CNN IN THE MONEY
Washington Accuses Tehran of Harboring Terrorists
Aired May 25, 2003 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ANNOUNCER: From New York City, where time is money and everybody wants more of both. This is IN THE MONEY.
JACK CAFFERTY, HOST: Good afternoon and welcome. I'm Jack Cafferty. This is IN THE MONEY for Sunday afternoon. Coming up on today's program, the Tehran two-step. In America's diplomatic dance with Iran, some toes are getting stepped on as Washington accuses Tehran of harboring terrorists. We'll check the fallout.
Plus, out of the woodshed. The U.N. votes to end 13 years of economic sanctions against Iraq, find out who stands to gain from one of the world's richest oil supplies. Here's a hint -- we do.
And, better late than never. The morning after pill is the contraceptive that goes to work after the fact. It's been around for years, but now suddenly demand is booming. We'll tell you what's behind that.
Here to lend a little urbane wit intellectual grit to this enterprise, CNN correspondent and old friend of mine Susan Lisovicz and "Fortune" magazine editor-at-large, Andy Serwer.
Memorial Day weekend, it's not so good out there.
ANDREW SERWER, "FORTUNE" MAGAZINE: Yes, the weather's lousy, Linda. It's going to be a big weekend for the movies. Big weekend for people -- hear and watch the show, and take some time out and go to the movies a little bit, too. You've got "Bruce Almighty" opening and other things.
SUSAN LISOVICZ, CNN CORRESPONDENT: I mean, you know, you can have satellite TV, you can have DVDs, but people like going to the movies. And I go see movies with subtitles three quarters of the year, but when it comes to summer, I like to see stuff easy on the brain, and this is where you get it.
CAFFERTY: I hope movies are as good as the commercials. You going to go see "Bruce Almighty?" Because the commercials have sold me, it looks like a giant.
LISOVICZ: The dog scene.
SERWER: You see it everywhere, and that's the thing is that these companies -- these movie studios -- spend so much money on advertising, now. They're so intent on having big first weekend grosses. But, how much money are they spending marketing these things? It's amazing, isn't it? LISOVICZ: I know, but they've got a captive audience, especially when it's Memorial Day weekend -- long weekend, kids are out, and it's raining ...
CAFFERTY: Lousy weather.
LISOVICZ: ... on the eastern seaboard.
CAFFERTY: It will be interesting, though, to see retail sales numbers for this weekend. You know, a lot of people traditionally go to beaches on Memorial Day. That means they go to the stores beforehand and they buy bathing suits, and they buy shorts and suntan lotion, and they buy all those things. And I'll make you a bet the retail sales numbers reflect the fact that this weather kept a lot of people from doing anything like that.
LISOVICZ: Well, I tell you one thing, retailers love to blame the weather when it's good or bad for their numbers. You know that.
CAFFERTY: So, watch out, baby. Right?
All right, on to other things. With America back on high alert for terror, finding and stopping al Qaeda seems even more urgent this weekend, somehow. A new round of attacks suggests the group may be damaged, but it is far from knocked out and the threat from al Qaeda's affecting everything from Memorial Day travel to hopes for an economic comeback in The United States, and it's also pushing a key diplomatic relationship back into the deep freeze, just as it was starting to thaw.
Washington this week said Intelligence reports show that al Qaeda members have been in Iran and, in fact, remain there now. In addition, CNN has learned that Iran is now admitting that it holds some al Qaeda operatives, they say, in custody. The developments have led The United States to break off U.N. sponsored talks with Tehran over regional and security issues.
For a look at where things stand between Iran and The United States and why the relationship matters so much, we're joined now by Shaul Bakhash. He is the Clarence Robinson Professor of History at George Mason University in Washington, D.C., and the author of numerous books on Iran including, "Reign of the Ayatollah's Iran" and "Islamic Revolution."
Welcome, nice to have you with us.
SHAUL BAKHASH, GEORGE MASON UNIV.: Nice to meet you.
CAFFERTY: So what do we do about this? They say they have al Qaeda in the country, but they claim they are in custody.
BAKHASH: Well, yes, I mean, the Iranians have said themselves that they have rounded up, arrested, and sometimes expelled al Qaeda operatives. I think The United States takes a different view, that they seem to be still free to operate. At least that's the allegation. CAFFERTY: Which do you think is true?
BAKHASH: Well, given the record of American pronouncements on weapons of mass destruction in Iraq, I think you have to take it with a grain of skepticism, but if the reports are true, then one must ask, you know, why it is that Iran is engaging in such operations?
LISOVICZ: And so then I put the question to you, professor -- why is Iran -- why would Iran engage in such activities?
