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Campbell Brown
Wall Street in Freefall; Major Hillary Clinton Supporter Backs McCain
Aired September 17, 2008 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAMPBELL BROWN, CNN ANCHOR: Hey, there, everybody. Here we go again tonight with breaking news.
Tonight, there are signs that another death watch may be under way on Wall Street. Late today, the largest savings and loan in America, Washington Mutual, put itself in a better position to accept an emergency cash infusion or to be taken over. This company holds over $140 billion in deposits. Much of that money is insured by the government.
So, tonight, there are lots of worries about what could happen if WaMu fails and if Washington can help with any possible bailout.
And speaking of bailouts, it turns out that the government's unprecedented $85 billion rescue of insurance giant AIG did not calm investors down. Take a look at this. This is a time lapse of today's final hour of trading on Wall Street. The Dow industrials cratered in that last 60 minutes, finally closing down 449 points, at 10609.
That is the Dow's lowest level since November of 2005. A Wall Street strategist sums it up today in just five words: "People are scared to death."
Tonight, both presidential candidates are talking about the mess on Wall Street, promising to clean it up. We're going to be taking you to their late-afternoon rallies coming up in just a minute.
I will also tonight be talking with a top Hillary Clinton supporter who announced today that she is leaving the Democratic Party to join the Republicans, to support John McCain. I will ask Lynn Forester de Rothschild why she thinks Barack Obama is an elitist -- and, yes, she is one of those Rothschilds -- and why she is going to vote for John McCain -- all of that and a lot more tonight in the ELECTION CENTER.
But before we get into the politics, let's bring in right now senior business correspondent Ali Velshi for quick questions on what we're all wondering, what we're all talking about.
And, Ali, the stock market closed down 449 points today, as we said. This is despite that $85 billion infusion of cash into AIG by the federal government. This was supposed to calm down investors.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes.
BROWN: And it didn't happen. What happened? VELSHI: Yes, 24 hours ago, you and I were discussing that this deal was imminent, it was about to happen. It was the idea that the federal government was going to step in and save the world's biggest insurer because it was in jeopardy. And that was supposed to calm the market.
But you saw that time lapse of the Dow and how it looked over the course of the day. It was -- look at that -- at all points of the day, down 200, down 200, back to down 180, and then, look at that, 300, 350, and all of a sudden by the end of the day, it was down 449 points. That's after Monday's 504-point drop in the Dow. That's more than 4 percent in each of the two days. So, this is a concern.
They're bailing out of the stock market. Investors are concerned that their money's not going to do well there.
BROWN: So, if they're selling stocks, where are they putting their money?
VELSHI: Well, they're putting their money in a few places. Gold -- take a look at this -- gold had its biggest one-day gain ever today, gaining more than $70. Oil, oil, which has been trending downward lately, actually gained again, having one of its strongest days. And money has been going into bonds. The U.S. dollar has been dropping again.
So, people are -- this is called a flight to quality. They're going into the types of investment that they think will be safe in a very uncertain market. And that's the word to use right now. This is remarkable uncertainty. We cannot make a sense of any of these deals that are going through.
BROWN: All right, let us bring someone else in. He's joining us right now.
Sorry.
Diane Brady. And Diane is a senior writer for "BusinessWeek" magazine.
Diane, good to have you here.
And let's talk about this a little more generally now. It seems like we can't get a break from the bad news. Washington Mutual announced it's putting itself up for sale, biggest savings and loan in the country with millions of customers, $240 in mortgage loans. What happens to consumers if somebody doesn't buy them out?
DIANE BRADY, SENIOR WRITER, "BUSINESSWEEK": Well, consumers' deposits are protected by the FDIC. So, that's important. Your money's not going to suddenly vanish if it's in a WaMu account.
But, clearly, there's a lot of skittishness, because this is a vicious cycle. One of the things we have been seeing is that banks are not loaning to money to people. Why? Because they're scared about their own books. That, I think, is the big fear right now, is that things are going to shrink, companies are not going to grow, and, essentially, the economy will come to a standstill.
BROWN: And, Ali, 11 banks, if I have got this right, have failed this year alone...
VELSHI: So far, yes.
BROWN: ... including giant IndyMac.
VELSHI: That's right. Yes.
BROWN: Can the FDIC cover all of these customers who have money deposited in WaMu if that bank -- in that bank if it fails?
VELSHI: The FDIC still has money. If we were to go off that kind of a cliff, there would be some issue with the FDIC being able to cover it all. But, for now, it is covered and people are insured.
So, that shouldn't be too much of a concern. There are some basic rules you have to follow about how much money you have to have in a bank account and how it needs to be divided up in order for you to be insured. It would behoove everybody in America with more than $100,000 to go to FDIC.gov and just make sure you're covered.
If a bank fails today, you will have your money by tomorrow. It's a very simple process. We will keep you posted if the FDIC starts running out of money and your money's in danger.
BROWN: So, where is the government getting all the money to do all this?
BRADY: Well, that's the issue. They're printing money, essentially. And I think that's one reason the markets fell today, is people are starting to get worried about the U.S. dollar. How much longer can Washington continue to step into these situations? Certainly, we're seeing foreign investors get very nervous about the country as a whole.
