hi, everybody. wj to "the wall street journal report." i'm maria bartiromo. turmoil in the middle east. rising oil and gas prices. is it enough to kill the bull market? a standoff in the midwest. labor versus the government in wisconsin. over the right of collective bargaining. is this the canary in the coal mine and what it could mean for organized labor across the country. and making beautiful music with the renowned conductor. culture, commerce and the sounds of music. my discussion with valery gergiev. "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's a look at what's

making news as we head into a new week on wall street. it's oil, oil and more oil with a little bit of prices at the pump thrown in. the rising wave of dissension in the middle east sent oil prices above $100 a barrel this week. an increase benefit $20 from a few weeks ago. that in turn sent gasoline prices shooting up as well and spurred concerns about whether an economic recovery is sustainable with such high oil prices. those fears sent the market down sharply midweek. all three major indices having the worst two-day decline since august of last year. the dow touching below 12,000 for the first time since early february but recovering later in the week. we're at the end of earnings season. home depot beat quarterly estimates and raised guidance. walmart fell short on the revenue side. hewlett-packard came in ahead of expectations and offered weaker guidance. gm beat expectations and showed the best yearly profit in more than a decade. housing news continuing mostly grim, though. sales of previously owned homes rose unexpectedly in january but

prices fell to the lowest level in nine years. sales of new homes fell significantly as well to an annual rate of 325,000. about half of the number that economists describe as healthy. consumer giant proctor and gamble will raise prices soon to reflect higher commodities costs. the maker of products from tide to pampers will announce specific details of price hikes over the next month or so. global food prices hit their highest level on record in january according to the united nations. since then, a wave of mass protests against high prices and entrenched leadership have swept across the volatile middle east. my guest today, jeffrey sachs, professor of economics and director othe earth institute at columbia university is joining us to talk more about it. professor sachs, great to have you on the approach. we've seen a series of uprising, obviously, across the middle east, in africa. what are the common denominations do you think among these volatile countries in terms of leadership in terms o resources, people. i guess one of the common themes

is unemployment. >> i think the starting point is that there are a lot of authoritarian and rather decrepit leaders that are being pushed aside finally after decades. so the starting point is you take someone like a gadhafi and he's been in power for more than 40 years. and mubarak in power for more than 30 years and ben ali more than 20 years. so that's the starting point. but, of course, there's lots of unhappiness and unrest from below. and you do have unemployment. you have a drop of remittances since the global financial crisis hit and now you have rising food prices. so it all adds into a very volatile brew. and, of course, one shock then triggers the next because it gives ideas and this is a kind of contagious spread of the unrest because of that. >> professor, talk to us about the steep increase in food prices and, of course, the supply, the stock levels globally. according to recent numbers from

the world bank, the number of chronically hungry people in the world currently totals a billion. is there enough supply? >> right now, the world is pushing up against supplies on just about every primary commodity. it's food, but it's also oil. it's even coal. >> water. >> it's water. so we have global economic growth that china and india have made into this stupendous global dynamism but the earth is finite and we're really pushing against these limits, and we're feeling it. 2008 we hit the highs. then lehman collapsed, financial crisis. the prices came back down. now that there's a global recovery, we're going right back to where we were in 2008. and so basically, what we've had is a phenomenon that we already reached three years ago, but then postponed because of the global economic crisis. now we're back to it. and we need solutions on primary commodities. we need solutions on the global

food supply. we need to handle water better. we need alternative energy and all of this requires leadership, technology, cooperation. we have none of that anywhere. >> amazing. so do you think this is a warning sign of sort of a deeper systemic problem that the world is facing? like we saw in 2007 and 2008 in housing? like we saw in 2000 with, you know, sort of this build-out for dotcom and the internet. what should be done to address this problem? >> this is absolutely a warning sign. i call it living on a crowded planet. 7 billion people. the average through put for person in output is 10,000 per person. that means we have a $70 trillion world economy. we have never seen anything like this. and it's growing. we are not feeling it in the u.s. so much but the world average growth is about 4.5% per year. that means that this world economy would tend to double in less than 20 years because we go from 70 to $140 trillion to $280

trillion by midcentury. the world can't support that on our current technologies. but we aren't ready to make changes, it seems. we're stuck with our oil addiction here. we're not moving from that. we need new approaches on global food supply but our government is not ready to help finance that. we need new technologies. this is a big deal for the whole planet and we're nowhere near that. we even ignore that in our u.s. politics. >> apparently. oil hitting a 2 1/2-year high in light of the situation this week. because of what's happening in libya. the country responsible for less than 2% of the global daily consumption and saudi arabia has told european refiners that it's prepared to pick up the slack. >> i wouldn't be so sure. >> really? >> that anyone can pick up the slack because while there may be a dip in libya, the growth of demand from china, from india and elsewhere will outstrip what saudi arabia can do.

