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YOUR MONEY

Changing the Way America Talks About Issues; Freddie Mac: Home Prices to Hit Rock Bottom in Spring; Can Diplomacy With China Bring Jobs Back to the U.S.?; How to Get a Piece of the Economic Growth in Asia

Aired January 15, 2011 - 13:00   ET

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


ALI VELSHI, HOST: Americans don't need to agree on the issues, but we do need to change the way we talk to one another.

Welcome to YOUR MONEY, I'm Ali Velshi.

The tragic events in Tuscan, Arizona have caused leaders from both parties to look at how we debate issues in this country. Two issues that we talk about often on this program, health care reform and immigration, have been the focus of an increasingly angry and sometimes violent political rhetoric.

David Gergen, CNN senior political analyst, is with me.

David, we are not connecting and we have not connected the conversations that go on out there in politics that create a bad climate to the shooting in Arizona, but you have expressed concern for quite some time before those shootings over what you confirmed as a climate of hatred that has developed in our political discourse.

What has you using those words, as someone who has watched and been involved in politics for decades?

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, Ali, there has clearly been a deterioration in our discourse over the last 15 or 20 years. It didn't start with President Obama; it has intensified under President George W. Bush and now Obama. And I do think that regardless of what happened in Tucson, that we recognized all before Tucson we need to cleanse it.

Let me go to what the president did. I thought the speech was very good. He was even more successful than I first thought. Now that he has a high ground, I think there are three things that I would recommend.

First, that he continue to act as a role model of civility and moderation himself, just as he did in Tucson.

Secondly, that he has opened a conversation now about civility that many people clearly want to join. He can continue that conversation in his state of the union and in other forms, especially in the state of the union. Thirdly, to begin a process, to institutionalize, the way the members of Congress and the executive branch talk to each other, that they have regular joint meetings, that they go to Camp David together, that they have something like the Blair House toward the tail end of the health care debate. That was a wonderful set of hours at the Blair House. I think the more you institutionalize these things, the more you go beyond rhetoric actually the way you act, the more likely we are to be successful.

VELSHI: Interesting discussion. Because often we say those things for either crisis, things that are impassable or foreign dignitaries with whom we're having difficult relations, why not do it between Congress and the White House, the two parties. Very interesting take on that, David.

Arianna Huffington is the editor-in-chief for "The Huffington Post."

Arianna, good to see you.

The economy, boy it has been the top issue for voters coming on three years now, millions of people out of work, looking for jobs, home values have collapsed.

What role does that play in the pitch that our political tone has taken?

ARIANNA HUFFINGTON, EDITOR-IN-CHIEF, "THE HUFFINGTON POST:" Ali, it does play a huge role. Historically we've seen in times of economic crisis and deep economic anxiety we now have 27 million people either unemployed or underemployed.

There is a sense generally that in the country there may be another shoe to drop. When that happens, when over 2 million families have lost their homes in foreclosure in the last two years and there's many, many more to come, there is that growing sense that people are not safe. There is that fear that comes. When people operate from fear, unfortunately, they operate not from the better angels of our nature but from our darker instincts.

VELSHI: That's exactly what we've seen much of.

Mark Skoda joins me now; he is the founder and chairman of the Memphis Tea Party.

Mark, shortly after the shooting in Tuscan, Arizona, Nobel Prize winning economist Paul Krugman wrote this in "The New York Times." Let me read it to you, "Citizens of other democracies may marvel at the American psyche, at the way efforts by mildly liberal presidents to expand health coverage are met with cries of tyranny and talk of armed resistance. Still that's what happens when a Democrat occupies the White House and there is a market for anyone willing to stoke that anger."

That is a commentary that has come under some criticism. It may have started the ball rolling, the ball that Sarah Palin ended up commenting on a few days ago.

Is Paul Krugman's characterization of the current political climate fair, in your opinion?

MARK SKODA, FOUNDER & CHAIRMAN, MEMPHIS TEA PARTY: No, absolutely not. Look a couple of things, first of all, Krugman, I think, was inflammatory. And frankly if you look at the media narrative today, much of this is a backward look towards the health care debate and the town halls and of course Washington last year.

Today, what you're seeing in the Tea Party Movement, in particular, is states organizing. It is Montana, Texas, Missouri, Mississippi, Arkansas, Tennessee, New Jersey, New York. We're finding that this whole effort, which was initially visceral, and I have said this before there was a visceral anger, unquestionably but it was turned into positive action.

