Return to Transcripts main page
CNN LARRY KING LIVE
Interview With Suze Orman; Political Panel; Interview With Dr. Phil
Aired September 16, 2008 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
LARRY KING, CNN ANCHOR: Tonight your money. Is it safe in the bank or better off under a mattress? The person who knows is here. Suze Orman standing by and waiting for your calls. So start dialing now for the best free advice you'll ever receive. Will you have more money with President Obama or President McCain? Can either one of them fix this mess? And then Dr. Phil finally explains why is everybody obsessed with Sarah Palin? The Palin factor. The doctor's in, next on LARRY KING LIVE.
(END VIDEO CLIP)
KING: Good evening. As we go on the air, breaking financial news tonight. "The Wall Street Journal" reporting that the Federal Reserve is negotiating a temporary loan to keep AIG in business. AIG and the Federal Reserve Bank of New York have no comment. AIG or American International Group is an insurance giant. Is it looking for a financial life line? They're a big factor in all of the turmoil on Wall Street this week.
And also, the boards of Barclays just announced that they've agreed to acquire Lehman Brothers. Lehman Brothers was also involved in a market meltdown. In other news, stocks rebounded today, but the economy is still reeling. And if you're losing sleep over your money, Suze Orman is here to save us all from financial ruin. Suze, thanks for joining us. OK, what happens to people who have life or home or auto insurance with AIG?
SUZE ORMAN, PERSONAL FINANCE EXPERT: Well, right now they're not going to have to worry because obviously the Feds are stepping in, and they will be giving an $85 billion bridge loan to AIG. They'll own about 80 percent of the company, so to speak, for having done that. But so they don't have to worry. But if AIG had gone belly up, what everybody needs to know is that, if you have a life insurance policy, every single state has what's called a guarantee association where your policies are guaranteed, and you would have been covered with life insurance. You would have gotten a different home insurance and a car insurance. Relatively, you would have been just fine, Larry. Nothing would have gone wrong.
KING: A few months ago you said on this very show that you would be worried if there was another big government bailout. It's now happening. Should the government be helping AIG? ORMAN: Well, in this particular case, I have to tell you they should. Bear Stearns, very different. Lehman, very different. AIG is an international giant that just doesn't have ramifications here in the United States. It is worldwide. They're like in 130 countries. They have 100,000 employees. Everybody has an AIG insurance policy. So in this particular case, my opinion, thank god they bailed out AIG.
KING: All right. What about Barclays and Lehman?
ORMAN: I think it's good, you know. They're selling Neuberger Berman, Barclays, that's fine. And that will all work itself out. The major danger that we had here, which is why you saw the stock markets go up today, is that rumors were circulating that AIG was going to be saved. So the big giant here, the big downfall would have been if AIG, in my opinion, had gone under.
KING: Suze, Senator McCain is saying this involves fraud -- let me use another word similar to fraud -- on Wall Street. Do you agree?
ORMAN: It starts way back when, when there was nobody overseeing and regulating, nothing. It's how many times have I said on this program, what were they all thinking? Why were they lending money to people who shouldn't have been borrowing money? Why were they packaging these things? What about the rating agencies? Why weren't the rating agencies rating everything the way they should have been and now they're making matters worse? So whether it's fraud or not, was their deceit going on? I don't know if it was deceit as much as just total irresponsibility is what caused this.
KING: We have an e-mail from Rose in Berkeley, California. "I have a 401(k) that is losing money. How do I stop the balance from dropping? If it's not possible, can it be slowed down?"
ORMAN: To stop the balance from dropping, get out of the stock market, Rose. It's that simple. Markets go up and down. That is the nature of the stock market. And if you think these markets aren't going to continue to go all over the place, I'm here to tell you they are. So if you can't take it and you want to stop it from going down, also stop it from going up, all you have to do is switch into either a money market account or something within your 401(k) that keeps it safe and sound. It's really that simple.
KING: Is this a good time to get into the market?
ORMAN: No. It's not a good time to get in with brand new money. I would let these markets kind of wash themselves out. On the other hand, if you're investing in a 401(k) every month m with small amounts of money, that's OK as long as you don't need the money for 10, 15, 20 years. You if you just got an inheritance, you have $50,000, should you be putting it in the stock market now? Are you kidding? These are the markets that you just sit on the sidelines and wait on the sidelines and stay away from them until everything works out.
