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CNN LARRY KING LIVE

Tornado Touches Down in Iowa; Killings Stun Oklahoma; Coping with High Energy Costs

Aired June 11, 2008 - 21:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


LARRY KING, HOST: Tonight, small town murders shock the United States.
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UNIDENTIFIED MALE: This is just a hit to the very core of America.

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KING: Two little girls shot dead.

Who did it? Why?

Late clues, a possible break in the Oklahoma manhunt.

Plus, money crisis -- gas prices are up -- way up. Stocks, way down. People can't pay their mortgages. Advice from experts that could keep you from going under, next on LARRY KING LIVE.

We'll get to that story. It's been a record-breaking year, with tornadoes and storms continuing now in the Midwest.

CNN's severe weather expert, Chad Myers, joins us with all the weather breaking news.

The simple question, Chad, is what is going on?

CHAD MYERS, CNN METEOROLOGIST: Well, we have La Nina, Larry. Now, La Nina puts a big cold front and cold air in the West and it puts warm air in the East. Now, tell everybody in Omaha or tell everybody in New York City how hot it's been the past couple of days. Well, this cold air that actually made snow in Montana yesterday is now interacting with the warm air that's already in place over the Plains and we're getting more tornadoes again tonight. At least five on the ground right now -- right now, all the way from Minnesota, all the way down near Claflin, Kansas now reported on the ground by the National Weather Service and law enforcement officials.

The worst news I have so far is out of Little Sioux in Iowa, where a Boy Scout camp was hit by a tornado. They don't know if it's a confirmed tornado. It is a big wind event right now. But 30 to 40 people are injured and there are reports of four fatalities. And that is by the law enforcement officials there. That's just a public report. So that's pretty official. We're going there. We are also going to be watching storms heading into Omaha. A tornado on the ground near Louisville in Nebraska. That is just to the southwest of Omaha. Papillion, Ralston, Bellevue -- you are in the path of this storm. It won't go toward Elkhorn or Boys Town. So it will go -- it will be on the south side of Omaha. But a very populated place. Five hundred thousand people around Omaha and you get a tornado moving through that populated place, you are going to get damage. And it's very easy to get injuries, because people can't get out of the way when you're stuck in your car behind a stoplight or some other car, Larry.

It's going to be a dangerous night. We'll keep you advised.

KING: Thanks.

Chad Myers will be with us throughout the night, we're sure.

We'll stay on top of the weather and break in, if necessary.

Residents in the small Oklahoma community of Weleetka are heartbroken and more than a little scared right now. Authorities are hunting for the killer or killers of two local girls. Thirteen-year- old Taylor Dawn Paschal-Placker and her friend, 11-year-old Skyla Jade Whitaker, were found shot to death along a dirt road on a Sunday afternoon.

Joining us in Henrietta, Oklahoma is Joe Mosher, uncle of 13- year-old shooting victim, Taylor Paschal-Placker.

In Oklahoma City is Jessica Brown, public information officer for the Oklahoma State Bureau of Investigation.

And in Weleetka, Oklahoma is Stacey Cameron of KWTV, the reporter on the scene.

Anything new to report, Stacey?

STACEY CAMERON, REPORTER, KWTV-TV, OKLAHOMA CITY: Well, no, Larry, only the latest updates from this afternoon, that the OSBI and the county sheriff here have indicated that there were two guns used in the crime and so they are suspecting two shooters.

But, Larry, we still don't have a motive for the crime. They have no suspects and no one in custody. So the information that's coming out is very little at this point and probably of little consolation to the families.

KING: Jessica, with all that shooting, nobody heard a sound?

CAMERON: No, Larry. One of the problems here that we're talking about is on that day when the shooting occurred, there was a heavy wind coming down from the north and the south. And the girls were killed about a quarter of a mile from Taylor's home. So with the wind blowing, there were several shots, but no indication that anyone heard anything. So there are no witnesses to this crime, Larry, and not a lot of evidence at this point, either. KING: Jessica Brown, what do you make of this?

JESSICA BROWN, SPOKESWOMAN, OKLAHOMA SBI: We don't know what to make of it, quite frankly. We don't have a motive. We don't have any suspects. We're looking at anyone. We do not have blinders at all.

However, we do believe it was probably someone local only because it's such a difficult area to find. It's a very isolated area. So we believe that the people -- and we believe it's possibly two or more people who committed these homicides are from that area or are -- have been around there for some time.

So we are taking leads. We've had hundreds of leads come in. We've got more than 14 investigators on the ground searching all these leads, interviewing more than 50 people so far. And we'll continue to do that.

Now, also at the scene, at the time of the crime, we actually came up with a lot of evidence and we were able to take it to our crime lab. And we are testing that evidence right now. And we believe that that will help us identify possible suspects, but that could be weeks away. So right now, we're not waiting for that. We're continuing to investigate as best we can.

KING: All right, Joe, you're the uncle of the late Taylor Paschal-Placker.

JOE MOSHER, TAYLOR'S UNCLE, FAMILY SPOKESMAN: Yes.

KING: What do you make of this?