BAKHASH: Well, it doesn't make a great deal of sense for Iran because they never had good relations with al Qaeda. They spent a long time repairing relations with Saudi Arabia and wouldn't therefore be involved, it seems to me, in an operation of bombings in Saudi Arabia. On the other hand, there are Iranian concerns about the American military presence in Iraq and perhaps the other problem is the American flirtation with an Iranian opposition group that was armed and supported by Saddam Hussein and -- which is still in Iraq and the U.S. has blown hot and cold about disarming and neutralizing them.
SERWER: Shaul, I want to ask you a little bit about the political situation in Iran. A lot of people don't realize this, but, you know, after Turkey and Israel, Iran has the closest thing to a democracy in the Middle East. Before the Shah or before Khomeini was just a sort of western looking country in terms of the way people dressed. Can this situation be turned more into a democracy? Is Iran moving towards a democracy? And will relations with The United States get better?
BAKHASH: Well, Iran had a very strong democratic movement in 1996, '97, but that has suffered very severe setbacks in the last two or three years. So, I think the hopes we had of a democratic transition in Iran have not been realized and I think one must say this is a moment in which the democratic movement or the fore-movement seems in very serious trouble. As to the improvement of relations between Iran and the U.S., as you said in the opener, there was -- there have been talks between Iran and U.S. representatives, but the issues between the two countries are quite serious. They're nowhere near being resolved and I'm afraid the Iraq situation and al Qaeda allegations have increased friction and tensions between the two countries.
CAFFERTY: To a degree, have the Islamic fundamentalists in Iran been instrumental in trying to rush in and fill some of the power vacuum that was created when Saddam Hussein's government was overthrown? There were charges right away that the mullahs were busy trying to get in there and set up some sort of Islamic fundamentalist government in Iraq in the absence of Saddam Hussein. Are those reports accurate, and if so, will the United States be able to fight off that kind of attempt to subvert what they're doing in the country?
BAKHASH: I don't think it was so much or is so much Iran rushing in with its own agents to try and set up an Islamic government in Iraq, as the fact that many of the leading Shi'ite clergy in Iran -- in Iraq have close relations with Iran. And, for example, the group headed by Ayatollah Mohammed Baqir Hakim Siri is closely supported and has close relations with Iranians. So, the Iranian government doesn't have to send its own people in. There are in the Iraqi leadership, among the clergy, those with close relations with the Iranian government.
CAFFERTY: How would you advise President Bush to proceed on the subject of Iran? He characterized the country as one of the three "axis of evil" in the world. You said democracy is losing the struggle for control of the hearts and minds of the Iranian people. What should he do -- if you were advising him?
BAKHASH: Well, I think the American government is debating three possible policies towards Iran. One is engagement. One is pressure to cause some kind of an internal instability and change of regime. And there are those, of course, who are advocating active pursuit of a change in regime in Iran. I think engagement might be the best policy -- carrots and stick policy -- but, as I say, the issues between the two countries are extremely difficult and it's hard to see either side giving way on the issues that matter most to them.
CAFFERTY: All right, Shaul, we're going to have to leave it there. I appreciate you joining us this Memorial Day weekend on IN THE MONEY. Shaul Bakhash, Clarence Robinson Professor of History at George Mason University in Washington, D.C., thank you, sir.
BAKHASH: Thank you.
CAFFERTY: Coming up, as we continue on IN THE MONEY, the U.N. votes to take the shackles off Iraq's economy with The United States and Britain minding the cash register, find out who stands to gain. You can figure that out, can't you?
Plus, lowering your raise. Americans working just as hard, getting less for it. Remember the old days. Once a year, you get a review from your supervisor and a raise? Well, times have changed. Well look at how tight the economy is and how it's strangling our paychecks.
And the contraceptive pill that's smarter than we are. We'll tell you about the rising demand for a pill that offers protection even when you forget to take precautions. You don't want to miss that. Stay with us.
CAFFERTY: The United Nations this week signed off on one of the fringe benefits of the latest Iraq war, ending the country's status as an economic outlaw. The U.N. Security Council voted to lift economic sanctions that have been in place since Desert Storm back in 1990. The Iraq's oil income will go to a fund with an international roster of babysitters. The United States and Britain have U.N. approval to serve as Iraq's interim governors, at least until the resolution is reviewed one year from now.
For a look at what lifting the sanctions means for Iraq and the countries that are now running it, we're joined by Brad Setser, who's an International Affairs Fellow on the Council on Foreign Relations.
Brad, nice to have you with us.
BRAD SETSER, COUNCIL ON FOREIGN RELATIONS: Nice to be here.
CAFFERTY: Before we get into what this means, are you at all surprised by suddenly how cooperative the United Nations became?
SETSER: Not really. I don't think anybody has much of a choice, this sort of ratifies the reality we know exists on the ground and plus, you know, The United States is the world's leading superpower, the only superpower, and everybody at the end of the day has a much bigger interest in getting along with the U.S. than anything else.
