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Debate Night: Round Two; Polls Show Obama Making Gains; Economy & College-Age Voters
Aired October 07, 2008 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: It is Tuesday, October 7th, and here are the headlines right now on CNN.
Face to face again, but this time the audience gets to ask questions. We preview tonight's presidential town hall meeting in Nashville.
The Dow trying to climb out of a deep hole. Investors cheering a bold move by the Fed. And Wall Street whipsaw. Trading sessions got you a little stressed out, liquidity worries got you teary-eyed? We ask an expert what to do.
Good morning everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.
Let's talk about a face-off. Four weeks before Election Day, John McCain and Barack Obama meet for their second debate tonight in Nashville. The town hall format, McCain's favorite style, but Obama is riding a recent surge in the polls.
Ed Henry live with a preview from Nashville.
We got you back up just moments ago, Ed. Good to see you.
This is a two-part question here. The first part, can we agree that John McCain needs a decisive victory tonight?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: He absolutely does. Let's face it, he is definitely on the defensive right now. He's lost momentum, in large part because of the financial crisis.
When you go around that electoral map and all of the key battleground states, Barack Obama has been gaining ground, maybe even going ahead of John McCain, key states like Pennsylvania, Ohio, Michigan, where John McCain has all but given up. And even Virginia and North Carolina, states that have been traditional Republican states. So no doubt, John McCain needs to come off big -- Tony.
HARRIS: Right. So part two of this. How does he get it?
HENRY: Well, as you noted, the town hall format, it well suits John McCain. This is in his wheelhouse, if you will.
I see him on the trail all the time, John McCain with a microphone, pacing back and forth on the stage, taking questions from voters. So he excels in this format. So what he needs to do is answer those questions on the economy, on health care, those pocket book issues.
People are crying out for answers right now from both of these candidates. And he needs to show that he feels it right here in his heart, and that he can connect with these voters, that it's not with a teleprompter, it's not the personal attacks that we've been seeing the last couple of days. But on these issues that really matter to people, he gets it and he has the answers.
HARRIS: Got you.
HENRY: What are his plans? Both these guys have plans, but McCain really needs to connect.
HARRIS: Is there anything out there, Ed, to suggest that John McCain can achieve this decisive victory on his own, or does he need some help from Barack Obama? Maybe some major gaffes? Maybe a muddled kind of erratic performance?
HENRY: Well, obviously if either guy messes up, it's going to be a problem for them. But I think especially so for McCain.
I mean, when you talk to McCain advisers privately, they say, look, this is a good format for him. But that also raises the expectation for him. So if there is a gaffe from McCain or some sort of a slipup, it can be magnified, especially this late in the game, because you know the media. By and large, if there is some problem for McCain tonight, we're going to jump on the fact that he should have got it done, this was his format.
HARRIS: Yes.
HENRY: It's a missed opportunity. So that's why this plays to his strengths on the other hand, it puts a lot of pressure on John McCain.
HARRIS: Got you.
One last one. Will the negativity of recent days from both campaigns make it into tonight's debate?
HENRY: Boy, I doubt it. And I think it would be a high, high risk for either candidate if they decided to come in here.
This town-hall-style format, there's two chairs behind me for the two candidates, but then there are other chairs around them who will be undecided voters from Nashville who will be asking the questions, along with the moderator, Tom Brokaw, of NBC News. So I think if you bring negativity into this house, you're going to pay a price.
HARRIS: Yes.
HENRY: These undecided voters don't want to hear that. Save that for the 30-second ad, save it for the campaign rally with the red meat. But if you do it here, it's probably going to backfire -- Tony.
HARRIS: Ed Henry talking about don't bring the negativity to our house, in Nashville there.
HENRY: Not in this house.
HARRIS: Not in this house.
All right, Ed. Appreciate it. Thank you.
Campaign battlegrounds. New numbers show Barack Obama making significant gains in key states. Those gains are actually reshaping the electoral map.
CNN's John Roberts puts the map in motion for us.
(BEGIN VIDEOTAPE)
JOHN ROBERTS, CNN ANCHOR: Tony, we've got a whole new series of polls out in battleground states that are going to change the landscape of America here as far as the tossup states go. We have eight of those on the map right now, but some of those are going to change as a result of our latest polling.
First of all, let's take a look at the lay of the land right now.
In terms of electoral vote allocation, Barack Obama currently leads John McCain 250-189, given states that are either in his safe category or leaning toward the Democrat. But let's take a look at what our latest polls show.
First of all, in the battleground state of Wisconsin, which is currently a tossup, Barack Obama now leads John McCain 51 percent to 46 percent. That margin between them previously was about three points, now it's stretched out to five.
In New Hampshire, with four electoral votes, the Granite State, being battleground in every election primary, and general election as well, Barack Obama now leads by eight points, 53 percent to 45 percent.
And take a look at this. In North Carolina, which has been solidly Republican, hasn't voted for a Democrat since it voted for Jimmy Carter back in 1976, look at this, even up at 49-49.
Now, why is this so significant? Well, let's take a look at the results of the 2004 election.
