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U.S. Makes Case Against Iraq; Doctors on Strike Because of High Malpractice Insurance Costs; Debate on Affirmative Action

Aired February 8, 2003 - 15:00   ET


JACK CAFFERTY, HOST: Today on IN THE MONEY, fuel for debate as the United States makes its case for war against Iraq. We'll hear from an author who says it's not about the oil.
Plus, docs on the rocks. Doctors walking off the job as the cost of malpractice insurance rises. See what that means for your health and your bank balance.

Also ahead, degrees of difficulty. Today's college kids are tomorrow's work force. We'll look at how affirmative action on campus could affect the companies that drive your 401(k).

Welcome. I'm Jack Cafferty. This is IN THE MONEY. Secretary of State Colin Powell went to the United Nations this week making Washington's case for a war against Iraq. He rolled out U.S. intelligence, complete with audio and visual aides. Powell argued that Baghdad is making nice with al Qaeda and running a con game on the U.N. weapons inspectors.


COLIN POWELL, SECRETARY OF STATE: Everything we have seen and heard indicates that instead of cooperating actively with the inspectors to ensure the success of their mission, Saddam Hussein and his regime are busy doing all they possibly can to ensure that inspectors succeed in finding absolutely nothing.


CAFFERTY: Iraq, as expected, denied all of Powell's charges, but the British backed the secretary of state, and the French, well, they're the French. Like Germany, China and Russia, they want inspectors to stay in Iraq and they want American armed forces to stay out, at least for now.

Now, if you're wondering what all this has to do with your money, you haven't checked the price at the gas pump lately. The talk of possible war is one factor driving gasoline costs ever higher, and some countries charge the United States attacking Iraq is really all about taking control of the second largest crude oil fields on the planet, next to Saudi Arabia's.

Our next guest thinks the White House has any number of reasons for hitting Iraq, and oil is not one of them. Peter Beinart, the editor in chief of "The New Republic," joins us now from Washington. Welcome, Peter. Nice to have you with us.


CAFFERTY: So why isn't it about the oil at the end of the day, assuming that we can make some sort of reasonably hasty action out of this war with Iraq and wind up occupying the country? Isn't the large availability of crude oil simply a side benefit to this war against terrorism?

BEINART: It's a secondary benefit. I don't think it's the motivation for why this war is probably going to happen.

First of all, I think if you look at the oil industry, you'll see that the real motivation over the past few years, the real push by the oil industry has not been for war against Iraq, it's been to lift sanctions against Iraq, because Saddam Hussein has shown that he's quite willing to do business with U.S. oil companies and increase foreign investment or to pump more oil if the U.S. would lift sanctions. If the Bush administration really were focused mostly on Iraqi oil, I think they would be doing what, in fact, they were doing before September 11, which was focusing on slowly reducing the sanctions.

After September 11, they've switched gears completely and started focusing on this war, and I think it's really because of the shock of September 11 and security concerns.

CAFFERTY: What was it about September 11 that caused the focus to shift to Iraq? After all, September 11 was perpetrated by al Qaeda, who were holed up in Afghanistan, and Iraq, at least as far as we know now, had absolutely nothing to do with it?

BEINART: I think that there were people, there were a small number of people in the Bush administration who felt that Iraq was a threat even before September 11. But what September 11 did was vastly strengthen their hand within the Bush administration, because everyone looked at what happened on September 11 in the Bush administration and said oh, my goodness, the next time this happens, it could be done with weapons of mass destruction.

CAFFERTY: All right, Peter, we've got some panelists on the program with me that I'm going to introduce now, and they probably have some questions as well. Andy Serwer is a regular here, he's editor at large at "Fortune" magazine, and partner in crime on "AMERICAN MORNING WITH PAULA ZAHN," where we do our thing in the mornings.

Marion Asnes is a frequent guest on that program, a regular here, senior editor at "Money" magazine, and Andy's colleague at "Fortune," Justin Fox. It's nice to have the three of you with us. Take a shot at the questions being raised by Peter and whether or not, in fact, the Bush administration, which has a history of cozy relationship with big oil, i.e. Halliburton and some of the other names that crop up when you look back at the administration, why this isn't a factor, perhaps, in their decision to go to war against Iraq? JUSTIN FOX, FORTUNE MAGAZINE: My thought is, even if you're willing to buy that this isn't some oil company scheme, that's why we're going in, we wouldn't really care if the Middle East weren't full of oil, would we, or if we were all able to drive our cars on daisies or something. I mean, there are a lot of places in the world run by evil people where we are aren't invading, right?

