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CNN IN THE MONEY

Bush Budget in Congress; Health Care Costs Rising; Dating Tips from Jane Austen

Aired February 13, 2005 - 15:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEOTAPE)
ANNOUNCER: From New York City, America's financial capital. This is IN THE MONEY.

(END VIDEOTAPE)

JACK CAFFERTY, CNN ANCHOR: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY:

The president's plan of spending your money: The Bush budget proposal whipping up a storm in Congress. We'll ask a top economist how he's put $2.5 trillion-plus to work next year.

Plus, sick body, sick bank account: Health care costs out of control. Insurance coverage is shrinking, see what's behind it and what, if anything, can be done about it.

And real-life dating tips from people who don't exist: Meet some financial characters -- I'm sorry, fictional characters. I got confused. I thought this was a business show. Fictional characters who can help you do better at romance.

Joining me today, a couple of IN THE MONEY veterans, CNN correspondent Susan Lisovicz, "Fortune" magazine editor-at-large. Andy Serwer.

Well, President Bush is apparently close of to getting his first significant legislative victory of his second term. The senate passed a bill addressing the subject of tort reform, which is near and dear to President Bush's heart. It is designed to seriously limit the number of class action lawsuits that are brought, particularly at the state level. The legislation will simply bump them into the federal courts where the restrictions on these things are much, much tighter. The bill is expected to pass the House. Something, I guess, for the president to cheer about early in the second term.

ANDY SERWER, "FORTUNE": You know, it kind of snuck up on up on us with all of the attention on the new budget. We didn't really see this, and social security. This is an important piece of legislation. And I think that most Americans would agree that the pendulum had swung too far in terms of favoring trial lawyers even though I think it's very, very important for Americans to be time sue big companies, to be able to get awards, to be able to cover damages. You could argue that things have gone too far. And I think by virtue of the fact the senate voted pretty very strongly in favor of the president, it shows that the people are behind this.

SUSAN LISOVICZ, CNN CORRESPONDENT: And I -- to Andy's point, I think everybody likes the idea of tort reform, but there are plenty of groups that are against it: Civil rights groups, consumers groups...

CAFFERTY: Lawyers.

LISOVICZ: Labors groups, again....

CAFFERTY: Lawyers.

SERWER: Lawyers.

LISOVICZ: Attorneys.

CAFFERTY: Lawyers.

SERWER: Lawyers.

LISOVICZ: They say that it takes away important protections for unscrupulous companies. Also, some of the federal courts don't like it either, because they say it's going to really clog up the federal courts, the last thing you need.

CAFFERTY: Well, except that a lot of these cases will never be filed because the restrictions in the federal court -- they're not allowed to take cases that have to do with state laws that apply in more than one state. So, the minute one of these class action suits involves more than a single state, it's automatically, as I understand, ineligible for being considered on that federal docket. However, given the fact that that also is the end of the road for people bringing those action and that they would virtually have no other options if it's turned down at the federal level and perhaps it might be a legitimate case where real grievances have been done and damages are warranted, then there'll be a federal judge, you can, bet that'll take a look at a way to get this thing heard.

SERWER: Did John Edwards sponsor the bill?

CAFFERTY: Probably not.

SERWER: I don't know if he did. I don't think so. A couple of insurance company stocks were up on the news because they were facing some class action. Particularly AIG, I noticed.

CAFFERTY: Yeah, the other area, of course, that they want to get at is medical malpractice and asbestos.

SERWER: Yeah.

CAFFERTY: Those are not included in this, but that's the other part.

SERWER: So much stuff there, yeah.

CAFFERTY: That high-pitch roar you hear from Washington these days, part of it can be a howl of protest for President Bush's proposed 2006 budget. It's full of ideas that made a lot of democrats mad, and some republicans, too. Among them, higher airline security fees, and big agricultural cuts. They are, once again, visiting the agricultural subsidiaries, it happens every year, nothing ever happens. The agricultural subsidiaries are a matter of law. They must be paid unless Congress votes to change that. Don't hold your breath.

The president started his campaign to sell the $2.7 trillion plan, this last week. He's calling it the most disciplined federal budget in 20 years going back to Ronald Reagan. Nobody expects to get a smooth ride on Capitol Hill and don't forget that it's the president who proposes and the Congress who decides what, in fact, will ultimately happen. We want to get a second opinion on how Americans should spend this kind of money, so we called up a man who knows about these things. John Ryding is the chief U.S. economist for Bear Stearns, here in New York City.

John, haven't seen you in a while. Welcome to the program.

JOHN RYDING, BEAR STEARNS: Jack, it's a pleasure to be here as an Englishman, let the record show.

CAFFERTY: Let the record show, absolutely.

SERWER: There you go.

