tv Your Money CNN September 9, 2012 12:00pm-1:00pm PDT
i kept the republicans honest last week. now i've got the democrats in my sights. i'm ali velshi and this is "your money." let's start with the man at the top. >> obama! obama! >> reporter: barack obama promised change. >> this is our chance to turn the page on the policies of the last seven and a half years. >> reporter: the promises he made were big and they were specific. >> we are going to roll back the bush tax cuts. >> reporter: instead, he agreed to extend those tax cuts for two more years, in a compromise to get republicans to extend jobless benefits to millions of unemployed americans. >> i have no doubt that everyone will find something in this compromise that they don't like. in fact, there are things in here that i don't like.
>> reporter: barack obama promised to clean up the financial sector. >> we've got to solve this banking crisis. >> reporter: but opposition in congress watered the reforms down. banks are still risking your money. some say wall street is as treacherous as ever. barack obama promised foreclosure relief. >> we're going to put together a foreclosure fund to help people stay in their homes. >> reporter: his multiple plans did help, but fell far short of their goals. foreclosures are down, but 3 million homeowners have lost their homes since barack obama was sworn in. and barack obama promised to tackle the federal deficit. >> i'm pledging to cut the deficit we inherited by half by the end of my first term in office. >> reporter: that didn't work out the way he planned. >> i tried to only make promises that i can keep or work on keeping. >> reporter: politifact says president obama has kept 37% of his campaign promises. he's compromised on some and
broken 16% of them outright. that leaves another third either stalled or in the works. was barack obama deliberately misleading to get votes or is the intransigence in washington just too hard to overcome? to some, none of that matters. the only question now, can they trust barack obama? we know for a fact president obama did not create the economic crisis, but has he done enough to fix it? is he the man to stand up to the economic storm that we know is headed our way? i want to bring in don peebles, he owns a real estate development firm, he's a democrat, a top fund-raiser for the obama campaign. good to see you. don, why has the president only come through on 37% of his promises? >> you know, politics is one of the areas, unlike business, in business you can underpromise and overdeliver and in politics you've got to overpromise to get elected, but let's look at this. the president has actually
fulfilled many of his promises. he killed bin laden, he saved the automobile industry, he has stopped the foreclosure process significantland the real estate market is actually on the way to recovery. his biggest failing i think is the deficit reduction. i think that's the biggest failing but overall if you look, politifact indicates with 37% of the promises fulfilled, only 16% broken, that's a pretty remarkable number when you compare this president to other presidents of the past. >> don, let's bring in ed lazear, economic adviser for president george w. bush who by the way is the president many democrats blame for getting into this recession. it did start on his watch. ed, as you heard many times at the democratic convention, obama wanted to save the auto industry. mitt romney took a more business-friendly approach, which would have likely seen greater job losses. president obama has provided more capital for small businesses, broadened new consumer protections and for half a term we an unfriendly congress to work with.
not counting job creation, we'll talk about that in a separate segment after the commercial. is there really a case that this president has failed economically? >> well, i think you can't certainly blame him for the early part of this presidency, that is the legacy of the past, but what we have to look at is where we are now, and this is now almost four years later, from the time that he took office, and i think that the policies that the president has favored are those that focused on the short run. they were, to be honest, a little bit gimmicky and political and they didn't create an environment that set us up for long-term growth, so that's the situation that we're in. if you look at the period since the recession ended, which is actually back in june 2009, people don't realize that, but that's when the formal recession ended. we've had growth that's only about 6%. growth that's only about 6%, and if you compare that to any other recovery, by the way, including the great depression, it's just, it's meager.
