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Guest Says Iraqi Election Should be Postponed; Colleges Beginning To Offer Courses In Terrorism Studies; Wal-Mart Begins Ad Campaign To Make Its Case

Aired January 15, 2005 - 13:00   ET


FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello again. I'm Fredricka Whitfield at the CNN center. Now in the news, Army Reserve Specialist Charles Graner on the stand today, testifying in the penalty phase of his court-martial in Ft. Hood, Texas. Graner was found guilty yesterday on nine counts of abusing detainees at Baghdad's Abu Ghraib prison. He faces up to 15 years in prison.
A frantic search has resumed at a ski resort in Park City, Utah. Five skiers are believed to be buried under as much as 30 feet of snow. It is not known if or how many other people might have been trapped in yesterday's avalanche.

U.S. Deputy Defense Secretary Paul Wolfowitz recommends against setting any deadline for pulling the U.S. military relief mission out of Indonesia. However, Wolfowitz says the troops will be leaving as soon as possible. Indonesia has indicated it wants foreign military and aid troops out of the area by March 26th. Wolfowitz is touring tsunami damage and will meet with Indonesian officials tomorrow.

Newly sworn in Palestinian authority President Mahmoud Abbas is getting the cold shoulder from Israel. Israeli Prime Minister Ariel Sharon has suspended all contact with the Palestinian leadership. The setback is the result of a Thursday attack by Palestinian militants that killed six Israeli citizens in Gaza. 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, out on a limb. We'll look at what the fighting in Iraq means for the upcoming elections which are less than three weeks away and for the U.S. presence in that country.

Plus, Wal-Mart makes its case. The company is taking on allegations that it is a union hating, discriminating, competition crushing giant. If you buy Wal-Mart stuff, well, stick around. See if you buy its story. And the world's weirdest homework assignment. Find out how a professor is teaching his students to fight terrorism by thinking like a terrorist.

Joining me today a couple of IN THE MONEY veterans, CNN correspondent Susan Lisovicz, "Fortune" magazine editor at large Andy Serwer. So big doings in Washington next week. The inauguration for President Bush for his second term in office. We're going to part with $40 million to do this extravaganza. How do you guys feel about that? I mean we got these kids at war in Iraq. We've got budgetary problems here at home. This is his second term, not the first term. Is this inappropriate?

ANDREW SERWER, "FORTUNE" MAGAZINE: We've got tsunami relief. At one point, remember, Jack, when the tsunami relief was the same level, the United States was giving, as the inauguration. Since then they've upped it. It's become a tradition now lately, a new tradition, since George Bush the elder, pomp and circumstances at tens of millions of dollars. I suppose the people demanded give them circuses. For me, I think it's a little bit over the top, as you mentioned, particularly during these times.

SUSAN LISOVICZ, CNN CORRESPONDENT: I think a spade should be called a spade. Remember what happened to college football when used to be the Rose bowl or the Liberty bowl. Now I'm looking at the chick-filet peach bowl, maybe it should be the petroleum industry inauguration, inaugural ball.

SERWER: It's actually interesting that so far the corporations that are giving hundreds of thousands of dollars haven't gotten any ability to put up signage, as they say in the business.

LISOVICZ: Influences is more important than signage.

CAFFERTY: (INAUDIBLE) It might be worth knowing who is paying the tab. Let the folks know whose dime it is.

SERWER: This is America.

CAFFERTY: It's America. We shall see. The White House admitted this week that the upcoming elections in Iraq are likely to be as a spokesman put it, less than perfect. That could be one of the great understatements ever. If you are a skeptic, the whole deal sounds like holding a beauty contest in the middle of a barroom brawl. The insurgents keep up the violence, attacking U.S. troops, killing local officials. Lately they're trying to scare people beam away from voting at all and in some parts of the country, they're succeeding. To help us figure out who's who in all of this and where this thing may be headed, we're joined now by Fawaz Gerges who's a Middle East analyst and professor at Sarah Lawrence College In Bronxville, New York. He's been with us before. Always a pleasure, professor, to have you on the program.


CAFFERTY: The elections are less than three weeks away. Should they be postponed?

Absolutely but that's not the only question Jack. The question is not whether to postpone the elections. What do you do after you postpone the elections? I mean let's remember here that Iraqis have not been allowed to sit down together, flesh out their differences and argue and debate and it's really amazing.

It's alarming that the Bush administration and the Allawi government have resisted calls by the international community including the European Union, the League of the Arab States to hold a conference of national reconciliation where all Iraqis sit down and argue and debate and define the rules of the game before you hold elections. Why not? If you have it in Afghanistan, why not for Iraq? I think this is point one.

