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CNN IN THE MONEY
Eliot Spitzer Turns eyes to AIG; A Look at Campaign Strategy of Both Presidential Campaigns
Aired October 23, 2004 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
FREDRICKA WHITFIELD, CNN CORRESPONDENT: Just 10 days to go before Election Day with presidential candidates Bush and Kerry battling out a close race in the polls. Mr. Bush accuses Kerry of a fundamental misunderstanding of the war on terror. Meantime, Kerry says the president is ignoring the economic struggles of working women earning low wages.
A string of earthquakes and aftershocks hit northwest Japan. Local media reports at least four people were killed, hundreds injured and there's widespread damage. The swaying was felt as far away as downtown Tokyo, more than 150 miles away. The biggest quake measured a 6.8 magnitude.
And in Iraq, at least 10 policemen were killed in a suicide car bombing at a police station near Ramadi (ph). Five others were wounded, that's according to a U.S. Marine spokesman. No U.S. casualties are reported. An Iraqi journalist who witnessed the blast tells CNN the bombing targeted Iraqis lined up outside the police station. I'm Fredricka Whitfield at the CNN center in Atlanta. More news at the bottom of the hour. IN THE MONEY begins right now.
SUSAN LISOVICZ, CNN ANCHOR, IN THE MONEY: Welcome to IN THE MONEY. I'm Susan Lisovicz sitting in for Jack Cafferty. Coming up on today's program, enough with the questions already. The polls are tracking every twitch in America's political mood. See if we're all polled out as we speak with a top opinion checker.
Also ahead, fence jockeys. Find out what it takes to make a swing voter quite sitting on the fence and take a stand.
And hard core chocolate. We will speak with the author of candy freak (ph) about the business of hitting the sweet spot. Joining me today, a couple of IN THE MONEY veterans, money.com managing editor Allen Wastler and "Fortune" magazine's senior writer Shawn Tully. Welcome guys. There was no official poll on worker productivity over the past week. But I'm going to go out on a limb and say it suffered dramatically. Going through the twists and turns of the AL and NL championships leading up to today's World Series.
SHAWN TULLY, "FORTUNE" MAGAZINE: Everybody in my office went, yeah.
ALLEN WASTLER, MONEY.COM: Staying up late at night watching the game.
TULLY: They're either depressed or elated the next day.
WASTLER: A lot of energy going around especially for Boston. They had a productivity surge. New York, of course -- they got so much of their psyche tied up in this game.
LISOVICZ: Also, with, you know, the NL championships, too, right? Because you have the Astros down two games and then they fought back. In the end the Cards win it. And you know who is smiling the most? It's not even the Red Sox nation. I think it's Fox.
TULLY: Yes, 13 games, can you imagine? It's amazing. But I was looking at the statistics. As an old statistician, I was wondering what chance the Yankees would have of sewing it up and actually to come from behind and win four games it's like one in 16 shot to do it assuming the two teams are equal, which they really were. That's an amazing -- to have those odds stacked against you and be able to overcome them.
LISOVICZ: The biggest collapse for any team, never mind the storied Yankees who used to own the crunch right in the postseason.
WASTLER: Yankees make history, again, the wrong way to do it, but that's what they did.
LISOVICZ: Unfortunately. It's going to be a long, cold winter I'm afraid. So that's one contest we're talking about. Let's talk about another very important contest and let's face it, Americans just a little neurotic about polls lately. We keep checking the latest numbers on the White House race wondering if anything has changed at all and it changes just enough to keep us antsy.
Here to help us make sense of what's going in is Lee Miringoff. He's the president of the National Council on Public polls and the director of the Maris Institute for Public Opinion. Doesn't look like you lost any sleep Lee.
LEE MIRINGOFF, MARIS POLL: Oh, no, you are so wrong. You are talking about a disgruntled Yankee fan. I may not recover until, I don't know, after the World Series.
LISOVICZ: But then you have another big contest, too, that is keeping you up late.
