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CNN IN THE MONEY
Analysis of U.S. Spending to Prepare for Nuclear Attack; New National Healthcare Plan: Don't Get Sick; Preview of Summer Blockbusters; Fire at Fifty: Out with the Old and Wise, in with the New and Cheap
Aired May 7, 2005 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN ANCHOR: And here are our top stories. President Bush is due to arrive in the Netherlands in a few minutes. Earlier, in Latvia, he praised the three Baltic leaders for their democratic progress. Referring to the Soviet annexation of those countries, the president said, it's time to move beyond that painful past.
The U.S. reportedly is pressuring China to cut of North Korea's oil supply, but "The Washington Post" says Beijing rejected the idea. This comes as U.S. intelligence has indicated North Korea might be preparing to conduct a nuclear test. The paper says the Bush administration thought adding pressure might prompt North Korea to return to six-party talks on its nuclear program.
The U.S. Embassy in Iraq says twin car bombings in the heart of Baghdad today killed 22 people. They targeted a convoy of SUVs. Two American contractors are among the dead, and, in Western Iraq, a roadside bomb killed a U.S. Marine.
And police will take another look at the two-year crime spree that left 29 boys and young men dead in the Atlanta area. Nearly 25 years ago, Wayne Williams was convicted back in 1982 in the deaths of two young adult males and police closed the other cases, pressuring him to be responsible.
But now a suburban Atlanta cold case squad will review five of the child slayings.
I'm Fredricka Whitfield at the CNN Center in Atlanta. More news at the bottom of the hour. Keeping you informed, CNN, the most trusted name in news.
IN THE MONEY begins right now.
ANNOUNCER (voice-over): 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," bomb-proofing America. That noise you hear in the distance is the sound of sabers rattling. We'll look at whether this country is doing enough and spending enough to prepare for a -- God forbid -- nuclear attack. Also ahead, how the health-care system can bleed you dry. We'll talk to Barbara Ehrenreich about why she thinks it's only going to get worse.
And a bat, a bug and a bunch of guys with light sabers, a preview of this summer's blockbuster movies and how they might play -- or not -- at the box office.
Joining me today, a couple of IN THE MONEY veterans, CNN Correspondent Susan Lisovicz, "Fortune" magazine editor-at-large Andy Serwer.
Only on Wall Street is good news not always good news. We had a great jobs report on Friday. But people who are watching the Fed will tell you this is the kind of report that will allow them to continue to raise interest rates 25 basis points at a time without worrying about overdoing it and slowing the economy down. So a good jobs report, if you're looking at the Fed, might be a not-so-good jobs report.
ANDREW SERWER, EDITOR-AT-LARGE, FORTUNE MAGAZINE: Well, I don't think this is going to change anyone's mind at Federal Reserve. I mean, they are going to be raising interest rates. That is what they are doing, and this is certainly going to reinforce that notion, I think, Jack. The economy seems to be picking up.
But I'll tell you I never remembered being in a period where it is sort of this confusing where you have people one week concerned the economy's slowing down and a bunch of other people worrying the same week that the economy's overheating. It is little confusing.
SUSAN LISOVICZ, CNN CORRESPONDENT: Right, but this was the missing link with the economy, let's face it, and we saw a lot of strength in the housing sector. We saw corporate profits that did terrific. But jobs -- additions to the job -- labor force just weren't happening. So this is terrific.
So, when you talk about the Federal Reserve and raising rates, thank goodness it came out after the Fed raised rates a quarter point. It might have been a half a point. So now the question...
CAFFERTY: Or three points.
LISOVICZ: Now the question is: Is it sustainable, and what will the Fed do in the future?
CAFFERTY: Well, and, if it is sustainable and if we get two or three of these kinds of numbers in a row, then the Fed's going to take a second look, and the thing we were talking about at the beginning could happen.
However, it's not going to happen today, and we will continue to watch and report back to you at a later time.
SERWER: Yes, we will.
CAFFERTY: We have other fish to fry, as they say.
A nuclear attack is one thing that nobody wants to think about, but there's a report in The Washington Post this week suggesting that America ought to be thinking more about it than we are. The paper says the United States hasn't gone as far as it should in preparing for a possible nuclear stripe.
That word came as the U.N. held a conference on the Nuclear Nonproliferation Treaty and came at a time when North Korea and Iran are going lively along, raising Washington's collective blood pressure, by continuing to work on their nuclear activity.
Jon Wolfsthal is going to give us some perspective on that. He's the deputy director for nonproliferation at the Carnegie Endowment for International Peace.
Jon, nice to have you with us.
JOHN WOLFSTHAL, NONPROLIFERATION DEPUTY DIRECTOR, CARNEGIE ENDOWMENT FOR INTERNATIONAL PEACE: Thank you for having me.
CAFFERTY: In 19 -- I don't remember the year -- 1985 or '86, when it was determined that Iraq was developing a nuclear weapons program, the Israelis, who live right next door, said, well, that's not satisfactory, and they went in and took the thing out with a couple of fighter aircraft overnight, and that was the end of that nuclear weapons program.
