tv Nightly Business Report PBS April 11, 2017 4:59pm-5:29pm PDT
>> announcer: this is "nightly business report" with tyler mathisen and sue herera. big business gathers. ceos get more facetime with the president. while small business feels left out. united's shares slide. why the airline's public relations debacle is sending investors to the exit row. and some of the world's most dangerous diseases. those stories and more tonight on "nightly business report" for tuesday, april 11th. good evening, everyone, i'm contessa brewer in tonight for sue herera. >> welcome, contesscontessa, we everyone. i'm tyler mathisen. president trump may be moderating some of his views on
the economy. he met against today with some of the nation's top big company ceos, something he's been doing just about every week since taking office. so is the president listening to his former big company peers on such topics as trade agreements, tariffs, taxes, and more? and what's he getting out of these get-togethers? here is our report from washington. >> reporter: for the 13th time in 12 weeks, president trump summoned executives to the white house today from a variety of industries, including from ibm, pepsi, the former ge chief jack welch. the forum reconvening to hold detailed discussions on tax reform, infrastructure, and the president's agenda. >> at the top of our agenda is the creation of great high paying jobs for american workers. >> reporter: the assembled ceos at this idea forum represented companies that had less than half their employees in the united states. >> i thought the emphasis was
around creating jobs and stimulating the economy. a tremendous number of interesting, innovative ideas that came out of this. and i think everyone left with the idea that it was a very productive meeting, totally unscripted and totally capable of bringing original, innovative things to the fore. >> reporter: some of the executives were looking past the problems with the health care package and the slow nature of tax reform and were optimistic about a bipartisan approach to an infrastructure deal. >> i think people want that to happy, republicans and democrats. if we can work out the front end, there's lots of money. >> reporter: critics say the talk of pro-business policies drove equity markets higher for months after the election. that momentum has stalled as trump's agenda hits legislative roadblocks. >> if you go for there as trump
has consistently done and said, i'm going to do taxes, i'm going to do health care, i'm going to get rid of dodd/frank, if that lacks credibility, you'll see lost momentum. >> reporter: that's part of the reason why ceos keep coming back to the white house to get an audience with the president and get as much certainty as possible. while the president met with big business, secretary of state rex tillerson made his way to russia. tensions are rising today after white house officials accused russia of trying to cover up that syrian chemical weapons attack, the one that spurred last week's u.s. military strike. and separately, north korea threatened a nuclear strike if provoked by the united states following the ceo gathering at the white house. blackstone's ceo said those issues are top of meant to executives.
>> the biggest risks to business generally are political risks. when i started as a younger person, that was not the issue. so you actually sit around and try and game this stuff out, and not someone just like me but it's almost the head of every company. meantime, a new survey from the national federation of independent business indicates that small company owners have turned less certain and less optimistic about what the future holds. kate rogers explains. >> reporter: for the second month in a row, small business optimistic has taken a hit. the national federation of independent businesses' monthly survey showed a slowing in march but the index is still holding at record levels, well above the historical average of 98. plans to create jobs and earnings trends show gain in this month's reading, underscoring the idea that optimism is slowly translating
into hiring and spending. but uncertainty is on the rise. the index's uncertainty level is at its second highest reading ever. partly to blame, gridlock in washington. they say this could be driven in part by government policy and lack of ability to plan that small business owners have, given the current state of affairs in dc. president trump did mention small business today when taking executive action on dodd/frank, saying the move would make it easier for small companies to borrow. >> we'll put many millions of people back to work. the banks will be able to lend again. so many people come to see me, i see them all the time, small businesses, they're unable to borrow from banks. they never had a problem five, seven, ten years ago. they had great bankers, they had great recipielationships. >> reporter: that may not be the case. 4% of owners reported their borrowing needs weren't met. more than half said they didn't need a loan at all.
