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YOUR MONEY

Analysts Discuss Debt, Deficits, and the Recent Tax Deal Between President and Republicans; FDIC Chairman Discusses Federal Debt; Some Small Businesses Succeeding; Networking At Holiday Parties May Be Way To Land New Job

Aired December 11, 2010 - 14:00   ET

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


ALI VELSHI, HOST: We may have a compromise, but where is the clarity? President Obama's tax deal has many Democrats wondering where the leader of their party really stands and if it's the right deal.

Welcome to YOUR $$$$$. I'm Ali Velshi.

In a moment, I'll break down exactly what this tax deal means for you or even if it will move forward. First, I'm joined by CNN political analyst Gloria Borger.

Gloria, the Democrats, more Democrats than Republicans voted no to the plan that was presented by the president's own debt commission. We're done talking about the tax deal just yet. The latest poll shows that 40 percent of Americans support how the president is handling the economy, and now there's this war of words and votes with members of his own party after striking this tax deal with the Republicans.

GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Yes.

VELSHI: Gloria, does this president have a clear economic message? And if so, why would members of his own party not get behind him?

BORGER: I think his proper was for the midterm elections, and that's why he lost control of the house, is that he didn't have a clear economic message. People felt that he wasn't focusing as much as he needed to focus on jobs and the economy.

And now after the election, what the president is trying to do is to say, I heard you, I am now focusing on jobs. And what he is proposing along with Republicans amounts to an almost $900 billion stimulus package, which Republicans have now signed on to. My feeling quite frankly is that the Democrats ought to understand they're getting a lot out of this deal and go with it.

VELSHI: Roland Martin is a CNN contributor. Roland, listen to President Obama defending the tax deal. Listen to this.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The bipartisan framework that we've forged on taxes will not only protect working Americans from seeing a major tax increase on January 1st. It will provide businesses incentives to invest, grow, and hire.

And every economist that I've talked to or that I've read over the last couple days acknowledges that this agreement would boost economic growth in the coming years and has the potential to create millions of jobs.

(END VIDEO CLIP)

VELSHI: Roland, on this show you have made the point that extending the tax cuts for families making $250,000 and more would not help job creation. So are you saying that the president is wrong in what he just said?

ROLAND MARTIN, CNN POLITICAL CONTRIBUTOR: No, I was repeating what the president was saying for the last two years. The president, himself, has been making that very argument that we should be putting the money in the hands of the middle class and folks who are in the lower class because they are likely the ones who are going to spend more.

Now all of a sudden the president changes his tune because Republicans made it clear they were not going to budge at all from that. In his news conference the following day he made the comment about this whole notion of they say this as the Holy Grail. So therefore, he decided to go along with the short term extension of the tax cuts.

I heard Gloria. One of the reasons Democrats are so angry is because of the estate tax provision. Remember the House earlier passed the extension in terms of the certain cap -- the president in the negotiations raised it to $5 million and $10 million. Democrats said where did that come from? That's why you see this anger between house Democrats and the president.

VELSHI: Right, there's some sense that the house Democrats weren't in on the game. And they're curious who was negotiating for Democrats.

Let's bring Stephen Moore into this. He's an editorial writer for the "Wall Street Journal." I still haven't gotten a straight answer out of Stephen. Tell me again as specifically as you can, other than the fact that it makes everybody feel good, how extending these tax cuts to the top two percent of earners, those who earn more than $250,000, ends up creating jobs?

STEPHEN MOORE, EDITORIAL WRITER, "WALL STREET JOURNAL": Well, let me just first say that my friend Roland has it half right about why this happened. It's not just because Republicans won the election. The other thing that happened in the last week was we got that horrendous 9.8 percent unemployment rate. I think that's the trigger for why this deal had to get done. I think the White House correctly panicked that what they've been doing hasn't worked very well. Ali, I've tried to explain this to you many times. Here's the point. When you talk about those people in the top two or three percent, if you look at the statistics, a good percentage of those people are small business owners, operators, or investors, the people who are the employers in the country.

The point that I've made and many Republicans are making is if you want to create jobs, you can't take money out of the hands of businesses. Have you to give them an incentive to invest and to hire workers.

