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YOUR BOTTOM LINE

The Battle for Ohio; Capitalism on Trial; Rebuilding After Sandy

Aired November 3, 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: Thanks, Randi. See you at the top of the hour.

Good morning, everyone. I'm Christine Romans live today from CNN studios in New York.

Americans are looking for the president who is going to get this economy soaring again. So who should you choose?

(BEGIN VIDEOTAPE)

ROMANS (voice-over): We're hours from the election. These men are delivering closing arguments, making their final case for your vote.

It's an election about the economy. So let's look at the evidence.

Jobs. President Obama's argument, he's gained back every job lost under his watch. That's quite a feat.

But Romney says, not good enough.

MITT ROMNEY (R), PRESIDENTIAL NOMINEE: We're going to create 12 million new jobs and more take-home pay.

ROMANS: How is that possible? Major economic growth. The economy grew at a 2 percent annual rate during the third quarter, better but not nearly enough to significantly boost hiring.

Romney will need much more than that to keep his jobs promise.

How about housing? Prices in some areas are rising, foreclosures slowing.

But this is America and what will really get the economy going again is you. Consumer spending rising, consumer confidence the best in four years.

There's no doubt President Obama inherited an economy in crisis, and his supporters will tell you he's turned things around.

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We have made real progress.

ROMANS: His final argument: he deserves another four years to finish the recovery. Mitt Romney says his business experience and his big ideas are what America needs.

You've heard their closing arguments. Now it's decision time.

(END VIDEOTAPE)

ROMANS: And that makes you the jury, and the jury in Ohio may determine the fate of the nation for the next four years.

In Ohio, that's where we find my good friend Ali Velshi, CNN's chief business correspondent. And CNN contributor John Avlon is there with him as well.

Gentlemen, you have to go back to, what, 1960, until you find the last time the winner of Ohio did not end up in the White House.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

ROMANS: Unemployment rate in Ohio 7 percent, guys. That's below the national average. It was 8.6 percent when President Obama took office. Then it shot up to more than 10 percent.

Ali, that looks like a positive trend for the president. So, how does Governor Romney make the case that it would get way better way sooner if Ohio makes a change for Romney, Ali?

VELSHI: Well, he does it by approximating to some degree. He does it by saying this state has prospered under a Republican governor.

Look, this is a state that is split. It's a virtual dead heat. Obama's got a bit of a lead, but as you know it's within that statistical margin of error, so it could be a few points off one way or the other. It is going to come down to who comes out to vote.

So, these last few days will be about encouraging those who have already decided. There's very little left in terms of evidence as to what you could do to possibly tell people I'm your guy. The question is, you are sort of leaning towards me, do I go out and do it?

Mitt Romney has made some errors in the last week or so in Ohio, particularly with this issue of Jeep and Chrysler, getting money in the auto bailout and supposedly transferring manufacturing, having intention to transfer manufacturing to China. That is not playing well in Ohio.

ROMANS: All right. Let's talk about how the polls are playing in Ohio, John Avlon.

It's not possible to overstate the importance of Ohio in determining who is going to win Tuesday. No Republican has ever won the presidency without taking a state.

Let's take a look at very latest data we've got. A CNN/ORC poll of likely voters, John, shows President Obama with a three-point lead, but that's still inside the margin of error. This is a dead heat. That's why we call them swing states.

A separate NBC News/"Wall Street Journal"/Marist poll shows a wired margin for the president, a six-point lead.

John, do one of these guys have the clear momentum heading into Tuesday, or is it still just absolutely up for grabs?

JOHN AVLON, CNN CONTRIBUTOR: Well, Christine, let's put all the partisan spin aside because there's a lot of that going on in these final days and hours of an election. What we've seen in the polls is President Obama having a small but steady lead. Mitt Romney has been unable to kind of reverse that momentum here in Ohio.