Rather than sitting back and waiting for someone to launch a nuclear strike against the United States, there is a school of thought that suggests that perhaps if North Korea and Iran don't want to listen to reason on this stuff, maybe the Israeli way is the right way to proceed. What do you think?
WOLFSTHAL: Well, I think that's the sort of thinking that got us into Iraq, and we find that it's not quite as easy as some would have us believe. I think it's important to point out that, yes, the Israelis did strike the Iraqi program back in 1981, but, in fact, that program just got driven underground, and, in 1991, Iraq was within nine months of having a nuclear bomb.
So you can't bomb these programs out of existence in states, you can delay them, but there are consequences, and I think there's another side to this threat, which is the nonstate actor. We now know that there are subnational groups that are patient, that plot, and that have access or potential access to the materials to make nuclear weapons.
There are hundreds and hundreds of tons, enough for thousands of weapons, scattered all over the planet that aren't adequately secured, and I'm not sure how you can target the terrorist. What we need to do is lock down that material and make sure it doesn't go missing.
LISOVICZ: In your view, Jon, is that the greater threat? You know, there's a lot of attention focused on these, say, rogue state, but is it really the more likely scenario that some rogue people will just come and get their hands on this and, in fact, try to detonate one of these devices?
WOLFSTHAL: Well, I don't think it's an either-or situation. It's sort of like saying, well, you know, should we focus on curing cancer or, you know, the common cold? We need to do both.
There are states out there that are trying to get nuclear weapons or that had recently acquired nuclear weapons, like North Korea, and we have to be focused on them. We need to make sure our military's adequate, our preparation's adequate and that we are focused on trying to turn those programs around.
But, at the same time, we now know in a way we didn't 10 years ago that these small groups out there that are either interested in causing apocalypse or just damage have access to nuclear technology. The material is not as well secured as it has to be, and we're not moving quickly enough to prevent this.
In my view, I think the subnational threat, the terrorist threat is more likely, but we also have a big problem in the long term with more and more states being interested in nuclear weapons as a way of ensuring their security.
SERWER: Jon, isn't it interesting, I mean, when I was growing up, protecting ourselves from a nuclear attack meant crawling under a desk in those school drills, when Jack was a young man, and -- but the mentality, of course, has to change and has changed completely. We were worried about a nuclear attack from Russia or China coming from an airplane. That seems extremely unlikely.
It also to me seems extremely unlikely that North Korea would attack us that way. Is that at all likely, or, really, isn't the whole thing just some terrorists coming into one of our cities, sneaking a bomb in? Is that possible?
WOLFSTHAL: Well, I think, unfortunately, it is possible. The only way we can prevent nuclear terrorism is by preventing the bombs from going missing in the first place. You know, look at what we've tried to do to seal our borders against immigrants or drug trade.
Once the bomb goes missing and is on its way to us, odds are it will get through, and, once it goes off, there's very little you can do in terms of consequence management. This isn't like a tanker trailer derailing, you know, on the train tracks.
So, you know, we do have much more to do in terms of locking this material down. The mindset has changed. Although we're not facing the type of bolt-out-of-the-blue, coordinated nuclear attack we worried about from the Soviet Union for decades.
The Russians still have hundreds of nuclear warheads on hair- trigger alert. So do we. Accidents can happen. Their radar systems are failing. So we do still face these sort of risks, and I think the problem is the American people don't understand them, and I don't think our government's moving quickly or concertedly enough to deal with them.
CAFFERTY: What should they be doing?
WOLFSTHAL: Well, there are so many things that we have to do, and we need to be much more aggressive. I think the first thing we need to do is treat every kilogram, every pound of nuclear material anywhere in the world as if it were a bomb waiting to happen, and we need to lock it down. People have used the Fort Knox analogy.
I think whatever security standard we use, we need to be much more aggressive. The current time line is that we won't complete that job, in Russia alone, for another four or five years. I think that's unacceptable. We need to move and get it done much more quickly.
At the same time, I think we need to do a much better job at training our first responders here in the United States. We need to do a much better job of sealing our ports. We also need to do a much better job of coordinating with our allies around the world for these state problems. You know, North Korea and Iran are not going to be the last countries to go nuclear.
Countries in the region are going to see what they did and try and follow suit. So we need to work both on the diplomatic side, on the military side, and on the country by country side to make sure that these threats don't emerge.
CAFFERTY: Jon, we're going to have to leave it there. I appreciate your input. It occurs to me -- and we can get into a whole discussion of why we talk about securing the port -- I mean, we don't even secure the border. People coming into this country virtually willy-nilly, at will, carrying who knows what. You know, we really do have a long way to go. Thank you for being with us. We'll talk more.
WOLFSTHAL: My pleasure.
CAFFERTY: Jon Wolfsthal, deputy director of nonproliferation at the Carnegie Endowment for International Peace.
