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CNN IN THE MONEY

Pentagon Pumping Million Into Public Works Projects In Iraq; Why Is Ohio So Important To Presidential Campaign?

Aired June 13, 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: Welcome to the program. I'm Jack Cafferty. Coming up on this edition of IN THE MONEY, fighting gunfire with shovels: The Pentagon pumping tens of millions into public work projects in Iraq, see whether you can stop an insurgency with a bunch of new sewers.

Plus, the state that can make them or break them: You cannot get to White House without going to through the great state of Ohio. We'll find out why the Buckeye state is so crucial to the presidential campaigns.

And where else on television will you hear an anchor say a "cumberbund." See what a reporter learned about American teenagers when he went undercover and went back to high school to cover the prom. He wound up staying for a whole year, turned it into a book, and it's fascinating stuff.

Joining me today, a couple of IN THE MONEY veterans, CNN correspondent, Susan Lisovicz and "Fortune" magazine editor-at-large, Andy Serwer.

So, the death of President Reagan dominating the news all week long. I came in to work on Friday morning and discovered that one of the giants in the music business, Ray Charles, is also gone from the scene. I immediately, over the weekend, put on a great old album called "Modern Sounds in Country and Western Music" on the Atlanta label that I've had since I was probably 17 years old. And was reminded what a gigantic talent this man was.

ANDY SERWER, "FORTUNE" MAGAZINE: That's one of the best albums in the past 50 years. And what's interesting to me is, this is a guy, and it's not a cliche, but he really transcended racial boundaries and musical boundaries. You think about people like Elvis Presley, Aretha Franklin, Duke Ellington, people like that, Les Paul, who are so important to this country's society and culture.

SUSAN LISOVICZ, CNN CORRESPONDENT: And he defied a genre, I mean, you couldn't say country/western, or jazz, or soul, or R&B he did it all with great passion and that's the other thing, I remember when Johnny Cash died and I remember how upset you were, and how many memories it brought back and one of the things these that two artists had in common was the great passion, the empathy, when they sang those words, you felt it, and I think that's what a great artist does, it makes you feel that they know what they're talking about, they've experienced it.

CAFFERTY: Interesting, there's a list of Ray Charles favorite singers and musicians and artists of all time and it's about 20 people long and it includes names like Quincy Jones and Ella Fitzgerald and Harry James, a lot of the pop standard type artists and at the end of that list is a guy named Willie Nelson and he loved country music. And if you've ever heard the duet he did with Willie Nelson called "Seven Spanish Angels," why, it would just bring a tear to your eye, it's just one of the prettiest things ever put on record.

Anyway, we'll miss Mr. Charles, we was a giant.

The Pentagon is trying a new approach in Iraq, less shooting from the hip and more elbow grease. The Army reportedly planning to hire tens of thousands of Iraqis for an infrastructure repair project that's contracted out at about $240 million. The idea is that jobs and better conditions will kill support for the insurgency, which just happens to be attacking that infrastructure that they're trying to rebuild. For more on this let's go now to history professor, Juan Cole at the University of Michigan up in Ann Arbor. He specializes in the modern Middle East.

Welcome to our program, professor, it's nice to have you with us.

PROF. JUAN COLE, UNIVERSITY OF MICHIGAN: Thank you.

CAFFERTY: A lot of us thought the infrastructure would be on the way to being rebuilt and these projects completed by now. Why is it taking so long?

COLE: Well, Iraq was very ramshackle, in the last ten years of the Saddam period, there were all the United Nations sanctions, and then Saddam manipulated the economy so as to put most of the money that did come in into the Baath party in the form of political patronage, so the country was really run down.

LISOVICZ: Right. And so there was corruption then, and now there is a war that's still raging in pockets of the country. So what is the state of the infrastructure there? Are there working sewers? Is the electricity working? Is the trash collected?

COLE: No. The answer is no. That is to say, there is some electricity during the day, most places you have four hours on, four hours off, that kind of thing. Even if the United Sates were able to repair all of the electricity facilities, and get it back to before the war levels it wasn't enough then, it was only about two-thirds of national needs. And it takes five years to build a power plant, so the electricity situation is not likely to improve markedly for some time.

SERWER: Professor Cole, how much money is the United States committing to this endeavor? And what's happening? I mean, what's the state of affairs?

