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Battle for Falluja Examined; A Look at the Supreme Court

Aired November 13, 2004 - 13:00   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: Top of the hour now in the news. These images just in on what is day six in Falluja. Sources say the battle to secure the city is almost over. U.S. and Iraqi forces reportedly are closing in on any remaining pockets of insurgents. So far officials say at least 1,000 insurgents and 22 U.S. troops have been killed. Falluja General Hospital seized by Iraqi commandos at the beginning of the week is back up and running and convoys of emergency aid have been allowed into parts of the city.
President Bush warns violence in Iraq could escalate ahead of the country's scheduled January elections. In his weekly radio address, the president praised Iraqi security forces for their part in the Falluja offensive and he noted the ruthlessness of the insurgency as evidenced by the discovery of hostage slaughter houses.

It's a somber day in Ramallah west bank where mourners are paying their last respects to former Palestinian authority President Yasser Arafat. New Palestinian authority leader Ahmed Qorei says new leadership elections will be head before January 9th. But he says Israel's military presence in Gaza must be reduced to ensure a free and fair election.

And North Korea is floating the possibility of breaking an international standoff over its nuclear weapons program. The country's foreign ministry says it might come to the table if the U.S. softens its hard line stand against the country's nuclear plans. I'm Fredricka Whitfield at the CNN center in Atlanta. More news at the bottom of the hour. IN THE MONEY begins right now.

JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, U.S. troops have stormed Falluja, but so far they haven't found very much. We'll talk about whether the Pentagon held off the attack because of our presidential election and whether that gave the terrorists time to get away.

Plus, the Supreme Court's lineup likely to change in the next four years and that has some liberals and even moderates worried. We'll talk to famed attorney Alan Dershowitz about whether the fears are valid.

Who needs realism? Animated films like "Shrek 2" and "The Incredibles" are the kings of the box office again this year and they're not just for kids either. We'll talk about what's caused Hollywood's move away from reality. Joining me today a couple of our IN THE MONEY veterans, CNN correspondent Susan Lisovicz and "Fortune" magazine editor at large Andy Serwer.

So Arafat dies and is accorded all the rights and privileges and pomp and circumstance of a head of state while a search goes on for what is estimated to possibly be as much as $5 billion that was never used for the benefit of the Palestinian people but was rather used by Mr. Arafat, nobody seems to know what for. None of his financial advisers and he had about six, has a complete picture of his finances. He only allowed each of them to know a little bit and one has to worry about where that money might be and why so much outpouring of fond emotion for this guy who was not only a terrorist and a murderer but it turns out might be a thief as well.

ANDY SERWER, FORTUNE MAGAZINE: Well, tell us what you really think Jack. In 1994, he was awarded the Nobel peace prize along with Simon Perez and Yitzhak Rabin and I wonder, could they rescind it? Or let me ask another question. Would they give him the Nobel peace prize today and I think the answer is no because he never followed through and he never delivered for the Palestinian people. Obviously, the Palestinians love the guy and you can see that at the outpouring at his funeral. But it's a different matter when you look at it from a global perspective.

SUSAN LISOVICZ, CNN CORRESPONDENT: However history looks at Yasser Arafat, the fact is we are living in the present and this is a critical time. King Abdullah of Jordan wrote a piece in the "New York Times" Friday saying that this is the world's central challenge, getting the Palestinians and the Israelis on the true path to peace. Tony Blair, minutes it seemed after President Bush was certified winning the election, said this is the problem; we have to take care of it and so we have to move on and however Yasser Arafat is judged is one thing. But we have to move on and get this critical situation resolved or at least try to.

CAFFERTY: The experts suggest the window of opportunity isn't going to be open very long either. If they're going to do something they've got to do it right now before somebody besides the executive committee of the PLO seizes control of that whole operation, including the terrorists and the militants.

All right, on to other things. U.S. troops continue their work in Falluja. A lot of military experts though wondering if we waited too long to start attacking the insurgent strong hold. Joining us now with his take on the entire situation there is Lieutenant Colonel Bob Maginnis, who is retired, joins from us Washington, D.C. Colonel, nice to have you with us. Thanks for being on the program.

LT. COL. BOB MAGINNIS (RET), NATIONAL SECURITY ANALYST: Thank you Jack.

CAFFERTY: Is it mission accomplished in Falluja and if so, what was the mission exactly? We keep hearing that the timing of this thing was flawed, possibly because of our elections in this country. And by the time the good guys, our guys got into Falluja, a lot of the bad guys had simply disappeared.

MAGINNIS: You're right Jack. The timing is suspicious. I suspect they'll blame Allawi and his trip to Brussels a week or so ago, but the reality is that we didn't want the flurry of activity that we've seen in Mosul and Baquba, Samarra and elsewhere in Iraq to hit the front pages as the election was about to take place. So that wouldn't have helped the president, so a delay of a week or so isn't bad. Keep in mind, I know a lot of these senior commanders at the very top. They went to the same military schools I did.

They know what Mao Tse-Tung said and that is, as a superior force approaches, a guerrilla force, what do you do? You withdraw. So what did they do? Of course they scattered. And we only closed the cordon the night before we went in there to take the hospital. So it would be the height of lunacy to suggest that we didn't know what we were doing. But we are of course denying them that haven. We're going to install a new government, new security forces. We've got $90 million of reconstruction that's following right behind the Marines as we go in there and so the good news for the Fallujan people perhaps because the 250,000 that fled are going to be able to go back home and they'll get some help reconstructing. But this is long from over.

LISOVICZ: Right and so it seems like it's been going pretty well so far. But this is really just one of many battles that have yet to be fought since the al Zarqawi leadership seems to have melted away, out of Falluja.

MAGINNIS: Well, Zarqawi has always been one to leave the scene before the big guns arrive. He's likely elsewhere in Iraq. His followers are clearly involved. We had significant action this week in Mosul. In fact, the Allawi government saw fit to remove the police chiefs of Mosul and Samarra, which had been installed not all that long ago. They're very concerned about the insurgency growing. Of course Mr. Rumsfeld makes it perfectly clear that he sees this long- term, not short-term, and he's going to follow the same type of strategy that he used in Najaf, Samarra and now in Falluja.

SERWER: Colonel, I really think you could argue that we're pushing sand around a sand box when it comes to chasing the insurgents. Let me ask you about the elections. January's going to be here before we know it. What does the environment look to you?

MAGINNIS: The environment is very tough over there Andy. The reality is that, for instance, working women are being intimidated and threatened and some killed. College professors are being killed, especially women. News anchors that happen to be women are being killed and harassed and told to stay home. So they're suppressing the female vote and of course they're intimidating officials that are throughout that country. So it doesn't, given what I've seen, doesn't look all that bright. Yet we hear from the Pentagon that they're going to proceed with the elections and Mr. Allawi, of course, has staked his political future on those elections in spite of the fact that you have groups like the Iraqi Islamic party, a Sunni party that's withdrawn the Sunni association in Falluja and elsewhere, said we're not going to participate. We're going to boycott and even the old standby, Muqtada al Sadr has said that he and his followers, the Mehdi army, are going to resist as well. So we have some problems we have to resolve and we have only a short period of time. CAFFERTY: This whole thing is just a nightmare over there. Now that President Bush has won a second term, look into the crystal ball for me. How is he going to resolve the U.S. role there in a way that's satisfactory in terms of world opinion and public opinion in this country assuming they get some kind of elections done in January and some kind of government installed. Where does this thing go after that?

