Return to Transcripts main page
CNN Newsroom
Crippled Cruise Ship Limps into San Diego; New and Disturbing Warnings for Smokers; Uncommon Bravery; Why G-20 Matters To You; A Look Inside the U.S. Embassy in Afghanistan; Secrets of Success from the CEO of Heinz Company
Aired November 11, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: Hello my friend, Tony. I was having a big conversation with my friend Christine Romans about these deficits and what they mean. I got caught up and almost forgot I have a show to do. Good to see you my friend and we're going to pick up that coverage of the cruise ship just came in. You have a great afternoon.
Among the big stories happening right now, by the way, and Tony has been telling you about this. America is saluting it's heroes this Veterans Day, honoring the men and the women protecting our freedom around the world. We are checking in with troops on the ground. We'll check in with the Commander in Chief and a Medal of Honor recipient.
A crippled cruise ship you just saw that, Tony was talking about that. It limps into San Diego harbor. We're greeting passengers at the dock; you just saw that as well. We're hearing stories about the sanitation problems, smells, hot cabins, cold spam, cold pop- tarts...how bad did it really get? Let's find out.
And new warnings for smokers like you've never seen before. I've seen them because I come from Canada where we've had them like that for years. Shocking unfiltered images to scare young people from cigarettes once and for all. I'm going to show you want those new warnings are going to look like. But the conversation I was just having with my young friend Christine Romans.
This country's crushing debt and deficit can bring to mind Mark Twain's famous like about the weather. Everybody talks about them but nobody does anything about them. That's not strictly true of course, but not since the '90s has Washington done anything big and bold to balance the budget and level off our long-term debt until maybe now.
An independent, bipartisan commission that President Obama tasked with doing what politicians won't has done just that. Weeks ahead of schedule -- it was supposed to be released on December 1st -- it has gone public with a plan that it says would slash deficits by almost 4 trillion, with a T, dollars over the next decade.
Here's what the plan is going to look like. I'm going to level with you; even economists have a hard time grasping these billions and trillions, so they use GDP, the total size of the economy, as a reference point. Next year's deficit will likely hit -- and that's the bar on your extreme left there -- will likely hit 8 percent of GDP.
But if you follow the dark red bars, not the lighter parts above it, the dark red bars; it drops to under 2 percent of GDP by 2017 and then stays there. That's the commission's scenario. So if they didn't do anything under current policy, it would be those lighter colored bars. Under the projections that they're making, under this proposal, look at where the deficit goes in this country.
The pink bars are nothing much below 4 percent as far as the eye can see, now I know this is a lot of numbers, I'm going to give this to you in a different way. The way that's probably more important to you. Check out the debt. What I showed you was the deficit. The debt is the accumulation of all those deficits. It's the accumulation of all our yearly borrowing. The middle line, the red line there assumes that current law in this country stays exactly where it is, in which case the debt never drops below 60 percent of GDP.
That's kind of scary. Now let's just look at the light blue line. That's the top line. That's a real world projection because law is not going to stay as it is. That assumes that the Bush tax cuts are not renewed for the wealthy and you can see that that ends up with debt equaling twice the U.S. economic output by 2035. Think about that; debt that is twice as big as everything that we do in this economy.
Some people would call that bankrupt. Now, look at the bottom line, that dark blue line. That is what the commission proposes. They say that if you put into force the things that they want based on a number of economic assumptions, the debt starts to go down, it starts to get a lot lower. OK, how would that happen? Let's say we all like that - obviously if you look at that thing you're going to say, "I want that bottom line, I want that dark blue line."
Everything is on the table; everything that we spend money on has got to be on the table. Defense gets cut just like everything else. To bring military savings up to $100 billion in 2015, the panel recommends freezing pay, including non-combat pay in the ranks, cutting procurement, buying less stuff and reducing overseas bases by a third. Now that's the military.
To cut as much from domestic spending, the panel recommends freezing government pay, cutting the government work force, and eliminating earmarks, what critics call pork. In fairness, earmarks are not a substantial part of the problem right now, but they are looking at everything they can cut. How many times have we heard that? The panel says reform and simplify.
Cut rates, cut income tax rates at the federal level but also cut out deductions, credits, what the Wogs call tax expenditures, by the way, some of those -- that includes the credit that you get for your mortgage interest to some degree. They want to keep it in for people with not very big mortgages. Members also want to jack up the gas tax 15 cents a gallon. It will cost you more to drive.
I haven't even gotten to social security, and I stress, this is a draft of a proposal. The real proposal is coming out December 1st and this is light years from actually becoming law, but it is a whole lot to chew on. Joining me to chew on the business and the politics are two of the best - CNN Senior Political Analyst, David Gergen and my partner on "Your Money", CNN Business Correspondent Christine Romans.
