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YOUR MONEY

Obama Summons Big Bankers to White House; Fierce Debate in Copenhagen

Aired December 12, 2009 - 13:00   ET

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


(BEGIN VIDEO CLIP)

CHRISTINE ROMANS, HOST (voice over): At the D.C. Corral. President Obama summons the big bankers to the White House 12 months of tension over bonuses and bailouts reach a boiling point.

Hot air and cold hard cash in Copenhagen, climate change, a source of fierce debate. We're following the special interests and their money.

And the president vows to put Americans back to work and save small business at the same time. Is this time any different? Time to punch in. YOUR MONEY starts right now.

(END VIDEO CLIP)

ROMANS: Welcome to YOUR MONEY. I'm Christine Romans. A showdown brewing in Washington. President Obama is summoning CEOs from the top banks to Washington. The message will be clear. Your country needs you to lend, lend, lend. The banks response is just as simple. Risky lending got us into this mess in the first place.

It is easy to predict the headlines. Wall Street's greed versus Main Street's pain. What's harder to understand is what President Obama can really hope to get from the nation's top banks that will really spur a recovery? That's why we turn to Harvard professor Ken Rogoff, the former chief economist at the IMS, as well as CNN senior political analyst David Gergen. David has the president reached a boiling point with the nation's big bankers?

DAVID GERGEN, CNN SR. POLITICAL ANALYST: He's clearly very frustrated. You know he had the bankers in back in April and he told them given the populous uprising around the country, I'm the only thing that stands between you and the pitchfork. Chilling words and he hardly served them with a lot of food. They got glasses of water. This time I'm told they'll be lucky if they get water. There is a sense in Washington that the banks have really gotten themselves crosswise with the American public that they rolled up these big profits.

Goldman Saks I must say to its credit started to turn it into stock instead of cash. That was a wise move on their part, but even so there is a strong feeling in Washington that the banks have recovered but Main Street hasn't. The banks are not doing enough to lend especially to small business. So I think the bankers themselves think there's a good chance they're going to come in for a scolding, maybe a severe one. ROMANS: You mentioned Goldman-Saks, its top 30 executives who had received a stock bonus not a cash bonus and Ken Rogoff said it's interesting because there are a lot of other people at Goldman-Saks who are still going to make an awful lot of money. That's just 30 people.

Ken Feinberg, a special pay master for the Treasury Department also coming down with some new rules capping salaries at six companies, U.S. assistants to half a million dollars, unless there's special circumstances. What can the president do on Monday? What can he tell these bankers to make them lend?

KEN ROGOFF, PROF. OF PUBLIC & ECONOMICS, HARVARD UNIVERSITY: Christine, the first thing, they're going to need a stiff drink. Not just water after he's done with them. He's mad, we're mad. They're making money. They get loans. They have access to credit, but small businesses and medium size businesses they don't. And it's a very awkward situation. The trouble is, on the one hand the president controls everything, and Congress.

There's financial regulation coming that's going to change the landscape of how banks work for two decades. He controls it. They don't know what it's going to be, but on the other hand if he's not willing, we're not willing, to get in there and micromanage things to tell them you loan to them, you loan to them, like China and India do, what can he do? They all have their own distinct interests; they all want to make money. He's going to get mad, they'll do something, but I think it is very limited what he really can force them to do.

ROMANS: What can you -- go ahead?

GERGEN: I wanted to ask, Ken, is there some danger here that Washington could go too far? In over regulating, over interfering in over managing this and you really could dry up in ways over time that would be dangerous for the economy, too?

ROGOFF: Well, I don't think, David, there's any question they could go too far. I don't think we're in any danger of hitting that zone yet of going too far. They're probably being cautious. They don't want to cut back lending in a recovery. But, yes, it's very hard to find tune and that is why nobody knows what's going to come out of this.

ROMANS: Let me ask you Ken about the pay cuts in the like. You mentioned to me that you think what's happening in the U.K. and in France now potentially, these taxes on bankers bonuses. But that might be a way to go. You like that move?

ROGOFF: I'm very sympathetic. It's hard not to be. It's just a one-time task on this year. They got the giant bailout. They'd be out jobs, they'd be broke and to try to have some immediate take back. I'm very sympathetic but it doesn't seem like it's going to happen in the states.

ROMANS: So many moving parts David here and the public is still so outraged about the pay part of things. Just how much money these bankers are getting so quickly after it took taxpayer money to stabilize the system, but the president also has to get this lending thing fixed. The banks are going to say, look, risky lending got us here in the first place; we're not just going to go start throwing good money after bad. We're in the midst of a big change in the economy. We're not going to get too aggressive. You know, how can the president push to get what he needs?