When we come back, tough medicine for a sick system. Boy, there's a lot of problems. Health-care casts are rising so high, they can leave you bankrupt. Ask General Motors. We'll speak with author Barbara Ehrenreich about finding a fix.
Also ahead, gray days. See why so many workers are getting laid off around the age of 50 and finding it so tough to bounce back.
And that's the way the wookie tumbles. Find out if the summer films Hollywood's counting on to bring home the box-office gold will get the job done. The wookie tumbles more in a moment.
CAFFERTY: It may surprise you to hear -- or maybe it won't -- Americans worry more about personal health-care costs than about a terrorist attack or about losing their job. That's a little scary. And that's what a new Kaiser Family Foundation poll has discovered. Our next guest says the fear is real. It may get worse before it gets ever. Author and essayist Barbara Ehrenreich says the U.S. health system is having a taxing effect on individuals and corporations alike. She joins us now to take a look at not just the bad news, but how much worse it may get.
Barbara, nice to have you with us. Thanks for joining us.
BARBARA EHRENREICH, AUTHOR, "NICKLED AND DIMED": Hi. Nice to be with you again, Jack.
CAFFERTY: How much worse is it going to get before it gets better? And I'm thinking of General Motors. Not only is it affecting you and me and Andy and Susan, some of the great corporate names in all the world are being brought to their knees by health-care costs. General Motors' obligation to the United Auto Workers Union is staggering in its size. Now GM's bond rating reduced to junk this week. The stock price at a 52-week low and probably headed lower. How much -- how bad's it going to get?
Well -- and this is a very strange thing about America, that we expect employers to provide health insurance.
CAFFERTY: But they always have.
EHRENREICH: Well, I know, but, you know, it doesn't make sense anymore. In other countries, they don't put that burden on the employers. It's part of the public sector. One reason it doesn't make sense, Jack, is that, you know, it used to be people had three, four jobs in the course of their lifetime, you know, after high school and college. Now people are likely to have 11 jobs. And each time, you know, you're losing health insurance in between or having to patch together a new system.
SERWER: Barbara, let me ask you, historically, why is it that we are the only western nation without nationalized health-care coverage? Where do you think that -- where does that come from?
EHRENREICH: You know, I don't know. It's a big mystery. But partly it's this commitment to the free market, there's free market should provide everything. There's some things the market does beautifully, but one of them isn't health care, especially when it comes to, you know, providing insurance and health care for low-income people or unemployed people. It just doesn't work.
LISOVICZ: Have you heard any proposals, Barbara, that make sense? Is there any hope there?
EHRENREICH: Well, yeah, we could just look across the border to Canada. They seem to manage. They...
LISOVICZ: But here in the U.S., have you heard any proposals?
EHRENREICH: Well, I don't see any proposals that I think are great. I mean, right now, there's this movement on in some states to require employers to spend a certain amount of money on health insurance, you know, just keeping the burden on the employer. I think that's a mistake.
And then there are states -- you know, there are groups and states that are investigating requiring making that state provide insurance for its people. Hawaii, for example, has a statewide, you know, public insurance program.
Or we can just say, hey, we've got Medicare. It covers the elderly, not very adequately, but how about just extending Medicare to everybody so you don't have to be 65 to get it?
CAFFERTY: You know, if the four of us can sit here on this timid little television program and discuss solutions, then it must not be beyond the grasp of the politicians in Washington. I'd like to think it's not beyond their grasp. There are political reasons that this issue is not addressed. Will you address what those issues are?
EHRENREICH: Sure. Yes. This -- it's the power of the big business interests in our messy, incoherent and, increasingly, as I put it in my recent column in the L.A. Times, dangerous health-care system.
We have the drug companies. They lobbied to get that new Medicare prescription drug bill that was passed -- to make sure there was a provision in it that said the government could not use its power to negotiate lower drug prices. You know, why throw away our power like that? But that's the power of the drug companies.
We have the big insurance companies -- Aetna, Cigna, Unicare, et cetera. They don't want any change. They're raking money in hand over fist from this system.
SERWER: So how do you ever see it changing? I mean, you have these vested powerful interests, the insurance companies, the pharmaceutical companies. The pharmaceutical companies are in a little bit of a weaker situation than they were 10 years ago. I guess you could say the same thing about managed care and insurance companies. Will we have a crisis? Will this erode? Will we limp on, slouch on to Bethlehem? What's going to happen here?
EHRENREICH: You know, I see citizen pressure changing this. It's -- you know, wherever I travel in the country, whether I'm talking to Democrats, Republicans, old people, young people, talk about health care -- everybody wants a universal health, you know, insurance system. They just want it out of this, you know, private profit-making sector. They don't care if it's government doing it or some quasi-public agency doing it. We've got to make that move.
CAFFERTY: If each of us contacted our representatives and senators and said, until I see hardcore evidence that you are becoming actively involved in finding a solution to the health-care problems in this country, I and my neighbors and friends are going to actively work against your reelection and in support of any candidate that comes along that will address this issue in a realistic way, not for the benefit of the corporations, but for the benefit of the people who pay your damn salaries, I suppose that might have a chance of working. Usually, these guys hear the message if it let it threatens their reelection prospects.
