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MONEY MAN

By Murali Kamma Email By Murali Kamma
April 2013
MONEY MAN

Ali Velshi is a very busy man. He is CNN’s chief business correspondent, CNN International’s World Business Day co-host on weekdays, and the anchor of Your Money on weekends. But this busyness bodes well for him, because he has gained prominence as a broadcast journalist, becoming as well known on the national stage as Dr. Sanjay Gupta and Fareed Zakaria. Velshi spoke to Khabar.

Few Indian-Americans today are as recognizable as Ali Velshi. Not only does Velshi cover the nation’s endless, bruising battles—both on the economic and political fronts—he also has to fend off sharp personal attacks from right-wing critics like Rush Limbaugh. Then there’s the matter of getting buffeted by storms. He has covered five hurricanes so far, including Sandy, which brought him unexpected attention (see sidebar). In fact, Hurricane Ali may be another way to describe him, given his brisk delivery style on the air and his non-stop engagement with pressing issues.

Velshi is actually from Canada, though he’s practically an Indian-American now, having moved to the United States on September 13, 2001. Yes, that’s right. It was just a day after 9/11 that Velshi left Toronto on a motorcycle and arrived in New York City, of all places, the following day (see interview).

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Born in Nairobi, Kenya, Velshi was there for just a year before his parents moved to Canada, where he grew up in Toronto. Now in his early 40s, Velshi, who got his start on Canadian television, made steady gains after moving to the U.S., thanks to shows like The Situation Room and American Morning, not to mention The Turnaround, a 13-part reality series that took him across the country. A winner of the National Headliner Award for Business Consumer Reporting, Velshi is a co-author of How to Speak Money (2011) and the author of Gimme My Money Back (2009).

Also raising Velshi’s profile was his coverage of natural disasters—but the biggest change in his visibility was due to a man-made calamity. The financial meltdown in 2008 led to the Great Recession, putting economic news front and center. That importance hasn’t diminished, in our era of fiscal challenges and budget cuts, keeping Velshi as relevant as ever.

The government’s automatic spending cuts [aka sequestration], which went into effect because of the impasse in Washington, are causing concern. But then there are others who argue that the problem has been overblown for political gain, since the cuts account for less than 3 percent of the entire budget. Should we be worried?
We should be worried. While it’s less than 3 percent of the overall federal budget, it’s between 9 and 14 percent of particular agencies and departments, because so much of the budget— particularly Medicare, Medicaid, and social security—are largely off limits. Meaningful debt reduction has to come from real reform of the entitlement programs and the tax code. More importantly, “budget cuts” mean “job cuts,” so it’ll hurt a delicate economy. Finally, these cuts are just inefficient and untargeted. We should be worried that the government uses such a hamfisted approach to running itself.

How should we prepare for the future?
People have to combine defensiveness and aggressiveness. Defensiveness by having some cash to invest, [and] making sure your kids are getting educated in fields that will allow them to prosper. Aggressive by taking advantage of historically low mortgage rates to buy property, and by shifting money from fixed income to equities, in a deliberate and careful way.

When we look at the U.S. these days, the challenges are huge—and the two parties can’t seem to get along, let alone agree on solutions. But late last year, you sounded optimistic about our economic prospects. I believe you mentioned three reasons. Could you elaborate? Do you still stand by your assessment?
I still stand by my assessment. Obviously, if the U.S. doesn’t handle it properly, then all bets are off. But assuming we can, there are three things going on underpinning the economy that are very exciting. The first one is the energy boom. There’s an increase in natural gas production and oil production largely based on technological advances, and that has brought the price of natural gas down tremendously—which means lower costs for electricity, lower costs for consumption, and lower costs for industries that are manufacturing things. There are also jobs to be created there.

Number two, there’s been a bit of a manufacturing boom in the United States. We haven’t created jobs in manufacturing, but manufacturing outlook has improved dramatically in the last few years and lower costs of electricity and natural gas will help continue that boom.