BEINART: Yes. That's true. Obviously, oil is part of the Middle East's larger significance, but just because oil is the reason -- one of the big reasons, aside from Israel, for instance, that the United States cares about the Middle East, that doesn't necessarily mean that we would invade. After all, we weren't seriously contemplating invading Iraq for about a decade, after the Gulf War, before September 11. So, sure, oil is always in the picture when you're talking about the Middle East, but just because you have a concern for oil doesn't necessarily mean you go to war. There are many other ways of trying to get access to those resources.

MARION ASNES, MONEY MAGAZINE: Now, another question that I had is, why do you think it was that that if there is this compelling national security interest and this compelling safety interest on the -- for the American people, why did the government take so long to pull out any real evidence? Do you think they were just bluffing until they actually gathered some?

BEINART: No, my suspicion would be that they knew that once they revealed the evidence, they'd also reveal to the Iraqis the method by which they gathered that intelligence. Now, for instance, Iraqis know much more after Powell's presentation about what we know about them. And so I think they recognize that if they presented that too early, it would shut down their ability to gather more intelligence.

ANDY SERWER, FORTUNE MAGAZINE: I mean, let's not kid ourselves, though, here, I mean, oil is very important. It's a big part of this equation. And people don't realize, we still get a lot of oil from Iraq. We're looking to get maybe twice as much oil from Iraq after this war is over. The price of gasoline is over $1.50 a gallon. It's up 8 percent this year, up over 40 cents a gallon from last year.

FOX: But the oil companies can't mind that.

SERWER: And it would be a huge benefit for the economy, Justin, if this war is over and the price of oil plummets. It's like a noose, it's like a ball and chain around the U.S. economy's foot or neck, or wherever the heck it is.

FOX: Right, and this whole conspiracy theory idea that it's the oil companies -- they are raking it in right now because oil prices are so high.

ASNES: But they're really not raking it in right now, because there's a limited amount of elasticity that they have even now in how much they can charge, and their profit margins are getting squeezed on the processing end.

But I would hazard that a lot of the price hikes that we're seeing really have to do more with Venezuelan problems than they do with the Middle East.


CAFFERTY: Peter, let me ask you this. What about the idea, and I saw this the other day and it got me to thinking, the idea that economies in the world, such as, for example, China, are growing by leaps and bounds. Crude oil is a finite commodity, there is only so much of it in the ground. As other economies like China, like India, like others that are similar begin to grow and expand and develop, there is going to be an increasing demand on the oil supplies, particularly the large deposits in the Middle East. And that having a permanent presence in that part of the world as a result of whatever military action may take place against Iraq is probably not a bad strategic move, looking down the road a ways.

BEINART: You know, I think that there is clearly, the Bush administration is concerned about having other access -- other places to get oil. You've seen they've worked on relations with Russia, they've focused more attention on potentially getting oil from west Africa, but again, I don't think that they're looking at potential threats from China and India as the reason to go to war with Iraq.

The truth is that for the foreseeable future, at least, there's plenty of oil for the United States to buy.

ASNES: Yes, but...

SERWER: Just to follow up on what you were saying, though, Marion, I mean, there's plenty of oil out there right now. There is a lot of supply. The price of oil is way up because of fears. And in Venezuela, there's a little fear factor there with the strike.

ASNES: That's right.

SERWER: But the fear of the war is what's driving the price up. Even now, today, we are awash in oil; this would just make the situation this much better.

ASNES: But -- and that is the assumption of the Washington watchers that I speak to. They're all predicting that we're going to go to war...

SERWER: You speak to Washington watchers?

ASNES: Yes, believe it or not, I do, it's part of my job. And they're all saying that we're going to go in, we're going to go in hard and fast, and we're going to be awash in oil the minute, to use your words, the minute we win.

BEINART: But I think, actually, I think other people who look at Iraq's oil industry say that it will actually take quite a bit longer than that, that there really hasn't been a lot of significant foreign investment. It's going to take quite a few years to really ramp up Iraqi production to the kind of six million barrel level that some people think is possible.

CAFFERTY: Peter Beinart, who is the editor-in-chief of "The New Republic." Thank you for joining us...

BEINART: Thank you.

CAFFERTY: ... this Saturday on our discussion here on IN THE MONEY concerning the reasons we may, in fact, be going to war in Iraq.

Coming up on the program, as we continue, caught in the safety net, huge payouts and pain and suffering lawsuits driving up the rates for malpractice insurance to the degree that some doctors are throwing in the towel, saying I just can't afford to practice medicine anymore. We'll talk about it, coming up.

