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Issue Number One

Farmers' Market; The Not-So-Friendly Skies; Women in the Workplace; Midwest Floods Cause Concern for Food Prices

Aired June 13, 2008 - 12:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ALI VELSHI, CO-HOST: Inflation jumps by the biggest amount in six months.
Midwest floods could soon be responsible for the cost of goods going up for you.

Why the airlines are out of control and what it could mean for your next plane ticket.

Why women are not making progress in the workplace and what you can do about it.

ISSUE #1 is your economy. ISSUE #1 starts right now.

Hello and welcome to ISSUE #1. I'm Ali Velshi. Gerri Willis has the day off.

Well, from ISSUE #1 headquarters, to the CNNMoney.com newsroom, we are all over the stories that matter to you to today.

Gas prices up again today. Despite a drop in the barrel, in the price of a barrel of crude oil, according to AAA, the price at the pump up .6 cents from yesterday for a new record high, just under $4.07 a gallon.

Well, the domino effect of high energy prices quantified in the government's latest inflation report. The Consumer Price Index for the month of May shot up .6 percent. That's the steepest jump in six months. Prices are now 4.2 percent higher then were a year ago.

And the mortgage meltdown. Today's foreclosure report from RealtyTrac is staggering. There's no other way to put it.

The number of Americans losing their homes up a whopping 158 percent since May of last year. Foreclosure filings of all kinds up 48 percent in the same time frame. All indications we still haven't hit a bottom just yet.

Well, the Midwest battered by floods and reeling from deadly tornadoes. Iowa's governor and federal officials got a first-hand look at the flooding this morning.

CNN's Betty Nguyen is live right now in Cedar Rapids, Iowa -- Betty.

BETTY NGUYEN, CNN CORRESPONDENT: Ali, I'm standing here in a neighborhood that is not even supposed to be dealing with this. They are in a 500-year flood zone.

Take a look. You have street signs, you have houses under water. Where I'm standing looking at this yardstick, we are about a foot under water. And this is really nothing compared to what you see if you go about 19 blocks that way. That's where downtown is.

So, think about it, 19 blocks are already under water. To give you the big perspective, 100 city blocks are under water. This neighborhood is no exception.

Eighty-three of the state's 99 counties have been declared a disaster zone. Some 7,000 homes and businesses evacuated. That's 19,000 people just in those homes and businesses. And overnight we had the Mercy Hospital evacuate their patients because of all the floodwaters.

Now, to give you a number though that might really shock you, when we talk about this flood zone and we talk about this river, the Cedar River cresting, today they are expecting it to crest at 32 feet. The record is only at 20 feet. So we are 12 feet above record levels.

This is an epic-size flood. And in fact, it's hurting some of the utilities here, Ali, because the water department says if people don't stop using water as they normally would, they are going to see a shortage.

They are asking people not to take showers, not to wash their clothes. Only use water for drinking purposes only. And when it comes to the dollar amounts, we are looking at estimates somewhere around $500 million -- Ali.

VELSHI: Wow. And Betty, we are going to be feeling those effects elsewhere in the country because of the damage being done to crops.

Betty Nguyen, we'll stay on top of the story of the flooding in the Midwest.

These floods are causing a lot of headaches for shipping along the Mississippi River. What you may or may not realize is just how important the Mississippi River shipping lanes are.

CNN Senior Correspondent Allan chernoff is here with more on that -- Allan.

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Ali, 90 miles east of Cedar Rapids, we certainly have another big river filling up. The Mississippi. And it is at the point where a lot of the lochs simply cannot operate. When the river is so full, those lochs cannot move water in and out. And indeed, the Army Corps of Engineers has to shut them down and move the machinery away so it's not damaged.

So, yesterday the shutdown started. It started just south of Davenport, all the way down to just north of St. Louis. That's where we are going to be going. But let's have a look at the Mississippi. Yesterday, they shut down Illinois City all the way down to Canton, Missouri. Today, three more lochs are going to shut down a little further down the river. And we are going to get down to Saverton, Missouri.

And by Monday, we'll be shut down all the way to Winfield, Missouri. That is 300 miles of river that will not be navigable at all.

This has a major business impact here, because these barges that go up and down, they are massive, huge. A typical tug is pushing 15 barges. That is equivalent to 900 semi trucks. That just gives you a sense of just how much produce, petroleum, whatever you have on those barges, is being shipped. It is devastating for the tug owners. They say that they are going to be losing about $10,000 a day.

(BEGIN VIDEO CLIP)

LARRY DAILY, PRESIDENT, ALTER BARGE LINES: The coal that goes into power plants that generates electricity that runs your computer or your television, all of those things are going to have an impact from this. And that's part of the story you are looking at here. People don't realize what we are doing out here allows so much of our cost of living to be so much cheaper than it really could be.

(END VIDEO CLIP)

CHERNOFF: Lots of coal, no doubt about it, on those barges. That coal goes to power plants to create electricity. So far we have no signs of shortages. So people aren't going to be impacted in that way just yet.

The number one item on those barges, corn and soybeans. Most of it heading south, down the river for export. And this is really going to be affecting our trading partners.

