normal which in and of itself could create another shortage. >> that's extraordinary. i'll think differently about the pumpkin when i see it. >> i was at the grocery store last weekend and there was only one can. >> did you grab it? >> i've got three cans on my slefl a and it will stay there until thanksgiving. >> thanks so much. coming up in the news room one hour from now, 4:00 eastern time, paying cash for food leads to healthier food choices. do you believe that? we'll talk about that in the chat room with jaqui. she'll be on the sofa. meantime "your money" starts right now. the stock market is up, but where are the jobs? that's what voters want to know just over one week before the midterm election. welcome to "your money," i'm christine romans. ali velshi is off this week. democratic congress, democratic presidents and the economy remains issue number one. how does the party in power sell this economy?

cnn's chief national correspondent john king is the host of "john king usa" which airs every weeknight at 7:00 p.m. eastern. john, here's the jobs picture. 9.6% unemployment, 14.8 million people want a job and can't find one. nearly 42% of those out of work, they've been unemployed for six months or longer. are democrats going to pay the price for so many americans still being out of work, john? >> in a word, christine, yes. and it gets even more painful. if you take a map of that unemployment and overlay it where the most competitive in the battleground races are this year. nevada has the highest unemployment in the country. if you go state by state, the senate majority leader harry reid is in trouble in that race and that's one of the reasons why, high unemployment. look at california, a democratic state where republicans have a chance for governor and senate because it too has high double-digit unemployment. the rust belt in the middle of the country is a place where republicans think they can pick up huge gains when it comes to knocking off vulnerable house democrats and picking up seats all across from pennsylvania, ohio, michigan. republicans look at the map. they see high unemployment and

they equate that with vulnerable democrats and with not much time left. just a little more than a week. republicans are very confident. >> i wanted to give you some sound here and get your opinion. the global editor at large of reuters. president obama's chief economic austin gols bee stated the case to wolf blitzer in "the situation room" this week. take a listen. >> he's blaming the guy who is cleaning up the mess for making the mess. that's my point. there's still a lot of mess and we're trying to get out of a deep hole. and the unemployment rate will go up. it's just going up much slower. and we've now had nine straight months of private sector job creation and generated 863,000 jobs in the private sector over the last nine months. >> is there enough improvement for democrats to run on their economic record over the past couple of years? >> well, i think what is so hard for the democrats right now is they have a very hard message to sell. what they're trying to argue --

and i think it's probably true is that this economic crisis is not their fault. and that their actions were actually incredibly bold in response to the financial crisis. and absent that sort of action, things would be much worse. but this is two years since the democrats took power. and i think it's very, very hard message to sell. selling is counterfactual saying, okay, things might be pretty bad but imagine how much worse they would be had we not acted. even if that's true, and i think, you know, there's a lot of evidence it is true, that is very, very hard to sell. people tend to look at what is happening to them and they say this is not great. i think the one other problem is going into the crisis, the democrats probably, and the white house in particular probably didn't paint enough of a picture of gloom and doom. we were so terrified about financial crisis at the time. and remember, think back -- think back two years ago. the big fear was financial

system totally falls apart, that was our anxiety. what probably the white house didn't do -- it's very easy for us to sit here saying this now. so i'm not imagining that they should have been pressing it. but what they probably -- what they didn't do was say, look, you know, it wasn't a william churchill moment -- a winston churchill moment where they could have said it's going to be blood, sweat, and tears, we're not promising quick fixes. and that maybe meant people weren't psychologically prepared for how bad it has gotten. >> mark preston, the cnn senior political editor. mark, is president obama a liability to democrats on the ballot this year? >> you know, he is in the south. and we haven't seen him down there. he seems to be on this life-saving mission over this past month to certain democratic senators we've seen him in wisconsin holding a couple of rallies. he's out in the west coast now. and even in, as john says, in nevada where the unemployment rate is the highest in the nation. they think that by having president obama there to help

