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CNN IN THE MONEY

Is Al Qaeda Back With a Vengeance?; This Year's College Graduates Face Tough Job Market; Taking Aim at SARS

Aired May 18, 2003 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.

JACK CAFFERTY, HOST: Good afternoon. Welcome to IN THE MONEY. I'm Jack Cafferty.
Coming up on today's program, wanted dead or alive. Just when you were ready to write off al Qaeda, it could be back with a vengeance. Find out whether the terror group is on the run or on the rise again.

And Reality 101. This year's college graduates face the worst job market in 20 years. We'll look at what that means for their career plans. Not good.

Taking aim at SARS. Find out about the companies and cash in the search for the magic bullet.

Joining me as always on today's program, my good friend and CNN correspondent, Susan Lisovicz, and Andy Serwer, "Fortune" magazine editor-at-large.

I've got a daughter graduating from college tomorrow. There are no jobs, and none of her -- she, none of the friends, I mean, it's terrible for these kids. It's the worst in a generation.

SUSAN LISOVICZ, CNNfn CORRESPONDENT: And you know, what an adjustment when you think that this -- this graduating class of 2003 started at 1999. They have really had to lower their expectations.

ANDY SERWER, FORTUNE MAGAZINE: Yes, they just going to go backpacking in Europe. Maybe they can go to France, Jack, or somewhere like that. Your daughter can spend the money over there.

LISOVICZ: Sit it out for a few years.

CAFFERTY: Not on my nickel, if you know what I mean.

SERWER: I know what I mean.

CAFFERTY: Anyway, just when you thought it was OK to relax, it looks like, on the much more serious note, al Qaeda may be back in action. That's the assumption in both Washington and Riyadh following this week's suicide bomb attacks on three residential complexes in Saudi Arabia. Dozens of people died in those attacks, which targeted buildings packed with western workers.

Nobody thinks al Qaeda and its leader Osama bin Laden are as strong as they once were. However, hundreds of the group's operatives being arrested in 98 countries. U.S. intelligence hunting members for the last 18 months does not negate the fact that the American campaign in Afghanistan, while disrupting the operations, did not bring it completely to a complete halt.

And now, al Qaeda may be changing, morphing sort of like a virus to a hostile environment. That could make it less centralized and potentially much more dangerous.

For a look at where al Qaeda stands today and what it might be up to tomorrow, we are joined by Eric Margolis, foreign affairs columnist at "The Toronto Sun", and an author of the book, "War at the Top of the World: The Struggle for Afghanistan, Kashmir and Tibet." Eric, nice to see you again. Thanks for being with us.

ERIC MARGOLIS, COLUMNIST, "THE TORONTO SUN": Nice to be with you.

CAFFERTY: Does this smack of al Qaeda according to the way you look at it, and if so, what makes you think it's them?

MARGOLIS: Yes, most certainly it does. It has the hallmarks of the typical al Qaeda operation. That is, meticulous planning, huge amount of explosives, coordinated attacks on different targets from different directions, a large number of suicide bombers involved, and most significantly, the fact that the target was a political target that was sure to have massive reverberations both in Washington and in Riyadh, where it undermined further the Saudi royal family.

LISOVICZ: Well, it's unsettling to say the least, Eric. I mean, here we had all this military hardware in Afghanistan, war in Iraq. We have this terrible terrorist attack in Saudi Arabia, and meanwhile, in Yemen, a couple of guys who are suspected of bombing the USS Cole are gone. They escaped from prison. They're everywhere.

MARGOLIS: Well, it's not just al Qaeda. You know, I've been saying for a long time, al Qaeda is a very small group. I don't think it ever exceeded a few hundred men. But, really, it's a master franchise organization, and it provides the psychological leadership for many groups across the Muslim world who are opposed to the United States, anti-American groups. And now, there are more of them popping up almost daily after the invasion of Iraq.

You have groups from Morocco to Indonesia who are angry at America for different reasons. They are rallied by al Qaeda. Some of them are linked very vaguely by personal connections to al Qaeda, but it's very hard to break up the organizations because there's so many and loosely linked.

SERWER: You know, you touched upon something which I wanted to follow up on, which you say that the -- that, you know, we have affected so many people around the world. The U.S., obviously, has been the only superpower for more than a decade. Call me paranoid, but is our enemies list increasing?

MARGOLIS: It has increased greatly. And I just came back from Europe, and I have to tell you that I have never seen such hostility to Americans. I think Americans are now going to go around saying, pretending, they're Canadians. It's an unprecedented situation.

There's Iraq, Palestine, ongoing war in Afghanistan, and the -- across the Muslim world, there is a perception that America has now become its enemy and is out to impose its will on the Muslim nations. So particularly amongst young people across that part of the world, there is an ever increasing hostility that is being fanned by radical statements and, of course, Osama bin Laden.

SERWER: All right, Eric, I don't know if I'm quite ready to declare myself a Canadian right yet, but what about, just to follow up on that point...

