in about one hour from now. the presidential contenders may not tell you the truth about the economy. but we will. i'm christine romans this is "your money." ali has been warning us of an economic storm that could hit our shores. do we hear any of that from the campaigns? no, they say this election is about mitt romney's tenure at bain capital. they say it is about obama care and whether big spending will bankrupt our country. that can wait. right now nothing -- nothing is more important to our recovery

than creating jobs. and for america's middle class, job losses and stagnant wages have hit them hard. it's the middle class in key swing states that will decide the elections. the middle class is not created equal. let's have a look. the most obvious metric is the unemployment rate. this shows you what has happened to the jobless rate in these vital states since president obama took office. the jobless rate has gone up in the states we made red. it's gone down in the states we made green. let's start off with the states in worse shape in terms of jobs. nevada. look at that. the highest unemployment rate in the country. 12%. florida, above the national average. and this is important. it's got 29 delegates. wisconsin, up a little. below the national average. why does it matter? paul ryan is from wisconsin. virginia and new hampshire, still very low unemployment rates. and i want to take a look really though at where things are getting better. one of these states is critical, ohio. the unemployment rate there 7.2%.

this is where mitt romney has to win. he has to win this to unseat president obama. 18 electoral votes. mitt romney and paul ryan are campaigning there this weekend. iowa, also a very low unemployment rate. 5.3%. president obama is campaigning there next week. it's all about momentum in the market though, right? momentum in the jobs market. so let's look at the trend. six out of the eight swing states have lower jobless rates than the national average of 8.3%. take a look at this. florida and nevada have higher than average unemployment rates and high, high unemployment rates. we're going to be seeing both candidates campaign in the swing states right up until election day in november. it's no surprise why. cnn political director mark preston joins me from tampa. he'll be covering the republican convention this week. mark, if most -- in most if not all of the swing states, jobs are the critical issue. why are president obama and mitt romney talking about medicare and deficits instead of jobs? >> because they're going to try

to tie it altogether. it's all about the message of the day. quite frankly for the republicans, christine, they have been taken off message because of this tropical storm that will likely turn into a hurricane. and then, of course, because of the todd akin controversy they do want to talk about jobs. they're trying to tie all of this together. meanwhile, you have president obama talking about medicare. why is he talking about medicare? here where i sit right now in florida in, tampa, florida, it is such a huge issue. and mitt romney has to win florida if he is going to win the presidency. they think that they can take the electoral votes away from mitt romney. that is the obama campaign. and what they say is this is all part of the bigger economy, christine. >> joining me here in the studio, mark, our cnn contributor will cane and bob herbert is a senior fellow here in new york at a liberal think tank. is it fair for voters to judge president obama based on the unemployment situation in their state? >> yeah, it is. i think president obama had a good almost four years of his economic policy.

we all admit at this point that president obama inherited an incredibly difficult economic situation. but he has had four years to put in place many of his policies to see if we can affeeffectuate a recovery. i think voters should be able to judge him on that. >> bob? >> sure. i think it's fair. whether it's fair or not, voters are going to judge the president on the state of the economy and what's happening with jobs. i've been trying to say for years that employment is the biggest issue confronting ordinary americans. you know, it's been like that for the longest time. what's happened though is i think really weird. one, president obama would rather talk about these other issues. the economy is not in good shape. what would have made sense was for mitt romney and paul ryan to focus like lasers on jobs and the economy. but they've allowed the conversation to shift off to these other rounds, whether it's medicare, abortion, what's happening, how women are being treated. so i think that that overall is

