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Who's Getting Hit the Hardest By the Housing and Banking Financial Disasters?; Interview with Jesse Jackson; The Jobs Report is Out; 'Economic Mess' That is the Bush Administration
Aired August 3, 2008 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD LUI, CNN ANCHOR: The Justice Department says it hopes to release more information soon about the ongoing investigation into the 2001 anthrax attacks, but it's not saying anything about the death of former army scientist Bruce Ivins. Sources say Ivins killed himself after learning he was about to be indicted for that crime.
Congress has adjourned for its August recess. About a dozen house Republicans left, with this parting shot though at their Democratic colleagues shown here on YouTube. The house floor after the other members left and made speeches blasting Democrats for failing to vote on offshore oil drilling.
A triple murder suspect is facing as new accusation now. Thirty eight-year-old Scott Johnson is in custody for allegedly gunning down three swimmers at a lake in northern Wisconsin. Now a 24-year-old woman is accusing him of raping her the night before those shootings.
We'll update your top stories at the bottom of the hour. Now it's time for YOUR MONEY.
RICK SANCHEZ, CNN HOST: Welcome to YOUR MONEY where we look at how the news of the week affects your bottom line. I'm Rick Sanchez sitting in for Ali Velshi.
Guess who's getting hit hardest by the financial disaster that's hitting the banking and the housing sector? A new report says by far, by far.
Civil rights icon and Reverend Jesse Jackson is going to be joining us, making his first appearance after some controversial comments that he probably wishes that he hadn't made.
The jobs report is out. Americans lost a bunch of them. We'll tell you what you may need to know to try and get a new one.
And David Gergen joins us to talk about the economic mess that is the Bush administration at this point.
First, here we go. When it comes to your money, Senators Barack Obama and John McCain don't agree on much. One says drill, the other one says, nope. One says, keep the Bush tax cuts. One says, nope. Karen Tumulty a national political correspondent for "Time" and Stephen Moore with the "Wall Street Journal." We want their input we called. They both said, yes. Let's start with this. Karen, McCain says drill. Obama says it's a political game for big oil profits and nothing more. Who wins this argument?
KAREN TUMULTY, NATL POLITICAL CORRESPONDENT, "TIME:" You know, if you look at sort of the substance of the argument, which is drill or don't drill, increasingly, Americans are on John McCain's side. However, if you ask the question more broadly, you know which party is better on energy issues? People answer with a pretty strong margin. The Democrats. So in the end, I don't know who wins this fight. Like I said, if you look at it on the narrow issue of drilling it looks like McCain has the upper hand. When it looks like I'm siding with the oil companies or not it looks like Obama could win it.
SANCHEZ: Well you know asking the American people right now whether or not they want to drill almost seems like an unfair question. I mean, of course. They're paying $4; they are paying a $100. What are they going say?
TUMULTY: Drill in my driveway.
SANCHEZ: Wherever you have to. Hopefully my neighbor's driveway.
STEPHEN MOORE, "WALL STREET JOURNAL:" You know, Rick, your question is a good one. Who wouldn't want to drill when you're paying a $125 a barrel and $4.50 a gallon? The only people that don't want to drill seem to be the Pelosi Democrats on the hill. This is one of the few issues I think right now that Republicans have the upper hand. The economy is in lousy shape. We have the banking crises, more jobs lost.
One of the few issues the Republican have seized the offensive on, is this oil drilling and by the way this is a show called money. I bet a lot of the people watching this show are investors. I think that Obama really is running into a trap when he continues to go after companies for making profits. For share holders, profits are a good thing you don't want to invest in a company that doesn't make profits, right?
SANCHEZ: Well let's be fair about this, too. I mean look we know that the whole of drill or not drill thing is going to really resonate with people. It's easy to understand. It's one of those concrete issues. As opposed to something like this.
If we can -- if we can get index speculators to somehow control themselves, curtail them, some are saying and that is what the Democrats are trying to push for, some economists say you can bring gas prices down by something like $2 within a matter of months. That is what the Dem's are trying to push. Are they wrong, Karen and how hard is it to get that across?
TUMULTY: I think that is an issue again that is much harder to sell politically than a, are you on the side of the oil companies or not?
SANCHEZ: Well just because it's harder to sell, I mean, do we only have to do what's politically expedient in this country?
