Return to Transcripts main page

YOUR MONEY

Double-dip recession

Aired June 13, 2010 - 15:00   ET

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


ALI VELSHI, CNN ANCHOR: Fears of double-dip recession. What does that mean? When an economy falls in recession it slows down slowly until it hits a bottom and from there it usually begins recovering.

CHRISTINE ROMANS, CNN ANCHOR: But when a double-dip recession hits that recovery then becomes short-lived and the economy actually slips back into another recession. So, where are we headed now? What are possibilities this could happen again? Federal Reserve chairman Ben Bernanke weighs in this week.

(BEGIN VIDEO CLIP)

BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Our current most likely outlook is that the economy will continue to recover at a moderate pace. Of course, a double-dip can never be entirely ruled out of course, but right now our expectation is the economy will continue to grow at around a 3 to 4 percent pace this year.

(END VIDEO CLIP)

ROMANS: So, Ben Bernanke not ruling it out, of course, but saying that, what we've been through means you have to keep that possibility out there. There are some people who say 20 percent maybe is the possibility of a double-dip, there are others like Robert Reich, who said that --

VELSHI: Is a former secretary of labor in the U.S. He thinks this it is the job numbers are what are really affecting us. Let's take a look; I put together a balance, a scale of good and bad in the economy. Let's take a look at this. On the good side interest rates remain very low, that allows people to buy houses, to invest in business, if you've got credit.

ROMANS: And you know the average 30-year fix rated mortgages this week was 4.81 percent.

VELSHI: Unbelievable.

ROMANS: They were 4.81 percent for a 30 year fixed rate mortgage.

VELSHI: That generally is good for people. Housing is stabilizing and jobs are growing. I put a "sort of" next to jobs; I guess you could almost put a "sort of" next to housing, too.

ROMANS: Yes. VELSHI: OK, but that is potentially good. We'll talk about jobs in a second.

ROMANS: Good because it's sort of and not bad. That's an improvement.

VELSHI: Let's look at the bad side. Europe. This whole continuing mess in Europe.

ROMANS: Right. You have a Sovereign debt crisis in Europe that's still a real problem there and still concerned about what that is going to mean for the banks who have exposure there. You still have questions about more than just macro economics; you have questions about politics and issues, saber rattling around the world.

VELSHI: So North Korea, and Israel, and Iran these are not issues that affect our markets per se but they affect sentiment about where the world is going and stability in general and markets don't tend to like instability, whether they are about politics or war or anything else.

ROMANS: So a lot of things to talk about and worry about. You know one thing that people specifically when they're talking about a double-dip recession, the mother of all double-dip recessions was back in 1934 and '37 after the recovery, what we thought was the recovery from the great depression. There was another big letdown that was horrible and that's what people think of as the great depression.

VELSHI: That isn't on our chart is debt.

ROMANS: Right. Debt is a very big part of this, because we've been spending money to make sure we don't do what happened in the 1930s and we don't have another recession. And debt is a very big part this equation because debt could actually hamstring us going forward once the economy starts to grow. Let's talk about that with David Walker, president and CEO of the Peter G. Peterson Foundation and author "Come Back America turning the country around and restoring fiscal responsibility."

Also, Dean Baker co-director of the Center for Economic and Policy Research. Dean, let me ask you first as an economist, do you think that there is a risk here of a double-dip recession or is this just I guess healthy concern after all we've been through?

DEAN BAKER, CO-DIRECTOR, CENTER FOR ECONOMICS AND POLICY RESEARCH: Well there is certainly a risk of it. I think the main point is though that the basic growth path is very, very weak. What Federal Reserve board chair Ben Bernanke was outlining was a path 3 to 4 percent growth. Most other estimates are in that same range and given the severity of the downturn you would expect to see growth of 7, 8 percent, that's what we had after a less-severe downturn, 81, 82, '74, and '75. So we are on a path of very weak growth and it certainly could turn negative that wouldn't be my bet but the main point is the economy is not growing nearly as fast as it should.

ROMANS: And Dean in the fourth quarter, we saw the economy kind of come back in the fourth quarter of last year but it hasn't really built on those gains and you are right historically a weaker recovery out of such a steep recession.

VELSHI: Let me put this to David Walker. David you are the president and CEO of the Peterson Foundation, but you are the controller of the United States of America, you are very concerned about levels of debt in this country. Though, if the economy continues to falter, you still think it's acceptable for the government to need to shore up the economy until the consumer fully steps back in and takes up their role in buying things and getting this economy going?

DAVID WALKER, PRESIDENT & CEO, PETER G. PETERSON FOUNDATION: Well Ali as know I was the controller general of the United States, but basically we need to understand the difference between the short term and the structural problem. Our problem right now is we need to make sure that the economy recovers and we don't have a double-dip and we need to do something about high levels of unemployment.

