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Dow Plunges; Interview With McCain Economic Adviser Nancy Pfotenhauer
Aired October 06, 2008 - 15:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEOTAPE)
RICK SANCHEZ, CNN ANCHOR (voice-over): Coming at you now: the Dow downright scary for investors. Wasn't the bailout supposed to fix this? You know, that bailout, the one that includes money for rum- makers, wooden arrows, and Alaskan fishermen.
But, as the economy tanks, guess what these guys are talking about? Palin and McCain hammer Obama over something that happened when he was eight years old.
GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: I'm afraid this is someone who sees America as imperfect enough to work with a former domestic terrorist.
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: We're -- we're not going to let John McCain distract us. We're not going to let him hoodwink you.
SANCHEZ: And Obama points out McCain's Keating Five missteps from almost 20 years ago, this while Americans scream with one voice, it's the economy, stupid.
What you're telling us, your comments, unfiltered on Twitter, Facebook, and more, like nowhere else. Your newscast starts now.
(END VIDEOTAPE)
SANCHEZ: Hello again, everybody. I'm Rick Sanchez.
Boy, before we do anything else, let's take you right to the latest numbers that are coming across on the Dow. Claude (ph), go ahead and take those numbers, if we can. Let's see where this thing stands. This has suddenly become the most important theme of this newscast, no doubt.
It's been really a slow and steady decrease throughout the course of the day, like drip, drip, drip. And there's another part of this. It's what you have been saying.
In fact, let's go to our Twitter board if we can as we start this hour, as we often do. This is men and women all over the country by the thousands who have been sending me their notes and comments and responses.
Look at this one. She just sent me this. This is littleworks. She said: "Rick, I am waiting for my monthly statement and scared to death."
That's because of what's going on with the market. Ali Velshi is going to be joining us in just a little bit to talk exclusively about why the market is doing this. Obviously, we're going to keep that picture up.
Remember, earlier in the day, there was talk that if this thing hit the 10 percent point, they would actually have to slow it down or even stop the market entirely. We're way beyond that now. But what is it? It's two minutes after the hour. For the next 58 minutes, we are going to be taking you through this and bringing in all of the folks who are going to give us the proper information.
While we have been watching this, by the way, here's what's interesting about this. There are some CEOs, one specifically with Lehman Brothers, who has been grilled on Capitol Hill, grilled about the way he has dealt with some of the bonuses, knowing that this was coming down the line.
The question of greed comes up, as do many others. All right. This is Dick Fuld. He's the CEO of Lehman Brothers. I want you to watch now as he's grilled by Henry Waxman, Congressman Henry Waxman, on this committee today.
Take it, Claude.
(BEGIN VIDEO CLIP)
REP. HENRY WAXMAN (D-CA), GOVERNMENT REFORM COMMITTEE CHAIRMAN: That, since 2000, you have taken home more than $480 million. That's almost half a billion. And that's difficult to comprehend for a lot of people. Your company is now bankrupt. Our economy is in a state of crisis. But you get to keep $480 million.
I have a very basic question for you. Is this fair?
RICHARD FULD, CEO, LEHMAN BROTHERS: We had a compensation committee that spent a tremendous amount of time making sure that the interests of the executives and the employees were aligned with shareholders. My employees owned close to 30 percent of our company.
And that was because we wanted them to think, act, and behave like shareholders. When the company did well, we did well. When the company did not do well, sir, we did not do well.
(END VIDEO CLIP)
SANCHEZ: But that's actually the point that's in question. That's CEO Dick Fuld today being grilled. We have got more video like that that we're going to showing you over the next hour, down now at 675, as I watch it, by the way.
And the question is this. Was Dick Fuld and others like him, were they steering money to their executives, while at the same time knowing that they were going to have liquidity problems, and actually asking for a rescue from you and from me, from the American taxpayer? That's an important issue that we're going to pick up in just a little bit.
Before we do anything else, let's bring in Ali Velshi now. Ali Velshi has been watching the market today.
Ali, you there?
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes, I'm here, right here, Rick.
SANCHEZ: Let's start with the market itself. Before we even get into Fuld and some of those CEO issues...
VELSHI: Yes.
SANCHEZ: ... here's what I think people at home would want to ask you, if they could talk to you directly. Why is it that we pass this bailout and now the market doesn't seem to be showing any signs of life despite...
VELSHI: Yes, good question. And I want to remind people, the bailout -- as I said, why we needed a bailout is because the credit markets are frozen. And the credit markets affect you by getting you loans, getting loans to people who need to buy your house, let's say, and getting loans to your company, so that they can make operating expenses, like payroll.
You will notice, in two-and-a-half weeks, I never mentioned it's going to be about stock market. The bailout is not meant to bail out the stock market. The stock market is not an independent entity of the economy. It is a measure of whether people are buying or selling companies that they're going to make money off of.
So, the stock market was never meant to be the root cause. Now, you would expect after that bailout bill was passed, we would have see a more positive reaction. But buried in all that stuff on Friday was a report that we had lost 159,000 jobs, bringing this year's total to three-quarters-of-a-million.
