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QUEST MEANS BUSINESS
Quest Means Business Top Ten: Number One, Dominique Strauss-Kahn; Number Two, World Bank President Jim Yong Kim; Number Three, Facing Fear; Tour of New York Studio; Number Four, Economic Halloween
Aired January 1, 2014 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICHARD QUEST, HOST: Come on in, hello, welcome! Yes, come on! This is the QUEST MEANS BUSSINESS studio, and it's a different program tonight as we look back at some of the best moments in 2013.
I'm Richard Quest, and I mean business.
Good evening. Over the next hour, we're going to bring you the Top Ten moments from 2013. Now, on this program, we think it's really important we bring you the biggest names in economics, finance, and business.
And with this in mind, we were really pleased to have as a guest Dominique Strauss-Kahn, the former managing director of the IMF, who fell from grace spectacularly over a sex scandal in New York. I met Mr. Strauss-Kahn in Paris, and in a wide-ranging interview, we talked about whether or not European leaders had botched the recovery in the way they'd handled the Great Recession. It was, without doubt, number one.
DOMINIQUE STRAUSS-KAHN, FORMER MANAGING EDITOR, IMF: Frankly, everybody knows in the business side that when you have a loss, you have to take it and start again. What the Europeans tried to do was to buy time for political reasons. Not to admit the losses.
So they were unable -- still now they are unable to have a plan for the future. They're just trying to buy another six months and another six months. And that's a catastrophe because the cost today is much higher than the cost which would have been the cost two or three years ago.
QUEST: And when you see the way they put together the original Cyprus bailing in ordinary depositors?
STRAUSS-KAHN: Very good example. Cyprus is another disaster, as if history had given no lessons. How can you expect that the Cyprus economy, which is such a small economy, will start again when you're just squeezing all the companies, all the firms, keeping all their money out?
QUEST: So, let's be blunt about this. Is this a case of Germany --
STRAUSS-KAHN: Well --
QUEST: -- pushing austerity or the hard-liners -- you're a socialist. So, is it case of the hard-liners on the right pushing austerity to the absence of anything else?
STRAUSS-KAHN: No. It's not a question of Germany. You have pro- austerity and pro-growth in both countries, in France and Germany, and in other countries, too. The problem is that it's not -- the problem is not a question of austerity or not. It has been too much austerity, I agree with this. And if I were a Greek man, I probably would be demonstrating in the street as others.
But the question is not -- this is not the main question. The question is that more or less austerity, but the economists called the policy mix between fiscal policy and monetary policy is not the point.
The main point is competitiveness, and arguing that you need to have less deficit or more deficit, less debt or more debt, is an interesting problem, but it's not the main problem. The main problem is that Europe is not competitive anymore.
QUEST: So what has to happen to make Europe competitive?
STRAUSS-KAHN: Well, you have to work on competitiveness. The history is too long to be saved today. But countries like France, like the UK, like Germany also, have lived for a century or more on the fact that they keep the technology for themselves -- leave the rest of the world. That's over.
QUEST: But today's --
STRAUSS-KAHN: So, you have to rebuild the competitiveness.
QUEST: -- today's leaders are not up to the task.
STRAUSS-KAHN: Well, I think most of them don't really understand what globalization is. They have been educated, trained, they had their political life in one country and only one country, and they don't realize that Europe is not that big. It's a small part of the world. And the problem is to solve the European problem in the globalization, not against the globalization.
QUEST: They're not up to it. Come on! Come on, Dominique. If we -- we're talking here about a situation where four or five years -- nearly six years after the crisis began and Europe is still in recession, with high unemployment.
STRAUSS-KAHN: Well, if you -- if you want me to tell you that there is a crisis of leadership, I will tell you, there is. You know, some erratic saying, which is that an army of lions led by sheep will always be defeated by an army of sheep led by a lion. And that's exactly what we are: sheep.
QUEST: We were lions being led by sheep?
STRAUSS-KAHN: I'm afraid that --
QUEST: The Commission's not up to it.
STRAUSS-KAHN: Some -- you can't be that general. Some leaders in Europe are perfectly up-to-date and know what they'll have to do. But mostly, the European system is built in a way that no decision is made, no hard decision can be made.
QUEST: There's no easy way to ask any of these questions --
STRAUSS-KAHN: There's no easy way to answer.
QUEST: Fine. So, I'm just going to ask it straight out. What were you thinking that day in New York?
STRAUSS-KAHN: Frankly, I don't remember exactly. It depends if you're talking that day before the events --
QUEST: Before the events.
STRAUSS-KAHN: -- or after the events.
QUEST: Before the events, what led you to the events.
