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CNN IN THE MONEY

Encore Presentation: Karen Tumulty Discusses Democratic Agenda; Reason For Optimism For At Least One Major U.S. Automaker; California Governor Arnold Schwarzenegger Introduces Plan For Universal Health Care Coverage In His State; America More Angry Than in Past

Aired January 14, 2007 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(NEWS BREAK)
ALI VELSHI, CNN CORRESPONDENT: Welcome to IN THE MONEY, I'm Ali Velshi. Coming up on today's problem, time is money. Democrats in Congress are pushing an agenda worth big bucks for their first hundred hours. We'll look at what that means for you. Plus, style wars. Find out if Detroit's finally figured out what it should have known all along, that good design sells cars.

And the cure for that sharp pain in your wallet. California's Governor Arnold Schwarzenegger has a plan to make sure his whole state has health insurance. We're going to find out how he plans to do that.

Joining me today a couple of folks who have been on this show since gas was $1.10 a gallon. Jennifer Westhoven and Allen Wastler.

JENNIFER WESTHOVEN, "HEADLINE NEWS" CORRESPONDENT: I'm not that old.

VELSHI: Gas should be going down towards a $1.10 a gallon, now we have oil near $50 a barrel; they're almost giving away. Home price are OK. Interest rates are low. Looks like things are already.

WESTHOVEN: In some places by the way around the country you know gas is getting just below too they are seeing that $1 back up on the big signs. But people still see that their wages aren't going anywhere. That college costs are going up. Health care costs are going up. You know there is a lot of people in this country who feel they're being short changed and that's what I think is what is giving the Democrats so much power in the first 100 hours that they are calling it.

VELSHI: Yes the so-called 100 hours, 100 legislative hours. Find out more about that. The Congressional Democrats started that clock this weekend. They've given themselves 100 legislative hours to tear through a packed agenda and most of it is about money. Things like raising the minimum wage, cutting prescription drug costs and knocking down student loan rates.

But big plans may not make big headlines especially since Iraq is still the top issue for most Americans. Karen Tumulty is the national political correspondent for "Time" Magazine and joins us again on the show. Karen thank you, good to see you again.

KAREN TUMULTY, "TIME" MAGAZINE: Good to be here.

VELSHI: Karen this is a bit of a problem. These guys ran on and agenda that was part Iraq, part the economy, they're plowing ahead with the economy side of things and I don't know that everybody is as worried about it as they are about Iraq.

TUMULTY: That's right because the president had a big speech right in the middle of the week and the reaction on the hill has not been good from either party so that really is dominating the news at a time the Democrats really thought the headlines would be about them just rolling one piece of legislation after another out of the house.

ALLEN WASTLER, MANAGING EDITOR, CNNMONEY.COM: Karen, about this 100 hours thing. I mean it seems to me just an incredible gimmick. It's kind of ridiculous, but they seem to be getting traction out of it the Democratic Party at least. Are they getting traction out of it? How do the Republicans react to that?

TUMULTY: They are, first of all, the hundred hours; their clock doesn't work like your clock. Their clock works for like the NFL where you can stop play for a commercial break. But the fact is that the real reality check on all these agenda items that are coming out of the House where Nancy Pelosi can pass this stuff because she's got the power of the speakers office, she's got the rules on her side, she's got the votes.

It's going to hit the Senate. The Senate while it is nominally in control of the Democrats, the fact is that Harry Reid needs 60 votes to get anything controversial out of there and he's nine Democrats short of what he needs there.

So you know, any of this will get out of the Senate looking like it does out of the House is not very likely. Then of course once you reach the president's desk, there's a real question, too, as to whether he's either going to sign a lot of this stuff.

VELSHI: Karen, you know, you would think the White House had all the cover they needed. They had an election, which seemed to be about Iraq. They had a group that reported ideas about what they should do in Iraq. They had all the reasons in the world not to recommend a troop surge and now neither public opinion nor Congress seems to support this White House's actions. Why? You live in this world, why is this happening?

TUMULTY: Well, I mean one thing you've got to assume is that the president really believes he can get something done here. You're right, not only did we have the Iraq Study Group, we had the election, we also have the had generals in the Pentagon who for over a year have been arguing this a bad idea, but I think that the president in his gut and in the councils in the White House, the people he really trusts the most, they think this can work.

