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CNN LOU DOBBS MONEYLINE
U.S. Families Told They Cannot Adopt Chinese Children Due to SARS
Aired May 16, 2003 - 18:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JAN HOPKINS, HOST: Hi, Kyra, and good evening, everyone. Tonight, a new terror warning. Intelligence agencies say another attack by al Qaeda could be imminent. David Ensor will have the report.
SARS heartbreak. Thousands of U.S. families have been told they cannot adopt Chinese babies because of the SARS virus. Kitty Pilgrim will have a special report.
And mourning of superstar agent. We'll have a special tribute to a man who was once called the most powerful person in sports.
But first, U.S. intelligence officials tonight say there are strong indications that al Qaeda may be planning more terrorist attacks, possibly in the next few days. The State Department says there has been an unconfirmed report that terrorists could strike in the Saudi city of Jeddah.
President Bush said the attacks last week, or rather, this week, in Saudi Arabia are a reminder that the United States is still at war. National security correspondent, David Ensor, has more.
(BEGIN VIDEOTAPE)
DAVID ENSOR, CNN NATIONAL SECURITY CORRESPONDENT (voice-over): Well-placed U.S. sources say there's evidence the terrorists who attacked three sites in Riyadh Monday night believe they had orders to do so from the top al Qaeda leadership. The working assumption of U.S. investigators, therefore, is that the orders may have come from Osama bin Laden himself. But U.S. officials warn they do not have any evidence in hand so far that bin Laden himself gave a go signal for the attacks.
With some reports questioning whether the Saudis responded to American requests for better security, the Saudi government held a news conference in Washington Friday to express sorrow and resolve.
ADEL AL-JUBEIR, SAUDI FOREIGN AFFAIRS ADVISOR: Have we failed? Yes. On Monday, we failed. And we will learn from this mistake. We will ensure that it doesn't happen again. And, if anything, this tragic events of Monday have been a massive jolt to Saudi Arabia, to the United States, to all peace-loving people around the world.
ENSOR: Al-Jubeir denied a report that White House official, Stephen Hadley, when he visited Riyadh recently, brought specific intelligence about threats to housing compounds. AL-JUBEIR: I think that that visit is mischaracterized.
ENSOR: U.S. and Saudi sources say the two nations agreed before the attacks to set up a new secure communications system at the U.S. Embassy, allowing the two to share intelligence reports in greater detail and with much greater speed.
AL-JUBEIR: One of the suggestions we offered to the U.S. government about two weeks ago was just that, that we will have one unit working together instantaneously.
ENSOR: But There are more immediate concerns. The State Department warned that an attack could occur in the near future in Jeddah, Saudi Arabia. U.S. officials are calling the intelligence credible, if unconfirmed.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's this dangerous in the world, and it's dangerous in Saudi Arabia, and it's dangerous so long as al Qaeda continues to operate, and so we'll chase them down.
(END VIDEOTAPE)
ENSOR: There is information suggests terrorists may be plotting attacks in Southeast Asia, in other Middle East countries, and in East Africa. The State Department has now authorized nonessential personnel to leave Kenya, as well as any U.S. families that may want to do so. They are saying that's just a prudent step. Jan?
HOPKINS: Kenya's not a particular target? The whole area?
ENSOR: There is some evidence that Kenya might be of special interest to terrorists, although they're also concerned about some of the other countries in the area, Somalia, for example.
HOPKINS: David Ensor, thank you.
An FBI team has arrived in Saudi Arabia to investigate the bombings. Tonight, CNN learned the Saudis have agreed to allow a second team of investigators into the country. Senior international correspondent, Sheila MacVicar, reports from the Saudi capital, Riyadh.
(BEGIN VIDEOTAPE)
SHEILA MACVICAR: CNN SENIOR INTERNATIONAL CORRESPONDENT (voice- over): As the (UNINTELLIGIBLE) compounds, the bulldozer was at work scraping away the debris from Monday night's attack and scraping away evidence, too.
FBI investigators have been in Saudi Arabia for little more than 24 hours, but there's not much of a crime scene left for them to examine here, a few bullet holes in the guard tower, damaged homes in the compounds, eerily quiet streets, and very jittery workers.
MOHAMMED ZUBEIR, COMPOUND WORKER: In the daylight, when it's all clear, we feel safe, but in the night, when night comes, when it is dark and people spread all this kind of rumors, you feel little unsafe, especially in the western compound.
MACVICAR: (on camera): It was just a few miles from here on May the 6th that Saudi authorities discovered that huge cache of weapons and explosives and shortly after that announced that they looking for 19 men, who they said they believed were preparing to imminently carry out terrorist attacks.
What residents in this compound say they cannot understand is why security here was not strengthened then.
MACVICAR: (voice-over): On guard today, Saudi air force guards with a heavy machine gun. They were not here on Monday night, even though the U.S. Ambassador had specifically told officials this compound could be a target days before the attack.
In Washington, a Saudi advisor tried to explain why, in spite of the warnings of the U.S., in spite of the discovery of the weapons and explosives, more was not done to protect the Jedawah (ph) and the other compounds.
AL-JUBEIR: I think the security at the time was thought to be adequate, but it turns out it was not.
