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Your Money
The Politics of Money; Bush Tax Cuts: Fair or Foul?; Women in the Locker Room: What's to be Expected?; Australia Tourism Paying for Oprah's Big Trip; Olive Stone's Newest Tale of Greed; Wall Street: Then and Now; Saving Small Business
Aired September 18, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TOM FOREMAN, GUEST HOST: The Bush tax cuts, should they stay or should they go?
Welcome to YOUR $$$$$, I'm Tom Foreman. Ali Velshi and Christine Romans return next week.
The future of your taxes, it's the crucial question both for your money and for the politicians here in Washington gearing up for the midterm elections.
Candy Crowley is CNN's chief political correspondent and anchor of the excellent "STATE OF THE UNION."
Candy, let's talk about the battle lines. Where are they being drawn right now as we look toward the midterms?
CANDY CROWLEY, CNN CHIEF POLITICAL CORRESPONDENT: Well, $250,000 battle line is basically what we're talking about here.
(LAUGHTER)
CROWLEY: Those who make above it, at least a household that makes above it or households who make below it, and that's where it is.
But really what this is a battle over is who is more for the middle class. I think that's why you saw John Boehner a couple of weeks ago saying, well, if I got a bill that was only for middle-class tax cuts, of course I would go ahead and vote for it, sort of giving up the store a lot of his fellow Republicans felt.
So it's really about, running up to an election, who is the most for the middle class. And that's where the rhetorical battle is.
FOREMAN: And it looked like there was a fracture early in the week in the Republican side because of what Boehner said, but then within 48 hours, there was a fracture on the Democratic side.
CROWLEY: Yes. I mean, first of all, you have, I think, more than 30 Democrats writing and going, listen, everybody's tax cuts ought to be extended in January, not just those making $250,000 and lower. And then you had Speaker Nancy Pelosi coming out and saying there's just no justification for having tax cuts remain for the wealthier Americans, but saying in the same news conference, the only thing I can tell you for sure is that the middle-class tax cuts will be extended.
This sort of opened the door for Republicans, who said, well, this means that she's, you know, trying to have it both ways.
I think actually what we saw there was Nancy Pelosi on policy, she doesn't think it's a good idea, and Nancy Pelosi on politics, it may be they have to do all of it.
FOREMAN: Jim Ellis is the assistant managing editor of "Bloomberg BusinessWeek".
This is a complicated issue, Jim. Let's try to simplify it.
What does the economy need more right now, increased tax revenue to tackle this soaring debt or an extension of the tax cut so people don't lose spending?
JIM ELLIS, ASSISTANT MANAGING EDITOR, "BLOOMBERG BUSINESSWEEK": The problem is we can't really afford to have this tax cut done forever. What we need to do is to find some way to spark short-term demand on the part of consumers. Two-thirds of our economy is actually dependent on consumer demand, so we need to do something and so we have got to think about a way to extend the tax cuts, but use it as a stimulus measure.
In another words, have it for a short enough period, say two to three or four years, so that we actually can get money back pumping into the economy, but not have it where it's a noose around our necks for 10, 15, 20 years.
We already know that this is going to cost about $2.2 trillion if we keep it. We can't afford it with the deficits already running over a trillion dollars a year.
FOREMAN: Jim, I want to get back to that, because it sounds like you're talking about threading the needle a bit here.
Mark Preston is CNN's senior political editor.
Thirty-one congressional Democrats, as Candy mentioned a moment ago, have broken from President Obama and joined Republicans urging the extension of the Bush tax cuts for everyone, including the wealthiest Americans.
So is this a sign that the president's sagging poll numbers on the economy have made him a liability for all of these people heading into the midterms? Or, as Jim suggests, is this about the economic reality?
MARK PRESTON, CNN SENIOR POLITICAL EDITOR: No, I think he's certainly a liability for those 31 Democrats and perhaps even more. Look, President Obama is still very well liked by Americans when you ask them in these opinion polls, but in certain parts of the country he doesn't play very well politically.
And look, this happens all the time. You know, President Clinton didn't play well in certain parts of the country, President Bush didn't play well in certain parts of the country. And certainly, you know, looks towards the South, maybe a little bit in the Midwest, you know, some of these Democrats have got to cut President Obama loose and I think that's when we're seeing.
FOREMAN: Jim, let me get back to you on the practicality of this whole thing, because it seems to me the problem is you may have a political reality and an economic reality that simply can't exist in the same room with each other.
ELLIS: You are right. I mean, long term we cannot afford to talk about cutting taxes. We shouldn't do it.