i'm kate rogers. on wall street, stocks closed lower. today the blue chip dow index fell six points. nasdaq slipped by 14 points as tech stocks fell for the eighth straight session. the s&p 500 was off by three points. during the trading day, wall street's fear gauge that measures volatility hit its highest level of the year. how should investors position themselves in an increasingly volatile trading environment? joining us now to discuss is michael farr, president of farr, miller and washington. good to see you today. >> nice to be with you. >> when we talk about geopolitical concerns, what happens with north korea or syria, what's the concern for investments in the united states? >> when we have a destabilized world, business kind of stops. and we're worried about our trade relationship with china. we're worried about whether the
euro is going to fall apart. we're worried about these military conflicts around the world with north korea or syria or whatever. certainly that can stop business in places around the world. we're a globally intertwined economic fabric, of course, in 2017. so we do have to worry about what else is going on and the precious that can come to bear on our markets. >> what's going to happen, daddy? am i going to make money this year or not? >> and i think, yes, you will, or not. i think that's the right answer. look, we've seen this top call for a long time, it's just a top that won't happen. where we are right now, the trend remains intact, the market remains biased towards the upside. fear is continuing to triumph over agreed. i'm sorry, the other way around. greed is continuing to triumph over fear. people are discounting the bad news and risk.
they kind of dismissed me as saying, he's one of these old guy curmudgeons who wants to be negative. i'm not, i want to make sure i have money when this thing drops, it will drop sooner or later. you've got to know what you own and why you own it. you have to have good balance sheets. this could continue to go up. morgan stanley said credit this could go up another 30%. maybe it will, nobody will be happier than i. >> a lot of investors are wondering whether trump's agenda can be accomplished, whether deregulation happens, whether tax reform happens. if you're you don't gatrying to out, are there specific stocks or sectors that you like and are there those that you would like to stay away from? >> certainly. you have to take a look at the very expensive high fliers and say we probably ought to give them a wider berth. if the president's agenda goes forward, certainly energy stocks, we've seen the financial stocks do very well.
they've run up a lot. the banks. i think defense stocks, probably. and basic materials, if we get into a deregulated world. you could take a look, of course, at some of the candidates for more m&a and a less highly regulated world. you see more mergers and acquisitions. i like consumer staples and i like energy. i own a couple of stocks in the consumer staples space. i continue to like cvs, for instance. i like sprouts farmers market. i've mentioned that on your air, i think, before, certainly on cnbc. they've done okay. consumer staples haven't done well so far this year. >> i think i may have misunderstood you. do you think defense stocks have run up too far or do they have more room to run? >> i think they have more room to run. >> michael farr, thanks. ahead, why iceland may be
the land of opportunity for big farmer ma. pharma. >> iceland is known for pockets of geothermal activity and lava fields and volcanos and dramatic waterfalls. less well-known are its contributions to medical research, coming up. an update on the pr debacle at united airlines. shares of the company took a hit in today's session. this video footage shows a man being dragged down the aisle of his flight by security because he refused to give up his seat. originally the airline said the flight was overbooked but since has backtracked, saying the flight was not technically
overbooked. united said it needed the passenger's seat to accommodate crew members who needed to be in louisville the next day for their flights. uni united's ceo oscar munoz has issued a few apologies. at first he said the passenger was disruptive and belligerent. later he issued another statement saying no one should be mistreated this way. the incident has led many consumers to wonder what their rights are. what does owning an airline ticket really mean? how often are passengers, quote, reaccommodated, to use oscar munoz's soothing term? >> reporter: dragging someone off a plane might be rare. but involuntary boarding denials happen everyday. in 2016, 14 million people were denied boarding on all 12 major airlines, according to the
department of transportation. those are people who refused compensation offers in advance and got kicked off anyway. that's one out of every 16,000 fliers. a small percentage. but it happens to more than 100 people every day. airhealth.com says the average compensation for these passengers is about $800. compare that to the 400,000 people who voluntarily gave up their seats last year. that's almost 1200 per day. the 12 major u.s. airlines flew 86 million passengers last year. united ranked fifth in involuntary boarding denials. the airlines that were the best at avoiding the problem were hawaiian, delta and virgin america. the worst, sky west, southwest and suppreexpress jet. delta lowers the odds a passenger will be told not to board. it gives delta an opportunity to bump those asking for less money instead of wasting time in negotiations at the gate. one positive trend has emerged. compared to 15 years ago, the
percentage of people denied boarding has actually been dropping steadily. but the percentage of unvoluntarily denied boarding is increasing. for "nightly business report." will the debacle lead to change for the entire airline industry? let's get answers from the director for the center for ethics at the american college of financial services. ethically speaking, i think there's a general public consensus that united did not do the right thing here. we heard the ceo own up to that today. julia, what was the responsibility for united and what do you think will happen for the entire industry because of what we've seen happen on that flight? >> good to be with you tonight. i think that the overall issue is that what we have in this situation is where the passenger has a contract with the airlines. all airlines, that they don't really fully understand until something like that happened. whether it was a matter of it being overbooked or flight crew necessity or must-need seats as
we found out later, i think the terms of that contract are being made increasingly clear to the american consuming public. it also seems the public doesn't like those terms very much. i think what we're probably going to see is a good conversation about whether or not these terms are acceptable to the american public and whether or not the regulators should get involved. >> how does that play out? when i sign my insurance contract, there is a lot of fine print in there that i will never read and i could end up getting bitten by my fairly to read it. how much of this is a problem of the airlines not communicating what these contracts truly say and perhaps a little sort of willful laziness on the part of travelers? >> i think the majority of the responsibility lies with the airlines. again, most people don't think that this can happen to them. and what this incident did was raise enough consciousness among the american public that this can happen to you.