MACVICAR: With warnings of more possible attacks and a belief that western civilians here are now seen as legitimate targets in the terrorist war, many say here off camera they are thinking about packing up, going home, and taking their expertise with them, and that's perhaps exactly what the terror bombers had in mind.
Sheila MacVicar, CNN, Riyadh, Saudi Arabia.
(END VIDEOTAPE)
HOPKINS: The mystery of what happened to hundreds of Kuwaiti prisoners from the Gulf War of 1990 may be close to being solved tonight. The Iraqi National Congress says it has found a mass grave that may contain the bodies of 600 Kuwaiti servicemen. The INC says the bodies were found at an air base in the town of Habbaniyah near Baghdad. CNN has not independently confirmed that report.
The coalition today banned up to 30,000 members of Saddam Hussein's Ba'ath Party from participating in any future government in Iraq. The new U.S. administrator in Iraq, Paul Bremer, promised tough action against former members of Saddam Hussein's regime. He took over the administration earlier in the week.
Bremer has tapped former New York City Police Commissioner, Bernard Kerik, for advice on re-establishing law and order in Iraq. Kerik will leave New York for Baghdad this weekend. Kerik was widely praised for his role in reducing crime in New York. He also led the New York Police Department through the September 11th terrorist attacks.
Many Iraqis say the coalition is not doing enough to maintain security. John Vause has that story from Baghdad.
(BEGIN VIDEOTAPE)
JOHN VAUSE, CNN CORRESPONDENT (voice-over): Bassam Illah never owned a gun before. Now he has two, a double-barrel shotgun and (UNINTELLIGIBLE) Russian-made pistol. He bought them to protect his family from the armed gangs which now roam this city.
BASSAM ILLAH, BAGHDAD RESIDENT: People are being killed and loot -- their homes are looted, so we can't take any chances, you know. We should defend ourselves.
VAUSE, With a younger brother, Bassam spends his nights keeping watch on the roof of his house. The pistol under his pillow, the shotgun by his side.
ILLAH: We are not used to this life, this kind of life. So, we're terrified, actually.
VAUSE: Like a growing number of ordinary Iraqis, Mousa Hassan he is now armed and terrified. He bought his AK-47 for $60. The last time he handled a weapon was during his days in the army ten years ago.
MOUSA HASSAN, IRAQ RESIDENT (through translator): This whole neighborhood is armed. I was the only one who didn't own a weapon. So I had to buy a gun since I was afraid for my children and family.
VAUSE: Just two weeks ago at a El Salon (ph) gun market, an AK- 47 sold for about $15. But demand has forced prices up, way up. Now they're asking close to $90. This dealer will throw in an anti- aircraft round for free. But an Italian-made sub machine gun will cost more than $1,000. Need ammunition? Buy it from the children.
(on camera): Baghdad is literally awash with weapons. And announcement by U.S. officials here, demanding that all firearms be handed in, seems almost laughable. Most Iraqis believe that they have the right to bear arms, especially while the Americans are doing little to guarantee their safety.
John Vause, CNN, Baghdad.
(END VIDEOTAPE)
HOPKINS: The White House today said that President Bush is hopeful about the prospects for Middle East peace. The statement came ahead of talks between Israeli and Palestinian prime ministers this weekend.
(BEGIN VIDEO CLIP)
AIR FLEISCHER, WHITE HOUSE PRESS SECRETARY: This is a moment that the president wants to step back from, urge each party to focus on what it is they need to do to advance the cause of peace, and not worry so much about what the other party may not be doing, but to focus on what they, individually, need to do to advance peace.
(END VIDEO CLIP)
HOPKINS: In the Middle East today, a surprise resignation by a top Palestinian negotiator. Sahib Aracot (ph), an ally of Yasser Arafat, not the new Palestinian prime minister. Kelly Wallace reports from Jerusalem.
(BEGIN VIDEOTAPE)
KELLY WALLACE, CNN CORRESPONDENT (voice-over): What changed? After all, Sahib Aracot (ph) was all smiles Sunday during the U.S. Secretary of State's meeting with the new Palestinian government. Aracot (ph) was tight lipped, telling CNN his decision to resign was based on, quote, "a lot of things", dismissing, as quote, "nonsense" reports he was enraged that Palestinian Prime Minister Mahmoud Abbas plans to bring along two advisors, but not Aracot, to his landmark Saturday meeting with Israel's Ariel Sharon.
But Palestinian observers think, Aracot, a Yasser Arafat loyalist, feels slighted.
MAHDI ABDUL HADI, PALESTINIAN ANALYST: I don't think this resignation is the final. It's somebody defending his job description and wants to maintain the role within the system.
WALLACE: Taking center stage this weekend, Mahmoud Abbas and Ariel Sharon. The two men have met before, but this will be their first meeting in their roles as prime ministers, and the first summit since the latest conflicts began 31 months ago.
It is significant the two sides are talking, but conservative Israeli analyst, Gerald Steinberg, agrees with what many Mideast observers are saying.
GERALD STEINBERG: ISRAELI ANALYST: Substantially, we can expect very little. Both leaders know that very little is going to come out of this process.
WALLACE: Both leaders will be armed with different agendas. Palestinian sources says Abbas will tell Sharon until Israel accepts and implements the so-called Mideast road map, Palestinians should not be expected to carry out their side of the bargain, cracking down on groups responsible for suicide attacks against Israel.