A lot of this stuff going over to China. So they won't be getting so much of the feed stuff that they desperately do need.

Now, this also is going to be impacting other areas, as well. Ethanol, gasoline, but keep in mind in the Midwest, the bulk of the gasoline is actually transported through underground pipes. So, again, we don't yet have shortages of gasoline in the Midwest.

Also, this will be affecting building supplies. We've got steel, sand, gravel, all being shipped along the Mississippi. But again, because of the floods, building projects were going to be delayed anyway. So again, this is not going to make much of a difference.

But keep in mind, Ali, the river is going to be shut down in that area for at least two weeks. It's going to cost tens of millions of dollars at a minimum.

VELSHI: And like the corn, it's things that affect people elsewhere in other parts of the country. We may start to see this effect if it keeps on going on much longer. Allan, thanks very much for that.

We will of course stay on top of that story for you.

Well, Allan was talking about corn, and it's part of the reason America's cost of living continues to go up. Actually, there are so many reasons, according to the latest inflation report.

And that brings us today's "Quick Vote." CNNMoney's Poppy Harlow is here with today's "Quick Vote" question -- Poppy.

POPPY HARLOW, CNNMONEY.COM: Hey, Ali.

You know, folks, we talk about inflation a lot because it affects you in so many ways, especially at the grocery store. I know you have seen the price of staples like milk and bread and eggs all rising. It's happened at all types of grocery stores across the country.

Here is our question for you today. "I buy most of my food at grocery stores, big box stores like Costco, or organic stores, think Whole Foods?"

Weigh in on CNNMoney.com, and let us know what you are doing. We'll bring you the results a little later.

VELSHI: Can you bet which one I don't really do a lot of shopping at?

HARLOW: Any of them?

VELSHI: The organic. Well, actually, that's a good point. I haven't cooked in several years. Poppy, maybe I'll just not vote in that question.

All right. As Poppy said, inflation jumping higher. Gas prices setting another record. We'll see what the White House has to say about it.

Plus, why eating local could save you money and help the environment at the same time. We are all over issue #1 right here on CNN.

(COMMERCIAL BREAK)

VELSHI: All right. These are live pictures from Oakley Village, a seniors community in Columbus, Ohio. That is Michelle Obama making her first appearance of the campaign in Ohio.

Let's listen in.

(JOINED IN PROGRESS)

MICHELLE OBAMA, BARACK OBAMA'S WIFE: ... was, how would we make sure our family would stay intact during this process? I mean, you know, we love our girls, as many of you love your children, your grandchildren. And for us, making sure that we kept their lives whole and healthy was of the utmost importance to us.

And the only reason we are able to do this is because we've got this wonderful support system around us of people who love us and care for us. And number one on top of that list is my mom, who is 70 years old, and she finally retired, even though my older brother and I have been begging her since we started having kids. But she is retired and she's at home when we are on the road.

And I don't know, there is nothing like having grandma there. When you're a mother and you are working and you are busy and you are traveling, knowing that we have mom by our side and that those girls are being picked up from school and they are coming home -- and she does just what I'm sure you do. She treats them like queens, which I'm wondering, who is this woman?

(LAUGHTER)

OBAMA: Because they get ice cream all the time. They're jumping on the couch. I'm like, "You never let us do this." She said, "Yes, you weren't my grandchildren."

But -- and one of the reasons that my mother is able to do what she does is because she has the pension from my father who passed. He was a city worker, and she has Social Security.

We know that we couldn't be who we are today not just because of our family, but because we've got seniors in our lives. And the importance of having her there, instilling the kind of values that she taught us to our girls, is beyond measure. And Barack has experienced that as well. His maternal grandparents, Tute (ph) and Gramps (ph), were the backbone of his upbringing as his mother worked to finish her education as he was growing up.

So, I say all of this by way of introduction, because I want you to understand that in the Obama household, we know that we have to do the utmost to make sure that our seniors are whole and they're healthy and they're thriving. My mother is an active 70-year-old woman. She takes yoga, she runs -- she races the kids to the car and back.

The only reason she can do what she does is because she has an element of financial security. She has her health. She has insurance. And it makes the world to our family and to our society.

So we have a vested interest in the society to make sure that our seniors have what they need to not only live wonderful lives, but to continue to contribute to the generations that follow, because there's nothing that my mother dreads more, and she tells me this time and time again, is that she doesn't want to be a burden. That is the biggest fear that she has.

Of everything in life, she wants to add value to our lives. And I know that many of you here because you are active seniors are worried about the same things.

The man that I'm married to understands this. And he's going to fight for it. And he knows these issues inside and out. And I am so proud of the work that he's done his whole life, but in this election, he's just been a wonder to watch.

So it is my great privilege to introduce to you all the next president of the United States, my husband, Barack Obama.

(APPLAUSE)

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Thank you.

Well, I have to say, first of all, that listening to Michelle introduce me is a little bit like her watching her mother with our children. It's like, who is that person?

(LAUGHTER)

She never says such nice things about me at home. So -- but I revel in it. I really enjoy listening to her praise me like that, because when I get home she'll remind me I didn't make the bed.