Plus, class action corporations taking sides in the fight over affirmative action at colleges. The administration saying the admissions policy at the University of Michigan is unconstitutional and discriminatory. We'll find out what it all means when you put money on a company's future and how some of America's biggest blue chip corporations view the court battle that's headed to the Supreme Court of the United States.


CAFFERTY: If you think you pay a lot to see your doctor, think for a minute about what your doctor pays to see you. The American Medical Association says the price of malpractice insurance is at crisis levels in 12 states. Just this week, thousands of New Jersey doctors went out on strike over the price of their premiums, and they're just some of the physicians around the country who would rather walk out or take off than pay up. Some of them say they just simply can't afford it.

The AMA says Florida's premiums are the most costly in America, followed by Nevada and Ohio. What you're looking at is the amount that OB-GYNs in those states paid last year for malpractice insurance. Look at Florida, $210,000 premium. You've got to deliver a lot of babies to cover that bill.

One reason for the rising expense, big pain and suffering awards in malpractice lawsuits. One other little bit of information, there was a report out recently that there were some 1,500 surgical instruments left inside...


... year, so maybe there's something to some of this malpractice stuff. Some people treat malpractice suits like a trip to Las Vegas, though, betting on winning a big jackpot by just simply threatening to sue for millions and getting the doctors' insurance company to settle for something less. In the end, who winds up paying?

Well, let's bring the panel back in, and take a shot at this. It becomes, I guess, a bit of a circular argument. It's the lawyers, it's the insurance companies, it's the doctors.

ASNES: It's the lost medical instruments. That's what's costing all the money. CAFFERTY: I mean, that's funny, but it's a true story.

ASNES: That and the fact that medical mistakes are responsible for, what, 100,000 death a year? This came from the National Institutes of Health. So there is a real problem here.

FOX: Well, life's risky, though. You go to the doctor, they cut you open. It's dangerous.

CAFFERTY: You stay out of hospitals, people die there. That's a line from an old movie, right? People get sick and die there.

ASNES: That's right, they certainly do.

CAFFERTY: What about -- you know, the doctors have done one thing, it seems to me, and they've effectively taken the debate away from the fact that traditionally critics would suggest the AMA has not done a good enough job policing the bad doctors. They get a pass, they get a wink and a nod. People look at other way and they wind up back in practice someplace, causing this whole kind of proliferation of cases that are driving these premiums. Is that valid?

ASNES: And there's been a number of scandals lately about that. And according to the Association of Trial Lawyers, 54 percent of malpractice suits are caused by 5 percent of doctors. So yes, there's a real issue there about who is allowed to practice.

FOX: Well, if you had to choose between keeping the doctors around and keeping the trial lawyers around, who would you pick?

CAFFERTY: Now, there's a debate.

ASNES: Well, that's for sure.

SERWER: I want to raise one point here. I'm really ticked off at these doctors who are going out on strike. And it reminds me -- do you remember when AOL and Disney got in a spat about Disney paying AOL, and then AOL takes Disney off the air in New York City? That's cable TV. They punish the customers. That's what the doctors are doing here, they are punishing us, they're trying to get attention from customers, from patients. Hey, it's the insurance companies...


SERWER: Leave patients out of it. You're doctors, you got a problem with the insurance companies, you go at each other, fight, go and fight all you want, but don't take it out on the patients.

CAFFERTY: Now, in fairness, we should clarify that they are not turning away emergency cases. It's elective stuff, like, you know, the little neck job I was thinking about pulling off for a while.


CAFFERTY: But emergency cases they're seeing. But they're not taking routine physical appointments and things like that. ASNES: That's right.

One other thing I'd like to point out, is that there's a difference between a bad outcome and malpractice. And that's why we all have to sign those godawful informed consent forms whenever we do anything that involves something more than looking up your nose or whatever. But the thing that...

FOX: Would we have to sign them to go on this show?

ASNES: Sadly, no. But maybe there needs to be two funds. Maybe there needs to be a general liability fund for bad outcomes, because people suffer in bad outcomes and it could be like no fault insurance. And then you take the really stupid errors, like the lost medical insurance, and then you do penalize the doctors. You screw up, you pay up.

CAFFERTY: What about President Bush's call for a cap on damages at $250,000?

SERWER: Well, California's got that already. Listen, California's got that. People out there and the doctors out there say it's been very successful. Over time, it's kept premiums down.

CAFFERTY: Yes, they pay much less.

SERWER: I object to that $250,000 cap personally. Some doctor cuts your arm off, who is the government to tell you that you can't sue for more than $250,000? I mean, where do they get off on that? I think that the legal system, you know, let it play out in the courts.

