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ISSUE NUMBER ONE
Precious Metals; Sky-High Ticket Prices; Record Gas Prices Sting Across Country; Price of Homes Plummets
Aired May 27, 2008 - 12:01 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CO-HOST: Record gas prices sting across the country as the price of homes plummet.
We'll check out the hottest new trend in crime and why you should be paying attention to it.
And we'll show you how some Americans are saving big money on food.
ISSUE #1 is your economy. ISSUE #1 starts right now.
Welcome to ISSUE #1. I'm Ali Velshi. Gerri Willis will be along in just a moment.
But we begin today with record high gas prices. The national average for a gallon of self-serve unleaded now $3.94. That is the 20th straight increase. But many of you already know that.
Come with me and I'll show you what you are probably paying across the United States.
Eleven states and the District of Columbia, as you can see here, the ones in red, have an average gas price of more than $4 a gallon -- New York, West Virginia, Michigan, Indiana, Illinois, Wisconsin, Washington, California and Hawaii. The drivers in Alaska pay the highest price, a whopping $4.20 on average. In the lower 48, Connecticut is the highest at $4.19 a gallon.
But take a look now at the states in orange. They are just a nickel shot away from $4 a gallon.
And look at where the price of diesel is going. In California and New York, diesel now costs more than $5 a gallon.
Why is that important? Because farmers depend on diesel to harvest our food. Trucks depend on diesel to transport our goods to the stores. So high diesel prices at the pump have a very direct effect on what we pay at the store. And right now those prices only show signs of climbing -- Gerri.
GERRI WILLIS, CO-HOST: Yes, I just paid $4.19 myself.
WILLIS: It's tough. Now, some folks in the state of Florida say they have it even worse than other people in other parts of the country. They claim because of the hot, steamy climate of Florida, they get less gas for their money.
CNN's Susan Candiotti explains.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT (voice-over): As if pain at the pump wasn't bad enough...
UNIDENTIFIED MALE: Gas prices just going through the roof right now.
CANDIOTTI: ... now add summer heat to the equation. When gasoline gets hot, its molecules expand. So there's less energy per gallon.
JOAN CLAYBROOK, PRESIDENT, PUBLIC CITIZEN: So, if you think you're buying ten gallons of gas, you may not be buying ten gallons of fuel. The consumer is overpaying for that gasoline.
CANDIOTTI: Consumer Group Public Citizen estimates Americans are forking over an extra $3 billion a year in hidden charges because of hot fuel. For years, the oil industry has used 60 degree gas as its price-setting standard. Using that figure, a car getting 25 miles per gallon would go 500 miles. But that same car using 90 degree gas would go only 490 miles.
JOHN MASON, INDEPENDENT TRUCKER: 78.9 degrees. This is right from the tank.
CANDIOTTI: Florida trucker John Mason drives his rig 25,000 miles a year.
MASON: Just being 70 degrees I'm paying $1,200 more a year at today's prices.
CANDIOTTI: 84.6 degrees -- that's a high temperature. Miami fuel distributor Max Alvarez just got a hot fuel delivery, but he says the oil supplier shaved 75 gallons off to compensate him for the heat.
MAX ALVAREZ, SUNSHINE GASOLINE DISTRIBUTOR: If that was not adjusted to me, I would probably have to charge more. So the consumer is getting exactly what they're paying for.
CANDIOTTI: Consumer groups don't buy it and are urging Congress to mandate retro fitting gas pumps to adjust for temperature. Canada has done it for years to compensate for cool weather.
MASON: Everybody wants to do something. Well, here is something. It's right there. The door is open. Get it done.
(END VIDEOTAPE) CANDIOTTI: So is it worth it to retrofit gas pumps? Well, people in the oil industry estimate it would cost around $2,000 or so per pump, and they say in the end it just wouldn't be worth it. Maybe save pennies. But consumer groups disagree and say, listen, especially given how gas prices are going these days, every penny counts.
Gerri, back to you.
WILLIS: Well, Susan, every penny counts. But, you know, we just had a guest on last week that told us that this idea that there is a big difference in gas in the morning and the evening really isn't true for most parts of the country.
Do you think this is really just simply something that really affects people in really hot climates?
CANDIOTTI: Most people agree that that is totally a myth, that if you fill up early in the morning you're going to get more bang for your buck. Absolutely not.
They say maybe if you had a small gasoline container in a farmer's barn somewhere, that might be true. But not when you consider these huge underground tanks.
