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On the Story
Bush Administration Freezes Out Allies for Failing to Help with War; Economy Appears to be on an Upswing with Stocks Breaking 10,000
Aired December 13, 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.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Suzanne Malveaux, on the story of the Bush administration freezing allies out of Iraq contracts for failing to help with the war and occupation.
JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: I'm Jane Arraf in Baghdad. I'll be back later on the story of the steady drumbeat of U.S. casualties and how the military is fighting back.
KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, in New York, on the big political story of the week. Al Gore doesn't wait, and says his choice is Howard Dean for president.
KATHY SLOBOGIN, CNN CORRESPONDENT: I'm Kathy Slobogin, on the story of a "CNN Presents" report that will air Sunday: "Infidelity: Why and How it Hits Half of All Marriages."
KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, on the story of stocks breaking back above 10,000 and how the retail stores were humming last month.
Also coming up: flu fears. Not enough vaccine and illness that can be deadly.
We'll also talk about new health warnings for a very popular food, tuna.
And we'll listen to the president's weekly radio address at the end of the hour.
E-mail us at onthestory@cnn.com.
Now, straight to Kelly Wallace and the endorsement game.
(BEGIN VIDEO CLIP)
AL GORE, FMR. VICE PRESIDENT OF THE UNITED STATES: I'm very proud and honored to endorse Howard Dean to be the next president of the United States of America.
(END VIDEO CLIP)
WALLACE: Former Vice President and former presidential candidate himself Al Gore rocking the political world this week, especially his old running mate, when he endorsed Howard Dean. Welcome back to ON THE STORY. I'm Kelly Wallace in New York.
Well, there was so much said this week about why Al Gore decided to do this, why now, why Howard Dean. Something that didn't get a lot of attention, though, is the fact that Howard Dean had been laying the groundwork for this endorsement for more than a year, talking to Al Gore, at least over the past few months, very frequently.
He went down to Nashville, Tennessee in early November. And then it was more than a week ago, a week ago Friday, when he got the call from Al Gore. They were going over a speech that Howard Dean was supposed to give. And at the end of that phone call, Al Gore said to Howard Dean, I want to endorse you.
SLOBOGIN: You know, Kelly, another story that hasn't gotten a lot of attention is that Gore endorsed Dean at the time when the Clintons were widely believed to be backing General Clark. Is this the beginning, or is this the first open breach between Gore and the Clintons?
WALLACE: That is the big question, Kathy, this week. And there's a lot of speculation.
Al Gore did this endorsement in Harlem, just a few blocks from the office of former President Bill Clinton. And there is a lot of thought that Al Gore is trying to position himself for 2008, when most believe Hillary Rodham Clinton, Senator Clinton, will try and run for the Democratic nomination.
So many believe that two things happened here. Al Gore sending a message to the former president and Senator Clinton that he is his own man. And number two, possibly positioning himself for 2008.
MALVEAUX: And Kelly, I thought it was really interesting, too, the selection of Harlem. Because we know that Dean is trying to court the African-American vote. You had Congressman Jesse Jackson Jr. endorsing him. How did that go over? Was that something that was seen as transparent, or does the support in the community for Gore transfer over to Dean?
WALLACE: Well, it's a key point, Suzanne, you raise. Both -- spokespeople for both men say that it was coincidence, that when they talked on the phone, they were both going to be in New York on Tuesday, so they decided to do this public partnership then. But Harlem certainly a choice because Al Gore is very popular with African-American voters.
He got 90 percent of the African-American vote in 2000. And so he could definitely help Howard Dean, because so far, African-American voters, especially in large numbers and especially in the South, haven't really rallied behind his candidacy.
HAYS: And of course, the other big thing binding these two men, Kelly, is Dean's opposition to the war, which he says was really cemented by Al Gore's opposition to the war. What are other Democratic candidates saying? What is the party saying about this endorsement in that light?
How much will it push other people to be even more anti-war then they would have been? Or take someone like Joe Lieberman, does he say, OK, I'm going to grab the center now, I'm going to say I'm for the war, I was for it, and I still am?
WALLACE: Well, that's exactly what you're seeing happen. Two very interesting things. You had Al Gore coming out and speaking passionately how he said, in his words, Howard Dean is the only one who made the "correct judgment" when it comes to opposing the war in Iraq.
Al Gore using very strong language, calling the war a quagmire. The biggest foreign policy mistake, he said, in the past two centuries. And you are seeing people like, as you mentioned, Senator Joseph Lieberman, who says Al Gore and Howard Dean represent the Democratic Party of the past, before the Bill Clinton years. He is the Democratic Party of the future, moving the party to the center, in a place where it's more likely to win.
Again, it remains to be seen what impact this will have. Right now, though, most of the excitement in terms of Democratic voters tend to be those anti-Bush voters and certainly those opposed to be the war in Iraq.
MALVEAUX: Kelly, this was so incredibly surprising. It was shocking when it happened. And I was on the phone, calling my friends -- some of the other candidates, and they just could not believe that this was happening. But as you know, the Lieberman story is just amazing, the fact that he didn't get a head's up.
WALLACE: It is amazing. And again, it really stunned the political establishment. All the political observers watching the Democratic presidential campaign, most believing that Al Gore would ultimately, probably endorse someone, but not until perhaps there was a clear nominee. So taking a lot of people by surprise, including, as you said, Senator Lieberman.
Now, people close to Gore, at least one person I talked to, said that the vice president had always planned to try to connect with Senator Lieberman shortly before the announcement. In fact, another source telling another colleague of mine at CNN that Al Gore was on the phone trying to reach Senator Lieberman and his staff but could never get through.
The Lieberman team is only saying that Al Gore phoned Senator Lieberman, but Tuesday morning, after the news was already out, and Senator Lieberman saying, that was "too late." He is now trying to capitalize on this, and seems to be scoring some points, winning some more support, in some ways, getting somewhat of a sympathy vote right now. And he's trying to use that momentum for his campaign.
SLOBOGIN: Kelly, I understand you also talked with Ralph Nader this week. Is that another surprise that's about to come?
WALLACE: It could be, Kathy. You know, many Democrats call him the spoiler for Al Gore in 2000, saying he cost the then vice president some key votes, and that he cost the vice president the election.
He says no, he was not a spoiler. That Al Gore beat Al Gore. But he is saying right now that there's a high probability, if he can get the volunteers and the supporters, he will run next year.
HAYS: Boy, there's a lot more to be told of this tale. You can tell a lot about where politicians stand from how they view the economy. I'm back on that story and all the fuss about the flu after this.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our economy is strong, it is vibrant. People are finding work. We won't rest until everybody who wants to find a job can find one.
(END VIDEO CLIP)
HAYS: Not just President Bush thinking the economy is strong. Shoppers and investors are casting their votes, too. The big news this week, certainly for the financial markets, is the Dow Jones industrials finally breaking above 10,000 definitively, the first time the Dow is above 10,000 since May of 2002.
Of course, May 2002 is a different story; the Dow was coming down. It first broke above 10,000 in 1999. That was the top of the stock market bubble, a very strong economy. So here we are again, a sure close above the 10,000. But maybe kind of a different mood for investors and for people around the country about how this Dow 10,000 feels and what it really means.
WALLACE: Well Kathleen, that's my point. What does it mean for all of us? Because I can tell you, one of my colleagues here was noticing just the other day that her 401k picks went down, even though the Dow is up at 10,000. So are there certain areas, certain stocks that are doing better than others?
HAYS: Well, it's interesting, Kelly. One of the things people say is similar to the past bubble of the late '90s is that tech stocks have been so strong. In fact, some people say if there's anything that feels bubblish right now, that's the area.
And as we go into the new year, people think there's going to be some kind of rotation out of the tech stocks where people have profits into sort of like big cap names, especially stocks that pay dividends. That might be a theme for investors now, because they changed the taxation of dividends.
But I was on an elevator this week talking about Dow 10,000, and another one of our colleagues said, "You know, back in 1999, when it broke above 10,000, didn't a lot more people have jobs? Wasn't unemployment a lot lower, wasn't it a different situation?" And again, I think there's kind of a more sober attitude. But the professionals say maybe it's not so bad to have a little more sober attitude about the stock market.
MALVEAUX: And what about the holiday season? I mean, I don't talk about the economy in the elevator, but a lot of people at the stores saying, OK, what do we buy, what can we afford here? Is there a bump in the economy are we seeing because of the holidays?
HAYS: Well, I think it's kind of a mixed bag so far. We got the numbers on November retail sales, and we saw that car sales were great. Of course, most of us unfortunately don't get a new Subaru or Mercedes under the tree. But department stores -- we do wish. Department stores haven't done all that great yet. Appliance, electronic, those did well in November.
I think that the -- I think there's pros. I think the retailers themselves are a little bit nervous. They're hoping to get about four percent increase in sales over the last year. What does that mean? OK, not bad.
One little thing to look at, consumer sentiment. A high profile number from the University of Michigan, mid-December, got the number Friday. All of a sudden, it pulled back a little bit. So you just kind of have to wonder how much momentum the economy still has from the tax cuts this past summer and the checks, and, you know, how much maybe some of that is just coming down a little bit.
