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More Aid, Less AIDS Needed in Africa. Proctor and Gamble May Cut Back ADs. Study Shows "G" Movies Make More Money; Congress Approval Continues to Drop; Viacom Stock in Wake of Split; Teaching Your Kid the Value of a Dollar.

Aired June 18, 2005 - 13:00   ET


FREDRICKA WHITFIELD, CNN ANCHOR, IN THE MONEY: That company processes credit card and other payments for banks and merchants. The FBI is now investigating.
Prosecutors in Mississippi have rested their case against Edgar Ray Killen. He's a former Ku Klux Klan member charged with killing three civil right workers 41 years ago. The trial resumes on Monday. The defense says it plans to call four witnesses. Their testimony could last two days.

U.S. Secretary of State Condoleeza Rice is in the Middle East to try to jump start peace talks. Earlier today, she met with Palestinian President Mahmoud Abbas and members of his cabinet. Rice is scheduled to meet with Israeli Prime Minister Ariel Sharon tomorrow.

I'm Fredricka Whitfield at the CNN Center in Atlanta. More news at the bottom of the hour, IN THE MONEY begins right now.

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

SUSAN LISCOVICZ, CNN ANCHOR, IN THE MONEY: Welcome to IN THE MONEY. I'm Susan Lisovicz sitting in for Jack Cafferty. Coming up on today's program, help wanted. Washington gives aid to Africa, but now it's being asked to send much more. Find out if America's giving enough or too much.

Plus, so much for the old school sales pitch. Procter & Gamble may be cutting back on some of its network commercials. See if the TV ads still have what it takes to move a product.

And the mild-mannered moneymaker. Sex and violence may catch the eye, but a new study says "g" rated movies can deliver the best return on investment. We'll look at why Hollywood isn't making more of them.

Joining me today a couple of IN THE MONEY veterans, "Lou Dobbs Tonight" correspondent Christine Romans, and managing editor Allen Wastler.

So six months into President bush's second term. You'd think that after that nasty election, now that we've had the Iraqi interim elections that maybe some of the worst stuff is behind him. President Bush scores one of the lowest poll ratings ever of his presidency, 42percent. And Congress -- just one-third of Americans surveyed in the CBS "New York Times" poll say they approved the way Congress has handled itself.

CHRISTINE ROMANS, CNN ANCHOR, IN THE MONEY: Just one third, I mean that's amazing to think that so few people think their Congressmen and women are doing a good job. It's interesting I'm listening to these border security and immigration hearings on the hill for my job on "Lou Dobbs Tonight" and what I keep hearing from these folks is that their constituents are saying, what they are hearing out of Washington is not what their biggest concerns are. They have bigger concerns.

LISCOVICZ: Out of touch.

ROMANS: Absolutely out of touch on Social Security, on a lot of other issues as well. They're really concerned about day-to-day security issues. Not necessarily some of the financial things coming out of the White House, Social Security in particular. They just say that they don't think that their Congressmen and women and the president is doing what they want, more people are saying that.

ALLEN WASTLER, CNN ANCHOR, IN THE MONEY: And I will agree that we've had a lot of instances of Congress behaving badly this year, in a number of different issues. But I'm going to defend the Bush administration a little bit here. Because once you're elected, that's the time to start getting tough with people and doing things that might not be so popular. So if you're going to do it, do it now. This might be part of the game plan and --

LISCOVICZ: That's a very good point. Because when you want to talk about a tough time, President Bush has had a really tough time with Social Security. So much so that just this week, the president said, you know, reforming the tax code, it's going to take a little bit longer. And for a lot of people, boy, when we remember doing our taxes this season that alternative minimum tax, ouch.

ROMANS: Another to play devil's advocate, as well, there are a lot of folks who say the White House doesn't respond to the country, the White House lead the country. Your lawmakers are supposed to be out there pushing things ahead for you and then public opinion and public sentiment follows along.

LISCOVICZ: Well we will see how it goes in the mid term elections. Because one of the biggest drops came from among Republicans surveyed in this poll. Ok and yet other issues to talk about, foreign aid. Nobody gives more money to Africa than the United States. But Washington's under pressure these days to spend even more. And that might be not just nice but smart.

After all what goes on in Africa can affect life here, from what we pay at the pump to our security. Last week, British Prime Minister Tony Blair failed to convince President Bush to back a $25 billion plan for countries to double their African aid. But Mr. Blair is expected to keep pushing that idea at next month's g-8 summit in Scotland.

For a look at what the U.S. already gives to Africa and whether it should crank up the donations, we're joined by Chamberlain Peterside, he is the founder and president of New Era Capital Corporation, an investment advisory firm. Welcome.


LISCOVICZ: So put it in perspective for us. By all measure, the United States gives the most to funding overseas. But in terms of percentages, for how rich this country is in terms of its GDP, it's a different story.

