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On the Story

A look at Aftermath of Isabel; Bush Administration Clarifies Saddam-9/11 link

Aired September 20, 2003 - 10:00   ET

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

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


KATHLEEN HAYS, CNN CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we cover this week. Good morning, I'm Kathleen Hays in New York, on the story of how a whirlwind week with Isabel leaves us all with a hefty bill.
KATHLEEN KOCH, CNN CORRESPONDENT: I'm Kathleen Koch in Baltimore, on the story of how people here are still bailing out after the big storm.

LIZ NEISLOSS, CNN SR. U.N. PRODUCER: I'm Liz Neisloss in New York, on the story of this week at the United Nations, where they took the gloves off over the Mideast and said let's not bicker over Iraq.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: I'm Elizabeth Cohen in Atlanta, on the story of how marriage can be good for a woman's health.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And I'm Suzanne Malveaux, on the story of a presidential clarification this week about no link between Saddam Hussein and September 11th.

We'll be talking about all these stories. We'll also talk about how a big salary brought a big fall for the top guy at the New York Stock Exchange and how Happy Meals aren't just for kids anymore. And we'll listen to the president's weekly radio address at the end of the hour.

We want to hear from you. E-mail us at onthestory@cnn.com.

Now on to Kathleen Koch, and Hurricane Isabel.

(BEGIN VIDEO CLIP)

KOCH: Right now, are well over 70 miles an hour. That's my best guess. I don't have any instrument to measure them right now. But the worst is yet to come.

(END VIDEO CLIP)

KOCH: That was me in Virginia Beach, Virginia on Thursday afternoon, hanging on in the middle of Hurricane Isabel. I'm on the story. Now, as if feeling the fury of mother nature was not enough, just 20 minutes after I finished that live report, I was standing under an awning in front of our hotel and I heard what sounded like a loud explosion. I looked up at the hotel next door, a six-story hotel, the Sea Hawk Hotel, and I saw the roof was flying off, large pieces of debris just sailing through the air. But I think what really astonished me was the next day, when I went around to the other side of the hotel, and I saw that not just small pieces, but huge chunks, 15, 20-foot chunks of the roof of that hotel had smashed on to a fiberglass pool enclosure right in front of that motel.

And we had been doing our live reports, where you saw me hanging on to that planter just about 18 yards away. So it was a real wake-up call as to the danger that journalists sometimes put themselves in, you know, and we don't really realize it when we're out there in the middle of the storm.

HAYS: Well, Kathleen, when I watched you, I felt two things. Number one, I love extreme weather, I've never covered a hurricane. And in some sense I envied you the thrill, the excitement. On the other hand, I'm a mom, you're a mom, and I couldn't help but think about you putting yourself in harm's way, thinking about your loved ones, and what all of that felt like.

KOCH: Well, you know we really tried our best to keep ourselves safe. We were out in the storm and I was hanging on to the planter. That was what I was using to anchor myself. You couldn't see it, but about five feet away there was an audio man who was ready to grab my ankles, grab my waist, if I lost my footing in the wind.

And we really did believe we were safe. There were no trees nearby. But again, when I saw those pieces of that roof flying off, it was a real wake-up call.

You know this was a Category 1 hurricane that some people were laughing about. They were saying, you know, it's nothing. But at this point around the country, they say 25 people have lost their lives because of the storm.

MALVEAUX: You know, Kathleen, I don't envy your position. I've been where you are many times before. And, really, extraordinary work that you've done.

But a lot of people ask -- they see reporters out there, you know, the waves crashing, the wind, holding on for dear life. One reporter just blown away we saw in one of these clips. People always ask, "Why are they out there? What are they doing? What is the purpose here if it's so dangerous, to put the reporters, the correspondents out on the front line like that?"

KOCH: Well, what we try to do -- because, again, especially when it's -- what people consider a minor hurricane like this, a Category 1 or Category 2, people are curious. They want to know, well, what is it like to be out there in this? It's just maybe a minor hurricane. Maybe I should go check it out. We'd like to think that by putting ourselves out there, we can alleviate that curiosity, show people these winds are intense, they are potentially very dangerous, this is not something that you should try. So we hope it discourages people. But it doesn't always serve that effect.

COHEN: Kathleen, I know that you didn't pooh-pooh any of this because you grew up in Mississippi and have experience with what it's like living in the path of an hurricane.

KOCH: That's very true. I think I came at this from a really different perspective from most reporters. When I was in middle school, we moved to Bay St. Louis, Mississippi, at that was one of the cities that was flattened by the last really -- the most intense Category 5 hurricane to hit the U.S., Hurricane Camille, back in '69.

We moved there a few years later, but, nonetheless, my family had to evacuate several times, board up our home. My parents told us, you know, pick that possession that you value most in the world, put it in the car, and let's get out of there. And you drive down that driveway and look back at the house and try to memorize every detail of your home, your yard, look at your window and wonder, drive away with a sinking feeling in the pit of your stomach, wondering if it's all going to be there when you get back.

So we never had a direct hit after Camille. But still, I realized it's traumatic just to leave and not to know what you're facing. And so I don't think any of this is funny. It's nothing to laugh about, even a Category 1.

NEISLOSS: Did you have the feeling, though, that anyone was more prepared this time? Because there was advanced notice, maybe not about the severity of the storm so much, but about the path of the storm. Were people -- did you have the feeling that all this and all this buildup made people any more prepared?

KOCH: You know that's a really good point. I think some people dispute the saturation coverage that we sometimes give to these hurricanes. They say, "It's overkill, we're sick of it." But I do think it does make people aware.

And in Virginia Beach, for instance, a lot of the business owners did board up. And they were the ones who didn't lose property. There were several, though, that didn't. Those were the windows that smashed in when those winds of about 70 miles per hour came rushing in there. So I think it did get people ready, but you know, still, there was a lot of damage.

MALVEAUX: Kathleen, tell us what it's like in Baltimore. I know that for me I'm just one of millions of people without power in Washington, D.C., but looking at the pictures, and what you've done in your coverage, it looks extraordinary.

KOCH: Well, here in Baltimore right now I'm standing on a dry sidewalk. But if I had been here, oh, you know, 24, 36 hours ago, it would have been an entirely different picture. It was just extraordinary.

The waters came up from the inner harbor here. And they thought they were going to be just fine. But about 2:00 a.m. on Friday morning, the waters -- the storm surge just came roaring in and they had record flooding here, seven feet above normal. So really extraordinary. And they have no idea what the damage is going to total at this point.

HAYS: Kathleen, you know, in my role, as economics correspondent, I talk about the big picture costs. When you're talking to the people -- you know, while you're waiting to talk to us on this program, while you're chit-chatting, what kind of personal stories are you hearing about the kind of damage people sustained, what kind of burden they think they're going to carry in the wake of this hurricane or tropical storm?

KOCH: I found it interesting, you know, both in Virginia Beach and here in Baltimore, how optimistic business owners are, how resigned they are to the fact that, well, if we have to start over, we just will. We'll manage. We'll find the money.

We'll get the low-interest government loans because we've been declared a federal disaster area. We'll pick up the pieces and move on. And I've also been impressed by the real community spirit, everybody helping each other out.

You know when the power went out the morning that the storm hit in Virginia Beach, anyone who had food was sharing it with everyone else. Any business that had a little generator going, that they could make coffee, they were passing it out. Police officers who were still driving up and down the streets, you know they were exhausted. They'd come in and people would offer them food and coffee.

So everyone has really pulled together. They do say that it's like, you know, that spirit after 9/11. In the worst of times it does bring out the best in people.

MALVEAUX: Kathleen, we know you have a family and you have been doing an incredible job with the coverage. We'd really like to thank you -- and try to stay dry if you would -- for joining us with your coverage. Kathleen, stay dry, be careful.

And, of course, from the hurricane here in the United States, to the storm in Iraq, President Bush sets the record straight on a link between Iraq, Saddam Hussein and the 9/11 terror attacks. I'm on the story when we come back.