KING: Oil settled down today to $91.15 a barrel. What does that mean, are gas prices going to go down? ORMAN: Yes, gas prices probably will go down I hope to essentially $3 a gallon. So what you're essentially seeing here is like a tax rebate for everybody. That's a lot of people, that will help them a lot. While all of this is bad news, Lehman, AIG, I get that's all bad news. But the good news is for the main people that have to get by every single day, your gas bills in terms of what you put in your cars aren't going to be as high. Your heating bills aren't going to be as high. I don't know, to go from $150 a barrel down to $91, that is significant. This what a great thing that that is happening.
KING: By the way, the bailout of AIG Financial reported by "The Wall Street Journal" is now official. People want to know is their money safe? You have an involvement with the FDIC. What's that all about?
ORMAN: I most certainly do. This is not a paid involvement. This is me and the FDIC getting together, and we actually created a Web site called myfdicinsurance.gov. Eventually you're going to see PSAs and ads to tell everybody to go to myfdicinsurance.gov and this is what you'll find when you get there. You'll find what's called Edie, the electronic deposit insurance estimator, which will tell all of you is your deposit -- or are your deposits at a bank insured or not? Ten thousand people did not need to lose money in Indy Mac bank if they had simply known if their deposits were insured. So you go there. You'll see my little face when you get there. You'll answer the few questions and it will tell you if you're insured or not. It's that simple.
KING: That's myfdicinsurance.gov.
KING: We'll be right back with Suze Orman. Dr. Phil later to discuss the Palin factor. You're watching LARRY KING LIVE. Stay there.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Breaking news on the American financial crisis.
UNIDENTIFIED MALE: Biggest shake up in financial markets since the Great Depression.
UNIDENTIFIED MALE: Washington Mutual, one of the largest lenders in the country has been downgraded.
UNIDENTIFIED FEMALE: AIG, the nation's biggest insurer is fighting for survival.
(END VIDEO CLIP)
KING: We're back. Which candidate can get us out of our financial crisis? That's tonight's quick vote. Go to CNN.com/LarryKing right now and vote. Suze Orman, the Federal Reserve decided to leave short term interest rates unchanged today at 2 percent. Good or bad?
ORMAN: I personally think it was bad. Listen, the banks in the United States of America are in trouble. And anything we can do, in my opinion, to help the banking system so they can make a little bit more money, I think would have been a good idea. If we had lowered interest rates, the Fed funds rate, the banks would have been making more money on the money that they lent out, which would be helping everybody in the long run. So I think they should have lowered, but they left the same. So what are you going to do?
KING: Could other major financial institutions go under?
ORMAN: Absolutely, they can. And you would think that they couldn't, but when you see dinosaurs, Merrill Lynch, Lehman Brothers, AIG, going down the drain, anything can happen. Nothing is beyond the imagination at this point in time.
KING: Let's take a call from Detroit for Suze Orman. Hello.
CALLER: Hi. Can you hear me?
KING: Yes, go ahead.
CALLER: OK, great. Suze, I know you're always recommending we put money in our 401(k), particularly if there's company matching.
CALLER: So I put 6 percent in my 401(k), but right now I'm losing 10-20 percent a month and I'm thinking, isn't that better to stop that and take that money and literally put it under my mattress?
ORMAN: No because here's the thing. How old are you?
CALLER: I'm 45.
ORMAN: Forty-five. You say it like oh, my god, I'm 45. Larry, what should we do with her? Anyway, but here's the thing. At 45, you're not going to need this money for 10, 20 years. If you just keep doing this every single month, assuming that you are investing --
CALLER: I have current debt.
ORMAN: But they're still matching your contribution. They are still for every dollar that you put in, they're still giving you possibly 50 cents on the dollar. That's an automatic 50 percent return on your money, even if the markets go down. Isn't that correct?
KING: OK. Let's take another call.
ORMAN: Where are you going to get that?
KING: New Jersey, hello.
CALLER: Hi, how are you?
CALLER: We've watched -- my husband and I are in our 40s, and we've watched our retirement savings drop from $175,000 this time last year to $122,000 yesterday and another $6,000 last night. We're meeting with our broker tomorrow. What is the number one question you think we should ask him?
ORMAN: Well, that's a good -- that's a good question because you really have to look at your situation, and the question I actually would be asking you to ask him would be this. Why didn't you call me as the markets were going down? Did you hear from him as the markets were going down?
CALLER: No. I had to call him yesterday.
ORMAN: That's the --
CALLER: He should have called us.
ORMAN: That's right. That is the question that you should be asking him. What am I paying you for? What am I paying you for? You invested my money, it's going down. Hey, I heard from you when my money was sitting in a money market account and you wanted me to invest it. But now that it's going down, I don't hear from you.
