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Bush's Inaugeration A Budget Buster; Professor Uses Unorthodox Methods To Teach About Terrorism; Wal-Mart Fight Bad PR With Ad Campaign

Aired January 16, 2005 - 15:00   ET


ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.


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

Hollywood on the Potomac: The Bush inauguration is shaping up to be a budget spectacular from the performers to the security. Find out how this party compares to some past versions.

Plus, Wal-Mart bites back: The big box giant faces so much bad P.R. that some states are fighting to keep the stores out. See what you think, as Wal-Mart makes its case.

And plan of attack. We'll talk to a professor who teaches his students about fighting terrorism by pretending to be one.

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

So the British royal family has yet another tempest in a teapot, only maybe it's bigger than that: Prince Harry in a Nazi shirt. This is the guy who's third in line to the British throne. Germany almost destroyed Great Britain during World War II. He was obviously at some sort a party. Childish prank or some giant permanent sin against mankind?

ANDY SERWER, "FORTUNE": Well, you know, I'm in a big student of the royals, but my understanding is that Harry is a bit a rotten egg and he's the bad prince. He gets in trouble. He's stupid. This stupid. It's stupid. Where'd he get -- and where do they have -- do they have these hanging around Buckingham Palace?


SERWER: I'll take a size six, yeah. I mean, what's up with that? And I think he should apologize publicly. I think the written thing where he said, "I'm sorry if I offended people..."

CAFFERTY: Yeah. SERWER: I always hate that one.

CAFFERTY: That's a cop-out.

SERWER: You know, "I blew it" is what he should do.

SUSAN LISOVICZ, CNN CORRESPONDENT: Well, it not only has huge. You know, importance of -- you know, how Germany almost conquered England, but the royal family at the time showed amazing courage and persistence...

SERWER: Queen mother.

LISOVICZ: That's right, his great-grandmother, they stayed put, they didn't go and so it's a disgrace.

CAFFERTY: I think we're all in agreement. It's disgraceful. The other thing you can bet your Social security number is to his dying day that picture will follow him all around.

SERWER: Nazi Harry. It's going to follow him.

CAFFERTY: Yeah. He'll never escape it.

President Bush's inauguration coming up next week with the price tag put at about $40 million. A bit ostentatious perhaps. The cost reporting nine inaugural balls, three dinners with the president, or other top White House officials. The "Washington Journal" reports corporations are kicking in about $12 million for this event and security, of course, expected to be tighter than ever before. We have not had an inauguration since September 11. For a look at how this inauguration compares with others in the past, we're joined by Allan Lichtman who's a presidential historian in at American University in Washington, D.C.

Allan, nice to see you again.


CAFFERTY: The critics say not the right time to put on this sort of opulent display of materialistic excess or however you want to describe it. Not the time to spend $40 million, throw all of these balls. We have deficits, we have kids away at war, we have -- you know, all kinds of things going on. Something perhaps a little more toned down might number order. Your response to that?

LICHTMAN: I couldn't agree with that more, but of course that's impossible. We're in the material center of the world, the United States. Everything is for sale. Capitalism overtakes everything. And even in midst of war, even when the very headlines in today's paper are talking about slashing poverty programs, here we have this extraordinary bacchanal of wealth. It reminds me, you know, in the gilded age when the great robber barons threw parties instead where instead of bobbing for apple, he would bob for diamond necklaces.

SERWER: Well, Allen -- LISOVICZ: Wow.

SERWER: You may want to restrain yourself there a little bit. I'm not quite sure -- well, that's your take! But...

LICHTMAN: That's my take.

SERWER: But sort of the follow on that, is it true that the inauguration sort of can set the tone for the coming administration? For instance, Robert -- John Kennedy, excuse me, famously had Robert Frost. We're going to have a little intellectual intellectualism in the White House, that kind of thing? And do you anticipate anything like that this time around?

LICHTMAN: I really do think the speech and the setting is critically important important. Kennedy did indicate that was going to be a new cultural tone to Washington. The Kennedy inauguration was also the arrival of what's been called the greatest generation, the World War II generation to the presidency. I don't think there's going to be anything that dram at thick time. Second inaugurations usually aren't, except for Abraham Lincoln's second inauguration address when he gave meaning to the Civil War and looked to a better vision for the future.