so the question is, what is causing that problem, and i would argue that much of it is a failure to focus on the kinds of economic policies that would create an environment that would be positive to long run growth. >> you were talking about the recession. we have martin feldstein, former chairman of the council of economic advisers under president reagan, now he's the president emeritus at the national bureau of economic research. that's the group that actually determines when recessions start and end in this country. martin, you are one of the smartest economic minds in the country, great to have you here. president obama we all agree that was left with a crisis that was not his doing, we all agree. he comes in, had a friendly congress the first two years of his administration to the extent that a president is able to influence the economy, and that is a matter of debate, but to the extent that you believe he is, has he done enough? >> i would say definitely not. the administration, the president takes credit for
preventing the economy falling into a deeper hole, he talks about we were on the verge of a real crisis, we prevented that, and i think what were the policies that prevented that. that was t.a.r.p. and tauf, those were passed in 2008. >> under the bush administration, absolutely right. >> under the bush administration. >> let's talk about the big thing when president obama came in was stimulus. >> so they passed in early 2009 a major stimulus bill, $850 billion over three years. very poorly designed, economists will argue about how much it actually did, but my guess is, it added less to gdp over those three years, than it did to the national debt. >> there's generally broad agreement, martin, that it was poorly designed, well intentioned, poorly designed, possibly in the way it was distributed and whether it really had the effect of creating jobs or just going out
to what we called shovel-ready projects. we are tinkering around the edges a little bit so now i'm going to zero in on the thing that matters most, and that is jobs. i think we are all agreed that job creation is at the center of economic growth in the united states, so don, ed, martin, stick around. we're going to continue this conversation after the break. you all know now the unemployment rate in america fell last month but before anyone celebrates, realize this is because many job seekers appear to have left the workforce. i'll show you the hard numbers on whether president obama is a job creation failure or success, after the break. [ male announcer ] now you can swipe... scroll... tap... pinch... and zoom... in your car. introducing the all-new cadillac xts with cue. ♪ don't worry. we haven't forgotten,
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months in which jobs were lost and in 2010, a few gained, then lost, and that's what it's been like for about the last 30 months. 95,000 jobs were created in august, as you can see, since president obama came into office it's been slow and unsteady, but the job losses he inherited from president bush did stop, and companies began to hire. more recently though in the face of growing economic storm clouds in europe, job creation, as you can see over toward the end, has been more muted, but there are two more monthly jobs reports before americans head to the polls. the last one will actually come just four days before the election, and if the economy can add 261,000 jobs more, president obama will, you can be sure, make the claim that every single job lost on his watch has been recovered. ed lazear, be honest, don't be partisan here, is president obama a job creator or a job
failure? >> well, i think the statistic that you gave is the important one. i would have put it in a slightly different way, though. i would say that the, more americans were working on the day that president obama took office than at any other day during his term. >> uh-huh. >> so that is not an impressive statistic. you also made a point about hiring and i think that's a very important one. unfortunately, our level of hiring is not much above where it was back in january of 2009. we're hiring about 1 million people fewer per month than we should be under normal terms, and the labor market can't really recover until the hiring rate gets up to somewhere close to about 5 million a month. we're now down at about 4.3 million a month, so we still have a long way to go and that's an unfortunate part of the labor picture. as you mentioned, you know, this is where the hardship is really felt. again, compare this to a time back 2007 when the labor market
was strong. people had about 2.5 times as great a chance of finding a job then as they do today, so this is still a very depressed labor market. >> martin feldstein, on wednesday night president clinton offered this analysis. >> president obama started with a much weaker economy than i did. listen to me now. no president, no president, not me, not any of my predecessors, no one could have fully repaired all the damage that he found in just four years. >> the politics of what ed was saying, more people were employed on barack obama's first day in office than at any other point in his term, in his presidency, square that with what you heard from president clinton. sounds reasonable. >> well, first of all, this is a growing population, so we have to create as an economy