CAFFERTY: President Bush has vowed to cut the deficit in half in four years. This is a $2.57 trillion spending proposal. It includes no cost for the wars in Iraq or Afghanistan. No cost of his proposed social security overhaul. No cost for make the tax cuts permanent. Is there any way on god's green earth that he can cut the deficits in half spending this kind of money without including these other items that are going to be there over the next four years?

RYDING: Well, I think it is doable, but I think it's going to come about because of the strength of the economy and the revenue gains that that economy is likely to deliver. But, we do need spending discipline and I will call this a modest start on trying to reinstitute spending discipline. But the one thing you didn't mention that's missing and it's probably too tough to tackle is the burgeoning medical cost that the government is incurring through the Medicare program, and that, in many ways is, every bit as problematic as social security as you go further out.

LISOVICZ: So, and so are you satisfied, John, with the way the president has addressed it in the budget?

RYDING: Well, I think you have to look at the political realities and say, look, here we are, he's trying to draw the line, and limit domestic discretionary spending growth. And that was a good start and I think agricultural subsidiaries and showing he's willing to go after agricultural subsidiaries, is a very hot political topic (UNINTELLIGIBLE). There have been times when farmers have gone to Washington, protested the federal reserve, taking tractors and so on down the -- it's a real political issue. So, I think that shows a willingness to tackle difficult problems, just as the attempts to tackle social security. So I call it a good start. But the problem is, most of the spending issues over the long term don't come from discretionary problems, they come from social security and they come from Medicare and they come from Medicaid.

SERWER: John, ask anyone who has run for president, and they will tell you the budget deficit is not a political hot potato. Americans don't care that much about it and I want to ask you whether they're right. What is the impact of the budget deficit? How much does it impact the economy? And how much does it hurt our economy?

RYDING: I think that's a great question, because we've had a lot of bad economics in the recent years about the budget deficit. Specifically, the goal of running a budget surplus, I think was a misplaced goal. We're a growing economy, we have a modest national debt in relation to countries like Germany and France and Japan. And therefore, I think a $400 billion budget deficit, which sounds like a big number, and it is a big number, but it's less than four percent of GDP, it's manageable for a while. I think over time the goal to cut the deficit to around $200 billion, a little under two percent of GDP is right. There's going to be no disastrous consequences in the economy, of current budget deficit sizes in the short term, as the very current, very low level interest rates show.

CAFFERTY: Let me go back, John, to the agricultural subsidiaries, as a symptom, if you will, of what critics say is wrong with this budget. Every president, for the last 50 years, has said we got to cut agricultural subsidiaries. And every Congress over the last 50 years says, over my dead body, it ain't going to happen. And you mention tractors go to Washington, the farmers protest, and in the farm belt states, the senators and representatives, which aren't as numerous as they are in other states are very, very sensitive to the constituencies that say, "we want the subsidiaries, don't mess with them or you lose your job."

The critic of this budget have said that it's simply a document that the president's come up with that he can dump in the laps of Congress and then when things like repeal of agricultural subsidiaries didn't happen, the president can say, Congress didn't do anything do to control spending. Is that a fair criticism?

RYDING: Well, it is very difficult to, in a budget document, to make policy, and that's why social security isn't in there, and that's why some of the other elements aren't in there. The budget document is only the beginnings of a framework and spending out terms often have very little to do with budgets that are submitted. So, I think what this is in an attempt to do is to get Congress to focus on the issue of the growth of discretion of spending. Congress may make different choice and they're free to go ahead and do so. But I do think the important overall tenure has to be, we need to restrain spending growth because spending growth has been running far too rapidly for the last few years.

LISOVICZ: John, just quickly, we hear what you're saying, that the president and Congress should reign in spending. Social security wasn't included in that. You're at Bear Stearns, you want to see the deficit narrowed, but you're going to -- you would stand to benefit if social security was privatized. Where do you stand on that?

RYDING: Well, first of all, I think personal ownership of social security is a great idea for individuals who will have those personal accounts. And we have written somewhat favorably on account of that. Having said that, social security as the president put forward, you know, there's a slight catch to it, which is, you have to do better than a three percent real rate to make it worthwhile opting out of social security. So, you know, even there, there are difficulties with the plan as currently put forward, but I don't think it's about Wall Street benefiting. The fees are going to be very small in the plan. It's going to be based off of the thrift savings plan that government employees have access to in place in social security. And I think that the principle of personal ownership is a very good idea. I think there are some practical difficulties yet to be solved with the plan as currently constituted.

CAFFERTY: John, we got to leave it there. It's a pleasure to see you again. Thanks for coming on.

RYDING: Nice to be here, Jack.

CAFFERTY: John Ryding, chief economist at Bear Stearns.

When we come back on IN THE MONEY:

Too bad you can't send your wallet ER: We'll look at the rising cost to health care and see what it means to you.

And, plus chaperone not included: Find out how some old school dating advice could live up your love life, today. We offer everything here on IN THE MONEY including romance advice.