CAFFERTY: Well, they didn't have an interest in getting along with the U.S. before that war started and a lot of countries like Germany and France and Russia were not bashful, they stood right up and said, you know, "We're not going to go along with the U.S., and we're going to veto any resolution that suggests they should be able to go in there and start this war."
SETSER: Good qualification to my slight overstatement.
CAFFERTY: Fair enough. Anyway, now they lift the sanctions and perhaps more importantly, The United States and Britain are put kind of in charge of the government and the world's second largest reserve of crude oil. Give me your take on what this all means.
SETSER: Well, I think it means about four different things. First, Iraq does have the world's second largest reserves of crude oil. It doesn't have the world's second largest current production capacity. So, we shouldn't get too far ahead of ourselves on what impact this is going to have near term on the world's oil market. What it does mean is that the U.S. and U.K. have the legal authority to sell Iraq's oil, to use that oil to finance Iraq's reconstruction, which is, you know, vital.
It also provides for sort of the orderly unwinding of the existing U.N. oil-for-food program, which in the near term will provide oil, food imports, and such things for Iraq, and I think that's a good way of sort of transitioning from the old regime for selling Iraq's oil, the oil-for-food program, to the new method which both the U.S. and U.K. will run.
Third, lift the sanctions so once Iraq has more income coming in and once security conditions improve, trade can resume.
And fourth, and it's sort of a personal interest of mine, it provides a -- sort of -- a several-year legal protection for Iraq's oil, which is important because it means Iraq's at risk. Existing creditors can't try to attach Iraq's oil revenue, and it gives them this little bit of breathing space while they try to reorganize their finances.
SERWER: Hey, Brad, everyone talks about oil, oil, oil when it comes to Iraq. But, I mean, there's got to be some other stuff going on there in the economy. It's not like Saudi Arabia, you have the Tigris and Euphrates River. What do they have? An agricultural base? What other parts of the economy were there, and what can we do to jump start that?
SETSER: Well, yes, they have a little bit of agriculture, but I wouldn't want to sort of -- the story really is about oil, far more than about agriculture or other parts of the economy. There's a little bit of agricultural potential particularly in the north, agricultural production in the south. But, the overwhelming source of income for the Iraqi people is oil. It dwarfs everything else. So in the near term, I don't think you're going to see tremendous explosions in other sectors of the economy. A lot of other economic activity hinges on things like security, which is going to take a little bit longer to put into place.
LISOVICZ: Hey, Brad, obviously there's a lot of international interest in lifting the sanctions, and that is the case now, but the U.S. is already in there rebuilding Iraq, so it obviously has a huge advantage along with its allies. I'm curious as to whether other countries that are interested in doing business or building business really have a chance, given the fact that the U.S. is there in a huge way.
SETSER: And, that's a very good question. I think there's -- it's important to distinguish between, sort of, several different pools of money that are out there. There's the pool of money which is coming directly from the U.S. taxpayers through USAID. It's about $1.7 billion. The U.S is going to obviously have an advantage and, you know, it's going to give that money to U.S. companies. That's the way the aid business works.
If other countries wanted to contribute their own taxpayer funds, I would suspect that a lot of those contracts would go to the companies located in that country, as well. That's kind of the way the aid business works.
What's the bigger question is how the, sort of the oil revenue, Iraq's own money, which is administered by the U.S. and U.K., is going to be spent. And whether other countries are going to have an equal chance -- companies from other countries are going to have an equal chance to get those kinds of contracts. I think there's a balance to be struck and obviously from the Iraqi people's point of view, you want a competitive market and competitive bidding and that means broadening the pool of potential bidders.
CAFFERTY: This -- I know this is a tough question, but in your opinion, is this thing going to have a happy ending the Bush administration envisioned before the war started -- sort of this happy, prosperous, bustling democracy with an increased standard of living and a, sort of a, beacon of light and hope for the rest of the countries in the Middle East?
SETSER: I would distinguish between what's likely in, say, two years and what's possible in ten. I think that vision of a bustling, prosperous Iraq, isn't feasible -- democratic Iraq, isn't viable in, sort of the two years time frame. In the ten-year time frame, it's possible and that's what we should be aiming for. And what our, sort of, game plan should be one that's geared towards achieving that result ten years down the road, rather than two years down the road.
For the next two years, we're looking at trying to, sort of, reconstitute a minimum standard of living, use existing oil production capacity, which isn't that enormous relative to the needs that Iraq faces in the near term, to sort of, stabilize the economy to lay the basis for a, sort of, operating government, then, sort of, begin a political transition. Ten years down, you should be able to bring new oil fields on line, you should have sorted out Iraq's finances and there's a possibility, but certainly no certainty that you'll have achieved this, sort of, improved model for the region.
CAFFERTY: All right, Brad, we got to leave it there. I thank you for sharing your thoughts with us on IN THE MONEY. Brad Setser, International Affairs Fellow at the Council of Foreign Relations.
