industry. how they're trying to obtain contains and protect patient care. investing advice for women. why women need to invest differently than men? the wall street journal report begins right now. take a look at what's making news as we head into a new week on wall street. erjz season is underway with the first dow component reporting this past week. aluminum giant alcoa kicked things off. o a positive neat beating analyst expecting with a profit of $77 million on higher revenue. it's important because it did come on increased revenue rather than on cuts in spending. the dow industrials started the week off on an up note with a powerful two-day winning streak, rising more than 100 points on both monday and tuesday. then it took a breather on wednesday. the markets continued up, though, on thursday, and rose again on friday.

retailers are reporting same store sales through the month of september. many coming in ahead of estimates. the big surprise there. analysts watching that because of the consumer making up 70% of the u.s. economy. and gold setting another record going over $1,000 for gold. the precious metal rising because the dollar is weakening, and it generally moves in the opposite direction, but adjusted for inflation, gold is still nowhere near its all-time highs. we continue to see signs of a strengthening economy, and even so there are still calls for another stimulus package. is it necessary? joining us now to talk about that and a whole lot more is ed lazeer, stanford university professor and former chair of the council of economic advisors. ed, wonderful to see you once again. thank for joining us. >> thank you. good to be back with you. >> so the talk keeps on going about the possibility of a second stimulus package. do you think it's necessary? >> well, i don't think it's necessary, and i would say that primarily for two reasons. first, most of the money has not yet been spent, the money that's already allocated in the current stimulus bill. if we look at what the

government has proposed, next year is actually a bigger spending year than this year. there's still a lot of spending power out there. the second thing that i would say is that if we look at the effects of what has already been spent, unfortunately, those effects have not been dramatic. look at the difference between the first quarter of this year and the second quarter of this year. as you know, the first quarter of this year had a pretty big decline in gdp, about 6%. second quarter was much better. the decline in g about dp was just about 1%, so you would say, well, you know, maybe that was the result of the stimulus. unfortunately, most estimates suggest that it's only about -- only about one-fifth of that narrowing was due to the stimulus, so most of that is the natural recovery that you see coming about as the economy takes hold, and the stimulus, you know, has had some effect, i think, but very limited. >> it seems to me that if you put money into infrastructure and you put plans in place to

fix bridges and roads, that would create jobs. why september it happening? >> well, again, it does create jobs, but it does it pretty slowly. one of the things that we looked at was how quickly does money get into the economy? if you give money to the department of transportation, only about 25% of the allocated funds get spent in the first year, and the rest tricks out over the next four to five years. the reason is it takes a long time to build roads and most of the money that you are putting in there goes to wages and to other kinds of supplies that people buy slowly over time, so that's a big problem in terms of getting money into the economy. the other thing that i would say is that even if you do that, you're still talking about a very narrow segment of the economy. you are talking not only about construction only, but just a very limited part of construction, so you're really relying on that getting spent and multiply throughout the economy, and that's a pretty tough thing to do.

>> do you believe we will see job creation, whether it's construction or beyond, in 2010? >> i think that's a tough order. i think it will be difficult to get jobs going again in 2010. i would not be surprised if the unemployment rate continues to rise throughout all of 2010. >> okay. >> again, that would be consistent with the historical pattern. it's unfortunate because that's really where we need the help. >> okay. let me switch gears here and ask you about the other issue that we face, and that is inflation. the fact that we're seeing gold and oil and so many commodities rise in value and easing money out there, everybody is worried that the federal reserve is going to have a hard time unwinding some of these stimulus packages and we are going to see inflation. is that an issue? >> oh, inflation is always an issue, but i think the primary reason that inflation is an issue right now is the very large expansion in the government. right now we're talking about a government that is going from a historic average of about 21% of

gdp to 26% of gdp, and the president's plan is to keep spending at a very high level. >> and, of course, the other major issue everybody is talking about -- in fact, this comes up all the time when i'm speaking with people, and that's the dollar weakening, continuation of weak know there. we're hearing chatter that oil-producing countries no longer wanted their transactions priceed in dollars. are you worried about the weak dollar? >> i'm not worried about the weak dollar. what i'm worried about is the stable dollar. i think that when you think about a research currency, what's important for a reserve currency is not its level, but its predictability over the future, so people hold a currency when they believe that it will be the most predictable or certainly one of the most predictable currencies, and the dollar historically has been very predictable. that's, in large part, something that we can control through policy. much of that depends on the policy of the fed. i think the fed has -- is in good hands, and i have confidence that the fed will behave in a responsible way.