MOSHER: It's -- it's a hideous crime. You know, the OSBI and the sheriff's office out there, they're all doing such a great job on this. They're keeping the family informed, you know, as best they can do. We know there's things that they can't tell us right now. And we just really appreciate what they're doing.

KING: What can you tell us, Joe, about Taylor?

MOSHER: Taylor was a great little girl. She -- I was with her just two weeks ago. We had a family reunion. And she was just a great little girl. She loved animals. She had her -- she owned a horse. She rescued turtles off the highway and wrote her name on them and turned them loose out in the country. You know, there was just things -- and she was smart. She was very smart. She was home schooled at first and then she found that when she moved out there, she started going to the public school. And she was in the top of her class, you know.

KING: Boy.

Jessica, is there in guessing here as to motive?

BROWN: You know, we really do not know. We're looking at anything from a gang initiation to someone just these two girls happened upon, someone making methamphetamine to -- there's all sorts of things. We really don't know. If we had a motive, it would certainly help us. But right now, we have no eyewitnesses. No one even heard the gunshots, as Stacey Cameron was talking about.

So we really don't have much. We do -- we just released today -- now have the fact that we believe two different caliber weapons were used. So that gives us the idea that two people were involved in this. And that really can help us for the fact that one person might be able to come forward and say, hey, you know, this happened and, you know, I want to spill the beans, I want to give up what happened.

And we're hoping at least with the $25,000 reward that is up now, that that might entice some people to come forward who maybe didn't want to get involved before, but now the $25,000 is out there and that might help.

KING: Yes.

Stacey, is there a kind of a panic in the community?

CAMERON: Well, Larry, you can understand people are scared here. Even the sheriff said yesterday said if he were a parent, he wouldn't let his own kids go outside and play unless someone was around and watching them at all times.

What you have to understand, Larry, is this really is the picture perfect small Oklahoma town. There's about 1,200 people that live here -- as many dirt roads as there are paved roads. Most of the people leave their homes unlocked and leave their keys in the cars. Everyone knows everyone.

So you weren't worried about your kids going out to play, walking down a dirt road. These two little girls were walking down to a bridge where kids like to play and swim in a creek during the summer. So it is a place where people are a little bit scared now and watching their kids very closely.

KING: Every parent's worst fear.

Thank you, all.

We're going to stay close on top of this story.

By the way, are you about to lose your home? Can't afford a tank of gas?

You're not alone. Expert advice ahead.

(COMMERCIAL BREAK)

KING: Maybe everybody talks about the economy, but nobody does anything about it. Or maybe that's not true.

We have an outstanding panel.

In Nashville, Tennessee, Dave Ramsey, the nationally syndicated radio host, financial expert and best-selling author. His books include "The Total Money Makeover." In New York, Jean Chatzky, the contributing editor for "Money" magazine, a regular contributor to "The Oprah Winfrey Show". Her latest best-seller is "Make Money, Not Excuses."

And in New York, Barbara Corcoran, the founder and former CEO of The Corcoran Group, a New York-based real estate company, maybe the best known one in New York. The best-selling author of "Nextville: Amazing Places to Live for the Rest of Your Life." She's also a columnist for "The Daily News" and "Redbook".

And here in Los Angeles, our old friend, John Assaraf, the entrepreneur and best-selling author himself. His most recent book is "The Answer: Grow Any Business and Achieve Financial Freedom and Live An Extraordinary Life," co-written with Murray Smith.

OK, Dave. We've got gas prices now approaching $5 a gallon gas.

What the hell is going on?

DAVE RAMSEY, TALK RADIO HOST, AUTHOR, "THE TOTAL MONEY MAKEOVER": That's what I said when I filled up my tank the other night. Oh my gosh.

Well, I'll tell you, it's making people have to really sit back and make some choices and do necessities first. They're having to sit down and make a decision in their budget to do what we used to call in fourth grade civics the real things, the necessities -- food, shelter, clothing, transportation and utilities. And Grand Theft Auto still sold $500 million worth in three weeks. And, you know, we've still got Indiana Jones breaking box office records. So somebody is spending money. But, boy, I'll tell you what, this gas thing is -- it's unbelievable.

KING: Jean, what about the whole picture?

What's wrong with the economy?

JEAN CHATZKY, CONTRIBUTING EDITOR, "MONEY," AUTHOR, "MAKE MONEY, NOT EXCUSES": Everything seems to be turning negative. We've got gas prices just today up another $5 a barrel. The Federal Reserve talking about how their days of lowering interest rates are over. Bad news in the financial sector. The market drops another 200 points.

But Dave is absolutely right. This is the time when people really have to control the things that they can control. And that means looking at the two cars that are probably in your garage and deciding that you're going to leave the bigger one sit there and drive the smaller one. It means logging your mileage so that you don't have to make three different trips out of the house every single day. It means knowing what's coming in, what's going out and where it's going, so that you can start making smart, conscious choices.

KING: So we have a crisis.

Barbara Corcoran, how is that affecting real estate? BARBARA CORCORAN, FOUNDER, THE CORCORAN GROUP, AUTHOR, "NEXTVILLE: AMAZING PLACES TO LIVE...": Well, real estate is affecting everyone, because everyone who believed they had a gold mine they were sitting on for years and were led to believe it would always be worth more, of course, had been -- had their dreams shattered. So no one is feeling good about owning a home, even if their home hasn't lost value. Everyone is depressed over the real estate market. And more than anything else, attitude is in the way.