TUMULTY: Well in terms of framing a campaign message, I think it's hard to do. I think it's hard to do in the middle of the summer when all people are really worried about, sort of the immediacy of gas prices. I think the exigencies of the global market are, there's merit to the issue and then there are the, what can be sold in a political --
MOORE: You know, Karen, on this issue, I think -- obviously, it's about getting more oil. But another issue here we started talking about jobs. Another lousy jobs report came out this week. This issue about drilling, offshore drilling, Alaska, John McCain should make this a jobs issue. We could create hundreds of thousands of new jobs if we were to drill and that is a positive message right now given the loss of jobs we had last month.
SANCHEZ: If it goes down with Congress leaving for their vacations or homes, whatever it is that they do when they leave Washington. MOORE: It is good news when they leave, Rick. It is very good news.
SANCHEZ: But if they don't get anything done, I mean if they don't even get a piece of legislation that says we promise in the future that we are going to come together and try to solve America's energy needs, what's that going to look like? Is this embarrassing?
MOORE: Well Republicans have tried to make that an issue as Karen knows. I mean before they left, the Republicans tried to force a vote on this drilling. One interesting vote that they did get was they asked, would the Democrats be in favor of drilling if the prices of gasoline went to $10? They still said no.
TUMULTY: I think --
SANCHEZ: Go ahead, Karen.
TUMULTY: I think that failure to act at a time when people are feeling genuine pain is one of the reasons that Congress' approval ratings now are as low as we have ever seen them. The question, you know, again in a political season is which party are they likely to blame come November? And I think the jury is still out on this, because I don't think, even though Republicans have tried to drive this issue home, I'm not sure they're quite there yet. Maybe because of the price of gas, they can't afford to drive it home. I don't know.
MOORE: And they joke about this approval rating in Congress, is only 8 percent of Americans now approve of congressional performance, and those 8 percent are probably lying. This is a record low approval rating. But as Karen knows one of the problems of Republicans is a lot of Americans still think the Republicans run Congress.
SANCHEZ: Well, and let's not -- let's be fair. Let's not forget the Bush administration a little bit. They're not exactly come --
MOORE: Right. SANCHEZ: A shot at some of these. Hey guys you're great what a wonderful conversation. Thanks so much for being with us. We certainly appreciate it.
Coming up next on YOUR MONEY, we're going to ask David Gergen about the giant economic hold that this administration is suddenly in and its effect on McCain/Obama. And then later, the Reverend Jesse Jackson is not happy. We'll tell you why. He joins us exclusively.
SANCHEZ: Welcome back.
When George W. Bush and Dick Cheney were running for office they ran as the CEO team. Remember? It was all about fiscal responsibility, good, sound conservative policy that would benefit the economy and benefit average Americans. Now, seven years later, average Americans even the most ardent conservatives, are looking at our economic numbers and asking, what happened?
CNN's senior political analyst and former president's adviser David Gergen is joining us now. David, I guess the big thing this week were the deficit numbers that were released that some are saying may be the worst ever. Is that overcome able with the little time that there is left for the Bush legacy?
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: No. These deficits are going to be a major problem for the next president; they're going to handicap the next president in dealing with all sorts of other issues like health care reform or reform Social Security and the like. I must tell you this, Rick. I think most observers give this administration the high mark for the way it has dealt with the emergency we've had in the last few months.
The treasurer and the Fed are both well mobilized to deal with Bear Stearns. A stimulus package through the Congress. A housing package through the Congress, and they've got -- working hard on the Freddie Mac and Fannie Mae problem. In terms of dealing with the emergency side, they've done, I think, most people give them in the financial community, high marks for helping to stabilize things.
But it's the long term in which people find enormous fault and the buildup of the deficit here is a president who inherited the largest surpluses in history, and we've moved from this gigantic surpluses to the biggest emphasis we've ever had, going into next year we're looking a deficit that is going to easily hit the $500 billion mark.
SANCHEZ: I guess some people could argue to that maybe they should have been more careful before we got into this situation.
SANCHEZ: Let me ask you this. You're as much a historian as anybody we know. Is there a precedent for this? Has there ever been a presidency that had to deal almost with a perfect storm scenario where all of these factors came together to create such a bad looking picture?
