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Markets Plummet; Obama Keeping Too Low a Profile?

Aired November 20, 2008 - 20:00   ET


CAMPBELL BROWN, CNN ANCHOR: Hey there, everybody.
Tonight, a rush of developments that will affect your money, possibly your job.

And we're going to start tonight with the breaking news.

Bullet point number one, another dramatic plunge for the stock markets. The Dow Jones industrials lost 445 points today. It closed at a five-year low. Another measure of the market's health, the S&P 500 index, hit an 11-and-a-half-year low. In total, stocks lost $700 billion in value today alone.

And the big reason for the big drop is bullet point number two, the bailout battle. The on-again, off-again auto industry rescue package may actually be on again. But before Congress even considers forking over 25 billion bucks, it is going to give -- or it is giving, rather, the top bosses of Ford, Chrysler, and GM a deadline, December 2, just 12 days from now, to tell us exactly how they will spend the money.


SEN. HARRY REID (D-NV), MAJORITY LEADER: We want them to get their act together. We want them to come up with something. We are here to help. We're not against the auto industry. We want to help those people keep those jobs. And, yes, we're kicking the can down the road because that'll give us the opportunity to do something positive.


BROWN: So, tonight, the auto crisis, the mortgage crisis, the banking crisis are conspiring to create one colossal unemployment crisis.

And that's bullet point number three. The government announced today that initial claims for unemployment insurance hit a 16-year high. Another 500,000 people asked for help last week alone.

Treasury Secretary Hank Paulson admitted today the experts are making it up as they go, and he has no idea when this economic crisis is going to be over.


HENRY PAULSON, U.S. TREASURY SECRETARY: There is no playbook for responding to a once- or twice-in-a-100-year event. We're going to have some challenging months in here, but we're going to work through this. But I can't give you a date.


BROWN: All of that ahead.

But, first, as always, we're cutting through the bull.

I just mentioned today's big development in Washington, all those Democrats demanding that the automakers tell them what they mean to do with the billions of dollars they are begging for. Take a listen.


REP. NANCY PELOSI (D-CA), SPEAKER OF THE HOUSE: Until they show us the plan, we cannot show them the money.


BROWN: Now, there is a stroke of genius, asking for a plan.

Why didn't anybody think of this before, to say, you know, before we give you tons of money, you have got to tell us what you're going to do with it. That way, we can decide whether we ought to give you the money or not, because, if it's a good plan, if it makes sense, then, that's one thing, whereas, if it's a bad or a stupid plan, then that's something else again.

But, either way, the decision to dole out the dough will actually be based on what you might call judgment and thinking, rather than the what-the-heck principle we seem to have been using up until now. Never mind a bullseye. Whichever congressional genius came up with this bold idea, this the idea of demanding to know what automakers mean to do with the money they're asking for, that person deserves a Nobel Prize.

Just imagine having the smarts to say, after being asked for 25 billion bucks, um, what for? So, now we are getting somewhere.

And now back to breaking news. And we will find out from Ali Velshi if we are actually getting somewhere, or not. He's going to try to make sense of this very complicated and, of course, very personal to all of us right now.

Ali, walk us through this step by step. And why don't you start with the market? The market closed today a little over 7500 points. Conventional wisdom was 7600 was as low as it would go. What is going on? How bad is it going to get?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Yes. In fact, I had been telling you about a bottom that might have been forming between 8500 and 9000 on the Dow. Forget that.

I'm not going to show you today's chart. I'm going to take you all the way back to a year ago, October 9, 2007, a little more than a year ago. The Dow hit its all-time high, 14164. Take a look at how this market has done over the course the last year. And look where it's gone.

Today, we are 7552. There are some people out there who are thinking, boy, this is a better deal than it was when it was at 8500. There are others thinking, I don't know what to make of this. The failure or the inability to get a deal for the auto industry, the fact that the banks, Citigroup still continues to have problems. It lost about 30 percent today. General Motors is trading a little bit better than two bucks a share.

And you're right. One of the reasons why nobody asked for a plan from the automakers is because we were too busy looking for someone to blame. Somebody finally said, what exactly will they do with this kind of money?

Take a look at the loss today, the total loss in stocks today, $700 billion. This is getting very, very hard to bear for people, Campbell.

BROWN: And, Ali, if that wasn't bad enough news, unemployment claims this month much higher than economists expected.

VELSHI: Yes. We get a monthly unemployment number. The unemployment rate is 6.5 percent right now. We have lost 1.2 million jobs so far this year.

But we also get these weekly jobless claims numbers -- 542,000 people lined up for the first time for unemployment insurance last week, 542,000 in one week, OK? The number of people who are on the unemployment rolls right now, 4,012,000, that is the highest number we have had since the 1980s. This 542000, that's the highest number we have had in 16 years.

That's a real indicator of what we're going to get in the first week of December, when we get November's unemployment numbers. And there are a lot of people who expect we may add another 250,000 people to the jobless rolls in November, maybe another 250,000 in December, so that by the time we get to inauguration, we may be out two million jobs in 2008 -- Campbell.

BROWN: All right, Ali Velshi for us. Ali, I know you're going to come over and join the panel here to go a little more in-depth on this for more on how and sort of when we think we will get out of this mess and what will save us ultimately.

We have got Peter Schiff, president of Euro Pacific Capital, with me tonight. He's also the author of "The Little Book of Bull Moves in Bear Markets." And university of Massachusetts, Boston, professor Christian Weller, senior fellow at the progressive learning Center For American Progress.

