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Newsroom/World View

NEWSROOM for March 16, 2001

Aired March 16, 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.

SHELLEY WALCOTT, CO-HOST: Hi, and thanks for making us part of your day. I'm Shelley Walcott. Here's what's ahead.

Topping today's news, it's the bears versus the bulls on Wall Street as investors wonder how low the Dow and Nasdaq will go.

Then, in "Editor's Desk," why business travelers could soon stay online while they're en route.

Next stop, "Worldview" and a turn in Italy. We'll check out efforts to restore the artwork of Michelangelo.

Then, in "Chronicle," "To Serve a Nation." Today we hit the trenches with the U.S. Marines.

A plunge in the stock market and a slowing U.S. economy causes a round of finger-pointing in Washington. Consumers' loss of faith in the economy has hit Wall Street hard. But many people, including President Bush, say they believe change may be on the way.

During the past year, the U.S. stock market has lost about $4.9 trillion in paper worth. This along with recent reports of tens of thousands of layoffs and a drop in retail sales is making consumers extremely nervous.

The U.S. Labor Department says the weekly average of people filing new claims for unemployment benefits during the past four weeks has reached a 2 1/2 year high. As workers are being laid off, they're having more difficulty paying...

(AUDIO GAP)

... the economy.

President Bush, meanwhile, is promoting his $1.6 trillion tax cut plan as a way to help the U.S. economy.

Congressional Democrats say U.S. President Bush is partly responsible for the economic downturn. They accuse him of talking down the economy to win support for his tax cut plan. The White House argues the slowdown began during the Clinton administration. Kelly Wallace looks at what the Bush administration is saying and doing about the economy in the face of these latest accusations.

(BEGIN VIDEOTAPE)

KELLY WALLACE, CNN WHITE HOUSE CORRESPONDENT (voice-over): Senior Bush aides say there has been no shift in the president's economic strategy, that despite the market gyrations Mr. Bush will continue to talk about the economy just the say he sees it.

ARI FLEISCHER, WHITE HOUSE PRESS SECRETARY: The president believes what's important is to be accurate, not political. And his statements have been accurate.

WALLACE: But Democrats, armed with charts and quotes, stepped up their charges that Mr. Bush and the vice president's comments since December about the slowing economy have fueled the economic downturn.

REP. RICHARD GEPHARDT (D-MO), MINORITY LEADER: What we're seeing is a talking down of the economy, the suggestion of a recession, the suggestion of a slowdown in order to justify what looks like it's going to be a $3 trillion tax cut.

WALLACE: The White House fired back, saying the economic slowdown started long before the president started talking. In fact, consumer confidence began falling back in October, declining every month since then, and now sits at the lowest level since June of 1996.

Still, political observers say what Mr. Bush is doing is unique and possibly economically damaging.

JAMES THURBER, AMERICAN UNIVERSITY: I can't remember a president who has talked down the economy, even though the economy was getting worse. They usually try to talk up the economy, give the psychological boost to those who invest in the market.

WALLACE: But Bush advisers say the president will keep expressing his concern about the short-term outlook, but also his optimism about the future.

And, aides say, the president's recipe for a healthy economy in the future continues to be threefold: tax cuts that are immediate and retroactive; new sources of energy to deal with the crisis out west; and free and robust trade to boost exports.

(on camera): The president is banking on that strategy, giving a boost to the economy and increasing consumer confidence, but at the same time facing a possible political price if his approach doesn't do the trick.

Kelly Wallace, CNN, the White House.

(END VIDEOTAPE)

WALCOTT: These are tough times not only for investors, but also for brokers and traders who must reassure and guide their worried clients. Some investors have never seen a down market quite like this.

Allan Chernoff follows a team of Merrill Lynch brokers through a typical day of strategy and client meetings and hand-holding over the phone.

(BEGIN VIDEOTAPE)

RICHARD WALD, BROKER, MERRILL LYNCH: Acknowledge people's frustration, but this is a time of tremendous potential. We have to get in front of as many top clients as we have.

ALLAN CHERNOFF, CNN CORRESPONDENT (voice-over): A stressful time to be responsible for a client's money in the market.

DAVID NOONE, FINANCIAL CONSULTANT, MERRILL LYNCH: And you are, you know, somewhat energetic on the phone with them, happy to be speaking with them, then their stress level decreases.

JOHN O'NEILL, BROKER, MERRILL LYNCH: This environment has shown clients that you really can't do this alone. You have to have some professional help.

