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CNN IN THE MONEY
Strict Immigration Laws May Be Hurting American Economy; Author Talks About Creative Brain Drain
Aired April 17, 2005 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
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:
Telling fact from fiction in choosing the next pope. A best- seller called the "The DaVinci Code" raised speculation about a group within Catholicism known as Opus Dei. Find out what an expert on Catholicism says their role really is.
Also ahead, a higher IQ: John Negroponte's on track in the job of raising America's intelligence quotient. See what's facing the country's new spy boss.
And the best and the brightest and why they may be leaving the United States: We'll talk to one author who says strict immigration laws may be hurting the economy.
Joining me today, a couple of IN THE MONEY veterans, CNN correspondent, Susan Lisovicz and "Fortune" magazine Editor-at-Large Andy Serwer.
There's an old saw that goes, "As GM goes, so goes the country." These days let's hope not. What is wrong, suddenly it seems, with America's automobile industry? Not just General Motors, but Ford, major problems all of a sudden.
ANDY SERWER, "FORTUNE" MAGAZINE: Well, you know, I don't think it's all of a sudden, I mean, this has been a decade after decade problem. You're right, lately it looks a lot worse, Jack. And I think what's happened, the immediate cost and higher oil prices hurting sales of trucks and SUVs which, of course, the Big Two had counted on to sort of bolster sales over the past couple of year. Those are starting to erode this year, and all of a sudden, you know, boom it's hitting the wall. But if you go back and look, of course, the market share of General Motors, year after year after year, since the 1960s has declined.
SUSAN LISOVICZ, CNN CORRESPONDENT: And it hit at a 12 year low this week on more bad news. Some of the other issues that have been hanging out there is, of course, the incentives, or as Andy likes to call it, the "crack cocaine."
SERWER: Oh yes.
LISOVICZ: That has come back to bite the Big Three. Then also health care costs, you know, the UAW, very strong, they have so many retirees out there. You know where health care costs are going, they're going through the roof. So, you have those issues and then you have the oil prices, right? Guess what, Detroit is not -- not in the lead on hybrids. It's Japan.
LISOVICZ: So people are going there. And then, why the 12-year low? Because the securities, the SEC, wanted documents related to transactions between GM and one of its former units, Delphi, so that -- the perfect storm brewing.
CAFFERTY: Yeah. But, health care costs for General Motors alone have gone up almost a billion dollars in the last two years. Now in addition to middle class Americans not being able to afford health care, and the problem going virtually unaddressed by the government in this country, now apparently we're going to sit and watch marquis corporations, things that stood for everything that America, capitalism and industrialism stood for since, you know, the birth of the internal combustion engine, go by the boards or at least begin to suffer terribly because of an inability to address the cost of health care in this country.
CAFFERTY: That's terrible.
SERWER: The UAW has to decide, every company's got different constituencies: Workers, employees, retirees, shareholders. You know, everyone needs a piece of the pie. Not just the UAW.
CAFFERTY: Right. All right. Big trouble for GM and Ford.
There's a lot more to choosing a new pope, as we change subjects here on IN THE MONEY, than filling out ballots and making that white smoke come out of the chimney over there at the Vatican. There is money and power at stake and Vatican politics very much at work. And for some, there is speculation about whether an ultra conservative Catholic group called Opus Dei is among the players in making the next selection. If you read Dan Brown's best-selling novel, "The Da Vinci Code," you've already have run across Opus Dei. And if you heard about it from the book, the Vatican says you heard about it wrong.
James Martin's going to fill us in on Opus Dei and their role, perhaps, or lack thereof in choosing the next pope, the nonfiction version. He is associate editor of "America," a weekly Catholic news magazine.
Welcome to the program. Nice to have you with us.
JAMES MARTIN, "AMERICA" MAGAZINE: Thank you. Nice to be here. CAFFERTY: What were the -- what were the misconceptions about Opus Dei in "The Da Vinci Code" and to what degree are they relevant, in your opinion, in the selection of the next pope? Pope John Paul II had a very high opinions of this group of people.
MARTIN: He did. He did. The problem with "The Da Vinci Code," was -- you know, I always want to point out that it's a novel, I mean, Dan Brown took a few, very few facts about Opus Dei, i.e. Opus Dei is a very powerful organization of the church, and spun this kind of crazy story about them being assassins and what-not, to the point where people sort of expect them to go around, you know, knocking people off in the Vatican, which is a little absurd.
CAFFERTY: No, but it's a great story.
MARTIN: Oh, it's a terrific story. I'm just, you know, keep -- I'm glad you said the nonfiction part. I'll try to tell you the nonfiction part.
CAFFERTY: OK good.
LISOVICZ: On a future episode we're going to have to talk about "Angels and Demons," which also delved into the Roman Catholic Church. The fact is there are a couple of cardinals who, right now, are going to be in the conclave, in a few days, and they are reportedly members of Opus Dei and then there's at least another cardinal who's sympathetic and then you have John Paul II who was a very conservative pope and sympathetic.
