tv Real Money With Ali Velshi Al Jazeera October 16, 2013 5:30am-6:01am EDT
and deserved for bosnia to go to the world cup next year in brazil. >> that's the home page of aljazeera.com. that's the address for the web silt. a lot of news and the latest sport, of course, on aljazeera.com. plus talking about recession resistant. now one entrepreneur made an entire business out of meatballs. i'm ali velshi, and this is "real money." >> this is "real money." you are the most important part of our show. so join the conference by using
the #aj real money. we're 15 days into a government shutdown. and new study warns even if the u.s. temporarily defaults on its obligations a brief recession could be the result in 2014. that would push the jobless rate to 8.5%. it would cost 2.5 million jobs according to macroeconomic advisers firm in st. louis and others have predicted similar forecasts. others predict the recession would last longer and unemployment would rise to 8.9%. 3.1 million jobs lost. blame will rest squarely on the officials you collected to washington.
here's why, the whole percentage point has been shaved off economic growth since 2010. if not for the uncertainty coming out of washington the report estimates the jobless rate would be .6 of a percentage point lower than what it is now, 900,000 people won't be employ employed. fitch credit rating agency placed the u.s. on a negative rating watch. that's the first step of a possible down grade. fitch warns the brinksmanship over raising the debt ceiling dance confidenc zaps confidence in washington's government. and the undermine confidence in the dollar because it casts doubt over the whole faith and credit of the united states. now these findings from macroeconomic advisers that he
just told you about are from a 14-page report called "the costs of crisis driven policy." it makes the point very clearly. you're saying, let me put it this way, how does this crisis-driven fiscal policy have an affect? how is it that you're saying that it causes slower economic growth, and how does one connect to the other? >> by leaping from one near-term calendar driven fiscal crisis driven policy to the next. when you feed that into all of the equations, the results suggests that in response to this uncertainty economic growth has been slowed.
>> how does this affect a typical business? what do they do when they're looking at this fiscal uncertainty? what are the things that they do or don't do that slow the economy down? >> reporter: well, the first thing is they could say, gee, i don't know what our elected officials are going to do? what are our taxes next year? what is our spending for next year? i don't know. i'll wait and see before i make the plunge to hire or expand my plan. the that's the direct affect. the indirect affect could be that it raises interest rates and causes companies to cut back on expansion plans. >> if demand is there, if jobs are growing, if people have money, if the demand is there wouldn't though companies have to expand any way? >> they would, but the question is what time and at what pace. >> and you're saying that this continued uncertainty causes
them to do the least possible? >> not the least possible. it depends on which company and how they're affected by the uncertainty. think back to the end of 2012 when approaching the so-called fiscal cliff. were taxes going to go up by $400 billion a year or stay unchanged? think of the uncertainty that the corporate planner was playing when trying to decide what the decisions should be made on the outcome of that tax rate. >> let's look forward to the next 24, 48, 72 hours, if there is a deal that we'll raise the debt ceiling now but extended it to the middle of january or february, does that create the same problem? >> it averts the immediate crisis but it only kicks the can down the road and it adopt this is pattern of short-run fixes
rather than face on fiscal imbalances. it would be helpful this week to have the debt ceiling extended for a few weeks but if we're back at it in the middle of the month it's more of the same. >> if we breach the debt ceiling it forces everyone to come up with a better deal and that might be better for the economy in the long run? >> reporter: i think if we reach the debt ceiling the financial reaction in the financial markets will be big enough that they would be forced to come up with an arrangement otherwise they would be sitting on their hands while the economy deter yates, and no one wants that on their watch. >> you take the dim view that it could go on, you're not suggesting that it would, but if it went on for a long time it could get worse. what is the least amount of time this could go on and not cause damage to the economy.
>> a few hours, maybe a few days. in the report we show that if we stay at the debt cereal forgive two months we will inflict on the economy a very large fiscal contraction because government expenditures will quickly, essentially overnight be cut down to the level of taxes. when you make those spending cuts, tax also weaken and you'll have to cut spending that much further to catch up. it's not a circumstance we want to experience. we don't want to go there. >> there was a time when i would have said that's an outlandish crooks but these days one never knows. thank you. >> thanks. >> walmart warns that the stalemate in washington was affecting its customers. walmart said that uncertainty is not good for its customers or businesses. but some businesses are just carrying on on their own doing what they know how to do. business is booming a shoe store
in new orleans. it hit it's daily sales goal just before 3:00 p.m. local time this afternoon and enjoyed steady foot traffic all day. i've been dying to say that. eva, the owner of feet first, and she joins us from her sales floor tonight. eva, good to see you. thank you very much for being with us. >> thank you so much for having me. i appreciate it. >> now you had a good day. have there been a lot of good days recently? >> yes, there have been. surprisingly. you know, i said before in new orleans can tend to be a little counter to the trend. now that doesn't mean we're not keeping a close and watchful eye on what's going on in washington. we are. retail is the first to really feel the affects of any drastic moves made on the hill and any financial hits or crises. however, down here we're starting getting into the fall-shopping mindset. the worst of hurricane sin is behind us.