Sharon will say to Abbas, Israeli sources say, that until the Palestinians take real action to quote, "dismantle and disarm" groups like Hamas, Israel will not take other steps, such as pulling troops out of Palestinian towns.
(on camera): One possible outcome from Saturday's session, both sides say, could be a meeting soon of Israeli and Palestinian security officials. Beyond that, though, both sides agree that the next step will likely depend on what happens in Washington Tuesday, that's when Prime Minister Sharon sits down with U.S. President Bush.
Kelly Wallace, CNN, Jerusalem.
(END VIDEOTAPE)
HOPKINS: Still to come tonight, our quote of the day and the fight against terrorism within Saudi Arabia.
And then another sad turn in the SARS outbreak leaves thousands of children without families. Kitty Pilgrim will have that special report.
And later, the hunt for evidence in the Laci Peterson case draws investigators back to San Francisco Bay. We'll have a live report coming up.
(COMMERCIAL BREAK)
HOPKINS: The Justice Department says it has charged 135 people in a new crack down on internet fraud. Attorney General John Ashcroft says that 50 people were arrested just this week. Operation Econ has targeted online banking and investment scams, identity theft, and other farms of fraud. The Justice Department says so far, it has uncovered 89,000 victims who have lost a total of $176 million.
Stocks fell slightly today, partly on new concerns about deflation. Consumer price index fell by .3 percent in March. It's the largest drop in 18 months. The Dow Jones industrial average lost 34 points. It closed at 8,678. The Nasdaq fell 12 points from its 11-month high yesterday, and the S&P 500 lost two points.
Christine Romans has more on the market for the week. Christine?
CHRISTINE ROMANS, CNNfn CORRESPONDENT: Jan, stocks also held back today by a 6.8 percent drop in housing starts, but it was the third week in a row of gains for the Dow, and the S&P 500 and the Nasdaq strung together five higher weeks in a row now. The S&P hasn't had five in a row since August last year.
Now, today you saw strength in dividend-paying utility stocks, one of the best sectors. Traders credited the Senate passage of a tax cut plan for that.
As for the money flows, April saw a rush of money into stock mutual funds, the best in a year. Lipper says $14 billion flowed into equities, $9 billion into bond funds, $55 billion rushed out of money funds, partly because of tax season. Analysts say the real test now is whether inflows continue, as stocks move sideways or slip a bit after the stellar spring rally.
So far for the month of May, most analysts expecting inflows are continuing. Jan?
HOPKINS: But, Christine, what about bonds? You talked about stocks. Bonds have been doing well, too.
ROMANS: Absolutely. And another big day today for bonds. You're looking at a 10-year note yield of 3.42 percent. These are historic lows, 45-year lows. On the 30-year bond, that yield at 4.41 percent. It was the best two weeks -- best two-week period in the bond market in about seven or eight years.
HOPKINS: Very interesting. I refinanced my mortgage again today.
ROMANS: Good for you.
HOPKINS: It has been 529 days since Enron filed for bankruptcy. Sixty-five executives from all of corporate America have been charged, 15 of them from Enron. No one has been sent to jail, though.
Enron auctioned part off of its extensive art collection yesterday. It raised about $1 million to pay off creditors. Among the 10 pieces sold was Klaus Oldenberg's soft light switches. That's -- there we go. That's the soft light switches. It's a vinyl orange piece that sold for $360,000, and I think that means that Enron lost money. I think they paid about $500,000 two years ago when they bought it.
More art work auctioned off today, bringing in another $103,000. The collection was purchased by Enron's in-house art committee in the glory days just a couple of years ago. The committee was headed by Lea Fastow, the wife of former chief financial officer, Andrew Fastow. Lea and Andrew Fastow are now among the 15 Enron executives that have been charged.
Now our nightly look at the national debt. Tonight it stands at more than $6,460,546,483,103.39, and that means that your family share is $69,715.
Turning now to our quote of the day, it comes from is a Saudi government official who has some harsh words for the perpetrators of the Monday's suicide bombings on Riyadh. "These people are against civilization. These people are against modernity. These people are filled with hate and anger, and they have declared war on the U.S. We will take up the challenge, and we will crush them." That is from the Foreign Affairs Advisor to Saudi crown prince.
When we come back, more heartbreak from the SARS epidemic. Kitty Pilgrim will have the story of thousands of children left behind.
And then, another truck full of immigrants discovered in Texas. We'll have the very latest on that and much more.
(COMMERCIAL BREAK)
HOPKINS: Taiwan's health minister is out of a job tonight. He resigned after criticism of his handling of the SARS outbreak. Two hospitals have been shut down, and now two doctors have died from the virus.
Health officials are blaming sewage leaks for a major SARS outbreak at a Hong Kong apartment complex. Three hundred people in that complex became infected, 35 of them died from SARS. Worldwide, more than 7,700 people have been infected by the virus, 611 people have died.
A quarter of all overseas adoptions come from China. Tonight, these adoptions have been put on hold by the Chinese government, fearful of spreading SARS to other countries. Kitty Pilgrim has the report.
