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CNN LARRY KING LIVE
Obama's Speech on Race in America: Was it Successful; Maintaining Savings During Economic Turmoil; Fed Slashes Interest Rates Again
Aired March 18, 2008 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, GUEST HOST, CNN ANCHOR: Tonight, race in America -- Barack Obama's sweeping vision. He addresses the controversial remarks made by his former pastor.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Reverend Wright's comments were not only wrong, but divisive -- divisive at a time when we need unity.
(END VIDEO CLIP)
BLITZER: Was this a turning point for him, his candidacy, the country?
Plus, the Fed cuts a key interest rate. The stock market soars. But what about the troubled economy? Will the move come calm worried consumers for more than a day?
It's all next on LARRY KING LIVE.
Welcome to LARRY KING LIVE. I'm Wolf Blitzer sitting in for Larry. Larry has a well deserved day off.
Barack Obama delivered a major speech today on race in America -- a lot to digest, a lot to discuss.
Joining us right now, Carole Simpson, the former ABC News anchor. She's now a leader in residence at Emerson College up in Boston. She's a Hillary Clinton supporter.
Also joining us, Ed Schultz. He's a radio talk show host. He's one of the liberal radio talk show hosts. He hosts "The Ed Schultz Show." He leans toward Barack Obama.
Carole, what did you think? How did Barack Obama do today?
CAROLE SIMPSON, CLINTON SUPPORTER: I thought he did fantastically. It was an amazing speech. And I think it's been getting kudos from almost everyone
BLITZER: What was the best part?
SIMPSON: One of the best parts to me was to hear him talk about he could no more disown Jeremiah Wright than his grandmother, who was afraid of black men walking down the street. That was kind of a moment that really struck me. Whether this is going to be put the issue to rest, I don't think so.
BLITZER: Ed Schultz, what do you think?
ED SCHULTZ, OBAMA SUPPORTER: I thought it was a great moment for the United States, Wolf. I thought that the rest of the world had to be looking at this. We've had a lot of arrogance that's come out of this country.
And for Barack Obama, in a very controversial moment in his political career to -- instead of step to the sideline, he got right back into the ring and he fought for America, saying that we've got some work to do and that there is some humility out there. And I think every American ought to be pounding their chest tonight that he has found, in the middle of a controversy, a way to find a higher ground for the country.
Race is something we have to deal with. Race is going down on -- as far as the voting is concerned. We're seeing that it is an issue. So he had a very unique moment
BLITZER: Did he have any choice but to deliver this speech?
SCHULTZ: Well, I had a long talk with Tom Daschle about that last night.
BLITZER: He supports Barack Obama.
SCHULTZ: He does. And I asked him, you know, why is he doing this. He says it's his instincts, it's his personality. He knows he has a responsibility in this race because of his background and because of who he is and the people who are supporting him. And it was a very unique moment in America politics and it was real leadership.
BLITZER: Carole, he addressed head on the entire controversy involving his long time pastor, the Reverend Jeremiah Wright, and some of the clearly outrageous things that have been caught on those videotapes that we've all been hearing over these past several days.
Here's what Barack Obama said, in part.
(BEGIN VIDEO CLIP)
OBAMA: I have already condemned, in unequivocal terms, the statements of Reverend Wright that have caused such controversy and, in some cases, pain. For some, nagging questions remain.
Did I know him to be an occasionally fierce critic of America domestic and foreign policy? Of course. Did I ever hear him make remarks that could be considered controversial while I sat in the church? Yes.
Did I strongly disagree with many of his political views? Absolutely, just as I'm sure many of you have heard remarks from your pastors, priests or rabbis with which you strongly disagree. But the remarks that have caused this recent firestorm weren't simply controversial, they weren't simply a religious leader's efforts to speak out against perceived injustice. Instead, they expressed a profoundly distorted view of this country, a view that sees white racism as endemic, that elevates what is wrong with America above all that we know is right with America.
(END VIDEO CLIP)
BLITZER: All right, some are suggesting, Carole, he didn't go far enough in disowning the Reverend Jeremiah Wright, even though his words, as we just heard, were very strong.
What do you think?
SIMPSON: How could he disown him? I come from a long line of Baptist preachers, starting with my grandfather and probably six or seven of my relatives that are Baptist preachers in the South right now.
I don't agree with what they have to say on many issues, but I can't disown these people that are my loved ones and relatives. And I think that's what Jeremiah Wright became to Barack Obama.
And I believe what he showed was a sense of loyalty that we also want to see in our presidential leadership that people haven't talked about. He denounce the remarks, but he said that he still would not denounce the man.
BLITZER: Because Ed, as you know, to a lot of people out there, black and white, these remarks were so painful -- remarks really...
SIMPSON: They were awful to me.
BLITZER: Right. That's what I...
