CNN IN THE MONEY
How Much Will Reconstruction of Iraq Cost?; Gun Companies Want Protection From Lawsuits; Are TV's Big Hits Alive and Well?
Aired May 10, 2003 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JACK CAFFERTY, HOST: Good afternoon, welcome to the program. I'm Jack Cafferty.
Coming up over the next hour, divided they stand. We'll look at the job of rebuilding Iraq and the price tag that goes with it.
Bulletproof. Gun companies want Washington to protect them from lawsuits touched off by their products. We'll see whether the plan could backfire or not.
Are they OK or DOA? The 200th episode of the TV show "ER" goes on the air. We'll find out if TV's big hits are flatlining, or are they alive and well.
And joining me for the next hour to explore all these topics, CNN financial reporter, Susan Lisovicz, and "Fortune" magazine's editor- at-large, Andy Serwer.
If winning the war in Iraq, before we introduce our guests, is -- part of the job is rebuilding. You pick up "The New York Times," today, today being Friday, you're watching us on Saturday, so yesterday.
On the front page, they had a story about their putting former Ba'ath Party officials back into government jobs in Baghdad. Now, the Ba'ath Party was Saddam Hussein's party. If you're an Iraqi whose father, son, grandfather was imprisoned, tortured, or killed, one or all of the above, the last thing you want to do when you walk in to pay your water bill is see one of Saddam's guy on the other side of the counter. I don't understand that.
SUSAN LISOVICZ, CNN FINANCIAL NEWS CORRESPONDENT: And you have to question, didn't we go in to change the leadership, a regime change?
ANDY SERWER, EDITOR-IN-CHIEF, "FORTUNE" MAGAZINE: This is a problem happens. It happened in Nazi Germany. It happened in Japan. I mean, the people of the expertise were running the government. They also happen to be the bad guys. You probably need a few of them. How do you balance it out?
And, of course, in Germany the stuff went on and on. Who was a member of the Nazi Party went on for decades.
LISOVICZ: And these are key leadership role, the minister of health, the president of Baghdad University, the biggest in the country. So, it struck a cord.
CAFFERTY: The back side of the argument is, do you want the lights on? Do you want your water running? We have to get guys in here who know how to do it, and presumably these people do. Well talk to our guests a little more about that with some other things.
Winning the war is a tough job for the United States. Rebuilding the country of Iraq could prove to be even tougher and even expensive. Air strikes and combat damaged Iraq's infrastructure, which was not in great shape to begin with. Hospitals, utilities, roads, oil wells, just some things that are in need of repair, and complicating the job is Iraq's mixture of ethnic and religious groups, each with its own vision of the country's future.
Estimates on the price tag for reconstruction in that country run into the tens of billions of dollars. CNN's Karl Penhaul is following the reconstruction effort and joins us from Baghdad for a look at what's working and what isn't.
And Karl, let me ask you first off, is this idea of putting these Ba'ath Party officials back into their old jobs part of what's working or what's not?
KARL PENHAUL, CNN CORRESPONDENT: Well, the Iraqi people that I've spoken to so far seem really alarmed about this. In fact, a friend of mine, a Czech friend of mine, who used to live behind the iron curtain, he compared the situation to what happened there.
Once the iron curtain and the Soviet bloc disappeared, he said that they, too, saw former Communists coming back and into public positions. That alarmed them. And he can understand probably better than anybody how alarmed the Iraqis are now when they're seeing these former Ba'ath Party official coming back to positions of power, if you like, positions of influence.
It was one that, as you already mentioned, one of the messages of the U.S. that the Ba'ath Party would not be able to exist at such. Fair enough, if it's not allowed to exist as such, but, nevertheless, these people are taking on positions of power.
This week, also we saw the court system reopen. They are the criminal courts that reopened, but they're using the same justice system that was operating for years under Saddam Hussein. And the judges that are running the criminal courts today, the same judges that operated under Saddam Hussein. They have to be Ba'ath Party members to run the justice system.
Now, these are low-level justice officials, the criminal courts. But there's also plans for broader courts to judge Iraqi officials deemed to have committed abuses against the Iraqi people. So, there's a chance that we could see the criminals getting judged by the Ba'ath Party officials. The judges judging the judges or the criminals judging the criminals.
It's kind of a philosophical problem, if you like, but on the streets, the Iraqi people don't like it. They are getting mad about it. We saw a protest this week by doctors, and they say that the deputy health minister there is a former Ba'ath Party official.
CAFFERTY: And the doctors went to great lengths to go out of their way by bush and go down to the government building. I saw the pictures in the paper with their white coats on and protest signs saying, hey, look, this is not -- this didn't work before, and it's not going to work now. Let me switch over to the cost of getting this rebuilding done. Estimates all over the lot. The war took a lot less time than some estimates that had been entered on that side of the ledger before it started. But we don't know how long or how expensive the rebuilding is going to be.
