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ISSUE NUMBER ONE
Energy Ad Dollars; Evaporating Desert Jobs; FT/Global Insight Report; Protect Your ID Online
Aired August 11, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CHRISTINE ROMANS, CO-HOST: The debate over nuclear energy, and if it's the future of your energy.
Why all of a sudden prescription drug prices are skyrocketing.
And important information about protecting your identity online.
Issue #1 is your economy. ISSUE #1 starts right now.
From the ISSUE #1 headquarters to the CNNMoney.com newsroom, we are all over the stories that matter to you.
Welcome to ISSUE #1. I'm Christine Romans. Gerri Willis is off today.
Prescription drug prices are a concern for so many of you. Why the drug companies are jacking up prices and doing so without you even knowing.
More and more Americans are losing their jobs. We'll show you where some are turning for their next check.
And why small cars are hot again, hotter than they've been since the 1980s.
Al Velshi, one of the big stories today, talk of manufacturing on the campaign trail.
ALI VELSHI, CO-HOST: Manufacturing declines in this country are not something new like these housing declines. This has been going on for a while.
Presidential candidate John McCain is in Erie, Pennsylvania, this morning to tour a General Electric plant. By his side is former Governor Tom Ridge, who grew up in Erie, and he's considered a likely contender in McCain's veepsakes.
Joining us now from Washington is CNN White House Correspondent Ed Henry.
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Ali, good afternoon to you.
John McCain in Pennsylvania today, just back from Ohio, and later this week he's going to Michigan. The point there, he realizes that this presidential election very well may be decided by all these rust belt battleground states, and that's why he realizes as well they have all been hard hit by the loss of manufacturing jobs.
So he wants to make a sales pitch about his economic plan, which is geared in large part towards cutting taxes for corporations, try to make the pitch that can help boost the economy and can trickle down to individual workers. He also has a tough sale on free trade. A lot of these workers at GE plants, other plants across the country, skeptical if free trade can help them.
And finally, also, John McCain borrowing some language from the Iraq War debate, using the word "surge" to say he now wants a surge of jobs to try to rebuild this economy.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We have to have Republicans and Democrats standing together and saying we're going to fix the problems that affect America. But obviously our first priority has got to be to restore our economy. As I mentioned earlier, jobs and jobs and jobs and jobs, and that, to me, is our greatest priority.
(END VIDEO CLIP)
HENRY: Now, did you catch that? He said "jobs" obviously no less than four times in a row.
He realizes that he needs to stay on message about the economy, literally there in that case. And with Barack Obama on vacation in Hawaii right now, John McCain senses an opportunity all this week to hit some of these battleground states and talk up what is issue #1 for voters all across the country -- Ali.
VELSHI: Ed, we think back to the primaries in Ohio and Pennsylvania, and how back then Hillary Clinton and Barack Obama were sort of stepping over themselves to be further away from free trade. John McCain, as you said, is an avowed free trader.
Any response right now from the Obama camp about the economy on this particular push that McCain is doing? Are they able to push back on him?
HENRY: Sure, absolutely. Even with Barack Obama on vacation. Obviously, the staff is still working.
The Democratic National Committee putting out what they call Web ads, attacking him as what they've now dubbed him, as "Job-Killing John." They're claiming that a lot of his economic policies essentially would hurt workers.
They're specifically zeroing in on the fact that some of his campaign advisers are lobbyists who they charge have basically pushed for mergers and other things that have displaced American workers. The McCain camp insists that lobbying work has actually not hurt the economy. You're going to hear that back and forth between now and November.
HENRY: But even with Barack Obama on vacation, the Democrats will be pushing back on this speech for sure -- Ali.
VELSHI: Ed, good to see you, my friend.
HENRY: Good to see you.
VELSHI: We'll talk to you again.
Ed Henry, part of the best political team on television.
At ISSUE #1, we are keeping an eye on the things that affect your bottom line. And a big item is gas prices, of course.
Motorists are seeing a bit more relief. Gas prices have dropped again. According to the AAA, the national average now $3.81 a gallon, down about a penny from yesterday, and about 15 cents in the past two weeks.
Gas prices have fallen steadily for about 25 days now, largely attributed to a drop in oil prices. The price of a barrel of crude has fallen more than $30 from its peak of $147 in July. Right now, oil is down a bit again today, to just over $114 a barrel.
ROMANS: OK. Gas prices are going down, but there's still talk about alternative energy, and the buzz about nuclear energy is as big as ever.
CNNMoney's Poppy Harlow is back from vacation, here with our "Energy Fix."
We talk nuclear. It can be very, very contentious.
POPPY HARLOW, CNNMONEY.COM: I think the word itself carries a lot of negative connotations.
HARLOW: But it is considered relatively safe. But we'll get to the safety issue in one minute.
A lot of people out there touting wind and solar energy as the fix for our nation's energy demand. Others say those sources, they're simply not reliable or robust enough.
