tv Your Money CNN September 23, 2012 3:00pm-4:00pm EDT
the economy is stupid, so what do president obama and mitt romney say they'll do to fix it? that's the problem, they're not saying enough. with only 50 days to go until the election, they aren't saying enough. he's been warning you about the coming economic storm and you're feeling it. two-thirds of voters believe economic conditions today are poor. that's according to the latest cnn poll, and it could get worse. while clouds are brewing in asia beyond our control, the storms gathering in washington are of our own making. i'm talking about the fiscal cliff, the tax hikes said to take effect in january.
january 1st they could push america into another recession. let's not forget jobs. 12.5 million people without them, because nothing is more important to our economic recovery than john creation. you can blame whoever you want for causing the state of the economy, but today's downturn is persisting on president obama's watch. so you would think romney could make the change desperate for people to fix this economy. candy crowley is anchor for "state of the union." let's show you a clip on the comedic take of this election. >> the economy is in the tank. the job market shore ribis horr. our campaign has a secret weapon. >> i understand the campaign facing americans. for instance, one of my horses failed to place at the races, so i know hardship. >> what is it about mitt romney that is allowing the president
to escape being dragged down by this economy? >> there are a couple things at play, and that skit is actually right, part of it is mitt romney himself. whether it is true or not, and certainly the romney campaign will argue it is not. people look at him personally and think, he doesn't understand someone like me. he doesn't understand someone in my situation. that's always a critical question that folks ask themselves, and the pollsteres, in fact, ask people who best understands the needs of people like you? mitt romney doesn't do well on that. they think he's either too rich or too out of touch or doesn't understand what it's like to grow up tough. i will tell you the other thing that's playing into this election, that poll that you showed is really interesting because it's people saying, we think things are really bad now. you think, well, then, what in the world constitutes all the support for president obama? and when you ask the question how do you think economic conditions will be in the future, it's almost the reverse.
67% think a year from now the economy will be good. so if you look at that, it certainly helps explain as well why president obama continues to do well, because people clearly think that a year from now the economy will be good, and in that case, why do you then change the horse midstream and all those cliches we use when talking about an election. >> so the president is connecting better with voters, and at the same time they think things might get better down the road. with me, the world's leading authority of financial crises and steven moore, the writer with the wall street journal. steven, we asked who had a better handle on the kmi, and president obama was one point higher than romney. you're the 1% that wants to give
romney a shot on the economy. >> i think candy nailed it. it is true that two-thirds of americans think the economy is in rotten shape now. but on election day, if people feel like things are getting better, there is no question barack obama will win this race. >> do you think they are getting better? >> they are getting better, but it's a roller coaster ride on this economy. it's also reflected not just in the polls that candy talked about, but the confidence numbers seem to be rising a little bit. the stock market has been great the last couple weeks. they love this cheap money, as we talked about last week. but i think mitt romney has to basically say, look, i'm the candidate of the middle class. >> can we not talk about race or religion or personal things, and that has made it less likely for romney to connect with people? >> it's a problem for mitt romney. even in the republican primaries, he was only getting 35 or 40% of the vote in a pretty weak field. the democrats are very good at feeling your pain.
remember, that was the line. barack obama is very good at that. what mitt romney has to do in that critical debate coming up in a couple weeks is say, look, i'm not as styled as president obama, but i know how to create jobs and i' jobs, and he hasn't done that. >> there is a picture from both of these candidates what the next four years will look like. what do we need to hear from them to say they know how to fix the fiscal cliff in the short term that's running rampant in this country? >> it's really hard to ask the candidates to give specifics when the voters don't want to hear it. >> why don't they want to hear it, because it's going to hurt? >> yeah, it's sort of, well, what has to happen to our taxes if the government is borrowing so much? they have to go up. but not mine, right, somebody else's taxes have to go up or some program i want has to change. that's why you have the fiscal cliff coming up, because they can't agree on what to do.
so of course they don't want to be specific. they want to have everyone think they're going to help them when at the end of the day somebody has to pay. that said, there are improvements on education, the infrastructu infrastructure, things that could be done, but candidates are really afraid to talk about it. >> candy, it's so interesting because the vagueries have been maddening because there's a lot i'd like to know about his taxes and his tax policies, quite frankly. but vagueries, they don't hammer you on something if you're too specific. >> exactly, they just put a big old target on your back. obviously the more someone knows about what you want to do, the more people will oppose that. there might not be copious amounts of people but there will always be people that make an amount of noise.
