welcome to the wall street journal report. is the summer market meltup over? a new warning about that pesky fiscal cliff. what does it all mean for your money? is america in decline? a provocative discussion with frank rich about whether our best days are behind us. and the girl scouts are about a whole lot more than selling cookies and lighting camp fires these days. how teaching girls about the economy is good business. the wall street journal report begins right now. >> this is america's number one financial news program "the wall street journal report." now, maria bartiromo. >> here is a look what's making news as we head into a new week on wall street. inch by inch the federal reserve moves closer to action once

again, but it is kind of like watching a snail's race. in minutes released from the last fed meeting, the fed's open market committee changed key language that sent a signal to the markets that it is preparing new steps to boost the economy, but it did not say when or what those steps may be in terms of that stimulus. the markets reacted with a big yawn to the fed statement. the s&p 500 falling back from its post-financial crisis high reached earlier in the week. the dow having its worst day in a month on thursday though it did rebound on friday. we're at the tail end of earnings season. the news has been grim. dell beat expectations but the company offered a gloomy outlook. hewlett-packard beat estimates and lowered expectations. best buy earnings fell 91%. the company stopped offering any guidance. and apple game the most valuable company in the world after the stock price hit $665 on monday. the company is now worth more than $623 billion eclipsing the mark microsoft hit in 1999.

the fed inches closer to a move, a warning from the congressional budget office. what does it all mean for your portfolio? joining me is alison dean, senior adviser, and it's great to have you on the program. >> thank you. >> a lot of cross currents this week. the fed minutes were released. they seemed to indicate an increased chance of more action to stimulate the economy from the federal reserve. is that what you're expecting? do you think the fed creates more stimulus? >> i think there is a potential chance they could do it if we go into almost a vacuum of activity leading into the elections. i think the elections are going to be some of the ugliest we've ever seen as far as what comes out in an environment of uncertainty with all these negative campaigning. could you find people really pulling in their horns and not spending and that the fed might have to come in and stimulate a little bit more or people's fear of the fiscal cliff. my sense is actually the underlying trends in the economy are better than expected. >> the issue is, is the fed really going to be effective? all the stimulus we've seen from the federal reserve already, there's some real debate on how much more effective they can be.

do you think they'll actually move the needle in terms of economic growth? >> i don't think so. as a matter of fact, i have heard people calling for the fed to do more. my view is at this point what we need to have happen is corporations to start hiring or for washington to come together and put in place policies to give people a sense of what's going to happen in the future and that we're focusing on trying to restore economic growth. i think the fed has run out of things that can be effective. >> i feel like they keep bailing out the white house. they're ignoring all these important issues like the fiscal cliff. we need to see actual policy on taxes, on the spending programs. >> i agree. i wouldn't say just the white house. i think it's the white house and congress are equally culpable. to some degree congress has made it its mandate to make this president unsuccessful which i think doesn't strike me as a very possible policy. >> you had a slow melt up in the stock market, so the market is going higher. i guess on the fed or on the corporate balance sheets which appear to be very strong, how do you think this market plays out heading into the election? >> i think we're going to have a

sideways market. we've had a nice melt up but i think we're about to go into a period of incredible uncertainty, negative campaigning. europe is starting to show up in the headlines. the market tends to trade with fear or lack of fear with europe these days. >> this week the nonpartisan congressional budget office had two pieces of news. two notable points. one that the deficit will hit $1.1 trillion again this year. this is the fourth year in a row we're above $1 trillion. and then, second, if there's no solution or extension of these tax cuts that we're talking about, the fiscal cliff and spending programs, we will slide into recession in 2013. do you think we are looking at a recession in 2013? >> no, i don't think we are. regardless of which party wins, a lot of this will be dealt with after the elections. leading up to the elections there will be a lot of scare around that. i think you will see an extension of the tax cuts until we see signs of economic improvement and probably scaling back of some of the cutting of