And there are a couple different reasons for it. Take a look at poll. It's very interesting, President Obama big lead with women. Governor Romney, big lead with men. Governor Romney has a two-point edge with independent voters in our poll, but President Obama has an almost 20- point lead with self-described moderate voters.

VELSHI: That's interesting that there's a distinction those two.

AVLON: Yes, it's a very important distinction and it hasn't happened in political history. There's a split in part because of the Tea Party moving independents to the right.

But here's the big picture on how politics and economics interconnect here in Ohio.

We're just in the Toledo where the Jeep Plant is. Unemployment was 13 percent in that city when President Obama took office. Now it's at 7 percent rate.

Manufacturing, the middle class, these are the sweet spots of a Democratic pitch, and they have been able to say that Mitt Romney, this is a state where the Bain ads have had an effect, would not be a good steward of that reinvestment. President Obama's core argument here is economic and it's also saying, look, the policies that Mitt Romney will put in place are the same policies that got us in this mess, the Bush administration and reminiscent of some of the people who've come in Ohio in the past and facilitated outsourcing. Those are raw politics of this that are fueling the ground game right now.

ROMANS: All right. Let's talk about the numbers. The U.S. economy added, guys, 171,000 jobs in October as you both well know, surprisingly strong number. It may end up being the final political football in this race. It's really the last thing you can give a speech on or cite a press release on.

VELSHI: Yes.

ROMANS: Both candidates wasted, Ali, no time spinning the numbers. Listen.

(BEGIN VIDEO CLIP)

ROMNEY: He said he was going to lower the unemployment rate down to 5.2 percent right now. Today we learned that it's actually 7.9 percent, and that's 9 million jobs of what he promised.

OBAMA: This morning we learned that companies hired more workers in October than at any time in the last eight months.

(END VIDEO CLIP)

ROMANS: So, Velshi, do voters care about the last jobs report, or is it their personal jobless rate that matters? It's either 1 percent or 100 percent, and you're listening to the noise about it around?

VELSHI: Yes. Well, yes, and there's a lot of noise about it. And it was one of those jobs report where you can spin it either way you wanted to, right?

If you wanted to say the unemployment rate is higher, you could, as the Romney camp did. They didn't mention -- all day, they didn't mention the 171,000, and you didn't hear the unemployment rate being discussed by the Obama campaign.

What we found on the road from Florida, all the way through the swing states, through Virginia and to here is that largely people are interested in two things with employment, their own trend and their community's trend, right? Because they know they prosper, particularly small businesses, if unemployment is lower in their community.

So, we were in Florida where the unemployment rate is higher than the national average, but housing had improved and things were looking better. We were in Virginia, where unemployment is lower, but a lot of that is due to government spending. And now, we're in Ohio where as you know, in Youngstown, that Lordstown plant was almost shut down. Now, it's got three shifts making the Chevy Cruze.

ROMANS: Yes.

VELSHI: In Toledo, the Jeep plant. You know, they associate this with jobs and prosperity, and the auto industry and the other manufacturing industries, what you have is generations of people working in those industries. So the trend does actually matter, and the trend favors President Obama right now.

ROMANS: So John, you close it up for me. Ohio, you guys are there. It is so important.

I mean, people in Ohio must feel like the belle of the ball. Everybody wants their vote. They have spent so much advertising money.

VELSHI: They know it.

ROMANS: You know, if Romney loses Ohio, John, can he win the election?

AVLON: The path is very, very, very difficult without Ohio, and that's why the Obama camp has made it a firewall, which is the reversal of political trends in the past. Usually, Ohio is the Republican firewall in the election.

Look, a couple things to look at, yes, the economic trend. The fact that Ohio use unemployment rate is lower than the nation's, that's very rare, that hasn't happened in decades.

The second thing to keep your eye out is ground game. Obama campaign has invested heavily in early voting, and polls show that they've been rewarded for that. Around a quarter of the population had voted early, and President Obama had a very significant lead among those voters.

