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Human Smugglings Generates Billions A Year In Fees; Wal-Mart's Stock Dips After Judge Grants Class Action Status To Lawsuit;
Aired June 27, 2004 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Hello, I'm Fredricka Whitfield. IN THE MONEY starts right after a check of the top stories.
A U.S. military transport plane becomes the target of militants. One person was killed when small arms fire struck the plane taking off from Baghdad's airport. The incident happens only 3 days now before the handover of power in Iraq.
Saddam Hussein may be handed over to Iraq's new government soon. Iraq's interim prime minister Iyad Allawi says the U.S. will transfer legal custody of Saddam and other Iraqi prisoners as early as next weekend. However, U.S. officials say Saddam will remain in physical custody of U.S. troops.
Diplomacy over dinner. President Bush is in Istanbul, Turkey where he is dining with leaders of NATO ahead of the summit. The president wants NATO support in Iraq. Mr. Bush will also try to bolster U.S. ties with Turkey despite the hostage situation in Iraq.
Nuclear foes India and Pakistan will continue talks tomorrow. The foreign secretaries for both nations met today in New Delhi. Kashmir, which both nations have fought over, was a subject of the talks. Both sides are considering up bus service across the cease- fire line there.
More news in 30 minutes. IN THE MONEY begins right now.
(BEGIN VIDEOTAPE)
ANNOUNCER: From New York City, America's financial capitol, this is IN THE MONEY.
CHRISTINE ROMANS, CNN CORRESPONDENT: Welcome to IN THE MONEY. I'm Christine Romans. Jack Cafferty is out slapping on the sunblock, so I'm sitting in while he's on vacation. Coming up on today's program:
Walls of silence: the scandal at Iraq's Abu Ghraib Prison is raising questions about when interrogation stops and torture starts. We'll try to find the tipping point.
Plus, how to tell a snakehead from a coyote: the underground trade in human beings makes billions of dollars a year. See if it's as deep in the shadows as you think.
And taking sides: Michael Moore's "Fahrenheit 9/11" was a winner at Cannes. Find out why documenterories with a message are doing such big business these days.
Joining me today, "Fortune" magazine editor-at-large, Andy Serwer and Money.com managing editor Allen Wastler.
Well gentlemen, here we are, another weekend to go. And this week, Dick Cheney, Patrick Leahy had a little bit of a frank discussion, exchange of words.
ANDY SERWER, "FORTUNE": A tete-a-tete?
ROMANS: A tete-a-tete.
SERWER: Including a word we can't say on this program.
ROMANS: No, but what that starts with the letter "f," is all we can really say.
ALLEN WASTLER, MONEY.COM: The "f" word.
SERWER: That's it. We're dropping the "f" bomb. Listen VPs are supposed to be feisty, they're supposed to be pit bulls. Finally Dick Cheney's acting like one.
But I wonder seriously, how secure is Dick Cheney? I mean people are really asking that question now, and I don't think he's 100 percent secure. The president has been very proud of not letting too many people go in his administration, not having too many fall guys. We say O'Neill at Treasury, we saw Tenet at the CIA. Will Cheney be around in the next year, four years if the president wins?
WASTLER: Well, regard -- you know, whether he is or isn't, I think that sort of -- it's just boys will be boys. I mean, he scored a victory, right finally this week. And the Democrats have been on him and on him and on him, and would you guys please cut out. And they're there taking a class photo, essentially, of the Senate and he and Leahy just sort of like bumped into each other and they've traded words in the past and so, as you pointed out, the "f" bomb got dropped.
ROMANS: What I love about this story is that when you hear people talking about it, you can tell exactly what they think. They either think that the administration is arrogant -- or they think that the Democrats have spent so much time badgering -- you know, Dick Cheney about something that doesn't deserve to be badgered about and it's hilarious how you can see exactly where people fit on which side of the aisle. I also think, come on, the "f" word is really prevalent in our society. Is it really such a big surprise that the venerable Senate, somebody would say the "f" word?
WASTLER: Against the rules.
SERWER: Well, I wonder if the people on this -- I wonder if it's a partisan thing, too. Yes.
ROMANS: Could be. Could be. Or, yeah. All right. Thanks, guys. What's clearly torture to one person can sound like plain old persuasion to another, especially if that persuasion could save lives in wartime. And lately torture and how it's defined have been grabbing plenty of headline real estate. That, as the Abu Ghraib Prison scandal rolls on.
President Bush this week said, he doesn't condone torture and hasn't ordered it. His comments came as the White House released new documents, proof the administration says, that it had no policy allowing abuse of prisoners.
But, back to the big picture and the big question. What is torture anyway? Dorius Rajali joins us from Reno with a look at that. He's the professor of political science at Reed College and the author of "Torture and Democracy," due out next year.
At Abu Ghraib, was this torture?
DARIUS REJALI, PROF. OF POLITICAL SCIENCE, REED COLLEGE: Well, there were quite a few techniques that were -- forced standing on a box with electric wires attached to you is definitely torture, even the Gestapo used it.
SERWER: Dorius, let me ask you a question, though. We're dealing with people, some of them mass murderers, for instance, involved in 9/11. You're dealing with people who beheaded U.S. citizens. And are we just supposed to sit there and say, come on, could you tell us who you're reporting to and expect them to respond? Do the standards change when the enemy's standards change?
REJALI: Well, it all depends on what you think is at stake on the war on terror. You don't win the war on terror by winning more land or more wealth. What's at stake in the war on terror is our way of life, which these guys want to destroy.
So if you think that it's better to sacrifice our way of life by -- you know, by torturing, which really has devastating effects on your organizations, then you've already lost the battle. The whole point of winning is to win with one hand tied behind our back, otherwise we've already lost the game.
WASTLER: Professor, give me some nuts and bolts here. I'm an interrogator, I have a prisoner and think they got information we need to defend American soil. How far can I go to muscle out the truth from them?
REJALI: The Geneva Convention draws distinctions between three things: humane treatment, ill treatment and torture. So, there are two gray zones.
The first is, if you go from humane treatment to ill treatment, that's when you use excessive force for a legitimate activity. So, for example, if I handcuff you and that's legitimate, but if I handcuff you and then really twist your wrists, that's ill treatment. Now, if I'm talking to you and asking you questions and then I twist the handcuffs and break your wrist, that's torture, you've stepped over the line.
ROMANS: All of this sounds very, very far away from what we saw in the pictures, dogs and, you know the boxes and the handcuffs and then all, of course -- you know, I can't even remember how many injuries that are being investigated, as well. Your book is called "Torture and Democracy," is there a place in democracy for torture?
REJALI: Well, actually, practically all democracies, old, ancient democracies, Greeks and Romans had legalized torture, as did the Italian city states. And we can actually trace the effect of these things once they legalized it.
On the one hand it created, for the Greeks and Romans, a society where some people weren't tortured and then there whole classes, like slaves and lesser citizens, who could legitimately be tortured.
And the second one, the Italian ones, we know that once they gave the executive branch more power to torture, basically the democracy collapsed, as the dictator -- you know, the executive branch went out torturing more and more people, including their opponents. So, neither of them is a really good model. One's for a modern democracy, and one's a dangerous warning of what can happen.
SERWER: Dorius, give me your take, though. I mean, are rules in war -- at war with each other? I mean, isn't that a contradiction in terms? I mean, the Germans used poison gas, that was terrible. We use nuclear weapons, that's OK. I mean, are there any rules? What's your personal opinion?
REJALI: Well, certainly, there are rules. And the -- but here's the bottom line for democracies, we signed on to things like the Geneva Convention, not because we think other people can do nasty things, but because we know, based on what our founding fathers do, that we can do nasty things. I mean, we're self-interested, cynical people, too.
But to have the kind of government consistent that we want to have, then we have to have limited power and so the whole system of checks and balances is critical to as much as we can do it.
And by the way, this stuff really does affect how dictators behave. I mean, one of the things that we see over the last 50 years is, as we've increased monitoring of torture, dictators themselves don't torture using techniques that leave scars. They try to hide the stuff by using drugs or sound or ice or things like this so they can't be caught. Which means that they know that foreign aid and money and all these things have massive consequences if they're caught torturing.
WASTLER: Professor, how often do you think we do nasty things, we as a country go too far? Was Abu Ghraib an aberration or is that sort of par for the course?
REJALI: Well, we've done nasty things before. During the Spanish-American War in 1902 -- you know, Governor Taft actually conceded that we used a nasty form of interrogation from the inquisition called water pumping where you bloat up stomachs for interrogation in the Philippines's, didn't seem to help us much. In Vietnam, 1973 congressional record, there's plenty of evidence that some of these interrogators also used torture.
What's really different about the current situation is it seems like mixed signals were sent down the line as to what or was not possible to do in an interrogation, and we know from social psychology that once you send mixed signals, people will cross the line.
ROMANS: And Dorius, what's also different about it this time, and those other events is that we know about it. It's all over television. It's all over the newspapers. And in this case, you know, the advantage of getting the information that they thought they were getting -- the interrogators thought they were getting, any advantage might be negated by the bad publicity, right?
REJALI: Absolutely. I mean, the thing -- the bottom line is torture's a really great technique if you want to create false confessions, like Stalin for show trials. It's a good technique if you want to intimidate people, like you're -- you know, running through peasants and stuff.