i also believe that the federal government can also behave in a responsible way and make sure that we don't do anything that's unpredictable, but that is a policy choice for the obama administration, and i think the results that we will see in terms of whether people jump to or flee from the dollar, in large part, will depend on policy choices. >> ed, i realize that everybody should do all responsible things. is there any reason to believe the dollar reverse and goes higher any time in the near future in your view? >> i would say that if we engage in pro-growth policies, in particular, we have to look at what the government does as far as tax increases. as you know, the tax -- the bush tax cuts are going to expire. >> right. do we have an idea of what the administration is going to do? do you think the dollar is going to go higher? >> well, you know, i don't want to predict the dollar. i wasn't even allowed to talk about the dollar. >> but you can predict what the policies will be, right? >> right. right. i can certainly predict that if

this government decides to raise taxes -- and that's a big question, actually. i think there is some uncertainty there because i think that certainly the president during the campaign suggested that he would be inclined to raise taxes on the highest wage earners, and that would also include small businesses. that would not be good for economic growth, and i think that would harm the dollar. we are still in deep situation with respect to employment and the question will be whether they decide to put that on hold. >> all right. >> i think that is a tough one. >> very, very important discussion. ed, we so appreciate your candor and you joining us today. we appreciate your time, ed. >> thank you. pleasure to be with you. >> up next on "the wall street journal report" managing cost, managing disease. how two top health care executives would repair and reform the system. and why women need to invest differently than men and just how they should do it. stay with us. everyone awaits the return of the fishing boats.

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the health care debate including how much it costs to keep us all well and who should pay for it continues to impact americans personally and economically. both of my next guests have on the job experience. joining me is george barron, ceo of cardinal health, and the former c.o.o. of genentech. cardinal health is an $87 billion global manufacturer and distributor of medical products. what do you think it's going to take? what specifically can health care businesses do right now to address the exploding cost of care? >> well, there's a lot of talk about bringing people into the system. obviously, that's going to create unique challenges, and we're talking a lot in the system today about how do we contain costs? we've probably spent too little time talking about the inefficiencies of the system and they're pretty dramatic. our work is really about bringing those efficiencies into the system and allowing deliverers of care to focus their time on delivering care. >> that's really the low-hanging

fruit, right, the inefficiencies? for example, going, you know, to technology and making the records available digitally, but what else? what's so expense i? >> well, imagine hospital's work. these are very complex enterprises designed not to be businessed, but designed to be deliverers of care, and so they tepid to be organizations that work very departmentally. you can find from department to department different approaches to the product and moving materials through the system. just in looking at those things we can extract enormous synergy and value. for example, when we look at a hospital, we might find that in one hospital you find different departments buying 50 different kinds of exam gloves or surgeon's gloves or gauze. that is an inefficiency, and as we think about consolidating that activity and centralizing it and bringing efficiencies to that, we can extract enormous value. >> this makes perfect sense, of course. myrtle, what do you think? this debate has become so highly

charged, and, obviously, so personal. mcproducts and services change )kl of our lives, so what fact can be taken out of the business from your standpoint that doesn't impact patient care? >> yes, absolutely. we normally have about $8 had been million every year that's wasted in the health caj system, and -- but what we don't know is we don't know exactly where that waste is. typically if you want to go cut your budget, you look at the biggest line item. more often than not it's labor. in this business cutting the labor isn't necessarily the answer. you have to have an understanding of what et cetera going on from the bottom up and understand how much it costs to get each piece of work done. >> i was talking to a doctor, and he was telling me that when you look at the u.s. versus, for example, the u.k., in the u.s. there is a lot of early diagnosis, a lot of testing going on for cancer, which is much better than in the u.k. because in the u. kmt it's very much after the fact, whereas in the u.s. we're trying to