CAFFERTY: That's what's happening now, and juries are awarding millions and millions of dollars...

SERWER: So be it. Who is going to put a value on my arm?


FOX: But are the juries really getting that much worse? That's what I don't -- and it's the whole push for tort reform now, too. I remember 10 years ago, everybody was freaking out about how liability lawsuits were driving American business out of business. And I think American business made a lot of money in the '90s, and now they're all...


SERWER: It's the lawyers' fault. Now, these lawyers are out of control, but it's funny, Justin, you're right. During the 1990s, I didn't hear about how the lawyers were destroying the economy. Did you?

CAFFERTY: And it's not just about medical malpractice. You mentioned that there are allegedly frivolous lawsuits that are cropping up all across America, whether it's suing the McDonald's because the coffee's too hot or, you know, I slipped in front of it, whatever. And so the debate, like you say, now that times are tough, it's like what are we going to do about these lawyers and these juries that are awarding all this money, because, hey, the big companies don't have the profits on the bottom line to just pay those things and keep on trucking.

We've got to leave it there. We didn't get it solved, but it was an interesting chat.

Still ahead on IN THE MONEY, how to create a workplace that looks like America. Some U.S. companies say building diversity begins in college. And we'll tell you what that might mean for your money.

Plus, Yankee go home. Find out why the board of one of America's biggest and oldest car makers would be more home in Dusseldorf than in Detroit. We'll explain.


CAFFERTY: Stock of the week, DaimlerChrysler. Chrysler coming off a strong 2002, as the entire industry is. Profits at DaimlerChrysler increased so much, the company is planning to boost dividends by 50 percent. But the good days may already be over there. Chrysler had a rough January, sales falling 12 percent. And American investors are beginning to look at DaimlerChrysler as a purely foreign investment play, now that just one American sits on the board of that company.

So we'll get the panel in on this. Chrysler's the stock of the week. Would you buy some shares at the current price, and what sort of a future do you see for the company?

SERWER: You know, Mary, come on. She knows this, she loves them.

ASNES: No, I didn't say I love the stock, because I have absolutely no comment on the stock, but I do know something about what the company's up to. And they are a German company now. The Germans bought them. So it sort of makes sense that they'd be, you know...


FOX: ... shares in the foreign company, I mean, because the euro is going up.

ASNES: That's right, the dollar is going down, so that's one good thing, but Chrysler is very unhappy about the falling sales. Their plan, though, is to reposition themselves, turn themselves back into the luxury brand that they were when we were all little pee-wees, and they're bringing out...


CAFFERTY: ... with the big tail fins?

ASNES: Sadly, no, but they're bringing out a couple of new cars this spring, the Pacifica, which is their big hybrid wagon, is about to come out at the end of this month.

SERWER: It's a very crowded market. I mean, this is a minivan company.

ASNES: It's a very crowded market.

SERWER: This is a company that makes minivans.

ASNES: But Andy, that's the segment of the market that makes money.

SERWER: I know, I've got nothing against it, I just don't want to drive a minivan. I don't want to be seen in a minivan. There are so many luxury cars out there. They're really going to compete against Jaguar, (UNINTELLIGIBLE) and everybody else?

ASNES: Well, they've already got the Mercedes-Benz, but yes, they want to compete against Jaguar.

FOX: They'd rather compete against Jaguar than Hyundai. I can understand that.

ASNES: Absolutely.

CAFFERTY: There are people around "Fortune" magazine who suggest you're a minivan kind of guy.

SERWER: Not to my face.

CAFFERTY: No, no, not to your face.

ASNES: Minivans aren't that bad, not that I would drive one.

CAFFERTY: What does Daimler-Benz do with the Chrysler brand? If you look back, was it a mistake for them to come over and buy this company to begin with? Did they make a bad decision when they came here to buy it?

FOX: If you look at how the other German car companies have done, and they've just been going like gangbusters the last few years, yes, I mean, BMW, Porsche, Volkswagen have all just been tearing it out. And DaimlerChrysler had an OK year this last year, but they have definitely underperformed the rest of the German industry.

ASNES: And even Mercedes is underperforming its German competition. They're the only one that hasn't had rocketing sales. BMW, Volkswagen, Audi, their sales have taken off like crazy and Mercedes has not.

CAFFERTY: So perhaps the fault lies in the corner office someplace if Mercedes is having trouble, along with Chrysler, then maybe it's not just a cultural problem or a cultural clash that they couldn't -- Daimler-Benz couldn't run an American car company. Maybe they're not running the German car company so well either.

SERWER: Isn't that one of your favorite CEOs who runs this company?

