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tv   Real Money With Ali Velshi  Al Jazeera  November 7, 2014 7:00pm-8:01pm EST

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but it didn't dampen the enthusiasm of the night. cute little girl. that's all of our time for this news hour. i'm tony harris in new york city. have a great weekend. "real money with ali velshi" is next on al jazeera america. america's job market rocked in october with strong job growth and falling unemployment. even wage gains. even so, two-thirds of voters this week said the economy was the number one concern at the polls. we ask labor secretary tom perez why. plus, you want bankers to go to jail that led to the financial crisis? a woman says she has the proof of a criminal fraud at jpmorgan. she tried to warn the bank that the mortgages they were bundling into securities were toxic.
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no one listened. i'm ali velshi and this is "real money." it three days ago voters sent democrats packing because of discontent with the economy, but today we learn the economy added 214,000 net new jobs last month. that was in the run-up to the elections. 31,000 more jobs were added to august and september's tallies in the revisions that typically follow a month or two after a jobs report. at 69 -- 49 months of straight job growth, this is the longest continuous stretch of job growth in almost 20 years, and this year's monthly average job growth is exceptional. america has added 229,000 net new jobs every month this year. that's about where the gains
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should be so that the job market has room to grow and take in new workers who joined the labor force every month. take a look at where the unemployment rate landed last month. 5.8%. now, normally i would tell you to ignore this number and put all your focus instead on the number of jobs that were created each month, and in the past year the jobless rate dropped 1.4 percentage points. better yet, unemployment is falling for the right reasons. more than 400,000 workers joined the work force in october, so things should be looking up for america americans on the job front except, except that wages continue to be a drag on american prosperity. in the past year we've seen average hourly wages rise by 2%. that's a little on the low side, and to understand why look at the jobs added last month. 42,000 in food services and
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drinking places. 27,000 in retail. 25,000 in health care, most of them in ambulatory health care services. most of these jobs tend to be on the low end of the pay scale. usually when the economy picks up, we see big games in lower-paying jobs. as things start to improve a few years in, as we are now, we're supposed to see more openings in higher-paying jobs. last month we got a hint of that in manufacturing and professional and business service sectors. top perez joins me now. good to see you. thank you for being with us. >> always a pleasure to be with you. >> let's talk about the labor force participation rate, which is the number i really prefer people focus on. now, a lot of conservatives in criticizing this report because it's a tough one to criticize. there's a lot of good stuff happening in here. they say if we had the labor force participation rate that we had when president obama took office in january of 2009 --
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that was 65.7 versus 62.8 where we are now -- the unemployment rate would actually be 8.8% right now. how do you answer that charge? >> well, you know, 50% of the drop in labor force participation is the aging of the population, so, i mean, when you look at -- look and try to understand labor force participation, what we also call employee-to-population ratio, you look at what's happening now. you correctly -- when you were framing this piece, you pointed out that the unemployment rate is going down for the right reasons. more people are finding jobs, and as a result when we keep continuing that, we will have more people looking for jobs as well. so, you know, if you had asked any pundit a year ago when the unemployment rate was 7.2%, what do you think it will be in a year? they would have said 6.9%, 6.8%.
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5.8%, they would have said, you're smoking something. here's where we are. we're here because we have had steady leadership from the president, the resilience of american businesses. we have partnerships between business and government. i met an employer, ali, in western massachusetts during the depths of the recession he had the following problem. he was trying to grow his business, but he couldn't find the right workers. he raised wages. he raised benefits. he still couldn't find workers, and so we helped to create an advanced manufacturing partnership in person maryland and training workers and now he's growing his business. those employees are making 25 bucks an hour. everybody wins in that snare joe. there's a lot that going on around the country. there's a lot of optimism. consumer confidence is at the highest levels since 2007. >> that's weird, because consumer confidence is at the higher levels but polls say 70% of americans said the economy is
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poor or very poor. how do you square that circle? >> you know, when i -- i grew up in buffalo new york, and i remember when my neighbor lost his job. if you have an employment rate of 5.8% but you know someone or a family member or friend who has fallen on hard times, the unemployment rate for you feels like 100%. there's still too many people on the sidelines and equally importantly there's still too many people who have been working hard and they haven't gotten a raise in years. they helped bake that cake of prosperity that we are seeing more and more, but they're not sharing in the prosperity. their sweat equity hasn't translated into financial equity, and at the same time, they're seeing the ceo making gobs of money. that isn't fair. that is a big part of the angst that we see across the country, and the antidote is really we
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have to continue to pick up the pace of growth as we put more money in people's pocketses by raise the minimum wage, by growing other sectors, that's how we pick up the pace of growth. that's how we put those upward pressures on wages, and that's how we continue to move the economy forward. >> let me ask you this. in the elections five states had referendums on minimum wage. it's a topic close to your heart. in all states the measures passed. they weren't as lofty as 10.25 an hour, but they were good increases. yet, the democrats who supported them didn't win. in fact, in many cases the republicans who didn't support them, in some cases they were supported by republicans and in some cases they were not, did win. once again, policies put forward by the administration are being adopted. yes, there's a feeling that republican -- that democrats are not responsible for this. what message is not getting across about this job creation?