WASTLER: Karen, another big issue in the election was ethics. The voters sent a big message that you know, ethics is a problem right now, you need to fix that the Democrats did some moves this week to sort of change that picture a little bit. Passed some legislation, how effective is it going to be because cynical people like myself say oh great, you passed a new law, did you figure out how to run around it yet already? Will this effort go forward as we approach 2008?

TUMULTY: You know when I realized they were serious about this is when the guys in the house agreed to give up their corporate jets. They use them like taxis to get back and forth from their districts. Now they're going to have stand in security lines and take off their shoes with the rest of us, you know, end up in the middle seat. That I think does suggest there's a real change in the culture. They are going to be a lot more transparent they say about the things they slip into appropriations bills.

Now the Senate still hasn't really gotten through its ethics bill and by the way they are probably not going to give up their corporate jets. I think that just for a little while at least, it's going to take them a little bit of time to figure out how to get around these new rules that they've made for themselves.

WESTHOVEN: Karen the House Democrats in these first 100 hours, it looks like everything they're going after is designed to appeal to the middle class, it's been called suburban populism, and they're talking about minimum wage, prescription drug prices. Is that a place that you think the Democrats are committed to standing in or is that just something they're going to be able to pull off right in the very beginning?

TUMULTY: Well I think that this is, all this stuff is poll tested. They know this stuff that is very, very popular out in the country. However, you look into the fine print of some of the things they're doing, for instance, on Medicare prescription drugs, they're going to give the government a little bit more flexibility to negotiate prices with the drug companies and a few things like that.

But when you look at the actual impact, the outside studies of the actual impact of this legislation, it's really not a lot. You know, they're putting a lot of fanfare behind it and on minimum wage, for instance, most of the states have already moved ahead on raising their minimum wages. So I think this is stuff that they thought felt pretty safe politically.

VELSHI: Karen, by the time we talk to you the next time that 100 hours clock probably won't have run out just yet because it is very creativity designed. Good to see you and thanks for joining us.

TUMULTY: Thanks a lot.

VELSHI: Karen Tumulty is the national political correspondent with "Time" Magazine joining us from D.C.

When we come back, I've given up my corporate jet; I went to the auto show. Motor City smacked out. We're going to look at whether Tokyo knows more about building a best selling car than Detroit does. Also ahead, beam me a tune. Microsoft's new Zune can transmit songs from one player to another. Bill Gates tells us how it does that without getting copyright lawyers mad.

Speaking of mad, an outburst like this one didn't help Howard Dean's presidential prospect back in '04, but we'll talk to an author who says anger isn't always a career killer. We'll be right back.

(COMMERCIAL BREAK)

WASTLER: Everything from fuel-efficient cars to monster SUVs are on display at Detroit's International Auto Show. While Toyota continues to gain ground on Detroit's big three, our next guest says there is reason for optimism for at least one major U.S. automaker. Joining us now is Rebecca Lindland, associated director of Global Insights North American Automotive Group.

Rebecca, welcome.

REBECCA LINDLAND, ASSOCIATED DIRECTOR, GLOBAL INSIGHTS NORTH AMERICAN AUTOMOTIVE GROUP: Thank you.

WASTLER: So you've been at the auto show, a lot of cars coming out and lots of flashing lights and great stuff. Are U.S. automakers are they on the mend, can they be optimistic or is Japan just going to continue to go -- on them?

LINDLAND: Well, Japan is certainly going to continue marching on, there is no doubt there. I think we have different prospects for the three automakers actually. We can start with the good the bad and the ugly kind of a thing. I think that the good news is certainly coming out of GM as it has for much of 2006. They really have righted their ship. I ask everybody I talk to at GM, why? What happened? What's different?

The big difference is Bob Lutz, he really is sort of this iconic figure within the industry and has really re-energized the people at GM and he's the one that's made design the new god there. You know, for a long time the accountants ran the place and everything was about just getting the cheapest material.

Now it's really about getting the best material for the best price. So you're negotiating both to try and appease the accountants but also not compromise your design.

VELSHI: Hey, Rebecca, it's Ali, I was there as well, I don't know what Lutz's title is at GM, but he's the design guru.

LINDLAND: Vice chairman.

