tv Nightly Business Report PBS April 4, 2011 6:30pm-7:00pm PDT
>> susie: call it a shutdown showdown. republican and democratic lawmakers head to the white house tomorrow as they try to strike a budget deal. >> tom: without one, the government faces a shutdown this week. you're watching "nightly business report" for monday, april 4. this is "nightly business report" with susie gharib and tom hudson. "nightly business report" is made possible by:
this program is made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt >> susie: good evening everyone. it's down to the wire on the nation's budget. president obama is meeting with top democrats and republicans tomorrow at the white house to hammer out an agreement. tom, the president is counting on a deal before friday. >> tom: susie, that's the deadline for lawmakers to reach a settlement to avoid a potential government shutdown. senate majority leader harry reid and house speaker john boehner are among those invited to the meeting. but in a sign that an agreement is far from imminent, boehner said today that a tentative plan to cut $33 billion from the budget is not enough. separately, republican representative paul ryan will release the g.o.p.'s 2012
proposed budget resolution tomorrow. >> susie: that proposal is expected to slash more than $4 trillion over 10 years, including cuts to medicare and medicaid. congressman ryan also says his budget plan will get the economy growing right now. and key to that is generating jobs, especially at small businesses. those firms employ half of all workers in the private sector. they've created 65% of new jobs in the past 15 years. as erika miller reports, that trend looks good again, especially if you talk with one new york company mopping up new business. >> reporter: deluxe bathmats might seem like a hard sell in a soft economy. but minds-in-sync, the company that makes them, has hired 20 new workers this year thanks to strong demand for its products. c.e.o. iain scorgie says for many frugal americans his merchandise is an affordable indulgence. >> they still need to have some
pleasures in life, and maybe they couldn't do things that were costing hundreds or thousands that they were doing before, but maybe for just a little, small amount of money-- 20, 30 bucks-- they have a bit of luxury in their day. >> reporter: when small businesses ramp up hiring, it's usually a positive sign for the overall economy. that's because small firms are typically the first to hire during an economic recovery. payroll data firm intuit tracks hiring at firms with fewer than 20 employees, and its business employment index has risen 18 straight months. hiring in march was the strongest since december 2008. and there were gains in all nine regions. intuit's kiran patel expects the momentum will continue. >> the u.s. economy in general continues to improve, despite all of the shocks we get from across the world. but generally, the u.s. economy is on the mend and we think that translates into small businesses continuing to see an uptick in their business which will lead to more hiring. if he's right, that's not just good for american businesses.
it's also good for workers. catie becker is one of minds-in- sync's newest hires. >> i'm happy. i feel a bit more settled in my situation. i'm not thinking, "do i need to move? do i need to get a different apartment? do i need to do this so i can afford things when things aren't good again? i feel secure." >> reporter: an optimism millions of out of work americans would like to share. erika miller, "nightly business report," new york. >> tom: here are the stories in tonight's n.b.r. newswheel: oil prices edged higher as tensions in the mideast kept investors worried about supplies. light, sweet crude for may delivery settled over $108 a barrel in new york trading. brent crude for may spiked to more than $121 a barrel, its highest level since august 2008. stocks closed slightly mixed. the dow rose 23 points, the nasdaq was down a fraction, the
s&p 500 was added a fraction. big board volume weighed in at 769 million shares, down from friday's pace. nasdaq volume dipped to 1.7 billion shares. president obama formally launched his re-election campaign today. the president can now begin raising money, and advisers hope to rake in a record-breaking $1 billion. b.p. won't resume deepwater drilling in the gulf of mexico any time soon, according to u.s. regulators. interior secretary ken salazar rejected reports that b.p. is in talks to restart drilling at existing wells in the gulf, but reuters quotes a source saying b.p. has submitted a drilling application-- but it has yet to be approved. and mcdonald's is going on a mchiring spree. listen to this! the fast food giant plans to hire as many as 50,000 new employees on april 19. the move would increase mcdonald's u.s. workforce by nearly 8% to 700,000 people. still ahead, the big finale of the big dance. tonight's "beyond the
scoreboard" looks at the big money in college basketball. >> we are one! we are one! we are one! >> susie: thousands of union workers across the country staged what they call a "national day of action" to protect their right to collectively bargain. the labor movement is highlighting workers' rights after recent budget fights in wisconsin and other states. today's demonstrations coincide with the 43rd anniversary of the assassination of doctor martin luther king junior. washington bureau chief darren gersh sat down with afl-cio president richard trumka and began by asking about the timing of the rallies. >> well w martin luther king was actually tranning up for workers without had been denied not only the right to bargain but their dignity. they wore banners that said, i am a man. he stood up and said they should have the dignity and
