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Issue Number One
John McCain in New Mexico, Discussing Iraq and Foreign Policy; Republicans' Anwr Trip; How Safe is Your Bank?; Protecting Your Money; Best Places To Live; First GITMA Interrogations at Guantanamo Bay, Seen by the Public
Aired July 15, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: ISSUE NUMBER ONE with Gerri Willis and Ali Velshi starts right now.
ALI VELSHI, CNN ANCHOR: A show of force from the Bush administration; President Bush, Fed Chairman Ben Bernanke, Henry Paulson all speaking out on inflation, energy prices, and the health of the banking industry. We are all over it.
A major U.S. automaker announces major cuts. What it means for the future of the industry and the future of the cars you drive and the absolute best place to live in the country for job opportunities.
Issue number one is the economy, a special edition of ISSUE NUMBER ONE starts right now.
Well, from the issue one headquarters to the CNNmoney.com Newsroom, we are all over the issues that matter to you. Hello and welcome to ISSUE NUMBER ONE. I'm Ali Velshi.
Some of the most influential people in our economy are on Capitol Hill today. Ben Bernanke, Henry Paulson, and strong words they're throwing around, strong enough to knock oil down some $9 a barrel. Well, the focus in this ever changing debate is about oil drilling. Should we do it? And will it really help?
And inflation is at its fastest pace in 27 years thanks largely to rising energy costs and food costs. But we begin with the big story of the day. President Bush is speaking out on the economy. Gerri, he had a lot to say for a while.
WILLIS: That's right. It was a very lengthy press conference and that's where we're going to start today. Addressing a number of economic topics for that press conference, let's go to Elaine Quijano. She's at the white house.
Elaine, you and I both listened in on this conference, what do you think were the important elements of it?
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Certainly the president is trying to strike a reassuring note here, trying to calm a jittery public that has seen headline after headline of bad economic news. The president trying to push back against those headlines today. At that news conference earlier this morning the president says he believes the fundamentals of the economy are strong, even though growth has been slow, it is growth nonetheless. The president also talks about Fanny Mae and Freddie Mac. He talks about those mortgage finance giants and the administration's plans to step in and help them if needed. The president also said, and this is in the wake of the IndyMac bank situation that people should not worry about their bank deposits that the federal government stands behind those deposits of up to $100,000. The president's bottom line overall message that the American public should not worry because his administration he says is on top of the situation.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I think the system basically is sound. I truly do. And I understand there's a lot of nervousness. And the economy's growing. Productivity's high, trade's up. People are working, it's not as good as we'd like. To the extent we find weakness, we'll move. There's one thing about this administration, we're not afraid of making tough decisions.
(END VIDEO CLIP)
QUIJANO: Yet one area that President Bush acknowledges the government does not have immediate control over, the area of gas prices. Saying once again as he said many times before, he doesn't have a magic wand. And of course he'd be able to wave and automatically see low gas prices. The president repeated his call, something he said yesterday, to get congress to go ahead and as he says do its part to lift the ban on offshore oil drilling. The president yesterday announced he would be lifting the executive branch's ban. And yet the administration at the same time acknowledging this is a long-term approach to this situation that it won't result in Americans paying less at the pump overnight.
Gerri?
WILLIS: Well, Elaine, the president really using that press conference as a bully pulpit to go after congress to back up his proposals to drill offshore, pass an appropriations bill. A lot going on in that press conference. Thanks for handling it for us. We appreciate it.
Now, over to Capitol Hill, Federal Reserve Chairman Ben Bernanke answering tough questions today. He's facing scrutiny after having to prop up Fannie Mae and Freddie Mac this weekend. CNN's Kathleen Koch is following it for us in Washington.
Kathleen?
KATHLEEN KOCH, CNN CORRESPONDENT: Gerri, so far most of the morning has been taken up with Chairman Bernanke's twice a year economic assessment to congress. And just briefly the headline from that. He says that the housing finance crisis, the spiraling energy costs will continue to remain a drag on the U.S. economy for the remainder of the year. But certainly during his testimony this morning, the issue of the federal government bolstering Fannie Mae, Freddie Mac. That has come up also, the failure last week of that bank. I'd like to show you one exchange where one senator asked Bernanke whether consumers should be worried about their banks.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Here in the senate that you believe as chairman of the Federal Reserve that our banking system is stable and strong?
BEN BERNANKE, FEDERAL RESERVE CHAIRMAN: Our banking system is well capitalized. Came in with strong capital, we are watching the situation very carefully. My concerns have turned more -- have turned less on the solvency of these institutions and more on the ability to extend the credit that our economy needs to keep growing.
(END VIDEO CLIP)
KOCH: Another senator just a few minutes later, conservative Jim Bunning of Kentucky took aim squarely at the new plan announced Sunday night, the federal plan to help support Fannie Mae and Freddie Mac.
