tv Real Money With Ali Velshi Al Jazeera May 22, 2014 5:00am-6:01am EDT
america's critically acclaimed original series from the beginning >> experiencing it has changed me completely >> follow the journey as six americans face the immigration debate up close and personal. >> it's heartbreaking... >> i'm the enemy... >> i'm really pissed off... >> all of these people shouldn't be dead... >> it's insane... >> the borderland memorial day marathon only at al jazeera america >> two of america's biggest global rivals just joined forces. i'll tell you how china and russia's gas deal flies in the face of u.s. political goals and i'm bringing on sandy berger for his take. also forget the minimum wage debate, the stagnant middle class wages may be the big "e" problem, and i'll show you how philadelphia is trying to lure middle class families back to the city. plus how to brew up a billion a million
dollar business with idealism and a dash of sugar. i'm ali velshi in washington, d.c. and this is "real money." >> this is real money coming to you from washington, d.c. you remain the most important part of the show. tell me what's on your mind. russian president vladimir putin and chinese president signed an historic international deal in shanghai valued at $400 billion. china commits to buy russian natural gas for 30 years to power it's growing economy. the world's second largest after the united states. today's deal connects russia's
northeast t through siberia. today's deal has huge implications for u.s. engagement in the world. now in a stroke of a pen today russia got some strategic space to breathe and it's confrontation with the west in ukraine. this weekend vote necessary ukraine go to the polls to elect new leaders. at the same time pro russian separatist agitate for secession in the east. right now three-quarters of russia's exports go to europe through ukraine. the good nick news helps putin's standing at home as russia continues to slide into a recession. today's deal improves china's
president in asia. it's no coincidence that china sees its more of a threat and sees it as a threat with with japan and philippines, u.s. allies. while a major energy deal between russia and china makes perfect business sense to both countries, don't kid yourself. this deal is about much more than business. few are more qualified to comment on today's china-russia deal and what it means for u.s. policy than former national security adviser samuel sandy berger he is now chair of the
albright stone bridge group here in washington, d.c. good to see you. >> good to be here. >> let's talk about this gas deal, first of all. on one level it makes a lot of sense. russia has ample gas. china is going around the world looking for energy where it can find it, but as i implied there is more than politics here. these are two major powers pushing back against the united states and the west right now. >> this has to be seen as a marriage of converging interest, not enduring love. the sino-soviet relationship is a troubled one over the years. they have fought wars, their borders are quite unstable, but circumstances now make the deal right. putin has wanted this deal for a very long time as an eastern market for his energy. i subject when the price is revealed china got a good deal.
we'll see here. >> does this hurt the west, particularly the u.s. trying to impose greater sanctions on russia because of its incursions into ukraine now that he has breathing room? he knows somewhere that gas can be sold. >> i think both sides, both parties seek a strategic advantage. putin wants a little elbow room to the east as he gets squeezed on the west. i think china wants a bit of push back against the united states as they look at this rebalancing and pivot as a sign that we're trying to contain china. but i wouldn't overread it. on putin's side he still needs the european market. none of this oil is available. it's in the ground. he needs to build the pipeline and he needs to get it to china. he still needs the european market.
this is not going to ease his problem on the european front if he continues to be aggressive in what he does with ukraine. it might buy him more diplomatic support from china but there is not much that china can do to help him. on the chinese size they obviously see this pivot, the rebalancing to asia, but the pivot has always had two elements. it's a rebalancing in two ways. it's a rebalancing from the middle east to asia, but it's a balance within asia that i think the administration has been pretty clear about. the balance between our other friends in asia and the u.s.-china relationship. >> and the u.s.-china relationship does not shrink. it gets better and better. >> it's still the most important bilateral relationship in the world. >> there was a deal between the bank in russia and the bank in
china to settle transactions in rubl es or yen. is that convenient? is that an important shift away from the dollar as the world reserve currency? >> i don't think so. it's insignificant in financial or economic terms. the brits have riled with the currency being in dollar. the chinese have. but contracts are all in dollars dollars. i don't think we'll see in any near term an shift. the chinese are troubled by the fact that they have trillions of dollars. >> they're not interested in anything that devalues the dollar. >> not in the short term.
over the long term i think they would like to see more of a currency but that's over the horizon. >> ultimately, this energy deal between russia and china, this currency settlement deal between russia and china, if you're in the white house, you have to watch this, would you be more alarmed if you're in the white house watching all of this and say, what should be our reaction? >> no, you have to watch this very carefully, but you still have to be focused on two things. i would still be focused on what is russia going to do in the ukraine. that's still a very dangerous situation. if they continue to disrupt things in ukraine, if they try to stop this election we may have to go to another level of sanctions.