Now, Rick, that's the single most important thing. To your viewer who had sent you that Twitter message to say, I'm scared, I'm waiting for my statement, I mean, I'm scared to death. The scared to death doesn't help. The panic doesn't help. Don't bother being about that.
When markets are tripping, people over themselves to get in and they always get in too late. So, don't panic about this. Now, there are two good things happening here. One is that we're only off -- only off -- 642 points. We were off 800 points. We watched the market very closely in the last hour, particularly the last 15 minutes, to see how things are going.
The fact that the market is going up and down, on the downside, but it's moving, it's not consistent, tells me that this isn't people bailing out of the market. There is a buyer for everybody trying to sell a stock today. A very serious market is when you're trying to sell stocks and there are no buyers at any point. Now, at this point, the market would have to be down 2,200 points to stop trading for the rest of the day. And that is not likely to happen. So, again, this is not as disorderly as it looks. And for those of you with 401(k)s, your loss will be very reflective of the loss on the S&P 500 and the Dow, about 25 to 30 percent. So, if you didn't make any bad decisions, hold on and don't panic -- Rick.
SANCHEZ: Yes, and I guess all we can do is just watch this thing. And that's what we're going to do, by the way.
VELSHI: Right.
SANCHEZ: Throughout the course of this newscast, we're going to have that number up and you're going to able to see it for yourself. If it stays pretty much where we are right now, it's a disappointment. If it goes much lower, then we're going to be bringing Ali back and having another discussion about this, because there is a lot of anxiety out there.
VELSHI: Right.
SANCHEZ: A second issue, that's the one about the greed, the avarice, what's been going on with folks like the CEO of Lehman Brothers.
Ali, hold on. Hopefully, we will be able to get you back. And we're going to have further discussions on that, because that's really been the buzz point today on Capitol Hill. Thanks, as usual, Ali.
So, here's a question. With this conversation that we have just had with Ali, why is it that Barack Obama and John McCain and Sarah Palin this weekend are talking about something different, not specifically addressing the economy? I will give you an example.
John McCain is talking about Bill Ayers and his links to Barack Obama. Barack Obama is talking about John McCain and his links to the Keating Five that happened, what, 1989? It seems like a bit of a disconnect.
In fact, folks have been reaching me all day long and asking me that very question.
Let's go to our Twitter board, if we possibly can. This is what people are saying. Here it is.
This is Davenport, D. She says: "Both are a joke. My kids' college fund is flaming. Can these guys talk about that?"
"I was hoping for Obama/McCain since early last year. This isn't what I had in mind. These two great men have sunk to the occasion."
This one, I read to you just a little bit, awhile, about somebody being scared to death.
"Finally, the bailout package was to do was the wrong thing to do," somebody upset about that. "Most people don't care about Keating and Ayers. It's the economy" -- left out the world stupid. "It's starting to hit home on Main Street."
Let's do this. Let's bring in somebody from the McCain side on this now.
Nancy Pfotenhauer is spokesperson for John McCain.
You hear what people are asking. Why are you talking about something that someone did when Barack Obama was 8 years old, when the economy seems to be in a meltdown?
NANCY PFOTENHAUER, MCCAIN CAMPAIGN POLICY ADVISER: Well, you know, Rick, that's not the only thing we're talking about.
In fact, if you actually listen to the entire speech or follow what Senator McCain and Governor Palin are saying, certainly, what you will find out is that most of their emphasis, probably a good 75, 80 percent of it, is on the economy, and rightfully so.
And in fact, Senator McCain showed how concerned he was by even suspending his campaign, pulling some $12 million in advertising off the air, when we were only 40 days out from the election, in order to come back to Washington and do the people's business.
SANCHEZ: But here's the...
PFOTENHAUER: So, it's a very, very high priority, Rick. And I think that that needs to come through.
SANCHEZ: But here's Sarah Palin Saturday, Sunday, and now this morning as well. In fact, she's in Clearwater, Florida. What's one of the first things she brings up in her speech? This. Here it is.
(BEGIN VIDEO CLIP)
PALIN: It turns out one of his earliest supporters is a man named Bill Ayers.
(BOOING)
PALIN: And, according to "The New York Times," he was a domestic terrorist and part of a group that -- quote -- "wants to campaign of bombings that would target the Pentagon and our U.S. Capitol."
(END VIDEO CLIP)
SANCHEZ: And what's interesting now is, Nancy, that Barack Obama's firing back with a 13-minute documentary that people can find on the Internet now talking about the Keating Five and John McCain, again, the opposite of what most Americans are thinking about right now.
PFOTENHAUER: Well...
SANCHEZ: Do we have a clip of that?
Let me show you a clip of that, Nancy. Here it is.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Fraud is the creation of trust and then its betrayal.
UNIDENTIFIED MALE: Many of our fellow citizens apparently believe that your services were bought by Charles Keating.
UNIDENTIFIED MALE: The Keating Five involved all the things that have brought the modern crisis. Senator McCain has not learned the lessons.