Still to come on IN THE MONEY, as we continue, trading sky for sea, fears of terrorism changing the way America goes on vacation. Find out what that means for one big cruise line.
Plus, adults only. Well, maybe not, we'll look at the growing market for a contraceptive pill that works after the fact.
And moving the merchandise. We'll tell you how a sports clothing deal will make a multimillionaire out of a high school hoops phenom. $90 million at age 18.
CAFFERTY: Our stock of the week is Carnival Cruises. The cruising industry going through a mixed period, right now. Terror worries cut into bookings, but not as much as they are in the airline industry. Fare prices are way down, but that doesn't hurt the cruise lines as much because they make most of their profits on the stuff you buy after you get on the boat. So, is Carnival Cruise Lines a company you should be interested in? What do you think? Cruise lines, place to be? People aren't flying.
LISOVICZ: Well, they certainly took a hit, I mean, the whole travel and leisure sector took a hit, but it seems that, yes, Americans who are sick of being in their homes, of putting all their money in their homes, are finally getting on a boat and the rates are fantastic and that's one of the reasons why the forecast for the summer is pretty -- pretty optimistic.
SERWER: You got to take a look at Mickey Ericson (ph), though, who runs this company inherited from his dad. And you got to take a big step back and you got to say, look, the airlines, they're bankrupt. Here is a travel business where this guy is -- he's keeping it afloat. I hate to make the joke. But he is. Listen, this business, with terrorism, SARS, the Norwalk fever thing that it hit with, dumping trash into the seas, they got hit with that kind of stuff, too. This company is doing really well. It's consolidating, it bought the P & O Princess Lines, the biggest in the business...
LISOVICZ: ... nearly half the market share in the industry.
SERWER: It's got about -- oh, yes, over 40 percent. He's got a personal fortune of $5 billion and so you got to hand it to this guy. He's one of these true entrepreneur people who's put together a company that's working.
LISOVICZ: And while you're talking about it, and he -- he did not see a decline in salary, I know that's been an issue that's been near and dear to your heart. So, did not take -- he earned $500,000 for last year and a $1.7 million bonus.
SERWER: That's nothing, too.
CAFFERTY: Did they figure out what that disease was? Remember just a few months ago, we had those cruise ships, people getting sick on them and stuff, then all of a sudden we didn't hear any more reports of people getting sick. But, I don't recall hearing that they ever figured out exactly what was going on -- did they?
SERWER: It abided, as they say in the business. I mean it -- you're right, it simply went away. They didn't really figure out -- they did name it. It just seemed to go away and it's just one of those quirky things. But, fighting that from a P.R. perspective was huge for them.
SERWER: Nightmare. Huge.
CAFFERTY: And it just suddenly disappeared?
CAFFERTY: Sometimes prayers are answered.
LISOVICZ: And very happily so for the industry.
CAFFERTY: All right.
SERWER: Up next on IN THE MONEY, less buck for your bang. With America's paychecks growing smaller, money worries are growing bigger. Find out why the country's taking a pay cut.
And the pill for the morning after the night before. We'll tell you why the emergency contraceptive they call the morning after pill is an unexpected hit.
FREDRICKA WHITFIELD, CNN CORRESPONDENT: I'm Fredricka Whitfield at the CNN center. More IN THE MONEY in a moment, but first today's top stories at this hour.
Iran says the U.S. has broken off informal talks after accusations. Iran harbors al Qaeda members. Iran's president calls the charge false. An Iranian foreign minister insists that Iran is serious about combating Osama bin Laden's network.
The Israeli cabinet accepted the U.S.-backed roadmap to peace. It passed 12 to 7 with 4 abstentions. This is the first time an Israeli government has formally accepted the idea of a Palestinian state. However, it comes with a condition. Israel will not allow Palestinian refugees to return to homes in Israeli territory.
Just a moment ago, Gil De Ferran (ph) took the checkered flag at the Indianapolis 500. Two-time champ Helio Castroneves (ph) was denied a record third Indi win, finishing a close second. The race was run under tight security, including two -- two past presidents that were there. Police officers could be seen making the rounds outside the track.
I'm Frederick Whitfield at the CNN center. Another update at the top of the hour. IN THE MONEY continues right now.
CAFFERTY: A lot of Americans have lost their jobs over the last few years, but many of us lucky enough to still have a job are facing smaller paychecks than ever before. It's a problem so common that it's the "Time" magazine cover story this week. With the great title, "Hey, Where's My Raise?"
Joining us now is the man who wrote the piece, "Time" senior writer, Dan Kadlec.
Good to have you on IN THE MONEY, Dan. Nice to see you again.
DAN KADLEC, "TIME" MAGAZINE: Good to be here.
CAFFERTY: You know, it use to be as traditional as the annual trip to the dentist. You get called in, you get that annual review, and then you got a pay increase. It was something you could count on, it was predictable. What happened?
