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Issue Number One
Lying on Your Resume; America's Credit Card Obsession Eases Up; Talking Energy in Washington
Aired July 30, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
GERRI WILLIS, CO-HOST: Big talk on energy from the White House, from Capitol Hill, and the reaction from the markets. What does it mean for your gas prices?
America's obsession with credit cards easing up a bit.
Checking bags at the airport just got a bit more expensive.
And how to get what you want, when you want it, for the best price, by haggling.
Issue #1 is your economy. ISSUE #1 starts right now.
From the ISSUE #1 headquarters to the CNNMoney.com newsroom, we are all over the stories that matter to you.
Hello, everybody. I'm Gerri Willis. Ali Velshi is off today.
The spotlight in Washington, hey, it is almost solely on energy. We're all over the story at the White House, on Capitol Hill, and at the New York Stock Exchange.
And we'll show you what has finally, finally convinced Americans to cut back on their credit card use.
And why you never, ever, ever want to lie on your resume.
Rick Sanchez, let's talk about issue #1. It is the economy.
RICK SANCHEZ, CO-HOST: I think maybe the best way to tell the story today is something like this. You've got two people, right? One of them pays her bills on time, takes care of her family, and never borrows more than she can pay back.
And then there's the other guy down the street. He spends more than he brings in, he borrows irresponsibly, and then he gets so far in debt that he has to go around knocking on doors, on everybody in the neighborhood, to try and bail him out. That second guy that I just described, many would argue, is our present U.S. government.
This week, we learned that our deficit is going to be higher than at any point in our country's history. In other words, we have spent more than we are taking in.
And today we get the news that Fannie Mae and Freddie Mac are also going to be bailed out. By whom? By you. All with the stroke of a president's pen.
Oh, and the energy crunch that we're in, that experts have been seeing coming for decades, that's costing us about $100 every week, every time we fill up our gas tanks, Congress is trying to solve it by the end of this week. Wow.
CNN's Kathleen Koch is following this story for us. She's at the White House.
Kathleen, how are they doing?
KATHLEEN KOCH, CNN WHITE HOUSE CORRESPONDENT: Well, Rick, here at the White House, they would contend that they, here on Pennsylvania Avenue, are doing everything that they can. The president came out in the Rose Garden about an hour ago to point the finger squarely at Congress.
The president has long contended that this is an issue of supply and demand. He insists that the key to increasing supply is allowing more drilling offshore in the United States, drilling in Alaska's Arctic National Wildlife Refuge, opening up more lands in the West for oil shale development. And the president called on Democratic leaders to come out and allow a vote on those ideas before Congress leaves at the end of the week for its August recess.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The time for action is now. This is a difficult period for millions of Americans families. Every extra dollar they have to spend because of high gas prices is one less dollar they can use to put food on the table or to pay the rent or meet their mortgages. The American people are rightly frustrated by the failure of Democratic leaders in Congress to enact common sense solutions.
(END VIDEO CLIP)
KOCH: Now, the White House and Congress know what really may be at stake here is perhaps the elections in November. The concern is that the voters could take their anger out on whatever party they see is to blame for inaction on soaring gas prices.
And that's why you have seen the president coming out virtually every day speaking out on energy, blaming Congress. And that's why also you'll be hearing the Democratic leadership on Capitol Hill saying it is, indeed, the president's energy policies that got us where we are. And that's why it's time, Rick, to try their ideas.
SANCHEZ: Yes. And they say there's possibly another way to fix it. They say it's the fault of many of these index speculators.
KOCH: That's what they say.
SANCHEZ: We're going to be talk about that in just a little bit, as well.
Kathleen, thanks so much for that report.
KOCH: You bet.
SANCHEZ: Let's go back over to Gerri.
WILLIS: OK. This morning's events obviously meant to send a strong signal to lawmakers on Capitol Hill, where the energy negotiations are ongoing without a deal in sight.
CNN's Brianna Keilar is live right now in Washington with the very latest.
Brianna, it sounds like the beat goes on. Big issue, no solutions.
BRIANNA KEILAR, CNN CORRESPONDENT: That is one way to put it. Democrats and Republicans at this point downplaying the possibility that Congress will come to an agreement on energy legislation before they head home for their month-long August recess, which begins at the end of this week. So in the Senate, what you have is Democrats who have proposed legislation, but Republicans feeling like they don't have enough input there. And then in the House, Speaker Nancy Pelosi has vowed not to allow a vote on oil drilling, so things stalled there, as well.
Democrats are blaming Republicans, Republicans are blaming Democrats. Here's House Minority Leader John Boehner.
(BEGIN VIDEO CLIP)
REP. JOHN BOEHNER (R), MINORITY LEADER: This is a defining week for this Congress, for Speaker Pelosi and Harry Reid and Barack Obama, and the drill-nothing Congress. We should not go home for a month of vacation without dealing with the issue the American people most want us to deal with, and that's the cost of gasoline.