And I'm so grateful for your hospitality and all of you taking the time to be here. Just, I want to give a special thank you to Governor Ted Strickland, who has done such a terrific job since he took the helm here in Ohio. He is somebody who just exudes sincerity and the values that have made this a great state and this a great country.

And so we're very proud of the work that he does. Please give him a big round of applause.

(APPLAUSE)

I want to thank Oakley Village for hosting us. It's a wonderful facility and an example of the kinds of facilities that should be available all across the country.

And finally, I had a chance -- because usually when I come here, I try to have a conversation before these meetings with at least one couple or a couple of people so that I can hear their stories. And it gives me an opportunity to not do all the talking and actually do some listening once in a while. And today we were joined by just a wonderful couple, and I am so grateful for them taking the time to be here, Ron and Jane Payne (ph) who are right here.

(APPLAUSE)

Ron is a United Methodist minister who is -- only has two weeks before his second retirement. So he's only got two sermons left. He's already written one, and we are looking forward to hearing the last one.

And Jane is a retired nurse. And they were high school sweethearts who now live back, after traveling all around the country and raising their children and now enjoying their grandchildren, they are now settled back in Union County, back in the town where they grew up and went to high school. Living in the house where Ron grew up.

So they are just a wonderful couple, and we are very grateful for them joining us.

You know, for generations -- what I would like to do, by the way, is just make some opening remarks, and then we'll open it up and have a conversation.

But as Michelle pointed out, you know, for generations we've worked to keep a simple promise in this country. Americans who work hard their entire lives have earned the right to retire with dignity and security. That's the promise that my grandparents knew, even though they came of age during the Great Depression.

My grandfather would go on to serve in Patton's Army, while my grandmother stayed home on a bomber assembly line. My mother was born in Fort Leavenworth in Kansas.

When they left Kansas to go out west to build their lives after the war, they did so with the confidence that Washington would help them reach a secure retirement. That was the promise that FDR made. And it was the promise that Washington kept for decades while folks like my grandparents moved through the ups and downs of life in America's middle class.

But today, Washington is not working to preserve this fundamental part of the American dream. A secure retirement is no longer a guarantee for the middle class.

All of us know that it's harder to save and it's harder to retire. You see it in your own children, I suspect, that having the bills paid at the end of the month and still have something left over to save is more difficult. The defined benefit retirement plans that so many people counted on aren't always there.

I was just talking to the governor, and he informed me that just this past week, he got news of approximately 12,000 jobs that are going to be lost here in Ohio. And these are all union jobs, which means that they all provided a pension. That's one of the few areas in American life where you can still count on a pension, as opposed to just a 401(k).

Those jobs are being lost. And if we don't act, the promise of Social Security will grow harder to keep. And that's why I fight every single day to extend the promise of a retirement that's dignified and secure as a United States senator, and that's why I'm going to fight to make sure that a secure and dignified retirement is there when I'm president of the United States of America.

Now, it starts with protecting Social Security today, tomorrow and forever. The Paynes (ph) informed me that about half their current income comes from Social Security. So obviously, they want to make sure that it's there for them, but they've also got three wonderful children who they sent through school and are raising their own kids. They want to make sure that Social Security is there for them, as well.

For millions of Americans, Social Security is the difference between a comfortable retirement and poverty. We have an obligation to secure the future of one of the most successful programs in our history. And that starts with talking straight to the American people about the challenges that lie ahead.

Social Security is strong, but as more baby boomers retire, as our population gets older, that means there are going to be more retirees and fewer workers to support the system. The long-term cash flow needs of the Social Security system are going to have to be addressed if we are going to make sure that Social Security there is for future generations.

Now, my opponent in this general election, John McCain, his idea on Social Security amounts to four more years of what was attempted and failed under George Bush. He said that he supports private accounts for Social Security. In his words, along the lines that President Bush proposed. Yesterday he tried to deny that he ever took that position, which leaves us to wonder if he had a change of heart or a change of politics.

But let me be clear. Privatizing Social Security was a bad idea when George Bush proposed it. It's a bad idea today.

It would eventually cut guaranteed benefits by up to 50 percent. It would cost a trillion dollars that we don't have to implement on the front end, permanently elevating our national debt. And most of all, it would gamble the retirement plans of millions of Americans on the stock market.

I mean, imagine if your Social Security right now was tied up with the Dow Jones. How would you feel when you woke up in the morning and you heard that the Dow had gone down 400 points? You wouldn't feel real confident about the stability of your nest egg. And that's why I stood up against this plan in the Senate, and that's why I won't stand for it when I'm president.

Now, Senator McCain's campaign went even further a few months ago, suggesting that the best answer to the growing pressure on Social Security might be to cut cost of living adjustments or to raise the retirement age. Now, when Ron and I were talking, they pointed out as it is, the cost of living adjustment doesn't seem to really keep up with the cost of living.

The notion that you would eliminate that means that in a slow, not so hidden way, your benefits are being reduced each and every year. Particularly now that we know that inflation is starting to rear its ugly head again with gas prices and food prices, price of prescription drugs all going up.

