tv Real Money With Ali Velshi Al Jazeera January 24, 2015 2:00am-3:01am EST
echoes of a tibetan song of freedom inside what was once america's most infamous prison. . >> a brand new king takes the throne in saudi arabia. we look at what that could mean in america and the price you pay for gas at the pump. ali velshi peeks with tony fernandez will leadership and recovery after tragedy. plus the blockbuster that makes a bet on inflation. i'm david shuster in for ali velshi, and this is real money.
>> saudi arabiaen dignitaries and officials from around the region comes mourns king abdullah. he was buried in an unmarked grave like his predecessor who died in 2005. israel offered their condolences on the king's death. vice president biden is expected to lead officials to riyadh to pay respects. by the airplane spring in 2011
saudi arabia dismal record on human rights took a turn for the risk. it expressed the mildest form of dissent were punished and thrown in prison prison. they spent $20 million to stop wider protests. the new king salman is expected to carry out the new policies carried out by abdullah which includes funneling money and weapons and participating in an u.s.-led air campaign against isil in iraq. the saudis will continue to obsess over iran's assent in the region, and yemen's descent into chaos. and saudi arabia will continue to rely on the united states for diplomatic and military support. on oil keep in mind saudi arabian is the world's swing producer. it can swing the price by
turning the spigots on or off. lower energy prices prices are here for a while, for more on king salman, who he is, and what he has done, we have this report . >> prince salman abdulaziz is the new king of saudi arabia. he was seen as shoring up the succession line and avoiding a struggle for power. he's one of seven powerful brothers, the sons of the founder of saudi arabian, all from the same mother. all of the remaining sons are over 75 years old. he was governor of riyadh for nearly 50 years. during his tenure the saudi capitol grew into a major modern city. prince sal in, a
lman was seen as aligned with the west. he became minister of defense in 2011, and was also appointed to the powerful national security council. socially conservative and close to religious establishments salman is not likely to introduce significant change but there are concerns about his ability to govern. his health is rumored to be frail. he has rarely spoken in public in years. rules stipulate that the eldest and fittest of the king's brothers shall inherit the thrown. but once all the sons of the king die and the crown passes to the next generation the dozens of grandsons may ask for a power.
>> for more on the view from the white house, we have patricia sagba joining us, mike viqueira, the expectation was that there would not be much drama when this took place, what's happening. >> if it mr. a year ago there might be more concern about the state of the bilateral relationship because it was about a year ago in march of last year when president obama was forced more or less to go to saudi arabia, to go to to to riyadh, saudi arabia was upset with the obama administration, and president obama had to mend fences in a very brief visit to riyadh, and king abdullah, and his compound in the desert. there were splits over egypt. of course initially the united states had supported
the muslim brotherhood. that was an them ma to the saudis and the there. the red line that was crossed, and yet president obama did not launch the promised airstrikes instead deferring to congress. saudi arabia want the president obama to get tougher with bashar al-assad. and of course, iran, the secret talks that led up to the current public on going p5+1 talks those went on behind the backs of the saudi. those were very upset. since that time there has been a reemergence, a strengthening of the relationship. saudi buys all kinds of military hardware from the united states. we can start with that, some 72 f-15s were purchased last year alone. saudi arabia promised to train syrian rebel fighters if it comes to that, that program has not yet got up and running, but
the united states and saudi arabia do work very closely. a whole host of bilateral issues and we haven't talked about the energy sector. >> you spent a lot of time covering the military east and oil. what are the expectations for the united states and for saudi arabia when it comes to oil. >> the saudis sent a strong signal today. they're basically saying that the oil minister is going to stay in his job. he has been in his job since 1995. he was the architect of the current policy. now right now the policy, as you well know s that they're keeping those taps open. they're not cutting production and there are a lot of people who want to see the saudis cut production because they want to see oil prices go up specifically iran and venezuela are leading that charge, and really russia would like to see it as well, russia being an non-opec producer. but the signal out of saudi arabian today, is that
policy is going to stay in place so we can expect oil prices to remain low. >> we can expect danger to the oil and gas as long as oil prices are low. has that been a source of any tension in the united states, or is the administration just happy that the energy prices are as low as they are, and some thousands of shale producers and some of the states lose their jobs. so be it? >> that is what going on here under the radar, or the campaign here by the saudis as patricia just pointed out. the saudis are in a stronger position to produce their oil more cheaply than a lot of others, and that is probably part of the strategy they have have embarked on as well. i think that the united states the often-stated fact that the united states will surpass saudi arabia in terms of its supply of oil in this country. when you think of the sweep of the history from the early 70s
oil shocks to the formation of opec, i'm old enough to remember the announcements from opec when they were going to cut or boost production. the world has changed such a great deal, but still there is is that inter dependence. >> hour fearful are the saudis about iran's rise and what is the role that saudi arabian wants the united states to play? >> well, the saudis are very worried about iran. in fact, there is speculation that the current oil policy is not so much geared at protecting market chair against u.s. share factors. that's what saudi arabia says. this is our strategy, this is why we're keeping prices low but there is a school of thought that one other reason that they're keeping prices low is to hammer iran. iran needs oil to trade at $10 a barrel to balance it's budget, and it's trading at $50 a barrel.
