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Will Obama's Plan Create Jobs and Save His Own?; Motivating Americans to Spend; 85 Percent of Americans Say Economic Outlook is Poor; President Questions Intentions of GOP; GOP Presidential Candidates; Who Will Win Over Wall Street?
Aired September 18, 2011 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, HOST: President Obama has two goals, create jobs and save his own. He has a plan, but will it work?
I'm Christine Romans. Welcome to YOUR MONEY. Ali Velshi is off this week.
President Obama gave a speech to Congress and the nation, laying out his economic plan, but initial polls find very little support for the president's handling of the economy. CNN/ORC polls show 36 percent of Americans approve now of how President Obama is handling this economy.
Candy Crowley is CNN's chief political correspondent and anchor of "STATE OF THE UNION," which airs every Sunday morning.
Candy, we don't know what will pass and whether it will work. But politically, the president addresses the nation in primetime, and polls fail to show any real bounce. Has the president lost the ability to inspire confidence in the American people here?
CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Listen, I think the entire country has become the show-me state. They have heard for some time, from the very beginning before the stimulus plan, that the stimulus plan would keep unemployment under a certain amount, that it would grow the economy this amount. They've heard a lot of things that didn't happen, whether it was because the economy was worse than anyone thought it was, whether it was because it was the wrong remedy or not enough remedy.
Whatever the reason is, the American people are now skeptical that Washington, including President Obama, can do much to change things. And I think that's what's reflected in the polls. Everybody wants to see it before they believe it.
ROMANS: You know, and Candy, those same polls from CNN/ORC show that just three out of ten people feel they are better off today than they were three years ago. We know that Congress has a lower approval rating than the president, but these are national polls. There's just one national election. If the economy doesn't improve, can the president win?
CROWLEY: Yes, of course, anything can happen. But that question, are you better off today than you were four years ago, I bet you're going to hear again. That was a famous sort of Ronald Reagan question --
CROWLEY: -- when he ran against Jimmy Carter. The right track, wrong track is extremely important, and tends to mirror what's coming ahead when it comes to elections.
But here's how the White -- let me tell you how the White House sees it and how they see this happening. Number one, I can give you many elections where we thought one thing would happen a year before and the exact opposite happened. George H.W. Bush, had the first Gulf War, was a tremendous success. Everybody thought, hey, he is in. He lost.
When the Marine barracks were blown up in Ronald Reagan's first term right near the election, we thought, oh, he's going to lose. Boom, he won re-election. So things change. So there is that. But we don't see much changing in the economy, even by the White House's own predictions. So what they are looking now is can we sell, as Ronald Reagan did by the way, the trajectory of things?
CROWLEY: Can we sell things are getting better? We know they're not where you want them. They're not where we want them, but we are on the right path. And that's where they have to go with the re-election bid.
ROMANS: You know, and Candy, we know that the president at a big fundraiser this week, he said that his chances of being re-elected in 2012, they're better than, hey, his chances of being elected in the first place.
So yes, telling his supporters, come on, you know, I mean, there's a long time nobody thought a guy like me could be elected in the first place. So he's trying to sort of inspire some confidence that way.
Diane Swonk, she's chief economist at Mesirow Financial. She joins us now, too.
Diane, Americans, they're just not motivated to spend right now. There was no increase in August retail sales, July retail sales were revised lower. How important is confidence here at this stage in the economy?
DIANE SWONK, MESIROW FINANCIAL: Well, there's no question that on the margin, confidence matters a lot. And unfortunately, we have a very marginal economy. So it is important.
But remember, we saw retail sales flat line along with employment. We also saw wages decline in the month of August. So consumer confident -- consumers have a real reason not to be confident right now, and to be more pulling back, and be more cautious in their spending.
So although confidence is very important, and I think certainty going forward for businesses, especially in hiring all that trillion dollars in stimulus on the sidelines --
SWONK: -- that they're hoarding on their balance sheets, they need the confidence to have some kind of path going forward, even if it's hard. They just want some clarity. They can negotiate potholes in the road ahead, as long as they know they're there.
ROMANS: Diane, is it the president's job to unlock that confidence? I mean, can he do that? Does he have the key?
SWONK: We, you know, nobody has the magic key. If they did, it would already be unlocked. But it certainly is one aspect, is if we can come up with a long-term deficit reduction plan with some stimulus to at least maintain the status quo and stop us from going underwater, that would help businesses. That would help consumers.
SWONK: If we have some idea, some vision about where we're going, I think that could lift a little bit on the margins. And frankly, like I said, when you're growing marginally, every bit helps.
ROMANS: All right, Greg Valliere is a chief political strategist for Potomac Research Group.
And Greg, you know, the president, he laid out his plan. The public hasn't given him a bounce in the polls. A potentially long battle with Congress is already underway. So when will it be fair to judge whether these policies had actually worked?
GREG VALLIERE, CHIEF POLITICAL STRATEGIST, POTOMAC RESEARCH GROUP: He's almost running out of time right now, I think, Christine. And you would have to make a counterargument listening to what you guys are saying. What if things get worse instead of better? What if the unemployment rate drifts higher? I mean, that could occur. You've got the Solyndra scandal, a solar company. I think the scandal could get worse. We've got a big fight over Palestinians at the U.N. We've got, and most importantly, a situation in Europe that hasn't come close to bottoming.
