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The War For Women's Votes; Paying Your Fair Share: Is Obama's Plan to Tax the Rich Really Fair?; College: How to Pay For and Pay Off This Critical Investment
Aired April 14, 2012 - 09:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, HOST: The battle for women in this election is on.
Good morning. I'm Christine Romans.
Democrats have been hammering Republicans over cultural issues like funding for Planned Parenthood, contraception, but this week Governor Mitt Romney said the real war on women is being waged by what he termed President Obama's failed economic policies.
(BEGIN VIDEO CLIP)
FORMER GOV. MITT ROMNEY, R-MASS., PRESIDENTIAL CANDIDATE: These are just some statistics which show just how severe the war on women has been by virtue of the president's failed policies, 92.3 percent of all the jobs lost during the Obama years have been lost by women.
(END VIDEO CLIP)
ROMANS: Romney's sudden focus comes on the heels of two polls released this week by ABC News and "The Washington Post," which show Romney 57 percent of women say they prefer President Obama, while just 38 percent were in Governor Romney's corner.
Will Cain is a CNN contributor; Marc Lamont Hill is associate professor at Columbia University.
Will, this 92.3 percent stat has got everyone all fired up. That's a pretty dramatic statistic.
WILL CAIN, CNN CORRESPONDENT: He flipped it. He flipped the script.
ROMANS: It turned right around, didn't he? It is Obama's policies that are the war on women, not the war on women that people have been saying is waged in the Republican camp.
CAIN: And amazing flipping of the script. I'll say this, two points. It's true. The statistic is shocking and true that 92.3 percent of women are jobs lost under Obama, meaning with the start of his administration, have been women, which I can't even fathom how is that possible? Something like 730,000 jobs lost?
CAIN: And 680,000 have been women? Now, although that is true, it is not all that useful. For this recession, for defining this recession, for defining who's responsible for various aspects of it. The recession has been much longer lasting than just Barack Obama's presidency.
MARC LAMONT HILL, PROFESSOR, COLUMBIA UNIVERSITY: Well, that's exactly right and that's why it is disingenuous. I understand what Mitt Romney is doing. He is absolutely right to do it, because quite frankly, the numbers don't look good for him with regard to female voters.
And when you look at cultural issues, social issues and then you add the economic issues, I mean, they haven't even acknowledged that they support the Ledbetter Act yet. So, to that extent, they're not even --
ROMANS: And that was -- and that was -- you think that that was a -- that was a misstep this week?
HILL: Oh, a huge misstep.
ROMANS: Explain that a little bit.
HILL: Well, basically the Ledbetter Act allows women to fight for better wages and allows them -- it makes it easier for them to pursue legal means to get better wages on their jobs. They asked in a conference call if Romney supported that. They said we'll get back to you. That is not the right answer.
Now in all fairness, many Republicans -- it was a contested bill, so I understand why they wouldn't want to just jump in, but it made him look bad with a very weak voting base.
ROMANS: Well, let's talking about something else. So the war on women narrative, sort of switching a little, taking a new direction. Hillary Rosen, a CNN political contributor and Democratic strategist, made news this week when she took on Mitt Romney's wife, Ann Romney.
(BEGIN VIDEO CLIP)
HILARY ROSEN, DEMOCRATIC STRATEGIST: His wife has never actually worked a day in her life. She has never really dealt with the kinds of economic issues that a majority of the women in this country are facing in terms of how do we feed our kids, how do we send them to school? And how do we worry -- and why we worry about their future.
(END VIDEO CLIP)
ROMANS: So she got a lot of grief, a lot of blowback about that comment because the way this was perceived is that, until now, the war on women has been this cultural war on women, among grumpy -- the narrative is, at least, grumpy Republican men and their war on women. Now it's Democratic women who are targeting stay-at-home moms and it's a new twist on the war on women. HILL: To use will's phrase, I love the flipping of the script, in the same way that in the last thing they kind of ignored that all the men lost their jobs during the Bush administration, so there are only women left to lose the jobs. In this case, it's like no one was mad that Ann Romney stayed home. No one is attacking stay-at-home moms.
But it was the hubris with which she says, you know, I decided to stay home and not work and raise my children. Well, yes, you have $250 million. It is much easier to do that. It's not a sacrifice. It's not like most women who have to choose between feeding their children and taking care of their children.
CAIN: Live by the sword, you die by the sword. You play with fire, you get burned. If I could run five more cliches out here, I would.
CAIN: -- here's the deal, because here's the deal. The war on women has been a total bunk (inaudible) of nonsense from the beginning. There is no war on women.
