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YOUR MONEY

The Politics Of Money; Eurozone Crisis; The Economy Election; Do Jobless Benefits Kill Job Seekers' Drive To Find Work?; J.W. Marriot, Jr., Will Step Down As CEO, Will Stay On The Board

Aired December 17, 2011 - 13:00   ET

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


ALI VELSHI, CNN ANCHOR: I'm Ali Velshi welcome to a special edition of YOUR MONEY. We're in Chicago at CME Group. What some of you will remember as the floor of the Chicago Board of Trade where all sorts of things are traded, real money changes hands around here.

I am joined by some great guests right now. Terry Savage is the personal finance editor of the "Chicago Sun Times." Diane Swonk, our old friend, the chief economist of Mesirow Financial.

And joining me from Washington is CNN contributor and conservative columnist, David Frum. He is the host of the Frum Forum and he is a former speech writer for President George W. Bush. Welcome to all of you. Thank you for being here.

I think the one thing we're going to be hearing a lot of in the next 12 months, and David, I put it to you because it's a GOP set of primaries, they're looking for a candidate.

We're talking about the middle class. Who represents the middle class in this country? The Democrats are trying to make the point with speeches by President Obama in the last couple of weeks.

That the Democrats are the party of the middle class. The Republicans are the party of the rich. The Republicans obviously are struggling with that themselves.

David, what's your sense of how Republicans are positioning themselves and who in this country represents the vast majority of people, the middle class?

DAVID FRUM, CNN CONTRIBUTOR: I don't think anybody is doing a very good job of it. The president gave a speech in Kansas a week ago in which he tried to stake out this ground. He gave a very good assessment of the major problems facing middle class Americans.

But his prescriptions were really weak. The president's main idea seems to be to have higher taxes on those who earn a lot and to use that money to expand public employment and hope more public employment will create a broader government sector middle class.

That's exactly the method that Tony Blair and Gordon Brown tried in Britain. They drove up in some of parts of the country, government employment to 50 percent of the labor market. They set the stage for the even greater crisis that Britain is facing now. When as always -- VELSHI: David, on the flip side, one of the things Diane Swonk that we talk about is that we -- in our politics today, we cater to short answers, easy answers, simplistic answers. Sometimes I'd love to know what would happen if we just put a bunch of you economists in a room and said, how would we put to fix this?

DIANE SWONK, CHIEF ECONOMIST, MESIROW FINANCIAL: Well, you know, I think it would take about 20 minutes and 10 minutes saying hello to each other. I mean, David is exactly right. I mean, the answers -- I gave a speech and quoted Bob Dillon of all people.

But, you know, the answer is blowing in the wind. It is right in front of us. We know what the answers are. A lot of us have consensus on it.

Dave is talking about, you know, you can't just lower taxes. You can't just create a middle class with government spending. Those are all right. We need to come together. We have a framework of a plan in the Simpson-Bowles framework of tax reduction that economists working on.

What most don't realize that $4 trillion over 10 years with shortfall in growth this year. We're going to need $5 trillion over 10 years. So the longer we kick this can down the road, the more problems we're creating and compounding for ourselves.

VELSHI: All right, but we don't kick the can down the road, someone has to pay. This has to costs people. Terry, you write about this because you're trying to make these connections between major economic concepts and your viewers who are wondering how this affects them.

They will cast ballots based on discussions about taxation in many cases. When we don't kick the can down the road, what does that actually mean to us?

TERRY SAVAGE, PERSONAL FINANCE EDITOR, "CHICAGO SUN TIMES": It means we face reality. Right now, the irony of all this is, as they come together in Washington over this payroll tax cut what you have on both sides is a general acknowledgement that people do better when they have more money in their pockets.

The government doesn't do as well spending our money. So if that works for the -- you know, they define poverty now as above $45,000 and above. So that's a very -- many more people are closer to poverty than we acknowledge if that's the definition.

If those people get their own money to spend, it works better than the government spending it. We have the last four years and $3 trillion of government spending to prove that doesn't really jump-start an economy.

So if it works for middle income people, it ought to work as well for upper income people to keep more of their money whether they save it or invest it. That's what we're facing now.

SWONK: There are a lot other issues than that. I mean, the reality is you can back load a lot of pain. If we know a road map, there has to be tax reform. Our tax code is a mess.

It does mean more revenues and it does mean spreading those revenues across higher income households and some higher upper income households and some middle income households. That's an issue that we have to get rid of some of these behavior deductions.

Our corporate tax code is an absolute mess. These things can be dealt with. The problem is we got a lot of lobbyists that stop it from happening. And that's a real problem.

I think, you know, you have to look at it. It's got to be both revenues and it's got to be spending, but it can't be right away. If we deal with it now, we can back load it. American public and corporations if we know where the potholes on the road are, we can either brace ourselves or we can avoid --

VELSHI: This remarkable uncertainty, David, has been the problem for the last couple of years. We don't know what the next thing is. If we tell people what the next thing is, it might help individuals and companies plan.