Welcome to everybody.

Let me start where we started, frankly, which was the auto deal or what Democrats in Congress are telling the auto industry. Show us the plan, we will show you the money.

Christian, in your view, what should the plan be? What should they come back with?

CHRISTIAN WELLER, CENTER FOR AMERICAN PROGRESS: Well, I think it's important we do have to have a plan. It's important to understand that the auto industry is still a place where there are good jobs with good wages.

And that's exactly what we need. But I think we need to fight back on this brazen arrogance that we saw from the leaders yesterday that waltzed into Congress and just simply said, like, give us the money.

And I think the important plan part is here a plan that moves the auto industry towards more fuel-efficient cars, a plan that limits executive compensation, and a plan that protects employee benefits, because the employee groups have already given up substantial amounts in the ongoing restructuring in the industry.

BROWN: But, Peter, I know there are a lot of people who say that all of this is simply rearranging deck chairs on the Titanic, that no plan is ultimately going to save the auto industry.

PETER SCHIFF, AUTHOR, "THE LITTLE BOOK OF BULL MOVES IN BEAR MARKETS: HOW TO KEEP YOUR PORTFOLIO UP WHEN THE MARKET IS DOWN": Look, if the government just takes taxpayer money and give is it to GM, they are just going to lose the money and be back for more.

We have to let these companies go bankrupt. We have to let the capital that they're using be redeployed and let people who can run a profitable automobile company take over.

The problem is, they have these union contracts that are too lucrative. They have all these benefits that they promised for health insurance, for pensions. They have too much debt on their balance sheets and they can't make cars profitably.

And what we don't want is the government determining what type of automobiles GM should be manufacturing, because if we think they're losing money now, wait until we see how much more money they would lose when the government is running them.

BROWN: But...

WELLER: Well, but we're at this point -- let me just jump in here.

BROWN: Yes, go ahead.

WELLER: I think the important point is we're scratching our heads why this TARP and all this bailout money doesn't work.

And the main thing is because, when we throw money at the financial markets and that's it, we leave it at that, we simply assume this kind of pie-in-the-sky policies that we have been pursuing for a number of years, where money somehow falls into the laps of consumers, will continue.

And what we're forgetting is, we need to get income growth back on track. And, for that, we do need a strong middle class. And, unfortunately for Mr. Schiff, a strong union movement, a strong labor movement is one of the most prudent ways of strengthening...


SCHIFF: No, it's not. That destroys jobs. What creates the middle class is low regulation and low taxes.


WELLER: We had a strong middle class in the '60s and '70s, when we had a strong labor movement.


SCHIFF: Well, your logic is faulty.


WELLER: The numbers show very clearly that, when you have a strong labor movement, when you have strong unions, you have the countervailing forces to rein in the excesses that we have seen in the boardrooms in America...


SCHIFF: That's simply not true.


BROWN: Christian, hold on a second.


BROWN: A reality check, because, frankly, Christian sounds to me like somebody who's making a case from the '70s. That's just not related to the conversation we're having.


WELLER: No. I'm making a case for bringing back America's middle class.


WELLER: ... we have ignored for seven years.


BROWN: All right, Christian, hold on.


BROWN: I want Ali in here.


BROWN: Hold it, Christian.

VELSHI: Christian, there are handful reasons why the U.S. auto industry, the domestic auto industry is in the crisis it is in. And one of them is the union. There's no question. I don't think that argument is sound.

But, Peter, you are one of the smartest guys I know, and you have predicted a lot of what's happened out here. But deep in there, there's a heart somewhere. You can't let the companies fail, so that they can restructure and capital can flow where it was. What happens to the million-plus workers who are put out of work?


BROWN: I'm with Ali on this. We're talking about a whole lot of people.

SCHIFF: Well, remember, the government doesn't really have any money, so they have to redirect money from someplace else.

VELSHI: Right.

SCHIFF: So, let's focus on all the jobs that the government's going to destroy in order to save the jobs at GM.

VELSHI: Yes, but why don't we start those jobs?

Here's the thing. These companies are not all in the same boat. We talk about bankruptcy, we're largely talking about General Motors, which is in danger of bankruptcy. Chrysler is a private company. We have no idea how bad things are at Chrysler. Ford is relatively healthy.

BROWN: So, here's my question. Can you let GM and focus on saving the other two?


SCHIFF: The government can't do anything. Why should we prop up an unprofitable company and tax profitable companies to subsidize them?

Look, I think we need an automobile industry in this country, but we don't need this automobile industry. We need a profitable automobile industry that is making cars that the public wants to buy at a price they can afford.


VELSHI: Who is that? Who does that?

(CROSSTALK) SCHIFF: Well, we will find out. Let's find out in bankruptcy. Let us let somebody buy these assets.


WELLER: The attitude that the government can't do anything is exactly the policy attitude that we have had for the last several years.


SCHIFF: No. That's not true.

WELLER: So, it got us into this mess.

SCHIFF: No, it didn't.

WELLER: We have had an administration and a Congress through 2006 that just simply turned a blind eye to the economic problems that were piling up, declining incomes...

SCHIFF: No, the government created these problems.


WELLER: ... rising debts.

BROWN: OK, guys, we're getting into the weeds here a little bit.


BROWN: OK, hold on. Hold on.