Give us -- bring us up to date on what's happened so far and what part of that society is back up and running and what part still needs work and whether the cost estimates are even doable at this point.
PENHAUL: Right. As far as the cost estimates, well, I'll come to that in just a moment. What's working. Here in Baghdad, the capital, sporadic power, sporadic water. The food supplies, by are large, are guaranteed for a short while, thanks to Saddam Hussein, who had foresight to distribute several months' food rations up front before the war.
Power is coming back, yes. Water is coming back, but, again, the people want these things back now. Jobs, no sign really of the economy beginning, apart from small commerce. That kind of thing is being affected by looters. And so, until the jobs come back, then the people haven't got any earning power, and that is going to affect a lot of things.
Yes, under the coalition, an interim administration. We're seeing some of the ministries starting to function in some form. These advisory bodies being put here to help the ministries functioning. So, some kind of structure is there.
As far as the cost of it, well, let's look at the sanctions, as they may be lifted, and let's look at the oil that Iraq has. It could be that somebody uses the oil revenues to pay for the cost of reconstruction.
LISOVICZ: Karl Penhaul, thank you so much, joining us from Baghdad.
We want to stick with the subject of the cost involved with rebuilding in Iraq and what we should do there. We're joined now from Washington by Bathsheba Crocker. She is an international affairs fellow at the Council for Strategic and International Studies. Welcome.
BATHSHEBA CROCKER, THE COUNCIL FOR STRATEGIC AND INTERNATIONAL STUDIES: Thank you.
LISOVICZ: No matter how you cut it, we're talking about billions of dollars here, but, boy, are the figures way off. For instance, the Congressional Budget Office sees the cost of occupational forces by the month up to $3.8 million. Your study, a wiser piece, sees the high end for 18 to 24 months, $6.6 billion. How could those figures be so far off?
CROCKER: Well, and those are just two of the figures there. Many are out there. I think part of it depends on how many troops you are talking about.
The figure that we came up with was based on the notion of just a 15,000-person stability force. But I think what we're looking at -- and that was not including other troops that might be on the ground -- and so, I think really for the security part of it, the important thing is to come up with one number, one consistent number, of how many troops we're talking about.
At fairly consistent figures, if we think in the terms of 75,000 troops being on the ground, that will cost about $17 billion a year. So, and that is a figure that has sort of been out in the public realm for some time.
The important thing though, of course, also, is that people are, in fact, talking about far more than 75,000 troops. So, I think we'll even see that cost increase.
LISOVICZ: But Bathsheba, that realistic? And wee were just talking about with Karl Penhaul, our reporter in Baghdad, that even health workers who have been forced to subsist in these deplorable conditions are taking time out to protest the appointment of a senior Ba'ath member, Ba'ath Party member, as the minister of health.
You're assuming that things will go well over the next two years, yes?
CROCKER: I'm not necessarily assuming that. I mean, if we look at how it's going so far, I think that's probably an optimistic perception. I think things will start to get better, but it will be very important to get the security peace right.
And, of course, now we have a lot of troops on the ground in Iraq throughout the country. Some of those will move in, and different kind of troops will transition into the country, but I think, again we're probably talking about more than 75,000 troops, and we're talking about troops being there for a considerable period of time.
But the immediate task that we all need to face is, really, getting the public safety issue right throughout the country and, of course, the issue you were discussing earlier of vetting of Ba'ath Party officials is one part of that because if the residents of Baghdad and elsewhere continue to be angry about the use of senior Ba'ath Party officials, that could just be one more thing that adds to increasing anti-Americanism in Iraq.
SERWER: Bathsheba, your numbers don't include the total cost though. I mean, those our just strictly the cost of troops because my understanding is that $4 billion a month figure, the 3.8 if you will, is much closer to the actual total cost of the U.S. taxpayer, and if you say you've got $20 billion of the actual combat phase, and $4 billion times seven months to the end of the year, you're talking about $50 billion, which sounds like a lot, but remember, didn't the President get $60 billion of a supplemental expenditure to fight the war?
So, you know, what gives here? Isn't that really the closer number, $50 billion, for the year?
CROCKER: Well, if you include the war and the post-war period. I think that the supplemental that the President got included some money for the war effort and maybe a few months of troops on the ground after the war.
But it gets complicated because the troops on the ground for the stability, the stabilization force, is just one part of it. So, we have the combat troop, which are partially covered under that $60 billion figure. Then we have the troops that will stay on the ground afterwards. But then we have all the other tasks that need to be carried out that don't even involve payment of the troops.
