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CNN IN THE MONEY
Cost To Rebuild New Orleans; Economic Impacts of Hurricanes; Examining Link Between Poll Numbers And The Economy; The Health Of Baseball; Scientists May Be Able To Do Stem Cell Research Without Destroying Embryos; Fast Food Restaurants Cannot Be Sued Over Obesity;
Aired October 22, 2005 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
BONNIE SCHNEIDER, CNN METEOROLOGIST: Even though these waters are certainly very warm we are expecting a lot of shearing, with winds, upper level winds kind of ripping the thunderstorms apart, breaking down the storm just a bit as it comes across the Florida area. But because of the forward motion we're expecting to accelerate, the storm doesn't have that much time to really weaken a lot and break down substantially.
So we are talking about from Sunday, 8:00 a.m., to 24 hours later to Monday, quite a bit of movement a big change from this lingering area we've been seeing and drifting we've been seeing across the Yucatan so much of the day today.
Right now, the storm is only drifting to the north. Here is the latest look at the radar. We had some flooding pictures we showed you earlier in Broward County. It's not raining there now. That rain has pushed off to the east. We will have more on Wilma coming up.
LISA SYLVESTER, CNN ANCHOR: All right. Thank you very much, Bonnie.
Now we want to take you out to Tallahassee, Florida where Florida Emergency Management Officials are standing by. Craig Fugate director of Florida Emergency Management, and Ben Nelson, state meteorologist.
UNIDENTIFIED MALE: We'll do the briefing; we need to turn around the insert stage here for insert at about 1:45. So, we appreciate your assistance with that. Little feature, housekeeping regarding future operations. We plan on doing a briefing tomorrow at the same time, which would be 1:00 p.m. on Sunday with update. We are here today, which is Saturday.
Thank you very much for being here.
This is the 1:00 p.m. briefing for Hurricane Wilma from the State Emergency Operation Center in Tallahassee, Florida. The State of Emergency Operation Center continues to be operating at a level two or partial activation, hours of service are 7:00 a.m. to 7:00 p.m. with operations continuing on a 24-hour basis by select need and/or reporting function.
At this time, I would like to turn the microphone over to the director of the Florida Division of Emergency Management, Director Craig Fugate.
CRAIG FUGATE, DIRECTOR, FLORIDA DIVISION OF EMERGENCY MANAGEMENT: Good afternoon everybody. Ben is going to go into the forecast of the storm from the National Hurricane Center but hurricane watches have gone up for the Keys.
We are now transitioning into mandatory evacuations first in the lower Keys this morning. And that will then transition to the upper Keys as we go through the day, as well as evacuations in Collier. We're starting to see some of our inland counties as they prepare for the impact of this storm. We're moving from that preparedness phase into a phase of action, as people get ready. They implement their plans, or heeding evacuation orders.
But it's also important that I think we note that the state of emergency response team unified with our federal partners have also been doing quite a bit of work. At this time it's my pleasure to introduce Treasurer Gallagher, chief financial officer from the state of Florida, to talk to you about activities that we're doing in the search and rescue and other activities to support our local governments. Sir?
TOM GALLAGHER, CHIEF FINANCIAL OFFICER, STATE OF FLORIDA: Thank you. The state fire marshal's office is in charge of coordinating all search and rescues. We have our state fire marshal teams that are assembled in the field. We've activated the state urban search and rescue team to ensure there is coordination between the local, state and federal teams.
We have a meeting going on right now in Orlando at this very time to set up and make sure all of that is coordinated.
The following resources are now in place. The Urban Search and Rescue Command and coordination team is activated. We have on standby Tampa Bay and Orlando and Jacksonville. On standby also, north central Florida and also Daytona.
The FEMA group, which is the federal group that joins us, their incident support team, we have two activated in Miami, and one Virginia team activated in Orlando, and a Tennessee team activated in Orlando -- all coordinated and ready to go, awaiting the need.
FUGATE: Thank you, sir. And as the chief financial officer points out, these activities we've been talking about are now coming to the point where these teams are actually finalizing their preparedness activities.
Justin Omalihou, who is the team leader for the Federal Emergency Management Agencies and the federal agencies here, again, working as a partner as we prepare for these hurricanes.
I would like Ben Nelson to give you the latest update from the National Hurricane Center and we'll brief out with our key members of the team here on both preparing for the evacuation and the immediate response afterwards. So Ben, update us on the storm. BEN NELSON, FLORIDA STATE METEOROLOGIST: Good afternoon. Thank you, Craig. As we've all seen on satellite images and the news media, Wilma has been relentlessly pounding Cozumel and Cancun for the better part of 24 hours now. And as Craig mentioned, we now have hurricane watches up for the Keys.