But as a method of gathering intelligence, it really doesn't compare to human intelligence. Ninety percent of what crimes are discovered or cleared come through either public cooperation, witnesses, or informants. And when you torture, you destroy that public trust and, hence, you kind of set up this really nasty cycle where less Iraqis are going to help us.
SERWER: Right. All right, interesting stuff. Dorius Rajali, professor of political science at Reed College, thank you very much for your time.
Up next on IN THE MONEY, give me your tired, your poor, and your cash? Find out what some people will pay for a shot at life in America.
And later on, electric fans: see why Americans get so turned on about sports, especially when times are tough.
Plus, campaign spot with shadows and light. Film has become one of this year's most powerful political weapons as "Fahrenheit 9/11" hits the screen, we'll see what's behind the surge.
(COMMERCIAL BREAK)
SERWER: The business of smuggling illegal aliens into this country and then selling them off to shady employers may be on the rise. Just this week, federal agents found 69 Peruvian aliens who they say were being forced to work for slave wages by a family on Long Island, New York. Thirteen of those immigrants were children and one was a 1-year-old baby.
Joining us now to talk about this trend is Michael Maiello a staff writer at "Forbes" magazine.
Michael, welcome.
MICHAEL MAIELLO, "FORBES": Thank you.
SERWER: Just how big a problem is this?
MAIELLO: Well, I mean, just the industry of smuggling people across borders all around the world is generating fees of $8 billion a year, you know, just to the people who are transporting the people who serve as fixers in the destination countries and find people jobs. Just coming to the U.S., you've got at least $1.3 billion in fees a year, half a billion dollars coming just from the U.S./Mexico border.
ROMANS: Wow.
MAIELLO: So this is huge business. This could be, if it were organized, a very, very large public company.
ROMANS: A very big business. And when you are talking about trying to secure our borders because of terrorism concerns and you just see how porous it really is, it starts to get really scary. What about the businesses, the companies, the legitimate American companies that are working with these handlers, these coyotes, these fixers and giving people jobs? How come the government hasn't gone after these companies and businesses and said, listen, you can't do this?
MAIELLO: Well, I mean, the government has to an extent gone after them and that that's been, of course, the big Wal-Mart case. We had 250 illegal aliens who were working at Wal-Marts in 21 states, I believe. Yes, and the federal government is looking into that.
Of course, what Wal-Mart says is we never employed those people, we signed contracts to have our stores cleaned. The contractors chose who was going to actually do the work as part of the contract.
And what I've been writing on and focusing on are those contractors and those middlemen, because they're making immense profits. You can get a four-person cleaning crew in a Wal-Mart and pay them under the table the total wages are about $84,000 a year. Wal-mart told me that some of their contracts, though, for the larger stores were worth $260,000 a year, so that's quite a profit margin.
WASTLER: Michael, give me -- bring it down to nuts and bolts level. How does it work? OK. I'm over in -- you know, maybe Eastern Europe. How do I make it over here scrubbing floors for Wal-Mart?
ROMANS: And who makes the money along the way?
MAIELLO: Eastern Europe's a very interesting case. What you do is you take out ads in papers, in newspapers in the Czech Republic like alternative papers or mainstream papers "El Announce," (ph) and these advertisements say, come to America and you'll get work at $6 an hour in janitorial services or in restaurants or something.
You call the number on that ad. You usually get a cell phone for someone they call a "travel agent." And this agent is basically in contact with someone here in the United States. What he tells you to do is get a visa any way you can to come visit the U.S., whether it's a tourist visa or student visa -- you know, an easy to get, non-working visa. You come into the country, you call the U.S. contact, they or one of their associates meets you at the airport, they take you to the place you'll be staying, and sometimes within a day, you're at a hotel or at a big retailer or at a restaurant and you're working.
WASTLER: Now that "travel agent" and the contact in the United States, they both get a cut?
MAIELLO: Well, here's what it is you pay your own passage here. But once you get here, the contact in the United States kind of becomes your employer and he is taking a cut of your hourly wages, usually up to $2 an hour.
You might not even know that that's the case. As far as you know, this guy is paying you $5 or $6 in cash for the hours you work, you don't realize that he's taking $2 along the line. He pays a fee to the guy in the Czech Republic who was the initial contact, and then for as long as you're there and working, he's kind of sitting back and living off your wages, which are often spent -- you know, at 12-hour days, seven day a week jobs.
ROMANS: Michael, what's the -- I guess, what's the consensus from the average American about whether or not they care if people are getting in here. Jose Contreras for example, his family gets in this week, by and large, all of the media coverage was very -- oh, it's so great he's going to be able to show his family New York City. Oh by the way, there's this little federal investigation to whether there was any smuggling involved. I mean, you know, it's illegal.
MAIELLO: Right. And there are double standards and some of it has to do with the country of origin in the first place, right, I mean, people tend not to mind so much, people leaving Cuba because Cuba is a very stigmatized country.
ROMANS: Right.
MAIELLO: And, they do tend to mind people coming from the Czech Republic. They do tend to mind people coming from Mexico and that's when you get all the arguments about, they're stealing our jobs and that kind of thing.
So there is a double standard. Fame certainly helps. Yeah, to go way back, Elian Gonzalez's case was not treated like your typical immigrant's case, by either the press or the public at large.
SERWER: Michael is this problem getting bigger and why is that? I mean, there are millions of unemployed people in this country, right?
MAIELLO: Well that's true. It is certainly is getting bigger, though. One reason is, as you alluded to earlier, our border security is tighter now than it is ever been and it's only going to get tighter. And that's becomes simple supply and demand. If it becomes very, very difficult for say, someone to get from Sonora, Mexico to Phoenix, Arizona on their own, they're going to hire help.
With all the increased border patrol, all the increased scrutiny, the people who will help you get across, the people who know the desert, know the Rio Grande very well, their services are now in higher demand. They're making more money at which means more people want to get into it. Basically -- you know, you could argue that our border security itself is subsidizing this underground economy by making it necessary, and that happens -- you know, whenever we pass laws against any sort of lifestyle or social behavior.
ROMANS: Michael Maiello of "Forbes." Thanks so much for joining us.
MAIELLO: Thank you.
ROMANS: And hang out here for a couple of minutes. We'll get right back to you after the break. See if a class action suit is shaking up the stock that couldn't rock. We'll check the action on share of Wal-Mart.
Plus, field goals: we'll look at why Americans get so much pleasure out of watching a bunch of guys throw a ball around.
And big pictures: Michael Moore is just one of the documentaries whose films are suddenly sitting in the limelight, find out why that's happening now.
(COMMERCIAL BREAK)
ROMANS: And now let's take a look at the week's top stories in our "Money Minute." Wachovia agreed to buy Southtrust Corp. in a $14.3 billion stock deal, the merger will create largest bank in the southeast U.S. But not without a price, the company says 4,300 jobs will be cut in 130 to 150 branches eliminated. The government will perhaps sign off on that deal, first.
The feds arrested a 24-year-old software engineer at America Online, charged him with giving AOL's entire subscriber list to a spammer. Prosecutors say Jason Smathers sold the list to a 21-year- old Internet casino operator for $100,000, both men face up to five years in prison.
And despite high gas prices, the travel industry forecasts a busy July 4 holiday weekend on the road. AAA says more than 34 million American motorists plan a road trip over the holiday, that's 3 percent more than last year.
SERWER: America's No. 1 store is facing more legal trouble. This week a federal judge granted class action status to a huge gender discrimination case that could ultimately involve more than 1.5 million women as plaintiffs.
The case was first brought three years ago by six Wal-Mart female employees who say they were denied promotions routinely offered to their male counterparts. Wal-Mart shares took a hit right after the news in what has already been a roller coaster year for the stock, and that makes Wal-Mart (WMT) our stock of the week.
And, you know, when you talk about Wal-Mart, it's the biggest company in the world, the biggest employer, it affects everything. This is a landmark case.
ROMANS: It's absolutely a landmark case. 1.6 million women just start the estimates of backpay at $1 billion, that's just the start. Now this company has $3.8 billion in cash at the end of the most recent quarter, that's a lot of money. But changing the way it does business, you know, having to pay women more and having to have more female managers making more money, that's something that's going to cost indefinitely, not just any kind of settlement or any kind of -- you know, final judgment against it.
WASTLER: And any kind of settlement, if you are just looking at monetary terms -- you know, could range into billions of dollars. I saw one analyst report saying that for every billion that they have to pay in settlement, it will knock 15 cents off the stock price.
ROMANS: I was talking to a lot of mutual fund -- socially responsible mutual fund managers who dumped this stock four, five, six years ago, and this week they're all saying, listen, we told you so. It's not good business to start ticking off the constituents who work for you and now you are seeing the actual fallout in the stock, in the market, of what happens.
SERWER: Right.
WASTLER: But, don't you think we're seeing a little bit of like -- beat up on the big guy a little bit here. I mean, Wal-Mart is so big. It's such a big target.
ROMANS: It costs a lot to be anti-Wal-Mart in California and it's...
WASTLER: Oh yeah, I'm going to beat up on you because you are big and mean, you know.