But I think George Bush really does have to do, though, you know, is transcend all of the parties and all of the hooplas, and really address the very real hopes and fears of America. We are in the midst of war with a very uncertain outcome. We are facing some pretty grim situations at home with the budget deficit. Of course he wants to be optimistic, but at the same time, a touch of realism would do a lot of good here.

LISOVICZ: Allen, President Bush's legacy may largely hinge of what happens in Iraq, and Iraq's elections occur almost at the same time as the inauguration. So how important is that? Have you seen that as you study the presidents and the inaugurations, where you have a critical, critical time, coinciding with inauguration?

LICHTMAN: Absolutely. This happens many times. Of course the most critical was 1860. The South was succeeding beginning from the union, there was talk of war. Things were so grim, Lincoln had to be snuck into Washington at midnight on a closed train. He had to be sequestered before the inauguration, and of course, his inauguration did mark the breakup of the union. 1944, Franklin Roosevelt was elected for a fourth term. His 1945 inauguration was right at the cusp of the critical events that put an end to World War II. Tragically, he didn't live to see it, but those events were so epical for the 20th and 21st century.

CAFFERTY: I mentioned the price tag, Allan, at $40 million, 12 million of that coming from private corporations. Is this another example where the critics will scream outloud and maybe rightfully so, that it's another chance for corporate America to buy access to Washington?

LICHTMAN: Of course it is, and it's absolutely nothing new. This came out of the campaign finance laws of the 1990s and the court decision saying contributions to inaugurations, like soft money, were not covered by limitations and some corporations are giving $250,000 to this inauguration. You've got big companies, like Exxon, Home Depot, Goldman Sachs with obvious direct interests and policies on taxes, on energy and on tort reform. Of course access is being bought here, but you know, this has really been true, certainly ever since Ronald Reagan's inauguration in 1981.

SERWER: Allan, speaking of access, talk a little bit about security at this inauguration, obviously going to be very tight. Is this a situation where the average American can simply go and see anything? Or are you not going to be able to get close to it.

LICHTMAN: It's going to be difficult for the average American to get close. I think you can, however, probably get close enough to watch the parade. But they're talking about extraordinary levels of security, you know, dog -- bomb-sniffing dog, all kinds of sensors, bomb-jamming machinery. But, you know, if you'll get the "New York Times," you can see a discussion of how all of the agencies, the metropolitan police, even the armed forces are going to be involved in the most extraordinary security ever, but you look at it, and you see the date is January 18, 1973. We had exactly the same situation in the midst of the Vietnam War in 1973, when of course the worry was domestic demonstrations. And there was some real significant demonstrations in in '73, even heckling and throwing some things at the inaugural parade. So tight security is nothing new, it maybe more high-tech today, but it is reminiscent of the Vietnam era. You know, a lot of chilling parallels have been drawn between the Vietnam era and today. There's another one.

LISOVICZ: President Andrew Jackson might have wanted some security for his inauguration. I always loved this story. I never tire of it.

LICHTMAN: Right. He throw -- you know, Jackson was the man of the people, a new kind of president. He represented the common folk, particularly of the West, as opposed to the old patricians like Jefferson and Washington and the New Englander, John Adams. And he throws opened the White House and what do the common people do? They trash the place!

LISOVICZ: Trash the place!

LICHTMAN: Absolutely, trash the place. It's a wreck. And a mess and a whole cleanup operation has to be performed.

CAFFERTY: Good stuff. Allan Lichtman, presidential historian at American University in Washington. Thanks for being with us.

LICHTMAN: My pleasure.

CAFFERTY: Appreciate it.

When we come back, gone but not forgotten: The U.S. went into Iraq over weapons of mass destruction, now the hunt is off. We'll look at why we cared so much then and apparently so little now. Plus, the mind is faster than the heart: See if a split-second decision works better than you think, as we talk with the author of a new book called "Blink."