ROMANS: Right.

AVLON: So the Romney camp is going to be all about Election Day. That's their long ball, but it could not be closer. Every vote matters here in Ohio. Both camps doing everything they can to get out their vote on Tuesday.

ROMANS: Every vote matters everywhere. I always like, get out and vote, everybody. Vote early.

VELSHI: Right.

ROMANS: Guys, we're going to talk to you again at 1:00 Eastern Time. So I'll see you again soon. Thanks for dropping by this morning.

A smaller more efficient government or an invisible hand to assist and protect those in need? President Obama and Mitt Romney, you guys, they have very fundamentally different visions of government and what it should do for you. It is capitalism on trial. Which version will you choose?

(COMMERCIAL BREAK)

ROMANS: With three days now until the election, both candidates offer a fundamentally different vision of America. The question for voters: which brand of capitalism do you want?

Mitt Romney is pledging smaller government, less regulation. He says that will unleash the power of the private sector.

President Obama says government needs to be there to help those who have fallen behind and make sure that everyone gets a fair shot.

(BEGIN VIDEO CLIPS)

ROMNEY: We've almost forgotten what a real recovery looks like. What Americans can achieve when we limit government instead of limiting the dreams of our fellow Americans.

OBAMA: As long as there are families working harder but falling behind, as long as there's a child anywhere in this country who is languishing in poverty and barred from opportunity, our fight goes on.

(END VIDEO CLIP)

ROMANS: It's time to choose your capitalism, folks. Voters say the number one issue in this election is jobs, the economy.

But many of the economic forces at play have been building for decades. Not the past four or five years. Globalization has sent millions of U.S. jobs overseas. A struggling education system has left many Americans unprepared for the high-tech knowledge jobs of today.

And income inequality is growing. The wealth gap between the richest Americans and the typical family more than doubled over the past 50 years.

A recent report from the Economic Policy Institute found the rich were 288 times wealthier than the median household in 2010.

Eduardo Porter is a columnist for "The New York Times."

Welcome to the program.

You know, you say in America we've built a more cut-throat form of capitalism than other industrialized nations. As you put it, quote, "More than citizens of other countries, we tend to believe that success, like failure, is deserved."

But, Eduardo, will the outcome of this election really change the fundamental nature of our government, of the kind of capitalism we've created?

EDUARDO PORTER, COLUMNIST, THE NEW YORK TIMES: Well, I would say no because the capitalism we've created is not a function of a Democratic administration or a Republican administration. In fact, over the last 30 years through Democratic and Republican Democratic administrations, we have built a form of capitalism, say, that is consistently different from -- you know, that that's been experienced in many other parts of the industrialized world.

And so, the fact that our capitalism is somewhat harsher with kind of like some social outcomes that are worse than you see in other industrialized countries, it's not a Democratic or Republican construction. It's a construction that we've done over three decades.

You know, you said the U.S. safety net is worn out. You know, when it comes to spending on social programs, the U.S. ranks 25th of 34 developed nations. European nations like France, Sweden, Austria, they spend much more on the U.S. social net as a percentage of their economy.

But, you know, Europe's economy is in recession. The U.S. is still growing. Maybe that's proof that our cut-throat version of capitalism works despite the social costs.

PORTER: Well, I would argue that one of the reasons that the American economy is now growing is that the government has done substantial stimulus spending, whereas one of the reasons that Europe is in such bad shape is that they have actually been cutting government spending from their former baseline.

So, in fact, in the past couple of years, the trends have been -- have been opposite what they have been for 30 years. The Europeans have been much more austere, you know, countries like Britain cutting government spending whereas in the United States there was a big effort, which is now sort of like dwindling, but there was initially a very big fiscal stimulus effort at a monetary stimulus, which I think have contributed.

ROMANS: Just 30 seconds left, the fundamental issue here is Americans want the benefits of big government. They want their Medicare, Social Security, jobless checks when they need it, loans to buy a house, loans to go to college.

