tv Real Money With Ali Velshi Al Jazeera May 27, 2014 7:00pm-8:01pm EDT
last year's competitor has to use fake fromage. "real money" is ali velshi is next. for more information throughout the day and evening go to our website at www.aljazeera.com. >> confidence is key, and the american consumers haven't felt that way about the economy in six years, i'm looking at why and what could be for the economy. and how to turn seattle's big dig in a main thing money pit. and a low cost solution for education. a computer lab small enough to fit in a backpack. i'm ali velshi.
>> this is "real money", and you are the most important part of the show. so tweet me. ali velshi, the weather is warming up and so is the mood of american consumers, and the question is how much better they're feeling. today, the conference board, a private research group, said its confidence index increased 1 to 3 points in may, and they don't bother the real number because it's hard to explain. but this is significant. it's the second highest reading since january of 2008, which was roughly the beginning of the great recession. 83 looks good when you think of the index average, 53.7 during the entire recession. and this rebound of confidence is a good sign for the u.s. economy. because 2/3 of all activity is driven by consumer spending in
the united states. economists expected it. and i'm going to taub to economists, who say given the job momentum wasn't larger than this. we got data today and other data pointing to the reason that some consumers are feeling more upbeat. home prices continue to rise, even if the rate at which they're gaining is cooling off. an index of 20 metropolitan areas, gained 12.4% in march, compared to the same month in 2013. that beat the forecast. but it's down from 12-point the percent from february. and by the way, 12.4% is the smallest annual gain since july. and this makes the consumers more willing to spend on other items. it makes you feel richer, right? and that brings me to another piece of concern about the pace
of the recovery. today we learned that new orders for durable goods rose 8/10 of a percent in april compared to march. this is refrigerators, aircraft equipment. things expected to last three years or more. the gain was expected, but here's the thing, orders for defense related goods spiked 3.9%. if you take out the defense goods, which generally speaking you and i don't buy, this number drops to a loss of reduced by 8/10 of a percent. that raises the outlook for consumers. so people buying defense related stuff are doing well, but not everybody else. let's get the questions from the man i mentioned a minute ago. mark vitner, senior economist for wells fargy and it raises doubt about the u.s. growth
going forward. mark joins us now, and mark, you take that 83 number and you don't think that's gangbusters? >> well, it's okay. and it certainly is in line with what we have seen. but when you look at the jobs number, the unemployment numbers so far this year have been strong. the april numbers showed an increase o of 88,000 jobs, and e have averaged 215,000 jobs a month for the first four months of the year. that would suggest that economic growth was accelerating, yet the gdp numbers are close to 0. and consumer confidence, it hasn't broken out of the range that it has been in the last couple of years. 83 is closer to the level that's you would see in the depths of a recession, rather than what you would expect five years into recovery. so it's better, but it's telling me that something is missing, and i put a note in our report. i said make the bond market is
more right than people believe. a lot of people think that it's crazy because the yields have dropped past 250, and maybe they were right to look on past the employment number. >> here are the obvious thins, the shear numbers of job creation that we have been hoping for, but does that mean that we're looking at the wrong metric? we're recovering from the recession in not as robust of a fashion as we went into it? >> that's certainly the case in the last couple of years. you have a lot of people working part-time that would like to work full-time. and a lot of people in low wage jobs that aren't where they wanted to be. and we haven't seen as much growth in really the mid income skill professions. and the thing that's most perplexing to me, over the last four months, january, march and april, the employment data have
been better, and not only has want overall jobs increased bid a large amount. but the quality of jobs have looked good. in april, 67% of the industries that we attract increased in employment at the end of the month. >> what do you think? the bond market, what do you think is missing? what do you need to see more of to convince you that the economic recovery is healthy? >> well, this may sound a little wacky more than anything else, but the great recession was so deep, and the economy fell so hard that it really disported a lot of the seasonal adjustment factors that are done to all of the dat a and one of the net results of that is that in the last five years, the economy has looked like it's doing better up to the spring, and then suddenly, unexpectedly, the employment numbers that looked
really strong in the first couple of months of the year took a dive. and what i'm thinking, what i'm concerned about, after looking at the consumer confidence numbers, it may happen again. and we don't have it in our forecast. we're thinking that the growth is going to pick up a little bit in the second half of the year, but i'm a little concerned. if the economy was truly doing better, i think you would have seen more improvement in the confidence data. >> we're comparing the 83 we have now to the numbers that we have had in the recession, around 53. the index was running about 53, and you say this is still feeling recessionary to you? the consumer confidence number? >> with the exception of barack obama, no president has been reelecting with the consumer confidence number what it is today. so it has been enough to throw about any president out of office. and it's pretty disturbing. more than twice as many