I'm going to start with you, Christine, because I want to get to that social security part of things. The bottom line is this does include changes to social security. It means not receiving social security, increasing the retirement age.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Absolutely, up to 69 years old by the year 2050. So seniors right concerned about "wait a minute, what does this mean for my check next year?" Nothing. For generation why, it means some big changes to you. You're going to have to work longer if these sorts of provisions make it.
VELSHI: But you've got 40 years to plan for it.
ROMANS: You've got 49 years to plan for it. And frankly, when you ask surveys for Generation Why, many of them know, they know that changes are coming and that maybe the safety net will be a little different looking for them. Also changes to how inflation is calculated for these benefits and also maybe means testing these benefits.
VELSHI: That means not everybody gets them.
ROMANS: That means not everybody gets them.
VELSHI: You have to qualify.
ROMANS: More of an insurance program than an investment program. You know, so those are things that are problematic for the aggressives. You already heard Nancy Pelosi and Senator Dick Durbin coming out very strongly against these plans, but the President in Seoul said, let's put it all on the table. And do not shoot anything down yet.
VELSHI: And this is -- let's bring David Gergen in. David, I mean, that's the bottom line. I think a six-year-old can solve the deficit problems and the debt problems. The issue is we have to have the resolve as a country to make the difficult decisions, and this panel has come forward with some things that will be very hard for some people to swallow. There is no free lunch. Somehow we are going to have to pay to reduce this country's deficit.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Well, as you well know, Ali, we've been having a party here on the money we're borrowing from the future for a long time. And the same politicians now put us in this mess are objecting to ways to try to get us out of it. And I must say, yesterday when this first came out, many of us looked at it, the leaders of the commission - and let's remember, it's just the leaders who propose it.
They don't have the votes inside the commission as of this moment. But they were both bold and courageous in proposing this. In the cold light of morning, when you look at it, as Matt Miller a wonderful columnist pointed out in Washington Post blog section today, this is actually courageous but not very bold.
It does not balance budget, even with all these screens. This doesn't balance a budget until 2037. It takes us 27 years to balance the nation's budget? Come on, give me a break.
VELSHI: So you think there need to be tougher stuff inside. Tougher medicine.
GERGEN: Absolutely, absolutely. This isn't - we're not really being tough enough on ourselves here if we're going to take 27 years to balance a budget. You know a responsible, political answer here, the commission really ought to come up with something that votes something very much like this, but it's just a starting point.
It ought to get tougher, not a lot lighter and not torn apart. We're too close, as you know, to the edge financially. You just mentioned how big the debt was compared to the GDP. It's around over 60 percent. That's up in a very, very problematic zone. It's heading toward 100, which is very dangerous.
VELSHI: Right and you don't need to be a mathematician or an economist to understand what a 100 percent debt as a 100 percent of everything you put out there. That is a very dangerous situation. By the way, we're American individuals were for a while.
GERGEN: Well Greece got to 115 percent and went bankrupt, right? So, and traditionally, since second world war, since slightly after second world war, our average debt as a percentage of GDP has been around 36 percent. We're in the 60-plus percent range right now, and that is growing increasingly dangerous. We have a choice now. Either we can show that we are mature adults who know how to govern a society responsibly, or we can refuse to do that and just take this country straight off the rails.
ROMANS: And the big issue here is that when you have your debt that is such a big part of the size of your economy, that means what you're paying in interest is money that is going out the door to pay an interest, it's not going to running your country. And the prosperity of America has always been what has made her special around the world and what has allowed her to flex her foreign policy muscle at the same time.
So, this is an issue that is not just an economic issue, but it becomes an issue in terms of diplomacy, and that is a very serious thing for us to think about. One thing I asked a bunch of analysts earlier today, David, was how do you sell to people that they're going to have to take some pain here in the middle class? This is going to hurt for everyone, no matter who you are.
And she told me, if you don't do it now, there won't be a car to drive for your complaining about 15 cents gas, there won't be a job to work that you're complaining about having to work until your 69. There won't be a house to live in where you're complaining about your mortgage deduction. That's how serious it is for some budget analysts. VELSHI: Good discussion and David and Christine and I are all committed to continuing to having this discussion with you in great detail. We're going to do what we have to do to break this down. Americans have said this is a very, very important concern to them and they are right about that, so we will stay on top of this. David, good to see you. We'll have a fuller discussion about this again, and Christine, we'll stay on top this together. Christine will be with us again in an hour.
Alright, an American soldier about to receive the nation's highest military award talks about the night in Afghanistan that changed his life and the lives of his comrades forever. This story really is extraordinary. It's a story of extraordinary bravery, and we'll bring it to you next.