ANNOUNCER: Suzanne Malveaux is a CNN White House correspondent. Earlier, she reported for NBC for six years, covering the Pentagon and the Clinton administration. She has degrees from Harvard and Colombia.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've had no evidence that Saddam Hussein was involved with September 11th.

(END VIDEO CLIP)

MALVEAUX: President Bush this week, saying that despite what a majority of Americans believe, there is no evidence linking Saddam Hussein and the terror attacks two years ago. Welcome back. We're ON THE STORY.

This has been an extraordinary week for the administration. A lot of harsh criticism. We heard from Senator Kennedy calling it a fraud, saying it was made up, that there was no imminent threat.

We heard from U.N. Chief weapons inspector, Hans Blix. That former official saying that he believed that he was comparing the search for weapons of mass destruction to a witch-hunt.

Now, the Bush administration, very much coming out forcefully, saying that, no, we did not make this connection. A lot of critics, however, saying that, at the very least, the Bush administration implied that there was a link between Saddam Hussein, al Qaeda and September 11th.

There was a poll that recently came out that shows that up to 78 percent of Americans either believe it's very likely or somewhat likely that Saddam Hussein was somewhat involved in the attacks. Only 12 percent didn't believe this. A lot of people wondering, well, where is this coming from?

I actually remember the first time that the president used that all in the same speech, and our ears kind of went up. We said, wait a minute, did he say what we thought he said? Well, we have the benefit of actually asking him and going to the briefings, and said, "No, no, no, that's not what we said."

I think the issue is that the American people, they're not watching -- most people aren't watching C-Span all the time, they're not watching the briefings. They're not catching these nuances that we have been able to really hold the administration to account. You have this huge perception out there that Saddam Hussein was linked to 9/11, and, therefore, justified going to war.

COHEN: Suzanne, as this war continues to go on, continues to be costly, people continue to die, there's a question, of course, of how long the public will support it. Do you think the Bush administration has been prepared from the beginning for the public's reaction to a very long-term war?

MALVEAUX: Well, I think the Bush administration clearly knew that this was going to be a long-term endeavor. And that is something that they talked about from the very beginning. I think there was a feeling that perhaps in the initial stages of this things were going so well that they thought they could count on the support of the American people.

Interestingly enough, if you actually believe some of these polls, it still shows that the president's greatest strength is with the security, defense of the country, and that the one thing that he has going for him for this re-election bid is the fact that the majority of Americans trust him. Here's what happened, though, just the last couple of weeks. We heard from Vice President Dick Cheney, and here's a statement earlier from Bush. This is what the critics point to when they say that it's all become blurred and muddled and that it wasn't necessarily clear that the administration was deceptive.

Let's take a listen.

(BEGIN VIDEO CLIP)

BUSH: The battle of Iraq is one victory in a war on terror that began on September 11, 2001.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We will have struck a major blow right at the heart of the base, if you will, the geographic base of the terrorists who have had us under assault for many years, but most especially on 9/11.

(END VIDEO CLIP)

MALVEAUX: So what you're going to see right now is the White House strategy essentially is to explain this, to lay this out very clearly. There have been some Republicans, if you talk to them, they've been talking to the White House and Bush's aides as well, saying, we're a little bit frustrated here. The message is not getting across that there is some progress here in Iraq, there is some successes here.

We want to go into next year very strong on a number of issues, especially on the issue of defense. That is why you're going to hear the president, you're going to hear his top aides all coming out making the case that, yes, there are PTA meetings, there's theater, there are all kinds of wonderful things going on inside Iraq. Trust us, and also know that there are going to be sacrifices along the way.

HAYS: Suzanne, I want to get to this issue, though, of President Bush and Dick Cheney, maybe with advertently or inadvertently suggesting there was a link that now they're saying doesn't exist. How much ground will the Democratic contenders for Bush next year be able to make with this? Calling it fraud, the next thing is to call it propaganda. The next thing is to call it deception.

Now, the White House maybe saying it doesn't matter. You know, we've already won that war because we planted the seed in the public's mind and we got their support. Is there any worry now, though, that the Democrats could shine the kind of light on this that will really cause problems for Bush in the election?

MALVEAUX: Well, what you're seeing are the beginning stages of that with the last presidential debates among the Democrats. They've already kind of unified, in a way, to make this something that they can all use as a part of their strategy, to say, look, the president misled the American people, look, things are not going well inside Iraq. That is something that they have all come to a consensus that they're going to keep hammering away at the president.

What we have seen over the last couple of weeks, three or four weeks, a slight dip in the poll numbers. People less confident that the president and the administration has a clear strategy inside of Iraq. Bush administration officials say, look, it's historic when you look at polls at this time in one's presidency that, yes, those approval numbers will dip down, go a little bit below. It happened with Reagan, it happened with Clinton, it's happening with President Bush.

But at the same time, of course, don't be fooled, they're looking at this and they know they have got to really get that message out there. Otherwise, he is going to lose some ground.

NEISLOSS: Well, it sounds like the whole 9/11, the decision to come out now is maybe an attempt to sharpen the message, to hone the message, to shore up support on Iraq maybe.

MALVEAUX: And you of all people know that this is a critical time, because, of course, the president is going to be going before the U.N. General Assembly on Tuesday. They're going to come armed with this U.N. Security Council resolution, still being worked out, the language. And they're asking for more help.

They need more help with troops and money from the international community, from the members of the U.N. Security Council. They're looking to Congress for $87 billion. We've seen Democrats who have said, well, look, we certainly want some more details about where the money is going and Iraqi reconstruction. How long are troops going to be there? We want some information before we just write out this check for you.

So, clearly, it is a very important time for this administration to make its case.

NEISLOSS: Well, this is going to take a lot of negotiating. And I think, Suzanne, a crystal ball to figure out what has happened here.

But one year ago, we saw President Bush challenging the United Nations, saying, join us against Iraq or we're going to go it alone. So what a difference a year make. I'm back on that story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAN GILLERMAN, U.N. ISRAELI AMBASSADOR: Global indiscriminate terrorism is made by Arafat and invented by Arafat.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) NASSIR AL-KIDWA, U.N. PALESTINIAN AMBASSADOR: They are taking the whole Middle East down the drain with them.

(END VIDEO CLIP)

NEISLOSS: Not your average diplomatic exchange at the United Nations this week. That was Israeli ambassador -- U.N. Ambassador Dan Gillerman and the Palestinian U.N. Ambassador Nassir al-Kidwa, as Israel's threat to kick out Yasser Arafat kicked up diplomatic storms over the Middle East crisis. We're back on the story.

This week at the United Nations, the Arab groups led by the Palestinians tried to bring a resolution into the Security Council that would demand Israel drop its exile Arafat threat. That resolution failed in the vote.

Why did it fail? A U.S. veto. And this is a veto that the U.S. has exercised many times before on the Middle East. So, in the end, the resolution did not pass.

The U.S. said, look, it was a lopsided resolution. Resolutions need to mention specific terrorist groups. They need to talk about how those groups are going to be dismantled.

In the end, the Palestinians took their resolution to the General Assembly, another body where no one has a veto. They did get it passed by an overwhelming margin. But that resolution, unless it's in the Security Council, it really carries no legal weight.

MALVEAUX: Liz, help me understand this, because this is really a time when the Bush administration needs support from these Arab allies, these Arab states. Why would they veto that U.N. Security Council resolution? What is the larger implication, the impact of all this?

NEISLOSS: Well, I think that's an excellent question. And it also leads to the question, does the U.S. really want the issue of the Mideast to be in the United Nations, where they feel Israel does not get a fair shake, Israel has very few friends there?

They have come up with -- the United States has come up with some red lines, basically, that all resolutions have to meet. As I said, they have to mention specific terrorist groups. They have to make reference to the road map. There are about five different points. They have to talk about the dismantling of terrorism.

