hi, everybody. welcome to "the wall street journal report." i'm maria bartiromo. reporting today from london. i'll talk to two men at the center of europe's debt storm. my conversations with britain finance minister and spain's prime minister. will yet another country need a bailout? and what does it mean to america? is there hope on the horizon for america's unemployed? we'll talk jobs, the recovery and the market run with a former white house economic adviser. and a provocative author with a price on her head. she grew up as a muslim and now denounces that religion in no uncertain terms. my interview with ayaan hirsi-ali. "the wall street journal report" begins right now. >> this is america's number one

financial news program, "the wall street journal report." now maria bartiromo. >> here is a look at what is making news as we head into a new week on wall street. disappointing news about america's labor market. the november jobs report was released on friday. and the economy created just 39,000 jobs, well below analysts' expectations. the unemployment rate rose to 9.8%, up 0.2%, the highest number since april. the market started december with a bang on wednesday. the bulls firmly in control with a 250-point surge on the dow after a slow start to the week. the dow continued higher on thursday for the best two-day surge since july. the markets climbed again on friday. a successful start to the holiday shopping season. sales on cyber monday surpassed $1 billion, the heaviest online shopping day in history, an increase of 16% year-over-year. it follows a strong black friday, the kickoff to the

shopping season. another encouraging sign for the economy, auto sales starting to speed up. gm and ford up more than 20% in november, compared to a year earlier. toyota and chrysler was up as well. google is close to acquiring groupon for $6 million. groupon sends its members daily discounts for more than 200 goods and service. the job numbers perhaps the most closely watched piece of data these days. joining me now is glenn hubbard, chair of the economic counsel of advisers under george w. bush. he co-authored "seeds of destruction: why the path of economic ruins runs through washington and how to reclaim american prosperity." good to have you on the program. welcome back. >> thanks. good morning. >> what do you think the jobs numbers tell us? it seems to be that we're look at a disappointing number. certainly on friday we saw that only 39,000 new jobs were created.

why is that, and what do you think it tells us about the employment situation today? >> well, i think the november employment report was indeed a surprise. most economists had expected much better payroll numbers. i think it tells us while it's likely there is still a recovery underway, it's still weak, and there are many forces hanging over businesses for hiring, forces about uncertainty, about problems in policy. those are still with us. >> and of course i'm here in london this week where we see a debt crisis throughout europe and an austerity budget and measures put in place. the country still has major debt issues. how do you think the european debt story is playing out? how might that impact to things in the u.s. right now? >> well, i think it plays out in two ways, maria. one is a direct effect. the european crisis worries financial market participants and makes spreads on risky borrowing go up. but there is also a longer term indirect effect that makes people wonder about the

long-term fiscal situation in the united states, and how we will the deal with that there are good ways to do it and bad ways to do it. >> let me get your take on jobs, of course. here in london we had a major youth employment agenda hosted by cnbc, talking about young people. 25 years and below are watching the worst times for jobs. they're actually looking at in america 20% unemployment. spain 40% of young people without a job. what is it going the take to get job creation in that group and broadly speaking, what do you think it's going to take to get jobs once again back on board? >> there are things we can do about it in a policy sense. the first order thing would be to limit the policy uncertainty that is weighing over business people. and the second is if the congress wants to do something in the near term, things to stimulate investment or to promote payrolls would be the right answer.

but we're not doing that. >> yeah. well, president obama's deficit commission of course delivering its report this week, touching many third rails of american politics -- raising the retirement age, raising some taxes, cutting defense spending do. you think some of this will actually happen? do you think it has entered the national conversation? something's got to give, right? >> well, i do think that the deficit commission report is really important in the national conversation. i don't agree with all of it. but as a marker, as a place to start, it's a great place to start. i'm eager to see what president obama has to say about it, because his leadership will be important. i do think something will happen. i do think most voters realize the fiscal situation is unsustainable, and it affects our lives now. we've got to start working on it now. so i think there will be a lot of pressure between now and 2012 for our leaders to do something. >> yeah, and of course also a big topic of conversation is the battle over extending the bush tax cuts. you are in favor of doing it for

everybody. how do you think this ends in light of the deficit discussion? how do we pay for that? and when do you think we're going get an answer from congress? we're running out of time in terms of 2010, that's for sure. >> we are rung out of time. i think the right answer is probably what will happen, which is a temporary, let's say two-year extension of the entire tax code until we're ready to have a conversation about the size of government and the kind of tax system we want. i do think we need a big discussion of tax reform. i don't think the current tax code is the best tax code. but letting the tax cuts expire in a weak recovery is a very, very bad indeed. >> we'll leave there it. glenn, good to have you on the program. we'll see you soon. >> my pleasure. coming up, the impact on the rest of us. i spoke to the united kingdom's finance minister, the chancellor about the irish bailout about economies around the world. my prime minister as well with the prime minister of spain.