MAGINNIS: Jack, the administration's strategy here is of course stand up as many and as quickly Iraqi security forces as possible long-term, because we want Iraqis to take over the battle and the bleeding. At the same time, we want the civilian infrastructure to go in and rebuild all these places. And then of course, we've noted that there hasn't been as much criticism of Falluja because we took great pains up front to preclude civilian casualties and then look as if we negotiated a great deal. So I see that the long-term, the Syrians, the Iranians, the Saudis are kind of sitting back saying, boy he's created a mess over there, don't think he's going to get out of it easily.

Even Mr. Rumsfeld is saying, it's going to be years. Tommy Frank said just the other day that he can see U.S. service members in there for at least three more years. Yes, it is a troubling time. It's not going to be another Afghanistan. The elections will probably take place but will it have all 18 provinces thoroughly involved? Probably not.

LISOVICZ: Colonel, what you're talking about though is obviously long-term. And you know, we do have a coalition of forces. But let's face it, the U.S. is doing all the heavy lifting. Are we bleeding our most precious supplies, our men and women in uniform?

MAGINNIS: In hindsight, the loss of 1,200 about service members, about 900 killed in action, is tragic. But it's a cost that's apparently the administration and so far, based on polling, the American people, are willing to pay. But we're not going to get allies that are going to take on the bleeding edge missions in various places. Tony Blair of course has allowed the black watch to come in southwest of Baghdad and they've taken casualties and the press over there has been pretty critical of Tony Blair for that. But I don't see anybody coming in there.

The Poles, the Bulgarians, they've all said, shortly after the elections, we're going to pull stakes and leave. And so we're going to be stuck working with the Iraqis, trying to resolve these issues. Dave Petraeus, who was the 101st commander up in Mosul who did a pretty good job in my estimation, is now trying to help retrain these people. But this summer we fired 50,000 policemen. So you have all sorts of vetting, retraining, security issues. And meanwhile, some of the neighbors aren't being all that helpful.

CAFFERTY: On that rather optimistic note, I guess we'll let it go. Colonel Robert Maginnis, I appreciate your thoughts and your input. Thank you for joining us from Washington.

MAGINNIS: Thank you Jack. CAFFERTY: Good to have you with us. We're going to step out for a minute. When we come back the following: gavels away, the Supreme Court may look very different in the next few years. Alan Dershowitz joins us to talk about what a more conservative group of justices may have on their agenda.

Plus, banking on a future. Ben Stein takes a look at how too many Americans are not prepared for retirement and what they can do about it.

And live action's dead. Find out why animators and computer wizards are the hottest thing in Hollywood these days and why they may stay that way for years to come. Back after this.

(COMMERCIAL BREAK)

CAFFERTY: President Bush stands to earn an enduring legacy in American politics but not necessarily because of the war on terror or the war in Iraq. He may well wind up being most remembered for crafting major changes to the Supreme Court of the United States. As many as three justices could step down from the high court during the next four years. Legal scholar Alan Dershowitz joins us now to talk about how a more conservative court could drastically change the face of this country. Mr. Dershowitz is the Felix Frankfurter professor of law at Harvard University law school and the author of a new book that's actually out this week, "rights from Wrongs," just published. Mr. Dershowitz, nice to have you back on the program.

ALAN DERSHOWITZ, HARVARD LAW SCHOOL: Thank you so much. I enjoy watching you every morning.

CAFFERTY: You're very kind. Before Mr. Kerry's concession speech was over, there were women here at CNN in our news room that were speaking out loud about their very real concerns for the future of Roe v. Wade under President Bush, particularly if he has access to naming additional justices to the nation's highest court. For want of a better place to start, how concerned should they be?

DERSHOWITZ: I don't think they should be very concerned. The woman's right to choose abortion is very well entrenched in not only American law and American consciousness. The vast majority of Americans support a woman's right to choose abortion. It would be absolutely foolish for this president to be seen as responsible for an extremist retrenchment on the issue of abortion. I don't think that's where the big issue lies. I think the big issue lies in the broader concerns about separation of church and state. Stem cell research, prayer in schools, 10 commandments. The whole issue of whether we are indeed a religious nation, a Christian nation, a Judeo-Christian nation I think will have more of an impact than the specific issue of abortion.

LISOVICZ: And that is really a scary thought when you think about our founding fathers. The separation of church and state is something that we as Americans hold sacred. So if Roe v. Wade do you think does not have a realistic chance of being overturned, even with a newly organized, newly shaped Supreme Court, what is the next big issue that will hit the court?

DERSHOWITZ: Well, by the way, I think the reason Roe versus Wade won't be overruled is it would hurt the Republican Party. Roe versus Wade was a great gift to the Republican Party. It allowed suburban men and women who support a woman's right to choose but who like the Republicans on economic grounds to vote their pocket books and it really marked the death knell of kind of Rockefeller Republicans. Remember, even Bush senior was a pro-choice Republican and because the Supreme Court had taken that issue essentially out of politics for so many years, it gave the Republicans a tremendous advantage and they're not going to give up that advantage.

So I think the big issues are going to be the broader issues of church and state in which Americans are really really divided. Are we a secular nation? Are we a nation in which faith is dominant? Seventy two percent of Americans in a recent poll said they wouldn't vote for a president unless he was a deep man of faith. Most European countries and Canada, they don't understand this, Australia. They don't understand how religion has become such a dominant factor in American life. I think the Supreme Court is going to bring down the wall of separation considerably.

We're going to see the old debates of the 1920s about whether evolution, creationism, is going to be taught, whether the 10 commandments, which people forget about, nobody knows the 10 commandments. They know the 10 bumper stickers. The 10 commandments talks about inflicting the sins of the fathers on the children for three generations. It mentioned slavery twice. It talks about adultery but not rape. These are not guiding principles that should be on public schools in America. Yet I suspect they will soon be on public schools and in courthouses all around America.

SERWER: Alan, let's talk about the makeup of the Supreme Court and President Bush picking new justices. You hear conservatives are elated and liberals are disgruntled and dismayed. But isn't it true we'd simply be replacing conservatives with conservatives in many cases when you're talking about Rehnquist and O'Connor, for instance?

DERSHOWITZ: Not O'Connor. O'Connor has been the key justice, because although she's very conservative, she's a true conservative. She believes in stari decisis. That means she believes in precedent, and because although she doesn't necessarily agree with many of the decisions, she won't overrule Miranda, Roe versus Wade, separation of church and state. What I think we're going to get on the court are conservative activists. We're going to get people in the mode of Scalia and Thomas, who don't believe in stari decisis, or in precedent and will aggressively overrule decisions that they feel were ill founded in the past. So the replacement of O'Connor would be a key decision.

Rehnquist, I agree, although Rehnquist as chief justice has moved a little bit more to the middle on some issues. For example, he didn't want to overrule Miranda, even though he opposed Miranda, so I think we'll see a move toward activism on the right.

