NEWSROOM for August 24, 2001
Aired August 24, 2001 - 04:30 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: Seen in classrooms the world over, this is CNN NEWSROOM.
SHELLEY WALCOTT, CO-HOST: Well, it's finally Friday here on CNN NEWSROOM. Glad you're with us. I'm Shelley Walcott.
Today, the money situation in Europe. Here's what's ahead.
In "Today's News," a sluggish economy translates into unemployment. Why Europe's politicians say the timing couldn't be worse. Then in "Editor's Desk," forget about running from store to store, we'll take a look at the convenience of digital decorating. On to "Worldview" and the celebration of a gender. We'll check out female role models in honor of women's history. And finally in "Chronicle," it's that time of year again, today some financial tips for folks heading off to college.
Just days after the United States Federal Reserve lowered interest rates in an effort to spur the nation's lagging economy, word from Europe is that the German economy is treading water. Figures show that Europe's biggest economy had no growth in the second quarter compared to the first. The numbers were slightly better than economists expected, but they still paint a depressing picture for Germany and its neighbors. Both France and Germany now face rising unemployment. This, at a time when elections are approaching. German Chancellor Gerhard Schroeder likely will be banking on interest rate cuts to help him fulfill a previous campaign promise to cut unemployment.
Tom Bogdanowicz has more on the current state of the German economy.
TOM BOGDANOWICZ, CNN FINANCIAL NEWS CORRESPONDENT (voice-over): French and German political leaders must be tearing their hair out, European economy is moving ever more slowly just as party machines get ready for an election buildup in both countries in 2002. Not only is economic growth lagging but unemployment is on the rise. Alcatel, Danone, Cap Gemini, Infineon, Equant, the list of layoffs grows longer by the day. German unemployment is above 9 percent, French just under and the recent rise in jobless totals may continue well into the next year even if economies recover. UNIDENTIFIED MALE: It generally takes a bit of time before the labor market improves with it so we could still see unemployment rising for some considerable time in the weaker economy such as Germany over the remainder of this year and into the early part of next.
BOGDANOWICZ: But some economists look on the bright side. The IFO business confidence index was up in July after repeated falls and the latest economic numbers indicate German consumers are spending more than initial figures suggested.
JOHN LLEWELLYN, LEHMAN BROTHERS: I'm not saying this is a completely new dawn, but it's a much better outlook for the second half of the year than we'd been expecting until we saw this data and it's consistent with the rise in the IFO yesterday, which doesn't prove that the economy is better but it suggests that it's more than a blip.
BOGDANOWICZ: Trouble is that all those recent layoffs could turn spenders into savers. And while governments may want to boost employment and stimulate consumer spending further ahead of elections, their hands are tied.
JEREMY HAWKINS, BANK OF AMERICA: I think we'll see some initiatives to try and tackle the loosening labor markets. But of course, the problem facing a lot of politicians at the moment is that in (ph) almost without exception now we've got euro zone countries overshooting their budget deficit targets for this year. That makes it pretty difficult for them to actually come out and cut taxes anymore or indeed, increase public sector spending.
BOGDANOWICZ: Economic and perhaps electoral success in Europe could in fact depend on developments across the Atlantic. If the U.S. economy picks up in coming months, Europe's slowdown could be arrested, easing pressure on politicians as voting time comes closer.
Tom Bogdanowicz, CNN Financial News, London.
WALCOTT: With Germany's economic growth at a standstill, many business owners have hit hard times. Some have had to let employees go, others are finding alternate ways to cut costs. There is talk that the government will come to the rescue, but business leaders are not banking their hopes on that.
Bettina Luscher has the story of one woman who is struggling to keep a family business and dream alive.
BETTINA LUSCHER, CNN CORRESPONDENT (voice-over): Karoline Beck continues to dream of her great-great grandfather to produce high- quality insulation material and keep up that old standard of excellence associated with the label made in Germany. But the 35- year-old says times are tough. KAROLINE BECK, BUSINESS OWNER (through translator): It is extremely difficult, she says, compared to 10 years ago. The business climate is almost unbearable, and one often wonders why even to continue to do business here.
LUSCHER: She has some 80 employees and exports turbine insulation material to places like Nigeria and Malaysia. Last year, her revenue was some $4.7 million, but she's worried about future business and she complains about the high labor cost and taxes.
BECK (through translator): If I want to pay a bonus of 100 marks for a good idea, she says, I have to pay out 120 marks and the employee only gets 47 marks, that is absolutely absurd.
LUSCHER: You can hear that complaint from many business people.