(BEGIN VIDEOTAPE)
KITTY PILGRIM CNNfn CORRESPONDENT (voice-over): In Virginia, Jared and Kay Bernstein adopted three-and-a-half-year-old Ellie in July of 2000. They all went back to pick up Kate three months ago, the entire family traveling into the heart of SARS country, China's Guangdong province. They had no idea how close they came to risk.
JARED BERNSTEIN: As we were headed over to China, I read about a mysterious illness in Guangzhou, which is where we were headed, and turned out to be ground zero for SARS. But it wasn't called SARS yet. At that time, I decided not to tell my wife and Ellie about it. We were going over at that time to get Kate, so I kept it to myself.
PILGRIM: In North Carolina, the McManamons made another decision. Fr their third adoption, just a few weeks ago, when SARS was a household word, only the dad, Tracy, made the journey to pick up one-year-old Madeline.
TRACY MCMANAMON: On the way over, I was a little nervous. We flew from Chicago to Beijing, and the plane was virtually empty, so it was a little bit disconcerting to see so few people going to China. In the prior two trips, the planes were always booked.
PILGRIM: A quarter of all the overseas adoptions come from China. During the 1990s, adoptions from China boomed, now at about an average of 5,000 a year. Chinese orphanages are filled with girls because the policy of the government is to restrict families to only one child, and boys are more valued.
It takes about a year-and-a-half to two years to get through the process. Adoption agencies say the current delay is hard on families who have received the pictures and were waiting for papers to travel.
SUSAN COX, HOLT INTERNATIONAL CHILDREN'S SERVICES: The difficult part is for families who were expecting to get their travel approval any time, and that delay is going to affect them most of all, and at this point, we don't really know how long that will be.
PILGRIM: Congresswoman Anne Northrop is on the Congressional Coalition for Adoption, and she says she is hopeful adoptions, at least the paper work, will proceed.
REPRESENTATIVE ANNE NORTHRUP (R), KENTUCKY: They are, by the way, going to process the paper work so as soon as this is lifted, they'll again open their country and send the letters to travel to families that I suppose will build up in the meantime, so it doesn't mean that we won't, in the end, catch up.
(END VIDEOTAPE) PILGRIM: Now, this decision made according to the China Center for Adoption Affairs to avoid the cross infection that comes from a large flow of people. They are allowing a very few people, who have already been cleared and have made the final travel arrangements, to proceed, but the rest have to wait. Jan?
HOPKINS: And no idea how long?
PILGRIM: There's absolutely no idea how long. As you know, SARS is an open-ended question mark.
HOPKINS: Thanks. Kitty Pilgrim.
That brings us to tonight's poll. Are Chinese authorities right to suspend the adoption of babies because of the SARS virus? Cast your vote at cnn.com/moneyline. We'll bring you preliminary results later in the broadcast.
Now the final results of last night's poll. We asked, what do you think of the state of the U.S. economy? Twenty-one percent of you said turning a corner, 56 percent said sinking further, and 23 percent said treading water.
In other news across America tonight, another truck carrying immigrants has been stopped in Texas. None of the 18 people in that truck was hospitalized. This incident occurred not far from the truck stop where 18 immigrants died earlier this week. That truck driver, Tyrone Williams, is charged with conspiracy to smuggle, transport and conceal illegal immigrants.
Criminal charges were filed today against some Chicago area students involved a violent hazing.
(BEGIN VIDEO CLIP)
DICK DEVINE, COOK COUNTY STATE'S ATTORNEY: After an extensive investigation by the Cook County Forest Preserve Police, the Northbrook Police Department, state's attorney's investigators, and prosecutors from our office, we have filed battery charges against 15 individuals, all students at Glenbrook North High School.
(END VIDEO CLIP)
HOPKINS: Six girls injured in that incident. The 15 students charged could face up to a year in jail. Police also want to know who supplied them with alcohol.
More tornadoes in the Midwest last night. This twister kicked up a lot of dust in the Texas panhandle, but there was no damage.
Residents of Liberal, Kansas, weren't as lucky. A tornado there damaged homes and downed power lines, and an accompanying storm caused localized flooding.
And in case you missed it, here's other show of nature last night, the moon passing into the earth's shadow. It was the first lunar eclipse over north America in three years.
There are new developments tonight in the investigation into the death of Laci Peterson and her unborn child. Police have now returned to San Francisco Bay in their search for clues. Rusty Dornin is in Richmond, California, and joins us with the latest. Rusty?
RUSTY DORNIN, CNN CORRESPONDENT: Well, we don't know if the searchers found anything in this latest search on San Francisco Bay that started about 9:00 local this morning. But we can look out over the bay now. They have packed up the dive gear and the side-scanning sonar equipment and have headed back, but they left a buoy marking that area so they can be back tomorrow.
Six different police agencies, including, of course, Modesto police, and a FBI dive team from New York that specializes in retrieving evidence were out on the bay today looking for more evidence in the Laci Peterson case. We believe they are looking for things that may have left behind -- were left behind when Laci Peterson and Conner's body floated to shore.
Now that was a month ago that Laci's body floated to shore here in Richmond, California. Her son Conner's body floated to shore a mile north from here.
