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Is America's Relationship With Saudi Arabia Worth the Risk?; Can U.S. Deliver on Promise to Rebuild Iraq?; A Look at Hazing Incident in Illinois

Aired May 17, 2003 - 13:00   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.


ANNOUNCER: From New York, where cash is king and plastic is fantastic, this is IN THE MONEY.
JACK CAFFERTY, CNN: Good afternoon, welcome to another edition of IN THE MONEY. I'm Jack Cafferty.

Coming up on today's program, risky business. Western workers in Saudi Arabia come under attack from terrorist bombers.

Find out whether America's relationship with the kingdom is costing more than it's worth.

Plus, the path to peace, or the road to ruin? With Iraq more lawless every day, we'll see if the United States can deliver on its promise to rebuild the nation.

Sugar and spice meets blood sweat and tears. If you think violence is just for boys, think again. Some Illinois high school girls will make you think twice about that. We'll look at whether tough girls rule.

We've rounded up the usual suspects for today's program. My two good friends, CNN's national reporter Susan Lisovicz, and "Fortune" magazine editor-at-large Andy Serwer.

Nice to have you with us.

ANDREW SERWER, FORTUNE MAGAZINE: Hey, good to be...

CAFFERTY: What do you like this week?

SERWER: Well, I mean, we're still dealing with the situation in Iraq, and obviously the headline, though, is Saudi Arabia. The big question is should U.S. companies -- should the U.S. presence be maintained and if so, how do you protect those people?

SUSAN LISOVICZ, CNNfn CORRESPONDENT: Well, we have thousands and thousands of troops there and that's been a big source of resentment in the Middle East.

But they're going away this summer so the whole situation could -- could -- and we hope -- ease a little bit.

CAFFERTY: And a lot of controversy surrounding the reported request by American officials to step up the security of the complexes that were hit by the terrorists two days before the attacks actually occurred. The Saudi government refused.

So we'll talk about that some today, too. The relationship between the United States and Saudi Arabia not so much a love affair as a marriage of convenience.

With the United States, it brings business -- big business, influence in the region, and oil. Five hundred fifty million barrels of crude out of the kingdom last year.

For the Saudis, it means U.S. protection and lots and lots of U.S. cash. Riyadh's exports to the United States nearly 13 billion dollars in the year 2002 alone. But the marriage of convenience has a price tag all its own.

This week terrorists struck three residential compounds for Americans and other western workers in the capitol city of Riyadh. Those attacks left dozens of people from several nations dead including eight United States citizens.

U.S. Secretary of State Colin Powell visited the scene of the bombings, which came just hours before he arrived in Saudi Arabia on a scheduled visit. Officials from both countries say the strike looks like the work of al Qaeda.

Some officials in Washington have accused the Saudis of doing too little to combat terrorism in their own country. But one former U.S. ambassador to Saudi Arabia thinks we could do a better job on that score ourselves and that we should not distance ourselves from the Saudis.

Richard Murphy is now a senior fellow at the Council on Foreign Relations in Washington D.C. and he joins us for his thoughts on this topic today.

Mr. Murphy nice to have you with us. Thanks for joining us.

RICHARD MURPHY, FMR. AMB. SAUDI ARABIA: Thank you. Pleasure.

CAFFERTY: Each time one of these terrorist events happens, the discussion about whether or not the Saudis are doing enough -- and I put that in quotation marks -- to combat terrorism in their own country -- becomes a hot topic of debate. And each time the answer seems to be, at least opinions on this side of the Atlantic Ocean, the answer seems to be no they're not.

MURPHY: Clearly enough, Jack, they weren't doing enough the other night, and I don't know how specific our request was to the Saudi authorities. We had a very senior U.S. official over there a few days before the events, but they can't say that enough had been done when these terrorists broke into the compounds and blew up that housing.

CAFFERTY: So what -- what do we do going forward? I mean, you go back to the -- the bombing of the housing complex -- this is the third time since I think 1995 that Americans have been killed by terrorists inside Saudi Arabia. And each time we sort of seem to paste over the relationship between the two countries and try to go forward with this awful thing hanging in the background.

There's a co-dependence here, obviously, between their dependence on our dollars and our military and our dependence on their oil. But is the price we're paying, i.e., in human lives, getting to the point where it's too high?

MURPHY: The difference this time is that this third in a series as you say, '95 in Riyadh, in '96, this time these were not active duty military personnel, these were civilian contractors. Not just American -- other nationalities and Saudis. Saudis died, including some -- a couple of quite prominent ones in the attack that night.

Is the cost too high? Ultimately that's going to be a decision, I think, both for the companies involved and even more importantly the individuals involved. Some of the early interviews showed that they were -- individuals saying well look, it's 50/50 -- it's a close call. Will we get the security we need to live and work here?

CAFFERTY: Mr. Murphy, let me ask you to follow up on that a little bit. As you said, these were private citizens, not military. 35,000 Americans work and live in Saudi Arabia. Boeing, Exxon, Chevron, all kinds of companies there.

Number one, if you were an American working there, would you leave? And number two, should the U.S. government ask the Saudis to guarantee their safety and can they do that?

MURPHY: The U.S. government can certainly ask for major security details to be provided to these compounds. Yes, your figure 35,000 may be even a few thousand more citizens. 15,000 as I understand it in Riyadh as of today spread out over a big city. They're not -- it is not an American compound. There are 15,000 Americans in -- that's not to say there are not a couple dozen or more in different areas.

Can they be secured? Against a determined assassin ready to commit suicide? Who has some inside knowledge of how their security within the compound works, which was clearly the case the other night?

The answer is no, they cannot be guaranteed.

CAFFERTY: Would you stay yourself?

MURPHY: Why would I have gone there in the first place? For professional reasons and for the money involved and I would be putting those in the balance scale against my safety and the safety of my family.

LISOVICZ: Mr. Ambassador, it has to also be noted that one of the important things about Saudi Arabia is this is the place where al Qaeda and other terrorist groups raise their money to carry out these attacks. Not only that they're carried out in Saudi Arabia but elsewhere. The Saudi government in December froze $5.5 million in accounts that it said were related to terrorist activities or groups. Is that enough or is that just a drop in the bucket?

MURPHY: That's a drop in the bucket on their side and frankly the figures I've seen about accounts frozen under direct U.S. control is a small amount whether it's a drop or a few drops in the bucket.

What I was told, I was out there in January, was that they had decided that these contributions through the various charitable foundations which people give to as a religious obligation -- it's like tithing.

Those charitable contributions would have to be spent inside the country on the (UNINTELLIGIBLE) of Saudi Arabia and that permission would not be given for the money to move outside.

Now that's what I was told, that needs to be confirmed that it's still in effect.

CAFFERTY: Bottom line what do we do about it? Do we pull everything out of there and unravel all of these business connections? With our dependence on oil out of that part of the world, that doesn't seem like perhaps a very practical idea. So what do we do to fix this? Is it fixable or do we just simply have to live with periodic episodes like this?

MURPHY: Well it really isn't our dependence on Saudi oil; it's the world's dependence on Saudi oil. You're talking bout 8 million plus barrels a day.

Major contribution to the world consumer and in the past our military presence was considered well we were protecting the American consumer.

We really weren't these last decades; we've been protecting the world economy that if that source were threatened through acts of terrorism and closing down of operations and particularly if they hit the oil industry itself it would have been a disaster for the world economy.

Now what can we do as I say it's going to be a decision taken by individuals by their companies and by the U.S. government and working with the Saudis to increase the security of American citizens living and working there who want to stay.

LISOVICZ: We certainly hope that things will get better there and we know that we may be talking to you in the future about that. Richard Murphy, former ambassador to Saudi Arabia, senior fellow at the Council of Foreign Relations.

Coming up on IN THE MONEY, new boss, old problems.

As Washington swaps out its Iraq reconstruction sheet, we'll look at whether it change in staff is enough to put the country Plus, after a hazing goes haywire in Illinois, we'll see whether means equal queen. And 100 years on the road as Ford gets ready to celebrate its centennial. We'll kick the tires and check under the hood.

(COMMERCIAL BREAK)

CAFFERTY: When the United States won the war in Iraq it also took on the world's toughest adoption project. Think of Iraq as the classic troubled child -- good underneath but still wild and ornery after years under an abusive father and barely able to look after itself. Now maybe that's a bit of a reach, but it's the best we could come up with on short notice.

Washington promised to turn Junior into a stable, responsible member of society. Tens of billions of U.S. dollars are expected to go toward that very end.

But today Iraq remains very short on security, short on supplies, short on hope, and long on internal disagreement and violence. This week the Bush administration brought in former state department employee L. Paul Bremer to head Iraq's reconstruction effort.

He's replacing ex-general Jay Garner, who will be phased out over the next few weeks.

The longer it takes to make Iraq peaceful and prosperous, the harder the job becomes. For one perspective on reconstruction we're joined from Washington by Michael O'Hanlon, who is a senior fellow in foreign policy studies with the Brookings Institution.

Mike, nice to see you. Thanks for joining us.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: Nice to be with you.

CAFFERTY: What's Mr. Bremer going to be able to do that the general wasn't?

