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Is McCain out of Touch?; Tony Snow Dies
Aired July 12, 2008 - 22:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
RICK SANCHEZ, CNN ANCHOR: One of the largest bank failures in our nation's history. Who dropped the ball? Who was supposed to be watching these guys? How bad is it going to get? And what might be your loss? The effect on banks, credit, mortgages, the stock market. We're checking them all with insiders, those affected. And experts like Suze Orman and Ali Velshi.
With news of a run on a bank with Americans who can't get to their money until maybe Monday. This statement from John McCain's economic adviser seems even more out of touch.
(BEGIN VIDEO CLIP)
PHIL GRAMM, MCCAIN ECONOMIC ADVISER: We sort of become a nation of whiners.
(END VIDEO CLIP)
SANCHEZ: A nation of what?
(BEGIN VIDEO CLIP)
GRAMM: We sort of become a nation of whiners.
(END VIDEO CLIP)
SANCHEZ: Our political panel, left and right, take us through this.
I travel the country in search of future voters. Tonight, from the mouths of babes -- young Lutherans.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: We were there to deliver democracy, but now I think we should pull back.
UNIDENTIFIED MALE: The whole entire world is realizing that we're the only ones who are blind to what we're doing. So this needs to stop.
(END VIDEO CLIP)
SANCHEZ: Ingrid Betancourt' fellow hostages. What next?
Remember this guy? Whoops, hey, Mr. Ref, how about one for the road?
And this guy -- get out of my way.
We're full speed ahead. The news starts now.
Hello again, everybody. I'm Rick Sanchez. As we begin tonight, I want you to take a look at some video, which really goes right to the heart of the matter here. This woman is talking to one of our correspondents. She's wondering why her bank suddenly had shut down when she realizes one of its doors may have opened. There's a commotion. She runs off in the middle of the interview.
Now, what we're talking about tonight may end up being of the biggest bank failures in U.S. history, as we watch that again.
California-based IndyMac has been taken over by the Feds leaving customers without full access to their money until at least, Monday.
(BEGIN VIDEO CLIP)
ALAN SANDS, BANK CUSTOMERS: We have quite a bit of our funds there with my wife and I and my mom. So I knew the headquarters was down here. So I rushed down here and now they're closed.
RACHEL SACRAMENTO, BANK CUSTOMER: It is disconcerting that you believe that your bank is very strong.
(END VIDEO CLIP)
SANCHEZ: Disconcerting? Well, regulators say that most depositors are going to be fine because up to $100,000 of each account holder is insured by the FDIC. However, about 10,000 people will lose money up to $500 million worth according to federal regulators.
So how did this even happen in the first place? It happened because this bank was giving mortgages to people with little or no income or assets. It just figured the value of the home that they were getting a mortgage for would go up. It didn't. And then crash.
I want to begin with personal finance editor Suze Orman. And the idea that our government allowed this practice to continue and didn't stop it until it was too late.
(BEGIN VIDEO CLIP)
SUZE ORMAN, HOST, CNBC'S SUZE ORMAN SHOW: Are you joking with me? Like this is a revelation, that this has just happened? This has been happening for a long time. I mean, if you think about it, do you know where IndyMac came from? Do you know in 1985, they were part of Countrywide? Do you know that, Rick?
SANCHEZ: No.
ORMAN: And you know, for -- and the reason that they became part of Countrywide is that back then Countrywide was giving large loans out that they could not sell to Fannie Mae or Freddie Mac so they created this bank called IndyMac.
They came together that way. And then in 1997, they were so successful they spun them off to be their own entity. This has been going on for a long time. It is not just IndyMac. It was Countrywide. It was everything. Why wasn't anybody watching any of these people?
SANCHEZ: What you just describe is probably best described with the word irresponsible.
ORMAN: Oh, you're being nice!
SANCHEZ: But, Suze, shouldn't somebody in the government have been watching to make sure that this type of activity didn't take place?
ORMAN: Sure, they should have been watching. They should have been watching for a long time. But you know, they were kind of watching like -- oh, I see it, I don't see. Why didn't they want to see it?
They didn't want to see it, in my opinion, because they were making so much money. The banks were making money. The banks were selling these loans that were no good. They didn't have to worry about it. To the security companies, they were selling it to investors. Everybody was making money and everybody was driving which made the economy look like it was thriving, which made the administration look good.
Everybody was so happy except those who should have been watching. Now they're kind of crying about it. And Rick, it's really a shame. You know, everybody got mad at the Enron people, the WorldCom people. We took them to jail. We did all this. I don't know. I don't understand why the people that should have been watching and weren't watching and allowed this to happen aren't going to jail as well, if you ask me.