MIRINGOFF: Although, if it ended up Houston versus Boston, then we could have done parallel to with Bush and Kerry.
LISOVICZ: So then red versus blue, right.
MIRINGOFF: Yes. It would have been just perfect and this is a little bit more confusing electorally.
LISOVICZ: OK. All right. So let's talk about what the latest polls show. Do any of you guys, no offensive, really have a clue?
MIRINGOFF: Yeah, it's close and the secret is out. I mean it's been going on for the entire campaign. I think what the polls, the public polls help voters and journalists and pollsters get a grip on is why the candidates are doing what they're doing because they have all these private polls, which are guiding where they campaign, the message, the group they are targeting. I mean it's no secret now as to why the key states, the battleground states are being so ought after and which voters, the women's vote for example and the young vote is being targeted by these candidates. So, yes, there's a lot of polls, probably more than is ultimately necessary, but it certainly helps the public in on the secret as to what is going on and what everybody else is aware of, at least from the campaign perspective.
TULLY: Lee, I can't wait to ask you this question, because this is what's really been troubling me about the polls out there and the predictions that are being made. If these two candidates are deadlocked, which is what your poll is showing at 47-47 and there's 5 percent undecided. Usually if an incumbent is not well ahead in the polls at this stage in an election, given that traditionally the undecideds break very strongly in favor of the challenger, how can Bush win this election?
MIRINGOFF: Two things at work. First of all, these are national polls and obviously the Electoral College is a state by state determination. Secondly, the polls really don't tap into the get out the vote effort. If you are talking about places like Ohio, for example, if the Bush effort in terms of getting those supporters out to the polls on election day is superior if it is, to the Kerry effort, that can turn a few voters in Bush's direction and that would be amassed by these national polls. So in a sense the national polls help guide the general direction. The state polls can talk state by state. The undecided and many of those who are not firmly committed are more negative to Bush on the economy, more negative to Bush on Iraq, more likely to think the country is headed in the wrong direction and really ripe for Kerry if he can close the sale with those swayable, movable, persuadable voters. He hasn't done that yet, but that could happen. Could it be offset however by the get out the vote effort by President Bush? That remains to be seen.
WASTLER: Lee, you mentioned national versus state by state. We've heard over and over again the battleground states, the battleground states, like the rest of the states don't really count.
MIRINGOFF: The candidates aren't campaigning in them either or the ads aren't there.
WASTLER: Are we likely to see any surprises out there? I mean can we pay attention to some other of the other states too, not just the battleground states?
MIRINGOFF: You know, I always think that there's one or two states that are going to show up a lot closer and may even tip the other way than people expect, unclear where that is. But, you know, some of the other states are close. They're not just tagged battleground states. They haven't had the advertising. They haven't had the candidates visiting but maybe they have had a serious get out the vote effort and they are able to tip it in a surprising way. Sure, there's always the potential for a state or two to shock on election day. We had that in New Hampshire last time, West Virginia, Tennessee, places people didn't expect might go the way they ultimately went. That could happen this time. It could upset all the plans of the Kerry and Bush strategists.
LISOVICZ: You know, going back to something you mentioned earlier, the polls within the polls. The fact that John Kerry was in camouflage gear goose hunting, the fact that the president was courting very publicly high members of the Roman Catholic clergy, is not just perhaps what may seem like an unlikely photo op. It is something that they are seeing themselves and that's why they are doing it so openly?
MIRINGOFF: Yes and I think both sides are trying to get the slightest breeze going their way in the last week. That can blow down any house and then I think at this point, because it's so close and everybody is in a sense fighting the last war of 2000 when it obviously couldn't have gotten any closer than it was, everybody is trying for just the slightest competitive edge and we are seeing that in where they're going and what they are saying and the kinds of photo ops that they are trying to implant in peoples' minds just in the closing hours. And then of course, events. What is going to be on peoples' minds in that last weekend? I mean typically things do occur as we get closer to Election Day and certainly this is a situation where people, what is in peoples' perception as we hit that voting booth on Tuesday is just so important in just getting the slight competitive edge that these people are both craving so much.