(on camera): They are the backbone of the German economy, small and medium sized companies where families hand over business to the next generation. Now Chancellor Gerhard Schroeder wants to help them with a special tax break so they can reinvest profits tax free.
(voice-over): The goal, to help the German economy which has slowed down considerably this year and to help companies that feel that pain. Family companies like the recycling companies of Eric Schweitzer.
ERIC SCHWEITZER, BUSINESS OWNER: We have different taxes for family companies and the taxes for family companies are much more higher than for the -- for the stock exchange companies. And I think it would be one part of the solution.
LUSCHER: Schweitzer inherited Alba, a group of recycling companies from his father. He has 6,000 employees and annual revenue is some $470 million. Alba is doing fine, thank you, but it has noticed the slowdown, especially the crisis in the construction business with waste it removes.
SCHWEITZER: You got a much more bigger competition because you have the same companies on the waste management market before but we have 25 percent less orders.
LUSCHER: Alba can balance that off among its various companies, but Schweitzer demands more deregulation, more privatization. Economists say you cannot blame the Schroeder government.
ULRICH FRITSCHE, ECONOMIST, DIW INSTITUTE: It was oil price increase and economic downturn all over the world, especially in United States but also in other European countries, which created or which initiated this downturn in Germany.
LUSCHER: Karoline Beck is not optimistic about government help. Instead, she concentrates on serving such distinguished customers as the Sony Center in Berlin whose air condition system she insulated. Of course that was a slightly bigger deal than the one of her great grandfather who proudly delivered 10 rubber rings to the last Emperor Kaiser Wilhelm in 1915. But hey, it was the Kaiser after all. Bettina Luscher, CNN, Berlin.
WALCOTT: Do you like your bedroom or do you wish you could change a few things? Maybe you're ready for a new look or getting ready to go off to college. We'll have more about college later. In our "Editor's Desk" today, we look at home decorating. But first a quiz. Do you know which color group would make your room look bigger? Violet, blue and green make rooms look larger because they tend to make other items seem smaller and farther apart. Warm colors like red, orange and yellow make a room seem small and cozy.
Ever wish you could redecorate without having to move furniture, risk buying the wrong color paint and visit every home store in the neighborhood? Natalie Pawelski sat down with Mary Barretta, host of the "Money Pit" home improvement show and she got some of the heavy lifting done with one finger and the help of a few online tools. As you'll find out, virtual decorating teaches you the basics, gives you ideas and lets you try out any number of styles and items without ever having to leave your own home or spending a cent.
NATALIE PAWELSKI, CNN CORRESPONDENT (on camera): Mary, last time I tried to redecorate a room, I ended up going from store to store to store. By the time I got to store number three, I couldn't remember what I saw in store number one. Will decorating online help me out there?
MARY BARRETTA, HOST, "THE MONEY PIT": It sure will. This cuts down the traipsing time -- and remember our moms dragging around those huge wallpaper books and those carpet samples? Shopping online takes away all of that.
Let's look at the GE lighting site.
PAWELSKI: The lighting. You wouldn't think of that as being a big decorator component.
BARRETTA: And it is a great inexpensive way to change the mood of a room. Now, this site will walk you through the whole house, from the foyer to the living room, and give you different lighting options.
So say, we're thinking about changing the lighting in our kitchen. Let's do some ceiling lighting. OK. And for accent lighting, I have always wondered if I could use some lights underneath the cabinets. So let's see how that is going to look. And you know, let's put them above the cabinets, too, just to see how this is going to look, because it's not costing us a dime, and it's very easy to change.
PAWELSKI: You know, this is so much easier than actually like having to stick it in the walls, though.
BARRETTA: And a lot cheaper than an electrician as well. We're going to go to the Moen site, and the amount of things that you can change on bathroom fixtures will amaze you. We're going to design our own faucet. You know what? Let's try to mix silver and gold, let's see how it looks. That's horrible.
PAWELSKI: That's not good.
BARRETTA: So you know what? Let's try black. That's not too bad.
PAWELSKI: And, whereas you can buy curtains, hang them up, hate them and return them -- you're putting in flooring, there is no return policy on flooring.
PAWELSKI: You're sort of stuck.
PAWELSKI: So can this really save you money?
BARRETTA: It is going to save you money because the Internet offers so many options. It is going to save you the money of costly mistakes.
PAWELSKI: Natalie Pawelski, CNN.
ANNOUNCER: Coming your way this season on CNN NEWSROOM, we'll explore people, places and things. We'll meet people prominent in the present.
UNIDENTIFIED MALE: Spanish is here to stay. But it, again, that does not mean it'll impede the children and grandchildren of Spanish speaking immigrants from learning English.