consumers say that jobs are hard to get today. and more say that the conditions are bad than say its good. so those are the types of reads that you see as we just get out of the recession, and not more than five years into the recovery. so when you look through all of the data, you see that most of the improvement in the consumer confidence isn't from more people thinking that things are getting better. it's but it's from people saying that things continue to get worse. it could be a lot better if things were getting a lot better. >> mark, good to talk to you. >> i know that that sundayed eth theory. >> that's why we have you on here. and we need the analysis that you provide. so thank you forking with us once again. good ceos make too much money, they topped $10 million. medium means that half of them
made more and half made less. a ceo from a large company made 10 and a half million dollars last year, that's a 9% increase. and ceo pay is now 7 times the average worker. anthony petarello. his paycheck was $63 million. and most of it was a $60 million lump sum to buy out his old contract. and you might be surprised to learn that female ceos made more than their male counterparts. $11.7 million. but there were only 12 female ceos in the survey compared to 325 men. in trouble, why engineers have been forced to dig out the machine that's supposed to be doing all of the digging, and later, we check out the computer lab that's small enough to be
but it has run into a snag. bertha, the biggest tunnel boring machine in the world stopped digging t. it hit a steel object in the dirt, and it has damaged it's 2,000-ton cutter. crews are starting to dig a pit into the ground to gain access to the machine, and eventually, they will use cranes to take it out and make repairs, and then lower it again and put it back on the machine. it's so complicated that big birtha won't get back to bigging until march of next year, and it will delay it 15 months. there's no idea what it will mean to the $3.1 billion price tag or the city of seattle but the planners chose the most expensive route. >> this is bertha, the biggest tunnel boring machine in the
world, for the seattle viaduct replacement project. >> it's the single biggest that i've been involved with. >> it will move traffic below the congested street. >> the tunnel is 9,073 feet long. and when we excavate. 850,000 tons of material, or close to 2 million tons of material. >> the goal, to make an elevated roy above a tunnel route that sustained damage in an earthquake. >> you have a structure that's very much at risk. it manages over 100,000 vehicles a day and it has huge economic to the region if it was to fail any further. >> seattle had to make decision busy the viaduct.
the choice, to make repairs to the roy or replace it. they chose to take the expensive route and dig a tunnel underground and get rid of the viaduct entirely. >> despite the delays to the project, bertha can't start digging again until march of next year. and they are confident that it can open to traffic by november of 2016, which was the original date set by planners. as for cost overruns, no word on who pays for that yet. he joins us now on the ground, leslie, good to see you, and this is red meat for people who say that there should not be public-private partnerships, and these infrastructure projects. guess what, they're always late and always over budgets, so there must be a lot of people licking their chops and saying i told you so.
>> there are a lot of people predicting doom and gloom. >> what's the sense of it? like all projects, it will get done, and do people still believe in this project and think that it's the right thing to do? >> i think that the city is divided but i think that the general feeling is that it was the right decision. if you have the option to start from scratch, you wouldn't build a major highway system right on your waterfront. >> there's a debate on who ends up paying for this, and where does it stand? >> where it stands right now, you have the tunnel partners that -- they are the design build contractors. so ultimately, they're responsible for everything that is being done. but there are other parties involved, including the state. the partners argue that it was the state, left a pipe casing in
that -- that caused the bertha to stop. we don't yet know that. we won't really know what happened, and why the tunnel boring machine stopped in october when they pull out the cutters and examine it. so you have the telepartners, and you have the state. and potentially, the project is insured, and you have hitachi, the manufacturer of the borers. >> it's fantastic that you can have a 15 month delay and expect it to be open by the deadline that they originally planned. i have to assume when the city undertakes something like this, the people of that city know that there are cost overruns and delays. >> they do know. and i don't think anybody anticipated this much of a delay, and of course there could be further delays, and i think one of the things that people worry about is a great deal of uncertainty that we still face. we don't know what caused it, and we don't know if this could
happen again. >> nobody in any major city enjoys the process of the infrastructuring built. and it's all horrible when it's going on. in the end though, in your view, seattle had to do something, and the option of not doing something or replacing the viaduct with something similar probably wasn't viable. so seattle had to do something bigger to keep one the growth. >> absolutely, we were the fastest growing city in the country last year, and traffic of course slowed down during the recession, and it's picking up again. things are pretty bad here. and eventually, we'll make the transition to being a public transit oriented city. and that takes time. and you do need to have the roads. right now, there are two major arteries going through seattleing it. and if one of those is inapp inoperable, it's a huge problem.