(END VIDEO CLIP)
KEILAR: Democrats and Republicans so opposed on what the solution is here. Republicans, by and large, agree with the president that drilling off the coast of California and Florida and in the Arctic National Wildlife Refuge is one solution to bringing gas prices down, but Democrats are vehemently opposed to that. They, by and large, are proposing to cut down on oil speculation that they claim drives up oil prices. They also want to release some oil from the Strategic Petroleum Reserve and increase research of alternative energy sources.
Well, that said, there is a bipartisan group of House members introducing a bill today that would include offshore drilling. Here's Congressman Neil Abercrombie, Democrat from Hawaii.
(BEGIN VIDEO CLIP)
REP. NEIL ABERCROMBIE (D), HAWAII: The people of the United States are completely frustrated and disgusted with the fact that the Congress has done nothing to respond. We can't pass a bill. Can't pass the House, can't pass the Senate. It's not working. So we determined that on a nonpartisan basis, that everybody would bring their best efforts to the table.
(END VIDEO CLIP)
KEILAR: But again, even with pressure from Americans who are frustrated with high gas prices, it's really looking like Democrats and Republicans are content to play this blame game until they leave Washington for August recess -- Gerri.
WILLIS: It sounds like a whole lot of gridlock.
Brianna, thank you for that.
SANCHEZ: All right. Let's bring you back now to what we're talking about, what you just heard Brianna say. The Democrats have one plan over here, the Republicans have another plan over here.
Hopefully they're going to be able to somehow come together, right? Well, let's see.
Texas Senator Kay Bailey Hutchison is among those trying to hammer this out.
Senator, the clock is ticking. Are you guys going to be able to do this? You're down to just a matter of days, aren't you?
SEN. KAY BAILEY HUTCHISON (R), TEXAS: Well, I hope so. We all want commonsense solutions. That will include production, as well as conservation, and as well as trying to encourage solar and wind energy, the renewables. We can have a balanced package, but it means that we have to start debating amendments and putting together that balanced package.
SANCHEZ: Let's do this, let's be real specific. Let's start with what the Dems want. All right?
The Democrats are saying, look, if we put pressure on some of these index speculators, who some experts say can drive up the price of gas by up to $2, this thing could really work. And that's the first thing that we have to do, they say.
Good idea, bad idea? You say what?
HUTCHISON: Well, the experts say that this is a supply and demand issue. The way to bring down speculation and get to those people who are hedging against higher prices is to show that we're going to reduce more and produce more supply.
That's the way to bring the hedgers down. That is what seems to be lost on the majority. But I think Warren Buffett and "The Washington Post" and "The New York Times" even agree that, really, it's time to start thinking outside the box.
SANCHEZ: OK. They say control the speculators, you say we just need to drill. If drilling is such a good idea, I mean, why didn't we start doing this a long time ago? Isn't this like waiting for the patient to be almost terminal before you start to give him his medicine?
HUTCHISON: Actually, Congress passed drilling in ANWR and President Clinton vetoed it. We would be drilling, we would be producing the same amount that we import from Saudi Arabia every day if President Clinton hadn't vetoed it when Congress passed it.
So we have tried. And I think now the circumstances are different. Even people who used to be against drilling, knowing that that is an interim solution for the next 20 years as we get the new technology up and going...
SANCHEZ: Oh, right. Right.
HUTCHISON: ... even people who have been against it in the past have said, change of circumstances.
SANCHEZ: Well, who wouldn't be against it with the gas prices up and around $4, and it costs us all about $100 every time we go to fill up our tank? That makes sense.
In fact, we've got a poll. I think we might be able to put that up. Well, Americans asked this question say that they would prefer offshore drilling by 69 percent to 30 percent.
Again, this is like the patient at the hospital who's on his dying days. Yes, he's desperate, he wants a solution. But now let's look at the flip side of this.
I'm going to read to you what the Energy Information Agency says about the impact of offshore drilling, because a lot of people may see this as a panacea. It doesn't seem to be.
They say extra drilling "... would not have a significant impact on domestic crude oil and natural gas production or prices before the year 2030."
That's a long wait, isn't it?
HUTCHISON: Well, I think if we start taking action -- first of all, I think it will be sooner than that. But we have other options.
We do have ANWR, we have oil shale in Colorado, Utah, and Wyoming. Those are other options. We have more drilling in the Gulf of Mexico, which is another option.
There are many other drilling opportunities that are now closed. But, having said that, even if it were 2020...
SANCHEZ: Or 2030.
HUTCHISON: ... even bring the speculation down...
SANCHEZ: Yes. HUTCHISON: Even 2030, but I reject that. But even if it were, it would bring the speculation down, because why would someone hedge that prices were going to continue to go up if we have said we are going to increase supply?
SANCHEZ: Good point. Kill two birds with one stone.
One final question I want to ask you. I'm going to put you on the spot here, OK? Because I'm trying to represent the American people, and this is what they would want to know.
Will you go on the record right here and assure the American people that you will not go on recess until you've got this deal done?