MARTIN: Right. But, I mean, before we run away with, you know, the idea that they're going to influence the election, it's good to remember they are -- they're a relatively small organization. They are very influential in the Vatican, but they are as influential as, say, the Jesuits and Franciscans and, you know, no one seems to be, you know, sort of, worried about them. I've been a kind of a critic of Opus Dei in the past, but I think, you know, Dan Brown's book is really, kind of, outlandish. And you have to keep in mind that they are -- that the cardinals themselves are their own men and when they go into the conclave, they're going to vote for whomever they want to vote for.
SERWER: James, I had no idea how orthodox Opus Dei was, reading about how they have separate entrances for men and women at their building, here in New York City. Does this suggest any sort of parallel to the rise of religious fundamentalisms in Islam and Judaism? I mean, is there a connection, here?
MARTIN: No, not really. I mean, that is one of the criticisms leveled against them, I think it's a fair criticism. They really delineate the roles of the sexes and they've done that ever since their foundation in the 1920s. I think, unfortunately, you know, they've sort of persisted in this separation, men and women do different things, and I think that really detracts from the way they appeal to people...
SERWER: Yeah, separate but equal, right? We have heard that line before, haven't we?
MARTIN: Well, in Opus Dei, I think it's, unfortunately, separate but unequal.
SERWER: Yeah, well, that's what I meant. Yeah.
LISOVICZ: Yeah, we've heard it more, by the way. We have heard it more than your gender.
SERWER: A lot of groups -- different groups heard that before, actually.
CAFFERTY: What is the church going to be looking for when it comes, next week, to making this selection? Pope John Paul II was very high on Opus Dei, the little eccentricities that we've discussed here aside. But, is the church going to continue to look for someone who will follow in Pope John Paul II's conservative message of the liturgy. Are they going to look for someone more moderate? Are they going to look outside of Europe for someone? What's your best guess on what's going to happen when they go behind closed doors?
MARTIN: Well, I tell you, that's the $10 million question. I mean, out of those 117 cardinal, you have people who are looking for all of those things. You know, you have some people who are upset with the way that the curia has run the church. You have other people who think we need, you know, more or less a carbon copy of John Paul II. Each of the guys is also going to be coming with a lot of local concerns. You know, someone from Brazil is going to have a very different concern from the archbishop of Chicago. So, they're all going to be bringing those concerns in together. It is hard to say -- I would say you'll probably get someone who, like John Paul, was sort of very progressive in social justice, but also very conservative in terms of theology and church practice.
LISOVICZ: All right, James, the Roman Catholic Church has got what we call "mo," momentum, right now. So many people that were attracted, moved by the pope's life and his passing, and the church has an opportunity, here. A lot of -- millions of people consider themselves Catholics, but they didn't really follow what a lot of what John Paul II preached. How much of an issue is that going to be for this next pope?
MARTIN: Well, it's a huge issue. I mean, one person said they like the singer, but not the song all the time, and that, you know, as you say, he was very charismatic, but a lot of people, especially in the West and especially in the United States, you know, weren't crazy about what he was saying about women's ordination and homosexuality and, you know, a whole raft of issues. But, I think, the cardinals know that they need someone who's going to be not as charismatic, but who's at least comfortable with the media and comfortable with the crowds because John Paul has changed the papacy and made it into this sort of media-type entity, and the cardinals have to take that very seriously.
CAFFERTY: On the one hand, though, that's a pretty good thing for the church. And to the critics who claim that John Paul was too conservative, the response seems to have been it ain't the Catholics church, it's God's church and these teachings were handed down by a fellow named Jesus Christ and that they should probably not be tampered with by man and that the message of the church is to be true to its origins and true to its beginning, and I would guess that the desires of moderate American Catholics aside, whoever the next pope is, it's not going to be any easy feat to start changing the doctrine of Roman Catholicism when it comes to things like celibacy and women priests and all the other issues we've talked about.
MARTIN: Well, yes and no, I mean the fundamentals have to remain the same. The question is, what are the fundamentals, I mean, you know, if you look through the Gospels, you realize Jesus doesn't say a lot about contraception or homosexuality or receiving communion or something like that. By the same token, you know, you to remember that the Second Vatican Council changed a lot of stuff, you know, almost overnight. I mean, we went from having a Latin mass to, you know, you turn around the next year and it is in English, which is, you know, fundamental to the Catholic belief. So, a pope can change a lot and a lot can change in just a few years. I think people have forgotten that since we've had the same pope for 26 years.
CAFFERTY: We've been talking with James Martin who is the associate editor of "American" magazine. It's good stuff. Thank you very much for being with us.
MARTIN: You're welcome.
CAFFERTY: All right. When we come back on IN THE MONEY, rocking the system: If proposed intelligence czar John Negroponte gets the job, he'll have to shake things up or risk getting himself shook up, if you get my drift. We'll check out the situation.
