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Newsroom/World View

NEWSROOM for January 31, 2001

Aired January 31, 2001 - 4:30 a.m. ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

ANNOUNCER: Seen in classrooms the world over, this is CNN NEWSROOM.

TOM HAYNES, CO-HOST: It's Wednesday and this is CNN NEWSROOM. Glad you're here. I'm Tom Haynes.

SHELLEY WALCOTT, CO-HOST: And I'm Shelley Walcott. Here's a look at the rundown.

HAYNES: Money and jobs top today's show: why the Federal Reserve may give a boost to the sagging U.S. economy.

WALCOTT: Next, in "Biz Desk," aggression in the workplace: why some say bad behavior could affect the bottom line.

HAYNES: From staying out of the red to getting in the black, "Worldview" checks out a plan to help entrepreneurs in Kenya.

WALCOTT: Then, in "Chronicle," the rising flap over a box. We'll tell you why this container is one size fits all.

United States President Bush pushes his tax cut plan hoping to jumpstart the nation's economy.

At the swearing in of the new Treasury secretary, Paul O'Neill, U.S. President Bush renewed his pledge to give Americans a tax break. Mr. Bush proposes a 10-year $1.6 trillion tax cut package. Among other things, his plan includes an overhaul of the current rate structure, reductions to the marriage penalty and the elimination of the so-called death tax.

The push for tax cuts comes as consumer confidence has fallen to a four-year low. That's one of the issues the Federal Reserve will likely consider during a two-day session, which began Tuesday in Washington.

The Federal Reserve is the central bank of the United States. The U.S. Congress founded it in 1913 to provide the nation with a safer, more flexible and stable financial system. Its chairman is Alan Greenspan.

Analysts expect the central bank will lower interest rates.

HAYNES: Many analysts say the central bank needs to lower interest rates to avert a full-blown recession and help restore consumer confidence. In anticipation of such a rate cut, Brian Palmer looks at the aggressiveness of the Federal Reserve's actions.

(BEGIN VIDEOTAPE)

BRIAN PALMER, CNN CORRESPONDENT (voice-over): He did it before, on Jan. 3, and he may do it again. The Federal Reserve chairman is expected to announce a half percentage point interest rate cut to juice the suddenly slowing U.S. economy.

ALAN GREENSPAN, U.S. FEDERAL RESERVE CHAIRMAN: We have had a very dramatic slowing down. And indeed we are probably very close to zero at this particular moment.

PALMER: It would be the second half-point cut in less than a month, on top of Fed Chairman Alan Greenspan's new support for a tax cut.

PADDY JILEK, CS FIRST BOSTON: It's aggressive, and it needs to be.

PALMER: The goal, says Paddy Jilek of CS First Boston, is as much about perception as it is about raw economics.

JILEK: The bottom line and goal of the chairman is to stop consumer confidence from falling. Once he's done that, then we can start thinking about a recovery.

PALMER: The Fed spent much of 1999 and part of 2000 raising interest rates to keep the booming economy from overheating. But when the dot.com bubble burst and the stock market slumped, the economy followed, with retail sales and manufacturing slowing and layoffs coming in waves.

FREDERIC MISHKIN, COLUMBIA UNIVERSITY: So if you, in fact, see the Fed cutting interest rates and saying they're taking out insurance against recession, it makes you less likely to panic, more likely not to cut your spending so much that it actually may lead to the bad outcome of a recession.

PALMER: If the rate cut has the desired effect, the stock market will rally.

JILEK: The stock market stops falling, then more likely than not so will consumer confidence.

PALMER (on camera): And if consumer confidence rebounds, the Fed seems to be betting, so will the economy.

Brian Palmer, CNN, New York.

(END VIDEOTAPE)

WALCOTT: A recent Gallup poll suggests Americans are more worried about the economy now than they've been since the 1990 recession. When a booming economy, like the one we've seen in the United States, slows for an extended period, that's called a recession. But how worried you are seems to depend on whether you're middle class or at the top of the economic heap.