PETERSON: That's right, you're right. As a percentage of U.S. GDP, it gives less than 0.5 percent, as opposed to some countries in Europe that give as much as 1 percent of their GDP. U.S. is a part of (INAUDIBLE) to the U.N. pact that says at least 0.7 percent of advance country's GDP should be giving aid to poor countries in Africa and Asia, and Latin America. That is an issue, which is worth addressing. Prime Minister Blair had introduced a plan that would double aid to Africa to at least $25 billion every year.

President Bush had responded to that and that response wasn't quite enough. This last week, "The New York Times" called that crumbs. Now, what we're saying is apart from the aid that should be channeled to Africa there has to be a smart way of channeling those aids. Aids, per se, are a surgical strike on Africa's problem. Investments and trade, I think, is what the focus should be going forward.

ROMANS: So are we talking to about how to use those dollars? And you can argue about whether the United States percentage wise is giving as much as some other countries. But a dollar spent in Africa, whether it's, you know, x percent of GDP or more percent of GDP, its still $1 spent in Africa. It's how you use that money that's the most important thing.


ROMANS: Some criticisms I've heard is that the United States and other countries feeding people and sending all this money, it goes into the pockets of despots and dictators and that the people of Africa don't get any more help when more money is spent. How do you fix that?

PETERSIDE: Well, the problem of corruption, it's quite serious in Africa. Unfortunately, that is not endemic to the people. Corruption is not part of the culture. It's been able to -- based on the weak infrastructure, based on the weak institutions. So I think the focus should be that if you're going to support that you have to support Democratic reforms. You've got to support market reforms. You've got to help new institutions. And power people to be able to get job opportunities.

The stronger you have the institutions in Africa, the less likely that those funds and those aids are going to be freed either way. And remember that Africa -- the thought of Africa's private savings is held abroad. A lot of those same funds that are being donated and are being supposedly corruptly taken abroad are things that should have been in the system. So we're saying we direct the aids, create new group opportunities, and support the new growth engines. Small and medium skill enterprises assist the local people who have been able to get loans on very concessionary terms and be able to get into a formal sector.

WASTLER: So Mr. Peterside then that echoes a lot of what the Bush administration has been saying about what they would like to accomplish with aid to Africa. Meanwhile you have Tony Blair arguing, OK, let's throw more money at them. Which policies are more likely to succeed and which one politically is more likely to success?

PETERSIDE: I think that just there's one problem, which is insufficient resources. Now, Tony Blair's policies that provide more resources, but President Bush approaches where do you put that money? There has to be a marriage of this new -- those two concepts. If you are able to provide more funds directly to what is a new growth engines, micro credit, small and medium skill enterprise, building strong, Democratic institutions, it is likely that you would not need to provide food aid whenever there is famine and whenever there is any emergencies.

The surgical strikes we've seen in the past have not helped Africa. So we're not advocating for aid per se. We're saying that any new funds, be it from Britain or from the U.S., should be channeled towards growing the small or medium skill enterprises, micro credits.

LISCOVICZ: Mr. Peterside, I was in Kenya ten years ago to report on the African Trade and Opportunity Act, which has since passed. Where, in fact, you weren't teaching Africans -- you weren't giving them fish, you were teaching them how to fish. You were breaking down those trade barriers.

PETERSIDE: That's right.

LISCOVICZ: Everybody there that I spoke to said this is what this continent needs, to get on a more level playing field. What's happened? It's been at least five years now since that act was passed. What's happened? What are the results of that?

PETERSIDE: Indeed, the African Growth and Opportunities Act has actually helped to galvanize production in a lot of African countries. In fact, last time the president of Uganda called it one of the best things to come out of Africa. It's helped create 11,000 job opportunities. It's helped create a lot of factories that now export. Unfortunately, not a lot of the small businesses, which in the system have taken advantage of that.

Any new support, any new aid money, should go towards providing funding for these small and medium skilled enterprises. That would be able to take advantage of programs like the outgoer (ph), you also have a program like the African Capital, African Mortgage Market Initiative which is also very sound, by the U.S. Administration to help create new homes, affordable homes and mortgage financing.

LISCOVICZ: We know how successful, certainly, those kind of programs have been here when it comes to getting people into their homes.

PETERSIDE: That's right.

LISCOVICZ: And providing some initial security. Chamberlain Peterside, I would imagine it's just a victory to get Africa back on the talking table at the g-8. That in itself is the victory. Chamberlain Peterside is the founder and president of New Era Capital Corporation, thanks for joining us.

PETERSIDE: My pleasure.

LISCOVICZ: When we come back, seeing spot. The network TV commercial used to be the warhorse of the ad world. Find out why P & G may be putting it out to pasture for some of its landmark products.

