tv Your Money CNN April 28, 2012 1:00pm-2:00pm EDT
$$$$$." i want to take you beyond the politics and show you the facts. these are the jobs lost and gained during obama's term. an economy in free fall. beginning with the president's first full month unoffice, february 2009, the economy lost 4.3 million jobs in the first 13 months of his presidency. employment sputtered for much of 2010. but beginning in october of that year america began to gain jobs, a painfully slow but steady job recovery has taken hold for the last 18 months. here is the key if you want to bring it back to politics. if the economy adds just over 100,000 jobs per month between now and the election, america will have gained back every single job lost during the obama presidency. mort zuckerman head of "u.s. news and world report." he's also an extremely wealthy and successful democratic
businessman and he wrote this week president obama's economic programs have failed. mort, the economy is on pace, as you saw, to get back every job lost under president obama about a recession he didn't start. why? why are you saying it's failed? >> let me put it this way. in the first place those numbers are slightly misleading, we need 125 to 150,000 jobs to take into account. i'm not finished. not debating, just facts. compare this to any previous recession, 1970s, 1980s at this point the economy was growing between 6 and 8%. the largest stimulus program both in terms of monetary policy and fiscal policy we are having the slowest job growth. if this is a recovery we need a recovery from the recovery. >> mort -- >> i'm not comparing us to india, i'm just talking about
the policies these administration has put into effect. the stimulus program they put in, which was $800 billion was badly directed and badly formed and almost every economist will tell you that. that's number one. number two, the health care program cost according to studies by both university of california and university of chicago. somewhere between 2 to 2.5 million. these are part time rather than full time jobs. >> let me ask you this. point taken on everything you said. you know your stuff. you've done your research. would somebody else have done a better job? if john mccain were president -- >> i doubt it. as you know i supported him. >> you're blaming him for something. >> i do think he went in with the wrong programs. i think he made a huge mistake with the health care, people wanted health care cost under
control and he focused on coverage which blew out medicare and medicate difference sits longer. he wasn't able to deal with differen deficits because he couldn't reach an agreement with the republicans. i'm not get into the plame game. it's up to the president and he didn't. the stimulus, a bust. much less than he should have done. finally alienated the whole business community and collapsed in terms of their view of this administration. not all of these were necessary, if i may say so. >> all right. we'll get back to that in a second. president obama is the incumbent harks a record. van jones was a special adviser to president obama focused on green jobs and innovation. van is the author of "rebuild the dream" mitt romney reached back into the clinton years and stressed it's still all about the economy. van, what does president obama have to do to point to successes in the economy in the face of those criticisms and the kind we're here from mort zuckerman,
a democrat. >> well first of all, it's interesting to me, we all are frustrated with the economy. the reality is when you talk about the stimulus package, a third of the stimulus package was tax cuts. conservatives say they are for tax cuts. a third of the stimulus was tax cuts. 95% got tax cuts under the stimulus. another third he was saving cops, teachers, firefighters from being thrown on the of work in the hundreds of thousands across america. if your kid went to kindergarten a teacher was standing there to welcome them in those years, thank president obama. >> let me interrupt you for a second. van, let me interrupt you for a second. like mort, you're making good points. the president seems to struggle getting that message out there. is that going to change in the course of the next few months? that's the kind of stuff he's going to have to have people remember about teachers and about firefighters and about how bad it could have been if the stimulus weren't in place as
unsuccessful as some people say it is. >> well, this is the most important thing i think. now he's finally -- unfortunately we have a president honest enough to be in washington, d.c. trying to solve problems, not just out there making a case for himself. had he been taking his eye off the ball trying to explain to people it would have been worse. here is what you have to understand about this president. that stimulus package was as big as it could have been. you've never had a recession like this. two wars, economic crisis, lock step opposition from the opposition. put forth ideas republicans liked. they said they wanted tax cuts. he put it in there. stopped him on that. they said they wanted individual responsibility in the health care system. he day of them that. they took him to the supreme court. you have lock step with republicans. last thing i want to say, he volunteered to be the captain of the "titanic" after it hit the iceberg and we're still floating. we're still floating.
