hi, everyone, welcome to "the wall street journal report." i'm maria bartiriromo reporting from the clinton global initiative in new york city. i'll be talking with president clinton about the economy, empowering women, and president obama. >> running against himself and people's misery. >> my conversation with another world leader, the prime minister of our neighbor to the north. why canada is a bright spot in the world che and what they're doing right. innovation in america. why silicon valley 2.0 might find a new hom on the east coast and where the latest technological breakthroughs might come from. >> this is america's numr one financial news program. "the wall street journal report." now, maria bartiromo. >> all that coming up in a

moment. first, let's get to tyler mathisen with some of the headlines of the week. here's a look at what's making news as we head into a new week. thee federal reserve is doing what it can to boost the economy. in an unusual move known as the twist. the fed is rejiggering its portfolio of bonds, increasing its share of long-term treasuries by $400 billion in an effort to drive down long-term ininterestst ras. in a statement after its meeting thisast week, the fed also added the phrase "significant downside risk" to its view of the economy. that spooked the marketsnd helped send the dow down more than 280 points on wednesday. and fears about the global economy pushed it down even more action by 390, on thursday. the markets rebound on friday. the fed moves and worries about europe also sent the volatility index skyrocketing. that's a sure sign of investor nervousness. the dollar soared to a seven-money high. the u.s. currency viewed as a

safer haven especially compared with the euro. some important earnings news. fed ex, an economic bellwether, beat expectatations but lowered its outlook for the rest of the year. the tech giant oracle beat estimates as well. one bright spot, existing home sales for august rose more than expected, up more than 7%. fafallingg prices on home mortg rates arepulling more buyers back into the market. back to maria. the themes of this this year's clinton global initiative include jobs, sustainability, and economicic empoweent for women. ? my conversation with the president we touched on those topics a and a lot more i inclu politics, whether presidentnt obama will be re-elected, and if his jobs creation plan will work. >> ifyou had a 50% reduction in payroll taxesfor 160 million workers, that would put a lot more money in people's pockets and incrse their security. it's worth about $1,500 a family. then if you had that reduction

in employer payroll taxes, and some cases outright forgiveness, up to $50 million for payroll in pay increases for employees, i think that will help. then they want to invevest $50 billion over the nenext several years. in construction projects, infrastrture projects, roadads, bridges and things that are ready right now. and start an infrastructure bank. mark zandy, who was an adviser to senat mccain in his presidential campaign against president obama, estimates that that will add between 1.3% and 2% to our gdp, between 1 million and 2 million jobs. that's pretty much where the economists are. >> and the payroll cuts that you mentioned have been talked about as much as m millionaire taxes have been talked about, the buffett rule. cut the deficit, cut spending,

ultimatetely kill jobs -- >> don't confuse the two things. these payrolll tax cuts a and te incentives now, these what are we should focus on the next couple of years. what the president did, as i understand it, is to say, if you want to start in 2013, for example, and see where my $3 trillion in deficit reduction are, this is where i would do it. because you remember they were saying before, when we were talking about raising the debt ceiling, he saidid, well, i tald about $3 trillion, and then the republicans said, but where is itwhere are the details, we want to see what yo plan is. so i think he's just offering them what he would do in a comprehensivive attempt to brin down the debt. >> so the question is, is the tax on millionais going to impact growth negatively? is now the time to raise taxes? >> well, i don't -- my understanding is he's not proposing having effect until 2013. that is the let harmful of all the taxes.

we need to broadeden the base o the corporate tax and lower the rates. our corporate tax rate is now the second-highest in the world after japan. >> can the president get re-elected with 9.1% unemployment? >> sure, but it depends on whher people believe that we've turned the corner, that he's not a plan that will work, and depends on what the competition says i meanan, right now he's out the running agaiainst himself and people's misery. that's a terrible position to be in. ask me, don't worry about it one way or the other, put people back to wowork, get caught tryi to put peoe back to work. >> do you belie the health care legislation should be repealed? >> no. i think it's already been -- i thinit should be improved on a contntinuous basisis. one of t things that's already hahappened on aa bipartisan bab is that they have gottenen rid some of thee more onerous small business reporting requirements.

the real reason that they want to repeal it is not that it's 1,000 pages long. it's that it's got o one line i it that says, 85% of your health insurance premium must now go to your health scscarcare. not in profits and marketing. in connecticut, aetna's already filed to reduce its health insurance premiums 10%. so the cost of medicare advantage is going down 4% this year. this is after tripling health insurance costs for a decade. the cost of medicare advantage is going down 4% this year. and there are a record number of companies participating to provide the services. so they're stl making plenty of money. and the cost of prescription drugs for the government are planned to be level. so these things are helping not just the government's budget, this helps allealth care. the united states spends 17.6% of its income on health care. no one else is even at 12%. they all insure everybody.

