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AMERICAN MORNING

World Markets Bounce Back; Race to the Finish: Candidates in Battleground States; Joint Investigation Underway in Obama Assassination Plot; Recording Polling Problems; Massive numbers of new voters in Missouri could tip that traditionally GOP state towards Obama

Aired October 28, 2008 - 06:00   ET

THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.


(BEGIN VIDEO CLIP)
KIRAN CHETRY, CNN ANCHOR (voice-over): Race to the finish.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: One week. One week.

CHETRY: Barack Obama making his closing argument. John McCain making the case against spreading the wealth.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I'm running to make everyone successful.

CHETRY: And the finger pointing inside the GOP.

DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: What is rare is to have campaign aides putting a harpoon in the candidate and then some of the candidate's friends firing back.

CHETRY: A new complaint that Sarah Palin is already running her own campaign on the "Most Politics in the Morning."

(END VIDEO CLIP)

CHETRY: One week. Could you believe it? It's Tuesday, October 28th. And fast forward just seven days from today, we're all going to be voting.

JOHN ROBERTS, CNN ANCHOR: Yes. We're going to be talking about the polls opening here, there and every where and the countdown to the polls closing. This is going to be an exciting last week. This is the time in an election campaign where it just gets so interesting.

CHETRY: That's right.

ROBERTS: That last flat-out run into Tuesday.

Meantime, Alaska Senator Ted Stevens says he is not giving up. He's going to pursue his campaign for reelection and fight what he calls an unjust conviction on federal corruption charges. The jury found Stevens guilty on all seven counts of lying to conceal hundreds of thousands of dollars in gifts and home renovations. Stevens who's the longest serving Republican in the Senate is in danger of losing his seat in next Tuesday election. Alaska Governor Sarah Palin called the Stevens' verdict "a sad day for her home state."

Overseas markets roaring back into the black. Japan's Nikkei was up more than six percent. Hong Kong closing up more than 14 percent. In Europe, most markets are trading in positive territory and the Dow futures pointing to a higher opening after recession jitters pulled (ph) down more than 200 points yesterday.

And gasoline prices getting cheaper by the day. This morning, according to AAA, a gallon of regular would cost you $2.62. That's down more than three cents overnight, extended declines for the 41st straight day.

CHETRY: Well, now to the "Most Politics in the Morning." Seven days until we elect a new president.

This morning John McCain and Barack Obama resume their fight for the battleground states. Take a look at this. Barack Obama up by eight points in CNN's latest national poll of polls, 51 percent to 43 percent. We'll see here in a second.

There's also some new polling numbers in key states that point to McCain's steep climb, if you will. In Virginia, Barack Obama ahead by seven points. In Iowa, his lead is 12 points. And in New Hampshire, he's ahead by 11 points. There you see it.

McCain, though, is confident he can close the gap and says that the choice facing Americans is stark.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: This is the fundamental difference between Senator Obama and me. We both disagree with President Bush on economic policy. The difference is he thinks taxes have been too low, and I think spending has been too high. Senator Obama is running to be redistributionist in chief, I'm running to be commander in chief.

(END VIDEO CLIP)

CHETRY: Well, today, McCain will be in Pennsylvania and that's where our Dana Bash is. Dana, McCain likely hoping that his economic message will take the spotlight off of reports of some infighting within the campaign with Sarah Palin.

DANA BASH, CNN CONGRESSIONAL CORRESPONDENT: Yes. And actually, I think they're more looking at the infighting and hoping that that doesn't take away from the economic message. Because, Kiran, as you talk to people inside the campaign, they do say that the fact that he's been pounding away on the message that you just heard there, it's really old-fashioned. It's that the Democrat Barack Obama is going to raise your taxes. I'm a Republican. I'm going to keep your taxes low.

They say it's actually working. It's working with a sector of the population that John McCain needs in a lot of these battleground states with the rural voters, with blue collar voters. So they are going to keep hitting that message. The question though that a lot of Republicans I talked to frankly inside and outside of the campaign are asking is, you know, because this is kind of a no-brainer, if you will, to hit Barack Obama as somebody who's incredibly liberal especially on economic issues, why did they wait until now to do it? Is it too late, Kiran?

CHETRY: And now McCain is behind in the polls but still making a huge push with voters in Pennsylvania, this state in particular where it looks like Barack Obama has him in double digits in terms of the polls. Can he still pull out a win in this crucial state?

BASH: Can he still pull out a win? It's really unclear. Does he have to try? Absolutely. Why?

Because if you look at the map, it is pretty clear that John McCain is going to lose at least one, maybe more of the red states, the states that George Bush won in 2004. So he has to pick up a blue state. And if they look at the map they look at the demographics, yes, it is very, very tough for him here in the state of Pennsylvania but it also is electorally rich. It's 21 electoral votes. So that's why he is spending so much time in the state.

He's going to actually hook back up with Sarah Palin here for a couple of rallies, in the rain, I think later today. So basically he's got to try somewhere. So Pennsylvania for a whole host of reasons is a place he's going to try and they do say it is not necessarily as tight for him inside and their internal numbers as it is in public polling, Kiran.

CHETRY: I got you. All right. Dana Bash, a little dreary behind you this morning. Good thing you're wearing a nice bright blue jacket. Keep it --

BASH: Thank you.