So postponing the election, holding a conference of national reconciliation, reassuring the Sunni Arab community, as you know Jack, the Sunni Arab community, which represents about 20 percent of the population and when I say 20 percent of the population that is 6, 7 million people, leading the insurgency today. It must be assured that the managing (ph) order in Iraq is not designed to marginalize it and exclude it.

And Finally, I think, the Bush administration and the Allawi government must change the electoral system. As you know, now in Iraq there's one constituency, that the whole nation, that is one particular constituency. It should be based on regionalism, on local districts so that all Iraq will likely be represented.

LISOVICZ: Professor, you probably saw this column by Thomas Freedman (ph) which says we need to have a proper election in Iraq so we can have a proper civil war there. Isn't it just a moot point? There already is a civil war there.

GERGES: Susan, this is a highly critical point. Make no doubt about it. There is a low intensity sectarian strife taking place in Iraq today. The danger exists here is that the election could plunge Iraq from a low intensity, sectarian strife into a full sectarian communal strife, particularly as I said, if the Sunni Arabs, who represent about 7 million people, do not participate in the elections or boycott the elections, as seems to be the case. And this is why, it seems to me, I don't understand why the rush, why the plunge, why the administration is so determined to have the elections.

Even Iyad Allawi, even the ruling coalition which is of course pro-American is basically saying to the Bush administration, listen, give us some chance. Give us some time to put Iraq -- to allow Iraqis to sit down and talk together. I think at the end of the day Susan, the Bush administration is determined to have the elections because I believe it would like to have an exit strategy in case the security situation deteriorates further. And I really believe here that -- regardless of the outcome of the elections, the insurgency will likely continue to widespread, to intensify, and to escalate, after the elections more than before the elections.

SERWER: I'm sorry to jump in. Let me throw this out. It's a novel thought. What would the Iraqis do? What if the Iraqis were left to their own devices? What sort of government would they create?

GERGES: I mean I think at the end of the day - I mean this is - it tells me about, if you look at the social and political landscape in Iraq and it seems to me, highly alarming and highly conservative. The most powerful camp in Iraq today is what I call the religious camp, which is highly powerful, organized and not only within the Sunni community, within both the Sunni and Shiite community, the religious camp is the most powerful camp. And regardless of what happens, either, if you have the election on January 30th or even if you postpone the elections, it seems to me a moderate Islamic government will likely emerge in Iraq after the American forces depart from the country.

So the irony is that the Bush administration toppled a secular government and replaced the secular government with an Islamic government. In fact I would argue that President Bush will likely be remembered as a catalyst who brought about the Islamic Republic of Iraq and now Iran. Let's remember what happened to Iran in the late 1970s.

CAFFERTY: That's the kind of a pessimistic view. I mean I understand what you're saying and you make some good points. But what if it works? What if they have these elections? Democracy in this country wasn't born without large blocks of people being disenfranchised, being unable to vote. Blacks weren't allowed to vote. Women weren't allowed to vote. Non-property owners weren't allowed to vote. We still have trouble with elections 230 years after this country was born and it was born in the cauldron of war and revolution and rebellion. What if this thing works and they sit down and draft some kind of a constitution and eventually are able to work it out. I mean that's not beyond the realm of possibility.

GERGES: No it's not. It's not at all Jack and in fact, I mean this is a possibility, but what I'm trying to suggest here Jack is that Iraq is deeply divided over the future, the future (INAUDIBLE) of their country. And what you have in Iraq is not just a military conflict, but a political struggle among the various communities to define the future of the country. And this is why, what we are suggesting is that Iraqis are capable of having democracies.

You must allow Iraqis to sit down together, to flesh out their differences, to define the rules of the game. We're not saying that Iraqis are not capable of having democracy. We're saying that the Bush administration has resisted, has resisted calls by the international community, by the European Union, by Iraqis to allow Iraqis to sit down together and flesh out their differences before the elections. It has not done so and Iraq is poorer for that.

CAFFERTY: All right Professor. Thank you. We're going to have to leave it there. Fawaz Gerges is a professor at Sarah Lawrence College, Middle East analyst talking about the upcoming Iraqi elections.

A quick note here. We want to clarify a segment we did a couple of weeks ago on budget fitness. We were a little unclear at the time about the cost of one of the products we discussed, Maya (ph) the personal trainer, the Xbox game which is made by Yourself Fitness, retails for $35. IN THE MONEY will be back in a moment.


