CNN IN THE MONEY
U.S. on High Alert; A Look at Illegal Immigration; Interview With Teenage Investor Chris Lahiji
Aired May 24, 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 IN THE MONEY. I'm Jack Cafferty.
Coming up on today's program, on an edge and on the move. Washington kicks the terror alert back up to orange as Americans take off for the Memorial Day weekend. See if the threat of attack is changing the way the country travels.
Plus dying to get in, literally. Immigrants built this country, and they will still risk their lives for a chance to come here. We will look at whether it's time to open the gate wider or close the borders.
And a teenager who most likely beat your fund manager badly. Chris Lahiji says his stock picks are up 75 percent so far this year. We are going to try to find out how he did that.
Joining me today as always, the brains of this operation, CNN correspondent, Susan Lisovicz, and "Fortune" magazine editor-at-large, Andy Serwer.
And it occurs to me, you two, that depending on how Annika Sorenstam did at the Colonial in Texas, we either have -- if she didn't make the cut, we welcome the usual number of views, maybe one or two more because they've learned what a fine program this is. If she made the cut and she's playing Saturday and Sunday down there, nobody is watching anything except that golf tournament and Annika.
SUSAN LISOVICZ, CNNfn CORRESPONDENT: Members of my family. I have an extended family.
CAFFERTY: It's a great story.
SERWER: You know, Annika-itis, I've kind of had it up to here. I'll be glad when it's over. I mean, Venus Williams is going to pitch for the Yankees next or something. I mean, you know, come on.
CAFFERTY: You are such a chauvinist.
SERWER: Hey, I'm not a chauvinist. I'm just tired of it being news. That's all.
CAFFERTY: Actually, I'm inclined to agree.
LISOVICZ: And the Colonial, the sponsors of the Colonial, are loving it.
CAFFERTY: It's all about the management, right? If she makes the cut, the TV ratings will go through the roof.
LISOVICZ: Who cares about the Colonial?
CAFFERTY: There you go. So, we'll move forward here. If this week's return to code orange isn't worrying you too much, well, we understand, and if it has you bouncing off the walls in fear, we understand that, too, because by now, a lot of us aren't sure exactly what we're supposed to feel when Washington raises the terror alert level.
So, we'll stick to what we know. Memorial Day weekend travelers are seeing tighter security again at places like airports, bridges, tunnels, and the AL-Jazeera Network has aired what is purportedly a new audio tape from Ayman al-Zawahiri, Osama bin Laden's second in command. This delightful little recording calls on Muslims to attack and kill embassies and their residents and other interests of four countries, including the United States. It's a lovable group, aren't they?
For more on the latest orange alert, we are joined from Washington by homeland security correspondent, Jeanne Meserve. Jeanne, it seems more than coincidental. The holiday weekend, the raise the terror alert level.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT (voice over): And they probably will keep it up through the holiday weekend. Probably the most dramatic evidence of the increase in the threat level, the placement of missile batteries around Washington, D.C. Combat airline patrols over the city were also stepped up. All over the country, airport security was escalated, and the FAA announced that flights would be banned over some sporting events, including the Indianapolis 500.
At the nation's borders, there were more inspections, and they were more thorough, and as a result at some points along the U.S.- Canada border at some times, commercial traffic experienced delays of several hours.
Officials did point out there was another factor here. Inspectors were on the lookout for Canadian beef, which has banned because of fears about mad cow disease.
MESERVE (on camera): In major cities, there were increased patrols of critical infrastructure like bridges and tunnels and subways, and authorities were also keeping an eye on big gatherings of people. Here in Washington, for instance. SWAT teams and snipers will be on hand for a Memorial Day concert at the U.S. Capitol. A lot of complaints, again, about how much all of this is costing. The Department of Homeland Security tried to blunt the criticism by pointing out that almost $4 billion is in the pipeline to help state and local governments defray homeland security costs, but California governor, Gray Davis, says even if all the money promised is delivered, it will only cover about 30 cents of every dollar expended on homeland security. So, you can guess how some localities dealing with the funding issue. They're simply doing less security. Back to you.
CAFFERTY: Jeanne, any indication of the kind of intelligence that the government got that led to the raising of this terror alert to orange?
MESERVE: They've cited a couple of things. One is just an increase in the overall intelligence chatter. Also, the result of interrogations with people that they have picked up recently. Also, we do know that there were some intercepted communications they have taken a look at. So, the whole matrix of stuff made them come to this conclusion.
I was told, however, that there was a very healthy debate amongst members of the Homeland Security Council about whether or not to do this. They went back over and over again to the analysts asking them for further clarification on that intelligence. They wanted to make sure that they're making the right step. In the end, I'm told there was consensus.
CAFFERTY: All right, CNN's Jeanne Meserve reporting from Washington. Thank you.