Plus, have hog, will travel: Harley-Davidson, one of America's great brands. See what Wall Street thinks about its latest announcement.
And when you drive, the rest of us go along for the ride: You didn't know that, did you? We'll show you a website that will tell how your behavior affects the rest of us on this planet.
(BEGIN VIDEO CLIP)
JOHN NEGROPONTE, DNI NOMINEE: The specific recommendations I will make to the president will require careful study and engagement that is not possible prior to confirmation. That being the case, I am not now prepared to describe in detail exactly how I plan to carry out the job of director for national intelligence.
(END VIDEO CLIP)
CAFFERTY: John Negroponte did not spell out exactly what he would do if he's confirmed as the first intelligence czar, but the Senate Intelligence Committee seems to be satisfied with his testimony anyhow, and now it's a pretty good bet that he's going to be confirmed for this post. So, what should he be doing his first day on the job? Stansfield Turner is a former director of the Central Intelligence Agency. He joins us now with a look at the task ahead.
Mr. Turner, it's a pleasure to have you on this program.
STANSFIELD TURNER, FMR. DIR. OF CENTRAL INTELLIGENCE: Thank you.
CAFFERTY: I found that answer a bit nebulous and as a taxpayer, kind of unsatisfactory. We're pretty much aware, after 9/11, of all of the intelligence failures that exist. We formed this huge Department of Homeland Security which was marketed to us as a solution to some of this stuff, now we have an intelligence czar who's charged with coordinating and overseeing all of the intelligence agencies. That didn't seem like much of an answer.
TURNER: Well, he shouldn't play his hand too fast. Let me read to you two sentences from a recent presidential commission report on intelligence. "The intelligence agencies are some of the government's most head-strong agencies. Sooner or later they will try to run around or over the new director of National Intelligence, Mr. Negroponte."
Negroponte, I would suggest, has a really tough row to hoe ahead because of this innate culture of the intelligence community and I can verify that from my own personal experience.
CAFFERTY: So, but let me -- forgive me for interrupting, but I mean, everybody seems passively aware, at least, that the -- part of the big problem in this country is the autonomy and abuses of power and stubbornness, down right stubbornness, that these agencies have inflicted on the taxpayers for a good long while, predating 9/11 by many, many years. Is the answer just to keep appointing people to oversee these agencies that aren't doing the job that they're supposed to be doing and aren't serving the needs of the people who pay for them, i.e. the tax payers?
TURNER: The answer is either by law or presidential executive order to give Negroponte enough authority to do the job.
CAFFERTY: Does he have that now?
TURNER: He does not have that. The law is a compromise. It is full of ambiguities and doesn't give him as much authority as President Carter gave me, and I had the same problem in trying to marshal these agencies together. I would suggest to Negroponte, he has got to establish his firm authority as a leader of the intelligence community the first day he's in office. And he should do that by being the one who, on that day, gives the morning briefing to the president of the United States.
LISOVICZ: Who, Admiral, does that now? Is it Porter Goss?
TURNER: Yes. But...
LISOVICZ: And why is that important? Why does he need to be in the Oval Office every day? Is that, you think, more important in getting everyone to cooperate or is that too big of a reach?
TURNER: First of all, it is it establishes the fact that he is the boss of the whole operation. Secondly his most important of two major responsibilities is to be the intelligence adviser to the president. And thirdly, he needs to be totally aware of what intelligence the president's being given by whomever. Even though he wants diverse views to get to the president, he needs to know what those views are so that he, as the principal adviser, can counsel the president with his best intelligence.
SERWER: All right, Admiral, you're head of the CIA. Suppose you're a McKenzie consultant coming in, you're looking at the FBI, the CIA, NSA, Homeland Security and you could restructure it any way you want. And let's remember, these agencies have not been around forever. The CIA is relatively new. How would you, if you could start with a clean piece of paper, structure this thing?
TURNER: The Scowcroft Commission that reported out way back in 2001 reportedly made a recommendation that three of the principal agencies that collect intelligence, and which are housed in the Department of Defense, be shifted over to the control of this new director of National Intelligence, Mr. Negroponte. I think that's a very good move, and I think they should do that, which will give him full control over these agencies that are so vital to collecting our information.
CAFFERTY: But, that's not going to happen, is it? I mean, Don Rumsfeld isn't going let go of the agencies that report to him because along with the agencies come the budgets and the budgets are not insignificant.
TURNER: And what you're saying is then that the president of the United States is not going to back up Mr. Negroponte as he has said he would.
CAFFERTY: Do you think he will?
TURNER: I don't think he will. No. But I think he must and I think he should.
LISOVICZ: So the real question then is not whether John Negroponte can do -- can prevent an end run by the little fiefdoms, it's whether President Bush will really show some backbone on national security with his new hire?
TURNER: It is a combination. Negroponte's got to be very deft in this, he's got to be very firm in this, but if he does not have the backing of the president on the first crisis that comes up between him and Rumsfeld, he's going to be in trouble for the rest of his tenure.