Unfortunately, the economy needs something to jump start it right now and one way that you can jump start is obviously stimulus, which we've already tried, and another way is to, some economists believe, cut taxes.
The problem is that if you can't really afford to cut taxes long term, you have to sort of cobble together something where a tax cut is actually a stimulus measure. That, in a way, is not a particularly bad idea simply because rather than guys in Washington deciding where that stimulus ought to go, what bridge to nowhere ought to be funded, this allows taxpayers to say, I'll spend it in my local area, I will figure out how I want to spend it.
As long as you do it in a way that doesn't go to the top end, which will save it rather than spend it, it's probably workable. You should hold your nose and do it.
FOREMAN: Candy, everybody talks, talks, talks about the need for small business to do just that at the local level. There appears to be help on the way to small business in the form of this $42 billion bill designed to give credit to the smaller companies to spur hiring.
Now, will this do much to repair the president's relationship with the business community, which is rather sour?
CROWLEY: I think any time you can say we passed tax cuts for businesses, that's going to be a plus for any president, particularly for this president which, as you know, has had some problems with particularly corporate business seeing him as anti-big business.
And you know, so yes, but not in time for this election and maybe not in time for the next election, because what basically people are complaining about in the business community, be it small business or big business, is the uncertainty factor. It isn't -- and they all said, yes, we need more credit, we need easier access to credit, we need some tax cuts, but they almost across the board all of them will say, we don't understand what regulation is going to cost us, we don't know really where taxes are going in the long term and that's what is kind of holding them back.
And it's a little hard in this kind of economy to get rid of the uncertainty principle, which is what really is making businesses so skittish about hiring.
FOREMAN: You talked about big business here, Intel CEO Paul Otellini told CNNMoney's Poppy Harlow that the stimulus did not work and that Washington may be doing more harm than good when it comes to getting businesses to spend this money we're talking about.
Listen to this.
(BEGIN VIDEO CLIP)
PAUL OTELLINI, CEO, INTEL: Take the uncertainty out. Businesses can't invest until they have fewer variables and right now there are just too many variables. I don't know what my healthcare costs are going to be, energy costs, corporate taxes, R&D tax credits, you know, and 10 other things.
If I at least know what the decisions are, I can make my decisions, but in the area of uncertainty you can't.
(END VIDEO CLIP)
FOREMAN: So, Jim, some businesses are hording cash out there. What will get them to start hiring in this environment?
ELLIS: One thing is, Otellini said, is that some consistency in policy over things like taxes and also regulations that they care about. There was a lot of uncertainty about where climate was headed, there's been a lot of uncertainly about how aggressively other types of eco regulations were going to go. Once that sort of settles down, people can make longer term investments.
The other thing is that a lot of people just can't invest until demand picks up, and that is a chicken and egg kind of thing. How do you do that? You're not going to invest, you are not going to hire until you have higher demand, but people aren't going to spend and make that demand until they have jobs. So we don't quite know how to jump start that. That's why we turn to stimulus.
FOREMAN: Jim and Candy stay put and, Mark, in particular, because I know you have some thoughts on the saying, trust is earned not given.
We will get to that, why a growing number of Americans simply don't trust their government and how that's holding us back, next.
(COMMERCIAL BREAK)
FOREMAN: So do you trust your government to do the right thing? For most of you out there the answer is a resounding vote of no confidence. Over the last decade the number of Americans who trust the government has dropped almost in half, 42 percent in 2000 to just 25 percent today. Mark, look a number of Americans are out of work and they are out of money. They have not gotten the lift that they have been hoping for from Washington. So how much do you think that has to do with this rising mistrust now or is it something else?
PRESTON: It has everything to do with the rising mistrust. When President Obama came into office there was so much hope that was his whole mantra, I'm going to give you hope and I'm going to clean up Washington.
Well, guess what. Washington is not cleaned up. It's a very hard swamp to drain and there hasn't been much hope. We've seen unemployment rise, we've seen a lot of people out of work and we've seen people losing their homes.
So, as much as President Obama has come in and he has done a lot of things that he said he would do, what he hasn't done is put people back to work.
FOREMAN: Jim, let's talk about Elizabeth Warren. She is a consumer watchdog that a lot of people wanted to see head the new Consumer Financial Protection Bureau, particularly a lot of progressives. So she will help set up this new agency but is she going to get to run anything here?
ELLIS: She'll get to set it up. She'll get to also get started on a lot of the sort of groundwork for some of the regulations that they will be putting in place to regulate issues of credit cards and certain types of bank debt and mortgages.
She'll have a very important role. The issue of course is that a lot of people don't like her because she's been so outspoken particularly about the, that she calls it the tricks that banks have used to get people into bad loans.