So the question you really should be asking yourself, not him, which is why should you stay with this person? Now, I get that the markets have been going down across the board. But at least when the markets have been going down, that's when a good financial adviser should be reaching out to their clients to at least say, this is my plan of action. This is why I think it's OK, or this is what we should do. Given that you haven't heard from this person at all, why in the world would you want to stay with him?
KING: We have an e-mail from Donna in Bremerton, Washington. "I work for the federal government, I have a Thrift Savings Plan. Which funds would be the best for someone who has an incurable, potentially life threatening medical condition?" She has lupus."
ORMAN: If you have lupus, and this is money you're really going to need in a short period of time, I have to tell you, you need to keep the money as safe as possible within the Thrift Savings Plan. So a place that really you just get a good interest rate. In markets like this, why do you want to be in the stock market when you could just take your money and possibly get a 4 percent certificate of deposit?
What are you going to do in the stock market? Get five, 6 percent? So if you really need your money safe and sound, the markets are not the place for you. They never have been, and they never will be.
KING: Suze, how bad is this? Is this comparable to the Great Depression?
ORMAN: Yes, sir.
ORMAN: This is seriously bad. If it, in fact, they had let AIG go under, I'm here to tell you, who knows the ramifications worldwide that would have happened with this. So that's why now -- here's what I don't understand.
Why is it that they didn't do this on Friday? And Friday all they needed was $20 billion. But over the weekend they said, no, we're not lending any money. The Feds say I'm not lending any money to anybody. Then they get downgraded. AIG was downgraded by three ranks by the ratings services.
Now they need $85 billion. I don't know. Why didn't they do it just three days ago? Would have saved quite a bit of money.
KING: One other thing. Should people take money out of the bank?
ORMAN: Are you kidding? If you take your money out of the bank and that money happens to be FDIC insured, and you're worried about it. So you take it out of your mattress or in a shoe box, here's the problem. If there's a fire in your house, your home insurance isn't going to cover it for more than $200. My doorman yesterday as I was walking out of my building said Suze, you've got to help me. I took money out of the bank. I took it home. I was home last night and was robbed, $17,000, it's gone. What should I do? Should have left it in the bank.
KING: Thank you as always, Suze. We'll be touching base with you again hopefully in better times.
KING: All right, sir. See you soon.
KING: Suze Orman. What are the candidates going to do about the economy? We'll kick it around next.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: What we've seen the last few days is nothing less than the final verdict on an economic philosophy that has completely failed.
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: We're going to put an end to the reckless conduct of corruption and unbridled greed that have caused a crisis on Wall Street.
OBAMA: We know what got us into this mess. What we need now is leadership to get us out.
MCCAIN: It's time to set things right and I promise to get the job done as your president.
(END VIDEO CLIP)
KING: We have an outstanding panel. Joining us on Capitol Hill, two leading members of the United States House of Representatives. On the left, Representative Debbie Wasserman Schultz, Democrat of Florida, support of Barack Obama. On the right, Congressman Michelle Bachmann, Republican of Minnesota, a supporter of McCain. Also in Washington in another area is Hilary Rosen, CNN contributor, political director of "The Huffington Post" and a supporter of Obama. In New York is Kellyanne Conway, president and CEO of a polling company and a McCain supporter. OK Congresswoman Schultz, what do you make of all of this? Can Obama correct this?
REP. DEBBIE WASSERMAN SCHULTZ (D), FLORIDA: Well Obama, when he's president of the United States, is going to help move this country in a new direction. We have a person in John McCain, who just like George Bush said he was the decider. Well, John McCain declared himself the deregulator. When he chaired the Commerce Committee, he presided over some significant deregulation that began the spiral downwards and put us in the situation that we have today. What the crash of Merrill Lynch and the Lehman Brothers and AIG showed yesterday is that unlike the Republican philosophy, some government is necessary, and we're going to need to apply a little bit of a regulator here in order to balance things out and stabilize the situation.
KING: Congresswoman Bachmann, I want to show you -- we're going to show you a toss here to Obama attacking McCain for a comment that the senator made yesterday about fundamentals of the economy. Watch.
(BEGIN VIDEO CLIP)
OBAMA: We are in the most serious financial crisis in generations. Yet Senator McCain stood up yesterday and said that the fundamentals of the economy are strong. That's what he said. Now, a few hours later, his campaign sent him back out to clean up his remarks. And he tried to explain himself again this morning by saying that what he meant to say was that the American workers are strong.
(END VIDEO CLIP)
KING: Congresswoman Bachmann, how do you respond?