O'HANLON: First of all, I'm not so critical of General Garner as some people. I think that the problem here was really in the Pentagon with Secretary Rumsfeld and perhaps General Franks in Centcom. They were not ready for the transition to the stabilization mission.

They expected a much easier welcoming, essentially, and they just didn't value the importance of stabilization as much as the importance of war fighting.

I don't know if General Garner was really the big problem here. But I do think that Mr. Bremer is off to a pretty good start. Listen, there's going to be political chaos for a while. We've got to create some new mechanisms for giving a lot of people a voice; they're going to compete with each other for influence; it's going to be like any democracy, except messier. You pointed out Saddam had been obviously imposing his will for a long time.

So the politics -- it's going to be messy. What we cannot allow is the crime to continue, the looting, the raiding of weapons of mass destruction sites, the unauthorized digging up of gravesites. This has to stop. This is actually poisoning the long-term potential of Iraq, and I think that for whatever reason we got off to a very bad start.

I think Mr. Rumsfeld and General Franks had more to do with the problem than General Garner.

LISOVICZ: But Michael, isn't one of the advantages that Ambassador Bremer has is that he will simply have more power than General Garner did?

O'HANLON: You may be right, and also he's had a chance to watch a month's worth of mistakes and I think the combination of those two does bode well.

Unfortunately, we've already created some first impressions, which aren't very favorable in the minds of the Iraqi people. You don't want to convey a sense of uncertainty, of lack of resolve. And so Mr. Bremer now has a harder job than he might have otherwise.

But I think you're right. More authority consolidated in one person with the Washington debates largely now over about who's going to be in charge and which department, Defense or State, is going to have a greater role.

I think Bremer is in a good position. But again the job on the ground is challenging enough just to sort out the politics. And if we can't stop the crime, we're really still in a bad situation.

SERWER: Michael, let me ask you a question here. It's obvious the administration spent a great amount of time planning the war part of this effort. All types of scenarios, war games and all that.

Do you think they spent enough time, though, in post-war planning what that would look like, what the Iranians would do, what the Shiia Muslims would do. Do you even think they thought about that enough?

O'HANLON: Well, a couple of things. I want to be fair because I am a critic, and I will go along with the spirit of your question. I think they blew it on a couple of fronts but the fact that the Shiia Muslim are competing for influence, the fact that Iran is worried about what's happening next door. Some of these things are inevitable.

And politics is going to be messy inside of Iraq. That part I don't blame the administration for. What I do blame them for is as you say not doing enough planning of how to keep law and order, how to protect weapons of mass destruction sites from being raided, how to protect hospitals so that we could take care of the Iraqi people, getting relief supplies in position quickly enough that we could prevent cholera outbreaks like the one now underway in Basra where we can't provide clean water.

Some of these things really were foreseeable but the administration, for example, was debating General Shinseki, the chief of staff of the Army saying we don't really need a big occupation force or a big stabilization force, the Iraqis are going to welcome us with open arms, they're going to take care of their own country -- these were badly mistaken assumptions and now we're paying the price.

CAFFERTY: Is there a time table, Mike, in your opinion beyond which what credibility the Americans have over there that remains will -- will begin to simply disappear, ebb away?

O'HANLON: I don't know if I can put a number on how many weeks or months. I think we're still in a strong position because, of course, we still have 150,000 plus coalition troops inside of Iraq with more on the way, and that conveys a certain sense of power and resoluteness by itself. Especially as we start using those forces more assertively against looters and other criminals.

So I'm not so convinced that we have permanently jeopardized the success of the mission but every week you lose you make it harder and you also reinforce the impression in the Arab world that we really didn't care so much about stabilizing the country and helping the Iraqi people as we cared bout going after our old nemesis and, quote/unquote, getting our hands on his oil.

You don't want those impressions to take root in a region that already is so angry at the United States.

LISOVICZ: So how do you restore credibility? One of the big promises after the U.S. took Baghdad was that we'd get out of there quickly, the Iraqis would run their new government but basic services have yet to be restored, we've got rapid violence there. Carjackings, shootings, just general anarchy. So how do you get out quickly when nothing's really happened in the past month?

O'HANLON: You don't get out quickly and that's where Mr. Rumsfeld has been most wrong of all and he was frankly guilty of a bit of gloating after the war when he gave his speech saying that never before have so many been so wrong about so much, thinking the war would be difficult and then it turned out to be relatively fast.

Well, frankly, Mr. Rumsfeld got a lot wrong on the stabilization effort. He was talking about a quick exit and a small U.S. force if anything would be needed beyond a few months time. He was badly wrong and unfortunately it has gotten us off to a very poor start here. The good news about Rumsfeld, he's usually capable of recognizing when he's made a mistake and I think he is in the process of correcting that mistake, but there will be some lasting damage.

CAFFERTY: All right Michael we got to leave it there. I appreciate you coming on with us today. Michael O'Hanlon, senior fellow of foreign policy studies at the Brookings Institution. We'll see you again soon.

O'HANLON: That's great, thank you.

CAFFERTY: Coming up next on IN THE MONEY how high the mileage. Ford's gearing up to celebrate one century on the road. See if the hundred-year-old company has as much drive as ever. Also ahead social studies. Find out whether mean girls grow into mean women. And -- stop nodding your head.

And everything old is new again with Hollywood cranking out a record number of sequels this summer. We'll look at why take two is suddenly number one. Back after this.

(COMMERCIAL BREAK)

SERWER: Our stock of the week, the Ford Motor Company is about to celebrate its 100th anniversary.

The huge corporation has come a long way since Henry Ford and 11 business partners started it all with 28,000 in cash.

But Ford is facing some real challenges right now including high production costs and directors who seem to be spending a lot of time fighting amongst themselves.

Joining us to give an inside look at Ford is my colleague at "Fortune," editor Alex Taylor. Alex, great to see you.

I want to ask you about that situation wit the family and the directors and management. Obviously the family still owns a lot of this company. Is that a problem for this company?

ALEX TAYLOR III, FORTUNE MAGAZINE EDITOR: Well, in a lot of ways the family ownership at Ford is a benefit because the Ford family has controlled Ford for 100 years; they control 40 percent of the voting stock sot here's been a consistency of control there that other companies haven't had.

The unfortunate thing is when you have a Ford at the top of the company it creates kind of a monarchy situation where everybody is trying to get the favor of the king and it creates a lot of fighting down beneath the ranks and that's what Ford has been suffering the last couple of years.

LISOVICZ: Well, let's talk more about who's running the company, Alex. That would be Bill Ford who I understand is the great-great grandson of Henry the Ford who apparently is a very likable guy; he's a gear head, but he's had very little operating experience.

How's he doing?

TAYLOR: Well he's kind of learning on the job. He started out as chairman of the board in 1999, which was really a job he's very well qualified for having been on the board of directors for more than a decade.

But for the past two years or so he's been CEO and companies are basically very simple; they design and build cars -- but running them operationally is very complex and Ford's got a lot of operational problems in the past couple of years with manufacturing launches and quality. And Bill Ford just doesn't have the experience to deal with that sort of thing so he's having to work through subordinates to get the job done.

CAFFERTY: Alex, Jack Cafferty -- Ford stock is around $10 a share, thereabouts. Down from a high of I think around $30 two, three years ago. And yet Detroit has been selling more cars in the last three or four years than they've ever sold before. It's like one record year after another.

Due in no small part to these incentives that are in the marketplace that allow people zero percent financing; they can go in and buy a car with nothing down and they don't have to pay any interest on the car loan.

But in a way they're sort of cannibalizing themselves. I guess the question is, how can the stock be at $10 from $30 and yet record volume keeps coming out of these production plants every years?

TAYLOR: Well the problem is auto companies don't make any money; I mean even in a good year, Ford will make a net profit of only about 2 perfect. The price of cars goes down every year because the competition is so high and because capacity in the U.S. is so great. So -- and the third problem is domestic auto companies like General Motors and Ford are kind of in secular decline when it comes to market share because the Japanese are here, the Germans are here and now the Koreans are coming in here, big time.

So you've got a big old company like Ford with hundreds of millions of dollars in fixed assets and they're just trying to run those assets as best they can by pumping out the volume. They do that with incentives and that covers their costs but doesn't do much more.

SERWER: Alex I want to ask you a little bit about some of the models that Ford has. Obviously they're trying to revive the Explorer after all the problems there. I want to ask you about that, number one.

Number two, what's up with sedans and Ford. I mean, do they even make them any more? What's going on?

TAYLOR: Ford's has some hiccups in their product program for the past couple of years and the fact of the matter is they make all their money in trucks, mostly pick up trucks and big SUVs like the Explorer and the Expedition and so forth and sedans have been a smaller part of their market.

They're going to try and revitalize that over the next couple of years as General Motors is because you need sedans for their fuel economy but all the money is in trucks and Ford has been doing a pretty good job in trucks. The Explorer has bounced all the way back to the top-selling SUV in the country, surprisingly enough, despite all that controversy over their Firestone tires and Ford does very well with this line of big pickup trucks, too.

CAFFERTY: Does this company survive another 100 years, do you think?

