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YOUR MONEY

Special Election Edition: Your Vote Can Determine Your Economic Future

Aired November 2, 2008 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


CHRISTINE ROMANS, CNN HOST: Welcome to this special edition of YOUR MONEY. I'm Christine Romans.
ALI VELSHI, CNN HOST: The special election edition we've got. I'm Ali Velshi. The presidential election is just days away and you have a vote to help you determine your own economic future.

ROMANS: Make no mistake. Your money depends on how America votes, your ballot will help determine what health care coverage for your family will look alike, what you pay in taxes, and which candidate gets to enact their plan to help the economy get going to stem job loss and create now jobs.

VELSHI: We begin with a look at the future. Specifically, what each candidate is promising to do to stimulate the economy if they take office. Up first is John McCain's plan. To help Americans recover from the economic crises, McCain suggests a $52 billion stimulus plan. He proposes reducing the tax on retirement funds to 10 percent in 2008 and 2009. He relaxed the rule that forces seniors above 70 and a half to start selling off a portion of their 401(k) s and IRAs.

McCain also wants to increase the amount that can be claimed as a tax loss from selling homes or stocks. He's also temporarily cut the capital gains tax in half and repeals the tax on unemployment benefits.

ROMANS: So, what does the McCain plan mean for your bottom line? Here to help us better understand the candidates, their economic plan and how effects your money, we are joined by Lakshman Achuthan managing editor of the Economic Cycle Research Institute an independent research group focusing on business cycle indicators.

VELSHI: Republican analyst Leslie Sanchez joins us as well, a Democratic analyst. Hilary Rosen both of whom are CNN contributes and Avery Jafers (ph) joins us from Washington as well.

Let's start with you, Lakshman, you follow business cycles. We are in a business cycle that's negative at the moment. Does anything in McCain's plan help us get out of this in any way that was going to change the way we were going get out of it anyway?

LAKSHMAN ACHUTHAN, MANAGING EDITOR ECONOMIC CYCLE RESEARCH INSTITUTE: Well, that depends, OK? First, we are definitely in a recession. It's not going to end any time soon. You can't wave a wand and get rid of it. What would be very important is the timing of when any of these initiatives hits the economy. If it hits the economy when it's in a strong downturn it will be a flash in the pan at best. It won't generate a recovery.

On the other hand if you hang onto it for a second and have a stimulus ready and hit it on the economy at a specific time when the economy is starting to turn on its own, it has a huge impact and it can take kind of what we call a very soft u-shaped recovery and make it a v-shaped recovery. That's what you want.

ROMANS: From the middle of the road perspective on the politics of this what does the McCain plan look like? You know, it started out pretty typical, governments hands-off, but then he kind of -- as this crises got moving he's endorsing a $300 billion plan to help people refinance their houses and some other things that aren't necessarily what you would expect.

ACHUTHAN: Right. I think John McCain has been caught the way a lot of Washington leaders have been caught is flat footed and surprised by the scale of the downturn that we've seen and he's moved toward embracing some maneuvers that he never would have embraced in the past, but so have a lot of other folks in Washington because they've been caught so surprised here.

So the key, I think, in looking at this additional stimulus question. The leaders in Congress are talking about after the election, bringing Congress back and putting together more stimulus, I mean, we did stimulus earlier this year and it didn't really work. The question is why leaders in Washington think that stimulus is going to work this time around or is this just an excuse to spend money on some of the things that they've always wanted to spend money on and now here is their political chance to do that.

VELSHI: This stimulus is different from the one we talked about earlier last year which would be giving checks directly to people as you're right, aiming this one involves spending money and there will be sharp differences about how Democrats and Republicans approach the idea of another stimulus package. Leslie, what's your take on that because we've heard from some Republicans that that's a non-starter?

LESLIE SANCHEZ, CNN CONTRIBUTOR: Well you know if you look back to the last stimulus package, a lot of that was about consumer confidence. Was to make sure people felt that the government was responsive and I think that's why you saw a tremendous amount of support and people responded so rapidly.

VELSHI: (INAUDIBLE) Coming together of the parties and getting something done.

SANCHEZ: Exactly. Well in the sense that it wasn't Herbert Hoover. He wasn't going to repeat this dramatic call for action and there is no action. That being said when it comes to spending yes, we want government to be effective and responsive, but we don't want to see it running amok in terms of spending what we don't have. Increasing these deficits on something that's met more to be something for confidence than actually having an economic impact.

