Transcripts For CNNW Your Money 20110918

lost the ability to inspire confidence in the american people here? >> the entire country is 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, 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. i think that's what's reflected in the polls. everybody wants to see it before they believe it. >> in those same polls from cnn/orc say three in ten people feel they are better off today than they were ten years ago. we know congress has a lower approval rating than the president. these are one national polls. there's just one national election. if the economy doesn't improve, can the president win? >> yes, of course, anything can happen. that question, are you better off today than you were four years ago, i bet you hear again. famous ronald reagan question when he ran against jimmy carter, the right track/wrong track is extremely important and tends to mirror what's ahead when it comes to elections. let me tell you how the white house sees 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, first gulf war, a tremendous success. everybody thought, hey, he's in. he lost. when the marine barracks were blown up right near the election, we thought he's going to lose. boom, he won re-election. so things change. there is that. we don't see much changing in the economy even by the white house's own predictions. what they are looking at now is, can we sell, as ronald reagan did by the way, the trajectory of things. 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. >> the president had a big fund-raiser this week, he said his chances of being re-elected in 2012, they are better than his chances of being elected in the first place. >> certainly, yeah. >> sort of telling his supporters, come on, you know. there was a long time nobody thought a guy like me could be elected in the first place. he's trying to inspire confidence that way. diane swonk, she joins us. diane, americans are just not motivated to spend right now. no increase in august retail sales, july retail sales were revised lower. how important is confidence here at this stage of the economy? >> there's no question on the margin confidence matters a lot. unfortunately we have a very marginal economy. it is important. remember, we saw retail sales flat line along with employment. we also saw wages decline in the month of august. 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, trillion dollars in stimulus on the sidelines they are 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 are there. >> diane, is it the president's job to unlock that confidence? can he do that? does he have the key? >> nobody has the magic key. if they did, it would already be unlocked. certainly one aspect, if we could come up with a long-term deficit reduction plan with some stimulus to at least maintain the status quo and stop us from going under water, that would help businesses, consumers, some idea, some vision about where we're going, i think that could lift a little bit on the margins. frankly, like i said, when you're growing marginally that helps. >> greg, chief political strategist for potomac research group. the president laid out his plan, public hasn't given him a bounce in the polls, a potentially long battle with congress is already under way. when will it be fair to judge if these poliicies have actually worked? >> he's almost running out of time right now, i think, christine. you would have to make a counter argument listening to what you guys are saying. what if things get worse instead of better? what if the unemployment rate drifts higher? that could occur. you've got the solyndra scandal, solar company. i think the scandal could get worse. a big fight with the palestinians at the u.n. we've got most importantly, a situation in europe that hasn't come close to bottoming. so you add it all up, and yeah, things might get better for him, but there's a greater chance things could get worse. >> you bring up the solyndra scandal. this is where i want to bring candy in. something that's a half a billion loan guarantee through stimulus to a company in california that makes solar panels. the president had this unfortunate photo op where he talked about this as an example of how stimulus was creating money. this company is bankrupt, put out of business by chinese competition. taxpayers are on the hook. the white house revealing that $19 billion in unemployment checks wrongfully issued. these do not inspire confidence in the government spending more money. >> 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 proved anything illegal went on. here is an administration that came in saying we'll be transparent. you're going to know all this stuff. we're going to be different. looks like the same old stuff. at the very least, this looks like the same kind of somebody gets a good deal and 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. >> diana, "wall street journal" poll of economists found a one in three chance of slipping into another recession in the next year. that's the worst odds they have given since the recovery took hold. i mean, i guess on the other side of that, that's two and three chance we don't slip into a recession. clearly how does that affect confidence when we're hearing so many people are concerned about a new recession? >> given i'm in the poll and mine is a coin toss i'm a little higher than that of my colleagues in the economic concerns that greg laid out, europe europe europe. i think it's important. these are issues, we have to be honest. 