EHRENREICH: Yes. And I think that's a great idea. I'm really down with that. I mean, look what's happened. We're at the point now where -- you mentioned the Kaiser study showing people more afraid of health-care costs than they are of terrorism.
EHRENREICH: Well, there's also a study from Harvard showing that over half of the bankruptcies in the United States are caused by medical costs. Now, if you are pushed into bankruptcy, that is into poverty by health-care costs -- let's remember that poverty is a risk factor for many diseases.
LISOVICZ: Barbara, we've discussed that at length. Aren't the numbers with us, though? I mean, here we have the baby boomers retiring every single day. This is just going to collapse, isn't it? If you have people not saving enough. If you don't have anything like job security, at some point, this is going to be a bigger fiasco than Social Security ever will.
EHRENREICH: Oh, I think so, and I think it's the kind of -- it's a kind of a slow-burning thing. You know, people -- a lot of people are suffering because they can't pay for their prescription drugs, because they can't pay for necessary care, and yet we've got to get to the point where they're getting together, you know, and not just suffering alone and saying how do we change this, how do we exert the pressure?
SERWER: Well, I wish we'd get some resolution on this in our lifetimes, Barbara. But we'll look to continue this discussion another day.
Barbara Ehrenreich, author and columnist.
Thank you for coming on the program.
Coming up after the break, well, you can always use it to wrap fish. There's word that young adults aren't getting much news from the newspaper anymore. We'll see how shares of The Tribune Company are doing.
Also ahead, something's amiss at the Central Park Zoo. Find out if DreamWorks' new flick "Madagascar" will be a hit at the box office.
And greeting cards for that parting shot. Stick with us for the fun site of the week.
LISOVICZ: Now let's take a look at the week's top stories in our "Money Minute." Alan Greenspan and the Fed raised short-term interest rates for the eighth straight time. The latest hike was another quarter point increase to an even 3 percent. The Fed says it expects to continue raising rates at, in its words, a measured pace to keep fighting inflation.
Billionaire Kirk Kerkorian wants to buy another 5 percent of General Motors. Kerkorian's investment firm is offering $31 a share for GM stock, 13 percent more than what the company shares were trading for before the offer. Kerkorian already owns about 4 percent of GM stock and some auto industry experts believe he's trying to shake up the troubled company.
And does outsourcing hurt corporate profits? Deloitte Consulting (ph) has completed a new survey of 25 large U.S. companies. The firm found that 70 percent have had significant negative experiences with outsourcing projects. And another figure, 25 percent of all the companies surveyed have brought many functions back in-house due to lower costs overall.
SERWER: A study out this week from the Carnegie Corporation found that 18- to 34-year-olds are ditching traditional media like newspaper. Instead, they're going digital for their news and getting it from sources like Web sites and blogs. Newspaper circulation numbers have been in decline for about 20 years.
But, recently, the rate of decline has increased, and that's ringing a few alarm bells at some of the nation's biggest media company. One of those giants is The Tribune Company, owner of The Chicago Tribune, the L.A. Times, Newsday and even the Chicago Cubbies. But you can't blame sagging profits and falling share prices on Steve Bartman. The Tribune is -- that was the guy who caught that fly ball for the -- yeah, the Cubs. Never mind.
LISOVICZ: I forgot all about that.
SERWER: The Tribune is our stock of the week. It's not the fault of the Cubs, although the Cubs are actually not helping The Tribune Company. We'll get to that in a second.
There's another problem in the newspaper business, and that is some of the companies, including The Tribune Company -- there have been allegations that they have been inflating circulation numbers, making their numbers look better at the newspapers than they have been, and, basically, the industry is all in disarray because of that.
LISOVICZ: Well, it's making a bad situation worse. It also -- the same sort of problem existed at Newsday out here in the New York area, and those kind of things come back to bite you. But the fact is while circulation -- or I should ad rates are declining for newspapers, traditional sources of news, they're booming for the Internet. So there's a real problem there with trying to get this life blood of the newspaper business.
CAFFERTY: Well, The Tribune Company, in fairness, is probably not the best example of declining newspaper circulation problems simply because they're invested in so many other things.
CAFFERTY: They own WGN, which is the Superstation in Chicago. They own WPIX television here in New York. They own cable systems. They are diversified, as they say. But a lot of people would tell that we've been on a slow death watch for the daily newspapers for, as you mentioned, 20, 25 years, and that, you know, the day probably isn't too far away when there will be only a few major papers in the big cities, the Times, The Wall Street Journal, The Chicago Tribune, L.A. Times, but a lot of the smaller papers are going to simply disappear because they can't compete.
SERWER: That's true. You know, this is sort of widely known, though, and I'll tell you something. The stock surprisingly, The Tribune Company stock, has outperformed the market over the past five years. You know, this is not a big secret, and some of these companies are going to do better than people had anticipated. And, as you said, Jack, they do own other properties.