SANCHEZ: Are there agencies that do this? Who is it in the government -- by the way, just to go ahead and call them on it? What's the agency that's supposed to be checking this guy.
ORMAN: We have the office of thrift savings. The OTF, which is supposed to look at how is everything doing. Where were they when all of this was going on?
SANCHEZ: Let's look at this from a micro standpoint. My wife and I wake up this morning. And we're reading these headlines this morning and we're wondering, oh, my goodness, with all the money that we have in these different accounts and these different funds and the IRAs and the kids' college funds, is it possible that we could somehow be affected by something like this? And I bet you weren't the only ones asking that question today.
ORMAN: Well, you should be asking questions when you say you have money in funds, when you have money in retirement, when you have money for your kids. You should be asking not the question is your institution safe. You should be asking are the investments that my money is invested in, are those funds safe? Are they going down? Is the stock market going down? You know, how much time do I have to have everything recover?
What we're talking about here that you have seen happen, yesterday, today, what you see happen with Freddie Mac, with all these things, those are stocks with IndyMac Bank. That was a bank. It's where people put savings. They have their money there.
What we're talking about is when a bank goes under, is your money protected? Is it not? And if you have less than $1,000 in there -- yes, you're going to be protected. But there were 10,000 people that had more than $100,000 in a bank that has been in the news for a long time.
This is just no secret that this just happened overnight. This has been going on for a long time with this financial institution. So I have to say, what were they thinking?
(END VIDEO CLIP)
SANCHEZ: Right. Let's leave the conversation there. We're going to pick it up again because there is this part of the story as well. If the government has to bail out this bank, where is that money going to be coming from? And how much of it is coming from us and vis-a-vis, how much is it going to cost you, and how much is it going to cost me in the future?
Will the banks now increase their fees because they all have to come together to pay this off. Suze is going to explain this to us in just a little bit. That's another part of the story.
But first, we're learning as many as 90 other institutions may also be in some kind of trouble. And as you hear that, you're probably asking yourself, as I say it to you -- well, is my money safe right now? Right?
Freddie Mac stocks down, Fannie Mae stocks down.
Let's bring in our senior business correspondent Ali Velshi.
Ali, thanks for joining us. Let's talk about the immediate pain, first, my friend. Tell us who is going to get hurt by this. I mean, the guys who are going to get hurt by this right now.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: All right. Well, there are few people getting hurt. One, is the stock of IndyMac. We hit 28 cents after declining for a whole year. So anybody who invested in it would have seen that pain. But we're talking about people. Suze, brought up a good point. We're talking about people who had investments.
If you had more than $100,000 in a bank account or $250,000 in an IRA, you're a responsible investor. You've been saving all that money. The last thing you expect is that that money in a bank account is going to be at risk. But that's exactly what it is. There are 10,000 people who had more money -- up to 10,000 people who had more money in IndyMac in a deposit account that is insured by the federal government.
They're going to get the first 100,000 back plus half of the remainder. So if you have $150,000, you get 100 plus 25,000. Half of the extra 50,000. The remainder you might get if the government is able to sell that bank for a good amount of money.
So people who are being responsible and just saving their money, not risking it in risky investment are going to be the losers. That is what I think have people worried like you and your wife were talking about. Is my money safe even if I'm not being risky?
SANCHEZ: Hey, by the way, we are hearing that this was essentially a run on a bank. And, by the way, those words, run on a bank make a lot of people from a historic standpoint, a lot of old folks get real frightened about what's going on. And that it was caused by Senator Schumer's comments.
VELSHI: Yes.
SANCHEZ: Can you put -- reconcile that. Put the two together for us.
VELSHI: I'll give you the storyline. And I think it's a bit of a cop out to call it Senator Schumer. But we heard that comment yesterday. Here's what happened.
On June 26th, Senator Schumer had sent a letter to regulators, federal regulators and California regulators to say he's very concerned about IndyMac's balance sheet.
They had severe losses because they'd been giving loan to these no-income, no-job, no-asset verification needed loans to people where they thought the property value would go up. And he said, I'm fearful that if people -- I'm paraphrasing here. "I'm fearful that if depositors decide to take their money out of this account, it won't survive."
Well, you know, what? Word of those comments got out. And investors took out $1.3 billion from IndyMac. And by Tuesday, IndyMac had to report to the federal regulators, the office of thrift supervision that Suze was talking about, that we are no longer well- capitalized.
SANCHEZ: That's a run.
VELSHI: And that was the run. That was it. People win it. But I mean, I feel that if a United States senator's comments about concerns about a bank's financial health, 12 months after the rest of us knew that that bank was in financial problems. If that's what caused the bank to fail, I think the bank was in trouble.