GERGEN: Well, nobody would want to make this comparison, because absolutely, but sure, if you want to use, introduce the word here. Herbert Hoover. You know, faced a perfect storm. I think it's unfair to say George W. Bush is a Herbert Hoover but I think it's fair to say that George W. Bush, this administration, did not look over the horizon.
In the way it might have to anticipate what was coming. And how this storm would have built up and to deal with it in advance, and even now as they deal with the emergency, as I say, I think they're doing that well, they're not looking over the horizon to what's coming to the country in the next few years. We have bigger storms ahead than what we've been through.
SANCHEZ: So what specifically if you're John McCain or Barack Obama, do you want this job?
GERGEN: That's a darn good question, because I have to tell you, you got to be something of a massagist (ph) to want it. The next president will face the toughest challenges of any modern president. You have to go back to March of '33 when Franklin Roosevelt was inaugurated to find a time that was going to be more ominous and more dangerous for an incoming president and it's going to be, you've got huge problems to put our own house in order here at home.
Plus, you have to deal with trying to get some international agreement on energy and climate. We've just seen the round, the trade talks has collapsed, how hard it is to come to achieve international agreement with many, many different countries now at the table.
SANCHEZ: I was watching you the other day on the Discovery Channel. By they way you had a lot more hair back then, and -- when you were serving President Reagan, it was about his shooting, by the way. You were seen all over that video. I was thinking to myself, this administration that tried to be Reaganesque has not come out seeming that way. Why have they ended up being almost -- so different from Ronald Reagan's presidency?
GERGEN: Well, Reagan was a very gifted leader, and he had these enormous capacities to -- he had a contagious optimism about the future and gave people confidence. This president does not give people confidence. You were just talking about the consumer confidence surveys being so low and beyond that, they did have one similarity. They operated to a significant, both Reagan and George W. Bush, by intuition. Almost by hunch.
But it turns out that Reagan's intuition was much, much keener. His sense of what might work. Take his whole proposal for star wars. Most experts, would say as out landish, yet that proposal did a great deal to bring the Soviet Union to heal and helped end the cold war. Reagan's enormous courage in 1981-82 when he first came into office. He understood to support the Fed chairman in trying to take on inflation. You know Volker really helped ring inflation out of the system. He deserves an enormous number of medals for that. But Reagan as president saw that by doing that, we're also going to go into a recession and Reagan took a deep recession in the second year in office and unemployment went to 10 percent, he lost a lot of house and Senate seats, but he had the courage to get through it, and it broke the back of inflation. We have never had this as bad of problem until today; it's started to come back.
GERGEN: Very important. But it has got to be informative, Rick. You can't just have instinct, oh, yes, telling me this and I got on MBA from Harvard and therefore I am qualified. George W. Bush has taken the view that, I'm qualified to, I'm the decider on a lot of things he frankly has never had to think about before, and things are not surfacing well.
SANCHEZ: David Gergen, always great to have a conversation. We appreciate it, thanks so much.
Coming up, what airlines are doing to try and survive and how it might affect you? And then the Reverend Jesse Jackson is back and he's good enough to give us his first interview since some comments that he had made, and there's something that he's angry about. It's all about YOUR MONEY. Why would you want to change the channel after hearing that?
SANCHEZ: Welcome back. Look who's here. Jennifer Westhoven, she is going to be talking about some of the big, top stories this week. The report comes out, meaning we get a look at economy numbers wise. How are we doing, Jen?
JENNIFER WESTHOVEN, CNN CORRESPONDENT: Not so great.
WESTHOVEN: This is the biggest gauge of how the economy's doing. Everything that we make, products, it is everything we do. Its services. It did show some growth. That's good. Partly thanks to $90 million in stimulus checks. But this was fairly weak, 1.9 percent for the first quarter of 2008. What really unnerved economists was not the gross number, it was another tally of the end of last year.
So the final quarter, the holiday shopping season, it was negative 0.2 percent, and that is the first minus sign we have seen since the recession in 2001. So this is raising the question, are we in a recession again? Are we going into a recession and it's officially the ones in Washington who decide that. But there are plenty of Americans who look at their circumstances and say I know I'm in a recession right now.
