and what can could mean. my one on one conversation with house speaker john boehner. will we approach a fiscal cliff? and what happens when the bush tax cuts expire at year end? and then ethics in the workplace. is it okay to fib on your resume in one silicon valley ceo is learning the hard way. t the "wall street journal report" begins right now.

here's a look at what's making news as we head into a new week on wall street. a huge banking blunder by what's regarded as the safest banks in america. jpmorgan chase revealing this week it suffered a $2 billion trading log, the loss of what ceo jaime. dimon called a "flawed and sloppy derivatives trade." the unit had been expected to post a gain of $200 million. the bank's stock tumbled on the news late in the week. that helped push the markets down as trading began on friday. on thursday the dow had snapped its longest losing streak since last august. market is falling because of fresh worries out of europe. encouraging economic news in the u.s. the price of oil is falling. partly due to slowing demand. gasoline prices are starting to decline as well. we are at the end of earnings season. the dow components disney and cisco both beat analyst

expectatio expectations, though cisco had a disappointing outlook for the rest of the year. mortgage rates have fall ton a new low once again. the average rate for a 30-year fishgsed rate mortgage ticking down to 3.83% this week. what happens when a big bank makes a big mistake? could it mean more government regulation? joining me, austan goolsbee, former chairman of the council of economic advisors for president obama. thanks so much for joining us. >> thanks for having me. >> let me kick off with jpmorgan's big banking blunder, a $2 billion loss from the bank's chief investment office. i find this interesting because it really has been jamie dimon who has been among the very vocal people against the vocal rule, against the idea that more regulation is going to hamper what they can do in terms of proprietary trading. does this set the bank and

industry back in terms of more regulation? >> i think it does. i wouldn't say more regulation. that's the regulation they passed. it strikes me this exactly is what the volcker rule was intended to prevent and you saw the reports from the new york times that the regulators have been all over this exact position trying to figure out why do they have such a big position and whether it was proprietary bet. i think it feels like every time the financial sector gets the lobbying up enough to try to knock down the volcker rule, events come back and push it back to the forefront, whether it was conflicts of interest between banks and their own clients or the riskiness of proprietary trades for institutions that are ensured by the government. so i just think this is a bad situation. >> what do you think? you think the volcker rule then will be implemented this year? a lot of people debating whether

or not we're going to see that which of course prohibits the banks from trading for their own account, the proprietary trading. >> i do think it will get enacted. i don't know exactly the precise form that it will take. >> let me switch gears to ask you about the markets an europe because once again europe seems to be front and center after the elections in france and greece sent of course the antiausterity candidates into the position of power. how do you think this chapter plays out here. >> probably not well. problems that you got in europe are really endemic and feels like they're a bit on a treadmill so they "solve it" and declare it to never be addressed again and then three to six months later here it is back. whether it's back in greece or in spain or next in portugal or wherever. i think given the structure of the eurozone as it is, they will

have a hard time getting out for it. for the most part that's only bad news for the u.s. economy. it is clear they are a in a deep recession over there. they have credit crunch a lot like what we had in 2008-2009 so they aren't going to be buying as much exports from the u.s. it is also clearly having some uncertainty and freaking people out a little bit in the markets here. one thing we don't know is, as things get hairier over there, does that lead to flight to safety and in a weird way have at least some positive impact on insurance tungss in t institutions in the u.s. or does it just freak people out in general and do they start pulling their money out from everywhere? >> i'm struck by the fact that for so long all of these countries were defending the euro, we're unified, we're going to hold this together. now greece is saying we're not following this austerity rule. you've got france we're going do our own thing. we're raising taxes to 83%.

we don't want this as well. these austerity -- so are we actually seeing enough division that you'll see the rur yo break up and does that impact the u.s.? >> that's a key question. i basically think we are. i think what europe's got is they get very different economies locked together in a monetary union. if you want to hold that together, somebody's either got to subsidize -- the rich guys got to subsidize the poor guys on a permanent basis or the poor guys have got to grind down their wages an really suffer it out for 5 or 10 years to try to do the equivalent after devaluation. i think both sides of that seem pretty iftyif tt tty to me. >> do you think we've hit a soft patch in the recovery? >> a bit. i wouldn't say soft patch like it might be a double dip but i think for sure the growth rate slowed down.

i wish i hadn't been prescient on the jobs numbers because i was pessimistic and those ended up being right. i think the base being math is if the economy's growing 3% a year, like it was at the end of 2011, the jop job market is going to improve pretty significantly. you are don't need to hire anybody to grow 2%. could you just get that out of your existing workers by raising productivity. >> concern starting to grow by what happens apartment the end of the year as well when the bush tax cuts expire, that automatic budget cuts kick in. they're calling it the fiscal cliff. do you think that the house, the senate and the president will be able to reach some kind of compromise before the elections in terms of these tax cuts expiring? because taxes will go much higher? >> it seems like we just can't get a break in the economy. we got europe, we got this.

now the fiscal cliff. i'm nervous about it. i think feels to me like both parties in congress are essentially saying we're not going to try to sort this out before the election, let's let the voters decide what ought to happen. >> thanks so much. we'll see you soon. austan goolsbee joining us. up next on the "wall street journal report," is america facing a massive tax hike next year and can anything get done before the election? my conversation with house speaker john boehner coming up. how honest is your boss. the silicon valley shakeup might bring the microscope to personnel files across america. [ male announcer ] this is corporate caterers, miami, florida.

