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Are Terror Threats Changing Spending Patterns?; Interview With Arianna Huffington; A Look at Reality TV Programs
Aired February 16, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, HOST: Today on IN THE MONEY, homeland insecurity. Find out how the threat of terrorism is changing the way America spends its money.
Plus, hog wild. We'll speak with Arianna Huffington, an author of "Pigs at the Trough," nice title, all about her take on corporate greed and avarice in America.
Also ahead, cheap thrills. Reality TV doesn't cost much to make and it can bring in big, big bucks. We'll look at whether this is one guilty pleasure that might be here to stay.
Good afternoon. I'm Jack Cafferty. Welcome to IN THE MONEY.
It's been a little more than a week now since the homeland security people moved us back up to code orange. Officially that means the threat of a terrorist attack is high. Unofficially, it means get out to the hardware store and start buying a lot of stuff. Americans are stocking up on emergency goods, things like duct tape, plastic sheeting, spare water, food, batteries, radios. Washington says it's a good idea. Some say it might be part of the Bush economic stimulus plan.
Around the country, it sure looks like an emergency. Security is up at transportation hubs and landmarks. The U.S. Customs Service has boosted its Black Hawk helicopter patrols over the nation's capital. And on the ground below in Washington, D.C., anti-aircraft missile batteries rolling into place this week. Pretty ominous stuff.
The threat of terror changing the way we spend our money, whether we are buying that duct tape I talked about or airline tickets. For a look at that, here's today's panel. As usual, "Fortune" magazine's editor at large Andy Serwer is with us. Marion Asnes, the senior editor of "Money" magazine, and Justin Fox, also a "Fortune" magazine editor at large.
So what do you think about go out to buy batteries, waters, duct tape and sheets of clear plastic when there's no money being spent to protect the ports, the borders are still open and in fact porous in many places? Should Americans feel secure about what their government is doing to protect them from these terrorists?
ANDY SERWER, FORTUNE MAGAZINE: Well, you know, I guess it's what we're supposed to do. But it does not seem that adequate. And you ask people... JUSTIN FOX, FORTUNE MAGAZINE: It's a do-it-yourself economy, though, you know.
SERWER: You ask people about -- well, if you have nerve gas, does the plastic keep it out? No. If you have this, does the plastic -- I'm not really sure what any of this stuff does except create an environment of fear.
MARION ASNES, MONEY MAGAZINE: Well, you know, if you live outside of the major terrorist targets, I mean, it's hard for us, we're all here in New York going, oh, right, what's plastic going to do for me? But -- and we've been through this, and certainly plastic would have done nothing for you, but if you're not in New York, if you're living in a small city somewhere out in the middle of America, maybe this does make you feel better.
FOX: Plastic can set you free?
ASNES: Plastic maybe makes you feel better. I don't know. But I don't get it.
CAFFERTY: What about the argument that says, wait a minute. As I mentioned, port security is terrible, 2 percent of the containers that come into this country by ocean-going vessel are inspected, 98 percent of them are never looked at or checked at all. There are border crossings particularly up between United States and Canada virtually unattended 24 hours a day. You can go back and forth across the border with impunity. The front line responders at the state and local level have received virtually no federal money to beef up their lines of defense against alleged acts of terrorism, and they are saying go buy plastic sheets and duct tape. Now, I don't mean to make light of it, but is there a kind of a mistaken prioritizing of things here maybe?
ASNES: Well, maybe there is. You know, after 9/11, at "Money" we did the whole thing about, what should you really be doing at home to counteract terrorism? And the answer was, there really is almost nothing you can do except make sure that you have all your paperwork in the proper place, like make sure you have a will with a guardian for your minor children and make sure you have enough life insurance. Make sure you do keep a little cash in a safe place in the house.
Other than that, what are going to you do as an individual citizen?
FOX: And from the government level, they can't close the border with Canada. They probably can't inspect...
SERWER: Well, I think it would be a good idea.
FOX: They can't inspect every shipment that comes into every port. I mean, that would really shut down the economy, and it sort of did for a couple of months there after September 11.
SERWER: But, you know, it's very frustrating, Justin, that our government is telling us to do that. They are not doing some of the things Jack talked about, and they have not been able to never mind not get bin Laden, which is just incredibly frustrating for us as a nation...
(CROSSTALK)
CAFFERTY: We don't know for sure that bin Laden's still alive.
SERWER: OK, let's assume that he is, just so I can go on.
(CROSSTALK)
SERWER: Then the other point is, anthrax man or anthrax woman. I shouldn't leave out more than 50 percent of the population.
ASNES: Thank you, Andy.
SERWER: We were never able to catch this person who sent that stuff out. I mean, so now they're telling us to take care of ourselves? I mean, come on.
(CROSSTALK)
FOX: ... it's hard too.
SERWER: How do you not catch the anthrax person?
CAFFERTY: Well, apparently, one has to assume they made a Herculean effort and have just been unable to do it. They didn't catch the guy that blew up the park down in Atlanta during the Olympics, either. They thought they had him, wrecked some guy's life, and it turned out not to be him, but you know, the anthrax thing, I guess, is tough.
The other thing people are saying is that it seems highly coincidental that all of a sudden in a space of five or six days, we are raising the terrorist alert situation to code orange, we get all these instructions about get some extra water and food in the house and prepare to seal off one of the rooms -- Colin Powell sits down at an U.N. briefing session or wherever he was the other day, and says, oh by the way, wait until you hear the Al Jazeera tape that is coming out later today, which apparently was given to him, the secretary of state, by people in Qatar, as I understand it.
But, I mean, is this all coincidence? Within a period of five days, as we draw closer to the reports at the U.N. from the weapons inspectors, to a possible second resolution that we might go to France and Germany to try to get them on board for the use of military force, that all of a sudden, all of these things seem to be coalescing at precisely the same time, or am I just being cynical?
ASNES: I don't think you're being cynical at all. I think it makes perfect sense for them to all be happening at the same time. Why would we need to be elevating the alert if we weren't moving closer to a war? If we weren't concerned about more terrorism? I mean, this is what it's all about. And this is certainly, you know, the way you have to do it. You know, and as we're sitting here, I'm thinking, now, what the heck would I ever -- I am still thinking about this plastic and the duct tape. You know, you really got me on this.
FOX: You can always use duct tape, though. You always need duct tape around the house. It's a good thing to have.
CAFFERTY: You know, the Israelis, for example, I got an e-mail on the other program, "AMERICAN MORNING" I do with Paula Zahn, the Israelis issue gas masks and hazmat suits to their citizens in the event that they might be exposed to -- now, granted, it's a much smaller population and the government has had much more experience dealing with terrorism. But, the government's not saying, you know, here is a place where you can go and pick up gas masks for your children and the members of your family.
SERWER: Gas masks you need a lot of training for, too.
CAFFERTY: You do?
SERWER: No, you do need training. The other thing that's scary about that tape we were just talking about, though, is that, you know, experience shows or history shows that five to 10 days after one of those things comes out, something happens. So, I mean...
CAFFERTY: You mean the tape from bin Laden?
SERWER: Yes, right. It happened two other times, so, you know, it's very frightening. I mean, it may happen in Bali, it may happen in Europe, but it seems to happen. And so, you know, we're all walking on egg shells here. Right? I mean, it makes sense.
CAFFERTY: And is it unreasonable to ask whether or not telling the public to put extra water and food and some tape and clear plastic sheeting in their homes is just a way to maybe make people feel better when they don't know what else to tell us?
ASNES: They don't know what else to tell us, but you know, the idea of having a little bit of extra water and food, I mean, it couldn't hurt. Couldn't hurt. I mean, that's what you are supposed to do in hurricane season. Why not do it now?
CAFFERTY: One guy wrote and he said, you know, it is not going to do any good. If you've got kids, they can eat three days worth of food in 20 minutes. And then what will you do?
(CROSSTALK)
CAFFERTY: Coming up on IN THE MONEY, as we continue, bringing home the bacon. "Pigs at the Trough" is Arianna Huffington's new book about corporate greed and how to stop it. See if you buy her argument when we talk to her right after this break.
(COMMERCIAL BREAK)
CAFFERTY: The latest developments, or lack thereof in the Enron case lead today's edition of "Scandal Watch." Enron's creditors are suing CEO Ken Lay and his wife, Linda, or as President Bush used to call him, Kenny boy. The bill collectors want the Lays to pay back $84 million in loans that Enron gave them in the late 1990s. Now, that $84 million wouldn't put a dent in Enron's $50 to $100 billion overall debt, but hey, every little bit helps.
And that's not all the news this week for Mr. Lay. Kenny boy's lawyers are telling the world that Lay did nothing illegal when he sold $92 million worth of Enron stock. Now, Lay sold the stock at the same time he was acting as a public cheerleader for the company and urging people to buy Enron stock. Lay still doesn't face any criminal charges in the Enron case, and who knows whether he ever will.
Former Enron Chief Financial Officer Andrew Fastow does, though. This week, a federal judge complained the mounting pile of evidence in the case against Andrew Fastow could make the case unmanageable. Your honor, that's what you guys are paid to do, to sort through the documents and make this stuff manageable so that the justice system can proceed and do what it is we pay you, we, the taxpayers, to do, which is prosecute the bad guys and put them away someplace. Andrew Fastow faces a 78-count indictment for creating those off-the-books partnerships that helped bring Enron down and may apparently be too complicated for some of the folks in the legal system to understand.
Editorial columnist and radio talk show host Arianna Huffington has been looking at the big picture when it comes to some of these scandals. She's the author of a new book with the rather colorful title, "Pigs at the Trough: How Corporate Greed and Political Corruption Are Undermining America." She joins us now from Los Angeles. Ms. Huffington, nice to see you. Thanks for being on the program.
ARIANNA HUFFINGTON, COLUMNIST/RADIO TALK SHOW HOST: Great to see you.
CAFFERTY: One of the presidents, I don't remember which one, said the business of America is business, and if you go back to the days of Henry Ford and the oil barons and the Rockefellers, and all the rest, greed and scandal are nothing new in this country or in this economy. What's the point here?