have no doubt about it. the world's largest automobile market now is no longer the united states and probably never will be again. it's china. and they are going to be adding tens of millions of automobiles in the next few years. and where's the oil going to come from for that? and we know that many of the traditional oil fields are in decline. there have not been the discoveries to keep up with the depletion of the old stocks up until now. there's no real geological prospect for that. we're in a squeeze. we have to move to alternatives. but look in this country. complete paralysis on what to do. >> no oil policy. >> we have no energy policy. >> no energy policy. >> absolutely. >> so what's the impact of this global situation on the u.s. economy? how would you characterize things right now in the u.s.? how do you think this plays out? how would you characterize things today? >> i think the u.s. is in a pretty broad mess. we've got big budget deficits at the federal and the state, local level. we have economic growth that is

absolutely too slow to make a big change of the unemployment rate. now we have the government revising downward the most recent gnp numbers to under 3% annual growth rates. we're not in a healthy situation. and we have major structural problems in our economy. first sky-high oil prices again. and now we can't even find the skilled workers in our society. what's the response? cut education. cut schooling. we're not making sense in this country, frankly. and this is -- this is a big problem. we're not going to get out of these structural difficulties by this kind of paralysis of fight in washington. and unfortunately one party just wants to cut taxes, cut taxes, cut taxes and the end result will be no energy policy, no education policy, no ability to compete. but we still will feel the pain of these global shocks. >> professor, great to have you on the program. we so appreciate your insights.

professor jeffrey sachs joining us. up next on "the wall street journal report," protests in wisconsin. a face-off between state workers, the governor and the future of unions in america. we'll tell you what it all means and what could happen next. later, listening in on the classical music industry. a world renowned conductor joins me to discuss the arts, audiences and competition. as we take a break, take a look at how the stock market ended the week. mary! hey!

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the governor in wisconsin says it was about the budget fight. our members said we'll accept your budget cuts. this is not about the -- about anything but about busting unions. >> that was richard tremka from my conversation with this. he's afl-cio president. his take on what's going on in wisconsin. governor scott walker and workers from state unions staring each other down in a confrontation over the right to

collective bargaining. a showdown with national implications. so how could it end? what does it mean for all of us? joining us is steven greenhouse, "new york times" labor and workplace correspondent. steve, good to have you on the program. thanks for joining us. >> nice to be here. >> you said this could be a watershed moment for public unions in the united states. why? and what is exactly at stake? >> so we're in wisconsin. i'm talking from wisconsin which traditionally say heavily pro-union state. now the new republican governor scott walker is proposing to take away collective bargaining rights for, you know, like 200,000 government employees here. and if he gets his way, if the democrats and the unions aren't able to block it, it will greatly weaken unions here in wisconsin. i believe it will give momentum to similar efforts in ohio and indianapolis and we're hearing some othe same things going on now in tennessee and oklahoma. and public sector unions represent more than half of the nation's union members now and to really weaken them it could deal a blow to weakening the

whole union movement. >> so a reents "usa today" gallup poll shows about two-thirds of america are opposed to eliminating collective bargaining rights. is this battle about money or politics? >> i think it's about both. you know, i think governor walker and governor kasich in ohio, governor daniels in indiana, they feel that by weakening or eliminating collective bargaining reports for public employers, for teachers, for sanitation workers, it will give them the flexibility to, you know, do what they want. they want to -- they figure they won't have to pay as much for cities and states won't have to pay as much for health coverage or be as generous on vacation days. might be able to privatize operations and save money that way. but the united nations, i think, also have a point that these are all -- republican governors, republican lawmakers doing this. these folks saw how unions saw how $7 million in the elections to try to help democrats and when they speak to labor leaders, they say this is

political payback. they say governor walker and others are trying to cripple unions and make them much weaker, not just at the bargaining table but also in the nation's elections. >> how do you think this plays out? what do you think the end game is here? >> it's really unclear, maria. governor walker has really dug in, and these 14 senate democrats who have kind of fled the state and camped out in illinois to prevent the state senate from having a quarum to approve the bill, they are both -- both sides are dug in. and the democrats and tens of thousands of demonstrators here in madison are really seeking to pressure the governor to compromise. they say why the unions have agreed to the economic concessions that the governor wants. the unions have agreed to pay -- contribute 5.8% towards their pensions. 5.8 toward pensions and double what they pay towards health coverage and they say the governor should compromise on collective bargaining. the governor says we have the majority.