ANNOUNCER: And study interesting people of the past while pondering your plans for the future. We'll visit places far away from home and find fascinating cultures in our own backyard. We'll discover things in the world around us, things seen...
UNIDENTIFIED FEMALE: The ocean is like a soup. It's just filled with creatures from the top all the way to the greatest depths seven miles down. And I just love it all.
ANNOUNCER: ... and sometimes unseen. So join us, starting this fall as we travel from our newsroom to your classroom out into the world beyond. It's all right here on CNN NEWSROOM.
WALCOTT: In "Worldview" today, we'll play games, view art and celebrate history. Meet the brains behind Cranium, a board game getting an update. Travel to Russia for a peak into the works of Andy Warhol. And revisit history as we mark an important anniversary for women.
RUDI BAKHTIAR, CO-HOST: Sunday marks a milestone for women in the United States. On August 26, 1920, the 19th Amendment to the U.S. Constitution was ratified giving women the right to vote. The date is often celebrated as Women's Equality Day. In the past 81 years, women have made great strides.
Today, Kathy Nellis visits a college campus to find out which women stand out as role models for today's younger generation.
KATHY NELLIS, CNN CORRESPONDENT (voice-over): As we celebrate Women's History Month, what role models come to mind? Maybe you think about the late Diana, princess of Wales, who supported many charitable causes, including AIDS research and a ban on land mine. Or what about Sally Ride, the U.S. astronaut who become the first American women to travel in space?
The sky is the limit when it comes to role models these days, particularly when you talk to students enrolled in women's studies programs.
UNIDENTIFIED FEMALE: I guess some female role models that I have, for America, I would have to go with Wonder Woman, who was made in 1941 to be a role model for females. And she kicks major butt. And Amelia Earhart is another good female role model, Janis Joplin, Elizabeth Dole, Hillary Clinton. And international female role models: I am a big admirer of Mother Teresa.
NELLIS: Mother Teresa is a saint of the Roman Catholic Church, who won a Nobel Peace Prize for her work with the poor in India. And you probably know Elizabeth Dole for her long career in public service in the United States, as well as her stint as the president of the American Red Cross and her brief run for the United States presidency.
While she stands as a role model, she encourages women to go out and make their own mark. In her words: "Women share with men the need for personal success, even the taste for power. And no longer are we willing to satisfy those needs through the achievements of surrogates, whether husbands, children or merely role models."
In other words, don't just have a role model, be a role model. Some women have achieved such status that they are recognized merely by their first names: Cher, of course, Pocahantas, and Oprah. Television personalities are on the top of some role model lists.
UNIDENTIFIED FEMALE: My two favorite would have to be, like, Oprah and Martha Stewart. I love both of them. Oprah just seems like she has overcome a lot of obstacles in her life, I mean, starting as a young child. And I just -- I really admire her for how much she has today that she has done by herself and her own. I think it shows she is very independent.
And the same for Martha Stewart. Martha Stewart seems like she can do anything. You know, like one quote is she can get up and have the chickens fed and bake a cake and build a shed all before noon. You know, I mean, like, she can do anything, all those women stereotypical things that she can do. But she can do a lot of things, you know, building, which you associate with men doing, building a shed, or doing those types of things that she can just do anything. Those are my role models.
UNIDENTIFIED FEMALE: For me, I would say the biggest female role model would be Madonna, because she came from -- she didn't have a mother growing up. And she just went to New York with 30-something dollars and just made it all on her own. And she attacks a lot of issues that most women wouldn't want to talk about, like sexuality, and racism, and stuff like that.
And even though she got a really bad rep, I don't know, I think she did a lot for women.
NELLIS: Madonna pushes others to succeed and take their place in the spotlight with this lyrical challenge: "Everybody is a star. You know who you are. This is your chance to shine. It's got to come from the heart. Do it right from the start and step into the light."
Each woman has that light and is a link in the history of women, say instructors at the University of Georgia.
PAT DEL REY, DIRECTORS, WOMEN'S STUDIES, UNIV. OF GEORGIA: We try to look at the ordinary women also. We try and say that those -- there are -- they have been famous women. But like: What was my grandmother doing or my -- you know, someone in my family?
And we try and link with the history that we have just as human beings.
TAMMY CORLEY, WOMEN'S STUDIES, UNIV. OF GEORGIA: The women that I celebrate are women, of course, like my mother. But the truly strong women, the truly phenomenal women are the everyday women -- the strength of a single mother, for example, who raises her children by herself -- truly phenomenal women.