different programs. so either party i think will come up with a solution to prevent us going in a recession. >> they've got to come up with some kind of agreement on those tax cuts and the spending programs, otherwise it will lead to layoffs. it will make people fear that their expenses are going to go up. >> at a minimum corporations are going to do nothing until they know what the new policies are going to be and that will exacerbate a very weak economic situation. doing nothing is another issue. >> let's talk about housing. here we maybe do have a little more clarity. what are you seeing in the housing market right now? >> stability to improvement. i think to me that's one of the most positive things coming out. it might be somewhat a contributor to both the improving market environment as well as the fed saying they will do things but not being very committal. the fact that invours are low, demand is picking up and pricing is improving all are positive and it's starting to show consistency. i think that's a very good sign for consumer confidence and, therefore, spending and economic growth down the road. >> this is so important. this was really the crux of the problem over the last couple

years. do you think this stability we're seeing in housing is enough to create jobs? >> i think it is. if you see what's been going on with home builder profitability, my sense is they're going to start hiring and as people start buying houses, the ripple effect of what people start consuming increases demand and, therefore, the need for corporations to start hiring again. >> so what does this mean for investing right now? how do you want to allocate capital? >> i think people have had too much money in fixed income. the equity market in the u.s. is still very inexpensive. if we have a volatile environment for the next couple months, it might be a time for people to take the opportunity to reallocate some of their more conservative money sitting in fixed income into the equity market. >> equity markets meaning dividend payers? what areas are most favorable from your standpoint? >> i think dividend payers are always healthy companies showing positive profitability trends, but i would also say focusing on the industrial sector, economically sensitive parts of the consumer sector, and some of the more export-driven

industrial businesses and technology are all very attractive. i would keep away from financials. i think the regulatory overhang is still something when you see a bounce in financials, i don't see them as long-term investments right now. >> those stocks have really been under pregnancy. president bush. >> not to mention rock bottom interest rates. alison great to have you on the program. >> thank you. >> alison dean joining us. up next, is america exceptional or in decline? the debate shaping the way we do business and play politics. my conversation with frank rich. and scouting out the best way to teach girls about personal finance from thin mints to mortgage smarts, the girl scouts are preparing women of the 21st century. take a look at how the stock market ended the week. back in a moment. two years ago, the people of bp made a commitment to the gulf.

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is the great american dream officially dead or do we just like to talk that way? my next guest says we may be enthralled with the idea we're not that great anymore. frank rich is writer at large for new york magazine. thank you for being with us. >> good to see you. >> you recently highlighted the growing cottage industry of books and experts focusing on the idea of america in decline, the political debate over american exceptionalism. tell me more about this fa none no -- fa fom none. >> i don't think we are really in decline. the declinist book are by people left, right, and center. it's almost a publishing craze, not quite "50 shades of grey" or as sexy but still. i think if you look back and

realize america's always thinking it's in decline. some people will remember the "sputnik" moment in the late '50s when the soviets launched the spaceship and we thought, oh, my gosh, our schools stink, everything is terrible, america has no future, we've lost the cold war. we had a similar setback at the turn of the century when the dotcom bubble burst and also when -- after 9/11. maybe it's almost a healthy thing. also, in the late 1980s after that crash, there was, you know, a big best selling book about the decline of the great powers. there was, again, a feeling that we were through. so, you know, it may be healthy that we care enough and worry -- get ourselves ratcheted up to this level of anxiety periodically so then we'll try to improve the things that are wrong. >> but have we lost something, frank, given the financial crisis, the growth outside the u.s., have we lost something? >> yeah.

look, i happen to feel that the biggest problem is one, and this is hardly my original idea, the biggest problem is there is a sense of unfairness in american society, particularly in the economy, and part of it, of course, is exacerbated by horrific unemployment, but also the issues of income inequality, the issues of a squeeze on the middle class and the feeling also that culprits were not punished for the misdeeds that laid waste to the economy three or four years ago. so that's a real problem, and it's one we have to correct, and i do think that's why you see these high we're on the wrong track numbers, people are disgruntled about government on all sides. you see the angriest level, whether it be the tea party or occupy wall street on the right and left, but on the other hand, this country has a lot of strength. it has incredible entrepreneurs.

