hello ?! if youbank doesn't let you talk to a real perso24/7, you need an ally. hello ? ally bank. no nonsense. just people sense. sandra: that's all that "money" that we have for you today. "the willis report" is next. gerri: tonight, new fox news poll puts mitt romney ahead and a new study on who might win the electoral college. it is a real eye opener. and debit cards for the rich. we will tell you all about it. welcome to "the willis report." ♪ ♪ gerri: hello, everybody. i and gerri willis. it may be the dog days of summer, but there are lots of economic warnings out there for anybody paying attention.

is our economy about to tip back into recession? to me now is john taylor, stanford university professor of economics and senior fellow at the hoover institution. they keep coming back on the show. just this week, the congressional budget office said that recession is likely if the automatic tax increases scheduled to go into effect at the beginning of next year happened. you said the recession is a big threat to the economy right now. what is your latest.? >> growth is already quite low. we are coming into this at the last quarter, just 1.5%, it won't be too much better in the current quarter. already very low. if there is a big tax increase, there is no question but that is a hit to the economy. we hope that won't happen. hope we get over this fiscal cliff. it remains to be seen. gerri: i guess the devil is in the details. one of the reasons the economy is weak is because no one can project where it is going next. as we show right now on the screen, we are going to hit

$16,000 in federal debt shortly this weekend. that plays a role as well, correct? >> that is correct. what needs to be done is to put in a policy that reduces spending gradually. he gets that debt down and keeps it from growing so rapidly. it makes sure that we are not going to increase taxes and a clarity in that sense. the question is whether we can do it politically. gerri: romney today on the campaign trail had this to say about his economic plan. >> i am not looking, as i know the obama people want to say, to reduce taxes for wealthy people. i'm looking, instead, to lower tax rates and limit deductions and exemptions in such a way that we have enterprises, small businesses, able to keep more of their ca at pital,e same time, simplify their code. gerri: john, you are part of that romney kitchen cabinet --

the economic advisors. giving him advice on how to handle the economy. does he ever right here? >> absolutely. what is holding the economy back his concerns about tax increases. he can put in place a policy that rules out out and actually reduces marginal tax rates and extends the base, that encourages firms to hire, take some of the cash and put to good use, it encourages the things that we want and that is more economic growth. the economics are pretty clear. and i think that the way he lays this out is pretty simple. we need to move ahead with this kind of program. gerri: there are questions about whether romney is being clear about the plan. do people really understand what he is promoting your? the president, of course, calling his plan "romney hood" because it is robin hood in reverse. folks that are in the middle class will end up paying for tax cuts for the wealthy. do you agree? >> no, i don't think that is the case at all.

it is basically made up by somebody else's calculations. they try to make some assumptions, that is not part of the plan. the plan is to reduce marginal tax rates and tax rates across the board. 20% across the board. that will help everyone. most importantly, it will be necessary to do this to increase economic growth, which has been so low the last few years. that is why unemployment is so high, especially long-term employment. it is the right thing to get an employment down. what we have been doing recently doesn't work. >> the pew research had an amazing study on the middle class, talking about not only incomes, but also the middle classes in 20% of the net worth over the last decade. i don't feel like either candidate is really talking about what to do to help the middle class. what should they be talking about, and what do you think

mitt romney is going to attack next on this topic? >> of course come governor romney, when he describes this reform plan to reduce the debt and get our regulations to get economic growth going -- the unemployment rate affects middle-class for lack of job opportunities. lack of job opportunities and economic growth affects the middle class. all of those things that you can do to get a faster growth rate -- like we've had in past expansions and in the 1980s, that is the way to help the middle class. it has helped them in the past and will help again be one john taylor, thank you for coming on. come back anytime. >> thank you. gerri: when mitt romney takes the stage at the gop convention, will i be on hand or on the events going on outside the convention? let's ask doug schon. >> thank you for having me, gerri. gerri: who else is going to get the spotlight next week?