That means that we can end up taking targeted actions that will help to try to stimulate employment, minimize the possibility of going into a double-dip recession. But we have at the same time need to start taking steps to deal with what really threatens the future of this country and our families and those are the large and growing structural deficits that will exist after the economy recovers, after unemployment is down, after the wars are over and after the recent financial services and housing crisis are long passed.

ROMANS: So how do we do that?

WALKER: Time.

ROMANS: We talk about addressing it, we talk about how we have to get our fiscal house in order longer term but in the near term we have to spend. It's a tough balance.

VELSHI: The question most people out there are asking us, if you want to spend where does this money come from?

WALKER: Let me be specific. Not all deficits are equal. About half of this short term deficit today is because of declines in revenue due to a weak economy. About half of it is because of additional spending, some of which are temporary types of actions. We could look at temporarily extending unemployment benefits with appropriate time limits both overall as well as for individuals; we could look at targeted retraining assistance to be able to help people with clearly defined objectives, criteria and conditions.

We could look at selected key infrastructure projects that try to help promote economic growth, enhance our energy and environmental security. For example, distribution systems dealing with alternative energy sources. We can do these kinds of things but frankly the government needs to go about doing it the right way. Historically the government does an extremely poor job of planning and execution and the government has a credibility gap with the American people that it's got to address. VELSHI: OK. So you're being very specific, you're saying if you have to spend money, if the government has to spend money in lew of people spending money be very targeted and be very specific. Dean Baker, you have a different view on where that money should come from, or how we should deal with debt.

BAKER: Well, let me just say, I really applaud, I really appreciate David's comments because he's been an important voice of sanity arguing here that we shouldn't be concerned about the deficit at least in the short term, that we do need to spend money to get the economy going again. Now over longer term, I mean one of the issues that David's pointing out is that we are looking at a situation where we are building up a debt burden.

One of the points I made is that there is very little consequence, very little risk of inflation if the Fed were to simply at this point buy up debt and hold it. It's doing that to some extent but the intention is that it is going to sell that back to the public so that five, six, seven years out we're going to have large interest obligations on their debt. I see no risk at all buying that debt and having the Fed in essence hold it. So what that would mean is that when we're paying the interest on the debt we're accumulating today in 2010-2011 that is going to go to the Fed and the Fed will in turn rebate it to the treasury.

ROMANS: We'd be paying ourselves instead of paying for example other countries who could turn around and compete with us in global markets for natural resources or who can build militaries or who can turn around and embolden their own export -- we keep that money at home you're saying?

BAKER: Exactly. You could do that in a context where we're looking at the double digit unemployment or near-double digit unemployment that we're seeing now or project to have next year. Ordinarily to do that you would get inflation but in this context you're very hard pressed to say how do you get inflation when you have an unemployment rate that is almost 10 percent?

WALKER: Can I jump in here?

VELSHI: Finish us off.

WALKER: Let me jump in here. Look, there is very little risk of inflation in the short term because we still have a weak global economy and unemployment is very high. But look, the fact of the matter is we need more market forces affecting us because we are an improved and unsustainable path. The Fed buying our debt is called self-dealing. The Federal government has a number of special purposenties; they're called GSE, Government-Sponsored Enterprises and trust funds. These are practices that are disconnected from reality.

VELSHI: You're talking about things like Fannie Mae and Freddie Mac?

WALKER: I'm talking about Fannie Mae and Freddie Mac, that the government effectively controls, that it has guaranteed over $5 trillion in debt and it is not owning up to it, I'm talking about the fact that we need to save Social Security and preserve a strong safety net but the government has raided all the trust funds, there is no money there. Let's get real people. We are the greatest country on earth and at the same time we're not exempt from the laws of prudent finance and we're fundamentally imprudent with regard to our long term course and we need to start doing something about it.

ROMANS: You know gentlemen this is a discussion that we're going to have again because you know what it's not going to get fixed tomorrow. As even evident by this conversation people disagree on what exactly is the core of the problem.

VELSHI: People have different approaches. I do want to ask one thing of David. Is that a World Cup tie you are weighing, is that why you're doing that?

WALKER: You got it my friend; this is the biggest sporting event in the world!

VELSHI: We're going to be talking about it. David good to see you and Dean.

BAKER: He came better prepared than me.

ROMANS: David Walker and Dean Baker.

VELSHI: Good to see you both.

All right. Here is an interesting thought, why to keep the landmark climate change reform could be drill baby drill. We will tell you about that.