it has people who for all the political polarization are basically good-spirited, and it also has in my view a younger generation that's coming up, people like in their 20s and just out of college that if they can -- we can get past this economic hurdle have a lot to offer, and i find often inspiring when i meet them. >> it's interesting, we're calling this the new normal in terms of growth and employment in the leading economies. the american middle class though is struggling. the rich increasingly vilified. things are not business as usual. >> no, they're not business as usual. the figures all show that the middle class income is essentially stagnant and that's just for the people who are employed. of course, there are many poor people in this country and there are also not only the unemployed that are officially counted but the people who are in such despair that they've given up looking for work and that's something that has to be corrected and has not been. it's hard to do it when you're

fighting off the aftermath of a major recession, but, you know, we can't let that be the new normal or then the country is in trouble because the country not only has an economic mood, it has a psychological mood, and we have to feel that we can in the american way better our situation and progress or we're not going to do it. otherwise it becomes a sort of downward spiral. >> i'm glad you mentioned that because the psychological impact is important actually. so what danger do you think this current debate over the fiscal cliff is having? like last summer's debate over the debt ceiling. is that impacting this country economically and politically? >> well, it probably is if you look at, you know, the kinds of things you look at, world markets and, you know, sort of the mark economy. in terms of, i think, the general public, it's just more noise from washington. >> how do you see this playing out then, frank? this election year, you have the selection of paul ryan as governor romney's running mate.

it seems to have framed the debate on how the two parties see the economy very differently. >> well, yes. i do think -- i have spent some time lately just re-reading old clips about the 1964 election. i'm not saying it's going to have the same result, but it's actually very similar to that debate where you had lyndon j johnson, who was a big government, great society democrat who feels -- who felt that the government could solve these problems and was useful in doing that, and you had a conservative candidate in barry goldwater who argued in much the same terms we're hearing today that the private sector is the best way and legs government is more. >> so what do you think the word is from the public? did the president's administration do enough since 2008 to address the root causes of the financial crisis, to build a better future? >> i think that people have varying opinions about that. i think no one can say that the president's focus was laser-like on jobs from the beginning or

that the job growth is what anyone wants to see. on the other hand, you can say and i think accurately that if it hadn't been for the bank bailout, which was after all a bush/obama, both endorsed it, as did john mccain, as did mitt romney, we would be in much, much worse shape. i do think as the very top 1% is going back to business as usual, there's a feeling from just ordinary americans, wait a minute, what am i missing here? how come they bounce back and i haven't? and people in the left, right, and center have different explanations for why that is and different villains they want to pick on, but i think it's hard to say this is all obama's fault or all anyone's fault really. >> frank, great stuff. good to have you on the program. >> thank you. >> up next on "the wall street journal report" you want a badge for that? be prepared, the century old girl scouts of the usa going strong and leading lessons that

are right on the money. you can find us on facebook. check out wsjr with maria. about this country! including prilosec otc. you know one pill each morning treats your frequent heartburn so you can enjoy all this great land of ours has to offer like demolition derbies. and drive thru weddings. so if you're one of those people who gets heartburn and then treats day after day, block the acid with prilosec otc and don't get heartburn in the first place. [ male announcer ] one pill each morning. 24 hours. zero heartburn. >> up next on "the wall street

since 1912 the girl scout movement has taught life and leadership to 59 million women around the world building generations of tough cookies, including myself. to meet the needs of a changing global economy, the girl scouts is growing up a bit when it comes to money management offering lessons in dollars and cents alongside camp fires and

cookies. my guest right now, the ceo of the girl scouts of the usa, anna maria shaf vez. >> thank you for having me. >> you took the job at the end of last year and the girl scouts are celebrating 100 years in 2012. tell me about the organization today, how you're serving girls in the 21st century. you're the first latina to run the organization. >> i am actually the first woman of color so very honored to do that. i myself was a girl scout, like you, and really learned some skills that helped me in my future career, and we are 100 years old. we were founded in 1912 and since then we've had 59 million members, so approximately 1 in 2 american women were part of our organization. so over 100 years we've developed leaders, but we're also developing individuals who are giving back to their local communities. >> you really are. selling those cookies allows a young girl to run her own business and teach them business lessons. was that an intentional lesson of the program or an accidental benefit? >> it has been very purposeful and we've been selling cookies

in our communities for decades, and i think part of it is we're teaching girls to have fun statement creating a revenue stream which they can reinvest in projects they really care about. and at the same time they're learning some very critical business skills. you know, when you see a brownie set up with her cookie booth site, she's learning business skills around goal setting, decision making, how is she going to use that revenue to do something great in their community. they're learning people skills, how to make that cold ask to somebody who walks up to her cookie booth and then investing it in something she cares about. >> i love it. girl scouts introduced a series of financial literacy merit badges, everything from good credit to financing my dream. great idea. tell me about the program. >> when we looked back in the last couple yerars with the economic situation in this country, we realize girls get scared about talking and learning about money. we wanted to provide a platform where girls could learn it in a very fun way. so not only are they learning at a very young age what money is.

