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CNN IN THE MONEY
Summer of Tourism; The Effect of the Dollar; How Important Your Diploma Really Is; The Need for Travel Agents; The No Jerk Rule; Constructive Feedback at Work; High Gas Prices
Aired May 5, 2007 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
UNIDENTIFIED FEMALE: Steve talking about the efforts being done and support you're getting from surrounding communities?
STEVE HEWITT, GREENSBURG CITY ADMINISTRATOR: We're getting excellent support. We're getting folks from as far as Topeka. From officers, EMS and different Emergency Management people that come all over the state to help us. And I can't thank them enough and some day that is going to run out and we are going to have to you know pool ourselves up by our boots and do it ourselves, I know it is going to be tough. You can probably tell I'm very concerned. But I do thank those folks that have come out today and that is what this is about. We are coming together and people are helping us and this is a tough situation we are in.
UNIDENTIFIED MALE: Steve it is such a small town, I'm sure every knows everyone. What is like for crews, yourself to be going on these search and rescue missions and a lot of these folks you know personally.
HEWITT: We are leaving a lot of that to the professionals that have come in. But we hear the folks, we know the folks that have passed and it's unfortunate, and they were -- they were a part of our community. A small town everybody knows everybody, and -- but that's going to help us rally, too. We're going to come together. Kansas folks out here in western Kansas, we kind of have a little pride, and we're going to come through it, but we're concerned, and, you know, we need -- we need the support of everybody out there, and we thank those folks that have already helped us, but we want everybody to know, and I plea to the American people as well as the people here in Kansas that this is a huge catastrophe that's happened to our small town.
You know 1400 people in this community, and I believe that 95 percent of the homes are gone, and all my downtown is gone. My home's gone. My staff homes are gone, and we've got to find a way to make it work. Come to work every day and get this back to stop speed. It's going to be tough.
UNIDENTIFIED FEMALE: The governor's offices said there were six people that had been confirmed dead. The people you were talking about finding through search and rescue, is that in addition to that six?
HEWITT: The six is a confirmation number. I believe the information's going to come out very soon that will talk about -- we're finding some other folks, you know but I don't have the numbers and I don't have the details, but we continue to find folks, and this will go on for a good couple of days. Just rescue itself, I mean the debris is unbelievable. Even if you're in a basement, and your home's collapsed, we've got to find a way to get to you. We have a lot of elderly folks here in this community. So getting out of your home can be a tough -- can be tough. We've got it find those folks and we hope we find them all alive and we can get them medical help, but we may find some that, unfortunately, just, this event took their lives. But -- we go on.
UNIDENTIFIED MALE: A lot of historical markers here in the town a lot people may not know about, except for the people who live here. How do you go about salvaging just some of that history?
HEWITT: Well, that's a good question. How are we going to bring back what was the cornerstone of our community? We have a large hand- dug well and believe it or not, it's still there. We may have lost a building, we may have lost our water tower, but we till have our traction. Those are the things we're going to have to rally around. We can go on and on and talk about that, but it's a long road ahead of us, but we expect to get there and we thank folks for coming out and helping us.
UNIDENTIFIED MALE: I know communication has been a challenge for you guys. Can you give us the latest where that is, are crews coming in to try and to get some of the phone lines back up and running?
HEWITT: Yes. We expect to have phone lines up within the next hour, and that's going to help us a tremendous amount. Communications was an issue. And we've picked out the phone lines to help us out, and with the search and rescue, with the communications, rebuilding this area, cleaning it up, allowing folks to hopefully get back and visit their homes. It's going to be an issue. Utilities are still an issue, they will be an issue. We're getting things back together to put things in place and have them back online.
We'll have other things to say. I just wanted to come out today and tell the folks we appreciate the support. We have a long road ahead of us, and understand, this is a serious, serious devastation to a small community. And we need folks to understand that, and we need the government to understand that, you know? Because it's going to be a costly road ahead of us to build this community, you know western Kansas may be a small population but it means a lot to an awful lot of people and we need the support and help. Thank you very much.
MELISSA LONG, CNN ANCHOR: Steve Hewitt the Greensburg City Administrator saying serious devastation to his small community. A community he says of just about 1,400 people, about 95 percent of that town, of that community, is gone, he said, 95 percent of the homes, 95% if not all of the downtown, his home included. He says we'll have to come together, we are going to have to rebuild, but it's not going to be easy. He described the situation as scary and the community is going to struggle.
We will follow the situation in Greensburg, Kansas all afternoon, bring you any updates. Now we join IN THE MONEY.
RICHARD ROTH, CNN CORRESPONDENT: Summer of tourism expected here with record numbers, perhaps as many as 50 million people. Americans, though, can return the favor because it's so expensive in Europe.
UNIDENTIFIED FEMALE: We're not happy to hear it at all. We are very, very unhappy. We'll go, though. We'll economize somewhere else.
