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CNN IN THE MONEY
Interview With Secretary Of Homeland Security, Tom Ridge; Better Economy Means Tougher Road For Democrats To White House; Unemployment Highest Amoung 16-24 Year Olds
Aired November 9, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From New York City, America's financial capital, this is IN THE MONEY.
JACK CAFFERTY, HOST: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY: Spreading the wealth a little too thin: The government handing out cash to fight terrorism, but some say the most obvious targets are getting shortchanged. We will talk with the secretary of Homeland Security, Tom Ridge, a bit later.
And, cursing the sunshine: The better the economy looks, the tougher it gets for the democrats to unseat President Bush. See what that means for their campaign strategy with the election one year away, now.
And, count yourself lucky if you're 16 to 24 and have a job of any kind. With unemployment highest among the young and college costs rising, the prospects for the next generation don't look so good. We'll talk to an expert about what can be done.
Joining me today, as always, "Fortune" magazine editor at large Andy Serwer, and sitting in for Susan Lisovicz, Marion Asnes, who's senior editor at "Money" magazine.
MARION ASNES, "MONEY" MAGAZINE: Hi there.
CAFFERTY: There are a lot of important stories in the world. I don't know that the lawsuit against Rosie O'Donnell is one of them, but boy is it getting covered. And maybe one of the reasons is her image as the nice person she was on that talk show is getting an awful thrashing in that courtroom, where she's being portrayed as a control freak who likes to scream at people, saying to, supposedly, a breast cancer survivor, "you're lying and you know what happens to people who lie, they get cancer." And, then she runs out into the street to do interviews at the conclusion of the day's testimony with her press person attached to her, and they do these little interviews, trying to, I guess, paper over some of the image problems she's incurring with all of this.
SERWER: Well, Rosie's -- I mean, Rosie's a great American, Jack. You need to get on the bandwagon, here. If you're not for Rosie, you're for Gruner & Jahr. And, I never thought of you as a Gruner & Jahr kind of guy. Here's a woman who's bankrolling Boy George, she's going out on a limb, here. I think she was a big Donnie Osmond fan. She's doing things for the economy, or at least she was. When she had a show, she had jobs. I'm scrambling here a little bit, trying to find things.
CAFFERTY: You're doing a great job, though.
SERWER: Marion, take it away.
ASNES: Look, all I can say is anybody who spent that much time in her basement on crafts, I'm sorry I know their going...
SERWER: On what?
ASNES: On crafts. With Mod Podge. I mean, have you ever heard of such a thing? And I know that I'm probably getting in trouble with all the crafties out there, but I'm sorry, you do that stuff when you are really, really, really tense. I know this, because that's when I knit.
CAFFERTY: Well, I'm glad you don't have your needles with you.
CAFFERTY: All right. After the September 11th terror attacks on the United States, this country vowed never again to be caught unprepared, and that resolve eventually led to the creation of the new department of Homeland Security. Now, that the agency's beginning to distribute money, a lot of U.S. cities and states are crying foul over who gets what. For example, the tiny island of American Samoa is getting 20 times the cash per capita than New York state receives, and yet the likelihood of Samoa being a terror target is probably not nearly as great as the likelihood of New York being a target.
For a look at the department's $2.2 billion program, department of Homeland Security secretary, Tom Ridge, joins us now from Washington.
Mr. Secretary, it's a delight to have you on the program.
TOM RIDGE, SECRETARY, DEPARTMENT OF HOMELAND SECURITY: Nice to be back to join you. Thank you.
CAFFERTY: What about this per capita expenditure? One, how was the formula arrived at? And two, if all we agree that it's probably not the best way to distribute the money, why hasn't the formula been changed?
RIDGE: Well actually, congress has come up with a rather unique approach to toward distributing these dollars to both the state and local government. There is a formula that drives a certain amount, a percentage out to every state and territory, and there is some complaints associated with that, but I think that's -- be very difficult to overturn that. It needs a congressional action to do that. But frankly, they've also come up with an urban security initiative and directed the department to take a look at communities and cities, take a look at the population, take a look at the infrastructure, take a look at the threat information and distribute those dollars, as well. So, we have a combination of both. Every city and every state gets for distribution X percentage and then for targeted cities, based on population and threat, there's another substantial pool of dollars.
SERWER: Mr. Secretary, I want to ask you how we're doing when it comes to fighting the war on terror domestically, and I know you've kind of got a tough row to hoe here, in a sense, because you're proving a negative. If nothing's happened, how have you done? How are we doing, and how do you sort of assess yourself?