So we saw the tsunami in November of Republicans being elected, both at the state and national level. I think today we see people like Jamie Radfield (ph), who is running for U.S. Senator and she'll be running obviously against Webb. We've seen a number of people who are taking leadership roles. I think unfortunately this view that we have today is sort of backward looking, not forward-looking.

Let's also point out to Mr. Krugman that during the fairness doctrine which is now being called for yet again by Representative Clyburn, we had the murder and assassination of President Kennedy, Robert Kennedy, we had Martin Luther King, we had of course, and twice Gerald Ford was shot at. We had numerous events during quote, unquote, "politically civility" where regrettably enormous tragedies occurred.

So I think his connection between what took place in Tucson and the Tea Party Movement was in my view reprehensible.

VELSHI: Right and I think the president in his speech made some efforts to try and disassociate those two things, to sort of say let's not talk about that lack of civility causing the shooting but let's take this opportunity, David, to focus on civility in politics.

The president picked that up. Let's listen to what he had to say specifically about civility.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: And if, as has been discussed in recent days, their death helps usher in more civility in our public discourse, let us remember it's not because a simple lack of civility caused this tragedy, it did not, but rather because only a more civil and honest public discourse can help us face up to the challenges of our nation in a way that would make them proud.

(END VIDEO CLIP)

VELSHI: All right. Very few people, David, very few people in this country, even people who were used to -- make a habit out of criticizing the president did not agree with those words. Bottom line, though, next week the House Republicans go back to renew their push to repeal health care reform.

This was one of the most divisive issues this country had seen in decades. Is this debate going to look any different as a result of our very grown-up discussion about civility?

GERGEN: I think the debate next week is likely to be much more tempered than it otherwise would have been. That will be a good thing. Republicans in the House now have a chance to show that they have heard what the voices of the people are saying. By the way, the voice of the people, a couple of polls had made it clear; the majority of people do not believe that the lack of civility caused Tucson. That's a good thing. We can all sort of begin to unite around that proposition.

But we can have more tempered debates. It's important, Ali, to understand we do have honest disagreements in this country about the direction we ought to go and we should welcome that. We should welcome a robust debate. This is also a rough-and-tumble country. It's in our DNA. We're not going to all just you know hold hands and sing Kumbaya. That's not who we are as Americans, nor should we.

What we can do is go back to that hackie phrase, we can disagree without being disagreeable, and we can disagree and seek common ground. I think the wonderful thing about the World War II generation we continue to celebrate, is that they were strong Republicans and strong Democrats but first and foremost they thought of themselves as strong Americans. They put the country first. That's what are really important here and health care and these many other debates that are coming.

VELSHI: OK. Everybody stay right where you are. We have tough questions about our economy. They are going to continue but could the Tea Party take the lead in how we debate them.

Plus, you keep hearing about the rise of China. We're going to show you exactly how you can capitalize on China. No matter what type investor you are, we'll show you specifically how to invest in China all that's coming up.

(COMMERCIAL BREAK)

VELSHI: Since President Obama took office, the focus has been on prominent conservatives in the media that some feel have gone too far inciting their audiences. David just told us that we have a habit in this country, not necessarily a bad habit about being contentious about the issues and really battling them out in public.

Arianna Huffington, the editor-in-chief of "The Huffington Post," what's your take on that? Should we retreat to our corners a little bit or should we have exactly the same vigor in our debates but presented differently?

HUFFINGTON: I completely agree with David. This is not about eliminating passion from our debate. It is about eliminating demonizing our opponents, you know seeing those who disagree with us, and people to engage with for the sake of the country and for the sake of a shared agenda ultimately rather than people to demonize and see us as enemies as people who don't love America or who want to take us down. These are very two different ways to debate.

You know, Jon Stewart said that when he did that Rally to Restore Sanity, when he talked about the media being the new system of our democracy, and needed to do a better job on that. One more quick thing we also need all us in the media need to focus on what is working in the country rather than just what is not working. There is amazing things happening, people coming together to rebuild communities, to help each other in this tough economic times, using social media to do that. How I got laid off.com, we've got time to help.org; all these things need to be celebrated by the media.