COLE: Well, the United States -- Congress voted $18 billion for reconstruction, civil reconstruction in Iraq. One problem is that the way the Congress sets things up, a lot of that money has to be passed through American companies that bid on it, in some cases, some foreign countries -- or foreign companies are eligible.

But civilian contractors in Iraq are under enormous pressure. A lot of companies have pulled out, General Electric pulled out, so there's a problem in getting enough people active enough to actually do anything with the money, because it's being passed through the civilian sector. The U.S. military is there, and so when it decides to spend money, it actually has people on the ground that can do things.

CAFFERTY: With the uncertainty surrounding the handover of sovereignty, and the question marks that accrue to the idea that the Iraqis are ill-equipped at this point to provide for their own security after the handover, is it practical to be trying to rebuild infrastructure before there is a greater measure of control exerted on the country itself, and some safety guaranteed so that these workers can come back in without fear of losing their lives?

COLE: Well, I think the plan now is to have the Pentagon funnel the money directly into local Iraqi concerns that can put Iraqis to work. I think that's all to the good. You need a jobs program in Iraq, the unemployment rate is at least 30 percent, that's more than the U.S. Great Depression. And I think it is the case that some of the young men who joined these militias are doing so out of desperation, or because they can get a salary that way. And you might be able to draw some proportion of them off into more productive pursuits.

LISOVICZ: You know, actually, I'm glad you mentioned the Great Depression, because my dad was one of the youths who worked in the CCC, which built the nation's parks. That was one of the jobs programs that was a great success here in the U.S. Ultimately, even though the infrastructure is so ragged there now, do you think employing these Iraqis is really going to be one of the keystones to success there, to some stability there?

COLE: Absolutely. I think one of the problems with the way the money was disbursed earlier in this process was that a big chunk of it went to large U.S. corporations, who then farmed things out to subcontractors in Iraq and by the time you got down to the Iraqi workers, there weren't that many of them, and they didn't get that large a slice of the pie.

SERWER: Professor Cole, aren't the insurgents going to continue to target the infrastructure? I mean, has this become an exercise in futility?

COLE: The insurgents are certainly going to continue to target the infrastructure. There is a political insurgency made up of anti- American guerrillas, people who don't want a foreign Western power in their country, or who are afraid that the new arrangements that are emerging will disadvantage them. You had a minority, Sunni Arab regime, those people were gathering the lion's share of resources, they're now going to be whittled down to size, they're afraid. And so there are people who are very determined, and will continue to engage in terrorism, but I think the main issue is that you have to set Iraq up so as to isolate those people and make it harder for them to recruit foot soldiers into the endeavor. So the more you can get the country moving forward, the more people you can employ, the more hope you can give people, the less effective the insurgency would be.

CAFFERTY: Interesting stuff. Professor Cole, thank you for being with us on IN THE MONEY, I appreciate it. Juan Cole, professor of Modern Middle East History at the University of Michigan.

Still ahead as we continue, Midwestern swingers: Ohio is a swing state, big time. It can sway a presidential election. Find out why when we talk to a guy who's been hearing from the voters out there for a good long while.

Plus, tuxedo function: We'll hear from a reporter who went after a prom story and came up with a snapshot of American teenage life.

And the bean counters: See how candy for a grownup palate found a place in the White House.

(BEGIN VIDEOTAPE)

Alcoa has the "Fortune" 500 metals industry all wrapped up. As one of the top producers of aluminum, and its components, Alcoa is reaping benefits of world-wide increase in aluminum consumption. In fact, Alcoa reported its net income more than doubled for the first quarter of 2004, thanks to record high metals prices. Alcoa's metal and plastic products can be found in everything from cars to construction to aerospace. The company recently inked a deal with Ferrari to be to sole supplier of aluminum for the carmaker's next generation sports car frame. But to keep the good times rolling, Alcoa plans to shed it's under performing divisions and cuts its workforce by about six percent.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

CAFFERTY: Well, you may already know the presidential election is likely to come down to a few swing states, but the Bush and Kerry campaigns are spending a little more time on one swing state in particular, that's Ohio. Instead of looking at the polls or relying on profiles of the state written by outsiders, today on IN THE MONEY, we're going to get the inside source to find out who has the best chance of winning Ohio in November. Our guest now is Bill Wills from a popular radio show, "Wills and Coleman in the Morning" on WTAM in Cleveland, Ohio. And he spent 13 years hosting a similar radio show in Cincinnati.

Bill, it's nice to have you with us.