UNIDENTIFIED MALE: Coming up here on you right, look up, up, up the Empire State Building.
ROTH: You don't look up these days to find the U.S. dollar.
Richard Roth, CNN, New York.
CHRISTINE ROMANS, CNN CORRESPONDENT: This is true. You know I recently at a baby super store, where they had these really expensive European strollers all out of the boxes all put together and the expensive carry bag because some of the Europeans were just coming in and snapping up two of them --
ALI VELSHI, CNN CORRESPONDENT: And buying them here?
ROMANS: Buying them here and then checking them with their check baggage on the way home, because it was so much cheaper and they were flying out of the store.
VELSHI: Forget currency trading where we're all going to feel it is on vacation. I've just booked my summer trip. I'm going to go to Russia. Unbelievable what it costs.
VELSHI: Because of the dollar. That's where we'll mostly feel it. But lets talk a little about the bigger effect of the dollar.
ROMANS: Lets talk to Mark Zandi he is the chief economist at Moody's Economony.com. Mark welcome to the program.
MARK ZANDI, CHIEF ECONOMIST, MOODY'S: Thanks for having me.
ROMANS: Let's talk about aside from being a European traveler coming to the United States and having a field day at the malls what does this mean for Americans where the dollar is weak?
ZANDI: Well it means for consumers that they are going to have to pay more for imported goods from Europe, from Canada. It means if you're traveling overseas it's a problem. It costs $8 bucks to get a Coke in London. It might mean some good things if you're invested overseas, because you'll benefit from a weaker dollar. Manufacturers will benefit, but in general, consumers take it on the chin.
VELSHI: Mark, that's where we feel it the most. It is probably not the bigger part of the economic hit, because it's your vacation, but when it comes to consumers taking a hit with what they buy, we could just switch to buying more stuff that's made in the United States?
ZANDI: Yeah. That's part of the idea. We have a very large trade deficit, and that's one of the reasons why the dollar is weak and falling, and that will make us go and buy goods that are produced here and hopefully that helps improve our trade deficit ultimately down the road.
ROMANS: So bilateral trade deficit a problem. We've been talking about that some time. When the dollar weakens, its helps formulate that against some currencies but not the one that really matters, right? The Chinese Yuan because that one sort of pegs to the U.S. collar.
ZANDI: Yeah, that is a good point. The dollar has fallen against every currency, except to a significant degree against the Japanese Yen and Chinese currency the Yuan. It's fallen against the Yuan, but only very marginally. We need to see a much bigger change there over the next few years.
VELSHI: Mark, folks tend to -- we sort of associate a strong dollar with a strong economy, but there are good reasons to not have a strong dollar, because some of these manufacturing jobs that we've lost because of their goods are more expensive, we could save. What's the right level for a dollar? Do we want a strong dollar? Do we want a weak dollar? Do we want a just right dollar? What is a just right dollar?
ZANDI: Well it depends on how well the economy's performing and how we're doing with respect to trade. At this point I think a softer dollar is a good thing for the economy, because as you point out, manufacturing has really been hit very hard and I think they need a little relief. So a softer dollar at this point in time, I think, is a therapeutic thing.
ROMANS: Will it slow down U.S. consumers at all? Does it make things more expensive here?
ZANDI: Yeah. Again for consumers this is tough. They've been, enormous beneficiaries of a very strong dollar until recent years. They could buy imported goods at very low prices. Now it's going to cost more to buy imported cars, or consumer electronics, clothing. And, therefore, it's going to be a little more difficult for consumers. Good for businesses, good for manufacturers, tough for consumers.
ROMANS: Let me ask you about the jobs numbers today. What that's going to mean for interest rates. Could that affect the U.S. dollar as well? Eight thousand less than expected and the slowest rate of job growth in two years. What do you make of that?
ZANDI: Well, the job market is weakening, largely because of the problems in the housing market. We're starting to see losses in construction and mortgage finance. Even the retailing sector is getting hit a bit because of the housing downturn. So I suspect weaker job numbers going forward.
Of course, that does keep the dollar down; it does take a bit of pressure off interest rates. That's one good thing. In general, the job market is softer today certainly than 12, 18 months ago. VELSHI: So you got a weaker dollar, you got a weaker job market. We got gas at $3 a gallon national average. So why have we got record Dow and just about record S&P 500?
ZANDI: Well, the economy is, a year of economic expansion, the unemployment rate is 4.5 percent, corporate profits have doubled in the last five year, they are still growing fairly strongly, we have a lot of M&A activity, businesses are buying back their stock. There are still a lot of good reasons why stock prices are up. The economy isn't at its best but doing OK, and the stock market has got other things powering it.
ROMANS: It is doing OK, but the rest of the world is doing better. That helps the overseas profits of some of these companies as well. The old saying Mark, where what's good for Wall Street is not always what's good more Main Street. Right?