And they also say, look, when that gasoline is delivered, and mostly in the summertime and in these year-round warm weather states, it comes in at about 70 degrees, 80 degrees. And they don't keep it in those underground tanks very long. It doesn't cool off, experts say. So therefore, again, totally a myth, according to the experts.
WILLIS: Well, Susan, I know one good thing about filling up in the morning. The gas stations usually change their prices between 10:00 a.m. and noon. So maybe you can beat the price increase if you fill up early.
Thank you for that story.
VELSHI: Well, at $4 a gallon, almost even the myths sound attractive.
Remember Y2K, the millennium bug that was supposed to cripple computers once the clocks rolled over into the year 2000? Well, you could call this next story the Y2K of the gas pump world. Some older style pumps can't seem to handle these record prices that we've got.
Jim Acosta explains.
JIM ACOSTA, CNN CORRESPONDENT (voice over): On car-crazy Long Island, where living near the water means paying through the hood for fuel, a gas price oasis lies is on the horizon, which is why they are lining to fill her up at this mom-and-pop gas station in the town of Northport.
VIC BEEMAN, STATION OWNER: They're not making as much as they used to.
ACOSTA: Owner Vic Beeman showed us the secret is under the hood. The gears that manually adjust the price inside these old pumps can't be set to higher than $4 a gallon.
BEEMAN: They were designed to go about 25 cents, 35 cents. Now when it got to $3.99, the machines just don't know what to do anymore.
ACOSTA: So the price is locked in at 24 cents lower than the competitor a half block away. This owner topped off the tank in one vehicle, then went home and brought back the other car.
MARK KLOHMANN, LONG ISLAND RESIDENT: I probably saved about $5, $6 today at least.
ACOSTA (on camera): Filling up both cars?
KLOHMANN: Filling up both cars today.
ACOSTA (voice over): And the bigger the vehicle, the bigger the savings.
LISA BANGER, LONG ISLAND RESIDENT: It's going to be the last time we'll ever pay this.
ACOSTA (on camera): Do you think so? Do you think it's going to go back down?
BANGER: Oh sure. No, no, no, it's only going to go up.
ACOSTA (voice over): Even with the discount, some drivers still feel taken for a ride. The Altano family says the savings here are just going elsewhere.
JOANNE ALTANO, LONG ISLAND RESIDENT: It goes for food, because food has gotten out of control.
BEEMAN: This is old school technology.
ACOSTA: Even though the station plans to install those newfangled computerized pumps, some quaint traditions will endure.
(on camera): What's with the nine-tenths of the price here? When are we going to get rid of that?
BEEMAN: You know what? It means absolutely nothing.
ACOSTA: It means nothing.
BEEMAN: It means nothing. It just looks pretty.
ACOSTA: And don't worry about the gas station owner. They are still making their commission off every gallon of gas they sell. And the suppliers, there just aren't many pumps like these to affect the bottom line. So enjoy this antique road show while it lasts.
Jim Acosta CNN, Northport, New York.
WILLIS: Well, they get you coming and going.
We know you have things to say when it comes to record gas prices. And that brings us to today's "Quick Vote."
Poppy Harlow from cnnmoney.com is here with today's question.
POPPY HARLOW, CNNMONEY.COM: Hi. Well, after that long holiday weekend, another record high for gas, $3.94 a gallon, AAA says. We want to know when you think it's going to come down. Is there any relief in sight?
Here's our question today. Weigh in on cnnmoney.com. "I expect gas prices to come down this summer by the end of 2008, in 2009, or not in the next decade?"
Weigh in on cnnmoney.com. We'll bring you the results later in the show.
Not in the next decade, that is scary.
WILLIS: That is scary stuff. Great question, Poppy. Thank you for that.
VELSHI: All right, Gerri. And we are waiting to hear from John McCain, who is giving what his people are billing as a major foreign policy speech at the University of Denver's table setter (ph) in Denver.
That's him on the stage there. We'll bring you that speech as soon as we get it up.
Up next, we're going to be giving you a new report out that's on the value of homes in this country. The report is not very good. We'll lay it all out there for you.
That's coming up next on ISSUE #1, right here on CNN.
VELSHI: All right. John McCain at the University of Denver table setter (ph) building, giving what his people are billing as a major foreign policy speech.