REP. MICHELLE BACHMANN (R), MINNESOTA: Well Larry, it's funny to me that every time something happens in the economy, it's always the Republicans' fault. And this again, these are private companies that have made contracts in private markets. Yet the answer from the Democrats is more government involvement. And the one person who's always missing in the equation is the forgotten man. It's the American taxpayer who had nothing to do with these private contracts, and yet Democrats insist that the innocent party, the American taxpayer, pay the burden for this problem.
KING: Michelle, were they deregulated or regulated enough to where there's enough cutbacks in regulation to cause a lot of this? BACHMANN: Well when it comes to Freddie and Fannie, it was important that we have a world class regulator. That was missing. Now we have a world class regulator. But, again, the answer is not to put the American taxpayer on the hook like we are right now with Freddie and Fannie. The last thing we want to do with AIG is put the American taxpayer on the hook to bail out a private company with private contracts.
KING: Hillary, how do you respond to that?
HILARY ROSEN, CNN CONTRIBUTOR: Well, I think that the congresswoman is just sort of ignoring some reality here, which is that, in essence, it took the Democratic Congress getting into office in the last two years to give the federal government the authority to actually go in and do what needed to be done in the area of housing and mortgage regulation.
And what Senator Obama's talking about is not burdening private contracts. What Senator Obama is talking about is we've essentially got a regulatory system that's antiquated and not something that can address really what has become nothing more than a series of sort of complicated financial instruments on Wall Street that we're all kind of gaming the system.
John McCain just isn't up to that task. He hasn't been for a long time. And I think he had an opportunity -- you know, leaders want to look optimistic, and I think that's why he said what he said about the economy. But I think he ended just up looking out of touch.
KELLYANNE CONWAY, GOP POLLSTER: Well I find this conversation to be fascinating because here today you have John McCain before a group of workers in Youngstown, Ohio, and you had Barack Obama on the side of the little guy. Yet at a fund-raiser in California with Barbra Streisand where they're paying $28,500 a plate.
KING: Kellyanne, that's not fair, that was scheduled.
CONWAY: No, no, I'm saying, look, Larry, here's part of the problem. People who have been taking contributions and hiring lobbyists and meeting with these lobbyists and taking contribution from Freddie and Fannie. And even on CNN as you reported today, Barack Obama has been the second most lucky beneficiary of those contributions since 1989, and he's only been in the Senate for four years. So he has the second highest contributions after Chris Dodd in the Senate from Fannie and Freddie, yet he's going to come in there and clean up the mess that Fannie and Freddie left. It's just remarkable and I think what voters really put a nose on for is hypocrisy. And I do think that when you're taking money.
SCHULTZ: You're right, Kelly. Your candidate is the biggest hypocrite out there.
CONWAY: But Congresswoman.
KING: One at a time.
SCHULTZ: John McCain's campaign is run by lobbyists.
ROSEN: Larry, it should be clear.
ROSEN: It should be clear if we're going to bring Fannie and Freddie in here that people understand that Rick Davis, John McCain's campaign manager, was the principal Fannie-Freddie lobbyist for multiple --
CONWAY: What does this have to do with anything? I'm trying to talk about people who are suffering.
ROSEN: No, you're throwing mud, you're not responding. You're throwing mud, and you shouldn't do it.
KING: Hold on, let Congressman Schultz...
CONWAY: Hilary, is he at the fundraiser or isn't he?
SCHULTZ: John McCain has a campaign that is run by lobbyists. He has an economic adviser in Carly Fiorina, who at the same time that John McCain is criticizing CEO bonuses, he has an economic adviser in Carly Fiorina who walked away with $45 million and a $21.5 million severance package.
CONWAY: Do you really think people are going to focus on that in this election?
SCHULTZ: Yes, I think.
CONWAY: You do? Well why is McCain up in the polls then?
SCHULTZ: Excuse me. You see, the reason that people are going to focus on it is when you surround yourself with people who profit from the status quo, it's really hard to be able to make the case that you're the change agent.
CONWAY: And Nancy Pelosi has done what as your leader? Except gotten all of you a 22 percent approval rating.
SCHULTZ: Nancy Pelosi has led us to pass the most important housing package in American industry and is directing us to ensure we can turn the housing crisis around, which John McCain and the Republican leadership doesn't even think is an issue. My state has the highest foreclosure rates in the country. We lost 84,000 jobs in this country last month, and we have the worst job situation since 1992.
BACHMANN: Larry, let me get in on the housing crisis.