We're going to take a quick break, because I want to try to bring this back to a little bit of big picture. We're getting lost in the weeds and we're sort of missing the point. So, stay with me.

When we come back, our Gary Tuchman is in Moraine, Ohio, where plants are already shutting down right now. And it's a preview of what we're talking about and where all of this may be heading. Take a look.


GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): Have you started looking for a job already?

UNIDENTIFIED MALE: Oh, yes. I have been to an interview (INAUDIBLE)

TUCHMAN: And how did they go?

UNIDENTIFIED MALE: I don't know. They haven't called me back. (INAUDIBLE)

(END VIDEOTAPE) BROWN: That situation has a lot of people, including president- elect Obama, thinking a lot about FDR, about his New Deal, about the way he put unemployed workers back to work rebuilding the country. We're going to talk about that.

There's some disagreement here -- shock, big surprise.

Also ahead, the government is ready to give a break to homeowners who are three months behind on their mortgages. But is that an incentive to skip three payments to try to take advantage of this plan? Some people are thinking about it. Personal finance expert Jean Chatzky will be here talk to about it.

Plus, a NO BIAS, NO BULL update on president-elect Obama and whether he's keeping too low a profile in the midst of this economic crisis.



SEN. GEORGE VOINOVICH (R), OHIO: If we don't get this done, and they do go under, I believe that we're going to have a deep recession, and, quite frankly, from what I can pick up, we may just go over the cliff.


BROWN: We are covering the breaking news tonight. The markets plunge over uncertainty about the auto bailout. That was Republican senator George Voinovich of Ohio this afternoon, as senators announced a bipartisan compromise on a bill to bail out U.S. car companies.

First, though, the automakers have until December 2 to tell Congress how they would spend the $25 billion. But what if that doesn't work? What if the car companies fail?

To try to get a better handle on that, we sent Gary Tuchman to Moraine, Ohio, where two plants and all the jobs they provide are already going, to borrow the senator's words, over the cliff -- Gary.

TUCHMAN: Well, Campbell, if the Big Three U.S. automakers go under, a lot of towns will start looking like Moraine, Ohio. Moraine relies on the auto industry, but they're about to have economic catastrophe, because behind me is the GM truck plant. There used to be 4,000 employees there. There are now 1,000. They have trickled down over the months.

And as of December 23, there will be zero. GM is shutting down the plant. And it's a huge domino effect in this area here in southwestern Ohio. A few miles away is a GM supplies plant, where they bring the radiators, they bring the shocks, and they bring the tailpipes, the taillights to the GM plant. And since GM is their own customer, they, too, are shutting down on December 23.

The employees will not get severance. They will not get medical insurance. Many have been there for years. They are out jobs. The owner of the plant is very sad about this. But GM is his only customer. He tells me -- quote -- "This is hard as hell." The employees don't know what they will do next because there are not many jobs around here.


TUCHMAN: How scared are you?

KEVIN HOWARD, GM EMPLOYEE: Until someone asks, you know, you don't -- you try not to think about it. You know, I'm very scared, you know. But, you know, you try not to think about it, you know. We're waiting until the last moment, I guess, to be scared.

TUCHMAN: Tell me about the fear -- now that we're thinking about it, on December 23, you don't have a job anymore. And there's no severance.

HOWARD: Right.

TUCHMAN: What do you do?

HOWARD: Well, I call my creditors and tell them that I'm going to start being late.


TUCHMAN: In addition to businesses closing down, other businesses are afraid they will close down. Right next to the GM plant is the Upper Deck restaurant and bar. This was a gold mine area, next to 4,000 employees next door. There used to be lines to get in here for lunch and after work. Now it's very rare that this place is a quarter full.

You know, there are a lot of friendly people here, Campbell, in Moraine, Ohio, but economically you do not want your town to become like this -- back to you.

BROWN: Gary, any chance GM could keep the plant open if they get the bailout they're asking for?

TUCHMAN: I mean, that's the question a lot of people here in Ohio are asking. I said, OK, if we get that bailout, if GM and Ford and Chrysler gets all that money, will you open the plant?

And GM is basically saying, this is a done deal. This decision was made already. So, this town has to start doing some new things because the die has been cast here already.

BROWN: Gary Tuchman for us tonight -- Gary, thanks very much.

And let's bring back our panel right now, Peter Schiff, again, president of Euro Pacific Capital, UMass Boston professor Christian Weller, and chief business correspondent Ali Velshi.

Ali, you know, there it is. That is in the starkest terms what's happening to this one town, and that's by no means the only town.

VELSHI: We have all seen this. I have been in Detroit for every one of those layoffs in the last five years.

And what that gentleman, who Gary was talking to, was saying, you know, he's going to have to tell them his payments are going to be very late, because if you lose a manufacturing job in this country, and we have lost four million in the last decade, there is no chance you're getting another job anytime soon.

So, Campbell, I'm going to be here for the next several months telling you about how bad the job situation is. And I would just like preemptively to be here tonight and say there's a way out of this thing. President Obama has talked about his green-collar jobs, possibly five million of them.

BROWN: Let him finish. Let him finish.

VELSHI: Possibly five million of them.

We need to build. We need to rebuild our grid. We need to build -- connect it to solar and wind power. We need to talk about T. Boone Pickens' plan, what's left of it. We need to refurbish buildings, so they're more environmentally friendly.

We need workers. And guess what? There are lots of workers who have no other hope of getting a job. Why don't we invest money in doing that now? It's so much easier to save a job than to have to create a new one.