SIMPSON: I mean I heard them and I'm like oh my god.
BLITZER: I mean instead of saying God bless America, he would say God damn America and would blame the United States for creating the situation that led to 9/11.
Carole, these remarks weren't simply, you know, outrageous, but very painful to a lot of people out there, black and white.
SIMPSON: Exactly. And I'm afraid those are going to stick. I'm afraid they're not going to go away. People will remember that. They'll forget the chickens coming home to roost and all those other kinds of things. But to say God damn America, I mean that -- that plunges into my heart. I don't want to hear that kind of thing.
SCHULTZ: Full disclosure, though, Wolf.
SCHULTZ: Full disclosure, truthfulness, something that America wants to hear right now. He didn't avoid his friendship. He didn't avoid his association. And he really, I thought, took the high road. This man has an innate ability to find higher ground whenever controversy comes his way.
And I think that's what America wants. I think that he took a political gamble by doing this. He could have just said no, I'm not -- I'm going to let this go and let the media die with it, because they're -- they're not going to be able to cover it everyday.
But in a question to did he go far enough, there are some people in this country, when it comes to race, you're never going to go far enough. And I think Barack Obama knows that. But he mended a lot of fences today. And I think the full disclosure is only going to help him.
SIMPSON: Ed, I don't think so. I beg to disagree with you, Ed. One speech is not enough for the racism that has -- is the nation's unfinished business.
SCHULTZ: Well, this is a good start, Carole.
SIMPSON: Yes, but there's got to be a dialogue.
SCHULTZ: Yes, this is a great start...
SCHULTZ: ...in a controversial moment.
SIMPSON: Well, I hope it continues, but I'm not it will.
BLITZER: And, Carole, he also spoke of a generational gap between his generation and the Reverend Jeremiah Wright's generation.
And I'm going to play another clip for you.
Listen to this.
(BEGIN VIDEO CLIP)
OBAMA: For the men and women of Reverend Wright's generation, the memories of humiliation and doubt and fear have not gone away, nor has the anger and the bitterness of those years. That anger may not get expressed in public in front of white co-workers or white friends, but it does find voice in the barbershop or the beauty shop, around the kitchen table. At times, that anger is exploited by politicians to gin up votes along racial lines or to make up for a politician's own failings. And, occasionally, it finds voice in the church on Sunday morning.
(END VIDEO CLIP)
BLITZER: All right, Carole, you're of that generation...
SIMPSON: That is my generation.
BLITZER: ...of the Reverend Wright's generation...
BLITZER: Can you identify with what the Reverend Jeremiah Wright was saying?
SIMPSON: I denounce his words, the words he used to express the anger. But I feel anger. I covered the civil rights movement. I covered the assassination of Dr. Martin Luther King. I was in Alabama during the Freedom Rides and sit-ins. And so I have seen and experienced racism and discrimination for the last 40 years of my career in media.
So I'm angry about it. I suspect that if I had blue eyes and blond hair that I might have gotten farther in my business than I was able to get. And you just feel that way because there's always some reminder that, hey, you're just a black woman.
So I understand the anger and I understand how hard and how many people lost their lives trying to win the rights for black people. And I can't believe we're still talking about it, that this is still an issue. I thought that if I worked against racism and discrimination in my business, it would be gone in 30 or 40 years. It's not.
SCHULTZ: You know, Wolf, I do agree with Carole on that. You know, I went to a black high school in Norfolk, Virginia -- forced bussing for racial equality. And since 1972 to 2008, it is amazing we're still having this conversation.
And I think Barack Obama today acknowledged the anger. He acknowledged a number of different instances in walks of life that we've got to improve as a country. But I also think that he offered all of us as a country a path to heal. And I think this is a defining moment in this campaign for this country.
Is this election going to be about change or is this election going to be about distractions of what somebody is saying at the pulpit?
BLITZER: All right, Ed Schultz and Carole Simpson, I'm going to have both of you stand by. We're going to continue this conversation.
When we come back, we're going to add to the conversation. Michael Eric Dyson will be joining us. His wife, the Reverend Marcia Dyson.
Much more coming up on this explosive, sensitive subject which Barack Obama addressed head on today.
Stay with us. This is LARRY KING LIVE.
BLITZER: Welcome back to LARRY KING LIVE.
I'm Wolf Blitzer sitting in for Larry tonight. We're continuing our conversation on the Barack Obama speech. He addressed the very sensitive issue of race in America, his relationship with his long-time pastor in Chicago, the Reverend Jeremiah Wright.
Joining us now, two very special guests. Michael Eric Dyson is a professor at Georgetown University here in Washington. He's a best- selling author. He's an ordained Baptist pastor. He supports Barack Obama. He has a brand new book coming out, by the way, in the coming days, "April 4th, 1968: Martin Luther King, Jr.'s Death and How It Changed America." An important book that we'll all be reading and studying.