But Arab nations, Arab diplomats will say we don't believe in those points, we don't want to see them in a resolution. Some say, if you put those points in a resolution, it will give Israel carte blanche to do what it wants to go after the terrorists, or even in greater leeway to go after terrorists. So it sets up a kind of standoff and maybe leads to the thinking that the U.S. really wants to keep this issue out of the U.N., they want to spend their diplomatic capital elsewhere.

COHEN: Liz, votes in the U.N. on Middle East issues come and go. What impact do these votes really have on the peace process in the Middle East?

NEISLOSS: Well, it really depends who you ask. One senior U.S. official said, in this case, you know, probably very little. Although there would have been the chance that if it had been a unanimous vote in the Security Council, perhaps Israel might have thought twice. It might have been a deterrent to their threats to kick Arafat out.

But the real anger that you hear, the real impact, is from the Arab states. One Arab journalist told me, "Look, that image of John Negroponte, the U.S. ambassador to the U.N., raising his hand and exercising the veto, that is on the front pages of all the newspapers. That is the lead in all the TV stories."

So the anger is directed at the U.S. The Palestinian in the Security Council said, look, the U.S. will have to bear the consequences. They are not being an honest broker in the process. But it remains to be seen.

HAYS: Liz, the other potential issue here that I can see, as President Bush prepares to address the U.N. this week, trying to get aid for troops, more money, going to meet with the French and Germans, the United States has taken one unpopular stand. Does this in any way affect the president's stance, the president's ability to talk the U.N. in to aiding the United States in this crucial moment next week?

NEISLOSS: Well -- and you hear this question a lot on any issue where there's a little bit of friction among council members. So Iraq really does hover over everything, whether it's Libya, or what we saw this week at the Middle East.

I think some diplomats will say, look, we have to be very grown up about the issue of Iraq. We are talking very seriously about this. We will have to shut out these other issues.

I think, though, it still does create a lot of anger, a lot of resentment among the Arab states. But for those who are going to be shaping the resolutions, I think they are still setting those issues aside and saying we have a much more serious focus on Iraq. Not that the other issues are not serious, but we really have to focus on the business at hand and not let it all get mixed up.

MALVEAUX: And, Liz, I think one thing that the Bush administration is going to make sure that they do this coming week on Tuesday, is that they're going to try really to win the support of all 15 members of the U.N. Security Council, not just those permanent five, if they can win them over. And at the very least, convince the French to not use their veto power, perhaps abstain from the vote.

I know that there have been some conciliatory measures. We saw that New York op-ed page, the piece from Gerhard Schroeder. Do you get a sense there is a different tone here than the last time that the president went before the U.N. Security Council, that perhaps the French, the Germans, that they will come along with this resolution?

NEISLOSS: Well, I mean, there's two points really there. The first one on the French, you are hearing very clearly at the United Nations from the French they are not planning to use their veto. It's not clear, certainly. You would need a crystal ball to know whether they would abstain or not.

But they are not planning to block any resolution. But the real theme that the diplomats at the U.N. -- and those are the people that are going to be rolling up their sleeves and actually working on this resolution -- the real theme you hear is, look, we cannot just get words on a piece of paper we all agree to. We think we can do that. But what needs to be done is it needs to motivate countries to give troops, to give money.

They have to get really set into action by something. It cannot just be a resolution that lies on the table and does nothing.

HAYS: Well, that will be a focus not only for policymakers, but certainly a focus on Wall Street this week, where things had been going fairly well, except of course when you look at what happened to the head of the New York Stock Exchange. We are going to go from world opinion about U.S. policies to public opinion about Wall Street. How much is to much for the big players of big business? I'm on the story in a moment.

(COMMERCIAL BREAK)

HAYS: New York Stock Exchange director Carl McCall attempting to re-instill confidence, do a little damage cleanup, after a Wall Street shakeup. Former CEO and Chairman Dick Grasso resigned, following a huge controversy surrounding his compensation.

Welcome back. We're ON THE STORY.

Dick Grasso, a guy who started as a clerk on the floor of the New York Stock Exchange, worked his way up from an $82 a week position to the recent revelation that he was going to receive not only a $140 million pay package, but another nearly $48 million in all kinds of deferred compensation.

It created quite a firestorm. Everyone from the head of the SEC, William Donaldson, who himself was once head of the NYSE, to members of Congress, even the members of the New York Stock Exchange, finally calling for his ouster.

Probably the straw that broke the camel's back came on Tuesday, when heads of three of the biggest pension funds in the country spoke out. Officials saying -- one of them, that the "pig has to be removed from the trough." They represent lots of investors, lots of money. That's what seemed to turn the tide, and Dick Grasso announced his resignation on Wednesday.

NEISLOSS: So, Kathleen, the guy is getting paid by a lot of the people he's supposed to be watching, a lot of the companies he's supposed to be watching. You could say a fox in the hen house, but in this case there doesn't seem to have been a hen house. So is there talk now about changing this board of directors, about putting people in with maybe a little less vested interest? HAYS: Well, even a current board -- director of the board, Henry Powson (ph), of Goldman Sachs, says that maybe the new board should not have representatives from the industry itself, because that was part of the problem, many people say. These directors are the very guys that people like Mr. Grasso is supposed to be overseeing.

Let's make it clear, though. There are still people who say, number one, Dick Grasso didn't break any laws, there's no charge of corruption. He did a very fine, if not an excellent job of leading the New York Stock Exchange, of protecting it from some people who would like to change the way business is done there, that some of the actual members of the stock exchange maybe wouldn't want to see.

But it's clear that Grasso himself had a say in recommending who some of the board members would be. It's clear that he may have even had some influence in discussions about -- broadly about compensation. There were boards that he sat on, where then these other directors sat on his board. Just too much one hand washing the other. Again, as one of these pension fund officials said, it didn't pass the smell test.

Now many people say the board should go. Maybe the board should resign in disgrace. This remains to be seen. There are a lot of meetings going on and a lot of talk now about what happens and what reforms we might see coming out of the New York Stock Exchange that would actually look more towards the interest of investors in this country, and not so much the interests of Wall Street.

MALVEAUX: Well, how much money does he walk away with?

HAYS: Well, it looks -- we know for sure that he's walked away with $140 million. Apparently, it seems like he's not getting the $48 million. But it's not entirely clearly clear that all the I's had been dotted and the T's had been crossed. But let's don't worry about Dick Grasso.

There are already a lot of people saying that there will be lots of companies that will want him for his leadership, for his expertise. Maybe he's somewhat tainted, maybe you wouldn't want him on a board of directors. Again, because the whole point now in this new era of zero tolerance is that boards shouldn't be groups of people who look out for each other.

Boards are supposed to represent shareholders. In the case of the New York Stock Exchange, they're supposed to represent the interest of the investors. There is talk now that maybe what the stock exchange needs is two people, one person to be the regulator, one person then to run the business of the New York Stock Exchange. And that was part of the problem.

When you talk about the fox guarding the hen house, how can you have a guy who is supposed to regulate some firms who do big business, Wall Street firms doing big business at the Stock Exchange, and at the same time have them on the board, have these sort of interlocking relationships? COHEN: Kathleen, during the break you were telling us about this huge bonus that Grasso received just for opening up the Stock Exchange after 9/11. I found it startling. Can you tell us more about that?

HAYS: Well, as a matter of fact, apparently he received a $5 million bonus for getting the Stock Exchange up and running six days after the 9/11 attacks. One of the California pension officials, in a press conference Tuesday, said "I don't know of a policeman or a firefighter or an emergency official who got any bonuses like that." I think that kind of shocked people. Because many people would have said, hey, that was Dick Grasso's job.

Now, again, Dick Grasso didn't steal the money. Dick Grasso didn't put a gun to anybody's head. But it does speak to the excesses, the lack of awareness of the kind of environment we're in now, where everyone's focused on corporate excess. We've gone through corporate scandals.

And on top of that, Wall Street itself has gone through a very tough three years. A lot of layoffs, massive layoffs that are hitting the New York economy, while the head of the New York Stock Exchange is getting rewarded with excessive money, again, even for doing things that people said were just in the line of duty.

