The economy created 160,000 new jobs for the month. That was below expectation, but the Unemployment Rate fell to 7. 4 . As fewer people looked for jobs. It was a record setting week for the markets, meanwhile the dow and s p 500 kicking off the month of august with a bang, hitting new highs on thursday. After kmepts made by the fed earlier in the week. The s p 500 closed above 1700. And the markets continued to rise on friday. Those comments were after a 2day meeting wrapped up, and the feds announced that they would continue to buy bonds and mortgagebacked securities to keep Interest Rates low. But the fed used the phrase, modest growth instead of moderate growth. It was a slight and subtle down grade. The First Reading of the gdp was released this week and it came in stronger than expected. It rose 1. 7 . And expectations had been for an increase of. 9 of a . The biggest drag was government spending, with cut backs due to the sequester. Consumer buying was strong. Master card, beat analytss expectations. And the Federal Reserve meets, what does it mean for the economy and your money . Joining me now, glenn hubbard. The author, and dean of the school of business at columbia university, and david kelly, he is the chief strategist with j. P. Morgan fund. Lets talk about the jobs report, the economy created 162,000 jobs for the month of july. Below expectations even though the rate went down a bit. What does the report tell you where we are . We have a slug recovery, we are not growing facht. I think we are learning if we want to change, we have to give the economy a jolt. A jolt in what regard . A jolt meaning better longterm policy, real clarity of where we are going that gives Business People a chance to say yeah, we want to invest again, and we are missing that. We are missing that for sure and david, i want though talk to you about the theory of people reaching 65 and what they are doing. The most interesting part of we had a mediocre jobs report and the unemployment came down, and the reason for that is labor force is growing that much more subtly, its grown by that half a percent, so many people are reaching 65, and when you are hitting 65, you are eligible for medicare and people are stopping working. We have to think differently about how the economy works. 20 years ago, i could run a 5 k and now i cant. Its not just a matterer of more sugar, i have lost the capacity to run as fast. And the economy has lost the capacity to grow as fast. And i think policy and investing needs to readjust to that. Corporates are sitting on trillions of dollars in cash. They could be putting that money to work. But they are not. They are worried about what, you know, what is around the corner. They are worried about policy, and the economys. The cost of obamacare . And regulatory uncertainty in general. Its not that they are crazy and mean. They are being rational. I think its not just that they are worried, its the uncertainty they wait a few years, the more the government, washington in general can clear the air of what policy a while ago. Into equities, as Interest Rates rose. As rates go higher. If we started low Interest Rates. A 3 treasury yield. Theres a positive correlation. Because it means that the economy is getting better. If the rates are going from 9 to 10 , then its a different matter. But what we have seen is yes thrks can happen, and i think that is happening, the money is moving to equities. And you are recommending that . Yeah, still, i mean, the market is not as cheap as it was, relative to bonds and relative to cash, we would be over equities. And glenn, the question is the fed. We have the fed reserve coming out with its statement this week. Basically revising downward their review of the economy. They are down grading it, no mention of tapering, so, when do you expect they will be taping. Can they begin to slow down the bond purchases in an anemic recovery . I think they will begin to taper toward the end of the year. I dont think its having a large impact on the economy anyway. Its more a matter of the fed communicating the longterm forecast. I think the fed is optimistic about what the second half will be. I share some of that, but not to the degree they have. And david, you dont think the feds forecast is optimistic . No, i think its right, they expect Economic Growth to pick up, and everything that we are seeing suggests that will happen. More than that, again, if i am right that the economy does not have the capacity to go that fast, a small pick up reduces the capacity and make it more important that that he move away from easing. A Second Quarter gdp coming in stronger, and we are looking at2 grower. Really. That is not acceptable. A typical recovery from a deep downturn is sharp. We have not seen it. Even with the financial crisis, we should be doing better than a 1. 