tv Your Money CNN November 6, 2010 12:00pm-1:00pm EST
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rest of the face-to-face today with kimberly and kerry as well. at 3:00 in the newsroom, presidential historian talks about the memoir from president george w. bush and doctor the joins me to talk about winterizing your body. you talk about your car and house, what about your body. i'm fredericka whitfield, "your $$$$$" starts now. midterms are over but unemployment crisis isn't, even though there are positive new signs. welcome to "your $$$$$." i'm ali velshi. these are the numbers for october which we got. 151,000 jobs added in october. that's better than expected. we're pulling out to show you all of 2010 so far, all of 2009 and 2008 back to right in the beginning when jobs started to get lost. look how it dropped and peaked and we started losing jobs again
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in 2010. now it seems we're back on a roll. here is another thing job creation came from the private sector. we've seen losses in public sector. government jobs are going away. private sector coming back. my colleague christine romans joins me now. is this not the way we want thing to go, fewer public sector and more private sector. is this a signal? >> that's what we've been looking for for months that there's enough money and demand to hire again. over the course of time. let's look at what the private sector looks like. total jobs gained 1.1 million private sector since november 2009. that's incredibly optimistic for many people who have been watching just large scale job losses. we finally have job gains not because of census or government
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hiring because companies started hiring. it's not enough to dig into the unemployment rate. it's not enough to make up for the jobs lost during the great recession. >> that's why the unemployment rate stayed the sim, 9.5%. >> it's going in the right direction. >> director of research cycle institute, picking up where christine was, we were told, told by politicians, republicans and told directly by small business owners that government is in the way of them creating jobs and getting this economy going again. nothing changed in october. the government didn't get out of the way in accept, didn't get out of the wayen october. nothing is different. why have we now seen 159,000 jobs created in the private sector? >> because they had to hire those people. we did not go into a recession. remember in not too long ago everybody was talking about double dip. it's not that the companies don't have the cash, they had a lack of confidence. >> right.
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>> they were afraid of a new downturn. that hasn't happened. all the in coming data has been saying this economy continues to expand, albeit too slowly. >> you're saying they had to hire because demand was up. >> they were forced. >> why do we keep on thinking the government is in the way of business, that it's government that is stopping businesses from hiring. aren't businesses going to hire when they need more people to meet demand? >> i think there are big policy decisions about the amount of government intervention with regulation and all these things. these are the things politicians have been debating and that we are voting on. i think there's probably a little bit of a false sense of control that you could switch a regulation and then the economy will do this or that. it doesn't work that way. the business cycle is so much more powerful than any of these regulations. >> let's bring karen into the conversation. she's a national political reporter for "the washington
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post." karen, good to see you. this economy, in particular the lack of job creation has cost the democrats big. it cost them in the midterms. but a lot of people were saying we might be at some sort of a turning point in our recovery that may continue. who wins as a result of that in two years in the presidential election? if right after the midterm elections all of a sudden the economy starts looking better is that a republican win or president obama? >> well, you can bet that everybody is going to claim credit for it. i really do think that it's going to depend on how the two parties conduct themselves. the fact is, if it starts looking like washington is again able to get things done, that really does make everybody look better. the republicans are taking over congress at a time when this institution is, i think, reviled is not too strong a word. at this point i think everyone has an interest in looking like
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they are actually getting some things done. >> christine, karen, thanks very much. there's a lot to talk about with this economy. there's also something to talk about with respect to the president's trip to india. how much is it costing taxpayers and is it worth the money? we'll tell you why it might be worth every penny when we come back. hey, lawrence, my parents want to talk to you.