>> van says president obama volunteered to be the captain of the "titanic." let's forget history and look at current stuff. let's look at a poll how people think things are going today. 43% think things are going well. a new cnn research poll. in february, mort, 40% thought so. in december 30% thought so. in last august, as you recall, a tough time. we were dealing with the debt debacle, very serious problems in europe. 24% thought so. are you out of step with the reality here about the way things are going. i talk to ceos every day that don't sound as negative as you do and you're a democrat. >> first place, corporate america is doing better than the economy as a whole. why? they have control over their costs. one of the ways they control their costs, a, they let go of people and, b, they aren't hiring, which is why hiring numbers are weak. >> hiring numbers have been
extremely strong. >> the weakest recovery in hiring we've had in any recovery. not even close in terms of the number of jobs -- >> if you don't like what this administration has done, what is the answer. >> if i had one thing to do, assuming i had the power to implement it, which i think is appropriate, i would revise the tax code. if you revise by eliminating special provisions dood lobbyists have been able to get for all kinds of interest groups, you would have the following, lower corporate rates and lower individual stacks rates. it would stimulate the consumer and business. that is the one thing that has to be done. >> i have a tax code in this building, 73,000 pages long. fully agree with you. republicans didn't fibs it eith -- fix it either. >> i'm not saying -- >> why is this on president obama as opposed to republicans who never fixed the tax code and democrats who never fixed the tax code. >> this country relies on the leadership in politics and economics on the president not on the congress. we all know the way congress works.
it takes presidential leadership. in 1983 ronald reagan when he was president and tip o'neill, the speaker of the house reformed social security. why? he had relationships with tip o'neill. the two of them worked together to get it done. this president has no relationship to the congress. if you go to the congress and i did, there is absolutely no relationship. the senate leader mitch mcconnell, front page story of the "new york times" had not had a private meeting with the president in 18 months. >> i'm not sure mitch mcconnell insisted on that private meeting he would have gotten it. we're partisan to the extreme in the way we would not see. >> that is part of the problem. the kind of presidential leadership we need to get out of this mess did not come from this president. a lot of people believe that. >> i disagree with that. >> i'm telling you, it's just a disappointment. >> van disagrees with you. we're going to have a little more chance to talk. mort, a pleasure to have you on the show. mort zuckerman, editor in chief
of u.s. world and report. will woman in charge of protecting your bank account during an economic crisis says it's time for the federal reserve to declare victory putting her directly at odds with fed chairman ben bernanke. >> i think it's a little premature to declare victory. time to loosen the grip and let interest rates rise coming up next.
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return on your savings and some of your nonstock investments, plus there's less chance of inflation which worries central banks. the cons, interest rate on your mortgage or other loans could go up. some banks can get discouraged from lending. sheila behr federal chairman of fdism c. she was tasked with shoring up our banks, a job she did very well. she wrote in fortune if the fed does not raise rates soon, america could be heading for another bubble. fed chairman ben bernanke was asked about this in congress and he responded. >> i think keeping interest rates low is still appropriate for our economy. as for the bond bubble, interest rates are low for a lot of reasons. they include monetary policy, of course, but include weak economy, low expectations, safe haven demands for u.s.
treasuries. of course interest rates will arise at some point. we hope they do. that would be an indication the economy is recovering. >> if interest rates rise an indication of recovering. sheila, always a pleasure. >> thank you, ali. >> the broadest measure we use, may not be as effective but the broadest measure we use back in 2008 the economy, gdp contracted 6%, 6.7, 7%, then started to grow. we got up to 3.9%, very strong. then into the 2s, 2011 dodgey year. now numbers showing the economy is grog at an annual base 2.2%. 2.2% bigger in 2012 than 2012. that's not much particularly when you compare it to other nations. your idea interest rates should
go up? a signal you think we're okay, confident in this recovery and not going to be set back again? >> i think it's a signal this has gone on long enough. there's only so much you can accomplish with the monetary poll sichlt our economy is struggling. the best way to fix that is fiscal policy, better leadership through congress to clean out exemption laden tax code, fix entitlement problems, provide certainty to business about the future trajectory of our economy will be. only so much the fed can accomplish with monetary policy and keeping rates low, near zero rates. inflationary pressures later on. we're not getting enough bang for the buck. the fed should let markets bump up a bit and not intervene if that's the direction the market wants to go. i think it could be a healthy thing for the economy.