CHETRY: Keep going for us this morning even though it's a little yucky out. Thanks a lot, Dana.

BASH: Thanks.

CHETRY: Well, former Pennsylvania Governor and Homeland Security Secretary Tom Ridge is going to be campaigning with McCain today in the Keystone State. And John Roberts is going to sit down with him coming up at 7:20 Eastern -- John.

ROBERTS: Meantime, Barack Obama is also starting his day in Pennsylvania trying to close the deal with voters there. The state leaning his way. It's got 21 electoral votes. He then heads off to Virginia with 13 electoral votes in play. That state also leaning in his direction.

Joe Biden campaigns in the toss up state of Florida with 27 electoral votes there. Huge prize. Hillary Clinton spends the day in New Hampshire with four electoral votes in a state that's also leaning toward Obama. Michelle Obama is on the stump in New Mexico trying to keep that one in the blue column. It's a state with five electoral votes. Each of the key players carrying a message of change which Barack Obama drove home yesterday.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: In one week's time we can choose an economy that rewards work and creates new jobs and fuels prosperity from the bottom up. In one week, we can choose to invest in health care for our families and education for our kids and renewable energy for our future. In one week, we can choose hope over fear and unity over division, the promise of change over the power of the status quo.

(END VIDEO CLIP)

ROBERTS: Obama also blasted John McCain tagging him as another Republican who will simply follow in President Bush's footsteps.

Right now, the Secret Service is conducting a joint investigation with other federal and local law enforcement agencies after officials say they broke up a plot to assassinate Barack Obama and kill other African Americans. The Feds say these two men described as Neo-Nazis skinheads were arrested last week outside of Jackson, Tennessee, after a botched robbery attempt.

CNN's Jeanne Meserve is tracking the latest developments. How serious was the threat, Jeanne?

JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: Well, John, I have to tell you, federal law enforcement sources are skeptical that these individuals had the ability to pull off their alleged plot but they did have firearms and they were talking big.

According to court papers, 20-year-old Daniel Cowart of Bell, Tennessee, and 18-year-old Paul Schlesselman of West Helena, Arkansas, met over the Internet and shared skinhead views. According to a court affidavit, and this is a quote, "They planned to drive their vehicle as fast as they could towards Obama shooting at him from the windows." Both individuals say that they would dress in all white tuxedos and wear top hats during the assassination attempt. Both individuals further stated that they knew they would and were willing to die during this attempt.

Before targeting Obama, their alleged plans included going on a spree at a predominantly African-American school where they plan to kill 88 people and behead 14 others. They were not discreet, though, allegedly writing racial slogans on Cowart's car with window chalk. And the law enforcement source says there is no evidence they came to any Obama events or tried to get information about his schedule. But according to court papers, they did have an unlicensed sawed off shotgun, other firearms and ammunition, and also had a diagram of a gun shop they purportedly planned to rob to get more -- John.

ROBERTS: Jeanne, were these two guys previously known to authorities?

MESERVE: No. The Secret Service tells me they were not previously known. In fact, they were picked up because of an attempt at a robbery and when they questioned them then they started finding out about this plot.

ROBERTS: All right. Jeanne Meserve for us in Washington this morning. Jeanne, thanks so much for that.

MESERVE: You bet.

CHETRY: Well, stocks are looking up for today's open for once, as world markets rebound overnight from big losses. Christine Romans is "Minding Our Business." She's getting to tell us why October could turn out to be the worse month ever for the Dow and what that means for your money.

Also tracking the vote. Find out why thousands with video cameras are descending on polling centers across the nation. How they're promising to keep officials honest.

It's eight minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back. Christine Romans "Minding Our Business" right now. Looks like a little bit of a rebound for world markets. Fingers crossed.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It's an emotional roller coaster every morning around here. When you look at the stocks, right, futures are up sharply.

We had a world market rally overnight. Some big gains for some of these markets. Hong Kong up more than 14 percent. Tokyo up six percent. Shanghai up 2.8 percent.

You know, they needed it because it has been really rough for a lot of those Asian markets and as you know, every morning coming in here watching the Asian markets down, we're wondering what's going to happen to stock futures in the U.S.

Yesterday, we had a pretty choppy session throughout the day. You didn't really follow through on those overseas losses and then in the last half-hour, boom! The Dow fell 203 points. Nasdaq down 46. S&P 500 down about 27 points. But you know, day-by-day less important than what's happening here overall.

This looks like it will be the worst October on a point basis for the Dow in history. On a percentage basis, the fifth worse. October has been so rotten for stock investors, 25 percent of your stock market value wiped away in just one month. And the damage report year-to-date, the Dow down 38 percent. I mean, this is classic bear market territory.

Nasdaq down 43 percent. S&P 500 down 42 percent. So the silver lining? How much more can it go? A lot of people think that the worst must be over with losses like this. Even another 10 percent likely perhaps, who knows.

October is almost over. Gas prices keep coming down. So I'll leave you with that. And Dow futures --

CHETRY: And a couple of things. Go ahead.

ROMANS: Dow futures up 341 points.

CHETRY: That's nice as well. I'll also leave you with this. Coming up in just about 30 minutes, we're going to be talking to Steve Forbes...

ROMANS: Oh, great.

