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Your Money
The future of Money, What You can Expect; In a Tough Job Market, Go From Fired to Hired; Middle Class Tax Hike; Where the Raises are; CNN Express is Back; Turning Trash to Cash; "Cash for Clunkers" in Europe
Aired August 09, 2009 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN HOST (voice-over): Up ahead, the future of "YOUR MONEY." In six months, a year, five years, what you can expect from the economy.
Why health care reform could force President Obama to renege on one of the biggest promises of the campaign.
In a rough-and-tumble job market, how to go from fired to hired. Just like that.
Settle in. It's time to talk "YOUR MONEY."
(on camera): Welcome to "YOUR MONEY," I'm Ali Velshi. Christine Romans is off today.
The jobless rate in the United States improved for the first time in more than a year. The unemployment now stands at 9.4 percent, down from 9.5 percent in June. While the report was better than we expected, we are still losing jobs in this country, lots of jobs. 247,000 jobs were lost in July. That is the smallest job loss in a month since August of '08. 6.7 million people have been laid off since the beginning of this recession, which started in December of '07, but January of '08, that first square there, that's the first month in which we lost jobs.
Take a look at that trend. For the first seven months of 2008, it was fairly steady. Then the recession worsened. We know that. We felt it. That's when the credit crisis hit. Look at how job started to be lost in the United States, going down in January by 741,000. That's how many jobs were lost in January.
But since then, we started to see a reversal in that trend. Fewer jobs lost on a monthly basis. In June, we hit a bit of a snag there. It went -- it got worse from May. Take a look at July. This is the smallest since last August, 247,000 jobs lost.
How does that affect where you live? I told you that the national average, the national unemployment rate is now 9.4 percent, down from where it was last year.
Let's take a look how this works out across the country. In red are the states with an unemployment rate that is two percentage points higher than the national average or more. If the national average is 9.4 percent, we are looking at states with 11.4 percent or higher unemployment in red. You can see some states there in the west. You can see Iowa. You can see Michigan, which has the highest unemployment rate in the country, of more than 15 percent. Really, it's hard to see, but up in the corner there you can see Rhode Island and South Carolina.
In gray are those states where the unemployment rate is within 2 percent either way of the national unemployment rate, somewhere between 7.4 percent and 11.4 percent.
In green -- this is a pattern we've seen for a long time -- those states which have an unemployment rate two percentage points or lower than the national average, 7.4 percent or lower. Those middle states, those mountain states, and we've seen this for a while. Virginia also enjoying that trend.
What does this mean for you if you are a job seeker, if you are an investor, if you are looking to make decisions about how to spend your money or go to school in this economy?
Lakshman Achuthan is a managing director of the Economic Cycle Research Institute. He's a great friend of our show.
You have been saying for some time, the larger picture here is that this recession is ending right under us right now probably.
LAKSHMAN ACHUTHAN, MANAGING DIRECTOR, THE ECONOMIC CYCLE RESEARCH IINSTITUTE: Absolutely. The information we are seeing this week on jobs is completely consistent. It's confirming that. Back in April, looking at forward-looking indicators, it became clear the recession ends this summer. Some time between Memorial Day and Labor Day. We won't get the exact date for another year.
VELSHI: And the exact date won't matter to most people.
ACHUTHAN: That's history by then. Here, it's like what is going on? Is it getting worse or better? Definitely, that trend you just went over is showing us it is getting better.
That doesn't mean it feels good or the recession is definitely over at this moment. We are still losing jobs. That is a key determinant. You have to grow jobs to say you are in an expansion.
VELSHI: You have a great map. You have a different map -- I talked about unemployment rate. Yours is different. This talks about job gains or losses. Let's take a look at this map and tell us what's going on. If I look at this map I think this looks terrible. The whole country is in decline but for four states.
ACHUTHAN: Yes, yes. The red tells you the trend has been down. You are losing jobs. The good news is that map used to be all red. You had no color. Just a solid swath of red. Now we are starting to see yellow where things are changing direction from losing to gaining. There is one blue state where you are actually gaining...
VELSHI: North Dakota. ACHUTHAN: You're actually adding jobs in this state. This will slowly change color. It will slowly turn yellow and blue for the rest of this year into next year as the recovery becomes evident to everybody and we start to get actual jobs being added.
VELSHI: That is one way to break this down. I think it's important to break it down a few different ways. There's still great disparity in demographics, in people unemployed, who has more jobs than others.
ACHUTHAN: Absolutely.
VELSHI: It is still a tough world for minorities in America.
ACHUTHAN: Absolutely. What you are having -- first, before you get to the demographics, there's one big theme here. Manufacturing has been taking it on the chin for decades. Every recession we have in that period accelerates. It gets very much harder.
VELSHI: You start to see that in the numbers. You see the adult male unemployment rate is higher than adult women.
ACHUTHAN: This is why.
VELSHI: Because adult males populate the manufacturing industry more than women.
ACHUTHAN: Exactly. Michigan, for example, has the highest unemployment rate in the nation. That is the same reason. Women tend to work more in services, which tend to be a bit smoother. We are seeing in the latest numbers that the job loss is expected in services were much weaker than expected. That engine is starting up again in this country.
VELSHI: We have seen the numbers go down, meaning a higher percentage amongst Hispanics. Other than that, we've seen blacks do a little bit better. Other groups do a little bit better. It's marginal. This bottom line is it's still...