VELSHI: Good discussion. Mark, you're a prominent leader in the Tea Party Movement, you are someone who respects a civil but passionate discussion. But the Tea Party Movement did tap into anger that a lot of voters had for what they saw happening around them particularly on economic issues, what does the Tea Party do now, does it need to take an active role in toning things down, in reforming how this debate takes place while maintaining that passion on important economic issues that are crucial to your base?

SKODA: It's interesting, Ali, I'll tell you, I've seen it daily here now. With these state groups that are beginning to form. What I've observed is that passion that sort of visceral reaction that we had early on in Tea Party Movement is beginning to transition. Social media has done that, we are seeing various state proofs and coalitions building. People are focused on training. I mean we've got with American solutions for instance we have got a number of conference calls this month alone on education, on economy.

Right here in Memphis, Tennessee, we've got a major discussion going on between our Memphis City schools and Shelby County schools. Education is critical. I think what has happened are people first of all got very animated, right they got very engaged in a core issue. What they learned was that participating in politics is good for the community. And so very rapidly, and I've observed this in Texas, in Oklahoma, Mississippi, Tennessee, et cetera, very rapidly, they have moved towards this organizational structure out of self-interest, to provide power for the Tea Party Movement but at the same time to solve problems in the local communities.

We saw that here we just had our inauguration of our new governor in Tennessee. A very peaceful process. Still people had views that were antagonistic to some of his positions. But nonetheless you didn't see angry crowds you saw a reasoned discussion. I would suggest that is what's beginning to evolve very quickly in the Tea Party Movement as they begin to take their roles in helping govern as opposed to being the option if you will.

VELSHI: Right.

And David, one other thing that's important to realize in America, is that everybody had to vote, we do have judiciary, we have solid infrastructure in place. So we all need to behave in a fashion that doesn't pretend that we are somehow outside of the political operation, that we somehow have to protest and in fact use violent terminology to do so. We're all in the system.

GERGEN: Well that's exactly right. I think the president went back to Tuscan really to talk about America being one family. We may have our dysfunctional ties at times but we have our arguments but ultimately we do belong to the same family. I want to go back to something Arianna said with things that are important.

And that is that the media does have a central role in this conversation. And that we ought to be looking for those instances when people are coming together and are changing. There's an enormous explosion of civic effort now among young people working in our schools and trying to do other things to improve the quality of life in this country. That ought to get more coverage. The Tea Party, as the Tea Party evolves, as we've just heard into this constructive action, I think we've created stereotypes of the Tea Party and that really deserves coverage as they evolve so we can help understand each other and see each other as three-dimensional figures. Too often we are presented to other people in the media as two-dimensional, even one dimensional figures, and don't understand the complexity of human nature and how people can have good sides and bad sides and we ought to be looking at the good sides too.

VELSHI: Excellent discussion. Thank you to all of you. It does help bring that conversation a little forward when we can show that we have different positions on things but can have civil discussions about them. David, pleasure to see you, Arianna as always thank you and come back again. Mark, you have been a good friend to our show as well. We'll continue with that great relationship.

OK, moving on your biggest investment has been missing in action in this recovery. Next, is 2011 the year that the value of your home finally bounces back? I've got some interesting stuff for you.

(COMMERCIAL BREAK)

VELSHI: Where is the value of your home headed this year? Boy, that is an endless question. A forecast this week from an economist at Freddie Mac that projects that home prices will hit rock bottom this spring and then gradually begin to rise in 2012.

Christine Romans is here. She is my friend and she is the host of "YOUR BOTTOM LINE."

Christine, give me some sense of it. Where are home values right now and where might we be going?

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: Well here is where we are right now; I mean from the 2006 peak of more than $230,000 for the value of a home, prices are down some 26 percent by the end of last year. It has been pretty ugly when you take an average look like this and when you look from individual places like any of the sunbelts states, Nevada, very, very difficult going for those people.

So we tried to take a look at what the range of expectations is out there, Ali. If you look at all those forecasts for home prices, you can see that the highest expectations for a gain of about 5 percent next year of the value of your home, the worst out there is for a decline of 11 percent. Ali, the same week we had the Freddie Mac chief economist saying that you could see a bottom in the spring, we had Morgan Stanley saying you could see prices fall another six to 11 percent. So consider that.

VELSHI: I want to ask you about this. Can we just bring that chart back for a second, if we can what you expect houses might go down by and might go up by. You know that I'm on the same side of this argument. I think we probably have hit bottom. But even if you hit, let's say you take the right side, let's say you got a low that in some markets you do see, or let's say we see an average loss of 11 percent, the reality Christine is that we're still sub 5 percent on the 30-year fixed mortgage if you have good credit. Most people think interest rates will be going up. So if you're in the market to buy, even if house prices are going down, doesn't it still make sense for to you buy?