save senate majority leader harry reid that he still has some political capital there. especially with hispanic voters. but again, you know, you can't put him in some parts of the country. but in some parts of the country, he does play pretty well, christine. >> you know, john, does president obama increase his odds of reelection in 2012 by having republicans win congress this november? then they share this economy with him. if you continue to have unemployment too high over the next couple of years? >> funny you ask, because that's the question in washington at the moment. is the president some some way personally benefit from this even if his party gets spanked pretty bad in the elections. and the answer really is we don't know, history suggests maybe. bill clinton certainly looked very weak at the polls going into his first midterm election in 1994. the republicans took control of the congress, everyone said bill clinton was a one-term president. he went on to win relatively handily releeks. ross perot was a factor in 1996. along with bob dole. don't believe the polls now when you hear obama is a one-term

president. he will have a chance to redefine his presidency. the question is, will republicans work with him? or will we have a polarized washington and a 2012 campaign beginning right away? and is this president, can he be like bill clinton who loved the foyle of the republicans and very visceral in his opposition or will obama be the thoughtful law professor and be more detached? we don't know the answer. >> if i can jump in there, john. i think the last question you asked is really so smart and so important. because i think there's a big difference between obama and clinton. i think triangulation is not really the obama mode of governance. obama himself and his team are people who really wanted to be transformational from the start. that's why they started with health care on day one. and i think we could find them having a really hard time operating governing in a more tactical, as you were saying, sort of more emotional environment. don't you think? >> we saw him do it in the campaign when he was threatened by hillary clinton. suddenly he became better, fiercer fighter as politician. can he do it in government?

that is the question. >> what shocks me when you said when we start the 2012 election campaigns right after the midterms are over. we've got -- it's always one right after the other, john. mark, let me ask you. if the people who are walking into the voting booth cast their ballot in november, are they casting it for a candidate or against the economy? >> no. you know who they're casting it for. let's put it this way. they're upset at washington, frustrated by the fact that the unemployment rate's 9.6 nationally. it's higher in some states. they're not casting it for republicans, per se, because republicans haven't done anything in washington other than sit on the sidelines and let democrats move their policies forward. it's really a vote cast in frustration. and it's really been driven by the grass roots such as the tea party activists. so in some ways, republicans are going to be handed a victory without really having a whole lot of skin in the game come november 2nd. >> and we can debate and we will debate right after this break

what they could do to change things and if anything really does change. stay where you are. cnn election express is on the road. hearing that many americans could be voting for change on election day. next, why voters might want to be careful what they wish for. how are those flat rate boxes working out?

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the recession may have ended nearly a year and a half ago now, but don't tell that to americans who are terrified about their job and their home. the election express stopped in tampa, florida. what's the word on the street? >> reporter: the word on the street, you got so many people right now who, of course, have a tough time finding a job. but now you have a whole new workforce. we're talking about the folks here on the campus of the university of south florida. and also at the university of florida gainesville. those young people are going to be entering the workforce and entering it soon. they're concerned about what's going to happen when they graduate. what's going to be there for them when they graduate. you don't have to listen to them long to know exactly what their concerns are. >> i think most of the people at the university right now are worried about jobs. >> i'm a little concerned about when i get out of college. >> you start off in january and you get kind of nervous because you're immediately thinking you don't know what you're going to do soon. >> and it's because we're all going to graduate and enter that job market. and if there's nothing available, suddenly that's a wake-up call.

>> yeah, and we're here in florida where some areas where we have been. i mean, the state itself seeing 11, 12% in unemployment rate and all of these young people. many of them, christine, they stay in school a little longer. they'll go to grad school, go to law school, whatever they have to do to try to frankly ride out a recession hoping those jobs and the picture is a little better when it's time for them to walk across the stage on graduation day. >> and you know, t.j., when you look at the 9.6% unemployment rate, those kids who are graduated maybe and entering the labor market, they're not included in that number because they're not active members yet of the labor market. so when you think about that, these kids are fighting against everyone else for a job just as they're beginning. and we know that the first job you get is so important about where it puts you on the path for your own personal economy going forward. so we'll keep up the good work, t.j. talking to the kids. and i know when i talk to students, sometimes they can be pretty inspiring. they want to get out there and start innovating and fixing,