something like 150,000 net jobs per month just to absorb the growth of the population of people who would otherwise be looking for work. >> so this is an interesting point, based on the number of people who were added through immigration or coming into the working age versus those who retire or die or leave the workforce, if you had an unemployment rate you were happy with at 4%, say 5%, just to keep it there you'd have to add 150,000 jobs. >> per month. >> fewer than this month, we added fewer jobs than we should. >> we added 96,000 in august, and the only reason that the unemployment rate dropped is that four times as many people stopped looking for work as found jobs. >> so let's explain this. 368,000 people dropped out of the labor force and the labor force participation rate, which is the percentage of people available to work, who are working, is at its lowest level
since 1981. don peebles, let me talk to you about this. how much of this was going in this direction and what could president obama have done more to solve this problem? >> look what president obama inherited was an aftershock of a tremendous earthquake in this nation's economy. the president moved quickly, saved the american auto industry, saved over a million jobs, increased access to capital to small businesses and reducing taxes on small businesses. the job loss stopped, and there's been positive job gain for 28 months. the president, not as much as we would like to see, but positive job growth. he will, before he is reelected, will have eliminated all of the job loss under his watch, and we will continue to see job growth going into the next four years
of his administration. >> martin, you're the expert on recessions. are we headed toward a recession. >> i don't think we're headed to a recession. we're stuck with, we're in a deep hole, the economy is very weak and it's just crawling along at a very low pace. we would really need to be growing twice as fast to start making a dent in the unemployment, in the extension the long-term employment which is much worse in this recession, in this expansion in this business cycle than it has been in the past. >> well, that is a very good note to end this on. we would have to be growing at a much faster pace than we are right now, about 1.7%, maybe a little over 2% next year to put a dent in unemployment. martin great to see you as always, martin feldstein, former chairman of the council of economic advisers, president emeritus of national bureau of economic research and a professor at harvard university. don peebles, ceo of the peebles corporation and ed lazear, former chairman of the council of economic advisors and senior
fellow at hoover. gentlemen, thank you for joining us. this takes me into my next conversation. mitt romney says he can create 12 million jobs in his first term if elected. that sounds like a great change, but is it possible? i don't think it is. i'll take another swing at explaining why after the break. i love you, james. don't you love me? i'm a robot. i know. i know you're a robot! but there's more in you than just circuits and wires! uhhh. (cries) a machine can't give you what a person can. that's why ally has knowledgeable people there for you, night and day. ally bank. your money needs an ally. you want to make sure it goes up and stays up. [ chirp ] th android apps, you get better quality control. so our test flights are less stressful. i've got a lot of paperwork, and time is everything here. that's why i upgraded to the new sprint direct connect. [ chirp ] and the fastest push-to-talk nationwide. [ male announcer ] upgrade to the new "done." [ chirp ]
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so i find this idea, this promise of creating 12 million jobs over the next four years to be so preposterous that i said i would wear a dress for a week if that happens, yet that is exactly what mitt romney claims he will do if elected in an economy that is so desperate for jobs, bold promises about job creation could win people's votes. that is why i find this claim so problematic. >> and unlike the president, i have a plan to create 12 million new jobs. >> now, here's the problem. there's probably very little political value in barack obama saying he can't create as many
jobs as mitt romney says he will, so stephanie cutter, who serves as deputy campaign manager for president obama, came back at republicans last week on cbs's "face the nation." >> economic forecasters already said over the course of the next four years, if we stay on the president's plan, will create 12 million jobs. >> 12 million jobs over four years is 3 million jobs a year, or an average of 250,000 jobs per month every month for four years. so how is romney going to do it? well, that's where things start to fall apart. the romney plan says it's going to be achieved by stronger economic growth and tax reform, and lots of other things that aren't likely to happen any time soon. the whole plan is a little thin on detail. now i'm going to save my next guest some time. he'll say not only is it possible, but that it's been done before. three presidents in modern history have accomplished this feat.
our analysis revealed that bill clinton, ronald reagan, and fdr all had 12 million new jobs created during their presidency, but none of them were dealing with the kind of economy we are in now. in order to see the kind of job growth that romney is promising, the economy would need to be growing at a much faster rate than it is now. when president clinton was in office, u.s. gdp was at 3.9%. under president reagan, it was at 3.4%, and fdr had a gdp rate of 8.4% during that time that he was in office. compare that with the forecast of 2.3% for our economy in 2013, and the anemic 1.7% that we saw in the most recent quarter. now kevin hassett is an economic adviser to mitt romney, he's the author, one of the authors of this 12 million jobs in four