In fact, it's interesting. We'll get back to the Cubbies. The president of the Tribune recently saying that he's not going to sell the Cub, they do OK, though he did say, if they win a few games, they'd be even better. They had a problem with Sammy Sosa's contract. It cost them a $15 million hit to earnings in the first quarter because he went to the Orioles, and the Cubs had to pick that up, you may remember.
But, you know, these guys are going to be around forever, and to say they're going to go completely away, that's one of those situations where it's probably overblown.
LISOVICZ: Right. And if you're saying over the past five years, it's outperformed the market, this might be a time, if somebody was interested, because it's close to its 52-week low, right now.
SERWER: Interesting stuff. All right. Let's leave it at that.
Coming up on "In the Money," overqualified and underemployed. "Fortune" magazine -- you know that publication -- has tips on how to spot the signs of a troubling new trend.
Plus, hot days and hot tickets. We're going to scope out the upcoming crop of summer movies. Find out which ones look set to deliver on the screen and at the box office.
And mixed messages. We'll tell you about the blogosphere marketing campaign that a certain media company says it is isn't running.
WHITFIELD: Hello. I'm Fredricka Whitfield at the CNN Center in Atlanta. IN THE MONEY continues, but, first, these top stories.
A special cold case squad will reinvestigate some of the infamous Atlanta child murders. Wayne Williams was convicted of two murders of adult males and was believed responsible for nearly all the child deaths around Atlanta between 1979 and 1981. The chief of police in DeKalb County, a member of the original task force, says he never believed Williams was guilty, and that's why he's reopen the case. We'll have more on this story in 30 minutes on "CNN Live Saturday."
Actor Robert Blake acquitted of killing his wife Bonny Lee Bakley earlier this year is being sued by her four children in a wrongful death lawsuit. He says he once offered $250,000 to settle the case, but he now says he's only got about $150,000 in assets.
Bad weather cleared up enough for five climbers to be rescued from Mount Everest today. The two Americans, two Canadians and one Sherpa (ph) were hit by an avalanche two days ago. After that, they were stranded when storms prevented a rescue. A helicopter was able to get through today.
President Bush landed in the Netherlands just minutes ago. Mr. Bush is there to commemorate the 60th anniversary of the end of World War II in Europe. We'll have much more on the president's trip to Europe coming up at the top of the hour on "CNN Live Saturday." I'll have all the days news in 30 minutes. Now back to more of the "In the Money."
LISOVICZ: Put in 30 years of service and some companies will reward you with a cake or, if you're lucky, maybe you'll get an entire lunch. Others may give you something else around the 30-year mark, something a little harder to swallow, like a pink slip. According to the new issue of "Fortune" magazine, more and more executives in their 50s are being displaced by younger, cheaper workers. Senior Writer John Helyar penned the cover story "Fired at 50," and he joins us now with a look at this depressing trend.
JOHN HELYAR, SENIOR WRITER, FORTUNE MAGAZINE: Thank you very much for having me.
LISOVICZ: Well, you know, it's kind of ironic, right, because we're living longer, we're living healthier, we're not saving enough, Social Security is in trouble. We really need these jobs, not only in our 50s, in our 60s, possibly in our 70s. You know, you have Kirk Kerkorian, who's in his 80s. You have Warren Buffett in his 70s. These are people who are active and bright, and we have all sorts of examples of this. But yet we're still being booted at 50. Why is that?
HELYAR: Well, partly it's -- you could call it age discrimination or ageism. I think there's become a presumption that younger is better, not just in terms of being cheaper, but that older executives, older managers have not kept up technologically, they're not able to go 24/7 around the clock for the company anymore, and so they're the most vulnerable at a time in which layoffs in management have become epidemic and in a way are age neutral.
In the last several years, you've seen the stripping out of whole layers of management in a lot of companies. They're outsourcing jobs, they're contracting out for things they used to do in-house. They are doing a lot of things differently to lower their costs, and it just happens that a lot of these middle-aged middle managers are in the way of this particular trend, which is probably a very permanent thing and not just tied to an economic cycle.
SERWER: John, as a colleague of yours, I think it's important to point out to our viewers that you're going to turn 39 this year...
SERWER: ... so that you're in no risk and neither am I, I hope, with this. But I want to ask you: Aren't there laws on the books to prevent employers from terminating older employees, and can't you file an age discrimination lawsuit?
HELYAR: You definitely can fight it legally. Since 1967, it's been illegal to discriminate for employers against anyone over age 40. But just try and win one of those cases. The EEOC, the Equal Employment Opportunity Commission, got 17,000 complaints of this last year, and they litigate less than 1 percent of them, and only about maybe 15 percent or so of the people that complain to the EEOC will actually get any kind of financial settlement out of court of any kind.
