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The Income Gap; Great Economic Disconnect; Winners & Losers 2013; Aaron Rodgers Ready to Return on Sunday

Aired December 27, 2013 - 09:30   ET

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

CAROL COSTELLO, CNN ANCHOR: At an all-time high. That's the 50th record set this year. Stock futures were lower before the opening bell.

Pope Francis -- well, Pope Francis is, OK I'll say it, he's a rock star. So perhaps it's fitting that a fading star used the pope's luster to sell his message. President Obama appears to be doing just that. According to "The Los Angeles Times," the president asked the White House speechwriter to add a reference to the pope in a speech earlier this month. He did.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Some of you may have seen just last week the pope himself spoke about this at eloquent length. "How can it be," he wrote, "that it's not a news item when an elderly homeless person dies of exposure, but it is news when the stock market loses two points?"

(END VIDEO CLIP)

COSTELLO: Now, the president was talking about how the income gap is eroding the American dream. With me now, Will Cain, columnist for "The Blaze" and CNN commentator, and Marc Lamont Hill, also a CNN commentator and host for "HuffPost Live."

Welcome to both of you.

WILL CAIN, CNN POLITICAL COMMENTATOR: Good morning.

COSTELLO: Good morning.

MARC LAMONT HILL, CNN POLITICAL COMMENTATOR: Good to be here.

COSTELLO: OK, Marc, let's start with you. President Obama wants to raise the minimum wage to $10 an hour. Can the pope help him do it?

HILL: I'm not sure if the pope can help him do it. This isn't like 40 years ago when there was a quote/unquote "catholic vote" where you could sort of predictively say that quoting the pope would help you. But I do think that speaking to the issue of poverty, not just in the United States but around the globe, resonates with people. And the pope has managed to do it in masterful fashion. But, of course, the pope doesn't have to face political opposition and partisanship. COSTELLO: No, but that's true. Well, Will, the pope's approval rating is at 88 percent. The president has been praising him in other interviews, as well. The question is, would Pope Francis embrace President Obama? Would he want his message politicized?

CAIN: You know, that's a good question. I don't know if Pope Francis giving just a message of morality and charity or if he's giving one that's political philosophy. What I would say is, President Obama is blatantly trying to change the subject. You pointed out that Pope Francis is a rock star and I think you said President Obama is a fading star. Yes, he'd like some of that 88 percent approval rating. And he's attempting that, to turn the conversation away from Obamacare, to remind people, hey, remember, can we talk about - and I've joked about this with Marc, can we talk about how Republicans hate poor people? Can we get back to that and not this health care thing I've screwed up so massively?

COSTELLO: Well, Marc, you know, other presidents --

HILL: Well, they're actually not - they're actually not competing claims. I was going to say, they're not exactly competing claims.

CAIN: No. The idea is (INAUDIBLE).

HILL: Because Obamacare is good (ph), Republicans are opposed --

COSTELLO: Well, Marc, what I was going to say --

HILL: Well, and it's better a lot better than not having it.

COSTELLO: Other presidents have embraced the pope. For example, George W. Bush borrowed "culture of life" from Pope John Paul, remember that, to protest abortion. And it kind of worked for him, didn't it?

HILL: Well, it works until it doesn't work anymore. Reagan got great support from Pope John Paul II on the Soviet bloc in terms of its role in Eastern Europe. But then the moment the pope says, hey, wait a minute, what about those nuclear weapons you keep ramping up, all of a sudden Reagan says, hey, let's leave church out of this. George Bush with the exact same thing with the economy.

It's very difficult to use the Catholic Church in a particular way if you're not willing to take the whole message in, because as soon as the abortion conversation comes up, now Democrat are in a pickle themselves. So it's definitely very careful if how they use the Catholic Church or any religious tradition.

CAIN: Well, and the president -- and the president, for that matter, hasn't actually been in good standing with the Catholic Church over the last several years. You know, we're going to see in front of the Supreme Court in the first half of 2014 an argument over whether or not the argument can force employers with catholic religious doctrines as part of their core being, whether or not they can force them to cover birth control. That's going to go before the Supreme Court. President Obama's had a huge problem with the Catholic Church. I would suggest he be very careful now about adopting economic populism because the pope gave a speech.

COSTELLO: Although the pope if - wants people to stop talking about issues like that, right?

HILL: Well, I think he's adopted (INAUDIBLE) populism.