HUFFINGTON: Well, what is new is the unholy alliance between corporate America, Wall Street and Washington. We have 20,000 registered lobbyists right now. And as I say in the book in a sidebar called "All in the Family," many of them are married to senators, are the children of senators, who Chet Lott, who went from running a pizza joint to being a powerful lobbyist, or Linda Daschle. And therefore, there is a tremendous amount of power that special interests have to put all those tax loopholes, all those special regulations or lack of regulations that have allowed all those corporate scandals to go on and to still go on. That's really at the heart of what I'm saying in the book, because it's still business as usual.
CAFFERTY: Wasn't there this great amount of outrage, though, following the WorldCom/Enron, et al stories that hit us all about a year, 18 months ago, and we got that Sarbanes-Oxley bill passed, and now everything is supposed to be all right, isn't it? I mean, didn't they fix all that stuff?
HUFFINGTON: But it's not.
CAFFERTY: Why not?
HUFFINGTON: That's the whole point. You may remember that Harvey Pitt resigned in disgrace three months ago, but he's still at the SEC, and as "The New York Times" revealed at a front page story, in charge of undermining, killing or watering down the lame reforms that were passed in the summer. And even now, as we're hearing the stories of Sprint's CEO sheltering hundreds of millions of dollars and not paying any taxes, we still have the SEC not making a clear-cut decision not to allow accountants to offer financial advice at the same time that they are auditing the company's book.
Why is it to hard to pass some common sense reforms? And why does it always have to come down to massive popular outrage before anything happens?
ASNES: Well, that is what happens in this country and we've had a whole history of having these kinds of insider things that go on and then popular outrage that sweeps it out. Think about the robber barons that Jack mentioned before, think about people like Jay Gould, who owns the railroads. Think about scandals like the Teapot Dome. What happens in this country is we have a free market economy. Some people become very successful, figure out how to manipulate the economy to get their interests. They assemble money and power, and then they screw up.
They get in big trouble. People get mad, people start to demonstrate. All these laws are passed. The economy goes through some changes, and the rules get tighter.
(CROSSTALK)
FOX: I was reading through the book, and I think the real culprit, it appears to be, is this guy Serwer sitting over here.
CAFFERTY: That's right. Absolutely.
SERWER: Why's that? Oh, yes. Well, yes, Arianna, Andy Serwer here. You quoted me in the book, twice, in the 10 stupidest things about the new economy. And you know, I didn't think they were stupid what I wrote. And I just wondered if you --
FOX: Andy wrote a lot of stupid things in the late '90s, but those two actually were pretty smart.
SERWER: I actually wondered if you actually read my article.
HUFFINGTON: Well, Andy, I have read your articles, and you've written a lot of good things, but you must admit you were a cheerleader for the new economy.
SERWER: Oh, I don't think that's right. HUFFINGTON: You were one of the people who thought it would go on forever, and the point I'm making in the book is that a lot of that cheerleading led to billions of dollars being lost in pension funds, in 401(k)s, and these are real people who got hurt. And my problem is that even now...
SERWER: Did you get hurt, Arianna? You're pretty wealthy, aren't you? Where's your money invested?
HUFFINGTON: Absolutely. Absolutely I got hurt. But you know, I could afford to get hurt. A lot of people who could not afford to get hurt got hurt.
(CROSSTALK)
SERWER: Here are the comments, Arianna. I just don't think what I wrote was wrong. "Even if the market tanks, the vast majority of us will stay in the game. We have to, because for more and more Americans, our money is no longer in the hands of schlumpy stockbrokers." I mean, what's what's not accurate about that?
HUFFINGTON: Well, first of all, the statement you made now is absolutely absurd.
SERWER: That's absurd?
(CROSSTALK)
HUFFINGTON: I'm sorry, let me just respond. I think right now, it would be insane for small investors to be in the market. It would be insane...
SERWER: It's a great time to buy.
HUFFINGTON: It would be insane to listen to advice.
FOX: It was insane three years ago. Now it's a great idea to be in the market.
HUFFINGTON: I'm sorry, let me just finish. You know, here we have all these analysts who are still not being indicted, like Jack Grubman, like Henry Blodget, who went on cheerleading they way you are continuing to do now, and people listened to them, and right now they're going to get away with some fines instead of being indicted and admitting wrongdoing.
SERWER: But what does that have to do with being invested in the stock market, Jack Grubman and Henry Blodget?
HUFFINGTON: It has everything to do with is, because until we return faith in the stock market, until we make some fundamental changes, why should small investors believe that the stocks that they're being touted are actually the way that they're being presented, instead of seeing some other kind of favors going on in the background, which is what happened during the '90s? And it's still going on. That's the key point that I'm making. ASNES: Wait a second. Now, wait a second. If what you're saying is true, then what that means is that all of us investors, and I've been in the market for many years, I certainly got hurt when the dot-com world exploded, but I'm still in the market. I'm still buying stocks. And yes, I work at "Money" magazine, but I and all the readers of my magazine don't just get our spoon-fed by analysts and told what to do. You can go on the Internet and you can look yourself at the financial papers that are filed by corporations, and for all of the ones that are fraudulent, there are also the ones that are truthful. There are at least a dozen people in America who want to do an honest job.
So what you're really saying is that we're all sort of foolish, and I don't agree with that, Arianna. I think that we're smarter than that.
HUFFINGTON: I'm saying that there are a lot of people who have the tame to go and do their own investigation, but millions of people who work as truck drivers, as school teachers, don't have either the knowledge or the time to do those investigations. And if you look at the lawsuits against Merrill Lynch, against Citigroup, brought on by ordinary investors, I write about them in the book, it really makes you want to cry for the way that these people were defrauded of savings that it took them a long time to actually build up.
(CROSSTALK)
FOX: There's also a lot of people out there with their money in index funds, where they diversified between bonds and stocks, like people are supposed to do, who made it through OK.
ASNES: Right, including school teachers like my mother.
CAFFERTY: Let me ask you this, let me ask you a question. You said you were in the stock market. Did you raise any of these questions back in the late '90s, when the market was going up 25 percent a year and you were making money hand over fist? Did you complain about the advice you were given then?
HUFFINGTON: You know, the point is that I was in Treasury bills, I was never really in the stock market in a way that a lot of people were. I never really trusted the new economy. But the point I'm making now is what you said at the beginning about Wal-Mart. It goes on all across America. You have the CEO of Wal-Mart making $17 million in 2001, while employees were not being given overtime. It's this kind of upstairs/downstairs America, as I'm calling it. And this is not a left/right issue. It's about fundamental fairness. And that's why there's outrage all across the country.
CAFFERTY: We've got to leave it there. We appreciate you being on the program. The book is called "Pigs at the Trough," the author is Arianna Huffington, she is also a syndicated columnist. Thanks for joining us.
Still ahead on IN THE MONEY, the mouse that scored. Find out about the future of Disney's lucrative deal with Pixar, the animation company that brought us "Toy Story."
Plus, risky business, the stakes get higher and the standards get lower as reality TV pushes the envelope farther. We'll look at how far the fad might go.
(COMMERCIAL BREAK)
CAFFERTY: Welcome back. The stock of the week this week is Disney. The media and theme park giant facing some tough times these days, just like all of its rivals, but Disney has another dark cloud hanging over its head that the others don't have to contend with. Its partnership with the giant animation firm of Pixar could be coming to an end very soon. The people at Pixar are the people whose computer- generated animation brought us Disney hits such as "Toy Story" and "Monsters, Inc.," a very lucrative relationship to say the least. And without Pixar on board, Disney could be in deep trouble, to the tune of losing about $170 million a year. That's what Pixar has been responsible for. So we'll find out what the panel thinks about the house of mouse.
FOX: Disney was the one entertainment company that actually made a lot of money for a while, in the '80s and '90s, and that was because they didn't have to pay stars. They paid animators. And animated movies stopped working so well, and so now they are working with Pixar in all of their work, and they're sort of stuck with the star. Pixar is a star, and Pixar can demand more money, which cartoon characters couldn't, and so it's like Disney is now stuck in the same boat as everybody else, whereas they had this wonderful period when they actually made money for their investors, which entertainment companies never do.
CAFFERTY: Except that one did, like you say, from the time Walt Disney invented the little crude drawings of Mickey Mouse back in the '30s. That thing made money.
FOX: Well, especially from when Eisner took over in the early '80s, really.
ASNES: But one thing that Disney does have going for it, though, is that it's unparalleled at distribution. And so it's certainly been good for Pixar, as well as just Pixar being good for Disney. You have an amazing ability to -- you know, to put out the movie, sell the products, market the tapes, put it on television on the Disney Channel. I mean, they really do have that whole marketing thing worked out to a tee. So, you know, a lot of this is negotiation.
SERWER: I think the Disney magic is over, Jack. I mean, they used to dominate the animated picture business. We talked about that. That's gone. I mean, Dreamworks does it just as well, so do the other studios. They used to dominate the theme park business. Everyone else has theme parks, so that's gone. And Michael Eisner -- is he still there? Oh, they haven't thrown him out? Oh, no, he's still running the company, right?
CAFFERTY: You and I have talked about that. The stock price hasn't been that great for Disney with or without Pixar under Eisner's tutelage for a good long while now. That company has been struggling with Pixar on board for the last several years, raising questions about how long the board perhaps is willing to ride with Michael Eisner as the top guy.
ASNES: Now, before Eisner took over, there was a huge internal struggle at Disney in -- what was that, in the '80s.
(CROSSTALK)
FOX: Sort of one of the beginnings of the whole shareholder value thing, and Eisner was one of the great CEOs.
SERWER: He did a great job.
(CROSSTALK)
FOX: Well, he also used to have people like...
ASNES: Katzenberg.
FOX: Katzenberg, and other people...
(CROSSTALK)
SERWER: This is a guy, he's a classic CEO who stayed on too long. I mean...
(CROSSTALK)
SERWER: ... couldn't get along with them. He couldn't get along with Katzenberg. He stayed on too long. The board is all people he knows. He's tried to fix that a little bit. But you know, the "L.A. Times," the paper in his own hometown basically trashed him a couple of months ago. That's very unusual.