(END VIDEO CLIP)
SANCHEZ: All right, I think we have seen enough of that.
If you add this up, this stuff is 60 years old.
PFOTENHAUER: Well, and, Rick, the whole point is, we have mentioned it in a couple of speeches. Obviously, it struck a chord, because Barack Obama's campaign came out and did a preemptive negative campaign ad, which is pretty -- pretty interesting from a tactical standpoint.
But, you know, the bottom line is, we emphasize this because it's part and parcel, his distancing...
(CROSSTALK)
SANCHEZ: Nancy, I'm just going to interrupt you for a minute.
PFOTENHAUER: OK.
SANCHEZ: When you do that, Nancy, don't you invite -- look, I will tell you something right now. Keating and John McCain have never come out of my lips during this newscast in the four or five years that I have been anchoring the news at CNN. Never. I just didn't think and many people didn't think it was an issue, because it tends to be old news.
(CROSSTALK)
SANCHEZ: But, when you talk about Obama's record, suddenly it becomes a documentary and now news stations are covering it. Did you invite it?
(CROSSTALK)
PFOTENHAUER: Rick, it's very important to draw attention to this for a couple of reasons, the most important being that Barack Obama says whatever he needs to say in front of whatever group he happens to be in, which is why the Barack Obama running in the general election is very, very different from the Barack Obama running in the primary election.
And so when Mr. Ayers was useful to Barack Obama, then Barack Obama hung out with him. As soon as he became a senator, he didn't. But you have got him, I mean, in meetings with him in '95, theoretically launching his political career, or at least having an early -- one of his very early meetings there.
SANCHEZ: Yes. Yes. No, I got it.
PFOTENHAUER: In '97, endorsing his book, serving on boards with him through 2002, exchanging voice mails and e-mails with him through 2005.
SANCHEZ: I understand.
(CROSSTALK)
PFOTENHAUER: So, I just think that, Rick, when you take the fact that he jettisons things over the side whenever it's inconvenient, whether it's his pledge about public financing, whether it's his past position on tax increases, the FISA bill, everything.
(CROSSTALK)
SANCHEZ: Pardon me for interrupting.
I think I get that. I think most people do. I think the question the American people have is, with all this going on right now, why are both men -- not just John McCain -- why is John McCain talking about Bill Ayers and why is Barack Obama talking about, you know, the Keating Five, when a lot of people would consider that to me more of a relicy, sort of historic point?
But we will continue talking about it. And you defended your position well.
Nancy, thanks so much for -- Pfotenhauer -- thanks so much for joining us.
And we will continue the discussion.
By the way, on the other side, we have Barack Obama's reaction to that ad that we had just shown and the words by Sarah Palin. We are going to have that for you. He was on the Tom Joyner show today. He was interviewed about this by Roland Martin, in fact. And we're going to have that tape for you.
Also, who is Bill Ayers and what is the Keating Five? We're in a position now where we have to give you the proper information, so you can know. We have some independent analysts who are going to bring you that information.
Also, John McCain is going to be speaking any moment now. Obviously, one of the pivotal questions here, is he going to be talking about the economy or is he going to be talking about some of the things that we were just discussing there? Meanwhile, importantly, the market, 573, good sign. It was up around 700 just about 20 minutes ago.
Stay with us. A lot going on. We will keep that up and we will be right back. I'm Rick Sanchez.
(COMMERCIAL BREAK)
SANCHEZ: You are talking to us, and we're talking to you.
Let's start -- let's go ahead, Robert, and start over here. Go with the Twitter one right there. All right, stop on the Twitter one. "Keating Five is directly related to the economy, Ayers not so much." That's one person's opinion.
Now let's go over to Facebook, on the Facebook board. Look at that one. Victoria is watching our show. And she sent me this message moments ago. She says: "Look, financial crisis really hit home for me today when my student loans had not disbursed to my university. Can we please get over Bill Ayers and the rest and get back to the economy?"
She doesn't want Americans, she doesn't want politicians talking about these things. But they are. And Barack Obama was talking about it this morning when he was asked about the comments made by Sarah Palin about his relationship with Bill Ayers.
I want you to listen now to what Obama said. This is to Roland Martin this morning on the Tom Joyner show. Here it is.
(BEGIN AUDIO CLIP)
OBAMA: I think it's unfortunate, first of all, just the facts. Mr. Ayers is somebody who lives in Chicago. He's a professor at the University of Chicago -- University of Illinois. He teaches education. And he engaged in these despicable acts 40 years ago, when I was 8 years old. I served on a board with him. And so now they're trying to use this as guilt by association.
And, as you said, they have explicitly stated that what they want to do is to change the topic, because they don't want to talk about the economy and the failed policies of the last eight years.
(END VIDEO CLIP)
SANCHEZ: Here's what we want to do for you now. We are going to try and drill down on this, because if the question is out there, it's only fair for us here at CNN to try and give you as many facts as we can.
So, we want an independent observer, somebody who has been following the politics of Chicago for a long time.