That has many, including presumptive Republican nominee John McCain, calling for more nuclear power. After all, it is clean, it doesn't produce any greenhouse gasses, it's pretty reliable. And of course, you don't need the sun to shine or the wind to gust for it to work.
And France, that country gets more than three-quarters of its electricity from just 59 nuclear plan in the country. It is the size of Texas. It makes so much energy out of that, it actually sells electricity to its neighbors, like Germany. And here in the U.S., there are 104 nuclear plants, but they produce only about 20 percent of our power.
Also, a nuclear plant -- a new nuclear plant has not been built in this country since the 1970s. That's why John McCain is calling for 45 new ones to be built by the year 2030. Barack Obama says nuclear power must be part of the equation, but he's not as aggressive about building new plants as McCain is -- Christine.
ROMANS: Proponents of nuclear like to look at France as sort of a model for using the technology safely and efficiently, but a lot of folks here, they say, not in my back yard. And they think nuclear and they think Three Mile Island.
HARLOW: Yes. I was just actually traveling in Europe, where so many countries rely on nuclear energy. It's not just France. But again, American are very concerned because of what happened on Three Mile Island.
The nuclear industry, though, points out there has not been a U.S. death from nuclear power ever. The French haven't had an incident either, but, of course, the Soviet Union did. Think Chernobyl in 1986. So the potential is there.
Safety, though, not the only issue. Nuclear plants are very expensive to build. They cost about $6 billion to $8 billion a pop. That's about four times the cost of a comparable coal plant.
Also, there are some concerns about what to do with the nuclear waste that is produced. And, of course, Christine, I think one of the fears is it's a potential target for terrorists, right?
ROMANS: That's right. So -- which brings us to our "Quick Vote."
HARLOW: Yes, our "Quick Vote" question.
We're talking today all about gas prices. That's the "Quick Vote" question today. Talking about 25 straight consecutive days of falling gas prices. We still stand at $3.81 a gallon, so we want to know, what would it take for you to switch your set of wheels?
Here is our question for you today: "It is worth it for me to buy a hybrid if I save $100 a year, $500 a year, $1,000 a year, or I'm not interested in buying a hybrid."
Please let us know on CNNMoney.com. We'll bring you the results later in the show.
All right. Poppy Harlow.
VELSHI: Poppy, good to have you back.
HARLOW: Oh, thanks, Ali.
VELSHI: Prescription price explosion, how drug companies are getting away with it and what you can do if you can't afford your medicine.
Plus, the bickering over who has the better energy plan, it's playing out in your living room. Wait until you hear how much the presidential candidates and others are spending just to win your vote on energy.
You're watching ISSUE #1, right here on CNN. Stay with us.
VELSHI: Well, you probably remember the Exxon Valdez oil spill in Alaska. It actually happened 19 years ago, and folks there say they're still suffering. And a recent Supreme Court ruling didn't help.
CNN's David Mattingly takes us to a town that actually has too much oil.
DAVID MATTINGLY, CNN NATIONAL CORRESPONDENT (voice-over): The vast beauty of Alaska's Prince William Sound is more than 4,000 miles from the halls of the U.S. Supreme Court. People here wish it had stayed that way.
(on camera): What did you think of the Supreme Court decision?
LOU BEADRY, COMMERCIAL FISHERMAN: I thought it sucked. I thought it was unfair. I thought it was politicized.
MATTINGLY (voice-over): Slogged by the Exxon Valdez oil spill 19 years ago, commercial fishermen say the catch hasn't been the same since. An Alaska jury in 1994 ordered the company to pay spill victims $5 billion. The Supreme Court, however, in June, slashed that to just over $507 million.
UNIDENTIFIED MALE: There ain't no justice left in this country, period.
MATTINGLY (on camera): In the days before the spill fishermen say these docks used to be just alive with activity, with boats constantly coming in and going out. But now, because fishing has become so hit or miss, you have entire weeks just like today where these docks have become one big silent parking lot.
(voice-over): Prince William Sound might look as pristine as ever. The residents say evidence of the spill is easy to find. We took a float plane across the Sound to an island inundated by the '89 spill. All it takes is a shovel to find that oil is still there.
MATTINGLY (on camera): This just looks like mud, but it still has a very oily smell to it, almost like tar. (voice-over): Residents say this oily film is a reminder of an environmental and economic disaster that refuses to let go.
KEVIN O'TOOLE, FISHERMAN: And what that Supreme Court ruling said to me is that, you know, hey, you're just -- you're just the cost of doing business.
MATTINGLY: Former commercial fishermen Linden and Kevin O'Toole say that Exxon gave them some money for their losses the first couple of seasons after the spill. But not in the hard luck years that followed.
LINDEN O'TOOLE, CORDOVA RESIDENT: The thing is, though, we probably lost an average of $50,000 a year in income. We are permit devalued. We paid $300,000 for our permit. We had to sell it three years after the spill for $47,000.
MATTINGLY: The O'Toole's say the $15,000 or so they think they might get after the Supreme Court decision won't be enough to get them back into commercial fishing. At the Cordova docks, frustration rises and falls like the tide.