TAYLOR: It will probably survive 100 years -- another 100 years. Auto companies are very tough to kill because they are so big and because there is so much national pride associated with them. But I think Ford is going to have to get smaller if it's going to get stronger. The market share of domestic automakers is shrinking too quickly and they've got too much over capacity that they can't afford to have so they've got to be a smaller tougher company to make it through another century.

LISOVICZ: You know, Alex, we've talked a lot about how the airline industry has the perfect storm facing and that's why you've seen these bankruptcies but you know it's interesting with the car industry too because you can't sell a car in America unless it's greatly discounted.

Then you have the importers increasingly taking away market share, and then you have a company where the top executives really hate each other. Is it true that the top executives actually have to take a business etiquette class in order to deal with each other?

TAYLOR: Well Ford is always been famous for the kind of sharp elbows it has in the executive suite to go way back to the 70s remember Lee Iaccocca fighting with Bumpy Newson and Phil Caldwell so these were all big, tough guys. A lot of them came up through manufacturing so they're used to kind of throwing their weight around, so there are some executive coaches trying to teach them how to all work together. Teamwork is a very important concept but when you have people with a lot of opinions and sharp elbows it's sometimes tough to get in practice.

CAFFERTY: Goes all the way back to the founder, though, doesn't it? I mean, Henry was no choir boy.

TAYLOR: Henry was no choir boy and the company he left behind was not in very good shape when he departed this earth back in the 40s, so. Ford has come a long way since them.

CAFFERTY: Interesting stuff Alex -- thank you Alex Taylor Alex Taylor editor of "fortune" magazine.

Coming up next on IN THE MONEY, sugar and spice and everything else. Girls can play just as rough as the boys. Ask Andy Serwer. A hazing in Illinois proves our point. We'll look at whether tough now means man and tough later.

Plus we'll find out why Hollywood thinks the sequel is a smart investment this summer. Sixteen of these things on the way to a theater near you.

(COMMERCIAL BREAK)

CAFFERTY: Officials of the suburban Chicago high school this week suspended dozens of girls and a few boys over a hazing incident that turned violent. It started out as a traditional powderpuff touch football game earlier this month for girls from Glen Brooke North high school, but it ended up with five kids in the hospital and it turned into a very ugly situation, as you can see in this tape.

We wondered what happens when girls who act mean turn into the grown-ups we deal with on the job. Our next guest says that girls who will do anything to fit in when they are younger can find it hard to stand out when they get older. Rosalind Wiseman is author of "Queen Bees and Wanna-bes: Helping Your Daughter Survive Cliques, Gossip, Boyfriends and Other Realities of Adolescence." She's also the president of the Empower Program, a non-profit organization that helps kids settle disputes without violence.

Rosalind Wiseman joins us today from Washington, D.C. It's nice to have you with us. Give me your reaction to this thing in Illinois. It's a pretty ugly situation. What's your take on it?

ROSALIND WISEMAN, AUTHOR: It is, and I think that what it shows is that people, adults, even well-intentioned adults, really did not want to admit that this kind of thing could happen in their community, because these are girls and they're from a middle-class community in the suburb. And as long as adults are in denial about what kids can do to each other, and especially if there are kids who are privileged in that community, kids are going to -- students oftentimes will push and push and push to see what the rules are. And oftentimes, it can get completely out of hand.

And what I saw is a school that didn't know what its boundaries really were, because the principal did not know that he had jurisdiction, even though it was outside of the school property. And I am also unfortunately seeing that some parents really feel, like, they don't want to have their kids take responsibility for this behavior, and that's a real -- that's a really sad thing to see.

SERWER: Rosalind, I am a father of two daughters, and this is really a nightmare situation. Not only in terms of the kids going to the hospitals but especially the girls just following blindly like that. That's what's most disturbing. So how do you empower, for lack of a better word, girls and make them not just follow like sheep?

WISEMAN: Well, I think what happens is that what you saw in this school is that there is an honor code that the adults and the kids all agreed to up front, which sounds good and all parents feel good about. Like, we're going to respect etch other and not be violent towards each other, and there were hazing policies in place. But then underneath that is a secret covert peer code among the kids, and I think if we don't address that, then you as a father, for example, it does get very scary if you have kids and you're taking them to school.

So how do you get them to not follow blindly? The most important thing is that the parents cannot be in denial that this stuff can happen. The other part that we've got to be able to do is teach girls not sacrifice their personal boundaries when they here in pre- adolescence, the tweens, like 9 to 12, with their friends that are usually girls, because girls have these incredibly tight friendships and they learn unfortunately to often sacrifice what they want and even their own physical safety at the hands of girls who are more powerful, and that goes with them as they get older, and this is the kind of stuff you see in high school that can happen. LISOVICZ: You know, Rosalind, using friendship as a weapon, I remember seeing a movie that has since become a cult film, "Heathers" with Winona Ryder, really shows how mean girls are. But typically it's a different mean than boys. Boys often act out in a physical way. Girls act out with their head. They will snub someone, they will spread gossip. Can you explain how you try to counteract that as a parent?

WISEMAN: Sure. I mean, girls have -- they -- women and girls, by the way, women as well, can have entire conversations with each other without saying a word, and it's very important to know and to respect the fact that if a girl -- traditionally what bully has been looked at, what you talked about is a boy taking other boy's lunch money, that kind of stuff.

But girls, it might look different, because girls might gossip or be exclusive, or write petitions, or say you can't come back to school anymore, but it might look different, but it is the same. And here's what's important about it. It is that whoever has power and privilege in that school, that if we don't -- in answer to your question -- if we do not hold those kids accountable in consistent ways, then what they learn is that those kids who have power and privilege get to do with that power and privilege what they want to kids who do not have it.

And as a result, you can have the best policies in place, but if that's lesson that's learned, then the kids really feel like that school is unsafe.

CAFFERTY: All right, Rosalind, what happens, though, when mean girls or girls who follow blindly, what happens when they grow up to be adults?

WISEMAN: Well, there's a couple of things that can happen to them. One is that they're sacrificing their personal boundaries and they are sacrificing what they want and what they don't want at 12, they're going to be doing it very often in their adult years, and it can very much follow into, for example, job interviews.

Or if girls -- if you ask a 12-year-old girl, what are you good at? Oftentimes girls would say, well I guess I am good at X, Y, and Z, even if they could be very, very, very excellent, and that translates later into life. Many times when you ask young women what they are good at, they will say, I guess I am good at. And if they are trying to get a raise or if they are trying to promote themselves in an organization or a company, they are not going to look like they know what they are doing, and that is a direct connection between what they learn when they are younger and in their adolescent years and how they will achieve as they get older.

LISOVICZ: So in the meantime, we have these counseling programs all over the country to try to make girls more assertive without being mean. And you actually teach an apology class. Can you explain what that is and what has happened as a result?

WISEMAN: Sure. I am going to back up a little second, which is that I think from what you're talking about with classes, I think in some ways parents have been so focused on teaching girls to have self- esteem that we think that that's the most important thing to teach, and that teaching empathy and compassion or ethics actually goes by the wayside, it's not as important as teaching a girl to look like she has self-esteem. But girls who look like they have self-esteem can also be tyrants, like what you saw in that video, and it could be false self-esteem. Girls know the self-esteem game. They know how to present to parents, and to teachers, and counselors what it looks like to have high self-esteem, because kids are smart.

So what is important to realize is that with classes and apologizes, is not that it's self-esteem and self-concept and self- worth, it's very much about moments when you have to take responsibility and take accountability for what you do, and that you learn social competency as a result. And that's what apologies do. I think it's very powerful to be teaching apologies to people, because people do not do it enough.

CAFFERTY: Interesting stuff, Rosalind. I am very sorry, but we're out of time.

WISEMAN: My pleasure. Thanks for having me.

CAFFERTY: Rosalind Wiseman. She wrote the book: "Queen Bees and Wanna-Bes, Helping Your Daughter Survive Cliques, Gossip, Boyfriends and Other Realities of Adolescence." We'll talk again.

Still ahead on IN THE MONEY as we continue sticking to the story, Hollywood's betting sequels will be the hottest ticket this summer. Find out why the studios are playing it safe, some say.

And your chance to tell us what's on your mind about movies, money, or anything else you see on this here program. The e-mail address is inthemoney@cnn.com. Our producer Jake's (ph) lonely. Write him a letter. Correspond. Makes him feel good.

(COMMERCIAL BREAK)

CAFFERTY: Looking for originality at the movie theater this summer? Well, tough noogies, you are out of luck. Sixteen sequels will dominate the silver screen. And there are a couple of remakes as well. Has Hollywood just run out of ideas, or are the studio execs too scared to market an unknown commodity? At the end of the day, it's all about the Benjamins.

Joining us to talk about the business of Hollywood, Paul Dergarbedian, who is the president of Exhibitor Relations, that's the outfit that tracks movie sells and tells us every week which films are number one at the box office. Paul, it's good to have you with us. Thanks for joining us.

PAUL DERGARBEDIAN, EXHIBITOR RELATIONS: Good to be here.