Bill Delaney explains.

(BEGIN VIDEOTAPE)

BILL DELANEY, CNN BOSTON BUREAU CHIEF (voice-over): Newbury Street, Boston, one of those always described as charming places, where most everything for sale is probably something you don't really need, ground zero, it would seem, for any pre-recession buying slump.

At Mark Connelly's shop, Alianza, though, the elegant, quirky little objects still sell. Recession? No.

MARK CONNELLY, ALIANZA CONTEMPORARY GIFTS: People don't need jewelry boxes. They don't need blown-glass vases. We have things in very high price ranges, ranging from many thousands of dollars down to things that are $50, $60. And we've been selling in both of those ranges.

DELANEY: Some seem to be taking the edge off by shopping.

(on camera): In most polls, a majority of Americans now say the economy's getting worse. But emotions are mixed. In a recent Gallup poll, while most agreed we're slouching toward a slump, 67 percent at the same time described economic conditions as good to excellent.

(voice-over): One thing going on here seems to be that those who've got it still flaunt it, like on Newbury Street.

More economic worry at a more middle-class mall in southern Massachusetts.

UNIDENTIFIED FEMALE: Right now, I think it's at a standpoint, and I think it's going to go down.

DELANEY (on camera): Really? Why?

UNIDENTIFIED FEMALE: Well, because I lost my job yesterday.

DELANEY (voice-over): Fay Thompson manages a shop called Pole to Pole, selling lovely stuff no one really needs at the mall, after a slow Christmas, a slow January.

FAY THOMPSON, POLE TO POLE: There was a lot less traffic in the mall this year. A lot of people this year were, like, wow, this is great, you know, no lines. Yes, it's great, you know?

DELANEY: As the whole country now waits to see whether this winter's uncertain economy's worth buying into.

Bill Delaney, CNN, Boston.

(END VIDEOTAPE) HAYNES: We take issue today with the debate over the state flag of Georgia. There has been increased pressure by many to remove the Confederate battle emblem from the flag. They say it's a painful reminder of slavery. Others counter the Confederate symbol merely represents Southern pride and heritage. So what to do?

Well, after an emotional debate, a compromise was reached Tuesday among Georgia lawmakers.

Gary Tuchman shows us what the new flag will look like.

(BEGIN VIDEOTAPE)

GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): The Confederate battle symbol has been a prominent part of Georgia's state flag for 45 years. It was up to the state Senate to decide if it should be replaced.

UNIDENTIFIED MALE: All those in favor of the bill will vote aye. Those opposed will vote no. The secretary will unlock the machine.

TUCHMAN: The House had already passed the measure, so a thumbs- up from the Senate would replace the controversial flag with a flag that turns the Confederate stars and bars into one of five small, historical rectangles on the bottom of a new flag.

UNIDENTIFIED MALE: On the passage of House Bill 16, the yeas are 34 and the nays are 22.

TUCHMAN: So Georgia will now have a new flag. The state's governor was one of the measure's most influential supporters.

GOV. ROY BARNES (R), GEORGIA: The greatest reason to be for the flag change is not because we avoid boycotts, it's not because we avoid any type of economic harm. The greatest reason to be for this flag is because it unites all of our people.

TUCHMAN: But earlier this month, hundreds of demonstrators had shown they beg to differ, saying the flag is not a symbol of racism or slavery, but rather of Southern heritage and valor. Just before the vote, that point was made by some senators.

SONNY PERDUE (R), GEORGIA STATE SENATOR: I'm casting my vote today against this change on behalf of the hardworking, honest, God- fearing people in my district who you will not see at a protest, you will not see in a hate group. They're too busy raising their families, going to work and producing the taxes that we in this building like to expend.

TUCHMAN: But a famous movie about Georgia was mentioned to convince senators to vote for change.