For a look at how tight security is affecting travel and how to cope, we're joined from Anaheim, California by Tom Nulty. Tom is a partner in The Corporate Solutions Group, which is a travel consultancy. He was a former airline executive for a good part of his career, and it's always a pleasure to get his input on these items.
What do I look for if I'm headed out this Memorial Day weekend flying some place in the country? How much more inconvenient is it likely to be, Tom?
TOM NULTY, TRAVEL CONSULTANT: You know, Jack, it's more inconvenient for people, but I think if you plan ahead and you'll be able to deal with it with no problem. What you're going to find is that actually just getting the airport itself is going to be a little more difficult.
There are going to be random checks going on at entrances to parking lots and at entrances to the airports. And, once you get there, you are going to find that the curbside check-in will probably have been moved inside the terminal. You'll find that things are just going to take a little bit longer, but if you give yourself a little bit of extra time, you're really not going to have a problem.
SERWER: Tom, let me ask you a question. I mean, obviously, we have to get to the airport a little bit earlier, but should we change our behavior? There's some talk of not going to big sporting events, but that's really what this country is all about, what the holiday weekend is all about. I mean, come on. Can we got go to sporting events and big picnics, parades, to urban areas?
NULTY: Absolutely not. We should continue to behave as normal. We'd be foolish to change our life style. Obviously, that's what they're going to try to get us to do, and we'd be foolish to do that.
I think, obviously, being more alert is critically important ,and as you go through an airport, trust me, there are a lot of people looking out for your safety as you go through there. You just need to be a little more relaxed yourself as you go through and not let the additional inconvenience bother you.
LISOVICZ: You know, Tom, the government is always telling us that we should not change our life style because, otherwise, the terrorists win, but so much changed. I work at the New York Stock Exchange. Starting this week, I have to have my finger -- I'm getting fingerprinted, as is every single person who works there. Not only the employees and reporters, but contractors who come and go regularly.
Also at Penn Station, for instance, this weeks trains were disrupted because there was another bomb scare. Things aren't normal, so how do you get your mind wrapped around that when things have changed dramatically?
NULTY: Let me get your mind in gear that not being normal is normal. And I that is the new normal. The new normal is that there are going to be inconveniences from time to time that you don't expect. But obviously, all of these things are really geared around your safety.
But you shouldn't try to change your total life style as a result of it, but you shouldn't be overly upset when something happens that might slow you down a little bit, and that's the just the new normal.
CAFFERTY: Tom, I made reference to the fact that you spend about half of your professional career as an airline executive in the introduction. The airlines are barely breathing these days. When they raise the terror alert like this on the eve of a holiday weekend, it only delivers another blow to the solar plexus of an already perhaps dying industry.
What's going to happen to the airlines? Where are we going? What's the air travel industry going to look like in five or ten years if things don't change in some dramatic way?
NULTY: Well, the airlines are going to change over the next 5 to 10 years. They are going to change drastically. It's becoming more of a commodity, Jack, than it has been in the past. Some of the service-level items that you have come to know and love over the past few years will probably start disappearing, and it will be basic transportation.
CAFFERTY: Are talking about the great airline food, Tom? NULTY: Great airline food. Once upon a time, Jack, it actually was pretty good.
CAFFERTY: I'm old enough to remember when it was edible. I understand.
NULTY: But it's -- I mean, you know, this week American Airlines announced that they're going to put seats back in so the extra leg room they talked about in their commercials over the last two years, that is going away.
It's going to be a basic commodity in many cases, but it's going to be still safe, and it's, hopefully, going to become more efficient over time, but it's going to get right down to transportation itself and not the perks that we've enjoyed in the past.
LISOVICZ: So, let's stay with airlines for a minute, Tom, because Memorial Day marks the unofficial start to the summer holiday, the travel season, a time traditionally when a lot of Americans would go overseas.
Now, I know that you say airline travel is safe. On the other hand, would you advise people to go to Europe? To Asia?
NULTY: Well, I guess one of the best ways to answer the question is to tell you that I'm going to be taking my family to Europe this summer, and I think it's a great opportunity because I don't think people are going to be. Those people that do decide to go to Europe are going to find some incredible bargains over there, and they are going to find that they're received fairly well because there aren't going to be as many tourists as there have been in the past, so those that do go, I think, are going to be treated like gold by those people that are involved in the tourism business.
As far as traveling to the Orient and those areas where SARS has been prevalent, I think you are going to see very little travel going there. and I really wouldn't recommend that until we're 100 percent certain that's under control.
But certainly, other areas of the Pacific are certainly places that you should continue to visit. And I do think you should probably feel fairly safe in doing those things. Obviously you want to stay away from the Middle East at this point. That's clearly not a good place to be.