STRAUSS-KAHN: I wasn't thinking anything. It happened -- something happened, which is a private thing, and I still say what happens in a room is a private thing unless the prosecutors find something to tell you that you are going to be charged with something and they have proof of that.
And when prosecutors, after having charged you, tells, OK, finally, we don't have charge enough to charge you, then it means that it's a private thing and nobody has to say anything about it.
QUEST: Why did you settle the case against her? Why did you pay her money?
STRAUSS-KAHN: That's very simple. The US is a very special system. In my country, in most European countries, when on the penal side, people say there's nothing, then you cannot be sued on the civil side. In the US, you can.
So, the prosecutor may say we have nothing against you, but still you may have a civil trial. And I was ready to go to trial, but my lawyers told me, OK, it's going to take four years and it will cost you much more in legal fees than you have to pay even if you win, so you'd better pay her off.
QUEST: Paid her off.
STRAUSS-KAHN: And I decided to settle and go on with my life.
QUEST: Do you give any credence to the conspiracy theorists? That -- was it secret services, the missing BlackBerry, whatever it might be, all these things. Do you give any credence to the fact that you were set up?
STRAUSS-KAHN: Credence? Maybe. Proof? No. So, I'd better say nothing.
QUEST: So, you do give some credence?
QUEST: One of the most controversial aspects of this besides your behavior was, of course, the famous perp walk.
QUEST: You were brandished in front -- this made huge noise in France. How do you now view the perp walk?
STRAUSS-KAHN: I think it's a terrible thing, frankly, but only because it's difficult to live. Many things are difficult to live with. You have to do.
The problem is, that it's a moment where, in all European, American society, you're supposed to be innocent. You're supposed to be innocent until you're convicted. And the perp walk takes place at the moment where you're supposed to be innocent.
And so what happens, you're just shown to everybody as if you were a criminal at the moment where nobody knows if it's true or not. Maybe you're a criminal, maybe you're not, and it will be proved later on. And so, it's just unfair to put people in that way in front of the rest of the world when you just don't know what they have done.
QUEST: Did you feel that at the time?
STRAUSS-KAHN: Well, I was angry. Because at this moment, I didn't understand what was going on, I didn't understand why I was there. I was just understanding that something was going on that I didn't control.
QUEST: The problem with all the allegations about you, sir, whether it be the Sofitel incident or, indeed, the young lady in France or, indeed, the parties libertine soirees, as they're now known. The problem is that none of them -- underneath them all, there's an element of behavior that is not expected of men or women of high office.
STRAUSS-KAHN: I agree. I agree. So, I made this mistake to believe that you could have a public life, doing what you had to do in the public life -- and nobody ever said against me something in the public life -- and that you can have your private life. And my mistake was certainly to believe that you can have these two things together without any connection between.
I was wrong. It was wrong in the way you say because people are not expecting this kind of -- a paradox, behavior from somebody having a public responsibility.
QUEST: Were you an accident waiting to happen?
STRAUSS-KAHN: No, I won't say -- I won't say that. I had in mind that I had my private life, that I could do what I want as long as nobody was hurt or some legal problem appeared, but without any kind of legal problem, I could do what I want as everybody can do what he wants, and that I would be judged on my public service just on what I do in the public.
Again, it was the wrong thing. I understand now that you cannot disentangle the two in that way.
QUEST: As one reads about you and the -- let's face it, there's mountains out there now. You must've read just -- I don't know whether you read much --
STRAUSS-KAHN: Not that much.
QUEST: Not much, right. But everyone says you have an -- you have a problem with women. Dominique Strauss-Kahn clearly had a problem with women in his attitude to them, the way he behaves towards them, the way he views them as sexual objects.
STRAUSS-KAHN: No. I don't think so. I don't think so. I don't think I have any kind of problem with women. I firmly have a problem with understanding that what is expected from a politician of the highest level is different from what can do Mr. Smith in the street.
QUEST: That's the price of being at the top?
STRAUSS-KAHN: Exactly. And I didn't want to pay this price, so finally, I paid it twice.
QUEST: You said that you had missed your rendez-vous with the French people, I believe was the --
QUEST: -- was the phrase. You were going to be a presidential candidate. Was it a case of au revoir or adieu? In other words, are you going to come back again? Everybody wants to know. It's really a basic question, this, isn't it? Do you have aspirations to be president of France?
STRAUSS-KAHN: No. No.
QUEST: Is that a politician's no, a never, maybe, or perhaps?
STRAUSS-KAHN: It's a no. I'm not working in the whole world -- around the world for governments, some in developed countries, some in the developed countries, developing countries. They ask me for advice, I'm happy to help.