RIDGE: Well, first of all, I think one of the most important things that we've been able to accomplish within the first seven months is build strong partnerships with the state and local communities, with the private sector. To the end that people are worried about where those dollars are going to be spent, every state by the end of this year will submit a strategic security plan for their individual states. We've asked the governors to coordinate the plans, but we asked the plans to be built from the bottom up, so that we can have a concept of a regional approach toward safety in these communities, mutual aid agreements, so I think as we evolve, as the department evolves and the strength of our relationships with the state and local governments gets better and better, I think you're going to see a broad infrastructure around the country when we've got even better capacity to respond to an attack and by the time we get done with the information analysis and infrastructure protection responsibilities we'll get information back and forth so we can actually prevent attacks, as well.
ANSES: Secretary Ridge, what do you consider the likelihood of us being attacked again, at this point? I mean, we've been putting so much energy into preparedness. How serious is the threat?
RIDGE: Well, I think that the threat is at an elevated level. As you know, we are at a condition yellow, that's a pretty serious condition. We know that Osama bin Laden, al-Qaeda, and other terrorist organizations have targeted America and American interests both internationally and domestically. That has not changed. We also know that we get more information about who the terrorists are and how they operate and their plans of operation. We're in a better position to share some of this information with the state and locals. But, I think every single day from a security point of view, not just within the department of Homeland Security, but cities and states and the professionals around the country need to plan around the inevitability of another attack. We'll do everything we can to reduce our vulnerability, do everything we can to prevent an attack from occurring, but we best not take our mind away from the notion that as open and as diverse as we are there's a very good possibility that sometime in the future another attack will occur.
CAFFERTY: In some ways, Mr. Secretary, isn't your agency it own worst enemy? And by that I mean this: The better you do your job, the more complacent we as a nation become about the likelihood of being victimized the way we were on September 11, a couple of years ago. What do you do to fight that complacency, which is a natural by- product of you doing the things you were created to do? RIDGE: Well, we hope within the department and around the country that every single day our efforts with technology, and people, and the collaboration that we've developed and are sustaining around the country and around the world means that we're more secure and better prepared everyday. But, I must tell you that the intensity level and the focus of security professionals and law enforcement community since September 11 hasn't been reduced at all. As a matter of fact, I think with the additional dollars going out to communities, with more training, with more exercises and involving more and more communities in this effort, I think the awareness level is every bit as acute as it was right after September 11, and one of the challenges for the department is sustaining that over a longer period of time.
SERWER: Mr. Secretary, I want to ask you about a very specific instance, and that is the Anthrax attacks that took place two years ago. Is that investigation still ongoing? And isn't that frustrating for your agency, that we haven't been able to solve that?
RIDGE: Well, I think it's very frustrating for all of us who are associated with the Anthrax murders of two years ago that we haven't come to a solution, but you should know, and America should know, that the FBI continues to have several hundred agents working the case, and Frankly, at this point, there are some very, very sophisticated testing with the Anthrax samples. It's complex, it's cumbersome, it's time consuming. But, we're hopeful that some of that analysis may point us to an ultimate source and thereby being able to determine who murdered these Americans.
CAFFERTY: Secretary Tom Ridge, head of the department of Homeland Security, thank you very much for appearing on IN THE MONEY, appreciate it.
RIDGE: Good to join you. Thank you very much.
CAFFERTY: All right, sir.
Coming up on IN THE MONEY the market's up, the economy's getting stronger, and that leaves the democrats down as they hope to get the White House back come next November. We'll talk about what President Bush's challengers can do if they lose the number one issue, which has been the economy.
And looking sharp: Gillette racks up an earnings boost as it gets ready to cross swords with Schick. And, if you think that's easy to say, try it.
And, it's an uphill battle for America's youngest workers. We'll talk about why their prospects still seem bleak.
ANNOUNCER: Carlos Slim was on "Time" magazine and CNN's 2001 list of "Global Business Influentials." Slim became Latin America's richest man by spotting troubled companies and turning them into lean, profitable machines. His telecom company, Telmex, now offers service for more than 15 million access lines. That's a 8.5 increase compared to last year's. Carlos Slim, a 2001 Global Business Influential.
Beginning Monday, November 24th, tune in to see who's impacted the business world this year.
CAFFERTY: The better the economy looks for President Bush, the worse it looks for the people who want to replace him as president. The job market making some positive moves of late, and for democrats with an eye on the Oval Office, that means a tough campaign that's getting even tougher. Chris Huntington joins us now, with what is really a dilemma for all the democrat wannabes.
CHRIS HUNTINGTON, CNN CORRESPONDENT: Hi, Jack. Well yeah, the democratic candidates had a big, easy target for a while there, with the economy struggling, the deficits booming up, jobs still leaking out of the economy. The figures in the last week-and-a-half though, have really made it tough on the campaign trail. Of course, you had the GDP figure a while ago, 7.2 percent, the initial reading on third quarter. Then you get the latest jobs report, with some revisions thrown in there that show that actually jobs have been created in August, September, and October, that's a big surprise to economists, and of course it's a big surprise to the candidates. Now, here's what Howard Dean had to say on Tuesday of this past week. Of course, taking into consideration the GDP figures, but not yet the new jobless figures.