GERGEN: Well, first of all let me say I disagree with my friend Ken on the bonuses. I think if the government starts engaging in consistory kind of moves that is going to have a very destructive effect over time. I know it's a one-off deal but it is a 50 percent tax on bonuses surtax in both France and the U.K. that are on the table now.

But there is talk and whether this would work or not I'm much less certain than Ken would be, but there is talk of taking some of the T.A.R.P. money and making it available to banks that they, as long as they lend it to small businesses they wouldn't come under some of this regulatory structure, and they also wouldn't have the stigma of T.A.R.P. attached to it, but it might be a way to stimulate especially lending to small business. Whether that would work or not, I'm much less qualified to say.

ROMANS: We'll talk about whether that could work and we will talk about that point in particular right after the break. David and Ken stick with us, also, David, consistory, that is a good word of the day. We'll keep that one. Don't go away.

Check out this map. It shows an important trend. A trend we're going to want to pay close attention to no matter where you live. We'll explain.

(COMMERCIAL BREAK)

ROMANS: We wanted to bring you an amazing illustration of the jobs situation we face in this country. Take a look at this. It's a map created by LaToya Egwuekwe as part of a grad school project at American University. It shows the progression of rising unemployment across the country as we move from January 2007 to October of this year. Those darker areas are the higher areas of unemployment. You can see it spreading like a stain across the country.

Besides being a graduate student, LaToya is writer for the "Machinist Union" she is joining us from Washington. Welcome to the program. The illustration is beautiful in a very ugly way for many, many American workers. What story emerged as you started to put all of this county-by-county data together?

LOTOYA EGWUEKWE, WRITER, MACHINIST UNION: I think the story is, just what you see. That there's obviously a jobs crises going on right now in this country, and the premise behind the map and the reason why I put it together is because I wanted people to see what was actually going on. I think it's one thing for people to hear the numbers or read the numbers, and they may in fact know someone in their family or have a friend that's unemployed but I don't think it really hits home for most of us until we actually get to visualize it and see what's actually taking place in this country around the United States.

ROMANS: Again the darker colors, the audience is watching this right now, the darker the color, the higher the unemployment rate. So as time has passed, that purple stain has spread across much of the west, the mid west and southeast, the Sunbelt. What was most surprising to you and to people who have talked to who have seen this map about what it shows?

EGWUEKWE: I think the most surprising thing for me, before I sat down to put it together I didn't exactly know, or I knew what the before and after looked like's I didn't really realize what the progression itself would look like. So that was the most significant thing that kind of hit home with me, and from what I'm hearing from people that have seen it through e-mails and various comments, and you know, I guess the most surprising thing to me is also that I received e-mail from someone who is currently unemployed and her comment was the unemployment -- being unemployed a very lonely at times and she said, thank you. Thank you for helping me feels less lonely.

So I think the most important thing for everyone to take from this is that you know, this is happening right now, and you know, it affects 31-plus million people. It affects our members at the Machinist Union and this is, this crisis that has been going on for a while now and the Machinist Union has been screaming it, saying something needs to be done and people need to walk away from this map and know that this is a very serious issue taking place.

ROMANS: LaToya Egwuekwe, thank you so much. A grad school project. Did you get an A for this? Tell us you got an A?

EGWUEKWE: I did. I got an A.

ROMANS: Good. That's nice to hear. Thank you so much for joining us and thanks for bringing your map along. That purple illustration really shows the stark economic situation. The situation the president says will need more efforts to reverse.

This week President Obama says he wants to grow jobs by using excess T.A.R.P. money, or returned T.A.R.P. money to stimulate small business. Republicans simply not happy with that, they want to pay down the deficit with that money and frankly say that's exactly what budget rules require. Here's some of the discussion this week.

(BEGIN VIDEO CLIP)

REP. JOHN BOEHNER, (R) MINORITY LEADER: This makes me so angry. I was there. All right? I know all about T.A.R.P. First it was never intended that all this money would ever have to be spent, but any money that wasn't spent was to go to the deficit, and the idea of taking this money and spending it is repulsive.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Ensuring that economic growth and job creation are strong and sustained is critical to ensuring that we are increasing revenues and decreasing spending on things like unemployment insurance so that our deficits will start coming down. (END VIDEO CLIP)

ROMANS: Our esteemed guest is still here, Harvard professor Ken Rogoff, former chief economist at the IMS and CNN senior political analyst David Gergen. Ken what is the best way to get the economy moving again? To help lending for small businesses? To get jobs created? Is it taking some of that money, or the wiggle room in the budget, and injecting it into some other programs?