First of all, in the state of Wisconsin, John Kerry beat President Bush by one percentage point, 50 percent to 49 percent. Barack Obama now up by five points.
Here in the Granite State, the state of New Hampshire, again by one point, 50-49. Barack Obama now ahead by eight points. So widening that margin.
But this is what's really significant. Take a look at this. The state of North Carolina, 2004, President Bush beat John Kerry by 12 points. That state is now even up. So that is a pretty dramatic change, 2008 compared to what was happening in 2004.
So what does it all mean in terms of the Electoral College now? Well, some of these states are going to change from tossup now to lean Democrat. The first one is Wisconsin. That will give Barack Obama 260 electoral votes to John McCain's 189.
We have also, because of current polling and historic trends, now put New Hampshire in the lean Barack Obama category, which gives him 264-189 electoral votes.
And because things are so close in the state of North Carolina, we're now going to take that from lean Republican, lean John McCain, to tossup status. So that will give Barack Obama 264 electoral votes to John McCain's 174 if the election were to be held today.
Now, of course we're still four weeks away from Election Day. A lot could change. But at this moment, Tony, the electoral map changing, much in favor of Barack Obama. John McCain, still a lot of work to do.
(END VIDEOTAPE)
HARRIS: Absolutely fascinating.
You know, one of the crucial swing states is Ohio. A new poll gives Barack Obama a three-point edge over John McCain.
In the CNN/"TIME" Magazine/Opinion Research Corporation poll, Obama is ahead 50 percent to 47 percent.
One group that could make a difference is young voters. The number one issue for many of them -- surprise, surprise -- it is the economy.
Here is CNN's Mary Snow.
(BEGIN VIDEOTAPE)
MARY SNOW, CNN CORRESPONDENT (voice-over): Call it Main Street 2.0. You don't have to look far on Ohio State University's campus to see signs students are worried about the economy. Third year student Keiran Johnson (ph) is worried about what kind of job market he'll face.
UNIDENTIFIED MALE: Graduating, hoping I can get something better. I mean, that's what we're all told, to go to school and have a better life. But at the point we're at now, we don't really know if that's true. So...
SNOW: For Amanda Kulcar (ph), the concerns are more immediate, like the price of gasoline.
UNIDENTIFIED FEMALE: Even groceries increasing. It's hard to even get essentials -- like bread and milk have increased to a point that it's almost ridiculous to buy. PAUL BECK, OHIO STATE UNIVERSITY: They are scared. And they're scared maybe for the first times in their lives. This has been a several-decade period of unusual prosperity.
SNOW: Political science professor Paul Beck says while these young voters may be scared, they're also enthusiastic about this presidential election.
Seizing on that enthusiasm, volunteers saturated the campus to get students to register and vote early, and to see how coveted the youth vote is. Consider that just a stone's throw from the nation's largest university of nearly 53,000 students is an Obama campaign office. Team Obama is offering students rides to polling places.
Bruce Springsteen even performed at OSU on Sunday to try and drive turnout.
BRUCE SPRINGSTEEN, MUSICIAN: We were also here four years ago. This time we're winning.
SNOW: In 2004, Democrat John Kerry lost Ohio to George Bush by a slim margin. Students for Obama say they believe they'll make the difference for Democrats in this battleground state.
On the Republican side, no McCain office on campus, just a couple of table setups. The college Republicans here say Sarah Palin has lit a fire for them.
JONATHAN SNYDER, OHIO COLLEGE REPUBLICANS FED.: Any time you watch anything, it's all about Obama and the youth vote and how he's got it locked down. And that's not the case. It's simply not the case.
(END VIDEOTAPE)
HARRIS: All right. Mary Snow joining us now live from Columbus, Ohio.
Mary, good to see you.
College students -- we were college students once. I'm just curious, how have the candidates this year, a long, long time ago for me -- how have the candidates gone after young voters in Ohio?
SNOW: Yes. And Tony, sadly, I'm reminded of how old I am, too, standing here. But, you know, unlike when we were in college, students here today are getting reminded about getting out to vote early by text messages, by Facebook. And up until yesterday, there was a six-day window where people were able to register and vote in Ohio.
So the Obama campaign had shuttle buses that were transporting students to register and to vote. The McCain campaign said it was offering rides as well. And really getting students out to vote is what these campaigns say is key, and also what we've known from the past, that students can be not as reliable turning out. One of the key things people say is that they need to be reminded where to go, also bring the proper identification. So while they are eager a lot of times to register, getting them to turn out is going to be key.
HARRIS: Yes, we've heard for years now that young people will show and have been disappointed at the actual turnout. Maybe this is the year they actually show.
Mary Snow in Columbus, Ohio, for us.
Mary, appreciate it. Thank you.
And join the best political team on television for the second presidential debate. You can see the match-up between John McCain and Barack Obama tonight at 9:00 p.m. Eastern, live on CNN.
America's money crisis. The Federal Reserve taking an extraordinary step to unclog the credit pipeline today. The Fed will now make short-term loans available to Main Street businesses. That will help finance day-to-day operations. And there's speculation the Fed will choreograph an interest rate cut with other world banks.