KING: Now, John, we've known you. We interviewed you in the past. You're part of that secret group. You can't be optimistic, because you're an optimistic person. You can't be optimistic.

JOHN ASSARAF, ENTREPRENEUR, COAUTHOR, "THE ANSWER: GROW ANY BUSINESS": Well, you know what, Larry?

I think the American dream is in the fight of its life with an enemy that it can't see. And the enemy is the doubts, the fears and the anxieties that people are feeling because they're looking at the outside circumstances and they're allowing the outside circumstances to control their thinking.

CORCORAN: That's right.

ASSARAF: Yes, the economy is suffering. Yes, it's a hard time.

But what if people started to think, forget about what's happening out there, what do I have to learn?

What skills, what knowledge do I have to have in order to make $5 gas or $10 gas irrelevant or the health situation we have in our country, or the governmental situation in our country?

If we take control of our lives and we reclaim our own power, then it makes no difference what's happening in the economy. But what's happening is we're perpetuating what's happening in the economy by buying into it.

KING: But you have to make money to buy the gas.

ASSARAF: So why not ask yourself a great question -- what can I do right now, despite what's happening outside, to earn more money?

KING: Dave, can we do...

CORCORAN: I'll give you something you can do.

KING: Who -- who jumped in? Who is that?

CORCORAN: I was jumping in. It's Barbara.

KING: OK.

CORCORAN: I have a great idea what you could do and I'm all for him and the way he's thinking. Because everybody is moaning and groaning about real estate. But we have low prices, cheap money, three times the inventory we had two years ago and yet people are sitting around thinking there's bad news out there. This is the market we've all been dreaming about -- the good old days we are talking about.

So no one has their head on straight looking at it this way.

RAMSEY: Barbara is exactly right.

KING: Dave, you agree?

RAMSEY: Yes. Barbara is right, Larry. We've talked about this before with...

CORCORAN: We're going to get married.

RAMSEY: ...with Robert Kiyosaki and these guys. And the idea being that, hey, man, real estate is on sale. We've said it before. You're at K-Mart, the blue light's on. It's time to buy.

CORCORAN: Boy, oh, boy...

RAMSEY: And the stock market is the same way.

KING: Yes, but you've got to have the money to buy.

RAMSEY: Well, the stock market is the same way. But you do have money to buy because most people really are not in -- we've got -- we've got about three economies, real estate wise, that are really suffering. With the calls I'm getting and the statistics are telling us that it's Michigan, Florida, California, Las Vegas and Phoenix.

If you pull those numbers out of the foreclosure statistics and out of the real estate growth statistics, we've got wonderful markets that are growing and booming -- Dallas. Hey, crud (ph), Manhattan is doing well...

KING: Jean...

(CROSSTALK)

RAMSEY: And Manhattan was kind of up there a ways.

KING: Jean, this sounds like a happy group.

CHATZKY: It does sound like a happy group. And I know that there are an awful lot of unhappy people out there. And that's because they haven't done what we are talking about. They haven't reclaimed their ability to take advantage of this situation.

The last time interest rates dove, this economy split into two groups. David Brooks, in his column in "The New York Times," put it really well the other day. There's the lottery economy -- the people who are earning $13,000 a year and spending a big portion of that on lottery tickets. And then there's the investor class. And people who have money in the bank are ready to take advantage of this.

But those who don't need to take this opportunity to learn this lesson. Now is the time to pay your bills on time, to spend less than you make, to take control over your own finances so that you can start to run your own life again and not let somebody else do it for you.

CORCORAN: And you know what...

KING: OK. We'll take a break. We'll be right back with more about you and your dollar.

Don't go away.

(COMMERCIAL BREAK)

KING: By the way, in addition to our panel, we have crews at filling stations in Hollywood, Florida, Washington, Dallas and Los Angeles. And we'll be checking in with folks pumping gas who maybe have a question or two for our panel.

But we do want to check in, in New York, with Poppy Harlow, the anchor for CNNMoney.com. That is a great Web site, by the way -- one word -- CNNMoney.com.

Poppy, what's -- why are -- what's going on with oil?

POPPY HARLOW, CNNMONEY.COM: Yes. I mean everyone is just talking about it. Americans across the country paying at the pump over $4.05, on average.

Larry, places where you are, in California it's closer to $5.

Here's what's going on. We're dealing with, first, in America, things we've never seen before. First, we've seen increased demand in China, Russia, India like we have never seen before. These people are traveling more. They're driving more. They're buying more cars. They're eating meat, which costs more money, more fuel in order to produce it.

We're also dealing with a bull market in terms of commodities. The Dow fell 200 points today. People are jumping out of the stock market and jumping into commodities.

And, finally, we're dealing with speculation in terms of crude oil futures unlike we've ever seen before.

The question, Larry, we've heard a lot about it, is this speculation, is this manipulation?