CHETRY: ... CEO and chairman of "Forbes" and also editor in chief of "Forbes" magazine. He's on the cover this month. They did a special how capitalism will save us. So even though we have unprecedented government intervention right now in the markets, we're going to see.

ROMANS: That would be fantastic. You know, because capitalism has been wounded here, you know, gravely wounded with the government taking such huge, huge stakes in these banks and the like, so it will be interesting to see how he thinks capitalists can save capitalism.

CHETRY: He's the optimist, so I like that.

Good news for a change. At least some hope for a change. Thanks, Christine.

It's 12 minutes after the hour.

ROBERTS: Video the vote.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think that it's important to try to re- instill, you know, confidence in the American voting public.

(END VIDEO CLIP)

ROBERTS: Thousands of volunteers with cameras in all 50 states to document your vote and report potential trouble spots. You're watching the "Most News in the Morning."

(COMMERCIAL BREAK)

CHETRY: Mother Nature helping the Philadelphia Phillies and Tampa Bay Rays make World Series history. Not because of the playing but because of the steady downpour in Philadelphia last night forced game five of the series to be suspended. And there they go pulling the tarp over top of the field. That was the first for baseball fall classic.

The Phillies and Rays were tied 2-2 in the sixth inning. They are scheduled to resume play tonight weather permitting. The Phillies lead the series right now, three games to one. So we're blaming the rain, Rob Marciano?

ROB MARCIANO, AMS METEOROLOGIST: Yes. It's a good call too.

CHETRY: I think you will. Rain and baseball.

MARCIANO: And that -- it was nasty. It was like 39 degrees, raining and tonight doesn't look any better. So a good call to let them play the entire game out, but I don't know if you just don't know if it's going to get -- if it's going to get done.

Forty-three degrees, the expected temperature around game time. It's on and off showers lightly. The winds are going to blowing like 30, 35, 40 miles an hour at times. I mean, it's -- they may want to push it back just one more day.

Pretty bad storm that's kind of winding itself up, getting a little bit stronger I think than what we originally thought. Here you see it on the radar scope. A little bit of white in there. Typically we're looking at darker blues and greens and yellows meaning heavy rain but white indicating some snow in parts of Upstate New York and some of it could be pretty heavy.

Here's the center of the storm. Pretty close to Philadelphia pretty much right over Trenton, Jersey. And this is not only going to bring rain and snow but fair amount of wind as well. High wind warnings posted for the Jersey Shore and this morning the rush commute is just disgusting from Newark all the way to the Bronx, Fairfield County, Orange County in Putnam and Westchester County in parts of Long Island really seeing some heavy rain and some heavy snow falling right now across parts of Upstate New York.

Kiran, we could see over a foot of snow in parts of the Adirondacks before this is done sometime tomorrow morning.

CHETRY: Wow. That seems a little early.

MARCIANO: Just a little. A little bit early, yes. I think Upstate New York, typically even in October, I think the record snow amounts are four, five and six inches in some of the bigger towns.

CHETRY: Wow.

MARCIANO: So this could be a historic event.

CHETRY: All right. Well, speaking -- back to the World Series, I think they're starting at the bottom of the sixth. So maybe they'll get a little break in there in the weather?

MARCIANO: It's possible.

CHETRY: A couple innings.

MARCIANO: But it ain't going to be pretty, I could tell you that.

CHETRY: Yes. All right. Well, blame it on the rain. Thanks, Rob.

MARCIANO: All right. See you, Kiran.

ROBERTS: This morning as thousands of people head to the polls for early voting, they are being met by teams of volunteers. Each one armed with a video camera to record potential trouble spots and ensure that everyone's vote counts.

Here's CNN's Deb Feyerick with the grassroots campaign that promises to be the eyes and ears of this election.

DEBORAH FEYERICK, CNN CORRESPONDENT: John, Kiran, if you're worried about potential problems at your polling station Election Day, one group will be carefully watching video cameras in hand.

(BEGIN VIDEOTAPE)

JEFFREY KEATING, VOLUNTEER, VIDEO THE VOTE: There was a really long time. There was a couple hour wait here earlier today. So I came down to see how people were taking it.

FEYERICK (voice-over): When Jeff Keating heard early voting lines were backed up in south Florida, he grabbed his video camera to check it out.

KEATING: How long have you been in line?

FEYERICK: Keating is among more than 2,000 volunteers signed up across the country to video the vote in their local area.

KEATING: We've been hearing that all the polling places only have two printers and everything needs to be printed out when you're done.

UNIDENTIFIED MALE: I think there is a growing concern in this country whether or not people's votes count.

UNIDENTIFIED FEMALE: I hereby declare Governor George W. Bush the winner.

FEYERICK: Filmmaker Ian Inaba (ph) created video the vote two years ago to prevent the kind of voter suppression he documented in his movie "American Blackout" about the last two presidential elections.

UNIDENTIFIED MALE: Some of the tactics and the policies that are put in place in order to try to prevent voter fraud actually end up suppressing legitimate voters.

UNIDENTIFIED FEMALE: I received 3,422 challenges.

FEYERICK: On the ground in Montana, video the vote helped expose and stop GOP efforts to purge voter lists. In Virginia, volunteers discovered a lack of machines in areas expected to have a high voter turnout.

