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CNN Live Event/Special

CNN Hotline: America Speaks

Aired September 17, 2001 - 00:00   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.
JACK CAFFERTY, CNN ANCHOR: Sunday night, the end of the toughest weeks for America since Japan bombed Pearl Harbor 60 years ago. Tomorrow brings more uncertainty as the stock market reopens after the longest closing since World War I.

By now, it's a story we all know too well. Five days ago terrorists commandeered four passenger airplanes and turned them into flying bombs. Two of them destroyed the world's biggest symbolism of capitalism, the World Trade Center. A third partially destroyed the symbol of the mightiest military power in the world, the Pentagon. And the fourth crashed in Pennsylvania killing everyone on board.

We've spent the past few days mourning, burying the dead, searching for those still unaccounted for, thousands of them. And now the war drums in Washington grow louder, stirring an otherwise peaceful nation to a common goal -- remove these terrorists from the face of the earth once and for all.

We'll talk about it and take your calls on CNN's Hotline.

Good evening, I'm Jack Cafferty. The CNN Hotline number is 1-800-310-4CNN. Tonight three guests who are here to shed light on what to expect when the stock market opens tomorrow morning for the first time in almost a week, where's the economy heading. We have CNN correspondents at the White House; at ground zero, the site of the collapse of the World Trade Center in lower Manhattan; and around the world, who will be reporting on developments, answering your questions.

In fact, we have a call right now from Jack in Michigan. Good evening, Jack. How was your week this week?

JACK: Well, it was a little tense. I live very close to Detroit. We've seen a lot of race riots and we've got a very large Middle Eastern population. But I wanted to secondly talk about the economy and what, as an American, I can do to help the economy.

You guys work with statistics -- not you, Jack, but everybody else on the panel -- but you work with statistics. And I want to know how much money do I need to put into the economy every week aside from my regular bills and utilities? Should I be buying Christmas gifts now to help the economy to make sure that everybody understands that we are still a country well, we're ready to fight, we're ready to preserve freedom at any cost?

CAFFERTY: It doesn't sound like your confidence as a consumer has been effected at all by this. Am I right?

JACK: Well, our family has gone through a couple of layoffs in the last couple years. We...

CAFFERTY: Right.

JACK: ... we're by the auto industry, you know, we have some problems with that. But I want to make sure the recession does not go any -- is any worse than it is now.

CAFFERTY: Patricia Chadwick, what can the average person do? Is it a time now to make major purchases or is there just too much uncertainty in the air and should you wait until things sort themselves out a little bit perhaps?

PATRICIA CHADWICK, RAVENGATE PARTNERS: No, I actually think the most important thing is not to get a bunker mentality. And I think this woman sounds as though there's no bunker mentality there. I think it's important for people to try to live their lives. I don't think they have to go out and necessarily feel it's important for them to spend for the rest of the economy. There will be lots of stimulus to this economy. The Fed, I'm sure, will be easing again.

Obviously, the government is going to be enormously supportive in the rebuilding of New York. And we will see a tremendous amount of money, we're already seeing huge donations coming in from corporations who are already having their earnings taxed pretty hard because this economy is a lot softer.

So I think for individuals the most important thing is to lead your normal life. Don't get into a bunker and say this is the end of the world and I'm afraid to spend. But then don't do anything rash either. You don't have to spend for other people.

CAFFERTY: Fair enough.

Patricia Chadwick is the president of the investment firm of Ravengate Partners. To her right is Mansoor Ijaz. He is the chairman of the firm called Crescent Investment Management. Mansoor is an American Muslim of Pakistani descent and serves, among other things, on the Council of Foreign Relations. So you'll be able to talk not only about the markets and about and about investments but, perhaps, about the ongoing political developments and the outlook for eradicating terrorism and some of the other things on the national agenda.

And joining us this evening from Los Angeles, California, Larry Elder who is a columnist for Investor's Business Daily. He's also a talk show host on KABC radio.

I don't see -- well, there's Larry. Larry, good to have you with us.

We begin -- this is the panel. These are the people we'll be talking to for the next couple of hours. But before we get to that let's go up to the roof overlooking the sight of the devastation of Tuesday and get the latest news developments from Garrick Utley. Garrick.

GARRICK UTLEY, CNN CORRESPONDENT: Thanks, Jack.

The early morning hours just after midnight here on the East Coast of the United States and here in New York City, here are some of the latest developments in the news we're looking at.

Though Wall Street, as you have been saying and as we all know, has been getting ready to get back to work, there's a lot of dust to be cleaned up down there. George Washington is getting a shower, cold water shower. The opening bell at the New York Stock Exchange will ring at 9:30 a.m. Eastern time signaling the return to business. The U.S. exchanges have been closed since last Tuesday.

A few blocks away no one is thinking about the Dow or the Nasdaq, only the search that continues and the clearing of the rubble there, the mountains of rubble. The number of missing and feared lost is still holding at 4,957. 190 people are confirmed dead.

Earlier on Sunday President Bush returned to the White House from Camp David where he'd spent the weekend with his officials and said to Americans it's time to get back to work.

(BEGIN VIDEO CLIP)

GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Tomorrow when you get back to work, work hard like you always have. But we've been warned. We've been warned there are evil people in this world. We've been warned so vividly. And we'll be alert. Your government is alert. The governors and mayors are alert that evil folks still lurk out there.

(END VIDEO CLIP)

UTLEY: A few hours ago two more arrest warrants were issued for two material witnesses. Precisely why they were arrested is not known, details of the warrants are being kept under seal. And earlier today, the FBI searched an apartment house in Del Ray Beach, Florida. Authorities there believe that at least one of the suspected hijackers lived in that apartment complex in Florida. Both men are believed to be connected with Osama bin Laden, the man President Bush described as prime suspect behind Tuesday's attacks.

Now you might think bin Laden could have made more out of his life. His father in Saudi Arabia built up a multi-billion-dollar business. Bin Laden was not exactly a deprived child. Well anyway, he is now the most wanted man in the world. And today he said don't blame me. Bin Laden denied that he played any role in Tuesday's attacks. His statement reads -- and you can read this closely along with us.

Quote, "After the recent attacks which the United States has witnessed, the U.S. government ventured to point fingers at me, accused me of involvement. The U.S. government has consistently blamed me for being behind every occasion its enemies attack it."

And he goes on, "I would like to assure the world that I did not plan the recent attacks which seems to have been planned by people for personal reasons. As for me, I've been living in the Islamic emirate of Afghanistan and following its leaders' rules. The current leader does not allow me to exercise such operations."

Well, the rulers of Afghanistan are the Taliban. They depend on neighboring Pakistan for fuel and other critical support. Now Pakistan has told the Taliban to hand over Osama bin Laden in the next three days or risk the United States launching massive military action against them.

So we are now, Jack, really at three days and counting.