Sometimes I make some money, and I need some money to live. Sometimes I don't make some money and I do it for free just because I want to help. And I like it. So, this -- problem of French politics is behind me.
QUEST: An electric interview with Dominique Strauss-Kahn. From a former managing director of the IMF to the current president of the World Bank. We continue our climb up the Top Ten after the break.
QUEST: Three, two, one, take it!
QUEST: They've left me in charge of the QUEST MEANS BUSINESS control room. Well, for a moment or two anyway. Before I do any damage, let's meet a man who's really in charge: Jim Yong Kim is the president of the World Bank, and on our program, he gave us some forthright views about eradicating poverty. It's our story number two. Run it!
JIM YONG KIM, PRESIDENT, WORLD BANK: We have a target to end poverty by 2030, which means bringing it down to a level as low as we can possibly go, and that's really 3 percent. There's so much conflict in the world, people going in and out -- 3 percent is about as good as we can do. So, the strategy is focused on getting us to the target.
The second focus for us is what we call shared prosperity, and that means we're focusing specifically on the income of the bottom 40 percent. So, it's not just getting above $1.25 a day, which is extreme poverty. It's really looking at how much the bottom 40 percent are participating in the overall economic growth.
QUEST: You see, I'm slightly surprised it took you a year to come up with a conclusion to end poverty and share prosperity.
KIM: Have you worked at the World Bank before, Richard?
KIM: Let me put it this way: this is really the first time that we've had two overarching goals for the entire institution, and it's been voted on by the member countries.
QUEST: You say this is the first time there's been a single -- or two goals in this way. I don't understand what's so different about saying we're going to end poverty, which is exactly what -- well, I thought you were always doing, and that you were going to have shared prosperity.
KIM: Let me explain. So, for example, when you look at the growth numbers over the last 20 years, and you say if we have the same growth rate in the developing world as you've had over the last 20 years, how close will we get to 3 percent poverty? And the answer is, actually, not very close. We'll only get to 8 percent.
And so, the difference between 8 percent and 3 percent is huge, and once you get to 8 percent, what's left are not low-hanging fruit. These are the highest-hanging fruit. These are going to be the most difficult people to reach and lift out of poverty.
And so, if you go backward from there, you have to then say, well, then if you want to get to 3 percent, what has to happen? And what has to happen is that countries have to perform when they were -- as if they were performing at their best.
And it's different, varying different periods, three years, five years, ten years, but they've all got to get to the point where they were at their best over the last 20 years, not the average. And so, we have a huge amount of work to do. How do we get countries there? How can we help them get there?
QUEST: So, where do you -- where are we now in percentage terms on poverty?
KIM: We're about 18 percent.
QUEST: Eighteen percent --
QUEST: -- at the moment. And you're about to come out with a new target.
KIM: Right. Well, you asked me about it last time we talked, Richard. What's your interim target? And so, we looked again carefully at it, and we don't think that there's any way that we can get to 3 percent unless we're at least at 9 percent by 2020. So, we have an interim target now, and we want to halve poverty.
QUEST: Now, this is new?
KIM: This is new. This is new --
KIM: I'm announcing it right now to you because you asked me about it last time. And the great thing about having a real target that's given to us by our board, the really good thing about it is then you have to go backwards and say, so, what do we need to do differently to get -- to help developing countries get to the point where over the next 17 years, they're growing as well as they did during their best period over the last 20.
That's a huge job. What were they doing in terms of fiscal policy? What were they doing in terms of investments? What were they doing in terms of health and education? We have to really understand what the strategies were that worked, and then we also have to then understand that the context is different now than it was before, so what will be the best strategy for them going forward?
QUEST: To do this, it's not a one-size-fits-all.
KIM: Absolutely not.
QUEST: Every country has a different --
QUEST: -- set of dynamics, set of solutions, and this. But you have a single organization that has to deal with that.
QUEST: And you're repositioning the bank, so tell me how you're repositioning it.
KIM: Well, there are a couple of things that are really critical for us. First of all, one of the things that we're hearing from everyone is that it's really critical for us to do, for example, public-private partnerships.
And so, in every country in the world, people understand that just foreign assistance is not going to lift them out of poverty. What they really have to do is to use foreign assistance and their government resources to really make the private sector work.
The private sector creates 90 percent of the jobs in the developing world. If we want to see growth, we've got to see public and private work together, and the bank has not been very good at having its public sector and private sector branches working together.
We're completely changing that. We're going to be working together in every single country with joint strategies for every country that's public and private. That's what people want. That's just one example.
The other example is, we're going to ask ourselves every day, are we making progress toward these goals? Is everyone here united toward these goals? Because what happens in bureaucracies, Richard, is that the incentives sometimes get a little bit misaligned with the mission.
