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YOUR MONEY

Exceptional War of Words; Saudi America; iPhame or iPhlop?

Aired September 14, 2013 - 09:30   ET

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


CHRISTINE ROMANS, CNN HOST: A war halfway around the world redefining President Obama's second term.

I'm Christine Romans. This is YOUR MONEY.

In a moment, I'll be joined by John King, CNN's chief national correspondent, and Nick Kristof, a Pulitzer Prize-winning columnist for "The New York Times."

But, first, candidate Obama campaigned on getting the U.S. out of wars in the Middle East. He argued it was vital to focus on a domestic agenda meant to help Americans reeling during the financial crisis. President Obama is now making the case for military action in Syria.

A president accused of apologizing for America now touting America's greatness.

Here is what CNN "CROSSFIRE" co-host Newt Gingrich said during his run for the Republican presidential nomination back in 2012.

(BEGIN VIDEO CLIP)

NEWT GINGRICH, FORMER PRESIDENTIAL CANDIDATE: I stand for American exceptionalism. I believe in the Declaration of Independence. I believe in the Constitution. I believe in the Federalist Papers.

It's clear the president believes in Saul Alinsky and European socialism. The gap is this big.

(END VIDEO CLIP)

ROMANS: But this week, President Obama cited America's exceptionalism as he made the case for action in Syria in his address to the nation.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: But when would modest effort and risk, we can stop children from being gassed to death and thereby make our own children safer over the long run, I believe we should act. That's what makes America different. That's what makes us exceptional.

(END VIDEO CLIP)

ROMANS: Russian President Vladimir Putin takes exception with President Obama's claim of American exceptionalism. He responded to the president's speech in an op-ed in "The New York Times" titled, "A Plea for Caution from Russia."

Quote, "I would rather disagree with the case he made on American exceptionalism, stating that the United States' policy is what makes America different. It's what makes us exceptional. It is extremely dangerous to encourage people to see themselves as exceptional, whatever the motivation."

John King, it's five years after Lehman's collapsed, yes we can and bail out. Guantanamo is still open and President Obama is making a case to launch missile into Syria, while citing America's exceptionalism.

Is Putin somehow more in touch with the feelings of Democrats who made this president a two termer?

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Well, Democrats are angry at President Putin, even though many of them might share some of his observations. Look, Christine, the president is in a very difficult box here. George H.W. Bush left a note for Bill Clinton when he was leaving office, saying you may want to focus on domestic issues. But every problem in the world is going to cross your desk.

And President Obama is dealing with that now -- a man who defined himself in national politics by being anti-war, get the American military presents out of the Middle East as soon as possible. Now, contemplating military strikes in the Middle East, at a time, let's be honest, he was struggling in the presidency before this. He is in the second term. The economy is recovering, but not as robust the fashion as he would like.

The American people are split on his leadership. The country is divided politically anyway. You have the IRS controversy. You have the NSA controversy.

So, the president was in a political box anyway. And then comes this, very, very difficult.

ROMANS: A war-weary population, also a jobs-weary population.

Nick Kristof, the polls show the public still favors focusing on a domestic agenda over intervention in Syria. Has Putin managed to outmaneuver the president here?

NICHOLAS KRISTOF, THE NEW YORK TIMES: Well, I mean, I think Putin overplayed his hand. I wonder when you have an op-ed like this, whether it's really written by a public figure like Putin or whether this came out of his press advisors. And, frankly, I thought it seemed authentic because no press advisor would ever suggest denouncing American exceptionalism in a message to Americans.

And so, I think there really was a kind of a backlash that weakened his case. I thought he came across as, you know, very smart and very shrewd and kind of arrogant himself.

ROMANS: You know, John, public opinion and many of the president's fellow Democrats in Congress frankly remained oppose to military action in Syria. So, that immigration reform, gun control, avoiding a government shutdown this month, creating jobs. Does an uphill battle on rallying support for Syria put the president's domestic agenda at risk, John?

KING: A bit in the sense that Washington, whether you like it or not, tends to only be able to do one thing at a time. That's not right. It shouldn't be the case. But it often is the case in Washington.

As I noted, Christine, the president was in a tough political position anyway. Immigration reform already was a huge question mark. He is trying to just keep the government running. There is nothing on the horizon right now. Remember, there was supposed to be a grand bargain. The president was going to get to the structure problems and entitlements that are such an issue in our economy. The president was going to get to the tax questions in our economy -- in our government that are such a big question to the economy.

Forget about all that. The president is trying to keep the government open, keep the status quo with the Republicans who run the House of Representatives right now and get into the mid term election campaign. His health care law is at controversy. And now this.