Also joining us, his wife, the Reverend Marcia Dyson. She's a contributing editor at "Essence" magazine. She's a Hillary Clinton supporter.
Is that a problem, that the two of you love each other, obviously, but you have different candidates in this race?
REV. MARCIA DYSON, CLINTON SUPPORTER: It's not a problem because we're both Democrats and we know that the Democratic Party is, what, Michael? A party with a purpose.
BLITZER: So If the other candidate wins, you would still be satisfied, you would still be happy?
M. DYSON: Sure I would be satisfied. I think a Democratic president is much better than the Republicans would have to offer us.
BLITZER: You agree?
MICHAEL ERIC DYSON, OBAMA SUPPORTER: Absolutely. I think that we both agree that either Hillary Clinton or Barack Obama would be an excellent candidate for the presidency of the United States. And when he succeeds to that office, we'll invite her to the Lincoln Bedroom.
BLITZER: I suspect...
BLITZER: I suspect that both of you would like that so-called dream team ticket. But we don't have to discuss that right now.
M. DYSON: Right.
BLITZER: Let's talk about the speech today, because, arguably, it was the most important speech he's given at a critical moment. He was feeling the heat. He was getting attacked and he had to go out and speak directly.
I'm going to play another clip and then we'll discuss. Listen to this.
(BEGIN VIDEO CLIP) OBAMA: He contains within him the contradictions -- the good and the bad of the community that he has served diligently for so many years. I can no more disown him than I can disown the black community. I can no more disown him than I can disown my white grandmother -- a woman who helped raised me, a woman who sacrificed again and again for me, a woman who loves me as much as she loves anything this world, but a woman once confessed her fear of black men who passed her by on the street and who, on more than one occasion, has uttered racial or ethnic stereotypes that made me cringe.
(END VIDEO CLIP)
BLITZER: All right, what do you think? He was talking about the Jeremiah Wright, Marcia. What do you -- that was obviously a very emotional and personal paragraph in that speech.
M. DYSON: Right. I would just say, as a minister, our scripture says he without -- he who is without sin or she who is without sin cast the first stone. The complexity of race is buried deep in the history of -- deep into our culture, into our mind. To say that race is not an issue and that we get beyond it is really a fallacy and an untruth.
But what was great about it was that he finally did address the issue of race, which is important for today's conversation. It's a conversation that was really here three weeks ago. I thank God that, you know, he did as Reverend Jackson said, took this crisis and turned it into an opportunity.
And I can say the same thing about Hillary Clinton. Me, as an African-American woman, I thank God for Dr. King that I can an American dream and as an African-American woman, born and raised in the racist city of Chicago during the '50s, that I can use that privilege that Dr. King lived and died for to say I could vote for a white woman, as well -- being called many names as an African-American woman in the city of Chicago. So I can understand that complexity.
BLITZER: Michael, what do you think?
M.E. DYSON: Well, look, I think he rose to the occasion. He hit a home run, to use a baseball metaphor. He was walking a tightrope. Barack Obama is walking an extremely perilous tightrope in American society...
BLITZER: Because, on the one hand, he had to disassociate himself from those outrageous comments of the Reverend Wright that we have all been seeing. But, on the other hand, he couldn't completely abandon Reverend Wright.
M.E. DYSON: Well...
BLITZER: Is that what you're saying?
M.E. DYSON: Well, I say it -- no, I say it this way. I see what he did is that he said, first of all, he talked about a tradition from which those comments spring. Let's not pretend that in American society Barack Obama was saying that we don't understand why black people could be angry, especially generationally driven, as to the experiences they had that led to this kind of anger, number one.
Number two, there's a prophetic tradition within African-American culture. Martin Luther King, Jr. , had YouTube been around when he was alive, might have well been accused of the same thing.
And remember what King said, I will not ask young black men to put down their guns when the greatest purveyor of violence in the world today is my government. Was he anti-patriotic? No. He spoke the truth, however, in love.
And I think Barack Obama said even though I disagree with the political tone of the comments that Reverend Jeremiah Wright made -- and he made that explicit -- I agree with the tradition and I won't disown him. And I think, Wolf, that's a very important thing. He said, look, I don't disown my grandmother, I don't disown Reverend Wright, because if we like Barack Obama, how America has responded to him, we owe, partly, that to Reverend Jeremiah Wright, whose faith in Barack Obama stimulated his own faith in Christianity.
Barack Obama says I wouldn't even be a Christian today without the fusion of black theology and the social gospel that Jeremiah Wright produced. So the good things you see in Barack Obama are attributable to his gospel, as well as now these negative things.