Just one little footnote here as we get ready for Wall Street to reopen, the caller at the top of this program just a minute or two ago is very interesting in asking what she can do to help the economy. Of course, markets -- the markets that will open down here in Wall Street at the stock exchange are not at all emotional or patriotic. They're about cold, clear thinking.

And I think one of the things we need to keep in mind, and perhaps the people under the greatest stress are going to be those traders, those investors, those pros down on Wall Street. Many of them have lost a lot of friends and they're still in grieving. And tomorrow they have to go back and make these clear-headed decisions. That's going to be a particularly tough day for them -- Jack.

CAFFERTY: Indeed, it is.

All right, thanks, Garrick. Garrick Utley with the latest news.

The overseas markets, of course, had a chance to react to this tragedy when it happened and they did. They sold off some, then they recovered. However, I would guess in anticipation that these markets may open sharply lower here in New York tomorrow morning, the European markets, as I was on the way up to the studio I noticed they're all down triple digits. They're getting hit pretty hard in the -- in the sell column.

Mansoor, Garrick was talking about this mission. The Pakistanis have gone into Afghanistan to deliver this ultimatum to hand over bin Laden or else. What's your sense of what we're watching there. Is that the real deal? Is this international street theater? Is this rhetoric? I mean, if it were as simple as all that...

MANSOOR IJAZ, CRESCENT INVESTMENT MANAGEMENT: Well, I think that the United States has taken a different tact this time in dealing with the problem that bin Laden presents to the global community. And that is, that in prior instances where he planned an unplanned attack or unannounced attack we would plan a similar unannounced attack and we thought that we have retributed. And now what we have learned is that these people have no code, essentially. They're prepared to hit us anywhere, anytime, and they can, in fact, do that. So I think...

CAFFERTY: But they had indicated that before with the blowing up of the embassies in Africa and other incidents, had they not? I mean, this...

IJAZ: That's correct. But it's a different thing when you hit it on U.S. soil.

CAFFERTY: Absolutely.

IJAZ: That's something that they...

CAFFERTY: Sure it is.

IJAZ: ... hadn't done -- they hadn't had the guts to do that before.

CAFFERTY: Right, right.

IJAZ: I think essentially what the Pakistan delegation going to Afghanistan today represents is a sort of, look, there's a way to do this the right way and it doesn't require blowing everything to smithereens. And if you don't want to play ball by the rules then we're prepared to blow everything to smithereens. And I think that's essentially what this trip to Afghanistan today is really all about. It's fair play. And that, in fact, is vitally critical for everyone in the world to understand that American is a fair place and will execute its justice and judgment even in these very, very strained circumstances.

CAFFERTY: What about the concessions that reportedly the Pakistani government has agreed to, a list of American requests in terms of setting up several potential conditions for military operations, et cetera. Can you trust the word of the Pakistani government?

IJAZ: Well, the answer is yes. But, again, this comes with -- there is a need to help the American people understand a little bit of history here. And that is that part of the reason that we're in this mess in the first place is because after the Afghan War was over when we defeated the Communists we essentially got up and walked away from both Afghanistan and Pakistan. We left them to deal with the drugs problem, the arms trading, the refugees and so forth. And essentially, we allowed those societies to disintegrate and then we sanctioned them on top of that.

Now, if we do the same thing this time, then I can tell you that we're going to have much bigger problems in the future. So if the United States government is smart and they're going to engage the Pakistani government at this moment, they have to do that in such a way that it's a long-term engagement to help essentially rebuild these societies. That's, I think, really what needs to happen.

CAFFERTY: All right. I want to talk some more about the potential military options, the foreign policy initiatives that might contribute to a solution, the potential use of the greenback dollar bill as a weapon in the military struggle because there are suggestions that economically there may be ways to apply more pressure to some of these societies than the military ever could.

Now let's go back to the markets. We have a caller, Jordonna (ph) from Rome, New York. What kind of week has this been for you?

JORDONNA: It has been a horrible week. It's -- you can't even explain how its been. But I actually have two questions that are connected...

CAFFERTY: Go ahead.

JORDONNA: ... and one quick statement.

We have spent massive amount of money, economic support, military support, all throughout the world. I guess one of my questions is, is how much are we going to get now from other countries? How much are we going to continue...

CAFFERTY: Right.

JORDONNA: ... to spend in these other countries when we need it here?

And the one quick comment I had was just instead of African American and Arab American, how about if we turn it around and we're American Arabs, we're American Africans.

CAFFERTY: There you go.

JORDONNA: We're American first and foremost.

CAFFERTY: Did you have a question?

JORDONNA: Just if they have any idea how we are going to -- are we going to stop the economic spending all over the world? Are we going to get any help back?

CAFFERTY: That's a -- that is a good question. It's a big question and it has a lot to do with where these markets may or may not go. The American economy was weakening before these events. The European economies were weak, the Asian economies are weak. A couple of ways to look at this with the additional spending that may flow from Washington in terms of tapping the Social Security reserves and spending money for military operations, et cetera, I guess economically that would work as a stimulus. But if consumer confidence dries up and people are afraid then we get the reverse effect.

Does the market open lower tomorrow? Does it close higher? What do you think and we'll kind of begin there.

IJAZ: Why don't you start. (UNINTELLIGIBLE) part of the experts.

CAFFERTY: Yeah. And that's a question nobody knows the answer to.

CHADWICK: Well, nobody does know the answer to how the markets will open tomorrow. But I think there is one important thing to the point of the question that was being asked. In fact, the reason the United States has been able to help so many other countries in the world is because we are the most powerful, we have the strongest economy. We've had a budget surplus. Very few other countries have budget surpluses. We have the strongest military.

And, in fact, as the U.S. economy has gone down most recently so hasn't it dragged the rest of the world's economies. And I think it's important -- you mentioned how the European markets, you know, are down, then rallied, and then they're nervous. I think they really are looking to take their cue from the American market. They want to see how our market does...

CAFFERTY: Right.

CHADWICK: ... and that will give them, you know, a follow-on.

We have certainly got support from a lot of our allies. We've heard Tony Blair. We know that we're going to have support from them in trying to deal with this issue of terrorism.

CAFFERTY: Well, it's in everybody's interest to get together on this...

CHADWICK: Absolutely.

CAFFERTY: ... because if they can do it here they can do it anywhere and I think everybody understands that.

CHADWICK: But...

CAFFERTY: What do you think...

IJAZ: Just a sidebar that I'll add to that and that is that we have to remember that in the Gulf War it was primarily Saudi Arabia, Kuwait and the United Arab Emirates that paid the bill...

CAFFERTY: Right.

IJAZ: ... the end.

CAFFERTY: Right.

IJAZ: They essentially paid, in fact, almost the entire bill. That's number one.

Number two is that it is a very different cost that is involved when you go after an unseen, unknown, untested enemy who's financial infrastructure and military infrastructure is nothing close to what the Iraqi government had during the Gulf War.

They're just two sidebars that I would add to Patricia's.