BROWN: Do you think we have seen the worst of this?
BRADY: I don't think we have seen the worst because every day brings more bad news. That was one reason why AIG had to be contained, is because there's a domino effect. That's why Morgan Stanley and Goldman Sachs went down today. People get scared and they start to look elsewhere but where the damage might be.
VELSHI: The one bright piece of news here...
BROWN: I was going to say, silver lining somewhere, somebody.
(LAUGHTER)
BROWN: Come on.
VELSHI: There is some silver lining, in that there are some people -- and, Diane, I think you alluded to this yesterday -- there are some people left in the world with money. And as the price of these stocks continue to go down, you may see intervention by those sovereign wealth funds, by Dubai...
(CROSSTALK)
BROWN: But we're talking about the Middle East.
(CROSSTALK)
VELSHI: Might be China, might be Russia. You may see -- there is money in the world. It just doesn't happen to be here right now.
BRADY: And as oil prices go up, they're in a much better position too.
BROWN: And a quick bottom line for consumers. If you're watching all this, the key here, I guess, is the advice we have been hearing over the last 48 hours. Don't panic, don't do anything rash, right?
BRADY: I think there has to be some sanity. Take AIG, for example. If you're insured by AIG, your insurance does not go away. That part of the business is healthy.
The markets, obviously, there's going to be more regulation. There's more pain to come. If you're invested, there's cause to worry. But the world isn't falling.
BROWN: All right.
Diane, thanks. Very...
BRADY: Thank you.
BROWN: Great to have you here.
And Ali Velshi, as always, good to have you here. Thanks, guys.
BROWN: The Wall Street mess has changed the whole complexion of the presidential campaign, the talk about lipstick, of course, over for now. Barack Obama sounding a lot more confident. John McCain, along with Sarah Palin, also sounding confident. We're going to go live to the campaign trail coming up in just a moment.
And, then, later, a wealthy Hillary Clinton fund-raiser who says she is going with John McCain. We will ask her why she is calling Barack Obama an elitist.
(COMMERCIAL BREAK)
BROWN: Moments ago, John McCain and Sarah Palin wrapped up a town hall meeting in Michigan. Barack Obama is speaking tonight in Las Vegas.
We have got correspondents with them both. They have the very latest for us, Dana Bash with the McCain/Palin campaign in Grand rapids, and Candy Crowley with Obama in Las Vegas.
And, Dana, let me start with you.
This is the first time we have heard Sarah Palin taking questions from voters. And, yes, obviously, a very friendly crowd of supporters. But she's been so tightly scripted up until now. How did she do?
DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Well, you know, she seemed actually very comfortable. In part, I think it's because of the fact that she was here with John McCain, her running mate. And they clearly have established a very comfortable banter between the two of them.
And it was interesting, Campbell. They were asked kind of open- ended questions about a host of issues. He was very careful to defer to her on issues that he wants her to take a big role in, like energy. And she certainly did that.
She was asked a couple of specific questions about, first of all, about women and women's votes, but also about -- there was one question that was quite interesting, one about whether or not she has foreign policy experience, enough of it to have this role as a vice president.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Give us specific skills that you think you have to bring to the White House to rebut that or mitigate that concern.
GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL NOMINEE: Well, I think, because I'm a Washington outsider, that -- that opponents are going to be looking for a whole lot of things that they can criticize and they can try to beat the candidate here who chose me as his partner to kind of tear down the ticket.
But, as for foreign policy, you know, I think that I am prepared. And I know that, on January 20, if we are so blessed as to be sworn into office as your president and vice president, certainly we will be ready. I will be ready. I have that confidence. I have that readiness. And if you want specifics with specific policy or countries, go ahead and you can ask me. You can even play stump the candidate if you want to.
(LAUGHTER)
(END VIDEO CLIP)
BASH: Now, I'm sure you're wondering, wait a minute. What about stump the candidate? We want to see that.
Well, Campbell, that didn't happen. She stopped talking at that point and John McCain jumped in and started talking about some of the points in her resume that we have heard him say before that he thinks makes her qualified to be vice president, and, God forbid, from his perspective, some day a president, and specifically talking about the fact that she built a pipeline in Alaska and so forth. But, again, sort of the dynamic was interesting in that even from the very beginning of the town hall, John McCain was asked a question about radical Islamic terrorism. And, as he was finishing his answer, she jumped in and did what they think that she helps him with, which is to talk more about his resume, about his background, and about his experience, in, for example, fighting for a change in the strategy in the Iraq war. So, that was the kind of dynamic that we saw here.
Not a lot of news made, but certainly an interesting window into the dynamic between the two of them and in the way she answers questions off the cuff.
BROWN: Absolutely. All right, Dana Bash for us.
And Candy Crowley, let's bring Candy in now.
We're seeing a newly fired-up, Candy, Barack Obama this week. Let's listen to some of what he had to say today.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: This is somebody who has been in Congress for 26 years...
(LAUGHTER)
OBAMA: ... who put seven of the most powerful Washington lobbyists in charge of his campaign. And now he tells us that he is the one who is going to take on the old boys' network...
(LAUGHTER)
OBAMA: The old boys' network, in the McCain campaign, that's called a staff meeting.