And one sign, two messages: See what happens when people don't communicate clearly. That's on our "Fun Site of the Week."

(COMMERCIAL BREAK)

CAFFERTY: If all the talk about changing health care in this country has put you on edge, this might push you right over it. According to a new study, illness and medical bills cause half of all personal bankruptcies. Three-quarters of those who when bankrupt due to medical expenses had insurance at the time the illness set in. Should you be concerned? Yeah, I think so. Our next guest thinks so too. Dr. David Himmelstein is the co-author of the study and an associate professor of medicine at Harvard Medical School.

Doc., nice to have you with us.

DR. DAVID HIMMELSTEIN, HARVARD MEDICAL SCHOOL: Thanks for having me.

CAFFERTY: The United States is the only civilized country in the world that has been unable to figure out how to give health care to its citizens. It's a national embarrassment. What's the problem?

HIMMELSTEIN: Well, the problem is that basically no one's safe in this country. Maybe the exception is Bill Gates. But other than that, if you get sick, you're in danger of financial ruin. Most of the people who go bankrupt from medical problems are middle class people who had insurance, they were doing everything right, and they got sick and ended up in the poorhouse.

LISOVICZ: OK, and the study that you cite is one that you authored, that generated a lot of headlines. Is this a new phenomenon? In other words, has this been developing over a long time, or is this something that's a newer development and why is it?

HIMMELSTEIN: Well, there were always some people ruined by medical care bills and illness, but numbers are skyrocketing. Since 1981, there's a 2,300 percent increase in the number of people ruined by medical bills. So, yeah, it's been going on, but it's getting a lot worse recently.

SERWER: Doctor, having said that, though, we have the most expensive health care system in the world. We spend more per capita on health care. I'm wondering, is it worth it? I mean, this is a very difficult question to answer, obviously, but is there a payoff?

HIMMELSTEIN: Well, we get terrible value for the money we spend. Most other developed nations that we'd compare ourselves to live longer, they have lower infant mortal iterates and better outcomes of many kinds of medical care. At its best, American medicine is terrific. But we do badly with many things that we ought to be doing better on. And for the amount of money we spend, we get extremely poor value.

CAFFERTY: Who's the culprit in all this? Is it the HMOs, is it the insurance companies, is it the pharmaceutical companies, is it our beloved politicians in Washington? Where does the blame belong?

HIMMELSTEIN: Well, I think it's all of the above frankly. We have a system that's mainly designed to get profits and paperwork for large numbers of people. It's a great make-work system, but it serves patients and their families very poorly. So we're spending about $300 billion a year on useless paperwork which is mainly to keep the insurance companies in business. And we give the drug companies outrageous prices for their drug drugs. Our Congress just voted that we shouldn't be allowed to negotiate prices with drug companies and that's just a way of saying, "let's just let them remain the most profitable industry in America."

CAFFERTY: Well, and it's not just patients and their families that are being snowed under by the paperwork in the bureaucracy. People don't want to become doctors anymore. They can't make any money, they have to hire entire staffs just to handle the forms and all the junk that's involved in trying to deal with the government if you take Medicare and Medicaid. I mean, it's impacting literally every facet, except for the people whom own big shares of insurance companies and pharmaceutical companies and they're getting fat.

HIMMELSTEIN: Now, you're exactly right. I mean the average doctor has about two people in their office doing nothing but paperwork, today. And American hospital, every time we close a ward because we -- the HMOs tell us we can't have people in the hospital, what we do is we open a new executive office because we've got to have people to fight with the insurance companies to get dollops of payment out of them.

LISOVICZ: So, how do you do that then? How, Doctor, do you eliminate paperwork and bring the prices down? What would you propose?

HIMMELSTEIN: Well, national health insurance program, a very simple program clearly could do it. Canada's program works reasonable well, they don't spend enough money on health care. They spend about half what we do per person, but most of the savings are actually on bureaucracy, and they deliver quite good care, so the average Canadian doctor spends almost no time and no money on the paperwork in their system and their hospitals have only about half as much paperwork as we do. Their national health insurance system is much more efficient than our private health insurance system. We spend 15 cents of every premium dollar on the insurance company's overhead and profit. The Canadian system runs for about 1 cent on the dollar. So for every $1 they spend on health care, they get 99 cents worth of care. We get about 85 cents and that's a big difference.

SERWER: David, having said all of this, isn't the writing on the wall, though, a little bit for the pharmaceutical companies; the game is up, the end of an era? We see the class action lawsuits against some of the biggies with regard to Celebrex and Vioxx. Also, people are starting to catch on their game, in other words, they were subsidizing by paying high drugs here and we're subsidizing by the rest the world and we can avoid that by going online to Canadian pharmacies. Is this the end of an era, do you think?