years claim. very patient man because he keeps coming back to discuss this with me. kevin, we have been down this road twice -- >> you'll get it right sooner or later. >> fair enough, that's why we talk about it. we've been down this road twice before on this show and you haven't given me more than generalities as to how mitt romney n an economy that is expected to go 2.3% in his first year in office, gets anywhere close to these job creation numbers. martin feldstein just said we cannot put a dent in job creation unless we have higher economic growth. >> sure. well, i think that the higher economic growth is absolutely the key, and if you go back to what stephanie cutter said, she said, you know, there are private sector forecasters calling for 12 million jobs created over the next four years already. well, those private forecasts i think are really, really implausible if president obama is re-elected. indeed, if you look at what governor romney was saying in the clip, he began with, unlike the president, and i think the first observation you have to make is that the president hasn't really proposed anything that could plausibly change us from the state that we're in
right now, which is one of almost no job creation so your question is -- that's the first point. >> okay. >> the second point is would governor romney's plan give you the 12 million jobs so make what the forecasters are saying becomes possible? i think it would and it would the first is that he's got a big corporate tax rate reduction and that's going to encourage firms to bring the jobs home. right now they're not doing that. we have about the highest rate on earth and we've got the lowest revenue on earth. >> you know for a fact that some of the biggest corporations in this country don't pay anything near that. ge has been cited as a remarkable example of that so the rate that exists isn't really true. the u.s. corporate -- >> no, no, no, no. >> -- u.s. tax system, it's not really true. a lot of companies jt don't pay that rate. >> no, no, but the way they don't pay it is important. the way they don't pay it is if you locate your activity, overseas in ireland where you pay almost no tax,hen what you do is you sell everything that you're selling in europe through
ireland and you locate the profits in ireland, you pay no tax in the u.s., and so your average tax, if you're a multi-national that can do that, is very, very low. that's absolutely true, that's why we have no revenue from the high rate. the key is in order to play that game >> what would lowering the tax rate do? >> let me finish. in order to play that game you have to locate jobs in ireland. we're telling our firms if you move the jobs overseas, and sell from there, we won't tax you. but if do you it here or in detroit, then we're going to tax the heck out of you and that's just wrong and something that romney wants to fix and obama doesn't. >> kevin, i'm canadian, we come from a country with low corporate tax rate. i'm not -- you know i'm not arguing with your premise. >> right. >> i do not dispute 12 million jobs can be created in four years. i'm wondering how fast you can turn this around and here's the added thing. lot of the forecasts about how fast the u.s. economy is going to grow next year and the year after have to do with, you know, some of this uncertainty that i
hammer away on on my show and some of this ill-functioning congress, some of it's got to do with those storm clouds from europe. >> sure, it absolutely does. europe is a big problem, but i kind of would ask you, what is barack obama doing about europe? what's his policy on that? i think that he's not really been a leader on economic policy and has created a lot more uncertainty. governor romney would be a leader. you mentioned you're from canada. i think it's kind of interesting that the u.s. in part because the democrats are so far to the left now, is really way to the left of just about everybody on earth. you know, we hear at the american enterprise institute are pretty conservative place, we brought in the swedish finance minister to talk about what they're doing in sweden which is so much more prudent than what we're doing in the u.s. and canada is another example. so i think the point is just that the ideas that governor romney is pushing are ideas that have been tested by such radicals as the swedes and canadians and been proven. >> you're just trying to butter me up. >> it's true, you know about the canadian success story and it
was the liberals, i bet you have inside stories about this, the liberals in canada that cut the corporate tax rate. >> that's right. >> it was the liberals. >> kevin, you're warmed up. i'm warmed up. stick around. i want to ask you when we come back, and some others, are you better off than you were four years ago? >> actually worse than four years ago. >> i'm better off. yes. >> i make about a third what have i made four years ago. >> financially i'm better off. >> those are your answers. i'm going to tell you why the question is wrong. bob... oh, hey alex. just picking up some, brochures, posters
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are you better off than you were four years ago? in presidential election years it's the age-old question made famous in 1980, when ronald reagan electrified voters during his only debate with jimmy carter. >> when you make that decision it might be well if you would ask yourself, are you better off than you were four years ago? >> now the romney-ryan ticket is running with reagan's notorious query.