The thing is it's a very -- it's a harder thing to prove than for other forms of discrimination and a fairly high hurdle for a plaintiff to make the case. A recent Supreme Court decision has made it somewhat easier because it can -- it's allowed the plaintiffs to show that even if there is a punitively neutral policy by an employer that, in fact, discriminates against people over 40, that they -- if a business -- if a company can show a business necessity for what they've done, then they're still pretty much free and clear to do what they want.
CAFFERTY: Let's talk about, for a minute, what people can do to perhaps insulate themselves or perhaps deal with the reality because the reality is, according to the statistics I read, the times have changed, and they're probably not going to change back.
Productivity continues to rise in this country. We're working more efficiently, making more money with fewer people working less hours that at any time in our history. That doesn't bode well for the old status quo where companies kept people on the payroll until they retired at 65 and are given a gold watch.
So, if you're 45 and feel the hot breath of this kind of thing on the back of your neck, what, if anything, can you do about it?
HELYAR: One thing is get very worried if you see the black balloons being brought to your desk.
CAFFERTY: That's a clue, right?
HELYAR: Never a good sign.
HELYAR: But of the people that I talked to in outplacement services and other areas, they really recommend people being proactive, don't wait for the axe to fall because people that lose their jobs in this situation or think that they're about to, aren't condemned to disappear into a black hole.
An awful lot of people are becoming self-employed, starting their own businesses, whether it's consulting or other things. I had a good subject in my story who was a former chief information officer who is now running a pet crematorium and doing quite well, thank you.
LISOVICZ: Who knew?
HELYAR: But there are other things. People buy franchises, and a lot of these people just say be proactive and don't count on either your current employer or any future corporate employer to take care of you. You've got to networking, as they say, and there are these whole huge networking organizations in different professions that have sprung up just as kind of self-help-type tools so that people can be looking for and connecting with people for those opportunities.
LISOVICZ: John, you didn't mention coloring your hair. I think that would be important, but -- for some of us women, in any case. What about just staying current with technology? Is that anywhere on your radar here?
HELYAR: No, I -- that's absolutely vital, and one of the things that older people have going against them is sometimes companies cut them out of their training programs for new technology and other things, and so, therefore, kind of condemn them and marginalize them, and that's one thing people have to do, if they see themselves in jeopardy of being squeezed out by their employer, is make sure they are getting those in-house opportunities to stay current, up to date on technology and other matters. But sometimes they really have to really stand up and force their boss to let them do that.
LISOVICZ: Meanwhile, look into pet crematoriums.
John Helyar, senior writer, "Fortune" magazine.
A lot of information in your article, and some of it is depressing. Thanks for joining us.
HELYAR: Thank you.
LISOVICZ: There's a lot more to come here on "In the Money."
Up next, a crusade for cash. Find out about "Kingdom of Heaven" and the other movies Hollywood is hoping will get you to the metaplex (ph) this summer.
And go on. Tell them what you really think. See some greeting cards that go easy on the saccharin on our fun site of the week. (COMMERCIAL BREAK)
SERWER: No, you're not cracking up. Well, speak for yourself. Those summer movie previews should seem a little familiar. A rash of remakes is coming to a theater near you, including "War of the Worlds," "Charlie and the Chocolate Factory" and "Herbie." Is that the love bug? Will these hits score again at the box office? Let's find out from Gitesh Pandya, editor of boxofficeguru.com.
Gitesh, welcome to the program.
GITESH PANDYA, BOXOFFICEGURU.COM: Thanks. Good to be here.
SERWER: This seems to be a common, common theme in Hollywood. Every summer, it's just more and more and more of the same stuff. Is that what's really going on here?
PANDYA: Well, Hollywood just loves to recycle. That's the way they make money. So, normally, we see a lot of sequels. In fact, in 2003, we had 13 sequels.
PANDYA: This year, only four sequels. Why? Because Hollywood is now moving over to remakes. Anything they can get their hands on, they are remaking into a new Hollywood film with younger stars.
SERWER: And, Gitesh, it's Susan. Good to see you.
"War of the Worlds," obviously, is one of them. That's kind of a no-brainer, that that will do well, I would imagine.
PANDYA: Absolutely. "War of the Worlds" is going to be one of the biggest blockbusters of the season. They have Tom Cruise reuniting with Steven Spielberg, opening on Fourth of July weekend, so that is just a combination for huge fireworks at the box office, probably one of the top three grossing films of this coming summer.
CAFFERTY: Are we the victims of our own -- I don't know, as consumers -- I mean, what do they get for a movie? It's like nine bucks, Andy, in New York now or something?
SERWER: Yes, $10. Yes.
CAFFERTY: You get a box of popcorn and a coke and park your car in a garage. It costs you $50 bill to go see a movie here. And yet we paid all this money and kind of settle for remakes, sequels, part four, part eight. Is the consumer to blame in all of this a little bit?