CAFFERTY: Jurgen Schrempp.

SERWER: You love saying it.

CAFFERTY: What a great name.


CAFFERTY: Some of the usual suspects take center stage in today's scandal watch. Former Enron CFO Andrew Fastow will be back in court Monday for a pretrial hearing. Some will say it's about time. Fastow is fighting charges he put together all those complex, illegal, offshore financial schemes that brought Enron crashing down, and the future of thousands of its employees right along with it.

Sometime this week, the joint House and Senate committee looking into the Enron scandal is expected to come up with some conclusions. Gee, it hasn't been long enough, has it? The SEC wants Congress to give it more power to seize ill-gotten gains from some of the most notorious corporate crooks. Here's one possible future target for the feds: Former WorldCom CFO's Scott Sullivan's $15 million, five- building estate in Florida. The key is in Florida, you can't seize a person's home as a part of one of these forfeiture deals in a case of crooked corporations. Or maybe they're going to figure out a way to change that. Sullivan is pleading innocent in the fraud case, and remember he was the one who was whining about his picture being taken in handcuffs. Poor boy.

Still ahead on IN THE MONEY, turning diversity into prosperity. Find out why the boardroom is focusing on the classroom, as the debate over affirmative action for colleges heats up.

Plus, how the space program has changed our world, from takeoff to the checkout line. We'll show you NASA's impact on the way we spend our money and our time and our lives. Stick around.


CAFFERTY: Some of America's bluest of blue chips are backing the use of affirmative action at colleges and universities around the country. And that makes them part of a fight that is going all the way to the Supreme Court of the United States. The fight centers on the University of Michigan's battle to keep an admissions policy that grants extra points to minorities, based strictly on race. Companies including 3M and Bank One support affirmative action in the admissions office. The firm says it's one way to make sure their future employees are experienced at working with people from other backgrounds. They don't mention a couple of other fringe benefits that are fairly obvious. The companies get to look progressive, or politically correct, if you will, and pick up some ammunition against potential discrimination lawsuits.

Now, two different perspectives on affirmative action -- who gains, who loses, and does the country, in fact, need it in the year 2003? From Washington, syndicated columnist Armstrong Williams, who is against the University of Michigan's program. And Michael Eric Dyson of the University of Pennsylvania, who supports Michigan's affirmative action admissions policy.

Let me begin, if I can, Mr. Williams, with you. "The Los Angeles Times" did a poll and found out that by a margin of two to one, their readers support President Bush in his contention that the University of Michigan's policy on admissions is discriminatory, and they say, in fact, that his objection to it is valid, that the Supreme Court should overturn the policy, rule it unconstitutional.

In that same poll, they discovered that people are willing to grant special consideration to college applicants who are economically challenged, regardless of race or creed or ethnicity or religion or sex or anything else. And I just wonder, what's wrong with that approach? Why not, after all of these many decades of debating racism in this country and passing the Civil Rights Act, is it time to move on and find some other criteria in order to level the playing field for potential college students?

ARMSTRONG WILLIAMS, SYNDICATED COLUMNIST: Thank you for having me. Well, the problem is that there's a mind-set as it relates to affirmative action where there are those who are just unwilling to even tweak or take another look at the program, to enhance it and make it better. And what's happened over the last several decades is that affirmative action has become a bourgeois boondoggle for many middle class and upper middle class blacks and a lot of upper middle class and rich white women.

And what has happened is that it's more of a class issue now. The poor and the truly needy don't benefit. You have first, second, third and fourth generation of affluent blacks and white women getting into college based on affirmative action, getting their jobs based on affirmative action, getting their contracts based on affirmative action. And many people in this country, including myself, are wondering at what point do you get to you rise and fall on your own merit, where your children can get to the point when they can do that.

And the other -- just what is so absurd about the Michigan program also is that it says that Dick Parsons' (UNINTELLIGIBLE) son, who comes from a very wealthy family, would get 20 points over some poor white kid from Appalachia. There's just something that is wrong with that. It should be based on need, it should be based on socioeconomic disadvantages, and it should truly help the poor.

CAFFERTY: Professor Dyson, what about that point? They're giving 20 points additional on a college applicant's form based on the color of the skin. I mean, if that's not discriminatory, what is? You'd certainly have to agree that is discriminatory.

MICHAEL ERIC DYSON, UNIVERSITY OF PENNSYLVANIA: No, no, no, no, not at all, first of all because you're skewing the debate towards an analysis of affirmative action that doesn't take history into account. Affirmative action exists only because of white supremacy and apartheid, which prevented people through discrimination and segregation from having an equal playing field. Seventy years ago, Michael Jordan could not have played in the NBA. You're telling me a policy that says all people who are competent should be able to compete so that we can discover a genius like Michael Jordan is a policy we wouldn't support? Of course it is.