ROMANS: I know this is an argument you've made many, many times. It makes an argument for you to buy, Ali, if you have money in the bank, if you've got a reason why you are buying the house, if you are going to stay in the house for more than two to three years. You look further out you don't see an average estimate for home price appreciation more than a few percentage points all the way out.

VELSHI: Correct.

ROMANS: It means if you're in the right position, put 20 percent down and a job and a good school district, yes, it makes good sense to buy.

VELSHI: It also means don't be a speculator on this.

ROMANS: No, absolutely. Now look the reason, Freddie Mac, that economist that gave that forecast at a home building conference. Let's be honest a lot of people in the home building industry and the real estate industry that are cheerleaders for a very, very long time for home prices. They would like to see things turn around. The reason why they say things will turn around and there will be a bottom, potential buyers are ready for many of the reasons that you just pointed out, 4.8 percent on fixed rate mortgage, and you are starting to see positive economic indicators come back. Even the Feds own beige book earlier this week pointed out that the economy is doing better, consumers are starting to buy across the country.

VELSHI: Look at that mortgage, 4.78, that's way up from where it was a few months ago. That's the crazy part.

ROMANS: But people don't have the confidence. That's the thing. How do you measure confidence? I can't give you a bunch of numbers, Ali, that are how you measure confidence. That's what has got to come back before those buyers are ready to step back into the fray. VELSHI: Jobs is often the best way to instill confidence. You see people around you working, you are getting a job, you keeping your job, you might even get a little raise, that's the best way isn't it to get people feeling good?

ROMANS: You know, Ali, when we talk about hitting bottom; they called for a bottom last year. Almost everyone thought there would be a bottom last year and it didn't happen. And once you get the bottom you still have a long way to go before anybody feels better.

VELSHI: Christine, always my pleasure to see you.

Christine Romans, host of "YOUR BOTTOM LINE."

OK, China gets away with manipulating their currency and stealing all our jobs. Those aren't my words; those are strong words from the Donald. Is he right? We are going to take a look.

But first, even with flavors like candy cane and gingerbread, winter just is not a season when most people think about ice cream. I forget about it entirely.

CNN producer Even Glass shows us how one ice cream shop outside of Washington, D.C. makes it through the winter months with a profit.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I want pumpkin --

UNIDENTIFIED MALE: ice cream is not the first thing on your mind when you're cold. Kids want ice cream regardless of the temperature. Parents not so much.

SUSAN SOORENKO, OWNER, MOORENKO'S ICE CREAM: The season starts the first sort of warmish day in March and immediately the next day after Labor Day business is cut in half. There are two distinct pieces of my business; there is the ice cream shop where the neighborhood comes.

UNIDENTIFIED MALE: That is great.

UNIDENTIFIED FEMALE: This one or this one?

SOORENKO: Then there is this side of the business where we sell to markets and restaurants and hotels and clubs. The past, I would say year and a half has been about really focusing on that wholesale side of things, because if I don't do that, I have to lay people off.

ADRIANA TURCIOS, EMPLOYEE: It's a local business, it is helping the economy. Hopefully it's going to make people happy.

SOORENKO: It's ice cream. The challenge is, first of all, believe it or not, not everybody eats ice cream. I know it is hard to imagine, but it is true. But the other piece is we need to be able to have people come in when it's cold. UNIDENTIFIED MALE: In the wintertime, year-round, we offer hot beverages, coffee, hot chocolate. We push different ideas for mixes ice cream with coffee and hot chocolate.

SOORENKO: With the economy, I'm not going to lie, it's been extremely difficult. It's not just about seasonality, which is difficult in and of its own, it is that even when you are in your season people are looking very carefully at what they are spending.

UNIDENTIFIED MALE: We use things like Groupon to offer our services at a discount. It's mostly a matter of reaching out to the community and reminding them we're here. When it gets cold, ice cream is not the first thing in your mind.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

VELSHI: More than 8 million jobs lost in the recession, more than 15 million Americans actively unemployed right now. Where have all the jobs gone? Many of them to China is what some people say. The big debate is whether or not these jobs can come back to the U.S. and if so, does it depend on policy and diplomacy with China or does it depend something else entirely.

