tv Real Money With Ali Velshi Al Jazeera March 2, 2014 3:30am-4:01am EST
australian government to legal eye gay marriage, organizers say more than 400-kilos of glitter were used during the celebrations. the latest on all stories we have covered in nba this news along with analysis and opinion at our website a aljazerra.com. ♪ ♪ crumbling bridges, substandard airports and outdated rail roads. they are some of america's most pressing problems, crumbling bridges, substandard airports and outdated railroads we'll tell you how to fix it and more importantly how to pay for it. and we are taking the pulse of the housing market's recovery ahead of the spring selling season plus conventions of a middle class cab driver trying to get back on the road of prosperity i am david shuster in for al see vanvleet and this is "real money." ♪ ♪
this is "real money" and you are the most important part of the show, so join our live conversation for the next half hour on twitter at aj "real money." and ali velshi. d-plus, that's our great america, i am talking about our roads, bridges, railroads, ports, power grid, communications and more. they get nothing better than a d-plus grade on a report cashed put out by the american society of civil engineers, not only are we not doing enough to modernize our public infrastructure we are barely maintaining what we have running now. once upon a time america's infrastructure was the envy of the world now we are falling behind the rift the world. recently vice president bride inning slammed la guardia as being third world after seeing the hong kong airport. apparently nobody bothered to held them we don't say third
world anymore, but that's another issue. president obama says he wants do something about this. he has proposed a $302 billion a plan that he hopes congress will adopt to modern iron the roads, bridges and trans take sit telephone the highway trust fund gets $35 billion a year from a federal tax in gasoline could run out of money in august because that's not enough to meet all the road and 90 minutes needs, to a avoid that, congress needs to authorize new funding before september. about you the president's four-career fran take proposal is more ambition herb which means it probably won't get through congress think we say that because the president got nowhere when he tried something even more ambushing us in 2011 establishing a bank that leverages private funds for transportation, water and energy. with an infrastructure bank the federal government would identify big projects in the public interest visit mon from the private sector and guarantee
the loan it's a joint public private model used by many countries around the world but smacks too much of the socialism to many republicans in congress. in the meantime american continues to sufferer because i've lack of leadership on this issue you. a concept of a national infrastructure bank isn't new but pro* proposals to create one are gaining traction among law makers, am see spoke with kevin from the center of american progress a progressive think tank focused on policy and asked why now is a good time to turn the idea in a reality. >> for far too long we have under invested in infrastructure and as a result of that, we see this tension between the need to expand our system to meet increased travel demand, growing population, increased international trade, and so governors and many state departments and transportation face a paradox of need to go continue investing in the old system to insure it's in a stated good repair but also need to go make the critical new investments so that they can continue to grow their economy and provide opportunities for their citizens. >> all right. and i guess the ink you here,
kevin is that if you don't have the money to start with, then you are not doing the maintenance you can't get our your hid around the new stuff. the analogy is if you don't have money to fix a knew leaguing prove and you get a new boiler you are not thinking about building a an extension. >> that's the case. it's important to remember that a bank has to be part i've comprehensive national strategy. you mentioned the highway trust fund which is capitalize woods a gaza gasoline at 18 1/2 cents a gallon will run dry meaning putting a halt to critical projects during the heart of summer construction season and putting people out of work. i would add that the gas tax that capitalizes the funneled was last raised in 1993 in that time, it's lost a great deal of its purchasing power, it's really equivalent to only 11 1/2 cents today in control terms and to put the 20 years in perspective. in 1993 jeff was i can park was the new one mover any america,
gas was a dollar five and you are spoon union was just being created it's been a long time since we raised that tax. >> let's talk politics, you would think i would think maintenance of i believe that structure and building of new crossed parties lines it has something for everybody. why do we not have bipartisan support or why do people just not want to support it. is that we just have a bad taste in our mount about government spendinspending and about how te stimulus was executed? >> i think that's part of it. it's let tough to go to the public and ask for more money. and i think that you know, people drive every day, they take public transportation every day, our system has worked fairly well and so sometimes some of the, you know, the sky is falling rhetoric of people who care about infrastructure and who understand its role in our economy, i think sometimes it appears to pimas though there is a gap, my commute cass bad but not terrible. >> but i guess the thing is i wish we would get away from the sky is falling rhetoric, i get it every time it snows we shouldn't have power outages for hundreds of thousands of people that's a problem, we need our
power lines fixed and put underground why not high speed rail and the best broadband system in the world lie south korea has. why not these cutting edge global things, why do we have to deal with i believe that structure on a sky is falling basis as as opposed this to is this is how we become the best country i in the world? >> i think in part we have seen for many years now republicans have attacked government particularly the federal government at every turn and that undermines people's confidence in their a difficult billed on achieve and deliver on big grand ideas and infrastructure products it hard to have a conversation when one of the two major political parties is trying to convince people of the inning end at that tied of the federal government it's tough to that have discussion i think good to talk true kevin. it. strong but slowing down, that's a simple but accurate way to describe the recovery in the u.s. housing market. we had a lot of data to digest last week so let's start with new home sales.