People in business don't like regulation. They particularly don't like regulators who have very strong opinions that they don't agree with. Therefore they are going to fight. They have already sort of taken away some of the cloud of this agency at the beginning of the year and now they are sort of going in for the kill to make sure that the person who is the grandfather or the grandmother of this idea doesn't get to be there in a job they really can't influence much.
FOREMAN: Mark, let me jump back to you briefly on this. One of the basic questions that came to mind when I saw this happening though was the Obama administration saying never again will people be cheated or fooled by the fine print in all these contracts.
I thought about my cable company and my phone company and every other company I have a contract with, and I thought no way. It can't be cleaned up. Do you think there's any faith that it really can be?
PRESTON: Faith will be restored when unemployment drops down to 5 percent. Faith will be restored when people aren't getting eviction notices from the local sheriff. Faith will be restored when the economy turns around. I think we should note that President Obama was handed a very terrible hand when he came into office.
Really, politically, his biggest mistake and certainly the biggest mistake of his administration was the hubris that came in with and said we were going to turn it around very quickly and clearly if you are an economist, if you are a scholar or if you are a historian you know you can't turn around an economic slide that quickly.
FOREMAN: Candy, let's go with sort of a counter theory here, because I don't know if I have faith in it, but I want your thoughts on it.
Could the president actually benefit if Democrats suffer big losses in November simply because it's no longer just his economic problem for the next couple of years? If you have near 10 percent unemployment, he could say, it's not just me Republicans are on board, too.
CROWLEY: Sure. Because the president, basically, at this point, if you are going to look at 2012, the next presidential election, he's shadowboxing. There's nothing to fight against. He's got a Democratic Congress, Democratic House, Democratic Senate, he runs the White House.
If you put in - and Bill Clinton proved this, when a Republican Congress came in -- if you have a group to fight against, that certainly is helpful because it gives people a choice of governing in Washington. Right now, the Democrats are running things.
I think the other thing that does is that it gives the president a chance to move to the middle. A lot of people out there are looking at the independents always when we go into any election year, midterm or presidential, it gives the president a chance to moderate. Because in order to win the famous triangulate, it gives President Obama a chance to work with Republicans if they were in charge and to come out with some compromise legislation that he could say, and it worked with Republicans and we came up with this. Because one of the things people complain about so far in this first almost two years of the Obama administration is he didn't change the tone. This would force him to do something that in the end might make him look good.
FOREMAN: Give him political cover to do that, too.
Mark, let me ask you one thing here, if you were in the White House right now and somebody said what's the game changing move we can make to get voters on to our side on the handling of this economy, obviously you can't do it by the midterms, it's just too late, what would you do?
PRESTON: You know, Tom, I wish I had the answer for you. I don't even really know what the answer is.
I think that the administration, again, was dealt a bad hand. A lot of people say that if they didn't go forward with the stimulus, we would have been in a total calamity right now as opposed to this being in a bad depression that we're in right now. Look, I think that we're on this roller coaster ride right now and we just happen to be in a very low moment. I think that the Democrats looked back to the old tried and true measure of you know giving people shovels and trying to get them to work. But a lot of the stimulus money hasn't even been spent yet, so maybe increase the use of this money faster then what we have seen so far.
FOREMAN: A very, very short answer here, Jim. Does it make any difference if the White House changes its economic team to normal voters out there?
ELLIS: Not really. I think for the normal voter what they care about is, do I have a job, does unemployment go down, does my job security go up and more importantly, does my one piece of wealth go up, my home.
FOREMAN: I think you're absolutely right. I think the White House and the people here in D.C. think it makes a difference. I think the normal people, Mark, you're right on the money, if it doesn't change your actually circumstance nothing happens.
Jim, Candy, Mark, thanks for being here.
What if I told you one in five children live in poverty? It sounds like something from a third world country, but it's not. It's the story of what's happening in this country right now.
Think about that. We're going to talk about it next.
(COMMERCIAL BREAK)
FOREMAN: More Americans are living in poverty than any other time in the 51 years that we've been keeping track in this country. Stephen Moore, editorial writer of the "Wall Street Journal", Hal Sparks, comedian, and Carmen Wong Ulrich, personal finance expert and author, all join us now.
More than 43.5 million Americans are impoverished according to a Census Bureau report for 2009. The poverty rate jumped to 14.3 percent. If you take a look back, you can see since the '90s, you will see this is the highest rate since 1994 after a steep drop in 2000.
The president released a statement in response saying that the numbers illustrate just how difficult 2009 was.
Stephen, why are so many people poor in this country?