ROGOFF: Christine, I'm very worried about the deficit down the road, but we're not down the road yet. And there has to be more fiscal stimulus, whether it's by stealth or through this indirectly. The fiscal stimulus comes out of the economy too quickly and it's phasing out the big impulse they had when Obama came in office. We're going to be in trouble. They have to get rolling. This is just the first piece of it.

ROMANS: David Gergen, I want to ask you there are two numbers, there is 10 percent, that is the unemployment rate and then there is this number, $1.4 trillion, that's the budget deficit. The graphic - the graphic of the, of that, of that second number, the way we've gone from $300 billion in the bank in eight or nine years to $1.4 trillion deficit is frankly quite staggering, the red ink. That's what the Republicans are screaming about for whatever reason. Which number politically is more important, though, 10 percent or $1.4 trillion?

GERGEN: Well Ken Rogoff has got it exactly right, in the near terms the ten percent. In the long term it is that $1.4 trillion. Ken is co-authored a very important book on this subject about the, looking back over 800 years of economic history, how often after a financial crises you face a second wave of a crisis if you don't manage your fiscal situation well. And so I think he's made that argument eloquently and it's been heard around the world.

But in the near term you've got to get something going. I keep wondering whether there's not ways to redirect some of the original stimulus money which hasn't always been spent well, a lot of unnecessary and seemingly not very productive projects and getting some of that money that could be used as well as some of this T.A.R.P. money, but part of the T.A.R.P. money ought to be used. I think the president's right on this. Part of the T.A.R.P. money ought to be used for deficits but there is a significant bolster that has to go on not only for extending unemployment and helping small business and for state and local government.

If you talk to school superintendents in major urban systems around the country they are facing much more significant layoffs in the coming year then what they've had already because of the seriousness and the growing seriousness of the state and local budget deficits. They have to balance their budgets or fire people.

ROMANS: Yes David you're absolutely right on that. I've talked to a lot of school superintendents who said, look, and our first round of stimulus money that is going to help through next year. But after that, a black hole for us. Would it be better to target, maybe, state and local government aid right off the bat? Or is that politically harder because it doesn't, you want to build a bridge and show that there's job creation that way. Or you want to funnel money to small businesses? Or should we be doing all of these things?

ROGOFF: Maybe all of them, but I agree with David. State and local aid is the first thing. The government, the federal government, they can borrow money. The state and local governments a lot them have in their constitutions, the way they are set up they can't. Their tax revenues are down; they are having to lay off police, schoolteachers, firemen, services being cut back, and hiking taxes. We don't want that in the teeth of a recession, and giving them money is probably the most helpful thing they can do with further stimulus money.

ROMANS: All right. Jobs, leadership, banks, lending, all of these issues clearly coming to a boiling point here. David Gergen thank you so much for joining us. Ken Rogoff, the name of his book by the way is "This Time its Different" thanks for the slug for that one, David Gergen, for Ken's book. Thanks.

If you rack up a ton of debt and you can't pay your bills, watch out. What happens if the U.S. can't pay the bills?

Plus, there is a lot more than talk going on at the big climate change conference in Copenhagen. Why behind the scenes there is a whole lot of money moving around.

(COMMERCIAL BREAK)

ROMANS: Back to our top story now. The showdown looming between President Obama and CEOs of the nation's top banks. Joining us now, Joe Queenn, satirist and author of "Closing Time" and Joann Lipman, founding editor and chief of Conde Nast Portfolio and former deputy managing editor of the "Wall Street Journal."

OK. So the president says we bailed these banks out. Now we need help. They need to start lending. The banks say this is how we got in the mess in the first place, by lending too much money and they are watching all of these moving parts for CEO compensation and they are watching potential financial regulatory reform, Joann. And it doesn't seem like they're coming along too willingly to this new populous party.

JOANNE LIPMAN, FOUNDING EDITOR & CHIEF, CONDE NAST PORTFOLIO: Without question, they have been very late to the populous party. The question, the real issue is that Obama has been grappling since the moment he came into office with the sins of the original bailout for the banks which with no strings attached. You know, I don't think anybody imagined for a moment a year ago that once the banks were bailed out they would fail to lend. That they would sit on those reserves, and so every, you know, I think the banks what they need is some sort of financial incentive that's going to force them or disincentive that is going to force them to lend, because there really hasn't been any way they've been forced into --

ROMANS: Well Goldman-Saks said they will lend $500 million to small business over five years, which many people immediately pointed out was a rounding error or daily float from their trading operation, you know, that a lot of critics said wasn't a lot of money. Is this a showdown at the D.C. corral between the president and the bankers?

