. everybody, welcome to "wal street journal reports." the fed looks like it's ready to roll, and a new warning about that specificy fiscal cliff. what does it mean for your money? is america in decline? a discussion with frank rich about if our best days are behind us. and the girl scouts are about more than selling cookies and lighting campfires these days. the "wall street journal reports" begins right now. >> this is america's number one financial news program. the "wall street journal report justice. now maria bartiromo. >> let's look at what's making news. inch by inch the federal reserve

moves closer to action once again, but it's like watching a snail's race. in the minutes released, the fed's open market committee changed key language about steps about helping the economy. the market's reacted with a big yawn to the fed statement, the s&p 500 falling back from the post-final crisis high reached earlier in the week. we're at the tail end of earnings season and the news has been grim. del computer beat expectations, and hewlett-packard also bet estimates and lowered expectations. apple game the most valuable company in the world after the stock price his $665 on monday. the company is now worth more than $623 billion.

beating the microsoft hit from 1999. what does it all mean for your portfolio? joining me now is alson ison ze. the fed are suggesting increased option from the federal reserve. do you think they will create more stimulus? >> i think there's a potential if we go into the vacuum of activity. in an environment of uncertainty, you could find people pulling in and not spending and that the fed might have to come in and stimulate more or people hit the fiscal cliff. i think the underlying trend is better than we think. >> all of the stimulus we have seen already, it's a real debate on how much more effective they

can be. do you think they will move the needle in terms of growth? >> i don't think so, i've heard people calling for more. corporations need to start hiring or for washington to come together. put policies and gives people a sense of what's going to happen in the future and focussing on trying to restore economic growth. >> i think the fed ran out of things that could be effective. >> i feel like they keep bailing out the white house. we need to see policy on taxes, on the spending programs. >> i agree, i wouldn't say it's the white house, i think they're equal by culpable. congress made it their mandate to make this president unsuccessful, and that sunt well. >> and there was a slow melt up in the stock market. the market going higher, i guess on the fed or on the corporate balance sheets that appear to be strong. how do you think the market plays out heading into the

election? >> i think we will have a sideways into the market. i think we're going into a period of incredible uncertainty. europe starting to show up in the headlines again. the market tends to trade with fear or lack of fear about europe these days. >> the noncongressional budget office had two notable points. one that the deficit will hit $1.1 trillion again. this is the third year that we've been above a trillion dollars, and if there's no extension of the tax cuts, the fiscal cliff and the spending programs, we'll slide into a recession in 2013. are we looking at a recession in 2013? what are the implications. >> i don't think we are. regardless of which party wins, a lot of this will be dealt with after the election. there will be a lot of scare around that, i think no matter what it's an extension of the tax cuts until we see signs of

economic improvement. either party i think will come up with a solution. >> they have to come up with an agreement on the tax cuts, right? >> corporations could do nothing. they know what the new policies will be and that would exacerbate a weak economic situation. >> nothing is another situation. okay, let's talk about housing, here we may have more clarity, what are you seeing now? >> stability improvement, to me that's one of the most positive things coming ou it could be a contributor to the improving market environment and the fed saying other things and not being very committal. inventories are low, command is picking up, and pricing is improving. it's starting to show consistency. i think that is a very good sign for consumer confidence, spending, and economic growth down the road. >> this is so important.

>> do you think this stakt is enough to create jobs? >> i think it is. if you have seen what's going on with home builder profitability, has they hire and people buy houses, the ripple effect of what people consume increases demand and the need for corporations to hire again. >> what does this mean for investing right now? >> i think too many people have too much in fixed income. if we have a volatile environment in the next couple months, it might be a time to reallocate some of their more conservative money sitting in fixed income into the equity markets. >> meaning dividend payers? what areas are most favorable from your standpoint. >> i think dividend payers that can afford to pay dividends are showing positive trends. but i also say focussing on the industrial sector, the consumer sector, and some of the more

export driven industrial businesses. i would keep away from financials, i think the overhag there -- and financials i don't see for long term rign. >> i just think unt there is clarity around regulations and where the future of the growth is, it's a industry that's hard to show strong profits. >> and rock bottom interest rates, right? >> great to have you on the program. up next. is america in decline? it could shape the way we do politics. and scouting out the best way to teach girls about finance. girl scouts preparing the girls of 21st century.

