Texas School Principals To Speak Spanish; Middle East Oil In Question
ANNOUNCER: From New York City, America's financial capital, this is</s>IN THE MONEY. JACK CAFFERTY, CNN ANCHOR: Welcome to the program. I'm Jack Cafferty. Coming up on today's edition of IN THE MONEY, say good-bye to the cheap ride. Demand for oil is so strong they can hardly pump the stuff out of the ground fast enough. We'll talk with an energy expert in a couple of minutes, who says the price of a barrel is headed for triple digits and it could happen sooner, rather than later. Also ahead, return to the lion's den. Journalist Scott Taylor was kidnapped and released by Iraqi insurgents last year. Now he's gone back. We're going to ask him why he'd want to do that. They all scream for ice cream and a whole lot of other things. Marketers turning kids into demanding consumers, on your dime, and mine. Find out how they do it and how the families wind up paying the tab. Joining me today, a couple of IN THE MONEY veterans, correspondent Susan Lisovicz, LOU DOBBS TONIGHT correspondent Christine Romans, who has been all over the story on LOU DOBBS TONIGHT about the decline and fall of this country, as encapsulated in a public school district -- Dallas, Texas.</s>CHRISTINE ROMANS, CNN CORRESPONDENT, IN THE MONEY: Dallas, Texas, the twelfth largest in the country, this week voted 5 to 4, the school board, to require principals in schools that have a majority of Hispanics to speak Spanish. This all started when the parents of all these kids went to an awards ceremony. The ceremony was in English, and they got upset. They want the principals to speak Spanish, even if the school district is trying to get these kids to speak English for their own good, because all the studies show English proficiency is the number one key to an immigrant being able to be successful in this country.</s>CAFFERTY: And this -- the students probably can speak and understand enough English to appreciate the awards.</s>SUSAN LISOVICZ, CNN CORRESPONDENT, IN THE MONEY: One would think so.</s>ROMANS: It's the parents.</s>CAFFERTY: It's the parents who refuse, living in the United States, to even make an effort.</s>ROMANS: Both sides of this --</s>LAFFERTY: They want the principals to have to speak Spanish.</s>ROMANS: And both sides of the debate told me it was unreasonable to expect parents to learn English. They live in this country. They speak Spanish. They will only speak Spanish. They are not going to learn English. Is it not up for discussion. They work two jobs and they are not going to learn English. Both sides have told me that.</s>LISOVICZ: I thought we lived in the land of immigrants, where people came to the United States in search of a better life -- and assimilated. That means they spoke the language of the land. Besides that point, who's paying for this? Who is paying for the teachers and for the principals, or whomever, to learn a language more proficiently?</s>ROMANS: Apparently, the school district will have to pay for it. That means taxpayers will have to pay for it. The only bilingual that is going to be around here are the students, little kids, who can speak Spanish and English -- and of course, the principals and teachers who are constantly speaking Spanish and English. The parents of these kids -- this is all to get the parents more involved in the education of their children. There was also an internal Dallas School District report this summer that showed that the schools that had a bilingual principal did not do any better than the schools who had an English-speaking principal.</s>CAFFERTY: You said it just a few minutes ago. You said the parents were much too busy working two jobs to be bothered with learning English. How is they are going to have time to become more involved in the education of their children? They don't even have time to learn the language of the country where they live.</s>ROMANS: One of the trustees who is pushing this, a guy named Joe May, he told me something I found very, very troubling. He said 70 percent of the kids in that school district who cannot speak English or limited English proficiency, 70 percent were born in this country. That means in America today we are -- we are raising children who do not speak English. The studies show that these kids, an immigrant who speaks English will earn 20 percent more than an immigrant who doesn't. And someone who speaks fluent English will earn two and a half times than someone who doesn't speak English. It is an economic -- it is a business importance to learn this language.</s>CAFFERTY: But that's right now. Give it three or four generations. Ain't nobody going to be speaking English in this country. All right. We'll talk more about it at a future time. Unfortunately we only have an hour here today. Maybe it's time for gas stations to ditch the pump jockey and hire grief counselors instead. Gas prices hitting a new record on Monday. They backed off a little later in the week. The oil market very jittery over fears of hurricanes and terrorists and all kinds of other things that could possibly interfere with supply. In fact, one energy expert says the gap between supply and demand is so tight now that a triple-digit price for a barrel of oil might not be that far off. Matthew Simmons is chairman of Simmons & Company, an investment banking firm that specializes in energy. He's also the author of "Twilight in the Desert: The Coming Saudi Oil Shock and The World Economy." Nice to have you with us. Thanks for coming on the program.</s>MATTHEW SIMMONS, SIMMONS & CO. INT'L.: Thank you.</s>CAFFERTY: There is a heated debate about how much oil is under the ground in Saudi Arabia. How come there's no agreement on what's there? I thought we had sophisticated scientists who could figure this stuff out now?</s>SIMMONS: You know, astonishingly, we built a global economy in a blueprint for the future on a concept there was an unlimited amount of oil in the Middle East for the rest our lifetime and probably our children's lifetime, and it was also almost free. Yet there was never any verified data to actually prove that, other than stale statistics that lay in the public domain for years and never changed. And up until the time I started digging through a bunch of technical papers and finally came to the conclusion that it's really very unlikely that Saudi Arabia, or the Middle East could ever significantly increase their oil, it really was a topic no one had thought about.