CAFFERTY: Beyond the Supreme Court, it's not unexpected that over the next four years the administration will send many, many judicial nominees to the Hill for confirmation. Senator Arlen Specter of Pennsylvania went right off the reservation, despite many visits by high-ranking members of the administration to Pennsylvania before the election, to not only campaign for President Bush but to also try to shore up his chances of being re-elected. Off the reservation, by suggesting as chairman of the Senate Judiciary Committee he may have questions for judicial nominees that come before him who have a certain position, again on Roe v. Wade. He quickly backtracked from that publicly, because probably the phone rang in his office and it was suggested it might be a good idea. But what about all the other judicial nominees that are going to Capitol Hill in the next four years?

DERSHOWITZ: The big question is whether or not the Democrats will use the filibuster. Nobody who loves democracy loves filibusters. It's obviously a minority tactic designed by southern bigots in the racist period of our country to prevent civil rights legislation from being enacted. Now it's being used by liberals. It's not a healthy development.

But remember, the constitution says that the president doesn't get to appoint justices alone. He gets to appoint them with the advice, not only the consent but the advice and consent of the Senate and the Senate does have to play an active role in deciding what the shape of the judiciary is. One of the founders of our country said in an early writing that when the president makes a political choice, it should be resisted on political grounds. A regional choice should be resisted on regional grounds, a religious choice on religious grounds. So the president determines the nature of the debate.

But if he makes partisan choices, then partisan politics will come into being. I wish we could return to the days when Herbert Hoover appointed Cardozo and he was told, how can you appoint him? He's a Democrat. He's Jewish and Hoover said, I'm just looking for the most qualified person in the country. He picked the most qualified person, without regard to ideology, religion, politics. I wish we could return to those days. I think it's a dream that won't happen.

LISOVICZ: It's an ideal that I think a lot of politicians talk about, not always fulfilled. Can you tell us quickly about your new book "Rights from Wrongs." How does this play into the subject at hand, which is the Supreme Court and justices?

DERSHOWITZ: It's a perfect book for the times because it's a secular theory of how rights originate. It's an argument that rights come from wrongs. They don't come from God. They don't come from nature. We recognize wrongs. We recognize the wrongness of sexism, of racism and we build rights based on the wrongs. It's an experience theory of rights. And we're a nation, a pragmatic nation of experience.

We notice that rights, for example, the Geneva accords, followed from the holocaust. And many, many rights followed from the slavery experience prior to the civil war. So my theory is that rights are very -- are human inventions and they come from wrongs and they're a reaction to wrongs and I think in an age when we have great dispute between those who want to see the country move in a more secular direction and in a more religious direction, I propose an alternative to the religious approach to rights.

SERWER: All right, we're going to have to leave it at that. Alan Dershowitz, of course professor from the Harvard Law school, thank you very much for coming back on the program. Author of the new book, "Rights from Wrongs." Thanks very much.

DERSHOWITZ: Thank you very much.

SERWER: Coming up after the break, Rupert Murdoch's Fox empire is hot right now but will his efforts to fight a takeover bid turn the company's stock cold?

Plus which side of the fast food counter will you be on when it comes time to retire? We'll talk to Ben Stein about his crusade to get Americans to save, save, save.

And Susan, haven't we met someplace before? Our fun site of the week takes a look at some of the best and worst pick up lines of all time. Yes indeed.

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at the week's top stories in our money minute. Alan Greenspan and company kept the rate tightening trend going by raising interest rates another quarter point. The strong jobs report last week removed any doubt there would be another hike. The Fed says it's likely to keep raising rates for the foreseeable future.

There was mixed news on the oil front. The recent spike in oil prices seems to have ended as increased production has boosted supplies. World oil production is now at better than 84.5 million barrels a day. But the U.S. government thinks oil prices will remain higher than expected through next year with an expected average price of $47 a barrel.

And former Enron CEO Jeffrey Skilling wants his trial moved out of Houston. Skilling says he can't get a fair trial in the city where Enron collapsed. In a new poll, many Houston residents called Skilling a pig, a crook, and an economic terrorist.

SERWER: All right. Rupert Murdoch's News Corporation is back in the headlines just as the Fox empire looks to reincorporate in the U.S. The big news this week was the apparent creeping takeover bid by Liberty Media. But Liberty founder John Malone says his company's moved to buy more News Corp shares was a friendly move. Murdoch isn't taking any chances as he looks to block any possible takeover with a number of moves. News Corp is our stock of the week. These two guys used to be friends. They've worked together. John Malone and Rupert Murdoch, a couple biggies. Interesting also that point about News Corp incorporating in the United States, was incorporated in Adelaide down in Oz. Rupert Murdoch of course came from Australia. Now the company gets 75 percent of its revenues from the United States. LISOVICZ: I think you always have to be suspicious about an executive who says, we are a large, happy, friendly shareholder. You immediately start to wonder why, when you have two power houses like Rupert Murdoch and John Malone.

CAFFERTY: Well, if there's any question about the friendship, Mr. Murdoch's company was very public about adopting a poison pill defense which was I would think a clear and present signal to those who might want to acquire any more stock.

LISOVICZ: Just another example of a large, happy, friendly family.

CAFFERTY: Of course.

SERWER: Well I think, you know, this company -- Rupert Murdoch sees it as his own fiefdom. He's got the poison pill. He has two classes of stock. You can't take this thing over. He's got his sons running about the empire. They own Harper Collins books, the Fox network here, of course the "New York Post which we all love those headlines they splash out every morning.

LISOVICZ: The headless body, in a topless bar?

SERWER: And things like that. So this is a big company and what I think Rupert Murdoch did very successful is he brought a kind of journalism to the United States we never had before, tabloid, sensationalism, also, let's face it, has a political orientation. A lot of it's brought from Europe and Australia. We never had it. He was very successful. He's a U.S. citizen now. He's a grand pa, he's a dad. He's kind of a character. A lot of people don't like this stuff.

LISOVICZ: And he's here to stay.

SERWER: I think that's true.

CAFFERTY: And talk about the "New York Post," the headlines not only are clever, in some cases quite tasteless as in marking the passing of Yasser Arafat with a front page on Friday of Arafat's widow under a big headline, the Arafat lady sings.

SERWER: Is that clever or tasteless?

CAFFERTY: Both.

SERWER: I kind of thought so. It worked for me.

CAFFERTY: It's great. Susan?

LISOVICZ: Thank you, Jack. Much more to come on IN THE MONEY. The road to a rich retirement and why you're not on it. We'll show you where you made a wrong turn.

Plus, hot ticket. The "Polar Express" is just the latest animated hit to roll through town. Find out why movie-goers young and old are lining up.

And heaven sent. Microsoft is riding the wings of its hot new video release. What (UNINTELLIGIBLE) could mean for X-box sales this holiday season.

(COMMERCIAL BREAK)

WHITFIELD: I'm Fredricka Whitfield. More of IN THE MONEY after a look at the top stories now in the news. These images from Falluja are just now coming in to CNN and an Iraqi official says the operation to retake the city is almost finished. He says U.S. forces control most areas except for small pockets still in the hands of rebels. Top insurgent leaders have apparently fled. Officials add that at least 1,000 insurgents and 22 American troops have died.

CIA Deputy Director John McLaughlin is retiring. McLaughlin took over as acting head of the agency when George Tenet retired in July. The new CIA director, Porter Goss, was confirmed in late September.