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welcome back. john bainer is arguably the most powerful republican in washington. he has a lot on his plate these days and this week i sat down with the house speaker and weep talked about the election, jobs and getting a handle on america's debt. >> it has to happen or the financial markets will do it for us. in terms of downgrading our debt and i actually think, regardless of what happens in the election, the next couple of years are going to be the most consequential couple of years that we've seen in washington in the last 50 because we've got this debt issue that we're dealing with, really acting like a wet blanket over our entire economy. we've got a budget deficit that's unsustainable. and we've got entitlement programs that are important to tens of millions of americans that aren't going to exist if we don't fix them. >> what are the specific plans

that you would like to see happen? >> first on the economic growth side i think our tax code gets in the way of our ability to grow. i think that we need to overhaul both the corporate tax code and the personal tax code. if you look at our budget, we would like to see a top rate of 25%. and get rid of all the special loopholes and the underbrush in order to bring those rates down and simplify our tax code. at the same time, that will also broaden the tax code in terms of the number of americans paying income taxes for our government. first big step. second step, we've got to stop the regulatory nightmare coming out of the administration. every agency downtown here in washington is in full mode whether it's the epa, whether it's dodd-frank financial rules, obama care, you go down the list. these regulations are strangling our ability to grow our economy

and strangling the ability of employers to hire more people. a third point, we've got o have re real controls on spending. today we've got 10,000 baby boomers retiring every single day. that's 70,000 people a week. that's 3 1/2 million people a year and this is just the beginning of the retirement for baby boomers. >> how do you address it? do you extend the age of retirement? how do you get your arms around this? >> there are a lot of options on how you extend the life of these programs. frankly i'd like to see them all sustainable for the next 75 years. social security, that's not really hard to do. when it comes to medicare, medicaid, the administration went down the path of obama care which in my view will ruin the best health care delivery system the world's ever seen, and bankrupt our nation. i think that's the wrong path. the supreme court's going to make some decision. we'll have to see what they decide. >> i'm going to ask you about the bush tax cuts which expire

at the end of the year, of course nap means things like ordinary income tap cal gains, dividend taxes, dividend taxes being taxed. ordinary income penal are talking about dividend taxes going from 15% to 16% to 43%. >> that's what's going to happen in january if we don't act. the house is prepared to acts. we've already passed 30 jobs bills out of the house that are sitting in the united states senate. the house is going to act to extend the current tax rates whether we make them permanent or we extend them for a year, that debate is still up in the air but we're going to do our work. it is time for the united states senate to do their work. >> in the last few weeks it seems like the pace of economic recovery has slowed quite a bit. people talking about europe and the price of oil. what's your take on where we are right now? >> i think the economy is slowing. and i would not be at all surprised to see it continue. why? look at what's going on in

europe. it's having a very big impact upon the united states. we've got a record low interest rates, yet employers are scared. they're afraid to move forward. >> so can you explain to the american people what the gop would do -- what's number one on the agenda if in fact you get the white house in -- at the end of this year? >> i think dealing with the debt, dealing with our tax code, the two really big issues. the president and i will -- when we had disagreements last summer, woe say well, john, that's what elections are for. >> so does this election rest on the independent? does this election rest on women? what do you think? how do you think -- >> when you look at all the data, i think that the fact that romney is basically tied with the president at this point after being kicked around by his opponents for a year, think it is pretty remarkable. secondly, you have to remember that 90% of the undecideds will go with the challenger. but you look at this through

another lens. you got 47% of the american people are going to vote for mr. romney. you got 47% probably today who are going to vote for president obama. that 6% that's going to make the decision. remember this -- this election is going to be a referendum on the president's economic policies. they've failed. they have avenue actually made the economy worse. >> well in the past i know that some journalists have triggered you to cry. you haven't done that in a while. are you trying to change that image? >> no, no. listen, i've met every crier in america. they come and put their arm around me and say, hey, i like you, i cried too. up next -- the truth may set you free and it could cost you your job. just how common are resume misrepresentations in your workplace? we're talking ethics in business and every day. i've been crisscrossing the gulf for the past two years now.

