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CNN IN THE MONEY

Is U.S. Military Suited To Urban Warfare? Abu Graib Prison Scandal Raises Questions Of Prisons In U.S.

Aired May 16, 2004 - 15:00   ET

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


(BEGIN VIDEOTAPE)
ANNOUNCER: From New York City America's financial capitol, this is IN THE MONEY.

(END VIDEOTAPE)

JACK CAFFERTY, HOST: Hello. Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY:

The hand that holds the keys: those pictures from Iraq are raising questions about prison life there and here. We'll talk with a former U.S. prison guard.

Plus, a street fight to the death: urban combat, one of the toughest forms of warfare and more and more it's what the U.S. is facing in Iraq. Find out if the Pentagon is ready.

And sink, swim, or couch surf: College graduates have to make a life, make a living, and make it snappy with sheepskin season in full swing, we'll have some tips on where to go next and how to get there.

Joining me today, my regular co-hosts, here CNN correspondent Susan Lisovicz and "Fortune" magazine editor-at-large Andy Serwer.

Six months almost to the day from the presidential election. Historically, elections are decided, based on, my wallet, my prospects for a job, can I put my kid through college? Can I look forward to a decent retirement, can I own a home, yadda, yadda, yadda. We've got some good news and bad news on the economic landscape. We've go two very big robust jobs reports the last couple of months. A million jobs created in the last four or five months or so, probably more to come. But all of a sudden inflation is on the radar scope, higher interest rates are coming which means the housing industry eventually and some other things could be impacted. How does the economy look guys with six months before we go to the voting booths?

ANDY SERWER, "FORTUNE" EDITOR-AT-LARGE: Well you know, I think everything's really gone true to form. I mean, you take a step back, there's all this news out there, but let's look at what happened. The stock market rallied, going back into the fall, anticipating a recovery. The job market rallied late, which happens in a recovery. Later than the economy picking up in terms of factory and that sort of thing. And now we're seeing inflation is starting to come into play. This is what always happens. It's not that confusing. The real wildcard is what's happening overseas with the war on terror. That's what throws everything into a jumble. That's what makes everything complicated.

SUSAN LISOVICZ, CNN CORRESPONDENT: Right, that's the wildcard, Andy, but also you have oil prices at not 13-year highs, now they're at 21-year highs...

SERWER: Oh, that.

LISOVICZ: ...and what happens? You have less disposable income if you drive one of those big gas-guzzling SUVs and if you are a manufacturer, if you're a company that uses electricity or heating or air conditioning, that could cuts to your profits and you've seen the stock market sell off in response.

SERWER: But, you know what, if adjust the price of oil for inflation; I know people don't like to do this, but it's really true.

CAFFERTY: No, that a legitimate thing to do.

SERWER: But the peak price of oil was back in 1980, it was about $78 in terms of today's dollar. So we've dealt with prices...

LISOVICZ: Still got a ways to go.

SERWER: We've dealt with high oil prices relative to the price of other things in the economy before. Not that the economy was any great shakes then, by the way.

CAFFERTY: Well, but when I go to the gas pump this afternoon, Andy, to fill up my car,

SERWER: That'll make you feel better?

CAFFERTY: I'm going to remember what you told me about inflation adjusted, whatever, and I won't feel any better at all.

SERWER: No. I can understand that.

CAFFERTY: All right. For most of us civilians, guarding prisoners sounds like a matter of staying awake, keeping an eye on where the keys are. But those pictures out of Iraq of alleged prisoner abuse, are a reminder that not all guards or prisons, for that matter, are alike. And if you don't know about prison life, it's tough to imagine what it's like to keep other people locked up, either in Iraq or for that matter, here in the United States.

Ted Conover is going to help us make the leap and figure this thing out. He's the author of "Newjack: Guarding Sing Sing." It's about the ten months that he spent as a corrections officer at Sing Sing Prison in upstate New York.

It's nice to have you on the program, welcome.

TED CONOVER, AUTHOR "NEWJACK: GUARDING SING SING": Thank you, Jack.

CAFFERTY: Give me your take, based on your own personal experience of what's going on in Iraq.

CONOVER: There are a couple of sides to it. One is that, as you know, the world has a number of abusive people in it and those who run places like prison need to be extra careful to keep those people out. Where I worked at Sing Sing, the vast majority of the officers are honorable and decent people who are successful in keeping their tempers and their more -- you know, dangerous impulses under control. But, there were a handful who were not like that, and everybody knew about them, and I would bet most prisons have that same sort of situation.