So, I think, if you look at the troop number, yes, you can come up with an easier -- you can more easily come up with a definite figure of what things will cost.
LISOVICZ: Bathsheba Crocker, we can assure you, we will be revisiting this issue with the Council for Strategic and International Studies. Thank you.
Coming up on IN THE MONEY, busting into the boys' club. Find out why women could be crucial to a stable future in Iraq.
Plus, on target or off base? Gun makers want Washington to protect them from civil suits. We'll look at what that means for business and your safety.
Also ahead, well, well, well. The company once led by Vice President Dick Cheney, Halliburton, grabs a bigger stake in rebuilding Iraq's oil fields. Well, the White House denies it's involved. We'll check the investment potential next.
LISOVICZ: For the U.S. and Britain, rebuilding Iraq is not just about putting a broken country back together. It's also about shaping a society in which everyone has an equal chance and an equal voice.
Some activists believe that Iraq's women are crucial to making a quality reality. They want to see women in government positions and other roles that will help to shape the country's future, but with religious influence on the rise, there are also concerns that Iraqi women could actually lose the rights they already have.
For one perspective on what may come next and why women could be crucial, we're joined from Durham, North Carolina, by Maha Alattar. She's will a group called Women for a Free Iraq. Welcome.
MAHA ALATTAR, WOMEN FOR A FREE IRAQ: Thank you.
LISOVICZ: Let's put this in perspective, though. Iraqi women, by -- certainly by Middle East standards, do have a big voice in Iraqi government. I'm reminded of two infamous women, one is called Mrs. Anthrax; the other one is called Dr. Germ. I remember those videos where you would see them seated with Saddam Hussein, right at the table with the big boys.
So, they are quite liberated by Middle East standards, yes?
ALATTAR: That's true, indeed. Unfortunately, the two role models for Iraqi women today are these Dr. Anthrax and Dr. Germ, and what we'd like to do is change that role model to something positive where we can actually help women to have a role model where they can become ministers, diplomats, heads of institutions, CEOs of major companies.
So, yes, indeed. The role of women in Iraq has not been that unfortunate, but, nonetheless, the role model hasn't been that optimal either.
SERWER: Maha, I've got a question for you.
SERWER: If the majority of Iraqi people want Iraq to become an Islamic state, does the United States have the right to deny them this? This is a very difficult situation. In Afghanistan, obviously, the Taliban oppressed woman. We didn't seem to mind that too much until 9/11.
Do we have the right to let the Iraqi people make up their own minds, or should we impose our will on them?
ALATTAR: I think that's a theoretical question because I don't think that's the case. I don't think most Iraqis do not want a theocratical institution. Most Iraqis have lived under oppression over the past 22 years own or even stretching it to 34 years, and they had no voice in the government.
What they want is a pluralistic society, where all ethnic groups or religious groups, men and women, can live in equality. If one group, supposedly the Islamic group, comes to power, tat will polarize all other groups, and that will not be for the best of the Iraqi people, and I think that the United States has an obligation to try to bring on the face of democracy to the Iraqis, hence that the Iraqis have not had the opportunity to see what democracy is like.
Sometimes when people are in a desperate situation, they think the opposite of what they have is the best for them. And that could be the case in what's happening in certain groups of Iraq, not all Iraqis. Not all Iraqis want to see an Islamic state. There are many religious, faithful, good people in Iraq who want to practice Islam and to have -- well, our hope is to have a government that's neutral where Muslims, Christians and even those who do not wish to practice, will do so.
I, of course, you know, I cannot say that any country should impose their rules on other countries, but I think that certain countries have obligations, especially those who are in doubt with democracy, to try to bring that on, to try to show the best of what they have, and democracy, which has flourished in the United States and in Europe, have really done well, and this is something that many Iraqis are fond of, the democracy in the United States and in Europe.
ALATTAR: Yes, I'm sorry.
CAFFERTY: Let me ask you a question, Maha. There was a front page story in the "New York Times" on Friday about former Ba'ath Party government officials being put back into the same government jobs they held during the regime of Saddam Hussein. I'd be interested in your take on that and how damaging or not it may be, in your opinion.
ALATTAR: You know, the Ba'ath regime has forced many people to join the Ba'ath Party. In Iraq, if you are a professor or a physician and you have not joined the Ba'ath Party, you cannot continue to hold that post. And, therefore, a lot of people in Iraq have become members of that Ba'ath Party out of either force or because they want to get their paycheck.
ALATTAR: And so, not every member of the Ba'ath Party is guilty. There are a lot of people -- and I emphasize a lot of people -- who have blood on their hands. There are a lot of people who participated in the torture and killing and, you know, unfortunate decisions that have cost the lives of many Iraqis.