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unemployment is at the same level it was in september, 9.6%. but in october the economy did grow by 151,000 jobs. still there are almost 15 million people unemployed. forty percent or more of those people have been unemployed for more than six months. work is hard to find. there are all sorts of reasons for it. as we see in the midterm elections, there have been all sorts of reasons why people say it's been hard to find. let me show you big trends contributing to job loss. this isn't about the recession. this has been going on for 10 or 15 years. globalization, the world is open for business. things are done where they can be done more cheaply. jobs are more movable. we've seen jobs lost to china and other countries. then there's technology. we can do more with less because of technology. it takes fewer people to build a car, design a bicycle, a home, everything. the combination of globalization
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and technology has resulted in fewer jobs in america, not china and india, because america has not found something to replace those low value jobs we've shipped to other places. in some places we've talked about china, that's the big one. many of our manufacturing jobs have gone to china, the far east. india has taken call center jobs and in some cases high-value engineering jobs in demand. president obama is in india right now. jobs at home are his priority. listen. >> on the trip i'm about to take i'm going to be talking about opening up additional markets in places like india, so american business can sell products abroad in order to create jobs here at home. >> sometimes we worry we don't take a global enough view, christine. what i saw last week on tv was a number of people, republicans in particular, criticizing the president's job. on two levels. one, boy, this is a trouble time in america, why is he going on
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this long trip? it's expensive. i think the bill is $200 million. some have said it's a waste of money. >> in fact, the white house has said it will not be $200 million. that is a gross exaggeration by republicans. some republicans have suggested it should be a conference call or video conference for these sorts of meetings. bottom line here, there are some of the top business leaders in the world going with the president. this is a huge and potentially growing middle class in india that is incredibly important for high technology product. also another reason why this is incredibly important, not just for purely economic reasons but political and foreign policy reasons, ali. you need a bargaining chip in the region with ascendent china. we need the biggest democracy in the world to be tied in with american interest and american prospects going forward. there's a lot of reasons why this is an incredibly important
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position and trip for the president to be talking. >> let's bring in rutgers professor bill rogers, formerly with the u.s. department of labor. it's great. we talk to you every time there's a jobs report. it's great to have good news. a bit of good news, incremental. picking up on the conversation christine and i were just having. globalization has eliminated some jobs, technology has eliminated other jobs. those aren't coming back. what is likely to work for americans long-term unemployed, work for the next five, 10, 15 years as india and china continue to do more of these jobs we can't do competitively in the u.s. >> along with the decline in jobs for those who still remain employed, the gobblization plus technology has also contributed to a stagnation or slowdown in the earnings of many americans. also a growing inequality.
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the other piece i want to comment on, talking with make of my colleagues afl-cio they are finding not only when the plant moves, shortly tla ll lly there see the folks adding that value here in the workplace. so one of the things i think particularly for younger individuals, our workforce development center, career technical areas of trade. that is very, very difficult. i can't wrap my mind around it, how you would outsource a plumber, how you would outsource an hvac technician. >> an important point, too, those low value jobs happen on factory floors, they are hotbeds of innovation. some of the best innovation from factory jobs. it's moving to -- >> the whole operation.
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karen, what does president obama do in india? what could he possibly be saying? could you send some jobs back. by the way, if he said that, he said we had our software engineers in silicon valley. you didn't like them. you didn't like their visa. what can president obama do to tout jobs. >> one thing he can do is talk about opening up the indian market. there's a lot of consumers in india. as we were talking about what is likely to get done after this midterm election, one of the few areas where there is likely to be some common ground between president obama and the republicans coming into office is free trade, to the consternation, by the way, to some in the democratic base. i think setting the tone and setting this idea he's open to free trade, especially since there's big trade agreements coming up in congress i think is important.
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>> i'd also like to see research and development type tax credits. some work we did in the previous recovery after the 2001 recession, we found that foreign investment flows really accelerated away from the united states. that is, our european trade partners, their fti was going to asia. companies here in the united states, their also was accelerating out. we can utilize the incentive structure with regards to investment as a way to also minimize some of the loss and hopefully turn it into a net gain. >> christine, poppy harlow was talking to make small business owners a couple of days ago after the election and they were saying the same thing. give us incentive to create jobs and we will. that's a good separate discussion we should have. good point, bill, thank you very much. bill rogers, karen, thank you for joining us. christine, stick around, we have more to talk about. federal reserve is making a big bet they say will help the economy recover. we'll talk about what they are doing and will it work.