UNIDENTIFIED FEMALE: When I pressed to enter my vote for the Democrat, the check mark jumped to the one above to the Republican. FEYERICK: In West Virginia, apparent glitches in electronic machines have been improperly registering votes.

UNIDENTIFIED MALE: We do expect there to be a lot of problems, particularly in the swing states with where voter registration drives have increased the number of voters on the rolls there.

FEYERICK: Video is now being uploaded on the Web site Videothevote.org tracking problems real-time.

UNIDENTIFIED MALE: Video the vote will be the eyes and ears of America on Election Day. I think that it's important to try to re- instill, you know, confidence in the American voting public.

(END VIDEOTAPE)

FEYERICK: The power of a grassroots movement trying to ensure every vote is recorded -- John, Kiran.

ROBERTS: Deb Feyerick reporting this morning. And if you are having trouble at the polls, we want to know about it. Call the CNN voter hotline. We're tracking the problems going on now during early voting and any problems that crop up on Election Day. Just give us a call at 1-877-GOCNN-08. That's 1-877-462-6608.

It's coming up now on 21 minutes after the hour.

CHETRY: Closing arguments.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: John McCain has stayed with this president every step of the way.

(END VIDEO CLIP)

CHETRY: How will the last minute smears affect undecided voters? Our experts weigh in.

SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Senator Obama is running to be redistributionist in chief, I'm running to be commander in chief.

You're watching the "Most News in the Morning."

(BEGIN VIDEOTAPE)

MARCIANO (voice-over): In the 1981 film "Mommy Dearest", Faye Dunaway reveals one of Joan Crawford's major hang-ups.

(BEGIN VIDEO CLIP)

FAYE DUNAWAY, ACTRESS, PLAYING JOAN CRAWFORD: No.

(END VIDEO CLIP)

MARCIANO: Bob Kantor sort of feels that way but for different reasons.

BOB KANTOR, CEO, HANGER NETWORK: There's over three and a half billion wire hangers that end up in U.S. landfills every year. They're made from non-sustainable resources. They're shipped halfway around the world.

MARCIANO: Kantor heads up a company that makes eco hangers. They're made from 100 percent recycled paper board and replaced plastic and wire hangers and dry cleaners and our closets.

KANTOR: So we created a product that's replacing something that's bad for the environment but at the same time it is over 50 percent stronger.

MARCIANO: And unlike wire hangers that bend over time, Kantor says eco hangers keep their shape. He also says they withstand humidity and can be reused for as long as the consumer wants.

KANTOR: When it ultimately is at the end of its life, it's simply dropped in a recycling bin just like your newspaper.

MARCIANO: Dry cleaners can get eco hangers for free. Customized printed ads help offset the manufacturing costs. A good business model that's also good for the environment.

Rob Marciano, CNN.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: In one week, we can choose hope over fear and unity over division, the promise of change over the power of the status quo. In one week, we can come together as one nation and one people and once more choose a better history.

(END VIDEO CLIP)

CHETRY: Well, Barack Obama delivering his closing argument. Voters in Pennsylvania -- that's what he's calling it, his closing argument. Voters in Pennsylvania are going to be hearing from both candidates today. We're one week before the election.

And a quick look now at CNN's latest poll of polls. It shows Barack Obama with an eight-point lead, 51 percent to 43 percent. So what do the candidates need to do to win over the undecided voters, six percent as we see in our poll of polls heading into this final stretch.

Well, joining us now is John Avlon, registered independent and contributor to Politico.com, and Patricia Murphy, editor of Citizenjanepolitics.com. Great to see both of you this morning.

JOHN AVLON, AUTHOR, "INDEPENDENT NATION": Good to see you.

CHETRY: So if the number that they're apart is higher than the number of undecideds, what does that mean?

AVLON: Well, it's obviously good news. I mean, you know, want to run up as much as it matters but the rally is the only poll that matters really is Election Day. So Barack Obama is exactly right to caution his supporters. Don't get overconfident and he's right to be moving back to his post-partisan presidential rhetoric, talking about uniting the country, inviting Democrats and Republicans to unite, to move the country not left to right but forward. That's what he should be doing.

CHETRY: Is that air of inevitability that seems to be around the campaign or at least, you know, many supporters? Does that bother independents? Do they want to say, wait a minute, I still haven't made my choice yet?

PATRICIA MURPHY, EDITOR, CITIZENJANEPOLITICS.COM: Yes, it does bother independents badly because independents have been told this entire election cycle it's up to the independents. And independents are also sometimes late deciders. They also are extremely persuadable at any point during an election. So they don't want to know that this decision has already been made for them. So they'll exercise their power at the polls.

AVLON: Yes. Ask President Dewey how that worked out. You never want to start measuring the drapes. But in all seriousness also, you know, McCain should go big at the end. But he wants to win over independents and undecideds, he should not go big by going negative. That's the worst thing he could do.

CHETRY: What can he do at this point? It's a little bit hard when you're seven days out and you're behind this way not to go the route of raising doubts about the choice other people have already made. Go ahead. Let me let Patricia weigh in.

MURPHY: Well, I actually --

CHETRY: Where can McCain really go at this point?