(BEGIN VIDEO CLIP)
HOWARD DEAN (D), PRESIDENTIAL CANDIDATE: I think that the biggest issue in this election's going to be jobs, and my, the president has a fine record, 3.2 million jobs out the window since he took over the presidency. A half a trillion dollar deficit -- the largest deficit in the history of the United States of America. What happened to the republicans who could -- used to be able to balance the budget? We have not had a republican president balance the budget in 34 years in this country. If you want to trust your hard-earned tax dollars to the federal government you had better find a democrat because you cannot trust republicans with your money.
(END VIDEO CLIP)
HUNTINGTON: So, now with job creation apparently happening in the economy, the democrats -- look for the democrats to change their tune just a bit Jack, and it's most likely going to take the form of what Jonathan Edwards came out with -- John Edwards, also running for president, saying that it's not up to the White House predictions. So, they're not denying the fact that the economy is turning against their campaign rhetoric, but just not holding up to what the White House had said it would produce.
CAFFERTY: All right, Chris. Appreciate it. Thank you. CNN's Chris Huntington.
HUNTINGTON: OK. CAFFERTY: When the numbers change, a candidates' strategy has to change right along with them. For a look at how the democrats are responding to the latest economic news, Greg Valliere joins us now from Washington, political economist with the Charles Schwab Research Group.
Greg, nice to see you, thanks for being with us.
GREG VALLIERE, CHARLES SCHWAB RESEARCH GROUP: Great to see you. Nice to see you, Jack
CAFFERTY: So, what do the democrats do now? All of a sudden the economy is not only rebounding, but the long-awaited jobs recovery is showing a heartbeat. That poses trouble for the democrats who want to occupy the White House, does it not?
VALLIERE: I tell you Jack, I've been doing this for a long time. Rarely have I seen the political landscape change as quickly as it's changed on this issue. The economy has gone from a negative for bush to maybe a neutral, now. I think by spring it be could even be a slight plus for him. So, the democrats focus more on Iraq. It's a dicier issue, but I think Iraq is Bush's real problem, not the economy.
CAFFERTY: Except that historically Greg, don't people tend to vote their pocketbook in an election? Don't you vote on things like can I get a house, do I have a job, can I put my kids through college? And unless Iraq becomes something much greater than it is, won't history tend to be the driving force here, as well?
VALLIERE: This is a very, very good story for Bush, although I have a friend who's a political consultant who points out that foreign policy usually isn't the big issue unless it is "the" issue. It's possible this could be "the" issue if the casualties and sabotage and terrorism continues over there.
ANSES: Let's talk -- let's go back to the economy. In addition to, of course, the obvious risks in Iraq, there is the whole question of deficit spending. Now, I know that that is a difficult and a subtle issue to make on the campaign trail, but a lot of democrats are very concerned that we are buying this bounce in the economy at the expense of our long-term well-being. Have you heard people talking about that in Washington?
VALLIERE: Sure, and it may be an issue, but I point out two things quickly: No. 1, the deficit may be coming down. All the reports we're getting is that receipts to treasury are really picking up -- corporate earnings, things like that. Number two, I have yet to see any real traction with that issue. You'd have to see rates really spike up a lot, have variable rate mortgages go higher, I think, for the democrats to get a lot of traction on that issue.
SERWER: Now Greg, of course, your boss was an adviser to the president on economic matters. So, I guess he's got to be a little happy, as well. I want to ask you though, I mean, just how good are things? I mean, isn't it a little premature to call victory, yet? We have a story in "Fortune" magazine coming out on Monday, "If Things are so Good, Why do I Feel so Bad?" My jobs gone to India, I'm not going to get a raise this year, again, et cetera, et cetera, et cetera.
VALLIERE: Yeah, well, if the DOW gets past 10,000 I'm sure there'll be a flurry of why things are so good, I mean there's two sides to the story. I will grant you, there is a minority view on Wall Street and elsewhere that the third quarter was a sugar high, that it was an artificially stimulated by tax cuts, mortgage refis, and that we could fizzle out. I think the more likely scenario though, is good growth, not great, four percent, that will produce good job growth, but it's not going to be a spectacular story, and it's not going to be one that will be unabashedly, totally positive.
CAFFERTY: Let me ask you a question about Iraq. I watched the latest debate, I saw among the democrats was the "Rock the Vote" thing where they all jumped all over Howard Dean for Confederate flags on pickup trucks in the South. What I haven't heard the democratic presidential candidates say is, here is my plan for the war on terror and here is what I would do about the situation in Iraq. Can Iraq be a winning issue for the democrats, unless somebody in the field of candidate wannabes comes up with something on those issues that makes some sense to the voters?