SLOBOGIN: You know, we were talking earlier about another story that's -- made the headlines this week, and that is the flu story. How much -- I get a little bit of sense of this sort of panic is fueled a bit by the media. Is there some hype aspect to this story?
HAYS: Some people are saying that maybe we are hyping it a bit. This is a bad flu season, but there have been worst flu seasons. I think it is definitely, though, taking a toll on work.
A very interesting little factoid is that right now the amount of paid time people are taking unscheduled -- in other words, sick time, mostly, is only 1.9 hours. That's the lowest in 13 years, which suggests that people still kind of nervous about the job market. Even if you have a job, you want to make sure you keep it, and maybe they're not staying home and taking care of themselves the way they should.
WALLACE: Kathleen, is there any sense then of what impact that could have on the economy, on the good, positive movement we're seeing? If you have more people staying home, people staying away from their jobs, could that have some negative impact down the road?
HAYS: I've seen that suggested. Kelly, I think actually people figure that there really is a fair amount of momentum in the economy right now, even if we're losing some. Probably the flu is not going to be anywhere near bad enough to have it be an issue.
I do think there is some question, though, of going into next year how much momentum will stick with us. Businesses have started investing again. That's very important. They've gotten good things out of the president's tax package, too.
But I think people are sort of wondering, well, will the tax refund checks, when they come in next year, will that be the difference? It's really a mixed bag.
SLOBOGIN: Now, we also talked about something else about the flu, business. Vaccines, I mean, this is a pretty good business right now.
HAYS: Yes, this is an interesting story to me, because I really hadn't thought much about vaccines. It's there, you're going to get -- I don't usually get the flu shot, I'll make a confession here, because people say you get sick from it. Now I guess maybe I should.
Apparently, though, there's only about five companies now that really manufacture vaccines. Only about two that make flu vaccines. There used to be a couple of dozen.
And what's happened is there's other kinds of vaccines, other kinds of drugs that are much more lucrative for the drug companies to make. So -- and the government buys more than half the flu vaccines. So there's no incentive for these companies to make a lot of flu vaccine.
If it's a mild flu season, they have to dump a lot of it out. That hurts their profit. So some people are saying maybe now the government has to reexamine what it does, maybe start subsidizing some of these vaccine makers to make sure there's enough vaccine on hand.
WALLACE: And Kathleen, I know a story both of us worked on a little bit, and that is, for the first time, it looks like an FDA advisory panel could move in the direction of warning or encouraging pregnant women, nursing mothers, young children, to limit the amount of tuna they eat because of high levels of mercury. This now -- you've worked on this story -- this is something we've known for a long time, or at least I didn't know, but I guess the experts did.
What impact is this having on the big, massive tuna industry?
HAYS: Well, not much yet, Kelly. And apparently, it's over a billion dollars worth of tuna consumed in this country every year, the second most popular seafood, one of the most popular grocery store staples after coffee and sugar. Who knew we were all eating that much tuna? I thought I was the only one.
But the environmental watchdogs are saying that the tuna industry has a lot of clout. It has leaned on the FDA to sort of forestall the day when they get this kind of warning. I think on both sides people are saying, maybe we need to get more work done, a little more science done to see just how much tuna we should and shouldn't eat.
But, again, the critics, the environmental critics saying the Bush administration is maybe a little too soft on the mercury contamination standards. I think the story is going to heat up as people continue to look at this and the heavy players on both sides try to make their voices heard. SLOBOGIN: Business cycles, public health, they're always changing. But our "CNN Presents" report found that infidelity continues in good times and bad. I'm back in a moment, on the story of infidelity in America, why it happens in half of all marriages at work and online
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's something that we no longer look at as the unusual part of a marriage. It's the usual part of a marriage for a lot of Americans. It's the question of when you're going to cheat.
(END VIDEO CLIP)
SLOBOGIN: Not if, but when you're going to cheat, according to divorce lawyer John Maeux (ph). Welcome back. We're ON THE STORY. In our investigation for the "CNN Presents" report, "Infidelity," we found a number of people, like that lawyer, saying monogamy in America is a myth.
You know, this attorney also told me that in the old days you'd go before the court in a divorce case and you'd say, "Your honor, there's adultery." And you'd get all the money, all the property, and probably the kids. These days, he says you go into a case like that and you mention adultery, and the judge rolls his eyes and says, "What else happened?"
HAYS: What are some of the other differences? Because, you know, you have a picture of adultery. You know, the old joke is about the lady at home with the postman or something, right? But we know this is a very different kind of world and that people are finding ways to cheat that they didn't have before.
SLOBOGIN: Right. I mean, one of the new growth areas, if you will, in infidelity -- not to say that it never happened before -- is the workplace. I mean, one of the experts that we interviewed said that she feels like going into office parks and putting up a sign saying "Danger: men and women at work."
And what is different about this kind of affair is that, if you think of the conventional notion of adultery, it's someone who is intentionally cheating on the side. Well, this is what the experts are calling the unintentional affair. It starts out -- you spend a lot of time at work, possibly more time than you do with your spouse at home. You share projects, you share deadlines. There's this sort of excitement of intellectual shared projects at work.
And you can start talking about perfectly innocent things. The next thing you know, you're talking about your boss, then you're talking about marriage. Before you know it, you've strayed into a kind of emotional intimacy that can lead to an affair. And it can be actually more dangerous than the old-fashioned type of adultery, because the attraction is not just sexual, there's an emotional attraction as well. MALVEAUX: I think the wording is kind of interesting, though. Unintentional adultery, like you just fell into his lap or he just kissed you accidentally or something.
SLOBOGIN: Right, right.
MALVEAUX: But, I mean, how common is it that you have -- it seems to me that it's extraordinary that it's at 50 percent. I mean, why are they saying -- is there any reason why it has gotten to that point?
SLOBOGIN: Well, there are theories. Nothing proven. One is, of course, the entry of more and more women into the workplace, so that men and women are spending more and more time together, and the workplace affairs, as I mentioned before.
Another theory is that our culture simply oozes sexuality. You know, we pay lip service, we condemn adultery, our leaders condemn adultery. But look at movies and television, it's all over the place.
In some cases, there are even movies where you're even rooting for the adulterer. So, I mean, actually, most national surveys show that 90 percent of married couples think infidelity is wrong, but about 50 percent of all marriages are hit by infidelity. So there's a disconnect there, even hypocrisy. I mean, we're just not practicing what we're preaching.
WALLACE: Kathy, something else that -- oh, I was going to say, Kathy, something else I found fascinating in your reporting this week was the Internet and cyber cheating and how unintended cheaters are being lured away by being online and connecting. What have you found there?
SLOBOGIN: Well, you know, we interviewed a very interesting man who started out as an addiction specialist. And now he's become an expert in cyber cheating, because this is, in fact, a very addictive form of infidelity.
The women that we focused on in our report said that her husband was the most unlikely candidate for infidelity. He was a very religious man, he was not the kind of guy who would go into a bar and pick somebody up. But he spent a lot of time on the computer.
Well, on the computer, the most shy person can be quite aggressive. You can be anyone you want. You can go anywhere you want.
You leave no trace. It's very anonymous. And you can very easily stray on to some of these chat rooms and Web sites where, as the man said, it's a sexual smorgasbord out there, you can get anything you want.
HAYS: You know, my mother told me that years ago her obstetrician told her, "You know, men are just wired this way. It's natural." And of course he didn't think women were wired that way. We're supposed to stay and mind the egg and the nest or something, while the men ran around visiting the other hen houses or something. But what is the...
SLOBOGIN: No more. No more. It seems that in the younger generations, that the gap between men and women, the infidelity gap between men and women, is closing. Women are catching up with men. So this is not something that's unique to men by any means.
HAYS: Is it science, though? I mean, is it science? Are people hard-wired for infidelity?
SLOBOGIN: You know, that's a very interesting question. We had a lot of fun in this story interviewing a husband and wife team, a zoologist and a psychologist, who had written a book called "The Myth of Monogamy." And they actually spent quite a bit of time researching the sex life of animals.
And they found -- you may be surprised -- there's very little monogamy in the animal kingdom. In fact, there's only one species that they said that they can be totally certain of is monogamous. And I'm not going to tell you what that species is. You'll have to watch the documentary to find out. But it will be very surprising to you.
And you know those Hallmark cards, those romantic cards with the two swans, it's not the swans. They ought to change the picture on that.
And you know, here's one more interesting thing about how they found out about the infidelity in the animal kingdom. They actually did things -- like they put little radio transmitters on mother birds sitting on their nests. And they found out that these mother birds who looked so demure were sneaking off in the morning for a quickie at the neighboring nest and coming back. And something like 40 percent of these birds were sired by somebody other than the mate of the female bird.
MALVEAUX: OK. So I have to ask you guys, you're the -- I'm the only single person here, you're all married. I mean, why would a single person get married in the first place if half are cheating? What is the point?