Now, about in March -- the middle of March, sonar experts discovered an object on the bottom of the bay they believed was a body located in the shipping channel. You can see the tankers located across Richmond. It's a deep area. They believe they located a body, but a storm came up. They went back, and the object was gone. They believe the body may have been wrenched from some kind of anchors or weights that were on the bottom of the bay, and that is what they were looking for.
Now, this is the island where Scott Peterson told police that he did go fishing the day his wife disappeared, but apparently the search today was concentrated south of this island, and that was from information from an USGS (ph) scientist who said that the wind direction actually blew Laci Peterson's body here to this shore. So there's a little bit of discrepancy, perhaps, on where the body might have been located and what they did see in March, but they're looking for some kind of evidence in this case that can give them a clear indication of what did happen to Laci Peterson. Jan?
HOPKINS: Rusty Dornin, thank you.
Coming up, the editors of the nation's premier business publications, Stephen Shepard of "BusinessWeek", Steve Forbes of "Forbes", and Rik Kirkland of "Fortune" will join us.
And then, Warner Brothers' "The Matrix" is reloaded and breaking records already, but is that enough to put AOL back online? Greg Clarkin will have that special report.
(COMMERCIAL BREAK)
HOPKINS: Former President Gerald Ford is doing well tonight after suffering a dizzy spell. He was taken to the hospital earlier today from a golf course in Rancho Mirage, California. It was 96 degrees at the time. Doctors ran some tests on the 89-year-old President Ford. He was released from the hospital a short while ago.
Disgruntled AOL Time Warner shareholders had little to celebrate at the company's annual meeting in Virginia today. Since the merger between AOL and Time Warner in 2001, shares of AOL Time Warner, the parent of CNN, have plunged 70 percent. Steve Case the man behind the merger today formally ended his tenure as chairman of the company.
Greg Clarkin has the report.
(BEGIN VIDEOTAPE)
GREG CLARKIN, CNNfn CORRESPONDENT (voice-over): It was Steve Case's last day on the job, the Internet visionary officially leaving as chairman of AOL Time Warner.
The change took place at the company's annual meeting, a meeting that also saw Ted Turner leave as vice chairman. Both will stay on as board members but some big investors want Case out of the company entirely and that's something CEO Richard Parsons will have to deal with.
DICK PARSONS, CHMN. AND CEO, AOL TIME WARNER: At the end of the day, shareholders elect directors. Mr. Case was elected again. Beyond noting that, I'm not going to speculate on, you know, letting things persist.
CLARKIN: Case was reelected with just 78 percent of the vote, significantly lower than the 96 percent Turner and Parsons received and other board members with ties to AOL received even less votes.
The makeup of the board was a big topic. Shareholder activists want common stockholders to have more of a say in board nominees and they're not happy with the company's response.
RICHARD FERLAUTO, SHAREHOLDER ACTIVIST: Parsons and the board continues to be unresponsive, is that they haven't embraced corporate governance reform to the extent that it's needed to in the post-Enron, post-WorldCom, post-Health South era.
CLARKIN: The meeting was held in AOL's backyard in northern Virginia and attracted dozens of AOL employees and with the stock down more than 70 percent over three years, there are plenty of disappointed AOL stockholders as well.
FRANK SETASH, AOL SHAREHOLDER: We used to love AOL exclusively without any reservations. Now recently since the merger we've had a few reservations about the company because it's gone from 80-some, 90- some, down to right now where it is about 14.
CLARKIN (on camera): As if board issues and a sinking stock weren't enough, Parsons also had to field questions on the federal investigations into AOL's accounting practices, but Parsons was able to point to a bright spot, the Warner Brothers film, "The Matrix Reloaded" raked in a record-breaking $42.5 million on its opening day.
Greg Clarkin, CNN Financial News, Leesburg, Virginia.
(END VIDEOTAPE)
HOPKINS: Shares of AOL Time Warner today gained about two percent to close at $14.24. That is the highest close since January.
Television networks have unveiled their new fall lineups. Whether the new shows click with viewers is questionable. What's not in doubt though is the amount of money that advertisers will spend to be a part of it all, close to $10 billion. Susan Lisovicz reports.
(BEGIN VIDEOTAPE)
SUSAN LISOVICZ, CNNfn CORRESPONDENT (voice-over): CBS is embracing drama.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: You went to Sunday school?
UNIDENTIFIED MALE: We're gay. We pray. Get used to it.
(END VIDEO CLIP)
LISOVITZ: ABC is all about comedy.
UNIDENTIFIED FEMALE: At first, I'm like I'm not going to do that.
LISOVICZ: NBC is showcasing its stars.
UNIDENTIFIED MALE: "Vegas" starring James Caan and Josh Dumal (ph) and "The Lion's Den" starring Rob Lowe and "Mismatched" starring Alicia Silverstone and Ryan O'Neal.
LISOVICZ: And FOX is churning out reality.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I'm not sure.
(END VIDEO CLIP)
LISOVITZ: But in the cyclical world of prime time TV, what's new for the fall season is an old formula.
UNIDENTIFIED MALE: I'm looking for a franchise like "CSI" or like "Raymond" that's going to be around for hopefully seven, eight, nine years and that's what worked, not something that's going to work for ten weeks.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Can we just get a reality check here for a minute?
(END VIDEO CLIP)
LISOVICZ: But reality TV has virtually no shelf life.