(COMMERCIAL BREAK)
VELSHI: Alright, on this Veteran's Day, you're looking, by the way, at live shots of the Vietnam Memorial in Washington. President Obama is calling on Americans to honor the sacrifices given by those men and women who have protected the nation by serving in the military. With the President in South Korea for the G-20 summit, Vice President Biden took part in a wreath-laying ceremony at the tomb of the unknowns at Virginia's Arlington National Cemetery. Half way around the world, President Obama is speaking at a U.S. Army Garrison; paying tribute to American's who fought in the Korean war nearly 50 years ago. And those now fighting and dying in Iraq and Afghanistan.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Now on this day, we honor every man and woman who has ever worn the uniform of the United States of America. We salute fallen heroes and keep in our prayers those who are still in harm's way, like the men and women serving in Iraq and Afghanistan.
(END VIDEO CLIP)
VELSHI: American servicemen and women have paid a high price fighting in the wars in Iraq and Afghanistan. Today 5,698 Americans have been killed in those two wars. Next week a veteran of the Afghan war will receive the nation's highest military award, the Medal of Honor. His story is one that should make us all proud and humble.
Here's CNN's Barbara Starr.
(BEGIN VIDEOTAPE)
BARBARA STARR, CNN CORRESPONDENT (voice-over): But in those two three minutes, Army Staff Sergeant Sal Giunta went from a self- described mediocre soldier to a hero.
STARR (on camera): We've come to Afghanistan to find the men that Sal Giunta fought with. Many of them are here on this remote combat outpost, but their thoughts and memories are with Sal and what happened that night. STARR (voice-over): That October night, Giunta was walking along the ridge line with other members of his unit. Assigned to protect other soldiers as they were walking back to their base.
SGT. FRANKLIN ECKRODE, U.S. ARMY: We opened up into a small clearing out of a lightly forested area and a single shot rang out.
STARR: It was what the military calls an l-shaped ambush, sprung by the Taliban. Which means Taliban fighters are both in front of the men and to their side.
STAFF SGT. SAL GIUNTA, MEDAL OF HONOR RECIPIENT: There's not just one of them and it's not two of them and it's not 10 of them, it's probably more than 10 and they're really not that far way.
UNIDENTIFIED MALE: You could actually watch the guy pulling the trigger who was aiming at you.
GIUNTA: It seems like your world is exploding in bullets and RPGs and everything.
ECKRODE: Just a bad situation.
GIUNTA: We looked and it was along our whole side. It was along, you know, our flank.
STARR: Every soldier that night was shot.
UNIDENTIFIED MALE: You know, I got shot running backwards shooting at the enemy. I could see then.
ECKRODE: They started coming out of the trees and getting closer. I shoved over a berm on my back and got hit a fourth time.
STARR: Hit eight times was the man in front, walking point as the military says, Sergeant Josh Brennan of McFarland, Wisconsin. He'd talked to his dad, Mike, only a few days before.
UNIDENTIFIED MALE: Actually, he had volunteered for that mission that day.
STARR: On that ridge line, Josh Brennan was down, severely wounded. Sal Giunta raced ahead into the face of Taliban fire.
ECKRODE: He got to the front. He killed one of the guys that was dragging my team leader away, John Brennan. Wounded another one. Recovered Sergeant Brennan. Brought him back to an area where we could secure him and continue the fight. Started the aid on him. And, huh, for all intents and purposes, the amount of fire that was still going on in the conflict at the time, he shouldn't be alive right now.
STARR: Six hours later, Josh Brennan died. Also killed that night was the medic, Hugo Mendoza, of El Paso, Texas.
It's that act of bravery that was above and beyond, was Sal Giunta, running into enemy fire, and getting to Josh to help save him. GIUNTA: I'll think about it and it hurts, but saying it out loud makes it that much more real. And I feel like I've said it enough and I know it's real, but sometimes I can trick myself and just not think about it for a while. It's very bittersweet. I mean it's such a huge honor. It's a great thing. But it is a great thing that has come at a personal loss to myself and so many other families.
STARR (on camera): And that is what you want people to know.
GIUNTA: Absolutely.
STARR (voice-over): Extraordinary. And Staff Sergeant Sal Giunta would want you to know, part of an extraordinary group of soldiers.
Barbara Starr, CNN, Afghanistan.
(END VIDEOTAPE)
ALI VELSHI, CNN ANCHOR: What a story. What a story of bravery.
Hey, leaders of the world's biggest economies and the fastest- growing economies are meeting at the G-20 Summit today in Seoul, South Korea. And a lot of people don't really want to talk about the G-20, but we're going to explain to you why it actually matters to you, possibly to your job and your financial future, when we come back.
(COMMERCIAL BREAK)
VELSHI: The group of 20, G-20, is made up of the world's biggest and fastest emerging economies. The group of 20 countries make up -- or at least they represent 85 percent of all of the world's economic output. Here are the top 10 countries today by GDP, by Gross Domestic Product, which is the biggest way you measure what a country does.
