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YOUR MONEY

Economic Indicators Point to an Extremely Severe Recession; Analysis of Obama's Stimulus Plan; The Health Care Overhaul and What It Might Look Like; Divorces Down Amid Economic Decline

Aired February 28, 2009 - 13:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


ALI VELSHI, CNN HOST: Welcome to "YOUR MONEY." I'm Ali Velshi.

CHRISTINE ROMANS, CNN HOST: And I'm Christine Romans.

This is the show where we try to tell you what the news of the week means for your wallet and there was plenty of news this week about money, about the economy, and what this government is doing to try to blunt the effects of a very dangerous and frankly, worsening recession.

VELSHI: Yes, and it is worsening and we've got news of that this week when the third quarter GDP, that's the gross domestic product, the largest measure of everything we produce in this country, for the last three months of 2008 came in and it was substantially worse ...

ROMANS: That's right.

VELSHI: ...than people were expecting.

ROMANS: Fourth quarter GDP, I think you said third quarter.

VELSHI: I did say third quarter.

ROMANS: Fourth -- fourth -- that's what I'm here for. I'm the fact checker on the left, or on the right depending on how you're looking at us. 6.2 percent is how the GDP performed. That's worse than we thought.

VELSHI: That means the economy was -- shrank. It got smaller by 6.2 percent. We produced less. We bought less. We did less stuff in the economy.

ROMANS: We haven't seen a number like that in 26 years. What that tells us that the overall output of the economy is weakening at a pace we haven't seen since the early 1980s. And remember, that was a tough time for American consumers, for American workers and frankly, it's something that you don't like to see repeated. But it also gives you a little bit of a mile marker, if you will.

We keep talking about this is the worst performance of the American economy since the Great Depression. Really, we're looking back first at the early 1980's. That's really where we are right now, in terms of jobs lost and in terms of the economy.

VELSHI: We're pretty close on a lot of measures. Unemployment was still deeper in the 1980s, 10.8 percent in 1982. We're at 7.6 percent right now. But pretty much everybody thinks it will get a little bit worse, maybe a lot worse, but at least a little bit worse before it gets better.

But there was a ray of sunshine this week in the name and in the form of Ben Bernanke, the chairman of the Federal Reserve. Who would have thought that Ben Bernanke was the guy who brought a little hope into the system?

(BEGIN VIDEO CLIP)

BEN BERNANKE, FED CHAIRMAN: If actions taken by the administration, the Congress and the Federal Reserve are successful in restoring some measure of financial stability, and only if that is the case in my view, there's a reasonable prospect that the current recession will end in 2009 and that 2010 will be a year of recovery.

(END VIDEO CLIP)

VELSHI: Wow! He's basing that, and so is the administration, on the idea that some things will change, that all of the stimulus that has been put into the system will cause job losses to, you know, bottom out and we'll start to see fewer of them. I don't think anybody thinks we're gaining jobs in 2009.

ROMANS: Jobs are a lagging indicator. That means even after the economy starts to get better, frankly, I'm sorry, we're still going to be losing jobs, even after the economy starts to do better.

VELSHI: We're going to talk more about how you can get a job even in this economy a little later in the show.

ROMANS: This is a very dynamic jobs market. And most people are still employed. People are still growing their businesses, you know. There are ways to still get jobs. And that's something incredibly important to take away.

Also, I think about Ben Bernanke, something interesting, Ali. I want to know what you think. If the actions taken by the administration -- he's putting a big caveat on there, if everything goes the way they hope it does, want it to, and the plan goes as conceived, as hatched, then we will see it.

VELSHI: Nothing has gone as planned in the last year. But there is a good plan and that's the good part. President Obama unveiled a budget this week. It's not the full budget. It's sort of a precursor to the budget. They'll fiddle around with it for about a month and we'll know more about it. But the thing to remember about this is that this budget, and this is for the 2010 fiscal year -- it starts on October 1, 2010.

ROMANS: That's right.

VELSHI: And it's $3.55 trillion. That's what the government says it is going to cost to run this economy from September -- October 1st of 2010 to September 30th, 2011, $3.55 trillion. What's the problem with that? We're only planning to take in $2.4 trillion in revenue, which means there's a shortfall of $1.7 trillion. And of course, shortfalls are deficits. And when you take all of the deficits and put them together, you've got our national debt.

ROMANS: And the national debt, even though you have the president and his team promising to cut the national deficit in half over the next four years, that doesn't mean the debt goes down. The debt gets bigger and bigger and bigger.

In fact, this is why the Republican response to the president and his budget and his sort of state of the economy speech to Congress this week, Bobby Jindal from Louisiana, this is what he said.

(BEGIN VIDEO CLIP)

GOV. BOBBY JINDAL (R), LOUISIANA: Who amongst us would ask our children for a loan so we can spend money we do not have on things we do not need? That is precisely what the Democrats in Congress just did. It's irresponsible and it's no way to strengthen our economy, create jobs or build a prosperous future for our children.

(END VIDEO CLIP)

ROMANS: What did you think of the response?