KADLEC: Oh, those days are gone. With the low inflation that we're experiencing now and the tremendous cost pressures that companies are under, they're going to continue to put pressure on wages into the foreseeable future. Which is, I think, the key finding that we found is, this isn't really a cyclical event. This is something that's going to be going on for awhile just because there's -- cheap foreign labor is one of the big components of this. All the outsourcing going on in the world. You know, companies just -- if you're not a low-cost producer, you're out of business and that's what is really driving this.
SERWER: You know, Dan, what I thought was really interesting about your article is it's really kind of a health problem. You see the unemployment rate, out there everyday. Six percent unemployment, but no one really looked into the fact that wages are holding constant or going down. Could this really become a campaign issue -- a political issue?
CADLAC: Well I think, without question, it's going to be. We all know about unemployment, but not too many people have talked about wage deflation. We saw that in the last 12 months, the median weekly salary in this country down 1.5 percent adjusted for inflation. But still, that is not the American way. And if this does not become a campaign issue, I'd be very surprised.
LISOVICZ: Speaking about campaigns, let's talk about a big part of the campaign, which will be the president's tax cuts. Isn't that what the tax cuts, if successful, are supposed to do? We spend as consumers more, businesses spend more, they can charge more, and the economy improves, and then it will be reflected eventually in salaries. Yes?
CADLAC: Well, that all sounds real well. It's good economic theory. But with these cost pressures that I was speaking about before and the whole outsourcing trend, you know, people in India, people throughout Asia, make about a tenth of what we make in this country to do what are turning into some very skilled jobs -- computer programming, financial analysis.
If you can do it -- basically, if you can do it on the computer or over the telephone, your job is at risk of going overseas. And with that risk comes lower wages if you continue to do it here.
CAFFERTY: Is that really a new phenomenon, though, Dan? I'm thinking back to when they used to talk about products labeled "made in Japan." The automobile manufacturers, for example, could produce cars cheaper and import them into The United States and began to take major market share away from the Big Three in Detroit. It's something that's been around for awhile. What's different about the way it is now?
CADLAC: It's been around with manufacturing for a long time, probably 20 years. What's different is the Internet and cheap fiber optic lines across the ocean. It now costs next to nothing to transmit this data. So there's no reason you can't sit over in Ireland or Bombay and do the same kind of thing. It costs almost nothing to transfer the information back here.
Which is why we're moving up the skill level. It's no longer just the unskilled jobs that are moving overseas. It's now the skilled jobs. And that's a real troublesome thing.
Part of this, by the way, is that the educational system overseas -- there are some pretty smart people over there. They're all learning English. They're learning English dialect so that they sound like they're American.
CAFFERTY: For the call centers?
CADLAC: For the call centers. The next time you dial information to get a phone number -- this is amazing to me -- ask that person where they're sitting at that moment. They're going to tell you somewhere overseas.
CAFFERTY: Any kind of problem with your computer -- the numbers you call 24/7 -- most of those people are in India or someplace like, that are answering your questions about why I can't get Microsoft Word to do what I want it to. They're not in The United States.
CADLAC: And these call center people make about $20,000 a year in the U.S. Make about $2,000 in India. It is little wonder that those jobs are moving over there.
LISOVICZ: But Dan, with the unemployment rate at six percent and so many people in real fear of losing their jobs, what is the perception of people who are seeing a decline or a salary that just won't go anywhere? What is the attitude that you're finding out there? Are people just happy to have their jobs? They don't want to make a fuss. They want to stay under the radar?
CADLAC: There's an element of that certainly. The people we spoke with -- a lot of them had jobs and the pay cut they took was that they lost their job but then found another one at considerably less pay. Those people are very thankful to be working.
Because I will tell you something. They were looking for a year or so to find that job. Their severance ran out a long time ago. They ended up settling for something much less than what they thought they were going to get originally. And that is a big element of the declining wage in this country.
CAFFERTY: When you were doing your reporting, Dan, did you have people who had specific problems and stories that come to mind in terms of not getting those raises?
CADLAC: The biggest thing we found were people that had wages stagnant over the last three or four years. And now, some of them, by the way, took pay cuts -- across the board pay cuts -- 10 percent or so. So there's a lot of that.
But the more -- sort of -- depressing stories were the ones that I mentioned with the people who lost their jobs, held out for three or four months looking for something of equal or more pay, severance ran out, the mortgage payments were piling up. Single parents. Union workers. Executives. You name it -- across the board.
Everyone but the CEO. CEO pay we find is still going up 15 percent last year. It's about the only level, the only spot that we found people making more money.
LISOVICZ: But there's more of an outcry now. Friday's "New York Times" has an article about this hostile shareholders meeting where Conrad Block, the British Lord and executive newspaper publisher, saying that he would keep his annual pay at $6 million. I mean these examples are quite frequent.