The notion that we'd raise the retirement age, I think if you talk to some of the workers who are unfortunately being laid off, particularly if they are in their late 50s or early 60s, if you've been working in an auto plant for 30 years, the idea that you are going to keep on working until you are 72 or 73, not on your own terms, not because you decide you want to be in the workplace, but because you have to keep food on the table or pay your electricity bills, that, I don't think, is our best option. I think there is another option that is fairer to working men and women. We have to protect Social Security for future generations without pushing the burden on to seniors who've earned the right to retire in dignity. So here is what I would do. Here is where I would start.

Right now the Social Security payroll tax is capped. That means most middle class families pay the payroll tax on every dime that they earn. But once you get to $102,000 per individual, then you are no longer paying the payroll tax. And what that means is that, while you, most of the people here, paid Social Security on every dime you've ever earned, you've got billionaires and millionaires who are paying only a tiny fraction, paying payroll taxes on only a tiny fraction of their income.

I've got a friend in Omaha, you may have heard of him, named Warren Buffett. He is worth $56 billion. You know, if he's only paying the first $100,000, that is .000001 percent of his income as he is paying Social Security. I may have lost a couple of zeros in there.

The point is it's negligible to him. It's not even noticeable.

Now, I think that's why the best way forward is to first look to adjust the cap on the payroll tax so that people like me, because I'm earning more than $102,000, pay a little bit more and people in need are protected. That way we can extend the promise of Social Security without shifting the burden on seniors.

And by the way, I think that we should exempt anyone making under $250,000 from this increase. So it will not burden the middle class. You know, anybody under $250,000 would not be affected whatsoever.

Ninety-seven percent of Americans will see absolutely no change in their taxes under my proposal. Ninety-seven percent. But what it does allow us to do is to extend the life of Social Security without cutting benefits or raising the retirement age.

Now, there was a time when John McCain thought this wasn't such a bad idea. When he was asked a few years ago whether he could see himself lifting the cap on the payroll tax, he said, "I could." But today he is attacking me for holding this very same position. So I'm looking forward -- John McCain has proposed serious debates. I'm looking forward to having them, and when it comes to Social Security, he might want to finish the debate with himself first.

VELSHI: All right. Presumptive Democratic candidate Barack Obama in Columbus, Ohio, addressing a senior retirement center on the economy right now.

You can follow the rest of that speech on CNN.com live right now. We'll be carrying it there. And we will drop back in if he says something that affects your money.

It is quite a time we are living in when it comes to your money. Inflation is up. Oil prices are at near records. Gas prices are setting records on a daily basis. Housing continues to be a big problem. When we go through a time like this, people across the country look to lawmakers in Washington for leadership. And one of the people charged with giving the president advice on his handling of the economy is Ed Lazear. He's the chairman of the Council of Economic Advisers, basically making him the White House's chief economist. He joins us now from Washington.

Mr. Lazear, thank you for being with us. Boy, do we have a lot to talk about.

It's just -- you know, we call it issue #1 here at CNN because it's the biggest issue. This morning, we hear inflation, 4.2 percent higher, the prices, than people were paying in America a year ago. And that is really, really affecting all of our viewers out there.

What's behind it and how does it stop?

EDWARD LAZEAR, CHAIRMAN, COUNCIL OF ECONOMIC ADVISERS: Well, absolutely. The big problem, of course, that we've seen over the past year or so is primarily energy prices. Food prices, as well. But primarily energy prices.

And that's eaten into the raises that Americans have been getting. So people are getting raises, but the problem, of course, is energy prices are going up at the same time.

Now, the only way to deal with that is through the standard methods. You either increase supply or you decrease demand. And we've initiated some polices to do that.

Fortunately, the president proposed these policies, Congress passed a number of them last year. And they will have an effect. But it's going to take some time.

In the short run, we are facing very high energy prices. And that is certainly a concern us to.

VELSHI: Some people would call it a crisis. And a lot of people wish that the government would deal with it as a crisis.

You take a really holistic approach and say, what do we really do to force people into conservation? And I don't mean necessarily driving a smaller car, or more fuel-efficient, but really, really developing alternative energy resources and using our taxes as a way to provide incentives to do that.

Do we not need a bigger approach than the government has already taken?

LAZEAR: Well, you know, the president has certainly been a major proponent of taking dramatic steps. In fact, the legislation that we saw last year passed by Congress was actually a step back from what the president proposed. We were actually more aggressive in what we wanted to do in terms of increasing supply and decreasing demand, but we think that the steps that have been taken are certainly positive ones. Again, though, you know, the problem is the long term versus the short term.

VELSHI: Right.

LAZEAR: And I think what people are feeling right now is very significant pressure from high prices that have come about in the past few months. And the kinds of policies that we've undertaken, while we think will be effective, do affect the long term.

There is not much you can do in the short term, unfortunately. We are in a world situation where we are competing for a very scarce resource, namely oil, with countries that are growing at a very rapid rate. If you've got supply at the same level and demand is increasing, that's going to drive up prices, and that's what we are feeling right now.

VELSHI: What about the idea of taking off the tax on the federal gas tax, 18 cents a gallon? Do you think that makes sense?