M. DYSON: And for Hillary, I think that when she heard the speeches of Dr. King in the late '60s, as she talked about in her books, that she, too, instilled that. Because, you know, you talk about crisis and opportunity, she went down into a great -- in a very heated moment at "The State of the Black Union" that Tavis Smiley held in New Orleans -- a community of people that there are thousands who had not voted for her.
But she came back and held her feet to the fire to discuss some of the racial issues that unfortunately the media didn't want to address. I mean we could talk about Ashley, the woman in Barack's speech today --
BLITZER: At the end of his speech.
M. DYSON: At the end of the speech. But I remember Sheila Olmstead, who Senator Clinton championed for the civil rights issue for the 21st century, which is environmental racism, as well.
BLITZER: Was it appropriate to bring his white grandmother into this speech, do you think?
M.E. DYSON: Oh, absolutely, because here's the point...
BLITZER: Because the angry -- the comparison -- you know, obviously, he cringed, he said, when he heard some of the comments from his loving, wonderful grandmother, who obviously raised him. And he compared that, to a certain degree, with his pastor had said. M.E. DYSON: But Jeremiah Wright is a loving, affirming grandfather. See, the point is that what Barack Obama is trying to remind us is that the statements taken out of context can certainly indict the human being. He said let's look at the broader picture here. He said this is the man who led me to my faith, who baptized my children, who gave me a sense of who I am as a human being.
We can't dismiss that, Wolf, because Thomas Jefferson wrote the Declaration of Independence and he also owned slaves. Benjamin Franklin had affairs, but he also was a great creator and inventor and a founding father. Alexander Hamilton was an extraordinary man, the secretary of the Treasury, died in a duel with Aaron Burr.
These complexities and contradictions live next door to each other in all great Americans. And what Barack Obama was suggesting, even though I distance myself from a notion that America is not a blessed and beautiful place, I also embrace the fact that the righteous anger of African-American people must be heard.
And let me tell you what else he did that was very brave here. Many white brothers and sisters are not used to hearing the anger of black people. Black people turn the TV on every day and hear single parent, black person likely to commit crimes, black pathology. We constantly hear a stream and a barrage of negativity about blackness. Many white Americans don't hear negative things about themselves.
And I think that what he was trying to suggest here is at least be balanced. But what I love about him, he took us to higher ground, as Ed Schultz said.
M. DYSON: Yes.
M.E. DYSON: He took us to a better place to say E Pluribus Unum, out of many one. Let's all come together, white and black, red, brown and yellow together.
M. DYSON: I --
BLITZER: Hold on, guys, because we have to take a quick commercial break.
M. DYSON: OK. All right.
BLITZER: Michael Eric Dyson, stand by. Marcia Dyson, I want you to stand by. We're going to continue this conversation. We're going bring back Carole Simpson, Ed Schultz.
We have a lot more coming up.
A very important day, let's say an historic day here in the United States on this day. We'll continue right after this.
(BEGIN VIDEO CLIP)
OBAMA: I have asserted a firm conviction -- a conviction rooted in my faith in God and my faith in the America people that working together, we can move beyond some of our old racial wounds and that, in fact, we have no choice, we have no choice if we are to continue on the path of a more perfect union.
(END VIDEO CLIP)
BLITZER: Welcome back.
We're talking about Barack Obama's significant speech today on race in America.
We've got an excellent panel joining us now. Bev Smith, she's host of "The Bev Smith Show." It airs on American Urban Radio networks. She's a Barack Obama supporter.
You're smiling. I take it you were pretty happy with his speech.
BEV SMITH, OBAMA SUPPORTER: Can you tell?
BLITZER: I can tell.
SMITH: More than happy, proud. More than proud, patriotic. More than patriotic, enthused. More than enthused, hopeful.
BLITZER: Did you see all those America flags behind him as he was delivering that speech?
SMITH: It couldn't have been better planned. It couldn't have been better planned.
BLITZER: Because the Reverend Wright had made remarks that were considered to be anti-American, do you...
SMITH: See, I'm not sure I agree with you...
BLITZER: ...is that why he needed those flags that he had?
SMITH: ...with anti-American. I think what was he doing was voicing his opinion. And in order for us to really get an opinion of what he said, we have to listen to the whole speech. Anti-American -- he was angry.
BLITZER: Reverend Wright.
SMITH: And I would have liked Reverend Wright not to use some of the terms. But being a Double A, an African in America -- not necessarily my bra size -- I understand thoroughly how the anger can come about, as Carole Simpson pointed out.
But his speech -- his speech was something that made me feel like there was a hope in America that I haven't seen before. And then his courage -- his courage to bring up issues that even the president of the United States refused to talk about and would not send his top African-American, Colin Powell, to talk about.
We have not dealt with delayed salve syndrome for black America or white America. He made me proud.
BLITZER: Carole, they say he wrote this speech himself, that these were his personal words, not some fancy speechwriter who sat down, these were words that came from his heart and his soul.
