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tv   Real Money With Ali Velshi  Al Jazeera  May 1, 2014 5:00am-6:01am EDT

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see it yourselves. >> taking viewers beyond the debate. >> don't miss al jazeera america's critically acclaimed series borderland on al jazeera america also available on demand
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>> spending by consumers rose a healthy 53%. but the catch was the exports and business investments, things like snowstorm and frigid weather, those things fell off. but there is reason to be optimistic .
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jobs grew by 220,000. that's the biggest jump we've seen in five months. and a third of the jobs were added by small businesses, and small businesses are the rocket fuel of america's economy. of all the jobs added, the biggest chunk of new jobs by businesses and construction was the second largest jobs to come. even the federal reserve noted the economic pick up and economic activity after a sharp slow down in winter. the feds said following a two-day meeting that it expects growth in the coming months with more jobs coming online and more spending on housing. the fed feels confident enough to cut back another $10 billion. but there is still some economic problems. more jobs need to be added so
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the fed for the first time, for the time being is keeping key interest rates at or near zero. normally such rock bottom rates sparked higher prices, inflati inflation. the feds say the biggest moment at the moment is that prices are not rising fast enough. let's delve deeper into what we learned about the economy today. carl, the senior economist for deutsche bank, carl, should we believe that the u.s. economic growth stalled in the first three months because of bad weather? >> there is ample evidence looking at retail sales, motor vehicle sales. industrial production and transportation series are interrupted so drop off in experts may very well be due to the fact that ports were closed down, trains were not running freight service, that sort of thing, it really ran rampant through the economy in the first quarter. up equally important, though,
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the gdp data is old news because we have other data out today like the employment numbers that are highlighted, current quarter data, a regional data, we have another production survey, the nationwide, that's out tomorrow. that's likely to show the same thing. >> now i might be willing to believe this is all bad weather and we don't have anything to worry about if housing was heating up much faster than it is. housing seems flat, and housing is crucial to the economy. >> housing data has been soft over the past six months, however, the key pore house something to cast judgment during the peak season, the spring-buying season. that's just getting under way now, so we need to see the april, may, june, july sales statistics to be able to cast adjustment on whether or not house something wobbling or not. >> for everyone who has investments in the market, what
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are they predicting in the next couple of days about jobs on friday. >> sure, friday is going to be the big romp --report, but investors are taking the review that there is weather impact in the data. between now and july we'll have three more sets of revisions just to the q 1 statistics. they're being more forward looking as markets are prone to do, and focusing on the april and may indicators, things like the number of individuals filing for benefits. that's at a recession low. that's evidence that the economy is springing back, if you will, in the current quarter. our view whatever was taken out in q 1 will be given back in q 2. we'll see a lumpy profile and potentially growth with a four handle on it in the current quarter. >> what about growth for the people who tend to need it the most.
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low income, middle class americans. their wages have been stagnant. the growth we've seen has benefited the rich. when will it benefit the rest of the economy? >> when we look at inflation adjusted wages they're back where they were in 1996 and 1997. it's been slow for that part of the economy to recover. today the senate dropped plans to wage the minimum wage. the minimum wage adjusted for inflation lower than where was back when ronald reagan was president. that without a doubt has been the most sluggish part of the economy. the well- to-do have done well. this will come in time, but it's going to take a considerable period longer to reduce slack in that part of the economy, unskilled labor or people with maybe only limited job training. the unemployment rate is much higher and it takes a lot of job creation to pull those workers back in the labor market, and to
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cause a little tightness which will give the wage inflation , boost the stagnant wages. >> carl, thank you. >> my pleasure. >> america dodged another bullet hazard a train carrying crud oil once again derailed and burned. take a look at this spectacular team in downtown lynchburg, virginia. flames and dense black smoke filled the sky. i say we dodged a bullet, even though we're in the middle of a city with 75,000 people listen, there were no reports of casualties, but hundreds of people had to be evacuated. we do not know yet what caused the crash. it comes as the federal department of transportation creates new rules in the transportation of crud oil after a spring of derailments in the past few months .