>> what's your sense, is this a big, big advantage to seattle once it's done. >> that's hard to measure. i think potentially seattle would be one of the two or three most beautiful cities in the world. once you have that viaduct down and the city open and major park along the waterfront, we get a fair amount of revenues from tourism, and it grows every year. we have huge increases from tourism from china and canada and obviously having more space for tourists to spread out to, and events along the waterfront could be a huge plus for the city. >> leslie, thank you for being with us. leslie helms, the owner of business mags, and he's the candy tycoon in the middle of a crisis. what he needs to do to stabilize
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it's going to be made more difficult by whatever support these separatist factions are getting from the russian government. and who are these people? are these russian incursion into ukraine or russians who who want to be part of russia. >> it's probably a mix. i think early other, there was direct provocation by russian agents, and i think now there's a certain momentum that's taking effect. where people in the east who don't see their future associated with the kiev government are distrustful because of past corruption and scandal, do align them was russia, and that takes on a life of its own. >> does it represent a new future for ukraine? it has been trouble for
sometime. a country rich in resources and important, and can he lead ukraine into prosperity. >> well, he's probably the best chance that we have, but leading them into prosperity is a great ambition. before we had the protests, and before we had this crisis with russia, we had a deep-seeded action, and he made it worse. but he has, because of his pragmatism, he has worked on all sides of the political debate, even if he's able to do it, he faces an economy that's profoundly distressed. >> let's get back to the brass tacks here. a lot of the energy comes from russia, including the ukraine's energy, the natural gas, and they have a big bill to pay. they have to work it out, and
putin and bankers saying, how do we fix this? >> it has to be, ukrainians and russians, sixth around and trying tore sort it out. the gap between what ukraine wants to pay is huge, it's going to take a lot of hard work to get to something that is viable and the ukraine can afford. when the imf came in, they made an assumption about the price, which is halfway between the two, and that is something that a lot of parties, including the european union, are trying to aim towards. what we can find the political will to get to that price, i don't know. >> and again, this whole thing in ukraine started because of a sense of whether ukraine should be facing east or west in terms of its future trade relationships. ukraine has to get back into that discussion, do they do what started the protests in the first place, deciding as a country if they want to face
west europe more than russia? >> i believe so. the new president has said that he wants to sign an association agreement with the west. and certainly the country wants stronger trade and investment ties with the west. and i think that he will try to find a way to make that happen without provoking russia further. but over the next 5, 10 years, the model is more of a poland or hungry, with greater economic success. >> they have done quite well with that. but one thing that he's going to have to explain to ukrainians, something that other countries have had to do, they need an austerity program. and things will get tighter. >> i believe that they shouldn't demand too much austerity up front, but there's a lot they have to do in terms of fixing the energy sector and the fiscal policy, and dealing with the immense corruption that runs
through the economy. he has to explain that to his people and make the case for what is going to be tough austerity measures and why that will bring prosperity in the long-term. >> if they get that right and if they get a deal with russia and focus on the western trade relations and reduce their budget through austerity, what does the future look like in the economy? >> it's a bifurcated economy, and western ukraine has begun to go to western europe and small manufacturing and it's goods can be competitive in yo europe andt has made that transition. if eastern ukraine is the problem, it's out of date and tied to the russian supply chain. and there's got to be a major
restructuring of the industry for the people who live there. >> thank you, robert, the senior fellow for international economics. >> i bet a lot of americans can relate to this. the feeling you get when you pay your property taxes. >> it has to be paid and you write it out in disgust. you curse under your breath and it has to be done. >> more of what he's talking about, and when you get relief if ever. and small packages and how they can help america close the gap with the rest of the world in science and math.