LAZEAR: Well, the president has -- you know, as you know, has always been in favor of cutting taxes to the extent possible. It's not clear that that would be the tax that he would look for in terms of stimulating the economy and helping consumers.

We believe that more general tax policies, more general tax cuts that help the individual and allow them to spend the money in the ways that they see fit are probably better targeted tax policies. But, you know, we are always in favor of thinking about keeping taxes low. And we would like to see the president's tax cuts made permanent.

We think that's probably the best way to help the American consumer. If those taxes go up, that's going to be a major hit to consumers in terms of their standard of living.

VELSHI: Let's talk about an area that you have a great deal of expertise in before you joined the White House labor. We have lost 324,000 jobs in this country since the beginning of the year. You tell me you are an economist. We are told by a lot of economists that we need to grow the labor force, the working force by 100,000 or more a year just to keep up with the increase in the working age population.

Is that true? And if so, we're digging ourselves into a big hole as we keep losing jobs.

LAZEAR: Well, you're certainly correct. The labor market declines are probably our primary concern. It's the reason that we initiated the stimulus package back in January.

When the president proposed that, things were still looking pretty good in terms of past growth patterns. But we anticipated that we would see problems down the road, and we were concerned about that. And that's why we initiated those.

Now, the good news is that, while the employment situation is not as good as we would like it to be, I'll remind you that it's still well below historic averages. So even where we are right now...

VELSHI: But the averages -- the unemployment rate of 5.5 percent is one issue. The issue is 324,000 people, fewer people, have jobs now than they did at the beginning of the year.

LAZEAR: Well, that is right. And that is reflected in higher unemployment rates. But again, the labor market right now is -- I would say it's basically flat.

You know, we don't like to see any job loss at all. But basically we are in a situation of a flat labor market. And that's the reason that we think we needed the stimulus package. The one thing I will tell you, and one of the most encouraging signs for us, is that we saw some recent news actually yesterday when retail sales came out. It looks like the stimulus package, there are some early signs that this may be working and working pretty effectively.

People seem to be spending the money. That's just what we anticipated. That's what we hoped would happen. And that should translate into higher demand and higher business activity, which translates into jobs. You know, sometimes it takes a little while for that to happen, but we expect it to happen pretty soon. I think most of the forecasters out there are expecting a better second half of the year, both in terms of economic growth and in terms of jobs.

VELSHI: Well, we'll be staying on that. We hope you come back and talk to us about it. Ed Lazear is the chairman of the Council of Economic Advisors, joining us today from Washington.

Thanks for being with us.

Coming up next, bag fees, fuel surcharges. Airline tickets just seem to be getting more and more expensive. How much more will we have to pay to fly? We're going to dig a little deeper into this for you and help you make some plans for your travel. You're watching CNN's coverage of issue number one, the economy.

(COMMERCIAL BREAK)

VELSHI: Well, the food you eat every day probably logged more miles in the past month than you have. Anywhere from 1,200 to 2,500 miles. And thanks in part to the record gas prices, the cost of food is rising. That's why a lot of folks are starting to notice some community agriculture programs that are popping up around the country.

CNN's Rob Marciano is live right now in Aspen, Colorado.

(BEGIN VIDEOTAPE)

JENNIFER CRAIG, UTE CITY FARMS: We're going to slide down here into the garden.

ROB MARCIANO, CNN CORRESPONDENT, (voice over): Jennifer Craig is part of a growing movement of agriculture. One that's steering away from the high costs of fuel.

CRAIG: The price of fuel is definitely going to shift the way we grow food. And I really hope that that's the case.

MARCIANO: While most U.S. produce travels an average of 1,500 miles from the farm to your table, Craig's crops are delivered within 15 miles of her ranch, using a fraction of the gasoline of larger commercial farms. And being that close to market also means ultra fresh products for the consumer.

So from the time we cut this, when is it going to market?

CRAIG: Well, it will be delivered this afternoon.

MARCIANO: Nice.

Fresh and easier to trace if you're worried about food safety.

JEROME OSENTOWSKI, CENTRAL ROCKY MOUNTAIN PERMACULTURE INST.: A one-liner for this week would be, do you know where your tomato is grown?

MARCIANO: Buying at a farmer's market puts the customer face-to- face with the person who grew the food.

UNIDENTIFIED MALE: I see it as -- that people really want an opportunity to connect with where their food comes from.

RYAN HARDY, EXECUTIVE CHEF, THE LITTLE NELL: So here we have some of the produce that we actually put into place on a daily basis here.

MARCIANO: Ryan Hardy grows it, buys it and cooks it. He's a farmer and chef at a local five-star restaurant.

HARDY: We're in our -- what we call the drip room. And this is where we cure all of our meats and cheeses and set aside some of our preserves.

MARCIANO: We've talked produce. We've talked dairy. But meats? You tell me these big pig legs are coming from a local -- coming from your farm.

HARDY: They are. They are.

MARCIANO: Organic or not, the hanging hams are a little creepy.

HARDY: These are really some of the most beautiful greens that we've been able to pull out of the gardens here recently. So we have things like -- local Swiss chard. Some of these turnips when they come out are just so fresh. I mean this has been ground less than a day.