when you're a little daisy leader at 5 years old, you're learning how to count money, why you save it, and then maybe when you're a senior in high school as a girl scout, you're learning how to invest it for your college future and also what is a mortgage? how would i build and buy my future home?terrific. what are you hearing from parents? >> they love it. it's giving them an opportunity to talk to their daughters about money management, what is a checkbook, how do you save for your future. and it's allowing girls ton innovators in their community. they're taking the revenue from their cookie program or their own financial business and they're investing it in inventions they create. we have a group called the flying monkeys. it's a girl scout troop in iowa, and they use their cookie money and revenue to create a prosthetic hand for a little girl, and so from that they invested, they're now waiting for a patent, and they won the x prize and $20,000 to again do

something with their creation. >> amazing. that is just terrific. was there a catalyst or, you know, something that pushed the development other than the economic times that we're living in? >> well, you know, our financial program is based on the cookie program's per se and it's run by girls. they raise $760 million every year, and so we wanted them to learn the power behind the cookie program because, again, it's run by girls. they can then take that money and invest it in the local animal shelters, you know, anything they're really passionate about, and what's wonderful about it, too, is that we have volunteers, adults, who are standing right next to them also learning through the process but also encouraging them to be that future leader in their local community. >> do you think girls today are planning their lives or their careers differently in a different way than we were as kids? >> absolutely. when i was growing up in arizona, we didn't have the technology we have now, so girls are sitting in their homes in

school looking at technology in a different way. they're getting a lot of media messages about the future and how they need to plan for the future. so i think girls, you know, again from the age of 5 all the way to, you know, senior in high school is really looking about how they can change their lives and the lives of their families. >> it's great to talk with you. thanks so much. >> thank you. >> anna maria chavez joining us. >> up next, we'll take a look at the news in the upcoming week that will have an impact on your money. and who carries the most weight in congress when it comes to hefty bank accounts? that holwowood made a movie about it. ahhhhhhh!!! twice the stain fighting power as the next leining liquid value brand. era, the only detergent that's chuck norris approved.

more on your show and our guests check out the website wsj r.cnb c.com and i hope you'll follow me on twitter and google plus. look at the stories coming up that may move the markets. on monday the republican national convention will kick off in tampa, florida. tuesday the s&p case-shiller index will be out. that is the report on home prices in 20 cities across the country. wednesday we get the next reading of gross domestic product typically a market mover. also wednesday the quarterly report on total corporate profits from american businesses is out. on thursday the federal reserve's annual conference in jackson hole, wyoming, will kick off. investors will be watching chairman bernanke's speech for any clues regarding additional stimulus by the fed to come. and friday the latest reading on consumer sentiment will be out. finally today, show me the money in washington. a list of congress' richest members came out this week from the hill newspaper. at the very top, texas republican michael mccaul with

$290 million, more than twice the net worth of the runner up. he's the son-in-law in of clear channels communication founder. john kerry is the richest democrat. his 198 merchandise is $100 million plus more than anybody else in his party including the guy named rockefeller. thank you so much for being with me. my guest next week, labor secretary hilda solis. she will join me for a look at the american worker on the labor day holiday. keep it right here where wall street meets main street. have a great week, everybody. i'll see you again next weekend. ask me what it's like when my tempur-pedic moves. [ male announcer ] why not talk to someone who owns an adjustable version of the most highly recommended bed in america? ask me about my tempur advanced ergo. goes up. goes up. ask me what it's like to get a massage anytime you want. goes down. goes down. [ male announcer ] tempur-pedic brand owners are more satisfied than owners of any traditional mattress brand. ergonomics. [ male announcer ] tempur-pedic.

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