ip cookies... from pillsbury. hi, everybody. welcome to "the wall street journal report." i'm maria bartiromo. france next, worries about the continent's second largest economy. the man who went t.a.r.p. tells us how europe should bail out. let's make a deal. the super committee comes down to the wire. will they meet in the middle and find $1.2 trillion to cut? we're talking about the bird. is it too much to crunch the numbers? the wall street journal report begins right now.

here's a look at what's making news as we head into a new week on wall street. retail figures came in much stronger than expected. that was for the month of october. they rose half a percent. the sixth straight monthly increase ahead of the big holiday shopping season. that's important because consumers make up 70% of the u.s. economy. but the markets were not cheered mostly because of, well, you guessed it, more worries about europe and european debt. the focus now moving to italy and now france and now concerns that american banks could suffer as europe's economy slows down. a mixed bag as we move to the end of earning season. dell surpassed expectations on profits, but it raised revenue. target came in ahead of expectations. oil prices creeping back up again, rising past the $100 a

barrel mark on wednesday for the first time since july. partly because the u.s. economy is not doing as badly as some had predicted. warren buffett acquired shares of ibm, intel, cbs, caremark and directv. joining me now is managing director and head of global equities at pimco. neil also oversaw the bank government program, t.a.r.p. he brings us a unique perspective. thanks for joining us. >> thanks for having me. >> i feel like this is the topic every day on wall street and in the u.s. last week everyone was concerned about italy, its rising bond yields. now we're focused on france which has a triple a rating. is this contagion now spreading? what do you think happens now?

>> it absolutely is spreading from the peripheral starting in greece except for germany. germany is, as we call it, the cleanest dirty shirt in europe, so it absolutely is spreading and the markets are looking for a final, definitive solution. in our view only the european central bank has the power to deal with this crisis now, and it's going to be up to them to take bold action the way we took in the u.s. with the t.a.r.p. and the federal reserve to stabilize the u.s. financial system. we need such a final definitive solution in europe, and we haven't seen it yet. >> that's interesting. do you think that's what they need, they need a t.a.r.p.-like program in europe? >> in a sense. in the u.s. we went to the taxpayers to pay for the t.a.r.p. and used that to stabilize the u.s. financial system. europe is a little bit different because you have 17 countries that all have to reach agreement before they can spend money. so only the european central bank has the ability -- if it has the willingness, it has the ability to act unilaterally to try to stabilize the system.

it's a very tough thing politically, but they have the power to do it. >> that's very critical. really great point there, neil. so what impact does this have on the united states? everybody is trying to figure out, are we going to become a safe haven now because our banks are in better shape, or is the world too interconnected again? >> i think in the short term, the u.s. is relatively stronger than what's happening in europe, so in the short term the u.s. could be a safe haven. but if the eurozone were to fragment, if the european experiment, so to speak, were to fail, that would absolutely affect america and it would absolutely bring our economy down into a recession and likely trigger a global recession. if the eurozone were to fragment and the eu collapse, it would bring the global economy down and there would be no safe place to run. >> where do you see the u.s. economy going? putting that aside for a moment, do you think we hit a double dip recession? there was a smattering of news on the good front lately.

earnings rose and were strong. that's good news. what's your take on the u.s. economy? >> having that catastrophe we just talked about, we think the u.s. economy is going to continue to muddle along. we'll see some positive economic data point, some negative economic data point, but at a very high level, for 30 years, the american economy borrowed money to fuel our consumption. now americans are paying down their dekbt, which is a good thing, but we're more limited than we used to. in the next seven years, we're in for a harder adjustment period and, unfortunately, sustained high unemployment. >> neil, during the recent republican debates, we really saw a strong distaste for any bailouts once again. you heard them on the gop presidential debates, whether it be automakers, europe, and america's financial institutions. you were the administrator of the government's $800 billion

t.a.r.p. program. how do you defend the program looking back with the perspective that you can give? anything you would have done differently? >> we defend the program -- we were a republican administration that believed in free markets and hated intervening to stabilize banks and bailing anybody out. the analogy that i think ben bernanke used, which is a great analogy, imagine you told someone don't smoke in bed. it's very dangerous. but then they go ahead and do it and their house catches on fire. you would like their house to burn down to teach them a lesson, but if burning down their house burns down the entire neighborhood, you have no choice but to go in and put out the fire even though they don't deserve the assistance. so we intervene to stabilize banks not for the sake of banks but for the sake of the american economy. >> so given all the pressures we've seen in the economy and all the uncertainties, how should people be investing these days? what are you doing on that front? >> we're very focused on a few things. we're focused in investing on the long term.