So you add it all up. And, yes, things might get better for him, but there's maybe a greater chance things could get worse.
ROMANS: You know, and Greg, you bring up the Solyndra scandal. And this is where I want to bring Candy in, because this is something, it's a half billion dollar loan guarantee through stimulus to a company in California that makes solar panels, that the president had this unfortunate photo op, where he went through here and talked about this as an example of how stimulus was creating money. This company is now bankrupt, put out of business by Chinese competition. And taxpayers are on the hook, Candy.
Also this week, the White House revealing that $19 billion in unemployment checks were wrongfully issued. These do not inspire confidence in the government spending more money. CROWLEY: No. It's the drip, drip, drip that either one of them -- we don't really know what went on with the solar power company. We're not really sure. So far, no one's proven that anything Illegal went on.
But here's an administration that came in, saying we're going to be transparent. You're going to know all this stuff. We're going to be different. And it looks like the same old stuff. At the very least, this looks like the same kind of somebody gets a good deal and the taxpayers feel like they always get the shaft. So it just adds to the general feeling of, you know, Washington Is the same old place and they never do anything. That is bad for anyone who is running for re-election, the president included.
ROMANS: You know, and Diana, "Wall Street Journal" poll of economists this week found that a one in three chance of slipping into another recession in the next year. That's the worst odds they've given since the recovery took hold. I mean, I guess on the other side of that, that's two in three chance we don't slip into a recession. But clearly, how does that affect confidence when we're hearing that so many people are concerned about a new recession?
SWONK: Well, given I'm in the poll, it might be a coin toss. So I'm a little higher in that, than my colleagues in the economics profession in terms of concerns that Greg laid out. Europe, Europe, Europe, and what -- can we have containment versus contagion.
I think it's very important. I mean, these are issues, we have to be honest. And I always have hope. I'm an optimist. If you grow up in Detroit and you manage to survive it, you've got a lot of optimism in the world. And that's what I am. I'm an optimist.
That said, we've got to find a lot more unity, both in Europe and the United States in order to solve our problems. Our problems are not insurmountable. They are surmountable, but the clock is ticking. And as Greg knows, you know, the unity in Washington just isn't there right now, and in Europe as well. They need to get ahead of the curve, rather than sort of being so far behind it.
Washington has the same disease. The IMF has made it clear Christine Lagarde has been out there pushing. And let's face it, we're all in the same global economic boat. If we don't have our oars in the water at the same time, we're not going to make it to land through these turbulent waters. We need to be unified.
ROMANS: All right, we're going to talk a little bit more about that. Greg, hold your thought for a second.
ROMANS: We're going to --
ROMANS: -- pay the bills for two minutes. So stay where you are. We're going to come back. I want to talk about that with Greg and everyone else that the president, you know, preventing, did he, economic disaster. Did he make things worse? Are things as bad as they really seem? Perception versus reality when it comes to this economy and this president next on YOUR MONEY.
ROMANS: So if you ask Americans how they feel about the economy, the answer is pretty brutal. According to a CNN/ORC poll, 85 percent of Americans say economic conditions today are poor.
I want to talk about perception versus reality. But first, I want to ask Greg, you were talking about Europe. You wanted to jump in there. This is the proverbial shoe -- next shoe to drop, isn't it?
VALLIERE: I think so, Christine. And the spectacle of Geithner racing to Poland, the spectacle of the U.S. Fed putting dollars into European banks is quite unnerving. And I would have to say that in mentioning the Fed, you know, when you heard the rhetoric this week from Boehner and the president, you just get that feeling the gridlock is coming back in Washington. The Fed may be left to do the heavy lifting.
And of all the big stories next week, the biggest may be the FMOC meeting. And I wouldn't be shocked to see the Fed unveil some new policies.
ROMANS: Would that be treasonous, Greg? I'm sorry, that was a cheap shot. But I just wanted to say, I mean, what more could the Fed do politically? A lot of people on the right have been questioning the Fed and what it's done so far. And how many more tools does it have in its toolbox?
VALLIERE: Two things. They can emphasize purchases of longer term securities driving long rates down further. And number two, this is very controversial, but I think they're gong to at least debate the idea of getting a little more liberal on their inflation target.
ROMANS: All right, Diane, what do you think?
SWONK: I think -- I agree with Greg that we could see the twist, operation twist, incidentally named after -- originally done in 1961, named after Chubby Checkers' version of the twist is to get that twist in duration, to get that longer term thing. And that is what we're already seeing priced to market.
The Fed may disappoint in this meeting in September. And I'm a little hesitant, although there's many people who want to go for it. The dissenters are still very loud. And it may take until November for them to do It. I do think they will do it. They will do operation twist, as Greg mentioned, buying those longer term maturities.
And in terms of large scale asset purchase, changing the inflation target, I don't think that's on the horizon. I think that's just too risky for the hawks at the Fed to stomach. But I do think the Fed is not done yet. And they are feeling the enormous burden, Central banks the world over -- ROMANS: Yes.