VELSHI: That's a good point. Hillary lets bring you in. Hilary Rosen, Democrat strategist. Hilary, John McCain is hitting hard on this idea that if it is a Democratic president, a Democratic house and a Democrat senate running amok with spending might be the future. What do Democrats say about that?

HILARY ROSEN, DEMOCRATIC STRATEGIST: Well, I think you have a worse problem if you have either a Republican president and a Democratic Congress. What we've seen for the last several years is really gridlock where you had a Republican president and a senate that can't -- Republican that filibustered every significant piece of legislation. I think what you need is a very holistic approach and you need it to happen quickly and the only way you're going get that, really s if you have a strong Democratic Congress and a Democratic president.

You have Barack Obama, number one, on this ridiculous charge of crazy liberal spending committing to stick with the pay as you go system that the House and Senate Democrats have stuck with over the last several years. The only thing that's busted that budget has been the president's spending on the war. So -- and on the tax cut, so when you look at Obama's healthcare plan, when you look at his stimulus package, when you look at his tax cut, those are all paid for under the Obama plan. So I think the key thing is to get it moving and to get it moving quickly which won't happen unless you have a strong Democratic president.

ROMANS: I don't mean to interrupt, but I want to talk quickly while we can about the war spending because we are looking at a $454 billion deficit this year, $700 billion to maybe a trillion next year. Where does the war spending fit into that?

ACHUTHAN: Well, in the very big picture and I don't mean to sound very crass here, but in the big picture it's not that much of a percentage of the budget or of the size of our economy. If you look over decades over of our big wars that we've had. I'm not minimizing at all the expense of life and everything else here.

ROMANS: Of course.

ACHUTHAN: However, in all these policies including the war spending and other things that are on the table here, from a business cycle perspective, forget the politics for a second, there are a couple of just factual things to think about. One is that we're in a recession that's getting worse. It's really right now starting to hit state and local governments.

Right. That right now when you're having states and even I saw a story, I can't believe this, but the post office is thinking of laying off people for the first time in its history, when that starts happening in the midst of a deepening downturn, very dangerous, so for the federal government to get some support there could be useful, but then whoever is in the White House and has a stimulus package and there will be one, it is the timing which means whether or not it will be effective or not if it's McCain or Obama. If you time it right you can get a v-shaped economy which gives you jobs.

ROMANS: Everybody stick with this. Everything you need to know about Barack Obama's plan for the economy, what he says, what Barack Obama says on healthcare on jobs and how much you would or would not be paying in taxes in an Obama administration.

(COMMERCIAL BREAK)

ROMANS: Welcome back to the election edition of YOUR MONEY.

We just talked about John McCain's plan and now it's time to take a look at Barack Obama's plan to turn this economy around. In the short-term Obama favors a $450 plan to jump-start the economy and calls for a 90-day moratorium on foreclosures and it's all about jobs and Obama favors a $3,000 tax credit for each new job the company creates in the United States.

Like John McCain, he wants to eliminate taxes on unemployment benefits and allow temporary, penalty-free withdrawals from retirement funds and there are hardship exemptions that this could encourage people to raise their retirement savings.

VELSHI: The two candidates have very different plans for the economy and that's where you come in, you get to go to the polls to decide which direction we are going to head in for the next four years and possibly longer. We'll turn back to our analyst Lakshman Achuthan with the Economic Cycle Research Institute, right?

Leslie Sanchez, a Republican strategist and CNN contributor. Hilary Rosen a Democratic strategist and CNN contributor and Emond Javers, Javers who joins us as well and he's with Politico. Emond lets start with you. It starts to get fuzzy because as you mentioned, John McCain has to on come into territory that he wouldn't typically get into.

The two candidates have almost started a matching program on some of the things while they differ at the edges; fundamentally they're both saying similar things about mortgages or benefits for unemployment. Fundamentally, if a voter is watching this wanting to make a difference, wanting to vote for somebody who is going to make take a difference of their bottom line who is clearer here on the difference?

ACHUTHAN: It's very tricky. It depends on what your perspective is, it depends if your think that we ought to have corporate tax rate cut which John McCain favors or whether you think that the Bush tax cuts from the past administration ought to be repealed which is what Barack Obama favors. You can't really answer that question unless you decide what kind of things you as a voter prefer.

Both of these candidates have terrific Web sites which is detail exactly what they would do in almost every one of these cases, but as a voter you have to remember that there's almost nothing the United States president can do to affect the big issues. One thing that is really on people's minds is home values. Home values have been sliding and most Americans have the majority of their wealth stored in the equity in their house.