HUTCHISON: Oh, if we were in the majority, I would say yes. I don't control the majority, but we are pressing hard right now.
We are in negotiations to make this a production bill that would be a balanced bill. Our leaders are talking about it.
I think there's movement. They really are, I think, moving. But we're not in the majority, the Democrats are, and they have to make the decision about who goes home. I'm ready to stay.
SANCHEZ: Senator, you're going to get a lot of heat if you guys go away and you don't get this thing done.
HUTCHISON: I'm ready to stay, Republicans are ready to stay.
SANCHEZ: We thank you, Senator Kay Bailey Hutchison from Texas...
HUTCHISON: Thank you.
SANCHEZ: ... for joining us and going through this very important discussion with us.
Gerri, over to you.
WILLIS: Well, with the stroke of a pen today, President Bush signed a massive, massive housing bill this morning aimed at providing mortgage relief for hundreds of thousands of struggling homeowners. Now, this bill is viewed as the most significant housing measure in decades.
It allows homeowners who can't afford their payments to refinance into more affordable fixed-rate, government-backed loans, rather than losing their homes. Lenders have to agree to participate in the program, which may not go into effect until October, or even later.
The bill commits up to $300 billion to the program. The bill also throws a temporary financial lifeline to troubled mortgage giants Fannie Mae and Freddie Mac.
Now, these two government-sponsored enterprises are responsible for half the giant $5 trillion mortgage market. The administration says it'll start right away putting the new policies into action -- Rick.
SANCHEZ: This show is all about you, and it's time for you to get involved. We're bringing you in to weigh in on our "Quick Vote" right now.
CNNMoney.com's Poppy Harlow is here with today's question.
And it is?
POPPY HARLOW, CNNMONEY.COM: It is -- drum roll here -- talking about how rough it is out there for Americans with these high oil and gas prices, all contributing to a very tough economy, putting strain on many household budgets. So we want to know how you're doing with your own personal finances. That is, your economy. Have you changed your spending habits?
Here's our question for you today. "Because of my economy, I have used my credit cards less, used my credit cards more, used my credit cards as usual, or cut up my credit cards."
Let us know on CNNMoney.com. We'll bring you the results later in the show -- Rick.
SANCHEZ: That's an interesting question.
HARLOW: I wonder how many people cut them up.
SANCHEZ: The credit card is like that blanket that Linus had in Charlie Brown, you know?
Gerri, over to you.
WILLIS: Or, it's just a pain in the rear end. It can be either thing, right? Right? OK.
Well, all this talk about energy and drilling, it must be having an effect on the stock market. We'll head down to Wall Street to find out why.
Plus, why checking a second bag at the airport, hey, it's about to get a lot more expensive.
And why Americans' love affair with credit cards, as we're saying, is hitting a big bump in the road.
We're all over issue #1 right here on CNN. Stay with us.
(COMMERCIAL BREAK)
SANCHEZ: And we welcome you back to ISSUE #1. I'm Rick Sanchez.
I told you earlier about the president signing that bailout bill for housing, and Congress working on an energy bill. At the same time, and -- oh, did I mention the deficit? Record deficit? Did I mention that?
How is all of this playing on Wall Street? What are investors doing about all these problematic situations?
(STOCK MARKET REPORT)
SANCHEZ: Gerri, back to you.
WILLIS: All right. Well, Rick, I think that psychology of buying gas is probably depression. But anyway...
Get ready to pay more, more when you fly Delta. It's doubling its charge for a second checked bag.
It'll now cost you $50 to check that second bag on domestic flights. The new fee will apply to those of you who bought a ticket on or after today for travel on or after August 5th.
Now, Delta says the move is part of a set of fee increases to help offset soaring fuel costs. Also going up, fees for specialty items like surfboards and skis checked on both domestic and international flights. You're also going to have to shell out more of your money to check a third bag, and for bags over a certain weight and size.
So not great news.
Look, gas prices may be down, but they're still near record highs. And as you pay more at the pump, you have to wonder, where is all that money going to?
CNNMoney.com's Poppy Harlow, I think she's going to tell us.
HARLOW: Yes. Wrap your hands around this number, Gerri -- $35 billion.
WILLIS: Do I get a part of that?
HARLOW: I know.
WILLIS: No.
HARLOW: That's what everyone's asking me today. We don't get a part of it, but that's how much the world's four biggest oil companies are expected to have earned in just the last three months.
So where is all of that money going? A lot of different places, including into the wallets of oil executives. But a much greater amount of that money is going back to shareholders, possibly to you.
Last year, more than half of the available cash from the five biggest oil companies went back to shareholders in the form of stock buybacks and dividends. Compare that to 30 percent in 2000 and just one percent in 1993. That benefits a lot of mutual funds and 401(k) accounts. In other words, it could benefit you, it could benefit me. And for the second day in a row, the "Energy Fix" is, if you can't beat them, join them.
So where isn't the money going? It's not going to more oil exploration, Gerri. We're basically flat in terms of money going into oil exploration from where we were even 10 years ago.