>> no one is talking about nuclear power, no one is talking about it, but there is a ceiling. >> reporter: if we went to another level of sanctions it would have an impact on the global economy. that's one danger. on the other side obviously the u.s.-china relationship continues to be extraordinarily important relationship. it's a delicate relationship. my own view of this relationship is there are so many dimensions to it that no single dimension now can tear it down. are we allies? are we adversaries? my phrase is it's too big to fail, and we have to manage it very carefully. >> thank you very much for being with us. >> yes . >> my next guest says you may bang for your buck by pumping up the middle class. plus a comeback story about an
underdog american city. after years of flight middle class families are slowly returning to philly. >> this doesn't match the story we have of a hollowed out philadelphia. >> it's anything but. there are probably certain areas that are hollowed out but i guarantee they're being gentrified as we speak. >> rocky's middle class story continues. keep it here. >> al jazeera america presents the system with joe berlinger >> mandatory minimums are routinely used to coerce plea bargains >> mandatory minimums >> the whole goal is to reduce gun crime, now we've got people saying "this isn't fair"... >> does the punishment always fit the crime? >> had the person that murdered our daughter got the mandatory minimum, he wouldn't have been out. >> the system with joe burlinger
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>> on the turkey-syria border. >> venezuela. >> beijing. >> kabul. >> hong kong. >> ukraine. >> the artic. real reporting from around the world. this is what we do. al jazeera america. >> protesters demanding higher minimum wages took the fight to mcdonald's headquarters. police arrested some of them for trespassing. activists flooded around the headquarters they're fighting for wages of $15 an hour. that's double the federal minimum wage of $7.25 an hour. the average wage for mcdonald's workers is $9 an hour. that means half earns more and half earns a less. well, stagnant wage growth has been weighing on american
households and the economy's recovery not just at lower income levels. median house income is now $53,000 a year, that's $4,000 lower than it was before the recession began in 2008. it's $2,000 lower than it was when the recover reagan in june of 2009. economist stephen moore said that the real problem for u.s. growth is not a flat minimum wage but a declining middle class paycheck. steve with the think tank heritage foundation. welcome. >> it's great to be back in washington. >> you're not saying don't worry about the minimum wage. you're saying increasing ma minimum wage will hit the middle class harder. >> well, making a slightly different argument that i think the minimum wage is a die version. the truth is 95% of americans make more than the minimum wage. the real issue that we should be
talking about in this country, and let me go back to the minimum wage for a minute. the truth is most people who make the minimum wage, not all but most, it's a first or second job. younger people, a lot of teenagers, those are not the people economically we should worry about. >> we're not worried about people earning that in the beginning-- >> right. we should be worried about the middle class. there is angst and anxiety about the numbers you just showed us. they still have not recovered from the recession. they're $4,000 behind. >> we talk about the middle class a lot on this show. you road an op-ed with senator rand paul. you talked about the minimum wage and middle class workers. the problem with the minimum wage that has got everyone ignited, it's not that first jobs, but it's those who are much later in their career. people are doing jobs and it
doesn't seem fair that you can't earn a living wage working as an airport baggage. >> there is no recovery. that's the point that rand and i are making. if you want the high wage jobs back. that's what i want. i want americans to be the highest paid workers in the world. we have to bring jobs back, make the economy more dynamic. maybe doing more in the energy industry. those are some of the highest paying jobs. but my concern for the minimum wage, if we can go back to that for a minute. most people watching this show are people like myself. i was earning $2.50 an hour, but that first job is important because then you get your second job and third job and learn job skills.