Part of the problem though is we continue to get back into taking positions as political parties that seem to cater to particular constituencies.

So as a conservative, David, what is the solution out there that doesn't necessarily pander to a specific constituency that will get somebody the nomination for the republican presidency, but at the same time will actually may solve some problems for the next five and 10 years.

FRUM: Well, you can't solve the problem if you keep asking the wrong question.

VELSHI: Right.

FRUM: The question we keep -- the political class in Washington is only talking about its fiscal policy, the government's finances. The issue here is economic policies not fiscal policy. We've got a patient, the American economy.

That is both suffering from high blood pressure, which is the equivalent of the deficit problem and has been hit by a bus, which is the current downturn.

Everybody in Washington says there's no point treating the trauma of the bus hit until we deal with the high blood pressure. I think that's exactly backwards. There's lot of time to worry about the deficit.

The world is happy to lend the United States money for 10 years at less than 2 percent. I say keep borrowing as much of that money as much as you can and use that money to address the immediate trauma of an economy in crisis, of incomes in collapse.

And yes, the deficit problem is not that difficult to solve, but do it later. Solving it now to use one more analogy is like the children's riddle, how do you get down off an elephant, you don't, you get down from a duck? We're asking the wrong question. So it's no wonder we're coming with useless answers.

SWONK: David, I agree with you on a lot of these issues, but I do think having a road map and back loading the solutions to the deficit and putting the America's fiscal house in order over 10 years where we're not taking that pain right up front is exactly what we need and --

FRUM: Is there any evidence for that proposition? All the evidence I see is exactly the contrary. The uncertainty is holding back the American economy that doesn't make any sense to me.

SWONK: Well, how many corporations have you talked to? I talk to companies with trillions of dollars on their balance sheets now and they are holding back, hesitation, that's a big issue.

FRUM: There are surveys on this question. They ask business owners why are you not investing and uncertainty is not the reason they give. Weak sales is the reason they give. So let's deal --

SWONK: In large corporate America though -- I disagree. If you're talking small business --

FRUM: -- systematic way that's not the answer you get.

SWONK: No, it is a systematic way. You know, there are a lot of surveys out there that say uncertainty is the biggest issue, we have a crisis in confidence in this country.

Growth, I agree with you. At the end of the day, you cannot do anything without more robust growth. That is the crux of the issue and we agree 100 percent.

But I do think we saw in August, you know, with the keystone cops playing politics that really caused, along with the downgrade of our debt, and European debt situation all come together, that caused a hesitation.

VELSHI: I think we can worry that type of uncertainty more so than regulatory uncertainty --

SWONK: I'm not talking regulatory.

VELSHI: I think we all agree, David, you made this point. We all know we've got remarkably low interest rates in this country. That the U.S. government can borrow money at a very low rate, which is why deficit spending or borrowing against that could be a good solution for the short-term for the United States, where that changes is with Europe.

In fact, we're tinkering around the edges here and we're very concerned about what our politicians are going to do in Washington when in fact what's going on across the pond may be a greater concern. I want to take a quick break and I want to come back with this great panel I have and discuss what role America should play. There are criticisms that America is not doing enough to help Europe and to keep the world out of a global recession.

So stay with us. We're coming back. A special edition of YOUR MONEY from the CME right here in Chicago.

(COMMERCIAL BREAK)

VELSHI: Welcome back to a special edition of YOUR MONEY from CME in Chicago, the Chicago Mercantile Exchange Group. This is the floor of what used to be called the Chicago Board of Trade where all sorts of things are traded.

We're going to tell you more about what goes on this floor. It's a very, very exciting place to be. It's one of the few places where you can see an instant reaction to things that are going on around the world.

Economic announcement, what's going on in the stock market, there are real men and women down here trading things. We're going to talk to you about that. My great friend, Christine Romans is here.

She started her career with this organization as a reporter. She's going to tell us about what's happening particularly in the world of commodities, which are very important to you. Let's get back to the economy though right now.

We've been talking about politics in the United States. We're worried about what our candidates for office are going to be doing to fix this economy. But there's a good argument that so much of what's going on in the economy right now is not about what's happening in America.

But it's dependent upon the rest of the world, particularly Europe, which as a group is as large in economy as the United States and is our biggest trading partner. Now Europe's concerns continue to develop.

Christine Lagarde who is the former finance minister in France is now the head of the International Monetary Fund. She says this is not Europe's problem alone to solve. She says the whole world needs to be involved. Listen.

(BEGIN VIDEO CLIP)

CHRISTINE LAGARDE, MANAGING DIRECTOR, IMF: It's not a crisis that's going to be resolved by one group of countries taking action. It's going to be hopefully resolved by all countries, all regions, all categories of countries actually taking action.

(END VIDEO CLIP)

VELSHI: All right. We are joined by David Frum. He is in Washington. He's a CNN contributor and conservative columnist. With me here in Chicago, Diane Swonk who is the chief economist at Mesirow Financial and Terry Savage who's the personal finance editor at the "Chicago Sun Times."