SERWER: So, what would Negroponte end up doing then? I mean, how does this play out?
TURNER: Well, first of all, he should be given full and exclusive budget authority, which President Carter gave to me. That meant that I could prepare the budget for all 15 intelligence agencies and if...
SERWER: Fifteen? Wow.
SERWER: That's a big number.
TURNER: Eight of them housed in the Department of Defense. And I could present that budge to the president. Secondly, President Carter gave me authority to direct the collection agencies to say to the National Security Agency, these are the signals intercepts that we want, to say to the CIA, these are the human intelligence details that we want to learn, to direct them where to focus their attention and their resources.
LISOVICZ: One can only hope, that is for sure. Admiral Stansfield Turner, he knows what he's talking about because he's the former director of the Central Intelligence Agency.
Thank you for joining us.
LISOVICZ: And remember to stay tuned to CNN day and night for the most reliable news about your security.
Coming up after the break, the suits check out the leather jackets: Let's see what Wall Street thinks of Harley-Davidson after the company's latest news.
Also ahead, the big brain-drain: Economists and author Richard Florida says we're losing top talent to emerging economies. What do we need to do to win them back?
And got a favorite for the next pope? Alan Wastler is going to tell us how you can, yeah, put your money on it.
LISOVICZ: Now let's take a look at the week's top stories in our "Money Minute." The bankruptcy bill is on its way to the president's desk. The House approved the refoarm legislation Thursday afternoon. The vote was 302-126. The Senate okayed the measure last month. The president is expected to sign it into law early next week. The bill makes filing for bankruptcy more difficult. Nearly 1.6 million people filed for bankruptcy in 2004 alone.
The clock has run out on procrastinating tax payers. The deadline to get your tax return in the mail rolled in at midnight, Friday. The IRS estimates that 13 million people wait until the last day to send in their returns. This reporter included.
And IBM investors are feeling a little blue. The company reported first quarter earnings Thursday that were weaker than expected. IBM blamed a slowdown in sales last month for the short fall. IBM shares took a hit -- big hit on the news. SERWER: Also making headlines this week, a rough ride for Harley-Davidson. The motor cycle maker slashed its profit and production targets this week blaming flat U.S. sales. Shares went downhill fast falling 17 percent on Wednesday, the greatest percentage drop in 13 years. And that makes Harley-Davidson our "Stock of the Week."
You know, this company had a great ride, pun intended, for the longest time, it sold to guys with midlife crises. The average age of a Harley rider is 50-years-old. The kids go to college and you tell your wife, I'm buying a Harley. I'm sorry, Susan, but that's pretty much how the business model works.
LISOVICZ: I have a girlfriend who rides a hog, OK?
SERWER: All right, they're women riders, OK?
CAFFERTY: But, what happened? There was a waiting list to get these things a couple of years ago. You couldn't get a Harley- Davidson unless your name was on some list. Now all of a sudden they're announcing production cut backs, their earnings are going to be flat. What happened?
SERWER: Well, people are wondering if there ever was going to be a saturation point and the company would say no, because you're always going to have a new crop of 50-year-olds coming up.
CAFFERTY: Of insecure, middle aged men.
SERWER: Insecure men, yeah.
CAFFERTY: Yeah, an endless supply of those.
SERWER: Yes, there is. But, I think that that may be part of the problem. And you know, they're a victim of their own success, also. I mean, the stock, for instance, has gone from $10 to $46, even after the drop over the past 15 years. On and on and on with the merchandise and the t-shirts, and at some point you are going to hit a wall, and the company hit the wall.
LISOVICZ: It was such a darling, too. I mean, it was ready for a fall. On Wednesday when that news was disclosed to us -- also the day when we got the news retail sales were weaker than expected -- so the market, the Dow ended the day, triple-digit loss. Harley ended the day down with a new 52-week low, down 17 percent, one of the most actives and the biggest fall in the company's history. One of the problems that has analysts worried, is credit losses, too. People who were buying Harleys aren't able to make their payments.
SERWER: That's right.
CAFFERTY: What do their motorcycles cost these days? They're a lot, right?
SERWER: I think they're $15,000 to $20,000. I could be wrong.
CAFFERTY: Not like when we were kids.
SERWER: Right, and you know, you hit on something very important, because their finance business like, GM and like Ford, they have a big finance business, it's a very important and very profitable part of that company. Analysts have been saying they're getting too much money doing loans, and not as much money as people think selling bikes.
CAFFERTY: Could you get the oil situation into a conversation about Harley-Davidson? They get 70, 80 miles to a gallon versus cars, if you don't mind cleaning bugs off your teeth, it's a way to save a few dollars.
SERWER: Yeah, I think -- but, I really think these were, you know, weekend warriors, Jack. I mean, these are people, they got a car, they probably have a big pick-up truck or something to go with it.
CAFFERTY: A Hummer.