What do you think?
SIMPSON: Clearly, that's where they came from. You can't have somebody else write a speech like that for you and you could tell. I heard he was up until 2:00 in the morning writing it. And it was important and I know that he felt that he is most effective when, like Bill Clinton, he relates to the people, he's talking to the people. And he was brilliant at that.
But I want bring up my candidate, Hillary Clinton, who was asked what she thought of the speech today and she said that it was important and she described that he had given this speech. But she also said the topics of race and gender are very important topics.
So my concern is there are three women now on the panel -- I think gender is going to also play a huge role. And it -- we might see Hillary Clinton having to give a speech about women and what they've contributed.
BLITZER: Do you think that's a good idea, Marcia?
M. DYSON: I think...
BLITZER: Because you support Hillary Clinton, too.
M. DYSON: ... I think that Carole is right on it, because even if you shake the glass of race and it settles into the class segment, you're going to find a lot of African-American women of color in that class segment. And sexism has been really rampant, as well, in this election.
But what I want to say is that Hillary Clinton, very bravely, too, in the embodiment of a white woman, as an African-American woman, I never would have thought that I would be supporting, really, a white woman for president.
But I remember at the first debate at Howard University when she talked about if AIDS were in disproportion in the bodies of white woman as they are black women, it would be considered an epidemic and it probably would have been cured by now. I thought that she took a very poignant message that I'm concerned about the African-American community without speechwriting.
BLITZER: Where do we go from here? Is this case closed or is there still a debate over this whole issue? What's the next -- what's the next step?
SCHULTZ: You know, Wolf, I think we have to take into consideration the origin of all of this. It's not like he had it on his calendar on this particular day --
BLITZER: He really was reluctant to deliver this kind of speech.
SCHULTZ: Well, he was -- there was a great deal of debate. There were some high profiled people in his campaign that said no, don't do this. And he said no, this is what I am about. This is my responsibility.
But it was the media that went after Reverend Wright that created this response. It's not like Barack Obama said hey, I think I'm going to get up and give a speech on race on this particular day. That adds to the brilliance of all of this. Under pressure, under the eye of controversy, he took a higher ground.
He raised the debate. He raised the conversation. Now it's up to us as Americans, and especially as Democrats, to take that challenge and prove that this is an election about change.
BLITZER: We've got to leave it there, guys. An excellent, excellent discussion.
Let me thank everyone here. Marcia Dyson, thanks to you.
M. DYSON: Thank you.
BLITZER: Ed Schultz, Carole Simpson, Bev Smith.
Earlier we spoke with Michael Eric Dyson, as well.
We're going to continue LARRY KING LIVE in just a moment.
We're going to make a turn to another issue. Let's say it's the number one issue right now out there on the political campaign -- the economy.
It's been a roller coaster ride on Wall Street, but what does it mean for you? Information you need to know, when we come back on LARRY KING LIVE.
BLITZER: Welcome back to LARRY KING LIVE.
I'm Wolf Blitzer, sitting in for Larry tonight.
It's been an amazing day on Wall Street. The U.S. economy going through a roller coaster ride; the markets riveting right now. Let's discuss -- let's see what's going on. We've got some information that you need to know.
Joining us now an excellent panel of experts.
Jean Chatzky's is joining us in New York. She's at large for "Money Magazine." She's a best-selling author. Her most recent book is "Make Money Not Excuses." Also joining us in New York, Gerri Willis, our CNN personal finance editor. She's the host of CNN's "OPEN HOUSE." She's the author of a brand new book entitled "Home Rich, Increasing the Value of the Biggest Investment of Your Life." You need to read this book and read it right away.
Joining us in Phoenix, Arizona, Robert Kiyosaki. He's an investor, a motivational speaker, a self-help author. His latest book's entitled -- that's just out this week as well -- "Increase Your Financial IQ, Get Smarter With Your Money." And Anya Kamenetz is a writer with "Fast Company Magazine." She's the author of her brand- new book called "Generation Debt."
Guys, thanks very much for coming.
Jean, let me start with you. You got some money out there. Our viewers are wondering, what do they do with their money right now. We saw the drop in interest rates, three quarters of a point by the Federal Reserve today. The stock market went up 400-plus points in one day, its biggest increase in some five years. But a lot of investors are worried, you know what, it can go down 400 points tomorrow just as quickly as it went up 400 points.
What's going on and what do we do about it?
JEAN CHATZKY, AUTHOR, "MAKE MONEY NOT EXCUSES": What we need to do about it is not panic. If you try to guess the market, you're going to get out and get in at precisely the wrong time. People who try to do that miss days like today. The key is just to be in there all the time. Be a habitual investor. Dollar Cost Average into the market every single month, into a diversified portfolio.
BLITZER: Because some people, Jean, are moving their money from stocks to cash. They think that's the safest thing to do.