Just to remind everybody, a hurricane watch means that hurricane conditions are possible within 36 hours. Hurricane watches will also likely be issued for portions of the Peninsula Coast, southwest Florida and perhaps even southeast Florida later this an or this evening. The center of Wilma, the eye of Wilma, has been drifting northward near Cancun. It will probably emerge offshore later today or early this evening into the warm waters of the southeastern Gulf of Mexico.
Right now, it's still a Category 3 hurricane. I can't imagine what 24 hours with Category 3 conditions must be like. My prayers, our prayers go out to the folks in the Yucatan area of Cozumel and Cancun. Wilma will probably be a Category 2 later today when it does drift offshore. There is the opportunity for Wilma to strengthen to Category 3 strength later tonight and especially early during the day tomorrow and thereafter. The situation remains the same.
A cold front will be approaching the central Gulf of Mexico and in the Panhandle from the northwest. And that will, in turn, provide the steering to turn Wilma to the northeast, and at an accelerating rate during the day Sunday. Hurricane-force winds are out 85 miles, tropical storm-force winds out 200 miles. Those tropical storm winds will start to impact the Keys perhaps as soon as around sunset tomorrow night. That's why we have the hurricane watches in effect for those areas.
The wind sheer ahead of this front is likely to weaken Wilma down to a Category 2, but we caution that intensity forecasts even only 24, 36 hours in advance are quite uncertain. We're just a little bit more than that from landfall. So, it's certainly possible that our areas in the keys and southwest and even possible the areas in the Keys and southwest central and even possibly west central Florida could receive a major hurricane. The forecast is for a Category 2. So we plan for one category higher.
A Category 2 hurricane, though can produce very significant storm surge along our southwest coast and Keys. This is a different situation than Charley. This will be an expanding wind field; a bigger radius of maximum winds can produce much more storm surge. So, the folks in southwest Florida that will soon be under hurricane watches need to prepare for perhaps upwards of 10 feet of storm surge on Monday morning.
We mentioned that the conditions will start to go down in the Keys first Sunday night and then throughout Sunday night and Monday morning, those tropical storm conditions will spread into southwest Florida. They'll cover much of the Peninsula early Monday morning; this is going to be a very large wind field. We'll have a cold front stalled across central Florida. That always heightens the potential when we have that situation -- the potential for tornadoes is always greater, I think especially along the Treasure Coast and in South Florida, south of Lake Okeechobee. We have a potential for some significant tornado activity that we don't always have with land falling hurricanes. We always have the potential but I think this is a little more heightened than normal.
And our rainfall could also be significant, especially in the vicinity of where that front stalls in central Florida, four to eight inches of rain possibly. Areas could get up to 12 inches of rain. We'll have flood watches up. Hurricane watches are starting to go up. Now as is the time to prepare, stay aware and be ready to act in case local officials recommend you do so.
I believe we're going to turn the press conference to Colonel Chris Knight.
SYLVESTER: We've been listening into a briefing by Florida Emergency Management officials. As they pointed out, there is a hurricane watch in effect for parts of -- for all of the Keys and they are also having mandatory evacuation orders for the Keys as well.
Now for the very latest on Hurricane Wilma's movement toward the U.S. We'll have the very latest at the bottom of the hour and live reports from the Florida Gulf Coast and storm-ravished Cancun at 2:00 p.m. Eastern.
I'm Lisa Sylvester. Now to IN THE MONEY.
JACK CAFFERTY, CNN ANCHOR: One-and-a-half billion dollars in no- bid contracts that were let through FEMA according to the "New York Times" in the weeks right afterwards, how do you keep track of the money? They've said OK to $62 billion. The appropriations may get to $200 billion before it's over. It is not only watching the money.
JACK KEMP, CHAIRMAN, KEMP PARTNERS: Yes, the Government Accounting Office will watch it. But I agree with you. Just to throw $60 billion, talking about $200 billion -- it won't cost $200 billion if we do it right.
I'm not an engineer. I don't know what the cost of making New Orleans whole again is. It can't be the same New Orleans that it was pre-Katrina. It's got to be done with city planning, urban planning. I would like to say -- I hate the word czar, but I would like to see someone like Colin Powell or an Andy Young...
ANDY SERWER, EDITOR, "FORTUNE" MAGAZINE: What about you?
KEMP: ... with tremendous creditability to step in and help provide the leadership that this disaster of biblical proportions needs.
CAFFERTY: Mr. Serwer asks what about you?
SERWER: Yes. KEMP: I would love to do it, but they're not going to ask me to do it. I've suggested, again, Andy, Marc Morial the former mayor of New Orleans, head of the Urban League, tremendously incredible guy. Haley Barbour, the governor of Mississippi, is way ahead of what's happened so far in Louisiana. I don't want to pick on the governor of Louisiana.
CAFFERTY: No, but you're right.
KEMP: There just has to be leadership at all levels and then someone to coordinate that leadership. One other quick point.