ZANDI: Yeah. Over long periods of time they have to be in sync. There are points when one can do better than the other.
ROMANS: OK. Mark Zandi, thank you so much for joining us.
ZANDI: Thank you.
ROMANS: When we come back, as college seniors across the country get ready to graduate, we will take a look at how important that expensive diploma really is.
VELSHI: A huge story. MIT fired its director, its dean of admissions Marilee Jones last week after 28 successful years on the job. When she first applied claimed she had not one, not two but three college degrees. Turned out she had one college degree. Except it wasn't from any of the three places she listed.
ROMANS: The school fired her for lying. And that got one author thinking and blogging about how so many jobs require a degree and whether you really need a sheepskin to succeed. That author is Barbara Ehrenreich who works includes the book "Bait and Switch." Welcome back to the show.
BARBARA EHRENREICH, AUTHOR, "BAIT AND SWITCH:" Glad to be with you.
VELSHI: Your credentials are solid, you have a PHD
EHRENREICH: I have a PHD. Yeah, you can check that out. But it has nothing to do with what I do. It's not in journalism; it is not in history another big thing I do. So there's a real disconnect going on here. What fascinated me about the Marilee Jones case is that she had been doing a great job, she was like top of the line, the countries best-known dean of admissions because she wrote about it. And here's a very, very complex job. You know, and she did it fine without the claimed degrees.
EHRENREICH: Now, I'm not condoning her lying initially about the degrees, but, you have to look at that and then on the other hand look at all the students who are college graduates and employers say they still don't have the verbal skills or the basic math skills to do their jobs.
ROMANS: So is the education, the very expensive education, the golden key that gets you in to a job career, or career path, then you learn those skills on the job? Is that what it is? You're paying for the key?
ENRENREICH: I always call it more a lottery ticket than a key. Because you don't know, you know, that 20 percent of college graduates are not, you know, going to end up working in any job that requires that college degree, unfortunately they're going to be Starbucks or something like that for a long, long time.
But you know, it's a lottery ticket and it is a really expensive one. I just -- I think it's great. Everybody should go to college. Everybody who wants to and who qualifies, at any point in the their lives that would be my program, but, you know, we have to really re- examine its link to jobs and it's power to credentials.
VELSHI: So there are two things you're talking about, one is, maybe a college education shouldn't cost on average as much as it does.
ROMANS: That's criminal.
VELSHI: You can't change the cost of it, what are parents or students supposed to do about that? Do you measure which college degree you can get to carry you further, give you more value? What do you do about this?
ENRENREICH: Well I think we're facing a crisis. As the tuition goes up year by year, you know, we're looking at the Ivy League, you said $45,000 a year, I think before, Christine?
That's way more than the average; I mean it is around the average income for a family. That's not doable anymore. Even the support of $20,000, $30,000 for a state college is completely out of reach for more and more people, and I have to look. Some of the things people do, say, in marketing, in -- I can think of all kinds of things. Do you need that, or just good verbal kill skills and on the job experience?
ROMANS: For an employer though, a college degrees shows you can follow-through on something, you can make a commitment to it, you can follow the rules, it's sort of -- it shows that you can -- as an employer, you want somebody who's going to do what they're supposed to do. It's necessarily a conformity factor. It's an important launch pad. Maybe I sound so pie in the sky.
ENRENREICH: Well I'm going to be a little more cynical about that. Yes, you have assignments in college, you better get them in. That's good training for life, right? But a lot of what goes on in college is sitting. Sitting and pretending to be awake and looking at the professor. And a lot of what goes on in the white-collar work world, exact same thing. Sitting and pretending to be awake. You know? I think it's -- there is training and conformity and --
ROMANS: And pretending to be awake with a $26,000 student loan debt that you have to pay off so you have to come every day.
VELSHI: It is one thing to sit and pretend to be awake when they're paying you for it.
VELSHI: It is an interesting debate. Thank you so much for being with us.
ENRENREICH: My pleasure.
VELSHI: A good conversation we'll continue to have. Right now, we have to take a break to pay for our own college educations. We're going to talk about why you might still need a travel agent, even though you're an ace at finding the cheapest airfares on the web, when we come back. Stay with us.
ROMANS: OK where are you going this summer?
VELSHI: I am going to Russia.
ROMANS: Russia? I'm going to Colorado.
VELSHI: They are both out of town.
ROMANS: Did you book it myself?
VELSHI: I booked it myself but my mother's a travel agent. So I come from good travel agent stock that way and I totally know where I can do things myself and where I actually need to say, mom I need some help.
ROMANS: There are times when a travel agent is what you need for more complicated, more expensive trip where you have to cover all the bases, maybe going someplace that you have never been or you don't know a lot about, but if you are going to Chicago or Boston you should just book it yourself.
Well Douglas Stallings is the senior editor of Fodor's Travel, joins us now to tell us about when to use a travel agent, when to do it yourself, and when to just stay home.