is the great american dream officially dead, or do we just like to talk that way. we may be enthralled with the idea that we're not that great anymore. thanks for being here, frank rich. you spoke about the focus of american in decline. the political debate over american exceptionalism. tell me more about this phenomenon. do you think america is in decline? >> we have our problems, but i don't think we're really in decline. and one helpful way to look at this is we have all -- by the way, decline is focused on by people in the left, right, and center. it's like a publishing craze. i think if you look back and realize america is also thinking it's in decline.

some people remember the sputnik home when we thought oh my gosh, our schools stick, everything is terrible, we lost the cold war, we had a similar set back at the turn of the century when the dot com bubble burst and after 9/11. maybe it's almost a healthy thing. also in the late 1980s. after that crash, there was a big best selling book about the decline of the great powers. there was a feeling that we were through. so it may be healthy that we care enough and worry and get ourselves up to a level of anxiety periodically so we improve the things that are wrong. >> have we lost something giveen the financial crisis? have we lost something? >> i happen to feel that the biggest problem is one that is

hardly my original idea. there is a sense of unfairness american society, particularly in the economy. part of it, of course, is exacerbated by horrific unemployment, and the issues of income inequality and a squeeze on the middle class, and the feeling that the culprits were not punished for the misdeeds that lay waste to the economy three or four years ago. so that's a real problem, and it's one we have to correct, and do i think that's why you see these high on the wrong track numbers, people disgruntle about government on all sides, you see the angriest level whether it be the tea party or occupy wall street on the left. on the other hand, this country has a lot of strength. it has incredible entrepreneurs.

people who are basically good spirits, and it also has, in my view, a younger generation that's coming up, people in their 20s and just out of college. if we get past this economic hurdle, and i find it inspiring when we meet them. >> we're calling this the new normal. the american middle class is struggling. the rich are increasingly vilified. things are not business as usual, are they? >> no, they're not, and the fruit is, the figures all show that the middle class income is essentially stagnant, and that's just for the people who are employed. and there are many poor people in this country and they're also, not only the unemployed are officially counted, but they have given up looking for work. and that has to be corrected and has not been. it's hard to do it when you're fighting off the aftermath of a

major recession. we can't let that be the new normal or then the country is in trouble. no one has an economical move, they have a psychological mood. we need to feel that we can better our situation and progress or we're not going to do it. >> i'm glad you mentioned that because the psychological impact is important. what danger do you think this debate is having? is that impacting this country economically and politically? >> well, it probably is if you look at, you know, the kind of things you look at. world markets and the mac row economy. in terms of the general public, i think it's just more noise from washington. >> how do you see this playing out then, frank. this election year, the selection of paul ryan, it seems to have framed the debate on how the two parties see the economy

very differently. >> yes, i do think, and i spent time rereading old clips about the 1964 election. i'm not saying it will have the same result, but it's very similar to that debate where you have lyndon jnson, a democrat who felt that the government could solve these problems, and was useful, and you had a conservative candidate in barry goldwater who argued that the private sector is the best way and less government is more. >> so what do you think the word is from the public? did the president's administration do enough since 2008 to address the root causes of the financial crisis to build a better future? >> i think that people have varying opinions about that. i think no one can say that the president's focus was laser like on jobs in the beginning or that job growth is what anyone wants to sigh. on the other hand, you can say,

and i think accurately, that if it had not been for the bank bailout, we would be in much, much worse shape. i do think at the very top 1% is going back to business as usual, there's a feeling from ordinary americans, wait a minute. what am i missing here? how come they bounced back and i haven't? and people on the left, right, and center have different explanations for why that is and different villains they want to pick on. i think it's hard to say this is all obama's fault or all anyone's fault. >> thank you, frank. up next on the wall street journal report, you want a badge for that? be prepared, the girl scouts of the usa