CAFFERTY: So how come it's all about the sequels this summer?

DERGARBEDIAN: Well, this year we have 25 sequels for the year; 16 sequels for the summer. That's a record in both categories. You know, it's all about, of course, the Benjamins, as you said, and it's about familiarity. It's about themes that people are comfortable with, characters that they know. I think there's a little bit of on both sides, in terms of studio executives wanting something that is a known commodity, hedge their bets a little bit, play it safe. But on the other hand, moviegoers too when they are going to plunk down their $10, they have an idea of these characters and they seem a little bit more willing to part with those dollars knowing, sort of, what they are going to see on screen.

LISOVICZ: Point well taken, Paul, about the familiar characters and sure fire way to drag in the audiences. But some of these sequels are hundreds of millions of dollars in production costs. I'm reminded of that snowball film last year, "My Big Fat Greek Wedding." Cost nothing to make, made hundreds of millions of dollars in profits. So why aren't the studios concentrating on that as well?

DERGARBEDIAN: Well, if you think about, "My Big Fat Greek Wedding" was more of an anomaly. It's rare that you find these films that cost $5 in terms of their budget, and make over $200 million. It's a very rare thing. What is more comfortable for the studios is to take big concepts, to release them this summer. It's really about the idea of the movie. Is it "The Matrix," is it "2 Fast 2 Furious?" Is it "Charlie's Angels?" Plug in big stars and go with those known stars, known ideas, known themes, but again, the "Big Fat Greek Weddings" of the world teach us that you don't always have to go with those tried and true formulas. Sometimes if you go with something a little bit different, audiences really respond in a big way.

SERWER: You know, Paul, to me, it's really all about safety. It's all about making safe movies because they cost hundreds and hundreds of millions of dollars, and increasingly, these companies are looking to smooth out their revenues and cash flows. They're public companies. People don't realize that Hollywood's become so institutionalized over the past 20, 30 years ago. I mean, 30 years ago it was kind a crazy hodgepodge town. Now, it's these big corporations. Is Hollywood becoming less creative because of that?

DERGARBEDIAN: I think probably that's correct in a sense, because what you have are movies that feed off of video games, they feed off of merchandising, and it tends to all revolve around this one thing, which is generating revenue through generating awareness of these movies. And whether they do it with the movie itself or with the video game that's tied to the movie, it really just creates an atmosphere of let's go with the tried and true formula. Let's not deviate too much from this.

Now, there will, of course, this summer be some original films, although some of them are based on other known properties, such as "The Hulk," but at least that's the first probably in what will be a series of films.

So there are some original ideas out there. But by and large, it just seems that the films that we all know are the ones that keep coming back. And the ones that do well sort of signal to the studios that, hey, this is something the audience wants to see. And they'll just keep making more of them.

CAFFERTY: What does it take to get a studio to take a flyer, take some risk these days? Do you have to have a big name like a Julia Roberts or somebody like that and go in and say, look, this is a script I want to do and they will do it because it's Julia Roberts? Do you have to have a pocketful of money and offer to bankroll part of it yourself? I mean, where is the flyer? I mean, how does "The Big Fat Greek Wedding" that might cost $50 gets made these days?

DERGARBEDIAN: Well, the film that would be, let's say, a big budgeted film, you have to have a big concept behind it, and of course a big star doesn't hurt at all. In fact for the studios they still look upon stars as a way to guarantee their opening weekend box office.

But we've seen in the past few years it doesn't always take a big star, that sometimes it's just about the marketing. That a film that has a big marketing push where a lot of awareness is created, everybody's talking about the movie. For example, "The Matrix: Reloaded." I don't think there is not a person -- there can't be a person in this country who is not aware of this movie being in theaters. That creates this fervor. Moviegoers then feel some need to go out and see the movie so that they have something to talk about. It's sort of a pack mentality, which is fine, that's how a lot of entertainment gets started, that people tell their friends about it and everyone jumps on the bandwagon.

LISOVICZ: So, Paul, we have 16 sequels over the summer, which is a very finite amount of time. So not all of them are going to be big. Which ones do you think are going to be hot?

DERGARBEDIAN: Well, there are -- exactly, there is a finite amount of time, basically from August -- excuse me, from May through August, we have 16 sequels. Not all of them are going to be hits, although right out of the gate, "X2, X-Men United," the sequel to the first "X-Men," was a huge hit with $85.5 million. That's the first weekend in May. We have "Matrix Reloaded," obviously a huge hit. Beyond that we have films like "Charlie's Angels," "Full Throttle," "2 Fast, 2 Furious," "American Wedding," which is a sequel to "American Pie II."

And again, it's just sequel after sequel. Not all of them can do well. There are some that are of a lower budget that may not show up in the top five films but still could earn a profit based on the audience's familiarity with those films.

LISOVICZ: We will revisit the issue, that's for sure. Paul Dergarbedian, the president of Exhibitor Relations. Thanks for joining us.

The thing about watching this show is, if you want to get on, you've got to sound off. Write us an e-mail about what is on your mind and we just might read it on air. Here is the address -- inthemoney@cnn.com.

(COMMERCIAL BREAK) CAFFERTY: The Internal Revenue Service looking for some outside help in its never-ending quest to separate us from our money. Congress has approved a bill that would allow the IRS to use private firms to collect up to $76 billion in uncollected taxes. Of course, if the IRS really wants to know about the best outside contractors when it comes to collecting debts, we could give you some names here in New York, but the really good people at that job, well, they don't usually like to cooperate with the government, if you know what I mean.

Speaking of uncollected taxes, the state of Connecticut says Fox News commentator and former Clinton adviser Dick Morris is one of its biggest tax deadbeats. Connecticut says Morris owes it more than a quarter of a million dollars in back state income taxes and is number six on the state's top 10 list of delinquent taxpayers. There is no comment so far from Mr. Morris.

SERWER: I got an idea. Let's send Tony Soprano after Dick Morris. That's right. I mean, that's what we're talking about here, isn't it?

CAFFERTY: My question is, the IRS says there are $76 billion owed, right? If I make a $12 mistake, you can set your calendar that 90 days after April 15 I get the little thing in the mail saying, you made a $12 mistake, please remit this immediately. They find me all right, how come they can't get these other people?

LISOVICZ: $76 billion, let's think about it, that's not chump change, and here we are facing this looming federal deficit. I mean, why so late? Why just now?

SERWER: What kind of contractors are they going to get, though? I mean, again, getting back to this Tony Soprano.

(CROSSTALK)

LISOVICZ: I think he only works within the tristate area.

SERWER: Well, he's going to take a piece of that, out of the action.

(CROSSTALK)

CAFFERTY: ... collection agencies, they get a piece, though. You mean, you hire a ...

(CROSSTALK)

SERWER: They never get to me.

CAFFERTY: Who?

SERWER: The collection agencies.

CAFFERTY: Because you don't answer your phone.

SERWER: No, I don't answer it.

CAFFERTY: Well, you're a big-time executive. You're an editor of a national magazine.

SERWER: No, no, I have an answering machine, Jack. All you need is an answering machine.

(CROSSTALK)

CAFFERTY: Do you know how lucky we are to be able to to sit here and talk to Andy Serwer for an hour on Saturday afternoon?

(CROSSTALK)

SERWER: Call him up, no wonder they come after you. You're bothering people.

CAFFERTY: All right. A lot of people sounded off on topics from last weekend's show during the discussion about Ted Turner dumping most of his AOL Time Warner shares -- well, not most, a little over half. Jeff from Chicago wrote the following -- "If you're interested in thrashing the man who is responsible for you all having jobs, you are doing great. Suggesting he is stupid is absurd." I don't think we suggested that, but whatever you think. "It is also questionable whether you could fairly do a segment on AOL Time Warner's stock."

Well, Jeff, we'll either annoy you again, or redeem ourselves, because tomorrow, at 3:00 -- see, we are at different times on Saturday and Sunday, tomorrow we'll be on at 3:00 -- we will get a closer look at Ted Turner, with Patricia Sellers, who has just completed a cover story for "Fortune" magazine on Mr. Turner and his future auctions.

We also talked about rich executives' pay packages last weekend. On that, Blaze writes to issue: "You forgot to mention the president of United States. He makes $400,000 a year, gets the use of Air Force One, Marine One, all while the economy is in the dumps. We need to fire him in '04."

Hey, Blaze, guess what, 400 grand ain't no big deal anymore.

SERWER: He does it for the perks.

CAFFERTY: Yes. The big money is made -- you know, check the salaries of the boys down on Wall Street, if you want to talk about the big bucks.

Remember, you can get in on all of this fun by e-mailing us at inthemoney@cnn.com. And you won't get a real response, either. We'll read the thing on the air, or our producer Jake will drop you a little note of thanks.

If he asks for money, don't send it.

SERWER: Yes. CAFFERTY: All right. That's it for this edition of IN THE MONEY. Thanks to our panelists, as always, Andy Serwer of "Fortune" magazine, CNN's Susan Lisovicz. I am Jack Cafferty. See you tomorrow, 3:00. Try to be on time. Thanks for watching.