However, not every member who used to be -- not every person who used to be a member of the Ba'ath Party is guilty, and we have to acknowledge that. Otherwise, you know, three-quarters of the Iraqi population cannot...
ALATTAR: ... hold their post.
CAFFERTY: Fair enough.
ALATTAR: But I think what needs to be done is to look back at look at the old records to see what these people have done.
CAFFERTY: Well, that's a good point. We are going to have to leave it there, Maha. I thank you for being with us. Maha Alattar is with...
CAFFERTY: ... the Women for a Free Iraq. Now, we will perhaps get a chance to visit with you again on the program in the weeks ahead.
Coming up on IN THE MONEY as we continue, Halliburton's oil change. The company's role in fighting Iraq's oil fires is apparently much bigger than expected. We'll tell you why that's raising some temperatures in Washington.
Plus, dodging the bullet, the gun lobby pushing for a ban against civil suits filed against gun makers. We'll look at what that could mean for the gun industry and victims of gun crimes.
Plus, the NYSE's dough boy, if you'll pardon the phrase. The boss raked in the cash, while investors were kissing it goodbye. We are going to take a look at the pay package for the boss, Dick Grasso.
Stick around. We'll be back.
SERWER: Some folks in Congress are taking a second look at Halliburton's contract to put out fires in Iraqi oil wells. After reading some of the fine print, California Congressman, Henry Waxman, is crying foul. He says the Bush administration tried to hide the fact that the much more lucrative contract to rebuild Iraq's entire oil industry went to Halliburton subsidiary, KBR.
Of course, the story is rebuilding accusations that vice president and former Halliburton CEO, Dick Cheney, is giving his company an old inside track on rich government contracts.
So what do you guys think, Halliburton too close to the action here? I mean, they're a company that knows how to do this stuff, right, Jack?
CAFFERTY: Well, that is one of the points that they would make is that there are not many companies in this country that can go over there and handle the oil well fires and do some of this stuff.
There's a lot of whining going on after the fact, it seems to me. The President shouldn't have landed on the aircraft carrier, and if he did, he should have taken a helicopter, and then he delayed the homecoming of the families. Halliburton should have -- we have defeated the regime of Saddam Hussein, arguably, one of the nastiest cats on the planet in a good, long while.
Presumably, that represents a leg up on the war on terrorism. Presumably, that means a lesser threat from weapons of mass destruction. And if two or three or four years from now, the country of Iraq is a functioning democracy with a GDP that represents a quantum leap forward in the standard of living for the people who live in Iraq, what the hell's the different how we got there, as long as there is no skullduggery or illegal stuff going on?
I think, you know, it's a much bigger picture than some of the carping and kvetching that's going on in certain quarters.
SERWER: That's what you really think, huh?
CAFFERTY: Carping and kvetching.
SERWER: Yes, there you go. LISOVICZ: Carping and kvetching. I mean, you know, let's face it. I mean, Halliburton did not have to compete for this very lucrative contract. On the one hand, of course, it is a very specialized field. On the other hand, Iraq's oil fields are going to be refinancing the reconstruction of Iraq, and the whole thing was Iraq's oil fields will be returned to the Iraqi people.
Well, it's got a credibility problem, you know, with not only among democrats, but in the whole Middle East.
SERWER: Yes, but there are not a lot or companies. It is a giant oil services company, but it is true that the vice president was the CEO. I mean...
LISOVICZ: Twenty years ago.
SERWER: It is, right, but it is awfully close. He was getting a pension from the company, and so you can't deny the fact that there are close ties with the oil industry and the Bush administration.
LISOVICZ: Can I just chime in one more time? I mean, Halliburton is a very sweet deal, not only for the stock, too, it's pennies away from its 52-week high right now. So, it's had...
CAFFERTY: So are most of the other oil service companies.
CAFFERTY: Since energy prices went to $40 a barrel.
LISOVICZ: Exactly. Well, this contract certainly spiked it.
CAFFERTY: One other little thing. The capacity of the Iraqi oil fields to deliver crude, based on the fact that they're not up to speed with western technology, is sorely limited, and under for the, you know, oil for food program, they were only allows to pump a little bit of what they are capable of pumping anyway.
Some of what I have read suggests that western technology will allow those oil fields to go up to 1.5 million barrels a day from the 200,000 to 300,000 that they were producing before. But, if you don't get a sophisticated western company in there to upgrade the pumping and all the rest of that stuff, it ain't going to happen.
SERWER: Jack, aren't there a lot of good French and German companies that can be doing that?
CAFFERTY: Well, I haven't thought about it that way. Perhaps Mr. Chirac...
SERWER: We should probably let them in and give them these contracts, right? I mean, they contributed, didn't they? Not!