You're going to hear a lot more about this when Chinese President Hu Jintao visits Washington this week. Zachery Karabell is the author of "Super Fusion: How China and America became one Economy and Why the World's Prosperity Depends on it."

Zach, welcome.

You say these jobs that we've lost to China are gone for good. If so, why is China so vital to the U.S. economy?

ZACHERY KARABELL, PRESIDENT, RIVER TWICE RESEARCH: First of all, a lot of these jobs, Ali, have been going away from the United States for 40 years. Before China was Mexico, before Mexico was Japan and Taiwan. While it's certainly true that the manufacturing base in the United States has changed dramatically since 1970, you can't really pin that on China as much as people do, in fact as you mentioned pin that on China.

The flip side, which we don't see as much but is really vital to the health of the American economy, is that China has become a major source of growth for U.S. companies and that's not just because they put factories in China that used to be in the United States, it's because they put factories in China to sell to Chinese consumers, some of which need to be supported by workers in the United States.

One of the best examples of that is a company like Caterpillar which is seeing you know huge demand for earth moving and construction equipment in China and as a result keeps workers employed in Illinois or in factories in Mississippi in order to supply parts to those earth movers that are being sold in China.

VELSHI: All right. Interesting way to look at it.

Ed Henry is our senior White House correspondent. He is going to have a very busy week with this visit.

Ed, we're starting to hear different rhetoric coming from the administration on China. Let's listen to what Treasury Secretary Geithner said this past week.

(BEGIN VIDEO CLIP)

TIMOTHY GEITHNER, TREASURY SECRETARY: Even as we work to encourage further reforms in China, we need to understand that our strength as a nation will depend not on the choices made by China's leaders but on the choices we make here at home.

(END VIDEO CLIP)

VELSHI: Ed, we're not on the same footing as China is. The reality is, this is something Americans have difficulty understanding, but we're not. You have covered these types of bilateral meetings in the past what can President Obama reasonably expect from this trip by President Hu Jintao?

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Frankly, I don't think very much. I think all they are trying to get out of this visit is to show that there are at least some warm relations between these two countries that has warmed up in recent years and that these two leaders in particular are developing a rapport. I can tell you White House aides are the first to know that this is the eighth face-to-face meeting the beginning of these meeting between Hu Jintao and President Obama, because they have met at so many G-20 Summits and the like.

There are cases that they are building a personal rapport that is going to work through some of these difficult issues. But a lot of people in Congress, a lot of people around the country who look at unemployment, who look at the trade gap and look at jobs going to China as you have been noting wonder how much talk can you do before you need some real tough action against China.

I think a watch for some pr moves by President Hu on this trip. He is going to be in Chicago in addition to Washington. He's going to go to an auto parts facility to try to show, look, this is an auto parts facility in America that China has invested in, so he's going to try to make the case that's bringing in a new American job. As you noted, it is a very skeptical public right now in the face of this economic crisis.

VELSHI: Although that will be an interesting visit. Because he's right, it is a Chinese auto plant that is invested in by the Chinese that does create jobs. You said something that I wasn't necessarily going to bring up but because you brought it up.

Let's bring my absolute favorite economic nerd into the discussion, Christine Romans, she even knew who it was before I said it.

Christine, Ed talked about the trade gap, the trade deficit, the difference between what we sell to China and what they sell to us.

I think everybody now knows without looking at the numbers that China sells us a lot more than we sell them. Are we using China as a scapegoat for our economic problems and how would things be different here if we had more balance in trade? If we sold China more and they bought more from us?

ROMANS: Well look, scapegoat is a very good word because Hillary Clinton, the Secretary of State gave what I would call a seminal speech about U.S.-China relations this week. And she said that there's this idea that if it's going to be China's century it can't be our century and it is going to have to be both. We're entangled she said. She also used a metaphor, an old Chinese saying I guess, that two people in a row boat have to row in the same direction, otherwise you only go in circles and you can actually swamp the boats around you. That's exactly where we are right here.

So she's being careful to say we can't scapegoat the Chinese for our domestic issues and for our job loss. And at the same time she also noted a rise of nationalism in China because the Chinese feel like we are trying to contain their growth that we are somehow jealous or we don't want China -- we see only China as a threat not as an opportunity.

VELSHI: Right.