a net loss for the republican ticket. >> i don't hear honesty from them about what the options are here. the options are, you know, things could be tough for next year. you go off a fiscal cliff, things are going to be very, very tough. i hear them talking about how they're the man to fix it, but i don't hear anybody saying exactly how critical this moment is for the economy. i guess you can't win saying it's going to be bad if you elect me. really bad if you elect him. >> that's right. i think you're right, christine. there's no big political advantage to explain the dire consequences to the situation. both from a debt and deficit perspective and from an economic perspective. there is no big win. bob talked about employment. right? i would also say in employment or economic issues, it's what -- which way we're trending, right? it can be bad right now, but is it getting better or worse? that's how we should judge both of the candidates. >> everyone thinks that they're middle class. people show the polls relate to middle class by how much money they make or middle class

values. it is the holy grail, right, for candidates to try to appeal to the middle class. the middle class has been hammered. it is smaller. it is poorer. it is harder to stay in it. and is there honesty within the campaigns that a lot of this is going on for years and years? >> you know, you're right. the republican party traditionally gets the more affluent voters, right? they're going to get the wealthier voters to support them. then you have the democratic party which tends to get folks who are not making as much money, you know, the poor some might say. but really, you know, the golden vote is the middle class. if you were to break that down more, it is the independents in the middle class and even to take it one step further, it's the independents in the swing states that we're talking about such as florida or nevada, ohio, virginia. that's where the candidates are really, you know, obviously zeroing in on. what i find interesting is that republicans are in a little bit of a conundrum when you look at ohio or some of the other states like virginia where the unemployment rate has gotten lower.

the governors of the states want to take credit for it. the republican governors. at the same time though, they don't want to say that president obama had anything to do with it. i'm not saying he does. it's a tough messaging point to work off. >> one last point. mark, i know you have a lot of hard work to be doing there. for sure. i'm hearing nothing about europe. i'm hearing nothing about china and a potential slowdown in china. i'm hearing nothing about the fiscal cliff from the campaigns. bottom line is whoever is the next president has to navigate through a bunch of stuff they may not have any control over. >> reporter: right at the top, you said they're talking about medicare. they're talking about the other things. i talk about them being taken off message. you're right. it just comes down to jobs. jobs here in the united states. the unemployment rate and we haven't even talked about housing. the voters are concerned about china. they're concerned about europe. that seems like too big of a macro issue for the voters to put their arms around. they just want jobs in the united states. >> i would argue that too much of a macro issue for voters to get their arms around is one of

the reasons over the past 25 years you've seen the middle class get hammered. because it's been short-termism and elections that have driven economic policy. we'll talk more about that when we come back. mark, have a good time in tampa working the convention. this election is all about the battle for the middle. >> this is a make or break moment in middle class. >> we're going to rebuild the middle class in america. >> we can't just balance our budget on the backs of middle class families. >> sounds great. but what can these guys actually do for america's shrinking middle class? that's next. [ male announcer ] count the number of buttons in your car. now count the number of buttons on your tablet. isn't it time the automobile advanced? introducing cue in the all-new cadillac xts.

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reality because the middle class is actually falling behind. take a look. from 2001 to 2010, median net worth for a three person middle class household fell from $129,000 to just $93,000. part of the reason there is such a dramatic drop, income has fallen over the past ten years as well. going from $73,000 to $69,000 for a family of three. it's become a struggle for those clinging to the middle to maintain their standard of living. i'm joined now by bob herbert and will cane. what do middle class americans need from the government? what do they need to hear from candidates so that they can get back to where they were ten years ago? >> you were talking about honesty in a prior segment. that's what they need to hear. they need to hear the truth about what is going on in this economy. there is no -- we ought to realize this by now, there is no quick fix for this economy. the economy cannot create enough jobs and not nearly enough good jobs to sustain a healthy middle class in the u.s. so we need a big time national

conversation about a long term plan to rebuild the economy. there is nothing like that out. there. >> we're not hearing that. we're hearing differences of opinion on wedge issues or tangentially related issues. medicare is important. you're right. abortion policy is important. you're right. but the big, big story of how we go into fix the economy is not there. >> it's not there. >> i want to talk to you. the majority of americans consider themselves middle class. appealing to the middle class is the holy grail for politicians. bear with me. >> let me tell you, the heart of my tax proposal is i will not raise taxes on the american people. i will not raise taxes on middle income americans. >> republicans say they don't want to raise taxes on middle class. i don't want to raise taxes on the middle class. so we should all agree to extend the tax cuts for the middle class. >> will, you said neither campaign can really be telling the truth here because of the state of the economy. explain.