(COMMERCIAL BREAK)

ROMANS: Two months ago President Obama shocked supporters when he linked expanded offshore drilling to the clean energy movement. Listen.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Moving towards clean energy is about our security. It's also about our economy. And it's about the future of our planet. What I hope is the policies that we've laid out from hybrid fleets to offshore drilling, from nuclear energy to wind energy, underscores the seriousness with which my administration takes this challenge.

(END VIDEO CLIP)

ROMANS: You hear that wind energy and offshore drilling all in the same breath.

VELSHI: Same place. There was a bipartisan effort to get a climate bill, an energy bill out there, it was derailed by the Arizona Immigration Issue, because the government shifted its emphasis and things started to come apart. Senate Majority leader Harry Reid said he wants to get moving on energy reform by July. But this Gulf oil disaster, this Bp disaster in the Gulf of Mexico has actually affected the ability of the administration to trade more offshore drilling for support for a carbon tax or a cap and trade legislation.

ROMANS: Where are we now on this? Howard Gould is an eco- entrepreneur and Stephen Moore is editorial writer with "The Wall Street Journal."

VELSHI: Stephen, I want to ask you about this, really, does the Gulf oil spill and the fact that President Obama can't put offshore drilling on the table at this point to appease some people, are there really a lot of Republicans who are going to come out and say we really want to keep going with more offshore drilling? Isn't that just politically unpalatable right now?

STEPHEN MOORE, EDITORIAL WRITER, "THE WALL STREET JOURNAL:" Well it may be. There is no question when I talk to Republicans about this issue on hill right now they're kind of in the fetal position. I think it's the wrong position. Look we need the oil. I think we can do it safely, especially in the shallower water. So I think we have to think about the implications on our oil prices and our gasoline prices if we are not drilling.

VELSHI: Let me just take this further. There are a lot of people in Louisiana for instance, so upset about this bill who are saying to the president, don't stop the offshore drilling because it's our livelihood. And, and, Howard, we're not using a drop less oil as a result of this whole thing, so if we're not drilling in the Gulf of Mexico, this isn't a defense for it, I'm just saying if we're not drilling in the Gulf of Mexico, someone is drilling and we're buying oil.

HOWARD GOULD, ECO-ENTREPRENEUR: Clearly the fact is that we use 20 percent of the world's oil --

VELSHI: We are less than 5 percent of the population.

GOULD: And we only produce 2 percent of it. This isn't necessarily making a huge, huge impact. I agree that look, oil's not going to go anywhere for the next 20 years, I mean that's a given but the fact is that we should be clearly; this is clear evidence that we should be looking at doing other resources. There is two scenarios here, one is that oil is finite and the price is going to ramp very, very quickly. Or two, the oil is infinite and the fact is that you're going to have India and China and demand is going to out strip supply. So the price of oil is going up either way. So why wouldn't we use this as a catalyst to start looking at clean energy?

ROMANS: Stephen Moore, let me --

MOORE: Let me just answer that, the answer is because even though oil is expensive, it's much, much cheaper than all of these other alternatives. I mean it's significantly cheaper --

GOULD: Significantly cheaper --

MOORE: Wind power --

GOULD: That's coming from an attitude of right now. I mean the fact is that you look at solar; the price of solar has significantly come out. Last year silicon was $450 a kilogram, today its 47 bucks, so you can't tell me that the price isn't coming in and that's actually with very limited investment in this area right now. Only, out of 365 billion that's spent every year on oil business, you only get $1 billion spent on renewable energy.

MOORE: But let's not forget, you can't power your car and you can't power a lot of our electricity with solar. We're going to need oil. We're going to need it to make sure that our cars run and so on and remember, I think the key point here is, there are a lot of people in the Gulf whose jobs depend on offshore drilling. I mean you made that point Ali; I think it's really important that we're talking about tens of thousands of jobs that would be destroyed if we're not doing the drilling.

ROMANS: Stephen let me ask you about, real quick about Bp, I mean do you think Bp, Exxon for example, after its big debacle what 20 years ago, Exxon went through couple of mergers, came out with great profits, a big more powerful company. Does Bp survives or is this is a completely different ball game here?

MOORE: Christine that is a tough question. They are in so much trouble right now. I think one of the reasons they're paying out dividends is they want to pay out those dividends before the government can get a hold of their money. I think they should be, clearly liable for the direct expenses in the environmental damage that's been done. I think it's crazy as the administration says that they should actually have to pay for the cost of the moratorium on drilling. Bp is opposed to that. I don't see why they should be responsible for the jobs that have been killed by the president's decision not to do drilling but this company I think is in big trouble and you've seen stock shares just plummet in the last couple of weeks.

VELSHI: You think the deal for climate change legislation is in trouble, too, as a result?

