tv Your Money CNN September 22, 2012 1:00pm-2:00pm EDT
we'll be showing the best ones later on today and tomorrow. so check back to see if yours actually was chosen in your leaf peeping. coming up in the "cnn newsroom" at 2:00 eastern time today, more than five years after a retired fbi agent disappeared in iran on a business trip, his wife talks to cnn about the search for her husband and the mystery involved in the case. also, using your mobile device to pay at the counter. new technology that could soon be replacing your wallet or purse. that's 3:00 eastern time. i'm fredricka whitfield. "your money" starts right now. it's the economy, stupid. so what do president obama and mitt romney say they'll do to fix it? that's the problem. they're not saying enough and with less than 50 days to go until the election, americans need specifics. i'm christine romans. this is "your money." ali velshi is away this week. but he's been warning you about the coming economic storm and you're feeling it. two-thirds of registered voters
believe economic conditions today are poor, according to the latest cnn/orc poll. and it could get worse. while the clouds brewing in asia and europe are beyond our control, the storm gathering in washington is of our own making. i'm talking about the fiscal cliff, the automatic spending cuts and tax hikes set to take effect in january. january 1st, they could push america into another recession. let's not forget jobs. 12.5 million people without them because nothing is more important to our economic recovery than job creation. you can blame whoever you want for causing the state of the economy. but today's downturn is persisting on president obama's watch. so you'd think that mitt romney could make the case for change to voters desperate for someone to fix this economy. candy crowley is cnn's chief political correspondent, the anchor of cnn's "state of the union." let me show you a clip from last week's "saturday night live" with a comedic take on the state of this economy election. >> the economy's in the tank. the job market's horrible.
our campaign has a secret weapon. >> i understand the hardships facing ordinary americans. for example, this summer, one of my horses failed to medal at the olympics. so i know hardship. >> candy, that clip aired before romney's 47% flop. what is it about mitt romney that's allowing the president to escape being dragged down by this economy? >> well, i think there are a couple of things at play and that skit is absolutely right, part of it is mitt romney himself. whether it is true or not and certainly the romney campaign will argue it is not, people look at him personally and think, he doesn't understand someone like me, he doesn't understand someone in my situation. that's always a critical question that folks ask themselves and that pollsters ask people, who best understands the needs of people like you? mitt romney doesn't do well on that. they think he's either too rich or too out of touch or doesn't understand what it's like to grow up tough.
i will tell you the other thing that's playing into this election is that that poll that you showed is really interesting because people are saying, we think things are really bad now. you think, what in the world constitutes all this support for president obama? and when you ask the question, how do you think economic conditions will be in the future, it's almost a reverse. 67% think a year from now the economy will be good. so if you look at that, it certainly helps explain as well why president obama continues to do well because people clearly think that a year from now, the economy will be good and in that case, why do you then change a horse midstream and all those cliches we use when talking about elections? >> so the president's connecting better with voters and at the same time they feel like things might get better down the road. here with me in new york is ken rogoff. and steven moore is "the wall
street journal." asked who's better to handle the economy and the latest poll finds it's president obama with a one-point lead over governor romney. you have made your chase that you're part of the 49% who want to give romney a shot to fix this economy. >> right. >> if they're so close on the economy, why isn't your guy doing better? >> first of all, i think candy nailed it. it is true that two-thirds of americans think the economy is in rotten shape right now. but if on election day, people feel like things are getting better, no question barack obama wins this race. >> do you think they are feeling that? >> it's a roller-coaster ride on this economy. it's also reflected not just in the polls that candy talked about, but the stock market's been on a tear for the last couple of weeks. but i think mitt romney basically is saying, look, i'm the candidate of the middle class, i'm the one who -- >> do you think he's been
