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YOUR MONEY

Bailed Out or Abandoned?; Weakest Job Growth in Years; Target Breach Expands; High Scores, High Salary; The Business of Being Lena Dunham

Aired January 11, 2014 - 09:30   ET

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


CHRISTINE ROMANS, CNN ANCHOR: Well, the economy is ready to take flight. Will the weakest job growth in years keep the plane on the ground?

I'm Christine Romans. This is YOUR MONEY.

Seventy-four thousand jobs created in December. Far short of what this economy needs. The unemployment rate fell to 6.7 percent for the wrong reason. The drop largely from workers so discouraged they've left the labor force. 170,000 college graduates simply stopped looking. It means they no longer count. But they are still out of work.

So who got jobs and who joined the labor force? 400,000 high school graduates with no college education said they were hired.

Harvard economist Ken Rogoff warned us for years that the usual rules of economic recovery don't apply here. Why? Because this was, and for many still is, a financial crisis.

Ken, if we'd listened to you four years ago, we'd be --

(LAUGHTER)

ROMANS: The economy would be fully healed by now. What do we do now?

KEN ROGOFF, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: No -- by the way, no. I don't think there was any easy move to make when you're dealt a hand like this. Very easy with 20/20 hindsight to say I would have done this or I would have done that, I wish we'd done more infrastructure, I wish we'd bailed out more of the subprime borrowers. But no, there was no easy out of this.

ROMANS: The odds of finding a job, if you've been out of work for a year, are one in 10, like 9 percent. The odds of finding a job if you have been out of work for -- five weeks, 31 percent. That's better. That's better for the newly unemployed.

Is that what we're going to see this recovery continue to look like?

ROGOFF: There's a big gap between the long-term unemployed which are about a third of the unemployed and the rest. The long-term unemployed are having trouble reentering. This is a long-term problem, it's collateral damage of the financial crisis. It's a big problem. I think the shorter-term is sort of normalized more, although this was an ugly report.

ROMANS: I asked the labor secretary, Tom Perez, what we need to do to get jobs -- to get people back on the job. Listen.

(BEGIN VIDEO CLIP)

THOMAS PEREZ, LABOR SECRETARY: The most important thing we can do in the short-term for them is to extend Emergency Unemployment Compensation because a requirement of receipt of Emergency Unemployment Compensation is that they continue to look for work. The studies have shown that when you don't receive that, you're more likely to leave the labor force.

(END VIDEO CLIP)

ROMANS: Are the extended unemployment benefits simply masking some structural problems here? I mean, you could argue the White House pushing a higher minimum wage, extending long-term unemployment benefits. Those are band-aids. Those aren't growing good paying jobs.

ROGOFF: Yes, but on the other hand, this is an extraordinary recession. It's the worst we've seen since the Great Depression. It's lasting a long time. So I think extending unemployment benefits beyond the usual makes a lot of sense here.

It won't necessarily make employment go faster. Because, yes, you know, people look a little longer. But I think it's the fair thing to do in a very unequal economy.

ROMANS: Ken, stay right there.

It is no surprise that Americans struggling to find jobs are angry. Wall Street got its bailout and Wall Street is now soaring again. But has Main Street been left behind?

It's all in the eye of the beholder.

Let's look at what Wall Street got in that massive bailout. You can see, you, the taxpayer funded $500 billion worth of, you know, insurance bailouts for insurance giant AIG, Fannie Mae, Freddie Mac and the banks. They have paid it back and then some. $531 billion so far. The bailout prevented a complete economic collapse, but prompted protesters to occupy Zuccotti Park in Lower Manhattan.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Banks got bailed out.

UNIDENTIFIED MALE: We got sold out.

UNIDENTIFIED MALE: The banks got bailed out.

UNIDENTIFIED MALE: We got sold out.

(END VIDEO CLIP) ROMANS: And some of that anxiety and anger still persists. Now let's look at what Main Street got. The federal government launched programs to keep Americans in their homes with varying degrees of success. Not all of them successful. Working Americans got to keep more of their own money thanks to the payroll tax holiday, now expired. And the auto bailout kept 1.5 million Americans on the job.