SLOBOGIN: Well, it's pretty discouraging. But I have to say, there is one encouraging lesson that I drew from my interviews with these scientists, which is that, while it is true that animals seem to be hard-wired for infidelity, if you will, and while there are genetic reasons for this, humans also have the capacity to say no. Humans have the capacity to consider the consequences.
And the consequences can be fairly dire. I mean, we all have heard tragic stories about marriages breaking up, children being hurt. And so we have the capacity for monogamy. So just make sure you marry somebody who buys into that.
MALVEAUX: All right. WALLACE: That is good advice. And we all agree it takes a lot of work, but, as someone who just got married a short time ago, it is great. OK.
Well, from love or lack thereof it, to war. After a break and a look at what's making news at this our, we will be back on the story of the fighting in Iraq. And we get the latest from Baghdad's bureau chief, Jane Arraf.
Stay with us.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GENERAL RICHARD MYERS, CHAIRMAN, JOINT CHIEFS OF STAFF: Any soldier from any part of Iraq, Baghdad, Fallujah, from the 82nd, 101st, the 4th I.D., any soldier, you pick them at random, stand here and say, are we winning? We'd get by far the majority, probably 99 percent, would say absolutely.
(END VIDEO CLIP)
ARRAF: That was General Richard Myers, chairman of the Joint Chiefs of Staff, talking about how the military is winning the war and the occupation. And for a military that came here prepared to fight a high-level conflict, high-intensity conflict, but not necessarily this low-level insurgency, they do seem to be getting smarter.
When you go to checkpoints now, and some military installations, there are signs that read, "Are you prepared for the next attack?" And those are signs for soldiers, some of whom have actually thwarted suicide bombs, homemade bombs. They're getting better at that.
And on the occupation front, one of the really fun things that I got to do this week was fly around the north with the commanding general of the 101st Airborne. He dipped in and out of communities, talking to people like retired Iraqi generals, tribal sheiks, all sorts of people who are going to have to come together somehow and make up this country, as they rebuild this country.
And what we were hearing was quite a lot of discontent out there. Discontent about the fact that there are no jobs, discontent with what's happening in Baghdad, and the feeling that when you get outside Baghdad, it's an awfully long way away politically.
MALVEAUX: Jane, there was some bad news this week, though. U.N. Secretary-General Kofi Annan saying that he still thought it was too dangerous on the ground to have a U.N. mission inside of Iraq, and now he's talking about possibly pulling out U.N. -- out of Afghanistan no time soon, but the possibility that that's there as well.
How are the Iraqis taking this? What do the U.S. soldiers think? Are they discouraged? Do they get a sense that the world community is not behind them in this effort? ARRAF: You know, people have always felt really isolated here, less so now. But still, there is a very big cap. There are not a lot of visible foreign presences here in terms of humanitarian aid.
It is the security situation. And the U.N. has certainly had an impact. But it just is not at the stage. And Iraqis don't feel it's at the stage either, where foreign businesses or the U.N., obviously, feel that it's safe to come in.
It is discouraging. It has put on hold some projects. It's not necessarily a decisive blow. That decisive blow has perhaps been the lack of foreign investment that's come in. And that's really one of the things that's needed to underpin improved security.
WALLACE: Jane, another somewhat stunning development really this week, we saw the resignation of a few hundred Iraqi army members who were saying that they just simply can't afford it because of these low wages. What do your sources, the U.S. general you've been talking to, what are they saying about that, and what are they trying to do to keep these members of the Iraqi army in place?
ARRAF: It's a big problem. Essentially, what they're going to do is pay them more.
Now, these people make about $60 a month. That's kind of a starting wage. And although that really would have been a lot of money before the war, more than they would have made, these days it is not.
And because of the unemployment, you generally have people who are supporting 10, 12 people. That's really quite common. So the Iraqi army is a major priority.
And General Sanchez just said early this afternoon that he was going to look at, they were going to look at increasing those salaries. It's obviously a key building block in improving the security here.
SLOBOGIN: Jane, I wonder if you're hearing anything at all about sentiment to reverse the decision that was made, I guess, by Paul Bremer, a very controversial decision to dismiss all the Iraqi members. Is there any talk about re-examining that decision?
ARRAF: That is such an interesting one. That's one thing I'm trying to follow, because one of the things I was hearing in the north, dropping into this meeting of retired Iraqi generals -- and in that province of northern Iraq alone, there are 1,100 retired generals.
This country was awash in generals. I was hearing from the U.S. military, as well as all these people, obviously, that something has to be done. This is a significant, important, influential part of the Iraqi population, and that move to dismiss the army, to disband the army, barred them from seeking reemployment.
They're essentially a huge problem. They're unpaid, they're resentful. And they are perhaps taking another look at that.
What General Petraeus was telling the retired -- the former Iraqi generals was that it was a political decision and it was being made in Baghdad. And it's got to be a decision made with the Iraqi Governing Council, as well as with the coalition authorities.
HAYS: Jane, what can you tell us about setting up a tribunal to try people for war crimes in Iraq, how that is moving ahead? And what is the reaction among our U.S. military and amongst Iraqis themselves towards this?
ARRAF: Well, Iraqis, as you probably would imagine, really have this thirst for justice. And that essentially translates into vengeance on all sorts of forums. So this for them, for many people, was really very good news.
And what it is, is a tribunal that is being set up. That announcement was just made. It's going to be Iraqi judges, but with some foreign help. And they have said that they will try people in absentia, which means that we could be seeing Saddam Hussein on trial, whether he's found or not.
But they've also said that they might reconsider bringing back the death penalty, which was suspended by the coalition. Not a great incentive for people on the wanted list to turn themselves in. But they seem pretty serious about it.
MALVEAUX: Jane, it's such a sad story, I have to ask you about it. A couple of our colleagues, you may have known them, who were attacked and who were injured inside of Iraq just this past week. I know "TIME" magazine's Mike Weiskopf was one of them.
But can you tell us what the situation is for journalists? What is it like for you?
ARRAF: That was sad. And it's a risk that everyone faces. But you all know that you can't accurately report on the story, all of this news, and sit on the sidelines. And they certainly were not sitting on the sidelines.
I'm going out on a raid with a cameraman in the next few days, perhaps a patrol. And we do wish that we weren't riding in Humvees, where people could throw grenades through it, but that is essentially a risk that you take.
One thing that I have learned from the military is that you have five seconds if someone throws a grenade into your vehicle to actually toss it out again. It is dangerous out there. But it's perhaps not quite as dangerous, not quite as unrelentingly dangerous, let me put it that way, as it may seem.
And this is such an amazing place. So many things happening. You really have to get out there to actually see them. And that's what we will continue to do.
MALVEAUX: Jane, you're doing a great job. And we hope that you remain safe there.
And Jane, each attack, and each action of Iraq, of course, has a corresponding reaction here in Washington. Note the debate this week over who will get contracts to rebuild Iraq. I'm back on that story after this
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BUSH: The expenditure of U.S. dollars will reflect the fact that U.S. troops and other troops risk their life.
(END VIDEO CLIP)
MALVEAUX: Blunt talk from President Bush about freezing out some U.S. allies from lucrative Iraq reconstruction contracts. What some see as payback for opposition to the war and refusal to send troops.
The things that we heard this week: we heard retaliatory slap, this is an accusation. We heard words like "blackmail." I mean, all of these things being fired at the White House. People very upset about this.
President Bush came out very strongly, did not apologize. Essentially, the bottom line is that blood and treasure, our troops, coalition troops, as well as the Iraqis, gave their lives, as well as the financial means to make this happen. We're not about to back down now.
SLOBOGIN: You know, one of the things that occurred to me is that one of our closest neighbors, Canada, and I think our greatest trading partner, was included in this group that's been banned from contracts. What affect is that going to have on our relationship with Canada?
MALVEAUX: Well, that was a really interesting case, because this is a situation where you had Canada, that actually contributed troops in Afghanistan and lost troops in Afghanistan because of friendly fire from U.S. forces, quite frankly. Also, decided to contribute $300 million for the effort in Iraq. Decided not to do the troops because of what happened inside of Afghanistan.
So you can imagine how upset it was to actually hear this. So the incoming prime minister said that this is unfathomable, we just don't understand. Well, President Bush picked up the phone. He called the outgoing prime minister now, Jean Chretien. And they had a conversation, and Chretien said, oh, well, you know, we've been reassured that we'll have some deals, that this is somewhat flexible.
But the bottom line is there's a lot of bitterness, still. And Canada did not -- a big disappointment to the Bush administration when Canada didn't come through with the kind of money they thought they were going to get or the troops inside of Iraq.
ARRAF: Suzanne, here in Baghdad, in this Palestine Hotel, you still see businessmen milling around the lobby from France and other places. And they say they're scooping up those subcontracts. I'm just wondering if you have any sense of what this means in business, rather than in political terms. Is it a huge deal for these countries, or are they going to continue to get the bulk of that money through subcontracting?
MALVEAUX: Jane, it really depends on what these countries do, what these leaders do. As you know, former Secretary of State James Baker is going to be in Europe. He's going to be meeting with the leaders of France, Germany, Russia, Italy, as well as others, to ask them to forgive Iraqi debt.