The open stocks surged by more than 100 points on the Fed's announcement. Right now, as you can see, the Dow is down, down 12 points. You'll recall Monday, yesterday, the Dow plunged 800 points at one point, but pulled back to close down 370 points.
Except for Japan, most markets across Asia and Europe are pushing higher today. Our correspondents are tracking the situation around the world. India's main stock index finished down today, but pared its losses considerably for Monday.
(BEGIN VIDEOTAPE)
SARA SIDNER, CNN CORRESPONDENT: I'm Sara Sidner in New Delhi.
The financial crisis that started in the U.S. and spread across the world has been front-page news here in India for days now. The interesting twist in this country though is that only 2 to 2.5 percent of the population of 1.1 billion actually invests in the financial markets.
But the financial markets have been hit hard. Why? Most of the investment comes from outside of this country. And those foreign investors live in the very countries that are dealing with the credit crunch. So little new money is flowing in.
However, India's government says it expects that the economy will grow by 8 percent this year and higher next year, an enviable position to be in if the numbers hold true.
(END VIDEOTAPE)
HARRIS: Sara, thank you.
Don't kid yourself. Even professionals don't have a crystal ball to tell you how this crisis will end.
With that in mind, let's ask CNN's Deborah Feyerick the unanswerable question of the day.
Deb, are you ready?
DEBORAH FEYERICK, CNN CORRESPONDENT: Shoot.
HARRIS: Here it is. Now what?
FEYERICK: Well, now it is the really big question.
You know, financial advisers who usually talk to clients maybe a few times a year are being flooded with calls from investors asking not only how are their stocks doing, they're also asking for big- picture macroeconomic lessons to figure out what is going on. And the thing is that, even those people who are handling the money, who we have trusted to do so, are having a hard time trying to make sense of it all.
(BEGIN VIDEOTAPE)
FEYERICK (voice-over): As the Dow dropped below 10,000, everywhere brokers and financial advisers were fielding calls from thousands of investors.
UNIDENTIFIED MALE: We're going to be sending through some transfers of those banks and rolling them over.
FEYERICK: Getting messages like this one...
GREG OLSEN, LENOX ADVISERS: "I know it's the wrong time to sell," he just said, "but I have to pull the money out, because I can't take this anymore."
FEYERICK: Greg Olsen is a partner with Manhattan's Lenox Advisers.
(on camera): People who you wouldn't think would panic are now calling you.
OLSEN: Sure.
FEYERICK: They're worried. They're saying what?
OLSEN: They want to know, when is the pain is going to stop? And the answer to that question is, we don't know.
FEYERICK: Are they saying, I can't do this; pull me out?
OLSEN: You have some clients that are very upset, because they thought they had a higher level of risk tolerance than they actually did. They're making the decision to pull out because they want to sleep at night knowing there can't be any more losses.
FEYERICK (voice-over): Olsen says his advice depends on how much time and how much money clients have.
OLSEN: It's the person that has the lesser amount of money to invest that you're worried about, because they can't afford to have these types of losses. Anybody who has a long-term time horizon, a 10-20-year time horizon, at this point, it's not the time to make any rash decisions.
FEYERICK: As for investors nearing retirement...
(on camera): You're actually telling some people that they may want to consider putting off their retirement.
OLSEN: I have that -- it was a very difficult conversation with a couple last week. And it's a very difficult conversation to have.
FEYERICK: I think a lot of people are rethinking just how good of a bet the stock market is. What is your advice?
OLSEN: Well, long term, the stock market has always been the best place to be. As long as you don't have to pull the money out today, you didn't lose anything.
FEYERICK (voice-over): As for when it will stop, that's something even the best advisers can't answer.
(END VIDEOTAPE)
FEYERICK: Now, you hear a lot of people talking about pulling out of the stock market and putting all their money in safe treasury bills or T-bills. But Olsen says that the return rate of 1 or 2 percent may be good now, but it is definitely not a good long-term strategy since that doesn't even keep up with the rate of inflation -- Tony.
HARRIS: Good point. OK.
Deborah Feyerick for us in New York.
Deb, thank you.
Follow the money, everyone. Just go to CNNMoney.com. We have got all of the day's market news and numbers, expert analysis, and much more.
Amazing pictures from 48 million miles away. Mercury as it has never been seen before.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
FRED PULVER, CARBONDALE, COLORADO: Folks, the $700 billion was just a down payment. The Dow dropped 157 points Friday amidst fears the bailout is not going to solve the financial crisis.
What did the government think was going to happen when they gave corporations tax breaks to ship their operations overseas? What did they think would happen when they deregulated the banks? Duh. What are they going to do next, print and give more billions to the next failing banks and businesses and devalue the dollar further?
(END VIDEO CLIP)
HARRIS: Boy, America finding its voice on this whole issue of the bailout, the rescue plan, whatever we're calling it this week. As you can see, the markets, after starting in positive territory, have retreated off of those gains, in negative territory now, down 43 points inside two hours into the trading day.
