Return to Transcripts main page

YOUR MONEY

G-20 Summit in Toronto: What They Could Agree or Disagree on Could Affect Jobs, the Economy, Peace and Security; BP and the Oul Spill

Aired June 26, 2010 - 13:00   ET

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


CHRISTINE ROMANS, CNN HOST: World leaders are in Toronto and what they agree on or don't agree on could affect jobs, the economy, peace and security. Welcome to YOUR MONEY. I'm Christine Romans.

ALI VELSHI, CNN HOST: And I'm Ali Velshi at the G-20 Summit in my hometown of Toronto. Leaders and finance ministers from the U.S., France, Germany, United Kingdom, India, Saudi Arabia, Spain, Vietnam, just to name a few. Also representatives from world organizations like the UN, the International Monetary Fund and the World Trade Organization. They are all here. The mission is for industrial and emerging market countries is to discuss issues related to global economic stability.

ROMANS: And what does that mean? It means you, your family, your money and the opportunities here and around the world for people to grow those. We will take a look at some of the biggest issues on the agenda. On the global to-do list, financial regulation here and abroad is coordinating it.

Also containing debt woes, containing the debt issues that are plaguing Europe and threatening to spread around the world. How to coordinate economic recovery and also, Ali, China, China and its currency, an issue that may have been pushed down the agenda a little bit by news earlier this week from China.

VELSHI: Yes that they are going to let their currency move, but just a little bit. Is it going to be enough to balance out our trade relationship with China? But let's start with tough financial regulation. The president arrived in Toronto this weekend with a major victory in his back pocket, an over night deal on financial regulation that took a year and a half to get done.

ROMANS: That is right. Chrystia Freeland, global editor at large, "Reuters." Ken Rogoff, professor at Harvard University and former chief economist at the IMF and Amanda Lang, CBC senior business correspondent in Toronto with Ali. All of us are going to discuss this. Let's start with financial reform here in this country. An over night deal that took a really long time to hammer out with an awful lot of horse trading.

Let's listen to what the president had to say as he headed into Toronto.

(BEGIN VIDEO CLIP) BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We are now on the brink of passing Wall Street reform. At the G-20 Summit this weekend, I will work with other nations not only to coordinate our financial reform efforts but to promote global economic growth while ensuring that each nation can pursue a path that is sustainable for its own public finances.

(END VIDEO CLIP)

ROMANS: Ken Rogoff the president trying to tie the victory he had here in the U.S. right now on financial regulation to you know what he is trying to achieve in Toronto, was it a victory for the president and how much so on financial regulation?

KEN ROGOFF, PROF. HARVARD UNIVERCITY: It was great timing. The whole world mad at the United States for starting this financial crisis and if he goes there without having done anything, there is the chance that the rest of the world will do it for us. It was a big step for the president. Whether the bill will work or not, I don't know. He is surly going to get out a lot of questions by the other presidents.

ROMANS: It was surely fascinating Chrystia to watch all of those lawmakers rolling their sleeves up literally sweating in their shirt sleeves. Through out the night, 5:00 in the morning is when they finally got this reconference. Do you agree that it is a victory for the administration?

CHRYSTIA FREELAND, GLOBAL EDITOR AT LARGE, "REUTERS:" Yes, absolutely. I mean I think that you are going to get some criticism from the left if the bill doesn't go far enough, that they should push further for example on derivadent, on swap trading. But if you think about predictions say, even six months ago, and this bill goes much, much further than people had thought. I think it is a real achievement.

VELSHI: Amanda is with me here in Toronto covering this very closely. Amanda is this going to be something President Obama comes here it is a good victory for him? But the issue of financial regulation is not the same all over the world. What does this do for the U.S. and what does it do for G-20 because we've got to look at regulation in the United States and in Europe, in fact, around the world.

AMANDA LANG, CBC SENIOR BUSINESS CORRESPONDENT: As we know, very different and competing agendas there in terms of Europe verses America. I agree that it is a victory for the U.S. and I think for the G-20; actually it is going to make it a better meeting. I talked to Paul Volker last week and said this is a global problem and you're presenting a national solution and he said nothing wrong with leading on this.