(BEGIN VIDEO CLIP)
SEN. JIM BUNNING (R), KENTUCKY: The treasury secretary is now asking for a blank check to buy as much Fannie and Freddie debt or equity as he wants. The fed purchased a Bear Stearns assets was amateur socialism compared to this. And for this unprecedented intervention in our free markets, what assurances do we get that it will not happen again? Absolutely none.
(END VIDEO CLIP)
KOCH: Treasury Secretary Henry Paulson will be testifying later on this afternoon. And just a few minutes ago, top house republicans, house republican leader John Baynor put out a statement saying basically before they give an OK to any kind of federal plan to help support Fannie Mae, Freddie Mac, they want to have hearings because they say quote important questions must be answered before we -- they say it would be quote irresponsible to do otherwise.
Back to Gerri.
WILLIS: Well, a real full court press today from the administration. The FDIC chairman in front of television cameras, Bernanke, the president, everybody getting in on the act. Kathleen Koch, thank you for covering it for us.
VELSHI: How does the near failure of Fannie Mae and Freddie Mac play into politics? Eamon Javers is a financial writer from Politico.com. He's joining us from Washington.
Good to see you. Kind of mixed messages we've been getting for the entire weekend. We heard the federal government saying they will step in to loan the Freddie Mac and Fannie Mae money to buy the stock in the company if necessary. Now we're hearing President Bush saying we were sort of laying the ground work. We don't necessarily think that's likely to be the case. What's going on here with Freddie and Fannie?
EAMON JAVERS, FINANCIAL CORRESPONDENT, POLITICO.COM: We've got a moment of drama for the national economy right now. This is a high stakes game. Freddie and Fannie are really sort of the panic buttons of the economy. If they were to fail, it could be a wipe out for the economy around the world. So policymakers know that. They're doing everything they can to step in. And if you look at what president Bush was trying to do this morning, he was trying to thread a difficult needle by saying on the one hand the economy is sound. He wants to talk up the economy, but he doesn't want to appear out of touch for voters. So he has to talk about the softening of the economy. On the other hand, he has to say we are riding to rescue. Keeping it from happening and worsening. Even as he saying the economy's not so bad. He's got to send several mixed messages out there. It's very hard to do politically because you're talking to so many different audiences and a slightly different message for each one.
VELSHI: We're all going to hear it. We should tell you, Eamon, we're standing by to hear John McCain speak, Barack Obama spoke this morning about policy. They're going to be talking about the economy. Any big differences between where they stand on what should be done to help Freddie Mac and Fannie Mae?
JAVERS: Well, both of them are basically supportive of what the white house has done so far. The big difference for both of them is in tax cuts going forward and long-term financial planning for the U.S. economy. They have a very different approach there. But you're going to not find that many top policymakers at the national level who are saying this is a real mistake. You're going to find policymakers who say that the move they made on Sunday night was a good one and then you will hear some smaller minority voices saying, well, wait a second, what about the moral hazard here. What about the problem of incentivizing banks to make bad decisions in the future?
VELSHI: Rescuing people who may have made bad decisions?
JAVERS: That's right. The question is now we've decided Fanny and Freddie are too big to fail, and we decided Bear Stearns is too big to fail. Who isn't too big to fail? The speculation in Washington is I can tell you, a lot of these independent regional banks are viewed as not too big to fail and that the government might let some of those fail. We might see a wave of failures of smaller regional banks. That could be unsettling for voters and consumers, as well.
VELSHI: And later on in the show, we're going to discuss where you can put your money so it's safe in case a bank you have money in fails. Eamon Javers, good to talk with you. Thanks for being with us.
JAVERS: Thanks a lot.
WILLIS: We're going to get more into the debate of offshore oil drilling, looking at both candidates and where they stand on the issue.
Plus rising inflation, the fastest in 27 years. We'll tell you why.
And just how safe and secure is your bank? We're going to show you how to check that out.
We're all over issue number one right here on CNN.
(COMMERCIAL BREAK)
WILLIS: We're standing by to get into the meat and potatoes of John McCain's speech in Albuquerque, New Mexico, about Iraq and foreign policy. In the meantime, we want to talk to Dana Bash, part of the best political team on television, about what John McCain's expected to say and what Barack Obama was talking about earlier today.
Hi, Dana.
DANA BASH, CNN CORRESPONDENT: Hi there Ali. It's really interesting, actually, because the McCain campaign decided to move up this discussion. He's about to have about Afghanistan because of the fact that Barack Obama in the "New York Times" yesterday and of course as our viewers in the next hour talking about his plans for Afghanistan now. And one of the things that Senator McCain is going to do off the top is basically mock Senator Obama in a way that some of Senator McCain's surrogates did yesterday for even giving the plans and his plans for Afghanistan and Iraq before he has ever set foot in either of those countries to talk to some of the commanders on the ground. That's first things first in terms of the politics.