One thing I've been able to pick up about Iraq is that one of those guys, at least, got a job guarding Iraqi prisoners of war, which is an especially sensitive assignment, and not only was he allowed to indulge all of his worst impulses, but he was part of a whole scene of people that started doing that that didn't seem to have any supervision at all.

LISOVICZ: Ted, what you saw at Sing Sing led you to believe there's really two sets of rules. That there's the textbook rules, which are the honorable way to do things and then there's the real rules. Is that something that can be applied also to what happened in Iraq? In other words, these people should have known. They may be in uniform, they may be used to taking orders, but they should have known.

CONOVER: They definitely should have known. It may not be as crystal clear, in Iraq, what the rules are. We've seen just last week a difference of opinion between one of Donald Rumsfeld top aides and General Taguba about exactly what was appropriate behavior. It seemed there was confusion at the highest levels. But yes, in reality, you've got a set of rules and then when you start work, you learn what happens if you lose your temper one day, if you -- if that prisoner ends up getting hurt. What kind of cover are you going to get at the higher levels. So everybody who works in a place like that has an, sort of, informal sense of what they're going to be able to get away with, based on the kind of supervision they're getting.

SERWER: Ted, one thing that surprised me, when I read your book, which I thought was excellent, I really enjoyed it.

CONOVER: Thank you very much.

SERWER: Ws that actually things may not be quite as bad as people are led to believe in prison in terms of violence. That you said there wasn't rampant rape and violence against prisoners going on. Is that, in fact, the case?

CONOVER: Every prison is different. There are prisons where rape occurs. It sounds like Abu Ghraib was one of them. And, you know, human rights groups come up with credible reports of this, but it's not like in the movies where this goes on every day. I mean, at Sing Sing, I was looking for this because I'm a reporter, above all, and a journalist, and I thought, this is what my friends are going to want to know about. It's seldom seemed to happen there. You know, in the movies, there's always a hidden stairwell or a broom closet where the white guy, I'm not sure why it's always the white guy, there aren't so many of them in an actual maximum security prison, but it's always the white guy who gets it. In reality, I don't think that's the case. Now, that's not to say prison isn't in its very nature a brutal place. Prisons are coercive, as a guard you have to be willing to use force against people who don't obey the rules and so, yes, it's a physical job, but, no, brutality is not the order of the day. And, no, in a well-run prison, these kinds of things never happen.

CAFFERTY: Did you ever do anything while you were a guard that you weren't proud of?

CONOVER: I did. You get caught up in things. There was a day when I was sent with a group of other officers down to the box, that's a room where inmates who have assaulted officers generally are kept, it's -- you know, isolation cells and we went cell to cell and had every inmate strip down and bend over to show there was nothing hidden around his private parts. This was done basically to intimidate the prisoners, one of whom had broken a bunch of windows the night before and when a couple of them refused, we sent groups of cell extraction teams into sort of squash them and bring them out and force them to comply to take off their clothes, which does sound quite a bit like Iraq, doesn't it? And there's an excitement and a tension in this whole thing because you know it's going to get rough and when your side prevails, even though it's a fate acompli (PH), it's exciting and you feel good about it for an hour and then you get home and you think, "What was I doing there? What happened?" and you see how the group -- the group dynamics can really change your behavior.

CAFFERTY: Interesting, we had another guest on the program talking about that very thing, the group mentality. Take a bunch of kids -- you know, on a street corner and they'll -- you know, steal a car or shoplift from a store. Individually they'd never think about doing that in a million years. You get them together and that herd mentality takes over and bad things seem to come of it.

I appreciate you sharing some of your reminiscences with us, on the program. Do you have any other undercover assignments coming up in the near the future?

CONOVER: This one took a big piece of my life. I think I'm still recovering from working a year at Sing Sing.

CAFFERTY: I understand. Ted Conover, thank you.

CONOVER: Thank you.

CAFFERTY: His book's called "Newjack: Guarding Sing Sing."

Coming up next on IN THE MONEY: The black blacktop battle field. Urban warfare, one of the toughest challenges a soldier can face. We'll look at how the U.S. is coping with it in Iraq and elsewhere.

Later, Citigroup pays billions to settle claims it kept investors in the dark. We'll see how Wall Street likes those numbers.

And reality check: We'll add tips on living in the real world for this spring's college graduates. One promise, we won't use the phrase "ramen noodles." I have bought so many ramen noodles.

Back after this.