If America could put forward a strong plan, a plan that makes sense, a nobody else will come up with something that we then have to adhere to and b we can actually show some leadership in Europe and elsewhere. And I think that has been achieved here. There will be critics saying anything that happens after midnight, as your mom says, is probably not good. But I think for the most part people should be happy to see this.

ROMANS: In Montreal, he was pointing out today that he says that this is bad for Wall Street and it means that you're going to see business going to Dubai and Singapore and the like. But Ken I want to ask you something about the G-8 and G-20 Summits in particular.

The International Monetary Funds issued a warning ahead of these summits saying that failure to get on the right page together is going to mean something like tens of millions of jobs worldwide and $4 trillion to global output that could be at risk. Is it really that important what happens here at this stage of the recovery worldwide?

ROGOFF: Well, I'm not so sure. I think there is a big debate about how much government should keep spending and how much they should worry about their budget deficits. I think they are caught between a rock and a hard place. Their debt levels are blowing up and at the same time their economy is not growing that strongly. I think as long as monetary policy stays with low interest rates that is really the best we can do.

ROMANS: Chrystia I'm wondering I mean there is these competing ideas here. We have part of the world that is reigning in their spending and really concerned about debt levels in the U.S. The Obama administration is still the same; we need targeted stimulus, targeted spending with an eye toward deficit reduction down the road. Are these competing ideas that are not in sync at this conference?

FREELAND: Absolutely, I agree with Professor Rogoff. I think that the big behind closed doors debate is going to be, is now the moment to start hitting the brakes to start worrying about deficit or do you still need to have a light touch on the accelerator of the world economy. I think the real flash point behind closed doors are going to be between the U.S. and Germany.

We have seen them come out strongly in favor of deficit reduction. Saying now that is the thing we really, really have to worry about. Obviously the Germans culturally have a real national fear of inflation, but what you are hearing from the White House is much more of a concern about how the U.S. economy and the world economy still could really stall. So if I were a fly on the wall that is the conversation I would be interested in.

ROMANS: You know Ali, it is interesting, Chrystia brings up an interesting point, because at the end of the week we had a GDP number from the first part of the year, the first quarter that was 2.7 percent. That is weaker than people had been expecting, it is much weaker than the 4th quarter so it is sort of crystallizes the White House view Ali, that the economy is growing but you need to be careful about this nation's growth but you don't pull away the stimulus too soon.

VELSHI: Yes. The problem is when we are all deteriorating; when our world economies were all deteriorating they were deteriorating some what similarly. Now we have a problem where there are remarkably different debt levels, debt to GDP levels in the world, remarkably different growth levels in the world and we are at a G-20 where there are lots of countries represented here. More than 20 by the way who has different problems and different needs and may not agree on what the best course forward is.

LANG: Yes, I think the focus is, I agree on the American, European economy and let's remember, they have very different histories with these things. American history of how to get out these kinds of slow downs, puts it on a different track, you don't stop too soon. Europe has the opposite; they remember hyper inflation being the result.

The thing is it is good that it is happening in Canada. Canada is actually smack in the middle of those two views. Because what America does happens to us and it is very important that they continue to stimulate. On the other hand we believe in austerity and getting the fiscal house in order. So there maybe some good brokering going on here from tiny little Canada, maybe it makes sense that the G-20 is actually in Toronto today.

VELSHI: Well this will lead us to a conversation we are going to have a little later on in the show Christine about how relevant this actually is. It is costing a lot of money to host the world in Canada. But do these things actually amount to something; we are going to talk about that in a bit, Christine.

ROMANS: All right. Or is it just a treadmill of global conferences and summits and what really gets done. We will talk about that.

Also next there are more than 20 nations represented in Toronto this weekend but the one nation is going to get more attention than the rest.

(COMMERCIAL BREAK)

ROMANS: The People's Bank of China said this week it will take steps to let his currency trade more freely, it will have a more flexible foreign exchange policy. What does that mean for us at home? Well this is a big bone of contention between the U.S. and China for some time.

Here are the possible influences on the U.S., I say possible because it depends on how they implement this. But this would make anything made in China in theory more expensive and this could make made in America a better deal and could help more U.S. manufacturing jobs see some relief there.

It might also lead to higher import prices, higher prices for those things that you buy at Wal-mart and the big discount retailers and all kinds of different consumer products. And could eventually lead to higher interest rates. So is this a politically savvy move leading up to the G-20 Summit? Maybe the timing here is something that is interesting to note where China's currency value was set to become a headline topic.