Furthermore, when we talk about 20 points, 20 points doesn't seem hardly enough for the extraordinary weight of discrimination in the past. But 20 points is merely 20 points. It's not 20 points for legacy, it's not 20 points for athletes. And what amazes me is that people like Mr. Williams and other right wings or conservatives in this country become Marxist when it comes to issues of race. Now all of a sudden they're concerned about poor white people. I've been concerned about poor white people and other poor people from the beginning. But when Joe Lewis was making millions of dollars as a champion of American society in terms of his boxing, he couldn't get into the front door either. So it wasn't a matter...

WILLIAMS: I understand that.

DYSON: Let me finish. It wasn't a matter of his money that prevented him access. It was a matter of his color. So we should have race-based policies that address the historic legacy of discrimination, and we should have those policies that encourage poor people, because I was both poor and black, to get into college. So I think this bourgeois boondoggle about which Mr. Armstrong Williams speaks is really a red herring. The real deal is that discrimination in this country has prevented the access of poor and African-American people from access, and white women, and other able people historically have been the greatest beneficiaries of affirmative action, not people of color.

CAFFERTY: You're talking about the discrimination of the past. Why should a white kid who doesn't get into college because he doesn't have that 20 points that might put him over be having -- put in the position of having to pay for whatever sins preceded the fact of his arrival on this earth? In other words, why should a child today, who wants to go to college, be penalized for something he virtually had nothing to do with, that happened sometime ago?

DYSON: Let's say her as well, not just him.

Look at this. Let's talk about the fact that you're not speaking about the legacy admissions. George Bush got into Yale University because daddy had deep pockets...

CAFFERTY: You're not answering my question, professor. I'm asking...

DYSON: I'm speaking directly to it. I'm telling you that race is one consideration. Legacy is another. Athletics is another. That same student is being prevented access to that college because he or she did not go there or his parents didn't go there, or they are being prevented because of the fact that they don't have enough money. I'm suggesting to you that (UNINTELLIGIBLE) past has an impact on the future. If you inherit a disease from your grandmother and it is a disease that manifests itself in the third generation, you yourself will be deleteriously affected by something that happened way before you got there. This is present. A study that was just released that suggested that if you have a different sounding name, you won't even get in the door to be considered. If your name is Shanana (ph) or Raffiki (ph), you're not going to be considered if your name is Emily or Bernard. I think that's present discrimination, right now.

ASNES: No one's going to argue with you that discrimination continues and is a very powerful force in our society. And ...

DYSON: Well, some would argue with that.

FOX: If your name is Tammy Faye, you get discriminated against.

ASNES: There are a lot of kinds of discrimination, exactly, and...

DYSON: And they're all equal.

ASNES: No, they're not all equal. So one of the questions is, how do you address discrimination in a way that is most beneficial. One of the problems with looking at poverty, for example, is that when you're an admissions officer and you are asked to evaluate applications, you cannot review at the same time the financial aid application, and that was done, you know, for the opposite reason, it was done to prevent colleges from picking students based on their ability to pay.

Now you're saying how do you find the deserving? Is race the only way? Are there other ways that are going to be at least as effective?


CAFFERTY: Mr. Williams, let's get you into this, Mr. Williams. Get your comments on some of this.

WILLIAMS: Listen, listen, let me just say, if you -- the focus, I like what President Summers (ph) is doing at Harvard. He is refocusing on primary education, because if you don't reach a child by the time they're in fifth grade, it is too late.

ASNES: Yes, but that's years away, and college is now.

WILLIAMS: May I finish, please?

ASNES: Sure.

WILLIAMS: If you look at the geography of the country or the demographics and if you say that we're going to look for kids in Appalachia, in the inner city, from a (UNINTELLIGIBLE) background, from a mechanical background, you'll achieve the same goals that you're trying to achieve now.

But, listen, you have 50 percent of young black men that don't even graduate from high school. Instead what we need to do is expand the pool, what we need to do is go back and focus on getting their parents and the teachers involved in the education.

But the problem is...

DYSON: I agree with that.

WILLIAMS: ... the problem is -- you've got -- you're dealing with this bureaucracy, where you don't really focus on the real problem, because in terms of affirmative action, what we're debating today, we're talking about less than 1 percent of black kids that benefit from this program; 97 percent of other black kids go somewhere else. In fact, 57 percent of black kids in this country, including yours truly, graduated from a historical black college and university. And I am going to tell you that 70 percent of the black kids in the inner city have never heard of affirmative action. So you should ask yourself, how is it that these children are able to achieve and accomplish and once they get into college and are able to graduate?