(BEGIN VIDEOTAPE)

Leading U.S. homebuilder, the Ryland Group, breaks ground on the 2004 "Fortune" 500 list, climbing nearly 20 spots from last year to 481. With 2003 revenues of more than $3.4 billion, Ryand also ranked among "Fortune's" the top 20 companies for five year profit growth and total return to shareholders. Ryland operates in 27 of the nation's largest markets and builds about 15,000 homes each year, averaging about 225,000 in price.

Buyers can choose from one of Ryalnd's 2,400 floor plans and even pay and insure their home through the company's mortgage and finance services. The company made headlines in March it was announced that Ryland would be added to the S&P mid cap 400 index.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CAFFERTY: The names tell the story: Najaf, Fallujah, Baghdad and Karbala. The war in Iraq is being fought mainly in the cities, much like Saddam Hussein suggested it might be over a year ago. The cities are the kind of battlefield no army wants to go into. They're complex, they're crowded, they're cramped and they're crawling with civilians and innocent bystanders.

For a look at how the United States is coping with city warfare, we're joined now from Richmond, Virginia, by retired Marine Colonel Randy Gangle, who is the director of the Center for Emerging Threats and Opportunities, a government think-tank that focuses on national security issues.

Colonel, nice to have you with us, thanks for joining us.

COL. RANDY GANGLE (RET.), DIR., CTR. FOR EMERGING THREATS AND OPPORTUNITIES: Thank you very much for inviting me.

CAFFERTY: Is the United States up to the task of fighting in the cities and getting the insurgents house to house, building to building in what is arguably the nastiest bit of combat known to modern warfare?

GANGLE: The answer to that is unequivocally yes. We foresaw this about six years ago, particularly in the Marine Corps. We began focusing developmental tactics, a training effort then and we have trained our forces very, very well for the type of warfare they're engaged in.

LISOVICZ: But Colonel, can you expand upon that, because one of the problems with urban warfare is the enemy, many times, is invisible. He or she is not wearing uniforms and civilians get killed, unfortunately by the thousands, what we've seen in Iraq and that's where you lose the hearts and minds of the people there. So, it's not the toys that the U.S. brings in, it's the strategy. Can you address what is being done or what should be done at this point?

GANGLE: Well actually, a lot of work was done, and I can speak for the Marine forces in particular. Every Marine unit that went back into Iraq for this iteration went through a two-week intensive training package at a training site in California, where we focused on just the kinds of issues you're talking about. How do you distinguish the targets, how do you avoid the collateral damage or the killing of innocent civilians, etcetera. It is, as you said, very, very difficult because the enemy has gone to an asymmetric form and he is not putting on uniforms. It's difficult to distinguish whether it's a civilian or whether it's an armed insurgent, and, you know, when you are fighting wars, unfortunately, collateral damage or the killing of innocents is almost unavoidable. Weapon systems by their very nature can be -- they cover, for example, artillery and bombs and whatnot, they will cover distances up to 250 meters with shrapnel. So, you may be focused on one particular target but innocent people who are in the area are going to be hurt, unfortunately.

SERWER: Yeah, and following up on that, Colonel, I mean, can you ever really win in an urban warfare environment because of the collateral damage you know, it gets back to that horrible statement from Vietnam "to save this village, we have to destroy it." So often I think that the winning, you end up leveling the place, don't you?

GANGLE: You know, that's an interesting comment. In fact, there was a recent comment by one of the battalion commanders in Fallujah who said just exactly the opposite. He said, "we can't level Fallujah in order to save it."

SERWER: Right.

GANGLE: We've taken a much different approach and I think that the agreement you saw between the Marines and former Ba'athist general to have us withdraw and have them take over the city was probably one of the best things I've seen in a long time. For exactly the reason you just pointed out. If we go in there, and we will prevail if we go in, but we'll prevail at the expense of the hearts and minds of the citizens who live in that city.

CAFFERTY: So, you get down to making a difficult call -- judgment. We talked about the firepower that we're capable of bringing to bear on any target we decide to make a target. If in the case of urban fighting we choose not to do that, then our soldiers get killed and wounded going into the city on foot and going house to house and block to block. Those kids could stay alive if we opted to turn our head in terms of the collateral damage. How do you sort out that kind of dilemma about who lives and who dies?

GANGLE: Let's sort this out and put it into two different perspectives. First, there's all-out, what we call full-scale combat, which would be against the conventional foe where he's in uniform, he's in military formations. We're not seeing that now. We saw that in round one a year ago.