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. that's what i am, an optimist. that said we've got to find a lot more unity in europe and in the united states to solve our problems. our problems are not insurmountable. they are sur mountable. the clock is ticking. as greg knows, the unity in washington isn't there, europe as well. they need to get ahead of the curve rather than behind it. washington has the same disease. the imf made it clear christine lagarde out there pushing. 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 going to be in trouble. >> want to talk about the president, you know, preventing, did he, economic disaster? did he make things worse? are things as bad as they seem? perception versus reality when it comes to this economy and this president next on "your money." whoa! hey! 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>> i think so, christine. the spectacle of geithner racing to poland, the spectacle of the u.s. fed putting dollars into european banks is quite unnerve. i would have to say in mentioning the fed, when you heard the rhetoric this week from boehner and the president, you get the feeling the gridlock is coming back in washington. the fed may be left to do the heavy lifting. of all the big stories next week, the biggest may be the fmoc. i wouldn't be shocked to see the fed unveil new policies. >> would that be treasonous. greg? i'm sorry. that was a cheap shot. what more could the fed do politically, a lot on the right questioning what the fed has done so far. how many more tools does it have in its toolbox? >> two things they could emphasize purchases of longer term securities driving rates down further. number two, this is very controversial, i think they will at least debate the idea of getting more liberal on their inflation target. >> diane, what do you think. >> i think i agree with greg, we could see "operation twist" named after -- originally done in 1961 after chubby checker's version of "the twist" is to get that twist in duration, the longer term thing. that's what we're seeing priced to market. the fed may disappoint in this meeting in september. i'm a little hesitant, although there's many people who want to go for it. dissenters are still allowed and may take until november to do it. i think they will do it, they will do "operation twist" as greg mentioned, buying longer term securities. in terms of large scale assets changing inflation target, i don't think that's on the horizon, just too risky for the hawks at the fed to stomach. i do think the fed is not done yet. they are feeling enormous burden central banks the world over of trying to carry a very fragile recovery in the developed economies. >> here's the interesting thing. the world we live, three of us on this panel live in, the fed and what the fed could be doing to operation twist and what central banks can do to keep dollar borrowing going in europe and the like. here in this country, people talk about what president obama, what he's doing, he alone, his handling of the economy. a lot of people say he's doing a better job of handling the economy than congressional republicans when you look at the polls. they hold president bush more responsible than president obama for the mess that we're in. in making a case for others that are to blame for the economy, has the president left the impression with voters no one is at the wheel in washington preventing the economic bus from going off the cliff? >> i think to the contrary and to his own detriment, the president said a while back, hey, if i don't begin to turn this economy around, 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 a lot. i assure you, that's going to turn up in republican commercials. he laid out the things he needed to do about the economy and the country. in terms of the perception of it, i think when people look at washington, they look at the gang that can't shoot straight. while it's totally believe they don't believe -- republicans have a lower -- get lower approval rating than the president, it's apples and oranges. the president will be running against one person, that's a national poll. what matters to those congressmen is how people in the districts feel, why over 60% -- actually over 70% of the people get re-elected. their district tends to like them. it's not the same sort of looking at it. i think in the end when you look 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. they're disgusted with washington in general. bad news if you're an incumbent. >> why so many are looking at the fed. see congress and the president shooting at each other and looking elsewhere where there's not fire coming out of the barrel of a gun. greg, 2.4 million jobs overall, the loss as president obama took office in 2009, it's a number -- lots of numbers like that you get reminds of from conservatives all the time that 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 be judged on next november? >> i think so. unless there's some great geopolitical wild card. diane and i talked about this, obama probably made things better. it could have been a lot worse. he stopped hemorrhaging, as diane says. most voters don't want to hear that. most look at policies and conclude they haven't worked. >> perception versus reality thing one more time. sometimes people say things in polls, a lot of negativity around them. we see this in consumer confidence. people say they feel terrible about this. look at spending numbers and they're fine. how much is perception, how much is reality. give me your real feel on what's happening in the economy for the middle income earner. >> i think in this case perception and reality are one in the same. 