>> as you told you earlier in the show, the latest data shows u.s. home prices are still rising but at a slower pace. higher home values make people feel wealthier, but they can also translate into higher property taxes ask when you're struggling to make ends meet, it'sa another burden adding to the squeeze. we have been tracking the ups and downs of three families struggling to get ahead. tonight, heading to long island,
new york, to check in with the sabino family to see how their property taxes are influencing their lives. >> it has to be paid. and you write it out in disgust. you curse under your breath as you do it, but it has to be done. >> that bill that father of two, phil sabino is cursing, the property tax to his modest family home in long island. >> we moved here in 1998 and the taxes were $5,500 they're 12,000 now at the present time. >> that's roughly 13% of the sabino's annual income. the average american household pays just over 3%. nationwide, property taxes have fallen 8 and a half percent from their peak, and that's well above the drop in home prices since 2006. many will see higher tax bills.
>> in some communities, property taxes will continue to fall for the next year or so, and in other communities, we will probably hit bottom. >> where you live plays a big role in how much you pay. 18% of homeowners in the northeast shell out 72 behind in yearly property taxes, compared to roughly 4% in the south. new york and new jersey have the highest property taxes in the nation, in large part because schools in this corner of the country are mostly funded through local taxes. >> the northeast is different from the rest of the country in that the state governments play a smaller role in education, so local revenue sources are more important. >> while the sabinos question how much their school administrators pay, they worry that budget cuts could deprive your kids. >> they threaten you, if you
don't pay the budget, they are going to take away the music and art problem, and my kids enjoy that. >> the sabinos have lowered their assessment by challenging it. >> or petition your local governments for lower taxes. >> in the meantime, in july. aljazeera, new york. >> property taxes, the property tax hikes. circuit breakers, homeowners. but in new york, in a helps those making $18,000.
according to realty track, a record deals were more than double the share a year ago. i spoke to mark zamby and asked what is behind the search. >> it's also global investors, and coming into the hot market, and i do think that a lot of the households are very nervous about mortgages, and the difficulty of getting mortgages, because the assumption is if you have a difficulty getting the mortgage, the option is not to buy the house for cash. >> though the share is high,
because first time home buyers who need the first time mortgage, they're having a hard time getting a loan, and the credit standards for the first time home buyers, are very high. so the cash sales affects not only the uninvestors, and getting the mortgages. >> is there an implication to a lot of home sales being made -- we constantly hear it keeps people traditionally buying mortgages out of the market because you can sell a property for cash without the mortgage contingencies. but on the other hand, when they bought it when it was weak put a floor on the market. >> i think that the cash buyers, and the investors in particular, were the key to starting the housing recovery, but they didn't have the cash to step in.
and the recovery would have happened a lot later. and we wouldn't have seen the bounce in the housing activity that we saw in the last couple of years. but here we are in the recovery. a more traditional housing market. the housing market, it has gone size ways in the last six, nine months ago. >> draw a line for me in the inability, the reality that there mane be as much household formation in the economy. like you said, the first time buyers may not be having as easy a time getting a mortgage and millennials as employed as they would like to be. and what affect does that have on the economy if they don't go out and buy houses?