CAFFERTY: Makes good sense. Tom, appreciate it very much for being on the program with us today. Thank you for your perspective on these issues. You are a man who knows of what he speaks, having been in the business for a good long while. Thanks for joining us.
NULTY: Great to be here.
CAFFERTY: All right. Tom Nulty, partner in The Corporate Solutions Group.
Still ahead on IN THE MONEY as we continue, going nowhere. Israel and the Palestinians may have a road map to peace, but so far they can't get out of the parking lot. We'll find out what it might take to get the process back on track.
Plus American dreams. People are from other countries still willing to die to come to the United States, literally. We'll have a debate on whether immigrants are helping to drive the U.S. economy or holding it back.
And if just thinking about immigration makes your pulse race, write us and tell us what's on your mind. We are checking your e- mails about the stories on this program. Write us at email@example.com. Back after this.
CAFFERTY: The White House may have handed out its road map for peace in the Middle East, but so far the two sides can't even make it to the onramp. A string of suicide bomb attacks have put any peace moves on hold.
Earlier this week, Israeli Prime Minister, Ariel Sharon, postponed a trip to Washington. He was scheduled to meet with President Bush to talk about plans for peace in the Middle East.
Also this week, the President called the new Palestinian Prime Minister, Mahmoud Abbas, asking him to bring terror groups under control. Mr. Abbas has promised to accept the road map in spite of reservations about it. Mr. Sharon wants changes in the plan.
So where are we going, if anywhere? For a look at the hazards on the road to peace in the Middle East and how long a road it may be and what's needed to get the two sides together, we're joined now by Crispin Hawes, he's director of the Middle East Practice of the Eurasia Group, a consulting firm that focuses on politics and business in the world's emerging markets.
And Crispin, it's nice to have you with us. We have a series of suicide bombings since the road map was announced. All of sudden, there are people out there ready to just throw up their hands and say, well, this isn't going to work, we can't get there, look at what's going on.
President Bush said over and over this week he's determined to try to make some progress. Is it a futile exercise that Washington's engaged in here, and if so, what needs to, you know, happen in order to break the log jam over there?
CRISPIN HAWES, DIRECTOR, THE MIDDLE EAST PRACTICE OF THE EURASIA GROUP: I'm afraid that over the next few months, it probably will prove to be futile. It all depends on what the White House is actually trying to do right now. The timetable for the road map is, I would say, hopelessly optimistic. I mean, it talks about the end of Palestinian violence by the end of this month, a Palestinian state within a year. I think these things are not rational expectations.
CAFFERTY: Why is it optimistic to suggest that the time to end the violence is right now?
HAWES: I think it's over optimistic to expect it to happen simply because the people that are responsible for the violence are not the people engaged in negotiations. Clearly people like Abu Mazen are involved and willing to be involved in negotiations.
The groups responsible for the suicide attacks, Hamas, not only do not take part in the negotiations, the don't even take part in the Palestinian authority.
CAFFERTY: All right, that's a point well taken, but if they're not going to stop the violence now, what makes you think that it's possible to stop the violence a month or two or three or six months from now?
HAWES: I didn't think it is possible to stop it that far ahead. I think, to be honest, that it may be -- it may take a generational change on both sides for the populations on both sides to see the opposition's leader, if you like, this being a trustworthy partner in negotiations.
Israelis clearly feel that Arafat is simply not someone that can be trusted, not someone that can be worked with, and to be honest, the majority of Palestinians feel munch the same about Sharon. So, it may be that, unfortunately, this sort of cycle of violence and violent retribution will continue until really a new leadership takes place -- takes its place on both sides.
LISOVICZ: You know, Crispin, it seems like, unfortunately, we have seen this pattern emerge a time and time again, where you're very close to some sort of important peace talks, and then you have this wave of horrible suicide bombings. And, Israel breaks off the talks, tightens up on the Palestinians, and nothing happens.
Do you think that Israel really is obligated to continue talking even after these horrible attacks?
HAWES: Depends -- I mean, the violence is unfortunately a fact of life in Israel and in the West Bank and Gaza. A solution to the violence won't come from simply ignoring it, and the reality of the situation from the majority of the Palestinian population is they live in what most people would term unacceptable environments, as well. You know, the suicide bombings are horrific. And, but at the same time, large numbers of Palestinians have been killed over the last, particularly of the last two to three years.
So, I think if a solution is really desired by both sides, then both sides have to continue to talk. Clearly, more can be done by the Palestinians, and probably with Israeli help, to control the most extreme groups, and you probably have to accept that there's a small portion of the Palestinian population that doesn't want to have peace with Israel. There's probably a small portion of the Israeli population that doesn't want to have peace with the Palestinians and would see the West Bank and Gaza as being an essential part of the land of Israel. SERWER: Crispin, I want to pick up on a couple of points you made because I thought they were really good one. I mean, you talk about generational change. I believe, too, that Ariel Sharon and Yasser Arafat, it's very possible they are unable to make peace. You will need new leaders to do that, which is kind of a depressing thought, quite frankly.