MOORE: I think it is in a lot of trouble and I think it simply comes back to the one issue we talk about every week on this show, which is jobs. The carbon tax is a big killer of jobs in the U.S.

ROMANS: Howard is like --

Howard --he can't sit still.

GOULD: Not only is it not a carbon tax but the fact is it's not a job killer, it is a job creator. Most people actually think--

MOORE: How? How can you --

GOULD: If you let me speak for a second I'll tell you. Most people actually think that when you look at clean tech and the climate bill that it's solely focused around wind and solar, the fact is that there are companies out there that take trinity industries for example, this is a 100-year-old metal bending company, five years ago they decided to continue on producing their rail cars but also producing wind turbine towers. Now they're hiring people. These are green jobs.

MOORE: I'm all in favor of your green technologies just don't ask taxpayers to pay for it and there is no way you can make energy --

GOULD: Taxpayers pay for oil? Why shouldn't they pay --

MOORE: You can't make energy more expensive and production more expensive in the U.S. which the climate bill does and expect that to create jobs? It does create jobs; it just creates them in China and India.

VELSHI: Oh, we need one of these World Cup whistles. But I will tell you what, excellent discussion, we'll continue to have it with you two guys but I think we're going to call this carbon tax every week just because it gets Howard so fired up. I love it.

ROMANS: I know.

VELSHI: All right. Guys what a pleasure to talk to both of you, again this is a perfect example of the fact that smart people can disagree on this thing but our viewers need to know what those disagreements are so you can make up your mind.

ROMANS: Look, another example of the Bp disaster, the Gulf oil spill and how every time you peel back a layer of the onion, there are big long term ramifications that could actually change the way you live your life. Thanks guys. Stephen Moore and Howard Gould.

All right. So you are out work, you can't find a job in your field to save your life. The experts say it's time to retrain. But how do you retrain when there are no jobs to retain for? We'll tell you.

(COMMERCIAL BREAK)

ROMANS: Our population is growing, more and more people sending their kids to public schools. You have got schools being built to handle all of the new demand. You would think that teaching an education would be a recession-proof profession.

VELSHI: You would think so. Not necessarily that safety net has been destroyed. Another casualty of the financial crisis. Here's Mary Snow.

(BEGIN VIDEO CLIP)

MARY SNOW, CNN CORRESPONDENT (voice-over): At this job fair for teachers in Austin, Texas, organizers report record turnout. 1,000 perspective teachers attended but this year fewer school district representatives showed up with jobs to offer.

UNIDENTIFIED FEMALE: I know it's hard out there but I'm here hoping that one of these school districts will see something in me they like. SNOW: Organizers say many districts were there to collect resumes but had no open positions. It's a problem across the country. Andrea Miller Hamilton left her job in a battered music industry in New York to get her teaching degree. Did you think it was a safe career choice?

UNIDENTIFIED FEMALE: I did at the time. Two years ago, the market was great, and New York City need teachers desperately. Everyone yeas recruiting, I thought I'll go to school, two years I'll have a job. Five minutes and that's not what happened.

SNOW: So Miller Hamilton bartends to make money until she finds that job. She and her family even moved to New Jersey recently in hopes of better hiring prospects. But the picture is grim. 15,000 teachers in New York State face layoffs. In Illinois, it's 20,000. And in California, 26,000. Nationwide 275,000 teaching jobs are on the line according to a national group of school administrator. A big reason why stimulus money is gone.

NOELLE ELLERSON, AMERICAN ASSN. OF SCHOOL ADMINISTRATION: Those stimulus dollars were much needed and much appreciated but it was one time money and that money is running out.

SNOW: While educators are hoping for government help an effort by Democratic lawmakers to provide an additional $23 billion in stimulus in schools so far has stalled. Critics say Uncle Sam's pockets are empty.

THOMAS JAMES, DEAN, COLUMBIA TEACHERS COLLEGE: This is the deepest dip we've seen since World War II.

SNOW: Thomas James is the dean of Columbia Teachers College who says some graduates are getting jobs.

JAMES: I think they're doing better in some fields, such as special education or in math and science. Also for English language learners, that's another field. But I would say the broad answer would be its tough. It's a tough summer for teachers.

SNOW: Mary Snow, CNN, New York.

(END VIDEO CLIP)

ROMANS: Certain in my sister's schools and a lot of other people I know who are teachers, people they know are losing their jobs or they are still waiting to find out. You don't find out until August if you're on.

VELSHI: It's a profession that is getting bashed a lot these days, in all of these efforts, race for the top and improving public schools. There is a whole segment of Society that says its teachers to blame that's not a fair way to do it. They're getting blamed a lot.