so iran is getting hammered right now, and when you take a look at saudi arabian it is such a precarious security situation. they have isil and iraq to contend with. they have aqap and yemen. yemen is in chaos. they are extremely worry about iran. one of the big questions is going to be what is going to happen to saudi foreign policy? are we going to see any sort of slight shift in foreign policy now that salman is in charge. saudi arabia is a black box, and nobody really knowns what goes on inside of the kingdom, i think that the other thing that mike has brought up as well, we talk about the relationship between the u.s. and saudi arabian. now there have been suggestions today out in the press that the saudis aren't as relevant in washington because saudi oil is not as important to the american economy, and it's not as important, but there is a school of thought that says really this relationship has moved on. security is at the forefront.
even though the u.s. and saudi arabian do not have common values, they do have common interests, and they have many common enemies. >> that starts with the common interest of making sure that iran does not become a nuclear threat, and saudi arabian is as fearful of that as much as israel is, u.s.' closestally. mike viqueira, patricia sagba, we appreciate it. >> the national average price for gasoline is now $2.04 a gallon, and it's expected to drop below $2 in the coming days. that is great news for americans filling up at the pump, but it is bad news for america's oil industry. energy sectors are getting cut and small towns like williston north dakota are taking a hit. they're trying to diversify to keep the boomtown turning into a
bust. >> farmers discovered they were sitting on a mountain of oil now made accessible through hydraulic fracture. >> they say its mailbox money. it's coming, so i can have a better quality of life. >> williston , north doc north dakota, is a boomtown. the growth has had its headaches. in disease the city council closed the town's two strip clubs for 60 days after two beating deaths. rents rocketed from $120 to $2,000. oil prices are now puttingboom. for once eager retailers are starting to reconsider. >> with oil prices down people are thinking maybe this is not such the real deal, and it will go away like it has in the past. i don't think that's going to happen. i think it will
rebump, i think this is an industry that will support us for at least 40 years, but i see that slowdown there. >> just four years ago williston was an agriculture town of 4,000. now the city has expanded it's limits to accommodate all the growth. now with the oil boom comes the oil slump. >> so far the slowdown has fallen short of an oil bust. in williston state college, students remain confident. >> when i'm done with training i'll apply for the job to find out how i'll be needed. i know i'll get it. >> but they're holding off on hiring another driver instructor until things pick up. >> i think they'll work on retaining the workforce they have.