She is joining us now. She is the D.C. bureau chief of "The Chicago Sun-Times." Lynn Sweet is with us. Lynn, let's try and drill down on this, if we possibly can. Maybe you can just cut to the chase for us. Is there any culpability on Barack Obama's part in his links or association with Bill Ayers?
LYNN SWEET, "THE CHICAGO SUN-TIMES": Well, nothing in his present political career rises to the level of the McCain campaign criticism.
Yes, they knew each other. No, Ayers was not pivotal in launching the Obama campaign.
SANCHEZ: Who is Ayers? Tell us who Bill Ayers is, for those who have no idea who we're even talking about.
SWEET: OK. I will give you the present. Then I will do the past real quickly.
Real quickly, right now, as Obama said, he is well-regarded in Chicago civic circles, including with Mayor Daley, as somebody who specializes in urban education. That's the present.
The past, he was a member of the Weather Underground, as his wife, Bernadine Dohrn, and that was a group that did advocate violence during the -- during the Vietnam War era. They were on the lam for a number of years. They surfaced, never charged with any -- they were charged, never convicted, went on to get advanced degrees, he in his doctorate in Columbia in education, and his wife went on to get a law degree. They became accepted members of Chicago civil society.
Now, you may argue with that as to how that happened, but that's their story, not Obama's story. By the time he came on the scene, their past was known to a lot of people. I certainly knew about it as a reporter working in Chicago. They were pretty well-known for their past, as well as their present.
SANCHEZ: What about Obama's relationship with him? Why does Obama even know him? How did he meet him and was it happenstance or did he seek him out?
SWEET: Well, they know him, because, if something else, Hyde Park is a very insular neighborhood, and they did live near each other, but, more important, they were on boards together.
But Bill Ayers had nothing to do with Obama being on these boards. They happened to be on boards together. And Obama got on these boards through his own connections and through other circles. But when you deal with this community within Chicago, Hyde Park, it's not unusual for people to know each other, just as in the neighborhood where you might live or I live, you run into people all the time who have overlapping circles.
So, a few things in this story, Rick, can be true at one time, but for the hard-core political implication that there is some current association that Obama has, no.
SANCHEZ: You don't see it? (CROSSTALK)
SWEET: Did he launch him on his political career? No. Was he an early supporter? Yes.
SANCHEZ: Lynn Sweet is with "The Chicago Sun-Times." And she's good enough to join us to parse this out somewhat.
All right, John McCain is going to be speaking in just a little bit. I want to let you know that we're going to take that in full. As soon as John McCain starts speaking, we will take you there, let you hear what he has to say about the economy, about these other current stories that we're following.
We will be right back. I'm Rick Sanchez.
(COMMERCIAL BREAK)
SANCHEZ: And we welcome you back. I'm Rick Sanchez here in the world headquarters of CNN.
Obviously, we're watching the market for you. There it is at 546. It's had a lot of people very frightened today. It's interesting, though. There is an incredible disconnect on this day that we have been trying to show you between what the candidates are saying and what the people of the United States are thinking about it, including the voters.
Let's go ahead to the Facebook board, if we possibly can. Look at this comment that just came over on Facebook: "How can we care about the misleading rhetoric about terrorist links and about the Keating Five when the real terrorists are the CEO fat cats who are terrorizing the economy?"
Obviously, that's what a lot of people are thinking about today, even though the politicians seem to be talking about something else.
By the way, just to be fair, program note. I just did an interview moments ago on trying to drill down on who Bill Ayers is, for the benefit of the viewers who maybe didn't know who he was and don't understand what this whole controversy is about. Tomorrow, we're going to have an independent analyst on this show during this hour who will drill down for us the Keating Five and whatever John McCain's association with that was or wasn't.
So, expect that here tomorrow. To be fair, we want to make sure what we do for one, we also do for the other. Speaking of John McCain, I do believe we have a picture of him now. Let's go ahead and put that up, see if he's started.
He's starting to speak. Let's dip into John McCain and see what subject he's addressing on this day. Let's take it live. Go.
(JOINED IN PROGRESS)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: ... the experience and the knowledge and the judgment to do that.
(APPLAUSE)
MCCAIN: Friends, Washington is still on the wrong track, and we need change. The status quo is not on the ballot.
We're going to see change in Washington. The question is, in what direction do we go?
(APPLAUSE)
MCCAIN: Will our country be a better place under the leadership of the next president, a more secure, prosperous, and just society? Will you be better off in the jobs you hold now and the opportunities that you hope for?
Will your sons and daughters grow up in the kind of country you wish for them, rising in the world and finding in their own lives the best of America? And which candidate's experience in government and in life makes him a more reliable leader for our country and commander in chief for our troops? Which one?
(APPLAUSE)
MCCAIN: Who's ready to lead? In time of trouble and danger for our country, who will put our country first?
AUDIENCE: McCain!
MCCAIN: My friends, I set out on my own campaign for president many months ago. I promised at the beginning to be straight with the American people, knowing that even those who don't agree with me on everything would expect at least that much.