(on camera): Is this disaster ever going to go away?
DAVID JENKA, CHARTER BUSINESS OWNER: Probably not. No. There'll be something of the human impact, the environmental impact, stained for our lifetimes, at least.
MATTINGLY (voice-over): After the court ruling, a spokesman for Exxon Mobil called the Valdez spill a tragic accident and said the company had already spent $3.4 billion in the aftermath. But fishermen here say they will forever remember the spill as the day they went from thriving to just surviving.
David Mattingly, CNN, Cordova, Alaska.
ROMANS: A reminder. I think Ali, that our quest, our thirst for oil and for energy, can sometimes be ugly and sometimes be very, very dangerous.
VELSHI: It has consequences. Well, one of the things that's interesting is that when I was in Alaska just a few weeks back, at ANWR, you know, the Alaskan population, even though this had been so close to home, is really split on the idea of drilling for oil in ANWR, because they do get some money out of this. You know, Alaskans get money as a result.
ROMANS: That's right.
VELSHI: It's a wealthy state as a result of that. So it's always this battle: We need more oil, the money is good, but it can be dangerous. It can hurt the environment.
ROMANS: Now, have you ever heard of jatropha? VELSHI: Somebody -- I heard somebody talking about it.
VELSHI: It's a way to get oil, or a way to get fuel.
ROMANS: That's right. It means doctor food. And some are banking on it as a cure for our dependence for diesel fuel.
VELSHI: CNN's Susan Candiotti has a look at it.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): The fruit's the size of golf balls, and grows on trees some 25 feet tall. But the prize is what's inside the shell, and you don't want to eat it.
ROY BECKFORD, UNIVERSITY OF FLORIDA: These are chock-full of oil.
CANDIOTTI: Black seeds, the size of garlic cloves, contain oil that can run diesel engines. Without any refining, jatropha can power diesel cars and trucks and tractors, either straight, or at 20 percent blend, stretching regular diesel.
University of Florida researcher Roy Beckford is looking for the best strain of jatropha. On average, a tree yields only a gallon of oil each year.
BECKFORD: In the next four or five years, I think we're going to get to the point where we're not only going to increase the number of fruits per jatropha tree, but we'll also increase the amount of oil in each of those seeds.
CANDIOTTI: China and parts of Africa all are heavily investing in jatropha as an alternative biodiesel fuel. In the United States, researchers and farmers have only just begun testing it. In Florida, jatropha stands up to insect attacks, drought, frost, and lousy soil.
(on camera): Scientists stuck this plant right in the middle of a foundation where a house used to stand, so you can see the concrete is still here, the roots are growing. It's just dirt and rocks down here, and yet the plant appears to be thriving.
BRYAN BEER, CITRUS FARMER: We were always so dependent on oil.
CANDIOTTI (voice-over): Citrus farmer Bryan Beer also wants in. Driven by exploding diesel prices, Beer is growing 75,000 plants on 30 acres. The oil could help power his tractors that each inhale 120 gallons a day during peak orange harvest.
BEER: Any kind of relief or help that we can get from a cheaper source of oil could impact the agricultural industry tremendously throughout the country, throughout the world.
CANDIOTTI: Planes could be next. Air New Zealand is planning a test flight this fall powering one of four 747 engines on jatropha.
Susan Candiotti, CNN, LaBelle, Florida.
ROMANS: In stead of money growing on trees, oil growing on trees.
VELSHI: That is -- that's a very interesting story. We'll have to stay on top of that one.
VELSHI: Listen, drug prices, you know about this, too. They are skyrocketing. How drug companies are getting away with it and what you can do if you can't afford your medicine.
ROMANS: Plus, small cars are making a big-time comeback, one not seen since back in the 1980s.
We'll tell you about that next.
You're watching ISSUE #1.
VELSHI: Well, if they can build them, buyers will come. Small car sales are growing in the United States and could hit three million. Ford and General Motors say small car sales could increase more than 10 percent from last year.
Market analysts say the new trend shows how seriously American consumers have reacted to high gas prices. But many question whether it will remain strong if gas prices continue to fall. Well, undeterred, GM, Ford, and Toyota say they're cranking up production to meet the expected demand.
ROMANS: Prescription price explosion. A new study says the cost of many medications could double this year, and some drugs used exclusively to help babies and children with cancer are seeing increases of 1,000 percent.
We're joined in Atlanta by Medical Correspondent Elizabeth Cohen.
Is that true, 1,000 percent, doubling overnight in some cases?
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Oh, more than 1,000 percent, Christine, actually.
This was a study done by the University of Minnesota, and they found that many drugs went up all at one time. In other words, not slowly over a period of time, but one change sent them up more than 100 percent.
Take a look at these numbers, sometimes way more than 100 percent. For example, at one point the drug Acthar went up more than 1,300 percent all at one time, all in one day. A drug called Indocin, which is used for inflammation, went up nearly that much.
Norvir, an HIV drug, all at one time, with the snap of your fingers, basically, went up 400 percent. And Cognex, a drug used to treat Alzheimer's, went up 100 percent. In other words, that price doubled all at one time.