SCHIFF: Ali, where is the government going to get the money? The government is broke. We don't have any money to create jobs through the government. We need the private sector to create jobs.


VELSHI: The government can guarantee loans to private construction companies to say, do this.


SCHIFF: Where are they getting the money? What if the loans go bad?


VELSHI: Where did we get the $700 billion from, Peter?


SCHIFF: And when the government guarantees loans to somebody else, they deprive somebody else of credit. There isn't an unlimited amount of credit.

BROWN: All right. Hold on. I want to get Christian's take on this.

What do you think? This is like -- this is going to -- it's being debated beyond what Ali is mentioning here. You hear these comparisons made, Obama to the new FDR and perhaps the need for a new New Deal to jump-start.


SCHIFF: We can't afford the old New Deal.

BROWN: Hold on. You are going to get your chance to respond.

Christian, what do you think?

WELLER: Well, I think it's important to keep two things in mind.

I don't think Obama is a fair comparison to the new New Deal. Some people have made this. I think there is much more emphasis on the private sector and all of these plants, for instance, loan guarantees and other mechanisms.

But I think what Ali mentioned is an important step, especially the focus on green energies and fuel efficiencies and other things. That has two effects. It has a short-term effect to putting a lot of people back in their jobs in manufacturing and construction, which are critical jobs for rebuilding the middle class.

But the other part is also, these industries can ultimately reduce the price instabilities that we have seen in the energy sector, which ultimately are a drain on our economic growth for the long term. So, I think the focusing on green jobs, green-collar jobs, green energy, alternative fuels, green efficiency, all of that will ultimately help us to bring back jobs now...

BROWN: All right.

WELLER: ... to stabilize labor markets, but also put the economy on a stronger growth pattern for the future.

BROWN: All right, Peter, go ahead. You...

SCHIFF: Well, we don't want the government trying to micromanage the economy, try to take over the auto companies and...


BROWN: Well, that is what is happening now, whether we want it or not. The government is micromanaging the economy.


WELLER: We shouldn't be doing it.

And just two wrongs don't make a right. Just because they bailed out Wall Street doesn't mean they start to bail out Detroit. The government should let companies fail where they need to fail. (CROSSTALK)

VELSHI: How many people will be out of work?

SCHIFF: I don't know.


VELSHI: Give me a number, because people have said three million people .

SCHIFF: Ali, I think tens of millions of Americans are going to lose their jobs.


SCHIFF: And, unfortunately, because of what the government is doing, they're not going to get new jobs.


VELSHI: Those tens of millions of people weren't in your economic class. They didn't understand the theory. They just went to work and built things. And they will be out of jobs because somebody else made a bad decision.


VELSHI: And how do we get our economy back?


WELLER: I actually agree with Mr. Schiff on something.

SCHIFF: And if the markets are allowed to function, they are going to get new jobs, but the government is not letting that happen. The government is standing in the way of the markets.


WELLER: Let me jump in here.

I think the important piece is that we don't necessarily want to micromanage the economy. I don't think that that's necessarily where we want to go.

But, importantly, what the government is doing, and I think what the Obama administration is going for and what the Congress is looking for is to restructure the economy with sensible policies. And part of that package is to emphasize energy efficiency and energy independence. That's part of -- it's a sensible ingredient into long- term growth.

SCHIFF: If the government stays out, this economy is going to restructure itself. The problem is...


WELLER: But that comes with a lot of pain.

SCHIFF: Look, I know, but we can't do anything about it. We have a phony economy.

WELLER: But that's exactly the attitude that got us into this mess.

SCHIFF: No, it's not. We have a phony economy.

We have been consuming too much. We have borrowed trillions of dollars from abroad. We have blown it on consumption.

WELLER: But we didn't pay attention to income laws.

SCHIFF: Look, we have a phony service sector economy that has to implode. We have to start producing. We have to start saving. And this is a painful transition.

The days of partying are over. We have run up this huge bill on a credit card. We can't pay it back. We are in trouble. This is a serious economic crisis. And it's not going to be solved without a lot of pain. And, unfortunately, all these government efforts to reflate the bubble are just making the problems worse.

WELLER: I agree with you. But like there is an alternative. And it's striking to me that you ignore the alternative. The alternative is to make sure that families have income.


SCHIFF: But the government can't do that.

WELLER: Well, the government can do it.


SCHIFF: No, it has no money. It has a printing press.


BROWN: Peter, it's not going to like we're going to let the entire Midwest starve to death. So you need a reality check. There's got to be some sort of compromise here.


SCHIFF: No, but the government doesn't have any food. No, all the government can do is take money from some -- one person and give it to somebody else. All they can do is spread the misery and spread the poverty around.


BROWN: Hold on, Christian. (CROSSTALK)

BROWN: We're almost out of time here. Ali gets the last words.

VELSHI: Both of you have studied this. And you both do make points that are valid.

But what do you do to the Moraine, Ohios, across the Midwest? What do you do to places that still look like Flint, Michigan? What happens? Because we will have dozens of them. We will have hundreds of them.

BROWN: Decimated.

SCHIFF: I know. But what the governments need to do is understand that they're too big. Governments have to cut spending, so that these poor people...


WELLER: The government is not just the federal government in Washington.


BROWN: You guys...


BROWN: ... a classroom somewhere hashing this out.


BROWN: It seems really detached from reality, in my view -- my view.