BILL WILLS, WTAM OHIO: Good to have you -- thank you for the time, Jack.

CAFFERTY: So, who's going to win the election? And, let's get the mystery solved right away.

WILLS: Well as you say, the polls say if the election was held today, but it's not, I mean everything looks pretty close. My sense is, people here in Ohio are looking for a reason to fire their president, if Kerry wants to be elected. I don't think he's given them a reason yet.

CAFFERTY: You say President Bush has given a reason to the voters in Ohio that he should be fired yet? Is that what you're...

WILLS: No, that Kerry hasn't given the voters reasons yet that Bush should be fired.

CAFFERTY: I see. OK.

SERWER: Hey Bill, let me ask you a question. What do the people in Ohio really care about?

WILLS: I think the war on terrorism and the economy. I had a guest a couple of weeks ago I thought made a great point. Forget healthcare, forget prescription drugs, forget the economy, if we're not a secure nation, none of that matters. So, I think war on terrorism is there on the to, which brings me back that Kerry hasn't given a reason for us to fire our current commander in chief, I think.

LISOVICZ: Bill, you Buckeyes must be feeling rear special these days. One of the few swing states that everybody wants to visit. Have you tabulated how many times the president has visited Ohio, and how many times John Kerry has visited your state?

WILLS: I don't have the numbers, but they're here all the time it seems like.

SERWER: Must be you.

WILLS: Yeah. Kerry did his bus trip through northeast Ohio where we're here at, in Cleveland. The president did a nice trip on the western part of the state and went down to Cincinnati. The First Lady Laura Bush will be here next week. We're seeing a lot of them. Interestingly, you have to go back to 1960 for the last election that Ohio didn't go with the winner. And in '60, Ohio went for Nixon, and of course, Kennedy won.

CAFFERTY: You mentioned a minute ago, your friend who was talking about, it doesn't matter about -- you know, healthcare, prescription drugs, this, that, and the other thing if we're not safe. And I suppose that in the broad sense, that's true. But as a matter of course, things like healthcare and prescription drug costs and jobs and the economy do matter, and they matter a lot. And historically, most elections, in fact, are decided on those kinds of issues, not on foreign policy as much.

Now, something the size of World War II might be an exception. But history suggests that when you go into the voting booth, you vote your pocketbook. Do you think there will be an exception to that this time?

WILLS: I don't think so much, Jack, but I still think the economy, and the war on terrorism, a longtime governor, here in Ohio, made that point, Jim Rhodes, he would go around the state and hold out, literally, his billfold and say it's about jobs, job, jobs, and jobs. Here in Ohio we have lost a lot of manufacturing jobs. Interestingly though, most of those are in a democratic area that probably Bush wasn't going to get their vote to start with. But the neighbor that maybe is doing well might be worried about that guy next door that's lost a job, that's the vote that Bush needs to continue to go after, I think.

SERWER: Hey Bill, in a way, Ohio is like a little America, you know, it's a microcosm, you've got northern industrial areas like Cleveland and then the southern part of the state, along Kentucky's actually very sort of Southern and rural. How does that come into play?

WILLS: Politically the South, very much Republican. As a matter of fact, I think some of the best zip codes for the president to raise money, right around Cincinnati. A long-time friend, Mercer Reynolds, is from that area, you go through Columbus, you've got a younger demographic with Ohio State there, a city probably evenly split. You come north to Cleveland where I work and live, very Democratic. The last time this county went Republican was many, many years ago, it's a much more union area, and still in the Russ belt in the northern part of the state. So yeah, it's a pretty good slice of America, I think.

LISOVICZ: Why has it become such a swing state? You mentioned the manufacturing, the loss of jobs, it's something that other states have experienced as well, plenty of others, especially in the northeast. You know, why is that? Is it historically independent voters? What's going on?

WILLS: I think independent voters have a lot to do with it. Here in Ohio, to give you an idea of state-wide, politically the Republicans control everything. They control all the state offices, Governor Taft was reelected recently, by a landslide, really. And the state had some tough economic times. But Democrats do hold the mayor's offices in Cincinnati, Columbus, and Cleveland. So in a way, we're kind of split both our Senators are Republican, a majority of our House leaders -- House people in Congress are Republican. But those 20 electoral votes are pretty good prize.

