hi, everyone, welcome to "on the money." i'm in for becky quick. the markets are up. the next move may be an ugly one. what you can do to protect your money. keeping america working. our conversation with america's labor secretary about jobs, salaries and how we can keep up in the global economy. the controversial device that stops an airline seat from reclining and caused a fight aboard a plane. the man who invented, knee defenders. mbas working in unexpected places. "on the money" starts now. announcer: this is the number one financial news program, "on the money." here is a look at what's making news as we head into a

new week "on the money." america's economy is picking up steam and growing faster than thought. the grotsds domestic product shows 4.2% stronger than the 4% and better than economists expected. it's the broadest measure of the size of the u.s. economy. a market milestone this week as the s&p 500 closed above the 2,000 mark for the first time ever. partly on hopes there will be more stimulants by the european stimulus. the nasdaq hit new 14.5 year highs. the nasdaq stayed above 17,000. amazon is starting to twitch. the online retailer buying twitch for $970 million cash. twitch is a video platform for video gamers. would you pay $11 billion for coffee and doughnuts? burger king is. they bought tim horton's, at

least in part to take care of canadian tax laws. the markets keep bubbling up and interest rates trickling down. the market has been a hot one. where do we go from here. joining me is david kelly at jpmorgan funds and jim paulsen. thank you for being here gentlemen. the markets have had a slow melt up, setting records right and left. do you think they have reached their highs for the year? why is that? >> i think we are pretty close to the highs. i think the question that investers need to ask is can we now, i think the economy up shifted to 3% growth. can we grow at 3% with the unemployment rate heading into the fives and factory 80%, can we do it without interest rate and consequence? if we can, that's nirvana and

going to melt up. i suspect we are going to see a little resource pressure, cost push pressure, anxiety with the fed. that will cause turbulence here in the stock market before the end of the year. >> david, do you agree with that? interest rates have been going down. the stock and bond markets are telling different stories. >> i don't think they are telling different stories. we have economic gain without interest rate gain. the reason is because it's a global bond market and the fact is jgbs are paying 50 basis points and ten-year germans are paying. it makes a u.s. bond look good. the stock market can go up a bit while it's going on. the bond market is not going to look that attractive to investors as the rates move up. cash won't look good once the

fed begins to raise rates. i think money will flow toward the equity market unless we derail from the economy. >> could you address that, jim. could you see that 2.3, 2.4% given the fed and normalization of what is looming large ahead of us? >> i don't. i think it's a global bond market like david said. until we get a bad number in the united states, then it's domestic bond market and there's panic. i think the bond market could move quickly. last year, we were at 1.6% in may or something like that. within two months, 2.6%. that's not uncommon. you get a big move in bond yields quickly. sentiment changes on wall street. we are one bad wage number away in the employment report from a

different mind set about the 230 bond yield. i agree the market is not that vulnerable to higher yields, but they are vulnerable if the higher yields are going up because we are behind the inflation curve. >> david, turn to europe, if you will. one, how do you view europe and do you think their version of this might end anytime soon? >> well, i think europe is slowly recovering. i know we have had bad economic numbers over the summer. once an economy begins to recover and get the stress of the sovereign debt problem and dramatic, i think the expansion will continue. unemployment will gradually come down. i think the european central bank is hurting not helping right now. i actually kind of like it, targeters long term refinancing operation. the stress tests and review that

is the european central bank is doing with the banking system that is holding the banking system in check. >> jim, what are you telling your investers right now? >> i'm still longer term. i think there's more upside in this stock market. i think the recovery is going to last longer yet. i think we may have a pullback, 10% over the next several months. what i would do is stay overweighted toward equities. where you going to go, bonds? i think they are a great risk or cash that gives you nothing. diversify in different ways against what might happen here. one is to go to a part of the world that doesn't have the same policy schedule we have here. the feds are going to tighten european and japanese officials are far from doing that. go to those markets, too. i would also go to offshore market that is are resource based, canada and australia. they could do well if we have a

mini-inflation panic in the united states. i think the emerging world has bottomed. the stock market has in march. it's been outperforming since. right now, i try to allocate the mark. >> thank you both. jim, david, always a pleasure. >> thank you. coming up next, we are "on the money." the big job of keeping americans working. labor secretary tom perez joins us. why he thinks it department of labor is a great match maker. later, two passengers argue and are kicked off a plane over this device. what it is and how it might affect your next travel experience. we'll find out. as we go to a break, a look at how the stock market ended the week.