STEPHEN MOORE, EDITORIAL WRITER, "WALL STREET JOURNAL": We just had a terrible recession and we're still in it. Any time the economy takes a nosedive like we've seen in the last couple years, that's going to cause a plunge in people's incomes.
Unfortunately, Tom, the people that get hurt most in recession are the people at the lower ends of the income scale. Because if a rich person sees a drop in their income, it means instead of buying a Porsche, they buy a BMW. For a poor person, it means that they now are having a hard time just paying the basic bills.
So the hope is let's keep our fingers crossed that when we get into a recovery, we'll start to see the recovery rate reduced and we will start to see incomes rise again, not just for the rich but for everyone.
FOREMAN: And a short answer here, does this also have any reflection on the fact that our savings have dropped so low that so many people didn't have any kind of pad?
MOORE: But you know the one piece of good news, Tom, that we've seen in the past two years, for the first time in about 15 years, savings rates are starting to come up. People learned their lesson.
FOREMAN: I think that is good news. I'm not sure the White House is thrilled when they want spending now.
CARMEN WONG ULRICH, PERSONAL FINANCE EXPERT: Understand, the thing with the savings rate is we have folks that have been out of work for over a year. Now, before this recession, we were telling folks to have three to six months worth of cash savings, and if you were done with that and you still didn't have a job you could tap your home equity.
So it has a lot to do more with not just the savings rate, what has happened to our homes because that use to be a safety net and that is gone, too.
FOREMAN: Yes, all the nets we had to work with, they are out.
When you think about all of this, is the American dream as we always thought about it even exist for impoverished Americans without some major improvements in the economy and the labor market? Is there any way they are going to come up out of this?
HAL SPARKS, COMEDIAN: No. And I think there's actually been a race to the bottom as far as American wages. Regardless of the past 30 years, that's a big factor in this. The reason savings rates were going down was not for all those years and a lot of reason was not strictly because people were being less careful with their money, but because they actually had a lower and lower margin of safety as far as their wages versus cost of living was going.
Now people are saving just because there was nothing. Now they are not spending, they are being very careful with their money and they are sitting on it because they are not trusting the economy right now. The savings rate is not going up because people are like, I need to learn in kind of a depression-era style to handle my money better, but because they are actually afraid this isn't the end of it.
So they are kind of sitting on a little bit of money. It's not a lot, it just statistically looks like a lot because it's across a wider span of people.
WONG ULRICH: As they should be. They should be sitting on that money, definitely, because -- also some of the other demographics, it is not that much, it should be better. We don't have any space, basically, to save. And also, you know, next year there's going to be another measure of poverty.
Stephen, I'm sure you can talk to this, about how next year we're going to be closer about 20 percent in the president's new way of calculating poverty because they are going to factor in child care and paying for health insurance and medical coverage and that's going to bring the number closer to about 20 percent.
SPARKS: For a long time.
MOORE: It all gets back to jobs. If we can get that unemployment rate down and we can get people back into the workforce. Look, if somebody is unemployed, their income is zero and this is something that has caused a big decline in wages.
Let me just say one thing, the last 30 years for the American family has been one of the greatest periods of boom in American history. We've seen gigantic gains in wealth and incomes over the last 30 years. What we've got to do -- in fact, one of the things that strikes me about what happened with the U.S. economy, the hallmark of our economy of the past 30 years has been rising incomes, upward income mobility. One of the reasons we have a lot of poor people, we bring in a lot of immigrants every year. Every year people are starting at the bottom.
SPARKS: I think that softens -- yes, that, I think, doesn't factor the fact over the last 30 years we have two parents entering the workforce and you got household income growing because you have two wage earners. But that variance is very low, if you have two people making 80, suddenly you have a household that makes a 170, 180 with that extra funds coming. That looks like on paper you've got tremendous growth in the household when you've really got two earners making that number.
FOREMAN: Hold on.
Carmen, let me ask you something here, fairly short answer on this. Do you think, based on what Stephen was saying here, do you think we as a culture bought into a mythology over the past 30 years that everything was just going to get better and better and better and we all overextended ourselves?
WONG ULRICH: Absolutely. And there are a lot of people who capitalized on the American dream to get people to buy houses who should not have been able to buy houses.
I have to say as a child of two immigrants, and one illegal by the way back in the '50s, this is not necessarily a problem about the influx of population into the country this has a lot to do with the fact the wages haven't moved very much if you adjust it for inflation since the '70s. And like Hal said this dual income household --
MOORE: That's not true. If you look at compensation to workers -- if you look at compensation over the last 30 years, compensation of the average worker is up about 30 percent, and spending by the average household is up about 50 percent.