JOE QUEENAN, SATIRIST: The National Guard, send them in. Just have, like national guardsmen or better a ranger sitting at every desk saying --

ROMANS: Maybe a Navy seal.

QUEENAN: Perfect. Saying if you don't start lending we're taking you out in the back and just do that all across the country, because there has to be some pressure on these guys to get them to lend money.

ROMANS: Yes.

QUEENAN: Why would -- they can make money doing nothing. So they'll do nothing. They've gone back to being what bangers used to be. They have gone back to being really tight, conservative, not wanting to help anybody, and that's not helping.

ROMANS: They've gone back to wanting to get paid back on their loans, and something the region's bankers do tell me is that they have a lot of people who want money and a lot of people who, some who deserve it, some who they're afraid won't pay them back. They are worried about default. So there is a fine line there.

QUEENAN: But being afraid that they are not going to pay it back is part of being a bank. You're supposed to manage risk and say these three guys will go into the tank and this guy is going to start out wrong, that's the whole deal. The idea of them saying, we're afraid they won't pay back. Then you shouldn't be a banker.

ROMANS: There you go. If you can't pay your bills you're in trouble. If Washington reaches its debt limits, if it's maxed out its credit card. No problem. They simply raise the limit on their credit cards. They vote to raise the debt ceiling as the Democrats are planning on raising the debt ceiling as much as $1.8 trillion. Some leading Senators want to put together a bipartisan fiscal commission tasked with getting the massive deficits under control.

Under the plan Congress would only be able to vote yes or no on the commission's recommendations. Particularly some lawmakers are bristling at the idea of losing the right to filibuster. Is a fiscal commission the right way to get America's financial house in order? We have some big problems; bipartisan fiscal commissions fix everything, right?

LIPMAN: Oh, my gosh. This is exactly the kind of measure you would take if you just want to kick the can down the road. This commission, first of all not only do they have only a yes or no vote, but you need to get 60 percent vote in order to pass anything, and then you know what the commission no matter what, even if it was a brilliant idea with a brilliant concept, the fact is that this is such a large problem and what they're suggesting is really just kind of fixing things around the edges.

QUEENAN: It's also incredibly cowardly, because it's saying, we will let these 60 wise old men, because you know who they're going to get. They are going to get the usual old hacks to come in. Blue ribbon panel, guys who went to Yale you know, guys who went to Stanford and they'll be, purport to be bipartisan but it's a way of saying, well, they told us that we have to do this, because we don't want to take the heat. It's an incredibly cowardly thing to do.

But you know the other thing that I really think is, when I was growing up in the '60s there were these kinds of wise old guys and LBJ would go and talk to these people. I don't think they're out there anymore. I don't think there are any, like, wise people out there. I think all of the smart people we've seen them on, this it. We're stuck. There's not like 60 Paul Volckers (ph) that we can say, Mr. Volcker (ph) can you come in and fix the problems of our society? They're not there. Forget it.

LIPMAN: The big issue really is that we have spent over the last year over a trillion dollars in all these various programs. There's no kind of unifying strategy behind that, and any normal, responsible business would say, if we're spending this amount of money, what are our expectations that we're going to get out of it and how are we going to get our money back? That doesn't exist here. To set up a commission that will work around the edges and say can we make these cuts to Medicare or Social Security, it is just almost beside the point because the problem is so large.

ROMANS: And that is a very good point.

Next, everyone sit tight. We're going to talk about who pays to save the environment, would you pay $40 a month to stop climate change?

(COMMERCIAL BREAK)

ROMANS: Leaders from around the globe are in Copenhagen this week at the U.N. Climate Summit. The goal, to create an international accord to reduce global green house gas emissions. Controversial e- mails leaked frankly, had some questioning in the validity of global warming. But delegates from more than 170 countries are pushing ahead with trying to draft an agreement. CNN correspondent Phil Black is on the ground in Copenhagen with latest. Hi there Phil.

PHIL BLACK, CNN CORRESPONDENT: Hi there, Christine. The first week of this conference open in a way that was considered more colorful and many would have predicted, it opened amid the continuing fallout from the so-called climate gates scandal, those leaked e-mails from climate scientists in England that some skeptics say shows a willingness on the part of scientists to fiddle the figures, that triggered some heated although reluctant defenses of climate science from many corners of this conference center and from there the negotiations really kicked off, and it became clear, very quickly that there is some big differences in the negotiating positions held by rich countries and the developing countries.

And it's largely concerns the same old issues on climate change. That is, to what extent the developed world is prepared to cut its carbon emissions and to what extent the developed world is prepared to pay the developing world, poorer countries, to come to terms with the effects of climate change and then help them develop into low carbon economies. And it's really the poorer countries that have been maintaining the most passionate arguments during the negotiations here because many of them believe that they're not just arguing to avoid an economic hit in the future.