which i kind of like. i kind of like. >> well, that, as well, of course. and these young people got so much energy. ready to make their mark won the world. they're a little delayed in it. it's a bit of a struggle for them right now but we're all pulling for them. >> generation x had it easy, i guess, generation y is still learning. thanks, tj. mark, the polls say that the voters are going to vote out the democrats and vote in the republicans. but this is -- this is not a national election. and many of these races, vote -- voters are sending a message by voting out incumbents that bring back money selfishly to their voters to their districts that are now going to reject them. could angry voters actually backfire if they're so desperate for change? >> you know, we've seen this just in the past decade or so. we saw senate democratic leader tom daschle. he was voted out of office. he was from south dakota. just a few years ago. we saw tom foley, the speaker, the democratic speaker like 10 or 15 years ago from washington state. he was voted out of office. we've seen it in the past.

but it's not just them. we're seeing chairmen of very powerful committees. look, the budget chairman of south carolina could lose reelection. ike skelton who oversees services could see re-election. barney frank in massachusetts, why is bill clinton there? well, because barney frank thinks he needs to be shored up a little bit. and bill lclinton is going to b on the trail for john dingell, the longest serving representatives. those two are probably going to win, but the fact that bill clinton has to go to their districts shows that they're a little concerned. >> and, you know, john. president clinton is doing what he can to get voters to reconsider their vote for change. listen. >> i don't want to see my country make a mistake. and i'm old enough to remember that when you make an important decision, never mind politics about anything, when you're really mad, there's about an 80% chance you're going to make a mistake. and you will get the result you

don't want. and every person in this audience who is old enough has made enough decisions when you were mad that you know i am telling you the truth. >> we should get that cross stitched and put in the kitchen. john, when voters are angry, they send the incumbents packing. can a veteran member of congress convince the voters while the country may be suffering, voting in a rookie is not the best thing to do? >> yeah, christine, that has been the playbook for so long. i've been covering politics for 25 years, including the campaign in which bill clinton was the come-back kid. it's remarkable, he's the comeback kid once again this year. he's wanted everywhere. and you were noting earlier, that the president, a lot of places he can't go. the current president. but in the old days, members of congress would go home and say washington's a mess, a crazy place, but i'm the guy that brought you that fridge, courthouse, grant. we are seeing incumbents in both parties losing for saying i'm the guy who brings home the bacon. bob bennett in utah lisa murkowski up in alaska. so the playbook, throw it out.

voters are in a mood they think washington is not making the tough decisions they've had to make around their kitchen tables the past few years. in that old pork, bringing home the bacon argument does not seem to be working. at least not in the primaries. the playbook we have followed for a long time, this year, forget about it. >> stick with us. it's the economy, you feel it every day, chances are you're taking those feelings to a ballot box on election day. but if you vote for change, what does change really mean in washington? what changes for you in the economy? we'll check it out next. because of one word, imagination and reality have merged. because of one word, a new generation-- a fifth generation--

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what realistically changes on november 3rd, on january 3rd, on may 3rd if republicans sweep the house? what changes in the economy? what changes in the jobless rate in foreclosures? can 2 million jobs be created in six months? and health care be repealed? >> well, look, christine, one of the things we have seen in the past two years is even a government that controls the -- all -- both houses and the white house doesn't have a magic lever that it can just pull and push and immediately have an impact on the economy. but i think if we see a republican sweep, we're going to see two things. the first is -- tons and tons of fighting around health care. realistically, i don't think that there is going to be a huge change in health care, but we'll see a lot of talking about it and lots of efforts to trim it around the edges. the second thing we'll see is gridlock.