Ali what are they saying there? VELSHI: Well, I think China is going to come in this wanting to keep a lower profile, I should tell you, and China has a massive delegation here in Toronto. Not just the premiere but a whole lot of deputy prime ministers and a lot of ministers, more than they have ever taken anywhere, and a whole boat load of business men meeting here with other business people from all over the world to do business.

I think China would like to play a little lower down the agenda than it was hoping to because as you said this, the things you describe might happen and they might not happen. Because China might not let its currency do enough to make enough of the difference. Although, the moves they made in this past week have not been really substantial. It is more philosophical move but we don't know how this is all going to play out.

ROMANS: You know Ken one of the things that I think is interesting too is that one way that this is played this week, this China currency move was that this shows that maybe China has confidence in the global recovery and China really is doing this for its own best interest to try to re balance or better balance its own economy. Where do you weigh in?

ROGOFF: Well that is how they spun it. I think it was a master stroke. They said well, we might do something but we are not promising how much but we are thinking about it. I think Ali had it exactly right. It depends on how much they do. You will probably are not going to notice it much, frankly.

ROMANS: So what does that mean, Chrystia for the American manufacturing groups or those worker groups we're saying, we'll believe it when we see it.

FREELAND: I think they are absolutely right, I hate to be a terrible cynic, but I think we should find out who are the media strategists for the government of China, and these people should form their own global pr company immediately. It has been a master stroke. It has been absolutely brilliant.

They got the chart about how made in China will be more expensive and great for U.S. manufactures, but actually, they have done absolutely nothing. So a little bit of heat taken off of them ahead of the G-20. People can't really yell at them and say hey you guys have to, look we've done it we are going to be more flexible and yet they haven't committed to appreciating at all.

VELSHI: Amanda, what do you think they gain by doing this here before they come to Toronto? Do you think it does actually helps China and do you think they will ultimately move their currency and let it rise more so that it does make a difference for jobs in the United States?

LANG: Both of those things, I think that they did it in order to take this issue off the table as a bone of contention and I agree that they jaw boned it without actually committing to single thing. We all said it will devalue, the word devalue is nowhere in the statement. In the long run though, it does make sense. The Chinese consumer domestically needs purchasing power. So ultimately yes, the currency will float freely but not right now.

ROMANS: With the Chinese it is always ultimately right? I mean it is always down the road, eventually. There is a lot of power in Toronto, but will anything actually get done and the big question, is the G-20 still relevant?

Plus why you can be angry at BP, but there is not much you can do about it.

(COMMERCIAL BREAK)

ROMANS: So, besides for giving Ali Velshi a convenient excuse to return to his home town of Toronto, why should any of us care about the G-20? Is anything actually accomplished outside of the photo op? Ali, it is a treadmill of summitries, you spend all of this money and you have all of these dignitaries, do they do anything? Do they talk? Is the work done even before they get there? I have always suspected that.

VELSHI: Well I have to tell you, everybody should come to Toronto. It really is such a fantastic city. But this country is spending an estimated $1 billion on security around this one. We asked people in the streets and they will tell you for what?

What actually gets accomplished at the G-20 so I have been talking to my friend, Amanda Lang, who is one of our old colleagues from CNN, and she is now the senior business correspondent for the CBC. Amanda you think that this money is well spent and that actually something will come out of this never mind what it gets for Canada? But you think something might come out of this G-20.

LANG: I can hastily say I don't think that the $1 billion security tag necessarily well spent. That is a pretty hefty one. But I do think though in a general way it is easy to dismiss these kinds of meetings, as photo ops. But we know in the business world that they matter.

Actually having a drink, talking about your personal lives, it does make a difference it makes things better, smoother and down the road it can help smooth over trouble so to the extent that we know that works for CEO's and we forgive them for their golf getaways, I think we should get the world leaders together they have slightly more important things to talk about.

ROMANS: You know what is interesting though when I look at this agenda from last year Ali and this year, the G-20 in Pittsburgh and then this G-20 there is some pretty similar things on it. I would say that the exception is China, that last year it looked as though there would be a show done with China over currency.