And call air traffic control: Find out if you have a hidden talent for tossing a cheerleader. That's a highbrower edition to this week's IN THE MONEY program. Stay with us, that's the "Fun Site of the Week."


CAFFERTY: This week, U.S. Weapon's inspectors officially closed the search of weapons of mass destruction in Iraq. They've concluded, there aren't any, and in the words of Jay Leno, "It's a good thing they did that before we did anything crazy like invade the country." That was the joke on the "Tonight Show." But all kid aside the intelligence failure in Iraq is no longer a matter of debate and it's certainly no laughing matter. Joing us now from Albany, New York, to talk more about this, former chief weapons inspector, Scott Ritter.

Scott, nice to have you on the program, Thanks for joing us.


CAFFERTY: At time this was going on, the weapons -- excuse me, the oil-for-food program was in the process of being corrupted to the degree of some $20 billion. We still don't know where that went. Some of the money was presumably in Saddam Hussein's pocket and the conventional wisdom was, it would have been a matter of time before, one, he was able to get the sanctions lifted, that was getting closer. And two, he had the wherewithal, i.e., the cash for the oil-for-food program, to reconstitute a weapons program. In hindsight looking back now, do you still think this was a bad idea?

RITTER: Going to war with Iraq? I think with 1,300 dead Americans with the reputation the United States in tatters and as your last segment showed, no clear solution, no end game in site, this was a horrific idea. We didn't solve any problems with going into Iraq. We create a whole host of new problems, and I have to take -- you know, I have to take a different point of view on -- you know, how you describe the oil-for-food program. To date, there has been no corruption on the part of the United Nations uncovered. You know, you talk about $20 billion unaccounted for, but this is pure speculation. No one's been able to document that...

CAFFERTY: Where's the money?

RITTER: That is a fair question.


RITTER: But, I tell you what, I'm less concerned about where that money is, as I am about -- you know, the concept of where the WMD is. We should have been asking a lot more questions about WMD before we went to war in Iraq and not focusing on trying to shift the blame away from the Bush administration and its misrepresentation of fact regarding WMD onto the shoulders of the United Nations and the allegations of corruption for oil-for-food.

Remember this, the secretary-general did not run the oil-for-food program. It was run, it was organized, it was conceived by the United States and the Security Council. If there is corruption in the oil- for-food program, I think we better start looking more at the United States who turned a blind eye to billions of dollars of oil flowing to Jordan, flowing to Turkey, and flowing elsewhere and did nothing to stop it...

SERWER: Right.

RITTER: Rather than blaming U.N. bureaucrats.

SERWER: Scott, let me ask you a question. For a time it seemed people were very concerned about the fact that we didn't turn up any weapons of mass destruction. But ultimately, has it become an issue that Americans have simply come to ignore the, president after all was re-elected, you don't hear much buzz about the fact that the search is officially closed. What's going on with that?

RITTER: Well, look, WMD unfortunately for the American people was always a theoretical, fantasy, fear factor. It wasn't reality. People talked about chemical weapons, biological weapons, nuclear weapons, but they didn't understand either what these weapons programs were, or how they manifested themselves in Iraq. They were told they existed. They were told to be afraid. And they were told there was a threat that need to be dealt with. But never demanded, prior to dispatching America troops to die in Iraq, they never demanded that hard fact be put on the table to sustain these allegations. So, I think for the most part, the American people find themselves, as culpable as the president, in the rush for war and because of this culpability, they're not very likely to look in the mirror and place the blame where it belongs, on their shoulders, as well as the president's.

LISOVICZ: You know Scott, to follow-up on Andy's question, at a certain point, it seemed like WMD was almost a moot, because the U.S. was saying, well, their security concerns in Iraq is a threat. Do you think that in some ways the United States had to make an example where a country where it perceived a threat given some of the horrors that we had seen in recent years: Attacks on our embassies, of course 9/11, and that stability in the Middle East was something that was long overdue?