HIMMELSTEIN: I think you're right, that the drug companies are in here in a fall. But, they're playing the game pretty hard there, they are major players and they have a lot of clout in Washington and in state legislatures around the country. So, I wouldn't count them out too soon, but I mean, it is striking that Canadian drugs we talk about importing are largely American drugs that we talk about importing are largely American drugs that have been sent north of the border and then we're going to bring them back from Canada. Would it be a lot easier to import Canadian prices than Canadian drugs.

CAFFERTY: I mean, you see it, I see it, Andy sees it, Susan sees it. How come they're allowed to get away with this kind of a three card monty bit of nonsense in Washington, D.C.? I mean, who write these rules? That you can't buy cheaper drugs north of the border? How come we can't? Who's behind the idea that we're prohibited from exercising freedom of choice in this country and making the best deal we can make as consumers?

HIMMELSTEIN: Well, I think the drug companies are clearly behind that idea. They spend more on lobbying than just about any other lobby in Washington, and they're, at this point, I hate to say it, but they're buying our Congress and much of the executive branch with it. So, that's really the problem, and if you ask the American people what they want, 60 percent of Americans say they want national health insurance. But our Congress treats it as if it's an unthinkable thing to do. LISOVICZ: And it should be said that Congress has a pretty enviable health care plan, is that right?

HIMMELSTEIN: Right. I mean, Congress is one of the few groups in the country that has a universal lifetime coverage. And they voted that themselves at taxpayers' expense.

LISOVICZ: Not surprised. David Himmelstein, M.D., associate professor of medicine at Harvard Medical School. Thank you so much, Doctor.

HIMMELSTEIN: Thanks for having me.

LISOVICZ: Coming up after the break, rebellion in the boardroom as Hewlett-Packard gives its leading lady the hook, discover what market makes of it.

Plus, a hide luck a rhino: We will hear the story of a battlefield classic that found a home in Middle America.

And they used a horse, you use a mouse: Discover how the characters from one author's classic novels can help straighten out your love life.

(COMMERCIAL BREAK)

LISOVICZ: Now let's take a look at the week's top stories in our "Money Minute." Former WorldCom finance chief, Scott Sullivan, pointed the finger squarely at former CEO, Bernie Ebbers, in the WorldCom trial. Sullivan described Ebbers as a hand's-on CEO who knew about, and sometimes even planned shady accounting practices that led to $11 billion worth of accounting fraud at the telecom company. Ebbers denies any wrongdoing, but he hasn't decided whether he, himself, will testify at the trial.

Wal-Mart says it's closing a Canadian store where about 200 workers were close to winning the first-ever union contract with the company. Wal-Mart says it's shutting the store in Quebec because of unreasonable demands from union negotiators. The union promises to fight the move.

And now, you can dive into the dating scene with the click your remote. Cable operator, Comcast, is launching a video-on-demand service this Valentine's Day that it calls "Dating on Demand." Adults who want to broadcast their availability can do so by preparing a three to five-minute video.

SERWER: The new song in Hewlett-Packard is "Carly's gone and oh, I love the stock right price, right now." Well, maybe that's kind of a lame attempt at an old Hall and Oates song, but shareholders were certainly celebrating Fiorina's ouster earlier this week. But where HP's problems -- were HP's problems really her fault? Despite the recent run up, Hewlett-Packard shares are still well off of their five-year highs. The post-Carly Fiorina Hewlett-Packard is our "Stock of the Week." And you know, I don't whether it's her fault, but it's her responsibility, because she was the one who fought tooth and nail to merge her company with Compaq, a $20 billion deal, and what it did is it doubled down in a business that was a dog and in the process, she gave away 30 percent of the crown jewel HP business, which is its printer business, and take a look at me now, and it's in the a pretty picture. And that's why the board said, your strategy did not work, you're toast.

LISOVICZ: And Wall Street immediately reacted, the stock was the most actively traded issue at the New York Stock exchange.

SERWER: Hundred million shares, yeah.

LISOVICZ: It rallied eight percent, settled maybe about seven percent. The point is, it's still way off maybe a third of all what its all-time highs were five years ago.

CAFFERTY: It should be pointed out that your other employer, "Fortune" magazine may have had a role in helping the board at Hewlett-Packard come it a decision that maybe they were headed toward anyway, but tell us what happened?

SERWER: I think that's right, I mean, my colleague Carol Loomis wrote a scathing story about Carly Fiorina and questioning the strategy of the Compaq deal, it's possible that board members saw this story and asked her, "hey, what about this?" And she had -- didn't have an answer because the numbers don't lie. It's devastating and one other thing I think I should point out. A lot of people on Wall Street are hoping and praying that this company will split up. But let me tell you something, splitting this company up into a PC business and printer business might not be a panacea. And the reason is, not only is Dell, it's archrival going after the PC business, which has done a remarkable job, but now it's going after the printer business, as well. And there's no stopping Michael Dell when he gets his nose going on something. And they're going to really go after this because it's a very high margin business and Michael Dell wants a piece.