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. thely. >> side as candy pointed out, the surge in confidence we saw in president bush and in consumer confidence after the initial iraq war, and then he didn't get re-elected, economy wasn't growing enough, 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. what the recession revealed is the reality we were ignoring once the credit was stripped away, income equalities, loss in the middle class. it's easier to buy a car than a house, but unfortunately you have people living in those cars. that reality is hard to escape. rising ranks of poverty, particularly among children, rising ranks of people living in poverty, working poor. i think all of these issues are real issues. so perception and reality not that far apart at this stage. >> candy, you get the last word. >> let me point out in politics very often, perception is realty or is taken as realty, because 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. it wasn't enough. people said, i don't feel it. still feels like the economy is bad. perception does matter in politics, sometimes stronger than reality. >> candy crowley, diane, greg, nice to see all of you. have a wonderful weekend, folks. >> the president wants $447 billion to create jobs. republicans are hardly ready to sign that check. is this about policy or politics? we'll take a look flex. sle. not with priority mail flat rate boxes from the postal service. if it fits it ships anywhere in the country for a low flat rate. that is easy. best news i've heard all day! i'm soooo amped! i mean not amped. excited. well, sort of amped. really kind of in between. have you ever thought about decaf? do you think that would help? yeah. priority mail flat rate shipping starts at just $4.95, only from the postal service. a simpler way to ship. i tell you what i can spend. i do my best to make it work. i'm back on the road safely. and i saved you money on brakes. that's personal pricing. american jobs act passed on the hill. he'll need support from republicans in congress to get that done. that has the president questioning the intentions of some on the right. >> they supported this stuff in the past. but they are 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 american people a win. >> will cain is a cnn contributor. if the economy turns around by 2012, it greatly enhances the president's chances for re-election. is it fair to say republicans would benefit from a congressional motto of just say no? >> 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 things in there like infrastructure investment to agree on. we need to be realistic about what kind of jobs that will create and how quickly. it's a farce, what drives it is keynesian economic that government spending boosts demand. he says we'll pay for it with tax increases which beats -- decreases his demand. he's betting his spending multiplier is higher than tax negative multiplierser. it's a farce. politically he knows this won't pass. there are places, room for compromise, corporate tax reform. there's room for that. he chose something he knows the gop will oppose. he did it so it would fail and he can paint them as bad guys. >> 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. >> some of the president's proposals i think offer an opportunity for common ground. let's be honest with ourselves. the president's proposals are a poor substitute for the president obama growth policies that are needed to remove barriers to job creation in america. >> okay. roland martin is a contributor. if the republicans simply disagree with what amounts to $447 million in new stimulus, does president obama really have an economic record to prove republicans wrong here. >> how in the world can you continue to sit here and say oh, we've supported these things in the past. but now we don't necessarily like it. this makes no sense to me. 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 think on the opposite side. they thought they had a deal with speaker boehner and the debt ceiling and then the freshmen said no, we don't like it. this is the gop being ob sti nate and there are republicans on the record in the political piece where they said, we don't want to give him a win that is shameful rhetoric in this situation. >> hold on. i want to bring in ben white, politico's wall street correspondent. both sides want to convince they care more about creating jobs. election 13 months away but job crisis going on now. any reason to expect the gridlock ends up soon? >> i think the short answer is no no. you've seen democrats talk about harry reid has not shown urgency bringing things up in the senate. he sees writing on the wall. he knows republicans won't support more infrastructure spending. i think it's not entirely fair to say they supported them in the past and don't support now. some of the things in the past, they say it didn't work. we had this giant stimulus, still have 9% unemployment. it was a failure. some of the tax cut cut, extension of payroll tax credit for extending it to employers and giving it to