CNN IN THE MONEY
U.S. Edges Closer Towards War; Movie Studios Cash In on Academy Awards; A Look at Wal-Mart
Aired February 15, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, HOST: Welcome. I'm Jack Cafferty and this is IN THE MONEY. We're trying to get this studio monitor moved into the proper position. It's a highly technical thing we do here every Saturday afternoon. Nice to have you with us.
The United States moved even closer to war with Iraq this week, even though some of our European allies got their fancy French lingerie all in a knot over the idea. But as the odds grow that the United States will go to war with Iraq, the odds that you'll find a new job look about as bad as they did last month, or for that matter, a year ago. The conventional wisdom says that war, even the prospect of war, pumps the economy and creates new jobs. But this time around, worries about conflict have companies on hold instead of hiring.
Our panel of today's experts on this, how the prospect of war affecting the forces that move your money, including the job market -- Andy Serwer, "Fortune" magazine editor at large, Marion Asnes, the senior editor of "Money" magazine, and another "Fortune" magazine editor at large, Justin Fox.
This economy is ever so slowly crawling out of a recession. The job prospects until last month's employment report have been just awful. Why hasn't the war had any kind of a positive effect on people being able to find work?
ANDY SERWER, FORTUNE MAGAZINE: Well, it has a big negative effect, I mean, for one thing, Jack, because ever time another war story comes out, war jitters are out there. A CEO decides to delay building a factory. In other words, he's going to make a decision, am I going to invest $100 million to build a new plant. That new plant would employ, you know, 300 people, and he's saying, I'm just going to put that on hold for a couple of weeks now and wait and see how things pan out.
JUSTIN FOX, FORTUNE MAGAZINE: Right, it's not like World War II or something, where the whole country had to mobilize to make it work. That's why that drove job creation in times like that. But this so far, at least, is a pretty small operation in relation to the overall economy.
CAFFERTY: Why would this CEO you're talking about be so hesitant to commit his $100 million to build his factory? I mean, there's nobody that doubts what the outcome of the war against Iraq is going to be. The only question, is it going to be over in five days, five weeks, five minutes? I mean, they're not going to win this. MARION ASNES, MONEY MAGAZINE: There's another big issue, which is the cost of capital. Right now, interest rates are low, it's true, but there isn't a lot of free money floating around for people to borrow. Most companies have pretty much borrowed...
FOX: If you want to buy a house, you can borrow. But if you're a company wanting to borrow money, you can't.
ASNES: Yes, if you're a company, you really can't borrow a lot of money because most companies have -- already have very high debt. Plus if they want to go to the equity market, right now the stock market's in the toilet, quite frankly. So there's not a lot...
FOX: A lot of people have gotten burned by buying bonds for telecom companies that don't exist anymore, and that's why it's such a high premium if you're a corporation that wants to borrow money.
SERWER: But getting back to that point, Jack, you have got to admit, there's uncertainty out there. I mean, you put yourself in the CEO's shoes. Would you build a new plant? Yes or no? Would you build a new plant this week or would you put it off until next month?
CAFFERTY: Well, how is the situation going to be any different next month, Andy, than it is now, except that we'll probably still be fighting the war against terrorism, there will probably still be the possibility of al Qaeda or some other rogue...
SERWER: I mean, here's the scenario. We've blown out Saddam, we're in charge of Iraq. I mean, but that, you know...
FOX: Or we're not.
ASNES: Or we're not.
SERWER: But the chances of that are, you know, 60 percent, 40 percent. No one really knows. So you just put it on hold until it's 100 percent.
ASNES: Also, Jack, let's not think about maybe making that decision next month, but what about making that decision in six months or two years, which is, I think, more likely the kind of decision that CEOs are looking at right now. Alan Greenspan spoke earlier this week, and this is precisely what he was talking about, that because there is so much uncertainty, both about Iraq and about the prospects of a deficit returning to the economy and driving up interest rates, that these are the kind of things that would cause a lot of uncertainty in the business world. So, you know, we're stuck with it.
FOX: And the last couple of years have made CEOs a lot more timid than they were before, for good reason. This is just one more thing to be timid about. I was listening to a lot of the earnings conference calls over the last few weeks. And the analysts always ask, how much money are you going to make this year? And every answer was, well, we don't know.
SERWER: On the other hand, you have to wonder, you know, all these people getting called up, all these reservists, I mean, maybe that's helping people, you know, not get a job, but they're doing something. You see all these people getting laid off and you see all these people getting called up into the Army, you think, well, maybe these people are going from place A to place B.
ASNES: Maybe, maybe not.