There's almost nothing a president can do that's going bring your house value back up to where it was a couple of years ago. They can start to mitigate the pain on foreclosures and other things, but bringing that entire housing market back to where it was, that's just not going happen and it's very tricky for a president to do or to promise.

ROMANS: Hilary, as a Democratic strategist let me ask you quick because I'm wondering what does Barack Obama want to do about so many desperate problems in the economy right now and does he have the ability to do that, if he's ham strung by these deficits and by the financial crises that has basically the response has been dictated by the current administration so far.

ROSEN: That's why I think Ayman is so wrong because there's a widespread view that had the administration been more interventionist 18 months ago when these bad signs started occurring we might not be in the situation we're in. A couple of key things, is when you look at people's homes and when you look at housing values and you look at communities those are affected by several things. They're affected by jobs and they're affected by property taxes, they are effected by you know overall household income.

So look at the places where Barack Obama addresses that. When he says let's give money to cities and states for infrastructure project, that's money that they're having to raise property taxes for now. When he says things like let's put a moratorium on foreclosures and let's regulate the kind of leverages and reserves that banks and other companies need to have for savings that ends up affecting credit availability and whether people can get loans and reasonable loans. So there are a host of areas here where a president that's actually interventionist, that focuses and pays attention to the holistic problem can make a huge different.

VELSHI: Let's take up that point with Lakshman. We've been talking about this for a very, very long time. GDP comes out, it came out this week for the third quarter and it was negative.

ACHUTHAN: Right.

VELSHI: And back when GDP was positive, because when it came out the previous three quarters even though it was negative at the end of 2007 it didn't come out the first time as negative and the White House was out there. They didn't skip a beat saying we're not in a recession. Now Ed says I don't want to use the word recession. I don't want to call it. I don't want to label it. Hillary's right. Timing was everything here. This administration and this Federal Reserve took way too long to come around to the fact that this is serious.

Now, to that point, is that the effect that the president can have by saying this is how serious it is and we're going to take a very close look at this as the show goes on, how serious it is and then saying this is what we do at the right time?

ACHUTHAN: Exactly. I mean, look, there's a lot of water under the bridge that we can't go back and re-write history. So we are where we are which is we are in a recession.

VELSHI: You can get yourself out of it. ACHUTHAN: Oh, no, no, no. There's critical issues on timing and policy. Regardless of the content of the policy of either Republicans or Democrats, it can be timed much more effectively if you understand where the wind is coming from. Is it at your back or in front of you and it's just like when you're in the playground and you are pushing someone on the swing. You don't push them in the middle it doesn't work, you push them when they're at the back and they get a good swing the other way.

Same thing here with the timing of stimulus. The stimulus that was sent out whatever in May or June into the economy, too late. It was a flash in the pan. There's going to be another stimulus regardless of who is in the White House and that stimulus needs to be timed properly in order to get the v-shaped recovery because now we're going back. The epicenter of all of this is home prices and you might be able to do something to keep people in their homes to slow down the foreclosures, but the fundamental thing is jobs where we lost nine months --

ROSAN: It's worth noting that the reason the stimulus ended up taking so long is because the White House for six months resisted doing a stimulus package which is why the point Lakshman makes about going forward, it is so critically important to have a Congress and a president that addresses this in more lockstep.

VELSHI: I want to hear from Leslie from this one, but we need to take a quick break.

But I think the point we are all agreed on is whatever has to happen has to happen in an orderly and expeditious fashion. So we are going to have to discuss it, but hold that thought because we want to come back and continue this discussion.

Two candidates and two completely different approaches to health care coverage. We're going to listen that debate and decide which one might be better for you and we want to get Leslie Sanchez's take on what is going on. Stay with us.

(COMMERCIAL BREAK)

VELSHI: OK, both presidential candidates agree that the healthcare system has got to be over hauled. But they disagree sharply over how to do it. Senator McCain wants to give Americas a tax credit so they can go out and find the health care plan that bests suits their families needs. Senator Obama believes the government should play a bigger role and supports a national insurance program called Universal Healthcare.

ROMANS: A pretty wide gulp between the two candidates on this issue. To break down what all this means for your bottom line we are joined again by Lakshman Achuthan, Leslie Sanchez, Hilary Rosen and Emond Javers.

ROMANS: Leslie, let's start with you; the health care plan of McCain is very, very different than Barack Obama. SANCHEZ: Absolutely. He's basically empowering the consumer versus empowering the government with federal mandates to go out and get this tucked in shirt. He's saying here's $5,000 in terms of refundable tax credit you go out and choose what you need. Critics are going to say look it costs upward of $12,000 annually for families to buy the coverage they need.