prevent, when it comes to cancer. complete opposite when it comes to diabetes. in the u.s. it's after the fact. you already have type ii diabetes, and you are being treated, and then, you know, you are spending all this money, whereas in the u.k. they are focused on avoiding the diabetes. i mean, that sounds so backwards to me. why can't we be more preventive? >> yes. you know, one of the things, maria, when you think about cancer, the cancer model in the u.s. is really very, very interesting, because they basically use -- we use protocol to determine how a patient will be treated. if you get cancer in this country and you are in a hospital, your case will go to a board comprised of nurses, doctors, other affiliated care gives to make the decisions about what you will get, so you don't have huge swings in terms of how to treat a patient. it's really much more stashedized. for the rest of care in the u.s., these protocols are not in place, and, yet, that is really one of the keys i think will make a difference in controlling

costs. >> let me ask you this. there's potential for uninsured americans to get access now, while we are focus odd this debate. can we have reform that can both effectively provide for the influx of new patients in the system and also cut costs, because it seems like there is some conflict here. we have a 47 million americans that are uninsured. we'll be adding more people under the umbrella, and you have lower costs there. how does that work? >> well, it's hard to say whether you can -- when you look at these in contrast, whether or not the increase necessarily should cause an increase in cost. i think we look at the system and say there's so much inefficiency, not just in the way we deliver products, but in care integrated. one of the problems we have is that we don't manage diseases in an integrated way, and so that we have treatments at the physician's office or at the hospital or in a pharmacy, but they're not well intreg grated. >> because you worked in biotech and pharmaceutical for so long,

what impact does this debate have on invasion in this country? i mean, look, a lot of people i have spoken to said, look, regardless of how bad the u.s. system is, if i get sick, i want to get sick in america. because of the doctors, the invasion, the drugs. are we still seeing that kind of invasion? >> numbers would say that we're not. in the last 30 years there's been a 60% to 70% decline in rnd productivity. maria, that is a staggering, staggering number, and would suggest that we are really taking a hit as it comes to invasion, but i do think that as we have thought about drugs and the cost of drugs, the big question that everybody has asked has been whether or not the companies are spending too much money on advertising. well, maria, i can assure you that the money spent on rnd makes the advertising dollar just pale in comparison, and so the question that we need to get on the table is whether or not there is a more cost effective way to do research. maybe research shouldn'ting done

by big pharma companies. maybe it should be at the university level. maybe it should be with the nih or other smaller companies who do nothing else but discover drugs. >> all right. we'll leave it there. great conversation. thanks so much. we appreciate it. george barrett and myrtle potter. up next on "the wall street journal report" the battle of the sex says when it comes to investing. why women should think and act differently. we'll have expert advice and practical tips. as we take a break, take a look at how the stock market finished the week.

how may i help you? welcome to progressiv. i'm looking for a deal on car insurance. i think i might have a coupon in here. there's an easier way. we've got the "name your price" option. you do? follow me. you tell us how much you want to pay, and we'll build you a policy that fits your budget. and i still get great coverage? uh-huh. go ahead. you're the boss. i'm the boss of savings.

more like the c.e.o. oh, oh. no glass ceiling. the freedom to name your price. now, that's progressive. call or click today. women are different from men. we all know that. the way women should and do invest is different as well. lisa is the president of women and co, a financial resource arm of citi. great to see you. thanks for joining us. really, really nice to have you. let's talk about women and why they need to think differently than men when it comes to investing. besides the fact that women are living longer, what's the difference? >> well, not only are they living longer, but women -- the average age of widowhood is 56, and 90% of women will be on their own at some point in their lives. that's an issue. secondly, as you mentioned, they outli men by five years so, what does that mean? it means that they can be at risk of outliving their nest egg. moreover, women take ab average