CAFFERTY: How much does the fact that the economy is just in bad shape overall generally have to do with this? Maybe it's not so much the war. Maybe it's the CEOs saying, you know what? I can't see any top line growth for my products. My sales picture isn't very good. It's a very cloudy forward-looking projection. I'm not going to commit the $100 million to this new factory until I see some sign that the consumer's getting out of debt so he can afford to buy some more of my widgets if I build a new factory, until, you know, there is a pick-up in the overall pace of the economy.
FOX: And it's sort of better, from the perspective of the CEO, it's better to blame it on the war than on my business is no good.
ASNES: The perfect excuse.
SERWER: But it's got to be both, though, Jack? I mean, it's got to be the bad economy, and again, you know, this thing just has us in this situation where we're just locked up tight. You know, everyone is sitting here, we'll just wait. I keep coming back to that.
CAFFERTY: But again, the situation, take Iraq out of the equation. Iraq is either still going to be there or they're not. But either way, the war on terrorism is still very much going to be there. So how is the CEO's decision dependent on this war anymore before we go to war with Iraq than it will be six months from now, when Iraq is no longer an issue?
ASNES: You are. But also, take a look at and remember what happened during the last Gulf War, '91, '92. During that time that forces were stationed in the Persian Gulf, waiting, waiting, waiting for something to happen, the stock market sank, business slowed down and everybody was just nervous. And I think it's important to bear in mind that people do, they get nervous, they don't want to make a decision, and that emotional tension does then carry into our business lives.
FOX: And there's the oil price thing that people just want -- the thinking is somehow, in a few months, we'll know whether they're going way up or sliding down. And so they want to wait until they find out. CAFFERTY: The difference, though, between the Gulf War in 1991 and this situation we find ourselves in now is nobody had knocked the World Trade Center towers down in 1991. Nobody was worried about people bringing vials of anthrax or nerve gas or cyanide or smallpox into some harbor through -- you know, with a shipping container. I mean, the equation was different. We saw a big stock market rally in '91. We saw a precipitous decline in oil prices the minute they started shelling Baghdad. That may not happen this time.
ASNES: Which is all the more reason for businesses to be cautious. And don't forget, Jack, that as expensive as it is to hire people and add to your workforce, it's also very expensive to fire them. So, you know, even if you're not giving severance packages, which I know some people don't do, you're calling lawyers, you're making sure everything is buttoned up so that you can get these people out of your company if you can't afford to keep them there. So it's tough.
SERWER: Jack, you were talking about our allies at the top of the segment. It's a little bit unrelated, but we've got to get it in because it was the line of the week. Right? Going to war without the French is like going deer hunting without an accordion, right?
CAFFERTY: What a terrible thing to say.
SERWER: I mean, I just thought was -- you have got to have a little levity.
CAFFERTY: Coming up on IN THE MONEY as we continue: Retail rebellion. Wal-Mart critics slamming that company, alleging union busting and discrimination. See what that means for Wal-Mart's plans to boost its image.
Plus, coming on to Hollywood's golden boy. Find out how the studios make nice to Oscar in the hopes that you'll reach for your wallet at the box office. Back in a minute.
CAFFERTY: The latest developments, or lack thereof in the Enron case lead today's edition of "Scandal Watch." Enron's creditors are suing CEO Ken Lay and his wife, Linda, or as President Bush used to call him, Kenny boy. The bill collectors want the Lays to pay back $84 million in loans that Enron gave them in the late 1990s. Now, that $84 million wouldn't put a dent in Enron's $50 to $100 billion overall debt, but hey, every little bit helps.
And that's not all the news this week for Mr. Lay. Kenny boy's lawyers are telling the world that Lay did nothing illegal when he sold $92 million worth of Enron stock. Now, Lay sold the stock at the same time he was acting as a public cheerleader for the company and urging people to buy Enron stock. Lay still doesn't face any criminal charges in the Enron case, and who knows whether he ever will. Former Enron Chief Financial Officer Andrew Fastow does, though. This week, a federal judge complained the mounting pile of evidence in the case against Andrew Fastow could make the case unmanageable. Your honor, that's what you guys are paid to do, to sort through the documents and make this stuff manageable so that the justice system can proceed and do what it is we pay you, we, the taxpayers, to do, which is prosecute the bad guys and put them away someplace. Andrew Fastow faces a 78-count indictment for creating those off-the-books partnerships that helped bring Enron down and may apparently be too complicated for some of the folks in the legal system to understand.
Editorial columnist and radio talk show host Arianna Huffington has been looking at the big picture when it comes to some of these scandals. She's the author of a new book with the rather colorful title, "Pigs at the Trough: How Corporate Greed and Political Corruption Are Undermining America." She joins us now from Los Angeles. Ms. Huffington, nice to see you. Thanks for being on the program.