ACHUTHAN: This is marginal. I would expect basically, if you are in the rust belt, if you are exposed to manufacturing, you may get a little bit of a reprieve here as the global industrial engine is restarting, but it's not -- the end of the recession will not cure the problems there. That is something that is going to make the jobs numbers weaker than they otherwise would have been at the end of this year into next year, the so-called jobless recovery.
VELSHI: Let's talk about what you just mentioned, where the jobs have most been lost. This is not about this recession. This is about the last decade. Manufacturing jobs have been at the top of the list of jobs being lost.
In this particular report, what was interesting is construction was higher than manufacturing. More jobs were lost in construction than manufacturing. Retail jobs were also lost. Where you look at where there were net gains once again, the only one of significance was health care. This has continued to be the story the last few years. ACHUTHAN: Right. Health care because it is not so discretionary. If you have to go to the doctor, you have to go to the doctor. Also, education tends to be somewhat stable.
VELSHI: That's right. That tends to be a second, right after health care.
ACHUTHAN: Construction, what we are having is some shift. You are getting residential home activity. It's not enough to make up for the losses out of the commercial real estate activity, which has ground to a standstill.
VELCHI: We share a view of all the measures of the economy -- you accord a lot of weight to them, but I think you've got to fix this jobs situation to feel a recovery.
ACHUTHAN: Right.
VELSHI: When is it fixed? When do we start to gain more jobs on a monthly basis than we lose?
ACHUTHAN: Net-net, it probably doesn't happen until year end. Underneath that, you'll see the nonmanufacturing sector begin to add jobs first. The key is it has to add more jobs than what you are losing in manufacturing for this net number to start going forward to start rising.
VELSHI: You think we might see that in 2010?
ACHUTHAN: Maybe by the end of this year. It depends how fast the service sector starts to pick up speed. It will. It did at the end of the last recession. We had services adding jobs right away in early 2002. Yet, manufacturing went on to lose another 3,000 jobs.
VELSHI: Wow. Lakshman, always good to talk to you. Thanks so much.
Lakshman Achuthan, managing director of the Economic Cycle Research Institute.
Coming up, how to go from being fired to getting hired in no time at all. And we'll talk once and for all, whether the Obama plan to fix the economy is working.
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VELSHI: People ask me this all the time.
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VELSHI: ... with the markets. That's always one that is ahead of what's going on.
Take a look at Election Day back in November. The Dow was around 9,100. We are using the Dow to illustrate this. You can look at other markets, as well. This market was choppy all the way down to about March 9th, which some people say is going end up having been the bottom of this market, in the 6,500 range on the Dow. Then look. There was a gradual uptick all the way to now, where we are right back to where we were on Election Day. It forms a perfect "V," which is how a lot of people describe my upper body.
Now let's take a look at the housing industry. That's what got us into the mess in the first place. Let's look at the Case-Shiller report which looks at 20 metropolitan areas. I'll remind you there are lots of ways to skin this cat. There are lots of ways to look at these numbers and many people will look at them different. But according to this report, we are seeing a minute increase in the price...
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VELSHI: He certainly made some speeches that suggest his administration and his policies deserve some of the credit for it. According to a CNN opinion research poll, more than half of you think the president's plans made the economy better or at least will make things better in the future. 40 percent say his policies won't improve the economy.
Ken Rogoff is a professor of public policy and economics at Harvard University, Stephen Moore an editorial writer with "Wall Street Journal," and Douglas Holtz-Eakin is the president of DHE Consulting and a former economic advisor to John McCain. Who better to talk about this than these three gentlemen?
Thank you all for being with us.
Stephen, let's start with you. Because you are generally not that bearish about things, but you don't think this economy -- you don't think we should have a discussion about who should take credit. you don't think it's all that good.
STEPHEN MOORE, EDITORIAL WRITER, WALL STREET JOURNAL: We certainly lowered our standards when we say a loss of 250,000 jobs is good news. We still have 15 million unemployed Americans. Our unemployment rate is as high as it's been in practically 50 years. There are some signs of a modest expansion, but I'm still worried about this. And I don't think the worst is necessarily over.
Douglas Holtz-Eakin, what do you think is going on?
DOUGLAS HOLTZ-EAKIN, PRESIDENT, DHE CONSULTING & FORMER JOHN MCCAIN ECONOMIC ADVISOR: Steve's got an element of truth there. This jobs report is not as strong as it might appear first blush. Most of the decline in the unemployment rates comes from the labor force participation rate going down. People being discouraged and leaving the labor market. I think, going forward, households are sufficiently weak and there's a weak enough foundation under them in the labor market. We shouldn't expect much in the second half of 2009. It's going to be 2010 before we see real growth.
VELSHI: So you do see -- you see something going on in the future. You just don't think it's happening right now.
Ken Rogoff, what is your view of what's going on right now and whether anybody should take credit for it?
KEN ROGOFF, PROFESSOR OF PUBLIC POLICY & ECONOMICS, HARVARD UNIVERSITY: I think the recession is losing steam. There is no question about it. We're not in galloping growth yet. I think we'll have a bit of growth second part of this year. I don't see strong growth until next year yet. Jobs should be going up. We can't just cheer that they are not going down as fast.
VELSHI: Let's talk about -- the reason is it not just a political discussion who should get credit for it, but it's important to understand this from an economic perspective. We need to know, after the trillions of dollars thrown into this economy in the last year, what works and what didn't work? What's your view of what has worked so far?