CAFFERTY: I wonder if Michael Dell might just take 'em over one of these days.

SERWER: Well, I don't think he will because, why bother?

CAFFERTY: Why bother, he'll get it anyway, right?

SERWER: Right. He can just get it anyway. One other interesting point I think is the whole question of, you know, would -- is this a big story because she's a woman? And I think it is a big story, the media picked up on it because she's a woman, but it didn't have anything to do with whether or not she was ousted. She was ousted because she didn't get the job done.

CAFFERTY: If you can make the stockholders money, you can be a chicken and run the company. It doesn't matter.

LISOVICZ: That's right. She got a lot of initial press because she's a woman. Let's face it. The representation among fortune 500 companies is abysmal for the women that are in the workforce...

CAFFERTY: Maybe this is one of the reasons why.

SERWER: Oh, now see, that's the kind of stuff, Jack.

LISOVICZ: She was fired by a board that had a backbone and we haven't seen it lately and there have been plenty of other companies where shareholders are clearly dissatisfied.

SERWER: And no permanent successor named yet. We'll have to watch that one.

SERWER: Coming up on IN THE MONEY:

Forget middle of the road, whether you love to hate it or love to have it, everybody has a take on the Hummer. Find out how a military design wound up on Main Street.

Also ahead, love stories: See how a bunch of old movies could tell you just what you need to know about romance.

And, signs of trouble: We'll show you some signs that say more than they mean on our "Fun Site of the Week."

CHRISTINE ROMANS, CNN ANCHOR: I'm Christine Romans at the CNN Center in Atlanta. IN THE MONEY continues in just a moment. But first, a look at what's now in the news.

In Iraq, the final but uncertified results in last month's historic election were announced today. The United Iraqi Alliance finished first in the balloting with 48 percent of the vote. Iraq's national security adviser said the new government would help bring unity to the country, Shiites, Sunnis, and Kurds.

MOUWAFFAQ AL RUBAIIE, IRAQI NATL. SECURITY ADVISER : This is going to be a government of national reconciliation. A government of national unity, a national coalition. All communities, all three communities are going to take, literally, a very strong position in this government.

ROMANS: As the results come out, more loss of life for U.S. troops serving in Iraq. In Balad, 50 miles north of Baghdad, three U.S. soldiers were killed when their vehicle flipped into a canal. The incident occurred in the predawn hours, and is under investigation by the army.

China is reportedly pushing North Korea back toward the table, after North Korea demanded direct talks with the U.S. last week. That word from South Korea's foreign minister on CNN's "Late Edition." The U.S., China, South Korea, Russia and Japan have been talking with the North Koreans of putting an end to their nuclear program.

More news coming up in 30 minute. IN THE MONEY returns right after this break.

(COMMERCIAL BREAK) SERWER: All right, it's a long road from the battlefield to the little league field. But the Humvee known in its current form as the hummer has made the track suburbia. And it has managed to anger quite a few people along the way from environmentalists to consumer advocates. Automotive journalist Marty Padgett chronicles the rise of the Hummer in his new book "Hummer: How a Little Truck Company Hit the Big Time." Thanks to Saddam, Schwarzenegger and GM quite a list. Welcome Marty.

MARTY PADGETT, AUTOMOTIVE JOURNALIST: Thank you. Thank you for getting the title right.

SERWER: I did it. Listen, I want to ask you. Isn't the Hummer a little it kind of over at this point with gasoline prices rising and sales a little bit stalled?

PADGETT: Well, if you talk to the executives from GM, it is actually receding to a point that they expected but culturally, you might look around and see the gas prices and wee the anti-SUV backlash and you might think yes the Hummer is over, and SUVs might be over as well.

CAFFERTY: Well, as far as I'm concerned as soon as they're all over, that'll be fine. What is the attraction of this big, ugly looking, gas guzzling freak car? I mean, it is just -- you see them on the streets of New York. It is just mind boggling. Why would anybody want one of these?

PADGETT: Well, I think it's uniquely American. These people identify with a red state mentality which is very popular to want to take a piece of America with you on the road and off the road. And, GM did a very smart thing and realizing that there was a growing fascination with military culture and they hopped in it at the right point and took Hummer into something bigger than anyone ever anticipated.

CAFFERTY: What is it that motivates people to buy one of these? Maybe I didn't phrase the question -- why would I go out and say, gee, I have to have a Hummer?

PADGETT: Well, GM says that these people are self-employed, they're self-starters. They're patriotic and they see themselves as dare takers, the risk they take might not be driving a convoy in Iraq. It might be making a huge stock sale. But they picture themselves in the same level of risk.

LISOVICZ: Marty, but I don't see that because, you know, and I don't mean to offend any Hummer owners but guys that I see driving Hummers wouldn't know how to put up a pup tent. They consider a hike, you know, walking from their car to the 7-Eleven.

SERWER: Listen to you.