There's a patchwork of systems to what health care is in America. There's no easy fix. He is looking at chose, someone that continues to allow people to have choice of doctors to continue to increase the quality of care and there's a lot of concern about nationalizing health care which disincentitising a lot of people to keep investing in research and development and what it does to healthcare overall.

VELSHI: Hillary Rosen, what do you think?

ROSEN: Well, two things. I think first of all, we're mischaracterizing the Obama plan which is not nationalizing health insurance. If you have employer-based health insurance you will still retain it. What he does is for those people who are uninsured there is a national healthcare system based on the one that government employees have that will allow more coverage for people who are currently uninsured.

The big difference is that the Obama plan actually works more effectively in fixing the problems with the current system. Right now companies who don't pay health care costs or who minimize health care costs do so because their catastrophic insurance costs are so high. So the Obama health care plan helps companies deal with the catastrophic cost. Doctors --

ROMANS: Hillary it is Christine quickly, how does it address the skyrocketing cost of health care because one of the things that health affairs magazine or the health journal health affairs magazine found is they didn't feel there was a real addressing of the skyrocketing cost of healthcare.

ROSEN: Well costs containment is a problem, I think, in general in the country and neither plan deals with it directly, but the Obama plan gets at that time more creatively, I think, which is that it says all right, what are the biggest costs. For doctors, the biggest costs are malpractice insurance. What the Obama plan does is it tries to assist doctors on guaranteeing on the malpractice insurance side so that when there's cost containment requirement put into the system doctors are more likely to cooperate.

The McCain plan really is sitting out there by itself. No Republicans other than John McCain is even campaigning on this plan because it does more than just give a tax credit. What it does is it undoes a system of employer-based healthcare coverage that has been, you know, the cornerstone of health insurance in this country and it takes away the tax incentives for an employee's ability to have employer support that.

SANCHEZ: I don't think we should mischaracterize that. It does impose a tax on employers that are providing this type of coverage, but there are also incentives for them to continue to be able to meet those needs. I don't think we should --

Yes, there are, but I don't think we should so easily say this will be a quick fix in this. Because there are a lot of questions about cost. There is a lot of questions, you know, it is interesting you're talking about malpractice, but it's also -- nobody's talking about tort reform and the protections that you need on that side. I just think that there is no easy fix when it comes to the health care problem.

ROSEN: There's an easier fix than what Leslie is saying. The biggest problem right now in healthcare cost is accessibility; 43 million people do not have health insurance. The McCain plan does not address that in any substantive way. The Obama plan does, directly and quickly.

ROMANS: We will leave that subject there for a moment, forget Wall Street, it's your job, your home, your savings, millions of people will be hurt by this economic crises. How to make sure you are not one of them.

(COMMERCIAL BREAK)

FREDRICKA WHITFIELD, CNN ANCHOR: I'm Fredricka Whitfield in Atlanta.

Food and water arrived today at an overcrowded refugee camp in Congo. A shaky cease-fire between government and rebel forces is holding. An estimated one million people have been displaced.

Police confirm that they've found the gun used in the killings of actress Jennifer Hudson's mother, brother and young nephew. It was found in a vacant lot near where the boy's body was found on Chicago's west side. Nobody has been charged in the killings.

The government is warning nearly 400 passport applicants that a security breach may have left him open to identity theft. Most of the applicants live in the Washington, D.C., area.

I'm Fredericka Whitfield. Now back to more of YOUR MONEY.

VELSHI: Measuring the economy might be a science, but what makes the economy tick isn't. The U.S. economy, more so than any other worldwide economy, is based on how investors and ultimately consumers feel. We've taken a long, hard look at five measures of the economy that reflect how things really are out there to see if your fears and concerns are justified. We charted them on a scale of zero to ten, zero being the worst each of them have been since 1980, ten being the best.

Here's what we found.

(BEGIN VIDEOTAPE)

VELSHI: One of the most important measures of how the economy is faring is if you have a job or not. The lowest unemployment rate since 1980 was in April of 2000, unemployment was at 3.8 percent. The highest unemployment rate since 1980 was November of 1982, 10.8 percent. On our scale, today's unemployment rate of 6.1 percent makes it a 6.8. Simply having a job is a start, but if your wages don't keep pace with inflation, you feel that, too.

In 1980, the average income for a man in his 30s was about $39,000. In 1993, the average man in his 30s was making about $32,600 a year. Today according to a study by the Pew Charitable Trust Economic Mobility Project, the same man is making under $35,000, making it a relatively low 3.2 on our scale.