a lot of people say do you think it will stop? are we going to lose all these people and have this bust cycle? i don't think so. i think we'll see a leveling off. >> it might give boomtowns like williston time to catch up to the growth they've had. >> coming up on "real money," how business leaders deal with tragedy. ali velshi talks to the owner of airasia over the crash that killed 162 passengers. >> s gut wrenching. just listening to you talking about the crash is something that i never believed would happen. >>tomorrow. >> visibility was 3 to 5 nautical miles. >> weathering the storm. >> we want to show people how to replace property against the worst mother nature has to offer. >> experts forecast how to stay safe. >> i'm standing in a tropical
windstorm. >> in extreme weather. >> oh my god. >> techknow's team of experts show you how the miracles of science... >> this is my selfie, what can you tell me about my future? >> can affect and surprise us. >> don't try this at home. >> "techknow" where technology meets humanity. tomorrow at 7:30 eastern. only on al j
>> al jazeera america presents a breakthrough television event. borderland. six strangers. >> let's just send them back to mexico. >> experience illegal immigration up close and personal. >> it's overwhelming to see this many people that have perished. >> lost lives are relived. >> all of these people shouldn't be dead. >> will there differences bring them together or tear them apart? >> the only way to find out is to see it yourselves. >> which side of the fence are you on? borderland, sunday at 9 eastern, only on al jazeera america.
>> it was a grim year for airlines airasia air. investigators in the airline hope to learn what caused the crash for information contained in black box flight data recorder. ali velshi talked with davos, switzerland, with the ceo of airasia. >> our team has some information, not a lot yet. it's not right for me to speculate on anything. the investigation is progressing very well. the data is in good shape. there is lots of data to go through so we'll keep it at that for the moment. my priorities are not the data at this moment. my priorities are to the families and insure we
have a little bit of a break through. the investigation will carry on, and the results will be out there. but right now i want closure for the families, and we're very clear we have to do whatever we can to find our guests and return them to their loved ones. >> the fuselage is where we believe the information . >> most of the work is being done on the hull. to one, extract it and raise it but more importantly to find our guests. >> and i appreciate that you don't want to speculate and you don't want to speak out of turn, however, if the evidence has been building, the plane was at a high rate of speed, there was a stall and weather, are there
any policies you're implements in the meantime to make sure that everybody is safer. >> everything we've done is following airbus and airbus methodologies. our pilots pilots are reviewing and going through all the information. as i said there is nothing wrong in the training we've done. it's a airbus certified training course, it's approveed by air authorities, but it does not mean that we're going to stop. we're going through everything but we're not making any changes, at the end of the day that would be speculative, that we're not wasting our time. we owe it to our crew that we've lost. to the families that airasia becomes even better, and air travel becomes even more safer for all airlines whatever we learn from this. >> this really tests the leadership of a company, i remember the tweets that you september you had right from the beginning. this is very, very personal to you.
this airline was largely--i mean, when you bought it in 2001, i understand that it had two airplanes. >> yes, of course it's very person. it's our baby. we're a big family. we have 17,000 staff. it's terrible for me to have to go to funerals of my own staff. so it's gut wrenching. even just listening to you talk about the crash is something that i never believed would happen. the problem--one of the good and bad things about aviation is that we are incredibly safe as an industry, and so when the crash happens, it's massive news. but it's devastating. every time someone mentions the crash or our plane is down, it breaks my heart. >> i can see it in your eyes. you are here. you do have to put on your
official capacity, and you are here, and you're trying to look towards investment in asia. that's what you're discussing here. what is your sense of that? >> i think that the panel today in large part of my involvement in davos these last three days have been about engines of growth in the world. it's one of the bright spots growing at 6%. >> i certainly would give my two pennies worth, but i have to say that people have been very proactive, and things i never even dreamt about talking about or hearing my colleagues talk
about are being talked about. >> like? >> like ownership. like market, like opening borders, market, common visas. these are way ahead of when i started this airline 13 years ago. and today at davos, we have ten ministers, probably the most well attended . it shows that it has potential there is a lot of work to be done, but the platform is there. we open the door a little bit, and then we open it wide. we will be on the way to having a fantastic community. but learning the pluses and minuses of economic communities whether europe nafta, we're in
a great position. >> ahead why republican candidates scrambling for votes may turn their negative attention away from gay marriage and towards muslims. one man's provocative view of the g.o.p. strategy is next. >> these people have decided that today they will be arrested >> i know that i'm being surveilled >> people are not getting the care that they need >> this is a crime against humanity >> hands up! >> don't shoot! >> hands up! >> don't shoot! >> what do we want? justice! >> when do we want it? >> now! >> they are running towards base... >>...explosions going off we're not quite sure... >> fault lines al jazeera america's emmy winning, investigative, documentary, series...