A steady stream of mourners are paying respects to the late Palestinian authority President Yasser Arafat. Palestinian officials say elections for a new president will be held before January 9th as required by their constitution.

And two photographers are suing singer Justin Timberlake and actress Cameron Diaz. The paparazzi claim their celebrity couple attacked them outside an LA Hotel. Timberlake and Diaz claim they were ambushed on a dark street and acted in self-defense.

I'll have all the day's news at the top of the hour. Now back to more of IN THE MONEY.

LISOVICZ: It's the ultimate career goal. No, not the corner office, not the corporate jet, but retirement, an early retirement if you can swing it. Let's get real. You probably can't and neither can most Americans. Here to tell us why is economist, author, actor, all- around renaissance man, Ben Stein. He's the chairman of the National Retirement Planning Week which kicks off Monday. Welcome back to the program, Ben.

BEN STEIN, NATL RETIREMENT PLANNING WEEK: Honored to be here.

LISOVICZ: The last time you joined us you told us the U.S. economy is in great shape. Everything's coming up roses. But when it comes to retirement savings, a totally different story.

STEIN: That is the fault of the tens of millions of baby boomers who just haven't been disciplined enough to save enough. I mean the rate of retirement savings by us baby boomers, and I'm at the very, very extreme old edge of the baby boomers, is pathetic. I mean, there are 77 million baby boomers, only something like 8 percent of them have more than $100,000 in savings. The total savings, the average savings are between 50 and $100,000 per family. That's pathetic.

CAFFERTY: How much money do you need to retire, Ben? STEIN: Well, it depends on how much you're living on. If you're living on say X, then you should really have between 15 and 20 times X and that would include, that includes Social Security. Bear in mind, you can only very safely earn between 4 and 5 percent on your money.

CAFFERTY: So in other words, if you're making $100,000 a year, you should have what, between $1.5 million and $2 million set aside? Did I do the math right?

STEIN: Yes. Yes. Yes, unless you have a particularly generous pension. But something like 21 percent of Americans have meaningful pensions. The others have defined payment but not defined benefit plans. This is a real problem. It's a serious problem. Do you know how few people have $1.5 million or $2 million save saved? Very, very, very few. I mean lots of the people you know probably do and lots of the people I know probably do, but overall the number of people who have that much saved is trivial and people are going to need that kind of money.

SERWER: Hey, Ben, I have a serious question. But first of all, I think I saw you in a movie trailer the other day where someone hits you in the head with something and you say ow. What movie is that coming up?

STEIN: That is called "Son of the Mask." It's a sequel to the "Mask" and I have a very, very important part in it.

SERWER: Is the academy listening? It was very funny. I laughed. Hey, listen, what do you think about privatizing Social Security?

STEIN: That's a super good question. The Social Security system is essentially actuarially unsound. It cannot last the way it is. We're either going to have to drastically raise taxes or we're going to have to lower the liabilities of the system. One way to lower the liabilities of the system is to privatize it, say to people, you'll get some of your money from Social Security and some of it from your private savings.

The president has decided that you're going to have to privatize it because the system will not tolerate greatly increased Social Security taxes. So what we're going to have is, you'll take, say, 90 percent of your money, it will stay in Social Security. But you'll get like 10 percent and a steadily growing percentage after that and put it in stocks, bonds, mutual funds. And we will reduce the liabilities of the system. Mr. Gore - wait, not Gore, Kerry. I can't believe I said that. Mr. Kerry said, you're going to blow a hole in Social Security and that is true. You will blow a hole for a few years in Social Security receipts. But you'll drastically lower Social Security liabilities. So that will be a good thing.

LISOVICZ: One of the things perhaps we should take a page from you. That's simply, not retire, keep working. How likelihood is it in your view that the retirement age will be increased again?

STEIN: I'd say the retirement age under Social Security is absolutely certain to be increased.

LISOVICZ: To what?

STEIN: Well, I don't know. I wouldn't be surprised if it were 69 or 70. You have to think to yourself, do you really want to retire? Psychologically, I think it's generally better if you don't retire unless you have a repetitive boring job you hate. You keep your mind and body more active if you don't retire. But people are just not going to be able to retire. Unless they start right now, this is the crucial thing. They've got to start right now. I don't care how old you are, how little you have. You have to start right now saving the stocks, mutual funds, bonds, variable annuities. You've got to start right now. You cannot put it off. You've got to start right now. Can't count on Mr. Bush to do it for you. If it's Hillary Clinton in 2009, you can't count on her to do it for you. You've got to do it yourself. There's no excuse for not doing it yourself.

SERWER: All right. Ben Stein's fired up.

STEIN: Yeah!

SERWER: Listen, thank you for coming on the program and sharing that with us. Ben Stein is the chairman of the National Retirement Planning Coalition, thespian par excellence, renaissance man as Susan said and again, thanks.

LISOVICZ: A regular visitor to IN THE MONEY.

SERWER: Indeed. Lots more to come here on IN THE MONEY. Animania. Moms, dads, children of all ages are flocking to see the season's kids flicks. Find out why you can't always judge a movie by its ratings.

Plus, is it an airport nearby or is that just my heart taking off? From cheesy to just plain lame, pickup lines that may or may not work in our fun site of the week.

(COMMERCIAL BREAK)

SERWER: Just when you thought you were all grown up, there you find yourself in front of the ticket counter torn between that hot new indie film and that feature length cartoon. Don't worry. You're in good company. Films like Pixar's "The Incredibles" have done huge business at the box office with both kids and adults. Our next guest says that's because animation houses like Pixar have raised the bar. Leonard Maltin is a film correspondent for the syndicated magazine show, ENTERTAINMENT TONIGHT. He's also an author and contributor to several publications. Welcome Leonard.

LEONARD MALTIN, ENTERTAINMENT TONIGHT: Thank you. I also wrote a history of animated cartoons.

SERWER: OK, so you know of what you speak. Listen, I saw "The Incredibles" just a couple days ago and I have been raving about it. I wonder if Hollywood can get over itself and nominate this picture for an academy award. I think it should even win.

MALTIN: Well, that's what everybody said a year ago about "Finding Nemo."

SERWER: I think it's better than "Finding Nemo."

MALTIN: There are many many people who said last year and I wouldn't necessarily disagree that "Finding Nemo" was the best film they saw last year. And certainly at the box office, it seemed to reflect that feeling. The problem is that the academy has now created a special category for animated films. They never had one. They never had one until 10 years ago when this same thing happened and "Beauty and the Beast" became the first animated feature ever nominated for best picture. And when that happened and it happened in a year that wasn't so hot, so the competition was slack. It was the right timing. It was a movie people liked and they nominated it. And I think a lot of academy members felt, well, but you know, this is not supposed to be mixing up that way. We're making live action films here. There should be a separate category for animation. Now that they've done that, I think they feel that's where that film belongs.

LISOVICZ: All right. So Leonard, we also have the "Polar Express" coming out this weekend based on the favorite children's story. Do you think that this is really a renaissance of animation? Or is it just all this new technology and Hollywood wants to show off all the bells and whistles?

MALTIN: Well, in the case of "Polar Express," it's really not an attempt to do animation. It is a technology-based film trying to capture the look of Chris Van Allsburg's book which so many people love and so many families know and cherish. Bob Zemeckis has always been cutting...