some positive effects. could help saefrs, the mortgage market. some people are on the sidelines with all the excess inventory in housing. if they know mortgage rates are coming up they might come in to lock in low rates. >> i've maintained that position a long time. you might be worrying about home prices dropping another 5%, if your mortgage goes from 4% to 6% over the course of a 20 or 15 year mortgage. >> absolutely. >> so what is that, right now fed rates are around zero. prime rates around 3%. a 30-year fixed mortgage if you put 20% down and have good credit can be had for 4%. what's the right amount of interest? what's the kind of interest that controls inflation, allows savers to save but doesn't crush the economy. >> you need to have the market as part of the decision making on this. right now the fed is controlling everything. when i go out and speak to investor groups the first thing i hear are we going to have qe
3. so much as to what the fed is going to do as what is our broader financial situation or fiscal situation. health y to signal to congress and administration they need to get fiscal administration in order. a little bond market discipline perhaps would be helpful there. i would like to see the market have a little more say on what interest rate -- the appropriate interest rate is. clearly our fiscal situation is very troubled. it does not justify extremely low yields on treasuries. >> sheila bair always a pleasure to talk to you. now senior adviser with the pew charitable trust. coming up on "your $$$$$," how president obama's election bid may hinge more on what happens in europe than in ohio. that's next. cleaner energy, while protecting our environment. across america, these technologies protect air - by monitoring air quality and reducing emissions... ...protect water - through conservation and self-contained recycling systems...
spain's jobless rate up 24% sparking riots there this week. its debt has just been downgraded. greece, portugal, ireland above the 10% mark in terms of unemployment. meanwhile austerity measures in france haven't won president nicolas sarkozy many friends of he's facing a runoff election in one week. greek voters crushed by cutbacks also head to the ballot box on the same day may 6th and could throw their leaders out. a lot of a stake for the european economy and global economy, ultimately the u.s. economy. my co-anchor on cnn's world business today, senior european correspondent joins me from paris. jim, let's start with you. as the architect of europe's recovery plan frernlg president sarkozy has proven to be unpopular. is that why he's facing a runoff in the battle against a relatively little known socialist?
>> i think that's right, ali. the fact is he's running about 8 points behind in the public opinion polls with nine days to go before the election. economy is the big issue, no question about it. people talk about unemployment. he got more bad news. unemployment numbers up, almost touching 10%. the highest levels since 1999. that's one big concern. the other is buying power, which many citizens feel it's gone down, can't afford the things they used to afford. the economy is the big issue. >> it's a point that sheila bair just made with me that inflation is the big concern because it erodes your buying power. nina, for decades france has been a major global economy. greece has not been a major economy for about 2,000 years. why do we care so much about the situation in greece. tell us what's happening and why it worries us. >> it has been a member of the eurozone.