the saints are on a winning streak--except for last night--and you know, we did see a dip in sales the week of the threat of the government shutdown-- >> let me ask you a question, were you able to talk to your customers and figure out it was related to the shutdown or could it have been able to do something else? >> we did not quiz or poll them on that. it was speculation. i should clarify that. we have just seen it happen before when there is something extreme in politics that you do see a quick, participate and sudden down turn in sales. we saw that two summers ago in 2011 when there was the first debt ceiling crisis. we saw it again with the threat of the fiscal cliff. so this time around it was the threat of a government shutdown that really i think had people panicking. once we got through that and it was, like, okay, some people are still working in government, and
there are furloughs, which is really a shame, but things quickly settled down. >> the stuff you have got in your store. are they necessities, essentials, treats or a bit of both. the less dispensable those items are, the steadier your business is going to be. do you see trends when people are feeling confident versus pessimistic about the economy? >> we sale women's shoes, handbags and accessories, just to clarify. there is difference between want versus need. everyone has to wear shoes in some form. we tend to sale mid-level brand name quality goods, so are they an absolute necessity? no. i would say that they're a bit more of a luxury, the brands and price points that we sale. that being said they have been saying of all retail categories, shoes has been the most robust and the most recession-proof,
and if you ask those in the shoe industry there are certain categories of shoe sales that have increased over the years. so i would say that shoes relative to other types of luxury goods have held out longer. >> are you seeing that from your fellow retailers around you? in other words, is it strong in the neighborhood? is it strong in new zealand? >> i would say right now it's strong in the neighborhood. it's strong in new orleans. that's following a summer. we weathered the government shutdown storm, so to speak, and then hurricane karen in the gulf. once people realized we got past those and we're still living to tell the tale, they're out spending money and we're blowing
the sales out of the water consistently. our sales are up for the fall season 17% over last year, and we actually just opened up a third store today, just outside of new orleans. >> that's great, congratulations. >> it might be counter to the trend, thank you very much. >> that's okay, that's okay. that's why we're talking to you. it might be counter to the trend, and we don't want to say that it's all doom and gloom. your parents opened the first feet foot store in 1970 and you just opened the third one. congratulations. we're talking to evie in new orleans. they are of the most highly educated and many cannot make ends meet. >> i envisioned i would climb this ladder, but as you can see i did not climb the ladder. i'm in my parent's basement.
>> reporter: keep it right here. (vo) al jazeera america we understand that every news story begins and ends with people. >> the efforts are focused on rescuing stranded residents. (vo) we pursue that story beyond the headline, past the spokesperson, to the streets. >> thousands of riot police deployed across the capitol. (vo) we put all of our global resources behind every story. >> it is a scene of utter devastation. (vo) and follow it no matter where it leads, all the way to you. al jazeera america. take a new look at news.
professor,ed , adjuncts as they're known. when part time professor get a bad deal its often students who pay the prize. >> reporter: when darren brown became an university professor he never imagined his career would end on such a low. >> i envisioned i would climb this ladder, and as you can see i did not climb the ladder. i'm in my parents' basement. >> reporter: the first person in his family to go to college, he taught college courses to rave student reviews, the problem was as part time adjunct professor, he could not afford to live in the bay area and pay off his student loan test. >> after taxes i bring home paychecks of $1,100 a month. >> reporter: he had hoped for a
full-time te tenured professorship. the full time positions are increasingly scarce. 40 years ago part time professor comprised 30% of higher education faculty. by 2009 their ranks swelled to over 50%. a two-year public community colleges nearly 70% faculty are part timers. in ohio, adjunct english professor was a month away from starting classes before she learned if the course she was contracted to teach would go ahead. >> it's difficult because i don't know how much to prepare. >> reporter: averaging an average $2,600 per semester course she's taking jobs on multiple campuses not that she has been given an office for meetings. >> i have to stop students before they start telling me personal things in the hallway.