I'm not sure that we can pin that on Chuck Schumer. But here's the danger, Rick. There are -- I think you mentioned this. There are 90 banks on the FDIC --
SANCHEZ: Yes. And we're down to about 10 or 15 seconds. Can you button that up for us? Who are these other banks?
VELSHI: They won't tell us. Because they're concerned that if we publicize those names, those people will have a run on their banks causing more banks to fail.
CNN is working on getting some sense of who those banks are. They're probably not the major banks, but there are banks that are in trouble and the FDIC is watching that.
It's not a need to panic, just make sure you don't have more than $100,000 in a deposit account as Suze said.
SANCHEZ: Ali Velshi. Author of "Get Rich, Sleep Well" and our guy when it comes to finances as well. Hey, Ali, thanks so much.
VELSHI: It's a pleasure.
SANCHEZ: We'll be talking to you again. Busted bank IndyMac. The only one? No, as we said and you just heard ail said, 90 other institutions out there may be in trouble. Personal finance expert Lynnette Khalfani-Cox talks.
She's going to be telling us whether we should be worried about this. There she is. She'll join us in just a sec. Stay with us. A lot of news on this. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back to the world headquarters of CNN. I'm Rick Sanchez. This is the story that's got so many people concern even if it's quiet concern. So are IndyMac's failures going to affect your bank account? And that's essentially what a lot of Americans want to know tonight.
We're talking about one of the largest and apparently most expensive bank failures ever. Here's what Suze Orman had to say about that.
(BEGIN VIDEO CLIP)
ORMAN: Well, the truth is it doesn't affect you as a taxpayer or really a depositor. The way the FDIC works is that when a bank goes under, hopefully they have about $53 billion in their little treasure chest. And hopefully what will happen is they will take over this bank and they will sell it to somebody else and get that money back.
If they don't sell it, then what happens is they have to also raise assessments on all the banks that are covered by FDIC so that those banks put in more money, so that in fact that little pot of $53 billion kind of stays right around there.
SANCHEZ: So won't those banks tend to want to raise their fees thereby affecting me next time I go in there and make a deposit or whatever?
ORMAN: Well, they're already raising their fees. They're already raising their interest rates on what they charge you. They're already raising every type of thing they can do to keep making more money because, not just because this one bank went under, it's because many of the loans that they lent out from the individual banks, those loans have gone under.
They're not getting that money back so they're going to try to recapture anything they can from the good depositors from the people that really are keeping that bank afloat.
(END VIDEO CLIP)
SANCHEZ: Well, the upshot of this is that many of the banks may have to be asked to pull more money so the FDIC will have a bigger lot to be able to distribute if other banks have this same situation.
And you know in the end, the banks will probably be asking us to divvy up with increases in some of the fees. That's the upshot on this.
Now, there's another side of this story that's very important tonight and it's about the mortgage side of this.
For that now, let's bring in Lynnette Khalfani-Cox.
OK, so there's a whole lot of people out there who have already gotten hurt by this thing. Before the news today, when they signed these mortgages, you know, essentially they really couldn't afford. They shouldn't had any business with to begin with.
Let's start there. Who are these people? Was it their fault or was it IndyMac's fault for getting themselves into this?
LYNNETTE KHALFANI-COX, PERSONAL FINANCE EXPERT: Well, you know, certainly one of the number one rules of finance -- personal finance is you got to sign on the dotted line and know what you're signing and read all the terms. Frankly, a lot of people didn't know exactly what they were getting into.
Some people didn't know that their loans had prepayment penalties for instance. But I think you also definitely have to point some of the blame here at the lender in terms of issuing loans that had levels of risk that were unnecessarily high.
We're talking those so-called ninja loans. You know, no income, no job, no assets, that kind of thing. Also, layers of risk in terms of the loans themselves. Adjustable rate mortgages, interest only loans, loans that had prepayment penalties. All of those add to the level of risk with those loans. So they've got to take responsibility for that.
SANCHEZ: Yes. And by doing that, they had many people going under and now as a result they're going under. It's a tumultuous effect. But where are we now? Because of this experience that we went through, is it now more difficult for people to go out there and try and get mortgages? Are banks scared? What's going on in the market?
KHALFANI-COX: There's no question that it's a tougher environment for consumers. And really what we found that's happened is that the mortgage meltdown that started in August 2007 has now become the credit crunch of 2008. And that's going to extend, I think for years to come frankly.
SANCHEZ: Years? Years?