I want to give people an example out there. You can relate it -- a good analogy is to talk about a casino, right?

You're in a casino. You're allowed to make any bet you want. But if you show your cards to your neighbor, if you start colluding with your neighbor, then you get kicked out. And that's what's going on.

The CFDC, that commission trying to decide are these oil traders, these hedge funds, speculating to drive the price up or are they manipulating the markets? So those are the three factors. But Americans just see it as the price going up and up.

KING: Can the government do anything about it?

HARLOW: They're trying. What they want to find is a long-term solution. You know, a big debate on Capitol Hill yesterday, Senate Democrats pushing this bill for $17 billion in tax subsidies to the big oil companies -- Exxon, Chevron, those companies, to be rescinded and put into expiration for alternative fuel and alternative energy.

But that bill was blocked by Senate Republicans, who say you can't really tax your way out of the energy problem we're in now. They say oil works and we have plenty of oil in this country, we need to drill in places like ANWAR, in that province in Alaska.

And the Democrats say, you know, that's not a solution, that's just a Band-Aid, a short-term fix.

It's interesting if you look at the two presumptive nominees, McCain and Obama. They talk a lot about this possible tax break for Americans, at least over the summer. McCain wants to see a tax break. He talked about it a bit ago -- 18 cents or so off what we're paying right now Obama says, listen, that's not a long-term solution, that's a Band-Aid, again.

So, you know, they're trying, but the question is when is this really going to help Americans?

I thought it was really interesting, this result on a CNN/Opinion Research Corp. Poll. Six out of 10 Americans think gas will hit $5 a gallon this year, on average. So they're really nervous.

KING: Poppy, thank you so much.

Poppy Harlow, the anchor of CNNMoney.com. You can catch her there all the time.

Poppy Harlow, CNNMoney.com.

All right, John, if that's the situation -- and we've got two different sights on it -- how does your optimism bring it down from $5?

ASSARAF: Well, the optimism is not going to bring it down. But you can't change the outside circumstances. I'm going to say that over and over again. I would prefer people to ask themselves questions.

What could I do to augment my income right now? What could I do to cut back, of course? And what can I do to augment my income?

So is there a skill that I could learn?

Is there an Internet Web site that I could open up and sell something? Is there some extra services that I could provide people and earn more income? And I can tell you, we work with thousands of business owners all over the world and the recession is not affecting most of them, because they're thinking differently, number one, and they're applying different strategies to conform.

KING: Jean, do you think the average American can do that, though?

CHATZKY: I think the average American is not being resourceful enough. John is absolutely right. There are two sides to this equation. There is the earnings side and there's the spending side. And you've got a modicum of control in each one.

And so, as John said, you look your basket full of skills. You ask yourself, is there something that I could do?

Do I have things sitting at home that I could sell on eBay, on craigslist, at a consignment shop?

And on the spending side, am I doing everything I can in my home to not use energy?

KING: OK...

CHATZKY: Have I caulked my windows and my doors?

You've got to take back that control.

KING: All right, panel, we have the manager of a gas station in Dallas, Texas.

Let's check in.

Are you there, sir?

JOSEPH VICUM (ph), MANAGER OF A GAS STATTION: Yes, sir. I'm here.

KING: What's your name?

VICUM: My name is Joseph Vicum.

KING: OK, Joe.

What's the price per gallon at your station right now?

VICUM: Well, for unleaded it's -- for unleaded, it's $3.99 and then past unleaded, premium is $4.29 and diesel is $4.79.

KING: OK. You have a question for the panel, right?

VICUM: Yes, sir. I've heard -- I've had a lot of customers come in and tell me that at the end of the summer, it's going to be over $5 a gallon for regular.

I'm kind of worried because at Fuel City, where I work, I get free drinks, but I don't get free gas so is that a possibility in Texas here at the end of the summer?

KING: Dave Ramsey, what do you tell him?

RAMSEY: Well, he who lives by the crystal ball eats glass. I have no idea what it's going to be by the end of the summer. I really don't. Typically, gas has gone up in the summer and this has been no exception because around vacation times. And then it goes back down in the fall. And it typically does this kind of garbage around a presidential election, too.

So I think by next year, we're probably going to see some settling out of the political parts of this animal. But we do have the speculative parts that Poppy was talking about a while ago.

So, yes, I think you've probably got some $5 gas on the horizon. I don't doubt that a bit.

KING: All right...

RAMSEY: But what are we going to do then?

KING: Dallas...

RAMSEY: We've got to make some adjustments in where we drive and what we drive and the things that John was talking about a few minutes ago. And that's, hey, we've been kind of fat and sassy in our spending and in our earning.

KING: Dallas, why is the sign behind you blank?

VICUM: Well, back in '99 when we put the sign, up it was a dollar a gallon. And we weren't expecting it to get to $4 or $5 or whatever. But, John, the owner of the store right now, is buying a new sign. He bought four numbers and he bought fives, too, just in case it hits the fan.

KING: He's prepping.

I know it isn't your field, Barbara Corcoran but what do you...

VICUM: Yes, sir.

KING: Thanks so very much for joining us.

Barbara Corcoran, what do you make of this?