employees, that's possible that could get passed. it won't make much of a difference. infrastructure spending isn't going to happen. we almost shut down the country because we couldn't raise the debt ceiling. we're not going to have a big agreement on jobs plan soon. >> this is a problem when we say the stimulus plan failed because unemployment went down. -- unemployment didn't go down. what about the idea we were on an upward trajectory, had we not done it, it would be higher. >> i talked to somebody at treasury that said, look, you really would have felt it if we didn't do it. again, with this new jobs plan they say if we don't do it, you will feel it. if you do do it, it's going to help. we don't know how much. that's hard to sell people. that's hard to say, quantify a negative. >> that's right. seems like a convenient excuse. i do want to disagree with ben on one thing. i do think there's room for compromise. i think that infrastructure isn't such a stick in the mud that republicans will oppose cart blanche. i think you could fashion an infrastructure package they 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, he knew ahead of time they will not agree to this. therefore, his whole proposal was designed to fail. >> these are the very people who will sit here and scream cut, cut, cut, cut, and then turn right around and sit here and defend a bush tax cut knowing full well it increases the deficit. but they say, cut the deficit. there's no logic there. >> let me jump out here and take a quick break because we are not cut, cut, cut. we have to pay, pay, pay the bills. we need two minutes to pay the bill. don't go anywhere. private sector has to drive this recovery at some point. which republican candidate does the business community want to see win the nomination? 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[ sigh ] too bad you're not buying car insurance. like that's easy. oh, it is. progressive direct showed me their rates and the rates of their competitors. i saved hundreds when switching. we could use hundreds. yeah. wake up and smell the savings. out there with a better way. now, that's progressive. 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. i know the "wall street journal" gave its endorsement to jon huntsman and his economic policies. >> i would say romney is probably the favorite right now. just based on his wall street experience. obviously worked in private equity knows a lot of these guys. >> doesn't think that the ben bernanke chief is treasonous. >> perry scares people. ponzi scheme comment is not supportive on wall street. they want someone that can win, lower taxes, pro business policies, nobody messing with capital gains taxes. romney they think can win. perry probably not. >> perry supporters are saying, hey, these are all the people that called it a ponzi scheme and lots of people called it a ponzi scheme. >> wall street wants everybody except ron paul. own 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, yea, we know who we want. they want anybody but obama. >> 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% of americans trust president obama to handle economy, 37% prefer congressional republicans, 15% say neither one. how can they separate themselves from an unpopular congress. >> that statistic should not surprise anybody. congress always has the lowest approval ratings. >> do they deserve it? >> yes. i would say the way you approach the election going forward, go off what ben said. guys like jon huntsman to a lesser extent, much lesser extent mitt romney have economic proposals that distinguish from president obama and substantive ways to improve the economy. unfortunately 1984 gary hart and seven dwarfs for voters it's all seven dwarfs. there is no hart in the field. voters don't like jon huntsman and they have to hold their knows and like romney. >> he looked like the relative you despised at the cnn tea party debate. they barely wanted to clap for him when he walked out. "the wall street journal" can love his jobs plan. guess what, he has no shot at all of getting infantrymen -- getting the nomination. >> let me ask you in vast years of covering this. if you have unemployment at 9%, no real meaningful job loss but no great job creation over the next year, can this president still win? >> 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 a negative campaign against republicans saying this is my ideas, they want to go back to where we were, big tax cuts for the rich. >> does whether he wins depend on who the candidate is and the economy or both. >> both. this is what's 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 conservatives. this is the field we can put together? i hope not. bill clinton entered the race in 1992 or october 4th. we still have time. >> chris christie, paul ryan. >> you're still going for chris christie and paul ryan. >> that ain't happening. look, the most important i believe, you saw it on monday, when these candidates totally dismissed and blew off latino voters. how can they lose the election? easily, nevada, colorado, next. new mexico. those western states will be critical. >> ben says no. >> there's an answer to that, mark rubio. >> couple of people told me if you had a romney/rubio ticket you have wall street and tea party kind of view of the world. then you get a good blend of both of those. >> don't fall for that one. rubio falls in line with tea party policies. when