In other words, if the incentive is to get your loan or get your deal through the board as quickly as possible, we end up with a hodge-podge of a lot of little projects that were good for the career advancement of individuals, but maybe not aligned with the strategy of a country to actually end extreme poverty. That's the biggest change we're making.
QUEST: Your strategy, your twin strategy of repositioning the bank, when do you expect to see results?
KIM: We're -- we've already had some results. We're going to do most of our reorganization over the next six to nine months. By July 1st of 2014, we will be a different organization, and I think we will be fit for purpose to end poverty and boost shared prosperity.
QUEST: You were not fit for purpose before?
KIM: Well, that's what the staff told me. In our survey --
QUEST: Was that your opinion?
KIM: Was that my opinion?
KIM: Yes. It was my opinion.
QUEST: And now you believe this will turn it around?
KIM: I believe this will turn it around.
QUEST: President Kim of the World Bank. When we return after this very short break, facing my fears.
QUEST: I've always wanted to do this -- and go!
QUEST: Welcome back to QUEST MEANS BUSINESS. Each night, this is the way you see me. But this is the way I see you. And all this technology and the various electronics that makes the program come together, well, it can create certain fears, as I discovered during the year. It's our story number three.
QUEST: I hate public speaking. There, the secret is out. I can broadcast all day on television to viewers who are unseen, but put me in front of an audience and I'm a mess. And now, it's time to face my fear.
CLAIRE DALE, COMMUNICATION SKILLS COACH: Hi, Richard.
DALE: Come in, come in.
QUEST (voice-over): My tutor, Claire Dale. Helping business people communicate effectively is her full-time job.
DALE: I'm delighted to be coaching you. We've got three sessions together.
QUEST: Coaching is based broadly around three elements, three concepts: think, breathe, speak. Today, we're starting with the thinking bit, and the first step, I must identify my own flaws.
DALE: So, can I ask another question, then? How would you describe your voice?
QUEST (on camera): Well, as somebody once described, which I think -- it's like gargling with broken glass.
QUEST: I can't hear that.
DALE: And then, we need to --
QUEST (voice-over): I can't fool Claire. She's watched a recent speech I did in India.
QUEST (on camera): I never start a speech with thanking the people.
QUEST: You've got to grab them, and you've got to hold them.
DALE: You see, I like that about your speech. I liked that you started with --
QUEST: I have often found it is best when staying in somebody else's house not to criticize the wallpaper.
DALE: There's a lot going right, which is good news. And there is plenty to work on as well. First, give you a scale of one to ten, how loud do you think you are?
DALE: Yes. So you're aware --
DALE: -- that it's quiet high.
DALE: Great. The good news is that you can be even more charismatic and powerful without using that level.
QUEST: That one will be difficult, and the reason it will be difficult is because I think it will feed my insecurity. That's going to take me out of my comfort zone.
DALE: So, come and lie down here.
QUEST (voice-over): I may have been broadcasting for more years than is honest or decent, but I have to accept, I've developed some bad habits. The gravelly-ness of my voice in particular, it may be putting undue strain on my vocal chords.
DALE: You're just going to open the back of the jaw, open the mouth, and let the air pass down --
QUEST (on camera): I breathe through the nose or through the mouth?
DALE: You can do either at this stage, all right?
(QUEST TAKES DEEP BREATHES)
DALE: And that's good. Very much a softening of the muscles, ice cream melting, that image is the one I want you to work with. Keep the air going down --
QUEST (voice-over): It's clear, Claire is used to talking to people who think they know what they're doing and then challenging them.
DALE (mumbling): Monday, Tuesday, Wednesday --
QUEST (on camera, mumbling) Monday, Tuesday, Wednesday --
QUEST (voice-over): There's no standing on ceremony, no concession to an already packed schedule.
DALE: I need you to practice these exercises every day, 15 minutes. And you've got an absolute radar for tension.
QUEST: In the middle of the year, we moved homes from London to New York, and the program's broadcast two hours later, so we now bring you the close of the New York market. Studio 71 is our home, and what a home it is. There is, of course, the desk, with the profitable bell.
QUEST: We have the super screens, with which we can bring you so much information in real time. There's the demo area, demonstrations galore, and where we can have a little bit of fun. Then there's the C Suite. Only the chief execs and the government ministers get to be interviewed in these chairs.
And then finally, there's the staircase. Everyone wants to know what's at the top of the staircase. What makes this so different. Well, we took Studio 71, and you'll see, the story four.
QUEST: Welcome back to QUEST MEANS BUSINESS, and welcome back to the Haunted House.