MOORE: One thing a lot of Americans aren't focusing on, we talked a lot on your show about the fiscal stimulus, about $100 billion of that has been spent. I don't think that made one wit of difference. The big stimulus has come from the Federal Reserve. We talked about this a few weeks ago. The Fed is shoveling money into this economy at a record pace. We've seen an increase in the money supply.
VELSHI: Let's be specific about this. The Fed is what got our credit freeze to open up because it allows companies to borrow money. It put money into the mortgage agencies which kept mortgage rates low. So that's been the stimulus and it's working.
MOORE: That's right. The direction, if you look at the graph of the money supply, it was relatively stable for about seven years. Starting about November it went straight up. That is now -- when you put that much money in an economy, that stimulates.
VELSHI: OK.
But, Ken, there are dangers putting that much money into the economy. What Stephen is talking about is the printing money that we all talk about. There are dangers down the road to that.
ROGOFF: Yeah, there are dangers down the road. We were in danger of falling off a cliff. They put in the fiscal stimulus. They weren't sure if we needed it. They put in all this monetary stimulus. It has worked. I do think the fed and administration deserve credit that we are not falling off a cliff.
On the other hand, nobody should kid themselves. The debt is soaring. There is all this money to pull out of the system. It's not easy going forward.
MOORE: That's right.
VELSHI: Douglas, you were an advisor to John McCain. You are the kind of person political people would want to hear from. What is what it to go about this now? We all agree there will be some improvement, further improvement to the economy, maybe later this year or next year. What should the administration be doing now to have the greatest effect to help Americans?
HOLTZ-EAKIN: The administration should look forward and recognize that households are in weak positions. They came into the recession highly indebted. They lost a lot of money in their houses and their portfolios. They are unlikely to be a source of growth. So you have to put in a foundation under those places that will be a source of growth, our businesses with capital expansion, our exporters and our international competitiveness. Let's bet on the places that could drive this economy forward. They should be focusing on that.
VELSHI: The only good news here is if we are not in panic mode about the economy, we could have those discussions about what else could happen. But we brought you hear for a reason, so don't go away.
We are looking ahead to what you, the viewer, want to know, the future of "YOUR MONEY," your economy in six months, in two years and five years. We are going to break it down specifically with this panel next.
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ALI VELSHI, CNN ANCHOR: If you're looking for a debate -- political debate about where this economy is, and who gets the blame or the credit for it, you'll find plenty of that.
Let's take a bit of a different tack. Let's take a trip into the future and see what's in store for your money.
We're back with Ken Rogoff, Stephen Moore and Douglas Holtz-Eakin, to talk about what this economy is likely to look like six months from now, a year from now and five years from now with the idea in mind that you want to do some planning.
You might want to move. You might want to retrain. You might want to direct your kids into what they study in college. Let's get some sense of it.
Again Stephen Moore, I'm going to start with you. Give us your six- month, your one-year and your five-year look at this economy.
STEPHEN MOORE, EDITORIAL WRITER, WALL STREET JOURNAL: Look, I see -- I think there are three negatives on the economy that are going to hold back growth and are not going to create the kind of normal bullish expansion we normally have.
One is, rising tax rates. Barack Obama has said that next year the tax cuts go away, rising capital gains dividends, income tax rates. I think those hurt the economy.
Second of all, is higher interest rates, we're going have to pay for a lot of that debt that Ken was talking about. And I think almost all economists agree that interest rates are probably about as low as they're going to get.
VELSHI: Yes.
MOORE: And the third is possibly higher inflation. And all of those things I think they're going to dampen the normal kind of recovery process.
VELSHI: So you think in six months we're probably looking a bit better than we are now...
MOORE: Yes.
VELESHI: ...and maybe even a year?
MOORE: But not -- like normally we have five percent or 6 percent growth...
VELSHI: Yes.
MOORE: ...out of a recession.
VELSHI: Yes.
MOORE: ...I think we're looking at maybe two percent.
VELSHI: Ok, so your biggest concern is the long point -- five years out.
MOORE: Yes.
VELSHI: You think we're not going to be a whole lot better off?
MOORE: Yes. Look, I just think that -- that when you're talking about $10 trillion of new borrowings...
VELSHI: Yes.
MOORE: ...over the next 10 years, that's like putting a millstone around over the neck of the economy.
VELSHI: Ken, what do you think about that?
KEN ROGOFF, PROFESSOR OF PUBLIC POLICY & ECONOMICS, HARVARD UNIVERSITY: Well, I sort of agree. I mean I think that we're going to be better off in six months and still better off in a year. Although, it's really not until then that it's going to start to get easier to look for a job than it is now. The unemployment is still going to be very tough.
I worry about the longer term, because coming out of this, the credit bubbles collapse, taxes seem like they have to go up a lot. And how are we going to react to that? We're going to possibly live in a very different world going forward than we have before.
VELSHI: We've been looking at the unemployment rates of nine and a half percent, 9.4 percent now. We were at a little below five percent when this recession started and even the Congressional Budget Office's estimates are that it's -- we're not getting to that until 2013, maybe 2014.
Doug, your view -- you're short-term slightly longer than short-term and slightly longer term of view?
DOUGLAS HOLTZ-EAKIN, PRESIDENT, DHE CONSULTING LLC: Well, six months out I don't see things dramatically better. I think we sort of muddle along in the second half, unemployment continues to rise.