We will follow the market with Susan Lisovicz throughout the morning right here in the NEWSROOM.
Main Street is certainly feeling the pinch and cutting back. But how much, is the question.
Here is CNN's Jeanne Meserve.
(BEGIN VIDEOTAPE)
JEANNE MESERVE, CNN CORRESPONDENT (voice-over): The bulls may not be running on Wall Street, but they are twisting and turning in Waco, Texas.
This is the Heart O' Texas Rodeo and Fair. And if you thought Wall Street was a wild ride, try this. The economy may be on the ropes, but indications are attendance here is going to hold up.
WES ALLISON, HEART O' TEXAS RODEO AND FAIR: We can say last night we were up at the gate, not significantly. But we were up about 2 percent at the gate last night.
MESERVE: About 200,000 people are expected over the rodeo's nine-day run. Carl Hohertz and his wife are here, though spending $30 on two admissions and parking is a bit of a stretch.
CARL HOHERTZ, RANCHER: I'm a rancher, and everything I buy is high and everything I sell is cheap.
MESERVE: Outside at the fair, Braiden Baine (ph) and Matthew Young (ph) have made out like bandits. Their folks are carting armloads of prizes.
UNIDENTIFIED MALE: My favorite is Super Spy (ph).
UNIDENTIFIED MALE: And I also like wiener dog race.
MESERVE: Their parents, Carmen and Steve, say they couldn't miss the fair and rodeo, despite the pinch on their budget.
UNIDENTIFIED MALE: Everything costs more now than it did even a month ago.
UNIDENTIFIED FEMALE: Groceries and gas, anything. Electricity. Everything has gone up.
UNIDENTIFIED MALE: Everything out here is higher than it was last year.
UNIDENTIFIED FEMALE: Everything goes up.
MESERVE (on camera): But you're here.
UNIDENTIFIED FEMALE: We're here.
UNIDENTIFIED MALE: We're here.
MESERVE: How come?
UNIDENTIFIED MALE: For them.
UNIDENTIFIED FEMALE: The kids. Have to show some excitement even though times are a little rough.
MESERVE (voice-over): But rough times are keeping some people away. This weekend, Joe Flores is spending his money on a haircut, not the rodeo.
JOE FLORES, WACO RESIDENT: It's $10 to get in. I can put that towards gas or groceries. So unfortunately I won't be able to make it this year.
MESERVE (on camera): But those who did come to the rodeo came to have fun, not talk politics. But ask them about the Wall Street bailout and they say, hey, come bail me out.
Jeanne Meserve, CNN, Waco, Texas.
(END VIDEOTAPE)
HARRIS: Boy, are you stressed out about how to pay for gas or groceries? Do you think more women than men are baring the brunt of this meltdown?
In the next 30 minutes, hear how to cope with this crisis. Every candidate from local city council races to the presidential race wants to reach the popular man known as Joe Six-Pack.
(BEGIN VIDEO CLIP)
KIRAN CHETRY, CNN ANCHOR: Jackie (ph), now, you say Sarah Palin is the best woman you've ever seen since Barbara Mandrell and the Mandrell sisters. What is it that you like so much about her?
UNIDENTIFIED MALE: Well, I'll tell you what, what's so nice about Sarah Palin, just that she's so relatable. I mean, to people like myself, I mean, she's -- you know, she's got a daughter knocked up by some redneck out there. And, you know, well, her husband is always out there riding around on recreational vehicles. I mean, she's just like every member -- woman in my family.
UNIDENTIFIED MALE: Yes, except she's successful.
UNIDENTIFIED MALE: Oh, yes, that's a big difference.
UNIDENTIFIED MALE: You know, to a lot of women it's like she's living the dream. I think most women wish they had a fun and relaxing hobby like being vice president to take their minds off their lives.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
HARRIS: The financial crisis and the wild ride on Wall Street echoing across the campaign trail. Barack Obama talked about his ideas for confronting the crisis.
Here is Obama in his own words in Asheville, North Carolina.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Not only are we seeing the stock market go down, but there's still a great danger of the credit markets locking up. And we've seen the contagion is spreading to all parts of the globe. Europe is having some of the same problems that we're having here in the states. Asia is being affected.
It is a reminder that the rescue package that was passed last week is not the end of our efforts to deal with the economy. It's just the beginning.
I think it is very important for Secretary Paulson and Federal Reserve Bank Chairman Bernanke to move swiftly and try to restore confidence as quickly as possible, to effectuate the plans based on the authority that's been given to them by Congress. I think it's still critical for us to move forward on an economic stimulus package that can provide people some relief from high gas prices, food prices, help states and local governments maintain their payrolls.
I think we have to extend unemployment insurance after the statistics showing that 159,000 additional jobs were lost just last month. And we're going to have to then move on an aggressive plan to deal with some of the underlying structural problems on the economy, including the continuing decline in the housing market.
(END VIDEO CLIP)
HARRIS: Republican vice presidential candidate Sarah Palin also focusing on the economy. Here is Palin at a rally last hour in Jacksonville, Florida.