VELSHI: I don't think it's that exciting. They got the truck of the year; they got the car of the year with the Saturn Aura. The truck looks like a truck. The Saturn Aura I couldn't pick out of a lineup. What is so exciting about this? I think the Camaro is exciting, I think the Mustang is exciting, I think the Corvette is exciting. What is exciting about their new lineup? LINDLAND: What's exciting about it Ali is really that they are refocusing on design. We can get into really painfully technical aspects of it, but basically rear wheel design proportions is going to give you a very different look than a front wheel drive vehicle.

And to a lot of consumers, particularly baby boomers, what really is key is not so much exciting styling or design, but reliability in their vehicles. That's what they value when it comes to vehicle purchasing. And that's why Toyota and Honda have been able to sell and be as successful they have been with very plain vanilla design.

But if you look at the Honda Accord coop that they showed that's anything but plain vanilla, they really have pushed the envelope. Why? Because they know Honda and Toyota recognize that in the end it really is what the values that we're seeing out of gen-x and gen-y is more about design and much more exciting vehicles. You have to look at the improvement that GM is making also.

When you drive these vehicles they're significantly better, drivability, they're not bad copies of Japanese vehicles anymore. They represent real American cars for real Americans. And that's why we're excited about what GM is doing. Because it's getting back to its heritage and back to its roots. So it may not appeal to you, but there's a lot of middle America that it really, that the new design and trends that GM will appeal to.

WESTHOVEN: Rebecca, we're talking about design, reliability, but I know something else that appeals to middle America, fuel efficiency, how important is that? Do you see any changes here? This is something where years ago, Detroit got pushed to change this. A Michigan lawmaker helped thwart that and in the meantime the Asian carmakers have done great at this and just eaten their lunch in many ways in terms of market share.

LINDLAND: Right. Well Jennifer, even as recently as last year, right before September 2005, nobody cared about fuel efficiency, it wasn't on anybody's agenda at all, suddenly we saw gas at $3 a gallon, people suddenly stopped and said what am I doing driving this big huge giant SUV? We saw consumer response in the movement towards crossovers, which weigh a lot less than trucks, and you can get better fuel efficiency with a crossover vehicle.

GM has responded by bringing out large crossovers that basically hold seven people, it's bigger than a Ford Expedition, but their crossovers so they get better fuel economy; technology is also really helping with displacement on demand.

You have an eight cylinder engine and it will shut down four of those cylinders on the highway, so something like the Dodge Magnum with the hemi 5.7 liter engine gets 24 miles per gallon and the Toyota Highlander hybrid gets 27 gallons on the highway, just as an example. A GM small block V-8 will get 24 miles per gallon on the highway also. So you don't have to totally get away from torque and power to get good gas mile an it's really in the weight of the vehicle.

WASTLER: Rebecca, we're running out of time here, just real quickly in the middle of this fuel efficiency debate, all of a sudden, Toyota comes out with the big honking Tundra. Is that a good bet or bad bet?

LINDLAND: It's a necessary bet. In order for Toyota to continue to grow by leaps and bonds as they have been doing they have to appeal to middle America. That's why their new San Antonio truck plant is in San Antonio; it is building just the Tundra. They have to appeal to the broader masses than just on the coasts of America. We can talk for hours about it.

VELSHI: Well wait, after the show I'll stick around, I'm enjoying it.

WESTHOVEN: All right. Rebecca Lindland thank you so much for your insights from the Detroit Auto Show and for joining us. Rebecca Lindland from Global Insights.

LINDLAND: Thank you.

WESTHOVEN: All right. Next up after the break, oil to burn. Find out if the slide in the price of crude is creating opportunities on Wall Street.

And I-phone 1.0. See if the latest gadget from Apple boss Steve Jobs is as hot as everyone says.

What do you think of the show? Really? What do you think of our show? E-mail us anything you would like to say, comment, questions, maybe you've got some stories or topics you would like us to address. Let us know what's on your mind our address is INTHEMONEY@CNN.com.

(COMMERCIAL BREAK)

WESTHOVEN: Falling oil and commodity prices and earnings news were the focus on Wall Street this week and Susan Lisovicz joins us from the New York Stock Exchange to tell us more about that. Susan big drop in oil prices might mean a big drop in gas price. What's it like for Wall Street?

SUSAN LISOVICZ, CNN CORRESPONDENT: Wall Street liked it a lot, Jennifer. We know that oil was one of the major headlines of 2006 because of the oil spike, the all-time highs. Guess what? One of the emerging stories of 2007 is oil plummeting; we're down 15 percent year-to-date, right. In the first couple of weeks of the year, down 33 percent from the peaks we saw last summer and that is something that affects each and every one of us.