VELSHI: Yeah, but mom tells me because I will say hey I need a ticket to Boston, she'll say, do that yourself.
DOUGLAS STALLINGS, SENIOR EDITOR, FODOR'S TRAVEL: Absolutely. If you're just going to book a simple plane ticket or simple hotel reservation you don't need a travel agent to do that. You get a better deal and it's just easier to do it yourself.
ROMANS: If you are going to someplace like eastern Europe, or Croatia for example or Greece, a place you don't really know if I should take this train, I can stay at this hotel for two days, if you are going to take as ferry to go someplace else, you should get somebody who knows the deal to do it for you?
STALLINGS: I think to some degree that's true. I'm going to Greece this summer and I would have used a travel agent. My friend booked the trip for me so he use add travel agent. But Greece is one of those places where is a specialist can help you. There are places like Eastern Europe, parts of Asia.
ROMANS: Is it more expensive to do it that way? A lot more expensive?
STALLINGS: It is actually cheaper. Because Greece is locked up with the travel agent business you can save a lot of money on hotels and ferry tickets, and just being able to book things, if you use a travel agent, especially one based in Greece.
VELSHI: I enjoy these books; you have different kinds of guides for different kinds of people. In some ways, it helps them move towards doing things yourself, because you can read so much of it on your own, but you are hinting on something. Sometimes you're not paying more for the use of a travel agent. Sometimes they're getting you a better deal or they're getting you better information than you might have gotten on your own.
STALLINGS: I think that is true like with cruises, for example. Most cruises are booked through travel agents.
VELSHI: They pay commission.
STALLING: They do pay commissions and you don't get a better deal. Everybody gets the same deal, you get a better deal depending when you book your cruise but now how you book it. So you can book it through the cruise line or the travel agent you won't really save money. But the travel agent, if they are well connected, get you a better cabin, they can make sure that you take a ship that you want to be on, that you have the kind of cruise experience you want and if something goes wrong they're there to help you.
ROMANS: That's the thing. You don't want to be on a big party boat if you don't want to be on a big party boat or on a boat with seniors if you're looking for a party boat. They'll be able to do that.
STALLINGS: That and a resort vacation that is another good place to use a travel agent. You can save a lot of money booking a package trip to the Caribbean and most of those packages are sold through travel agents.
VELSHI: Now here is something interesting, we are talking about gas prices that are up near $3 a gallon average; in many parts of the country people are paying more than that. We just finished talking about the dollar, which is low against many currencies. A lot of good reasons for people to stay in the United States to travel this year, and I've seen a lot of offers from hotels and sort of packages that encourage people to stay around. Do you use those kinds of things to make your decisions where you travel, how far your dollar's going to go?
STALLINGS: To some degree, but for me I want to go where I want to go.
STALLINGS: If I want to go to Europe, and I think that travel patterns are supporting that, people will go to Europe if that's where they want to go and find ways to save money, and Asia, too.
ROMANS: If you want to play the dollar thing, I mean Asia's the place to go.
VELSHI: Benefited from a low Canadian dollar for such a long time. Now it doesn't get that benefit. You're right except I've been looking at these fares to Europe. They're kind of crazy. I think low fares for so many years, encourage people.
VELSHI: You never quite know. One of things that have evolved in the world of online do it yourself booking are these sites that compare fares or tell when you they're cheaper or somehow get you a cheaper fare. Fundamentally for the do-it-yourselfer, who's prepared to read these books, is that a way to go?
STALLINGS: Well I think that's one way to go. I mean, I think -- I think what's better, I feel overwhelmed with information when I use kayak or one of those aggravator sites. I like to go in to forums, on our Web site, other Web sites and get advice and information from people that really know the destination, go there a lot. That's actually more helpful to some degree that is where your travel agent can help. There are specialists in the region. But to get real advice from real people somehow feels better than a bunch of numbers and fare forecasts from some web site.
ROMANS: In terms of cheap fares you go to one of the you know, one of the Expedia, then what I do is then I find a good deal and go to the Web site of the actual airline because I want the miles.
STALLINGS: I used to do that and I like Orbit especially because they will show you all the taxes and fees ahead of time, most of the other web sites don't and I found deals there I haven't found elsewhere. Expedia and Travelocity have good packages and they are also travel agents that are why you're getting the good deal, because they do all the work behind the scenes to put everything together.
ROMANS: Do you get a chance to complain about airline fees, we will have you come back and talk about airline fees?
STALLINGS: We complain about those a lot. ROMANS: Yeah. Not a comfortable weekend viewing.
Good to see you. Thank you for being here with us. Which one do you want Paris or London?
ROMANS: I will take Paris.
VELSHI: I'll take London.
VELSHI: All right. We are going to take a break, when we come back on IN THE MONEY, why getting rid of the jerks in your office could be good for business, might not entirely good for my future.
