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tv   Your Money  CNN  October 8, 2011 1:00pm-2:00pm EDT

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values summit in washington. i got a chance to talk to pastor jeffress about his comments. at 3:00 we take you inside the life of a transgender, story of a southern athlete, military man who chose to become a woman. at 4:00 look back at the training of the u.s. navy bombed tora bora as the war in afghanistan began 10 years ago. i'll be back in one hour. i'll be back in one hour. "your $$$$$" starts right now. -- captions by vitac -- millions of americans are still out of work. could things get worse before they get better? i'm ali velshi, welcome to "your $$$$$." the number has been rising steadily throughout the summer. the managing director for the economic cycle research institute. we sometimes think of him as our economic groundhog. when he's around a lot, it means there are months more of recession. when you came on this show very
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early in 2008, you were the first person on our show, on our network, to call that recession. you told us when we were out of it. now you say we are either headed for a new recession or we're already in it. >> right. absolutely. this is based on the forward looking indicators of the business cycle. that's all we do is watch those indicators, monitor them. there's an overwhelming message when we look at those indicators that is consistent only with the new recession starting here. when you think back to 2008, while we made that call, then it was prior to the lehman crisis economists were looking backwards at gdp. >> once we saw the lehman crisis everybody was on board with the fact there was a recession. before that there was a question. >> correct. when you see gdp positive or jobs numbers positive, you say there isn't a recession and you get pushback. time will tell. >> harvard professor, chief economist for international
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monetary fund. you've been on the show before. your point of disagreement, you say a lot of people feel the recession never ended. now, we are four years away from the official start of this recession. it started in december of 2007. we're certainly three years into the worst of it. where do you think this ends? >> well, i think we may be going very slowly for a long, long time. he's right. it could get worse before it gets better. it was a pretty mediocre jobs report. it's hard to distinguish this from whether we are or not already in a recession. >> all right. i want to take this to some of the frustration people are feeling. the occupy wall street protests are going on three weeks now and spreading to other cities. unfocused as they may be, the movement even got the attention of the president. >> you're still seeing some of the same folks who acted irresponsibly trying to fight efforts to crack down on abusive
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practices that got us in this problem in the first place. yes, i think people are frustrated. the protesters are giving voice to a more broad-based frustration about how our financial system works. >> chrystia freeland, editor of reuters. the president alluded to this in a different part of his speech, how about taking these protests and blocking lawmakers who are blocking the protection bureau from fully functioning. it is designed to protect us from the banks that got us into this financial mess in the first place. whether that's a solution or something else, how do you focus the anger, random anger of these people occupying wall street into something meaningful that could actually result in positive change? >> i think you're right, ali, to point to the fact this is a movement at the moment which is
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about protest and anger and frustration with the way the economy works, the way the economy is structured. it is less a movement that has a very clear agenda for how to fix it. in that way, i would contrast it with the tea party. >> contrast did not compare -- >> i think grievances are the same. i think grievances are legitimate. i think the bottom line is the american economy right now is not foworking for a broad swathf the merp middle class. that is not the deal in america, not part of the american social compact. they are angry and have a right to be. a clear point of view about the culprit and how to fib it. the view on the right is government is too big. if government shrinks, everything will be okay. the view on the left. government isn't working, bankers are getting too big a share. there is a less coherent answer to how you fix this unbalanced economy.
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i think that's why we're seeing occupy wall street protests have a less clearly defined agenda on the changes they want. >> although it starts to look like class warfare. there are some who say the part that's broken about our economy is that everybody doesn't have a chance to become prosperous. it's disproportionate. with these protests, what you're seeing are things, direct hate towards the rich, hate towards the banks which we know noticed to operate. we're getting into this weird situation, maybe it's high unemployment or inequality in the economy, but it is developing into class warfare. we didn't really think we'd see protesting in the streets of america the way we're seeing. >> yeah, i mean, if we have unemployment drag on, teenager unemployment they reported, almost 25%, when you have so many young people unemployed without hope, discouraged, it's a very, very volatile situation.