CAFFERTY: This week the Bush administration threw around a bunch of words like crisis and bankrupt and flat broke. The topic was Social Security and the president's plan to revamp it. Critics say the White House is exaggerating the problem and that some of the proposed changes will benefit Wall Street more than it will help people who are saving for their retirement. But David John disagrees. He is a Social Security analyst with the Heritage Foundation and he's a proponent of the Bush plan. He joins us now on IN THE MONEY. David, nice to see you. Thanks for being with us.

DAVID JOHN, HERITAGE FOUNDATION: Thanks very much for having me.

CAFFERTY: What's the biggest misconception about what President Bush wants to do?

JOHN: Well, there are actually so many of them. The first one is, actually, that we are not facing a crisis, and the fact is that, yes, we are facing a crisis. The second one is that these accounts would be, somehow or other, dangerous. And I think the third one is, as you said, that they would mainly benefit Wall Street and of course, they wouldn't.

SERWER: Let me ask you a question, David and that is about private accounts, which is probably the most controversial part of the program. Wouldn't it be true that if we establish these private accounts, that some people would do very well, and some people would do very poorly, and isn't that really not the whole point of Social Security? Isn't it supposed to be a backdrop for retirement to augment people's private savings? I don't get it.

JOHN: Well, the fact is that for about 50 percent of the work force -- this is for the predominantly the lower 50 percent of the work force -- Social Security pretty much is their retirement plan. They don't have a private savings or, if they do, they're insufficient private savings to give them very much. What we're talking about is not your brother-in-law's hot stock tip. It is something along the lines of a life style fund and there would only be one or two options for individuals to invest their money in. If they didn't make a decision, we're hopping that the Bush administration will set up a life style fund for them and this means that they would be invested in stocks when they're very young, and then as they start to move towards retirement, their portfolios would gradually automatically move towards bonds. So by the time they reach 60, 61 or so, virtually all their assets would be in bonds and they wouldn't be affected if the stock market went down.

LISOVICZ: David, if that all works, that's great. But one thing that we know for sure is that under this proposal, your first-year benefits would be tied to the rate of inflation rather than the rise in wages over workers' lifetime. We know that the inflation rate moves slower than the latter. So you would see a cut, right? You would see a decline in benefits.

JOHN: You may see a decline in benefits. For one thing, there are a number of different ways to make that adjustment. Option two of the president's commission has a full changeover to the inflation adjusted benefit calculation. Option three actually goes 50 percent of the way. So there are about 100 different variations on that. The sad fact is today's Social Security has promised people like my 18- year-old daughter, Meredith, much, much more in retirement benefits than it will ever be able to pay and one of the things we have to do, no matter what we do about personal accounts, is to bring that back into reason.

CAFFERTY: Talk for a minute about what happens to my FICA money that I pay in right now. It doesn't go into any trust fund. It goes into the general fund and is spent by the politicians in Washington. If we suddenly make a changeover to private accounts, there's going to be a gap. Where does the money come from?

JOHN: Well, you could make the argument that this money should have been going to Social Security purposes in the first place.

CAFFERTY: You sure could.

JOHN: And it should. But the simple fact is that the days of the surpluses are limited. They're going to continue to grow about until 2008, another three years. And then they rather sharply decline until the surpluses disappear all together in 2018. We're actually not talking about stunning amounts of money. We're talking in the neighborhood of a hundred billion or so. I think what you can put this in is more truth in budgeting than anything else. Today's system is really hiding the amount of the deficit rather than letting us know what we're actually spending here.

CAFFERTY: But it is also hiding the amount of the surplus. There is no surplus. This is an unfunded IOU from the Federal government, that at the time it comes due, has to be paid. The money has to be taken from someplace. There is no box of money sitting anyplace.

JOHN: There absolutely is no box of money. I mean basically what there is a fireproof filing cabinet in the Bureau of Public Debt in Parkersburg, West Virginia that's filled with laser printed special- issue government bonds. And in order to repay those bonds starting in 2018, we're going to have to devote rather massive amounts of money. Initially, they'll be fairly small but in five years they reach $100 billion a year and that's in today's dollars without inflation. Five years after that, it's $200 billion a year. Five years after that, it's $300 billion a year. So it starts to put real pressure on the Federal budget and whether or not we'll be able to afford a variety of programs.

SERWER: David, you know what's ironic is that people who are upset about Social Security tend to be elderly people. Actually they're not in trouble. It is your 18-year-old daughter, Meredith, who should be worrying but of course they're not exactly pounding the table on this. What happens during a period like the 1970s though with private accounts when the market really does poorly?