ARIANNA HUFFINGTON, COLUMNIST/RADIO TALK SHOW HOST: Great to see you.
CAFFERTY: One of the presidents, I don't remember which one, said the business of America is business, and if you go back to the days of Henry Ford and the oil barons and the Rockefellers, and all the rest, greed and scandal are nothing new in this country or in this economy. What's the point here?
HUFFINGTON: Well, what is new is the unholy alliance between corporate America, Wall Street and Washington. We have 20,000 registered lobbyists right now. And as I say in the book in a sidebar called "All in the Family," many of them are married to senators, are the children of senators, who Chet Lott, who went from running a pizza joint to being a powerful lobbyist, or Linda Daschle. And therefore, there is a tremendous amount of power that special interests have to put all those tax loopholes, all those special regulations or lack of regulations that have allowed all those corporate scandals to go on and to still go on. That's really at the heart of what I'm saying in the book, because it's still business as usual.
CAFFERTY: Wasn't there this great amount of outrage, though, following the WorldCom/Enron, et al stories that hit us all about a year, 18 months ago, and we got that Sarbanes-Oxley bill passed, and now everything is supposed to be all right, isn't it? I mean, didn't they fix all that stuff?
HUFFINGTON: But it's not.
CAFFERTY: Why not?
HUFFINGTON: That's the whole point. You may remember that Harvey Pitt resigned in disgrace three months ago, but he's still at the SEC, and as "The New York Times" revealed at a front page story, in charge of undermining, killing or watering down the lame reforms that were passed in the summer. And even now, as we're hearing the stories of Sprint's CEO sheltering hundreds of millions of dollars and not paying any taxes, we still have the SEC not making a clear-cut decision not to allow accountants to offer financial advice at the same time that they are auditing the company's book.
Why is it to hard to pass some common sense reforms? And why does it always have to come down to massive popular outrage before anything happens?
ASNES: Well, that is what happens in this country and we've had a whole history of having these kinds of insider things that go on and then popular outrage that sweeps it out. Think about the robber barons that Jack mentioned before, think about people like Jay Gould, who owns the railroads. Think about scandals like the Teapot Dome. What happens in this country is we have a free market economy. Some people become very successful, figure out how to manipulate the economy to get their interests. They assemble money and power, and then they screw up.
They get in big trouble. People get mad, people start to demonstrate. All these laws are passed. The economy goes through some changes, and the rules get tighter.
FOX: I was reading through the book, and I think the real culprit, it appears to be, is this guy Serwer sitting over here.
CAFFERTY: That's right. Absolutely.
SERWER: Why's that? Oh, yes. Well, yes, Arianna, Andy Serwer here. You quoted me in the book, twice, in the 10 stupidest things about the new economy. And you know, I didn't think they were stupid what I wrote. And I just wondered if you --
FOX: Andy wrote a lot of stupid things in the late '90s, but those two actually were pretty smart.
SERWER: I actually wondered if you actually read my article.
HUFFINGTON: Well, Andy, I have read your articles, and you've written a lot of good things, but you must admit you were a cheerleader for the new economy.
SERWER: Oh, I don't think that's right.
HUFFINGTON: You were one of the people who thought it would go on forever, and the point I'm making in the book is that a lot of that cheerleading led to billions of dollars being lost in pension funds, in 401(k)s, and these are real people who got hurt. And my problem is that even now...
SERWER: Did you get hurt, Arianna? You're pretty wealthy, aren't you? Where's your money invested?
HUFFINGTON: Absolutely. Absolutely I got hurt. But you know, I could afford to get hurt. A lot of people who could not afford to get hurt got hurt. (CROSSTALK)
SERWER: Here are the comments, Arianna. I just don't think what I wrote was wrong. "Even if the market tanks, the vast majority of us will stay in the game. We have to, because for more and more Americans, our money is no longer in the hands of schlumpy stockbrokers." I mean, what's what's not accurate about that?
HUFFINGTON: Well, first of all, the statement you made now is absolutely absurd.
SERWER: That's absurd?
HUFFINGTON: I'm sorry, let me just respond. I think right now, it would be insane for small investors to be in the market. It would be insane...
SERWER: It's a great time to buy.
HUFFINGTON: It would be insane to listen to advice.
FOX: It was insane three years ago. Now it's a great idea to be in the market.
HUFFINGTON: I'm sorry, let me just finish. You know, here we have all these analysts who are still not being indicted, like Jack Grubman, like Henry Blodget, who went on cheerleading they way you are continuing to do now, and people listened to them, and right now they're going to get away with some fines instead of being indicted and admitting wrongdoing.
SERWER: But what does that have to do with being invested in the stock market, Jack Grubman and Henry Blodget?