CAFFERTY: It's not a good sign either when you're in the corner office and the hometown newspaper is asking questions. Very bad. Very bad.
Coming up on IN THE MONEY as we continue, bulldozer. If just listening to Fed Chairman Alan Greenspan makes you want to lie down to take a nap, well, we'll show you a woman who's fighting the urge. She's over his right shoulder.
Plus, plot lines and bikini lines. We'll look at how reality TV turned sin and skin into the media fad and bank deposit of the decade.
(COMMERCIAL BREAK)
(NEWSBREAK)
CAFFERTY: Reality TV reached a new high this week, or maybe a new low, by raising the ante on an old hit show. "Daily Variety" says the producer who brought the world "Who Wants To Be a Millionaire," is working on a new WB show which will be titled, "Who Wants To Be a Billionaire?" Now, words like billionaire and millionaire, as in "Joe Millionaire," show up a lot on television these days. So do deceit, sex and the kind of competitive spirit that would make Vince Lombardi proud.
Producers love reality TV. It's cheap to make and it's lucrative to put on the air. Those are the two watch words for television production. Cheap to make, lucrative to put on the air. And there's every sign that audiences like this stuff, too. Reality TV isn't going away any time soon, au contraire, much as some people might like it to. For a look at why America can't stop looking in other people's windows in during prime-time and why the networks can't stop producing this, we're joined by Bob Thompson, who is the director of the Center for the Study of Popular TV at Syracuse University, and he joins us now from our studios here in New York City. Bob, nice to have you on the program. Thanks for joining us.
ROBERT THOMPSON, CENTER FOR STUDY OF POPULAR TV: Hey, thanks.
CAFFERTY: What does it say about as collectively as a society that we like to spend our evenings looking in other people's windows and dwelling on their discomfort, their lack of clothing, their little picadillos, whatever. I mean, we're a nation of voyeurs, aren't we?
THOMPSON: Well, we are, and I think we came by this honestly. My guess is that probably the Neanderthal who was looking into other Neanderthals' cave learned stuff occasionally that was valuable to survival. We are curious. We like seeing what people do in their personal lives. And you know, any time you've ever overheard a subway conversation or peered into the medicine cabinet of your party host, we do like this kind of thing, and the thing that television does for us now is that instead of having to be a peeping Tom and risk arrest and...
CAFFERTY: You don't have to be out walking around the neighborhood at night with binoculars, risking the cops running you down. You can sit in your living room and do this.
THOMPSON: There you go. It brings the window right into your living room, and I think that is a delicious temptation to an awful lot of people, and I have to confess, myself included.
CAFFERTY: Yes. Which, the walking around the neighborhood or watching the reality TV? You can tell us, Bob, you're among friends.
THOMPSON: Things like "Temptation Island." I have got to confess to you, and I used to call these guilty pleasures. Now I just call them pleasures. Sure, the professor side of me, says what are you doing wasting your time watching this horrible stuff? But the other side of me says, more, more, more.
CAFFERTY: Absolutely. Plus you can always rationalize it by saying I'm doing research for tomorrow's class.
THOMPSON: Well, that's the genius of the system.
CAFFERTY: The rest of us have no excuse.
(CROSSTALK)
CAFFERTY: How sleazy can this stuff get before the public says, all right, that's enough?
THOMPSON: Well, I think we haven't seen the bottom of the barrel yet, but I think we're getting pretty close, because in the end, sleaze itself isn't going to run this stuff. You have got to have fairly decent story telling. The reason "The Bachelor" and "The Bachelorette" does so well is that there's this hammering narrative of who he is going to choose, same with "American Idol." The Victoria's Secret underwear commercials specials that played an hour long didn't do well in the ratings, and my guess is that...
CAFFERTY: I watched those.
THOMPSON: Well, so did a lot of people, but not as many. I don't think "Are You Hot" is going to do as well as "Joe Millionaire," because there isn't this story that people want to tune in week after week and watch. It's going to be a bunch of pixilated bodies with certain parts blurred with electronic manipulation.
SERWER: Bob, you know, it's interesting from a business standpoint, these shows are cheap to make, as Jack said, and people like them, but there is no reruns. Right? You can't run them again. So isn't that a problem for the TV networks?
THOMPSON: You're absolutely right. You know, these things rode in like the Calvary to save the networks just when they needed it, $14 million per episode, "ER," $1 million per friend per episode for "Friends." And this was a kind of Band Aid solution.
But two things are going to happen -- No. 1, eventually there will be a saturation. This stuff will never go away, but it is going to shake down a bit. And if they change their whole business model depending upon this, No. 1, they are going to suddenly find when it doesn't work as well, that they have got all kinds of holes to fill with expensive programming that they haven't budgeted, and then you're absolutely right, nobody wants to watch a rerun. Who's going to sit down and watch the nine episodes of the Aaron Burgie (ph) cycle of "Bachelor" the second time around like they will watch "Seinfeld" the 50th time?
FOX: Oh, I want to watch "Joe Millionaire" again. Don't you? One of the things that's interesting about this from the perspective of Hollywood is that it's not -- it's good for the networks, but it's not good for the Hollywood studios, especially because these things are huge overseas too, and a lot of the ideas actually came from Europe. "Big Brother." "American Idol," which was "Pop Idol" in the U.K. before it came here.
ASNES: And even "Survivor," I think.
FOX: Yes, "Survivor" was British, although they ran it here first. And so they're displacing on all these TV channels in Europe, they are displacing the "Seinfeld" and the "Friends" and all the stuff that makes money for Warner Brothers and Disney and whatever else.
So it's not a win on all sides for the American entertainment business.
THOMPSON: Yes, they are. First of all, I think this was actually our idea with the "Real World" in 1992.
FOX: Right, that's true. "Real World" started it.
(CROSSTALK)
THOMPSON: Yes, sort of, although this is -- "Real World" was the real kind of thing that did this. But then our executives all ignored that. They let MTV have that franchise for eight straight years. People overseas saw gold. They ripped it off. It was like rock 'n' roll. It started here, it goes to Europe, it comes back in the British invasion.
It is true. There are a lot of slots now that would be being filled with other things, but as a viewer, as a regular American, I'm not sure how much we're suffering. If it was between an episode of "High School Reunion" or "American Idol," which is a little different -- yes, they're a little sleazy, sometimes vile, but at least interesting, and yet another episode of yet another sitcom or another "Law & Order" franchise, I've got to say, I think I'd go with this new, interesting story telling form. At least for another year or two, until we're completely so abjectly tired of it that we're ready to go back to "Suddenly Susan."
CAFFERTY: Let me ask you about...
ASNES: Never!
CAFFERTY: "Suddenly Susan," yes, "The Perils of Pauline." Let me ask you about something that's subtly different than the reality shows, the crop than we're seeing now. CBS has been toying with the idea of putting a show called "Beverly Hillbillies" on the air, using actual people from somewhere perhaps in Appalachia. Now, the rest of these shows are populated by people who choose to make fools of themselves in front of a national television viewing audience. I mean, if you go on "Survivor," you know what you're signing on for. If you take a group of real people from a backwoods part of this country and instead of letting them participate in the joke, in fact sort of poke fun at them, is that -- it seems to me that's a big risk, that could backfire big time. Do you have any thoughts on that?
THOMPSON: Well, it's going to depend on how they execute it. But first of all, it's not like they're going to take a helicopter down there and shanghai these people to the CBS studios. I've found the objections to this -- I think the heart is in the right place for people that are objecting to this, but I think it's kind of condescending and patronizing to people, rural people, you know, who may live in West Virginia or in hills.
ASNES: And they've all got satellite TV. THOMPSON: Yes. I mean -- and here's why. It's -- we think it's OK if beautiful young women decide to go and make fools of themselves on these shows. We think it's OK if millionaires decide to go and find their wives and make fools of themselves.
But somehow we have got this idea, oh, rural folks. Shouldn't they be on the porch whittling something and rocking in a home made chair? And I, frankly, think that's a little patronizing. Those guys have every bit as much right, I suppose if they want, to make fools of themselves, to become famous and maybe possibly rich, as all the rest of us do. I wouldn't do it. You probably wouldn't do it, but if they want to do it and if I were poor living in the mountains, a couple of months in a Beverly Hills mansion with a maid and a swimming pool sounds pretty good to me.
CAFFERTY: Touche. Your point is well taken. Bob, we've got to leave it there. Thank you for sitting here, visiting with us on this subject.
THOMPSON: My pleasure.
CAFFERTY: Bob Thompson, director of Center for Media Studies up in Syracuse University upstate New York. We have to take a small break. Make a couple of dollars for Mr. Walton and the rest of his family here at CNN. And then it's back to the tea leaves; the panel unveiling the predictions for the weeks ahead. We'll be back after this.
Plus, a Web site even Nostradamus might check out. We're going to show you a Web site that charts the potential course of war against Iraq. It's a little funny, a little serious, a little scary, but it's a little funny. I said that.
(COMMERCIAL BREAK)
CAFFERTY: Time now for our intrepid panelists to break one of journalism's golden rules. They are going to speculate about what may lie ahead for all of us, business-wise. Start with you, Andrew?
SERWER: All right, I'll start. I mean, I don't know how business this is, but the Michael Jackson rebuttal TV show will not be watched by anyone who is sane.
CAFFERTY: Why do you say that?
SERWER: I don't think anyone is going to watch -- see, I think you're wrong. I think the Michael Jackson thing, enough. We're done. I think it's over. People are not going to pay attention to it anymore.
CAFFERTY: Twenty-six million viewers watched that thing on ABC the other night. They paid $5 million to buy that documentary from the kid in England who made it, and they got an audience of 26 million -- I don't know for how much they sold the spots...
SERWER: I'd rather watch the dog show, I mean, come on. CAFFERTY: Well, some would say there's not a lot of difference.
(CROSSTALK)
CAFFERTY: Marion.
ASNES: Oh, God, you know, you hit me at a bad time.
(LAUGHTER)
ASNES: I do have a prediction. I forgot it. You go and I'll come back.