Personal savings is the amount of money an individual holds on to after all their bills are paid. Back in 2005 the personal savings rate was negative 0.7 percent, but way back in 1981, the personal savings rate was as high as 12.2 percent. Right now we save a paltry 1.3 percent of our income, that's an unimpressive 1.6 on our scale.

Industrial production measures the output of tangible goods, a car is made, and a gallon of oil is produced. Back in the fourth quarter of 1997 industrial production saw a quarterly increase of 10.7 percent. That is the high point on our scale. The low point was in the first quarter of 1991 when it was down 7.5 percent.

Right now on our scale, industrial production is right near the bottom .82 and then we come to home prices. Midway through this year home price were down 4.8 percent from the same time last year. The high end of our scale was in 2005, home prices were up about 9.7 percent from the same time the year before. The low point is now. On our scale, home price appreciation is a zero.

(END VIDEOTAPE)

VELSHI: You can look at those numbers, those five measures of how the economy feels to you and you can see if you're feeling bad about it is most of it is clustered down by the low end.

ROMANS: For more, you can check out Ali's companion story the gallery which is live on CNNMONEY.com.

October was a cruel month for the economy and consumer confidence plunged to an all-time low, voters head to the polls on Tuesday scared stiff about recession and what that means for their jobs and their money, but could that sentiment improve after we elect our next president.

For that, we turn to Brit Beemer, founder and chairman of America's Research Group and author of the new book "The Customer Rules." Brit there are so many reasons why the consumer is feeling pretty shaky right now. Once the election is out of the way is that one uncertainty they will get them to spend again or is this the beginning for the consumer?

BRIT BEEMER, FOUNDER AND CHAIRMAN, AMERICA RESEARCH GROUP: Don't hold your breath. You'll see in some impact after the election, but the situation is going to change, and if you look at the fact that most consumers out there don't see any light at the end of tunnel anywhere. They don't have home equity, they've watched their IRA go down and they have watched their stocks go down and the only thing they're holding on to is their job security, there won't be any bonuses and there is not going to be any raises next year for most people.

So, when all of these things are put into play, keep in mind that most consumers will not get into a spending mode until next March, April or May because that's when they'll get the next income tax refund check. It's not a pretty picture.

ROMANS: They're not about to go out there spending the borrowed money because they can't borrow money.

BEEMER: They can't borrow money. Many banks are now lowering credit their limits that consumer had a $10,000 limit and now reduced to $7500, they had a $5,000 balance where before they could spend $5,000 and now they'll spend $2,500 before they're at their limits. So as banks are lowering more credit limits these consumers are even in a tighter crunch.

VELSHI: Think back to 2001 after the attacks, the president came out and said go out, it's your responsibility, spend the money, show that we're not defeated and Americans largely did. It wasn't a bad year, but they did. Then we had the economic stimulus package earlier this year. Similar message a little bit more toned down but go out and spend that money, it doesn't entirely work either.

At this point I've had callers call me and say I feel like I'm told not to spend money right now to save because things are so bad, but it is not going to hurt the economy if I save. I mean what should the consumer be thinking? It is going hurt the economy, but they need to.

BEEMER: They have got to save is because one reason we can't afford these debt levels. The irony is all the old government data on debts is a question. They won't consider if you or I invest in the market they don't have that in savings, that's always investment. The whole calculation, 20 years ago people would buy stocks. We would buy CDs and that was a clear way to be able -- that was considered to be saving. If you go buy stock and they say that's not saving, because that's investing.

VELSHI: Things may not be as grim as that chart indicated when it comes on the personal savings.

BEEMER: Exactly. But the bigger issue is today -- let's look at the Christmas retail season. Retailers more concerned about Wall Street than Main Street and that's why I write a chapter of it in my book because if they'd have more people working in the stores and they'd have better deals. We'll have this huge crowd out on Black Friday. Our numbers say as many as 61 percent consumers will be shopping on Black Friday. Last year 48 percent of them shopped on Black Friday. A normal year is 33 percent because the consumers know that the best deals last season happened on Black Friday.

VELSHI: Brit, lots of good advice and great stuff. I'm looking forward to the read, "The Customer Service Rules" because in the end good customer service is what does well for companies.

ROMANS: All right. So, we're going to tell you how Senator Barack Obama is like Geico. You heard us. Stick around and find out.