ROMANS: So there's an important relationship here that has to be very carefully guarded and shepherded forward even as our very serious concerns that China is planning its economy slowly and surely and has been for a very long time for its own national interest, scouring the globe for national resources, maybe competing with the United States on different levels.

A test flight of a stealth jet fighter that is something that defense hawks are concerned about. In a lot of different areas where there are people who are concerned about the rise of China, which, of course, has happened with American dollars.

VELSHI: Yes, when you have 8 to 10 percent growth, by the way, you have to contain that to some degree. That becomes unwieldy.

But you make a point that goes right back to Zach's point. In fact it's in the title of your book, Zach. You sort of see them as one economy. Is that the right way to see this? Put this into perspective for our viewer out here who doesn't run a multinational company but may have a job or have a small business or maybe able to invest or maybe able to train in a way that China's growth can benefit them. Is it one economy?

KARABELL: Yes, I mean first of all this is a lot of emotion. And when you talk about well maybe China is not to blame for a lot of the dislocations in the U.S. economy, that can create a lot of anger because people feel like you're therefore denying that there are problems in the U.S. economy, and there are, which is why Geithner's point is so absolutely vital about what America chooses and the path that we take more than it is about what China does or doesn't do. To the point of how these things are fused, you know think of the ubiquities iPhone or any of Apple's products, when things are made in China and shipped to the United States they show up in our trade system as a trade deficit with China. It looks like they are selling us a lot of stuff and money is leaving the U.S.

But if you break down the components and who is profiting from that, a lot of the money that's being made by those sales is not being made by Chinese factories it's being made by Apple or it is being made by stores that are staffed obviously by Americans and cities throughout the country who are selling those products.

So our trade figures create an extremely simplistic and rather zero some view of the world when the actual chain of goods and how they are sold and who buys them and who benefits is much more complicated and I think in a lot of ways benefits us a lot more than our figures suggest that they do.

VELSHI: Good discussion, folks. Thanks very much for being here, Zach, great to talk to you.

Zachary Karabell is the president of River Twice Research and the author of "Super Fusion: How China and America became one Economy."

Ed, great to see you. We'll be talking all week.

Same with you, Christine. You stick around by the way, I want to talk to you about something else.

Hey, listen, would you place a bet on China's success? Chances are you already have without knowing it. I'll tell you what I mean by that when we come back.

(COMMERCIAL BREAK)

VELSHI: As much of the developed world struggles to climb out of the recession, China is set to see between 8 and 10 percent of economic growth this year. How do you get a piece of that action?

Jim Awad is the managing director at Zephyr Management a private equity fund, great friend of ours and of mine.

Jim, you know, you've been following growth in the rest of the world for a long time. There is some people who think that after the double digit growth we've already seen for China, can it still be a good investment for my viewers, people watching this show?

JIM AWAD, MANAGING DIRECTOR, ZEPHYR MANAGEMENT: Yes. In a long term sense there's a huge transfer of economic activity and wealth going from the developed world to the developing world driven by China. They have money, they have a growing middle class, and they have reserves. And they are going to be buying more computers, more toothpaste, more food, more technology, and more laptops. Yes, while there can be short-term volatility, it is a great long-term structural growth story. VELSHI: Now for viewers of mine who have 401(k) s it is likely that they have already got some exposure to China in their probably through some of the major corporations that they are invested in?

AWAD: Yes. If you're invested in any mutual fund that buys the S&P, the largest companies in America, if you read their annual reports and their releases are getting most of their earnings, if not earnings growth, from the emerging markets. So you are participating. There are certain things U.S. companies do better than anybody else and the Chinese are buying their products. So you're getting some participation that way.

VELSHI: All right. Let's talk about ways you can perhaps more specifically invest in the region. Remember, while all that growth is taking place in China, the rest of Asia without China is also pretty strong, partly because of their connection to it. You recommend a fund that one can own in their IRA that would make money from China's growth.

Let's take a look at this chart. If you put $10,000 in, the Lazard Emerging Markets Equity Portfolio, and there is the ticker on the right side, you put in $10,000 in the beginning of last year; you'd now have more than $12,000. The neat thing about this one Jim is that you don't have to invest too much. So my investors who have just a little bit that they want to expose can do that.

AWAD: Yes, and what I also like about the fund, it's conservative, it has a good long-term record, it's exposed to China. But more importantly, as you said, it's exposed to all of Asia, which is its own economic ecosystem developing not only because of China but each of those countries are growing very strongly also. It also has exposure to the next most important area, which is Latin America.