CAFFERTY: All right.

Larry Elder, we have one view of all of this going on because we're all here in New York City where it happened. How is -- how is the population dealing with this in California? What are you hearing from your listeners? What sense of -- just what sense do you get from the people you talk to on your radio program each day of how they're feeling about all of this?

LARRY ELDER, RADIO TALK SHOW HOST: Well, what we're getting is an overwhelming sense of patriotism. If there's a silver lining to this crisis it's that Americans are finally seeing that we have a lot more in common than we have apart.

Two weeks ago some of the squabbles about seem so utterly petty right now. We're seeing people giving blood. The Red Cross saying that more people are giving blood than they even need for the next near term. We're seeing it in a line of people wanting to join the military for the first time -- an increase in that. We are seeing people volunteer their time to the point where Mayor Rudolph Giuliani says more volunteers are signing up than they can even put them to use.

There's a tremendous outpouring here of affection for Americans. And what it really says, Jack, and what it -- and I think it addresses the other caller's concern about the economy. For the last two generations, three generations, we've embarked on a massive welfare state where the federal government has gotten involved in health care, Social Security, paying farmers not to grow crops, middle class entitlements where a lot of billionaire ball owners have somehow duped taxpayers across the country into (UNINTELLIGIBLE) up money for stadiums that they ought to be paying for themselves. Meanwhile, we're shirking national security.

The number one job of government is protect people and property. And hopefully now we'll get our priorities in line and have the government -- the federal government do it's number one job which is to protect us and let people, able-bodied people and able-minded people handle their own personal problems.

CAFFERTY: This could be an expensive, protracted war to prosecute if it comes to that. And I was looking at a couple of polls earlier and I can't -- I apologize, I don't recall which one. There are a lot of these around. But it was asking the question basically, do you support the United States going to war and if necessary would you support it if it takes a period of months. And the number of people in favor was somewhere up able north of 80 percent.

The second question was, will you support military action on the part of this government over a period of years if it's necessary. And the numbers go from north of 80 to just north of 60, still a substantial majority.

My question is do you -- how much sense do you get of the willingness of people to make the tough sacrifices? There's no question of during World War II that the sacrifices that people made at home doing without gasoline and meat and all kinds of things in order to fund and fuel the war effort made a great deal of effort in the economics of how World War II turned out. Do you have a sense that we're ready to go to the mattresses as they talked about in the "Godfather" to get this done?

ELDER: Oh, absolutely. When you look at those images of those planes -- the plane slamming into the World Trade Center, people are angry. We've got an enemy here and there's no question that the American people are prepared to fight that enemy.

But think about where the President was when this happened. He was in Florida reading to elementary school children. Again, a function that the federal government shouldn't have been involved in at all. Our own mayor here in Los Angeles...

CAFFERTY: ... wait a second. I mean, you know, politicians have been kissing babies since George Washington ran for office. It's just, you know, photo ops are what they do.

ELDER: Jack, here's my point.

CAFFERTY: OK.

ELDER: We have spent $135 billion just on Title One alone. That's a federal program that was designed to close the educational gap between inner city school districts and suburban school districts.

CAFFERTY: Right.

ELDER: In fact, in the last 30 years that gap has widened. The current secretary, Ron Paige, has said publicly that we have wasted $135 billion on this program. One more time, if you're going to talk about education that's something that should be done by state governments and local authorities, not by the feds.

The Fed should be talking about protection. We should be talking about infiltration. We should be spending more money for spies and for spooks and for expanding the CIA and for protecting American citizens, not getting us involved in things that American citizens should be doing by themselves.

CAFFERTY: What's the market going to do tomorrow?

ELDER: Oh, I've no idea what the market's going to do tomorrow. This is a case of first impression. But let's just not panic. If you are an investor in the market, you should be in on the long haul anyway. The way to make money in the market is not to panic but to -- but to invest in corporations that have good assets, good earnings over a long period of time, and invest for the long haul. So I would urge investors not to panic and to ride it out. If you've invested your money in good companies, the fundamentals haven't altered just because of Tuesday.

CAFFERTY: All right. Steve in Idaho, what can we help you with and what kind of week have you had?

STEVE: We have -- it's been a dandy. I think we need to focus on the positive things. You know, if every American -- we could tell how the market's going to open tomorrow if every American went out there and bought just a couple of shares of stock of their choice to show their support, it would tell a story because this whole thing was to show that they could bring the economics of the world down. And the United States could show the picture with little cost to anybody of just how we support this country and what we're all about.

CAFFERTY: Did you have a question?

STEVE: I didn't have a question other than...

CAFFERTY: All right.

STEVE: ... I called...

CAFFERTY: Don't have to have one.

STEVE: I called earlier this evening to an investment person that I deal with on how we could get word out to people to go out and just purchase a couple of shares of stock.

CAFFERTY: That's not a bad idea. Actually, on a related subject, the SEC has relaxed the rules for companies to buy their own stock.

CHADWICK: Right.

CAFFERTY: Which would, I guess, serve to kind of put a floor under the market if it starts to go down because as shares of these big companies that have a lot of cash in the bank -- companies I'm thinking Microsoft, General Electric...

CHADWICK: Yeah.

CAFFERTY: If their shares start to go down sharply tomorrow, they can step in and buy their own shares and in effect support their own stock which would have, of course, an effect on the market overall. Yes?

CHADWICK: Right. There are new rules about that and that is true. I think the SEC has tried to make those rules easier for corporations so that they can do it all day rather than during restricted hours. And I think that is important. And I think if corporations feel comfortable about buying their own shares, that sends a message to the investing public that these corporations feel good out their own business long term despite the fact that the economy is not very strong at the moment.

But I think it's very interesting to listen to a lot of this ground swell from individuals, some of whom may not even have invested before or not -- have not been enormously invested, wanting to do this kind of thing. And the market is also a lot about psychology.

CAFFERTY: It -- great deal, sure.

CHADWICK: I think there's a way in which this can almost be a cathartic moment. We've spent a lot of time in the marketplace looking at these tiny, trivial bits of information and trying to extrapolate them long term when we know that even if we are in a recession, it is not going to be for the long term.

And to see now a much more important event be the overriding element that's driving people and people saying, "You know what, we support it," and maybe there is some good that comes out of all this can really change the whole mindset that the market's been in.

CAFFERTY: The kind of thing he's talking about it not dissimilar to buying war bond. I mean, it's a way to put money...

CHADWICK: Exactly.

CAFFERTY: ... to work for the -- for the economy.

CHADWICK: And the government will be...

CAFFERTY: Yes.

CHADWICK: ... issuing war bonds as well.

CAFFERTY: Yeah, that's right. I heard that they're going to do that.

CHADWICK: And so that will be another way that people can be...

IJAZ: I think there's another historical perspective that buttresses this ground swell that we're hearing from our callers and that is if you go back to 1987 when we had the first real crack in the global markets, and then you look at what happened when the Japanese market -- the bubble burst.