careful not to talk about wealth and not talk about religion and personal things, so that has made it less likely for him to connect with people? >> it's a problem for mitt romney. we've known that. even in the republican primaries, he was only getting 35% or 40% of the vote in a pretty weak field. the democrats are very good at feeling your pain. remember that was the bill clinton line? and barack obama's very good at that. what mitt romney has to do in that critical debate,s can coming up in a couple of weeks is say, look, i'm not as stylish as barack obama but i've got a plan. i know how to create jobs and this guy's failed. he hasn't done that. >> there's feeling your pain and there's fixing your pain. there are a lack of specifics from both of these candidates, frankly, about what the next four years is going to look like. what do we need to hear from them that tells us they're going to fix the fiscal cliff and the spending in this country? >> it's hard to ask them to give specifics when the voters don't want to hear it. when you look at what --
>> why don't they want to hear it? because it's going to hurt? >> yeah. it's sort of, well, what has to happen to our taxes if the government's borrowing so much? they have to go up. but not mine, right, somebody else's taxes have to go up or some program i want has to change. and nobody want that is. that's why the fiscal cliff is coming up because they can't agree on what to do. of course they don't want to be specific. they want to have everyone think they're going to help them when at the end of the day, somebody has to pay. that said, there are improvements they could make, the education system, infrastructure. there are things that could be done. but there are all these vested interests that block things. as candidates, they're afraid to talk about it. >> the sayivagaries are so maddening. there's a lot i'd like to know about romney's taxes and his tax policies, quite frankly, but
vagaries, you don't get pinned on something and opposition research doesn't hammer you on something if you're too specific. >> exactly. you just put a big target on your back. obviously the more somebody knows about what you want to do, there are many people that are going to oppose that and there might not be copious amounts of people but there are always going to be people that make a lot of noise. but more than that, it gets to a pretty important question here. i don't care how many specifics these candidates give you, they can't do it by themselves. they don't make the budget. they can't p they can't pass tax reform without a congress that they can work with, and vice versa. so to me, you say, okay, here's the direction i want to go, and here's how i'm going to make this happen because the fact is, what we're stuck with here -- not stuck with, three branches of government, it's worked so far. but the fact of the matter is, they can't say what they're going to do because they don't know who they're going to be
working with and neither one of them has told us how it's going t to be different and how do you intend to work with a congress that's going to be pretty closed. >> candy, you know this. you've covered publics for a long time. this takes presidential leadership. and the fact that we haven't had a deficit deal over the last four years with trillions of dollars of deficits year after year is partly due to the failure of leadership in this white house. and let me say one thing to defend mitt romney. it is true that he hasn't been entirely specific about his tax plan. and that gets to the point that ken was making f. you start saying, i want to get rid of the mortgage deduction and the charitable deduction x that's going to be gotten rid of. but barack obama hasn't talked about anything. he wants another $100 billion stimulus plan. but what else is there? is that it? is that all we get in a second term from barack obama? i wish you all in the media would be tougher on barack obama
and say where are you crossing your ts and dotting your is. >> well, we talk about the unemployment rate and how no incumbent has ever been reelected with an unemployment rate that low. >> that's true. both candidates need to say how they intend to work with congress, not just mitt romney. clearly president obama has a record of either doing or not doing things that he needs to address, vis-a-vis, congress. but i think this is a common complaint that you hear from conservatives. the media just doesn't go after the things that president obama has done wrong. and certainly when you look at that 8%, i don't think it actually -- history's made to be broken, precedents are made to be broken. i don't know that 8% -- i think people have figured that into the their equation. i think people know when they go to vote the unemployment is going to be high. so i don't know that et changes
between now and november. >> kshg k we'll watch your show this weekend. thanks for being here. coming up, the unemployment rate is stuck above 8% in three years. the people you're paying to solve our problems are preventing it. the truth about how your politicians are hurting america's attempt at a jobs recovery next. ♪ ♪ [ male announcer ] its lightweight construction makes it nimble... ♪ its road gripping performance makes it a cadillac. introducing the all-new cadillac xts. available with advanced haldex all-wheel drive.