Let's listen in.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: As I always do, I'd like to recognize our young people from the organization called ONE that go to places in the world to try to help others. The epitome of what young America is all about. And I'd also of course like to thank my friend Senator Hank Brown, who I've had the privilege of serving with for many, many years. You know about his stewardship of one of the nation's great universities. You know of his service in the United States Senate, the House of Representatives, the United States Marine Corps.
So maybe I can tell you something that a lot of people don't know about Hank Brown, and that is that he was one of the only members of the United States Congress who took an interest in what was happening in Afghanistan after the collapse of the Soviet Union and the Russian withdrawal. If we paid more attention to Hank Brown at that time, which, by the way, is well chronicled in one of the great books called "Ghost Wars," if you are ever interested in what happened in Afghanistan, Hank is a man of many dimensions and a person who I admire. And I know the people of Colorado share my view.
Thank you very much, Hank. Thank you very much.
For much of our history the world considered the United States a young country. Today we are the world's oldest constitutional democracy, yet we remain a young nation.
We still possess the attributes of youth -- spirit, energy, vitality and creativity. America will always be young as long as we are looking forward and leading to a better world.
Innovation and energetic American leadership is as vital to the world's future today as it was during the Cold War. I've spent my life in public service working to ensure our great nation is strong enough to counter those who wish us ill.
To be an effective leader in the 21st century, however, it's not enough to be strong. We must be a model for others. That means not only pursuing our own interests, but recognizing that we share interests with peoples across our planet.
There is no such thing as good international citizenship. And America must be a good citizen of the world, leading the way to address the danger of global warming and preserve our environment, strengthening existing international institutions, and helping to build new ones. And engaging the world in a broad dialogue on the threat of violent extremists who would, if they could, use weapons of mass destructions to attack us and our allies. Today we also need to apply our spirit of optimism, energy and innovation to a crisis that's been building for decades but is now coming to a head -- the global spread.
Forty-five years ago, President John Kennedy asked the American people to imagine what the world would look like if nuclear weapons spread beyond the few powers that then held them, to the many other nations that sought them. Stop and think for a moment, he said, what it would mean to have nuclear weapons in so many hands, in the hands of countries large and small, stable and unstable.
UNIDENTIFIED MALE: End this war! End this war! End this war!
AUDIENCE: John McCain! John McCain! John McCain! John McCain!
MCCAIN: You know, it's not too important, but I have town hall meetings all the time. I'll be having one tomorrow where people are allowed to come and state their views, and we exchange them. And one thing we don't do is interfere with other people's right to free speech. But hat doesn't seem to be the case with these people.
But anyway, if I can get back to Jack Kennedy a second, he said stop and think a moment what it would mean to have nuclear weapons in so many hands, in the hands of countries large and small, stable and unstable, responsible and irresponsible, scattered throughout the world. If that happened, he warned, there would be no rest for anyone.
Kennedy's warning resonates more today than ever before. North Korea pursues their nuclear weapons program to the point where today, the dictator Kim Jong-il has tested a nuclear weapon, and almost certainly possesses several more nuclear warheads. And it has shared its nuclear and missile know-how with others, including Syria. It's a vital national interest for the North Korean nuclear program to be completely, verifiably and irreversibly ended.
Likewise, we've seen Iran marching, marching with single-minded determination toward the same goal, authenticated again today by the IAEA. President Ahmadinejad has threatened to wipe Israel off the face of the earth and represents a threat to every country in the region, one we cannot ignore or minimize.
AUDIENCE: John McCain! John McCain! John McCain!
MCCAIN: Thanks, my friends. Thanks.
This is -- this is -- this may turn into a longer speech than you had anticipated.
And by the way, I will never surrender in Iraq, my friends. I will never surrender in Iraq.
Our American troops will come home with victory and with honor. And that's my message to my friends. We are winning.
Back to the subject at hand.
Other nations have begun to wonder whether they too need to have such weapons, if only in self-defense. As a result, we could find ourselves in a world where a dozen or more nations, small and large, stable and unstable, responsible and irresponsible, have viable nuclear weapons programs. But there is a flip side to President Kennedy's warning. We should stop and think for a moment, not only of the perils of a world awash with nuclear weapons, but also of the more hopeful alternative, a world in which there are far fewer such weapons than there are today, and in which proliferation, instability and nuclear terrorism far less likely.
This is the world that is our responsibility to build. There is no simple answer to the problem.