KHALFANI-COX: Absolutely. Not only are banks more reluctant to lend to consumers, they're even reluctant to lend to one another. And so, that's why we're seeing not just what's happened with IndyMac, but we're seeing the problems that are going on with Fannie Mae and Freddie Mac. Their stocks are not off, you know, 75 percent, 80 percent or so.
So there's a contagion effect in terms of crisis of confidence. People are fearful at all levels. And that's translating into the policies and practices that a lot of these banks are taking on. And so, they're requiring higher credit scores. They're requiring bigger down payments. They're requiring everything to be more well- documented.
SANCHEZ: And you don't see this thing quelling for quite some time. Lynnette Khalfani-Cox, smart stuff. Smart stuff. Thanks so much for joining us. We appreciate your insight on this.
KHALFANI-COX: My pleasure.
SANCHEZ: On Monday, the Federal Reserve is expected to roll out a new set of rules to try and protect homeowners somehow. And you're going to find out about that.
Take a look at some of the lies mortgage lenders typically tell. You're going to see my entire interview with Suze Orman. Also, use our mortgage calculator to take the mystery out of any payments. You'll find it on cnnmoney.com.
Coming up now on LOFTV. That's The League of First Time Voters. They will inherit our mess. What do these young religious people think of it now?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: And the whole entire world is realizing that we're the only ones who are blind to what we're doing. So this needs to stop.
UNIDENTIFIED MALE: I don't see the purpose for so many people to die.
(END VIDEO CLIP)
SANCHEZ: These are young Lutherans, very young, speaking out on abortion, on gay marriage and on Iraq.
And the three Americans held hostage in a jungle for five years. They are tonight on the move again.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. Tonight, I want to tackle abortion, gay marriage and the war in Iraq. These are things that many Americans are afraid to discuss, right, because it gets pretty darn contentious when you bring these things up with your neighbors, doesn't it?
So, here's what I did. I traveled to Staten Island, New York to a Lutheran school and talked face-to-face with those among us who are most unafraid. Those who say pretty much what's on their minds. Young school kids. Here now, LOFTV.
(BEGIN VIDEOTAPE)
SANCHEZ (on-camera): What do you guys argue about in school than you talk to each other?
UNIDENTIFIED MALE: Religion for one thing.
SANCHEZ: You argue about religion. What about religion?
UNIDENTIFIED FEMALE: Most of the time we argue about like what the bible says as opposed to how people, like, their views upon it and --
UNIDENTIFIED FEMALE: Their lifestyles.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: With this ring, I thee wed.
UNIDENTIFIED FEMALE: With this ring --
(END VIDEO CLIP)
SANCHEZ: Many Christians in this country, who are very devout, say gay marriage is simply out of the question. Are they right?
UNIDENTIFIED FEMALE: We believe some religion affect your politics and everyone should have a personal choice.
UNIDENTIFIED MALE: And if they don't want to have gay marriages, then they just should marry a different sex and leave everyone else alone. Let them decide for themselves, what they want.
SANCHEZ: What does the bible say, Nick?
UNIDENTIFIED MALE: It says you shouldn't.
SANCHEZ: The bible says that marriage is between a man and a woman?
UNIDENTIFIED MALE: Yes.
SANCHEZ: It does?
UNIDENTIFIED MALE: It is very clear about that.
SANCHEZ: So a candidate who says he's for gay marriage, would you have a tough time voting for him?
UNIDENTIFIED MALE: Yes.
SANCHEZ: How about abortion? There's a very strong and very divisive issue.
UNIDENTIFIED FEMALE: It's very delicate. It is taking a human life, but I think it really does depend on circumstances.
UNIDENTIFIED MALE: I think it's their right to decide if they want to abort or anyone else. I don't think anyone else should decide that for them.
SANCHEZ: But many will say does any human being have a right to decide that they don't want that life form to be born?
UNIDENTIFIED FEMALE: That's why the matter is delicate.
SANCHEZ: It's delicate.
UNIDENTIFIED FEMALE: Because not everybody agrees.
SANCHEZ: Should this be a governmental issue, a political issue, a personal issue or a religious issue.
UNIDENTIFIED FEMALE: Each man his own.
SANCHEZ: To each his own?
UNIDENTIFIED MALE: They shouldn't really be able to decide for other people. They're against it then they just don't have to have an abortion.
SANCHEZ: So you think there's time when the choice should be made?
UNIDENTIFIED MALE: Yes.
SANCHEZ: Let's talk about the war. Let's talk specifically about the war in Iraq.
UNIDENTIFIED FEMALE: I don't believe that we should be fighting a war in Iraq.
SANCHEZ: Why not?