it gets to a pretty important question here because i don't care how many specifics these candidates would give you that would satisfy you, christine, they can't do it by themselves. they don't make the budget. they can't pass tax reform without a congress that they can work with and vice versa. so, to me, you say here's the direction i want to go, and here's how i'm going to make this happen. the fact is, what we're stuck with here -- not stuck with -- three branches of government, it's worked so far, but the fact of the matter is they can't say what they're going to do because they don't know who they're going to be working with, and neither one of them has yet told us, president obama, how is it going to be different, and governor romney, how do you intend to work with a congress, particularly in the senate, that's going to be pretty close? >> you know this, you've been covering politics as i have for a very long time. this does take presidential leadership, and the fact we haven't had a deficit deal over
the last three or four years with 1 or $2 trillion deficits year after year, that's partly due to leadership in this white house. let me just say one thing, if i can, to defend mitt romney. it is true he hasn't been entirely specific about our tax bl plan, and that's the point candy is making, that's all anybody is going to be talking about. obama has almost no plan at all. all he's talked about, christine, we know he wants to raise taxes on the rich, and we know he wants another $100 pi billion stimulus plan. is that it? is that all we get in the second term? i wish you all would be tougher on obama and saying where do you cross your t's on the fiscal plan? >> no incumbent has been reelected in an unemployment rate at 8%. >> true that, except for that's a fact and figure. let me just point out that i think both of these candidates need to say how they intend to
work with congress, not just mitt romney. clearly president obama has a record of either doing or not doing things that he needs to address vis-a-vis congress. but i think that this is a common complaint that you hear from conservatives that the media just doesn't go after the things that president obama has done wrong, and certainly when you look at that 8%, i don't think it actually -- you know, history is made to be broken, precedents are made to be broken. i don't know that 8% -- i think people have figured that in to their equation. i think people know when they go to vote the unemployment is going to be high. so i don't know that it changes between now and november. >> candy crowley, we'll watch your show this weekend. thanks for being here. coming up, the unemployment rate has been stuck above 8% for three years. at this point in the recovery, it really should have been more like 7%. instead, the people you're paying to solve our problems are preventing it.
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if there's one thing we can be uncertain is that markets hate uncertainty. and it means job loss. a new report from the san francisco fed quantifies how heightened uncertainty about workov over the years heightene the job loss rate. in 2008, the job rate was at 8%, which was good. it led to hires and layoffs and a pullback from investors and
here's what happened. unemployment jumped to 10%. researchers at the san francisco fed suggests that unemployment could be as many as 2% lower if not for the current uncertainty of the economic storms that could hit america's shore, especially that fiscal clip. that fiscal clip is a result of your political leaders playing a very dangerous game. now, speaking of game, something you probably do not know about harvard economist ken rogoff. he is an international grand master in chess, a title he learned as professional chess player in his youth. last month ken even played the world's top rated grand master to a draw here in new york. this is big news in the chess world, folks. ken, you described to me last move a chess ma yoouneuver calle force move. tell everyone what that means and how washington has been
reduced to a force move. >> magnus carlson, by the way, is an incredibly talented chess player. force move in a chess game is when you find yourself in a position where you've backed yourself in a corner and there's nothing else to do. thael that's the way we've run the government where there is nothing else to do, so they punt and there is no long-term strategic vision. >> what do we need to do to fix the fiscal cliff? that feels like a forced move situation to me. >> they're waiting until there's nothing else to do but extend it in four months for some way for the status quo instead of really thinking about how do we fix the taxes compares, really, the problem much less than things like moving ahead in infrastructure and education so we can compete in the 21st century. they're just frozen. this incredible gridlock and
this disagreement, lack of leadership in many ways. it's a very, very bad situation for the united states. >> allowing our own congress to check our cleaners. checkers or chess? >> i'll tell you this, christine, i'm not going to play ken rogoff in chess. he's the grand master. this is the political system. they always put off these tough decisions until the last minute. i'll give you a little point of optimism, that this week, the house and senate -- >> went home? >> not quite, that's next week. they had a hearing on what to do about this tax system that ken and i have written so much about that's such an a bottbomination albatross around their neck, but at least they agreed we have to fix this thing. they said next year we got to do this. you can hold me to this promise.