no one expected to see sales jump 9.6% from december to january. and the home price index rose 13.4% in 20 their 13 2013 the lt gains sin 2005. that's the strong part. here is the slowing down, home prices declined 110th after 1% in november and december. that's consistent with other more recent signs of slowing existing home sales fell. and housing starts dropped 16% in the same pert. home sales and price growth are expected to soften this year, the reasons include a decline in home afford bit because mortgage aims remain about a personal point above where they were a year ago. and of course, rising prizes have made home too expense five some potential buyers, ali spoke with chris merry real estate professor at columbia business school and asked if a larger slow down is ahead. listen. >> i think we are starting to see the effect of interest rates
coming up think you know, when rates go up any i rememberly, people get off the fence and say, owe my god. >> i getter by. >> get in fo in to the market ww that the second half of the year and we are seeing the evening that have show up in terms people having a little lessen throughs i can't remember to jump in the market. little less urgency. >> despite the fact that at four 1/2% for a 30 years fixed mortgage if you have good credit that is one of the lowest rates we see in our lifetime. >> no question that you have to go back a very long -- you know, maybe we hit slightly lower levels you know, nine months ago, but basically for your and my lifetime that we remember, you are going back, you know, 30, 40 years to see times you know, before the 1970s and in to the 960s and 50s where inter rates were anywhere near in level for buying homes. >> you look at a 13% increase in homes, do you see another year of that. now we start too get in for worrisome territory where people say is that sustainable? >> i am not worried about the price level frankly. if house prices fall 50% and go
up 20%, they are only increasing off of a really low base, so some of the numbers are driven by a very low base and house prices nationally collapsed a lot. so i am not worried yet that house prices are at unsustainable levels. what worries me is really the lack of household formation people are living at home. you are not seeing first-time buyers coming in to the market at the same rate and i think it's real that i that sort of is concerning to me more necessarily than just, you know, headline number -- >> play that out why is household formation important as an economic thing? >> well, it's important because it's really people getting on with their lives and the economy. so when people buy homes particularly first-time buyers they spends money on other things and this stem lates the economy and the new household formations drive home construction, even though numbers are up from where they were before, they are nowhere near the level you know, which would even get us back to kind
of normal population growth which is would be, you know, a million and a quarter to a million and a half a year that's really what we would sort of think of as a normal market. and we are no i don't where near those levels. >> and ultimately this is all connected to the very same things we are always concerned about with respect to the middle class and the growth of the middle class it's job and income. >> yeah. i mean, ill really worry if we lose the impact the homeownership in our economy, we'll have a cohort of people when they hit retirement age will be unprepared much worse than the numbers seem to suggest think because people don't count housing and savings people hit retirement age and haven't got the nest egg built up it will be much worse two for all of us. >> thank you for joining us professor of real estate at columbia business school. philadelphia is the city of brotherly love. eagles, rocky and cheese steaks what it's not anymore, middle class, not like it used to be. we'll explainment and he's you were employed, but undaunted next the new york city cab driver who is trying to get off
the road and back to his career. >> there were certain issues that i am dealing with namely lack of discretionary income. i stopped saving. in other words, my life isn't on cruise control. >> those stories and more as "real money" continues. >> these protestors have decided that today they will be arrested >> these people have chased a president from power, they've torn down a state... >> what's clear is that people don't just need protection, they need assistance.