MARCIANO: The color just jumps out at you.

HARDY: No, it really does.

MARCIANO: And if gas prices continue to jump higher, the small, organic farms will give the big boys a run for their money. (END VIDEOTAPE)

VELSHI: Well, Rob, I fancy myself something of an afficionado on foods. I was actually surprised to learn from your story that you're saying produce travels an average of 1,500 miles between the field and your home. So how do you know when you go to the grocery store where it's from or how far it traveled?

MARCIANO: Well, that's a tough call. And I was shocked by that number too. I mean unless you know, you know, where Dole gets its pineapples from, or Chichita gets its bananas from, you really don't know. But the U.N. (ph) kind of spurred an initiative to kind of put a label on foods possibly like a nutrition label. And it's called like a food mileage meter. And the folks at Iowa State wrapped up a couple of samples of maybe what it would look like in the future.

Say you have an apple from Iowa and you live in Iowa, it traveled an average 50, 60 miles. That would average low on the environmental impact meter. But if you were to get the grapes in the wintertime from Chile, got to get on a boat, got to get on a truck, that's over 7,000 miles of travel. That would rank high on the environmental transportation impact meter. So maybe those labels will come out going forward.

But certainly with the price of gas going higher, these smaller growers are getting a little bit more competitive with the mass production. And you get, in general, better tasting food, less in the way of chemical fertilizers. And here it just so happens that this weekend the Food and Wine Classic here in Aspen, they're celebrating this type of program as it begins to spread and take hold as a growing trend across the country.

VELSHI: Well, don't let me keep you any longer, Rob. You look like you're having a good time out there. It's a beautiful place. Look forward to seeing you again in person.

Rob Marciano in Colorado.

Coming up, the airline industry is in crisis mode and you are bearing the brunt of it.

But first, breaking news from the "CNN NEWSROOM." Here's Don Lemon.

DON LEMON, CNN CORRESPONDENT: That's right, Ali, we are following developing news from North Carolina this hour. The Associated Press is reporting two people have been killed in a shooting at a soda bottling plant that's in Concord. That's just outside of Charlotte.

We have some new video in just from the scene. Take a look at it. There it is. That shooting. It happened at the Sun-drop Bottling Company and police say the shooter ran. They are searching the area with dogs and helicopters and we'll bring you more on this as it becomes available at the top of the hour right here in the "CNN NEWSROOM." We'll have that breaking news for you. And concerns over the space shuttle have eased over the last hour or so. NASA is now downplaying the debris spotted floating away from the space shuttle Discovery. NASA says it appears to be a thermal clip from the brake system. Now initially it was feared that the mystery item could be a crucial piece of the shuttle and increase the dangers of re-entry. As it stands now, the problem is not expected to affect tomorrow's planned landing.

I'm Don Lemon. I'll be back at the top of the hour right here in the CNN "Newsroom" with the latest on the flooding in the Midwest and also that breaking news coming out of North Carolina.

Now let's throw it back to Ali in New York.

Ali, take it away.

VELSHI: All right, Don, thanks very much and we'll get back to you if there's any more developments on that story.

Look, it has been 24 hours of craziness in the airline industry. First, American adds yet another $20 fuel surcharge. Then the others follow. They pile on. Then Continental cuts capacity. United, U.S. Airways go along with that $15 fee for the first bag you check, which American started on Sunday, by the way. And to top it all off, U.S. Airways decides it's also cutting capacity and staff along with it.

I mean that's a code word for there are going to be fewer planes and fewer people working. It is plainly obvious, folks, the U.S. airline industry is flirting with crisis mode. Rick Seaney is the CEO of farecompare.com. He often keeps us up to speed on what's going on.

Rick, I know, to you, it's probably getting same old, same old. But we have seen 19 airfare increase attempts since the beginning of this year. This was the 13th one that succeeded.

RICK SEANEY, CEO, FARECOMPARE.COM: That's correct. Nineteen attempts this year, 13 succeeded. Last year we had 23 total. So we're on pace now for well over 40 if we continue on this pace. And I don't see any end in sight if we don't see any change in the fuel cost.

VELSHI: And the bottom line is, this is a percentage increase or it's $1 increase in terms of what we pay for travel. Everybody I know, including myself, who has booked a ticket, thinks about what they paid to go to Chicago or Cincinnati or L.A. several months ago or a year ago. The change is significant.

SEANEY: It is definitely significant. It depends on which city you live. I mean, if you live in a bigger city and you're traveling to a bigger city, the change is a lot less than if you're in a smaller city, going to a smaller city or a bigger city to a smaller city, but it's significant everywhere. Just in the Dallas area, we were just doing some data the other day and it's up 40 percent since the beginning of the year. And that's not unusual for many cities across the country. VELSHI: U.S. Airways, which for some time sort of led the charge in silliness, although these days you really can't pin it on one airline, they're now going to start charging money to get non- alcoholic beverages in coach on a domestic flight.

SEANEY: That's right, $2 for Coke. Basically, every step of the process is going to have some sort of fee on it by the time we're all said and done. I was hoping the airlines would -- at least some of them, would wait a little bit because this $15 first check bag fee is going to cause some delays at TSA, it's going to cause some departures to be delayed because of gate checking of bags. I was hoping to see if they would do -- see the fallout of this fee yet. I think we're all going to see it and it's going to be a madhouse for the first few months.