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new rules cannot come soon enough. there have been a glut of oil in rail shipments. fueling the boom is fracking , and it is also more flammable like gasoline. 400,000 train car loads rumbled through towns big and small. among them albany, the capitol of new york state. this new crude reality has residents fearing the worse. >> reporter: oil trains roll through the heart of albany twice a day. some idling for hours as they wait to get into the city's port. >> in some cases the tankers are 25 feet from where people live. it's in close proximity to the playground. >> reporter: up to a mile long a
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single train can haul as much as 4 million gallons of the highly flammable crude. >> this specific brand of crude is very explosive . the cars that haul it, are broken to derailment and puncture. >> the national transportation safety board has specifically cited the thin hulls as a factor in spills during accidents. these cars were in use when the train derailed in july, killing 47 people and wiping out half the town. among the most concerned the residents , home to 180 families. >> the concern is how would we get out? how would we get out?
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you have handicap people, you have elderly people. >> reporter: albany's oil boon is a matter of geography. long the regional distribution center for heating oil it was shipments out of north dakota to refineries up and down the east coast. but the refineries caught many by surprise. >> the state is preempted by the federal government in terms of its regulation of the railways, and in a sense this has snuck up on all of us while we're busy keeping fracking out of new york. >> reporter: it was just two years ago when global partners, a leadershipper of oil by rail sent its first pay through albany. today it handles 1.8 billion gallons of the flammable oil each year. now new yorkers may have more reason to fear. local partners is looking to expand in albany and a new
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terminal north of new york city. global partners has not returned al jazeera's calls for comment, but the federal railroad administration insists when it comes to crude oil safety is it's top priority. according to spokesperson kevin thomson, federal regulators have ordered advisories, held public hearings and have been conducting unannounced spot inspections. they're drawing up rules to retrofit train cars to meet new safety standards. meanwhile derailments continue at record pace with 14 in the past year alone. >> the fact that more oil has spilled last year than in the previous four decades combined indicates how much danger there is. i'm not willing to allow this
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types of situations happen in albany. there is no way we would recover from it. >> al jazeera. >> right now 75% of all oil pumped in north dakota is shipped villa rail. while new pipelines are under construction it's doubtful theyy will replace train transport any time soon. it does not give the oil companies the same flexibility in funneling oil to refineries will be to pay the top dollar. how the sanctions on russia could end up hurting america's own space program, and the fight to give millions of americans a rise. that's "real money." >> our current system has gone very far awry...
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>> there's huge pressure on the police to arrest and find somebody guilty >> i think the system is going to fail a lot of other people. >> you convicted the wrong person >> i find that extraordinarily disappointing... >> to keep me from going to jail, i needed to cooperate. >> somebody can push you in a death chamber >> it's not a joke >> the system with joe beringer
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>> now inroducing, the new al jazeea america mobile news app. get our exclusive in depth, reporting when you want it. a global perspective wherever you are. the major headlines in context. mashable says... you'll never miss the latest news >> they will continue looking for suvivors... >> the potential for energy production is huge... >> no noise, no clutter, just real reporting. the new al jazeera america mobile app, available for your apple and android mobile device.
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download it now >> space may be the final frontier, but it also may be the conflict between united states and russia. look at the response to the latest u.s. sanctions in the crisis of ukraine. ouch. here's the thing. right now the only way for nasa to get to the international space station is on a russian spacecraft. some worry that russia will deny access on the spacecraft and worse, not bring back the american astronauts already on board. you have a lot of families and friends in this industry. do you believe it's a real
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possibility the russians would say we're not going to transport your astronauts any more. >> i think charlie bolden said it directly. the space relationship between the united states and russia has survived a lot of other political up heavals, statistically the answer is no, they wouldn't do that, but russia has surprised us a lot, especially here in the last couple of months. i think it is a very real possibility, but but statistically we're probably save. >> the russian cosmonauts, how much do they talk about global affairs, . >> very little. i think it's very conscious that not only do they troy to avoid political issues, but if you go past the astronauts into the flight engineers, ground crews
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and everything they've had a good working relationship going back to my dad's time as an astronaut. he would regularly travel to russia even during the cold war era and astronaut to cosmonaut there was always a close bond. >> is that travel from space officials? >> i think once you get to the political regimes at the very headquarters of you any of these big departments they have to. especially when it gets to transferring money back and forth. when there are debates of who is providing the service to to the space station and the cash for those trips. >> did you always feel that the russians were someone you could rely on.