You know, one analyst estimated that for every 10-dollar drop in oil prices, it's the equivalent of a half a percent growth in GDP, which is the broadest measure of the economy. So it's basic like who cares about the Federal Reserve cutting interest rates, we've already got a tax cut with this big drop in oil prices down about $26 that we've seen since last summer.

WESTHOVEN: In the meantime, we've got other commodity prices coming down. Now as we've seen this huge jump up, that's meant higher prices for I noticed, soda and beer. Because aluminum is getting so expensive and that brings us of course to Alcoa which had some great earnings this week?

LISOVICZ: Right. Well Alcoa did very nicely this week in fact the Dow hit its first all-time high of the year because of the sharp drop in oil prices, Alcoa was a stand out as well. It's shares gained 6 percent in one day. Had the best revenues ever recorded for the company? Why is that?

Because of strong metal price. Alcoa is the world's largest aluminum producer. But guess what? Whether you're Boeing paying for an airplane or Pepsi paying for a soda can, you have to eat it or pass it on and that's what we're hearing for soda and beer.

So if you drink something, whether it's in either soft drinks or lager, you might be paying more for it but it's interesting because it all comes full circle, Jennifer, that another reason soda price are coming, are going to increase is because of high fructose corn syrup, we're told by our friends at "Beverage Digest" that one of the reasons corn syrup is going up is because more of the plants that make it are making more ethanol because oil price are coming up so much, so you see how it really affects everything. Energy really comes full circle.

WESTHOVEN: All right, Susan Lisovicz thanks for joining us from the New York Stock Exchange. Keeping a look on Wall Street and Corporate America as earnings season kicks off.

LISOVICZ: Your welcome.

WESTHOVEN: Coming up on IN THE MONEY, it's an emergency room not an insurance plan. We're going to look at California's initiative to make sure all its residents have health coverage.

And the phone that does everything but talk for you. We'll look at Apple's new I-phone and find out why first isn't always best.

And later, the hair versus the mouth. The spat between Donald Trump and Rosie O'Donnell is just one sign that losing your cool is losing its stigma. Find out why.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CRAIG AKERS, STEPFATHER OF SHAWN HORNBECK: here's always hope, hope is what gets you through. And sometimes this is what happens when you have that hope. You know, this is just one of those rare, rare things. I mean to have one missing child found is just extraordinary. To have two found at the same time is just one of those things that I don't even know if you ever read about things like that.

(END VIDEO CLIP)

WHITFIELD: He's speaking of hope and relief. The families of two Missouri teenagers are overjoyed. Both reunited after their alleged abductions, one of the boys had been missing since Monday. The other had been missing since October of 2002. They were rescued from a suburban St. Louis apartment. A 41-year-old man has been charged with kidnapping.

Oklahoma is bracing for a second blast of wintry weather after an ice storm dropped more than a half an inch of sleet. The weather was blamed for six deaths in the region, plus airport and other travel delays and thousand of power outages because of the weather.

Live coverage of these breaking stories beginning at the top of the hour. Now back to IN THE MONEY.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER, (R) CALIFORNIA: Everyone in California must have health insurance. If you can't afford it the state will help you buy it. But you must be insured.

(END VIDEO CLIP)

VELSHI: Earlier this week, California Governor Arnold Schwarzenegger introduced a plan for universal health care coverage for his state. Now it's a lofty goal, the golden state has more uninsured people than any other state in the U.S., a whopping 6.5 million, at 20 percent of the state's population.

Now you'll remember that Massachusetts passed a similar measure last year. California's plan has a few twists. Kim Belshe is going to explain it for us. She's the secretary of California's Health and Human Services Department.

Kim, thank you very much for being with us.

KIM BELSHE, SECRETARY, CALIFORNIA'S HEALTH AND HUMAN SERVICES DEPARTMENT: Glad to be here.

VELSHI: Boy that is lofty. I mean obviously California has a lot of uninsured people because California has a lot of people. What's the goal of this? Are you really talking about everybody in California having health insurance?

BELSHE: California's health system is broken and Governor Schwarzenegger has put forward a bold and far-reaching proposal for fixing our broken health care system. We have 6.5 million individuals who are uninsured. These individuals the costs of their unpaid medical bills get shifted to insured Californians, something that is akin to a hidden tax. In fact in California for every insured family they're paying about $1200 a year in additional premiums associated with the uninsured.