I didn't just show up out of nowhere.
(LAUGHTER)
(APPLAUSE)
MCCAIN: After all, America knows me. You know my strengths and my faults. You know my story and my convictions. And though familiarity in politics can be both helpful to a candidate or not so helpful, it does at least fill out the picture and answer the essential question. You need to know who you're putting in the White House and where the candidate came from and what he or she believes.
(APPLAUSE)
MCCAIN: And you need to know before it's time to choose. In 21 months, my friends during hundreds of speeches, town halls and debates, I have kept my promise to level with you about my plans to reform Washington and get this country moving again.
As a senator, I have seen the corrupt ways of Washington and wasteful spending and other abuses of power. And, as president, I'm going to end them, whatever it takes.
(APPLAUSE)
MCCAIN: I will propose and sign into law reforms to bring tax relief to the middle class and help to businesses, so they can create jobs. I will get the rising cost of food and gas under control.
I will help families keep their home and help students that are struggling to pay for college.
(APPLAUSE)
MCCAIN: I will make health care more accessible and affordable. I will impose a spending freeze on all but the most vital functions of government.
(APPLAUSE)
MCCAIN: I will review every agency of the federal government, improve those that need to be improved, and eliminate those that aren't working for the American people.
(APPLAUSE)
MCCAIN: I will confront the $10 trillion debt, the $10 trillion debt on you that the federal government has run up. And I will balance the federal budget by the end of my term in office.
(APPLAUSE)
MCCAIN: This is the agenda that I have set before my fellow citizens. And the same standards of clarity and candor must now be applied to my opponent.
Even at this late hour in the campaign -- there are there are essential things we don't know about Senator Obama or the record that he brings to this campaign.
(APPLAUSE)
MCCAIN: Now, we've all heard what he's said, but it's less clear what he's done or what he will do.
(APPLAUSE)
MCCAIN: What Senator Obama says today and what he's done in the past are often two different things. He's often changed his positions in this campaign. And the best way to determine where he would really take this country is to examine where he's tried to take it in the past.
My opponent has invited serious questioning by announcing a few weeks ago that he would "take off the gloves." Since then, whenever I've questioned his policies or his record, he's called me a liar. Rather...
(BOOS)
MCCAIN: Rather than answer his critics, Senator Obama will try to distract you from noticing that he never answers the serious and legitimate questions he's been asked.
(APPLAUSE)
MCCAIN: So let me reply in the plainest terms that I know. I don't need lessons about telling the truth to the American people. And were I ever to need any improvement in that regard, I probably wouldn't seek advice from a Chicago politician.
(APPLAUSE)
MCCAIN: You know, my opponent's touchiness every time he's questioned about his record should make us only more concerned. For a guy who's already authored two memoirs, he's not exactly an open book.
(APPLAUSE)
MCCAIN: You know, it's as if somehow the usual rules don't apply. And where other candidates have to explain themselves in their records, Senator Obama seems to think he's above all that. Whatever the question, whatever the issue, there's always a back story with Senator Obama.
All people want to know is what has this man ever actually accomplished in government.
(APPLAUSE)
MCCAIN: What does he plan for America?
In short, who is the -- who is the real Barack Obama?
But my friends, you ask such questions and all you get in response is another angry barrage of insults.
Our current economic crisis is a good case in point.
What was his actual record in the years before the great economic crisis of our lifetimes?
This crisis started in our housing market in the form of subprime loans that were pushed on people who couldn't afford them. Bad mortgages -- bad mortgages were being backed by Fannie Mae and Freddie Mac. And it was only a matter of time before a contagion of unsustainable debt began to spread.
This corruption was encouraged by Democrats in Congress and abetted by Senator Obama. Interestingly -- interestingly, Senator Obama has accused me of opposing regulation to avert this crisis. I guess he believes that if a lie is big enough and repeated often enough, it will be believed.
But the truth is I was the one who called at the time for tighter restrictions on Fannie Mae and Freddie Mac. And it could have helped prevent this crisis from happening in the first place. Senator Obama was silent on the regulation of Fannie Mae and Freddie Mac. And his Democratic allies in Congress opposed every effort to reign them in -- every single one. That's a matter of record.
As recently -- they did. As recently as September of last year, he said that subprime loans have been "a good idea." Well, Senator Obama, that good idea has now plunged this country into the worst financial crisis since the Great Depression. You know, to hear him talk now -- to hear him talk now, you'd think he'd always opposed the dangerous practices at these institutions. But there is absolutely nothing in his record to suggest he did. Nothing. Zero. Zippo. Nada.
(APPLAUSE)
MCCAIN: And I want to tell you, he was surely familiar with the people who were creating the problem. Yes, he knew them. The executives of Fannie Mae and Freddie Mac have advised him and he has taken their money for his campaign. He has received more money from Fannie Mae and Freddie Mac than any other senator in history, with the exception of the committee...
(BOOS)
MCCAIN: ...with the exception of the chairman of the committee overseeing him. My friends, while he was taking that money, did he ever talk to the executives of Fannie and Freddie about these reckless loans?