>> i want honesty as well, bob. stop talking about the middle class. >> why? >> the middle class has been overpromised and underpaid. you laid out how bad it is for the middle class. >> they've underpaid or been underpaid? >> they have underpaid. that's why it's going to get worse. let me show what you i'm talking about. if you accept this premise, that the united states deficit problem and our mounting debt is a problem that must be addressed, well, it is going to focus on the middle class. most experts suggest we need to cut $4 trillion. let's say that we accepted the premise actually that both president obama and mitt romney promised in that clip we just played. that is not we're not going to raise taxes on the middle class. if you confiscated 100% of the income of people that make over $250,000 a year, you would get roughly $2 trillion in one year. what would happen after year one if you took 100% of the economy.

you made a dent in that need but you're not going to get there based on the backs of the rich or the top 2%. so your eyes feast quickly where all the money s but wait. what if we do what mitt romney said? what if we cut our way to getting our deficit under control? well, as of recently, he's promised he would protect social security, medicaid and medicare. he is showing no interest in cutting defense. that leaves essentially other programs and safety net programs which we call discretionary spending which is about $600 billion a year. now again, if you cut that down almost all the way to zero, you could get to your $4 trillion quickly. you're dismantling everything the federal government does outside of insurance and armies. so here's my point. the middle class, if you accept we have to do something about this debt and deficit problem, the middle class is going to be who has to pay for that? >> right. middle class has the money. you're right. middle class is the one that benefits from the services. so what services should taxpayers be prepared to lose? clearly can't pay for it all. >> before we start off -- >> we can't afford our middle class. according to will. >> before we start talking about

losing services, i'm going to agree with will that we n't do anything serious about debt and deficits just by raising taxes on the wealthy. i disagree that we shall be focused on the deficits at all right now. the number one focus in this country should be on putting people back to work. think taxes probably need to be raised across the board. we need to raise the taxes in order to put people to work. because if you don't have the overwhelming majority of american working people actually working at decent paying jobs, you're never going to get enough in terms of revenue to do anything substantial about deficits. >> i think we have to focus on the deficit at the same time. don't select your president on who's making the most promises to the so-called middle class. which, bay the way, most people are not.

ask yourself these two questions. do i want to pay for the service that i must eventually pay for? therefore, should i pay more or cut back? more importantly, this is where we might agree, who, which conditioned date can grow the entire economy? who's policies are better for growing the entire economy? not one class versus another, but the entire economy. >> you're not hearing that, right? you're hearing bits and pieces, not that whole story about who is going to grow the entire economy. >> we're actually not hearing any of that. you know, getting a little frightened because i'm starting to agree with what this guy is saying. >> who, me? >> yeah. the whole point is to have a serious debate and maybe you can make some headway. we're not having that debate at all. >> yeah, we're not having that debate. the other thing about all this is we've got a bond market that that's at 1.65% for a ten-year note. there is no pressure from markets for us to do anything right now on the deficit and debt. really there isn't. other than our credit rating which is, i'm very concerned

about it. there is some relief that the markets are giving us at the moment, but we don't know how long that will last. >> as long as you're right, the bond vigilantes might matter. i'm not convinced that our debt and deficit problem is merely an extension of how the bond market feels about our debt and deficit. >> so many moving parts. thank you so much. really nice to see both of you. election day may be on your calendar. new year's day is even more important if lawmakers don't get their act together. is washington -- is washington really ready to throw you over a cliff?

i've called it congressional malpractice. the congressional budget office calls it a certain recession. it's the fiscal cliff. we're talking about the effects of $1 trillion in automatic across the board spending cuts mandated by congress known as sequester. that combined with a series of tax increases including an end to the bush era tax cuts and a higher payroll tax. measures scheduled to start on january 2nd unless congress acts.