VELSHI: Rick, Southwest Airlines remains one of the few airlines that has not been tacking on these extra fees. They still manage to keep some of their prices lower, although not across the board. What does Southwest do that the others don't?

SEANEY: Well, I think it starts with being, you know, at the very core, a low-cost airline. They have a very good cost structure from a business standpoint. They have good relationship with all their employees, which most of the legacy airlines don't have. They have the benefit of some really good fuel hedges this year and even going into next year. And I just think that it's just a better run company overall and that's why they have been profitable for years while the other airlines have struggled.

VELSHI: Your warning then to people is, if you're planning a trip, do it now because you're expecting more of these airfare increases?

SEANEY: I just got through doing a special on getting ready to buy tickets for Thanksgiving and for Christmas because the bottom line is, is that prices are going to go up and you need to be stopping early. Change your habits. Start shopping early and you'll get a decent deal, not a great deal.

VELSHI: I wish I could tell our viewers that you're probably wrong, but your history on this doesn't end to be wrong.

Rick Seaney, the CEO of farecompare.com.

Thanks very much for being with us, Rick.

SEANEY: Sure. Thank you, Ali.

VELSHI: All right, get ready everybody, they are back. Zain Verjee, Tom Foreman, Jamie McIntyre. They're not racing to work this time, they are shopping and they're trying to save you money.

ISSUE #1 continues on CNN in just a moment. You are not going to want to miss this. Stay with us.

(COMMERCIAL BREAK) VELSHI: Now once it got started, it was all over. Jamie McIntyre, Zain Verjee, Tom Foreman. They're going to get their own show one of these days. First they raced to work to see which costs less. Then they tried various forms of carpooling. Now in an unprecedented move, all three are actually shopping for food, on their own, all in the name of saving you money. Check it out.

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT: If you've been to the grocery store lately, you know pretty much getting groceries involves taking out a loan. So I'm going to go to my local store and do the best I can to get a bang for my buck.

ZAIN VERJEE, CNN CORRESPONDENT: While I'm going to be going to Whole Foods and look for the healthy, organic stuff.

JAMIE MCINTYRE, CNN CORRESPONDENT: And I'm going to try to save the American way by buying big in bulk at my neighborhood warehouse store.

Should we synchronize our lists?

FOREMAN: Yes, let's do it.

MCINTYRE: Milk, bread, cereal, meat, eggs, cheese, veggies, crackers.

VERJEE: Soda, desert and a prepared meal.

FOREMAN: All right. Let's go.

MCINTYRE: Let's go.

VERJEE: See you back at the bureau.

MCINTYRE: OK, we're here at Costco. It's a warehouse store. And we're going to save a lot of money. Milk, $3.09 a gallon. That's cheaper than gasoline.

FOREMAN: Two percent for $3.79.

VERJEE: I see some skim milk. This costs me $3.89.

MCINTYRE: Two packages of 18. So $3.99. Pretty good deal.

VERJEE: Twelve eggs, $3.89.

FOREMAN: Medium eggs here for $1.89.

VERJEE: Could I try the oldest cheese you have here?

MCINTYRE: The average grocery store, you buy cheese if you want to make something. Here you buy cheese if you want to build something out of cheese.

VERJEE: $29.99 a pound?

FOREMAN: Man, look at all these cheeses.

VERJEE: And who can resist trying the aloe vera face and body lotion?

MCINTYRE: That's hot.

VERJEE: Now why did you put it in your mouth when I told you it was hot?

MCINTYRE: Oh, it's good too.

What are these? Spinach and Feta cheese. Mad crock energy drink. Sounds good.

One great thing about these stores is they have some great speciality items, like this white chocolate pentagon (ph). The beat I cover, Zain and Tom will find nothing like this.

FOREMAN: And so we're all finished. How did you do?

MCINTYRE: Well, Costco is a marvel, but -- and I got some great deals, but I had to buy more than I wanted of some things. But a sort of limited selection compared to what I had here. I've got sort of all-American shopping here. Good buys on a variety of items.

VERJEE: You got bulk, you got variety, but I got the most healthy foods.

FOREMAN: What did you spend overall?

MCINTYRE: $95.24.

FOREMAN: Not bad. $64.38.

VERJEE: $80.09. Pretty comparable.

MCINTYRE: All right. So I paid the most. But on the other hand, I got the Belgian chocolate pentagon. Can you go wrong with that?

FOREMAN: Let's eat.

(END VIDEOTAPE)

VELSHI: All right. And Tom and Jamie join us live. I don't know what you did with Zain, but I think after she just made that comment about pretty comparable, she seemed to have a very different assortment than the two of you had.

You know, Jamie, I go to Costco when I can, but I live in a little place in Manhattan. Everything always spoils. So I save money, but I never get to eat it all.

MCINTYRE: I mean we run the risk of looking a little out of touch. Obviously everyone knows you can get some really good deals here at Costco. By the way, it's really hopping here. It's the Friday before Father's Day and the place is packed.