NEISLOSS: But, Kathleen, I have to ask, just to play devil's advocate for a second, are you hearing from anyone, look, when the guy opened the stock market, he was doing a huge important thing? He brought in a lot of money, he was worth that much money. Do you hear any of that? Because that is sometime the mentality on these huge bonuses.

HAYS: And you know he definitely has supporters. I think you would say there's at least a third of the people, broadly, I would say in this community, maybe a quarter, who support Dick Grasso, who say if anybody should be leaving it's the board, not Dick Grasso.

Let me point out, though, that the U.S. government bond market, which is a huge market, bigger than the Stock Exchange, was sort of leaned on by the government, by the Treasury Department, I hear -- heard two years ago, to be up and running two days after the attack. Now, granted, they don't have a physical exchange they had to open, but they had damage done on Wall Street, they had clearing banks that weren't fully operative.

They got up and running, nobody trumpeted that. And think of all the people who physically had to get in to lower Manhattan that quickly, go across debris, go through security. Again, did they get bonuses? Maybe they did; I don't know. But I think there's just a sense that that was a time when everybody was pitching in.

And maybe, with hindsight, it would have been better for the board to award Dick in another way, maybe with just some sort of public appreciation. But there are many, many people who say Dick has taken the fall. And, in fact, they need someone like Dick Grasso at a time when now there'll be new scrutiny on all kinds of things about the Stock Exchange. The specialist system, is that really fair to investors, or does that, again, favor the members down there who have seats at the Stock Exchange? These are the kinds of things you need a man of experience like Dick Grasso, but he's not around now. And the question of his successor is a tough one, because that person is going to be under so much scrutiny, and there's such a spotlight in the years to come.

MALVEAUX: Kathleen, if I could just turn the corner. I know another big economic story which is impacting millions of us in this area, of course, is the hurricane. What is the financial cost? We know there's a great human cost, but obviously there's a dollar figure to this as well, I imagine.

HAYS: Well, the latest estimate is about $1 billion. The estimates have been running about $2.5 billion, which would have put this in sort of the top ten hall of fame for cost of storm damage.

This is a $10 trillion economy. It certainly hit broadly (ph) the economy can take. In terms of specifics, you know some people will have damage covered by their homeowners' insurance.

Flooding is a big cost not covered by insurance. However, there might be some federal disaster insurance available to people. And as much as you can think of losses to stores that can't be open, they won't get any sales ring-up for several days, maybe even a couple weeks in some cases.

But think of all the people who stocked up ahead of the storm. Think of the people who will be buying building materials, food, all kinds of things, after the storm. Ironically, sometimes you even see a little bit of an addition to the economy's growth rate because of all the rebuilding that has to be done after a storm like this.

COHEN: Well, we've been talking about the costs of Hurricane Isabel. What about the health costs of having an unhappy marriage? I'll be on that story when we come back.

(COMMERCIAL BREAK)

COHEN: A recent study shows that women in satisfying marriages have a health advantage over unmarried women or those in unsatisfying marriages. Some of the benefits include a lower risk of having a heart attack or stroke, lower blood pressure and cholesterol, and lower levels of depression and anxiety.

Welcome back. We're ON THE STORY.

I thought this study was so interesting because it really puts into focus the debate that's going on in many different parts of medicine about what's more important, or what kind of different roles do these things play. Psychological factors, like being happy in a marriage, and other factors, like diet and exercise, which affects the heart more?

And let's go over a little bit of what we mean when we say that women were in happier marriages, what exactly does that mean. Well, what it means is that these women were more satisfied with the time spent together with the spouse, with communication, with sexual activity. They agreed more on financial matters. And there was more similarity of interests, lifestyle, and temperament.

So, again, these happily married women who ranked high on all the things that I just mentioned, they tended to have fewer heart attacks, tended to have fewer strokes, tended in general to be healthier.

HAYS: Well, you know, Elizabeth, I have to say that one of the things that I thought when you first reported on this story this past week was there's also been studies about people who have sex more often, that they feel better, they look better. People look at photographs and they pick out people, actually, it turns out, sometimes who have better sex lives as somehow being more attractive.

When you look at all those different things, what do you kind of rank, or is this ranked in terms of what really then makes people healthier, happier, and have all these great results?

COHEN: Well, definitely one of the things that make people happier is when they're in a good relationship, when they have a dependable person in their lives, someone to love, a sexual partner, and that happiness is more than just sort of like a warm puppy. That it actually, as you said, has an affect on how you look, has an affect on how you act.

For example, there have been some studies that show happier people simply make better health choices. They tend to exercise more, they tend to eat better. So that would be one way that it would have an effect.

Another way that it would have an effect is that if you have a dependable spouse who supports you, let's say you end up in the hospital. Well, that person then is your advocate in the hospital. And we all know how important it is when you're sick and having a crisis to have someone advocating for you.

MALVEAUX: Elizabeth, you know for so many of us in this business who are married to our jobs, do they talk about any other factors that help with your heart rate and all these other things?

COHEN: Well, being happily married to your job was not one of the factors. I'm sorry. I'm sorry to be the one to break that to you, Suzanne, but that wasn't. Nothing new.

But I think it's important that we emphasize that there's a difference between good stress and bad stress. For example, if you're working all the time and you're unhappy, that can have a really detrimental effect on the hormones that regulate your health status. However, if you're working very hard and you're happy, and you enjoy it, that could conceivably actually improve your health status.

I was actually just interviewing a 100-year-old man for a series that we're going to be doing on living longer, and he just loved his work. And it was so clear that that is what had sustained him all these years. It just gave him so much happiness. NEISLOSS: You know I listen to news like this and I think, is this going to push those unhappy single and unhappily married women further toward depression, news like this? But what does it tell you, a study like this, about those mental health and physical health links?

It seems that increasingly we're seeing that the key to better aging is more socialization. What does a study like this really tell you in that whole pile?

COHEN: Absolutely. Scientists are learn more all the time about how being happily and feeling like you have social support is really integral to your health status. I think decades ago people kind of pooh-poohed that and they thought, no, it's got to be your genes, it's got to be what you eat, it's got to be whether or not you exercise, whether or not you get good health care. But more and more, they're saying that how you feel, if you are living a happy life or not living a happy life, is so important to whether or not you're healthy.

Again, there are psychological things at play. And there are also some, let's say, financial things at play. Married women, for example, often tend to be better off financially. So they can often get better health care.

The divorced women often lose out financially, and often, then, don't get the kind of health care that they were used to getting when they were married and had their husband's health insurance. So there are lots of different things at play here.

HAYS: Elizabeth, there's another happy story this week, and it's McDonald's new Happy Meal for grownups. Is it really going to make us healthier?

COHEN: That's right. They're not just for kids anymore. They're called Go Active Meals. And after years, really decades of pressure, McDonald's said, yes, we are going to come up with something healthier for adults, an actual healthy Happy Meal.

It includes a salad, an exercise booklet, and a pedometer. A pedometer is one of those little things you stick on your belt and it counts the number of steps that you're taking. And they've called in as a consultant, Bob Green, who is Oprah Winfrey's personal trainer.

And one of the things that I find interesting about this is that a lot of people have linked it to the lawsuits, which actually have been thrown out. The lawsuits of people who said, oh, McDonald's made me fat. And the judges said, no, you actually made yourself fat, and they kicked that out.

But you can also look at it as just a reaction to years and years of nutrition experts saying McDonald's has got to do something to make their meals healthier.

MALVEAUX: Thanks, Elizabeth. We have to take a quick break.

Up next, we'll listen to the president's weekly radio address this week on the economy. ON THE STORY will be right back.

(COMMERCIAL BREAK)

MALVEAUX: That's all the time we have today. Thanks to my colleagues, and thank you for watching ON THE STORY. We'll be back next week.