CAFFERTY: He's going to suffer with that $6 million. I think that's your point. Right. Yes. And one other example was Donald Carty at AMR. This is a story of a few weeks ago. The pension guarantees that those guys were taking, and they tried to get the big bonuses as well but had to give that back. At the same time they were asking their unions to take 20 percent pay cuts. I mean something's just crazy here.
LISOVICZ: In that case, Donald Carty did lose his job.
CAFFERTY: He did lose his job. Not a lot of tears among the union people there.
LISOVICZ: No. Dan Cadlac, senior writer at "Time" magazine and author of a very interesting article called "Hey, Where's My Raise?" Read it and weep.
There is much more ahead on "In The Money." Coming up -- you fooled around but the morning after pill won't. We will look at the rising demand for emergency contraceptives -- the kind you take when you didn't take precautions.
Plus, a score for the swoosh. Find out how Nike lined up a multimillion-dollar deal with a basketball star who hasn't even made it to the pros. Not yet, anyway.
LISOVICZ: The last-ditch contraceptive method known as the morning after pill is going from "off the radar" to "on the money." The "New York Times" says that one company making the pill saw demand skyrocket by 50 percent last year.
This week, New Mexico became the fourth U.S. state to approve it for over-the-counter sales in drugstores. The morning after pill can prevent pregnancy, even if it's used several days after sex. Although it's been around for awhile now, it's just starting to become a hot pharmaceutical property.
For more on the morning after pill, let's go to CNN medical correspondent Elizabeth Cohen in Atlanta. Elizabeth, it's interesting that the research has been around for a few decades. And now suddenly it seems to be a hot property.
COHEN: Well, as you can imagine, Susan, this has been a very controversial topic. In a way, it's not surprising that it has taken decades for this drug to get where it is.
Right now in most states, if a woman wants the morning after pill, she has to go to her doctor. But now an application has been made to the FDA to make the morning after pill over-the-counter. And a decision is expected within the next nine months.
Because the big issue with the morning after pill is, obviously, you listen to the name, you need to take it the morning after you've had unprotected sex. What if you had unprotected sex on a Friday night? Chances are your doctor isn't open on a Saturday.
Lets take a look at some of the facts about the morning after pill. The morning after pill must be taken within 72 hours of having had unprotected sex. Two tablets are taken. They are taken 12 hours apart. It is 89 percent effective at preventing pregnancy. It is especially effective if taken within the first 24 hours of having unprotected sex. Three million doses of the morning after pill were prescribed, have been prescribed since 1999. The Alan Guttmacher Institute says it has prevented 51,000 abortions per year.
Now it is interesting because you think maybe doctors wouldn't like this so much because you don't have to go to a doctor now to get it. But in fact, the American College of Obstetricians and Gynecologists supports the morning after pill going over-the-counter -- Susan.
LISOVICZ: Elizabeth, has this pill, the morning after pill, actually been approved by the FDA at this point?
COHEN: It has been approved. It's approved but it has to be given by prescription. A doctor has to prescribe it in most states. What this is doing, this application is saying, hey, let's let women get this over-the-counter.
LISOVICZ: CNN medical correspondent Elizabeth Cohen, thank you.
The Women's Capital Corporation is one of several companies making a morning after pill. From Washington, D.C., we're joined by the president, Sharon Campbell. Welcome.
CAMPBELL: Thank you.
LISOVICZ: Just how much interest is there in the morning after pill?
CAMPBELL: Well, it's growing very rapidly. Our sales have actually doubled every year since the product was launched on the market in the fall of 1999.
CAFFERTY: Can I ask you about the political overtones here? Are the people who are opposed to abortion opposed to this pill?
CAMPBELL: Generally not. The National Right to Life Committee has indicated that it has no position on Plan B's OTC switch. It recognizes, as most people do, that this is contraception, not abortion. This is not the abortion pill. This is the anti-abortion pill.
CAFFERTY: Sharon, is there any downside to making this medication available over-the-counter without a doctors prescription? I mean that in the sense that -- would it perhaps encourage less responsibility on the part of people who are going to engage perhaps in unsafe sex, saying, "Well, I can go to the drugstore in the morning and get this pill?
CAMPBELL: There's no evidence of that in the studies that have been done to date. In the 15,000-page submission that we've made to the FDA, among the 39 studies that are covered in this submission are quite a large number of studies in which women were given the pills in advance or were allowed to get them through the pharmacist. And there was no impact on regular contraceptive use. Men didn't stop wearing condoms. Women didn't stop taking the pill. There was no increase in unprotected sex as a result of making it easier for women to get this.
LISOVICZ: But Sharon, women are not supposed to take this on a regular basis.
CAMPBELL: No, no, no. We didn't call it Plan A. We called it Plan B.
LISOVICZ: Right. And any side effects associated with this pill?
