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HARRISBURG PA FILES FOR BANKRUPTCY: SHOULD ALL TROUBLED LOCAL GOVERNMENTS DO THIS INSTEAD OF TAKING BAILOUTS/STIMULUS MONEY?
Wayne Rogers: Absolutely! That's what the bankruptcy code is all about. You file chapter nine if you're a municipality; chapter 11 if you're a corporation in the United States. The bankruptcy law was designed for these kinds of things. It allows the municipality, or the state, or whatever body it is to reorganize and pay the creditors in a structured way, and it's the best thing for cities to do because otherwise you're going to bailout everybody. You can't bailout the world and that's what we've been doing.
John Layfield: That's the argument from the Governors. Look, Governor Brown in California, one of the worst states in the country you know, you look at Michael Lewis's book comparing it to Greece and saying it's pretty much on par with Greece and it is. He's trying to make it harder for these municipalities to go bankrupt because he believes the contagion effect will roil the markets, but you look at Jefferson County, Alabama; they have 3.5 billion dollars; they went into default. Investors lost over a billion dollars. The market is not so dumb that they don't know that a default right there or bankruptcy losing the money is the same thing to the markets as far as the contagion effect, which is already happening.
David Mercer: I think you've got to have bailout and you've got to have stimulus. I mean, look, going to what Wayne just said with regard to bankruptcy; I'm sure that wouldn't have worked with Wall Street on its bailout and that's the problem. Main Street is looking for the same standard, not a double standard and we saw with Detroit how that worked with the auto industry and we now have the Detroit Lions at 5-0. So, I think bailouts can work and we need that stimulus package and that should be an option on the table; it's up to the city council in Harrisburg.
Tracy Byrnes: Handing out money is not the answer and what does that do to the taxpayer? Why should I have to foot that? You are certainly handing out money when you bailout failed cities. You're not investing in anything because we all know how well that stimulus money has been spent. There's been no investment.
Jonathan Hoenig: Let's get real. The stimulus, the government spending is exactly what the bankruptcy would hopefully remove; that mal-investment. The situation that led our story this morning is an example of where a city of 50 thousand, has racked up 300 million dollars in mal-investment. In this case an incinerator. The bankruptcy will remove it.
PRES. OBAMA'S JOBS COUNCIL PUSHING NATIONAL JOBS TRAINING PROGRAM: IS THIS A GOOD WAY TO GET AMERICANS BACK TO WORK?
Tracy Brynes: Yes, sure did. They tried this in Georgia and they're trying to model this or the theory is they're going to model it after Georgia's plan. Now, other participants that were in the jobs program in Georgia less than a fifth of them actually got jobs after the whole thing. And here's the kicker of the whole thing Lori, it cost them about five hundred thousand dollars a month when they started this program. They're up to about two million dollars a month so the costs are rocketing and no one is getting a job, and you know part of the problem is we're training people for jobs that don't even exist. These programs are backwards if we allow the corporations to train people for jobs that they have themselves we might be in a better position.
John Layfield: We have got to do something. I believe that what we have is a problem of...you have manufacturing when it left the country those jobs went into housing, Housing was a bubble that burst. Housing is not coming back for years. Those people that are unemployed right now have no jobs and they have no training for their jobs. This program was horribly inefficient, but we have to find something for these people because there are no jobs that are opening back up in housing to go to work somewhere and retraining them is something that's a big part of it.
Jonathan Hoenig: Lori, it's absurd. It is absurd to suggest that a president who has never created one private sector job has the plan or the council that's going to create millions of them. I mean, for one thing it's not the President's job to create jobs. It's to protect the constitution, protect individual rights...Wal-Mart and Apple are great companies that were never a function of a jobs bill and what we need is not a President's jobs council. What we need is economic freedom. Everything the President does; regulation, taxes, intervention runs contrary to that principal. That's why the economy is a mess.