The other thing you mentioned also was parties not involved in the negotiations, what about that? Should Hamas be a part of the negotiations? I mean, that's almost unthinkable, but maybe that should be done, and what about other parties like that?
HAWES: Well, you're right. I mean, you don't negotiate with your friends. You don't make peace with your friends, you make peace with the enemies, and for a very long time, the PLO were refusing to accept Israel's existence. Israel would treat it as a sort of act of faith even. When this peace process began in 1991, they would not negotiate with the PLO.
The Madrid Conference 1991 had no official representation PLO at the main conference. They were sitting in a room next door, but the Israeli government had said time and time again they would not deal with the PLO.
Ultimately, in the same way that the British government has said it would not deal with the IRA, and obviously it is dealing with the IRA. In time, you have made peace with the enemies, not with your friends.
Now Hamas, whether Hamas can be encouraged in the short term actually to take a part in that process is a different question. And I think, again, you will probably find more and less radical wings of even that organization. Some of it would feel that the job could be very effectively from within the Palestinian authority, and others that feel that there is no room for compromise.
LISOVICZ: Crispin, very quickly, the road map is a three-year plan. Yes or no because we have to wrap this. Will there be a Palestinian state in three years?
HAWES: I don't think so.
LISOVICZ: We'll have to leave it on that grim forecast. Crispin Hawes, director of the Middle East Practice of the Eurasia Group, thank you for joining us.
HAWES: Thank you.
CAFFERTY: Up next on IN THE MONEY, heading the huddled masses off at the passes. Would be immigrants will risk everything for a chance of life in America. Find out whether they are the country's economic powerhouse or a drain on your money.
Plus hothouses. With people across the U.S. fixing up their homes for summer this weekend, we will see how Home Depot investors are doing. (COMMERCIAL BREAK)
CAFFERTY: If you're watching this program this afternoon, there's a pretty good chance you're putting off some home improvement project. But that's OK. We prefer that you keep watching the program and let that other stuff go.
Memorial Day weekend is traditionally a starting point for the do it yourself season, and just in time, our stock of the week, Home Depot, announced this week that its sales are on the rise. But is that enough to make Home Depot a good investment right now? And, our panel is going to weigh in on that. You know, if you bought a few shares of this a few years ago, none of us would be sitting here because it's been one of the most successful public offerings ever.
But do you buy the shares now? Is this a good time to buy it?
LISOVICZ: Home Depot is the Coke between Coke and Pepsi. Lowe's is the Pepsi, but it has been coming on strong. And it has really been taking away market share where they both compete. Why? Because they really are appealing to women, and women are really getting into that home improvement phase.
CAFFERTY: Do you hang out at that Home Depot in your neighborhood, Susan?
LISOVICZ: I'm a new homeowner.
CAFFERTY: So, you do, right?
LISOVICZ: I'm no Bob Villa, but I do.
CAFFERTY: But you're getting there. OK.
SERWER: Lowe's was a juggernaut -- I mean, Home Depot was a juggernaut. Lowe's is the new juggernaut, and you're absolutely right, Susan. This is one of the great success stories, great stocks of the past 30 years, but it definitely has hit the wall at $60 bucks in 2000. Went down to 20. It has now perked back up a little bit. A lot of people are saying don't bet the farm on Lowe's eating Home Depot's lunch because Home Depot has still got a lot of stuff there. $58 billion in sales, and number 13 on the fortune 500.
CAFFERTY: How do they continue to grow the business from here?
SERWER: Well, there's a lot of room. This is what they say about a lot of these companies, like Wal-Mart, that it's saturated. I mean, there's tons of room. First of all, they can beat up Lowe's and throw them out. There's a lot of regional guys around, as well.
CAFFERTY: So, there's still room.
LISOVICZ: And that's one of the things they're doing, in fact, they are taking a lesson from number two, from Lowe's. They are fixing up the stores, making them for attractive and less intimidating to women. They want those female customers, not just contractors. They want, you know, civilians like myself.
CAFFERTY: What's the key to getting women to frequent a home improvement place like a Home Depot or a Lowe's?
CAFFERTY: Yes. Susan?
LISOVICZ: I'm not intimidated when I go in there because I ask right away.
CAFFERTY: There are people to help, so, I mean, you shouldn't be intimidated.
LISOVICZ: But that's one of the can complaints is that Lowe's is more service friendly, but the fact is that we have a marketplace right now where people investing in their homes. So, they're just in a good position, and Home Depot said over the years, we're recession proof.