FOX: Well, I have got an easy one. On this show next weekend, and the weekend after that and the weekend after that, and the weekend after that, we're going to be talking about Iraq and its impact on the U.S. economy. I have had it. I just can't take it anymore. These stories -- and I think the whole economy can't take it. I mean, that's the problem.
CAFFERTY: Everybody's getting fatigued on it. I absolutely agree. You know, nobody wants a war. But, at the point we're at, either, you know, I wish Saddam would either go into hiding and agree to go to some other country and go into exile, or, you know, or let the games begin and let's get it off the front page. I'm like you, I'm worn out with it.
ASNES: OK, I remember my prediction now. Arianna Huffington is going to run for president.
CAFFERTY: Oh, that's swell. Gee. Took you all that time to think of that?
FOX: She can't. She's not allowed to.
ASNES: Oh, that's right. She's not American.
(CROSSTALK)
ASNES: ... not born here, right. Her and Henry Kissinger. Neither one of them can run.
FOX: So she could be secretary of state.
ASNES: She could be a senator.
FOX: That's true. OK. Great.
CAFFERTY: There are a lot of questionable people in that job, aren't there?
ASNES: Go get your duct tape!
CAFFERTY: Yes. I suppose you're right. What about a prediction on how much longer the debate over what we're going to do about Iraq goes on? You figure that the war starts any time soon? SERWER: Everyone's been saying that, but we've been saying that for weeks now. I mean, but you really are starting to see a massive buildup.
FOX: And there's the whole hot weather thing. You either got to do it before it gets hot, or wait a year.
SERWER: I mean, you know, it's a bluff that president knows he may get called on. In other words, we're sending all those troops over. Best case scenario is, some country decides to take him into exile, and the whole thing just gone that way. Wouldn't that be wonderful?
(CROSSTALK)
ASNES: That would be great.
CAFFERTY: Terrific. Let them set up a democracy in that country and rebuild their lives.
FOX: He's just not going to want to go into exile. He just knows that anywhere he goes, he's killed so many people's mothers and fathers...
SERWER: But there are a lot of dictators who are in exile, so it's not...
ASNES: That's true, but I just can't see him blinking. I mean, if they're playing brinkmanship, I think they're playing with the wrong guy.
CAFFERTY: Plus, he's nuts. I mean, you can't make a deal with a madman. I think he's nuts. I'm not a shrink, but I think he's nuts.
All right. Time to say good-bye to some of our panels. See, we got those predictions done, not a big deal. Our thanks to Marion Asnes, as always, senior editor of "Money" magazine, and a tip of the hat to Justin Fox, editor at large of "Fortune." Andy and I will be back. During in the bull market of the '90s when Chairman Alan spoke, investors listened. These days when he talks, people go to sleep. Wait until you see this tape. Watch the lady over his right shoulder.
The Web site of the week, a rather bizarre take on the potential fallout for a war with Iraq. Duck and cover. But don't go anywhere. We'll be right back.
(COMMERCIAL BREAK)
CAFFERTY: Fed Chairman Alan Greenspan delivered his twice yearly thoughts on the future of the economy this week on Capitol Hill, and as usual, electrified the crowd. Back in the high flying '90s, people would be on the edge of their seats hearing the latest pronouncements from the man. But these days, just staying awake seems to be a bit much to ask. We want to call your attention to the woman on the left side of your screen, over Mr. Greenspan's right shoulder. She had more than a little trouble staying awake. SERWER: We're calling her the sleeping beauty of the Fed, Jack.
CAFFERTY: The problem with this is, she works for Mr. Greenspan, doesn't she?
SERWER: Yes, we think she's an employee of the Fed. And you know, brokers, floor brokers of "The New York Stock Exchange" were watching this, they were hilarious, and every time she woke up, they'd break into applause.
CAFFERTY: That's a sick group.
SERWER: Yes, it is. You know, I bet you any amount of money that next time he goes to the Hill to testify, she's not going to be sitting there.
CAFFERTY: You don't think so?
SERWER: No, I don't think so. I mean, she was very tired. It happens to all of us.
CAFFERTY: You know, I was going to say, we've all been in situations where it's been difficult to stay awake. However, if your employer, if the boss is talking -- like when I'm on "AMERICAN MORNING WITH PAULA ZAHN," when Paula's talking, I am staying awake. I'm not nodding off.
SERWER: And that time Ted Turner came in, you were very pippy.
CAFFERTY: I was very alert, very attentive. Mr. Turner, how are you?
(CROSSTALK)
CAFFERTY: You know, you've got to know when to get the naps in and when to (UNINTELLIGIBLE) naps.
SERWER: That's not a good timing.
CAFFERTY: No, it's not.
All right, what about the SEC? We've got a new chairman, I guess almost confirmed but not quite yet.
SERWER: Right, Bill Donaldson looks like he's going to be confirmed by the Senate, Jack. I wrote an article very critical of him. And basically, there are people who suggested -- this is a guy who has a golden resume, but people suggested to me that he's sort of failed up. You know, he is an old friend of the Bush family, Yale, and Skull and Bones and all that, he's kind of washed out of Washington, D.C. when he worked for Kissinger years ago, he's founded this business school at Yale. It didn't really do that well. At the NYSE, when he headed that institution up, there were questions about his tenure there. At Aetna, he worked there for a while and took a big payday. Also, his personal life, you know, this is kind of interesting. He was married to a woman, then he had affair with another woman. They had a child. Then his first wife died, and then he was able to marry the woman, so everything is OK. You know, his friends said that they were sort of disturbed by that behavior.
Listen, Bill Donaldson, prove me wrong. Show that you're going to be the best SEC head that we've ever had. I mean, I would love nothing more than that, Jack. I got nothing against the guy.
CAFFERTY: Some of the investors in this country -- I mean, President Bush, with all due respect, can't afford another failure on the financial front. I mean, the treasury secretary, Harvey Pitt, the last SEC guy. I mean, they were dropping like flies. He is very strong on the foreign policy front with people like Colin Powell and Donald Rumsfeld and Dick Cheney and Condoleezza Rice, and when it comes to the side that watches over this economy, which is not, boys and girls, in the greatest shape it's ever been in, those people came up kind of weak-kneed by comparison.
SERWER: I mean, that's the point. Can't we expect the same level of government employee on the domestic side as we have on the foreign side? And is that asking too much? You know, he's paying a lot of attention to foreign affairs. The domestic side needs that same attention. And before we're really confident in the markets, we've got to have someone to clean it up.
CAFFERTY: And nobody is going to get back into the stock market, as you suggest, until there's some sense that they're dealing off the top of the deck. And the way to get there is to have some perception that the people like in charge of the SEC know what they're doing.
The other thing to do is for the Justice Department to get some of these white collar things that are very much in question as to their morality and their ethics, let's get them to trial. Get them fitted for those suits that have the numbers right over the pockets and march them off to some place where they can make big ones out of little ones. That will go farther towards restoring investor confidence in this country than maybe anything else.
SERWER: I mean, we still haven't had any of these guys go to jail. We got one guy in Baltimore who did the fraud on the Allied Irish Bank -- I mean, that's a side show. We're talking about Enron, WorldCom, Tyco, Adelphia. Where are the jail times for these guys? I mean, they are not going to jail, but it's hard because these guys -- it's very complicated, they've got high-priced lawyers, difficult situation.
CAFFERTY: True. See what happens. Thanks, Andy.
Coming up on IN THE MONEY as we continue, the global conflict that fits on your desk top. We'll show you a Web site that takes a very wry look at that standoff in Iraq.
Then, put down the computer mouse and grab a pen. Tell us what works and what doesn't on this program. Story ideas, suggestions, comments. The address is inthemoney@cnn.com. Inthemoney is one word, and your letter has a much greater chance of being read if it's nice.
(COMMERCIAL BREAK)
CAFFERTY: The Web site of the week on IN THE MONEY this week looks in a crystal ball and predicts what will happen if the United States goes to war against Iraq. It's a bit tongue-in-cheek, but it's also got some substance, as they say. It offers explanation about who's who in the conflict, where the armies may go, what President Bush's advisers will have to say. It's not exactly a happy portrait of things to come, but it may appeal to those among us who are pessimistic. For more on this edgy war parody, and it is edgy, and it is a parody, go to the Web site. The address is on the screen. Can we make those just a little smaller maybe? And that way nobody could read it? It's I think www.idleworm.com/nws/2002/11/Iraq2...
(CROSSTALK)
CAFFERTY: But that's it.
SERWER: But go there.
CAFFERTY: Yes, and it's actually pretty cute. Cleverly done.
Time to open the mail bag, see what's on the minds of the people who watch this program. Sandy writes all the way from El Salvador: "Why not use Iraq's oil fields to foot the bill for the war and make decent lives for the Iraqi people?" Now there's a dandy good idea.
SERWER: Two thumbs up on that.
CAFFERTY: Absolutely. We'll vote for that.
James in Knoxville, Tennessee writes: "Russia, France and Germany will not side with us because they're afraid they will lose the business they have with Iraq. They would also be the first ones to call for help if Saddam attacks them."
Any truth to that?
SERWER: Well, when there's a regime change or if there is, then they won't have to worry about that, having done business with him, right?
CAFFERTY: That's true.
SERWER: OK.
CAFFERTY: All right.
And Sharon in Texas writes: "Thanks for an honest program, but what do you call it IN THE MONEY? A good percentage of us are out of the money at the present time."
SERWER: Out of the money.
CAFFERTY: I say, point well taken, Sharon. I appreciate where you're coming from.
SERWER: Call it "OUT OF THE MONEY"?
CAFFERTY: I said we're starting a program called IN THE MONEY at a time we don't have any. Nobody has any.
SERWER: She picked up on it.
CAFFERTY: Which is why the press people here don't let me go out and talk to people very often.
That's all the time we have for this day and for this week. My thanks, as always, to my friend Andy Serwer. I'm Jack Cafferty. Thanks for watching IN THE MONEY. I'll see you tomorrow morning promptly at 7:00 for "AMERICAN MORNING WITH PAULA ZAHN." Andy's on that program too. And then we'll be back here next Saturday and Sunday at 3:00 for IN THE MONEY. Have a good week.