the short term is going to be dominated by these macrofactors in the u.s. and that's overwhelming individual investments, such as individual stocks people are buying. focus on the long term is very important. be sure you can stomach volatility. if you need your cash in the next three or six months to buy a house, you probably shouldn't be invested in equities today. but if you're saving for retirement, inequities can be attractive. for example, exporters exporting the higher growth markets, such as emerging markets. he c equitihe can wiequities and fix tease are attractive. >> thanks for talking to me. >> thank you very much. up next on "the wall street journal report," the clock is

ticking in washington. can members of the congress's super committee get the fiscal house in order? our vice chair tells me why the stakes are so high. and later, cleaning up the biggest eating day of the year. we'll dig into the numbers behind that thanksgiving feast. as we take a break, take a look at the stock market end of week.

welcome back. the november 23rd deadline is approaching for congress' joint select committee to agree to a plan that cuts one and a quarter trillion dollars from the federal deficit over the next decade. this is the latest in a number of attempts to find a sustainable path to a smaller deficit, including the commission on fiscal responsibility and reform known as "the simpson bowls plan" as

well as the bipartisan policy center debt reduction task force. the co-creator of that plan joins me now from the vice-chair of the federal reserve and sounding director of the congressional budget office. alice ridlin is with us. thanks for being on the show. >> thank you, maria. it's great to be here. >> how high are the stakes right now for the supercommittee? >> well, i think the stakes are very high. we have not been able to get on top of this deficit problem. our normal processes of government seem to be totally broken. the supercommittee has a chance, with extraordinary powers, to do what is necessary to reduce the looming deficits, and i would hope -- have hoped for a long time -- that they would go beyond the minimum to put together a plan that would actually get the deficit on a sustainable track, meaning that our debt would not be rising

faster than our economy is growing, which is what is happening now and projected to happen. >> and everybody knows you can't just keep spending and not saving. this is from an individual standpoi standpoint, a corporate standpoint, and of course a country standpoint. let me ask you, alice, if no deal is reached, the doomday scenario for automatic cuts in 2013 is called sequestration. walk us through what that looks like. >> sequestration is a terrible word, but it was just meant to be a sort of damicles hanging over the committee saying, if you don't get a sensible deal, then we have an automatically unsensible deal. this would cut proportionately across the board, account by account, both in domestic spending and in defense. now, that's totally mindless and nobody wants it to happen. so it wasn't supposed to happen.

it was supposed to get them to the table and to the deal. >> so what would you like to see happen? you said a moment ago you would like to see even more than the minimum, the minimum, of course, being $1.2 trillion. what would you like to see happen here? >> 1.2 trillion sounds like a lot of money, but it's over ten years, and it's not actually enough to stabilize the deficit to keep the future debt from growing faster than the economy. so what i would like to see is something that does stabilize the debt, and that's going to take two major reforms. reform of medicare and possibly medicaid on the entitlement side and reform of the tax code so that we can raise more revenues from a better and fairer and simpler tax system. >> that could mean lowering corporate taxes but getting rid of all those loopholes and ways that corporations can get around

paying taxes; is that right? >> it isn't just corporations, it's individuals as well. our whole tax cut in both the corporate and individual income tax is just riddled with special provisions and things that have been favored by congress for one reason or another. >> it's amazing to me, someone mentioned to me the other day that the number of people who are not paying taxes have been rising. so 52% of the country pays no tax? then you've got that top 1% paying 40% of the tax? so it really does seem like we need reform here and we need it quickly. >> well, i wouldn't bleed for the top 1%. they have actually made out extremely well, and the reason they pay so much tax is they earn so much compared to the rest of us. and the reason that about half the population doesn't pay

income tax, they do pay plenty of other taxes like the payroll tax. the reason for that is they don't earn enough. >> let me ask you about entitlements. they've, of course, been a hot button issue of this debate. you just mentioned medicare/medicaid. talk more about the political difficulty in cutting the cost of medicare. the idea that your bipartisan policy center put forth that both pre serves traditional medicare but also caps the growth of medicare to save money. how do you do it? >> well, we would preserve, as you say, traditional medicare. everybody could stay in it if they wanted to, but we would also offer competitive bidding on an exchange, and seniors would have a choice between staying in a traditional plan or going to the exchange and picking a plan that would offer the same benefits, a plan that would have to take you, guaranteed access. we think it's the best of both

worlds. it has the opportunity for competition to drive down the costs and make health care more efficient, but it preserves traditional medicare at the same time. >> congressional approval, alice, the rating is at an almost laughable 9%. i mean, 9% of the country approves its congress. is it too late for them to slog past the politics and come up with a bold solution? >> i hope not, maria. they have such an opportunity. they have extraordinary powers and they are a group of quite sensible republicans and democrats. why wouldn't you fix the problem, which the country badly needs to have fixed? >> absolutely. alice, it's nice to see you. thank you so much for joining us. >> thank you, marie a. >> we'll see you soon. alice ridlin joining us. up next, the bird is the word. the $40 billion turkey industry about to celebrate its biggest day of the year. mbers.take you behind the cayous

and you can find us on what's going on here? hey, whats up guys?

