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American Morning
McCain Takes Health Care Message to Pennsylvania; Obama Trying to Shake Off Political Damage; Explosion Rattles Italian Embassy in Yemen
Aired April 30, 2008 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN HOFMEISTER, PRESIDENT, SHEET, OIL COMPANY: So, to me, that is not an excessive number when banks and pharmaceuticals and IT companies make a whole lot more.
JOHN ROBERTS, CNN ANCHOR: Let me ask you, would it hurt you if she were to put in place this tax on the windfall profits?
HOFMEISTER: Well, sure, it would. It would slow down investment. I think taxing the oil companies in an idea that was tried in the '80s. It drove us to do imports, which is the exact problem we have today. Too much imports not enough domestic production.
ROBERTS: Let me just ask you quickly because we're running out of time here. Where is the top of all of this? That's what people want to know. How high can the price of a barrel of oil go? How high will the cost of a gallon of gasoline go?
HOFMEISTER: I saw somebody the other day say it's as long as a piece of string. So we don't know. We just don't know. The top could be very high.
ROBERTS: The president of OPEC said $200 a barrel.
HOFMEISTER: Yes. Well, there are some countries out there that are subsidizing the cost of energy to their consumers and to their industries to compete with America because -- or against America, because they think America won't solve the problem.
ROBERTS: So you're saying you have no idea where the top is.
HOFMEISTER: No. We don't know where the top is. But we should produce more oil in this country.
ROBERTS: John Hofmeister, president of Shell Oil U.S. Thanks for being with us this morning. Good to see you.
KYRA PHILLIPS, CNN ANCHOR: Breaking news this morning. Florida College is on lockdown now after shots were fired at a dorm. This is happening right now at the Florida Atlantic University in Boca Raton.
Police say that this happened around 11:15 this morning. They put out an emergency alert and closed the gates but they still don't have the gunman. One witness says he heard the shots.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I was at the other building when I heard it, so at that point in time, I tried to keep my calm, like I said before. They told me to keep all the students indoors, so I didn't really have a chance to really go crazy.
(END VIDEO CLIP)
PHILLIPS: Police say this was an isolated incident and there were no serious injuries.
The "Most Politics in the Morning" now. Six days and counting until the pivotal North Carolina and Indiana primaries. Both Hillary Clinton and Barack Obama campaigning in Indiana today. Republican John McCain takes his health care message to Pennsylvania.
Meanwhile, Barack Obama is trying to shake off the political damage caused by the Reverend Jeremiah Wright. Obama held a news conference in North Carolina yesterday to denounce remarks by his former pastor.
John Dickerson, political analyst with CNN and chief political correspondent for slate.com joining us once again from Washington.
John, good to see you again.
JOHN DICKERSON, CNN POLITICAL ANALYST: Thank you. Thank you for having me back I should say.
PHILLIPS: As always. I know it's early. Let's get straight to Obama now. I want to follow-up after we hear these comments.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: If what somebody says contradicts what you believe so fundamentally, and then he questions whether or not you believe him in front of the National Press Club, then that's enough. That's a show of disrespect to me.
(END VIDEO CLIP)
PHILLIPS: Interesting word, "Disrespect," because you've got Wright that said well, Obama disrespected me. Then Obama says no, you disrespected me. It's this back and forth about disrespect. Sort of like a street fight versus a spiritual, loving pastoral-type of relationship. The question is, will it not stop until someone feels like they got the win in the ring?
DICKERSON: It's a really good point you make. The disrespect thing is really interesting because it's deeply personal here. And it was interesting, Jeremiah Wright in some of his remarks said, well, you know, Barack Obama said I wasn't offering hope in one of those sermons that has now become famous.
And Jeremiah Wright said well, how can he possibly know. He didn't watch the sermon. He didn't see the whole sermon. So there's questions here now about motives and about what's driving -- they're each questioning each other's motives and that what's driving them, and that means it's very personal which means it's hard to end those kind of spats. You know, they're like family spats that sort of linger for years.
PHILLIPS: Yes. Which makes a lot of people, I think, uncomfortable. So, do we as voters need to get that personal? Do we need to know what those motives are or do we just need to move forward?
DICKERSON: Well, I think that certainly Senator Obama would say we need to move forward. And I think there are probably a good number of voters who think, you know, this really has nothing to do with my daily life or the life I live and the problems I have.
And so, the question now is, does this remain as a question in voters' minds that is unaddressed, or has Obama addressed it, and then I guess the third question would be does Hillary Clinton do anything either in front of the cameras or behind the scenes to keep this alive and keep the doubts that have been stirred to the extent they have by this whole Wright business alive in voters' minds.
PHILLIPS: All right. Everyone's got an opinion. Everyone has advice for everyone involved in this personal fight. Karl Rove coming forward writing a letter in "Newsweek," Dear Senator Obama. Now this is obviously Bush's former senior adviser giving his advice. Why do you think he's coming forward with this letter and laying out six tips for Barack Obama?
DICKERSON: Well, you know, Karl Rove is a mischief maker so he's enjoying getting in the mix here. He has a column, so, you know, he's like all of us, he has to write something. And Obama here has a challenge.
You know, he's run a very good campaign. He's won lots of states, but he is losing to Senator Clinton among key voting blocs. He's lost the last three races in the popular vote. And so, you know, there are challenges that are coming forward to his campaign and Senator Clinton has said, and as others have said, he doesn't seem like he can close the deal. So, he is getting lots and lots of advice.
PHILLIPS: And just to bring in the note about -- what you said about should we get involved in this personal fight, there is one tip that he writes to senator Obama. It says, "To answer growing questions about your inexperience, people need to know in concrete and credible ways what they can expect from you as president."