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sure, if we get better in a year or two, it will be fine. i do worry where it will go. chris, that's exactly right. there's a huge undercurrent of anger. you see it in the tea party, wall street protest, see it when you talk to people. where will that go, in our political system, what will it bring in the lec, what will it bring. i think that is a very tough question for america. >> just jumping on that, with the teenager unemployment, long-term unemployed, i think that's really the issue. i'm not getting into the politics but when you look at business cycles, more frequent recessions, what we have in front of us, we're not going to have the unemployment rate go way down any time soon. it's right now about to jerk back up noticeably. so that kind of unrest or idle hands, as it were, you're going to get a lot of pushback. >> we'll talk after commercial more specifically about jobs and how to solve them. for the people occupying wall street or the streets of these other cities right now, they
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probably think the conversation that you and chrystia and i have about whether it's a new recession we're going into or the same one, highly academic. how do your forecasts show things changing on the ground for people, separate from unemployment. are there other measures people will feel if we have another recession. >> absolutely. i will not debate this is a bad economy even prior to going into a new recession. make no mistake, when you go into a new recession, even if it's mild, it's worse. jobs are weaker, sales, income, production, all of those are going to be slipping. news flashes happening around the world, not just here. this is a global issue as well. we're not going to get out of this very easily. >> going into recession, too. >> the other element, which is really important and you alluded to, ali, it's not the same for everyone. the pain is concentrated in a particular degree, if you're unemployed it's really bad. if you don't have job security
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it's really bad. >> for some people they didn't feel a recession the first time it came around. >> for some people it's terrific. look at luxury goods sales. those are fantastic. some are doing incredibly well with technology and be globalization that's part of the reason you see the anger in the streets. people see that. >> we all agree if we had a lower unemployment number, greater job creation, it would certainly get us a long way to the solution. all of you stay there a second. stay where you are. jobs report came out better than expected. is it meaningful enough to put recession talk on hold? we'll talk about it after the break. take advil now and maybe up to four in a day. or choose aleve and two pills for a day free of pain. way to go, coach. ♪ add listerine® total care for more complete oral care. ♪ it works in six different ways to restore enamel... strengthen teeth...
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8.7 million jobs lost since the recession began. numbers like we saw in september won't do much to aid the meaningful recovery we all so desperately want an need. let me show you the september jobs report. an increase of 103,000 jobs. that was actually more than economists had expected.
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the numbers for august and july were typically -- they were always revised. they were revised higher. painted a little better pick. the unemployment rate still remains stubbornly high. this far into the recession while that's a politically popular number to talk about, it's less relevant than the number created. in the private sector, that's where we want to see more jobs created, 137,000 jobs were created. the government continues to shed jobs, 34,000 jobs were lost in the government. in a recovery, not the recession you think we might be in or going into or the one ken agrees has never really improved since this recession substantially, in a real recovery, what does jobs report look like? not only the number of jobs created, number of jobs created but where and what type? >> well, across the board, a reefer is pervasive, not limited to one area of the economy. that's key. it has to be pervasive.
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i think we saw what it looks like at the beginning of this year. between february and april the economy was creating about a quarter million jobs a month. that's about as good as it gets for the u.s. economy if you look over the last 10 years. whenever we reach that pace, that's about as fast as we can go on jobs creation. so it's critical we have a long expansion. here in this recovery ending, since 2010 have created 2 million jobs. lost 1.7 during the recession, we didn't have time to recover that. >> you told me, it takes a long time to ever recover all of the jobs you lose in any recession. >> all the recent memory 2000, 1980s, 1990s. a decades long expansion, over 20 million jobs. that's our goal.