Plus, splitsville, see how shares in Viacom look, now that the company's decided to spin off a couple of its media businesses.

And no kidding, "g" rated movies may be aimed at kids but they deliver returns an adult can love. We will look at why Hollywood isn't cranking out "g"s by the truckload.


LISCOVICZ: All those ads on TV don't work if you don't watch them. And Procter & Gamble, TV's biggest spender has decided that some of its ads aren't being watched enough. A report out this week says P&G is cutting way back on its advantanced buys of network TV commercials. The company won't confirm the story but it ran in "The Wall Street Journal" and a lot of folks saw it. If it is right it may reflect a trend, businesses looking to connect with consumers who tune out ads on TV. To help us understand if the network television commercial really is dead, we're joined by Bill Schmidt, he is a vice president analyst at Deutsche Bank here in New York. Welcome.


LISCOVICZ: You know in some ways, all this 21st century technology brings us back to the very beginnings of television when television sponsored entire programs. In fact P & G is a sponsor, it is a producer of programming, soap operas. It is where it got its name, so it's more effective ways to get around the Tivo and other electronic devices, that product placement?

SCHMIDT: That is absolutely correct. I think they just need to be more innovative in terms of what they are spending their money on. The ratings are going down, costs are going up. And P & G has found that for every dollar they're spending in advertising, they're returning 50 or 60 cents.

ROMANS: Give me a little sense about brand loyalty as well here, because we're talking about toothpaste and soap and laundry detergent, the kind of things that a lot of Americans become loyal to very early and frankly, television advertising isn't going to change their minds on them. Do they need to be working on display advertising and other kinds of ways to get people to try new products or to switch brands? SCHMIDT: Again they need to be a lot more innovative here. I mean you have growth of discount retailers like Wal-Mart, retailers are winning I the relationship between manufacture and retailers. So as retailers get bigger and more powerful, it becomes a lot more important for some of these manufacturers to really get out there and get that consumer pull going, rather than having the retailers push it out to these consumers.

WASTLER: Bill, I'm a cynic. When I see a story like this of, oh, we're going to cut spending on this sort of thing here, and then the company won't come out and say, yes, that's true or that's not true, I kind of think OK, they're trying to muscle the supplier they're dealing with, trying to get them to do a price cut. Could that be the case here? Is P & G just letting the story ride so that all the networks come back and say, please, we'll take off 10 percent of the price, just please advertise with us?

SCHMIDT: Yes, I think you're absolutely right. P & G is not cutting their global advertising budget. I think they're looking at the networks and saying money isn't being made anymore. Advertising traditional network prime-time spots. So they'll need more product placement. But the absolute advertising budget isn't declining at all, I think it's just them playing hardball with the network, saying, you guys aren't drawing the kind of volume we need with these advertisements, so you need to find a better to let us sell out products. .

LISCOVICZ: And you know Bill for disclosure purposes, we want to let our viewers know that Deutsche Bank does own shares of P & G. Getting that over with, let's talk about what's selling and what's not. Television commercials typically want to appeal to younger consumers, get them early. The ones that will experiment with brands and different products. That really hasn't changed in what's hot on TV. Like for instance, Crest Whitestrips, something like that will still sell on TV, as opposed to something like Pampers, which has been around for a long time. .

SCHMIDT: That was the genesis of our report, frankly. We looked at mature brands and looked how advertising impacted mature brands. But we also added some of the new products, like you referred to like Crest Whitestrips, like P&G Swifter Product which that great consumer acceptance. And we found that advertising does payoff. Advertising Pampers, advertising Tide, you know advertising Bounty doesn't really pay out now.

ROMANS: Let me ask about television viewers in general and how they might be so inundated with advertising they're finding all these great new ways to get commercials out of their viewing Tivo, Susan mentioned that a lot of different ways that you can strip the advertising out. Is that a real challenge for these companies and for these advertisers?

SCHMIDT: Absolutely. It's very early days right now. If you look at some of the empirical evidence out there, 70 percent of people who have Tivos always or frequently zap the commercial. So you're seeing some of the big groundbreaking companies like P & G going out there with product placements. You probably saw them sponsor "The Apprentice" with their whiting expressions Crest products, so they are looking for more innovative ways to get their products out there. A lot more of that marketing, really going after that younger demographics, where they actually do participate with media. That's through video games that are through events. It is a lot less through Network television.

ROMANS: They'll find other ways to sell us their products.

SCHMIDT: Absolutely.

ROMANS: Bill Schmidt, Deutsche Bank, thank you so much for joining us today Bill. Have a great weekend.

LISCOVICZ: Coming up after the break, mixed media, as Viacom's board approaches a spin-off for its cable and film businesses, we'll see how the stock is doing.

Plus, cinema bambino, g-rated movies may not make your pulse race, but they do make money. Find out why the grown-ups in Hollywood aren't more kiddie pictures.