By the way, it's very rare, Ali, as you know, that I agree with Larry Summers and Barack Obama and Joe Biden, but on this one I do. I think if we get this deal done, I think this will provide a lot of juice for the economy in 2011.

And I think Gloria's right. If they get this deal done, I think it enhances his chances of being reelected in 2012.

VELSHI: The issue here is not -- I don't think that it's Stephen agrees with them, the criticism is that the president and his advisers, they all rolled.

MARTIN: Yes.

BORGER: Well, I don't think they got rolled. I don't think they got rolled. If you look at where the money goes in this package, it goes to -- I mean, the Democrats got the extension of tuition tax credits, the earned income tax credit. They got the middle class tax cuts.

So if you want to divvy up the numbers, actually, the Democrats actually got more of what they wanted, and the Republicans got what they wanted.

The big thing here is, and this is for phase two, what happens next on deficit reduction. Republicans who vote for this are complicit in adding to the deficit, so the question really is, do you do some big kind of tax reform package that reduces the deficit?

MARTIN: They did get rolled. They got rolled in the sense when the president talked about this whole notion of maintaining a purist position. All throughout the midterm elections, you heard the president talk about "I will not extend the tax cuts for those above $250,000." That was a hard line position at the took. Republicans, they're --

BORGER: Then there was an election.

MARTIN: I get that there was an election, but also we hear the Republicans talk about principle, this is where we stand. Democrats are saying, why did you give in? The reality is, the White House blinked. The Republicans remained steadfast. That's just the reality.

VELSHI: All right -- MOORE: I do think this is a change of strategy. I do think the first two years was a stimulus plan toward spending. This is more a traditional Republican stimulus toward cutting tax rates.

But I'll say this on the deficit issue -- if we grow this economy, if we start getting jobs back, I predict next year we'll have a lower budget deficit, not a higher one, because the reason the deficit is through the roof right now, is the economy and people aren't working.

VELSHI: We'll keep talking to you and follow this closely with you. Gloria, thanks, Roland, Stephen stick around. If this deal goes forward, taxes won't be going up in the new year. But you could be stuck with a much bigger bill when it finally comes due. I'll explain on the other side.

(COMMERCIAL BREAK)

VELSHI: Reducing the deficit isn't that complicated. You just have to spend less and take in more tax revenue. President Obama's proposal extends tax cuts for everyone for two years, extends benefits for the long-term unemployed for a year.

Ken Rogoff is a Harvard professor and former chief economic of the IMF, the International Monetary Fund. Ken, this tax proposal could cost $800 billion, maybe more. You've warned us before of a looming debt crisis.

Senior White House Economic adviser Larry Summers went even further. This is what he said. He said, "If they don't pass this bill in the next couple weeks, it will materially increase the risk that the economy would stall out and we would have a double dip."

Ken, first of all, is what he's saying true? Does that make sense? And what happens if we don't go forward with this?

PROF. KENNETH ROGOFF, ECONOMICS, HARVARD: I think we need something like this. There's no question unemployment is hanging at a high level. We need some stimulus. I think it provides clarity and confidence.

But you're absolutely right. We have to pay for it down the road. It is not a free lunch. Cutting taxes does boost the economy. It doesn't cost as much as most government spending, but there's no free lunch.

VELSHI: Ken, it does kind of feel like everyone punts this one. Everybody does what's politically expedient at the time and then doesn't deal with the fact that the deficit is looming. This has gone from an issue that hawkish conservatives were concerned about into an issue that everyone's worried about now because nobody seems to have a solution to the deficit and to the debt.

ROGOFF: Frankly, I thought the Bowles-Simpson commission that came in with the report about what to do with the deficit had good ideas. You have to get rid of a lot of the deductions, make it a lot simpler, lower the tax rates. That way we can have a higher tax and not mess up our economy as much. That's the way forward. The president said it recently.

MARTIN: Ali, the perfect way to get nothing done in Washington, D.C., is to create a commission.

(LAUGHTER)

VELSHI: That's true.

MARTIN: We already have a commission. It's called house and Senate committee. It's called the congress. So this is one of those wonderful ideas that people say, thank you so much for this hefty, weighty report, and we'll absolutely ignore it.

VELSHI: Yes, I worry about it becoming another 9/11 commission.

MARTIN: Right.

