hi everybody welcome to "the wall street journal report," i'm maria bartiromo, we'll look at the jobs and the economy and what it means for the market and your money. and moving to the middle, will president obama's economic policies shift to the center? if he wins, my conversation with the man who knows. and a wall street watering hole where you still may find that three-drink lunch, harry's cafe. and can she make the move from party-girl to mogul? "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. but first, here is sue

herera, with some of the stories and the headlines this week. over to you, sue. thank you, maria, here is a look at what is making news as we head into a new week on wall street. it was a disappointing jobs report for the month of august, the labor department reported that the economy just created jobs well below the expected. but the unemployment rate fell to 8.3%, because fewer people were participating in the labor force. revisions showed that 41,000 fewer jobs were created than first reported. mario draghi announced plans to help to fight the fiscal crisis in europe. and the ecb will buy government bonds with three years of make maturity or less, and will have no limit on the amount they can buy. they would have to apply for it

and meet economic reforms. the markets like that plan a lot, a monster rally on all three indices on thursday, following that announcement. the dow and s&p 500 hit three-year highs, and the nasdaq posted a nearly 12-year high. stocks continued to rise on friday, and gm rose 10%, chrysler, climbing 14%, compared to earthquake related supply disruptions last year. all of those companies came in ahead of expectations and the annual sales rate in the u.s. now stands at 14.5 million cars. it is an extraordinarily busy and important week from the jobs numbers to the ecb plan. but there are plenty of other things to pay attention to, as well. joining me is the chief investment strategist, russ

koesterich. thank you for joining us. thank you. >> 96,000 jobs created, fewer than the market expected, but the unemployment rate did fall to 8.1%. what is your take on the numbers and the economy? >> unfortunately, it was a bad report on several fronts, even the drop in the unemployment rate was negative. i'll explain why in a moment. so you're below expectations on job creation, the sharp slowdown from the rate in july. we're seeing the wages slow down. again, this is a challenge for consumer with not much wage growth and debt. and even the drop in the unemployment rate, which you refer to happened because more and more people are leaving the work force. as a matter of fact, today, the participation rate is the lowest since the '80s, with negative implications. so all in all, a pretty bad report. >> so what does it do for the fed report? increase the chances of the

federal reserve or not? >> i think that it does, the reading i have is that they're inclined to go again, less risk of easing the program. if you're looking for another excuse for a round of qe, this probably gave it to you. >> let's talk about how europe plays into all of it. we did see the european central bank come up with a plan, the bond-buying plan. basically the market loved it. they rallied on it. do you think it is enough and does it solve the problems for europe. at least near term? >> well, the short answer is it is enough for now, but really, what the ecb did is give the european politicians the gift of time. they have effectively been able to capitalize on the bond yields in spain and italy and make it less of a threat. in your own words, you don't see the rising bond yields. this gives the european

politicians time to address the fiscal structure, the -- the issues need to be addressed, and there is still lots of work to do for the coming years. >> you mentioned that the ecb basically bought time. the clock is ticking in the united states on the fiscal cliff, which you are very, very concerned about. the expiration of the bush tax cuts, how do you view this playing out, and what are the implications for the market? >> you know, i think it is very important. last week, the point when the investor attention really starts to focus on this when it is in europe. so it is a big deal, the fiscal cliff, 4% of gdp, secondly, it would hit at a team when it is

the consumer's week of the it represents a big danger to the economy, the challenge is it is not discounted into the price. in other words, we're all talking about it. i have met very few investors who believe it will happen. and if we move to an environment where it is likely, it could create volatility in the market. so how do you invest against that kind of back drop? where would you put money to work right now? >> i think there are a couple of things that investors can do. one thing is the people that have the flexibility, right now the options in the market, that is low. you buy insurance for the portfolio that will hopefully mitigate the impact if we do go over the cliff. the other is to look at assets that will also again, cushion the down side. so example, mega-caps are one place to look. another thought is europe, where we have reached an inflexion

point, where that is the global economy, investors may want to look overseas in places like europe, which may hold up better if the focus shifts to our own economic problems. >> russ, thank you, we'll leave it at that. >> thank you. >> all right, now back to maria with the rest of the show. >> thanks sue, up next on the "the wall street journal report," obama versus bill clinton. will the current president fall in the economic steps of the former president and shift to the middle? >> and why friends have found crowds at harrys, as we take a look at the stock market at the end of the week. [ male announcer ] how can power consumption in china, impact wool exports from new zealand, textile production in spain, and the use of medical technology in the u.s.?