PANDYA: Well, I think Hollywood is to blame for a lot of it because they try to play it safe, they try to minimize risk, and that's why they make sequels and remakes and things like that, because they're trying to go for films with a built-in audience. It's a lot riskier to do something new. Now, if you look at "Madagascar," like you mentioned before, before the break, here's a film which is a brand-new story, and it's about, you know, the animals in the zoo breaking out and going to Africa and son on. It takes a harder sell to push that to the American public. However, when those movies work, like "The Incredibles" and "Finding Nemo" these brand-new stories, they make a killing at the box office, and "Madagascar" will be one of the few nonremakes nonsequels that will be a big hit.
SERWER: Gitesh, I was surprised to see that Jeffrey Katzenberg provided us with a little bit of trailer footage there.
I'm being sarcastic.
I'm interested -- you know, what's really going on here with this whole nostalgia stuff, that everything we thought was really stupid in the 1960s, we think is really cool now. Like are they going to remake "My Mother, The Car" and "F Troop"? I mean, those are terrible.
SERWER: And I bet you those are under development right now as full-length features.
PANDYA: Yes. I'm hoping for "T.J. Hooker," the movie.
SERWER: Yeah! Now you're talking.
PANDYA: But, you know, that's what Hollywood studios are looking for. You know, a couple of years ago, there was a sequel backlash. "Charlie's Angels," "Tomb Raider," all these things were not working, and people were saying we can't have these sequels with the number two and three in the titles. Let's do something else which has a built-in audience, and they're remaking films from different countries and they're remaking TV shows from the past or old movies, "Herbie," "Dukes of Hazzard." "Pink Panther" is going to be out there.
LISOVICZ: Well -- and, you know, they're making these movies that -- well, that some of us won't see, some of us, and ticket sales for the year are down, and there's fewer movies. Is that correct? There's fewer movies being released this summer?
LISOVICZ: So, in a way, they're stacking the deck so that a large percentage of the audience has to see them? Is that the scenario here?
PANDYA: Well, you know, what we've seen so far this year is that we have a significantly less number of films opening up at the box office. The studios are cutting back a little bit. They're saying, you know, we don't need 14 films in a year, we can do 12, and give more attention to each of those films. So, as of a couple weeks ago, we were down 28 percent as far as the number of new films opening in wide release. Now, with less films out there and with no "Passion of the Christ" like we had last spring, the box office right now is down about 4 percent or 5 percent versus a year ago, and that really puts the pressure on the summer films to really bring it back up.
So, by the end of the summer, we'll be even or maybe ahead of last year's pace because, with those box-office sales, especially at the beginning of summer, you get bodies into the theaters, they see posters, they see trailers, that gets even more bodies into the theaters in June and July. So the Hollywood studios really critically need a big, big boost at the box office right now in early May.
CAFFERTY: You mentioned "The Passion of the Christ." I mean, if ever there was a film that represented risk-taking on a grand scale, that was it.
CAFFERTY: I read where Clint Eastwood couldn't get anybody to do "Million Dollar Baby," that he walked all over Hollywood where he owns Oscars for best director for "The Unforgiven," his acting career speaks for itself, probably made more money at the box office with "Dirty Harry" movies than anybody in the history of movies during that same period of time, and yet he couldn't get anybody to do "Million Dollar Baby."
Maybe they deserve not 4 percent or 5 percent less at the box office, maybe 15 percent or 20 percent less at the box office or 30 percent or 40 percent. I mean, what kind of a culture turns Clint Eastwood away with a script like "Million Dollar Baby"? What are they smoking? Well, maybe that's part of the problem.
SERWER: It is Hollywood.
PANDYA: Well, you know, that's a Warner Brothers' film, and they were the studio...
PANDYA: ... stepped up to the plate and said, you know, we'll release the film, and, you know, "Ray" was another movie like that, the Ray Charles film. Nobody wanted to touch that. Universal came in and said, you know, maybe we can do something with it. Good marketing, good push and a great performance by Jamie Foxx -- that movie made $70 million, $80 million at the box office. "Million Dollar Baby" did $100 million.
So, you know, sometimes when you do take a risk, there are a lot of rewards, especially with movies like "Passion" and "Ray" and "Million Dollar Baby" that don't cost $100 million.
SERWER: But is anyone writing original screenplay? I mean, even those -- only one of them is an original screenplay really. I mean, "Ray" is a story based on a biography. (CROSSTALK)
SERWER: You know what I'm saying?
PANDYA: Yes, yes. There's a lot of films out there like that as well where they try to take certain kind of source material that people are familiar with, maybe a character, real life, or maybe a comic book character like Batman and make a film out of it because they hope that there is an audience out there, and so it's different than the random movies that come out of nowhere.
LISOVICZ: Gitesh, yes or no. Does the summer movie season begin this weekend because I heard one reviewer actually say that.
PANDYA: Well, you know, in the industry, we were looking at last weekend as the start of the summer box-office season. However, because it didn't do so well, we're now looking at this weekend as the real start of a big summer season.
CAFFERTY: That's a yes. That's a yes.
LISOVICZ: OK. "Kingdom of Heaven," I think, is one of the movies for this weekend.
