tv Real Money With Ali Velshi Al Jazeera January 30, 2014 7:00pm-7:31pm EST
92 members of the u.s. missile force has been found in a cheating scandal. "real money" with ali velshi is next. >> another strong sign that america's economic recovery is for real. and it's the biggest sign of all. but i'll talk to a guy who sayst in the clear justiest. and could obamacare close the haves and the have notes? i'm ali velshi, and this is "real money."
>> this is "real money", and you're the most important part of the show, and you're the reach for it. connect to ali velshi or facebook.com/"real money." talk about a turnaround, investors shook off the recent gloom by the emerging markets, and sent stocks way higher today. healthy corporate earnings, and solid report on u.s. economic growth. those sent the dow jones industrial average up 110 points. s&p climbed more than a percent, that might be your 401k. and the nasdaq jumped 1.8%. tech stocks helped that out. today's gains with investors, they just experienced their first loss in a year. it was something of a baseball
statistic, and here's the big reason for today's turn around. we learned that the u.s. economy grew at a steady pace in the final days of 2014. and you see that on the right of the screen. it would have been 3.5% if not for the government shut down in october. that latest report follows the 4% increase in the prior 3-month period of september. if you prefer to look at it in 6 month chunks, that is the strongest second half since 2003. all of these measures are part of the gross domestic product. all of these, we hope grow more than the year before. as i told you before, consumer spending is responsible for it/3 of the spending, and that's what
has driven the growth in the final months of 2013. that is the fastest pace in three years, it's a sign that the job market's slow but steady recovery has given americans the chance to buy cars and appliances. exports are another reason for last year. they rose is 1.4%, driven by energy and natural gas. by the way, we import a lot less than than we used to as well. so you take all of these positive forces, and they help to counteract the declines in spending and weakness in housing if. >> two consecutive quarters of strong growth could be the exception. and not the rule. job creation should be a drag on the economy, as 2014 motors on. steve joins me now, and steve, good to see you. you look at the back of 2014, and job creation is very strong.
these are the numbers that president obama and mitt romney talked about in the election, over $2,000 a month, and something weird, only created 4,000 jobs, and now there's nothing that we can talk about. what does it mean for 2014 when we have clarity or uncertainty. does it mean that job creation, we might be out of the woods? >> determining what's going on in the labor market, there's still an average -- >> to our viewers now, this is the number of people that filed for unemployment benefits for the first time. >> that's right, they filed the first time for benefits, and that series is running around 330,000 per week on average on a trend basis. now, typically at this time of the business cycle, when you're getting the kind of growth numbers that you're seeing in the 3rd and the 4th quarter, you should have that series down in the low tubes, so we're higher than that.
and it should bring up the question, what really did happen in the third and the fourth quarter, and i think that the events coalesced at the same time and picked the economy up. and the interesting thing is, we have seen that twice before in the business cycle and each time it failed if had the your. >> we saw 74,000 jobs created. hundreds of thousands of jobs lost and hundreds of thousands created. and the net numbers. the point is this is a deny amick economy, and there are lots of signs of real strength in the economy. stock market, which is not it's own sign, but we have seen real gains in housing. what's real about this economy? you look at the gdp growth of 3%, and that's not real. >> the economy is plugging along at a trend of just under its potential, which is one quarter to 2 and a half percent. and that's no better or worse. trend gp is good, but
unfortunately, when you have a 6% unemployment gap, way is the difference been potential and current output, if you're one quarter of a potential any given quarter, it's going to take you 12 years to get out of a 6% decline or output gap environment. and that's what the economy is facing. it's not generating enough upside momentum to fill that gap and pull people on the sidelines of the labor market back to the labor market and find jobs to give them to push this economy really to where it needs to go. >> is it different today though? you go out on the streets of new york and ask ten people. if they're prosperous, low debt and making money, and they own a house or apartment or have money in the stock market, they will tell you this is one of the finest economies that they have ever been in. >> new york is the exception.