i think 2013 they do something really big on fixing the tax system. they have to do something with the a and t, the tax cliff, all this stuff comes to a point. when will they fix it? when they're right up against the abyss. >> i think if there is a really undivisive election vote, the democrats win across the board. i'm just not so sure what they'll do if we get stuck in the middle. >> what if you have an obama second term and you have a really em boldened tea party in congress that says we will not raise taxes. >> we've talked about this the last couple years on the show. there is a wide gulf in these two parties in terms of what they stand for. >> do you have that in your party, too? >> i think the republicans are against raising tax rates, they want to change the entitle mmen. >> they're more pragmatic about it. >> it's true, if barack obama
wins the election, he will have a voter mandate to do the things he's talking about. the tax rates probably will go up if barack obama is elected because he'll say, look, we had an election about this, i won, and i can do it. >> what if mitt romney wins? >> then i think the chances for tax reform are even higher because this is a top priority for the republican party. we did this in 1986 -- that was a long time, but it was bipartisan, and you know what? that passed. you want to talk about bipartisanship? that bill that raised the taxes 20%, it won 97 to 3. when do we have that kind of consensus? >> we're raising taxes instead of lowering them which makes it difficult all the way around. >> don't be so tough on mitt romney. >> i'm tough on everybody. that's my job. i would like to see tax reform in 2013 and i'm trying to figure out how in the world is the easiest way to get there.
i didn't mean to embarrass you, but i love trying to play chess with you, and i was delighted to see those pictures. leaders in washington are nowhere near an agreement on the fiscal cliff. one thing politicians tend to agree on, the need for energy independence. so how would president obama or president romney get us there? we have that story next. are you okay, babe? i'm fine. ♪
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so i brought it to mike at meineke. we gave her car a free road handling check. i like free. free is good. my money. my choice. my meineke. governor romney and president obama agree. they do. both stress the need to scale back this country's dependence on foreign oil. but as ali velshi explains, they have very different ideas on how to do that. >> america's dependence on foreign oil has gone down. in fact, in 2010, it was under 50% for the first time in 13 years. >> in eight years, we're going to get north america energy independent where we don't have to buy any oil from the middle
east or venezuela a. >> they're both right. 45% of the oil america consumes is kborimported. it's largely due to the recession and america's energy boom. in fact, the united states is the third largest producer of oil in the world today, and oil production has jumped 13% in the last three years alone, largely due to advances in technology. hydraulics fracking can now extract oil and gas trapped deep in shale rock and deepwater drilling in the gulf of mexico is bringing even more oil to the market. even with those advances, america, the world's biggest consumer of crude oil, still needs more than it produces. 29% of america's imported oil comes from right next door, much of it from the rich oil sands of canada. another 19% comes from mexico and venezuela. only 14% of america's imports actually come from saudi arabia. both president obama and mitt
romney want to wean america off its dependency to foreign oil, and they agree that expanding domestic oil production is crucial, but there are key differences in their approaches. >> meeting the goal of cutting our old dependence depends largely on two things. first, finding and producing more oil at home, second, reducing our overall dependence on oil with cleaner alternative fuels and greater efficiency. >> president obama wants to curb consumption. in august they proposed fuel economy standards for cars that would average 54.5 miles per gallon by 2025. and he favors alternative forms of energy to replace oil. at the same time, he has opened up new areas of drilling in the gulf of mexico and says he'll do the same in the arctic. romney says he'll move to open up the pacific and atlantic coasts to drilling, something president obama opposes. >> we're going to open up federal lands to really take advantage of those free
resources. [ applause ] >> and this is not just talk. >> romney's drill everywhere approach is unlikely to reap new bounty, though. more than two-thirds of the country's oil and gas is currently available for drilling. america is working toward energy independence in the long run, but for the time being, it will still depend on oil imports regardless of who is in office next year. ali velshi, cnn, new york. >> and that's a pretty broad look. it's going to take more than sound bites to become energy independent. we're going to tay tay look at what it takes, what it costs you and what will lower your gas prices and lower your electric bill. hmm, it says here that cheerios helps lower cholesterol
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so goafter you jumpedm today buship in bangkok,n.. i thought i'd lost you. surfing is my life now. but who's going to .... tell the world that priceline has even faster, easier ways to save you money. . . on hotels, flights & cars? you still have it. i'll always have it. so this is it? we'll see where the waves take me. sayonara, brah! there is a great need for repairing what's broken in this country, and it's going to take a lot of money and a lot of time. ali told you last week that the
american society of engineers gives u.s. infrastructure an overall grade of d. roads and businesses need to be repaired, we need new school buildings, updates on our air traffic control systems and more internet access. but before we talk about doing any of that, we need to address our energy situation. ali just told you that the candidates have plans for making america more energy independent. but what may be even more important is fixing the system that gets that energy to your house, to your business, or to your car. last year the average u.s. household spent $368 a month on gas. that's up almost $90 a month since 2010. the average electric bill was over $110 a month. that's also up from the month before. what's behind the rise? here's what moves gas. 10% of the cost comes from crude oil. ilts the main reason for all the price fluctuations at your local gas station.
