tv Your Money CNN March 3, 2013 12:00pm-1:00pm PST
>> the really great innovators in the world have the ability to transcend the application of what they see. when somebody see as bouncy castle. they say look at how lightweight it is, look at how easy it is to set up. and they say, i wonder what else this could be used for. >> humanity is doing spectacularly and great things. think it is one of the best times ever to be alive. and also we have done some silly things as regards to our use of fossil fuels and the climate change and pollution. i think we really need to raise my son and his generation, we need to empower them to believe that they can in fact create a more beautiful future. it's hard to believe they won't do that. >> i guess what i meant, i
really mean is that we don't advertise very well what scientists and engineers do. i mean pretty much the job definition is one of optimism and wouldn't it be cool if. it drives everything we do around here. everyone is like wouldn't it be cool if we could make an inflatable bouncy castle walk? wouldn't it be cool if we could make solar energy cheaper than coal. that's inherently optimistic and beautiful. i think i'm imagining it more as a catch prize for the next generation. we need an awful lot of children in huxly's generation, in your generation, to grow up to think wouldn't it be cool if we did this to make the future a fabulous place to live. >> he thinks making the future fabulous is means radically changing our energy habits. he's leading a group of scientists and engineers who are inventing the technologies to make that happen.
dedicating their lives to making alternative energy the fuel of the future once and for all, wouldn't it be cool if? i'm dr. sanjay gupta, thanks for watching "the next list." washington's forced spending cuts now have the force of law. the u.s. government needs a plan to roo deuce its debt. but is this the way to do it? another deadline, another failure in washington by your elected officials. fay yur to put your prosperity above their ideology and partisan political interests, someone even said the word [ bleep ]. >> we should not have to move a third bill before the senate gets off their [ bleep ] and begins to do something. >> and by senate, he means democrats. but boss reid tossed the hot potato right back at boehner. >> i think he should understand who is sitting on their
posterior. we're doing our best to pass something. >> all of this while your financial future hangs in the balance. the forced cuts could cost $750,000 jobs. in a weak economy that's barely growing, a lot of smart people say this so-called sequester is stupid. >> besides having adverse effects on jobs and incomes, a slower recovery would lead to less economic recovery. >> republicans say democrats are fear-amongering. without reforming costly and growing entitlements like social security, medicare and medicaid, the cuts will be much bigger to some departments. >> this uses a meat cleaver approach to gut critical investments. >> but awe apparently you don't care that much. a new poll shows almost half of you aren't following this boring but important sequel to a bad
movie you've seen too many times. i get it, trust me, i'd rather be reporting on something else, too. this wasn't supposed to happen. >> this sequester is not something that i propose, something that congress has proposed. >> it happened, now what. >> you can cut less than 3% without all of these awful consequences. >> my kids could go and find $83 billion out of a $4 trillion budget. >> with the u.s. economy growing at a rate of a smidge, these sloppy, potentially dangerous cuts are a sadistic and perverse experiment that could go terribly wrong. costing america prosperity and jobs. judge if you get a kick out of this sort of drama, the u.s. government gets another chance to kick up the struggling economy when the current continuing resolution, the thing that passes for a federal budget in america expires. for what it's worth, president obama and house speaker john
boehner say they are going to try to avoid that. >> i did lay out that the house is glg to move a continuing resolution next week. to fund the government past march 27th. i'm hopeful that we won't have to deal with the threat of a government shutdown while we're dealing with the sequester at the same time. the house will act next week and i hope the senate will follow suit. >> william cohen has served as the secretary of defense in president clinton's democratic administration. as a republican, he served in both houses of congress. he heads the cohen group, a consulting group. david gergen has worked both sides of the aisle in washington, served as an adviser to nixon, ford, reagan and bill clinton. a cnn analyst and director for the public leadership at harvard business school. these two guests could probably solve the mess by themselves, with a little help from jean is
a hadi, who somehow imagimanage make sense of the hysteria in washington. let me start with you. 13% cut roughly across the defense department. there are some who say that is a silver lining. prarly some democrats who say we would never be able to negotiate those kind of cuts. >> it's a black cloud that's hanging over the defense department. i think you can make rational. responsible cuts. i think they will be made if congress can sit down and find a way to resolve it responsibly. right now the way the across-the-board cuts. you'll be exempted. the president has exempted our military. in terms of our fighting forces. so personnel have been exempted. that means the entire cut of some $45 billion in the next six months come out of what we call o & m, operation and