And baby's got buck. Learn when it's time to start teaching your kid the value of a dollar or even a quarter.


ROMANS: Now lets take a look at the weeks top stories in our "Money Minute." GM plans to cut back on employee benefit and health care coverage that could result in a major strike. The UAW's president told General Motors that he won't agree to change their labor contract before it expires in 2007. The UAW could call a strike as early as the end of next month.

There's even more evidence that Americans are trying to tighten their belts. Retail sales fell a surprisingly large .5 percent in May that was the biggest decline in retail sales in nearly a year. Americans bought fewer cars and cut back on clothing purchases last month.

And we've heard lots of complaints about rude cell phone use in public, you know who you are. But this one comes from a cell phone company. Cingular Wireless has told the FAA it thinks cell phone conversations in confined areas are inappropriate and should continue to be banned on commercial flights while planes are airborne. Cingular is the nation's biggest wireless carrier.

Hoping to shake up its stock performance, Viacom says it will spin off its cable networks and film studios as a separate publicly traded company. That will allow those divisions to chart their own path separate from Viacom's slower-growing television and radio businesses. It seems like slow growth has been the motto for Viacom shares over the past year, as they basically treaded water. But the stocks overall performance over the last five years has mirrored the sluggish performance of the other major media company. Viacom is our stock of the week. Some folks are saying that this is a move to try to unlock some action maybe for the hedge funds to give them something they can look into. Maybe that's where the momentum can come from the stock price. Definitely splitting up two parts of this company has caused an awful lot of speculation that maybe other media companies might try to unlock some of those assets as well.

LISCOVICZ: What are you saying, Christine. Who are you talking about?

ROMANS: Well -- I don't know.

LISCOVICZ: You know it's funny that you talk to Sumner Redstone and he was all for the big deal in the '90s, whether it was Paramount Studios or CBS. And this -- this would basically undo that merger from five years ago.


LISCOVICZ: You know it's weird how synergy and cost efficiencies have just fallen out of favor.

ROMANS: That word "synergy" how many times did we hear that word over the last five or six years?

WASTLER: Oh synergy is dead, now you want the peer play, right? And essentially you get a high growth company with the cable networks and the movies, but also very volatile. And you get what a lot of people are equating as a utility which make makes Lesley Moonves who is in charge of it a little tricky.

LISCOVICZ: It pays dividends right?

WASTLER: "Hey, we're not a utility." But you know it is interesting Jack Myers, who follows the industry pretty closely, he put out a report saying this might not happen. Pointing that if you divide those two into peer plays kind of they become takeover targets.

ROMANS: Oh, really?

LISCOVICZ: So someone else rather than Sumner Redstone. It also solves a management issue for Sumner Redstone, right because a couple of top CEOs that were vying to replace him. So you have les Moonves, very talented guy, over at CBS, and then you have - oh my gosh, I just forget his name from MTV. Who started MTV --

WASTLER: Tom Freston.

LISCOVICZ: Tom Freston, yes, who is over there and they both have their little -- I should say very big fiefdoms.

WASTLER: Kind of like King Leer, where you divide the kingdom and even Sumner Redstone's daughter is -- she's become vice chair in this as well.

LISCOVICZ: She's become edging into the corporation more and more.

ROMANS: Then the question is which of these stocks do you buy if you are a small investor and your want to play Viacom? Do you buy the film business, do you buy -- I mean what do you buy?

WASTLER: I wouldn't buy either, to tell you the truth. I think CBS is probably the better bet because it will pay off dividends. It's very cash-rich right now. You've got the assets there. But I suspect after they do the dive you'll see both companies take a little dip. Because people are unsure and investors that are in it right now will take their profits. A little dip I think you might see a climb in CBS, and it is probably less risk.

LISCOVICZ: But you think the heady growth days for MTV, Nick, are gone?

WASTLER: I just don't like the movie business or -- sorry, boss -- the cable business. You just see too many ad dollars come in and out and flying around, Costco, and bad bets --

ROMANS: Well Viacom shareholder over the past five or six years have certainly been battered so we'll see if --

LISCOVICZ: This was all about Wall Street, right? This is what happened there?

ROMANS: Absolutely.

LISCOVICZ: All right. Coming up on IN THE MONEY. "g" is for gold. A controversial new study says g-rated movies rake in more cash than "r" films but don't expect to see more kiddie flicks anytime soon. We'll tell you why.

Plus, father knows best. We will talk with one dad who says give your kid a spending allowance at age 3, not 33, age 3.

And how do you make the water cooler hall of fame? Easy -- throw back a pint of Guiness and fuel up the video cam. Stay tuned for a classic office party slip-up on our "Fun Site of the Week."


WHITFIELD: Hello, I'm Fredricka Whitfield. IN THE MONEY will continue after a check of the headlines.