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can't get enough of this. we've been talking about qe 2 this week, not a boat, ship but quantitative easing, a term that i think is absolutely ridiculous but i'll introduce you to two people that think it's appropriate. the federal reserve announcing it will pump $600 billion into the economy. that might be followed by
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another $2 or $300 billion. over the course of the year here is how it works. that's the fed on the left of the screen. it buys bonds back from the banks it deals with. if you take the bonds back you give them money. they have more money and the hope is they will lend it to consumers. interest rates are extremely low right now but that's not helping. it's still hard to get loans. credit is still tight. this is the equivalent of tight -- the opposite of tight ping is easing. this is quantitative easing, qe 2, i think there are boring people that invented that name. let's talk about whether it works. quest means business, pete dominick, off beat reporter and host of what the beat week. christine romans as well. >> it's not boring. i love it, quantitative, comes right off, quantitative qe 2, will it be a luxury cruise liner
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into manhattan or the ss minnow. we want to know how the fed does this could be the most important factor whether you're going to get more jobs, more lending and business confidence next year. if they do it correctly, if it's not done correctly, there's worries about sky high commodity prices, a very weak dollar, inflation down the road. that could end up hurting consumers. the fed chief clear in an op-ed laid it out and said this is going to work. don't worry. we did it a couple yearsing a and it was appropriate. this will be appropriate again. >> that was the first time qe 1. this is qe 2. richard, in great britain where you are a conservative government elected on a platform it will cut back, stop pushing money into the economy and have austerity program. we've just elected to the house of representatives a conservative republican majority who say, stop the spending, enthe stimulus. the federal reserve works outside of those rules.
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this qe 2, $600 billion does not need anybody's approval and going in there. it's running counter to what some people think should be done. >> listen, between the two of you, the economics is just all over the place. for goodness sakes, guys, there's apples and oranges, pears and tangerines. it had to do with fiscal deficits that can no longer be run at that level. secondly the quantitative easing you're talking about is designed to push down interest rates by the purchase of bonds. thirdly, it's an untested, unknown, uncharted policy pretty much to do a second time around in the way the fed is planning them. fourthly just to prove that there -- there's nothing easy about qe 1, 2, or any form it has huge international
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ramifications. >> china is very upset about it. >> of course, because you've got rock bottom interest rates in your country. so those dollars now flow to china, brazil, and to all those other countries that have got higher rates. >> right, which makes their currency inflate in value verse the u.s. dollar. >> richard quest is obviously more intelligence than i am and his british accent makes him sound that much smarter. the first time i heard quantitative easing was when i was in my gastrologists office. milton freed, thomas on this side, let's get it together. we talk about inflation. it's a bad thing. now apparently it's a good thing. the other thing, they are printing money out of thin amplt guys you answer this, not me. can't they take money out of the stream, ben bernanke take it out
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of the stream to ease inflation. >> it's a good question, it's the only tools the reserve has, central banks, increase or decrease interest rates. right now they are trying to decrease them. >> i'm with pete, they need a better term and most people are confused about the economics of the whole thing, i'm running with the crowd. richard, crit teen, pete, stay right there. pete was talking about inflation, largely not a concern but in some cases food and clothes, the prices of those could be going up. why now and what can he do about it. plus we're going to take you inside a new movie, inside the financial meltdown, this is called "inside job." listen to this. >> bear stearns was rated aaa like a month before it went bankrupt. >> more likely a 2. >> a2 is still not bankrupt. >> it's a high investment grade, solid investment grade rating. fannie mae and freddie mack were
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aaa when they were rescued. they all had investment grade ratings. >> how can that be. >> that's a good question. >> good question. not so funny. we'll get to the bottom with a new explosive film about the industry on the other side. [ k. tyrone ] i'm an engineer. my kids say i speak a different language. but i love math and math and science develop new ideas. we've used hydrogen in our plants for decades. the old hydrogen units were very large. recently, we've been able to reduce that. then our scientists said "what if we could make it small enough to produce and use hydrogen right on board a car,
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okay. so prices are actually lower on most things than they have been for a long time. everybody is worried if they do this qe 2, inflation, deficit causing inflation, there isn't much inflation. however, in some of the things you use regularly, food and clothing, there might be. the bureau of labor -- u.s. agriculture department says that food prices are rising or expected to rise 2 to 3% in the first half of this year, 2011.