MARGOLIS: The taxes are punishing!

SERWER: Yes, absolutely. But to follow up on your point, I wanted to ask you about that. It is summertime. People are starting to look to travel abroad. Exactly how safe is it for Americans? I mean, Europe, people used to go to Egypt all the time, North Africa, and people traveled to Indonesia. I mean, should we just stay at home?

MARGOLIS: Well, you know, I've been all over the world all my life. I was hijacked in 1993 on a Lufthansa Airliner. I've been -- gone through all kinds of bombings and attacks and things. My view is that you can never beat the odds, and I just travel with sheer indifference to what might happen to me, and I think most Americans should take that tack of policy, too.

However, comma, there are a couple of sensible things to do, and that is not wear loud T-shirts saying, you know, death to -- death to foreigners or to congregate in areas that are frequented by Americans. I mean, you do have to a bit of caution.

CAFFERTY: Let me go back to this attack in Riyadh for a minute, Eric. American intelligence reportedly picked up reason to believe that this thing was going to happen a couple of days before it actually did, several days. They went to the Saudi government. They said, look, we think these residential complexes are going to be hit. We'd like to request that you put additional security on them. We'd like vehicles with 50-caliber machine guns at the gates. We'd like some kind of security squad inside the compound, et cetera, and it was request denied, and then all these people got killed.

The hijackers of the planes that knocked down the World Trade Center and hit the Pentagon, most of them were Saudi Arabians. Most of these people were Saudi Arabians. Based on your knowledge of terrorists, al Qaeda, Saudi royal family, and that whole strange relationship, give me your take on where we go from here with the Saudi government.

MARGOLIS: Well, you know, behind the screens there's venomous bitterness between the Saudi royal family and the U.S. government. There's a feeling in the States, of course, that the Saudis betrayed the U.S. and they are the hot bed of all these terrorists, and they are financing them. On the -- Saudis feel that the U.S. government is trying, or at least the sort of neoconservatives within the government, are trying to overthrow the Saudi royal family, and one of the reasons the Saudis were so unresponsive to these clear American warnings, which were an intelligence triumph, was that they don't want to cooperate at all with the United States. They feel that the U.S. is out to get them and that all their information self serving, but in this case, Washington has absolutely every right to feel enraged at the Saudi government.

CAFFERTY: Eric, it is always good to get your perspective on this stuff. You know much more about most on these subjects than a great many people. I appreciate your time here on IN THE MONEY this afternoon. Thank you.

MARGOLIS: My pleasure.

CAFFERTY: Eric Margolis, author of "War at the Top of the World."

Coming up on IN THE MONEY as we continue, college students on a crash course. This year's graduates may be about to learn some very hard lessons about the job market that simply doesn't exist this year.

And blown away, Ted Turner, the founder of CNN, says his fortune's taken a beating while at the fall of AOL Time Warner stock and the failure of the burger joints, buffalo burgers, that is. We'll talk to a reporter who has the mogul's side of story from the man himself.

Also ahead, all the news was just a fake. Oh, that's a cute shot. Former "New York Times" reporter, Jason Blair padded the facts with fiction. We'll look at how he could have been stopped and what lasting impact this horrible scandal may have on the Gray Lady. Stay with us.

(COMMERCIAL BREAK)

CAFFERTY: Welcome back to this tiny little program we do on Sunday afternoon.

This year's college graduates walking into the kind of job market that makes wonder whether or not you ought to brush up on burger flipping. It's awful. According to "The New York Times", these kids are the last class to enter the college when the stock market was still rising. Back then, it probably felt like you land a good job just by showing up with a freshly printed sheepskin, and you could.

But the class of 2003 is on a collision course with the worst job market in a generation, and that is forcing a lot of graduates to rethink the career choices. I mentioned at the top at the program, I have one of my daughters graduating. There are no jobs out there.

I was in Chicago four years ago and I remember taking a ride in from the airport at O'Hare, and there was a huge billboard over the highway out there that said, $100,000 to start. Anyone with a degree in computer technology or computer science, call this number, and, I mean, no joke. They were desperate to hire six-figures salaries...

SERWER: They had billboards up in Silicon Valley. It was amazing -- with $50,000 signing bonuses. Susan is right. How quickly it has changed, but I have to tell you, I remember graduating college back in 1981, and let me tell you something. It wasn't so great back then, and we did whatever it took. I mean, you went there, and you did internships, part time, nighttime. The whole mentality has changed, and that's what you have to do.

LISOVICZ: I think that's part of the reality check here is it changed so abruptly and so drastically. It is supposed to be the worst job market in 20 years, just in the last couple of years, so I think the expectations have come down in a hurry.

CAFFERTY: Well, I mean, look at the series of events that happened. The stock market bubble burst. The terrorist attack hit the World Trade Center and Pentagon, which caused a huge economic shock, which caused all the businesses to pull back immediately on any plans to hire or do capital investing.