(BEGIN VIDEO CLIP)
GOV. SARAH PALIN (R-AK), VICE PRESIDENTIAL CANDIDATE: John McCain is the only man in this race who will solve our economic crisis and not exploit it. And as senator, he's seen the corrupt ways of Washington and the wasteful spending and other abuses of power. And as president, I promise you I'm going to help him do this, we're going to end those abuses.
(APPLAUSE)
(END VIDEO CLIP)
HARRIS: Join the best political team on television for the second presidential debate. You can see the match-up between John McCain and Barack Obama tonight at 9:00 p.m. Eastern, live on CNN.
Dramatic developments from Washington. The Fed announcing a bold new plan to help ease the credit squeeze.
(COMMERCIAL BREAK)
HARRIS: Boy, it was a little crazy yesterday, wasn't it? Man, a manic Monday left nervous investors looking for some kind of bottom here. The Dow took a 400-point dive in morning trading, but did come back a bit. But the lunch time reprieve really didn't last. At 2:46 p.m. the Dow bottomed out at 9,503, down a breathtaking 800 points. Stocks cut their losses in half by the closing bell, ending the day down 370 points. To put a dollar figure on the day's carnage -- boy -- about a half trillion dollars in wealth simply vanished.
If yesterday was manic Monday, call today tranquil Tuesday by comparison. As you can see the Dow still down 50 points. Blue chips actually jumped into positive territory at the opening bell. The gain spurred by a bold move at the Fed to unfreeze credit. The nation's bankers will now make short-term loans available to businesses.
Consider this for a moment. The Dow hit its record high a year ago this week, just above 14,000. Since then, blue chips have lost about one-third of their value, along the way wild swings and hairpin turns. Boy. CNN's Ali Velshi helps us take stock of the situation.
Ali, great to see you.
ALI VELSHI, CNN SR. BUSINESS CORRESPONDENT: You, too. And I'm glad it's tranquil. Let me tell you -- this has been quite a ride.
I should tell you while we may have lost half a trillion dollars yesterday in market value, if your first investment was made at 3:00 in the afternoon, the Dow was actually up 400 points for you. This is -- the thing about the Dow and these markets is that they are so volatile right now, they're hard to make sense of for the average investor, they're hard to make sense of for professionals right now.
HARRIS: Hey, how about this -- I want to ask you about the decision from the Fed today. Let's see if we can frame it this way.
(CROSSTALK)
HARRIS: I own Tony's Widgets, OK? That's my company, and I make a great widget. Can I now apply directly to the federal government for a loan to -- say -- cover my payroll?
VELSHI: OK. It's the right idea, Tony, except that commercial paper is what they're going to buy. And commercial paper is a term that refers to generally fairly large companies that -- when they want to own -- so this is Tony's Widgets, international major corporation, probably a stock -- a company with stock
HARRIS: I love it.
VELSHI: And then you go to an investment bank, like Morgan Stanley or Goldman Sachs, and say, you know, I don't -- this isn't to build a plant or for long term expansion, this is short-term money that I need because I -- shortage of revenue against some of my expenses. Goldman Sachs goes out, finds an investor, or 10, and that's the deal that happens. The federal government wasn't involved in that. Now, the Fed is saying we will do the same thing.
So the deal has to be of the same quality. It can't be that you don't really have a business going. You to have collateral, you've got to be able to pay that money back. And it's got to be short-term money. But the Fed is now saying it will provide that money.
I happen to think, Tony, for most credit purposes this might be a bigger deal than even the bailout because this is immediate.
HARRIS: Whoa. Wow.
All right. I've got a tough one for you here. Maybe it is, maybe it isn't.
With all of the wild fluctuations we've seen here recently, are we fast approaching investor capitulation, that point at which we kind of throw our hands up and we sell our stocks at whatever the price just to get out?
VELSHI: I've had a few arguments with Wall Streeters this morning about the term and whether we are. Typically speaking, capitulation means people are prepared to say, I'm getting out of the stock market, give me whatever you want for this stock and I'm leaving. I had described last Monday and yesterday as orderly, meaning when you try and sell a stock, there's always someone there to buy it but it's lower than what you wanted to get for it, but there is a price.
Capitulation is a little more panicked, a little more frantic, a little faster, a little higher volume. We're not there yet.
There are some people who say they'd like to see us there. They'd like a massive selloff on major markets, fast, get it over with, get everybody out of the market who doesn't want to be there, and leave the rest of it for real investors. I don't think we've seen capitulation, but we might be headed that way.
HARRIS: What, realistically, would you like to hear from the candidates tonight? What can they say that other people, smarter people perhaps who know these markets, what can they realistically say about the economy tonight?
VELSHI: Well they need to say three things. Specifically what it is -- what their plan is for the economy and for the creating of jobs because jobs is the biggest problem right now. We've lost three- quarters of a million of them this year alone. SO not this generality about creating jobs, what specifically are they going to do?
No. 2, they need to acknowledge the fact that we're in debt. And both of their programs call for us to be further in debt. And now with this bailout program, we're going to be further in debt. So I'd like an explanation as to how either of them plan to cut taxes on the middle class without raising the debt when -- if they don't plan to curtail their tax cuts, how that's going to affect the debt.