WILLIS: You know, Poppy, I've got to tell you, though, the stock prices participating by stock ownership, it's just not the same as having all that money yourself.
HARLOW: No.
WILLIS: And what are those stocks doing?
HARLOW: You would think they'd be soaring, right, for the biggest oil companies? They're not really so far this year.
Well, prices of oil, they've been certainly rising. We talk about it every day. That has not translated into higher stock prices for the world's largest oil company, ExxonMobil.
Oil, it's up 27 percent this year, and was up a lot more just two weeks ago. But Exxon's stock is down 14 percent on the year, even though it's expected to report another record quarterly profit tomorrow.
And one reason for that, Exxon is increasingly buying oil on the open market to refine that into gasoline. So its costs are going up, as well.
But yours aren't lately. Perhaps, that's because of this "Energy Fix": prayer at the pump. I love this story.
This group in Ohio prayed for lower prices toward the end of June. Since then, gas is down 8 cents, or 2 percent. Hey, it's something, right? It's something.
WILLIS: Well, I don't know, Poppy. I mean, if I thought it would make a big difference, I'd do it too. But I'm not convinced.
HARLOW: I know. Well, if praying is not your thing for cheaper gas, more energy fixes on CNNMoney.com.
WILLIS: All right, Poppy. Thank you for that.
HARLOW: You're welcome.
SANCHEZ: We're all going to sit around singing "Kumbaya" in just a moment. Maybe that will work as well.
If you you're one of millions of Americans who haven't got your stimulus check in the mail, let us know. Gerri's going to send it to you.
Just kidding. We can help you, though. There's information we can give you on this.
Also, from coast to coast, Americans using credit cards less. Did you know?
Also, when you think lying on your resume is no big deal, think again. That is a dangerous game you could be playing, my friend.
This is ISSUE #1. We'll be right back.
(COMMERCIAL BREAK)
WILLIS: If you are a retiree or a veteran, or you know somebody who is, listen up. More than five million of you may be due stimulus checks of at least $300. Now, to get them, you must file a return with the IRS even though you normally are not required to do so.
Now, over the next few weeks, look for a reminder from the IRS. It's sending info packets to those of you who have yet to file.
The IRS says the packets have all the information you'll need to qualify for the checks. You must have made at least $3,000 in order to receive the minimum $300 check for singles, $600 if married and filing jointly -- Rick.
SANCHEZ: Let me ask you a question, those of you sitting there at home watching us right now. I'm wondering about the way that you're spending these days. Are you finding yourself, for example, using credit cards more or less these days because of what's going on in the economy? It's a good question, right?
CNN Senior Correspondent Allan Chernoff is joining us. He's been looking into this.
And the answer is?
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Rick, you know the old saying, right? During tough times, the tough go shopping.
SANCHEZ: Right. Right. Right.
CHERNOFF: Well, times are so tough right now, that even the appeal of credit cards is fading fast. A study out today from Javelin Strategy & Research finds that many Americans view credit cards as the enemy.
(BEGIN VIDEOTAPE)
CAPPIE PERRAS, CREDIT CARD HOLDER: That one, look at how much we've lost. It's incredible.
CHERNOFF (voice over): When Cappie and Don Perras saw their investment losses earlier this year, they decided it was time to tighten their belts. Cappie, a schoolteacher, and Don, a college professor, swore to stop using their credit cards unless absolutely necessary. A big change from their old attitude.
C. PERRAS: I felt secure with my credit cards, like, oh, well, I always have my credit cards. Now I feel like it's almost like there's a big caution sign in front of the credit card. You know, do not use, only in case of emergency.
CHERNOFF: The only plastic the Perras are using much today is their debit cards.
(on camera): The Perras are economizing. They sold off their gas-guzzling SUV and bought this, a little gas-miser of a car.
(voice over): And the couple is trying to attack their credit card debt of $8,000.
(on camera): How badly do you want to pay that off?
DON PERRAS, CREDIT CARD HOLDER: Oh, it would be a top priority. In fact, we have made it such in our family.
CHERNOFF (voice over): Even so, the Perras say they're barely making a dent in their credit card debt.
Cappie and Don have plenty of company. Americans have built a mountain of credit card debt, nearly $1 trillion, and they're having trouble paying it down, even as 40 percent of households cut credit card use, largely middle income and middle-aged Americans, according to Javelin Strategy & Research, a financial research firm.
JAMES VAN DYKE, JAVELIN STRATEGY & RESEARCH: Credit card companies are running a bit scared right now, and for good reason, because people are having a difficult time paying off their balances.
CHERNOFF: In fact, 70 percent of banks say they're cutting back on credit card solicitations. Many are reducing credit lines to existing cardholders, as well. Even so, banks say they've got the situation under control.
JAMES CHESSEN, AMERICAN BANKERS ASSOCIATION: You know the economy is riskier today than it was a year ago. So you naturally take that into account, so you have the capacity to come out of this even stronger than you came into it.