So it is a good relatively conservative, not unvolatile, because it can have volatility, but it is a good conservative way for investors to invest. By the way, this fund is so popular, from time to time they shut down to new investors. They will steer you to a sister fund. So don't get discouraged if they tell you you've got to buy a clone fund that is almost exactly like that.

VELSHI: Jim, something that's become very popular in recent years, is the idea of index funds or exchange traded funds that allow you to trade as if it's a stock in a basket of companies. This might be one instance; China might be one instance where it's worth using a fund that has an active manager as opposed to one that's just an index.

AWAD: Yes, because you want to be exposed to different geographies. You want to be able to have a manager that will take money in and out of different geographies, in and out of different industries, in and out of different companies. So yes this is a place where research and asset allocation, it's worth paying a little bit more money to get that.

VELSHI: Jim, what a pleasure to see you again. Come on my show more often. Jim Awad is a managing director at Zephyr Management, a good friend of ours.

Everybody has a price. Now you can name yours to be bumped off a flight. Interesting story I'll tell you about it after the break.

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VELSHI: Time to take a closer look at some of the week's business headlines.

Christine Romans is back and joining us as my good friend Sirius XM radio host and CNN contributor and guy with the second best haircut on CNN, Pete Dominick.

Hey, folks, with all the weather this week I've been on several flights as I am every week and they have all been packed. I love this story. Delta has introduced an online auction system for getting bumped. Like a Dutch auction. When you check in, you can now enter the amount of money that you would accept as a voucher for future travel for giving up your seat on an oversold flight.

ROMANS: Name your price baby.

VELSHI: You don't have to wait until you get to the airport. You can even do this from home. Sometimes the offer is actually pretty good. I don't have to be on that flight but I have to go through the whole system --

ROMANS: I'll tell you on the Delta blog, they say, they use as an example, save $200.

VELSHI: That's what they would like you to bid.

ROMANS: I get the sneaking suspicion that they wouldn't do this if they weren't going to make money.

VELSHI: I would willingly wait for a later flight. I don't have to be anywhere. If somebody gave me 2 or 3 or $400 and I didn't have to get out of my house as opposed to sit and wait at the airport --

PETE DOMINICK, CNN CONTRIBUTOR: I know you guys travel a lot. But I hate that you both love this idea.

ROMANS: I don't.

DOMINICK: You don't?

ROMANS: I don't. No. Absolutely go for it. Put in $900 as the bid. That's when it financially makes sense. Because you don't have any negotiating power to get a new hotel. A hotel room for example. Now you are delayed, the next flight is delayed, and next the flight, you don't really have transparency for what the next flight will be for you. You can't get --

VELSHI: What about you Pete? You like it, you don't like it? DOMINICK: No. Listen, first of all if there's so much demand why don't they do what Amtrak does and if you're late, you get to stand in the aisle. If you want to buy an $11drink, now the people in the aisle can just pass it back to you. I can just see some speculator, some kid at Goldman Sachs, buying up all these flights at an auction, wrapping them up and bundling them up and selling them to a poor sap at Citigroup.

And lastly I mean is somebody going to be auctioning these off at the gate, Boca Raton, $450, Boca Raton -- when you win an auction on eBay, you brag about it. Can you see this? I won an auction. The middle seat in the back row -- go to -- to see my in-laws.

VELSHI: This is fantastic that the two of you don't like it. So I will have fewer bids against me. Because I'm going to take advantage of it.

All right. Here is another one, beginning this month, Sam's Club shoppers were stocking up on household necessities can throw in a basic health service package into their shopping cart. $99, you get an annual subscription to a web-based program that includes at-home screening tests, for things like cholesterol and blood sugar, which as you know are indicators of some of the most expensive and worse diseases we suffer from and you also get 24/7 access to a nurse line, and two health coaching sessions recommended for prevention screening and a physician summary that you can show to a doctor. Pete, sort of gives new meaning to retail therapy. You like this one?

DOMINICK: Another horrific idea, Ali Velshi. I mean, full disclosure, I am a member of Sam's Club. But if they really want to help the customer, then maybe they shouldn't be selling a drum of catsup, AKA, and cauldron of it that probably has more higher fructose corn syrup then a bottle of high fructose corn syrup. You get a 24- hours service to a nurse. You call up a nurse, you know what she is going to say, see a doctor. But I don't have health insurance. Here's a coupon for the spring fresh laundry detergent that probably gave you that rash in the first place. It's a poor excuse for a replacement for actual health insurance.