SERWER: Look, there have always been preferences in this country. I mean, some kid plays the tuba well, he gets into the school; another one is a good swimmer. George Bush, you talked about getting into school. Are you saying that there's a young girl growing up on an Indian reservation in South Dakota, with a B plus average, and she shouldn't get in over a preppy from Andover with an A minus average? I mean, come on, you have got to expand society and bring people like that in. And there have got to be systems in place, don't you think?

DYSON: Absolutely right. I think -- furthermore, I think, here's the point. When people talk about affirmative action, we're not talking about admitting people who don't deserve to be there. We're talking about the historic legacy of discrimination and overcoming that by widening and equalling the playing field. And one of the ways we do that is to take race into consideration, not as the primary factor, not as the exclusive factor, but as a significant factor that among excellent candidates.

Let me ask you this question: If 10,000 white people, just white people, were trying to get into Harvard, you only had 1,000 slots, and they were all smart, how would you make that decision? Well, we have a tuba player from North Dakota who's interesting here; we've got 10 athletes from South Dakota, we don't need anymore of those. There will always be arbitrary considerations introduced into a pool of people who are competing for scarce resources. Race has been used as a de-merit in the past. It can be now used as a merit in order to equal the playing field for excellent candidates who deserve a shot at getting a good education.

WILLIAMS: If it were immoral 40, 50, 70, 100 years ago to not include blacks based on race and to deny them opportunities, it is equally morally bankrupt today to deny whites the same opportunities based on their race.


DYSON: That's the point I just made.

WILLIAMS: You can achieve that without even basing that on race. Race should never be a factor.

CAFFERTY: Gentlemen, we have got to stop right there. I appreciate your thoughts. It's not an issue that obviously we can resolve in the course of an hour-long program. I appreciate having you both on the program. And perhaps we can pursue this again in the future time. We've been talking to Michael Dyson, professor at the University of Pennsylvania, and Armstrong Williams, syndicated columnist, radio and television host, joining us from Washington, D.C.

Coming up next on IN THE MONEY, a look at how America's push into space changed the shape of business here on earth. Plus, we'll click on our in-box, check some viewer e-mails. You can write to us at Back in a minute.


CAFFERTY: A good deal has been said about the Columbia shuttle tragedy in this past week. Some say that we should continue space exploration, no matter what it costs, even if some of the astronauts are, in fact, put in danger. It is a dangerous business. Others disagree. But any discussion about the future of NASA should include some mention of all of the things that have become a part of our daily lives because of the space program.

I had no idea until I started reading this list. Some of these discoveries originally meant to help the astronauts in space, help keep us alive here on earth. For example, programmable pacemakers, robotic surgery, body imaging technology, implantable heart pumps, insulin pumps, even ear thermometers for babies -- all of these inventions derive from gadgets scientists at NASA and other agencies originally made for the space program.

There's more. Smoke detectors, motion detectors, ATMs, fire resistant clothing, bar codes, computer readers for the blind, and, of course, the satellite technology that makes it possible for you to watch this program here on CNN.

And the first thing out of everybody's mouth during the break was, and tang. Don't forget tang.

FOX: Yes, but the ATMs, you've got to do have these in space.


SERWER: When were there blind astronauts? What is that thing for the blind about? Oh, I'm missing something.

ASNES: That's text to speech technology.

SERWER: They talk about velcro, also, came from it, other things. You know, but then, if you really look, the space program, I don't want to bash them too much but they take a lot of credit for these things.

FOX: For things that might have been developed otherwise.

SERWER: And there were some things that were sort of developed a little bit here, and then they enhanced them.

FOX: But tang is all theirs.

SERWER: Tang is all theirs. They can have it.


ASNES: ... and there's also that astronauts' freeze-dried ice cream, that you can get in the (UNINTELLIGIBLE).

SERWER: Oh, that's cool stuff. Kids love that.

CAFFERTY: But the marketing campaign for tang is one of the great campaigns of all time. It's been years and years and years since they talked about tang being aboard the space craft, yet ...

ASNES: We all know it.

CAFFERTY: The first word out of everybody's mouth is tang. So somebody on Madison Avenue had that one figured out.

But you suggest that NASA is perhaps puffing up the resume a little bit.

SERWER: Well, you know, because I talked about this, I wrote about this in my online column and someone said, oh, all these things, and then people came back and said velcro was actually invented in the 1930s. What was a couple of these other things that were -- that actually had roots going back even further.