A year out well have seen the economy really start to recover. Well, we'll see -- we'll have housing construction again and the commercial real estate problems will be gone, businesses will be buying equipment. And we'll see a couple of quarters of above-trend growth, unemployment will start coming down.
But if you look at five years, we will have been in a situation we've had sub-par, long-term growth, because of the debt burdens, because of the higher policies, taxes and other policies. And we'll be experiencing some inflation that generations are unused to.
And so I -- if you go out five years, you've got a combination of higher inflation and higher unemployment that are going to put people I think on really a pessimistic frame of mind.
MOORE: Ali, you know there's the old saying about that punch bowl, you know the fed has the punch bowl, they take the punch bowl to the party and they've certainly been dishing it out, we talked about this all the money.
VELSHI: Yes.
MOORE: The real concern is will they have to take away that punch bowl...
VELSHI: Right.
MOORE: ...as soon as that party starts to get going? And that could restrain growth a lot.
VELSHI: Tell me Ken, for our viewers -- I think most people are following this discussion. But for those people who don't understand why the debt and borrowing has to result in higher interest rates and inflation. Is there that clear a connection?
ROGOFF: Well, certainly with the higher payments on it, at some point the rest of the world's just not going to keep lending us the money.
We've been borrowing from Asia, the Chinese, the Middle East. At some point they're going to look and say, "You look like a big California. You want to spend a lot, you want all these programs but you don't want to tax yourself." And then they're going to start demanding higher interest. And then we run in trouble.
Inflation comes really because the Feds put in all this money, and if growth doesn't pick up, they're not going to want to pull it out quickly. They know there might be inflation but they'll let it roll. And that's why I think we're going to have inflation going forward. VELSHI: Do you think that higher taxes for the middle class are inevitable?
ROGOFF: I do. I think if we're going to expand government like this, you're not going to get it all out of the wealthiest. You go there first maybe -- I'll bet we see a national sales tax. I think it's the only way to raise the money consistent with the size of the programs that we're introducing.
VELSHI: Stephen, big topic. Middle class tax cut increase? Do you think it's going to happen?
MOORE: Well, I sure hope not. But you know what, in the positive side and I want to say one thing positive.
VELSHI: Yes.
MOORE: We're at the cusp of a technological revolution. I mean, what we've seen in the last ten years, this is just the beginning. So I think the next ten or 20 years we're going to huge increases in living standards and just in the United States but around the world because of technology.
VELSHI: And you, Doug?
HOLTZ-EAKIN: Well, I think the one thing we should remember is that, this recovery is in many ways a tribute to the power of private markets. The conventional wisdom just six months ago was no recovery unless you got the housing market fixed through government policy. You got assets -- which are troubled-off of the bank's balance sheets. We've done neither, yet we're starting to see the signs of the economy turning around.
We should remember that and not overburden the economy going forward. Don't put us in a position of having to have a national sales tax. Don't put us in a position...
MOORE: Maybe too late for that, Doug.
HOLTZ-EAKIN: I am painfully aware of the outlook. But if you -- if you want to get the growth out of our businesses and our international competitive firms, you cannot have the kind of borrowing we've seen on a sustained basis.
VELSHI: All right, well, I've sort of backed into this discussion, because President Obama -- I mean, you couldn't have missed this. He made some pretty big and specific promises on the campaign trail, but there is this one promise that he may have to go back on according to my guests and it is a very big one.
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VELSHI: Welcome back to YOUR MONEY.
Time now for the ticker, every week we go through the headlines so that you don't have to and we invite some opinionated friends of ours to give us their takes on this weeks stories.
Pat Kiernan is an anchor at "New York One" news. A familiar face to some of you, he spent a lot of time in this building with CNN and follows the news everyday. So he knows a lot about it. Alfred Edmond is the editor of --- editor-in-chief at BlackEnterprise.com; an opinionated and an informed gentleman, who also joins us quite often.
Gentlemen, good to see both of you. I want to pick up with the conversation that I was just having with some noted economists about the idea of a middle class tax increase. Something that Barack Obama said time and time again was not going to happen in his administration and something that now looks almost inevitable.
(COMMERCIAL BREAK)
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Welcome back to YOUR MONEY.
Time now for the ticker, every week we go to through the headlines so that you don't have to and invite some opinionated friends of ours to give us their takes on this weeks stories.
Pat Kiernan, is anchor at "New York One" news, a familiar face to some of you he's spend a lot of time in this building with CNN and follows the news everyday. So knows a lot about it. Alfred Edmond, is the editor -- editor-in-chief at BlackEnterprise.com an opinionated and an informed gentlemen who also joins us quite often. Gentlemen, it's good to see both of you.
I want to pick up with the conversation that I was just having with some noted economists about the idea of a middle class tax increase. Something that Barack Obama said time and time again was not going to happen in his administration, and something that now looks almost inevitable.
ALFRED EDMOND, EDITOR-IN-CHIEF, BLACKENTERPRISE.COM: Elections are like squabbling between two divorced parents trying to get the loyalty of a child. You promise whatever you have to promise, but now Christmas is coming and there's not going to be a pony under the tree and so everybody is getting anxious.
But the reality is, in some way shape or form even the middle class is going to have to share some burden. And there's going to be some taxes. I don't know if it's going to be actual direct tax on the middle class. But I don't see how we're probably going to get...
VELSHI: Yes, Ken Rogoff from Harvard was just saying it might be a sales tax, but somehow we're going to have to pay for this mess.