ROMANS: Nonsense? What was that?
CAIN: There is no war on women. There hasn't been. There's been a debate over access and whether it means free in terms of birth control. There's been a debate over religious liberties, whether or not contraception should be forced on various businesses.
ROMANS: The polls show most women care about the economy and that is why the script flipped on the Romney camp this weekend.
CAIN: Yes, well, that's why I'm saying, using these horrible cliches, it's like if you want to divide Americans and play this game and pit us against one another and create false wars, well, when you do that, be prepared for this little mistake, these little mishaps you have in actually dividing women among themselves.
ROMANS: All right. You keep fighting for two minutes while we make some money on the commercial break. We're going to come back and talk about taxes. Because is taxing the rich the right thing to do? Does this make fairness in this economy or is it just a campaign gimmick? We're going to look at what's fair and what isn't when it comes to taxes.
ROMANS: Who is rich and what is fair? President Obama wants to tax the rich, insisting it is time for the wealthy and superwealthy to pay their fair share.
(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: It's just plain wrong that middle class Americans pay a higher share of their income in taxes than some millionaires and billionaires.
(END VIDEO CLIP)
ROMANS: His opponents call it a campaign gimmick. Soak the rich. That resonates in the polls they say, but it doesn't create jobs. Let's look at the facts. Who are these rich taxpayers? It takes earnings of at least $343,000 to get you there.
The top 1 percent of taxpayers? They pay 36.7 percent of all federal taxes. The 99 percent, everybody else, they make up the rest.
Here is the bottom line. You aren't going to fix the country's money problems by taxing the rich alone, but it is defining the Obama campaign.
Mark, even if you let the Bush tax cuts expire and the president gets his Buffett rule to tax the rich at 30 percent, you barely close the deficit. Is this a campaign stunt or is this good policy?
HILL: I think it's both. I mean, I think you're right that it's a campaign stunt. This isn't going to pass and even if it did it would just be one step toward closing the economic gap. We absolutely can agree on that.
But I do think it is fairness -- just because there is a policy that's a stunt doesn't mean that it's not principled and correct in its idea. The president is doing a right thing here. We have to create a fair tax structure.
And right now you can show a number that says, you know, the 1 percent pays 34 percent of all taxes, but they make like 50 percent of the money, 60 percent of the money. Based on that logic, they should pay their fair share. That's all we want is equity.
ROMANS: I don't know, Will. Let's look at how much they really pay.
What are the rich paying? The rich pay higher taxes in some cases than the middle class. When you look at the effective tax rates -- we can put up those numbers for you -- you can see it is the middle class pays, in many cases, a lower tax rate than the very wealthiest. Here we have Mitt Romney, his, in 2010 I think, was 13.9 percent. The middle class, 12.8 percent.
ROMANS: You have the top 1 percent. They pay 27 percent. And the top 0.1 percent pay 30 percent. This is the Urban-Brookings Tax Policy numbers for 2010. So what does that mean?
CAIN: It means that almost invariably the rich pay more in taxes than the middle class.
ROMANS: Both the tax rate and in dollars? CAIN: That's right, because the average effective tax rate of a wealthy person, the millionaires in this country, is about 19 percent. They pay about 19 percent of their income into income taxes, while your average middle class person pays something like 13 percent of their income into income tax.
The thing people don't understand here, Christine, is they don't understand the effects of marginal tax rates and effective taxes paid.
In other words, because you hear the rich guys' top tax rate is 35 percent, that doesn't mean he is paying 35 percent. And because you as a middle class American think your tax rate is 25 percent, that's not what you're paying either. You pay each marginal dollar minus deductions.
ROMANS: Yes, somebody this week tweeted me that, you know, gee, what I've learned is that we all need a better tax lawyer.
ROMANS: Because somehow we're all paying our tax rate that we think we are. No one else seems to be paying the tax rate that's advertised.
I want to talk about some polls that show that the president -- that people, Americans still hold President Bush and Republicans more responsible for economic problems than President Obama. It makes the Bush tax cuts for the wealthy an easy target, then, right? A fact not lost on President Bush himself.
(BEGIN VIDEO CLIP)
FORMER PRESIDENT GEORGE W. BUSH: I wish they weren't called the Bush tax cuts. If they were called some other body's tax cuts they are probably less likely to be raised. But if you raise -- if you raise taxes, you're taking money out of the pockets of consumers.
(END VIDEO CLIP)
ROMANS: First of all, I love the Bushism in that. The Bush tax cuts with a Bushism, I mean, some other body's tax cuts.