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>> well, you know, i am not a pundit on elections, but what i can tell you is what you just said. in arkansas two-thirds of the voters voted to increase the minimum wage. in alaska it was closer to 70%. so as we move forward, what we have to do is really think about newt gingrich and bill colon tin. we're in that same period of divided government where we have a democratic president, a republican house and a republican senate. some will say you won't get anything done. newt gingrich and bill clinton came together. it was after the government shutdown, which i thought then and think now was a mistake, they came together, and you ended up with welfare reform, immigration reform, an increase in the minimum wage, a major health care bill, a hate crimes bill. it can get done, and what this election showed us and shows me is that the american people want results. this was the lowest turnout since 1942. those who turned out were sending a clear message that
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they want to get things done in washington. those who didn't show up were sending an equally clear message that we think you guys are -- it's futile for me to vote. that's what we have to do. we need to earn the faith of the american people. the president is ready to sit down on infrastructure, on minimum wage, on tax reform, on a host of issues and try to work out bipartisan compromise. i think it can be done. it was done in '95. i was working in the senate when that was happening. i saw folks come together. principle compromise is not a dirty word. >> no kidding. secretary perez, always good to talk with you. bill rogers is professor of public policy in rutgers university and served as chief economist in the u.s. department of labor in 2000 and 2001. he doesn't think it shows strong enough growth to lead to the broad-based prosperity that american households near and is
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here to me why. as far as unemployment reports go, this is not bad. there's more good than bad. this is done by a couple of surveys, and you think one of them is more important called the household survey because it's about people, not available jobs. tell me about this. >> sure. so bls does two surveys. one is of establishments, and that's the top of the line, 214,000 new jobs, revisions over the last few months. >> they survey government and companies. >> the household is about 60,000 households randomly drawn throughout the united states, and that's where we get the unemployment rate number from. that's where we get the other alternative measures we've been talking about a lot. >> let's talk about that, alternative measures of the jobless rate. this is the unemployment rate by group. the trend lines are the same, but i want to show you. this yellow is part-time workers for economic reasons. this is discouraged workers in the purple.
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this lighter green is marginally attached and this dark green line that's at the bottom is the official unemployment rate that's 5.8%. >> that's correct. that's the one that we typically feel comfortable using. because of the great recession and the lagging growth we had with the jobless recovery and pothole recovery. we have 9 million americans making up that part-time for economic reasons group. >> they're full time if they could get full time work? >> that's rights that's right. >> they live in communities where want demand for products in the community aren't buying as much because they're concerned about stagnating wages and the job prospects still, they only get the part-time hours. one of the big problems with that, too, is when you get full-time employment, you get a whole slew of other benefits for individuals. >> you're likely to be an individual that creates the underlying demand. the property is demand versus capacity, right? >> right.