COSTELLO: The pope wants people to stop talking about social issues so much, right, and concentrate on other things like helping the poor. So that --

HILL: Right, which is a social issue. I think sometimes we - I think sometimes we decide that thing like poverty, unemployment aren't social and even moral issues. I think what President Obama is doing wisely is saying, wait a minute, there's a moral agenda and a social agenda that isn't at odds with the agenda of actually helping the most vulnerable citizens. And to Will's point, that's not about changing the subject. President Obama has consistently said we need to address poverty. That's not to say that his social policies always do it properly. I have many critiques of Obama. But he's absolutely not changing the subject. He's trying to get the American people where they need to be, whether it's raising minimum wage, whether it's extending unemployment, or whether it's invoking the pope's message.

COSTELLO: Go ahead, Will.

CAIN: But just to bring this conversation full circle, Carol, you started out, should the president be adopting religious messages to turn them into political messages? And Marc's right that this is ultimately a moral decision, a moral message. And I should point out, look, American give to charity at twice the rate of any other country in this world. And if you want to bore into it, American conservatives give 30 percent more on household than any other group in this country. What we have to define is, who is in charge of taking care of the poorest among us. Is it us as individuals and citizens? If that's the message President Obama wants to put out, I'm happy and ready to hear that. Or is it at the government's will and the government's force? And there our disagreements come up.

COSTELLO: Could it be a little of both, or am I like going way out on a limb?

CAIN: A little carries a lot of weight.

HILL: Could be.

CAIN: A little of both.

COSTELLO: I just wondered.

OK, let's talk about something else before you guys have to go.

HILL: Will wants no government (ph) -

COSTELLO: Because I have to show you this picture. These strange political bed fellows. This new video. It shows Snoop Dogg and Secretary of State John Kerry and they're doing the big fist -- look, they're talking. I wish we could hear what they're talking about because the audio is bad. But, look. Look at the fist bump.

CAIN: You know, I'll tell you, we know Kerry's -

HILL: I love it.

CAIN: We know Kerry said to Snoop something about he invented the thing you do, he invented your medium. He was talking about rap, I assume. So, Marc, who's Kerry talking about? Who invented it. And Snoop's like, you're right.

HILL: I was trying to figure it out because he said he did your whole thing (ph). I just love the fact that John Kerry felt the need to give Snoop a hip-hop education. And he -

CAIN: Right.

HILL: And by the way, Snoop didn't give John Kerry a pound. John Kerry gave Snoop a pound. Snoop did this. He - I mean Kerry did this. Then he did this. He was unsure that Snoop was going to reciprocate, so John Kerry didn't want to look crazy. I just wish John Kerry looked as cool in 2004. You know, we might have a different president.

CAIN: Hey, five minutes before that interaction, did Snoop know who John Kerry was?

COSTELLO: Oh.

HILL: Probably not.

COSTELLO: Although - although I will say, back in the day, Snoop was such a rebel and now he's hob-nobbing with, you know, the government. Just seems odd in some ways.

CAIN: Right. Right.

HILL: A little show (INAUDIBLE).

CAIN: That's a fair point. The ultimate in going mainstream.

COSTELLO: Exactly.

HILL: There's hope for you, Will.

COSTELLO: Oh, geez. Will Cain, Marc Lamont Hill, thanks so much for being with me.

CAIN: Yes.

COSTELLO: Still to come in the NEWSROOM, the great American economic disconnect. The government says the economy is growing. So why are middle class Americans still feeling the pinch? That story is just ahead.

(COMMERCIAL BREAK)

COSTELLO: There are plenty of signs the American economy is roaring back to life. The unemployment rate is at a five-year low. Car sales are at a seven-year high. The Dow Jones is up 25 percent just this year. So why aren't middle class Americans feeling any of the benefit? A new CNN/ORC poll finds that nearly 70 percent of Americans say economic conditions are poor. Just 32 percent said they were good. So why is there such a disconnect and how do we fix it? To discuss I'm joined by "USA Today" personal financial columnist John Waggoner and David Wessel, a contributing correspondent to "The Wall Street Journal."

Welcome to you both.

DAVID WESSEL, CONTRIBUTING CORRESPONDENT, "WALL STREET JOURNAL": Thank you.

COSTELLO: OK. First we'll start with a tough question. So, John, why is there such a disconnect?

JOHN WAGGONER, INVESTING COLUMNIST, "USA TODAY": Well, I think the main reason is because people aren't getting paid very much. They haven't had a raise after inflation for nearly a decade. They're losing money to increasing prices and you feel poor. That's just the way it is. Companies are not sharing the money that they're making with the people that work for them.