SANCHEZ: There is a whole lot of circumventing going on when it comes to that big "r" word. Stay away from that and let's talk about airlines. A lot of people fly and they are wondering, let's be fair. These guys have to make money somehow. Because of what's going on with fuel prices. I know there is one other airline this week that said yes they're going to jack it up a little bit, too. Right?
WESTHOVEN: We are talking about Delta. They are not charging you for the first bag, but they are charging you more for the second bag. You try to bring any thing big on this vacation, you're in trouble. It is now $100 round trip extra if you check a second bag. This affects anyone from, if you're packing business equipment. If you're a mom, if you have strollers or playpens, and do not even think about bringing surf boards, $350.
SANCHEZ: How about my golf bag?
WESTHOVEN: See that depends how high and how much it weighs. So that one is hard to know, but at least can you get away with that first bag. Because you know United and American charge for the first bag now.
SANCHEZ: Who's -- who did we see, concretely, in the last -- I remember there was a Starbucks report about them getting rid of a lot of employees. Anybody else out there doing something this week?
WESTHOVEN: Well we are watching that we haven't gotten the big jobs report this week. So that is we are going to be watching in terms of the jobs count. We've lost almost half a million jobs since the beginning of the year, and the thing about Starbucks, it tells us it's not just companies like General Motors, moving into the soft part of the economy as well. Everybody's trying to cut back.
When you look at General Motors, they said they lost 15 1/2 billion dollars in the latest quarter. You wonder the problems they're having, all the car companies, leasing, and a big problem. Everybody with an SUV or truck out there right now figured when they came back up they'd just sell them, can't sell them. That's a huge charge.
SANCHEZ: Means it is a great deal for somebody else. Starbucks last week, Gm this week. Who will be next week? You'll be here I'm sure to tell us.
WESTHOVEN: Oh, it's not me.
SANCHEZ: Keep your job as best you can.
Coming up next on YOUR MONEY, my interview with Reverend Jesse Jackson. He's not happy about bailout, about new reports that show that blacks and Hispanics got the squeeze in housing and, of course, some of his own missteps. An honest conversation with an American icon when we come back.
LUI: Now in the news, an attorney for Bruce Ivins says the former army research was not involved in the 2001 anthrax attacks that killed five people. Sources tell CNN that Ivins committed suicide after learning he was about to be charged. The Justice Department says it will soon decide whether to close this investigation.
Before taking their August recess, some house Republicans took a shot at their Democratic colleagues. They stacked the gallery with tourists and blasted Democrats for not allowing a vote on offshore oil drilling.
Turkish officials say they've arrested most of the suspects in connection with last weeks deadly bombing in Istanbul. Seventeen people were killed more than 154 hurt when the twin bombs exploded in the Turkish capital.
Wildfires continue to plague the west coast with crews battling this 2,300 acre blaze in north central Washington say they're making progress. Winds that were driving the flames subsided overnight and today's forecast calls for gentle breezes.
Coming up at the top of the hour for you, "SPECIAL INVESTIGATIONS UNIT: Busted: Mortgage Meltdown." Now, back to YOUR MONEY.
SANCHEZ: Welcome back. I'm Rick Sanchez.
There is a new report out this week that says that 75 percent of middle class African-Americans and 80 percent of middle class Latinos are on shaky ground financially these days. Many in danger of dropping out of the middle class altogether and then this.
About 50 percent of African-Americans, 40 percent of Hispanics who got mortgages in 2006 received a subprime loan. Reverend Jesse Jackson is joining us now to discuss this. He's the founder and president of The Rainbow Push Coalition and good enough to be with us here. Reverend, thanks for being with us.
REVEREND JESSE JACKSON, FOUNDER AND PRESIDENT, THE RAINBOW PUSH COALITION: Yes, sir.
SANCHEZ: Here is a quote and this is from the Center for Responsible Lending. It says, black and Hispanic families have gotten a disproportionate share of subprime lending and the driving force behind the foreclosures for them. Here's another one for you. This is compiled by the United for Fair Housing Organization.
It says, "The subprime lending debacle has caused the greatest loss of wealth to people of color in modern U.S. history." What do you owe, Reverend, this disparity, if indeed does affect Hispanics and blacks more than anybody else?
JACKSON: Redlining, targeting, the same portion not loaned money in the past and redlined, once the era came in, they kind of inversed the process, they loaned money on useless conditions. A combination of banks unregulated without transparencies and unenforced lending laws aloud this to happen.