Anyway, Peter, Christian, Ali, many, many thanks. Appreciate it, guys. To be continued.


BROWN: So, what has become of our national leaders with all of these crises going on? President Bush packing for his final overseas trip -- he's going to Peru tomorrow -- while president-elect Obama is tied up with his transition to power. Next, a NO BIAS, NO BULL look at complaints that he's keeping too low a profile these days.

Also, in today's "PDB," the woman who doesn't want a chance to join Obama's Cabinet.

Plus, how do you think Al Gore feels about the next president? He is giving his first interview since the election. You will hear right here.

(COMMERCIAL BREAK) BROWN: Jobless claims, as we told you, hit a 16-year high last week, but one place that is still hiring, Washington, D.C. Check it out. An estimated 40,000 to 75,000 people have applied for jobs in the Obama administration.

But here's a word of warning: Your odds of getting one of those jobs are about one in 25. It's frankly a lot easier to get accepted to Harvard.

Jobs, the markets, the bailouts, the president-elect and his team face some extraordinary challenges.

And here to talk about the latest on the transition to power, three of the smartest people in politics. We have got Steve Hayes, CNN contributor and senior writer for "The Weekly Standard," Gloria Borger, CNN senior political analyst, and Errol Louis, "New York Daily News" columnist, morning show host of WWRL Radio here in New York.

Welcome again, guys.

Gloria, as this financial crisis gets worse, a lot of people believe there is a lack of executive leadership right now. You have got President Bush unable to calm the markets, and Obama stressing there should only be one president at a time.

Do you think Obama needs to be a little more involved right now?


It's very clear that Rahm Emanuel, his chief of staff, is on the Hill, is talking to folks on the Hill, that they would not have postponed any decision on the bailout without -- for the automakers -- without checking in with Obama.

But, honestly, you can't expect a president-elect, who hasn't even been sworn in, to use all of his political capital -- and, by the way, he's going to have a lot -- before he takes office. I think what he wants to do is, he wants to be...

BROWN: Even though, Gloria, in the middle of a crisis like we're having right now?

BORGER: I think what you will see, in coming back in December, when they start hearing from the auto companies, I think you are going to start seeing a big push on the part of the Democrats. And I think Obama clearly, behind the scenes, and his emissaries, like Rahm Emanuel, are going to be a part of that.

But putting himself out there right now, when there is a president, I think is something he can't really do.

BROWN: Errol, smart political move for him to just say hands off essentially until January 20?

ERROL LOUIS, COLUMNIST, "THE NEW YORK DAILY NEWS": I don't think he has a choice, really.

Unfortunately, these next 60 days that he's got or so before he's supposed to take office are critical. It's going to be the holiday retail season. It looks, by all indications, it's going to go disastrously badly. It will be that much harder to get things going.

On the other hand, he only gets one chance to have his first 100 days. And to step on it, he doesn't even have a treasury secretary in place. That would be an even worse mistake, really.

BROWN: Stephen, a lot of risk if he takes a more aggressive approach and starts pushing his ideas now?


Politically, I don't think there's any question. Politically, he wants to stay as far away from this as he can. I think he can show his sympathy, as he has done, for the automakers, for the workers, but I don't think he wants to be getting involved on any sort of a detailed level, and he certainly doesn't want to be making any public pronouncements about what the Bush administration would do at this point.

I think it's smart of him to say we have one president at a time; you know, I have got my four years.

BORGER: But, at a certain point, Campbell, I think he does need to have his economic team announced and in place. And I'm sort of surprised they haven't done it already.

But I bet they will do it before Congress decides what to do with the automakers, because I think, then, at least, he will have an emissary.

BROWN: What do you think the holdup is? Are they still debating over treasury secretary or the other key people?


BROWN: We saw him lined up with his economic advisers. He had about 17 people, I think, surrounding him when he did his press conference.


BROWN: But why do you think they haven't moved more quickly on that?

BORGER: Well, I think one of the reasons is they want to see what the whole picture's going to look like. And Hillary Clinton is a big part of that.

I think there's sort of internal questions being raised about all the top candidates. Would Tim Geithner of the New York Fed be better because he's younger, or would Larry Summers, former secretary, be better? But, then again, he used to work for Hillary Clinton. So, I think they're having these kinds of conversations. And, so, you know, I would expect, though, that we're going to see something on the economic team in early December, if not sooner.

BROWN: Go ahead.


And we would keep in mind, it's not just the treasury secretary. It's also the Council of Economic Advisers.


LOUIS: It's what he's going to do as far as appointments to the Federal Reserve. It's a really very complicated picture he's going to have to put in place, and a labor secretary, critical at this time, when so many people are unemployed.

BROWN: Let me shift gears a little bit, before we run out of time, and go to Steve Hayes on this, and talk about CNN's report -- reporting as of today that Brent Scowcroft, the Republican former national security adviser under the first President Bush, has been advising Obama right now during this transition on foreign policy.

No, Scowcroft, I don't have to tell you, did speak out on the war in Iraq, not a neocon, very much opposed to what this Bush administration, how they handled Iraq, but still a Republican here advising Obama on this. What does that mean to you and to -- and what do you think it will mean to the far left who, you know, rallied around Obama for one reason, he was the anti-war candidate?

STEPHEN HAYES, "THE WEEKLY STANDARD": Yes. They probably -- the far left probably won't like that, to be sure. On the other hand, to me, I find this totally unsurprising, and I think one of the real undercovered stories of this transition from the Bush administration to an Obama administration is just how similar the Bush administration's second-term foreign policy has been to the foreign policy that Barack Obama is proposing.