don't hold your breath, folks. if you recall, the sequester legislation was passed a year ago to end a bitter debate then over extending the government's debt ceiling. intense partisan blackmail by both sides nearly shut down the government and led to a downgrade of the united states credit rating. now the enormous amount of spending cuts and tax increases, if they stand, will shrink your economy at a time when you expect your political leaders to do everything they can to stave off another recession. and a new report from the cbo says unemployment will rise, will rise to 9% in the second half of 2013. but what happens if lawmakers act and avoid taking us over a fiscal cliff? the cbo says the economy will grow by 1.7% next year. sure, that's a normal circumstances that would be considered dismal. it's still growth. in addition, the cbo projects two million jobs will be created while the unemployment rate will stay steady at 7%. that's if -- if congress gets its act together.

chief political strategist for potomac research strategies in washington. greg, we all know that congress won't act before the election. they should. would these guys really, really risk taking us into a recession because they're fighting politically? >> you know, christine, just when you think you can't be any more disgusted by the gridlock and dysfunction in congress, a story like this comes along. i got to tell you, i think the markets, the stock market in particular have been on happy pills for most of the summer. reality often sets in in the fall. i think the reality is that none of us will know what the tax rates will be in january until late december at the earliest. >> does this idea that people think there must be back room negotiations going on. they must already be talking about how they're going to avert this crisis. i don't think that's happening. >> no. you know, both sides, christine, are using this for their best sound bites. they want to try out their best arguments against the other side. they're all saying we'll get

something done in december. probably in december they'll kick the can down the road which is what washington always does. they may extend everything through the winter. but this is not a great way to run a railroad, to have nobody sure of what the capital gains rate will be, what dividend taxes will be. this uncertainty i think already is hurting the economy. >> you know, it's interesting. want to bring in dan gross, columnist in global business editor on the daily beast. you hear a lot from wall street and the business community that it's the president's fault that there is so much uncertainty. you could read it this way -- the tea party did this. the gop leadership could not rein in the tea party. democrats didn't have the skills to match tea party obstruction. really, really how did we get here? >> well, i would blame the tea party, the gop and i would also blame this sort of very large industry of deficit hawks. there are a lot of outfits in washington and new york that have been clamoring for years and decades saying we have

do something about the deficit. we need a big deal. we need a grand bargain. but they were advocating this in a climate where republicans are simply if they're unwilling to cut a deal that would make president obama look good, that's been the dynamic since 2009. and they're unwilling to raise taxes. you can't have deficit reduction a, without a deal, b, without raising taxes. so the forces that were pushing for the simpson-bowles commission and the gang of six and all the editorial boards that were applauding this and pushing this are creating this real impetus for real action. for real action. is this sequester and the fiscal cliff because the parties as currently arranged, they couldn't make a deal on stimulus. they couldn't make a deal on health care. there was no reason to think they were going to be able to make a deal on taxes and spending especially in an election year. so this -- i feel like this is sort of one of those slow motion train wrecks you could have seen coming for, you know, many miles away. as journalists, i'm not saying

this is something we look forward to. but, you know, we always like to be on the front page and for people who cover fiscal and financial issues, this is promising a lot more ink for us. >> i don't think it's a slow motion train wreck. i think this train is coming very, very fast. i think it's loaded with explosives. and that's what i'm really concerned about. greg, you hear people say -- the cbo even says, okay, there is a recession next year if congress lets us go off the fiscal cliff. but it would put us in a better debt situation. that's, i guess, the silver lining. is a better debt situation worth a possible recession and 9% unemployment rate right now? >> absolutely not. i tend to share dan's views on the deficit. the bond market doesn't care about the deficit. interest rates are extraordinarily low. as long as the bond market doesn't care about the deficit, doesn't keep me awake at night. so, no, i don't think fiscal austerity is the answer right now. i would say this, though. perhaps counter what dan said. there is plenty of blame to go around.