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not just food cotton prices. bring back the polyester. all sorts of things going on in the world, lower demand for cotton because of recession and natural disasters in places that grow cotton. cotton and food are going to make things more expensive for you. where do we sit on the inflation thing. >> my very first job i was a corn reporter, the markets for corn. i was watching these corn prices and it's astonishing the kind of rallies they have had for corn, wheat, meat, you put corn and beans for the meat. all things filter through the food chain. caffeine, coffee at a high, gold at an all-time high. i'm wondering what richard thinks about this? demand is up for this or the money gets cheaper in your pocket and you're looking for investments and places and things that are hard assets. >> it's a cop nation of things.
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it's obviously fundamentals as we like to say. that is bad weather, industry supply and demand. you do have speculative aspects in the market. people do perceive these commodities as being a wade to make good money. i don't have a huge amount of sympathy with this cotton question and food issues. the reason is you can't be a free marketeer and love the free market capitalist way but the moment things start rising you want to massage the market and have a fixed rate. cotton is going up for justifiable reasons and that means we'll have to pay more for quality clothing like my suit. >> no one asking for a fixed rate. there's other things to use besides cotton. >> pete, that's what polyester is for. >> let's be clear about -- >> one thing before you go down your polyester, what is it made
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of? >> oil. >> exactly, plastics. >> let's make one thing clear about richard questions, he doesn't have a whole lot of sympathy period. i'm not sure he has a beating heart at this point. do what i do. i'm an elitist, i don't want dress as well as richard quest or ali velshi clearly. we've stopped eating meat during the week in our house. i believe whatever woody harrelson says, why not legalize hemp. i know richard quest might not wear a hemp suit but i certainly would. >> pete, that's what we love about you. you always make it a little more creative. you didn't even make a comment about richard quest's polyester tie. >> fair enough. >> quality. quality, guys. it even matches -- christine, i'm color coordinated. >> good to see you, pete. i bet we'll see you in the same shirt if we see you next week. but always a pleasure to see
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you. can't find a job the old-fashioned way try search forego a person not a position. first a washington, d.c. business owner gets in the spirit of reviving his business in this week's "turnaround." >> on saturday mornings in northwest d.c. winemakers can grab a plastic cup, pull up a wine box and hear from a specialty wine distribute frere new zealand. >> we have experts that handle the vineyard management and wine magging. >> or somalier from a restaurant. >> only grows italian. >> they cy the best way to buy, drink, taste and enjoy wine will these tasting classes are the brainchild of tony quinn who runs cleveland liquors and wines in d.c. >> for all those people that are saying, tony, i want to learn about wine. where do i go? for this, it's a great way to bring hem in the store.
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>> new competition is cutting into business. >> this is all about smart business, hopefully what keeps us, distinguishes us and ultimately keeps us in business, because the economy is very difficult right now. people a lot of times are voting for convenience. >> after talking to customers quinn decided to take the competition head on by using his 20 plus year of personal connections with wine producers offering something the competition can't, inexpensive but distinctive wines from small vineyards. >> a family owned vineyard. my grandmother owns the vineyard. it's right in the best part of the world for salvenion blanc. >> they try from new zealand, south africa and unheard of
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varietials from texas, idaho, arizona. >> there are approximately 35, 40 wineries in arizona. >> reporter: while some of these wines are off the beaten track, quinn is gambling teaching customer toss appreciate and ask for nontraditional wines will boost sales and keep customers beating down his doors for years to come. cnn, washington. ♪ [ 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, the hartford is there. protecting their employees and property and helping them prepare for the future. nice boots. nice bag. [ male announcer ] see how the hartford helps businesses at achievewhatsahead.com.