SCHULTZ: And we are headed towards a huge recession. John McCain thinks that's fundamentally sound? Out of touch.
BACHMANN: Larry, I'd like to have a chance to respond.
KING: Go ahead.
BACHMANN: Larry, thanks so much. If you look at the housing crisis, government has to take its share of the blame. After all, government was goading these mortgage lenders, saying you're red ling. You're being discriminatory. If you don't give loans out to marginally credit worthy people, we're going to come after you. In fact, Chairman Barney Frank has made comments like that as well. The Democrat-controlled Congress wants to have these mortgage lenders make loans to people with marginal credit.
Well guess what? If you aren't making money lending, this is not a shock when you have loans that aren't paid back. And now the American people have to come in and step in and pay for these bad loans when people have zero equity or negative equity.
KING: We'll be come back ladies. Dr. Phil is minutes away. Don't go away.
KING: We're back with our panel. Here's John McCain today, ladies, making his case for fixing the economy. Watch
(BEGIN VIDEO CLIP)
MCCAIN: The top of our economy is broken. We have seen self- interest, greed, irresponsibility, and corruption -- yes, and corruption, undermine the hard work of the American people. It's time to set things right, and I promise to get the job done as your president. I promise you that.
(END VIDEO CLIP)
KING: Hillary, is he on the money?
ROSEN: Well, he'd be on the money if he had a record of actually doing that. And I think the issue isn't really sort of what everybody has done and who's at fault. I think the issue that people want to hear about is what are you going to do for me when you become president, and how do I know you'll really deliver?
A year and a half ago, Barack Obama laid out this crisis that we're facing. He outlined a whole series of proposals to do it. John McCain's response was, you know, I don't really like those options. I'm kind of a deregulator. I'm going to stick with my big tax cuts for the wealthy and for corporations and hope that the economy rebounds on its own, that it trickles down.
I think that now for him to turn around and say, wait, I've changed my mind, throw the bums out; it's all about corporate greed. We've got to do something here. I don't think that's going to fly. I think Barack Obama is on much stronger ground here. KING: OK, now one other thing. Kellyanne, you mentioned earlier, but McCain did attack Obama for doing a big Beverly Hills fund-raiser with Barbara Streisand, which was scheduled for some time. Was he supposed to cancel that?
CONWAY: I'm not saying that. It's ironic to say out of one side of the mouth, I'm for the side of little people and then jet off to a fund-raiser where people are paying 28,500 dollars. Maybe creatively -- he hasn't hired me for his campaign, Larry, but maybe creatively, he could have asked some of the people to donate part of that to the workers who are now going to be without a job.
David Patterson, the governor here in New York, is very concerned that AIG and Merrill Lynch are huge employers of New Yorkers. He's very concerned about the workers here. I'm finally glad to hear finally, and it came from Hillary, that we're not going to talk about who's to blame but actually moving forward. I think this welfare for Wall Street is probably not going to fly very well. I haven't put in a poll question yet.
I think McCain is on strong ground in the following sense. He's somebody who's requested zero earmarks. He's a very good steward of taxpayer dollars to begin with. He doesn't even bring the pork back home to his home state of Arizona. That's a real distinction for him. If you trust him with your taxpayer dollars that way, you ought to be able to trust him in moving forward in this crisis.
Here's what we need: we need more transparency in the system. Maybe investors and home owners, had they been able to see more, like we have to see immediately who gives political contributions -- god forbid, that's so important. But we can't really see what's going on behind the scenes. Also, this big overpaid CEO model of taking big crazy risks, that's so '80s. It's outdated. It doesn't work. That needs to be held to account.
KING: We're running close on time. Congresswoman Schultz, go ahead.
SCHULTZ: That would be great if John McCain had any track record whatsoever of actually doing those things.
CONWAY: And Barack Obama?
SCHULTZ: When he presided over the Commerce Committee, he presided over one of the biggest deregulatory processes in American history. He's been the number one deregulator in the U.S. Senate. He has been committed to dismantling government. Now, all of a sudden, the American people, people who are trying to fill up their gas tanks, costing 77 to 80 dollar to fill up their gas tanks --
KING: One more word from Congresswoman Bachmann. You want to get your two cents in? It's your money.
BACHMANN: Larry, I would love to. It's the American people's money. There couldn't be a more clear distinction between Barack Obama -- he's already told us he wants to nationalize 20 percent of the economy by taking over the health care system with a government socialized medicine system --
SCHULTZ: Oh my god, you're just making stuff up now.