So, you know, events kind of conspired against the kids, and now, we're not out of the woods. We are just making a very grudging recovery.

LISOVICZ: And you're sweating because you won't have the empty nest syndrome. That's for sure. More and more kids are coming back to live with mom and dad.

CAFFERTY: Yes, I think that's going to -- that may happen. I don't know yet.

Anyway, let's explore his a little further. If you are a student, a parent, or just somebody who wants your burger cooked by a kid who knows the meaning of "medium rare", the job market does matters.

Joining us from Philadelphia with more for the class of 2003, Marilyn Mackes. She is the executive director of the National Association of Colleges and employees. Marilyn, nice to have you with us.

MARILYN MACKES, NATIONAL ASSOCIATION OF COLLEGES AND EMPLOYEES: Glad to be here.

If you can solve this problem for these kids, boy, there would be a lot of grateful parents and children out there. What do they do?

Well, as a matter of fact, I'd be one of the grateful parents myself.

CAFFERTY: You, too, huh?

MACKES: Absolutely. To tell you the truth, this job market is actually better than was predicted last fall. You know, last fall, one of the groups that we survey, as part of our membership association, are the employers who are hiring grads, and last September, employers were telling us that they were going to see a 3.6 percent decrease in the hiring this year versus last year.

And as it turns out, we've done a variety of follow-up surveys with those employers, and both in late fall, early spring, and now at the end of the year, and what we've found is actually it's a flat market. It's actually kind of steadied out.

Now, that doesn't mean that it's a terrific market overall compared to, like, three years ago, and essentially what we're looking at is, you know, students having to be far more aggressive. Some of the things that you just mentioned, you know, taking on internships, taking on additional courses to expand their skills, there is a variety of things the students can be doing right now to help themselves.

SERWER: Marilyn, let me ask you here, for years, the double Es, the electrical engineers were kings, right?

MACKES: Right.

SERWER: Those were people who'd go and get jobs. Computer scientists, those were the ones getting those $50,000 bonuses. Is that still true? What are the hot areas, and what are the bad areas right now?

MACKES: Well, right now, the services sector is doing far better than manufacturing or IT. We all know that back, you know, three, four, five years ago, the dot com boom and all of the needs we had for technology bringing on people from computer science, computer engineering, information systems. They were looking at incredible salaries and bonuses and benefits. You were getting some examples of that.

Right now, we're actually seeing their salaries decreasing as much as seven percent from last year.

SERWER: What are the specific areas that are good, or are there any?

MACKES: There are some that are doing pretty well right now. Accounting services, some of the engineering consulting services, retail, educational services, primarily those areas that are really drawing from business majors, liberal arts areas, and even, quite honestly, some of our engineering people going into the services sector, as well.

LISOVICZ: Marilyn, when you talk about services, we are also seeing an increase in some of the most basic services out of the country. We're seeing a jump in students joining the Peace Corps and Americorps, which, I believe pays a whopping $9,300 a year.

MACKES: Right. There's no question that when you have a job market like this, it does open the door to exploring other kinds of interests and opportunities, but I will also say that even when things were considerably better in the job market as a whole, let's say about three years ago, two to three years ago, it was probably the best we have seen, we were also seeing in increased interest on the part of college students to get into community service.

CAFFERTY: What about the economy and the future as seen through the eyes of the businesses in this country? Your full-time job is to take a look at what's out there in the way of potential employment, who's hiring, who's not, how many, do the statistics, all that.

Do you get any sense that is economy in recovery mode to any degree that matters yet? Are the companies and corporations you look at planning on ramping up, doing any capital investment? What's your sense of where we are?

MACKES: Well, you know, we've been doing the surveys, these job outlook surveys, for many, many years. We've been around as organization for 50 years, and during that time we have been during these surveys, and one of the things we watch is what are the hiring projections and then what seems to happen at the end of the year in terms of hiring, and typically, the entry level job market lags a bit behind what is happening in the economy.

So, I think one good sign for us is, in fact, while our prediction was going to be lower for hiring this spring, and it has actually settled out to be level with last year, it's an indication to us that maybe we are moving a little bit better.

SERWER: Marilyn, let me jump in and ask you a question. Just some quick dos and don'ts. I had a kid come into my office the other day who was wearing a ton of cologne. I had to fumigate the office afterwards. He was looking for a job. I mean, what are some things you should do and you shouldn't do?

MACKES: Well, that's definitely a don't. Obviously, want to look at as professional as possible. So, all that appearance stuff does make a difference.

I think, you know, quite honestly, most college students should be going to their career center and getting real good advice from the professionals that is are there. That's their role and responsibility. There's all kinds of workshops and how-tos on preparing for interviews. You know, understanding what the questions are going to be.

But even before that, before you go for the job, you have to kind of know what it is you're looking for, do your homework about the employer.