When you look at things like talking about meeting with Iran, talking about negotiating with North Korea, these are things that Barack Obama was pushing throughout the campaign and which the Bush administration has been doing. Now, they're a matter of degrees and you get into the detail and there are certainly some differences. But you're talking about a Bush administration foreign policy that is a 180 from the first-term policy and is much, much closer to Barack Obama's policy. And I think Brent Scowcroft, of course, being a long time mentor to Condoleezza Rice, the current secretary of state, you know, is somebody who's sort of smoothing that transition. It's an interesting development.

BROWN: And, Gloria, very quickly, there are also reports that Scowcroft has been lobbying Obama to keep Robert gates as defense secretary, who is -- was, of course, Bush administration's defense secretary, although he's a registered independent. So, technically, that wouldn't be a Republican in the cabinet. GLORIA BORGER, CNN SENIOR POLITICAL ANALYST: Well, technically, no, but it would provide for a smooth transition. Also, quite honestly, if Obama intends to close Guantanamo, Bob Gates at the Pentagon is the man who could really help him do that and so is John McCain. So, it wouldn't surprise me at all if they're really reaching out to Gates and asking him to stay for a while.

BROWN: All right, guys, got to end it there. Steve, Gloria and Errol, as always, thanks very much.

And coming up, a charter member of our "NO BIAS, NO BULL" "Rogues Gallery" bids farewell to the Senate.


SEN. TED STEVENS (R), ALASKA: I don't have any rear-view mirror. I look only forward. And I still see the day when I can remove the cloud that currently surrounds me.


BROWN: Ted Stevens. We'll have more on him. In our "Bull's- Eye" tonight, a story that we're all been talking about here. How an elderly woman was threatened with losing her home and who came to her rescue with all the bad news. You will be talking about this one, too.


BROWN: That is the sound of 401(k)s across the country dropping like a rock. Our big story tonight, the Dow Jones industrial lost another 5.5 percent today, hitting a 5 1/2-year low. The S&P 500 plunged to its lowest level in 11 years.

Coming up, keeping your mortgage payments, some homeowners who cannot afford it have decided they won't pay. Maybe a good thing according to some.

Jean Chatzky is going to explain it all to us. But first, Joe Johns has "The Briefing."

JOE JOHNS, CNN SENIOR CORRESPONDENT: Campbell, a federal judge has ordered the release of five Algerian prisoners held at Guantanamo since 2002. It's a major blow to President Bush's strategy of keeping terror suspects locked up without charging them. The judge ruled the administration's evidence tying the prisoners to al-Qaeda was not credible.

Two space shuttle astronauts are trying again to repair a jammed solar panel on the International Space Station. It's the second of four planned spacewalks. The astronauts double-and triple-checked their tools after losing a $100,000 tool back on Tuesday.

A spectacular $1.5 billion hotel opened in Dubai today. It's called Atlantis, the Palm. The star-studded opening ceremonies cost $20 million. The hotel is built on its own island. Some rooms go for $35,000 a night.

And U.S. Airways is trying to figure out how it lost someone's 83-year-old mom.


UNIDENTIFIED MALE: You've ever been to Puerto Rico before?

UNIDENTIFIED FEMALE: No, never been here.

UNIDENTIFIED FEMALE: Will you ever go back?



JOHNS: Elfriede Kuemmel (ph) was flying from New York to Tampa and somehow wound up in Puerto Rico. Her family thinks a flight attendant on a connecting flight in Philadelphia may have wheeled her onto the wrong plane. The airline flew her back to Tampa first class -- Campbell.

BROWN: Yes. They better have flown her first class, Joe. I can't believe that, Joe Johns.

JOHNS: That's a bit much.

BROWN: Yes. Thanks very much, Joe.

JOHNS: You bet.

BROWN: In today's crazy who knows where it will end scheme of things, does it actually make sense not to pay your mortgage? Wait till you hear the arguments for this irresponsible-sounding idea.

And you've heard of nickel and diming people to death. How about scaring the daylights out of a blind widow over one penny? That's right. She underpaid her water bill by one cent and nearly lost her home. That is our "Bull's-Eye" tonight.

Also coming up, Fareed Zakaria's exclusive interview with Al Gore, his first since the election of Barack Obama.


BROWN: You know how people are always saying they're putting in their two cents when they want to give you their opinion? Well, tonight's "Bull's-Eye" goes to former city councilor, Tony Viveiros, of Attleboro, Massachusetts, for putting in his one cent.

Eileen Wilbur is 74 years old. She is a widow. She is blind. And she has owned a home in Attleboro for 50 years. She always paid her water bill on time, but she got a notice from the city saying that there was a lien on that house of hers, threatening to take it away because she owed the water board, are you ready, one red cent. That wouldn't even pay for the stamp. (BEGIN VIDEO CLIP)

EILEEN WILBUR, HOME THREATENED OVER ONE-CENT DEBT: They spent 42 cents to ask for a penny. Does it make sense?

TONY VIVEIROS, FMR. CITY COUNCILOR, ATTLEBORO, MASS.: I went to city hall as soon as it opened, and I wrote out a check for a cent to make a point to them. I think somebody should have said, listen, we'll take care of it. Oh, just -- we'll waive the penalty and waive the lien and we'll put it on your next utility bill, a penny.