TULLY: Lee, do you see a record turnout? We are seeing numbers like as much as 60 percent, 10 points above the average. Could that happen and who would that favor?
MIRINGOFF: Well, I mean right now, it's unclear again because the turnout -- who it's going to favor, but, yes, we are seeing an enormous potential. We're seeing more people registered to vote. We're seeing a greater share of them indicating that they are so-called likely voters and it could be as much as 10 points higher than it was four years ago. So then the answer is, is this the base of Kerry's supporters, the Democratic base upset with George Bush over these four years or is it the Bush supporters who have been so coveted by the Bush campaign from the beginning looking to give him another four year lease on the White House. That's unclear yet. When you look at likely voters, most of them slightly tip a little bit in Bush's direction over registered voters but still, anybody's guess. This is in some ways the easiest election to analyze, but the hardest to predict because of the closeness.
LISOVICZ: I'm going to make a prediction Lee. I'm going to make a prediction that you're going to have many more sleepless nights.
MIRINGOFF: But not watching the Yankees. I would have traded those happily tonight.
LISOVICZ: Thankfully that is over for now until next season. Lee Miringoff, president of the National Council on Public Polls. Good to see you. Come back soon.
MIRINGOFF: My pleasure.
LISOVICZ: When we come back, the making of a swing voter. We'll look at why people switch from undecided to unshakable.
And forget the polling place, this one could be heading for the courthouse, again. Super lawyer David Boies will tell us about the legal fights shaping up around the election.
It takes a candy addict to tell you what a candy addict wants. We've got one standing by to talk about some of America's classic treats.
LISOVICZ: Forget what the presidential candidates say about the issues. The real test may be how they say it and whether they seem like they're telling the truth when they say it. Our next guest says that is the key to winning the swing vote. Howard Gardner is a professor at the Harvard Graduate School of Education and a winner of the prestigious McArthur prize. He's also the author of "Changing Minds, the Art and Science of Changing Our Own and Other Peoples Minds." I bet a lot of people are reading that book right about now, professor. The way I look at it is there are seven keys theoretically to changing a person's mind. But you can throw out a number of them. Like, for instance, reason and research in a presidential election. Why is that?
HOWARD GARDNER, HARVARD UNIVERSITY: Reason and research are important to people who are pundits and who spend all their time pouring over the newspaper and the speeches. But the truth is most of the voters don't have time to do that and most of us often don't have enough data to really judge when somebody says well, the tax cut's going to have such and such consequences on medical expenses. So reason and research are really not the kind of gut issues that end upper persuading voters when it comes down to the wire.
TULLY: Howard, one of the things that you've been saying about the election is that most people are going to make up their minds on the trustworthiness of the candidates and of course Bush would seem to have the advantage because he is seen as a resolute leader. On the other hand Kerry has been able to portray him as very, very stubborn and very, very wrong. How is that balance working out right now?
GARDNER: I think that the most important thing is whether the viewer or the voter gets a feeling that they know what the person is going to do over the next three or four years and Bush was very successful early on at portraying Kerry as being a flip-flopper. And if a person is a flip-flopper, of course you don't know what they're going to be doing next week let alone four years from now. What Kerry has tried to do is to say look, it's one thing to be consistent but if you are consistently wrong, you don't want to be like that (ph) with somebody for four years.
I frankly think at this point, it's pretty much a wash. What we don't know is whether there will be some real world events that could really shake people up. If there were a terrorist attack for example, that could have tremendous effects. Another thing interesting enough is happens if, for example, Vice President Cheney has a severe heart attack and is either disabled or dies? That's a real world event.