VELSHI: The reality is you do sometimes need people, Roland, because Congress got us into this --

MARTIN: But here's the deal -- there are members of Congress on the deficit commission. Here's the fundamental problem here, we know that the three biggest areas of our budget, Medicare, Social Security, and defense. The reality is Republicans do not want to touch defense. Democrats do not want to touch Social Security or Medicare. So we're back at the standoff.

Also, look at the tax cuts. It's going to increase the deficit, but Republicans say, well, there's no sweat, we're cool with that. Everybody -- nobody likes pain. And that's the problem when it comes to our deficit.

VELSHI: Let me ask Stephen about what you're saying. Nobody wants their taxes to go up at the end of the year, is it more important for this administration to boost the economy in the short term or to take steps to reduce the deficit in the long term? This deal the president has made with Republicans may not do anything, may not do much to reduce the deficit in the long term.

MOORE: Let's face it, the number one issue to the American people, myself, you, everybody watching this show right now is jobs. How do we get those 15 million people who don't have jobs back into the workforce? So that's got to be priority number one.

To my friend Roland, what I would simply say is this -- we have a new Congress coming in January. The Republicans take control of the House, let's see what they do. I think you're going to see very significant spending cuts. It's going to be a change of strategy now. We're going to see across the board deductions in the amount of spending not just for the domestic programs, Roland, that you like, but I think defense programs are going to have to come under scrutiny as well.

And then we have to tackle those big entitlement programs starting by the way, we're going to have to probably repeal the Obamacare health care bill. We can't afford to put 30 million more people under the government insurance system.

MARTIN: Operative word -- "come under scrutiny." Scrutiny is an --

(LAUGHTER)

Stephen, you can try --

VELSHI: I'm going to use fantastic graphics to bring this back. Let me remind you what was in this tax proposal that is under scrutiny at the moment. Democrats are not happy with it.

Basically, this tax proposal includes extending tax cuts for everyone. Not just those families earning $250,000 or less, everybody. It extends unemployment benefits and the ability to apply for those benefits for awhile. It does not help the 79ers and 99ers, people who are completely exhausted of their unemployment benefits.

It creates a bit of payroll tax holiday, reduces the amount you are paying, that employees pay for Social Security from 6.2 percent of their income to 4.2 percent of their income.

Let me ask you this, Ken. In the wake of this great recession, which we hope we are in the wake of, by the way, can you expect Americans to prioritize the country's debt over their immediate needs? This is ultimately what it is. We're talking about something that's going to hurt us and affect us in the future versus right now.

I just want to show you a poll that was just taken very recently. The support for extending the tax cuts for all Americans for two years, all Americans, 66 percent, two-thirds. Support for extending unemployment benefits also two-thirds. Those two things do different things.

ROGOFF: Well, I mean, there's no question that the economy needs the help now. Interest rates are very low. We're not paying like Ireland, Greece and Portugal and Spain at the moment. We will down the road if we don't do something.

The reason we're not paying like them, the rest of the world, crazy or not, they think will address the problem eventually. They think Americans are inventive. We'll come up with an idea.

I really think we need the stimulus now. We're just in no position to go through with big tax hikes. The economy is not growing the way the White House had hoped at one time. The Federal Reserve is at its limit. I certainly don't want to see trade protectionism. I really think this was a pragmatic decision by the president.

And while the liberal Democrats are wining, but they lost the election. If they wait, they're not going to get a better deal.

VELSHI: Hold that thought. Roland you're going to take us into the next block. MARTIN: OK.

VELSHI: We'll have more in a moment.

Plus, banks -- banks were at the center of the financial crisis. Sheila Bair was at the center of watching officer those banks. What the FDIC chairman has to say about the health of your bank right now on this show. Stay with us.

(COMMERCIAL BREAK)

VELSHI: OK, lots of debate about what the right thing to do is. What my viewers want is someone to help solve these economic problems.

MARTIN: I have no faith in political leaders or the American people doing the tough choices. Here's what I mean. We saw it this year. Democrats felt that health care was a vital issue. What ends up happening, massive losses when it comes to the election in November.

We know that immigration is a critical issue in this country. Republicans do not want to touch it out of fear of ticking off the Tea Party. Democrats want to touch it, but fear of failure, and they don't want to anger Hispanics.