CAMPBELL: There are some mild side effects. They're usually gone in a day or so. They include nausea, headache, abdominal cramping -- many of the same symptoms that women experience when they take regular birth control pills, which this is or when they have a menstrual period.
CAFFERTY: Sharon, I'm sorry, four states allow you to get this over-the-counter. It's Alaska, New Mexico, California, and Washington. Why those four states? What's happening in the other 46? And are you looking to roll it out state-by-state or is it a national thing you're trying to do?
CAMPBELL: No. We are trying to do this nationally so that women across the country will be able to walk into a pharmacy and get this.
In those four states, there are very active nonprofit groups -- medical associations, pharmacist associations -- who have worked together in large coalitions to either get new regulations passed or get new legislation passed in the case of California, for example. They've done a lot of training of pharmacists. They've made a big effort to let women know that this is available now in pharmacies.
CAFFERTY: It's probably important to point out the distinction, the difference, between this pill that you're talking about, Plan B so-called, and the abortion pill, R-486.
Tell us the difference between the two. Because the abortion pill, that was a real lightning rod for a huge debate in this country.
CAMPBELL: These pills are actually opposites. Our pill is a progestin, a synthetic version of one of the naturally occurring female hormones, which is necessary for the maintenance of pregnancy.
RU-486 is an anti-progestin. It works very differently than Plan B works. Plan B works exactly the same way that other birth control pills work.
LISOVICZ: Sharon, the contraceptive market is obviously a huge one. Where do you see this product being? Is it going to be a blockbuster product ultimately?
CAMPBELL: No. We think the market for Plan B is still a moderate one. And this is something that women are going to use a few times a year at most -- when a condom breaks or if they forget several pills in a row. This is not going to replace regular contraception. But we think the market is much larger than it is today -- the potential market.
Our market study indicates that there are 37 million times a year in which a woman has unprotected sex, contraceptive accident, and unplanned sex -- recognizes that she is at risk of pregnancy and doesn't want to be pregnant. We're meeting less than 10 percent of that need right now. So we would expect to see very substantial increases in sales when women can get this more easily.
CAFFERTY: Sharon, I appreciate you being with us on IN THE MONEY" this afternoon. Thank you.
CAMPBELL: Very happy.
CAFFERTY: Sharon Campbell, the President of Women's Capital Corporation.
Still ahead, as we continue on a Sunday -- a basketball phenom who's walking away with 90 million bucks in a footwear sponsorship deal. We will tell you a little more about LeBron James.
And you can e-mail us about anything that might be getting your attention out there in the great wide world. And we'll entertain sharing your thoughts on the air. Our address -- email@example.com.
Back after this.
CAFFERTY: Just ahead we'll read some of the e-mails. And a couple of guys making big bucks discuss whether they're worth it. One, future pro basketball star LeBron James, $90 million deal to sell shoes. And the other is Carrot Top.
Back after this.
CAFFERTY: You probably already know this. Relations between The United States and France are not very warm right now. No, they are not. But there is one at least one French advertiser who still has, I think, a great sense of humor. Check this out.
CAFFERTY: I love that.
SERWER: That's beautiful.
CAFFERTY: It's just a joke. Before you race to the keyboard, it's just a joke.
SERWER: It's an ad.
LISOVICZ: I've seen people act like that in TV newsrooms. What's so funny about that?
CAFFERTY: Speaking of ads -- a series of commercials that some people are not as fond of featuring Carrot Top as he pitches for one of the oldest and most revered corporations in all the land, AT&T.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: We're training here?
UNIDENTIFIED MALE: Train your finger to dial up the center.
UNIDENTIFIED MALE: It's free for you and cheap for them. Mountain patrol duty.
(END VIDEO CLIP)
CAFFERTY: Carrot Top's major exposure on the tube isn't just something that makes us curious. "Fortune" magazine recently looked into his commercial appeal. And there must be some because he does lots and lots of commercials. And Andy can explain why he's such a hot commodity.
SERWER: No, I can't explain at all. I just want to sound off. This blows my mind. Here is this guy, probably the most annoying person on the planet. I don't say that lightly. The most annoying person on the planet. And here is this old blue chip company that uses him as a pitch man.
I've never heard of this guy before they started doing these commercials. Now he's more and more famous. And in these commercials, he's hitting on girls. He is advertising long distance. What is this Carrot Top? Who is this guy? Does anyone like Carrot Top? It's disgusting.
LISOVICZ: I actually -- he flew under my radar. So I actually called Atlanta to get some background on this guy. The "San Francisco Chronicle" did a survey with its readers of most annoying celebrities famous for just being famous. Carrot Top in a walk. Kathy Lee Gifford No. 2.
SERWER: Yes, but Carrot Top wasn't a celebrity until AT&T made him one. Anybody ever call you Carrot Top? Auburn Top.