The other thing Senator McCain is going to do in a minute here is talk about his policy for Afghanistan. What he is going to suggest is militarily what he will do as commander in chief is take what he calls the lessons of success in the surge of Iraq and apply it to Afghanistan. And that means not just increasing the number of troops as Senator Obama suggested, but doing it in a way that makes sense in terms of engaging the local community and engaging some of the local leaders, as well. That's what we're going to hear from Senator McCain in a short while.
WILLIS: We're going to want to get some analysis from you. Let's go to Albuquerque, New Mexico where Senator McCain is discussing Iraq and foreign policy.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: What we need to do to get our economy growing again, create jobs and reduce our dangerous dependence on foreign oil. I want to talk about all of those things with you.
But there's another urgent issue at this moment that I want to address before I take your questions. Which I know concerns you because brave Americans and brave citizens for the great state of New Mexico are risking their lives right now to deal with it.
Over the last year, Senator Obama and I were part of a great debate about the war in Iraq. Both of us agreed that the Bush administration has pursued a fail policy, a failed policy there and we had to change course. Where Senator Obama and I disagreed fundamentally was what course we should take.
I called for a comprehensive new strategy, a surge of troops and counter insurgency to win the war.
Senator Obama disagreed. He opposed the surge, predicted it would increase sectarian violence and called for our troops to retreat as quickly as possible. And as recently as September 13th, in January of 2007 and I quote him, quote, we cannot impose a military solution on what was effectively become a civil war. And until we acknowledge that reality, we can't send 15,000 more troops, 20,000 more troops, 30,000 more troops and then he went on to say, I don't know any expert on the region or any military officer that I've spoken to privately that believes that that is going to make a substantial difference on the situation on the ground.
Now maybe that's because he didn't ask for it and sat down for a meeting with General Petraeus. Maybe because he only made one trip to Iraq and that was long before the surge began. And maybe it's because he was competing for the nomination of the Democratic Party.
But incredibly today, he goes on to say today, "I had no doubt we would see reduction in violence with the surge." My friends, flip- floppers all over the world are enraged. That, I mean -- I mean -- it gives new meaning, gives new meaning.
So, my friends, this is a very significant differences of opinion that we had and it's pretty clear that Senator Obama is not -- is directly contradicting the statements that he made concerning the surge and the war in Iraq for a long period of time. And today we know he was wrong. The surge has succeeded. And because -- and because of its success, the next president will inherit a situation in Iraq in which America's enemy's on the run and our soldiers are beginning to come home.
Senator Obama's departing soon on a trip abroad that will include a fact-finding mission. I note that he's speaking today about his plans for Iraq and Afghanistan before he's even left. Before he's talked to General Petraeus, before seeing the progress in Iraq, and before he has set foot in Afghanistan for the first time.
In my experience, and I've traveled a lot around the world, usually at your expense. In my experience, fact finding missions usually work best the other way around. First, you assess the facts on the ground, then you present a new strategy. So this is certainly somewhat of a departure from certainly what I've usually done.
My friends, the situation in Iraq is much improved and another test awaits whoever wins the election. And we know it's the war in Afghanistan. The status question is not acceptable. Security in Afghanistan is deteriorated, and our enemies are on the offensive.
From the moment the next president walks into the oval office, he will face critical decisions and crucial decisions about Afghanistan. Senator Obama will tell you we can't win in Afghanistan without losing in Iraq. In fact, he has it exactly backwards. It is precisely the success of the surge in Iraq that shows us the way to succeed in Afghanistan. It's by applying the tried and trued principles used in the surge, which Senator Obama opposed, that we will win in Afghanistan. With the right strategy and right forces, we can succeed in both Iraq and Afghanistan and they are not disconnected. Success breeds success. Failure breeds failure.
I know how to win wars; I know how to win wars. If I'm elected president, I will turn around the war in Afghanistan just as we've turned around the war in Iraq with a comprehensive strategy for victory. I know how to do that.
That strategy will have several components. Our commanders on the ground and Afghanistan say they need three additional brigades. Thanks to the success of the surge, these forces are becoming available and our commanders in avenue began avenue Afghanistan must get them. It's not enough to prevail. In 18 months that Senator Obama has been campaigning for the presidency, the number of NATO forces in Afghanistan has already almost doubled from 35,000 in January to about 53,000 today. Yet security has still deteriorated.