>> reporter: fed up she has banded with other part time professor to form the advocacy group new faculty majority to level the field between adjuncts and tenured professor. the cornerstone of their mission, raise awareness of their working conditions through banners, novelty items. >> we hooked up with a fair trade could have any company. >> reporter: and buttons with scarlet a's adjuncts to prod students to start asking questions. questions with important implications especially given the soaring cost of tuition because there is evidence that working conditions of adjuncts could be shortchanging students. >> reporter: heading the delphi project, an initiative exploring the impact of the faculty dynamic
s and effects on students success. >> lower graduation rates. they don't tend to move from two-year to four-year institutions and we know that it affects their performance in future courses. >> reporter: it's not the quality of professors that is to blame but the quality of their work environment. >> constitution dos not set them up for success. they hire them at the last moment, a day or two before class so she can't prepared for their courses. they have no input for the curriculum of choosing text books, they're often teaching off of resources they're not familiar with. >> reporter: cuts in higher education funding is the main culprit. >> money in instruction that would typically go to faculty has been declining and other expenses have been going up. >> the delphi project has pointed out a number of key issues that presidents and universities have to face. >> reporter: at san francisco state where darren brown used to teach, president lessy wong i
leslie wrong is facing them by putting off other costs. >> this is a key component. it's not the only key component. >> the discussion is just starting and it will be a few years that we see some results and changes. >> reporter: but not soon enough for darren brown who is still coming to terms with leaving the profession he loved. >> teaching was my passion. you know, i wasn't rewarded for that. >> reporter: al jazeera, alameda, california. >> darren brown is still living in his parent's basement,er and recently enrolled in a bicycle repair class. >> reporter: a business of meatballs just as the country is
coming out of recession. (vo) friday faultlines chases the flames as they spread throughout the west. >> there's a thick, acrid smoke smell in the air and we're following a strike team now to the top of the mountains where the fire line begins. (vo) it's a war being fought by air and on land costing millions of dollars every year. >> you will make an individual decision to build a home there, but what's the cost to the rest of us? (vo) what's going wrong with the war on wildfires and what are the true costs of putting them out?
i have a small business now, and the risk is the same. and you can go under working for a fortune 500 too. john rights, i started a new business a year and a half ago, and i would be concerned to think that the current crisis could slip us into another recession. let's talk meatballs now, a food that is always in fashion in good times and bad. that fact helped our next guest start a business based just on meet balls. co-owner of the meatball shop whose logo is on his cap. he joins us now in front of his restaurant in new york city. it's easy to sta say after the t that of course you started a business coming out of the recession. that's the most obvious anything
the world but it's not obvious when it's happening. >> we're lucky that we caught it at the bottom where we could get good rent here in new york city. >> you're not at your first location, are you? >> we are. we're right in front of the first location on the lower east side on stanton street. >> your rent that are many multiples of what you started paying, but you're still excited to expand and grow. >> we're really excited to expand and grow. rent has grown with us at 50% per restaurant. we went from, you know, 6 to 9 to 14 to 15, god knows where it will go next. >> what made you think to start up a meatball restaurant? >> my partner and i were sitting around. we've been best friends since we were 13 years old, and we were looking for the type of food that we could serve that would
be inherently inexpensive to capture the growing trend of people eating more out and less cooking for themselves, replacing a home cooked meal with a quick bite in a restaurant but not wanting to go to a fast good restaurant. >> and your buddy liked meatballs a lot. he used to order spaghetti and meatballs and hold the spaghet spaghetti. >> and he would order vegetables to dip on the side. it's the classic way of how people would meatballs. they would serve them separately as separate courses. it makes sense in hindsight. >> would you start a business in the economic environment that we're in now? do you care about the economic environment or do you figure if you make good meatballs and
price them well, you'll sell a lot. >> there is truth in that, it ineconomic climate, but at the same time i wouldn't want to open an expensive fancy restaurant three years ago, and i might not say that this is the perfect time to open a really inexpensive restaurant in new york city based on the current climate. >> yeah, and rents are always an issue. when you first opened you were just coming out of a recession so you could get space at good leases. now, you know, it's harder. there are people who will lock into leases at the top of the market than the bottom. your advice who are thinking about opening a business is to really know what you're doing and take it slow. >> take it slow and assess the economic climate at the time, and hopefully design your business to fit with that. we specifically said, hey, we want to have an inexpensive place right now, and people don't have a lot of money. we want to offer them a place,
an alternative, a place to celebrate and have a meal out that does not necessarily break their pocketbook. >> were there times in the last few years where you really had second thoughts or wondered if you were in over your head? >> i think i had second thoughts and thought i was in over my head for the first two and a half years solid. it was only when we opened the fifth restaurant a couple of months ago that i looked around and exhaled. i have still not grown hair back on my head, but i took a moment to say, i don't think the restaurant are going to close. people are coming and waiting in line. >> daniel, the hairstyle that you're sport something is one that is quite in fashion. i share the same barber that you do. i've been there once before and i look forward to doing it again, you make great meet bal balls. the meatball shop.. it doesn't matter if you're a
republican or democrat, it's safe to say that most are mad as hell over what is happening in washington, d.c. the bicker ing and the fact that they come together about what is happening. i would like an end to this nonsense as you would. it's irresponsible, unhealthy, defaulting on debt is just bad business. it's immoral and shows a basic lack of economics, finance, and doing business with people who lend you money. when you stiff your creditors your interest rates increase and everything else slows down. mortgage rates could increase, and stocks could go down. this could damage the economy. we shouldn't be dealing with our spending problems on the back end. whenever you think about federal spending and deficit, the place to deal with them is on the election, through legislation, through the budgeting process which we used to go through. not when the bill comes due. stop the bickering, take this seriously and pay your bills.
hello. welcome to "news hour." from doha. the top stories on al jazeera. rescue and recovery. how one earthquake is affecting as many as 2 million lives in the philippines. typhoon wifa wallops japan. one area is hit by two months of rain in a single day. a place where aid money seems to disappear. where d