(COMMERCIAL BREAK)

ROMANS: The Beatles once wrote that money can't buy love, but can it buy votes. You're looking at the amounts that Senators John McCain and Barack Obama have spent on TV ads in the general election.

VELSHI: How does that translate into winning?

Evan Tracey joins us now he is the founder and president of Campaign Media an analysis group. A media research company for political advertising and he's a CNN consultant. Evan thanks for being with us. Rough math here is this Obama is close to double on spending on TV ads than McCain. What do you look at and see how does that translate? Is it just more expensive because he buys ads in different places? Are we seeing twice the number of ads or twice as long? What are we seeing for double the money?

EVAN TRACEY, PRESIDENT, CAMPAIGN MEDIA: Well, I mean look he's doing a little bit of everything. They're all in the same states right now, the battleground states and Barack Obama we saw this week was able to do 30-minute roadblock buys on network TV and he's had ads that are two-minutes long and he has ads in video games. It's a huge advantage to have this much more money than your opponent and you put a big message in balance.

ROMANS: We will talk about that. You paid for 30 minutes and how much does something like that cost? He got more than 30 minutes didn't he? Didn't he kind of control the news cycle? That was a smart play or were people who were on the fence about him think it might have been overkill.

TRACEY: There's some risk of that, but the reality was this was a smart play because it did take all the oxygen away from Senator McCain for about 24 hours with the new cycle. Basically the pre-game analysis, post game. This really took a lot of time away from the McCain campaign and that's the two things they're running out of is money and time. To lock up this much time for the event itself and the coverage around it is a really big advantage for Senator Obama.

ROMANS: What does he achieve in that 30 minutes?

TRACEY: Well, look, it's a pep talk for his supporters. This is the ultimate closing argument. You can take 30 minutes. You're going out and basically your people are watching this, but there are also some undecided voters right now that are getting a really in-depth closing argument as well as you're firing up your supporters to remind them to go out and vote and take nothing for granted.

VELSHI: From your perspective, who has been more effective, never mind the spending, but the type of ads they're putting out there. TRACEY: The Obama campaign has been very effective, what they've done is they've used the money to their advantage in essence have a tiered campaign in these battleground states. In other words, they've matched John McCain dollar for dollar or probably more in just negative ads, but on top of that they've had a very effective healthcare campaign, telling voters when and where to vote and they've been able to mix in bio spots and respond to expenditure ads so they've been able basically to do everything. I kind of like it, they have the cavemen.

VELSHI: Nobody has really had the ad that everybody talks about.

TRACEY: The closest we've come to that in this election was McCain celebrity spots and that really scored high on both the timing and the message. The Obama campaign what they've done is they've layered in a bunch of different messages and they have not oversaturated any one particular message and everything ends with change. It's like a very good brand argument.

ROMANS: A final thought about the McCain strategy. They have less money to spend and they're spending less, are they spending it well?

TRACEY: Well they've really gained the system very well, with McCain/Feingold. They've used money from the RNC, they've had some independent expenditures, they have used their federal matching funds check and all in all they're getting blown out of the water as far as dollars go and that's made their message almost exclusively negative down the stretch so the perception of the voters is that McCain was much more negative than Barack Obama.

VELSHI: Evan, good to talk to you. Evan is with the Campaign Media Analysis Group. If I were running one of the campaigns, I would have a game changer ad.

ROMANS: What would it be?

VELSHI: I would use the Etrade baby.

ROMANS: Ooh! That's a good idea.

VELSHI: I can't stop watching those ads. For a few weeks I stopped watching them because I was watching all the YouTube stuff of Sarah Palin and Tina Fey.

Leslie, it sounds like the Republican campaign and the McCain campaign has, you know, they haven't been able to spend as much money. Do you think it's been entirely effective? What's been the game changer in your view?

SANCHEZ: I don't know how it cannot be effective. I wrote a piece several months ago saying this could be Barack Obama, the $5 million man, you can run campaigns in Spanish, urban media and he can run media anywhere and that's what he did. You could have Goodyear blimps with signs. You're seeing just about everything, what a gross abuse of fund raising can do in political campaigns. I think two things are going to happen. One after this election they'll go back and review what kind of money is really fair in the process. We don't know where some of the smaller contributions came from. I think there will be a reevaluation of this process. The second part of that is despite the fact there's a tremendous air advantage on the air and ground advantage in terms of grassroots folks it's still a competitive race and that is because people fundamentally, those undecided voters aren't 100 percent committed yet and they'll tip-in their way.