>> we had things that obviously are having a hard time. and they can't get work, and they have stayed with their parents and gone back to school. and there are roughly 1 and a half million more adult children living with parents today than in 2007 before the recession, and that's a lot of households that haven't formed the key to the housing market and all kinds of activity. but now, a more positive take to though are pent up houses. the 20 somethings are not going to be living with their parents forever. and they will form a household at some point, and that will generate more housing demand and economic activity. it's coming. >> what is your sense of the state of lending standards in america for homes right now? is it too tight or is this the amount of restriction we need so as not to get into another housing crash. >> it's too tight. so obviously, before the
recession and the housing bubble, lending was egregious, way too easy to get a loan and we got ourselves into trouble. and the pendulum has swung too far in the other direction, and the lending environment and too tight. so we need to seeing in more balanced and typical than in the housing market of the past. so they have to get first time home buyers back into the market. >> mark, thank you for joining us, the chief economist at moody's. america is behind when it comes to science, technology, engineering and math. and these are fields essential to america's economic growth. and good paying jobs, engineers and computer programmers, yet the u.s. ranks only 25th in
>> he's president of elite, his mission to create curriculum for public schools, based on stem education, science, technology, engineering and math. >> stem education is extremely powerful. >> what's the first step? >> i'm trained as an engineer, and i question and analyze and think critically and come up with solutions. >> but stem education is expensive. the u.s. government has budgeted $3.1 billion for stem education. >> in the grand scheme, it's less than 1% of the overall budget spent on education. >> an adviser for stem in the department of education. she said that schools across the u.s. need entrepreneurs like chelsea robock because there are not enough. >> the private sector needs to come in and help us think at the u.s. government level how we can
better leverage pretty scarce resources. >> today is an exciting day, because we're git be using the computer that i'm talking about. >> ro roebuck and his elite developed an expensive laptop. >> this is what we came one. to design these backpacks, we use the raspberry pie, which is a 35-dollar single board computer. and we used this in combination with our motorola laptop to put together our $100 laptop for an entire computer lab to teach students computer science and programming. >> you insert the sd card into the bottom of the raspberry pie. >> he's coming up with innovative ways to bring powerful coding to a young age group. >> i was especially interested in the frederick douglass
academy, because they have a population that's often underrepresented in stem fields. the school is prominently african-american. >> a new study found that only 5% of black students scored above 50% in math this year. that's a small slice compared to 70% of white schools in the same percentile. >> how do you release the sugar in. >> it's not just about 6th grade coders. roebuck is teaching robotics and mega trannics to high school student. he's using frederick douglass academy as a pilot site for what he hopes will be a national program. >> we're trying to source our model as an open source platform, that school leaders and passionate teachers can adopt into their own classrooms and curriculum. >> the ability to create is one
of the most powerful things that can happen to an individual s. and what's that we do. >> roebuck's vision has a lot of supporters. chelsea's non-profit elite, one of the rise google awards. >> . >> it's not just bankruptcy that detroit is dealing with. it has its hands full of blighted neighborhoods. and now there's a plan. and we'll kell you that what it is. a man who finds beauty in scars.
>> over the last 25 years, the city of detroit has seen a dramatic exodus of rents. the census bureau says that the population has fallen from 1 million in 1990 to 700,000 today. the blight removal task force said that it found more than 85,000 abandoned properties, and clearing them would cost about $2 billion. and that's a lot of money for a bankrupt city. our detroit reporter, bc is here with the latest and bc, what exactly is the task force recommending? >> well, i can tell you, ali,
that this task force spent eight months analyzing every single piece of property here in the city of detroit. and they found there are over 80,000 blighted structures here, and that's not far from initial estimates. the city worked on the reports with local business leaders, and they think that over several years, it will cost the city about $2 billion over the course of all of these years. now, the emergency manager, kevin orr, said that it's very important for the city to invest in the turn around plan, and it's really essential to the city's future. take a listen. >> for the first time in this city's history, you have a comprehensive proposal to analyze all of the properties in 144 square miles of city,
including lakes and rivers, with the resources in technology to address the issue. >> the emergency manager, kevin orr that you just heard from, he has proposed setting aside nearly half a billion-dollar toward this effort. and this is funding from the federal government and private donations, but before moving forward, he first needs the green light from the bankruptcy judge. >> bc, what are you talking about? you're standing in front of a building with a lot of graffiti on it, and is this blight? >> yes, this is an example of what you're seeing, and over the past five years, it has gotten worse, mostly because of the bankruptcy. people wonder what is going to be made of all of this land used? well, i can tell you with today's press conference, with
the city leaders and the business leaders, right now is not the time to stress and focus on what the land will be used for. they said it's a huge problem on their hands, and the focus must firsting on that and eliminating all of the decay, and we can move forward. >> bc joining us from detroit. and while some see detroit littered with blight, one man sees bits of beauty in it all. he works for chrysler driving cars on a test course, and he spends the rest of his time taking stark photos of that city's decay and distressed. what it's like to live in the midst of abandoned buildings in detroit. >> i'm tony micah. and people might know me as tony detroit. as of right now, i have 350,000 followers on instagram.