That's interesting because there are people sitting back thinking do I want to know about these personal issues that he's having with his pastor? No. I think voters want to get into much deeper issues and know him on a much different level, but it sort of hard to get past this.
DICKERSON: One of the problems the Obama campaign has had almost from the beginning is that Senator Obama had talks often in abstractions or about the political system. And that is, in some cases, not what people are dealing with in their daily lives.
And so for months, he's been trying to link his larger message of reform, which has been quite popular with a lot of people to issues that affect people in their daily lives. So that was the problem even before Jeremiah Wright.
Now Jeremiah Wright creates a distraction. It takes time away from Senator Obama being able to say, hey, your gas prices are high. Here's why the political system keeps your gas prices high. Here's how my message connects with what affects you in your daily life.
So he's being distracted from that by this current controversy and so I think he would probably agree with Karl Rove on that narrow point and would love to stop talking about Jeremiah Wright and get back to talking about health care and Iraq and people's gas prices.
PHILLIPS: John Dickerson, thanks.
DICKERSON: Thank you.
PHILLIPS: Well, Republican John McCain is making his health care pitch in Pennsylvania today. He's proposing a tax credit that people can use to buy health insurance.
Families get $5,000, individuals get $2,500. His campaign estimates the cost of the plan at $3.6 trillion over ten years to be paid by eliminating tax breaks for employer-based health plans. McCain thinks the government-mandated health insurance plans offered by Barack Obama and Hillary Clinton just won't work.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We will replace the inefficiency, irrationality and uncontrolled costs of the current system with the inefficiency, irrationality and uncontrolled cost of a government monopoly. Watch your diet. Watch your diet. Walk 30 or so minutes every day. Take a few other simple precautions and you won't have to worry about these afflictions.
(END VIDEO CLIP)
PHILLIPS: Critics say that McCain's plan won't help senior citizens and people in poor health who have trouble getting insurance right now.
ROBERTS: A late-breaking news this morning. An explosion rattling the Italian Embassy in Yemen. Officials say a hand grenade or a bomb may have gone off near the compound in Yemen's capital. No injuries or damage have been reported.
In just hours, the Fed is expected to cut key interest rates yet again. Why it might be the last cut for a while. That's ahead.
(COMMERCIAL BREAK)
ROBERTS: The Fed's decision comes out today. Another interest rate cut expected, but will it happen? Ali Velshi joins us now with that.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: That's a good question. Most of the betting is on the fact that the Fed will cut interest rates by a quarter of a percentage point when it announces its decision at 2:15 today.
They've been in a meeting since yesterday. They meet today. And in about 20 minutes, we're going to get the GDP number, the growth number for the beginning of this year and that might have some influence on them.
VELSHI: And in about 20 minutes, we're going to get the GDP number -- the growth number for the beginning of this year and that might have some influence on them. In fact, there are some economists who are saying, maybe the Fed won't even cut rates today.
Let me tell you what happens if the Fed cuts rates. First of all, the prime rate drops. So right now the Fed rate is at two-and-a- quarter percent, prime rate's at five-and-a-quarter. Prime rate is always three percent higher -- three percentage points higher than the Fed rates.
So, if you have a loan that's tied to the prime rate, it will drop as soon as the Fed cuts it rates. Adjustable loans will cost less and the U.S. dollar is likely to weaken. That's what likely happens. That could be different. The Fed rate, as I was telling you right now, is 2.25 percent, which makes the prime rate 5.25 percent.
So, if you've got a loan that's tied to prime, watch that number by the end of the day, all the major banks will have announced a cut if the Fed cuts rates.
ROBERTS: Now, I know you don't have the fancy-schmancy graphic for it, but what happens if the Fed does not cut rates?
VELSHI: Well, if the Fed cuts rates, what it does is it creates demand, right? And their concern is demand creates inflation. So, the Fed is looking at the same things we're all looking at -- high gas prices, high corn prices, high wheat prices, high cheese, eggs, all that and they're saying maybe we don't create more inflation, so we don't cut rates.
But the market would probably be disappointed by that. But the dollar might strengthen, actually. And you know that as the dollar strengthens, oil goes down, or as the dollar weakens -- we've showed you that chart. I'll bring it back for you tomorrow. But they go in opposite directions.
So, there's good and bad out of each of these situations. Bottom line, if you have a loan, it will go down if Fed cuts rates. But really I think inflation has become more of a concern to most Americans at this point.
ROBERTS: Interesting.
Ali, thanks. VELSHI: We'll keep an eye on it. I'll be back in about 20 minutes with GDP numbers.
ROBERTS: All right. Look forward to that. Thanks.
PHILLIPS: Rob Marciano in the CNN weather center tracking all the extreme weather.
Hey, Rob.
ROB MARCIANO, AMS METEOROLOGIST: Hey, guys.
We got some fires out west. We have a record-breaking cold out east. And we've got some trains that are going green. All the details coming up when AMERICAN MORNING comes right back. Stay there.
(COMMERCIAL BREAK)
(WEATHER REPORT)
MARCIANO: Well, you know that going green is all the rage and certainly hybrid cars are becoming very popular. But have you heard of hybrid trains? Check it out.
(BEGIN VIDEOTAPE)
MARCIANO (voice-over): Train engines are shrinking, at least on some locomotives, and so are their carbon footprints. The engines used to move cars around in rail yards don't need the power of long- haul locomotives. So Michael Iden, a Union Pacific mechanical engineer, had an idea.