What we need in Afghanistan is exactly what General Petraeus brought to Iraq. A nationwide civil military campaign that is focused on providing security for the population. Today, no such integrated plan exists. When I'm commander in chief, it will. There are, of course, many differences between Afghanistan and Iraq, which any plan must account for.
But as in Iraq, the center of gravity is the security of the population. The people must have security. The good news is that our soldiers have begun to apply the lessons where U.S. forces are concentrated. These efforts, however, are a two-piecemeal. The work of innovative, rather a strategy for the entire country, in particular, the U.S. needs to reengage deeper in southern Afghanistan, which is the heart land of the Taliban.
One of the reasons there's no comprehensive campaign plan for Afghanistan is because we've violated one of the cardinal rules of any military operation, which is unity of command. Today there are no less than three different American military combatant commands operating in Afghanistan as well as NATO. Some of whose members have national restrictions on where their troops can go and what they can do. That's no way to run a war. The top commander in Afghanistan needs to be just that. The supreme commander of all coalition forces.
As commander in chief, I'll work with our allies to ensure command. A successful counter insurgency requires more than military force. It requires all instruments of our national power and that military and civilian leaders work together at all levels, under a joint plan. Too often in Afghanistan, this is not happening. What we need is to build the same kind of relationship that exists between General Petraeus and Ambassador Crocker that they forged in Iraq supported by the best talent in the U.S. government and the resources necessary to prevail.
Unity of command is also a principle I will bring to Washington. Too often, too often even as American soldiers and diplomats cooperate in the field, their superiors back home have been squabbling. Last year, the Bush administration appointed a war czar responsible for Iraq and Afghanistan. Afghanistan is sufficiently important that a separate Afghanistan czar is need. I'll appoint a highly respected national security leader based in the white house reports directly to the president whose sole mission will be to ensure we bring the war in Afghanistan to a successful end.
Everyone knows the United States increased the number of soldiers in Iraq last year. What's well-known and what is well-known is that increase. What's less well-known is the Iraqi surged with us. Adding over 100,000 security forces to their measure, to their ranks. It's time for the Afghans to do the same thing. The Afghan army is already a great success story. It's a multi-ethnic, battle tested fighting force. The problem is that it's too small. With a projected strength of only 80,000 troops. For years the Afghans have been telling us they need a bigger army and they are right. We needed to at least double the size of the Afghan army to 160,000 troops. The cost of this increase should not, however, be bourn by American taxpayers alone.
With security in Afghanistan and the drug issue is the world's problem and the world should share the cost. We must work with our allies to establish an international trust fund to provide long-term financing for the Afghan army. We also need to increase our nonmilitary assistance for the Afghan government with a multi-front plan for strengthening its institutions, the rule of law and the economy in order to provide a substantial, sustainable alternative to the drug trade, getting control of narcotics trafficking is central to our efforts in Afghanistan.
Alternative crops must be able to get to market and traffickers must be arrested and prosecuted by enhanced special courts. We should agree on specific governance and work with them closely so ensure they are met.
Just as we've worked over the past 18 months to stabilize Iraq, by bringing together its neighbors, this kind of diplomacy is just as important for Afghanistan. The violence there has many causes, but chief among them is the fact that Afghanistan is treated by some regional powers as a chess board, on which to pursue their own ambitions. I will appoint a special presidential envoy to address disputes between Afghanistan and its neighbors. We must turn Afghanistan from a theater of rivalries into a commons for regional cooperation.
A special focus of our regional strategy must be Pakistan. As you know the political situation in Pakistan is very unsettled. And terrorists today enjoy sanctuary. This must end. We must strengthen local tribes in the border areas who are willing to fight the foreign terrorists there. That's the same strategy that we use successfully in Anbar and elsewhere in Iraq. We must convince the Pakistanis that this is their war as much as it is ours. And we must empower the new civilian government of Pakistan to defeat radicalism with greater support for development, health, and education.
Senator Obama has spoken in public about taking unilateral military action in Pakistan. In trying to sound tough, he's made it harder for the people who support we most need to provide it. I won't bluster, and I won't make idle threats. But understand this, when I am commander in chief, there will be nowhere the terrorists can run and nowhere they can hide.
And I want to assure you, I want to assure you, you can have complete confidence that I will get Osama Bin Laden and bring him to justice. I will do that. I will do that. For the crimes he's committed against the people of this nation. And let me conclude by reminding you that in wartime, judgment, and experience matter.
In time of war, the commander in chief doesn't get a learning curve. If I have that privilege, I will bring to the job many years of military and political experience, experience that gave me the judgment necessary to make the right call in Iraq a year and a half ago. I supported the surge because I believed it was the only realistic chance to reverse the disaster our previous strategy had caused and the right thing to do for our country. And although events have proven me right, my position as you may recall was not very popular at the time. And I risked my own political ambitions when I took it.