And then some event in Iran, a discovery of a new nuclear facility sort of blew China off the page and then all year behind the scenes about China, and now boom, you know, China comes out a week ahead of time and takes it off of the table so, I mean, the communicate at the end, what would make news I guess from a communicate of G-20?

VELSHI: Well that is a good question. They tend to be largely written ahead of time. There are some issues here that are going to be discussed over the course of the next few days that are going to be very important and one of them is where do we stand on financial reform? It was fantastic that President Obama comes here with some sort of an agreement on financial reform in his back pocket.

But we tend to think that it is just America that needs to worry about this. What we think of as effective financial reform is not the same as Canada thinks about it or Europe thinks about it or China thinks about it. So that kind of stuff has to be discussed.

There are other issues out there that do need to be discussed. A lot of this is technical; there are a lot of technical meetings behind the scenes. Chrystia you follow this fairly closely. Are they going to actually go forward and achieve things and can we be surprised on Sunday evening when we get the communicate that something has been agreed upon that will actually be carried out?

FREELAND: Well like the rest of you I think in terms of the actual substance, I suspect that there won't be a lot that is achieved. The things that I think that are important though are really two, one is incredibly wonky, and which is I do think some progress will be made around the issue of bank capital.

I know that sounds geeky, but actually that in my mind is the most important element of bank regulation. And the G-20 are looking to get some kind of an agreement on much tougher rules around bank capital which they hope to unveil at the next G-20 meeting in Korea that they are already looking forward to.

This is a meeting of the G-20; the G-20 at the heads of state level hasn't been around for very long at all. The fact that they are still coming together, that this is emerging as the central place where the world gets together, to me that is the most significant element of this meeting.

But not just in the heat of the crisis but after the crisis and that speaks to me, about the big shift we are seeing in the world. That it is not just the G-7 anymore. The world economy, the power in the world is shifting towards the emerging markets. To me when we look back in history that will be the most important part of this meeting.

ROMANS: And that was pretty key over the last meeting you know to say that, the new vehicle for these big decisions will be G-20 not necessarily G-7 or G-8. And that shows you that it is a bigger playing field and all the players will brought in.

But Ken, one of the criticisms that some people say behind the scenes, is still the big three or four that make--the people with the money still make the decisions. Do you really think the G-20 is going to be a more all encompassing venue for making decisions and big deals that do affect the whole world?

ROGOFF: Christine, I first wanted to say to Ali, I grew up across the border from Toronto; my family went there all the time. It is a great city. I'm sure you are having a great time there and hopefully the G-20 is too.

ROMANS: Ken we are out numbered, you and I are outnumbered here with our blue passports.

ROGOFF: You know it is a big improvement over the G-summit that was the rich countries, it didn't have India, China, Brazil, it had no legitimacy and those countries are growing and they are important. They lend us money.

So, I think it has been a big improvement, I think Amanda was also right in saying that you know, it is really become a focus, a year ago in April, a little over a year ago, and they hit a home run. There is no question, they provided political legitimacy for what the finance ministers and central bankers were trying to do to save the global economy.

They couldn't have down that without that covered. At the same time, it is huge the G-20, they are way more than 20 people, it is a zoo. I sat in on G-20 deputy meetings when I was at the International Monetary Fund and I didn't know what was going on. But compare it not to perfection but compare it to the United Nations and I think it is more focused and functional.

ROMANS: I love it, Ali that we have one person here in this five who has actually been in there negotiating in those G-20 meetings. If he says it is a zoo, you know it is a zoo.

VELSHI: You have to remember that and it is very big and what you got is a lot of these developing countries while they don't have the same clout that the larger countries do, in this whole thing, the fact is that ban together and they have similar interest and they do have a seat at the table.

It is unfortunate that Lula from Brazil couldn't be here because of the flooding. But there is a perfect example of a developing nation that has really pushed itself on to the world stage with some great ideas and some ability for us all to learn from each other.

ROMANS: As you say a seat at the table right?

LANG: The president from Columbia is here I talked to him this morning, he flew up so that he could sit beside Prime Minister Harper and look across the table at Barack Obama and say, where is our free trade agreement. They think that means something, so maybe the progress is in the small things here.

ROMANS: Amanda great to see you. Ali, you might be angry at BP. You might want to do everything you can to hurt this company. Next, why there might be very little you can do and what you can accomplish.