KEMP: There's legislation going through the Congress right now for the GSEs -- the government sponsored enterprises -- Fannie May, Freddie Mac, Federal Home Loan Bank all of those resources can take a percentage of their profit 3 to 5 and 10 percent in the case of the Federal Home Loan bank for affordable housing and target it toward the Gulf Port region, get the National Association of Home Builders together.
And then that coupled with an enterprise zone and the president's urban home setting ideas -- I'm national chairman of Habitat for Humanity. We too, can play a big role. Thanks to the "Today" show, we have raised about $40 million for Habitat. So coordinating all of this should be, in my opinion, in the hands of former Mayor of Atlanta and my friend Andy Young.
CAFFERTY: Yes, they just decided a minute ago they won't ask him. Based on what I am listening to, they ought to ask him. Jack Kemp, thanks for being with us.
KEMP: Thank you.
CAFFERTY: Good to have you with us. Former congressman, secretary of HUD, NFL quarterback and currently the chairman of Kemp Partners.
When we come back on IN THE MONEY, blown away. From hurricane to droughts, weird weather can shake up the economy. We'll connect the dots between your money and what the guy on the 6:00 news tells you about tomorrow's forecast.
Also, crunched by the numbers. See if there's a link between a president's approval rating and how the economy is doing.
Plus, stem cell research without the ethical limbo dance. Find out how new procedures might squeeze in under the wire in our "Brainstorm" segment.
CHRISTINE ROMANS, CNN CORRESPONDENT: So another week, another hurricane. And often-powerful storms mean major damage. But a hurricanes economical impact goes beyond what you see on TV with things like flight cancellations and less business for tourist areas. In fact just about any big weather can hit the economy from a flood to a draught. Lately, we've had big weather to spare.
Brian O'Hearn will talk to us through the connection between the weather and the economy; he is the president of the Weather Risk Management Association. Brian welcome to the program.
BRIAN O'HEARNE, WEATHER RISK MANAGEMENT ASSOCIATION: Thank you.
ROMANS: A lot of economists, right after Hurricanes Rita and Katrina, were saying they only expected a few tiny bits off of the global growth and U.S. growth because of those storms, but they just keep coming. And so many different weather things happening right now. Is this weather pattern that we have been seeing is this going to be a problem for the economy?
O'HEARNE: I think it is. I think if we look at how extreme the storms were this summer with Katrina and Rita coming in, Wilma churning down in the Bay of Campeche, right now it's in one of the most active seasons we've had, following on from the 2004 season which was very active as well.
I think when we think about the economic impact, it's not just the physical damage and the reconstruction that Congressman Kemp was talking about, but it is the ripples through the economy that the energy prices we are going to have, what's it done to the agricultural markets. So I think it is very pervasive.
SERWER: Hey Brian, let me ask you a little bit about your business. I mean this idea of studying risk and mitigating risk by big businesses has been around for a little while now, but we just saw Allstate this week saying it was going to pull out of insuring a lot of folks in the Gulf Coast region -- did the same thing last year in Florida. I mean do these insurance companies -- they don't understand the risks that they're getting their businesses into? How can that be?
O'HEARNE: I think from the insurance company standpoint you've had a lot of stress on the catastrophe models.
Let me explain a little bit about the Weather Risk Management Industry or Association. We're really covering more frequent occurrences, not the catastrophic-type losses.
So it is a temperature-type related issues for utilities that are concerned about a warm winter, a cold summer. The consumers right now are facing a lot of fear and a lot of hype on the possibility of a severe winter on top of the very expensive energy prices right now. There are tools to protect the consumer from those excessively cold winters. We're more in this base of more frequent occurrences, precipitation and draught for the farmers, early freezes for construction, what is the impact on energy cost and volume for consumers and utilities alike.
CAFFERTY: There was an interesting piece -- I think it was in "USA Today" on Friday -- that said that there are 1,300 people a day moving to the coastal regions from Texas all the way to New England. O'HEARNE: Uh-huh.
CAFFERTY: Should there be some mechanism in place that would allow the people who are willing to take the risk of living in these areas to assume the cost, if things go wrong? I mean, we're talking about a $200 billion potential price tag for hurricane Katrina that's going to come out of the taxpayers' pockets. If you make a decision to live where there are hurricanes, should you be paying your own tab if your house gets blown down? I guess that's the question in a blunt way of putting it.
O'HEARNE: I think they will want increased premiums, through the government assistance. It's an excellent question. I think you've had cycles; everyone talks about climate change and warming. The hurricane season in the 1940s through '60s was also an active time. We've just come through a relative calm in the last 30 years and that cycle could be switching to a more active cycle. And in the last 30 years, look how many people have moved to the coastal areas, as you've mentioned. It's just been a tremendous relocation of the U.S. population.
SERWER: Well that could be good news for your business, though, Brian. I know that might not be the greatest thing for the rest of us, but it's interesting work that you do.
Thank you for coming on to the program, Brian O'Hearne, president of Weather Risk Management Association. Thanks.
O'HEARNE: Thank you.