maintenance, showdowns and repairs. won't be able to repair aircraft. we'll have no reduction in depot maintenance and have a pro ducks in procurement that will have a major impact on our readiness, that's not the responsible way to legislate this. saying take 13% across the board it doesn't match up resources with our responsibilities. the president has articulated a structure and policy for shifting resources to the gulf and to the asia pacific region. all of these countries looking at us and saying great philosophy, great strategy, where's the money. >> david gergen, i think a lot of people agree with the second that across the board, less than presize way of doing it doesn't work. what's interesting is that republicans have suggested sledge legislation that would allow the president to decide how to apply cuts to different agencies and it seems that the president is not interested.
why would the republicans be offering that and why wouldn't the president want the authority to control those cuts. >> that's a great mystery. if there is one thing that everyone in washington does agree on, a stupid way to cut a budget. a dangerous way. it was a pentagon controller, who estimated within a year, two-thirds of army combat units will bed a inacceptable level of readiness. every governor in the country who has been having to cut has been doing it with saens of what's important, what's essential. why doesn't the president accept it? woo i are the republicans pushing it? obviously the republicans worried that there will be screams, by doing it in an across the board way, there are things that are going to happen. if we have long lines in airports, that's going to bring enormous pressure on the republicans. to, to give up and give the
president the tax increases he wants. on the other hand, if you accept the smarter way of doing this. he may lose some of this leverage. think the president has been right to try to find a better way to do this. but wrong in refusing to accept the more flexible way of cutting. >> jean, you write about four minutes about this thing. four making their way around. number one, that the world will be different today. and number two, this one is popular with conservatives. that president obama is to blame. number three, that it's not hard 20 cut $85 billion and number four, that the cuts will hurt very badly or won't matter at all. let's hone in on how easy it is to cut $85 billion, over a massive $3.5 trillion budgets. you heard hailey say my kids
could come up with those cuts. >> we're cutting over half a year's funding for the smallest part of the budget. we're doing it primarily on the discretionary side. it accounts for little more than a third of all spending and we're asking them to do it quickly. i agree with gafd that if in fact the president had more flexibility in how he makes the cuts, can they be smarter cuts but can they be that smart if you only have seven months to enact them. cutting over seven months is a short period of time to do so in a prioritized way. >> i would encourage our viewers to read the stuff that you're writing on this. there are a lot of minutes out there. jean sahadi a senior writer, david gergen and former defense secretary, david cohen. will the cuts harm america's military spear yorety. >> the times you need
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. welcome to a special "your money" from washington, d.c., i'm here, most of congress isn't. the drama gone and the budget cuts and sequester went into effect on friday. but we could all see this moment coming. 18 months ago. >> it's a white-knuckle drama played out not in days or hours, but in month after month. to understand how we got here today, rewind to the summer of 2011. we zbl we are just over two days away from the date when the united states may not be able to pay all of its bills. >> congress is divided over how to raise the debt ceiling. republicans demand some $2.5 trillion in spending cuts. >> no one wants the united states to default on our obligations. but wu won't see real economic growth without a serious plan to deal with our deficit. >> every american is being held hostage by the republican majority. >> the fight goes right up to
the deadline. but late on sunday, july 31 z, i want to announce the leaders of both parties in both chambers have reached an agreement. >> the deal has been reached in the debt ceiling debate. >> a last-minute deal to raise the debt ceiling through the 2012 presidential elections. >> agonizing and we all were up late, late last night. emails flying at midnight. >> congress agrees to about $1 trillion in cuts and the creation of a bipartisan supercommittee. its job? to find another $1.5 trillion in cuts. if the supercommittee fails, then indiscriminate across-the-board forced spending cuts would kick in in 2013. the geeky order for it in congress? the sequester. at first, there's relief in washington. >> you may have noticed that the cloud of uncertainty has been lifted. >> but the good cheer does not last long. september 2011, the super committee begins work.