>> it's been more than two weeks since the paris attacks that killed 17 people. since many have rallied against the attack against the satirical magazine. >> i think that gay marriage has been very effective for republicans, even today. even though the majority of americans support marriage equality that issue is going to be gone. the supreme court will decide. marriage equality will be the law of the land. they must move to another issue
to get that to their base. i think muslims will be that issue. >> you mean a group to demoonize, a group to hate. >> i think democrats and republicans need something to motivate their base. you're fighting--if you're running in the 2016 presidential base, they poll negative in their views of muslims. this is an easy target. i don't think the republican party is a hate group. i think demonizing muslims will motivate their base and they will use it. >> you mentioned republicans as a whole have moved away from this in the past from some of their leaders. john mccain was asked about radical muslims. he said no, this is not how he
would describe it, and this was back in 2008. putting aside some of the fringe elements that may be running for president, do you think mitt romney or jeb bush will move in this direction? >> we didn't see this from mitt romney. he was really responsible. we did see bobby jindal, who considered a mainstream candidate. bobby jindal does not care about the fact--he's not a bring guy. he's mainstream republican. >> is there a danger that says yes, you have conservative activist who is will determine who the republican nominee will be just like the democratic activists on the left, but in this particular case you have as
much as 20 different republicans running for the nomination, each trying to outflank the other an trying to get that extreme support that may help them catch on fire? >> i think there are certain minority groups you can demonize more than others. if there is an anti-semitic remark, there be some who unite against it. you demonize muslim, we don't have any supportouts of the community, i'm muslim-american. we have many who stay silent and it's scary. there is a mainstream republican in oklahoma, john bennet who said that muslim-americans are a cancer that must be cut out of society. the state g.o.p. chair did not ask him to apologize. that's going to creep into mainstream republican discourse. i fear that. i want to be wrong. i really hope we can have a conversation that says that i was wrong.
i would be happy to be wrong. >> but is it possible that one of the republicans will stand up and say this is america, we won't demonize the way some groups are demon demonizing muslims. >> i would toast that action. i don't see any it in the prime minister, i see it in the mainstream to say i'm above demonization. i'm not against people. i doubt we'll see that with muslims. >> dean, it's great to see you on the program. up next on "real money," the program to help make republicans look bad and how the g.o.p. could turn the proposal into a trap for democrats.
>> president obama wants to raise taxes on the richest americans that will help pay for programs that will help benefit the middle class. this is how he described his plan in tuesday's state of the union. >> allowing
the top 1% to avoid paying taxes on their accumulate accumulated wealth. we can use that money to help families pay for child care an accepted their children to college. we need a tax code that helps americans get a leg up in the economy, and we can achieve that together. >> david cay johnston, is best selling author who teaches at college of law. he is currently a columnist for al jazeera, and in his latest piece he said that the president used the state of union address to unveil a tax law that will trap the g.o.p. >> when did you last year leading republicans come out against any form of tax relief?
the president came up with a plan aimed squarely at middle class americans who pay federal income taxes that are pro child, pro family, pro work, pro savings and has tax simplification that the republicans themselves have called for. right an ever the after the speech what did you see the republicans say? this is wrong. the president's plan is not in accord with what middle class americans want. >> i thought he was referring to the pay for, the taxes on the wealthy to pay for like community college, by will come at a cost. but let's show at a the republicans go --suppose that the reference go back to their natural instincts and say you have to pay for it through cuts in entitlement and cuts in spending. >> my column points out there is
way to bite the president with this. introduce the bill that does everything he wants except the increased taxes on those who have very large incomes from investments, the ronald ray rate by the way,, and getting rid of the stepped up basis when someone dies their assets are then wiped oh you had. they could turn this around on him. but what the president was doing was setting up the debate going into the 2016 congressional and presidential election. >> i agree with you. and if there an opportunity for democrats like hillary clinton to he embrace the pop you populism and put some in the corner.