FOX: And a lot of these things, and maybe other things, could have been discovered with a space program that was focused more on finding stuff out in space, rather than just getting people out there for photo ops.


ASNES: On the other hand, there were rivers of R&D money that have been channeled into our economy through the space program. And without that, you know, it would come from somewhere else, but...

CAFFERTY: There's a whole list of stuff we don't know about, and that's all the black box stuff, the work they did for the Pentagon, and for the military, research on laser weaponry and satellite technology and all kinds of things that would go up under great shrouds of secrecy that we may not know about for some time to come. One must assume that our tax dollars are being put to good use there, but you know, a lot of people say whoever winds up controlling that great void above the atmosphere is the person that's going to control a lot of what goes on down here.

SERWER: Some of it's manifest destiny. You know, I mean, we've got to go. Why do we go? Because it's there. We have to go explore Mars. We have to take beautiful pictures of the Earth. And some day, your great grandchildren might need to colonize Neptune -- I mean, some of this stuff -- and if an asteroid comes down, we can learn how to shoot it down before it hits Earth.


CAFFERTY: Don't you think that's a good idea?


CAFFERTY: I mean, if you got up tomorrow, and they said there was an asteroid on the way over, wouldn't you want to know if somebody knew how to shoot it down?

ASNES: Hey, send Bruce Willis up there.

SERWER: I just -- you know, I think we need to continue it, but they make a lot of claims. That's all I'm saying. I don't want to get in a lot of trouble, because for a lot of people, it's a very sensitive time.


SERWER: I understand that.

ASNES: I want my girls to grow up to be astronauts.

CAFFERTY: And they will be terrific. I have got four daughters.

Still ahead on IN THE MONEY, they did it their way, and now it says here you can too. Business leaders give their secrets in "Tips from the Top." Give us a pat on the back, or a kick in the pants. Your choice, here's the e-mail address, you can write to us, Inthemoney is one word. Why they designed it that way, I have no idea, but that's what they did, so if you want to write, that's what you have to do, too. Stay with us.


CAFFERTY: This little program we do here, this IN THE MONEY, is a two-way deal. We tell you stuff for an hour, and then when we get finished, you are going to tell us how we're doing, or not.

A lot of you weighed in with opinions and comments after our first program. Here's a little bit of what you had to say. The first e-mail begins here: "Jack, I've recently decided to learn more." This may be the best e-mail we ever get here. All right, "I've recently decided to learn more about money and its role in my life and in the world. Watching you on "AMERICAN MORNING" has been a part of my morning process, and I looked forward to your new show, and it was right on, it did exactly what you said it would, it gave us information without boring us. As a teacher, I definitely understand that this is the best way to teach someone anything. Thanks for helping me learn and keeping me entertained." Jeri Lynn in Los Angeles.

SERWER: The check's in the mail on that one, Jack, right?

CAFFERTY: That's not bad, right? That's pretty nice. Like I say, I did qualify it might be the best one we ever got.

Here's one from a guy who doesn't like me so well. "Anyone who says they let their 10-year-old daughter watch MTV is either a moron or a liar. Either way, you have no credibility with me." Steve, California.

Before I respond to my friend Steve, we were talking about -- we had Kurt Loder from MTV on a couple of weeks ago, talking about whatever, and I said at the end of the interview, I know your face because MTV's on in my house a lot, I have a 17-year-old daughter who watches it all the time. So, Steve, you weren't listening. And if you are not going to listen any more closely, don't write to me anymore. I'm just kidding. Do what you want.

"Jack, enjoyed the show. It's a keeper. Some suggestions: Get a better time slot." You mean there's a better time slot than 3:00 Saturday afternoon?

ASNES: No, not possible.

CAFFERTY: Maybe 3:00 Sunday afternoon, which it will be on tomorrow.

SERWER: You got that also.

CAFFERTY: We wanted 4:00 a.m., but the dental implants infomercial has that time all locked up. "How about an unknown business expert like the unknown comic" from -- nevermind, that's from Phil in Kansas.

Anyway, the e-mail address, And you can jot us your thoughts. Or not.

Time for us to drop the curtain on this edition of the program. We'll be back, though, tomorrow afternoon at 3:00, inarguably one of the primo time slots in all of commercial television.

Thank you to our panel, Marion Asnes, "Money" magazine, and from "Fortune," the dynamic duo of Justin Fox and Andy Serwer. We'll be back tomorrow same time. I'm Jack Cafferty. Thanks for watching. See you then.


High Malpractice Insurance Costs; Debate on Affirmative Action>

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