VALLIERE: Very good point, Jack. And I would throw this back to you, and that is that the grumbling I'm hearing within the beltway is now coming from republicans -- Richard Lugar, John Warner, John McCain. People like that who are very upset with Rumsfeld and the Pentagon. I think this general sense of unease about: Do we have a plan in post-war Iraq? Ironically, it may come from republicans as much as democrats. But you're right, in terms of a prescription, anybody who would talk about a hasty troop withdrawal; the message that would send to the terrorists would be just appalling in my opinion.
CAFFERTY: Is Donald Rumsfeld perhaps, a marked man, but maybe not until the political campaign heats up a little more?
VALLIERE: Could be. I mean, will there be a sacrificial lamb, and if there is one is Wolfowitz big enough of a lamb? There may have to be one if this thing doesn't go well.
ANSES: Let's go back to wages for a second...
ANSES: Because I think that what Andy was asking before is very important. One of the difficulties with this whole upward turnaround in the economy is that a lot of it comes not from necessarily, actual growth in sales, but from cutting costs. And what that means is that those of us who are workers aren't getting their raises, salaries are staying pretty flat even now, during this upturn. What do you think is going to be happening in the individual earner's home as the year comes up? Are we going to be earning more money? Please?
VALLIERE: Well, real disposable income will be up a little because inflation is so low. But, it certainly isn't a wildly bullish story. I think where you're going to see the next leg of this economic recovery comes from the corporate side, and as you know, businesses have been pretty reluctant. But, I think business fixed investment, inventory replenishing will give the recovery the next leg, but again it's a four percent recovery. I don't think it's a -- 7.2 percent I don't think is sustainable.
CAFFERTY: Greg Valliere, thank you for joining us on IN THE MONEY. It's nice to talk to you.
VALLIERE: You bet, Jack.
CAFFERTY: All right. He is political economist with Charles Schwab's Research Group down in Washington, D.C.
Coming up on IN THE MONEY: How to squash a bug. Computer viruses and the coders who write them are the target of a new Microsoft project. Find out how squashing a worm could mean money in your pocket.
And, we'll talk to an author who says TV news is where the elite meet to bleat. See if you buy Bernard Goldberg's argument. Great line, whether you buy the argument or not.
And, fighting for animals by playing like a fat cat: Find out how an activist group is using cash to work for change on behalf of our furry little friends.
SERWER: Now, it's time to check the top stories of the week in our "Money Minute." There could be a break in the ongoing Enron investigation. Former Enron CEO, Ken Lay, has now agreed to hand over the personal documents investigators for the SEC have been trying to see for about two years. Lay had said the documents violated his right against self-incrimination. The judge who signed off on the agreement says the SEC can use the documents for any law enforcement purpose.
And, if at first you don't succeed, reindict. The feds are going to give prosecuting Frank Quattrone another try. Quattrone is the former CSFB banker who many investors accuse of pumping tech stocks. His first trial ended with a hung jury.
Microsoft is putting some big money where its mouth is when it comes to fighting computer hackers. The software king is setting up a $5 million reward program to help identify and convict people who release worms, viruses, and other destructive programs on the internet. Topping Microsoft's wanted list, the folks behind the so- called SoBig and Blaster viruses that hit millions of computers this year.
Shaving king Gillette reported -- that was a pun -- reported stronger third quarter profits, up 17 1/2 percent from last year. And, those extra millions will come in handy is Gillette is battling in court to stop rival Schick from releasing its new Quattro razor. Gillette says the Quattro is a blatant rip off of its Mach III razor and is suing Schick for patent infringement. Gillette has been trading in a very tight range, as they say, this year. Right now it's close to its year high. And that's why Gillette is our stock of the week. So, what do you think, guys? One of the blue, blue chips out there, but it really has not gone anywhere for a few years, has it?
CAFFERTY: I think that's a story you read very carefully, No. 1.
CAFFERTY: And No. 2, the question I have is: How many blades is going to be enough blades? I mean, are we going to have like a razor that has 28 blades? You just -- I mean, you know.
ANSES: It's going to be fins. Right? It's going to have fins.
SERWER: Four, five, and six, right?
ANSES: You know, I just can't get over that idea that it's going to be patent infringements for a razor blade, I mean, it's a good thing they're not in the blue jeans business. Imagine what they'd be...
SERWER: Well, Gillette really does pride itself, the old company out of Boston, on all these technological advances in razors. Also tooth brushes, Oral-B, I mean, they really kind of put science in it. And, they have been sort of, the leaders in those fields, but the stock was at 60 bucks in 1999, it went down to 30, and it's just been going across. Warren Buffett was on the board of this company for years and years then he stepped off. James Kilts is running the place now, but hasn't seemed to really taken off quite yet.