Still ahead, People in the News focusing this week on the hit television show "Friends". At 12:00 noon Eastern, CNN LIVE SATURDAY. And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, IN THE MONEY. Coming up at the top of the hour, a NEWS ALERT.

Now, the president's weekly radio address.

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Aired September 20, 2003 - 10:00   ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KATHLEEN HAYS, CNN CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we cover this week. Good morning, I'm Kathleen Hays in New York, on the story of how a whirlwind week with Isabel leaves us all with a hefty bill.
KATHLEEN KOCH, CNN CORRESPONDENT: I'm Kathleen Koch in Baltimore, on the story of how people here are still bailing out after the big storm.

LIZ NEISLOSS, CNN SR. U.N. PRODUCER: I'm Liz Neisloss in New York, on the story of this week at the United Nations, where they took the gloves off over the Mideast and said let's not bicker over Iraq.

ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: I'm Elizabeth Cohen in Atlanta, on the story of how marriage can be good for a woman's health.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And I'm Suzanne Malveaux, on the story of a presidential clarification this week about no link between Saddam Hussein and September 11th.

We'll be talking about all these stories. We'll also talk about how a big salary brought a big fall for the top guy at the New York Stock Exchange and how Happy Meals aren't just for kids anymore. And we'll listen to the president's weekly radio address at the end of the hour.

We want to hear from you. E-mail us at onthestory@cnn.com.

Now on to Kathleen Koch, and Hurricane Isabel.

(BEGIN VIDEO CLIP)

KOCH: Right now, are well over 70 miles an hour. That's my best guess. I don't have any instrument to measure them right now. But the worst is yet to come.

(END VIDEO CLIP)

KOCH: That was me in Virginia Beach, Virginia on Thursday afternoon, hanging on in the middle of Hurricane Isabel. I'm on the story. Now, as if feeling the fury of mother nature was not enough, just 20 minutes after I finished that live report, I was standing under an awning in front of our hotel and I heard what sounded like a loud explosion. I looked up at the hotel next door, a six-story hotel, the Sea Hawk Hotel, and I saw the roof was flying off, large pieces of debris just sailing through the air. But I think what really astonished me was the next day, when I went around to the other side of the hotel, and I saw that not just small pieces, but huge chunks, 15, 20-foot chunks of the roof of that hotel had smashed on to a fiberglass pool enclosure right in front of that motel.

And we had been doing our live reports, where you saw me hanging on to that planter just about 18 yards away. So it was a real wake-up call as to the danger that journalists sometimes put themselves in, you know, and we don't really realize it when we're out there in the middle of the storm.

HAYS: Well, Kathleen, when I watched you, I felt two things. Number one, I love extreme weather, I've never covered a hurricane. And in some sense I envied you the thrill, the excitement. On the other hand, I'm a mom, you're a mom, and I couldn't help but think about you putting yourself in harm's way, thinking about your loved ones, and what all of that felt like.

KOCH: Well, you know we really tried our best to keep ourselves safe. We were out in the storm and I was hanging on to the planter. That was what I was using to anchor myself. You couldn't see it, but about five feet away there was an audio man who was ready to grab my ankles, grab my waist, if I lost my footing in the wind.

And we really did believe we were safe. There were no trees nearby. But again, when I saw those pieces of that roof flying off, it was a real wake-up call.

You know this was a Category 1 hurricane that some people were laughing about. They were saying, you know, it's nothing. But at this point around the country, they say 25 people have lost their lives because of the storm.

MALVEAUX: You know, Kathleen, I don't envy your position. I've been where you are many times before. And, really, extraordinary work that you've done.

But a lot of people ask -- they see reporters out there, you know, the waves crashing, the wind, holding on for dear life. One reporter just blown away we saw in one of these clips. People always ask, "Why are they out there? What are they doing? What is the purpose here if it's so dangerous, to put the reporters, the correspondents out on the front line like that?"

KOCH: Well, what we try to do -- because, again, especially when it's -- what people consider a minor hurricane like this, a Category 1 or Category 2, people are curious. They want to know, well, what is it like to be out there in this? It's just maybe a minor hurricane. Maybe I should go check it out. We'd like to think that by putting ourselves out there, we can alleviate that curiosity, show people these winds are intense, they are potentially very dangerous, this is not something that you should try. So we hope it discourages people. But it doesn't always serve that effect.

COHEN: Kathleen, I know that you didn't pooh-pooh any of this because you grew up in Mississippi and have experience with what it's like living in the path of an hurricane.

KOCH: That's very true. I think I came at this from a really different perspective from most reporters. When I was in middle school, we moved to Bay St. Louis, Mississippi, at that was one of the cities that was flattened by the last really -- the most intense Category 5 hurricane to hit the U.S., Hurricane Camille, back in '69.

We moved there a few years later, but, nonetheless, my family had to evacuate several times, board up our home. My parents told us, you know, pick that possession that you value most in the world, put it in the car, and let's get out of there. And you drive down that driveway and look back at the house and try to memorize every detail of your home, your yard, look at your window and wonder, drive away with a sinking feeling in the pit of your stomach, wondering if it's all going to be there when you get back.

So we never had a direct hit after Camille. But still, I realized it's traumatic just to leave and not to know what you're facing. And so I don't think any of this is funny. It's nothing to laugh about, even a Category 1.

NEISLOSS: Did you have the feeling, though, that anyone was more prepared this time? Because there was advanced notice, maybe not about the severity of the storm so much, but about the path of the storm. Were people -- did you have the feeling that all this and all this buildup made people any more prepared?

KOCH: You know that's a really good point. I think some people dispute the saturation coverage that we sometimes give to these hurricanes. They say, "It's overkill, we're sick of it." But I do think it does make people aware.

And in Virginia Beach, for instance, a lot of the business owners did board up. And they were the ones who didn't lose property. There were several, though, that didn't. Those were the windows that smashed in when those winds of about 70 miles per hour came rushing in there. So I think it did get people ready, but you know, still, there was a lot of damage.

MALVEAUX: Kathleen, tell us what it's like in Baltimore. I know that for me I'm just one of millions of people without power in Washington, D.C., but looking at the pictures, and what you've done in your coverage, it looks extraordinary.

KOCH: Well, here in Baltimore right now I'm standing on a dry sidewalk. But if I had been here, oh, you know, 24, 36 hours ago, it would have been an entirely different picture. It was just extraordinary.

The waters came up from the inner harbor here. And they thought they were going to be just fine. But about 2:00 a.m. on Friday morning, the waters -- the storm surge just came roaring in and they had record flooding here, seven feet above normal. So really extraordinary. And they have no idea what the damage is going to total at this point.

HAYS: Kathleen, you know, in my role, as economics correspondent, I talk about the big picture costs. When you're talking to the people -- you know, while you're waiting to talk to us on this program, while you're chit-chatting, what kind of personal stories are you hearing about the kind of damage people sustained, what kind of burden they think they're going to carry in the wake of this hurricane or tropical storm?

KOCH: I found it interesting, you know, both in Virginia Beach and here in Baltimore, how optimistic business owners are, how resigned they are to the fact that, well, if we have to start over, we just will. We'll manage. We'll find the money.

We'll get the low-interest government loans because we've been declared a federal disaster area. We'll pick up the pieces and move on. And I've also been impressed by the real community spirit, everybody helping each other out.

You know when the power went out the morning that the storm hit in Virginia Beach, anyone who had food was sharing it with everyone else. Any business that had a little generator going, that they could make coffee, they were passing it out. Police officers who were still driving up and down the streets, you know they were exhausted. They'd come in and people would offer them food and coffee.

So everyone has really pulled together. They do say that it's like, you know, that spirit after 9/11. In the worst of times it does bring out the best in people.

MALVEAUX: Kathleen, we know you have a family and you have been doing an incredible job with the coverage. We'd really like to thank you -- and try to stay dry if you would -- for joining us with your coverage. Kathleen, stay dry, be careful.

And, of course, from the hurricane here in the United States, to the storm in Iraq, President Bush sets the record straight on a link between Iraq, Saddam Hussein and the 9/11 terror attacks. I'm on the story when we come back.