according to comments made by the german faction of the european bank that governs economy across the eurozone perhaps greece shouldn't be part of the economy anyway. heading to the polls on the same day, eclipsed by that because, of course, france is the major economy, the world's fifth largest. what they are going to be facing in greece, whoever gets in, not just the specter of the worst recession they have seen in recent memory, also one of the most painful one, but the specter -- a lot of people heading to the polls to punish politician that is got them into this situation in the first place. >> let's just for comparison purposes look at the major economies in the world. gdp, gross domestic product is the measure of product, up or down in a given year. these are projections this year, 2012. china expected to grow 8.2,
india 6.9, brazil 3%. united states 2.1%. same thing in canada by the way. 2.1%. the united kingdom in recession right now is maybe going to get to 0.8 of 1%. spain negative 1.8, shrinking 1.8 and greece is almost 5% smaller by the end of 2012 than it was at the beginning. nina, this becomes a discussion worldwide about whether austerity is a better policy than stimulus or whether the reality is somewhere in between. are we learning any lessons between france and greece and spain and italy. >> well economists who say you should put your eggs in the back ket of austerity politicians learning lessons of that. what we're seeing is at least 10 governments have changed over the last two years or so since the european financial crisis got going. even with some of the most fiscally prudent nations like
the netherlands seen their government collapse against back lashes of austerity. that puts it into perspective. same time what we saw countries like spain trying to push painful austerity measures and standard & poor's decides to downgrade and put with emerging markets like kazakhstan. >> the same conversation we have in the united states plays out in different ways in all these different places. jim, great to have you on the show. nina, great to spend more than just the hour a day with you on tv. remember, we've got a live special next weekend. we'll be covering greek and french elections during timeslot on "your $$$$$." student loans not only entered presidential race but also entered late night comedy. >> now is not the time to make school more expensive for our young people. [ applause ] >> oh, yea.
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soaring student loan debt as tuition grows and employment remains murky at best. the debt burden is crushing young americans from the mamt they step off campus. christine romance joins me with another look. >> interest rates federal student loans set july 1st, they agree they should be kept low, politics at the last minute about haw to make that happen. some says keeping interest rates low, that doesn't go far enough. the ball and chain of the middle class, student lone debt. an off shoot of occupy wall street wants to forgive all
student debt, $1 trillion of it, more than car loans or credit cards. >> it's a crisis. it's not going away. the current reforms president obama is proposing on the campaign trail is like putting a band-aid on a tumor. >> reporter: the theory goes this is a bailout for students that would also be an economic stimulus. money meant for loan payments would be spent in other ways. it's a far left battle cry to be sure. student loan experts say it's unrealistic. >> i don't think all loans are going to get for given. it's too expensive. there's more effective ways of stimulating the economy if that's the goal. >> reporter: you the taxpayer would pay for it. 80% of debt is backed by the federal government. experts say the focus should be limiting how much money we're borrowing in the first place. some say parents pay for a third, students pay for a third and students borrow a third. too much student debt limits your choices later. >> you're still going to be
paying back your own student loans when your children enroll in college. you won't save for their college education. you'll be less willing to borrow for their education because you'll still be up to eyebrows in debt. >> tuition, doubling interest rates and too few jobs for graduates. that's what's important here. too few jobs. not what you and i had to deal with. how are you going to start a small business, buy a home carrying this debt. that's exactly what the issue is about. who pays for those low interest rates, ali, who pays for for giving debt. that's a long shot. they are not going to forgive that. >> that unemployment is for 16 to 24 years old, 16.4%. that number is very, very different if you have a college degree. if you're 20 years old, 21 with an undergraduate degree it's a quarter of that if not lower. >> true. a big chunk of recent college graduates are underemployed or unemployed. they have never been in the labor department so they are aren't counted yet in the unemployment rate.
that's what they are talking about lack of opportunity on the front end. whose fault that is? do you want to pay for your neighbor's kids five-year anthropology degree. >> i'm fine with it's going to help society, anthropology or engineering degree may be the bigger question. let's bring van jones back, special adviser in the obama administration. will cain with a slightly conservative philosophical bent. gentlemen, good to have you in the conversation. one, as christine said, the issue of loan forgiveness. the other as congress is dealing with keeping interest rates on federal subsidized student loans lo next year at a price tag of $6 billion. then bottom line can we afford either of these proposals. democrats say we should take money from big oil subsidies.