Terry, let me start with you. It is trying enough for the average American, the middle class American who is trying to deal with their own lives in this economy to deal with -- whether it's Republicans or Democrats and what they are doing with the economy.

And then Christine Lagarde is saying solving Europe's problems is the whole world's problem. I don't know how that's going to go over with your readers.

SAVAGE: Well, it won't go over very well. We are, the United States, the largest contributor to the IMF and the IMF was originally created to help the poor countries of the world. Germany and France don't qualify.

American citizens are wondering what all this economic talk is about when first of all if you're a senior citizen, you saved your money. The government is helping the banks by keeping interest rates low and helping fund its own deficit. Seniors are wondering where is the interest I was planning to live on.

VELSHI: Absolutely.

SAVAGE: And younger people wonder I'm paying 6.8 percent on my student loans, where are the jobs that are going to help me repay those. People who are in their 40s and 50s and thinking about retirement, are scared to invest and worried their about jobs.

Everyone knows someone who's out of work. So the idea that the United States should be funding a bailout for European countries that can't get their own act together really turns people off.

VELSHI: Diane, Americans are not happy they were funding bailouts of American banks. Although at the time and I think history will increasingly show it was crucial and it was necessary. Is it crucial and necessary that we have a role in Europe and maybe it's not funding?

SWONK: We can't bail them out. That is not our purview. That is not our legal purview and I don't think there's any political stomach, nor should there be. We can't bail out Europe.

However, if Europe goes down, if the euro explodes, it is an event larger than Lehman for us. That's why it matters to us because we learned in 2008, there's no way to hide unless you all have your oars in the water at the same time, in turbulent waters. You don't get out of it.

VELSHI: Right.

SWONK: And so there is this idea that Christine is very right about, about -- you know, now being part of the solution isn't necessarily bailing out Europe. There's no reason for us to bail out these European banks.

However, our banks are exposed. Our banks have underwritten CDS. There's -- in the money market accounts in the U.S. very exposed to European banks. This is what went down during the height of the crisis on that week between September 14th and September 21st 2008 and froze everything in the United States.

VELSHI: By the way, when American companies couldn't get credit because there was a global freeze, they fired people. So when people ask what does this mean to my credit card, you --

SWONK: We're not an island. That said, we cannot bail out Europe.

SAVAGE: But Ben Bernanke has said, Diane, has he not that he would stand behind the central banks of Europe.

VELSHI: Right.

SAVAGE: He has.

VELSHI: Let's go back to something David Frum brought a few minutes ago and that right now for our own problems in America, it cost us nothing to borrow money.

David says like some people say that at least shore up our own finances in our own situation we should use some of that money. Ron Paul, who's running for presidency of the United States, feels I think entirely opposite from the way you do. Listen to what he said.

(BEGIN VIDEO CLIP)

RON PAUL (R), PRESIDENTIAL CANDIDATE: We've bailed out just about everybody so far when it comes to the banks and corporations. Now it's Europe. We're getting ready to bail out Greece and Italy and Spain and all of Europe. It can't be done. It's unsustainable. We've already been downgraded once. We're on the verge of having our credit rating downgraded again.

(END VIDEO CLIP)

VELSHI: So David, before we get too carried away with this, the fact is there isn't an explicit conversation about America taking money and sending it to Europe.

But what role should America -- what should we be considering right now with respect to making sure that Europe doesn't fail so that we don't end up losing more jobs and losing credit here in the United States?

FRUM: Well, first hit the mute button whenever Ron Paul talks. The man is an ignoramus and he's entitled to zero respect. Second, if you leave the sound on, the idea it's more sustainable to have a global depression, which is what is otherwise coming than to help Europe that's crackers.

I mean, Grandpa Ron Paul may welcome a depression when people go back to selling apples for a silver nickel, but that's not I think from anybody else's point of view. I would be completely in favor of European bailouts if they were necessary. What is happening there that when Christine Lagarde says the world must help, that is only true if the European institutions refuse to do their job there.

There's no necessity for an American support for a fiscal bailout if the European Central Bank would do its job as a monetary authority.

The idea that the European Central Bank can't create enough euros, they can create an infinite number of euros. They are the euro master. They have all of them. How many do you want? It is the European Central --

SWONK: Germany won't do it.

FRUM: Who elected Germans to tell the European central bank what to do?

SWONK: Believe me, it is -- I agree, David --

FRUM: -- the core of this crisis.

VELSHI: All right, guys. Thanks for this great conversation. We appreciate it. Terri Savage, great to see you. Terry Savage, personal finance editor of the "Chicago Sun Times."

Great to see you. Diane is the chief economist at Meserow Financial here in Chicago and David Frum, a CNN contributor and conservative columnist joining us from Washington today. David, thanks always for your great insight.

We're going to be back in just a minute. We're going to talk more about that middle class. Who exactly is the middle class? Who is the 1 percent? Who is the 99 percent?

You've heard a lot about it over the last several months. We're going to get down to the bottom of it when we come back. You're watching a special edition of YOUR MONEY from Chicago.