Plus straight talk about what is effective when your giving feedback at work? Perhaps another segment I should pay attention to. We'll be right back.
ROMANS: The title of a new book by Robert Sutton includes a seven-letter word --
VELSHI: Which I taped over.
ROMANS: That management won't let us say on TV and we probably shouldn't say. We don't want to say it anyway.
VELSHI: Right as long as we don't want to say it while the TV's rolling, but the word starts with an a and ends with somebody wanting to put their fist through the wall.
ROMANS: It is causing a buzz; nonetheless, author Robert Sutton joins us. Welcome to the program.
VELSHI: It's "The No [ bleep ] Rule." We'll say no jerk rule.
ROMANS: We are going to say no jerk rule.
ROBERT SUTTON, AUTHOR, " THE NO (BLEEP( RULE): That sounds great.
ROMANS: So what is the no jerk rule Robert?
SUTTON: Well the no jerk rule is pretty simple. But my argument is, and I've got evidence, that some of the best organizations and leaders don't allow jerks in the door in the first place, and when they start acting that way consistently they try to stop them, maybe subject a little money from their pay and if absolutely worse, get rid of them.
ROMANS: No. VELSHI: Robert, we talked earlier about this moment at M.I.T., the dean of admissions who had something on her resume that wasn't true. My resume doesn't say anywhere that I might or might not be a jerk. How would you know?
SUTTON: Well first of all there is this thing called reference checks and reputation. You can find out about that. The other thing that I really emphasize in the book is that jerks are, being a jerk is something you catch from other people. It's a disease. So if you go in to a jerk-filled culture where people are calling each other stupid, maybe throwing cigarettes at one another, nasty in other ways, you'll start acting like that too. To me, the most important part is it's a leadership and culture issue. Not just an individual characteristic.
ROMANS: Well sometimes-high performers in the office with that can come ego. With that, whether it's sales or television, whatever it's in, you know, you kind of become infallible when you're bringing in the money for the particular company.
ROMANS: The boss is trying to sideline the jerks. That can hurt the bottom line. Can't it? Or is there a way to get around that?
SUTTON: Well first of all that's one of those things that I dispute. If you actually go down the cost of jerks are incredibly high. There was one organization I worked with where they calculated the cost of their star jerk on things driving assistance out, driving good employees away, and it was $160,000 year. This guy was bringing in money but there were other costs, and many of those are well documented, but from my perspective with people like that, that's why the culture is so important.
There is one company I work with called Success Factor, which is the largest growing software company, over $30 million, and they have people sign a contract saying they won't be a jerk, although they use the a-word, not the jerk word.
VELSHI: Lets remind people if you're going to buy this book and you put no jerks, the no jerk rule into Amazon, it's not going to come up.
SUTTON: Not going to come up. But the point is that the CEO of this company said, well you haven't signed the contract, and then you subtract money from their pay if they're bad and ultimately fire them. It's amazing how people that used to act like that in other places come around.
VELSHI: I tell you that is a massive human rights case waiting to happen. Here's the thing. We constantly read, maybe we in the industry are a little guilty of this, we are constantly reading articles about this fantastic lawyer, this fantastic analyst on Wall Street boy what a jerk, but everybody knew he or she was a jerk, but, boy, we they bringing in the bacon. We make excuses for it. You said it's about culture change. What is it? Just coming in, saying don't be a jerk or some other kind of leadership? SUTTON: Well to me, there's two parts of this. One is dealing with the specific individual jerk. So back to the guy whose name is Ethan who cost them $160,000 one year. What they did was they subtracted $100,000 from his pay. That's something specifically, but from a leadership or management stand point to me it's a system, it is what you do when you hire, it is how you reward them and it is who you get rid of. One point, which I really dispute, is this notion that you need to be a jerk to be successful. There are plenty of people in business who are successful who aren't jerks.
You can look at every place from Southwest Airlines, to I already mentioned Success Factors, and in your business I keep asking around. It's a little harder to find people nice in the entertainment industry or who are successful. But I keep hearing that Steven Spielberg and Danny Devito, who are both pretty successful, are actually reasonable human beings as well. So it is possible.
ROMANS: I found a guy on television, this guy named Ali Velshi he definitely is a -- I say --
VELSHI: Because you bring out the best in me. In all the years we've worked together, you're right, Robert. It is contagious. Christine is the ideal, kind, and good person. Is there something --
ROMANS: Oh stop. Tell me more, tell me more. Stop!
VELSHI: When you say jerk, it sounds like a blustery loudmouth irritating person. What about passive aggressive? People who don't confront anything?
SUTTON: So to me, in fact since I wrote the book I literally get hundreds of e-mails in the different ways in which people feel abused. One of the worst ways is people who treat others like they're absolutely invisible. So one legal secretary wrote me a story about how she works with a partner who walks by my desk 30 times a day never even looks me in the eye or acknowledges me as a human being. It isn't just being overtly nasty. It's backstabbing, the little glares. It isn't just the screaming insults.