Well, what do the pharmaceutical companies have to say about this? They say that these that I just showed you are unusual. They said, overall, in 2007, prices only went up 1.4 percent.
They said medicines that help treat rare diseases are sometimes the exception because they are often more costly and risky to develop and manufacture. These types of increases are rare exceptions and not the norm -- Christine.
ROMANS: The pharmaceutical industry typically says it has to recoup its research and development costs.
COHEN: That's right.
ROMANS: With some of these rare drugs, that could be tough to do.
What about the prescription drugs that are more commonly used?
COHEN: You know what? We're seeing some pretty incredible hikes there as well. Now, not all at one time, but some dramatic increases over a period of years.
Let's take a look at some drugs that people probably have heard of.
For example, over a five-year period, Ambien went up 160 percent. Not as big as what we just saw, but certainly higher than the rate of inflation. Advair, an asthma drug, the price for that went up 53 percent over five years. Lipitor, the price for that went up 30 percent from 2002 to 2007. And Nexium during that time went up 30 percent.
ROMANS: Elizabeth, what do you do if you can't afford your prescription drugs right now?
COHEN: You know what, Christine? If you have an unusual disease, and there really is only one drug that can only help you, you can go to the pharmaceutical company and ask for help.
Now, if you have a more common ailment like high cholesterol, you can say to your doctor, hey, this price is -- this drug is getting kind of pricey. Is there another drug that's less expensive that will also help me?
And there are Web sites you can go to learn how to do exactly these two things. Go to CNN.com/tips, and we'll tell you exactly where to click to get help from pharmaceutical companies and to find cheaper drugs.
ROMANS: All right. Elizabeth Cohen. Important information.
Thank you, Elizabeth.
VELSHI: Well, coming up next, what the candidates are saying about our energy crisis and how they plan to fix it in their own words.
Plus, what the candidates and other organizations are spending a ton of money on just to win your vote.
You're watching ISSUE #1.
VELSHI: Every day we're bringing you what the candidates are saying about the economy. Today, the candidates in their own words about how they intend to make America more energy-independent.
Here is John McCain.
(BEGIN VIDEO CLIP)
MCCAIN: We must achieve energy independence. I have a plan to do so, and it's all of the above. I call it the Lexington Project.
It's got to be wind, tide, solar, nuclear. Nuclear power has to be part of any solution.
And my friends, we're a long way from the ocean, but we've got to drill offshore, and we've got to drill now. Drill now.
My opponent doesn't want nuclear power. He doesn't want us to drill offshore. And the other day he mentioned that what we need to do is inflate our tires.
My friends, I'm all in favor of inflating our tires, don't get me wrong, but that's a public service announcement. It's not an energy policy.
So we're having fun in this campaign, my friends. And I want you to have fun, too. I want you to enjoy this campaign.
I want you to ask Senator Obama to come to the town hall meetings with me and come here to Iowa, and we'll stand here together. We'll stand here together and answer your questions and listen to your comments and hear your concerns.
America is hurting right now. I don't have to tell you that. And we've got a lot of work to do. And I want to tell you, I will reach across the aisle and I will work with the Democrats. I will work with them to help America, because I'll put my country first, and I'll put America first.
(END VIDEO CLIP)
ROMANS: Up next, Senator Barack Obama's plan in his own words to solve our energy crisis.
But first, let's get you up to speed on some other stories making headlines. Don Lemon is in the CNN World Headquarters in Atlanta.
ROMANS: We heard earlier from John McCain, who wants to use offshore oil drilling, nuclear, and renewable energy to become energy independent. Now let's hear how Barack Obama would solve our energy crisis.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Our main focus has to be on creating energy efficiencies, on developing alternative power like solar and wind and biodiesel. I have made a major commitment to investing in these alternative energies, as well as developing the next generation of fuel efficient cars.
Our economy, I think, is going to depend on how successfully we deal with this huge structural issue. And, as I said before, I'm pleased that there were some serious negotiations taking place in the Senate among the so-called gang of ten. I think it provides a framework for continued conversations. I am not persuaded that offshore drilling is going to provide the kind of significant relief or long-term strategy that we need, but I think there is room for negotiations around a domestic production strategy as long as it's part of a larger, comprehensive strategy to deal with our real energy challenges.
(END VIDEO CLIP)
VELSHI: Well, as we hear from these candidates, the energy debate is obviously a hot topic on the campaign trail and it's a key topic in the TV ad wars. From national candidates on down to local candidates, $192 million has been spent on energy-themed ads so far. Let's have a look at a couple of them.
(BEGIN VIDEO CLIP, CAMPAIGN AD)
NARRATOR: Gas prices, $4, $5. No end in sight. Because some in Washington are still saying no to drilling in America. No to independence from foreign oil. Who can you thank for rising prices at the pump? One man knows we must now drill more in America and rescue our family budgets. Don't hope for more energy, vote for it. McCain.
MCCAIN: I'm John McCain and I approved this message.
