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YOUR MONEY

Big Companies, Bigger Controversies; Hitting Wall Street Where It Hurts; The Long View of Obamacare; The Business of Jennifer Lawrence

Aired November 23, 2013 - 09:30   ET

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


CHRISTINE ROMANS, HOST "YOUR MONEY": Gun reform. Poverty level paychecks. Same-sex marriage. Some of the most divisive issues in this country today may be facing you at the mall this weekend. I'm Christine Romans and this is "your Money"

Wal-Mart, this country's largest private employer is also it's largest lightning rod. A Wal-Mart in Ohio is collecting canned food to help its workers feed their families on Thanksgiving. This picture posted on the Walmart Facebook page but the group support worker right.

And if there is a recent political controversy, Starbucks outspoken CEO Howard Schultz probably jumped in. He called for law makers to end the recent government shutdown. He opposed guns in his stores. And spoke out in support of same sex marriage at the annual Starbucks shareholder's meeting.

When is a choice between lattes and waffle fries not quite that simple? When talk turns to Chick-Fil-A. The CEO Dan Cathy has been targeted by gay rights groups for his stance opposing gay marriage. And some of those groups are upset again because this week a nonprofit civil rights organization presented Cathy with an award at an event that celebrates, quote, "champions of justice and equality."

Wal-Mart, Starbucks, Chick-Fil-A, just to name a few. Is politics bad for business?

Good360 chairman Carly Fiorina would know. The former Hewlett-Packard CEO was "Fortune's" most powerful woman in business six years in a row. But she also ran for Senate. She advised John McCain during his 2008 presidential run. She knows what it takes to create jobs and profit. And she knows what it takes to get votes.

Let me ask you, Carly. Do the two mix? Politics and business?

CARLY FIORINA, CHAIRMAN, GOOD360: : Well, I think this trend where CEOs personally are standing up and getting very involved in politics while they are active CEOs, I actually think that's a relatively recent trend. It's certainly not a choice I made when I was an active CEO. And honestly, I'm not sure it's positive because, of course, a CEO who's running a large company has a lot of different views inside their companies, generally speaking.

A CEO's personal decision to get involved in politics is, of course, different than a company's PAC or political action committee. That's where employees donate funds to a political action committee voluntarily and then that money is given to candidates generally speaking. Companies tend to play both sides pretty evenly. And then you have people like Jeffery Katzenberg who was I think the single largest bundler for President Obama.

So there are a lot of CEOs involved in politics. My own view is it may be part of the increased partisanship in our political process in general. And I'm not sure it's a good thing. Having said that, every American citizen has the right to express their opinion, including a CEO.

ROMANS: Yes. And sometimes it is interesting, though, because the CEO's opinion sometimes is taken as the brand of the company. And it is the brand of the company --

(CROSSTALK)

FIORINA: Exactly. That's the difficult part.

ROMANS: And that's the hard part. Bob Zito knows something about brands and companies. He's the founder of Zito Partners, a formerly part of senior management at Sony, New York Stock Exchange and Bristol Myers Squib.

You know, Bob, I sat down recently with the chief of Wal-Mart's U.S. operations and I asked him about some of the low-pay criticism the company has received. I want you to listen.

(BEGIN VIDEO CLIP)

BILL SIMON, PRESIDENT AND CEO, WAL-MART U.S.: We pay above-average wages for the retail industry, and we provide incredible opportunity. The vast majority of the people who work for us full-time make well over $25,000 a year.

(END VIDEO CLIP)

ROMANS: OK. But it's still a real lightning rod for critics like Democratic Congressman Jan Schakowsky. Let's listen to her view.

(BEGIN VIDEO CLIP)

REP. JAN SCHAKOWSKY (D), ILLINOIS: The welfare kings in this country are the Wal-Marts of the world who can only make it and only pay those low wages because the taxpayers are willing to foot the bill.

(END VIDEO CLIP)

ROMANS: Wal-Mart does not want to be at the center of a living wage debate in America. Wal-Mart is a big retailer. How do they avoid this controversy or is it impossible because of the size and scope of this company?

BOB ZITO, FOUNDER, ZITO PARTNERS: It's pretty much impossible for Wal-Mart because of the size and scope, because of social media. Because everything they do from putting a box outside to raise -- to ask for contributions for employees, which kind of says, we don't pay our people enough so will you give them some food, too. You can't avoid it today. I think they might have handled that one a little bit differently.

ROMANS: You think they handled -- just handle that one differently. They say it was a store-by-store basis. Maybe somebody was trying to help someone out because, you know, of a personal family issues?