CAFFERTY: Right.

IJAZ: And then the...

CAFFERTY: Fell the NIKKEI at 40,000 or close...

IJAZ: Exactly. 37,000.

CHADWICK: 37,000 yeah.

CAFFERTY: ... 37,000 when that happened.

IJAZ: And then you had the incident with the...

CAFFERTY: The Gulf War.

IJAZ: ... Gulf War, and then you had Communism collapse. And all of these things happened in rapid-fire sequence. In each of those cases you had something that went wrong with the economic infrastructure somewhere...

CAFFERTY: Right.

IJAZ: ... oil prices shot up...

CAFFERTY: Right.

IJAZ: ... or there was a spike in interest rates at that point...

CAFFERTY: The senior President Bush during the Gulf War, as you suggested, was dealing with huge deficits. He didn't have a surplus...

CHADWICK: Right.

CAFFERTY: ... that he could reach...

IJAZ: Exactly.

CAFFERTY: ... into to finance a war. He had to raise taxes which politically may have cost him the next election.

IJAZ: And the difference this time is that you don't have any real structural or infrastructure problems in the economy. It may be a little bit weak. It maybe, you know, on the verge of teetering with, you know, a couple quarters of negative growth. But structurally there's nothing wrong with our economy. And that is where the buttress comes with the kinds of comments that we've heard tonight.

If you go out and buy 10 shares of your favorite stock tomorrow, all of a sudden the order imbalances that might be there at the opening disappear. That's what it comes down to.

CAFFERTY: Do you expect that the markets are going to come under pressure? The reason I ask or keep asking that, the one thing the markets hate more than maybe anything else is uncertainty. And there is right now an awful lot of uncertainty...

CHADWICK: Right.

CAFFERTY: ... not just about the economy but about where we're going and what we're doing, and who we're going to fight, and if we declare war...

IJAZ: Yes.

CAFFERTY: ... who exactly are we going to declare war?

IJAZ: Yeah.

CAFFERTY: I mean, the markets don't like that kind of tenuous, uncertain environment.

IJAZ: But there are two things that the market should really be comfortable about. Number one, the ability of the Federal Reserve of the United States and every other central bank in the world and every major economy, to provide enormous liquidity at this moment is very different than we have seen in any other global crisis that we've been through whether it was Saddam Hussein or 1987.

The second thing is that the structure of the markets today in terms of liquidity and safety and so forth, there really aren't very many other places where you can go and put your money to work. So let's say that you sell your stocks...

CAFFERTY: Right.

IJAZ: ... what precisely are you going to buy...

CAFFERTY: That's true.

IJAZ: ... four percent or five percent bonds?

CAFFERTY: Two year Treasury notes are down under three.

Larry Elder, what about that? There's little alternative to the stock market if you're looking for more than a very low, single-digit return. That's one point. The other point is that there are tremendous amounts of foreign money invested in the American economy, particularly in things like Treasury bills because the perception is the U.S. government is the safest financial institution on the face of the earth.

ELDER: Well, I...

CAFFERTY: Is there any risk with the circumstances we're talking about here tonight, that foreign money would begin to be taken out of this country? And what would be the impact if that happened?

ELDER: Well, I doubt that foreign money will be taken out because of the reason foreign money is here is because of our political stability and our economic progress. And you're absolutely right, markets do not like uncertainty and in the short run you're going to have volatility. That's why prudent investment requires you to take the long haul, five-, ten-, 15-, 20-year investment windows ought to be one's horizon. And if that's how you look at it you can ride out these shocks.

In 1987 when the stock market crashed the most prudent thing to do was to go back the next day and get into that market...

CAFFERTY: Right.

ELDER: ... because if you had done that you would have made a substantial amount of return on your equity.

IJAZ: Absolutely right.

CAFFERTY: All right. We have a caller?

We did. Lost him.

ELDER: We scared him away.

CAFFERTY: We scared him away.

CHADWICK: I think also the markets tomorrow are really going to look for liquidity, the ability of communications that nothing's gone wrong. And all of these have been tested over the weekend and they expected to work fine. A number of firms that I have spoken to are going to be in their disaster recovery sites which are, in some places, over the border in New Jersey and places like that.

CAFFERTY: Right.

CHADWICK: So a lot of the companies that have lost their headquarters will be in a position to be able to engage in business. And I think the marketplace will want to see that -- the market will want to see that the marketplace is orderly and that transactions can take place on the floor of the exchange, that there is liquidity, and that there is clearing. And I think that if that takes place that will in itself provide some comment...

CAFFERTY: It's not only important that the markets get open it's important that they operate correctly and efficiently for the trading session right up to the closing bell at 4:00 and everybody can say, "All right, the system's back and it works OK."

Gregory in New Jersey, what kind of week have you had?

GREGORY: Well, first of all my -- I spent a couple days in Kansas City because my flight never made it to Seattle, we got grounded.

However, the reason why I called was that I have -- I live here close to New York and I see that they've got -- Americans have poured out a lot in donations and they've got more than they need in -- a lot of corporations have donated big bucks to...

CAFFERTY: A couple of hundred million dollars I think, last time we looked.

GREGORY: Yeah, well, that's it.

CAFFERTY: Over 200 million.

GREGORY: You remember the Gulf War when Kuwait was being invaded by one of its neighbors, one of its brothers...

CAFFERTY: Right.

GREGORY: ... or cousins you might say. We went over there and we bailed them out. We saved their -- we saved their country, we saved their people. Now the United States needs money. They're one of the richest countries in the world. Have they made any kind of indication that they would be contributing to some of the money? It's like payback time.

CAFFERTY: I don't -- I don't know the answer to the question about money but I do know this, that should the military operations commence over in that part of the world, Kuwait has made available its real estate to American military personnel and equipment. So Kuwait would be used as a -- as a launching pad, I guess, that's maybe not the best way to describe it.

Larry, have you heard anything about any kind of foreign economic money donations coming, particularly from the moderate Middle Eastern countries? I haven't heard anything about it.

ELDER: No, I haven't heard anything. Nor have I heard Colin Powell or anybody else even suggest that they wanted that. But Kuwait did take a full-page ad out in many of the nation's newspapers and expressed their sympathy and offered their support.

CAFFERTY: What about the potential shock to these markets on the price of oil? I'm not talking about tomorrow, oil prices haven't really reacted that much yet. But depending on the kind of military operation we decide to prosecute, the world's oil fields are all around. And I just wonder potentially if the markets -- you know, they tend to be forward-looking mechanisms. Markets try to look out and sense what's coming. Would that be a factor that might weight on the minds of investors tomorrow that if the bullets and missiles start flying oil prices, as they did during the Persian Gulf War, they hit $41 a barrel very quickly. What about that?