Now the government also launched a massive expansion of the social safety net. In 2007 the food stamp program fed 26 million Americans. Last year 47 million. And in June of 2008, the President Bush -- President Bush extended unemployment benefits to supplement those that were provided by the states. That program has been extended now 11 times. The cost so far, $225 billion. The Obama administration says the program has helped keep 11.4 million people out of poverty.

Ken, the question here, did the federal government do enough to bail out Main Street the way it bailed out Wall Street?

ROGOFF: Well, the short answer is clearly no. That we should have done more early on. We should have kept more of the borrowers in their homes. And that would have helped everybody. That would even helped the banking sector indirectly because the whole mess wouldn't have unfolded as badly.

We should have done more infrastructure spending because this thing was going to last a long time. They worry that oh, some of that is going to get spent seven years from now. You know what, it's almost seven years later now.

ROMANS: Right.

ROGOFF: So there were things they could have done. On the other hand you have to bear in mind that nobody quite knew what was going on. And even along the way, they thought Europe would collapse. So it could have been worse. And if -- if Wall Street had collapsed, then main street would have been even worse off.

ROMANS: It's easy to be mad at Wall Street when Wall Street at least has recovered.

(LAUGHTER)

ROGOFF: No, that's right.

ROMANS: And you know.

ROGOFF: No, no -- there is no question that there is an important feeling of unfairness that strains our social contract and something needs to be done to make an adjustment to that. I just think there's no debate about that.

ROMANS: The unemployment benefits -- the Extended Unemployment Benefits Program isn't the first recessionary program to end. The Payroll Tax Holiday that we just mentioned, that ended. The food stamps benefits were cut at the end of last year.

Are we pulling back too soon? Or is this the right time?

ROGOFF: No, we're pulling back too soon. I mean, I think food stamps was one of the best programs we have out there for --

(CROSSTALK)

ROMANS: Republicans are asking for reform of the program, they're asking for work requirements in some cases for people to get food stamps.

ROGOFF: Well, I mean, there's certainly some details of the program I don't like, for example. I wish food stamps sort of was a little more narrowly circumscribed for healthier things, for example.

ROMANS: Right.

ROGOFF: But, you know, by and large, this is a good program. And again, the unemployment benefits, I hear the idea that well, we'll get higher unemployment rate if we make it easier for people to be unemployed. But you know what, we are in extraordinary situation where a lot of people just can't find a job.

ROMANS: Bottom line, things are getting better, though?

ROGOFF: I do think so, in spite of the embarrassing recent report, the overall news has been good. The United States is doing better than almost everybody else who experienced this crisis. So, you know, it's the glass might not even be half full yet, but it's filling.

ROMANS: All right. Ken Rogoff, that's a nice way to put it.

Ken Rogoff, nice to see you this weekend. Thank you.

ROGOFF: Thank you.

ROMANS: Why do women make less than men? A new study finds men are more competitive, more confident, actually finds they're overly confident, and better negotiators than women.

The report by the Federal Reserve Bank of New York also shows women and men aren't expecting gender -- the gender pay gap to disappear any time soon. Women expect to earn on average 19 percent less than men do by age 30, 23 percent less than men at age 45.

For more stories that matter to YOUR MONEY, give me 60 seconds on the clock. It's "Money Time."

(BEGIN VIDEO CLIP)

ROMANS: Check out these curves. Samsung unveiled its new bendable TV at the Consumer Electronics Trade show in Las Vegas. The screen changes shape to enhance viewing.

Game over for China's ban on gaming consoles. Sony, Nintendo and Microsoft can now tap a huge new market, but still have to make them in China. The ban started in 2000. Chinese officials worried about violent content and the potential for moral decay.

Facebook says it cares about your privacy, but its CEO sure doesn't talk about it much. A college professor put more than 150 speeches and appearances by Mark Zuckerberg through a word cloud. The words privacy and private uttered only 68 times in public since 2009. What did he say the most? People and things.