CAFFERTY: Wonder what they have to do, maybe bring back the Friday night fights at the Garden. Remember?
SERWER: Get some nick s and cuts?
SERWER: Yeah, that's good. You know the other thing that's actually tough for this company now...
ANSES: That was bad.
SERWER: That was bad -- is the battery business, they own Duracell and that has just been a really, really tough business, kind of an albatross around this company's neck. So, so competitive, and you know, you don't have a lot of pricing. But, they've got some top line products, and it's just one much those things that keeps on ticking I guess.
CAFFERTY: It's been at 30 a long time, right? Do you buy it now thinking if it's going to be at 30 for a long time, maybe it's not going to go below 30, and the only place left to go is up?
SERWER: But -- you know, it's one of those stocks that's still expensive -- you know, still...
CAFFERTY: Based on earnings.
SERWER: ...price to earnings multiple at it's high. But, you know, I think you're probably right, it might get a little upside soon.
ANSES: Well now, how were they affected by -- you know, they're a real multinational, and so one of the things people would have to watch out when they're look at just stock like Gillette is the changing currency situation around the world.
SERWER: That has been good for them. The dollar strengthens in some of this new economic news, but the dollar's been a good thing for them lately.
CAFFERTY: All right. Gillette, stock of the week.
Coming up, best-selling author former TV news reporter, Bernard Goldberg, takes aim at what he calls the "liberal media elite." He takes them to task in a new book called "Arrogance."
And, they're growing, but their earning power is not. Find out why more and more young Americans are missing a shot at prosperity as IN THE MONEY rolls on.
CAFFERTY: When it comes to bias in the media, everybody plays the blame game. Conservatives say most TV networks and newspapers have a liberal bent. Liberals slam some cable networks and radio stations for their conservative agenda.
One of the most vocal players in the debate joins us today. Former CBS correspondent and author Bernard Goldberg, who's here to talk about his new book "Arrogance: Rescuing America From the Media Elite." Bernard's a veteran of CBS News.
Nice to see you. Welcome. He joins us this morning from Miami.
Does it matter, Bernard? I mean we have Rush Limbaugh and Fox News that are on the right. We've got these other liberal cabals that you claim are on the left. And somewhere in between, we have a whole a cauldron of voices coming at us. I mean, can't somebody find whatever it is they want to listen to out there, and is there really anything wrong with having an ideological spectrum like that?
BERNARD GOLDBERG, HBO CORRESPONDENT, "REAL SPORTS": Yes, they can find anything they want to listen to. And there's nothing wrong with having an ideological spectrum. That's a straw man (ph), Jack, with all due respect.
CAFFERTY: Well, so what's your point?
GOLDBERG: My point is that it's the mainstream media. It's ABC, NBC, CBS and PBS that get about 35 million people every night. And Fox, that you seem so concerned about, which kilts to the right, gets about a million and a half on their newscast tonight. When Fox gets 35 million and CBS gets one million, then I'll worry about some other kind of bias.
CAFFERTY: But isn't that exactly the trend that's happening? Aren't the viewerships of the network newscasts declining? And haven't they been for some time? And aren't the viewerships of the cable news networks, which are a comparatively new phenomenon, growing?
GOLDBERG: Oh, yes. That's absolutely true. And I think one of the many reasons that the network viewersship is declining -- yes, one of the reasons is there used to be just three places you could get your world and national news. And now there are 500 channels.
But one of the reasons certainly is this perceived liberal bias on the part of the media elite. And the point I'm making in "Arrogance" -- I'm not out to prove again that there's a liberal bias in the news. Either you believe that or you don't.
What I'm trying to do now is show how entrenched these biases are. How the elites, whether they're in Hollywood with this Reagan movie, or the news elites in the East Coast, have a...
ASNES: OK. Now, wait a minute. I've got to break in here.
GOLDBERG: What I'm saying is that they live in a very comfortable bubble. They live in a comfortable bubble. And inside this bubble the media elites will hardly ever run into anybody who disagrees with them.
And that's not healthy for journalists. And as the people on the West Coast just discovered, it's not too healthy for them either.
ASNES: Now can I break in?
GOLDBERG: Absolutely. It's your show.
ASNES: Great. OK. Now, first of all, the Reagan docudrama is not on the air as news. And the reasons for that, if you ask me, is because it's lousy. OK?
Leslie Moonves went out there and he saw something that was unconscionably bad. So whether you're on the right or on the left, there's no reason to put it on the air. He was smart enough. He had the media elite journalistic ethics to say, this stinks, let's pull the plug.