STEVE THOMPSON (D), GEORGIA STATE SENATOR: We can help the New South from becoming "Gone With the Wind." Please, vote for this for your state and let's heal our wounds. TUCHMAN (on camera): Georgia's governor will sign the bill as early as this week. And once he does, Mississippi will become the last state to prominently display the Confederate stars and bars on it's official flag.

Gary Tuchman, CNN, Atlanta.

(END VIDEOTAPE)

WALCOTT: In "Business Desk" today, we focus on productivity. Just how productive are you at school. In the business world, companies rely heavily on worker productivity to generate profit.

Productivity means the amount of goods and services produced from each hour of a worker's time. Lots of things could effect your productivity, such as lack of sleep, for example. But in the workplace, many say it's the general climate in the office itself. Does the atmosphere you work in promote productivity?

Laura Rowley looks at the impact of incivility in the workplace and its effect on the bottom line.

(BEGIN VIDEOTAPE)

LAURA ROWLEY, CNN CORRESPONDENT (voice-over): It seems everyone has a story about bad behavior at work.

UNIDENTIFIED FEMALE: They were on the phone with a soon-to-be ex-wife screaming and yelling.

UNIDENTIFIED MALE: He came up to my boss's office, took his desk, and overturned his entire desk with all of his materials.

UNIDENTIFIED MALE: We actually started to choke each other.

ROWLEY: Envisionworks, a suburban Chicago consulting firm, has developed a survey to measure incivility in the workplace and its cost. It's based on five years of research from the University of North Carolina.

KEVIN SCHMIDT, PRESIDENT, ENVISIONWORKS: What the research proved was essentially that people that are not treated well in an organization, that are victims of this bad or uncivil behavior, reduce their productivity by up to 50 percent.

ROWLEY: In addition, 100 percent of survey respondents had experienced bad behavior; 46 percent think about quitting, and 12 percent actually leave but don't tell the company that bad behavior was the cause.

UNIDENTIFIED FEMALE: I've seen people yell and scream and throw things.

UNIDENTIFIED MALE: Coworkers fighting with each and...

UNIDENTIFIED FEMALE: Yes, definitely. UNIDENTIFIED MALE: ... things happening like that.

UNIDENTIFIED FEMALE: Making you feel that you made the mistake and also that you're lower than they are.

ROWLEY: GlaxoWellcome and the William Wrigley company have used the survey to evaluate their work environments. It asks questions that identify the nature of the behavior, where it's happening and how often it occurs. Envisionworks then uses counselors to help offenders recognize and change their behavior.

SCHMIDT: There's very few people that really have a malicious intent. Oftentimes, they're reacting to what they're seeing and what they're facing.

ROWLEY (on camera): Envisionworks says the financial costs of bad behavior vary, depending on how much productivity is lost and the cost to find and train new workers.

That's "Your Money," Laura Rowley, CNN Financial News, New York.

(END VIDEOTAPE)

HAYNES: They say money makes the world go round, and we'll get a glimpse of business around the world in "Worldview." From small business loans in Kenya to big business Chinese style, we'll look at enterprising individuals.

First a somber story from India. Food riots are breaking out in parts of western India, devastated by a deadly quake. Food warehouses are also being looted.

And as Satinder Bindra tells us, the hungry warn there could soon be a more serious outbreak of violence.

(BEGIN VIDEOTAPE)

SATINDER BINDRA, CNN NEW DELHI BUREAU CHIEF (voice-over): In the town near the earthquake's epicenter, a mad scramble for food by survivors who say they have not had a solid meal in five days. Crowds mob workers distributing relief.

The Indian government is being criticized for failing to look after tens of thousands left homeless, hungry and without hope after Friday's devastating quake.

UNIDENTIFIED MALE (through translator): When people come out in search of food, the police scare them away. They fire at us, beat us with sticks and call us thieves; all this while people are dying.