ZITO: I understand that but that should be done inside the store with its employees in private events. However, if you look at the apartment building in New York, take a collection for the butlers, for everyone in the building, for the doormen, for the -- for the elevator operators, is it the same thing? I don't think so. Because there you've got a closed private group. It's not a public display.

ROMANS: Let me ask you, Carly. Is there an advantage for CEOs of companies that deal closely with the public in both red states and blue states getting political? I mean, some have said, for Howard Schultz, for example, and some of -- some of the things that he is sort of reached out, you know, bringing guns into the stores or things like that, or Washington getting its act together. It actually plays to the brand of the company.

FIORINA: Well, clearly Howard feels that way. I don't think he would be doing this unless he thought this was consistent with his brand. My guess is -- without knowing my guess is that he has employee within Starbucks, many of whom agree with him, many of whom do not. And my guess is he has customers, some of whom agree with him and some of whom do not.

And I think that's the delicate balancing act that a CEO when they're out there expressing a personal opinion because It's quite difficult to separate their personal opinion from their job.

ROMANS: Let me ask you about, quickly, the difference or the fine line between creating shareholder value and social responsibility. Sometimes those two things don't go in the same direction.

ZITO: Yes. That's true. But remember the boards and the -- the Board of Starbucks and the shareholders of Starbucks, I think, appreciate that they've got a CEO who isn't as bland as sand.

ROMANS: Right.

ZITO: They like that someone is out there taking an opinion. That's --

ROMANS: That's good PR.

ZITO: That's part of his makeup. That's -- I mean, sometimes you need a CEO who will be front and center on issues and not afraid of them. There are other times when you want a CEO to stay under the covers and never raise his or her head.

ROMANS: I think you're both right. I think Carly is absolutely right, too, about the fact this is kind of new, it's kind of new to have sort of the personal opinions of CEOs bleeding through in a company brand.

Nice so see you Bob Zito, Carly Fiorina.

ZITO: Always great to see you.

ROMANS: Nice to see you. Thank you.

You know these convenient detergent pods? I want to show you these. Keep these away from your kids. According to U.S. Poison Control Centers, more kids are biting into them or accidently swallowing them. Sixty-three hundred cases reported to Poison Control last year. Compare that to 8500 cases so far this year.

The pods are small, they're brightly colored. They look like candy. They are exactly the size for a toddler or a small child to try to explore them with their mouth and they are no treat. They cause vomiting and difficulty breathing. Very dangerous. By the time a kid realizes they're not supposed to have them, they could have ingested the entire one. Be careful where you keep them. That is a big consumer story of the week for you.

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

(BEGIN VIDEOTAPE)

ROMANS: The tech boys club might be opening its doors a little wider to women. In the last year, 60 percent of the 60,000 jobs added in tech went to women, but they still make up less than a third of all tech employees.

Google and Microsoft working to rid the Internet of child porn. They're teaming up to make sure the illegal content doesn't show up in search results and to remove images and videos from the Web.

The price of Bitcoins soaring. But some senators worry the anonymous digital currency could be used for illegal activity like buying drugs or dodging taxes. The Bitcoin community wants the government to stay out.

Elvis Presley has a new owner. Authentic Brands Group brought the rights to Elvis' photos, album covers and movie posters. ABG also owns the rights to legends like Marilyn Monroe and Muhammad Ali.

Think Thanksgiving travel is bad? Two new studies find packed airports and lengthy delays could become the norm in the next decade, thanks to crumbling air travel infrastructure.

And buyers beware. A Butterball shortage. The nation's largest turkey producers says it's short on large, never frozen birds this Thanksgiving.

(END VIDEOTAPE)

ROMANS: Up next, the banks got bailed out. You feel sold out. I sit down with the man who wants justice for Main Street starting with a 13 billion dollars payout. That's next.

(COMMERCIAL BREAK)

ROMANS: You tweet me, you message me on Facebook and you are angry. Why? Main street, you say, got a raw deal. You say the banks did a whole lot wrong and you were stuck with the bill. Sinking home values, neighborhoods destroyed by foreclosures, jobs lost, retirement savings destroyed, this week, JPMorgan Chase agreed to a $13 billion deal for its role in the financial crisis.

That's B. Billion with a B. It's the largest settlement in history. About half a year's profit for that bank. I spoke with Associate Attorney General Tony West. He is the guy that JPMorgan CEO Jamie Dimond dialed up when he wanted to negotiate a deal. Five years after the crisis I asked him where is the justice?