(LAUGHTER)
(CHEERING AND APPLAUSE)
(END VIDEO CLIP)
BROWN: And, you know, Candy, the McCain campaign has accused Obama of using this crisis on Wall Street as a political opportunity. And they're right, aren't they?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely.
And, you know, the Obama campaign has made no bones about that. That's what candidates do. They put themselves into the headlines by grabbing the news of the day. Certainly, when Russia invaded Georgia, we saw a lot of John McCain on that subject. So, both of them have taken this crisis and put it in the political headlines.
Obviously, the Obama campaign thinks that this very much favors them. And they are going to pound this thing probably longer than you would like them to, Campbell, because they really believe they're on to something. They are tightly scripting him as well. He uses the teleprompter most of the time to keep his economic agenda focussed.
As you saw, he is hitting back at McCain, trying to frame him as not the maverick, but the same old, same old. They know they have a problem, though, here, because, while John McCain may have been in Washington for a quarter-of-a-century, Barack Obama's running mate has been there for 35 years. So, there's a fine line there.
BROWN: All right, Candy Crowley for us tonight -- Candy, thanks, and Dana Bash as well. Appreciate it, guys.
McCain and Obama, as we just heard, out there selling their economic messages, they do agree on the easy part. Both are crystal clear the economy is a mess. But do either one really makes voters feel like he knows how to fix it? We're going to talk about that with some of the sharpest people in politics coming up next.
And, then, later, a former Hillary Clinton supporter switches to McCain. We're going to ask her why Obama is not her cup of tea.
This is the ELECTION CENTER.
(COMMERCIAL BREAK)
BROWN: A brand-new CNN poll of polls out tonight. For the first time in 10 days, Obama has pulled ahead. But this is razor-thin margin we're talking about here, 46 to 45, well within the margin of error, 9 percent saying they're still unsure about their vote. This race is entirely up for grabs tonight.
And, tonight, Obama and McCain are both zeroing in on the Wall Street crisis.
Let's bring in our political panel now to talk about a lot of the stuff, CNN contributor David Brody, senior national correspondent for the Christian Broadcasting Network, Donna Brazile, a Democratic strategist and CNN political contributor, and Steve Hayes, a senior writer for "The Weekly Standard," joining us as well.
Welcome, guys.
(CROSSTALK)
DAVID BRODY, CNN CONTRIBUTOR: Hey, Campbell.
BROWN: David, let me start with you.
It looks like the race is tightening, if you look at the polls, with sort of both of these convention bounces that each got disappearing back to where we were, an economy giving the whole country a case of the jitters. Is this once again a tougher political climate for Republicans?
BRODY: Sure. Sure it is.
And, of course, the Obama campaign is going to make this whole point that they're going to tie, you know, McCain to Bush and they're going to do all of this.
But, you know, Campbell, one really interesting thing here is that McCain seems to have one advantage here. And that is that he talks about being the maverick. Well, you know what? He has a reputation as the maverick, a guy that's going to buck his party and do some damage to the other guys, take on, you know, the -- a lot of the folks in Washington. I mean, he's bucked his own party.
So, he already has the reputation of being a fighter. And, so, he goes on the campaign trail and talks about being this fighter. And you know what? People can buy that because he already has that reputation. That is a big advantage for him, compared to Obama, who at this point politically is untested.
BROWN: Steve, let me have you follow up on that a little bit, because that is true, the point that David made. But he also has had a gaffe over the last couple of days that the Obama campaign has been trying to take advantage of, two days now since McCain has sort of backtracked on his claim that the fundamentals of the economy are strong.
His ticket still playing defense. Sarah Palin was asked about it on FOX News today. Let's listen.
(BEGIN VIDEO CLIP)
SEAN HANNITY, FOX NEWS: Do you believe that the fundamentals of our economy are strong?
PALIN: Well, it was an unfair attack on the verbiage that Senator McCain chose to use, because the fundamentals, as he was having to explain afterwards, he means our work force. He means the ingenuity of the American people.
And, of course, that is strong, and that is the foundation of our economy. So, that was an unfair attack there, again, based on verbiage that...
(END VIDEO CLIP)
BROWN: Fair or unfair, Steve, you know how people are interpreting it. And this is something that he said many, many times. Is he vulnerable?
STEPHEN HAYES, "THE WEEKLY STANDARD": Yes.
Look, it's not an unfair attack. I don't think he meant -- when he said it, I don't think he meant the American work force. They have got to spin because I think he made a mistake. It was an unforced error. For their campaign, it was an unfortunate error.
And I think they have compounded, I think, that with Carly Fiorina's comment about John McCain and Sarah Palin and Barack Obama and Joe Biden not being able to run a business.
(CROSSTALK) BROWN: And she was, we should mention, a top -- just so people know, a top economic adviser to the McCain campaign...
HAYES: Right.
BROWN: ... who said this yesterday, that none of them were qualified, she didn't think, to run a company, but they were qualified to be president.
HAYES: Right. Exactly.
I think it's been a tough couple of days for the McCain campaign. I thought he has speech last night was actually very effective, where he started to -- he sounded a more populist note and he was aggressive against Barack Obama, his lack of qualifications, his lack of leadership on the issue.