In an odd way, in an odd way, let me be somewhat of an optimist after being such a pessimist for a moment there. At least in the Syria debate, people are having conversations, some of it is politics, but much is a debate about the power of the presidency versus Congress, whether Syria is in the U.S. interests. There have been public hearings.

It's not all perfect, but at least there have been conversations. If the members of Congress who disagree on the profound issues like this could have these conversations on other issues, it would be helpful. Will it happen?

ROMANS: You know, Nick, it's interesting, the idea of this is Syrian and U.S. interests. I mean, for many Americans what's in their interests is a job market that's doing better. They are war weary and they are jobs weary. And that's what it really comes down to. It's hard for them to focus on the idea of the president and military action in Syria when they want action on jobs, Nick.

KRISTOF: Yes. And, you know, I think frankly it seems to me if there is something that the backdrop is a bit of a way of isolationism.

And we periodically have seen this in history. Pew survey says that this is common in waves. But right now, it's the biggest they have seen in 50 years.

I was struck by one survey earlier this year when Democrats and Republicans alike agreed that the single area of government that should be cut the most is foreign humanitarian aid, which accounts for only about 1/2 of 1 percent of the budget. The second choice for budget cutting was the State Department and, you know, foreign service, and who recently has had fewer members than the Pentagon has had in its bans.

So, these are kind of tiny areas.

But there is this weariness with the world, weariness with fighting, kind of compassion fatigue, as well, in a sense that if we're going to do nation-building, we should do it right here at home. At the end of the day, though, I mean, I sympathize with it, I share that view, but you can't turn your back on the world or it will come back and bite you.

ROMANS: I like to think that the nation can do more than one thing at a time. And maybe they're only talking and fighting politically about one thing at the time, but we've got a whole host of things coming up, budget fights, debt ceiling, all this drama and what's happening overseas. They will be forced to do more than one thing at once.

Nick Kristof and John King, so nice to see both of you. Have a great weekend.

KRISTOF: Thank you.

ROMANS: It's a nightmare scenario. The world's biggest oil producers dragged into the conflict in Syria issue. Saudi Arabia and Qatar backing the rebels. Iran and Russia backing the al-Assad regime. But are your gas and energy prices finally immune to Middle East conflict?

Former energy secretary and U.N. ambassador, Bill Richardson, joins me next. We're going to find out if promises of U.S. energy independence are now finally a reality.

(COMMERCIAL BREAK)

ROMANS: Volatility is back. Events are moving fast as a possible diplomatic solution could now potentially avert a U.S. military strike on Syria. And in both the oil market and stock market, investors still on edge, fears of potential U.S. military action and instability pushed oil prices to a two-year high.

Now, Syria isn't a major oil producer. But some investors worry that the conflict could spread to neighboring countries.

(BEGIN VIDEO CLIP)

TOM KLOZA, CHIEF OIL ANALYST, OPIS: The nightmare scenario is if you have an all out Mid Eastern war that includes the Persian Gulf. And under those circumstances, you could see the price of crude be an obstruction and go to $140, $150 a barrel.

(END VIDEO CLIP)

ROMANS: Oh, and that would not be good for drivers, of course.

Now, the threat of fighting the Middle East brings up the images like these from the 1970s. Cars stretched around the block waiting for gas.

But the U.S. is not as dependent on Middle Eastern oil as it used to be. America is producing more of its own oil. It is using less and that means fewer imports from overseas. Today, imports account for 40 percent of the oil and gas consumed in the U.S. that is down from 60 percent as recently as 2005.

Most of the oil coming in isn't from the Middle East. In fact, the top exporter of the U.S. is -- that's right -- Canada. Canada is the largest exporter to the U.S. Saudi Arabia is number two, followed by Mexico, Venezuela and Russia.

Bill Richardson was energy secretary under President Clinton. He's also the former governor of New Mexico and served as U.S. ambassador to the United Nations.

So nice to see you, Governor Richardson.

You know, it's a big question. Whenever you see the kinds of concerns about Syria, it brings to mind those pictures of the 1970s. This isn't the 1970s. America is closer to energy independent.

How does that change the calculation for this president?

BILL RICHARDSON, FORMER ENERGY SECRETARY: Well, short range, Middle East instability, what's happening now, the volatility is going to increase oil prices more -- higher prices at the pump.

Our base is strong. Long-range looks good, but short range, this instability --

ROMANS: Yes.

RICHARDSON: -- is a problem not just for a producer country like us, but for consumer countries, Europe and Japan.

ROMANS: You know, the president has made this U.S. energy independence. He's made that a key goal.

I want to play a little bit of something he said during the State of the Union.

(BEGIN VIDEO CLIP)

OBAMA: Today, no area holds more promise than investments in American energy. After years of talking about it, we're finally poised to control our own energy future.