CAFFERTY: Speaking of that, you know, that tape they said they found this week of Saddam Hussein, that audio tape, I understand that was made in a sidewalk cafe in Paris. SERWER: Old gay Paris?
CAFFERTY: Paris. Yes. He was eating a little camel burger there on the Champs Elysees, and he spoke into his tape recorder, and they sent it to Australian newspapers.
SERWER: Well, it is interesting, I mean, at some point, French companies will go back into Iraq and German companies. It will be very interesting to see the United States government allowing or not allowing, or trying to hinder or impede or encourage because it's a fact. European companies are going to come into Iraq and do business.
LISOVICZ: Well, France is Iraq's...
SERWER: Has been their biggest trading partner.
LISOVICZ: Biggest western trading partner.
CAFFERTY: Yes, and, of course, now that the war, they want back in, and the U.N. wants back in. All the people who didn't want the war to happen, they're all lined up knocking on the door.
LISOVICZ: They are making nice.
SERWER: You know what? President Bush hasn't answered the door yet. He's just letting the doorbell ring.
CAFFERTY: If they let us continue, and we assume they will, coming up on IN THE MONEY, as we continue here, big shots, gun makers looking for protection, counting on Washington to provide it. We'll see if that makes as much sense in a courtroom as it does in a boardroom.
And then from guns to shooting a hit, as "ER" heads towards its 200th episode. We'll look at what makes a TV show a classic and whether the industry is making any classics these days. Or is it all just about "The Bachelor" and that reality stuff?
CAFFERTY: It's been a bit of a mixed week for the nation's gun lobby. President Bush says he will support a continuation of the Clinton administration's ban on assault weapons. That's been something the NRA has been working against for a number of years.
But at the same time, the nation's gun makers seem to be close to getting some real protection from Uncle Sam. A bill making its way through the Congress calls for blocking liability lawsuits filed against the gun industry by the victims of gun violence and their families. But the bill could also stop the victims of the D.C. area sniper, for example, from suing the gun dealer in Tacoma, Washington, who sold the Bushmaster rifle to the two suspects who are accused of killing all those people. The House already has passed the measure overwhelming. There are reportedly 52 votes ready to go for it in the Senate, as well, and if it passes, President Bush says he will sign it.
There is, needless to say, much controversy, however, over this idea. Joining now us to debate the bill and to question whether or not the gun lobby are too powerful are Joshua Horwitz from the Coalition to Stop Gun Violence and Gary Mahalik of the National Sport Shooting Foundation.
Gentlemen, welcome to IN THE MONEY. It's nice to have you with us. Joshua, why don't you take it out on this, take us out on this subject. Let me just pose this as a hypothetical question. How is suing the manufacturer of a handgun for something that's done by someone who's using the weapon any different from suing Ford Motor Company if a carjacker steals my car and uses it to commit some heinous crime, runs over somebody, kills somebody. I mean...
JOSHUA HORWITZ, COALITION TO STOP GUN VIOLENCE: Yes, that's a great question, but we're not suing them for the criminal behavior, we're suing them for their own behavior.
For instance, you look at the Bullseye situation. There the Bullseye shooter had all sorts of violations of paperwork requirements and couldn't control their inventory. In fact, you mention in the opening, that that gun was sold. It probably wasn't sold, or if it was sold, it was an off-the-books transaction, and what happened there is they lost control of their inventory, and somehow, a prohibited purchaser got that gun. They don't even know how it happened. It may have been shoplifted. Probably it was some kind of inside deal, but who knows?
But why are why insulating a company like that? They cannot account for over 200 of its guns. This is a very broad and, I think, un-American type of law here. You're saying that state and federal courts cannot even look at these types of cases.
GARY MAHALIK, THE NATIONAL SPORT SHOOTING FOUNDATION: That's not the case at all.
HORWITZ: Really? This would be really very broad. It would eliminate traditional products liability cases.
MAHALIK: No, it wouldn't. There are big exceptions to this in this law. The exceptions are things like negligence...
HORWITZ: Oh, no. Oh, no.
MAHALIK: ... and criminal behavior.
HORWITZ: Oh, no. No, no.
MAHALIK: It's in the law, a copy which is available on our web site. It's downloaded from the Congress's web site.
HORWITZ: You should look at... MAHALIK: Anyone who's interested in finding the truth out about this need only go to the Internet, download the law, and see the (UNINTELLIGIBLE).
I think that it's a very American law because we have hundreds of years of common law heritage that say that you shouldn't blame innocent people for the things criminals do. There has been this political activity involved in trying to financially cripple...
HORWITZ: Let me ask you a question.
MAHALIK: ... or destroy the firearms industry, and it's in violation of that long heritage of common law and American jurisprudence...