Many of them believe that they are arguing for their very survival. And so they are urging this conference to be as ambitious as possible in cutting carbon emissions and keeping down any future average global temperature rise. Christine.

ROMANS: All right. Phil Black, on the ground in Copenhagen. Thank you, Phil.

We'll follow the climate change money in a minute, but what if you could make money by doing your part to save the environment? CNN's Richard Roth explains.

(BEGIN VIDEO CLIP)

RICHARD ROTH, CNN CORRESPONDENT (voice over): It's collection day in Cherry Hill, New Jersey. But it's the residents who are collecting rewards for getting rid of their recyclables.

HELEN BAKER, RECYCLER: We got some money back from Shoprite, there was some from Target. Did something with movie tickets.

ROTH: The town has partnered with a company called Recycle Bank to boost household recycling through financial incentives and it seems to be working.

ED STUTZ, RECYCLER: Before they implemented the program you might see a few houses with bundled newspapers out front. You might see the old white recycling bins with some cans or bottles in it, but nowhere near, not at any level near, the amount of recycling that is going on now.

ROTH: Each home gets a recycling container fitted with a microchip that identifies the owner. When the bin is picked up, it's weighed by an onboard computer. The amount is translated into Recycle Bank points. They're credited to the customer's account for use as discounts in coupons at participating stores, up to $40 a month.

STUTZ: The rewards are actually quite substantive. You'll get $10, $20 off at Whole Foods based and a specific purchase.

ROTH: The Arbely family didn't need incentives to be green. They are longtime recyclers but now it's easier to be virtuous.

LEA ARBELY, RECYCLER: Prior to Recycle Bank you have to separate everything into bags and some things were not recyclable at all. Now can you put everything in the one bin and you're done.

ROTH: People think twice before tossing recyclable items into the garbage.

RON GONEN, CEO, RECYCLEBANK: If you can align incentives and you can reward people for doing the right thing they're going to be motivated to do more of that.

ROTH: And less trash means more cash for towns that don't have to spend as much for waste disposal. Cherry Hill says since the program started, recycling rates have jumped dramatically.

BERNIE PLATT, CHERRY HILL MAYOR: Well, it saved us last year over $800,000 in landfill and incinerator costs.

ROTH: Recyclebank makes money by getting a share of the cost savings from cities as well as advertising dollars from the companies who reward the recycling homeowners and its good business.

GONEN: It offers our reward partners an opportunity to build a relationship with those households.

ROTH: The collection rewards program operates in more than 20 states and the United Kingdom.

Richard Roth, CNN, New York.

(END VIDEO CLIP)

ROMANS: Next, just how much do you care about the environment? In other words, how much cash would you fork over to save the planet?

(COMMERCIAL BREAK)

ROMANS: In the climate change debate, thousands of groups are spending millions of dollars to enact change, blood change or tailor change to best suit them. Just here in the U.S. there are 2,224 registered lobbyists in the natural, energy and natural resources sector. Many of them working on issues that are directly related to the biggest energy story right now climate change. The price tag $300 million has been spent from January to September lobbying in this sector. Significant amount of money targeted at climate change.

What about you? How much would you pay to stop global warming? If you could. The World Bank, World public opinion.org asked people if they would pay 1 percent of their country's per capita GDP. In the U.S., that say that comes out to about $38 per person per month, 48 percent of you said yes, I'd do that. And 51 percent said, no.

Back with us, Joanne Lipman and also with us today Stephen Moore, editorial writer for the "Wall Street Journal" and author of the new book "Returned to Prosperity." I love talking with you about climate change. Because a lot of eye rolling and hand banging on the table. What's happening there in Copenhagen and are they -- are they --

STEPHEN MOORE, EDITORIAL WRITER, "WALL STREET JOURNAL:" There's a lot of carbon being emitted in Copenhagen and with awful those -- jets -- you can't get a limousine in Copenhagen these days. They're all taken up. I'm surprised about that poll that you just showed. I've seen previous polls where people say, yes, I'm for doing something about global warming, but when you ask, people hey are you willing to pay 25 cents a gallon more for gasoline, or are you willing to see your utility bill go up. Most Americans, at least in the past polls I have said, wait a minute I don't want to pay that price tag.

ROMANS: Do you think that poll is too optimistic?

MOORE: I do. I think most Americans -- look what Washington's told us is this is a free lunch. President Obama said look we're going to create more jobs than we lose, which I think is nonsensical. I mean if we put a major new tax on energy production and manufacturing and energy use in this country it's going to cost jobs opinion so we ought to be at least honest about it, although it is true we've created a lot of lobbying jocks with this.