>> i approach our task with a profound sense of urgency, high hopes and realistic expectations. >> the weeks drag on, bargaining is intense and in late november the supercommittee wraps up work without a deal. >> we have to keep finding a fair and balanced solution. there's the chat eng that divided us. >> a disappointed president obama urges lawmakers to do what the supercommittee could not do. >> although congress has not come to an agreement yet, nothing prevents them from coming up with an agreement in the days ahead. >> the dli for forced budget cuts seemed far away. as i warned a year and a half ago -- >> they don't come to a deal, then the automatic cuts are very happ haphazard. >> that's the past. we've got the budget to deal with.
at least the continuing resolution that substitutes for a budget ahead of us. the debt ceiling debate. we do not expect any so-called grand bargain on tax reduction. >> is there a lesson on anything that has happened so far that might guide us? >> i'm not sure there are very many good lessons, because no one has won or lost on the last round. it continues the slogging through continuing. i think if there was a silver lining yesterday, it was that both sides in effect declared a truce. through the remainder of the fiscal year until this september and that is, that they both agreed if the continuing resolution to keep the government going until september would be passed without making it an occasion to revisit the sequester. and that, that would be helpful. if they could add this one thing to that continuation, to the cr as it's called. it would be to give the president more flexibility and have him in a calmer moment sign
it. i think that that would, it is, it is irresponsible for washington to make the public pawns in a political game in washington and make them feel maximum disruption and hardships in their lives when this could be done in a wiser way. >> for our viewers who don't know about the budgeting process and the continuing resolution and the crs, i'll explain it in detail later so you understand it. bill, let me ask you about this, discretionary defense spending. you described it well earlier. faces a 13 cut over theers in seven months. the u.s. spends 4.7% of total economic output on the military. almost double the average of 2.6% across developed nations. even chuck hagel, the new defense secretary is not so much concerned about the scope of the cuts, but more about the arbitrary approach to them. listen to what he said.
>> leadership at pentagon, all of us, have two serious concerns. first, the abrupt and arbitrary cuts imposed by sequester and second, a lack of budget management flexibility. >> so david just talking about the flexibility. you mentioned that earlier. what are the ways in which we can cut the defense budget smathly. >> it's not how much you spend in defense, but how you spend it. can you spend it consistently with your policy and strategy. so looking at the defense budget, don't just look at the top line, that's coming down. where is the growth coming from? personnel to be sure. if you look at our personnel costs they're a third of the budget and you're looking at 9 growth for example of health care. when i was at the pentagon, the heat care bill was 19 billion, and it's 32 billion and growing
now. if you're looking at the costs for retirement programs on a different level, those have to be addressed. from the military, we're trying to attract the best and brig brightest, we want to give them health care. those add up to major part of the budget. then there's procurement. you procure aircraft and ships and other equipment, we are the best in the world at this we're going to start cutting back on that and try to taylor our procurement to see more of the faster force, more on drones and other i'm of technology. you're going to see a shift of that to not only the middle east, but over to the asia pacific region. you can make serious and substantial reductions if you do it in a way that's consistent with fulfilling that policy. roo right now we're just cuttin
policy is you'll be people furloughed, forces who can't train and therefore you have people in afghanistan, men and women who are over there. they may not be replaced by the people who are training because they won't be training up to that level. it's a serious miscalculation, irresponsible and there is a responsible way and the defense budget will come down it has to be done in a serious and rational way. >> david. >> can i just add to that, we've had two defense secretaries in a row, first class about bob gates and leon panetta who worked hard to already put in place, $500 billion of cuts in the pentagon budget, but they warned at the time. do not go much beyond this. and here, the congress and the white house are mindlessly imposing another 500 or more upon the defense budget. that's going to be a reduction in what is called our heart power. our capacity to project force. but there's also something as