(END VIDEOTAPE)
CHERNOFF: But, until the economy kicks up and inflation slows down, credit card debt is certain to remain a huge burden for American households, as well as a threat to bank profits -- Rick.
SANCHEZ: Let me put the pressure on you. You just did the research on this story. What's the takeaway? What's the one thing you learned that you need to share with us?
CHERNOFF: The one thing people need to know is you really do need to whittle away at that credit card debt. This is the worst sort of interest, it's not deductible, and you're paying 15, 18, maybe even a higher percentage rate.
You're not -- odds are you are not going to get that return in the stock market. If you're putting money into the market regularly, stop for a little bit. Take that money, pay off your credit card debt. You're going to do better. Then go back to investing.
SANCHEZ: Can you do me a favor? Can you tell that to the U.S. government, as well? That deficit announced this week kind of tells us something, huh? We do better than they do half the time.
Thanks so much. Good stuff.
Gerri, over to you.
WILLIS: And good advice from Allan.
Well, telling a little lie here and there is human, but would you lie on your resume? It's a trend that can have serious consequences. We'll tell you what they are.
And getting what you want -- don't you love this -- when you want it. We'll tell you how to get a good deal on just about everything.
You're watching the home of issue #1, the economy, CNN.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back to ISSUE #1. I'm Rick Sanchez.
Here's a question for you. How far would you go to get a job? Would you lie on your resume to get a job?
Think about that. We're going to come back to it in just a little bit.
But first, we were together last week at the Unity Conference in Chicago. Now we're together via satellite. Isn't TV grand?
DON LEMON, CNN CORRESPONDENT: TV is grand because you get to hang out and we don't have to pay for it, Rick. How are you doing today?
SANCHEZ: You picking up the bill?
LEMON: No, well, CNN's picking up the bill. You doing OK? By the way, you're doing a great job up there. A great job.
SANCHEZ: I'm a regular Ali Velshi.
LEMON: No, you're a regular Rick Sanchez and we appreciate that.
SANCHEZ: Thanks, Don.
LEMON: Hey, Rick, love you. Talk to you in a little bit.
I want to talk now about President Bush. President Bush is calling out Congress. Last hour, the president came out of a meeting with his cabinet. Their topic, reigning in gas and energy prices. President Bush says his administration has taken steps to lead, now Congress has to follow. President Bush wants a Democratically controlled Congress to approve more drilling offshore and in the Alaskan arctic.
North Carolina police have charged a suspect with the killing of a pregnant soldier found in a motel bathtub. Army Specialist Megan Touma was seven months pregnant when she died last month. Now police have charged a fellow soldier, who they say is the father of her unborn baby. They're charging him with first degree murder. His name is Edgar Patino. Police say they've linked Patino to some anonymous confession letters mailed to police and the local newspaper.
California burning and it is shaking, as well. "We were very lucky." That's a quote. Governor Arnold Schwarzenegger said that after yesterday's 5.4 magnitude earthquake. The quake rattled nerves from Los Angeles all the way to San Diego and even to Las Vegas, but caused only limited damage and minor injuries.
Meantime, on the California fire lines, more than two dozen helicopters and air tankers are flying over a wildfire near Yosemite National Park. They're trying to stop the fires' spread through terrain that's too tough for firefighters to even reach. As many as 4,000 homes are threatened.
OK. Before I throw it back to Gerri Willis, I know she's waiting for me, just a second, Gerri, I have a question for you. You've been overseas. You've been to Amsterdam. I'm sure some places where people can smoke marijuana in public, correct?
WILLIS: I wasn't been to those places. I haven't been to those places. No. I'm telling the truth, you know.
LEMON: So what about here in the United States? That's what some people are -- have been . . .
WILLIS: Yes, I know, people are fighting for it, right?
LEMON: Been fighting for it. Well, Barney Frank introduced legislation. He's going to hold a press conference today to talk about it. And we're going to talk with him in the "CNN NEWSROOM." I'm going to have a conversation with him in just a few minutes about that. He says it's time that America catches up with the rest of the world.
WILLIS: Great guest. That's a good interview.
LEMON: Yes. Yes, we'll see you. Hey, Gerri, always great to see you and Rick. Have a great show. I'll talk to you later.
WILLIS: Great to see you. Thank you.
LEMON: Bye.
WILLIS: Well, everybody wants a job, right? Times are tough. And a lot of folks will do, well, just about anything to get a job. But there are limits. There is such a thing as going too far, like lying on your resume. And there could be consequences down the road as we're about to find out. Richard Castellini is with careerbuilder.com.
OK, Richard, I want to start by talking a little bit about the fact that this was a real survey. It sounds funny, but you interviewed 3,100 hiring managers, 8,700 workers. And what did you find? How many folks have lied on their resume?
RICHARD CASTELLINI, CAREERBUILDER.COM: Well, although only 8 percent of workers admitted to lying on their resume, about half of the hiring managers have seen flawed resumes.
WILLIS: That doesn't match-up, really.
CASTELLINI: Yes.