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former president bill clinton and president obama were

not exactly best of friends during the 2008 primary race, you may remember. but a lot has changed in four years as president clinton took center stage during a prime time address at the democratic national convention. and now the question is, will president obama's policies start to look like president clinton's in the next term? i talked to a man who knows about the budget, peter orszag. >> i think probably what will happen early next year if president obama is re-elected, you will have a big fiscal deal that gets cut. so with a republican house in that scenario, a democratic president, it will be a centrist deal. and it has to happen because we have some constraints that need to be lifted. and both sides know that. it will be rocky before we get there, but we'll ultimately get there. >> and so what do you think this deal looks like peter, in terms of the fiscal cuts.

i think the deal that is cut in early january, in which you combine a more progressive tax cut than what would have just expired with some entitlement reform and simultaneously raise the debt limit. i think that is doable and most likely the scenario. >> will that be enough to avoid a recession in 2013, the congressional budget office says we're seeing one because it won't be addressed. >> well, when you stay there, that is such a fiscal constraint so as to cause a recession, that is a different case than what mr. romney is pushing forward. what will happen is, what will cause the recession in that case is spending restraint and taxes, which were too large. i think you will have mild fiscal constraint, maybe 1% of gdp. and the bigger problem will be

ongoing anxiety coming from europe. >> so president obama constantly talks about returning to the policies of the clinton years. but what specific policies do you think he should return to? >> well, don't forget the tax rates will return to the rates under president clinton, so he actually has a more wild version. what he will be -- mild version, the top 2% of the returns for the clinton rates, for everybody else, the taxes are lower. >> but we're talking about different times, because we were in the '90s, boom time, you had a different landscape. >> there is no question that times are changing, by the way, that is also why the comparisons done in the last 40 years, the tax share has been 18 or 19%. we may not be in the '90s, we're certainly not in the '50s,

though. we need to talk about what is the right policy on a going forward basis, to address the fiscal problem. if president obama moves more to the center after the election, how does it impact the fiscal question, does he give into republicans when it comes to taxes on the rich? >> no, that is why i don't think you have a deal, you go over the fiscal cliff, it expires, then the administration comes back with a fiscal tax cut that is worldwide, applies to everybody. there is no class war fare charge there. but it is a lot more progressive in the income distribution, than the tax cuts of the past. >> if the republicans win and hold the house and senate, you know, are we dead locked? >> i don't think we'll be dead locked, but it will be rocky. we'll have a period in mid-to

late december where it is not apparent how a deal will come together. ultimately we'll get a deal, but i think the big question here is there is such a prolonged period of uncertainty and anxiety, there will be lots of discussion on your show and other shows that there is a longer lasting harm that comes out of this. if we spend a month or two in this anxiety mode, you could have a long-term difficult effect from that. >> that is certainly the word. peter, nice to have you on the program. >> good to be with you. >> we'll see you soon, peter orszag. up next, a neighborhood legend shares his american story and centers on a place where wall street is not jus lots of prepaid cards

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i've been fortunate to win on golf's biggest stages.on. but when joint pain and stiffness from psoriatic arthritis hit, even the smallest things became difficult. i finally understood what serious joint pain is like. i talked to my rheumatologist and he prescribed enbrel. enbrel can help relieve pain, stiffness, and stop joint damage. because enbrel, etanercept, suppresses your immune system, it may lower your ability to fight infections. serious, sometimes fatal events including infections, tuberculosis, lymphoma, other cancers, and nervous system and blood disorders have occurred. before starting enbrel, your doctor should test you for tuberculosis and discuss whether you've been to a region where certain fungal infections are common. don't start enbrel if you have an infection like the flu. tell your doctor if you're prone to infections, have cuts or sores, have had hepatitis b, have been treated for heart failure,

or if, while on enbrel, you experience persistent fever, bruising, bleeding, or paleness. [ phil ] get back to the things that matter most. ask your rheumatologist if enbrel is right for you. [ doctor ] enbrel, the number one biologic medicine prescribed by rheumatologists. business person harry poulakakos has served the business area for many decades. and know knows the area better than this man. harry found himself at the intersection of old and new. luckily for the gang at harrys, wall street will always be the family business. "the wall street journal report" from september 20th, 1976, and right there in the middle of it after the exchange has closed,