The great liquid gold mystery. Velveeta Cheese disappearing from some store shelves. Kraft says it's not sure why there is a shortage, but it's just in time for your Super Bowl party.

(END VIDEO CLIP)

ROMANS: Are you in the market for a home loan? Mortgage rates more or less held steady last week.

Here are the numbers. The 30-year fixed dipped slightly to 4.51 percent. The 15-year fixed, that's a popular refinancing tool, 3.5 percent, a little bit more, 3.15 percent for the five-year adjustable rate.

Now rates have been on the rise since this summer. I want you to look at this chart that shows you what we've been up to since the Fed has been signaling that it would be tapering all that stimulus. It has been kept rates so low.

Look at this. An interest rate that has moved up above 4 percent and many people think that you will see these rates continue to rise into this year. But is perspective, is perspective so important when you're talking about mortgage rates?

Here we are right now. But imagine those old days of the '80s. Maybe you miss the '80s. You do not miss the mortgage rates we paid in the '80s, 18, 19 percent. So even though we've had a tick up in mortgage rates, you're going to hear a lot of people say this is going to hold back the housing market. For some perspective here still well below the post-war average of 6.5 percent.

There's your housing market perspective. You can take that to the House.

It's the hack attack that keeps on growing. Target now claims 70 million customers had their personal data stolen. I'm going to show you what the hackers are stealing and what you can do right now this very moment to protect yourself.

(COMMERCIAL BREAK)

ROMANS: Attention Target shoppers, 70 million of you lost your name, your address, your phone number or your e-mail address to hackers. The company said Friday the data breach affecting holiday customers significantly worse than originally thought.

We are not just talking encrypted PIN numbers and credit card codes anymore, we're talking your personal information.

Susan Grant joins me now. She's the director of Consumer Protection at the Consumer Federation of America.

Susan, Target offering one year of free credit monitoring and identity theft protection to all of its customers who shopped in U.S. stores, although I noticed that they said, we'll let you know pretty soon how you're going to be able to get that.

Is that enough?

SUSAN GRANT, DIRECTOR OF CONSUMER PROTECTION, CONSUMER FEDERATION OF AMERICA: I don't know that it is. First of all, it depends on what kind of I.D. theft protection service they're providing. If it's just credit monitoring, for instance, that just detects new accounts that are opened in your name, not takeover of existing accounts. And there are other things that can be done with this kind of information that can really harm consumers.

ROMANS: I want to know if you think consumers should be requesting new credit cards. They should go to their bank, their Chase or whatever, and say look, I know I shopped at Target. I don't trust what's going to happen next. Can you please change the number on my account?

GRANT: I think if consumers use their credit or debit cards between November 27th and December 15th, they should definitely get their account numbers changed. Not just wait to see if there is fraudulent activity on their accounts.

ROMANS: That's really good advice. Some other advice you have. People should be very careful about getting e-mails or phone calls from someone saying I need to hear some more of your information. I'm here from Target to make sure that you haven't been breached in this data problem.

That is just more scammers coming after you, right?

GRANT: That's right. They could get calls or e-mails from scammers not only pretending to be from Target but perhaps pretending to be from their card issuer or an I.D. theft protection service, asking them to confirm their information or telling them to click on something that would load Spyware unto their computers and steal their personal information that way.

ROMANS: Our information is stored in so many places. Someone once told me up to 5,000 places, my information -- my financial life is floating around in the atmosphere at any given moment.

You know, I think that if it really means taking a hit, a financial hit for the companies, are they going to spend more money and make sure it doesn't happen again or the cyber hackers just so sophisticated, Susan?

GRANT: I think it's not only losing money, it's customer confidence. And that is just really fatal for businesses. So they need to be able to convince consumers that they are taking every measure that they can to keep their data secure. ROMANS: Susan Grant, thank you so much. Really good advice. Avoid those e-mails that look like they're from Target, avoid those phone calls that are probably a scammer and change your credit card number.

Thank you, Susan.

If you're one of the 70 million Target shoppers, you've had your information compromised, go to CNN.com for advice on how to protect yourself.