i can tell you, down here, people measure commitment by what's getting done. i'm mike utsler, and it's my job to make sure we keep making progress in the gulf. the twenty billion dollars bp committed has helped fund economic and environmental recovery. another fourteen billion dollars has been spent on response and cleanup. long-term, bp's made a five hundred million dollar commitment to the gulf of mexico research initiative... to support ten years of independent scientific research on the environment. results will continue to be shared with the public. and we're making sure people know that

the gulf is open for business - the beaches are beautiful, the seafood is delicious. last year, many areas even reported record tourism seasons. the progress continues, but that doesn't mean our job is done. bp's still here, and we're still committed to seeing this through.

welcome back. yahoo! is currently investigating its ceo following the revelation that the internet company's fifth leader in six years may have misrepresented his academic credentials. what's wrong here? joining me now, randy cohen, author of "be good how to navigate the ethics of everything." he wrote "the new york times's" "ethicist" column for over a decade and just to get things straight, he graduated with a major in music. >> i have no musical ability of

any kind. >> you graduated and you wrote it and that's your story and are you sticking to it. scott thompson was said to have a computer science major from a school where that wasn't even an option until several years after he graduated. he calls it an inadvertent error but this information was on yahoo!'s website. in addition to some of the company's s.e.c. filings. what went on here? how common is a representation like this do you think? >> i've read that one-third of all resumes have a significant falsehood on them and generally a false degree. it seems an astonishing lie because it is such an easy lie to check. >> exactly. are people checking? >> apparently not! and this i think we see a kind of fake outrage that when daniel loeb decided to bring this up, it wasn't because he was fess tidous about what's required to be a good manager. it is that he had interest in taking over the company. let's talk about scott tomorrow sob here.

o how wrong is this behavior in your view? >> it is completely wrong. it is unambiguously wrong. your resume has to be an honest account of your professional life and your educational history. but is it a felony or misdemeanor? it is an odd thing. at leaf in choosing an appropriate punishment. i wouldn't fire him. he unambiguously did wrong. there's no question. but what's the appropriate punishment? five years ago the admission officer at m.i.t., had been a great admissions officer, but it turned out she had fake degrees. i think this is institutional showing off. >> why did she lie though? >> why indeed. the dark recesses of the human heart. who knows? sometimes you feel pressure to have in retrospect what looks like a professional accomplishment. sometimes there's a raise up for grabs.

it is so strange! why do people flplagiarize? the more people that read your plagiarized book, the more sure you are at getting caught. honesty is not our default position. all of us tell significant lies every day, not just hello, how are you, but lying as a kind of social lubricant. >> i'm glad you brought up jan loeb. he was an activist investor, is upset with the company's management. he went digging, he finds this out. was that ethical? >> yes. it's perfectly reasonable for him to bring up actual true information about the company. what's not appropriate is this response of complete umbrage of, he does not care that scott thompson lax a computer sibs degrd science degree. look at his tenure at paypal and say is he good at this job or not. daniel loeb is not just looking

for ammunition. >> you've got senate candidate eliz be elizabeth warren, marco rubio, are they responsible for fact checking their patients and grandparents? >> yes, they are. i think fact checking may be an extreme word for this. elizabeth warren with you knew her own family history and knew her own family stories. mark rubio knew his, too. it is t just seems like such a gotcha kind of culture. >> that's why proecunishment is question. you can suspend someone, fine them. you needn't fire them. it is important to find an appropriate punishment because when you make punishment too

severe, people don't come forward. >> really fascinating stuff. randy, thanks so much. sfli enjoyed being here. >> we appreciate you having you with us. up next on the "wall street journal report," a look at the news this upcoming week that will have an impact on your money. and will facebook going public be a game change for the technology industry? stay with us.

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wsjr.cnbc.com. and follow me on twitter and at google plus. now a look at the stories coming up on the week ahead that may move the markets and impact your money this week. e releases out from retailers -- home depot, target and walmart. the retail sector has been very a active. tuesday the price consumer index tracks inflation on the consumer level. wednesday we get housing starts. the number of new residential units that begn construction last month. as well as the minutes from the last meeting of the federal reserve open market committee. how about this -- do you like it friday may 18th. spefkted day for shares of facebook to begin trading on the nasdaq. lot of hype about that ipo. of course, it is the most widely anticipated initial public offer hg recent memory and the social network's road show is winding down. facebook's stock will be offered to the public at between $28 and $35 a share. giving this company a valuation of up to $96 billion, probably a

lot more than that, ceo and founder mark zuckerberg appeared before potential investors this week wearing a hooded sweatshirt. so, should the head of a publicly traded company dress the part or like a zebra thanking its spots is it too hard for zuck to change his hoodie? my guest next week, pulitzer prize winning author robert caro. have a great week, everybody. see you next weekend. what we achieved here. what we learned here. and what we pioneered here.

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