>> are you better off now than you were four years ago? >> no! >> well, you know what, with he knew it then and know it there, they fired carter and hired reagan and we're going to do the same thing this time. >> i get that it's pithy and it's effective but here's my problem. this election year i think it's the wrong question. what i think you should really be asking is this. are you better off than you would have been, had we not taken extraordinary emergency measures to prevent the worst financial crisis since the great depression from getting worse. i know it's not as pithy and not as sexy and it's not a ten-second sound bite for us to use on tv, but it's an easy answer, because of course you are. and maybe not you, personally, but the entire economy in which you exist. four years ago, the economy was headed into the abyss, major investment banks had failed, taking their shareholders, including your 401(k), i.r.a. and pension funds, down with them. the housing market had collapsed. the u.s. auto industry was approaching extinction, and
let's talk about jobs. the most important thing first. we lost almost 800,000 jobs the very month that president obama took office. in august, the latest month for which we have numbers, the u.s. added 96,000 jobs. that is not a strong number. it's actually a pretty big disappointment and not what the obama administration was hoping for but it is job growth nonetheless. in fact the private sector has now added jobs for 30 months in a row. let's look at home prices when president obama took office the median price was $175,000, they fell, then they improved, then they fell again. look where we are now -- much higher than we were back in january of 2009. look at the stock market, the s&p 500. that something that probably resembles if you have investments your mutual funds. at a four-year high, rallying more than 50% since president obama's first month in office. now, it's not enough, especially
on jobs. millions of americans are still out of work, but to pose the better off question as if this had been a normal time in our country's economic history four years ago, you simply cannot compare barack obama's first term in office to any in recent memory. let's bring back romney economic adviser kevin hassett. kevin, this is 3-1 now, i'm a canadian, chrystia's a canadian and dennis kusinich is kind of like an honorary canadian, he comes from close to canada. good to see you, congressman kusinich and chrystia. kevin, how can you even compare four years ago to today? the economy was in freefall. doesn't the president deserve credit for putting a floor under that collapse? >> well, i think that the point is that, you know, really we could start with a couple of 4 3s and i kind of agree with the are you better off question, in the sense as patriots we should ask is our country better off than it was four years ago and there are so many disturbing
statistics that you highlight often in your show, a couple of 43s. 43 million americans on food stamps, we've had 43 months of unemployment above 8%, and i think that their identifiable problems right now that could be fixed if we pursued good policies. that's what governor romney is saying. president obama is kind of out of ideas, not telling us where we're going to go from here so i think if you want to be better off four years from now he's not presenting a very good story for why, but i think that governor romney is. i agree it was a very difficult time that got president obama elected but i think if it was a great time then he probably wouldn't have been elected. we know a bad economy always hurts the incumbent party and whining about it and making executions is one thing. but if he did that and then said here's what we're going to do next, and if it was a convincing case for giving us job growth in the future, maybe he might be making a sympathetic case but he's not. he's making excuses and stopping there. >> dennis kusinich, congressman from ohio, former presidential candidate.
you know that i think this question is the wrong question. but it did get asked, like it always does, or you would expect it to get asked. the reason we're talking about it on the show a week ago the democrats really did a hatchet job on how to answer it. they just mucked up the answer to this whole thing. why haven't democrats got a better response to this? >> from our constituents we know that some people are doing better and some are not. the outsourcers are doing better, now they say they're going to insource if we only cut taxes further. that's baloney. the fact of the matter there's 10 million people out of work, we aren't creating jobs enough. i say this as someone who supports president obama. i'm still in the congress until january. there's someone to challenge the majority as to what they'll do to get nor people back to work but the whole idea of are you better off, you made the point, i mean, the country is better off, but there's still 10 million people out of work. there's still people losing their homes. there's a question when you look at all the money given out, $3.6
billion of all the money that went out went for mortgage modification. if they would have done that at the very beginning, our economy would be much better off right now. if the fed had done its job when they saw these no-doc, low-doc loans being booked like crazy, we would have been better off. >> everything you're saying, take this forward into somebody who supports president obama and to voters out there who are thinking should i give this guy another chance, i'm not sure where you're coming down on this. it sounds to me like you think enough was done wrongly. you just don't think that romney will do a better job. >> no, what i'm saying is this, that there are things that should have been done that would have created more jobs. we could have added a $600 billion highway bill a couple years ago that would have put america back to work with shovel-ready projects, help rebuild the infrastructure, $2.2 trillion undercapitalized. so there's workers who are ready to do work, there's work to be
done. the problem is, we have people in the private sectors telling the government don't spend any more. you'll add to the deficit. they don't say that when we're going to war or with respect to the tax cuts and they don't say that with respect to the trade deficit. when it comes to public investment they say whoa, stop, yet it's the public investment that's the basis for private prosperity. >> that's a point president obama tried to make and he's sort of pedaled back on that with the "you didn't build it" sort of thing. what's your take on this discussion? >> first of all, rather boringly ali, i completely agree with you, are you better off than four years ago, it is a great line, if i were a republican i would go out there but it's not right and ignores the historical reality of where the economy was when obama took over. what i really don't like about the whole economic discourse in this campaign right now is precisely that it is a historical. your reagan clip was really
interesting, because when you think about the debate we're having now between bigger government, smaller government, higher taxes, lower taxes, all of this stuff we could have been talking about in the 1980s. and i think it ignores the fundamental transformation of the world economy we are experiencing, and which the american middle class is experiencing right now. you had that very sad line of that woman who said "i'm making a third of what i was making four years ago." >> right. >> those jobs are being hollowed out and what i don't see on either side, frankly, is a creative grappling with the fact that the economy has changed, that the great middle class jobs, they are gone. they are gone. that is the nature of the new economy, and in the '20s and the '30s, you had a real grappling with what has industrialization done to the economy, how do we transform our whole society in government? i don't see anybody talking about that right now. >> that would be a much better discussion, because that's exactly what we need to deal with.