SERWER: Right, exactly. A big Hummer
LISOVICZ: Well though, predictably the company blamed the short fall in sales to the delay of spring weather, so you can't ride a Harley. If you are in Minnesota...
CAFFERTY: It's always the weather, right.
LISOVICZ: Yeah, that's right.
CAFFERTY: It's always the weather.
LISOVICZ: If you're selling something. You can blame it on the weather.
CAFFERTY: It's just, you know, it's an emotional story. I mean, Harley-Davidson, they should always do well.
LISOVICZ: An American icon.
CAFFERTY: Yeah, they should just always do well.
SERWER: It's the great American brand.
LISOVICZ: And you know, one of the names of their hogs is "Fatboy."
LISOVICZ: Classic. SERWER: Soft tail -- that's another one, actually. But, you know, out of Milwaukee, Wisconsin, I remember the CEO, Jeff Bluestein, they used to ride those things around.
CAFFERTY: Did they make those t-shirts that read, "If you can read this..."
CAFFERTY: They do.
SERWER: They might. I don't know. We shouldn't say it. Those are good t-shirts, though.
CAFFERTY: Somebody fell off
LISOVICZ: They also say something like, "Put your butt on some class," and instead of butt, it rhymes with class.
SERWER: All right, I think it's time to wrap this up.
SERWER: They're not telling me to wrap this up, but I'm going to wrap this up.
Coming up on IN THE MONEY:
Maybe there's something in the water: We'll speak with an author who says that Austin, Texas, that's long horn country, is the top U.S. city for business creativity.
And later, finding a job that fits: Get the low-down on a new magazine that might be able to help.
VERJEE: I'm Zain Verjee at the CNN Center in Atlanta. IN THE MONEY continues in 60 seconds, but first a check of the headlines now in the news.
New developments in the search for 13-year old Sarah Michelle Lunde. A short time ago police announced that they found a body near Lunde's home but they have not yet determined the identity of the remains. Until they do though, they are suspending the search for Lunde. The teenager disappeared from her home nearly a week ago.
Security is tight in Washington, D.C. as demonstrators protest the policies of the International Monetary Fund and the World Bank. Both the IMF and the World Bank are holding their spring meetings. Protesters say bank policies benefit rich countries while hurting the world's poor.
Japan's policies are angering protesters in China. Some 20,000 demonstrators took to the streets today, defying government warnings to stay home. They are angry about Japanese textbooks they say down- played Japan's wartime atrocities. Protesters also oppose Japan's bid for a permanent seat on the United Nations Security Council.
And an emotional day at the Vatican. Cardinals destroyed Pope John Paul II's ring and seal formally ending his reign. Today is the last day of the official nine-day mourning period following the late pope's funeral. Cardinals begin their conclave to elect a successor on Monday. I will have all the day's news at the top of the hour. Back though now to IN THE MONEY at CNN.
LISOVICZ: America has the strongest economy in the world, but some experts wonder how long we can stay on top in an evermore global market. Our next guest doesn't think outsourcing is the main problem. He says the shrinking group of talented and educated Americans is the real danger. Not only are fewer young Americans going into the sciences, but those who do, have more and more opportunities to work overseas. Professor Richard Florida warns of America's brain-drain in his new book, "The Flight of the Creative Class." He joins us to talk more about it from Washington, D.C. Welcome, professor.
RICHARD FLORIDA, PROF, GEORGE MASON UNIV: It's great to be with you.
LISOVICZ: So the title of your book is interesting because we hear a lot about educational standards declining because of fewer students excelling in sciences and math. On the other hand, you are talking about creative. Is that a play on words, or can you explain that?
FLORIDA: These creative people, the scientists, the technologists, the innovators, the entrepreneurs who built our businesses plus the people in the entertainment and financial industries are what power growth. In the United States and across the world, they compose about a third of the work force and get this, they account for about 50 percent of all the wages paid to people. So they are really the economic growth driver and they're going to generate the new jobs over the course of the next coming decades.
SERWER: Richard, I think you were talking about being down in New Zealand with the "Lord of the Rings" crew and that people had a lot of American accents and all that and that was sort of a sign that people going overseas. But aren't those people just over there temporarily? I mean sure there are a lot -- Honeywell has people stationed in India. They are still Americans paying American taxes.
FLORIDA: The main point of the book is not that Americans are leaving this country. It's that we have become critically dependant upon foreign talent because we're not producing enough of our own. The book says if we look at the Silicon Valley high-tech industries, 30 percent of those companies founded in the 1990s were founded by an entrepreneur who was born in another country. We wouldn't have Google, we wouldn't have Hotmail, we wouldn't have eBay in the United States, we wouldn't have Yahoo! or Sun Microsystems. We wouldn't have open source software here if it wasn't for a foreign-born person who came here to start those companies. What the book says is that what's really threatening America is now for the first time, those people have options elsewhere and even more worrisome, perhaps we are restricting their ability to get here in the first place.
CAFFERTY: In what way?