VELSHI: I thought that the presentation of it was a little strange. I've heard Bobby Jindal speak a lot of times. I don't think he was oftly convincing in his delivery of the whole thing. And there were a lot of specific things -- he's the governor of Louisiana. And there were a lot of things specific to the Hurricane Katrina and the government's handling of that at the time. I don't think the two things are the same at all. I think they're two very different thing.

But underlying that all, Bobby Jindal is representing a view that a lot of people have, that this is just taking on debt so that future generations can pay it. And I think that's worthy of a lot of discussion.

ROMANS: It's a traditional view also of the right. I mean, this is what they think of. But others will tell you and economists of all stripes will tell you that unless you can fix a declining economy right now, you're going to lose more money and have bigger deficits going forward anyway.

VELSHI: There is another conversation between liberals and conservatives and that is about bank nationalization. We got news this week that the government is changing its investment in Citigroup. It was something that was structured like a bit of a loan. The government was getting money back, about eight percent, for the money they've loaned Citigroup. They changed that over. It is going to be equity. It's going to be stock. The government is going to be a very large share holder in Citigroup, 36 percent.

ROMANS: So it's increasing the stake, Ali. It doesn't mean more of our money is at risk. VELSHI: It's the same money. It fiddles around in the balance sheet, but all of this has really raised a lot of questions about nationalization. And a lot of people are very fearful of what that means, government owning banks. Ben Bernanke was asked about that earlier this week. Here's what he said.

(BEGIN VIDEO CLIP)

BERNANKE: Nationalization, to my mind, is when the government seizes the bank, zeros out the shareholders, and begins to manage and run the bank. And we don't plan anything like that. It may be the case that the government will have a substantial minority share in Citi or other banks.

(END VIDEO CLIP)

ROMANS: What's government ownership? What's government control? What's nationalization? It's a big philosophical debate. But we do know the government has more control and more of a stake now in Citi than it did.

VELSHI: Some people don't like the way government runs things. Some people think government runs things more frugally than private enterprise.

ROMANS: Some people think we don't have a choice.

VELSHI: Whenever I get my license at a government office, government run office, no fancy lights, nobody spent a $1 million on their renovations. And I bet you they don't have a corporate jet. But ultimately, what does all of this that we're talking about mean to you? We told you $3.55 trillion in a budget. What does that mean? What impact does that have?

ROMANS: You heard what we think about it, what we're saying about it. We're going to talk to a couple of experts. Amy Holmes is going to weigh in. Also Stephen Leeb is here too. We're going to have a run down on this and a whole lot more. I have a feeling they don't agree on this subject at all. Don't go away.

(COMMERCIAL BREAK)

ROMANS: Such an incredible week, a big budget unveiled, this new administration unveiling kind of its blueprint for the next four years, ten years in this economy. Such a big week that, you know, who do you any to for this kind of analysis other than Ali Velshi? Ali Velshi, ladies and gentlemen ...

VELSHI: Let me tell you ...

ROMANS: He was on "The View" this week. I'm not kidding. Take a listen.

(BEGIN VIDEO CLIP)

BARBARA WALTERS, "THE VIEW": One word answer, are things going to get better or worse?

VELSHI: They are going to get a little bit worse first, but ultimately they will get better.

WALTERS: How long?

VELSHI: I think you're looking at a year before we see things improve substantially.

(CROSS TALK)

WALTERS: You do make us understand.

(END VIDEO CLIP)

ROMANS: Unless I misunderstood, Barbara Walters asked you for a one-word answer. Now, she knows what it feels like to be me. A one- word answer from Ali Velshi.

VELSHI: Well, yes. That's why I don't -- you can't give a one- word answer on the budget. I do think the situation is going to improve. I'm probably not as rosy -- and I was a bit surprised at how rosy Ben Bernanke's view of how quickly it will return is. But I do think that we're going to return.

But ultimately, a budget is the government's outlining of its priorities. They're saying this is how we're going spend your money. Let's just talk about what the priorities are, as outlined by this government. And it will ring true to you, if you listen to what Barack Obama was saying when he was a candidate.

He said he wants to spend more money on alternative energy. There's nothing in this particular budget that actually takes us further down the road of alternative energy. There were some things in the stimulus, which are counted in the budget. But there are plans that they said to spend more money on alternative energy, including a cap and trade system with respect to emissions and how they're handled.

Education is another area where this government said it wants to spend more money. Again, there are some increases in this budget, including increases to Pell Grant funding, allowing Pell Grant loans up to $5,500, and some loans to allow people who are -- have very low income to get to college.

Health care, a very big priority of this government. No increase in funding in this particular budget. But they're putting aside -- or they're discussing putting aside a fund of more than $600 billion to ease the transition into a different kind of a health care system. We're going to talk about that in great detail later in the show, what that means to you and how that may affect health care.

Defense, this is interesting, a small increase in defense spending for 2010. That's the budget year that we're looking at. But a long-term decrease of more than a $1 trillion over time. So Barack Obama had said when he was a candidate that he's going to decrease defense spending, and he's going to increase in the other areas. He's made the decision that he's going to pull troops out of Iraq by 2010, August of 2010. And that is -- that is a reflection of what he believes he was elected to do.