You can see the U.S. is, by far, the biggest, $14.6 trillion. Then China, Japan. We're going, strangely, right to left. Yes, we're doing it Japanese style. U.S., China, Japan, Germany, France, U.K., Italy, Brazil, Canada and Indonesia. But you can see, if you add up all the European countries, you got Germany, France there. But the EU is actually bigger in total than the United States. But if you break them out like that, that's how the countries look.
Now, output is going to change in five years. For example, India is likely to be in the top 10 in a few years. These major countries -- these countries face three major obstacles -- rising debt, aging populations and a bigger, more competitive work force.
Christine Romans is here with me now.
What we want to talk about is what's going on at G-20. And ultimately, Christine, I have this conversation every time there's one of these summits, whether it's a G-8 or a G-20 or something, do they matter? Are they relevant? They cost a lot of money. There are always security concerns. What happens in these rooms when these people all get together that can't be done by their underlings and, you know, by Skype. CHRISTINE ROMANS, CNN CO-HOST, "YOUR MONEY": Well, it's done by their underlings, first of all. You know, the people who are the deputies who are doing a lot of the advanced work. Whenever you have 20 prime ministers, presidents and kings all in a room together, I mean it's a pretty big deal. And this is the world community. Eighty- five percent of the world's economies speaking with one voice, or trying to --
VELSHI: Or trying to.
ROMANS: About how to get out of this global economic crisis and a slow recovery for the western countries.
VELSHI: Yes.
ROMANS: And they're not really speaking with one voice and that's the news here.
VELSHI: That's -- right. OK. So now what happened? What happens if they go there and they don't come to an agreement? So President Obama went. One of the things he wanted to do -- it wasn't part of G- 20, but he wanted to cut a deal with South Korea that would really allow for more American exports of vehicles, amongst other things--
ROMANS: Cars and beef.
VELSHI: Cars and beef. And that would have resulted in American jobs. That's been sort of derailed a little bit.
ROMANS: That's a tricky deal and it's been hard to get that one.
VELSHI: But it says -- what's the -- what's the best that can come out of this kind of a summit and what's the worst?
ROMANS: Well, the best that can come out of this particular summit is this agreement from everyone that they're not going to undergo -- we're not all going to have competitive devaluations. What does that mean? That we're all not going to use -- each country using its courtesy to try to boost its exports to help it but maybe hurt other people.
VELSHI: Right, so China keeps its currency low. The U.S. now accused of trying to keep its currency low because of this QE2, this printing of $600 billion.
ROMANS: Right.
VELSHI: It's had that effect, right, the U.S. dollar has dropped.
ROMANS: But even agreeing on that kind of language is very, very difficult. And this has been more contentious than we've seen in a while. And even a year ago, the G-20 in Pittsburgh, there was this unity there that many people say, you're definitely not (INAUDIBLE).
VELSHI: The world is going to hell in a hand basket a year ago, two years ago. We all need to be in this together. We need to have a coordinated effort. Our central bank chairman have to speak to each other and coordinate efforts. And we used to see communiques --
ROMANS: Yes.
VELSHI: Country after country joining with each other to prop up the world's economy. Now people may say, you know what, I -- that's not good for me. I'm going to do what my country wants to do.
ROMANS: And as one analyst said to me, he said, it's every man or every country for himself. And what the U.S. does with its Fed stimulus may be good for one country and bad for another. China's currency is already pegged to our currency, so that makes it even doubly confounding for other countries who are watching our currency slide, the China currency is stuck to it. So all of this -- that's why they're talking about currency wars -- currency wars.
VELSHI: Yes. It's hard. I mean, it's hard. And I'm sort of -- I'm empathetic to our viewers right now because you and I are, you know, money geeks, but most people don't sit around and think about currency wars, right? The only time -- when does the average person think about currency? When you're making a trip.
ROMANS: But I'll tell you something. I went to South Carolina one time to talk to some folks and do a story there in steel town.
VELSHI: They have the same currency that we do here.
ROMANS: They do. They have the South Carolina dollar. And I walked in and people were asking me about the (INAUDIBLE) and how undervalued I thought it was at 20 cents --
VELSHI: Interesting. Because South Carolina was a manufacturing state --
ROMANS: That's right.
VELSHI: That lost a lot of jobs. So they used to make furniture in South Carolina.
ROMANS: That's right.
VELSHI: They used to make bicycles in South Carolina.
ROMANS: And the Chinese put them out of business.
VELSHI: That goes -- that gets made in China.
ROMANS: That's right. And so you'd be surprised that we think we're geeks about this, but I know that there are people out there in these towns in American --
VELSHI: Right. You've lost your job because of currency.
ROMANS: Who are very well aware that the playing field has changed, globalization has become more mature. And the thing that they always promise about globalization, it was going to level the playing field. That means the haves, have less, the have-nots get a little bit more.
VELSHI: Right. So we were the haves --
ROMANS: And people were very uncomfortable all along the way.