you well know, bill cohen knows better than all of us, something called soft power. america's attractiveness and its capacity to lead because others want to follow. others want to be associated with the united states. you get a government that is dysfunctional, that's leaderless and our soft power slips away from us. and actually the secretary had said that when we're off camera thank you for making it. a pleasure to see you, david gergen, cnn soer political analyst. william cohen, the former secretary of defense and the ceo of the cohen group. the federal budget needs to go on a diet. both parties agree on that focusing on things like public broadcasting instead of focusing on the real budget fat. i may not be the first guy you go to for diet advice, but here in washington i'm one of these folks, one of the people that folks better listen to. a sensible way for washington to solve its battle of the bulging budget. [ male announcer ] now you can swipe...
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in fact won't reduce the debt. the reason is that the big entitlements, social security, medicare and medicaid, that would be the belly, take up about 43% of the budget. that's where the fat is and the budget will continue to gain weight over the next few years, the next few decades as americans get older and health care gets more expensive. but your politicians don't have the will to cut from those areas. they're pretending not to see the growing bloat in their belly that is preventing them from seeing their own feet. so they argue about things like big bird and public broadcasting. in august of 2011, republicans and democrats agreed to give themselves half a year to come up with a sensible diet plan. they failed. so they gave themselves another year. nothing happened so by law, the u.s. needs to cut off budgetary
body parts to shed $85 billion over the next seven months. i'm talking about things like cutting food inspectors and reducing hours at national parks, instead of making smart cuts, agencies are cutting off fingers and toes and knocking out teeth to lose weight. the little cuts don't add up to much, less than 3% of what the government spends, but they do affect performance. take a couple of toes off your feet and see how that works. agencies don't have a ton of flexibility. as much as there's the old saw about how the government is full of waste, sure, there is. it's still amounts to hair and toe nails when it comes to cutting the budget. programs effective are subject to the same cuts to ones that aren't. is your right hand more useful than your left hand? well that's too bad because under the sequester, we need to cut fingers off of both hands. the bottom line is it's an incredibly stupid way to lose weight. ken rogof is a harvard professor, former chief
economist at the international monetary fund. nancy cook is an economic and fiscal policy correspondent at the "national journal" and christine romans is my friend and host of your bottom line. >> there's an old saw that people think we're just talking about entitlements, medicare, medicaid and social security. but the truth is, i'm not advocating big cuts to these programs. they do need to be changed. they do need to be reformed, health care is at the top of the list. >> i think that both parties or at least members of both parties think that that's the case. it's just a question of how quickly that happens. right. so a lot of the house republicans think that that should happen in the next year. that health care costs are out of control. where as a lot of democrats think you can wait a couple of years, let the economy get back on its feet a little bit more and start to make the cuts at the end of the next decade. >> that does seem to be i think you've said many times, why wouldn't we just come up with a program that says don't cut
things now or cut them less now, cut them more later on. why have we not been able to agree on that? i guess the problem is if you say we're going to do a lot of spending now and don't worry about the budget kbenss because in ten years we'll tighten our belts, nobody believes it. there's a feeling you need to do little tightening now or put on the table what those cuts are going to be. higher ages for social security retirement. maybe means testing more for some of the old-age entitlements, put it on the table. say it's coming in ten years, but say it now and give a little credibility to what you're doing. neither side wants to take the blame. >> for some reason, businesses in the market seem to have factored in endless government inaction, we're used to seeing the situations go down to the last minute. how long is it going to be before business starts feeling the effects of these forced