(INTERRUPTED FOR CNN BREAKING NEWS)

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FREDRICKA WHITFIELD, CNN ANCHOR: Top of the hour now in the news. These images just in on what is day six in Falluja. Sources say the battle to secure the city is almost over. U.S. and Iraqi forces reportedly are closing in on any remaining pockets of insurgents. So far officials say at least 1,000 insurgents and 22 U.S. troops have been killed. Falluja General Hospital seized by Iraqi commandos at the beginning of the week is back up and running and convoys of emergency aid have been allowed into parts of the city.
President Bush warns violence in Iraq could escalate ahead of the country's scheduled January elections. In his weekly radio address, the president praised Iraqi security forces for their part in the Falluja offensive and he noted the ruthlessness of the insurgency as evidenced by the discovery of hostage slaughter houses.

It's a somber day in Ramallah west bank where mourners are paying their last respects to former Palestinian authority President Yasser Arafat. New Palestinian authority leader Ahmed Qorei says new leadership elections will be head before January 9th. But he says Israel's military presence in Gaza must be reduced to ensure a free and fair election.

And North Korea is floating the possibility of breaking an international standoff over its nuclear weapons program. The country's foreign ministry says it might come to the table if the U.S. softens its hard line stand against the country's nuclear plans. I'm Fredricka Whitfield at the CNN center in Atlanta. More news at the bottom of the hour. IN THE MONEY begins right now.

JACK CAFFERTY, CNN ANCHOR, IN THE MONEY: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, U.S. troops have stormed Falluja, but so far they haven't found very much. We'll talk about whether the Pentagon held off the attack because of our presidential election and whether that gave the terrorists time to get away.

Plus, the Supreme Court's lineup likely to change in the next four years and that has some liberals and even moderates worried. We'll talk to famed attorney Alan Dershowitz about whether the fears are valid.

Who needs realism? Animated films like "Shrek 2" and "The Incredibles" are the kings of the box office again this year and they're not just for kids either. We'll talk about what's caused Hollywood's move away from reality. Joining me today a couple of our IN THE MONEY veterans, CNN correspondent Susan Lisovicz and "Fortune" magazine editor at large Andy Serwer.

So Arafat dies and is accorded all the rights and privileges and pomp and circumstance of a head of state while a search goes on for what is estimated to possibly be as much as $5 billion that was never used for the benefit of the Palestinian people but was rather used by Mr. Arafat, nobody seems to know what for. None of his financial advisers and he had about six, has a complete picture of his finances. He only allowed each of them to know a little bit and one has to worry about where that money might be and why so much outpouring of fond emotion for this guy who was not only a terrorist and a murderer but it turns out might be a thief as well.

ANDY SERWER, FORTUNE MAGAZINE: Well, tell us what you really think Jack. In 1994, he was awarded the Nobel peace prize along with Simon Perez and Yitzhak Rabin and I wonder, could they rescind it? Or let me ask another question. Would they give him the Nobel peace prize today and I think the answer is no because he never followed through and he never delivered for the Palestinian people. Obviously, the Palestinians love the guy and you can see that at the outpouring at his funeral. But it's a different matter when you look at it from a global perspective.

SUSAN LISOVICZ, CNN CORRESPONDENT: However history looks at Yasser Arafat, the fact is we are living in the present and this is a critical time. King Abdullah of Jordan wrote a piece in the "New York Times" Friday saying that this is the world's central challenge, getting the Palestinians and the Israelis on the true path to peace. Tony Blair, minutes it seemed after President Bush was certified winning the election, said this is the problem; we have to take care of it and so we have to move on and however Yasser Arafat is judged is one thing. But we have to move on and get this critical situation resolved or at least try to.

CAFFERTY: The experts suggest the window of opportunity isn't going to be open very long either. If they're going to do something they've got to do it right now before somebody besides the executive committee of the PLO seizes control of that whole operation, including the terrorists and the militants.

All right, on to other things. U.S. troops continue their work in Falluja. A lot of military experts though wondering if we waited too long to start attacking the insurgent strong hold. Joining us now with his take on the entire situation there is Lieutenant Colonel Bob Maginnis, who is retired, joins from us Washington, D.C. Colonel, nice to have you with us. Thanks for being on the program.

LT. COL. BOB MAGINNIS (RET), NATIONAL SECURITY ANALYST: Thank you Jack.

CAFFERTY: Is it mission accomplished in Falluja and if so, what was the mission exactly? We keep hearing that the timing of this thing was flawed, possibly because of our elections in this country. And by the time the good guys, our guys got into Falluja, a lot of the bad guys had simply disappeared.

MAGINNIS: You're right Jack. The timing is suspicious. I suspect they'll blame Allawi and his trip to Brussels a week or so ago, but the reality is that we didn't want the flurry of activity that we've seen in Mosul and Baquba, Samarra and elsewhere in Iraq to hit the front pages as the election was about to take place. So that wouldn't have helped the president, so a delay of a week or so isn't bad. Keep in mind, I know a lot of these senior commanders at the very top. They went to the same military schools I did.

They know what Mao Tse-Tung said and that is, as a superior force approaches, a guerrilla force, what do you do? You withdraw. So what did they do? Of course they scattered. And we only closed the cordon the night before we went in there to take the hospital. So it would be the height of lunacy to suggest that we didn't know what we were doing. But we are of course denying them that haven. We're going to install a new government, new security forces. We've got $90 million of reconstruction that's following right behind the Marines as we go in there and so the good news for the Fallujan people perhaps because the 250,000 that fled are going to be able to go back home and they'll get some help reconstructing. But this is long from over.

LISOVICZ: Right and so it seems like it's been going pretty well so far. But this is really just one of many battles that have yet to be fought since the al Zarqawi leadership seems to have melted away, out of Falluja.

MAGINNIS: Well, Zarqawi has always been one to leave the scene before the big guns arrive. He's likely elsewhere in Iraq. His followers are clearly involved. We had significant action this week in Mosul. In fact, the Allawi government saw fit to remove the police chiefs of Mosul and Samarra, which had been installed not all that long ago. They're very concerned about the insurgency growing. Of course Mr. Rumsfeld makes it perfectly clear that he sees this long- term, not short-term, and he's going to follow the same type of strategy that he used in Najaf, Samarra and now in Falluja.

SERWER: Colonel, I really think you could argue that we're pushing sand around a sand box when it comes to chasing the insurgents. Let me ask you about the elections. January's going to be here before we know it. What does the environment look to you?

MAGINNIS: The environment is very tough over there Andy. The reality is that, for instance, working women are being intimidated and threatened and some killed. College professors are being killed, especially women. News anchors that happen to be women are being killed and harassed and told to stay home. So they're suppressing the female vote and of course they're intimidating officials that are throughout that country. So it doesn't, given what I've seen, doesn't look all that bright. Yet we hear from the Pentagon that they're going to proceed with the elections and Mr. Allawi, of course, has staked his political future on those elections in spite of the fact that you have groups like the Iraqi Islamic party, a Sunni party that's withdrawn the Sunni association in Falluja and elsewhere, said we're not going to participate. We're going to boycott and even the old standby, Muqtada al Sadr has said that he and his followers, the Mehdi army, are going to resist as well. So we have some problems we have to resolve and we have only a short period of time. CAFFERTY: This whole thing is just a nightmare over there. Now that President Bush has won a second term, look into the crystal ball for me. How is he going to resolve the U.S. role there in a way that's satisfactory in terms of world opinion and public opinion in this country assuming they get some kind of elections done in January and some kind of government installed. Where does this thing go after that?