i was elected in november with a mandate. state senate republicans have the majority. they say this is a democracy and we should be able to do what the majority wants. so there's a real standoff and it's very, very unclear how it's going to play out. >> who gets paid more, private or public workers? are the unions getting paid more on average than private workers? >> maria, that's become a religious ideological debate. you know, many conservative think tanks do studies saying that public sector workers earn more especially when you add in their pension benefits. other economists, especially some liberal think tanks show studies showing they earn less even when you include health coverage and pensions. my sense is there isn't much of a difference between public sector pay and private sector pay. >> good to have you on the program. thanks so much. >> we'll see you soon. steven greenhouse joining us. up next on "the wall street journal report," a maestro at work. the world's busiest classical

conductor. valery gergiev on the commerce of culture. and look ♪

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music. valery gergiev joins me. maestro, so nice of you to join us. you are called the world's busiest conductor for sure and the world's best, arguably. working with orchestras on several continents, you are in new york right now for one of your full-time jobs conducting the london symphony orchestra at lincoln center. tell us about audiences today for classical music? how do they feel to you? >> i feel very good about audiences. many young people and the reaction very instantaneous, very vivid. i don't see a real -- which one can comment like something terribly serious happening and very negative. i think we have to just be together with young people, give them as much attention as possible. share our time with them and we will succeed, i'm sure. because if we don't support them, they will find other ways of going without us. and then we will be in a way,

seen as kind of presenting the past. so it is important for us to share our time and our thoughts and our energy with young people. and i'm not worried. i have to say many things tell me that we should worry, but overall, i feel it. really gifted people and brilliant artists. they find a way to shine and everyone sees this is something you didn't ignore. >> another thing i find fascinating is this is the real generation of the internet. and technology. consumers are purchasing music digitally. they are looking at performers, having their own youtube channels in some regard. how is your industry changed as a result of the digital revolution and as media evolves culturally. >> 20 years ago, i was a young conductor who was offered --

what it's called -- exclusive contract with philips classics. i was very proud and i thought it's terribly important, big offer, and i will have tremendous opportunity to make recording recordings. and things changed without being critical of the industry. i have to say that institutions like metropolitan opera today are more capable of doing something on their own. and there's a change. of course, huge progress and revolution. not only internet revolution but also as you just mentioned, today sales are quick, very successful. itunes, for example. digital. immediately you can imagine people in new zealand or canada or argentina, in few hours,

already react on what you announced based on where you are in finland. i think we just took, maybe not a lead but we just decide for ourselves. the institution today equipped with far better than 20 years ago to act and i recorded in a couple of years recorded already maybe six operas. >> yes, your mariinsky label. >> which is quite high number. it wasn't painful at all, i have to say. it's very natural process. this is the way it goes and, of course, tried three times to film our about lay performance with the 3d technology and i think maybe not immediate but future is there. >> and let me get more into the young people and the competition because you are the chair of the international tchaikovsky competition this year for young musicians. talk to us about this. this is an event with a famous

history. american van clyburn won the first competition at the height of the cold war back in 1958. what can you tell us about the global economy so competitive. how competitive are the arts for this competition? >> first of all, we are not in a process of selling something all the time. the importance of artistic event, the importance of competition where someone brilliant, young, will be discovere eed by the world's community. but it's not in sales. the importance is in how very, very special is the artistry, musicality, how many millions of people in the next, hopefully 50 years, or at least 30, 40 years, will become even happier, even richer culturally. that's the importance of competition. it's not in the immediate sales. so we don't look at bottom line.

and this is why tchaikovsky competition is now one of my priorities. simply because i believe that there will be several hundred right now totally unknown young artists. we'll be very, very careful and very attentive. maybe we'll find three. we'll find five. maybe at least one of them is van clyburn, the future. >> it's great to see you. a real unique treat for us to have you here in new york while you conduct. we'll see you soon. valery gergiev joining us. up next on "the wall street journal report," the upcoming news this week that will have impact on your economy. and a carry-all for your hardest of assets. i'm getting. marjorie, you've had a policy with us for three years. it's been five years. five years. well, progressive gives megan discounts that you guys didn't. paperless, safe driver, and i get great service.

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that my family can't wait to get their hands on them. enjoy cinnabon cinnamon... now in all pillsbury cinnamon rolls. for more on our show and our guests, check out wsjr.cnbc.com. you'll also find a link to my block. "investor agenda.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. tuesday is the 1st of march. february's total auto sales will be reported on tuesday. wednesday, federal reserve chief ben bernanke speaks to the house financial services committee. and the fed's latest beige book will be out as well. that surveys activity in regional economies across the country. friday the labor department releases the monthly employment report. we'll find out how many jobs the economy lost or gained in the last month. finally today, some retail therapy. debuting this week at the dubai mall. the world's most expensive

purse. kruftd with 4,000 diamonds, this heart-shaped accessory is being offered by the house of muab for $3.8 million. a world record price. the bag took ten artisans more than four months to produce. that's the show for today. thanks so much for joining. next week, russell simmons, music mogul and entrepreneur. each week, keep it here where wall street meets main street. i'll see you again next weekend.