PAT KIERNAN, ANCHOR, NY1 NEWS: And you look at the way that we're spending and this deficit and all this debt that racks up. It's going to come back to us at some point.
VELSI: Well, what should we be more worried about, Pat? Should we be worried about the fact that reality says somehow we've got to -- either stop spending or raise more money and that might mean more taxes? Or should we be more worried about the fact that President Obama did one of those "read my lips no new taxes" things and we should be mad that he's going to break a promise?
KIERNAN: Well, we should probably be mad about that. But at some point what do you do? Do you keep deferring that for another year and another year and another year? Does that go to the next administration when at some point it'll come back to them...
VELSHI: Right.
KIERNAN: ...that can't keep spending like this? So the promise only holds away but it still makes sense.
EDMOND: Well, every President going back to at least Carter in some way, shape or form during his candidacy said they weren't going to raise taxes...
VELSHI: Yes.
EDMOND: ...and every president has had to because of economic realities of being the president. Campaigning and governing -- we've heard it in million times before -- is not the same thing.
VELSHI: I wonder if it's possible that we can actually start to spend less properly and understand how this -- and we're spending at double the rate that the government is...
EDMOND: Well, they had to indulge the child. We want more.
KIERNAN: And we have to get more competitive.
VELSHI: Yes.
KIERNAN: If you look at U.S. tax rates now.
EDMOND: Absolutely.
KIERNAN: They're a problem.
VELSHI: Yes.
KIERNAN: And people used to think this was a place where taxes are low.
VELSHI: Yes and it's a place that you came and did business because it was all the other great things about being in America and the taxes as well.
EDMOND: Absolutely.
VELSHI: Hopefully we still have all the other great things about being in America but the taxes aren't all that low.
Let's talk about electric cars, about the future of the car industry. We've seen this "Cash for Clunkers" program. It did get a $2 billion infusion this week. And that's allowing the program to continue, probably not for much longer.
But here's the car story that few people are talking about. The federal government is giving out $2.4 billion to companies developing electric car batteries and manufacturing programs. A total of 48 projects are getting funding, including projects at GM and Chrysler.
Many of the biggest projects are based in the Midwest and Michigan is in fact the biggest recipient of this. Is this smoke in mirrors or do you think this is really the basis for the future of the car?
KIERNAN: It is. It is the basis for the future of the car. Because I would buy an electric car if I knew that I wasn't going to run out of battery in the middle of my trip.
VELSHI: Right.
KIERNAN: So I think, it's a simple reality that I have one vehicle and I use it to drive long distances because I don't -- I use public transit in the city. So if they can actually develop a battery that will really last through a whole trip, then people are all over it.
VELSHI: And that will mean some combination in some cases of gas and batteries...
KIERNAN: Right, probably.
VELSHI: ...but probably one of the big grants went to a truck company, to Navistar...
KIERNAN: Yes.
VELSHI: ...to make batteries for big trucks. That'll certainly take a lot of pressure off.
EDMOND: Well, it's because it's not just about -- regular people traveling, it's about how do you move business ...
VELSHI: Yes.
EDMOND: ...around the country, too and the cost and the efficient management.
The sad thing about this is we all know that this should have happened at least 20 years ago.
VELSHI: Yes.
EDMOND: And now we're backed into the corner. We need the jobs and we need the innovation, we need to catch up if you will, in terms of how we use energy in this country. So I'm glad it's happening. But this is another one of those things that we had to kind of get back into a...
VELSHI: Well, I think a lot of last the year has been an indication on that. It's been -- we've been backed into a corner on a lot of fronts, on credit, on spending, on things like that. KIERNAN: So many people learned a lesson last summer with $100 oil...
VELSHI: Yes.
EDMOND: Oh yes.
KIERNAN: ...that they were using too much energy. And it slipped a little bit since then.
VELSHI: Yes.
KIERNAN: I mean, we're glad it's slipped in many ways...
VELSHI: And suddenly bad habits are showing, yes.
EDMOND: Who would have thought we would have seen we're having $80 oil?
VELSHI: Yes who would have thought?
EDMOND: And we think that's great.
VELSHI: Let's talk about one more thing.
If you have a baby this year, you can expect to spend $221,000 raising that child until he or she turns 18. That's the estimate from the USDA, the U.S. Department of Agriculture, of what a middle income two- parent household will spend in today's dollars.
Now, if you're high income, expect to spend nearly $367,000. And by the way, none of this includes college costs. This is daunting.
Alfred, you and I, were out talking to a group of people in Harlem a few months ago...
EDMOND: Yes, yes.
VELSHI: ...and the thing that was really crushing people was the idea of their child's college expenses. We're talking about a quarter million dollars almost before college.
EDMOND: Well, that quarter million dollars is the non-optional portion.
VELSHI: That's right. You've got to feed your child and you've got have a place to sleep.
(CROSS TALK)
EDMOND: I always say to my kids, I need to give you the bill. And none of my kids have children yet. But I need to show you what the bill is going to be. So you'll think about when you're going to have a child, if you're going to a child...
VELSHI: Right.
EDMOND: ...because it is daunting.
KIERNAN: It is -- I don't you know -- my kids are five and seven.
EDMOND: I'm on the homestretch, man. My youngest is 17; I can't wait to get out of this.
VELSHI: Wait, I mean, Pat, one of the things is that it depends on where you are and what your income is. The Northeast Urban Centers like we all live in...
EDMOND: Yes.
VELSHI: ...are amongst the most expensive.