MAGINNIS: Jack, the administration's strategy here is of course stand up as many and as quickly Iraqi security forces as possible long-term, because we want Iraqis to take over the battle and the bleeding. At the same time, we want the civilian infrastructure to go in and rebuild all these places. And then of course, we've noted that there hasn't been as much criticism of Falluja because we took great pains up front to preclude civilian casualties and then look as if we negotiated a great deal. So I see that the long-term, the Syrians, the Iranians, the Saudis are kind of sitting back saying, boy he's created a mess over there, don't think he's going to get out of it easily.

Even Mr. Rumsfeld is saying, it's going to be years. Tommy Frank said just the other day that he can see U.S. service members in there for at least three more years. Yes, it is a troubling time. It's not going to be another Afghanistan. The elections will probably take place but will it have all 18 provinces thoroughly involved? Probably not.

LISOVICZ: Colonel, what you're talking about though is obviously long-term. And you know, we do have a coalition of forces. But let's face it, the U.S. is doing all the heavy lifting. Are we bleeding our most precious supplies, our men and women in uniform?

MAGINNIS: In hindsight, the loss of 1,200 about service members, about 900 killed in action, is tragic. But it's a cost that's apparently the administration and so far, based on polling, the American people, are willing to pay. But we're not going to get allies that are going to take on the bleeding edge missions in various places. Tony Blair of course has allowed the black watch to come in southwest of Baghdad and they've taken casualties and the press over there has been pretty critical of Tony Blair for that. But I don't see anybody coming in there.

The Poles, the Bulgarians, they've all said, shortly after the elections, we're going to pull stakes and leave. And so we're going to be stuck working with the Iraqis, trying to resolve these issues. Dave Petraeus, who was the 101st commander up in Mosul who did a pretty good job in my estimation, is now trying to help retrain these people. But this summer we fired 50,000 policemen. So you have all sorts of vetting, retraining, security issues. And meanwhile, some of the neighbors aren't being all that helpful.

CAFFERTY: On that rather optimistic note, I guess we'll let it go. Colonel Robert Maginnis, I appreciate your thoughts and your input. Thank you for joining us from Washington.

MAGINNIS: Thank you Jack. CAFFERTY: Good to have you with us. We're going to step out for a minute. When we come back the following: gavels away, the Supreme Court may look very different in the next few years. Alan Dershowitz joins us to talk about what a more conservative group of justices may have on their agenda.

Plus, banking on a future. Ben Stein takes a look at how too many Americans are not prepared for retirement and what they can do about it.

And live action's dead. Find out why animators and computer wizards are the hottest thing in Hollywood these days and why they may stay that way for years to come. Back after this.

(COMMERCIAL BREAK)

CAFFERTY: President Bush stands to earn an enduring legacy in American politics but not necessarily because of the war on terror or the war in Iraq. He may well wind up being most remembered for crafting major changes to the Supreme Court of the United States. As many as three justices could step down from the high court during the next four years. Legal scholar Alan Dershowitz joins us now to talk about how a more conservative court could drastically change the face of this country. Mr. Dershowitz is the Felix Frankfurter professor of law at Harvard University law school and the author of a new book that's actually out this week, "rights from Wrongs," just published. Mr. Dershowitz, nice to have you back on the program.

ALAN DERSHOWITZ, HARVARD LAW SCHOOL: Thank you so much. I enjoy watching you every morning.

CAFFERTY: You're very kind. Before Mr. Kerry's concession speech was over, there were women here at CNN in our news room that were speaking out loud about their very real concerns for the future of Roe v. Wade under President Bush, particularly if he has access to naming additional justices to the nation's highest court. For want of a better place to start, how concerned should they be?

DERSHOWITZ: I don't think they should be very concerned. The woman's right to choose abortion is very well entrenched in not only American law and American consciousness. The vast majority of Americans support a woman's right to choose abortion. It would be absolutely foolish for this president to be seen as responsible for an extremist retrenchment on the issue of abortion. I don't think that's where the big issue lies. I think the big issue lies in the broader concerns about separation of church and state. Stem cell research, prayer in schools, 10 commandments. The whole issue of whether we are indeed a religious nation, a Christian nation, a Judeo-Christian nation I think will have more of an impact than the specific issue of abortion.

LISOVICZ: And that is really a scary thought when you think about our founding fathers. The separation of church and state is something that we as Americans hold sacred. So if Roe v. Wade do you think does not have a realistic chance of being overturned, even with a newly organized, newly shaped Supreme Court, what is the next big issue that will hit the court?

DERSHOWITZ: Well, by the way, I think the reason Roe versus Wade won't be overruled is it would hurt the Republican Party. Roe versus Wade was a great gift to the Republican Party. It allowed suburban men and women who support a woman's right to choose but who like the Republicans on economic grounds to vote their pocket books and it really marked the death knell of kind of Rockefeller Republicans. Remember, even Bush senior was a pro-choice Republican and because the Supreme Court had taken that issue essentially out of politics for so many years, it gave the Republicans a tremendous advantage and they're not going to give up that advantage.

So I think the big issues are going to be the broader issues of church and state in which Americans are really really divided. Are we a secular nation? Are we a nation in which faith is dominant? Seventy two percent of Americans in a recent poll said they wouldn't vote for a president unless he was a deep man of faith. Most European countries and Canada, they don't understand this, Australia. They don't understand how religion has become such a dominant factor in American life. I think the Supreme Court is going to bring down the wall of separation considerably.

We're going to see the old debates of the 1920s about whether evolution, creationism, is going to be taught, whether the 10 commandments, which people forget about, nobody knows the 10 commandments. They know the 10 bumper stickers. The 10 commandments talks about inflicting the sins of the fathers on the children for three generations. It mentioned slavery twice. It talks about adultery but not rape. These are not guiding principles that should be on public schools in America. Yet I suspect they will soon be on public schools and in courthouses all around America.

SERWER: Alan, let's talk about the makeup of the Supreme Court and President Bush picking new justices. You hear conservatives are elated and liberals are disgruntled and dismayed. But isn't it true we'd simply be replacing conservatives with conservatives in many cases when you're talking about Rehnquist and O'Connor, for instance?

DERSHOWITZ: Not O'Connor. O'Connor has been the key justice, because although she's very conservative, she's a true conservative. She believes in stari decisis. That means she believes in precedent, and because although she doesn't necessarily agree with many of the decisions, she won't overrule Miranda, Roe versus Wade, separation of church and state. What I think we're going to get on the court are conservative activists. We're going to get people in the mode of Scalia and Thomas, who don't believe in stari decisis, or in precedent and will aggressively overrule decisions that they feel were ill founded in the past. So the replacement of O'Connor would be a key decision.

Rehnquist, I agree, although Rehnquist as chief justice has moved a little bit more to the middle on some issues. For example, he didn't want to overrule Miranda, even though he opposed Miranda, so I think we'll see a move toward activism on the right.