>> the most political law in the united states and possibly the world, instead of being based on sound economics and the institutional mandates that promote the general welfare, it's based largely on political favors and lobbying. our tax code right now prints out at 5,348 pages. i'm in the process of writing a new tax code called "the honest tax" that will script out 5,000 of those pages. we're all taxed evenly in the sense that we don't get to defer our taxes into the future. we now have a situation in which many very wealthy executives and multi national corporations don't really pay taxes. they profit off their taxes by deferring them into the future. >> and there are some democrats who are criticizing the president by not going far
enough on interest and capital gains. is that another example of the politics and influence it has over the tax code? >> yes, if you're a hedge fund manager you can share in values but you don't have to recognize taxes. but you can borrow against those shares and live off money tax free. the president who brought this up in the past said nothing today. he wanted to focus the political debate on the burdens of middle class taxpayers. he said nothing about the poor. he had one provision that would help the poor, roughly minimum wage, and he focused entirely on middle class and families in this address. >> president obama begins a three-day trip to india on sunday.
his second visit to the country. talks between the president and indian prime minister narendra modi will cover issues like climate change, defense, there is hope that it will become easier for american companies to do business in india, but some worry that not enough attention is being paid to human rights in india. >> is it they're fashioning their dream business in india. in 2010 they set up exclusively dot in an online boutique that sells designer indian garments. four years later it's still open for business and doing well. >> we were optimistic that things would improve. if you've seen the last 12, 24 months in terms of e-commerce it's exploded, and the next ten years are going to be phenomenal. i think that we stuck around for that reason.
but i think the religion original reason in coming here is that india is close to our hearts. >> as their traffic site grows so does their consumers. while they try to sell to customers around the world others stay at home marketing to wealthy indians who can afford it. >> the hope, their investment insures them a much sought after green card visa. he said that his work reflects the change in the indian india-u.s. relationship. >> we're an american business that is for-profit, and we have
decided that this is the place to be , and we're investing to make the most that have. >> indian president narendra modi has focused his attention on attracting more foreign investors to india. but not everyone convinced that his pitch is right. >> it's important to bear in mind that all economic interventions and businesses that come here have to actually recognize the needs of the indian people in terms of their human rights. and too much of the foreign investment that is coming here is based on a lack of acceptance of human rights of indians. >> with concerns such as these packaging and selling the best that india has to offer is far from easy. but for americans investigating in india the promise of delivery is worth the wait. al jazeera, new delhi. >> coming up, the search for preys in the middle east.
former british prime minister tony blair tells ali velshi what he thinks has to happen to end the cycle of war and violence. >> sunday night. >> 140 world leaders will take the podium. >> get the full story. >> there is real disunity in the security council. >> about issues that impact your world. >> infectious diseases are a major threat to health. >> "the week ahead". sunday 8:30 eastern. only on al jazeera america.
>> former british prime minister tony blair is special envoy to the middle east quartet. the nations are trying to mediate between israel and the palestinians. but as the peace process deter yates critics are questioning the value of the group, and a lot of people have added to the call for more imaginations to be added to it. former prime minister tony blair defended the quartet. >> younowadays you put on your
resumé what you achieved on your watch, and on your watch as representative for the quartet we've had three wars and a deteriorateing palestinian economy. i'm not putting it on your shoulders. but how do you square that on your resumé? >> i describe it slightly differently. in the first few years when there was political push forward, then in fact, you lose double-digit growth. i've always believed the policy of blockading gaza was wrong. since the negotiations broke down in 2011 it's been difficult. my intent there is not as if i'm the only person who has been trying. >> is the quartet valuable. >> the quartet is managing the international community.
some say why don't you change the quartet? that would just give you 70 countries sitting around the table. the whole purpose of the quartet is to put the main players together in a manageable form, but it doesn't--if there is a disagreement as to how to move forward the quartet per se cannot help it. i'm not a member of the quartet, but i merely have responsibility for doing what we can on the palestinian economy, and you know, the most important thing right now, frankly, is to stop the pa from collapsing all together because that would be a disaster for everyone. >> i would like to think that peace is possible between israel and palestine, and that we've all sort of come to an agreement that we think philosophically that a two-state solution makes sense. what is the biggest impediment who is holding back from this? what needs to happen? does hamas not need to be as big of a play? does pa need to step up?