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>> they're far safer than the united states. if you ask a safety engineer the shuttle was projected and did kill one out of 70 people who would board it on the russian's they had accidents 30-35 years ago like we did in the early period but they've had no fata fatality sense. even from an engineering standpoint it is very safe . >> what if your goal is to be able to transport astronauts to the space station and beyond. >> we knew there would be a five- year lull. and we're three years into that five years about now. we still have a couple of years left. this problem that we're having
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with russia is coming at an awkward time because they could lock us out effectively of not only using their vehicle to build a space station but they make one of the main engines, the most powerful engine currently available, and use it in a number of u.s. rockets. they could block us out of our own launches. >> so interesting. richard thank you for coming in. appreciate it. >> the space industry is in the missed of a major transition , and soon we may not have to depend on countries like russia to get into space. entrepreneurs have been racing to set up infrastructure in space so we can live there one day. it's a big vision and it has to start somewhere.
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one place is mountain view, california. in the labs of 30-something entrepreneurs . as ali velshi shows us, these entrepreneurs believe their 3d space printer is going to change everything. >> we started testing and building with moon dirt, moon simulates. >> he holds what he hopes are large mega structures and human habitat s in space. 3d moon-printed dirt. >> there will be large spacecraft. >> reporter: cameron is partners in made in space is a new breed in silicon valley. space entrepreneurs. >> we've kind of built this company as the typical silicon valley start up. we're young. we work long hours. we're not afraid to try new things.
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>> the big vision evolves around this 3d printer. >> in zero gravity, things float and then your print is thrown off. we had to come up with unique ways to control the printing process. >> reporter: 3d printers work like a hot glue gun depositing layers of warm plastic goo which hardens into extremely durable plastic. >> this is built up layer by layer. >> reporter: they're partnering with nasa, which is rigorously testing the printer. the first goal is to 3d print spare parts for the space station. >> up until now everything that went into space had to be launched. that was the only way to move things from the surface of the earth into space. rockets are very expensive. they can be risky.
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by putting a 3d print center space we're knocking down that first barrier of what it takes to put something in space. by being able to up load a file, hit print and have what you want in space on demand, space is now accessible to entire new class of people on this planet. for the first time ever humanity will have the ability to literally e-mail their hardware to space. >> reporter: the founders of made in space are following an impressive lineage of entrepreneur pioneers. and they are all investing heavily in space. >> is being a space entrepreneur viable? >> so listen, it's tough. there is no question. it will be some day the place where a lot of entrepreneurs like the made in space team can do stuff. today it's an expensive entry price. >> it takes a lot of capitol and a lot o--alot of capital and a k
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to ever see a profit. >> trillionaires from out there mining astroids, building in space, building the future of humanity. >> reporter: but he said made in space is already generating revenue in the seven figures, and he has larger goals for the future. >> our goal is to have a billion dollar company in ten years. we think its viable, it's possible. >> and the made in space team has big plans for their 3d printer from building satellites and launching them from space to completely changing how we use energy on earth. >> we'll build solar collectors. we'll transmit that energy wir wirily to the ground. >> i know, it sounds out there, but made in space is on to something. >> the point is the most expensive thing to do is to launch into space. there is a big market
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opportunity in what they do, i support what they're doing. it makes perfect sense to me. >> it's often been joked it's not a good decision financially to start a space company because space is so challenging, it is so risky, but the pave can be incredibly large if you do it right. >> ali velshi, al jazeera. >> the first printer made in space folks are sending to the international space station will be a science experiment to test their printer. they'll build out 20 parts in space and compare it to what they've built on the ground. they'll send a second one into space and that's when they'll print out parts and other things on demand. republicans blocked a minimum wage bill in the senate, and we'll look at the politics and the economic realities. plus, geeing out in san francisco. we're there where hundreds of developers are coming up with facebook's next cool feature. you're watching real money.