HORWITZ: Let me tell you about -- let me tell you something. Let me...
MAHALIK: That's the only thing these law suits -- That's the only thing this law...
HORWITZ: OK, you've interrupted me. You've interrupted me. Now, let me tell you...
CAFFERTY: Let's do this one at a time. Joshua, go ahead.
HORWITZ: Thank you. I would suggest for a copy of the law to look at our site called, justiceforgunvictims.org., and we talk about tradition and the civil law and the common law. The tradition in that law is that victims of violence should have their day in court. And we're not saying...
MAHALIK: Nobody is denying that.
HORWITZ: Can I finish? We're not saying that we want special edges. We're just saying, let a judge and jury decide this.
MAHALIK: And they will. When this law is enacted, there will be some guidelines available for judges to dismiss those cases that have been brought for purely political reasons.
HORWITZ: Who's writing these guidelines. You're, you know...
MAHALIK: The United States Congress.
HORWITZ: This is the type of thing -- you say about negligence. Negligence is definitely going to be out in this suit. What you mean is negligent entrustment, which is a very narrow class of suits. Look at the case here. You have, in the sniper case, you have someone like Bullseye, who can't even...
MAHALIK: I don't think we can even talk about that case because it's under criminal investigation. The facts are not in yet.
SERWER: Josh? Josh, let me ask you a question.
HORWITZ: I'm ready to talk.
SERWER: Should it be legal to manufacture guns in the United States?
HORWITZ: Of course, it should be legal to manufacture guns in the United States, but that's not the issue.
HORWITZ: The issue is should dealers, should manufacturers be involved in activity that aids and abets criminals. For instance, should manufacturers sell the dealers, who they know are involved in criminal activity. Let me tell you something.
SERWER: Isn't everyone for that? I mean, isn't Gary -- I'm sure Gary is against people engaging in criminal activity, isn't he?
HORWITZ: Of course, but let me ask you a question. I don't know what companies Gary represents, but I can tell you that when there are companies...
MAHALIK: Gary? All the major manufactures...
HORWITZ: OK. Exactly.
MAHALIK: ... of firearms and ammunition and associated products.
HORWITZ: OK. Fantastic. Well, Bushmaster considers Bullseye a great customer, and they're going to keep selling guns to them. You know, companies in this industry will sell to dealers who are under indictment.
SERWER: But, Gary, let me ask you a question. Shouldn't josh and his people be able to sell gun makers and gun sellers who engage in criminal activity?
MAHALIK: I think they ought to be prosecuted.
MAHALIK: If they sold the gun to criminals and broke the law, we're on the record as supporting that.
SERWER: You're not impeding them in any way?
MAHALIK: No, we wouldn't. These lawsuits was brought for a political purpose, and those that we're trying to stop.
HORWITZ: OK, political purpose. I mean, you're talking about the sniper shooting. That's not a political purpose. MAHALIK: No, I'm not. I'm talking about the municipal lawsuits that have been filed since 1998. Somebody thought it was a good idea at the time to try and hurt the firearms industry, and they're racking up huge expenses, and people who have done nothing wrong are being blamed for things they didn't do, and that's wrong. That's un- American.
HORWITZ: OK. Let me just say something, In your bill that you want people to go look at, when you look at that bill, it will say municipal lawsuits, but it will also say individual lawsuits, and it will also say association of lawsuits, like the suit that's going to a jury today in New York in the NAACP versus AA Arms case.
MAHALIK: We're an association. We're (UNINTELLIGIBLE), yes.
HORWITZ: Now, let me tell you something. If you're serious what you're talking about, why don't you just say, I am going strike individual from that bill, OK? And then let's have a debate about whether the municipal lawsuits are worthwhile.
MAHALIK: There are major exceptions.
HORWITZ: I'm happy to have -- I am happy to have the debate about municipal lawsuits. But let's be honest here, that law says individuals.
MAHALIK: Let's be honest. The law covers anybody who misbehaves criminally. The law covers negligence. The law allows law suits to continue against defective products to the people who make them or sell them. That's what we're talking about here.
HORWITZ: Now, you are going to have to go back and read the law because...
MAHALIK: You know, there's a reason that the majority of in the House of Representatives passed this, and it's got 52 co-sponsors in the Senate. Because it's common sense, and everybody agrees that these are the kind of lawsuits that needed to be stopped, and the others can proceed. That's why it's so popular.
SERWER: Hang on. I think we have another question. It's hard to imagine, but go ahead.
LISOVICZ: Thank you, I felt like I needed to referee there.
UNKNOWN: We do. We need a referee.
LISOVICZ: It just seemed, you know, Joshua, that it was only a few years that gun control advocates really had the momentum. People like Sarah and Jim Brady, terrible incidents like Columbine. What happened? It seems like you no long have the momentum, why is that?