A difficult situation, considering the timing of that announcement that was made. But if they go ahead and they decide that they're going to cooperate, there is some wiggle room here, the administration is saying, so that perhaps they'll be able to get some of those prime contracts, if not the subcontracting, the prime contracts. And they do also talk about this international fund, billions of dollars, that also offers some possibilities of winning some investments. So there is -- it's very negotiable.
WALLACE: Suzanne, and of course we saw another story in the headlines this week, the Halliburton company -- that is a company we know Vice President Dick Cheney worked for -- is accused of possibly overcharging the Pentagon for supplies in Iraq, including oil. I am wondering what people were saying behind the scenes and at the White House about this. Definitely an embarrassment for the Bush administration.
MALVEAUX: You know, there's always that tension for the administration to try to remove itself and separate itself as far as possible from Halliburton because, as you had mentioned before, Kelly, the connection with the vice president and, also, some of these other companies, the administration has a very close tie with the business community. The president went out of his way to say, look, we're going to hold Halliburton accountable to this. But, yes, of course, I mean, just an embarrassment to the administration.
They do not want to be seen associated with this. But I do have to tell you, Democrats I talked to quietly say, despite all the hoopla, they don't think this is going to stick. It's too far removed. And they say, at best, it will put pressure on the administration to be more open in the bidding process, in the contract process.
HAYS: And one comment I heard this week was that -- and Halliburton, because of this connection, is going to get intense scrutiny with all of its contracts.
Jane Arraf, thank you for joining us today. What's on the story for you in coming days?
ARRAF: There is a story that I love. It's south of Baghdad, and it's in a place called Hillah (ph), which is terribly troubled. There have been mass graves there. But now they have demonstrated -- they've had a sit-in to demand the resignation of the U.S.-appointed governor. He is gone. They have responded to those demonstrations. But they're still holding this protest. They say they want democracy.
I think it's a wonderful illustration of how messy and awkward and real, sometimes, this kind of thing, democracy building can be. So we're going to be following that.
HAYS: That's a great story. We'll look forward to hearing about that and all the various things you cover over the coming week.
Well, now from war in Iraq to another kind of battle, diplomacy in Washington. We're back in a moment ON THE STORY of how trade in Taiwan were on the table when President Bush and the Chinese premier sat down.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BUSH: We oppose any unilateral decision by either China or Taiwan to change the status quo.
(END VIDEO CLIP)
MALVEAUX: "Status quo," said President Bush, who joins his predecessors in the Oval Office with the tricky task of juggling two Chinas. Welcome back. We're ON THE STORY.
This was -- really, it was surprising in one way, because we always have this policy, for quite a long time, one China policy. But the fact that the president, after meeting with Wen Jiabao, came out so forcefully against Taiwan seeking independence was noteworthy. And it essentially is an indication of the new kind of relationship that we have with China, how much we depend on China, how much more important it is now from issues of trade, all the way to peace and stability in that region.
HAYS: So, Suzanne how does it, then, do you think, affect the balance of power in that region? It seems we're drawing closer to China, maybe not so dependent on Japan, and Taiwan is just maybe left out there to dangle in the wind. They made it pretty clear, you better tow the line, because we're not on your side like we used to be.
MALVEAUX: Well, you know, it's the last thing the Bush administration needs at this point, because, as you know, law requires that the United States would get involved if China were to invade Taiwan. At the same time, this is the worst time they could possibly want to get caught up in some sort of military conflict, A, with one of their largest trading partners in the world. And also, at a time when there's international conflict and crises throughout.
This is something that they've decided we just don't want to touch, this is the position we're going to take. This is a very strong alliance and we don't want to disrupt it.
WALLACE: Suzanne, when I saw this story this week, I remembered when the president really startled the United States, the world, early on in his administration. I think it was like April of the first term of his administration, the first few months of his administration, when he said, I've said I will do what it takes to help Taiwan defend herself and the Chinese must understand that.
And if you look at what the president is saying now, it looks like a very, very dramatic shift. Is this a sign of a more experienced world leader or, again, issues such as North Korea, Iraq, these other international hot spots that are playing a role here?
MALVEAUX: You bring up a really good point, because a lot of people looked at this as a big flip-flop from what he said before. One of the really big things, however, is about trade, really how important China is in trade relations. And what we're seeing -- what people are seeing is this surge in imports from China.
The United States wants this trade deficit to be lessened. They want the currency, they want them to float the currency, free currency. And at the same time -- I mean it goes anywhere from, like, the cost of TVs and bras, to peace with the North Koreans, making sure that that's nuclear free. You know a lot about the trade...
HAYS: Well, the trade deficit in October with China hit a new record. Over $13 billion; it's headed for $130 billion this week. I thought one of the most astounding things I saw this week was Treasury Secretary John Snow, who has been the point man on a lot of this stuff, taking a tour through Toys R Us, buying $220 worth of toys for his grandkids all made in China.
You would have thought from a PR standpoint they would have thrown in a couple American-made toys. But his view, his line, and I assume the administration's line, is no, this is good for American consumers, because you're getting lots of cheap stuff. They're saying ultimately this will help the jobs situation. But right now, you know, it's helping the pocketbook. So supposedly they think voters are going to respond to that.
MALVEAUX: Well, they certainly hope so.
HAYS: Indeed, they sure do.
Well, President Bush gets his say just ahead with his weekly radio address. And we're back ON THE STORY after this.
(COMMERCIAL BREAK)
HAYS: Well, all I can think of is the great story of infidelity. I wonder where this relationship is heading.
Thanks to all my colleagues. Kelly in New York, it's great to see you on the story of the Democratic campaign. And Suzanne and Kathy, wonderful. We're going to look forward to watching the "CNN Presents" tonight. And of course, thank you for watching ON THE STORY. We'll be back next week.
Still ahead, "PEOPLE IN THE NEWS," focusing this week on Lisa Marie Presley and Dave Matthews. At 12:00 noon Eastern, 9:00 a.m. Pacific, "CNN LIVE SATURDAY." And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, CNN's "IN THE MONEY." Coming up at the top of the hour, a check of the top stories.
But first, the president's weekly radio address.
(BEGIN AUDIOTAPE)
BUSH: Good morning.
This week, I was honored to sign the Medicare Act of 2003, the greatest advance in health coverage for America's seniors since Medicare was founded nearly four decades ago. This new law will give seniors better choices and more control over their health care, and provide a prescription drug benefit.
Beginning in 2006, most seniors now without prescription coverage can expect to see their current drug bills cut roughly in half in exchange for a monthly premium of about $35. And for the first time, seniors will have peace of mind they will not face unlimited expenses for their Medicare.
These and other major improvements in Medicare came about because Republicans and Democrats in Congress were willing to work together for the interests of our senior citizens. We were able to pass this law because we listened to the people, set the right priorities, and worked hard until we finished the job.
The reform and modernization of Medicare was one milestone and a year of accomplishment. We worked with Congress to take action in a number of areas on behalf of the American people. Last May, the House and Senate passed my jobs and growth package into law, delivering substantial tax relief to 91 million Americans.
We reduced taxes for everyone who pays income taxes, increased the child tax credit, cut the taxes on dividends and capital gains, and gave 23 million small business owners incentives to invest for the future. And now we are seeing the results.
In the third quarter, the economy grew at the fastest pace in almost 20 years. Productivity, manufacturing, and housing construction are expanding. And we have added over 300,000 jobs since August. The tax relief we passed is working. And our economy is gaining strength.
Legislation passed this year also shows the compassion and good heart of America. We created the American Dream Down Payment Fund to help low-income citizens afford the down payment on homes of their own. We defended children from the violence of partial birth abortion and passed new incentives to promote the adoption of children in foster care. And we acted to stop the global spread of AIDS by launching a multiyear emergency effort to prevent millions of new infections in Africa and the Caribbean and to provide medicine and humane care to millions more who suffer.
This year, we took important action to protect the environment. Our whole nation saw the devastation left by wildfires in the West, and we passed healthy forest legislation to thin the underbrush that fuels catastrophic blazes.
Our government also took action on every front in the war on terror. Congress appropriated more than $31 billion for the Department of Homeland Security to prepare first responders and safeguard our ports and infrastructure and help scientists develop vaccines against dangerous biological threats.
Our country stood behind the men and women of our armed forces as they liberated Iraq and helped carry out the work of reconstruction there and in Afghanistan. In Congress, members of both parties worked together to provide vital resources for our troops who are fulfilling their responsibility to defend the nation.
All of these actions have made a safer, more prosperous, and a better country. We confronted problems with determination and bipartisan spirit, yet our work is not done. There will be pressing business in the new year on issues from job creation to health care to public schools. And above all, we will continue to fight the war on terror until the war is won.
On behalf of all Americans, I thank the Congress for a productive year. Working together, we can add to this progress in the year to come.
Thank you for listening.
(END AUDIOTAPE)
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with War; Economy Appears to be on an Upswing with Stocks Breaking 10,000>
Aired December 13, 2003 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Welcome to CNN's ON THE STORY, where our journalists have the inside word on the stories we covered this week. I'm Suzanne Malveaux, on the story of the Bush administration freezing allies out of Iraq contracts for failing to help with the war and occupation.