ROMANS: It is a very big system with problems and teachers who are out of work. It turns out that lots of folks, not just teachers are finding themselves jobless after retraining. I mean, this is fascinating, a study commissioned by Labor Department shows; it showed that laid off workers who retrained found the benefits in earnings and employment to be small or nonexistent compared with those who didn't retrain at all, you heard me say for years, we don't do it well in this country retraining.

VELSHI: David Walker said it very well at the beginning of this show, he said what if you retrained with specific benchmarks, and one of the problems is if your training is not very organized thing.

ROMANS: It's not very organized and you can retrain like this young woman in this story. You can retrain for something that seems like it is going to be a good bet down the road and the economy shifts much more quickly than your skills and my skills could shift.

VELSHI: And the three years it might take you or the four years it might take you or the place that you're living in might not be --

ROMANS: All of these things. People have done a good job retraining in health care for example, people who worked in construction, a man who worked in construction, he retrained to physical therapy, you can get $100,000 or more if you're in the top percentile in physical therapy. There are also a lot of drops right now believe it or not in trucking.

VELSHI: Yes, there were a lot of jobs lost in trucking. It was of the fastest growing industries in the United States, looking for a few good drivers right now. About 400,000.

ROMANS: Believe it or not. 200,000 drivers they'll need by the end of 2010, another 200,000 by the end of 2011. I have a counter intuitive take of this actually. So there is a lot of retirement. People retiring.

VELSHI: There are new rules which are taking all truckers off the road.

ROMANS: Also, we and this is where I bring--

VELSHI: We lost 150,000 in the recession.

ROMANS: That's right. So now they are starting to see hiring again but also remember one of those reasons is because we're importing so much stuff again. You look at our trade deficit again, China's exports, very, very big. Any hint of recovery in the American economy, we're buying cheap stuff again.

VELSHI: Where was the biggest cuts in recession?

ROMANS: You have to ship that --

VELSHI: Biggest cuts were in manufacturing.

ROMANS: Right.

VELSHI: You don't manufacture here, you manufacture elsewhere. It comes to the ports, the stuff that you buy from elsewhere and those trucks take that stuff from the ports to stores that we buy them at.

ROMANS: I'm not really -- ready to concede it was good to get rid of manufacturing jobs.

VELSHI: No, no, but I think you are right that it may have something to do with the fact that we need more truckers.

ROMANS: It does.

VELSHI: All right. So many American cities are in trouble that means big cuts to police, schools and other services. What does it mean to your hometown? We're going to talk to three mayors of three troubled cities coming up next.

(COMMERCIAL BREAK)

VELSHI: Three mayors walk into a TV studio in Oklahoma City.

ROMANS: Usually there is one mayor in Oklahoma City but not this weekend. There are actually hundreds of mayors in Oklahoma City for the annual U.S. Conference of Mayors and we have two who are there and one who is not there but decided to join along and tell what is going on in that town.

VELSHI: Well you know, high on the agenda, obviously, going to be tackling economic problems that are hitting so many American cities. Houston Mayor Annise Parker and Philadelphia Mayor Michael Nutter they join us now from Oklahoma City, and Birmingham Mayor William Bell.

Mayor Parker of Houston, let's start with you, give me a sense of what you have had to face coming into office as a new mayor in a major American city. What are some of the changes you had to make that you're not comfortable with having to make but they are necessary because of the recession?

MAYOR ANNISE PARKER, HOUSTON: Well, not any city in America that's not dealing with the current economic climate. We're fortunate in Houston that I've been able to balance the budget without having to furlough or layoff employees but cities are service organizations, the bulk of our expenditures are personnel and overhead. Approximately 75 percent of what we spend in the city of Houston goes to our employees and they provide essential services, so if cut spending in a city, you cut people. And that in turn affects the local economy and there is a feedback loop that you don't want to get into.

ROMANS: Well you know Mayor Nutter, that feedback loop, you don't have any control over in some cases, and I mean this is sort of handed to you guys. Here you are on the ground as a mayor of a big American city and a recession has really limited your choices. You have got a lot of bad choices basically that you have to make. How do you make those?

MAYOR MICHAEL NUTTER, PHILADELPHIA: Well, they're all bad choices, Christine. And as Mayor Parker said, when the bulk of your dollars are going to personnel, benefits, and the overhead of a major enterprise, when you cut people you do cut service. And so, somehow we have to further explain to the public and others the people who watch what we do, they just say, well cut spending. OK. I mean, it is kind of like you want to say I wish I'd thought of that. We're cutting spending. We've cut back on people but that has a negative impact on service and then the citizens come back and say, no we don't want you to cut services. So there is a disconnect out there.

VELSHI: Interesting.