7 . It was 80 billion that came out of bond funds. What are you telling clients to do . Keep money in fixed income, take it out . Obviously, we talk about over weights and under weights. Just check the portfolio, if they are over weight fixed income and under weight equities, put money in equities and get the bonds down to short durations. The thing we feel most confident about, over the last few years, as the investors lose the desire to buy bonds the Interest Rates will go up. You are gearing up for the new semester . We have 100 new students coming in, eager to participate. Where are the best and brightest going in terms of getting jobs. The big growth for us has been an washington is making a move. Its more fun. We have them on the program. On the money, the economy, the economy. The economy. New focus on the numbers. To work, and later a rare interview, with amazon founder. And a billionaire that changed the way we shop. And they are helping High Schoolers dream for the way they change the world. When they leave here, they want to, they want world peace. Its, you know, okay. We want to solve all those problems. Here is the bottom line, im willing to work with republicans on reforming the tax code, as long as we use the money from transitioning to a separate tax system for a significant investment in creating middle class jobs. Thats the deal. The president said he has a deal to create jobs in exchange for reforming business taxes. Will it work . Here for an analysis on the recent economic push is glenn thru is sh and tony flatto, gentlemen, good to see you, thank you for joining us. Good to be here. So the president went to an amazon. Com facility in tennessee this week, laying out a plan that he called a grand bargain. That would create jobs, particularly middle class jobs. Proposing a rewrite of Corporate Taxes. Glenn, what do you think of the plan, walk us through it and how do you think it fits into the economic agenda . Its a plan, its kind of a mixing up of left overs. You know, he has had this idea for about 50 billion of infrastructure improvement, schools, highways and really a drop in the bucket for the 2 or 3 trillion dollars of improvement, we have seen studies show and he is sort of blending it by making it dedicated to this Corporate Tax restructuring, its a rejiggerring of a new idea, its intention is political more than policy, what he is trying do is split the Tea Party Folks away from the mainstream republicans, we will see if it works. He needs anything he can right now to sort of shift the dynamic, which is stag nation. More politics. Let me ask you this, some in the business community, while they support the idea of a lower Corporate Tax rate, they say the president s plan does not go far enough, because it does not do anything to individual taxes and as a result, a lot of businesses will file as individuals and so Small Businesses are not included in this. I think they would say that it does not do enough actually eye convenient for large corporates in terms of getting the rate low enough, i think the president is talking 28 , and they would like to see it get down to 25 and they are not talking about territorial tax systems either, its not winning a lot of friends. You are right, on the individual side, the vast majority of firms are you know, filing as individuals Sole Proprietor ships, you are not going to win enough friends to get the ball across the finish line. What about the political frame work, a renewed focus on the economy, even the language, the grand bargain has been used for any number of expected cooperation, for congress, and it has not materialized. Is this a legacy move by the president , is it an economic plan with legs . I think its, its not a hail mary, its more like a, you know, its an attempt to just get back in the game and get off the sidelines. The president has been nowhere, we have been dealing with Foreign Policy challenges that he does not exert a lot of control over, we are entering a massive debt ceiling debate in the fall. He has been in stagnant water here. And tony was pointing out specific policy issues with this proposal, which are very clear, i dont think that the white house is thinking in terms at all, they want to start a conversation. I think glenn is right, he talked about changing the dynamics of the conversation here in washington and getting the president , in a position where he can talk about something other than the scandals and irs and other things that he had to deal with over the year. I think it where it is. If you look at the president s, you know, poll ratings this year. They trended lower as the economy has gotten better and some of the data has been better for him. Going into the fights into the fall. I think he is trying to, you know, late the predicate better for himself to put hijsz on better ground to fight ongoing into the fall. But its not, its not, you know, talk about grand bargain. You can say grand bargain seems to equal dead on arrival. You say grand bargain, theres not the elements for it, whether you are talking about big fiscal plans or tax reform plans. I just dont see any momentum for it at all. So, what is the metric to look at for success. What is it going to take to move the needle on the middle class. You know, the jobs numbers have not been anywhere near what the white house would have liked. I think they feel frustrated because the sequestration took hold and the republicans are still talking about cutting spending. I 19, we have seen a lot of the efforts go down in the house recently t white house feels that they need to keep the foot on the accelerator to keep this recovery going and they feel that it might be losing steam, what im hearing from democrats is that the guy has to have a more coherent message or he will get creamed. Thank you, we will see you soon. Up next on the money. What is the secret to raising a game changer child. The founders parents of amazon, they know a thing or two about supporting big ideas. Jeff bezos, tried to take his mom . Did nana ever give you cheerios when you were a little kid . Yeah, she did. Were cheerios the same back then . Cheerios has pretty much been the same forever. So. When we have cheerios, its kind of like we are having breakfast with nana. Yeah. Yeah. Youre so smart. Well, if your son grew up to be one of the most successful entrepreneurs, you