and they have better outcomes than we do. so i think it would be a huge miake to repeal this. i thk that there will be continuing opportunities to improve it, but the net effect of this is going to be over the next five to ten years, is to bring our costs closer to the costs of our competitors. which is great for us economically. and that will ma the debt much smaller than everybody thinks it's going to be now. >> you've done something very aggressive, put women and girls front and center. and you've got big money players coming here where the culture's very different. about women and girls. what do you hear from them? >> one of the most important things that's happening in t th middle east today uerneath the radar screen is a big women's movement. take saudi arabia, the most conservative of the cultures. for several years, there have been morene women than n in institututions of higher education. king abdullah himself built a university and nam it after himself outside the major cities

where women and men go to class together a the women are not subject to the same dress restrictions they are in many other parts off the country and don't get beat fun they're walking down thehe street talki to men. it's a very different thing. and i think what they're looking for is how to -- they'veotten this far, n nowhat they need t do is open the workplace. >> my thanks to president bill clinton. up next on "the walall stre journal report," one of the bright spots of the global economy lies just to the north. my disssion with canadian primime minister steven harper job creation north of the border. can one of america's best-known universities expand its brand? will stanford, cradlee of the tech industry, takake the show the read? take a look at how the stock market ended the week.

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welcome back. from the clinton global initiative, where leaders business, culture and politics are gathering to talk about the scenes of the international world. cooperation, the health ofof ou interconnected global economy, and the e global slolow-down. joining me is the prime minister of canada, prime minister stephen harper. mr. prime minister, thanks for joining us.

>> thanks for having me. >> let's first talk about what you're seeing in the world, sitting in new york with american leaders this week. six ceos as well as executives from the new york k stock exchae an goldmdman sachs encouraging invement in canada, also looking at the glol story. give me your assessment of the global stage and the economy. >> first of all, in tes of canada's role, we have contied and continue in forecasts tbe outperforming kind of the average or the pack i in the industrialized world. but we're obviously concerned about projections of slowing growthth. and we see those sks in the global economy. that remains our concern. i remain convinced that if we as leaders make the right decisions, we can continue to keep the economy growing and avoid recession. athis point, if we were to fall into recession, it would be strictly frankly through an accumulation of lack of confidence in tackling some of ththe big issues that are befor

us. i want to work with my fellow g-20 leaders to make sur we tackle those issues and keep moving forward. >> the international monetary fund, you're considered the bright spot along with germany, but even now, some rumblings about germany getting impacted. so what's your take in terms of avoiding growth coming down just as a result of the rest of the world? >> well, you know, i always say to nadians, i think canadians are realilistic about this. we can't expect to be on a completely different track than the rest of the world. if the global economy slows, the cadian economy is going to slow. whate can do is make sure we at least do better than the average and that we make some investments for the long-term. >> what do you think is most important in terms of creating jobs? how does an economy create job >> well, look. in canada, we try and create jobs by having, you know, a strong environment for business.

by having good regulations. certainly, regulatory certainty around those things. by having a government sectorr that is stable. you know, where we basically embrace balanced budgetsts. where we do that by tryino keep our tax rates low. as you know, we've been lowering business and other tax rates for some years in canada. the big challenge is our export market. that's where the global situation affected us. that's where the global slow-down is affecting us again. there are trillions of dollars sitting on the sideline throughout the western world. we've got to find ways in other economies to restore confidence and get that money back into t economy. >> you know, i want to talk about exports. nada, the biggest foreign supplier of oil to the united states -- >> i'm glad you know that. st americans don't know that. >> this is very important. we're talking about what saudi arabia does, but canada's providing twice what saudi

arabia is providing to the united states. tell me about the interconnectedness of our two economies when it comes to energy. >> in most sectors we are the two most integrated economies in the world. you ask me specifically about energy. i think what americans need to understand about the energy relationship with canada is not simply that t we're integrated d we're america's biggest energy supplier, but we arehe only country in the world that i a growing supplier of energy, that is a secure and dedemocratic country, and that's energy sector is based on market principles, ratherhan strategic objectives. and so we're not only the biggest partner of thee united states, we are far and away the most secure partner of the united states and the friendliest partner of the united states. >> as your fortunes rise there's an economic rivalry between the two countries on one level, because peoeople don't necessary understand how important the relationship is. >> well, between canada and the

united states, i mean, we and canada never see it as a rivalry. you know, we obviously have great pride in our own country and our differences with the united states. but beyond all else, we think we're extremely fortunate to have the united states as our friend and neighbor. it's one of the things -- one of the great assets our country has. and, you know, we believe that as -- the threats, i've said this before, security threats to the united states are security thats to canada. economic opportunities for the united states are economicic opportunities for canada. while of course individual businesses may have rivalries and there may be sues on which we disagree, first and foremost we try to work with our friends the united states, and my government tries to work with the obama administration. not just on bilateral issues and shared concerns but also ways we think we can be helpful to american leadership in the world. american leadership is so essential to this world on every level. strategic, military, economic as well. >> good to have you on the program.