(COMMERCIAL BREAK)

ROMANS: So just how unpopular is BP right now? Well, take a look, only 6 percent of people think highly of this company that is according to a recent NBC/Wall Street Journal Poll. In the history of the poll, the only lower scores were Saddam Hussein and Fidel Castro at 3 percent, and Vasser Arafat at 4 percent, OJ Simpson and tobacco maker Phillip Morris not exactly beloved by the public, well, they get higher marks than BP.

Not surprisingly the company stock has been in a tail spill since the explosion on the deep water horizon. Though oil prices have been virtually unaffected, I mean BP shares have been cut in half. Investors seeming to be as sour on this company. As the company is taking a battering in the share price.

Tyson Slocum is the director of Public Citizens Energy Program in Washington and joining Ali at the G-20 economist, Jeff Rubin. Let me just ask you first Tyson at least we don't have rising gas prices and $100 a barrel crude to contend with at the same time we have BP trying to fix this oil spill.

TYSON SLOCUM, DIRECTOR, PUBLIC CITZEN'S ENERGY PROGRAM: Yes, I mean that is because the ban on deep water drilling really isn't having an effect on global supply and demand. Because as big as deep water drilling is to the United States and the context of global supply and demand it is a puddle in the giant global sea of oil and gas.

And so while the people of the Gulf are clearly experiencing some serious problems, we are not seeing the markets respond in kind by pushing crude oil up we still have crude oil hovering in the mid 70's.

ROMANS: And you know Ali, I think what is so interesting is we are on the heels, there is a global recovery most likely underway. But it is a weak recovery and if you had a global economy firing on all cylinders, you could have much higher oil prices which would make the situation much worse.

VELSHI: Yes, and look this is a problem that needs to be solved. Because the bottom line is while some of this problem is you know BP has a bit of sketchy history with it's own safety, the reality is we know that all the other major drillers who are drilling in deep water had very similar plans in case something bad were to go wrong.

As you and I have discussed Christine, the technology for stopping a well, for stopping the oil coming out of the ground is nowhere near the technology that we got for getting oil out of the ground. Jeff what is going to happen because if there really is a threat of a bankruptcy or a takeover of BP, because their stock prices are so low. Is that going to prompt the other oil companies to quickly develop technology to make sure something like this doesn't happen again?

JEFF RUBIN, ECONOMIST: It will do that, but what it might also do is have the same impact on the order of drilling as Three Mile Island had on nuclear power construction. It wasn't the regulator it was the market. If BP is ultimately forced into Chapter 11 bankruptcy, what is the take away for Exxon, or Chevron or Shell to develop fields that are three, four times as deep? It is more than a puddle. Deep water oil has been the source of about 50 percent of world supply growth over the last ten years. It figures decisively in everyone's optimistic outlook of future oil production. If deep water oil is shut off, then the next place we're looking is tar sands and that is not a world of double digit oil price.

VELSHI: You know Christine, I have spent time up in the tar sands, and I know Jeff has. The reality is that a few months ago in Copan Hagen tar sands were the Praia; the world was ganging up on Canada saying this is polluting, this is dangerous and I have to tell you. It is polluting, there is no question about this. It has taken out the wilderness, who knows what the ecological effects are. But Jeff, at this point one for one it almost looks like it is more predictable.

RUBIN: Ironically, the major tar sand producers in Canada are now advertising themselves as a greener alternative. It is ironic that it takes the worst environmental disaster in American history to make the tar sands look green. But I guess that is how low the bar has fallen.

ROMANS: Tyson, let's be clear about why the tar sands is so controversial. Isn't it essentially baking, I mean you are baking the earth right to get this stuff out of it?

SLOCUM: Right, yes, you are injecting hot liquid there to melt the tar sands to get it to the liquid form or you are doing the strip mining operation, where you are just scooping the stuff out, either way, you are putting into basically a chemical refining process.

I have been up to the tar sands area in northern Alberta and it is an absolute ecological disaster. We are getting one million barrels of this stuff a day from Canada, that is going to be ramped up more and there are serious repercussions for the good people of Canada on relying on this extremely toxic ...

ROMANS: So here is the issue. We are around the world trying to find as many ways as possible to get this fossil fuel and harness it. Because this is the grease pardon the pun for the way the world operates. Jeff you written a book about this.