CAFFERTY: Marilyn, I hope our viewers picked up a piece of helpful information or two from the previous few minutes. I thank you for joining us here on IN THE MONEY. It's nice to see you.

MACKES: You're welcome. Glad to be here.

CAFFERTY: Marilyn Mackes is the executive director of the National Association of Colleges and Employees.

Coming up on IN THE MONEY as we continue, truth or consequences, the Jason Blair scandal rocking the Gray Lady, the grand "New York Times" and, for that matter, the whole world of journalism. We'll look at whether you're paying for news or getting fiction instead.

Plus Ted Turner drops his famous reserve and for once, speaks his mind freely in a "Fortune" magazine interview. Find out what he says about AOL Time Warner and the future of buffalo meat and his shrinking fortune and some other stuff.

Back after this.

(COMMERCIAL BREAK)

CAFFERTY: Some welcome news here. The spread of SARS seems to be slowing down even in China, but fearing the worst, the Chinese supreme court issued a ruling this week that calls for severe penalties, including execution, for anyone who refuses to follow the nation's new quarantine laws or intentionally spreads the SARS virus.

There are more than 5,000 cases of SARS China. The reported death toll is 267. The Chinese government, of course, badly mishandling this story in the very early stages by trying to cover it up, pretend it didn't exist. Yada yada yada.

Now they're trying to get ahead of the story. If you have SARS and you violate the quarantine, they may execute you, if the disease doesn't kill you.

The other thing I read this morning in the paper is they are doubling fines for expectorating. Isn't that the polite word for "spitting"?

SERWER: Yes.

CAFFERTY: They are doubling the fines for people who do that because they're afraid of these bacteria or virus or whatever they are coming out.

LISOVICZ: Some people really enjoy that custom, it should be said.

CAFFERTY: Yes, well. Enough on that. Thank you, Susan.

That brings us to our stock of the week. Mercifully time for that. The drug company, Merck, one of the leaders in the desperate race to find a SARS vaccine, and that makes Merck our stock of the week, and let's hope they find one. I mean, this is serious stuff.

Is this a -- all the pharmaceutical companies, given the research they do and the kinds of miracle drugs that, potentially, they are able to develop, are good, long-term investments, presumably, but would you buy Merck shares based on the SARS research, I guess is the question?

SERWER: Well, that's a little bit of a stretch. I mean, Merck is a giant in the business of developing vaccines. They are one of the top. We used to call it, "Sir Merck". Remember that back in the days when the drug companies -- and then what happens with these drug companies is they go in these long cycles where they're in and out of favor on Wall Street mostly because of Washington because people there want to clamp down on drug pricing.

They've been weak lately because they've been going after the prescription drug prices. There has been a lot of hot talk about ratcheting them back down, but they'll come back. Why? Because diseases like this continue to crop up.

LISOVICZ: Yes, the thing is that, you know, vaccines take a long time. Merck has been working, for instance, for more than a decade to develop a vaccine for HIV. Still hasn't happened. So, very intensive in terms of manpower, in terms of money, and you really don't know what the end result will be. One of its competitors, for instance, could develop the vaccine first.

CAFFERTY: I remember a couple of weeks ago, there was a fear in the newspapers that this SARS virus was able to mutate rather quickly. Now they have kind of pulled back from that position saying that perhaps it's not as able to adapt to new environments as they first thought which, obviously, would make the development of a vaccine a little easier in the long run.

SERWER: Right, I mean, the science is so difficult, Jack. You have that problem, and they you've got the whole thing that it seems to be attacking older people more effectively, if you can use that term, versus younger people. And there are so many things, and then you have a whole situation where you have do your research in China primarily. We all know what a nightmare that is.

LISOVICZ: The government hasn't been exactly forthcoming.

SERWER: And they you've got all that spitting over there.

CAFFERTY: Yes, well, yes.

Still ahead on IN THE MONEY as we continue, the rich are getting poorer, at least some of them are. Ted turner took a big bath on his AOL Time Warner stock investment, and he unloaded more than half his shares after the stock had dropped from somewhere in the mid 50s down to around 13, $14 a pop. We'll talk to a reporter who find out how he feels about it. She had a long visit with Mr. Turner.

And you type it, we'll tell it. Well, maybe not. It depends on what you say, but you can tell us what's your mind, and we might put the letter on the TV. The address is inthemoney@cnn.com.

(COMMERCIAL BREAK)

(NEWSBREAK)

SERWER: Last weekend on this program, we tried to figure out why CNN founder, Ted Turner, was dumping more than half of his AOL Time Warner shares and what his next move might be. We ended that discussion with a lot of unanswered questions. So, we decided to talk to someone with even more insight. That turns out to be our friend and "Fortune" magazine editor-at-large, Patty Sellers. She just finished a long interview with Mr. Turner and the report is the cover story in the latest issue of "Fortune" magazine. Welcome, Patty, how are you?

PATRICIA SELLERS, FORTUNE MAGAZINE: Thanks, Andy, good.