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we need to see something like that. >> you have often said that's not likely. >> fundamental problem, we're not going to get that any time soon. we're back to short expansions. that's actually normal from 1799 to 1829, 90% of expansions are flee years or less. in the '70s, it was the same way. that's where we lived now. >> my next question again, particularly complicated. ken, when we started this recession unemployment 5%. a term many economists used to represent full employment. can you argue right or wrong. we were at 5%. in the recession the projections from the federal reserve were that we would get down to that 5% level by about 2013. everybody gasped and said oh, my goodness, that's a long way. ben bernanke started to stretch that out a little bit. the newest numbers, projections indicate around 2017 before we are there. is there hi way to make that
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glass look half full? >> no, i'm afraid not. i'm afraid after you have a deep financial crisis, this kind of contraction, recession is typical. it's hard to come out of it. frankly if you talk to businesses, they are not seeing much sales growth. maybe one or two percent. they don't need to hire more people to buy ipads to get extra out put. i think we're not going to see rapid growth. consumers are hurting. their housing prices have collapsed. they are overindebted. they are worried about their work. you're not going to see that demand feed into the business. our exports have not been as good as we liked. >> chrystia, we heard from the economists, paint a picture politically, we know demand is what causes jobs to grow. we know indebtedness can only be solved by an increase in income. you only increase income if you've got more jobs. we know we're not going to get
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back to where we are for a long time. the president wants better jobs numbers if nothing else to save his own jobs of is there anything in this jobs bill that he's presenting that would significantly bring down unemployment in this next year we're talking about, the next politically important year. i'm not really hearing that from these two guys. >> i think actually the jobs bill is a good bill. i think it would make a difference. i don't think it would move the dial hugely but it would help. the bigger issue, i think the political chances of that bill passed certainly in its entirety, maybe in parts, is not that great. so i think the political issue that the president faces is how does he present that. i think the choice we've seen him make is the choice that i think a lot of people feel he should have made a year or year and a half ago, which is rather than seeking compromise behind closed doors, to go out publicly and aggressively and say this is my program.
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if we were able to pass that program, we could improve things. i think the real dilemma for the president is what professor rogoff was pointing to his excellent research on financial crisis and what happens afterwards is the recovery from those crises is longer and more painful than the typical recession we are familiar with. and that is something really, really hard politically to deal with. on top of that, i think there are big structural issues in the economy. structural issues that tend to make unemployment a more difficult issue to grapple with. we kind of didn't feel those structural issues because the credit bubble hid them. the credit bubble meant there was lots of construction jobs, lots of consumer spending. you had your house as your atm and you could easily borrow money on your credit card. that's all gone. really america is now coping with how to restructure its economy in the age of globalization and technology
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revolution when as professor rogoff said you buy a few ipads instead of hiring more people. >> thanks to all of you. we'll continue this discussion. ken rogoff, chrystia freelander, editor of reuters. and managing director of economic cycle research institute. it is not all bad. we'll show you which cities have jobs right now and what those cities are doing right next on "your $$$$$." [ artis brown ] america is facing some tough challenges right now. two of the most important are energy security and economic growth. north america actually has one of the largest oil reserves in the world. a large part of that is oil sands. this resource has the ability to create hundreds of thousands of jobs. at our kearl project in canada, we'll be able to produce these oil sands with the same emissions as many other oils and that's a huge breakthrough. that's good for our country's energy security
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aspercreme breaks the grip, with maximum-strength medicine and no embarrassing odor. break the grip of pain with aspercreme. depending where you live the story can be different. let me show you on a map. as of august unemployment in el centro, california, and yuma, arizona was around 30%. las vegas and vero beach around 14%. still well above the national average, rocky mountain, north carolina almost 14%. on the opposite side, take a look at these place, portsmouth,
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omaha neb nebraska, midland, texas, all under 5%. richard florida senior editor at the atlantic. richard, tell me about these cities that are doing much better than the rest of the country. half the unemployment rate of the national average. what are cities like that doing right or are they doing anything right at all? >> well, ali, as chrystia just said, it is a structural unemployment challenge we face. as the economy transitions from this older industrial economy to this newer more knowledge driven, also resource driven. what you see is that instructial transformation chrystia and ken talked about imprinted on america's geography. places that are way out on the coast that had economies in the sunbelt built up on the housing boom and credit bubble, las vegas, riverside, california, even places in arizona lyceumik
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ark, old manufacturing centers like detroit, tragically, 15%, in the city the mayor said it could be as high as 50%. you have this other thing going on where college towns next to detroit like ann arbor have low unemployment, medical centers, to this, bolder, colorado, down in florida, gainesville as well. the knowledge centers of the country, washington, d.c. performing very well. then what's really striking is the plains, bismarck, fargo, lincoln, omaha, nebraska, oklahoma city, that belt. have you this new geography of america where some places almost don't feel the recession and others have been whacked with long run structural unemployment and no new job creation. >> it's very interesting. like that conversation we had with chrystia and lakshman and ken talking about two conmiss and people feeling the recession differently, geographically we have two economies as well. richard, hang on a second. christine romans, my colleague and host of your bottom line
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gallup finds in the midwest and south, 14% more companies are hiring than laying workers off. that is more than anywhere else in the country. but christine, the idea of packing up and moving to a job, to a place that is more prosperous than where you are, is that strategy sensible? you and i have argued about this. i think people should. you're saying maybe sometimes they can't. >> there's two pieces of conflicting advice i can't square here. one, there are places in the country doing so well. opportunities there, ann arbor, north dakota, iowa, some parts of texas. great, go in there, get a job. on the other hand, you know people are hiring people they know. the most important way to get a job right now is networking. if you don't have a network somewhere, how are you going to be the one who is going to break in. if you can square those two pieces of advice, i say, yes, move. if you're not beholden to a house 25% under water and you can move. you know the schools are good where you want to go, fine, move. but remember we know that the
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way to get a job in this economy is knowing someone who knows you or knows someone who knows you helping you get in a place a good fit for you and the company. >> back to politics. richard, many of the states with the slowest recovers and highest unemployment are swing states that could decide the election. clearly the president has motivation to dramatically improve the unemployment situation in places like that. but as we just heard in our previous conversation, there may be very little that he or any politician can actually do. although, we will for the next year hear about the fact if you vote to so-and-so they are going to improve the economic job situation in the geography. >> i don't think the president can do much. this is what washington, both sides of the aisle have to understand. as you heard from chrystia and ken and everything, it's a structural challenge. how are you going to stimulate a construction sector that is completely dead in the water.