SERWER: Yes, they have the winds at their backs, but, you know, that's not going to last forever. Service is the key in this business, Jack.
CAFFERTY: Buy the stock, yes, no?
SERWER: I would say no.
CAFFERTY: OK. Susan?
LISOVICZ: I'm going to refrain because I cover them both.
CAFFERTY: All right, fair enough.
Still ahead on IN THE MONEY as we continue, no trespassing. The United States fighting to keep illegal immigrants out when it seems like half the world wants in. We'll host a debate on immigration and whether the United States economy needs more of it or less.
And the Los Angeles teenager who thinks he's got Wall Street's number. He says his stock picks are up more than 70 percent since November. We'll find out how Chris Lahiji spots a hot prospect. Stay with us.
CAFFERTY: Give me your tired, your poor, well, on second thought, maybe not. America likes to think of itself as a nation of immigrants. We are, you know. Hard work can lead to a lot of prosperity in this country of ours. Take a look at the statue of liberty. It's basically a 150' high welcome sign for newcomers coming here from elsewhere, but the statue isn't the whole story.
Getting over the U.S. border isn't easy these days, and plenty of people still are risking their lives trying to do it. Nineteen would- be immigrants died earlier this month in Texas trapped inside an airtight tractor trailer in the smuggling operation gone wrong.
Also this month, U.S. officials intercepted a number of Cubans who tried to reach Florida by sea. Cubans who make it to land from the sea usually allows to stay here. If they are caught at sea, they are generally sent back to Cuba.
Many Americans think that immigrant energy and determination help this country prosper. Others, though, particularly since September 11, think that immigrants are a risk and that they take jobs away from U.S. citizens and, thus, drag the economy down. We are going to hear from both sides on this issue now.
Joining us from Washington is Stephen Moore, president of the Club for Political Growth, a political advocacy group in favor of continued immigration in the United States. And from San Francisco, Yeh Ling-ling, executive director of the Diversity Alliance for a Sustainable America, a group that wants to limit immigration.
Ling-ling, let me start with you. You're an immigrant? What do you got against other immigrants coming here?
YEH LING-LING, EXECUTIVE DIRECTOR, THE DIVERSITY ALLIANCE FOR A SUSTAINABLE AMERICA: Well, I have nothing against immigrants, and I would like to stress that many immigrants have many good qualities, that immigration is not causing Americans problems. But rapid population increases, driven essentially by high levels of legal immigration and illegal immigration, are exacerbating many problems that affect all of us, legal immigrants and U.S.-born Americans.
If we're serious about addressing problems concerning all of us, homeland security, high unemployment, budget deficits, congestion, urban sprawl. Now many regions also are going to face very soon water shortages. These problems, again, are exacerbated by continued high immigration. So for the sake of all of us, legal immigrants and U.S.-born Americans, and for the sake of educating existing legal immigrants, U.S.-born Americans, let's have some sort of timeout from mass immigration, mass control of our borders.
CAFFERTY: All right.
YEH: ... so that we can better address our problems.
CAFFERTY: Stephen Moore, president of The Club for Growth. What's wrong with that idea?
STEPHEN MOORE, PRESIDENT, THE CLUB FOR GROWTH: Well, I'm surprised she didn't blame mad cow disease on immigrants. You know, I think that's absurd to blame all of these problems in American on immigrants. In fact, as you correctly pointed out at the beginning of this segment, this country really was built on the backs of Yankee ingenuity and immigrant geniusness and hard work.
And I think we're getting those kinds of quality immigrants today. I do think we need to do a better job of securing our border to make sure that we are getting the desirable immigrants in, not the undesirable immigrants. And so, that means probably putting more border security at the main ports of entry, but I think we should retain our heritage as a country of immigrants, especially because if you look at the U.S. population, actually our population is very stable, and it's growing older, and I think one of the benefit that we have over other industrialized countries is that we are getting these young immigrant worker who is are stopping the graying of America.
SERWER: Ms. Ling-ling, I mean -- let me jump in and ask you, though, how is it possible that immigrants are responsible for some of the woes that you cited, number one? And number two, isn't this just part of the great American tradition? And number three, isn't immigrant levels pretty low -- aren't those levels pretty low right now?
YEH: No, actually, no, no.
SERWER: I don't know about that.
YEH: Legal immigration, the last, let's say, 10 years, on the average, we have had about a million legal immigrants coming in a year, and in terms of illegal immigrants, it has been estimated to be somewhere between 400,000 to 800,000 a year.
SERWER: But how does that compare to the population overall? I mean, you can't just throw out a number like that. It has to be relative to the people living here. Obviously, there are more people coming in the United States now than there were a hundred years ago.