(END VIDEO CLIP)
VELSHI: That's just one such ad. There are many of them going around. Mark Preston is CNN's political editor. He joins us now from Washington.
Hey, Mark. Good to see you.
You've been following this. You've been looking at the research that's done on this. Give me your sense of whether these are effective.
MARK PRESTON, CNN POLITICAL EDITOR: Yes, absolutely. There's no question they're effective -- $192 million, Ali, in an unconscionable sum right now being spent just on political TV ads that focus on energy. We know that issue #1 is the economy.
Energy is so tightly linked to what's happening to our pocketbooks right now. Just in my conversations with political strategists over the past week or so and up through this morning, they keep telling me the same thing, these ads are going to run at the same volume all the way through November.
VELSHI: Now you look at the beginning of this campaign, when Barack Obama seemed to be out ahead of this, John McCain was being associated with Bush and Cheney energy policies. John McCain seems to have broken away, particularly on this issue of offshore drilling.
Is he making some headway here?
PRESTON: Well, I'll tell you what, John McCain, you know, was against offshore drilling originally and then he decided to switch his position. He said that the circumstances of the rising gas prices made it implausible for us not to do offshore drilling.
Now, of course, we just saw in that clip with Barack Obama, he himself is saying, I don't want to allow the excellent to get in the way of the good. So we now know that these two candidates are willing to make a move on this issue. And I'll tell you, the reason being is, if you look at the poll numbers, about 70 percent of Americans think that offshore drilling should occur.
VELSHI: Yes, interesting. And that's been a shift over the last several years.
Now, listen, this $192 million spent at the federal level, state level, local level, it sounds like a lot of money to me, but what do I know? You've done some math on that much money and how much energy it would buy you.
PRESTON: Yes, absolutely. I mean, let's just break it down to what we all can understand and really look at it for what it's worth. That is about, at today's gas prices right now, is about 50 million gallons of gasoline. And I will tell you, Ali, if you were to get in your car today and you are to try to start driving around the earth, it is going to take you there 36,000 times. So you can get in your car, drive around the earth 36,000 times. That's how much $192 million in political advertising so far.
VELSHI: Is there a shift toward more of this energy advertising, away from other themes that you were seeing earlier, Mark?
PRESTON: Yes. I mean, let's just look at 2004 and 2000, Ali, right. You know, clearly, this is the pocketbook election. This is all about issues right now. This is what's affecting people. If you look at other elections, you know, we saw prescription drugs was a big issue in 2004. Well, we also saw that guns, you know the right to bear arms, was a big issue as well.
But, look, right now it's all about issue #1. I mean you talk about it every day. You talk about the price of oil, the price of gasoline. People are getting hit hard. And I will tell you this, wait until the fall, Ali. Wait until the fall when we start talking about home heating fuel. It will be a double barrel shot, gas, home heating fuel.
VELSHI: Yes, you're absolutely right. And up here in the Northeast, where people use both heating oil, and in the rest of the country where they use natural gas, both of these things, if we don't see prices come down, people are going to get quite a shock.
Mark Preston, CNN political editor. Always a pleasure to talk to you. Thank you for being with us today -- Chris.
ROMANS: I can hear you now. That's what Verizon is saying to its union workers. We'll bring you the 411 on that deal, next.
Plus, struggling to find a job in this economy? You're not alone. We'll take you to one of the biggest job fairs in the country.
You're watching ISSUE #1.
ROMANS: Good news for Verizon Wireless. The company hammered out a new contract with its union hours before a strike deadline. The agreement still has to be ratified by union members. Workers have been on the job even though the previous contract expired a week ago. Job security and health care benefits were the main points of contention. Under the new three-year deal, workers get a 10.5 percent pay hike and improvements in retirement benefits.
VELSHI: More and more Americans are losing their jobs. So it should be no surprise that nearly 8,000 people showed up for one of the largest job fairs in the country.
CNN's Chris Lawrence has the story.
CHRIS LAWRENCE, CNN CORRESPONDENT (voice-over): Look at the numbers as they rush into the job fair. A couple hundred employers, 9,000 people looking for work. Carla Valenzuela was let go in April after 20 years with Arizona state government. She thought she was secure.
CARLA VALENZUELA, LOOKING FOR WORK: Back in the day it used to be that way. But no job is safe now.
LAWRENCE: We follow Carla from one booth . . .
VALENZUELA: Hi. My name is Carla Valenzuela. How you doing?
LAWRENCE: To another.
VALENZUELA: Well, I was with the Department of Education for six years.
LAWRENCE: And another.
UNIDENTIFIED FEMALE: Well, Carla, I will hold on to this and we'll take a look at it. We'll review it .
LAWRENCE: This is hard. Sometimes, humiliating. But she makes no excuses.
VALENZUELA: Oh, I'm so sorry. I lost my job because he didn't like me, she didn't like me. You know, you can't do that. You've got to pull yourself up by your bootstraps and go out and look for a job.
LAWRENCE: Nationally, there are between 1 million and 2 million more people out of work now compared to this point last year. Arizona's unemployment rate is at its highest in four years.