>> yeah, tell me about the tea party angle. whenever i talk about fiscal cliff, i get a lot of mail from people who say why don't you say it like it really is? the tea party said we're going to oppose this president and that's why we're here. do you agree? >> yes. at the same time, i think both parties are xlos complicity in not getting much done. president obama advocated on this. he hasn't really taken a very forceful role especially on entitlement reform. i would like to see him get a little more involved and he should because his re-election would hinge on that. >> an election year, a fiscal cliff. i thought the debt ceiling debate was bad last year. i didn't know it could get worse. it has. dan and greg, stay right where you are. inside the head of politicians, we're going to be joined by a political psychologist. he's going to tell you why you let your elected officials lie you to. that's right. this is only an hour long show, folks. is the smooth, creamy taste of werther's original caramel to remind you that you're someone very special.

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in florida, they're already

talking about how the ryan-romney plan will end medicare and replace it with a voucher. >> under obama's plan, we wouldn't have to work an wouldn't have to train for a job. they just send you your welfare check. >> those ads may sound scary an convincing but there's one small problem -- those ads aren't true. politifact rated the medicare ad mostly false and gave the welfare reform ad the lowest possible rating -- pants on fire! team romney and team obama criticize each other for running misleading ads all while running false ads of their own. it's so bad that a team of former m.i.t. students that created an iphone app that can help you listen to an ad and verify its claims. then there are the candidates themselves. politifact has rated 155 of mitt romney's statements and found just 29% of them were true or mostly true. president obama scores a little better -- 47%. less than half for both of them. political psychologist jonathan

hight is a professor at new york university stern school of business. he joins me now. you say we hold politicians to an unfair standard. when did truth become a luxury? >> well, first let's step back and let's look at our basic moral psychology for how we deal with each other. forget politicians. somebody -- i forget who it was -- said why do you complain about the spec in your neighbor's eye, when you cannot see the plank in your own. from the bible. we're all hypocrite. we have all of this social cognitive software running in our heads to catch other people at deceptions and to cover up our own. we're all hypocrites ourselves. then we apply the psychology to politicians who are put in an impossible situation and can't possibly tell the truth all the time. >> why can't they tell the truth? >> there is this thing called democra democracy. in democracy people weigh in on all these topics. they always want more services and less taxes. >> they are playing a game to get elected and to further what they want to do for the country and they have to lie to do that.

>> they are playing a very complex game. is election, them versus their opponent. there is the game of trying to please donors. there is the game of watching what they say which will be taken out of contech and shown in an attack ad. we're saying, look, you screwed up there. but we only do it to the guy on the other side. we give our guy a pass. >> if half of the things a friend told me were misleading, that person wouldn't be very trustworthy as a friend but that person can be a president. from that's correct. >> that's crazy! you're saying that's the way it is. >> i have a low set of expectations for our species. to me, look. we evolve to be this little tribal species living in little groups in a jungle. it is miraculous that we can come together and live peacefully. democracy comes out of this.

democracy has us all shouting at each other and basically they have to lie to get elected. there was a president once who said i will never lie to you. he was not very effective. >> i want to bring in greg and dan. they both follow this very, very closely. greg, you say we're all very easily seduced. do we deserve the politicians we elect? >> no, i don't think so at all. i disagree with much of what the professor said. think that these politicians are doing a great harm, a great disservice to our country because they deliberately dumb things down. they try to seduce people with easy answers, we can eliminate the deficit if we get rid of waste, then people get disappointed when these things don't occur. >> we know that they lie, they lie to get elected. do we let them off the hook because we no there is the campaign candidate, then the