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them. christine talks about this in her new book "smart is the new rich." christine, some people are looking for jobs and they don't exist. there are others who can be more creative about getting them. >> we all have to be more creative. the margin for error is slim. when generation x was getting into the workforce, 10 million jobs over 10 years. generation y, 8 million jobs lost. a lot of people baby boomers who had jobs in manufacturing or the trades have found themselves sort of pushed out of this economy. so there are a lot of things people have to do to be strategic right now. among them is don't just send cover letters and resumes willy-nilly. you have to know somebody who knows somebody to get you a job. 80% of the openings aren't even advertised. somebody is looking for somebody. she knows you, your reputation, they hire you this way. you have to work harder. if you can't get a job, ali, i hate to blame the victim. some people are very good at what they do.
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they take all the advice we put on tv, they take all of it and can't get a job. that's a problem with the economy. >> we have to distinguish. there are a lot of jobs for a lot of people there aren't. you bring up finding somebody. the president and owner of job bound. you bring up this point, don't look for the position, the hr people, look for the employee, social networking, somebody who works in that company you can connect with. tell me why. >> a lot of people think if they are looking for a job they have to network with the president of the company or hr director. the way networking works you need to get miami beach, anybody in the company to pass your resume onto hr. it doesn't have to be a senior person. in fact when i was a recruiting director i liked referrals from people working closer to the ground because they really knew the candidate they were referring. they might send me, hey, i worked with this guy in the last
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company, he's fabulous. next time weather watch an opening, let's consider this person. that's when you're talking about in that regard. >> as a hiring manager you want a known quantity. even if one else knows if that person can deliver, there's so many people out there looking for jobs. in the book i give this example of a top tech company where they put in mid level, put out an ad for mid level worker. they got 4,000 e-mails. 4,000 resumes overall. you missouri what they did, they hired from within someone they knew because you always want to go with a known quantity. make sure you're keeping up your network, ties with people. you never know when that's going to be something that will help you get that job. >> how do you find out about job openings if they are not out there, not posted. if people are getting jobs because they know somebody in the company, what do i have to do if i want a job? >> your strategy is to be somebody networking so when they sit in the meeting and say do
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you know somebody, you have your agent saying i know this person or this candidate. don't be shy about networking. get out there and talk to people. make it a meaningful networking relationship. who can you connect with? how can you help them out and they can help you out as well. don't just go behind your computer and ling up with people on linked in. the author of how to say it on your resume and christine, the author of "smart is the new rich." a starring cast of economists and numbers crunchers. we'll go behind the scenes with "inside job." [ 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.
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gecko: oh...sorry, technical difficulties. boss: uh...what about this? gecko: what's this one do? gecko: um...maybe that one. ♪ dance music boss: ok, let's keep rolling. we're on motorcycle insurance. vo: take fifteen minutes to see how much you can save on motorcycle, rv, and camper insurance. "inside job" a new documentary that opens nationwide november 12th. it's a movie you've got to see. it defls deeply into the credit
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crisis in ways i've never seen before. in a minute i'll talk to the director of the clip. here is a clip that sets the stage for what happened in our financial crisis. >> so help me god. >> by the time george w. bush took office in 2001 the u.s. financial sector was more profitable and powerful than ever before. dominating this industry were five investment banks, two financial conglomerates, three securities insurance companies and three rating agencies. and linking them all together was the securitization food chain, a new system that connected trillions of dollars with investors all over the world. >> this is candy for a guy like me that follows money all the time. i think everybody in america who thinks they were affected by the financial crisis needs to see this, charles. the number one question i think is out there is who caused this and can it happen again.