UNIDENTIFIED FEMALE: It's kind of like we're spreading hate. And at this point, we kill one person and just spread hate throughout their country. UNIDENTIFIED FEMALE: We were there to deliver democracy, but now I think we should pull back.
SANCHEZ: Why?
UNIDENTIFIED FEMALE: Because now we're just invading. And now, we can see that we don't actually need to be there.
UNIDENTIFIED MALE: And the whole entire world is realizing that we're the only ones who are blind to what we're doing so this needs to stop.
UNIDENTIFIED MALE: I don't see the purpose for so many people to die.
UNIDENTIFIED MALE: It does make us as Americans safer because it's keeping the terrorist population down. If we will withdraw and all major countries would withdraw, the terrorist population would rise.
UNIDENTIFIED MALE: We've stopped already one person who was threatening our country, but we still haven't destroyed the terrorist group. And they can still come back.
UNIDENTIFIED FEMALE: It's been five years and I don't think anything good has really come of it.
(END VIDEOTAPE)
SANCHEZ: From the mouths of babe. This election you can get the facts and have some fun. Join the League of First Time Voters. Different opinions coming from different sides at cnn.com.
You'll get accurate, easy-to-access information about voting as well. Check out cnn.com/league right now.
And you, too, can become a member and I may come by and pay you a visit.
Tonight, a CNN contributor and former White House press secretary losses his fight with cancer. And we, all of us, are remembering Tony Snow.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back. Tonight, our Ed Henry takes us through the final years of CNN contributor Tony Snow, who battled cancer while working in what is probably one of the most public places in the entire world. That is less than a minute away.
But first, three men, three American hostages finally went through three separate homes today, their homes. Ten days after they were plucked from a gunpoint in a Colombian jungle -- Keith Stansell, Mark Gonsalves and Thomas Howes left San Antonio military hospital and all returned to their homes in Florida. 5-1/2 years ago, the men, defense contractors, were kidnapped by leftist rebels in South America. Gonsalves told reporters, quote, "we're going to rest, we're going to unwind for about a month and a half."
And tonight we're also thinking about and fondly remembering a man who made a tremendous impact on broadcasting, on presidential politics, and on people he met both in and out of the spotlight. Me, included.
It was no secret that Tony Snow was very sick. Cancer. And today, at way too young an age, he died. You'll hear Tony Snow called many things -- dedicated, tough, smart, effective.
But the word most of his admiring news biz colleagues used to describe him is decent.
Here's CNN's Ed Henry.
(BEGIN VIDEOTAPE)
ED HENRY, CNN CORRESPONDENT (voice-over): White House aides knew for months that Tony Snow was privately battling cancer again, but news of his death still stunned them, especially Dana Perino, his successor at the podium.
DANA PERINO, WHITE HOUSE PRESS SECRETARY: I think we all wanted to believe that a miracle had happed, but he did take a turn for the worse. And we are all deeply saddened by it.
HENRY: At Camp David for the weekend, President Bush released a statement praising Snow's wit, grace and humor, adding, "All of us here a the White House will miss Tony, as will the millions of Americans he inspired with his brave struggle against cancer."
Former President George Herbert Walker Bush told CNN, he spoke by telephone with the president who was devastated.
FORMER PRESIDENT GEORGE H.W. BUSH: We, at first, is very stricken because he shares the same feeling of emotion about Tony that Barbara and I do. He was a dear, valued friend that went on to heaven.
HENRY: Snow's passing hit former colleagues in the television business just as hard, as they recall the devoted family man.
RICK DIBELLA, CNN SENIOR PRODUCER: I just hope they know how much an inspiration Tony was to everybody.
HENRY: On his final day at the podium, Tony Snow reflected on how much he enjoyed serving as President Bush's press secretary.
TONY SNOW: I love these briefings. And I'm really going to miss them.
HENRY: A former broadcaster, Snow had an affinity for the media. His background with FOX News and as a conservative radio talk show host prepped him for hand-to-hand combat.
SNOW: You're jumping topics here. So let me finish -- let me finish the answer, and then you come back, OK?
HENRY: He was in his element battling reporters in what quickly became known as the Tony Snow Show, full of theatrics.
SNOW: All right. I give up.
HENRY: Ups and downs in Iraq dominated his time at the podium with liberals pouncing on missteps such as when he was asked about bungled pre-war planning.
SNOW: I'm not sure anything went wrong.
HENRY: But compared to his predecessor, Scott McClellan, conservatives felt Snow was far more effective at delivering the president's message.
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: It's been enjoying to (INAUDIBLE) with you.
HENRY: His tenure however was overshadowed by a bigger battle. His valiant fight against cancer. When he started at the White House in the spring of 2006, Snow spoke movingly about his first bout with colon cancer.