(COMMERCIAL BREAK)

VELSHI: Welcome back to special edition of YOUR MONEY. I'm Ali Velshi at the CME Group in Chicago, Chicago Mercantile Exchange Group. This is the old floor of the Chicago Board of Trade. You can see traders down here.

They are trading all sorts of things, commodities, treasuries, all sorts of things that matter to your life and affect your money actually get traded on this floor.

Christine Romans is with me. She is just in the room next door in the agriculture pit probably trading hogs. This is where she got her start. A little while we're going to talk about what goes on here and why it's important to you.

But right now, we want to talk about something that's a concern to everybody watching us. That is who is watching middle class. This battle to be the champion of the middle class in America is under way right now.

President Obama has made a number of public comments recently, this latest one in Kansas where he really claims the mantle of the champion of the middle class in this election cycle. Here it is in his words.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: After all that's happened, after the worst economic crisis, the worst financial crisis since the great depression, they want to return to the same practices that got us into this mess. In fact, they want to go back to the same policies that stacked the deck against middle class Americans for way too many years.

(END VIDEO CLIP)

VELSHI: OK. If you're in the middle class in this country you listen to that, you think President Obama is your man. The Democrats are your people and the Republicans are going to go back to the same practices that got us all into the mess we are in today.

Guess what, if you listen to Republicans, similar message. Let's talk to Will Cain and Pete Dominick. Pete Dominick is the host of Sirius XM "Standup." Will Cain is a CNN contributor.

Will, how do you answer that charge? This is what we're going to be hearing about month after month. You're going to be hearing Republicans saying it's the Democrats who kept us in this mess. The Democrats saying it's the Republicans who got us into this mess and are going to take us back there. What do you say?

WILL CAIN, CNN CONTRIBUTOR: Well, I reject this battle. I reject the battle of trying to define who is the champion of the middle class. I reject this concept of dividing us according to class and saying how are you doing compared to someone else.

You're pandering. You're simply pandering in that respect even to a group as large as the middle class. What I would do is I would position the debate like this. Position Republicans as defenders of a system, a system that has been the beneficiary for every single one of Americans, every single one of class.

I would say stop asking yourselves, how are you doing compared to someone else, but ask yourselves how are you doing and you would defend that system in that respect. That has moved more people out of poverty in the history of man than any other system we've invented.

VELSHI: Well, that's an interesting way to think about it because we do set ourselves up in society, at work, in sports, everything we do where we compare ourselves to someone else or someone in a different class.

One thing we've seen with these protests over the last several months is this creation of a battle between us and them, 99 percent versus 1 percent. Pete Dominick, let me bring you into this battle. I mean, middle class is a strange creature in America. In other countries you have rich. You have the working class, the working poor and you have this middle class, which is aspirational.

They have moved out of the working poor maybe over the generations and try to get into the rich. But you say that in America particularly with this moniker of the 99 percent, it's a different beast.

PETE DOMINICK, HOST, SIRIUS XM'S STAND UP: Absolutely. I think Ali it depends how you define middle class, people from $60,000 to $200,000 define themselves as middle class, from the prideful poor to the modest wealthy.

But they are all part of the 99 percent in terms of the people that don't -- don't contribute to political campaigns. If you want to know who dictates legislation you have to find out who is contributing to political campaigns.

You know what? Yes, unions contribute a lot to Democratic campaigns, but you know who really contributes mostly more to Democratic campaigns, that 0.1 percent.

There's a new study that the Sunlight Foundation just put out that said basically that turns out that twice as many Democrats contribute to the campaigns, twice as many wealthy, 0.01 percent contribute to Democrats.

So, you know, it's not always what you think it is. Who is dictating legislation, the people that contribute to these campaigns? It's easy to say that Republicans are the party of the rich and I can make that argument, but we need to know about who is contributing.

VELSHI: Let me ask Will this then. Will, whether or not -- however you define who the middle class is, this concept of pitching people against other people and comparing them.

We do know that successful economies are based on this broad-based group of people who make enough money to educate themselves, to live well, pay taxes that sustain the rest of the economy.

So what is the best argument for somebody running for office wanting to improve this economy right now if not arguing that I am the champion of the middle class, what should the argument be?

CAIN: You know, you have to argue to reinforce the fundamentals of that system I described earlier, Ali, the system that has moved more men out of poverty.

VELSHI: -- more out of poverty, right?

CAIN: Yes, the fundamentals of capitalism. Look, the argument that Pete I would suggest would make or many people like you had on this show particularly today would make over the last 30 years, we've had a divide. We've had a growing income inequality over the last 30 years. Well, something has to be done about that, but what has to be done. What is happening is we've had broad economic shifts. We've had an economy in the United States to move to what is now a mature economy, one that did have a broad range of jobs.

You have to focus on education in this respect. How do we educate a population with an economy that moved into the future? What I'd tell you is that doesn't mean just throwing more money into education.

It means fundamentally reforming what you think education is. We've doubled education spending over the last 15 years. We've tripled it over 30 and seen marginal education attainment. We have to redefine education reform, that's one of the main things to keeping an economy with a broad range of taxpayers.