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>> senate republicans blocked the bill to raise the minimum wage from $7.25 to $10.10. democratic supporters as expected fell short of the 60 votes needed to bring the bill up for debate. while today's outcome is a policy defeat for one of president obama's action. democrats are trying to get midterm voters to focus on income inequality. today's vote the president ral rallied his base and accused the republicans of siding with the rich and noted that the wage hike has been popular at the state level. >> while they have not allowed the bill to come up for a vote. you have seen ten states and the district of columbia go ahead
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and raise theirs. [applause] yesterday the legislature voted to raise their minimum wage to $10.10. maryland did the same thing earlier this month. >> democrats latch on to congressional budget office he estimates that said higher minimum wages would put money in the pockets of workers. in the meantime, new data shows that over all wages and salaries barely rose in march by 0.3%. it's not the end of the wage debate energized by the book "capital in the 21st century." his book was shot up to number
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one on and remains sold out. it calls to attention of periods of extreme wealth concentrate. discussing the inequality , they spoke at the milk and global conference this week. he served as a senior economist as a fed during the george h.w. bush and he has been an economic adviser to the economic . he agrees that the rich are getting richer while the middle class is losing ground. >> well, i think a lot of narrative out there is polemic rather than fact based. i know you get a lot of leaders on the left on your show to ask the simple question do you think america has failed the bottom 20%? has america failed them because
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the rhetoric suggests yes, right? but my problem is that if you look at the facts that people on the left including thomas pikiety that they present to make their case it's a incomplete set of facts. it's a political tract of analysis than an economic analysis. what thomas pikiety, he analyses pre-tax, pre-transfer income. that incomes distribution has become unequal and the share has gone to the top a lot. but an interesting thing that i showed in a comment a couple of weeks ago if you look at the share of income that goes to the top, that's gone up a lot since 1970. the share of income that is transfer payments to the u.s. has gone up even more. and so while the income distribution is more unequal the u.s. has responded by increasing transfer payments a lot. if you look at consumption that's going up for everyone in
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the income distribution and consumption distribution has stayed about the same. my point is if i'm going to ask a question about society, is society failing us? is there something fundamentally wrong with our society, then you have to look at the whole thing. it seems to me that society has done a pretty good job. >> kevin, what is the expectation, and it may be anecdotal, but in america you'll do better than your parents did. it's a land of opportunity, and anecdotally, maybe those with two incomes and kids are feeling like they're falling behind. it is easier to fall out of the middle class than it is to get ahead. at the same time we're seeing what appears to be greater concentration of capital accumulation amongst the rich. despite--put aside consumption and income, what we're find something that people can't seem to build wealth in this environment. the people in broad middle and lower income segments. is that a concern? does that mean that society
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might be failing us? >> i'm 52 years old and i've been watching this stuff for a long time. you maybe not quite as long, but every single year since i can remember there have been times where i've been on some show, and everybody saying is that anxiety is higher than it's ever been. that people are worried that they can't get ahead any more, and that concern is a steady drum beat in american society. it's been there forever. the question is is it really getting worse? anxieties may be higher because people like president obama and thomas pikiety iscal tappism is going to destroy us all rhetor rhetoric , but mobility is a serious question. analyzing mobility in the u.s. and it has been about constant over the past few decades, but it has been higher in countries with similar gdp. for instance, canada. >> that's right.
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canada is a land of opportunity right now. you are canadian. >> i am canadian. >> but canadians have aggressive recruiting strategies for immigrants, and i think it's helping everyone. >> let me go to another matter, do you think the fact is do you believe the argument that we're hollowing out our middle class. more people are populating the lower income segments of society, and a very small, very rich segment are populating the 1%. >> it's definitely true that the top 1% is getting a much larger share of the income. there are things like facebook, google, and all those things that are generating billions and billions of dollars. i think there is a strong argument, one place that i agree with pikiety and others on the left is that executives may be giving themselves compensation by putting their friends on the board.