har harry's bar is a market indicator. >> they used to come here, because this was an exciting place. and no matter what problems they had, they used to forget their problems. when i first arrived from greece, i never expected to run a restaurant. i wanted to raise honey bees, and i started working with them in 1968. i met all the wall street people and i made a lot of gd friends. and i said maybe, they can help me a little. but that worked the other way around. not only helped me, they enjoyed my success more than i did. >> so when peter was born, did you want your son to work with you? i mean, were you even given a choice? >> no, actually, i don't think he really wanted me to work with him. to tell you the truth. >> i wanted peter to work on wall street, one of the big firms -- i got him an interview

with everybody. and everybody told me, well, peter is not going to work for us. he is going to work for you. and still, i insisted. until he comes in one day, i got a job. i said great, but he said i'm not taking it. >> we have worked together since i graduated from college. and we have opened 20 different types of restaurant operations. we focused on developing stone street around here, right around the corner from harrys. >> i know it was originally known as the beer brewer street in the 1600s. >> and in the 80s and 90s, it was the most unclean street that you could find in new york. they worked with the city, and basically re-did stone street the way it was in the late 1600s. the street was completed, but

then in 911, everything changed and paused a little bit. >> i wasn't here, because i was in brooklyn, and they called me and said what would you like us to do? i said i didn't know how bad it was, so i said prepare -- and then right here, we'll see what is going to happen. people, they came, but nobody wanted to eat. we had seven girls in the office. they started cleaning their f e faces, because they couldn't see, or even see walking in here. >> peter, what about from your standpoint in terms of the aftermath of 911? >> we just looked for a good year, year and a half, and then we saw that things were getting better and turning around. that is when we decided around 2003 to start to do our development that we had planned prior to september 11th. >> we have a wonderful irish

pub, a wine and whiskey bar, we have a pizza place that we named after my mom, adrian's pizza bar. >> who were the customer? what is the crowd like on stone street, harry? >> you walk on stone street and see a lot of younger people and older people, too, with jackets and ties. people, they love to sit outside. >> i have to tell you, you know, all the businesses that opened on stone street, ours have been great forred neighborhood. >> in the 11 years since the terror attack in 2001, stone street is one of the largest commercial developments in manhattan. a neighborhood with changing demographics and ideas. tell me, harry, how the neighborhood has changed. >> when i started, it was a 9-5 job. those days, the restaurant was closed at night. the most you could find. i was the first one here that

kept my kitchen open after 10:30 at night. outside business now is completely different. >> we try to create things good for both neighborhoods. meaning, you have the wall street financial community down here and you have the people who live down here of t. if you walked down the street in the '80s and '90s, it was hello, harry, hello. now it is somebody else walking down the street with their baby carriage, saying hello, harry. >> you were part of the fabric of this city. >> i worked very hard, theñi people of wall street, and the american people, especially. they were very helpful to me, i will never forget that. >> my thanks to harry and peter poulakakos. up next on "the wall street journal report," we'll look at the impact on your money. and then one of the most famous names today dropped by to

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for more on our show and our guest, check out the website on wsjr. and now a look at what may impact the markets and impact your money. on tuesday, we'll find out if

the u.s. is importing or exporting more goods. and on website, apple possibly unveiling the new iphone 5. and thursday, will the feds step in to help out the economy? and chairman ben bernanke holds a press conference. also, the producer for the price index will be out, on thursday. and friday, tracking inflation at the consumer level. also reported on friday, last month's total retail sales numbers. and meanwhile, a new york fashion week brought some of the best dressed names to fashion. and what does it take to reach willing consumers? i talked to reality star kim kardashian about her growing business empire. >> it has been a huge goal of mine and my sister's to launch a beauty, our own color cosmetics line.

we were looking for the right partnership at the right time. and this was exactly what we were looking for. i think that the party-girl image has never been truly who i am. it is definitely a side of me, i like to have a good time. i worked since i was 16 years old, worked in my dad's office for six years. having this show has just given me the platform, that is what i am most passionate about. it is not that i'm trying to re-brand this image, i'm trying to use social media to figure out what my fans like and make a brand for my fans. so fashion, beauty, diet, fragrance, that is what they're asking for when i'm reaching out to them, via social media. >> and it is interesting, you know, baecause retail has been o hot on wall street recently. as a growing businesswoman, who do you think people want? what is your take on the

economy? >> well, you know i think we have definitely made adjustments on the way we buy in our boutique. and i have found with our brand, selling to mass, making the quality as luxury as possible to mass is definitely the way to go. >> my thanks to kitchen kardashian, that is our ♪ [ ukulele strumming ]

♪ [ folksy whistling ] [ man ] quitting is a fight you can't let yourself lose. it can take many tries. but keep trying, you will beat smoking. honey, you okay? yeah, i'm fine. ♪ [ ukulele ]