But they also want small government, and that small government thing resonates, you know, we don't want to be like Europe. You know, it's almost a case of politicians lying to voters in some cases. They basically tell us we can have everything.

PORTER: Well, that's right, and, you know, the small government desire is very well entrenched in the United States, and that is a very -- a very strong political driver. So when you tell them, look, you know, if you increase the tax take by, you know, 10 percent of the economy, you'll be able to get these better social outcomes, the first thing they see is higher taxes, and there's a very strong reaction against that.

ROMANS: All right. Eduardo Porter of "The New York Times" -- nice to se you this morning. Have a really great weekend. Thank you.

PORTER: Thanks for having me.

ROMANS: All right. This election will likely be decided by a handful of key battleground states. One of them, my home state of Iowa. So, why is a state with one of the lowest unemployment rates in country, why a place where jobs really aren't a problem, why is it up for grabs?

We're going to head there to find out, next.

(COMMERCIAL BREAK)

ROMANS: A hand full of swing states will likely decide this election. Let me show you just how different these states are when it comes to jobs.

Let's head out west first, Nevada. The highest unemployment states of the tossup states, 11.8 percent. Colorado, closer to the national average at 8 percent.

Ohio, we just told you, we just told with Ali and John Avlon, 7 percent there in Ohio. The unemployment rate has been drifting lower. And in Florida, 8.7 percent.

Finally, Iowa, my home state, it has one of the lowest jobless rates in the country at 5.2 percent. There the problem is finding workers.

My friend Poppy Harlow is in Des Moines this morning. Poppy, you know, that seems like a good problem to have, finding workers. A 5.2 percent unemployment rate is enviable.

POPPY HARLOW, CNN BUSINESS CORRESPONDENT: It is. But it's not just about that top line number here, you know, Christine. We were at a local small business, they make steel products, and the guy there told me, you know, I'm having a hard time finding the people with the skills to fill my jobs. At the same time, he is enormously concerned about the deficit, about government spending, and about debt. He told me if I ran my business the way the government runs its house, I'd be out of business.

And that is what we hear across Iowa, city to city, whether they lean right or left, they hate the debt here, and I spoke to this one guy in Des Moines, Bob Bradshaw. I think he sums it up pretty well. Listen.

(BEGIN VIDEO CLIP)

HARLOW: Is it the jobs or is it the deficit?

BOB BRADSHAW, ROMNEY SUPPORTER: Both. You know, if we're not bringing it in, we shouldn't spend it. And if it's, you know, tough on us to make it better for our kids, I'm willing to sacrifice now to make it better for our kids.

(END VIDEO CLIP)

ROMANS: So interesting. And also people talk about the quality of the jobs, too, right? So even though the unemployment rate is 5.2 percent --

HARLOW: Yes.

ROMANS: -- they're worried about how much debt we have, the deficit. They're also worried that the quality of the jobs that are available aren't maybe what they used to be.

HARLOW: They are. And they said, look, Poppy, it's not just about that 5.2 percent, it's about the jobs that we're getting that are being created. They're lower paying jobs, so the hours are less. And that's a very big deal here, Christine.

ROMANS: All right, Poppy Harlow in Iowa. Thanks, Poppy.

All right. Hurricane Sandy destroyed homes, cars, and lives. As people pick up the pieces, who picks up the bill? I'll have the answer right after this.

(COMMERCIAL BREAK)

ROMANS: A live picture of New York City, Saturday morning in New York City just days after superstorm Sandy ripped through the East Coast. We're here with a live edition of YOUR BOTTOM LINE.

Look, this is far from over here. Catastrophe experts say the storm could rack up $50 billion in damages. Millions of you are still without power. And the paper work is just getting started.

(BEGIN VIDEOTAPE)

UNIDENTIFIED FEMALE: We lost our house, our pool, and God only knows what else.