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With Arianna Huffington; A Look at Reality TV Programs>
Aired February 16, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, HOST: Today on IN THE MONEY, homeland insecurity. Find out how the threat of terrorism is changing the way America spends its money.
Plus, hog wild. We'll speak with Arianna Huffington, an author of "Pigs at the Trough," nice title, all about her take on corporate greed and avarice in America.
Also ahead, cheap thrills. Reality TV doesn't cost much to make and it can bring in big, big bucks. We'll look at whether this is one guilty pleasure that might be here to stay.
Good afternoon. I'm Jack Cafferty. Welcome to IN THE MONEY.
It's been a little more than a week now since the homeland security people moved us back up to code orange. Officially that means the threat of a terrorist attack is high. Unofficially, it means get out to the hardware store and start buying a lot of stuff. Americans are stocking up on emergency goods, things like duct tape, plastic sheeting, spare water, food, batteries, radios. Washington says it's a good idea. Some say it might be part of the Bush economic stimulus plan.
Around the country, it sure looks like an emergency. Security is up at transportation hubs and landmarks. The U.S. Customs Service has boosted its Black Hawk helicopter patrols over the nation's capital. And on the ground below in Washington, D.C., anti-aircraft missile batteries rolling into place this week. Pretty ominous stuff.
The threat of terror changing the way we spend our money, whether we are buying that duct tape I talked about or airline tickets. For a look at that, here's today's panel. As usual, "Fortune" magazine's editor at large Andy Serwer is with us. Marion Asnes, the senior editor of "Money" magazine, and Justin Fox, also a "Fortune" magazine editor at large.
So what do you think about go out to buy batteries, waters, duct tape and sheets of clear plastic when there's no money being spent to protect the ports, the borders are still open and in fact porous in many places? Should Americans feel secure about what their government is doing to protect them from these terrorists?
ANDY SERWER, FORTUNE MAGAZINE: Well, you know, I guess it's what we're supposed to do. But it does not seem that adequate. And you ask people... JUSTIN FOX, FORTUNE MAGAZINE: It's a do-it-yourself economy, though, you know.
SERWER: You ask people about -- well, if you have nerve gas, does the plastic keep it out? No. If you have this, does the plastic -- I'm not really sure what any of this stuff does except create an environment of fear.
MARION ASNES, MONEY MAGAZINE: Well, you know, if you live outside of the major terrorist targets, I mean, it's hard for us, we're all here in New York going, oh, right, what's plastic going to do for me? But -- and we've been through this, and certainly plastic would have done nothing for you, but if you're not in New York, if you're living in a small city somewhere out in the middle of America, maybe this does make you feel better.
FOX: Plastic can set you free?
ASNES: Plastic maybe makes you feel better. I don't know. But I don't get it.
CAFFERTY: What about the argument that says, wait a minute. As I mentioned, port security is terrible, 2 percent of the containers that come into this country by ocean-going vessel are inspected, 98 percent of them are never looked at or checked at all. There are border crossings particularly up between United States and Canada virtually unattended 24 hours a day. You can go back and forth across the border with impunity. The front line responders at the state and local level have received virtually no federal money to beef up their lines of defense against alleged acts of terrorism, and they are saying go buy plastic sheets and duct tape. Now, I don't mean to make light of it, but is there a kind of a mistaken prioritizing of things here maybe?
ASNES: Well, maybe there is. You know, after 9/11, at "Money" we did the whole thing about, what should you really be doing at home to counteract terrorism? And the answer was, there really is almost nothing you can do except make sure that you have all your paperwork in the proper place, like make sure you have a will with a guardian for your minor children and make sure you have enough life insurance. Make sure you do keep a little cash in a safe place in the house.
Other than that, what are going to you do as an individual citizen?
FOX: And from the government level, they can't close the border with Canada. They probably can't inspect...
SERWER: Well, I think it would be a good idea.
FOX: They can't inspect every shipment that comes into every port. I mean, that would really shut down the economy, and it sort of did for a couple of months there after September 11.
SERWER: But, you know, it's very frustrating, Justin, that our government is telling us to do that. They are not doing some of the things Jack talked about, and they have not been able to never mind not get bin Laden, which is just incredibly frustrating for us as a nation...
(CROSSTALK)
CAFFERTY: We don't know for sure that bin Laden's still alive.
SERWER: OK, let's assume that he is, just so I can go on.
(CROSSTALK)
SERWER: Then the other point is, anthrax man or anthrax woman. I shouldn't leave out more than 50 percent of the population.
ASNES: Thank you, Andy.
SERWER: We were never able to catch this person who sent that stuff out. I mean, so now they're telling us to take care of ourselves? I mean, come on.
(CROSSTALK)
FOX: ... it's hard too.
SERWER: How do you not catch the anthrax person?
CAFFERTY: Well, apparently, one has to assume they made a Herculean effort and have just been unable to do it. They didn't catch the guy that blew up the park down in Atlanta during the Olympics, either. They thought they had him, wrecked some guy's life, and it turned out not to be him, but you know, the anthrax thing, I guess, is tough.
The other thing people are saying is that it seems highly coincidental that all of a sudden in a space of five or six days, we are raising the terrorist alert situation to code orange, we get all these instructions about get some extra water and food in the house and prepare to seal off one of the rooms -- Colin Powell sits down at an U.N. briefing session or wherever he was the other day, and says, oh by the way, wait until you hear the Al Jazeera tape that is coming out later today, which apparently was given to him, the secretary of state, by people in Qatar, as I understand it.
But, I mean, is this all coincidence? Within a period of five days, as we draw closer to the reports at the U.N. from the weapons inspectors, to a possible second resolution that we might go to France and Germany to try to get them on board for the use of military force, that all of a sudden, all of these things seem to be coalescing at precisely the same time, or am I just being cynical?
ASNES: I don't think you're being cynical at all. I think it makes perfect sense for them to all be happening at the same time. Why would we need to be elevating the alert if we weren't moving closer to a war? If we weren't concerned about more terrorism? I mean, this is what it's all about. And this is certainly, you know, the way you have to do it. You know, and as we're sitting here, I'm thinking, now, what the heck would I ever -- I am still thinking about this plastic and the duct tape. You know, you really got me on this.
FOX: You can always use duct tape, though. You always need duct tape around the house. It's a good thing to have.
CAFFERTY: You know, the Israelis, for example, I got an e-mail on the other program, "AMERICAN MORNING" I do with Paula Zahn, the Israelis issue gas masks and hazmat suits to their citizens in the event that they might be exposed to -- now, granted, it's a much smaller population and the government has had much more experience dealing with terrorism. But, the government's not saying, you know, here is a place where you can go and pick up gas masks for your children and the members of your family.
SERWER: Gas masks you need a lot of training for, too.
CAFFERTY: You do?
SERWER: No, you do need training. The other thing that's scary about that tape we were just talking about, though, is that, you know, experience shows or history shows that five to 10 days after one of those things comes out, something happens. So, I mean...
CAFFERTY: You mean the tape from bin Laden?
SERWER: Yes, right. It happened two other times, so, you know, it's very frightening. I mean, it may happen in Bali, it may happen in Europe, but it seems to happen. And so, you know, we're all walking on egg shells here. Right? I mean, it makes sense.
CAFFERTY: And is it unreasonable to ask whether or not telling the public to put extra water and food and some tape and clear plastic sheeting in their homes is just a way to maybe make people feel better when they don't know what else to tell us?
ASNES: They don't know what else to tell us, but you know, the idea of having a little bit of extra water and food, I mean, it couldn't hurt. Couldn't hurt. I mean, that's what you are supposed to do in hurricane season. Why not do it now?
CAFFERTY: One guy wrote and he said, you know, it is not going to do any good. If you've got kids, they can eat three days worth of food in 20 minutes. And then what will you do?
(CROSSTALK)
CAFFERTY: Coming up on IN THE MONEY, as we continue, bringing home the bacon. "Pigs at the Trough" is Arianna Huffington's new book about corporate greed and how to stop it. See if you buy her argument when we talk to her right after this break.
(COMMERCIAL BREAK)
CAFFERTY: The latest developments, or lack thereof in the Enron case lead today's edition of "Scandal Watch." Enron's creditors are suing CEO Ken Lay and his wife, Linda, or as President Bush used to call him, Kenny boy. The bill collectors want the Lays to pay back $84 million in loans that Enron gave them in the late 1990s. Now, that $84 million wouldn't put a dent in Enron's $50 to $100 billion overall debt, but hey, every little bit helps.
And that's not all the news this week for Mr. Lay. Kenny boy's lawyers are telling the world that Lay did nothing illegal when he sold $92 million worth of Enron stock. Now, Lay sold the stock at the same time he was acting as a public cheerleader for the company and urging people to buy Enron stock. Lay still doesn't face any criminal charges in the Enron case, and who knows whether he ever will.
Former Enron Chief Financial Officer Andrew Fastow does, though. This week, a federal judge complained the mounting pile of evidence in the case against Andrew Fastow could make the case unmanageable. Your honor, that's what you guys are paid to do, to sort through the documents and make this stuff manageable so that the justice system can proceed and do what it is we pay you, we, the taxpayers, to do, which is prosecute the bad guys and put them away someplace. Andrew Fastow faces a 78-count indictment for creating those off-the-books partnerships that helped bring Enron down and may apparently be too complicated for some of the folks in the legal system to understand.
Editorial columnist and radio talk show host Arianna Huffington has been looking at the big picture when it comes to some of these scandals. She's the author of a new book with the rather colorful title, "Pigs at the Trough: How Corporate Greed and Political Corruption Are Undermining America." She joins us now from Los Angeles. Ms. Huffington, nice to see you. Thanks for being on the program.
ARIANNA HUFFINGTON, COLUMNIST/RADIO TALK SHOW HOST: Great to see you.
CAFFERTY: One of the presidents, I don't remember which one, said the business of America is business, and if you go back to the days of Henry Ford and the oil barons and the Rockefellers, and all the rest, greed and scandal are nothing new in this country or in this economy. What's the point here?