Round two, now we're in what we call stability and support operations where we're dealing with, as you pointed out earlier, just these people running around without uniforms on, etcetera. We have to take a different approach with that. And you've seen some of that approach in the extensive use of snipers, for example, in Fallujah. The most feared Marines on that battle space by the Iraqis were the snipers because they were the most effective in taking out the Fallujah insurgents. In fact, when they were negotiating for the withdrawal, that was one of their primary demands was get the snipers out. So, what we did on our side was we said, all right, we've got to be selective, so we're going to go to something where we have individuals trained to make a sure kill with 1,000 -- up to 1,000 meters, but get the target they're after, not innocent civilians. So, that's one way we went about it.

LISOVICZ: So, Colonel, just quickly, is part of that Marine training, that you talked about, with this urban combat, is it also simultaneously providing humanitarian assistance and peacekeeping? Because usually the areas that we've seen the fighting is very concentrated, like for instance in Fallujah or Mosul. Is that part of the equation, as well?

GANGLE: Absolutely. In fact, you know, the training that we did prior to going back in was focused on exactly what you just said. Unfortunately when we got there, we had the incident with the four Americans who were hung there in Fallujah and then we were ordered to go up and go in a full-scale mode, which was not what we really wanted to do. The intent all along, was to go in, as you said, dealing with the insurgents on block one, feeding people on block two, and providing peacekeeping on block three, what we refer to as the three- block war. The requirement to do all three, almost simultaneously, in near proximity to each other.

CAFFERTY: Big assignment. Our Marine Corps, however, history will suggest is up to the task.

GANGLE: Absolutely (UNINTELLIGIBLE).

CAFFERTY: Colonel, we got to leave it there. Thank you very much.

Colonel Randy Gangle , U.S.M.C. retired, director of the Center for Emerging threats and Opportunities.

We're going to take a break and try and pay a couple of bills for the home office. When we come back:

Advice with a price: Find out how much Citigroup is paying to settle claims that it didn't give investors the full story on WorldCom.

And later, screen tests: Meet a health worker who's trying to take the danger out of porn work by checking the actors for HIV.

Plus, happy landings: College kids are graduating this month. See how they can take the shock out of that plunge into the real world without moving back home with mom and dad.

(COMMERCIAL BREAK) LISOVICZ: Now let's look at the week's top stories in our "Money Minute." Higher prices for oil imports helped boost the U.S. trade deficit to a record $46 billion in March. But, the news does have a silver lining. Many economists say it proves our economy is shifting into high gear as U.S. businesses buy more foreign supplies and consumers spend more on products made overseas.

Delta is the latest major airline to warn it may have to file for bankruptcy. The company may be trying to put some pressure on its pilots who are currently negotiating a new contract. But, Delta shares are trading near 24-year lows.

And the Gap clothing store chain made the unusual move of documenting abuses at hundreds of its factories worldwide. The store released its first-ever social responsibility report to highlight its efforts to improve working conditions for employees overseas. The company says it has already purged 16 percent of the factories it inspected from its list of suitable contractors.

SERWER: Another big company ate some crow this week when Citigroup agreed to pay more than $2.5 billion to settle a class action suit brought by holders of WorldCom stock. Citi admitted no wrongdoing, of course, but that's how these things go. Those shareholders accused Citigroup of pushing WorldCom stock even when they knew it was worthless. Imagine that.

Remember the Jack Grubman scandal? Citigroup is also setting aside $5 billion to cover any future litigation costs.

Like the markets in general, Citi has cooled off considerably in the last few months, but the stock is still up 20 percent from where it was this time last year. That makes Citigroup our stock of the week.

I'll tell you something about this company is big. Everything about it is big -- $49 million a day in profits last year, $80 billion in revenues, over a trillion dollars in assets, but one other big thing, they've got about $10 billion that they've either paid or set aside as reserves for all this Wall Street mess.

LISOVICZ: But, no admission of wrongdoing.

SERWER: But, they didn't do anything wrong.

LISOVICZ: And Jack Grubman, the star -- one-time star telecom analyst for Salomon Smith Barney, a unit of Citi, he may be disgraced, but the guy who was running the show is still there as chairman and that is Sandy Weil.

CAFFERTY: Yeah, that -- if I'm a potential investor, stock of the week, I want to know whether any of this has had an impact on the way they do business or whether they're still subscribing to some of the same practices that cause them to have to put $10 billion in a separate fund to settle a wrongdoing they've been involved in.

LISOVICZ: Well, as big as Citi is, and with all the revenue and profits that you were talking about, Andy, still -- they're still going to have a charge for future earnings because of these.

SERWER: Yeah and there's also -- there is also an SEC investigation, as well. And you know, when you talk -- we've been talking about group think and culture and mindset, and you know, this is part of it. Everyone on Wall Street got caught up in it, I don't think it has to do with Citigroup. Sandy Weil ran the company, he's now chairman, Chuck Prince has been brought in, he's now the CEO.