pictures that i post of detroit are basically pictures that i see every day just being a detroiter. old architectish, homes, people, abandon buildings, burned out buildings. when i walk out the front door, it's really different than any other city. big city in america, i believe. in the sense that even on a saturday night, it's pretty desolate. looking through my instagram account, you can pull up pictures of many different areas of the city. here's one from southwest detroit. a lot of the houses look as if it was abruptly abandoned, close in the drawers, food in the refrigerator. one of my favorite interior abandoned houses, and there are the abandoned brewster projects. they were opened in 1935, the first low income housing in the country.
the history is still here. smoky robinson played basketball here. he lived here. lily tomlin, aretha franklin, a lot of motown lived here. the few instances where i was really threatened, where was in the brewster center, was a lot of gangs, which is why they're tearing it down. the ecosystem that comes from a blighted community is firstly drugs. we are on the east side of detroit, on euclid street. and it's pretty much overrun with crypts, and it's one of the most blighted parts that i've known. they were either boarded up, burned down, or -- hold on, bumpy ride, or they're turned into drug houses. i don't think anybody lives on this block whatsoever, which is why the road is in disrepair. okay, kind of -- this is not
good. the people in the doorway, okay. this is one of the most dangerous areas of the city. the street of hollywood on the east side of detroit feels to me more so than any other street in the city, because of the abandoned houses on this block, you can tell that such heart and soul was put in the making of it. and it's just left to rot. we're at the house on euclid street. up on euclid and brush. it has been my favorite house to shoot because of the old architecture of the outside of it. anybody home? hello? the first rule, as you go into an abandoned building, always announce yourself. you don't want to startle any squatters. >> i see a baby's toy at the foot of the stairs. >> everything that i capture is basically as i find it. very seldom will i move an
object. detroit has changed me. and for people who say i only photograph the negative of detroit, i beg to differ. i think i show the world that hey, look at me, give me some help. come at me altogether you want. but detroit is my life, my love, and i will never ever talk bad about her. >> interesting sight, tony met his wife, natalie on instagram. and they take pictures together in detroit. someone is going around the country giving money. anonymous millionaire drops clues of hidden cash, and so far, he has given away about $4,000, and he's on his way to los angeles and new york. and not surprisingly, he has over 60,000 followers already. coming up, i'll tell you why the 800-pound gorilla of online book sales has major authors,
feeling like they're being squeezed with bananas. straight ahead, don't go away. >> coming up right after "real money," getting out of afghanistan, it's america's longest war, and now the president explains when all of the u.s. forces will be coming home and what the u.s. troops will and will not be doing until then. a chicago cab driver and author, out of syria, and now getting rave reviews for writing. one of the bloodiest days in ukraine.
>> a spat between online shopping giant, amazon, and old school book publisher, is starting to affect your access to books. you'll see evidence of this if you try looking for the latest books by jk rowling and michael dever on amazon. you won't have a typical experience in dealing with a company that prides itself with delivering anything within 24 hours. with notes from a chef, it usually ships in 2 to 4 weeks. critics say that amazon will try to redirect you to different titles, and it's also the store with the preorder this year. the preorder button has
disappeared from some of the titles. amazon is a very powerful force. something like a third of all book sales, but the profit margins are razor thin. despite the fact that it has practical killed off book competition. while bad for authors and for you, may be a boost for local bookstores, because if amazon won't carry the title you want, where else are you go? that's it for us, i'm ali velshi, thank you for joining us.
>> hi, everyone, this is aljazeera america, i'm john seigenthaler in new york. >> now we're finishing the job we started. >> pull out. the promise to bring all u.s. troops home from afghanistan by the end of 2016. the fierce fighting for control of an airport in ukraine. no proof from nigeria's military, though the officials claim to mow where the missing girls are. tears and anger, the debate over who and what to b