budget cuts in a big way? >> it's interesting. if you look at forced budget cuts, defense contractor, already people watching the stocks of those companies closely, the overall market, the stock market measures the performance of the individual companies. the market keeps telling us the companies are going to do okay despite this. who is going to be hurt? people are going to be hurt. low income kids in schools and some of the furloughs we've been talking about. the market is telling us it has disconnected itself from washington. that washington is you know, acting like a child and they're looking just at the bottom line. they've got a lot of money sitting in the sidelines, right? these companies are doing as much as they can with the workforce they've got and many of these s&p 500 companies make 45% of their revenue from overseas. so the stock market is a proxy for overall growth in the world. not washington in action. >> okay. we're going to talk a lot more
about the stock market and how you invest in this climate in a little while. no one thought the forced spending cuts would happen. but they did. most likely your world is still the same today as it was yesterday. but washington's next completely avoidable crisis would hit you hard, no matter who you are after march 27th. i'll explain that after the break. [ man ] i've been out there most of my life. you name it...i've hooked it. but there's one... one that's always eluded me. thought i had it in the blizzard of '93. ha! never even came close.
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congress before the first monday in february. once the budget proposal proposal gets to congress, committees work to hammer out a detailed resolution. the budget resolution must be agreed to by both sides, house and senate, it sends, it puts spending caps and revenue floors in place for the year. from there various committees work together an bills that lay out exactly how much money goes to which agencies and departments. the problem is, congress has been operating on funding bills devised years ago. they're able to get around passing a new budget every year by using something called a continuing budget resolution. you heard david gergen say a cr. continuing resolution. it's basically an extension of the old appropriations bills. most recent continuing resolution is set to expire on march 27th. if congress fails to do something about it, we're looking at a full possible governments shutdown. i want to bring back my panel. ken rogoff.
you're not given to his tearics. jean said the forced budgets cuts are neither catastrophic 0 nor particularly beneficial. we're facing the upcoming budget battle. at some point does this dysfunction, the political dysfunction in washington actually hurt the economy? or not really? >> it definitely hurts the economy, it hurts it now, it hurts it right away. but it doesn't necessarily hurt it dramatically in a crisis kind of way that can really energize everyone to do something. you know it's hurting people who are vulnerable. it could be hurting our defense a a year or two from now. it's sort of a slow burn that makes it hard to feel it right away. that said, ali, i think each of the individual agencies, although they're trying very hard to minimize the effect on the public, the fact is, if people are really mad about the national parks later, they're mad about air traffic, then those agencies are going to get protected more next time. so we're sort of putting needles everywhere in the economy and seeing where it hurts.
>> nancy you're worried in addition to the budget thing, we do have another debt ceiling debate. did might work itself out. it might not. but you're worried that that is one of those things that in the crisis fashion that ken talked about, could be disastrous to the economy. >> i think there will be no risk of a government shutdown, either party has any appetite for that, what they're gearing up for is the debt ceiling fight. that will hit in jug and august, very similar to what happened in the summer of 2011, it will be like deja vu all over again. >> changes to entitlement programs. >> the last time this happened, there was a big warning that interest rates are going to spike and they didn't. they've slowly been going up. are you worried that at some point people become less tolerant of america's misbehavior? >> i think that that's true. i think that the general public is very tired of it and wall
street and just the business community is very used to washington following this predictable script. and ultimately reaching a resolution, so the problem becomes if that script is broken and we don't reach a resolution, on something like the debt ceiling. >> christine, no one thought they would let the forced spending cuts happen. they were designed to be so difficulty tasteful, we wouldn't swallow that bill. but we did. how likely do you think we are to either have the government shut down or as nancy talks about, a terrible damaging debate over the dealt ceiling again? >> i didn't think we would actually see the sequester, no one did back in august of 2011. they had the sequester so for sure they're going to figure something out, they didn't. you can't predict what washington is or isn't going to do. one important point we need to make. when we say washington, there's congress and then there's the fed. can you imagine what we'd be talking about in terms of business climate or the overall economy if you didn't have the fed pumping billions of dollars into the economy every month.