SERWER: Coming up after the break, checking the till at the world's largest garage sale. eBay's out with the latest numbers. See if you put your money on the stock.
Also ahead, micro scandals with major impact. From the DeLay indictment to Iraq, the president is getting all kinds of heat. Find out if his approval rating can shake up the economy.
And the connections between pay and play. With the battle for the World Series under way, a look at whether a fatter paycheck makes for a better baseball player.
ROMANS: Now let's take a look at the week's top stories in our "Money Minute." GM says everyone talking about the automaker declaring bankruptcy can just quiet down, but not because the company is doing so well. General Motors Chairman Rick Wagner says bankruptcy isn't an option, because the process would cost too much.
Things aren't going much better for GM's rival, Ford. Ford Motor announced a big third quarter loss. The North American division was the culprit, losing more than a billion dollars on its own.
Housing starts and mortgage applications are on the rise even though mortgage costs are on the rise, too. Experts had expected Hurricanes Katrina and Rita to slow down construction in the growing southeastern region, but that didn't happen.
And thanks to higher gas prices, those Christmas commercials will come at you sooner this year. Advertisers, marketers and retailers are worried fuel prices will hurt spending on holiday shopping, so they want to get the shoppers before they get their first heating bill.
SERWER: Online auction giant eBay disappointed Wall Street with a lower than expected profit forecast for the end of the year. eBay started out the year trading their $60 a share, but now it is below $40 a share.
That means eBay is our "Stock of the Week".
And you know, this is an interesting company. Of course, everybody know it's changed the way millions of people buy and sell stuff in the world. It's an incredibly unique business. It couldn't exist without the Internet. What's happening here is that its rate of growth is slowing. It was growing 10 percent, then 30, then 40, then 50 and 60. Now it's going back to 40 percent growth. And that deceleration, Wall Street is very keen on that. That's why the stocks dipped. It's not growing as fast as it used to.
CAFFERTY: Isn't there a rule that says when a company gets to a certain size, the growth has to slow down? You can't just geometrically continual to grow at 50 or 60 percent a year.
ROMANS: Maybe it's becoming a mature stock.
SERWER: I think that is right. And you know this business, this online auction business has to mature. I mean there's only so big you can go with this thing. That's why this company has been branching out, and buying Shopping.com and Skype, which is an online phone company.
And a lot of people are thinking this is not their core business. I tend to agree. I mean the telephone business ain't what Meg Whitman's eBay is all about. So I don't think that's the best use of its cash. But it has got to do something. It's a big company now. Its market value is $53 billion. But Google also, this past week, announced earnings growing seven-fold.
SERWER: So that's why that stock is going through the roof. Because while eBay is growing 40 percent, this other guy down the street, this other tech stock, is growing seven-fold.
CAFFERTY: They're a little younger than eBay too.
SERWER: Yes, they are. You know, they're also getting in all kinds of new businesses, which is very exciting to Wall Street.
ROMANS: They haven't even tapped into the revenue yet from those new businesses yet, Google hasn't, so that has some people even more optimistic. And then of course people always talk about it's like 1999, except this company is actually making money. I mean Google is making a lot of money.
SERWER: Three hundred million dollars in profits in the latest quarter, you compare that to the "New York Times," that's 10 times the amount of profit that the "New York Times" makes. This is a real company, it's real just like eBay. You know these Internet companies are starting to grow up. That is the real deal.
CAFFERTY: eBay's not going anywhere. Maybe it's a good time to buy the stock at $40. They'll be around. They are going to continue to do what they do. She's a good CEO.
CAFFERTY: She's brought the company a long way. So maybe you buy the stock here. No?
SERWER: I think you might. I think the heady days of growth are over for eBay. It might be a nice thing to own for 10 years or something like that.
ROMANS: What about Google?
SERWER: Everyone keeps wishing they bought it, and it keeps going higher.
CAFFERTY: What happens when it gets to $900? Do we say gee, we wish we bought it at $350?
SERWER: I'll buy you cake when it gets to $900.
SERWER: All right. Coming up on IN THE MONEY, the Big Board meets the Oval Office. See if there's a connection between falling approval for a president and the state of the economy.
Also ahead, a game worth watching. We will look at whether Major League Baseball would be more fun if they put the paychecks on a diet.
Plus, a double cheeseburger, and hold the lawsuits. Find out about a bill that says if you gained weight from fast food, it's your own fault.
SCHNEIDER: Hello, everyone. I'm meteorologist Bonnie Schneider in the CNN Weather Center, tracking Hurricane Wilma, still a powerful Category 3 storm with maximum winds at 115 miles per hour.
This storm is just really pushing hard on the Yucatan Peninsula. You can see the eye passing over Cozumel Island pounding this region with heavy rain. We are expecting as much as three feet of rain before the storm pulls away. It's only drifting barely now to the north. But we are expecting that turn towards Florida and will start to see that turn soon enough, as the National Hurricane Center has issued a hurricane watch. This is for the Florida Keys. And what is means is that we're expecting the anticipation of hurricane conditions within the next 36 hours, because once that storm makes its turn eventually to the right, we'll see pretty quick movement in 24 hours, getting very close to Florida.