SERWER: This is a fabulous article, I encourage everyone to go out and read it. And you know, the guy really is a quote machine. I mean he's a journalist's dream. You just turn him on and let him go. I wanted to ask you about your favorite little anecdote in the story is.

SELLERS: Oh, boy. There were so many. And you know, one thing he talked about was not understanding AOL at the time of the merger. He signed on to the deal. Jane Fonda said to me, "this is one of the few times he went against his gut," and he said to me, I really didn't understand AOL. I don't understand the technology. I don't use e- mail. I've never surfed the Web, and he said, "my e-mail go to my female."

SERWER: So if only he'd listen to the women in his life, maybe the whole thing wouldn't have happened or he wouldn't have gone along with it.

SELLERS: It's true.

LISOVICZ: And there are so many women in Ted Turner's life.

SELLERS: There are so many women in his life. He just broke up with his girlfriend, the woman he was with ever since he divorced Jane.

LISOVICZ: Is this the French woman?

SELLERS: Yes, and he's a dating up a storm right now. I interviewed him at his plantation in Florida. He came down the steps, first thing he said to me, as he was walking down the steps is, hey, what do you think of this place? It's just like "Gone with the Wind," isn't it? We used "Gone with the Wind" as the cover line. And he said to me, standing on the landing right there, he goes, you know, right now, I feel like this little baby left at a doorstep. I need a good woman to take care of me.

SERWER: But he's friendly with Jane Fonda, right?

SELLERS: Yes, he is.

SERWER: They are still very close.

SELLERS: She is one of the most important women in his life. They rely on each other for advice. I asked Ted, do you still love Jane and he said yes, and I will always love Jane, and Jane said the same thing about Ted.

SERWER: Why don't they get back together?

CAFFERTY: Let me ask you about the thing you started to say a minute ago.

LISOVICZ: Andy is on the romance. That is all he wants to know.

(CROSSTALK)

CAFFERTY: You mentioned the fact that he went against his gut on the AOL Time Warner merger. I'm thinking of Warren Buffett. Remember how ridiculed he was when he refusing to get involved in the technology stock boom? He wouldn't buy the Nasdaq stocks; he said he doesn't understand that stuff. I don't invest in stuff I don't understand. He turned out to be a hero, because he stayed away from it. Does Mr. Turner feel any sense of embarrassments, do you think, about the decision that he made in the long run wound up costing him so very much?

SELLERS: Well, he said to me, "I'm the stupidest person in the world" for not selling my stock earlier.

SERWER: Right.

SELLERS: He alternately blames people he calls his advisers. And this actually is not in the story, but I'll tell you, he thinks of his advisers as being Mike Milken, John Malone, Gordy Crawford and a guy who was his financial adviser at Merrill Lynch for many years, who now works for him, named Taylor Glover (ph). He relied on them, went against his gut, alternately sort of blames them and blames himself. I had a scene in the story where he's actually shedding a few tears at a meeting of his Turner Foundation, his philanthropic organization with his kids, where he just breaks down and says, I can't believe all I wanted to do with my money for philanthropy, and I can't. It's all my fault.

LISOVICZ: You know, Patty, we all knew because Ted has been very vocal about how frustrated he is with the merger, how angry he is with the merger, but I think your article really brings out Ted's dark side. And we're not kidding. He really has a dark view of the world right now.

SELLERS: He does. He does. He said to me, I think there's a 50/50 chance that humanity will not exist in 50 years. He is scared to death of weapons of mass destruction. Two years ago, when AOL Time Warner stock was around 50, he set aside $250 million of his stock to fund something that he started, called the Nuclear Threat Initiative, to reduce the risk of weapons of mass destruction. Well, that $250 million in stock has swiveled to about $70 million worth of stock, and he feels that having lost $8 billion on the stock, he feels like he can't do all he wanted to do to save the world.

CAFFERTY: And his darkest moment, he even contemplated doing himself in, suicide, right?

SELLERS: He contemplated suicide a number of times over the years, and back last summer when AOL Timer Warner's stock got below 10, his youngest son Bo (ph) confronted him and said, dad, I hope you're not thinking of doing what your father did. Kill yourself.

CAFFERTY: His father killed himself.

SELLERS: His father killed himself.

SERWER: It tends to run in family.

LISOVICZ: The depression, right? Because he lost his fortune?

SELLERS: Well, no. This was 1963, when Ted was 24, his father killed himself. The business wasn't going very well. Ted's younger sister, his only other sibling, had died of a rare form of lupus. It was traumatic for the family. Two years later, Ted's father killed himself.

CAFFERTY: When you have $8 billion, you can be eccentric and you're thought to be amusing and charming, intelligent and witty and just a little strange, a little off. When you don't have $8 billion, it becomes a little tougher. He's on the outside looking in for the first time probably in 30, 40 years.

SELLERS: He is.

CAFFERTY: What is going to happen to this man?