rights to come with the collective bargaining with the union. he gave his life for that he died there. so we thought it was fitting that on this day we should have a national day of action. >> but across the country you have many bills have been introduced around the country to strip out collective bargaining rights. so what's your strategy to push that back? >> first of all it's pretty simple in ohio. the governor signed the bill will now do a citizen's veto. we'll put it in front of the citizens. and we believe that a vast majority of eye eyean citizens say that is wrong. he you shouldn't take away people's rights to get into the middle class. that is not what we put you there for. we put threw to create jobs, to the destroy jobs. >> now a lot of people in the private sector have been through a tough couple of years where they have seen their wages cutback, their benefits cutback. and i think they're looking at the fight with collective bargaining with what is going on in the states and saying why shouldn't public sector workerses have to pay
more to help get us out of this mess. >> but they have. they make a contribution. they've agreed to do more with less and take lower benefits. let's take wisconsin, for instance. the governor said he needed help with health care and help with pensions. they agreed to his figures, both of them. it wasn't about that. public employees didn't cause the mess that we're in. firefighter didn't cause 11 million people to lose their jobs. it was wall street shenanigans. here's the god's honest fact. the top 10% of this country wage earners, have taken up 100% of the income gains in this country for the last 20 years. that means the bottom 90% have gotten nothing. >> but also it is state after state after state. they've just been, the states have found that they can't afford the level of benefits that we had before the crisis. so -- >> but why?
is it because the benefits are too high or is it because we have an economy that has killed 13 trillion dollars in assets and has 15 million people out of work. you put those -- >> the argument is both. >> you put those people back to work, and the problem goes away. that's what we keep saying. help us, let's work together to create jobs so that all of us can benefit. whether you are union or nonunion, whatever the color of your skin, you ought to have the chance to have a good decent paying job and be part of the middle class. >> tomorrow we're going to hear from paul ryan the chairman of the house budget committee aes's going to put out a budget plan that we are here hearing will cut as much as $4 trillion over the long-term deficit. we're hearing some, what it is going to do about medicare, maybe a bloc grant for medicaid. any reactions from what you are hearing on that program? >> look, i'm going to wait and look at the program. but that jeopardizes, that magnitude of those cuts,
especially if it is in a short period of time jeopardizes the progress we're making in the committee. i mean they're not losing their job. they don't care. we do care. those kind of cuts would be staggering and bad for this country. bad for the economy, and would put us back to where we see more unemployment rather than less unemployment. >> well, richard trumka, thank you for your time. >> thanks for having me on. >> susie: to hear what richard trumka thinks about president obama's newly launched campaign and the billion dollars it's expected to raise, go to our website, n.b.r. on pbs.org. >> tom: for the rest of the week, japan's crippled nuclear power plant will continue to dump radioactive water into the pacific ocean. doing so will free storage space for water that is even more highly radioactive than the water being dumped. as the search for victims from the earthquake and tsunami continues, a bank of japan economic survey finds more businesses have turned pessimistic about the economy for the next three months, especially smaller firms.
we spoke with lucy craft from tokyo after she attended a briefing with top private economists in japan. >> reporter: wer's in unchartered territory right now, japan is a country of earthquakes and all kinds of natural disasters. they're used to, you know, going through this kind of thing and putting the pieces back together. but unfortunately, this time we're in the new situation of a nuclear power plant that's generating radiation. its a still hasn't been stabilized. and so the loss of power, this was a key component of japan's energy grid, thes loss of the power, the concerns about radiation, the rumors, many of them unfounded about the safety of japanese products, this is something that's going to be much more difficult for japan to recover from. >> tom: from the briefing you sat in on today is this economic pessimism pervasive. >> reporter: there is a fair amount of optimism about later in the year the economy bouncing back, primarily because of
improved exports and also because of the benefits of this massive reconstruction budget that's being put together. >> tom: lucy, the color has dropped considerably against the yen, the yen getting stronger against the dollar. no now that makes those japanese experts more expensive. >> we were told today by the former finance minister who's aid, his nick name is mr. yen, knows about 4 x, he is predicting that because we're going to see, because of this atomic energy problem we will see more money leave scrap an because of perceived country risk and so the yen which is now in the 84 yen range, he thinks it is probably going to depreciate to the 90s range. and stay there for a while. >> tom: what are you experiencing in tokyo, how is life in that global financial center changed there, three weeks after these disasters. and of course the impact on power from the nuclear crisis? >> you know, already stores, businesses, trains, you know, not as many trains run as normal.