others say a special health care fund. what do you think? >> i think it's good the young people started this conversation. saying what's going to happen to us, doubling the rate. every kid staring down the barrel of 6.8% interest on stafford loans. they start yelling and screaming, the president listened. romney following the president's leadership, now both parties are trying to figure out how to solve the problem. that is a good thing. you can certainly keep it at 3.4% of the president isn't talking about a giveaway. he's saying everybody else is getting money at almost zero present, let the kids get it at 3.4. education wasn't about somebody's kids career it was about the country, educate a whole generation of americans so we can be the greatest in the world. in california it was free. it created huge advantages for our country. now it's about somebody else's
kid. that's the wrong way to look at it. >> somebody else's unemployment check, a country of somebody else. >> when you make it that hard for the kids to get educated, it's not bad for the kids but the country. we need to start with recommitting this generation of americans. >> as christine alluded to, a valid discussion to be had whether we should be subsidizing kids studying everything they want or what the country needs. that's a discussion for another time. let's hear what nancy pelosi had to say about the republican idea. >> it's like they rub two stones together and they are playing with fire and they ought not to do it. this prevention saves lives, saves money, and there are certainly plenty other places to go in the budget. >> will cain, this is a tough discussion. it's a real decision. van makes the point people can get loans for no money at all. students are about to pay double what you pay for a mortgage.
to get an education. to van's point it isn't about somebody else's kid it's about society. >> i'm going to say either overhyped used for political purpose. between $18 and $25,000 van or somebody else if they wanted to could tell horror stories about people $200,000 in debt. the bottom line is that's not the norm. the norm is students have manageable levels of debt. let me ask you this. why is the current generation exempted from what every other generation made, pay off student loan as well, presumably others will as well -- >> demands are higher. 25 years ago you graduate with a high school diploma, get a job that puts you in middle class for life. today, not impossible. agreed? virtually impossible? >> we have a president of the united states, i would ask you and van this -- >> who has more than a high
school degree. >> says he paid off loans eight years ago. what's wrong with that story? why is this generation deprived of that success story? what's the difference? >> a lot more money. >> i'll tell you one great difference. you have virginia foxx, the most important republican. she leads the committee in congress. she says she doesn't care about these kids with big loans, screw them. she didn't say that. >> she didn't say that, van. >> i take that back. she said i don't care about them. the thing about it is, the number she picked, $80,000, exactly the number to graduate for unc chapel hill is exactly -- >> let me address that. >> if kids graduated with the manageable debt we graduated with -- >> house budget chairman ryan deficit hawk wants to attack problem the student loan debt from another angle. listen.
>> rather than have taxpayers subsidize faster tuition, let's look at why tuition is growing at a faster pace relative to anything else we buy in our society, our economy. >> is that the issue we're dealing with? maybe paul ryan have a point. >> he and van have a point. the price of the college education is rapidly rising. in fact there are only about three things in the society where inflation outpriced consumer price index. an amazing job of lowering prices from your house to the phone on the table but failed to lower for education, things your government subsidizes. >> things you need the most. >> i ask you this, coincidence? >> i suspect van, will and i won't agree. on that we agree. will thinks it's less of a problem. good to see all of you, will cain and van jones. innovation is alive in america despite what mort
zuckerman said earlier. what you get when you put some of the smartest minds in the world in the same room with entrepreneurs out there. that's next. hello bobby. do you know you could save hundreds on car insurance over the phone, online or at your local geico office? tell us bobby, what would you do with all those savings? hire a better ventriloquist. your lips are moving. geico®. fifteen minutes could save you fifteen percent or more on car insurance. ♪ [ camera clicks ] ♪ it's hard to resist the craveable nature of a nature valley sweet & salty nut bar.
engineers, developers, entrepreneurs and simply put big idea people in one location for what's called visioneering. the aim of the intense two-day series of workshops is to try to tackle some of the world's biggest problems using competitions that pay cash prizes for success. after covering the event in the past i took part in the session in los angeles as a moderator. >> come up with ideas that might be possible, might not. they might just be your dreams. >> if you can come up with a prize concept to enable that vision or breakthrough to occur. >> everyone is an equal participants even if you're the sponsor of the very first prize competition in 2004. that ushered in a new era in private space travel when it awarded $10 million to the makers of spaceship one, the first privately manned aircraft to fly in suborbital space. >> i look forward to these
visioning sessions every year. this the only place i get to meet a lot of people from different places that are not afraid to explore impossible things. >> peter, entrepreneur, doctor, author of best seller "abundance." >> we're living in an age when they are more equipped to attack problems. the newest billion dollar companies out of no place are touching hundreds of billions, started by a few guys. >> they break up into groups and come up with problems they would like to see solved. >> hydrosonic transportation that can get me from here to sidney in two hours. >> then they come up with parameters for the competition and a prize purse to make it worth it. division teams with teams of smart and wealthy people.