ROMANS: So this is what he promised on the campaign trail, essentially the document in which he's making good on those promises.

VELSHI: That's what it is. But are they the right things to do? Let's talk to our guests about this. Stephen Leeb is the author of "Game Over." Amy Holmes is a CNN contributor. Thanks to both of you for being with us.

Amy, let's start with you. Is it it fair to say that that is a reflection on what this administration said it would likely do, based on campaign promises?

AMY HOLMES, CNN CONTRIBUTOR: I think it's fair reflection to look at the budget as a political document, as you laid out, in terms of priorities. You look at education. If there -- is the federal role really supposed to be enlarged? A lot of people pay for their education. Most people pay for their education through property taxes. Will their property taxes be lowered if the federal tax is raised in order to pay for all of this?

Barack Obama, he says that people making under a quarter of a million dollars, families, won't see their taxes raised by one penny. And yet if you look at this budget, when he's eliminating deductions, people who make over $200,000 actually might see their taxes go up. So I think there is a discrepancy between what Barack Obama had said on the campaign trail, President Obama, and what this budget delivers.

ROMANS: I want to ask you a real quick question about potentially raising taxes on people above $250,000 a year, because I talked to a couple people this week who were like, look, the American dream is to make $250,000 a year, if you're a household. What kind of message is the Obama administration sending? There was sort of this feeling, I guess, that there's an anti-rich theme coming from the Obama administration. Do you agree with that?

HOLMES: Well, certainly Republicans are raising the specter of class warfare. And I don't make that kind of money and a lot of people don't know people when make that kind of money. But we also know that small businesses create 75 percent of the jobs in this country. And they file as the single taxpayers that are a quarter of a million to $250,000 a year. And they are the people who create jobs. They might see their taxes go up.

So Republicans are going to certainly be pressing the theme that Barack Obama is talking about raising taxes on the very engines of growth in it country.

VELSHI: Stephen Leeb, what do you think?

STEPHEN LEEB, AUTHOR, "GAME OVER": I agree with Amy in certain respects. Ali, unfortunately, it was presented as a political document. And it is so easy to turn it into class warfare. It's one thing to say that we're all going to tax the rich more, give back money to the poor. And, you know, that's because things have gotten way out of whack.

That really is a message that, yes, we mean business. We're going to make this country more egalitarian. And we're going to do it maybe to punish the rich. You can certainly make that argument.

But there's another way of presenting it though, which to me makes a lot more sense. And that is simply to say we're going to make this economy more vibrant and more healthy.

VELSHI: Stephen, good to talk to you. Thank you very much. We're going to talk about a lot of those other things. Amy, stay with us. The coming months should be very interesting, as Stephen says. This is not going to be the end of this discussion about this budget. It's very preliminary. And one of the most contentious parts of it is going to be health care. We'll be talking about that.

(COMMERCIAL BREAK)

VELSHI: All right. We have a few issues in this budget and in this priority sort of schedule that the Obama administration has laid out, and they are alternative energy. We're going to talk about that a little later in the show. They are education. They are jobs. We're going to talk about that in some detail, where you can actually go to get jobs right now. But really one of the biggest deals all through the campaign and now increasingly with people losing their jobs is health care.

ROMANS: Yes, that is absolutely right. Health care is something that is going to affect every single American. And it is going to affect you in a lot of different ways. It could come down to the quality of care and the kind of care you are going to get and the availability of care when you have to go to the doctor.

Sean Tully is here. He's editor-at-large at "Fortune Magazine." He's going to tell us a little bit about the health care overhaul that we think -- what we think it is going to look like. Sean?

SEAN TULLY, "FORTUNE MAGAZINE": We don't know exactly, but we do know what President Obama proposed during his campaign. And it was totally different than the plan that was proposed by candidate -- Senator McCain. The plan essentially is a pay or play plan for businesses, where businesses can either drop their employer-provided benefits and pay a payroll tax to the federal government to support what is essentially a Medicare plan or Medicare-style plan for working people, which would cover about 110 million Americans who are working, but now get their benefits from their companies.

Or people would be able to buy private plans that are based on the plans that are now available to federal employees. Unfortunately, his plan will not allow people to either shop for insurance across state lines. And so it maintains enormous price differences in different state markets and does not allow people to buy high deductible insurance, unless there's a radical change in his plan. VELSHI: High deductible insurance, first of all, means that if I think I'm a pretty healthy guy, and I don't need a lot of coverage, I'll get a policy that will cover me if really serious things happen, but the first $1,000 or $1,500 or $5,000 will come out of my pocket?

TULLY: That's correct. And the reason why there are over 40 million uninsured Americans is a lot of young people drop their coverage, because these standard benefits packages that included everything from mental health benefits and counselling, to in vitro fertilizations, drove the prices way up, above their actual costs, and subsidized older people at the expense of younger people. This enshrines that system.

ROMANS: Sean, let me ask you. There's a lot of talk this week about wealthier seniors having to pay more for their drugs, for their prescription drugs. There's also a lot of talk about wealthy Americans paying higher taxes to pay for this. How do we pay for it?