NELLIS: In the words of French feminist Simone de Beauvoir: "One is not born a woman; one becomes one" -- something to celebrate this month and every month.
Kathy Nellis, CNN, Athens, Georgia.
WALCOTT: The work of a legendary American artist and role model is gaining fame among Russians. A special exhibit featuring paintings by Andy Warhol is giving Russians a glimpse of American pop culture. Prior to his death in 1987, Warhol was best known for pioneering work in silk screens, a technique that allowed him to replicate photographic images to canvas. As Warhol gained fame in the U.S., he broadened his horizons making several films. Now, even after his death, Warhol's fame continues to grow as his work moves into new venues like Russia.
Jill Dougherty takes us to Russia for a look at why the pop artist and his work is so well received.
JILL DOUGHERTY, CNN CORRESPONDENT (voice-over): Half a century after he rocked the Western world with his pop art, Andy Warhol is shaking up Russia. Fifty-five paintings, a major retrospective, "Andy Warhol, His Art and Life," sponsored by the U.S. State Department. The works are from the Andy Warhol Museum in Pittsburgh. For Russians like Tatyana, this is the first up-close look they've had at the artist who blurred the boundary between fine art and popular culture.
TATYANA GURIEVA, EXHIBIT VISITOR (through translator): They used to show paintings like this as an example of how not to paint.
DOUGHERTY: Some of Warhol's best know creations are on display, from Campbell's soup cans to a portrait of Mao, deceptively simple for some.
UNIDENTIFIED FEMALE: I was just sharing with her that I could do the same, just take a picture of my friends and just put colors on that.
DOUGHERTY: For others, a deeper view of what makes American culture tick.
UNIDENTIFIED FEMALE (through translator): It's very American art. Warhol is a very strong artist -- very strong. The development of advertising had a major impact on him. Here in Russia, we didn't have that.
DOUGHERTY: Andy Warhol was getting more than his legendary 15 minutes of fame. The exhibit has been on the move for a year and a half, traveling throughout the former Soviet block. In the next six months it will visit Turkey, Croatia, and Slovenia. In Moscow it was shown at the bastion of high culture, the Pushkin State Museum of Art. Something that would have made one of America's most revolutionary artists proud.
Jill Dougherty, CNN, Moscow.
WALCOTT: Do you have a favorite board game you like to play with friends or family? Maybe you like Monopoly or Scrabble, games that have been around for years. Well these days there's a new game and it's being marketed as a game for the whole brain. The creator of Cranium plans to take the board game from the living room to the conference room. But before its big launch, it takes a lot of play to get the game just right.
Lilian Kim takes a look.
UNIDENTIFIED FEMALE: Are you ready? LILIAN KIM, CNN CORRESPONDENT (voice-over): Employees of Seattle area-based Expedia.com are taking a break from work serving as guinea pigs. How they play this new board game will help determine whether it's going to be a winner or loser.
Called Cranium Icebreaker, the game is designed for corporations that want to break the ice before meetings. Among the activities, charades, trivia and sketching, similar to the original Cranium. But the corporate version moves faster and accommodates more people, adjustments made after more than a dozen play tests.
Former Microsoft employees Richard Tait and White Alexander are the brains behind Cranium.
RICHARD TAIT, CRANIUM CO-FOUNDER: We're masters at this process that we call intertiff design (ph) that we learned at Microsoft and that is starting from a prototype and you just evolve it based on very intense...
WHITE ALEXANDER, CRANIUM CO-FOUNDER: Oh yes.
TAIT: ... consumer feedback and watching, learning, listening, modifying and testing again.
KIM (on camera): That process helped make the original Cranium board game one of the most popular ever. In its first week, Cranium sold more copies than Trivial Pursuit sold in its entire first year.
(voice-over): While the hope now is for a similar success, the corporate version has its own distinctive look.
ALEXANDER: We can't predict the future but we're reasonably confident we're not going to be a one-hit wonder.
KIM: A confident outlook for a game that's designed to pump some fun into corporate America.
Lilian Kim, CNN, Seattle.
WALCOTT: In "Chronicle" today some advice that every college- bound student should hear. For many young people, college is the first taste of independence but should stretching one's wings be synonymous with stretching one's budget? We hope not. There are all kinds of other challenges, too, like dealing with roommates, for example.
CNN's Student Bureau reporter Natasha Cole spoke to some college seniors with some valuable advice to pass on.
NATASHA COLE, CNN STUDENT BUREAU (voice-over): Lessons you learn in college are not always taught in the classroom. Seniors who learned the hard way can give some good advice to incoming freshmen. UNIDENTIFIED MALE: Key thing you need to know coming in as a freshmen is moderation.