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on december 21st polar shifts will reverse the earth's gravitational pull and hurtle us all into space. which would render retirement planning unnecessary. but say the sun rises on december 22nd, and you still need to retire. td ameritrade's investment consultants can help you build a plan that fits your life. we'll even throw in up to $600 when you open a new account or roll over an old 401(k). so who's in control now, mayans? markets hate uncertainty. but uncertainty is even worse for economies. and it means job loss. a new report from the san francisco fed quantifies how heightened uncertainty about future economic conditions in recent years added between one
and two percentage points to the jobless rates. take a look at this chart. in 2008, the unemployment rate was 5%, considered good, even though storm clouds were gathering there. the uncertainty about the great recession led to a drop in hires, then layoffs and a pullback in investments. by 2009, unemployment jumped to 10%. right now, it's back down to 8.1%. but researchers at the san francisco fed suggest that unemployment could be as many as two points lower if not for the current uncertainty over the economic storms that could hit america's shore, especially that fiscal cliff. that fiscal cliff is the result of your political leaders playing a very dangerous game. now, speaking of games, something you probably do not know about harvard economist ken rogoff, he is an international grand master in chess, a title he earned as professional chess player in his youth. and last month, ken even played the world's top-rated grand
master, magnus carlson, to a draw here in new york. this is big news in the chess world. ken, you described to me last spring a chess maneuver called the force move. tell our viewers what that is and why washington has been reduced to a series of force moves. >> still recovering from those pictures. magnus carlson, by the way, is an incredibly talent player, maybe the best in 50 years since bobby fisher. but force move really in a chess game is when you find yourself in a position, you've backed yourself into a corner where you find there's nothing else to do. that's the way it is in the government. so they punt. there's no long-term strategic measure. >> so the fiscal cliff, what is that? what do we need to do to fix if fiscal cliff? it feels like a force move to me. >> they're waiting until there's nothing else to do but extend it for four months in some way, the status quo.
that's what's going to come out instead of really thinking about how do we fix the tax system here is really the problem, much less think of things like moving ahead with infrastructure or education so we can compete in the 21st century. so they're just frozen. this incredible gridlock and this disagreement, lack of leadership in many ways, it's a very, very bad situation for the united states. >> allowing our own congress to check our moves. >> i'm not going to play ken rogoff in chess. ken is exactly right. this is actually washington. this is the nature of our political system. they always put off the tough decisions till the last minute. a little point of optimism. this week, the house senate, democrats and republicans, had a hearing on what to do about this
tax system that ken and i have so much about that's an abomination, that's an albatross around the neck of the politicians. they said, next year, we've got to do this. and i think 2013 -- hold me to this promise -- i think next year, they do something really big on fixing the tax system. they have to deal with the amt, the estate tax, the tax cliff that's coming, all these things come to a fore in 2013. gets to the point, when will they fix it? when they're right up against the abyss? >> i think if there's a fairly decisive election result, the democrats win across the board or the republicans win across the board, yes. i'm not so sure. i'm just not so sure what they're going to do if we get stuck in the middle longer. >> what if you have an obama second term and you have an emboldened tea party congress in that says, we're not moving.
>> there is a wide gulf between these two parties in terms of what they stand for. >> is there a wide gulf in your party, too? >> no, i think the republicans are unified against raising tax rates. they want to fix the entitlements. >> some are more pragmatic about it. >> and it is true. if barack obama wins the election, he will have a voter mandate to do some of these things he's been talking about. the tax rates probably will go up if barack obama is elected because he can say, we had an election about this, i won and i can do it. >> what if mitt romney wins? >> then i think even the chances for tax reform are even higher because i think this is a top priority for the republican party. i keep going back to this, christine. we did this in 1986. that was a long time ago. but it was bipartisan and that passed. you want to talk about bipartisanship, that bill that lowered the top tax rate to 28%, passed 97-3 in the united states senate. when have we had that kind of consensus? >> we're raising taxes rather
than lowering. >> gentlemen, thank you so much. nice to see both of you. >> don't be so tough on mitt romney. you in the media are too tough -- >> i'm tough on everybody. i'd like to see tax reform in 2013. >> i have to throw in, it was a mirror call that i made a draw with magnus carlson. >> i didn't mean to embarrass you. but i love playing chess with you or trying to. it was delightful to see those pictures. thanks, guys. leaders in washington are nowhere near an agreement on the fiscal cliff. up next, what every politician does seem to agree on, the need for energy dependence. how would either president obama or a president romney get us there? that's true. ...but you still have to go to the gym. ♪ the one and only, cheerios less expensive option than a traditional lawyer? at legalzoom you get personalized services for your family and your business that's 100% guaranteed.