YEH: Yes and no. for instance, you look at immigration-related growth. It's about 2 million a year, and we are growing about actually more than 3 million a year. What happened is -- it's very important. Let me give you an example to show why I'm trying to say -- the point we're trying to make.
America now is resembled to our parents was overwhelmed by so many problems. Let's say a parent who just lost a house after a major earthquake. He is overwhelmed by all sort of problems he has to deal with. The last thing this parent wants to do is to have more children of his own or adopt more children. Because we're not saying those children are causing the problems, we're saying those new babies are going to take away his energy, resources, and leave him with fewer and less energy resources to address his problems.
SERWER: Wait. It doesn't have anything to do with the energy situation at all.
YEH: Look at homeland security. Look at homeland security.
SERWER: Homeland security doesn't have anything to do with that.
YEH: Yes, absolutely. If we continue to allow some 500,000 to 800,000 illegals, immigrant entering the U.S., and large quantities of drugs to be smuggled into the U.S., why not terrorists? Or Anthrax?
SERWER: What do immigrants have to do what with drugs?
YEH: Well, I'm saying that if we allow large quantity of anthrax and terrorists and illegals to enter the U.S., so can terrorists.
Now, Senator Jon Kyl of Arizona recently said, he expressed concern that terrorists could use some borders to enter the U.S. Now, also, as you know, our homeland security -- I mean, the law enforcement agencies are overwhelmed. And they don't even have the resources to...
CAFFERTY: All right, but that's a different issue, Ling-ling. I'm going to interrupt here.
YEH: It's the same issue.
CAFFERTY: No, it's not the same issue, and I'm going to interrupt you because it's a debate that involves two people, and I want to give the other side a chance to answer some of the things you're saying because that's my job as the host of the program.
So, we are going to stop and go to the other guest and let him address some of these points now.
MOORE: Well, thank you. First of all, I think this sort of an assault against the patriotism of immigrants is absurd. If you look at many of the firefighters who went into the World Trade Centers, and the policeman, they were immigrants. If you look at the people who were winning the Congressional Medal of Honors and people who helped fight the war in Iraq to depose this terrible leader, those were immigrants.
So, immigrants are making enormous contributions. Out in California, for example, Silicon Valley, all these high-technology industries are so dependent on the brain power of the bright and best that we are bringing over from the rest of the world, and all I can say is thank God that we weren't listening to people like this 50 or 100 years ago, or I wouldn't be here because my grandfather is an immigrant from Ireland.
LISOVICZ: And my grandfather, as well, is an immigrant.
MOORE: But people have been saying keep out the immigrants for 200 years. What you're saying is nothing new. I mean, from the time the Mayflower landed here, people said keep out the immigrants, and thank goodness people didn't listen.
LISOVICZ: OK, well, let's progress to this -- excuse me. Let's progress to the Twenty-first Century. The fact is we have an economy teetering on recession yet again. The nation's unemployment, six percent. A lot of people hungry for jobs or underemployed. Let's be realistic about this. There's plenty of jobs that Americans, even unemployed Americans, would not take. Can both of you address that issue?
YEH: Well, that's simply not true. If you look at the GAO report that came out in about 1979, they studied the low end jobs in the hotel industry (UNINTELLIGIBLE). It found that those jobs used to be held mostly by native, poor unionized workers. Now, immigrants are taking over the unionized. If you look at the same jobs in areas that have low levels immigration, these jobs still held by native poor, native poor blacks and native poor whites. It's not true that Americans don't want these jobs. Besides, we have millions...
MOORE: Well, it's certainly true on agriculture. Agriculture, that work has been done for 100 years by immigrant laborers. If you look at the United States over the last 10 years, we have let a lot of immigrants into this country, and you know what? We have let more immigrants in than all the other industrialized world, and yet we have the lowest unemployment rate of these other countries, so why do we have a low unemployment rate, and these other countries have higher unemployment rates, and they don't let immigrants in?
LISOVICZ: Is part of the problem here that we disagree on the statistics? The U.S. population overall, 284 million people, give or take. What I have for the latest figures I could come up with, 7 million illegal aliens. Is that just off the chart?
YEH: The estimate has been 8 to 11 million. Again, we have millions of Americans illegal immigrants who are low skilled, also professionals, who are unemployed.
MOORE: Why not let those workers come in legally? We should have a guest worker program for a lot of these agriculture workers who want to come here.
MOORE: Why? Let them come in lawfully. You said the problem is illegal immigration.
YEH: If you look at the foreign owners and most western European countries, they use machines to harvest. Why can't American farmers...
MOORE: Because we have a much more productive agriculture system than Europe does.
YEH: ... expense of American taxpayers. We have to pay taxes to support infrastructure...