There's no question that the average household -- look at all the things the average household has today, they have everything from cell phones to computers, to the Internet, to all these things that 25, 30 years ago people never even had.
WONG ULRICH: They are paying out of pocket $500 to $1500 per family for health insurance coverage; they are paying for child care. Hal mentioned we have these dual income households where both people have to work so there's no safety net. It's an illusion.
FOREMAN: We are going to pay for TV by taking a short break here and we'll be right back.
The queen of ultimate goody bags. Who am I talking about? Well, her latest gift requires a passport, a full day on an airplane and a little bit of controversy.
We'll take a closer look at the real business of Oprah with our panel, stay put.
(COMMERCIAL BREAK)
FOREMAN: New banking rules this week announced by global officials will require banks to put aside more capital as a safety net for hard times to prevent another meltdown. The challenge is to make sure the banks are saving enough money but not so much that it prevents lending and the flow of credit.
Stephen, this is all supposed to go into effect in 2013. Will this work?
MOORE: You just put your finger on the paradox. On the one hand, we do want banks to be safe. No one wants to see another housing bubble where banks are making loans to people who couldn't possibly afford to repay them.
On the other hand, as everyone knows watching this show, especially homeowners and small businessmen, there's a capital crunch right now that banks aren't lending. So those are the two competing, conflicting interests here.
But I do think it's a sound thing to have banks have more capital. We don't want to go back to the days where we had banks like Lehman Brothers and Bear Stearns with $30 of debt for every dollar of equity. That's a bubble that is going to burst.
FOREMAN: So they are digging in the spurs and pulling back on the reins all at the same time.
We all watched this week as Oprah Winfrey surprised her studio audience with a free eight-day trip to Australia. That sounds nice, but what may surprise you about this is that taxpayers down under will actually end up footing some of the bill for this.
The Australian Tourism Department and the New South Wales government will spent about $3 million Australian dollars to fund the trip, and the Australian tourism minister, Martin Ferguson, says it's money well spent. Harpo will cover any taxes that audience members who go on the trip incur.
Hal, this is a nice vacation for Americans. Do you think the publicity is worth it for Australia?
SPARKS: No question. Arguably, if you look how much money they have spent in years past, the shrimp on the Barbie campaign, how much do you think in the hundreds and millions that cost? Spending $3 million to get that group of people over there and back safely, that will be some of the best they have spent in a long time. It's very smart.
FOREMAN: I think "Crocodile Dundee" movie did more for them than almost anything.
SPARKS: And that cost $14 million, not including P&A.
FOREMAN: Exactly.
You know, another story that got the news this week, members of the New York Jets have been accused of harassing a female reporter that entered the team's locker room recently. The incident prompted the NFL to send a memo to all the teams stating that, "By law, women must be granted the same rights to perform their jobs as men, please remember that women reporters are professionals and should be treated as such."
Carmen, there's no question that's the standard -- hold on, let Carmen jump in here -- that's the standard, we should all do that. But it does seem -- I see a lot of people in the hallway saying, well, you're in a locker room with a bunch of guys wearing towels, it is tricky.
WONG ULRICH: Listen, your expectation as looking as wonderful as Ines did and going into the locker room where the men's point of being in that locker room is to get naked and change their clothes, it's absolutely wrong. Of course, there should be levels of professionalism.
But I have got to say, I haven't seen a fellow Latina get this much press since Sonia Sotomayer, but unfortunately, it's about her bum-bum.
FOREMAN: Hal, jump in.
SPARKS: For the record, let's be abundantly clear on two things. Whenever you put a female reporter in a locker room, the whole point from the networks point of view is a pejorative experience, it is literally putting her in that idea of harm's way.
Secondly, let's be very clear on this, football players are awful people. They are the worst --
FOREMAN: No, they are not. WONG ULRICH: No, they are not. I worked with the NFL rookies and NFL rookie camp and I worked with those rookies --
SPARKS: I'm not talking about rookies, I'm talking about the professional football players are meant to be the worst of male everything, male attitude --
FOREMAN: Stephen, what do you think about that?
MOORE: In extraordinary terms. Relax a little bit. I'm not going to touch this one with a 10-foot pole.
Look, I think when you're putting a buxom, beautiful woman in a room with men with testosterone that they are bouncing off of the ceiling you are asking for trouble.
I'm old school, Carmen. I know you're going to beat me up on this, I just don't think women belong in the locker room.
WONG ULRICH: If they don't and they do and they are going to go there please, we're not animals, right? So they can control themselves for a little bit. They can look all they want, but keep your mouth closed so she can do her job and go.