Landfall is expected sometime early on Monday. And notice the storm does weaken due to upper level winds kind of sheering it apart as a Category 2 when it makes land fall on Monday somewhere in South Florida. That's the latest on Hurricane Wilma.
Now let's go back to IN THE MONEY.
CAFFERTY: President Bush's approval rating hit its lowest level yet this week, 39 percent. That's according to a new CNN/Gallup Poll. With all the hand-wringing over the economy, we couldn't help but wonder if there's a connection between the poll ratings and the economy. Put it like this -- do presidential approval and economic numbers go hand in hand?
Greg Valliere is going to walk through this. He is chief strategist for the Stanford Washington Research Group. Greg always nice to see you.
GREG VALLIERE, STANFORD WASHINGTON RESEARCH GROUP: Great to see you, Jack.
CAFFERTY: Is the economy in that bad of a shape that it would justify a 39 percent approval rating for President Bush here?
VALLIERE: You know for all of us who follow the economy for a living, we look at statistics that aren't all that bad. But I think for the average American, there's anxiety. I think there's a feeling that we're not getting better. There's anxiety over job losses. Just in general, the economy doesn't feel as good as the statistics might show.
ROMANS: We keep hearing over and over Greg. This is Christine here.
ROMANS: We keep hearing over and over that the middle class wages are stagnant, they have really high housing prices to deal with which can go both ways I guess, and that maybe corporate profits are doing very well, but there's this feeling that a lot of the rank and file working men and women in America aren't sharing in that. Is that what's showing up here?
VALLIERE: That sure is part of it, Christine. You know another big part, in my opinion, is that with Bill Clinton, for all of his many flaws, man, he could feel your pain. He could empathize. He was working 24/7. I don't think people sense that same level of commitment, that same level of empathy with this president.
SERWER: Let me ask you, Greg, though -- you know a lot of people are talking about consumer confidence, but there's a disconnect between what they're telling the pollsters and what they're doing. I mean they are not really pulling in their horns yet. People are driving around in their big honking SUVs and they are still buying stuff. How does that pan out then?
VALLIERE: To me, there are two huge -- maybe three huge wild cards. One is energy prices. If you live in the Northeast, you've got a big bill coming this winter.
The second is the fact that the stock market has been dead in the water all year. People aren't looking at anything improving there maybe.
The third is that you've got the fact that housing prices are starting to maybe level off.
So, you add those three factors to a zero percent savings rate, and you could see the consumer start to really begin to pull back.
CAFFERTY: What about the Fed? Are they going to wind up being a villain in all of this? There's no indication that they've gotten to the end of their interest-raising cycle yet. We go some inflation numbers on the radar that are potentially troubling, energy prices feeding into those obviously. If they keep hiking rates, then where do we go? Are we looking at really slowing this economy down?
VALLIERE: You've got to -- I've been on the road for the last few weeks and I have seen a lot of big money managers talk to people, like you guys have, to a person they say the stock market is probably not going to really take off until we know for sure that the Fed is doing. We don't know for sure when the Fed is doing. It's probably many more months. And you got to say the new chairman probably has to show the market that he or she has got plenty of testosterone. The new chairman has to show they can flight inflation too. So we have a ways to go before they finish.
ROMANS: But Greg, I'm also wondering how much of this problem for the president's approval ratings has to do with things completely outside of the economy, the charges and this whole FEMA scandal, immigration is something that constituents are talking about, and there is the war in Iraq. Is the economy even in the top three of the things that are a trouble for the president?
VALLIERE: I still think it is, Christine. But I would add to that long list that you just gave us, the likelihood of indictments in the next week or so probably very close to his administration. That's not going to help either. What this does is not maybe change '06 and '08. We've got a ways to go on that. What this does is mean people on Capitol Hill can go after him with impunity, including Republicans, on things like Harriet Miers. So his agenda, his clout on the Hill is really diminished.
SERWER: You go through all the other presidents in recent history, Greg, they've all had lousy approval ratings -- I mean everyone from Reagan, to Nixon, LBJ, Carter, his father. Isn't this standard operating procedure?
VALLIERE: Well it's the trend. The trend is down. The trend in the last few months has gone down to 39 percent. You can't ever rule this guy out. He can have a decent year next year and things get better in Iraq. That's a very big if, obviously. But for right now in the world I live in, you can just sense inside the Beltway that his agenda is pretty much finished. When you have a 39 percent job approval rating, you just can't get very much done.
CAFFERTY: And the likelihood that he's going to get any upward traction any time soon is negligible. There's just too much headwind out there. All the stuff we're talking about. Is there anything that you could suggest if he called you tomorrow and said help me out here, Greg, that he might be able to do to rekindle some popularity?