of 11 years out of the work force to care for loved ones or for their children, which means that they can be at risk of coming back into the work force with a smaller retirement package, so it's really important because of these dynamics for women to really think about how they approach their money. they should save early. they should save as they earn. they should plan for time out, in other words, if they go out of the work for force a while, and they shouldn't cash in their savings when they change jobs. >> really interesting. so how is that reflected in a practical sense when it comes to investing? >> as women do the juggle, they're balancing work and family and children and navigating through life transitions, there's a tweak in your financial plan, whether it's marriage or having children or planning for your parents as they age. >> let's look at some scenarios. what tips do you have for women in their 20s? >> well, women in their 20s really need to start by setting

goals, figuring out, you know, what their goals are financially. second, they need to set a budget. in other words, figure out how much they want to save on an annual basis, and once they figure out that savings that they want to have, they should set up an automatic way to make sure that money goes from their bank account into a savings account, so that it's automatic, and they should also take advantage. i didn't very early on. of those company retirement plans where there's a matching program, and they should put away as much as they can. they may not think they can afford to max out, but they should absolutely take advantage of those company 401k plans and retirement plans. >> that's free money. >> absolutely. absolutely. >> a woman in her 40s, is it different? >> a woman in her 40s is at a different stage. in your 40s you are almost at that maximum earning potential, so you want to be maxing out on that 401k plan. >> tell me about women and co a

bit more. i know you have a lot of information on the website. >> women and co essentially is a place where wealth, women, and wisdom meet. it was a brainchild long ago to service women because women do have unique financial needs that are different than men, and what we're aiming to do with women and co is to provide women with the financial tools and resources they need through our website so that they feel financially independent, financially secure, and financially in control. i feel as though we are doing a public service in the private sector on a daily basis. >> it's also, by the way, a huge business opportunity because women are increasingly emerging as the spenders, the dominant force in terms of economic growth. >> that's exactly right. i mean, women are becoming the chief purchasing officers. women are accounting for 80% of all consumer spending.

by next year they're going to account for half of all the u.s. private wealth in this country, so it's an incredible opportunity for many, many companies who are looking to target the women's market because more and more women are coming out of graduate schools. more and more women are going up the corporate ladder and coming into very high paying jobs, and so that's a force to be reckoned with. sfoo nice. go girls. >> go girls. >> lisa, good to have you. >> great to see you. >> lisa here. up next on the wall street journal report, a look at the news this upcoming week. we'll have an xwrakt impact on your money. women, bars, and birthdays. why they go together in a way you may not think about. (announcer) we call it the american renewal

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sdmrimplgts for more on our show and our guests check out the website wsjr.cnbc.com. you'll find a tloink my blog, investor aagenda. that's cnbc.com. check it out. here's a look at the stories coming up that may move the market and impact your money this upcoming week. monday is column bs day. a federal holiday. the markets are open. earnings season is in full force with six dow components reporting during the week. they include jp morgan chase, johnson & johnson, and general electric. the patient of the company that produces this program. on wednesday the government's retail sales figures for the month of september will be released, and we'll also hear the minutes from the federal reserve's last meeting on interest rates when they kept rates at near zero. on thursday more earnings reports are due from two important financial companies. citigroup and investment bank

goldman sachs coming out thursday. and an indicator of inflation on the consumer side. the consumer price index also released. and, finally, today it is black and white. you can find it most everywhere, and now it's celebrating a birthday. the bar code was patented 57 years ago this week and has become essential to america's business. it contains 12 digits and can be used to track just about anything bought and sold in many countries, but all good things must end. bar codes may eventually be replaced by radio frequency identification tags which can be read up to several yards away by scanners using radio waves. that's it for us today. thanks for being with us. thanks for joining us. join us next week. my guest ebay ceo john donaho will join us on the state of e-commerce and what he expects for the all-important holiday season. keep it here where wall street meets main street. i'll see you next weekend.

>> this is "open house." today we'll show you how to spice up any room without breaking the bank. >> just because something's broken doesn't mean you can't turn it into a treasure. >> then, "tips of the trade" on designing with international appeal.