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the compensation for top executives is about the same scale as all dividends. i think compensation were top executives may be coming from shareholders, not workers. but it's definitely a problem. but the question are people in the middle worse off each year as some of the left wing rhetoric asserts? for me here's an easy way to think about it. if you take a middle class person. look around at what their house is, and then move them to a time machine to their house ten years ago, which is? let them choose, i'm sure they would pick the one that they have today. >> good to see you. >> facebook is not focused on your friends these days. the company is focused on your phone and tablet, too. that's coming up. plus why more foreign companies are calling north carolina home.
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>> mobile was the message loud and clear from the developer conference held in san francisco. the company typically uses the event to launch products or reveal a new strategy. mark zuckerberg said the
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: >> the mobile eco system is silent. apple has a vertical platform. and then there is the web and others, too. there are platforms and they're growing. but all of these companies are trying to compete and make their own platforms better and more different from the others. no one has an incentive to bridge the gaps between these platforms and make it easier to build on any of their competitor's platforms. for a person using a phone this is terrible. i just want to buy a phone and have all the apps that i want work on it. as developers, of course we want tools that work across all these different platforms. it's really annoying when we have to build the same thing three, four, five times because of these different facts. our goal with facebook is to build the cross platform platform.
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and provide all of the tools that you need to bridge meese different worlds. >> mobile advertising accounts for 59% of facebook revenue up 30% from a year ago. that's why it was a huge topic in the conference. jake ward, what did we learn today from the conference? >> reporter: well, the big news today david is the facebook audience network. it's a mobile ad network that facebook is debuting. if you build apps, you'll be able to put ads that draw on user information that comes from facebook, which is to say a lot of information. what they like, where they live, what they do, that will be instantly built in the
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apps that you build. if you log into an app and you don't want to give over credentials and facebook information, you can log in anonymously. but here's the fine print, turns out facebook gets all that information. s just that the third party app developer does not get it. the big theme was mobile but they talked about growing up. mark zuckerberg had sort of a ruminating kind of self regard speech at the end where he tal talked about having just turned to the ripe old age 30, and the company turning tenish that giving him the idea that we should move away from the app culture and move into the cull door of loving our users.
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>> it's also what is striking. how do they balance those two interests . >> talking about love in a way that will appeal to more people. >> jacob ward in san francisco. always a pleasure. thanks for coming on. >> let's talk more about facebook's next ten years and how mobile could shape the company's future. who better to discuss that than david fitzpatrick who literally wrote the book on it called "the facebook effect." david is the ceo
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and joins us by phone. what is your reaction to the information that we just got from jake and what he talked about today. >> he pointed to a few things that happened. i'm not sure that i would use the phrase do gooder company, but i am someone who has been deeply immersed in this culture since 2005. and the motive that zuckerberg has brought forward is admirable and really do have user centric qualities to them. this idea of being the cross platform platform which is an excellent quote, that's the key phrase. i compliment you on your choice of quotes from zuckerberg. because it's the largest platform period, the largest app
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on android, iphone, the biggest app except for russia and china and a few others in the world, they have the incentive to make the whole ecosystem to work peter. a lot of what they were talking about today were ways to do that whether it was advertising to make it easier to target people because they have all that targeting information so that app developers can make more money building creative apps or making it easier for apps to work if you have an droid phone and ipad, which a lot of people do, you're participating on both platforms and work seamlessly across both platforms. they're not saying that they're the people who are going to make that happen. >> good for facebook if they can make apps more accessible to a number of people to keep people on facebook, but a lot of folks say the larger long term problem is the user base. the user base is getting older and older and people are not really as interested.