When it comes to the deficit, when it comes to cuts, the hard cuts, we don't -- we always say, not in my backyard. Cut the other guy's stuff, not mine. That's why we never get anything done. And no politician wants to face the prospect of losing office by making the tough choices.

MOORE: You know what, though. We have in Ken, one of the top economists in the country. I'll pose this to him. We have to get the economy growing faster than the debt. So we don't end up like Ireland, and Spain and Portugal.

And if this package works, and we get back to four or five percent growth, then I think you start to see revenues pick up, the GDP grows, and then the debt isn't quite as big a problem as it is right now. Would you agree?

VELSHI: We'll hail you as the hero of this show if that ends up happening. Ken, what's the likelihood?

MARTIN: It's not a panacea, I think it's strong medicine we need now. Unemployment is just at a horrific level. Things are really tough. But we have to do something over the long run. This isn't going to go away. We spend a lot more than we tax.

And Roland's right, I mean, the voters are ultimately to blame. We're voting these people in. If somebody tries to do something different, we vote them out.

But I do think the day of judgment will come when interest rates will start going up. You just have to watch what's going on in Europe. Not just the smaller countries, Germany and France are getting hurt too. I think we will do the right thing. Winston Churchill famously said Americans do the right thing after trying everything else.

MARTIN: Also, Ken, Americans, we are a reactionary society. We do not want to go on the offensive. We have to wait for a critical mass to act.

And Ali, I can't believe what we just heard from Stephen. What he basically said was, let's hope it gets better. Even if the economy improves, even if unemployment goes to four or five percent, the debt is still too high. A bad economy --

MOORE: I agree with that.

MARTIN: No, you said, it's not going to be that bad.

MOORE: Let's see what you have to say come January and February when I think Republicans are going to make those tough cuts. And Ali, my prediction is Roland is going to be the first one who's going to be --

(CROSSTALK)

VELSHI: I invite you all back to continue this conversation right here. We will keep a close eye on it, thank you so much, Ken Rogoff, Stephen Moore. Roland, you stay right there.

MARTIN: All right.

VELSHI: Next, she's on the front lines safeguarding your bank account about she says extending tax cuts before slashing debt is a big mistake. One on one with Sheila Bair, next.

But first, in this week's turnaround, Stephanie Elam looks at one woman's brewing passion for her coffee business.

(BEGIN VIDEOTAPE)

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: I met Lucy Valena in July 2009. She was determined to take her mobile espresso catering company from a cart to a corner coffee shop.

LUCY VALENA, VOLTAGE COFFEE: I'm going to keep working at it, I'm not letting up, Boston. I don't care.

(LAUGHTER)

ELAM: And now, welcome to Voltage Coffee and Art in Cambridge. To make her dream a reality, she used her catering funds and worked at a second job at a coffee shop. Then she found a venture capital firm which gave her a $150,000 loan. By networking with her biz savvy clients, she found a contractor and built her clientele.

VALENA: What's so cool about this place and how it became a brick and mortar location from a catering service is that I already had a name for myself, before I even opened the door. Voltage Coffee already meant something to people before we opened.

JIM KOCH, FOUNDER, SAM ADAMS: This is the first time I've been in here.

ELAM: Sam Adams founder Jim Koch is seeing how his help paid off.

KOCH: Welcome to small business. It's only an 84-hour beak.

ELAM: Koch awarded Valena $4,000 to start her catering cart through the Sam Adams "Brewing the American Dream" program, which helps small food and beverage businesses get funding. He says he understands Valena's brewing passion.

KOCH: Lucy is the quintessential turnaround. When I first met her, she was pushing a cart around. She had a great idea, she had passion. And with just a little bit of a loan, she was able to make that dream this beautiful coffee shop.

ELAM: Now with one successful shop, she's hoping this is just the beginning.

ELAM (on camera): So basically, you still --

VALENA: Absolutely not, it's just beginning.

ELAM: Stephanie Elam, CNN, Cambridge, Massachusetts.

(COMMERCIAL BREAK)

VELSHI: Taxpayers could be getting an early Christmas present in the form of 2011 and 2012 tax cuts, or at least the extension of existing tax cuts.