LEE MCPHETERS, ASU ECONOMIST: The forecasts are in the shredder.
LAWRENCE: Some experts say the outlook is even worse than economists predicted.
MCPHETERS: What we are looking at now is, at best, at best, no job growth at all.
LAWRENCE: Arizona was one of the top 10 states to buy a home. Now it nearly leads the nation in foreclosures. Economists say jobs in construction and manufacturing will continue to evaporate, but the state's tourism industry is still going strong and health care is adding about 1,000 jobs a month.
VALENZUELA: Do you have any openings or anything at the moment?
LAWRENCE: As for Carla, she leaves with a few leads, but no offers. She's one of 33,000 people who had jobs in Arizona last year and are now out of work.
Now take Arizona's nearly 5 percent unemployed rate and flip it. That means 95 percent of the people who are physically able to work are working. That's small consolation to a lot of the folks here. But it does help put the problem in perspective.
Chris Lawrence, CNN, Glendale, Arizona.
ROMANS: Would you be willing to work longer hours for a shorter workweek? Some communities are already doing it. We'll tell you if it's working.
Plus, gas prices are down, but the economy's still struggling. What will it take to turn things around and when will you see a change to your bottom line? The CNN Money team is standing by to put it all in perspective.
You're watching ISSUE #1.
VELSHI: We've talked about a four-day workweek on this show before. Just on Friday we spoke to Utah Governor Jon Huntsman about that state's first four-day workweek for state employees. But others out there have been doing this since last year, like the folks at Brevard Community College in south Florida.
CNN's John Zarrella explains.
JOHN ZARRELLA, CNN CORRESPONDENT (voice-over): Brooke Stile is about to graduate cosmetology school.
BROOKE STILE, STUDENT: The fact that I have that day, just that one day, it's just so much nicer. And I don't have to drive all the way to Cocoa.
BETTY BLASCHAK, COSMETOLOGY PROFESSOR: You know, we seem to be able to get more done.
ZARRELLA: Betty Blaschak teaches the art of a good cut.
BLASCHAK: It was a great thing for me because I became a full- time faculty.
ZARRELLA: Brooke saves gas money, Betty got a job. Both because facing cuts in state funding, Brevard Community College went to a four-day workweek last summer. Four and a half days in the fall and spring.
JAMES DRAKE, BREVARD COMMUNITY COLLEGE PRESIDENT: It's a challenge, but the savings and the improvement in overall morale is certainly worth the investment.
ZARRELLA: By simply turning down air conditioning and heating systems on Fridays and giving employees the day off, BCC saved $267,000 in one year. And brought unexpected results.
MILI TORRES, ENROLLMENT SERVICES: Now, did you sign in to see an adviser there or over here?
ZARRELLA: Mili Torres runs enrollment service.
TORRES: Well, absenteeism has actually gone away almost in my department.
ZARRELLA: No kidding?
ZARRELLA: According to college officials, staff turnover is down 44 percent. Employment applications are up 50 percent. With the money saved, they hired 10 new full-time faculty positions, including Betty over in cosmetology. And it's not as though the gates are locked on Fridays. Jay Bottesch still comes in, using the down day for research and conferences.
JAY BOTTESCH, BIOLOGY PROFESSOR: Coming in, that gives you time to meet with the student.
ZARRELLA: For students, Fridays off means less money spent on gas, time to work an outside job, and, of course, another day to study. Yes, sure.
John Zarrella, CNN, Daytona Beach, Florida.
VELSHI: We want to get you to Susan Lisovicz here to talk about a story that we brought you earlier on CNN.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Ali.
We want to clarify a story we told you about earlier today on CNN. The Financial Times reported that China would overtake the U.S. next year as the largest manufacturer in the world. In the article, the newspaper reported the information came from forecasts for the Financial Times by Global Insight, which is an economic consulting firm.
CNN checked with Global Insight, which told us that there was no such analysis done for the FT. Global Insight says one of its staffers sent the FT raw data and that the FT reporter interpreted on his own. Jim Dorsey, spokesman for Global Insight, told CNN, "I can't confirm the accuracy of his interpretation of the data."
Global Insight says it is presently doing the analysis and hopes to have a report out shortly. CNN spoke to the FT reporter who says the interpretation, indeed, was his own -- Ali.
VELSHI: All right, Susan, thanks very much for that.
ROMANS: All right. Gas prices are nearly 30 cents below record highs. To good to be true or just a brief break before they go back up again? Let's get right down to it with CNN Money's team. Steve Hargreaves and Poppy Harlow are of CNNMoney.com. Allan Chernoff is a CNN senior correspondent.
Wow, 25 days now coming down, down, down. Even as we're seeing small cars being sold, a real push-back to people starting to change their purchasing habits because of these high gas prices.
Steve, can we expect this really to continue?