VELSHI: Unfortunately -- unfortunately, Will, in a tough economy like we've got now where you got people worried about jobs, unemployment benefits running out, that theme isn't as sexy as the one that says you can make you better versus the person you compete against.

CAIN: I know that, by the way. I know I'm not making a sexy argument. I'm just making the truth.

DOMINICK: Republicans and Democrats, whoever wants to win, they should throw the super wealthy under the bus and appeal to the rest of us. I agree we should focus on education, but we should celebrate educating ourselves in this country and not being ignorant.

We have this disdain in this country for experts, for academics. Somehow they rely on government. Private universities do not rely on government for their funding. We should celebrate Ivy League experts not denigrate their expertise the way Tea Party and Newt Gingrich loves to do. That is wrong.

VELSHI: I wish you two guys were running. I'd vote for one of you for sure. Will, you make it sexy just by talking about it. Will Cain, CNN contributor and Pete Dominick, host of Sirius XM Stand Up.

One of the things, Will was talking about lifting people out of poverty one of the things that's done that in this country is unemployment benefits.

But are they going on for too long? Are they helping or hurting? Are they making people stay home and not look for work? That discussion, you're not going to want to miss it, next on this special edition of YOUR MONEY from Chicago.

(COMMERCIAL BREAK)

VELSHI: OK, we've talked about the middle class, we've talked taxes, now we're talking about unemployment benefits. Something you are going to hear a lot about, again, over the next coming months.

Why are we continuing to have this discussion about unemployment benefits? Let me give you a few facts. Number one, unemployment benefits have been extended eight times. Federal unemployment benefits, since they were authorized in June 2008, because of the financial crisis we're in, 17.6 million Americans have collected benefits over the past four years, cost $185 billion to do that. Extending them for another year is going to be estimated to cost another $44 billion.

How should we be thinking about unemployment benefits which are meant to be an emergency thing? We've been going on for two years with them. I want to bring in two of our great friends. Stephen Moore, is an editorial writer with "The Wall Street Journal," Bob Herbert, is a senior fellow at DEMOS.

Stephen is going to say something that a lot of conservatives think, and then you are all going to e-mail and Tweet how angry you are he said it. And then Bob is going to come in and try to calm you all down for a second.

Let's start with you, Stephen. A lot of conservatives saying, some people find it distasteful comment, but they are saying these are emergency benefits. You can't keep giving them, you can't make them structural. And-possibly-hopefully, your words not mine-possibly it prevents some people from actively looking for work.

STEPHEN MOORE, EDITORIAL WRITER, "THE WALL STREET JOURNAL": Yeah, Ali, I know what your agenda is here. It's to make me be the Scrooge, the bah humbug guy.

Let me say this. I have looked at the data on this. I think the American people are very compassionate. They do want an unemployment insurance system, Ali, and they want people to get, maybe three, six, nine months of benefits so if they lose their job they have some time and income for their families so they can find a new job.

What we have done, and you mentioned, how many times, you say? It is seven times we've extended these benefits.

VELSHI: Yes, eighth time, this would be the eighth.

MOORE: Now people can get up to two years of benefits of that's a long time, Ali.

VELSHI: Yes.

MOORE: I have looked at the evidence on this. It's pretty clear that when you extend unemployment benefits, you actually extend the length of time people stay unemployed because you're actually giving them a payment to stay unemployed.

VELSHI: Let me ask you this.

MOORE: Go ahead.

VELSHI: Let me ask you this. We know there are some 3 million advertised openings in the United States. We know 14, 15, 16 million people unemployed. Ultimately there are going to be a bunch of people without jobs. In fact, there always have been in America. We've never gotten substantially lower than 5 percent for any length of time, in terms of unemployment. How do you deal with that?

MOORE: Have you to have a pro jobs issue. In fact, on this bill that we're talking about there's the Keystone pipeline. Why don't we create those 20,000 jobs like the president is supposed to?

I want to say this. I travel a lot around the country, as I know you do, Ali. You're in my favorite city of Chicago right now. When I talk to employers I'm surprised how many times they say we can't find workers. That may surprise people with 9 percent unemployment. They say a lot of workers who are laid off, they don't come back until their unemployment benefits run out.

VELSHI: Interesting. Bob, what's your take on this?

BOB HERBERT, SENIOR FELLOW, DEMOS: My take on this is there are an extraordinary number of people who are still out of work and they are really hurting. The unemployment benefits, the extended benefits that they receive are the only thing that keeps them and their families away from destitution.

So as a society, we have to make a decision on whether we want to see providing those benefits for some term in the future or if we want to just cut them off.

As far as the effect of unemployment on people looking for a job, I think it has a small effect. I think some small percentage of jobless people will continue to receive unemployment benefits and will not step up their job search until those benefits run out, but that's a very small percentage. A vast majority of people out of work really want desperately to get a job.