BROWN: OK. That was good thinking. So, we should point out people, of course, were lining up to pay that extra penny once they heard about the story. At any rate, the threat to Eileen Wilbur's house is over.

Way to go to Mr. Viveiros and to the Attleboro Water Board, way not to go.

Coming up next, Shakespeare wrote, "Parting is such sweet sorrow," even apparently for a senator with seven felony convictions on his record. That is on our PDB daily briefing. He got a standing ovation. He did.

And later, coming soon to a bookstore near you, how to be just like Michelle Obama.


BROWN: We are always looking for really rich material for our PDB, the "Political Daily Briefing," and somehow Congress always comes through for us. And that said, the chair now recognizes CNN contributor Dana Milbank, national political correspondent for the "Washington Post."

Dana, not exactly the kind of farewell a convicted felon normally gets, but on the Senate floor today, Ted Stevens got a standing ovation.

DANA MILBANK, CNN CONTRIBUTOR: Not only a standing ovation, people were actually weeping in the galleries and on the floor. And I think they were probably --

BROWN: You're exaggerating.

MILBANK: I am not. There were actual tears flowing and I think they were crying over all those billions of dollars in earmarks that Alaska is going to lose right now. But the senator himself did not make any reference to exactly what got him in trouble. He just talked about this cloud.


SEN. TED STEVENS (R), ALASKA: I don't have any rear-view mirror. I look only forward. And I still see the day when I can remove the cloud that currently surrounds me.


MILBANK: And the good news is he's going to have plenty of time now to enjoy that Shiatsu massage lounger and the renovations on his chalet up in Alaska, which are the things, of course, that got him into trouble in the first place.

BROWN: Right. He does have some time on his hands. And, Dana, from the Senate rather to the House, where some big changes were announced today.

MILBANK: Yes, this is true. A major shake-up on the Commerce Committee. John Dingell, 82 years old, the Dean of the House, he's in a wheelchair now because he's had double knee replacement. He was knocked out of that post by a relative young pup named Henry Waxman, who's going to take over that committee now.

The real difference here is Dingell was a real Detroit automotive guy. Waxman, a real environmentalist who happens to represent Beverly Hills. So you got a sense of where the direction's going to change here.

BROWN: But environmentalist, pretty psyched about that.

It is hard to imagine right now somebody turning down a position in Barack Obama's cabinet, but that just happened.

MILBANK: It's true. Penny Pritzker made it clear that she does not want to be the commerce secretary. Now, as the Hyatt heir, she is worth about $2.8 billion, so she's not exactly in an urgent need for work right now. But I think the bigger personnel development today is a woman named Jackie Norris, a high school history teacher from Iowa, is going to be first lady Michelle Obama's chief of staff. I think these raises all kind of potential that because she's going to be controlling a lot of things in the White House, that future state dinners could start to look more like the state fair in Iowa, you know, with the pork chops and the corn dogs and the beef jerky. And I really hope they have those fried Twinkies on a stick.

BROWN: That wouldn't be such a bad thing. I know.

Finally, Dana, inside look, give us one of just how close this Minnesota Senate race actually is.

MILBANK: It is really quite extraordinary. They're poring through the modern-day equivalent of the dimpled chads now. They're looking at these ballots to see if somebody marked two circles instead of one, if they did a check, or maybe if they crossed one out or missed the whole circle entirely. It's a sort of thing that makes you wonder if democracy is necessarily the best form of government, but my favorite was the guy who voted for the Al Franken circled and also had a write-in for what he called the lizard people. Unclear who they're going to award that to.

BROWN: OK. All right. Dana Milbank with us, for us tonight. Good stuff, Dana, thanks.

MILBANK: Thanks, Campbell.

BROWN: Stressing over next month's mortgage payment? Well, some homeowners have decided they just won't pay it. Why? Because they think it might actually help them. We'll ask financial guru Jean Chatzky all about that.

And then, Al Gore's first interview since the election. The former vice president downright giddy right now.


BROWN: "LARRY KING LIVE" begins in just a few moments and he's talking about the economy with a special guest who knows a thing or two about stretching a dollar.

Larry, who have you got?

LARRY KING, HOST, "LARRY KING LIVE": You know, Campbell, any time you see Suze Orman on "LARRY KING LIVE," it was another horrible day for the economy. There's no good news in sight, none. She'll be answering your questions, so get them ready.

We're also going to talk to the daughter of Malcolm X in a "LARRY KING LIVE" exclusive. Al-Qaeda invoked his name to rip Barack Obama. She responds.

We'll see if the president-elect is making the grade with cabinet choices. All next on "LARRY KING LIVE" -- Campbell.

BROWN: All right. Larry, we'll be watching.

We also urge you to watch Fareed Zakaria's exclusive interview with Al Gore. That's this Sunday. And here's an excerpt. We'll let you guess who Gore is talking about.


AL GORE, FORMER VICE-PRESIDENT OF THE UNITED STATES: I can barely contain my excitement about his election. I just think that it's a fabulous new development. This was a watershed election that really just gave every American a feeling of great pride in our nation's ability to transcend our past and redeem the revolutionary promise of our declaration of independence that every human being is created equal. It's electrifying to redeem that declaration.


BROWN: And you can hear more from the former vice president, his first interview, as we said, since the election on "FAREED ZAKARIA: GPS." That's this Sunday at 1:00 Eastern time.