presidential candidate or elected kaunt? >> i take the opposite side of what greg is saying. i think it's our citizens, as citizens, we frequently lie to ourselves. the information is all out there. you did the polls. people think 10% of the budget is foreign aid. of course, it's like less than 1%. people saying, you know, get your government hand off my medicare. >> do you think the electorate is lazy? >> other people don't pay taxes. the information is all out there. the truth is out there for anybody who wants it to get. i think there are large chunks of the population that when it come to politics are either diluting themselves or lying to themselves. the politicians respond to that. >> i wonder if it is also people believe what they want to believe or what they want to hear, what fits their own wishes and moral views. >> this is what my own research is on. this is an enormous trend in social psychology. it is motivated cognition and the confirmation bias. we use our reasoning not to figure out what the truth is but to find evidence to support what we want to believe. so whatever you want to believe

about medicare or taxes or anything, you don't say well what's the evidence on both sides in you just say can i find some justification. and now that we have cable news channels devoted to every slice of the political electorate, it's very easy. >> that's why the ads work. and that's why stump speeches that focus on one thing and not another, that's why their work. what do you call it? >> motivated cognition and confirmation bias. >> in a sense, yes, we do get the politicians we deserve. but that is our human nature is we can't just deal with this rationally and equally. >> it's a fascinating conversation. greg, dan, professor, nice to see all of you. let's talk about it again. we have 70-some odd days to be lied to until we start it up again. up next, who is john galt? why the answer to that 55-year-old question could shed some light on another question -- who is paul ryan? you've been busy for a dead man. after you jumped ship in bangkok, i thought i'd lost you.

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remember this -- >> if you got a business, you didn't build that. somebody else made that happen. >> if you were to do 180 degrees from what the president just said, you'd get ayn rand. 30 years after her death and more than 50 years after the release of her controversial novel, "she's stirring up dialogue and debate on the right and the left. why? because a young paul ryan now house budget chair and candidate for vice president has said he was influenced by atlas shrugged since 2009, sales of this book written in 1957 have skyrocketed. her views on the economy very simply, laissez faire capitalism, less government, much less government, much more private entrepreneurship.

her work influenced the likes of alan greenspan. he was a personal friend of rand and clarence thomas. shows the movie version of rand's novel "the fountain head" each year to the new law clerks who work for him. playboy founder hugh hefner as well. not all of these men buy into rand's philosophy lock, stock and barrel. her social views get in the way, particularly for republicans like ryan. but beyond her whole exist only for yourself mantra, many have a hard time getting past rand being an atheist. steven moore is a fan of her work. i can't believe how much we keep talking about this woman and her work and the fact that her book sales are still so strong after "atlas strugged" was written in 1957. paul ryan, another reason we're hearing so much about this. he told the atlas society that she inspired his interest in public service. then a few days ago he told fox news this -- >> i really enjoy her novels. it triggered my interest in

economics. that's where i got into studying economics and wanted to study the whole field of economics. i later in life learned about what her philosophy is. something i completely disagree with. it is an atheist philosophy. >> can they get around this? >> i sure think they can. by the way, thank you for doing this segment on my favorite book in the world. you know, i hope, christine, that you have read "atlas shrug." we call people that haven't read "atlas shrugged" virgins. >> oh, my. >> go out there and read it if you haven't, folks. you know, it's amazing. that book was written 60 years -- almost 60 years ago. it is still so influential. in fact, a survey came out of young college students and found it is the most three or four influential books. even to this day, its sales have actually gone through the roof, as you just said, ever since barack obama came into office. you know, it is really about how do you grow an economy and the

story is really about very contemporary to our situation today. kind of an economy that is in slow collapse. the government keeps trying to do more and more to solve the problems with stimulus plans and cash for clunkers. all of these things. similar to what's happening right now. >> you're not going to find food stamps in a rand novel. we understand she celebrates the wealthy, successful people. and that wealthy is because of the success and ambition and hard work. they worked hard for money and they deserve it in her view. but why is this that you hate poor people? why don't you celebrate poor people? is there a problem with a lack of morale? is the morality off for the randians? >> the people that wrote the book are the ones that create innovation and businesses and create jobs are the people at the top, the people who took risks. the people who put sweat equity in the business that's employ people. and the point of the book is,