The reason why we can get a t-shirt so cheap or we can send a piece of Alaskan sole 14,000 miles around the globe and you can eat it in Red Lobster and York but it came out of Dutch Harbor, in Alaska and it was processed in China is because oil is abundant and it is there and we are still using it and addicted to it. I mean that is the bottom line.

RUBIN: Absolutely. The global economy runs on oil. If oil gets back to triple digit oil prices we are going to see some massive reengineering of the global economy. Tar sands isn't just dirtier, it is more costly. If America is going to be relying on tar sands to fill up then Americans are going to be consuming less oil.

VELSHI: Which is why Christine, I'm going to get in trouble for this, because I get in trouble for it every time I say it, if you think you are saving the world by boycotting a BP gas station, you may be hurting your local small business owner. The reality is if you want to change the world and you want to have the world subject to the dangers of either drilling for or scrapping oil or squeezing it out of rocks, you got to use less oil.

ROMANS: I think this is a discussion we need to have again. Because I looked at the fuel consumption numbers from after the Exxon Valdez until today. You have to wonder, all this outrage about BP, what will be the outcome? What will be the outcome on deep water drilling, on our consumption, on the alternatives, on nuclear, and all these other things? There is a big discussion and debate still ahead of us. Jeff Rubin in Toronto, thank you so much. Tyson Slocum in Washington thank you.

One million people are about to lose their unemployment benefits. We will explain what you can do about it.

(COMMERCIAL BREAK)

ROMANS: For the third time in the last couple of months, the Senate has failed to extend unemployment benefits, and that means in fact up to a million people who are receiving that check right now could loose it immediately with hundreds of thousands of more in the weeks ahead.

The theory here, of course, is that some Republicans don't think that this is something we can pay for right now. That we can't keep doing emergency spending again and again and again in 99 weeks of unemployment benefits. We need to find a way to pay for, this 99 weeks is an awful long time.

Now there are emergency types of spending that are still available for people who are out of work. You may be eligible for food stamps, Medicaid spending, there is home energy assistance, school lunch programs, community based emergency help. But we are back here with Chrystia Freeland, global editor at large for Reuters. Ken Rogoff, professor at Harvard University and former chief economist at the IMS.

Ken how concerned are you about the long-term unemployed and the cost that we have to be figuring out how to pay for and the politics paying of those costs?

ROGOFF: I'm very concerned about it Christine. I'm a fiscal conservative, I think this is nuts. This is a once in every half century event. People are going to have to have a tough time finding jobs for a long time and it has a lot of physiological effects on people's health. Unemployment insurance is really one of the most important parts of the whole stimulus trying to help the people who really need it. I just don't understand this.

ROMANS: Chrystia you actually talked to Larry Summers, the former Treasury secretary, and he was pretty hot on this too. He did not think it was wise to drop unemployment coverage for these million people. FREELAND: That is absolutely right Christine. I interviewed Larry yesterday and he really echoed what Professor Rogoff had just said. And Larry, like Professor Rogoff, Larry Summers is not a person you can accuse of socialism. But he made two really important points about this issue. The first one was, just purely as an economic matter, paying out unemployment benefits is good for the whole economy.

People who are living on those benefits are people who have a very strong propensity to spend as the economist say. So that money is going to go directly into the economy. You were just talking to me about people you know who are keeping up with their mortgages just because they have that unemployment check.

ROMANS: The reason why they can pay the mortgage right now is because one of the spouses is still getting that unemployment check. With out that unemployment check though they would be on the edge. I wonder Ken, if you take away that check then; do you pay for it somewhere else in society and the cost to the tax payer through the housing market or through other social safety nets?

ROGOFF: Well absolutely. I mean, we have people who will be applying for Security Security early, people who will be claiming disability, you are not going to save that much. This is really a very, very false economy. It is the worst place. And states are hurting. Some of this money helps out states, it is crazy.

FREELAND: I would like to make just one other point, because one argument you often here against the extension of benefits is that paying people unemployment benefits discourages them from looking for work. And so it is actually a false charity that you give people this government handout as it were and actually that creates a dependency and they will continue to be unemployed.

That may be true at other times or periods, but I think it is really important to remember that right now we are in a very unusual economic state. Where the problem is there aren't jobs out there. And just because you don't give someone that unemployment check, it doesn't mean they are magically going to go out and find a job. So I think we have to be careful also about the intellectual justification for not giving people this money.