VALLIERE: I think, not to be too cynical, that more of this is PR. It's cosmetic. It's showing the country that he's really engaged. His numbers went up a little after Rita because he lived down in the Gulf. I think he needs to do what Bill Clinton did. It's more of showing people just how empathetic he is. To me that is a real failing of his.
ROMANS: Interesting as well that Democrats have been so quiet lately. The president earlier this week in a press conference when asked about all of these problems we've outlined, including the economy, he said I have a job to do, I'm focused on the job that I'm doing. As the president focused on the job that he is doing, what are the Democrats focused on?
VALLIERE: That's a great question, Christine. And I tell you inside the Beltway, the long knives are out for people like Nancy Pelosi and Harry Reid. They haven't done a very good job. You have to ask the question though, is the problem the messengers or is the problem the message -- the fact that the Democrats don't have any prescriptions right now?
SERWER: What about the war in Iraq? I mean, you're looking at other presidencies and seeing how these negative ratings really took hold when you're talking about Vietnam, LBJ and Nixon. You don't think that has a huge amount to do with that 39 percent rating?
VALLIERE: Sure. Absolutely. No question about it. I think maybe on December 15, the elections for parliament will go well and we'll see people with the purple thumbs. Maybe things will get a little better in '06, but there's no question that's a big reason his job rating has slipped. Luckily for him, the Democrats don't seem to have much of a prescription of their own on Iraq.
ROMANS: All right. Greg Valliere, Stanford Washington Research Group. Thanks, Greg.
VALLIERE: Great to see you guys.
ROMANS: There is a lot more to come still here on IN THE MONEY. Up next, it's about the ball, not the buck. The White Sox made the World Series, but they're getting paid less than other teams. We will look at the relationship between the player and paycheck.
And thinking outside the big box. The JibJab guys are back, and now they are poking fun at mega discounters. Watch the results of our "Fun Site of the Week."
SERWER: Not many people would have predicted the Chicago White Sox and the Houston Astros would be playing in this year's World Series.
Here they are. Joining us now to talk about what this means for the business of baseball and more about the health of the sport is Bob Bowman, president and CEO of MLB.com.
Welcome to the program, Bob. You know I hear people complaining about these two teams. Excuse me. Chicago is the number three markets in the United States. Houston is the number four market. These are big cities. This is big stuff, right?
BOB BOWMAN, CEO, MLB.COM: Absolutely right. First of all great TV markets, but I think even more important than that; these are two great storylines. Houston has never been there. They've been around for about 43 years, never been to the World Series. Chicago hasn't won since 1917. So that's 88 years, making the Red Sox almost looks like Pikers, because they only waited 86 years. And so these are two great storylines, two great owners, and two great originations, and as you mentioned, two great cities. I think this will be a great match-up -- a dream match-up.
CAFFERTY: I mean given the size of the payroll, why aren't the Yankees in the World Series?
SERWER: Because they're mediocre.
BOWMAN: You have to spend money in order to have a competitive team. I think both Houston and Chicago is probably right around $75 million payroll, which is right at the middle point. They have a good organization. They were smart and got probably a little luck with injuries. The White Sox had a very strong starting pitching staff. I think the Yankees had a little less luck. Sometimes it works out, sometimes it doesn't. Done pretty good for a long time. They have been there a lot.
ROMANS: But it also proves what your mother always told you that money can't buy you happiness, can't buy you everything. These two teams I guess are living proof of that. But they also got some good pitching. Is that what is going to take both of these or got these two teams where they are?
BOWMAN: I don't know if Yogi Berra said it, but he should've. Good pitching always beats hitting, except when it doesn't. And the simple fact is that both these teams have great pitching, great middle relief and great closers at a payroll that they can afford.
The pitching for Chicago is unbelievable in the ALCS and Houston. When you start Roger Clemmens, who is 43 and has the body of a 23- year-old as your first-day pitcher, it will be a great match-up. It's all very good. I think the starting pitchers really will show what a baseball can be. A 3-2 game to me is more exciting than a 10-9 game. SERWER: All right, Bob, enough of these softballs. I'm going to come with some high heat. When is baseball going to get serious about a steroid policy here? I mean, you guys have been dillying and dallying around, haven't you?
BOWMAN: Well I wouldn't characterize it that way. It takes two to tango here. We have, as you mention, players and a Players Association. Commissioner proposed his three strikes you're out, policy at the beginning of the season. It has ye --; it got some response from the union, about a month ago. All of us remain hopeful it will get addressed in the near future. But it takes two to tango. You understand that we have to negotiate this with the Players Association.
The people are on the field every day and their representatives. We proposed I think the right policy, $1,500 and three strikes and you're out. And hopefully that is where we will get to. And the commissioner is quite firm on this. We're optimistic. I think the fans understand he's trying to solve it. The game is trying to solve it. I think that's why attendance is at a record and why there's so much enthusiasm for baseball today.