VELSHI: China, India and Brazil were the have-nots. And they're going to have a bigger share in that and it's absolute to some degree. So we're going to have a smaller share and that hurts us.
ROMANS: And that's something that is one of the -- one of the consequences that is really starting to weigh on people about where we go from here in the global economy.
VELSHI: Yes.
ROMANS: Especially when people -- people who have it more and have less now vote.
VELSHI: Yes.
All right. Well, you and I can sit and talk about this for hours, but I actually am going to have to do a little bit more news. But we are going to talk about this more on the weekend on "Your Money," Saturdays at 1:00 p.m. Eastern, Sundays at 3:00 p.m. Eastern. It's a big deal. It's a big issue right now. Christine, by the way, is also the author of "Smart Is The New Rich," with some very, very cutting edge ideas about how you can take advantage of a very, very changed and changing economy.
I've got a trivia question for you now. What year was the Heinz Company created? 1801, 1869, 1910 or 1957. We'll have the answer for you after the break. And the CEO of Heinz is going to join us live to talk about one of the oldest companies in America, one of the oldest brands in America, how it's lasted through the wars, through the great depression, through the recession. We're going to talk about food. We're going to talk about leadership in America. A great conversation.
(COMMERCIAL BREAK)
VELSHI: Before the break we asked, what year was the Heinz Company created? 1801, 1869, 1910 or 1957. You know on this day of Google, these answers, you can cheat on them. You can look it up. If you did, you found out it was 1869. That's when Henry J. Heinz and L. Clarence Nobel launched Heinz and Noble with horseradish, by the way, which was delivered by horse-drawn wagons to groceries in and around Pittsburgh. Ketchup was added to the line-up only in 1876.
In 1914, Heinz Cream of Tomato Soup hit the shelves in the United Kingdom. Heinz celebrated its 57th anniversary with 57 varieties of products in 1926. You know about Heinz 57. It's still used in marketing campaigns today. In 1931, Heinz fought the Great Depression with two other items, ready-to-serve soup and baby food. It was the year 1946 when Heinz acquired Starkist and, of course, Charlie the famous tuna. Heinz acquired Ore Ida in 1965. The Heinz company hit the billion dollar mark for sales in the 1970s. Bought Weight Watchers in 1978. And, of course, the incredible easy squeeze bottle -- can you imagine, that was all the way in 2000. And that brings us to today. Heinz did more than $10 billion in sales last year. They've got more than 32,000 employees worldwide. Too many brands to count now .
And here to give us the secrets of this great American company's success, the CEO of H.J. Heinz Company, Bill Johnson, joins us live from Pittsburgh, the company's world headquarters.
Bill, good to see you. Thank you for being with us. We've been trying to get together. We were hoping to be in the same place, but we're not. But we're happy to have you here.
WILLIAM JOHNSON, CHAIRMAN, PRESIDENT & CEO, H.J. HEINZ COMPANY: Thanks very much. I enjoy being here.
VELSHI: Bill, I want to talk in a minute about your book. You've got a great new book which not really relevant to all my viewers, it's preparing CEOs for success, but it's relevant because you have identified in writing this book some of the problems inherent with corporate leadership today in America.
We have, as we saw last week in our election, we have a remarkable distrust in America for Washington and for politics. A lot of that distrust extends to business leadership in America. Except, what we keep on saying is we need business leadership in America to create jobs and to create investment and create factories.
What is the message to America's CEOs right now, to regain the trust of the American people?
JOHNSON: Well, I think the most important message, and frankly one relevant for politicians and every other leaders, is integrity. I think you have to be people of your word and you have to mean what you say, and then you have to follow through. I think integrity is the foundation for any success and any sense of excellence, whether it be in business or in politics. And I think over the last two or three decades, maybe business and certainly politics have lost their way a bit. But once you have a foundation of integrity, that's where it all starts.
VELSHI: Where does that come from? Is this -- where do we create this culture from? Because is it going to be CEOs who read your book? Is it going to be CEOs you know like that? Is it going to be boards of directors? Is it going to be shareholders? Is it going to be government regulation?
How do we get this integrity back in the system?
JOHNSON: That's a very good question. I think it's partly endemic of individuals that participate in business or in politics. Partly it's a function, obviously the regulatory environment around us. And partly it's a function of the way we're raised and the way we're taught and the values that are instilled upon us.
You know, you referenced the fact that this company was found in 1869 and I'm only the fifth chairman and sixth CEO in 131 years. And the value system that's been established in the Heinz company is very constraining in terms of integrity and very fulfilling in terms of the history in which we can build. So I think it's a lot of characteristics. But fundamentally, it still comes back to doing the right thing all the time.
VELSHI: Bill, talk to me about food, one of my favorite topics. I want to talk about trends in food, I want to talk about what Christine Romans has been telling us for the last couple of weeks. We've seen food inflation, we've seen the cost of food go up. Some of that is the dollar, some of that is demand in other countries.