CHERNOFF: John O'Neill and Richard Wald have been through market turmoil before. So these veteran brokers, part of a team of eight, view Wall Street's plunge as an opportunity to cement client relationships and pick up new assets.

O'NEILL: We'll add GE, but we're going to buy it via Honeywell.

CHERNOFF: The Merrill team serves wealthy individuals. A typical account, well over a million dollars.

O'NEILL: There's about $10 million here.

CHERNOFF: These days even the wealthy are anxious, so convincing clients to put money into a declining market requires brokers to be part financial expert, part psychologist.

WALD: Yes, you're down, you know, you're stocks are down, but you're not down anywhere near the 60 percent of the Nasdaq index.

It would be incorrect of me to say that clients aren't nervous. You feel it in their voices. There's a certain amount of apprehension, there's a certain amount of stress. But it's not panic.

The S&P is down 24 percent from its high. So, you know, we don't know where the bottom is, but we've got to step in a little bit, right?

CHERNOFF: It's not easy having a client invest in stocks as prices continue sinking, and it takes a toll on even the most seasoned brokers.

WALD: You're only human so it has to seep into you. It has to. Your job, they're paying you to have an opinion. They're paying you to have some type of long-term focus and to keep them grounded. CHERNOFF: O'Neill and Wald rely on asset allocation for their investment strategy. So when well-diversified clients want to bail out of technology stocks, the brokers point out the decline in prices has already cut the clients' exposure to that sector.

O'NEILL: I've got to tell you, this is the time to add to stuff like that. You have to take the emotion out of it and say, look, we're underweighted in that kind of investing.

CHERNOFF: Between them, Wald and O'Neill have more than 30 years of experience in the market. They've guided clients through previous plunges and continue to advise that this shakeout will pass.

WALD: And we've got to get in front of people and we have to acknowledge the frustration, but stay optimistic.

CHERNOFF: Allan Chernoff, CNN Financial News, New York.

(END VIDEOTAPE)

WALCOTT: And we'll continue to take care of business next month. That's when we'll bring you "Life Skills: Credit and Debt." Learn the importance of maintaining good credit, and find out how to stay out of debt. That's coming up April 11. And two days later, we'll teach you everything you ever wanted to know about the dreaded T word. Yes, taxes. Find out about the U.S. income tax on April 13.

(BEGIN VIDEOTAPE)

BOB FINICAL, BRANSON, MISSOURI: My name is Bob Finical. I'm calling from Branson, Missouri. And I would like to ask CNN, is there a specific law which requires Americans to file income tax returns?

ROGER COSSACK, CNN LEGAL ANALYST: There is a specific law which requires us all to file an income tax return, and that's called the United States Tax Code.

Now, interestingly enough, if you file a false return, that's a felony. But if you don't file your return at all and just don't turn one in, that's a misdemeanor.

Now, I'm not suggesting that you do either one of those, but the U.S. Tax Code is that big, thick book which is a lot of regulations. And people have even suggested that perhaps we get rid of it and just get one single flat tax. But no matter what you decide, it's the United States Tax Code that requires us to file our income tax and file it on time.

(END VIDEOTAPE)

WALCOTT: You know, it's really amazing how quickly a new technology can become a necessity. Take e-mail, for example. Just 10 years ago, most business people had never even heard of it. And today, most would be lost without it. That's why so many feel out of touch when flying, especially on long crosscountry or transcontinental flights. As Rick Lockridge tells us, that lost-in-flight feeling may soon be a thing of the past, thanks to even newer technology.

(BEGIN VIDEOTAPE)

HUGES SIMARD, BUSINESSMAN: I spend a lot of time on airlines, yes.

RICK LOCKRIDGE, CNN TECHNOLOGY CORRESPONDENT (voice-over): Huges Simard, road warrior, hates being out of e-mail range while flying.

SIMARD: If I need an answer right away, I can't get it.

LOCKRIDGE: The Toronto businessman didn't know he was booked on an Air Canada test flight for a new onboard Internet service. But when reporters started pulling out their laptops and connecting to the Tenzing Portal, which supports e-mail and limited Web surfing, we invited Hugh to check it out, too.

SIMARD: Well, I had heard, generally speaking, that this was coming online soon, that we should be able to send mails during our flights. But this is the first time I actually tested it. For sure, if I can send mail, it will save me a lot of time.

LOCKRIDGE: Tenzing's Alan Pellegrini watched the test like a nervous parent as the rest of us logged on via satellite to our e-mail accounts and a small selection of Web sites.