as we celebrate american workers this labor day weekend, the unemployment picture in the u.s. appears to be improving. are the numbers telling the whole story? joining me now is labor secretary tom perez. thanks for being here and spending time with us. we appreciate it. >> it's a pleasure to be with you. >> the u.s. economy gained back the number of jobs lost during the recession, slowly, but steadily. the question i hear from a lot of economists are about the quality of the jobs. is it comparable with what we saw seven or eight years ago? >> when you look at the job picture, we have 53 consecutive months to the tune of 10 million jobs, roughly. look at the jobs that have come back. in the last year, the biggest growth sector is business. they are the highest paying jobs, accountants, architects, et cetera. the jobs at the high end have

come back. jobs at the lower end tend to be the first to go and first to come back. where we have a lot of work to do is the middle income jobs, the middle skill jobs. that's why we are so focused on expanding the opportunity. expanding opportunities to access skills in high demand. >> as you know, perception is almost everything. the perception is, even if it's not correct, the jobs created in the last five years were the lower wage sector. you are telling us we have seen substantial growth in the higher wage area. >> absolutely. again, over the past year, the biggest growth area in jobs, 650,000 has been business and professional services. look at manufacturing. it's in the biggest growth period since the mid-'90s. the average person on the line is working 42 hours a week, roughly. the largest producer of oil and

natural gas in the world is now the united states. what we do at the department of labor is, we are like match.com. we are matching job seekers with employer who is want to grow their business and we are helping more and more people punch their ticket with middle class. america works best with the full team. we want to make sure everybody has that chance to punch their ticket. >> i have interviewed a number of labor secretaries. the first time i heard them called match.com. it makes a lot of sense. >> yeah. >> one of the big issues this summer has been the conversation and debate, really, over corporate inversions where companies leave the u.s. and they headquarter in other country that is have lower tax rates, lower corporate tax rates. what does that do to the american work force right now? does it, as many claim, lose jobs to overseas entities or do

you think basically it's good corporate government if you are a publicly held company to get the lowest tax rate possible? >> it's unfair and shortsighted. it's been interesting to watch the reaction to burger king across the spectrum. people have choices. i was watching a number of conservative commentators as well as those on the progressive side say people are going to vote with their feet as they should. i spoke to a fortune 50 ceo awhile ago who said to me something that stuck in my mind. we need to be focused in corporate america on the long term. too many corporate executives focus on the here and now. this person told me a story about a renegade shareholder who said, you know, i would rather be rich than right. that really stuck with me. i have talked to so many ceos

who want to be right and you can be right and you can be quite rich as well and you can take care of your workers and put a good product. >> the reason i ask about that is there is millions of americans out of work six months or longer, long term unemployed. given what we see, six years after the financial crisis, what remedies are available to address the long-term unemployed? >> they are incredibly talented, incredibly dogged. they want to get back in. one person told me last week, i got no quit in me. we can't quit on them. the best thing we can do is pick up the pace of growth. the economy is moving in the right direction but we, you know, when you do transportation investments that grow jobs. when you pass immigration reform and raise minimum wage. they are things that will put

upward pressures on employment in a good direction. >> all right. mr. secretary, i know you have a busy schedule. we'll leave it on that optimistic note. thank you so much. up next, we are "on the money." seat back or sit up straight? the device that stops someone from reclining their seat on an airplane. is it inconsiderate or every passenger's right? passenger's right? later, mbas trained to leave well, not that kind of fresh. on the freshness of our chicken. but i can guarantee the freshness of our chicken because we go beyond what the usda requires... with extra inspections in american family owned farms,

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the right to recline or the right to defend your knees? that was the question this week after an argument over a device called the knee defender causing two passengers to get kicked off the airline. who is behind the device causing the controversy? the creator, ira goldman is here. thank you for joining me.