UNIDENTIFIED MALE: You get 100 episodes of the show and you can, you know, get a bona fide syndicated property that can make a tremendous amount of money for networks.
LISOVICZ: But which shows make it big in syndication hinge on those that do well in their initial run. Those shows have now been rolled out before the advertising community at the annual extravaganza known as the up fronts.
(on camera): And despite an ad recession that continues to plague the newspaper, magazine, and radio business, predictions for ad spending and broadcast prime time remain strong. Predictions for increases range anywhere from three to 15 percent even though cable TV last year beat broadcast TV for the first time in prime time.
UNIDENTIFIED MALE: It's been driven by a lot of pretty healthy spending in the auto category, the movie category, the package goods category. This marketplace has been running counter to what's been going on in the economy in general.
LISOVICZ (voice-over): Broadcast networks pulled out all the stops to razzle dazzle Madison Avenue, but cable networks are increasingly getting a bigger slice of the advertising pie and their big show is next.
Susan Lisovicz, CNN, New York.
(END VIDEOTAPE)
HOPKINS: A reminder now to vote in tonight's poll, the question: "Are Chinese authorities right to suspend the adoption of babies because of the SARS virus, yes or no?" Cast your vote at cnn.com/moneyline. We'll bring you preliminary results later in the broadcast.
It has been a remarkable week for President Bush. Today he officially signed up for a run at reelection next year. A version of his tax cut package passed the Senate after clearing the House last week. The president welcomed the South Korean president to the White House to discuss the North Korean crisis.
Joining me now for more on this and other topics of the week are the editors of the leading business magazines, Steve Forbes, he's editor-in-chief of "Forbes Magazine." Rik Kirkland is managing editor of "Fortune," and Stephen Shepard is the editor-in-chief of "BusinessWeek."
Let's take a look at politics first. This time next year when we're looking at a presidential campaign and, Steve I want to ask you first as a presidential campaigner...
STEVE FORBES, "FORBES": (UNINTELLIGIBLE).
HOPKINS: But what's the economy going to look like? Will it be an issue in the campaign?
FORBES: Actually, I think the economy will be less of an issue as 2004 proceeds, especially if they get a strong tax cut like the House passed a few days ago. I think you'll start to see it in the fourth quarter and I think first in the financial markets. That will make people feel better, so if the Democrats are counting on that I think they're going to be disappointed.
HOPKINS: What about the rest, Rik?
RIK KIRKLAND, "FORTUNE": I think the economy will look better. I mean the Democrats will still try to make a point about the fact that job creation isn't what we're going to want it to be and they'll worry about the deficit.
But I also believe that the economy, many elections past, is not going to necessarily be quite the dominant issue. It's going to be good enough and it's going to take it off the table and the issue is still going to be security in post-9/11 America and that's going to really dominate.
HOPKINS: What do you think about the economy Steve?
STEPHEN SHEPARD, "BUSINESSWEEK": Well, I think we can get very decent economic growth and still see unemployment rising and the Democrats will try to make hay out of that issue. I think the economy will get a little bit better but it is by no means going away as an issue because of the unemployment concerns.
FORBES: We had a little preamble of it last November with the midterm elections where security did trump the economy.
HOPKINS: That's true.
FORBES: And that's going to continue.
HOPKINS: Well, let's talk about this tax cut which will be some kind of compromise between what the House and the Senate have come up with. Steve, you think it's a good idea and a good plan?
FORBES: I think what the House did was sensational, cutting the capital gains from 20 to 15, cutting dividends from 40 down to 15. The Senate finally got its act together a little bit with the Nichols amendment but if they go something along the House lines, it will be a powerful package.
HOPKINS: Rik, what do you think?
KIRKLAND: Well, I think it gets a little oversold in the debate but I think it's helpful. We have a sluggish economy. You have rising state and local taxes, so you're offsetting some of that by giving the same folks paying those taxes a tax cut. I think the market will benefit from some kind of dividend gain. I just worry about this tendency though to sort of skate past issues like the Senate has passed, hope the House fixes the fact that the Senate's giving it to us for three years and then taking it away.
FORBES: Yes.
HOPKINS: Yes, the dividend tax credit, right.
KIRKLAND: We did that with the real estate tax in '01 - I mean not - the inheritance tax in '01.
HOPKINS: The death tax, right.
KIRKLAND: And we're still ignoring the alternative minimum tax issue which is a huge expensive thing and Congress, if they don't want to give us a tax cut and make it permanent, then don't give it to us because that uncertainty is worse than doing something and then undoing it.
SHEPARD: I would go even further and say what we've seen in the Senate this week is really dishonest. I mean to say we're staying within the level that the Senate wanted to stay on the size of the package only by restoring the dividend taxes to the existing level after three or four years is just intellectually dishonest and I think it's going to backlash against them.
FORBES: It's a crazy response to crazy Senate rules. These ten- year estimates are nonsense. The way we do them is nonsense so they have to pass these pretzel-like tax packages. What the Senate wanted to do was just to get a tax bill into conference.
HOPKINS: We get these crazy tax packages each time. I mean it's great for the people that have to teach the accountants the new rules but they're incredibly complex and confusing.