HUFFINGTON: It has everything to do with is, because until we return faith in the stock market, until we make some fundamental changes, why should small investors believe that the stocks that they're being touted are actually the way that they're being presented, instead of seeing some other kind of favors going on in the background, which is what happened during the '90s? And it's still going on. That's the key point that I'm making.
ASNES: Wait a second. Now, wait a second. If what you're saying is true, then what that means is that all of us investors, and I've been in the market for many years, I certainly got hurt when the dot-com world exploded, but I'm still in the market. I'm still buying stocks. And yes, I work at "Money" magazine, but I and all the readers of my magazine don't just get our spoon-fed by analysts and told what to do. You can go on the Internet and you can look yourself at the financial papers that are filed by corporations, and for all of the ones that are fraudulent, there are also the ones that are truthful. There are at least a dozen people in America who want to do an honest job. So what you're really saying is that we're all sort of foolish, and I don't agree with that, Arianna. I think that we're smarter than that.
HUFFINGTON: I'm saying that there are a lot of people who have the tame to go and do their own investigation, but millions of people who work as truck drivers, as school teachers, don't have either the knowledge or the time to do those investigations. And if you look at the lawsuits against Merrill Lynch, against Citigroup, brought on by ordinary investors, I write about them in the book, it really makes you want to cry for the way that these people were defrauded of savings that it took them a long time to actually build up.
FOX: There's also a lot of people out there with their money in index funds, where they diversified between bonds and stocks, like people are supposed to do, who made it through OK.
ASNES: Right, including school teachers like my mother.
CAFFERTY: Let me ask you this, let me ask you a question. You said you were in the stock market. Did you raise any of these questions back in the late '90s, when the market was going up 25 percent a year and you were making money hand over fist? Did you complain about the advice you were given then?
HUFFINGTON: You know, the point is that I was in Treasury bills, I was never really in the stock market in a way that a lot of people were. I never really trusted the new economy. But the point I'm making now is what you said at the beginning about Wal-Mart. It goes on all across America. You have the CEO of Wal-Mart making $17 million in 2001, while employees were not being given overtime. It's this kind of upstairs/downstairs America, as I'm calling it. And this is not a left/right issue. It's about fundamental fairness. And that's why there's outrage all across the country.
CAFFERTY: We've got to leave it there. We appreciate you being on the program. The book is called "Pigs at the Trough," the author is Arianna Huffington, she is also a syndicated columnist. Thanks for joining us.
Still ahead on IN THE MONEY, is it a dog's life or a god's life? A dog doesn't have to be a Westminster champ to rack up blue ribbon bills. Believe me, I know. We'll tell you how much America spends on its pets.
Plus, the Hollywood gold rush. Find out what a movie studio will do for an Academy Award and what you'll do for a movie that wins one. That's next.
CAFFERTY: Our stock of the week is Wal-Mart. The world's largest retailer continues to grow, albeit at a slower pace than in years gone by. One thing that is not slowing down, though, is the growing number of lawsuits and other protests facing the company. Litigants and critics say that Wal-Mart discriminates against women, underpays workers and uses illegal tactics to stop unionization efforts.
But are these legal landmines enough to make Wal-Mart a risky investment? Would any of you buy the stock today? They're going to add, I think, a million jobs, they say, in the next year or so, but these are serious allegations.
SERWER: All right, I don't own the stock, but I would. I think it's -- this company is a juggernaut. It is still going to grow. It has more influence over the American economy than any company since Standard Oil before they broke it up. And I only have good things to say. When you're that big, you're going to get sued.
FOX: And some day, they're going to hit a wall, too. We just don't know...
SERWER: Not yet.
FOX: No, yes, probably not this year. Probably not next year. But one of these days.
CAFFERTY: What is it about their business plan that has put people like K-Mart and some of the others on the ropes? I mean, K- Mart used to be the top dog in the meathouse, and now Wal-Mart comes along and has run them right off the street.
ASNES: There's one thing that they do is they do this business better. They have the best computerized inventory system of any of their competitors. They are smarter, they are tougher, they are more flexible. And they, you know, it's execution. That's what it's all about.
SERWER: But you know what else they do? They don't believe in sales. I mean, this is the everyday low pricing concept. See, what a lot of these guys used to do...
SERWER: ... they'd have the sales and they'd stack up all these retailers -- they'd get all these cups, see, they get mugs, they buy a million mugs, and then no one would buy the mugs. So they said, look, we're never going to have sales, everyday low pricing, we win, customers win, and they forced their suppliers to give them the lowest price.
FOX: And another thing with Wal-Mart is there was this bond between the company and the employees that was sort of rare for the company of that size, and they paid that back.