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>> in economic-speak we're over capacity? >> that's right. another interesting piece that came out in this household survey today, people talked if you look at the household survey about 680,000 people said they got jobs. one of the problems with these two surveys where they can give you conflicting evidence is that the household survey also includes multiple jobs, multiple jobs. i think from the reporting today and commentary, no one noticed the sort of small result that the number of multiple jobs is by 680,000. >> this is about part-time for economic reasons. it's related to the idea some hold two part-time jobs or two full-time jobs or a full-time and part-time job. >> that's right. it gets back to the report about slow wage growth. we increased 2% over the last 12 months. the other reason why people take that secondary job is because
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of, again, this stagnating wages but also because the high, real unemployment rate that we're seeing in the labor market. it can be related to we're moving into the holiday season, and employers are looking to bring on new people. however, though, what's interesting is i also have some research that looked at these part-time for economic reasons people, the people discouraged. they have the skills and xen sees like they're officially unemploy unemployed. as my old boss said, this is a skill shortage, not a labor shortage. we have millions of untapped and underutilized americans that continue to need help. >> you shed much more light on this than we can do on our own. thank you for that. coming up, an explosive new articles give intimidate details on how responsible one of the most parimportant banks was in
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america in causing the crisis and how one phone calm from jamie diamond had made any charges go away. tell me what you think by tweeting me or going on facebook.
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president obama has decided to nominate loretta lynch to the next u.s. attorney general. she would be the first black woman to lead the justice department if she ends up getting the job. now, lynch would replace eric holder who has been attorney general since 2009. one year ago this month holder announced a $13 billion settlement with the bank run by the other man you see here,
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jamie dimon, the ceo of jpmorgan chase. they admitted to misleading investors about the quality of mortgages bundled into securities between 2005 and 2008. in other words, the bank new that some of the loans were high lie likely to default burning investors. this was a civil settlements and no individuals at jpmorgan or other banks have been charged with actual crimes related to the mortgage fraud, and that is a crime in the minds of many americans' whose financial lives were destroyed at the economy cratered along with the stock and housing markets. today "rolling stone" published a bombshell story that raises huge questions about the deal the two men struck. this art is titled "the $9 billion witness."
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meet the woman they paid one of the largest fines in history to keep from talking it's elaine fleischmann who reviewed the mortgages that went into the securities sold to unsuspecting investors. the article said she told her bosses they could not sell certain high-risk loans as low-risk securities without committing fraud, and she says her warnings were ignored. the article describes in fascinating detail what happened with a bunch of home loans from a mortgage company called green point. it says fleischmann and her team found that around 40% of the loans were based on overstated incomes. that's eight times the percentage that chase normally found acceptable. one mortgage that raised a huge red flag involved a manicurist who claimed an annual income of $117,000. the bigger picture is how elaine's subsequent revelations and conversations with law enforcement officials and
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regulators ended up being used by eric holder's justice department in negotiations with jamie dimon's bank and how so far they have not been used in any criminal case against the bank, even though elaine fleischmann says the proof is there. joins me now to discuss that proof is matt tiabbi and elaine. what did you do? >> i was a deal manager, which meant i was in the middle of the quality control process making sure the loans were reviewed properly and that they were good enough to sell to investors. >> you are a lawyer? >> yeah, i'm a securities lawyer by trade. >> so your deal was jpmorgan chase would buy loans from a bank that makes loans to individuals. they would buy a bunch at the same time and would package them and sell them to investors. i think most americans know that part of the story. you were actually reviewing the loans bought by green point bank
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and others? >> that's right. part of our process was the quality control so we could say to investors, these loans are good to be sold to you, and if there are issues, here's what they are. >> you had rules that said you're not going to bundle these mortgages and represent them assist as a certain quality, in this case it was alt a, to qualify as that brand or type of mortgage, certain requirements had to be met. you're saying that you were under some pressure or your team was under pressure to fudge that. >> exactly. so, for example, when you're doing these loans where you're relying on people saying what their income is, you still have to match up what their job is with generally what they're making. it's supposed to make some sense. for example, when you have the manicurist that makes $117,000 that's five times as much as our programs tell us she should make. >> when you pushed back on some of these, your team pushed back,
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there was pressure to let some of these go through? >> yeah. i mean, really what happened when people were saying no and were at this 40% rate, the person who was hired too supervise the diligence managers suddenly started to just yell at them and berating them and making them do reports over and over again keeping them late at night. it became clear that really he was going to keep doing this until they would clear the loans. >> matt, you describe this in the article as tribing to beat a confession out of a witness where you wear them down and put them in isolation and give them -- they don't sleep and there's a bright light on and they will say what you need them to say. >> exactly. the message was very clear. they could keep asking the question until they got the answer they they wanted, and they said these loans are fit to be sold to other investors. these diligence marchings said we cannot resell this stuff, and that answer was unacceptable to the sales people and upper management. >> elaine you actually said to a senior official at jpmorgan
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chase you either have to represent what these loans are, the quality of these loans are, and if you don't it's fraudulent, and if you represent it, nobody will buy them that way? >> that's exactly right. i stopped the purchase before it happened to get somebody to talk about the problems they would have if they put these into a security. >> there's a reference in the article, there are several references to the fact you have a confidentiality agreement. why do you have that, and why are you able to talk about this? >> i mean, it's standard for anyone working in one of these banks. that's why you see quotes from the doj that some people said we were blowing past your internal warnings, but they don't talk about publicly. for me, i just decided that this is more important. there are still investors trying to get their money back out there, and i think the public has a right to know what happened. a lot of the information that we're hearing from holder, the top levels of the justice department doesn't match what i saw and what i believe the doj
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knows very well. >> there's a lot more in this story, and matt, i want to connect this to the work that you have been doing for years. you have long suspected this type of thing. we know that banks were not doing what we were hoping they had done, but this is as close to the amount of detail you've got. stay right here. we will continue this discussion in just a moment. stay with us. we'll back in two minutes.