go outside of new york and go to america, go to harrisburg, pennsylvania, and go to de moines, and you'll get an assess many. they will look at an economy that's not benefiting them. new york is a global city and the capital. it attracts an enormous amount of people that spend money and produce and drive this economy, where in other parts of the country, you don't have that, and that's the problem. you're talking about the tale of two economies. >> the haves and the have notes. steve is an economist. well, microsoft may be close to naming a but boss. bloomberg is reporting that they are about to name nadella as the
ceo. the platform for remote computing, the organizations that they rely on for their i.t. needs. he would replace steve ballmer. and they are discussing replacing bill gates as chairman. the lead candidate appears tore john thompson, who spent ten years as the ceo of semantic. the anti-virus software company! e. >> if you use yahoo mail, you might want to change your password. yahoo is the second largest email service with 73 million accounts. president obama's boldest move to close the income gap may have been a landmark law. the value of your health insurance coming up, and later,
of the affordable care act. to talk about this, gary, thank you for being with us. >> hello. >> i understand that you're calculating it differently than you were. that obamacare helps people with their income. >> the purpose of the plan is to not change the income distribution. that's not the affect of it. the goal is to expand the number of people who buy the healthcare plan for the population that has health insurance. and a lot of the direct benefits of that are going to be obtained by people who have currently gotten low incomes and are paying high premiums for the insurance they can get. they don't have health insurance plans, because their employer would have to pay a financial
penalty if they did not provide coverage to their workers. so a lot of the people who find that they get health coverage and get help paying for it. are going to be in the bottom quarter of the income distribution. >> you're counting that help. >> that's right, the standard definition of income does not count with the health benefits we receive from our employer or from the government. if you exclude the value of those benefits, the bottom part of the income distribution will see some money income gains, but they will be relatively small. it won't look very big. it's only when you count the full value of those benefits, the cost to insurance companies of providing the benefits, the cost to the government at providing the insurance. when you count that value, then the gains at the bottom end look like 6% of the pre-reform
income. >> give me a sense of that 6%. what else would you have to do in society to try to adjust that income inequality? is this a major transfer of wealth. is this a big deal for pushing for income equality? >> it would be like canceling the payroll tax. everybody whose income places them in the bottom fifth of the income, it puts them in the payroll tax. no more income tax or payroll tax, it would be the same thing, but directed to the people at the bottom end of the income scale. >> as an economist, is this an effective way to do it? is the outcome good or ineffective? >> well, remember, i think the goal of the reform is to ensure that people are not left without
affordable care as an option. they can find some insurance policy that they can pay for, possibly with help from the government, or more commonly with help from their employer for insurance. that's the goal of the reform. these income distribution consequences that we're examining were looked into because we think that that is also an interesting affect. it's not the main or the best way to redistribute income, but if you want broad health coverage, it's a way to proceed and a good one. >> gary, a senior fellow of the brooks institute and an author. well, ben bernanke's last day as chairman of the federal reserve is tomorrow. he navigated us through the worst financial crisis since the
great depression. at the turned into a gladiator, with a series of bold measures to pull us back from the brink. bernanke's courage in the dark days is undenial. but also economic inequality. like any who pushes the boundaries o of convention -- >> he'll be an outstanding chairman of the federal reserve >> reporter: when ben bernanke was tapped to leave the fed, the sub-prime markets started to implode, bernanke infamously failed to stop the systemic crisis that it would trigger. >> with this broader economy and the financial markets, seems likely to be contained. >> the bad home loans caught up with wid wall street, bringing
lehman brothers to its knees, and the shock went through the financial it system. credit markets seesed. and investors and stocks plummeting. bernanke on the great depression harnessed the federal reserve to arrest the free fall, slashing interest rates to historic lows, pumping liquidity into markets. and multibillion-dollar bailouts. >> he peace he faced the biggess in generations. >> he got together with fred paulson to pass the asset relief program. action by the congress is needed to avert the situation for financial markets and the economy. >> in december of 2008, with the
economy contracting at an alarming rate, bernanke launched the most audacious experiment in history. qe pumped money into the economy by buying treasuries and mortgaging back securities from banks. >> the fed launched it with the idea of stabilizing wall street and hopefully incentivizing new lending by wall street. >> the fed set out to buy more than $1 trillion worth of bonds in the first 12 months of qe. by the middle of 2009, the nation was crawling out of recession. in december, bernanke was named time magazine's person of the year. more than $3 trillion in bonds later, the economy is steadily growing, the housing market is recovering, and the fed is winding down it's stimulus. it has had unintended
consequences. by keeping interest rates low, it will fueled record rallies in stocks, increasing the divides between the haves and the have notes. the top 1% of americans captured 90% of the income gains in the first two years of recovery. >> it was not working the way it was anticipated. it's benefiting wall street, and not having a lot of benefit to main street. >> reporter: it's now left to bernanke's successor. janet yellen, to deal with the legacy of qe. but as he hands over the keys of the biggest financial institution on the planet, bernanke has earned his place in history. >> he kept the recession from turning into the biggest depression in history. >> the u.s. public is divided in its opinion of bernanke as he
leaves office. a gallop poll said that 35% disapprove. not as bad as allen greenspan, but events have a way of putting things into perspective. janet yellen will be sworn in monday morning. coming up, the future of google glass in focus. this is the year most americans could get a taste of the of -hyped smart glasses.