SWONK: -- of trying to carry a very fragile recovery, particularly in the developed economies.
ROMANS: You know Candy, and here's the interesting thing. The world that we live, the three of us on this panel live in, I mean, we're talking about the Fed and what the Fed could be doing to operation twist, and what central banks can do to keep, you know, dollar borrowing going in Europe and the like.
But here in this country, people talk about President Obama and what he's doing. And he alone in his handling of the economy. And a lot of people, you know, say that he's doing a better job of handling the economy than congressional Republicans when you look at the polls. They also still hold President Bush more responsible than President Obama, because of the mess we're in.
But in making a case that others are to blame for the economy, I wonder, has the president left an impression with voters that no one is at the wheel in Washington, preventing the economic bus from going off a cliff?
CROWLEY: I think sort of to the contrary and to his own detriment, the president said a while back, hey, if I don't, you know, begin to turn this economy around, if I don't bring this deficit down, if I don't do the following things, I'm going to be a one-term president. You're going to hear that played a lot. I can assure you, that's going to show up in Republican commercials. He kind of laid out the things that he thought he needed to do. And they were about the economy of the country.
So but in terms of the perception of it, I think that when people look at Washington, they just look at the gang that can't shoot straight. And while it's totally true that they don't believe -- that the Republicans have a lower approval rating than the president, it's apples and oranges. You know, the president will be --
CROWLEY: -- running against one person. That's a national poll. What matters to those congressmen is how people in their districts feel. It's why, you know, over 60 percent -- I mean, I think it's actually over 70 percent of people get re-elected. Their district tends to like them. So it's not the same sort of looking at it. And I think, you know, in the end, when you're looking at how people view Washington, they view it as one big glob that can't move. Not oh, here's this guy and that guy.
CROWLEY: They're just disgusted with Washington in general. Bad news if you're an incumbent.
ROMANS: Which is why so many people in markets are looking at the Fed. They see Congress and the president just shooting at each other. And they're looking elsewhere, where there's not fire coming out of the -- a barrel with a gun.
You know, Greg, 2.4 million jobs overall have been lost as President Obama took office in January of 2009, it's a number. Lots of numbers like that that you get reminded of from conservatives all the time, who say this president is the reason the economy is doing what it is, not that the president is trying to mitigate a bad economy. Is that what the president will ultimately be judged on next November?
VALLIERE: I think so, unless there's some great geopolitical wild card. And you know, Diane and I have talked about this, that you know, he probably -- Obama probably made things better. It could have been a lot worse. He stopped the hemorrhaging, as Diane says. But most voters don't want to hear that. Most voters look at these policies and they conclude that they haven't worked.
ROMANS: I want to go back to this perception versus reality thing, Diane, again, one last time, because sometimes people say things in polls. It's because there's a lot of negativity around them, but they're doing other things. We see this sometimes in consumer confidence. People say they feel really terrible about things. Then you look at spending numbers and they're fine. You know, how much of this is perception? How much is reality? You know, give me your real feel on what's really happening in the economy for, you know, for the middle income earner?
SWONK: Well, you know, I think in this case perception and reality are one in the same. You know, we do see times when you see a major break between the two. A good instance is 9/11. We saw confidence actually shattered and the economy moved into recovery not long after that.
On the flip side of it, as Candy pointed out, the surge in confidence that we saw in President Bush and in consumer confidence after the initial Iraq War, and then he didn't get re-elected, the economy wasn't growing enough. In this case, the economy is worse than it was certainly during much of the last decade. It's not been a grade decade in general.
SWONK: And what the recession revealed was the reality that we were all ignoring once the credit was stripped away, income inequalities, the loss in the middle class. And you now have, you know, it's easier to buy a car than it is to buy a house. But unfortunately, we got people living in those cars. And I think that reality is hard to escape. The rising ranks of poverty, particularly among children, the rising ranks of people living in poverty, working poor.
SWONK: I think all of these issues are real issues. And so, perception and reality not that far apart at this stage.
ROMANS: Candy, you get the last word.
CROWLEY: Well, let me point out that in politics very often perception is reality or is taken as reality because if I -- just to go back, when you look at the father George Bush's first and only term, the economy had begun to turn around in the summer before the election. People didn't feel it. It didn't matter. No matter how many times.
ROMANS: It wasn't enough.
CROWLEY: Yes, it wasn't enough. And it wasn't -- you know, and people said I don't feel it. It still feels like --
CROWLEY: -- you know, the economy is bad. So perception does matter in politics. And sometimes, it's stronger than reality.
ROMANS: All right, Candy Crowley, Diane Swonk, Greg Valliere, nice to see all of you. have a wonderful weekend, folks.
You know, the president wants $447 billion to create jobs. Congressional Republicans are hardly ready to sign that check. But is this battle about policy or politics? We'll take a look, next.
ROMANS: President Obama obviously wants his American Jobs Act passed on the Hill, but he'll need support from Republicans in Congress to get that done, and that has the president questioning the intentions of some on the right.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: They supported this stuff in the past, but they're thinking maybe they don't do it this time because Obama is promoting it. Give me a win. This isn't about giving me a win. This isn't about giving Democrats or Republicans a win. It's about giving the American people a win.