CORCORAN: Well, I think the gas prices right now, people like to travel in the summer and they're very aware of gas prices for their cars. What I'm worried about is the gas prices hitting the housing market come the fall of the year. I'm not trying to be a doomsayer, but I'm expecting it's going to be much more expensive to heat the house. And homeowners have enough problems right now. The last thing they want to do is one more thing on their worry list.

So I just, you know, I think so many of the people out in America right now are really struggling. The great majority are struggling. I think the only up side, I might add, to the lists that the other people had suggested to help people is two out of three Americans sit on huge assets and they've paid off most of their mortgage debt. I think now is a great time to take some of that equity out of your house and buy your neighbor's house at a 35 percent discount.

KING: All right, John wanted to say something. Quickly.

ASSARAF: Yes, I wanted to say something. You know what, these gas stations have an opportunity now to create loyalty programs for the people who buy gas at their stations. And in helping business owners in One Coach (ph), what we do is we teach them to get innovative when times are tough. And you can't sit on your laurels and expect the same results.

KING: What do -- give me an idea, what do you want them to do?

ASSARAF: If you come to our gas station and buy two tanks of gas this month, we'll give you 10 percent off of some of the store items that we have. So you create some loyalty programs. That keeps the customer coming back to your store instead of looking for the cheaper price.

KING: All right. Be creative.

ASSARAF: Be creative. Be innovative. Innovate your business.

CORCORAN: Give away gas.

KING: Our gas station roundup continues. Real people from around the country sound off.

You are watching LARRY KING LIVE.

(COMMERCIAL BREAK)

KING: We told you we would stay atop the wild weather in the Midwest. Here's CNN's severe weather expert Chad Myers.

What's the latest on those tornadoes?

MYERS: Larry, we still have a lot of rotation in the cell near Bellevue, Nebraska. That's near Offutt Air Force Base. That would be the cell that was in Louisville with the tornado on the ground earlier. We do not have it confirmed it is on the ground, but it is still rotating quite rapidly there.

Also, a little bit of new information from the Little Sioux boy scout camp up there in Little Sioux, Iowa. We know that a tornado did hit that boy scout camp. There were 100 boy scouts in the camp at the time. Somewhere between 30 and 40 scouts, maybe a little bit less, are being taken to the local hospital. The problem is the local hospital is over 20 miles away.

We'll keep you advised as this goes on. Right now, all we know is that there are three or four tornadoes on the ground from Minnesota all the way down to Kansas. If you hear a storm coming your way, just take matters into your own hands and take your family downstairs because it's only 15 minutes out of your life and it could save your life -- Larry.

KING: Good advice. Chad Myers, always atop the scene.

Let's go to Washington, D.C. We have a lady at a gas station in Washington. She is a customer.

Are you there, dear?

CALLER: I'm doing OK. How are you, Larry?

KING: I'm doing fine. What's the question you have?

CALLER: I was having a discussion with one of my friends, and thinking whether or not it was a good time to buy a hybrid car. The car I have guzzles a lot of energy. So whether we should be opting for my energy efficient cars during this hike in prices?

KING: Excellent question. Do you want to take it, Dave?

RAMSEY: Absolutely. You don't want to take a hybrid car right now if you are going to spend more on it than your car is worth. If you have a 15,000 dollar car and you can trade that for a 15,000 dollar car with better gas mileage, that's good. The typical hybrid is only going to save you ten miles to the gallon, and that's a good one. You don't want to invest 15,000 dollars to save ten miles to the gallon, because it will take you like 26 years to get your money back. That does not make sense.

If you can trade laterally and keep about the same price range vehicle and get better gas mileage, you make money day one. Don't go spend two, three, or 10,000 dollars more on a car to save ten bucks. Gas prices are awful, but don't get caught up in that one.

KING: What's the price of gas there, ma'am?

CALLER: The price of gas is over four dollars a gallon. It is pretty steep.

KING: All right. I was surprised at this hybrid answer. Jean, would you give the same answer?

CHATZKY: I would only because I ran the numbers last week. I drive an SUV. It will be my last big car. But I ran the numbers to figure out what it would cost me to get out of this car and if it would be worth it. No surprise, now is probably the worst time in history to sell an SUV. There are so many people looking to get how of these gas-guzzling cars. So Dave is absolutely right. If you can make some sort of a lateral switch, that's what you want to do. Otherwise, you drive the car into the ground, figuring out what it is costing you additionally in gas each year.

For me, putting about 12,000 miles on my car, which is about average, I'm paying an additional 900 dollars in gas. Now, I can save myself almost that much money simply by tracking my mileage like I track my expenditures and saving myself an eight dollar trip out and back from the house every day.

KING: Thank you, ma'am, in Washington. Now we'll go to a gas station in Los Angeles. Standing by there is Art. Are you there, Art?

CALLER: I'm hear, Larry.

KING: What's the price where you are?

CALLER: 4.49 for regular, 4.69 for high-test. That's the cheapest gas in town, I think.

KING: It might be. What's your question?

CALLER: I'm a retired person on a fixed income. My retired friends and I have basically three concerns: What's happening with the stock market, the price of gas, and the price of food. They just wonder if the panel has any suggestion for that.