12% are taxes, refining 15% and crude oil is 65%. what goes into making it? 48% is produced by combusting coal, 22% from natural gas. 20% is made by nuclear power plants. 6% is hydropower. 3% is renewable sources like solar and wind, and only 1% comes from oil. steve is the author of red alert. how china's growing prosperity threatens america's growing life. prices are going up. most of our energy is produced by coal. our energy infrastructure is in poor condition. on this we agree. america is the strongest country in the world, yet energy is still a very big problem. steven, you said the big fix starts with something called the smart grid. explain. >> well, the smart grid will allow us to do many things,
christine, but among them, it will allow us to monitor electricity and how much we should be using. we waste a lot of electricity. so we'll put meters in people's homes that will allow the monitoring of electricity. we do have the technology, yes. the other thing, and this is probably even more critical. when you hear that he see and dates speak and all these sound bites and listening to all these conventions, you never hear the word water mentioned when you're talking about energy. well, energy is the second largest consumer of water. now, america is in the midst of a major crowd. we need all the sources of energy we can get, even those that are not water dependent. like solar. solar is probably one of the few energy sources that is not dependent on water. why do i bring this up? because the smart grid allows you to integrate all these different sources of energy.
this is what china sees, china gets. china will spend, between now and the end of this decade, probably close to $2 trillion on our smart grid. they get it. their plans is by 2020 to have 50% of the cars sold in china, 10 million will be hybrid. and they will get their juice from the grid, their smart grid that they're putting up as you and i are talking. >> that's why it's called the smart grid. everybody calls it the smart grid for a reason. if we produce oil here, and that's what smch of the campaign is about, right -- will prices stable. >> for several years i've led this project called planet forward. we look at all the energies out there, and the biggest development without question is what's happening. you pointed it out on the
natural gas front. the fracking. we are in a new century here. i completely agree what was just said about the smart grid, but the other thing that's really missing from what the candidates are saying is a serious national energy policy. we -- getting a clean diesel car r, when i went to the pump it was 7 or $8 a gallon, so people drive that kind of vehicle because it's there, and there is a government decision to raise those taxes to make them do it. if you go to brazil, every gas station in brazil has a pump that pumps just ethanol or alcohol. these are big decisions made at national government levels that can drive this kind of energy equation, and it's really what
we lack here. we're paralyzed. >> we know there is a pauf for. how will investing energy products. wait, i don't want my money to go somewhere that's going to benefit a big oil company. >> it's right in the middle of the debate here in the political season. how it is paid to taxpayers brings the prices down. and that's an example of what i saw. if your bill was 180 in the month in the wintertime, it's 60 now. uf the so built and you have the ability with these, for example, to be selling back to the grid or if you've got solar panel oz your roof. there are unbelievable benefits to consumers, never mind the environmental benefits and others. the energy discussion is a great discussion to have, and it comes right into every person's home
or into every factory. we just need to have it with a little bit of logic for a change. >> i agree with much of what frank says and i certainly agree with his heart. i think his heart is definitely in the right place. >> i'm glad to hear that. >> there's no doubt about that, frank, i really do. >> we all mean well, let's just establish that. we all mean well. >> first of all, though, when it comes to fracking, we have to get real about this. we have to have a real serious research discussion about it. it needs a lot of water. the marginal cost of fracking is extremely high. there is not one company dedicated to fracking now that is actually cash flow positive, as free cash flow. the biggest fracker right now for oriole is a company called continental resources. they're in north dakota. guess what, they're make ag lint of money. when you take out the money they have to put in for capital expenditures, they have to
borrow money every year. they don't have enough money to sustain it. a lot of this stuff on fracking is a dream. it provided tremendous amounts of water. it's not that there's not a spot for it, there is, we just need to have more serious discussions. >> when you talk about energy structure, seriously, there are so many different aspects to it incredibly important for consumers, for regulators. thank you, both of you. coming up, education is the shelter of the current economic storm, but is our situation pitting students against unions. the battle for economic storm continues on. [ male announcer ] does your prescription medication give you the burden of constipation?