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is that an accurate criticism, and how do they deal with that . >> al jazeera, i think of you guys as having a more global view than many american media companies. that's is a very american way of looking at facebook. american teenagers are diminishing their commitment to facebook even as they remain committed, and ironically when they leave facebook or spend less time on it, they're spending time on instagram which facebook happens to own. if you look at it globally, facebook is growing among young people, middle age people and old people all across the world. it's growth is quite steady. they don't have a problem on a global scale with young people. it's been longstanding here. i think it's a little less of the shiny knew thing here, but they don't really care about being cool, that's one of the key parts of their culture from the beginning. they want to be infrastructure.
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they want to be background radiation, in a sense, for getting things done in the internet and now the mobile internet which is where they're shifting all their focus towards. this is a mobile company now. and so they really don't care if they're seen as cool or not. they want to be a facility, they want to be infrastructure, and much of what they announced today would cause more people to stay with them just in order to get other things done that they want to get done. >> david is the author of the facebook affect. thank you for joining us. we appreciate it. >> thanks for having yes. >> you're welcome. >> charlotte north carolina has the charlotte bobcats and a few things more to brag about. >> we have more from germany, asia, and now a growing number from china. >> we'll looking at a closer look coming up. plus paying for college football recruits. it's not the schools that are
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handing out the cash, but there is a problem on campus. we'll explain when real money continues. >> on techknow... >> these are some of the amazing spider goats >> small creatures, big impact >> how strong is it? >> almost as strong as steel >> inspiring discoveries changing lives >> this could go in a human body... >> right >> this is for an achilles tendon >> techknow every saturday go where science meets humanity >> this is some of the best driving i've ever done, even though i can't see techknow >> we're here in the vortex >> only on al jazeera america ra
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>> creating jobs is a huge ra priority for city and states trying to boost their economies offering tax incentives is how they lure companies . north carolina and the city of charlotte, attracting hundreds of foreign firms by offering them a home with plenty of skilled workers, transportation options and low cost of living. the accommodation is attracting companies from across the globe. charlotte, north carolina, home to bank of america and wells fargo, the carolina panthers,
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charlotte bobcats as well as chiquita, and mitsubishi. north carolina ranks ninth in the nation with the number of jobs from foreign companies with 39% of those jobs in the manufacturing industry. >> of those more from a germany, china. >> reporter: they take great pains locating companies as well as new investors. economic developers take mission trips and work closely with international chambers. occasionally they receive cold calls from companies who have heard about opportunities in charlotte. >> we go where the leads are. companies have been interested in the u.s. market. we've longed had an economic developer on our team who speaks german. six years ago we saw an opportunity in asia.
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we hired an young woman who spends regular time in china and elsewhere in asia. >> reporter: one reason for the interest from abroad is that charlotte sets up the cross road with easy access to ports, two railroad lines and the international airport which houses the intermodal railyard. 200-acre cargo transfer facility that provides direct service to every major destination in the u.s. and most european capitols. >> we're manufacturing large equipment that takes thousands and thousands of parts. the whole logistics of getting parts in to put in our product and getting the product out is part of our base . >> reporter: chinese business which makes power tools and consumer base tools set up in
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charlotte ten years ago. it's company designs its products in the u.s. makes them in china and ships them back to u.s. to sell in lowes and home dehome depot. >> it's a international hub. people coming in from europe, china, it's easy to connect here. >> reporter: another reason why foreign businesses come to charlotte is because north carolina reformed it's tax laws last fall. it's longest serving mayor is now the state's governor. >> we made tax codes to make it conducive for initial and international --for national and international investment. before we were in the highest in the southeast, now we're one of the lowest. >> reporter: many like charlotte's low cost of living and it's skilled local talent pool. home to 75 colleges and universities with many of them within three hours drive within the queen city.