BINDRA: Here, hungry survivors try to commandeer a relief convoy passing through their area to another region, but they fail to stop the convoy. This man ends up getting a thrashing from the police. He says he did nothing wrong. His only crime: He's hungry. There have been food riots in several areas. UNIDENTIFIED MALE (through translator): No one here has anything to eat. People are in trouble. We are begging the government to give us food. And if we don't get food, people will start killing each other.

BINDRA: This man points to a warehouse. Once full of food, now it's empty, looted by the hungry.

Even before the earthquake, these people, the so-called "untouchables," the lowest in India's rigid caste hierarchy, had little. Now, with no work and no money, they're also among the last to get official relief.

UNIDENTIFIED MALE (through translator): For the first time in four days, we have received drinking water. Otherwise, people were drinking contaminated water. We still have not washed any of our clothes. They're still soaked in blood.

BINDRA: Some food from private organizations is beginning to get through, but people say it's their government that's deserted them.

UNIDENTIFIED MALE: Our government, nobody's coming over here to look after us. What is wrong with us? We are not Indian citizens?

BINDRA: India's prime minister has promised $100 million to help these people, but damage alone is estimated at $5 billion.

(on camera): No one here has any insurance. With their jobs gone, their homes destroyed and family members dead, many now want India to directly appeal to the international community to provide items like food, water and medicine, which are desperately needed here.

Satinder Bindra, CNN, Chakiwari (ph), western India.

(END VIDEOTAPE)

HAYNES: What do you think of when you think of Chinese fashion? Well, probably Mandarin collars or even silk clothes. But China, the most populous country in the world, is becoming sheik in the world of style. And part of the reason designer Vivienne Tam. Her interest in Asian history and pop culture influences her designs. Now she's transferring her talent to the printed page. Her new book takes a look at her homeland's influence on world style.

Here's Stacey Wilkins into Tam's visual memoir.

(BEGIN VIDEOTAPE)

STACEY WILKINS, CNN CORRESPONDENT (voice-over): She's one of the world's most successful fashion designers: Vivienne Tam, the woman who made Mao chic.

UNIDENTIFIED FEMALE: We're twins today.

WILKINS: Her bold images and sexy look have built a loyal following among celebrities, like R&B hip hop group Destiny's Child.

KELLY ROWLAND, DESTINY'S CHILD: Destiny's Child is totally in love with Vivienne Tam.

MICHELLE KNOWLES, DESTINY'S CHILD: She looks sexy.

BEYONCE KNOWLES, DESTINY'S CHILD: Just glistening and gleaming and dazzling.

WILKINS: Now Tam wants to dazzle a new audience with "China Chic." The 43-year-old designer spent the last three years sifting through thousands of images to publish the large coffee table style book. Each chapter offers an insight into different aspects of Chinese culture: food, furniture and, of course, fashion.

VIVIENNE TAM, DESIGNER: This book is about lifestyle. If I want to summarize it, it's more like bringing tradition together with the pop culture. I mean, it's like East meets West.

WILKINS (on camera): Vivienne Tam is using an untraditional approach to sell books. Her marketing strategy is to take "China Chic" out of the bookstore and bring it into high-end retailers where she's built a loyal fan base.

UNIDENTIFIED FEMALE: Thank you so much.

WILKINS (voice-over): Tam launched the book at a Tony (ph) Texas department store, where shoppers were eager to shell out $50 for the glossy volume.

UNIDENTIFIED FEMALE: I think it is a great book. It is very cool.

UNIDENTIFIED FEMALE: I've been a long-time admirer and purchaser of her clothes. And so to see her today was surprising and very fun.

WILKINS: Tam hopes the book will help expand her business to all kinds of Chinese-themed items.

TAM: I love to bring the "China Chic" alive. It's like a Chinese emporium, with home furnishing and food and textiles and furnitures, and everything from the book I bring to life. It's my dream.