UNIDENTIFIED SUPPORTERS: No!
MCCAIN: Did he ever discuss with them the stronger oversight I proposed?
UNIDENTIFIED SUPPORTERS: No!
MCCAIN: You know, if Senator Obama is such a champion of financial regulation, why didn't he support these regulations that could have prevented this crisis in the first place?
(APPLAUSE)
MCCAIN: You know -- you know, he won't -- he won't tell you, but you deserve answer.
(APPLAUSE)
MCCAIN: Even after he refused to lift a finger to prevent this crisis, when the crisis hit, he was missing in action. He didn't even start making calls to round up votes until after the rescue bill failed in the House and the markets crashed. We continue to see the price of delay today, as the markets continue to fall. Today, the Dow has fallen below 10,000. And yet members of his own party said they felt no pressure to vote for the bill.
Why didn't Senator Obama work to pass this bill from the start? Why did he let it fail and drag out this crisis for a full week before doing a thing to help pass it?
I suspended my campaign and I went back to Washington, my friends, because I was thinking about the American people.
(APPLAUSE)
MCCAIN: Again, on taxes, we see a difference between what Senator Obama says today, what he said yesterday and what he's actually done. Over the course of this campaign, he's had many different plans to raise your taxes. During the Democratic primary, he promised to double taxes on every American with a dividend or an investment. He promised to raise payroll taxes. He promised higher taxes on electricity.
Now Senator Obama claims he will give 95 percent of Americans tax relief. He actually promised the same thing when he was running for Senate in Illinois, but once elected, he never introduced legislation to do so. Instead, he voted for the Democratic budget resolution that promised to raise taxes on people making just $42,000 a year.
(BOOS)
MCCAIN: At the time, he even said his vote was intended to get "our nation's priorities back on track."
To raise your taxes?
You know, if he's such a defender of the middle class, why did he vote to raise their taxes?
Whatever happened to the tax relief he promised...
SANCHEZ: There you have John McCain addressing some of the arguments going back and forth between him and his opponent, Barack Obama. Speaking of Barack Obama, let me point your attention now to something we received just moments ago here.
Clyde, come on back to me, if you could. I guess we're on now.
Robert, over my shoulder, go over here to my laptop.
I'm looking at this while I'm looking at some of the other stuff coming in.
This is a statement that came in just moments ago from the Barack Obama campaign. I'll read it to you. You can look at it here with me: "On a day when the markets are plunging and the credit crisis is putting millions of jobs at risk, the one truly angry candidate in this race kept up his strategy of turning the page on the economy by unleashing another frustrated tirade against Barack Obama."
I'll leave it there. We'll give it a look as we go -- continue.
Let's go to a break and we'll come back. But there you see John McCain speaking live.
Barack Obama sending us that note so that we would share with you, as to what he believes John McCain is doing as he watches him, as well, on TV.
It's all in the media and it's all interactive and we bring it to you as it happens. Your comments, as well, when we come back.
A lot more to go.
Stay with us.
And the market, of course, 537 as we stand. We'll count it down all the way to 4:00.
(COMMERCIAL BREAK)
SANCHEZ: Welcome back.
There you see the numbers, at least as far as the Dow is concerned. We're going to be checking some of the small caps, as well. We're going to check the NASDAQ in just a little bit.
Welcome back. I'm Rick Sanchez. We're here at the World Headquarters of CNN in Atlanta. And as the numbers come in, we share them. By the way, there are some different numbers I want to share with you now. This is interesting.
There was a recent poll taken here at CNN. It's somewhat frightening to look at these, but Americans were asked, "Is another depression likely, based on what we're going on what's going on right now?"
Here's how people responded. Yes, 59 percent. Almost 60 percent of the American people think we could possibly be headed for a depression. Forty-two percent said no.
But big numbers when you look at those. And we wanted to share those with you. They came in just about an hour ago. We want to make sure we turn them around and put them on the air. Obviously, we're not inferring anything other than the fact that that's what Americans are thinking right now, given the dismal state of the economy.
I want to show you something. Now, this is a very important part of our newscast today. We began by showing you the market, telling you what's going on with the candidates and what they're talking about, which is disconnected from what most Americans want to know about.
And then this. In Congress, they are putting the heat on the CEOs, in particular, Dick Fuld of Lehman Brothers. He was really getting grilled today. And before he showed up to get grilled, he was also asked some questions by our own Abbie Boudreau.
Watch this videotape of Abbi walking with him as he was coming into the hearing. Here it is.
(BEGIN VIDEO CLIP)
ABBIE BOUDREAU, CNN INVESTIGATIVE CORRESPONDENT: Do you think it's fair that you made so much money when your company is actually (INAUDIBLE)?
FULD: I'm sorry. I'm on my way to a...
BOUDREAU: Some of your critics have said that you have had a chance to save your company and you haven't.
Is it greed? I mean do you have anything to say to the people that are -- that are watching this right now, that are wondering, you know, why this happened?