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foreign oil has gone down. in fact, in 2010, it was under 50% for the first time in 13 years. >> in eight years, we're going to get a north america energy independent, where we don't have to buy any oil whatsoever from the middle east or from venezuela. >> reporter: they're both right. 45% of the oil americans consume is imported, that's way down from the peak of 60% in 2005. and it's largely due to lower demand since the recession and america's new energy boom. in fact, the united states is the third largest producer of oil in the world today. and oil production has jumped 14% in the last three years alone, largely due to advances in technology. hydraulic fracturing, our fracking, can now extract oil and gas trapped deep in shale rock and deepwater drilling in the gulf of mexico is bringing even more oil to the market. but even with those advances,
america, the world's biggest consumer of crude oil, still needs more than it produces. 29% of america's imported oil comes from right next door, much of it from the rich oil sands of canada, another 19% comes from mexico and venezuela. only 14% of america's imports actually come from saudi arabia. both president obama and mitt romney want to wean america off its dependency on foreign oil. and they agree that expanding domestic oil production is crucial. but there are key differences in their approaches. >> meeting the goal of cutting our oil dependence depends la e largely on two things -- first, finding and producing more oil at home. second, reducing our overall dependence on oil with cleaner alternative fuels and greater efficiency. >> reporter: president obama wants to curb consumption. in august, his administration proposed fuel economy standards for cars that would average 54.5 miles per gallon by 2025. and he favors alternative forms of energy to replace oil.
at the same time, he has opened up new areas of drilling in the gulf of mexico and says he'll do the same in the arctic. romney says he'll move to open up the pacific and atlantic coasts to drilling, something president obama opposes. >> we're going to open up federal lands to really take advantage of those resources. and this is not just talk. >> reporter: romney's drill everywhere approach is unlikely to reap much new bounty, though. according to the congressional budget office, more than two-thirds of the country's oil and gas is currently available for drilling. america is working toward energy independence in the long run. but for the time being, it will still depend on oil imports regardless of who's in the white house next year. ali velshi, cnn, new york. >> that's a broad look at where we are right now. it's going to take a lot more than sound bites to be energy independent.
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there is a great need for repairing what's broken in this country. and it's going to take a lot of money and a lot of time. ali told you last week the american society of civil engineers gives u.s. infrastructure an overall grade of "d." roads and bridges need to be repaired. transit systems need improvement. we need new school buildings, you wa updates on our air traffic control systems. before we do that, we need to address our energy situation. the candidates have plans for making america more energy independent. but what could be more important is fixing the system that gets that energy to your house or your business or to your car. last year, the average household spent $368 a month on gas. the average electric bill was more than $110 a month.
that's up from the year before. what's behind the rise? here's what moves gas. 65% of the cost comes from crude oil. that's a volatile commodity and it's the main reason for all the price fluctuations at your local gas station. refining is 15%. tax is 12%. and distribution, marketing and retail make up for 8%. what goes into making electricity? 48% is produced by come busting coal. 22% from natural gas. 20% by nuclear power plants. 6% is hydro power. 3% is renewable sources. and only 1% comes from oil. prices are going up, most electricity is produced by coal,
almost half of our oil is coming in from different companies. our energy infrastructure is in poor condition. america is the strongest country in the world, yet energy is still a really big problem. steven, you say the big fix starts with something called the smart grid. explain. >> the smart grid will allow us to do many things. but among them, it will allow us to monitor electricity and how much we should be using. we waste a lot of electricity. we'll put meters in people's home to allow the monitoring of electricity. >> we have technological advances -- >> yes. we have the technology. the other thing, and this is more critical. when you hear these candidates speak and all these sound bites and listening to all these conventions, you never hear the word "water" mentioned. when you're talking about energy. well, energy is the second largest consumer of water. now, america is in the midst of a major drought. we need all the sources of energy we can get, even those that are not water dependent.
like solar. solar is probably one of the few energy sources that is not dependent on water. why do i bring this up? the smart grid allows you to integrate all these different sources of energy. and this is what china sees. china gets. china will spend between now and the end of this decade probably close to $2 trillion on a smart grid. they get it. and their plans are by 2020 to have 50% of the cars sold in china, like 10 million, they expect to sell 20 million, 10 million will be hybrid. and they will get their juice from the grid, their smart grid that they're putting up as you and i are talking. >> that's why it's called the smart grid. i want to bring you in, frank. if we produce more oil here and that's what so much of the conversation on the campaign trail is about, right -- if we produce more oil here, will prices stabilize?