HUFFINGTON: Well, what is new is the unholy alliance between corporate America, Wall Street and Washington. We have 20,000 registered lobbyists right now. And as I say in the book in a sidebar called "All in the Family," many of them are married to senators, are the children of senators, who Chet Lott, who went from running a pizza joint to being a powerful lobbyist, or Linda Daschle. And therefore, there is a tremendous amount of power that special interests have to put all those tax loopholes, all those special regulations or lack of regulations that have allowed all those corporate scandals to go on and to still go on. That's really at the heart of what I'm saying in the book, because it's still business as usual.
CAFFERTY: Wasn't there this great amount of outrage, though, following the WorldCom/Enron, et al stories that hit us all about a year, 18 months ago, and we got that Sarbanes-Oxley bill passed, and now everything is supposed to be all right, isn't it? I mean, didn't they fix all that stuff?
HUFFINGTON: But it's not.
CAFFERTY: Why not?
HUFFINGTON: That's the whole point. You may remember that Harvey Pitt resigned in disgrace three months ago, but he's still at the SEC, and as "The New York Times" revealed at a front page story, in charge of undermining, killing or watering down the lame reforms that were passed in the summer. And even now, as we're hearing the stories of Sprint's CEO sheltering hundreds of millions of dollars and not paying any taxes, we still have the SEC not making a clear-cut decision not to allow accountants to offer financial advice at the same time that they are auditing the company's book.
Why is it to hard to pass some common sense reforms? And why does it always have to come down to massive popular outrage before anything happens?
ASNES: Well, that is what happens in this country and we've had a whole history of having these kinds of insider things that go on and then popular outrage that sweeps it out. Think about the robber barons that Jack mentioned before, think about people like Jay Gould, who owns the railroads. Think about scandals like the Teapot Dome. What happens in this country is we have a free market economy. Some people become very successful, figure out how to manipulate the economy to get their interests. They assemble money and power, and then they screw up.
They get in big trouble. People get mad, people start to demonstrate. All these laws are passed. The economy goes through some changes, and the rules get tighter.
(CROSSTALK)
FOX: I was reading through the book, and I think the real culprit, it appears to be, is this guy Serwer sitting over here.
CAFFERTY: That's right. Absolutely.
SERWER: Why's that? Oh, yes. Well, yes, Arianna, Andy Serwer here. You quoted me in the book, twice, in the 10 stupidest things about the new economy. And you know, I didn't think they were stupid what I wrote. And I just wondered if you --
FOX: Andy wrote a lot of stupid things in the late '90s, but those two actually were pretty smart.
SERWER: I actually wondered if you actually read my article.
HUFFINGTON: Well, Andy, I have read your articles, and you've written a lot of good things, but you must admit you were a cheerleader for the new economy.
SERWER: Oh, I don't think that's right. HUFFINGTON: You were one of the people who thought it would go on forever, and the point I'm making in the book is that a lot of that cheerleading led to billions of dollars being lost in pension funds, in 401(k)s, and these are real people who got hurt. And my problem is that even now...
SERWER: Did you get hurt, Arianna? You're pretty wealthy, aren't you? Where's your money invested?
HUFFINGTON: Absolutely. Absolutely I got hurt. But you know, I could afford to get hurt. A lot of people who could not afford to get hurt got hurt.
(CROSSTALK)
SERWER: Here are the comments, Arianna. I just don't think what I wrote was wrong. "Even if the market tanks, the vast majority of us will stay in the game. We have to, because for more and more Americans, our money is no longer in the hands of schlumpy stockbrokers." I mean, what's what's not accurate about that?
HUFFINGTON: Well, first of all, the statement you made now is absolutely absurd.
SERWER: That's absurd?
(CROSSTALK)
HUFFINGTON: I'm sorry, let me just respond. I think right now, it would be insane for small investors to be in the market. It would be insane...
SERWER: It's a great time to buy.
HUFFINGTON: It would be insane to listen to advice.
FOX: It was insane three years ago. Now it's a great idea to be in the market.
HUFFINGTON: I'm sorry, let me just finish. You know, here we have all these analysts who are still not being indicted, like Jack Grubman, like Henry Blodget, who went on cheerleading they way you are continuing to do now, and people listened to them, and right now they're going to get away with some fines instead of being indicted and admitting wrongdoing.
SERWER: But what does that have to do with being invested in the stock market, Jack Grubman and Henry Blodget?
HUFFINGTON: It has everything to do with is, because until we return faith in the stock market, until we make some fundamental changes, why should small investors believe that the stocks that they're being touted are actually the way that they're being presented, instead of seeing some other kind of favors going on in the background, which is what happened during the '90s? And it's still going on. That's the key point that I'm making. ASNES: Wait a second. Now, wait a second. If what you're saying is true, then what that means is that all of us investors, and I've been in the market for many years, I certainly got hurt when the dot-com world exploded, but I'm still in the market. I'm still buying stocks. And yes, I work at "Money" magazine, but I and all the readers of my magazine don't just get our spoon-fed by analysts and told what to do. You can go on the Internet and you can look yourself at the financial papers that are filed by corporations, and for all of the ones that are fraudulent, there are also the ones that are truthful. There are at least a dozen people in America who want to do an honest job.
So what you're really saying is that we're all sort of foolish, and I don't agree with that, Arianna. I think that we're smarter than that.
HUFFINGTON: I'm saying that there are a lot of people who have the tame to go and do their own investigation, but millions of people who work as truck drivers, as school teachers, don't have either the knowledge or the time to do those investigations. And if you look at the lawsuits against Merrill Lynch, against Citigroup, brought on by ordinary investors, I write about them in the book, it really makes you want to cry for the way that these people were defrauded of savings that it took them a long time to actually build up.
(CROSSTALK)
FOX: There's also a lot of people out there with their money in index funds, where they diversified between bonds and stocks, like people are supposed to do, who made it through OK.
ASNES: Right, including school teachers like my mother.
CAFFERTY: Let me ask you this, let me ask you a question. You said you were in the stock market. Did you raise any of these questions back in the late '90s, when the market was going up 25 percent a year and you were making money hand over fist? Did you complain about the advice you were given then?
HUFFINGTON: You know, the point is that I was in Treasury bills, I was never really in the stock market in a way that a lot of people were. I never really trusted the new economy. But the point I'm making now is what you said at the beginning about Wal-Mart. It goes on all across America. You have the CEO of Wal-Mart making $17 million in 2001, while employees were not being given overtime. It's this kind of upstairs/downstairs America, as I'm calling it. And this is not a left/right issue. It's about fundamental fairness. And that's why there's outrage all across the country.
CAFFERTY: We've got to leave it there. We appreciate you being on the program. The book is called "Pigs at the Trough," the author is Arianna Huffington, she is also a syndicated columnist. Thanks for joining us.
Still ahead on IN THE MONEY, the mouse that scored. Find out about the future of Disney's lucrative deal with Pixar, the animation company that brought us "Toy Story."
Plus, risky business, the stakes get higher and the standards get lower as reality TV pushes the envelope farther. We'll look at how far the fad might go.
(COMMERCIAL BREAK)
CAFFERTY: Welcome back. The stock of the week this week is Disney. The media and theme park giant facing some tough times these days, just like all of its rivals, but Disney has another dark cloud hanging over its head that the others don't have to contend with. Its partnership with the giant animation firm of Pixar could be coming to an end very soon. The people at Pixar are the people whose computer- generated animation brought us Disney hits such as "Toy Story" and "Monsters, Inc.," a very lucrative relationship to say the least. And without Pixar on board, Disney could be in deep trouble, to the tune of losing about $170 million a year. That's what Pixar has been responsible for. So we'll find out what the panel thinks about the house of mouse.
FOX: Disney was the one entertainment company that actually made a lot of money for a while, in the '80s and '90s, and that was because they didn't have to pay stars. They paid animators. And animated movies stopped working so well, and so now they are working with Pixar in all of their work, and they're sort of stuck with the star. Pixar is a star, and Pixar can demand more money, which cartoon characters couldn't, and so it's like Disney is now stuck in the same boat as everybody else, whereas they had this wonderful period when they actually made money for their investors, which entertainment companies never do.
CAFFERTY: Except that one did, like you say, from the time Walt Disney invented the little crude drawings of Mickey Mouse back in the '30s. That thing made money.
FOX: Well, especially from when Eisner took over in the early '80s, really.
ASNES: But one thing that Disney does have going for it, though, is that it's unparalleled at distribution. And so it's certainly been good for Pixar, as well as just Pixar being good for Disney. You have an amazing ability to -- you know, to put out the movie, sell the products, market the tapes, put it on television on the Disney Channel. I mean, they really do have that whole marketing thing worked out to a tee. So, you know, a lot of this is negotiation.
SERWER: I think the Disney magic is over, Jack. I mean, they used to dominate the animated picture business. We talked about that. That's gone. I mean, Dreamworks does it just as well, so do the other studios. They used to dominate the theme park business. Everyone else has theme parks, so that's gone. And Michael Eisner -- is he still there? Oh, they haven't thrown him out? Oh, no, he's still running the company, right?
CAFFERTY: You and I have talked about that. The stock price hasn't been that great for Disney with or without Pixar under Eisner's tutelage for a good long while now. That company has been struggling with Pixar on board for the last several years, raising questions about how long the board perhaps is willing to ride with Michael Eisner as the top guy.
ASNES: Now, before Eisner took over, there was a huge internal struggle at Disney in -- what was that, in the '80s.
(CROSSTALK)
FOX: Sort of one of the beginnings of the whole shareholder value thing, and Eisner was one of the great CEOs.
SERWER: He did a great job.
(CROSSTALK)
FOX: Well, he also used to have people like...
ASNES: Katzenberg.
FOX: Katzenberg, and other people...
(CROSSTALK)
SERWER: This is a guy, he's a classic CEO who stayed on too long. I mean...
(CROSSTALK)
SERWER: ... couldn't get along with them. He couldn't get along with Katzenberg. He stayed on too long. The board is all people he knows. He's tried to fix that a little bit. But you know, the "L.A. Times," the paper in his own hometown basically trashed him a couple of months ago. That's very unusual.