VELSHI: But $1200.00 per family, but where? How do you physically do this? Someone has got to pay for it?

BELSHE: Here's the plan. Under Governor Schwarzenegger's proposal, it's all about shared responsibility and it begins with the individual. If our goal is universal coverage, we must require everyone to have health coverage and under the governor's plan that's the individual's responsibility. At the same time, government has a responsibility to make coverage more affordable for our lowest income residents and the governor's plan does that.

Our health providers, doctors and hospitals, they have a responsibility to provide more affordable coverage, more affordable services. And with the elimination of this hidden tax associated with the uninsured and underinsured, our medical providers will be better positioned to provide more affordable services. Our health plans in California, under the governor's plan, will be required to guarantee access to affordable coverage in the individual market.

And finally, employers have a responsibility. The overwhelming majority of employers in California do provide health coverage. The governor's plan insures that all employers are contributing financially to the support of this program. So, it's a proposal that recognizes that universal coverage for all, affordable health care, will benefit all Californians and just as everyone will benefit, everyone has a responsibility to contribute.

WESTHOVEN: Kim, can you address one of the -- maybe it looks like an Achilles heel for the plan, which is a fear that some companies that currently provide health care coverage for their employees, maybe they're small, maybe they're strapped, maybe it's hard for them, they might decide not to because of this, let their employees go into the state-run plan and then the plan might get overwhelmed.

So first, what is the likelihood of that and how do you deal with that?

BELSHE: The majority of California employers provide health benefits today. And for those employers really nothing should change under this proposal, other than coverage should become more affordable and more available for employers and their employees.

At the same time, the governor believes it's important that all employers contribute. And so there is a modest fee on employers who choose not to participate in the program, in terms of providing coverage to their employees. They're asked to contribute a modest fee that will help finance coverage for the uninsured.

And we've endeavored to structure it in a way to ensure that we're not creating incentives for employers to drop coverage and shift their employees into the pool. And we really want to make sure that we are leveling the playing field, if you will, between non-offering employers and offering employers. The governor doesn't think it's fair to ask employers or the government to be subsidizing those employers who are walking away from this issue.

WASTLER: Kim, one sort of flash point on this whole plan is that it covers illegal immigrants as well. And, you know, there are some people, critics, who say, why are we putting up money to cover people who are here illegally, and then how do you make sure that they're going to participate in the program the way everybody should? You know, how do they enroll? How do they get involved? Can you explain that a little bit?

BELSHE: It's a very important issue. Governor Schwarzenegger's plan calls for all Californians to have this responsibility to obtain health insurance. Under the governor's plan all children will be eligible for our state's S-Chip program, which we call Healthy Families, regardless of immigration status. That has been a long standing commitment of the governor and he really believes that all the children should have access to affordable coverage.

Under the governor's plan our county governments will continue to have responsibility for undocumented immigrant adults. So that's a county responsibility, in terms of how to provide services for that population. And under the governor's plan, the counties will retain the resources necessary to support that population. The question for the counties will be, what's the best mechanism for doing so?

Right now, California taxpayers spend nearly a billion dollars in emergency services to undocumented immigrants. Under federal law, hospitals cannot turn away undocumented immigrants or anyone from an emergency room, a very humane policy, but emergency rooms are the least appropriate, most expensive setting possible for delivering services, and taxpayers are carrying the bill.

So the question for our county partners is, is that the most efficient and effective way of providing services for that population? Or are there different strategies to employ?

WASTLER: OK, well Kim, it sounds like it's going to be a pretty interesting fight to get this plan into place. We look forward to seeing it and hearing from you again in the future. Thanks a lot for joining us.

And there's lots more to come up here on IN THE MONEY. Up next, house training a PC. Bill Gates talks about how his software led to a computer you wouldn't mind showing off in your living room.

And temper, temper Ali. Anger is more in your face than ever these days. We'll get one author's take on what that means for American culture.

(COMMERCIAL BREAK)

WASTLER: Steve Jobs and Apple grabbed the spotlight this week with the introduction of the iPhone. And the big number for a lot of us was the price of the iPhone, which will be -- drum roll please -- 499 dollars for a four gigabyte model and 599 bucks for the eight gig device.