VELSHI: Let me ask you this, Bob, is there a great middle ground between emergency unemployment benefits, not very much compared to what people typically earn, and getting them off unemployment. What if we really put some thought to what Stephen was saying, where there are a whole bunch of people who don't find workers. Maybe we have a lot of workers who aren't trained in the right areas. Is there something to be said for some really well thought-out system whereby some of the tax money that has gone toward providing unemployment benefits goes for real training, or real relocation exercises to make people better equipped to handle this new economy that we're-?

HERBERT: I don't buy that argument at all. We know how many jobs are being advertised as available. We know how many people are underemployed -- unemployed or seriously underemployed. And it is about, the ratio is about four to one. So if you suddenly retrained all these folks, or if you took away their unemployment benefits, and put them out there on the job market, they still would not be finding jobs.

What we really need is a solution to the employment problem in this country. We have to figure out a way to fix the economy so that the economy provides enough jobs for all the people who want and desperately need to work.

VELSHI: Final word, Stephen, to you. There is a consequence to getting people off unemployment if they do lose their homes, if they do-if we have more homes on the market, if these are unemployed people that become destitute and get involved in criminal activity. There is something to be said for not just throwing a whole bunch of people off unemployment and seeing whether luck carries them.

MOORE: Yes, the question is how much is too much. And look, as I said at the outset, six months, I think, is very reasonable. I'd ask Bob, how long do we extend these benefits. Three years, four years of this has been a long recession.

It is interesting, by the way, I think I got a little crack of an opening with Bob this-today, where he basically acknowledged there is some negative employment consequences.

By the way, Larry Summers, as you know, Ali, was chief economist for Barack Obama, did a famous study a number of years ago where he did find pretty significant negative affects on this. Let's get people to work. This is the Christmas season. I think Bob and I agree we need a positive job plan. The problem is here we've had 9 percent unemployment now for two and a half years. It's a terrible job market. I agree with that.

VELSHI: I think we're all agreed on that. Everybody who is on employment insurance would rather have the option of a well paying job to replace that.

Good to see you guys. Thanks very much. Stephen Moore, and Bob Herbert, thanks very much for joining us.

You just said, Stephen, something about a positive jobs plan. We agree on that. When we come back on this special edition on YOUR MONEY one of the great friends, in the city, is going to help you get a positive job plan to try and fix your job search so it bears fruit in the new year, Brad Karsh is standing by, he's on the other side of this break. You're watching YOUR MONEY. We're coming right back.

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VELSHI: All right. You're watching special edition of YOUR MONEY. Right here in Chicago, we are at the CME Group, that stands for Chicago Mercantile Exchange. This is the old floor Chicago Board of Trade. We just had a conversation about jobs.

You know you can Tweet me @alivelshi. I know a lot of you are going to Tweet me. You're not going to like a bit about what was said in the last segment. But our job is to tell you what people are saying, it is also to help you create a positive jobs program for yourself.

We're going to do that now. Our great friend Christine Romans one of her first jobs as a reporter was at the Chicago Mercantile Exchange, with me, she's over in the next room, in the Agriculture pits. She's got some information for you coming up on jobs--Christine.

CHRISTINE ROMANS, CNN ANCHOR: Thanks, Ali. You're right, corn options are right behind me. This is my old stomping ground. I'll tell you something here in Chicago the discussion about jobs, the discussion you just had how much longer we can continue to give jobless benefits in the country.

The bottom line here is that people are trying to find jobs. They are looking where there are jobs in the economy and how to get them. Brad Karsh is here with us. A very good friend of us on the show, both of us have used them in our books talking to people about how you can try to get a job.

This is so interesting this time of year, Ali. You talk about a jobs plan. This holiday season is a little bit better than last year for jobs seekers. If you're newly unemployed the numbers are pretty clear, right, Brad? It's a little bit easier to get a job this year than last year.

What you need to be doing? Tell our viewers, Brad Karsh, what you need to be doing to take advantage of this time of year to get a job.

BRAD KARSH, PRESIDENT & FOUNDER, JOBBOUND: Sure, and speaking of this time of year, I'm going to sort of holiday theme this.

One tip I have, don't be greedy this holiday season. A lot of job seekers want to hold out for the perfect job. Now, if you have been out a job a week, a month, maybe you can hold off for some stuff. But if you have been long-term unemployed, you want to try to get a job, any job. I see people say I was a director, they will only make me a manager. My advice is prove it on the job, don't prove in the interview.

ROMANS: Just get in there.

KARSH: Just get in there. It's easier to have the discussion with someone in HR once you have been there six months as opposed to arguing about it before you start working.

ROMANS: If you are going to have 5 million people, potentially, rolling off unemployment benefits you can't afford to just wait too long for what you think is your old level, right?

KARSH: Exactly. That's what a lot of people are doing. I say just get in, do something. As long as you're not miserable get in somewhere.

ROMANS: How should you be using the holiday season to find those connections and networks, because we talked a lot about networking as an important opportunity? Keeping up your social media connections, but holiday parties, is it crass or is it very savvy to be making those connections?