ANNOUNCER: Suzanne Malveaux is a CNN White House correspondent. Earlier, she reported for NBC for six years, covering the Pentagon and the Clinton administration. She has degrees from Harvard and Colombia.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We've had no evidence that Saddam Hussein was involved with September 11th.

(END VIDEO CLIP)

MALVEAUX: President Bush this week, saying that despite what a majority of Americans believe, there is no evidence linking Saddam Hussein and the terror attacks two years ago. Welcome back. We're ON THE STORY.

This has been an extraordinary week for the administration. A lot of harsh criticism. We heard from Senator Kennedy calling it a fraud, saying it was made up, that there was no imminent threat.

We heard from U.N. Chief weapons inspector, Hans Blix. That former official saying that he believed that he was comparing the search for weapons of mass destruction to a witch-hunt.

Now, the Bush administration, very much coming out forcefully, saying that, no, we did not make this connection. A lot of critics, however, saying that, at the very least, the Bush administration implied that there was a link between Saddam Hussein, al Qaeda and September 11th.

There was a poll that recently came out that shows that up to 78 percent of Americans either believe it's very likely or somewhat likely that Saddam Hussein was somewhat involved in the attacks. Only 12 percent didn't believe this. A lot of people wondering, well, where is this coming from?

I actually remember the first time that the president used that all in the same speech, and our ears kind of went up. We said, wait a minute, did he say what we thought he said? Well, we have the benefit of actually asking him and going to the briefings, and said, "No, no, no, that's not what we said."

I think the issue is that the American people, they're not watching -- most people aren't watching C-Span all the time, they're not watching the briefings. They're not catching these nuances that we have been able to really hold the administration to account. You have this huge perception out there that Saddam Hussein was linked to 9/11, and, therefore, justified going to war.

COHEN: Suzanne, as this war continues to go on, continues to be costly, people continue to die, there's a question, of course, of how long the public will support it. Do you think the Bush administration has been prepared from the beginning for the public's reaction to a very long-term war?

MALVEAUX: Well, I think the Bush administration clearly knew that this was going to be a long-term endeavor. And that is something that they talked about from the very beginning. I think there was a feeling that perhaps in the initial stages of this things were going so well that they thought they could count on the support of the American people.

Interestingly enough, if you actually believe some of these polls, it still shows that the president's greatest strength is with the security, defense of the country, and that the one thing that he has going for him for this re-election bid is the fact that the majority of Americans trust him. Here's what happened, though, just the last couple of weeks. We heard from Vice President Dick Cheney, and here's a statement earlier from Bush. This is what the critics point to when they say that it's all become blurred and muddled and that it wasn't necessarily clear that the administration was deceptive.

Let's take a listen.

(BEGIN VIDEO CLIP)

BUSH: The battle of Iraq is one victory in a war on terror that began on September 11, 2001.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

DICK CHENEY, VICE PRESIDENT OF THE UNITED STATES: We will have struck a major blow right at the heart of the base, if you will, the geographic base of the terrorists who have had us under assault for many years, but most especially on 9/11.

(END VIDEO CLIP)

MALVEAUX: So what you're going to see right now is the White House strategy essentially is to explain this, to lay this out very clearly. There have been some Republicans, if you talk to them, they've been talking to the White House and Bush's aides as well, saying, we're a little bit frustrated here. The message is not getting across that there is some progress here in Iraq, there is some successes here.

We want to go into next year very strong on a number of issues, especially on the issue of defense. That is why you're going to hear the president, you're going to hear his top aides all coming out making the case that, yes, there are PTA meetings, there's theater, there are all kinds of wonderful things going on inside Iraq. Trust us, and also know that there are going to be sacrifices along the way.

HAYS: Suzanne, I want to get to this issue, though, of President Bush and Dick Cheney, maybe with advertently or inadvertently suggesting there was a link that now they're saying doesn't exist. How much ground will the Democratic contenders for Bush next year be able to make with this? Calling it fraud, the next thing is to call it propaganda. The next thing is to call it deception.

Now, the White House maybe saying it doesn't matter. You know, we've already won that war because we planted the seed in the public's mind and we got their support. Is there any worry now, though, that the Democrats could shine the kind of light on this that will really cause problems for Bush in the election?

MALVEAUX: Well, what you're seeing are the beginning stages of that with the last presidential debates among the Democrats. They've already kind of unified, in a way, to make this something that they can all use as a part of their strategy, to say, look, the president misled the American people, look, things are not going well inside Iraq. That is something that they have all come to a consensus that they're going to keep hammering away at the president.

What we have seen over the last couple of weeks, three or four weeks, a slight dip in the poll numbers. People less confident that the president and the administration has a clear strategy inside of Iraq. Bush administration officials say, look, it's historic when you look at polls at this time in one's presidency that, yes, those approval numbers will dip down, go a little bit below. It happened with Reagan, it happened with Clinton, it's happening with President Bush.

But at the same time, of course, don't be fooled, they're looking at this and they know they have got to really get that message out there. Otherwise, he is going to lose some ground.

NEISLOSS: Well, it sounds like the whole 9/11, the decision to come out now is maybe an attempt to sharpen the message, to hone the message, to shore up support on Iraq maybe.

MALVEAUX: And you of all people know that this is a critical time, because, of course, the president is going to be going before the U.N. General Assembly on Tuesday. They're going to come armed with this U.N. Security Council resolution, still being worked out, the language. And they're asking for more help.

They need more help with troops and money from the international community, from the members of the U.N. Security Council. They're looking to Congress for $87 billion. We've seen Democrats who have said, well, look, we certainly want some more details about where the money is going and Iraqi reconstruction. How long are troops going to be there? We want some information before we just write out this check for you.

So, clearly, it is a very important time for this administration to make its case.

NEISLOSS: Well, this is going to take a lot of negotiating. And I think, Suzanne, a crystal ball to figure out what has happened here.

But one year ago, we saw President Bush challenging the United Nations, saying, join us against Iraq or we're going to go it alone. So what a difference a year make. I'm back on that story in a moment.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DAN GILLERMAN, U.N. ISRAELI AMBASSADOR: Global indiscriminate terrorism is made by Arafat and invented by Arafat.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP) NASSIR AL-KIDWA, U.N. PALESTINIAN AMBASSADOR: They are taking the whole Middle East down the drain with them.

(END VIDEO CLIP)

NEISLOSS: Not your average diplomatic exchange at the United Nations this week. That was Israeli ambassador -- U.N. Ambassador Dan Gillerman and the Palestinian U.N. Ambassador Nassir al-Kidwa, as Israel's threat to kick out Yasser Arafat kicked up diplomatic storms over the Middle East crisis. We're back on the story.

This week at the United Nations, the Arab groups led by the Palestinians tried to bring a resolution into the Security Council that would demand Israel drop its exile Arafat threat. That resolution failed in the vote.

Why did it fail? A U.S. veto. And this is a veto that the U.S. has exercised many times before on the Middle East. So, in the end, the resolution did not pass.

The U.S. said, look, it was a lopsided resolution. Resolutions need to mention specific terrorist groups. They need to talk about how those groups are going to be dismantled.

In the end, the Palestinians took their resolution to the General Assembly, another body where no one has a veto. They did get it passed by an overwhelming margin. But that resolution, unless it's in the Security Council, it really carries no legal weight.

MALVEAUX: Liz, help me understand this, because this is really a time when the Bush administration needs support from these Arab allies, these Arab states. Why would they veto that U.N. Security Council resolution? What is the larger implication, the impact of all this?

NEISLOSS: Well, I think that's an excellent question. And it also leads to the question, does the U.S. really want the issue of the Mideast to be in the United Nations, where they feel Israel does not get a fair shake, Israel has very few friends there?

They have come up with -- the United States has come up with some red lines, basically, that all resolutions have to meet. As I said, they have to mention specific terrorist groups. They have to make reference to the road map. There are about five different points. They have to talk about the dismantling of terrorism.