And the third thing I think, Tony, that would be good to hear from them is, maybe, a suggestion of who their team is, maybe their Treasury secretary, or who their team is that's going to lead us into this. Because this next president will certainly be inheriting a recession. And I'd like to know who he thinks he's got with him to help him through it.
HARRIS: Good stuff. Thanks, Ali. Appreciate it.
VELSHI: OK. See you, Tony.
HARRIS: You know they've got some explaining to do. Former executives from insurance behemoth, AIG, are in front of a House committee right now. Lawmakers want to know how the subprime mortgage debacle spiraled into a near death experience for AIG. The Fed rescued AIG -- you may recall -- three weeks ago today with an $85 billion loan. The men testifying today ran the company between 2005 and last month.
Former CEO Hank Greenberg, who ran AIG for 40 years was a no- show. He is reportedly ill.
Yesterday, lawmakers grilled Richard Fuld the CEO of now bankrupt Lehman Brother. During his tenure Fuld raked in more money than most of us will probably ever see. Now his shareholders may walk away with nothing.
Is that fair? Special investigations unit correspondent, Abbie Boudreau, searching for answers now.
(BEGIN VIDEOTAPE)
ABBIE BOUDREAU, CNN SPECIAL INVESTIGATIONS UNIT CORRESPONDENT: The 62-year-old Wall Street tycoon raked in nearly a half billion dollars between 2000 and 2007, according to the oversight committee. In one year alone earning more than $106 million. Along with all that money came immense homes. This estate in Greenwich, Connecticut, complete with tennis courts and swimming pool, and a $21 million apartment on Park Avenue in New York City, and a vacation spread in Juniper Island, Florida, with a postcard perfect view, not to mention a lavish art collection reportedly worth millions.
Outside the hearing room, I tried to ask him about all of this.
(on camera): Do you think it's fair that you're making so much money when your company is in bankruptcy right now?
RICHARD FULD, CEO, LEHMAN BROTHERS: I'm sorry. I'm on my way to a --
BOUDREAU: Some critics have that said you've had a chance to save your company and you haven't. Is it greed?
Do you have anything to say to the people that are watching this right now, that are wondering why this has happened?
You have nothing to say?
FULD: Are you going to be in the testimony?
BOUDREAU: Absolutely.
FULD: Good.
BOUDREAU (voice-over): I also asked him about all of his real estate holdings.
(on camera): How do you rationalize that when the rest of the country is in turmoil?
(voice-over): At the hearing, Congressman Henry Waxman asked Fuld if he deserved all the money he has made at Lehman.
REP. HENRY WAXMAN (D), OVERSIGHT AND GOVT. REFORM CHMN.: Do you think it's fair and do you have any recommendations on fundamental reforms that would bring a new approach to executive compensation?
FULD: Mr. Chairman, 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.
BOUDREAU (on camera): He chose not to answer that very direct question. Congressman Waxman asked him that same question a couple more times, but he never got a clear answer.
Abbie Boudreau, CNN, Washington.
(END VIDEOTAPE)
HARRIS: Time to check in now with Rob Marciano in the severe weather center.
And Rob, let's talk about Tropical Storm Marco. I understand the storm has made landfall.
ROB MARCIANO, CNN METEOROLOGIST: It has made landfall. Can you believe we're already on the island storms. We're trying to get through this season now, we're into the -- almost the middle of October. And we get to the end of October and it will be smooth sailing after that.
This thing, not a big deal, Tony. Tropical Storm Marco, 65-mile- an-hour winds. It's a strong tropical storm. We thought it had a chance to become a hurricane, but it's so small. Winds from this thing only extend about 15 miles out. So interesting feature for sure and heading into inland Mexico, about 90 miles from Veracruz where it made landfall about a half hour ago. And it's not going to bother anybody any time too soon.
(WEATHER REPORT)
MARCIANO: Check out this video.
HARRIS: OK.
MARCIANO: Guys jumping out of planes at like 30,000-something feet.
HARRIS: What is going -- that's way too close.
MARCIANO: Yes. Three guys set a record there Nepal, jumped over Mount Everest over the weekend. Specially -- they had the breathing apparatus, of course, they had specially-made parachutes that deal with the frigid cold temperatures at that altitude. And I guess they landed safely as well. So, I think they usually -- people usually jump 15,000, 20,000 feet. But 30,000, that's kind of scary stuff.
HARRIS: That's pretty good, but I can top that.
MARCIANO: How so?
HARRIS: The planet closest to the sun like you have never seen it, Mr. Marciano. Take a look at this.
MARCIANO: Oh, come on.
HARRIS: Yes, yes, yes,
MARCIANO: That's Mercury?
HARRIS: Pictures of Mercury.
MARCIANO: I thought it was red. That doesn't look hot.
HARRIS: No. Beamed back fresh just in the can by a NASA spacecraft this morning.
MARCIANO: How about that?
HARRIS: 124 miles above the planet's equator. How about that? It's the first time scientists have seen it this close up.