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>> we have rarely had to relocate an employee that we've hired here. we can hire from the local community. >> reporter: 92% decline in the unemployment rate between 2012 and 2013. it's the biggest decline among metro areas of 1 million or more in the nation. labor unions have not given up on their fight to expand in the state. north carolina's a afl/cio has 140,000 members and says north carolina is right to work for less state. >> we know that workers with the wages. they are likely to have health insurance. they're likely to have other benefits in a are not afforded to workers without an union. we ought not to be advertising as a cheap and contented labor force here in north carolina. >> reporter: last week's spanish company announced it would open
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an office in charlotte creating 42 jobs. this brings the total of foreign companies in the charlotte area to 939. coming up on rea "real money." the bad men delivering cold hard cash and it is totally against the rules.
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the stream is uniquely interactive television. in fact, we depend on you, your ideas, your concerns. >> all these folks are making a whole lot of money. >> you are one of the voices of this show. >> i think you've offended everyone with that kathy. >> hold on, there's some room to offend people, i'm here. >> we have a right to know what's in our food and monsanto do not have the right to hide it from us. >> so join the conversation and make it your own. >> watch the stream. >> and join the conversation online @ajamstream. >> so what does a star college athlete worth? that's a question that has been
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debated for a long time. when northwestern's football to unionize it pumped up the debate of what athletes should be entitled or not entitled to. what if i told you that high school stars are ensen ensent incentivized by fans from wealthy towns. calling the bad men of college football. what exactly is a bag man, a middle man? >> a bag man is anyone who would incentivize the kid to sign with the university and facility payments once the kid is on campus. someone who is doing this illegally for a specific family they're a fan of. >> it do be tens of thousands of dollars? >> what our story focused on was two types of payments. on the second side, the smaller payment, facilitating the
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lifestyle, if you will. this is where they have the high ground in the debate. the more scandalous stuf scandalous stufs before that. >> now you focused on the southeastern conference, the fcc is that where this is the most prevalent? >> it's a ubiquitous issue. some schools, some conferences may be more successful. they may be better than the system. but this is systemic. it goes big ten, southeastern conference. the party line i have, if you're a fan of any program that makes money, on television, sells out, basically generates revenue. your school is doing it. >> i know a lot of insiders at michigan , and they have long said that schools at alabama, auburn, is different, and they are some how able to land the
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star high school recruits that the big ten are not and it's not because of the better weather. >> well, the better weather is a factor, but they definitely have their own devices. i think if you ask the big ten in the 1960's they might have had a different answer. but because of the success that the fcc has had, they may have sour grapes. >> but the difference i know in the big ten, the coaches, the staff, the administration at michigan, they don't want it to happen. they don't just look the other way. they say we cannot have this whereas it seems like there are schools in the country without name be names where they look the other way and by the way, the recruit ee is now driving in an escalade. >> reporter: again, the idea that this is complet completely
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provincial problem is a little naive because of their success they're taking a lot of criticism here and we focused on the fcc because they are the most successful financially. >> how much do administrators, people on campus know about what is going on versus they completely have no idea? >> i think there is an accepted knowledge. any coach looking at a top job would not go to a school if he thought this was going on. anyone in what we call the power five now. >> again, these are payments that are going to high school students as they're trying to make a decision. it's going to their families. it's going to their uncles, it's going to their friends. >> it's going to, usually when they start younger with the recruits families, there is usually a point person. matriarch, a grandmother, uncle, brother, sometimes a coach. once the kid is on campus the money goes to him.
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>> fascinating piece. great work, we appreciate you coming in and sharing with us today. >> thank you. >> finally for a lot of american families, may 1st is the day when all high school students who have been accepted into college have to make a decision. these teenagers have known for a month where they've got in, but the time to choose has arrived. we'll have more on this in tomorrow's show. deciding where to go is a big deal, especially when it comes to your family's finances. when i chose to attend school out of state at ann arbor, michigan, the tuition i would have paid was 500,000 more than if i had gone to i.u. but that's nothing compared to the differences now, and the options are starkly different if you plan to go to a private university or ivy league. add living expenses and you're
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talking about an annual cost of $80,000 and put apply that by four years and that harvard degree could cost , is it worth it? we'll take a closer look tomorrow. that's our show for today. i'm david shuster in for ali velshi. for all of us at "real money." thanks for watching.
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