HORWITZ: Well, I think the 2000 election had a lot to do with that. And I think there's a vast misreading of the 2000 election, and I don't want to get into the Bush/Gore controversy, but I think in the aftermath of that, there was this discussion that Gore lost West Virginia because of guns.
And I just I read last night coming home from New York on the plane, were Karl Rove says, you know, the Democrats did way better than anybody suspected in 2000, and he didn't say, the gun lobby hurt Democrats in 2000, but the spin has been that's the case.
I think if you go back and analyze the data, you will find that in states like Michigan and Pennsylvania, which are strongholds for the gun lobby, you know, didn't really vote for gun candidates, they voted for gun control candidates.
But this has been misinformation, and I think that's been a dangerous read for the Democratic party and also for moderate Republicans.
SERWER: Gary, last word, very quickly. Five seconds.
MAHALIK: The National Association of Manufactures supports this bill. It's got widespread appeal that goes way beyond guns. It is all about people who make or manufactured goods having to protect themselves from junk law suits.
HORWITZ: Well, then let's...
SERWER: All right, I'm holding you to it. Gary Mahalik of the National Sport Shooting Foundation, thanks very much. Joshua Horwitz, executive director of the Coalition to Stop Gun Violence. I have a feeling you guys could go on for a long time, and we haven't even brought up knives or crossbows.
Still ahead on IN THE MONEY, taking the polls to the TV drama with "ER" scrubbed and ready for episode 200. We'll find out whether real reality is playing better than the fake stuff.
Plus, more green for Grasso. While the markets turned messy, the chairman of the NYSE cleaned up. We'll tell you what Dick Grasso is getting paid.
CAFFERTY: One of TV most critically acclaimed programs, besides IN THE MONEY, passed a milestone this week when "ER" broadcast its 200th episode. This fast paced, gritty, hospital drama has been a top ten's rating grabber since it debuted in 1994. It is also part of a wave of highly priced, highly rated, and critically acclaimed dramas that came on television in the early 1990s.
But it seems like that era may be on its way out. Shows like "ER," "The West Wing," "Law and Order" still do well on the ratings, but they cost a whole lot more to produce than your average, crummy, old reality show, which is cheap and makes all kinds of money for the folks who produce them, and that could be the Achilles heel for the higher priced, quality dramas we're talking about. Joining us to talk about TV's decision to go with cheap trash over cutting edge drama is Bob Thompson -- there's an intro, Robert! Bob Thompson is at Syracuse University. He is the director of that school's Center of Media Studies.
Gee, having a discussion of television opting for cheap trash, that could be a long -- that could be a long program.
ROBERT THOMPSON, SYRACUSE UNIVERSITY: We could be here all day.
CAFFERTY: That's right. What about shows like "ER"? They're quality. They do well. They have made money, but are they breathing their dying breath here?
THOMPSON: Well, they may be. I mean it's interesting. Or they may all have to go over to HBO. If you look only at the 10:00 time slot on NBC Thursday night, for the last 25 years or so, it tells a really interesting history. "Hill Street Blues" in 1981 starts in that time slot and really revolutionizes drama. All of a sudden, we don't have these cheesy shows like "Trapper John, M.D." and "Chips" anymore. We've got this really cinematic, really interesting show. That's replaced by "L.A. Law" and finally by this huge hit, "ER," which is better than anything that ever played during the old golden age of television.
The big question is now, is NBC going to be able to continue to draw audiences with this kind of high priced thing, or are they simply going to put another installment of "Fear Factor" on there to keep their audience.
SERWER: And Bob, you know, it's interesting you mentioned HBO because there is a move afoot in Congress to sort of separate the television channels, and you pay for what you want. So, in other words, if they are going to put the dramas on HBO, isn't that the way to go? And if you want the dramas, you buy them at HBO. They are better quality stuff anyway, "Sopranos," "Sex in the City," "Six Feet Under." I mean, if you -- and then the other stuff is going to be on the networks, right?
THOMPSON: Yes, I mean, it's true. The most exciting stuff going on television right now, as far as high quality, is going on in HBO. But let's remember, HBO learned it from the networks. When the networks were starting to do good shows like "Hill Street Blues" and "St Elsewhere" and "Thirty Something," HBO was doing things like "The Hitchhiker" and "First and Ten," which was essentially an excuse to show naked breasts in some lame, lame show.
The only sad thing about this is that it's going to get to the point, just like theater and other things, that you're going to actually have to be able to afford good television because it's not going to be coming over the air free any more at this rate.