MICHAEL IDEN, UNION PACIFIC RAILROAD: What if we were to take small truck-type diesel engines and used multiples of them instead of one large diesel engine?
MARCIANO: And from that idea came the Genset Locomotive. Small diesel engines are connected to electrical generators to form a generator set or Genset. Union Pacific recently showed off its latest model in Chicago.
IDEN: Each of the three diesel engines operates only on demand. If the power required is minimal, only one engine runs. If the power requirement is maximum, all three engines will be available.
MARCIANO: Iden says reduced engine power would mean a roughly 25 percent reduction in greenhouse gas emissions. And --
IDEN: It produces 80 to 90 percent lower levels of the oxides of nitrogen, which are a precursor to smog, and a particular matter, which is visible and invisible smoke.
MARCIANO: Union Pacific now uses 160 Genset Locomotives in its rail yards and the idea has spread to other railroads as well. Rob Marciano, CNN.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
PHILLIPS: All right. We've been talking about it all morning. The Fed is expected to cut interest rates once again today. What will it mean to consumers? CNN's personal finance editor, Gerri Willism joins us now.
So, we've had this discussion a number of times within the past year.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's exactly right. As a matter of fact, this would be rate cut number seven today if it were to happen. I know there are some conversation today about whether we will get 25 basis point cut, a quarter point cut or not. Maybe the Fed will stop. Maybe they think inflation is too big of a problem.
But look, if you're a homeowner out there and you're looking to get a new home or maybe you're looking to buy a house for the first time, you're not going to see a lot of relief from this rate cut. Rates probably are not going to move down. That's not what the experts think.
As a matter of fact, let's see, rates right now at 6.01 percent. That is a really great rate, Kyra, I have to tell you. That's really at the low of the long term over the last maybe 10 to 12 years. Pretty good rate. But I don't think people can expect a lot of help here. So, if you're in the market, you should know that the experts are expecting the rates go up over time, not down.
PHILLIPS: All right. You're going to teach me something this morning. LIBOR 101.
WILLIS: All right. We know there are a lot of interest rates out there. There's not just one interest rate. The Federal Reserve, they track the Fed funds rate, they move the fed funds rate, there's that rate, there's prime, which Ali Velshi was discussing just a little bit before.
And then there's an interest rate that American consumers have to deal with. That's not even set in this country. It's set in London. It's the London Interbank offered rate. And this is simply the bank rate at which banks borrow or lend to each other in the London money market.
Now here's why it's important to you. Look at that little Big Ben picture. That's so cute. Nice place to visit, by the way. All right.
Well, they're not doing much for your wallet right now if you have an adjustable rate mortgage. LIBOR is actually the peg for many adjustable-rate mortgages and it's been going up faster than rates here in the U.S. because of the credit crunch, because of what's going on in markets over there. This is bad news for you if you have an adjustable rate mortgage that you're having a hard time paying for. You need to go find your adjustable rate writer and your mortgage documents and see exactly what your rate is pegged to.
But I have to tell you, Kyra, these rates reset every six months, every year and if your peg to LIBOR right now, you are in trouble, because those rates are going higher faster. There's about a full percentage point's difference right now for people between LIBOR and one-year treasury rates, which is another typical peg out there.
So, you want to know what's going on with your loans. You should definitely look at that adjustable rate rider and see if it says LIBOR.
PHILLIPS: Got it. All right, meanwhile -- just one more thing to worry about, but we're following the fed. We'll see what happens to that interest rate.
WILLIS: Absolutely. All eyes will be on Washington.
PHILLIPS: All right. And all eyes, of course, will be on Gerri's show. Keep it right here to learn more about issue no.1. What it means to the voters, the economy. Gerri, Ali Velshi, and the CNN money team for "ISSUE #1," noon Eastern, right here on CNN and online at cnnmoney.com.
John?
ROBERTS: You are watching The Most News in the Morning. An absolute frenzy over Grand Theft Auto IV. One fan ended up in the back of a real police car without a game. Take a look at this.
(BEGIN VIDEO CLIP)
(EXPLETIVE DELETED)
UNIDENTIFIED MALE: Hey, knock it off! Stop.
UNIDENTIFIED MALE: Guys, guys, I'm sorry.
UNIDENTIFIED MALE: Knock it off!
UNIDENTIFIED MALE: Tell him to stop.
UNIDENTIFIED MALE: Do you want to get tazed?
(END VIDEO CLIP)
ROBERTS: Yes. That's a word you don't want to hear. Do you want to get tazed? By now, millions of people got their fix of the virtual violence. We'll take a look at what the fuss is all about, coming up.
And pointing fingers over issue no.1. The president says Congress is not doing enough. What has he done? We'll ask one of the most powerful congressmen in the country when it comes to your money. Ahead on AMERICAN MORNING.
(COMMERCIAL BREAK)
ROBERTS: Another day, another record for gas prices. It will now cost you an average of $3.62 a gallon. But the big oil companies say their hands are tied. Earlier, I spoke with John Hofmeister. He is the president of Shell Oil in the United States, which just reported more than $7 billion in first-quarter profits. I asked what could be done to help American drivers.
(BEGIN VIDEO CLIP)
HOFMEISTER: The presidential candidates should be out there on the postings saying let's increase domestic production by 2 million to 3 million barrels a day. That would be something that would put money back into this country, jobs back into this country and it would bring more supply toward the American who need it.
(END VIDEO CLIP)
ROBERTS: Hofmeister says in order to see lower price, the U.S. would need to produce two million to three million barrels of oil more each and every day.