JANE ARRAF, CNN BAGHDAD BUREAU CHIEF: I'm Jane Arraf in Baghdad. I'll be back later on the story of the steady drumbeat of U.S. casualties and how the military is fighting back.
KELLY WALLACE, CNN NATIONAL CORRESPONDENT: I'm Kelly Wallace, in New York, on the big political story of the week. Al Gore doesn't wait, and says his choice is Howard Dean for president.
KATHY SLOBOGIN, CNN CORRESPONDENT: I'm Kathy Slobogin, on the story of a "CNN Presents" report that will air Sunday: "Infidelity: Why and How it Hits Half of All Marriages."
KATHLEEN HAYS, CNN CORRESPONDENT: And I'm Kathleen Hays, on the story of stocks breaking back above 10,000 and how the retail stores were humming last month.
Also coming up: flu fears. Not enough vaccine and illness that can be deadly.
We'll also talk about new health warnings for a very popular food, tuna.
And we'll listen to the president's weekly radio address at the end of the hour.
E-mail us at onthestory@cnn.com.
Now, straight to Kelly Wallace and the endorsement game.
(BEGIN VIDEO CLIP)
AL GORE, FMR. VICE PRESIDENT OF THE UNITED STATES: I'm very proud and honored to endorse Howard Dean to be the next president of the United States of America.
(END VIDEO CLIP)
WALLACE: Former Vice President and former presidential candidate himself Al Gore rocking the political world this week, especially his old running mate, when he endorsed Howard Dean. Welcome back to ON THE STORY. I'm Kelly Wallace in New York.
Well, there was so much said this week about why Al Gore decided to do this, why now, why Howard Dean. Something that didn't get a lot of attention, though, is the fact that Howard Dean had been laying the groundwork for this endorsement for more than a year, talking to Al Gore, at least over the past few months, very frequently.
He went down to Nashville, Tennessee in early November. And then it was more than a week ago, a week ago Friday, when he got the call from Al Gore. They were going over a speech that Howard Dean was supposed to give. And at the end of that phone call, Al Gore said to Howard Dean, I want to endorse you.
SLOBOGIN: You know, Kelly, another story that hasn't gotten a lot of attention is that Gore endorsed Dean at the time when the Clintons were widely believed to be backing General Clark. Is this the beginning, or is this the first open breach between Gore and the Clintons?
WALLACE: That is the big question, Kathy, this week. And there's a lot of speculation.
Al Gore did this endorsement in Harlem, just a few blocks from the office of former President Bill Clinton. And there is a lot of thought that Al Gore is trying to position himself for 2008, when most believe Hillary Rodham Clinton, Senator Clinton, will try and run for the Democratic nomination.
So many believe that two things happened here. Al Gore sending a message to the former president and Senator Clinton that he is his own man. And number two, possibly positioning himself for 2008.
MALVEAUX: And Kelly, I thought it was really interesting, too, the selection of Harlem. Because we know that Dean is trying to court the African-American vote. You had Congressman Jesse Jackson Jr. endorsing him. How did that go over? Was that something that was seen as transparent, or does the support in the community for Gore transfer over to Dean?
WALLACE: Well, it's a key point, Suzanne, you raise. Both -- spokespeople for both men say that it was coincidence, that when they talked on the phone, they were both going to be in New York on Tuesday, so they decided to do this public partnership then. But Harlem certainly a choice because Al Gore is very popular with African-American voters.
He got 90 percent of the African-American vote in 2000. And so he could definitely help Howard Dean, because so far, African-American voters, especially in large numbers and especially in the South, haven't really rallied behind his candidacy.
HAYS: And of course, the other big thing binding these two men, Kelly, is Dean's opposition to the war, which he says was really cemented by Al Gore's opposition to the war. What are other Democratic candidates saying? What is the party saying about this endorsement in that light?
How much will it push other people to be even more anti-war then they would have been? Or take someone like Joe Lieberman, does he say, OK, I'm going to grab the center now, I'm going to say I'm for the war, I was for it, and I still am?
WALLACE: Well, that's exactly what you're seeing happen. Two very interesting things. You had Al Gore coming out and speaking passionately how he said, in his words, Howard Dean is the only one who made the "correct judgment" when it comes to opposing the war in Iraq.
Al Gore using very strong language, calling the war a quagmire. The biggest foreign policy mistake, he said, in the past two centuries. And you are seeing people like, as you mentioned, Senator Joseph Lieberman, who says Al Gore and Howard Dean represent the Democratic Party of the past, before the Bill Clinton years. He is the Democratic Party of the future, moving the party to the center, in a place where it's more likely to win.
Again, it remains to be seen what impact this will have. Right now, though, most of the excitement in terms of Democratic voters tend to be those anti-Bush voters and certainly those opposed to be the war in Iraq.
MALVEAUX: Kelly, this was so incredibly surprising. It was shocking when it happened. And I was on the phone, calling my friends -- some of the other candidates, and they just could not believe that this was happening. But as you know, the Lieberman story is just amazing, the fact that he didn't get a head's up.
WALLACE: It is amazing. And again, it really stunned the political establishment. All the political observers watching the Democratic presidential campaign, most believing that Al Gore would ultimately, probably endorse someone, but not until perhaps there was a clear nominee. So taking a lot of people by surprise, including, as you said, Senator Lieberman.
Now, people close to Gore, at least one person I talked to, said that the vice president had always planned to try to connect with Senator Lieberman shortly before the announcement. In fact, another source telling another colleague of mine at CNN that Al Gore was on the phone trying to reach Senator Lieberman and his staff but could never get through.
The Lieberman team is only saying that Al Gore phoned Senator Lieberman, but Tuesday morning, after the news was already out, and Senator Lieberman saying, that was "too late." He is now trying to capitalize on this, and seems to be scoring some points, winning some more support, in some ways, getting somewhat of a sympathy vote right now. And he's trying to use that momentum for his campaign.
SLOBOGIN: Kelly, I understand you also talked with Ralph Nader this week. Is that another surprise that's about to come?
WALLACE: It could be, Kathy. You know, many Democrats call him the spoiler for Al Gore in 2000, saying he cost the then vice president some key votes, and that he cost the vice president the election.
He says no, he was not a spoiler. That Al Gore beat Al Gore. But he is saying right now that there's a high probability, if he can get the volunteers and the supporters, he will run next year.
HAYS: Boy, there's a lot more to be told of this tale. You can tell a lot about where politicians stand from how they view the economy. I'm back on that story and all the fuss about the flu after this.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Our economy is strong, it is vibrant. People are finding work. We won't rest until everybody who wants to find a job can find one.
(END VIDEO CLIP)
HAYS: Not just President Bush thinking the economy is strong. Shoppers and investors are casting their votes, too. The big news this week, certainly for the financial markets, is the Dow Jones industrials finally breaking above 10,000 definitively, the first time the Dow is above 10,000 since May of 2002.
Of course, May 2002 is a different story; the Dow was coming down. It first broke above 10,000 in 1999. That was the top of the stock market bubble, a very strong economy. So here we are again, a sure close above the 10,000. But maybe kind of a different mood for investors and for people around the country about how this Dow 10,000 feels and what it really means.
WALLACE: Well Kathleen, that's my point. What does it mean for all of us? Because I can tell you, one of my colleagues here was noticing just the other day that her 401k picks went down, even though the Dow is up at 10,000. So are there certain areas, certain stocks that are doing better than others?
HAYS: Well, it's interesting, Kelly. One of the things people say is similar to the past bubble of the late '90s is that tech stocks have been so strong. In fact, some people say if there's anything that feels bubblish right now, that's the area.
And as we go into the new year, people think there's going to be some kind of rotation out of the tech stocks where people have profits into sort of like big cap names, especially stocks that pay dividends. That might be a theme for investors now, because they changed the taxation of dividends.
But I was on an elevator this week talking about Dow 10,000, and another one of our colleagues said, "You know, back in 1999, when it broke above 10,000, didn't a lot more people have jobs? Wasn't unemployment a lot lower, wasn't it a different situation?" And again, I think there's kind of a more sober attitude. But the professionals say maybe it's not so bad to have a little more sober attitude about the stock market.
MALVEAUX: And what about the holiday season? I mean, I don't talk about the economy in the elevator, but a lot of people at the stores saying, OK, what do we buy, what can we afford here? Is there a bump in the economy are we seeing because of the holidays?
HAYS: Well, I think it's kind of a mixed bag so far. We got the numbers on November retail sales, and we saw that car sales were great. Of course, most of us unfortunately don't get a new Subaru or Mercedes under the tree. But department stores -- we do wish. Department stores haven't done all that great yet. Appliance, electronic, those did well in November.
I think that the -- I think there's pros. I think the retailers themselves are a little bit nervous. They're hoping to get about four percent increase in sales over the last year. What does that mean? OK, not bad.
One little thing to look at, consumer sentiment. A high profile number from the University of Michigan, mid-December, got the number Friday. All of a sudden, it pulled back a little bit. So you just kind of have to wonder how much momentum the economy still has from the tax cuts this past summer and the checks, and, you know, how much maybe some of that is just coming down a little bit.