ASNES: Right, well, that was when Sam Walton was alive. That was when Sam Walton was alive. Sam, when he built -- he was the founder of the business. And when he built this business, he had an extraordinary rapport with his workers. He would go to rallies, he would wear a hula skirt and dance with his workers. FOX: I think that still works in sort of their core markets in the rural south, partly because a job at Wal-Mart is still the best job in town.
CAFFERTY: Do you think if we got Jim Walton to wear a hula skirt and dance for us, would it improve the morale here at CNN?
SERWER: Is he related?
CAFFERTY: No, but he's the boss here.
SERWER: I'd like to see that. And maybe he can get us discounts at Wal-Mart too.
CAFFERTY: How serious a liability are they facing, though? Potentially, with the number of employees they have, I mean, if they make retroactive damage rulings against them, it could be big, big bucks going back a long way.
ASNES: The big risk is overtime, because that's when you get into federal labor law, and that can be really tough. If it turns out that they have not been paying overtime to workers who are eligible for overtime, that could give them some big penalties. But I doubt any of this is going to really be a major blow. The real issue for them, in terms of risks to their juggernaut, is where are they going to grow. They've been trying to expand into Europe. That has not been as successful as they like. If they can make that work, you know, they're unstoppable.
SERWER: They still have room to grow here. They still have room to grow here. They have a million employees. One out of 100 -- every 120 Americans works for them. One out of every 20 people in retailing works for Wal-Mart. I mean, it's amazing.
But it's true, you know, the female employees, I think they were concerned this has to do with the litigation and being underpaid. You have a permanent legal department. I mean, they're just doing to handle these lawsuits forever, but you look at the people they've driven out of business. K-Mart's on the ropes. Then you've got Sears and Penny's are OK. Target's still healthy. But you look at all these Ames and Bradley's, all these other discounters ...
FOX: I mean, first you had A&P that drove all the mom and pop groceries out of business. And then Sears. And so some day, somebody's going to come along and eat their lunch, but it may be decades from now. I don't know.
SERWER: You know, they're the No.1 company in the Fortune 500, which is how big you are by sales. They've got more sales than any other company in the United States, biggest employer in almost every state. Right? What company will replace them on the top of the Fortune 500? It ain't even on the horizon. We have no idea. I mean, they're going to grow forever. I think they're a kind of a pain in the neck. You go in the stores, you can't find what you want.
But as far as being an investor, I'd love it. I don't like shopping there so much.
ASNES: And now they're making mini Wal-Marts. They're making mini express Wal-Marts so you can just go in, grab a few things and go. So now they're...
SERWER: The mini-me. The mini-me of Wal-Mart.
ASNES: That's right. The mini-me of Wal-Mart, and the question is, are they now going to drive 7/11 out of business?
CAFFERTY: All right. Coming up next on IN THE MONEY, as we forge ahead, the truth about cats and dogs. Find out why the cost of animal care is becoming a pet peeve. I'll tell you what, it's a pet peeve in my house.
Then we'll go from the dog bowl to the fancy china. "Gourmet" magazine editor Ruth Reischl brings us her tips from the top.
CAFFERTY: Everybody knows that the Oscars are all about recognizing the year's finest talent in the film industry. Right. If you believe that, I got a fake gold statue I'll make you a hell of a deal on. An Academy Award or even an Oscar nomination can boost a movie's box office by millions of dollars, so the studios spend big bucks flirting with the Academy's 6,000 voters, hoping to make even bigger money off you by getting the "W".
The musical "Chicago" walked away with 13 Oscar nominations this week, none for Richard Gere, however. Trailed by "Gangs of New York," which got 10. And the picture called "The Hours" racked up nine. Now, those nominations alone can add up to the movie's life in the theaters, and that means, of course, money. For a look at the economics of the Oscar race, we're joined from Los Angeles by Anne Thompson, who is a Hollywood columnist for "New York" magazine. Anne, nice to have you with us.
ANNE THOMPSON, NEW YORK MAGAZINE: Happy to be here.
CAFFERTY: So these movie companies employ something called Oscar strategists. What, pray tell, is that, and what do they do?
THOMPSON: There's a whole group of veteran publicity people who have worked at the studios over the years, and they're the ones that take the stars around to the Screen Actors Guild and they do Q&A's and they meet the folks. A lot of flesh pressing in the old school political style is going on nowadays.
CAFFERTY: Now, are there any rules against this lobbying to try and win these Oscars? Isn't this supposed to be sort of an objective thing based on the artistic value of the film in question? THOMPSON: That would be nice. But what they're doing is they've found loopholes. Instead of going straight to the Academy members, which is forbidden, what they do is they go to the Screen Actors Guild or the Hollywood Foreign Press, which is the Golden Globes organization. They promote those things, where there aren't any rules. Those are all the things that lead up to the Oscars. And that's how they influence the Oscars.