(END VIDEO CLIP)

ROMANS: At the same time, he is infuriated many Republicans by delaying approval of the Keystone pipeline. Former House Speaker Newt Gingrich recently tweeted this, where he said, "Keystone pipeline, yes. Attacking Syria, no. Obama has it exactly backwards. America's interest is to increase American energy and jobs."

So, I ask you, does another potential Mideast war make the case for more domestic energy production and put pressure on this president to approve Keystone? RICHARDSON: No, I don't think it's related. I think what we have is a dramatic increase in shale gas and natural gas that is going to cover us. That is going to make it OK. The president can make a Keystone decision independent on that. The supply is going to be sufficient.

What I think is happening in this country, which is positive, is again more oil and gas extraction, but also a dramatic growth and renewables and solar, wind, bio-fuels. The standards for gasoline, electric cars.

ROMANS: You know, you were U.S. ambassador to the United Nations. How would you deal with Syria right here?

RICHARDSON: Well, I support the president. I think we should proceed with the military strikes. At the same time, if there is a diplomatic solution, yes.

I'm very skeptical of Russia. I'm very skeptical of Syria. I think there has to be international inspectors in a diplomatic solution. Not political inspectors, very technical. I think it's got to be comprehensive.

But across the board, I think the longer range is this man Assad is not good for the international community.

ROMANS: Public opinion is just not there, yet, though, to support a strike. You look at the polls. Public opinion is just not there.

RICHARDSON: We are war weary -- Iraq, Afghanistan, people want money spent at home on education, on issues relating to job creation. I don't blame them.

But at the same time, we do have international responsibilities and it does affect American national security. It affects Israel, a close ally. It affects the region that you've mentioned is critical in terms of energy supply. United Arab Emirates, Saudi Arabia, our allies in the region. Europe receives a lot of the oil, Japan.

So, America is still the inn dispensable nation. We have to do the stuff that nobody else wants to do because it's our international responsibility because of our size and power and moral leadership. This is a human rights issue. This was a war crime. These strikes were limited. We're not getting boots on the ground.

But, again, it's extremely, extremely volatile.

ROMANS: Governor Richardson, thank you for joining us.

Coming up, what do you think of the new iPhone? Investors were not impressed. And what's about that finger print sensor? How secure is it? We fire up the iPhone, next.

(COMMERCIAL BREAK)

ROMANS: In less than 140 characters, Twitter announced it's filing to weekend a public company and sell shares to the public. But shhh, this filing is confidential. The micro blogging site is able to keep it private under a provision of the Jobs Act because it makes less than $1 billion in revenue a year.

Twitter will have to make some of the information public 21 days before it starts pitching the stock sale to investors. And with the recent run-up on shares of Facebook and LinkedIn, Twitter could be the next hot property.

But the week in tech belonged to Apple. Biggest day of the year for Apple. That's how one analyst described Tuesday's event. It was a colorful launch, for not one but two new iPhones.

By Wednesday, Apple shareholders were seeing nothing but red, though, as the stock dropped 5 percent and some responses on social media, they weren't so bright either. But still, this is Apple we're talking about.

(BEGIN VIDEOTAPE)

ROMANS (voice-over): Here it is, in a highly anticipated event at Apple headquarters in California, CEO Tim Cook unveiled Apple's newest flagship device, the iPhone 5S.

The main features? It will come in three colors -- silver, gold, and space gray. It has a new A7 chip inside, which Apple says makes it twice as fast as the previous iPhone. And improved camera features a better image stabilizer and bigger flash, and as rumored, a fingerprint sensor called Touch ID.

BOB O'DONNELL, VICE PRESIDENT, IDC: The history of fingerprint sensors on notebooks isn't very good, but this is a different technology. So, until people have a chance to use it, that will be the big question.

ROMANS: One of the best features? Pricing. The new iPhone 5S stays the same as previous models, starting at $199 for the 16 gigabytes with a two-year contract. Apple also unveiled a new cheaper model, the 5C. It's made of plastic with a four-inch display, comes in a rainbow of colors -- green, white, blue, red, and yellow. The 16 gigabyte model is just $99 with a two-year contract.

Online reaction was mixed. One tweeter posted, "iPhone 5C made from hard-coated polycarbonate, fancy name for cheap plastic."

Another asks, "When can I get my fingerprints on this thing?"

The new iPhones hit stores September 20th.

(END VIDEOTAPE)

ROMANS: There's a lot of buzz online about the fingerprint sensor. In particular, Zain Asher is here to take us through some of the details.

What if you want someone else to access your phone, like your spouse, or you want to be able to read your teenage daughter's phone material, for example? Are there, I would say, caveats for that?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: Yes, absolutely. So, you can actually register more than one thumb print. If you want your husband or your wife to have access to your phone, that's not a problem.