in a way the fed is sort of like the foam on the runway. and the fed is putting all of this money into the system. you know, i just wonder if -- if it weren't for the fed, if this would be much more urgent, the reaction we're seeing in the markets and whether you would see more urgency in washington from setting some budget priorities. >> good point. ken, wered former chief economist for the international monetary fund. it is lost on most people mad about government spending how much of a role the fed has had in propping up the economy. many times greater than the role of congress. >> absolutely. in propping up the market bass the interest rates are zero and people don't know where to put their money. it's cushioned things, it's kept housing going up. >> the government has had a role and it's pulling out. with or without the sequester, that's hurting.
investors do not seem too scared. but maybe they should be, ben bernanke issued this warning on tuesday. >> given the moderate underlying pace of economic growth. this additional burden on recovery is significant. moreover, besides having adverse effects on jobs and incomes, a slower recovery would lead to less actual deficit reduction in the short run for any given set of fiscal actions. christine roamens and ken rogoff are back. there's a disconnect between the markets and the real pace in the growth of the economy. am i wrong? >> no, you're right. 2012 was gangbusters for the market. 2013 off to a stronger start. $81 billion moving into the market. think of that, we're talking about $85 coming out of the budget. $8 1 billion went into the market. low interest rates, consistently strong corporate profits, a weak dollar have retail investors
diving back into the market. you have to wonder if it's based on reality. the fundamentals of the economy, they still have some cracks. the latest estimate of gdp growth was anemic in the fourth quarter. rising .1%. that is not a good performance. a personal income dropped. saw the biggest one-month drop in 20 years. but because the housing market is recovering, people might be feeling a little bit wealthier. consumers are spending more, saving less, we're nearing all-time highs for stocks, are we skating on thin ice? >> that's good question. ken. the one thing that stood out from what christine just said is the drop in personal income in february. the biggest in 20 years. kind of alarming. we did have the higher payroll taxes that came into effect with the fiscal cliff discussions. we had higher gas prices, eating into our wallets in january and february. what else might be at play there? >> well, i think people are seeing their housing wealth go up as christine said.
and the stock market has gone up. that's influencing their spending, too. there's a question of is the sustainable, can you grow just out of this. can you have it all be a consumer-led recovery. businesses are holding back. they're making a lot of money, but they're keeping it on the sidelines. >> let's take a look at the dow because we've been talking about this here's the dow's all-time high. october of 2007. 108 points to go. retail investors tend to pile into markets when they are topping off. what's your sense, i'm going to talk very specifically about investments in the next block. what's your sense of how people should think of or approach the stock markets right now? >> i'm going to put my personal finance hat on. if you're starting to decide what you're going to do with stocks when you're 108 points from the high? you're going to be chasing at the fumes of the full market. you've got to have a plan way before markets are hitting highs. you've got to be looking at
sectors, be careful about sectors that could be sensitive to washington in action. you've got to be rebalancing and positioned for your age. especially now if we're going to have one, two, three years of brinkmanship in washington, then you've got to have a strong plan here. don't you think? >> i agree with you, christine. christine, good to see you as always, ken rogoff, always a pleasure. former chief economist at the imf and professor at harvard university. i'm hoping that the whole discussion is not esso tehe i es tark. i'm going to explain to you how to protect your money and possibly make some money. just the right amount of light. so you see everything the way it's meant to be seen. maybe even a little better. visit your eyecare professional today to ask about our newest lenses,
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and every day since, two years ago, the people of bp made a commitment to the gulf. we've worked hard to keep it. bp has paid over twenty-three billion dollars to help people and businesses who were affected, and to cover cleanup costs. today, the beaches and gulf are open for everyone to enjoy -- and many areas are reporting their best tourism seasons in years. we've shared what we've learned with governments and across the industry so we can all produce energy more safely. i want you to know, there's another commitment bp takes just as seriously: our commitment to america. bp supports nearly two-hundred-fifty thousand jobs in communities across the country. we hired three thousand people just last year. bp invests more in america than in any other country. in fact, over the last five years, no other energy company has invested more in the us than bp.