SERWER: The question is, does Wal-Mart get it? I mean they have changed from being this sort of underground cult company that's grown to be this big -- they're now not just the biggest store in America, they are the biggest company in America. They're the Standard Oil of our time and they need to realize they're going to be a target and they're going to be under a microscope.
I was down in Bentonville, in Fayetteville, Arkansas, at their annual meeting a couple of weeks ago. And a lot of shareholders were unhappy. A lot of employees were very happy (sic), they have tens of thousands of people there. The stock really hasn't done anything over the last couple of years. They've got to get this behind them, they got to realize they're in the spotlight and then the big question for them, they've got to go overseas and take this abroad, as well.
ROMANS: I want to make two points, one, a lot of people say this company has changed so much from when Sam Walton wore a grass skirt on the steps of the New York Stock Exchange... SERWER: Yes.
ROMANS: ...and went out there to entertain. I mean, that would never happen now, you can't even talk to the people who run this company. And second of all, people want cheap stuff and maybe consumers would never boycott this company. Consumers don't care, they want a lot of cheap stuff and that's what Wal-Mart delivers.
SERWER: Yeah, the thing is, are people putting one side together with the other side? Increasingly, I think that's the case.
All right, time for us to pay the rent. We'll be right back after the break. Up next, diamond stars and stripes: see why sports are such a big part of American life and why we like them even more when times are tough.
Plus later, shooting stars: Michael Moore is among the documentary makers putting spin on this year's White House race. Find out why issue movies are getting so much attention.
And get in touch with your inner rocket scientist, please. Check your IQ on our fun site of the week.
(COMMERCIAL BREAK)
WHITFIELD: Hello, I'm Fredricka Whitfield. More of IN THE MONEY after a look at these top stories.
This just in, an explosion a short time ago in the Gaza settlement block of Gushcateeth (ph) wounding a large number of people and emergency services spokesperson said. The blast occurred about 30 minutes ago near a military outpost and appeared to have come either from a car bomb or a tunnel. A settlement spokesman has given us those details. We'll have more on that at the top of the hour.
The violence in Iraq will not let up with Wednesday's handover of power. That prediction from Defense Secretary Donald Rumsfeld today. Among today's militant violence a grenade attack that killed a one U.S. soldier in Baghdad.
Meantime, U.S. Secretary of State Colin Powell is downplaying the call by Iraqi leaders for martial law against insurgents. Powell said that idea had been dampened down.
Michael Moore's "Fahrenheit 9/11" movie is burning up the box office. The film, which blasts President Bush and the war in Iraq, is the top weekend movie taking in an estimated $21.8 million. That's the strongest opening ever for a documentary. Conservatives have called the film propaganda.
All the day's news at the top of the hour on "CNN Live Sunday." Now back to more of IN THE MONEY.
(BEGIN VIDEOTAPE)
SERWER: It's a phrase every hard-luck sports fan hates to hear: it's only a game. And while that may be what your parents would like you to believe, our next guest says professional sports have a much deeper meaning, one that reflects the evolution of American society even.
Michael Mandelbaum is the author of "The Meaning of Sports." He is also a professor of American Foreign Policy at the Johns Hopkins School of Advanced International Studies. And he joins us now.
Michael, baseball is agrarian, football is industrial, basketball is post industrial explain, please.
MICHAEL MANDELBAUM, AUTHOR, "THE MEANING OF SPORTS:" Well, each of these sports is organized in such a way as to evoke one of the three major social and economic periods in American history. Baseball reminds us of the past. It is played without a clock in dirt and grass, just the way people worked for centuries when we all worked on farms. So baseball evokes the traditional agrarian period of our history and it represents the farm.
Football, played by the clock with everybody filling a different role is the industrial sport and it evokes the factory.
Basketball, which has no equipment, where everybody is an individual, but has to cooperate with the other team members, is the post-industrial sport, and it evokes the kind of world in which most of us now work, the world of the office.
That is the reason -- one of the reasons that sports are so important to us. And it's also a reason, as I explain in "The Meaning of Sports," that we have not one, as in most countries, but three major team sports.
CHRISTINE ROMANS, CNN ANCHOR, IN THE MONEY: Forgive me if I sound a little skeptical, but deep meaning in sports is something I never thought I'd be saying. I thought it was just a way for people to sort of abandon the everyday -- everyday life and watch two people sort of fight it out or two teams fight it out. I mean, is it really that philosophical?
MANDELBAUM: Well, sports are a form of entertainment, and entertainment is becoming increasingly important in our society as we become more affluent and have more leisure. But sports offer a particular kind of entertainment that differs from the kind we get from, say, movies and television. Sports, for example, are spontaneous, we don't know the outcome as we do once we've seen a movie.
And that means that every game is infused with the essence of entertainment and drama, namely tension. Sports are also authentic. And that's why they appeal to us in ways that other forms of entertainment don't. After all, John Wayne was not really a war hero, but Barry Bonds really did hit all those home runs in the year when he set the major league record. Authenticity is one reason that the scandals involving the use of performance enhancing drugs are so dangerous for sports, because they threaten this basic appeal. If it turns out that the great athletes have been using these drugs, it will mean that their championship performances were due not to their own will and skill, but due to the ingenuity of their pharmacologist and that will be a real blow to sports fans everywhere.
ALLEN WASTLER, CNN ANCHOR, ON THE MONEY: Now Professor let's get into that a little bit more. I mean, I understand what you are saying about the evolution of sports and where it came from in the period of American history. But now as you mentioned we've got steroid use and that is becoming a problem, we also got the superstar athlete, some say, a highly overpaid athlete out there causing controversy and what not. What does that say about our society today?
MANDELBAUM: Well, it's interesting, as I note in "The Meaning of Sports," despite the fact that there's more and more bad news about the personal off the field lives of star athletes that doesn't really seem to affect the popularity of the sports. And as I say in the book, I believe that the public is able to distinguish between what these athletes do in the games themselves, which are the source of admiration, and what they do outside the games, which really don't matter to us, because we don't really care about their personal lives.
So far, all this bad news has not affected the popularity of sports. And I have a feeling that it won't.
SERWER: I take exception to that a little bit. I think people are getting a little jaundiced perhaps by some of the behavior particularly when it comes to these athletes breaking the law. But leaving that aside, what does the future hold in store? I mean is soccer going to take hold here and become a globalist kind of thing that, you know, would that reflect globalism going on in the world? Tell us what you see in your crystal ball?
MANDELBAUM: Well that is a very good question and I do take it up in "The Meaning of Sports." Soccer and basketball are the two sports with the greatest global appeal. And one reason that soccer hasn't caught on in the United States is that we already have basketball, which is like soccer a ball/goal game. Both of those sports are widely popular, because the rules are easy to understand, because it's easy to see the ball, as it isn't in baseball and football, and because what these athletes give us as performers, is grace.
In baseball, we see hand/eye coordination at work. In football, we see power, but basketball players, like soccer players, are like gigantic ballet dancers. So I think that soccer has a great future -- soccer has a great presence -- great present internationally, but basketball is coming up to challenge it. Soccer and basketball are rivals to become the most popular sport in China.
I'd also say, though, that I think that both baseball and football are likely to be popular for a good long time for many reasons that I detail in the book. But one of them is that over the course of the 20th Century, and this is another theme of "The Meaning of Sports," all sports have been very adaptable. People have managed these sports have made changes, they've sustained their popularity, they've done very well that way.
SERWER: Good. All right, sports as a metaphor. Thanks very much Michael Mandelbaum. He's the author of "The Meaning of Sports." And a professor of American Foreign Policy at the Johns Hopkins School of Advance International Studies. Thanks.
There's more on the way here on IN THE MONEY. Up next, the one- manned bandwagon. Find out how one person with a camera can shake up the political scene as we look at the new surge in image movies.
And, think quickly. Our fun site of the week puts you on the fast track to an IQ score.
(COMMERCIAL BREAK)
SERWER: Planning on cooling your heels in the theater this summer? Choose your films carefully. Some new and upcoming releases are already making temperatures rise. "Fahrenheit 9/11," Michael Moore's highly charged attack on the Bush administration, hit the theaters this weekend. But that's not the only film causing a stir. A rash of new documentaries is turning up the heat on the political landscape.
David Sterritt is a film critic with the Christian Science Monitor and he joins us now with a look. David, a lot of people are talking about this film, wondering how accurate it is. Michael Moore is calling it sort of his op-ed piece page. I think that's probably accurate. My question to you is, do you think this is really going to sway voters, particularly, though?
DAVID STERRITT, FILM CRITIC, CHRISTIAN SCIENCE MONITOR: I've asked a lot of documentary filmmakers over the years whether they think a movie can really change how people think? And they usually say yes, they think so and, yes, they hope so. Michael Moore certainly thinks so.
I once asked him this and he said that "Rodger and Me" changed the way a lot of people thought about corporations. So they are doing what they can. They are filmmakers and they'd like to change minds. I don't think they are really sure they can, but that's their aim.
ROMANS: Is there a real shift here in political documentaries that are starting to become more like mockumentaries or shockumentaries. With quick cuts and some interesting video and a great narration you can pretty much make a case for almost anything. Is this more entertainment and op-ed, as Andy said, than pure documentary?