(BEGIN VIDEOTAPE)

TONY WEST, ASSOCIATE ATTORNEY GENERAL: There is a lot of pain that still exists out there in the country on main street. And I think that's was one of the things that we were trying to accomplish with this global settlement. You know, if we had simply settled these cases one off or by themselves, first of all I don't think the amount of money would be as high as we are talking about today.

ROMANS: Right.

WEST: But I think we would not have the consumer relief.

ROMANS: Now you have this thing all signed, sealed and delivered, I really have to ask you. I mean, what started -- I mean you had personal phone conversations with Jamie Dimond of JPMorgan. This is a guy known as Wall Street's banker, America's banker, someone who is a master deal maker. You went from, I think, $3 billion initially to settle some very narrow -- some very narrow complaints to this very big deal.

What was it like? What was it like trying to negotiate this deal?

WEST: Well, I think it was a very intense experience, obviously. Whenever you're talking about something this large and this significant to so many people around the country, you know, it's going to be quite intense and quite engaged. I think the personal leadership and involvement of Attorney General Holder was absolutely indispensible to the success of this. And I think the personal engagement of Jamie Dimon was absolutely indispensible to the -- the success of this.

And so, you know, I think that we've been able to -- to put together something that's extraordinary that I think can be a template as we go forward. We look at other financial institutions and try to resolve and remediate some of the harm that was caused by the financial crisis.

As we kind of go forward, there are other things that we need to continue to look at. Of course one of the important parts of this -- of this agreement was that -- was a civil resolution only. It doesn't constrain the department's ability to look at other possible, potential aspects to this conduct and so we'll continue to follow the facts wherever they lead.

ROMANS: What you're saying, what your boss is saying is that there will be more. I mean, this -- the JPMorgan deal is not the last we've heard of trying to make this right.

WEST: Well, look, you know, this is not the first RNBS working group case that we brought of course earlier this year. We brought a case against Bank of America. Even earlier this year, we had the S&P case that we brought which was a result of -- of a lot of good work, including some help from the RNBS working group. JPMorgan, of course, we announced yesterday. It won't be the last.

ROMANS: You know, you mentioned your boss, Eric Holder, he's someone who some Republicans -- a few Republicans have said they like to impeach him for other reasons. You've got a president, someone who's a friend of your -- your ultimate boss. Someone whose approval ratings have been -- have been low recently.

Do you think that this kind of approach for Wall Street, this kind of $13 billion deal, does this help their image, do you think, in the eyes of people who just feel five years later, they want some justice?

WEST: Well, look, you know, I got to tell you, one of the greatest things about my job at the Department of Justice is that I don't have to worry about politics, I don't have to worry about partisanship or what's popular or not. I just have to kind of go in there and try to live up to the name of our department.

(END VIDEOTAPE)

ROMANS: So associate attorney general and his boss promising more justice. We'll be keeping a close eye on those investigations and just how well the consumer piece of this, the consumer relief, is rolled out.

Coming up, a Republican warning against the dangers of socialized medicine.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You and I are going to spend our sunset years telling our children and our children's children what it once was like in America when men were free.

(END VIDEO CLIP)

ROMANS: No, that's not Ted Cruz or any Tea Party member today. Who is it? And what's got him so upset? Next hint, it has to do with President Obama.

(COMMERCIAL BREAK)

ROMANS: Time to take Obamacare's temperature. Of course, how sick it is probably depends on who you ask. First, put on your blue-tinted glasses for the liberal view. Enrollment is picking up, at least in the 14 states that run their own exchanges. More than 154,000 people have signed up in those states. California had one of the biggest jumps, more than 79,000 people enrolled there. New York and Washington states have the next highest enrollments.

Now put on your red-tinted glasses for the conservative view. Dig deeper into those numbers, and you'll find how young, healthy people are not signing up. In Kentucky, just 19 percent of enrollees are under the age of 35, 22 percent Connecticut, 23 percent in Washington.

Back to blue now. Liberals will say that's no surprise. The fines aren't high enough yet. It was designed to nudge people into the system. By 2016, that's when young people fined every year will start to enroll. But back in the red world, this is the beginning of the Obamacare death spiral. If too many old and sick people sign up, premiums rise, even more young people opt out, and the law collapses.

Now the law's supporters say the death-spiral scenario is farfetched and is too early to draw conclusions. Both sides can argue their points. Instead, let's step back for a minute and take a little historical perspective.

(BEGIN VIDEOTAPE)

SEN. TED CRUZ (R), TEXAS: Stop this broken law.