(END VIDEO CLIP)
ROMANS: Will Cain is a CNN contributor.
If the economy turns around by November 2012, it greatly enhances the president's chance for re-election. Is it fair to say Republicans would benefit from a congressional motto of just say no?
WILL CAIN, CNN CONTRIBUTOR: No. listen, Christine, I can't even play with that, because this needs to be called out. The president's jobs plan is simultaneously good and a farce. It's good because there's some things in there like infrastructure investment that we can all agree upon.
We need to be realistic about what kind of jobs that will create and how quickly. It's a farce, because look at this. Substantively, what drives the president's economic policies s Keynesian economics, that government spending boosts demand. But he says we're going to pay for it, and pay for it with tax increases which beats demand. So he's betting that his spending multiplier is higher than the taxing negative multiplier.
I want to say one more thing. It's a farce also because politically, he knows this won't pass. Hey, there are places, there is room for compromise. Corporate tax reform, there's room for that. But he chose something he knows the GOP will oppose. He did it so that it would fail and he can paint them as bad guys.
ROMANS: All right, well, let's listen to what Speaker of the House John Boehner says. He says it's not politics that would cause him to hold up the American Jobs Act. It's policy.
(BEGIN VIDEO CLIP)
JOHN BOEHNER, SPEAKER OF THE HOUSE: Some of the president's proposals, I think, offer an opportunity for common ground. But let's be honest with ourselves. The president's proposals are a poor substitute for the pro-growth policies that are needed to remove barriers to job creation in America.
(END VIDEO CLIP)
ROMANS: OK, Roland Martin is a CNN contributor.
Roland, if the Republicans simply disagree with what amounts to $447 billion in new stimulus, does President Obama really have an economic record to prove Republicans wrong here?
ROLAND MARTIN, CNN CONTRIBUTOR: How in the world can you continue to sit here and say oh, we've supported these things in the past, but now it's we don't necessarily like it. This makes no sense to me. And this is the fundamental problem when you talk about how did you come to a conclusion. I crack up when Will said, well, he put something forward that he knows will fail.
The point is you put together your best proposal and then you duke it out. You can't even guess what they're going to think on the opposite side. I mean, they thought they had a deal with Speaker Boehner on the debt ceiling. The freshman Republicans said, oh, no, we don't like it. And so, it makes no sense whatsoever.
This is absolutely the GOP being obstinate. And there are Republicans who are on the record in the political piece, where they said we don't want to give him a win. And that is shameful rhetoric in this situation.
ROMANS: All right, guys. Hold on, hold, because I see you both bristling here. I want to bring in Ben White. He's Politico's Wall Street correspondent.
Ben, both sides want to convince the American people that they care more about creating jobs than saving their own. The election is just over 13 months away, but the jobs crisis is going on right now. Is there any reason to expect that the gridlock lets up any time soon?
BEN WHITE, WALL STREET CORRESPONDENT, POLITICO: I think the short answer to that is probably no. I mean, you've even see Democrats talk about Harry Reid has not shown any urgency of bringing some of these things up for a vote in the Senate. He sees the writing on the wall. He knows that Republicans are not going to support more infrastructure spending.
And I think it's not entirely fair to say well, they supported them in the past and don't support now. Some of the things they supported in the past, they say, well, they didn't work. You know, we had this giant stimulus. We still have 9.1 percent unemployment. So it was a failure.
Some of the tax cut stuff, the extension of the payroll tax credit for and extending it to employers and giving it to employees, that's possible that could get passed. It won't make much of a difference. The infrastructure spending is not going to happen. You know, we almost shut down this country because we couldn't raise the debt ceiling. We're not going to have a big agreement on jobs plan any time soon.
MARTIN: Well, this is the problem when we say, well, the stimulus plan, it failed because unemployment didn't down. What about the idea that we were on an upward trajectory. So had we not done it, we would be higher than 9.1 percent?
ROMANS: It's whether -- you know, and I talked to somebody --
MARTIN: It's crazy.
ROMANS: -- at Treasury this week who said basically, look, it's about you really would have felt it if we didn't do it. And again, with this new jobs plan, they say if we don't do this, you will feel it. If we do do it, it's going to help. We don't know how much. And that's kind of a hard thing to sell people. You know, that's hard to say, trying to quantify a negative.
CAIN: That's right. That's right. Seems like a convenient excuse.
CAIN: I do want to disagree with Ben on one thing. I do think there is room for compromise here. And I think that infrastructure isn't such a stick in the mud Republicans are just going to oppose carte blanche.
I think that you can fashion the infrastructure package. The Republicans could come around to, if on the other side, you offered real tax reform, not the kind of thing you understand they're going to oppose. What President Obama put out there, Roland, he knew ahead of time they will not agree to this. Therefore, his whole proposal was designed to fail.
MARTIN: Well, these are the very people who sit here and scream cut, cut, cut, cut but then turn right around then sit here and defend a Bush tax cut knowing full well it increases the deficit.