ROMANS: When you look what's happening on the ground in Copenhagen, it is not just those are the U.S. lobby members. There is also developing countries who have banded together that are lobbying, because they want cash assistant from developed countries. Even with those, they are sniping about who is a develop country? Which is China belonging with a group of small island nations who aren't big emitters? And so there's a lot of posturing and positioning. One thing that I found was really interesting in these numbers even defense contractors are spending money. Why are they spending money lobbying on climate change? Because they want their satellite systems to be used as the official gauge of temperatures. Food companies are lobbying. Everyone knows that there are big moves globally happening on this.

LIPMAN: That is right. And you pinpointed the bottom line which is why I actually also don't really buy the results of that survey. I think that when you're talking about consumers or whether talking about business, there needs to be a financial incentive's that's when both people and businesses will make changes.

MOORE: That's really good point, because I think a lot of people think, with that question was asked, were you willing to have more GDP go? People think of yes.

ROMANS: It might not be their $38. They say 1 percent of American GDP, no problem. Let's spend it.

LIPMAN: And meaningless to it.

MOORE: The big issue I think for Americans and this is the one thing that could really unhinge what's going on in Copenhagen, is the thing that Americans are most worried about is that we do this. Put this tax on ourselves, but that these other countries like China and India don't. The president is saying we've got to deal with them, but you know what? China, when they talk about carbon emissions, what they're really saying is they're going to do what we're going to do otherwise. They're building 60 nuclear power plants as we speak in China because they need cheap energy. I think that's the big issue, jobs. Will this move jobs out of the United States to other nations?

ROMANS: Let me bring up another survey I want to talk to you guys about. The motive behind a greener home. We've seen oh many people try green their home or make it more energy efficient. Recent "USA Today" Gallup Poll said two-thirds of Americans had taken some steps in their house to make it more energy efficient this year. Seventy one percent, they were motivated by mostly saving money. Only 26 percent said they did it to help the environment. It's hard to convince people to help the environment when it's going to cost right out of your pocket.

LIPMAN: That is absolutely a 100 percent true. At portfolio we had looked at sometime last year after the financial crises. We were looking at people who were giving up bottled water. They all cited environmental concern, but the bottom line was, they wanted to save money. Bottled water is expensive. It's less expensive to take from the tap. That's really how we're going have to incentivize people.

MOORE: I remember mom used to tell us we should not drink a lot of water. But you know this issue about, you know we're talking about now, is providing federal subsidies for people. This is what the President mentioned this week. We are going to provide additional tax subsidies for people to weatherize their homes. Cash for clunkers.

Look, I'm all for people saving money and weatherizing their homes. I'm not a big fan of having the federal government paying people to do it.

ROMANS: All right.

MOORE: After all we have $1.8 trillion debt bill that we have -- this stuff is not free.

ROMANS: Right. And we've been talking about the debt all hour. So that's an incredible point.

Well we're going to hear more about Copenhagen in the days ahead and clearly climate change debate. Thank you so much Joanne Lipman, and also Stephen Moore, the "Wall Street Journal" editorial page.

LIPMAN: Thank you.

MOORE: Thank you.

ROMANS: Next, be very, very careful what you choose to put on the Web. There's no such thing as Internet privacy.

(COMMERCIAL BREAK)

ROMANS: Another look behind the biggest headlines of the week. Joining us now, Joe Queenan, a satirist and author of "Closing Time" and Joanne Lipman, the founding editor and chief Conde Nast Portfolio and former managing, deputy managing editor of the "Wall Street Journal."

I want to talk about foreclosures quickly. Because foreclosure filings fell by 8 percent in November, that is the fourth month in a row of improvement if you can call it that in the housing markets. American homeowners will have lost nearly $500 billion in home value by the end of this year.

Again, that's an improvement over last year when the home values plummeted by I think 3.6 trillion dollars. Is the housing crisis behind us though? I look at these numbers and I think they're going in the right direction but it's still brutal out there. Almost 4 million people will be thrown out of their houses this year.

LIPMAN: There is no way the housing crisis is behind us. Not when we need to create another eight million jobs to climb out of this hole, while we still have double digit unemployment, the housing crisis isn't anywhere near its end. This is a record number of foreclosure filings this year, after a record last year. And even though the numbers are trending in the right direction, that's when you're looking at it month by month. It's kind of like comparing it to Armageddon.

ROMANS: Yes.

LIPMAN: It's a little better, sure, but if you compare it even to a year ago where we were in the depths of the crises, its still, the number is far worse.