so if democrats, you know, let's imagine a huge surprise, we're all wrong and democrats retain control of everything, there's a real boost for the democrats for obama. you could imagine a second stimulus. you could imagine the democrats saying, okay, this is the courage of our convictions, let's go in there. that probably won't happen. and that probably means we're not going to see a lot of aggressive action from washington on the economy. but i think there is a really important ideological issue that underlies this debate that we will see played out in 2012. and that is about the size of government. and although it might sound odd, i think the most important place, the laboratory where that question is being tested right now is the uk. the british government has cut the size of government by about 20% this week. >> that's right. >> some people are predicting apocalypse, you know, total depression. if that experiment doesn't work in britain, i think that could have a huge impact on the u.s. and if it does work, it'll have a huge impact too. >> you know, john, it's

interesting because voters they want change, but this is a time when, wow, we need incredible leadership. she was just pointing out massive changes in important policies being undertaken in the uk. we're what? at the third or fourth inning of whatever this thing is that we're looking at in terms of the global economy coming out of the crisis. what realistically changes if you've got new folks in there? >> well, that's an interesting because people so wanted change. in 2006 they wanted change, in 2008 they did and gave the democrats power. looks like in 2010 they still want change, but they're going to give the republicans a bit of resurgence here. what do you get in washington? a desire for change among the voters, but probably gridlock and polarized government in washington. here's what to look for. the question is, can they do this in the lame duck session after the election? or will it spill over to next year? most expect if the republicans make big gains, there'll be huge pressure on the president to cut some deal on tax cuts. do you extend the bush tax cuts and fight it out in the 2012 presidential election? many democrats think that's a good argument for the president to make and carry it into 2012. could he cut a deal where he

gets some of that infrastructure spending from the republicans that he's been talking about? that's one thing to look at the health care point you made is fascinating and important point. the republicans, the tea party candidates especially want to come here and repeal obamacare. remember, he has the veto pad. it'll be almost impossible to do. and many senate republicans don't want to do it. but watch the new class of republican governors. health care reform, insurance regulation is at the state level. many of them will try to give the president fits in the next year or two. >> oh, that sounds like we could have lots of, you know, health care reform is the law of the land and we'll still be arguing about it. mark, republicans are ahead in the cnn poll of polls, tracking congressional elections. is it because voters are convinced republicans have the solution to fix the economy? or are they simply convinced democrats are out of answers? >> i think it's the latter, right? it's out of answers. again, you know, we haven't seen any grand proposals from republicans to say, look, this is going to get us back on track. they've talked in bullet points. it took them until september to

release their promise to america, which was their policy document. i don't know how they were going to change things. but when you use terminology like repeal and replace, you know, it has a nice sing song to it, but it's very difficult to do things here in washington and, you know, as was just stated, you're going to have a democratic president, perhaps a republican house, maybe a republican senate. it's going to be gridlock. and you know, the power players are going to be, assuming this were to happen, look at a bloc of conservative democrats known as blue dogs and see if they start breaking with republicans on some major policy issues. and if that's the case, then president obama's going to have a fit on some issues here in congress. >> mark preston, john king from cnn, thanks to both of you. fascinating conversation. have a great weekend, guys. what happens in the midterm elections could come down to one important four-letter word. can you guess what that word is by now? the answer next. [ female announcer ] any hair shines in the spotlight.

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what happens in the midterm elections could come down to one important four-letter word, jobs. top labor leader richard trumka on our show last week had this to say. >> well, look, the crisis that we face right now is the job crisis. and unless congress addresses that crisis, we really face a generational -- generation loss of unemployment, and we threaten the recovery today. >> union members have mobilized in record numbers to support democrats this election year. the question is, will it make an impact? peter moressi is a professor at the university of maryland school of business. how much does the afl-cio really matter to the midterms? >> well, three of the largest spenders are unions. three of the five largest spenders are unions. the service employees, the public employees, and the national education association. so they're having an enormous impact on ads. >> on ads. will it have an impact in the ballot box, do you think? >> absolutely. they can put foot soldiers out in the field along the ridge

line between red and blue america. western pennsylvania on throughout ohio, indiana, and down to the upland south. that's where elections are determined in the united states. and they'll have their foot soldiers out there. and that'll make a difference in how many house seats the republicans do in the end obtain. >> stephen moore, welcome back to the program. >> hi, christine. >> in 2009, the number of unionized government workers surpassed those in the private economy for the first time. clearly the balance of power here has changed. what does it mean for the midterm election and their lobbying power going forward? >> well, first of all, that's a great chart. and another statistic that is of interest is that less than 8% of the private sector workers now, christine, are members of unions. so unions are now public sector unions. and when you talk to this issue about campaign spending by the unions, i don't have a problem if the teamsters are spending money on political ads. i do have a problem with public sector employee unions doing that.