ROMANS: Well --
MARTIN: But they say cut the deficit, there's no logic there.
ROMANS: OK, let me jump -- we're going to out here and take a quick break because, you know, we're not Cut, cut, cut. We have to actually pay, pay, pay. So I need two minutes to pay the bills. Roland, Will, Ben, don't go anywhere.
The private sector, it's going to have to drive this recovery at some point. Right? So which Republican candidate does the business community want to see win the nomination?
ROMANS: Time to look at the Republican presidential contenders. Everyone wants to see business drive recovery. Does Wall Street have a favorite candidate from the GOP field. "The Wall Street Journal" gave its endorsement to Jon Huntsman and his economic policies, yes.
BEN WHITE, WALL STREET CORRESPONDENT, POLITICO: Huntsman is gaining popularity, so John Mack at Morgan Stanley came out for Huntsman. I'd say Mitt Romney is probably the favorite right now just based on his Wall Street experience. Obviously he worked in private equity. He knows a lot of these guys.
ROMANS: He doesn't think that Ben Bernanke, the Fed chief, is treasonous?
WHITE: Precisely. Perry scares a lot of people, still does, the Ponzi scheme comment is not something that is terribly well supported on Wall Street. They want someone who can win. They want, lower taxes, pro business policies, nobody messing with capital gains taxes. Romney they think can win. Perry probably not.
ROMANS: I'll tell you, a lot of Perry supporters are quick to Tweet me and e-mail me saying, hey, these are all the people who have ever called it a Ponzi scheme. And there are lots and lots of people who have called it a Ponzi scheme.
ROLAND MARTIN, CNN CONTRIBUTOR: Wall Street wants anybody up there except Ron Paul. Let's just own up to that. They always love a Republican president because their whole deal is just let us do whatever we want. When they hear somebody say lower all the regulations, they are going, whooo, yea, we know who we want. They want anybody but Obama.
ROMANS: This next one is for Will. The president gets low marks handling the economy. Americans still trust him more than Congress will. A CNN/ORC poll shows 46 percent of Americans trust President Obama to handle economy, 37 percent congressional Republicans, 15 percent say, neither of them. How can the eventual Republican presidential nominees separate themselves from such an unpopular Congress.
WILL CAIN, CNN CONTRIBUTOR: That statistic, by the way, should not surprise anybody. Congress always has the lowest approval ratings.
ROMANS: Do they deserve it? Yes! CAIN: Yes. I would say the way you approach the election going forward, go off what Ben just said. Guys like Jon Huntsman to a lesser extent, much lesser extent, Mitt Romney have economic proposals that distinguish themselves from President Obama's and actually have substantive ways to improve the economy. Unfortunately in 1984 it was Gary Hart and the seven dwarfs for voters, for voters right now it is all seven dwarfs. There is no Gary Hart in the field. Voters don't like Jon Huntsman.
WHITE: They have to hold their nose and like Mitt Romney.
MARTIN: Jon Huntsman looked like the relative you despise at the CNN Tea Party debate. They barely wanted to clap for him when he walked out. So, "The Wall Street Journal" can love his jobs plan. Guess what, he has no shot, at all, of getting the nomination.
ROMANS: Let me ask all of you in your vast years of experience covering all this. If you have unemployment stay at 9.1 percent, Ben, and you have no real meaningful job loss but no great job creation over the next year, can this president still win?
WHITE: It's going to be a very tough hall for him. Franklin Roosevelt is the last person who won with employment this high and he had a better trend in unemployment going down. He can win. The only way he can win is to run a very negative campaign against a Republican, saying, these are my ideas, this is how I get the economy started. They want to go back to where we were, big tax cuts for the rich.
ROMANS: Does whether he wins depend on who the candidate is and less on the economy, or both.
CAIN: Both. And this is what is so stark for conservatives. President Obama's approval ratings are at historical lows. Jimmy Carter is the only president with lower approval ratings at this point in his presidency. This is a huge opportunity for Republicans, for conservatives. This is the field we can put together? I hope not. Look, Bill Clinton entered the race in 1992 on October 4th. We still have time. Chris Christie, Paul Ryan.
ROMANS: You are still going with Chris Christie!?
MARTIN: That ain't happening. Look, the most important-I believe, and you saw it on Monday, when these candidates totally dismissed and blew of Latino voters. How can they lose the election? Easily, Nevada, Colorado, New Mexico, those Western states will be critical.
ROMANS: Ben says no.
WHITE: There is an answer for that. And that's Mark Rubio.
ROMANS: Yes, a couple of people have told me if you had a Romney/Rubio ticket you get Wall Street and you get everybody who loves sort of the Tea Party kind of view of the world. And then you get a good blend of both worlds.
MARTIN: Don't fall for that one, because Rubio falls in line with Tea Party policies. And that goes against-when they start hitting immigration, against the Dream Act, I'm telling you, those numbers are going to be deplorable. If they keep dissing Latino voters they are really helping the president with his re-election bid.
ROMANS: We have a long way-I mean, the Bill Clinton statistic, October, that tells you how much time we have to go. How does this president turn it around?