STERRITT: I wouldn't say entertainment. I mean this movie is about really serious issues and it has a lot of very dark stuff in it. So -- and it's real. So I certainly would not say entertainment. It is sort of an op-ed kind of documentary, yes exactly. Or even a kind of editorial kind of documentary. You can't call it anything but a documentary because, after all, it's a non-fiction movie.
It's documentary in the same sense that books by, you know, Ann Coulter or Michael Moore are going to sell in the nonfiction part of a bookstore. But as you know for the quick cutting and the kind of entertainment techniques they have become almost universal in the movie world, and if you want to have any chance of people coming to see your movie these days and really getting an audience and not making an art film, you've kind of got to go that route.
We're not talking mockumentary. Those are fiction films, that are to made to look like documentaries want, but yes documentaries want to look just as snappy and entertaining and engaging to an audience as regular Hollywood movies do.
WASTLER: David are we seeing this rash of documentary, mockumentaries what ever just because there's an election or is there some sort of cycle here where they get popular and then they die down?
STERRITT: Well I certainly think that there is a kind of a cyclical aspect to this. Last year was entering because it was a great year for documentaries and most of them were highly personal. Things like "Capturing the Freedman's" about a dysfunctional family and other things that were really very personal and deeply felt kind of heart movies.
But the one that won the Oscar last year was "The Fog of War," which was after all a political and historical documentary. Now this year may be "The Fog of War" was kind of paving the way for this. Maybe it's simply the fact that we're in an election year.
I think it's also though the fact that so many of the media are owned by huge conglomerates these days. So many of the media outlets, that people feel if they want to say something that the sort of normal media outlets may not be comfortable with the only way they'll be able to reach out for an audience is by making an independent movie and hoping they can get it into movie theaters. So I think that plays a part in this as well.
SERWER: David, I produced a documentary film on the history of bluegrass music about a decade ago. So I know a little bit about the subject. The king of documentaries up to recently has been Ken Burns who makes those baseball movies and jazz movies. I kind of like this new sub genre if you will. I really think it's revitalizing this type of moviemaking, and people criticized Oliver Stone when he made "JFK." It doesn't have to be real or accurate. It can be someone's opinion as long as it's entertaining, don't you think?
STERRITT: Well, I completely agree with you. Lets say not so much entertaining alone, but also stimulating and thought provoking. I completely agree with you about "JFK" and what Oliver Stone said about that movie was that there are all of these myths about JFK that go in one direction and he was making a counter myth, and I think he did something of the same with his Nixon movie. And now when working with documentaries of course there is a higher standard of truth and yes it is legitimate to attack a filmmaker like Michael Moore or anyone else if they are simply getting their facts wrong or deliberately misleading us.
But the people like Ken Burns and Rick Burns and folks like that do the kind of documentaries that are about more folksy kind of subjects and tend to be on television more. What we've got now is a very large number of independent filmmakers out there who really want to get into the movie theaters and then maybe on TV and into the DVD market. Reach as wide an audience they can in as many different ways as they can and really talk about issues that may push people's buttons and at the very least get people thinking.
ROMANS: David real quickly is we going to see any kinds of documentaries from Ann Coulter or Bill O'Reilly?
(CROSSTALK)
ROMANS: Where are the people on the right?
STERRITT: Yes, it is a good question. Actually these days I think that so much of television and certainly an enormous amount of talk radio is dominated by the right. Another reason why people are making these documentaries is that they feel this is a little bit of a counterbalance and the only way they can get their voice out at all is going to be in the movie theaters and eventually the video market.
SERWER: All right, very informative stuff. David Sterritt, a film critic with the Christian Science Monitor, thank you.
STERRITT: Thank you.
SERWER: There is more to come on IN THE MONEY. Up next, you think you are so smart? Prove it? We tell you about our fun site of the week, and make our producers feel loved, please. Show us the love and drop us an e-mail. Tell us what's on your mind. The address is INTHEMONEY@cnn,com.
(COMMERCIAL BREAK)
SERWER: A number of leading companies are resorting to the kind of trickery that used to be the sole domain of pornographers and shady offshore casinos. It's called Spyware and more mainstream corporations are using it. Much to the chagrin of web surfers. Our Web master Allen Wastler is here to explain that and he has the fun site of the week. Allen --
WASTLER: This is the new spam. OK, the new spam. Now let's say you are there, surfing the net. Oh, they are offering me a screensaver of a beautiful little kitten. I would like to download this. OK, I'll download this screen saver. What's this little thing you popped up and said do I agree, oh, it's so wrong, I can't read all of that. I'll just click yes.
They just got authorization to sort of download into your computer a little piece called Spy ware. A subdivision of that is called Ad ware. And that little residence stays there. It could just be, yes, just an advertiser tracking where you go and lets say you go read an article about cars. It pops up, hey, buy this one. So you get all these pop-ups. It can also go and change your home page. All of a sudden your home page is different. It can add stuff to your favorites list. ROMANS: What can we do?
WASTLER: What can you do? Why the government should do something, right?
SERWER: Yes.
WASTLER: Well, there's some legislation advancing in Congress, but it's beginning to get watered down as it hits the committee level and everything because legitimate advertisers are saying, we got to find some way to reach eyeballs and this is like a great way and it's just contextual advertising.
SERWER: And regulating the Internet is just proving to be for now, an impossibility.
WASTLER: Now Utah passed a law saying, you can't do that. You have to get consent first. But a judge has held it up saying well we're not going to let that take effect until I review the constitutional issue of corporate free speech. Are you defining corporate free speech and what now?
ROMANS: I guess don't consent to something in a box if you haven't read all the junk to consent to it.
SERWER: I click those things all the time and then I get spied on.
ROMANS: You do not?
SERWER: I do.
WASTLER: You can get software that will sort of alert you to it and pull it out.
ROMANS: All right, fun site of the week.
SERWER: Fun site, come on we want some fun.
WASTLER: Fun site, OK.
SERWER: Maybe we don't.
WASTLER: Not smart enough to click the little thing that says download this. Let's see. We found the 12-minute IQ test. Go to this site. Here is the first one, OK. Below are three identical dice in three different positions. Determine what number is on the opposite side of the four.
SERWER: You know I'm going to opt out of this one because I can't really see it.
ROMANS: I need to have an eye test before I do.
WASTLER: I'm going to say three and I haven't seen the answer before hand. SERWER: He went to Johns Hopkins. I'm going to say three.
WASTLER: I'm going to say three. Because if you know dice opposite sides always add up to seven.
SERWER: And opposites attract.
ROMANS: That's not an IQ thing. That's like a gambling thing.
WASTLER: That is part of my knowledge base. Let's look at the next one. Can the word flounder be spelled using letters from the word wonderful?
ROMANS: How long do we have to do it?
WASTLER: It is a 12-minute test, but we are only going to see three of these questions.
SERWER: Yes.
ROMANS: Yes.
WASTLER: The answer is yes.
ROMANS: It can be used, but there's no "w."
SERWER: I though you don't know the answers. You don't have to use all the letters.
ROMANS: Right. Clearly, we are journalists because -
SERWER: But flounder.
ROMANS: But, wait, there's another way to look at that because --
WASTLER: We're not doing so hot here. Ok, let's try the last one here. Lets see how we do on the last one.
SERWER: I am floundering here with these questions.
WASTLER: If the black dot moves counterclockwise one corner per move and the white dot move counterclockwise in three corners per move, how many moves will it take for them to occupy the same corner.
SERWER: Three.
WASTLER: Andy says three.
SERWER: Because that was the same as the first one. It reminded me of the first one. It was the same thing with the dots. The answer is three.
ROMANS: You should have given us the answer first.
SERWER: Those are hard questions. I'm pretty good at capitals. Foreign capitals, state capitals. That's hard. Where is that Web site?
WASTLER: People can find it on our show page. We'll have it right there. You can take all 50 questions in the 12 minutes.
SERWER: I am not book marking that one.
ROMANS: We are so humbled. Thank you very much, Allen Wastler. Back to sixth grade problem solving.
Coming up next on IN THE MONEY. It's time to hear from you as we read some of our e-mails from the past week. And you can send us an e- mail right now to INTHEMONEY@cnn.com.
(COMMERCIAL BREAK)
ROMANS: Now it's time to read your answers to our question about where inflation hurts you most.
John in Vandalia, Illinois wrote - "My medicines now cost me more than $400 a month. So that's where it's getting me. Now I can't visit my grandchildren as often as I'd like. When is the government going to get serious about helping people with fixed incomes?"
Paul in Bakersfield, North Carolina wrote - "All the price increases are hurting me, but the biggest impact right now is from the price of gas. Long term the cost of rising property and sales taxes hurts me even more."
And Sharon in California wrote - "Food prices are hitting me. Bread is over $3 a loaf and meat we paid $3 for a year ago is now $5. I don't know what planet the government is living on when they say there is no inflation. November can't come soon enough for me."
Now it's time for our e-mail question for this week. How will things change for American troops in Iraq after the June 30th handover? Send your answers to INTHEMONEY@cnn.com and you should also visit our show page at Money.com/inthemoney that is where you'll find the address for our fun site of the week.
Thanks for joining us for this edition of IN THE MONEY. I'm Christine Romans. Thanks also to "Fortune" magazine editor at large Andy Serwer. And the Money.com managing editor Allen Wastler. Join us next week when Jack and Susan will be back. IN THE MONEY is on Saturday at 1:00 p.m. Eastern, Sunday at 3:00 p.m. 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
Aired June 27, 2004 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: Hello, I'm Fredricka Whitfield. IN THE MONEY starts right after a check of the top stories.