look, once you start abusing those people and treating them as if they're cash atm machines, you know, what happens in the book is you know is that the wealth producers, job creators, they drop out of society and the whole society collapses. i think what ayn rand would say if you're asking her this question is, look, we want a system that generates more people creating wealth and businesses. and if we don't celebrate the capitalist system, the whole economy might collapse. >> does the left have an ayn rand? >> good question. maybe paul krugman. "new york times." he would be the contemporary version. >> why is the left so suspicious of people who embrace her? you look at paul ryan now. he is careful about talking and separating her economics from her philosophy. >> because some people think her view of the world is utopian. that, in fact, she doesn't see the nuances of the economy and the good things that the government does. and she believed in almost no government. i'm not in that camp.

i want to limit the government. i do think the government does some important things. her book is a very important insight about how wealth gets created. and one of the things i'm glad you played that little clip from the president saying, you know, you didn't create that. that's a direct attack at the ideas that ayn rand had. yeah, the people who create the businesses that people put their sweat equity in and their lifk, they're the ones who created the businesses, not government. >> look, as with all -- it's a knox, right? a novel that wraps up her philosophy. sometimes can you explain economics better in a novel. you can like them -- >> by the way, that is something that made her so famous was that she had a way of talking about these issues you and i talk about it every week but in a way that kind of made it really entertaining and in a gripping novel. >> but where is the morality or the -- i mean there is no room for morality or god in these novels. >> that's true. and that's one thing that a lot of conservatives like paul ryan didn't like about rand. she wrote a book called "the

virtue of selfishness." some conservatives cringe at that idea. conservatives believe you should be charitable and help your fellow man. the issue is whether the government should compel you to do it or whether government charity works better than private charity. give your money to the salvation army, no the to the food stamp program. >> i'm so happy to learn that you read "atlas shrugged." remember the frenzy around facebook's ipo? the stock's lost around half of its value since their debut. coming up, we're going to ask the question that is on everyone's mind. ♪

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to find you a great deal, even if it's not with us. [ ding ] oh, that's helpful! well, our company does that, too. actually, we invented that. it's like a sauna in here. helping you save, even if it's not with us -- now, that's progressive! call or click today. no mas pantalones! legalzoom has an easy and affordable option. you get quality services on your terms, with total customer support, backed by a 100% satisfaction guarantee. so go to legalzoom.com today and see for yourself. backed by a 100% satisfaction guarantee. imimagaginine e ifif y yod alalwawaysys s seeee l e [m[mususicic]] inin t thehe b besest t lil. eveverery y titimeme o of f. ououtdtdoooorsrs, , oro. trtranansisititiononss® ls auautotomamatiticacalllly y fift ththe e ririghght t amamouountn.

soso y youou s seeee e eveg ththe e waway y itit is memeanant t toto b be e ses. mamaybybe e evevenen a lilittttlele b betette. exexpeperirienencece l lifife e, asask k fofor r trtrananss adadapaptitiveve l lene. remember back to may? facebook was riding high. it was about to execute the biggest tech ipo ever. the question you were asking then was should you buy?

how fast would the stock rise? venture capitalist peter field was facebook's first big investor. last week he sold off the majority of his portfolio turning his investment investment of $500,000 into $1 billion. he's not the only facebook he's not the only facebook investor selling shares. dustin, one of facebook's co-founders sold part of his portfolio this week. these guys aren't taking a loss. if you bought in at the i. 0 the and sell now, you will. the stock has lost half its value since it debuted three months ago, half. you're still asking the same question, should you buy? here to answer that, a good friend of the show, you wouldn't buy at 38, 25. you going to buy at 19? >> i'm not buying yet. it's now in the high teens i'm still not ready to buy, christine. >> how come? >> i think it goes lower. i think the stock is overvalued. they have not figured out ho