Lisa Mattican from Illinois filed a lawsuit, it's determined that Countrywide, for example, a black lady making $120,000,000 is five times more likely in a subprime than a white making the same amount of money. And making $100,000, a white making $50,000. So we see presence of targeting and steering without any protection from the law.
SANCHEZ: So you say it has really more to do with that term that we've been hearing so much about, predatory lending but you know there's also those Reverend, you've heard this argument I'm sure. Saying, look, they tried to buy more house than they really could afford. Tough. They weren't smart enough to read their contracts; they weren't smart enough to get a lawyer. Tough. I'm not going to try and make up for their mistake. You've heard that. To that what do you say?
JACKSON: Yes, number one. Many people were deceived. When you see whole clusters of neighborhoods, it was a targeted scheme top down. Not bottom up. Furthermore, Rick if your house is in foreclosure, there are seven other homes who may be licensed lose value on their homes. For example, 15,000 homes in foreclosure. The loss of $3 billion in loss of equity.
So not to point the finger, because it may be targeting blacks and browns but it does not say that. Ultimately it begins to dismiss the whole value of whole neighborhoods. What you can do then, lose your tax base. Builder pays public transportation, public health, education. In some sense, the vote on the black and brown side of town but not affects all of us. That's why the government protects all of us is very important.
SANCHEZ: Do you like this bill? This bill that Congress put together and the president signed, or do you see it as some people have said as a bailout for the big guy not the little guy?
JACKSON: It's a step in the right direction. I think in this case, big guy, and little guy, tied together.
SANCHEZ: Good point.
JACKSON: You got the save one just to save the other. If the house is on fire, it's not time to argue who says on fire? Got to rescue those in the house. I submit this to you. That the public fell asleep at the wheel. Remember, as I said, the reality, the Department of Justice fell asleep they did not enforce -- 40th anniversary of the Fair Housing Act and the enforce of these laws that start this but not enforced.
SANCHEZ: When you said, everyone's heard, I'm sure to some extent it is water under the bridge. The words that you used when you were talking about Barack Obama. Is this the kind of thing that you were frustrated about with him? Forgetting the words for just a moment, the level of frustration that you had with him, is he not articulating this message enough?
JACKSON: Well, the fact is, he is. When he was a state legislator, he passed a bill on racial profiling. His address in a meaningful way subprime lending and no one has else. I think the reality is this is not about Barack this is about a banking industry that had a free reign without transparency, without regulation and the Department of Justice did not enforce the law. That's why you now have lawsuits filed based upon steering, clustering and outright violating people.
SANCHEZ: I do have to ask you this question, Reverend, because I believe and I think most Americans without any sense of history and propriety know that you are a legitimate American icon. A valuable civil rights leader and historic figure in this country, but there are people who will want to know if you did, in fact, use the "n" word. Do you deny that you used it? That has significance.
JACKSON: I don't deny it. I'm embarrassed by it. I'm ashamed of it. I've addressed it, yet I do not linger that. We do not have issues before. We're discussing today on money line foreclosed houses. The people lost almost $200 million in home equity and you're still on that subject and we're looking at people now facing foreclose and evictions and I think that must be sort of an urban policy. Not the -- the n word, let's focus on a plan to revise the housing market.
SANCHEZ: I get that, but you know, there's also -- there's a Jesse Jackson legacy that is so important. That many people wish and really want to be maintained. And it has a lot to do with guys like yourself and myself, of our generation, who know your value and know your history, Reverend, but then there are those young people I talked to in Chicago last week, at Unity who say they're really disappointed in you. They felt like you were maybe jealous of Barack Obama. And, remember, they don't understand you the way --
JACKSON: The kind of superficial analysis let me submit to you, that I supported Barack Obama is a United States Senator. Week after week making his case as a U.S. Senator and as president. I think in this life of struggle, there are strikeouts and there are home runs. You have to judge ultimately one by the box score. I think over a period of time as we fought for the right to vote, opening up doors for political access, a lot of the record stands the test's time.
SANCHEZ: And I think most people would agree with you wholeheartedly about that. And I thank you so much, Reverend.