>>philadelphia is a p*eb example of the decline of the middle class, the city of brotherly love is known as a solidly and proudly middle class and even blue collar town, back in 1970 just a few years before the first rocky film was made, it was just that, 59% of the city's residents were middle class, by 2010 it dropped to 42% according to the whitely reppe y respected pew charitable trust. it's lost a large share than america has as a whole. america starts to split along haves and have nots philadelphia isn't everyone benefit having that trends, as it hasn't seen an increase in its upper class as the rest of the nation has, between 1970 and 2010 the share of lower class philadelphians grew this their% of the
population to 47% making it the single biggest part of the city's population. and the least able to support the costs of running the city. the study goes on to say that most of the hollowing out of the middle class occurred before the year 2000 and well before the great recession. ali was able to dig deep never to this report with larry the project director for pew's philadelphia program. listen. >> one of the fascinating things we found was that in 970, 44% of the people that we considered middle class didn't even have a high school degree. because there were those blue collar jobs available. obviously that's not the case now. you need a college degree or at least a lot of college education to be considered part of the middle class. and that's true nationally. it's certainly true in philadelphia. >> so when people say -- i have been talking to people about this all day. and they say, tell me why? why did it happen? what happened to philadelphia why was it hit harder than so many other cities that you
looked at? what's the answer to that? >> well, i mean, it was certainly hit hard whether it was harder than other cities is hard to say think philadelphia was a heavily manufacturing town. and when those jobs disappeared, it took a hard hit, and it may be took a little longer than some other cities to figure out what the next step was. now, you know, it's a heavily dependent on education and the medical sector and that's certainly working better for the city. >> is the geography of philadelphia, does it work against it? there are lots of wealthy people who say that they are from philadelphia think but they really live in what they call the collar counties the wealthy counties in which the property taxes don't go for the city of philadelphia. >> sure, that is certainly part of the issue. i mean, one of the things that was fascinating to us is when we sort of did this analysis and compared philadelphia to some other cities, sort of a snapshot in 2010, we found actually that
the sides of the middle class in philadelphia was not that different than a lot of other cities. what was different was the size of the upper income group. in philadelphia it was 910% in, places like washington, boston, new york, it's 15, 16, 17%, that's a big difference. and as you say in those cities, some of those people, a lot of those people are actually living within the city limits, that's less true in philadelphia. >> let's take about solutions, are there any obvious ones for a place like philadelphia? >> there are -- solutions may be obviously but they are certainly not easy. in our report we talked about three solutions one is to cater to middle class, the people here now who are middle class and the middle class people that might want to come do you that through tax breaks, through providing educational options, do i that with lifestyle amenities.
second way is to try to grow the middle class from below. you can do that through education, through job training, through workforce development. the third way, and maybe the simplest, and maybe the most difficult as well, is to simply take care of the yo urban basics and in any city the basics are jobs, education, and public safety. those jobs -- those are the main concerns of the middle class and the concerns of everyone else. >> put a different way if those things were in place in a better way in philadelphia, you have a larger chance of maintaining the middle class that's already there, and bringing people in, because if you got education and it's a safe city you have a better chance of attracting a middle class resident. >> that's correct. the population has been glowing going for the last six or seven years, we have had an influx of young a difficulties giving the city a lot of energy and give it an opportunity to sort of change
some of these dynamics. >> larry, good to talk to you, thank you for sharing this great research with you. larry is the project director of the philadelphia research initiatives we pew charitable trust. one of the promises for this show is to rule understand what is happening to the middle class. let's face it, it's shrinking. and even more disturbing people are slipping out of the middle class quickly. nearly a third of americans raised in the middle class have dropped down the economic ladder as adults. the number one cause, unemployment. ali recently got in to a cap with jay stein a good old-fashioned new york city cab driver, but not by choice, just a few months ago jay had a great job working in the online sales industry. but when his job went under, jay decided to make a living for now driving a cab. here is that story. >> you have been doing this for seven months now? >> seven, eight months, yeah. >> how are you feeling about this? >> if you are asking me if i like it? no, i don't. it's very difficult work for a
lot of hours for very little money. i was earning 125,000 plus, plus, plus, commission, expenses, now i am earning maybe i'll earn $60,000 gross, it's a 12 hour a day hustle. >> how long do you think you will be doing this? >> hopefully today is my last day. >> then i am glad we got you. you are working pretty hard about to debt something else? >> yes, absolutely. when somebody wants to meet with me, i'll make myself available. and go off duty about an hour before, the interview, get to a parking lot, throw the cap in to a parking lot, change in the cap get up to the interview after the interview is over get back in the cab and go bag to work. >> did anybody ever is have occasion to ask you if you felt you were part of the middle class? >> not recent. >> i. >> were you before this job? >> i consider myself to be middle class. >> and you still do? >> yes, i do, however there are certain issues that i am dealing
with, namely lack of discretionary income. i stopped saving. in other words, my life isn't on cruise control. to me that's the definition of middle class. you can save, you can think forward, you can think sometime in the future. emergencies come up you can take care of them. other than the bills getting paid, i have no opportunity to enjoy what life has to offer. and if there is an emergency, which account do i raid to pay for that emergency? >> you sound like a guy who understands the american dream. has a piece of it. has had a setback. and wants to get back on the road to achieving it. so what's the road map for that if? foy? >> the road map i will continue to drive a cab to pay my bills this will not be forever for me. i didn't go to college to drive a cab but i am optimist tick about the future because we are in the one of the wealthiest cities in the worlds if i can't fix out a way to access some of