CHATZKY: It's absolutely not. If you're sitting with your money in cash, you're not even keeping pace with taxes and inflation because of the consecutive interest rates reductions.
BLITZER: It's better than losing money, isn't it?
CHATZKY: Not necessarily. If you miss the biggest days in the market -- we have looked at studies like this over time -- you miss the five or ten biggest days in the market over a period of five or ten years, your returns aren't anywhere near where they could have been or should have been. The key is to take a long-term view, a long-term perspective.
You're not investing for tomorrow or the next day. You're investing for ten or 20 years from now. The money that you need for the short term, that never belonged in stocks. It didn't belong there yesterday and it certainly doesn't belong there now. Money that you need tomorrow should be in safer havens. But your long term money is best off in that diversified portfolio.
BLITZER: Gerri, what does it mean when the Fed cuts interest rates by three-quarters of a percent to the viewers who are watching out there? They're saying, what does that mean for me?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, I've got to tell you, at the end of the day, it doesn't mean all of that much right now. Take a look at mortgage rates over the last six months. The Fed started cutting rates six months ago.
Rates were at six and change, 6.25 percent. Now, they're at 6.37 percent. It hasn't had a big effect on mortgage because there's so much worry in the community about mortgage. Are they safe? Can we invest in them, et cetera.
I have to tell you, if you have a home equity line of credit, if you an adjustable rate mortgage that's resetting, you're going to get some benefits here. It's going to help you. Even student loans, you're going to get some help. This isn't a panacea. This isn't magic for individual investors, particularly for those people who are really, really worried about their mortgage.
One note, too, savers out there, if you've got a CD, if you're saving, you know, at a bank somewhere, you're not making a lot of money here. You have to be more active. Jean has it exactly right. It's time to think about investing in the stock market.
BLITZER: But if you have that money, let's say up to 100,000 dollars, Robert, in a bank; it's federally insured. You can sleep at night. You're not getting a lot of interest. You might be getting one percent, two percent, three percent interest, but you know what, that 100,000 dollars is still going to be there.
ROBERT KIYOSAKI, AUTHOR, "INCREASE YOUR FINANCIAL IQ": You're talking about liquidity. I understand why Bernanke did what he had today to save the banks, but I'm afraid he threw the average saver under the tires of the truck.
KIYOSAKI: Because savers are going to be losing. He's flooding the market today with 800 billion dollars worth of dollars and dollars are flooding the market right now. He's trying to save the investment bankers. Aren't these guys supposed to be the smartest guys on Earth?
BLITZER: What would have happened, Robert, if they wouldn't have saved Bear Stearns, that huge investment house, a venerable institution, the fifth largest banking house on Wall Street, if they wouldn't have come in with 30 billion dollars to save that company? What would have happened?
KIYOSAKI: I think that would have been OK today, because JPMorgan made a great deal on that thing. But those 14,000 Chase employees are in big trouble right now. I think he saved the rich. What Bernanke did is called welfare for the super rich. The investment bankers made a huge mistake on betting on those subprime and CDO mortgages, and now we're going to bail them out.
We're going to bail out Lehman next, probably Merryl, probably JPMorgan. This is welfare for the rich. Now I get richer, but I'm concerned about the fixed person or the person saving money right now. What you're going to see is oil prices keep going up and food prices going up. That's a tragedy for the poor and middle class.
BLITZER: We have an inflation issue out there right now. We're going to pick up the conversation with Anya right after this. Much more of our discussion on the economy, what it means for you, information you need to know, when we come back.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: In the long run, Americans ought to have confidence. I understand there's short-term difficulty. But I want people to understand that in the long term, we're going to be just fine.
(END VIDEO CLIP)
BLITZER: Talking about issue number one in the presidential campaign; that would be the state of the U.S. economy. A state that's not very good right now.
Let's continue our conversation. Joining us now is Anya Kamenetz. She's a writer with "Fast Company Magazine," the author of the book "Generation Debt."
Robert just gave us a pretty gloomy assessment of what's going on right now. Are you that gloomy?
ANYA KAMENETZ, AUTHOR, "GENERATION DEBT": I'm young, so I have to be optimistic. I do think there are some silver linings for younger people, and really for everyone, looking at this market in the long term sense. First of all, those of us who have most of our investing ahead of us, the more stocks that we buy now, we're going to be getting a bargain over the next few years, have a chance for that to appreciate.
In a larger sense, Wolf, this is an election year. I'm really glad that we're having this conversation now. We're hoping that the next administration doesn't just bail out Wall Street, but that they're bailing out Main Street as well.
BLITZER: You take a company like Bear Stearns, which was huge a year ago. The stock was 150, 170 dollars a share. Even a week ago, it was, what, $30 a share. Then, all of a sudden, it's two dollars a share when JPMorgan Chase steps in to buy it. If you're share holder of Bear Stearns, you're not very happy right now.