SNOW: I don't want to be personal here but -- no, just having gone through this last year -- and I said this to Chris Wallace, it was the best thing that ever happened to me. It's my Ed Muskie moment.
HENRY: Robert Anthony "Tony" Snow grew up in Cincinnati. He was devastated when his mother, a nurse, died of colon cancer while he was in high school. He first made his mark as a conservative editorial writer for various newspapers. Cut his teeth in politics as a speech writer for the first President Bush, then made the transition to broadcaster first at CNN, later at FOX.
G. BUSH: Tony already knows most of you and he's agreed to take the job anyway.
HENRY: But the laughter slowed in March 2007, when Snow needed surgery to remove a growth in his stomach. It seemed routine at first, but then Snow called the White House with stunning news.
G. BUSH: He told me that when he went in and operated on him, they found cancer.
HENRY: Snow came back, but the strain was clear. He kept a positive attitude, playing with his band, Beats Workin, and sticking it out until September 2007 reveling in being part of a select few to hold this historic post.
SNOW: This job has been the most fun I've ever had. I'm sorry I have to leave it. HENRY: He had to leave to make more money for his family. He was popular on the lecture circuit and had just returned to CNN as a contributor.
SNOW: Thank you, Larry. Good to be here.
HENRY: He leaves behind his wife, Jill, and three children. In his final days, Snow told those closest to him, he felt like he had been hoisted on the shoulders of friend which helped him see life from a wonderful new perspective. Snow was only 53.
Ed Henry, CNN, the White House.
(END VIDEOTAPE)
SANCHEZ: What a life.
We are, quote, "a nation of whiners." Take that, IndyMac depositors. And many would ask, are you kidding me? The politics of a bad economy and really badly chosen words.
Also this story. You see this guy? He's a ref in a soccer game. Is he OK? Depends on what you mean by OK. He does get a standing O, by the way, from the crowd. I'm going to show you more of this. "Rick's Picks" straight ahead.
(COMMERCIAL BREAK)
SANCHEZ: The night in the aftermath of what may become the biggest bank failure in U.S. history, the words "a nation of whiners" seemed particularly insensitive. Wouldn't you agree? Especially since they come from the former chairman of the Senate Banking Committee.
John McCain's chief economic adviser, Phil Gramm, may have ruin. But what a really would have been a great week for McCain by implying we're only in a, quote, mental -- mental recession.
(BEGIN VIDEO CLIP)
PHIL GRAMM, JOHN MCCAIN'S CHIEF ECONOMIC ADVISER: We're in the mental depression. This is a mental recession. You just hear this constant whining, complaining. What about our lost in our competitiveness, America in decline. We've never been more dominant. We've never had more natural advantages than we have today. We sort of become a nation of whiners.
(END VIDEO CLIP)
SANCHEZ: By the way, McCain, embarrassed, immediately distanced himself from Gramm's comments. After all, he just spent much of this week explaining to many Americans how he really felt their pain.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Phil Gramm does not speak for me. I speak for me. So I strongly disagree. I believe the mother here in Michigan around America who is trying to get enough money to educate their children isn't whining.
(END VIDEO CLIP)
SANCHEZ: all right, not whining. By the way, he went on to say he was talking about leaders, not the American people with his whining comment. But, obviously, the damage had been done.
Democratic strategist Keith Boykin and Republican strategist Leslie Sanchez joining us now from Washington.
Let's talk about this a little bit. Gramm's ties to the McCain campaign had proven real controversial already. He is now a vice chairman of UBS. They are being investigated for helping Americans avoid taxes by placing money in offshore accounts.
Gramm also began advising the McCain campaign last year, while at the same time he was registered to lobby Congress on, you know, the mortgage crisis. So it begs the question, is he serving his candidate well, Leslie?
LESLIE SANCHEZ, REPUBLICAN STRATEGIST: Well, I think Senator McCain answered that question himself in the sense that he said, you know, Phil Gramm does not speak for him. And I think as much as people want to make of this issue, it fundamentally comes down to whether voters believe that this is somebody who reflects a stance in the McCain campaign. And that's not the case, clearly.
SANCHEZ: Well, should he cut him loose, Keith? Should he publicly come out and say -- look, this guy because of what he's done, because of what he's said, because of what his ties -- people have asked other candidates to do this. Would you?
KEITH BOYKIN, DEMOCRATIC STRATEGIST: Well, he has not cut him loose yet, which indicates that John McCain must still have some support for this guy. This is a guy who's been talked about as a possible secretary of the Treasury in the John McCain presidential administration.