KIERNAN: The USDA is going to run all these numbers into an online tool. I think that will be the most useful.
VELSHI: Yes.
KIERNAN: You tell them where you live, is it urban or is it rural, what part of the country is it in.
VELSHI: Yes.
KIERNAN: And what's your income and that really gives you a sense of where you stack up on...
VELSHI: I think that's useful...
EDMOND: Well...
VELSHI: Because I think when people have kids -- I'm not one of them but I think if you have kids, you make some calculations about what those expenses are, but you do leave out some of the obvious stuff. And this thing calculates the food and clothing.
EDMOND: Well, when you talk about why it's so expensive in the northeast, 30 percent of these numbers is housing...
VELSHI: Yes.
EDMOND: ...and we already know how expensive it is to live in parts of the northeast.
VELSHI: Right, you don't necessarily think of that, but everybody who has kids needs space...
EDMOND: Absolutely.
VELSHI: ...and that means, they've got to move into a different type of a house.
KIERNAN: Well, as you said, there's also big discrepancy from low income families to high income families, you've got more money and spend more money on kids.
VELSHI: Yes, but that's a lot money. And then we're talking about college costs after that. So think very carefully.
EDMOND: Well, budget carefully.
VELSHI: Budget carefully. I have kids. I mean, that's a good thing. But budget very, very carefully.
You guys, it's great to have you here. Thank so much Pat, always great to have you back in the building.
KIERNAN: You bet.
VELSHI: Hey, Pat has got something called "Pat's Papers" which you can get the days news on. He calls the newspapers for you and I think everybody should be reading BlackEnterprise. It's got nothing to do with being black...
EDMOND: Yes.
VELSHI: It's a good magazine with a lot of information there.
EDMOND: Just go to BlackEnterprise.com, we got small business universities going on right now.
VELSHI: Excellent.
All right, thanks to both of you for being with us.
Well, getting fired is no fun. But do not give up. There are steps you can take to land the next job. What you need to know and what you need to do coming up next.
(COMMERCIAL BREAK)
VELSHI: With unemployment above nine percent in this country, if you're employed you probably or should be grateful to have a job, even though you might be wondering about your chances of getting a raise.
A recent survey from "World at Work" breaks down the top metro areas for getting a raise in 2009; it might give you some perspective. The Washington, D.C. area came in number one with 77 percent of area employers giving raises at an average rate of 2.3 percent.
The study factored in the percentage of employers giving raises, the percentage of employers receiving a salary boost and the size of raises for middle performers. As you can see, the other list toppers include Tampa, Boston, Philadelphia and Denver.
Raises obviously depend on your performance, the industry you're in, the employer you're at. But it's still helpful to get an idea of what employers in your area might be doing. In fact, that's highly specific to job searching generally.
If you're one of the 6.7 million Americans who've lost their jobs so far in this recession, it's no surprise that finding a job can be as grueling as working.
Our next guest has advice that can help you go from being fired to hired. Tory Johnson is the author of "Fired to Hired"
Tory, thank you for being with us, let's talk a little bit about some very basic tips you've got. You've got some do's and you've got some don'ts in your book, it's a chock full of information.
One of your first dos is to enhance your digital identity. And I think that's got to do with fact that employers today instinctively punch your name into the Internet to see...
TORY JOHNSON, AUTHOR, "FIRED TO HIRED": Yes, we Google if we want to know something about someone or something we Google and when nothing comes up, that's not a good thing. So you can control what comes up about you.
There's great sites like, visualcv.com., LinkedIn, Facebook, Twitter, you should be using all of those things. You should be commenting on blogs within your industry, getting your opinions and you're expertise out there so that you're known. So that it's not just who you know but it's also who can find you.
VELSHI: And if you have a Facebook page, by the way that will show up on Google. So you have to be prepared that your employer is going to want to go to that Facebook page and that everything you've got on there for the public...
JOHNSON: Clean...
VELSHI: ...is clean and appropriate.
JOHNSON: Yes, no digital dirt.
VELSHI: Right, all right fair enough.
Typos. I mean, it sounds silly...
JOHNSON: It sounds so silly.
VELSHI: But so many people will talk about job hunting say there are still too many typos on resumes and letters.
JOHNSON: There is a survey that came out just last week from Accountant; 76 percent of executives said that they would dismiss a candidate because of one or two typos on a resume.
It's something so insignificant, it's sometimes the details that cost you even the phone calls...
VELSHI: Yes.
JOHNSON: ...before you even get in the door.
VELSHI: We're not talking just about young people looking for jobs, we're talking about people across the spectrum and many in fact are over manufacturing workers and people like that. How do you deal with age? JOHNSON: You don't use it as an excuse or as a crutch. When I talk to people who just graduated, they tell to me, "No one will hire me because I don't have experience. Every one wants experienced candidates."
When I talk to people who are 40, 50, 60, and it kills me to think that 40 is old...
VELSHI: Right.
JOHNSON: But people who say like, no one wants us because we're too old.
VELSHI: Right.
JOHNSON: And so in those cases you've got to keep plugging away. So if you are the older person going for a job, that's perhaps the title is lower than the one that you have in the past, you want to say, listen, I look at a position and I evaluate a job more than just a title.
I'm interested in getting into this organization. Here's why I'd be a great asset. I require less training. I can get in there and really hit the ground running. It's about you selling yourself. And not when someone says to you you're overqualified. You say, ok and you hang up. You've got to keep plugging away with them. You've got to keep the conversation going.