If you look back over the past two decades, I don't think any of us, Republican or Democrat, can take much satisfaction in what we've accomplished to control nuclear proliferation. Today, some people seem to think they discovered a brand-new cause, something no one before them ever thought of. Many believe all we need to do to end the nuclear programs of hostile governments is to have our president sit down with leaders in Pyongyang and Tehran as if we haven't tried talking to these governments repeatedly over the past two decades.
Others think military action alone can achieve our goals as if military actions were not fraught with their own terrible risks. While the use of force may be necessary, it can only be as a last resort, not a first step.
The truth is -- you know...
You know, the truth is we will only address the terrible prospect of the worldwide spread of nuclear weapons if we transcend our partisan differences, combine our energies, learn from our past mistakes, and seek practical and effective solutions. I would like to suggest some steps we should take to chart a common vision for the future.
It's a vision in which the United States returns to a tradition of innovative thinking, broadminded internationalism and determined diplomacy, backed by America's great and enduring power to lead. It's a vision not of the United States acting alone, but building and participating in a community of nations all drawn together in this vital common purpose. It's a vision of a responsible America dedicated to an enduring peace based on freedom.
A quarter of a century ago, Ronald Reagan declared our dream is to see the day when nuclear weapons will be banished from the face of the earth. That is my dream, too. It is a distant and difficult goal, and we must proceed toward it prudently and pragmatically, and with a focused concern for our security and the security of our allies who depend on us.
But the Cold War ended almost 20 years ago, and the time has come to take further measures to reduce dramatically the number of nuclear weapons in the world's arsenals. It's time for the United States to show the kind of leadership the world expects from us in the tradition of American presidents who work to reduce the nuclear threat to mankind. Our highest priority must be to reduce the danger that nuclear weapons will ever be used. Such weapons, while still important to deter an attack with weapons of mass destruction against us and our allies, represent the most abhorrent and indiscriminate of warfare known to man.
We do quite literally possess the means to destroy all of mankind. We must seek to do all we can to ensure that nuclear weapons will never again be used.
While working closely with allies who rely on our nuclear umbrella for their security, I would ask the Joint Chiefs of Staff to engage in a comprehensive review of all aspects of our nuclear strategy and policy. I would keep an open mind on all responsible proposals.
At the same time, we must continue to deploy a safe and reliable nuclear deterrent, robust missile defenses, and superior conventional forces that are capable of defending the United States and our allies. But I will seek to reduce the size of our nuclear arsenal to the lowest possible number consistent with our security requirements and global commitments.
Today we deploy thousands of nuclear weapons. It's my hope to move as rapidly as possible to a significantly smaller force.
While we have serious differences with the end of the Cold War, Russia and the United States are no longer mortal enemies. As our two countries possess the overwhelming majority of the world's nuclear weapons, we have a special responsibility, the two of us, to reduce their number.
I believe we should reduce our nuclear forces to the lowest level we judge necessary, and we should be prepared to enter into a new arms control agreement with Russia reflecting the nuclear reductions that I'll seek. Further, we should be able to agree with Russia on binding verification measures based on those currently in effect under the start agreement to enhance confidence and transparency.
In close consultation with our allies, I would also like to explore ways we and Russia can reduce and hopefully eliminate deployments of tactical nuclear weapons in Europe. I also believe we should work with Russia to build confidence in our missile defense program, including through such initiatives as the sharing of early- warning data and prior notification of missile launches.
There are other areas in which we can work in partnership with Russia to strength protections against weapons of mass destruction. I would seriously consider Russia's recent proposal to work together to globalize the intermediate-Range Nuclear Forces Treaty. I would also redouble our common efforts to reduce the risk that nuclear, chemical or biological weapons may fall into the hands of terrorists or unfriendly governments.
I believe we should also begin a dialogue with China on strategic and nuclear issues. We have important shared interests with China and should begin discussing the ways to achieve the greatest possible transparency and cooperation on nuclear force structure and doctrine.
We should work with China to encourage conformity with the practices of the other four nuclear weapons states recognized in the nonproliferation treaty, including working toward nuclear arsenal reductions and toward a moratorium on the production of additional fissile material. I believe we must also address nuclear testing. As president, I will pledge to continue America's current moratorium on testing, but also begin a dialogue with our allies and with the U.S. Senate to identify ways we can move forward to limit testing in a verifiable manner that doesn't undermine the security or viability of our nuclear deterrent.
This would include taking another look at the Comprehensive Test Ban Treaty to see what can be done to overcome the short comings that prevented it from entering into force. I opposed that treaty in 1999, but I said at the time I would keep an open mind about future developments.