LISOVICZ: Wearing the matching, you know, gym outfits. They just don't look like they belong trim and fit and ready to serve the country. So, sort of appealing to the fantasy, right? It is just a brilliant marketing campaign but where does GM go now, if in fact, they have to offer incentives?

PADGETT: Good question is where they go now, obviously. Where they're going is with a smaller, kinder, gentler Hummer. It is based on smaller architecture. It has a five cylinder engine instead of a V8 and it could get as much as 20 miles a gallon.

SERWER: Well, leaving aside Susan's little Freudian exercise there --

LISOVICZ: Hummer.

SERWER: The women buy them, too.

PADGETT: Yes, there are women that buy them too.

SERWER: A good friend of mine got one, actually and grew a goatee I think he was having mid life cries but he said he was the hero in the neighbor because he towed all the mom's cars out during a big snowstorm the past winter. But what I'm wondering is can this car really continue to sell? Can this vehicle really sell, say five years down the road? Is this really a legitimate model line for GM or is this thing just going to go by the by, just a fad?

PADGETT: Well that is a good question. GM has kind of built on the business plan that Hummer might eventually sell 100,000 vehicles a year, and that would include all the different version the big H2 and the smaller H3. Nobody's sure. Nobody's sure if SUVs are already starting to evolve into smaller, more compact and more fuel efficient vehicles. I think if you look at the auto show coverage from this year, you will see that manufacturers are really emphasizing these crossover vehicles that are based on cars rather than the truck based SUV's.

LISOVICZ: Marty, is there anything else on the horizon that sort of smacks of this kind of coolness or got to have? The hybrids for instance. Some of the Japanese hybrids have on the waiting list. Do you see anything on the horizon that is going to rival this?

PADGETT: Well that's the interesting other side of the pendulum. For every red state buyer who wants to have a Hummer H2, there's a blue state buyer that wants a Toyota Prius. And hybrids makes sense in cities and even makes sense on highways but again, it's all about image, it is all about what you want to tell people about what you're driving and who you are. Hummer says you're daring. The Prius says you're caring.

LISOVICZ: And Marty you know what question I'm going to ask you. What do you drive?

PADGETT: I have to say I have an SUV but I also have a Toyota. Prius.

LISOVICZ: Oh.

SERWER: At least both.

LISOVICZ: He's tough and he's sensitive. He got it all.

SERWER: Marty?

CAFFERTY: Moving with caring.

LISOVICZ: Marty Padgett author, "Hummer, How a Little Truck Company Hit the Big Time Thanks to Saddam, Schwarzenegger and GM." Thanks for joining us.

PADGETT: Thanks.

LISOVICZ: There is more to come here on IN THE MONEY: Up next, hot plots, this Valentine's Day weekend find out how some literary classics could get your love life moving.

And the digital blood hounds. Find out if the analysts think Google is a good place to park your cash after meeting with the search engine company.

(COMMERCIAL BREAK)

LISOVICZ: Forget he is just not that into you. Perhaps the greatest advice on dating comes from an author who could have written a book called "He's Just Not That Into Thou." We're talking about Jane Austin. Her influence on the literary world and Hollywood is still going strong nearly 200 years after her death. Our next guest says Jane Austin's books can also teach women how to date successfully.

Joining us on this Valentine's Day weekend is author Lauren Henderson. Welcome. Hi there Lauren. So does that mean that instead of kissing me on the cheek, that the man should -- the gentleman should kiss me on the hand? That he should be reciting poetry? That he should lay his coat down on the street when it rains?

LAUREN HENDERSON, AUTHOR, "JANE AUSTEN'S GUIDE TO DATING:" Well, that's all lovely, isn't it.

LISOVICZ: It is.

HENDERSON: We complain if someone did that. I do actually put in the book that a very good sign of a man being romantically interested in you, not just sexually, if he does things like kiss you on the hand or kiss you on the forehead when he says good night. That's very romantic.

SERWER: Lauren, you know, I think that my understanding is that you said that women should be more direct.

HENDERSON: Yes.

SERWER: More honest. This is startling stuff. That you should, you know, if you like a guy, you should call him back, tell him.

HENDERSON: Someone needed to say that.

SERWER: Yes, I guess so. HENDERSON: I really think someone needed to say that. As you can hear, I'm English.

SERWER: Yes.

HENDERSON: And I think --

SERWER: I can hear that.

HENDERSON: When I moved to America, I was so baffled by the American dating rules that becoming single and dating again, and sort of learning to do it again and trying not to be too American about it was the inspiration for writing the book and part of that is absolutely showing a man you like him if you do it. It seems common sense to me.

CAFFERTY: Give meet than Jane Austen-esque take on this Prince Charles situation.

HENDERSON: Don't get me started.

CAFFERTY: Oh, OK.

HENDERSON: It's unprintable, really.

SERWER: You can say it instead.