MARTIN: First, the president has to get a lot more aggressive.
ROMANS: Did you see the James Carville piece, this week? He said, fire and indict. He said he should fire all these people.
MARTIN: First of all, that's nonsense. Because the moment you fire, guess what the next article is going to be, from James, "Panic in the White House. They have no idea what they are doing."
People like the fact this is a no drama president. Folks like me want him to show a little more fire. But they like the fact that he is not someone who is slashing and burning for the heck of it.
ROMANS: What can he do? He has had a lot of different economic advisers so far. And they have all come from the same school of thought. Your, quote/unquote-
MARTIN: Yeah, Wall Street.
CAIN: Economically, he has tried everything, Christine. He tries to target job creation, tries to target investment. The way you improve economy is to lay the foundations with tax reform, lower regulatory environments. This is how you do it. And, by the way, it's a slow process. He can't tinker around the edges anymore.
MARTIN: No regulations?
CAIN: By the way, don't worry about firing it will all be taken care of in a about a year.
ROMANS: What if it just takes time to heal this. This is a financial crisis, it takes years. David Brooks wrote this week in "The New York Times," people forget, conveniently, that it takes years after a financial crisis where you have high unemployment and then it gets fixed, then someone gets credit for it. We just don't know who that will be.
WHITE: This is where we get into the problem of making this argument it could have been worse, without what I did. Which is hard to sell, but it is probably true, in some regards. He's got a housing crisis, it's got a long way to roll. Housing prices are not going to be going up anytime soon. It's going to take years to get through this. It's not his fault we have a 9.1 percent unemployment rate, but perhaps it could be a little lower.
MARTIN: We're impatient. We are an impatient society. Bernanke told us in '08, this is going to take some time. We say it, I don't care. Get it done-
ROMANS: You heard it here. Roland Martin, on the record saying he's impatient. Ben White, Will Cain--
MARTIN: No, I'm patient.
ROMANS: Roland Martin, thanks everybody. Nice to see you. Have a great weekend.
Europe has big problems. If you think their economic problems don't hit us at home you'd be wrong. Why helping to fix Europe debt issues might help United States, too. Next.
ROMANS: It's been more than a year since the debt crisis erupted in Greece. Leaders of the 17-country Eurozone still struggling to prevent a spread of financial turmoil. Take a look at the map. It shows the countries in danger of defaulting on their loans. Greece has a 99 percent probability of default. Portugal, 62 percent probability of default. This week the U.S. Federal Reserve and four of the world's largest central banks began pumping money into Europe, promised to do so.
Richard Quest is the host of "QUEST MEANS BUSINESS".
Richard, why is the Fed throwing money at this crisis? Oh, by the way, the American Treasury secretary happens to be in Poland talking to European finance ministers. Does it show how important what happens there is to what happens here?
RICHARD QUEST, CNN HOST, "QUEST MEANS BUSINESS": There's no question. The fact Tim Geithner went to Poland to sit with the European finance ministers, to hear what they have to say, and basically to read them the riot act. Sort yourself out. Get something done. Show you mean business. I mean, he won't put it in those blunt terms. That's the gist of it.
Tim Geithner doesn't turn up at an ECOFIN meeting just for the laugh and giggles of it. He wants them to understand that this has gone on long enough and that Europe has failed. I mean, look, in my discussions this week with European politicians and bankers, they are now starting to say very openly, enough's enough. For instance, yesterday speaking to Finland's Europe minister, he tells me, we've got to do better. Alistair Darling, the former British finance minister, says Europe hasn't done a good job. So that's what they are now looking at how to get ahead of this. ROMANS: But more help coming now from unexpected places, Brazil, Russia, India, China. The BRICS, they could step in and buy part of Europe's troubled debt. That would be kind of an ironic twist. Emerging economies bailing out the more established economies of Europe with their debt problems?
QUEST: The Shard and Freud (ph) of it. You can almost hear them, the giggling at the prospect. The Fed for instance-one of the things that really worried everyone this week, was two banks went to the ECB, the European Central Bank, and needed to borrow dollars from them. Because American banks, frankly, are with drawing their support, with drawing their liquidity, long-term lending, they don't want to be involved in European interbank lending.
There is a worry. And it is just a worry that European banks might find themselves short of dollars. That's what the swap arrangement, the repo arrangement that has been put in place. Basically, these central banks have said, anyone want dollars? Three times over the next three months, you come to us and we'll give you as many as you want. The object is to prevent 2008 credit crunch.
ROMANS: How close are we to that proverbial shoe dangling on the end of the big toe ready to drop for a financial crisis?
QUEST: I wish I knew. You know, you and I talking about the anniversary of Lehman Brothers. As things stand at the moment, the single biggest risk is somewhere in the politics of Europe the Greek bailout failed, or the restructuring of the European bail out fund doesn't take place, or Greece defaults suddenly and on a massive scale. That's the biggest risk at the moment.
I think longer term, this is on both sides of the Atlantic, the worry is many years the so-called lost decade scenario, Christine. You know this as well as anyone. The Japanese scenario, they don't get ahead of the curve. That is something in the United States the policymakers are terrified about.