COSTELLO: So does that mean the economy is really roaring back it life, David?

WESSEL: Well, the economy is definitely getting better. But I think John's right, the benefits of that renewed growth are not being widely shared. So we see the stock market going up, up more than 25 percent over the past year, but for the half of Americans who don't own share, that doesn't do you much good. And so it's very unevenly distributed. You mentioned that unemployment is at a five-year low. That's true. But it's still 7 percent. In the old days, we'd consider that a recession.

COSTELLO: Oh, you're not kidding.

Let's talk a little bit more about the stock market because Gallup has some interesting number. It says that, as you said, David, only 50 percent of middle class Americans are invested in the markets right now. That's actually down 66 percent from just six years ago. Why is that, John?

WAGGONER: Well, two reasons. First of all, you've had two soul-searing bear markets in the past 12 years. One of which was the worst since the Great Depression. People remember that. That's a generational loss. You lose 50 percent of your money in the stock market. So that's one reason.

Another reason is a lot of people are unemployed. They've had to yank money out of the stocks - the stock market just to live on. So they've taken their savings and they're eating their seed corn, but that's what you have saving for.

COSTELLO: So, David, when we talk about the wage gap and how important that is to our economy, that all plays into this, too, because people don't have, as John said, so much money in their pocket to invest in anything besides housing and food.

WESSEL: That's right. So middle class, the people at the middle of the middle class, the median income, hasn't gone up very much over the last decade. So those people don't have a lot of money to put in the stock market. The typical American household, if you don't look at their equity in their house, has assets of only $17,000. That's all the money in the bank, all their retirement and everything. So those people aren't playing the stock market and they probably shouldn't.

COSTELLO: So I'm going ask for answers now. Like what's the answer, John? Is it the minimum wage going up to $10 an hour? I mean what is the answer?

WAGGONER: Well, you have profits in the country that are at the highest point in the republic's history. You also have vast amounts of cash that companies are sitting on. What companies can do is peel off a little money and give their workers a raise. Reward the people that have given them so much success in the past five years.

I don't think that's too difficult. Henry Ford did it when he was starting his company. People can only buy cars if they make enough money to, you know, to buy them.

COSTELLO: So, David, why aren't companies doing that?

WESSEL: Because they don't have to. There's so many unemployed workers out there that they don't need to give raises in order to get workers. I think part of the answer is, it would be great if the economy were growing faster. And, fortunately, there are a few sign that that may be beginning to happen. It's a good thing that Congress has decided to relieve a little of the pressure of the sequester, the across-the- board spending cuts. That was hurting the economy. The second half of 2013 is promising. If next year the economy does better, unemployment comes down, worker are more scarce, companies will have to pay more, and as John says, they have the cash to do it.

COSTELLO: OK, so I'm going to ask you both to stick around because up next we're going to talk about the year's biggest winner and losers in the business world. Thanks, guys. We'll be back in a minute.

(COMMERCIAL BREAK)

COSTELLO: 2013 was a wild one for the business world. Stocks shot to record highs, but we also know, you know, the government shut down and the unemployment rate is still stubbornly high. So what were the biggest winners and losers in the business world this year?

I'm joined again by "USA Today" personal financial columnist John Waggoner and David Wessel, a contributing correspondent to the "Wall Street Journal." Let's start with you John, tell us about your top picks for this year's business winners.

WAGGONER: Well, the first one I'll start with is the Affordable Care Act which is a tremendous boom for small businesses. As you know, it's incredibly difficult for you to get insurance if you're 50 or older or if you're sick and have small children or sick and need special attention.

But now what happens is people who have always wanted to start small businesses but couldn't because they are locked into their job because they needed health benefits, now they can do that. Also small business employers who wanted to hire workers and felt like they were not able to offer health care, now they cannot worry about that as much. So the playing field is a bit more level for small business owners.

It was a crummy rollout, but it was -- it will get better over the years.

COSTELLO: David, you also picked Obamacare. Tell us why.

WESSEL: Well I picked Obamacare for the one million or maybe two million by the end of the year who actually managed to get through that maze of healthcare.gov and sign up. You're probably better off if you can get insurance through the health care exchanges, whether run by the state and federal government. Particularly if you were in the dysfunctional individual market or didn't have insurance at all. So if you got through, you're probably a winner.

COSTELLO: Ok so can I just ask you an aside about Obamacare? Is it going to tank our economy, John?