SANCHEZ: Yes, yes. But let's be fair, to be clear, John McCain basically said this week that ain't going to happen. The only thing he might be is "ambassador to Belarus" quote, unquote.
L. SANCHEZ: Exactly.
BOYKIN: Yes. John McCain said that after he was embarrassed by this whole story once it erupted. But the reality is that it reminds people not just about Phil Gramm's weaknesses, it reminds people about John McCain.
John McCain is the guy who said -- admitted to the public that he did not know a lot about the economy. And then you have the guy who is his chief economic adviser who apparently doesn't know much about the economy either. That doesn't bode well for the American people. L. SANCHEZ: I would tend to argue, Keith, that what it does remind people of is Senator Barack Obama and his comments when he was talking about the, you know, rust belt states that are having true economic problems that they're bitter and they basically hang on to religion and guns.
I mean, I think that was very elitist. It was very insulting to a lot of people who are feeling economic pain. John McCain went out there with a strong economic message this week.
(CROSSTALK)
L. SANCHEZ: Put it in perspective, guys. He's talking from a global -- I'm talking about Phil Gramm. He's talking as a professor, not as a (INAUDIBLE).
SANCHEZ: No. You make a good point. And if you took away who he is and his past, I guess, quote, "baggage," it wouldn't have been a bad statement coming from an economist. From him, a guy who right now probably isn't doing too bad to say that, and to have the American people perceive that, probably not so good. You would agree, right, Leslie?
L. SANCHEZ: I agree completely, Rick, in that. I think it undermines the strong economic message that Senator McCain put forward this week. And fundamentally with these two candidates, one distinct difference.
Senator Barack Obama was the one making the statement about people being bitter. It was a candidate himself. John McCain move away. It wasn't him.
BOYKIN: Rick, can I respond to this.
SANCHEZ: Yes. But Mr. Boykin, you get the last work, sir.
BOYKIN: Leslie had mentioned this thing twice. And I think it's -- Barack Obama never talked about people having issues about the economy. John McCain is the guy who said he doesn't know much about the economy. John McCain is the guy who is defending George Bush.
He's the one who was oppose to George Bush's tax cut because he said they were tilted too much to the wealth, now he supports those same tax cuts. We have 81 percent of the public who are dissatisfied with the direction of the country. And John McCain is offering more of the same. Barack Obama is offering change.
L. SANCHEZ: What kind of change that big government program?
BOYKIN: Leslie, if you think you can convince people that John McCain is going to be the instrument of change when he's basically been in Congress for years and hasn't done anything to change, I don't think it's going to work.
SANCHEZ: Final question, final question, guys. Who won the week? Leslie, you start.
L. SANCHEZ: John McCain won the week because he stuck to a message that understood people who were hurting in their pocket books. He's moving ideas and solutions --
SANCHEZ: And he was able to distance himself from Gramm, right?
L. SANCHEZ: Exactly. He's a steward of the economy. He's going to move people forward. People understand that.
SANCHEZ: Keith, you get the last word again, my friend. Five seconds. Close this out.
BOYKIN: Obviously Barack won the week. The Obama campaign was effective in convincing the American public that he understands the issues of the economy, better than the other campaign. He is concern about those issues. He really is not out of touch in the way that John McCain. And he's actually offering real solutions, not some (inaudible) that John McCain is offering.
SANCHEZ: Got it. Keith, Leslie, you guys are great. Thanks for being with us once again.
BOYKIN: Thank you.
SANCHEZ: Always a good, lively conversation.
Can you imagine something called wheelchair rage? This guy will not stop when confronted, even if it involves a TV news camera. You'll see it for yourself when we come back.
(COMMERCIAL BREAK)
SANCHEZ: Boy, that's an interesting shot. It's me and more me. "Rick's Picks" time.
Let's take a look at some of these videos. And first thing, I want to show you is a fox. A woman called police in Norfolk, Virginia. She says there's a fox that's attacking my dog repeatedly. So the police come out and the fox that's usually is a very timid animal attacked. You'll see it right there.
Look right there where I got that. You'll see its image right there. There he is, bang, right there. He's going after the cop. Tries to bite her. Finally the cop, the police officer has to shoot the fox and put it down.
Let me show you this now. This is a referee and he is at a game in Belarus, by the way, where John McCain was thinking about sending Phil Gramm of all places.
Barely, he's very affected by the news because he has to be walked out of the stadium. Seems to be having a problem. Looks like it's his back. But then, he's a little wobbly, falls back again. They take him to the hospital and they found out that he was drunk as a skunk. And that's what was wrong with the ref.