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





Risk?; Can U.S. Deliver on Promise to Rebuild Iraq?; A Look at Hazing Incident in Illinois>


Aired May 17, 2003 - 13:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From New York, where cash is king and plastic is fantastic, this is IN THE MONEY.
JACK CAFFERTY, CNN: Good afternoon, welcome to another edition of IN THE MONEY. I'm Jack Cafferty.

Coming up on today's program, risky business. Western workers in Saudi Arabia come under attack from terrorist bombers.

Find out whether America's relationship with the kingdom is costing more than it's worth.

Plus, the path to peace, or the road to ruin? With Iraq more lawless every day, we'll see if the United States can deliver on its promise to rebuild the nation.

Sugar and spice meets blood sweat and tears. If you think violence is just for boys, think again. Some Illinois high school girls will make you think twice about that. We'll look at whether tough girls rule.

We've rounded up the usual suspects for today's program. My two good friends, CNN's national reporter Susan Lisovicz, and "Fortune" magazine editor-at-large Andy Serwer.

Nice to have you with us.

ANDREW SERWER, FORTUNE MAGAZINE: Hey, good to be...

CAFFERTY: What do you like this week?

SERWER: Well, I mean, we're still dealing with the situation in Iraq, and obviously the headline, though, is Saudi Arabia. The big question is should U.S. companies -- should the U.S. presence be maintained and if so, how do you protect those people?

SUSAN LISOVICZ, CNNfn CORRESPONDENT: Well, we have thousands and thousands of troops there and that's been a big source of resentment in the Middle East.

But they're going away this summer so the whole situation could -- could -- and we hope -- ease a little bit.

CAFFERTY: And a lot of controversy surrounding the reported request by American officials to step up the security of the complexes that were hit by the terrorists two days before the attacks actually occurred. The Saudi government refused.

So we'll talk about that some today, too. The relationship between the United States and Saudi Arabia not so much a love affair as a marriage of convenience.

With the United States, it brings business -- big business, influence in the region, and oil. Five hundred fifty million barrels of crude out of the kingdom last year.

For the Saudis, it means U.S. protection and lots and lots of U.S. cash. Riyadh's exports to the United States nearly 13 billion dollars in the year 2002 alone. But the marriage of convenience has a price tag all its own.

This week terrorists struck three residential compounds for Americans and other western workers in the capitol city of Riyadh. Those attacks left dozens of people from several nations dead including eight United States citizens.

U.S. Secretary of State Colin Powell visited the scene of the bombings, which came just hours before he arrived in Saudi Arabia on a scheduled visit. Officials from both countries say the strike looks like the work of al Qaeda.

Some officials in Washington have accused the Saudis of doing too little to combat terrorism in their own country. But one former U.S. ambassador to Saudi Arabia thinks we could do a better job on that score ourselves and that we should not distance ourselves from the Saudis.

Richard Murphy is now a senior fellow at the Council on Foreign Relations in Washington D.C. and he joins us for his thoughts on this topic today.

Mr. Murphy nice to have you with us. Thanks for joining us.

RICHARD MURPHY, FMR. AMB. SAUDI ARABIA: Thank you. Pleasure.

CAFFERTY: Each time one of these terrorist events happens, the discussion about whether or not the Saudis are doing enough -- and I put that in quotation marks -- to combat terrorism in their own country -- becomes a hot topic of debate. And each time the answer seems to be, at least opinions on this side of the Atlantic Ocean, the answer seems to be no they're not.

MURPHY: Clearly enough, Jack, they weren't doing enough the other night, and I don't know how specific our request was to the Saudi authorities. We had a very senior U.S. official over there a few days before the events, but they can't say that enough had been done when these terrorists broke into the compounds and blew up that housing.

CAFFERTY: So what -- what do we do going forward? I mean, you go back to the -- the bombing of the housing complex -- this is the third time since I think 1995 that Americans have been killed by terrorists inside Saudi Arabia. And each time we sort of seem to paste over the relationship between the two countries and try to go forward with this awful thing hanging in the background.

There's a co-dependence here, obviously, between their dependence on our dollars and our military and our dependence on their oil. But is the price we're paying, i.e., in human lives, getting to the point where it's too high?

MURPHY: The difference this time is that this third in a series as you say, '95 in Riyadh, in '96, this time these were not active duty military personnel, these were civilian contractors. Not just American -- other nationalities and Saudis. Saudis died, including some -- a couple of quite prominent ones in the attack that night.

Is the cost too high? Ultimately that's going to be a decision, I think, both for the companies involved and even more importantly the individuals involved. Some of the early interviews showed that they were -- individuals saying well look, it's 50/50 -- it's a close call. Will we get the security we need to live and work here?

CAFFERTY: Mr. Murphy, let me ask you to follow up on that a little bit. As you said, these were private citizens, not military. 35,000 Americans work and live in Saudi Arabia. Boeing, Exxon, Chevron, all kinds of companies there.

Number one, if you were an American working there, would you leave? And number two, should the U.S. government ask the Saudis to guarantee their safety and can they do that?

MURPHY: The U.S. government can certainly ask for major security details to be provided to these compounds. Yes, your figure 35,000 may be even a few thousand more citizens. 15,000 as I understand it in Riyadh as of today spread out over a big city. They're not -- it is not an American compound. There are 15,000 Americans in -- that's not to say there are not a couple dozen or more in different areas.

Can they be secured? Against a determined assassin ready to commit suicide? Who has some inside knowledge of how their security within the compound works, which was clearly the case the other night?

The answer is no, they cannot be guaranteed.

CAFFERTY: Would you stay yourself?

MURPHY: Why would I have gone there in the first place? For professional reasons and for the money involved and I would be putting those in the balance scale against my safety and the safety of my family.

LISOVICZ: Mr. Ambassador, it has to also be noted that one of the important things about Saudi Arabia is this is the place where al Qaeda and other terrorist groups raise their money to carry out these attacks. Not only that they're carried out in Saudi Arabia but elsewhere. The Saudi government in December froze $5.5 million in accounts that it said were related to terrorist activities or groups. Is that enough or is that just a drop in the bucket?

MURPHY: That's a drop in the bucket on their side and frankly the figures I've seen about accounts frozen under direct U.S. control is a small amount whether it's a drop or a few drops in the bucket.

What I was told, I was out there in January, was that they had decided that these contributions through the various charitable foundations which people give to as a religious obligation -- it's like tithing.

Those charitable contributions would have to be spent inside the country on the (UNINTELLIGIBLE) of Saudi Arabia and that permission would not be given for the money to move outside.

Now that's what I was told, that needs to be confirmed that it's still in effect.

CAFFERTY: Bottom line what do we do about it? Do we pull everything out of there and unravel all of these business connections? With our dependence on oil out of that part of the world, that doesn't seem like perhaps a very practical idea. So what do we do to fix this? Is it fixable or do we just simply have to live with periodic episodes like this?

MURPHY: Well it really isn't our dependence on Saudi oil; it's the world's dependence on Saudi oil. You're talking bout 8 million plus barrels a day.

Major contribution to the world consumer and in the past our military presence was considered well we were protecting the American consumer.

We really weren't these last decades; we've been protecting the world economy that if that source were threatened through acts of terrorism and closing down of operations and particularly if they hit the oil industry itself it would have been a disaster for the world economy.

Now what can we do as I say it's going to be a decision taken by individuals by their companies and by the U.S. government and working with the Saudis to increase the security of American citizens living and working there who want to stay.

LISOVICZ: We certainly hope that things will get better there and we know that we may be talking to you in the future about that. Richard Murphy, former ambassador to Saudi Arabia, senior fellow at the Council of Foreign Relations.

Coming up on IN THE MONEY, new boss, old problems.

As Washington swaps out its Iraq reconstruction sheet, we'll look at whether it change in staff is enough to put the country Plus, after a hazing goes haywire in Illinois, we'll see whether means equal queen. And 100 years on the road as Ford gets ready to celebrate its centennial. We'll kick the tires and check under the hood.

(COMMERCIAL BREAK)

CAFFERTY: When the United States won the war in Iraq it also took on the world's toughest adoption project. Think of Iraq as the classic troubled child -- good underneath but still wild and ornery after years under an abusive father and barely able to look after itself. Now maybe that's a bit of a reach, but it's the best we could come up with on short notice.

Washington promised to turn Junior into a stable, responsible member of society. Tens of billions of U.S. dollars are expected to go toward that very end.

But today Iraq remains very short on security, short on supplies, short on hope, and long on internal disagreement and violence. This week the Bush administration brought in former state department employee L. Paul Bremer to head Iraq's reconstruction effort.

He's replacing ex-general Jay Garner, who will be phased out over the next few weeks.

The longer it takes to make Iraq peaceful and prosperous, the harder the job becomes. For one perspective on reconstruction we're joined from Washington by Michael O'Hanlon, who is a senior fellow in foreign policy studies with the Brookings Institution.

Mike, nice to see you. Thanks for joining us.

MICHAEL O'HANLON, BROOKINGS INSTITUTION: Nice to be with you.

CAFFERTY: What's Mr. Bremer going to be able to do that the general wasn't?