it doesn't seem like it could be as simple as that. >> it's not as simple as that. i've led a project called planet forward where we collect the ideas and innovations going on out there in the energy space. the biggest development without any question is what's happening -- you pointed it out, on the natural gas front, the fracking. we are in a new american century here. this is entirely changing the equation. i completely agree with what was just said about the smart grid. but the other thing that's missing, really missing from what the candidates are saying and from what the country is doing is a serious national energy policy. we talk about taking in 2025, gas mileage up to 52 miles to the gallon or whatever it is. i was just in europe driving a diesel vehicle, a clean diesel car getting 45 miles to the gallon. that's pretty close. the reason? when i went to the pump, it was $7, $8 a gallon. so people drive that kind of vehicle because it's there and there's a government decision to raise those taxes to make them do it. if you go to brazil, every gas
station in brazil has a pump that pumps just alcohol or ethanol. every new car made in brazil is a flex fuel vehicle so it can drive on either one. these are big decisions made at national government levels that can drive this kind of energy equation and it's really what we lack here because we're paralyzed. >> one of the things here -- we know there's a payoff for private energy companies, right? >> yeah. >> what about the payoff for taxpayers? how will investing in energy projects improve our daily lives and how do you sell to it taxpayer who is say, wait, i don't want my money going to something that's going to benefit a big energy company? >> big oil gets away with all these tax breaks. how it sells to taxpayers is it brings your prices down. best example you can point to right now is natural gas. it's a third of what it was a few years ago f. you've been heating your gas with natural gas and the bill was $180 in the wintertime, it's $60 now and you have the stability and you have
the ability as you buy these plug-in vehicles, if you have a smart grid, because you've invested in that, to be selling back to the grid or if you've got solar panels on your roof. there are unbelievable benefits to consumers. never mind the environmental benefits and others. the energy discussion is a great discussion to have. and it comes right into every person's home or into every factory. we just need to have it with a little bit of logic for a change. >> steven? >> i agree with much of what frank says. i certainly agree with his heart. i think his heart is definitely in the right place. >> i'm glad to hear that. >> no doubt about that, frank. i really do. >> e awe all mean well. >> first of all, when it comes to fracking, we have to get real about this. we have to have a real serious researched discussion about it. it needs a lot of water. the marginal cost of fracking is extremely high. there is not one company dedicated to fracking now that
is actually cash-flow positive, has free cash flow. the biggest fraccer right now for oil is a company called continental resources. they're in north dakota. they're making a lot of money. but when you take out the money they have to put in for capital expenditures -- i know i'm getting technicalcal -- they have to borrow money every year. it requires tremendous amounts of wear. doesn't mean there's not a spot for i. there is. >> we'll have to have a more serious discussion on fracking the next time because when you talk about energy restructure, there are so many different aspects to it that are incredibly important for consumers, for companies and regulators. thank you both. coming up, education is our shelter from the coming economic storm. but is our system pitting students against unions? the strike in chicago may be over. but the battle for education reform rages on. at legalzoom you get personalized services for your family and your business
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we've warned you about the coming economic storm. clouds rolling in from europe and asia, lightning and thunder from our own government avoiding the efl inflicted wound this is our fiscal cliff. let me tell you what i think is the biggest shelter from the storm -- education. it is vital to america's economic security and to our children's hopes for a prosperous future. last week students in the third largest u.s. school district finally went back to school eight days after teachers went on strike, a deal was struck. >> in past negotiations, taxpayers paid more but our kids got less. this time, our taxpayers are paying less and our kids are getting more.
>> but are students really winning? nick kristoff is a writer for "the new york times." good to see you. >> good to see you. >> you say america's education system is transmitting inequity from one generation to the next. did we get reform in chicago? >> we're inching toward it. one of the things i think the chicago debate underscored is the degree to which the democratic party has been separating itself from teacher unions and gradually embracing the mantel of education and school reform. there's a long way to go. >> listen to the president of the teachers union after this deal was struck in chicago. >> the sort of idea of corporate efficiency that's been pushed towards schools, that's a problem for us. so it's not good for kids. i think people don't seem to understand that.