FOREMAN: Hey, Hal, let me ask you a question. What if we ever had and we don't yet, what if we ever had women's sports rise truly to the level of men's sports, do you think we'd have the same thing if a male reporter was hanging around the women's locker while they were changing clothes?
SPARKS: No, women don't talk like this about men.
WONG ULRICH: Yes we do.
SPARKS: But they are very clear to make sure we are outside the room when it happens on purpose, because that's part of the reason for talking about me is when I'm outside, is because it's just them talking about it.
Guys don't do that, we think this will help us get her, which is the dumbest things in the world. Again, football a great example of the worst in men.
FOREMAN: Carmen, let me ask you something.
WONG ULRICH: Go ahead. Tell me. Ask me.
FOREMAN: Let me ask you something. Would you be uncomfortable going into a locker room like that? Do you think you'd - I mean I don't know, sometimes I think we have human nature, which is hard to deal with.
WONG ULRICH: You know what would overrule my discomfort? Looking at the fabulousness that surrounded me. That would totally over rule my discomfort. I would keep my mouth closed, but you better believe I'd get an eyeful. SPARKS: She would be objectifying the men around her, clearly.
WONG ULRICH: In my brain.
SPARKS: We have come this far and that's lovely.
FOREMAN: You know the funny part about this? We have whole industries in this country that are built around objectifying people and then we all say we're shocked, shocked to find it happening.
WONG ULRICH: Not shocked at all.
SPARKS: At a safe distance, though.
WONG ULRICH: Not shocked at all.
And you know what? She should not have been shocked either at all, really. What's your expectation? If you're going to look that way, beautiful and wonderful, and you are going to walk into a locker room, you have to expect it will happen. Not to say that its right, it is not right that it happened, but really, we have to be real about this. None of us are surprised that this happened. Nobody is surprised.
MOORE: That's why we can't have women in the locker room.
WONG ULRICH: I say women can put up with it.
FOREMAN: You're going to get some mail over that.
Stephen Moore stick around. Thanks to Carmen Wong Ulrich, personal finance expert and author and comedian Hal Sparks. Hal has a comedy DVD out called "Charmegeddon." You should check it out.
He's one of the most controversial and outspoken movie directors out there, now he is bringing back the controversial character and the timing is just couldn't be better. Oliver Stone talks about the return of Gordon Gekko and "Wall Street", that's next.
(COMMERCIAL BREAK)
FOREMAN: Before the financial crisis, there was Wall Street in the 1980s, where greed was considered very good, captured in this famous line from Oliver Stone's film "Wall Street."
(BEGIN VIDEO CLIP)
MICHAEL DOUGLAS, "GORDON GEKKO": Greed, for lack of a better word, is good. Greed is right. Greed works.
(END VIDEO CLIP)
FOREMAN: Stephen, 25 years later, has anything changed on Wall Street? Is greed still good?
MOORE: I hate to tell you this, Tom, but I'm a defender of greed myself. If I have a financial manager, I want that person to make as much money for me as possible. I think most Americans do.
But it is true that we have kind of runaway expectations. And to some extent, when you look at what happens with this financial collapse, there's no question that Wall Street just got completely carried away. It was making investments that made absolutely no sense for people. You have the scandals like the Bernie Madoff scandal which decimated a lot of people's pension's and so on.
But there's one scene in that movie that I just love. Remember that scene where Gordon Gekko is walking down the beach and he has a cell phone in his hand? It's like a brick. See how times have changed? Back then, a cell phone in 1987 cost $4,000 and now today they cost $40.
FOREMAN: Tom Ajamie, co-author "Financial Serial Killers: Inside the World of Wall Street, Money Hustlers, Swindlers and Con Men."
Tom, same question to you. What, if anything, has changed since that movie came out.
TOM AJAMIE, CO-AUTHOR, "FINANCIAL SERIAL KILLERS:" Well greed is still there. I think it has gotten a lot worse. Back in the 1980s, there was greed, of course, that got out of control. We had Ivan Boesky, we had Michael Milken and all this insider trading, and that was bad and we knew it was bad, but things even seemed to get worse and worse as time went on.
We had the 1990s and, of course, the tech bubble and the tech busting. Then greed really spun out of control when it affected all of us and almost brought down the entire financial system in the United States of America. Now it's costing us trillions and trillions of dollars.
So it just seems to escalate and in my opinion it could be worse and harming people.
MOORE: Tom, let me ask you this, because I was just half kidding when I said I'm a defender of greed, what I really meant is there's nothing wrong with making money. That's what the American system is about. So define what greed. What is greed?