FORBES: Congressional rules that it has to be within a ten-year period and so to meet these artificial restraints they put in these artificial terminations and coming in and coming out.
SHEPARD: You end up dealing with the politics of the situation rather than dealing with economic needs of the country and that's very, very sad to me and we're not out of the woods at all on taxes, on deficits, and this is going to be a big issue going forward.
HOPKINS: Well, we're going to have a bigger deficit.
KIRKLAND: Absolutely.
FORBES: And then these rules are designed to make Congress supposedly more fiscally responsible. All it does is make them look ridiculous.
HOPKINS: Yes.
KIRKLAND: So perhaps the rule no tax changes for seven years, we might be better off.
SHEPARD: No tax cuts for seven years. The interesting thing is that the president will be back seeking everything he didn't get in this Congress.
HOPKINS: True, true. So, we still get to talk about it next year or six months from now or whatever.
SHEPARD: It's good for our business.
HOPKINS: Right. You talked about security being a big issue during the presidential campaign. We are hearing more and more about real terrorist threats and this week we saw bombings in Saudi Arabia. What impact does this have on people in this country and what impact does it have on the economy, Steve?
SHEPARD: Well, it's very hard for a layperson to judge just how serious the terrorism threats are. You know we did damage al Qaeda with the attacks on Afghanistan and the leadership, the training sites, and so on, but clearly it hasn't gone away. I think as long, you know, it's going to happen in Saudi Arabia.
The society is very vulnerable to attack. They don't have the defenses that we have. How the American people react to that is not clear. As long as it's over there, I don't think it will affect consumer confidence all that much, but the worry will be that we're next.
KIRKLAND: (UNINTELLIGIBLE) you look at the market response this week to the bombing and it didn't really affect it and it's not surprising to put this in perspective that al Qaeda - no one says they're gone but I think in the political debate we ought to keep this clear. They have been significantly weakened. They're financially weakened. Their top leaders have been taken out but there are a lot - there's a lot of cells still left and it just hasn't gone away.
FORBES: Politically it underscores that the security issue is still there but what Saudi Arabia is going through really is starting of a civil war that they had in the 1920s between the real extremists and a Saudi government that's trying to pay everyone off to stay in power, so that's just going to get worse.
HOPKINS: We have a market that actually is doing well. Rik just pointed out that there was really no reaction to the bombings in Saudi Arabia. Bonds are doing well too. These rates are unbelievable.
SHEPARD: I think the Fed was absolutely brilliant. When they came out and talked about deflation. What they did was to signal the markets that they were not going to raise interest rates even as the economy recovers. The bond market took that as a clue to drive down long-term interest rates so Alan Greenspan got the best of all worlds. He got lower long-term rates. He doesn't have to worry about short- term rates. The economy will get a lot of stimulus from those lower rates and we don't have to worry so much about deflation.
HOPKINS: So, Steve, the market goes down further? FORBES: Yes. I think the stock market is going to do very well and poor John Snow must be wondering. He tries to influence the dollar and it looks like he put his foot in it. Alan Greenspan gets the nice trick of both the rising stock market and the good bond market. He's wondering how can he do it and I can't do it?
KIRKLAND: Steve's a bigger bull than I am. I love his crystal ball. It's always sunnier and clearer than mine but even in mine I have to say I think we're going to continue to have this creeping bull market. I think we saw the lows.
HOPKINS: And deflation is good for stocks?
KIRKLAND: It isn't necessarily bad for them if it doesn't get out of control.
FORBES: The good thing is the Fed's finally recognized it's a threat which means they will provide the liquidity and avoid the trap that Japan fell in for 12 years.
HOPKINS: Thank you all, Steve, Rik, and Steve.
And when we come back our "Thought of the Day" about the secret of success.
And then it's hooray for Hollywood once again, Casey Wian reports on why filmmakers are opting to keep their productions at home instead of running north of the border.
And, a very special CEO of the week, we take a look at the life of a man who was a giant in the world of sports.
(COMMERCIAL BREAK)
HOPKINS: Our "Thought of the Day" tonight is on achievement and how it's attained. "Some men succeed by what they know, some by what they do, and a few by what they are." That comes from American author and publisher Elbert Hubbard.
Tonight, we have a special CEO of the week. Mark McCormack is considered the father of modern sports agents. He is the man who put the business in sports business and over time the company he created transcended sports. Mark McCormack died today after lying in a coma since January.
Bill Tucker has his story.
(BEGIN VIDEOTAPE)
BILL TUCKER, CNNfn CORRESPONDENT (voice-over): Mark McCormack was the original sports superstar agent. He wasn't as brash as "Jerry McGuire" but he was the man that many believe create them. The career that would alter the sports landscape began quietly with a handshake with Arnold Palmer, the only contract that the two ever had.
ALASTAIR JOHNSTON, CO-CEO IMG: He was a sports marketing, a sports business executive, but he was truly a sports fan. I used to get calls every Monday morning about what our clients did anywhere in the world, any event, tournament, you know game, you know and did you see what this guy did? Did you see what that guy did? He was a true fan.
TUCKER: He's the man who invented the endorsement, the entire field of sports marketing. He's the guy a lot of people love to hate, blaming Mark McCormack for out of control paychecks. His peers see it differently.