"Business 2.0's" Owen Thomas has been at the Mac World religious revival. He was running a live blog for us from the event on CNNMONEY.com. And he joins us from San Francisco to tell us more about it.

Owen, buddy, how are you doing.

OWEN THOMAS, BUSINESS 2.0: I'm well, thanks for having me. WASTLER: The iPhone, is it going to work?

THOMAS: Well, that's a big question. I mean, Steve Jobs demoed it. When you are at the Steve Jobs key note, you are in what is known as the reality distortion field. And you just buy anything he says. He's so charismatic. He's so persuasive.

You know, it certainly does seem to work in the brief few moments that a few reporters have had to play with it, but there are a lot of questions still about whether people will want to switch to Cingular, if they're on another wireless carrier. What if Cingular doesn't get good reception in their home.

You know, it's Cingular only, so that is a big problem for a lot of people.

WESTHOVEN: Did you get to touch it? I mean, Walt Mosberg (ph), from the "Wall Street Journal" and the "New York Times" people were tripping all over themselves with praise?

THOMAS: You know, it was interesting. Apple limited it to just a few folks, folks like Walt Mosberg, who is, of course, is the most respected gadget reviewer out there. Most people just got to see what I did, which was the iPhone in a glass case, like the Hope Diamond, with a security guard next to it.

(CROSS TALK)

THOMAS: You should have seen these people, they were just staring at it through the glass, mesmerized.

WASTLER: They were staring at it so long that they sort of glossed over some problems that Apple's been having on its accounting and its earnings side, and the fact that the iPod, you know, it's not grabbing the share that it used to grab, but the bottom line here is that Apple does tend to make things that work and capture people's attention.

THOMAS: Absolutely, you know, I think design wise and look and feel -- the look and feel of the device, how it works is going to be flawless, just because Steve Jobs deserves -- demands nothing less. He's a perfectionist and we're going to see that in the device, but you know what? It's only -- At 500 dollars, it's only a four gigabyte iPod. I mean, you can get a 60 gigabyte model for less from Apple itself. So, there's a real question about the value you're getting, versus just getting an iPod and a phone.

WASTLER: Well Owen, Apple traditionally -- and we only got a few seconds left -- but Apple, you know, they got that Apple faithful there, that's going to buy it just because Apple is on the label. After that they got to make it go forward do. Do they have a plan for building off that base? Because they'll sell a lot at first, but they have to go forward. What do you think?

THOMAS: Well, I think they're going have more success reaching out to the iPod faithful, which is a much, much bigger base than the traditional hard core Mac computer fan base. If they can sell this to the iPod generation, I think they're set. If it's limited to folks who really like Macs, then they'll have a problem.

WESTHOVEN: Well, they might also get the people who want, like, the cool factor, for lack of a better term. You know, they want to be the first person on the block with the new gadget.

THOMAS: Absolutely. You know, the same folks who rushed out to buy the Motorola Razor will probably rush out to get this. Maybe they won't keep it very long. Maybe they'll move onto the next phone after it.

WESTHOVEN: All right, Owen Thomas from "Business 2.0," thank you very much for joining us and for going to the show out there.

THOMAS: My pleasure.

WESTHOVEN: All right, well Apple grabbed the technology spotlight in San Francisco this week. Sin City was alive with the huge Consumer Electronics Show and our resident tech geek, Renay San Miguel was there and he caught up with Bill Gates. Gates was the keynote speaker. And they talked about Vista, Microsoft's new PC operating system and that is this week's What Works.

(BEGIN VIDEOTAPE)

BILL GATES, MICROSOFT FOUNDER: The Windows PC is at the center of this digital revolution and the way it connects up to everything else is very, very important to us. Having Vista here is a major milestone. It let's the hardware partners we have do breakthrough things. For example, here you've got a device that's got a touch screen. So you can just pick the photos you want to print and very interactive device because we brought touch to the user interface.

Here we've got, kind of, a round PC, ready for the living room, with its media center capabilities from Sony. Here's a Toshiba device that you can get your status, your next appointment here, as you carry it around, and then were you put it down, it uses a special capability, even the video doesn't require you to connect up a cable.

So here we're seeing, for the first time, how for the last two years our hardware partners have been getting us to make sure Vista has the right things and that they're doing the right things so that the hardware-software combinations really are a break through.

RENAY SAN MIGUEL, CNN CORRESPONDENT: What about the more mobile devices, the Vista powered phones and the UN-PC there, the things that you would take with you, that would have as much power as a PC sitting on a desk at home?