STEVE HARGREAVES, WRITER, CNNMONEY.COM: Yes, I think so. You know, globally, the economy is slowing down. You know, we heard a lot about sort of rising demand in the developing world that was pushing up oil prices. But, you know, globally, the economies have started to cool off. So I think a lot of people are saying that, you know, you could see oil fall to, you know, even further. I mean even around $100 a barrel.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: There's no reason oil cannot keep on falling for at least another $30 a barrel. There's no reason . . .
ROMANS: $30 a barrel.
CHERNOFF: Easy. Easy.
ROMANS: But then we're still talking about expensive relative to the past five or 10 years.
CHERNOFF: Yes. Absolutely. But what's happened here, more than anything else, is just a change in investment psychology. Prior, everybody was bidding the price up. Now the price is being bid down. Has anything really changed fundamentally? Very, very little.
ROMANS: People were buying every . . .
CHERNOFF: It's a change in investment psychology. The question is, with prices going down, will people continue to change their habits? Will they keep moving to those small cars?
HARLOW: Right. What we saw in the 1970s, right, people steering away from those big Cadillacs, those big, gas guzzling boats and we thought they'd never go to a Range Rover or a Hummer, but they have. And the question is now, will Americans continue to pull back and pick up, whether it's a Prius, a hybrid, or just smaller cars.
I mean, I just got back from traveling around Europe where I saw one Hummer, one, in two weeks and about three SUVs in total driving about 1,500 kilometers. So that says a lot. They all drive small cars there. What if -- America might look like that in a few years.
ROMANS: We talk about gas prices and the cars that we buy or the cars we drive because of those gas prices. But there's a couple of things that are going to hit home literally this winter and that's going to be heating oil and it's going to be natural gas, however you heat your home. Those prices are still going to be higher as well. So that's kind of another shoe to drop going ahead. And the prescription prices. We talked about the prescription prices that have been going up. The household inflation is still there, isn't it, Allan?
CHERNOFF: Oh, without question. I mean inflation is very bad, not just at the pump. I mean, in the supermarket, everywhere. With regard to the prescription prices, you know, a lot of these drug companies are facing the expiration of their patents. This has been a problem for years and they have not resolved the issue. Their pipeline is still not delivering as many new drugs as they used to. They are trying to squeeze as much profit as they can out of their blockbuster drugs.
ROMANS: Let's talk about nuclear energy quickly because you had a great piece on this as well and our Quick Vote question about nuclear energy, or talking about nuclear energy. Do we think that there's going to be a revitalized push for nuclear energy in this country?
HARGREAVES: Well, there certainly has been. You know, McCain has come out and called for 45, 50 new plants. So, yes, people are getting turned on by it. You know, it's a fairly clean source of energy. You know, it doesn't emit any carbon dioxide. And most of the uranium for it can be mined right here in the U.S. But, you know, there are problems obviously. People are concerned about the waste and, you know, people are concerned about how safe these plants are.
HARLOW: And I think one of the senior producers here at CNN just brought up to me after our energy seg (ph), hey, but what about the uranium mining issue, the safety issue there, too. We didn't address that. We will later this afternoon. That's a concern, too. But again, that brings jobs, more jobs, to the United States as well. So it's a double-edged sword.
CHERNOFF: Unless it's hydro, wind, or solar, you know, then you're talking about some sort of a risk, some environmental challenge. We know the risk of fossil fuels. And I think because of that, because it's well-recognized now, that necessitates some move over to nuclear. Steve has a great piece online, on money.com, talking about the cost as well. Very expensive. But these guys can afford it. They don't pay right at once. They'll issue 30, 40-year bonds. You approve it, they'll build it.
HARGREAVES: Right. And as the piece points out, you know, anything that we build is going to be expensive. If you want to build something that's relatively clean, you know, wind farms are expensive, solar is expensive. So anything's going to be pricy.
HARLOW: Well, we know McCain would like to see 45 new nuclear plants by 2030. Obama is not opposed to them. What do you think happens say if Obama gets in office? I mean, what do we see from him. We know McCain wants it. Obama's kind of not going either way right now.
HARGREAVES: Yes, I think he tolerates it. You know, I mean, even Al Gore, you know, they understand that it will, obviously, it will make up an important part of our energy mix. But they probably won't call for a, you know, big push for more plants.
ROMANS: All right. Steve Hargreaves, Poppy Harlow, Allan Chernoff, thanks guys.
VELSHI: Well, 40 million credit card accounts were breached in what might have been the largest crackdown in U.S. history. How do you protect your identity online?
And what would you have to save every year to convince you to buy a hybrid? Here are your options. Log on to CNNMoney.com right now. Poppy's going to be back in just a few minutes with the results.
You're watching ISSUE #1 right here on CNN.
ROMANS: All right. How much money would you have to save every year to convince you to buy a hybrid? That's today's Quick Vote question. CNNMoney.com's Poppy Harlow is back with us with the results.
HARLOW: Hi, Christine.
People want a lot. Forty-one percent of people say they want $1,000 a year to convince them to buy a hybrid. Ten percent say just $100 in savings a year. Seven percent say $500 in savings. Forty-two percent of you out there, you're not even interested in buying a hybrid. I thought everyone wanted a Prius. That was like all the buzz. But not anymore.