</s>LISOVICZ: That's amazing because the world consumption, of course, is increasing with the economies, especially in Asia, China, India.</s>SIMMONS: And the United States.</s>LISOVICZ: And every day we're reporting outages or civil strife or tropical storms that turn into hurricanes. So how would you assess the situation right now?</s>SIMMONS: We're in a very deep hole. And it took us about 50 years to get there. We're basically out of capacity, globally, to increase our oil supply by any significant amount. But in the meantime, we built an economy that assumes that oil supply could grow as long as there was demand. We're out of refinery capacity, trying to run our refineries on a 24/7 basis. We barely have time to do turnarounds, which is why there have been so many refinery fires this summer. We're not absolutely through the driving season yet. Gasoline stocks are so squeaky tight that any little jitter basically sends the market into very nervous state. And the market should be nervous.</s>CAFFERTY: What is it about the sociological or sociopolitical mindset in this country that fails to recognize, in any meaningful way, any of the things you're talking about here?</s>SIMMONS: I don't know. I think the American people are probably as smart today as we've ever been. We have the greatest transparency. And yet, you know, I read in the paper this morning that Hawaii has just put a cap on gasoline at $2.85 a gallon because it's outrageously high. California, this week, was paying $3.20 a gallon. And I heard people on television in anguish over it; $3.20 a gallon for gasoline is 20 cents a cup. You can go a mile and a half on a cup of gasoline. Try hailing down a rickshaw or a wagon with a horse and seeing if they basically take you a mile and a half for 20 cents.</s>CAFFERTY: Why is it, historically though, the commodity has been so cheap in the United States, hasn't been that way in other parts of the world that use gasoline?</s>SIMMONS: Well, in fact, it was so cheap in other parts of the world the governments decided they could put a tax of four to five times on it and people would still pay for it. That should have told us something. We're pricing the raw material ridiculously cheaply.</s>ROMANS: You know, one thing that people forget, I think, is it is not a commodity like corn. You can't grow more of it.</s>SIMMONS: No.</s>ROMANS: This is something that will go away. You say Saudi Arabia's probably peaking here. What about behavior? What about the idea that unless we find some oil somewhere, that ultimately human behavior's going to have to change?</s>SIMMONS: If, in fact, we are reaching sustainable peak oil supply -- and I think there's an overwhelming amount of evidence to say that day of reckoning is at hand, we might have passed it -- we are going to have to quickly restructure our economies around the globe to actually be far less energy intensive, or we're going to have an unbelievable energy war.</s>CAFFERTY: I mentioned in the introduction to you, that you see the day coming when we pay $100 for a barrel of crude.</s>SIMMONS: One hundred dollars for a barrel of crude is very inexpensive.</s>CAFFERTY: How soon does that get here? Sounds like a nightmarish number. What are the kind of things that can get us there in a hurry?</s>SIMMONS: When demand exceeds supply, and we liquidate enough stocks to actually have no more stock to liquidate, we have a shortage. A shortage induced by demand versus a shortage by some accident could easily send prices up three-fold, four-fold, five-fold, pick a number. We're barreling towards a world where we're going have a shortage.</s>ROMANS: Well, $100 crude. Does that spark a global recession?</s>SIMMONS: No, no. One-hundred dollar crude is basically about 13 cents a barrel for -- excuse me, 13 cents a cup.</s>LISOVICZ: Right. Matthew, you say oil is cheap. When you compare it to bottled water it is cheap. But the fact is we're already seeing signs that consumers are pulling back. And consumers are the engine of the world's biggest economy.</s>SIMMONS: You know, it's interesting. I was in a wedding in Nairobi, Kenya, the last week in June. In Nairobi, which is a city now of, greater Nairobi, of almost 9 million people, abject poverty, they're paying $6 plus a gallon for dirty gasoline and dirty diesel fuel. And the traffic congestion in the morning and the evening was just unbelievable. Felt like being in Mexico City. I don't believe that actually a rise of oil prices of some magnitude will have any -- it will have sticker shock. People will become angry, but it's so unbelievably cheap that we'll just continue to live on our lives. But what we have to do is gear up, and actually create a society that can start being significantly less energy intensive than what we have today.</s>CAFFERTY: And that requires a change in the mindset that there is absolutely no sign of yet, right?</s>SIMMONS: No, not yet. Because the price hasn't -- again, I think the economists' idea that price signals work, they're missing history.</s>CAFFERTY: Yes. Matthew, we have to leave it there. It is interesting stuff. I have a hunch we'll talk about this a lot more. Matthew Simmons, the chairman of Simmons & Company, and author of "Twilight in the Desert", about the supply of oil in Saudi Arabia. Thank you for being on the program.</s>SIMMONS: Thank you for having me.</s>CAFFERTY: All right. When we come back on IN THE MONEY, Iraq through the eyes of a former hostage. Journalist Scott Taylor thought he'd never get out alive. Now he's gone back. We'll talk to him about why he went back. He actually was a guest on this program when he got out of there the first time. Looking forward to an update. Also ahead, from the new guy to the big guy, one year after its IPO, Google is being pegged as the next Microsoft. Find out if the stock is doing likewise. And the fizz goes flat. Some soft drink makers cutting back on sales of their products in school. We'll look at whether concern about pushing marketing to kids is bringing changes to business. Stay with us.