A U.S. military transport plane becomes the target of militants. One person was killed when small arms fire struck the plane taking off from Baghdad's airport. The incident happens only 3 days now before the handover of power in Iraq.
Saddam Hussein may be handed over to Iraq's new government soon. Iraq's interim prime minister Iyad Allawi says the U.S. will transfer legal custody of Saddam and other Iraqi prisoners as early as next weekend. However, U.S. officials say Saddam will remain in physical custody of U.S. troops.
Diplomacy over dinner. President Bush is in Istanbul, Turkey where he is dining with leaders of NATO ahead of the summit. The president wants NATO support in Iraq. Mr. Bush will also try to bolster U.S. ties with Turkey despite the hostage situation in Iraq.
Nuclear foes India and Pakistan will continue talks tomorrow. The foreign secretaries for both nations met today in New Delhi. Kashmir, which both nations have fought over, was a subject of the talks. Both sides are considering up bus service across the cease- fire line there.
More news in 30 minutes. IN THE MONEY begins right now.
(BEGIN VIDEOTAPE)
ANNOUNCER: From New York City, America's financial capitol, this is IN THE MONEY.
CHRISTINE ROMANS, CNN CORRESPONDENT: Welcome to IN THE MONEY. I'm Christine Romans. Jack Cafferty is out slapping on the sunblock, so I'm sitting in while he's on vacation. Coming up on today's program:
Walls of silence: the scandal at Iraq's Abu Ghraib Prison is raising questions about when interrogation stops and torture starts. We'll try to find the tipping point.
Plus, how to tell a snakehead from a coyote: the underground trade in human beings makes billions of dollars a year. See if it's as deep in the shadows as you think.
And taking sides: Michael Moore's "Fahrenheit 9/11" was a winner at Cannes. Find out why documenterories with a message are doing such big business these days.
Joining me today, "Fortune" magazine editor-at-large, Andy Serwer and Money.com managing editor Allen Wastler.
Well gentlemen, here we are, another weekend to go. And this week, Dick Cheney, Patrick Leahy had a little bit of a frank discussion, exchange of words.
ANDY SERWER, "FORTUNE": A tete-a-tete?
ROMANS: A tete-a-tete.
SERWER: Including a word we can't say on this program.
ROMANS: No, but what that starts with the letter "f," is all we can really say.
ALLEN WASTLER, MONEY.COM: The "f" word.
SERWER: That's it. We're dropping the "f" bomb. Listen VPs are supposed to be feisty, they're supposed to be pit bulls. Finally Dick Cheney's acting like one.
But I wonder seriously, how secure is Dick Cheney? I mean people are really asking that question now, and I don't think he's 100 percent secure. The president has been very proud of not letting too many people go in his administration, not having too many fall guys. We say O'Neill at Treasury, we saw Tenet at the CIA. Will Cheney be around in the next year, four years if the president wins?
WASTLER: Well, regard -- you know, whether he is or isn't, I think that sort of -- it's just boys will be boys. I mean, he scored a victory, right finally this week. And the Democrats have been on him and on him and on him, and would you guys please cut out. And they're there taking a class photo, essentially, of the Senate and he and Leahy just sort of like bumped into each other and they've traded words in the past and so, as you pointed out, the "f" bomb got dropped.
ROMANS: What I love about this story is that when you hear people talking about it, you can tell exactly what they think. They either think that the administration is arrogant -- or they think that the Democrats have spent so much time badgering -- you know, Dick Cheney about something that doesn't deserve to be badgered about and it's hilarious how you can see exactly where people fit on which side of the aisle. I also think, come on, the "f" word is really prevalent in our society. Is it really such a big surprise that the venerable Senate, somebody would say the "f" word?
WASTLER: Against the rules.
SERWER: Well, I wonder if the people on this -- I wonder if it's a partisan thing, too. Yes.
ROMANS: Could be. Could be. Or, yeah. All right. Thanks, guys. What's clearly torture to one person can sound like plain old persuasion to another, especially if that persuasion could save lives in wartime. And lately torture and how it's defined have been grabbing plenty of headline real estate. That, as the Abu Ghraib Prison scandal rolls on.
President Bush this week said, he doesn't condone torture and hasn't ordered it. His comments came as the White House released new documents, proof the administration says, that it had no policy allowing abuse of prisoners.
But, back to the big picture and the big question. What is torture anyway? Dorius Rajali joins us from Reno with a look at that. He's the professor of political science at Reed College and the author of "Torture and Democracy," due out next year.
At Abu Ghraib, was this torture?
DARIUS REJALI, PROF. OF POLITICAL SCIENCE, REED COLLEGE: Well, there were quite a few techniques that were -- forced standing on a box with electric wires attached to you is definitely torture, even the Gestapo used it.
SERWER: Dorius, let me ask you a question, though. We're dealing with people, some of them mass murderers, for instance, involved in 9/11. You're dealing with people who beheaded U.S. citizens. And are we just supposed to sit there and say, come on, could you tell us who you're reporting to and expect them to respond? Do the standards change when the enemy's standards change?
REJALI: Well, it all depends on what you think is at stake on the war on terror. You don't win the war on terror by winning more land or more wealth. What's at stake in the war on terror is our way of life, which these guys want to destroy.
So if you think that it's better to sacrifice our way of life by -- you know, by torturing, which really has devastating effects on your organizations, then you've already lost the battle. The whole point of winning is to win with one hand tied behind our back, otherwise we've already lost the game.
WASTLER: Professor, give me some nuts and bolts here. I'm an interrogator, I have a prisoner and think they got information we need to defend American soil. How far can I go to muscle out the truth from them?
REJALI: The Geneva Convention draws distinctions between three things: humane treatment, ill treatment and torture. So, there are two gray zones.
The first is, if you go from humane treatment to ill treatment, that's when you use excessive force for a legitimate activity. So, for example, if I handcuff you and that's legitimate, but if I handcuff you and then really twist your wrists, that's ill treatment. Now, if I'm talking to you and asking you questions and then I twist the handcuffs and break your wrist, that's torture, you've stepped over the line.
ROMANS: All of this sounds very, very far away from what we saw in the pictures, dogs and, you know the boxes and the handcuffs and then all, of course -- you know, I can't even remember how many injuries that are being investigated, as well. Your book is called "Torture and Democracy," is there a place in democracy for torture?
REJALI: Well, actually, practically all democracies, old, ancient democracies, Greeks and Romans had legalized torture, as did the Italian city states. And we can actually trace the effect of these things once they legalized it.
On the one hand it created, for the Greeks and Romans, a society where some people weren't tortured and then there whole classes, like slaves and lesser citizens, who could legitimately be tortured.
And the second one, the Italian ones, we know that once they gave the executive branch more power to torture, basically the democracy collapsed, as the dictator -- you know, the executive branch went out torturing more and more people, including their opponents. So, neither of them is a really good model. One's for a modern democracy, and one's a dangerous warning of what can happen.
SERWER: Dorius, give me your take, though. I mean, are rules in war -- at war with each other? I mean, isn't that a contradiction in terms? I mean, the Germans used poison gas, that was terrible. We use nuclear weapons, that's OK. I mean, are there any rules? What's your personal opinion?
REJALI: Well, certainly, there are rules. And the -- but here's the bottom line for democracies, we signed on to things like the Geneva Convention, not because we think other people can do nasty things, but because we know, based on what our founding fathers do, that we can do nasty things. I mean, we're self-interested, cynical people, too.
But to have the kind of government consistent that we want to have, then we have to have limited power and so the whole system of checks and balances is critical to as much as we can do it.
And by the way, this stuff really does affect how dictators behave. I mean, one of the things that we see over the last 50 years is, as we've increased monitoring of torture, dictators themselves don't torture using techniques that leave scars. They try to hide the stuff by using drugs or sound or ice or things like this so they can't be caught. Which means that they know that foreign aid and money and all these things have massive consequences if they're caught torturing.
WASTLER: Professor, how often do you think we do nasty things, we as a country go too far? Was Abu Ghraib an aberration or is that sort of par for the course?
REJALI: Well, we've done nasty things before. During the Spanish-American War in 1902 -- you know, Governor Taft actually conceded that we used a nasty form of interrogation from the inquisition called water pumping where you bloat up stomachs for interrogation in the Philippines's, didn't seem to help us much. In Vietnam, 1973 congressional record, there's plenty of evidence that some of these interrogators also used torture.
What's really different about the current situation is it seems like mixed signals were sent down the line as to what or was not possible to do in an interrogation, and we know from social psychology that once you send mixed signals, people will cross the line.
ROMANS: And Dorius, what's also different about it this time, and those other events is that we know about it. It's all over television. It's all over the newspapers. And in this case, you know, the advantage of getting the information that they thought they were getting -- the interrogators thought they were getting, any advantage might be negated by the bad publicity, right?
REJALI: Absolutely. I mean, the thing -- the bottom line is torture's a really great technique if you want to create false confessions, like Stalin for show trials. It's a good technique if you want to intimidate people, like you're -- you know, running through peasants and stuff.