You have nothing to say?
FULD: Are you going to be in the testimony?
BOUDREAU: Absolutely.
FULD: Good.
BOUDREAU: Why? What should be expect to see in the testimony?
FULD: Please wait until then.
BOUDREAU: Nothing else to say beyond this?
FULD: Thank you, no. Good luck to you.
BOUDREAU: How do you actually rationalize the fact that you have all of these (INAUDIBLE). We've seen pictures of your houses.
How do you rationalize that when the rest of the country is in turmoil?
(END VIDEO CLIP)
SANCHEZ: Wow! She walked him right into the actual hearing room. Obviously, Abbi Boudreau is not going to be getting any holiday cards or greetings or gifts from the CEO of Lehman Brothers.
And Abbi Boudreau joins us now live -- Abbi, that was tough.
BOUDREAU: Yes. I mean, we had the chance right there to ask him some of the questions that a lot of the people at home really do want to know. And you couldn't really hear too well that first question that I asked him, but what I really wanted to know whether or not he thought it was fair that he was making all of this money when his company is in bankruptcy. And that's the question I think a lot of people really do want to know -- Rick.
SANCHEZ: Well, is it the issues is whether -- I mean, look, there's nothing wrong with making money. It's a capitalistic system. But if you know that you've got some questions about liquidity with your company and you're giving bonuses to some of your officials but you know that there's a serious problem -- in fact, at the same time you're asking the government for a rescue or a bailout, therein lies the disconnect, right?
BOUDREAU: Well, I mean that's precisely the point. It's not whether or not he deserves to make a certain amount of money. It's whether or not he thinks it's fair personally -- whether he thinks it's fair that he is making a certain amount of money. And we're not talking about chump change here. We're talking about, you know, from 2000 to 2007, about $500 million, according to the Oversight Committee. One year alone, in 2006, $106 million of total income.
That's a lot of money when your own company is in bankruptcy. So that's the -- those are the kinds of questions the Oversight Committee wanted to find out. Those are the kinds of questions that we wanted to find out.
And I know you played this earlier on the show, Rick, where Congressman Waxman was asking that same question -- you know, that one basic question -- do you think it's fair?
He just would not answer the question.
SANCHEZ: I'll tell you what, though, good job. Tough reporting. A good day's work today going after him in that situation and trying to get him to answer a lot of the questions that, frankly, a lot of the American people want asked. So we'll stay on it.
Thanks again.
BOUDREAU: All right. Thank you.
SANCHEZ: Abbie Boudreau joining us there, as she follows the CEO into the hearing today.
When we come back, looking that market. We're going to take you to two parts of this story now. We're going to break it down. We've talked a lot about the political side.
Well, what about the Nasdaq, the small caps and the big stocks, as well?
We'll have it for you when we come back, as we wait and count down to the market close, which is now about 13 minutes away.
A lot more on that and pork -- yes, pork, oink, oink.
We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: Hey, welcome back.
I'm Rick Sanchez here at the World Headquarters of CNN in Atlanta.
We're watching what really has become the big story today, the manifestation of this bailout on Wall Street.
And as you can see, the number there now is at 369. For those of you getting to us late, that's actually good, because at some points today -- in fact, just as we started this newscast, it was around 700.
Susan Lisovicz is going to be joining us on that side of the story.
Also, Poppy Harlow is going to be joining us to take a look what things are doing in the small caps on the NASDAQ, as well -- Susan, let's see what you.
Put this in perspective for us.
SUSAN LISOVICZ, CNN CORRESPONDENT: Well, we're off our lows. I mean we've pared half of our losses today.
Having said that, the sentiment is still pretty lousy.
And, you know, to go back to something that you were talking about just a few minutes ago, Rick, about Dick Fuld, the ex-CEO of Lehman Brothers and talking about his executive compensation -- which, by just about anybody's standards, is huge. I think from 2000, the way it was calculated was something like nearly half a billion.
Now that is an issue. And there's no question that's a lot of money, especially for a firm that failed.
But having said that, that's not what brought Lehman Brothers down. Lehman Brothers is the biggest bankruptcy in U.S. history. $613 billion is the number attached to it.
And what brought Lehman down was its exposure to these incredibly risky, incredibly complex securities that were tied to subprime mortgages.
And what you're seeing happen is it play out globally. It's not just a U.S. problem. We've seen a worldwide sell-off today -- Rick.
SANCHEZ: All right, let's just -- let's check the Nasdaq now.
Our Poppy Harlow has got that part of the story for us -- Poppy, what you got?
POPPY HARLOW, CNNMONEY.COM: Hey there, Rick.
You know, the Nasdaq is down just about 5 percent right now. It's the worst hit of the S&P and the Dow. We've seen that all day. But, hey, we're off the lows of the session in a big way. The Nasdaq was down 8 percent less than an hour ago.
What you've got here are some big names and, as you said, some small caps, some big tech companies like Oracle, Microsoft, Cisco that depend on business from big financial institutions to do well.