FOX: But Anne, it's not like the movies that win Oscars now are significantly worse or more commercial than the ones that used to, is it? I mean, it seems that...
THOMPSON: You know what? It's about having all of the elements in place, having the money for the trade ads, sending out the cassettes, squiring all the actors around. You have to have all of the different things winning. And if you don't -- I mean, "Antwone Fisher" is an example of a movie where 20th Century Fox tried really hard to get that one across, Fox Searchlight, and they didn't get anywhere, because it simply didn't grab everybody the way it was supposed to.
SERWER: And Andy Serwer here. You know, we read some numbers by a professor at Colby College (ph) up in Waterville, Maine. He showed that films that won Oscars only made a couple million dollars more. I mean, it doesn't seem to me that this is really money that's worthwhile for the studios. The other point is, the studios aren't brands. I mean, no one goes to see a Viacom movie. All they want to do is see Robert DeNiro. So what is all this money being spent for?
THOMPSON: You know, it's not just about the domestic box office, it's about foreign, it's international. And Oscar sells a movie overseas big time. And believe me, it's millions of dollars. On a cassette years from now, it can have a little gold statuette on there.
SERWER: But the actors aren't connected to the studios anymore, I mean, so the actors and actresses really benefit, right?
THOMPSON: Well, you know, Salma Hayek and Michael Caine really went out there and promoted themselves. It wasn't as if it was all Miramax's doing or -- at all. And they're the ones that got those for themselves.
ASNES: Yes, but didn't...
THOMPSON: By promoting tirelessly.
ASNES: Didn't Salma Hayek produce "Frida"? I mean, isn't part of it kind of enlightened self-interest for her to get out there? And do actors have their own Oscar strategists, or do they totally depend on the studio?
THOMPSON: No, they have their own. They hire their own publicity people and they go out and spend money on their own too.
CAFFERTY: Let me get you to help me out with something here. If I'm a member of this Academy and I'm in a room and I'm looking at all these movies and I say, well, I like that movie and I think it's better than this movie, and this movie is better than that movie, and this movie over here is not very good at all, so I'm going to nominate picture A and picture C, but not picture B and picture D, does the price of a lunch or a night on the town make me change my mind? And if so, that suggests to me that there's something kind of unwholesome, perhaps, at work in all of this. Am I way off base?
THOMPSON: Not at all. The Academy forbids these things, and they do it for a reason. The actors appear to be the most susceptible group. They make about 22 percent of the Academy. They are the largest single group, and it's those screen actors -- I've been to these things at the Screen Actors Guild. They're stars, you know. You love them. If you see Diane Lane up there being incredibly charming, or Salma Hayek, who is very charming, or Michael Caine, who you've adored for years, you're going to respond to that.
ASNES: You know, I can't imagine a single major award in the world that isn't really political at its heart. You know, the Nobel Prize for literature, it's not like people line up and read all the books in the world and say, this author is the best. In all of these rewards, there's a sense of ongoing relationships that people have and somebody's due and somebody did great work the year before that doesn't really get recognized. So they recognize him the next year for something else. I mean, this kind of is the way of the world with awards, isn't it?
FOX: And sort of what's wrong with that? I mean, that's life in Hollywood. It's always been a little bit unwholesome. So.
THOMPSON: I think the sad thing is that this year you don't see something like "Monster's Ball." You know, it was so competitive and so much money was spent and so many movies are taking up the available theater space, that the little ones just didn't get through.
ASNES: Well, that's a good point, because last year was very surprising in a good way about how many independent movies did get recognized for being truly extraordinary.
SERWER: But how many really independent movies are left? I mean, Miramax and New Line are both owned by big movie studios now.
ASNES: That's right.
FOX: Well, these whole campaigns are still cheaper than getting a movie out in every theater in the country and putting ads on TV. So it's still easier for an independent to get known by this process than by regular advertising.
CAFFERTY: Anne, one quick last question. Have you picked up any buzz out there? Is Richard Gere going to go to the Oscars? He's the only one except the props guy who didn't get an Oscar nomination for "Chicago," and he's really got a bit of a dilemma.
THOMPSON: I feel bad for him. You know, that was a very, very competitive category, and I really think Miramax was a little greedy there. They got John C. Reilly in the supporting actor category when Gere should have been there. And I think that would have worked out for him.
CAFFERTY: You think he'll show up?
THOMPSON: He might not come. I wouldn't if I were him.
CAFFERTY: I wouldn't if I was him. I'd stay home and pout.