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that was covering the sins of the economy. the credit bubble provided lots of low skilled jobs in construction. politic, i think the president -- i've written on this -- faces huge problem. those are the states turning redder. in the past he was able to take those states. but now with unemployment surging, what i've seen in looking at approval and disapproval rates and correlating that to the economy, that's where he faces his biggest challenge. he's got thetates that are blue, those knowledge economy states on the east coast, california, but it's the states struggling with not only unemployment but struggling with structural transformation from old manufacturing economy to new knowledge and service economy, boy oh, boy, that's where we see the approval and disapproval ratings really being challenged. >> richard, you do write about that. you can read what richard writes, senior editor of the atlantic, author of a great book called "the great reset"
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professor in toronto. you can see christine with me every morning and on saturdays, "your bottom line." mitt romney reemerging as the front-runner for the presidential nomination. how does president obama plan to challenge his economic record? that's next on "your $$$$$." at adt, we get financing from ge capital. but they also go beyond banking. we installed a ge fleet monitoring system. it tracks every vehicle in their fleet. it cuts fuel use.
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[ male announcer ] with 50 horsepower, dual overhead cams and fierce acceleration, the gator xuv 825i will shatter your expectations. ♪ and so no one gets left behind, check out our all-new, affordable xuv 550s at sarah palin and chris christie officially took them receives out of the republican presidential race this week. a poll of polls shows mitt romney is the current front-runner among republicans. strategist donna brazil is a cnn political contributor. do not ark, it's going to be a tough economy for president obama to run on. if the opponent end up being mitt romney, i don't know if you think that is the case, what weakness could the president point to in romney's record?
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>> there's no question the president can point out his record as governor. he was ranked 47 out of 50 states as governor. his job record was so bad he was unable in many ways to use that in his bid back in 2008. i also think that mitt romney's economic plan to get the economy moving again is a prescription for going back to the past policies that pretty much got us in the mess we're in now. what mitt romney and many republicans have gone for right now is tragically is the unemployment rate, economy stalled, but i do believe things will get better and the president will be able to campaign on his vision for the future on an economy that is, albeit not growing jobs as fast as most americans would like them to grow, the economy is showing some signs of life. we've got to do more to get things moving again like pass
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the americans jobs act. >> will, cnn be contributor, will cain and conservative, based on mitt romney's past, do you think -- i'm not talking about whether he can campaign to say he's going to turn the economy around, do you think he's got what it takes to turn the economy around. >> i think he has a better vision to turn the economy around than does economy. mitt romney's economic plan so far is a very hard thing to evaluate. it's hard to come on here and defend it as an economic policy, i see it largely as political. the reforms he says he won't enforce that's a good thing, obama care, dodd/frank financial regulations. the reforms he won't put himself out there in favor of such as tax reform are medicare reform, those are the parts concerning -- i can't give you 100% solid answer whether he could turn the economy run but i am confident he's a better choice than obama. >> as perry slips herman cain benefits. part of the businessman's
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economic plan is to do away entirely with the existing tax code and replace it with what he call the the nine nine nine plan. 9% corporate tax on corporate income, 9% on personal income and 9% sales tax. really nifty in debates, because he uses it in interviews. chief correspondent for "u.s. news and world report." rick, critics say this is another republican plan that protects the wealthiest and puts an unfair burden on the poor. you've looked into this do you agree. >> it's a populist plan. nine nine nine, sounds like a two-for one pizza special. has a nice ring to it. i don't think we should just dismiss this idea. i don't know about his numbers. herman cain says he could start out by raising the same amount of revenue the government has now while totally revamping. that's way too oversimplified. usually you hear conservatives say we'll cut income taxes and the economy will magically