QUEST: Good grief! Be it ghosts or ghouls or goblins, almost nothing it the past few years has been scarier than the financial collapse. The global recovery is tepid and loose. It's gaining ground, but there are skeletons lurking around that could wreak havoc!
QUEST: So, for instance, over here, the staircase to the debt ceiling. The deadline is approaching again in February. It brings out the inner witch and devil in Washington politicians.
Ooh! Now, just like kids with too much candy, there's candy and sweets everywhere --
QUEST: -- in the global economy. The global economy's being pumped with sugar, easy Fed money, ECB money, Bank of England money. And --
QUEST: Ooh! We know what happens after a sugar rush, comes the sugar crash. So -- ah!
QUEST: A banker! We know in the C Suite, the banks have been the backbone of the global economy. Banks are still in hot water. The stress tests in Europe, and now some bankers seem like dinosaurs in their views of the future.
QUEST: Finally, to the most pitiful of all: the lost generation. Here we have the lost souls all over the world. Millions of workers have disappeared like ghosts, jobless, unable to find work. The EU unemployment rate, 12.2 percent we reported just today. And the International Labour Organization, the ILO, sees unemployment globally 200 million people without jobs.
Put it all together, wherever we look, there are skeletons --
QUEST: -- waiting to be found.
QUEST: And this is where all that preparation begins, at the QUEST MEANS BUSINESS props department, where we have a few things left over from Halloween and elsewhere. After all that, I'm gasping for a nice cup of tea. After the break, it's number five.
QUEST: Welcome back to "Quest Means Business" where we're counting down our top ten moments of 2013. This is the kitchen at the office. In the old days, making a cup of tea was an easy business. You poured the hot water on the teabag, and bish, bash, bush, you had a nice brew. Today, technology has got involved and it all seems to be rather complicated. Different teas, different buttons - you never know what to do. Well, when it came to making tea, Poppy Harlow found out that Starbucks is now getting into the tea business in a big way. It's our number five.
(SONG) Wake up every morning and have a cup of tea. I'm late until -
QUEST: (Inaudible). Poppy Harlow's here. Welcome back. It's tea time on "Quest Means Business." Well, it is just after 4 o'clock in New York. Poppy is invited and so are you. Now, when it comes to tea, back in 1946, George Orwell declared, "One strong cup of tea is better than 20 weak ones." It's his famous essay "A Nice Cup of Tea" which explains the proper way to prepare the drink. And perhaps Starbucks should have a look. The company that brought you the Grande Caramel Frappuccino light with a whip is venturing into the more modest tea business. And as you can see here, we have a variety of them. Poppy's with me. Poppy, we're familiar with the Starbucks coffee -
POPPY HARLOW, JOURNALIST FOR CNN: Right.
QUEST: -- (inaudible) recognizes the bone china. But what are they doing now?
HARLOW: Well, I mean this is a whole 'nother jump for Starbucks. So we're used to seeing things like this - the grande latte or an iced 'Frappalappatino' - or whatever you -
QUEST: What is?
HARLOW: -- whatever you call it. I don't know what that is - but it's what we're used to from Starbucks, right? A 'Frappatino,' a latte, but now I give you this. The cup looks the same, but it's tea, it's all tea. What Starbucks is doing - you know they bought this company Teavana. Here's the menu from the store that opened today. They bought it about a year ago. And now they're opening tea bars - not coffee bars - tea bars all around the world, the first one opening today in New York City right near us on the upper east side. This is another expansion for Starbucks. They have gone from buying a juice company to a tea company - really expanding outside their core business. So we sat today with Howard Schultz, the CEO of Starbucks, to ask him what does this expansion mean? What should we read into this big picture?
HOWARD SCHULTZ, CEO, STARBUCKS: Well people don't realize, we've been in the tea business for the last 40 years, but coffee has drowned out the category at Starbucks. The tea category is twice the size of coffee globally. It's a $90 billion category.
HARLOW: What does that mean - more people want it?
SCHULTZ: More people are drinking tea and more people are familiar with tea all over the world than they are with coffee. We think there's a unique opportunity to reinvent tea in the same context the way we reinvented coffee. In the store you're sitting in today, is a shrine to tea. And the analog here is we've built an espresso bar for coffee -
SCHULTZ: Theater romance of coffee, customization - we're going to do the same thing for tea.
HARLOW: Will these stores become as ubiquitous as Starbucks on our corner? Do see that happening?
SCHULTZ: I don't - no, I don't think you'll see thousands of Teavana stores in the U.S. You might see 1,000 over the next five years or so -
SCHULTZ: -- in the U.S. and Canada. I think there's a massive opportunity for Starbucks to bring Teavana and create Teavana around the world, especially in Asia.