I would only support the development of any new type of nuclear weapon that is absolutely essential for the viability of our deterrent that results in making possible further decreases in the size of our nuclear arsenal and furthers our global nuclear security goals. I would cancel all further work on the so-called Robust Nuclear Earth Penetrator, a weapon that does not make strategic or political sense.
Finally, we can't achieve our nonproliferation goals on our own. We must strengthen existing international treaties and institutions to combat proliferation and develop new ones when necessary. We should move quickly with other nations to negotiate a fissile material cutoff treaty, and to end production of the most dangerous nuclear materials.The international community needs to improve its ability to indict the spread of nuclear weapons and material under the Proliferation Security Initiative. And we need to increase funding for our own non-proliferation efforts, including the cooperative threat reduction programs established by the landmark non-lugared (ph) legislation. And ensure the highest possible standards of security for existing nuclear materials.
In 2010, an international conference will meet to review the non- proliferation treaty. If I'm president, I will seize that opportunity to strengthen and enhance all aspects of the non-proliferation regime. We need to strengthen enforcement of the so-called Atoms for Peace Program by insisting that countries that receive the benefits of peaceful nuclear cooperation must return or dismantle what they receive if they violate or withdraw from the non-proliferation treaty.
We need to increase IAEA funding and enhance the intelligence support it receives. We also need to reverse the burden of proof when it comes to discovering whether a nation is cheating on its NPT commitments. The IAEA shouldn't have to play cat and mouse games to prove a country is in compliance. It is for suspected violators to prove that they are in compliance. We should establish a requirement by the U.N. Security Council that international transfers of sensitive nuclear technology must be disclosed in advance to an international authority such as the IAEA and further require that undisclosed transfers be deemed illicit and subject to interdiction. Finally, to enforce treaty obligations, IAEA member states must be willing to impose sanctions on nations that seek to withdraw from them. We need to enlist all willing partners in the global battle against nuclear proliferation. I support the U.S./India Civil Nuclear Accord as a means of strengthening our relationship with the world's largest democracy and further involving India in the fight against proliferation.
We should engage actively with both India and Pakistan to improve the security of nuclear stock piles and weapons materials and construct a secure, global nuclear order that eliminates the likelihood of proliferation and the possibility of nuclear conflict. As we improve the national and multilateral tools that catch and reverse illicit nuclear programs, I am convinced civilian nuclear energy can be a critical part of our fight against global warming.
Civilian nuclear power provides a way for the United States and other responsible nations to achieve energy independence and reduce our dependence on foreign oil and gas. But in order to take advantage of civilian nuclear energy, we must do a better job of ensuring it remains civilian. Some nations use the pretense of civilian nuclear programs as cover for nuclear weapons program. We need to build an international consensus that exposes this deception and holds nations accountable for it.
We can't continue allowing nations to enrich and reprocess uranium ostensibly for civilian purposes and stand by impotently as they develop weapons programs. The most effective way to prevent this deception is to limit the further spread of enrichment and reprocessing. To persuade countries to forego enrichment and reprocessing, I would support international guarantees of nuclear fuel supply to countries that renounce enrichment and reprocessing, as well as the establishment of multinational nuclear enrichment centers in which they could participate. Nations that seek nuclear fuel for legitimate, civilian purposes will be able to acquire what they need under international supervision.
This is one suggestion Russia and others have made to Iran. Unfortunately, the Iranian government has so far rejected this idea. Perhaps with enough outside pressure and encouragement, they can be persuaded to change their minds before it's too late.
I would seek to establish an international repository for spent nuclear fuel that could collect and safely store materials overseas that might otherwise be reprocessed to acquire bomb grade materials. It's even possible that such an international center could make it unnecessary to open the proposed spent nuclear fuel storage facility at Yucca Mountain in Nevada.
This is a long list of steps we need to take. It's long because there's no single answer to this crisis and there are no easy answers. It's long because no nation can meet this direct challenge alone and none can be indifferent to its outcome. The United States cannot and will not stop the spread of nuclear weapons by unilateral action. We must lead concerted and persistent multilateral efforts. As powerful as we are, America's ability to defend ourselves and our allies against the threat of nuclear attack depends on our ability to encourage effective, international cooperation. We must strengthen the accords and institutions that makes such cooperation possible. No problem we face poses a greater threat to us in the world than nuclear proliferation. No greater threat.