JACKSON: I want to say to you today, came on the program today, that the housing crisis that bleeds into jobs, health care, tax base education, we would do well I think to figure out a plan to reconstruct loans and not just repossess homes. People actually need that address in a meaningful way.
SANCHEZ: Reverend Jesse Jackson back in the game. Thanks so much. We appreciate it.
Coming up, a record drop in housing prices have we finally hit the bottom of this lousy real estate market?
Also ahead, why you haven't heard back about your job application, and how to ensure a call from the hiring manager.
SANCHEZ: Welcome back to YOUR MONEY. I'm Rick Sanchez.
Earlier in the week, President Bush signed in law a bill that is suppose to rescue the housing market. And, boy, does it need rescuing. So many Americans own homes that are not worth even as much as the bank note that's on it. That's never good. In fact, according to a new report, in May, home prices dropped even more. By record levels nationwide.
Brad Inman is the publisher of "Inman News" he is joining us now to try and I guess help put this in to perspective. Housing bill looks to so many people, a piece of legislation that was signed by the president, put together by Congress this week, like a bailout. Is this thing going to fix things for the average American?
BRAD INMAN, PUBLISHER, "INMAN NEWS:" Rick, reminds you of one of the cell phones that does everything, but nothing well. They threw everything at this. We just had this report on oil drilling, where we couldn't get a consensus in Congress. At least here there was a consensus. They moved it through in 60 days. The big question, will it save the housing market? It will not.
SANCHEZ: What about that $7,500 people will apparently get?
INMAN: Well the whole bill will help about a million people. Several hundred thousands could be first-time home buyers who did an interest-free loan of $7,500 they have to pay back in 15 years. The good news about that is you can take that $7,500, which you get back in your tax return as a tax credit, and it's kind of a nest egg.
You buy home, you use all your resources to buy house. You have nothing left in the bank. It gives them assurance for a buyer to make that leap to purchase a home. But you got pay it back. It's not like you're getting a direct subsidy to hold on to.
SANCHEZ: Is this really what we're going through right now; is it all about just home price rates being lower than ever? Too much supply, not enough demand? Just basic econ rules, right?
INMAN: Absolutely. We have some 5 million home listings. That's four times what we had a couple years ago. We have buyers that are retreating, even though interest rates are low. Unemployment rising. Supplies accelerating, there is not enough demand. What's happening, home prices, you mentioned, are falling, and 23 out of 25 markets around the U.S. The good news is for a buyer, there's a lot of bargains out there.
SANCHEZ: But here's the biggy, I think. You know, there are just too many people in this country right now who have homes where what they owe on their home is so much more than the value of their home. In other words, there's no way they could ever sell this thing and make a buck on it.
INMAN: Yeah. It's just like owning a stock that's falling. The question is, do you get out? Walk away? Try to sell the house, or do you hold on? I think people that can afford their mortgage payment, don't have one of these wacky mortgages that is adjusting upwards, close your eyes, and bear with it.
Pay it like you pay your rent and usually in the United States at least markets do return. But this is going to be several years. You just have to ignore it. Pay the rent. Enjoy the house. If you can't afford it you're in a situation where you can't make the payments, it's a whole different scenario. SANCHEZ: But the average person, not the guy with the goofy mortgage deal. The average person should just hang in there as much as they possibly can?
INMAN: You got to live somewhere. If you overpaid and you got an expensive mortgage it can be tough. But the consequences are not saving to try making that mortgage payments. Facing foreclosure what it does to your credit. Want to hold on to your house?
SANCHEZ: What about if you can get some money for it, should you sell it, and just rent in the meantime, save your cash?
INMAN: You know in this market, first offer is the best offer. If you have someone who wants to buy your house for a reasonable price, and you have an option. There's a lot of supply out there. That is something to consider for sure.
SANCHEZ: Brad, you are a smart guy. Thanks for helping us.
INMAN: Thank you Rick.
SANCHEZ: Coming up after the break. Maybe they're just not that into you? Why recruiting managers don't respond to your job applications these days. And what can you do to change that.
SANCHEZ: Welcome back to YOUR MONEY. I'm Rick Sanchez.
The July jobs report is out. And we are, lets face it still hurting as country, 51,000 people lost jobs in July alone. That brings a total just this year to nearly half a million jobs lost a half a million jobs, 500,000. Unemployment hit a four-year high. Manufacturing, housing, retail, all hit hard.