But as we have been discussing, there are some very tough decisions to be made about reducing the deficit and ultimately the debt. Deficit hawks warn that the cost of doing nothing or even doing what the president and Republicans have compromised on may be another financial crisis, maybe bigger than one that any of us have ever seen.

One person concerned about the deficit is Sheila Bair. You'll know her as the chairman of the Federal Deposit Insurance Corporation, the FDIC, but also because she's someone who's been selectively vocal about other issues beyond that of just banking in the United States. And we appreciate that, Sheila. You're not like some in Washington always talking about stuff. When you talk, people listen.

Let's talk about the deficit. You are concerned that we really should have started working on this deficit now?

SHEILA BAIR, FDIC CHAIRMAN: Yes, we really do need to get a plan, a critical plan in place in this Congress. It can be phased in over the next several years. But I think it's important for the international community and particularly the investor community to understand that we do have a sound path to fiscal responsibility. We don't have that right now. VELSHI: It is my sense in a Americans would embrace a tough path if they knew where it led.

BAIR: Yes.

VELSHI: Right now we have a lot of rhetoric out there, we have people saying many this deficit, we're passing on to our grandchildren, which I don't thing means anything to most people, and others saying you can't tackle the deficit during these economic times.

We've had the commissions offering some hard choices to reign in our long term deficit. Which of those choices do you think we need to consider embracing?

BAIR: Well, I think it needs to be a credible plan. I think the Bowles-Simpson plan is a credible plan. I think it's a good example of how bipartisan agreements could be achieved.

There are other plans. Paul Ryan has a good plan. That might be more to the ideological preferences of some. But I think that's not really the question. The question is where can we found common ground in the middle to approve a package.

So I think it needs to be evenly distributed, fair, credible and real. I think the deficit commission, the recommendations are very credible and certainly ones that we could support. But again, it's just important that this be dealt with in my meaningful way.

VELSHI: They're offering up talking about reductions in mortgage interest deductibility. They're talking about Social Security. increasing the age at which you get that. They sort of offered something for everyone to be angry about.

(LAUGHTER)

BAIR: That's right.

VELSHI: Should we be really saying this is realistic? We need to move in this direction?

BAIR: I think we should, and I think there's several area where's there's already good support. For instance, getting rid of all the special deductions and exemptions, trying to get rid of most of that and lowering everybody's rates and picking revenue in the process. I think it would be a tremendously beneficial to tax fairness and equity as well as long term economic sustainability. So things like that have a good bipartisan support already.

Many of the changes in Social Security, I think, even public polls are showing that people would support removing or raising the cap on the income that is subject to the FICA tax now. So there are a number pressures that already have a good support. And hopefully they can put together a package that's at least within the $4 trillion ten- year range, which is what Erskine-Bowles did propose. But it needs to be done. And there could be real world ramifications. It's not just the logic debate about whether ramifications matter. There could be real costs for consumers, the government, for banks if this isn't dealt with in meaningful credible way in a fairly short term.

VELSHI: One of the things you gained a lot of acclaim for is where we didn't think everybody had a handle on what was going on. You certainly had your finger on the pulse of banks in this country. So I assume that you and your colleagues have the best sense of what's going on in banks.

Have you lost any sleep over Julian Assange and WikiLeaks talking about having enough information to bring down a bank or two?

BAIR: Well, you know, listen. I think it's always important for everybody to understand deposit insurance and understand if you're fully insured, you have nothing to worry about. And we have a special website, myfdicinsurance.gov, that explains our rules.

I think if you want to learn more about banks, there are reliable sources of information. Our websites have a lot of information about banks. There are credible analysts out there. So I would look for reliable information about the banking sector and understand if you're below our insurance deposit limit you're fully insured no matter what.

VELSHI: You think it's likely that there are information about banks that you don't know.

BAIR: No, I don't. I said this before. I can't imagine what could be out there that they think would have such a big impact. It sounds like it's old information, whatever it is. I have to tell you, I just ignore that kind of thing. I think people are trying to stir up trouble. It's not particularly constructive. I would ignore it, and I would hope other people would do the same. Look for credible sources of information if you're interested.

VELSHI: Sheila Bair, always a pleasure to talk to you.