Some 40 million credit card accounts are at risk for fraud. Following a security breach at the Tucson Operation Center of Card Systems Solutions. That company handles Visa and MasterCard transactions on behalf of merchants and various financial institutions. The FBI is investigating.

Iran's presidential election is down to two. The country's former president and Tehran's mayor will face off Friday if a runoff. The election is not expected to change Iran's theocratic government. Supreme leader Ayatollah Ali Khamenei still has the final word on matters of state.

And two major offenses are under way in Iraq. "Operation Spear" and "Operation Dagger" are targeting insurgent strong holds north of Baghdad and along the Syrian border. The military says so far at least 50 insurgents have been killed. They also say marines have freed four hostages who apparently had been captured and tortured.

I will have the latest headlines in 30 minutes. Now back to more of IN THE MONEY.

ROMANS: Maybe that g-movie rating really stands for greenbacks. A conservative advocacy group says g-rated films are nearly 11 times more profitable than the r-rated ones. The Done (ph) Foundation based in Michigan brought out the information earlier this month. If there's anything to it, you got to wonder why Hollywood isn't showing us a lot more cartoon animals. So let's find out. For that, we turn to Julia Boorstin, who is a writer for "Fortune" magazine. Welcome to the program.


ROMANS: I mean I thought that the bottom line drives every decision in Corporate America. If g-rated movies are making more money than "r" rated movies, why isn't Hollywood making "g" rated movies as fast as they can?

BOORSTIN: Well Hollywood is pretty smart and they wouldn't be throwing away money. So I think you have to really look at the story and I think one real question to ask is does the study take into consideration the huge marketing dollars it takes to sell a g-movie? Now as you know if you're selling a pg-13 movie or an r-rated movie, and you are marketing it to adults you can oftentimes, if it is a really great movie made on a small budget rely on word of mouth or rely on great reviews or even just sell print ads, you know ads in newspapers or magazines, which adults read.

But if you're selling a movie to kids, you've got to buy TV advertising. And TV advertising is hugely expensive. And usually also have to advertise it to parents too. Because the kids are going to be dragging the parents or the parents are going to be dragging the kids. Either way, advertising for g-movies costs an fortune.

LISCOVICZ: Right, and you know not only the advertising, it's the actual -- Julia, it's the actual cost of the movie. When you look at "Shrek" or "Finding Nemo." those were blockbusters, no question about it, but they also cost a ton to make because animation ain't cheap.

BOORSTIN: That is right, animation has never been cheap. And if you think about it -- you think it wouldn't cost that much money to get some guys to draw some picture. But even with computer animation it can take a year, easily, to put out a movie. Where as if you're making a regular feature film, pg-13 movie, you can spend seven weeks, hire a bunch of actors and get it all done within a number of months. LISCOVICZ: Get Hilary Duff.

BOORSTIN: Exactly.

LISCOVICZ: Mandy Moore.

BOORSTIN: The other thing that's making g-movies and animated movies more expensive now is in the past you could hire anyone, sort unknowns to do the voices for the g-movies. Think about "Beauty & the Beast" we don't know who those actors were playing Belle and the Beast. Now it's popular to hire famous actors to do the voice. And "Shrek" although "Shrek" was a PG movie, not "g" movie. "Shred II" the top three actors doing those voices each got paid $10 million to do the voices for that movie. So it wasn't cheap to hire the actors, even if you weren't seeing them.

WASTLER: So Julia one phenomenon I've always noticed is that the more high-priced talent you get into something and they start going to it, the more likely there is for a major flop. Seems like I've seen a few movies lately like "Polar Express" didn't do as well as they expected. I'm getting a little burned out on animation. Is it likely the sector might be ready for a fall here?

BOORSTIN: Well I think it is really important to examine a couple things. You're totally right about "Polar Express." It cost over $150 million to make that movie and to market that movie and it only brought in about that much. They actually lost money when you factor in the marketing. That also had the huge star of Tom Hanks. So even with his star wattage and all the great computer animation it couldn't fly. Another thing to consider is a lot of these movies that are animated Pixar movies, which have done really well in the box office, "Shrek" being a great example, they're actually PG. They have just enough edge they're attracting adults as well. They don't really count as the totally 100 percent family fare "g" movie.

ROMANS: So maybe Hollywood should be shooting somewhere in the middle. And I wanted to ask about DVDs. Because you look at "Shrek" and even "Polar Express" some of these names, if they didn't do well at the box office they'll live on forever. Because people have kids, they need something appropriate for them to watch where maybe "Troy" or some other big blockbuster or try to be a big blockbuster with a big name an r or pg-13, maybe that won't live forever in DVDs.