there we go. not so fast. the market had a roaring 2012. 2013 has started strong. but the stock market does seem disconnected as christine said from the broader economy. games our meager personal income suffered the biggest drop in 20 years, i get tweets all the time asking me the same question -- should i buy stocks now? i've got some thoughts, but let's ask an investing pro. david chkelly is a chief global strategist at jp morgan. the fed keeping interest rates low has made stocks disproportionately interesting. since you can't money in the bank. you think the lousy gdp number we got. i thought there was an error at on the chart it almost look likes there's no growth there you think that's going to get better. and that things in this country will improve if they're not improving already. my viewers are not invested in stocks right now. should
appropriate strategy for where they are in life. i would say the overweight stocks and the underweight fixed income. the big elephant in the room is the fact that the federal reserve is sitting on interest sitting on long-term interest rates and short-term interest rates. that means you can't make good long-term money on the bond market. that is pushing toward the stock market. that's really what's allowing the stock market to move forward here. >> let's talk about that. bonds are serving to not be a great investment at the moment. the interest you get from bonds, the yield is not -- as it goes up, the value of the bonds are going down. interest elsewhere is not keeping up with inflation. your home might be more than it was last year, but that's a slow and steady way to make money if it is a way to may money at all. you call this a t.i.n.a. market. what is the t.i.n.a. market? >> there is no alternative
market. i think buying a house in the united states right now is great idea. i think that's part of a strategy. but you need to have liquid financial assets. have bonds in it but just be overweight stocks. >> you don't want to end up in a situation where you end up going in the same direction all the time. let's take a look at the dow. if you are fully invested in the dow, this is back a year. if you are fully invested in the dow or not just stocks, but the dow, should you be doing anything differently right now? >> no. if you got an appropriate amount of your wealth in stocks, you know, i think promote would be slightly overweight here, but i think you stick with it. the main thing to recognize is, yes, you know, the stock market is aligned appropriately with earnings. stock -- the price of the stock really depends on earnings and interest rates. earnings are close to record highs and interest rates are close to record lows.
that's what's putting the legs under the market. thank's one-tenth of 1%. we'll see close to 3% in the first quarter. you average both of those, it's still a disappointing economy. it isn't disappointing when it comes to earning as, which are pretty good and it's certainly not disappointing when it comes to interest rates that are so low it makes it more valuable. that's why i think people ought to be a little overweight stock. >> t.i.n.a. there is no alternative. kelly's managing director of jpmorgan strategies. coming up, you know the drill, empty your pockets, rules, wait for that very slow family in front of you. the tsa's airport security line stands in the way of you making your flight while making flight safe, so could private companies do any better?
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we have obviously diverted resources and will divert resources from other areas to make sure that the checkpoints and check baggage areas are staffed fully. but the question then becomes the longer it goes on, at what point do we then have to start cutting back? >> the transportation security administration will feel a slowed hit from the forced spending cuts that went into effect on friday. unless congress strikes a deal,
tsa chief john pistole says tsa workers will see their hours shortening in the coming weeks. to be fair, this forced austerity is no fault of the tsa. but this raises the question, if private screening could be done privately, could it be done more efficiently? he says yes. it screens passengers at the largest and busiest, stefan, good to see you. u.s. homeland security janet napolitano says in order to deal with the cuts, they'll have to put a hiring in place. the tsa's 50,000 screeners could be furloughed for up to seven days. they say safety will not be compromised but that wait times will be increased.