When I tell you I will put my country's interests, your interests before party, before any special interest, before my own interests, every hour of every day I'm in office, you can believe me because for my entire adult life, in war and peace, nothing has ever been more important to me than the security and well-being of the country I love.
Thank you for being here today. And now I'd like to respond to questions or comments that you might have. Thank you so much. Thank you. Thank you very much.
So if you'll just raise your hand and I will ask someone to come with a microphone.
And you first, sir, in the back. And we have -- we have some work release program people here with a microphone. So if you'll -- I hope you'll be patient. Thank you.
QUESTION: Good morning and God bless you.
MCCAIN: Thank you.
QUESTION: The biggest problem on most people's minds right now is the gasoline prices that keep escalating. And it appears that as Americans we have no power. We have no ability to overcome it. But I'm wondering what you would think of this kind of a plan.
If we first list the people who are selling us gas, that are doing us harm, and I'm going to use Citgo and Hugo Chavez as an example. And then we list the gas companies that are helpful to us, like Valero. It's American-owned, American refineries, American people. What would be wrong with telling the Americans the good list and the bad list and having us buy our gas from those that help us and not buying gas from those that hurt us. It would be the golden rule. He who has the gold rules. We have the money. We're buying the gas. It's about time we let them choke on their own oil. What do you think?
MCCAIN: I think you're right. I think that the American people are beginning to understand more clearly that this huge transfer of $700 billion a year of your money is one of the greatest transfers in wealth in history. And it is a national security issue, my friends. It's an environmental issue. It's clearly an economic issue.
But we can't afford this as far as our national security is concerned. That money goes -- you mentioned a couple of them. Venezuela. Some other countries that are clearly not our friends and there is compelling evidence that some of that money ends up in the hands of terrorist organizations. So it is a national security issue. And I would be glad to identify them. Although the American people, who we contend sometimes to underestimate, have figured a lot of this out.
So what do we need to do? I think the best way to show these countries that we're transferring this wealth to is stop transferring it, become -- we can become energy independent. My friends, we can do this and we can do it with wind and tide and solar and nuclear and cars that have alternate fuels with hydrogen, with hybrid, with flex fuels.
My friends, I just want to mention to you one area that I think -- a couple areas. One, offshore drilling. If the states want to, we should be drilling right now in places that are off our shores. We should be doing it right now. Senator Obama opposes offshore drilling. I think if the states want to drill off their coast, we should do it and do it immediately.
And by the way, in Florida, the governor of Florida has said he thinks it's a good idea. In California, as I -- Governor Schwarzenegger thinks it's not a good idea. I would remind you that off the coast of Louisiana and Texas, they both had hurricanes that did not cause any real difficulty. So the environmental side of it, I think, is pretty well OK. But we need to do that.
But the other thing I want to talk to you about a second is nuclear power because we need -- we all agree . . .
VELSHI: All right. We're going to continue to monitor John McCain's speech in Albuquerque, New Mexico. He's taking questions from the audience now and he's -- we're talking about energy. We've got that and so much more right now.
This is a special edition of ISSUE #1. A lot of matters we want to talk to you about, about energy, about banking, about the economy right now and how you can protect yourself from what looks like a very, very shaky situation. Stay with us. We're watching ISSUE #1, right here on CNN.
(COMMERCIAL BREAK)
VELSHI: Well, 11 Republican House members are planning a trip this weekend. They'll visit the Arctic National Wildlife Refuge in Alaska and the National Renewable Energy Laboratory in Golden, Colorado. They're calling it the American Energy Tour. One person taking that trip is joining us now from Washington. Representative Michele Bachmann is a freshman from -- she's a House Republican from Minnesota.
Thank you for being with us today. I should tell you, I'm hoping to join you on that trip this weekend. We're still trying to work that out. But what is it you're planning on learning when you get up to Alaska?
REP. MICHELE BACHMANN, (R) MINNESOTA: Ali, we'll love to have you on the trip with us. And what we're hoping to do is show people in the United States that contrary to popular belief the ANWR region is actually one of the best places in the country to go ahead and drill and find the oil that America needs so badly right now.
VELSHI: What's the issue -- how come it's just you Republicans? Why no Democrats on this trip?
BACHMANN: Good question. We'd like to know. We would love to have this be a bipartisan delegation. Our strategy of House Republicans is an all of the above strategy. We believe in accessing all of America's great, rich energy resources, which is why we're going, not only to ANWR, but also to the National Energy Renewables Laboratory in Golden, Colorado. America is sitting on a treasure- trove, a variable (ph) treasure-trove of energy resources. We want to make sure that all of those resources are brought online so the American people can get back to paying $2 a gallon gasoline again. It's very possible.
VELSHI: You really think that's possible? You think that's likely?