But Arab nations, Arab diplomats will say we don't believe in those points, we don't want to see them in a resolution. Some say, if you put those points in a resolution, it will give Israel carte blanche to do what it wants to go after the terrorists, or even in greater leeway to go after terrorists. So it sets up a kind of standoff and maybe leads to the thinking that the U.S. really wants to keep this issue out of the U.N., they want to spend their diplomatic capital elsewhere.

COHEN: Liz, votes in the U.N. on Middle East issues come and go. What impact do these votes really have on the peace process in the Middle East?

NEISLOSS: Well, it really depends who you ask. One senior U.S. official said, in this case, you know, probably very little. Although there would have been the chance that if it had been a unanimous vote in the Security Council, perhaps Israel might have thought twice. It might have been a deterrent to their threats to kick Arafat out.

But the real anger that you hear, the real impact, is from the Arab states. One Arab journalist told me, "Look, that image of John Negroponte, the U.S. ambassador to the U.N., raising his hand and exercising the veto, that is on the front pages of all the newspapers. That is the lead in all the TV stories."

So the anger is directed at the U.S. The Palestinian in the Security Council said, look, the U.S. will have to bear the consequences. They are not being an honest broker in the process. But it remains to be seen.

HAYS: Liz, the other potential issue here that I can see, as President Bush prepares to address the U.N. this week, trying to get aid for troops, more money, going to meet with the French and Germans, the United States has taken one unpopular stand. Does this in any way affect the president's stance, the president's ability to talk the U.N. in to aiding the United States in this crucial moment next week?

NEISLOSS: Well -- and you hear this question a lot on any issue where there's a little bit of friction among council members. So Iraq really does hover over everything, whether it's Libya, or what we saw this week at the Middle East.

I think some diplomats will say, look, we have to be very grown up about the issue of Iraq. We are talking very seriously about this. We will have to shut out these other issues.

I think, though, it still does create a lot of anger, a lot of resentment among the Arab states. But for those who are going to be shaping the resolutions, I think they are still setting those issues aside and saying we have a much more serious focus on Iraq. Not that the other issues are not serious, but we really have to focus on the business at hand and not let it all get mixed up.

MALVEAUX: And, Liz, I think one thing that the Bush administration is going to make sure that they do this coming week on Tuesday, is that they're going to try really to win the support of all 15 members of the U.N. Security Council, not just those permanent five, if they can win them over. And at the very least, convince the French to not use their veto power, perhaps abstain from the vote.

I know that there have been some conciliatory measures. We saw that New York op-ed page, the piece from Gerhard Schroeder. Do you get a sense there is a different tone here than the last time that the president went before the U.N. Security Council, that perhaps the French, the Germans, that they will come along with this resolution?

NEISLOSS: Well, I mean, there's two points really there. The first one on the French, you are hearing very clearly at the United Nations from the French they are not planning to use their veto. It's not clear, certainly. You would need a crystal ball to know whether they would abstain or not.

But they are not planning to block any resolution. But the real theme that the diplomats at the U.N. -- and those are the people that are going to be rolling up their sleeves and actually working on this resolution -- the real theme you hear is, look, we cannot just get words on a piece of paper we all agree to. We think we can do that. But what needs to be done is it needs to motivate countries to give troops, to give money.

They have to get really set into action by something. It cannot just be a resolution that lies on the table and does nothing.

HAYS: Well, that will be a focus not only for policymakers, but certainly a focus on Wall Street this week, where things had been going fairly well, except of course when you look at what happened to the head of the New York Stock Exchange. We are going to go from world opinion about U.S. policies to public opinion about Wall Street. How much is to much for the big players of big business? I'm on the story in a moment.

(COMMERCIAL BREAK)

HAYS: New York Stock Exchange director Carl McCall attempting to re-instill confidence, do a little damage cleanup, after a Wall Street shakeup. Former CEO and Chairman Dick Grasso resigned, following a huge controversy surrounding his compensation.

Welcome back. We're ON THE STORY.

Dick Grasso, a guy who started as a clerk on the floor of the New York Stock Exchange, worked his way up from an $82 a week position to the recent revelation that he was going to receive not only a $140 million pay package, but another nearly $48 million in all kinds of deferred compensation.

It created quite a firestorm. Everyone from the head of the SEC, William Donaldson, who himself was once head of the NYSE, to members of Congress, even the members of the New York Stock Exchange, finally calling for his ouster.

Probably the straw that broke the camel's back came on Tuesday, when heads of three of the biggest pension funds in the country spoke out. Officials saying -- one of them, that the "pig has to be removed from the trough." They represent lots of investors, lots of money. That's what seemed to turn the tide, and Dick Grasso announced his resignation on Wednesday.

NEISLOSS: So, Kathleen, the guy is getting paid by a lot of the people he's supposed to be watching, a lot of the companies he's supposed to be watching. You could say a fox in the hen house, but in this case there doesn't seem to have been a hen house. So is there talk now about changing this board of directors, about putting people in with maybe a little less vested interest? HAYS: Well, even a current board -- director of the board, Henry Powson (ph), of Goldman Sachs, says that maybe the new board should not have representatives from the industry itself, because that was part of the problem, many people say. These directors are the very guys that people like Mr. Grasso is supposed to be overseeing.

Let's make it clear, though. There are still people who say, number one, Dick Grasso didn't break any laws, there's no charge of corruption. He did a very fine, if not an excellent job of leading the New York Stock Exchange, of protecting it from some people who would like to change the way business is done there, that some of the actual members of the stock exchange maybe wouldn't want to see.

But it's clear that Grasso himself had a say in recommending who some of the board members would be. It's clear that he may have even had some influence in discussions about -- broadly about compensation. There were boards that he sat on, where then these other directors sat on his board. Just too much one hand washing the other. Again, as one of these pension fund officials said, it didn't pass the smell test.

Now many people say the board should go. Maybe the board should resign in disgrace. This remains to be seen. There are a lot of meetings going on and a lot of talk now about what happens and what reforms we might see coming out of the New York Stock Exchange that would actually look more towards the interest of investors in this country, and not so much the interests of Wall Street.

MALVEAUX: Well, how much money does he walk away with?

HAYS: Well, it looks -- we know for sure that he's walked away with $140 million. Apparently, it seems like he's not getting the $48 million. But it's not entirely clearly clear that all the I's had been dotted and the T's had been crossed. But let's don't worry about Dick Grasso.

There are already a lot of people saying that there will be lots of companies that will want him for his leadership, for his expertise. Maybe he's somewhat tainted, maybe you wouldn't want him on a board of directors. Again, because the whole point now in this new era of zero tolerance is that boards shouldn't be groups of people who look out for each other.

Boards are supposed to represent shareholders. In the case of the New York Stock Exchange, they're supposed to represent the interest of the investors. There is talk now that maybe what the stock exchange needs is two people, one person to be the regulator, one person then to run the business of the New York Stock Exchange. And that was part of the problem.

When you talk about the fox guarding the hen house, how can you have a guy who is supposed to regulate some firms who do big business, Wall Street firms doing big business at the Stock Exchange, and at the same time have them on the board, have these sort of interlocking relationships? COHEN: Kathleen, during the break you were telling us about this huge bonus that Grasso received just for opening up the Stock Exchange after 9/11. I found it startling. Can you tell us more about that?

HAYS: Well, as a matter of fact, apparently he received a $5 million bonus for getting the Stock Exchange up and running six days after the 9/11 attacks. One of the California pension officials, in a press conference Tuesday, said "I don't know of a policeman or a firefighter or an emergency official who got any bonuses like that." I think that kind of shocked people. Because many people would have said, hey, that was Dick Grasso's job.

Now, again, Dick Grasso didn't steal the money. Dick Grasso didn't put a gun to anybody's head. But it does speak to the excesses, the lack of awareness of the kind of environment we're in now, where everyone's focused on corporate excess. We've gone through corporate scandals.