ALAN PELLEGRINI, WWW.TENZING.COM: Instead of dialing up your Internet service provider on the ground, you're making a dial-up call to an ISP on the aircraft, essentially, which is a Tenzing ISP.

LOCKRIDGE: The service is pretty pokey right now, but the company says faster technology is in the works. Air Canada is currently outfitting its fleet. Cathay Pacific Airlines will follow this spring.

Meanwhile, here comes a high-speed competitor: Connexion by Boeing. Seen here in an Earth-bound demo in Las Vegas, Connexion is touted as the first broadband, airborne Internet service.

SCOTT CARSON, PRESIDENT, CONNEXION BY BOEING: It will allow you to work just the way you work in your office on those hours where you're on the airplane.

LOCKRIDGE: Connexion's speed advantage comes from the satellite- tracking antenna under these bulges. The high-speed hookup will give travelers not only e-mail and Web access, but streaming video, TV news and sports, video conferencing. There will be no getting away from the boss once this technology starts rolling out.

Boeing hopes to get it off the ground late this year.

(on camera): Pricing is still up in the air; $15 a flight is one figure that's been floated. But the providers are certain they'll find plenty of travelers who are willing to pay a premium to stay online while they're en route.

For "SCIENCE & TECHNOLOGY WEEK," I'm Rick Lockridge.

(END VIDEOTAPE)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Celebrate Women's History Month with a virtual stop at the National Museum of women's history. The site features an exhibit on women's suffrage. Certain colors were symbolic to the movement. Find out why a gold pen was used to sign the triumphant 19th Amendment, or why Joan of Arc became the patron saint of women. Learn how women use traditional images of motherhood to promote their cause, and find out more about the two primary organizations that battled to lead the suffrage movement in the United States. An online quiz will test your new knowledge about how women obtained the right to vote. Go to CNN.com/online for a link to this and other sites.

I'm Curt Casting (ph) and that's what's online.

(END VIDEO CLIP)

WALCOTT: In our "Desk" today, you heard about Internet technology, and that theme continues in "Worldview." You certainly know the Internet will play an increasingly important role in your future, but did you know it can also provide an intriguing link with the past? We'll take you to Italy where computers and culture go hand-in-mouse.

Italy is known for its cultural heritage. Countless tourists travel to Italian museums to see some of the world's best known art. Much of the artwork in Italy was created by legendary artists, like Leonardo da Vinci, Raphael and Michelangelo.

Michelangelo was one of the most famous artists in history. He was born in 1475 and died in 1564. Michelangelo is perhaps best known for his renditions of the human body through painting and sculpture. His artwork is striking. Art experts say the figures can appear both animated and restrained and seem to possess great spiritual energy.

Among these great works, the Sistine Chapel. It's a painting on the arched ceiling of one of the most important churches in the Vatican and shows God creating the sun and the moon. Another masterpiece, the statue of David, a sculpture of the biblical Israeli kind.

Michelangelo's art is hundreds of years old and tends to show its age.

Denise Dillon reports on a restoration project that aims to preserve this art for generations to come.

(BEGIN VIDEOTAPE)

DENISE DILLON, CNN CORRESPONDENT (voice-over): Michelangelo's Moses. It has been called the most extraordinary statue made in modern times. The figure of Moses carrying the tablets of the Ten Commandments is in the church of San Pietro in Vincoli, where it has been since it was completed in 1516.

After five centuries, the statue is starting to show its age. Moses beard is a little worn, and it is in desperate need of cleaning. So it is being restored, and you'll be able to see the process live online.

A view of the entire restoration will be available 24 hours a day by Web cams.

ALBERTO ABRUZZESE, ARTISTIC DIRECTOR (through translator): With this project, we celebrate not only the survival of the statue of Moses, but also a new life for cultural wealth in general. We entrust to the process of restoration the task to give us back the artwork as it was meant to be in the mind and in the desire of the artist, but also through the media we have today.

DILLON: The restoration will not be easy. The stains on the marble are very visible. They were left behind by chemicals used to make copies of the statue.

ANTONIO FORCELLINO, RESTORER: It will never be as it was when Michelangelo made it. To take out the stains from marble is too risky an operation, so we'll limit ourselves to lower the tone of the stains themselves.

DILLON: The $300,000 restoration project is expected to take about nine months.

Denise Dillon, CNN.