TULLY: Under the current spending plan, which includes only a down payment on this health care plan, we're talking about deficits that are almost $2 trillion.

ROMANS: Right.

TULLY: Remember, total income tax receipts are about 1.1 trillion. Everyone was complaining -- remember, Ross Perot, remember in the early Reagan years, what we would have to do to balance the budget under those conditions. And under Reagan, the shock was you'd have to raise taxes once again for everybody from St. Louis to California. Well, now you'll have to go from New York to California and then back to Nevada simply to balance the budget.

There is no way, mathematically, even without this health care plan, that the current tax system can sustain the kind of spending that's been planned. We are going move to a value-added tax. There's no question about it. And that puts us in the European camp.

VELSHI: Sean Tully, doesn't love the plan, but at least we have an idea of what's going to be in it. Sean, good to talk to you. Thank you so much. Sean Tully is the editor-at-large at "Fortune Magazine."

ROMANS: OK, there are jobs out there. I promise you. We saw a lot of people lining up for unemployment benefits in the last week. We keep telling you how troubled the jobs market is. There are jobs. It's just a matter of looking in the right place.

VELSHI: Not a lot of jobs.

ROMANS: There are some jobs out there. Ali's job is not open at the moment.

VELSHI: Mine's not. But I'll show you which ones are. We're going to help you find out exactly where there are some jobs for you when we come right back.

(COMMERCIAL BREAK)

VELSHI: I may sound like a broken record saying this all of the time, but the American economy is more dependent upon consumer spending than most other economies. That means our economy is dependent, to a certain degree, on how consumers feel. And right now, we know consumers aren't feeling great. Consumer confidence numbers took a nose dive this month.

But I want to give you some context as to why we may be feeling the way we do. I call it our CNN Real Feel Economic Indicator. It takes a look at five measures of the economy that really affect people, that really touch you. And this calculates where we are in the context of last 29 years.

We started at 1980 until now. We're going to shed some light on why you might be feeling the way you do about the economy.

Let's start with unemployment numbers. The lowest unemployment we've had in that 29-year period, we put the lowest unemployment numbers as 10. That's the best part on our scale. And that was in the year 2000. That was 3.9. The highest unemployment, or the worst on our zero to 10 scale, was in 1982, when unemployment was at 10.8 percent.

Right now, unemployment is at 7.6 percent. So on our scale, that's 4.5. That comes in below half way.

The next thing to check in on is personal income. Over the last 30 years, adjusted for inflation, average personal income for men has been as low as $32,600. That was back in 1993. We've adjusted this all for inflation. The high point was in 1980. Adjusted for inflation, men were actually earning more back then, $39,109.

By the way, we're choosing men because since 1980 the same number of men have been in the workforce. There are a lot more women in the workforce than there were back then. So it's a little steadier to report on men.

Right now, the average income for a man is $34,676. That's a bit more than three on our scale. Again, we haven't crossed five.

The next indicator, personal savings. If you have money saved up, you can make it through a recession more easily. In the 1980s, a lot of people thought the recession was the worst or at least felt the worst. But back in 1982, get this -- 1981, I'm sorry -- people were saving 12.2 percent of their income. That means if you had a long recession, you had saved up some money to weather it. About a year ago, our savings rate was very low, just before the credit crisis hit, negative 0.7 percent. That's in 2005, actually.

Right now we're at 3.6 percent. Some people are saving because they're worried about the economy. Others are saving because they can't get credit. Still, a little better than three on our scale of zero to ten. We still haven't crossed the halfway point on any of our scales. Next, industrial production. That is the measure of everything produced in this country. When factories close down and manufacturing workers are laid off, we produce less. The best we've had, and this is a comparison of one year over the next, was a 10.7 percent increase back in 1997. That was a 10 on our scale of zero to 10. Right now, our industrial production is actually at the lowest point, 12.1 percent, just a little above zero. So we are at zero on the scale of zero to 10 in industrial production.

Finally, the appreciation of our home prices, or how much your value -- your home value increased in a year. The best we've had is a year where prices were up 9.7 percent compared to the same time the previous year. That was in 19 -- I'm sorry, that was in 2005. So that would be the 10 point on our scale, the high point. This year that we just came out of, 2008, minus six percent. That's the low point on our scale. That's the biggest decline that we've had since we've been measuring this sort of thing. So on a scale of zero to 10, home price appreciation is a zero.

Let's take a look at all five measures together. Of those five measures and how it feels to you, we're at zero on two of them. We're below the half-way point on the rest of them. So it is understandable if you feel that the economy is not great right now. The good news, hopefully, we can only go up from here.

We want to talk about jobs. We want to talk about where you can get jobs, because we've told you so much about jobs that have been lost.

Jennifer Merritt is with us right now. She is a career editor at the "Wall Street Journal." Jennifer, thank you for being with us. You have a great Web site that you've identified. It's USAJobs.gov. This is the official Web site of the federal government when you go to get jobs.