GATES: There's been a big gap between a portable PC and your home, in terms of the screen size, the cost, what you might want to carry around and do reading and rich things. And what we've done is we've filled that space in with our partner's work on these -- we call them ultra mobile devices. Again, nice ability to touch things and navigate around, really great packaging and now really good battery life that you want for something that you're going to be out with for a long period of time.

So extending the PC all the way up to that 60 inch high definition display, down to this even five or six inch mobile device.

MIGUEL: And all of them can -- I mean, I see a Zune there as well. And the big thing about Zune is being able to beam products to another Zune user. I mean, you've talked a lot about the Zune community. That is where you're going with some of these other things as well, being able to beam data and photo and music and whatever?

GATES: That's right. I would say it's a theme of the whole Consumer Electronics Show, is that as the world is going digital, it's got to be connected together and it's got to be high fidelity. And here, you know, that theme, by building Wi-Fi in, there's an amazing set of things we'll be able to do. You can, of course, upgrade the software and go a lot -- even further than we have.

But today, people love the idea of zapping music back and forth to each other.

MIGUEL: Speak of the Zune, I'm hearing some good things about the screen size, the ability to -- the sharing aspects of it, and I know you've talked about the digital rights management issues before, that there's still some work to be done on that. I know that there may be -- I think there's a three play restrictions on some of the content in there. What do you want to see happen with DRM in 2007? Where do you think it needs to go?

GATES: Well balancing the needs of the creators to be paid with the need for simplicity to move things around, that's a tough challenge that the industry has got to solve. The rights models require lots of people agreeing on those things. We were very pleased the music companies did let us take protected music. You can zap it to somebody. They don't have to pay, but we do put a limit on. They can only play it three times and then that particular demo expires on their device.

So we're enabling simpler models. We're in dialogue about simpler models here. But connected really is making that a front and center issue.

(END VIDEOTAPE)

WESTHOVEN: Coming up next on IN THE MONEY, days of rage, the Donald-Rosie feud is just one example of how angry some Americans are. Find out how we got here and what it means for business.

It's also time to hear from you as we read some of your e-mails from the past week. You can send us one right now. Come on, use your cell phone or go over to your PC. Drop us a line at INTHEMONEY@CNN.com.

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WESTHOVEN: So how do you deal with anger? Do you close your eyes and count to ten? Do you take deep breaths? Or do you just let it rip? This is a fascinating topic, anger and, you know, I really invite you to think about how you deal with it, your family and friends.

Our next guest has an argument that expressing anger right now in America is all the rage. Joining us is Peter Wood. He's the author of "A Bee in The Mouth, Anger in America Now."

Now in your book, you say that anger has really changed. You talk about the old anger and the new anger. Give us an idea of what you mean. What's the difference?

PETER WOOD, "A BEE IN THE MOUTH": Well, old anger was, you got angry and you did count to ten. There was self-restraint involved. You understood that anger was a kind of weakness and maybe a danger to yourself, as well as to others. So you held it back. It was Gary Cooper kind of anger.

The new anger is proud of itself. It's the anger that lets it rip, as you put it. It's the anger that says, you know, look at me. I'm so angry, you have to pay attention to me. And that's the kind of anger that I think, over a period of time, it hasn't happened instantly, has become our cultural trend. Our emotional style has changed. We welcome this anger. We bring it into almost every aspect of life. It's in our music, sport, politics.

VELSHI: I'm totally a new angry guy. I wouldn't have thought so until I was reading what you've written. And that is it's the anger that says, I'm not heard unless I really make it loud and clear. Does it work? And should I continue?

WOOD: It makes you feel good for a little while, but it turns a lot of people off. They're looking at your angry display, not at your message. So that's the danger of the new anger, people look at you as a performer and don't take you very seriously as a thinker.

WASTLER: Peter, as the designated angry young white man here, I want to ask you, is there any political aspects to anger? I mean, is that still there? A lot of people said there were and it was a class thing, but you seem to say, maybe, sort of, no.

WOOD: Well, there's lots of politics in anger. I think there always has been. You can reel this back to the 1960s, the Democratic convention in 1968 in Chicago, where the anger erupted as a riot and there was a famous trial afterwards, with the Chicago Seven.