NUTTER: This is all across America that people are not understanding that cuts in personnel, cuts in programs, cuts, cuts, also eliminate service, so the choices here are all bad. And you try to maintain your core functions. Police, fire, EMS, health but then you have other things that citizens need or want. You have to pick up the trash. You need recreation centers, you need libraries. We have health centers; other people have other health facilities. So, these are all bad choices. They are tough choices and but that's what we were elected to do is make the tough choices and stand up and explain them to the public.

PARKER: You fall back on the core public safety issues and the quality of life services begin to suffer very quickly.

VELSHI: Mayor Bell, this is interesting, because I think what Mayor Nutter said was very interesting, that you wish when people make these suggestions that you feel like saying I wish I'd thought of that before. But what other things do you think about because you could cut pay to public service workers, you can lay them off, you can close some of those services that Mayor Parker is talking about. Or you can make sure that you're not raising taxes or maybe you have to raise taxes. How do you prioritize which road you take?

MAYOR WILLIAM BELL SR., BIRMINGHAM: Well, first of all, you have to look at what is the basic role of local government? Basically it's to provide public safety services as well as garbage services and things of that nature. And you have to meet your basic core services and then you look at those services that are not essential but maybe the public relies upon them and make sure that you try to maintain some semblance of having those programs in place. The biggest problem that we hate to see happen is that those non-departmental agencies that depend on local government for a portion of their funding, they're the first ones to be impacted --

VELSHI: Such as?

BELL: For example, we have a program Called Kid One that provide medical services for children with chronic illnesses by taking them to the doctor's office and things of that nature, we provided funding for them. That's not a basic service of city government, so when you're faced, as I was with $77 million deficit we had to clear up within two to three months before the end of our fiscal year that along with our programs were some of the first to go.

NUTTER: Ali and Christine, one other issue that I want to mention to you, in addition to local government challenges, many of our states have serious financial challenges. In Pennsylvania, Governor Rendell is relying upon $800 million in F-map money coming to Pennsylvania. If that doesn't happen if that program is not extended, as they say, stuff rolls down, it's going to roll to our front door step and have further impact on the city of Philadelphia and many other cities all across the nation. So it is not just the fact that our local tax revenues have been hit hard by the recession, it's also what happens when states have to make cuts and all those cuts end up on the backs of cities and local governments.

ROMANS: Mayor Parker, we leave the last word with you that are exactly right. It ends up; the last place it ends up is there at your desk where you have to figure out how to make these cuts when you have revenues that are down. How are things going to look different for a person who live in Houston a year out from now or does the economy start to grow and that takes some of the pressure off?

PARKER: Well we're all hoping that the economy starts to grow but you can't depend on that. You have to bring your budget into line with the current realities. And there are cuts in services, there have to be. We're also pushing more costs off on to our employees; we're all dealing with health care costs. We, too, are looking at self- insurance but we're also pushing more of the cost of the current health care benefit on to our employees. I socked our retirees why a big health care bill and we're looking at outsourcing a number of the services that we provide. I am not a big believer in the fact that the private sector can always do it better but sometimes when you're looking at that overhead on our personnel and there may be opportunities, so we begin to unload pieces of things that we've done for a very long time.

None of these choices are ones that we'd like to make. There are always efficiencies because technologies change, circumstances change. But the core issues are, you have to bring your revenues in line with your -- rather your expenses in line with revenues and many of us have made the choice in this economy not to look to the taxpayers but to cut what we spend.

ROMANS: All right. Best of luck to all of you. Because every one of those decisions you're making are affecting the daily lives of the people who elected you. So, that's a big responsibility. Thanks to all of you. From Birmingham, Alabama, Houston and Philadelphia. Thanks.

VELSHI: Well there is a recession and then there is the he- cession. Men lost their jobs in greater numbers than women in this past recession. That means the number of dads are staying home simply because there are no jobs for them. One group of dads is dealing with unemployment, coming up next.

(COMMERCIAL BREAK)

VELSHI: Mr. Mom for some dads is a choice, but others would rather be working, instead, they are taking care of the kids while their wives work to support the family financially.

ROMANS: You know and it use to be the women had the choice you can stay home with your kids or you can go to work. But what happened in the recession is that women are the ones who have a lower unemployment rate, 8.1 percent is our unemployment rate, adult men, 9.8 percent. So, in some cases women have lost that choice, they're out in the work force, dad's at home. Rafer Weigel will look inside one group offering support to dads dealing with life without work.

(BEGIN VIDEO CLIP)

RAFER WEIGEL, CNN CORRESPONDENT (voice-over): How you doing?

JIMMY BARON, CREATOR, "DADS BETWEEN GIGS:" its guys that are stay-at-home dads.