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start with cookie dough. ♪ add frosting. [ giggles ] [ female announcer ] then sprinkles. [ both giggle ] [ female announcer ] fun. easy. [ child ] wow. [ female announcer ] at pillsbury.com. welcome back from london. the world's focus has now switched to spain. will that country be the next to need a rescue by the european union or the international monetary fund? this week i caught up with the prime minister of spain about his country's economy, banking system, and the road to recovery. you are looking at new measures to make the economy more competitive. you have announced privatizations. can you categorically say that the banking system in spain is healthy and well-capitalized? >> translator: definitely. world capital has done its homework. it's still doing its homework.

on top of that, it will be one of the most attractive financial systems for investment. it will be one of the most efficient and the most profitable systems. >> you mentioned private capital. where do you stand on protecting the sea of bondholders? you have investors watching. can you guarantee that no private investor holding spanish government debt will have to take a dreaded haircut? >> translator: absolutely. it's been a tradition of spain's public that treasury bonds -- treasury i think is one of the top-rated in the treasuries in the world today. and we're going to keep that above and beyond everything else. there is a strength there. >> when would you expect growth once again? >> there are some reports from j.p. morgan too.

those reports are saying with the implementation of the reforms that are underway now in spain, 2011-2012 will be years when spain will become one of the most attractive countries for investment in the securities market and spain could be one of the countries with the highest growth rate in 2012 or 2013. >> my thanks to prime minister sabatero. the irish bailout included a loan from ireland's closest neighbor, the uk. i caught up with the united kingdom's top finance minister, chancellor of the exchequer george osborne about his government's approach to shoring up the uk economy. >> i inherited as chancellor the largest budget deficit in the g-20. and we've taken a series of steps, increased some taxes, some consumption taxes and some cuts in public expenditure which have put us on a path to

eliminate the structural deficit in a period of four years. but we also addressed the other question which people were asking which is okay, you can do that, but can you also grow? and the economic forecast for the uk showed that the uk has got a path of sustainable growth over the next four years of 2% a year. >> let me move on to the uk's support of ireland. what are the implications of the debt crisis on the uk? >> it's clearly in the uk's interest that we have a stable irish economy. now i think the package put together on sunday will do that. the package involves the imf and other european countries and a bilateral loan from the uk. that will help take the sovereign out of the debt markets for a couple of years and also help fund a restructuring of the irish banking system which are absolutely key to getting some stability into the irish economy. and i thought it was important for the uk, although we didn't have to, to make a contribution to that package beyond just being an imf shareholder, beyond

being a member of the eu. so we're offering a 300 quarter billion pound bilateral loan to the irish. and i expect it to be taken off as part of that international package. >> let me ask you about the euro membership because your party of course opposed the eu membership on the grounds signing up to a single currency would be a major loss of control to brussels. do you agree that this is actually an indication that we'll see europe's federalists push through a political union of some sort where as the stronger countries will have more influence on the weaker countries in terms of how they're governed, and the stronger countries will see higher taxes to transfer that money? >> well, the reason why the united kingdom didn't join the euro, and there were plenty of people in the uk who wanted us to, the reason we didn't is those arguing against, which i was one, said you lose control over your monetary policy.

and you also lose your exchange rate flexibility, obviously. and i feel that obviously vindicated by recent events. and i'm very pleased the uk is not part of the euro. but i told you so is not much of an economic policy when confronted with the challenges that we face today. >> should people be worried about this rise of the east, and in some cases sort of a, i don't know, a stagnation or slow growth of the west in the world? >> it's an incredibly infectious dynamism they've got in those markets. if you look at china, what is happening? millions of people who are living in grinding poverty are being lifted out of that poverty. they have for the first time in their family's entire history some money to spend, and they're earning something and they're able to save something. now in time, they are going to want pensions and life insurance, which british companies can sell them.

they're going to want pharmaceutical products, which were never available to their parents or grandparents. they're going to buy those pharmaceutical products from british and other pharmaceutical companies. they're going to want to take that first ever plane flight in their family's history or the domestic trip maybe even overseas. they'll be flown on airbus wings and rolls-royce engine. >> provided the chinese allow the foreigners to sell to those people. >> i think step by step, their markets are opening up. the chinese consumer is becoming ever more confident. and it's not just china, of course, or indeed india, it is indonesia and turkey and also other economies. it's got to be a good thing for our world that more and more people have more and more prosperity. >> my thanks to george osborne. up next on "the wall street journal report," the woman whose ideas inspired death threats. best-selling author and self-described infidel, ayaan

hirsi-ali on the culture clash that threatens a global economy. and lightning fast. lightning strong.