BAIR: Nice to talk to you, Ali.

VELSHI: Sheila Bair is the chairman of the Federal Deposit Insurance Corporation, the FDIC.

Imagine living on $190 a month. Now imagine doing that in retirement. This actually could become a reality for Americans if things don't change. I'll talk to you about it afterwards.

(COMMERCIAL BREAK)

VELSHI: Watch enough TV, read enough blogs, and you'll think that taxpayers are always getting a raw deal. How about a $12 billion profit? Roland is back, and Lex Harris joins us as well. Lex is the famous managing editor of CNNmoney.com. He's where we get a lot of our good reporting from. Here's the deal. We all remember when the banks were in big trouble back in 2008. The government entered with the controversial bailout to prop up a number of financial institutions. You'll know it as TARP. Citigroup in particular ended up with $45 billion.

The government ended up with an enormous stake in this publicly traded company. This year the Treasury Department announced it's selling its remaining shares in the Citi and will wind up with $57 billion as a result. We spent $45 billion to bail out Citi and $57 billion came back a couple years later. That's a nice $12 billion profit for tax payers.

General Motors no longer Government Motors. A profit was turned on Citi. So looking back on it, was the bailout good business? I'll start with you, Lex.

LEX HARRIS, MANAGING EDITOR, CNNMONEY.COM: You know, it's getting a lot harder to hate this bailout. I remember going back at the beginning of the year, they were forecasting a $100 billion loss from TARP, then in the middle of the year it went down to $66 billion, now we're at $25 billion. It's hard to see now what the problem is. And in fact you're beginning to see a lot of very positive signs in the financial sector.

VELSHI: What do you think, Roland?

MARTIN: This was an absolutely good idea but it's not just because of the profit from the sale of Citigroup. Remember Ali, you were on TV every day, Mr. Doom and gloom, stock market dropping 500 points. And people were freaking out because of their 401(k)'s.

The Dow goes down to 9,000 points or so in March. All of a sudden, it's back up 2,000 points. We stabilized those 401(k)'s, now all those pension plans. And so the market was able to get itself together and be able to move forward. That to me was the most important thing with TARP and the bailouts because it was needed.

And for all these people who are complaining, understand, if we didn't save General Motors, more than 1 million people would have been out of a job. Not just the people at the plants -- the parts makers, the people who own homes in those areas, this thing would have been crazy, had they not taken action. It was a smart move -- tough, but smart.

VELSHI: Lex, was it a smart move or a lucky move?

HARRIS: Well, it was definitely a smart move. It's really tough. You couldn't imagine where we were two years ago, that we would be where we are now -- relatively stable financial markets. It's amazing to me given the profit figures we're seeing that it doesn't square with the public sentiment. Everybody still hates TARP.

VELSHI: That may be the lesson to us all. It looked like rewarding the very people who caused the problem at the time. In the end it may have worked out well.

HARRIS: Can I make one other point on this.

VELSHI: Yes.

HARRIS: There are still -- it's still important to make the point, it's not like a poker game where you can take your chips can and leave with your profit, right, because it's very possible that the full costs of the bailout is not yet known. The government did a lot of stuff, flooded the system with money to make sure that we would make money on this deal. And so we don't know what the outcome of that's going to be.

VELSHI: As you and your folks at money.com always point out, we attach ourselves to TARP, but it's trillions of dollars that was put in by the fed and other ways. Good point.

All right, living on $190 a month -- that will be a reality for many Americans who are currently in their 50s. According to a new survey, people are not saving for retirement, even when you factor in Social Security. As a result, 72 percent of those surveyed expect to work through retirement, which is not the world's worst thing. Of those folks, more than half say they will have to work while the rest say they want to keep working. And obviously we can do that now.

Officially the economy has been recovering since June 2009. We're well past the one year -- we're at a year and a half in this recovery according to experts. Businesses are doing much better, but the fact that so many people simply won't have enough money to retire, is that a sign that the recovery's failing to reach individuals? Or is this the way we've been behaving for years?

HARRIS: It is the way we've been behaving for years, and it's unfortunately only getting worse. And, you know, I view how prepared people are for retirement is the ultimate yardstick of where we are. And you can talk about record profits for companies, and can you talk about a stabilization of financial markets. But the kind of numbers we're talking about, that people are going to retire on, it's very troubling.