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fedex. solutions that matter. or creates another laptop bag, or hires another employee, it's not just good for business. it's good for the entire community. at bank of america, we know the impact that local businesses have on communities. that's why we extended $13.2 billion to small businesses across the country so far this year. because the more we help them, the more we help make opportunity possible. as the fourth thursday of november neerz, cooks and consumers everywhere are preparing for the biggest eating day of the year. will your thanksgiving feast mean famine for your wallet? ed editor in chief at food

magazine. when food prices go up, does that dictate or impact the way families plan their meals? >> i think it certainly impacts the way they plan their meals, but not their holiday meals. two things at holidays: calories don't count. you spend a little more because it's your family, your friends, it's important to you. >> let's talk turkey. 240 million turkeys raised in 2011. this is a $40 billion industry. >> there are a lot of turkeys on the table. the average american eats about 14.3 pounds of turkey and a lot of that is during the thanksgiving season. and then people who make their turkeys, usually it's like a 16-pound turkey. yeah, there's a lot of turkey out there. >> how long does it take to make a 16-pound turkey? >> about four hours or so. >> so the usda report thg week that locally grown food is a growing industry.

how does that trend for local foods, organic, locally grown, apply to the holidays? >> okay, if you're going to get a turkey and you want a local turkey, you probably are going to buy a heritage bird, something grown down the road, and that's a turkey that's walked around and eaten what it's supposed to eat, so i'm all for these heritage breeds. they're a little more expensive and i would say, again, if you're going to spend a little more money, this is a good time to do it. >> you brought a heritage turkey for us today. >> i did, because i want to influence you to buy heritage birds. >> why is this so good? because they're eating what they're supposed to. >> they are, they're eating the right thing and they're grown very slowly and they're wholesome birds. >> you've got cranberries, potatoes, sweet potatoes as well as other potatoes. cranberry production is up this year. >> yes, cranberries, as it turns out, only 20% of the cranberries grown are eaten during the

holidays, unlike turkey. and the cranberries -- this is my favorite stat -- 3.5 billion individual cranberries are harvested a year to make for quite a lot of sauce. >> are prices for all of this -- are they up this year? >> everything is going to be up a little bit this year, and for varying reasons. for example, if you look at a pumpkin, there was some challenges in the pumpkin harvest. hurricane irene decimated the northeastern crop, so we're definitely seeing price increases there. on the other hand, if you're looking at your potatoes and your green beans, you're in good shape. >> you brought those onions down there from a bag. tell me about that. >> i did. i don't know if you grew up with green bean casserole with the durkees that had the pop in the can with the onions inside? the seneca chrrispy onions are

improvement over that. if you're dedicated to the old fashioned tried and true, i think this is an improvement. >> they look good, actually. what about pies? pumpkin pie and other flavors? >> yes. now, you might think the big trend is cup cakes and you would be right. but the trend right behind that is innovations in pie. thanksgiving is a perfect time to experience that. so we have a pie from first prize pies in brooklyn and it's spiced pumpkin with a little dark rum and molasses. but one of the innovations right next to it is from high five pies in seattle. we've seen people baking pies and serving them in glass jars. so there is a little jar trend, or you can make individual pies for people, or you can make hand pies, all with pumpkin. >> if you get the small ones, actually, it works because you can have lots of variety and not have huge pies. >> right. >> thank you for bringing saucha

feast to the program. we appreciate it. for more information check out our web site, om. feeling good. i think i'm really going to nail it. usband:] getting cold out here. [wife:] in here too. we need more affordable energy in this country. we need to protect the environment. what about the economy? what about our planet?

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look for me at maria bartiromo. in the weeks ahead, on monday, the nations real estate report on the number of homes sold in the last month. tuesday we get the estimate of the growth domestic product. and the federal reserve also releases the minutes from the latest meeting on tuesday as well. wednesday, the deadline for the congressional supercommittee to announce its plan for cutting $1.2 trillion from the u.s. budget. and thursday is the thanksgiving holiday. happy thanksgiving, everybody. all u.s. markets will be closed for the holiday. and you have to laugh sometimes. saturday night live did a spoof that portrayed all eight candidates, as well as me, and it poked fun at texas governor rick perry's now famous brain freeze. >> you still haven't named the third department. >> i didn't? oh, i know, it's mard.

that's not a word. look, maria, can we just move on? i want to be president, but not like this. >> i just loved seeing that. i guess imitation is the sincerest form of flatterry. each week keep it right here where wall street means main street. from all of us here at "the wall street journal report," have a wonderful thanksgiving. we'll see you next weekend. introducing htc rezound.

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