you think you're buying a ticket to go to florida to see your family, you may or may not be able to get there. the numbers are low, but people can easily picture themselves in this situation. like most long, detailed contracts that people don't read, that is in the interests of the companies, to not have them read them and not have them look at them too closely. but again, what we're going to see is now that the terms of the contract have been made more obvious, we're going to see some more discussions about whether that's appropriate or not. >> can that happen voluntarily, or will it take a rules change like we saw a number of years ago like we saw for airlines to say, no, we can't keep passengers on the tarmac without a bathroom, water and food? >> i hope it happens voluntarily. i think what's happening now, and we've watched this play out over the last couple of days, especially in terms of their stock price going down today, and as your reporter mentioned, a series of apologize, increasingly more contrite, from the ceo as they recognize the extent of the public's response to this, you know, i think there
will be a voluntary acceptance of the changes that will likely be imposed on them by various regulatory agencies. i think that this will be now an industry-wide problem and not just a united problem. the industry is going to have to respond to it. >> julie, thank you so much for your time. >> thank you. to iceland, a small country with a population of little more than 300,000 people. but its size is one of the things that makes the land of the vikings a gold mine for genetic research. meg terrell has the first part of her series, "modern medicine," from rake reykavic. >> reporter: what iceland is less well-known for is that it's a world had you been of genetic research. >> this happens to be a
population where there are relatively few ancestors who account for a large percentage of the current population. >> reporter: he founded decode genetics to mine the unique set of dna of his countrymen. the founder effect means that rare genetic variance, important in disease, show themselves more readily than in more diverse populations. >> we have made a large number of discoveries, dna associated with all kinds of diseases, schizophrenia, the list goes on. >> reporter: it's not just iceland's genetics that make it such a gold mine for this kind of work. the country also has pristine genealogy records. >> we have 44 kilometers of paper documents. and the oldest document is from 1185 or thereabouts. >> reporter: erica goodmanson is director of the national archives of iceland which has a
treasure trove of family records going back centuries. >> without this, we wouldn't know who we are. >> reporter: decode worked to compile a massive online database of genealogy which it called the book of icelanders. some, like goodmanson, can trace their families back to the 19th century. from that database, decode can study how people with disease are related to one another, and then mine their injecgenetics f what could have caused the illness. the collection of data is massive. inside this subzero freezer, 15 degrees below zero to be exact, are stored half a million blood samples from half the population of iceland, 160,000 people. it represents the past, present, and future of research. it's a boon for pharmaceutical
companies. ceo bob bradway says the icelandic company is helping accelerate its work. >> one of the things we know about science and the discovery of new medicine is it's hard. it's hard, it takes a long time, and it's expensive. one of the things that we find exciting about using human genetics and the clues that provides us is that we can move more quickly and have more conviction around the targets we're exploring. >> reporter: a new variant found among icelanders protects against heart attack. amgen is developing a medicine to mimic this genetic gift. from this tiny country, genetic insights that can help us all. i'm meg terrell. >> tomorrow night, meg explains how companies are capitalizing on the unique properties iceland has to offer. the word "manufacturing"
evokes images of welding and hands-on labor. think again. a technology is changing all of that, known as additive manufacturing or 3d printing. it's cutting costs and time out of the equation. morgan brennan has that story from whitehall, michigan. >> reporter: it's called additive manufacturing. but you probably already know it as 3d printing. decades in the making, this technology is on the cusp of revolutionizing the way things get made. >> for thousands of years we've been manufacturing components in a very similar way. >> reporter: don larson oversees some 3d printing applications for the company formerly known as alcoa. >> this would be made by conventional means. the advantage of 3d printing is we start with nothing and build the part out of a bed of metal powder. it really opens up the design