ELDER: Oh, absolutely. I think there's a potential for oil prices to go up. Any time, again, you have some kind of uncertainly, particularly if this country's talking about military strikes, it's possible that this could alienate some of the Arab countries -- oil-supplying Arab countries, and they may restrict some supplies in order the placate some of the people in their own country who are going to be upset with our military maneuvers.

So again, anytime there's any kind of uncertainty, you're going to have a spike up in prices.

CAFFERTY: All right. It is 12:30 a.m. Eastern Daylight time on what has now become a Monday morning here on the East Coast. Let's swing over to Garrick Utley and get up-to-the-minute report on the latest new developments. Garrick.

UTLEY: Thank you, Jack.

Well, as we know, we go downtown, we can look at the scene in lower Manhattan. As we can see here the rescue efforts are continuing. There's still some of that smoke rising, little fires breaking out here and there. This is a live shot.

So far the death tolls, unfortunately, remains steady at 190 confirmed dead, another 4,957 are missing under the rubble there.

Earlier today we got a bird's eye look at the ground zero damage in Manhattan. We're seeing that now from the air. This is the site of the World Trade Center towers, 110 stories tall once upon a time until last Tuesday.

And over the weekend the long, painful, and yes, inescapable process of healing continued across the nation. The sound of singing was heard here at this prayer service in Omaha, Nebraska. But then there's also the other business of the nation, business itself. Wall Street will be back at work tomorrow buying and selling shares, buying and selling stakes in the American economy. And looking ahead to the business day, Wall Street says it is ready to go.

(BEGIN VIDEO CLIP)

RICHARD GRASSO, CHAIRMAN, NYSE: We are ready to go 9:30 tomorrow morning. And the best way of communicating to these criminals that they've been unsuccessful is for us to ring that bell and be back in business and we intend to do that.

(END VIDEO CLIP)

UTLEY: And air traffic across the country resumed over the weekend. This is New York's La Guardia Airport. Newark and JFK were also back in business, but Washington's Reagan National remains closed down until further notice.

And across the country, the manhunt continues. The FBI is out there, as you see. Two more arrest warrants were issued for material witnesses. The details of those orders are sealed. In Del Ray Beach, Florida, there FBI investigators searched an apartment building for more clues. At least one terrorist suspect lived inside this complex there in Florida. Those men are believed to be connected with the man President Bush is calling the prime suspect.

But Osama bin Laden issued a statement Sunday denying once again that he had any role in Tuesday's attacks. He says he's been living quietly in Afghanistan and following its leaders rules and laws in that country.

Meanwhile, though -- and this is an important development -- the Pakistani government is sending an official to Afghanistan to Kabul Monday to ask or rather to tell the Taliban to hand over bin Laden within three days or else. What is the "or else?" Well, or else they may face military action from the United States.

And that's a look there along the Afghanistan/Pakistani border, a very important crossing point.

Jack, let me throw it back to you right now. I was down to Wall Street today and doing some research and I came across an interesting fact that maybe you know. I don't want to throw a quiz at you but perhaps the viewers might be interested in this question. What -- where and when and what was the first major terrorist attack in the United States? Any idea?

CAFFERTY: I have no idea at all.

UTLEY: Well, here it is. Listen to this. It was 1920. And where was it? On Wall Street, right across from the New York Stock Exchange, right next to the place where George Washington was sworn in as our first president. Anarchist set off a bomb there next to those financial sites. They were angry at capitalism. Thirty-three people were killed and hundreds were issued. 1920, Wall Street has always been vulnerable.

CAFFERTY: Well, that's something. Some things never change. Thanks, Garrick. Garrick Utley with the latest news.

Mark in Texas, welcome to the program. What can we do for you?

MARK: Yes, hi. How are you this evening?

CAFFERTY: Good.

MARK: Good. My question is -- let me turn down the TV.

CAFFERTY: Yeah, I was going to say I can hear. You have to turn it down.

MARK: OK.

CAFFERTY: There you go.

MARK: My question is, we woke up to a global community this last Tuesday with a resounding blow. And we're going to spend a great deal of money, which we need to, on our safety of our country and human intel and all of that. Could we not do a program for the next 50 years to get Muslim and global dollars into these moderate, impoverished countries to show them some capitalism and democracy? And, you know, we're only 200 years old and we're pretty awesome. I was wondering if we could do some kind of global community thing to get these things built up?

CAFFERTY: We touched on that a bit earlier in the broadcast. Mansoor Ijaz is of Pakistani descent and he's a Muslim. And we were talking about the fact that the hatred, the intense, white-hot hatred of the United States, at least in part, is rooted in the extreme poverty in that part of the world and the tremendous contrasts that exist between the standard of living there and the standard of living here.

The other side of that coin is using the desperate economic conditions as a weapon and clamping down economically on the countries and states that support terrorism and cutting off the inflow of goods, not buying the exports. What about economic warfare as opposed to traditional military warfare?

IJAZ: The problem is that it has been shown over and over again that economic sanctions do nothing more than cause more of these problems to come up. Because whether we like it or not we live in a world of very unscrupulous souls and those people are willing to sell arms to Afghanistan, to Pakistan, to any other country that has a military embargo placed against it.

And the caller raises an interesting point but I think there, again, there needs to be a perspective put on that. And that is one of the reasons that somebody like Osama bin Laden -- and again, this is in no defense of him but I want to -- I want to...

CAFFERTY: No.

IJAZ: ... make sure the people here understand what is his complaint...

CAFFERTY: Sure, oh that...

IJAZ: ... on the other side of the fence.

CAFFERTY: ... well that's -- we need to understand that to...

IJAZ: And I think one of the -- one of the things that he has said very often is that if you go into a structure like the Saudi royal family where they concentrate wealth in one part and they decide who they want to give that wealth to, that causes a disparity within a society which we do not control from the outside.

CAFFERTY: Right.

IJAZ: Yet, we are seen, because we want to deal with a society from an oil-management standpoint, from the standpoint of keeping oil prices low, that has one decision maker. That's why democracy in some of these oil-related countries has never been a great priority of ours. We would love to tell the Sudan that they need to be democratic, but right across the Red Sea we don't tell Saudi Arabia that they need to do it.

CAFFERTY: No, no.

IJAZ: So I think that in that sense for now decades there has been an enormous hypocrisy in American foreign policy that needs to be corrected. But having said that, that doesn't make it right that when people think that the only way they can rectify their wrong is to come and kill innocent people. That's just -- that's not acceptable.

So we are going to root these people to out and we have to do that. But once we do it we then have to be also responsible enough to take some of the money that we have and more equitably distribute in and help these societies build their democratic frameworks up.

CAFFERTY: Fair enough. Brian...

CHADWICK: And their economic...

CAFFERTY: Yeah.

CHADWICK: ... structures as well which is think gets to an issue that has been an important one over the last year or so which is just this whole issue of globalization. And I think -- I've just tried to think about some of these other issues and said why has there been so much turmoil in Genoa and Vancouver and Seattle and all these things...