Now, let's take you to another story. This one is in Missouri - Independence, Missouri. This is a guy who owns a bar. His employee said he hasn't paid them so he goes nuts when the reporter arrives.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Now, back off. You have just assaulted me. Back off. You back off right now. We are calling the police.
UNIDENTIFIED MALE: Get out of here.
(END VIDEO CLIP)
SANCHEZ: He won't take no for an answer. He goes after the video camera, he goes after the reporter and anybody else who is trying to besmirch his business reputation. We'll check back on it.
California burning. More National Guard troop on the frontlines. Fighting fires in California. We'll take you there as well as they try and keep the thing from jumping another highway. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: In California, they're talking about two big stories today. They're talking about this bank failure and also this fire that doesn't seem to want to quit. There are firefighters, hotshots, or smoke jumpers trying to stop the thing from crossing another highway.
The governor's called in 2,000 more national guardsmen, we understand, to try and see if they can control this thing.
Let's check with Jacqui Jeras. She can control this thing just by telling us what the weather is going to do, because if it's not windy, right, it helps.
(WEATHER REPORT)
SANCHEZ: Refusing to ignore a growing crisis. Well, that's one way to look at it. Somebody who is willing to go over the border to help those in need that nobody else seems to care about. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: I want you to meet somebody in El Paso, Texas, who refuses to ignore the poverty that she sees every day right across the border.
(BEGIN VIDEOTAPE)
MARIA RUIZ, CHAMPIONING CHILDREN: I was born and raised in El Paso. El Paso and Juarez, Mexico, they are known as the twin cities. But you cross over the border into Juarez, you notice the difference. In 1996, I came to the outskirts of Juarez. When I saw the poverty level that they were living in, with no water, no electricity, my world changed completely.
I'm Maria Ruiz and I cross the border to help people in Juarez. I decided to start the food program. I cooked and I cooked every day. And then I brought it over here. I fed approximately 1,200 kids on a daily basis for 3-1/2 years.
Now we collect the donations, we take furniture, food, toys, almost about anything.
We're ready to go.
Crossing the border involves a lot of work and time.
Do you have any food items?
I have crossed, oh, thousands of times. We give out whatever we have.
Buenos Diaz.
It's like a distribution center.
Gracias. (Speaking in foreign language). Gracias.
All of the work we do is part of the Families Ministry. It's a team effort, but regardless of whether they are Christian, it's equal for everybody. The kids are the ones that keep me going, but I don't consider myself a hero. I know I can do much more.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
SANCHEZ: We mention the death of Tony Snow today. A huge loss that's being felt at the White House and certainly beyond. We have another loss to tell you about. Dr. Michael DeBakey. He's been called the greatest surgeon ever. And that may not be an overstatement to say that. His life's work has saved lives of millions, millions of people. Here's why.
CNN's Michael Schulder.
(BEGIN VIDEOTAPE)
MICHAEL SCHULDER, CNN CORRESPONDENT (voice-over): By the time this film was shot in the 1960's of Dr. DeBakey making his morning rounds at the hospital, he already earned a global reputation.
Early in his career, DeBakey developed brand new types of surgery that saved the lives countless people with clogged arteries. He invented devices that keep dying hearts pumping longer so patients could wait for a heart transplant. He helped develop a Mobile Army Surgical Hospital known as MASH Units. President after president has sought his advice and Dr. DeBakey's talent became so recognized around the world that when the rich and powerful needed major heart surgery, like the Duke of Windsor, it was DeBakey they sought out.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I come to the maestro.
(END VIDEO CLIP)
SCHULDER: This April as the maestro of cardiovascular surgery received Congress' highest civilian award, the Congressional Gold Medal. He explained how his parents helped shape the man he would become.
DR. MICHAEL DEBAKEY, WORLD-FAMOUS CARDIOVASCULAR SURGEON: They urged us to get any book from the library at least once a week and read it. I came home one day and told them I found a very good book, but they wouldn't let you borrow. You have to read it in the library.
And my father wants to know what it was and I said it's called the Encyclopedia Britannica. He promptly bought us that. And both my brothers and sisters and I would rush through our lessons to get a little time with the Encyclopedia Britannica, because it was a new adventure and we enjoyed it so much.
SCHULDER: By time DeBakey graduated high school he had read the entire Britannica cover to cover. And by the time he died just two months shy of his 100th birthday, he had performed more than 50,000 surgeries and invented dozens of surgical tools that will be used for a long time to come. Man, he said, was born to work hard.
(END VIDEOTAPE)
SANCHEZ: If you know somebody who survived the heart condition, that's the man you thank right there. We'll miss him, as well as, Tony Snow. Good night, everybody. We'll see you tomorrow.