And a lot would depend there on whether President Bush says he's simply going to go by the constitution which means that the speaker of the House or the president pro tem of the Senate becomes the vice president. Let's say he hints it might be Colin Powell, or let's say he hints it might be John Ashcroft. That could change the election dramatically. But the whole point about a real world event is you can't cause it. It just happens, whether it's a flu shot loss or whether it's some kind of a terrorist attack. It's not something you can control.
WASTLER: Professor, OK, barring an unforeseen event like you discussed, it seems to me that for the last three months, as the debates going on and different ad campaigns start up, you have the same sort of percentage of undecideds and they swing this way and then they swing that way and oh, this happened and swing that way. Can you tell me a little bit about who these people are, what makes them a swing voter like that and what do the candidates need to do to make them unswing?
GARDNER: I think the swing voter has been more mysterious than you suggest. Three months ago it was estimated there were only 4 or 5 percent swing voters. But we have seen swings in the polls of 10 to 15 percent. So it may be that people don't actually know if they are swing voters or not. I think though there are two types. One type is the person who really is pretty ignorant, doesn't know very much, does not have the patience to even watch the debates and the big question is whether they're going to vote at all and probably they're going to just vote on impulse. The other group, which I think is what the candidates are really trying to speak to is the group that feels inside deeply divided.
Let's say that you are a tremendous patriot and you really want to support your president and support the war. At the same time you hate deficits and you really think that's going to be the down fall of the country. If you are deeply divided -- and I think the last ad that you see, the last conversation that you have, the last speech that you watch, the most vivid memory you have of the debate, may in the end decide which way you're going to go.
On the other hand, let's say you are a person who deeply has misgivings about Iraq and you really want to vote for Kerry, but you're just not sure that he isn't going to change his mind next week about something. Again, the last person you talk to, the last ad that you see, the last dream that you have, any of those things could tip the balance. That's what the candidates are focused on because like the people who are ignorant, you probably won't even be able to reach them very much between now and the vote less than two weeks away.
LISOVICZ: Howard Gardner, professor at the Harvard graduate school and author of "Changing Minds, The Art and Science of Changing our Own and Other Peoples' Minds," both parties trying to do that desperately in the final days leading up to the election. Thanks for joining us.
GARDNER: Thank you.
LISOVICZ: Coming up after the break, the bark and the bite. New York Attorney General Eliot Spitzer is making trouble for AIG as he launches his insurance investigation. See if the watchdog attack is shaking up investors.
Plus it only starts at the polls. Litigator David Boies fought for Al Gore in the last election. Find out why the lawyers are lining up for this one.
(INAUDIBLE) see what happens when you put a twisted mind, a sharp blade and a Halloween pumpkin in the same place. Our fun site of the week is ahead.
LISOVICZ: Now let's look at the week's top stories in our "money minute." The real estate market remains white hot as new mortgage applications rose this week, while mortgage rates fell to a six-month low. Freddie Mac says average loan rates on 30-year mortgages are below 5.7 percent.
Merck is definitely feeling the effects of the Vioxx recall. The company says its third quarter profits fell 29 percent, reducing earnings by $553 million. The company pulled Vioxx on September 30th after the medicine was linked to heart attacks and stroke.
And the future looks brighter for MBA students hoping for a good job after graduation. Many of the nations business schools say on- campus recruitment is up. Investment banks and consulting firms are the ones most aggressively looking for new MBAs.
WASTLER: Well, New York's crusading Attorney General Eliot Spitzer is at it again. This time he's after insurance companies for paying kickbacks to brokers in return for steering customers to them. Spitzer says the practice is similar to mob tactics. Now insurance giant AIG is one of those companies Spitzer is probing and that's helping the stock down to close near its year low, ouch.
Meanwhile, AIG is the subject of another Federal investigation looking into whether it sold policies to companies that were used to falsely boost earnings statements. This is all happening as AIG announced disappointing earnings numbers this week because of all the hurricane-related claims to the south. AIG in the middle of it all is our stock of the week.
LISOVICZ: Talk about a perfect storm.