So when a Lehman Brothers gets wiped off the map, that hurts them in a big way.
You've also got E*TRADE here, which relies on individual traders like you and me.
So a tough day here so far at the NASDAQ -- Rick.
SANCHEZ: All right, thanks.
I'm glad we've got you watching it for us.
Earlier in the show, you asked that I -- you saw that I asked the question of Nancy Pfotenhauer -- she's a spokesperson for John McCain -- why in the world is John McCain talking about Bill Ayers with what's going on in the market?
Well, when we come back, I'm going to have an Obama spokesperson and I'm going to ask them the same question -- why in the world are you talking about the Keating Five with what's going on with the market?
See the answer, when we come back live.
(COMMERCIAL BREAK)
SANCHEZ: Joining us now is Bill Burton. He's a spokesperson for the Obama campaign. By the way, there you see the number standing at 323 now.
You know, everybody who's been e-mailing me and Twittering me today and talking to me on Facebook and MySpace are saying, why in the world are these guys talking about Bill Ayers and why in the world is Obama talking about the Keating Five, when there's a much more pressing issue that Obama should be talking about?
Your guy -- he should be out there telling people in detail, viewers say, how he's going to be able to get them out of this mess.
BILL BURTON, OBAMA CAMPAIGN SPOKESMAN: Well, Rick, I hope you saw Barack Obama's comments earlier today. He is talking about the economy.
John McCain said -- his campaign said this morning that if they talk about the economic crisis, they lose. And so they're trying to change the subject with all sorts of different unrelated issues.
Now, what Senator Obama has been talking about today is what do we do need to do to get help to the middle class right now, how do we get a second stimulus in place so that we can get relief into the economy and help build it up.
You know, with the stock market down -- I guess it's at 360, 370 points now?
SANCHEZ: Yes.
BURTON: You know, I listened to that pretty angry tirade from John McCain. But what was missing from there, I think, are any solutions for the middle class...
SANCHEZ: Well, what about you guys, though?
BURTON: ...any prescription for moving the country forward.
SANCHEZ: What, what, what -- forget John McCain.
BURTON: OK.
SANCHEZ: I already gave them enough grief earlier in the show. I'm going to do the same thing to you now.
BURTON: OK.
SANCHEZ: Why are you putting out a 13-minute documentary on the life and times of the Keating Five and John McCain?
Aren't you playing into that game? Aren't you doing the same thing?
BURTON: Well, if folks want to see the documentary, they can go to KeatingEconomics.com and see exactly how the problems that John McCain was entangled with back in the S&L crisis are related to the problems that we've got right now in the banking industry.
John McCain has already been involved in two banking crises. The American people can't afford another one if he were to be in the White House.
Now, the problem is that even after the Keating scandal, John McCain still said that, fundamentally, he's a deregulator. And he worked to help deregulate the financial markets, deregulate financial institutions to point where, you know, it helped to...
SANCHEZ: So you're saying...
BURTON: ...it helped to be symptomatic of the problems we're seeing today.
SANCHEZ: You're saying the Keating Five is relevant, Bill Ayers not relevant?
That's the argument that you're making, right? And you've got to finish this in 10 seconds.
BURTON: Right. I think that if you consider the fact that John McCain, who was admonished by the Senate Ethics Committee...
SANCHEZ: Yes.
BURTON: He was involved in a banking scandal. There's a banking crisis right now. They're directly relevant to the -- to the state that we find ourselves in right now.
SANCHEZ: All right. Listen, we'll let the viewers decide for themselves.
BURTON: OK.
SANCHEZ: We wanted to have both sides on. Hey, thanks so much, Bill Burton, for being here with us.
BURTON: Thank you, Rick.
SANCHEZ: We appreciate it.
BURTON: I appreciate it.
SANCHEZ: All right, listen, what -- how's the market going to end up?
Three eleven right now. That's actually, surprisingly enough, good compared to what it was. Everything's about comparative. We'll be right back.
(COMMERCIAL BREAK)
SANCHEZ: All right. And we welcome you back.
There's the numbers as they stand right now -- 319.
Let's go back to Susan Lisovicz, if we can, just as we start to wrap things up, before we hear the ding, ding, ding.
A welcome ding, ding, ding, I believe, right?
LISOVICZ: Well, you know, but it's starting to look a lot better. You know, Rick, it had all the makings of another historic Monday. One week after the Dow's biggest point sell-off, it looked like we could go there. In fact, the blue chips were down 800 points at one -- at one moment in the session.
And, you know, what was even more stunning is that there were fewer than a hundred stocks trading up -- 3,100 to the downside.
But now, a 300 point deficit -- not such a big deal, it seems, Rick. It's all too common here.
SANCHEZ: There were some people today talking about 1,000. No more. 316 not bad, all things considered.
Thanks so much, Susan.
LISOVICZ: You're welcome.
SANCHEZ: Let's go to Wolf Blitzer.
He's standing by now in "THE SITUATION ROOM."
WOLF BLITZER, CNN ANCHOR: Thanks very much Rick.