they start hitting immigration, the dream act, i'm telling you, those numbers are going to be deplorable. if they keep dising latino voters they are helping the president with re-election bill. >> i mean, the bill clinton statistic, october, that tells you how much time we have to go. how does this president turn it around? >> the president has to get more aggressive. >> do you see the james carville piece this week, he said they should fire all these people. >> first of all, that's nonsense. the moment you fire, next article from james, panic in the white house, no idea what they are doing. so people like the fact that this is a no drama president. folks like me want him to show a little more fire. they like the fact he's not someone slashing and burning for the heck of it. >> what can he do? he has had a lot of different economic advisers so far, all the from the same school of thought. your quote/unquote -- >> yeah, wall street. economically he tried everything, tries to target job creation, target investment. the way you improve economy lay the foundation with tax reform, lower regulatory environment. and by the way it's a slow process. he can't tinker around the edges anymore. don't worry about firing it will be taken care of in a year. >> what if it takes time to heal this. it's a financial crisis. it takes years. david brooks wrote 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. >> this is where we get into the problem of making this argument it could have been worse, which is hard to sell but probably true in some regards. he's got housing crisis, a long way to roll. housing prices are not going up soon. it's going to take years to get through this. it's not his fault it's 9.1 unemployment. perhaps it could be lower. >> we're impatient. we are an impatient society. bernanke told us in '08 this is going to take some time. we said i don't care. >> on the record saying he's impatient. >> no, i'm patient. >> 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. negotiator: you must be the new kid. naomi pryce: i am. i'm in the name your own price division. i find empty hotel rooms and help people save - >> - up to 60% off. i am familiar. your name? > naomi pryce. >> what other "negotiating" skills do you have? > i'm a fifth-degree black belt. >> as am i. > i'm fluent in 37 languages. >> (indistinct clicking) > and i'm a master of disguise >> as am i. > as am i. >> as am i. > as am i. >> well played naomi pryce. ♪ [ male announcer ] the dodge journey was made to explore the real world. it has under-seat storage to bring everything... available seating for up to seven people to take everyone... and the grip of available all-wheel drive to go everywhere. if you think you need a journey, you're in luck. because this one is still right where you see it now. seriously. you find it, and you'll drive home in a new journey. it's been more than a year since the debt crisis erupted in greece. leaders of the 17 country eurozone struggling to prevent a spread of financial turmoil. take a look at the map. it shows the country in favor of defaulting on loans. greece has a 99% probability of default. portugal 62% 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 help of quest means business. richard, why is the fed throwing money at this crisis? 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? >> 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 a meeting 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. alley ster 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. >> more help coming from unexpected places, brazil, russia, india, china. brits could step in and buy some of europe's debt. that would be a twist, emerging economies bailing out more established economies with the debt problems. >> the freud of it, you can hear the giggling at the prospect. the fed -- one of the things that really worried everyone this week, two banks went to european central bank and needed to borrow dollars from them, because american banks frankly are withdrawing their support, withdrawing their liquidity, long-term lending they don't want to be involved in european interbank lending. there is a worry, it is just a worry that european banks might find themselves short of dollars. that's what the swap arrangement, repo put in place. basically 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. >> how close are we to that proverbial shoe dangling on the end of the big toe ready to drop for a financial crisis? >> 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 bail 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, you know this as well as anyone. the japanese scenario, they don't get ahead of the curve, and that is something in the united states the policymakers are terrified about. >> i thought you were saying i knew more than anyone because you've seen my 401(k), from my own personal loss. >> hey, hey, hey, i looked at mine today. excuse me while i just -- >> all right, richard. have a great weekend with your tissues. richard quest. getting america back to work, the president's most important job. cnn's fareed zakaria has solutions next. ah. mom? 