since 1912, the girl skout movement has taught life and leadership to women all over the world. building generations of tough cookies including myself. the girl scouts are growing up a bit offering lessons in dollars and cents. right now anna maria chavez is

with me, head of the girl scouts. >> you facebook the job, and the girl scouts are celebrating 1500 years in 2012. how are you serving girls? you're the first latina. >> yes, i'm the first woman of color. i was a girl scout like you, and i learned skills to help me in my future career. we were founded in 1912 and since then we have had 59 million members so over 100 years we developed leaders and individuals who are giving back to the local community. >> you really are, and selling the cookies allows a girl to run their own business and teach them business. was that intentional or accidental? >> it has been very purposeful, and we have been selling cookies in our community for decades.

and we're teaching girls to have fun, and create a revolution, and something you really care about. and at the same time, they're learning really critical business skills. when you see a browny set up, they're using goal setting, decision making, how will they use that revenue to do something great in the community. people skills, and they're investing in something she cares about. >> i love it, girl scouts introduced a series of financial literacy badges, everything from good credit to financing my dream. tell me about the program. >> when we looked back in the last couple years with the economic situation in the country, we realized that girls get scared about talking and learning about money. we wanted to provide a platform where girls could learn in a fun way. so not only are they learning at a very young age what money is,

you learn how to count money while you save it, and maybe when you're a senior in high school as a girl scout, you're learning how to invest for your college future, a mortgage, how do i build and buy my future home. >> that's terrific. what are you hearing from parents about the program? >> they love it. it's giving them an kpunt to talk to their daughters about money management. how to stave for your future, and it's allowing girls to be inventors. they're taking the revenue and investing it in inventions they created. we have a group called the flying monkeys. they're in iowa, and they use their money in revenue to create a prosthetic hand for a little girl. now they're waiting for a patent, and they won the x prize and $20,000 again to do something with their creation.

>> was there a catalyst or something that pushed the development other than the economic times we're living in? >> all financial programs are based on the cookie program, and it's run by girls. there's a $760 million every year. and we wanted them to learn the power behind the cookie program because again, it's run by girls, they can then take that money, invest it in the local animal shelters, anything their passionate about, and what's wonderful is we have volunteers and adults standing next to them, also learning and encouraging them to be that future leader in their community. >> do you think girls today are planning their lives and careers differently than we were? as kids? and our viewers? >> absolutely. when i was growing up in arizona we didn't have the technology we have now. girls are sitting in their homes and school looks at technology in a different way. they're getting a lot of media

messages about the future and how to plan for the future. i think girls from the age of five all the way to a senior in high school are really looking at how they can change their lives and the lives of their family. >> great to talk to you, thank you. see you soon. >> up next on "wall street journal report" we'll look at who has weight on your money, inside washington's wealth, next. and commitment is not limited to one's military oath. the same set of values that drive our nation's military are the ones we used to build usaa bank. with our award winning apps that allow you to transfer funds, pay bills or manage your finances anywhere, anytime. so that wherever your duty takes you, usaa bank goes with you. visit us online to learn what makes our bank so different.

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guests, check out our website. i hope you'll follow me on twitter an google plus. now looking at the stories coming up that may move the markets and impact your money this week. on monday the republican national convention will kick off in tampa florida. the s&p index will be out about home prices in 20 cities. also wednesday, the quarterly report on total corporate profits from american businesses it out, on thursday, the federal reserve's annual conference in jackson hole, wyoming. they will watch for any clues by ben bernanke about stimulus from the fed to come. and consumer sentiment will be out on friday. show me the money in washington. a list of congress's richest members. at the top, michael mccall with

$290 million. he is the son-in-law of the clear channel communications. and john kerry is the richest democrat. that will do it for us today. thank you so much for being with me. my guest next week is hilda salease. i'll see you again next weekend, keep it right here everybody. ♪