CAFFERTY: Right. Every time these industrialized nations get together, yeah.

CHADWICK: When, in fact, you know, for the most part the world has been at peace and the world's economies have been pretty good. And it's because in essence there hasn't been something to coalesce people of a bigger and stronger issue.

But, in fact, you know, the globalization ultimately is -- has the opportunities of bringing better economics, capitalism, and ultimately democracy to these poorer nations. And so that is a benefit of globalization. It may benefit also, capitalist companies in the Western world, but, in fact, by putting your plants there and by building facilities there, you're bringing those people jobs that would never have had jobs before.

CAFFERTY: Let me get to a call. Brian in Wisconsin, you're on the air with us. What can we help you with?

BRIAN: Yes, sir. I'm just wondering if your panelists might be able to answer a question on what effect military action might have upon the economy. That is to say, regardless to what type it is, boots, bullets and beans do cost money. And they have to come from somewhere. What effect, as we saw in World War II, with massive spending somewhat bailing out the economy -- what effect might that have right now in the long term on the economy.

CAFFERTY: Larry Elder, let's let you take a shot at that. Are you there?

ELDER: Sure, I'm here. Could I address a little bit though of what we said just a moment ago...

CAFFERTY: Sure.

ELDER: ... about money to some of these countries to bail them out. One of the reasons that America is disliked by so many people in the world, especially in the Arab world, is a feeling that we've interfered in the domestic policies of so many other countries. When you look at the trillions of dollars that we've given to aid around the world, especially to Third World countries, it hasn't done very much good. In fact, we've often propped up regimes that are military juntas or totalitarian dictatorships when, in fact, what people need is free property, capitalism, the rule of law, the kinds of things that have made this country great.

This country is a young country. Persia is substantially older than we are. A lot of Arab countries are older than we are. Why is it we're doing better than they are? The answer is not that we cheated. The answer is not that we're brutal or unfair or amoral. The answer is that people are free. We worship free markets, we worship private property and the rule of law. Those are the kinds of qualities and conditions that create prosperity.

And so if we have an international United Nations commission on racism, let's have one on why countries are wealthy and why countries are poor. And you found out that has nothing to do with religion and everything to do with free market, free enterprise and the rule of law and respect for private property.

CAFFERTY: All right, now. The caller's -- let me get -- let me get you to answer the caller's question which is what kind of economic impact domestically might the buildup and eventual prosecution of a war against terrorism have on our economy at home?

ELDER: Well, I think in the short run it will -- it will help. Any kind of public spending like that in the short run will help. But in the long run any time the public sector spends money, takes money out of the economy, it hurts things. We do need to spend far money -- far more money on our military. But we are over-committed. We are in a hundred countries around the world where we often have no national security interest. We never should have gone, in my opinion, to Bosnia, and Somalia, and Kosovo, and Haiti.

These are not our problems. We ought to be spending money to support America and to defend Americans. And we should spend less money on government programs, on welfare entitlement for the able-bodied. We should marshal our resources for the number one responsibility of the government and that's to protect people and property.

CAFFERTY: CNN correspondent Major Garrett is at the White House in Washington tonight where the difference of opinion on additional defense spending evaporated with the crumbling of the twin towers on Tuesday. The Congress passed a $40 billion resolution either that day or the next and in effect have said we're ready to spend whatever it takes to get this done.

MAJOR GARRETT, CNN WHITE HOUSE CORRESPONDENT: Well, a lot of things, of course, changed, Jack, individually the defense budget, the entire debate around it. You mentioned that $40 billion, 20 billion was set aside for rescue/recovery/cleanup efforts in New York, Virginia and Pennsylvania; another 20 billion for counter-terrorism activities. A lot of things will come in under that umbrella.

And one other thing changed considerably on Tuesday. Before Tuesday there was great debate in Washington about defense restructuring, trying to recreate the Pentagon, recreate all four of the military services to try to make them more mobile, to make them more adaptive to a new environment. Well, that hadn't take place before this first war of the 21st century, as the president has called it, was already waged.

And so, that kind of reassessment is almost happening on the fly right now. And it is quite clear that as this campaign goes forward, in whatever dimension it takes, there will be likely more requests of Congress for aid to the Pentagon. You can be pretty well confident that those requests, by and large, will be approved and be approved rapidly.

So there was thinking before Tuesday about how to readjust and reshape the American military to respond to different non-conventional types of warfare. That reassessment has been accelerated dramatically, dollars will follow.

CAFFERTY: All right, Major, thank you. Major Garrett at the White House.

Chris in Missouri, you're on the air with us. What kind of week have you had?

CHRIS: Well, first of all I just want to say my deepest regrets to the families that lost their lives in New York. But I have a question that since the -- to our president it's kind of weird for me that over here in the United States we have terrorists, you know, like Timothy McVeigh who did that horrible thing in Oklahoma. And I just want to know basically what are we going to do in the United States to help change some of the attitudes and some of the racist things that's going on here in our society before we can go over there?

CAFFERTY: Well, you know, that's obviously a very big piece of all of this. It's not, you know -- it's not Arabs against Caucasians, the Middle East against the United States. We have a whole basket of those kinds of problems here in our own country.

Mansoor Ijaz, have you heard or witnessed any kind of backlash activity? I was telling a story last night -- there's a little doughnut shop in my home town, I live in New Jersey about 15 miles from here. And kids who look like they are of Arab descent work behind the counter in there.

The day this happened the police pulled into the parking lot and shut the place down. The rumor going through town was that these kids were Islamic fundamentalists and that they began celebrating and writing anti-American slogans on the window and the police went in and said you've got to get out of here for your own safety.

Couple of days went by. The store never reopened. The cops were there around the clock. Saturday I went into the parking lot and got out and went over to the cop and I said, "What happened here?" Turns out these kids are not Islamic fundamentalists at all, they are Indian. They did nothing wrong but within an hour of the explosions at the World Trade Center, 150 threats by telephone went into this little doughnut store in a town of 15,000 in New Jersey. So the caller was raising the issue of the racial profiling and the stereotyping and the potential backlash in this country has a valid point.

How do we guard against that? It happened to the Japanese after Pearl Harbor was bombed.

IJAZ: Well, the first thing that we have to realize is that we're all Americans and we're all in this together. I agreed very much with the caller who previously said why don't we call ourselves American Arabs...

CAFFERTY: Right.

IJAZ: ... and American Pakistanis, and so forth. We are Americans first. And one of the reasons that I -- when I have gone out in my citizen diplomacy efforts around the world, I have told Islamic leaders in other countries that, in fact, America is probably the most Islamic country on the face of the planet for one very simple reason. It is to the last hair of evidence that we are prepared to go to hold a man or woman innocent if we can show that they are, in fact, innocent.

CAFFERTY: Right.

IJAZ: And that's something that, in fact, if you practice the Islam and the Koran in its purest sense you would find people that would practice it exactly that way.