KARSH: Well, I think it's never a bad idea to network. People definitely think or get worried that they are going to have to be a little too crass. People enjoy networking. They want to talk to friends, they want to hear what's going on. And they want to legitimately help you. So it is not a bad idea.

ROMANS: But you can't go right up and say, hi, my name is Christine, I'd like a job, please, right now? I mean, how do you do that? KARSH: Exactly. What you do is you create a conversation, start talking about something. You don't walk up and say I want a job, you walk up and say, hey, listen, I'd like to chat with you a little bit about what you're doing, what you're up to, what's going on. What will happen, the conversation will evolve. What are you up to, Brad? Well, actually, now that you ask I'm looking for something. Create a conversation, talk about anything and the holidays are a great time to start this.

ROMANS: Do you agree with me, Brad, that there are sort of two different categories here. There are the people who have been newly unemployed and there are people who are long-term unemployed. Some of the strategies seem to be a little bit different if you've been out six months or longer?

KARSH: They are going to be very different if you're out six months or longer. Because, again, if you're newly unemployed, as you just said, it looks like there might be some openings now. It looks like there is more stuff going on. You can afford to be a little bit pickier, you can afford to not necessarily have to settle for any job. Long-term unemployed you have to start getting something and you have to be much more aggressive in that job search.

ROMANS: And, Ali, it is so interesting, Brad Karsh was saying some of the energy industry, the trucking industry, there are CEOs telling him, me, in commercial real estate, and insurance, CEOs, tell me, too, they are ready to hire or very, very close to hiring in the new year. There you go.

VELSHI: Good. Great advice. That is a positive job plan. Good to see you. Christine stay there. I've been promising all of our viewers that we will explain to them why we are here, what we're doing here in Chicago. We'll talk about commodities, how they affect your life. They do by the way. You use them all the time. Eat them for breakfast, use them in the car, to get to work, use them to heat your house. Stay with us. We have a special edition of YOUR MONEY right here in Chicago.

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VELSHI: OK, I have been telling you the whole show we'll tell you why we're here. This is Christine's stomping ground. We are at the CME Group, the Chicago Mercantile Exchange, it is the floor of Chicago Board of Trade. Christine is in the next room called the AG pit. She's standing next to someone who looks like may have the Chick-Fil-A cow jacket on. But that is all part of the whole thing.

Christine, explain to us what is going on here, and why you are there.

ROMANS: This is the allure of traders, right? You get the real flavor of what he does here at commodity futures by seeing what his jacket is. And you can hear people behind him are saying, moo, moo, out of love, I'm sure.

SCOTT SHELLADY, DERIVATIVES MANAGER, ICAP ENERGY: Right. ROMANS: It is the corn options right behind us. But I'm here with Scott Shellady. He is not only a trader but he is also a family farmer. His family owns a farm. He really is connected with both the big picture of how the global economy affects what we pay at the grocery store. And how we trade these economies, right down to what it's like to be in the business.

It's been a very big year. I want to start with farm prices. Since you are only one of three traders here who is actually a farmer, too. Farm prices, unbelievable. I mean, an acre of land going for prices people haven't seen since the '80s. Huge jump in the third quarter for prices for farmland. Why?

SHELLADY: Well, there is a number of reasons, but the first is we have had this big food inflation problem, where the prices of everything are going up. That's one great way to hedge yourself against that. We've had a big increase with outside investor action. Some hedge funds, instead of actually buying the products behind us have actually come into the market and bought land instead, because they see the future in actually owning the underlying. We've had an incredible amount of money come to the AG world because they can't get a return on the equities and they just can't really swallow the fact that they have to pay 2 percent for a 10-year bond.

ROMANS: There's only so much land to go around no matter what. Some of the farmland in the Midwest is the richest, most productive land in the world.

SHELLADY: The reason why I'm one of the last few guys down there who has a family farm is because those family farms are being swallowed up by the bigger conglomerates. Because the land prices are getting so expensive, it's pushing the smaller guy out.

ROMANS: Wow.

I want to talk about another thing that's a big topic of conversation down here and that is MF Global. There are a lot of people here-M F Global, they are farmers whose brokerage accounts were with M F Global. How has that affected the mood in commodities trading here. This is the eighth largest bankruptcy in the world?

SHELLADY: They have over 10,000 accounts. And if you can imagine, if they've-they are doing a ton of old agricultural business. It is an old agricultural firm, it is a sugar firm out of London. They are a key player in what we do down here. They absolutely brought a lot of this trading to a stand till. Our volumes have dropped conservatively. And there isn't really a light at the end of the tunnel yet.

ROMANS: So, there has been such-and you know, farmers are still waiting, farmers are still waiting to get their money, too. It's been a really incredible year for commodities.

Explain to me about Europe and the headwinds from Europe. Because people think about commodities as maybe the price they pay for a pound of meat at the grocery store. What's happening in Europe, and really in emerging markets, too, all of that factors in to the price you're paying at grocery store.