WASTLER: Snake bit doesn't even begin. If you were holding the stock, you took about a 14 percent hair cut since Eliot Spitzer announced the initiative and it's just, what to do?
TULLY: And all, this whole word, special purpose entities that AIG is being accused of setting up, that recalls Enron.
WASTLER: It conjures up, because Enron was doing the same sort of thing, OK, you do a trade and because you can count the numbers differently in different parts of the accounting statement, it makes it suddenly look like you don't have all that much of debt on your books.
LISOVICZ: The other thing it just reminds me of is the conflict of interest that are inherent in these types of businesses, right. I'll get you a good price and you're going to steer me business and who loses out is the consumer. It kind of reminds me of what happened with the brokerages when we had that landmark settlement is that the research analysts weren't giving a fair unbiased opinion of the stock because they were trying to get business, the M&A side of the firm was trying to get business with the same companies.
TULLY: Yeah and in this case what you've got is you've got the brokers in the middle who are supposed to get you the best deal by talking to a lot of different insurance companies and actually holding kind of an auction and getting you the best pricing and really what they are doing is supposedly or what they're accused of doing is rigging the pricing so they really get these big monopoly profits and they get kickbacks for doing that.
WASTLER: And so the question for investors really at this point is probably whether or not these investigations, whether or not AIG can just, OK, we'll pay the fine. We won't admit fault. We're very sorry. We won't do it again and try to make it go away that way or if it's going to hurt the way that the company gathers revenue. If it goes to enough of the industry practices, it affects how much business AIG, that's where you got be concerned.
LISOVICZ: And that's an uncertainty and we know how Wall Street feels about uncertainty. The stock may have lower to go.
WASTLER: I wouldn't doubt it.
LISOVICZ: Thank you guys. Coming up on IN THE MONEY, defending the vote. David Boies went to bat for Al Gore in Florida four years ago. We'll ask him how this election is shaping up legally speaking.
Also ahead, riding a sugar high. We'll ask the author of "Candy Freak" for the lowdown on the stuff you (INAUDIBLE) or not so secretly crave.
And it will search but will it deliver? Google had a headline making debut on Wall Street. We'll see if all the fuss was worth it as we check the first results.
WHITFIELD: Hello, I'm Fredricka Whitfield at CNN's global headquarters in Atlanta. We will return to IN THE MONEY in a moment. But first, here are some stories now in the news.
President Bush and Senator John Kerry continue to pound home their messages in crucial swing states. Mr. Bush is visiting four different cities in Florida today, while Senator Kerry campaigns in Colorado and later in New Mexico. The election is 10 days away. U.S. Secretary of State Colin Powell arrived in Japan today, the first stop on a three-nation tour of east Asia. Last night he rejected new conditions set by North Korea before it returns to talks about its nuclear weapons programs. Powell says North Korea should simply bring its concerns to the multilateral talks he is trying to revive.
American astronaut Michael Fink is about to return to earth following a six-month stay aboard the international space station. He and two Russian cosmonauts will begin their ride home in a Russian capsule later today. Fink looks forward to meeting the baby daughter his wife gave birth to while he was in orbit.
If the photographer who got roughed up by Prince Harry is waiting for an apology, he can stop holding his breath. A royal spokesman told BBC the 20-year-old prince does not plan to say he's sorry. He says the prince was surrounded by a mob of aggressive photographers on his way out of the nightclub provoking the altercation.
I'll have all the day's news at the top of the hour on CNN LIVE SATURDAY. Now back to more of IN THE MONEY.
LISOVICZ: Early voting is already under way in several states. The rest of the nation still has to wait a little more than a week. But will a new president be named on November 2nd or will this election like the one before it, be decided in the courts? CNN legal analyst Jeffrey Toobin joins us now with a look. Oh no, please say no Jeffrey.
JEFFREY TOOBIN, CNN LEGAL ANALYST: Well on behalf of the federation of American legal analysts, we are supporting a long recount. But the rest of America is certainly
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