ROGOFF: That is absolutely right. I strongly agree with that.

ROMANS: Right. This is not a normal bad jobs market, it is an abnormally bad jobs markets and that is where those rules don't apply for you guys. Great conversation, thanks. We'll have to see if the Senate is going to take this up again. I mean it has failed now three times, it has failed to extend these benefits.

There is a very big political and economic conversation about this happening in Washington and sometimes political and economic conversations are different things. One might be driven by one set of policies and philosophies and the other not. Ken Rogoff, Harvard University thank you so much. Chrystia Freeland, global editor at large, Reuters, thanks for sticking around. ROGOFF: Thank you.

ROMANS: Phil Jackson, John Wooden, both had tremendous success on the basketball court. What politicians and CEO's can learn from the best coaches of all time? That is next.

(COMMERCIAL BREAK)

ROMANS: Business and political leaders of the world gathering in Toronto. Task getting the economies of the world on the right track. Perhaps they need to look no further than the sports world. There are those rarely successful coaches that political and business leaders might want to pay attention to because of their unique success on the court.

John Wooden who recently passed away is one. He won 10 championships coaching UCLA basketball. Phil Jackson comes to mind. The Laker coach just won his record 11th basketball championship and lays out his secrets to success in his book, "Sacred Hoops." CNN contributor Max Keller man joins us with a look at what lessons business leaders can take from the world of course business leaders and anyone who works in an office who is trying to figure out how to be a success; Phil Jackson is an amazing character.

I covered him in the '90s. And I covered the Bulls in Chicago. He is legendary for giving books to his players and telling them what they should read and trying to match their interest with their strengths and really pushing the individual to make the team better.

MAX KELLERMAN, CNN CONTRIBUTOR: Yes, he has an interesting philosophy about it. I think Wooden and most successful coaches share a similar philosophy even if they don't get to it exactly the same way. Phil Jackson talks about, to having the players to forge a winning team, you need to have the players connect, to tap into their need to connect with something larger than themselves. So it is a spiritual act in a sense, and then that leads to success because the individual will give up their self interest for the greater good.

In terms of the G-20, though, that is already happened in an international context that has happened, it is called nationalism. So the job here is how do you get an intra terrestrial that is easy if there is an extraterrestrial threat, if there is a doom's day rock coming. But if you see the economy is that rock, then in an international context, there is no agreement about the size of the rock, where it is going to hit, if it is already passed, how much damage it is going to do or how to deflect it.

ROMANS: I would love to see Phil Jackson assigning books to the different G-20 members to bring out their individual strengths and down play the weaknesses. You know his then principle is very well- known; he likes to empower the natural ability of his players of course. He once said, my producers are telling me, wisdom is always an overmatch for strength. I mean all this sounds like he's a thinking man's coach.

KELLERMAN: Wooden was really much more a cliche? Because it's time-tested often times. I think the best books in sports in a G-20 aside, the kind of larger -- in a larger, broader business context; the best books are front office books. Because coaching and managing has to do with optimizing what you already have on the field.

And front office books are about -- are really market based. The most famous example in recent history is Michael Lewis, probably the best nonfiction writer in the world right now. But his "Money Ball" which was misconstrued in baseball circles as saying, go after on-base percentage.

It is really just a business book about evaluating undervalued commodities in the marketplace, identifying them and exploiting the fact that the market place is under valued them. Front office books, I think, there are more lessons contained within for the business community.

ROMANS: I would agree with you that "Money Ball" is one of those books that anybody working in an office, the whole idea of the five- tool player and how sometimes you can go for somebody's who has got one real great successful ...

KELLERMAN: That's all based on the writing of Bill James who's like the grandfather of what's called Saber metrics in baseball, essentially the use of rational thinking to analyze production. And in terms of comparative analysis, if I were to construct, in my experience a cannon of the most important - the 20 most important books in western literature in terms of comparative analysis, I would certainly include Bill James' volumes one and two.

ROMANS: We have your sports, we give you international policy, and we give you a book move. Max Kellerman, CNN contributor. Thanks everybody.