people under the age of 21, 22, i wonder if you should agree with me, we should have a training wage or teenage wage. >> i think that's what happens is when you're 50. >> right, the bill that the president is talking about does not have that teenage wage. that will take a lot of people out of the workforce entirely. >> now back to the middle class. is this wage stagnation? you look at wages in the united states. they have gone up. the pile of money paid to the pile of americans is bigger than it was. the problem is the way the economy bu bifurcates, they're not sharing in that growth. >> that's new, by the way. there is a mythology, the president said this has been going on for decades. that's not true. we started to separate in-- >> we started to separate in 1970. >> not really. that's where i would disagree with you. if you look at the 1990's, the
middle class did pretty well. we had upward mobility. that seems to have stalled in the last ten years or so. >> median wages have been flat. we can give you a graphic to show you this, but you've seen upper class wages, the top 20% have grown in a way we would all like. >> that's true but it's misleading. in the united states we have a lot of immigrants and we plenish people a replenish at the bottom. so if you look at families over time and say how are they doing five or ten years later we do have a lot of mobility. that's slowed down a little bit. >> we've seen a study by harvard and stanford saying that upward mobility in the united states now lags canada and australia and other places. other places for whatever reason your dream of being able to move up that ladder, this is what i worried about in the middle class. >> me, too. >> this dream is being diminished. you talk about your story at
$2.50 and hour, a family in small business but you lived the american dream. >> i did. >> i wonder if it's wage stagnation. >> that study that you're referring to, i have some problems with it, but the whole story of the american dream is that anyone can start with meager means and rise up. the big problem right now is the people on the bottom 20%, ali, they're having a hard time moving out of that, this permanent poverty class. that has a lot of factors behind that. the education system, the welfare system, all of these things. anyone who works a full-time job you're going to be surprised when i say this. if you work a full-time job in this country, you got kids, you shouldn't be living in poverty. i don't think the minimum wage is the best way to solve that. >> earned a income. >> some kind of worker credit so the government will supplement your
income if you're working. working is key. when you talk about that bottom 20% half of them don't have anybody working in the household. if no one is working, you won't be able to climb out. >> you're at the heritage foundation. you've influence politics for decades in this country. and we are coming up to a midterm election where we need solutions, countered the ones the president has if you don't like them but they sound like solutions as opposed to we're not going to worry about this bottom 20%, we need the dream more than we need the facts. we need people to believe that they can keep on moving. will we hear that from conservatives? >> this is why rand paul and i wrote this piece. it's not enough to criticize the president's ideas. i don't agree with most of his ideas but the republicans have to be a solution-oriented party, and they have to speak to the middle class. saying look, we have solutions for you that will help you rise up. i'll go back to the energy
revolution. i think its crazy why not build the keystone pipeline. why not continue to develop our resources in the country. that's just one example. >> do you think it's going to be built? >> i think it's a no-brainer. it's not just keystone. we have pipelines all over. >> we already have them. >> there was a big story that i that did not get enough attention. the deal between china and russia, they're going to be building this huge pipeline. >> we were just to sandy berg er about it. >> the coauthor of a book that you need to read regardless of what your political stripes are. it's just a good book. in the movies rocky balboa was the gritty, determined underdog who refused to give up. that describes philadelphia middle class families who
endured through decades of decline. >> this particular area that i'm in right now were tripled. that's 300% increase. >> i'll have more on these challenges and hopes for the future as my series on rocky's middle class continues. and the world's biggest election. we'll get insight on india's new leader narendra modi from >> we're following the stories of people who have died in the desert >> the borderland memorial day marathon >> no ones prepared for this journey >> experience al jazeera america's critically acclaimed original series from the beginning >> experiencing it has changed me completely >> follow the journey as six americans face the immigration debate up close and personal. >> it's heartbreaking... >> i'm the enemy... >> i'm really pissed off... >> all of these people shouldn't be dead... >> it's insane... >> the borderland memorial day marathon only at al jazeera america
with the most interesting people of our time. abe foxman >> we'll fight for your right to be a bigot. if you are a bigot, you're gonna pay a price... >> holocaust survivor and head of the ant-defamation league. >> there's an awful lot of hatred floating out there... >> and ending discrimination >> ...as long as the children aren't educated, it's gonna maintain... >> talk to al jazeera only on al jazeera america >> all right, we have spent the last couple of days telling you about the new face of philadelphia's middle class. it is smaller than it was 40 years ago, but it's better educated and more diverse. the middle class in philadelphia has finally stabilized. big question is how do you expand a crucial core group of a city's residents when the city itself is struggling on so many fronts. for a city so celebrated philadelphia still has many hurdles.