Plans for a so-called gas tax holiday are fueling debate on the campaign trail. Hillary Clinton and John McCain favor suspending the Federal Gas Tax for the summer but Barack Obama calls it a political gimmick. Clinton says millions of Americans need the break.
(BEGIN VIDEO CLIP)
SEN. HILLARY CLINTON (D-NY), PRESIDENTIAL CANDIDATE: I would immediately lower gas prices by temporarily suspending the gas tax for consumers and businesses. And we will -- we will pay for it by imposing a windfall profits tax on the big oil companies. They sure can afford it.
OBAMA: Well, let me tell you something. This isn't an idea designed to get you through the summer. It's an idea designed to get them through an election.
(END VIDEO CLIP)
ROBERTS: Both Democrats, in fact, want to impose a tax on windfall profits for the oil companies, although that cost could ultimately be passed on to consumers.
Well, President Bush admits that the economy is struggling, but he's putting some blame on the Democratic-controlled Congress for not doing enough about it.
Democratic Congressman Charles Rangel of New York is chairman of the House Ways and Means Committee, he joins us this morning.
Congressman Rangel, good to see you. We want to start off by asking, how are you? You were hospitalized back in Vermont for a few days with a very bad virus. You doing all right?
REP. CHARLES RANGEL, CHAIRMAN, HOUSE WAYS AND MEANS COMMITTEE: Yes. Thank you for asking. I'm back.
ROBERTS: Oh, terrific. Let's play a little bit of what President Bush said yesterday when he pointed the finger at you and your colleagues for some of the economic woes in this country.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: Across our country, many Americans are understandably anxious about issues affecting their pocketbook. Gas and food prices to mortgage and tuition bills. They're looking to their elected leaders of Congress for action. Unfortunately, on many of these issues all they're getting is delay.
(END VIDEO CLIP)
ROBERTS: Congressman Rangel, what do you say in response to that?
RANGEL: Well, I think this is a terrible period in our nation's history. No president has left a nation so shattered and loss of hope. The mere fact that we have a stimulus package that targets the middle class is the category that needs to purchase and can't save, they can't put clothes on their kids' back, food on their table.
We're not talking about the rich that gets more than their share of tax relief. We're not even talking about the homeless and the poor that's given up hope. And so, a nation needs leadership. And I think the country knows that.
To be spending hundreds of billions of dollars on an unwarranted war, to be talking about building, rebuilding Iraq at American tax dollars expenses, and then to find America so insecure with their jobs, their inability to dream and hope as the middle class has driven this country to be the ideal country in the whole world.
ROBERTS: But Congressman, the president is saying he's looking for solutions. He's been asking you for bills on expanding oil exploration, overhauling the federal housing authority, Fannie Mae, Freddie Mac, other issues like that, and he's getting nothing in return.
Could it be said that this nation at the moment, at least legislatively is experiencing election year paralysis and that Americans are caught in the middle of all this?
RANGEL: It's not election year. The president said that he was supposed to bring us together. That he was a uniter. I've been in the Congress for 37 years, and I've never seen the polarization that exists.
You know, we're not a Congress that works together with the House and Senate. We've been so progressive in passing legislation in the House. But with a 1.1 member margin of a Democratic control over the Senate and with the Republicans locked into this concept of needing 60 votes by threatening to filibuster, the most immaterial type of constitutional questions, it means that the president has separated us.
Even in the agricultural bill he refused to allow Republicans to cooperate with the Democrats, and they had to come together to do it. No one can challenge the lack of leadership that we've had coming from the White House from the war, for people who don't have jobs, on education, in directing that these oil companies that's making these obscene-type of profits start dealing and research and development for alternatives. Not what's good for the shareholders but what's good for the country.
And you never heard the president made an appeal for people to volunteer to fight this immoral war for political purposes. They never asked us to be patriotic enough to volunteer for this war that we shouldn't be in.
ROBERTS: Congressman, I want to switch gears a little bit, ask you a little bit about the campaign here. You probably heard what Barack Obama said yesterday in response to Reverend Jeremiah Wright's comments at the National Press Club on Monday. Do you think this issue -- and we should point out that you're a Hillary Clinton supporter. Do you think that this issue will hurt Barack Obama in his quest for the nomination?
RANGEL: I'm a very strong supporter of Senator Clinton. I've worked with her for decades. She's been a very strong senator. But it's a dangerous thing when the press starts invading any candidate's relationship with their religious leaders, whether you're protestant or Catholic or Jew or Gentile, this is a sacred relationship.
And to intrude in the relationship that Barack has, put us all in jeopardy. Catholics, Protestants, should not be judged on the spiritual relationship they have or don't have with their spiritual advisers of their church or their religion.
ROBERTS: So are you saying that this is a nonissue or are you saying it shouldn't be an issue, that people shouldn't have gone there? And I'm wondering, what do you think the effect will be on voters, black and white, for Senator Obama?
RANGEL: Well, I hope they look at their own personal relationships and wonder whether their rabbi, their priest, their minister should be the one that judges their qualifications for president. I don't think these ministers should be on the air at all. There are enough things going on in this country that we want to make certain that the candidates address. One of them is the economy.
Another is the war, education, health care. And who really cares what a minister or rabbi cares about our candidate that has to lead this nation through this terrible experience that we're going through? I wish the press would give the American people a break. And I'm so glad that Senator Clinton has not joined into this because we all are venerable. ROBERTS: Congressman Rangel, thanks for being with us this morning. Glad you're feeling better as well.
RANGEL: Thank you so much.
ROBERTS: All right. Good to see you.