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[ engine revs, tires screech ] mom? ♪ you know what,ell me, what makes peterpeter ? i can my own homemade jam, apricot. and really love my bank's ise your ratcd. i'm sorry, did you say you'd love a pay raise asap uh, tuly, i said i love my bank's raise your rate cd. you spen8 days lo at sea ? no, uh... you love watching your neighbors watch tv ? at ally, you'll love o raise your rate cd that offers a one-ti rate increase if our currentates go up. dangerous plaque that can build up in arteries over time... high cholesterol is a major factor. but these other health factors can also contribute to plaque buildup. so if you have high cholesterol and any of these other health factors... it's even more important to get your cholesterol where your doctor wants. talk to your doctor about crestor. when diet and exercise alone aren't enough... adding crestor can lower bad cholesterol by up to 52%. and crestor is proven to slow plaque buildup in arteries. crestor is not right for everyone, like people with liver disease... or women who are nursing, pregnant, or may become pregnant. simple blood tests will check for liver problems. tell your doctor about other medicines you're taking... or if you have muscle pain or weakness. that could be a sign of serious side effects. ask your doctor about high cholesterol... plaque buildup... and if crestor is right for you. if you can't afford your medication, astrazeneca may be able to help. welcome back to "your money." always a pleasure when fareed zakaria stops by, "restoring the american dream getting back to work" ayers sunday at 8:00 p.m. eastern. let's play a little word association. i give you a word or phrase you tell us what comes to mind. euro zone. >> disaster, crisis. pick your word. >> dangerous, i would say. christine lagarde used theword dangerous. it matters for us and our economic recovery too, doesn't it? >> 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 there. the broader picture, richard quest was talking about the mechanics of financial failure. why is 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're less in tax revenue, more expenditures on unemployment and things like that so your deficit gets worse. that's the fundamental problem and why all these countries like greece and italy, they realize they need more money to finance larger deficits than predicted. the underlying problem is no -- slow economic growth, lack of jobs. >> back to our word association. another big story from the week, poverty in america. >> it's sad. it's, you know, it's distressing because we often forget that the people at the bottom here get hurt the most by far and what's striking about those poverty statistics is, people staying in poverty for longer and longer and that then leads to a kind of loss of hope and that's what is so un-american. people stop looking for work, they think they can never get work. it affects their lifetime of income. >> i think there are new entrants into the rank of the poor and what's unsettling for people who used to be in the middle class, middle skills kinds of workers haven't found the safety valve in the economy, or some kinds of skilled labor found themselves unable to get a job that's 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 ten years. >> people who have a college degree in the united states are -- have an unemployment rate of 4.6%. that's actually very low. people without a college degree have an 11% unemployment rate. >> yeah. >> there you have the story the tale of two americas. >> earnings of those folks who do have the degree, it more than pays for the education. there's an in conversation right now, is college worth it? look at those statistics and it's clear that's really your buffer. >> 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 an education you're expenditures. when you buy an investigatieduc you're investing in yourself for life. you give somebody acheck, unemployment insurance, it doesn't do anything. that's consumption. we should be investing. >> another word association, education in america. we got a number this week showing the average s.a.t. score is 1500, it has been going down, down, down. >> that's the word i would have used. the word association with education is down. what i mean by that is you choose any metric and look back over 30 years, american education is worse. we have fewer college graduates, fewer -- as a percentage, fewer high school graduates, do worse on tests. look at any test -- >> we spend twice as much per student as we did in the '70s. let's talk about the jobs plan then. does it have a chance and should it have a chance? >> well, whether it has a chance or not is a matter of politics. i think right now it doesn't. he might be able to garner support. the jobs plan has two parts. some of it is just the things like extensions of unemployment. temporary payroll tax cuts. it is fine as a matter of compassion, i support it, but it is not going to solve the problem. it is a temporary fix, it is a band-aid. the part that is powerful and important is the infrastructure part. at this point, even if you give the private sector incentives, they're not hiring because there is no demand out there. but infrastructure is a place where government can do it, we can -- unemployment among construction workers is 20%. go, rebuild america's roads, highways, bridges, airports, do it with interest rates that are cheap, borrow 30 year money. this is a perfect example, we should be spending more on infrastructure than we are even in the president's plan. >> really none of the jobs plans address the big structural imbalances we have. and structural unemployment that could become a chronic problem. when you're