because essentially you've got government unions getting government money and spending that money for political purposes. the largest government union, christine, has put in almost $88 million into these campaigns. >> uh-huh. that's right. >> and who is that? the largest government union putting $88 million in? >> ask me. >> basically lobbying for their pensions. >> that's right. not only that, they're lobbying for more federal money. and that's what i have a problem with. i just think we should have a prohibition at every state and federal level that any federal money or any government money should not be used for political campaign purposes. >> peter, let me ask you what role the unions will play, if any, in bringing back jobs to the u.s. how does that factor in here? or are they to blame for the flight of jobs out of the u.s. in the first place? because of higher wages and benefits? >> well, i think they did contribute to the flight in jobs. i mean, look at what they did to the automobile industry. they essentially have made it

uncompetitive vis-a-vis the transplants and foreign competitors. i think they're largely responsible. the programs they're lobbying for simply don't work. the stimulus package did not generate the jobs expected. they're very silent and need to do something about the chinese currency, which is really where the action is. and they're so obsessed with things like card check, which would basically take away the right to vote of individuals as to whether they would have a union or not. >> i agree with that. and i say, you know, it's interesting, christine. if you look at the major industries in the united states that are in the most financial trouble, state and local governments, the auto industry, the postal service, the steel mills, those are all unionized. and what's really interesting is if you look at the states where job growth has not fallen nearly as much as the other states, it's the right to work states where you don't have to unionize or you don't have to join a union where businesses are forming, job creating enterprises, and they're leaving the heavily unionized states like michigan and ohio. >> unionization is a leading indicator of economic decline.

>> and i'm -- i'm sure that richard trumka would disagree with both of you. >> i agree. >> i've had dinner with him and talked to him about card check. >> the last four minutes, i'm sure i will not speak for him. given his interview last week, he would disagree with both of you for the last four minutes. thank you very much. it'll be interesting to see how union and the union issues will play out in november. peter morici stays with us, stephen moore, thank you so much. >> have a great weekend. >> you too. three letters, qe-2. not a royal cruise trip destined for south hampton. qe-2 is a term that could help the economy or hurt it. we'll explain next. but first, starting up a business in a down economy can be tough. particularly when finding the right place to set up shop is simply so important. two pastry chefs found that out the hard way in this week's turn around. >> want a sample? we have passion fruit.

>> reporter: they want you to really enjoy your next wedding reception. >> we decided we wanted to make wedding cake that looked great and tastes delicious. because honestly i've never been to a wedding where i'm like, oh, great the cake. >> reporter: at this expo, the pair behind the start-up royally iced cakes hopes to connect with some 1,500 brides to be. earlier this year the business was almost doomed when the industrial-sized kitchen they planned to move into was pulled out from under them. >> we'd worked something out with someone we thought was very generous and was letting us use their kitchen as long as we renovated it. it was honestly about the day we were about to roll the floors out that they said, oh, guess what, sorry. >> reporter: the business came to a screeching halt in the middle of wedding season. >> that really set us back a few months because we had to scramble, start looking. you can't take a phone order and you are not working out of your home kitchen making a wedding case. it's almost impossible.