Let's take a look at this. I want to show you about the Web site and then we're going to tell you about specific jobs that Jennifer found. This is the Web site, very easy to use. We've actually gone ahead and entered construction in the search field. You can also talk about where you are in the country. You can put in a zip code and a distance.

Look at the number of results that we've got here. In construction, 4,639 government jobs. Let's look at this one, construction inspection technician, a salary of 48,509 and higher. Very easy to touch on this. You just click on it, and it tells you all about the job. It tells you where it is. You can look at qualifications and evaluations. It will tell you what you need in order to qualify for the job.

You can also put into the search area where you are. We put Cleveland, Ohio here, not as many jobs in Cleveland. Cleveland is one of the hardest hit areas in the country, in terms of foreclosure and jobs. So only 86 government jobs in the Cleveland area, but they're all here. Here's a job for a secretary in the government for $35,596. So, there are a lot of jobs to be had out there in the government sector.

Let's talk to Jennifer about some that she put some time into to research. Jennifer, what did you find?

JENNIFER MERRITT, "THE WALL STREET JOURNAL": I found that there actually were more jobs than you might think, and a lot of them are translatable from the jobs that people are losing today. If you've been working as an auto worker, you can go become a machinist with the government all over the country.

VELSHI: You've got a job here for a civil engineer. Tell us about that. That's got a very big pay range, depending on your qualifications?

MERRITT: Your qualifications and location. So in a location where the jobs are not as big, the pay is a little lower. But certainly someone just coming out of an undergrad with a civil engineering degree can walk in making $45,000. There are over 900 jobs available right now and that's just expected to grow with the stimulus plan.

VELSHI: That is a growing field. Another growing field, even though you might not think about it, because of all the people being laid off, is actually human resources. There are some opportunities that you found in the government.

MERRITT: Absolutely. With all of this hiring going on, there is going to be a lot of opportunity to hire people in the government. So human resources, from assistants, who don't even need college, but just need some experience, all of the way up to human resource managers, who can make over to $100,000 a year. And they're all over the country, over 9,000 jobs available right now.

VELSHI: All right, that's a good field, if you're thinking of getting into something. You and I talked about accounting before, another area that's been growing.

MERRITT: Absolutely. Accounting jobs right now are at more than 7,000. That includes people who are financial analyst. You do need a college degree, and some experience. But there are some junior level jobs that you can get right out of college, all of the way up to senior level jobs.

VELSHI: We want to cross between those jobs that take a great deal of qualification to those that take less. Service technician jobs.

MERRITT: Field service technicians are all throughout the manufacturing industry, and those jobs are being lost, but often you can go with a high school degree and a little bit of experience and walk into one of these jobs. And there are over 3,000 of them right now.

VELSHI: What about procurement? You have one here that says procurement.

MERRITT: People who do procurement, they buy stuff. They bring in the things that you need for your job and ...

VELSHI: It could be procuring supplies or food.

MERRITT: Absolutely, or paper or even requisition orders for a new project. There are almost 3,000 of those jobs available right now. And they pay anywhere from $35,000 and up. You can walk in with an associate's degree and get one of these jobs.

VELSHI: Jennifer, great to have you here. Thank you so much. Jennifer Merritt is the career editor at "The Wall Street Journal." We've given you some food for thought when it comes to what's available in the job market, and your best tool for finding the job might be right in front of you right now.

(COMMERCIAL BREAK)

ROMANS: In the break, we were having a discussion about the demise this week of "The Rocky Mountain News" after 150 years, this newspaper closed. Ali says ...

VELSHI: I think newspapers are having a tough time. I'm not sure.

ROMANS: I don't mean to laugh about it, but ...

VELSHI: A lot of newspapers have closed. The writings on the wall. People have changed the way they do business. They changed the way they consume news. They changed the way they contact each other. And this led us to a conversation the other day about what we call social networking, although this is a big debate, because I use Linked-In and I use Facebook and a lot of people say, isn't that for kids to talk to each other.

ROMANS: This is more professional networking.

VELSHI: That's the way I use it. Let's talk to someone who knows more about this than we do. Reid Hoffman is the CEO of Linked- In. I understand, Reed, that you don't refer to it as social networking, what Linked-In. You refer to it as professional networking.

REID HOFFMAN, CEO, LINKEDIN: Indeed. We call it professional networking because it's where you connect to people that you know professionally, former colleagues, classmates and people you've worked with. You establish a ...

VELSHI: Assume nobody knows what this is. How do you describe it to somebody? How do you describe Tivo to somebody? How do you describe LinkedIn to somebody?

HOFFMAN: Well, it's where you establish a professional profile online and collaborate with the people you've connected with, whether it's to find information or to even find a job.

ROMANS: So it's like a resume, but not a resume. You can talk to people. You can let people know about updates in your life, right? HOFFMAN: Exactly, and things that -- for example, one of the questions I asked on LinkedIn was where should we locate our European head quarters?

ROMANS: What do they say? In Europe?

HOFFMAN: They say Europe's a good place. Actually, they pointed out a bunch of different things I hadn't thought of, things like, make sure there are multiple direct flights, so you can get there easily.