VELSHI: Let me hit some of the mistakes hard. The things that you're not supposed to do. Don't bother with the "nobody's hiring" excuse. I think this is really interesting. When we hammer away at how many jobs have been lost, you don't really need everybody to be hiring, you just really need somebody, one person out of you.
JOHNSON: One, one, one. Yes, it's really easy to get sucked in to the statistics. When you see 7,000 layoffs here or 500 layoffs here...
VELSHI: Yes.
JOHNSON: ...and you look at the numbers and you think nobody is hiring. You need that one, and trust me, you can find that one.
VELSHI: All right, let's talk about -- "talking about your needs," focusing on your needs. What do you mean by that? My need is to get a job.
JOHNSON: Yes, my need is to get a job. But the biggest mistake I see on resumes is people write, "I want a position with growth opportunity in a progressive organization." Blah, it's horrible. I want you to know that an employer is going to hire you because of their needs; not your needs.
Ultimately, your needs have to align and your interest have to align with theirs. But focus on how you can serve them, how you are the answer to what they're looking for. VELSHI: And what a lot of people tell me is they've sent hundreds of resumes that they posted on the big job boards. You're saying, it's more about quality than quantity.
JOHNSON: Yes. That is the message that I call; spray and pray. Sort of you spray your resume out there. And you pray that somebody calls and the phones never rings; it's not going to ring. Because you're resume is going into a big black hole. You've got to be the one who've like hustling to make the phone ring...
VELSHI: Yes.
JOHNSON: ...because you're networking, because you're using LinkedIn, and Facebook and Twitter; because you're showing up at industry associations, because you're really getting out there...
VELSHI: Yes.
JOHNSON: ...looking for people to connect with.
VELSHI: Ok, excellent advice, "Fired to Hired" by Tory Johnson. Thanks so much for being with us and good luck in your continued job searches.
Get ready. The CNN Express is back. Find out if we're going to be coming through your hometown this coming week.
Plus, how one North Carolina town is making money on trash next.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
VELSHI: Hi, you caught me. It's 4:00 in the morning here in Abilene, Texas. I got me a corn dog.
(END VIDEO CLIP)
VELSHI: Not one of my prouder moments in life. I'm hitting the road this week heading back out on the CNN Express. But before I go, I thought I'd give you all a little taste -- no pun intended -- of what life on the bus is like and let you know if we're rolling into your town anytime soon.
CNN Express producer Josh Rubin joins me now and he'll be joining me all next week. He's the guy who makes it happen.
Josh, what are we doing next week?
JOSH RUBIN, PRODUCER, CNN EXPRESS: We're traveling around the country. We're basically going to start from Atlanta and we're going to make our way to that most American of traditions -- the fair.
We're going to start in Atlanta, make our way up towards Tennessee. We're going to swing our way over to Missouri State Fair and we're going to end our illustrious trip at the Iowa State Fair in Des Moines.
So there's going to be a lot of different fried food. I know you've had corn dogs but have you ever had a deep-fried Twinkie?
VELSHI: I haven't had a deep-fried Twinkie and when we get to -- we're going to swing through Kentucky a little bit, the southern part of Illinois. But by the time we get to Des Moines, the Iowa State Fair has a butter sculpture of some sort.
RUBIN: The Iowa State Fair every year has a spectacular full-sized butter cow like we're talking full-size cow made out of butter, and this year the extra butter statue is going to be of Neil Armstrong commemorating his walk on the moon.
VELSHI: All right. In addition to the fun we're going to have, and I'm quite looking forward to it. And my eating habits are -- I'm salivating now thinking about all the food we're going to eat. But we're going out there and in between meals we're going to be talking to Americans about the economy, about health care.
You've been on that bus a lot more than I have. I've had a few runs on it. What's the benefit of doing it that way over the way we often get to cover news particularly from officials and politicians?
RUBIN: Well, I get about 60,000 miles over the course of the election. I'm based in D.C. but I traveled all over the country during those two years in the run-up to the election and the election.
You just get out there and you just talk to people, real people. You get off the East Coast. You get out of New York. You get out of D.C. You get into the middle of small towns and small communities all across the country. They really tell you what they're thinking.
VELSHI: We're going to be doing that through a lot of different places. We'll be stopping at a different place everyday. It's always fantastic when the bus pulls into a small town. It's a real magnet for people.
So if we come into any of the places near where you are, come and talk to us, you're welcome to do that. Send us your e-mail. We'll be tweeting from the bus. What's the Twitter address for the bus?
RUBIN: The twitter address is @cnnexpress.
VELSHI: Ok, @cnnexpress.
RUBIN: We'll be following -- we'll be following what you're eating on CNN Express pretty regularly so people will able to chime in.
VELSHI: I'm be tweeting about what I'm eating.
Josh, I'll see you. We'll get it going Monday morning out of Atlanta and we'll spend the next week on the road. If you see us on the road, give us a honk or pull us over and we'll talk to you about what's going on. We'll hear your stories. That's next week, but right now we're going to take you to a small North Carolina town that's turning trash into cash and helping the environment at the same time.
CNN's Reynolds Wolf explains.
(BEGIN VIDEOTAPE)
REYNOLDS WOLF, CNN CORRESPONDENT (voice-over): When Barry Edwards sees trash, he thinks money.
BARRY EDWARDS, DIR. OF UTILITIES & ENGINEERING, CATAWBA COUNTY, NORTH CAROLINA: It actually makes money.