SELLERS: He, on Friday, at the AOL Time Warner annual meeting, he resigned as vice chairman. He decided to stay on the board of AOL Time Warner, but he's severed himself from the media world for the first time in his career. He did decide to stay on the AOL Time Warner board, and he said to me, it was a big debate internally for him. He decided to stay on and he said, "since I am staying on, I'm going to be more vocal than I've been in the past." Yikes!

CAFFERTY: How is that possible?

SELLERS: He said I'm going to be a voice of dissent.

CAFFERTY: One of the biggest nightmares for him, though, would be if AOL Time Warner stock goes back up, and in fact late last week, Reuben Mark, the CEO of Colgate, who is the director of AOL, went out and bought half a million shares in the open market, making the stocks tick back up.

SELLERS: Well, you know, Ted's son Bo (ph) said to me the day after Ted sold, he said, he said, good night. What is my father thinking? When this stock is up to 18 a year from now, he is going to feel like crap.

LISOVICZ: You know, let me just touch upon the "Gone with the Wind" theme, because it's important to Ted, and of course he mentioned it to you right away. The heroine in that story, "Gone with the Wind," Scarlet O'Hara, always says, "tomorrow is another day," and she is always able to overcome adversity. I mean, is this just another point in his life where he's just going to rally and move on?

He still is a billionaire. He is still America's largest private landowner. He has got a lot of resources to work with.

SELLERS: He has a lot of reasons to live. And by the way, Jane Fonda says that Ted identifies with Scarlet more than anybody, more than with Rett. Ted, I mean, I don't want to get into this in much detail here, but Ted doesn't believe that a God exists to protect the world. He feels that someone has to do that, and with $8 billion, with $8 billion or with $1 billion, he feels like he has to keep on going to protect the world.

CAFFERTY: Fascinating, complex, interesting, and a figure that I hope hangs around, just because he's a newsperson's dream. He really is.

LISOVICZ: He is, and he's a great man.

CAFFERTY: Patty, thanks for being with us. I appreciate it.

SELLERS: You're welcome.

CAFFERTY: Patricia Sellers, editor at large of "Fortune" magazine. Cover story "Gone with the Wind." About our founder and benefactor. Former founder and benefactor. Founder and former benefactor, I mean.

Still ahead on IN THE MONEY, as we continue, the old gray lady has got a bit of a blush going. A major scandal at the "New York Times" puts the spotlight on the news business. We'll take a look at some of the fallout when we continue.

And your chance to grab a bit of an audience of your own. Send an e-mail if you're so inclined, inthemoney@cnn.com. Maybe we will read it on the air, maybe not.

(COMMERCIAL BREAK)

CAFFERTY: The fallout from the plagiarism scandal at the "New York Times" is being felt all across news media, and it may take years before we know how far former reporter Jayson Blair's deception went. Was this a case of poor management, laziness, affirmative action gone bad, or a little bit of all of the above? Joining us now to talk about that is Alex Jones, he is the director of the Shorenstein Center on the press, politics and public policy at Harvard. Alex is a former Pulitzer prize winning reporter for "The Times." He is also the co- author of a book about the families who have controlled that newspaper for more than a century.

Alex, nice to have you with us. Thank you.

ALEX JONES, DIRECTOR, SHORENSTEIN CENTER: Hey, Jack.

CAFFERTY: Let me start with the effect this story may have on the culture of that great newspaper. It is arguably one of the greatest papers in the world. It also takes itself very, very seriously, most of the time. And there are people on the outside who are probably taking a certain amount of pleasure in the fact that this rather embarrassing development has struck the high and mighty, but it's got to have the lasting impact inside the culture of the paper. You worked there. Tell me how do you see this thing impacting the place for a good long while to come? If it is going to be that way?

JONES: It's like when something bad happens to the New York Yankees. It makes an awful lot of people happy, I think.

CAFFERTY: Yes, right.

JONES: I think that what's happened to the "New York Times" is a serious thing. There is no question about it. There's never been a thing of its kind before. "The Times" has made grievous errors in the past. The coverage of the Holocaust immediately comes to mind. But those were honest mistakes, if you will. This was a dishonest, a chronic, epic dishonest mistake.

And I think that the fact is that it's too easy to cheat, and it is something that is true at the "New York Times," and it's true all across American journalism. And I think that the lasting issue is going to be fundamentally how we (UNINTELLIGIBLE) inaccuracy out of the newspaper.

But I think this has had a sort of bit of collateral damage that's really unfair, and that is this affirmative action wrap. You know, I worked at the "New York Times" and I know that you worked in newsrooms and are experienced in the same way. People outside perhaps don't understand it as well.

But what happens is that there are favorites, people who do get identified as having talent, or friendships, or relationships with special people who have power. I mean, Maureen Dowd immediately comes to mind. She was singled out for a special treatment.

Jason got special treatment, but he got special treatment, as I understand it because he was talented, because he was energetic and also because he had some personal problems -- people liked him, they felt sorry for him.