CAFFERTY: I remember covering then Governor Bill Clinton of Arkansas up in new Hampshire during his quest for the nomination back in, what was it, 1992. And traveling around in New Hampshire, those folks were not bashful about letting you know they were pretty damned important when it come to deciding who the nominee of the parties were going to be. Are Ohioans aware, or are they at all self-absorbed or carried away with this idea that they really do matter? I mean, Ohio, if you don't win Ohio, you might as well just pack it up and go home, because without Ohio you don't get the job. WILLS: Yeah, no Republican has won the White House without winning Ohio and as I said, since 1960, this state has always gone with the winner. Before that, you have to go back to the '40s.

Jack, I think that -- you know, every state wants to feel like they're important. We saw how important Florida played out. Ironically though, in the last election, Bush was ahead of Gore in the polls eight to 10 points a week or two out. Gore pulled out of this state, I couldn't even get a return call from his office on the eve of the election, ended up Bush only won the state by a few percentage points. Democrats here still say that if Gore would have stayed here, you and I would probably be talking more about a Gore reelection, not Bush now.

LISOVICZ: Bill Wills WTAM morning talk show host, you've got a lot to talk about for the next five months. Thanks so much for joining us.

WILLS: Take care. Thank you.

LISOVICZ: This is IN THE MONEY where business news gets to take its tie off and relax.

Up ahead, the do it yourself oil industry. Find out why one oil boss thinks America can't go it alone when it comes to the pump.

And later, who's the old guy with the notebook? We'll talk to a reporter who got to know today's teenagers as he studied their senior prom.

Plus, 50 flavors with one big fan. See how Ronald Reagan took Jelly Bellies off the shelf and into the limelight.

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at the week's top stories in our "Money Minute." Pfizer's Warner-Lambert unit pleaded guilty to a rare case of criminal healthcare fraud. The company admitted to marketing the drug neurontin for many elements the FDA had not approved it for. The drug was only cleared to treat epilepsy, but marketers promoted it for headaches and psychiatric illnesses. A federal judge ordered Pfizer to pay a $240 million fine.

Former WorldCom chief financial officer Scott Sullivan has pleaded guilty to securities fraud. Sullivan faces up to five years in prison. Sullivan has already pleaded guilty to several other criminal charges and may help the feds in their case against former WorldCom CEO Bernie Ebbers.

And with mortgage rates rising, a record number of homeowners are using home equity lines of credit to get cash. Mortgage refinancing had the method of choice, of course, but with home equity interest rates at or below the prime rate, that's changing rising home values are also giving homeowners the ability to borrow more.

SERWER: In other news, ExxonMobil chairman and CEO Lee Raymond delivered strong words to the American people. Raymond called the idea of American energy independence a "myth." And says the Middle East will remain the center of supply because it holds half the world's oil reserves. ExxonMobil have been on a steady rise since the end of last year, but can the stock stay strong as Americans are faced with record gas prices. That question and Raymond's comments make ExxonMobil our stock of the week.

Now, Lee Raymond, you guys, is blunt, he is outspoken, and unlike the people at BP, British Petroleum, or Mobil before it merged with Exxon, he does not truck with the enviros. He does not care about those people.

LISOVICZ: I think we learned that in Alaska, I believe.

SERWER: I got to tell you something. I think he is dead wrong here, here. I mean, the idea that we shouldn't try to wean ourselves from Middle Eastern is wrong, well there's a lot of things we can do, conservation, new energy sources. The war with Islam is so tied up with our dependence on Saudi oil, for instance, it's time to move forward.

CAFFERTY: Yeah, but if you were running a bill oil company, wouldn't you like to encourage the idea that you're going to need the big oil's products for as long as they eye can see?

SERWER: See, I think that's right, but they're going to do just fine no matter what and we can also talk about developing the Arctic National Wildlife Refuge, as well, domestic stuff here. I mean, he likes to speak his mind.

LISOVICZ: I thought it was shocking. It's great to speak his mind at a critical time like this. Where you could at least encourage some conservation of, you know, our men and women are getting killed in Iraq and it was just shocking, actually.

CAFFERTY: Well, there is some conservation occurring, as I read the newspapers as a result of $42 a barrel oil, suddenly you've got Americans thinking about cars that get better mileage, they're changing their driving habits. There is some conservation in the system as a result of these prices, that perhaps you never would have been able to get people to go along with if you just said, hey, we ought to conserve.