GOLDBERG: Right now, the current thing today is that many people on the left, and maybe you included, are arguing that it's a kind of censorship. I know we don't literally mean censorship. The government didn't tell CBS to do it.
CBS made a business decision not to run the movie. So it's not technically censorship. But there's a lot of talk about a chill factor, and "The New York Times" is saying it's a Soviet-style chill. Let me ask a question. Does anybody remember the liberal America being too upset when Dr. Laura made a comment that gays found offensive and her TV show was canceled? I don't remember a big uproar on the left over that.
If somebody in Hollywood made a movie about George Wallace and it was incredibly favorable and they put words into this mouth that he never said, but put words in his mouth to make him look good, and the network buckled and canceled it, do you think liberals would say -- they'd say that was right. So I think there's a bit of hypocrisy on the left about the Reagan thing.
About your comment about how you have discussions and arguments all the time in the newsroom, well, I'm glad to hear that. But you know what? When it comes to big issues like abortion, race, gay rights, there aren't nearly enough big arguments in newsrooms.
SERWER: Bernard, can I jump in for a second here?
SERWER: Absent "The New York Times," I want to talk about newspapers for a second. Absent "The New York Times," aren't the overwhelming -- isn't the overwhelming majority of newspapers in this country conservative, number one? And number two, has Al Franken read your book yet and commented on it?
GOLDBERG: Well, saying absent the "The New York Times" is like saying besides that, Mrs. Lincoln.
SERWER: No, that's not true. That's not true, Bernard, because you know there's a whole lot of other newspapers out there. You compare the readership of "The New York Times" to the readerships of the other newspapers, and it compares very well...
GOLDBERG: No, but my point is...
SERWER: ... in terms of numbers.
GOLDBERG: My point is that the media elites, certainly in New York City and Washington, don't know which way is up until they read "The New York Times." "The New York Times" isn't important. You're absolutely right about this in terms of circulation.
I mean, 99 percent of the American people never read "The New York Times." But the people in New York who decide what gets on the CBS Evening News, NBC and CBS and ABC, and probably CNN, do read "The New York Times." So it has tremendous influence.
And the part that bothers me about that isn't that it's a liberal paper. That's absolutely fine with me. But it's that the ideology filters into every other section of the newspaper.
Can I literally read you just one sentence? This is in a food piece, a piece about food in "The New York Times." Talking about monkfish. Right? Monkfish. The writer says, "Apparently it sits on the bottom of the ocean, opens its Godzilla jaws and waits for poor unsuspecting fishies to swim right into it, not unlike the latest recipients of President George W. Bush's capital gains cuts."
The problem with "The New York Times"...
SERWER: Paul Krugman (ph) wrote that recipe, right?
GOLDBERG: He might as well have. It's like one of the best newspapers and one of the worst newspapers, because you find ideology in the strangest places. You find it in stories about food, you find it in stories about sports. You find it in movie reviews.
And then the media elites, who really don't come up with too many original ideas -- that I know for a fact. I was with CBS News for 28 years -- they read "The New York Times," they determine what's important and what's not important, what's mainstream and what's not mainstream, and then the news gets tilted inevitably to the left.
CAFFERTY: Bernard, I enjoy reading your stuff. One of the points you make is that perhaps East and West Coast media types ought to spend a little time out in the hinterlands learning what the real American way of life is all about.
GOLDBERG: Exactly. Who could argue against that?
CAFFERTY: No. And I've worked in both places, and it is a different landscape and it is a different population. And they do have different ideas about things than we have in these big cities like New York.
I'm out of time. I've got to stop here. Thanks for coming on the program. I appreciate it.
GOLDBERG: Thank you. Appreciate it.
CAFFERTY: Bernard Goldberg. The book's called "Arrogance." Good stuff.
Heading your way on IN THE MONEY, as we continue, the young and the restless will tell you how new statistics show that American kids are falling behind in the job market.
Also coming up, PETA makes the fur fly. Well, what's new about that? Find out how the animal rights group is using cash and cunning to bring its message to the boardroom.
We shall continue.
SERWER: CEOs like Bill Gates, Richard Branson and Gordon Bethune dropped out of college to build lucrative careers at a young age. But a new report says today's teenagers and young adults don't stand a chance at the same success.
Joining us from Boston is the author of "Leaving Young Workers Behind," Andrew Sum. He is a professor of economics and director of the Center for Labor Market Studies at Northeastern University.
ANDREW SUM, PROFESSOR OF ECONOMICS, NORTHEASTERN UNIVERSITY: Thank you.
SERWER: Can you talk a little bit about your research and the subject of your report?
SUM: Sure. The research that we've been conducting over the last few years has focused on the labor market experiences and problems faced by the nation's teens and young adults. Both recently during the last few years and also looking at their experiences over the long haul to try to determine which groups of young men and women are faring well in the labor market and which ones are not.