Bottom line, is it not easy right now to try and have or get a job in this economy? This is why you better pay attention to this next guest that we got for you. He can get you the job that you want even in these tough times.
Joining us now, is Brad Karsh has literally written a book "Confessions of a Recruiting Director: The Insider Guide to Landing your First Job." Brad thanks for being with us.
BRAD KARSH, PRESIDENT, JOBBOUND: Thank you for having me.
SANCHEZ: People out there, Brad, who are wondering why they're not getting hired. It's starting to get into their head. So it becomes an emotional thing and it makes it harder to find a job. What do they do?
KARSH: Right. Things are tough right now. The fact of the matter is there are more people applying to fewer jobs. So from the perspective of the job candidate, one of the common laments that I hear over and over again as I send out resume after resume and after resume and I never hear from anyone. I send out 30, 50, 100 resumes. No one call me back. From your perspective. Not into you. Like the dating scenario. You send out the resume and you never hear. And the question is, why? Why don't hear?
There are a couple reasons. One, sheer volume. You've got a lot of people applying to a very few number of job. It's the most popular company is out there it's not uncommon to get 500, 1,000, 2,000 resumes for just one position. So the sheer boundaries of space and time prevent a recruiting director from getting back in touch with every single candidate.
SANCHEZ: But you understand, by the way, that when that happens to someone, you can explain to them a million times how this is a numbers game, all that other stuff, but still they start to get kind of depressed. Right?
KARSH: Right. And it is. And what I do advise people is, don't take it personally. Because this is happening to everybody in every scenario and in every situation. You're not going to hear back. If you go into the mindset of sending your resume out, recognize that most times you're not going to hear back, then you feel much better about it and you can feel really excited when you do happen to hear back.
Now, that being said, you don't want to let the numbers play out for themselves. There are things can you do.
SANCHEZ: Like --
KARSH: One of the things that you want to make sure that you have someone helps you with that job. By that I mean networking. Networking is still the single best way to get a job. Two out of three people get their job through networking. That doesn't mean that somebody's going to give you a job just because you know somebody. But what it means is you have a much greater opportunity of getting the job. The chance to interview for that job, if somebody sends your resume on to HR. Instead of you sending it over the internet, you get somebody in the company forwarding it on your behalf.
SANCHEZ: Sounds like it's all about contacts. Also, you talk about making yourself more hirable. What do you mean why in term hirable?
KARSH: Recruiting directors want to put a round peg in a round hole. I know it sounds basic and I know it sounds easy but what you want to make sure you do is make yourself the easiest possible hire. The best way to do that is look at the job description. And I tell job seekers that the job description is basically a cheat sheet for your application to that company.
If they're looking for somebody in certain -- with certain specific skills and in certain specific area, make sure you highlight that on your resume. So don't write your resume from the perspective you, you have to write your resume from the perspective of that recruiting director at the company where you want to work.
SANCHEZ: Brad Karsh, thanks so much, great information. There are people right now taking copious notes, I'm sure, there's probably too many of them. Thanks a lot. We appreciate it.
Still to come, consumer confidence is very low. Some say that's a real problem.
Then, there's our next guest who says psycho babble, nonsense, who cares? Emotions shmotions, YOUR MONEY next.
UNIDENTIFIED FEMALE: Americans are driving less as gas prices rise but there are many ways to save fuel even when you're on the road.
PETER VALDES-DAPENA, SENIOR WRITER, CNNMONEY.COM: The biggest thing you can do is just take it easy on the gas pedal. When a light turns green, accelerate gently away, if you're approaching a red light or stop sign, take your foot off the gas earlier, let the car coast to that stop sign. When you're on the highway, slow down.
UNIDENTIFIED FEMALE: When you need to stop your car for more than a few seconds, consider turning the engine off, but not in the traffic.
VALDES-DAPENA: People waste an awful lot of gas just idling for no reason. Also if you're running errands, don't wait and run one at a time, plan what you're doing, run your errands in a line, give your engine a chance to warm up and stay warm, so as you turn it off and on, you're not wasting a lot of gas turning the car off and on.
UNIDENTIFIED FEMALE: Still you can't believe everything you hear.