O'HANLON: First of all, I'm not so critical of General Garner as some people. I think that the problem here was really in the Pentagon with Secretary Rumsfeld and perhaps General Franks in Centcom. They were not ready for the transition to the stabilization mission.

They expected a much easier welcoming, essentially, and they just didn't value the importance of stabilization as much as the importance of war fighting.

I don't know if General Garner was really the big problem here. But I do think that Mr. Bremer is off to a pretty good start. Listen, there's going to be political chaos for a while. We've got to create some new mechanisms for giving a lot of people a voice; they're going to compete with each other for influence; it's going to be like any democracy, except messier. You pointed out Saddam had been obviously imposing his will for a long time.

So the politics -- it's going to be messy. What we cannot allow is the crime to continue, the looting, the raiding of weapons of mass destruction sites, the unauthorized digging up of gravesites. This has to stop. This is actually poisoning the long-term potential of Iraq, and I think that for whatever reason we got off to a very bad start.

I think Mr. Rumsfeld and General Franks had more to do with the problem than General Garner.

LISOVICZ: But Michael, isn't one of the advantages that Ambassador Bremer has is that he will simply have more power than General Garner did?

O'HANLON: You may be right, and also he's had a chance to watch a month's worth of mistakes and I think the combination of those two does bode well.

Unfortunately, we've already created some first impressions, which aren't very favorable in the minds of the Iraqi people. You don't want to convey a sense of uncertainty, of lack of resolve. And so Mr. Bremer now has a harder job than he might have otherwise.

But I think you're right. More authority consolidated in one person with the Washington debates largely now over about who's going to be in charge and which department, Defense or State, is going to have a greater role.

I think Bremer is in a good position. But again the job on the ground is challenging enough just to sort out the politics. And if we can't stop the crime, we're really still in a bad situation.

SERWER: Michael, let me ask you a question here. It's obvious the administration spent a great amount of time planning the war part of this effort. All types of scenarios, war games and all that.

Do you think they spent enough time, though, in post-war planning what that would look like, what the Iranians would do, what the Shiia Muslims would do. Do you even think they thought about that enough?

O'HANLON: Well, a couple of things. I want to be fair because I am a critic, and I will go along with the spirit of your question. I think they blew it on a couple of fronts but the fact that the Shiia Muslim are competing for influence, the fact that Iran is worried about what's happening next door. Some of these things are inevitable.

And politics is going to be messy inside of Iraq. That part I don't blame the administration for. What I do blame them for is as you say not doing enough planning of how to keep law and order, how to protect weapons of mass destruction sites from being raided, how to protect hospitals so that we could take care of the Iraqi people, getting relief supplies in position quickly enough that we could prevent cholera outbreaks like the one now underway in Basra where we can't provide clean water.

Some of these things really were foreseeable but the administration, for example, was debating General Shinseki, the chief of staff of the Army saying we don't really need a big occupation force or a big stabilization force, the Iraqis are going to welcome us with open arms, they're going to take care of their own country -- these were badly mistaken assumptions and now we're paying the price.

CAFFERTY: Is there a time table, Mike, in your opinion beyond which what credibility the Americans have over there that remains will -- will begin to simply disappear, ebb away?

O'HANLON: I don't know if I can put a number on how many weeks or months. I think we're still in a strong position because, of course, we still have 150,000 plus coalition troops inside of Iraq with more on the way, and that conveys a certain sense of power and resoluteness by itself. Especially as we start using those forces more assertively against looters and other criminals.

So I'm not so convinced that we have permanently jeopardized the success of the mission but every week you lose you make it harder and you also reinforce the impression in the Arab world that we really didn't care so much about stabilizing the country and helping the Iraqi people as we cared bout going after our old nemesis and, quote/unquote, getting our hands on his oil.

You don't want those impressions to take root in a region that already is so angry at the United States.

LISOVICZ: So how do you restore credibility? One of the big promises after the U.S. took Baghdad was that we'd get out of there quickly, the Iraqis would run their new government but basic services have yet to be restored, we've got rapid violence there. Carjackings, shootings, just general anarchy. So how do you get out quickly when nothing's really happened in the past month?

O'HANLON: You don't get out quickly and that's where Mr. Rumsfeld has been most wrong of all and he was frankly guilty of a bit of gloating after the war when he gave his speech saying that never before have so many been so wrong about so much, thinking the war would be difficult and then it turned out to be relatively fast.

Well, frankly, Mr. Rumsfeld got a lot wrong on the stabilization effort. He was talking about a quick exit and a small U.S. force if anything would be needed beyond a few months time. He was badly wrong and unfortunately it has gotten us off to a very poor start here. The good news about Rumsfeld, he's usually capable of recognizing when he's made a mistake and I think he is in the process of correcting that mistake, but there will be some lasting damage.

CAFFERTY: All right Michael we got to leave it there. I appreciate you coming on with us today. Michael O'Hanlon, senior fellow of foreign policy studies at the Brookings Institution. We'll see you again soon.

O'HANLON: That's great, thank you.

CAFFERTY: Coming up next on IN THE MONEY how high the mileage. Ford's gearing up to celebrate one century on the road. See if the hundred-year-old company has as much drive as ever. Also ahead social studies. Find out whether mean girls grow into mean women. And -- stop nodding your head.

And everything old is new again with Hollywood cranking out a record number of sequels this summer. We'll look at why take two is suddenly number one. Back after this.

(COMMERCIAL BREAK)

SERWER: Our stock of the week, the Ford Motor Company is about to celebrate its 100th anniversary.

The huge corporation has come a long way since Henry Ford and 11 business partners started it all with 28,000 in cash.

But Ford is facing some real challenges right now including high production costs and directors who seem to be spending a lot of time fighting amongst themselves.

Joining us to give an inside look at Ford is my colleague at "Fortune," editor Alex Taylor. Alex, great to see you.

I want to ask you about that situation wit the family and the directors and management. Obviously the family still owns a lot of this company. Is that a problem for this company?

ALEX TAYLOR III, FORTUNE MAGAZINE EDITOR: Well, in a lot of ways the family ownership at Ford is a benefit because the Ford family has controlled Ford for 100 years; they control 40 percent of the voting stock sot here's been a consistency of control there that other companies haven't had.

The unfortunate thing is when you have a Ford at the top of the company it creates kind of a monarchy situation where everybody is trying to get the favor of the king and it creates a lot of fighting down beneath the ranks and that's what Ford has been suffering the last couple of years.

LISOVICZ: Well, let's talk more about who's running the company, Alex. That would be Bill Ford who I understand is the great-great grandson of Henry the Ford who apparently is a very likable guy; he's a gear head, but he's had very little operating experience.

How's he doing?

TAYLOR: Well he's kind of learning on the job. He started out as chairman of the board in 1999, which was really a job he's very well qualified for having been on the board of directors for more than a decade.

But for the past two years or so he's been CEO and companies are basically very simple; they design and build cars -- but running them operationally is very complex and Ford's got a lot of operational problems in the past couple of years with manufacturing launches and quality. And Bill Ford just doesn't have the experience to deal with that sort of thing so he's having to work through subordinates to get the job done.

CAFFERTY: Alex, Jack Cafferty -- Ford stock is around $10 a share, thereabouts. Down from a high of I think around $30 two, three years ago. And yet Detroit has been selling more cars in the last three or four years than they've ever sold before. It's like one record year after another.

Due in no small part to these incentives that are in the marketplace that allow people zero percent financing; they can go in and buy a car with nothing down and they don't have to pay any interest on the car loan.

But in a way they're sort of cannibalizing themselves. I guess the question is, how can the stock be at $10 from $30 and yet record volume keeps coming out of these production plants every years?

TAYLOR: Well the problem is auto companies don't make any money; I mean even in a good year, Ford will make a net profit of only about 2 perfect. The price of cars goes down every year because the competition is so high and because capacity in the U.S. is so great. So -- and the third problem is domestic auto companies like General Motors and Ford are kind of in secular decline when it comes to market share because the Japanese are here, the Germans are here and now the Koreans are coming in here, big time.

So you've got a big old company like Ford with hundreds of millions of dollars in fixed assets and they're just trying to run those assets as best they can by pumping out the volume. They do that with incentives and that covers their costs but doesn't do much more.

SERWER: Alex I want to ask you a little bit about some of the models that Ford has. Obviously they're trying to revive the Explorer after all the problems there. I want to ask you about that, number one.

Number two, what's up with sedans and Ford. I mean, do they even make them any more? What's going on?

TAYLOR: Ford's has some hiccups in their product program for the past couple of years and the fact of the matter is they make all their money in trucks, mostly pick up trucks and big SUVs like the Explorer and the Expedition and so forth and sedans have been a smaller part of their market.

They're going to try and revitalize that over the next couple of years as General Motors is because you need sedans for their fuel economy but all the money is in trucks and Ford has been doing a pretty good job in trucks. The Explorer has bounced all the way back to the top-selling SUV in the country, surprisingly enough, despite all that controversy over their Firestone tires and Ford does very well with this line of big pickup trucks, too.

CAFFERTY: Does this company survive another 100 years, do you think?