CAFFERTY: Beyond the Supreme Court, it's not unexpected that over the next four years the administration will send many, many judicial nominees to the Hill for confirmation. Senator Arlen Specter of Pennsylvania went right off the reservation, despite many visits by high-ranking members of the administration to Pennsylvania before the election, to not only campaign for President Bush but to also try to shore up his chances of being re-elected. Off the reservation, by suggesting as chairman of the Senate Judiciary Committee he may have questions for judicial nominees that come before him who have a certain position, again on Roe v. Wade. He quickly backtracked from that publicly, because probably the phone rang in his office and it was suggested it might be a good idea. But what about all the other judicial nominees that are going to Capitol Hill in the next four years?

DERSHOWITZ: The big question is whether or not the Democrats will use the filibuster. Nobody who loves democracy loves filibusters. It's obviously a minority tactic designed by southern bigots in the racist period of our country to prevent civil rights legislation from being enacted. Now it's being used by liberals. It's not a healthy development.

But remember, the constitution says that the president doesn't get to appoint justices alone. He gets to appoint them with the advice, not only the consent but the advice and consent of the Senate and the Senate does have to play an active role in deciding what the shape of the judiciary is. One of the founders of our country said in an early writing that when the president makes a political choice, it should be resisted on political grounds. A regional choice should be resisted on regional grounds, a religious choice on religious grounds. So the president determines the nature of the debate.

But if he makes partisan choices, then partisan politics will come into being. I wish we could return to the days when Herbert Hoover appointed Cardozo and he was told, how can you appoint him? He's a Democrat. He's Jewish and Hoover said, I'm just looking for the most qualified person in the country. He picked the most qualified person, without regard to ideology, religion, politics. I wish we could return to those days. I think it's a dream that won't happen.

LISOVICZ: It's an ideal that I think a lot of politicians talk about, not always fulfilled. Can you tell us quickly about your new book "Rights from Wrongs." How does this play into the subject at hand, which is the Supreme Court and justices?

DERSHOWITZ: It's a perfect book for the times because it's a secular theory of how rights originate. It's an argument that rights come from wrongs. They don't come from God. They don't come from nature. We recognize wrongs. We recognize the wrongness of sexism, of racism and we build rights based on the wrongs. It's an experience theory of rights. And we're a nation, a pragmatic nation of experience.

We notice that rights, for example, the Geneva accords, followed from the holocaust. And many, many rights followed from the slavery experience prior to the civil war. So my theory is that rights are very -- are human inventions and they come from wrongs and they're a reaction to wrongs and I think in an age when we have great dispute between those who want to see the country move in a more secular direction and in a more religious direction, I propose an alternative to the religious approach to rights.

SERWER: All right, we're going to have to leave it at that. Alan Dershowitz, of course professor from the Harvard Law school, thank you very much for coming back on the program. Author of the new book, "Rights from Wrongs." Thanks very much.

DERSHOWITZ: Thank you very much.

SERWER: Coming up after the break, Rupert Murdoch's Fox empire is hot right now but will his efforts to fight a takeover bid turn the company's stock cold?

Plus which side of the fast food counter will you be on when it comes time to retire? We'll talk to Ben Stein about his crusade to get Americans to save, save, save.

And Susan, haven't we met someplace before? Our fun site of the week takes a look at some of the best and worst pick up lines of all time. Yes indeed.

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at the week's top stories in our money minute. Alan Greenspan and company kept the rate tightening trend going by raising interest rates another quarter point. The strong jobs report last week removed any doubt there would be another hike. The Fed says it's likely to keep raising rates for the foreseeable future.

There was mixed news on the oil front. The recent spike in oil prices seems to have ended as increased production has boosted supplies. World oil production is now at better than 84.5 million barrels a day. But the U.S. government thinks oil prices will remain higher than expected through next year with an expected average price of $47 a barrel.

And former Enron CEO Jeffrey Skilling wants his trial moved out of Houston. Skilling says he can't get a fair trial in the city where Enron collapsed. In a new poll, many Houston residents called Skilling a pig, a crook, and an economic terrorist.

SERWER: All right. Rupert Murdoch's News Corporation is back in the headlines just as the Fox empire looks to reincorporate in the U.S. The big news this week was the apparent creeping takeover bid by Liberty Media. But Liberty founder John Malone says his company's moved to buy more News Corp shares was a friendly move. Murdoch isn't taking any chances as he looks to block any possible takeover with a number of moves. News Corp is our stock of the week. These two guys used to be friends. They've worked together. John Malone and Rupert Murdoch, a couple biggies. Interesting also that point about News Corp incorporating in the United States, was incorporated in Adelaide down in Oz. Rupert Murdoch of course came from Australia. Now the company gets 75 percent of its revenues from the United States. LISOVICZ: I think you always have to be suspicious about an executive who says, we are a large, happy, friendly shareholder. You immediately start to wonder why, when you have two power houses like Rupert Murdoch and John Malone.

CAFFERTY: Well, if there's any question about the friendship, Mr. Murdoch's company was very public about adopting a poison pill defense which was I would think a clear and present signal to those who might want to acquire any more stock.

LISOVICZ: Just another example of a large, happy, friendly family.

CAFFERTY: Of course.

SERWER: Well I think, you know, this company -- Rupert Murdoch sees it as his own fiefdom. He's got the poison pill. He has two classes of stock. You can't take this thing over. He's got his sons running about the empire. They own Harper Collins books, the Fox network here, of course the "New York Post which we all love those headlines they splash out every morning.

LISOVICZ: The headless body, in a topless bar?

SERWER: And things like that. So this is a big company and what I think Rupert Murdoch did very successful is he brought a kind of journalism to the United States we never had before, tabloid, sensationalism, also, let's face it, has a political orientation. A lot of it's brought from Europe and Australia. We never had it. He was very successful. He's a U.S. citizen now. He's a grand pa, he's a dad. He's kind of a character. A lot of people don't like this stuff.

LISOVICZ: And he's here to stay.

SERWER: I think that's true.

CAFFERTY: And talk about the "New York Post," the headlines not only are clever, in some cases quite tasteless as in marking the passing of Yasser Arafat with a front page on Friday of Arafat's widow under a big headline, the Arafat lady sings.

SERWER: Is that clever or tasteless?

CAFFERTY: Both.

SERWER: I kind of thought so. It worked for me.

CAFFERTY: It's great. Susan?

LISOVICZ: Thank you, Jack. Much more to come on IN THE MONEY. The road to a rich retirement and why you're not on it. We'll show you where you made a wrong turn.

Plus, hot ticket. The "Polar Express" is just the latest animated hit to roll through town. Find out why movie-goers young and old are lining up.

And heaven sent. Microsoft is riding the wings of its hot new video release. What (UNINTELLIGIBLE) could mean for X-box sales this holiday season.

(COMMERCIAL BREAK)

WHITFIELD: I'm Fredricka Whitfield. More of IN THE MONEY after a look at the top stories now in the news. These images from Falluja are just now coming in to CNN and an Iraqi official says the operation to retake the city is almost finished. He says U.S. forces control most areas except for small pockets still in the hands of rebels. Top insurgent leaders have apparently fled. Officials add that at least 1,000 insurgents and 22 American troops have died.

CIA Deputy Director John McLaughlin is retiring. McLaughlin took over as acting head of the agency when George Tenet retired in July. The new CIA director, Porter Goss, was confirmed in late September.