Coming up, here's a question. If you were running a race -- if you were running a race, you pass the person in second place, what place would you be in now? If you know the answer, there may be a job for you.

(COMMERCIAL BREAK)

ROMANS: Remember the question we asked before the break? If you are running a race and you pass the person in second place, what place would you be in now?

The answer, second. Because passing the person in second means you take their place in second. Not first. That's an example of the type of questions more companies are asking. These IQ and personality tests, they're becoming more popular. To find out if applicants are right for the job. But some start-ups are taking it even further. They're asking job seekers to play video games.

Zain Asher joins me now.

Video games to get a job?

ZAIN ASHER, CNN BUSINESS CORRESPONDENT: I know it sounds that crazy, but we're not talking "Call of Duty" or "Grand Theft Auto 5", right? These are very simple online games. They're designed to measure, I think, like your reaction time, how well, you can memorize things, whether you're motivated by money for example. But the question is, will online video games become the job interview of the future?

(BEGIN VIDEOTAPE)

ASHER (voice-over): It might look like my keyboard is jammed. But I'm actually taking a test to see the type of job I'd be best suited to.

(On camera): So it's measuring how quick I am to react and it's actually very difficult.

(Voice-over): More and more companies are using online video games to test job applicants' reaction times, how attentive they are to detail and how emotional or impulsive they might be.

FRIDA POLLI, CEO, PYMETRICS: Uses can go on and play a bunch of short fun games to find out what their strengths and weaknesses are and then have those match on different careers. ASHER: In this test, I have to judge a person's emotional state from a series of photographs. While this test measure whether I'm more likely to gamble if the financial reward is higher.

Job matching sites like Pymetrics and Knack are both frontrunners in the race to make video games testing the norm among recruiters. The kind of video game know you better than you know yourself.

This test labels me as good at memorizing and generous among friends. But it also said I was emotional and impulsive.

POLLI: The other thing is that you're really good at putting in effort and getting reward out of it.

ASHER (on camera): So I'm a hard worker.

POLLI: You're a hard worker. The main benefit of this is if someone is going through thousands of resumes. So this type of testing can be way more informative than looking at somebody's GPA score.

ASHER: But one word of caution. Experts say that some of these tests can lead to discrimination. Reaction time might be faster for younger people than for older folks and then there's a question of social background.

BEN DATTNER, PSYCHOLOGIST: People who are from socio cultural groups where they've been exposed to games, technology, puzzles, problem- solving will do better than people who are from socio cultural backgrounds where that was not part of their experience when they were growing up. And that's unfair and wrong

ASHER (voice-over): But HR companies like Mercer are so intrigued about the benefits of online game testing that they're asking their best sales person to take the test so they can hire people who are as similar as possible.

BARBARA MARDER, SENIOR PARTNER, MERCER: Basically what these tests do is they run those people through the games and come up with a profile and then you run everyone else through the profile. And they're trying to figure out what is statistically different between the people who are the best practice and the rest of the group.

ASHER: But should a company really wants to hire employees that all share the same traits?

MARDER: Diversity is clearly important. It's just that if you're exhibiting very strong sales capabilities, we want to make sure that we're playing to your strengths.

(END VIDEOTAPE)

ASHER: Right. So there is one caveat. That is, these companies say listen, we believe in the science of this, but it's only supposed to be one data point. It's not supposed to replace a job interview, you're not supposed to, like, ignore the resume of the person, it's not supposed to be all and end all. ROMANS: Hard worker, but impulsive.

(LAUGHTER)

And now your boss knows and so does the rest of America.

ASHER: But apparently it said that my best career would be in a field of education. So they don't have a box for reporters. It's sort of similar. It is similar.

ROMANS: All right, Zain. Nice to see you. Thank you.

Up next, I'm going to tell you why Marissa Mayer --

(BEGIN VIDEO CLIP)

MARISSA MAYER, CEO, YAHOO!: My first five years at Google, I pulled an all-nighter in the office at least once a week.