WEIGEL: Jimmy Baron started this group. Jimmy what made you decide to create this organization?

BARON: Well, it was my own experience. I mean I was out work for three and a half years.

CHRISTOPHER SMITH, UNEMPLOYED ARCHITECT, STAY AT HOME DAD: When I was let go, that morning, I did two interviews that day. And was thinking you know, this may not be so bad. I'm an architect and I've never been out of work before. I'm going on 18 months or so with four kids. It's very stressful. I just never thought it was going to be like this.

BARON: We're talking about guys that are highly trained, guys with masters degrees, education, who are now in these Mr. Mom roles and it's not a typical position for most guys.

BRUCE LAWSON, UNEMPLOYED CHEF, STAY AT HOME DAD: Being overqualified more than anything, I get that more than no responses because they look at executive chef and then some of the jobs I'm applying for just to get a job, line cooks.

SMITH: We're supposed to be the main bread winner. My now ex- wife, I also went through a divorce during this 18 months and you know, I think it just stressed the family out too much.

WEIGEL: It can be more difficult for a man being a stay-at-home dad.

BARON: You know, we're not wired the same as women are and I think a lot of guys, when they go out and go someplace and they're the only guy, I think they may feel embarrassed or it's also you know, you're not going to talk to the other moms on the playground.

LAWSON: Ratio of 10-1 of mothers versus guys, sometimes he'll disappear on the slide and I'll get looks like he's a stalker.

WEIGEL: Wow. Do they look at you strange, is there a stigma being the dad at the park with your son and your daughter?

NATE ELLISCU, STAY AT HOME DAD: I'd say so. You get the, why is this guy here? Why isn't he out and working while mom should be here with the kids?

WEIGEL: The guys here are really thankful that there is something for them to do even it is for an afternoon every few weeks.

LAWSON: I just think it's nice to hang out with other dads who are going through the same boat.

ELLISCU: Have a good time, get the kids together. The male on male bonding type thing going on. Instead of getting with moms and their kids.

WEIGEL: You almost don't want to be able to see them at the next gathering because maybe that's -- shows that they've turned their circumstances around?

BARON: You want nothing more than for some guy to say, hey, I met another guy at Dads Between Gigs and he knew a guy and we networked and now I got a job.

SMITH: I see things are turning, just holding on. Just hoping my time will come again.

(END VIDEO CLIP)

ROMANS: I've been doing a lot of research about getting a job and networking is the number one thing. That's exactly what that group, that's exactly what that group is about, is about networking.

VELSHI: Let's bring Max into the conversation. CNN contributor Max Kellerman joins us as he does most weeks.

MAX KELLERMAN, CNN CONTRIBUTOR: I asked my father about this, he's a shrink, he has been in the field for over 50 years, he said actually some of the people he sees, some of the guys when they're out of work they actually like it. It's, they may not brag about it but they actually don't want to face the pressure but he thinks a minority and most --

VELSHI: I know a few of those and they are quite happy.

KELLERMAN: Mr. Mom and they love it. But mostly it is a dis- empower situation for the man because the one who brings home the paycheck really assumes control.

ROMANS: Max will stick around. We have more to talk about.

VELSHI: Because we're going to talk about football. He loves soccer.

ROMANS: He knows and loves sports, I'm not sure he's a big soccer fan.

VELSHI: You say football here in the U.S. and people think, of course, of Payton Manning and Drew Braes (ph), anywhere else in the world football means Renaldo and Rooney.

ROMANS: If those names sound foreign to you, you're not alone. Next why the World Cup is a really big deal around the world.

VELSHI: And why Max is going to watch every one of the games. Stay with us.

(COMMERCIAL BREAK)

VELSHI: All right. We are back with Max Kellerman. Here is a number that you may not believe; 3 million kids play soccer in the United States. That is the highest youth participation rate. It's ahead of Boy Scouts, Girl Scouts and little league.

ROMANS: And here is what we do, we watch all these little kids play soccer and somewhere down the line it drops off the radar.

VELSHI: You get one good head butt, and that is it.

KELLERMAN: You know headers cause brain damage.

VELSHI: Now you tell me, Max.

ROMANS: Yet we cannot crack the big three, football, baseball, basketball. The rest of the world looks quite different. Ali, maybe because you were not born American is why you can do this.

VELSHI: This is a replica ball from the World Cup. I'm a big World Cup fan. I stayed up reading "Sports Illustrated." Everything you have to know about, everything there is to know about every player. Max, you are not as enthused about this as I am.