AJAMIE: The word "greed" I take as advice. But you are right, look, ambition is great. Entrepreneurialism is wonderful. The desire to improve your standard of living all very good. I take greed though as being a very extreme and a negative word. It's when the avarice gets to such a peak that it causes harm and it hurts people and it hurts others.
FOREMAN: Sit on those thoughts for a minute, because the sequel to that movie that defined Wall Street back in the '80s is about to hit theaters, it's called "Wall Street: Money Never Sleeps" and Ali Velshi sat down with four-time Academy Award-wining director and writer Oliver Stone. And Ali asked him how his film captures the financial collapse and the fall of Lehman Brothers and Bear Stearns.
(BEGIN VIDEOTAPE) OLIVER STONE, DIRECTOR, "WALL STREET: MONEY NEVER SLEEPS": We have Federal Reserve board meetings. We have the fall of Bear Stearns. The idea of rumors being floated that can hurt a firm. There's three rumor montages in the movie that sort of show you the power of the Internet and the power of rumor and malicious gossip can hurt a company.
And by the way, you well know that Jimmy Cohen at Bear Stearns went to Washington and he said he thought rumors might have had a very big role in the fall of Bear Stearns. He thinks somebody was betting against him and going short.
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Oliver, back when we were doing this, when we reporting on all of this, the financial crisis in 2008, it sometimes felt like we were in a movie. You captured a lot of that using actual track and actual things that happened on TV and many of the players who were involved at the time.
In fact, I'm hoping my life changes on September 24th, because you made me into a star. I want to show our viewers a little clip that had me in it from the movie.
(BEGIN VIDEO CLIP, "WALL STREET: MONEY NEVER SLEEPS")
VELSHI: Anyone who doesn't admit that is just kidding themselves.
(END VIDEO CLIP)
VELSHI: You have to look a little bit hard to find it, but it's there.
Oliver, you really reached out to a lot of people who had some involvement in this, either from the financial world or from the world of financial journalism. Give me your thoughts about this melding of reality and fiction.
STONE: I like to do that in my movies. I thought you were really a star, Ali. I used mostly CNBC people because they covered this around the clock, they are very good at it. I have many of them in the movie.
But you, when I saw you I knew that bald dome was going to go all the way.
VELSHI: You often in your movies have a particular view that is outside of the consensus view. But in this particular case, history has seemed to have verified the fiction thank you put together. There really were rumors that affected Wall Street. There really were bad actors on Wall Street in many ways.
STONE: Oh, yes. I think that's what the Internet and the television coverage, I mean when we did the original Wall Street we didn't have back-to-back business coverage that you have now. So everybody talking, and I think sometimes too much and they get overheated. The business news has grown into sports or movie news. It's just nonstop.
I'm not so sure that's good for the system, although it's more transparent. It does lead to circles of viciousness and rumor and hype. A stock, as you know, drops. Look what happened a few months ago, the market just crashed. What's going to happen? It does scare me. It's the nature of the modern world I suppose.
(END VIDEOTAPE)
FOREMAN: It's the nature of the modern world, Oliver Stone just said, referring to nonstop media coverage of Wall Street. Coming up, we'll ask our panel if financial reform would have prevented Wall Street's natural meltdown.
Stay with us.
(COMMERCIAL BREAK)
FOREMAN: We're talking about Wall Street then and now.
Tom, before the break Oliver Stone mentioned how business news coverage impacts Wall Street. Do you think it's as grand as he thinks? Do you think that is having an effect on all of us?
AJAMIE: Well, you know, I think there's more real-time information. But I think that is, frankly, positive. I think the financial news and the media has actually been a positive as has the Internet. It is a lot harder to now to sort of hide information.
For many years, the investment bankers and others could hide things and there was a lot of secret deals. Those still go on, but there's so much seepage and leakage now through the various media sources, through the Internet, and I think that gives the general public much better access to information that in the past only the pros had.
FOREMAN: Stephen, the new financial reform legislation, does this really do anything to reign in Wall Street?
MOORE: First of all, let me just say how jealous I am of Ali for getting a cameo. I would love to have a cameo in one those Oliver Stone movies.
Look, I think there will be some benefits to some of the safeguards that are put in place, but I do think you go back to the whole idea of let the investor be ware. We all, as investors, have to be more diligent about following where our money is. We were talking a little bit about Bernie Madoff and people just blindly invest in him saying he's a great guy.
FOREMAN: Hold on a second, let me challenge you on this because here's the problem for me for many, many normal people, you want to be diligent but you are dealing with so many things and this stuff is -
MOORE: If you don't understand it, don't invest in it. I really believe that. FOREMAN: Oh -- Tom do you think?
MOORE: Warren Buffet says that. Like Enron.