I thought Barack Obama today put out a statement. I got it on my BlackBerry I think it was this morning, and I read this statement looking for some sense of where he was on this whole AIG question, which is the most important question of the day and potentially of the month, potentially of the election. And we got a four-paragraph statement from Barack Obama that basically said nothing.
He didn't actually take a position on the issue. So, I think, you know, it's sort of evening out right now.
BROWN: Right.
We're going to talk about the AIG stuff and what they both said about it when we -- coming up shortly.
But let me go Donna now.
And, Donna, Obama may have stepped up his rhetoric against McCain on the economy, but a lot of people out there -- you hear Democrats saying he's not yet closed the deal, that it's an empathy thing. It's a feel-your-pain thing.
And you worked with Bill Clinton. He certainly was able to make those connections. Why is it that some people believe Obama hasn't yet?
DONNA BRAZILE, CNN POLITICAL ANALYST: Well, Campbell, we still have 28 days in this election, and three important presidential debates and one vice presidential debate.
I want to take issue with David. Senator McCain chaired the Senate Commerce Committee. He was known as Mr. Deregulator. Yes, he calls himself a maverick, but, when you look at the record, the record is not clear that Senator McCain really tried to protect consumers.
There are a lot of -- there's a lot of blame to go around. But, two years ago, Senator Obama went forward and said to Secretary Paulson and others that we had to get our hands on this mortgage crisis. And I think he has tried to show leadership on the mortgage crisis. He's tried to show leadership on the economy.
And, last week, when he was talking about the economy, everybody wanted to talk about lipstick on a pig. So, he's trying to present his plans. He's trying to prevent his solutions. And if we stop going with these distractions, maybe voters will finally hear Senator Obama out.
(CROSSTALK)
BROWN: OK, quickly, David, respond.
BRODY: Real quick.
Donna, it's a good point, Donna, that you have there. And, also, here's another concern. You know, McCain, when he talks about this commission, to set up a commission and all of that, that screams Washington insider.
(CROSSTALK)
BROWN: Just to be clear, because this happened yesterday, he's talking about setting up a commission to investigate what happened on Wall Street. Go ahead.
BRODY: That's right.
And, then, so, of course, the Washington insider bells go ringing off. The last thing John McCain needs to do is start setting up commissions and all of the talk about that, because that just plays to the Washington insider label that the Obama campaign has been trying to tag him with, and rightfully so. He's been in Washington a long time.
BROWN: Right.
OK, guys, stay there. You're coming back. We have still got a lot to talk about.
But, when we come back, the ultra-wealthy Democrat who raised more than $100,000 for Hillary Clinton who now says she's for John McCain because she thinks Barack Obama is too elitist.
But, up next, the real McCain. Is he, as we were just discussing, the maverick outsider or the maverick insider? We're going to check it out, no bias, no bull.
This is the ELECTION CENTER -- when we come back.
(COMMERCIAL BREAK)
BROWN: John McCain is running as a maverick, an outsider taking on his own party, ready to reform Washington.
Well, now wait a minute. He also says he is a leader on the economy because of his six years as the Senate Commerce Committee chairman. You can't get much more inside-the-beltway than that. So, which is it, maverick outsider, maverick insider?
Joe Johns has been digging into that for us, no bias, no bull. And here is what he found.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): This is John McCain, Washington outsider, the sheriff who is out to clean up politics as usual in Washington.
MCCAIN: The old boy, big spender, earmarking, business as usual, me first, the nation second, old boy circuit in Washington is coming to an end.
JOHNS: He seems to be saying the country's a mess right now because those bigwigs and fat cats in Washington keep mucking everything up. It's those guys, he says, on Capitol Hill.
MCCAIN: And the fact is, I have fought them and fought them and fought them.
JOHNS: But, on the other hand, McCain is in fact, one of those guys, has been for nearly three decades.
So, this is also John McCain. When he wants to prove his qualifications, he's quick to brag that he's one of the biggest power brokers under the Capitol dome. Here's what he said Tuesday.
MCCAIN: I was chairman of the Commerce Committee. Every part of America's economy, I oversighted. I have a long record, certainly far more extensive of being involved in our economy, than Senator Obama does. I understand the economy. I know the issues.
UNIDENTIFIED MALE: Well, if that's the case, wouldn't you bear more responsibility for...
JOHNS: Mr. Washington Outsider, meet Mr. Outsider. Stick with us here.
(on camera): It seems like McCain is wrangling against Washington insiders and power brokers, but not the good ones, like him. In other words, Washington is bad, but Washington experience is good, at least for McCain, anyway, which leaves him open to attack.
(voice-over): Democratic adviser Hilary Rosen isn't buying it.
(LAUGHTER)
HILARY ROSEN, DEMOCRATIC STRATEGIST: No. I think it's really hard to say for your entire primary that you're the guy who can get things done, you have been there a long time, you know all about it, your experience is what matters, and then to go in the general election and say, I'm the guy who has always been the thorn in people's sides here. I was always, you know, somebody who didn't go along to get along. I think people are kind of confused now who John McCain is. JOHNS: But Republican strategist John Feehery says McCain's insider/outsider profile makes sense to voters.