BACHMANN: And John McCain now wants to do just the opposite. He has a proven record of being a tax cutter and a cutter of wasteful spending. That's the difference when the voter goes into the poll in November. Either a big spender and a big tax increaser or a tax cutter and a spender.
KING: We'll have you back. Thank you very much Congresswoman Schultz and Bachmann, Hillary Rosen and Kellyanne Conway. Next, the doctor is in. Dr. Phil joins me. Always welcome for a little political analysis. You're watching LARRY KING LIVE.
KING: He's one of my favorite people, and it's always a great pleasure to welcome him to LARRY KING LIVE. He's Dr. Phil McGraw. He's host of "Dr. Phil," which is now, unbelievable, in its seventh season. He's author of a terrific new book, "Real Life, Preparing for the Seven Most Challenging Days of Your Life." There you see its cover. And he's doing a new show with his son Jay. It's called "The Doctors."
He's here to discuss the phenomena of Sarah Palin. We thank him for agreeing to talk about that because she has become what she has become. She's transformed the race. How do you explain her appeal psychologically?
DR. PHIL MCGRAW, "DR PHIL": Here's the thing. We're actually in an election where maybe for the first time there's more focus on the vice president than there is on the president. I mean, I guess that's kind of a double double-edged sword for that side of the ticket, because she certainly energized that side of the ticket. She certainly energized people's interest in the race, but she's kind of over-shadowing the presidential candidate.
KING: And explain that. What's her -- what is her thing?
MCGRAW: First off, her relatability factor seems to be just absolutely through the roof. She's a mother. She's a single mother. She's very self-sufficient.
KING: She's got a husband.
MCGRAW: That's true. She has a husband now, but she has been a working mother that has been out there so much, doing the things that mothers do. And I think that makes her highly relatable.
KING: So we associate?
MCGRAW: I think people do associate with her and respect her as a working mother. KING: Will this celebrity type appeal last?
MCGRAW: Well, I think there's a point at which there's going to be a shift in this election, where people do begin to look at the issues involved and how they relate to them. People say that politics are local, but the truth is politics are very personal. And I think a lot of people are going to look at this and say, what is in this candidate and their ticket for me? That doesn't mean that they're selfish because, if what they're interested in is helping those that are less advantaged than them, then they're going to be looking for where that falls in the ticket. If they're going to be looking for health care, then that's what they're going to be looking for in terms of that side.
I think there's a point where this is going to top out. The novelty will wear off, and people are going to really start looking at the issues.
KING: So far she's only done one major interview. Let's watch a clip and get your thoughts.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: When he offered me the position as his running mate, the first thing I said to him was, if you really think I can help the ticket, if you really think I can help this country, absolutely, I want to do this with you.
CHARLIE GIBSON, ABC NEWS ANCHOR: And you didn't say to yourself, am I experience enough? Am I ready?
PALIN: I didn't hesitate, no.
GIBSON: Doesn't that take some hubris?
PALIN: I answered him yes because I have the confidence in that readiness.
(END VIDEO CLIP)
KING: Doctor, honestly, wouldn't most people, even if you had 30 years experience, say to yourself, you sure you want me? Am I really the one?
MCGRAW: Certainly, it had to be a surprise, but what we do know about her as a working mother -- and I misspoke when I said single, but I mean a working mother. We have someone that has been out there dealing with creating her own experience. I mean, she has been very industrious and very ambitious and very successful in what she does.
KING: It's OK for her not to be surprised in being offered this?
MCGRAW: I think she was probably surprised, don't you. I think she was surprised. I think she was flattered. And I think she probably takes it very seriously. I admire the way she's handled herself so far. And in saying that, let me say very clearly, I haven't made up my mind about who I'm going to vote for in this election. I wouldn't say if I did, because I don't think that something that I would want to use a platform to influence others about. But I think she has distinguished herself so far.
KING: You know, that -- I know it's discussed on your show and could be one of the aspects of your book, "Preparing for the Seven Most Challenging Days of Your Life." Probably the most challenging of hers was when her daughter tells her she's pregnant. I know you've dealt with that kind of thing on your show. How do you deal with that and run for vice president?
MCGRAW: First of all, I think we all -- those of us that have children that have reached that age understand that we can talk to them until we're blue in the face. We can give them our values. We can talk about our beliefs. We can let them know what it is we want them to do, but the fact of the matter is, when they get to be that age, they're going to make their own choices and their own decisions. You're going to hope they hear all the upbringing in their mind. You're going to hope they make the right choices at the time, but that may not necessarily be the case.
I certainly don't think it's evidence that she has failed to do something she needed to do as a mother.