CAFFERTY: Let's go back to the business of baseball for a minute. David Stern, is he the commissioner of the NBA?
CAFFERTY: He put in this dress code for the NBA players that they can't wear these automobile hubcaps around their neck anymore if they're doing a press conference, serving in some official capacity. They can dress like they're in the hood on their own time, but he wants them in casual business attire when they are representing the league. His explanation is my job is to grow the business.
If you're the Major League Baseball commissioner, whose job is to grow the business, whom do you want in the World Series in the playoffs? What is better for the economics of baseball? Is it the A- Rods and Jeeters and the marquis New York Yankees versus the Red Sox, or is it a team that has a great storyline like the White Sox versus the Astros? What is better for business?
BOWMAN: I think the best thing for business is seven games. Not a four-game sweep. Both -- I think both make sense. I hate to answer that way.
CAFFERTY: No, that's all right.
BOWMAN: But you love to see stars. Obviously New York has a huge following and the Red Sox have an unbelievable following, as do the Cubs. But this is a great match-up. I think that what the answer on this is the World Series is a great event. Baseball is really a 12- month sport. Having these teams in there, $75 million payroll gives hope to every fan for every team around the league next year.
What that shows is that you just don't have to spend $150 million or $120, whatever the number might be. But the most important thing this commissioner does, I think he does it as well as anybody. He's trying to give hope to every fan that their team can be relevant in September. And that's what the fan wants.
ROMANS: But quick there's fans, there is a player, and there is what you call the COO of the team and that's the dugout manager. How is the management of these two teams and how is that important for, I guess, the business fallout of this World Series?
BOWMAN: Obviously both of these managers are terrific -- both former players, both players who played the game well, played it full out every day. That's how they both manage.
I mean certainly Isaac Eon is a very affable (ph) guy and those of us in the media business love that. And Phil Garner, 1 and 30 stuck to his netting, stuck to his game plan and here we are in the World Series. Two great managers and if you want a tough job, try living 162 game a year in the dugout with these players having everybody criticize what you do and watch what you do over 162 games. These fans aren't shy. I think it's the toughest job in sports, is the manager of the major league baseball team.
ROMANS: Bob Bowman, president and CEO, MLB Advanced Media. Thanks for joining us.
BOWMAN: Happy to be here.
ROMANS: A lot more still to come here on IN THE MONEY. Up ahead, stem cell research gets a controversy bypass. See how a new technique makes it possible in our "Brainstorm" segment.
If you want to sound off on the stem cell debate or anything else in the news, drop us a line the address is INTHEMONEY@CNN.com.
CAFFERTY: A possible breakthrough in stem cell research, the focus of our "Brainstorm" segment this week. A group of scientists now says that they may have found a way to conduct stem cell research without destroying human embryos.
CNN medical correspondent Elizabeth Cohen joins us now with some details on this breakthrough and what it may mean to this debate. Hi Elizabeth.
ELIZABETH COHEN, CNN MEDICAL CORRESPONDENT: Hi. It could mean something significant to this debate, but it might not. And I'll explain why that's true.
Embryonic stem cell research researchers say it can be very promising; it can lead to all sorts of medical researchers. But the problem is that it involves destroying embryos in the process.
So now two groups, one out of MIT and one out of a private company, say hey we can make embryonic stem cells without destroying an embryo, so you would think, wow it is time to celebrate. But some people say there are still ethical problems with these two methods as well and others are saying that technically these two methods won't really lead to as many medical treatments as the original methods that do involve destroying embryos. Really, in many ways, it's anyone's guess whether this is really going to revolutionize the field of embryonic stem cell research.
SERWER: Hey Elizabeth, Andy Serwer here. Do you think that the anti-stem cell crowd, for lack of a better phrase, will find this acceptable? Is this moving in the right direction for them politically?
COHEN: Some of them do, but some of them don't. Many of them came out very quickly and said, you know what? These two methods still have problems. You're still tinkering with embryos. You're still messing around with something that is sacred. They're not satisfied. Some others of these critics say that one of the methods maybe is acceptable. They're sort of moving in that general direction, but these are not -- they haven't said, oh, good. Thank goodness. Finally, you came up with these two acceptable methods. That did not happen.
ROMANS: Elizabeth, this collision of science and politics that we're seeing over the stem cell debate in this country -- is that being mimicked everywhere else in the world? I've been hearing from some of the technology market type people is that they think that Singapore, South Korea, China, are already ahead of us on this and that because of our hand wringing over it, we're giving up very important research.
COHEN: Right. What is interesting is that you have those countries that you just named, which don't have all of the ethical problems with this that people do in this country. So they're moving way ahead. South Korea, in particular, has really moved way ahead in embryonic stem cell research.