WILKINS: Tam isn't scared to dream big. She came to the United States from Hong Kong in 1982 with virtually nothing. Last year, her company wracked up $40 million in sales. But she had to travel home to find out what makes China chic.

TAM: I meet a lot of interesting people through interviews and through my travel to China. And we talk about Chinese, Chineseness and things about -- what they think about China chic. And it's different people giving me different kind of answers. And the taxi driver, when I ask them about China chic, they will say, oh, I mean, we have no money, how can we be chic?

(LAUGHTER)

WILKINS: China chic means different things to different people. But to Vivienne Tam, the answer is simple: chic is what a person makes it, no matter what language is spoken.

Stacey Wilkins, CNN.

(END VIDEOTAPE)

KATHY NELLIS, CNN CORRESPONDENT: Next stop Kenya, an African nation and former British colony. Since gaining independence in 1963, Kenya has become one of the most prosperous and politically stable countries on the African continent. Many Kenyans earn their money off the land as farmers. Coffee, tea, fruit and vegetables are among the chief exports. Other major industries include food processing and textile manufacturing.

Despite Kenya's achievements, economic and social progress has slowed down lately, due in large part to the rapid growth in Kenya's population. But now, some would-be Kenyan entrepreneurs are getting some financial help from a bank specializing in small business loans.

Catherine Bond has this story.

(BEGIN VIDEOTAPE)

CATHERINE BOND, CNN CORRESPONDENT (voice-over): His clothes stall overflowing with new stock, leather-jacketed businessman Ernest Mwaniki looks as if he has it made. But he started out with nothing.

ERNEST MWANIKI, BUSINESSMAN: My starting business was selling tomatoes; you see, tomatoes in the market. And then immediately I shifted. I come to sell second-hand clothes. Immediately then I shifted. I come to new clothes.

BOND: He was, he says among the poorest of the poor. Now he considers himself rich, with seven employees, a child in private school and a brand new minibus...

MWANIKI: I'm very, very proud of it.

BOND: ... something he says his family never dreamed of. Mwaniki puts his success down to hard work, initiative and loans from a bank that used to be an aid agency.

KIMANTHI MUTUA, MANAGING DIRECTOR, K-REP BANK: And our purpose basically was to try and act as a catalyst for stimulating people's participation in their economic life. And we looked at small businesses and microenterprises as one area where intervention could actually help uplift people's lives.

BOND: K-Rep's microfinance opened in a Nairobi slum last year. The bank says it's mutually beneficial. However, small deposits give the bank access to more money. And whereas previously, its clients had to go to other banks to collect their loans, now they can come here. MUTUA: I think one of the biggest accomplishments for opening our own bank was that our clients were basically discriminated in the other banks. They were discriminated because they were depositing very little sums of money. And that meant a lot of work to the bank. And sometimes they would see that they would not be fitting in the profile of their clients. So they would even push them to a side and say: No, you wait until we finish with others.

It's very, very good.

BOND: Opening his sales book, Mwaniki says his first loans were for $200 to $300. In fact, when he was loaned more, he was so nervous, he hid the money in his trousers. Now he can comfortably get credit of up to $,1000.

MWANIKI: I am not all that educated. I am a standard eight. But I have talent. I have this gift of business.

BOND: Men, though, aren't the microfinance banks' typical clients. Women are. And it says, on the whole, they're better at repaying loans. Whether it's East African kangas or imported children's clothes, Ann Njeri says she uses her loans as working capital to buy good-quality clothing, which she says attracts more customers. But, originally, she used about $3,700 from the bank to get started.

ANN NJERI, BUSINESSWOMAN: In fact, it helped me to buy this all. Yes. So I bought this all at 280,000. And I didn't have. I used to rent. So it has really helped me.

BOND: She's part of a group of 30 clients, each helping out the other to pay loans back on time. Most of the K-Rep Bank, 16,000 clients Kenya-wide, chose to join in a group.