WOLF: He works as the director of utilities and engineering in Catawba County, North Carolina where they've been producing electricity from their landfill since 1999.
(on camera): While it looks like I'm walking on a sunny hillside in North Carolina, I'm actually walking on a landfill. Below the ground we have all kinds of trash. And that trash is creating methane; methane that's being pulled up by this well and then methane equals power.
(voice-over): The methane gas powers these generators that feed to the power company.
EDWARDS: Each one of these units you see behind us are one megawatt each. We're putting three megawatts to the grid. That serves approximately 15,000 homes.
WOLF: The county sells that electricity, earning about $650,000 each year.
PHADY IYYANKI, CEO, GE JENBACKER: This concept is, I would say, a role model in the United States. It's being driven by the county not by private fund. It's a profitable organization for American money, and all the profit goes to the county.
WOLF: That profit is not only keeping residential waste bills low but also funding the start of an 800-acre eco-complex.
EDWARDS: We're applying what is known as industrial ecology to waste management and i.e. making one man's garbage another man's treasure, entity to entity. And output stream of one industry is the input stream of another industry trying to make zero waste.
WOLF: For instance, next month construction begins on a bio-diesel production facility that will harness the heat emitted from these landfill powered generators. The heat breaks down the seed from these sunflowers converting them to bio-diesel. The crops are grown by local farmers within the eco-complex.
EDWARDS: What leaves our site is a commodity. What comes into our site, we're going to make a commodity out it. WOLF: The county is not alone. They're partnering with private industry like this pallet factory and this lumber yard within the eco- complex. The wood waste from these facilities will eventually be converted into electricity.
Plans are also set to convert waste water to power as well as on-site plastic recycling. This entire green initiative has been the number one priority for the county's board of commissioners.
LYNN LAIL, BOARD OF COMMISSIONERS, CATAWBA COUNTY, NORTH CAROLINA: I think the biggest overall benefit will be if we see this facility grow and become an economic development tool that will help create jobs for our community.
EDWARDS: We improve the cost of services. We improve our environment. We include every aspect of vocation within our county that we can touch, and it's a win-win for everyone.
WOLF: A victory that will benefit the economy and the planet.
Reynolds Wolf, CNN, Newton, North Carolina.
(END VIDEOTAPE)
VELSHI: Up next, why Richard Quest is fired up about the "#Cash for Clunkers" program.
(COMMERCIAL BREAK)
VELSHI: It's time for "The Ultimate Quest."
The "Cash for Clunkers" program has been very popular here in the U.S. Our good friend Richard Quest joins us from London with a look at how similar programs have panned out in Europe. And Richard, I give credit where credit is due.
If you're a CNN viewer, you first heard about the idea of trading in a car to stimulate car sales here on the show from you, because you were describing that this was happening in Europe. Give us an update. As you know ours has done spectacularly well.
RICHARD QUEST, CNN INTERNATIONAL CORRESPONDENT: This has been a repeat performance because it doesn't matter whether it is Spain, France or Germany, or even here in the U.K. Right across the world, "Cash for Clunkers" or car scrappage schemes which sounds better, car scrappage sounds pretty good.
VELSHI: Certainly the way you say it sounds better.
QUEST: In Germany, for example -- car scrappage schemes up 30 percent new car sales in Germany; in France, up 11 percent compared to last year; Spain, up 45 percent, even in the U.K. It seems to be that everyone has taken the opportunity basically of getting rid of any old banger and what you will...
VELSHI: Here is the question, Richard. A lot of people have been asking me, that's fantastic. We have the best year -- Ford had the best month in two years of sales because of "Cash for Clunkers".
What does this mean six months from now or a year from now? How is this type of program sustainable?
QUEST: Well, it's not. Obviously it's not. But then we're in pretty desperate straits when they were introduced. You don't think governments came along and decided to give away free cash for new cars because they loved us, do we?
I've heard this argument, as you have Ali, many times, that it is just deferring, you know, bringing forward sales from later in the year. Guess what, Ali, so what? At least it means that disaster and ruin haven't happened now. And worry about next year later.
VELSHI: Let's talk about disaster and ruin. We in the United States need the rest of the world to start doing a little bit better to help us out of this recession even though the U.S. helped everybody else get into it. What is going on in the U.K.? Are things looking a little bit better?
QUEST: Yes, the Bank of England -- Quantitative Easing, that famous phrase that we've all suddenly had to learn about, where they print money -- this week the Bank of England decided to print another $85 billion over the next few months.
They have poured more than 10 percent -- 10 percent -- of the British economy back into the economy, not surprising that in "The Guardian" newspaper it is saying new hope that U.K. pulling out of recession.
One thing we do know, Ali, in this country, the recession has been deeper, longer, and more serious than they first thought.
VELSHI: And as you have pointed out many times, it is an international recession so it does concern us how everybody else is doing in the matter.
Richard, you'll keep us posted with "The Ultimate Quest" and of course, "Quest Means Business" on CNN International everyday. Good to see you, my friend. We'll talk to you many more times.
Get Richard at RichardQuest on twitter. He always sends out some very interesting stuff. You can follow me @AliVelshi and next week you'll be following me on the CNN Express. You can also follow Christine on her Facebook and Twitter. Her Twitter is @christineromans.
Make sure you join us every week for "Your Money" Saturdays at 1:00 p.m. Eastern; Sundays at 3:00. Logon 24/7 to CNNmoney.com and have a great weekend.