However, you have other countries, particularly in Europe, that in some ways have more ethical concerns than have been expressed in this county or certainly have been acted upon in this country. You have it on both sides. The United States maybe is somewhere in the middle. Yes, there is definitely that concern that other countries that don't have the same ethical debate are moving way ahead.
CAFFERTY: Thank you, Elizabeth. Nice to have you with us. Elizabeth Cohen joining us from Atlanta.
Coming up next on IN THE MONEY fat city, a new bill in Congress will let fast food chains off the hook for obesity lawsuits. We'll get the skinny on that from Allen Wastler.
Also it is 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 we are at INTHEMONEY@CNN.com.
Back in a flash.
CAFFERTY: Just when you thought the government wasn't being responsive to our real problems, the House of Representatives has rushed in to save the day. They passed the cheeseburger bill in the Congress of the United States.
SERWER: Yes, they did.
CAFFERTY: Now we can all sleep better at night. Joining us to explain what the cheeseburger bill is all about is Money.com Managing Editor Allen Wastler.
ALLEN WASTLER, MANAGING EDITOR, MONEY.COM: Don't you just love that cheeseburger bill. It is a wonderful thing.
CAFFERTY: They thought that was the CIA code name for President Clinton.
SERWER: It was.
WASTLER: This thing is stupid on so many levels. The basic thing is, first of all it's stupid that people would sue a fast food restaurant for "you made me fat." I mean, we're talking personal choice here. You either eat the cheeseburger or you don't.
WASTLER: Why are you going to sue the burger maker for it? Nevertheless, a couple of people have. And of course the food industry goes to Congress. At first blush, you might say, thank the lord that Congress is there to prevent us from these kinds of frivolous suits. But what I'm asking is, why doesn't Congress trust the courts to give these things the merits that they deserve?
ROMANS: Because the courts don't have lobbyists who pay them a lot of money.
WASTLER: This is just stupid.
CAFFERTY: Wasn't there a big judgment against McDonald's because some woman poured hot coffee in her lap? There's a principle there.
SERWER: The only thing stupider than suing these companies is passing a law preventing you from suing them. Just let it go.
WASTLER: You're putting Band-Aids on how you want the courts to act. Let's let the courts do their thing. If you have a problem with the court, fix the courts. You can tie this into the gun bill, too, which is protecting the gun industry from the same kind of suits. I have the same argument there. Admittedly, you don't take a cheeseburger and bludgeon somebody with it. But in the same way are you going to pass legislation toward the people or toward the product?
SERWER: If we're allowed to make it, how can you sue the people for making it?
WASTLER: If you're going to wait two weeks for a sofa to be delivered, you can wait one week for gun clearance to come through.
CAFFERTY: You should have been nominated to be on the Supreme Court.
WASTLER: I would do a fine job right now. Things would change.
SERWER: Is he your lawyer?
WASTLER: From our friends at JibJab, remember them?
CAFFERTY: I love those guys.
WASTLER: They came up with another one here. Big Box Mart. Let's take a little gander.
SERWER: Roll it.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: In a foreign factory and gets packed on a vessel and shipped over the sea. It is loaded off the trailers and it's spread across the map. The box car is the place I go to buy all of my crap, oh, Big Box Mart what do you have for me? Our shopping carts are empty and we're on a shopping spree. I come to the Big Box Mart because I do have lots of needs. And they sell crap the cheapest with their discounts guaranteed.
(END VIDEO CLIP)
SERWER: That's priceless. The production value is keeps getting better.
WASTLER: It shows the economic cycle of eventually you put yourself out of work and end up working.
SERWER: The guy ends up working, right.
ROMANS: At Wal-Mart -- I'm sorry, Big Box Mart.
SERWER: That's right.
CAFFERTY: Time now to read your answers to our questions about whether you donated to charities helping victims of the south Asian earthquake.
Sam wrote this: "I live in Lake Charles, Louisiana, and we still need help here. This is one time that charity begins at home."
Curt wrote us: "I was only able to give $50. With our economy right now, I'm only too worried about my own survival. Besides, I gave 'til it hurt to the victims of Katrina."
And B. wrote: "Didn't President Bush just pledge $50 million to help the earthquake relief effort? That's coming from taxpayers like me or should I say that's coming from money that we're borrowing from China that the taxpayers will be paying for generations?" Time now for next week's email question, which is this. What can President Bush do to get his approval rating back to over 50 percent? Send your thoughts on that waiting issue to INTHEMONEY@CNN.com.
And you should also visit our show page at MONEY.com/inthemoney, which is where you will find the address of our "Fun Site of the Week", and you got to check it out. It is hilarious.
On that note thanks for joining for this edition of IN THE MONEY. My thanks to "Fortune" magazine Editor-at-large Andy Serwer, LOU DOBBS TONIGHT correspondent Christine Romans, and MONEY.com Managing Editor Allen Wastler. See you back here next Saturday at 1:00, Sunday at 3:00. Hope you can join us then. Until then enjoy the rest of your weekend.
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