FOREMAN: That is Warren Buffet's job. He is not cutting hair all day and then trying to understand the market at night.
Tom, is that fair to say to people you really have to treat the market that way? Because frankly, I think everybody would pull out of the market if they had to understand all of it.
AJAMIE: Yes, I think -- we can't expect that at all, no, because people don't have the time as you said.
Warren Buffet does well because this is what he does 24 hours a day, seven days a week and he has done it for decades, of course, but what about the rest of us who are just trying to invest our money? Is it realistic to think that we are really going to understand the necroses of a company that was the seventh largest in America, Enron? No.
So there has to be a degree of honesty and there has to be a degree of transparency. There has to be laws and rules.
MOORE: Tom, that is all true, but let's not mislead investors. Over the last 30 years, we have seen the biggest bull market expansion in the history of the world. I mean you go back to 1982, the Dow Jones with 800, today its well over 10,000 and near 11,000. There have been ups and downs. There have been periods in late '80s and obviously what we just went through. But stocks for the long run is always -- just park the money in the stock market and keep it there, don't be a day trader.
FOREMAN: Thanks to you both for being here. We can gather in the old folks home 30 years from now and see how it turns out.
Up next, why a good number of folks applying for jobs in small businesses might not actually want the job at all. We'll explain that next.
(COMMERCIAL BREAK)
FOREMAN: There has been so much talk here in Washington this week about how small businesses create two out of every three jobs, the backbone of our economy, but the problem is growing a business is tough.
Michael Horsburg, president of Rigid Paper Tube Corporation, knows all about that and he spoke to CNNMoney's Poppy Harlow.
(BEGIN VIDEO CLIP)
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: How hard is it to run a small business right now?
MICHAEL HORSBURG, PRESIDENT, RIGID PAPER TUBE CORP: It's not something that you can just take a backseat on. You have to always be involved in every aspect of the business. How much more do you have to do? This is your last box?
HARLOW: We hear so often nothing is made in America anymore. It's not true. Your company makes paper tubes.
HORSBURG: Yes, made in America. Materials are purchased in America and Canada. Our work force is local people. We have the opportunity to add more jobs locally.
HARLOW: Is the president's latest plan, the $200 million tax break is that what small businesses need right now?
HORSBURG: We need everything we can get. I would look into additional equipment to replace the equipment that we have now.
HARLOW: Would that mean hiring more workers?
HORSBURG: It would. It would allow us to put on a second shift, we currently have about 27 employees now, and I hope to have 50 employees within the next two years. I would like to modernize our production lines and get into a larger building.
HARLOW: What do you think the government could do that it's not doing for small businesses?
HORSBURG: I think that as far as unemployment extensions go, they could limit the amount of extensions they put. We've had a help wanted sign out front for probably six months. People come in, they fill out applications, but ultimately we end up just signing their slip that they have been here, that they have looked for a job.
HARLOW: To get unemployment benefits?
HORSBURG: Absolutely. They are telling me that they are happy with the unemployment benefits that they are receiving now and maybe when they end, they will consider it. There has to be a point in time where somebody starts fresh, gets back into a company, starting even if it's less than they were making before. Because there are plenty of upward mobility in my company, if you are an aggressive, hard working person, there's plenty of opportunities for you.
(END VIDEO CLIP)
FOREMAN: So, Poppy, what are his chances of getting the loans he would need to expand his business?
HARLOW: It is a good question, because when you look at the statistics, they are not very optimistic.
What we have seen is that small business loan counts have gone down 18 percent since the second quarter of 2008. But for someone like Michael Horsburg and his family, they are not worried. They think they will be able to get a loan from the local bank they have had good conversations with the local bank. They have this major small business loan, now they are looking to see what the government can do, and if they are not going to get more from the government, they will try to get that private financing through the bank.
So, Tom, like he said in the piece, he's going to hire probably twice as many workers as he has right now, put it on that overnight shift and really try to wrap up his business. So the outlook for this small business better than for a lot.
But interesting to hear him say I have jobs and people don't want them. They would rather be on unemployment. That is not something that we hear people say a lot, Tom.
FOREMAN: Yes, fascinating stuff there. Great work, Poppy Harlow. Thanks so much and good luck to him. I hope it goes well.
That wraps it up for this show, but you can join our running conversation on Facebook and Twitter -- @AliVelshi and @ChristineRomans and @TomForeman.
CNN YOUR $$$$$, with Ali and Christine, will be back next week Saturday at 1:00 p.m. Eastern and Sunday at 3:00.
You can also log on 24/7 to CNNMONEY.com -- do it.
Have a great weekend.