FLORIDA: We have really, really put down some strong restrictions. I mean, I understand, I grew up in New York. I actually did a lot of work after 9/11 with helping to re-shape thinking about the site. We have restricted, we've become overwhelmed with homeland security. We are restricting, you know, every visa officer lives in fear they are going to let in the next terrorist. But in reality --
CAFFERTY: Except for the ones that are in charge of the Mexican border.
FLORIDA: That's a whole other question that we can get into. But the bigger threat that I think the Mexican border or outsourcing is the fact that the talent and the people that have driven our economy's growth over the past century are for the first time choosing perhaps not to come here.
LISOVICZ: Can you give us some hard numbers on how restrictive it's become post 9/11?
FLORIDA: We have seen about a 50 percent drop in visas granted. We've seen about a 30 percent drop in visa applications from those top-notch scientists and engineers and worst yet, the foreign students, a lot of this entrepreneurship in the United States come from people who come to MIT and Stanford and Berkeley and then go off and found companies. Foreign student applications are down by more than a third at our top universities. John Doerr, the great venture capitalist, always says, when a foreign kid graduates Stanford or MIT, we should staple a green card to their diploma and I agree with that. Instead we're telling them to go back to your country because we don't want you here.
SERWER: Are you really sure because I mean, you go to a college campus, you see more foreign students now than ever. Maybe we are down a little bit from this high-water mark say in 2000. But say compared to five or I mean 10 years ago, aren't there just a heck of a lot more foreign students here?
FLORIDA: Certainly since 1960. We have about 585,000 foreign students on our campuses which looks like a lot. But if you take the next four or five countries combined, they have about 750,000 foreign students. Australia, New Zealand, we mentioned that. The United Kingdom and these other countries are aggressively pursuing these kids. Plus, we can't count this out, the Indians and the Chinese who provide so much of our technical talent are saying the heck with you guys. We want to attract and retain our own best and brightest here and start those companies in Bangalore and Shanghai. The point of the book is nobody has to take over the whole ball of wax. But if we lose, 2, 3, 4 percent of the talented entrepreneurial people who used to come here to a bunch of countries, the numbers add up really quickly.
CAFFERTY: And the lack of ability to apparently produce our own students inadequate numbers who are interested in things like science and math. I was watching a commercial, I think it was for Exxon. Phil Mickelson was fronting it during the Masters Golf Tournament, suggesting that we are running out of kids in science and math who are going to be available to do the kinds of things that you are talking about and that we currently depend on a lot of foreign people to do. I suppose addressing the short-comings of the American school systems in conjunction with this conversation might be germane or is it?
FLORIDA: No. We are out of kids. I mean we depend on foreign- born talent. Right now for 50 percent of all our working computer scientists, 50 percent of all our PhDs in the life sciences and 40 percent of our PhDs and you know what's even worse? Our scientific and engineering work force is a Baby-Boom work force. About 40 percent of those people are going to retire in the next decade or maybe two decades. We don't have a pipeline to fill the gap. So yes we have to fix our education system.
But in the short run, we only have one place to look, this talented and entrepreneurial group of foreign people who have come and help build our country. If we cut back now as we are, we're going to face a critical deficit. Jack, the way I like to put it is, everyone on the Hill is concerned about the budget and the trade deficits, the twin deficits. I think this talent deficit produced by our schools that don't funnel kids into science, engineering, and worsened by the fact that we're clamping down on the one thing that has saved us, the foreign kids, who have filled this third deficit, is going to come back and bite us in a worse way than the other two deficits combined.
LISOVICZ: That is a scary image that you paint. Richard Florida, author of "The Flight of the Creative Class, the New Global Competition for Talent." Thanks for joining us.
FLORIDA: It's been great being with you guys.
LISOVICZ: There's lots more to come here on IN THE MONEY. Up next, making work feel less like work. We'll hear about a magazine that's out to help you land a job that matters.
And let's not tell the Vatican you can bet on who will be the next pope if that's your kind of bet. Money.com's Allen Wastler will have the details.
SERWER: It's a conflict that many young Americans face when they start looking for their first job. Should they choose a career path that's personally meaningful without a big salary or work towards the high-paying jobs that don't particularly interest them. What about a low-paying job that doesn't interest you? Never mind. It's the passion versus the pay-check dilemma and our next guest says the passion part is winning out in our post 9/11, post Enron world. In fact, he started a new magazine to help people build careers tailored to their interests and values. Kevin Salwen is a former "Wall Street Journal" reporter and a co-founding editor of "Worthwhile" magazine which just started to hit the stands. Kevin, welcome to the program.
KEVIN SALWEN, WORTHWHILE MAGAZINE: Thanks and I have some breaking news here I've got to tell you guys.
SALWEN: The glass is half-full.
SERWER: Good. That's nice to know because some of us had thought that the glass was half-empty.
SALWEN: There you go.
SERWER: Tell me. Why would people be interested in reading this kind of a magazine?