SERWER: Well, that's what happened in '73 and '74, of course, Jack, in 1980, as well. It occurs naturally. And the fact that we couldn't take 10 percent off of our energy use in this country, of course is ludicrous. I mean, any family, any business could take 10 percent of their costs off, just like that.

You know, the oil companies do well, no matter what. And the stock has done well over the past year. It's beaten the market; it's beaten the market over the past five years, it's a juggernaut no matter what happens, these guys always seem to make out, I think.

LISOVICZ: When he said those comments, I said, consider the source. CAFFERTY: Sure. And of course that other phenomenon that's always interesting is, as oil prices go from $30 to $40 a barrel, gasoline prices go from $1.30, to $2.50. But when the oil prices go from $42 back down to $36 as they did last week, I didn't see much action at the pump. Did you?

SERWER: No. The message here, I think is, if you can't beat them, join them. Probably buy the stock.

CAFFERTY: Sure, good idea.

(LAUGHTER)

SERWER: Coming up on IN THE MONEY, wallflowers and queen bees: teenagers are American's hottest demographic. Find out what matters to them as we talk to a reporter who went back to high school.

And later, the little round candy that captured the oval office: We'll look at one president's love affair with the Jelly Belly.

(COMMERCIAL BREAK)

SERWER: They're one of the great mysteries of the universe. No, we're not talking about the Sphinx or Stonehenge. We're talking about teenagers. Parents complain that they're moody. Companies say their tastes change overnight and no one can figure out their politics. Our next guest decided the best way to get a handle on American teens was to out with them for a year.

In his new book "Wonderland, author Michael Bamberger talks about what it was like to join the senior class at Pennsbury High School in Pennsylvania. Michael spent a year with the kids, doing everything from studying to planning the prom. Michael is also a senior writer at "Sports Illustrated."

Welcome, Michael, and thanks for joining us.

MICHAEL BAMBERGER, AUTHOR, "WONDERLAND": Thanks for having me.

SERWER: You and I are about the same age, we graduated about 25 years ago, sad to say, and I want to know, with all the body piercings and the cell phones and the fashions and MTV and everything else, are kids today that much different?

BAMBERGER: I was really shocked to discover that the essential experience of going to high school is completely unchanged from our era to today. When you see kids hanging over their lockers or you see them in the cafeteria or you see them in the library or you see them in the parking lot, all trying to figure out who they are, what they're going to do with their lives, what they're going to that weekend, you see that the essential experience of being an American teenager is basically unchanged.

CAFFERTY: Michael, I remember my high school years as four of my most unpleasant years of my entire existence, I mean, fraught with all kinds of crises that most of which I've tried to suppress in my older age. Why would you want to go back and revisit those times, they were awful?

BAMBERGER: It's funny, a lot of people feel that nervousness for their high school period, and yet they have a longing for it as well. I think it's a chance where you're just old enough you can sort of glimpse your adult self, the adult that you're going to become and you're young enough that you can still dream about what you're going to become. I think it's a very interesting age. And socially I think it's an intense period because you're thrown together with so many different people from so many different walks of life. And you've got to really figure out a lot in a hurry and things change on a daily basis. So maybe it's one of the most interesting four years you can have, whether it's miserable or not.

LISOVICZ: And Michael, you asked for this assignment, if I'm not mistaken. Did anybody accuse you of having a midlife crisis? Getting any piercings of your own, perhaps?

(LAUGHTER)

BAMBERGER: You know, I'm happily married with two young children and a lawn that needed mowing so it was an odd thing at first for people to see this middle aged writer for "Sports Illustrated" in their hallways of their schools. And sometimes when I was interviewing girls at a local Starbucks, on one occasion a father did a drive-by at the Starbucks to make sure I was who I said I was. So yes, it was a little odd, but over time, they got used to me and I was very interested in them.

SERWER: Hey Michael, one thing that really interested me that you said was that parental relationships, if you will, are stronger today than when we were kids. And maybe that makes sense because with all the pressures of getting into college and everything, can you talk a little bit about that?

BAMBERGER: Well, I feel that's probably the most significant change from the late '70s when I was in high school to watching these kids today. I feel like the generation gap is just much more narrow now than it has ever been in the past. And I feel like the kids have a friendship with their parents, particularly girls with their mothers. But really across the board, a lot of boys who are athletic, particularly, or even if they're not so athletic, but someone involved in sports, just have a more collegial kind of relationship with their parents and they're talking about more intimate things. On occasion they're calling their parents by their first name. On occasion they're saying "shut up" to their parents in ways that I don't think in our generation we ever would have. But it's more -- it's more "shut up" more in the sense of friendship than in the sense of, "you're really bothering me."