SLOBOGIN: You know, we were talking earlier about another story that's -- made the headlines this week, and that is the flu story. How much -- I get a little bit of sense of this sort of panic is fueled a bit by the media. Is there some hype aspect to this story?
HAYS: Some people are saying that maybe we are hyping it a bit. This is a bad flu season, but there have been worst flu seasons. I think it is definitely, though, taking a toll on work.
A very interesting little factoid is that right now the amount of paid time people are taking unscheduled -- in other words, sick time, mostly, is only 1.9 hours. That's the lowest in 13 years, which suggests that people still kind of nervous about the job market. Even if you have a job, you want to make sure you keep it, and maybe they're not staying home and taking care of themselves the way they should.
WALLACE: Kathleen, is there any sense then of what impact that could have on the economy, on the good, positive movement we're seeing? If you have more people staying home, people staying away from their jobs, could that have some negative impact down the road?
HAYS: I've seen that suggested. Kelly, I think actually people figure that there really is a fair amount of momentum in the economy right now, even if we're losing some. Probably the flu is not going to be anywhere near bad enough to have it be an issue.
I do think there is some question, though, of going into next year how much momentum will stick with us. Businesses have started investing again. That's very important. They've gotten good things out of the president's tax package, too.
But I think people are sort of wondering, well, will the tax refund checks, when they come in next year, will that be the difference? It's really a mixed bag.
SLOBOGIN: Now, we also talked about something else about the flu, business. Vaccines, I mean, this is a pretty good business right now.
HAYS: Yes, this is an interesting story to me, because I really hadn't thought much about vaccines. It's there, you're going to get -- I don't usually get the flu shot, I'll make a confession here, because people say you get sick from it. Now I guess maybe I should.
Apparently, though, there's only about five companies now that really manufacture vaccines. Only about two that make flu vaccines. There used to be a couple of dozen.
And what's happened is there's other kinds of vaccines, other kinds of drugs that are much more lucrative for the drug companies to make. So -- and the government buys more than half the flu vaccines. So there's no incentive for these companies to make a lot of flu vaccine.
If it's a mild flu season, they have to dump a lot of it out. That hurts their profit. So some people are saying maybe now the government has to reexamine what it does, maybe start subsidizing some of these vaccine makers to make sure there's enough vaccine on hand.
WALLACE: And Kathleen, I know a story both of us worked on a little bit, and that is, for the first time, it looks like an FDA advisory panel could move in the direction of warning or encouraging pregnant women, nursing mothers, young children, to limit the amount of tuna they eat because of high levels of mercury. This now -- you've worked on this story -- this is something we've known for a long time, or at least I didn't know, but I guess the experts did.
What impact is this having on the big, massive tuna industry?
HAYS: Well, not much yet, Kelly. And apparently, it's over a billion dollars worth of tuna consumed in this country every year, the second most popular seafood, one of the most popular grocery store staples after coffee and sugar. Who knew we were all eating that much tuna? I thought I was the only one.
But the environmental watchdogs are saying that the tuna industry has a lot of clout. It has leaned on the FDA to sort of forestall the day when they get this kind of warning. I think on both sides people are saying, maybe we need to get more work done, a little more science done to see just how much tuna we should and shouldn't eat.
But, again, the critics, the environmental critics saying the Bush administration is maybe a little too soft on the mercury contamination standards. I think the story is going to heat up as people continue to look at this and the heavy players on both sides try to make their voices heard. SLOBOGIN: Business cycles, public health, they're always changing. But our "CNN Presents" report found that infidelity continues in good times and bad. I'm back in a moment, on the story of infidelity in America, why it happens in half of all marriages at work and online
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's something that we no longer look at as the unusual part of a marriage. It's the usual part of a marriage for a lot of Americans. It's the question of when you're going to cheat.
(END VIDEO CLIP)
SLOBOGIN: Not if, but when you're going to cheat, according to divorce lawyer John Maeux (ph). Welcome back. We're ON THE STORY. In our investigation for the "CNN Presents" report, "Infidelity," we found a number of people, like that lawyer, saying monogamy in America is a myth.
You know, this attorney also told me that in the old days you'd go before the court in a divorce case and you'd say, "Your honor, there's adultery." And you'd get all the money, all the property, and probably the kids. These days, he says you go into a case like that and you mention adultery, and the judge rolls his eyes and says, "What else happened?"
HAYS: What are some of the other differences? Because, you know, you have a picture of adultery. You know, the old joke is about the lady at home with the postman or something, right? But we know this is a very different kind of world and that people are finding ways to cheat that they didn't have before.
SLOBOGIN: Right. I mean, one of the new growth areas, if you will, in infidelity -- not to say that it never happened before -- is the workplace. I mean, one of the experts that we interviewed said that she feels like going into office parks and putting up a sign saying "Danger: men and women at work."
And what is different about this kind of affair is that, if you think of the conventional notion of adultery, it's someone who is intentionally cheating on the side. Well, this is what the experts are calling the unintentional affair. It starts out -- you spend a lot of time at work, possibly more time than you do with your spouse at home. You share projects, you share deadlines. There's this sort of excitement of intellectual shared projects at work.
And you can start talking about perfectly innocent things. The next thing you know, you're talking about your boss, then you're talking about marriage. Before you know it, you've strayed into a kind of emotional intimacy that can lead to an affair. And it can be actually more dangerous than the old-fashioned type of adultery, because the attraction is not just sexual, there's an emotional attraction as well. MALVEAUX: I think the wording is kind of interesting, though. Unintentional adultery, like you just fell into his lap or he just kissed you accidentally or something.
SLOBOGIN: Right, right.
MALVEAUX: But, I mean, how common is it that you have -- it seems to me that it's extraordinary that it's at 50 percent. I mean, why are they saying -- is there any reason why it has gotten to that point?
SLOBOGIN: Well, there are theories. Nothing proven. One is, of course, the entry of more and more women into the workplace, so that men and women are spending more and more time together, and the workplace affairs, as I mentioned before.
Another theory is that our culture simply oozes sexuality. You know, we pay lip service, we condemn adultery, our leaders condemn adultery. But look at movies and television, it's all over the place.
In some cases, there are even movies where you're even rooting for the adulterer. So, I mean, actually, most national surveys show that 90 percent of married couples think infidelity is wrong, but about 50 percent of all marriages are hit by infidelity. So there's a disconnect there, even hypocrisy. I mean, we're just not practicing what we're preaching.
WALLACE: Kathy, something else that -- oh, I was going to say, Kathy, something else I found fascinating in your reporting this week was the Internet and cyber cheating and how unintended cheaters are being lured away by being online and connecting. What have you found there?
SLOBOGIN: Well, you know, we interviewed a very interesting man who started out as an addiction specialist. And now he's become an expert in cyber cheating, because this is, in fact, a very addictive form of infidelity.
The women that we focused on in our report said that her husband was the most unlikely candidate for infidelity. He was a very religious man, he was not the kind of guy who would go into a bar and pick somebody up. But he spent a lot of time on the computer.
Well, on the computer, the most shy person can be quite aggressive. You can be anyone you want. You can go anywhere you want.
You leave no trace. It's very anonymous. And you can very easily stray on to some of these chat rooms and Web sites where, as the man said, it's a sexual smorgasbord out there, you can get anything you want.
HAYS: You know, my mother told me that years ago her obstetrician told her, "You know, men are just wired this way. It's natural." And of course he didn't think women were wired that way. We're supposed to stay and mind the egg and the nest or something, while the men ran around visiting the other hen houses or something. But what is the...
SLOBOGIN: No more. No more. It seems that in the younger generations, that the gap between men and women, the infidelity gap between men and women, is closing. Women are catching up with men. So this is not something that's unique to men by any means.
HAYS: Is it science, though? I mean, is it science? Are people hard-wired for infidelity?
SLOBOGIN: You know, that's a very interesting question. We had a lot of fun in this story interviewing a husband and wife team, a zoologist and a psychologist, who had written a book called "The Myth of Monogamy." And they actually spent quite a bit of time researching the sex life of animals.
And they found -- you may be surprised -- there's very little monogamy in the animal kingdom. In fact, there's only one species that they said that they can be totally certain of is monogamous. And I'm not going to tell you what that species is. You'll have to watch the documentary to find out. But it will be very surprising to you.
And you know those Hallmark cards, those romantic cards with the two swans, it's not the swans. They ought to change the picture on that.
And you know, here's one more interesting thing about how they found out about the infidelity in the animal kingdom. They actually did things -- like they put little radio transmitters on mother birds sitting on their nests. And they found out that these mother birds who looked so demure were sneaking off in the morning for a quickie at the neighboring nest and coming back. And something like 40 percent of these birds were sired by somebody other than the mate of the female bird.
MALVEAUX: OK. So I have to ask you guys, you're the -- I'm the only single person here, you're all married. I mean, why would a single person get married in the first place if half are cheating? What is the point?