>> reporter: finding another space to mix, bake, ice, and store, rents were high in the area. but eventually they found a caterer on craigslist looking to share space and split the rent. now the pair can focus on building their customer base in a tight economy. >> the work is enjoyable. we love what we do. that's not the difficult part. it's getting someone in the door, getting your name out there, connecting with a customer. >> reporter: for a young company, experts say by attending this bridal expo, they've come to the right place. >> 40% of all the brides getting married these days are attending these shows. so, it's a very big numb ger and enables these smaller companies to reach large numbers of people and display their products and services in a very short period of time. ♪ [ man ] i thought our family business would always be boots. until one day, my daughter showed me a designer handbag. and like that, we had a new side to our business. [ male announcer ] when businesses see an opportunity,

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welcome back to "your money." peter moreci is back now and joining us carmen wong ullrich thanks, both of you. quantitative easing. peter, i've been talking about this, the move many folks expect the federal reserve to make to jump start the economy. it sounds complicated, it's not really. in the most simple terms, it's simply the government buying stuff, buying assets, things like mortgages. it's why it's believed the fed is going to turn to another round of quantitative easing. in the next months. peter, the market is above 11,000, is this due to anticipation of this quantitative easing? i can't hardly say it or expectations of a big republican win in november? or is it something else? >> well, i think the very strong profitability american companies have enjoyed by cutting their costs and also expanding in asia is an important factor. but the anticipation of a republican victory, i think is

having a lot to do with stocks because the business community has soured on the obama administration rightly or wrongly they have. i don't think that quantitative easing is expected to accomplish a lot. i recently participated in a poll of forecasters over 90% of us, you know, anticipate qe-2 to go out of the docks, you know, on november 4th. but we're not expecting to travel very fast or accomplish very much. >> you're expecting the ss minnow? not a big luxury liner? >> exactly. i guess a little boat in my bathtub is going to leave, you know? >> i think consumers are a little afraid of the qe-2 docking. because what they're afraid of and what i'm hearing is inflation. we see big prices are going up, for example, mcdonald's. but maybe that's not even related. we're going to see prices of things that are really essential to people's lives. remember what happened when gas went so, so high. consumers are really struggling right now especially in terms of confidence. it's going to be hard for them to feel any better when they have to stretch their dollar. >> so glad you brought that up. you have meat prices that are

the highest, you know, certainly since i was a little girl. you've got a big, big rally in grain prices earlier this summer. grain prices rising. the fastest pace in like 40 years or something. peter, what's going on out there really? >> well, with food prices, there's a drought in the southern midwest and so forth, which is driving up the cost of keeping livestock. all the growth in china is driving up commodity prices, oil. you know, every time a job leaves the u.s. midwest for china, world oil consumption goes up because the chinese make things so much less efficiently when it comes to energy use. and someone moves from the country he in china into the city and becomes a consumer of air-conditioning. >> you draw this real direct link between what's happening in the u.s./china relationship to what i'm paying at the grocery store. >> exactly. >> and i wonder if that's going to be a theme that will continue as we go into next year. because certainly these commodity rallies. they certainly beg some attention, don't you think? >> absolutely. and you know, china's set a goal.

a liter of milk for every child. they can't make it themselves. they import it from germany and europe, well, they feed those cows grain. as their incomes go up, it happens. >> i want to get her point of view on this particular story coming up here. changes coming to the 401(k) statement. it could help you save money. starting in 2012, the labor department's going to require that 401(k) plan providers clearly, clearly state all fees and expenses deducted from a saver's retirement account. the goal is for you to know exactly what you're paying to invest your nest egg without a lot of digging. and the labor department says you'll be able to shop around for lower fees. is this a good idea, carmen? >> this is a very good idea to a point. what i'm really concerned about is, of course, we want to see all those fee s a lot of americans didn't know they were paying fees. but there are a bunch of other fees you could be charged, administrative, legal, all that. it's great to see them. what i'm concerned about is i constantly hear from people who are very confused period about how to choose things in their

401(k). now we've got to give them another set of charts and documents to get them to help choose what they need to put their money in. it's going to be very, very confusing. what i really hope is that employers take some time and effort to basically help employees through this process and explain to them -- they're supposed to be very easy to read, charts. you know, some people just can't read charts. explain how this works and how there needs to be a tri um ver rant it's got to be about taxes, fees, and returns, not just about returns. >> do you think it'll make the mutual fund companies more competitive in their fees if it's right out there in the open where we can all see it that maybe it's going to be good for consumers? >> it should. >> the sunlight? >> we absolutely hope so. it really, really should. it really is going to be a shift about people where they're choosing to put their money. we know about 80% of folks do choose no load fees. to put their money in. a lot of folks are paying attention. if we see a big shift here, we are going to see more competitive pricing. >> peter, i'm a little bit of a cynic. it's going to take a whole other year and two months to see these changes.