VELSHI: Did we wake up after this financial crisis? Are people going to realize they don't just have a house that goes up in value?

MARTIN: I've said this before that one of the values I believe, no matter how painful it is, is that it's forced Americans to go back to old school priorities. That is, if I can't afford it, I can't pay for it in cash, I'm not buying it.

So look, I've been there, I filed for bankruptcy. I almost lost my house. And even all the money I'm making right now, I paid for my car, I'm paying my house off. I don't want any debt. This whole notion that we have to carry get debt is crazy.

I'm hopeful that people have realized we can't just keep buying and buying and buying and second home and jet skis and all -- multiple vacations, because you have to think about the future. My parents are retiring at 63 and living in my home. And so I'm even telling them what they can't buy so they can manage their money right now. I'll say, no, I'm your son, I'm thinking about where you're going to be in the next seven to 10 years. Forget it right now.

VELSHI: We have two of the best dressed guys in the news business.

MARTIN: I have Johnny Cash look going.

(LAUGHTER)

VELSHI: You do look like Johnny Cash today.

Lex Harris, always great to see you. For all of you out there, Money.com is a treasure trove of all of this kind of information everywhere from personal finance to investment. Check it out on money.com.

Parents always ask me, what should my kid be studying to make sure they can get a job when they get out of school? I've done some research, and I'll tell you on the other side.

(COMMERCIAL BREAK)

VELSHI: Parents ask me all the time what their kids should study in school in order to land a new job after graduation. My answer is accounting.

Here's why -- accounting jobs are expected to grow between 22 percent between 2008 and 2018 according to the Bureau of Labor Statistics. That translates to almost 280,000 new jobs.

Accounting is about money. Money is everywhere. As an accountant you don't only keep the books. You might advise companies on the best ways to use their money. In an increasingly globalized economy there is greater demand for accountants with expertise in international trade and mergers and acquisitions.

A good job like public accounting for example requires a four- year degree and an advanced degree, or a CPA designation. One thing about accounting companies is they're very, very in touch with businesses. They have the pulse of business in America, so we thought we'd turn to the head of a major American accounting firm to get some sort of sense of what accounting, what business is going to look like through the perspective of an accounting firm.

Steven Chipman joins me now, the head of one of the largest accounting firms you've heard of, Grant Thornton. He joins me now from London. The company has conducted a survey of their clients to see how optimistic they are about the economy and whether they are planning to staff up in the next year or so.

Steven, welcome to the show. Thanks for being with us. We are mired in, surrounded in, drowning in pessimism about business. Your report is actually more optimistic than I would have expected.

STEPHEN CHIPMAN, CEO, GRANT THORNTON: Well, good morning, Ali. Thank you. It's nice to get some good news for a change, isn't it? We conduct this survey quarterly. In our most recent survey, in all three major areas we asked the participants, we got an improvement in their optimism. The overall level of the business optimism, their perspective on their own businesses improving, and actually an increase in the number of people that thought they might be in a position to hire in the next six months. So very good to see some improving results.

VELSHI: Now more than half the business leaders that you surveyed reported they're concerned about a double dip recession. That's sort of two edges of the same sword. Is this fear of a double dip preventing small and medium sized businesses from hiring more people right now?

SHIPMAN: Well, I think one of the reasons that we saw some improvement in their optimism was a reduction in some of the uncertainties. But those uncertainties have not completely gone away, and there still remains widespread concern about the fragility of the recovery, the impact of health care, what's happening in Europe, the thought that perhaps expansion in China might start stalling.

All of those things continue to create uncertainty that causes businesses to, I think tell us that they still believe there's a possibility that we could see the economy going backwards, and, yes, inevitably that concern about uncertainty impacts confidence. Confidence or lack of confidence impacts their willingness to invest and hire.

VELSHI: We talked about the accounting industry, one of a few industries that are on a long-term hiring run. We've seen retail companies hiring people in the last few months, because we've seen consumer demand pick up. Ultimately isn't it demand that's going to cause companies to hire versus a very politicized discussion about certainty or uncertainty?