Secondly, you can actually bypass the thumbprint sensor. So, you can opt for a traditional passcode instead. But don't worry, Apple has thought of all of these things.

(LAUGHTER)

ROMANS: The other thing people talk about is security, how vulnerable will this be if the sensors can be hacked, to cyber thieves?

ASHER: OK. So, you have to remember the thumb print is going to be encrypted and it's going to be stored on the actual phone in a chip on the actual phone. It's not going to be stored on Apple's server somewhere or somewhere in the iCloud. It's going to be on the actual phone.

ROMANS: So, is it a safety upgrade then or just a different way to protect users?

ASHER: You know, it's safe to say this is probably more about sales than it is about safety. But, you know, I spoke to one who said the sensor will be more secure than a four-digit pass code. A four-digit pass code typically has about 10,000 possible different combinations, and if a hacker was going to go through every single one of those combinations, it would take them about 15 minutes to break into your phone, right?

On the other end of the spectrum, if you had a nine-digit pass code, for example, it would take a hacker going through every different combination about 2 1/2 years, right? A thumb print sensor probably falls somewhere in the middle.

ROMANS: And the nine -- the nine-digit pass code is something I will forget over and over and over again.

ASHER: You can use that on your iPhone. I don't think people know that. You can do a 10, 20 -- I was playing around with it last night.

ROMANS: That's really good.

What about the post-it note where that's written on the back -- that's not safe. Don't do that.

Thanks, Zain.

What do James Bond, Victoria Secret, and marijuana have to do with your money? That's next.

(COMMERCIAL BREAK)

ROMANS: Are you going to an NFL game this season? Bring some extra cash. Here's the score. The average NFL ticket price is up 3 percent from last year. That's according to team marketing report. The New England Patriots have the highest average ticket, $117 a ticket. The Cleveland Browns have the lowest at $54.

That's not even enough to park at a Dallas Cowboys game. The price tag? $75. That's the highest in the league, 75 bucks to park.

The most expensive beer -- Redskins, Rams, and Bills fans will have to shell out nine bucks for their brew at the home stadium.

But the $5 beer is making a comeback, including Jets and Giants here in notoriously expensive New York.

Finally, consider this. The median household income in this country, $50,000. That's for the whole year, right? Floyd "Money" Mayweather, he earned that in 3 1/2 seconds of the first round of his championship fight this weekend. That's if you spread his record $41.5 million purse over the 12 rounds it's scheduled for. That's all guaranteed, win or lose. He'll also get a cut of the pay-per-view profits which will likely mean millions more.

All right. Obamacare opponents are invading Times Square this week. The right-leaning Heritage Foundation unveiled a six-story billboard in Times Square in New York. It reads, "Warning, Obamacare may be hazardous to your health."

The warning comes at the Obama administration touts state insurance exchanges, enrollment starts October 1st. My prediction? You have not seen the end of the big-money lobbying against Obamacare. Stay tuned.

For more stories that matter to your money, give me 60 seconds. It's "Money Time."

(BEGIN VIDEOTAPE)

ROMANS (voice-over): From crisis to bailout to billions in profit. Five years after the financial meltdown, Citigroup bailout is officially over. And congratulations, taxpayers, you made a $15 billion profit.

Who replaces Ben Bernanke? It's widely thought to be a heavyweight fight between Janet Yellin and former Treasury Secretary Larry Summers. The latest haymaker, a letter signed by more than 300 economists urging President Obama to choose Yellin.

From fast food to Walmart to women's underwear, part-time employees at Victoria's Secret flagship store in New York City joining the fight for more pay. The result? The secret is out. The workers won raises across the board.

The latest so-called hot investment could leave your portfolio up in smoke. Online offerings of stocks related to all things weed are everywhere. The federal regulators are warning consumers to be on the lookout for scams. Remember this submarine car used in the James Bond movie "The Spy Who Loved Me"? Imagine the surprise -- ah! For one lucky couple who found it in a storage locker they bought in a blind auction for just 100 bucks. The car sold for $920,000.

(END VIDEOTAPE)

ROMANS: Wow -- $920,000 for $100 investment. That's a lot for most of us. It's a lot of money unless you're a big-time NFL quarterback like Peyton Manning. Get ready to watch Eli and Peyton face off in the Manning bowl, head to our blog at CNN.com/yourmoney, and I'm going to tell you about the business of being a big-time NFL quarterback.

Coming up on a brand-new YOUR MONEY at 2:00, five years after the financial meltdown, is your money any safer? And did Wall Street win? That's coming up at 2:00 p.m.

Coming up next on "CNN NEWSROOM," the 10th Annual Style Awards air tonight on CNN, honoring fashion and entertainment influential style makers. Correspondent Michelle Turner was there, and she gives us a glimpse of the glitz, glamour and gowns. That's next right here on CNN.