RITTER: I think we needed to make an example. The example we needed to make was to embrace the rule of international law, the law that we agreed to when we signed the United Nations charter, and not wage an illegal war of regression by, you know, creating and fabricating a falsehood regarding, going to war in Iraq. What have we solved by going into Iraq? We've made the Middle East more stable, I think not. We've made the world more safe? No.

You know, the Intelligence Council of this CIA's just come out and said, Iraq's now the new breeding ground for terror, and it will continue to be so. So the example we made by invading Iraq is that the United States has not only -- you know, mishandled the past when it comes to Iraq, but we're to blame for whatever comes out of Iraq, and whatever Iraq spews forth in the form of anti-American-Islamic terror. We didn't solve anything by going to Iraq. The best example would have been to abide by international law, put weapons inspectors back on the ground, and to hold Saddam Hussein accountable for his obligation to disarm, and as we now know, if he had disarmed and he did, then to lift economic sanctions, to keep weapons inspectors it place, and seek stability through the rule of law.

SERWER: Right. All right, never short of opinions, he is Scott Ritter, former chief U.N. inspector, thank you for coming on the program.

RITTER: Thank you.

SERWER: Coming up after the break, our forecast, a blizzard of press releases: Wal-Mart just launches a P.R. Blitz against its critics. Listen to the world's biggest retailer as it makes its pitch.

Plus, catching a crook by thinking like a crook: Meet a professor who teaches his class about beating ter wrimp inside knowledge.

And small businesses with big reach: Find out how little companies are using the internet to play like the giants.


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


LEE SCOTT, CEO WAL-MART: 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 another part that's internal and that is put the foot on the accelerator and let's going.

LISOVICZ: But it's tough when you want to be both -- to excel and be No. 1, and then to be a good corporate citizen, Wal-Mart's all about cost. And one of its biggest costs is its employees. So tell me how you balance that. SCOTT: On one hand, you have to pay a completive 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 for you. So it's the first thing. So you understand what is, in your environment with the skill sets 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 health care cost that 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 the retail industry and we say, to treat our associates fairly, what is it that we have to do? But, we don't -- we don't make the difference between us and our competors based upon what wages are. The fact that I shared a room last night with Tom Showy, 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'd you eat, by the way?

LISOVICZ: In New York City?

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

SERWER: I'll check that out.

SCOTT: And I would also -- and it was the 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, you know, are complain that Wal-Mart shut down a hardware store when actually it wasn't Wal-Mart who shut down the local hardware store, that 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. I mean, 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 their world is what the world aught look like, so let's put the brakes on everything. And in some ways that's almost what our generation is doing, is saying, that let's stop, let's -- 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 in a different way of shopping and not reward efficiency. I think for society, that's a big -- when you make that choice that is the big choice that you're making. And on the other hand, our Wal-Mart stores has a responsibility to society to make sure that what we do fits in and representatives what it is that society expects from the big companies, it's 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: You know, the thing people, I think, fail to understand about Sam, and a lot of businesses, particularly inside of 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 were things he did in the 1980s he would have never 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 No. 1 thing in this company is our associates and we've got stores that aren't treating associates as well as they should be treated and we better get it fixed. And, you know, 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. And Andy, 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 something that could not be -- you just weren't going to let it go.

SERWER: You know, I think one audience that he was really trying to address Susan, were his employees. The 1.2 million people who work for Wal-Mart, because for years, the company has dismissed criticism, but I think the employees were starting to ask the big guy, Hey, where are you? Why don't you step up to you plate? You keep telling us over and over that the stuff that the critics are saying is not true, why don't you go out there and say something? For a while, he kept saying I don't have to. Finally the criticism had mounted and the stock didn't go anywhere for years, so I think it's 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 use to be, in many cases, where neighborhood 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, well, that can stall the growth plans.

SERWER: Right, well it'll be interesting to see how long they keep this effort up, I guess we will see.

LISOVICZ: And how effective.

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

Plus, how to mess 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."


LISOVICZ: 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.


LISOVICZ: 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.


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.

Thanks 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 next week, Saturday 1:00 Eastern, Sunday at 3:00. Or you can catch Andy and me all week long on "AMERICAN MORNING" starting at 7:00 Eastern. Hope to see you soon.


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