>> so, nick, in the private sector we're graded on results. but teachers say that just doesn't work in education. and one of the reasons that they often cite is because of poverty. sometimes they're in a situation where they're working in schools with high levels of poverty, so it's difficult to grade the performance of the teachers. what do you think about that? >> right. i think the teachers have a good point. the real problem for -- the biggest reason for failed schools is not bad teachers but is poverty. i think that it's also true that critics of the unions are too quick to say the problem is just unions. if you look at states that don't have strong teachers unions, mostly in the south, they tend to have weaker schools than those that do. but having said all that, even in the context of poverty, there's been pretty good evidence emerging that the teacher makes a huge difference. the best study of that came out from some harvard and columbia researchers. it showed that a bottom 1% teacher -- these are real
results from a major district in the u.s. -- a bottom 1% teacher was equivalent to having a student in a class for only 60% of the school year. which of us would want a teacher, in effect, absent for 40% of the school year for our kids? >> replacing a teacher at the bottom 5% with an average teacher means an additional $1.4 million in collective lifetime earnings for the whole class. but how do you find out who is the good teacher and who is the underperforming teacher? >> that is in a sense what the debate has moved to. i think earlier the debate was really about due teachers make a difference? now i think increasingly the unions are acknowledging teachers make a difference but they say it's difficult to identify who is and who isn't? but the truth is that a lot of teachers' colleagues are aware of that. they know that. but there's been much less of a willingness to weed out poor performers in teaching than the
other sectors. one of the big debates is about value adding. measuring where students stand at the beginning of the year and at the end of the year and looking at the margin of improvement. there are difficulties with that. but if you have three years of data, in many classes in things like elementary school, three years of data, the same teachers consistently seem to raise their students' performance the most. and some teachers consistently have their students do poorly. >> sometimes it gets so heated. you can love teachers and love the profession of teaching, which is the largest profession in the country, 3.2 million teachers, but you can also really want to know how to make sure the best teacher is in your kid's classroom. those two things can cohabitate. >> that's right. teaching needs to be better paid but with less job security. right now, it's poorly paid but if you have tenure, you have pretty good job security.
we'd be better off paying much more to attract good people into teaching and measure their performance, hold them more accountable for how they're doing. teachers and students alike would be better off in that situation. >> nick, thanks so much. coming up -- >> my family is in that middle ground where they don't make enough money to pay for my entire education because it's a ridiculous amount of money. >> i'll tell you how president obama and governor romney plan to deal with the rising cost of college. and i'll explain why congress may pose the most immediate threat to u.s. education. i don't know what shape that is .. but it's not round. so why would headphones be round? they should be shaped like this.. 'earshaped'. you know .. so they fit in your ears.
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at devry.edu/knowhow. when you lost the thing you can't believe you lost.. when what you just bought, just broke. or when you have a little trouble a long way from home... as an american express cardmember you can expect some help. but what you might not expect, is you can get all this with a prepaid card. spends like cash. feels like membership. you can't afford to go to college. but you can't afford not to. tuition is rising. so is student debt. that puts college out of reach for some families. it leaves others saddled with debts they can never pay off t those families are banking on president obama and mitt romney to help make college affordable. when jackie graduated from brown
university this year, she put off going straight to medical school. instead, she took a research job at this hospital. >> it's nice to have a paying job where i can pay back part of my student loans before going to med school and possibly adding on a lot more. >> reporter: and she had plenty of them, $100,000 worth. why? her family is middle class. her mother works in a school. her dad owns a bar. she says they're considered too wealthy to qualify for many grants but says not wealthy enough to have saved the money for the more than $50,000 a year to attend brown. >> when you're in the middle class, you are a normal suburban family but you don't make a lot of money so you can't pay for outrageous prices for tuition. >> reporter: she's not alone, student loan debt hit $1 trillion last year, even tuition for public four-year colleges rose 68% over the last decade. enter the presidential campaign with college affordability a key issue for younger voters.
>> i want to make college more affordable for every young person who has the initiative and drive to go. and make sure they're not burdened by thousands of dollars worth of debt. >> reporter: president obama has expanded pell grants and cut out the banks as middlemen for loans, allowing students to borrow directly from the government. now obamas proposes to slow tuition growth by increasing state grants. slow tuition rises. >> what i want to do is give you a great job so you can pay it back yourself. >> mitt romney's plan to help students, remove burdensome regulations and get the government out of the student loan business. romney says the flood of federal dollars just drives up tuition. molly of the american counsel on education said the recession's heavy toll on state budgets is also a factor. >> when the state reduces its support, the only other place to turn for most colleges in the
public sector is to increase tuition. >> either way, students like jackie feel left out in the cold. >> a lot of people who don't have students in college or don't have kids my age think, you're wealthy enough to go to college or you get financial aid from the government, and it's that simple, but it's not that simple. >> the biggest challenge to u.s. education doesn't come from china, by the way. it comes from congress. jackie won't be the only one left out in the cold if the u.s. falls over the fiscal cliff. that fiscal cliff is a combination of tax increases and budget cuts that will hit at the beginning of next year unless of course congress does its job and fixes it. some of the cuts to education programs would hurt at-risk students. pell grants are safe at least for next year, but most other financial aid programs face a 8.8% cut. other programs would be cut as well, that means less money to support smaller class rooms, after school programs.