BOORSTIN: The other thing that we all know is that kids can watch the same movies over and over, which is why DVDs aimed at children do perform much better. So it is true that a g-movie might have longer life when it comes to DVDs. But at the end of the day, an animated g-movie is going to do better than a non-animated g-movie, especially when you factor in things like overseas sales where -- and you know, a movie with subtitles, that's live action "g" is just not going to sell that well.

LISCOVICZ: OK, but the bottom line is, if you're looking to make a profitability movie, the best thing to do is try to get the largest possible audience. So aims for the PG are right? BOORSTIN: I would say pg and pg. 13. The main thing to keep in mind is the profits on the movie aren't just the costs of the movie and the amount of ticket sales, it's also marketing costs and these days, especially as the first couple of weeks of a release become more and more important, the marketing push becomes a huge, huge chunk of the costs of doing a movie.

WASTLER: So, Julia, you mentioned the star power involved these days in these movies. Does it really help the movie? I mean, is there a track record, that if you have Eddie Murphy doing the donkey in one movie it's going to do a lot better than a no-name doing the beast in the beast?

BOORSTIN: Well the fact that it's become the trend recently and we saw it with "Shrek" and "Trac II" and "Finding Nemo," it's more common. And I think one reason why that's so appealing for the movie studios is they know they can market it not just to little kids who aren't sure who Mike Myers or Cameron Diaz are, but also to the adults who might love Eddie Murphy and say, I won't mind seeing that with my kid because I recognize those voices.

ROMANS: Julia it starts to get political, too, when you have people who say that Hollywood is liberal, and it makes movies for itself, it doesn't make movies for America. What do you think about that?

BOORSTIN: Well I think at the end of the day, the box office receipts tell the whole story. I think there are a lot of flaws in this study calculating -- it's so hard to calculate profits in Hollywood because the numbers are always so sketchy and there's a lot of fuzzy accounting. But I think that box office receipts tell the story and if a movie like "Shrek" which did do very well, that was a PG movie, and it is important to draw the distinctions between "g" movies where very few "g" movies come out every year. And "pg" movies and "pg-13" movies.

LISCOVICZ: So at the end of the day, "g" movies more profitable than "r" rated movies?

BOORSTIN: Well there just aren't that many, so it's hard to judge. Even in this study, it was only about 4 percent of the total. Maybe they are more likely to be profitable, but that's because they have such a marketing push behind them. Any movie with those much marketing dollars is going to attract more viewers than a little tiny movie that might be hoping for a great sleeper hit thanks to a couple good reviews.

LISCOVICZ: A lot of not so hidden costs, I think is what I'm hearing. Julia Boorstin, of "Fortune" magazine, thanks for joining us.

BOORSTIN: Thank you.

LISCOVICZ: There are lots more to come here on IN THE MONEY. Up next, making allowances on this Father's Day weekend. We'll hear from a guy who says that even toddlers can learn to manage money. And cry me a river. More CEOs are getting bumped out of their jobs but the landing is nothing to feel sorry about. We'll hear from Allen Wastler,


WASTLER: If your kids gave you another cheap gift this Father's Day or if they didn't give you one at all, maybe its time you teach them about money. How do you do that and when do you start? Joining us now from San Francisco with some answers is Armin Brott he is the author of the new book "Fathering Your Toddler." And he also writes the "Mr. Dad" column for several newspapers across the country. Armin, welcome.

ARMIN BROTT, AUTHOR, "FATHERING YOUR TODDLER:" Hey, my pleasure to be here.

WASTLER: Now so what can you teach your 2-year-old or 3-year-old about money, besides don't put it in your mouth it tastes bad?

BROTT: Well, that's a very important thing to do. I think it's -- the issue is really we start teaching them about money so it doesn't become such a big mystery later on in life and it can be used as a tremendous learning experience. They can learn how to categorize thing, they can learn how to count, they can learn how to do simple percentages and division and addition and things like that.

Plus I think for me, one of the biggest things in teaching my kids was teaching them a little bit of the value of what you do with money beside just spending it, saving it up for college, saving it up for a couple weeks to buy something big. The big one my dad did with me was giving it away, figuring out how you want to give it to charity.

ROMANS: Well let's talk about bribery for a moment. Lets talk about having your 3-year-old or 4-year-old pick up his or her toys and then he or she gets 50 cents in some tax brackets, maybe they get $5, I don't know. Is it good to give children money for doing things? Or is that generating the wrong kind of behaviors?

BROTT: Well that particular thing I think is generating the wrong kind of behavior. We don't want to give kids rewards for doing the basic things they really should be doing, liking cleaning up after themselves. That should be looked at as being, you're a member of the family, these are some kind of things that we do, everybody does it mommy does it, daddy does it, your big sister, everybody does it, even the dog brings the newspaper in, you know, people do things to support the general good of the family. And so we're not going to give you a reward for that.