does israel need different leadership. frankly speaking as if there were no cameras here. >> you're a very beguiling interviewer, i'll say that. >> let's just pretend. >> right, i think there are three things. when i get back to jerusalem in the next days it will be my 135th visit since leaving office. i'm there. i'm seeing it. i think there are three essential things that are missing from this. the first is--and it's not in my view about any negotiation where you put people in the room. i do in the think that is the big problem. truthfully most people, if there is a good atmosphere between the two sides most people think that you could decide the palestinians state even if its like jerusalem, if you want a solution, the solutions are all there and have been canvassed a
thousand times. the israelis have got to be prepared to treat the palestinians properly and justly subject to the issues of security. but there are a whole range of things that could do to improve the lives of ordinary palestinians that we should be doing, in my view. secondly, you've got to unify palestinian politics on a basis that promote the two-state solution. if palestinians politics remains divided how do you get to a proper peace table. and thirdly, you've got to involve the region. the key to this is less united states has a vital role, and john kerry has put an enormous amount of energy into this, and the e.u. is also very concerned about it, but in my view it's the regional powers, particularly egypt, the gulf states, jordan, these are the countries that i think if we can create --help resolve the first
two issues and help the region stand up and largely around the arab, i think there is a majority for for a deal. you're not going to get a deal by simply putting people in the room. >> when you look at the threat of the islamic state in syria and iraq. two very different problems. both vacuum-ish. in iraq you have a real government that has trouble enforceing its authority. and in syria you have something else all together. what is the solution here? because isil has created a situation where we have to look at those not in isolation of each other, but they are two different problems. >> they are two different problems, but you're right, we should not look at them in isolation. syria is a nightmare, and it's--i think of all the those situations policymakers need to look at what is the solution.
the reason why i argued two or three years ago if you need to cut the deal with assad and makes transition over time, do it because you can see precisely what happens when you remove dictators elsewhere. but by the way, if you're insisting that he goes, get him out. don't call for him to go, give him no way out and then leave him. what has happened, of course, is iran is coming in on his side. they've brought in hezbollah. then whey win help the syrian situation properly, then over time people who go in to do the really dirty work and the killing and fighting with the more extreme groups and solely you have this metamorphous of the syrian opposition. in the end you can't worse syria from what is happening in iraq. personally, you have to go back
and say how do you force assad to the table on one level. how do you make sure that the syrian opposition are actually helped properly, and how do you at the same time, this is what is incredibly difficult, take on and defeat these radical groups? but it's hard for me to see how you'll have a solution that works in iraq if it's not also linked to what is happening in syria. >> do you see assad continuing to rule syria? is that a necessary pre-condition? >> i hope not. but what i'm say something that in the end there is no future for syria with assad remaining in power. but the question is how do you now manage a process where you--where there is a new constitution put in place that has some chance of getting support for the whole of the country. now, the other issue in all of this, which i again think is fundamental, how do you then create the right circumstances
of religious tolerance and inter-religious or inter-religious respect that allow countries that have a religiously diverse population-- >> like syria does. >> as syria certainly does. talking to people of the christian faith in places like syria is that they have--on a if they find repugnant what assad is doing to his people, they're worried if the other people come in, what's happened elsewhere in the middle east will happen there, and they'll be unable to practice their faith. you have that dimension as well. this is incredibly difficult. my view is that the questions for the west are how do you--one piece of good news is that you've got allies who are prepared to come with you now from within the region. most countries in the region and this is the difference between afghanistan and iraq in 2003, most countries in the region now realize this is their problem. it's not just ours although it is ours as well because of the
possibility of our own people returning from syria to commit terrorism in our own countries how do we put this together now and do it in alliance with the countries in the region? what i would like to see is that done with the force capability level, governance level, and also this question of how do you create a counterweight of religious exclusiveism and disrespect towards people. >> that may be the biggest challenge. >> up next, can the washington nationals $210 million contract format szerz er be a bargain? it can if something right is happening to the economy. we'll explain when real money returns.