SLOBOGIN: Well, it's pretty discouraging. But I have to say, there is one encouraging lesson that I drew from my interviews with these scientists, which is that, while it is true that animals seem to be hard-wired for infidelity, if you will, and while there are genetic reasons for this, humans also have the capacity to say no. Humans have the capacity to consider the consequences.
And the consequences can be fairly dire. I mean, we all have heard tragic stories about marriages breaking up, children being hurt. And so we have the capacity for monogamy. So just make sure you marry somebody who buys into that.
MALVEAUX: All right. WALLACE: That is good advice. And we all agree it takes a lot of work, but, as someone who just got married a short time ago, it is great. OK.
Well, from love or lack thereof it, to war. After a break and a look at what's making news at this our, we will be back on the story of the fighting in Iraq. And we get the latest from Baghdad's bureau chief, Jane Arraf.
Stay with us.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GENERAL RICHARD MYERS, CHAIRMAN, JOINT CHIEFS OF STAFF: Any soldier from any part of Iraq, Baghdad, Fallujah, from the 82nd, 101st, the 4th I.D., any soldier, you pick them at random, stand here and say, are we winning? We'd get by far the majority, probably 99 percent, would say absolutely.
(END VIDEO CLIP)
ARRAF: That was General Richard Myers, chairman of the Joint Chiefs of Staff, talking about how the military is winning the war and the occupation. And for a military that came here prepared to fight a high-level conflict, high-intensity conflict, but not necessarily this low-level insurgency, they do seem to be getting smarter.
When you go to checkpoints now, and some military installations, there are signs that read, "Are you prepared for the next attack?" And those are signs for soldiers, some of whom have actually thwarted suicide bombs, homemade bombs. They're getting better at that.
And on the occupation front, one of the really fun things that I got to do this week was fly around the north with the commanding general of the 101st Airborne. He dipped in and out of communities, talking to people like retired Iraqi generals, tribal sheiks, all sorts of people who are going to have to come together somehow and make up this country, as they rebuild this country.
And what we were hearing was quite a lot of discontent out there. Discontent about the fact that there are no jobs, discontent with what's happening in Baghdad, and the feeling that when you get outside Baghdad, it's an awfully long way away politically.
MALVEAUX: Jane, there was some bad news this week, though. U.N. Secretary-General Kofi Annan saying that he still thought it was too dangerous on the ground to have a U.N. mission inside of Iraq, and now he's talking about possibly pulling out U.N. -- out of Afghanistan no time soon, but the possibility that that's there as well.
How are the Iraqis taking this? What do the U.S. soldiers think? Are they discouraged? Do they get a sense that the world community is not behind them in this effort? ARRAF: You know, people have always felt really isolated here, less so now. But still, there is a very big cap. There are not a lot of visible foreign presences here in terms of humanitarian aid.
It is the security situation. And the U.N. has certainly had an impact. But it just is not at the stage. And Iraqis don't feel it's at the stage either, where foreign businesses or the U.N., obviously, feel that it's safe to come in.
It is discouraging. It has put on hold some projects. It's not necessarily a decisive blow. That decisive blow has perhaps been the lack of foreign investment that's come in. And that's really one of the things that's needed to underpin improved security.
WALLACE: Jane, another somewhat stunning development really this week, we saw the resignation of a few hundred Iraqi army members who were saying that they just simply can't afford it because of these low wages. What do your sources, the U.S. general you've been talking to, what are they saying about that, and what are they trying to do to keep these members of the Iraqi army in place?
ARRAF: It's a big problem. Essentially, what they're going to do is pay them more.
Now, these people make about $60 a month. That's kind of a starting wage. And although that really would have been a lot of money before the war, more than they would have made, these days it is not.
And because of the unemployment, you generally have people who are supporting 10, 12 people. That's really quite common. So the Iraqi army is a major priority.
And General Sanchez just said early this afternoon that he was going to look at, they were going to look at increasing those salaries. It's obviously a key building block in improving the security here.
SLOBOGIN: Jane, I wonder if you're hearing anything at all about sentiment to reverse the decision that was made, I guess, by Paul Bremer, a very controversial decision to dismiss all the Iraqi members. Is there any talk about re-examining that decision?
ARRAF: That is such an interesting one. That's one thing I'm trying to follow, because one of the things I was hearing in the north, dropping into this meeting of retired Iraqi generals -- and in that province of northern Iraq alone, there are 1,100 retired generals.
This country was awash in generals. I was hearing from the U.S. military, as well as all these people, obviously, that something has to be done. This is a significant, important, influential part of the Iraqi population, and that move to dismiss the army, to disband the army, barred them from seeking reemployment.
They're essentially a huge problem. They're unpaid, they're resentful. And they are perhaps taking another look at that.
What General Petraeus was telling the retired -- the former Iraqi generals was that it was a political decision and it was being made in Baghdad. And it's got to be a decision made with the Iraqi Governing Council, as well as with the coalition authorities.
HAYS: Jane, what can you tell us about setting up a tribunal to try people for war crimes in Iraq, how that is moving ahead? And what is the reaction among our U.S. military and amongst Iraqis themselves towards this?
ARRAF: Well, Iraqis, as you probably would imagine, really have this thirst for justice. And that essentially translates into vengeance on all sorts of forums. So this for them, for many people, was really very good news.
And what it is, is a tribunal that is being set up. That announcement was just made. It's going to be Iraqi judges, but with some foreign help. And they have said that they will try people in absentia, which means that we could be seeing Saddam Hussein on trial, whether he's found or not.
But they've also said that they might reconsider bringing back the death penalty, which was suspended by the coalition. Not a great incentive for people on the wanted list to turn themselves in. But they seem pretty serious about it.
MALVEAUX: Jane, it's such a sad story, I have to ask you about it. A couple of our colleagues, you may have known them, who were attacked and who were injured inside of Iraq just this past week. I know "TIME" magazine's Mike Weiskopf was one of them.
But can you tell us what the situation is for journalists? What is it like for you?
ARRAF: That was sad. And it's a risk that everyone faces. But you all know that you can't accurately report on the story, all of this news, and sit on the sidelines. And they certainly were not sitting on the sidelines.
I'm going out on a raid with a cameraman in the next few days, perhaps a patrol. And we do wish that we weren't riding in Humvees, where people could throw grenades through it, but that is essentially a risk that you take.
One thing that I have learned from the military is that you have five seconds if someone throws a grenade into your vehicle to actually toss it out again. It is dangerous out there. But it's perhaps not quite as dangerous, not quite as unrelentingly dangerous, let me put it that way, as it may seem.
And this is such an amazing place. So many things happening. You really have to get out there to actually see them. And that's what we will continue to do.
MALVEAUX: Jane, you're doing a great job. And we hope that you remain safe there.
And Jane, each attack, and each action of Iraq, of course, has a corresponding reaction here in Washington. Note the debate this week over who will get contracts to rebuild Iraq. I'm back on that story after this
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BUSH: The expenditure of U.S. dollars will reflect the fact that U.S. troops and other troops risk their life.
(END VIDEO CLIP)
MALVEAUX: Blunt talk from President Bush about freezing out some U.S. allies from lucrative Iraq reconstruction contracts. What some see as payback for opposition to the war and refusal to send troops.
The things that we heard this week: we heard retaliatory slap, this is an accusation. We heard words like "blackmail." I mean, all of these things being fired at the White House. People very upset about this.
President Bush came out very strongly, did not apologize. Essentially, the bottom line is that blood and treasure, our troops, coalition troops, as well as the Iraqis, gave their lives, as well as the financial means to make this happen. We're not about to back down now.
SLOBOGIN: You know, one of the things that occurred to me is that one of our closest neighbors, Canada, and I think our greatest trading partner, was included in this group that's been banned from contracts. What affect is that going to have on our relationship with Canada?
MALVEAUX: Well, that was a really interesting case, because this is a situation where you had Canada, that actually contributed troops in Afghanistan and lost troops in Afghanistan because of friendly fire from U.S. forces, quite frankly. Also, decided to contribute $300 million for the effort in Iraq. Decided not to do the troops because of what happened inside of Afghanistan.
So you can imagine how upset it was to actually hear this. So the incoming prime minister said that this is unfathomable, we just don't understand. Well, President Bush picked up the phone. He called the outgoing prime minister now, Jean Chretien. And they had a conversation, and Chretien said, oh, well, you know, we've been reassured that we'll have some deals, that this is somewhat flexible.
But the bottom line is there's a lot of bitterness, still. And Canada did not -- a big disappointment to the Bush administration when Canada didn't come through with the kind of money they thought they were going to get or the troops inside of Iraq.
ARRAF: Suzanne, here in Baghdad, in this Palestine Hotel, you still see businessmen milling around the lobby from France and other places. And they say they're scooping up those subcontracts. I'm just wondering if you have any sense of what this means in business, rather than in political terms. Is it a huge deal for these countries, or are they going to continue to get the bulk of that money through subcontracting?
MALVEAUX: Jane, it really depends on what these countries do, what these leaders do. As you know, former Secretary of State James Baker is going to be in Europe. He's going to be meeting with the leaders of France, Germany, Russia, Italy, as well as others, to ask them to forgive Iraqi debt.