You can, though, give rewards for things going above and beyond, cleaning the litter box, or chores that are above and beyond the basic minimum that kids should be doing.

LISCOVICZ: OK, so at what age can you really start talking to children about money? Is it as simple as incorporating nickel and dimes as a way to help children count? Or is it a little bit more advanced than that?

BROTT: Well, I think that starts right there. Probably at about age 2, they're really more interested in nickels and dimes and quarters than other kind of shiny round things because we always have it in our pockets, and we're always doing something with it. So we can begin to teach them little lessons about that.

But I guess it's also a question of -- they're going to start bringing the issue up. Can you buy me something? You say, no, I don't have any money. They say, why don't you go to one of those machines and get some? Which is the typical toddler kind of way of looking at the world. So you can begin to have discussions about, OK, I have to work for this, and then I get some money. We take it to the grocery store and I have to give them two quarters and a nickel to get this apple.

WASTLER: OK, so Armin I got this situation at home. I got twin daughters, OK?

ROMANS: Who are starting to talk --

WASTLER: We're trying to do the money thing OK, they're around 5. One of them will take the money, go running to the piggy bank, puts it in there. She's a saver, just being very wise about it. The other one is like hey dad, I got a dollar here lets go get some cotton candy I will treat. Lets just spend it, she spends. I kind of wonder the nature nurture argument. I have an experiment going on. It seems to me there's some hard wiring involved where some kids are going to get it and some kids aren't. Do you agree with that?

BROTT: Absolutely. Some kids are just going to be spending everything they can possibly get their hands on and other kids are going to be just like your daughter, they'll save it up and one of these days you'll have to borrow money from her and she'll have a whole bunch of it.

ROMANS: You know speaking of saving; we have the lowest saving rate in this country of the western world.

BROTT: It's awful.

ROMANS: And people keep saving it really is tough. Do we need to be teaching their kids that they don't need to grow up to be consumers, that we all are and they need to start saving more money? We need to teach them that money can grow? And at what age -- I remember that when I was growing upping my dad didn't like us to give him Father's Day gifts, because he saw it as a waste of money. He wanted us to save our money, so we can save our money to go to college. That was really hammered home to us.

BROTT: I think you have to have a little bit of a mix of that. It's nice to instill a good message of saving, the importance of saving, and the importance of charity. But you really don't want people to be misers, little kids to be misers, we want them to understand the importance, it's nice to give people gifts, it makes them think that you're thinking of them. So I think a little of both is really a necessary thing.

ROMANS: I think it says a lot about the kind of gifts we were giving my dad as well, frankly.

BROTT: Well he may have just been saying that as a really nice way of saying "I have enough ties, thank you."

LISCOVICZ: Armin on this Father's Day weekend, let's bring up an important point, that I noticed in your bio, which is that you are a pioneer, you were a stay at home dad. And there are now more of those. What is that like, for instance, doing a lot of the work that was typically assigned to women? And did you have a little coffee group with other women? Can you just sort of describe what that whole experiment was like?

BROTT: It's really difficult and it still is difficult for stay at home dads. Because we don't really get involved in the coffee clashes and there really -- it's kind of an isolating experience. Guys are not really so willing to talk about these things. We don't go to the parks and make friends with all the mothers around there and figure out all the wonderful recipes and places to buy great things like that. So it is a little bit isolating. Plus there's not so much support.

People don't know what to do with stay at home dads. I've got this in so many guys I've interviewed over the years; you know people will say hey, are you baby-sitting? I'm not really baby-sitting; I'm taking care of my kids. The other one was, it's really too bad, I really hope you get a job sometime soon, it must be awful being out of work. And it's not awful being out of work because it's not really work, it's taking care of the kid and it's a valuable job, but --

LISCOVICZ: It's the most rewarding work there is, isn't it?

BROTT: You know and nobody will tell you otherwise. Nobody will ever say that he wished he spent less time with his kids.

ROMANS: All right and this is changing so much, too. Armin Brott thank you so much for joining us. The book is called "Fathering Your Toddler." A dads guide to the second and third years. Thanks for joining us.

BROTT: Thanks for having me.

ROMANS: Coming up, the "Fun Site of the Week." It is an object lesson in how not to behave at company parties. And put our producers to the test with your e-mail insights. Drop us a line. The address is


LISCOVICZ: Morgan Stanley's CEO Phil Purcell finally gave in to a relentless campaign to oust him. His resignation seems to be the latest example of how today's corporate CEOs are facing more scrutiny and pressure to perform. Allen Wastler isn't so sure. That's the focus of this week's "Inside out" You could see this coming a mile away. WASTLER: If you just walked into it this week and you say, the CEO has to resign. And you hear about, oh, there was the group of eight -- they went off and they started beating up on, then some high level resignations, of people going, I don't like you boss, I'm going away. You'd think, boy, this poor guy. You put on the who, listen to "Behind Blue Eyes" and no one knows what it's like to be the bad man. But, now think about this -- he's worked for, you know, a few years, and he's walking away with $62 million.