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i'm rejoined by matt taibbi and elaine fleischmann. we're talking about the article titled "the $9 billion witness." meet the woman jpmorgan chase paid one of the largest fines in american history to keep her from talking. i don't think i've had anybody that cost anybody 6 extra billion dollars. we asked jpmorgan to comment on this. they didn't comment on it for matt's article that appears in "rolling stone" or to us. they told us that they would not
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have any comment to make. we asked the department of justice for comment, and this is what they've told us. in each of the justice department settlement negotiations we have refused to provide waivers that would shield the banks from criminal liability. as a result, we have preserved our ability to conduct criminal investigations where they might be warranted. as always, we will pursue all available evidence wherever it leads. this is important, because the deal made between jp more sg ppe and the federal government did not preclude the department of justice from pursuing criminal activity later. however, matt, one of the their early offers to the department of justice in exchange for not going through criminal prosecution was $3 billion. it worked it up to $9 billion. li let's use 9 as the argument. the woman next played a pivotal
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role. tell me about this. >> i think so. clearly the government was about to release a very detailed complaint and file civil charges against jpmorgan chase. there were news reports that ceo jamie dimon called up the department justice. they agreed at at the 11th hour to cancel. in the subsequent weeks news reporters leaked that there was a cooperating witness who was willing to testify against the bank. they even -- >> there were reports it was a woman. >> it was a woman. it was quite clear who it was. it was clear to elaine at this time. i think that was intended as a shot across the bow to let them know that they had a case, and after that the bank upped its offer and they came to this agreement, which is depending on how you look at things $13 billion or $9 billion. they eventually settled. the important thing is the truth never came out. they agreed on a statement of facts and never went before a
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judge. they essentially just exchanged a little money and the whole thing went away. >> elaine you left in 2008. in 2010 jamie dimon in testimony before the financial crisis inquiry commission, january of 2010, he in reference to what went wrong and the many questions said this. in mortgage underwriting somehow we just missed, you know, that home prices don't go up forever. you believe that this is not what jpmorgan missed. they actually knew that they were selling investors mortgages that had a very high likelihood of defaulting, and in fact in the green point deals that you were working on, ultimately a lot of those mortgages did fail. >> yes. in fact, in the complaint by one of the credit union regulators, they actually said that by 2011 over 50% of the loans were delinquent or in default or even
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foreclosure. a huge percentage of them ended up failing. >> if i were responsible for a major bank that i thought had done something wrong, upping their bid, their personalities from $3 billion to $9 billion, i might think i achieved something. why is it important the real story come out and somebody goes to jail sfl. >> the problem is when i was there, one of the things that i didn't know is why they were going guard guard with this. they knew anyone in the industry and certainly if i new people knew bo me, when you put loans into security it would cause massive problems for the security. i think they felt like their lawyers and pr and lobbyists would protect them, because it doesn't come out of their pocket and they have no real risk. i think for any individual in a bank, it's still worth it to them to go forward and do these things. when billions of dollars every month are running through search individuals, it can add up to a