on this program we've warned you about the coming economic storm, clouds rolling in from europe and asia. there's thunder and lightning from our own government's seeming inability to avoid the self-inflicted wounds that caused the fiscal cliff. let me tell you what i think is the biggest shelter from the storm. education. it is vital to america's economic security and to our children's hopes for a prosperous future. last week students in the third largest school district finally went back to school eight days after chicago's teachers went on strike. a deal was struck. >> taxpayers pay more but our kids got less. this time our taxpayers are paying less and our kids are getting more. >> but are students really winning? nick kristof is a two-time pulitzer prize for the "new york times." nice to see you, nick. >> good to see you. >> you say america's education system is just transmitting inequity from one generation to
another. that's why we need school reform. did we get it in chicago? >> we're inching toward it. one of the things i think the chicago debate really underscored is the degree to which the democratic party has been separating itself from teacher unions and gradually embracing the mantle of education reform and school reform, so we're making mild steps toward it, but there's a long way to go. >> i want to you listen to the president of the teachers union after this deal was struck in chicago. >> this sort of idea of corporate efficiency that's been pushed toward schools, that's a problem for us. so it's not good for kids. i think people don't seem to understand that. >> so nick, in the private sector we're graded on results. the teachers say that just doesn't work in education. and one of the reasons they are working in schools with high levels of poverty, so it's
difficult to grade the performance of the teachers. what do you think about that? >> i think the teachers have a good point, that the real problem or the biggest reason for failed schools is not bad teachers but is poverty. and i think it's also true that critics of unions are too quick to say the problem is is just unions'. those in the south tend to have weaker schools than those who do. still, in the process, there's been huge settlements of the merging and the teachers make a huge difference. the best study of that came out from harvard researchers, and it shows that a bottom 1% teacher was equivalent to having a teacher in class for only 60% of the school year. which of us would want a teacher, in effect, absent for 40% of the school year? >> replacing a teacher at the
bottom, 5% with an average teacher. it was a lifetime collection of earnings for the whole class. but how do you find out who is the good teacher and who is the underperforming teacher. >> i think now the unions are acknowledging, okay, teachers make a difference but it's very difficult to identify who is and who isn't. the truth is, a lot of the teachers' colleagues know that, but there's been less and less of a performance to weed out popular teachers. measuring where students stand at the beginning of the year and then at the end of the year and showing how much margin of improvement they had. surely there are difficulties with that. if you have three years of data, then in am cases many, the same
teachers seem to raise their employment system the most. or you can love the profession of teaching, which is, by the way, the larnlest profession in the country. 3.2 million teachers, but you also want. >> yeah, that's right. ultimately i think teaching needs to look like many other white collar professions. better paid but with less job security. right now it's poorly paid but with tenure you would have much better job security. i think we would be better off paying much more to attract really good quality of teaching, hold them to their performance, hold them accountable with that
situation. coming up -- >> my family is in that middle ground where they don't make enough money to fay for my entire education. >> i'll explain why congress may pose the most immediate threat to u.s. education. i mean you feel me right? yeah. uh, sir... ah... [ male announcer ] layaway's back. earlier than ever. through december 14th. walmart. [♪...] >> announcer: with nothing but his computer, an identity thief is able to use your information to open a bank account in order to make your money his money.