ISAAC CHEGE, BARBER: It's actually the best thing is to be in the group because they're the one who -- who, like, sign you up. They're the ones who guarantee you to be able to -- I guarantee them. They guarantee me.

BOND: With decent loans, he says he can get by in a harsh economic climate better, for example, than the competition next door. So without loans, where would he be?

CHEGE: (UNINTELLIGIBLE) because guarantee there's no way you can go and ask for 10,000 and get 10,000. Or you have some 10,000 you want to give me? You see, it's difficult, difficult to get money.

BOND: From barber shops to charcoal sellers and fruit sellers, the bank says lending people who work and live in some areas like this, amounts of money considered small elsewhere, is business, not charity.

MUTUA: I think that's the message of microfinance and perhaps the power of microfinance, is that you can actually accomplish development goals through commercially viable enterprises which are sensitive to poor people and are also financially self-sustaining. BOND: And in Kenya, poorer today than 20 years ago, this type of microfinancing may provide many with the only way out: a way to survive and perhaps even thrive.

Catherine Bond, Kawangare, Nairobi.

(END VIDEOTAPE) WALCOTT: OK, picture this: You have packing to do and the only container you have a is a wooden crate. Well, if you lived over 100 years ago, that would have been the only thing available. So count yourself lucky to live in the age of the cardboard box. That's right -- that is, if you find one just the right size.

Jeanne Moos introduces us to a couple of brothers who may have that problem all boxed up.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice-over): The only thing worse than having to pack and unpack boxes would be trying to move without having boxes to pack: From the homeless to the White House...

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: The boxes for the White House have already gone.

MOOS: ... everybody depends on the simple cardboard box.

WILLIAM J. CLINTON, FORMER PRESIDENT OF THE UNITED STATES: I spend all day every day unpacking boxes.

MOOS: But since the birth of the cardboard box 106 years ago, not much is new, until now.

(on camera): This is like origami.

UNIDENTIFIED MALE: Yes, origami.

MOOS: Two brothers, Richard and Bobby Kim, have come up with a one-size-fits-most box.

TONY CAVALLARO, AMPAK SPOKESMAN: Well, the greatest thing about the box is that it can make up to 32 different dimensions.

MOOS: All of these boxes came from the same size form, known as a blank.

(on camera): You know, he can make 32 different size boxes out of this.

UNIDENTIFIED MALE: Impossible.

MOOS (voice-over): Oh, yeah? Check out the box score.

(CROSSTALK)

It's all a matter of perforations and creases.

(CROSSTALK)

MOOS: Third box.

UNIDENTIFIED MALE: It's much different.

MOOS: Yes. No, they're really different.

(voice-over): And here's a fourth.

UNIDENTIFIED MALE: Just half the size of this one.

MOOS (on camera): Wow!

(voice-over): And a fifth, just right for a wine bottle.

UNIDENTIFIED MALE: This side, the other side, make like this.

MOOS: From a bottle box to one fit for a pizza.

If you follow the directions, folding along the proper crease, any idiot can do it.

(on camera): Hey, and then you go like -- whoops.

(voice-over): The Kim brothers have patented their design. No thinking out of the box for these two. Their favorite sport isn't boxing. It's Tae Kwon Do. Bobby stars in martial arts films like "Kill Line."

Bobby's been described as having "the fastest feet in the west." The Kims are working on a deal with a company called President Container to manufacture their one-size-fits-most boxes.

JOHN KASZTAN, VICE PRESIDENT SALES, PRESIDENT CONTAINER: Honestly, one of the best inventions I've ever seen in this industry.

MOOS: The new box hasn't yet caused a flap. Industry leaders we talked to hadn't heard about it. But the Kims are counting on success at the "box office."

Jeanne Moos, CNN, Moonachie, New Jersey.

(END VIDEOTAPE) HAYNES: OK, that's CNN NEWSROOM for today. Thanks for joining us.

WALCOTT: See you tomorrow. Bye bye.

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