monetize the mobile world. they're not making any money off that because there's not advertising. until management can figure it out and zuckerberg gets out of his own way and starts making money, i'll stay on the sidelines. >> i want to bring in richard quest now. facebook is adding users but its revenue is not keeping up and investors and people who could be investors worry about the growing number of users who access facebook on their smart phones. cnn money's lori siegel asked facebook director how they plan to make money. >> there's adding value by letting me connect more deeply with my cousin or keeping in touch with my mom or wife throughout the day. there's also value in keeping businesses connected to their customers. so this is really an extension of the things we've been doing all along. >> richard, is that enough for

investors? >> no, no, no! he's merely stated the obvious. thank you, sir for pointing out that there are many ways of keeping in contact with great aunty bessie in north dakota. like we didn't know that already. he has failed to answer the question how is he going to do it and monetize it. nobody thinks with 900 million users facebook is about to disappear overnight. it is going to be part of the fabric of social networking and communication for the foreseeable future. that's a given. but there's a huge difference between being something that you keep in contact with and investors making money. where we're looking at ebita, earnings per share, you're looking at return on investment and the sort of nitty-gritty the

people want to know. >> when richard quest says ebita, it makes me blush. >> the jury is out. the jury is out. the jury is not out on whether great aunt bessie in north dakota is using it or whether little tommy in florida is using it. that's a given. but the jury is out on whether this thing will make money in sufficient quantities and at the back of everybody's mind, myspace. here today, gone tomorrow. and always remember what one professor told me, when your mother's on the same social network as you are, it's time to head for the door. >> let's talk about zinga, pandora, groupon, linked in is up since it went public last year. you say linked in is the only social media company you would

consider buying. >> they have a viable business plan. linked in is used by professionals that actually pay money to get on to the website to connect. we're in a situation right now where unemployment is extremely high. people used linked in to find jobs and in the work with people they've worked with in the past. i have friends who own recruiting companies who use linked in and pay quite a bit of money to find new candidates. i look at linked in, i looked at what their earnings estimates are the next couple of years. you're seeing earnings go from over a dallas a share to over $5 a share. >> have you bought it. >> i do not own it now but i'm watching it closely. >> you look at social media stocks and they haven't really lived up to the hype. >> i sold stocks last week that i bought at the top of the dotcom boom. i had always kept them in my

portfolio as a measure of hubris. i turned a large portfolio in value into a small portfolio in value and so i am very cautious when i hear -- when i hear phrases like new paradigms, path to profitability, when i hear people talking about social metrics changing. i don't -- i'm much more cautious than i ever was before. linked in's found a niche, a purpose. facebook's found a niche, a purpose. unfortunately, great aunt bessie in north dakota isn't prepared to put her hand in her purse to pay for it. >> aunt bessie is getting a lot of air time today. thank you so much. let's sit down and i'll tell you about my lucent technology woes. >> that's what i sold. >> you did? >> i still have it to remind me every time i login don't listen to people. if lucent was great at 20 it

would be great at 10. it was heartbreaking at 2. >> i wasn't going to mention it. i tell you, i've got the trade note, what shows a reduction in value of 99.9%. >> richard, based on your past performance maybe i should be buying facebook considering you don't like facebook here. >> thank you so much, richard for the big laugh over lucent technologies. thanks, guys. you don't have to tell me who you're going to vote for in november but do i want to know what issues are helping you decide. i'll tell you how you and ali velshi will join that debate, next. ♪

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the presidential election is now ten weeks away, swing states like florida, nevada, iowa, ohio, they will likely decide this election and middle-class voters which most of you say you are, you'll be casting ballots with the economy in mind. unemployment is still above 8%. economic growth is mediocre but there are signs of hope like housing and the stock market. it's your choice in november, stick with president obama or turn to governor romney to take us in a new direction. whatever the outcome, congress, congress will be under immense pressure to work with the president to actually get things