Tell me about the most interesting trends in food because you deal with a lot of it.
JOHNSON: I think one of the most interesting trends, and I think there are two that come to mind and then there's a third that's certainly emerging.
The most important is meals at home. Consumers for the first time in decades are returning to home to consume their meals, whether it be dinner with friends, or dinner with entertaining. Whether it be lunch, breakfast. Whatever it may be, meals at home have increased significantly over the past four of five years.
The second is value. Consumers are more value-conscious now than in any time I've seen in my 36 years in this industry. And I think that's a function, not only of the economy, but, frankly, part of the aging population and just the way people go about shopping.
Then the third trend that's emerging right now -- it's kind of interesting -- is health and wellness. Reduce salt and sodium in products, less sugar, lower fats. And all these trends are sort of working together. And ultimately they lead to what consumers really want most, which is convenience and portability, in addition to value and meals at home.
In terms of commodities, Ali --
(CROSSTALK)
VELSHI: Oh, sorry. Go ahead.
JOHNSON: In terms of commodities, we are seeing a significant change in commodity prices. And I think you hit on two of the reasons, which is the changing value of the dollar, and obviously growing demand in the emerging markets. And I think the third is that we've just had a period of volatility since the collapse of 2007 and 2008. Whether or not that's going to find an equilibrium, I don't know yet. But we've seen these periods before and they tend to work themselves out.
VELSHI: Bill, good talking to you. I'd love for my viewers to get even more access to you. I want to talk more about manufacturing, I want to talk more about what it's going to take for companies to go on a hiring binge again and get a lot more Americans back to work.
We're out of time now but I extend the invitation for a greater conversation, hopefully when you and I are in the same place.
JOHNSON: Look forward to it, Ali.
VELSHI: All right. Bill Johnson is the chairman, president, and CEO of the H.J. Heinz Company, joining me from Pittsburgh.
All right. This is very hard to talk about, but pictures of dead people, sore-covered lips, and smoke blown into the faces of infants. We're talking about proposed warning labels on cigarettes. Who's going to want to buy a box that has those kinds of pictures on them. We're going to show them to you after the break.
(COMMERCIAL BREAK)
VELSHI: New graphic warning labels are proposed by the Food and Drug Administration for cigarette packs. Let me show you some of them. The labels are for the Family Smoking Prevention and Tobacco Control Act. These are graphic. The act requires that cigarette packages and advertisements have larger and more extreme health warnings. Look at that. A dead body. As you can see, the proposed warning labels are accompanied by colored pictures showing the negative health consequences of smoking.
There's a picture of a cigarette mimicking a drug needle; one with smoke coming out of the man's tracheotomy hole. Another picture shows the extreme damage that smoking can do to your teeth and lips. There are pictures of kids surrounded by smoke, and even a mother blowing smoke into her infant's face. There are also several pictures of dead bodies showing the effects of smoke and how it can kill. You can see diseased lungs of cancer-ridden patients and surprisingly, the pictures are all bad and horribly graphic.
There are three warning labels that show people giving up smoking. The Tobacco Control Act doesn't want the FDA to ban tobacco, but it does allow it to regulate the tobacco industry. Just to give you some perspective, check this out: 20 percent of American adults smoke; 20 percent of high-school students smoke; nearly half a million people a year die in this country from smoking-related health issues.
This is a huge problem for the country, but these labels aren't new. Thirty-nine countries around the world go well beyond standard warning labels with ones much more graphic. I know in Canada, they do that, as well.
The Afghan war, now in its 10th year with no end in sight. If you look hard, there are signs of progress. We'll show you one thriving example in Globe Trekking, next.
(COMMERCIAL BREAK)
VELSHI: Time now for Globe Trekking. Our journey today takes us to Kabul, the capital of Afghanistan. On this day, honoring U.S. Veterans, it's important to remember that American troops are now in the 10th year of the Afghan war. So far 1,277 Americans have been killed while the Taliban shows no signs of throwing down their weapons anytime soon. There are few signs of progress. One is the U.S. Embassy.
CNN's Jill Dougherty takes us on a tour.
(BEGIN VIDEOTAPE)
KARL EIKENBERRY, U.S. AMBASSADOR TO AFGHANISTAN: When I left here in 2003 as a Major General, Jill, there was none of this.
JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT (voice-over): We're getting an exclusive tour inside the massive U.S. Embassy compound in Kabul.
EIKENBERRY: You'll see that train over there and that's more construction going on.
DOUGHERTY: Our guide, former commander of U.S. Forces in Afghanistan and current Ambassador Karl Eikenberry.
EIKENBERRY: We believe this the largest and most rapid build-up of civilians that we've had in any missions, globally, since the Vietnam War.
DOUGHERTY: The days starts with a staff meeting and a tribute to those killed in action.
Then some quick business in the halls.