WILLIS: So somebody's lying even in your survey, I think. What happens, though? Richard, what happens when somebody lies on their resume? They get caught? Are they immediately booted?
CASTELLINI: Well, I mean, about 60 percent of the hiring managers will immediately dismiss that candidate. Thirty-six percent of the hiring managers will actually continue to review them in the process, but it always puts a dark cloud over them. And only 6 percent of the hiring managers have ever hired someone that had a flawed resume, so to speak.
WILLIS: Flawed. Is that what we're calling it now? OK. Well, tell us a little bit about what people are lying about. Because, you know, it's one thing, some people, they're worried about different kinds of things in their background. Maybe they're trying to cover up a period of time maybe when they didn't work. But what's the main thing out there that folks are not telling the truth about?
CASTELLINI: A lot of people are embellishing their responsibilities. You know, making out their jobs as a cashier to be a manager. If you're the manager, to be a district supervisor. Things like that. you know, beyond that, people are claiming to have skills that they don't have and stretching those employment dates.
WILLIS: All right. So lots of things, obviously, people aren't telling the truth about.
I would assume that some businesses, people lie more than others, true?
CASTELLINI: Well, I think it varies. Obviously in the higher professional ranks, you would assume that that would decrease into some -- into areas that you can't check as much, probably less, but we didn't survey into that area.
WILLIS: Hospitality, obviously, at the top of that list, transportation, utilities. I've got to get you to this question. What are the big lies (ph) that people have told that were absolutely not true?
CASTELLINI: Well, some of these are just outrageous. People claiming to be members of the Kennedy family, people claiming to be the CEO of a company despite being an hourly worker, people inventing schools despite the fact that the school doesn't even exist. And here's the one that really wasn't smart. Somebody claiming to be a member of Mensa.
WILLIS: That was not.
CASTELLINI: Yes.
WILLIS: OK. Well, we'll keep that in mind. Don't put Mensa on your resume.
OK. Rick Castellini, thanks for helping us out. Great information and a really great topic.
CASTELLINI: Oh, thank you.
WILLIS: Rick.
SANCHEZ: We're following Wall Street behind me. Also, these things. Imagine if your town where your live said no more McDonald's for you. No KFC. No Burger King. It's happening in one major city. We're going to explain to that to you.
Also, how to get what you want every time. We're going to show you how to -- you ready, this is an important word here -- haggle. Haggle. How to haggle. Don't miss this one, folks. It'll save you a whole lot of money, right here on ISSUE #1.
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WILLIS: The city of Los Angeles is going on the offensive against fast food. The city council there is pledging a moratorium on new fast food eateries in poor areas of the city. Now those areas are loaded with fast food joints and above average rates of obesity. The year-long ban is aimed at giving the city time to attract restaurants that serve healthier food. But not if the California Restaurant Association has anything to do with it. The group is considering a legal challenge to the ordinance -- Rick.
SANCHEZ: I want to talk about something now that involves saving you money. And it's something that you can really save a lot of money on and you may not even know that the opportunity is there. Now if you want to practice this, the best place to go in the United States is China Town here in New York. All right? This is something that's in "Money" magazine. Amanda Gengler I with us now. She's going to be talking exactly about it. But before, I've got a story for you. Are you ready?
AMANDA GENGLER, WRITER, "MONEY": Ready.
SANCHEZ: So I go to China Town yesterday and I'm looking around, I figure I kind of need a briefcase. I walk into a place and they show me this briefcase. And I start, nah (ph), I really don't need it. So I start to walk out. The closer I get to the door, the price goes down. Now I'm closer to the door, the price goes down again. Now I'm almost out the door, the price is now down by $15, $20. I ended up getting this briefcase for about $40. It's leather. It's nice. I was haggling without even knowing it.
GENGLER: And threatening to leave, it usually works. And you are one of the 70 percent of Americans who has haggled a price down recently. That's up 12 percentage points from a year ago. So now is a great time to do it.
SANCHEZ: This is the time to haggle because, what, people are desperate out there?
GENGLER: Well, with the way the economy is going, a lot of industries are down. I mean, health clubs, they saw great growth in the 90s, they're down. Retail sales have been sluggish since January. So these companies need to get you in the door.
SANCHEZ: OK, but, look, people in Asia, people in Europe, people in other parts of the world, they do this like it's just the way they do it. It's a system where they go in and they talk somebody down. We're not used to it. So we don't know where and when and how. Can you teach us?
GENGLER: OK. Well, first, it's obviously going to depend on where you're going. But a great place is just to throw out that other competitors are offering you a better deal. So this can work with maybe your cell phone carrier or your cable company. The cable companies and the telephone companies are in a turf war right now. So call them up and say the other company is offering me a better deal, can you match this price?
SANCHEZ: And that's it. They'll usually take it from there because they're going to want your business.
GENGLER: Or someone like a mortgage broker, for example. The housing industry is down, brokers need your business. So don't beat around the bush. Just stay up front, will you negotiate on your commission? And brokers typically earn 1 percent to 2 percent of the purchase price and commission. And you can probably get that down to about 0.75 percent.