HENDERSON: I think that poor girl was treated really badly, I think she thought she was in Diana -- thought she was in a wonderful love affair. She was only 18 and I think she was really taken advantage of and I think my book would have helped her tremendously working out with Charles was not the man for her.

LISOVICZ: But, hey, I mean, the prince, I think knelt down on one knee. Wasn't that romantic? There is going to be a civil ceremony. Love prevails after all.

HENDERSON: Well, yes. Over the body of that poor woman he got sacrificed to make two heirs for the country.

SERWER: Well, that's true. And then there's Prince Charles' love letters to Camilla which I think those we should not talk about right now.

HENDERSON: Gosh, I think it was the phone conversations tapped by MI-5 that were the really bad ones.

SERWER: Yes, those were the naughty ones, right. What can an author from the 19th century possibly have to say to people today in terms of actual practical romantic situations? Come on. We are talking about people flying around with feathers and capes and all this sort of stuff.

HENDERSON: Well, first of all, I recommend some Jane Austen if you haven't read it all ready.

SERWER: Apparently I haven't read that much.

HENDERSON: Second, great love stories are timeless. They really are. The ones that -- Jane Austen is never been out of print. Since the books are published, there are two versions of "Pride and Prejudice" coming out this year alone so she obviously still has a great deal of stuff to tell the modern generation.

SERWER: But it is sort of like you want these women to act like Gwyneth Paltrow or something. I mean she's kind of a big Jane Austen kind of a gal, isn't she?

HENDERSON: Well Gwyneth Paltrow hasn't done so badly for herself. It wouldn't have been my first role model but I have to say you know she seems to be happily married with a lovely baby.

SERWER: Well that is because she married a Brit. Go ahead.

HENDERSON: There you go. I'm happily dating an American. So I'm a big fan of American men right now.

CAFFERTY: I didn't catch the last part. What did you say?

HENDERSON: I'm a big fan of American men right now.

SERWER: Including Jack there you go.

LISOVICZ: What a smile on Jack's face.

CAFFERTY: What is it about the way people are currently date and romance one another that's not working so well? Why should they look to this book as an alternative? What's wrong with the way they're doing it?

HENDERSON: They're game playing. That would be the single thing I would say. And that's the single piece of advice that I was given when I moved to America about successful dating was you have to game play and I really disapprove of that. And I would not be with my lovely boyfriend today if I played games.

LISOVICZ: We're very happy for you but a lot of us people are overworked, lots of obligations and little time and little time to try to meet new people and so there is something in the 21st century called speed dating where you sit down and you talk to someone for a few minutes and you decide whether you want to continue the relationship or not. Is that something that Jane Austen would approve of?

HENDERSON: Well, rule four in the book is trust your instincts. I think that I wouldn't -- I don't know that I would want to do it myself because it is very high pressure. In the first three minutes of meeting somebody, you can get a very good sense of whether you are on the same wave length. You can get a sense of their sense of humor or you can get a sense of their physical attractiveness and then after that, you have to learn more. But its not a bad start.

SERWER: Last quick question Lauren. Are American men sexier than British men?

HENDERSON: Gorgeous. They are infinitely superior in every way. Do you want more or is that enough?

SERWER: That's a good start. If you want to leave it there, that's fine. I think I get the picture.

HENDERSON: They are more romantic actually. The nice thing about American men, they're a lot more romantic when you bring that out in them.

LISOVICZ: You know when I think of Andy Serwer and Jack Cafferty I think of romance.

HENDERSON: You are a lucky girl.

LISOVICZ: I am. I am.

SERWER: Lauren she sits right between us.

LISOVICZ: Lauren Henderson, author of "Jane Austen's Guide to Dating." I'm trying to say this with a straight face. Thank you for joining us.

HENDERSON: Thank you.

LISOVICZ: Coming up, making Google eyes. Find out whether stock analysts are clicking with the search engine company.

And if you're fired up about the stories we've been covering on the show or you just want to sound off, send us an e-mail. The address is inthemoney@cnn.com.

But first this week's "Money & Family."

Whether you like it or not, there's few more weeks of winter left and you may have drained your bank account paying for your heating bill this winter. Here are some ways you can save money on heating your home until spring arrives. Start by setting your thermostat to a comfortable temperature. Don't turn it above the desired one. It won't heat your home any faster and will only make your furnace work harder.

Make sure to clean or replace filters on furnaces once a month or as needed. Vents should be clear of obstructions. Use kitchen, bath and other ventilating fans wisely. Just one hour, the fans can pull out a houseful of heated air. Turn fans off as soon as they have done the job. And when you buy new heating equipment, make sure it's energy efficient. Your contractor should be able to give you energy fact sheets for different types, models and designs to help you compare energy usage.

I'm Susan Lisovicz for "Money & Family."