JOHN: Well, when you have another 1970s, and we probably will at some point or another in the next 100 years or so, the accounts will grow fairly slowly but even if they do, they're going to grow much faster than Social Security. I mean if Meredith were a boy at this point or, for that matter, any male under the age of 37 today, can expect to pay more in Social Security taxes than we'll receive in benefits, on average. Younger people -- women, for instance, don't do much better. If Meredith could take her Social Security taxes right now and put them in U.S. government bonds, she could have twice what Social Security is offering to pay her, much less what it can pay.

SERWER: All right. We're going to have to leave it at that. David Johns, Social Security analyst for the Heritage Foundation, thanks for coming on the program.

JOHNS: Thanks for having me.

SERWER: Coming up after the break, the angry giant. Wal-Mart just launched a campaign to fight the negative PR it's been getting. See if you're convinced by the store's take on its record.

Plus (INAUDIBLE) as fast as you can bat your eyelashes -- from speed dating to playing tennis, find out why the quickest decisions can be the best.

And think of it as a pair of stilts for the little guy. We'll look at how the web is letting small companies compete like the big boys.


SERWER: Our stock of the week is Wal-Mart because the world's largest retailer has just launched a major PR effort to counter some of the attacks on its business practices. Earlier, Susan and I talked about that with Wal-Mart CEO Lee Scott and I began by asking why he is starting this effort to defend his company now.


LEE SCOTT, CEO, WAL-MART: Well, I don't think of it as much of defending the company as I do setting the record straight and, for me personally I think, when we got through with the day after Thanksgiving, I almost had a sense that it was the right time for Wal- Mart to become more aggressive. We have a great story to tell and it is time for us to tell that story, particularly about our associates and our benefit programs, our wages and the contribution we make to this country. But I also think it's time for us to be more aggressive when it comes to taking care of our customers, our merchandising, pricing and all of those things. I think we have an opportunity this year and this is one part of it. This is an outreach to set the record straight and to tell the facts, but there is another part that's internal, and that is, put our foot on the accelerator and let's get going.

LISOVICZ: But it's tough when you want to be both to excel and be number one and then to be a good corporate citizen. Wal-Mart is all about cost and one of the biggest costs is its employees. So tell me how you balance that.

SCOTT: On one hand, you have to pay a competitive wage. If you're going to hire 1.2 million people, they have to make a living and they have to be willing to come to work you for. So that's the first thing. So you understand what is in your environment with the skills that you want, what do you need to pay? So it's fair and it's a representative wage and so you do that and then you look at your benefits. In the past year we've increased the percentage of the healthcare costs we pay for our associates because we thought that was appropriate. We thought it was the right thing to do. So you're always looking at that. The reason we have the 401(k) plan, the profit-sharing plan, the bonus plan, the paid life insurance, all of those things, we go out there and we look at the retail industry and we say, to treat our associates fairly, what is it we have to do? We don't make the difference between us and our competitors based upon what wages are. The fact that I shared a room last night with Tom Shoey (ph), our CFO while we were in New York, saved $200. The fact that my dinner was $10 last night saved money. The fact --

SERWER: Where did you eat, by the way?

LISOVICZ: In New York City.

SCOTT: I ate a Caesar salad in the bar of the hotel.

SERWER: I'll check that out.

SCOTT: It was a small Caesar with no chicken or shrimp. But I also tell you that this company on our trip isn't paying for any liquor.

SERWER: Do you find it frustrating that people are complaining that Wal-Mart shut down the hardware store when actually it wasn't Wal-Mart who shut down the local hardware store. It was the people in town who decided to vote with their feet and shop at Wal-Mart and the hardware store did less business. That's sort of a difficult point to get across sometimes, isn't it?

SCOTT: Oh I guess and you can't really try to argue each individual point. I try to argue a little bit philosophically that, thank goodness, our ancestors, when they lived in caves and first found fire, didn't decide that their world is what the world ought to look like so let's put the brakes on everything. In some ways that's almost what our generation is doing, is saying that -- let's stop. Even though this model is the most efficient manner of moving merchandise from manufacturing to consumers and even though it's been proven that as you add value to products by eliminating costs, that it drives consumption which stimulates the environment. Let's stop and let's think about a different model and a different way of shopping and not reward efficiency. I think, for society, that's a big -- when you make that choice that is a big choice that you're making. And on the other hand, Wal-Mart stores has the responsibility to society to make sure that what we do fits in and represents what it is society expects from a big company. It is not a one-way street but it is a two-way street. And it's important in this country to reward efficiency.

LISOVICZ: What would Sam say about Wal-Mart's performance and about how you're reaching out today?