The third part is housing. The housing market has stabilized in the United States. We’re running down into a lower inventory of foreclosures. Interest rates remain historically low and so home affordability is better than it has been in generations. Those three areas could lead to prosperity like we saw in the fifties and sixties perhaps or even in the nineties.

Do you think the gridlock we’ve been seeing in Washington is not real but “manufactured” for partisan reasons?
It is entirely manufactured. We know exactly what needs to be done to manage the debt: continued stimulus now, with guaranteed and calculated spending pull backs later, plus specific reforms to entitlements and the tax code. This is not about science; it’s about political will and leadership, both of which are in short supply.

Recently you and Fareed Zakaria had a discussion on how investment has dropped sharply, even as consumption and entitlements rose. Given the current fiscal climate, how can we justify more spending on infrastructure as a realistic option?
America’s infrastructure gets a “D” grade from the American Society of Civil Engineers. It is crumbling, and we stand to lose business because of it. We need to forget the old saw that we are saddling our grandchildren with debt. We shouldn’t be saddling them with debt caused by our own consumptions (through healthcare and social security) but it’s fine to have them carry some of the debt from infrastructure builds and fixes from which they will directly benefit: transportation, energy, water, broadband, security, etc. We should be considering a federal infrastructure bank, and a real shift of tax expenditures to infrastructure.

You’ve argued that taxes should rise for the middle class as well, not just for the rich folks, if we are serious about tackling the fiscal crisis. But others argue that it would reduce consumption, drive up unemployment, reduce revenue and set back the economy.
There are lots of complexities to this. I don’t think they should be rising now for anyone if it can be avoided. But the concept that taxes can rise on the rich and not on the middle class in the long term isn’t logical. Yes, rise in taxes would slow consumption and would slow the economy down. If you do it in a disorderly fashion like the fiscal cliff, you could see a full percentage point shakeup of GDP growth, which depending on where we are in 2013 could mean recession. My point is philosophical, more than anything else. We seem to think that we can tax the rich and everything will be okay. That’s just not the case. Our debts and deficits are too high for that to be the solution. But I would prefer that none of that happened in the immediate future. We don’t increase the taxes dramatically, but in the long run, if we want economic growth to be more robust, taxes may need to go up for everybody.

You anchor the program Your Money, and you’ve said that promoting financial literacy is your most important concern as a journalist. How does your job as an anchor help you play that role?
Increasingly we take highly complex and inaccessible financial and economic issues and present them to our viewers in a very accessible way. As a result my viewership has grown and more people feel that they can get a window into the economy through my show, through my books—and they take a greater interest in their own financial future. I sort of divide it up into areas that create prosperity for people, whether it’s their home, their investment, their careers, where they live, what their kids study—areas that are touch points for people. Not being trained in business myself, I think I can give people a great window, a great access into the economy, which a lot of people find very intimidating. That’s a first step in creating financial literacy, in making something that people don’t find intimidating.

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I believe you have a degree in religious studies. I’m wondering how you made the transition to broadcast journalism with such a strong emphasis on finance.
I didn’t actually think that religious studies was an area I would work in. I was just doing it as an intellectual pursuit. When I entered university I thought initially that I wanted to study business. But I was interested in journalism, and finance was one of the growing areas in journalism. My parents were small-business people but I didn’t have any sophistication or formal training. I learned it all on the job, which is unfortunate for those who watched me in the early years! Sometimes I get criticized for it, because I don’t have a degree in economics. But most of my viewers don’t have formal training in business as well. The economy affects every single one of us. We’re all participants in it.

At your SAJA (South Asian Journalists Association) keynote address in D.C. last year, you told this story about how you ended up in New York City just after 9/11. What prompted that journey?
I arrived on September 7, 2011, which was a Friday. But because of a clerical or administrative problem I couldn’t remain in the United States. So I went back to Toronto. But I had already sold my car and moved all my stuff, so I had nothing there. On Monday, the 10th of September, I was speaking to the immigration people. On Tuesday morning the visa got approved, just before 9/11. Now CNN wanted me to get to New York and start work but I don’t have a visa or a vehicle. We spoke to the Canadian consulate and I was told if I could get to the border, at Niagara Falls, I’d be let through. They faxed me a copy of the visa and all I had was a little motorcycle which I wasn’t intending to take to New York with me. But there were no cars to rent, there were no planes flying. So I rode my motorcycle, leaving Toronto on the 12th and arriving in New York on the 13th.