In time when followers of a hateful and remorseless ideology are willing to destroy themselves to destroy us, the threat of suicide bombers with a means to wreck incomprehensible devastation should call the entire world to action. The civilized nations of the world must act as one or we will suffer the consequences once thought remote when the threat of mutually assured destruction could deter responsibility states from thinking the unthinkable.
Americans have always risen to the challenges of their time. And we have always done so successfully. Not by hiding from history, but by making history. By encouraging, sometimes a reluctant world, to follow our lead and defend civilization from old mistakes and old animosities and the folly of relying on policies that no longer keep us safe.
I want to keep the country I love and have served all my life secure in our freedom. I want us to rise to the challenge of our times as generations before rose to theirs. It is incumbent on America, more anyone other nation on earth, to lead in building the foundations for a stable and enduring peace. A peace built on our strengths of commitment to it, on the transformative ideals on which we were founded. On our ability to see around the corner of history and on our courage and wisdom to make new and better choices.
No matter how dangerous the threats we face in our day, it still remains within our power to make in our time another, better world than the one we inherited. And that, my friends, is what I'm running for president to do. Thank you very much.
ALI VELSHI, CNN ANCHOR: And that is John McCain finishing up a major policy speech on nuclear power, both as weaponry and talking about a civilian nuclear program that could help ease the United States' dependence on oil. He's speaking at the University of Denver Cable Center.
For those of you who were not watching earlier, he was interrupted a few times by hecklers. Our producer on the ground there says that there were four sets of hecklers. Those hecklers were competing with John McCain supporters who were chanting John McCain's name as the heckling was going on. They were escorted out quietly, according to our producer, shortly after the third or fourth interruption that they made while the speech was going on.
John McCain did have to stop and respond to them a few times. He's now being escorted out of the hall at the University of Denver.
Well, coming up next, a hot, new crime trend and why you should pay attention to it.
(BEGIN VIDEO CLIP)
SGT. JOE SILVA, RICHMOND, CALIFORNIA, POLICE DEPARTMENT: Everybody's a potential victim. A home, a business, a warehouse, abandoned or occupied.
(END VIDEO CLIP)
VELSHI: We're going to bring you that story next. You're watching ISSUE NUMBER ONE right here on CNN.
GERRI WILLIS, CNN ANCHOR: A gloom and doom forecast just out about how you feel about the economy. A private research group says that consumer confidence fell to an almost 16-year low this month. The New York-based consumer confidence report says weighing on your mind the most, you guessed it, soaring gas prices and grim job prospects. As a result, the board says its consumer confidence index dropped to its lowest level since October 1992. The index is now fallen for five months in a row. The survey is based on a sample of 5,000 U.S. households.
There is a new kind of thief invading cities all over the country and it's being brought on by the high prices for metal. CNN's Dan Simon reports.
DAN SIMON, CNN CORRESPONDENT, (voice over): This is where the metal winds up. At a scrap yard. These wires contain copper. When stripped down, they will look like this, clean and bright. Lance Finkel says his business has never been more profitable.
There's a lot of money in the scrap metal business.
LANCE FINKEL, SCRAP METAL DEALER: There's big money today in the scrap metal. The price of copper, aluminum, brass are four to five times what it was three or four years ago.
SIMON: Christmas lights, computer cable, old water pipes, it can all be recycled. As some say, one man's trash is another man's treasure.
The prices of metal keep getting higher and higher. The industrial boom in China is one of the main reasons. To make a little cash, all you have to do is drop off your scraps at any recycling yard. And whenever there's easy money to be made, there's bound to be a criminal element.
Thieves are busting into air conditioners, stealing manhole covers and ripping off urns from cemeteries.
UNIDENTIFIED MALE: Obviously there are people in the world that, you know, they don't think twice about robbing a grave or desecrating a grave. SIMON: In Los Angeles last week, someone stole plumbing valves from an elementary school, forcing the water supply to temporarily shut down. The thieves take the stolen metal and sell it to unsuspecting, or worse, unscrupulous scrap yards. They're like pawn shops, providing instance cash for medal. Finkel says he frequently turns sellers away.
So what do you say to them?
FINKEL: Well, well tell them that -- first of all we ask them, where did you get it at? Do you have an I.D.? And when they don't give us the right answers, we tell them that we won't take it.
SIMON: The city of Richmond, California, near San Francisco, has been particularly plagued by the thefts. This month, thousands of gallons of a toxic solvent spilled into a waterway after thieves stole the brass fittings off some storage tanks.