(END VIDEOTAPE)

ANNOUNCER: Teachers, make the most of CNN NEWSROOM with our free daily classroom guide to the program. There you'll find a rundown of each day's show so you choose just the program segments that fit your lesson plan. Plus, there are discussion questions and activities, and the guide highlights key people, places and news terms. Each day, find hot links to other online resources and previews of upcoming "Desk" segments. It's all at this Web address, where you can also sign up to have the guide automatically e-mailed directly to you each day. It's easy, it's free, it's your curriculum connection to the news. After all, the news never stops, and neither does learning.

WALCOTT: You know, to become a United States Marine, one must endure one of the toughest basic training programs of all of the branches of the U.S. military. So we wanted to find out why young people would want to put themselves through such grueling physical and emotional challenge.

Our Tom Haynes followed a group of recruits from the very beginning as they embarked on an experience that would change their lives forever.

(BEGIN VIDEOTAPE)

RASHANNA GREEN, AGE 18: After I swear in, this is what I'm going to be doing for a long time. I'm pretty sure it's going to be hard, but for some reason I'm not nervous yet. I think it's going to hit me when I get on that bus.

UNIDENTIFIED MALE: I can just feel it in my blood. We're going to be there any minute. Let me just wipe this smile off my face. Don't smile. No more smiling for us, guys. No more smiling for us.

STAFF SGT. TROY BELLE, U.S. MARINES: From here on, the last thing out of your mouth will be "sir." Do you understand me?

UNIDENTIFIED RECRUITS: Yes sir.

BELLE: Louder. I said do you understand me?

UNIDENTIFIED RECRUITS: Yes sir.

BELLE: Get out of the van, now. Get out of there now!

UNIDENTIFIED FEMALE: Head out and straight to the front.

BELLE: The minute you step off that van is business. It's time to grow up.

Do you understand me?

UNIDENTIFIED RECRUITS: Yes sir.

BELLE: You've accepted a challenge and it's time to face that challenge.

Open it. Open the door.

Hurry up. Give me a count of four now.

UNIDENTIFIED MALE: I can't talk right now, but I'll get back to you later. But I'm here safe, OK?

BELLE: What we teach here is teamwork.

Sit in the chair.

It starts off with the haircuts, then moving on to hygienics where they get the first initial issue of uniforms, all the basic necessity hygiene equipment for the time that they're here at Paris Island.

UNIDENTIFIED MALE: Let's go, let's go, let's go, let's go, let's go...

KURTIS WEINGARTEN, AGE 21: Never in my life had I been in a situation where it was the second your eyes opened in the morning it's just go. CAPT. JOHN PICUDELLA, U.S. MARINES: Initially, there's a lot of shock factor in recruit training. These young men come in and they know to a certain extent that they're going to be shocked, putting them in a stressful situation. Recruit training is a highly stressful environment.

WEINGARTEN: Chow time is basically a little bit of time out of the day. It's get in there, eat your chow and get out and do what else is on the agenda for the day.

LT. COL. ROBERT CHASE, U.S. MARINES: This is actually training Day 1 for them. And today for the first time, they're out doing their organized physical training that will occur throughout the training syllabus. They're out here, they're getting constantly corrected.

UNIDENTIFIED MALE: Get up the board now. Now!

CHASE: So right now they're confused, and still a little bit scared, unsure. The ultimate goal here is to transform them into Marines. My drill instructors take that as an ominous charter. I mean, they have to do this. This is serious to them.

AQUILAS ZEPHIR, AGE 17: Since I've been here, I've found out the meaning of a Marine. A Marine is a warrior. You're trained to be a warrior. You're not trained to be this little, oh, look, I'm a Marine, I'm in a uniform, I made it. You're trained to be a warrior.

UNIDENTIFIED MALE: This is it. This is it. Go Wade. Run Wade, run.

STAFF SGT. ROXANNE WALLACE, U.S. MARINES: We're doing close order drill today. All the movements that they know now they've been taught the first 10 training days. The basic that's important is discipline. So it's discipline and to follow and obey commands. The drill instructors give the commands and they have to know how to react off of it with a lot of intensity.

And when I say forward, you're going to go, column left, right.

The constant adjustment is so that they know where their arms are supposed to be, that they know how to do the movement correctly. We do it quickly and we do it firm.

WILLIAM JONES, AGE 18: It's M-16 A-2 service rifle, the basic rifle. Every Marine is a rifleman.