We want to know what you think, by the way. Has the Reverend Wright controversy hurt Barack Obama's chance at the nomination? Right now 44 percent of you say yes, 56 percent of you say no. The nos are increasing all morning. Cast your vote at CNN.com/am. We'll have the final tally of your votes coming up at the end of the hour.
Also, please send us an e-mail, www.CNN.com/am. Follow the link that says contact us. We'll read some of them coming up.
PHILLIPS: We'll take you live now to Philadelphia. We're tracking a fire in the city's Strawberry Mansion section. Thanks to our affiliate WPVI there bringing us these live pictures. You know the area. We're talking 32nd and Burke Street.
Right now no injuries reported but we'll keep track in this church fire. Pretty massive right now. Firefighters have been on the scene for a couple hours. We'll let you know as it develops.
Also GDP numbers out for first quarter. It's the biggest snapshot of our nation's economy. Ali Velshi joins us with that.
Ali, you called it. You hit the time right, 8:32.
VELSHI: Well, yes, that part I can usually get right. But we've got the GDP numbers for the beginning of 2008. A bit of a surprise. Higher than expected. Economic growth came in at an annual rate of 0.6 percent. That is by no means strong, but it is stronger than what was expected and it is exactly the same number that we had at the end of 2007 for the last three months of 2007.
So the upshot of this is, that according to this first estimate, and it is a first estimate -- we get several more of these over the next few months -- but according to this first estimate of growth, at the beginning of 2008, economic growth in the United States did not slow down.
Now we have other measures that suggest it did, but this is the one that we use, generally speaking, to determine whether we've gone into a recession or not. For those people who have said that we have not gone into a recession, this works into their corner. Economic growth at 0.6 percent for the first three months of 2008 is not slower than it was at the end of 2007.
Dow Futures have turned up on the news. The Federal Reserve is meeting today. This will definitely play into their decision and favors a smaller, rather than a larger rate cut. It also favors the idea that the Fed may not go on and cut rates in the future. And there are some economists already speculating the Fed may not cut rates at all if the economy has not slowed down. Again, Kyra, I reiterate, 0.6 percent is paltry. It's very, very small. But it is not slower. We were expecting the growth of the economy to slow down. It has not done so. That is a big surprise -- Kyra.
PHILLIPS: All right. And as soon as we hear about the interest rates, we'll get right back to you.
VELSHI: Absolutely.
PHILLIPS: Ali Velshi, thanks.
ROBERTS: Some big-stick diplomacy in the Middle East this morning. The United States now has two aircraft carriers patrolling in the Persian Gulf. On Tuesday, the U.S.'s Abraham Lincoln arrived in the region to replace the Harry S. Truman. Defense Secretary Robert Gates said the U.S. wants to send a strong message to Tehran, but adds that the move is not an escalation. Barbara Starr joins me now from the Pentagon.
And, Barbara, we've seen this in the past, things seem to get better. Where does it all stand right now in terms of the United States and accusations about what Tehran is up to?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, you know, John, Defense Secretary Gates probably hit it on this the head -- not an escalation but certainly a bit of a sending of a message. We will see how long these two carriers remain in the Persian Gulf region. They are both conducting exercises right now. They are scheduled to go down to one carrier in the next few days, but we will see what happens.
What the U.S. is looking at is sending a message to Iran about all of its activities right now. In fact, it was just a couple of days ago that the chairman of the Joint Chiefs of Staff, Admiral Mike Mullen said, there were military options to use against Iran, but the U.S. military, he says, is not really looking for another war in the Middle East, especially. Defense Secretary Gates, several days ago saying, Iran was, in his words, hell bent to get a nuclear weapon. Something the U.S. wouldn't tolerate.
So what we are seeing is this back and forth. We are seeing rhetoric. We are seeing sending of messages. And the question perhaps is, what is Iran seeing, what is Iran hearing, and will any of this work to change Iran's behavior in that region -- John.
ROBERTS: Barbara, there are some people who believe that this administration is determined to launch some sort of an attack against Iran before January 20 of next year. With the military so stretched in both Iraq and Afghanistan, is there any appetite at the Pentagon for military engagement with Iran?
STARR: Well, I think the answer is, absolutely not. You know, the military certainly does what they are ordered to do. So the question is, if they were ordered to attack Iran, how would it happen, how would it be accomplished? There is no question, John, there's a target list. Of course there's a target list. There is for any perceived enemy of the United States. They're always updating that target list.
But what I think it would be looking at, if it came to that, most people here in the Pentagon agree would be some sort of mission against Iran's nuclear weapons if they move ahead on that program and it most likely would be missile or air strikes. No one is considering ground troops -- John.
ROBERTS: Barbara Starr at the Pentagon for me this morning.
Barbara, thanks very much.
PHILLIPS: Chasing a dream. How the fear of losing your job in a down economy might help push you to your real destiny. That's next on AMERICAN MORNING.
(COMMERCIAL BREAK)
PHILLIPS: We're talking about the number one issue for Americans, your money, and why down times in the economy can be the perfect time for you to turn your passion into a profession. AMERICAN MORNING contributor Polly Labarre joins us now.
Not a bad idea considering the times that we're in.
POLLY LABARRE, CNN CORRESPONDENT: Lots of doom and gloom.
PHILLIPS: You know, to be able to work in -- kind of do your thing on the side and see if you can get anywhere with it.
LABARRE: Sure. Well, we -- there's lots of doom and gloom in the marketplace, throughout the job market, and yet there's so many people who have talents and gifts and skills they can't exercise at work. And there are all these great new marketplaces that provide a platform for them to actually turn their dream job into a day job.
PHILLIPS: All right. So tell me about Threadless.