>> my pleasure, thank you. >> were you surprised at the fighting over the seats? >> i know there's been a problem for a long time. when i sit down in a seat, my knees are already touching the seat in front of me. this has been a problem. the product has been on the market for 11 years and this is the first time it's happened. what happened shouldn't have happened. the person should have listened to the flight attendant. >> absolutely. >> some airlines, like spirit, don't have reclining seats at all. what do you think about that? if you buy a seat is being able to recline it an ethical issue? >> it's a courtesy. if someone is behind you and the person's legs are already there, the airline is trying to do what they did, they sell me the space for my seat, for my legs, then sell the space to somebody else to recline, but they can't be

there at the same time. >> you created the device about 11 years ago. i assume you being cramped gave you the idea. can you explain how it works? >> yeah, i have a couple of them here. they are two pieces of plastic. and you bring the tray table down in front of you when you are in coach and put these on the arms of the tray table, then you slide them down to the seat in front of you. that will stop the recline. or you slide it down part way and that starts some of the recline, defending on how much space there is before the seat would hit your knees. >> right. you never really aggressively advertises the knee defender since inventing it. i would assume, after this incident, it's really helped your business or at least you have had more people go to your website. >> certainly, 185,000 people showed up at our website the other day. >> wow.

>> yes, we don't advertise. we have spent $1.25 on google ads 10 years ago. the biggest day we had was when "parade" magazine did an article ten years ago. >> some airlines have policies against using those devices. if the faa does step in, what does it do to your business? >> that is the final ash tor. they only get involved when it's a safety issue. this is not a safety issue. >> thank you for spending time with us. up next "on the money," a look at the week ahead and street smarts versus book smart. what happens when mbas meet with rough and tumblers. we'll see if what they learned in school works in the real world.

here are the stories coming up that may impact your money this week. monday, the markets are closed in observance of labor day. tuesday, we see how manufacturing is faring with the index. wednesday, the federal reserve releases the beige book with information about the economy. also on wednesday, motor vehicle sales for august.

thursday, the european central bank. on friday, we'll get the big economic number of the week, the jobs report. mbas from the nation's best business schools are pass zing up internships at elite firms like gold mman sachs to help businesses near you. they are in a program, mbas across america. why are they eager to work with the nonprofit. joining me is casey gerald and red ants pants owner, sarah cal ho houn. great to have you here. it enabled students to employ what they have learned in small businesses in various cities. it's a great idea. how did it come about? >> to be honest with you, mbas across america started with three classmates and i a year and a half ago, not as an idea

for an organization. we use our degrees, our education and opportunity, not just to make a buck, but make a difference. that took us 8,000 miles across the country spending eight weeks in eight cities working with entrepreneurs, not just creating jobs, but creating change. folks like sarah calhoun were among them. right now, what we have found is the real question we are asking is could we create a country where every entrepreneur has the resources. >> how did you get into it? after listening, you are such a good salesperson of this concept. i'm sure it was not as hard, perhaps, as you thought it would be to get by. >> i wouldn't say a salesperson for the concept. we, right now in this country, are asking, will the american dream survive another generation?

if you look at the newspapers or if you watch some television programs, not yours, you might think it won't. then you meet entrepreneurs like sarah and realize our best hope is to double down on them. >> sarah, how has the experience been? it sounds like an amazing experience over all. >> it is very, very valuable. when they first called last year, i was a little bit, i had my doubts, i will say that. it was very much a new program last spring. i was excited to be a pilot entrepreneur. we had a second team come through. just being able to have four new sets of eyes on your business is, yeah. >> what kind of things have you learned? how valuable has it been to your business? >> it's fantastic. i don't have metrics, per se, but knowing there's a team of really bright, well trained students out there and business leaders, really, that can look

at my operations and say let's try this and this and this. when you are in the weeds in the business, it's hard to look at. >> it's a lesson they learn when they go out there. compared to corporate america, you have layers and layers of people to analyze and do reports. small business is very different. >> it's difficult. entrepreneurs and small business owners say i spend so much time working in the business, i can't work on the business. when they do, they are working on it alone. this is not a consulting proj t project. it's not using framework and power point to help businesses. this is a human exercise and trust is the most important currency. while the teams are on the ground for a week, we are engaged far lifetime. >> terrific to meet you. thank you for spending time with us. appreciate it very much. that does it for the show today. i'm sue herrera in for becky

quick. keep it here, we are "on the money." have a great day.

. it's the end of the era in atlantic city. the show boat casino closes doorindoo doodoo doors for good later on. a driver runs into fourp on purpose and then drives away. philadelphia police are are trying to figure out why. police are looking into what sparked a fire at a restaurant. the holiday weekend is underway with plenty at the shore for one last trip this season. here's a live look at cape may where conditions today may not make for the best beach day. good morning. this is nbc 10 news today. i'm