KING: John? Three big questions.

ASSARAF: I'm going to go back to three big questions, we can't predict what's going to happen in the stock market or in oil. We can't predict it.

KING: Or food.

ASSARAF: Or food. We can predict what we can do to change our situation. I understand he's retired. However, if you need to supplement your income, you've got to make a decision. Am I interested in things getting better or am I committed? If you are interested, you're going to do what's convenient. If you're committed, you are going to do whatever it takes to get through this rough time right now. That's what every one of us has to do.

KING: A retired person can do things, too?

ASSARAF: Absolutely. There are tons of opportunities for retired people.

KING: We'll be right back with some more from our panel and another person at a gas station, we believe, in Hollywood, Florida. Don't go away.

(COMMERCIAL BREAK)

KING: Has the high price of gas caused you financial hardship? Cast your vote on CNN's number one show page, CNN.com/larryking. I'm guessing a lot of people will be answering yes.

Let's check in one more gas station in Hollywood, Florida. Judy is standing by.

Judy, what's the price of gasoline where you are?

CALLER: Hi, Larry. We just paid 4.05 a gallon. Actually, we drove several miles out of our way to find it that cheap.

KING: What's your question?

CALLER: Well, my question would be, I'm really from St. Louis. I'm just visiting here in Florida. And when I left St. Louis, I believe the top price of gas I saw was $3.92. And it has continued to increase here. Why is it more expensive in Florida when they are closer to oil than I am in Missouri?

KING: Good question. Barbara Corcoran, it may not be your field, but knowing you --

CORCORAN: I'm going to throw out a few cards and figure this out. I have no idea., none whatsoever. Why did you vie me that question?

KING: Because I hadn't come to you in a while. I didn't have a real estate question. We're at gas stations.

CORCORAN: Can I say one thing?

KING: Yes, quickly.

CORCORAN: I want to say, in Detroit, you can buy a new house for 37,000 dollars. I say everybody sell their cars and buy their first investment property in downtown Detroit. Why not?

KING: Spoken like a true realtor. Dave Ramsey, why does it differ so much as you drive across country?

RAMSEY: Taxes, state taxes. You have state taxes, federal taxes. The state taxes in Florida are likely higher than they are, since Florida doesn't have a state income tax. They are probably making it up in other ways.

KING: Quickly. Thank you very much, Judy. Are we going to get out of this soon, Jean?

CHATZKY: Not any time over the summer, certainly. And I think that we need to plan. The smart move is to plan to be in this situation for a while, which means having an emergency fund to tide you over.

KING: OK. I want to plug everybody's book again. Dave Ramsey's books include "The Total Money Makeover." Jean Chatzky, her latest is "Make Money, Not Excuses." The always delightful Barbara Corcoran, her new book is "Nextville: Amazing Places to Live The Rest of Your Life." And John Assaraf, who also has a Web site, ReadTheAnswer.com, and his book is "The Answer: Grow Any Business, Achieve Financial Freedom and Live an Extraordinary Life." It's co-written with Murray Smith.

Can either of the men running for president fix the economy? We'll hear from Ben Stein and Paul Krugman think about the candidates and money, next.

(COMMERCIAL BREAK)

KING: Digging into the economy question, two of my favorite people, both in New York, Ben Stein, the conservative commentator, economist, attorney and actor, best selling co-author of "Yes, You Can Super Charge Your Portfolio." He's a columnist for "The New York Times" Sunday Business Section and honorary chairperson and spokesman for the National Retirement Planning Coalition.

And Paul Krugman, "The New York Times" columnist. He's professor of economics and international affairs at Princeton University and the best selling author of "The Conscious of a Liberal."

OK, guys, a CNN/Opinion Research poll says 78 percent of those surveyed say the United States' economic conditions is poor.

Ben, do you agree?

BEN STEIN, CONSERVATIVE COMMENTATOR: I totally disagree. It is poor for a number of people, but 94.5 percent of the population are employed; 97.8 percent of the housing is not in foreclosure. There's just an incredible media storm saying things are bad. Yes, gasoline prices are way up, but they are still far cheaper than in other developed countries. I think it is largely a media mirage that is depressing people and making them feel terrible.

That said, government policy has been very poor for a number of years now. There's no doubt about that.

KING: Paul, he says it is a myth and a government policy is still poor. What's your response?

PAUL KRUGMAN, "THE NEW YORK TIMES": Well, government policy is poor, that's for sure. But look, this is serious stuff. If you work it out, it turns out that Americans directly or indirectly consume 1,000 gallons of gasoline or other oil products every year per person. The price of petroleum is up 1.50 a gallon in the past year. That's a huge financial hit. It is hitting people directly through gas prices. It's hitting them indirectly through the cost of food and the cost of lots of things.

People are, in fact, significantly worse off than they were a year ago. A lot of them are worse off than they were five years ago. I think people are entitled to say this is a poor economy. It is not just a myth. I think it is an insult to their intelligence to say it is just the media fooling them into thinking that.

STEIN: A great many people are also a lot better off than they were five years ago. In fact, an awful lot of people are in their homes for the first time. Obviously with the correction, some have lost their homes. But this is still an extremely prosperous society. And it is just fooling people and depressing them to tell them it isn't.