Anne, thanks for being with us. I appreciate it. Anne Thompson, Hollywood columnist from "New York" magazine, joining us from California.
Coming up next on IN THE MONEY, the ridiculous amount of money that a lot of us, including this cowboy right here, spend on Fido and Sissy and the rest of the little four-footed creatures that run around the house. Back in a minute.
CAFFERTY: It says here weird hair, dog collars and serious attitude, and we're not talking about the New York club scene. That's sort of an East Coast thing. It's the annual Westminster dog show, which is held here in midtown Manhattan this last week. Best in show went to a funny-looking blue terrier named Torums Scarf Michael (ph). Check out that beard. At the fire hydrant, they call him Mick.
Showing a dog at Westminster costs a bundle. But then, again, owning any pet in America, not exactly a bargain, not when we spend literally billions of dollars a year on them. Funny looking tail too. I guess -- he's very pretty, I'm sure, what do I know from pure breeds -- I get my dogs from the animal shelter.
From food to health insurance to spa treatments and psychotherapy, no shortage of ways to splurge on an animal. We are going to talk a little bit about the business of pet ownership, and I've got to share an absolutely true personal story. I have this dog that we do adopt from the shelters. She's about a 3-year-old terrier mix. And we got a little note from the vet saying it's time for her annual booster shot, you know, for her vaccinations, whatever.
We take her into the local animal hospital over here in New Jersey. They give her the shot. The guy's checking her over, the doc, and he says, look, your dog has a couple of bad teeth. It's a 3- year-old dog. So I looked in her mouth, and yes, she has got a couple -- I mean, I don't know which, I don't brush the dog's teeth. She says, we really need to take those teeth out, because otherwise, the dog could get an infection. So I said OK. So they keep the dog overnight, anesthetize it the next morning and pull the two teeth, and give the dog the shot. The price was 790 bucks. I could have had most of my teeth pulled for less money than that.
FOX: My wife and I were thinking about getting a dog a few years ago. We started thinking about it, especially taking him out to walk in the cold weather like this and all the expenses, and we finally just decided to have a kid instead.
(CROSSTALK) FOX: They're not cheaper, but you don't have to walk them.
Well, I mean, you do, but...
SERWER: It's a huge business, though. It's growing by leaps and bounds. They have the cycle dog food, fish flavored water for cats.
ASNES: Oh, my cat needs that.
SERWER: It's unbelievable.
ASNES: I cook fish for my family, and my cat starts to cry. He wants some.
SERWER: I was talking to Mario Gabbelli this week, this money manager. And he was saying, you know, Oil Dries (ph), this company that makes this new kitty litters growing like crazy, and he said it's a demographic play. As people get older, you know, the baby boomers are aging, they are buying more dogs and cats to keep them company as their kids go off to college and grow up and everything.
FOX: Pet stock mania.
SERWER: That's right, it's the next bubble.
ASNES: It's the next bubble, pet stocks. Well, you know, the other thing about them, though, is that they're known to keep older people healthier and happier. There's been a lot of research.
ASNES: And therefore, they'll spare no expense. So that it's kind of weird. I have to say that in this country, while we have 45 million Americans who are uninsured, we have a booming business in pet health insurance, and we have -- that's right, pet health insurance.
ASNES: Yes, you can. And there are a lot of -- you know, you can get your...
SERWER: You've got to be kidding me.
ASNES: No. You can get your dog a kidney transplant, too, if God forbid, that they become sick.
SERWER: The surgeries, I've been reading about that, I don't have pets, the surgeries are unbelievable. Right? They're doing all this stuff. They can keep doing it more and more.
ASNES: That's right. And you know, veterinary medicine is a burgeoning field of medicine, and there are advances made there just as there are in human medicine, and if you love your pet enough, that pet is a member of the family. But I still think it's weird.
(CROSSTALK) FOX: Until we have universal health care for pets, this will not be a great country.
SERWER: This neighbor of mine gave her German shepherd acupuncture. I mean, would you like to give a German shepherd acupuncture? You've got to be kidding.
ASNES: That's a brave, brave acupuncturist. That's all I can say.
CAFFERTY: You do form emotional bonds with these animals. I mean, I love my dog. I dearly do.
CAFFERTY: I'm a certifiable moron for spending $800 to get his teeth pulled. Sandy is her name. She looks just like the dog in "Annie," which is why we named her Sandy, because very little imagination on my part. But you do form emotional ties with these things and they become part of your family. And when one of them gets sick, you do for them like you would for a child. The thing is, it costs a lot of money. There you see people on the horns of a dilemma, say that they go to the vet and the animal needs surgery. Well, the surgery can cost thousands of dollars. Not everybody has that kind of money to spend on getting Fido's liver transplant or whatever it needs.