VALDES-DAPENA: Probably the biggest myth about saving gas, people think about changing their air filter or changing their oil is going to have a big impact in fuel savings. You should absolutely maintain your car, keep it safe, but the reality is you're not going to see a huge impact on your fuel economy. So the big thing is quite simply change how you drive.
UNIDENTIFIED FEMALE: That's this week's "Right on Your Money."
SANCHEZ: Welcome back to YOUR MONEY. I'm Rick Sanchez.
Joined now by the CNNMONEY team. Jeanne Sahadi, Steve Hargreaves and Paul LaMonica. Big head lines this week Jeanne. Let me start with you and we learned this week that this deficit was probably as bad as we've ever seen in this country and most Americans are going to look at this and say I got to pay my bills, I'm not spending more than I can take in or trying to be that way. I mean are we going to end up paying the price for what the government couldn't do?
JEANNE SAHADI, CNNMONEY.COM: Well, yeah, large deficits do come back to the taxpayer because what it does is it constrains a lawmaker's ability to raise taxes to support new programs. We have two candidates running for president both of whom have pretty expensive programs on tap. So for them, it was bad news we had a record deficit. On the somewhat bright side, it was not a record in terms of how much the deficit was as a percentage GDP. That record was set in 1983. Today it's only about 3 or 4 percent.
SANCHEZ: That's good. That puts things in perspective for us.
SAHADI: A little. Except the problem is if it was just $482 billion, that's very manageable for us. The problem is down the pike, we have a lot of expenses coming up that are going to increase the deficits, besides the candidates' two very expensive plans that they've got going; by some estimates they could increase the deficit by several trillion dollars. We have a lot of expenses coming up in Social Security and Medicare, and we also have more spending on the war that's ill defined.
SANCHEZ: Something like $80 billion in this is even being included in the deficit.
SAHADI: That's right. That's right. And in 2009, some estimates say we'll spend about $200 billion in Iraq.
SANCHEZ: Steve let's talk about this, lets talk about oil because it did look like a dip this week. Yea, finally, a little dip, right? Dip sticks is what we all feel like. How is this -- in the end, the average American looks at this and says it's starting to come a little bit low, but it's never going to come back anywhere near where we used to be.
STEVE HARGREAVES, STAFF WRITER, CNNMONEY.COM: No, it's not going to come back to $20 a barrel or $10 a barrel or what it was in the late '90s.
SANCHEZ: Not even 50 or 60s.
HARGREAVES: Probably not. You might see 80 bucks at some point. But by and large, oil price are going to stay relatively high, but you're right, they came down this week largely due to a drop in demand.
SANCHEZ: Paul, I want to ask you something about something you wrote this week, you say, consumer confidence be damned. There's always these people talking about consumer confidence is something that we really need to pay a lot of attention to because we need to be concerned about what people are thinking out there. You're saying, you know what? Who cares, psychobabble, right?
PAUL LA MONICA, EDITOR AT LARGE, CNNMONEY.COM: I don't know if I would go that far, but consumer confidence is not a predictive tool for where the economy is heading. When the consumer confidence comes out the numbers are very rarely a surprise. The consumer confidence is low. Really? The housing market is in a shambles. It's no secret consumer confidence is going to be low. The thing that's interesting is that consumer confidence often is low before you get a bounce back or recovery and it is often high right before things start to head downhill so consumer confidences was at its all-time high in January of 2000.
SANCHEZ: Sounds like they're following the crowd, right?
LA MONICA: Pretty much.
SANCHEZ: They're just repeating back what they're hearing from everybody else.
LA MONICA: That's pretty much. The last time it was this low consistently was in 1992 when we were coming out of the recession in 1991, but then we wound up actually having a pretty healthy bounce back in the stock market and the economy in 1993. So even though there was doom and gloom in 1992, that didn't mean the future was going to be more doom and gloom.
SANCHEZ: But we can't help it. Aristotle said we're social animals. We can't help ourselves. Probably more important to look at the numbers than how your neighbor is feeling about the fact that he's maybe not going to be able to make that payment next week. You're right. Thanks, guys, great conversation. Appreciate it.
Thank you for joining us on this edition of YOUR MONEY, we'll see you back here next week. Saturday at 1:00 and Sunday at 3:00. We'll see you then. I'm Rick Sanchez.