CAFFERTY: This was in Pennsylvania, right?

BAMBERGER: This is in the -- yes, in the suburbs of Philadelphia.

CAFFERTY: Give meet sense of the genesis of the story. You're a writer for "Sports Illustrated." You went to the -- what did you do, go to your editor and say, I have a great idea, I want to go back to high school? I mean, how did this thing happen?

BAMBERGER: Well, it wasn't so -- the book was sort of separate from my work at "Sports Illustrated." But I live in Philadelphia. And on TV news one night I saw a brief clip local news of showing all these prom-goers going into their high school prom at Pennsbury High School where they still have the prom in the school gym. And I was fascinated by the different modes of transportation the kids took: Scooby-Doo mobiles and Oscar wiener mobiles and parachutes an all of the other things.

But the thing that really struck me was that there were literally thousands of parents and their grandparents and kids lining the sidewalks watching the kids come in. And I knew roughly where the high school was, I didn't know anything about it, but I knew it was it was in the sprawl of suburban Philadelphia. And I didn't think that thing sort of existed anymore, this really sense of the American village. And it very much intrigued me, so I went to the school and asked the principal if I could hang out there for the year, a man named Bill Katz (ph), and he welcomed me into the school.

LISOVICZ: And Michael, the best thing out of the assignment for a year after 9/11, after the jobless recession, is that these kids are optimistic. Michael Bamberger, the author of "A Year in the Life of an American High School." Not much has changed, it's kind of refreshing, actually. Thanks so much for joining us.

BAMBERGER: Thanks for having me.

LISOVICZ: Up next, cappuccino meets jalapeno, find out how a gourmet jelly bean made it all the way to the Oval Office.

And later, do-it-yourself, we'll show you a Web site where they take acting lessons to the limits.

(COMMERCIAL BREAK)

LISOVICZ: When you think of Ronald Reagan, many images come to mind, Cold Warrior, tax cutter, movie actor, just to name a few, but perhaps one of the sweetest images is that of Ron Reagan the candy lover. In fact his passion for jelly beans helped make one small California company an almost overnight success. And joining us today is Herman Roland, chairman of the Jelly Belly Candy Company.

Welcome.

HERMAN ROWLAND, CHAIRMAN, JELLY BELLY CANDY CO.: Good morning, Susan. How are you?

LISOVICZ: We're fine, thank you. And we're happy for you to join us. You know, everybody talks about a beautiful relationship and they think it's Nancy and Ron, but it actually was -- in your opinion, it was Ronald Reagan and those Jelly Bellies, which did not occur quite naturally. It was a letter that the company wrote because the then-governor had quit smoking a pipe.

ROWLAND: Well, that's right. Actually a friend of mine attended a cocktail party, a fundraiser when he was running for governor and found that the president had quit smoking and we were informed later a pipe; and that he needed to have Jelly Belly to offset his smoking habit. And so we started sending the beans to him.

SERWER: Herman, I understand that licorice was his favorite. It's interesting. But I understand also that he invented, invented the blueberry jelly bean, is that true, sir?

ROWLAND: Well, let's put it this way, we needed blue for the blue in the American flag. And we knew we were doing Jelly Belly mosaics. And we did not have the proper blue color. So we invented blueberry which became a very, very popular flavor, and so that we could really produce a red, white and blue flag. And actually, we have portraits of the president standing in front of the flag.

CAFFERTY: Can you give as you sense of your company, Jelly Belly, pre-Governor Reagan versus Jelly Belly post-Governor Reagan?

ROWLAND: Well, in the sense of what happened to us?

CAFFERTY: The impact that he had on the growth of your company?

ROWLAND: Yes, it was a terrific impact. It took us from a small United States company over to an international company. So it went from, let's say, in '81 to '82, it actually doubled our sales. Everything we could possibly produce we sold. And I don't think we did 10 percent of the jelly bean business in the world at that time because every manufacturer was making everything they could.

CAFFERTY: You do have, without a doubt, the greatest assortment of flavors of jelly beans, I'm not nearly the expert that the late president was. But I get into the jelly beans once in a while myself. What is the most -- never mind.

(LAUGHTER)

CAFFERTY: What is the most esoteric flavor in your opinion that your company manufactures?