LABARRE: So Threadless has become the it company of the Internet. It's a very old-fashioned business. It sells t-shirts online, but it does it in a new fangled way. So they have a huge online catalog of t-shirts. We're looking at some of them here. All submitted by amateurs or customers. They have 725,000 registered users.
Those customers vote on some 800 submissions every single week. The ones who win get printed. And the designers get $2,500 for them and then $500 every time they're reprinted.
The thing that's really neat is it's a level playing field where any talent can rise to the top. So the t-shirts we have here are from a guy named Glenn Jones, who's a graphic designer from Auckland, New Zealand, who quit his day job because he was the all-time champion of Threadless to start his own t-shirt company because he happened to be very good at this one thing.
PHILLIPS: Is he doing well? Is he making money? (INAUDIBLE) launch his career?
LABARRE: He's just started it but he's a mini celebrity on Threadless and there are many people like that on Threadless.
PHILLIPS: OK. What about if you like to do arts and crafts? I'm noticing some of the things here from paintings, to drawings, to . . .
LABARRE: Sure. Well, Etsy is an online marketplace for the buying and selling of hand made goods. And it was created as sort of an alternative platform to the mass-produced world that we live in and could they create a platform for artists of all stripes to sell things that they make by hand?
So it can be prints. It can be clothing. It can be jewelry. It can be baked goods. And this is a market (ph) in two years has registered 900,000 users. They have 170,000 individual artist stores who are making a living selling things online.
And we have today Emily Martin is the top seller. We have her painting on set. There's a biologist who quit her day job to do felt animals. She calls it feltadermi. You can make a living doing this stuff.
PHILLIPS: But who judges this stuff? Who decides what's good, what's not? Is it just people that log on and how much it sells determines how popular you become?
LABARRE: The buyers. It's a pure marketplace. So they sell . . .
PHILLIPS: Forget agents, forget lawyers, forget . . .
LABARRE: Exactly. Well, this is the point. They sell 15,000 items a day. Etsy takes a 3.5 percent commission on every sale and everybody is doing quite well. This woman quit her job in Athens at a video store to sell her paintings. She's become a minor celeb, too. She's been on Martha Stewart demonstrating her craft.
And the point is, you can get paid for these skills and talents you never thought you could exercise. And, plus, you join a community that provides all kinds of support to you beyond just making a little money.
PHILLIPS: Pretty cool stuff.
All right. Polly Labarre, thanks so much.
John, we have options now.
ROBERTS: I always like options. All right. Thanks.
Forty-two minutes after the hour. Take you back, show you some more pictures of that church fire going on in Philadelphia right now. And the signal's just kind of breaking up a little bit there, but quite involved. This is video from just a few minutes ago here.
This is at the Prince of Peace Baptist Church. It's in the northern part of Philadelphia. Not far from Interstate 76. And, you know, the flames and the smoke obscuring the scene there and causing some traffic problems as well as people slow down to either take a look at it or because the visibility might be reduced a little bit because of the smoke.
We'll stay on this, this morning throughout AMERICAN MORNING and "Newsroom" as well and bring you the very latest on it. Don't know if anybody was inside at the time that the fire erupted. But certainly a lot of firefighters from city of Philadelphia out there trying to put some water down on this fire. Another fire last week not too far away from this at an abandoned warehouse as well. So we'll keep you updated on that.
Well, maybe this fella here should try Wii yoga instead. Take a look at this.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Hey, knock it off!
UNIDENTIFIED MALE: Tell him to stop.
UNIDENTIFIED MALE: Knock it off.
UNIDENTIFIED MALE: Tell him to stop.
UNIDENTIFIED MALE: You want to get tazed?
(END VIDEO CLIP)
ROBERTS: Yes, you want to get tazed? A fan in a frenzy after he allegedly tried to steal "Grand Theft Auto IV." Why that video game that breaks all the rules could revolutionize entertainment, ahead on AMERICAN MORNING.
(COMMERCIAL BREAK)
ROBERTS: Well, he just couldn't wait for the virtual violence. Police in San Diego arrested a man for allegedly attacking two employees at a video game shop with mace and stealing two copies of the new blockbuster release "Grand Theft Auto IV." And in the game's lingo, he decided to add a few more stars.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Hey, knock it off!
UNIDENTIFIED MALE: Tell him to stop.
UNIDENTIFIED MALE: Knock it off.
UNIDENTIFIED MALE: Tell him to stop.
UNIDENTIFIED MALE: You want to get tazed?
(END VIDEO CLIP)
ROBERTS: Well, the man has decided the game has taken gaming to a new level and could become the best-selling item in entertainment history. Our Veronica de la Cruz is at the CNN Center with more.
Who needs virtual violence, Veronica, when you've got the real thing?
VERONICA DE LA CRUZ, CNN CORRESPONDENT: There you go, John. You are right. This is really revolutionizing the gaming industry. Most video game publishers are happy selling 100,000 copies. And this game is expected to sell 6 million to 12 million copies.
I mean, let's put this into even more perspective. Let's take a look at the top three grossing films of all time, John. "Titanic" has brought in $600 million worldwide since it came out 11 years ago. That's followed by "Star Wars," "Shrek 2." "Grand Theft Auto IV," which is a video game, predicted to bring in $400 million in the first week alone.
Now there is a lot of violence. Even a fair deal of sexual content in the game. But unlike the release of "Grand Theft Auto III: San Andreas," back in 2004, we are seeing some but a lot less controversy this time around. And it's probably because people are realizing that this game really is not just for kids.