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your movie says basically our regulations on how to do business safely were loosened to the degree that that's what caused it. and yes, it can happen again. >> yes, that's absolutely right unfortunately. it's a heist film. it was a heist that was committed by the presidents of the banks. and they spent 10 years, 20 years, in fact, basically disconnecting alarm systems, lobbying for deregulation and limiting the ability of the government to control the financial system. >> in some way you say lobbying for the inability, contributing to the inability of the government, the government with the backing of intellectuals in your movie seemed to all work in lock tstep. everybody seemed to be agreeing there would be less regulation of the financial system, more profitability, that will trickle down and make everybody richer. >> one of the unique things in
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the film is something i discovered in the course of making it, the economics discipline has in a very substantial way been bought off by wall street. we go through that in the film looking at a series of famous economists who have been on the board of aig and receive hundreds of thousands of dollars a year, sometimes millions of dollars a year. >> basically you're saying they gave it a stamp of approval, gave it legitimacy, so it wasn't politicians or wall streeters saying we should have less regulation, academic america in some way gave it the seal of approval. >> yes. one thing not many people realize and therefore we go into in the film, at the same time this issue of the revolving door between wall street and government was arising, wall street was come opting and corrupting economics discipline and academic arena. >> a very interesting part of the movie. i want to show another clip that encapsulates what happened when
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wall street collided with the mortgage market where the rest of us live. >> in the old system when a homeowner paid the mortgage every monthish the money went to their local lender. since mortgages took decades to repay, lenders were careful. in the new system, lenders sold the mortgages to investment banks. the investment banks combined thousands of mortgages and other loans, including car loans, student loans, and credit card debt to create complex derivatives called collateralized debt obligations or cdos. investment banks sold cdos to investors. now when homeowners paid their mortgages, the money went to investors all over the world. the investment bank paid rating agencies to evaluate the cdos. many of them were given a aaa rating, which is the highest possible investment grade. this made cdos popular with retirement funds, which could
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only purchase highly rated securities. this system was a ticking time bomb. >> okay. another great piece of this movie that really brakes things down for you. charles, this president got a shellacking in his own words in the midterm election. he came in with what you might have read as a mandate to get tough on wall street. now he's seen as an anti-business president. what is supposed to happen? if you're a 90 minute perp walk in there, have apportioned blame across the board, no one has really gone to jail for this. >> nobody has gone to jail for this. i think that's part of why president obama, in fact, got the shellacking he just d one of the most astounding thing about this entire crisis is that it is literally true that there has not been a single criminal prosecution in spite of the fact we know there was an amazing amount of unethical and almost certainly illegal behavior. it's in contrast to prior
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financial crisis and financial crisis. enron, world com long ago in the 1980s snl scandals where hundreds of financial executives went to jail. not a single senior financial executive or company has been criminally prosecuted in the last two years. >> we'll look into more of that. director of "inside job" thank you very much. i wish you good luck wit. a lot of wrongdoing in the financial crisis. why no one prosecuted? we'll talk about it next. receiving the bronze star, that was definitely one of my proudest moments.
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we just finished a conversation with charles ferguson the director and producer of this movie "inside job" that's going to be released widely on november 12th. and we ended up with a discussion about this mystery about how no one has gone to jail for what happened in the financial crisis. let's bring in eliot spitzer, my colleague here at cnn, co-host of "parker/spitzer." eliot, you as the attorney general in new york were actually the face of opposition to this. you were a guy who was trying to shine a light on things that were being done in the financial system that were bad for consumers. this seems to even be worse than the stuff that you were dealing with. >> well, it's the continuation of exactly what we were shining a light on. we began, full disclosure, a peered in the movie and the role i play is to basically say wall street is, in many respects, a ponzi scheme. wall street is so rife with conflicts of interest that the consumer will always get the short end of the stick and the
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brokers and the folks at the top will take away their multimillion dollar bonuses, doing anything they can to pad their own pockets. don't trust them. when we made those cases years okay the opposition was furious. it was powerful. it's precisely what charles ferguson describes in what i think is a spectacular movie. it's a must-see movie for every person in this company to understand what happens. he shines a light on the power of wall street and the outright falsehoods and lies emanating from wall street and the academics to but res his corrupt system. >> jillian, goldman sachs went through this long investigation about its role in the financial crisis. no real punishment there. in fact they paid a fine. businesses thriving, we know that america's businesses have lots of money on the sideline. this country is still reeling from this mess. so i watch this movie and i think, what's changed? no one was looking out for me before. and it appears that charles has underscored, as has elliot, that no one is really looking out for