He was black, yes. He was part of affirmative action, if you want to look at it that way, program. But at the same time, he was getting special attention. Four other black reporters who are not perceived to have his potential were washed out. So, I mean, the point is being black at the "New York Times" or at any news organization, that's not a pass. That is just one element, and in a situation of this kind, obviously grievous errors were made in management, but it was not the idea of tainting every black reporter with what happened to Jayson Blair is grossly unfair.

LISOVICZ: Alex, let's go past Jayson Blair for a minute and go back to something you said a few minutes ago, which was that it's too easy to cheat, that this is not just a "New York Times" problem. This is a problem that theoretically could face -- every news organization could face. Why is that? Why is it so easy to cheat?

JONES: Well, I think it's easy to cheat for several reasons. One is that you have got in a situation like Jayson Blair, you've got the ability through cell phones and e-mail not to be able to be tracked. I mean, there is no way really to tell where you are geographically when you're communicating by cell phone and e-mail, and that's what he did.

LISOVICZ: Whatever happened to copy editors? Whatever happened to copy editors? Don't they exist anymore?

JONES: Yes, but what are you going to do, have a sat phone to see where somebody is located? I mean if I call you from, you know, Timbuktu on a cell phone, you don't know where I am. I could tell you I'm somewhere but there is no way for you to know. That's my point.

The thing, also, is that using unnamed sources has made it easier to pipe quotes. I mean, it's something that you can do if you are quoting someone and not identifying them, it becomes a lot easier because nobody is going to complain about it.

The other thing that I think is really damaging in this situation for all of the media is the fact that people could read a fabricated story about themselves in "The New York Times" and simply sort of shrug off and say, well, that's the way it goes. I think that the idea if they felt that, I'm not talking about a mistake here. I'm talking about a fabricated story about them with fabricated quotes, and they basically just blew it off as sort of the way the media operates.

That I think, is a very bad problem that the media has to do something to try to change. I think you can do things to change it. I really do, but you have to try hard.

CAFFERTY: Alex, let me jump in here a second. One thing I want to take issue with, you sort of made some kind of comparison with this guy and Maureen Dowd. Maureen Dowd is one of the most talented columnists out there, at least according in my book. That is just my take on things. But why was Jayson Blair given so many breaks, then, if there wasn't some sort of agenda? I mean, I've been in newsrooms for years and years and years, and there are favorites, yes. Sometimes people are talented. But if you make a lot of mistakes repeatedly, you're not going to get ahead. In fact you're going to be pushed back. Why was he given the breaks?

JONES: Well, I mean, why did those four black guys get fired? Let me ask you that.

CAFFERTY: No. I want to ask you why he got the breaks.

JONES: Is that racial discrimination?

CAFFERTY: I don't know.

JONES: Was it race discrimination to fire them? All I'm saying is it's not about race. I mean...

CAFFERTY: OK. It's not about race.

(CROSSTALK)

JONES: Did that have a factor? Sure, it did. But it was not the main factor. The point is that when you place that at the center of this, you're doing a grave injustice, in my opinion.

CAFFERTY: A couple of things that jump off the newspaper pages this morning. Big questions about the management in the newsroom that on whose watch all of this stuff took place, and the other one is just this great American story. If you do something outrageous or egregious enough, you can become rich and famous. There's a story out that this kid got an agent, there may be a book in the works, there might be a TV movie in the works. I mean, this is very strange turn of events here.

JONES: Well, that's, again, I mean, we in this culture seem to reward that. Stephen Glass, who is the, you know, the white guy who has done the same sort of thing is being rewarded. I don't have any doubt that Jayson Blair is going to probably not only be rewarded but probably will trash "The Times" in the process. This guy is -- that's the way we're set up as a culture and there is something wrong with that, but I think that is a book that I don't intend to buy.

CAFFERTY: Well, will heads roll over this or will "The Times" close ranks around its own and try to protect its own people, do you think?

JONES: One of the things that's happened, Jack, is that "The Times," you know, Howell Raines has rubbed people the wrong way inside "The Times," and what seems to be happening, and I think it is very destructive and too bad, is "The Times" seemed to take this opportunity not to come together and try to find a solution as a family, but to really start tearing itself apart.

I hope that doesn't happen. I feel like "The Times" is a great institution, a very important institution in this country, and I think that, you know, it's going to be a question of whether they can sort of put it back together and demonstrate to their readers -- and I consider myself to be now a reader of the "New York Times" -- they have to demonstrate to me that they are going to take steps that Jason Blair won't happen again, or very unlikely to happen. I don't want another Jayson Blair. I feel betrayed not by Jayson Blair in this, but by the institution. "The Times" was the one that lied, not Jayson Blair alone.

CAFFERTY: There you go. Alex, I appreciate your time and perspective about all of this. Thanks for joining us today.

JONES: Sure thing.