>> reporter: ask the average middle class resident living in the suburbs of it philadelphia they'll say you're crazy to live downtown. bad schools, high taxes. when you look at how philadelphia fares on poverty and crime it ranks monk the worst lingering at the bottom of the list with cities like detroit and baltimore. drive through parts of philadelphia and you might think that you're in detroit. vast blight. the hollowing. philly's middle class is no more evident in parts of west philadelphia or lower philadelphia once bustling middle class communities. the exodus of 400,000 middle class residents is clear. but they didn't go far. >> economies have grown significantly over the past four years. their success has come at the expense of philadelphia. >> reporter: there are vibrant parts of the city. now comes the task of luric bag
the middle class people back to a city that's starting to stabilize. gentrification and a flush of jobs from universities like penn, temple and drexel are beginning to show the beginnings of a new middle class. >> my house is the first house on the corner. >> reporter: long time owner of victor's cafe in philadelphia. he took me on a tour of his neighborhood and said gentrification is happening quickly, and there's money to be made. >> so this doesn't match the story that we have of a hallowed out philadelphia. >> it's anything but. there are probably certain parts of the city that are hollowed out, but i guarantee they're being gentrified right now. people are buying them up because people with do it. >> reporter: the city has decided to reassess it's property taxes which for long time homeowners in the neighborhood could be a real problem. greg's property tax has gone through the roof, so to speak.
>> this particular area that i'm in right now were tripled 300% increase. >> but it's not just property tax that is struggling the middle class. they have the second highest tax burden in the country second only to bridgeport, connecticut in. >> it's just part of the tax structure driving people from the center or from the city of philadelphia out to the suburbs because it is an enormous burden on many households. >> reporter: the key to seeding the middle class is this: revitalize and they will come. >> it is about supporting public safety initiatives but it's also about a waterfront. people will hear announcements how we further development the waterfront of the city of philadelphia. what i'm doing, what we're doing is creating the infrastructure, changing the culture and investing in areas where we need that support to create a di veers, strong economy, jobs
for people who want to be here, and an environment that says this is an honest government. this is quality of life that i want to have for my children and my families. i want to move my business here. we're lowering the tax burden for start ups and existing businesses in philadelphia creating a better business environment. >> reporter: larry studied this change and report on the middle class for the pew charitable trusts. >> what is your sense having studied the trajectory for philadelphia at this point? >> i think it remains to be seen. philadelphia as story was pretty much managing decline. now it looks like maybe philadelphia is not doomed to manage the decline. we consider that a promising but fragile goal. >> the mayor said revitalize and they will come. what do they have to do to attract people back to philadelphia. joining me is roberta grass, author of several books on the
renewal of cities, most recently battle for gotham, roberta, good to see you here. the battle between robert moses and james brings in differing views of what makes a city successful. but you say a good city cannot be attractive to the middle class without great public education and great public transit, both which philadelphia struggles with. >> that's true, but it also requires the appeal of affordable housing. one of the things that philadelphia has in great numbers is vacant pre-world war ii housing, which needs new owners. the reality is that what people are looking for is an affordable place to live, be able to send their kids to a public or charter school, and be able to get to work without being dependent on a car. now philadelphia has spent a lot
of money federal money in tearing down these neighborhoods with the mistaken idea in a lot of shrinking cities that demolishing blighted neighborhoods will help bring back a city. but it only helps the process of blight continue. it doesn't do anything positive. and the important thing is to create programs that make these homes available. the kind of homes that were once occupied, the traditional turn of the century pre-world war ii housing, and there are ways to do this. there are ways of autopsyin auctioning them for a dollar a year. >> on the condition that the occupants bring them up to code and have them occupied like detroit is doing. >> exactly. they almost pressure the federal government to let the money that is available to them for
demolition be used instead for renovation. this is one of the cruel ironies. the money that they're all wanting to have because it's available, that money is only available for demolition. this is nuts. it's tearing down viable structures that need to be renovated, can be renovated at a better cost than building new by people who are willing to do the hard work themselves if you give them the opportunity. >> let me ask you this, roberta, read jane jacobs. it's not always the best use of land to demolish something and then put the most economically viable or most profitable thing on that land. philadelphia does bifurcate. there are areas in philadelphia that look like it's the finest city in america. and then there are other areas where nothing happens. >> this is a very familiar story.