JOHN FEEHERY, REPUBLICAN STRATEGIST: Except, he's always been an outsider. He's always battled the special interests. He's always -- he's always been a maverick against his own party. He might have been chairman, but he didn't necessarily toe the line of the Republican leadership.
JOHNS: OK, then, contradictory assertions are one thing, but, after all, this is politics, a world where Mr. Outside the Beltway and Mr. Inside the Beltway can coexist.
Joe Johns, CNN, Washington.
(END VIDEOTAPE)
BROWN: All right, thanks to Joe.
And now to the other half of the McCain ticket.
Sarah Palin says she's a maverick, too, proud to be a Washington outsider, and, certainly, she will be a change from the last eight years, right?
Well, take a look at this outsider's inner circle right now. Her top people are all veterans of the Bush White House and Bush campaign. In fact, most of her staff are Bush veterans, everybody from the former White House communications director to the deputy campaign manager for Bush 2004. Her top adviser overall is Tucker Eskew, who ran George W. Bush's South Carolina campaign in 2000 and was part of the Bush White House communications operation.
Her top domestic policy adviser who advises McCain, as well, is Doug Holtz-Eakin, who served on President Bush's Council of Economic Advisers. Her top foreign policy adviser is Steve Beigun, a former top official on President Bush's National Security Council. So does this mean that the McCain/Palin administration will change, will be a change, or a continuation of President Bush's policies? Let's see what our panel thinks.
Back with me now, David Brody, Donna Brazile, Stephen Hayes.
Steve, you saw that graphic. The Bush crowd is at the core of her entourage. Many of the McCain advisers are from Bush world too. How do you argue this isn't four more years of George Bush?
STEPHEN HAYES, "THE WEEKLY STANDARD": Well, I think you argue that because Sarah Palin has been the mayor of Wasilla, Alaska, and she's also been governor of Alaska for two years. She is about as far out of Washington as you can get. And I think most importantly from the McCain campaign perspective, she brings a mentality, sort of an outside the beltway mentality or thought process that, you know, is very different frankly from the way we all speak and live and exist in the beltway.
BROWN: But --
HAYES: She doesn't live and breathe politics the way that we all do.
BROWN: But Steve -- so did Bush. You could say -- you could have said the same thing about George W. Bush in 2000.
HAYES: Sure you could, but it doesn't mean that she's going to follow him necessarily. I mean, so did Barack Obama before he came to Washington, D.C.
I don't think -- look, some of the Bush people that are around her right now, frankly, are the smartest of the Bush people. I think Tucker Eskew, he was a very, very smart and capable communications expert in the Bush White House. I think the Bush communications team frankly wasn't very good. Tucker Eskew was probably the best of the best. It makes sense given the exposure that she's gotten and, I think, frankly, a lot of the unfair media attacks that she's gotten, for them to bring in people who have been through this before.
DAVID BRODY, CNN CONTRIBUTOR: Campbell --
BROWN: Yes, go ahead, David.
BRODY: Let me just echo a little bit about what Steve is saying. And that is, I mean, they brought in the varsity team here for her. I mean, clearly, she's a newbie to national politics. And so, really, it's just a smart political strategy, you know, from the McCain standpoint you have to surround her with the people that really know how to go to war and these folks sure do.
And look, I don't think the folks, how does this play in Peoria? I mean, do people say, well, she surrounded herself with Bush advisers, and so, therefore...
HAYES: Exactly.
BRODY: ... either she's President Bush or she's close to -- I don't think people look at it in those terms. I think they just see Sarah Palin as an outsider. She has a Teflon quality to her, Campbell, and I think we're seeing some of that play out here in the last month or so.
BROWN: Donna, do you agree with that?
DONNA BRAZILE, CNN POLITICAL CONTRIBUTOR: Well, first of all, I hope Democrats are watching this because if you want to meet some of the most seasoned bare knuckle prisoners, you know, I mean, I know them all. I worked against them in 2000 and I know them. They understand how to practice the politics of resentment, of distraction, of distortions. And I hope that Sarah Palin looks at them and says, you know what, thank you very much, but I manage to get through elections in Alaska without lying through my teeth, and I will get through this election by telling the American people the truth. We need the truth right now.
BROWN: Quickly, Steve, I'll give you the last word.
HAYES: Well, look, I think, one of the most ineffective attacks I think the Obama campaign can make is that Sarah Palin is a clone of George W. Bush. It's silly on its face. She's never been here. Who knows how much time she spent with him. It just is an association that people who are watching this aren't going to make.
BROWN: All right.
BRAZILE: Some people think that she may be worse than George Bush.
(LAUGHTER)
HAYES: You need to actually make the argument rather than just associate her with Bush people.
BRAZILE: OK, I'm prepared to make that argument.
BROWN: All right, guys.
HAYES: I know. I heard you make it effectively.
BROWN: We will continue with letting you all make your arguments at a later time. But that does it for us on the panel. David, Donna, and Stephen, thanks.
Coming up next, she is a major Democratic fundraiser, big time Hillary Clinton supporter, now a committed member of Team McCain. Lynn Forester de Rothschild tells us why she is voting Republican this November.
You're in the ELECTION CENTER. Stay with us.