CAFFERTY: Let him warm a little bit up. Wait until the saga of the Serwer comes out in the fall. Man, that's...
SERWER: That has yet to be written, thank you.
LISOVICZ: Must see. Must see. Gitesh Pandya, editor of boxofficeguru.com. Thank you.
Up next, the positive power of negative buzz. See why some comments showing up in the blogosphere might be closer to home for us here than you think.
Now maybe one day, we'll have an IN THE MONEY blog, and you'll be able to leave smart-alecky comments of your own. Up until then, send us an e-mail. The address is email@example.com.
CAFFERTY: Media companies will do almost anything to get America's attention. But is our own company resorting to trashing itself in public just to turn some heads? Web master Allen Wastler takes a look at that, and he also has a Mother's Day-oriented fun site of the week.
What's up with the old home office, bro?
ALLEN WASTLER, MANAGER EDITOR, CNN MONEY: Well, this is something wired (ph) -- you have to give credit where it's due -- wired (ph) sort of pointed it out, but there was some buzz going on in the blogs of some sort of anti-CNN messages coming in, OK, and these are things, little posts coming into show. You know, I'm commenting on various shows. I'll use IN THE MONEY as an example. Say, oh, "In the Money," what a terrible program on CNN, 1:00 on Saturday, 3:00 on Sunday, with such obscure personalities -- Jack Cafferty -- you'll remember him from the New York news scene -- and they have such trashy talk, such scintillating sexually-driven lascivious stuff. I would never watch such a thing. Well, of course, if you read all that...
LISOVICZ: One o'clock and three o'clock.
WASTLER: Yes, I've got to go check it out at 1:00 and 3:00. So it got some people buzzing, thinking, wait a minute, maybe CNN is sort of planting these little anti-CNN things as a backhanded way of generating buzz about the shows.
CAFFERTY: Hey, there ain't nobody around here that bright.
WASTLER: And, you see, you're repeating everything. I polled around all the executives and everything. What we were saying was we were so smart.
LISOVICZ: What a great idea.
CAFFERTY: Yes. It's a great idea.
WASTLER: And CNN, of course, you know, denied the whole thing, but it's sort of brings up -- if you look at the whole blog phenomenon, it started out as this great democracy in action, the citizens can talk. But the marketers have started encroaching in on it.
LISOVICZ: The corporations are...
WASTLER: You know, remember gorilla marketing happened when they found out people were getting paid to go into bars and talk up certain products. I think we're beginning to see the same sort of possibility...
CAFFERTY: That would be a good job, by the way.
WASTLER: ... arise out of that. So, if you sort of turn it inside out, what was a big, you know, pro-democracy, pro-citizens' voice thing is now turning into just another marketing game.
CAFFERTY: All right. Fun site of the week and just in time for Mother's Day.
WASTLER: Ah, cards that you may have wished you had sent, OK? Let's look at a few of them here. "I always wanted to have someone to hold, someone to love." Turn inside, "After meeting you, I changed my mind."
CAFFERTY: Oh, that's terrible.
LISOVICZ: That's not for Mom.
CAFFERTY: I was going to say.
WASTLER: "Congratulations to you on your promotion. Before you go, will you take the knife from my back? You'll probably need it again." That's the Time Warner credo, isn't it?
LISOVICZ: That's good.
WASTLER: And finally, "We've been friends for a very long time. What do you say we stop?"
CAFFERTY: There you go.
WASTLER: So you can get these and a lot of others on our fun site of the week.
LISOVICZ: Very sentimental.
CAFFERTY: All right. Yes. Thanks, Allen.
Coming up next on "In the Money," when we continue, it's time to hear from you, as we read some of your e-mails from the past week, and you can send us an e-mail right now if you like. We're at firstname.lastname@example.org. Back after this.
CAFFERTY: Time now to read your answers to our e-mail question of the week about whether the rising prison population means it's time to legalize some drug offenses.
Todd wrote, "We're spending billions dollars on the war on drugs. We haven't reduced the drugs at all. Addicts are not criminals. They don't belong in prison, and it's high time we started realizing this."
Mike wrote this, "I've been in law enforcement for 30 years, and I've seen how drug use is directly responsible for the erosion of the family unit, enhancement of crime and the general confusion about right and wrong. Legalizing drugs would be a huge mistake."
And Charles wrote this, "How do the rising prison population and drug legalization even remotely correlate? If you want to cut down on the population, first try executing the thousands of death-row inmates who are costing us time and money with their endless appeals."
Warm-hearted guy, old Charles.
CAFFERTY: Time now for next week's e-mail question of the week: Do you have a contingency plan if you get laid off in the coming year? Send your answers to email@example.com. You can also visit our show page at money.com/inthemoney, which is where you'll find the address of our fun site of the week.
On that note, 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 tomorrow at 3:00 Eastern. In honor of Mother's Day, we'll look at why many working women are saying no thanks to top corporate jobs and opting for something else. That's tomorrow, 3:00. Hope you have a nice Mother's Day, and we hope to see you then.
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