(END VIDEO CLIP)

ROMANS: And "Girls" creator and actress Lena Dunham --

(BEGIN VIDEO CLIP)

LENA DUNHAM, "GIRLS": It's like, I know I only make $40 a day at Grumpy's, but, like, that's clean money. Like I've made a choice.

(END VIDEO CLIP)

ROMANS: Why they hold the key to getting America back to work.

(COMMERCIAL BREAK)

ROMANS: They're the biggest, most educated, most plugged in generation, I'm talking about millennials. Think kids with birthdays from the early '80s to the early 2000s. I guess they're grown-ups. They're sometimes painted as entitled, lazy, immature, they might not fit in the typical corporate culture. So instead they're creating the jobs they want.

For example, the 17-year-old who sold his start-up suddenly to Yahoo! last year. Cool $30 million. Yahoo! CEO Marissa Mayer, she brought him on board and this week he revealed the new Yahoo! News Digest he's been working on.

Mayer has acquired dozens of start-ups and young entrepreneurs with them. And like the Yahoo! CEO I'm bullish on millennials. I think to solve our jobs crisis, everybody should hire a millennials.

No celebrity represents millennials like Lena Dunham. She's the face of "Girls" and love it or hate, you probably heard about her show. Her business is all about lost 20 somethings, and business is good.

(BEGIN VIDEOTAPE)

DUNHAM: Everything has been so terrible and painful in the last few months, was leading me to this point.

ROMANS: An award-winning show, a multimillion dollar book deal, and a whole lot of buzz, all by age 27.

DUNHAM: Everything actually is awesome for me.

ROMANS: Inspired by her own post-college aimlessness --

UNIDENTIFIED FEMALE: Guess who's got a job?

ROMANS: -- Lena Dunham wrote, directed, and started in "Tiny Furniture" with $50,000 budget. It won praise on the indie circuit and best narrative feature at the 2010 South by Southwest Festival.

DUNHAM: How do I look?

ROMANS: Two years later Dunham hit it big with "Girls." She's the creator and star working alongside comedy director and producer, Judd Apatow. The HBO series tells a story of 20 somethings struggling to get their lives on track in New York.

DUNHAM: And then I am busy, trying to become who I am.

ROMANS: Some have called Dunham the voice of a generation but many disagree, saying most can't relate to her spoiled, out-of-touch characters.

DUNHAM: What is wrong with people?

ROMANS: Some are offended by Dunham's frequent nudity.

DUNHAM: Most situations it's not a good idea to be naked on television.

ROMANS: And a lack of diversity in the cast.

DUNHAM: I'm sure people dislike the show for plenty of reasons.

ROMANS: But ratings don't lie. Seasons one and two brought in about 4.6 million viewers a week.

DUNHAM: Are you serious?

ROMANS: And won two Golden Globes and an Emmy. Season three promises more of the same.

Off screen --

DUNHAM: I have a book deal.

ROMANS: -- Dunham is writing a funny how-to book with anecdotes about her life. The price for that advice? A reported $3.5 million advance from Random House. She also ventures into politics.

DUNHAM: Your first time shouldn't be with just anybody.

ROMANS: She made this suggestive ad about voting for President Obama and has championed other liberal causes.

DUNHAM: I don't want to get married until all gay people can get married.

ROMANS: Now the "Girls" creator working on another original series for HBO.

Unlike the lost character she plays, the business of being Lena Dunham is all grown-up.

(END VIDEOTAPE)

ROMANS: Thanks for starting your Saturday smart with us.

Coming up on a brand new YOUR MONEY at 2:00 p.m. Eastern, marijuana is legal in Colorado but so is being fired for smoking it.

But coming up next on "CNN NEWSROOM" --

(BEGIN VIDEO CLIP)

GOV. CHRIS CHRISTIE (R), NEW JERSEY: I am embarrassed and humiliated by the conduct of some of the people on my team.

(END VIDEO CLIP)

ROMANS: The so-called Bridgegate scandal just getting worse. Now some wondering whether Governor Chris Christie's hopes for a 2016 presidential run will be dashed, after his top aides were linked to a 2013 bridge closure that may have been politically motivated.

"CNN NEWSROOM" starts right now.