(BEGIN VIDEO CLIP)
SCOTT STEINBERG, PUBLISHER, DIGITALTRENDS.COM: "Grand Theft Auto IV" isn't necessarily any more violent or spectacular or sensational than what we've seen to date. It's got incredible storytelling, incredible depth, incredible characterization, but just like "Scarface" or "Carlito's Way," it should not be consumed by children.
(END VIDEO CLIP)
DE LA CRUZ: So what's going on here is the market has expanded to attract this broader audience, which is probably why it's able to put up these huge numbers -- John.
ROBERTS: What is it, Veronica, about this virtual violence that is so attractive to these gamers?
DE LA CRUZ: You know, I'm not going to go there. Let's not talk about the virtual violence. People are really into the graphics. They're talking about the graphics being the best of all four "Grand Theft Autos."
The game is highly interactive. You're thrown into this virtual world. If you can deal with all of that virtual violence, John, you are interacting with these different characters. They're taking you to this whole other world. Think about "Sopranos." I mean, you pick a car, you choose a girlfriend, you hang out with these monsters in the seedy underworld. You have to remember, this really is a game. This is not reality. It's a game.
You're also playing against all these gamers from around the world. So, yes, the virtual violence is one thing. The game is highly interactive. We're watching some of it here. And the graphics are really astounding.
So, I mean, you saw that guy earlier on. I mean, he really, really wanted to get his hands on this game. This game is definitely -- I mean, think about back to the days of Pong. We really, really have graduated when it comes to games these days.
ROBERTS: Hey, Pong is still my favorite. The first. The original. I've still got one of those old units.
DE LA CRUZ: I know you do.
ROBERTS: Veronica de la Cruz for us this morning.
Veronica, thanks.
PHILLIPS: "CNN NEWSROOM" just minutes away. Tony Harris at the CNN Center. I bet he was a Pong player back in his day.
TONY HARRIS, CNN ANCHOR: You know, there was that -- what was the thing that used to eat up the little . . .
PHILLIPS: Centipede.
ROBERTS: Pac-man.
PHILLIPS: Centipede or Pac-man.
HARRIS: Pac-man, yes, yes, yes. Yes, that was my game. That was really my game.
Good to see you, Miss Kyra. Good to talk to you, John.
Issue number one front and center in the "Newsroom." The Fed looks ready to cut a key interest rate today and fresh stats on the economy. Do they point to recession?
Barack Obama trying to refocus on the Democratic battle today. He's putting more daylight between himself and an outspoken preacher.
And you'll be yakking about this one all day. A yak at the office. Whack the yak, gets an Internet start-up a lot of publicity.
We're in the "Newsroom." That means you are too. We get started at the top of the hour right here on CNN.
John, Kyra, back to you.
PHILLIPS: Whack of the yak. That's good stress relief.
ROBERTS: Just yakking it up this morning. It's all he's doing.
Thanks, Tony.
PHILLIPS: Oh, Tony.
Well, hospitals forced to take desperate measures to save themselves as well as the lives of patients.
ROBERTS: Dr. Gupta rode along with the EMTs in New Orleans and he joins us now.
Hey, Sanjay.
DR. SANJAY GUPTA, CNN SENIOR MEDICAL CORRESPONDENT: Hey, it's almost like having to rebuilding a hospital system for an entire city from scratch when one of the biggest trauma centers, Charity Hospital, is now gone. How do you do it? Where do you start? We took a look. It's pretty remarkable stuff. It's never been done before. We'll show you what we're talking about. Stay with us on AMERICAN MORNING.
(COMMERCIAL BREAK)
GUPTA: We're back with AMERICAN MORNING.
It is no secret that New Orleans' health care system was ailing even before Katrina. But that hurricane ripped apart what little order they had. I reported in the immediate aftermath of Katrina about what the hospitals were enduring. I went back now to see how they're coping now.
(BEGIN VIDEOTAPE)
GUPTA, (voice over): Packed waiting rooms. Patients with fewer options. Nearly three years after Katrina, the city's hospitals are in critical condition.
So we're here in an ambulance, obviously. This particular call is about a woman whose face is numb, she's vomiting, she complains of headache. Rob (ph) is going to go check it out and see what happens.
These particular paramedics get about 15 calls a day, which is a lot. Each call comes with a challenge -- find a hospital with available space.
Tell me what a typical day is like in this particular hospital over here.
DR. JAMES MOISES, TULANE MEDICAL CENTER ER: When I walk into the emergency department at any time, there's probably at least 10 to 15 patients waiting to be seen. The emergency department's full because the hospital remains full.
GUPTA: More patients and fewer hospitals. A survey last year found nine out of 10 New Orleans residents feel that there are not enough hospitals to take care of them.
About half the hospitals have opened up here in New Orleans since Katrina. Think about it -- labor costs are up, utility costs are up, insurance costs are up with not enough help. But as we investigated, we found that something's happening here that's never happened before.
Five hospitals that together treat 90 percent of the patients here are joining forces to stay afloat.
DR. MARK PETERS, CEO, EAST JEFFERSON GENERAL HOSPITAL: We're all in this together. You know, in the old pre-Katrina days, maybe it was a good thing when your competitor wasn't doing very well. But if somebody has to cut services now, it negatively impacts the rest of us.
GUPTA: Even with the support, all five of the hospitals are on the brink of cutting mental health and pediatric programs. Before the storm, together the hospitals made a $12 million profit. Last year, they suffered a combined lost of $135 million.
PETERS: That loss is not sustainable.
GUPTA: It's an effect that trickles from the bottom line to the front line. I asked paramecia Davis Renois how bad things are.
DAVIS RENOIS, NEW ORLEANS PARAMEDIC: The worst thing that ever happened was I waited five hours on the bed with a stroke once.