One of the primary findings of our research, however, has been the devastating effects at both the national recession of 2001 and the jobless recovery since then, up till now, has had on the employment opportunities for young adults. Those groups that have been most adversely affected by the detraction of the labor markets have been first, teenagers, and secondly, young adults, 20 to 24.
They're employment rates have been far more adversely affected than those of older adults. For example, the employment rate of the nation's teens is down nine percentage points from where it was at the peak of the boom, while that for young adults, 20 to 24, is down nearly five percent. In contrast, older adults have been only marginally affected by this.
ASNES: OK. I want to ask you a question. So now you're saying -- how many 24-year-olds are there out there who have never had a job? I mean, that's what you're saying, that you've got all of these people who go through teenagerhood and well into their 20s and they have not had a job. Does that include things like McDonald's? Is it nothing?
SUM: The labor market for young adults is a very fluid one. So it is often the case that young adults will hold short-term jobs, lose those jobs, and then look for work again.
The number of young people who have not had a job is not particularly large. However, what is disturbing is the large numbers of young people who are both neither working nor in school. And it is the size of that group which is so large which is not a good sign for the economy, because all longitudinal research shows those young people spend more time in their late teens and early young adulthood out of school and out of work will come to dominate the ranks of the working poor and the dependent poor in their later adult years.
CAFFERTY: Well, they don't become high-spending consumers, which is two-thirds of what drives this economy, right? So the implications are considerable if you look forward. SUM: The implications are particularly severe in both -- not only terms of their earning power, which will critically influencing their spending power, but we've also argued that, for those of us who are taxpayers as well, should be interested in their fate as well.
Remember, they're also taxpayers. And the lower incomes will generate a lower set of tax revenues over their work life. And in addition, they are bigger drainers on the rest of us in terms of increased cash transfers. So it's in the interest of all of us to have more young adults fully working.
ASNES: Is this the group that used to be called the underclass? I remember back in the '80s, everybody was talking about a group that was essentially uneducateable, unemployable, and so they ended up in the underground economy. Is that what's happening here?
SUM: I hate to use the word "underclass" to describe all of the young people that we're talking about. While it is clear that there is a subset of these young people who live in high-poverty neighborhoods and have many of the characteristics of what in the '80s were called underclass, a large number of these young adults live in just moderate-income, middle-income communities that have been shut out of the labor market of the last three years.
ASNES: So then this has to do, to an extent, with the fact that there are so many fewer unskilled jobs in this country?
SUM: Partly it has to do with that. But I would argue, primarily it has to do with two other factors.
One is that the number of adult competitors for available jobs is far greater today than it was in the late '90s or at the height of the boom. There are many more adults 25 or older who are willing to take entry jobs that these people have taken.
Secondly, they also face enormous competitions from the large numbers of immigrant workers who arrived here from 1990. And even in the last three years, we estimate that another 2.5 million immigrants came to the labor market.
There are large numbers of these entry-level jobs which are being competitive with immigrants at a time when there's a limited supply of jobs available. So it's both increased supply in competition with young adults, plus the reduced demand, except for the last three months, where we just have not had any kind of substantive job growth to provide an incentive for employees to reach back in the cube and to hire more young adults for their available positions.
CAFFERTY: Interesting stuff. Mr. Sum, we're going to have to leave it there. Thank you for being with us. I appreciate it.
SUM: Thank you.
CAFFERTY: Andrew Sum is the director of the Center for Labor Market Studies at Northeastern University. Still ahead on IN THE MONEY, PETA is taking its fights for animal rights inside the walls of American business. Find out how sign holders are turning into shareholders. And if you think that's the wrong way to skin the cat, or if you have something else on your mind, you can send us an e-mail.
That was such a trashy transition. Wasn't it? It was awful. Did you write that, Jack?
Our address is firstname.lastname@example.org.
Back after this.
CAFFERTY: It looks like the animal rights group PETA is taking the "if you can't beat them join them" philosophy to heart when it comes to some big U.S. companies. Well, not exactly.
Money.com's Allen Wastler has more on their new strategy. This is not a group known for its great sense of humor. But they have been effective in getting their message out. But this is a whole new approach, isn't it?
ALLEN WASTLER, MONEY.COM: They're very effective. And actually, they're sort of borrowing it from the union play book kind of, because unions a few years ago figured out, hey, you know, if we get somebody on the board, maybe we could influence the decision-making.
So PETA says, you know what we're going to do? We're going to buy stock in places like Tyson Food, Pilgrim's Pride, Hormel, and the dining chains, too. Applebee's, Chili's, Outback Steakhouse. All right?
SERWER: I'm getting hungry.
