joining us-- diane swonk, chief economist at mesirow financial; and mike holland of holland and company. hi, diane, hi, mike. nice to have you with us. >> hi, susie. >> good to be here. >> susie: diane, let me begin with you. what's your take on japan. even though we don't have the acknowledge on the scope. do you think it will have an impact on the global economic recovery? >> there no question it will have an impact. the reaction to natural gas disasters always tends to be heavier. japan is not haiti. we'll see rebuild -- an interruption in economic activity, and some of the interruptions will be filled, like exports to china, by places to europe. and as japan rebuilds, last time with the cobi earthquake, we saw a lot of caterpillar equipment go to japan. and that's what happens, you have a loss in wealth, and that transfer of wealth to other countries as they rebuild. we don't know -- i think it is very important that the fed did not mention japan today because there is more that is unknown about what the effects of japan are going to be, than what is known. the fed didn't want to ad

. >> reporter: mesirow financial economist diane swonk agrees that raising prices on discretionary products and services in the current economy is a huge gamble. >> it adds to the unevenness of the recovery. in fact, we've already seen this in the consumer sentiment data, which showed that all of the improvement in the consumer sentiment in february came from among the wealthiest households who could care less about these higher energy prices. there was an actual deterioration in consumer sentiment among the poorest of households, who have already had to pull back at shopping at discount stores and any discretionary spending they had anyway. >> phillip thinks his business can shoulder higher gasoline prices even if they top $4.00 a gallon. but economists say in this fragile environment some small business may be forced to cut workers if prices keep climbing. diane eastabrook, "nightly business report," westmont, illinois. >> susie: here are the stories in tonight's n.b.r. newswheel: stocks closed higher after oil prices stabilized. the dow rose 96 points, the nasdaq added a point and the s&