EIKENBERRY: I got that report that you had on the governance, which is excellent. And you're turning that into a cable?
DOUGHERTY: But it's not just about diplomacy. He's also a facility manager in chief.
EIKENBERRY: What's on the menu today here?
DOUGHERTY: Upstairs the ambassador's wife invites us into the residence. U.S. diplomats can't bring their families. Ching Eikenberry is the only spouse in Kabul.
CHING EIKENBERRY, WIFE OF U.S. AMBASSADOR: So I'm the first woman ever living in this residence. So I decided to make it a little bit more homey.
DOUGHERTY: The walls are covered with photos and a message.
C. EIKENBERRY: It's black and white and it's a picture of the Twin Towers before the 9/11 attack. We would just like to remind people of the reason we're here.
DOUGHERTY: Some living quarters are less spacious.
MATTHEW CASE, U.S. EMBASSY WORKER: I enjoy the work I do, though, so it kind of makes up for it.
DOUGHERTY: The State Department's Matthew Case shares this tiny room with five other men. CASE: We have no bathroom, we have no shower, we have to walk outside to another hooch about 100 yards away to take a shower and go to the bathroom.
DOUGHERTY (on camera): Not easy.
CASE: Not easy at all.
DOUGHERTY: So there are some compensations for working at a pretty difficult post and this is one of them. It's the coffee corner where you can get a pretty mean cappuccino.
(voice-over): Even in a war zone, some other comforts of home, like a gym and a pool.
EIKENBERRY: There is a lot of pressure here and people can predict Friday will be their slow day. It's a day where they come to the pool, exercise, they'll get a chance to just take a break, read.
(END VIDEOTAPE)
DOUGHERTY: So as you can see, definitely, Ali, it looks a little luxurious when you see that pool, but it really is a tough post. And the main thing is this quick, rapid buildup which makes it difficult for people to even fit people physically there.
VELSHI: Jill, thanks for that and thank you for your continuing series of stories on Afghanistan. We hope to continue with them and get a better sense of what's going on in that country. Jill Dougherty.
Animals have once again invaded CNN in Atlanta, and I am not there for it for once. Chad - oh my goodness, me! Chad Myers joining the folks at SeaWorld after the break, at which point somebody will explain to me what those sheepy goat-looking- things have to do with SeaWorld.
(COMMERCIAL BREAK)
VELSHI: You know, we're big fans of animals on this show. Today is no exception. I can't believe I'm not in Atlanta for this, though. SeaWorld brought more animals to CNN, and I'm not there to cover it.
But my good friend Chad, who loves animals as much as I do, is there in Atlanta with animals. You got sheep, you got the falcon. Do you have a fox in the NEWSROM?
CHAD MYERS, AMS METEOROLOGIST: We have a fox, a red fox. He can't be here. Maybe he's here in India. (ph) But a little red fox.
VELSHI: Now, you are there with Angie Llanas?
MYERS: Llanas. Yes.
ANGIE LLANAS, SEAWORLD: Hello! Yes.
VELSHI: Angie, welcome. Good to see you.
LLANAS: Thank you! It's great to see you. Kind of. Hear you more.
MYERS: You're on a tiny little screen above our heads.
VELSHI: Chad, you know what are you up to?
MYERS: This is a peregrine falcon.
LLANAS: Yes, it is.
MYERS: The falcon is possibly in danger again from oil that spilled into the Gulf of Mexico.
LLANAS: That's right. You know, these animals made a comeback years ago. They were nearly extinct because of DDT and other pesticides that were being used. Once those were banned, these have made a great comeback. Mostly (INAUDIBLE), very widespread. Found found on every continent except Antarctica.
But you know, they're testing them now to find out how much an effect that oil spill may have had on animals like this. The falcon is one of the top bird -- you know, at the top of the bird food chain.
MYERS: Correct. So, something eats the plankton, the something eats the fish, the fish gets eaten -- and then by the time that this guy gets something, he's -- he has all of this ingested because everybody else has ingested it as well.
LLANAS: That's right. They're kind of an environmental barometer. They let you know what else is happening.
MYERS: What are we finding? Do we know.
LLANAS: Well, you know, it will be weeks, maybe months before we really know anything for sure. They're doing studies in South Padre, Texas, right now where they're capturing the birds, taking blood samples and releasing the birds back out into the environment. They're going to analyze all those blood samples to see what kind of toxicity they're finding.
MYERS: I think this will be fascinating to find out, Ali, whether they're actually -- the story I heard was that this falcon would rather take an injured bird as its prey than a flying bird.
LLANAS: That is correct. They will go after the weak and the easier catch.
MYERS: And the injured bird may very well be the oiled bird that's on the shoreline that can't fly.
LLANAS: That is correct.
MYERS: So, you know, it's survival of the fittest. But this guy is going to go for the easiest low-hanging fruit, which may be the most injured bird.