you walk into any building now and only half the lights are on. theyon lights are not turned on any more. traffic lights don't work in a lot of places. you know, so that's just the initial stage. but as we go into the summer there is a huge spike in energy use over the summer. it's about 60 billion watts. we're going to have to get by with 20% less. so that's going to be the big question. are companies goinging to go to staggered work schedules. are we going to get through the sum we are no air kong. these are the kinds of questions it that we are asking ourselves now. >> meantime carred made by japanese manufacturers will be in short supply in the u.s. this spring. at least that is the expectation from autonation, the largest u.s. dealer chain. the c.e.o. michael jackson tells us his showrooms will see a limited amount of new japanese models but it will be several weeks before that happen has. >> at the moment we have very good inventories. we still have a pipeline that is on the way to us. so i do not expect
availability issues really until mid-may. but then it's probably going to last two to four months depending upon manufacturers. >> tom: toyota says part shortages from japan will lead to a temporary shut down of all of its north american factories soon. the closures will likely take place later this month, affecting about 25,000 workers. no layoffs are expected.
>> susie: tom, i guess you can describe today's market actions await and see. there's a lot of hesitation by investors. they're waiting to see what the corporate earnings reports are goinging to be like over the next couple of weeks and waiting it to see if there going to be more good news on the economy, right. >> tom: absolutely. but the dow still continues to creep up to levels we haven't seen since before the recession. a new post recession high tonight for the industrials. let's go ahead and roll with tonight's market focus. just small moves today for the major indices, but there was action in technology after the close. texas instruments will pay $6.5 billion in cash for national semiconductor. the deal values national semi at $25 per share. together, the two will have an estimated market share of 17% of the analog chip market. both make semiconductors for cell phones and industrial equipment.
let's pull out and roll out, texas instruments shares were down 12 cents during the regular session and dropped as much as 2% after the late-day announcement. the low here in march came a few days after warnings the japanese earthquake will hurt revenue. because of the closure and damage of two plants. national semi closed a fraction lower, but rocketed 73% higher after news of the deal hit the market after the close. at $25 per share, that would be n-s-m's highest price in 3.5 years. leading the overall market was leading the overall market was the materials sector, led by fertilizer maker c.f. industries, up another 2%. health care was strong, helped by johnson & johnson. j-n-j led the dow industries with this 1% gain. and speaking of dow leaders, walmart added 1%. bloomberg reports it may start selling groceries online. the f.a.a. has ordered new inspections of more 737 airlines after the fuselage rupture on a southwest airlines plane on friday. that problem led to a five-foot hole in the plane's roof.
southwest's problems occurred on a 7-300 model. southwest canceled 70 flights today because of continued inspections. 57 planes were cleared for service again. the airline expects to be finished with inspectors late tomorrow. morningstar airline analyst basili alukos doesn't think the company suffers long term. >> they may need to be more stringent in their repairs, start updating their fleet nor frequently leading to more capital outflows but as far as changing the business model from a point to point, that has been proven over the past 30 and 40 years that that is the only business model that is viable in the united states. alukos figures the flight cancellations yesterday and today will cost southwest about $10 million, maybe less. shares fell 1.7% today. off much worse than that during the session though. meantime, boeing stock saw very little movement today, lower by only six cents.
shares have been hitting resistance in the mid-70s. speaking of aerospace, general dynamics shares 5%, back to january prices on this 180- session chart. a test flight of a new gulfstream plane ended in a deadly crash over the weekend. the first deliveries of the plane are scheduled for next year. market clearly showing big concern. finally, silver. prices continue moving up. this is the past 30 years, and at $38.49 an ounce, the highest price in a generation. since the winter of "miracle on ice." and that's tonight's "market focus."