KELLERMAN: I was born here. The reason soccer is so popular worldwide primarily I think is because there's much less competition for the entertainment worldwide. If you look at a full generation, maybe more than that already raised in soccer which is a great idea, everyone can participate. You get to run around. It's great exercise for kids. There are soccer moms. Everyone knows what that means. It does not translate. Finally now after all of that and billions of dollars, it's sort of, kind of catching on. It seems the editors of magazines have wanted it to catch on for decades now.

ROMANS: But we have 715 million people who will be tuned in for the last World Cup in 2006.

VELSHI: That's the big ball there.

ROMANS: That's 715 million global viewers.

VELSHI: How many Americans are in that group?

ROMANS: Seventeen million that's it. So is soccer important? The world says yes, America says maybe.

KELLERMAN: You have to admit if you're a soccer fan. I'm a huge baseball fan. I admit baseball is not so intrinsically compelling. I love baseball maybe above all team sports because I grew up in a baseball culture. Most people around the world who grew up in soccer cultures love soccer, I don't think soccer is as accessible as basketball for instance which why basketball is growing faster than the rest of the world.

VELSHI: I think there is nothing more accessible. Kids love it because you just follow this ball around the court, around the field.

Bottom line is, more people are going to watch, more Americans are going to watch this time than the last time. Very surprising even when you walk around CNN, do you think everybody is watching the news?

ROMANS: I accidentally called it golf on "American Morning." Jamie Craft the executive producer almost killed me. He is crazy about soccer.

KELLERMAN: Hey listen I'm more interested in it now than I've been in the past. Since Pele played with the Cosmos.

VELSHI: That is about the last soccer player that most people can name.

ROMANS: Coming up, Ali's prediction on who will win the next World cup. But first a small publisher who finds a recipe for success in this week's "Turn Around."

(BEGIN VIDEO CLIP)

VELSHI (voice-over): This is no Harper Collins or McGraw Hill or Penguin. Good Books is the best-selling publisher you never heard of and for good reason. They make their home here, not in the big city but in the Amish and Mennonite Community of Lancaster, Pennsylvania.

MERLE GOOD, ONWER & FOUNDER, GOOD BOOKS: We began in 1979, just publishing two small books. And then the next year we added six small cookbooks and then the next year several more.

ROMANS: But Merle Good and his wife Phyllis could never imagine how their fate would change 20 years later.

PHYLLIS PELLMAN GOOD, OWNER & FOUNDER, GOOD BOOKS: We were putting together our publishing list for the upcoming season. We had a cookbook on that list that was not coming through.

ROMANS: So Phyllis stepped in with a book of slow cooker receipts, solicited from friends and local woman actually called "Fix It and Forget It."

P. GOOD: There was a real appetite for these books. They were brought into the stores and suddenly we were getting orders for reprints.

ROMANS: Without a single advertisement in the first year sales skyrocketed.

M. GOOD: Our sales increased 1,000 percent that is ten times in one year. Most people talk about being up 10 percent or 50 percent is scary. Doubling is really scary. We were up ten times in one year.

ROMANS: The success can come at a price. The Goods worried that their big hit could bankrupt their small business.

M. GOOD: We said we've got to suppress sales so we can build our cash and do the printings because you're extending credit. Most of the stores get 90 days but you've got to pay your printer in 30.

ROMANS: By 2001, the book had hit "The New York Times" best- seller list.

M. GOOD: We built up our cash so we were never out of books.

ROMANS: Today the "Fix It and Forget It" series includes six books.

P. GOOD: The recipes were simple, a big point. People don't have time to cook. People are also not very confident in the kitchen anymore. These are very, very simple recipes.

ROMANS: Prep time rarely exceeds 20 minutes and every recipe is tested by one of Pellman-Good's hand-picked testers.

P. GOOD: We want to know what kids think, we want to know what foodies think. I look very carefully at those comments when I decide whether or not this recipe merits being in the book.

ROMANS: Books that have now sold nearly 10 million copies.

P. GOOD: It's sort of an out-of-body experience. You know kind of pinch-me thing, where we had just been a small publisher going along, doing all right. Not expecting major, major sales. I think we just were astonished.

ROMANS: Christine Romans, CNN, New York.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

ROMANS: All right. That wraps it up for this week's show. You can join our running conversation on Facebook and Titter @Alivelshi and @Christineromans.

VELSHI: And make sure you join us every week for YOUR MONEY, Saturdays at 1:00 pm Eastern, Sundays at 3:00. You can also log on 24/7 to CNNMONEY.com. Hey all next week I'm going to be back on the CNN Express in the Gulf coast. But we will see you, Christine and me every single day a couple times a day.

ROMANS: Who is going to win the World Cup?

VELSHI: I think it might be Brazil. Maybe Spain. I will narrow it down in the next couple of weeks. Have a good one.

ROMANS: See you later.