CAFFERTY: Nobody's a celebrity until the media makes him one. Don't be picking on my friend Susan. You're really exorcised about this. He's trying to make a living. Has somebody from your magazine actually gone down there and spent time with him?
SERWER: My buddy, Eric Torkels (ph) did, and he says he hates him as much as everyone else does -- which is fleetingly but vividly. And he spent time with this guy, and there was Stockholm Syndrome. He ended up liking the guy.
CAFFERTY: Maybe he's a nice guy. It doesn't have to be Stockholm Syndrome.
SERWER: In defense of Carrot Top, he knows he's insane and annoying and acknowledges it.
LISOVICZ: He wrote in that article that Carrot Top is one of those C List celebrities -- not even B List -- who wormed their way into your consciousness without you ever knowing how it happened. That is in "Fortune" magazine.
CAFFERTY: Here's a story about a kid who stormed into our consciousness, and we all know what it is about. LeBron James -- the high school basketball phenom out of Ohio. He just signed. He is only 18. He's a senior, has not played one nanosecond in the NBA as yet. Yet he has already signed a sneaker deal that AP reports is worth more than $90 million.
LeBron James is expected to be Cleveland's top pick after they won the No. 1 pick in the NBA lottery. Nike is hoping the phenom will help boost their sales of basketball shoes to that crucial team market.
And, of course, everybody's got an opinion on whether the kid who's going to skip college and go right into the pros is worth this kind of money. This is megabucks.
They only paid Tiger Woods $40 million for his endorsement deal -- the same company, Nike -- when he was coming out of Stanford University. But he had a rather illustrious amateur golf career where he posted scores and did things that were comparable to what is done on the PGA Tour.
Nobody knows if this kid can play against Shaquille O'Neal or not.
LISOVICZ: Nike and NBA -- for that matter -- are looking for the next big thing. And it's not only, of course, his basketball skills, which are unquestionable, but his personality. And then if in fact the team he ultimately plays on, whether it's the Cleveland Cavaliers or somebody else, whether they actually are any good.
SERWER: Name the starting five of the Cleveland Cavaliers.
LISOVICZ: I can't, that's my point.
SERWER: They had the lowest attendance in the NBA. I checked it out. This guy -- you hit the nail on the head -- he has to be able to play but he also must have the personality.
And he has the second biggest endorsement contract now. Tiger's is now up to $100 million. He's at No. 2. He has to have that personality. It looks like he does. But you need both. It's a risk.
LISOVICZ: Remember when Alan Iverson was the next big thing? And part of the thing that he is playing for the Sixers. And they made it to the playoffs but ,,,
SERWER: They're doing OK. And AI has a personality too. A lot of people like him. A lot of people don't like him.
CAFFERTY: He's not particularly pleasant.
SERWER: Well it's a personality. There are a lot of people who don't have personalities.
CAFFERTY: It's going to be fun to watch and see how the young man performs on the basketball floor, and, more importantly perhaps, how he stands up to the intense glare of the media spotlight and all the attention he's going to be getting -- even more now that he moves forward.
Time to check the e-mails as promised. A lot of you sounding off on our segment about Jason Blair's deception at 'The New York Times." Jason lied in his stories. It's more than deception. He lied in his pieces that he wrote for The Times, and he lied in them for a long time before anybody figured out what he was doing over there.
One viewer wrote, "Apparently, you do not realize that most of us across our large country do not regard "The New York Times" as the be- all and end-all news source. Many of us regard the current brouhaha over The Times as rather provincial.
There's a lot of e-mail weighing in about Ted Turner's financial woes and challenges. Victor in New Jersey wrote us this: "Ted Turner is worth only $1 billion? And that's news? When he has to sell his car to pay for his kid's education or put food on the table, then you have a story.
And while Richard Branson (ph) bought his employees a (UNINTELLIGIBLE) Australian Island, there is still no great perk coming to those of us who labor here in the AOL Time Warner Vineyards.
Richard from Vancouver took pity and wrote, "A few short years ago, CNN could have bought two islands for its staff. Now, maybe you can get management to spring for one of those $19 Kobe beef hot dogs.
SERWER: I'll take it.
CAFFERTY: We get one of those every day.
Remember, you can get your voice on the program. All you have to go is e-mail us at firstname.lastname@example.org.
That's all for this tiny little broadcast for this Sunday. Management allowing, we'll be back on Saturday at 1:00. My thanks, as always to Susan Lisovicz, financial correspondent for CNN, and my pal, Andy Serwer, editor-at-large of "Fortune" magazine.
Enjoy Memorial Day and the rest of the week. And we will see you Saturday or on "AMERICAN MORNING" -- weekdays beginning at 7:00 Eastern. Check that out. It is a bucket of laughs too.
TO ORDER A VIDEO OF THIS TRANSCRIPT, PLEASE CALL 800-CNN-NEWS OR USE OUR SECURE ONLINE ORDER FORM LOCATED AT www.fdch.com