LISOVICZ: Hey, Bob, this is a pivotal time for the TV industry, this dog and pony show, known in the industry, as the "up fronts" begins this week. I had the pleasure of attending a few of those. They pull out all the stops, especially the broadcast networks to seduce the advertising community to pay millions and millions of dollars for their commercial time.
But the cable networks are starting to eat the broadcast network's lunch. Even in prime-time. How well do you think they're going to do this year?
THOMPSON: Well, I think it's all inevitable. How well they do this year, gradually, of course, this whole landscape has got to change. One thing the cable networks can do is go directly at specifically targeted audiences.
However, when the one thing the networks still have, things like "American Idol," which now everybody is talking about, the old- fashioned notion of all of us gathering around and watching the same thing at the same time, and those shows are perfect for product placement. They now have these little videos with all of the stars in them of the show for Ford right in between the program. That's the model, I think, ultimately, in the age of TiVo and the rest of it that's going to prevail, and the networks still have a few tricks up their sleeves, in that case.
CAFFERTY: Bob, we're going have to leave it there. Part of the subject we didn't get into, of course, is syndication, which is a huge profit center for things like the sitcoms, does not lend itself necessarily to shows like "ER, but to be continued. We'll get you back on here, and we'll explore this some more sometime down the road.
THOMPSON: Look forward to it.
CAFFERTY: All right. Syracuse University director of Center of Media Studies.
Coming up, do you think top executives are earning too much money, wait until you hear what we are going to tell you. Next, we'll find out what New York Stock Exchange boss, Dick Grasso, has been earning, and it ain't chump change either.
Back in a minute.
CAFFERTY: You may have noticed the latest high-profile executive under fire for making big bucks, New York Stock Exchange chairman, Dick Grasso. You don't need an MBA to know that the Exchange suffered some big losses last year, but according to "The Wall Street Journal," Grasso raked in $10 million in salary last year. He's also set up with a pension that is said to be worth about $90 million.
The stock exchange says it won't comment on salaries, but in Grasso's defense, things have improved dramatically during his tenure there.
He took over in 1995. Since then, the market's total value has risen from $6 trillion to $9 trillion, and the daily trading volume is up to almost 1.5 billion shares from just 350 millions shares traded each day.
Nevertheless, because he is a high-profile guy, this a story that caused a lot of buzz this week. Susan Lisovicz works down at the stock exchange a good part of her time. What did you hear down there when this thing broke?
LISOVICZ: Well, you could just imagine. Executive compensation right now and transparency -- you've heard that word over -- has been a very hot issue. I heard every kind of comment, everything from, he deserves every penny because he has had a terrific performance.
And also at a very difficult time. He was a person who led the charge to reopen the New York Stock Exchange less than a week after the worst terrorist attack in U.S. history. He was a real leader at a time when we needed one.
On the other hand, one of the things the New York Stock Exchange does is work as a regulator, and this is the kind of -- this is the kind of salary association with big, for profit brokerages.
SERWER: It's strange that the NYSE is a strange animal, you guys.
LISOVICZ: Neither fish nor fowl.
SERWER: Yes, I don't think these guys have their act together. I find the organization evasive. I think they obfuscate. I don't think they're an open organization. I think it comes from the top.
You know, I'm a little critical of Dick Grasso. I just, you know, it's a lot money. It's not a good time, and I think it doesn't speak well.
CAFFERTY: OK, fair enough.
A lot of you sent e-mails to the program about last weekend's program, which, if you were watching carefully, you saw the same one twice. Hey, if it's good, you know, you can't run it too often.
On the topic of dividends and whether they should be taxed, Donald from Wisconsin wrote, "The president haters are wrong again. I'm a retiree with no pension. I live on Social Security and what I can make my investments do for me. A dividend tax cut will really help, but I guess I should forego that help because it might also help the hated rich."
On the overall tone of the program, Marie in Utah wrote, "When you do these money programs, you always talk of the level of well-paid folks. Suggestion: get a housekeeper and ask her what she would like to know about money, management, and taxation."
You can send us whatever your little old heart desires. We'll read them all, and we will respond to some. Those that we do not get to on the air, Susan Lisovicz will call you and make an arrangement to come by your house and discuss the issue with you, regardless of what it is.
The address is firstname.lastname@example.org. And we've got us, and we also have a producer with sort of a behavioral disorder. He intently reads each and every one of these and then writes back to everybody who writes to the program. So, if you're lonely, you know, people in prison and like that, his name is Jake, and you may want to strike up a little relationship on paper with the Jakester.
LISOVICZ: He also does comedy.
CAFFERTY: Yes. He does do comedy actually. That's it for this edition of IN THE MONEY. Our guest today, our good buddies as always, Andy Serwer, "Fortune" magazine, CNN's Susan Lisovicz.
Thanks for looking in. We will see you next week.
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