VELSHI: What about you, Christine? Do you like this idea? Is it moving forward or no?

ROMANS: Full disclosure. I once stocked shelves at a Sam's Club. There you go. But I will say that the access to a doctor is something that I think is critical. But we keep talking about prevention and preventative care. It might work and be a good thing for some people who can follow-up and are able to follow a web-based plan. But my understanding is, problem with preventative care for many people in the country is that they don't have access to the web or web-base tools and that maybe -- I don't know. Maybe -- I don't know. $99 a year if you don't have much money is a lot of money.

DOMINICK: Here is the deal I was a personal trainer for a long time and I know a little bit about health and fitness. And I will tell you what, eat real food. They do sell real food at these big bulk stores like Sam's Club. You're buying like an orange tree for your family of 12. I mean, but most of the food they're selling was made in a factory somewhere.

VELSHI: I don't go to a lot of these stores, because I don't have enough space. Here is one for you and I already know the answer to this. Have you ever lied to your spouse about money? Christine hasn't, Christine has never lied to anybody about anything in her life, but a recent poll shows that 31 percent of people say they have lied to their spouse about money, 30 percent say they've been deceived about finances, 67 percent say it's led to an argument, 42 percent say it's caused trust issues and 16 percent got divorced because of it. Is it cheating if you lie about how much you spend, Pete? And are you guilty of that?

DOMINICK: Yes. Yes. It is cheating. I am guilty. My wife and I do have quite a trust built up, but that's only because she's a hawk for every penny. She sees every receipt. She sees every expenditure; she sees every check coming in. My relationship, it's like, she's my mommy. I've been driving the same car for 12 years, and now I've got a little success, I'm on TV. Last summer I got recognized. Hey, aren't you the guy on CNN. Hi, Ali Velshi. Why doesn't your car have any air conditioning? Oh, I'm doing a segment for CNN on -- oh, how spoiled are we by air conditioning? Nice to meet you. I'm Ali, by the way.

ROMANS: Ali, I am really heiress to the trust fund, but please don't tell my husband. I want him to think that we should live through it.

VELSHI: I get it.

DOMINICK: At this point I'd like to propose to Christine Romans.

VELSHI: You guys go deal with that. We'll take a commercial break. Good to see you both as always.

Hey listen, is it a threat or an opportunity, why rebounding U.S. automakers are eager to turn America's stiffest competition into a key ally, after the break.

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VELSHI: Time now for the "XYZ."

This week coming up, Chinese President Hu Jintao comes to Washington on an official state visit; he will meet with President Obama at the White House. No doubt discussions will center around the tough issues between our two countries, like trade deficits and exchange rates.

Now it is a commonly held view here in the United States that China's spectacular economic growth in recent decades has come at the expense of America's growth. China's lower manufacturing costs have given it a competitive edge, giving us cheaper priced goods for Americans to buy, but a generation of U.S. factory workers have lost out in the process.

Now there is a flip side to the China story that is starting to emerge especially now. China's growth is fueling a growing middle class in that country that will be just as eager to spend on goods and services to better their lives the way Americans did. And U.S. companies are taking notice including U.S. automakers.

General Motors the same company that got a bailout from the U.S. government almost two years ago sold 2.4 million vehicles in China last year. 2.4 million Vehicles that are 200,000 more vehicles than they sold in the United States.

And China's appetite for cars is only expected to grow. Ford increased its auto sales in China by 40 percent in the same period. Most of those cars were manufactured in China for China's domestic market, but the fact that once troubled automakers can have a go in China and succeed was unthinkable just a few years ago.

A stronger growth abroad should give those automakers and other companies doing business in China, should put them on more solid ground here at home. So the issues that divide the U.S. and China are real, but I believe the equation is changing. China's future economic clout is an opportunity for U.S. investors as much as it's a threat.

That's my "XYZ."

Thanks for joining the conversation this week on YOUR MONEY. We're here every Saturday at 1:00 pm Eastern and Sunday at 3:00 p.m. Eastern.

And you can catch Christine Romans on "YOUR BOTTOM LINE" Saturday morning at 9:30 a.m. Eastern. Stay connected 24/7 on twitter @AliVelshi and @ChristineRomans. Have a great weekend.