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lot of money quickly. >> dube jamie dimon is a bad person or is it corporate neshg? what do you think of jamie dimon and the leadership at jpmorgan? >> i have no personal opinion on jamie dimon. there's a website jpmadoff tracking the settlements. in the last four years there's $29 billion worth of settlements four fraudulent or illegal activities. to me, that indicates there's something wrong and the settlements aren't working. there's another one they're discussing in the news now. >> no one that reads your for years would call you a friend of banks. one comment a lot of people made about the selgszmentes with want department of justice is it's not the executives that pay. it's not only that they're not going to jail and they're not paying. we're paying. anyone with a 401(k) or ira or an investment in anything, that's where the fine comes from. >> absolutely. the shareholders bear 100% of
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the burden. in this case, for instance, $7 billion was tax-deductible. that means that all of us actually paid for this. >> 7 billion came out of the tax money. then investors paid and the executives according to your article, the net wages at jpmorgan went up? >> and jamie dimon himself got a 74% raise after being hit with the largest fine in capitalism they more than doubled his take-home pay. the stock is up. what message does that send if you can get caught doing terrible things and nothing happens and you get a raise? >> you're not naive. you're a lawyer and you know that so many cases get settled. the vast majority of all criminal cases get settled before they go to court because somebody wants a deal. why is this not acceptable as a deal? would double the amount of money made it acceptable, or does somebody need to be shown to be culpable and go to jail?
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>> there are thousands of people in america in jail doing real time for property crimes. these people committed property crimes that were enormous in scope. we're talking about hundreds of millions of dollars that people lost. it can't be possible that not one person from this entire period was criminally guilty enough to be sent to prison. that's the reality we live in. not one person has done so much as a day in jail, and that's not fair to the people in jail for other property crimes. >> just over a year ago, september 17, 2014 eric holder in a speech to the nyu school of law said this and i quote, responsibility remains so diffuse and top executives so insulated that any misconduct could again be considered more a symptom of an institution's culture than a result of willful actions of any single individual. >> that was amazing to me. it's one of a long string of statements that i take as an
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implication he doesn't feel they should pursue individuals and it strongly implies they don't know who the individuals are, which certainly at jpmorgan it's set out clearing in a letter. whistleblowers have also cents things particular executives. >> can you point them in the direction of people criminally responsible in your opinion? >> for two and a half years the government has my letter and says exactly who did what. when they were actually securityized and sold to investors and you look at what they did and how much they knew and things like not allowing e-mails to not leave a trial, that's criminal. >> you goed that the leader of your department actually came out and told people, stop e-mailing? >> he said don't e-mail him and he wouldn't send them. if you sent an e-mail, he would come out and yell at you. when you talk about compliance at a bank for the purposes of
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setting out your policies to not write anything down makes no sense at all. >> what is life like as a whistleblower? >> for the last two days it's been strange. for a long time it was trying to keep a secret that i felt awful about, and as soon as i stopped believing it was going to come out, it became impossible. i just felt like everyone deserves to know this because oral -- ordinary people payment from it. a lot of this was stolen from hard-working people. >> you didn't tell a lot of people about this. some of your own friends and family didn't know it. they see it for the first time in "rolling stone." >> i thought if i told people it will be too hard to keep it quiet. also, you know, my family doesn't mean a lot to you, but we're from a small town and a teacher and a salesman. it's not necessarily something that would translate either.
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>> well, thank you for your bravery in coming out and telling the story. elaine fleischmann is the whistleblower in the jpmorgan chase. she's a former due diligence manager. matt wrote the explosive article in "rolling stone." it is a must-read. coming up, remember when the president said no boots on the ground in the fight against isil? he's really pushing that to its limits.