>> tom: no no one or number two seeds in tonight's ncaa men's basketball championship. tonight's beyond the scoreboard our look at the ofb sports starts with no big money colleges in tonight's big game. rick horrow a business sports analyst, c.e.o. of horrow sports ventures joins us from houston. happy big game and big dance to you, horrow. >> thank you, my friend. i decided to add to the economic impact of houston and there it is, ladies and gentlemen. >> tom: we've got no duke, no university of north carolina no ohio state, kansas, it's uconn and butler. uconn spends about 5.5 million on his basketball, butler under 2 million. relatively small amounts, right. so has college basketball finally achieved parody? >> well, the reason it is close to parody today with the haves and have nots it used to be 15 scholarships a team, now down to about 13, there is a limit.
so it basically does limit the playing field. the tv money gives more programs the ability to fund themselves. you have 15 teams with 13 losses or more in a tournament and the final four team, 37 cum latif losses, the most ever, yeah, it closer to parity than ever before. >> many top basketball schools are beginning to make money and serious money on the court. we've got louisville with an operating budget of almost 16.5 million. unc making money, kansas almost 13 million dollars, will butler and uconn benefit financially? >> well, clearly uconn will because it perpetuates their winning. butler the sky is limit, twice in the final four and if they win, for a small school, gorge maison university came from nowhere to it be in the final four, over $100 million of awareness and publicity and mention, that is significant value. and even more so if butler actually wins tonight. >> tom: one word in that aspect, gonzaga, remember
that from years back. >> yes. >> almost 11 billion on the line for the broadcasting rights. the tournament for the next 13 years. the stock has had a nice run. does this match up. >> america loves cinderella, a great play, a great movie, a great book and now butler looks like cinderella against the power house uconn. everybody loves to hate them. their coach sunday suspicion for some things. and the bottom line is, though, nothing has been proven and clearly there is a program there, that is okay, even though the women's team didn't do very well last night, the bottom line is it is a matchup that america wants to watch. saturday's ratings were very good. i suspect tonight's will be even better. >> tom: after we wrap up here you are on your way to reliant stadium, 70,000 plus. it gets the final four in 26-- again y so soon? >> economic impact. i have got these tickets and you don't so i will try to go pick up somebody exciting to go watch the game with me. i have a couple of friend was will go. and the bottom line of all
of this is that the tickets aren't as valuable because the teams aren't traveling. the big names are not there. but 50 million of economic impact and reliant stadium, about 560 million of construction costs, 60% of it public money, the promise was the houston texans they came super bowl xxxviii, that was there, the final four this year, and the final four 2016. so it's not just the economic impact of the facility today, but the package of events it brings in over time. >> tom: let's get threw in time for tippoff. we've got you in houston rick horrow, c.e.o. of horrow sports ventures. >> susie: here's what we're watching for tomorrow: the federal reserve releases minutes from its march policy meeting, and we'll see quarterly result from k.b. home. also, our "word on the street" is "travel." summer vacation season is right around the corner. robert walberg from robert walberg from street.com will be here packing three top travel stock ideas.
some good news for consumers banking at citigroup-- the bank is changing the way it processes checks in consumer accounts. as of the end of july, the bank will process checks starting with the smallest amounts first. most banks start with the largest amounts, which can run up multiple overdraft fees on a single account. those fees are pricey. at citi, it's a $34 hit for each overdraft. >> tom: a federal judge in washington, d.c. has tossed out an appeal by two phone companies challenging the f.c.c.'s new rules on what's called "net neutrality." those are the guidelines that ban interest providers from slowing down or blocking internet traffic. the phone companies, verizon and metro p.c.s., sued to overturn the new rules. the court turned the firms away, saying legal action's not allowed until the new rules are published, and they haven't been.
>> susie: as we mentioned earlier, members of congress are working furiously to get another bill passed and avoid a government shutdown. in tonight's commentary, some thoughts on solving long-term fiscal problems. here's glenn hubbard, dean at columbia university's graduate school of business and former chairman of the council of economic advisers under president george w. bush.
>> the president and congress are arguing over near-term budget cuts to improve our fiscal outlook. a key ball in play? more like taking our eye off the ball. the long-term budget woes present the real challenge: the unsustainable footing of social security, medicare and medicaid. this isn't just about dollars and cents. if we don't get our budget focus right, we won't be able to afford our goals for defense, education and the safety net we need. a new assignment for the president and congress: can't we clear up the long-term fiscal outlook without large tax increases that would discourage growth, and without reducing promises to current beneficiaries? we can strengthen our entitlement programs to augment and focus their support on lower-income americans. doing so gives the budget room to restore fiscal balance. the alternative-- don't act, don't tell-- weakens the future of our safety net and our living standards. the time to act is now.
i'm glenn hubbard. >> tom: that's "nightly business report" for monday, april 4. i'm tom hudson. good night everyone, and goodnight to you too, susie. >> susie: good night tom. i'm susie gharib. good night everyone. we hope to see all of you again tomorrow night. "nightly business report" is made possible by: this program was made possible by contributions to your pbs station from viewers like you. captioning sponsored by wpbt captioned by media access group at wgbh access.wgbh.org