LLANAS: That's right. The oil spill has kind of left the news, to some extent, but SeaWorld has pledged their expertise, their people and everything to be there for the long haul because a lot of the effects of this are not going to be seen for years to come.
MYERS: Fascinating. Ali?
VELSHI: Can I see sheep?
LLANAS: You want sheep? We'll bring some sheep in for you right now, Ali.
VELSHI: I'm fascinated by sheep.
MYERS: This is the black-faced sheep of the family. Look at this guy. We bring him in with food.
LLANAS: These are black-faced sheep. These are found in the UK mainly, and these are not full-grown yet. They have some growing to do. They'll get about twice the size. Chad, I want you to reach in there and feel deep down into their coat.
MYERS: And they've already been sheered once, Ali.
VELSHI: Wow.
LLANAS: These are adapted for some cold weather. You can feel the temperature difference when you reach down deep into their fur. But their coat, they'll use that more for carpet, also for home insulation, things like that. It is so very dense.
MYERS: You know, we have some comedians here at CNN. They come in every once in a while. Pete is one of them. You'll see him on the weekend. He renamed them. Sweater and socks.
LLANAS: Yes, he did.
(LAUGHTER)
VELSHI: Sweater and socks?
LLANAS: These are from our Busch Gardens Park in Williamsburg. They'll be making their debut this Christmas. But we do have one --
VELSHI: I want to see a fox. I want to see a fox.
LLANAS: We have a Fox for you to see.
VELSHI: Wow.
LLANAS: All right. This is Jane. We'll see if Jane wants to sit on the counter. Actually, she's more of a cuddler.
(LAUGHTER)
MYERS: I held the -- the alligator last time, but I'm not holding the fox.
LLANAS: This is a red fox. These are found pretty much throughout North America. And the great thing about them is you can see how thick her coat is. They will, you know, grow a thicker coat for the colder months, and then she'll use this big, bushy tail.
MYERS: Look at this tail. Look at that tail.
LLANAS: They'll use that big, bushy tail to curl around them, and it kind of makes a blanket for them to stay nice and warm.
MYERS: Ali, we're having a good time.
VELSHI: I saw one of those this weekend, actually, but I wouldn't go picking it up either.
LLANAS: No. This is one of our ambassadors that travels with us. SeaWorld is all about bringing people closer to animals, and that's exactly what we're doing with Chad here today.
MYERS: You can't domesticate the fox, so we're letting it alone
VELSHI: I'm sorry I couldn't be there with you, Chad and Angie. But thank you very much for telling us a little bit more about your cuddly friends. We love having them on this show.
All right. The 2012 race for the White House has already begun. It started right after the midterms. What do potential voters really think about Sarah Palin as the possible frontrunner? Your CNN political update, up next.
(COMMERCIAL BREAK)
VELSHI: Sarah Palin's popularity and the Tea Party. Both stories topping our look at the latest political news at this hour. CNN senior political editor Mark Preston and CNN deputy political director Paul Steinhauser join me now from Washington.
I love it. I haven't seen you guys together since before the midterms. Welcome back to the -- to the duo.
PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Hey, it's good to be here, but you're making us follow an animal act, and that's never easy, OK? So, let's get right to it. I'm going to ask Dave Jenkins, our cameraman, to zoom right in here.
A warning from one of the top Tea Party groups to Mitt Romney that there may be pushback from Tea Party activists if Romney, the former Massachusetts governor, decides to run for president. Tea Party Express chairwoman Amy Kramer was asked during an interview on CBN with David Brody -- she was asked about Massachusetts health care plan, which was enacted during Romney's one term as governor. And she said how would that play with Tea Party activists? She said this. Absolutely not. She says you can't get away from that.
So a warning, I guess, in a way from the Tea Party movement to Romney. I spoke with a Romney spokesperson, Eric (INAUDIBLE). He said listen, the issue came up in the 2008 campaign. The governor dealt with it then. He'll deal with it again if he runs again. Mark, to you.
MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Hey, let's stay on 2012. Ali, it's very important to have name recognition heading into the presidential race. However, these aren't the numbers that you want to have. Sarah Palin right now has a 46 percent favorable opinion. Americans have a favorable opinion of her, 46 percent of them do, according to this new AP poll.
However, 49 percent have an unfavorable rating. So, very hard numbers. Those are numbers, what we call upside-down in politics. Ali?
VELSHI: Guys, good to see you again. Paul, I'm glad you're wearing a tie. Because I notice Mark is not wearing a tie, Chad wasn't wearing a tie, David Gergen wasn't wearing a tie. I'm wondering if there was some kind of memo that went around not to wear a tie on Thursday? But good to see you both.
(LAUGHTER)
VELSHI: CNN is committed to keeping you informed on all the important political news. We'll give you another political update in one hour from now. Stay with us.
(COMMERCIAL BREAK)