ROMANS: Hilary, how does it apply to people who might be on the fence about Barack Obama, if they see those huge numbers and think, wow! He's not the underdog. He's spending an awful lot of money and he's looking presidential in a 30-minute radio address, but he's not the president yet.

ROSEN: Well, I think the idea of the 30-minute ad was as much about people's comfort level. I mean, you know, one of the things that's been trending very interestingly with this race is that since the start of the general election people want change. The Democratic message resonated but people weren't sure they were comfortable with Barack Obama. I think, you know, in a nutshell, that's what this -- that's what this media campaign has been about. The panoply of issues that he's been able to address and the intensity with which they've been able to spread the message.

I think has given people a comfort level that is going result in him winning on Tuesday because they see him enough now in enough different settings with enough different messages. As Leslie said, addressing their niche issues in a way that John McCain just hasn't been able to do.

ROMANS: We'll leave it there. We have a lot to get through so that you have all of the information you need to cast your vote. We keep urging you to take charge on Election Day. Your savings could hang in the balance. We'll reveal what the candidates have in store for your investments next.

(COMMERCIAL BREAK)

VELSHI: How could Tuesday's election affect your investments? Senator Barack Obama wants to make it easier for you to make early withdrawals from your retirement savings. Senator McCain wants a 10 percent tax on 401(k) and IRA withdrawals for the next year. He was to take it down to that. And both candidates want to suspend the rule on seniors taking required annual distribution from their retirement accounts.

ROMANS: We brought in Paul La Monica from CNNMONEY to talk about the investment strategy that voters should be looking at when they go into the voting booths. Paul, how do these two gentlemen differ on your money, your investments?

PAUL LA MONICA, EDITOR AT LARGE, CNNMONEY.COM: In the case of the early withdrawals and for retirees they don't really differ that much. They both clearly want to make it easier for investors to get money out if they need to and a lot of people clearly need to in these uncertain times.

I think what will be interesting is that because of the possible different policies that you might have under those two administrations there are already some people starting to make bets on what particular stops or sectors could be worth buying in the event of a President Obama or a President McCain.

ROMANS: Let's look at places where they are similar. You mentioned no taxes on jobless benefits and also your not forcing seniors to have to start pulling stuff out of their retirement. Those are in response to the crises right now. Those are not long-term views.

VELSHI: Right.

ROMANS: Those are responsive to the crises right now. What about the sectors then? Are there sectors that do better under President McCain --

VELSHI: And does that even matter in this environment?

LA MONICA: I think going forward it will matter. The credit crises will not remain with us hopefully forever. People I've spoken to have suggested that are different alternative energy stocks, particularly solar, wind that could do well under Obama.

With McCain you could see coal stocks do well because he's been a proponent for liquid coal, clean coal, turning to defense, it's kind of the obvious one, but the usual knee-jerk reaction is a Republican will increase defense spending and possibly less under a Democrat. So, if Obama wins that might not be as favorable for defense contractors as it would be under McCain.

ROMANS: Interesting on the energy front because you've had energy prices come down so much that you wonder what kind of heat there will be next year going into the fire burning underneath -- I'm sorry. Gas prices have come down more than a dollar just in the most recent months, but people at home aren't feeling the --

VELSHI: The same pressures that we were.

ROMANS: Right.

VELSHI: It's a bit of a stimulus. Its money that you didn't think you would have because the last stimulus got eaten up in large part in because of increased energy costs and indebt creased debt cost.

LA MONICA: And right now most likely that's going into the savings rate starting to rise. So what they're saving on at the gas tank they're putting away for a rainy day until they feel more confident. Right now consumers are pulling back and you're seeing that in all of the data.

But what you see during this downturn you see home prices plunging and you see industrial prices plunging, you see gas prices cut, you see interest rates falling. These are all the things that are happening in the context of a recession, looking ahead, on the recovery side, all of those things at some point will turn around and go back up.

So those could be good longer term plays once the recovery gets here. One of the things is take advantage of the low interest rate. It's not only for the household; it's an opportunity for the government itself. Right now, U.S. Treasury debt is hovering around 4 percent. We are sitting on trillions of dollars of national debt. Why not refinance that stuff? For the U.S. government budget that's an opportunity. Put out a -- you could have a 50-year U.S. treasury bond.

ROMANS: Let me bring in the energy question again. I'm interested in this idea of prices coming down that somehow all of those grand plans of the campaign trail about energy independence in the next ten years and these changes to the economy; maybe they don't have the political will for that anymore.