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me right now. >> as eliot said, it is a fantastic movie and it will make people pretty angry. and frankly, they should be angry because if you compare it to the days of the savings and loans crisis they did have hundreds, if not thousands of people, being prosecuted, going to jail, and there was a sense of retribution. this time around that hasn't happened. and i don't think it's going to happen. one of the problems people need to recognize is to go to jail you need to show that someone's broken the law. and the last few years there has been a veritable army of people on wall street who have been developing products unders name of innovation which basically go to the edge of the law. >> that's an important point to recognize, that the laws, the laws accommodated what we did. and this is something that eliot used to talk about and allen sloane, editor at large at "fortune" magazine. people always tell me why didn't you people in the media blow the whistle on this thing and christine and i were proud to say we were there. so you were, in your 2007 article house of junk you rang the alarm bells about the
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subprime mortgage market earlier than many people had done it. everyone was else still saying it was okay. it's hard to believe that you did it then and it didn't -- it didn't ring any alarm bells. it didn't cause anybody to do anything. so the bottom line is, as this economy recovers, what's to say that we're not going to go back to this world where people are unscrupulously lining their pockets again? >> well, of course we'll go back to that world. because that's what always happens. and it's happened before, and it's going to happen again. and in 2007, i decided at fortune that we would go out and instead of writing about subprime mortgages, find one issue that showed what was wrong with the system. and we went and found it, and wrote it. and there was a whole lot of scurrying around, but by then, it was really sort of over. and the whole thing just collapsed. >> all right. so you got allan sloane at fortune, who's also in the movie, elliot, you have a movie
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that's out there, and you have -- had you as the attorney general of new york going after them in the courts. why so untouchable? what has to happen to actually get the system to change? >> let me give you a little vignette. when we tried to pursue the subprime crisis against many of the national banks, the administration, the bush administration, went to court not to join us but to oppose us and tell us as the state we couldn't do it and we had to litigate this all the way to the united states supreme court. even to get the opportunity to look at what allan properly called, and gillian's newspaper was calling a corrupt system. we knew it was bad. the bush administration, wall street closed ranks and it continues even today. the new, incoming probable chair of the house financial services committee, the congressional committee that oversees all this, wants to roll back the minimal protections that were put in to the dowd/fradd/frank passed a few months ago. >> what the movie shows is most people did operate within the law.
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the law was just too accommodating. >> well, this is a case where everyone was tempted. homeowners who borrowed money they never should have borrowed, they were tempted. the institutions that were buying the securities created out of these home loans, they had no idea what they were doing. and even golden sachs which is now everybody's villain, goldman sachs didn't figure out until mid 2007, i think, that there was a real problem with the securities, and then it went out and covered itself, and of course, did not bother to pick up the phone and call the clients. by the way we change our mind and stuff as garbage. they take care of themselves and the clients took care of themselves and goldman prevailed and the clients lost their money in >> there is one other element to this. i think there is an opening here to make cases. probably won't send people to jail in great numbers but can get money back from the people who improperly profited. and that is to dig deep into the credit history of the mortgages that were being made, the banks knew these mortgages were bad.
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>> right. >> they still lent the money, they securitized the debt, created this time bomb that ultimately blew up that the taxpayer had to pay off. the people who got the bonuses based upon this information that they had that they didn't share with people, give back the bonuses, it is simply not fair or right that they're still keeping that money. >> and it's also an issue going forward, which is you are dealing with a problem of enormous complexity of law and people on wall street dancing around the laws, people also ought to be asking hard questions about whether having an unbelievably complex set of financial regulation today is actually going to create more innovation, ie more unethical behavior, that we will come to regret. >> right. well it's great to talk to you all about it. you're all in the movie. i'm not in the business usually of promoting people's commercial enterprises but i do think it will help us all to see this movie to get a very clear understanding of what happened. hangs to all of you gillian, good to see you again. allan sloan, always good to see you. and eliot, you've g
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