MURPHY: Well, I think that he actually can continue to raise doubts about Barack Obama and if anybody is still undecided, it may be because they just haven't made up their minds about this man. He still so new on the scene to most people that he can still go there. I think that McCain -- that's one place he needs to go. He also needs to continue to push his positive message. But at this point, it's a referendum on Barack Obama.

AVLON: He should run it. McCain should run against unified control. He should give Barack Obama credit for being talented and charismatic but you say, listen, do you really want to turn over the United States government to Harry Reid and Nancy Pelosi and the liberal super majority? Are traditional Democratic economic policies going to compound our current problems, or solve them? That's a rational case he can make. It's not insulting and it will appeal to independents and undecideds.

CHETRY: This is the other fascinating thing which is this early voting. Three states allow early voting. They say that as many as up to 30 percent of Americans may have already voted. This whole notion of being able to vote early, being able to get it out of the way. But then also just the entire voter drive, getting out the vote, how crucial is that going to be, Patricia?

MURPHY: Well, it's crucial for the Obama campaign. They have designed this entire process to bring voters out to the polls not just on Election Day but during these few weeks before when he's been doing so well, he's had such the wind at his back. If he can get those voters to the polls before anything happens before there some sort of surprise, that is excellent news for him. And so, if we look at how these states are voting, we know who's voting early. Democrats are voting in larger numbers than Republicans. That tends to happen most cycles, but it's happening in larger numbers this year.

CHETRY: And quickly before I let you go, redistributing the wealth. This is what John McCain has been talking about on the campaign trail. How do independent voters feel about that?

AVLON: Look, I mean, I think if it's about the economic differences between the candidates, that's a positive contrast. If it goes into silly season by calling Barack Obama a socialist, that's an insult and it's divisive.

CHETRY: All right. Thanks to both of you. We'll be seeing a lot of you this week. It's seven days to go. We're on the sprint now.

John Avlon and Patricia Murphy, great to see you this morning.

MURPHY: Thank you.

ROBERTS: It's coming up now on 29 minutes after the hour and a check of our top stories for you this morning.

We are "Minding Your Business" as Wall Street gears up for an early rally this morning. Dow futures up more than 300 points. How much better does that sound than down 300 points?

Overseas markets in Asia rebounding. Hong Kong closed up more than 14 percent. Japan up more than six percent. And in Europe, most of the markets are in positive territory today.

This morning two self-described white supremists are in jail charged with plotting what's being described as a killing spree targeting Barack Obama and other African- Americans. The men were arrested last week outside of Jackson, Tennessee.

Federal law enforcement sources say they are skeptical that the two had the ability to pull off the alleged plot. A bond hearing for the men is scheduled for Thursday.

And a warning from doctors about the growing threat of so-called super bug infections in schools, on sports teams and in other ordinary social settings. A federal study says drug resistant staph germs are increasingly harder to treat and causing more serious illnesses than in the past. Doctors say the germ known as MRSA can be deadly if it gets into the bloodstream, lungs or organs.

Well, to the "Most Politics in the Morning" now. And it is the final sprint with just a week to go now until the election.

John McCain fighting an uphill battle with little time to turn things around. In the latest CNN poll of polls, he trails Barack Obama by eight points, 51 to 43 percent. And on the trail the economy continues to dominate. Alina Cho and the Truth Squad here this morning keeping the candidates honest. She is with us.

Good morning to you.

ALINA CHO, CNN CORRESPONDENT: A week to go. It all went by so fast didn't it?

ROBERTS: Only a week left of the Truth Squad.

CHO: It has been incredible.

ROBERTS: Maybe we can keep this going after the election, you know?

CHO: I would like to keep it going. I think people like it.

Good morning. Good morning, everybody.

You know, a lot of talk lately about what caused this financial crisis. A lot of talk about that and most believe that a lack of government oversight was at least part of the problem. So Barack Obama continues to hammer John McCain for supporting less government regulation. But 21 times, did he say it 21 times? Take a listen to what Obama said Monday in Ohio.

(BEGIN VIDEOTAPE)

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: The plain truth is that John McCain has stood with this president every step of the way. Voting for the Bush tax cuts for the wealthy that he once opposed. Voting for the Bush budgets that spent us into debt. Calling for less regulation 21 times just this year. Those are the facts.

CHO (voice over): But are they really? We asked the Obama campaign to back up the claim that McCain called for less regulation 21 times this year. They sent over a list of 21 media reports, including this one from "The Cleveland Plain Dealer" back in February. Asked (AUDIO GAP) the people of Ohio he's in touch with them economically, McCain said he would, quote, "reduce their taxes, reduce interest rates, reduce regulation."

But the Obama campaign also counted this more general comment in its tally. It's from "The Providence Journal" in February. McCain was talking about Democrats and said they want bigger government, higher taxes, more regulation." McCain has long supported deregulation. And as the Truth Squad has reported before, many analysts blame that deregulation for the current financial crisis. McCain has since shifted his stance to embrace some government oversight. The question, is the Obama campaign going too far?

OBAMA: Calling for less regulation 21 times just this year.

(END VIDEOTAPE)

CHO: And the Truth Squad verdict on this one is -- sound effects back -- misleading. A CNN review found of the 21 references provide by the Obama campaign a full third of them were not clear calls for less regulation. As you just heard when McCain said of Democrats they want more regulation, the Obama campaign counted that as McCain calling for less regulation, not exactly the same thing.