(CROSSTALK)

KRUGMAN: Ben, you are basically saying that basically because we are not a third world country -- we are not doing well by our own standards.

STEIN: We are doing well by most standards, but the gasoline problem is a price -- a problem -- price is problem for certain people. It's obviously not a problem for people in Princeton. But it is a problem for a lot of people. What could they do about it? There's nothing we can do about it at this point.

KRUGMAN: Except people are hurting. There are other things have that haven't come up on this show. Health insurance, a lot of people are either underinsured or not insured. It's a worsening situation. It's a real problem.

STEIN: That is a real problem. But a lot of those people are illegal aliens. A lot of those people never remotely had a hope of having health insurance.

KING: Is this campaign, Paul, going to clearly define the differences and the equating answers to these problems?

KRUGMAN: Well, I hope it will. You do have -- I think Ben would agree with me on this. We have a real difference between the candidates. We really one candidate who says what we need are more tax cuts, less government, more or less do what Bush did, only we'll do it right. The other candidate who saying, we need to make a change in direction. It is as clear a choice as we have had in any election in my lifetime.

You know, people feel lousy about the economy. That's good news for Obama. It may not be entirely fair. McCain didn't do this. But, still, he's identified with the policies. It's a lousy economy, and Obama is saying let's do something different.

STEIN: McCain hasn't done anything wrong yet and Obama hasn't done anything right yet. The problems in the economy are problems caused by gigantic worldwide events, including gigantic worldwide speculation, caused by gigantic mistakes in credit policies, for none of which Bush is responsible, for none of which McCain is responsible.

But on the other hand -- but what I would like to get to is this basic point; what's anyone going to do about these oil prices? There's really nothing to be done about them, except for individuals to conserve. In the long run, though, we do not do anybody favors by taxing the oil companies or taking away the taxes that Congress has voted for them.

KRUGMAN: Gosh.

KING: You have said, Ben, that the rich are not paying their fair share in taxes.

STEIN: I could not agree more. I think Mr. Obama has it dead right. There should be higher taxes for the rich. There should be higher taxes for the rich in just about every category. By rich, I mean really rich, like five million a year and up. That's a lot of money that is being taken in by those people. But unequivocally, it is wrong that those people pay so little tax. KING: On here have agreement, Paul?

KRUGMAN: Sure, but we need more money than that. I say let's go back to taxes the way they were in the 1990s, which was not -- you may remember was a pretty good time. That would give us a lot more money to do things we need to do. It's not just enough to -- I'm all for soaking a little bit more in the super, super rich, but that's not enough; 250k-plus, which is what Obama is saying, that seems reasonable to me.

STEIN: With all due respect, Dr. Paul, those are not very rich people. In New York, 250,000 doesn't make you rich. In L.A., San Francisco, Chicago, those people are not rich. Why not just really put it to people who are extremely rich? They can afford it. They will still be rich. They will still have their planes and yachts.

KRUGMAN: Not enough money.

KING: One at a time. Paul, go ahead.

KRUGMAN: It is amazing that Ben is arguing we can really sock it to a few rich people, which I wish I believed was enough. Anyway, look, the point is we really have an enormous difference between two candidates. I don't think -- let's put it this way, if it is a debate about the economy, I think it is pretty clear who will win it. Rightly or not, people are not happy with this economy. McCain looks like the same.

KING: Let's take a break and we'll get Ben's reaction. We'll quote from a Paul column right after this.

(COMMERCIAL BREAK)

KING: Chad Myers, our weather expert, our man about severe weather, with a quickie of what's going on now, Chad.

MYERS: Larry, still 13 tornado warnings, one just south of Salina, Kansas, but that should slide south of Salina. And then back up here toward Lincoln and Omaha, those purple boxes, those are all tornado warnings still on the ground right now, although right now we are getting fewer and fewer on the ground reports.

You know what that means, Larry?

It means it's getting dark and you can't see them. Those are more dangerous than those you can see coming and can get out of the way. So, as night comes, it's going to be another night across the Midwest. Plus, they don't need that rain at all in Iowa. More flooding going to be occurring too, especially through downtown Des Moines -- Larry.

KING: That's Chad Myers, always atop the scene.

All right, Paul Krugman, earlier this month, you concluded a column in "The New York Times" saying, "while expensive gas and food are inflicting real harm on American families, they aren't setting a 70's style inflationary spiral. The only thing we have to fear on that front is inflation fear itself, which could lead to policies that make a bad economic situation worse."

Would you explain? What do you see in inflation fear? What policies do you worry that fear would precipitate?

KRUGMAN: I'm worried that Ben Bernanke is going to hike up interest rates. I'm not worried, because I think sees things the way I do. But I am afraid the Fed is going to hike up interest rates because they are afraid of inflation, because they are seeing the price of oil and they are saying, oh my god; it is going be the 1970s all over again, and throw the economy into a much deeper recession than it is already in. I think that's unjustified.