>> lisa fletcher joins me now with what's on "the stream." you're talking about sex trafficking on major sports event. we hear the stories about this every year, and i have to wonder if it's fact or fiction. >> that's what we're going to try to figure out. ali. no doubt it's a concern, but is it blown out of proportion for politicians and athletes? >> don't miss it after "real money."
>> amazon delivered a 20% jump in sales during the final months of 2013, but that increase was far less than analysts had predicted. fueling high expectations when it announced last month that the amazon prime service had a record service in the third week of december. it costs 79 bucksa year to get free shipping. and they will consider raising the price by 20 to $40 because of the fuel and shipping costs. and it's all clicking for google. the company reported it's best sales in years during the final months of 2014, thanks to a 30%
rise and the number of times that people click on search ads. the profits were a little week, because the amount of time fell year over years. google's days of an $1,100 stock are numbered. the company announced the 2 for one stock split on april second. it will sell its handset business. and it will be committed to google glass. that's good news for tom emrick, who is just as committed to technology. less then a year ago, he read about a canadian's crowd sourcing campaign for a search called pebble. and now tom has stopped writing about tech to going to wearable be products. and his mission is to make sure that his and my home city is dressed for success for the wearable tech craze.
tom, good to see you, and thank you for being with us, and representing toronto. because most people these days think of something else when they think of toronto. the mayor. how did you get google glass? i understand that a handful of people in canada have it. and barely a handful of people in america have it. >> i became part of the explorer program, and it has been a wild ride. >> how do you get to be part that have. >> you're just really lucky. that's the way you get ahold of it in the north. originally, there were just ten of us, and now that has grown now that google a has started to roll out more invites. >> and this is not just a google thing, you're trying to make toronto into a wearable tech community. how much do you have? >> i own about ten devices. smart watches, and activity
trackers, and a smart sensor and this google glass. there's a lot more wearable tech out there. but 2014 is when we see a slew of devices come to the market. so this is definitely a year for wearable tech. >> for people watching, and they know what google glass is, but not how it affects your life and what you do with it. give me examples of how it affects you. >> there are things that i really love about going to the glass. you can take a picture, hands free, and i can still look at the subject matter, instead of whipping out my smart phone, i can take video, and i can take a call and a text. so there are a lot of things that your smart thing can do that have kind of now moved up here to the screen. but what i really love about google glass are some of the apps that have come out. i was playing this game, it's google's version of thinga, and
i can see things and flip them with my lands like a ninja. >> in the privacy of my own home, i'm practicing, and then maybe transit as my next go. and one of the apps is a translation app. which is help you look at a menu or a sign, and it can help you to translate french to german or portuguese in realtime. you can see the future of it. >> people who know where the bits and bands are, which years ago, you had no idea that you can be wearing. are most people going to have something like google glass? where do you see the big push in 2014? >> 2014 is still going to be the year for activity trackers and digital help for wearers. that's for sure.
we want to remain fit, we want to look good, or compete as an athlete. so 2014 is still going to be the year for fuel bands, and we're seeing a whole other new round of activity trackers like heart rate monitoring, and ear buds from lg. and new players like sony with their activity tracker as well. so i wouldn't necessarily expect people walking around with smart glasses quite yet. >> hope that you visit us again. join us from my hometown of toronto. my final thoughts tonight are about you. i started the show talking about how strong the gd report is, and i threw out number, but today, the american consumer economy can not be told without numbers. the american dream is a feeling, a state of mind, and a concept that's part of america.
monday, i'm going to dive into this topic in depth. america's middle class, rebuilding the dream. i'll be joined by former u.s. labor secretary, robert rice. bob shiller, and suzie orman. and 10 p.m. eastern here on aljazeera america. it's going to be an hour-long. that's our show today. i'm ali velshi.