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earlier this week we delved into the big changes. now i want to talk about innovation and prosperity, two big drivers to help create jobs and strengthen economic growth. the next guest feels so strongly about that he says america's public policy emphasis should be
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about enabling entrepreneurs to drive innovation and prosperity. this is a guy who should know. this is a man whose face and name you should know. he's an academic director at the rotmann school of management, the graduate business school at the university of toronto in canada. in fact, it's called the martin prosperity institute. you really study this. you're all about the thing thatmy viewers need to understand. how do you nurture prosperity? you say that there are policy prescriptions, which goes against what some people say, that prosperity comes from letting everybody do their own thing. >> yes. i think that's just a fantasy. i think prosperity comes from having an infrastructure that helps companies succeed, an infrastructure like a great education system, great r & d in that world and laws and regulations that help to govern competition in positive ways. i think it is notion that lots
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of industries in america are innovative because they're totally left alone, i don't think that's right. >> there's some reason why america is, for instance, the tech entrepreneurial hub says it is. if you lower taxes and repeal all regulation, we will flourish. what if you design this infrastructure? what would it look like and who would it benefit? >> it will benefit industries broadly. one of the things really problematic about innovation policy in most countries is its focus on a narrow range of industries. one of the great things about america and the economy is innovation that goes on in all sorts of industries. consumer package goods, transportation, et cetera. focusing narrowly on communications and i.t. and a o aerospa aerospace. >> whether when we talk about innovation, that's what we think about with technology? >> yes. even though the people in the technology sector say that's a
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huge part of the economy, it isn't. it's about 2% in the high-tech clusters. that's about 2% of jobs. that's a bigger percentage of stock market activity because these are exciting companies. they're important. they make the world a better place, but you need broad policies for broad prosperity. >> the topic we have discussed today both with the secretary of labor and then you heard with bill rogers, who was a former chief economist in the labor department, revolves around the quality of jobs and the wages which people are paid and the match between jobs and skills. give me your views on these ink thises. >> i think this is the great 21st century challenge. if you break down the employment in america, about a third of people working in america are in jobs that require independent judgment and decision-making, and they're doing just fine. >> the knowledge economy? >> yeah. 67% are in job classifications
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in america where there's very little independent judgment and sdis-making required. those jobs are stagnating entirely in their wages. the latest jobs report shows where the jobs are coming from. in the middle of the 20th century we had sort of a social compact that said we're going to create a way in which a lot of those jobs will actually earn a living wage, and it was unionization. pluses and minuses, it has those clearly, but since that unionization rates have gone down so dramatically. >> a very small percentage of workers in america utilize even public workers? >> that's right. that's right. so what we have is a lot of jobs now where there's little job security and the pension benefit to the like, and those wages are stagnating. many of those jobs are exposed to international competition.
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>> and automation. if the job doesn't require decision-making, this is one step closer to being able to automate that job. >> positively. what we need to do -- the good news is that number of 33% is twice as high as it was in 1960, so there are now 33%. there were only 16% in 1960. so we're ramping up, but essentially we have to have this long-term transformation that has more of the jobs being ones that require independent judgment and decision-making, and we have to figure out in order to keep the social cohesion, keep the inequality from growing too great to have a solution for those jobs that are in the 67%. that's the electorate, right? >> something interesting. you have said that congress needs to reverse the negative effect or the negative impact that stock marts have on innovation and prosperity. what's the negative effect of stock markets? >> well, i just think we have the stock markets working in a way that is more about trading
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value than increasing a value. what you want the stock markets to do is reward first and foremost companies and people that build net value. instead, they're all about trading value back and forth, so we have the whole hedge funds sector. they don't create any net value. they just trade. i'm a hedge fund and trade with you and i make money, and you lose money. if you make money, i lose money. the markets originally created to help issuers, companies issue stocks so they can grow, that's a tiny, minuscule part of them. it's about trading existing value. i think there's a bunch of things that government has stood by the shrines on -- sidelines on this and has done very. it's taxed as capital gain as
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it's fee income. the pension funds have grown gigantic, a big part of the money and they give vast amounts of money to hedge fundses who have an incentive to produce volatility rather than value. so i think in some sense need to get the stock markets, the capital markets back to focusing on what they were designed to do. helping issuers raise capital for growth. >> roger, always a real honor to have you here. thank you so much for your sound thinking on this. he's the academic director of the martin prosperity institute and the author of "playing to win." obamacare is the law of the land after a supreme court decision ruled on the constitutionality of a key provision of the law in 2012. whether americans should pay a tax if they don't sign up for health insurance. now the court is going to hear another challenge. this time focusing on tax
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credits that go to subsidized health coverage purchased on federal exchanges. challengers to that law argument it limits the tax benefits to people who buy on the state-run exchanges. if the supreme court decides that's the case, nearly 5 million people could lose subsidies. coming up, remember when the president not no boots on the ground in the fight against isil? he's pushing want limits on that one.