VELSHI: That's interesting. But for our audience, who might be concerned about business opportunities or job opportunities, how does this work? I get on, I connect up with people who are in a network that I'm in already.

HOFFMAN: You connect to people you already know. You just send them an e-mail invitation. That's pretty straight forward. You can even upload your address book to see who you know who is already there. And then after connecting to them, say, for example, you're interested in working in the Internet industry, you can search for people you know at eBay or Google or Yahoo. And many of these companies also use LinkedIn as a way of finding the talent they're interested in.

We have over 900 companies today that are using LinkedIn. And that number is actually, even in the current economic crisis, growing. And then you can use your network to actually get an edge. As opposed to being one of 500 or 600 applications coming in to a job posting, you can actually get a personal introduction to the hiring manager of the group.

ROMANS: Are we LinkedIn together?

VELSHI: I am.

ROMANS: I think I have an account, but I'm still trying to get the Facebook thing. LinkedIn is not the place where I'm going to see pictures of you in 1980 with big hair, right?

VELSHI: That's a good point. Reid, that's not what that's for. Facebook is for the high school photos and finding your ex-girlfriends and things like that. This is not what ...

ROMANS: LinkedIn is for talking to colleagues and finding a job and developing a business and moving your professional skills forward.

HOFFMAN: Exactly right. Basically, we don't have photo sharing. Photo sharing is something that's fun, et cetera. But it's not really something you would do while you're at the office.

ROMANS: How is it spaced though? Here's the thing, I keep getting invitations to join all these different groups I've never heard before, I mean different social networking and professional networking groups. It is an important thing here, the first mover advantage, that people know what LinkedIn is, so you hope to be the grand daddy of this? Or do you have to worry about other groups ... VELSHI: If I'm joining network, I want to know which one to join. Do I join them all?

HOFFMAN: LinkedIn has over 36 million people now. We're growing at over a professional a second. And there's no one even close to us in size in the professional space.

ROMANS: Is this because of the recession? Do you think people know they've got to get their information online? They've got to get out there. They've got to get people know that they're there and they're looking.

HOFFMAN: I think it's everything from current job seekers looking for an edge to realizing that these are, you know, economically turbulent times, and you want to take control of your own -- the destiny of your career. What is going to happen with you in the future economically?

VELSHI: Reid, good to talk to you. Thank you for being with us and shedding light on this. By the way, I have a free link to LinkedIn. There's an element that's available entirely free to you. And then there are certain services you can use for a paid amount of money.

ROMANS: Is the revenue from paying the money or from the advertising?

VELSHI: It's got a clean feel to it. You go to LinkedIn ...

ROMANS: The reason why we're talking about this is we keep having professional experts comes on, telling us how you have to make sure, if you're looking for a job, that you have your profile updated, where it needs to be updated, so the people in the social and professional networking sites can find -- we just want to show you what it is.

VELSHI: We started talking about the "Rocky Mountain News" and newspapers in demise. Newspapers used to be the key place you went to get a job.

ROMANS: Not anymore. Ironically now, the people in newspapers are looking to use new media.

VELSHI: Do you read your papers online, by the way?

ROMANS: I do, but I like to hold a newspaper and circle things.

VELSHI: I have a Kindle from Amazon.

ROMANS: You do have one of those.

VELSHI: I don't use it. A lot of people I know use it for reading newspapers. I actually like to read -- I sort of visualize where the article was.

ROMANS: It's an old way of thinking, but I think a lot of young people, they don't have that top of the fold, bottom of the fold, inside.

VELSHI: Today's kids ...

ROMANS: Kids these days, Ali.

VELSHI: Today's energy isn't the way it used to be. When I was a kid, you got oil; you made it into gas; you put it into your car. Now it's all green.

ROMANS: That's right. Green technology one president Obama's favorite buzz words. But should the government be spending billions to develop green technology or would that money be better spent on more immediate needs during the economic crisis?

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: To truly transform our economy, to protect our security and save our planet from the ravages of climate change, we need to ultimately make clean, renewable energy the profitable kind of energy. So I ask this Congress to send me legislation that places that market based cap on Carbon pollution and drives the production of more renewable energy in America.

(END VIDEO CLIP)

VELSHI: You're going to hear those types of expressions a lot now, a market-based cap on pollution. You might have heard it described as a cap and trade system. We're going to discuss that now with two of our guests. Howard Gould is an eco-entrepreneur. Amy Holmes joins us again. She's a CNN contributor and an independent conservative.

Howard, good to see you again. Let's discuss what a cap and trade or a market-based cap on emissions are. What is the president talking about?

HOWARD GOULD, ECO-ENTREPRENEUR: Basically, what he's talking about is emissions being released by carbon-based companies into the atmosphere. So if you're releasing emissions of CO-2, which would be categorized as a thousands pounds of CO-2 would be one emission credit, being released into the atmosphere, this is very damaging to the environment. And so the idea of a cap and trade system is to give allowances to these companies. And if they go over them, they must buy them.