GUPTA: With a stroke?
RENOIS: With a stroke, yes.
GUPTA: And that's something you should get into the hospital within 90 minutes they say, right?
RENOIS: Yes, sir.
GUPTA: Now, back to our emergency call. Remember the woman whose face was numb? She's heading to a hospital now.
As things stand today, it will be at least a two-hour wait before she is seen by doctors, even though she's been taken in by an ambulance.
Just one more patient living in a city that's in critical condition.
(END VIDEOTAPE)
GUPTA: Now think about that for a second. An entire city that doesn't provide mental health services or pediatric services. They're not there yet. The hospital officials say they're going to go back to Congress for a fourth time since the storm to ask for more money before those services get cut. But that's where they might be headed -- John.
ROBERTS: All right, Sanjay Gupta for us this morning. Dr. Sanjay Gupta, thanks very much.
And don't forget, Sanjay's mail bag coming up tomorrow about this time as well.
PHILLIPS: All right. We're going to switch gears now. We've heard a lot about getting younger Americans out to vote, right?
ROBERTS: Yes. But the presidential campaign is also getting grannies out of rocking chairs and onto the Internet and into campaign events. It's the Moos news in the morning and here's Jeanne.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN CORRESPONDENT, (voice over): It's the babies who get the oos and aahs, but it's the grannies who can actually vote.
UNIDENTIFIED FEMALE: We want Hillary.
UNIDENTIFIED FEMALE: Obama, Obama, you wonderful one, wonderful man.
UNIDENTIFIED FEMALE: We want Hillary.
UNIDENTIFIED FEMALE: Yes! Yes!
MOOS: Whether singing for Obama in a rocker or dancing for Hillary at a rally, the battle of the grannies is on.
UNIDENTIFIED FEMALE: Hillary all the way.
UNIDENTIFIED FEMALE: White-haired women can speak for themselves for Obama.
CROWD: Yes, we can.
MOOS: White hair doesn't disqualify you from YouTube. Check out Grandmas for Obama' 08.
UNIDENTIFIED FEMALE: This is a feeling like a mother feels for her son.
MOOS: There are groovy grandmas for Clinton.
UNIDENTIFIED FEMALE: I'm Groovin Grannie.
MOOS: Grooving to see a woman president.
UNIDENTIFIED FEMALE: I have for 80 years, waited for this to happen.
MOOS: Eighty-two-year-old Jean Weiss (ph) didn't just wait. She addressed Barack Obama in person.
JEAN WEISS, OBAMA SUPPORTER: I thank you, sir, but you better be president. You've got to be president.
OBAMA: I tell you what, thank you.
MOOS: And it was a woman of a certain age who gave Obama one of his best-known chants, a local councilwoman from South Carolina.
UNIDENTIFIED FEMALE: Fired up!
OBAMA: Fired up!
UNIDENTIFIED FEMALE: Ready to go!
OBAMA: Ready to go!
MOOS: You know, we have all these great video moments of Obama with oldsters, but it's actually Hillary who tends to win the older, female vote.
Ninety-one-year-old Jule Hodges (ph) ended up in a Hillary ad with her heartfelt endorsement.
JULE HODGES, CLINTON SUPPORTER: And is ready, willing, and able to bring America back up to be polished like gold.
MOOS: When it comes to white-haired supporters . . .
CROWD: Barack Obama for president!
MOOS: One white head deserves another. That's John McCain, kissing his 96-year-old mother. And how about this 104-year-old Hillary supporter? It's enough to inflate even your alter ego.
CLINTON: I think this is quite an amazing accomplishment.
MOOS: Older supporters offer wisdom.
WEISS: Don't hit on Hillary. Bring this all down. Let her do that stuff. Leave her alone. You don't need to do that. You're higher than that.
OBAMA: I just want to know, will you be my running mate?
MOOS: And with that offer, she ran down for a kiss.
OBAMA: Give me a kiss.
MOOS: But who cares about being a running mate? At this age, it's great to still be able to run. Or dance.
Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
ROBERTS: They are just so terrific, aren't they?
PHILLIPS: I'd like to see what those grannies would say to Reverend Jeremiah Wright. That would be interesting.
ROBERTS: I'd like to see what they have to say in general. We should look them up.
PHILLIPS: There we go. We'll have the granny segment. We will work that. They always tell it how it is. That is for sure.
ROBERTS: Yes, they don't sugar coat anything.
PHILLIPS: No, they don't.
ROBERTS: Not much filter between here and here, which is great.
PHILLIPS: Well, a final check of our Quick Vote question -- has the Reverend Wright controversy hurt Barack Obama's chance for the nomination. Hey, we could ask the grannies. Forty-three percent said, yes, 57 percent said no.
And we've been asking for your e-mails as well. Ken from New Castle, New Hampshire, says this. "I find it difficult to understand how Senator Obama's response to his pastor could be characterized as being less than significant to his aspiration to be president. If he requires 20 plus years to size up his own pastor, how can he be expected to size up Kim Jong Il, Hugo Chavez and other bad actors he'll have to deal with on the world stage?"
ROBERTS: In the meantime, BB from New Orleans writes, "Barack Obama's response to Reverend Wright reveals to us more than ever his inherent inner strength, his calmness, his ability to deal with any calamity in an intelligent, thoughtful manner."
So both sides of the fence represented there.
I'll see you again tomorrow. And we'll see you again tomorrow. Thanks so much for joining us on this AMERICAN MORNING.
PHILLIPS: "CNN NEWSROOM" with Tony Harris and Fredricka Whitfield begins right now.