UNIDENTIFIED FEMALE: Try to eat healthy.
UNIDENTIFIED MALE: And the one thing I wish I would have known is to get more involved in my major.
UNIDENTIFIED FEMALE: And don't be afraid to ask for advice from anybody.
KRISTI GILLIS, CLARK ATLANTA UNIVERSITY: The effects of using credit cards.
COLE: A costly lesson. Credit card companies are eager to sign up freshmen. It's a temptation that is tough for an 18-year-old to resist.
GILLIS: Going to class, seeing tables set out with free T- shirts, free cups, whatever, and drawing my attention to going to the table and then filling out an application to receive a credit card.
MONIQUE KILLYON, CLARK ATLANTA UNIVERSITY: My dad just gave me one of his credit cards so that's pretty much what I'm living off of.
COLE: What many students learn too late is how quickly the debts pile up. Credit card companies count on parents to bail them out.
UNIDENTIFIED MALE: My parents put me on a funding program where they control my credit card and they made all the deposits through a debit card.
UNIDENTIFIED FEMALE: I guess just be careful with it, because it's really easy to say, oh, I have a credit card and I don't have to pay it right now so it's really easy to spend more on it than you can pay back.
COLE: Another hard lesson, the college usually assigns roommates. So what does a student do when they just can't get along with their roommates?
LATOYA DAVIS, SPELMAN COLLEGE: Well, I sit down and I speak with them. I don't let things, you know, go in the air.
KRISTOPHER-JAMAL KLERMMONS, HOLY CROSS COLLEGE: Well, it comes down to who's tougher, you know.
GILLIS: See if you can compromise and see if you can work out whatever it is that's going on. And if it doesn't work, from there I think you would need to take it up with an RA.
UNIDENTIFIED MALE: I am a resident assistant, so I'm supposed to solve roommate conflicts and not enshape (ph) them.
COLE: Besides the RA in the dorms, students can get good advice from counselors hired by the university. UNIDENTIFIED FEMALE: They counsel me and give me advice on how to handle things in my personal life as well as my academic life.
UNIDENTIFIED MALE: Whenever I have a problem, I mean be it a social problem, an academic problem, they're always -- their offices are always open.
COLE: College students living on their own for the first time can be expected to make mistakes. A good piece of advice, learn from those mistakes.
Natasha Cole, CNN Student Bureau, Atlanta.
WALCOTT: And here's another tip for college students, spend your money wisely. Financial experts say far too many graduates don't line out a budget and the consequence, a lot of stress, to say the least. Parents are a good source of wisdom, at least when it comes to finances, and many experts strongly recommend families sit down to talk about money.
Valerie Morris has a few tips for parents, tips college students can learn a lot from, too.
VALERIE MORRIS, CNN CORRESPONDENT (voice-over): Many college- bound students work their way through high school and are familiar with money issues. But what if your child's getting ready for their first foray into financial semi-independence, how can you make sure they don't spend an entire semester's worth of allowance the first week? Truth be told, you can't, but financial specialists say you can, even in these final days before they leave home, lay a foundation for financial responsibility.
UNIDENTIFIED MALE: The biggest mistake that parents make is not sharing the real world with their kids. So many parents want to shelter their kids from reality. But you know, let's face it, life on planet Earth is reality. You're going to head to college, you're going to have to deal with expenses.
MORRIS: Studies show that parents overestimate how much their kids know about finances so it's critical to use these last days at home to hone your student's money smarts. First, how to make a budget.
CATHERINE PULLEY, AMERICAN BANKERS ASSOCIATION: It's important to discuss with them the very first part of budgeting which is needs versus wants. So when you sit down and create a budget and you go over, OK, this is what I need, I need food, I need shelter, I need transportation, at the end of that, you can take a look at what you have left to see what you can spend it on other things such as entertainment.
MORRIS: And once they create that budget, make sure they can stick to it.
UNIDENTIFIED MALE: Have them start writing down what all their costs are, keep their ATM slips, keep the slips from restaurants, keep the book charges. If they have an idea of what their expenses are it'll be a lot easier in the future to know, as a parent, how to budget or help them with some of their finances.
MORRIS (on camera): Remember, just because your child was smart enough to get into college doesn't mean they necessarily have financial smarts.
That's your money, Valerie Morris, CNN Financial News, New York.
WALCOTT: Next week, by the way, is education week (ph) here at CNN.
And that wraps up today's show. Have a great weekend. I'll see you on Monday.
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