SHIPMAN: I think that's right, Ali. Certainly as hi travel around and talk to our clients at Grant Thornton. We have very dynamic clients. They're dynamic businesses. They want to grow, they want to invest. They have ambition. Certainly the uncertainty is a factor that impacts their willingness and ability to do that, but there are other factors too.

I think that they're looking for an environment that's going to be innovative. They're also needing, frankly, more access to capital.

VELSHI: Let me ask you this, you have lived in great Britain where you are right now, you now live in the United States and worked there. You also lived in China. A lot of people have been watching particularly this past week, the demonstrations in London over the U.K. government's decision to increase tuition. We've seen other demonstrations across Europe as part of an austerity plan. People in the United States are asking me, are we next if we don't get our deficit and debt under control? What's your thought on that?

SHIPMAN: It will be interesting to be in London this week. And observing the student riots and also trying to not only dodge the demonstrations, but also the continual talk of the royal wedding.

(LAUGHTER)

But -- you know, we -- we at Grant Thornton operate in over 100 countries around the world. And we're fortunate with the dynamic organizations that we serve seeing them increasingly wanting to expand their business into the opportunities that the global economy provide. And there's no doubt that it is very unsettling when they see these sorts of images on your television channel, for example.

And I think there is concern that the United States does have work to do to get its financial and fiscal house in order, and there may be some medicine to take.

However, I also -- getting back to our survey, think that's tempered by a high degree of optimism. I think in the United States structurally we're in a much better position than perhaps some of the European economies that have labor legislation that makes it difficult to actually increase the private sector job opportunities, whereas in the United States, I think we have more flexibility, we have, perhaps a stronger sense of innovation in the labor markets.

And I think we have move a willingness to change and to retrain. I think if we're going to get out of 10 percent unemployment issue in the United States we're going to have to look at retraining some of that workforce to take advantage of the industry sectors that do have a chance to grow.

VELSHI: Steven Chipman of Grant Thornton, thank you.

Next, how to network those holiday parties it now to help you land a job in the new year.

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VELSHI: If you or someone you know is out of a job, then holiday cheer might be in short supply this year. Usually the end of the year is a time when companies laypeople off, they don't usually hire them. But career coaches tell our Christine Romans that the end of the year is not a time to let up on your job search. Listen.

(BEGIN VIDEOTAPE)

ELENA GORDON REEVES, CAREER COACH: A little firmer. You've got to watch that, get right in there.

ROMANS: Career coach Ellen Gordon Reeves wants you to get a job for Christmas.

REEVES: People might think that December is not a great time to look for a job. The reality is, if you're job hunting, all you need is one job.

ROMANS: No question, with more than 15 million Americans out of work, competition is fierce.

REEVES: People aren't hiring at the end of the year, January may be a little more likely, February we may see employers confident enough to start hiring.

BILL RODGERS, ECONOMIST, RUTGERS UNIVERSITY: It's broad based all throughout the economy, all sectors have openings. The challenge becomes, because they know people are looking for a job.

ROMANS: That number is now 4.4 job seekers for every available opening. Sounds daunting, but it's the best it's been in two years.

REEVES: Please don't bring family members or friends with you to an interview.

ROMANS: Reeves wants you to beat out three people to get to be that one.

REEVES: If can you get yourself invited to an office party, fabulous. Have a party, have a pot lunch. It doesn't have to be expensive. But have you to be out there connecting with people.

ROMANS: Accords to consumer reports, Americans will spend on average 15 hours at holiday gatherings this year. Etiquette expert Peter Post says it doesn't have to be gosh to network for a job at those parties.

PETER POST, DIRECTOR, EMILY POST INSTITUTE: Tact, honesty, you show a little bit of restraint. At the same time, you're honest about your situation. And all of a sudden it's amazing how people will open up, listen, and offer to help you.

ROMANS: Bottom line, there are plenty of opportunities to network for a job this season. Just do it tactfully or don't do it at all.

Christine Romans, CNN, New York.

(END VIDEOTAPE)

VELSHI: And thank you for joining the conversation this week on YOUR $$$$$. I'm here every Saturday 1:00 p.m. Eastern and on Sundays at 3:00 p.m.

You can you also catch Christine Romans on "YOUR BOTTOM LINE" Saturday mornings, 9:30 a.m. Eastern.

Have a great weekend.