A steady stream of mourners are paying respects to the late Palestinian authority President Yasser Arafat. Palestinian officials say elections for a new president will be held before January 9th as required by their constitution.

And two photographers are suing singer Justin Timberlake and actress Cameron Diaz. The paparazzi claim their celebrity couple attacked them outside an LA Hotel. Timberlake and Diaz claim they were ambushed on a dark street and acted in self-defense.

I'll have all the day's news at the top of the hour. Now back to more of IN THE MONEY.

LISOVICZ: It's the ultimate career goal. No, not the corner office, not the corporate jet, but retirement, an early retirement if you can swing it. Let's get real. You probably can't and neither can most Americans. Here to tell us why is economist, author, actor, all- around renaissance man, Ben Stein. He's the chairman of the National Retirement Planning Week which kicks off Monday. Welcome back to the program, Ben.

BEN STEIN, NATL RETIREMENT PLANNING WEEK: Honored to be here.

LISOVICZ: The last time you joined us you told us the U.S. economy is in great shape. Everything's coming up roses. But when it comes to retirement savings, a totally different story.

STEIN: That is the fault of the tens of millions of baby boomers who just haven't been disciplined enough to save enough. I mean the rate of retirement savings by us baby boomers, and I'm at the very, very extreme old edge of the baby boomers, is pathetic. I mean, there are 77 million baby boomers, only something like 8 percent of them have more than $100,000 in savings. The total savings, the average savings are between 50 and $100,000 per family. That's pathetic.

CAFFERTY: How much money do you need to retire, Ben? STEIN: Well, it depends on how much you're living on. If you're living on say X, then you should really have between 15 and 20 times X and that would include, that includes Social Security. Bear in mind, you can only very safely earn between 4 and 5 percent on your money.

CAFFERTY: So in other words, if you're making $100,000 a year, you should have what, between $1.5 million and $2 million set aside? Did I do the math right?

STEIN: Yes. Yes. Yes, unless you have a particularly generous pension. But something like 21 percent of Americans have meaningful pensions. The others have defined payment but not defined benefit plans. This is a real problem. It's a serious problem. Do you know how few people have $1.5 million or $2 million save saved? Very, very, very few. I mean lots of the people you know probably do and lots of the people I know probably do, but overall the number of people who have that much saved is trivial and people are going to need that kind of money.

SERWER: Hey, Ben, I have a serious question. But first of all, I think I saw you in a movie trailer the other day where someone hits you in the head with something and you say ow. What movie is that coming up?

STEIN: That is called "Son of the Mask." It's a sequel to the "Mask" and I have a very, very important part in it.

SERWER: Is the academy listening? It was very funny. I laughed. Hey, listen, what do you think about privatizing Social Security?

STEIN: That's a super good question. The Social Security system is essentially actuarially unsound. It cannot last the way it is. We're either going to have to drastically raise taxes or we're going to have to lower the liabilities of the system. One way to lower the liabilities of the system is to privatize it, say to people, you'll get some of your money from Social Security and some of it from your private savings.

The president has decided that you're going to have to privatize it because the system will not tolerate greatly increased Social Security taxes. So what we're going to have is, you'll take, say, 90 percent of your money, it will stay in Social Security. But you'll get like 10 percent and a steadily growing percentage after that and put it in stocks, bonds, mutual funds. And we will reduce the liabilities of the system. Mr. Gore - wait, not Gore, Kerry. I can't believe I said that. Mr. Kerry said, you're going to blow a hole in Social Security and that is true. You will blow a hole for a few years in Social Security receipts. But you'll drastically lower Social Security liabilities. So that will be a good thing.

LISOVICZ: One of the things perhaps we should take a page from you. That's simply, not retire, keep working. How likelihood is it in your view that the retirement age will be increased again?

STEIN: I'd say the retirement age under Social Security is absolutely certain to be increased.

LISOVICZ: To what?

STEIN: Well, I don't know. I wouldn't be surprised if it were 69 or 70. You have to think to yourself, do you really want to retire? Psychologically, I think it's generally better if you don't retire unless you have a repetitive boring job you hate. You keep your mind and body more active if you don't retire. But people are just not going to be able to retire. Unless they start right now, this is the crucial thing. They've got to start right now. I don't care how old you are, how little you have. You have to start right now saving the stocks, mutual funds, bonds, variable annuities. You've got to start right now. You cannot put it off. You've got to start right now. Can't count on Mr. Bush to do it for you. If it's Hillary Clinton in 2009, you can't count on her to do it for you. You've got to do it yourself. There's no excuse for not doing it yourself.

SERWER: All right. Ben Stein's fired up.

STEIN: Yeah!

SERWER: Listen, thank you for coming on the program and sharing that with us. Ben Stein is the chairman of the National Retirement Planning Coalition, thespian par excellence, renaissance man as Susan said and again, thanks.

LISOVICZ: A regular visitor to IN THE MONEY.

SERWER: Indeed. Lots more to come here on IN THE MONEY. Animania. Moms, dads, children of all ages are flocking to see the season's kids flicks. Find out why you can't always judge a movie by its ratings.

Plus, is it an airport nearby or is that just my heart taking off? From cheesy to just plain lame, pickup lines that may or may not work in our fun site of the week.

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SERWER: Just when you thought you were all grown up, there you find yourself in front of the ticket counter torn between that hot new indie film and that feature length cartoon. Don't worry. You're in good company. Films like Pixar's "The Incredibles" have done huge business at the box office with both kids and adults. Our next guest says that's because animation houses like Pixar have raised the bar. Leonard Maltin is a film correspondent for the syndicated magazine show, ENTERTAINMENT TONIGHT. He's also an author and contributor to several publications. Welcome Leonard.

LEONARD MALTIN, ENTERTAINMENT TONIGHT: Thank you. I also wrote a history of animated cartoons.

SERWER: OK, so you know of what you speak. Listen, I saw "The Incredibles" just a couple days ago and I have been raving about it. I wonder if Hollywood can get over itself and nominate this picture for an academy award. I think it should even win.

MALTIN: Well, that's what everybody said a year ago about "Finding Nemo."

SERWER: I think it's better than "Finding Nemo."

MALTIN: There are many many people who said last year and I wouldn't necessarily disagree that "Finding Nemo" was the best film they saw last year. And certainly at the box office, it seemed to reflect that feeling. The problem is that the academy has now created a special category for animated films. They never had one. They never had one until 10 years ago when this same thing happened and "Beauty and the Beast" became the first animated feature ever nominated for best picture. And when that happened and it happened in a year that wasn't so hot, so the competition was slack. It was the right timing. It was a movie people liked and they nominated it. And I think a lot of academy members felt, well, but you know, this is not supposed to be mixing up that way. We're making live action films here. There should be a separate category for animation. Now that they've done that, I think they feel that's where that film belongs.

LISOVICZ: All right. So Leonard, we also have the "Polar Express" coming out this weekend based on the favorite children's story. Do you think that this is really a renaissance of animation? Or is it just all this new technology and Hollywood wants to show off all the bells and whistles?

MALTIN: Well, in the case of "Polar Express," it's really not an attempt to do animation. It is a technology-based film trying to capture the look of Chris Van Allsburg's book which so many people love and so many families know and cherish. Bob Zemeckis has always been cutting...

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