SHELLADY: So, as we lurch from headline to headline on European crisis summit to European crisis summit, that affects how strong the euro is with our dollar. If that makes our dollar things here go up in price. But if it makes our dollar stronger, because we suddenly look better, because all of the stuff that is happening there. That makes it more expensive to buy our products.

ROMANS: And remember the dollar, anything that moves the dollar, moves this stuff, because all of this stuff is prices, around the world in, dollar.

Nice to see you, Scott Shellady.

SHELLADY: All right. Thank you.

Nice to be back, down here at Chicago Board of Trade, Chicago Mercantile Exchange, now, Ali.

VELSHI: What a great conversation. We have to remember when we talk about the world of finance and money, it's not only around New York. It's not just stock markets. You got to get out in the Midwest. This is where they grow the food for America. What a great conversation.

Christine, you're always in your element. But it is so fantastic to see you in even more in your element to be in Chicago. I'll join you after the show is over, down in the AG pits. Christine Romans. Listen when we come back, I'm going to tell you a remarkable story about Bill Marriott. He has been at the helm of a company that bears his name, for 40 or the last 60 years in the company.

Before that, he was working for his dad, who founded the company. He's now handing over the reins. We're going say hi to Bill and see what he has planned for the future. When we come back. This is a special edition of YOUR MONEY from Chicago.

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VELSHI: You have all heard of Marriott, the hotel company. Bill Marriott has been the CEO of that company for 40 of the last 60 years that he has been involved with the company. It was founded by his father. In March of 2012, he's stepping aside from the CEO job. Still going to e chairman of the company. The man who will become the CEO is another lifer, he has been there for 20 years, Arne Sorenson. He is the current COO of the company. Arne will become just the third CEO of Marriott.

Arne, good to see you. We're going to have a lot of opportunities to talk. Because given the longevity of Marriott CEOs. You and I are going to talk a lot about the hotel business and what it means to the economy.

But I guess we're here to celebrate our good friend Bill Marriott. After 40 years, Bill, I've been wracking my brain to think about anybody else, whose name is on the company of a public corporation, who has been running that company, like you have, for this amount of time. Do you even have contemporaries of that sort?

J.W. MARRIOTT, JR., PRESIDENT & CEO, MARRIOTT INTERNATIONAL: I don't think so. The company is 85 years old in 2012. My dad was CEO for 45 years. I've been CEO for 40 years. There have only been two of us in 85 years. That's the interesting thing, I think.

VELSHI: Let's talk about you and hotels. You love the hospitality industry. What's different about it from when you worked in the company with your dad over those 40 years you were CEO to today. What's the same, and what's different?

MARRIOTT: What's the same is taking care of people. We take care of our associates so they'll take good care of the customers and they'll come back. We're providing a good room, a good bed, a nice check-in experience. It sure has gotten to be complex. The Internet has made it complex. The use of computers has really changed the whole scene.

The globalization of the industry has been huge and tremendous. We're now in 72 countries. We had 10 new countries on the board the other day. It's really become a very big and complex company.

VELSHI: Arne, one of your big challenges is not just that globalization. I know you and other hotel companies are really into the expansion in places like in China and areas of India. One of the things that Marriott's been very involved in it making sure America continues to be a great destination, particularly for these tourists coming out of other countries. You have been lobbying the government of the United States to say, make it easier for people to visit the United States. Make it more welcoming.

ARNE SORENSON, PRESIDENT & COO, MARRIOTT INTERNATIONAL: That's absolutely right.

We're at the cusp of a new golden age of travel. It's really driven by the fact we have tens of millions of new travelers from places like China and India. They are estimating now that we have will have 100 million people every year, leaving China to go somewhere else, on travel and the U.S. ought to get its fair share of that.

VELSHI: Arne, final word. What's Bill Marriott not going to tell us about himself, about how he managed to run the company for 45 years?

SORENSON: Bill Marriott did a lot of things right. Mostly, he listened to his people. Thousands of associates across the company, he was trying to learn everything he could learn from them every day that he worked, which he's still doing. Listen to them, get their ideas, figure out which of those ideas are worth pursuing. Then be willing to change and put those ideas into place. His ability to listen and inspire people has been profound.

VELSHI: We have had many great conversations over the years that you and I will continue. Arne, Bill, we won't end our tradition and will continue to have great conversations. Next time we talk, when we're not just celebrating your career, we'll talk about the economy and what you see going on with the hotel business.

Great to see both of you had. Congratulations on a remarkable career, Bill Marriott and Arne Sorenson, continued success.

SORENSON: Thank you.

VELSHI: And that is if for our special show here from Chicago. Christine and I are here talking to people about our new book "How To Speak Money." We wrote it together based on a lot of conversations we had with you. Pick up a book. We want to hear what you think about it.

That's it for us. Remember to follow us both on Twitter. We read every one of your Tweets and comments. We look forward to seeing you every Saturday at 1:00 p.m. Eastern and Sunday at 3:00 p.m. Eastern. Christine and I will see you all week from 6:00 to 9:00 a.m. Eastern on "American Morning." Have a great weekend.