WAGGONER: Well, you sure couldn't prove that from health care stocks which is my second pick. Health care stocks have done tremendously well this year. They've beaten the S&P 500 by 10 percentage points. Health care companies have beaten earnings estimates by 55 percent, 55 percent of the companies have beaten their earnings estimates for this last quarter. And that's across all segments of the health care industry. It's not just pharmaceuticals, its hospitals, its medical devices, it's the whole enchilada. And this has been a three-year trend. This has been going on for three years.

So if it's going to wreck the economy, I don't think it's going to do it from the health care industry.

COSTELLO: Ok so David, tell us, what was your number two?

WESSEL: My number two was anybody who owns assets, particularly stocks or houses -- so half of Americans own stocks. The S&P 500 is up almost 30 percent, the NASDAQ up more than that. If you were one of those people who owned stock, you were a winner in 2013.

But owning a house was a pretty good deal, too. This Case Schiller index of home prices is up 13 percent over the past 12 months in the 20 major markets. That's a big change from the past when house prices were falling. So for those two-thirds of Americans who own their own house, 2013 was also a good year.

COSTELLO: Well and I have to say for those Americans who couldn't get rid of their house because of the housing market and still owned them, I'm glad to hear you say that. WESSEL: Absolutely.

COSTELLO: Ok so John let's talk about losers. You again picked the Affordable Care Act. Explain.

WAGGONER: Oh it was just such a dreadful rollout. It was an epic fail. It was one of those things that you just cringe about. You can only blame Obama, he was the guy at the top and you have to blame everybody on down.

Now you will say one thing which is that no one ever buys software on the first round. You don't buy a 1.0 software because it usually is terrible and will set your motherboard on fire.

But sooner or later you know the American way is to rollout kind of awful software and then improve it as it goes on. And I think that's what will happen.

COSTELLO: We'll see. It seems to be improving anyway. So David, you have a similar take. Let's hear yours.

WESSEL: Right. I'm worried about those people who don't have insurance and got frustrated by healthcare.gov. I was talking to one of the makeup artists here at CNN in Washington and she told me she got so frustrated she gave up. She lives in the State of Virginia.

There are 48 million Americans who don't have health insurance. The plan was that they were going to get it through healthcare.gov but because the software and the launch was so messed up a lot of them are frustrated. Some of them are still unable to get through.

COSTELLO: Ok so John, what's your next pick for business loser in 2013?

WAGGONER: Well it's kind of the flip side of people not being able to -- or people feeling that they're still in a recession.

And that is companies are at the healthiest they've been ever really. Vast amounts of cash that they have. At some point they're going to have to open up their wallets, they're going to have to buy new factories and equipment. They'll have to buy other companies. They'll have to pay their employees more. And they're not. And they're running out of excuses for it.

Before they were saying oh, it's because of Obamacare. Well Obamacare is the law, it's here. You know that's all settled. There's not another big election for two years. We do have the debt ceiling coming up, but after that if we get through that, you know, it's a pretty clear ceiling. And they've run out of excuses not to spend money.

COSTELLO: David, your final pick for a loser.

WESSEL: The 2.8 million Americans who were out of work for the entire year of 2013 and say they're still looking for jobs. About 1.6 million men and 1.2 million women and some of them are about to lose the unemployment benefits that Congress hasn't renewed. It's a reminder that the economy is better but it is still far from good particularly for those people.

COSTELLO: John Wagner, David Wessel many thanks -- a really fascinating conversation and a helpful on too. Thank you so much for being here this morning.

WAGGONER: Thanks.

COSTELLO: Checking our "Top Stories" at 53 minutes past the hour. Two men climbing a high security fence and getting on the runway at two separate airports happened on Christmas day. The first in Phoenix: A man ran up to a plane and hit it with his hands. The pilot had to shut down the engines. Police say the suspect, 49-year-old Robert Bunk, appeared to be intoxicated. Then at Newark's Airport a 24-year-old man wearing women's clothing was spotted running across two run ways. Both men were charged with trespassing and released.

In Argentina a Christmas day swim turned out badly near the city of Rosario. A swarm of flesh-eating piranha injured about 70 swimmers, including some kids who may have lost fingers in the attack. Locals say an isolated bite isn't all that uncommon, but they have so many people attacked at once it's virtually unheard of.

In Canada a man slipped on some ice and plummeted off a cliff. The man was walking with a friend when he fell nearly 75 feet into a rocky area. Firefighters had to rappel down to rescue him. They put him on a stretcher and pulled him to a safe area. That man now is being treated at a hospital for head injuries.

Still to come in the NEWSROOM, Aaron Rodgers cleared to play just in time for their biggest rival. Hi -- Joe.