SCOTT: The thing people I think fail to understand about Sam in a lot of businesses, particularly inside our own company, is a lot of people forget that the biggest agent for change was Sam Walton. Sam knew what to do and when to do it. So there are things he did in the 1980s he would never have done in the '70s. I think Sam Walton would understand perfectly that this company has got to reach out and tell its story. I think Sam Walton would tell us just as he did before he passed away, that the number one thing in this company is our associates. We've got stores that aren't treating associates as well as they should be treated and we better get it fixed. And I can't be Sam Walton. I mean I wish I could. But I think I can try to set that tone, that we can be a better company and we can talk about our faults but we can talk about them in a way about how do we overcome them.


LISOVICZ: Lee Scott, the president and CEO of Wal-Mart making a rare appearance to New York City and an even more rare on-camera interview. I don't know about you but when I heard that Mr. Scott was coming to New York and going to do some interviews, I thought this is more rare than a total eclipse of the sun. It was just something that could not be -- you just weren't going to let it go.

SERWER: I think one audience that he was really trying to address Susan were his employees, the 1.2 million people that work for Wal- Mart because for years the company has dismissed criticism. But I think the employees were starting to ask the big guy, where are you? Why don't you step up to the plate? You keep telling us over and over that the stuff that critics are saying is not true. Why don't you go out there and say something. For a while he kept saying said, I don't have to. Finally, the criticism had mounted and the stock hadn't gone anywhere for years. So I think it is his time to get out there and do it.

LISOVICZ: Not only that, I mean it's civic groups, for instance, community groups who are saying we don't want you in our neighborhood. It used to be in many cases where neighborhoods were thrilled to have it and in this case, you're seeing opposition. If you don't have a new Wal-Mart coming into the community, that can stall the growth plans.

SERWER: Right. Well, it will be interesting to see how long they keep this effort up.

LISOVICZ: And how effective.

SERWER: All right. Coming up on IN THE MONEY, bin Laden one on one. We'll meet a college professor who takes lessons in fighting terrorism out of the classroom and on to the street.

Plus -- how to mesh with success. Remember new Coke? We'll look at how over thinking can sink you as we speak with author Malcolm Gladwell.

And what goes up - well you know the rest. See if you've got a talent for tossing a cheerleader, oh my, on our fun site of the week.


FREDRICKA WHITFIELD, CNN CORRESPONDENT: Hello. I'm Fredricka Whitfield at the CNN Center in Atlanta. Now in the news, Army Specialist Charles Graner has been on the stand for several hours giving unsworn testimony in the penalty phase of his court-martial. Graner faces up to 15 years in prison after being convicted yesterday on nine of 10 charges related to the prisoner abuse scandal in Iraq.

Baghdad police say they've yet to hear from the people who kidnapped the teenage daughter of an Iraqi official. Authorities say the 16-year-old was abducted as she walked home from her math tutor's house. The kidnappers reportedly sent a text message from the girl's cell phone to her father, the assistant to the secretary general of the Iraqi council of ministers.

It's official. The Palestinian authority has a new president. Mahmoud Abbas was sworn in this morning. In his acceptance speech, Abbas called for an end to the Israeli occupation and credited the late Yasser Arafat with planting the first seeds of democracy among Palestinians.

And pictures from the Huygens (ph) space probe are giving the world its first close-up look of Saturn's Titan moon. Scientists worked throughout the night to sharpen the images which show a frozen, orange world enveloped in a methane-rich haze and a methane sea with islands. They say the moon's surface has a clay-like consistency. One scientist likened it to creme brulee. I'll have all the day's news at the top of the hour. Now back to more of IN THE MONEY at CNN.

SUSAN LISOVICZ, CNN CORRESPONDENT: College kids across the country are getting ready for their second semester classes, studying everything from philosophy to astronomy to terrorism. That's right. Terrorism theory and practice is of course, being offered at George Mason and Mary Washington Universities. Students are being put in the role of would-be terrorists to learn about terror cells, how they operate and how the government can stop them. Dennis Pluchinsky teaches the course. He's also a senior analyst at (INAUDIBLE), a firm that specializes in aviation and transportation security. We should also add that you were a former senior intelligence analyst with the State Department. You know what you speak of. Welcome.


This course is really quite advanced, in some ways. Not only do you try to get in the heads of terrorists, but you're supposed to, as one of your projects, commit a terrorist act or at least put it down on paper and then write a paper claiming responsibility for it.

PLUCHINSKY: Well, I don't know if it's advanced. But I teach the course from the perspective of an intelligence analyst. As you mentioned, I spent 28 years in the State Department analyzing terrorism. So when I teach the course, I teach it from the perspective of an intelligence analyst. And as a result, I believe there's a value in terms of having the students understand that a terrorist attack isn't some haphazard, mindless act and that's is not a simple act. It's complicated and that there's a lot of thought behind it.