FOX: This clearly is one of the things that's keeping the economy moving, even though it's going slowly. This is why GDP is up every quarter. It's pet health care. One of those elements.
SERWER: This is also one reason why people in other parts of the world think we're crazy.
FOX: Yes, that too.
ASNES: Although I have to say that the French are even more devoted to their dogs than we are.
SERWER: They bring them in restaurants.
ASNES: That's right.
SERWER: You know what we need right here? One of those cat scratchers.
CAFFERTY: We don't have any cats here.
SERWER: I'll scratch it.
CAFFERTY: Still ahead on IN THE MONEY, you wrote it, we'll read it. We'll take you through some of the e-mail that we received in the last week after the break. Put on our flea and tick collars and be right back.
CAFFERTY: Time now to check out some of your e-mails, see what's on the minds of our viewers. D.W. in California writes the following. Quote: "I see a lot of financial shows, and they all have people who prophesy whether stocks will go up or down. If these people really know, why are they on TV? Shouldn't they be on their yachts someplace?" That's a very good point. We don't have any of those people here. And won't.
Donald writes: "Andy said there was nothing with amateur athletes accepting money. Just change the rules. OK, then change the rules regarding prostitution, heroin, child molesting. Then those problems will go away too." I'm not sure that that works. We'll get Andy to weigh in on a minute.
Jay in Birmingham, Alabama writes the following: "Whacko Michael Jackson might be willing to fund the space program if we let him use the space station for an occasional slumber party." That's cruel. Just a thought. Thank you, Jay, so much.
You know, we were talking about whether or not we should just cut the hypocrisy, pay the kids in college to play on the big-time athletic programs, and forget having to worry about whether they're getting a free shirt someplace.
SERWER: Yes, was that Donald who wrote in to say that?
SERWER: Donald, I mean, you know, there's a thing, a metaphor is what he's trying to do. So paying athletes is like prosecution. That's not true. See, it's a different subject. We want to make that clear. It's prosecution, heroin and child molesting are different from athletics. I just wanted to respond to that.
Yes, I think they should. I mean, it's the minor leagues of basketball and football. And, you know, the leagues should pay these guys and women -- men and women in school to go to school and have jobs.
CAFFERTY: There's also been an update on the story we were talking about last week, that hot shot basketball player. What...
SERWER: LeBron James.
CAFFERTY: Right, the high school kid who was going to skip college, go right into the pros. And his championship game, which for a time they didn't think he would even be able to play in, because he took these two shirts, but then they decided they were going to let him play. But the update is ESPN apparently has been denied permission to telecast this thing.
SERWER: Right. I mean, I think that's a good thing in a sense it will take the pressure off him. It's a bad thing, let's just open the whole thing up. I mean, it's a situation where ESPN was benefiting, and I think he wasn't reaping any of those benefits, he or his family, so I think it's a good thing.
CAFFERTY: All right. Any other thoughts on any of the e-mails? The Michael Jackson story going to go away ever? Now I see he's going to take some -- make a response to this documentary and VH-1, I think, is going to replay this documentary.
ASNES: I want to know who is giving this man advice? Because he should just -- he should stop already. He's just digging himself in deeper every single time he appears in public.
FOX: Yes, but isn't that one of those unseen sources of economic growth.
CAFFERTY: Keeps a lot of journalists employed.
ASNES: That's right.
CAFFERTY: There is also a piece in the paper this morning, remember when this documentary came out, there were questions raised about how many plastic surgeries he's had, one of the newspapers here in New York, and I don't remember which one, was quoting the former partner of the guy who apparently did a lot of the cosmetic surgery on Jacko saying that he had 50, 5-0, 5-0 cosmetic surgeries. I mean, if you paid for 50 cosmetic surgeries and at the end you looked like that, I'd want my money back.
SERWER: Yes, there's a zero sum game, I mean, it's just like the curve goes down after all. You have two of them, you look good. You have 50 of them, you look terrible.
CAFFERTY: With a face like mine, I'm talking about plastic surgery. I could use a little.
All right, that's all the time we have for this day -- oh, there was one other e-mail we got, and I don't have it. Maybe I'll do it next week. But the guy started, I'm going to start my correspondence by sucking up to you, because that way maybe I have a chance of getting my letter read. This is a very good approach to this program and getting access to it. I forgot to bring the letter. I'll probably do that next week.
CAFFERTY: Nice try. All right, thanks to the panel, Marion Asnes of "Money" magazine, Andy Serwer, Justin Fox, both of "Fortune." I'm Jack Cafferty. Thanks for watching. We'll be here, same time, same station, tomorrow afternoon 3:00 Eastern time for IN THE MONEY. See you then.
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