And as always we're watching both sides. Coming up at 8:00, Sarah Palin says as governor she vetoed $500 billion dollars in spending. Sounds like a lot of money. It is a lot of money, $500 billion. Is she right? You may be surprised at the answer.

ROBERTS: That's like saying if you want more coffee that means I want less.

CHO: Exactly. Not exactly the same thing.

ROBERTS: Fuzzy logic there. Thanks, Alina. Always good to see you.

CHO: Thanks.

CHETRY: One of the tightest races in the country, Missouri. And with Barack Obama and John McCain in a virtual dead heat in this state what will sway undecided voters? We're spinning the dial to see what voters there are saying.

(BEGIN VIDEO CLIP)

CHETRY: CNN equals politics. All day, every day, on TV and online. Right now on CNN.com/politics. Brand new polls from the states that could pick the president. Our interactive electoral map. You decide who wins each state and we show you how it helps their quest for the White House. Plus the political ticker. Our all-star team reports up to the minute news straight from the campaign trail. Check it out today CNN.com/politics.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

CONAN O'BRIEN, HOST, LATE NIGHT WITH CONAN O'BRIEN: Political experts say that John McCain's only chance of winning the election next week is to attract swing voters. That's what they're saying, yeah. But unfortunately McCain thinks swing voters are people who listen to Glenn Miller.

(END VIDEO CLIP)

ROBERTS: Final laugh at the presidential campaign is upon as both John McCain and Barack Obama dueling for the state of Missouri. It is a solid Republican state, but according to the latest CNN/TIME/Opinion Research Corporation poll, Obama and McCain are in a virtual dead heat. So, why is this race so close? Joining me now is McGraw Milhaven, a radio talk show host at KTRS in St. Louis.

McGraw, thanks for getting up early. When you look at those numbers it's a one point race currently according to some polls, it has been Obama up two, McCain up two. It is kind of going back and forth, but you looking at the governor's race, the Democrat is leading the Republican by 14 points there. Why is difference in the poll numbers here?

MCGRAW MILHAVEN, RADIO TALK SHOW HOST: John, thank you very much for asking. More than happy to get up early.

That's the $64,000 question. You have the Democratic governor up 14, you have Barack Obama up 1, or basically tied with McCain. You have to look at it as nothing other than - and I hate to say it -- there's a lot of people having a hard time embracing Barack Obama probably because of the color of his skin.

Missouri has been defined by race ever since the Civil War. And unfortunately, in 2008, that has to play some role in this, assuming these polls are relatively accurate. Let's say they are a little off 3 or 4 this way, 3 or 4 that way. That's still a 7-, 8-point difference. Why? I think you have to ask the question, is it race?

ROBERTS: You know, McGraw we saw the picture from last week where Senator Obama had that rally beneath The Arch in St. Louis. And he jammed so many people in there; tens upon tens of thousands. So, St. Louis seems to be solidly in Barack Obama territory. But what about across the rest of the state?

MILHAVEN: That is actually, St. Louis City and St. Louis County are probably the two most heavily Democratic areas going. And in the county, they have 100,000 new registered voters. If Barack Obama wins the county by say 55, 56 percent he has a Missouri locked up. The rural areas -- it is very rural versus city here. McCain will win the rural areas and then Barack Obama has to win big in the city centers, Kansas City and in St. Louis.

So, that's traditionally how it's going to go. Are they going to come out and vote for Barack Obama? We'll have to wait and see.

ROBERTS: As you said, 100,000 newly registered voters in the county, surrounding St. Louis. Across the state I think it's 250,000. And 30,000 of those new voters are African-Americans. But there in Missouri you don't register by party, so you have no idea how many have many Republicans have registered versus how many Democrats. But how do you think the vote is going to break down?

MILHAVEN: You are right. You don't know that. But what we do know is that many of those 100,000 new voters in the county came from heavily Democratic areas, in a heavily Democratic county. So we can only assume that those people, those 100,000 voters, which will what, turn out to be 80,000, 75,000 voters? A lot of them will probably end up voting for Barack Obama.

ROBERTS: Then of course, there's the Independent vote. Both of these candidates won in the primary. Both of them won among Independents. So, we'll have to see which way they go.

McGraw Milhaven, it is great to see you this morning.

MILHAVEN: My pleasure.

ROBERTS: Thanks for getting up for us.

MILHAVEN: Thank you. You got it.

ROBERTS: We'll talk to you again soon. Appreciate it.

(BEGIN VIDEO CLIP)

CHETRY (voice over): Second guessing Sarah Palin. Former Pennsylvania Governor Tom Ridge. Find out why he thinks the race would be different if he had been picked for vice president. You're watching the most news in the morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

JAY LENO, TONIGHT SHOW WITH JAY LENO: I want to ask you about your wardrobe. I'm guessing about 60 grand?

(LAUGHTER)

LENO: $60, $70,000 for that outfit?

MICHELLE OBAMA, WIFE OF BARACK OBAMA: Actually this is a J. Crew ensemble.

LENO: Really, wow.

(APPLAUSE)

(END VIDEO CLIP)

CHETRY: You know what? The candidates and their spouses are wearing remains hot topic after it was revealed that the Republican Party shelled out $150,000 last month for Sarah Palin's wardrobe when she was announced as VP nominee. But is the coverage fair? Here's CNN's Jason Carroll.