ROMANS: I thought you were saying I knew more than anyone because you've seen my 401(k), from my own personal loss.
QUEST: Hey, I looked at mine today. Excuse me while I just - you know?
ROMANS: All right, Richard. Have a great weekend with your tissues.
QUEST: Good to you. Good to you.
ROMANS: Getting America back to work, it's the president's most important job. And CNN's Fareed Zakaria has some solutions, next.
ROMANS: Welcome back to YOUR MONEY. Always a pleasure when Fareed Zakaria, of "GPS" fame stops by, Fareed's special, "RESTORING THE AMERICAN DREAM: GETTING BACK TO WORK" airs Sunday at 8 pm, Eastern. We're going to get to that special in a minute, but first, let's get back to basics and play word association.
I'll give you a word or phrase and you give us what comes to comes to mind. I want to start with the Eurozone.
FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA, GPS": Oh, disaster, crisis. You pick your word.
ROMANS: Oh, it's dangerous. Dangerous, I would say. Christine Lagarde used the word "dangerous" to talk about what's happening there right now. It matters for us in our economic recovery, too, doesn't it?
ZAKARIA: It's a huge issue. Europe is our largest trading partner. You hear a lot about China and India, and Brazil these days, but the United States trades mostly with Europe, Europe trades mostly with the United States. Anything that goes wrong there means jobs will dry up here.
The broader picture, Richard Quest was just talking about the mechanics of financial failure. Why is all this happening? The reason this is happening, is because in Europe, as in the United States, people are realizing that growth is going to be slower than predicted, which means whenever growth is slower than predicted, it means you have less in tax revenue, more expenditures on unemployment, and things like that. So your deficit gets worse. That's the fundamental problem.
That's why all these countries like Greece and Italy, they realize they now need more money to finance larger deficits than predicted. But the underlying problem, slow economic growth, lack of jobs.
ROMANS: Back to our word association: Another big story for the week, poverty in America.
ZAKARIA: It's sad. It's distressing, because we often forget that the people at the bottom here get hut the most by far. What's striking about those poverty statistics is you now have people who are staying in poverty for longer and longer. That then leads to a kind of loss of hope. That's what's so un-American. People stop looking for work. They think they can never get work. It affects their whole lifetime of income.
ROMANS: I think there are new entrants into the rank of the poor. That's what's sort of unsettling for many people who used to be in the middle class. Middle skills, kinds of workers who haven't found safety valve in the economy for factory work, or unskilled labor, or even some kinds of skilled labor, who have now found themselves unable to get a job. That's truly, truly unsettling. You know we need to retrain. You know we need to align skills with what our economy is doing. That doesn't happen in 10 years. ZAKARIA: People who have a college degree in the United States are having an unemployment rate of 4.6 percent. That's actually very low. People without a college degree have 11 percent unemployment rate. There you have the story of the tale of two Americas.
ROMANS: When you look at earnings of folks who do have the degree, it more than pays for the education, quite frankly. There's a very "in" conversation right now: Is college worth it? You look at those statistics, Fareed, and it is really clear, that that's really your buffer.
ZAKARIA: We don't think enough, in this country, I think, about what kind of expenditures, whether it's personal expenditures or governmental expenditures. When you buy education you're investing in yourself for life. When the government builds a bridge, it's making an investment for 100 years of economic growth. You give somebody a check, even unemployment insurance, it doesn't do anything. That's consumption. We should be investing.
ROMANS: Another word association, education in America? We also got a number this week showing the average SAT score is 1500. It's been going down, down, down.
ZAKARIA: That's the word I would have used. The word association with education is down. Because what I mean by that is you choose any metric, and you look back over 30 years, American education is worse. Fewer college graduates. Fewer high school graduates. We do worse on tests. Look at any test.
ROMANS: We spend twice as much per student as we did in the '70s.
ZAKARIA: That's right, that's right.
ROMANS: Let's talk about Obama's jobs plan then. Does it have a chance? And should it have a chance?
ZAKARIA: Whether it has a chance or not is a matter of politics and I think right now it doesn't. He may be able to garner some support.
The jobs plan has two parts. Some of it is extension of unemployment. Temporary payroll tax cuts. It's fine. As a matter of compassion I'll support it, but it is not going to solve the problem. It's a temporary fix. It is a Band Aid.
The part that I think is powerful and important is the infrastructure part. At this point even if you give the private-sector incentives they are not hiring because there's no demand out there. But infrastructure is a place where government can do it, we have unemployment among construction workers is 20 percent. So go, rebuild America's roads, highways, bridges, airports. Do it with, you know, interest rates are cheap, borrow 30 year money. This is a perfect example. We should really be spending a lot more on infrastructure than we are, even in the president's plan.
ROMANS: Really none of these jobs plans, though, address the big structural imbalances we have and structural unemployment that could become a chronic problem. When you're just giving an extension of unemployment benefits you're not talking about the investing in the STEM, science, technology, engineering and math. You're not talking about the retraining of a 50-year-old worker who used to work in a factory. I mean, these are things we have to get our head around.