WASTLER: And even Denny's. And they're going to say, and if we get enough of the stock in each of these companies, we can put up shareholder resolutions...
CAFFERTY: At the meetings, right?
WASTLER: ... and we can start banging the drum at the meetings, going to other shareholder groups, which including labor unions, but also a lot universities, a lot of very sensitive pension funds, where they're saying, you know, you're doing this to the animals and you're doing this to the animals.
CAFFERTY: But what does that do if they're successful? Does that drive up the price of my steak?
WASTLER: It will probably drive it if they're successful. But, you kind of wonder...
SERWER: Drive the price of the stock down, too.
ASNES: That's a real long shot. There's been attempts of shareholder resolutions like this for years and years on all kinds of issues. Really, the most it ever gets for anybody is publicity. If publicity is what PETA is after, as they so often are, this is a good tactic.
WASTLER: Agreed. But actually, they just got Whole Foods to adopt this humane animal standard at all their grocery stores.
ASNES: Yes, but that's Whole Foods. That's their whole schtick.
CAFFERTY: Allen, let me ask you a question. When you talk about that, why do you go "humane animal standards?"
WASTLER: Because you're going to eat the thing, OK?
WASTLER: Oh, Mr. chicken, I'm so sorry that I'm about to slap you on to the grill and put some barbecue sauce and eat -- this strikes me as, we're the top of the food chain. Let's live like it.
CAFFERTY: All right. I thought that was maybe where you were going. I just wanted to clarify. Now, the fun site this week plays kind of right into this whole theme, doesn't it? You know.
WASTLER: And you know, PETA, actually they do have a great sense of humor. OK? So our fun site is a place where you can go and check out some of the commercials that they've done that networks have refused to air.
WASTLER: I mean, they have stuff like fornicating cats, erotic vegetables. We have one segment of one of the more G rated ones of cows. So let's take a look at that.
(BEGIN VIDEO CLIP)
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WASTLER: These are cows singing their objections to becoming leather. And it's actually quite amusing. But the networks refused to run this one, too. But it's actually one of the much more tame...
CAFFERTY: I was going to say, that's kind of mild, right?
WASLTER: Now, the way to get to this fun site, it's complicated, (UNINTELLIGIBLE), Jack.
CAFFERTY: Yes, last week you had me read it and people's eyes just glazed over it, so why don't you do it?
WASTLER: We're going to put it on the IN THE MONEY show page, OK?
WASTLER: The way you get to that is just go money.com/inthemoney and you're there, baby. Or, you could go to the money.com homepage, and where you see the word "TV," the little initials there, just click on that, and you'll say, oh, IN THE MONEY is on the schedule. Boom, you're right there.
CAFFERTY: And the fun site will be in that same place each week?
WASTLER: We're going to put the fun site on that. You can navigate right to that and you can watch the cats, the cows, the vegetables.
ASNES: Oh boy.
CAFFERTY: Well, some of us aren't old enough.
Thank you, Allen.
WASTLER: Sure thing, Jack.
CAFFERTY: All right.
Coming up on IN THE MONEY, we're going to dip into the e-mail bag and read some of your correspondence. Remember, you can tell us what you think about this program or anything else that's on your mind by e-mailing us at email@example.com.
Back in a minute.
CAFFERTY: Last week, we asked you if you would ever give your child psychoactive drugs. That was the e-mail question of the week.
Mike in Los Angeles said, "Prescription drug do not address the cause of the problems. These drugs are the direct result of drug company lobbying. Profits have taken seniority over solutions."
Lisa in Kentucky said, "What they don't tell you when you give your children these drugs is that it can limit his or her career choices. Taking some of these drugs can get you disqualified from military service, getting a pilot's license or becoming a cop. Had I know this, I would never have agreed to put my son on medication."
Ellen, on the other hand, said this: "If your child said to you he didn't want to live anymore, what would you do? We need to do what we can to keep young people from turning to street drugs. If it meant keeping my child alive, out of jail, and off the illegal narcotics, of course I'd give him Ritalin or anything else the doctor prescrbes."
Time now for the e-mail question of this week which is as follows: How long should the United States stay in Iraq? Send your answers to us at firstname.lastname@example.org. We'll pick some of the more compelling ones and read them on the show next week.
All right. That's it. Thank you for joining us for this edition of IN THE MONEY.
Thanks to our group here: "MONEY" magazine's senior editor, Marion Asnes, who is in this week for Susan Lisovicz. Drop by any time, Marion.
ASNES: Thank you.
CAFFERTY: "Fortune" magazine editor-at-large Andy Serwer, and money.com managing editor, Allen Wastler.
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Better Economy Means Tougher Road For Democrats To White House; Unemployment Highest Amoung 16-24 Year Olds>