(BEGIN VIDEOTAPE)

JASON CARROLL, CNN CORRESPONDENT: Only minutes into Monday's episode of "The View" another controversy concerning Governor Sarah Palin. ELISABETH HASSELBECK, CO-HOST, THE VIEW: I thought that the attacks on her clothing, through the media, has been deliberately sexist.

CARROLL: Palin's estimated $150,000 card robe paid for by the GOP. Worthy of criticism, or a sexist charge lobbied at a woman running for vice president?

JOY BEHAR, CO-HOST, THE VIEW: She has the right to say I don't want to wear those clothes because I'm presenting myself as this Wal- Mart hockey mom.

BARBARA WALTERS, CO-HOST, THE VIEW: One of the first things you brought up were her clothes. Enough already!

CARROLL: So co-host Elisabeth Hasselbeck brought it up at a Palin rally.

HASSELBECK: Instead of the issues, they are focused, fixated, on her wardrobe. This is deliberately sexist.

CARROLL: Some Palin supporters say it's a no-win situation.

AMANDA CARPENTER, TOWNHALL.COM: Some people see hypocrisy in the fact of the way she has campaigned on working class values and that she happens to wear nice outfits. But at the same token, if she would have went to the Republican National Convention in some kind of off- the-rack suit I think she would have been hammered similarly as hard.

CARROLL: But that type of criticism crosses party lines. There was plenty of ink dedicated to Senator Hillary Clinton's pant suits.

DEBBIE WALSH, CTR. FOR AMERICAN WOMAN & POLITICS: It is significant that women still, in 2008, are being talked about not just for what they are saying and for the issues that they stand for, but because of how they look.

CARROLL: Men, too. As Democratic presidential contender John Edwards was after he spent hundreds on a hair cut. Palin says most of the clothes in question will be returned or go charity.

PALIN: Those clothes --they are not my property. I'm not taking them with me. I'm back to wearing my own clothes from my favorite consignment shop in Anchorage, Alaska.

CARROLL: And hopefully back to debating other issues. Jason Carroll, CNN, New York.

(END VIDEOTAPE)

ROBERTS: Warm up acts.

Hi, I am Peter Muenos (ph), but you can call me Peter the Builder.

ROBERTS: Jeanne Moos looks at the most unusual cast of characters in charge of pumping up the crowds for the politicians.

UNIDENTIFIED MALE: Just a few more weary days and no more George Bush!

ROBERTS: You're watching the most news in the morning.

(COMMERCIAL BREAK)

ROBERTS: As the campaign draws to a close there was no shortage of weird and wacky moments out on the trial. Our Jeanne Moos has been watching all of them and has another edition this morning of the "Campaign Follies".

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT (voice over): Will the fake Sarah Palin please raise her pom-pom? There she was, chanting his name.

AUDIENCE: John McCain! John McCain! John McCain!

JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: Thank you.

MOOS: Basking in his praise behind his back.

MCCAIN: She is a great reformer and great person and I'm proud. Thank you for your support of Sarah Palin as well. I'm very grateful for that.

MOOS: The mystery look alike Sarah even chanted her name.

AUDIENCE: Sarah Palin! Sarah Palin! Sara Palin!

MOOS: Hey, sometimes folks don't believe you're the real thing even when you are. For instance, when Barack Obama was dialing for votes.

SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Doesn't it sound like me?

MOOS: At an Obama rally the microphone died. At a McCain rally the lights kept going on and off on Senator Lindsay Graham.

SEN. LINDSAY GRAHAM, (R) SOUTH CAROLINA: Will Joe the Plumber.

MOOS: It is Joe the Electrician they need.

MCCAIN: I think the lighting is brought to you courtesy of the Democratic National Committee.

OBAMA: Somebody from the McCain campaign kicked our plug out of the socket.

MOOS: The warm up act at these rallies seem to be getting wackier.

UNIDENTIFIED MALE: I am Peter Muenos, but you could call me Peter the Builder.

MOOS: For the Democrats there was Cecil the president of the United Mine Workers.

CECIL ROBERTS, PRES., UNITED MINE WORKERS OF AMER.: Just a few more weary days and no more George Bush!

MOOS: Not to mention Senator Robert Byrd answering his own question wrong. Though the crowd got it right.

SEN. ROBERT BYRD, (D) WEST VIRGINIA: The next president, who is he?

AUDIENCE: Barack Obama!

BYRD: Joe Biden!

MOOS: The rally chants also seem to be getting odder from, "I am Joe."

CROWD: I am Joe! I am Joe!

MOOS: To bless your heart.

CROWD: Bless your heart! Bless your heart!

MOOS: To vote McCain, use your brain.

CROWD: Vote McCain, use your brain!

SARAH PALIN (R), VICE PRESIDENTIAL CANDIDATE: You bet you! That's good.

MOOS: Not so good was what happened to a hockey player on this carpet just before Sarah Palin dropped the puck for a St. Louis/Los Angeles game. Goalie Manny Legasse (ph) slipped on the carpet, hurt his hip and had to leave the game.