BACHMANN: Oh, sure. Oh, sure it's possible. We are the Saudi Arabia of oil, the Saudi Arabia of natural gas, of coal, of wind, of solar, of all of the above. That's the great news. Our problem is not a famine of energy, it's a lack of will right now in the Democratic controlled Congress, in order to bring these energy resources online. We can do this. As a matter of fact, I just introduced a bill in Congress last week that would fast-track the permitting so that not only can we access these resources, but we can do it immediately.
VELSHI: OK. Let's talk about the concerns that many people have when they talk about ANWR, or many other things, and that is the environmental impacts of doing that. Right now I mean we looked at -- the images we see of ANWR are pristine land and animals and things like that. What do you have to say about that?
BACHMANN: Well, ANWR is actually in complete darkness many days of the year. Also, it's important for people to know that there are no trees in ANWR. There couldn't be a more perfect area to drill upon. As a matter of fact, the size of the area that would be drilled is the size of a postage stamp on a football field. This is a perfect area to access the resources.
Plus, it's in very close proximity to the current Alaska pipeline that's already been built. And that pipeline is only at 50 percent capacity. We could fill that pipeline, bring down the prices at the pump, and in very short order, our goal by accessing all of the above strategy for American energy solutions for American energy independence is to get Americans back to paying $2 a gallon of gasoline or less. That's our goal.
VELSHI: Well, that's -- the reason why I'm so incredulous about that is the idea that we are not responsible for the growth in oil demand in the United States. I mean the fact is, U.S. demand is relativity flat over the last few years and probably predicted to go down a little bit. But India and China and Russia and those places are all growing in their demand. Are we even going to be able to influence the price of oil just by drilling for more?
BACHMANN: Well, the way that we can impact the price of oil is by increasing American sources of supply, which we have an abundance. If we do that, then we can be dependent on our own supplies and we are not dependent on world supplies. We're in actually a very good place in America because we can open up all these new areas so we can bring down the price.
This is a very good thing. When we are now 60 percent dependent on foreign sources of energy, we can turn that equation and become American energy independent. And that's what we hope to do on this trip, Ali, is show for the American people the great bounty that we have so we can bring down the price at the pump fairly quickly.
VELSHI: Representative Bachmann, thank you for joining us. Hope we can join you on that trip. And if we can't, make sure you send me a postcard.
BACHMANN: We'll do.
VELSHI: All right. Thanks.
WILLIS: That was a nice invitation.
Well, when it rains, it pours. Just out from the Labor Department, inflation. Growing at the fastest pace in nearly 30 years thanks to soaring prices at the pump and supermarkets. Wholesale prices surged by nearly 2 percent last month. And that is the biggest monthly rise since last November. Over the past 12 months, wholesale prices are up 9.2 percent. And that is the largest year-over-year rise since June 1981.
Also, retail sales edged up lower than expected last month, increasing by 0.1 percent. That's attributed to the sharp fall in sales of cars and trucks.
And big changes at a big American automaker. We'll tell you what it means overall for the auto industry and the cars you drive. And having a job is important. We'll tell you -- it's obviously important. We'll show you the absolute best places to live in the country for jobs.
You're watching ISSUE NUMBER ONE.
(COMMERCIAL BREAK)
VELSHI: Very big changes announced at GM this morning. The plan to save $15 billion by 2009. That includes slashing 20 percent of salaried job cuts, eliminating health care coverage for U.S. salaried employees and doing away with discretionary cash bonuses for executives. Earlier today I spoke with Bob Lutz. He's the vice chairman of General Motors, about rumors of GM's potential bankruptcy.
(BEGIN VIDEO CLIP)
BOB LUTZ, VICE CHAIRMAN, GENERAL MOTORS: There has been a lot of speculation on Wall Street among analysts about the possibility of bankruptcy, which we have vehemently denied. Because we are in very tough times, with a difficult economic situation and a shift away from trucks to very small passenger cars, we do face some near term liquidity problems.
The United States market is going to shift into a direction, a product portfolio, that's more like Europe, and Asia, and Latin America. And for General Motors, frankly, that's not a problem because we have a full portfolio of small four-cylinder cars that we produce in Asia, that we produce in Europe, that we produce in Latin America and all we're going to really have to do is make our North American portfolio look more like the portfolio we produce in the rest of the world.
(END VIDEO CLIP)
WILLIS: That was Bob Lutz, the vice chairman of General Motors.
The FDIC takeover of IndyMac will help a lot of folks. Just how do you know if your bank is in healthy financial shape? We're joined now by West Palm Beach friend Greg McBride of bankrate.com.
Greg, great to have you here.
This is a question I am getting all the time. How do I know if my bank is safe? We saw IndyMac go belly up. Nobody knew it was going to happen. People really concerned about that. How do I know if my bank is safe?