SGT. JOE SILVA, RICHMOND, CALIFORNIA, POLICE DEPARTMENT: Everybody's a potential victim. A home, a business, a warehouse, abandoned or occupied.
SIMON: Richmond Police Sergeant Joe Silva took us to some unusual crime scenes. A jogging trail. The lights ripped of their copper wire. And a giant, vacant warehouse. At least to the lay person, it's guts filled with wire. In fact, Silva believe thieves were in the build as we walked with our cameras. He thought he saw some moving shadows.
SILVA: By the time that we would get anywhere near them, they'd either be down deep into the caverns of this building. They'll crawl through the crawlspace to where they know policemen will not go.
SIMON: Such brazenness is likely to continue, as long as metal stays at these record prices.
Dan Simon, CNN, Richmond, California.
WILLIS: Unbelievable. Well, it's going to be a rough summer for air travel. We'll tell you why next on ISSUE NUMBER ONE.
VELSHI: You may have heard this story before. Airfares are going up again. More and more surcharges tacked on. Fees for bags, food and other formerly free perks of flying. The bottom line is, it's going to be a rough summer for air travelers. Rick Seaney is the CEO of farecompare.com in Dallas. He tracks every, single price move with the airlines.
And you've got news for us now. Another move by Continental in time.
RICK SEANEY, CEO, FARECOMPARE.COM: Yes. This morning, Continental. It looks like they matched on those routes that are overlapping with Southwest and JetBlue. In the past, they kind of tip-toed around those kind of routes. But this morning it looks like they're matching last week's up to $60 round-trip increase. And, in the meantime, Delta lowered airfares by up to $40 to Anchorage and a variety of other mountain destinations and Colorado. So it's pretty volatile out there right now.
VELSHI: We've had -- what are we at -- 16 attempts this year to raise airfares? About 10 or 11 have stuck?
SEANEY: Actually 12 now. Twelve have stuck. Yes.
VELSHI: All right. So one of the things, Rick, that really got people talking in the last week was this decision by American Airlines, in amongst a number of changes, to charge people for the first bag, $15 for the first bag, unless you've got status on their frequent flier program. Tell me, give me your thoughts on that.
SEANEY: Well, I think this is the first time that the airlines, especially American in this case, is the only one that's doing it, has stepped over the boundary of where it was just a smaller number of people that actually got hit by these fees. This one hits a lot of people.
And because it's not hit on elite fliers, it really hits the family, the three and the four person traveling family the hardest because they're not likely to be frequent fliers. At least the entire family. And they tend to pay the cheapest prices for tickets.
So this is one of those ones where it hits a lot. A little over $300 million in revenue. I can see the revenue, but, you know, I much would have rather seen an increase in airfare to cover some of this. But the bottom line is, fuel is killing them. They're going to continue to raise both fees and prices.
We just noticed, for instance, Frontier raised a fee for transporting antlers in the hold. So, I mean, there's going to be more fee hikes, more airfare hikes and that's just where we're at.
VELSHI: Rick, I've got to imagine that this move by American Airlines is going to be more problematic than not and if other airlines join in. The problem here, of course, is that if you were going to pay to check your first bag, I think you're going to see the things people carry on to planes becoming remarkably unwielding (ph). We already saw this -- we've seen this over the last couple of years.
You know, people just sort of come on board with all sorts of stuff. Now people are going to pack their clothes, they're going to pack their jackets. Everybody's going to be wearing one of those jackets that has a lot of pockets. People are going to try to do everything to avoid it. I think it's going to cause great delays at security and things like that.
SEANEY: Yes, my first thought when I first heard the announcement was, who sells those giant bags because I want some stocks in those companies because we're going to see a lot of bags through security. We're going to see gate check bags. It's going to slow things down. The TSA has a special plan for actually packing your bag to help you get through the lines faster. Packing it in layers. And I just think the down stream effects of this increase, we won't know what happens.
VELSHI: All right, well, Rick, you're on top of this and you'll continue to track these increases. As you've said before, we are on track for a record year in airfare increases. And the people who are planning their travel for later in the summer, do it now because it's going to cost you more in a couple of months.
SEANEY: Even for the holidays, you might even start checking that now.
VELSHI: All right, Rick Seaney, CEO of farecompare.com. Thanks for joining us.
SEANEY: Sure. Great to be here.
WILLIS: Thanks, Ali.
Up next, we'll open up the Help Desk. Answers to your e-mail questions. The address, email@example.com.