Next, one thing Ali expects to actually get done at the G-20 in Toronto this weekend. But first in this week's "Turnaround," Allan Chernoff brings us a story of a Bronx entrepreneur who built his business one bagel at a time.

(BEGIN VIDEOTAPE)

ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT (voice over): Makes a good bagel.

CLIFF NORDQUIST, CO-FOUNDER, JUST BAGELS: Boiling is the key to a real New York bagel.

CHERNOFF: It isn't the recipe for instant success as Just Bagels co:-founder Cliff Nordquist can tell you.

NORDQUIST: I would actually get in my car deliver bagels, sell bagels, collect money, come back to the office, and pay the bills. It was every day, seven days a week, every day was Monday.

CHERNOFF: Cliff started the business in 1992, selling bagels out of a small window in the Bronx. NORDQUIST: There were bagels coming out of everywhere, they were out of door, they were coming out of the walls. It got to be totally too much. I was in debt on my credit cards. I had owed my mother all kinds of money. And I just didn't quite -- I had business coming in, not enough to take it to the next level. I really needed the right partner.

CHERNOFF: That partner was former banker Charles Contreras who came on board in 1996. He helped build the company's financial structure.

CHARLES CONTRERAS, CEO, JUST BAGELS: The business was small and rough. It was disorganized. It was kind of messy.

CHERNOFF: But Charles saw something else.

CONTRERAS: The line outside the door was very impressive, though. And it told me that there was a product that the company was making that was successful, that was developing a name locally in the neighborhood, and it was something that could be expanded.

CHERNOFF: And expand it did. The wholesaler moved to a larger facility, refocused on frozen bagels.

NORDQUIST: We just keep them in here for about 20 minutes.

CHERNOFF: And increased sales by signing on with major clients. Today, Just Bagels pumps out 250,000 bagels every day across the country, with close to $15 million in annual profits. For Cliff Nordquist, it's a dream realized one bagel at a time.

Allan Chernoff, CNN, New York.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

ROMANS: Ali, there will be a big fancy photo op with all the G- 20 leaders. There will be a communique, it will be written very professionally. What is the one thing that you hope to accomplish in Toronto?

VELSHI: Well, listen, this is my hometown. You can see the beautiful CN tower over my left shoulder. That's actually where they're meeting right down town, everything is shut down here. Lots of griping in Toronto about how everything's come to a stop, it's going to effect business and a cost a billion dollars and this isn't the World Cup where people come here to buy souvenirs, I was at the G-20.

But I think what Chrystia Freeland said earlier is the important point and that is this is not just 20 nations. There are lots of other countries who are here along with their trade ministers and their finance ministers and business leaders who are having off-the-record meetings and side meetings.

The reality is you've got Brazil, you've got Colombia, Nigeria, you've got South Africa, you have all of these countries coming together and getting a place at the world table where they can discuss debt, they can discuss growth, and they can discuss clean energy. They get into the conversation. So what used to be the G-7 and the G-8 used to be a closed circle of rich countries, now we have accepted the fact that the whole world has to be in on a discussion that creates financial stability and growth for all of us.

I think that's a very good development. So I don't know that you'll see in the communique some great success on financial reform and great achievements. But what you will see is that even though we're not in the crisis that we were a year and a half ago the reality is the world continues to come together and think that it's important to have discussions about how we grow together and how we prevent ourselves from getting into really, really bad crises like we're in in the last couple of years.

ROMANS: There will also be bilateral meetings between governments, too. Not just this big massive G-20 trying to agree on something. The U.S. I think it has seven bilateral meetings set up, six of them with Asian nations, interesting enough. It shows you that we're meeting with their trade partners; we are meeting with the people that lend us money, a lot of money. And sort of working with those individual relationships at the same time.

So there's a -- we often talk about the, quote, Shirrpas, these are the people who are the dignitaries ...

VELSHI: They're doing the heavy lifting.

ROMANS: The heavy lifting, so there is a lot of work that gets done. Ali Velshi have a great time in your hometown of Toronto and take it easy.

VELSHI: I will.

ROMANS: That wraps it up for this show. But you can join our running conversation on facebook and twitter at Alivelshi and at Christineromans. Make sure you join us every week for YOUR MONEY, Saturdays at 1:00 pm Eastern and Sundays at 3:00. You can also log on 24/7 to CNNMONEY.com. Have a great weekend, everybody.