it always takes such a long time, peter, for the new rults. we give them an awful lot of time to cope and strategize with the new rules, don't we? >> well, sure. the fed does move slowly. the federal agencies that deal with these things move slowly. but remember, people have a lot of money in these accounts and they can roll over all that money, not just the money they put in two years from now, but the money they have already put in. and very often the choices that folks have from their employees are not the best of choices. and they can roll them over into very low-fee options that are available from companies like, you know, fidelity, vanguard. and so forth. usaa is a marvelous company. they can roll them over and knowledge of these fees, economists like this kind of information. transparency is good. >> all right, peter morici, thanks so much. and camm men wong ullrich. a trend in the way you get your news. why the home delivery of your local newspaper could soon go the way of the typewriter. etfs? exchange traded funds?

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back with us, carmen wong ullrich. and in l.a. james andrews, social media strategist and co-founder of everywhere communications consulting firm. welcome aboard. okay. how we get our daily news changing in a major way and your morning paper could be a thing of the past very soon. this saddens me since i started in papers, of course. according to new research out from a lab at harvard, by 2012, ipad sales alone will surpass home-delivered newspaper subscriptions. well, didn't we see this coming? >> well, absolutely. and if you look at social media and the way people are getting news now in social media. those people are our paper boys. if you're following somebody on twitter, social media, i'm following a friend, i'm getting news anyway from a digital source. the growth of the ipad is no stranger. that's going to be a driving force. >> and if you look at the numbers of the folks under 30

adults under who subscribe to newspapers, it's in the teens, if that. and this hurts me too because my husband is a writer for the "new york times." so this is a real huge paradigm shift in how we're getting our information. the question is, are newspapers going to be able to keep up and catch up with what's going on? >> and here's the thing, james. if you've got this ipad, you are a content provider that used to be put on a newspaper page, you have to figure out how to get your content into that ipad. it may be an opportunity for the resurgence of local papers -- maybe i'm an optimist here. a resurgence for local newspapers who can get their small audience, maybe around the world, a place -- an easy place to get that paper instead of the front step. >> absolutely. news is becoming localized. and it is an opportunity for you to reach people right there where they are. you know, gps locater finds out where you are and gives you news right in the location where you are. i think it's a huge opportunity. >> what about paying for it? this is my concern is,

right. >> especially when it comes to local papers, what has killed a lot of local papers is craigslist. because local papers made a lot of money off these ads, local ads. what's going to happen? how are we going to pay for that news? we're very, very used to not paying for our news. what are they going to do? in getting folks to pay for, paying for the content or local ads if you have craigslist around? >> yeah, this is where brands come in. i think in advertising has always been the core of, you know, the business. and i think ads and brands are getting very savvy about delivering content to their consumers. if the newspapers don't do it, brands themselves are going to become news aggregators, they're going to give and deliver the local news, the local flavor, the local beat. so journalists have to come in and brands have to come in and fish where the fish are swimming. and that's really critical. >> james andrews, carmen wong ullrich, you're both sticking around. i want you to see this next story. how many times have you heard, how do i monetize social media for your business, your

brand? s it sdoo word of mouth social media, free advertising, it's a possibility of reaching a new audience for your company or product. but how do you harness it while not wasting your valuable time? it doesn't get more local than this. a 30-minute photo shop in irvine, california. same store front since 1990. but this is an international enterprise now. >> when i started, customer base was about three to five miles. today it's worldwide. worldwide. people find us online through searches, through search engine and twitter searches as well as facebook. >> reporter: mitch goldstone has tweeted some 32,000 messages and has 10,000 plus trackers on twitter and he's constantly trying to make a name for his company, scan my photos. he doesn't just self-promote and shares links and product reviews and blends in a running conversation on line about all those photo. >> if you're not into social media social networking you will