ZAKARIA: Clearly at heart what we have to do is education because our workforce, Bill Gross, the head of PIMCO, put it very well. He said, our workforce is too expensive and too poorly educated in today's world. There's only two ways that can go. You either educate them better, or you bring down their wages. We don't want to bring down their wages, so there's only one option. You have to educate them more.
ROMANS: I want to talk about your special, because it is this Sunday, 8:00 p.m. Eastern and Pacific, "RESTORING THE AMERICAN DREAM: GETTING BACK TO WORK", tell us about it.
ZAKARIA: What we to is we really first begin by looking at what's the nature of this jobs crisis. Because as you are suggesting it actually goes back beyond this recession. There's a structural problem, for 20 years the American economy has had difficulty creating jobs. And for 10 years we have created no jobs. Net employment in the United States over the last 10 years zero.
ROMANS: It's already a lost decade.
ZAKARIA: It is already a lost decade. Why did it happen? How can we fix it? What we do, it's now fashionable to call them job creators. We talk to the CEO of General Electric, the CEO of Dow Corning, the CEO of Starwood Hotels, I asked these people, what will it take for you to start hiring again? And then we talk to some other people as well. But the whole focus is practical solutions, how can you get more jobs. We'll worry about the ideology later. Let's first fix the problem.
ROMANS: Sounds great. When you look at income, so average family income is back to 1996 levels. Home prices are back to levels not seen since the 19-you know, a whole decade of wealth gone out of the housing market. I mean, look at the stock market, that is on its heels and job market like this, perfect time to take a look at how to create jobs and how to fix it. How to get it back for America.
Fareed, thank you. Can't wait to see it.
ZAKARIA: Thank you so much.
ROMANS: From the boxing ring to religion the story of a man living the American dream, next.
(COMMERCIAL BREAK) ROMANS: Yuri Foreman came to America to pursue his passion for boxing. But even after he became a champion, this fighter realized something was missing in his corner. Ali Velshi has the story.
YURI FOREMAN, BOXER: I came to New York just to pursue my own American dream.
ALI VELSHI, CNN BUSINESS CORRESPONDENT (voice over): This is the story of a young man on mission. Of Yuri Foreman, born in Belarus, moved to Israel, 10 years ago came to America, and walked into the world famous Gleason's gym in Brooklyn, because he wanted to be the best middle weight boxer on the planet.
FOEMAN: I came here. I told the owner, I want to be a world champion.
VELSHI (on camera): You want to be a world champion?
VELSHI: That's what you said?
FOREMAN: That's why I came to the United States.
VELSHI (voice over): It was the right place. Gleason's trained Robert De Niro for his legendary role in "Raging Bull." And it produced more than 130 champions in real life boxing. Owner Bruce Silverglade:
BRUCE SILVERGLADE, OWNER, GLEASON'S GYM: I was impressed with Yuri, because of instead of coming from Bed-Sty he came halfway around the world with no support team.
VELSHI: Silverglade was so impressed he gave Foreman lessons and through all the sweat, punches, and poundings, eventually those lessons paid off. In 2009 Foreman became the WBA Super Welterweight Champion of the world, the first-ever from Israel. His quest was complete.
That was when Foreman discovered something was still missing. Something he had been disconnected from ever since and he was child in the former Soviet Union, his Jewish faith.
(On camera): When you were growing up, did you observe Jewish rituals? Did you go to synagogue?
FOREMAN: Many Jews-it was forbidden to have synagogue. Many Jews completely forgot about their roots. The only little reminder was in their passport. That it mentioned I was a Jew.
VELSHI (voice over): It occurred to the young champ that when his girlfriend, soon to be his wife, asked him even basic questions about Judaism he didn't have the answers.
UNIDENTIFIED MALE: Ocher Ponum, if it is not also everything, Blucher
VELSHI: So, a new quest began. Yuri Foreman not only embraced his long lost faith but with the zeal of a champion, decided to become a rabbi. Since then he has progressed far along the path, within a year his rabbinical studies will be complete.
FOREMAN: Right now, my goal is to work with young adults. There's a lot of kids who perhaps need a little push, need a little motivation. And I think I can offer them, through boxing, or through personal experience.
UNIDENTIFIED MALE: Foreman limps back to the center of the ring, clearly compromised!
VELSHI: It may be a fitting change. Last year all the rounds in the boxing ring caught up with him. A nagging knee injury took him down in a tough bout at Yankee Stadium; he lost his title. He's training to win his belt back but even in the process it's clear that his new passion for his old faith is weighing heavily. These days he says he prays each day to be a good father and for the help and safety of his opponents, and for the completion of his a rabbinical studies.
And now when he fights, his faith goes far beyond the power of his punches. Ali Velshi, CNN, New York.
ROMANS: What an awesome story. Thanks for that, Ali. And thanks for joining us in this conversation this week on YOUR MONEY.
YOUR MONEY is on every Saturday 1:00 p.m. Eastern. Sunday at 3:00. Also please catch me on YOUR BOTTOM LINE, Saturday mornings 9:30 a.m. Eastern. And stay connected to us, 24/7 on Twitter. The show handle, at CNNYourMoney. Have a great weekend, everyone.