Return to Transcripts main page

American Morning

Interview With James Surowiecki, James Stewart

Aired January 01, 2004 - 07:23   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.


SOLEDAD O'BRIEN, CNN ANCHOR: For a look back at the big stories of 2003, we are offering the last word in business to James Surowiecki, he is from the "New Yorker"; James Stewart of the magazine "SmartMoney;" and our own Andy Serwer joining us this morning.
James, let's begin with you.

Sum up in a word for me the year. Is it scandal? Recovery?

JAMES STEWART, EDITOR-AT-LARGE, "SMARTMONEY," AUTHOR, "DEN OF THIEVES": First, it is recovery. The stock market has had a great year. It's been historically one of the most stimulative periods we've ever gone through. And, secondly, what a year in scandal. I mean everything from the Tyco case to the mutual funds scandal, these scandals that began with Enron in 2001 have just keep -- kept rolling along.

O'BRIEN: The holiday season upon us now, is it critical what happens now or is it sort of water under the bridge?

STEWART: No, it's very important. The consumer has propped up the American economy for about the last three years, spending away, taking those rebate checks, going to the malls, buying electronics and they've got to keep doing it.

O'BRIEN: A bit of a scandal was Dick Grasso and how angry people became at this compensation.

JAMES SUROWIECKI, BUSINESS COLUMNIST, "THE NEW YORKER": Right. Dick Grasso, who was the head of the New York Stock Exchange, and it was revealed that he was getting a, essentially a kind of retirement package, even though he wasn't retiring. But he was going to take the money. It was $140 million.

O'BRIEN: First.

SUROWIECKI: We later find out there was another $50 million. And, yes, people essentially just rose up in revolt against how much he was getting paid. There was no evidence at the time that he had really done anything wrong in the sense of corruption or anything like that. He really was, I think, the first CEO in American history to be fired for getting paid too much. And that, I think, is a really fascinating story.

O'BRIEN: Give me a closer look at scandal over the past year and where do you think that leaves us as we head into the new year? ANDY SERWER, "FORTUNE" MAGAZINE: Well, you know, what's interesting to me is that it's sort of a rolling wave of scandals. And we've gone from analysts to CEOs and now the mutual fund industry. So, all walks of the financial services life, if you will. And it's really undermined investors' confidence in the markets, I think. I mean who can forget the Kozlowski trial and the $6,000 shower curtain and all that?

O'BRIEN: You can be rich and have no taste whatsoever I think was the takeaway from that one.

SERWER: Yes. That really was. But this is all cyclical. The stuff comes in bull markets when the economy is robust, when people think they can get away with it, and, also, when the rest of us don't care. If someone's stealing $600,000, if you're making 40 grand yourself, you don't care as much.

STEWART: Once they see a few people in handcuffs going to jail, they start to regain confidence. And, in fact, it does clean out the market, and I think it's a really healthy thing.

O'BRIEN: If we were doing a magazine that was AMERICAN MORNING'S businessperson of the year, for good or for bad, famous or infamous, who's on the cover?

STEWART: Well, I know he's on there every year, but it would have be Alan Greenspan. I mean he never quite said the word deflation this year. But when he said unacceptably low inflation, I mean, the markets went crazy. And that has been a huge stimulus factor this year.

SERWER: All right, I have to say Eliot Spitzer. While the SEC was asleep at the switch, he took the reigns, to string together some cliches, and really decided to take on a lot of the skullduggery that he saw. You know, people say he has political ambitions...

O'BRIEN: I was going to say, one day that'll be Senator Spitzer to you.

SERWER: That may well be, but still, at least he's actually doing something here.

SUROWIECKI: I would actually do one of those sort of conceptual covers and maybe put the American worker. Because to me the big story of the year was actually the productivity boom. And I think that's THE most important economic trend of the last seven or eight years.

STEWART: You might as well, then, add the consumer...

(CROSSTALK)

O'BRIEN: How many magazine covers do you guys want?

STEWART: Spending, spending has been so important.

O'BRIEN: The consumer gets the final word this morning. Nice to see you guys.

Thanks so much for helping us with the final word on business for 2003.

SUROWIECKI: Thanks for having us.