WARRANT OFC. JIM FRALEY, U.S. MARINES: Any Marine, regardless of what his MOS is, needs to be able to take that rifle into combat and, number one, be able to defend himself, and, number two, be able to go on the offensive and actually take out the enemy objective. They're about halfway through their training evolution right now. They've been out here for a little over six weeks.

GREEN: This recruit has never shot her weapon before until now. It's invigorating, sir. It's the most fun that this recruit's had since she's been here. GUNNERY SGT. ROBERT BROWN, U.S. MARINES: We let them explore the confidence course. The purpose for the confidence course is to build the recruit's confidence, obviously, and both physically and mentally to have them overcome the obstacles out here.

WEINGARTEN: You climb that stairway to heaven, look down at the top, you think, wow, I'm this high up. That's the biggest thing that I think this recruit's learned in recruit training, is confidence.

HANNIBAL MATTHEWS, AGE 20: This recruit's in a lot better shape than he was when he came here. This recruit's a lot more confident. Feels like he can conquer the world if he really wanted to.

HAYNES (on camera): How come you keep referring to yourself as this recruit?

UNIDENTIFIED MALE: While these recruits are in recruit training, these recruits refer to themselves as recruits. We're not "I"s or "me" or individuals anymore, we're together, we're a team now.

UNIDENTIFIED MALE: The Crucible is the finally event. It's basically a culminating event. Fifty-four hours long, we deprive them of rations. They're allowed four hours of sleep a day.

STAFF SGT. RONALD GEISLER, U.S. MARINES: The objective of the Crucible is to put them in an environment they're not used to and make them react to it just like in combat. It's going to challenge them. They're going to be tired, they're going to be hungry, they're going to be sore.

WILLIAM JONES, AGE 18: You feel real good. It's early in the morning. We have our senior drill instructor leading us.

UNIDENTIFIED MALE: Recruits on their first day or their last hour on the Crucible, we want to keep the momentum going. We're motivating the recruits, keeping the intensity level up high so when they come on the course they attack the course.

You're going to be tearing this course apart, you understand that?

UNIDENTIFIED RECRUITS: Yes sir!

UNIDENTIFIED FEMALE: You have to be patient with each other. You have to learn to work together and settle your differences without arguing and wasting a lot of time and energy.

WALLACE: Puts them in a different frame of mind. It puts them under a lot of stresses that they don't really encounter on a day-to- day basis. They're going to have to have discipline, a positive mental attitude in order to accomplish this Crucible.

UNIDENTIFIED MALE: What you're seeing right now is the Event 6 of the Crucible. This is to simulate combat.

UNIDENTIFIED MALE: This is Day 2. This is when they're getting hit. This is where the fatigue is getting them, the sleep deprivation is getting them, hunger is probably getting them pretty good.

HAYNES: Do you have any idea what time it is right now or what day it is?

UNIDENTIFIED MALE: No.

HAYNES: What keeps you going?

UNIDENTIFIED MALE: Knowing that I'll be a Marine tomorrow.

UNIDENTIFIED MALE: All we have to do is move the ladder to the other side. As time has been going on, it seems like the lack of sleep is getting to everyone. The teamwork is starting to break up a little.

WALLACE: They're tired, they're tired. And the only thing that they have going for them right now is the motivation.

CHASE: They know that they have already made if farther than most and they're going to make it. They know they're going to make it. There's some doubts, but they're not going to quit. The drill instructor's not going to let them.

All their life, a lot of these kids have been given things. Now they've earned this. It's something that can never be taken away. It tells you that you have joined an elite group of people. I mean, these are average Americans doing extraordinary things. They have earned it. And to get it from their drill instructor, to get it from the person that has been their tormentor is phenomenal.

UNIDENTIFIED MALE: You made it. Good job. Good job.

You're proud. I helped train that person to become a United States Marine.

UNIDENTIFIED MALE: Standing before you today is America's future. They have pushed, they have been prodded, they have low- crawled, drilled and double-timed all over every square inch of this island for the right to stand before you today as United States Marines.

UNIDENTIFIED MALE: This Marine's mama's actually proud of this Marine for the first time in his life.

UNIDENTIFIED MALE: He wrote me a letter and told me he wanted to be like his grandfather, serve his country.

UNIDENTIFIED FEMALE: You can't explain how proud you are of yourself, how everybody feels about what you've done. It's an amazing feeling.

(END VIDEOTAPE)

WALCOTT: And congratulations to all the graduates. They must feel a tremendous sense of accomplishment, and deservedly so.

For now, that's it. Have a great weekend. We'll see you Monday.

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com

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