The issue about racial profiling -- and, again, this has hit very close to home for me. The day after this happened on that evening's broadcast one of the other anchors -- I want to make it clear it wasn't a CNN anchor...

CAFFERTY: Thank you.

IJAZ: ... from one of the other networks...

CAFFERTY: There is no other network.

IJAZ: ... said while we -- while he was thinking out loud on the air, he said, well, you know, there are bases in Pakistan where these terrorists have trained for years and perhaps there is some culpability of Pakistan involved in all of this. The next morning my daughter goes to school in Toronto and she is essentially shouted down in class as it's one of her type that did it.

Yesterday we had a Sikh gentleman in Phoenix, Arizona, who wears a turban...

CAFFERTY: Right.

IJAZ: ... who looks a little bit like bin Laden wearing a turban with a beard. Now he's a Sikh, an Indian, has nothing to do with Islam whatsoever and he was shot dead right there in his gas station. Today we had an incident of a Pakistan man being shot in Texas.

So I would urge the American people to understand that we are all in this together, in fact, we are trying very hard to help our government -- I'm talking about now people of our ethnic origin, our religious beliefs -- help our government understand what it is that needs to be done, how do you get inside the mind of the people over there that we don't see and don't understand. And if nothing else is learned from this process, we ought to go out there as Americans and say, we need to know more about the world we live in.

CAFFERTY: Yeah. And this rally around the flag is a wonderful thing but if you're turning around and doing the kind of thing that happened to your daughter then that sort of negates the purpose of the whole thing.

Major Garrett, how concerned is the administration in Washington about this kind of activity?

GARRETT: Very concerned, Jack. And I want to point out a couple of things. You know, there have been throughout this last week some comparisons to Pearl Harbor and the attitude of the United States, the rally around the flag, the sense of trauma, very similar. But in one very particular way there is a dissimilarity and it goes to this issue of underlying ethnic hatred and turning against an ethnic minority in this country and doing so rapidly.

You'll recall after Pearl Harbor there was a government-sanctioned effort that was carried out to displace Japanese Americans, put them in what at the time were called concentration camps. We cleaned up the language since then. It was after Hitler's concentration camps were discovered that we stopped calling our camps in America concentration camps. But FDR and every member of Congress called them exactly that at the time.

A member of the Bush cabinet, Norm Mineta, was a child in California. He was sent to a concentration camp -- we call them internment camps now. He tells a very pointed story, told it to me as a matter of fact around the time of the second T-ball game here at the White House. He remembers being hustled on to that train and a security guard taking his baseball, his baseball glove, and his bat away from him because he thought they could all be used as weapons.

Norm Mineta, a member of the Bush cabinet, leading the entire re-examination of airport security and airline security remembers all too well what happened in this country at a time such as that. He sits at the table while the president deals with all of these issues. The president has said there can be no tolerance in this country for any kind of racism or violence against Arab Americans. He has spoken out about it, Mayor Giuliani has, Governor Pataki has, you've heard members of Congress of both parties say it.

I think that -- though there have been very concern -- very -- rather episodes that concern us all in this country, but there is absolutely no official sanction for that behavior as there was after Pearl Harbor. As a matter of fact, a very aggressive effort to tamp that down.

CAFFERTY: All right, thanks Major Garrett.

Gregg in Connecticut's on the line with us. You glad this week is over like the rest of us are, Gregg?

GREGG: Yes. Yes, I am.

CAFFERTY: What can we do for you?

GREGG: In life insurance policies there's a pretty universal exclusion for death incurred in war whether declared or undeclared. And certainly no amount of money, I'm sure, can replace the losses that families of the victims have suffered. However, my question is, would death benefits be payable to victims -- to victims' families and if so, what kind of hassle might they face as insurance companies require some kind of proof of death, and, you know, there might not be any evidence, you know. some people might never be upgraded to anything better than missing?

CAFFERTY: My sense says it probably has to do with the way the policy's written but let me turn to the people on the panel who probably know more about it than I do. And it'll lead us into a discussion of insurance companies as investments, which is a - is a topic maybe we shouldn't talk about. But, what about...

CHADWICK: Well...

CAFFERTY: ... policies and this nebulous act of war kind of provision.

CHADWICK: Right. I mean, there -- I think there is the spirit and there is the letter.

CAFFERTY: Yeah.

CHADWICK: And while the letter might talk about war and the president might say, "We are at war against terrorists." I don't think any insurance company in this country is not going to honor...

IJAZ: Correct.

CHADWICK: ... how the life insurance policy of any individual who has had one. I happen to be on the board of an insurance company.

CAFFERTY: OK.

CHADWICK: And we've already talked about the fact that we know that there will be a meaningful impact on the life insurance side. And there was never any thought or discussion that it wouldn't be paid because some kind of concept of war was involved.

CAFFERTY: OK. That's fair enough. That makes - that makes just good human common sense.

CHADWICK: Yes.

CAFFERTY: What about insurance companies as investments? Potentially, they see tremendous -- or they face, rather, tremendous liability in terms of claims. This, I was reading, could be the most expensive insurance settlement episode in American history. The insurance companies may come under some pressure when the markets open tomorrow.

I'd be interested in both of you's thoughts on whether or not if the insurance companies are coming, like AIG, for example, it's one of the big insurance companies -- if that stock begins to fall tomorrow, do you step in and buy it because it becomes cheap? Or do you stay away from it because we haven't figured out how much this is going to cost them yet?

CHADWICK: Well, obviously - did you want to...

IJAZ: No, please, go ahead.

CHADWICK: Obviously, the impact on the insurance industry will be huge and it will be very negative. But, Andrew -- hurricane Andrew, I think, was the largest...

CAFFERTY: Right.

CHADWICK: ... claim, which was -- what -- about seven or eight, 10 years ago. And insurance companies came through that. There was a huge amount of reinsurance. Remember? A lot of this reinsurance is offshore as well, so this is a global phenomenon.

CAFFERTY: And reinsurance, for those of you watching who don't watch financial news television, is a way that the insurance companies spread the risk. If they are writing a policy that exposes them to tremendous liability, they reinsure with a reinsurance company...

CHADWICK: Right.

CAFFERTY: ... and get them to take part of the risk so that if the event happens all the liability doesn't accrue to one party. Is that sort of...

CHADWICK: That's absolutely...

CAFFERTY: ... the extension...

CHADWICK: Absolutely.

CAFFERTY: ... explanation.

CHADWICK: I heard Warren Buffett yesterday...

IJAZ: Again, I heard this, too.

CHADWICK: ... saying that, in fact, they were going to pay out the most they had ever paid out. But, that they were a strong company and they had a good balance sheet. Many insurance companies have very good balance sheets. There are some insurance companies that don't have good balance sheets. And for some of them, this may be a serious economic problem. I don't think we can expect our government to bail out every industry that will be impacted. Insurance companies write insurance for events that, hopefully, are never this catastrophic, but from time-to-time are. And I think, for the most part, there will not be a problem in the insurance industry.