ROMANS: That's why so many people say, oh, this is recovery? I don't feel a recovery.

QUEENAN: Well first of all, it's not 4 million getting thrown out of their house. It's 4 million and 1 because you didn't include my son.

ROMANS: Getting thrown out of your house?

QUEENAN: He is getting thrown out of my house but first of all, talking a housing market, is ridiculous. There's no national housing market. The housing crisis passed where I live. Great. New York. Suburbs of New York it is passed in Philly, it is passed in Boston. The housing crisis could last ten years in other parts of the countries. The housing crisis in southern California, in places, parts of it in the southwest, the southeast, that crisis is nowhere near -- I think one of the big problems that we have as a society is we still can't face up to the fact, no. We're not near the end of this crisis.

ROMANS: Right.

QUEENAN: No, we are not.

ROMANS: Oh, we want it to be so badly.

QUEENAN: No, we are not.

ROMANS: All right. Have you ever aired your dirty laundry on the Internet? Don't expect any sympathy from Google. Eric Schmidt, CEO of the Internet giant suggested during a CNBC special this week that you're better off changing your scandalous behavior than complaining to his company. He told viewers if you have something that you don't want anyone to know about, maybe you shouldn't be doing it in the first place.

Everything -- just ask Tiger Woods is available, text messages, E-mail messages, your browsing behavior, divorce lawyer I know go through browsing behavior like crazy on the home computer to see where the errant spouse may have gone. If you don't want the world to know about it, maybe Google's right. You just shouldn't be doing it.

LIPMAN: I actually think Eric Schmidt has a point here. OK. At risk of getting attacked, I mean honestly I think he does. I mean me personally, if browser behavior and the government's ability to tap into that prevents another 9/11, I'm OK with that. You know? Look, Google has a massive amount of information. I actually think our privacy is almost the least of it. They have so much information. I actually visited with Eric Schmidt a couple months ago. One of the things that he was talking about, is they actually have enough information but will not use it, to predict the stock market. They --

ROMANS: Whoa!

LIPMAN: They're not going to, but you know, they have so much information coming through their servers. Our personal privacy is a piece of that.

ROMANS: There is so much information.

QUEENAN: Privacy.

ROMANS: My financial information is in 4,000 places. So is yours.

QUEENAN: You know some of the other search engine people though could say that we will immediately destroy any record of anything that you've searched or anything that you have done. So that would be like a competitive basis for going after Google.

ROMANS: Maybe.

QUEENAN: You know, because you could just you say, well we just trash it immediately. If the government asks for it, we won't give it up. I think it would be interesting at some point when something is turned over to, would you if wasn't the United States government if it was, for example, the Iranian government or the Chinese government, would you want them to have access to all of this information? And the answer is, no.

ROMANS: Right.

QUEENAN: So people have to really serious, something bad will happen eventually. Some information will be turned over to the government and it will hurt somebody who didn't deserve to be hurt. Could be a Republican, a libertarian. Something like that could happen.

ROMANS: There is just so much information and it is interesting because I was talking to Chrystia Freeland from the Financial Times on this program last week and she said that statistics that is what you should have your kids studying in college that is what you should get degrees in, managing data. Because there is so much data we don't even know how to sift through it all, that is where the future is.

LIPMAN: I told my son who is a junior in school.

ROMANS: Numbers and information and how to analyze it. So there you go.

That is great. Liberal arts people, beware.

LIPMAN: A major.

ROMANS: OK. Stick with us folks, Tiger Woods is everywhere. Newspaper, magazines television shows. Tiger's troubles created a big business and big buzz. Coming up, we will tell you the one place you won't be seeing Tiger Woods.

But first, sometimes luck and business go hand in hand. After a string of bad luck one Connecticut restaurateur has decided not to leave the future of his business up to fate. CNN's senior correspondent Allan Chernoff with this week's "Turn Around."

(BEGIN VIDEO CLIP)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice over): How long has this place been around? Four hundred years?

Shawn Daigle thought he had a sure thing. Avon Old Farms Inn was a restaurant with a long history and a booming business. But shortly after he bought the Connecticut eatery in 2005, the sure thing started to look a bit shaky. Tragedy struck, an 18-vehicle accident killing four and injuring 19 just outside his door.

SHAWN DAIGLE, OWNER, AVON OLD FARMS INN: It was like a black cloud that was over this business.

CHERNOFF: Soon afterwards, a second accident at the same site prompted state construction of a 700-foot truck ramp almost on top of his restaurant.

DAIGLE: Always stay positive. You have to stay positive, with your employees, with the town. No one wants to hear anyone complaining. There are a lot of things to complain about, but frankly, it doesn't go away.