we're just getting started with this discussion. the economy has changed and both campaigns need to make that a part of the conversation. i'll ask our panel how we get answers to the economic problems we really need to solve. i-polic. paperless discount... paid in full discount... [yawning] homeowner's discount... safe driver discount... unicorn discount. unicorn wearing a sombrero. olé... countless discounts -- now, that's progressive. call or click today.
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welcome back to "your money." are you better off than you were four years ago? god, why do i keep saying that? why do i keep asking that question? i hate it so much. the romney-ryan ticket says that you are not and that's why they should win in november. i say it's a wrong question this election because four years ago the entire economy was on the verge of crumbling, and we are in a different economy right now. chrystia freeland left off with a great comment right before the break. kefb kevin, i want to put that to you. that would be more satisfying, better than the empty calories of job creation over a set amount of time. i'd love to know what you really think is going to drive this economy. those 12 million jobs over four years that you're promising, what do they look like? what do they feel like? are they a good quality? is there an industry that dominates that kind of job creation? chrystia postulated in the past it might be energy. >> i think energy is certainly part of it but i want to go back and disagree, because i think
that the reason why governor romney is really grappling with how the world's changing and how the world economy is changing, and it's evident in his policies, is that he understands that we can no longer afford to just pretend to the rest of the world doesn't exist. why is it, we talked earlier about how canada and sweden and even france and germany have really kind of right wing supply side corporate tax policies. why do they do that? they were more connected to the world economy. european nations if you're belgium and luxembourg has a smarter tax policy than you do, all of a sudden everybody's going there. you see it right away. in the u.s. we've been kind of insulated from those forces and allowed our policies to get really out of whack and we have to fix that. the congressman mentioned if we gave people an incentive to locate activity here in the u.s. it wouldn't matter. it could be incentives don't matter, in which case all of us policy wonks would just hang up our hats because we'll never affect anything. i think incentives do matter. you're right that president obama came in, in a crisis but let's not just talk about four
years ago, let's talk about two years ago. we should have started to grapple with the fact that the global economy is changing and that american workers are suffering, because we haven't updated our policies in response. i think that if you think of it that way, that really will help you understand why governor romney's proposing what he is because his policies really do learn from the lesson of other countries like the europeans and the canadians. >> which is why we like having congressman kusinich on the show, because he is a big thinker. he has been a presidential candidate a few times. congressman i want to show you a recent cnn/orc poll found a dead heat in this very question that i'm not enjoying, the are you better off question. 44% said they were better off, 43% said worse off, 11% said the same. so bottom line is while it may not be a good question, you've said it. you said some are better off, some are worse off. if you frame the election this way, the democrats have got to come up with a stronger message. what would that message be, if you were framing it? >> first you have to look at an
analysis as to what happened. i'm listening to my republican friend here and i'm thinking that this is the rip van winkle monologs. you have george bush who created over $1 trillion in tax cuts. where was the investment? hello? set the stage for wars that would cost us trillions of dollars. that's a bad investment. trade policies continued that have lost america over a period of time millions of jobs, and those jobs aren't coming back unless we have workers rights, human rights and environmental quality principles. so what we need to do going forward is recognize that there's $2.2 trillion in infrastructure needs, have the government spend the money into circulation to create the jobs, put america back to work. the fed through its quantitative easing has not really resulted in the jobs being created in main street, they propped up banks too big to fail and bankers too big to jail. we have a condition where we have to prime the pump of the economy.
you do it with public spending and that sets the stage for a recovery. >> chrystia, what do you think? >> well, can i come back on kevin's point that canada is a republican paradise? so kevin, i'm very flattered by your praise for canada but i do have to point out that part of the canadian secret has been very, very tough bank regulation, much tougher than in the united states, even today. and certainly much tougher than the republican party is supporting. and also a state which is bigger than your party supports, and a state which is bigger, even frankly, than barack obama supports. canada has universal single payer health care. >> which pretty much everybody agrees on in canada. we'll leave it there, always a pleasure to see you, thank you, congressman, representative dennis kusinich of ohio, kevin hassett, senior at the economic institute, and chrystia freeland, editor at thompson reuters digital. coming up, the auto bailout worked, romney might have been wrong. >> governor romney opposed the plan to save gm and chrysler.