UNIDENTIFIED MALE: Unbelievable. It's like a war zone.

UNIDENTIFIED MALE: I'm not exactly sure where to go from here besides calling the insurance company.

ROMANS (voice-over): That's the first step. Then comes calculating the loss and cashing the check. In Sandy's wake, tens of thousands of homeowners are now asking if a tree falls in a hurricane, who pays?

JEANNE SALVATORE, SR. V.P. INSURANCE INFORMATION INSTITUTE: If the tree hits your house, you call your insurance company and file a claim. You're going to be covered for the damage that that tree does to your house, for anything that's in the house, and for the cost of removing that tree.

ROMANS: Jeanne Salvatore of the Insurance Information Institute.

(on camera): How does wind damage -- that comes under your homeowner policy.

SALVATORE: Correct. Wind is covered. I mean, wind is one of those standard disasters that's covered.

ROMANS (voice-over): With Sandy's wind, came water.

SALVATORE: Most people buy flood insurance from the National Flood Insurance Program. So if you have a flood insurance policy, you're going to be covered for that.

ROMANS: About 14 percent of home owners in the Northeast have flood insurance. More than the 5 percent who were covered when Irene howled through.

(on camera): Will some people who don't have flood insurance be able to get relief from the federal government?

SALVATORE: People need to get in touch with FEMA and to find out what is available to them. There might be some sort of disaster aid or loans.

ROMANS (voice-over): Another enduring image of Sandy: flooded cars.

SALVATORE: You're covered for a lot of natural disasters under the comprehensive portion of your car insurance. So that's going to cover wind damage, it's going to cover flooding.

ROMANS: Keep notes. Find as many receipts as you can. Be thorough with the claims adjuster. No damage is too small to mention.

Keep your patience and perspective.

UNIDENTIFIED MALE: A home can always be rebuilt. As long as we have our lives and we're safe.

(END VIDEOTAPE) ROMANS: Well said. Millions of Americans have been affected by Sandy, but millions more will be affected by a very different kind of impending disaster. This one will not cost lives and property. I want to be very clear about that. But it will have powerful consequences.

I'm talking about the fiscal cliff. If Congress and the president don't act by the end of the year, nearly all of you, 90 percent of Americans, will see your taxes rise by an average of $3,500 per household, $109 billion in automatic spending cuts will go into effect, cutting all kinds of programs.

What about disaster relief? And the Congressional Budget Office says our economy would be pushed back into recession.

I want to put Congress on notice here. This week, we saw something unbelievable. And I'm not talking about simply these homes swallowed by sand and water, trees pulled from their roots, Lower Manhattan's skyline darkened. Horrific images in America.

And we also saw bipartisan cooperation. New Jersey Governor Chris Christie, one of the president's fiercest critics, put aside his political differences with the president for the good of the people, for the good of his residents. President Obama toured the devastation of the Jersey Shore.

Both men heaping praise on each other.

(BEGIN VIDEO CLIPS)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I cannot thank the president enough for his personal concern and compassion for our state and for the people of our state, and heard on the phone conversations with him, I was able to witness it today personally.

OBAMA: I think the people of New Jersey recognize that he has put his heart and soul into making sure that the people of New Jersey bounce back even stronger than before.

(END VIDEO CLIP)

ROMANS: Those people all there, all Americans, all solving a problem together. It took a devastating superstorm to bring our political leaders together.

Congress, pay attention, because the fiscal cliff is coming. It's time to fix it. Otherwise, come next election, the American people will be your judge and jury.

I'll be back later today on "YOUR MONEY" with host Ali Velshi at 1:00 p.m. He'll be live from Columbus, Ohio. I know you've got some smart questions and opinions, you always do. Tweet them to me now, post them on our Facebook page, and I'll try to get them to you when we see you later this afternoon.

"CNN SATURDAY MORNING" with Randi Kaye continues right now.