HILL: It does not stop giving. But, as always, President Bush is wrong on this. Right? And Republicans generally are wrong on this. I mean, there is this constant wolf cry from wealthy people, that if you raise our tax rate, if we have to pay one more dollar in taxes, then somehow the economy is going to collapse because we won't take risks, we won't create jobs, we won't do any of that stuff.
People always say what's fair? Fair is the sweet spot between raising taxes so that we have revenue, and people pay their fair share, but not inhibiting the business world.
ROMANS: Well, there's a big middle. There's the people who say don't raise taxes on the rich people or you're going to kill jobs and there are people who say we have got to make it fair. In the middle somewhere is a very complicated tax policy.
CAIN: (Inaudible) market (ph) on the crux of the debate, and it's the argument the Obama administration is putting forward, they're admitting it just doesn't have much of an effect on our budget deficit. We're talking about the Buffett rule. They think it is an emblematic symbol of fairness.
CAIN: Well, what is fairness? Americans need to decide what that is. One thing we all nodded our head at, a moment ago, is the tax code is overly complicated. That is not fair. We can all agree on that. And I don't think the Buffett rule does anything to help it. It only complicates it further.
ROMANS: Thanks, guys.
Coming up next we're going to look at what college degree carries the least debt, and later we're going to meet the women who won over millions of online shoppers and turned Gilt Groupe into an online phenomena.
ROMANS: This week we're looking at how college has become a critical investment -- that's right, an investment -- as never before. How soon you can pay off your student loans increasingly depends on how well you manage that investment and that starts with the major.
(BEGIN VIDEO CLIP)
ROMANS (voice-over): Laura Buffolino is not worried about finding a job after graduation.
LAURA BUFFOLINO, STUDENT, FARMINGDALE STATE COLLEGE: I've always been into science, never knew exactly what, but now I am pretty sure I want to work in genetics.
ROMANS (voice-over): A bioscience major at Farmingdale State College, Buffolino is in the fast-growing and high-paying STEM category. science, technology, engineering and math.
MICHAEL KELLY, STUDENT, FARMINGDALE STATE COLLEGE: A fairly neutral term.
ROMANS (voice-over): Her classmate, Michael Kelly, a history buff, doesn't share her love for science.
KELLY: I was just dead set on history, didn't want to major in anything else.
ROMANS (voice-over): He loves history, but will minor in it instead. His degree will be in technology studies so he can pursue a job in information technology.
KELLY: I didn't want to finish school with no debt and then immediately jump into a situation where I have a lot of debt.
ROMANS (voice-over): Kelly well knows starting salaries for general studies lag STEM. And by mid career the difference between, say, engineering and psychology, is huge.
ANTHONY CARNEVALE, DIRECTOR, GEORGETOWN UNIVERSITY CENTER ON EDUCATION AND THE WORKFORCE: If you're studying to be a petroleum engineer and you get a bachelor's degree, you'll make $80,000 a year. If you're studying psychology, and you're going to become a counselor in a social work agency, you'll make $30,000 a year. So what you make depends very much on what you take.
ROMANS (voice-over): But dollar signs aren't everything. Find the intersection of what you're good at, like to do, and what someone will pay you to do.
Nancy Zimpher is chancellor of the State University of New York.
NANCY ZIMPHER, CHANCELLOR, STATE UNIVERSITY OF NEW YORK: What we know is that businesses and industry are saying repeatedly we want creative people. We want problem solvers. We want people who can work in teams. The trick, I think, is sort of a dual degree or a major-minor, where you cover your bases.
ROMANS (voice-over): Students Laura Buffolino and Mike Kelly think they've done just that, and that their degree will help them land a secure job in a less-than-secure job market.
(END VIDEO CLIP)
ROMANS: So it's decision month now, a time when a lot of conversations going on around kitchen tables about which college to head to and how much debt it's going to take to get there.
Rick Newman is the chief business correspondent for "U.S. News and World Report."
And, Rick, we know it pays to study STEM. STEM is the mantra. According to the National Center for Education Statistics, college grads with a STEM degree make about 39 percent more than those with general studies degrees. Now, aside from choosing the STEM degree, because not everybody is cut out for STEM, what are some of the things people can do to make sure they're making the right choice?
RICK NEWMAN, CHIEF BUSINESS CORRESPONDENT, "U.S. NEWS AND WORLD REPORT": Well, obviously you want to know what the job market is going to be like when you graduate. Not everybody can predict that. But I think it is really important to keep in mind that learning needs to continue after college.