Homeowners across America have found a way to turn the tables on their lenders. They say it makes smart financial sense to skip a few mortgage payments. Up next, does it make sense for you?


BROWN: So this just in. We have some breaking news to tell you about about President-elect Obama. We want to go to Ed Henry right now who is at Obama transition headquarters for us in Chicago. And this involves, Ed, Obama's cell phone records. What can you tell us?

ED HENRY, CNN WHITE HOUSE CORRESPONDENT: That's right, Campbell. CNN has learned, in fact, that President-elect Barack Obama was a victim of a privacy breach by Verizon Wireless, that employees of the company allegedly went through his cell phone records in recent months, a cell phone that Obama used a few months ago but is no longer using right now.

All of this was disclosed in an e-mail to employees of Verizon Wireless, that appears to be from the CEO and president of that company, Lowell McAdam, that we've just obtained in the last half hour. He revealed this to his employees just in the last few moments.

I confirmed, as well with Roberts Gibbs from the Obama transition, that they were notified by Verizon Wireless yesterday that this breach happened. Essentially, it was a simple flip phone, so there was no BlackBerry or e-mail device attached to it. And according to Robert Gibbs, it appears that employees of Verizon Wireless simply went through perhaps the billing records for Barack Obama's cell phone and it's unclear what they did with it.

According to Verizon Wireless, they're now investigating whether or not people inside the company inappropriately accessed this information, then sent it out to people outside the company. That is still under investigation. They've disciplined some employees. They were threatening to terminate some employees.

Robert Gibbs from the Obama transition just told CNN, "We were notified that employees had improperly accessed the records of an old cell phone no longer in use." He said also he believes the Secret Service was notified about this breach, but he does not believe that Secret Service is launching any sort of criminal investigation. He also, Robert Gibbs, stressed, "Nobody was monitoring voice mail or anything like that."

I spoke a little earlier to a Verizon spokeswoman who promised to get me some more comments. She said she was checking on more details. She has not gotten back to me yet, so we hope to add more on that later. But the Obama transition team is confirming they have been notified by Verizon Wireless that some employees of the company did improperly access cell phone records for Barack Obama's cell phone -- Campbell.

BROWN: And, Ed, is this something -- I mean, is it a crime? Is it something that I guess if they wanted to, they could prosecute?

HENRY: Potentially. But I can tell you that the Obama transition is trying to downplay the criminal aspect, instead, saying they think it's just a company breach and they're letting the company decide whether they would turn that over to a prosecutor -- Campbell.

BROWN: Ed Henry for us tonight with those details from Chicago. Ed, thanks very much.

HENRY: Sure.

BROWN: Coming up next, "Welcome to the White House." Oprah already has her inaugural gown picked out apparently, and now she may be planning something very special for Barack Obama's big day.

Erica Hill is going to be here with all the details.


BROWN: It is time for o "Welcome to the White House," our nightly wrap-up of Obama news from far and wide. And tonight, which megastar is stirring up inauguration excitement? And how far will some people go to score tickets to the big event?

Erica Hill is here as always with everything you need to know Obama.

ERICA HILL, CNN CORRESPONDENT: I feel like this segment needed some theme music. Welcome to the White House.

BROWN: I'll work on that.

HILL: OK, good. Let's work after next week, baby.

Just 61 days to go until the inauguration and Obamania, if you can believe it, still building. In fact, we're getting reports hotels as far away as Martinsburg, Virginia, which is a 90-minute drive from D.C., booked solid for Inauguration Day. The Washington Transit Authority says it's going to keep metro trains running from, get this, 4:00 in the morning on January 20th, all the way through the 2:00 a.m. the next day to move an expected 1.6 million people through the city.

Of course, some are saying the estimate may be as high as four million. Resourceful Obama fans are also turning to Craigslist for their accommodations since the hotels are booked and tickets, even a date for the big day. Some may just want to hang out with you on the mall, celebrate, revel in the moment.

At least one Capitol Hill staffer, though, is actually looking for love, reportedly placing an ad offering to take a date to the inaugural ball. But ladies, before you buy the dress, I want to warn you, you got to make sure it's legit.

One of them, of course, has all of Washington in a frenzy. This one though not even confirmed yet. But according to a reliable source blog, event planners who say they are working for none other than Oprah Winfrey have been calling around town looking for a little place to throw a big old party.

We know Obama is -- or Oprah rather, of course, planning to be in town because she said she's already got her dress picked out for the inauguration. We will keep you posted on that one.

BROWN: That's going to be the hot ticket.

HILL: It is. Campbell Brown is going to be there.

The president-elect's home state throwing a bash, as well, also a hot ticket, even though it's likely to be a little less star studded. Those we know are assuming Barack and Michelle Obama will attend the Illinois ball even though the "Chicago Tribune" reports the entertainment will be a little lower key.

Now you were just looking there at Diane Von Furstenberg and some pictures of dresses. That's because everybody wants to know what Michelle Obama will be wearing for the inauguration. We're told that Diane Von Furstenberg has submitted sketches, but at this point she says she doesn't know if her design has been picked. She doesn't even know if the design --

BROWN: They're all competing.

HILL: Can you imagine?

BROWN: No. This is going to be big for somebody.

HILL: It is. Huge. She's a fashion icon at this point.

BROWN: Erica Hill for us tonight. That's it. Sorry about the breaking news putting off our mortgage story. We'll bring you that tomorrow night. That's it for us.

"LARRY KING LIVE" starts right now.