be out of business. i'm going to repeat that. you will be out of business if you don't tweet, use facebook and social media today. >> smart small business owners are embracing and profiting from this free tool. just ask edeh leffler, co-found of beauty yes brand. >> you don't need to spend any money at all to set up a facebook fan page or money to spet up a twitter marketing campaign. >> reporter: leffler launched an online contest to attract the face of the brand it. atracted 150,000 farns on facebook. sales doubled in six months. the social media social butterflies used to use these free tools to grow their business but it's not easy. experts say the trick is figuring out how to turn posts and tweets into dollars and cents. >> it's great if you have 10,000 followers on twitter, but how many of them are paying customers? the strategic have allowed small businesses overlooked and the smart ones really focused on.

>> we've heard it a million times. how do you turn it into business? how do you monetize these free tools and not just waste your time or waste your employees' time trying to get on facebook and twitter and spread your message. well, here's what not to do. don't be boring. don't overshare. don't bombard your customers online with useless posts and don't just promote yourself. instead, experts say become an important resource for your customers, for the people who follow you, who are somehow interested in your business. mitch goldstone, he tests photo products and he posts helpful links to photography stories and blogs. customers respond. they respond to free tips and they want an occasional coupon. you may need to try to cultivate a persistent online persona. respond quickly, bottom line, you can't afford not to embrace social media. it's as essential in today's business world as a phone number. consider a tweet, for example, a tap on the shoulder for someone who is following your company. you must use these tools not

simply to talk to your customers but you have to listen to them, too. try that and let us know how it works. trouble on facebook. why some of the most possible facebook apps could be leaking out your personal information. [ advisor 1 ] what do you see yourself doing one week, one month, five years after you do retire? ♪ client comes in and they have a box. and inside that box is their financial life. people wake up and realize i better start doing something. we open up that box. we organize it. and we make decisions. we really are here to help you. they look back and think, "wow. i never thought i could do this." but we've actually done it. [ male announcer ] visit ameriprise.com and put a confident retirement more within reach.

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facebook has taken some heat this week after ten of its most popular apps have been

transmitting user ids and leaking friends and users' names to dozen of advertisers in internet tracking companies. facebook prohibits app makers transferring the names to outside companies. it's unclear how long the breach has in place but several of the apps in question now have become unavailable to facebook users which begs the question what information is really safe online? james, i say if you think that your information is private when you go on a social network, you know, you're going there to share information in the first place. >> that's right. it's all out there, christine. it's a new world where not only is it out there that you think is private you're actually going to google. facebook is driving more search than google these days so it's all out there and you must use it with a sense of responsibility and understand that information you're providing can and will be used.

>> do you think facebook has to do more to turn over stuff to its apps? does it have to do more? >> i totally agree with you, christine, about this idea that you can perceive that you're on this site. of course, they need to make money and, of course, your information is going to be tracked and used. now i would expect though and this is where there's a little bit of trouble, especially with the apps, i understand if you're going to take my information that i have inputted and do not go to my friends. do not link up to my friends and that's where the apps got in trouble because i may give you permission and there's no idea of privacy when i go in in terms of myself, but this does not give you access to your hundreds of friends that they can go in and get their information. we're not granting permission for that, and that's where the apps really need to be careful. >> james, do you think facebook was chastened by this or do you think they are kind of like, look, this was a breach really. this was an oversight. >> yeah. look. if facebook were a country they would be the third largest

today. i don't think facebook is hurting from this. i think they are taken. they have been working very hard to work on this privacy issue for a while. facebook is not going anywhere, and they realize that, and so they will tweak it and they will come back and they will rise above this but i don't think they have been taken aback. >> what is your advice for people on facebook who think that they want their privacy kept under wraps. >> one thing you should recognize is facebook is always changing their privacy settings. really important to spend time in the back end of your facebook profile and monitor your facebook privacy settings. they change quite often and there's information that's going on all the time especially in the aap section and just realize, on many, many social networks, your information will be used, and you need to make sure you read the fine print. >> with over 100 million facebook apps out there and over 70% of facebook users use those