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against her religion. ayaan hirsi-ali joins me, author of "nomad, from islam to america." ayaan, good to have you on the program. thank you very much for joining us today. >> thank you very much, maria. thank you for having me. >> as a nomad, you lived the immigrant experience in several countries. what did that teach you about the world's cultures? >> in short, it taught me that there are some cultures that emphasize individual freedom, individual responsibility, a great work ethic and respect for the rule of law. and i would consider those mainly to be western cultures. and it also taught me that there are cultures that emphasize customs and practices that are very old, the tribe, religious rites. for instance, the culture i grew up in which is islamic tribal culture where work ethic wasn't really a big deal, and if anything we only invested in what i would call the here after. >> do you think that america

misunderstands the muslim community? >> i think that in general in america there is focus on violent jihadis. and we ignore nonviolent extremists who want to increase their power base in the u.s. and i'm talking about specifically the muslim brotherhood movement and its sister organizations that are established in the u.s. and what these organizations seeks to do through preaching is to coopt all the various muslim populations that are now in the u.s., but divide themselves along ethnic lines. they want to bring them under the muslim brotherhood umbrella. and i think we ignore that process, because we think it's nonviolent. and we accept the muslim brotherhood's leadership voice who claim that they speak for all muslims when they in fact do not. >> so what do people need to understand? >> i think we need to understand

that islamism is an ideology, that it's a political ideology, and that it is a competing ideology with the western value system. and it's hostile to the western value system. that doesn't mean that we have to look at every muslim and see in every muslim an enemy, but we have to acknowledge the fact that the islamist agenda is to get as much influence as possible. we need to acknowledge that there is a clash of ideas, and that that clash is not something we can just wish away by claiming that islam only a religion and a religion of peace and tolerance. >> in your book, you describe your confusion in understanding your first bank loan as an asylum seeker in holland. we talk so much about the millions of citizens in emerging markets who once lived in poverty and are now joining the middle class. as someone who grew up in the developing world, what is your

take on this rapidly growing phenomenon, and the impact on cultures' economic power? >> i think that cultures really matter. i've just come back from china, and the culture where the work ethic is really something very high, and even though women are subjugated in a different way, you look at other emerging markets, and you see that those economies that are growing rapidly, those economies are a combination of factors. and i think number one is the fact that women take part, an active part in the economy. you look at arab muslim countries. some of them are growing, but we don't see women in the economy. you see one or two, you know, a small group of them, but you don't see them active in the economy as you see it in asia, in brazil, in india, in parts of

eastern europe. and i think that's a pity. it is capital destruction when you chase half of the population out of public life and out of economic life. and it's suicidal. >> well, i mean, in saudi arabia, for example, women are not allowed to drive as one example. >> they're not allowed to drive. and there are a number of saudi women who are uniting to resist that as much as they can who are driving secretly. i know the story of a woman pilot. i also know the story of many entrepreneurs. but it's going to take them some time before they can break through that. and i think for them to get to that point, they don't only have to condemn the symptoms, you know, the outcomes of not driving and being locked up and all of that, but they have to get to the root of the problem, and this is the religious edict,

the sharia law and what it says about women and how that is implemented. and then i think the progress and their emancipation can go much faster. but you need, yeah, you need a lot of brave women and brave men to get there. >> for sure. it takes courage. thank you so much for joining us, ayaan. we appreciate your time. thank you. >> thank you, maria. thank you for having me. >> we'll see you soon. ayaan hirsi-ali joining us. up next on "the wall street journal report," a look at the news this upcoming week that will have an impact on your money. and you can never be too rich or too thin, right? or too covered in bling. the brilliant baubles of a famous british bride. stay with us. the shipping industry in norway, and the rubber industry, in south america? at t. rowe price, we understand the connections of a complex global economy. it's just one reason over 75% of our mutual funds beat their 10-year lipper average. t. rowe price. invest with confidence. request a prospectus or summary prospectus with investment objectives, risks, fees, expenses, and other information to read and consider carefully

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for more on our show and our guests, check out the website, wsjr.cnbc.com. you'll also find a link to my blog, investoragenda@cnbc.com. i hope you will check it out. now a look at the stories coming up in the week ahead that may move the markets and impact your money this week. a look at consumer behavior. retailers, costco and dollar general report quarterly earnings. on tuesday the federal reserve reports the total dollar value of consumer credit outstanding. on friday the international trade balance will tell us if the u.s. is import organize exporting more goods. and the university of michigan's latest reading on consumer sentiment also due out on friday. well, here in london everybody may be talking about prince william's upcoming wedding, but another royal couple is still making headlines. 74 years ago, king edward viii

abdicated the throne to marry wallis simpson. this week jewelry and mementos from the couple's love affair were auctioned. the cartier bracelet shaped like a panther sold for who than $7 million, a world record auction price there are reports in the british press that the anonymous buyer was madonna, the material girl no stranger to bling herself. that will do it for us today. thank you so much for joining me. my guest next week former white house budget director peter orszag. keep it right here each week