programs that support research would also be scaled back. the rest of the world is moving forward. u.s. college graduate rates are among the highest in the world, but the organization for economic development said the world is catching up quickly and may surpass the u.s. the u.s. ranked 22nd out of 27 countries, and just 27% of students in the u.s. with parents who didn't graduate from high school will go on to attend college. that's worse than any other country except new zealand and canada. we're cover lg of the issues important to you this week. next week, we'll look at the candidates' positions on health care and immigration. first, an obama boom or a romney rally. how your vote may put money in your portfolio. the stocks to pick if you think your guy is going to win in november.
the writer's desktop and the coordinator's phone are working on a joke with local color. the secure cloud just received a revised intro from the strategist's tablet. and while i make my way into the venue, the candidate will be rehearsing off of his phone. [ candidate ] and thanks to every young face i see out there. [ woman ] his phone is one of his biggest supporters. [ female announcer ] with cisco at the center... working together has never worked so well. as part of a heart healthy diet. that's true. ...but you still have to go to the gym. ♪ the one and only, cheerios since ameriprise financial was founded back in 1894, they've been committed to putting clients first. helping generations through tough times. good times. never taking a bailout. there when you need them. helping millions of americans over the centuries. the strength of a global financial leader.
the broadest gauge of the stock market. we're taking a look with president reagan at first. the stock market rose by 54% in his first term and it went up by even more in the second term. the same thing happened under george h.w. bush, but take a look at president clinton, a hero to modern democrats. it nearly doubled. growth was a bit slower in his second term, just a mere 74%, and then the most recent president bush, the first and only harvard mba president. he had to deal with the burst in the bubbles, and that pushed the market down. by contrast, it's now up 96% under president obama. i have said over and over again that presidents get too much credit and too much blame for the economy. i agree with allen sloan at fortune who put these numbers together and said you should vote for the candidate you want. don't vote because you think your stocks are going to go up. that doesn't mean the president
has no effect. i want to bring in paul, an assistant managing editor at cnn money. the team put together a gallery of the sectors that will do well under president obama and the sectors that would do well under president romney. i want to start with companies that export to china. they have ramped up their rhetoric on china, and some members of the business community say that could lead to a trade war. you say this sector, companies that export to china, paul, could still do well under a president obama. why? >> i think most people believe that if president obama is re-elected, there will be a little bit more of a cooperative tone with china. he has obviously talked tough and taken actions against china because of concerns about trade, but i think most people believe he won't have as hard line a stance as a president romney might. so that could benefit companies doing business in china already like tiffany, coach, gm, and ford. >> companies that export to
china. a lot of companies import from china, so that would be some of the luxury goods and automakers. an obama win would bean that obama care is here to stay. >> with the supreme court already upholding the affordable care act, i think many people believe that if obama, president obama is re-elected, you should have hospitals benefitting from just the millions of americans that will have coverage, will be able to go as insured patients to hospitals any time they need to. that will be a big boost for many of the public and trade hospitals. >> mitt romney has vowed to overturn obama care. that would be a win for medical device companies, you say. >> right, there's a tax that medical device companies pay and there are some firms that are concerned about this. and definitely are worried this will impact their profitability going forward. so people feel that if mitt romney wins, there's a greater
chance that some if not all of the affordable care act could be overturned and that could be a plus for the medical device company. >> we know a romney administration would likely mean a less aggressive regulatory environment. that could help financial stocks. >> they have had a pretty good year already, it's not as if they're completely terrified of the prospect of president obama winning, but many banks have talked about the onerous regulations due to dodd-frank, a lot haven't kicked in yet, and there are concerns that those rules will hurt profits for large financial firms like jpmorgan chase, goldman sachs over the years to come. it's safe to say that a president romney given his wall street background, he would probably be a lot friendlier to the large banks as opposed to antagonistic which we have had at times with president obama being very strong with his words for the large wall street firms. >> fat cat ceos