NIC BOLLETTIERE, BOLLETTIERI TENNIS ACADEMY: He modernized sports and he made it a business, I mean and by making it a business the level of excellence grew and grew and grew. And also, it brought about a tremendous sense of competition. Products become better when there's competition. Products will not, you know, go to another level if there's nobody competing.
TUCKER (on camera): His client list was dazzling, a list that could fill up the Garden.
(voice-over): It includes his first client, Arnold Palmer, Jack Nicklaus, Tiger Woods, Anika Sorenstam, Pete Sampras, Serena and Venus Williams, Derek Jeter, Jeff Gordon, John Madden, Bob Costas, Jack Welch, literally to just name a few.
McCormack received the PGA's Distinguished Service Award. ESPN named him one of the century's most influential people in the business of sport. "Golf" magazine called him the most powerful man in golf. "Tennis" magazine named him the most powerful man in tennis.
And he wrote books, nearly a dozen, including the best seller "What They Don't Teach you at Harvard Business School."
RICK MORROW, SPORTS ANALYST: He took the concept that athletes needed help, galvanized that into a principle where corporations would see the value of athletes being involved in their whole business mix and basically took it to an art form and a juggernaut firm that everybody frankly since then has emulated and copied.
TUCKER: Not bad for an agent, an agent whose agency wasn't in New York or Los Angeles, but instead was in Cleveland, Ohio. IMG became the largest sports marketing and management company in the world. McCormack grew his business on a simple philosophy, be the best, learn the business, and expand by applying what you already know."
IMG grew to 80 offices in 32 countries and remains based in Cleveland. Mark McCormack is survived by his wife, four children, and seven grandchildren. He was 72.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
HOPKINS: The dollar continues to lose value against currencies around the world. It is now at a six-year low against the Canadian dollar but that decline has helped revive one of the U.S. industries that had been losing business and jobs to Canada, movie and television production.
Casey Wian has the report.
(BEGIN VIDEOTAPE)
CASEY WIAN, CNNfn CORRESPONDENT (voice-over): Canadians call it the loony after the bird on their one dollar coin. The value of Canada's currency has jumped 14 percent against the American dollar this year and that has folks in the home of Looney Tunes singing a new song.
Film and television producers who once flocked to Canada, largely because its devalued currency made shooting there so much cheaper are now thinking about staying home. The Canadian dollar is now worth about 73 U.S. cents, up from last year's low of 62 cents.
VANCE VAN PETTEN, PRODUCERS GUILD OF AMERICA: If it's a close (UNINTELLIGIBLE) five, ten, percent difference, producers are not going to want to leave because you factor in, you got to remember all the travel costs and you also factor in just leaving your families. They want to stay here. So, you may get closer if the exchange rate is better.
WIAN: Because major motion picture and television show budgets are set months in advance of production, the shift there is just beginning but commercials and lower budget productions are already shunning Canada. Last year, film production spending in Canada fell eight percent and an even bigger drop is forecast this year. The Canadian government is trying to protect its $1.5 billion industry.
JACK KYSER, ECONOMIST: Canadians have always had very, very aggressive tax incentives so like when you hire Canadian film workers then you can claim a tax credit for that. They just sweeten that.
WIAN: California and other states are fighting back with tax credits of their own.
(on camera): However, none of those is likely to do as much to keep film production her as is the narrowing of the currency gap. That's welcome news in southern California which has lost about 30,000 entertainment jobs during that last two and a half years.
Casey Wian, CNN, Los Angeles.
(END VIDEOTAPE)
HOPKINS: Checking on the U.S. trade deficit tonight, our estimates put it at more than $189 billion for the year, increasing by roughly $1.5 billion every day.
When we come back we'll share some of your thoughts on tax cuts.
(COMMERCIAL BREAK) HOPKINS: The preliminary results of tonight's poll, we asked: "Are Chinese authorities right to suspend the adoption of babies because of the SARS virus?" Eighty percent of you said yes and 20 percent said no.
Now for a look at some of your thoughts, Lois Modica of Tucson, Arizona wrote about the tax cut package: "How can anyone possibly think that this tax cut can benefit the average person? Yes, the wealthy will have more to invest but look around your home. What percentage of things you buy are actually made in the United States? There will be more to invest in putting up factories in other countries."
Robert Trimmer of Germantown, Maryland said: "We need to stop jobs going overseas and pull back those lost ones, especially to China. We can not hardly find any made in the USA goods whether at Wal-Mart of elsewhere. It's very sad driving through American to see the huge loss of manufacturing centers and the towns that are much poorer."
Art Cundy of Rozet, Wyoming wrote about her lack of confidence in Wall Street. "I will not have confidence in Wall Street until strong laws are in effect on these items: CEO compensation, conflicts of interest between investment banking and analysts, and manipulation by hedge funds. This is the wrong time to stimulate Wall Street with tax incentives."
We love hearing from you. You can e-mail us at loudobbs@cnn.com and don't forget to include your name and hometown.
I'm Jan Hopkins in for Lou Dobbs. Thanks for joining us.
Next week we begin a special series "Exporting America" which looks at the loss of American jobs to countries around the world, for all of us here goodnight from New York.
And "LIVE FROM THE HEADLINES" with Anderson Cooper is next.
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