HARLOW: It all makes me think how elastic is this brand? How far can you go without making a misstep? Because if you look at the expansion - the rapid expansion - of the mid-2000s, you admitted it yourself - they were doing too many --
HARLOW: -- different things.
SCHULTZ: Well, I think we learned great lessons from those years and I think the big lesson was a sense of entitlement and hubris entered the company. The company is -- as successful as we've been the last few years - has never been more disciplined, more humble and we're not making those mistakes again.
QUEST: With a nice cup of tea, you need something tasty to eat. And during the year we reported on the new craze where a pastry chef had combined the croissant with the doughnut and created the "cronut." Get back. Before long, these cronuts were flying off the shelf - not you. They couldn't make them fast enough. Everybody it seems wanted a cronut or two. They were rationed, a black market was created in cronuts which is why it's our story number six. This is the tale of where the donut married the croissant and created the cronut.
Female: That's quite good.
Female: That's amazing.
QUEST: A fried pastry filled with creme --
Male: Morning, guys.
QUEST: -- that's literally selling like hotcakes. Cronuts are not for the faint-hearted. Only the truly dedicated who are prepared to stand outside and wait quite a long time. How long have you been here?
Male: An hour and a half.
QUEST: An hour and a half? You are barking mad. The line goes back further and further - do you have any idea how long you're going to have to wait?
Female: No, not at all but we've come from Melbourne today so we're hoping to get one.
QUEST: Why are you prepared to wait so long?
Male: Because these things sound awesome.
QUEST: Dominique Ansel is the pastry chef who created this confection. He wasn't out to start a trend, he just wanted to bake something new.
(DOMINIQUE ANSEL, PASTRY CHEF): It just like went viral right away. It just -
(ANSEL): -- like one blog. Because it's new, because it's fun, because it's unusual, because it's good.
QUEST: Besides being tasty, the cronut is an example of pure economics. Only about 300 are made each day, and because customers are limited and can buy just two, demand overwhelms supply. So, a $5 cronut sells for $40 or more on the cronut black market. When you have a coveted cronut of your own, one feels compelled to share.
Female: I'm not ashamed to take half a cronut.
QUEST: Painful as it was, I shared my cronut too.
Female: I can have it? Yes?
QUEST: Go on.
Male: Thank you.
QUEST: Cronuts have gone so has the queue. You can call this a New York fashion and fad or a trend. What you can't do is argue with success. Richard Quest, CNN with the cronuts. The rise of the cronut which has become something of a local delicacy here in New York. Whenever we've been on the road, we've made a real effort to try the local cuisine. For instance, in January when we were in Switzerland for Davos, it wasn't long before we were trying a fondue and shortly thereafter learning the fondues and fon-don'ts. It's number seven. One of the foods that you inevitably are going to eat at some point -- but it ain't cheap I ought to tell you when you're visiting Switzerland -- is fondue. This of course is fondue. It is usually made of an amalgam of cheeses - different types, usually local - so it's all about making sure that you have the right things. Now, you all know what fondue is - you don't need to be a rocket scientist to tell you - you put something on it, you put a piece of bread on the sticks. According to my cameraman, it stinks. But here are the fon-don'ts. All right? The fon-don'ts. Never mind the fondues. What don't you do? You don't double dip. So you don't put it in, eat some and then go back again for another one. That is considered to be really bad form. Provide guests with two forks - one for dipping and one for eating, although I'm not quite sure how you're supposed to do it. Don't drop your food in the pot, and if you do, don't have a scout 'round to try and get it out again. Do eat the toasted crust on the bottom - the Swiss call it (laurele) - something or other which I cannot pronounce, because if I try and do that, it'll all go horribly wrong. And the most important thing - don't have fondue if you're ill and risk passing germs in the communal pots. The fondue of Switzerland. And the one fondue I learned more than anything else is let the cheese cool off first. When we come back, we meet the woman who turned a personal and career disaster into a book.
QUEST: "Quest Means Business" has moved into the News Room for story number eight. It is the tale of the woman who turned adversity to her advantage. Vicky Pryce was convicted of perverting the course of justice after she accepted speeding points for her now ex-husband. She served just a couple of months inside jail, but while she was there, she wrote a book. It's called "Prisonomics." It's controversial and she came and explained why she wrote it.
VICKY PRYCE, AUTHOR, "PRISONOMICS": I observed what was going on and I was shocked by the waste of money in terms of keeping so many people in jail who should not be there.
QUEST: You say you were shocked and you talk about rehabilitation versus retribution and all the issues. But the only thing that I'm shocked about is that you're shocked. Because anybody who knew anything about the penal system knew exactly what you've written.