KING: Have we come a long way when the vice president some years back was criticizing Murphy Brown for having someone on her TV show who was having a baby without benefit of wedlock, and now we have the father of this new child coming, being hailed at a convention.
MCGRAW: That is a big shift, and I mean -- but you have to think about it. When you and I were growing up, there were three TV channels, you know, and we were watching "I Love Lucy" and "Gunsmoke" and all of those sorts of things that were very much value based and very much mainstream. Now kids are getting bombarded with 500 TV channels and the Internet.
There's a whole different environment and culture out there that's impacting these children today. We may not be the best voice, the only voice in their ear, so we need to be the best voice in their ear.
KING: Some have questioned whether a parent with a teenage pregnant daughter, a special needs child, should be taking on this job, or is that sexist to even say it?
MCGRAW: I think you have to look at it from the standpoint of what that individual is willing to aspire to and what they're willing to do. I don't think it should matter whether it's a mother or a father. Those are huge challenges, and they would be a huge challenge in any job for either sex. I don't think it's something that should weigh into it.
KING: Would you recommend not to run if someone came to you and said I'm the mother. Here's my situation.
MCGRAW: No. I think you have to make a decision about where your life energy is, how strongly you feel about what you're pursuing. And that's a very individual thing. I mean, there are those that say children, mothers with children shouldn't work at all, and there are those who say, look, go pursue your career and then come vibrantly alive when you're back with your children. I think it's a matter of balance. I think clearly there are sacrifices made to the family when there's a working mother. I think there are sacrifices made by career-oriented women when they do stay home.
KING: More on the Palin factor with Dr. Phil McGraw when LARRY KING LIVE returns.
(BEGIN VIDEO CLIP)
PALIN: Ohio, he has fought for you. He's going to keep fighting for you. He's the only great man in this race, and he's ready to serve as our 44th president of the United States of America. John McCain.
(END VIDEO CLIP)
KING: Back with Dr. Phil. His new book is "Real Life, Preparing for The Seven Most Challenging Days of Your Life." What challenging days are ahead for these four? When they campaign together, does her youth energize him? Because he obviously is much older.
MCGRAW: Well, it certainly seems to. And I think that together they seem to be a very dynamic pair, and I think they seem to connect at this point. He certainly is older. That has to be a question in people's minds because of his age.
KING: We're back with Dr. Phil. "Saturday Night Live" did a great spoof of Palin and Hillary. Watch.
(BEGIN VIDEO CLIP)
TINA FEY, "SATURDAY NIGHT LIVE": Hillary Clinton, who came so close to the White House, and me, Sarah Palin, who is even closer. Can you believe it, Hillary?
AMY POEHLER, "SATURDAY NIGHT LIVE": I cannot.
(END VIDEO CLIP)
KING: How do you compare these two in real life?
MCGRAW: Well, of course, I don't know either one of them, but it seems to -- and I thought that was a great skit, and I thought it was smart comedy. But I think that there are probably some strong issue differences, and I think that's what people are waiting to find out. I think they do identify with Governor Palin because she has so many admirable qualities that people in everyday walk of life value and have. But I think they don't know a whole lot -- I don't know a whole lot about where she stands on different issues at this point. I think it will be very interesting over the next 49 days.
KING: You are saying that we will eventually get into hard core issues?
MCGRAW: I think people are going to have to. I think at some point, people will start asking the questions on where you stand on the things that affect us. We have a 6.1 unemployment rate right now, which is the highest in a good while. We've been talking about on the show, the AIG bail-out, the fact that the economy is in a difficult spot. People are going to want to know what's the plan for that sort of thing? How is that going to affect us in the coming years. That's what people are going to be really focused on in this election.
KING: Hillary Clinton was on "Good Morning America" talking about losing the nomination. I want you to watch.
(BEGIN VIDEO CLIP)
SEN HILLARY CLINTON (D), NEW YORK: Whatever my feelings were -- of course, I was disappointed. That goes with the territory. You don't spend 18 months working as hard as I did and feeling as committed as I was without regretting that it didn't turn out the way that I wanted. I also never felt like I was in it just for me. That's not how I think about my public life.
(END VIDEO CLIP)
KING: Does she rebound from all of this?
MCGRAW: I think she is a fighter and always has been and has very meaningful work that she is doing right now and I think she is going to throw herself into that and probably be a very strong factor in American politics for time to come. She is very passionate about her place in the Senate and I think we will see her doing great things coming up.
KING: Very different from the governor, right?
MCGRAW: I think there are clear differences between them. What those differences are in terms of issues, I guess, we'll find out as some of this starts to unfold. I think we're going to see a lot of Hillary Clinton in the future.