(COMMERCIAL BREAK)

CAFFERTY: Remember all the moaning about the price of Google shares when it went public six months ago? Well, since then the stock has more than doubled, almost tripled. This week, Google revealed part of the closely-guarded business plan and joining us now with that and the "Fun Site of the Week" is my dear friend Allen Wastler.

ALLEN WASTLER, CNNMONEY.COM: Well Jack you know what's interesting about it? Google said did not say that it won't get into. Everybody is saying, oh no, Google is going to get into adviser business. Google said we're not interested in that. Selling domain names? Nope, not interested in that either. Telephony, Internet telephony, nope. Not going to do that either. We're actually going to concentrate on search. What we do best.

CAFFERTY: And fees.

WASTLER: That pays for advertising.

SERWER: What's that word, Jack, Benjamin's, isn't it?

WASTLER: It's all about the Benjamin, baby. Here where I have always said the Google is a Greek tragedy waiting to happen. Every time I say that, they do it better and better. This time, maybe this time...

SERWER: Well...

WASTLER: They're going to trip on themselves. They said they might make a move toward registration of users. That's where when you go to use and used for free, then all of a sudden -- who you are, with that and the other. You can charge greater fees. Get to know the customers and then go to advertisers saying, hey, we can give you the white males between 20 and 55. We can give you all the people in New York and this and this and this and segment it.

CAFFERTY: Was you Andy last week on "American Morning" you had a story about they can't find enough workers that they are desperate to hire people.

SERWER: That's right.

WASTLER: That's another thing they got into, some of the limitations they are on. With people, they have like a six-step interview process and very high standards.

CAFFERTY: Like CNN.

SERWER: That's right. I thought they gave them an IQ test. If they failed, they got hired.

CAFFERTY: Maybe that was...

SERWER: Sorry, sorry.

WASTLER: So they some have impediments, there, too. They had to add new technology to enable the search technology. But generally, they walked away feeling positive and since this is a company that won't give you profit guidance, that's the best you can walk away with.

CAFFERTY: And two quarters they have reported so far gang busters.

WASTLER: And the stock has basically doubled.

SERWER: Search is getting more commercial, though, isn't it? It is getting more and more paid sites, more and more stuff is...

WASTLER: That's coming up with Google, and said hey they figured something out here. If you can deliver the results of the advertisers wants, give them an argument or audience, you can pay a good dollar for it.

CAFFERTY: You know what we want right now?

WASTLER: What do you want?

CAFFERTY: Fun site.

SERWER: Give us the fun.

WASTLER: You want the fun site? It has signs that, well, the signs didn't say what they meant to. Look at the first one. A little problem with spelling here. A problem with spelling here. Oops.

SERWER: Oh.

CAFFERTY: Wow.

WASTLER: You know, you are writing it on the road and...

SERWER: Stop.

WASTLER: All right. You want the next one? All right. You're really going to like it. Drop your pants here and you will receive prompt attention.

SERWER: That is so great. I like that. I like going there.

WASTLER: I got one more for you. This is a battle of logic here, OK are you ready folks? Put your mind on this one. Entrance only, do not enter.

SERWER: Wow.

WASTLER: Things that make you go, hmm.

SERWER: I would just stand there and look at that for a long time.

CAFFERTY: For a long time.

SERWER: Yes.

CAFFERTY: Just leave your car in neutral. Contemplate. Thanks Allen.

WASTLER: Sure.

CAFFERTY: Coming up next on IN THE MONEY, time to hear from you as we read some of your e-mails from the past week. You can send us an e-mail right now if you are so inclined. Get up off the couch and go in there and type something, inthemoney@cnn.com. Back after this.

(COMMERCIAL BREAK)

CAFFERTY: All right, time now to read your answers to our question from last week about what retirement savings plans you have other than Social Security.

Matt wrote, "The best retirement plan is one where you get dividends & interest from stocks & real estate. The only better plan is the one that Congressmen have."

Patricia wrote, "I was a teacher, I get a pension that is reliable. More people should consider jobs that offer a pension. They may not pay much in salary but they become a lot more valuable in your retirement."

And Suzanne wrote this, "My plan is to get married. That way I'll have financial support & plenty of company when I'm old!"

LISOVICZ: Dream on.

CAFFERTY: Now for our Valentine's Day inspired e-mail question for this week. How did you win the heart of your significant other? Please tell the truth and keep it clean. Send your answers to inthemoney@cnn.com.

You should also visit our show page MONEY.com/inthemoney, which is where you find the address of our "Fun Site of the Week."

Thank you for joining us for this edition of IN THE MONEY. My thanks to CNN correspondent Susan Lisovicz and "Fortune" magazine editor-at-large Andy Serwer and Money.com managing editor Allen Wastler.

Join us next week Saturday at 1:00 Eastern, Sunday at 3:00. Or you can catch Andy and me all week long on "American Morning" starting at 7:00 Eastern. Enjoy the rest of your weekend.

(COMMERCIAL BREAK)

TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com


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