PRYCE: Well, yes, but not very many people know about the penal system - the extraordinary thing -
QUEST: Because they don't want to.
PRYCE: -- well, also they haven't been in jail of course, and they don't have that experience and they haven't spoken to enough people to understand - enough women in particular which was the case with me - to understand what had actually been going on and how they found themselves in that position and what happens to their children from whom they're separated and the cost to society of looking after the children who are quite likely in fact to become offenders themselves.
QUEST: There are no votes in prison, there's no purpose other than to prevent recidivism which it may be a purpose within itself to spend a penny more than is necessary on prisoners. So why bother?
PRYCE: Absolutely. I think the interesting thing about it is the debate that's going on out there which is that - you know - we lock them away and then the problem is solved. The realities of the problem is not solved. People go to prison, come out and reoffend more than would be the case if they hadn't gone to prison. And that is a huge cost to society.
QUEST: You say at the beginning of the book, right, you're quite up front about it. It's a book on economics and prison in your experience. You say this book does not dwell on the case of - your case - or one before it but will focus on things you learned in prison. But you didn't go to prison as an academic exercise, did you? You went to prison as a punishment for committing a crime.
PRYCE: Absolutely and I accept it entirely, and I did my time and now what I felt was that because so many woman couldn't have a voice, I had to tell the story of - their story if you like, then learn from that and use it as a way of showing that in fact the system is broke in some ways, and it should not be putting so many people in jail. There are alternatives that are cheaper and which of course lead to considerable less reoffending than is the case if you send them to prison. And that prison itself is not a deterrent to crime.
QUEST: The biggest criticism and I - that I've read of your book is that you don't express remorse. You've heard this criticism a gazillion times - you don't express remorse in the book.
PRYCE: It wasn't meant to be that type of book.
QUEST: But should you have done it?
PRYCE: I don't think so. I this isn't the type of book which is sort of opening up myself and saying you know how terrible things have been and what (inaudible) -
PRYCE: Oh, yes you can.
QUEST: You can't write a book telling about your time in prison. It's not just an economic treatise - this is about your time in prison.
PRYCE: Well, the point is of course that people perhaps wouldn't read about economics in prison if I hadn't also written about the time in prison. And this is how I've done it. For this is the way that I've been able to bring the evidence out - by experiencing it myself, talking to other women and then doing huge amount of research when I came out, helped by (inaudible) criminology in Cambridge, help by other researchers who looked at everything, and by all the agencies - I have been arguing for penal reform for a very long time.
QUEST: And yet what the public wants is self-adulation, don't they?
PRYCE: Of course they do.
QUEST: They want you to say 'I was wrong, I was this and that,' and you didn't give them it. You haven't given them it.
PRYCE: Well, what I have said repeatedly, said that if I could turn the clock back, then I would of course, but we can't do that and therefore the point is that we have to look forward and use whatever has happened to me in a positive way. And I believe that this book does it.
QUEST: Very briefly, because I - do you - what's the one thing you learned in prison that you never thought you would have learned having gone to prison?
PRYCE: That everyone around us or almost everyone around us is an offender. They've done something wrong in their lives and there are some unfortunate people who've ended up crossing the barrier and finding themselves in jail.
QUEST: "Prisonomics" according to Vicky Pryce who incidentally is also a real expert on Greece. When we come back for the final two in our best moments, we add a sparkle to Christmas.
QUEST: Welcome back to "Quest Means Business." We are now outside our offices here in midtown Manhattan, shopping for gifts. It's stressful at the best of times, but the holiday season is a nightmare. So many gifts in such a short period of time. Expert advice is required. I turned to an 86-year-old professional shopper. She is our story number nine.
Come hither into La-La Land.
QUEST: Wow, this is quite --. Betty Holbreich and I have something in common. Not just any Christmas crackers, Christmas crackers from (Fordnam's).
BETTY HOLBREICH, PERSONAL SHOPPER: Right.
QUEST: We both love holiday shopping.
HOLBREICH: As a little girl, I loved snow globes - the old-fashioned snow globe. I think this is the beautiful part of it.
QUEST: Ooh, a letter knife. What are the basic principles of buying gifts?
HOLBREICH: I think we sometimes become so imbued with what we like - I notice when you were picking up things - sometimes we don't think about whom we are buying for.
QUEST: This is the spicy stuff - (inaudible).
HOLBREICH: Yes, but you can't smell three at one time. Nobody's nose can take in three at one time.
QUEST: There are three in the bottle.
HOLBREICH: One lifts them out.
QUEST: I think I've just been told off. Over the years, Betty has built up her own personal shopping empire. It's not difficult to see why. You've found an honesty about price, you've found an honesty about packaging and you're not afraid to tell me when you don't think something's right.