(On camera): Now we've all heard that Senator Biden is long winded. Now we have visual proof thanks to a cub reporter, with a tired arm.

(Voice over): Sixth grader Damon Weaver (ph) asked Biden what a vice president does. The senator went on and on. Daman's arm sagged.

JOE BIDEN, (D) VICE PRESIDENTIAL CANDIDATE: When the president comes up with an idea.

MOOS: Sometimes weighing a candidates' word can be heavy lifting. Jeanne Moos, CNN -

UNIDENTIFIED MALE: Senator Biden is now my home boy.

MOOS: New York.

(END VIDEOTAPE)

CHETRY: Lost: From the battlefield to the ballot box. How could it be that votes cast by our troops won't count.

UNIDENTIFIED FEMALE: Frankly, I think it's very unpatriotic.

Plus, Michelle Obama on Sarah Palin's wardrobe. So where does she shop? You're watching the most news in the morning.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the most news in the morning. With just one week until election day. The economy, issue number one, both the markets and consumer confidence down and many economists are saying we're headed towards a global recession. But one man says if the next president plays the right cards, better days are ahead. That man is the chairman and CEO of Forbes Incorporated, and a special economic adviser to the McCain campaign, Steve Forbes.

Thanks for being with us.

STEVE FORBES, CHAIRMAN, CEO, FORBES, INC.: Good to be with you, Kiran.

CHETRY: You're on the cover. They did a special edition of your magazine. This is the first time you are actually on the cover. And you talk about why capitalism will save us. So, explain because really what we've seen is an unprecedented government intervention in the way of this bailout and a lot of people are asking is capitalism dead.

How will it save us?

FORBES: I think you have to understand what caused the crisis. One was the weak dollar which made the bubble far, far bigger than it would have been otherwise. Fannie and Freddie going berserk, as well, also inflated the bubble. Then mistakes made on accounting, on short selling, just created the perfect storm.

What you have now, is the steps that are being taken now are the result of, say, the natural disaster. You rush in the food, you rush in the medicine, you rush -in this case you pump money back into the banks and get them back on their feet. But if we don't continue to make mistakes, that is, we stabilized the dollar, get the banks recapitalized, and don't make a big raise in taxes you'll see start to see these economies, here in the United States and around the world, start to improve by springtime. The strengths are still there. This financial crisis a temporary disaster but it needn't be permanent.

CHETRY: You talk about this greatest period of wealth and prosperity that took place from the '80s until now. It feels bad. But explain why, you said in this article, that the economy still has enormous strength. You're talking about the global economy.

What are those strengths and why are you so confident?

FORBES: Well, the very fact of mobility of capital. Countries around the world have been removing barriers to get ahead. You see it in India, you see it in China, in Central and Eastern Europe, that growth rate is higher than the Asian region; parts of Africa, even outside of commodities moving up. Latin America, pieces there, countries there, moving up. These are strengths that the U.S. is on a wave of new innovation. In the next few years we are going to have another wave of the Googles and Microsofts coming online. So, the strengths are there. The question is, will we have the environment where they can play out? That's why it's so important to get this credit crisis behind us.

CHETRY: You're also a very - you are a huge proponent of the flat tax. When you ran for president, two different times, you talked about the importance of the flat tax. And as we're hearing from Barack Obama, and it's what John McCain has been using to hammer home why Barack Obama's a bad choice, he will be raising taxes, or letting some of those tax cuts expire on people making $250,000 or more.

Why do you feel that's dangerous?

FORBES: Well, what it is, you have to realize taxes just don't raise revenue. They are a price and a burden. If you start raising the price of good things like investing capital, taking risks, creating jobs, you'll get less of those good things. That's what we should have learned from the 1980s. When we reduced those burdens, and other countries reduced those burdens, they started to surge ahead. So at a time when we've had a credit crisis, created by government mistakes and the binging you saw elsewhere, Wall Street and elsewhere, now that we're finally dealing with that crisis the worse thing you can do is in effect start to bleed the patient. You have to get the patient back on its feet.

CHETRY: Doesn't it sound good when Barack Obama is on the campaign trail saying, I'm going to cut taxes for 95 percent of you that are out there feeling the pinch?

FORBES: What I think, when you look at that, first, 40 percent of the American people don't have to pay federal income tax. So that is going to be a check in the mail. That's redistribution of income. But the thing is you have to look at tax rates. He's not cutting tax rates the way Reagan did, the way John Kennedy did in the 1960s, a boom period.

When you reduce rates, when you allow people to take risks and have incentives for them to take those risks, you will get more risk taking, more innovation. And start bringing some of these inventions online. And that's what you see around the world.

People are doing that. Governments are doing it; 25 countries have enacted the flat tax including big ones like Russia, and small ones in the Baltic area, and elsewhere. It has worked everywhere. So, where the rest of the world is starting to move in the direction of reducing burdens, I think the danger is we'd go in the opposite direction. So, I hope if Senator Obama wins this election, which I still think is still a very fluid situation, I hope he doesn't do that because that will hurt the American economy, which will wind up hurting him politically. CHETRY: All right. Well, it is great talking to you this morning, Steve Forbes, chairman and CEO of Forbes, editor and chief of "Forbes" magazine.

Thanks for being with us this morning.

FORBES: Thank you, Kiran. Enjoyed it. Thank you.