MARCIANO: Wow, that is nice.
HARRIS: Craters --
MARCIANO: Yes, looking very moon-like.
HARRIS: Right. Some smooth plains there. And I guess the thinking is that those smooth areas may have been created by -- maybe a volcano or something.
MARCIANO: Oh, yes?
HARRIS: Not bad.
MARCIANO: Cool, or something hitting it maybe.
HARRIS: Yes, that's true.
MARCIANO: There's got to be stuff flying around there.
Good job, NASA. Nice job, Tony. Good to see you, we'll see you.
HARRIS: All right. See you again next hour. Thanks, Rob. Appreciate it.
Just hours before the second presidential debate, the barbs and accusations are flying. Our truth squad finds the facts.
(COMMERCIAL BREAK)
HARRIS: Is it back to the future? The latest attacks from Barack Obama and John McCain are all about reaching into the past it seems. Josh Levs with the CNN truth squad joins me now to talk about the so-called Keating Five.
Good to see you, Josh.
JOSH LEVS, CNN CORRESPONDENT: Hey, good to see you, too.
So all of the sudden we're talking about the Keating Five. Today, campaign brings it up, hence we're going to be talking about it. Let's take a look at a little clip of a video that the Obama campaign put out.
(BEGIN VIDEO CLIP)
NARRATOR: 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.
(END VIDEO CLIP)
LEVS: And that video there encourages people to check out a Web site. I'll show you right here. It's from the Obama campaign. It's called keatingeconomics.com. And they put some things -- there's pretty small type, so I have a graphic for you. Let me show you this quote from this Web site.
This is what it says, it says: "McCain intervened on behalf of Charles Keating with federal regulators tasked with preventing banking fraud, and championed legislation to delay regulation of the savings and loan industry -- actions that allowed Keating to continue his fraud at an incredible cost to taxpayers."
Now, let me do this. I want to give you a few facts about this and some context. So, Charles Keating owned Lincoln Savings and Loan, which swindled investors out of hundreds of millions of dollars. He was sentenced to prison. He was a friend of McCain and a contributor to McCain's political campaigns. His first company was headquartered in Arizona, which as we know is the state McCain represents.
Now, McCain was one of the so-called Keating Five. And this is what they were -- five U.S. senators investigated over accusations that they tried to interfere in the federal investigation into Keating. And McCain did take some steps to help Keating. We have a graphic of it -- just a couple of them here. He was an early co- sponsor of a resolution that would have delayed the effective date of certain regulations. He also wrote to government regulators about this issue, and he attended a meeting with regulators which he later said he regrets.
And I will tell you that McCain said he never asked for anything inappropriate. We (INAUDIBLE) through even more details at CNN.com.
All right, Tony. Time for the truth squad verdict on this one. Here you go. We say it's true, McCain did push to delay regulations that would have cracked down on savings and loan practices, and intervened on Keating's behalf, although he was cleared of wrongdoing in the Keating Five case.
HARRIS: Wow. You know what's amazing to me is that it seems that both of these campaigns have a sleaze closet and whenever one starts to attack, starts to throw mud, the other side is ready to throw some mud right back. That's a little frightening. I hope we don't continue down this road.
LEVS: You know what's getting a lot of traffic on dot-com today? Someone saying that, our own Campbell Brown, who has commentary online talking about that specifically and showing times that they each said they weren't going to go there.
HARRIS: Wow. All right. Next hour -- what are you looking at --
(CROSSTALK)
LEVS: Next hour, speaking of what you were talking about, also reaching into the past. Next hour we're going to look at McCain's criticism of Obama for what Obama once said about U.S. troops in Afghanistan.
HARRIS: OK. Can't wait. Thanks, Josh.
LEVS: You got it. Thanks.
HARRIS: Check out our Political Ticker for all the latest campaign news. Just logon to CNNPolitics.com, your source for all things political. We've been telling you that the Federal Reserve is stepping in to ease the credit crisis. Just why are the banks so reluctant to lend right now?
Check out the quarterly earnings at one of the nation's largest banks for a clue here. Susan Lisovicz is at the New York Stock Exchange with the numbers.
Susan, good morning.
SUSAN LISOVICZ, CNN CORRESPONDENT: Good morning, Tony.
Well, Bank of America surprised Wall Street on two fronts, by reporting results early, as well as posting a nearly 70 percent drop in profits. B of A also tripled its provisions for credit losses to more than $2 billion because so many Americans are having trouble making payments on their credit cards and mortgages. To help protect its cash on hand, the company is cutting its dividend in half and plans to raise $10 billion by issuing new stock.
Bank of America is the biggest loser on the Dow. Right now, its shares are plunging nearly 14.5 percent. The Nasdaq is hanging in there -- excuse me -- the Dow overall is hanging in there, it's up 7 points. If yesterday was manic Monday, I'm not going to say it's tranquil Tuesday, Tony. I'm going to say it's tentative Tuesday.
HARRIS: Tentative.
LISOVICZ: We've been up. We've been down. We've been flat.
It's tentative. The Nasdaq composite, meanwhile, is down four points, or about a quarter of a percent, Tony.