GREG MCBRIDE, SENIOR FINANCIAL ANALYST, BANKRATE.COM: Well, Gerri, let's start with who really needs to be concerned with that question in the first place? If you're a depositor and you have an amount on deposit with the bank that's fully covered by FDIC insurance, that's $100,000 on most accounts or $250,000 on retirement accounts, if you have less than that on deposit with the bank, whether or not the bank fails is not your worry. That's the bank's problem, not your problem. So you really don't have to be concerned with it because you're fully protected.
The people that really need to be concerned about this are those that have more money on deposit than what Federal Deposit Insurance covers. And I think the answer there isn't necessarily to worry about the health of the bank, it's how do I move the money around or retitle the accounts so that I've fully protected by FDIC insurance? That's really the goal. If you're putting money into conservative investments, it makes no sense to expose yourself to the risk of a bank failure.
WILLIS: All right. Well, let's drill down there a little bit. How do you retitle those accounts? Is it as simple as having some joint accounts and some single accounts?
MCBRIDE: It's very much that way. For example, if you had $150,000 in an individual account, you have a $50,000 exposure there because not all that money's insured. What you could do is move that money into a joint account with a spouse and now suddenly you've lifted your coverage ceiling without even having to take money out of the bank. You can actually shield more than $1 million under one roof just by titling accounts differently. So, you know, this isn't something that, well, if you're just over the limit, it's automatically move money to another bank. You can keep it at the same place if you like, you just have to title the accounts differently.
WILLIS: Now we should mention on your web site you do have safety and soundness ratings on banks that are very easy to read, very easy to understand. That's bankrate.com.
Let's get you to another area here for just a second. What is safe now in a bank? And what do the regulations -- what do the provisions for insurance extend to? CDs? Stocks? Bonds? Where is the safety here?
MCBRIDE: Well, the safety pertains to bank deposit products. So certificates of deposits, CDs, bank money market accounts, savings accounts, checking accounts. Your stocks, your bonds, other investments are not protected from investment loss. That's a critical difference there. If you have a brokerage account, you have coverage should the brokerage fail, but that does not protect you from investment loss. And I think it's important that investors understand the distinction, if you're putting money into a bank deposit product, you're fully protected in the event that the bank should fail as long as you stay beneath that FDIC limit.
WILLIS: All right, the devil's in the details, but great job explaining them. Thank you so much, Greg McBride.
MCBRIDE: Thanks, Gerri.
VELSHI: Well, there's so much going on today. Oil, General Motors, President Bush, Bernanke talking at Congress, Treasury Secretary Hank Paulson, oil drilling. We've just been talking about it all. And on top of that, by the way, the dollar is dropping to new record lows, which means my vacation's canceled. So I have a lot of time on my hands. Let's bring in the CNN Money team, Poppy Harlow, Steve Hargreaves and Paul La Monica. They cover this stuff every day for CNNmoney.com.
You know, there's a lot of things going on. Paul, I want to start with you. We've heard from the president this morning, Ben Bernanke had testimony to Congress, Henry Paulson. There seems to be a big, solid, strong front sort of trying to assure people and the markets that everything is OK despite how strange things look. Right now we still haven't turned positive on stock markets. Is the message not working?
PAUL LA MONICA, EDITOR AT LARGE, CNNMONEY.COM: Well, I mean, we were down almost a lot more. We were down over 200 points earlier in the day. So I think the message -- I don't know if the message is working per say. I think what we've had is oil coming off of its highs is the big reason why stocks have rebounded. But as you point out, Paulson, Bush, and Bernanke are all trying to reassure people that Fannie and Freddie will hopefully be safe. That your bank is safe. But I think there's a lot of skepticism right now.
VELSHI: Oil took a big drop earlier today, Poppy. I was just speaking to a congressman from your home state about a trip to ANWR and new drilling, President Bush really pushing on the idea of drilling for more oil offshore. It seemed to have some impact on the price of oil today.
POPPY HARLOW, CNNMONEY.COM: Yes, I mean, oil fell $10 at one point. Right now it's down $7. Right around $138. But it doesn't say much because there's such volatility in the crude futures market. I mean it could bounce right back up tomorrow, you know. But the market really fell this morning on those weak economic numbers. Inflation soaring more than expected. People not buying things. I mean retail sales were only up 0.1 percent. That means people are not going to the store. They're not buying clothes. They're not buying expensive groceries and that kind of that. That hurt the market a little, turnaround (ph) here on oil. But, still, you never know.
VELSHI: Steve, are we getting any traction on this oil discussion because it does seem like Democrats and Republicans are just going in sort of opposite directions right now. It would make it easy to vote for somebody in November because you'll have real choices but we don't seem to be getting any closer on agreement about how to deal with energy.