JOE CARTER, BLEACHER REPORT: Hi, good morning -- Carol.

Yes great news for Packers and Packers fans because obviously Aaron Rodgers is much needed if they want any chance of beating the Bears this weekend. We'll talk about what's at stake for Chicago and for Green Bay coming up next in the "Bleacher Report".

(COMMERCIAL BREAK)

COSTELLO: Just in time for their biggest game of the season, the Green Bay Packers will get Aaron Rodgers back. We saw the QB replaced Sunday for the first time since he broke his collar bone. Joe Carter has more on "Bleacher Report".

CARTER: There's a lot at stake obviously this Sunday if -- between the Packers and the Bears. Whoever wins that game wins the division and then obviously goes onto the playoffs. The loser has to wait until all of next season because you know they're the loser.

But Aaron Rodgers back with the Packers I think changes the dynamics of this team and makes them a legitimate playoff contender again if they get in the playoff because when he was the quarterback of the team before he got hurt they were 5-2. They went up to the NFL they were cruising but then obviously he got hurt, things changed drastically. The Packers went on a five-game winless skid and they had to shuffle through three starting quarterbacks. So having him back makes all the difference for the Green Bay Packers. So watch out.

COSTELLO: Is Jay Cutler in?

CARTER: Yes he's in. Man the game just got much better.

COSTELLO: Yes.

CARTER: Hey trending this morning on BleacherReport.com, last week at this time John Kittner was teaching math and coaching football at a Tacoma, Washington, high school. Now he's the emergency third string quarterback for the Dallas Cowboys. The best part of the story the 41-year-old says that he's going to donate his entire $53,000 check to his high school. How great is that?

COSTELLO: That's awesome.

CARTER: Good news for your Detroit Lions they've just signed a new player, he's the fastest man in rugby. Yes the Lions signed Carlin Isles to the practice squad as a wide receiver. You never know he might materialize into something.

COSTELLO: He's 5'6", he weighs 120.

CARTER: But he ran -- he ran the 40 in 4.22 seconds. That's like Usain Bolt fast.

COSTELLO: Yes he better run fast because if anybody tackles him, he's dead.

CARTER: If you can catch him, you might have a spot. You never know. But obviously the Lions did mind that he hasn't played football in a while. He hasn't played since (inaudible) three days which is about four years ago. They're just looking at the speed.

Hey you remember this story, the Jose Canseco goat story. Do you remember they were the diaper wearing fainting goats?

Well apparently his neighbors in Las Vegas -- Jose Canseco's -- are not happy that the two goats that are living with him are making a lot of noise. The HOA -- you know, the homeowner's association -- they've basically filed a complaint saying that these goats are, well, goating too loud or however, whatever goat sounds.

COSTELLO: They scream like humans. That's what goats sound like.

CARTER: They're loud. To the point where they say you have 14 days to get these goats off your property. People may remember this goat story connected to Jose Canseco when last month his girlfriend and him were pulled over by police for driving in his car -- having goats drive with him in his car. And they're all wearing diapers.

(CROSSTALK) CARTER: Apparently so -- such a strange situation. He bought these goats because he was trying to put together like this adventure reality show that really never got off the ground. The project never got off the ground.

COSTELLO: So sad.

CARTER: So now he's got two goats. He has this --

COSTELLO: That would have been a great show.

CARTER: -- kinship with the goats now. He doesn't want to let it go. It would have been ok.

COSTELLO: He fell in love with -- that touching. Thank you, Joe.

CARTER: You bet. That's strange, isn't it?

COSTELLO: The next hour of CNN NEWSROOM starts now.

Good morning. I'm Carol Costello. Thank you so much for joining me.

If you haven't had your flu shot yet, you may feel a hint of dread in this headline. Flu season is kicking into high gear. Several states are reporting widespread outbreaks and doctors are seeing the swine flu that sickened and scared so many of us a few years. And the first U.S. deaths from the dangerous H1N1 strain are trickling in.

CNN's Victor Blackwell is here to walk us through this. Hi.

VICTOR BLACKWELL, CNN CORRESPONDENT: Hi. You know, we're still weeks out from the peak. It comes in January or February so it's really alarming that these deaths have come so soon. But you know the CDC estimates that as many as one in five of us could come down with the flu and it's because that the usual suspects to the flu, the very young and the very old are not the ones who are getting the H1N1. It's the young adults and that's why this is so troubling.

(BEGIN VIDEO CLIP)

BLACKWELL: The flu season is officially upon us.