This inflation is very real. My god, you can see it at prices in the gas station. But it is not filtering through to the rest of the economy. It is oil and food. It is not hitting the rest. This is not a wage/price spiral. We have the prices, but not the wages, which means it doesn't feed on itself. So don't raise interest rates. Leave things be.

KING: Ben?

STEIN: I'm sorry to make for so little drama, but I think that's completely correct. Don't raise interest rates or also don't bash the oil companies. Also, the top 300,000 wealthy people in this country have more income than the bottom 200 million. I think we can get plenty of tax revenue out of them.

KING: Are you guys -- Paul, are you optimistic or pessimistic?

KRUGMAN: I'm somewhere in between. I'm modestly pessimistic. We don't seem to be going over a cliff. There was a real fear that we might and it could still happen, but it doesn't seem like things are falling apart. It is not 1930. It doesn't even look like 2001, to be honest. It is not falling as fast. But I think we probably have several years of a sluggish economy, a worsening job market -- that advice that we had from the earlier panel to go out and buy houses, I beg to disagree. I think house prices have a long wall to fall, still.

It will be an extended siege, not a catastrophe. But it is a fairly grim economy for quite a while to come.

KING: Ben, you up or down on this?

STEIN: Slow growth, but we are not in a recession. We are unequivocally not in a recession. There's no doubt about that. We won't even know that for six months, but we're not in a recession. But slow growth for a while. We'll get through it. It is a very rich country.

KING: Are you a supporter of McCain, Ben?

STEIN: Absolutely, but I'm not allowed to politic, but I will certainly vote for him. KING: What about the charge that the economy is his weakest point?

STEIN: I think it is probably true.

KRUGMAN: There's not a lot of justice in this. Let me say, I think it would be justified to be very critical of him on economic policy. But he'll end up probably losing in large part because of gas prices, which is not his doing. But that's the way things work.

KING: Paul, you are saying gas prices can decide an election?

KRUGMAN: Oh, sure. They decided the 1980 election, right? It definitely can do that.

STEIN: Mr. Nixon always thought it was gasoline prices more than any discoveries during Watergate that forced him out of office. He had the disclosures about Watergate and the rising gas prices at the same time. He always thought politically the gasoline prices were hurting him more.

KING: Paul, as a supporter of Obama, are you concerned by a lack of experience?

KRUGMAN: You know, as a "Times" columnist, I am not allowed to do endorsements. In principal, you don't even know which party I prefer.

KING: You wrote a book called the "Conscious of a Liberal." I can assume.

KRUGMAN: I'm all for those liberal Republicans, both of them. Look, Obama doesn't have a whole lot of -- he's young, but he has a very, very able team of advisers. He's got a really deep bench of good economists. On economic policy, I'm quite happy that he's going to be getting very, very good advice.

STEIN: I wish McCain would avail himself of some extremely good Republican economist. He doesn't seem to be doing it yet. It's not too late for him to do it.

KING: Why wouldn't he, Ben?

STEIN: I don't know why he isn't doing it. He has this very lovely woman, Carly Fiorina, a lovely, charming woman, who used to be head of HP, seemingly as his economic adviser. I'm not aware of any credentials she has as an economist. There are some extremely intelligent Republican economists he should be using. I don't know why he isn't. I just don't know why.

KING: Paul, why is the economy -- We could put ten economists, all trained at the same university, and get ten opinions.

KRUGMAN: I don't think that's true right now. I think you could probably -- you can always find somebody. Remember, there's no licensing requirement on who gets to say they're an economist. Look, we had a huge housing bubble that burst. That brought financial problems in its wake, which were even bigger than people expected, because it turned out there was more irresponsibility. We have this oil thing, which, as earlier panelists said, or as your reporter said, the Chinese are starting to drive and eat meat.

All those things are hitting us more or less at the same time. It is not a mystery. I have to say, I'm a little surprised that it hasn't been worse. The economy is not doing well, but it is holding up better than you might have feared under all those blows that are hitting it.

KING: Ben, do you think the coming debates might decide things?

STEIN: I think it will have a lot to do with it. I hope Mr. McCain can wrap himself up. When I compare his style and his level of intensity and his level enthusiasm with Mr Obama's, it scares me to death. Surely, he can pull himself together a little better. I like him a lot. I'm also not supposed to endorse anyone, and I won't. But surely he can do better than he's doing and I hope he will.

KING: That's not his strong suit.

STEIN: His strong suit, I think, is his character. Here is a man who endured year after year after year of torture and confinement for his country, went on to serve his country nobly and without any kind of real, serious ethical blemish for many years in the Congress. He's a maverick, a straight shooter, I would just like to see him pull himself together and campaign a little more enthusiastically and get some good advice. Following the Bush tax policies is not the right way to go.

KING: Thank you both very much. We'll be calling on you a lot, Ben Stein and Paul Krugman.

There's still time to cast your quick vote: Is the high price of gas causing you financial hardship?

Go to CNN.com/larryking. Tell us. While you're there, check out our video highlights, transcripts, text alerts and more.

We also have our special Alicia Keys guest commentary on AIDS in Africa. Psychic kids will be here tomorrow. It will be a great show. And Steve Carell on Friday night.

Time now for Campbell Brown and "AC 360."