TAYLOR: It will probably survive 100 years -- another 100 years. Auto companies are very tough to kill because they are so big and because there is so much national pride associated with them. But I think Ford is going to have to get smaller if it's going to get stronger. The market share of domestic automakers is shrinking too quickly and they've got too much over capacity that they can't afford to have so they've got to be a smaller tougher company to make it through another century.

LISOVICZ: You know, Alex, we've talked a lot about how the airline industry has the perfect storm facing and that's why you've seen these bankruptcies but you know it's interesting with the car industry too because you can't sell a car in America unless it's greatly discounted.

Then you have the importers increasingly taking away market share, and then you have a company where the top executives really hate each other. Is it true that the top executives actually have to take a business etiquette class in order to deal with each other?

TAYLOR: Well Ford is always been famous for the kind of sharp elbows it has in the executive suite to go way back to the 70s remember Lee Iaccocca fighting with Bumpy Newson and Phil Caldwell so these were all big, tough guys. A lot of them came up through manufacturing so they're used to kind of throwing their weight around, so there are some executive coaches trying to teach them how to all work together. Teamwork is a very important concept but when you have people with a lot of opinions and sharp elbows it's sometimes tough to get in practice.

CAFFERTY: Goes all the way back to the founder, though, doesn't it? I mean, Henry was no choir boy.

TAYLOR: Henry was no choir boy and the company he left behind was not in very good shape when he departed this earth back in the 40s, so. Ford has come a long way since them.

CAFFERTY: Interesting stuff Alex -- thank you Alex Taylor Alex Taylor editor of "fortune" magazine.

Coming up next on IN THE MONEY, sugar and spice and everything else. Girls can play just as rough as the boys. Ask Andy Serwer. A hazing in Illinois proves our point. We'll look at whether tough now means man and tough later.

Plus we'll find out why Hollywood thinks the sequel is a smart investment this summer. Sixteen of these things on the way to a theater near you.

(COMMERCIAL BREAK)

CAFFERTY: Officials of the suburban Chicago high school this week suspended dozens of girls and a few boys over a hazing incident that turned violent. It started out as a traditional powderpuff touch football game earlier this month for girls from Glen Brooke North high school, but it ended up with five kids in the hospital and it turned into a very ugly situation, as you can see in this tape.

We wondered what happens when girls who act mean turn into the grown-ups we deal with on the job. Our next guest says that girls who will do anything to fit in when they are younger can find it hard to stand out when they get older. Rosalind Wiseman is author of "Queen Bees and Wanna-bes: Helping Your Daughter Survive Cliques, Gossip, Boyfriends and Other Realities of Adolescence." She's also the president of the Empower Program, a non-profit organization that helps kids settle disputes without violence.

Rosalind Wiseman joins us today from Washington, D.C. It's nice to have you with us. Give me your reaction to this thing in Illinois. It's a pretty ugly situation. What's your take on it?

ROSALIND WISEMAN, AUTHOR: It is, and I think that what it shows is that people, adults, even well-intentioned adults, really did not want to admit that this kind of thing could happen in their community, because these are girls and they're from a middle-class community in the suburb. And as long as adults are in denial about what kids can do to each other, and especially if there are kids who are privileged in that community, kids are going to -- students oftentimes will push and push and push to see what the rules are. And oftentimes, it can get completely out of hand.

And what I saw is a school that didn't know what its boundaries really were, because the principal did not know that he had jurisdiction, even though it was outside of the school property. And I am also unfortunately seeing that some parents really feel, like, they don't want to have their kids take responsibility for this behavior, and that's a real -- that's a really sad thing to see.

SERWER: Rosalind, I am a father of two daughters, and this is really a nightmare situation. Not only in terms of the kids going to the hospitals but especially the girls just following blindly like that. That's what's most disturbing. So how do you empower, for lack of a better word, girls and make them not just follow like sheep?

WISEMAN: Well, I think what happens is that what you saw in this school is that there is an honor code that the adults and the kids all agreed to up front, which sounds good and all parents feel good about. Like, we're going to respect etch other and not be violent towards each other, and there were hazing policies in place. But then underneath that is a secret covert peer code among the kids, and I think if we don't address that, then you as a father, for example, it does get very scary if you have kids and you're taking them to school.

So how do you get them to not follow blindly? The most important thing is that the parents cannot be in denial that this stuff can happen. The other part that we've got to be able to do is teach girls not sacrifice their personal boundaries when they here in pre- adolescence, the tweens, like 9 to 12, with their friends that are usually girls, because girls have these incredibly tight friendships and they learn unfortunately to often sacrifice what they want and even their own physical safety at the hands of girls who are more powerful, and that goes with them as they get older, and this is the kind of stuff you see in high school that can happen. LISOVICZ: You know, Rosalind, using friendship as a weapon, I remember seeing a movie that has since become a cult film, "Heathers" with Winona Ryder, really shows how mean girls are. But typically it's a different mean than boys. Boys often act out in a physical way. Girls act out with their head. They will snub someone, they will spread gossip. Can you explain how you try to counteract that as a parent?

WISEMAN: Sure. I mean, girls have -- they -- women and girls, by the way, women as well, can have entire conversations with each other without saying a word, and it's very important to know and to respect the fact that if a girl -- traditionally what bully has been looked at, what you talked about is a boy taking other boy's lunch money, that kind of stuff.

But girls, it might look different, because girls might gossip or be exclusive, or write petitions, or say you can't come back to school anymore, but it might look different, but it is the same. And here's what's important about it. It is that whoever has power and privilege in that school, that if we don't -- in answer to your question -- if we do not hold those kids accountable in consistent ways, then what they learn is that those kids who have power and privilege get to do with that power and privilege what they want to kids who do not have it.

And as a result, you can have the best policies in place, but if that's lesson that's learned, then the kids really feel like that school is unsafe.

CAFFERTY: All right, Rosalind, what happens, though, when mean girls or girls who follow blindly, what happens when they grow up to be adults?

WISEMAN: Well, there's a couple of things that can happen to them. One is that they're sacrificing their personal boundaries and they are sacrificing what they want and what they don't want at 12, they're going to be doing it very often in their adult years, and it can very much follow into, for example, job interviews.

Or if girls -- if you ask a 12-year-old girl, what are you good at? Oftentimes girls would say, well I guess I am good at X, Y, and Z, even if they could be very, very, very excellent, and that translates later into life. Many times when you ask young women what they are good at, they will say, I guess I am good at. And if they are trying to get a raise or if they are trying to promote themselves in an organization or a company, they are not going to look like they know what they are doing, and that is a direct connection between what they learn when they are younger and in their adolescent years and how they will achieve as they get older.

LISOVICZ: So in the meantime, we have these counseling programs all over the country to try to make girls more assertive without being mean. And you actually teach an apology class. Can you explain what that is and what has happened as a result?

WISEMAN: Sure. I am going to back up a little second, which is that I think from what you're talking about with classes, I think in some ways parents have been so focused on teaching girls to have self- esteem that we think that that's the most important thing to teach, and that teaching empathy and compassion or ethics actually goes by the wayside, it's not as important as teaching a girl to look like she has self-esteem. But girls who look like they have self-esteem can also be tyrants, like what you saw in that video, and it could be false self-esteem. Girls know the self-esteem game. They know how to present to parents, and to teachers, and counselors what it looks like to have high self-esteem, because kids are smart.

So what is important to realize is that with classes and apologizes, is not that it's self-esteem and self-concept and self- worth, it's very much about moments when you have to take responsibility and take accountability for what you do, and that you learn social competency as a result. And that's what apologies do. I think it's very powerful to be teaching apologies to people, because people do not do it enough.

CAFFERTY: Interesting stuff, Rosalind. I am very sorry, but we're out of time.

WISEMAN: My pleasure. Thanks for having me.

CAFFERTY: Rosalind Wiseman. She wrote the book: "Queen Bees and Wanna-Bes, Helping Your Daughter Survive Cliques, Gossip, Boyfriends and Other Realities of Adolescence." We'll talk again.

Still ahead on IN THE MONEY as we continue sticking to the story, Hollywood's betting sequels will be the hottest ticket this summer. Find out why the studios are playing it safe, some say.

And your chance to tell us what's on your mind about movies, money, or anything else you see on this here program. The e-mail address is inthemoney@cnn.com. Our producer Jake's (ph) lonely. Write him a letter. Correspond. Makes him feel good.

(COMMERCIAL BREAK)

CAFFERTY: Looking for originality at the movie theater this summer? Well, tough noogies, you are out of luck. Sixteen sequels will dominate the silver screen. And there are a couple of remakes as well. Has Hollywood just run out of ideas, or are the studio execs too scared to market an unknown commodity? At the end of the day, it's all about the Benjamins.

Joining us to talk about the business of Hollywood, Paul Dergarbedian, who is the president of Exhibitor Relations, that's the outfit that tracks movie sells and tells us every week which films are number one at the box office. Paul, it's good to have you with us. Thanks for joining us.

PAUL DERGARBEDIAN, EXHIBITOR RELATIONS: Good to be here.

CAFFERTY: So how come it's all about the sequels this summer?