HARRIS: Look, if it's tentative to you, we'll go with that.
You know, I thought B of A was one of the stronger players out there. Makes you wonder what we can expect from other banks?
LISOVICZ: That's a good point because we are very early in the quarterly reporting season. This is where you start to get warnings and things like that. We haven't heard from financial companies outside of B of A. It certainly casts a cloud over the third quarter earnings season.
But B of A, remember, still managed to make a billion dollars in the last quarter. It also had enough money to buy Countrywide and Merrill Lynch. The company's CEO says it is the most difficult time for financial institutions he's ever experienced. He also says Bank of America isn't planning to loosen its lending standards any time soon.
One would think a lot of us -- a lot of us have learned our lesson.
HARRIS: Yes, absolutely.
All right, Susan, see you next hour. Thank you.
A stressed economy. Could it be costing you more than just your bank account?
(COMMERCIAL BREAK)
HARRIS: Doctor, are you going to help us here in a second? OK, here we go. The doom and gloom news about the economy is apparently hurting America's mental health. In a new survey just released this morning by the American Psychological Association, 80 percent of Americans say the economy is a significant cause of stress for them. That is up from 66 percent in April. Money is now the number one reason why folks are stressed out, surpassing all other worries.
Psychologist Dr. Angela McConnell is here to talk about it.
Dr. McConnell, good to see you. You know, I'm almost a little surprised at the figure 80 percent. Now, don't get me wrong. I know that that's high. But, given all of the economic news, I'm a little surprised that it isn't higher and I'm wondering, are the well-healed just not feeling it yet?
Or, are people who are stressed out just finding ways to cope?
ANGELA LONDONO-MCCONNELL, GEORGIA PSYCHOLOGICAL ASSN.: Probably a little of both. But what I was really surprised by, is the fact that in just three months, we've gone from 66 percent --
HARRIS: So, that's a big spike?
MCCONNELL: Yes. To 80 percent of people saying that they are more stressed because of the economy now. I so think that some people are probably, have figured out ways to cope with stress just in general in their lives better than others. And that they're probably utilizing those ways now more than ever.
HARRIS: Give me a couple of conclusions from the study.
MCCONNELL: What was also very surprising and very interesting is that women are feeling the brunt of this economic meltdown. And we wonder well, why women? I think that there is a couple reasons why. Traditionally, women have actually handled the finances in the family. So, they see their budget getting more and more stretched when they go to it grocery store.
HARRIS: So, they actually see the numbers. They're crunching the numbers and they see it themselves.
MCCONNELL: And they see it every day. So, I think that they can really feel it.
The other part is that women in our study identified some ways of coping that they go to first. Which are, they eat more, they nap more and they shop more. Those may be very good short-term solutions but in the long run, it's probably not going to really help the financial stress that they're feeling at home. HARRIS: We're going to talk to a woman next hour in the program. Her name is Sandy Johnson (ph). And we're going to go see her actually, later in the day. She's in Douglasville, Georgia, about 10- 20 minutes outside of Atlanta. And she said, not only am I handling the family books, but I'm also feeling the stress of everyone else in the house.
Do you find that?
MCCONNELL: Yes. Because one of the things that has happening, is that you know, we all bring our stressors home. And all of our -- and who do we take it out on? Our loved ones, often.
HARRIS: Yes.
MCCONNELL: So, they're feeling the stress from the kids at school, they're feeling the stress from their partners at work, they're feeling their own stress, dealing with either worth outside of home, or even within the family.
HARRIS: Got you. So, how is this stress, that all of us are feeling right now, how is it displaying itself physically and emotionally.
MCCONNELL: Emotionally we're seeing more people identifying as -- or they're talking about more depression and anxiety. More irritability. It's really more out of control, which you know, that also can lead to other concerns.
And you know, one of the things that happens with stress is that if there is an underlying physical condition, chronic stress can really exacerbate those things.
HARRIS: Ah. That's -- exacerbate it.
So what do you do? Do you have some thoughts, some tips, some advice on what we do?
MCCONNELL: Well, I think that first of all, we definitely need to evaluate what are our financial stressors? And just stressors in general. Then when you try to identify, what can we change? I mean, there are some things you cannot change. But, we really need to focus on those things that we can change.
Then make an action plan. That's going to be key. Because we all say, I'm going to get to the gym, or, I'm doing to do this, or, I'm going to cut on that vacation next year.
HARRIS: That's right.
MCCONNELL: But then we get caught in the moment. Holidays are coming up. You need to really be very realistic about how we're going to handle the financial stress of the holidays.
HARRIS: OK. As we get closer to the holidays we're going to have you back and maybe you can help us get through the holidays with a decent frame of mind, all right?.
MCCONNELL: I think this holidays is going to be very stressful for a lot of families.
HARRIS: OK. Dr., good to see you.
MCCONNELL: Good to see you.
HARRIS: Thanks for your time.
MCCONNELL: Thank you.
HARRIS: Still to come, the economy and the presidential candidates. Next.
(COMMERCIAL BREAK)