CAFFERTY: All right, Alex Jones, director of Shorenstein Center on press politics and public policy, author of a best selling book on the family that has owned the "New York Times" company for more than 100 years, the Sulzberger family. I appreciate his thoughts on what is arguably one of the great stories in journalism in the last 50 years.

More to come on IN THE MONEY. Coming up next, Richard Branson shows his appreciation for his hard working employees. We'll tell you what he got them as a reward.

And you can send us an e-mail to tell us what's bugging you. The address is inthemoney@cnn.com. Back after this.

(COMMERCIAL BREAK) CAFFERTY: Coming up on IN THE MONEY, if your boss treats you like something on the bottom of his shoe, it may be time to work for a man that knows how to treat his employees right. We'll have that story next.

And take a shot at us, if you like. Get in touch via e-mail, inthemoney@cnn.com. Write to Jake, our producer, he is a lonely man.

(COMMERCIAL BREAK)

CAFFERTY: If you think a 401(k) is a nice benefit, then you don't work for Richard Branson, the maverick chief of Virgin Group. He has bought a $3.2 billion Australian Island solely for his employees to use and enjoy. It's called Make Peace Island in the Newson (ph) River on Queensland's Sunshine Coast. If that means anything to you, then you're way ahead of me. Branson says it's his way of saying thank you to his 25,000 employees, but at 25 acres, the island won't big enough for everybody to enjoy all at once. I guess they'll have to get a sign-up sheet, but nevertheless a very nice gesture.

My question to you, Andy and Susan, what do we have here at AOL Time Warner...

(CROSSTALK)

CAFFERTY: ... that's of a comparable nature that we can go and enjoy?

SERWER: We have got to get these guys to buy us an island. Right? We have to buy -- it's not that much money, $10 million. You compare it to all the money they have given to these bozo executives they have bought off.

CAFFERTY: Which executives are those?

SERWER: We will be naming names later in the program. Tens of millions go to these people and you can get a nice Caribbean Island for $10 million, where we can all go and have fun.

LISOVICZ: Sir Richard, as he has been knighted for his many talents, happens to work in two of the industries where we have seen the most layoffs -- airlines and music. And he still is making money hand over fist, buys an island. And it's going to be -- there is the Virgin Islands in the Caribbean, and then there is the Virgin Island down under. It's a nice gesture.

CAFFERTY: Visionary, entrepreneur and a bit of a whack job.

SERWER: He is a whack job. I like whack jobs who buy me islands like that.

CAFFERTY: Are all his employees in Australia?

SERWER: I don't think he has got any. That's the thing.

(CROSSTALK)

SERWER: OK, do you have to pay your freight to get there, that's the question, right?

CAFFERTY: I don't know. But a memo to management...

SERWER: Buy an island. Now.

CAFFERTY: The Branson (UNINTELLIGIBLE) have an island to go to. Are you listening in Atlanta?

SERWER: Buy us an island.

CAFFERTY: Get us something, we want things.

SERWER: Caribbean is closer, by the way.

LISOVICZ: Bus tickets to Atlantic City.

CAFFERTY: And we get discount at Great Adventure or something.

SERWER: We'll get Staten Island.

CAFFERTY: Staten Island?

All right, now it's time to see what's on your mind. Enough of what's on ours. A lot of you speaking out about the story we did on the proposed three strikes and you're out law for corporations in California.

Jeff in Massachusetts writes: "That law for corporations in California is the dumbest feel-good piece of legislation I've ever heard of. All it takes is -- or all it does, rather, is A, weaken the economy by putting people out of work; and B, it will hurt the consumers who need the products that businesses sell. And C, keep the business from paying anymore fines to the state. It's a moronic idea."

James writes, "Why corporations? Corporations don't commit felonies, people commit felonies. Convict the real perpetrators. Fine them and send them to jail."

And Andy and I were taken to task by an angry florist after Andy said buying flowers to be delivered on Mother's Day is a ripoff. Lee from Seattle writes: "You obviously had a bad floral incident in your past. If this is the case, find another florist. Floral arrangements can last anywhere from five to 10 days. We are an industry that provides food for the soul."

LISOVICZ: And I have to second that, because you know, I know that you gentlemen occasionally send flowers. Well, I occasionally receive flowers. And there are a few little tips -- you have to cut the stems, you have to change the water, you put in aspirins or the preservatives, and yes, they can last more than two days.

CAFFERTY: Or you can get artificial flowers and you don't have to do any of that stuff and they last forever.

(CROSSTALK)

SERWER: Listen, I'm just scared to death because you've got an angry florist. Angry florist.

CAFFERTY: Anyway, if you want to get in on all this fun, the e- mail address is inthemoney@cnn.com. And with that, we're out of here. That's curtains for this round of IN THE MONEY. Thanks as always to my buddies, CNN financial reporter Susan Lisovicz and my friend Andy Serwer from "Fortune" magazine. I'm Jack Cafferty. Thank you. See you next week.

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



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