we have a lot of tea partiers, the vice president, as a matter of fact will be there. what do you expect? >> the republicans are going to try to stay tightly focused and scripted on specifics a plan for the middle-class to flesh out what john taylor was just talking about. precise examples, real-life people. the democrats would like political theater. they like the tea party to be fighting with the mainstream republicans and the vice president tends to the pot, so much the better, gerri. gerri: there is another contingency and that is the 15,000 journalists that will be covering the convention. they are also the folks who want a good story. therapy when it's out there, if ron paul is out there, they will definitely be covering in. >> gerri, you could not be more right. there is the tea party effort trying to bring in more antiestablishment republicans. into the process. the republicans led by mitt romney want to keep it tight and focused.

the tea party would like the antiestablishment forces to be prominent. you mentioned some of them. the bottom line is that the press wants a story and the story they want is not inside. gerri: absolutely. you mentioned tea partiers won attention for their candidates. tea party.net has an advertising campaign. they show kerry and to encourage and sir palen. these are people they want to speak and are not speaking. is this going to get traction? will this get some momentum beyond the tea party? this could really make it difficult for the party. >> there will be 15,000 journalists looking for a story. it may not be who is in the hall, but who is outside the hall. newt gingrich, ron paul, sir sarah palin, most especially, is

the story. paul ryan's choice, gerri, at least temporarily brought the party together a. gerri: it sure did. we should be talking about the economy. 85% of people in a pew research poll said you know, we are having a hard time making it. we are having difficulty maintaining our standard of living. our focus isn't even on this. >> gerri, you cannot be more right. this is the issue in the election. obama has talked about restribution, and until recently, governor romney really has had nothing to say. bottom line, he wants specifics and ideas and programs under one account. gerri: we were talking about a new fox poll showing romney ahead. it is 45244. in terms of statistics, it is not really that meaningful. but it does talk about momentum. would he make of it?

>> the momentum is clearly with governor romney. he has had three or four or five points tops of movement. the convention will give him a few more points, possibly. the real question is where we stand after the dust settles. then we will know where the races. gerri: we have a long way to go. a lot of bad ads hats and mudslinging. americans were pretty tired of it. >> they may be already. gerri: thank you for coming out. if you're at the convention, come on our show and populist. >> absolutely. gerri: president obama and his teleprompter have become one are the least, that is what this picture shows. the president was snapped by a reuters photographer on the campaign trail in cleveland this week. the president had perfectly obscured by the glass of his teleprompter. of course, the president's best moments are when he is off prompter like this one. if you have a business, you didn't build that. somebody else made that happen.

gerri: all right, dc the words coming out of my mouth? look at his teleprompter. that is what i read everyday. of course, we don't always read it. the president didn't read and he got in trouble. see the timeline? we can get rid of it. we shouldn't read it all the time. coming back, will romney win in a landslide? i will tell you why romney will get the most electoral votes coming up next -[ taste buds ] donuts, donuts! -who are these guys? -oh, that's just my buds. -bacon.

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gerri: be a little twirl college. the work of american politics. it means that you and i don't elect the president, we elect

electors. that means that sometimes the popular vote goes one way and in the electoral college, does it differently. george w. bush won the electoral college, but al gore won the popular vote. in this election poll, it shows a tight race. a new analysis that focuses strictly on the electoral college shows mitt romney is running away with it. if business successfully chosen u.s. president since 1980. the professor's model stresses the economy. state and national jobless figures, as well as incomes, and on both scores from the president's record has come up short. despite emerging from recession two years ago, unemployment, as we talked about many times, stayed above 8% for 42 months. income figures. they are anemic, too. a pew research survey released shows middle-class incomes have

fallen from nearly 73,002 just 70,000 in 2010. worse, median net worth for the middle-class has eroded dramatically. down 28% in the same period. the racing two decades of genes. the professors believe those kinds of numbers impact parties in different ways. voters hold democrats more responsible for on employment rates. while republicans are held responsible for income numbers. that distinction may not matter this time around, but both numbers are paltry. what is more, obama faces the headwinds of history. no presidents since fdr have been reelected with unemployment above 8%. off the electoral map, these two professors as they see it. 270 is the magic number. whoever crosses that line wins. romney chomps obama winning 320 electoral votes to obama's 218. mitt romney takes every single

swing states, including florida, pennsylvania, ohio, the key to mitt romney winning is the economy and it doesn't look like it is going to improve much before election day. in fact, economists say it could get worse. in order for obama to win, according to the very model, it would be down 5% for unemployment at least. for many americans are out of work, that's not going to happen soon. that's what i have to say. now, we want to know what you think. here is our question. is the electoral college outdated? go to our website and i will share the results at the end of the show. abigail higgins had...