(COMMERCIAL BREAK)
BROWN: Now to the political story that everybody has been buzzing about today, the prominent Hillary Clinton fundraiser and big- time Democrat who came out for John McCain. And it's not just that she is switching sides, it's what she says about Barack Obama. She calls him elitist. That word a bit surprising for someone who is married to a billionaire. So let's ask her about it.
Joining me live now, Lady Lynn Forester de Rothschild. Lady de Rothschild, is it OK if I call you Lynn?
LYNN FORESTER DE ROTHSCHILD, FMR. CLINTON SUPPORTER, FUNDRAISER: Please call me Lynn, Campbell.
BROWN: I absolutely will. So, you have to understand how ridiculous this seems to a lot of people. You're a Rothschild. You're married to a billionaire. You were a millionaire before you married him.
You're a jetsetter. You live between New York and London. And yet, you're calling Barack Obama an elitist. Are you not a member of the elite?
DE ROTHSCHILD: Let me tell you what informs my support of John McCain. I grew up in a middle class town in New Jersey. My father worked two jobs to put four children through college, law school, and medical school. We were taught that we were blessed by God to live in the greatest country in the world. And if we worked hard we could have anything.
And the truth is, I have it. I don't have to be doing what I'm doing supporting John McCain, but I am doing it because I really believe it's John McCain and Sarah Palin who will keep this country the way that I was taught this country.
BROWN: OK. But the point --
DE ROTHSCHILD: They are the great Americans.
BROWN: But I think --
DE ROTHSCHILD: So, please, you know, the class war that Barack Obama would like to declare in this country to divide people is so wrong.
BROWN: OK, we'll stop there.
DE ROTHSCHILD: I have basic --
BROWN: Just stop there for a second. Let me ask you a question because you didn't answer my question. I assume, I guess that you came up through a middle class background. But I was accurate in describing your lifestyle, is it not?
(CROSSTALK)
DE ROTHSCHILD: Let me -- right, you did. You described my lifestyle.
BROWN: OK. But let me ask you specifically to tell me, then, what has Barack Obama said that has caused you to come to this conclusion that he is so elitist and out of touch?
DE ROTHSCHILD: OK. I wrote this piece in the "Wall Street Journal" last week if you want to look at it. What I said is that the Democratic Party has a very bad history with the likes of Adlai Stevenson and people who think they are grander than the rest of us.
Barack Obama --
BROWN: So what makes you think -- what's he said that makes you think this guy thinks he's grander than the rest of us? Specifically, be specific.
DE ROTHSCHILD: You know what? OK, a lot of it is you know it when you see it. This is a person who went to Berlin to speak to 200,000 people. This is a person who made speeches about how he is the one that the world has been waiting for. He came into this campaign talking about audacity. Where I come from, audacity is not a good thing. It's modesty and simplicity and being in politics to help people...
BROWN: OK.
DE ROTHSCHILD: ... not to advance yourself.
BROWN: But -- but --
DE ROTHSCHILD: That's why I admire John McCain. What I said in my piece --
BROWN: But let me ask you -- let me ask you about the issues here, because if you look at the major issues in this election, the war in Iraq and the economy, what everybody in all the polls says are the most important issues in this race. Hillary Clinton, the candidate you supported and you worked hard for, she could not be any more different than John McCain on these issues, but her positions are nearly identical to Barack Obama.
So it sounds like the issues aren't important to you, aren't what you're voting for. You're voting on personality, right?
DE ROTHSCHILD: Campbell, no, you are so wrong. First of all, Hillary Clinton is not in this race. So let's talk about John McCain and Barack Obama. No one --
BROWN: But the whole point of you being here, Lynn, let's be honest, is that you were one of Hillary Clinton's biggest supporters and biggest fundraisers so you making a switch is what's making news. Anybody else making a switch wouldn't make news. So I'm trying to get at what it is about Hillary Clinton and Barack Obama who are identical in all of these --
(CROSSTALK)
ROTHSCHILD: OK, let me tell you -- let me tell you why I am a Democrat. I am a Democrat because I believed -- I believed in the Democratic Party's sense of fairness, sense of fair rules, and most of all, that they would be there to protect the middle class, the family I came from, the town I came from, the people I care about, the people who make America great. I believe in this -- OK. Let's take energy policy.
(CROSSTALK)
BROWN: But you're not giving me any specific reason why you think that Barack Obama is not going to protect the middle class.
DE ROTHSCHILD: OK. Let's take energy policy.
George Bush put forward an energy bill that gave billions of dollars to big oil. Who voted for that? Barack Obama voted for it with President Bush. John McCain voted against it because he said he will not put government subsidies into big corporate hands. OK. BROWN: All right.
DE ROTHSCHILD: Let's look at earmarks. Let's look at the way Barack Obama went to the Senate and earmarked over $830 million to special interests...
BROWN: So let me --
DE ROTHSCHILD: ... including the bridge to nowhere, including $1 million to the employer of his wife.
BROWN: Right.
DE ROTHSCHILD: OK. And John McCain will not do that. That's principle. This country needs principle and courageous leaders.
BROWN: All right. Lynn, let me ask you finally. I mean, I understand you're still a Democrat. You're not going to leave the party.
DE ROTHSCHILD: Right.
BROWN: To some people invariably, it's going to sound like you're bitter. Hillary Clinton didn't get the nomination, this is your way of getting even.