DERGARBEDIAN: Well, this year we have 25 sequels for the year; 16 sequels for the summer. That's a record in both categories. You know, it's all about, of course, the Benjamins, as you said, and it's about familiarity. It's about themes that people are comfortable with, characters that they know. I think there's a little bit of on both sides, in terms of studio executives wanting something that is a known commodity, hedge their bets a little bit, play it safe. But on the other hand, moviegoers too when they are going to plunk down their $10, they have an idea of these characters and they seem a little bit more willing to part with those dollars knowing, sort of, what they are going to see on screen.

LISOVICZ: Point well taken, Paul, about the familiar characters and sure fire way to drag in the audiences. But some of these sequels are hundreds of millions of dollars in production costs. I'm reminded of that snowball film last year, "My Big Fat Greek Wedding." Cost nothing to make, made hundreds of millions of dollars in profits. So why aren't the studios concentrating on that as well?

DERGARBEDIAN: Well, if you think about, "My Big Fat Greek Wedding" was more of an anomaly. It's rare that you find these films that cost $5 in terms of their budget, and make over $200 million. It's a very rare thing. What is more comfortable for the studios is to take big concepts, to release them this summer. It's really about the idea of the movie. Is it "The Matrix," is it "2 Fast 2 Furious?" Is it "Charlie's Angels?" Plug in big stars and go with those known stars, known ideas, known themes, but again, the "Big Fat Greek Weddings" of the world teach us that you don't always have to go with those tried and true formulas. Sometimes if you go with something a little bit different, audiences really respond in a big way.

SERWER: You know, Paul, to me, it's really all about safety. It's all about making safe movies because they cost hundreds and hundreds of millions of dollars, and increasingly, these companies are looking to smooth out their revenues and cash flows. They're public companies. People don't realize that Hollywood's become so institutionalized over the past 20, 30 years ago. I mean, 30 years ago it was kind a crazy hodgepodge town. Now, it's these big corporations. Is Hollywood becoming less creative because of that?

DERGARBEDIAN: I think probably that's correct in a sense, because what you have are movies that feed off of video games, they feed off of merchandising, and it tends to all revolve around this one thing, which is generating revenue through generating awareness of these movies. And whether they do it with the movie itself or with the video game that's tied to the movie, it really just creates an atmosphere of let's go with the tried and true formula. Let's not deviate too much from this.

Now, there will, of course, this summer be some original films, although some of them are based on other known properties, such as "The Hulk," but at least that's the first probably in what will be a series of films.

So there are some original ideas out there. But by and large, it just seems that the films that we all know are the ones that keep coming back. And the ones that do well sort of signal to the studios that, hey, this is something the audience wants to see. And they'll just keep making more of them.

CAFFERTY: What does it take to get a studio to take a flyer, take some risk these days? Do you have to have a big name like a Julia Roberts or somebody like that and go in and say, look, this is a script I want to do and they will do it because it's Julia Roberts? Do you have to have a pocketful of money and offer to bankroll part of it yourself? I mean, where is the flyer? I mean, how does "The Big Fat Greek Wedding" that might cost $50 gets made these days?

DERGARBEDIAN: Well, the film that would be, let's say, a big budgeted film, you have to have a big concept behind it, and of course a big star doesn't hurt at all. In fact for the studios they still look upon stars as a way to guarantee their opening weekend box office.

But we've seen in the past few years it doesn't always take a big star, that sometimes it's just about the marketing. That a film that has a big marketing push where a lot of awareness is created, everybody's talking about the movie. For example, "The Matrix: Reloaded." I don't think there is not a person -- there can't be a person in this country who is not aware of this movie being in theaters. That creates this fervor. Moviegoers then feel some need to go out and see the movie so that they have something to talk about. It's sort of a pack mentality, which is fine, that's how a lot of entertainment gets started, that people tell their friends about it and everyone jumps on the bandwagon.

LISOVICZ: So, Paul, we have 16 sequels over the summer, which is a very finite amount of time. So not all of them are going to be big. Which ones do you think are going to be hot?

DERGARBEDIAN: Well, there are -- exactly, there is a finite amount of time, basically from August -- excuse me, from May through August, we have 16 sequels. Not all of them are going to be hits, although right out of the gate, "X2, X-Men United," the sequel to the first "X-Men," was a huge hit with $85.5 million. That's the first weekend in May. We have "Matrix Reloaded," obviously a huge hit. Beyond that we have films like "Charlie's Angels," "Full Throttle," "2 Fast, 2 Furious," "American Wedding," which is a sequel to "American Pie II."

And again, it's just sequel after sequel. Not all of them can do well. There are some that are of a lower budget that may not show up in the top five films but still could earn a profit based on the audience's familiarity with those films.

LISOVICZ: We will revisit the issue, that's for sure. Paul Dergarbedian, the president of Exhibitor Relations. Thanks for joining us.

The thing about watching this show is, if you want to get on, you've got to sound off. Write us an e-mail about what is on your mind and we just might read it on air. Here is the address -- inthemoney@cnn.com.

(COMMERCIAL BREAK) CAFFERTY: The Internal Revenue Service looking for some outside help in its never-ending quest to separate us from our money. Congress has approved a bill that would allow the IRS to use private firms to collect up to $76 billion in uncollected taxes. Of course, if the IRS really wants to know about the best outside contractors when it comes to collecting debts, we could give you some names here in New York, but the really good people at that job, well, they don't usually like to cooperate with the government, if you know what I mean.

Speaking of uncollected taxes, the state of Connecticut says Fox News commentator and former Clinton adviser Dick Morris is one of its biggest tax deadbeats. Connecticut says Morris owes it more than a quarter of a million dollars in back state income taxes and is number six on the state's top 10 list of delinquent taxpayers. There is no comment so far from Mr. Morris.

SERWER: I got an idea. Let's send Tony Soprano after Dick Morris. That's right. I mean, that's what we're talking about here, isn't it?

CAFFERTY: My question is, the IRS says there are $76 billion owed, right? If I make a $12 mistake, you can set your calendar that 90 days after April 15 I get the little thing in the mail saying, you made a $12 mistake, please remit this immediately. They find me all right, how come they can't get these other people?

LISOVICZ: $76 billion, let's think about it, that's not chump change, and here we are facing this looming federal deficit. I mean, why so late? Why just now?

SERWER: What kind of contractors are they going to get, though? I mean, again, getting back to this Tony Soprano.

(CROSSTALK)

LISOVICZ: I think he only works within the tristate area.

SERWER: Well, he's going to take a piece of that, out of the action.

(CROSSTALK)

CAFFERTY: ... collection agencies, they get a piece, though. You mean, you hire a ...

(CROSSTALK)

SERWER: They never get to me.

CAFFERTY: Who?

SERWER: The collection agencies.

CAFFERTY: Because you don't answer your phone.

SERWER: No, I don't answer it.

CAFFERTY: Well, you're a big-time executive. You're an editor of a national magazine.

SERWER: No, no, I have an answering machine, Jack. All you need is an answering machine.

(CROSSTALK)

CAFFERTY: Do you know how lucky we are to be able to to sit here and talk to Andy Serwer for an hour on Saturday afternoon?

(CROSSTALK)

SERWER: Call him up, no wonder they come after you. You're bothering people.

CAFFERTY: All right. A lot of people sounded off on topics from last weekend's show during the discussion about Ted Turner dumping most of his AOL Time Warner shares -- well, not most, a little over half. Jeff from Chicago wrote the following -- "If you're interested in thrashing the man who is responsible for you all having jobs, you are doing great. Suggesting he is stupid is absurd." I don't think we suggested that, but whatever you think. "It is also questionable whether you could fairly do a segment on AOL Time Warner's stock."

Well, Jeff, we'll either annoy you again, or redeem ourselves, because tomorrow, at 3:00 -- see, we are at different times on Saturday and Sunday, tomorrow we'll be on at 3:00 -- we will get a closer look at Ted Turner, with Patricia Sellers, who has just completed a cover story for "Fortune" magazine on Mr. Turner and his future auctions.

We also talked about rich executives' pay packages last weekend. On that, Blaze writes to issue: "You forgot to mention the president of United States. He makes $400,000 a year, gets the use of Air Force One, Marine One, all while the economy is in the dumps. We need to fire him in '04."

Hey, Blaze, guess what, 400 grand ain't no big deal anymore.

SERWER: He does it for the perks.

CAFFERTY: Yes. The big money is made -- you know, check the salaries of the boys down on Wall Street, if you want to talk about the big bucks.

Remember, you can get in on all of this fun by e-mailing us at inthemoney@cnn.com. And you won't get a real response, either. We'll read the thing on the air, or our producer Jake will drop you a little note of thanks.

If he asks for money, don't send it.

SERWER: Yes. CAFFERTY: All right. That's it for this edition of IN THE MONEY. Thanks to our panelists, as always, Andy Serwer of "Fortune" magazine, CNN's Susan Lisovicz. I am Jack Cafferty. See you tomorrow, 3:00. Try to be on time. Thanks for watching.

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





Risk?; Can U.S. Deliver on Promise to Rebuild Iraq?; A Look at Hazing Incident in Illinois>