LA MONICA: What you have to remember about this is that voters are not always a leading indicator, they don't sort of respond as the price goes up and down penny by penny. Voters got the enormous shock of the high gas prices over the summer. They're still shocked and they are going to go under the voting booth still feeling the reserverations of that even if the prices has actually come down as much as a dollar as we've seen. The rhetoric on the campaign trail still works and people will be thinking that when they go into vote.

VELSHI: Yeah I think you are right. I don't think people are going to run back to their SUVs and things like that. Hang on to all of you. We are going to get your final thoughts of what is going to happen on Tuesday. But first here is this week's "Right on Your Money."

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SHEIRESA MCRAE, CONSUMERS AFFAIRS EDITOR, BLACK ENTERPRISE: Generally, Americans aren't great savers. According to the Bureau of Economic Analysis, Americans save less than three percent of their disposable income.

UNIDENTIFIED FEMALE: And many cash strapped consumers are now wondering about their financial future.

MCRAE: The economy has greatly affected how people are saving with tomorrow in mind as opposed to three from now.

UNIDENTIFIED FEMALE: You should have money put away to cover at least three to six months of expenses.

MCRAE: This is very important to build a savings. Especially if you come into a point in your life where you have an economic crises.

UNIDENTIFIED FEMALE: Before you start to save, put it down and create a budget.

MCRAE: Keep track of everything that you spend every day. This will help you decide what's going toward needs and how much is going toward wants.

UNIDENTIFIED FEMALE: Then make saving money a habit.

MCRAE: One way to build your savings is by treating your deposits as if it were a bill and staying committed to that deposit, paying that amount in full each month.

UNIDENTIFIED FEMALE: And that's this week's "Right on Your Money."

(END VIDEOTAPE)

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ROMANS: This is the information that you need to have to figure out what's best for your money in the voting booth.

VELSHI: What we want to do is we want to ask our guests to give us a brief of what you want our viewers to take away and take it to that voting booth when they get there. Hilary lets start with you.

ROSEN: I think that so much of this is about people's gut instinct about change. We have seen two candidates on the campaign trail for a long time talking about their commitment to doing things differently, but one has been around a really long time and had a lot of chances on the issues that matter.

And to take leadership roles and votes that will make a difference and John McCain didn't. Barack Obama is fresh enough. He understands, in a very specific and organic way, the needs of American families and the economic crisis we're in. That's why I think he's going to win on Tuesday.

ROMANS: Leslie, 45 seconds.

SANCHEZ: Despite the voter fatigue and that this should be a Democratic year for everything else; the race is still very competitive. Part of it has to do with as fabulous an inspiring message that Senator Barack Obama has, just doesn't have the leadership and experience that makes people feel comfortable to go to Hilary's point.

I think part of the closing of the gap; McCain has done it on taxes and spending. This idea of spreading the wealth will hurt small business; it is really going to have an impact in hiring and growing those jobs in 2009 particularly in the most immediate time and also cutting in defense spending.

VELSHI: Let's go to -- Eamon, you have to give me 30 seconds and not use the word depends. Which one of these is better for the American voter when it comes to their money?

ROMANS: And no on the one hand.

EMOND JAFERS: It depends. Call me a horrible cynic, but what I would say is this look at the plan that both of these politicians and take them with a large grain of salt. They are both offering up a lot of promises on the campaign trail, but what they would actually be able to do in the White House may be very different.

It may be curtailed dramatically by the economy and by negotiations with Congress. So look at these promises as sort of the ideal direction each candidate would like to go, but lower your expectations because that's where the rubber meets the road and that's where they'll hit the reality wall in 2009.

ROMANS: Actually, we said that over and over again, I mean if both of them got everything that they wanted, they couldn't, right?

ACHUTHAN: And we're still in, no matter what happens on November 4th, we're still in a global recession. We haven't had this since the early 80's. It's a bit of a tough time. We don't have an upturn in sight. The hallmark of the rescission is the weak job market. Also an understanding the business cycle is continuing to go down.

VELSHI: All right and because Paul La Monica, our editor at large at CNNMONEY.com, he's going to write a lot over the next few days. He has his coffee cup there on the Web site. One thing we don't need a vote for, the majority of you out there say the economy is issue number one and we here at CNN are committed to covering it for you.

ROMANS: E-mail us your thoughts, your questions, your concerns at issue1@CNN.com.

VELSHI: And make sure you stick with CNN for the best political team in television.

ROMANS: Election Day coverage starting on Monday, "AMERICAN MORNING" at 6:00 am Eastern and going non-stop live until the vote determines who the next president of the United States will be.

VELSHI: We will see you back here next weekend.

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