refle flexibility. >> repor it's the reason there are forecasts that 3d printing will grow by more than 50% each year through 2020. aerospace is iconic's biggest business. it's using this process to make plane parts for customers like airbus. using traditional methods, making a jet engine airfoil would take up to 14 weeks. using a 3d printing machine, it takes nine hours. but iconic is also printing resin pieces for r&d use for traditional manufacturing. cutting the lead time for new products from 52 weeks to 25. >> what's wonderful about iconic's commitment to digital and 3d printing is, we've been doing this for 20 years. >> reporter: mike pepper at iconic says the tech is finally becoming reality thanks in part to the digitization of factory
stores. additive manufacturing is a focus of every major industrial company right now, from boeing to ge, siemens, 3m, are all using 3d too. manufacturers are doubling down. >> they see the cost savings. the products are improving in quality and quantity. it's a matter of time. >> reporter: and that time is fast approaching. morgan brennan in whitehall, michigan. >> that is just astonishing. coming up, how one prison program is changing life on the inside. last night we told you about a program that teaches prison
inmates at san quentin computer coding skills even though there's no internet on the inside. is it just a bunch of silicon valley do gooders or does the program really change lives? jane wells follows one graduate in part two of her series. >> reporter: it's after 5:00 p.m. and kinyata is still at work at rocket space. >> my title is manager of campus services. >> reporter: he's also an ex con, who spent 19 years after drug dealing and armed robbery. the weird thing is he sometimes goes back to prison voluntarily. >> i never thought i would be saying this, but man, it feels good to be back in prison! [ laughter ] >> reporter: he's a graduate of a bold experiment started in san quentin called the last mile. created by a venture capitalist.
they teach entrepreneurship and coding to inmates to give them job skills which might reduce recidivism and save taxpayers money. the truth is that 95% of the people who are incarcerated in our facilities in the united states are coming home. so i ask, who do you want them to be? >> there is probably over 5,000 lines. >> reporter: the last mile built a fake internet inside the prison for training because no real internet is allowed. >> and those are actual metrics. >> reporter: the program costs taxpayers nothing. it's a joint venture funded by private money and sales of prison products like license plates. kinyata was one of the first graduates. he was facing 25 to life but had earned a college degree behind bars and was taking every prison program available. >> i had always had an entrepreneurial spirit. it just seemed like something perfectly suited for me, because it gave me an opportunity to guide that entrepreneurial
spirit the right way. >> reporter: at the same time, his life sentence was shortened when the three strikes law was changed. then there was that day when he finally walked out of the gates at san quentin with two things. 200 bucks, and hope. >> there's nothing i've ever felt in life that feels better than being released from prison after a life sentence. i started at rocket space as a paid intern. i was just doing a bunch of dirty work, grunt work, whatever it took. i was just game to do whatever, to be successful. and with that mindset, i've been able to work my way up in the company to a management position. today i'm the manager of campus services and i actually hire formerly incarcerated people to work at rocket space. >> the most important thing i've learned is if you treat a man as he is, he will remain as he is. if you treat a man as he can and should be, he will become as he can and should be. >> reporter: last month he spoke
to the latest class of graduates of the last mile inside san quentin. this is a tough but popular program. >> i tried three times, i applied before i was accepted into the program. >> reporter: of the 20 graduates who have left prison, all of them like kinyata have found jobs. and zero have returned. except voluntarily. for "nightly business report," jane wells, san quentin. >> tomorrow night in part three of jane's series, we'll meet the warren buffett of san quentin. i'm contessa brewer. thanks for watching. >> i'm tyler mathisen. see you tomorr.