ROWLAND: Well, "Very Cherry" is the number one right now. And "Buttered Popcorn" is right there alongside of it.

SERWER: "Buttered Popcorn"?

ROWLAND: "Buttered Popcorn" you either love or you hate.

CAFFERTY: How do you go about capturing the flavor buttered popcorn in a jelly bean, that must take like scientists and laboratories and all kinds of stuff right?

ROWLAND: Actually, a few of us get around, and we have buttered popcorn and we fix it like we want, with the right amount of butter, the right amount of salt. And we eat that. And then we check the samples that we have made. And it only took us about three runs to hit it. And actually it went to number one for about five or six years. LISOVICZ: OK. So "Buttered Popcorn," big hit. We know you have "Cheesecake," "Champagne Punch" and "Jalapeno," come clean, what didn't fly?

ROWLAND: Well, "Pumpkin Pie" didn't fly...

(LAUGHTER)

ROWLAND: ... because your grandmother, some of them make it sweet, some of them make it with different spices, and "Pumpkin Pie" didn't fly.

SERWER: Hey Herman, I understand a whole ton of people come and visit your company that's out there in Fairfield, California, in the Bay Area, I believe. And you have sort of a visitors center. I saw a mosaic of Ronald Reagan's portrait, that famous picture of him in the cowboy hat that was on the cover of "TIME: magazine, all kinds of stuff like that?

ROWLAND: Yes, we do. We've had a tour at our factory ever since we've been there since '86. We also have a tour back in Pleasant Prairie in our warehouse retail area. We take about 700,000-plus people through our facilities a year.

SERWER: Wow.

ROWLAND: It's a real fun tour and everybody gets a free bag of candy when they...

CAFFERTY: Well, Jack will come.

CAFFERTY: Yes, I'll be there.

SERWER: All right.

CAFFERTY: How many jelly beans do you make in say a week or a month or a year? Do you have any idea? It must be in the jillions, right?

ROWLAND: Well, I don't know -- I'm not quite sure what a jillion is. But...

CAFFERTY: That would be a lot of jelly beans.

ROWLAND: I know what a billion is.

SERWER: He needs to get a bean counter.

ROWLAND: We're about 13 billion beans right now a year.

CAFFERTY: Thirteen billion.

ROWLAND: Right, can you imagine what that is -- I think, let's see, I've been told it's about...

SERWER: Bigger than the deficit. ROWLAND: You put them end to end, it's about seven times around the world.

CAFFERTY: Every year you turn out that many, that's amazing.

ROWLAND: Well, we're increasing every year. So every year it goes up. It used to be, let's say in '80, it was like 1 billion. So we've grown a lot.

CAFFERTY: Yes, you have. And we appreciate your sharing an inside look at your company with us here on IN THE MONEY. Thank you.

ROWLAND: All right, thank you.

CAFFERTY: Herman Rowland, chairman of the Jelly Belly candy company. We're going to kick back now while the advertising industry shows you its chops. That won't take long.

Coming up after the break the box that can keep you glued to your seat by going online. We'll tell you about a brand new twist for TiVo.

Plus act natural. Our "Fun Site of the Week" has some tips on playing a part.

And I can't read mine so we will read instead some of your e- mail. You can tell us what you're thinking by writing to us at inthemoney@cnn.com.

(COMMERCIAL BREAK)

CAFFERTY: The company that made life meaningful for television fans who can't program their VCRs, that would be me, had an eventful week. Webmaster Allen Wastler has the latest on all the happenings at TiVo.

I don't understand a VCR, I'm never going to be able figure out TiVo.

ALLEN WASTLER, MONEY.COM: Well, TiVo is kind of convenient because it's sort of like wired right into your TV set. So you say, oh, I want to watch "The Sopranos" every week, you set it in, and it will automatically do that are for you.

LISOVICZ: Does the work for you.

WASTLER: Yes, and also, if you know how to do it, they don't advertise this feature, but it will whip through the commercials, too, if you want to whip through the commercials, which advertisers don't like.

CAFFERTY: Right, but we don't want you to do that here on CNN. We want you to watch the commercials and then we want to go out and buy the products that are advertised.

WASTLER: Well, this week TiVo went a step further, OK? Already people are mimicking what TiVo provides. Lots of cable companies are coming out with their own sort of recording devices. Other consumer electronics makers are making these deals. So TiVo said, well, we'll go one better. We'll let you have an Internet connection so you can go to the various sites, particularly our own, and download your own movie, your own TV show and get it yourself that way.