if you go back to the 1973 1970s in the books that i've written, that's when the turning point came away from the robert moses demolition at all costs, clear the neighborhoods, build new public housing , new highways, and basically hollowing out the city. the turn around started when people organically started moving back to neighborhoods, rebuilding those neighborhoods, defying the expertise of all the people who said the other way was the better way. this was when the jane jacobs approach took hold in a new way, and today we hear too much of the rhetoric and programming that we heard in an earlier time. the big projects, philadelphia's water front may be fine, but it's not going to bring back the middle class. and the big projects never live up to the expectations that they
set for us, and the smaller projects, the jane jacobs approach always lives beyond its expectation. this is where the thinking at the top of our city government's across the country needs to change. >> you roberta, if you go in parts of downtown philly there is excellent housing being occupied by people who are priced out of new york or like the fact that philadelphia has a little more grit than new york does. i commute regularly between the two cities, which is a shorter commute than some of my colleagues who commute from connecticut. >> it's happening. you don't see it in a big way because these things start small, and i can't emphasize that enough. it is still below the radar of the experts. but you talk to some people in new york, and you'll find that
they're all looking at philly as the sixth borough. people are moving there looking for the affordable opportunity for their business or their home. the cost in new york is so excessive that philadelphia, not a long distance away, and a shorter commute than a lot of distance connecticut and long island suburbs, is getting a lot of interest from new yorkers as well as it should be. and some of the neighborhoods that you referred to earlier in new philadelphia that are gentry flying, what happens is that the gentrification pressure spreads out. as some neighborhoods get gentrified and more expensive, the nearby neighborhoods are still cheap and they will get the spill over. that's how it happens . observation proves that. it's not theory. it's observation, and it's not what the experts usually tell you. >> roberta, it breaks my heart that i'm not in new york because
i would continue this conversation after the show. what a pleasure to have you here. roberta gratz, author of many great books. thank you. >> i'll be talking about narendra modi and what his pro-business agenda could mean for america and the globe. coming up, the sweet smell of success. >> now inroducing, the new al jazeea america mobile news app. get our exclusive in depth, reporting when you want it. a global perspective wherever you are. the major headlines
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>> investigating a dark side of the law >> they don't have the money to puchace their freedom... >> for some...crime does pay... >> the bail bond industry has been good to me.... i'll make a chunk of change off the crime... fault lines... al jazeera america's hard hitting... >> they're locking the door... ground breaking... >> we have to get out of here... truth seeking... >> award winning, investigative, documentary series. chasing bail only on al jazeera america >> india is looking ahead to the inauguration of narendra modi next monday after his party formerly elected him prime
minister yesterday. modi heads bjp party, which swept to elections last week. modi is headed to pakistan for the inauguration. it is seen as an olive branch. no word if pakistani president my sharif will attend. india is growing 5% a year compared to 10% in 2010. to succeed modi will have to make good on his promise to eliminate red tape to boost domestic and foreign investment in the country. there is a lot of at stake. a recent note citigroup called india the land of 1.2 billion opportunities. a reference to the country's fast growing population.
check out this graphic, and you begin to get the extent of the opportunity. fewer than 5% of indians own a car or a laptop. fewer than 15% have refrigerat refrigerators or washing machines, and fewer than half own a tv or bicycle. that's a big, under-served market. no he expects modi does an enter job of adopting ideas than his predecessors and he joins me now from new york. thank you for joining us. >> good to see you, ali. >> good to see you again. you say that modi and his corp is very much like an american politician with his feet planted on the ground. but there are real issues in india. those reforms you were involved in, it's just harder to do business in india than it is to do business in some places. do you think he'll do it in indian?