negro ponte headed the famed media lab and founded one laptop per child. >> it's a noisy phenomenon. you need two and a half, three ideas. >> in the end they find something to study further and an actual contest. this year's winner the idea of mobile phone technology that will boost literacy on a large scale by makingeors pass basic literacy tests to turn it on and use it on a regular basis. other concepts that made it affordable online generating system specifically for rural and poor areas using whatever is available as a fuel source. this man heads one of india's largest conglomerates which includes jaguar's land rover. >> some thoughts are audacious. they take form because you have
enough creativity, experience, reality behind what some of the people are saying that in a short period of time they are adding flesh and bones to it. it's a learning experience the likes of which i have not had and stimulating beyond all belief. >> the fact that such gathering can make ratan tata says something, heads a multinational conglomerate and heads businesses in every country. not every idea in the proposed session ends up in a competition but the sessions bring together talents across disciplines with entrepreneurs and big thinkers under one roof. you get to see how ideas germinate, businesses form and really smart solutions to life's challenges actually develop. coming up next, the man behind ford if slowing in china means recovering tough times for the automaker. in high school, i had a physics teacher
by the name of mr. davies. he made physics more than theoretical, he made it real for me. we built a guitar, we did things with electronics and mother boards. that's where the interest in engineering came from. so now, as an engineer, i have a career that speaks to that passion. thank you, mr. davies. [ man announcing ] what we created here. what we achieved here. what we learned here. and what we pioneered here. all goes here.
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its biggest quarterly profit since 1998. now, ford reported very different first quarter results but this was no surprise to wall street. ford saw a steep drop. sales slipped about 2% which ford largely blamed on a slowdown in europe and china. make no mistake ford's story and quite frankly that of the big three u.s. automakers isn't a sob story. take a look at ford stock, a far cry from november of 2008 when it bottomed at $1.01. the company was bleeding $83 million a day when the auto market collapsed. as you remember ceos at ford, chrysler and general motors went before congress calling for a federal bailout. ford didn't need the money itself but needed other automakers to survive. ford's new slogan is go further. i talked with ceo this week and asked how much further did he see his company going in 2012? >> what's amazing, ali, around
the world, the customer requirements for quality fuel efficiencies, safety and really smart design like sink in my ford have coalesced. customers want all those best in class, no matter what the size, fiesta to f-150, the neat thing about the ford brand, you walk in the showroom you get the vehicle that works for you, whether a car or truck and get it more affordably because we use global resources to deliver that for you. >> on men of these levels you've delivered. your car sales were up in the united states. retail sales were up. some fleet sales are lower because you've got capacity restraints. i'm worried that you've got a bt of an issue in the u.s., probably short-term issue, where all the cuts you made 2008, 2009 are stopping you from selling as many cars as you possibly can? >> that is exactly right, and we
made that judgment call nearly five years ago, as you well no, to size our production to the real demand with this full family and best in class vehicles. what has happened is the market this year has come back about a quarter, maybe two quarters faster than we anticipated. so we're going to be a little short the next few months, but as we bring capacity on, by the third or fourth quarter we'll have the volumes people want. >> you have the opposite problem in europe. you've not lost market share. sales down in europe but sales overall were down, but you can't idle and close factories in europe largely because of labor laws. i guess i'm interested how long you think this european problem will go on for and whether that's going to bleed into your bottom line from the cars you're selling here in the united states? >> well, with respect to the market itself, we see it stabilizing on the gdp, you know, relatively flat, but