CAFFERTY: It's not a good sign either when you're in the corner office and the hometown newspaper is asking questions. Very bad. Very bad.
Coming up on IN THE MONEY as we continue, bulldozer. If just listening to Fed Chairman Alan Greenspan makes you want to lie down to take a nap, well, we'll show you a woman who's fighting the urge. She's over his right shoulder.
Plus, plot lines and bikini lines. We'll look at how reality TV turned sin and skin into the media fad and bank deposit of the decade.
(COMMERCIAL BREAK)
(NEWSBREAK)
CAFFERTY: Reality TV reached a new high this week, or maybe a new low, by raising the ante on an old hit show. "Daily Variety" says the producer who brought the world "Who Wants To Be a Millionaire," is working on a new WB show which will be titled, "Who Wants To Be a Billionaire?" Now, words like billionaire and millionaire, as in "Joe Millionaire," show up a lot on television these days. So do deceit, sex and the kind of competitive spirit that would make Vince Lombardi proud.
Producers love reality TV. It's cheap to make and it's lucrative to put on the air. Those are the two watch words for television production. Cheap to make, lucrative to put on the air. And there's every sign that audiences like this stuff, too. Reality TV isn't going away any time soon, au contraire, much as some people might like it to. For a look at why America can't stop looking in other people's windows in during prime-time and why the networks can't stop producing this, we're joined by Bob Thompson, who is the director of the Center for the Study of Popular TV at Syracuse University, and he joins us now from our studios here in New York City. Bob, nice to have you on the program. Thanks for joining us.
ROBERT THOMPSON, CENTER FOR STUDY OF POPULAR TV: Hey, thanks.
CAFFERTY: What does it say about as collectively as a society that we like to spend our evenings looking in other people's windows and dwelling on their discomfort, their lack of clothing, their little picadillos, whatever. I mean, we're a nation of voyeurs, aren't we?
THOMPSON: Well, we are, and I think we came by this honestly. My guess is that probably the Neanderthal who was looking into other Neanderthals' cave learned stuff occasionally that was valuable to survival. We are curious. We like seeing what people do in their personal lives. And you know, any time you've ever overheard a subway conversation or peered into the medicine cabinet of your party host, we do like this kind of thing, and the thing that television does for us now is that instead of having to be a peeping Tom and risk arrest and...
CAFFERTY: You don't have to be out walking around the neighborhood at night with binoculars, risking the cops running you down. You can sit in your living room and do this.
THOMPSON: There you go. It brings the window right into your living room, and I think that is a delicious temptation to an awful lot of people, and I have to confess, myself included.
CAFFERTY: Yes. Which, the walking around the neighborhood or watching the reality TV? You can tell us, Bob, you're among friends.
THOMPSON: Things like "Temptation Island." I have got to confess to you, and I used to call these guilty pleasures. Now I just call them pleasures. Sure, the professor side of me, says what are you doing wasting your time watching this horrible stuff? But the other side of me says, more, more, more.
CAFFERTY: Absolutely. Plus you can always rationalize it by saying I'm doing research for tomorrow's class.
THOMPSON: Well, that's the genius of the system.
CAFFERTY: The rest of us have no excuse.
(CROSSTALK)
CAFFERTY: How sleazy can this stuff get before the public says, all right, that's enough?
THOMPSON: Well, I think we haven't seen the bottom of the barrel yet, but I think we're getting pretty close, because in the end, sleaze itself isn't going to run this stuff. You have got to have fairly decent story telling. The reason "The Bachelor" and "The Bachelorette" does so well is that there's this hammering narrative of who he is going to choose, same with "American Idol." The Victoria's Secret underwear commercials specials that played an hour long didn't do well in the ratings, and my guess is that...
CAFFERTY: I watched those.
THOMPSON: Well, so did a lot of people, but not as many. I don't think "Are You Hot" is going to do as well as "Joe Millionaire," because there isn't this story that people want to tune in week after week and watch. It's going to be a bunch of pixilated bodies with certain parts blurred with electronic manipulation.
SERWER: Bob, you know, it's interesting from a business standpoint, these shows are cheap to make, as Jack said, and people like them, but there is no reruns. Right? You can't run them again. So isn't that a problem for the TV networks?
THOMPSON: You're absolutely right. You know, these things rode in like the Calvary to save the networks just when they needed it, $14 million per episode, "ER," $1 million per friend per episode for "Friends." And this was a kind of Band Aid solution.
But two things are going to happen -- No. 1, eventually there will be a saturation. This stuff will never go away, but it is going to shake down a bit. And if they change their whole business model depending upon this, No. 1, they are going to suddenly find when it doesn't work as well, that they have got all kinds of holes to fill with expensive programming that they haven't budgeted, and then you're absolutely right, nobody wants to watch a rerun. Who's going to sit down and watch the nine episodes of the Aaron Burgie (ph) cycle of "Bachelor" the second time around like they will watch "Seinfeld" the 50th time?
FOX: Oh, I want to watch "Joe Millionaire" again. Don't you? One of the things that's interesting about this from the perspective of Hollywood is that it's not -- it's good for the networks, but it's not good for the Hollywood studios, especially because these things are huge overseas too, and a lot of the ideas actually came from Europe. "Big Brother." "American Idol," which was "Pop Idol" in the U.K. before it came here.
ASNES: And even "Survivor," I think.
FOX: Yes, "Survivor" was British, although they ran it here first. And so they're displacing on all these TV channels in Europe, they are displacing the "Seinfeld" and the "Friends" and all the stuff that makes money for Warner Brothers and Disney and whatever else.
So it's not a win on all sides for the American entertainment business.
THOMPSON: Yes, they are. First of all, I think this was actually our idea with the "Real World" in 1992.
FOX: Right, that's true. "Real World" started it.
(CROSSTALK)
THOMPSON: Yes, sort of, although this is -- "Real World" was the real kind of thing that did this. But then our executives all ignored that. They let MTV have that franchise for eight straight years. People overseas saw gold. They ripped it off. It was like rock 'n' roll. It started here, it goes to Europe, it comes back in the British invasion.
It is true. There are a lot of slots now that would be being filled with other things, but as a viewer, as a regular American, I'm not sure how much we're suffering. If it was between an episode of "High School Reunion" or "American Idol," which is a little different -- yes, they're a little sleazy, sometimes vile, but at least interesting, and yet another episode of yet another sitcom or another "Law & Order" franchise, I've got to say, I think I'd go with this new, interesting story telling form. At least for another year or two, until we're completely so abjectly tired of it that we're ready to go back to "Suddenly Susan."
CAFFERTY: Let me ask you about...
ASNES: Never!
CAFFERTY: "Suddenly Susan," yes, "The Perils of Pauline." Let me ask you about something that's subtly different than the reality shows, the crop than we're seeing now. CBS has been toying with the idea of putting a show called "Beverly Hillbillies" on the air, using actual people from somewhere perhaps in Appalachia. Now, the rest of these shows are populated by people who choose to make fools of themselves in front of a national television viewing audience. I mean, if you go on "Survivor," you know what you're signing on for. If you take a group of real people from a backwoods part of this country and instead of letting them participate in the joke, in fact sort of poke fun at them, is that -- it seems to me that's a big risk, that could backfire big time. Do you have any thoughts on that?
THOMPSON: Well, it's going to depend on how they execute it. But first of all, it's not like they're going to take a helicopter down there and shanghai these people to the CBS studios. I've found the objections to this -- I think the heart is in the right place for people that are objecting to this, but I think it's kind of condescending and patronizing to people, rural people, you know, who may live in West Virginia or in hills.
ASNES: And they've all got satellite TV. THOMPSON: Yes. I mean -- and here's why. It's -- we think it's OK if beautiful young women decide to go and make fools of themselves on these shows. We think it's OK if millionaires decide to go and find their wives and make fools of themselves.
But somehow we have got this idea, oh, rural folks. Shouldn't they be on the porch whittling something and rocking in a home made chair? And I, frankly, think that's a little patronizing. Those guys have every bit as much right, I suppose if they want, to make fools of themselves, to become famous and maybe possibly rich, as all the rest of us do. I wouldn't do it. You probably wouldn't do it, but if they want to do it and if I were poor living in the mountains, a couple of months in a Beverly Hills mansion with a maid and a swimming pool sounds pretty good to me.
CAFFERTY: Touche. Your point is well taken. Bob, we've got to leave it there. Thank you for sitting here, visiting with us on this subject.
THOMPSON: My pleasure.
CAFFERTY: Bob Thompson, director of Center for Media Studies up in Syracuse University upstate New York. We have to take a small break. Make a couple of dollars for Mr. Walton and the rest of his family here at CNN. And then it's back to the tea leaves; the panel unveiling the predictions for the weeks ahead. We'll be back after this.
Plus, a Web site even Nostradamus might check out. We're going to show you a Web site that charts the potential course of war against Iraq. It's a little funny, a little serious, a little scary, but it's a little funny. I said that.
(COMMERCIAL BREAK)
CAFFERTY: Time now for our intrepid panelists to break one of journalism's golden rules. They are going to speculate about what may lie ahead for all of us, business-wise. Start with you, Andrew?
SERWER: All right, I'll start. I mean, I don't know how business this is, but the Michael Jackson rebuttal TV show will not be watched by anyone who is sane.
CAFFERTY: Why do you say that?
SERWER: I don't think anyone is going to watch -- see, I think you're wrong. I think the Michael Jackson thing, enough. We're done. I think it's over. People are not going to pay attention to it anymore.
CAFFERTY: Twenty-six million viewers watched that thing on ABC the other night. They paid $5 million to buy that documentary from the kid in England who made it, and they got an audience of 26 million -- I don't know for how much they sold the spots...
SERWER: I'd rather watch the dog show, I mean, come on. CAFFERTY: Well, some would say there's not a lot of difference.
(CROSSTALK)
CAFFERTY: Marion.
ASNES: Oh, God, you know, you hit me at a bad time.
(LAUGHTER)
ASNES: I do have a prediction. I forgot it. You go and I'll come back.