giving extension of unemployment benefits, you're not talking about the investing in the stem, you're not talking about the retraining of maybe a 50-year-old worker who used to work in a factory. these are still things we have got to get our head around. >> clearly at the heart what we have to do is education because our workforce, our workforce is too expensive and too poorly educated in today's world. so there is only two ways that can go. you educate them better or bring down their wages. we don't want to bring down their wages, so that's only one option. you have to educate them more. >> your special is this sunday, 8:00 p.m. eastern and pacific. restoring the american dream, getting back to work. tell us about it. >> what we do is we really first begin by looking at what is the nature of the jobs crisis. as you're suggesting, it actually goes back beyond the recession. there is a structural problem for 20 years the american economy has had difficulty creating jobs. and for ten years, we have created no jobs. net employment in the united states over the last ten years, zero. >> it is a lost decade. >> why did it happen? how can we fix it? and we talk to -- it is now fashionable to call them job creators. we talk to the ceo of general electric, the ceo of dow corning, the ceo of star thoeho, what will it take for you to start hiring again. practical solutions, how can you get more jobs, we'll worry about the ideology later. let's first fix the problem. >> sounds great. we look at income sork average family income is back to 1996 levels, home prices are back to levels not seen since the -- a whole decade of wealth gone out of the housing market. look at the stock market on its heels and a job market like this, a perfect time to look at how to create jobs and how get it back for america. fareed, thank you. can't wait to see it. from the boxing ring to religion, the story of a man living the american dream next. almost tastes like one of jack's cereals. fiber one. uh, forgot jack's cereal. [ jack ] what's for breakfast? um... try the number one! [ jack ] yeah, this is pretty good. [ male announcer ] half a day's worth of fiber. fiber one. oh, we call it the bundler. let's say you need home and auto insurance. you give us your information once, online... [ whirring and beeping ] [ ding! ] and we give you a discount on both. great! did i mention no hands in the bundler? bundling and saving made easy. now, that's progressive. call or click today. [ engine revving ] [ male announcer ] you won't find the toughness of a ram 1500 combined with the legendary power of a hemi v8 in any other truck. it's a beautiful thing. guts. glory. ram. uri foreman came to america to pursue his passion for boxing. even after he became a champion, this fighter realized something was missing in his corner. ali velshi has the story. >> i came to new york to experience on my own the american dream. >> this is a story of air young man on a mission, of uri foreman, born in belarus, moved to israel, ten years ago came to america and walked into the world famous gleason's gym in brooklyn because he wanted to be the best middleweight boxer on the planet. >> i came here and i talked to the owner, i want to be a world champion. >> you want to be a world champion. >> yeah. >> that's what you said? >> that's why i came to the united states. >> you have a shot at the title. you feel that way? >> it was the right place. gleasons trained robert de niro for "raging bull" and produced 130 champions in real life boxing. owner bruce silverglade. >> i was impressed with uri. he came halfway around the world. >> he was so impressed, he gave him free lessons and through all the sweat, punches and poundings, eventually those lessons paid off. >> middleweight champion of the world. >> in 2009, foreman became the wba super welterweight champion of the world. the first ever from israel. his quest was complete. >> hard right hand by foreman. >> that was when foreman discovered something was still missing. something he had been disconnected from every since he was a child in the former soviet union. his jewish faith. >> you were growing up, did you observe jewish rituals, go to synagogue? >> it was forbidden to have synagogues. many jews forgot about their roots. in the passport it said nationality. >> his girlfriend, soon to be his wife, asked him basic questions about judaism and he didn't have the answers. so a new quest began. uri foreman not only embraced his long lost faith, but with a zeal of a champion decided to become a rabbi. since then he's progressed far along the path. within a year his rabbinical studies will be complete. >> right now my goal is to work with young adults, kids who perhaps need a little push, need a little motivation, and i think i can help them through boxing or personal experience. >> limps back to the center of the ring, clearly compromised. >> 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, lost his title. he's training to win his belt back, but even in the process, it is 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 for the health and safety of his opponents and for the completion of his rabbinical studies. now when he fights, his faith goes far beyond the power of his punches. ali velshi, cnn, new york. >> what an awesome story. thank you for joining us in this conversation this week on "your money," we're on

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