looking like it's stabilizing. for the industry, we see robust market around 14 million units. now, in ford's case, ali, one of the neat things we have done over the last few years is that six out of the last eight years we have been profitable, because of the ford plan of matching production to the real demand and taking the necessary actions to deliver the vehicles profitably. so clearly, the slowdown is a little bit more aggressive than we've seen in the past, but as we pointed out in the first quarter we've taken decisive action to reduce our cost structure and going to be bringing in more new vehicles, more fod vehicles in the second half of the year which will help on the revenue side also. so it's a tough situation but we're taking decisive action like we did in north america earlier. >> an iphone at home, do it with me. if you don't. look at this, what it soenz the back. got to take my glasses off. the part that says designed by apple in california, that's not
the problem. the part that says, assembled in china has some people fired up. apple says, it cannot afford to build the iphone in the united states. a new report says it actually can. when we come back i want to take this apart and show you what every component inside costs. next on "your money." [ nurse ] i'm a hospice nurse. britta olsen is my patient. i spend long hours with her checking her heart rate, administering her medication, and just making her comfortable. one night britta told me about a tradition in denmark, "when a person dies," she said,
i tell you what i can spend. i do my best to make it work. i'm back on the road safely. and i saved you money on brakes. that's personal pricing. how much does an iphone cost? if you're buying one off contract, around $600 for apple's latest device. the 4s. the cost is a third, around $200. were you put thinking together. the memory, this here. toshiba, played in japan, costs about $38. 32 gigabytes cost apple about 2 $38. the cell, y phi, $29. the camera, about $18.
this the battery. costs about $5. now, when you take the battery out you have underneath the processor. this is the brains of the operation. this part right here and the associated parts. the processor alone costs about $26. here's the part you get to enjoy mostly when you've got an ipad. that is the display and case. the display and the touch screen, this part here, costs about $31. the enclosure, the pcbs, printed kreshgt boar circuit boards, about $56. look at the total operation ends up costing us. -- get that going. the total cost here is $203 for a unit that costs $600 to buy without the contract. with a contract, subsidizing the cost of the unit to you. now, why does it make sense for
ap to apple to make the product in china? when he they make it in china, assembly parts, costs $7.10 a unit. if they were to assemble this year in the united states, $165.67. here's the issue. when you sell something, you have a gross margin. a new report from the center for research ones so yo s ses socio change, each iphone takes eight hours of laber to assemble. that's that. eight hours of labor. in the united states, what eight hours of labor would cost. more than 23 times the price. gross margin is what apple makes on it. when they make it in china a gross margin per unit of 71.7%. their margin, their profit before other expenses. if they made it in the united states, this 71.7% drops down to
46.5%. now, apple isn't hurting for cash. the company took in $39.2 billion in revenue for the first three months of this year. it sold 35 million iphones. that's 16,000 iphones an hour. christine joins me. fair to say apple can afford to assemble the iphone in the united states? >> absolutely. the company at the end of the quarter was sitting on $110 billion in cash, ali, and the company had the challenge of figures out what do with all the money it was minting from making these products. looking at the difference between a gross margin of 72% and, say, 46%, that tells you if they were making the products in the united states they'd still make an awful lot of money. that's not a question, seems, for apple. apple has applized the supply chain. it's going invent those thing here's. make them overseas and the jobs, the bulk of the jobs it creates selling its products will be low-wage retail jobs, quite
frankly. the people who benefit from apple are the consumers who get a very good value, a life-changing technological piece of equipment, for a relatively low cost. right? low cost. because it's made overseas. the other whose benefit, shareholders, who get a very high-priced piece of stock and make a lot of money or investment. workers are not part of the equation, unless you are one of the relatively few brain yaks desiyaks -- brainiacs not workers getting rich at apple. and how to speak money, e-mail us or tweet us. we we'll tackle it. noon eastern this thursday, an online show responding to your questions on all things money, live. hope to see you there. have a great weekend. you're in the