SALWEN: Well, because if you see what we do in our personal lives and in our social lives, we so naturally gravitate towards the things that we love, the things that really energize us and charge us up but then we take it over to the work side and we say, wait a second. This is work with a capital W and I am getting paid for it and so therefore it has to be horrible and it has to be a sacrifice of my hours for dollars and have no meaning and connection to my life. I am going to take issue actually with your opening on this. We actually believe that once you start to do the thing that drives your passion, you will actually make money at it because your passion will come through.
CAFFERTY: That's a nice idea. I just, I have had a two-year running conversation with my 24-year-old daughter who graduated from college and got into this long diatribe about how she wanted to fly around the world on a private jet doing international law. I said, that's really cool, but in the meantime, do you have a job because there's this thing called the rent that has to be paid.
LISOVICZ: What about daddy?
CAFFERTY: Daddy's the reason the conversation lasted two years. My point is this. The job market ain't full of things that we would all like to do. The job market can be a little tight, particularly for young people with no experience. What about this idea that you go out there and get in the game and worry about satisfying your emotional needs after you get the rent paid and buy a new pair of shoes and start taking care of yourself?
SALWEN: Hey look. Let's make sure you understand. We are not saying that life is a place that never has to -- where you never have to sacrifice. Sometimes you do and oftentimes that kind of time horizon that you are looking at ought to be something like five years. I'm taking a job that will help me build toward what I really dream of. That way, you know, we can go back to sort of what's my core? If I have a realistic set of goals, and I can build toward those sets of goals, there's absolutely no reason why your daughter can't have her fly around the world as an international lawyer as a set of goals in her life. And then start somewhere to pay her dues in a way that actually makes sense.
LISOVICZ: Kevin, I would like to believe that the glass is half- full. But in terms of "Worthwhile" magazine, there are others, competitors, much bigger competitors out there that sort of preach this stuff. Like, "Oprah" Have you ever heard of it, "Oprah" magazine? "Real Simple." They have talked about living and making a difference. Living and making a difference. So as a former "Wall Street Journal" journalist, what's your game plan? What are you charging? What's your circulation? Where do you see yourselves going?
SALWEN: Our circulation now is about 100,000. We are getting people who are white collar folks. They're 25 to 54. They are affluent and here's what's happening with "Oprah" and "Real Simple." We actually think those are marvelous magazines and in many ways, we take our cues from them, but all these publications and including some of the men's side of the table as well, they take you up to the office elevator door. They say, we are going to be happy. We're going to live a more fulfilled life. You get to the office elevator door, you check your values and they all wave good-bye to you and say, we will see you at 6:00 together we will be happy again.
We just think that's an impractical way to live your life. You can no longer compartmentalize. This is my work life. This is my life life. It's all one seamless life. And that's why, if you look, we are doing eBay at 2:00 in the afternoon and we're answering e-mails at 10:00 at night. We understand it's a whole life. But what's happened in the magazine space in particular is that, there's these great social side publications like "Oprah" and "Real Simple" as you mentioned and then there's the business side publications, "BusinessWeek," "Fortune," "Forbes," that are all about operations and earnings and strategy and things like that, all the stuff from the neck up. What we are saying is, bring your heart and soul, the one heart and soul that you have and bring it to your work. So we are sort of combining those concepts. We actually think by doing that, we have created a completely different kind of publication that speaks to people on a different level.
SERWER: Kevin. Just one point. I work for "Fortune." We are a full body magazine. We are not just from the head up. Anyway.
SALWEN: You are really good at the ankles.
SERWER: Thank you. We appreciate that.
LISOVICZ: I'm going to leave that one alone. Kevin Salwen is the co-managing editor of "Worthwhile" magazine. It has been worth while talking to you. Thanks for joining us.
SALWEN: Great to be here, thanks.
Coming up, are you a two-planet person or a four-planet person? Find out how many planet Earths you need to support your eating habits on our "Fun Site of the Week" and write to us about the state of the world or just your state of mind. Send us an e-mail at this address, email@example.com. But first this week's "Money and Family."
LISOVICZ: Last year's bathing suits are about to make a reappearance but don't panic. We've got some tips that will help you find the best gym deal around. Join at the right time. Usually the best gym deals are offered after the New Year in January, right before the beach season in March and just before school starts in September. Be patient. Waiting until the end of the month may save you some cash. Clubs may offer better deals depending on sales quotas. Always ask about special packages. Gyms often offer family memberships and special rates for those over 50 years old. Take advantage of free guest passes. It's the best way to comparison shop. And finally, know your rights. Read the membership waiver and the fine print. Make sure you know about all of the fees. Good luck.
I'm Susan Lisovicz for "Money & Family."
CAFFERTY: There are one billion Catholics around the world but the number of people with something at stake in the upcoming papal election is even bigger than that. Allen Wastler has details and an eco-friendly "Fun Site of the Week." How are you doing?
ALLEN WASTLER, MONEY.COM: I'm doing fine Jack. So you want to bet on the papacy?