CHERNOFF: Couple the unattractive ramp with the down turn in the economy and business dropped off nearly 60 percent. Suddenly, the old inn was bleeding red ink.

DAIGLE: Going into a tough economy not at the peak of your game, the down turn economy actually impacts you significantly more.

CHERNOFF: So Daigle bought back, scaling back his high-priced fine ding menu in favor of lower-priced comfort food.

DAIGLE: Fine dining has a unique stigma that is associated with it. It's an honor that we are known as fine dining, but we are trying to hit a different price point and get you good food.

CHERNOFF: And getting customers in the door is key. The restaurant lowered corporate package rates and started hiring local bands on weekends.

DAIGLE: If you lower your price point and your cost is in line, you need more volume, you need more people coming in.

CHERNOFF: And they have started coming in. Business has tripled from its low.

DAIGLE: There is a high expectation, again, having a 253-year- old business and a reputation.

CHERNOFF: A reputation many customers haven't forgotten.

Allan Chernoff, CNN, New York.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROMANS: All right, back with us, satirist and author, Joe Queenan and Joanne Lipman, founding editor and chief Conde Nast Portfolio and former deputy managing editor of the "Wall Street Journal."

We saved the best for last. Tiger Woods, all over your TV these days and he is not playing golf. And his advertisements have all but disappeared. According to media tracker Nielsen, the last time a commercial featuring Tiger Woods appeared on television was November 29th. Still, Tiger's sponsors including Gillette, Nike, Gatorade, they have pledged their support for Woods and opted to retain the golfer as a spokes person. Brands including AT&T, Accenture and others have not yet issued comments about their sponsorship of the golfer.

I was in a Ft. Worth Airport where there was a huge jumbo Accentor advertisement of him last weekend where he is in the rough and it says, "Success is never an easy road." Every person who walked by it burst out laughing. You wrote tips for him in "Golf Digest" Magazine.

QUEENAN: A bunch of writers wrote, and I wrote this about three months ago. I said that the only thing that Obama could learn from Woods is how to golf because he is a terrible golfer. I said about Woods, he should lighten up. I didn't think he would do that. I should show he has the common touch, he should do something funny. God, I mean, really, you know, I didn't mean it that -- he didn't have to lighten up that much. It's out there right now.

LIPMAN: Americans love second acts, right?

ROMANS: And redemption.

LIPMAN: And not only that this is such a common scenario. I used to at the "Wall Street Journal" many years ago I use to cover advertising. So we have seen this again and again. Everybody from Madonna losing Pepsi to O.J. Simpson of course, he was not redeemed. But I will tell you one who was, Kate Moss. Kate moss lost almost all her endorsements after there were photographs of her allegedly doing drugs. About two years later she had all that back and more. She had more endorsements after than she did before. I think the key is the common denominator is for these celebrities, if they continue to achieve, people will have a short memory and he will be able to come back again.

ROMANS: Joe is saying no.

QUEENAN: There are, like, 600 women, he has got nine at least right that they are talking about. No. He's not coming back from that.

ROMANS: We will leave it there. Joe Queenan thank you so much. Joanne Lipman, as always never enough time to get all the fantastic comments. Thank you very much. You might have noticed that my friend Ali Velshi is not here today and I will tell you why. He is gearing up to hit the road next week on the CNN Express.

(BEGIN VIDEO CLIP)

ALI VELSHI, HOST: We're hitting places where they don't expect CNN to be there. They don't expect any big media to be there.

UNIDENTIFIED MALE: We are in a farming community. It's pretty bad.

UNIDENTIFIED MALE: We are all afraid that we are going to loose something.

VELSHI: You can't get some of these stories unless you go to them actually being out there and talking to people and meeting people is such a great feeling. Sometimes they tell us stories because we have a camera and sometimes because we are standing there.

UNIDENTIFIED MALE: This makes the electric car feasible.

VELSHI: It's not about people setting up to tell their stories. It's about us showing up and asking them to tell their stories. Is there anybody here who has learned that they are going to lose their job? I'm going to go out there and I'm going to work on those stories and I am going to come back to these towns and say, did I answer those questions? Did I help you understand the issue that is so important to you that you asked me about one day?

(END VIDEO CLIP)

ROMANS: Ali Velshi on the road again.

Thanks for joining us for YOUR MONEY. You can follow Ali Velshi and his trip and me and all my reporting at Facebook and twitter at Christine Romans and at Ali Velshi. Make sure to join us every week for YOUR MONEY, right here. He will be here next week I promise. Saturdays at 1:00 pm Eastern and Sundays at 3:00. You can also log on 24/7 to CNNMONEY.com.

Have a great weekend everybody.