Now on one hand, why what a wonderful product, this is great. More added value service. But on the other hand, especially for TiVo, because TiVo works arm and arm with cable companies, satellite companies, broadcast networks, now you're sort of cutting out your business partner, aren't you? Because you're giving the consumer -- hey, you can bypass these clowns and just go directly to your set.

LISOVICZ: Well, the consumers like that.

SERWER: And their subscriber base is still growing, but a lot people are wondering if ultimately they won't be taken out of the picture by the big cable companies.

WASTLER: There are only 1.6 million subscribers. There are still, you know, kind of -- now a lot of those they got through a connection with DirecTV. DirecTV sat on their board and had an investment in the company. This week also DirecTV dumped that. So even more friction for TiVo, it will be interesting to watch.

CAFFERTY: Let's go to the "Fun Site of the Week."

SERWER: Yes!

LISOVICZ: Yes!

SERWER: Yes!

WASTLER: I noticed you were talking about acting and the presidency and stuff earlier.

SERWER: Thespians.

WASTLER: OK. I've got a site where this will help the candidates warm up. OK. It's the zefrank site. He has got an interesting little thing that helps you act to it. Now first of all, let's get your basic sneeze down, OK? It happens to everybody, so you need to act it.

SERWER: This is method acting, method.

WASTLER: And then you go "achoo." And you get the sneeze. Now more apropos for perhaps a political candidate would be the endorsement. You have to go and get your endorsement here, we're watching him, he's grabbing the bottle, takes a drink. Oh, there he goes. So that's the endorsement. Now this one in particular for John Kerry I kind of like, you have got to sort of win over, get more warm. So we have the seduction...

CAFFERTY: Yes, that would be a good idea for him.

WASTLER: Yes. So we have seduction. And there we are showing the seduction type of thing. Oh, what a lovely, lovely guy that is.

SERWER: That's seduction.

WASTLER: Oh, baby. It's doing it for me. And then finally maybe one for George Bush because critics have cast aspersions on his ability to cognitively think through certain subjects, we're got the thinking element here.

CAFFERTY: This is the thinking?

SERWER: That's the thinker, I like that.

WASTLER: There you go.

CAFFERTY: There you go.

WASTLER: A lovely little site. All sorts of...

CAFFERTY: Where do you find it again?

WASTLER: It's zefrank.com You can find the address on our show page.

CAFFERTY: There you go. Thanks, Allen.

WASTLER: Sure.

CAFFERTY: Coming up after the break, time to get to know your fellow viewers. We'll read some of your e-mails from the past week. And if you want to send us something for next week, go tickle the mouse and make it happen. You can e-mail us at inthemoney@cnn.com.

(COMMERCIAL BREAK)

CAFFERTY: It is time now to read your answers to our question about who or what is most responsible for your political leanings.

Kunal (ph) in Minnesota wrote this: "I would have to say my own life experiences, which include watching CNN," good Kunal, that's why your letter got picked, "and other stations, reading newspapers, listening to the radio, I learn more from that than from anyone or anything else."

SERWER: We like that guy.

CAFFERTY: Yes we do. Another viewer wrote this: "None of the above. No matter what, when you're young you want to change the world, so you become a Democrat. When you get older, you realize there's nothing worth changing so you become a Republican."

(LAUGHTER)

CAFFERTY: And in Maryland, James offered this: "My politics mostly are dictated by my wife and her family. If I vote for the Democrats then all is well. If I vote Republican, then I have to sleep on the couch." Now for our e-mail question of this week: "What great American figure deserves to have his or her face put on a U.S. coin or bill besides Andy Serwer?" Send your answers to inthemoney@cnn.com. And you should visit our show page at money.com/inthemoney, that's where you'll find the address for our "Fun Site of the Week." There it is.

Thank you for joining us for this edition of IN THE MONEY. Thanks to CNN correspondent Susan Lisovicz, "Fortune" magazine editor- at-large Andy Serwer and money.com managing editor Allen Wastler.

Join us tomorrow at 3:00 Eastern time. We'll talk about rebuilding Iraq. Even if the political handover goes smoothly, things won't stay peaceful over there if the lights and sewers don't work. We'll find out if a massive new public works program is the answer to helping to resolve the Iraqi conflict. That's tomorrow at 3:00. Hope to see you then.

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

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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