One thing about the stock though, Jack, is it's actually pretty cheap on an earnings basis. Not an expensive stock. You can see with all this cloud hanging over its head, that probably would make sense, and over time the stock has performed very, very well for investors over five years, 10 years, I mean it's such a behemoth and it really sort of reflects how important the financial part of our economy is. Isn't it?

LISOVICZ: Well, yes and I mean, I think that changes have been made, but the fact is again, Sandy Weil is still at the top of the list there at Citi and he was involved and Jack Grubman, as well. One of the most notorious instances of questionable business ethics is pressuring Jack Grubman to change his rating on AT&T stock.

SERWER: Then he got involved in the nursery school thing.

CAFFERTY: I was going to say, some of that was having to do with getting a kid into private school...

LISOVICZ: (UNINTELLIGIBLE)

SERWER: But nobody did anything wrong, Susan, to reiterate your point.

CAFFERTY: We saw nothing, we did nothing, we heard nothing. But we have $10 billion over here just in case.

SERWER: Right.

CAFFERTY: Still ahead on IN THE MONEY as we continue:

A red alert for blue movies: An AIDS outbreak in the porn industry. We'll talk to a former adult film star who now works to keep porn actors safe.

And it's college graduation season, which means it's time for tens of thousands of 21-year-olds to start learning about the real world. We'll have some essential tips for the cap and gown crowd.

(COMMERCIAL BREAK)

SERWER: Porn stars will show you everything, except what it's really like to be a porn star. The business is all about fantasy, but the reality is, without the right precautions, porn films can be dangerous for the people on camera. California's multibillion-dollar adult film industry just ended a voluntary shutdown declared after an HIV outbreak last month. Five actors tested positive for the virus that causes AIDS. Dr. Sharon Mitchell is a former adult film actress who now runs the Adult Industry Medical Health Care Foundation. And she joins us from Los Angeles.

Welcome, Sharon.

SHARON MITCHELL, ADULT INDUSTRY MEDICAL HEALTH CARE FOUNDATION: Thank you.

SERWER: Can you give us the latest on this situation. I guess the industry is back at work?

MITCHELL: Well, some of the industry is back to work. It's going to take a little bit of time for people to get up to speed and start shooting again. We did have almost 60 people on quarantine and so far we've released about 13 people. And they are ready to go back to work. But remember, we had three related cases to our indexed patient here. So it was a total of four related cases, and we've got to release people incrementally back into the community to work.

LISOVICZ: Dr. Mitchell, you are a life-saver to many people in the porn industry. Tell me, is there a lot of infections, disease? Just get us up to speed. How are -- are people educated as to the dangers of the industry?

MITCHELL: Actually, this population gets a tremendous amount of preventive education because the Adult Industry Medical Health Care foundation, we screen 1200 actors per month, that's the entire population, and we screen them for four different diseases every month: HIV, Chlamydia, gonorrhea and syphilis. And because we see them every month we get to update them on lots of sexually transmitted diseases. And then every six months each actor or actress gets a complete physical checkup for diseases we can't see or detect by blood screenings. So I would say your average porn star knows much more than a regular M.D. about sexually transmitted diseases because that's their job.

CAFFERTY: Dr. Mitchell, how did you go from being an actress in porn films to doing what you do now?

MITCHELL: Well, I had a very long, enjoyable career in the adult entertainment film industry for about 12 years. And one day I had just had enough and I was actually stalked by a crazed fan and I suffered an attack on my life. And I thought to myself, it's time to change something here. So I went to school, and then in 1998, there was an HIV outbreak in the porn business, and I realized a lot of the people that I had been -- worked with as actors and actresses were getting HIV. And I was asked to step in and start a monitoring system for this population. And I founded the AIM Health Care.

SERWER: Doctor, I don't watch a lot of porn films, and I'd like to ask you a question, do they practice safe sex? Do they use condoms?

MITCHELL: Well, we take surveys every month and one of the surveys that we do take is condom use. How many actresses and actors are non-condom and how many use condoms. And only 17 percent of the talent uses condoms. And this is an economic issue because the films that are non-condom are picked up more readily for distribution. And so the producers and directors produce more without condoms. Therefore, the actors and actresses get paid a little bit more not to use condoms.

SERWER: Risky business, then.

MITCHELL: Yes, it is. It's very closely monitored, but the tests are only as good as the day they are drawn and the rates of disease other than HIV are very low. They are at 2.8 percent, which is roughly 10 percent lower than the general population. But still, it's not 0 percent.