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prosper. herman cain is saying this. but he's saying he's going to make up the difference with the sales tax. that's radical but there's soundness to the concept. let's lower taxes on running companies, starting companies, and working and let's raise the tax on consumption which would encourage people to save money the the principle is economically sound. >> will, you've just written on this while saying the principle may be sound, you've got a problem where this would go. >> from a conservative perspective i think nine nine nine plan is terrible. in 1937 united states enacted permanently income tax, in seven years we went from 7% to 72%. there's no way you can give the united states government a new stream of revenue, taxing power and expect it be kept at 9%. supporters say we'll have a constitutional amendment require two-thirds supermajority vote. >> doesn't make sense to put a
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percentage -- >> france has 20%, italy has 20%, why do you think we'll be at 9%. >> although canada kept its very low. donna, let me ask you this. people like herman cain. doesn't mean they will necessary vote for him for president they may just want him to be their grandfather. people like herman cain and he gives interviews where he says things like this. he takes simple ideas, the ideas ron paul has but somehow herman cain makes them sound nice. not president obama schtick to do this. does he need schtick to say here are major changes i'm going to make to make you feel like i'm turning this engine around. >> he's the common sense candidate. i don't know if he'll win but he's getting the nice guy vote at this hour. the nine nine nine plan is a recipe for disaster. for starters, we cannot raise the revenue necessary to pay for the government that we currently have let alone the government we
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might want five, 10, 15, 20 years from now. that's the first problem. the second problem, it will disproportionately hurt the poor and middle class, national sales tax 9%, the wealthiest 1% of americans will see their taxes reduced. for middle income americans seeing their wages stagn, ate, this is a prescription for more pain. i agree with one of my colleagues on the panel, it sounds like a plan to order pizza but not a recipe for an ailing economy. >> stick around. we're talking about occupy wall street next. which side are you on? do those folks even know what they are protesting. we're going to take a look at it after this.
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well, we know the major theme of occupy wall street protest is a general discontent with corporate america. the president made the point the consumer protection bureau was designed to help consumers from financial institutions and their actions. will, why won't the protesters turn their attention to lawmakers, in this case conservative and republican lawmakers who are holding back consumer financial protection
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board. >> i don't know. the protest and that bill go hand in hand, ali. it's really hard to criticizes or support occupy wall street protest because i can't define them. i don't know what they are about. i can tell you this. i feel like the tone is about a lack of responsibility. displeasure with responsibility. i don't like my student loans, credit card debt and i don't want to have to pay them. the consumer financial protection bureau would help them in that respect. that bill came out, my critique was you're here to help us with the voluntary contracts we made with credit card companies. we don't like them. can you help us out elizabeth warren? i think the consumer financial protection bureau ought to be with the wall street -- >> whether or not you agree whether you like the bill or not. >> i don't. >> they could go to massachusetts, donna brazile and help elizabeth warren run for office. we'll get to this in a second. despite the myriad of reasons, he thinks it boils down to a
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central issue. >> corporate profits are up, jobs are down. ceo pay up. jobs are down. bonuses on wall street, whoa, six figures. up. jobs down. it's time to rectify this. i think the young people and others joining them on wall street get it. they may not be totally focused but they know if isn't a country that gives them a fair shot at the american dream anymore. it's a stacked deck. >> donna, your thoughts. your thoughts on whether the left or democrats are trying to get wall street to occupy wall street into part of their movement, come opted by others, whether it makes sense or whether we should worry about whether they are not all that strategic. >> you know, i think conservatives can look at this movement and say, you know what, they are trying to hold everyone accountable for the mess that we're in. liberals can look at it and say,
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you know when, they are fighting to protect 99% of americans who feel like they haven't gotten a break. 1% of americans seem to have gotten a pass. the way i like to look at them, it's organic, bottom up movement. they are not affiliated with democratic party, the republican party, tea party or anyone else. they are frustrated. they are angry. the misery index has gone up. yet they want some results. they are also aiming their ire not just at wall street, three years after the collapse of lehman brothers, they are also aiming some of their fire against washington, d.c. for not working on behalf of average americans. they think politicians are beholden to corporate donors and not beholden to average ordinary americans working hard each and every day to make ends meet. >> so i talked about consumer finance for protection board. talked about elizabeth warren. you mentioned that. rick, you have written and i love reading what you wrote, i