CAFFERTY: All eyes on that smokestack.
WASTLER: All right. If you go -- I've talked about these before, but my offshore speculations. I mean, you can call it trading in futures contracts or you can call it betting, OK? There are basically 100-point contracts, but a dime a point or a buck a point, depending on what denomination you want to do, denomination meaning money. They have contracts for each and every outcome of the papacy. Right now, we got Europe running at 62 percent. The next pope will come from Europe.
LISOVICZ: I heard that the pendulum has swung to South America.
WASTLER: It's swinging a little bit. Brazil is in there now at about 16 percent, Africa, 9 percent. Interesting, if you go through the slices, Europe will change. The moment you go OK, which country in Europe, then it changes. Germany all of a sudden at 16 percent, Italy at 10 percent. But if you follow the Africa, Africa is at 9 percent up at the top rank. They say, what country in Africa? Nigeria, 9 percent, OK, which cardinal, Arinze, 9 percent, so he is carrying that.
CAFFERTY: As an individual candidate, he is very strong. WASTLER: Very strong as an individual candidate and if you look at the contracts and piece them out, it's kind of interesting to watch. Can you put any stock in these things? They were pointing at Bush through the entire election run-off and they got every state right, all 50 states.
SERWER: So who's the favorite? Do you know who the favorite is now?
WASTLER: Right now, it's Ratzinger from Germany. He's sort of coming up.
SERWER: Wow, a non-Italian.
LISOVICZ: Let me ask you this. If the conclave ends up taking a number of days as opposed to very quickly, are there different candidates for that?
WASTLER: Yeah and actually the contracts it's really neat, because when you get down to the individuals, that's when they'll get really, really lively and they'll start paying off back and forth and getting closer, you'll see someone getting closer and closer to that magic 100 mark. That's where you're not making any money anymore so why bother betting?
CAFFERTY: I'm not sure that it's supposed to be about whether you make money or not, except you are on IN THE MONEY where we've reduced it to that.
What about the "Fun Site of the Week?"
WASTLER: OK. Now we'll get a little bit more mother-earth oriented. We have earth day coming up so we found an interesting site.
CAFFERTY: Is it here again already?
WASTLER: You can go through it and ask and answer a number of questions about your lifestyle and it will give you a readout on how much of the Earth's resources are you using. So you start off with one, we got a few we can show you Jack. Food, are you a big meat- eater? Are you a vegan?
LISOVICZ: I don't think Jack is a vegan.
WASTLER: I went through and I said, I pretty much eat meat all the time. I'm sorry, I know it's wrong. I do. Do you do processed food? That was another one of the questions.
SERWER: You do. You eat Cheetos. Is that's processed?
LISOVICZ: That's not organic.
WASTLER: And most of the food you eat comes from somewhere else. They also ask you about your transportation habits, how you commute, 200 miles. CAFFERTY: Why I do think I'm not going to do well?
SERWER: You are a bad man, Jack.
WASTLER: I went through and I figured, you and I are probably pretty simpatico on a lot of this. We aren't big tree hugger types. So I went through and answered it and I apologize, I'm using up 27 acres for my kind of lifestyle. If everybody was the same as me, we would need 4 1/2 planets.
SERWER: We would have to colonize Mars.
CAFFERTY: But we don't have 4 1/2 planets, so the rest of you will just have to make-do with less. And they are. It will work out.
Coming up next on IN THE MONEY, it's time to hear from you as we read some of your e-mails from last week. And you can send us an e- mail now if you would like to. We're at InTheMoney@CNN.com.
CAFFERTY: Time now to read some of your e-mails. Our question of the week was, what is the biggest obstacle keeping us from reducing our dependency on oil?
A viewer named Noah wrote this, you and I, buy a hybrid, an electric car or a fuel cell car. Show Detroit they can profit from these vehicles and let capitalism do the rest. Another viewer, Mike wrote this, one of the biggest obstacles keeping us from reducing our dependency on oil is the oil companies. Why would they want to cut profits and the political power they now enjoy? And Ryan writes this, the politicians and their friends at the oil companies. It's time for the politicians to pressure OPEC and the oil companies executives to get off their butts and produce. Yeah, that'll happen.
Next week's e-mail question of the week is as follows. Will the high cost of oil have an impact on your travel plans this summer? You're your answers to InTheMoney@CNN.com. And you should also visit our show page at Money.com/InTheMoney which is where you'll find the address of our "Fun Site of the Week," the odds on who the next pope will be.
Thank you for joining us for this edition of the program. My thanks to CNN correspondent Susan Lisovicz, "Fortune" magazine Editor- at-Large, Andy Serwer, and Money.com Managing Editor Allen Wastler.
Join us next week, Saturday at 1:00, Sunday at 3:00, all Eastern time. Or you can catch Andy and me all week long on "AMERICAN MORNING" which begins at 7:00 Eastern time.
Until the next time, thanks for watching.
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