might be content basking in pride, but not if your are the parents of jeff bezos, amazon. Coms owner. They have invested in a scholarship program. Its not that long a trip from amazon to the mountains of aspen. We came from cando people. We came from people who thought most projects were things you could solve in the garage. I think that is what humanity strives to do is understand ones surroundings and then go beyond that. As heads of a family foundation, mike and jackie bezos pays it forward. We are looking for students that will be leaders. Bring them to aspen, to the ideas festival, theres a pay back, be ask them to go back and put on their own ideas festival if their community. The bezos scholars, have exposure from leaders to global thinkers. It opens up a universe of ideas that i would not have access to. The idea for the Foundation Came shortly amazon went public. We realized we had the opportunity and the joyful responsibility to do something beyond yourselves. What happens after they leave aspen, the students in the program . They have to apply for a grant from the foundation, we work with them, if the proposal doesnt look, too polished in the beginning, we work with them until its to a stage that it can be given consideration and the festivals they pull off are nothing short of fantastic. Well, my community, theres kids that are succeeding very, very going very, very far and we are not getting the education. And hopefully, somehow, they will close the gap. I cant wait to take an abstract idea and we all have different interests. So we are going to combine all and bring them together, we have known when to bring children and the youth. To the festival. When they leave here, they want world peace. Its, you know, okay. Everything is game. We want to solve all of that. Trying to marrow it down to something that is achievable. Doable. To wide. You have the resources to do a lot. What is it about a student that attracts you . We are interested in the youth voice . We will be cocreators of lusions more than when they got public opportunity. Amazon. Coms founder jeff bezos made a 25 billion fortune, thanks to the growth of the Worlds Largest online retailer. A cop now worth more than 140 million. I read that jeff bezos tried to take his own crib apart with a screwdriver. What did that tell you about him . I was in trouble. Why . He would not take no for an answer. You could argue all you wanted with him, even at 3, you are not ready for a big boy bed. And of course, he went and got a screwdriver, it was that cando spirit. And i think, most young people have that. I dont think that they have the opportunity to use it. You two invested your Retirement Savings in the early years of amazon. Com, that was a big risk. Yes. What made you take the risk . It was not the entire Retirement Funds but a large part of it and jeff approached us with his crazy idea of opening a book store on the internet. But we believed in jeff. And what he could do. It was an investment in jeff. Not in yet an unnamed company. And if he had followed my original advice, which was cant you do this on the weekend . Or after work . We probably would not be buying so much online right now. The investment that we made in young people has paid off bit as much as our investment in amazon. The investment in the children. That was a big idea, amazon, is there a jeff bezos in the program right now . Several of them. My thanks to them both. A look at the news in the up coming week that will have an impact on the money and rising concerns about the french bread. Are the changes tastes changing the table in france. Lets look how the stock market ended the week. For more on our show and guests, check out the website, and i hope you will follow me. Earning season slowing down, the big names you will hear from, disney, and 20th century fox. We get a snap shot on monday of the nonmanufacturing sector and tuesday, microsoft paul allen will debut haebut his album and is requested on samsung sma smartpho smartphones. The average french man consumes half a baguette a day, that is down from a whole loaf in 1970 and more than 3 at the turn of the last century. The french eating less french bread has led to an ad. This is a hope that a reminder to buy bread will create a renewed connection to the classic bread. My guest next week, active Technology Investor ashton kutcher. We will talk about his movie and his Technology Investments that is next. Have a great week, everyone, i will see you next weekend. [ male announcer ] hear that . Thats a flavor cannon about to blast breakfast with deliciousness. Fire prepare yourself for an icing barrage. And the shockwave of filling flavor. Pillsbury toaster strudel. [ whisper ] breakfast goes boom. Faster than kenny can dodge a question. Honey, howd that test go . [ female announcer ] in just 60 seconds, youve got snackdefying, satisfying mmmm. Totinos pizza rolls. Mmm hmmm. Mmmm. [ female announcer ] zero to pizza. Pronto. Right now on nbc bay area news a possible b. A. R. T. Strike is eight hours away and counting. We have Team Coverage this afternoon, including where negotiations stand and how riders are feeling the pressure. Plus, new information in san joses latest homicide. The victim, a 19yearold college student. Embassies had shut down across the middle east today. We will have the latest on what the state department is revealing about the terror threat. Good afternoon, im diane dwyer. Im terry mcsweeney. We are on early because of the nfl preseason game at 5 00. Midnight tonight is weighing on peoples finds aft near when b. A. R. T. Workers