ROMANS: And Robert finally if this is a leadership issue, you got to lead by example from the top down?
SUTTON: Yes. In fact, go back to my buddy Lars, who is CEO of Success Factor. The thing I love about Lars is he says he is a recovering jerk, and when he blows, if he apologizes and once even he sent out an e-mail to the entire company after losing his temper to a small group of people, because he wanted people to understand this was not acceptable.
ROMANS: Hmm. Nice. Robert Sutton, thank you so much. The "No -- blank -- Rule." But you can look up Robert Sutton, if you have to look it up online to try to get a book. Thanks so much for joining us.
Speaking of bullies --
VELSHI: I hope I haven't been mean to me. ROMANS: You've never been mean to me, that not that I can --
VELSHI: Don't think too hard about it. In case you get a brainstorm on that one.
ROMANS: A lot of people think that "American Idol" judge Simon Cowell is a nasty person a jerk to deal with. But having him, having a boss like him could be just what the doctor ordered for those of us trying to climb the corporate ladder at work.
VELSHI: Because he gives people feedback, he tells people what they need to know. Somebody else we get a lot of feed back from is Polly LaBarre she joins us with a look at what makes good feedback. What's good and negative? Good to see you, by the way.
ROMANS: How does "American Idol" fit into it?
POLLY LABARRE, CNN CORRESPONDENT: Here's a fresh twist on "American Idol" for those who think that "American Idol" is the death of television pop music and the culture itself. It's an unlikely source of insight about a big issue, how do you give good constructive feedback at work? I mean lets face it; there is such a dearth of honest, constructive criticism going on in the job.
ROMANS: Is it because managers are afraid to tell the truth? They afraid of H.R. or --
LABARRE: It is a couple things. Feedback has been basically relegated to this once annual ritual, which is so painful for all of us, which of course is the performance report.
ROMANS: One, two, three, exceeds me --
LABARRE: Exactly and it is usually based around this sort of a form. This piece of paper, which basically changes the conversation. So the tone goes from what could be a collegial informal conversation about --
VELSHI: I really like what you've been doing --
LABARRE: Right. It is more of a mentoring collegial conversation and turns it in to a formal painful ritual that has nothing to do with the way that work works today.
ROMANS: You shouldn't keep your feedback just for the annual review, right?
LABARRE: Exactly. So here's how Simon Cowell comes in, I mean I think he's refreshing and too nasty for words. He should take the -- we know what he'd score. The couple things to learn from "American Idol," so feedback are immediate, every week you get feedback. In so many organizations I think this idea that feedback is something that happens once or twice a year is the big problem. The best feedback is immediate, it's in context, part of a daily ritual, e-mail, memos, conversations in the hallways that you have at work as opposed to this ritual that happens once a year. VELSHI: I've always taken the view when it comes to my job that feedback needs to be kept completely separate from compensation.
VELSHI: They are two different things entirely. We have to decide whether what I'm doing is good and whether it needs to change or whether I need to grow and then we have to conversation about the money.
So compensation should be a transactional, tangible conversation that's based on your market value, based on a lot of decision factors. Maybe skills you've acquired, accomplishments you've had during the year, but the conversation around performance should be, again, this daily, informal conversation that is collegial, it is about let me help you make you stronger, better, the best person you can be as opposed to how can we tie little things that you've done to pay? You're absolutely right. In this environment where we think of pay for performance, I don't think it's contradictory to say to keep them separate. I think that is a real important point.
ROMANS: Is the word constructive in here that is important.
VELSHI: It's on the screen!
Yes. Constructive. You can't just tell somebody, that sucked.
LABARRE: Well constructive is kind of one of those wimpy words, a cover for negative feedback. Think about it, specificity I think is so important. Again, here's where "American Idol" comes in. We might stretch this a little bit but I've noticed in "American Idol." Stretch, right.
This is the spin. So in the beginning days you have that bizarre world of all of this talent less people who come through and in odd outfits, they have no chance whatsoever. During those sessions Simon Cowell is so brutal. You're awful. You think you could be an "American Idol"? You must be deaf. Really crushing putdowns.
VELSHI: By the end of it he is saying, you didn't hit the high note properly.
LABARRE: Once the people are in the finals, and they have a chance and they actually do have talent, basically he's trying to do, in his own withering way, say, OK. Be more yourself. Pick a song that suits you better. Or your acting was off. This would never work in our industry. It's quite constructive in that sense, because it's specific.
ROMANS: Hmm. Polly LaBarre, that is fascinating. We should hope to get such constructive feedback from our boss.
VELSHI: We are going to take a commercial break and she is going to tell us how she though we did in that interview.
ROMANS: Thanks Polly.