I mean, the most successful people in their 40s, 50s, and 60s are people who are continually learning. Things change really fast in this economy. We're not really sure what kind of jobs are going to be the ones in most demand 15 years from now, 20 years from now. Things change really fast. So you need to be somebody who is going to be able to keep learning, creativity is really important.
ROMANS: Adopting new technology, asking a lot of questions, always being on the edge of whatever is new, right?
NEWMAN: Paying attention to what is new and also paying attention to what is going on in different fields, kind of a multi-disciplinary approach. And, you know, it is not enough anymore to just know about one thing, to be an expert on one thing.
I mean, people really need to know in depth about two things, three things, know what's going on in some other field, see how you might be able to apply things from there to what you do, and really have a wide range of vision on what's going on in the job market.
ROMANS: Well, it's so interesting. Because careercast.com this week made a list of sort of the best jobs. Pay wasn't the only factor for this list. And guess what? Not all the jobs in the top five require a bachelor's degree. Do you think it's time to seriously consider if four-year college is right for everyone?
NEWMAN: Yes. That is a fun list. And by the way, our job is near the bottom of the list.
ROMANS: I know.
NEWMAN: (Inaudible) journalism, but I like my job --
ROMANS: Do as we say not as we do. Liberal arts journalism.
NEWMAN: That's right. But this is a good point. I mean, there are lots of careers that don't require that big check writing for a college degree but, you know, this is -- look at community colleges. They offer lots of things such as, I think, dental hygienist is one of the -- I mean, that is a specific type of training and that's a good field. Lots of other things like that.
There are now advanced manufacturing jobs that pay pretty well, don't require a college degree, but they do require the kind of training you might get at a technical school or a community college. You know, there are lots of things in towns and communities that I think people are just not aware of.
If you look around, see what employers are offering, a lot of times employers will be tied in with some of these local technical schools and things like that. There are lots of opportunities. You just have to look pretty hard to find them, I think.
ROMANS: All right, Rick Newman, nice to see you.
NEWMAN: Thanks for having me.
ROMANS: All right, coming up next, meet the two women who built one of the most fascinating start-ups of recent years and changed the way millions shop. The American addiction to online flash sales. There they are, Alexis Maybank and Alexandra Wilkis Wilson. They join us right after the break.
ROMANS: All right. We all shop online. But shopping on the Web while the clock is ticking is a relatively new phenomenon. Alina Cho is here with us. She was one of the first to go inside Gilt Groupe.
ALINA CHO, CNN CORRESPONDENT: Can you imagine? I mean, they made it into a game. What's more exciting than that?
ROMANS: (Inaudible) retail, (inaudible) online retail.
CHO: That's right. You know, it's called deadline shopping, and the idea really is simple. Websites like Gilt Groupe, Hautelook and Rue La La entice customers with high end designer labels at a great price. Essentially, they're bringing the sample sale concept to the masses. It's membership only.
And a big part of Gilt Groupe's success is driven by the fact that they've made shopping into a game. The sales start at noon. There's a limited supply and only a set amount of time to buy. Call it the mouse wars.
(BEGIN VIDEO CLIP)
CINDI LEIVE, EDITOR IN CHIEF, "GLAMOUR" People want a deal, but they also don't want the exact same deal that everyone else is getting, so the brilliance of these sites is it makes you feel like you and a tiny handful of other people have stumbled onto this great fabulous find.
PHILLIP BLOCH, CELEBRITY STYLIST: You get caught up in the fever of the moment, and people love it. It's like gambling of the horse races.
(END VIDEO CLIP)
CHO: Yes, that's for sure. Now, in the beginning Gilt hosted two to three sales a week. Listen to this, today, there are more than 22 sales a day, 5 million members and the site has grown to Gilt, man, you'll baby and kids Gilt home and jet setter, to name a few, for people who want high-end travel deals.
And take a look at Gilt's global reach. Shipping to more than 100 countries with an average of about 10,000 packages a day. Warehouses in Tokyo for Gilt Japan, and here at home in Las Vegas and Kentucky. And that one in Kentucky, by the way, 300,000 square feet, Christine, operated by robots. You don't even need human beings.
ROMANS: Unbelievable, to think it started by two women in a recession, selling things, little guilty pleasures. It's not a fad, by the way. Gilt (inaudible) the market value of more than $1 billion. It is the second most valuable ecommerce company after amazon.com.
Joining me now, two of the founders, who helped addict American women to online flash sales, and the authors of a new book about it. It's called "By Invitation Only." Alexis Maybank and Alexandra Wilkis Wilson, along with, of course, Alina.
Ladies, a thousand employees now? Is that right?