LISOVICZ: Dr. Mitchell, your story has a happy ending. You were almost killed by your attacker and you went to school. You got out of the business, but you are still linked to it. Can you tell us about the kind of longevity other actors might have in this business? The complaint you always hear in Hollywood, especially for women, is that it's a very short shelf life. What kind of future do these people have?

MITCHELL: Well, this is a very short-lived career. It's almost like an athlete. Careers range from six months to three years on average. Men typically stay in the business for five to 10 years. Men can work a little bit longer. But you've got to remember this is predicated on youth and beauty. And so people run in and out of this business very, very quickly, and we have several programs. We have a very effective program for life after porn. It's a long-term program. It takes about two years to complete and it's combined with the scholarship program for the actors and actresses that are choosing to get out of the porn business.

CAFFERTY: How much does it pay? How much does the average actor in a porn movie make?

MITCHELL: Well, this is really gauged on per body part, per partner, per scene, fir example...

CAFFERTY: Just give me a number. The average actor in the average porn film, in other words, you've got a career that lasts six months and three years. I'm trying to get an idea of a rough kind of a living these people make.

MITCHELL: Well, I would say between $600 and $1000 a day people make. Between $600 and $1,000 a day would be the average porn star. Now you've got some of the A-list women that are on contract that probably make much more than that. But on average, you know, an actor or actress gets between $600 and $1000 a day. No residuals.

CAFFERTY: And do they work five days a week?

MITCHELL: They can work up to seven days a week. But most people work about three to four days a week.

CAFFERTY: All right, and a career that lasts usually no more than about three years. So basically unprotected sex in the porn industry, you risk AIDS for something in the neighborhood of a couple of hundred thousand dollars for the lifespan of your career. I don't know, I guess that's a judgment call everybody has to make.

MITCHELL: Yes. It's an occupational hazard, and it is -- HIV and STDs are the number one occupational risk.

CAFFERTY: All right, Dr. Sharon Mitchell, thank you for joining us. Appreciate having you on the program.

MITCHELL: Thank you for having me.

CAFFERTY: All right, time for a break while we let the sales department earn a couple of bucks. When we come back though, the English major in the hot dog suit. We'll have survival tips for recent college grads. See how to stay away from those jobs where they make you dress funny and hand out those fliers.

And sorry, Dick, find out why those words could be worth million for former New York Stock Exchange boss Dick Grasso.

(COMMERCIAL BREAK)

LISOVICZ: This month, hundreds of thousands of wide-eyed men and women will graduate from college and head out into the real world. Good luck. But instead of frat parties and dorm life, they'll have to deal with a tight job market, scarce housing and their own finances. Hear that, Jack? Perish the thought. Our next guest has written a survival guide for college grads. It's called "Welcome to the Real World: You've Got an Education, Now Get a Life." Stacy Kravetz is the author.

Welcome.

STACY KRAVETZ, AUTHOR, "WELCOME TO THE REAL WORLD": Thank you.

LISOVICZ: You know, one of the things that I remember everybody stressing out over is that first job. One of the rules you have for surviving college and getting out into the real world is that the first job doesn't have to be great.

KRAVETZ: Yes, that's true. The first job is rarely your be-all, end-all job that you're going to have for the rest of your life. I don't think I know a single soul for whom that's the case. Usually your first job is kind of a continuation of college in some ways. It's a place to continue your education, only your education directed toward the job that you will ultimately have. So it's a place to get skills to help figure out what you really want to do, what you are good at and to sort of act as a stepping stone between your education and your career.

SERWER: Hey Stacy, I've always wanted to ask someone like yourself this question. How many people really get jobs from the human resources department and doing formal interviews and how many people get jobs just by connections? And I don't mean that in a bad way, but someone introducing someone to someone and helping you get a start in life. Isn't networking really the be-all, end-all here?

KRAVETZ: It is. I mean, the career counselors are great for what they do, which is to -- they can run you through Briggs-Myers tests and help you figure out what your well-suited for...

SERWER: What color your parachute is?

KRAVETZ: Exactly. But it's often the case that the companies that come to schools are interested in a very narrow range of types of jobs. They are looking for people in computer graphic -- or computer technology and sales. And that sort of rules out all of the humanities, liberal arts majors and those who are going to want to go work in anything from advertising to medical fields that aren't necessarily supplied by going to medical school.

They are going to have to go and talk to people they know, make use of informational interviews, read up on the kinds of jobs that are available in fields that they like; but probably most likely, call people that they know and call graduates who are working in fields that sound interesting to them and see what they can find out that way. And you do often get your jobs through connections or through a network of people who you have cultivated who are doing things that sound interesting to you. And that's not a bad thing.