KAMENETZ: It's frightening. It's confusing. It's frightening to hear Alan Greenspan to talk about the Great Depression. This kind of thing hasn't been seen for a long time. The average person doesn't have most of their net worth in the stock market. Most people are concerned about the things we've all been concerned about, keeping their jobs, health care, the cost of education.
The greater danger here is that we're going to put too much of an emphasis on bailing these large banks, and this huge infusion of cash that the Federal Reserve has supplied. It's really a moral hazard. The question is that same largess going to be shown to, for example, home owners that might losing their house. BLITZER: Jean, you're saying to all of our viewers in the United States and around the world, don't panic. You're saying the basic infrastructures, the basics of the U.S. economy are still strong?
CHATZKY: Absolutely. I think that's the message we're getting. Although, in the short term, we really need to watch how much money we've got coming in, watch where it's going, and make sure that we're not accumulating more and more debt, to dig ourselves into a deeper hole for when this situation turns around.
It's a difficult and precarious position. But I think if people start listening to their own counsels -- we know we have these tax rebates coming in within a couple of months. That money should be used to improve your own financial balance sheet, not necessarily to do as the government is encouraging us to do, and go out and spend. We really need to take a good hard look at what we need, what we can do to improve our balance sheets this time around, so that when the situation does start to improve, we'll be in a better position.
BLITZER: I think we're going to get a different view from Robert. We'll hold off for a second. We'll take another break. When we come back, more of this information that you need to know.
Stay with us.
BLITZER: We'll get back to our discussion on the issue number one in this campaign, the state of the U.S. economy, in just a second.
Bet let's check in with Campbell Brown. She's sitting in for Anderson Cooper.
Campbell, what's coming up at the top of the hour?
CAMPBELL BROWN, CNN ANCHOR: Thanks Wolf.
Tonight on the program, the speech he had to make to put out a political fire and the statement that he says he's long wanted to make about the race in America. We'll looking at both aspects of Barack Obama's speech today, addressing critics of what his former pastor said about this country, and trying to launch a national conversation on perhaps the toughest topic in America history.
Then we'll go one step beyond, taking people inside black churches and looking closer at how white voters are seeing Senator Obama's message. We've got that and more coming up at the top of the hour, Wolf.
BLITZER: We'll see in a few moments, Campbell. Thanks very much.
Gerri Willis, you know everything there's know about homes and how to make sure our investments and what for so many of us is going to be the largest investment we make, stays secure. What's the single best tip that you can give home owners right now who want to protect that investment at a time when they see prices of their homes going down?
WILLIS: There are a lot of people out there worried, Wolf. I know people are concerned about losing money. They're concerned about their equity, which is what they really own, losing value in this market. I think you have to think about what kind of mortgage do I have right now. Is it the right kind of mortgage?
Do you have an adjustable rate mortgage that you want to load? Now's the time to think about locking in 30-year fixed rate mortgage, because they're still attractive, even at these levels, 6.37 percent. It's still well below long term averages of eight percent.
Wolf, I know, you remember when mortgage rates were in double digit.
BLITZER: My dad was a home builder. I remember when they were 15 percent or 20 percent mortgage rates. He said to me at the time growing up in Buffalo -- he said, you know what, there will never be able single digit interest rates again. He was wrong on that, fortunately. But there's a lot of people who are worried about those interest rates and the equity they have in their homes.
Robert, tell our viewers why you're so gloomy. As you do, I want to talk about inflation right now. In our new CNN/Opinion Research Corporation poll, if you take a look, that's the highest concern right now that Americans have, that the inflation level is simply going up and up and up.
KIYOSAKI: Well, the reason is because, I'll say it again, the Federal Reserve is now bailing out the super rich for their stupid investment mistakes in buying these mortgages. So what that means is they're flooding the market with cheap money. They're trying to get people to get into greater debt right now.
What that does for the saver or the fixed income person, or what Jean, you've got 20 more years to invest. The guys my age don't have 20 years. They're out of time right now.
Right now, I'm very concerned about the economy. About -- isn't Wall Street -- aren't they supposed to be the smartest guys giving us the financial advice? They can't even save themselves. I'm afraid the Federal Reserve has no business interfering with the free markets. They're probably going to bail out Lehman next and Goldman and all this. When is it going to stop? Who's going to pay for it? The tax payers.
BLITZER: Jean, you're shaking your head there. Go ahead.
CHATZKY: I'm shaking my head because we have had two references to age in this conversation. Robert refers to his very short time horizon left. In terms of the life expectancies of people on this planet these days, Robert, you're a young guy. If people start pulling out of the market in their 50s, in their early 60s, and not having that sort of exposure, we're never going to get to a point where our money lasts as long as we need to it to. We need to be participants in this system into our 70s and into 80s and then we need a plan for withdrawing those assets, just like we needed a plan for putting those assets in.