DE ROTHSCHILD: You know what, Campbell? Barack Obama went and he called the people who have guns and cling to their religion bitter. The people out, you know, who are the rednecks or whoever are bitter. If bitter is the easiest way for you to rationalize that I truly with all my heart believe that John McCain will be a great president, then call me bitter. But it doesn't really advance the dialogue, Campbell, sorry.
BROWN: All right.
Well, thank you for being here, Lynn Forester de Rothschild. Appreciate your time tonight.
DE ROTHSCHILD: Thank you. It's nice to be with you.
BROWN: We are going to switch back to our top story, and that is the mess on Wall Street.
Coming up next, it's already Thursday morning in Asia. Those markets reeling. Ali Velshi coming back with an update when we come back.
(COMMERCIAL BREAK)
BROWN: We got an update now on our breaking news. Because of the crisis on Wall Street, the Asian markets are falling in early Thursday trading. Ali Velshi back to bring us up to speed. What's going on?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: We've just had openings in Australia and in Hong Kong, and in Tokyo not in Hong Kong, I'm sorry there, both down more than three percent right now. So the effect of what happened in U.S. markets is starting to play through to Asia.
I want to remind you, we dropped more than four percent today in the United States so we're still waiting to see. We'll keep you up to date obviously throughout the evening.
I also want to tell you a little bit more about Washington Mutual. We are following up on a story of what is happening with Washington Mutual. We understand that one of the major shareholders in Washington Mutual, a group called Texas Pacific Group, has said that it will not stand in the way of a sale of Washington Mutual, even though it would dilute that company's shares. It would make their holding in Washington Mutual worth a little less.
The indication there is that Washington Mutual may be preparing itself to be put up for sale. We don't know that they are doing that, but it does seem to fit in with all of the trading patterns and all of the information that we have.
BROWN: All right, Ali. We will keep keeping track...
VELSHI: We will.
BROWN: ... for everybody throughout the night as you said earlier.
VELSHI: Yes.
BROWN: Good to have you, Ali Velshi.
We'll be right back. Stay with us.
(COMMERCIAL BREAK)
BROWN: In just a few minutes, all about your money and your vote on "LARRY KING LIVE." Larry, let's talk about what's coming up?
LARRY KING, HOST, "LARRY KING LIVE": You betcha, Campbell. The stock market in freefall again today, and before you panic, let's take a deep breath and hear what our guests have to say.
And Donald Trump is here. And Dave Ramsey is joining us, and so is CNN's own Ali Velshi. They'll try to explain things. And Ben Stein and Robert Reich are going to weigh in. We'll get the financial bases fully covered.
We're also going to talk about, guess who? Sarah Palin who goes off script today. It's all next on "LARRY KING LIVE" -- Campbell.
BROWN: All right. Thanks, Larry.
Coming up next in the ELECTION CENTER, five battleground states that could decide the presidential race. The latest CNN/"Time" magazine Opinion Research poll results paint a fascinating picture of the political landscape. We're going to have the numbers for you coming right up. Stick around.
(COMMERCIAL BREAK)
BROWN: Tonight, we've got some brand new and frankly pretty eye- opening poll numbers from five states that will be absolutely crucial in deciding the presidential election. Now, remember, because of the electoral college, it's all about winning individual states.
Tonight, chief national correspondent John King is in a state that always goes down to the wire, Florida, of course. And it is one of the states covered in our new CNN/"Time" magazine Opinion Research poll.
John, four years ago, Bush carried Florida by five points. But it is going to be a very tight race this time, isn't it?
JOHN KING, CHIEF NATIONAL CORRESPONDENT: Without a doubt, Campbell, you say the state always go down the wire. I'm in Palm Beach County, remember the recount? But where are we tonight? Our new polls show McCain 48 percent, Obama 48 percent. So with seven weeks to go, Florida, again, a critical battleground, 27 electoral votes here.
We are watching today, Campbell, one of the big subplots here is the competition for Jewish votes here in southern Florida. It's an advantage for the Democrats usually, but the McCain campaign is fighting hard. As always, Florida is fascinating.
BROWN: And John, Ohio, next, the economy a huge issue there. It's got 20 electoral votes. How is it shaking out?
J. KING: And it is cliche, but true, Campbell. No Republican has ever been elected president without winning Ohio. George W. Bush obviously carried it twice.
Where does it stand tonight? We have it at 49 percent for Barack Obama, 47 percent for John McCain. So statistically, that's a dead heat. That's good news for the Democrats because just like here in Florida, that was a red state last time. The Republicans on defense in a state they have to win, Campbell.
BROWN: And another key toss-up, Wisconsin. Democrats want to keep it. How are they doing there?
J. KING: This one is somewhat encouraging to the McCain campaign. Our poll shows Barack Obama winning 50 percent to 47 percent. Now, if you're Barack Obama and you're at 50 percent, that's a good thing. You want to get 50 percent or above in all of these battleground states. But John McCain is still within the margin of error there. The Sarah Palin pick has helped the Republican base in a state like Wisconsin.