that wealth then shame on me. jay stein is optimistic about the future but it isn't actually that easy to recover after such a big slip. he went from making $125,000 a year to $60,000 gross, long-term unemployment has devastated the middle class and it just isn't as easy to bounce back as it used to be. on average it takes 41 weeks for someone to find a job. it's a tough reality which is why we are so impressed with jay's attitude and his certainty that he can rebuild the american dream. that's why we decided to highlight not just his story but the story of the entire middle class. next up, digital video and the need for speed. we'll tell you what the streaming deal between netflix and comcast could mean for you the couch surf is house of cards-watching consumer. that story and more as "real money" continues. "real
continues. >> the the meets i can't world was all a buzz last week after comcast announced an interconnect agreement with netflix. the deal gives netflix direct connects to comcast broadband network. that network promises to give comcast 23 million customers faster streams of netflix video content including the house of cards drama series and a whole host of movie titles that netflix subscribers scream over
the web. reports say netflix will pay comcast for the direct connection but it isn't clear how much. to insure faster delivery it's a contents netflix want to cut out internet mid men known as content distribution practice he describedders and do business directly with comcast. very surprise income firms it's in similar talk with net flicks to direct connect to it's fios service all this raises fears that broadband pro tid describedders could charge more for certain content with do assume ers paying more for testimony notices in the clear if net flex is may go more to internet middle men to route its traffic. but either way many analysts say the net neutrality is now under threat. to understand what we are talking about, patricia has this report. >> can you please just cut me some slack. >> now nanette flick has direct access to comcast broadband pipes customers who are fans of shows like orange is the new
black can look forward to fast glitch-free streaming. >> i have a prison wife. her name is crazy eyes. >> but advocates of a free and open internet are core i had consumers could end up on the wrong end of deal. >> i find that in the end consumers always end up paying. so if netflix is taking on some additional costs from comcast or verizon, eventually we find that their hands are reaching in tower wallet. >> higher bills could just be the beginning. last month a federal circuit court struck down the sec's nett neutrality rules. much like a public highway is open to all, net neutrality insured the infrastructure used to deliver content over the internet including the last mile pipes owned by giants comcast, verizon and at&t would be open to providers and consumers. supporters of net neutrality argued that allowing major
broadband providers to charge a toll to band with hungry services like video streamers or throttle delivery of their content will limit consumer choice and possibly undermine internet freedom. >> the beauty of the open internet is that you can innovate without permission. this deal suggests that it's getting harder to do that. >> but opponents of net kne neutrality argue charging for priority access over pwraopbd band networks will generate ref flerevenue to upgrade networks. and making easier to wash shows at the push of the button. al jazerra, new york. we learned last week the top pick from the car critics consumer reports and this car doesn't use any gas at all. the battery-powered tesla model s luxury sedan is the first american built vehicle rate the best overall. ram 1500 best pick up, that's the first time a chrysler
grabbed top honorses in 16 years. lexus the top brand for overall quality by consumer reports for the second straight year. ford and jeep sit at the bottom of the brand rankings tied to last the magazine says ford did well in road tested but it's reliability score was hurt by a coy compliment complicated and buggy info trainment system. ford is dumping the microsoft based sit system for one that loses bloc blackberry, stay stes ooptimistic but we are not sure he should, it's not that easy to cover after such a big sleep. a pew study shows it best folks lost that lost a quarter of their income after a decade a third still not gained their footing. for baby boomers like jay it's most difficult the closer gets to retime. let's face it, people are scared of this very thing happening to them. jay's definition of the middle class is to not have to worry about money and to enjoy what life has to offer.
that's a valid definition because the american dream isn't just about money it's about security, and a little piece of mind. that's wha why we decided no toe highlight just jay's story but the entire middle class. that's our show for today. thanks is always for joining us. as always for joining us. this is al jazerra america and a think moral an radford live in new york city with a look at today's stop tories tors russia has taken control of crimea. gunmen have been patrol streets
for days, on saturday the russian parliament approved putin's request to use force inside ukraine. president obama spoke to putin on saturday and i remembered him to deal with the situation peaceful and i to withdraw all of his soldiers from the ukraine, the u.s. is calling for u.n. observers to go in to the country while canada has recalled its ambassador to russia and will not attend the g8 sum knit sochi. this is i ca the sixth timen egypt. china stayed media reports that knife-wheeled ago tackers killed 33 people at a train station in the country's south. four armed assailants stormed in to the station and slashed commuter at ra random. state media says it it was carried out by a separatist group. in california hundreds are under evacuation orders where mudslides are slipping done the hills of los angeles county. after months of drought the rain
is finally here but mountain sides burned by wild fires can't absorb all that water, aim morgan radford those are your headlines for all news updates from around the world head over to aljazerra.com of "consider this" is up next. >> mason mcqueen is leaving his home and his job as a london taxi driver to join the taxi wallahs in the indian megacity of mumbai. >> whoa, whoa, whoa, whoa, whoa. big bus, big bus, big bus. what have i got myself into here, eh? >> he'll have to come to grips with some unusual driving conditions... >> jesus. oo