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the definition of no boots on the ground in the fight against isil continues to stretch. after meeting with congressional leaders on friday, president obama authorized an additional 1500 troops to be deployed to iraq still in an advisory and training role that would push the total number of u.s. troops in iraq now to 2900.
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in addition, the president will ask congress for $5.6 billion to help aid the fight against isil. billion with a b including 1.6 billion to train and equip iraqi troops. for more on that let's brick mike viqueira. i can't believe i said that with a straight face. it didn't work so well the first time around. >> reporter: the phrase is slippery slope and mission creep are being bantied about. this is what everyone feared here. it's not going well, the air campaign. while the president and administration officials repeated the mantra for months now, it will take a long time, we're in it for the lodge haul, there are no tangible results. most of the news has been bad news for coalition forces. it's no wonder that people look at what the president announced today with a measure of skepticism. doubling the number of advisers, quote-unquote american advisers now within iraq. they've been there for a few months, ali, and now he's
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sending up to another 1500. they're going to be stationed all throughout iraq, and here's whaents going on. after the advance of isil through anbar province in particular in the gates of baghdad or the baghdad airport, there's a plan for a counteroffensive that's going to be led by iraqi military. nobody trusts the iraqi military, half of the units are not viable and can't be trusted. what's going on now is retraining. as part of all that retraining and this offensive that's going to take place or beginning within the next couple of months, that's what the advisers will be there for. they'll be stationed around the country, and you better believe soon or later they come under hostile fire. what happens then? objeviously they're engaged wit the enemy at some point. >> that brings that adviser roll into question. mike viqueira, thank you very much. a federal judge approved detroit's approved bankruptcy
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plan 16 months after the city became the largest municipal bankruptcy in u.s. history. the official go-ahead came after a two-month trial that cost the city about 1$150 million in fee. it was a speedy resolution for what was an incredibly complicated process full of politically negotiations and financial deal-making. when detroit first filed for bankruptcy, the city had racked up some $18 billion in debt. under this plan $7 billion of that debt gets wiped occupy entirely. here's how it happened. some creditors settled for less than what they're owed or take cash and long-term leases and bond insurers were billed millions for the city who sold rights for prime riverfront property in downtown detroit. they agreed to a 4.5% cut to the
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monthly pension economics and a 90% reduction in the health care benefits. in the grand bargain the state of michigan along with various foundations and prieft philanthropists kicked in $116 million to avoid the sale of art and pejs cuts. looking forward it calls for new borrowing and another $1.7 billion to remove blighted buildings and shore up neglected city services the long-term viability depending on tax revenue with more economic growth and above all a need for people to move back and reinvest in detroit. it's a city that with the big three auto makers was once a powerful symbol on the country's manufacturing might, but it has for far too long become
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representative of how far america has fallen. in the near future detroit won't be on its own. a new financial oversight board will monitor the finances for a dozen years and the pension fund investment is under supervision. coming up, we'll check in with one of the families we've been following as part of our series "america's middle class: rebuilding the dream." we look at why so many in the middle class say they can't afford on the things they want and need. >> protestors are gathering... >> there's an air of tension right now... >> the crowd chanting for democracy... >> this is another significant development...
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>> we have an exclusive story tonight, and we go live... a look at the role they play in the fight against isil. the improving jobs market, the dark cloud behind the new employment report. detroit's comeback. how a judge's decision helps the bankrupt city get back on its feet. the nanny who was an artist. the photographs of vivian mayer who was a secret to the world until after her death. that's after "real money" right here on al jazeera america.
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it is time now to check in with one of the families we've followed as part of the series, america's middle class, rebuilding the dream. we have an update on a family four of in new york. he mans the overnight desk at ups, and diane is a school bus aide. despite a household income of around $95,000 a year, they struggle with high property taxes and unexpected expenses. diane and phil recently celebrated their 25th wedding anniversary. they said earlier in the year they hoped to take a special
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trip to honor the occasion. here's how it turned out. >> we'll be married 25 years this year. we never had a honeymoon. so i'm hoping to go away somewhere, but the way the budget runs, i'm not too sure if that's going to happen. >> we've been talking about going on a cruise, so that would be nice. so we're hoping that we can swing that if everything goes right. >> so we had our 25th wedding anniversary. we didn't go anywhere. my parents treated us to go out to an italian restaurant and took the immediate family and it was very nice. we had a great time. >> thank god your parents. that was very nice of them and i'm very appreciative of that. >> i wasn't disappointed we couldn't go away, because i would rather go away when our priorities are set straight. >> we've had a tough year, so we're trying to just get through this and ghet back to normal.