SERWER: This sounds like the lady from San Francisco has come into this country and gotten a job and now doesn't want people to come in, you know, following her. I mean, but that's something that all of us and the families have had. We've all come here, and I can't understand how anyone can't understand that point, that this is a nation of immigrants, isn't it, Susan?
YEH: I understand we are a nation of immigrants, and most of us immigrants -- I'm an immigrant. I have done immigration work for 10 years helping people immigrate to the U.S. But ask yourself if we accept now, over 30 million Americans, including many existing legal immigrants who still live in poverty, who are unemployed -- why don't we give those legal immigrants and those Americans, regardless of the racial backgrounds, give them first...
LISOVICZ: Stephen Moore, this is it. Final words from you.
MOORE: Immigrants create jobs. They don't just take jobs. They create jobs from either businesses the start. They create jobs.
LISOVICZ: No, that's it. I'm afraid we have to cut it there. A very impassioned debate from both of you, and we appreciate Stephen Moore, president, Club for Growth, and Yeh Ling-ling, executive director of the Diversity Alliance for a Sustainable American. As you both noted, this is a debate that's been going on for centuries.
Coming up, the teenage stock picker who says he's giving the old guys a run for their money. We'll speak with Chris Lahiji.
And if you want sound off about the stock market or anything else you have seen on today's impassioned program, send us an e-mail. The address firstname.lastname@example.org.
CAFFERTY: I'm exhausted.
SERWER: While the fat cats that manage your mutual fund were out working on their golf game, a kid from L.A. says he was putting together a high performance stock package. Chris Lahiji says he reads the annuals report of every publicly traded company in America. All 12,000 of them? Then he assembled his Lahiji Tiny Fund last November, focusing on small companies that don't get much publicity. Since that time, L says that his fund has climbed 75 percent. He joins us live from Los Angeles to tell us what he's doing right. Chris, welcome. You read all 12,000 annual reports?
CHRIS LAHIJI, YOUNG INVESTOR: Absolutely.
SERWER: All right. Listen. We're going to put you to the test then. Here I've got GE's 2000 annual report. Page 88. Note 10. Aircraft engine receivables. How much did GE have?
CAFFERTY: Well, that's not fair. You can't do that.
SERWER: All right. We'll do an easier one. Safeway's annual report. This is easy. 2003. How many stores did they have?
LAHIJI: I would say Safeway has well over a thousand stores. They are one of the largest supermarket chains in the country.
SERWER: Very good. Very good. They have 1,695 stores, Chris. Not bad at all. Maybe over 1,500. Let me ask you one more question here, though, and that is, you say your fund up 75 percent. Are your numbers audited? How do we know you're telling the truth?
LAHIJI: Well, everything is actually copyrighted. On November 2002, I selected 150 companies that I recommended. I thought they were either undervalued or condoned.
SERWER: No, no, no, no. I asked you if your numbers, your results, were audited.
LAHIJI: Oh, yes.
SERWER: Do we know your numbers are verified? What auditing firm audited your numbers?
LAHIJI: Oh, well, you know, there is really no auditing firm, but, I mean, it was on the basis -- it was on by web site, lahiji.com, since the inception, and since that time, over 15,000 people looked at the picks, and they are there to verify.
LISOVICZ: Chris, I noticed a lot of your stock picks had a lots of letters in them, which means that they either trade on the NASDAQ, or they are over the counter. They are small stocks. They come with a lot of risk typically. They don't have the track record of the blue chip companies or the companies that are listed on the S & P 500. Basically, you're advising investors to take a lot of risk. Is that what you really want to do?
LAHIJI: No. I don't think I'm advising by investors to take a lot risk because I don't take risks. I'm actually one of the most cynical people when it comes to investing in the stock market because everything I take in I'm assuming is a lie. Out of every 1,000-1,500- 2,000 companies, I only buy one or two with my own money and actually recommend them.
If you look at the top 30 companies performing, an average of 110 percent gain would be yours since November 1st.
CAFFERTY: What are one or two of your favorite picks, your biggest success stories, Chris?
LAHIJI: My biggest success story, by far and away, is (UNINTELLIGIBLE). I picked it. REDF on the NASDAQ at $.25. It's basically the same thing Yahoo is here in India. And since that time, it was as high as $8 a share, or about a 200 million market cap from the 6 million market cap that I recommended. Once again, this is verified.
And that's exactly what's generated so much publicity to begin with. Another company that has gone up a lot is Metrolologic, which is up over 500 percent. And that's another success story.
CAFFERTY: All right. Sounds like you're doing all right to me. Chris Lahiji of the Lahiji Tiny Fund. Appreciate you joining us on IN THE MONEY continued good luck, and send Andy a stock tip or two, will you?
When we come back, one of the world's richest man in America says the administration's tax plan would make him even richer, and he's not happy about it either. Warren buffet sounding off on the President's tax cut proposal, particularly the elimination of tax on dividends. We'll tell you what he said right after we play some bills our own selves. Don't go away.