FOX: Well, I have got an easy one. On this show next weekend, and the weekend after that and the weekend after that, and the weekend after that, we're going to be talking about Iraq and its impact on the U.S. economy. I have had it. I just can't take it anymore. These stories -- and I think the whole economy can't take it. I mean, that's the problem.
CAFFERTY: Everybody's getting fatigued on it. I absolutely agree. You know, nobody wants a war. But, at the point we're at, either, you know, I wish Saddam would either go into hiding and agree to go to some other country and go into exile, or, you know, or let the games begin and let's get it off the front page. I'm like you, I'm worn out with it.
ASNES: OK, I remember my prediction now. Arianna Huffington is going to run for president.
CAFFERTY: Oh, that's swell. Gee. Took you all that time to think of that?
FOX: She can't. She's not allowed to.
ASNES: Oh, that's right. She's not American.
(CROSSTALK)
ASNES: ... not born here, right. Her and Henry Kissinger. Neither one of them can run.
FOX: So she could be secretary of state.
ASNES: She could be a senator.
FOX: That's true. OK. Great.
CAFFERTY: There are a lot of questionable people in that job, aren't there?
ASNES: Go get your duct tape!
CAFFERTY: Yes. I suppose you're right. What about a prediction on how much longer the debate over what we're going to do about Iraq goes on? You figure that the war starts any time soon? SERWER: Everyone's been saying that, but we've been saying that for weeks now. I mean, but you really are starting to see a massive buildup.
FOX: And there's the whole hot weather thing. You either got to do it before it gets hot, or wait a year.
SERWER: I mean, you know, it's a bluff that president knows he may get called on. In other words, we're sending all those troops over. Best case scenario is, some country decides to take him into exile, and the whole thing just gone that way. Wouldn't that be wonderful?
(CROSSTALK)
ASNES: That would be great.
CAFFERTY: Terrific. Let them set up a democracy in that country and rebuild their lives.
FOX: He's just not going to want to go into exile. He just knows that anywhere he goes, he's killed so many people's mothers and fathers...
SERWER: But there are a lot of dictators who are in exile, so it's not...
ASNES: That's true, but I just can't see him blinking. I mean, if they're playing brinkmanship, I think they're playing with the wrong guy.
CAFFERTY: Plus, he's nuts. I mean, you can't make a deal with a madman. I think he's nuts. I'm not a shrink, but I think he's nuts.
All right. Time to say good-bye to some of our panels. See, we got those predictions done, not a big deal. Our thanks to Marion Asnes, as always, senior editor of "Money" magazine, and a tip of the hat to Justin Fox, editor at large of "Fortune." Andy and I will be back. During in the bull market of the '90s when Chairman Alan spoke, investors listened. These days when he talks, people go to sleep. Wait until you see this tape. Watch the lady over his right shoulder.
The Web site of the week, a rather bizarre take on the potential fallout for a war with Iraq. Duck and cover. But don't go anywhere. We'll be right back.
(COMMERCIAL BREAK)
CAFFERTY: Fed Chairman Alan Greenspan delivered his twice yearly thoughts on the future of the economy this week on Capitol Hill, and as usual, electrified the crowd. Back in the high flying '90s, people would be on the edge of their seats hearing the latest pronouncements from the man. But these days, just staying awake seems to be a bit much to ask. We want to call your attention to the woman on the left side of your screen, over Mr. Greenspan's right shoulder. She had more than a little trouble staying awake. SERWER: We're calling her the sleeping beauty of the Fed, Jack.
CAFFERTY: The problem with this is, she works for Mr. Greenspan, doesn't she?
SERWER: Yes, we think she's an employee of the Fed. And you know, brokers, floor brokers of "The New York Stock Exchange" were watching this, they were hilarious, and every time she woke up, they'd break into applause.
CAFFERTY: That's a sick group.
SERWER: Yes, it is. You know, I bet you any amount of money that next time he goes to the Hill to testify, she's not going to be sitting there.
CAFFERTY: You don't think so?
SERWER: No, I don't think so. I mean, she was very tired. It happens to all of us.
CAFFERTY: You know, I was going to say, we've all been in situations where it's been difficult to stay awake. However, if your employer, if the boss is talking -- like when I'm on "AMERICAN MORNING WITH PAULA ZAHN," when Paula's talking, I am staying awake. I'm not nodding off.
SERWER: And that time Ted Turner came in, you were very pippy.
CAFFERTY: I was very alert, very attentive. Mr. Turner, how are you?
(CROSSTALK)
CAFFERTY: You know, you've got to know when to get the naps in and when to (UNINTELLIGIBLE) naps.
SERWER: That's not a good timing.
CAFFERTY: No, it's not.
All right, what about the SEC? We've got a new chairman, I guess almost confirmed but not quite yet.
SERWER: Right, Bill Donaldson looks like he's going to be confirmed by the Senate, Jack. I wrote an article very critical of him. And basically, there are people who suggested -- this is a guy who has a golden resume, but people suggested to me that he's sort of failed up. You know, he is an old friend of the Bush family, Yale, and Skull and Bones and all that, he's kind of washed out of Washington, D.C. when he worked for Kissinger years ago, he's founded this business school at Yale. It didn't really do that well. At the NYSE, when he headed that institution up, there were questions about his tenure there. At Aetna, he worked there for a while and took a big payday. Also, his personal life, you know, this is kind of interesting. He was married to a woman, then he had affair with another woman. They had a child. Then his first wife died, and then he was able to marry the woman, so everything is OK. You know, his friends said that they were sort of disturbed by that behavior.
Listen, Bill Donaldson, prove me wrong. Show that you're going to be the best SEC head that we've ever had. I mean, I would love nothing more than that, Jack. I got nothing against the guy.
CAFFERTY: Some of the investors in this country -- I mean, President Bush, with all due respect, can't afford another failure on the financial front. I mean, the treasury secretary, Harvey Pitt, the last SEC guy. I mean, they were dropping like flies. He is very strong on the foreign policy front with people like Colin Powell and Donald Rumsfeld and Dick Cheney and Condoleezza Rice, and when it comes to the side that watches over this economy, which is not, boys and girls, in the greatest shape it's ever been in, those people came up kind of weak-kneed by comparison.
SERWER: I mean, that's the point. Can't we expect the same level of government employee on the domestic side as we have on the foreign side? And is that asking too much? You know, he's paying a lot of attention to foreign affairs. The domestic side needs that same attention. And before we're really confident in the markets, we've got to have someone to clean it up.
CAFFERTY: And nobody is going to get back into the stock market, as you suggest, until there's some sense that they're dealing off the top of the deck. And the way to get there is to have some perception that the people like in charge of the SEC know what they're doing.
The other thing to do is for the Justice Department to get some of these white collar things that are very much in question as to their morality and their ethics, let's get them to trial. Get them fitted for those suits that have the numbers right over the pockets and march them off to some place where they can make big ones out of little ones. That will go farther towards restoring investor confidence in this country than maybe anything else.
SERWER: I mean, we still haven't had any of these guys go to jail. We got one guy in Baltimore who did the fraud on the Allied Irish Bank -- I mean, that's a side show. We're talking about Enron, WorldCom, Tyco, Adelphia. Where are the jail times for these guys? I mean, they are not going to jail, but it's hard because these guys -- it's very complicated, they've got high-priced lawyers, difficult situation.
CAFFERTY: True. See what happens. Thanks, Andy.
Coming up on IN THE MONEY as we continue, the global conflict that fits on your desk top. We'll show you a Web site that takes a very wry look at that standoff in Iraq.
Then, put down the computer mouse and grab a pen. Tell us what works and what doesn't on this program. Story ideas, suggestions, comments. The address is inthemoney@cnn.com. Inthemoney is one word, and your letter has a much greater chance of being read if it's nice.
(COMMERCIAL BREAK)
CAFFERTY: The Web site of the week on IN THE MONEY this week looks in a crystal ball and predicts what will happen if the United States goes to war against Iraq. It's a bit tongue-in-cheek, but it's also got some substance, as they say. It offers explanation about who's who in the conflict, where the armies may go, what President Bush's advisers will have to say. It's not exactly a happy portrait of things to come, but it may appeal to those among us who are pessimistic. For more on this edgy war parody, and it is edgy, and it is a parody, go to the Web site. The address is on the screen. Can we make those just a little smaller maybe? And that way nobody could read it? It's I think www.idleworm.com/nws/2002/11/Iraq2...
(CROSSTALK)
CAFFERTY: But that's it.
SERWER: But go there.
CAFFERTY: Yes, and it's actually pretty cute. Cleverly done.
Time to open the mail bag, see what's on the minds of the people who watch this program. Sandy writes all the way from El Salvador: "Why not use Iraq's oil fields to foot the bill for the war and make decent lives for the Iraqi people?" Now there's a dandy good idea.
SERWER: Two thumbs up on that.
CAFFERTY: Absolutely. We'll vote for that.
James in Knoxville, Tennessee writes: "Russia, France and Germany will not side with us because they're afraid they will lose the business they have with Iraq. They would also be the first ones to call for help if Saddam attacks them."
Any truth to that?
SERWER: Well, when there's a regime change or if there is, then they won't have to worry about that, having done business with him, right?
CAFFERTY: That's true.
SERWER: OK.
CAFFERTY: All right.
And Sharon in Texas writes: "Thanks for an honest program, but what do you call it IN THE MONEY? A good percentage of us are out of the money at the present time."
SERWER: Out of the money.
CAFFERTY: I say, point well taken, Sharon. I appreciate where you're coming from.
SERWER: Call it "OUT OF THE MONEY"?
CAFFERTY: I said we're starting a program called IN THE MONEY at a time we don't have any. Nobody has any.
SERWER: She picked up on it.
CAFFERTY: Which is why the press people here don't let me go out and talk to people very often.
That's all the time we have for this day and for this week. My thanks, as always, to my friend Andy Serwer. I'm Jack Cafferty. Thanks for watching IN THE MONEY. I'll see you tomorrow morning promptly at 7:00 for "AMERICAN MORNING WITH PAULA ZAHN." Andy's on that program too. And then we'll be back here next Saturday and Sunday at 3:00 for IN THE MONEY. Have a good week.
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