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it's a struggle. >> i thought we weren't going to make our 25th because when you're in the heat of that negative financial cyclone and you start fighting, but we're strong. we go to therapy. >> oh, boy. well, as you know, i've been stressed out with money. >> she helps us through. there's times i walk out and get sag ra aggravated but she helpe us get through a lot. >> we're going to write a new, positive chapter. we're moving in the right direction. >> it's ears easier to give up, and it's more rewards if you keep trying. >> exactly. >> we'll be here for our 50th hopefully financially better. >> well, sabinos aren't alone in putting off vacation plans. cloes to 40% of americans have
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cut back spending on travel and vacations this year. in fact, gallup says the middle class is forking out less money for things they want but, in fact, they're spending more for things they say they need. janelle is a personal finance reporter at the "washington post" joining us from washington to explain why and how americans are cutting back on what she calls the fun stuff. thank you for joining us. what's your take on this? >> the important thing to note is that just like this family, you know, showing us, even though the economy is getting better, people still are not feeling better. why is that? we saw that in the jobs report today, right? millions of people who would rather be working full-time, they're working part-time. wages have been flat and people just don't have much money to throw around. >> what's your sense of -- this gallup report says that people are actually spending more, but it's not going towards the things we normally think of like
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discretionary but towards necessities. >> exactly. what did the polls show? it showed that people are spending more on things like groceries, utilities and health care. they're not getting raises. so what that basically means is they're spending more, but on the things they want but it doesn't leave enough money for things people really, i guess, want. >> now, this issue we've been talking about. with we see these job numbers, 229,000 jobs a month all this year. fantastic really and quite good. we don't see wages increase. that's a big concern. >> it is. it's a big deal. like i said, there were 7 million people who are working part-time. they would rather be working pull-time. if you look back over the past several years, wages have been flat. i mean, bank rate asked about this earlier in the summer, and especially the number one reason that people gave for why they were not spending as much as they could is they were waiting for a raise. it's really holding people back right now.
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>> you know, we've seen energy prices come down fairly dramatically. will that work its way in and give people a little more money? >> that could be the silver lining in all of this. that's the latest exception right now in terms of bills if they're not going up or staying the same, it's too early to know, but we could see some extra spending. >> we can only hope. thank you so much for joining us. well, this week american voters as you well know decided to hand control of the u.s. senate entirely to the republican party. this was a big blow to president obama. no matter what side of the political fence you call home, america is your real home. in america we accept the resultless of our lawful democratic elections. that's how it works in a nation of laws, and that's why so many people are angry at what happened in america leading up to the funninancial crisis.
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bankers gave mortgages to too many people that couldn't afford them. those mortgages got packaged into securities and sold to other unsuspecting investors misrepresented, in fact. those investors got burned when it led to foreclosures and worst recession since the great depression took hold. elaine fleischmann worked at jpmorgan chase evaluating the mortgages as jpmorgan chase bought them from banks who issued them. her story is a must read in this month's "rolling stone." she telling the journalist a disturbing tale of warning her bosses that some of the mortgages stank to high heaven, but they held their noses and sold them off to unsuspecting investors. then those mortgages failed. now, it's clear that her revelations were used as leverage by the justice department in getting jamie dimon and jpmorgan to agree to a
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$13 billion settlement, but no one went to jail and no one has been charged in a criminal case even though elaine fleischmann says she has proof of criminal securities fraud. she's a securities lawyer. it's stories like that further erode the trust americans have in the men and women charged with making the laws of land. crimes unpunished may not be a crime, but it is in my book. read the article, it's worth it. i'm ali velshi. thank you for joining us.
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>> hi everyone this is aljazeerm jonathan betz in new york. john siegenthaler has the night off. making history. president obama plans to nominate the first african attorney for attorney general. breaking silence about what she calls the biggest financial coverups of history. breaking barriers, how germans are shedding light on a dark past. timed exposure. after years in