SANCHEZ: The average person, the average citizen is real buttoned up about this because they think it's a little intimidating. They're big numbers. They're not a mortgage broker. So I almost need you to tell them it's OK, you can go in there and say, I can't afford this. I need you to get me a better deal, right?
GENGLER: If you threaten to either take your business elsewhere or close your account or go to a competitor, then you have the power. That's what you need to understand today, that you do have the power.
SANCHEZ: What kind of savings can be realized by something like this? And I know I have to be, you know, example specific. So let's start with the mortgages, for example. You're trying to get a mortgage of let's say $100,000. How much money could you save if you've got the right numbers?
GENGLER: Well, let's say that you were able to get that commission, generally about 1 percent to 2 percent of the purchase price down to 0.5 percent. I mean we're talking on a $200,000 loan, a $250,000, that could be over $1,000.
With a health club, you have a good shot today, this may be news because people don't think about negotiating with a health club, but August is generally their down period. Sales reps need to meet their goal. So go in at the end of the month and say, what kind of wiggle room can you give me? And you may get that initiation fee knocked off. That's big with a health club. Or maybe even a lower monthly rate.
SANCHEZ: So look for the wiggle room just about everywhere. We tend to think everything has a set price. There really is no set price.
GENGLER: Even in big retail stores. The trick there is probably finding the person who has the authority to give you that. But bring in a printout of whatever purchase you're looking for at a lower price and say, can I talk to your supervisor? Can you match this?
SANCHEZ: That is news you can use. Good stuff. Great explanations. Thanks for taking us through it.
Gerri, over to you.
WILLIS: Love that. OK, find the wiggle room and then haggle.
There is, I should say, a developing story at JFK Airport in New York City right now. Flights are being delayed and canceled. We're going to tell you why.
And we'll open up the Help Desk. We'll talk about the topics that concern you. The address is issue1@cnn.com.
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SANCHEZ: All right. We've got some developing news. We're showing you some of these pictures. Obviously you're looking at a lot of bags there. It's a developing story that's coming to us out of John F. Kennedy Airport.
If you're flying American Airlines out of JFK today, you might be having a really bad day. And here's why. American Airlines is having some kind of trouble with its conveyer belt system that handles all this luggage you see here. Get this. Only 10 percent to 20 percent of the bags are actually making it on to the flights. Only 10 to 20 percent are making it. The rest, uh-oh.
Twenty flights have already been delayed by more than an hour. The airline says that the conveyor belt problem is related to a computer software issue that runs the system. It says that workers are trying to sort the bags out right now manually. So they're trying to get it done. They're doing the best they can. It says they're going to deliver those left behind bags once the problem is fixed.
By the way, CNN's Mary Snow, she's in route to JFK Airport right now and she's going to be able to file a report for us as soon as she gets there. Let us know really how bad the problem is, if it's really that bad at all. No word if American's going to be refunding the $15 they charge for the first bag that's checked, by the way. Good question, huh? We're on it for you.
Gerri, over to you.
WILLIS: Thanks, Rick.
Well, OK, folks, it's Help Desk time. Answers to your questions about money. Let's get right down to it. Stephanie Auwerter is with smartmoney.com, Doug Flynn is a certified financial planner, and Amanda Gengler, you just saw her a few minutes ago, is back with us, from "Money" magazine.
Welcome all.
Let's get right down to that first question. Jim in Gettysburg, Pennsylvania, asks, "we are about to purchase our first home. We waited out the market over the last few years because it was too inflated. Now, however, we are wondering how much we can negotiate down from the asking price."
So we just heard you talk about haggling, Amanda. Tell us, on a big ticket item, how do you haggle?
GENGLER: Forget what the sellers are asking. Too many sellers are pricing their home according to yesterday's market. So instead, ask your agent, what have comparable homes gone for in the area I'd say in the past three to six months. And then don't be afraid to come in 10 percent below those recent selling prices. Even maybe even 15 percent if there's a huge glut of homes in the area because, worse case scenario, they say no, well, you have plenty of other homes to choose from.
WILLIS: Doug, I want you to weigh in on this. Because I know you were on the case for folks, for consumers, the people that you work with all the time.
DOUG FLYNN, CERTIFIED FINANCIAL PLANNER: Sure. When clients are entering into this kind of a transaction, you want to come in as low as possible almost to the point of insulting the seller, but not quite insulting them, but enough to get the dialogue going so they know you're interested. Because you should go back and forth probably three times before . . .
WILLIS: On price?
FLYNN: Exactly. So you have to get in low enough so that you have room to go back and forth a couple times.
WILLIS: The key is getting good information on what comps are and understanding the market so you feel really comfortable with your number and you're not embarrassed to say it.
Let's go to the next question. It's an anonymous one. "I recently looked at my credit report and noticed I had about $8,000 in collection account debt. I want to pay it off but don't know who to pay. Should I pay the collection agency or the original creditor -- which are both showing negatives on my credit report?"