ROMANS: Forty-two percent said they don't even want a hybrid?
HARLOW: No. Maybe they want an electric car or a natural gas car or something like that.
ROMANS: All right. Maybe they do.
Poppy Harlow. Thanks, Poppy.
VELSHI: Sounds to me like a good Quick Vote question, what is it that you want in that case?
We've been telling you about that gigantic identity theft bust last week. It was called the biggest in history. Nearly 40 million credit cards have been exposed. But there are ways to protect yourself online. Mandy Walker is with "Consumer Reports" and she's got some tips for us online and offline.
Mandy, you're big on this not storing passwords in your commuter. A lot of -- I mean I clearly (ph) see new software programs that say it can store all your passwords. You're thinking, don't go for it? Why? MANDY WALKER, SR. PROJECT EDITOR, "CONSUMER REPORTS": Yes, you really shouldn't unless you use encryption software and that's -- of course, you have to keep that up to date as well because if your computer is stolen or a hacker breaks in on the Internet, they get the whole list of all your passwords so they can get into all your accounts.
VELSHI: And when you're working in Windows and it pops up and says, do you want us to remember this password, you also think that's not something you should do even on your own computer.
WALKER: And it's certainly tempting because you've probably got a different password for 19, 20 different accounts. But we say, no, don't click yes when they ask if you want to remember your online information. And delete any that you've already stored that way. Again, so they won't get hacked into and be stolen by ID theft.
VELSHI: Now I travel with my laptop usually, but sometimes, you know, I'll be at a hotel or some public place and I'll just rather use that computer rather than firing mine own one up if it's convenient. You say don't enter your passwords into those computers even if you're not telling that computer to save your password. Explain this one to me.
WALKER: Yes, the machine could be secretly recording key strokes. So that's true when you're traveling. And, you're right, they have those convenient little offices downstairs in hotels. You can walk right in and use them for free sometimes or even in a library. But you don't want to do that.
VELSHI: Now, one thing that really we can't remind people enough about is, don't get into your accounts if you get an e-mail that says you need to update something. Don't click a link to get into any of your own accounts. Do it yourself manually. Enter the letters into the web site yourself.
WALKER: Right. It could be a fraudulent e-mail. Of course, this is usually phishing schemes done this way. So a cyber thief could be using your account number to get your password, to steal your identity or empty all your accounts.
VELSHI: Let's talk about knowing that something is wrong. So many people don't find out something's wrong until they apply for a loan, like a mortgage, something like that. People are entitled to free credit reports. Can you tell us a bit about how that works and how you should handle that?
WALKER: Right. You can get a free credit report once a year from each of the three big credit reporting agencies. It's a good idea to stagger those. However, check them about every four months, that way you can keep a look at anything, unusual activity in your accounts virtually all year long and you can do that by logging on to annualcreditreport.com.
VELSHI: Despite those ads you might see on TV, the actually free ones come from annualcreditreport.com. WALKER: Right. And don't be tempted, if you see any ads, to get anything else for free or sign up for some services that allow you to check your credit report every day. You really don't need those.
VELSHI: They're often paid. Now here's one that, again, strikes me as something that might be safe, but it feels like an inconvenience. Putting some sort of freeze on your credit reports where you can't open up things unless you are deliberately going to do it. You sort of arrange that ahead of time. Tell me how that works and why you think one should use it.
WALKER: Right. You can put a freeze on your credit files. It prevents identity thieves from opening new accounts in your name. It can be a bit of a pain if you're applying for a new loan because you have to use -- either give the creditor a pin number or you have to unlock it somehow to give them access. But it will stop identity thieves from opening new accounts, which can be key if you suspect you've been the -- you're going to be the victim or you have been the victim of identity theft. It can be a great thing.
VELSHI: And, Mandy, you know, when we hear people who have been victims, you may not lose a lot of money, but, boy, you spend a great deal of time and effort trying to straighten it all out. It's a big undertaking.
WALKER: Right. It could take months and -- yes, it could take months and months and months. So, absolutely, something you want to nip in the bud early or ahead of time if possible.
Mandy, good to talk to you. Thanks so much. Mandy Walker with "Consumer Reports."
WALKER: Sure. Thank you.
ROMANS: All right. Ali, for more ideas, strategies and tips to save you money and protect your house, watch "Open House" Saturday at 9:30 a.m. Eastern right here on CNN. And for more on how the news of the week affects your bottom line, tune in to "Your Money" Saturday's at 1:00 p.m. Eastern, Sunday's at 3:00 right here on CNN.
VELSHI: You know, I used to be one of these people who never believed that you should actually take care of those things. But they actually do happen.
The economy is issue #1. We're committed to covering it for you. ISSUE #1 will be back here tomorrow, same time, 12:00 Eastern, right here on CNN.
ROMANS: Let's get you up to speed on the latest headlines.
"CNN NEWSROOM" with Don Lemon and Brianna Keilar starts right now.