A difficult situation, considering the timing of that announcement that was made. But if they go ahead and they decide that they're going to cooperate, there is some wiggle room here, the administration is saying, so that perhaps they'll be able to get some of those prime contracts, if not the subcontracting, the prime contracts. And they do also talk about this international fund, billions of dollars, that also offers some possibilities of winning some investments. So there is -- it's very negotiable.
WALLACE: Suzanne, and of course we saw another story in the headlines this week, the Halliburton company -- that is a company we know Vice President Dick Cheney worked for -- is accused of possibly overcharging the Pentagon for supplies in Iraq, including oil. I am wondering what people were saying behind the scenes and at the White House about this. Definitely an embarrassment for the Bush administration.
MALVEAUX: You know, there's always that tension for the administration to try to remove itself and separate itself as far as possible from Halliburton because, as you had mentioned before, Kelly, the connection with the vice president and, also, some of these other companies, the administration has a very close tie with the business community. The president went out of his way to say, look, we're going to hold Halliburton accountable to this. But, yes, of course, I mean, just an embarrassment to the administration.
They do not want to be seen associated with this. But I do have to tell you, Democrats I talked to quietly say, despite all the hoopla, they don't think this is going to stick. It's too far removed. And they say, at best, it will put pressure on the administration to be more open in the bidding process, in the contract process.
HAYS: And one comment I heard this week was that -- and Halliburton, because of this connection, is going to get intense scrutiny with all of its contracts.
Jane Arraf, thank you for joining us today. What's on the story for you in coming days?
ARRAF: There is a story that I love. It's south of Baghdad, and it's in a place called Hillah (ph), which is terribly troubled. There have been mass graves there. But now they have demonstrated -- they've had a sit-in to demand the resignation of the U.S.-appointed governor. He is gone. They have responded to those demonstrations. But they're still holding this protest. They say they want democracy.
I think it's a wonderful illustration of how messy and awkward and real, sometimes, this kind of thing, democracy building can be. So we're going to be following that.
HAYS: That's a great story. We'll look forward to hearing about that and all the various things you cover over the coming week.
Well, now from war in Iraq to another kind of battle, diplomacy in Washington. We're back in a moment ON THE STORY of how trade in Taiwan were on the table when President Bush and the Chinese premier sat down.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BUSH: We oppose any unilateral decision by either China or Taiwan to change the status quo.
(END VIDEO CLIP)
MALVEAUX: "Status quo," said President Bush, who joins his predecessors in the Oval Office with the tricky task of juggling two Chinas. Welcome back. We're ON THE STORY.
This was -- really, it was surprising in one way, because we always have this policy, for quite a long time, one China policy. But the fact that the president, after meeting with Wen Jiabao, came out so forcefully against Taiwan seeking independence was noteworthy. And it essentially is an indication of the new kind of relationship that we have with China, how much we depend on China, how much more important it is now from issues of trade, all the way to peace and stability in that region.
HAYS: So, Suzanne how does it, then, do you think, affect the balance of power in that region? It seems we're drawing closer to China, maybe not so dependent on Japan, and Taiwan is just maybe left out there to dangle in the wind. They made it pretty clear, you better tow the line, because we're not on your side like we used to be.
MALVEAUX: Well, you know, it's the last thing the Bush administration needs at this point, because, as you know, law requires that the United States would get involved if China were to invade Taiwan. At the same time, this is the worst time they could possibly want to get caught up in some sort of military conflict, A, with one of their largest trading partners in the world. And also, at a time when there's international conflict and crises throughout.
This is something that they've decided we just don't want to touch, this is the position we're going to take. This is a very strong alliance and we don't want to disrupt it.
WALLACE: Suzanne, when I saw this story this week, I remembered when the president really startled the United States, the world, early on in his administration. I think it was like April of the first term of his administration, the first few months of his administration, when he said, I've said I will do what it takes to help Taiwan defend herself and the Chinese must understand that.
And if you look at what the president is saying now, it looks like a very, very dramatic shift. Is this a sign of a more experienced world leader or, again, issues such as North Korea, Iraq, these other international hot spots that are playing a role here?
MALVEAUX: You bring up a really good point, because a lot of people looked at this as a big flip-flop from what he said before. One of the really big things, however, is about trade, really how important China is in trade relations. And what we're seeing -- what people are seeing is this surge in imports from China.
The United States wants this trade deficit to be lessened. They want the currency, they want them to float the currency, free currency. And at the same time -- I mean it goes anywhere from, like, the cost of TVs and bras, to peace with the North Koreans, making sure that that's nuclear free. You know a lot about the trade...
HAYS: Well, the trade deficit in October with China hit a new record. Over $13 billion; it's headed for $130 billion this week. I thought one of the most astounding things I saw this week was Treasury Secretary John Snow, who has been the point man on a lot of this stuff, taking a tour through Toys R Us, buying $220 worth of toys for his grandkids all made in China.
You would have thought from a PR standpoint they would have thrown in a couple American-made toys. But his view, his line, and I assume the administration's line, is no, this is good for American consumers, because you're getting lots of cheap stuff. They're saying ultimately this will help the jobs situation. But right now, you know, it's helping the pocketbook. So supposedly they think voters are going to respond to that.
MALVEAUX: Well, they certainly hope so.
HAYS: Indeed, they sure do.
Well, President Bush gets his say just ahead with his weekly radio address. And we're back ON THE STORY after this.
(COMMERCIAL BREAK)
HAYS: Well, all I can think of is the great story of infidelity. I wonder where this relationship is heading.
Thanks to all my colleagues. Kelly in New York, it's great to see you on the story of the Democratic campaign. And Suzanne and Kathy, wonderful. We're going to look forward to watching the "CNN Presents" tonight. And of course, thank you for watching ON THE STORY. We'll be back next week.
Still ahead, "PEOPLE IN THE NEWS," focusing this week on Lisa Marie Presley and Dave Matthews. At 12:00 noon Eastern, 9:00 a.m. Pacific, "CNN LIVE SATURDAY." And at 1:00 p.m. Eastern, 10:00 a.m. Pacific, CNN's "IN THE MONEY." Coming up at the top of the hour, a check of the top stories.
But first, the president's weekly radio address.
(BEGIN AUDIOTAPE)
BUSH: Good morning.
This week, I was honored to sign the Medicare Act of 2003, the greatest advance in health coverage for America's seniors since Medicare was founded nearly four decades ago. This new law will give seniors better choices and more control over their health care, and provide a prescription drug benefit.
Beginning in 2006, most seniors now without prescription coverage can expect to see their current drug bills cut roughly in half in exchange for a monthly premium of about $35. And for the first time, seniors will have peace of mind they will not face unlimited expenses for their Medicare.
These and other major improvements in Medicare came about because Republicans and Democrats in Congress were willing to work together for the interests of our senior citizens. We were able to pass this law because we listened to the people, set the right priorities, and worked hard until we finished the job.
The reform and modernization of Medicare was one milestone and a year of accomplishment. We worked with Congress to take action in a number of areas on behalf of the American people. Last May, the House and Senate passed my jobs and growth package into law, delivering substantial tax relief to 91 million Americans.
We reduced taxes for everyone who pays income taxes, increased the child tax credit, cut the taxes on dividends and capital gains, and gave 23 million small business owners incentives to invest for the future. And now we are seeing the results.
In the third quarter, the economy grew at the fastest pace in almost 20 years. Productivity, manufacturing, and housing construction are expanding. And we have added over 300,000 jobs since August. The tax relief we passed is working. And our economy is gaining strength.
Legislation passed this year also shows the compassion and good heart of America. We created the American Dream Down Payment Fund to help low-income citizens afford the down payment on homes of their own. We defended children from the violence of partial birth abortion and passed new incentives to promote the adoption of children in foster care. And we acted to stop the global spread of AIDS by launching a multiyear emergency effort to prevent millions of new infections in Africa and the Caribbean and to provide medicine and humane care to millions more who suffer.
This year, we took important action to protect the environment. Our whole nation saw the devastation left by wildfires in the West, and we passed healthy forest legislation to thin the underbrush that fuels catastrophic blazes.
Our government also took action on every front in the war on terror. Congress appropriated more than $31 billion for the Department of Homeland Security to prepare first responders and safeguard our ports and infrastructure and help scientists develop vaccines against dangerous biological threats.
Our country stood behind the men and women of our armed forces as they liberated Iraq and helped carry out the work of reconstruction there and in Afghanistan. In Congress, members of both parties worked together to provide vital resources for our troops who are fulfilling their responsibility to defend the nation.
All of these actions have made a safer, more prosperous, and a better country. We confronted problems with determination and bipartisan spirit, yet our work is not done. There will be pressing business in the new year on issues from job creation to health care to public schools. And above all, we will continue to fight the war on terror until the war is won.
On behalf of all Americans, I thank the Congress for a productive year. Working together, we can add to this progress in the year to come.
Thank you for listening.
(END AUDIOTAPE)
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with War; Economy Appears to be on an Upswing with Stocks Breaking 10,000>