SERWER: All right. Dennis, whoa, whoa, whoa. Let me take a step back here. What is the point of this class? What are the students supposed to be learning? What are they going to do with this information? What kind of careers do you go into after taking this class?

PLUCHINSKY: I think it was the great Russian writer Dostoyevsky who that, while it is easy to denounce an evil doer, it is much more difficult to understand him. And in this class, I try to teach the students to understand terrorism, terrorists and also terrorist groups. And a lot of the students go on to become -- they join the FBI, CIA, some are in Rand Corporation. But it's generally designed to help the students understand how these groups think. I mean know thine enemy is one of the classic basic premises in terms of any type of conflict you're in. So I'm trying to help the students understand how these groups operate and if they go into the intelligence services or law enforcement agencies, they'll have a better understanding how these groups construct a terrorist attack.

CAFFERTY: You have an extensive background in this material. Nevertheless, do your students ever surprise you with some of the things they come up with?

PLUCHINSKY: There are some surprises, not so much in terms of targeting. Most of the students select malls, bridges, metro subways, places like that. But in terms of camouflage in the explosive devices, some of the students have been pretty ingenious in terms of some of the stuff they've come up with. I can give you one example where a student has taken a moving van and added a GPS device to it and also using a cellar phone and he's constructed a moving time bomb, so to speak.

LISOVICZ: That's a little scary.

SERWER: That's chilling.

LISOVICZ: Yeah. Does this -- is this something, this course, monitored by any of your former employers? Have you been in contact with them?

PLUCHINSKY: Well, there's one government agency that has expressed an interesting in taking a look at some of the student research papers after they're done. I asked the student ifs they have a problem with that and if they don't, simply to write on their operational plan that they don't have a problem with someone in the government taking a look at their plans.

SERWER: Dennis, how popular is this class? Do people flock to it?

PLUCHINSKY: I don't know if they flock to it but I've never had a problem meeting my quota. This semester I'm teaching 105 students at George mason and 100 was the cut-off. And at Mary Washington University, I'm teaching 27 and the cut was 25. I've never had a problem with students taking the class or wanting to take the class.

LISOVICZ: One of the things that's interesting about this, because of your experience, is looking at this in a very serious way. Some terrorist groups actually were quite effective. Is that something that's part of the curriculum? In other words, do you look at say the IRA or the Shining Path or even the Viet Cong? Is there any historical basis that's part of the class? PLUCHINSKY: The students get to select an anti-American terrorist group. Once they select that group, they have to do extensive research on that group to develop an operational profile. An operational profile involves what the goal of the group is, what the objectives are, what type of tactics do they use, how much money do they have, how do they communicate, how do they pick out safe houses, these type of things. Once they understand these operational elements of the group, then they kind of get into the mind of the group or in the shoes of the group and then they construct this operational plan, this hypothetical attack plan.

SERWER: So Dennis, do they actually enact these plans? I mean obviously not all the way. But do they go out in the street? So they do research on the Internet first. Do they ever set in motion, at least in a limited way?

PLUCHINSKY: That's a good point because I emphasize to the students that most of their research has to be done via the Internet, to show them that the Internet and the media have provided a lot of shall we say information to terrorist groups. But they -- it's interesting for them to see exactly that they can go on to a website, learn how to make a bomb. But in terms of turning the operational plan to something more physical, sometimes they'll do physical surveillance of a target. In other words, observe the target. But in most cases they just write down how they think the plan will take place. And then they submit it to a hypothetical leadership, which, of course, is me. And then I give them a grade based on how accurate their profile is.

LISOVICZ: Did you ever think that maybe some of the wrong sets of eyes might be looking at this or learning something about it? In fact, it may not be helpful. It may be harmful.

PLUCHINSKY: No. They're mostly college students. I've been teaching this course for 15 years. And I've never had a terrorist pop up in an Afghan training camp. In fact, as I mentioned before, most of my students go on to join the FBI, CIA, NSA or State Department as counterterrorism analysts. So I think there is a lot more benefit than there is any type of negative aspect of it.

LISOVICZ: It is certainly interesting, that's for sure, Dennis Pluchinsky who teaches among other things terrorism theory and practice. Thanks so much for joining us.

PLUCHINSKY: Thank you.

LISOVICZ: There's more to come here on IN THE MONEY. Up next -- from love all to true love. In tennis and romance and even in business, our brains work faster than we know. Find out about the science behind your gut instinct.