And on top of that, Wall Street itself has gone through a very tough three years. A lot of layoffs, massive layoffs that are hitting the New York economy, while the head of the New York Stock Exchange is getting rewarded with excessive money, again, even for doing things that people said were just in the line of duty.

NEISLOSS: But, Kathleen, I have to ask, just to play devil's advocate for a second, are you hearing from anyone, look, when the guy opened the stock market, he was doing a huge important thing? He brought in a lot of money, he was worth that much money. Do you hear any of that? Because that is sometime the mentality on these huge bonuses.

HAYS: And you know he definitely has supporters. I think you would say there's at least a third of the people, broadly, I would say in this community, maybe a quarter, who support Dick Grasso, who say if anybody should be leaving it's the board, not Dick Grasso.

Let me point out, though, that the U.S. government bond market, which is a huge market, bigger than the Stock Exchange, was sort of leaned on by the government, by the Treasury Department, I hear -- heard two years ago, to be up and running two days after the attack. Now, granted, they don't have a physical exchange they had to open, but they had damage done on Wall Street, they had clearing banks that weren't fully operative.

They got up and running, nobody trumpeted that. And think of all the people who physically had to get in to lower Manhattan that quickly, go across debris, go through security. Again, did they get bonuses? Maybe they did; I don't know. But I think there's just a sense that that was a time when everybody was pitching in.

And maybe, with hindsight, it would have been better for the board to award Dick in another way, maybe with just some sort of public appreciation. But there are many, many people who say Dick has taken the fall. And, in fact, they need someone like Dick Grasso at a time when now there'll be new scrutiny on all kinds of things about the Stock Exchange. The specialist system, is that really fair to investors, or does that, again, favor the members down there who have seats at the Stock Exchange? These are the kinds of things you need a man of experience like Dick Grasso, but he's not around now. And the question of his successor is a tough one, because that person is going to be under so much scrutiny, and there's such a spotlight in the years to come.

MALVEAUX: Kathleen, if I could just turn the corner. I know another big economic story which is impacting millions of us in this area, of course, is the hurricane. What is the financial cost? We know there's a great human cost, but obviously there's a dollar figure to this as well, I imagine.

HAYS: Well, the latest estimate is about $1 billion. The estimates have been running about $2.5 billion, which would have put this in sort of the top ten hall of fame for cost of storm damage.

This is a $10 trillion economy. It certainly hit broadly (ph) the economy can take. In terms of specifics, you know some people will have damage covered by their homeowners' insurance.

Flooding is a big cost not covered by insurance. However, there might be some federal disaster insurance available to people. And as much as you can think of losses to stores that can't be open, they won't get any sales ring-up for several days, maybe even a couple weeks in some cases.

But think of all the people who stocked up ahead of the storm. Think of the people who will be buying building materials, food, all kinds of things, after the storm. Ironically, sometimes you even see a little bit of an addition to the economy's growth rate because of all the rebuilding that has to be done after a storm like this.

COHEN: Well, we've been talking about the costs of Hurricane Isabel. What about the health costs of having an unhappy marriage? I'll be on that story when we come back.

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COHEN: A recent study shows that women in satisfying marriages have a health advantage over unmarried women or those in unsatisfying marriages. Some of the benefits include a lower risk of having a heart attack or stroke, lower blood pressure and cholesterol, and lower levels of depression and anxiety.

Welcome back. We're ON THE STORY.

I thought this study was so interesting because it really puts into focus the debate that's going on in many different parts of medicine about what's more important, or what kind of different roles do these things play. Psychological factors, like being happy in a marriage, and other factors, like diet and exercise, which affects the heart more?

And let's go over a little bit of what we mean when we say that women were in happier marriages, what exactly does that mean. Well, what it means is that these women were more satisfied with the time spent together with the spouse, with communication, with sexual activity. They agreed more on financial matters. And there was more similarity of interests, lifestyle, and temperament.

So, again, these happily married women who ranked high on all the things that I just mentioned, they tended to have fewer heart attacks, tended to have fewer strokes, tended in general to be healthier.

HAYS: Well, you know, Elizabeth, I have to say that one of the things that I thought when you first reported on this story this past week was there's also been studies about people who have sex more often, that they feel better, they look better. People look at photographs and they pick out people, actually, it turns out, sometimes who have better sex lives as somehow being more attractive.

When you look at all those different things, what do you kind of rank, or is this ranked in terms of what really then makes people healthier, happier, and have all these great results?

COHEN: Well, definitely one of the things that make people happier is when they're in a good relationship, when they have a dependable person in their lives, someone to love, a sexual partner, and that happiness is more than just sort of like a warm puppy. That it actually, as you said, has an affect on how you look, has an affect on how you act.

For example, there have been some studies that show happier people simply make better health choices. They tend to exercise more, they tend to eat better. So that would be one way that it would have an effect.

Another way that it would have an effect is that if you have a dependable spouse who supports you, let's say you end up in the hospital. Well, that person then is your advocate in the hospital. And we all know how important it is when you're sick and having a crisis to have someone advocating for you.

MALVEAUX: Elizabeth, you know for so many of us in this business who are married to our jobs, do they talk about any other factors that help with your heart rate and all these other things?

COHEN: Well, being happily married to your job was not one of the factors. I'm sorry. I'm sorry to be the one to break that to you, Suzanne, but that wasn't. Nothing new.

But I think it's important that we emphasize that there's a difference between good stress and bad stress. For example, if you're working all the time and you're unhappy, that can have a really detrimental effect on the hormones that regulate your health status. However, if you're working very hard and you're happy, and you enjoy it, that could conceivably actually improve your health status.

I was actually just interviewing a 100-year-old man for a series that we're going to be doing on living longer, and he just loved his work. And it was so clear that that is what had sustained him all these years. It just gave him so much happiness. NEISLOSS: You know I listen to news like this and I think, is this going to push those unhappy single and unhappily married women further toward depression, news like this? But what does it tell you, a study like this, about those mental health and physical health links?

It seems that increasingly we're seeing that the key to better aging is more socialization. What does a study like this really tell you in that whole pile?

COHEN: Absolutely. Scientists are learn more all the time about how being happily and feeling like you have social support is really integral to your health status. I think decades ago people kind of pooh-poohed that and they thought, no, it's got to be your genes, it's got to be what you eat, it's got to be whether or not you exercise, whether or not you get good health care. But more and more, they're saying that how you feel, if you are living a happy life or not living a happy life, is so important to whether or not you're healthy.

Again, there are psychological things at play. And there are also some, let's say, financial things at play. Married women, for example, often tend to be better off financially. So they can often get better health care.

The divorced women often lose out financially, and often, then, don't get the kind of health care that they were used to getting when they were married and had their husband's health insurance. So there are lots of different things at play here.

HAYS: Elizabeth, there's another happy story this week, and it's McDonald's new Happy Meal for grownups. Is it really going to make us healthier?

COHEN: That's right. They're not just for kids anymore. They're called Go Active Meals. And after years, really decades of pressure, McDonald's said, yes, we are going to come up with something healthier for adults, an actual healthy Happy Meal.

It includes a salad, an exercise booklet, and a pedometer. A pedometer is one of those little things you stick on your belt and it counts the number of steps that you're taking. And they've called in as a consultant, Bob Green, who is Oprah Winfrey's personal trainer.

And one of the things that I find interesting about this is that a lot of people have linked it to the lawsuits, which actually have been thrown out. The lawsuits of people who said, oh, McDonald's made me fat. And the judges said, no, you actually made yourself fat, and they kicked that out.

But you can also look at it as just a reaction to years and years of nutrition experts saying McDonald's has got to do something to make their meals healthier.

MALVEAUX: Thanks, Elizabeth. We have to take a quick break.

Up next, we'll listen to the president's weekly radio address this week on the economy. ON THE STORY will be right back.

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MALVEAUX: That's all the time we have today. Thanks to my colleagues, and thank you for watching ON THE STORY. We'll be back next week.

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