The Democrats did carry it last time, but the Republicans think it is a possibility. So both campaigns look at those numbers and see something to be happy about, but Wisconsin also going down to the wire, Campbell. BROWN: And all of them are, John. Indiana traditionally red, a red state, but Obama thinks he may have a shot there, doesn't he?
J. KING: He thinks he has a shot there. We were there over the past several days, and they are trying to turn out new voters, register new voters. This state seems to be going back to its DNA, that is Republican. Seems to be breaking for McCain right now. Still close, 51 percent for McCain, 45 percent for Barack Obama.
The Obama campaign thinks those new voters, all the registration can make the difference and defy the polls in the end. But if you're the McCain campaign looking at all these battleground states, there is one to feel a little bit easier about, a little bit happier about tonight. They're above the 50 percent mark again. That's that critical threshold.
BROWN: All right. But what about North Carolina because that's one a lot of people have been talking about. Bush won big there. Democrats say they do think they have a shot?
J. KING: Bill Clinton always wanted North Carolina, Campbell, and he always came up just short. Our new poll shows Barack Obama is within striking distance. It actually shows him ahead 48 percent to 47 percent. He's counting on huge African-American turnout there like he did in the primary.
So our poll, 48-47 encouraging to Barack Obama. But we also want to show you a poll of polls. This is a compilation, an averaging of several recent polls because most of the other polls in North Carolina in recent days have shown John McCain pulling out a head a little bit.
If you look at the poll of polls, again, that's an averaging of several polls. We have McCain at 52, Obama at 42, and six percent still undecided. Obviously, North Carolina, a battleground to the end, and there's a little bit of conflict among the pollsters as to whether just how tight it is. Maybe we'll get there next week, Campbell.
BROWN: All right. One to keep watching. A lot to keep watching.
J. KING: Absolutely.
BROWN: John King for us tonight. John, as always, thanks.
So figuring in all of our latest polls, here is where the CNN electoral map stands tonight. The yellow states, too close to call. So we left out their electoral vote totals. But if you add up the blue states, Barack Obama has 233 electoral votes. Add up the red states, John McCain has 189. Neither man has the 270 needed to win the White House.
So we do know the race is close, the question is why and will it boil down to issue number one, the economy?
Some answers from "Time" magazine senior political correspondent, Mark Halperin, when we come back.
(COMMERCIAL BREAK)
BROWN: For the past few weeks, John McCain has been the one with the campaign mojo, so why is the race still so tight with just 48 days to go until Election Day? Here to help us break it all down is the senior political correspondent for "Time" magazine, Mark Halperin.
And, Mark, welcome to you. We just went through all of the battleground poll numbers with John King a second ago. So everybody is kind of up to speed here. You saw big convention bounces, frankly, from both campaigns and certainly a lot of mojo, as we've just said, with John McCain and with Sarah Palin over the last week or so. But polls seem to be leveling out. Certainly extremely tight at this space. What's your take on everything?
MARK HALPERIN, "TIME" MAGAZINE: Well, I think the tightness is really what's so striking. Three of the five polls in our -- of the state polls in our survey are true battlegrounds, Wisconsin, Florida and Ohio. And they're all within the margin of error, also very close. And, of course, two of those are red states. Ohio and Florida are states that if Barack Obama can win, he'll probably be the next president of the United States.
The Obama campaign has to be hardened by the fact that even after a very bad two weeks, probably their worst two weeks of the general election, Obama is still in the hunt nationally and he's still in the hunt in those key battleground states.
BROWN: And, Mark, talk to us about the economy because it has dominated certainly in the last 48 hours, and beginning to dominate in this campaign. And these polls also showing that voters increasingly are dividing along economic lines, aren't they?
HALPERIN: Well, these two candidates like all presidential candidates dream of encroaching on the other guy's turf, not just in terms of states, but in terms of demographic groups. John McCain would like to say he's a populist. He can appeal to working class Americans, lower-income Americans who generally vote more for the Democratic Party.
Barack Obama would like to say he can appeal to upper income Americans, maybe not strictly on economics, but on other issues, as well. As we get closer to Election Day, I think we're going to see in other polls what these polls suggest, which is the people are going back to their normal partisan positions and that's one reason why these polls and the national polls are so close because the election is getting closer. People are getting more focused and you're seeing people coming home to their natural bases. That means in all likelihood we're not going to have a blowout. We are going to have a close election barring one of these two candidates having a real collapse.
BROWN: So do you think and give me your analysis of this, that we're pre-debate still. I mean, three debates, sanctioned debates to go. Are we reading too much into the polling at this stage of the game? Should we all be a little more patient, which is impossible, but should we be?
HALPERIN: Well, I mean, look, it's a snapshot. We always have to keep that in mind with polls. As John King pointed out, you also want to look at other polls.
I think these polls are certainly reflective of several realities, including that Obama has withstood a very hard pummeling in the last two weeks. McCain has not surged ahead in these key battleground states, which he might have done.
The other thing it shows is it is very, very tight. And these candidates are going to be cautious and look for opportunities to take risks, like on the economy, which they must do now.
BROWN: "Time" magazine's Mark Halperin for us tonight. Mark, good to see you. Thanks for joining us.
HALPERIN: Thanks, Campbell.
And that it is from the ELECTION CENTER. Thanks everybody for watching.
"LARRY KING LIVE" starts right now.
