibility questioned by Warren Buffett's in the New York Times this past week when he says look. You can't you can't go on spending borrowing and printing money like this -- sold out as a warning shots."

" Well as a warning shot we've talked about that a lot on this program security threat of inflation. I think Buffett also. Suggested. Something about the value of the dollar. And you know. It is entirely possible that they're going to try to. Engage in an export led recovery which implies. Cheapening the dollar and a cheaper dollar implies feeding inflation into the system and as we've said many many times on this program at some point. The Federal Reserve is going to have to tighten liquidity. But they may have to do that just in advance of next year's off year elections that is going to be politically -- popular the Fed is under tremendous pressure. Not to tighten next year. But that would -- in place."

" And into the system and it is not just Warren Buffett is questioning the effectiveness of the stimulus package USA today. Recently catapulted 57%. Of Americans. Don't think that the stimulus package is working. And so consumer confidence is down which is feeding those. Retail numbers that you mentioned earlier -- and they look at unemployment as Steve mentioned well nearly nine and a half percent so people don't feel confident -- spent money. It's hard to see where that economic growth is gonna come for all right I mean that's the real problem here with happy when looking for whether it's the stock market. -- consumers I mean typically in our economy it's that operate in class upper income Americans who are the job creators. Who end end. Obama made them enemy number one -- it's gonna go after them."

" If you thought that -- distinct sides of the fence via the Wall Street's -- and profitability corporations looking pretty good. The main street suffers from declining Consumer Spending and -- continually high up on employment and now this housing crisis tailored to reality is sustained."

" The left I think that -- Jason really put his finger on the problem where -- the growth gonna come from I think the one lots and hopefully we've learned from the last six months is you don't create prosperity and you don't create jobs. By the massively increasing government spending and increasing -- and the other portion of this story that we haven't mentioned yet is what's going to happen. Late next year tax rates are gonna increase on small businesses -- ambassadors. That makes I think I'm a businessman. Very reluctant Stewart to invest in new enterprises a new equipment and new high. Iris if they think their tax rates are going up it's a cockamamie theory that you can increase spending and then raise taxes later they get growth."

" And those housing. Numbers could get worse before they get better -- remember that a lot of people are still in homes they can't afford -- still under water that mortgages. They don't want -- march in the home is worth which could could drive those foreclosure rates. Downey and from what little we -- question down when his growth coming from -- what about a second stimulus package since."

" Well I think. Yeah I think. A second stimulus is probably plan a B and C for this administration that they believe Bennett right it's -- economic period it stimulus creates this multiplier and creates jobs in the economy. And some within the administration and others outside like Paul Krugman and Joseph Stiglitz do want another big stimulus package. Politically I just don't see that happening. He's already asking -- Democrats in congress to vote for a one point four trillion dollar health care bill they already did a big stimulus package obviously the American people are upset about deficits. So I just don't see that happening and if that doesn't happen. I just don't don't see a plan B for this administration because as Steve suggested. Normally under those circumstances you would go to cutting taxes in a recession. But they need all the tax revenue they can get for their health care bill so where does that leave us Steve if I listen closely to these town hall meetings it's not that there is anger over health care reform that is true that is that this seems to -- also -- about government spending that's just out of control another stimulus plan would make any of them was when it."

" Well there's no question about it this rage out there. This -- not just Republicans and conservatives but independent voters. Is really a result of the massive debt and look at voters get the joke that if you have 800 billion dollars of spending. It's not free Stewart it has to come from somewhere and that's the whole fallacy of the stimulus idea people know that their tax are gonna have to be raised later or that that's gonna have to go up by a massive amount. The paper all of this funding which is a big. Millstone around the neck -- this economy right now Swindon."

" You know Alan Greenspan used to say that. The American economy have been so deregulated and so privatized that it is now able to withstand extraordinary. Blows from recession -- would've brought it to its knees in the past but again his point was. It was the private sector that was the strength of the American economy and I just don't see them doing anything to help the private sector. One."