But as a method of gathering intelligence, it really doesn't compare to human intelligence. Ninety percent of what crimes are discovered or cleared come through either public cooperation, witnesses, or informants. And when you torture, you destroy that public trust and, hence, you kind of set up this really nasty cycle where less Iraqis are going to help us.
SERWER: Right. All right, interesting stuff. Dorius Rajali, professor of political science at Reed College, thank you very much for your time.
Up next on IN THE MONEY, give me your tired, your poor, and your cash? Find out what some people will pay for a shot at life in America.
And later on, electric fans: see why Americans get so turned on about sports, especially when times are tough.
Plus, campaign spot with shadows and light. Film has become one of this year's most powerful political weapons as "Fahrenheit 9/11" hits the screen, we'll see what's behind the surge.
(COMMERCIAL BREAK)
SERWER: The business of smuggling illegal aliens into this country and then selling them off to shady employers may be on the rise. Just this week, federal agents found 69 Peruvian aliens who they say were being forced to work for slave wages by a family on Long Island, New York. Thirteen of those immigrants were children and one was a 1-year-old baby.
Joining us now to talk about this trend is Michael Maiello a staff writer at "Forbes" magazine.
Michael, welcome.
MICHAEL MAIELLO, "FORBES": Thank you.
SERWER: Just how big a problem is this?
MAIELLO: Well, I mean, just the industry of smuggling people across borders all around the world is generating fees of $8 billion a year, you know, just to the people who are transporting the people who serve as fixers in the destination countries and find people jobs. Just coming to the U.S., you've got at least $1.3 billion in fees a year, half a billion dollars coming just from the U.S./Mexico border.
ROMANS: Wow.
MAIELLO: So this is huge business. This could be, if it were organized, a very, very large public company.
ROMANS: A very big business. And when you are talking about trying to secure our borders because of terrorism concerns and you just see how porous it really is, it starts to get really scary. What about the businesses, the companies, the legitimate American companies that are working with these handlers, these coyotes, these fixers and giving people jobs? How come the government hasn't gone after these companies and businesses and said, listen, you can't do this?
MAIELLO: Well, I mean, the government has to an extent gone after them and that that's been, of course, the big Wal-Mart case. We had 250 illegal aliens who were working at Wal-Marts in 21 states, I believe. Yes, and the federal government is looking into that.
Of course, what Wal-Mart says is we never employed those people, we signed contracts to have our stores cleaned. The contractors chose who was going to actually do the work as part of the contract.
And what I've been writing on and focusing on are those contractors and those middlemen, because they're making immense profits. You can get a four-person cleaning crew in a Wal-Mart and pay them under the table the total wages are about $84,000 a year. Wal-mart told me that some of their contracts, though, for the larger stores were worth $260,000 a year, so that's quite a profit margin.
WASTLER: Michael, give me -- bring it down to nuts and bolts level. How does it work? OK. I'm over in -- you know, maybe Eastern Europe. How do I make it over here scrubbing floors for Wal-Mart?
ROMANS: And who makes the money along the way?
MAIELLO: Eastern Europe's a very interesting case. What you do is you take out ads in papers, in newspapers in the Czech Republic like alternative papers or mainstream papers "El Announce," (ph) and these advertisements say, come to America and you'll get work at $6 an hour in janitorial services or in restaurants or something.
You call the number on that ad. You usually get a cell phone for someone they call a "travel agent." And this agent is basically in contact with someone here in the United States. What he tells you to do is get a visa any way you can to come visit the U.S., whether it's a tourist visa or student visa -- you know, an easy to get, non-working visa. You come into the country, you call the U.S. contact, they or one of their associates meets you at the airport, they take you to the place you'll be staying, and sometimes within a day, you're at a hotel or at a big retailer or at a restaurant and you're working.
WASTLER: Now that "travel agent" and the contact in the United States, they both get a cut?
MAIELLO: Well, here's what it is you pay your own passage here. But once you get here, the contact in the United States kind of becomes your employer and he is taking a cut of your hourly wages, usually up to $2 an hour.
You might not even know that that's the case. As far as you know, this guy is paying you $5 or $6 in cash for the hours you work, you don't realize that he's taking $2 along the line. He pays a fee to the guy in the Czech Republic who was the initial contact, and then for as long as you're there and working, he's kind of sitting back and living off your wages, which are often spent -- you know, at 12-hour days, seven day a week jobs.
ROMANS: Michael, what's the -- I guess, what's the consensus from the average American about whether or not they care if people are getting in here. Jose Contreras for example, his family gets in this week, by and large, all of the media coverage was very -- oh, it's so great he's going to be able to show his family New York City. Oh by the way, there's this little federal investigation to whether there was any smuggling involved. I mean, you know, it's illegal.
MAIELLO: Right. And there are double standards and some of it has to do with the country of origin in the first place, right, I mean, people tend not to mind so much, people leaving Cuba because Cuba is a very stigmatized country.
ROMANS: Right.
MAIELLO: And, they do tend to mind people coming from the Czech Republic. They do tend to mind people coming from Mexico and that's when you get all the arguments about, they're stealing our jobs and that kind of thing.
So there is a double standard. Fame certainly helps. Yeah, to go way back, Elian Gonzalez's case was not treated like your typical immigrant's case, by either the press or the public at large.
SERWER: Michael is this problem getting bigger and why is that? I mean, there are millions of unemployed people in this country, right?
MAIELLO: Well that's true. It is certainly is getting bigger, though. One reason is, as you alluded to earlier, our border security is tighter now than it is ever been and it's only going to get tighter. And that's becomes simple supply and demand. If it becomes very, very difficult for say, someone to get from Sonora, Mexico to Phoenix, Arizona on their own, they're going to hire help.
With all the increased border patrol, all the increased scrutiny, the people who will help you get across, the people who know the desert, know the Rio Grande very well, their services are now in higher demand. They're making more money at which means more people want to get into it. Basically -- you know, you could argue that our border security itself is subsidizing this underground economy by making it necessary, and that happens -- you know, whenever we pass laws against any sort of lifestyle or social behavior.
ROMANS: Michael Maiello of "Forbes." Thanks so much for joining us.
MAIELLO: Thank you.
ROMANS: And hang out here for a couple of minutes. We'll get right back to you after the break. See if a class action suit is shaking up the stock that couldn't rock. We'll check the action on share of Wal-Mart.
Plus, field goals: we'll look at why Americans get so much pleasure out of watching a bunch of guys throw a ball around.
And big pictures: Michael Moore is just one of the documentaries whose films are suddenly sitting in the limelight, find out why that's happening now.
(COMMERCIAL BREAK)
ROMANS: And now let's take a look at the week's top stories in our "Money Minute." Wachovia agreed to buy Southtrust Corp. in a $14.3 billion stock deal, the merger will create largest bank in the southeast U.S. But not without a price, the company says 4,300 jobs will be cut in 130 to 150 branches eliminated. The government will perhaps sign off on that deal, first.
The feds arrested a 24-year-old software engineer at America Online, charged him with giving AOL's entire subscriber list to a spammer. Prosecutors say Jason Smathers sold the list to a 21-year- old Internet casino operator for $100,000, both men face up to five years in prison.
And despite high gas prices, the travel industry forecasts a busy July 4 holiday weekend on the road. AAA says more than 34 million American motorists plan a road trip over the holiday, that's 3 percent more than last year.
SERWER: America's No. 1 store is facing more legal trouble. This week a federal judge granted class action status to a huge gender discrimination case that could ultimately involve more than 1.5 million women as plaintiffs.
The case was first brought three years ago by six Wal-Mart female employees who say they were denied promotions routinely offered to their male counterparts. Wal-Mart shares took a hit right after the news in what has already been a roller coaster year for the stock, and that makes Wal-Mart (WMT) our stock of the week.
And, you know, when you talk about Wal-Mart, it's the biggest company in the world, the biggest employer, it affects everything. This is a landmark case.
ROMANS: It's absolutely a landmark case. 1.6 million women just start the estimates of backpay at $1 billion, that's just the start. Now this company has $3.8 billion in cash at the end of the most recent quarter, that's a lot of money. But changing the way it does business, you know, having to pay women more and having to have more female managers making more money, that's something that's going to cost indefinitely, not just any kind of settlement or any kind of -- you know, final judgment against it.
WASTLER: And any kind of settlement, if you are just looking at monetary terms -- you know, could range into billions of dollars. I saw one analyst report saying that for every billion that they have to pay in settlement, it will knock 15 cents off the stock price.
ROMANS: I was talking to a lot of mutual fund -- socially responsible mutual fund managers who dumped this stock four, five, six years ago, and this week they're all saying, listen, we told you so. It's not good business to start ticking off the constituents who work for you and now you are seeing the actual fallout in the stock, in the market, of what happens.
SERWER: Right.
WASTLER: But, don't you think we're seeing a little bit of like -- beat up on the big guy a little bit here. I mean, Wal-Mart is so big. It's such a big target.
ROMANS: It costs a lot to be anti-Wal-Mart in California and it's...
WASTLER: Oh yeah, I'm going to beat up on you because you are big and mean, you know.
SERWER: The question is, does Wal-Mart get it? I mean they have changed from being this sort of underground cult company that's grown to be this big -- they're now not just the biggest store in America, they are the biggest company in America. They're the Standard Oil of our time and they need to realize they're going to be a target and they're going to be under a microscope.