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don't know why going out of the way to find a focus for this group. they can find it for themselves. you have written there's specific economic problems america should be protesting and actually written about solutions to them, five of them. >> i think these protesters represent something fundamental that's going on in america. people know that something is wrong. they feel they are falling behind. data shows people falling behind. the questi is what do we do about it. the answers are not simple. what's really happening as incomes falling for typical family, crystal clear. income worse, that's true. data shows haves have more and have nots have less. a dysfunctional situation in washington. nobody doing a thing about these problems. the way we get out of this, we make the economy grow by more than people -- the economists say it's likely to grow in the future. we innovate. we come up with new ideas, the kind of stuff steve jobs did terrifically and many people do
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well, too. we're getting no leadership on this right now. this is all stoking what we're seeing down on wall street and it's spreading to other cities. >> we're going to bring herman cain back into this discussion for a second. when asked about occupy wall street this week, he told "the wall street journal" the protesters should not necessarily blame wall street or the banks. he said, and i quote, if you don't have a job and you're not rich, blame yourself. rich, as our resident conservative. >> is there truth to this, by the way, ali, yes, there is. if you want an answer to why herman cain is rising in the polls, you just gave it. i have substantive problems with his nine nine nine plan. i have a lot of problems with herman cain. >> you like his straight talk. you like the fact he says people can pull themselves up by their bootstraps and pull themselves out of the situation. >> core beliefs of conservative values and herman cain gave voice to it very well right there. >> donna brazile, i have to say, in following the tea party and
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how it grew out of a grassroots movement, albeit with make money and support, i don't recall a tea party protester ever arrested or sleeping in the rain. >> well, these individuals are motivated. look, there are a lot of americans right now who are looking for work. they lost their jobs through no fault of their own. their company decided to move overseas where they could get cheaper labor. their factory closed down because sales were down. there are many americans, our fellow citizens, our neighbors, our family members of they want to work. let's stop making excuses why we can't get this economy moving and find them jobs. i applaud those who are out there exercising their first amendment. i applauded tea party republicans when they went out there and exercised their first amendment. this is america. we should allow people to protest peacefully and to try to get government and corporate america and others to listen to them. >> i think we agree on that,
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donna. thank you so much for being can with us. donna brazile political contributor. rick neuman, chief business correspondent with "u.s. news and world report." we're on a mission, find the driver to turn this whole economic mess around. our 4 new rich & hearty soups really have people talking...
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it's heart-healthier than butter. with omega-3s. 64% less saturated fat. and clinically proven to help support healthy cholesterol. ♪ put a little love in your heart ♪ some days the market goes way up, some days way down. you can thank economic data all over the place and a looming debt crisis in europe for that. look at this chart of the dow in the third quarter. the third three months of this year. it's an absolute whip saw over the past three months of the dow, s&p 500 and nasdaq each lost more than 12% during the period making it the worst quarter since the 2008 financial crisis. investigators are worried we could be headed for another bear market. stephen is capital of lieb capital management author of a new book.
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my colleague christine romans back as well. stephen, this vol tift is starting to look like the new normal. what needs to happen to get this market moving again? >> ali, i think we need a polic. you listen to the budget debates we continue to have. the word growth is not mentioned ever. i can't help it, but i have to contrast it with china. china is spending half a trillion dollars a year and will send many trillion dollars, about what we spend on world war twosh two, on new industries. we need to create new industries. >> when you say new industry like the solar industry in the united states? >> we put half a billion dollars into na and got into a lot of trouble for it. >> take another solar company, evergreen, traded at $100 share was the bellwether company in 2008. i was bankrupt today.