CAFFERTY: Stacy, Jack Cafferty. I've got four daughters, so I've been down this road a time or two. I want to ask you about the degree to which colleges and universities may be guilty of perpetuating a myth. And the myth that I think they may be culpable in, perpetuating is that you come here, you spend four years, you study hard and you make good grades and at the other end of that experience is a good job.

Well, there aren't any jobs. For the last three years there haven't been any jobs. But the schools, and I know this from personal experience at least in one case, one of my kids, the schools are very reluctant to come up to you and say, you know what, you can go here for four years, but don't expect to find a job because there ain't any jobs. They don't want to do that because people wouldn't be spending tens or hundreds of thousands of dollars a year to send their little darlings off to the ivy covered halls. I mean, what about that, isn't there something to that argument?

KRAVETZ: Absolutely. I think part of what a school does, and rightly so, is to give you an education. And that education is what will help you find a job.

CAFFERTY: But don't they also create the idea in kids' minds that if they go to college, that's the key to getting a good job? I mean, that's how I grew up.

KRAVETZ: Yes, absolutely. And there is the idea that somehow there is a correct major that you could pick that will lead you to a job or that there's a correct internship that you should have. And that's just not the case. And that's why the people who say, it doesn't matter what you major in just do what you want to do, it's hard to follow that advice because you always feel like maybe there is some holy grail that you should be following.

But if you can follow that advice and just see education for education's sake and then figure that your job search is going to be a whole other ball game, which is not going to be easy. They don't tell you that, but that is the reality. You are basically out of school with a lot of other people who are looking for jobs, some of whom already have job experience and they are still going for the same entry-level jobs that you are going for.

And you have got to just kind of use the education that you've gotten, figuring out how to fend for yourself, getting creative on doing your research on what jobs are out there, what skills you need, figuring out how to market yourself and package yourself. Those are all things that you sort of learn right out of the gate. But they are not solid skills that you've necessarily gotten just by going to four years of school. So you learn when you start.

CAFFERTY: Education for education's sake.

KRAVETZ: That's a bit of wisdom.

CAFFERTY: Stacy, thank you, it's nice to have you with us, appreciate it.

KRAVETZ: Thank you.

CAFFERTY: She wrote "Welcome to the Real World: You've Got an Education, Now Get a Life."

Just ahead, would you give $48 million for an apology? Former New York Stock Exchange Chairman Dick Grasso says he would, of course, he's got over $100 million. So everything is relative. We'll have his story.

And if you'd like to apologize to us, knock yourself out. If you want an apology from us, lots of luck, you'll have to e-mail us either way at inthemoney@cnn.com.

(COMMERCIAL BREAK)

CAFFERTY: Former New York Stock Exchange chief Dick Grasso now says he's willing to do without some of the huge pay package that led to his ouster last year, but there's a catch. Our Webmaster Allen Wastler has more on that as well as the "Fun Site of the Week."

When he left there couldn't hardly get it all in his pockets, now what's up?

(LAUGHTER)

ALLEN WASTLER, MONEY.COM: He's got $139.5 million already. That's salary and pension. He said, that's mine, baby.

SERWER: The New York lotto jackpot.

WASTLER: That's mine. But there's another $48 million in deferred payments that still owed to him. And he -- this just out in a "Newsweek" interview, one of the very few interviews that he's given. And he said...

CAFFERTY: Might be the only one that I'm aware of.

WASTLER: That's the only one that I can recall too. He said, you know what? I'm willing to forgo that $48 million if the NYSE says I'm a reputable, honorable man and I've done nothing wrong.

SERWER: That's a big if. That's a big apology.

WASTLER: ... the NYSE has been like, yes, right.

CAFFERTY: Why do you suppose, though, that he's making any kind of an offer to give any of this money back? Isn't there some possibility that they may go after this money whether he chooses to give it back or not?

WASTLER: Well, as you'll recall, John Reed, the interim chairman that they set up at the NYSE and sort of said, clean up this mess, will you and everything? He did this great big report and he said, oh, this report, a lot of stuff here to consider. Here, Mr. Eliot Spitzer, New York attorney general, why don't you consider this? And he sort of left it on Spitzer's lap. OK?

So Spitzer has the question of, all right, do I go after Grasso on a law that prohibits people from reaping excessive compensation from a nonprofit? But here's the political problem for Mr. Spitzer, if he goes after Grasso, he's probably going to drag in the executive compensation committee from the NYSE in there.