league baseball pitcher matt scherzer. the team thinks it is getting a long-term bargain. that's because the nationals are betting on an increase in inflation. let's bring in celebrity sports agent leigh steinberg to explain. welcome to the program. if inflation goes up 1% each year over the next 14 years at the end of the contract instead of $15 million in today's dollars, it will have the buying power of $12.9 million. is that how this works? >> how it works is you take a valued discount using the inflation rate. which we're not sure of. i had inflation as high as 17%
we know if we deferred dollars to the future it will be worth much less than the face. you have a seven-year playing contract with payments spread out over a series of years. if inflation gets high, if it goes back to 6%, 8%, 10%, then the dollars that the nationals will be paying will be just a fraction of what he thinks he's getting. if inflation stays low, he's got a good deal. remember, all this money is guaranteeed. so if he's not a very good pitcher, if he's injured, he still gets paid. >> now is it a wise bet in this day and age for the owner of the nationals to be betting that inflation is going to be high, which would mean that the dollar figure would be less in real terms, is that very common these days? >> no, this is the first big deferred-money contract that i've seen in some time. the other variable is what will the tax rate be?
over the years we've tried to arrange contracts if you saw a republican president was coming in, and the tax rate would drop or democrat, it would go up, you try to place the payments into the years with the lowest tax rates. but the concept of extending the payments two things happen: ,number one, the revenue sources continue. and the second is that we virtually had no inflation for a number of years. that's not traditional. so it's artificially controlled as you know. the point is that that inflation rate could well be 8%, 10% something like that. in the jimmy carter years it was off the charts, and so we tried to get every single penny up front. >> that raises a question, was it a wise more for matt scherzer and his team to bet that inflation is going to be low
which is clearly the bet that they made in this deal? >> well, i don't think that's a great long-term bet, but remember, there is so much money in this deal that if the differential is that he's fabulously wealthy or fabulously wealthy plus a couple of million dollars, he'll be just fine. >> for all of us who may be negotiating contracts in whatever the field is, if someone says we'll give a five-, seven-, ten- year deal, what would you advise? >> the first question is could you get an inflation factor or cost of living factor that would allow those later years to flow so that the value of those years becomes closer to the value of today. but otherwise, depending on what you think of inflation, up to realize that the dollars in the later years are going to be
worth much less because it's a compound mathematics. we're far past the day of athletes needing to have money stretched out into the future for great financial planning. they can do just fine with financial planners getting as much money they can get up front. >> we have to ask you about deflation. the deflate gate in the nfl, what do you make of this whole controversy involving the patriots and the fan reaction and how that might diminish the value of all the players and the league? >> first of all this, is the greatest nightmare that nfl could ever had. sunday 3,000 reporters hit phoenix. and to have the topic something different than whether seattle or patriots are better, this is the biggest marketing week for the nfl.
all the sponsors are in town. tv audience is huge. to have the focus on this issue is a nightmare. here's the problem, the reason why a sport like football is so popular is that you assume its played on an even playing field. that's what distinguishes it from wrestling, which you figure is staged. so that means the equipment, the rules are standardized, and the only differential is how coaches plan and how players do. any incident imagination intimation that something else was happening is upsetting. if you ever thought that the games were fixed or rigged, it goes right to the heart of the nfl. would it have made a difference in the stomp down that the patriots did?
no, probably not, but they won the week before by four points against baltimore. i thought, i was reminded of casablanca yesterday as i was listening to the press conferences. i'm shocked. most coaches are aware of every single thing that happens, and no one was taking responsibility. i guess the balls from organ organically decided on their own to let the air out. >> the fact that brady and belichick are saying i have no idea. that's what makes this controversy continue for a while. thank you for coming on to the show today. we appreciate it. >> thank you. >> that is our show for today. i'm david united statesser shuster in for ali velshi. thank you for joining us everybody, and have a great weekend.