Very often what happens, interestingly, with insurance stocks is after the first shock, then these companies rally in the marketplace because the realization is there that, my goodness, they're going to have to raise their prices. And the insurance industry has been a hugely competitive one for the last decade-and-a-half.

CAFFERTY: Yes.

CHADWICK: It's been very hard for companies to get any price increases at all. Now we're going to see an environment in which maybe they will be able to get some price increases to rebuild their balance sheets. But, on the other hand, the stock market has been strong. And that has also helped these companies to have pretty good surpluses.

CAFFERTY: Let's talk about the government bailing out industries, what about the airlines, Mansoor? They are going to be in even worse shape. And they were in not very good shape going into this. A lot them were losing money. Continental announcing they're going to lay off 12,000 people. Midway is suspending operations completely -- 1,700 people unemployed. And if the -- if the public, you know, is reluctant to buy a ticket and get on an airplane until something more substantial then curbing -- curb-side check-in is done to beef up security, some of these airlines are going to be in for a real rough time. Those stocks will probably get hammered tomorrow when the market starts.

IJAZ: It's not just those. I mean, the unfortunate part about the airline industry is that it's not just the actual airlines themselves. They're a little bit like the automobile industry. You know, you go all the way down the line. You have tires, you have plastic...

CAFFERTY: Right.

IJAZ: ... you have leather, you have seats, you have food, you have, you know, I mean, you could just add it all up and when you look at the entire picture, if you shut down an industry of that magnitude, it can, in fact, have some significant reverberations throughout other parts of the economy.

The second thing is that we have to remember how big Boeing, as an industry, for example -- I call Boeing an industry by itself, in a sense.

CAFFERTY: Well, it is -- them and the Airbus, right? They build all the planes in the world.

IJAZ: Exactly.

CAFFERTY: ... commercial planes.

IJAZ: I mean, you know, we're all -- we're all the seven -- you know, people were modernizing airlines and they were talking about building 800 passenger airplanes and all of that stuff.

CAFFERTY: Right.

IJAZ: All of that goes out the window at this moment. There is -- all bets are off as far as that part of it is concerned.

CAFFERTY: I heard an early estimate that no more than -- no more than 400 new airplanes may be built in the next 12 months as a result of this.

IJAZ: Exactly. So, I think the answer is that there will be a significant impact. And the analysts are going to be working overtime for the next, you know, month or so trying to figure out precisely what those impacts are. But, that's precisely what the opportunity is in the market, as well.

CAFFERTY: And the government can't sit by and watch all commercial aviation...

IJAZ: No doubt...

CAFFERTY: ... disappear in this country...

IJAZ: Exactly.

CAFFERTY: ... because they're going broke. I mean, they're not going to let it happen.

CHADWICK: In that case, we might see some government...

CAFFERTY: Right.

CHADWICK: ... aid.

IJAZ: Which is why you buy these things when they go down a lot.

CAFFERTY: Sure.

IJAZ: That's the essentially...

CAFFERTY: Gary Tuchman -- Gary Tuchman is a CNN correspondent that is at ground zero downtown. We're talking about insurance claims and this being, perhaps, the most expensive event of its kind in the 200 year history of this country. In fact, I think probably it -- there's nothing even close. The hurricane that Patricia was referring to, I think was six or $7 billion as I recall. And this will go by that by a factor of four or five or maybe more. What's the latest downtown tonight?

GARY TUCHMAN, CNN CORRESPONDENT: Well, Jack, it's been 120 hours since a survivor was found. And that's very bad news because generally speaking, it's considered that after 72 hours survivability drops a great deal. It doesn't mean they're giving up, however. They're still out there. It is still a rescue and recovery mission. They are using heavy machinery to get some of the debris out of there. But, they are still looking for people.

We were just talking to a volunteer who's been in there since Tuesday. And he says in his heart he still feels there is great potential for people to be alive way below. There are seven levels below the World Trade Center complex. Each level is about 20 feet tall. So, you're talking about 140 feet below the rubble. So, he's saying he thinks there's still people alive, but, they can't get there. And that's the whole problem. They can't go from the top, it would crush anyone below. They have to handle this very gingerly.

So, the search continues. But, the fact is there are still 4,957 people missing. And only five survivors have been found the day of and the day after.

CAFFERTY: And even if those people that you talked about, perhaps, being trapped in these compartments way below ground level are alive, time is a big enemy now. I mean, there's no food, presumably, down there. There's no water down there. And who knows how good the air flow is, et cetera. So, the odds get very long very quickly from here on.

TUCHMAN: No question about it, Jack. And we certainly don't want to raise anybody's hopes based on what that gentleman was saying. People are saying...

CAFFERTY: Yeah.

TUCHMAN: ... lots of different things here. But, you're right. So much time has passed. It's very unlikely. But, it's still possible.

One other thing I want to point out to you, this rescue worker we were just talking to a short time ago, he has his search dog with him. And his search dog is physically exhausted right now. And he was laying on the sidewalk next to us. And he told us a short time ago a Coast Guard search dog died from heat exhaustion on the scene behind us.

CAFFERTY: That's amazing. Animals are more interesting in that regard than people. When they're trained to do something, they'll do it until they drop dead unless you tell them to stop. So, tough stuff. Thanks, Gary.

Let me go back to Los Angeles. Larry Elder, you were talking earlier about the government's priorities -- the nation's priorities. If you go back and read the documents of the founding fathers, way high on the list of things that the Federal Government's supposed to do is provide for the common defense.

I had a woman on this program last night who was a former inspector general for the Department of Transportation. She was with the FAA and she said to paraphrase that there is no airport -- slash -- airline security in this country. That it's a joke. And that, you know, until major, major things are done, including, in her opinion, making the cockpits on airplanes impenetrable, putting armed sky marshals on, providing for cockpit video or passenger cabin video that would alert, you know, the people on the ground if there's any kind of a problem that it's unreasonable to expect the public is going to rush back and embrace the airlines and embrace -- nobody's going to fly, unless they have to, under conditions that they perceive as threatening or dangerous.

Is this a place where the Federal Government, in your opinion, has a big job to do? And, if so, who ought to take over the security of the Nation's airlines and airports?

ELDER: Well, there's a role, first off, for the Feds. There's a role for State Government, there's a role for the private sector and the airlines. But, you're absolutely right. El-Al, the official airline of Israel, has double steel doors. Once the airline pilot and the co-pilot get behind there, they do not come out until that plane touches down. They fly with between six and eight plain clothes sky marshals that are trained in order to thwart attacks like this.

And, as a result, you do not hear about skyjackings in Israel. You're right. The American people now have gotten religion. We now realized how porous our security is, how easy it is to get on an airplane with a weapon that can be used to skyjack a plane. And the American people will demand safety measures before they turn out in droves and begin to fly the way we used to before Tuesday.

CAFFERTY: Yeah.

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