VELSHI: We're talking about every industrial operation there is. We're talking about whether you're processing oil or building cars or anything that emits any kind of carbon dioxide. You get an allowance. You can emit X amount. And beyond that, if you need to emit more than that, you have to buy a credit from someone else in a market-based system, like what?

GOULD: Exactly. You have to buy them. And there are things being developed here in the U.S. called the Chicago Climate Exchange, for example, and there's California has its own registry and exchange that's coming up online now. Obviously, there isn't a national exchange that's happening yet. But this is what he's talking about coming. And this is a market that actually could be generating hundreds of billions of dollars a year.

If you look at the U.S. -- excuse me, if you look at the European-based market, a few years ago, these markets were only $100 million. Now, today, it will top $100 billion.

VELSHI: Amy, what do you think? Do you think it's a good idea?

HOLMES: You know what? That's a little bit of the problem there, is that you're creating a market that's created volatility. Ben Stein, an economist who admire, he just had a piece in the "New York Times" talking about energy companies with very volatile energy prices are now going to be having to budget very volatile cap and trade prices. If what you want to do is to limit CO-2 emissions, maybe the most straightforward to do it is to simply tax it, not to be creating yet another volatile, complicated market that our energy companies then have.

VELSHI: You mean -- again, you figure out how much we can pollute or we can put out in the environment ...

HOLMES: Exactly, which is -- right, which is what cap and trade does. It says, here's what we will permit in terms of pollution.

VELSHI: Right.

HOLMES: If you pollute more, you have to pay for that privilege. What that creates then is a volatile market for paying for that privilege. That means the companies ...

VELSHI: Howard, it creates a volatile market, because for some company, they need to -- they feel the need to emit more because they're producing more, so they're going to pay for that privilege. They're going to you'll buy it from somebody, for instance, who isn't using their credit.

GOULD: You either buy it from somebody who isn't using it or buy it from companies that are just producing carbon credits. So there are a lot of different companies that could be doing that in the renewable area, in the green space.

VELSHI: Is there a lot of space for companies producing carbon credits? If you do something that is reducing carbon from the environment, you're getting -- you're making credits?

GOULD: Absolutely, that's a huge market. That's a huge market that we're looking at. And it's been happening overseas for a very long time right now. These are the kinds of things that are going to spur this economy. I think that actually a market-based cap and trade system is precisely where we need to be, because it is going to create markets and it is going to create jobs and create companies that actually are generating carbon credit, as well as pushing us into a greener future. HOLMES: But, Ali, here's what, when we look at the president's budget, sort of gives the game away. He's expecting to raise between $600 billion and $700 billion from this cap and trade program between 2012 and 2019. But he's only using $120 billion of it to try to develop green energy projects. The rest of it is going to an $800 credit for married couples.

So if what you want to be doing is trying to protect the environment, then why are you taking the tax that you're generating that money from, and just giving it to married people so they can buy more stuff from Wal-mart? You're taking money from Peter to pay Paul.

VELSHI: Whether they're using that money properly is a separate issue from whether or not it's an effective way to reduce ...

HOLMES: But let's look at it. If you want to reduce CO-2 emissions, you could also have a gas tax. You could then, unfortunately -- I wouldn't propose this, but you could punish using cars that send CO-2 emissions into the air. When I look at this proposal, I see as basically a sin tax, taking something from an activity that we have decided we don't like, and taking that money and giving it to another group of people, middle income, middle class couples, and giving them an $800 tax credit. What does that have to do with the environment?

GOULD: I think the credit that they're talking about pushing back is because of the fact that gasoline is going to be more expensive. Oil is going to be more expensive. To help these people ease into the new greener economy, that's what he's talking about giving money back. He's trying to level the playing field here and smooth over these highs and lows that we're going to see moving into this new kind of market. I think that's the whole point of it.

VELSHI: Guys, this is an excellent discussion. Thanks so much for being with us. We're going to discuss this many more times. You brought us both some very important perspectives on it. Amy Holmes, pleasure to see you again. Howard, we'll see you again soon.

President Obama has set aside more than $90 billion in the new stimulus bill to create what are being called green collar jobs. That's another term you're going to be hearing a lot about. We're going to work hard to explain what these are to you. Now, this money is needed by an industry that's been hard hit by the credit crisis.

Allan Chernoff has more on this.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice-over): Kevin MacLeod is a solar power veteran. His business of installing solar panels has grown dramatically in the last few years. But since the economy has stumbled, he and his colleagues are taking a serious hit.

KEVIN MACLEOD, SOLAR ENERGY CONTRACTOR: I'm going to say personally about 30 percent of my business is off because of not being able to secure the credit, the jobs. And that hurts. DEAN HAPSHE, SOLAR ENERGY CONTRACTOR: Nobody can get dollars for financing if you don't have the cash to pay for it. There's nowhere else to get the money to pay for solar energy.

CHERNOFF: A big problem not just for Gene, but for President Obama's plan to expand alternative energy supplies.

OBAMA: We will double the production of alternative energy in the next three years, building solar panels and wind turbines, constructing fuel efficient cars and buildings, and developing the new energy technologies that will lead to even more jobs.