STEVE HARGREAVES, WRITER, CNNMONEY.COM: No, the Democrats are still calling for the strategic petroleum reserve to be opened up.
VELSHI: Which Bush said today not on the table.
HARGREAVES: Right. He says it's, you know, it's our insurance policy essentially. And Bush is still calling for more drilling off the east and west coast and up in Alaska. He reiterated that call again today in his speech and he lifted his own personal ban on it and now he's waiting for Congress to lift their ban.
VELSHI: All right. Well, we've got lots to talk about. We will continue with this panel tomorrow again. Thanks for making it clear for us. And I want to tell our viewers, go to CNNmoney.com when you want to know about these topics because these folks are on that all the time.
Gerri.
WILLIS: Coming up, the absolute best place to live in this country for jobs. The inside scoop is next.
You're watching ISSUE NUMBER ONE.
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WILLIS: OK, yesterday we brought you the best places to live. And today the best places to make a living. Back with us now, Donna Rosato from "Money" magazine.
Donna, great to see you.
DONNA ROSATO, MONEY MAGAZINE: You too, Gerri.
WILLIS: All right. Let's start with, how do you come up with these numbers anyway?
ROSATO: Well, we use the historical data. We look at the places that had the most job growth from 2000 to 2007. And these are the places that really stood out. And we looked at it by county, not just by city.
WILLIS: Al right. OK. So Tooele County in Utah, growth of 123 percent. Are you kidding me?
ROSATO: I know. It's a little skewed because it's a small county. But it's got commodities. It's big mining area,. A huge copper mine. It's got defense contractors and it's not very far from Salt Lake, which also has very low unemployment.
WILLIS: And we should say the 123 percent, that is job growth, correct?
ROSATO: That is job growth, going from 2000 to 2007.
WILLIS: Kendall County, Illinois. Construction jobs there. What are they building?
ROSATO: Caterpillar is there. So they're really benefiting from the world wide boom in construction. You know, not just, obviously, in the U.S., but worldwide. That's west of Chicago and it's not too far from DuPage County.
WILLIS: All right. So well located there.
Loudon County, Virginia. Now I've been to this area. I'm sure it's great area for jobs, but the traffic is crazy.
ROSATO: The traffic is getting crazy. It used to be just known for wine and horse country, but it's really experienced a lot of growth over the past decade really and the past five years particularly. You have the technology quarter near Dulles Airport and you have a lot of tech companies out there. And you have, you know, just a lot of sprawl.
WILLIS: You have government, right? I mean you could . . .
ROSATO: Defense contractors. Military contractors.
WILLIS: Yes, you can commute into the city there.
Douglas County, and I'm not sure, it's Colorado, right?
ROSATO: That's right.
WILLIS: And that's well located, right?
ROSATO: Yes, it's right between Colorado Springs and Denver. It's a lot of growth. You have a lot of technology companies there. Avia is there. EchoStar. So it's experienced a lot of growth. And you have the Rocky Mountains, so it's a beautiful place to live too.
WILLIS: Yes, you know, I've been in that area. It is really, really gorgeous. And, of course, they've had major problems in the mortgage meltdown.
ROSATO: Yes. Yes.
WILLIS: But that may be to some folks' a benefit.
Now Washington County. This is another Utah little town, little area.
ROSATO: Right. This is a county that's in the southwestern part of Utah and it's -- St. George is what's known for. It's marathon and actually it's a retirement community. But in the past couple of years, it's really attracted a lot more industry. But tourism is still a big part of the job growth there.
WILLIS: Now as you look at these numbers, and I know you're looking at all kinds of data points for this, do you see a lot of energy, economic growth, vitality in the west?
ROSATO: Yes, I do. Especially when you look forward. These are the places that had growth in the past. If you look for the next five or six years, the job growth is all going to be in Texas, Colorado, places that are known for energy, oil, bioscience, that kind of thing. That's where the job growth is going forward.
WILLIS: All right. You're going to be back tomorrow. What are you going to talk about?
ROSATO: Yes. We're going to talk about housing affordability. Where are you going to get the most for your money. Where are the best places you can live to get the most for your money.
WILLIS: I'll look forward to that. Thank you so much. We appreciate your help today.
ROSATO: Thanks, Gerri. VELSHI: All that grim news, Gerri, out there and Donna's here helping us out, giving us some good advice. I like that.
The economy is issue number one. We here at CNN are committed to covering it for you. ISSUE #1 will be back here tomorrow, same time, 12:00 Eastern, right here on CNN.
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DON LEMON, CNN ANCHOR: A Canadian teen at Guantanamo Bay, on the receiving end of the first Gitmo interrogation ever seen by the public.