The chairman of the committee at the time for approving Grasso's contract was H. Carl McCall, a big wheel in the Democratic Party in New York, and if you are thinking of becoming governor of New York, which a lot of people think Mr. Spitzer might be doing, do you really want to drag in somebody that you are going to have to be buddy-buddy with if you decide to run?

SERWER: They did take that plaque down at the exchange, the Dick Grasso plaque.

LISOVICZ: And a lot of the pictures, and there are a lot of pictures.

WASTLER: And a lot of angst about that, too. You know, well, Grasso, he did help out after 9/11. He deserves that plaque there. But you know, we want to make it a more inclusive plaque where everybody is...

CAFFERTY: Let's go to the "Fun Site of the Week" and look at some other pictures.

WASTLER: We're heading into the political season. And a lot of fantastic things to report. I think it's a good idea to review that not everything on the Internet is true. So we go to the Museum of Hoaxes. Here you go. President Bush reading kindergarten books upside down. Hoax or real?

CAFFERTY: Oh, come on.

(LAUGHTER)

CAFFERTY: You are suggesting he'd be reading the book upside down and it would be a real picture?

WASTLER: It is, in fact, a hoax. OK? Now to prove that we're a two-party system here, let's go to the next one. Ah, Tom Daschle. Now, is that really how you are supposed to do the Pledge of Allegiance? OK. Shouldn't it be the right hand over your heart? OK. Hoax or real?

SERWER: It's real.

WASTLER: It's a hoax.

WASTLER: OK. Two hoaxes. All right, two hoaxes, here's another one. OK. You get a lot of fantastic things. Look at that. You've got a Coast Guardsman trying to climb up the ladder and there's jaws going after him. OK?

LISOVICZ: That's real.

SERWER: That's called shark fishing. That's how you catch a shark.

CAFFERTY: That's right.

WASTLER: Folks, it's a hoax, hoax, hoax, hoax, hoax, hoax.

CAFFERTY: One more.

WASTLER: One more. Let's go to the scientific frontier. OK. That is a jet supposedly breaking the sound barrier.

SERWER: That's a marsh mallow.

WASTLER: Is that what it looks like? Hoax or real?

SERWER: That is real.

CAFFERTY: Is that real?

WASTLER: That's real, that is, in fact, real.

LISOVICZ: One out of four.

WASTLER: So there you go, you can ...

SERWER: That's a cool site.

WASTLER: ... get the link on our show page. Check it out, they've got plenty of other little real or hoax questions.

CAFFERTY: Sounds good. This show, by the way, is real.

SERWER: Very real.

LISOVICZ: No hoaxes.

CAFFERTY: Much more to come, including your answer to our "Question of the Week." If you want to drop us a line, feel free, the address is inthemoney@cnn.com. We actually have somebody on the payroll here who is silly enough to answer all this stuff.

(COMMERCIAL BREAK)

CAFFERTY: All right. Here now are some of your answers to our question about whether your mothers went to work or stayed home when you were growing up and what sort of affect that had on you.

Colleen (ph) from Texas wrote this: "I grew up during the Depression and my mom had to help my dad at his watch repair store. I was a latchkey kid, but I also helped out in the store and made deliveries. The experience turned me into a liberal socially and a conservative fiscally."

Gene (ph) wrote: "Having a working mother during my formative years turned me into a juvenile delinquent. I didn't get straightened out until I entered the military."

(LAUGHTER)

Lisa -- he might have become one anyway. Lisa (ph) from Buffalo wrote: "My mother and father worked different shifts so one of them could always be watching us. My memories of growing up are the reason why I'm 32 years old and have no children. Unless I can give my children the benefit of two real parents, I will remain childless.

It's time now for our e-mail question for this week, which is as follows: "How are rising gasoline prices affecting your travel plans for this summer?" Send your answers to inthemoney@cnn.com. And you should also visit our show page at money.com/inthemoney which is where you'll find the address of our "Fun Site of the Week": Pictures Real or Hoax?

Thank you for joining us for this edition of the program. Thanks to our regular gang, CNN Financial correspondent Susan Lisovicz, "Fortune" magazine editor-at-large Andy Serwer, and Money.com managing editor Allen Wastler. A fine group, don't you agree?

Join us tomorrow at 3:00 Eastern when we'll look at the new face of warfare in the 21st century. Increasingly U.S. troops are fighting the enemy on urban battlefields. Find out whether the American public and the Pentagon are ready for the fight. That's tomorrow at 3:00 Eastern, hope to see you then, until then, enjoy your weekend.

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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