And small business gets a megaphone. Little companies are learning to talk to a bigger part of the public by fine tuning their websites. We'll look at how that works.

(COMMERCIAL BREAK) SERWER: You may have thought long and hard about tuning in today to IN THE MONEY, oh, come on. But in reality you knew it was the right thing to do as soon as you saw the show in the TV listings this morning. A new book called "Blink" takes a closer look at the logic behind the snap decisions we make in life. Malcolm Gladwell is the author of "Blink" and a staff writer for "The New Yorker." He joins us now to explain. Welcome Malcolm.


SERWER: Always really enjoy your pieces in the New Yorker, intriguing stuff. Why don't you start off by telling us what this new book is all about?

GLADWELL: The new book is all about trying to examine snap judgments. We have a kind of thinking that takes place slowly and deliberately and we understand that, I feel like. But we have another kind of thinking that takes place in the blink of an eye, the kind of decisions we make in one or two seconds. And I think that they are enormously powerful and, on occasion, they can be enormously useful and on other occasions they can lead us terribly astray and we need some kind of road map to distinguish the good from bad and learn how to be better snap decision makers and that's what "Blink" is about.

LISOVICZ: OK and you have some fascinating anecdotes in it. I don't know where to start, but one of them is you can really tell everything you need to know about a person by looking at his or her bedroom.

GLADWELL: Well, it's the really fun stuff that says who does a better job of describing someone, their friends or a stranger who simply looks through that person's apartment. The answer is that, strangely, the person who just does a quick glance through your apartment is better at describing you than someone who has known you for many years. That suggests to me that the job interview actually should be replaced by the house tour as a way of getting to know your employees. But it's weird because there are certain situations, in other words, where a very quick look inside someone's life can be enormously powerful.

CAFFERTY: The key, I would guess then, is being able to tell whether or not to trust your instincts in a given situation or not. You're not always right. But they teach us from the time we're small, trust your gut. Your gut wouldn't lie you to.

GLADWELL: I don't think that's true. I think that's very unsophisticated advice.

CAFFERTY: I'm kind of an unsophisticated guy.

GLADWELL: What I'm trying to do in the book is to kind of provide a sort of road map that says, all right. In these situations -- I talk a lot about expertise and about how the gift of experience is the ability to know your gut and to have a gut that is meaningful and sophisticated, but there are certain situations when our judgment is so powerfully clouded by all kinds of biases and things that we really need help in making sense of our snap judgments. I have several chapters that talk about what kind of form that help takes.

SERWER: All right. Well, give us some examples Malcolm, because one of the hardest things I find in this situation is when you're interviewing someone for a job, trying to judge someone. OK. I'm going to hire this person. They're going to work for us. Are they a good person? They've got this resume where they went to some fancy college. They smile. They look OK and then they turn out to be a nightmare.


SERWER: What do you do? How can you help us?

GLADWELL: Well, a long really interesting chapter, I think anyway, in my book on what happened in the classical music world when they started to put up screens so that people in the auditioning committee could not tell, couldn't see the person who was auditioning for positions in an orchestra. And what happened when they did that is that almost overnight, orchestras began hiring women and people who had previously thought that the reason women weren't getting hired was that women couldn't play classical music, began to realize that what had happened was that, when you could see the person playing, the evidence of your eyes was contaminating what you were hearing. And so by putting the screen up, they removed the source of the contamination and once again restored the strength and sophistication of a snap judgment because an audition is a snap judgment.

LISOVICZ: I love that anecdote and I think it is obviously very important. But what if that conductor, male or female, was a real diva and in the classical music world that's not unknown. I thought one of the best interview questions, job interview questions I was ever asked was whether I played well with others, whether I was a team player. And for that you don't look at somebody's house or their work. You get a feel from the way that you're talking to them.

GLADWELL: I was going to say that I think that the idea of a blind interview, for example, in terms of hiring people can be very, very useful. Certainly at the first stage, if you're dealing with 10 candidates, the amount of bias that can enter in from seeing someone as opposed to simply listening to them is quite enormous and much larger than I think that we recognize. And I would like to see, I'd like to see blind admissions in college for example as well. I was horrified to learn -- I'm a Canadian. I didn't notice before - but horrified to learn that many American colleges require a photograph with a college application. How does that help the fairness of the process? To me, that's just an opportunity for introducing these kinds of biases into the judgments that admissions directors make.

LISOVICZ: And not the mention the fact you use your own hair as an example of the bias inherent in society. If you can quickly just tell us.