I was down in Bentonville, in Fayetteville, Arkansas, at their annual meeting a couple of weeks ago. And a lot of shareholders were unhappy. A lot of employees were very happy (sic), they have tens of thousands of people there. The stock really hasn't done anything over the last couple of years. They've got to get this behind them, they got to realize they're in the spotlight and then the big question for them, they've got to go overseas and take this abroad, as well.
ROMANS: I want to make two points, one, a lot of people say this company has changed so much from when Sam Walton wore a grass skirt on the steps of the New York Stock Exchange... SERWER: Yes.
ROMANS: ...and went out there to entertain. I mean, that would never happen now, you can't even talk to the people who run this company. And second of all, people want cheap stuff and maybe consumers would never boycott this company. Consumers don't care, they want a lot of cheap stuff and that's what Wal-Mart delivers.
SERWER: Yeah, the thing is, are people putting one side together with the other side? Increasingly, I think that's the case.
All right, time for us to pay the rent. We'll be right back after the break. Up next, diamond stars and stripes: see why sports are such a big part of American life and why we like them even more when times are tough.
Plus later, shooting stars: Michael Moore is among the documentary makers putting spin on this year's White House race. Find out why issue movies are getting so much attention.
And get in touch with your inner rocket scientist, please. Check your IQ on our fun site of the week.
(COMMERCIAL BREAK)
WHITFIELD: Hello, I'm Fredricka Whitfield. More of IN THE MONEY after a look at these top stories.
This just in, an explosion a short time ago in the Gaza settlement block of Gushcateeth (ph) wounding a large number of people and emergency services spokesperson said. The blast occurred about 30 minutes ago near a military outpost and appeared to have come either from a car bomb or a tunnel. A settlement spokesman has given us those details. We'll have more on that at the top of the hour.
The violence in Iraq will not let up with Wednesday's handover of power. That prediction from Defense Secretary Donald Rumsfeld today. Among today's militant violence a grenade attack that killed a one U.S. soldier in Baghdad.
Meantime, U.S. Secretary of State Colin Powell is downplaying the call by Iraqi leaders for martial law against insurgents. Powell said that idea had been dampened down.
Michael Moore's "Fahrenheit 9/11" movie is burning up the box office. The film, which blasts President Bush and the war in Iraq, is the top weekend movie taking in an estimated $21.8 million. That's the strongest opening ever for a documentary. Conservatives have called the film propaganda.
All the day's news at the top of the hour on "CNN Live Sunday." Now back to more of IN THE MONEY.
(BEGIN VIDEOTAPE)
SERWER: It's a phrase every hard-luck sports fan hates to hear: it's only a game. And while that may be what your parents would like you to believe, our next guest says professional sports have a much deeper meaning, one that reflects the evolution of American society even.
Michael Mandelbaum is the author of "The Meaning of Sports." He is also a professor of American Foreign Policy at the Johns Hopkins School of Advanced International Studies. And he joins us now.
Michael, baseball is agrarian, football is industrial, basketball is post industrial explain, please.
MICHAEL MANDELBAUM, AUTHOR, "THE MEANING OF SPORTS:" Well, each of these sports is organized in such a way as to evoke one of the three major social and economic periods in American history. Baseball reminds us of the past. It is played without a clock in dirt and grass, just the way people worked for centuries when we all worked on farms. So baseball evokes the traditional agrarian period of our history and it represents the farm.
Football, played by the clock with everybody filling a different role is the industrial sport and it evokes the factory.
Basketball, which has no equipment, where everybody is an individual, but has to cooperate with the other team members, is the post-industrial sport, and it evokes the kind of world in which most of us now work, the world of the office.
That is the reason -- one of the reasons that sports are so important to us. And it's also a reason, as I explain in "The Meaning of Sports," that we have not one, as in most countries, but three major team sports.
CHRISTINE ROMANS, CNN ANCHOR, IN THE MONEY: Forgive me if I sound a little skeptical, but deep meaning in sports is something I never thought I'd be saying. I thought it was just a way for people to sort of abandon the everyday -- everyday life and watch two people sort of fight it out or two teams fight it out. I mean, is it really that philosophical?
MANDELBAUM: Well, sports are a form of entertainment, and entertainment is becoming increasingly important in our society as we become more affluent and have more leisure. But sports offer a particular kind of entertainment that differs from the kind we get from, say, movies and television. Sports, for example, are spontaneous, we don't know the outcome as we do once we've seen a movie.
And that means that every game is infused with the essence of entertainment and drama, namely tension. Sports are also authentic. And that's why they appeal to us in ways that other forms of entertainment don't. After all, John Wayne was not really a war hero, but Barry Bonds really did hit all those home runs in the year when he set the major league record. Authenticity is one reason that the scandals involving the use of performance enhancing drugs are so dangerous for sports, because they threaten this basic appeal. If it turns out that the great athletes have been using these drugs, it will mean that their championship performances were due not to their own will and skill, but due to the ingenuity of their pharmacologist and that will be a real blow to sports fans everywhere.
ALLEN WASTLER, CNN ANCHOR, ON THE MONEY: Now Professor let's get into that a little bit more. I mean, I understand what you are saying about the evolution of sports and where it came from in the period of American history. But now as you mentioned we've got steroid use and that is becoming a problem, we also got the superstar athlete, some say, a highly overpaid athlete out there causing controversy and what not. What does that say about our society today?
MANDELBAUM: Well, it's interesting, as I note in "The Meaning of Sports," despite the fact that there's more and more bad news about the personal off the field lives of star athletes that doesn't really seem to affect the popularity of the sports. And as I say in the book, I believe that the public is able to distinguish between what these athletes do in the games themselves, which are the source of admiration, and what they do outside the games, which really don't matter to us, because we don't really care about their personal lives.
So far, all this bad news has not affected the popularity of sports. And I have a feeling that it won't.
SERWER: I take exception to that a little bit. I think people are getting a little jaundiced perhaps by some of the behavior particularly when it comes to these athletes breaking the law. But leaving that aside, what does the future hold in store? I mean is soccer going to take hold here and become a globalist kind of thing that, you know, would that reflect globalism going on in the world? Tell us what you see in your crystal ball?
MANDELBAUM: Well that is a very good question and I do take it up in "The Meaning of Sports." Soccer and basketball are the two sports with the greatest global appeal. And one reason that soccer hasn't caught on in the United States is that we already have basketball, which is like soccer a ball/goal game. Both of those sports are widely popular, because the rules are easy to understand, because it's easy to see the ball, as it isn't in baseball and football, and because what these athletes give us as performers, is grace.
In baseball, we see hand/eye coordination at work. In football, we see power, but basketball players, like soccer players, are like gigantic ballet dancers. So I think that soccer has a great future -- soccer has a great presence -- great present internationally, but basketball is coming up to challenge it. Soccer and basketball are rivals to become the most popular sport in China.
I'd also say, though, that I think that both baseball and football are likely to be popular for a good long time for many reasons that I detail in the book. But one of them is that over the course of the 20th Century, and this is another theme of "The Meaning of Sports," all sports have been very adaptable. People have managed these sports have made changes, they've sustained their popularity, they've done very well that way.
SERWER: Good. All right, sports as a metaphor. Thanks very much Michael Mandelbaum. He's the author of "The Meaning of Sports." And a professor of American Foreign Policy at the Johns Hopkins School of Advance International Studies. Thanks.
There's more on the way here on IN THE MONEY. Up next, the one- manned bandwagon. Find out how one person with a camera can shake up the political scene as we look at the new surge in image movies.
And, think quickly. Our fun site of the week puts you on the fast track to an IQ score.
(COMMERCIAL BREAK)
SERWER: Planning on cooling your heels in the theater this summer? Choose your films carefully. Some new and upcoming releases are already making temperatures rise. "Fahrenheit 9/11," Michael Moore's highly charged attack on the Bush administration, hit the theaters this weekend. But that's not the only film causing a stir. A rash of new documentaries is turning up the heat on the political landscape.
David Sterritt is a film critic with the Christian Science Monitor and he joins us now with a look. David, a lot of people are talking about this film, wondering how accurate it is. Michael Moore is calling it sort of his op-ed piece page. I think that's probably accurate. My question to you is, do you think this is really going to sway voters, particularly, though?
DAVID STERRITT, FILM CRITIC, CHRISTIAN SCIENCE MONITOR: I've asked a lot of documentary filmmakers over the years whether they think a movie can really change how people think? And they usually say yes, they think so and, yes, they hope so. Michael Moore certainly thinks so.
I once asked him this and he said that "Rodger and Me" changed the way a lot of people thought about corporations. So they are doing what they can. They are filmmakers and they'd like to change minds. I don't think they are really sure they can, but that's their aim.
ROMANS: Is there a real shift here in political documentaries that are starting to become more like mockumentaries or shockumentaries. With quick cuts and some interesting video and a great narration you can pretty much make a case for almost anything. Is this more entertainment and op-ed, as Andy said, than pure documentary?
STERRITT: I wouldn't say entertainment. I mean this movie is about really serious issues and it has a lot of very dark stuff in it. So -- and it's real. So I certainly would not say entertainment. It is sort of an op-ed kind of documentary, yes exactly. Or even a kind of editorial kind of documentary. You can't call it anything but a documentary because, after all, it's a non-fiction movie.