[ booing ] so here's another job score. are you listening in michigan and ohio and across the country? >> the question now is, how are the campaigns going to spin that and how should it affect your vote? when we come back. you're watching "your money" on cnn. [ male announcer ] what can you experience in a seat?
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. the u.s. auto industry's recovery is one of the biggest success stories of the last four years. the center for automotive research projects car and truck makers will need to hire an additional 200,000 worrs over the next four years to meet rising demand. industry-wide u.s. car sales were up 20% in august. in 2011 jm posted record profits. for the first time since 2004 all three auto makers turned to profit at the same time yet the auto bailout remains a source of great controversy. it is bag problem for republicans because mitt romney said if you bail out the auto industry you can kiss it good bye. the man and i am joined by cnn contributor who never seems to like the idea that government should be getting in there to clean up somebody's mess. good to see you again. >> thanks for having me. >> you were there. i will give mitt romney this. he said something that wasn't really great to say. democrats perhaps have launched all nuance. they said he wanted to give up on the auto industry and let gm go bankrupt. you still think that was the wrong thing. you think the right thing to do was what president obama did. >> when you cut through all of this what mitt romney was
proposing would have led to the end of the auto industry. what i know is that if they had gone into chapter 11 without the government by their side providing assistance up front they would have run out of money and closed their doors thmpt suppliers would have closed their doors. ford would have closed its doors because it couldn't have gotten parts. toyota, honda and nissan may have shut down. >> you were maybe too young to remember this. ford didn't take money from the government but said if they were to go bankrupt putting auto suppliers out of business could have shut everybody down. >> let's be clear. gm and chrysler did go into bankruptcy. this idea that mitt romney said let detroit go bankrupt is false. that was a headline in the "new
york times." under the headline said gm ought to be ushered through a managed bankruptcy. it is exactly what happened. >> with the government by your side. >> the difference is who drove the bankruptcy. mitt romney made the argument that he thought the private sector should drive it. he was most likely wrong. we don't know what would have happened when mitt romney failed at his attempt at private driven bankruptcy. he might have fallen back on federal guarantees. he said in that editorial and just in case you think it was misinterpreted he wrote another books another one during the michigan primary in which he more strongly said president obama should have stayed out of the automobile situation and let the companies go through the situation on their own.
without the government there they would have run out of money. >> romney always suggests the federal government should be part of the bankruptcy. >> he said the government should not provide financing during the bankruptcy. he criticized what we did. if you think what we did is what romney said we should do then why is romney blaming obama for doing it. >> he suggested he had too much power. >> first of all we had no choice but to step in. this is the point i keep trying to make. if we had not provided the capital there would be no car companies. >> you don't have to misstate mitt romney's position to win the point. you don't have to send speakers on the stage. >> part of the issue, the difference between the auto industry and hostess and kodak is the intertwined relationship between those companies and their suppliers.
the calculation was if gm were to go bankrupt it could have been more damaging. >> this is failure much like what happened with the banks. there is no question to be absolutely honest about it, the millions of jobs at stake is different than a twinkie company. kodak has a business that doesn't really work anymore. hostess has a business that may not work. >> are you sure detroit works? >> you saw the number. >> calling the game in the second quarter. i say you are bailing out chrysler twice in four years. >> it is not like every other day. >> we agree on this. >> putting that aside. what we did this time these companies were restructured. chrysler has essentially merged with fiat. the industry is profitable. i think it is a success. i don't think it is the second
quarter. i it is the end of the fourth quarter. >> let's see if we get paid back. >> i just want a twinkie right now. >> good to see you both. coming up the conventions are over. president obama and mitt romney have made their arguments. now i want to hear from you. i will tell you how to engage next on "your money." ♪ ♪ ♪
this isn't the way the obama campaign wanted the convention to end. democrats spent three days. friday morning's jobs report brought everyone back down to earth. mitt romney calls it the hangover after the party. the labor force participation rate in the united states is at its lowest point since 1981. the economy added 96,000 jobs in august. we need more than twice that number for a meaningful recovery. it isn't what the administration wanted. we heard both sides make their argument. now i want to hear from you. who made the