HOLBREICH: I'm glad you found it out so early.
QUEST: If she's honest in the gift shop, wait 'til you see her in women's wear. Oh, this is nice, isn't it? This is nice.
HOLBREICH: Feel it. You wouldn't wear it.
QUEST: Well, you're right, I wouldn't wear it but that's not the point. You won't tell me who shops with you, will you?
HOLBREICH: Absolutely not.
QUEST: Oh, come on.
HOLBREICH: My client. They know who they are.
QUEST: They certainly do. Betty has worked with the likes of Cher, Meryl Streep and Sarah Jessica Parker. It's quite a feat for a woman who only started this job in her late 40s. Thirty-seven years ago you came into this building.
HOLBREICH: I was brought here by someone.
QUEST: At the time, Betty's marriage had ended and her children were grown up. What did you want to do?
HOLBREICH: I wanted someone to rescue me. And they did. They're too short and too skimpy, I'd pass.
QUEST: She has never used a computer or a cell phone. She doesn't even ring up her own sales. When it comes to fashion, Betty is never left behind.
HOLBREICH: I can foresee what's going to happen. I can tell you now what we're going to go into in a year from now. They're going to drop the skirts, and we're going to go into a simpler, more contemporary look.
QUEST: So, it's with some trepidation I let her loose on my own ensemble. Tie.
HOLBREICH: Yes, blue.
QUEST: I know. What do you think?
HOLBREICH: OK. I would've put something else with a print on it myself.
QUEST: Whether it's that little black number for the office party or an unusual gift for the boss -
QUEST: You can be sure of one thing. Toast rack.
HOLBREICH: I have one. Bills.
QUEST: Betty knows best.
QUEST: You've got a very nice hat.
Female: Thank you, it's keeping the rain off my head.
QUEST: It's very important to have a hat.
Female: I hope so.
QUEST: Excellent. You can always tell somebody by a good hat. And I needed to learn lessons during the course of the year - how to wear my hat. Some people love it, others loathe it. I just want to look good in it. It's our story number ten. There are bowlers and berets, Trilbys and caps - hats of all shapes and sizes are back. Just near to St. James' Palace in the heart of London, Lock & Co. is the perfect place to find out why and maybe spruce up this old thing. Hats, hats, everywhere hats.
SUE SIMPSON, MANAGING DIRECTOR, LOCK & CO. HATTERS: It completes an outfit. It makes a gentleman look well dressed - as long has he's wearing the right hat of course and it's fitted correctly. That's beautiful. Now, that's very wide. That makes a real statement. You have to have a lot of confidence to wear that hat - it's an Italian Borsalino.
QUEST: Oh you do berets.
SIMPSON: Most hats -
QUEST: No, no, no, I don't (inaudible) that.
QUEST: No, I don't a beret. No berets today.
SIMPSON: Always put a hat on from the front first.
QUEST: Always from the front first?
SIMPSON: Yes, because then it gets in the right position.
QUEST: Forgive me - the coke or the bowler - it's a bit passe now, isn't it?
SIMPSON: No, absolutely not.
QUEST: Oh, come on, it is.
SIMPSON: It is not.
QUEST: It is.
SIMPSON: Let me just put this on your head correctly.
QUEST: It is distressing you, isn't it?
SIMPSON: This one's a little bit big, yes.
QUEST: It is distressing you the way I'm wearing my hat - why?
SIMPSON: Because it's too far back on your head.
QUEST: But (inaudible).
SIMPSON: No, a gentleman should always wear his hat an inch above his eyebrows.
QUEST: On the (rink).
SIMPSON: Yes, just like that. Just a little bit on the side to give it a bit more style. There we are.
QUEST: What do you think about my hat?
SIMPSON: Well, it needs a little bit of work on it.
QUEST: The (inaudible) of it. I've had this hat for eight years, it's been all around the world. Maybe it could do with some sprucing up.
SIMPSON: (Inaudible) clean and brush to remove any marks from the hat.
QUEST: Do you love hats?
SIMPSON: I do.
QUEST: Why? Why do you love them?
SIMPSON: Why do I love them? Because they're just great to work with and we have some fabulous customers.
QUEST: Oh, look at that.
SIMPSON: As you can see, it's beginning to look a little bit less (disreputable).
QUEST: So, on from the front, an inch from the eyebrows. Now I mean business. Richard Quest, CNN, London.
QUEST: An inch from the eyes. That's the way to do it. And that's "Quest Means Business" for this special edition. I'm Richard Quest in New York. Whatever you're up to in the hours ahead, I hope it's profitable. I'll see you tomorrow.