WILLIS: All right, folks, time now to answer your e-mail question. It's the Help Desk. And let's get right down to it. Jack Otter is with "Best Life" magazine. Mike Santoli is with Barron's. And Allan Chernoff is a CNN senior correspondent.
Welcome all. Thanks for being here.
Let's get to the first question. It is, "what can we do as consumers to bring gas prices down? There has to be a way."
Jack, is there a way for consumers to bring down gas prices?
JACK OTTER, DEPUTY EDITOR, "BEST LIFE": Well, in the short term, all you can do is bring down the amount you're spending on gas. You can't lower that $4.25 at the pump. You can . . .
WILLIS: Or $3.99 as it actually is today. I think we're all looking forward.
OTTER: Is that the average? OK. I paid $4.19 this weekend.
Anyway, they're not sexy. You can ride your bike. Ride the train. Carpool. Buy a Prius. It's nothing . . .
WILLIS: It's hard to get to work that way.
OTTER: Here's the good news. If enough people take steps, and, you know, small cars are selling hot. SUV's are going unsold. Eventually we might actually bring it down collectively. It can't happen on the individual level. And people also should know that, you know, what's really bringing the price of gasoline up is speculators. It doesn't cost, what is it, $137 to produce a barrel.
WILLIS: Mike, do you agree with that?
MIKE SANTOLI, ASSOCIATE EDITOR, BARRON'S: Well, in part it's speculators. It's also in part demand from other parts of the world. So it's not as if you and your neighbors are the ones driving up gasoline prices.
WILLIS: And it's not as easy as blaming Wall Street. Is that what you have . . .
SANTOLI: I would say not quite that easy.
WILLIS: OK. All right.
Well, we have a question from Bernie in California. He says, "I am getting ready to retire. I don't have any retirement plan, but I do have $300,000 cash and another $135,000 in home equity. Any investment advice?"
Mike, you know, this guy is sitting pretty compared to a lot of people.
SANTOLI: Sure. And we don't know his age. We assume maybe he's going to look to supplement Social Security or something like that if he doesn't have a private retirement plan. But it seems to me, use the $300,000 just in a safe way to supplement income, not necessarily look to grow that very much since you are in retirement. You know, something like municipal bond funds, which look like a half decent bet right now.
WILLIS: You talked a lot about muni bond funds, Allan.
ALLAN CHERNOFF, CNN SENIOR CORRESPONDENT: Oh, yes, muni bonds, definitely a good yield, pretty safe way to go. $300,000, though, you know, doesn't carry you for that long. I would say, number one, maybe we think retirement. Maybe get a part-time job. Also think about cutting your expenses. Maybe he lives in an expensive area. It may be time to move to a less expensive neighborhood.
WILLIS: If you can sell that house.
We have a question from Jason in Florida. "I purchased a home in 2006 for $158,000 and I am getting ready to get out of the military. But I am afraid that I will lose my house looking at the way the job markets are. My home is now worth $30,000 less than what I paid for it. Is there any help for jittery military personnel wanting to leave the service with the current state of the economy and job prospects?"
Jack, what's your advice?
OTTER: Well, thank you for serving. And this is a tough question. A lot of guys are faced with problems. So I spoke to a guy named Paul Rieckhoff. We're writing a story about him. He was a vet who now helps vets get settled when they return. And he gave me a couple of sites that could help this guy out. One is his own site, iava.org. That's Iraq and Afghanistan Veterans of America. Then militaryonesource.com and nvf.org.
WILLIS: We're going to have to put that on our web site. Those are great web sites to help military folks who are having problems in this tough economy.
I want to thank my panel. Limited time today. Great answers to tough questions. My thanks to Mike Santoli, Jack Otter and Allan Chernoff.
VELSHI: Thanks, Gerri.
Time now to get the results of today's Quick Vote. The question asked was, when do you expect gas prices to come down? Look at these results. Seven percent of people say by this summer. Seventeen percent say by the end of 2008. Sixteen percent say in 2009. But look at this, 59 percent say it's not going to happen in the next decade. Unbelievable.
VELSHI: Good to see you, Gerri.
WILLIS: It's good to see you.
We'll see you here tomorrow, 12:00 Eastern, for another ISSUE NUMBER ONE. Time now to get you up to speed on other stories making headlines.
VELSHI: CNN "NEWSROOM" with Brianna Keilar and T.J. Holmes starts right now.