CHERNOFF: The benefits of converting to solar power can be huge.

UNIDENTIFIED FEMALE: Our bills were like $5.41.

CHERNOFF: It's the right thing to do for the environment.

UNIDENTIFIED FEMALE: It's truly a wonderful investment and keeps us from using oil and fighting wars for oil.

CHERNOFF: But solar panels come with a hefty price tag, about $40,000 for a typical home. In these days of tight credit, it's hard for potential customers to secure financing.

UNIDENTIFIED MALE: It's pretty frustrating, actually, to sit there and know that I'm pulling pretty good money and working hard and paying my bills and that I can't get it.

CHERNOFF: Kevin, a firefighter from New York, is angry that he can't get a loan to buy solar panels.

UNIDENTIFIED MALE: Basically solar panels pay for themselves over time.

CHERNOFF: And for solar contractors, it's been a tough and trying time.

HAPSHE: Two out of 10 can't get financing. And the financing also is affecting my business, because my business is being financed. My bank shut me down. Thank God, I have other sources of financing other than the banks.

CHERNOFF: So all eyes are turning to the economic stimulus package.

MACLEOD: The whole industry is depending on what happens down in Washington.

CHERNOFF: With hopes pinned on President Obama to come to the rescue.

MACLEOD: If he's promising the industry that he wants to create green collar jobs, he needs to put the money out there and make it available to our industry and the homeowners. UNIDENTIFIED MALE: I hope that whatever he does helps the rest of us out, the working middle class. Everybody is trying to make ends meet.

(END VIDEOTAPE)

VELSHI: That was Allan Chernoff reporting. We know that money causes a lot of stress between couples. And you'd think that this recession might be causing more stress and more divorces. But, in fact, there are fewer divorces happening right now. And there's an interesting twist on dealing with your marital strife because of money.

(COMMERCIAL BREAK)

VELSHI: Well, a decision to end a marriage is personal, emotional and altogether too common.

ROMANS: You know, once you finally decide to untie the knot, what happens if you can't sell the house?

(BEGIN VIDEOTAPE)

ROMANS (voice-over): Breaking up is hard to do. Just ask Sally Frederick. She's getting a divorce, but she and her husband of 15 years still live together, and not because they want to.

SALLY FREDERICK, RECENTLY DIVORCED: My husband lives in the guest room, and he comes home on Wednesday nights early to have dinner with the kids. And the other nights, he comes home late to give me my space. So it's -- it's not perfect. It's been difficult.

Come on, Sammy.

ROMANS: While her husband didn't want to appear on camera, she describes the divorce as an already painful personal experience, made more difficult by the recession.

FREDERICK: I really depend on my friends and family for emotional support. And I don't -- I can't talk on the phone. I don't have privacy. My computer's in the kitchen, so I don't write things on the computer that I don't want someone looking over my shoulder and seeing.

ROMANS: Celebrity divorce attorney Raoul Felder said the Fredericks made the right choice.

RAOUL FELDER, MATRIMONIAL ATTORNEY: As far as the house is concerned, it's very sticky. People have to decide how much they hate each other, because if they can still live with each other, and the house or the apartment is big enough, they ought to stay together and wait for a rising market.

ROMANS: Add divorce to the list of casualties of the recession. The American Academy of Matrimonial Lawyers says 37 percent of attorneys polled report fewer divorces in a bad economy. GABRIELLE CLEMENS, DIVORCE FINANCIAL PLANNER: Now things have gotten so bad that because they can't sell their house, because their assets are down so much, and because their debt is so high, they can't afford to get divorced. Now, we've reached the actually -- the next level of they can't even afford to break up even if they wanted to.

ROMANS: As for Sally Frederick, she says, after legal bills for two divorce attorneys, the couples switched to a less expensive mediator. She hopes the divorce is complete next month. But the couple plans to remain under the same roof.

FREDERICK: Right now, there are 20 houses on the market in town that are in our price range. And there are no buyers. So my broker has pretty much prepared me that the house is going to sit for quite a while.

(END VIDEOTAPE)

ROMANS: And so that means Raoul Felder, the celebrity divorce attorney, says some couples are just going to have to tread water in the meantime. You know, it's also very difficult for people who have a prenuptial agreement, who have guarantees for how much money you're going to share. You can't sell the house. You don't have any money.

VELSHI: Or a lot of your shared investments are in stocks and things like that.

ROMANS: Financial planners also point out that look, if you only have debt to split up and no income and a house you can't sell, this is not the time to be getting a divorce.

VELSHI: It's interesting that those divorces are down, because we do know money is such a cause of dispute between people.

ROMANS: The dispute isn't gone, I think. Just the ability to get the divorce, I think, has diminished. Too bad.

VELSHI: We stay together even though we talk about money all the time.

ROMANS: I know, and we don't agree either.

VELSHI: We don't. But we'll be here every week. Thank you for joining us. Make sure you join us every week for YOUR MONEY, Saturday at 1:00 pm Eastern and Sundays at 3:00, right here on CNN.

ROMANS: You can also log-on 24/7 to CNNMoney.com. Have a great weekend, everybody.

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