KIYOSAKI: Yes, and you're putting those assets into those investment bankers that are in financial trouble today. All I'm saying, aren't these guys supposed to be the smartest guys on Earth? Shouldn't we be careful who we take financial advice from, including the four of us on this panel.
CHATZKY: Absolutely. Absolutely.
KIYOSAKI: There's a lot of bad advice out there.
BLITZER: Robert, you're really that worried about Goldman Sachs and Lehman Brothers?
KIYOSAKI: Yes. I'm afraid the Federal Reserve will eventually or come close to bailing them out. That's what I'm concerned about. The young lady who says the tax payer is not in trouble; who is going to pay for that bail out, again, is the tax payer.
BLITZER: We're going to ask Anya about that in a second. We'll take another quick break. We'll continue this conversation right after this.
BLITZER: Anya, what are you telling young people, people in their 20s and 30s, they need to do with their money right now?
KAMENETZ: First of all, we're assuming that they have an investment plan, right? That they paid off their credit cards, they're managing their student loans and they're putting money away for retirement. I think that for younger people, we need to take a look at what diversification of a portfolio really means.
We're talking about inflation in the U.S. economy. The other factors that come into it include the weakening U.S. dollars, the rising price of gas and of food as well. I think we need to look beyond the U.S., beyond U.S. markets. Even right now, you can buy bonds in other currencies, make sure that you're not just exposed to the U.S. markets. It's a large world out there.
BLITZER: The dollar is really at a horrible low compared to the Euro and the Yen.
Gerri Willis, give us some practical advice.
WILLIS: I was just listening to Robert Kiyosaki complain about how the Fed is mostly concerned with institutions. That's their job. They're all about the health and safety of financial institutions. I find it as frustrating as you do, Robert. It's people who have mortgages that really need to be bailed out.
You can't, obviously, rely on the federal government to do that. You have to find your own solutions. The thing to be concerned about right now; we're in a recession. You could lose your job. You need to have some savings to rely on in case the worst happens. Then, as you say, you'll have to prep for inflation.
We're probably going to have a huge bout of inflation after this economy turns around. That means you can't rely on savings institutions, savings accounts for your money. You have to get invested in stocks. You have to have higher returns. You have to make these moves now, instead of waiting feel safe enough
BLITZER: How can people, Robert, protect themselves right now?
KIYOSAKI: I think you be careful who you are taking financial advice from and be careful because it's your most important asset.
BLITZER: Give us some practical advice.
KIYOSAKI: I wouldn't listen to most of the people on this panel, including me. You have to figure out for yourself what your needs are. This idea that stocks are safe -- the reason Bear Stearns is in trouble is the stock investor, the equity investor, is the last guy on the food chain. The creditors get paid first in a bankruptcy and the stock guys are the last.
BLITZER: Who can -- Jean, let me ask you, who can we rely on for information? A lot of us go to financial planners and we think they know what's going on? What advice do you have for people who are worried right now that their life savings could be destroyed as a result of inflation, the weakening dollar and all sorts of other problems that are out there?
If we're not in a recession yet, we seem to be getting closer?
CHATZKY: This is an environment where you control the things that you can control. Look, I can't control the Federal Reserve. I cannot control which direction interest rates go or how the market moves on a daily basis. But I can control how much I save. I can control how much I spend. I can control the effort that I'm putting into my job, so if somebody's going to get laid off, I hope that it won't be me.
We control that the things that we can control in this market. And then we believe that we're optimistic in this country over the long term.
BLITZER: Are you optimistic, Anya?
KAMENETZ: I'm going to optimistic when I vote in November that there's going to be a different set of policies out there that change what happens to the economy for ordinary people.
BLITZER: You think whoever's elected can make a difference?
KAMENETZ: I think we're at the end of market fundamentalism and that we're in the beginning of people who believe in government solutions to some of these problems. BLITZER: You don't trust the private sector, the markets?
KAMENETZ: Did you see the news today?
BLITZER: You obviously don't.
KAMENETZ: I think that there's a much larger role that the federal government can take on behalf of ordinary people's incomes.
BLITZER: An excellent discussion, useful information.
Thanks, guys, very much. Let me thank Jean Chatzky, Gerri Willis, Robert Kiyosaki and Anya Kamenetz for some good practical advice.
This is issue number one out there on the campaign trail right now. It's an issue that is by no means going away. These presidential candidates are going to be talking a lot about it. We're going to be demanding answers from all of them.
Thanks very much for joining us. I'm Wolf Blitzer, sitting in for Larry King.
Coming up next, "ANDERSON COOPER 360," Campbell Brown sitting in for Anderson -- Campbell?
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