Today, we've had maybe a whole decade of anger in politics, the anger of conservatives against Clinton, the impeachment, which got the Democrats riled up, and then these last six years have been a period, I think, of ever ratcheting up the anger on the American left. The progressive left has gotten really betuperatively (ph) angry and proud of it. This is no longer something that they view as a weakness or a susceptibility, but as it's empowering us to have that rage to get our way.

And I think there's anger in every aspect of American politics, left, right and center. But the really hot part of it, at the moment, is on the American left.

WESTHOVEN: What about you?

WOOD: Me, I'm just a completely peaceable person.

WESTHOVEN: Do you ever lose it?

WOOD: Yes, I do, but most likely in writing. That's --

WESTHOVEN: Isn't anger sometimes a way that we just, as humans, say, you know, this is not going to pass. Like this is something that we can't tolerate and it does have an element of self-righteousness, right, but it's a standard sometimes.

WOOD: I think there is a time and place to get angry, but when you do get angry, you ought to know where that's going to lead you. Is it going to make this problem easier to solve or harder to solve. It makes it easier, if you're trying to galvanize other people to pay attention to an issue that they've been ignoring, but beyond that point, it usually becomes counter-productive. So there is a place for anger, but it has to be controlled anger.

VELSHI: Interesting, because you talked about how anger used to be something that you would be ashamed of. It would indicate that you had lost some control. Look at the whole Donald Trump-Rosie thing. I got to tell you, right or wrong, I think there are a lot people I've heard saying, Donald Trump seems kind of angry and it seems to be over the line?

WOOD: I think the Donald Trump-Rosie O'Donnell affair is almost a perfect instance of what I call new anger. It's all flamboyant. It's all display. It's constructive towards nothing at all. They're each throwing mud at each other. It's a great spectacle for everybody else. It's kind of entertaining to see who's going to come up with the nastiest comment next.

WASTLER: They've sort of made money off their anger in this, right? I mean, it sort of upped their ratings, got them back in the spotlight. I mean, they're both second tier personalities, really, and all of a sudden this fight has put them back in the front pages.

WOOD: Well, I think anger does sell. There is a kind of anger industry. We've sort of discovered it in certain pockets of television and talk radio and the Internet. So absolutely, there's an anger industry and lots of people have figured out how to market their particular anger to get attention.

WESTHOVEN: And you say when someone like Howard Dean loses it, it's disturbing, but when someone like Donald Trump does, he's kind of exempt.

WOOD: He's already the second tier personality. We want our politicians to have a certain gravitas, to be people who can hold us through troubled times. There is a certain other kind of celebrity, who we just expect to be an entertainer, maybe even a buffoon. And if they lose it, it's fun to watch. VELSHI: Don't take a shot at me after he just said that. I said don't take a shot me. Peter, good to talk to you. Thank you so much -- Thank you very much for joining us. Peter is the author of "A Bee in the Mouth" -- what a great title -- "Anger in America Now".

Well, on this week's Life After Work, taking a shot at a second career without losing your temper, we caught up with woman who has taken her love of photography and she has turned it into a nice little money maker in retirement.

(BEGIN VIDEOTAPE)

ANDY SERWER, CNN CORRESPONDENT (voice-over): As a professional nature photographer, 73-year-old Carlene Reinhart travels the globe in search of memorable images.

CARLENE REINHART, NATURE PHOTOGRAPHER: We were in Africa and I got some marvelous shots of a lion fight.

This picture I took in Fiji on a reef. I love it because all the fish are headed in the same direction.

SERWER: Carlene's interest in the photography began in her 50s on a scuba trip.

REINHART: We were diving in the South Pacific and I had some good pictures and I thought, wow, if I could do this, I ought to be able to do some really good stuff, if I got a better camera.

SERWER: So she spent about 1,000 dollars to upgrade her equipment and started taking class.

REINHART: I found that once I started taking pictures, I looked at things differently. That's been the beauty of it.

SERWER: Carlene practiced her hobby while still working at her career in organization design and development. After rolling over her company retirement into an IRA that really paid off, she was able to retire and devote more time to photography.

REINHART: I love it. It is the most rewarding experience.

SERWER: Carlene sells her photos on her Web site, at markets and by word of mouth.

REINHART: I hope my photographer hangs on lots of people's walls.

(END VIDEOTAPE)

VELSHI: We'll be right back with more IN THE MONEY. Stay with us.

(COMMERCIAL BREAK)

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