ALEXIS MAYBANK, FOUNDER AND CHIEF STRATEGY OFFICER, GILT GROUPE: Over a thousand employees.
ROMNEY: A thousand employees. You started with five of you in the middle of a recession. I want to go back to that day, November 13th, 2007, the first sale. The first sale that -- you say in the book most of us were worried about what would happen when the clock struck 9:00 Eastern that morning.
Would we have to take our heels off and put on flats so we could move faster to fill customers' orders and answer their questions? The truth is we were deeply afraid we'd sell nothing. But you sold and have been selling ever since.
MAYBANK: That's right.
ROMNEY: It's an amazing trajectory. What about starting something in the middle of a recession, something that's really been a boys' network until now, starting in e-commerce? I mean, what gave you the confidence to do it? Was it just the idea?
MAYBANK: Well, the first thing that really helped us, is we were pursuing an idea that we were really passionate about. We had a better understanding of the customer than almost anyone, because we shop this way already.
And so we were really going to what we knew. And that gives you a lot of confidence. If you're focusing on ideas you're passionate about and you feel equipped to understand the customer better than anyone.
CHO: You guys are growing so fast. I mean, a lot of people look at you and say, initial public offering? Is this a company that I'm going to be able to invest in? You must be talking to bankers about an IPO.
MAYBANK: We actually aren't at the moment.
MAYBANK: But in 2012, we discussed internally, with a possibility in 2013.
ROMANS: All right, 2012, talk about it internally. All right. So if anybody's looking to invest, there's your answer -- Alina.
CHO: You know, what I found interesting is part of the reason why you wrote this book is that a lot of customers were coming to you and not saying when are you going to sell that next Vera Wang dress, but rather how did you start your business, what made you do this, how can we do the same thing?
What I thought was so interesting was that you say, really, it comes down to your relationships, meaning your relationship, right, type A in different ways and also execution, meaning that ideas -- I loved when you said this. Ideas are cheap. Execution is key. It's really in the execution, right? And you were naive. That helped a lot, didn't it?
ALEXANDRA WILKIS WILSON, FOUNDER AND CHIEF MERCHANDISING OFFICER, GILT GROUPE: Yes, naivete can sometimes help. And we were a team of five co-founders, and as you said, relationships were critical. First of all, they helped us hire and grow our team. They helped us to build our membership because we didn't have a big marketing budget.
Our initial members were all of our friends and our friends' friends. And then ultimately it was relationships with the designers and the fashion community that brought all them on board. Zack Posen was our first designer. And then we were really off to the races.
CHO: Yes, in fact, I did not know that. I was surprised by that. And we were talking about this earlier, Zack and I e-mailed, and he said -- I said, all these years later, are you still with Gilt? And he said, yes, are you kidding me? I love Gilt. So there you go. The proof is in the pudding. I mean, that's pretty amazing, though. But it took a leap of faith for him, didn't it, in the beginning?
WILSON: Well, Zack Posen was a pioneer. And after that, I mean, at this point we have 6,000 brands that are working with us, but having him on board is the first -- really helped us to get all the brands to follow.
MAYBANK: The world was so different in 2007, so as we were going out and presenting the Zac Posens of the world with our business idea, most of them weren't selling online.
ROMANS: When a lot of people hunkered down, didn't want to start anything new, you did. And a lot of people are saying women in this economy, this is the way it's going to be. You're going to have to make it for yourself. Now what do you think about that?
UNIDENTIFIED FEMALE: I think it's -- there's a lot to be said about that. And in this case if I look at the economy today, there's 20 percent women-run businesses. The dollars flowing from investors, though, to women-run businesses are only 4 to 9 percent.
ROMANS: How can that be? Because women-owned businesses are so small, generally. They don't get as big as yours.
UNIDENTIFIED FEMALE: And it can be tougher and more intimidating as a woman to raise capital, without a doubt.
CHO: One thing that was really so interesting to me, back when I first talked to you guys, was the fact that, back in the day when you started, it was very difficult to get consumers to wrap their heads around the idea to buy something online without being able to try it on, like the traditional sample sale. Right? And so you really took that whole let's show the product off to a different level. You really made it editorial, didn't you?
UNIDENTIFIED FEMALE: We invested a lot in the photography. We started shooting all the apparel on models, which was something that was not common back then. And we very quickly built a trust with our customer base. Amazing brands, really good prices, and we made it easy to return if for some reason something you bought didn't fit.
ROMANS: So nice to meet both of you. Alina Cho, thanks for coming on board. Have a great Saturday, everybody.
ROMANS: Back now to "CNN SATURDAY" for the latest headlines. Have a great weekend, everybody.