It's documentary in the same sense that books by, you know, Ann Coulter or Michael Moore are going to sell in the nonfiction part of a bookstore. But as you know for the quick cutting and the kind of entertainment techniques they have become almost universal in the movie world, and if you want to have any chance of people coming to see your movie these days and really getting an audience and not making an art film, you've kind of got to go that route.
We're not talking mockumentary. Those are fiction films, that are to made to look like documentaries want, but yes documentaries want to look just as snappy and entertaining and engaging to an audience as regular Hollywood movies do.
WASTLER: David are we seeing this rash of documentary, mockumentaries what ever just because there's an election or is there some sort of cycle here where they get popular and then they die down?
STERRITT: Well I certainly think that there is a kind of a cyclical aspect to this. Last year was entering because it was a great year for documentaries and most of them were highly personal. Things like "Capturing the Freedman's" about a dysfunctional family and other things that were really very personal and deeply felt kind of heart movies.
But the one that won the Oscar last year was "The Fog of War," which was after all a political and historical documentary. Now this year may be "The Fog of War" was kind of paving the way for this. Maybe it's simply the fact that we're in an election year.
I think it's also though the fact that so many of the media are owned by huge conglomerates these days. So many of the media outlets, that people feel if they want to say something that the sort of normal media outlets may not be comfortable with the only way they'll be able to reach out for an audience is by making an independent movie and hoping they can get it into movie theaters. So I think that plays a part in this as well.
SERWER: David, I produced a documentary film on the history of bluegrass music about a decade ago. So I know a little bit about the subject. The king of documentaries up to recently has been Ken Burns who makes those baseball movies and jazz movies. I kind of like this new sub genre if you will. I really think it's revitalizing this type of moviemaking, and people criticized Oliver Stone when he made "JFK." It doesn't have to be real or accurate. It can be someone's opinion as long as it's entertaining, don't you think?
STERRITT: Well, I completely agree with you. Lets say not so much entertaining alone, but also stimulating and thought provoking. I completely agree with you about "JFK" and what Oliver Stone said about that movie was that there are all of these myths about JFK that go in one direction and he was making a counter myth, and I think he did something of the same with his Nixon movie. And now when working with documentaries of course there is a higher standard of truth and yes it is legitimate to attack a filmmaker like Michael Moore or anyone else if they are simply getting their facts wrong or deliberately misleading us.
But the people like Ken Burns and Rick Burns and folks like that do the kind of documentaries that are about more folksy kind of subjects and tend to be on television more. What we've got now is a very large number of independent filmmakers out there who really want to get into the movie theaters and then maybe on TV and into the DVD market. Reach as wide an audience they can in as many different ways as they can and really talk about issues that may push people's buttons and at the very least get people thinking.
ROMANS: David real quickly is we going to see any kinds of documentaries from Ann Coulter or Bill O'Reilly?
(CROSSTALK)
ROMANS: Where are the people on the right?
STERRITT: Yes, it is a good question. Actually these days I think that so much of television and certainly an enormous amount of talk radio is dominated by the right. Another reason why people are making these documentaries is that they feel this is a little bit of a counterbalance and the only way they can get their voice out at all is going to be in the movie theaters and eventually the video market.
SERWER: All right, very informative stuff. David Sterritt, a film critic with the Christian Science Monitor, thank you.
STERRITT: Thank you.
SERWER: There is more to come on IN THE MONEY. Up next, you think you are so smart? Prove it? We tell you about our fun site of the week, and make our producers feel loved, please. Show us the love and drop us an e-mail. Tell us what's on your mind. The address is INTHEMONEY@cnn,com.
(COMMERCIAL BREAK)
SERWER: A number of leading companies are resorting to the kind of trickery that used to be the sole domain of pornographers and shady offshore casinos. It's called Spyware and more mainstream corporations are using it. Much to the chagrin of web surfers. Our Web master Allen Wastler is here to explain that and he has the fun site of the week. Allen --
WASTLER: This is the new spam. OK, the new spam. Now let's say you are there, surfing the net. Oh, they are offering me a screensaver of a beautiful little kitten. I would like to download this. OK, I'll download this screen saver. What's this little thing you popped up and said do I agree, oh, it's so wrong, I can't read all of that. I'll just click yes.
They just got authorization to sort of download into your computer a little piece called Spy ware. A subdivision of that is called Ad ware. And that little residence stays there. It could just be, yes, just an advertiser tracking where you go and lets say you go read an article about cars. It pops up, hey, buy this one. So you get all these pop-ups. It can also go and change your home page. All of a sudden your home page is different. It can add stuff to your favorites list. ROMANS: What can we do?
WASTLER: What can you do? Why the government should do something, right?
SERWER: Yes.
WASTLER: Well, there's some legislation advancing in Congress, but it's beginning to get watered down as it hits the committee level and everything because legitimate advertisers are saying, we got to find some way to reach eyeballs and this is like a great way and it's just contextual advertising.
SERWER: And regulating the Internet is just proving to be for now, an impossibility.
WASTLER: Now Utah passed a law saying, you can't do that. You have to get consent first. But a judge has held it up saying well we're not going to let that take effect until I review the constitutional issue of corporate free speech. Are you defining corporate free speech and what now?
ROMANS: I guess don't consent to something in a box if you haven't read all the junk to consent to it.
SERWER: I click those things all the time and then I get spied on.
ROMANS: You do not?
SERWER: I do.
WASTLER: You can get software that will sort of alert you to it and pull it out.
ROMANS: All right, fun site of the week.
SERWER: Fun site, come on we want some fun.
WASTLER: Fun site, OK.
SERWER: Maybe we don't.
WASTLER: Not smart enough to click the little thing that says download this. Let's see. We found the 12-minute IQ test. Go to this site. Here is the first one, OK. Below are three identical dice in three different positions. Determine what number is on the opposite side of the four.
SERWER: You know I'm going to opt out of this one because I can't really see it.
ROMANS: I need to have an eye test before I do.
WASTLER: I'm going to say three and I haven't seen the answer before hand. SERWER: He went to Johns Hopkins. I'm going to say three.
WASTLER: I'm going to say three. Because if you know dice opposite sides always add up to seven.
SERWER: And opposites attract.
ROMANS: That's not an IQ thing. That's like a gambling thing.
WASTLER: That is part of my knowledge base. Let's look at the next one. Can the word flounder be spelled using letters from the word wonderful?
ROMANS: How long do we have to do it?
WASTLER: It is a 12-minute test, but we are only going to see three of these questions.
SERWER: Yes.
ROMANS: Yes.
WASTLER: The answer is yes.
ROMANS: It can be used, but there's no "w."
SERWER: I though you don't know the answers. You don't have to use all the letters.
ROMANS: Right. Clearly, we are journalists because -
SERWER: But flounder.
ROMANS: But, wait, there's another way to look at that because --
WASTLER: We're not doing so hot here. Ok, let's try the last one here. Lets see how we do on the last one.
SERWER: I am floundering here with these questions.
WASTLER: If the black dot moves counterclockwise one corner per move and the white dot move counterclockwise in three corners per move, how many moves will it take for them to occupy the same corner.
SERWER: Three.
WASTLER: Andy says three.
SERWER: Because that was the same as the first one. It reminded me of the first one. It was the same thing with the dots. The answer is three.
ROMANS: You should have given us the answer first.
SERWER: Those are hard questions. I'm pretty good at capitals. Foreign capitals, state capitals. That's hard. Where is that Web site?
WASTLER: People can find it on our show page. We'll have it right there. You can take all 50 questions in the 12 minutes.
SERWER: I am not book marking that one.
ROMANS: We are so humbled. Thank you very much, Allen Wastler. Back to sixth grade problem solving.
Coming up next on IN THE MONEY. It's time to hear from you as we read some of our e-mails from the past week. And you can send us an e- mail right now to INTHEMONEY@cnn.com.
(COMMERCIAL BREAK)
ROMANS: Now it's time to read your answers to our question about where inflation hurts you most.
John in Vandalia, Illinois wrote - "My medicines now cost me more than $400 a month. So that's where it's getting me. Now I can't visit my grandchildren as often as I'd like. When is the government going to get serious about helping people with fixed incomes?"
Paul in Bakersfield, North Carolina wrote - "All the price increases are hurting me, but the biggest impact right now is from the price of gas. Long term the cost of rising property and sales taxes hurts me even more."
And Sharon in California wrote - "Food prices are hitting me. Bread is over $3 a loaf and meat we paid $3 for a year ago is now $5. I don't know what planet the government is living on when they say there is no inflation. November can't come soon enough for me."
Now it's time for our e-mail question for this week. How will things change for American troops in Iraq after the June 30th handover? Send your answers to INTHEMONEY@cnn.com and you should also visit our show page at Money.com/inthemoney that is where you'll find the address for our fun site of the week.
Thanks for joining us for this edition of IN THE MONEY. I'm Christine Romans. Thanks also to "Fortune" magazine editor at large Andy Serwer. And the Money.com managing editor Allen Wastler. Join us next week when Jack and Susan will be back. IN THE MONEY is on Saturday at 1:00 p.m. Eastern, Sunday at 3:00 p.m. Hope to see you then.
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