>> i think he'll intensify those reforms. i call it a second revolution in the making of the first one in 1991, as you correctly pointed out. that led to very rapid growth. but why? because india started opening up in a very big way. narendra modi was chief minister and re-elected three times, he actually expanded to open markets. he also brought in a lot of foreign investment creating a one-stop shopping for foreign investors. there is no anti-foreign investment or trade, and you describe him in your little --an as pro-business. it's correct to say that he's not anti-business because he's more than pro-business. he really has changed even
social indicators dramatically because growth leads poor people out of poverty by giving them opportunities. he's done that beautifully. >> the issue in much of issue and some of it are federal problems, but there is a legal problem issue where you try to do business there, you get stuck in the courts and it can take many years. the courts are backlogged. we've seen examples of this. there are restrictions and there are politicians in india who are still anti-business and anti-foreign investment. can one man have effect over that? >> i think so. he's charismatic now. he's got a good track record. he has made it work and openness to trade and foreign investment are scalable . nothing succeeds like success.
i think he's got it made, and he's a guy with a lot of common sense. i think he'll be able to negotiate this very nicely in my opinion. >> now that you're saying all these good things, my ancestry is from there. so maybe i've got a few of these genes myself. but let me tell you, narendra modi was not able to come to the united states. now it seems that he will be, but he was certainly suspected bby some not governing effective effectively during riots. his party has not always been that includesive. it was a hindu national party. you were invited to receive an award but he refused to go. you didn't like him very much. >> no, but over the years he has
been investigated by huge numbers of people, the central government has been against him , but found nothing against him. this time around when i invited him to go. i said how can you call yourself a liberal. just because you assume someone is guilty if there is no evidence against him. so i did go, and i found on social indicators loculate ar like like literacy and nutrition, it was a place to start. i thought here is a guy i can really admire. i did go. and after that, he entered the national elections, and he's incredibly charismatic . when i talked with him, there was nothing that i really teach him because everything i
suggested to him he had already tried and had done. he was extremely tough minded about it. he's very different than a standard indian politician. he wants results. >> so this is what i want to know from you, then. india has a population that is growing at a rate faster than china. india by many estimates by the middle of this century be the most populous country in the world. economic growth has slowed down but estimates are that it will pick up and grow faster. give me your prognosis economically and cha do they need to change most urgently. >> i think india is posed to return to an 8 to 9% growth rate. it was literally cut in half, and that's what got the current government dismissed.
while government was slowing down, the growth, revenue intake was going down. and they were spending more and more money on social spending. turning everything into rights. rights to food. rights to shelter. if you won't spend the money the supreme court will tell you you got to spend the money because it's a right. the result was massive expenditure unmet by growth and revenue. i think that's something that he has got to address right away. to try to slow down the social spending. it's not that he doesn't believe in it. he does believe in it. but we have the exact problem of the american republicans. to stop spending, and push from the monitoring side. in india we had spending, and the central bank governor
, a brilliant economist, was to break it. it's a very interesting contrast with the united states as well. >> we'll follow it closely, and hopefully with you. it's good to talk to you. don't be a stranger to our show. you know where to find us. >> absolutely. it's been great being on your show. >> professor at columbia university. well, the sweet taste of success. turning a passion for tea into a $100 million brand. we'll talk to the co-founder of honest tea of how he did it and what advice he has for other small businesses. >> on techknow... >> i'm at the national wind institute, where they can create tornados... >> a greater understanding... >> we know how to design for the wind speeds, now we design for... >> avoiding future tragedies >> i want a shelter in every school. >> techknow every saturday, go where science, meets humanity. >> this is some of the best driving i've ever done,
16 years later honest team is the top selling organning tea company. imagine the challenge of bottling tea in a billion dollar bench market already overflowing with options, and let's make it harder by producing only organic and fair trade products. but that's what seth goldman and barry did. >> honest tea grew out of a simple idea. in the crowded market of bottled beverages there were few options between unsweetened and too sweet. seth goldman with an mba reached out to his former yale business professor to help create a bottled ice tee that is just a tad sweet with ideals and principles that barry taught in his glass. >> the mission-driven business in a profit-driven world. >> this helped him navigate
building a business, marketing, distribution, to take honest tea to its first buyers which became whole foods markets. >> to coca-cola, in 2008 the beverage giant bought 40% of honest tea for $40 million. three years later it purchased the entire operation. today the simple concept generates $100 million in sales. sweet, but not too sweet. >> honest tea is an independent unit of coke and it's founders say coke has not interfered with its way of doing business. the company story is told in their best selling book. mission in a bottle. seth is a founder and teo of honest tea. i love that. seth, good to see you. you have not lost your enthusiasm for this. neither has barry. we've had him on the show before. you guys are inventers, and corporate merge has not stolen that from you? >> no, it's still a mission driven business, and this is an important mission.