So you had no problems at the border.
Well, I had a faxed copy of a visa right after 9/11, so there was a bit of a problem. But I had some good people looking out for me and I was let in.

Your boss must have been very pleased by your enthusiasm.
Yes, they liked the effort.

In your speech you also talked about your trip to your ancestral place in Gujarat. Do you still maintain links to your family there or to India?
We can’t find family in India closer than several generations back at the moment. But there was an old man in the town they were from who was old enough to have heard the stories and knew people who knew things. So we connected with him. He was showing us around. There was this little stop on the road and but for the fact that there were satellite dishes and cell phones everywhere, it was just a village with some shops side by side. So I had some idea of what it must have been like.

We know there are some changes going on at CNN. Jeff Zucker is the new president. Unlike Fox on the right and MSNBC on the left, CNN prides itself on being neutral, in the center. However, judging by the ratings and today’s polarized audience, that seems like a losing strategy. Is that a fair assessment?
There are two ways to look at it. First of all, where it comes down to CNN being better than everybody else, on election nights, during hurricanes, the Arab Spring, and so on—in international matters, political matters, and breaking news nobody can hold a candle to us. That’s what we do well. People tune in to those other cable networks for particular programming. Ratings are a measure of how many people watch and the duration of their stay. So more people watch CNN but they stay for a shorter amount of time, because they come for the news, or for someone’s opinion, for an hour. When you look at a comparison between Fox, MSNBC, and CNN, you see a ratings problem at CNN. When you look at it from a financial perspective, our revenues are stronger because of who we are. Our revenue model is stronger because of advertising, cable subscriptions, and affiliates. Lots of people sign up to us and we have a very robust international division. Our issue is in programming. How do you get people to tune in and stick around like they do at Fox.

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There’s been some talk about having a broader approach to covering news. Do you have anything to share? For instance, what sort of topics would you select to broaden your reach?
Broadening our reach seems to be Zucker’s main theme. Though some of this was in motion prior to his arrival, you’ll see broader programming on CNN: more documentaries, cooking, fashion, sports, and more business coverage woven through the day. My mission will stay largely the same: making information about financial dangers and opportunities accessible to my entire viewership.

Speaking of hurricanes, when you sometimes see people in dire situations, do you feel the need to help, be a participant as well rather than be just an observer? How do you prevent yourself from taking off your journalist’s hat?
We’re never going to actually not help people if they need help. Sanjay Gupta is a good example of that. He’s performed surgeries in the field, where he has gone to report stories. We are not the first responders and we’re not the EMS, so sometimes our best work can be in securing help for people, calling 911. It happens very frequently. It’s an instinct. Sometimes you go somewhere and there’s tension brewing between groups and you turn up there with your camera. Sometimes it can be a good thing and sometimes it can be a bad thing. You’re going to record everything with your camera, so they think twice before they do things. When people are really in a dire situation, we are going to help. We’re not worried about ruining our story. We’re like everyone else.

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Do you think journalism is a viable profession? We’re going through a lot of changes in the media landscape and there are a lot of economic pressures. Should young people still get into journalism, whether it’s broadcast or print?
It’s open to a lot of people because it’s a way to get published and get your name out there. I don’t think it’s going to be as lucrative as it’s been in the past. So young people have to think about it. What is college going to cost me? How much do jobs in the industry pay? Most of journalism is just hard work—writing, asking questions, and conducting interviews. So if you’re going into journalism thinking you’re going to do lots of writing, asking questions, covering things, and that sort of thing, then that’s fair. If you’re going into it thinking you’re going to be a television anchor and make lots and lots of money, there are going to be fewer of them around. It’s a viable profession for people who want to be journalists, not for people who want to be superstars.