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♪ ♪ one, two, three, four ♪ you say ♪ flip it over and replay ♪ we'll make everything okay ♪ walk together the right way ♪ do, do, do, do you can't afford to go to college but you can't afford not to. tuition is rising, so is student debt. that puts college out of reach for some families. it leaves others saddled with debts they can never pay off. those families are banking on president obama and mitt romney to help make college affordable. when jackie graduated from brown university this year, she put off going straight to medical school. instead she took a research job at sloan ket tering hospital. >> it's nice to have a paying job where i can pay back part of my student loans before going to med school and perhaps adding on
a lot more. >> reporter: and she had plenty of them, $100,000 worth. why? her family is middle class. her mother works in a school, her dad owns a bar. they're considered too wealthy to qualify for many grants, but, she says, not wealthy enough to have saved the money for the more than $50,000 a year to attend brown. >> when you're in the middle class, you are a normal suburban family but you don't make this enormous, outrageous amount of money so you can't pay outrageous prices for tuition, you know. >> she's not alone. tuition debt hit $2 trillion last year. even debts for colleges grew 68% last year. a key issue for young voters. >> i want to make college more affordable for every young person who has the initiative and drive to go and make sure they're not burdened by thousands of dollars worth of debt. >> reporter: president obama has expanded pell grants and cut out the banks as middlemen for
loans, allowing the students to borrow directly from the government. now they slow tuition growth by increasing state grants, yet he needs congress to help fund that. >> i'm not going to promise some free stuff that i know you're going to end up paying for. what i want to do is give you a great job so you'll be able to pay it back yourself. >> mitt romney's plan to help students, remove burdensome regulations and get the government out of the student loan business. romney says the flood of federal dollars just drives up tuition. molly corbett broad says that the recession's heavy toll on the state budget is also a factor. >> when the state reduces its support, the only place to turn for most colleges in the public sector is to increase tuition. >> a lot of people who don't have students in college or don't have kids my age, think, oh, you're either wealthy enough
to go to college or you get financial aid from the government, it's that simple. but it's not that simple. >> jackie won't be the only one left out in the cold if the u.s. falls over the fiscal cliff, that fiscal cliff that will hit at the beginning of next year. some of the education programs will hurt at risk students. pell grants are safe for next year. but most federal aid grants face an 8.2% cut. programs that support research would also be scaled back and while congress is busy doing nothing, the rest of the world is moving forward. u.s. college situation rates are the highest in the world. the rest of the world is catching up quickly and may
surpass the u.s. for high school graduation, the u.s. ranks much worse, 22nd out of 27 countries. and just 29% of students in the u.s. whose parents didn't graduate from high school will go on to finish college. that's worst than every other country except new zealand and canada. an obama boom or a romney rally. how your vote may put money in your portfolio. the stocks to pick if you think your guys is going to win in november.
stock market. the stock market rose by 54% in his first term and it went up even more during his second term. take a look at president clinton, during his first four years in office, the whilshire 5000 nearly doubled. growth was good during his second term. take a look at this. we're taking a look at president reagan, the hero of american
conservatives, the stock market rose by 54% in his first term and it went up even more in his second term. the same thing happened with george h.b. busch. look at president clinton, the whilshire nearly doubled. then we come to the most recent president bush, america's first and only harvard mba president. he had to deal with the bursting of the tech bubble. that pushed the stock market down during both of thisz terms. the market is now up 96% under president obama. i have said over and over again that presidents get too much credit and too much blame for the economy. you should vote for the candidate you want, don't vote because you think your stocks are going to go up. but that doesn't mean that the president has no effect. i want to bring in paul lamon
can. i want to start with companies that export to china. mitt romney and president obama have both ramped up their rhetoric about china. but you say this sector, companies that export to china, paul, could do better under president obama. >> most people believe that if president obama was re-elected, there will be a little bit more of a cooperative tone with china. he has obviously talked tough and taken actions against china because of concerns about, you know, trade, but i think most people believe that he won't have as hard a stance, and that will better for companies like coach, tiffany, ford and again motors. >> and we'll look at hospital
stocks now. an obama win in november means that obama care is here to stay. >> with the supreme court already upholding the affordable care act, a lot of people believe that if president obama's re-elected, you could have hospitals benefiting are from just the millions of americans that will have coverage and will be able to go as insured patients any time they need to. >> mitt romney has vowed to overturn obama care, that would be a win for medical device companies, you say? >> there is a tax that medical device companies pay and there are some firms like nettronic and st. jude and they are afraid this will affect them going forward. if mitt romney wins, there's a greater chance that some if not all of the affordable care act could be overturned and