STEWART: Thank you.

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







Aired January 1, 2004 - 07:23   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SOLEDAD O'BRIEN, CNN ANCHOR: For a look back at the big stories of 2003, we are offering the last word in business to James Surowiecki, he is from the "New Yorker"; James Stewart of the magazine "SmartMoney;" and our own Andy Serwer joining us this morning.
James, let's begin with you.

Sum up in a word for me the year. Is it scandal? Recovery?

JAMES STEWART, EDITOR-AT-LARGE, "SMARTMONEY," AUTHOR, "DEN OF THIEVES": First, it is recovery. The stock market has had a great year. It's been historically one of the most stimulative periods we've ever gone through. And, secondly, what a year in scandal. I mean everything from the Tyco case to the mutual funds scandal, these scandals that began with Enron in 2001 have just keep -- kept rolling along.

O'BRIEN: The holiday season upon us now, is it critical what happens now or is it sort of water under the bridge?

STEWART: No, it's very important. The consumer has propped up the American economy for about the last three years, spending away, taking those rebate checks, going to the malls, buying electronics and they've got to keep doing it.

O'BRIEN: A bit of a scandal was Dick Grasso and how angry people became at this compensation.

JAMES SUROWIECKI, BUSINESS COLUMNIST, "THE NEW YORKER": Right. Dick Grasso, who was the head of the New York Stock Exchange, and it was revealed that he was getting a, essentially a kind of retirement package, even though he wasn't retiring. But he was going to take the money. It was $140 million.

O'BRIEN: First.

SUROWIECKI: We later find out there was another $50 million. And, yes, people essentially just rose up in revolt against how much he was getting paid. There was no evidence at the time that he had really done anything wrong in the sense of corruption or anything like that. He really was, I think, the first CEO in American history to be fired for getting paid too much. And that, I think, is a really fascinating story.

O'BRIEN: Give me a closer look at scandal over the past year and where do you think that leaves us as we head into the new year? ANDY SERWER, "FORTUNE" MAGAZINE: Well, you know, what's interesting to me is that it's sort of a rolling wave of scandals. And we've gone from analysts to CEOs and now the mutual fund industry. So, all walks of the financial services life, if you will. And it's really undermined investors' confidence in the markets, I think. I mean who can forget the Kozlowski trial and the $6,000 shower curtain and all that?

O'BRIEN: You can be rich and have no taste whatsoever I think was the takeaway from that one.

SERWER: Yes. That really was. But this is all cyclical. The stuff comes in bull markets when the economy is robust, when people think they can get away with it, and, also, when the rest of us don't care. If someone's stealing $600,000, if you're making 40 grand yourself, you don't care as much.

STEWART: Once they see a few people in handcuffs going to jail, they start to regain confidence. And, in fact, it does clean out the market, and I think it's a really healthy thing.

O'BRIEN: If we were doing a magazine that was AMERICAN MORNING'S businessperson of the year, for good or for bad, famous or infamous, who's on the cover?

STEWART: Well, I know he's on there every year, but it would have be Alan Greenspan. I mean he never quite said the word deflation this year. But when he said unacceptably low inflation, I mean, the markets went crazy. And that has been a huge stimulus factor this year.

SERWER: All right, I have to say Eliot Spitzer. While the SEC was asleep at the switch, he took the reigns, to string together some cliches, and really decided to take on a lot of the skullduggery that he saw. You know, people say he has political ambitions...

O'BRIEN: I was going to say, one day that'll be Senator Spitzer to you.

SERWER: That may well be, but still, at least he's actually doing something here.

SUROWIECKI: I would actually do one of those sort of conceptual covers and maybe put the American worker. Because to me the big story of the year was actually the productivity boom. And I think that's THE most important economic trend of the last seven or eight years.

STEWART: You might as well, then, add the consumer...

(CROSSTALK)

O'BRIEN: How many magazine covers do you guys want?

STEWART: Spending, spending has been so important.

O'BRIEN: The consumer gets the final word this morning. Nice to see you guys.

Thanks so much for helping us with the final word on business for 2003.

SUROWIECKI: Thanks for having us.

STEWART: Thank you.

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