KING: We'll tie up some loose ends with Dr. Phil right after this.
(BEGIN VIDEO CLIP)
KING: Fun on the Internet. Let's discuss a couple other things. The book, "Preparing For the Seven Most Challenging Days of Your Life." How do you know what they are?
MCGRAW: I don't care how smart you are, how much money you have, how good a life you have, some things we can't avoid. The day you lose somebody you love, for example, the day your health breaks down and starts to fall apart. Life's tough. None of us get out of it alive, as they say. There's the day you get that call from the doctor, and he says, I have the test results, it's not good.
What do we do as we hear those things. As parents, as our kids grow up and they get a divorce or they lose somebody they love, do we know how to step in and help them and guide them and do the right things.
KING: Are all the challenges bad?
MCGRAW: Not all the challenges are bad. Some of them will always make you better for it. It's so cliche say to say when you don't -- you can bend but not break and you come back stronger. The truth is we really do learn from our experiences, so we do a better job.
KING: Tell me about "The Doctors."
MCGRAW: Well, Jay is actually the creator of "The Doctors." It's kind of the version of "Dr. Phil." It's on all the country now and in foreign countries as well. Daytime just launched. Its daily. It's an hour. We have four docs that are there, different specialties that can bring people information they need to manage their health. It's very fast moving, very entertaining.
The fifth seed, we bring in the top experts from around the world. We're doing things on cardio, getting yourself healthy and how much to exercise. Then we'll bring in exercise physiologists. If we're doing something with cardiac health, we'll bring in the top cardiologists in the country.
KING: Studio audience?
MCGRAW: We do have studio audience and we have a lot of viewer participation. All of the stories come from what people have questions about. Certainly, there are a lot of women's issues, whether it's breast cancer or how to handle menopause or how to raise their children, do you get vaccinations or not? Every show starts with a good hot topics debate on what is really in news at that time that has to do with medicine and health.
KING: Never run out of subjects?
MCGRAW: Oh, my gosh. I mean, we're having so many breakthroughs in medicine today, and people have such a hunger for this information. There's such a big portion of America that doesn't have health care, they're looking for information.
KING: Are you on the show?
MCGRAW: I'm not on the show, but I'll probably be a guest somewhere if I can talk him into it.
KING: We get a quick call in. The show is "The Doctors." Alabama, hello. CALLER: Hello.
CALLER: How are you doing?
KING: Go ahead.
CALLER: My question is, what are the views on a lot of the mistruths, if you would, that Sarah Palin has been reporting regarding the Bridge to Nowhere and the funds that were returned and a few other things that they stated?
KING: Will that hurt her?
MCGRAW: I didn't hear the question.
KING: Sarah Palin saying things that prove to be not true, for example, she said she never supported the Bridge to Nowhere and they found out she did.
MCGRAW: We're talking politics here. I suppose there's the truth, there's a lie and then there's some interpretation of things in the middle. I think we just have to get in a position where we can ask all these questions of the candidates, hard questions and get factual answers from them. I don't really know yet exactly what her history is and where she stands.
KING: Will America elect a black?
MCGRAW: I think at this point -- I think Americans are very much focused on finding the best person for this job. I hope that as Americans, that we've transcended that and it won't be an issue in this election.
KING: You hope, but do you think?
MCGRAW: I do. I don't think it will be an issue in this election. I don't think Obama has made it an issue. I think when it comes down to walking in that booth and pulling that curtain closed, I don't think it's going to be an issue.
KING: We've come a long way?
MCGRAW: I think we have a long way to go, but I think we have come a long way. I think when people pull that curtain shut, I think they will vote their true conscience.
KING: You're actually in that category of undecided?
MCGRAW: I am. I will stay there until I learn some things about these candidates and what they have to offer for the things I think are important.
KING: As always, Dr. Phil, great guest.
MCGRAW: Good to see you, Larry.
KING: Good guy. The book is "real Life," Dr. Phil McGraw, "Preparing For the Seven Most Challenging Days of Your Life."
Which candidate can get us out of financial crisis? That's tonight's quick vote question. You go to CNN.com/LarryKing. Tell us what you think.
I want to congratulate "Extra" on a big anniversary. For 15 years, they've been on top of all the entertainment and trend news. They're still going strong and are better than ever. This week also marks the debut of Mario Lopez as host. Mario, we know you. You can dance. You can act. Now that makes you a triple threat. Good luck, my friend.
Time now with Anderson Cooper and "AC 360." Anderson?