But, you know, we also found out that you can easily wreck your budget by just making a few impulse buys. And, boy, this is the place where there's a lot of things you can buy on impulse.

VELSHI: Like that pentagon that you bought.

Tom, yours is probably the most traditional way people continue to shop in this country, a regular grocery store where all that variety is there. Did you sort of -- anything surprise you about the normal way we do things? And is it changing much?

FOREMAN: Well, I think what surprised me more, Ali, is I've shopped in the alternatives that we talked about in this show as well, too. But I went to my neighborhood giant store, it's a big chain out here. And the truth is, by being careful with my shopping, by looking for the best price, I felt like overall I got the best selection at the best price. I know I can go to a big box store and overall, if I know what I'm shopping for and I'm careful about that, I can overall save more money, but I spend money to get there, too.

VELSHI: All right. You guys heard it from me first. You guys are going to get your own show somewhere. So I want you to stick around with us and I want to know what's next. And, by the way, I want to tell our viewers, if you've got an idea about what these three can come up with next, to try and understand how you spend your money and how you live your life, send us an e-mail at issue1@cnn.com.

You guys worked out the next plan yet, Jamie, or are you still thinking about it?

MCINTYRE: Well, I pitched an idea that Zain, Tom and I each go to a different Caribbean Island for a week and compare costs but somehow the management didn't buy off on that.

FOREMAN: Zain can't do that. She's taking on a second job to pay for her cheese bill.

VELSHI: The oldest cheese in the place. I will recommend to management that we send you off on a vacation to see who did the best. Great, guys, thanks very much. Jamie McIntyre and Tom Foreman, and Zain Verjee who we -- who I (ph) currently is still eating her cheese right now.

Still ahead, why women are not earning as much as men are and what can be done about it.

Stay with us. You're watching ISSUE #1 right here on CNN.

(COMMERCIAL BREAK)

VELSHI: Well it's 2008. You'd think women were succeeding in the work place better than ever. Well, you would be wrong. Last year, women earned less compared to men. About 80 cents to the dollar. Well, what are they doing wrong and how can women help set themselves apart from the pack? Well, Sharon Hall is from Spencer Stuart Consulting. It's one of the largest executive search firms in the world. She joins us now from Atlanta.

Sharon, this is something that continues to sound novel when we discuss this in the news. But the news on it doesn't change. Women are not succeeding in the way that you would think after all these years that they are when it comes to earning as much as men do.

SHARON HALL, SPENCER STUART CONSULTING: That's exactly right. It takes quite some time for women to catch up given the setbacks that they began with. What we're finding now is that women have basically stalled in terms of their earning power in relationship to men. So not necessarily decreasing, but stalling and hopefully improving over time.

VELSHI: All right. Now is this structural? Is this something society has to deal with or government has to deal with or are there things that women, who might be watching this, are able to do to try and make up for that gap?

HALL: I think that there are some things that are societal and there are some things that are structural. But there are things that women can do to make up the gap, as well. Women need to understand where they are in their career and what their alternatives are outside.

We don't always take the time we should to look outside of our current industry sector, our current company or our current job. When we understand the opportunities that are out there, sometimes we're very -- much more clear about our market worth and then we can be more confident about making moves to access that market worth.

VELSHI: Are there options, are there industries, are there places in the working world that are generally much better in terms of how they compensate women right now?

HALL: Professional services happens to be one. I am in professional services. And what we do find is that women in professional services don't have all of the traditional barriers to the glass ceiling and the top rung as they are in corporate. We have a lot more freedom with regard to the sectors we work in, the clients we serve, the people we work with. And that freedom sometimes does remove that barrier.

VELSHI: What do you think women can do to set themselves apart when they are looking for a job to make sure that they don't start off in a pay category that's too low?

HALL: We still don't network enough. We still go to work, do our jobs, hope to be promoted. We need to get out from behind the desk, do the networking, meet people who can help us in our careers, advise us in our careers. Other things we don't think about as much are publishing, which is very easy to do these days, and public speaking. VELSHI: Very good idea. In fact, these are the kinds of things that make up for what we constantly hear of as the old boy's club. The thing that men do much more naturally in the work place than women have been able to do in the past few decades.

HALL: That's exactly right. And I would add one more, golf.

VELSHI: Good idea.

All right, Sharon, great to talk to you. Thank you for joining us.

Sharon Hall is with Spencer Stuart Consulting, joining us from Atlanta.

Well, make sure you are heard. Log on to cnnmoney.com and click on the Quick Vote. The question today is, where do you buy your groceries. The result is coming up next.

Stay with us. You're watching ISSUE NUMBER ONE on CNN.

(COMMERCIAL BREAK)

VELSHI: Where do you buy most of your food? That's today's Quick Vote question. Here's how you voted. Seventy-four percent of you buy it at grocery stores. Nineteen percent at big box stores. Seven percent at organic stores.

Well, the economy is issue number one. We at CNN are committed to covering it for you. ISSUE NUMBER ONE will be back here all next week, same time, 12:00 Eastern, right here on CNN.

Stand by right now for breaking news in the CNN "NEWSROOM."