GLADWELL: I used to have very, very short hair and then I just cut it. But I had really wild --

SERWER: It's in the middle now. Malcolm in the middle. GLADWELL: I had to clean up for the show. When I grew my hair out wild, my life changed. I was getting stopped by cops. I was getting pulled over. I got mistaken for a rapist on 14th St and I began to realize it really, really matters, this sort of -- the impression someone forms of you in those first two seconds and that was really one of the impetuses for the book, is to try and figure out what's going on in that moment.

LISOVICZ: And in fact I heard you speak at your book launch earlier this weekend. The doorman in your own apartment building thought that you were a rapper and just learned because of the publicity that, in fact, you are a noted author.

GLADWELL: That's was a comedown. I would rather be a rapper.

LISOVICZ: Malcolm Gladwell, we're glad that you stopped by as an author and the latest book is "Blink", the power of thinking, of thinking without thinking. Thanks for joining us.

Up next on IN THE MONEY, air pom-pom. See what happens when you try to swish the captain of the cheerleading squad. Our fun site of the week just ahead.

And go for a slam dunk with a smart e-mail. You just might wind up reading it on our show. The address is


CAFFERTY: More and more people that used to being web illiterate are learning how to surf the Internet and that was really good news for small businesses this past year. However, things could be changing and soon. With more on that and the fun site of the week, here is my friend, web master Allen Wastler. What's up?

ALLEN WASTLER, MONEY.COM: I was super uncle this Christmas, because for my 11 and 12-year-old nephews I got these chain mail hoods like the old medieval knights used to wear. (INAUDIBLE) I was able to find them from a small little shop in Ohio, all through using search technology and just finding the bad boys, getting them, got them right there for Christmas and the nephews were great. The evidence is more and more people are using this type of technology to get certain gifts. (INAUDIBLE) I took a survey of my office. Nearly half, almost all of them bought off the Internet. Nearly half of them did it from small business types. Jack, have you ever froogled?

CAFFERTY: Not since I was in college.

WASTLER: Froogle is a shopping service off of Google. And Froogle is loke a portal. They'll take you to businesses large and small. They saw their traffic increase 147 percent year over year. So more and more people are using that type of advanced search technology.

CAFFERTY: Why do you suggest it's about to change?

WASTLER: Well, now here's the trick. To get on there, you pay for a search. That's the new way to do business. So if you are one of the big boys, well, yes, I'll just dominate those search findings here. Here is some money and just keep me up there all the time. So that's the contest we're probably about to see in the Internet take place.

CAFFERTY: Fun site of the week?

WASTLER: I got one for you. Let's do the cheerleader toss.


WASTLER: That was fun. And if you want to experience the fun yourself, go for it, girl. Yeah, buddy. Boom. You can play the game. There she goes. She can go for the switch.

CAFFERTY: I don't think so.

SERWER: Missed again.

WASTLER: Many different shots.

CAFFERTY: There we go.

WASTLER: And you can go for far shots too. It really is a classic game.

CAFFERTY: It's pretty high brow stuff we do here on this program.

WASTLER: She landed in the dumpster. Anyway, it is a fun little site. You can do many more shots with the cheerleader.

CAFFERTY: Thank you Allen.

Coming up next on IN THE MONEY, time to hear from you as we read some of your e-mails from the past week. You can send us an e-mail right now if you're so inclined. We're at


CAFFERTY: Time now to read some of our answers to our question about whether you think you could survive a natural disaster. Bob in Clearwater, Florida wrote skills can't always save you, but I'd like to think that all my years in the boy scouts would come back to help me at just the right time. That be prepared motto can go a long way.

Deb in British Columbia, Canada wrote, sure, I'd be able to survive something hitting my home area, but if I were a tourist like many of the tsunami victims, I would have no confidence in being able to survive.

And Vietnam War veteran Kenneth from Sonoma County, California wrote this. People can boast and feel confident but let's face it. Luck always plays an enormous role in whether you survive or not. For most of the victims of the tsunami, there was no warning, so it all came down to whether you were on the beach, in a hotel room or somewhere a few feet above sea level.

Time now for next week's e-mail question of the week which is this. Will you look for a new job this year, 2005 and if so, why. Send your answers to And you should visit our show page at which is where you'll find the address of out fun site of the week. You want to throw them old cheerleaders around. Thank you for joining us for this edition of IN THE MONEY. My thanks to CNN correspondent Susan Lisovicz, "Fortune" magazine editor at large Andy Serwer and managing editor Allen Wastler.

Join us tomorrow at 3:00 Eastern time when we preview President Bush's second inauguration. This coming Thursday's event may be a lot more about money and show biz than it is about politics. That's tomorrow at 3:00 Eastern. Hope to see you then.


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