VELSHI: Listen a small town solution to a growing problem. When we come back, we'll tell you how some people there found cash in trash, and later, stories that clicked on MONEY.com including Rupert Murdoch's play for Dow Jones. We'll be back with that and more.
VELSHI: Last week we brought you a story of a Pennsylvania dairy farmer converting cow waste in to clean electricity. He was looking for some people to partner with.
ROMANS: This week Rob Marciano found a small town in Georgia making similar concept work in a local utility company that's quite happy about it.
(BEGIN VIDEO CLIP)
ROB MARCIANO, CNN CORRESPONDENT (voice over): Mounds of garbage decomposing. Landfills produce huge amounts of methane. It's the second most abundant green house gas and a whopping 20 times more potent than co2. Here at this landfill, methane gas is taking on the sweeter smell of success.
I look around all I see are pipes drilled in the ground. Tell me what process is happening underneath the dirt here.
DAVE GUSTASHAW, INTERFACE, INC: You have an area of digestion occurring in the ground, the microbes are basically eating the garbage, in very simple terms. As a result of that in the absence of oxygen it is generating methane.
MARCIANO: Methane David Gustashaw uses to run his carpet factory, and methane the local utility is happy to sell.
PATRICK BOWIE, CITY OF LAGRANGE: We fill the gas in, clean it up, condition it, compress it, and pipe it about nine miles to the customers.
MARCIANO: Here we are, nine miles away and the methane is being pumped in to your factory?
GUSTASHAW: That's right's this line has two energy sources. It has both electricity and natural gas, or a gas requirement for process heat to help us run the process. This is a direct, what is called a direct gas use of landfill gas.
MARCIANO: Which is not only good for the environment, it's good for the bottom line. You're saving 30 percent by using the methane from the landfill gas?
MARCIANO: With the town owning the utility, the added revenue helps the community. So everybody wins.
It's a small business, and a small rural town in Georgia can do this I know others can do this as well.
Rob Marciano, CNN, LaGrange, Georgia.
(END VIDEO CLIP)
VELSHI: All right. Coming up next on IN THE MONEY, Money.com's Allen Wastler is going to tell us about his call for a Citgo boy caught and some other stories that clicked this week. You're watching IN THE MONEY.
ROMANS: Rupert Murdoch's takeover bid for the "Wall Street Journal" a call for an oil company boycott where the story that caught readers eyes on CNNMONEY.com this week.
VELSHI: Now Rupert Murdoch's not calling for the boycott on gas prices?
ROMANS: The was just a clever way for us to put the story together.
VELSHI: The guy that knows all this stuff is CNNMONEY.com managing editor Allen Wastler. Might have more effectiveness than just this general e-mail.
ALLEN WASTLER, MANAGING EDITOR, CNNMONEY.COM: Just me doing it.
VELSHI: But you are.
WASTLER: First what Rupert's really doing and what people really clicked on was Rupert out of the blue says, hey Dow Jones, how about $5 billion I take you over?
ROMANS: Huge premium.
WASTLER: Now you know who controls Dow Jones? They are traded on publicly. But the super shares are controlled by the Bancroft family, which is descended from Charles Merrill and that entire bunch and everything. We've known about this for a couple of weeks now and we've decided -- no. So they're sort of --
ROMANS: They should of said no in the beginning, right?
WASTLER: Want to see if he ups the offer. See if anybody else comes out of the woodwork. Would GE like to buy it? Keep that "Wall Street Journal"/CNBC thing going. Maybe another publishing company.
VELSHI: Dow Jones has an agreement with CNBC and Fox is starting up a business channel.
WASTLER: That is right; so it does make a little sense that if you want to get the high ground in business news, why not take the flagship newspaper?
VELSHI: The gas thing. We got gas at about $3 on average in this country for a gallon of unleaded.
WASTLER: Right and a lot of experts -- not a lot of experts, but some are saying it will get up past $4 in some areas of the country this summer. Others are saying, once it starts getting high you'll see production technology kick in and try to drive the price down, conservations measures and things like that.
Looking at all this and one of the big clickers for us earlier in the week, on May day, Hugo Chavez, the head of Venezuela sort of said, about all those, you know, European and American oil companies that are in our country producing oil, we're going to take it back. And he nationalized them all and everything. I was a little outraged over that. Because you a lot of people say big oil, big oil is evil. The fact of the matter is they did have a commitment, invested there, pumped it and when a state government turns takes it away, that's not honoring your commitment.
ROMANS: But it's a risk you take when you go --
WASTLER: It is a risky you take but still --
WASTLER: I thought was a bit unfair, I also don't like the idea of Hugo Chavez has some legitimate policy grievances with us. To play games with oil on the American consumer, just sell it to whoever's buying it. Free market type thing.
ROMANS: Playing games with oil?
WASTLER: I don't know if you notice this about me but I tend to shoot off my mouth sometimes. I wrote a blog post this week saying boycott Citgo. Because Citgo is owned by the Venezuelan government, boy, did I get flamed. First, got some supporters.