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jobs and job creation, a major focus at this year's clinton global initiative in new york. can one of america'ss greatest universitys reinvent the jobs market in our country's largest city? stanford is the technology titan in silicon valley. now the west coast school wants to be live fromm new york. joining me is john henessey, presidenent of stanford university. good to have you on the program. >> glad to be here. >> thanks for joining us. you aring in new york in support of stanford's proposal l to bui an engineering school in new york city, specifically on roosevelt island on the east river. why new york? >> we think new york is the place where we can attract great talent, great faculty, great

students. in thehe end, creating an invation center, innovation hub, is about getting great people. i think new york is the place they want to come. they come to silicon valley for certain things but new york has its own setof attractions. >> there aren't many jobs in science, engineering in new york. will jobs follow if an institution like yours comes to new york and is built? do you think the m moneynd jobs come next? >> i think they go together hand in hand. you look at the history of stanford. it was ted tournin who got hewlett and packard togogether d told hem to start a company because sdents wanted to stay in california but there we no jobs. he created that as a way to build the economy and it worked. you can create that excitement, vibran vibrance. bringing in young people, young brains, those people who donon' realize they can't start the next yahoo! or google and

getting them to do it. >> why is this so critical now? we w were in russia earlier thi year. a number of technology companies trying to -- the government would like to have a silicon valley right outside of moscow rather what is all of a sudden attracting the russians, the chinese,e, you want to come to w york? why now? >> well, i think lots of people have understood the connection between a research university, especially one with an entrepreneurial bent, and economic growth and generational jobs and new companies. that's well-understood now. everybody wants to come to stanford and learn how they built silicon valley in five years. it's going to take anybody more than five years. my view is if wee don't create another viant innovation center in the u.s., it's going to happen outside the u.s. that will be a loss of jobs, opportunity, leadership, a critical sector that's critical not only for what it does in core i.t. but sectors that lower

reserve overlap. health ccare, finance, other sectors dependent on i.t. advances. >> money will go where it's trted best, right? what can governmentt policy dozn to encncourage th? why wowouldn't a company set up shop overseas? i think one of the big issues the administration's worried about, not only aren't those companies bringing all the money they're making overseas back to the u.s. because they don't wa to get taxed on it, they're setting up r&d facilities outside the u.s. and sending their best people there to go manage them, a brain drain as well. >> we need to get that money back in the country, and probably long-te tax reform is the way to do it so investment is made in this country and not abroad, don't give comnies a reason to invest abroad. reform is the key issue. we want to bring these people here, keep the best and brightest in this country and keep them contributing. >> stanford,, former students include larry paige, the foders of hewlett-packard, of course. what should we be doing now to

enhance education, to continu that kind of innovation? >> i think there are two things we really need to worry about. the k-12 level we need to worry about preparing students and preparing more of our students to be in scscience, mathematics those disciplines. we're not genering enough young people in those disciplines. there are lots of grgreat jobs there. at the higher education level we have to do a better job of preparing people for careers. if they want to be entrepreneurs why don't we teach them something about what we know about entrepreneurship, whwhat makes it work, so their odds of success are higher. >> how are students doing these days? what are you hearing as they seek to get jobs after graduation in this tough environment? >> i think better this year than last year. lots of students who are not in science and technologygy are dog internships. i think they're finding better opportunities than a year ago. long-term they've got challenges ahead but we're trying to educate t them so they realize going forward young people are going to have more than one job, maybe more than one career in their lifetime, they need to

rethink how constan learning, how do they move forward. up next on "the wall street journal report," take a look at the news this upcoming week that will have an impact on your money. how the beatles became the beatles. they got by with a little hehe on their frfriends. you can own a piece of that histy. it's w way to rewardrdou? airline go out of it shoululd. because loyaltis a two wayay street. and when one side gives, the other has to give baback. dicated redcoat customer service. more first class upgrades. mileles that don'txpire. this isn't benevolence ththis is our business. the nextxt time an airline asks for yours: ask them first, what they've done to derve it. today i own 165 ndy's restaurants. and i get my financing from ge capital. bubut i also g stuff that goes way beyond banking. we not only lend people money, we help ththem save it. [ juninior ] ge engineers found d ways to cut my energy u. [ cheryl ] more efficient lighting helps junioror stay open later...

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now a look at the stories coming up ithe week ahead that may move the markets and impact your money. monday thenation's realtors report the number of new homes sold in the month of august. tuesday, we get the case show home price imdetection. it tracks the housing market in 20 cities across the country. thursday, the government releases the final revision of second-qrter gross domestic product. currently showing a growth rate of less than 1%. friday, the latest figures on u.s. personal income and spending will be released. > finally, music lovers have something to sayabout this weekend. how you can own a pie of musical legends. >> one of the finest auctions tracing the history ofock 'n' roll is taking place this weekend here in new york city, containing more than 1,000 lots. six original paintings by jimi hendrix. elvis' very first guitar. held together barely by old masking tape. the astrid kercher beatles

collectiononsisting of nearly 1,000 otographs, negatives, and their copyrights taken by astrid kercher. started photographing em at a time when the were just a backup band. u can see what she saw. >> that's the show for today. next week my guest, ew york times" foreign affairs columnist tom iedman. where wall street meets main street. haveve a great week, everybody,