Is the digital environment having a negative impact on the quality of journalism? Because of the speed and competition, some may feel the need to cut corners.
Generally speaking, revenue models have been different, and in digital the revenue models are drastically different. Cost cutting has been a settled feature of the American economy for the last 20 years. It’s been happening. We’re not going to be in this flush economy, at least in journalism, that was in the past— where you’re going to hire extra people for the sake of it. That’s the reality. Everybody’s just catching up to the way we’ve always had it. We’ve never had extra people on stories. Now the networks run like cable. Cable runs like radio and radio runs like print. We all have learned to do more with less.

Some ethnic minorities feel that the mainstream media don’t do a great job of covering their communities. Is that a legitimate concern?
It might be. I’m sure you’re an expert on that. As a national media we wouldn’t do a lot of things that people would want us to cover. At CNN we do news and developments. But there’s a great market for a lot of this journalism—for instance, there are remarkable issues within the economic world that I don’t cover but are covered by trade publications much better than I do. And the audience for your news is actually there. It’s the same thing with ethnic groups. There’s a lot of stuff out there. There are TV stations and radio stations and publications that will do ten times a better job of covering it, understanding the nuances that we’ll never understand. I suppose it’s a fair criticism that the national media don’t cover that much, but my response is that it does get covered.

There are two parts to the criticism. One is that they don’t do enough and the other could be that they don’t do it properly. Some may say it’s bias.
That we don’t do it properly is a good one. For instance, we get a fair amount of criticism from certain groups when it comes to terrorism coverage, because there are specialty publications [and] we get less informed than perhaps we should about certain things. That’s an old and valid criticism, and we can all do better at it, but the fact is that there’s good coverage of every single event in the U.S. and around the world. The question is, what role the mainstream, national media should have in it.

One good thing is that there are more and more minorities in these organizations; so that perhaps helps.
Yes. The ethnic specific media also becomes very good preparation ground to be hired at a higher level.

Can you comment on the Indian economy, which seems to be stalling? Do you think it can be fixed, and is there a will to do it?
First of all, my daily show airs in India at 7:30 p.m. It’s a one-hour show. So there’s a good amount of involvement [for me] with India. I’d say India and China are both slowing for different reasons. China is slowing because it’s such a heavy export market to Europe, which has had such a tough time. India is slowing for a lot of internal, technical reasons. The short to medium term in India is worse, but I think most people feel that India is overcoming a number of structural problems that will allow it to have very good long-term growth. It’s got population on its side, it’s got education. Like the U.S. it’s got partisan governing issues which are causing short-term problems. It’s got legal issues that are stifling to business. India has become more and more friendly to business, but it’s certainly not totally there yet. It’s still typical for outside companies to make major investments, but the legal system is a little too slow, the political system is a little difficult. That said, the trend is in the right direction.

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In the Eye of the Storm

When Hurricane Sandy struck the East Coast last year, causing widespread destruction and disruption, Ali Velshi was one of the first high-profile correspondents to reach the Jersey Shore. And he was noticed. As NPR’s Andy Carvin tweeted, “Ali Velshi is getting pummeled live on CNN in Atlantic City. Cut the live feed and go inside, for God’s sake.” When Khabar asked him about the value of such dramatic—some would say sensationalistic—footage on television, Velshi bristled.

“I take a hard view of those who say it was sensationalistic,” he said. “This storm was very, very serious. There are two criticisms. One was that we were in danger. That’s a valid one and I appreciate that. The other was that we were sensationalistic. That’s what they said when Irene came… so if people saw this and saw how serious it was, we’ve helped people. I don’t think we were sensationalistic. We don’t send untrained crews out there. We know how to do things. In the block that I was on, for instance, I was up to my waist in water. There was a shelter nearby and the electricity on our grid had gone down. But this wasn’t our first rodeo. We know how to stay safe. We have people monitoring for flying debris. We have some contact with our desk every hour and we call in—and in Atlanta they ask before every reporting, ‘Are you safe? Is your crew safe?’”


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