WASTLER: In walk away money. You can think, OK this is just one case. And if you look at Challenger, came out with a study saying more and more CEOs are getting kicked out like this, this is the latest trend where they're just pushing the numbers and kicking the CEOs out.

ROMANS: I don't feel bad.

WASTLER: But then I went and said, let me check out some of the other headliners. Carly Fiorina, remember her, couldn't make HP happen and they finally said, see you later?

ROMANS: Stock down --

WASTLER: $42 million. All right, Ray Gilmartin, Merck, Vioxx, little oopsy on the old Vioxx thing, he cashed in $35 million of options. OK. And Scott Levingood, Krispy Kreme, which has a little to- do going on at the SEC right now --

ROMANS: Accounting problems.

WASTLER: He didn't get any severance. He made a big thing about that. But I did look back at his cashing out in previous year, $15 million --

ROMANS: These guys are priced for perfection, for absolute perfection. When you're paid that much to run a company, you are priced to have nobody come out of the woodwork and say you're not doing a job, your are priced to make sure there are no SEC investigations, you have to know everything that's happening -- you get tens millions of dollars and you don't perform, you lose your job I mean, nobody is going to cry, nobody's going to cry for them.

LISCOVICZ: The standards are too high, by what you're saying. But also the pay obviously is too high. I mean you got to bring it down, the growing disparity between rank and file and CEO is astronomical. It has gone up like 300 percent in the last few years.

ROMANS: They don't deserve, I mean if you're going to get paid that kind of money, then the standards have to perfection only --

WASTLER: I kind of like the system they --

LISCOVICZ: That's not right --

ROMANS: Shouldn't be paid that much. WASTLER: In Japan, they have the system where the CEO gets no more than the percentage above the lowest paid worker. So as you build the company up, the whole company rises with you, which is nice thought.

LISCOVICZ: It's like Ben & Jerry's has something like that. And look, they make great ice cream --

WASTLER: Now we're talking about the boss, right? No matter how much he gets paid you don't want to offend him. Producing staff found this nice little cringe video of what you shouldn't do at an office party.


UNIDENTIFIED FEMALE: I'll say something about Jim. Jim is cheap. He likes his cheap women and cheap champagne --

ROMANS: Oh, my god --

UNIDENTIFIED FEMALE: I don't know what you call it --

UNIDENTIFIED MALE: Thanks, that's enough.


UNIDENTIFIED MALE: Hi. How you doing?

UNIDENTIFIED FEMALE: I'm going to say something to the camera --

UNIDENTIFIED MALE: It better to tell you the truth.

UNIDENTIFIED MALE: I hope the rest of my employees are more appreciative of what I'm trying to do here --

UNIDENTIFIED FEMALE: We were just telling the camera how fantastic --


WASTLER: Oh dear try to cut your losses here.

LISCOVICZ: That is where you put the lampshade over your head. I think.

WASTLER: Just fall down on the floor.

LISCOVICZ: Do you know what happened after that very painful --

WASTLER: Every time I watch it, I go oh no.

ROMANS: She's never going to run a company and make $42 million when she gets fired that is for sure.

LISCOVICZ: Thankfully, we don't have that many office parties, right? Thanks Allen. Coming up next on IN THE MONEY it's time to hear from you as we read some your e-mails from the past week and you can send us an e- mail right now. We're at


LISCOVICZ: Now it's time to read your answers to our question about whether paying $40,000 a year for college tuition is the best way to launch a career.

Charles wrote, "You don't need $40 grand a year to guarantee a quality education. I went to a cheap local college and am on the same career path as my friends who went to the most expensive school. The difference is that when I graduated, my parents and I were debt-free."

An experience that Christine and I both shared.

ROMANS: Absolutely.

LISCOVICZ: Mike wrote, "With so many colleges raising tuition much faster than inflation, one has to ask why can't the government help more? The government gives billions to big corporations to boost the economy. Wouldn't providing low cost, higher education do the same thing?"

Kim wrote, "$40,000 a year might be OK if these schools would teach the student some real job skills. I see resumes from new grads claiming to have Internet and computer skills. Then they get here and can't format a letter or create a simple spreadsheet."

Now for next week's e-mail question of the week, "What does a TV commercial have to do to grab your attention?" Keep it clean.

Send your answers to, and you should also visit our show page at that is where you will find the address for our fun site of the week.

And thank you for joining us for this edition of IN THE MONEY. Thanks to Lou Dobbs Tonight correspondent Christine Romans and managing editor Allen Wastler. We will be back next week on IN THE MONEY. Saturday at 1:00, Sunday at 3:00 see you then.



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