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gerri: speculators whirring again. worried that the fed will employ a stimulus measures. this after the market rally came yesterday afternoon when the fed said it would take action. what is the real story? let's ask randy costner.

welcome back to the show. it's always great to have you here. but that seems to indicate that we get some kind of stimulus. james bullard, that the president saying, going along at a slow pace is not enough to justify gigantic action. i would like to see some deterioration of the indication that we will slide down further. were they going to do? >> i think that jim made it very clear. speaking for himself, not for the entire fnc. if you look at the minutes, you will see that a number of members.it was pretty close to time to take some action. i think that they didn't take action at the previous meeting, and they are waiting to see how they are evolving. i think the employment report that will come out and about a week and a half or two weeks will be very important. gerri: help me read that. at what level do you think we are guaranteed that action? what would the number have to come in at that the fed would

say that we have to step in? >> i don't think there is any particular number. i was there sitting around the table, it wasn't like, if the number is below this orb of this -- that is the trigger point for action. it is a little bit more nuanced. where is the direction going? looking at a few numbers -- let's say we give disappointing report. the markets are expecting 150,000 jobs created in the previous month. if we don't get something like half of that and some revisions to the previous month -- that makes action likely. gerri: clearly, johns are critical jobs. another thing that may be important, the pressure from wall street and the pressure from all washington. >> there are always pressures from washington and wall street. [laughter] >> that is just part of the job

description i think that the chairman wants to do what he believes is best in light of the economy and he will do that regardless of what pressures may be coming from washington where the campaign or from wall street. gerri: does it ever play a reverse impact where is the fed feels like they're getting a lot of pressure from the white house, they are like no, we're not doing what you want and just forget about it? without ever having? >> i guess it is conceivable that it could happen. it certainly wasn't the case when i was there and i don't really see much evidence of it. i think the chairman just wants to do what he thinks is right. people are saying it's good or bad -- you know, that's what they're going to say. gerri: as a matter of fact, he said open mouth operations may be better than anything else. what is meant by that? >> so when the fed buys securities, that is open market operations. but they can also try to improve the communication strategy could open mouth operations.

some things they might do are extended the time in which they might raise rates. also what they can do -- they could say, if inflation is expected to be under our target of 2% and the unemployment rate is expected to be over some number, let's say 8% or 7.5% for the next year, 18 months -- that would be conditions under which we would act and i think that would help to give some clarity to people to get comfortable. gerri: i don't know how much good that action can do, given the fact that a lot of this trouble is caused by the fact that congress is not doing what it needs to do. there are lots of questions out there and we don't know what our tax rates will be. don't the edges of the come from somewhere else when i.

>> you can prevent a 1930s style deflation or japan type deflation -- you have these fiscal uncertainties and the people in washington are doing their job to try to reduce the uncertainty and croissants sustainable paths. the fed can only do so much. gerri: that can only do so much for this much as we want them to do. the markets trade on this come at the end of the day, they only have so much power. randy, thank you for coming in. it is a pleasure to have you on the show. >> thank you. gerri: still to come, will the markets going down continue? we will have advice. and will ipo investments be made whole again after the facebook whole again after the facebook ipo hey! did you know that honey nut cheerios

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♪ gerri: welcome back. nasdaq has offered to settle its debauched facebook ipo coming under fire. the swiss banking giant glass in the settlement offer and as unfair. said the proposed deal was nowhere near enough. individual investors who have already lost half their money in this ridiculous ipo. joining me now, rob morgan from falcon securities. great to have you here. i want to start with this letter, which i have to say came out last night. i was sort of shocked the language. market participants and losses were not caused by a system which. there were caused by grossly negligent self-serving business decisions made by nasdaq to enhance its own profitability. what does that mean? >> well, what's going to make it tough here is the fact that there are two other firms outside, citadel, the hedge fund company is urging the sec to accept the