The first guy was a supporter. "I'm a hard-core Democrat and could not agree more about boycotting Citgo and Hugo Chavez. It is amazing to me that any American would fall for his PR act. Saddam Hussein also offered free oil and we laughed at his insult. Why not do the same for another tyrant dictator?
VELSHI: That was the one supporter.
WASTLER: That was the one supporter. Thanks, mom. "Then boycott Wastler. Bush is the one ripping off taxpayers in New Orleans and nationally with Halliburton gas prices. Chavez is not the only one insulting Bush. U.S. citizens say the same things. Viva Chavez.
Which you know, I love this thinking of anything anti-Bush must be correct. OK? You can have differences with Bush. That doesn't make everybody that has a difference with Bush correct.
We have a final one here. "Boycotting Citgo won't change anything. Look at facts. U.S. Imports, of 1.8 million barrels of oil from Venezuela a day, Venezuela would be more than happy to sell that 1.8 million barrels to China. In fact, they --
ROMANS: And it would to, it is closer than the United States.
WASTLER: You got the distance thing there.
VELSHI: I had a little time on my hands one day this morning, I was checking blogs. Somebody blogged about what you did on the show last week, saying were you calling for an increase in gas price, you were happy the gas prices would be $4 a gallon so that people would use less gas. I was here you were here, that's not what he said. At least they're writing about you.
WASTLER: Any publicity -
ROMANS: Just spell his name right.
VELSHI: There you go.
WASTLER: Take care.
VELSHI: It is Kentucky Derby weekend, by the way. A story of a man who retired from Wall Street with the hopes of getting to the winner's circle.
(BEGIN VIDEO CLIP)
VELSHI (voice over): The Kentucky Derby, the run for the roses. It's the horse race of horse races. Jim Scatourchio is betting on Scat Daddy, a horse he co-owns. Jim says investing in horses is as risky, if not more so, than trading stocks.
JIM SCATOURCHIO, OWNER, SCAT DADDY: I worked on Wall Street for over 30 years and worked for a firm Donaldson, Lufkin's & Jenrette and all of those years I had some involvement in horse racing.
VELSHI: While he work on Wall Street, Jim invested in racehorses with small groups of people. He liked it and made enough money off it that he decided to spend more time and more money on the ponies after he retired in 1998.
SCATOURCHIO: I was fortunate enough to get involved with a horse cotell (ph), to have a successful partnership I was in and after that went on my own and right about the time of retirement came up with a horse called More Than Ready. That ran the 2000 Derby, and finished fourth. Now it's more of a business.
VELSHI: Scatourchio now owns about 30 horses and he says they can be more unruly than the traders he used to manage on Wall Street. Despite it being a business, don't think Scatourchio is immune to the emotions of race day.
SCATOURCHIO: Only a racehorse, is something you've never experienced. When you stop getting cottonmouth two minutes before you go in to the gate, don't own a racehorse. I still get it. It's quite a thrill.
(END VIDEO CLIP)
VELSHI: All right. We'll be right back with more IN THE MONEY.
VELSHI: Doing a story on the ten sort of richest counties in the country. The greatest millionaires, not including their homes. One of them is Phoenix Scottsdale. When I was looking at that I was thinking of myself, you were in Phoenix last week.
ROMANS: I was.
VELSHI: You weren't buying a multimillion-dollar home.
ROMANS: No, I was not. There in almost 100-degree heat for the amnesty immigration allies. Fascinating. About 20,000 people, last year there were 100,000 people. So a lot fewer this year than last year. No problems. Some other towns had, you know, scattered protests. This was peaceful, well organized. People were told, instructed to wear white t-shirts and carry the American flag. Last year remember the May Day rallies? There were a lot of Mexican flags in the streets and there was a backlash among the border security folks. Who said listen, you're talking about the American dream, and giving people the American dream, that's not the American flag. So we only saw American flags in Phoenix. Fascinating, fascinating march. People want amnesty, they want a path for the citizenship for the people who are in the country already illegally and they want essentially unlimited guest worker programs for people who want to come.
VELSHI: What was the impact of these rallies? Did they have the impact that they did last year?
ROMANS: I don't think it had the impact that it did last year. It is a little more fractured, the movement. In some cities you saw anti-war protesters who glummed on. They really try to make sure that the movement isn't sidetracked by other issues. A lot of different groups, there is a coalition with dozens of different immigration groups and so an advocacy group and the like. They're having trouble coming up way consistent message. The message is more consistent in Phoenix than it other towns.
VELSHI: But it is likely that over the course of the next few weeks we might see more legislation in Washington dealing with that. We'll stay on that story and Christine will obviously stay very close to it.
Thank you for joining us on this edition of IN THE MONEY. We are going to see you here next week Saturday at 1:00 and Sunday at 3:00.
ROMANS: See you then.
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