we're talking about addressing the health of the american population bringing more sustainable agriculture to the developing world and economic opportunities and those issues are needed. >> yet there are some people, like ben and jerry's, that you sold out. >> i look at it cleanly. i look at our impact. are we reaching people? before coke invested we were in 15,000 stores. now we're in over 100,000 stores. we're providing lower calorie drinks to more people and before coke invested we were buying 80,000 pounds of organi organic ingredients, and now we're buying over $100,000 points. if selling out means buying more. then i'll sell out. >> barry was using the idea of sugar in a beverage as marginal
utility, an economic concept. the first spoonful of sugar does this, the second does this, and then you stop losing the benefit. how did that make a business. >> the market was filled with all those folks who had sweetened it up to five or six tea spoons. no one stopped at one or two. we knew that this was a differentiation strategy. we had a reason to get to the shelf. then the challenge was to make sure that the consumer, number one, understood that, and number two, accepted that. it was not always that easy. people didn't necessarily take to it right away. >> the reason why i wanted to have you here. i think entrepreneurs should read your book. you guys made the same mistakes everybody makes. but it's great to look at it as a success story, but it did not look all that successful. >> someone read it and said this felt like a horror story because we were always on the brink of going out of business. >> what universal lessons or
anecdotes can be transferred to someone else? >> really understand what business you're in. we thought we were in production company, you know, bottling, we thought we were in distribution. no, we were building a brand. building a brand that connected people to the natural world. you know, not even necessarily a tea company. really understand what is the essence of what you're building. not all the other business-related issues. >> it's so easy to get off track. you have this great tea and then someone said, it would be great if you make cranberry juice, and i'll buy a thousand cases. >> or if you have a bottling plant you can bottle other things, too. >> they want the cash flow. they want a buyer. no one wants to say no to someone who says i want to buy your product. >> the right area that we said no to was the right one. someone said you should make it sweeter, you would sell more. in the short term that would have been true, but it would have diluted what we were trying to build. >> what did you say to one of the biggest companies in the world, you can buy it and you
can pay us a lot of money, but you have to stick to what it is that we do. >> what i appreciate is they understood. that's where the value was. we can make a sweet tea, but if we want to market a less sweet tea, that's not in our playbook. we need to stay with it and help be the ones who continue to build it. that was a wonderful case that we both greed that's what happened. >> you got into a scrape about the labeling of the high fructose corn syrup. >> obviously coca-cola uses that produc ingredient in their products. and we had a message that we do not make our product with it. to their credit, they honored the agreement. >> simple matter. you have the bottle in your hand. the bottle design and the label design. let me see that for a second.
this is something that you all struggled with. you wanted a square bottle. bottle. >> it's one of these deals you idealize the perfect product. we wanted a square bottle, front and back label. then we realized that the square bottle would cost a lot more, cause production delays, and then we decided, you know, what this round bottle works just find. >> we appreciate your story and barry's story and the book is great. you are starting a business people should take a look at it. >> thank you. >> all right, it's a tough economy, and restaurants are cooking up very weird ways to draw you in. you would not believe some of the gimmicks they concocted. i'll tell you one place where my hairstyle is very much in style.
tgi fridays which has the same owner for 40 years is being sold to private investors. ditto for red lobster: casual dining industry is in a slump as customer habits change and promotions that once attracted customers seem a little tired. if restaurant want an edge they need to come up with perks that are shiny and new.
take the restaurant in calgary, canada, which gave a $5 discount to a family for their well behaved kids. it was even itemized on the bill. in the united kingdom , take snapshots of your meal and you may get free food. that's part of the marketing campaign from birdseye. i like this one. discounts to bald men. baldness is a delicate issue in japan and he's trying to change that. baldness is a man's badge of honor. so i say to my friends embrace your baldness, and make room for me at the bar the next time i visit tokyo. that's our show for the day. i'm ali velshi in washington. thanks for joining us.
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