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that's because china is funding their solar companies to the tune of massive amounts of money. much, much more than we're willing to. now china controlling the solar industry. they basically do. with their monopoly on rare earth, they can control the wind industry, too. >> their investments have been targeted and consistent in part because there's not a bury rock see. 12k3w4r >> they don't have to call the ceo before congress and testify. >> you're right. our investments have been haphazard, right? >> totally haphazard. >> not consistent, and there's no national strategy for how to compete, when other countries have national strategies. in the solindrid case, you're right. this is our strategy to loan monies to companies, china had already done it for too long ahead of us and already had the advantage. >> just one quick point. we can do it. we did it during world war ii. we were willing to come together, industries,
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government, et cetera, and if you look at debt as a percent of gdp, at the end of the second world war, much higher than it is today. we had set the stage for a generation of growth. if we're willing to spend correctly, we can. the only way we're going to do it, someone has to wake up and say, we're not shooting at china, but we're fighting a war for our role in the 21st century. >> will cain has left. he's left. we lost him. i'm going to represent his view. will will say despite what steven says, why should our government, as opposed to simply private industry, be in the business of deciding what's going to succeed and what the future is going to be? steven's response would be because china is doing it. >> we're at war with them, defacto. >> you think we're at war with china? >> absolutely. this is a war for our survival and way of life, in my opinion. there's no guns fired, but the same consequences. losing this war will be at least
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as bad as losing world war ii. >> china in an area in an area they want to compete, you named solar and rare earth. >> wind, rare earth, et cetera. >> they develop these industries and subsidize and buy other countries around the world and shut them down. >> they have five-year plans part of ten-year plans part of 50-year plan. that's the way the chinese government operates. they're in the third five-year plan of the current longer term strategy. the u.s. thinks in election cycles. it's the difference between a command and control economy and a democracy. we prefer democracy, right. >> i do. >> you have to have a democracy looking at what's happening around the world and responding in kind. i feel as though we have been caught off guard by the rise of china. its u.s. and multi-nationals that set the rules for globalization. now we're like, oh, wait, other people get the benefits of globalization at a time when the u.s. has stagnated.
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that's an uncomfortable place to be. >> philosophical conversation but it leads to we do need a strategy. we're out of time. thanks, guys. steven lieb, the author of a brand-new fantastic book a must read, it's called "red alert." coming up next, what the united states could and should learn from the life of steve jobs. my xyz is next. sey, kasey! kasey, what about the new edge drew you to it? the look of it. i love the sleek design. i like the rounded edges. what does the technology in your edge make you think of ford? it just makes me think that ford is in it to win it. ford is trng to get to the next level. you really have to make yourself stand out, and i think ford has done that. looking over there, how does your car look? is this my car? (laugh) (laugh) it's pro-cool technology releases armies of snowmen masseuse who cuddle up with your soreness and give out polar bear hugs.
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time for the xyz of it. we know we need serious inspiration. the passing of steve jobs gave us a little bit of that this week as we looked back on his legacy. there's no question his vision changed the world. comparisons to thomas edison, walt disney and henry ford are not overblown. this is a guy who turned a geeky hobby into a technological revolution, creating things we never knew we needed and making them indispensable extensions of
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our lives. steve jobs was a concrete example of what true innovation looks like. jobs and apple didn't just create cool products. he changed the way a business of run. he was the ceo who knew what you wanted before you knew what you wanted. when was the last time you remember the passing of a ceo that generated so much emotional response from people who had never met the man? steve jobs started apple in his garage with one other guy and very little money. his partner from those days says rather than hampering them, those financial constraints pushed the bounds of their creativity and drive causing them to make smart decisions that would turn their little computer-making operation into the apple empire. it's a lesson that should resonate with the current generation of would-be inonova r innovators especially in this lousy economy. you don't need loads of cash to come up with a new idea, start a
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company and build something the world has never seen before. if you're onto something, the money will come. in the replay of a speech you've read or seen in the last few days, jobs warns stanford graduates, quote, your time is limited so don't waste it living someone else's life, don't be trapped with dogma living with the results of other people's thinking. don't let the noise of other opinions drown out your own inner voice, and most important, have the courage to follow your heart and intuition. they somehow already know what you truly want to become. everything else is secondary. i want to end with the last line of that speech, one that brings a smile to my face for its simplicity and death, stay hungry, stay foolish. that's it for me. we're here every saturday and sunday. check out my new book with christine romans, how to speak


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