OK. There are like five red flags in this, I think, Stephanie. What do you say?
STEPHANIE AUWERTER, EDITOR, SMARTMONEY.COM: Well, for starters, you should probably pay off the balance with the collection agency. They're the ones that are holding the debt right now. But it is obviously a sign that there are some problems going on here. For starters, this reader wasn't aware that this was out there. And I would say if they really are struggling with debt, not only do they want to pay this off, but they should find a good, reputable credit counselor. You can find a non-profit to really help you out and then really work on building back that credit score, which does take a little time.
WILLIS: Amanda? You look like you had something to say there. Because I think this is a fascinating question. This person doesn't even know they had something in collections. I mean, you know, calling the collection agency, that's not where I would go first.
AUWERTER: And paying off that debt may not improve the score by as much as you think. That damage is already there. So it really is going to take probably a couple of years to sort of build your way back to good credit and the most obvious thing to do is to pay those bills on time.
WILLIS: I hate surprises in your credit report.
GENGLER: We saw a recent study that said 25 percent of credit reports had errors serious enough to deny you credit. So it's a great reason why you need to go look at it.
WILLIS: Right. Lots of errors. Lots of errors in those reports.
Archie in Iraq. We have an e-mail from Iraq. It says, "I'm in Iraq working as a contractor, making on average $7,000 a month tax- free." Wow. "I have about $4,000 left over after I pay my bills. What is the best investment for me, or should I just continue trying to save this money?"
Doug, what do you say to your clients who come to you and say, I have a lot of dough I want to put to work?
FLYNN: The fact that he has $4,000 left over every month, that can go a long way towards his goals. And the question is, what are the goals? Are you planning to buy a home? Are you planning to put away for retirement? So really what it comes down to is if they are long-term goals you want to go for, it's a good time to get into some equity stock mutual funds.
WILLIS: Now is the time, right?
FLYNN: It is the time. And if you're just getting in, these are the times to really get in, if you have five or more years. If you're looking at one to three years, I would go with something like a tax- free mutual fund, tax-free bond fund. The pricing is so good right now.
WILLIS: OK. Well, guys great answers to tough questions. Really appreciate your help today.
Stephanie Auwerter, Doug Flynn and Amanda Gengler, thanks so much for your help today -- Rick.
SANCHEZ: Hey, if you want to ditch your car, you want to forget the plane, then why not get a jet pack? Look at that. And we're going to tell you who that guy is right there, by the way. Remember when I got tasered and that made it on Jon Stewart and all that stuff? Well, this could be another CNN-er having a Jon Stewart moment. Not promising.
Also, don't forget to vote. Log on to CNNMoney.com right now for today's Quick Vote. The results next.
You are watching ISSUE #1.
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WILLIS: Has your financial situation led you to change your spending habits? That's today's Quick Vote question. For how you voted, let's check back in with CNNMoney.com's Poppy Harlow.
OK. What did people say?
HARLOW: It definitely has. We're talking about how much they use their credit cards. Thirty-seven percent of you out there, you did say you use your credit cards as usual. But 34 percent said you use them less now. Fifteen percent say they use their credit cards more. And 13 percent of you, congratulations, you have cut up that plastic, cut up those cards. That's a good thing, right? Pretty much.
WILLIS: Well, maybe.
HARLOW: Not for your credit score, right?
WILLIS: Yes, I don't think it's a good thing. Good to hear that people are using the same. But our viewers, a little different than the national average.
Rick, over to you.
SANCHEZ: Some people get all the good assignments. So, on a clear day, plus two large fans, plus our own Miles O'Brien equals a whole lot of fun. I want you to watch Miles doing what we refer to as a Jon Stewart moment.
(BEGIN VIDEOTAPE)
MILES O'BRIEN, CNN CORRESPONDENT: It was really quite amazing, my first fight was just a few moments ago. Obviously, I lived to tell the tale. I could describe it for you, but the best thing is for you to watch for a second.
Training wheels on the side here. The team is going to make sure I don't get too far (INAUDIBLE). But for the first time I'm going to try this right now and give it a whirl. Here I go. Here I go, Alina (ph). Oh, boy. I want to go a higher, don't you? That's not bad. They're having (ph) me slow down now. You want me to land? How did I do?
(END VIDEOTAPE)
SANCHEZ: You know what's amazing, I think with all that equipment, about $10,000 to do that thing. And, Miles, here, we're about to do it for free. You read. One, two three.
WILLIS: One, two, three.
And it didn't cost a thing. Don't you like that?
SANCHEZ: That was mean. That was mean.
WILLIS: Yes. Well, you know, we love him.
All right. The economy is issue #1. And we here at CNN, we're committed to covering it for you. ISSUE #1 will be back here tomorrow, same time, 12:00 p.m. Eastern, right here on CNN.
SANCHEZ: We kid. We kid, Miles.
CNN "NEWSROOM" with Don Lemon and Kyra Phillips starts right now.