David Mercer: Well, I would say I'll leave it to the viewers to go on Google because the President has created private sector jobs and some of the jobless rate that we have now is attributed to the loss in the public sector. That aside with regards to job training what is inspiring and hopeful here is that you're taking a page out of what happened with Clinton in public- private partnership. You would've never had welfare reform if you did not have the private sector working with the public to get welfare reform and what's good is seeing the private and public sectors sitting down to figure out how to fill the jobs that they do have, and the vacancies they do have where those that can perform those jobs.
Wayne Rogers: Well, it's not just in the housing you've got some systemic loss of jobs here because we have a gap educationally because some of these jobs are never coming back. I mean the guy that took a rivet gun and went from x to y and plugged that gun - he's gone. That job is gone forever. That been replaced by a numerically controlled machine by somebody out there who has some computer training and that kind of stuff. That kind of training for high technical stuff is good. The problem with this plan is you've got 27 people that he's appointed to a jobs council; twenty seven people. You can't get three people to agree. Twenty seven people and it's headed by Jeffrey Immelt one of the dumbest guys in the world who took the x-ray division of general electric after lecturing to the chamber of commerce to the United States about jobs - he moved the x-ray division to China. What the hell is he doing for this?
CONVICT FIREFIGHTERS: GOOD WAY TO SAVE MONEY?
Wayne Rogers: It may be, but it's a terrific idea because it will save all these states. We talked about it earlier; municipalities are going broke and state institutions. If you can use prison labor to solve some of that problem, why not? I mean it's costing us money to keep the prisoners in jail, why not let them pay for some of that? It's not cruel and unusual punishment to have to go out and work on a road gang. I've done it. I did it for 13 weeks one time when I was in that movie.
Jonathan Hoenig: Well the answer in this case Lori is to have less convicts. I mean 30 percent of Georgia's prison population is drug and drug-related. Whether, taking drugs or selling drugs, why we're locking up people who are making the decision to throw their own lives away I don't understand. Decriminalize drugs. That literally saves hundreds of millions of jobs a year in compliance, incarceration, and all of those law enforcement costs and you can hire real firefighters to protect people's rights.
John Layfield: I think it's good to do a segment on prisons just so we can put that picture of Wayne up each week. Look, we have over two million people incarcerated and Jonathan's right, that's way too many. About a million and a half of those can work. We have some that are too violent, some that are too crazy. Those people should work either in call centers or in the communities; we should find a way for these prisons to pay for themselves. Remember, we have prisons shutting down all over this country right now because municipalities can't afford them. Prisoners are being released early because municipalities can't afford them. If we can do something for these prisoners like valuable community service or create some type of income, it's a win-win for all.
Tracy Byrnes: Yeah I think so, but I think the main concern here though is that you're compromising the safety of firefighters, right? They're really a tight-knit group much like we are here at Cashin' In, and these guys might not want prisoners walking in and sitting down to breakfast in the morning with them. So that could be the downside to the project.
David Mercer: I think it's such a cockamamie idea for us to even be considering when we have a jobs bill that could put teachers back to work, firefighters back to work, put a payroll tax cut back to an extension. Are we saying to firefighters, hey look we may be laying you off and your best route back to firefighter is to go hold up a liquor store so you can be in jail and find your way back to the fire station. Come on that's ridiculous. Let's keep the firefighters there now and bring those back who got laid off.
WHAT DO I NEED TO KNOW
Tracy Byrnes: So the undersecretary of Italy says that the reason the financial markets are totally out of control, not because of the debt downgrade, not because of sovereign debt in their banks; drugs Lori, they're all on drugs. They've got pasta on the brain there in my homeland.
Wayne Rogers: I like Netflix. I own it and I think the way to play that is to sell a deep put and you will be well rewarded.
John Layfield: The jobs plan is dead. They're going to try and pass pieces of it. The only thing that Republicans and President Obama agree on is some extension of offshore drilling. Transocean has a six percent yield right now. They will benefit from a growing number of wells being drilled off shore.
Jonathan Hoenig: Well, I've been watching this Baltic dry index, Lori. It's an index of shipping rates. Last week actually it hit its 2011 high. That's leading me to KEX which is Kirby; a major almost billion dollar shipping company. I own some shares, and I think it moves higher even in this very difficult economic environment.