CAFFERTY: The world's most respected and one of the most successful investors probably not too popular around the White House these days. This week, Berkshire Hathaway chief, Warren Buffett, spoke out against President Bush's stock dividend tax cut plan. In a "Washington Post" editorial, Buffett said the plan will simply help the rich get richer and will not boost the economy. Buffett even called the tax cut proposal voodoo economics. Where have we heard that before? Was it David Stockman?
By the way, Buffett says if the plan were passed, he would make additional $310 million next year, all of it tax free. So, is he right or not?
SERWER: I think he's right. I think he's absolutely right. You know, the thing is this dividends just go to the -- the bulk of it would just go to wealthy people like Buffett. He showed this thing how he would make $300 million. His tax rate would go to three percent.
I wonder why we can't have a situation where a certain amount of dividends is tax free, say like $10,000 or $20,000. That way it would benefit lower income people and seniors, and the rich doesn't make out like bandits.
LISOVICZ: Well, I mean, you just have to put the big thumbs up to any billionaire who talks about the unfairness of the tax rate between him and his receptionist. I bet he's very popular in his office.
SERWER: And the other thing about it is he said that this plan would create all kinds of gimmicks on Wall Street. You have to agree with that. In other words, you have a plan where it's a 15 percent rate for three years. So, what would happen is companies would pay huge dividends during those years, not pay any dividends other years, and someone on Wall Street would come out with some kind of certificate or stock that would benefit from this, and then everyone would go bankrupt buying it. I mean, you know what's going to happen.
CAFFERTY: Well, this whole thing is a gimmick, isn't it? I mean, the Congress agreed to phase in the dividend tax cut but only up to, what is it, three or four years/ Then the thing goes away unless Congress votes to keep it in place. I mean, the whole thing is kind of...
SERWER: The political pressure will make it so that they'll have to keep extending it after that. So, I just think that -- I want to know what people think about my plan.
CAFFERTY: I like your plan. You know, if you ever run for office, I'll vote for you.
SERWER: You will vote for me?
CAFFERTY: Absolutely. You know, Bill Gates -- the minute they started to talk about this, Microsoft declared a dividend, and Bill Gates said, if, you know, if this thing passes, I make another 90 million next year.
LISOVICZ: He also gives a lot of it away though.
CAFFERTY: No, I understand. I'm not passing judgment. I'm just saying that, you know, there's a reason he's Bill Gates and we're not. I mean, he was on this thing in a heartbeat.
SERWER: Buffett doesn't pay any, of course, any dividends. That was a hypothetical.
LISOVICZ: And he's been long against them.
CAFFERTY: All right. On to the mail bag. Every week we ask you to write in with ideas, comments, story ideas. A lot of you weighed in on our story about the relationship between the United States and Saudi Arabia. Ron in Cleveland wrote, "Could it be that one of the reasons we've been afraid to hold the Saudis feet to the fire is because they're the only ones who can now afford to finance the national debt through the purchase of U.S. Treasury bonds? I guess it wouldn't be prudent to chastise the owners of the keys to our kingdom."
Many of you sounded off on the Illinois high school hazing incident. Lee in Key West wrote, "What's the difference between a gang of Chicano girls in East L.A. and a group of rich, white girls in a Chicago suburb? A rich daddy who can hire an expensive lawyer to whitewash the bad news. A gang is a gang."
And on rebuilding Iraq, Robbie from Texas wrote to suggest that America should keep its foreign aid closer to home. "What would happen if American wee to help Mexico get it's own solid industry base? By doing so, those seeking to support their families would want to say in Mexico for jobs closer to home. In the long run, Mexicans would be a new group of people with a decent income to sell our products and services to. Meanwhile, the number of illegal aliens coming in to America would fall.
If you would like to get in on this fun, you can e-mail us, as well. Drop us a note at email@example.com, and we may read your missive on the air or not.
That is all for this Saturday edition of IN THE MONEY. My thanks to my partners here, as always, Susan Lisovicz, financial correspondent for CNN, and Andy Serwer, editor-at-large at "Fortune" magazine.
And Annika Sorenstam, if you missed the cut, thank you, too, for allowing our viewers to visit with us. If you made the cut, you go girl! And I'll be watching tomorrow to see if you can win the whole thing.
Join us at 3:00 Eastern time tomorrow. We'll take a closer look at reports that senior Al Qaeda leaders may now be hiding in Iran, even as the U.S. explores the possibility of reestablishing ties with that country. Again, that's the Sunday edition of IN THE MONEY, 3:00 tomorrow afternoon. Enjoy the rest of your day. Thanks.
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Interview With Teenage Investor Chris Lahiji>