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Campbell Brown

Cyber Bullying Leads to Trial; Defaulting on Mortgage Payments, A Better Option?

Aired November 21, 2008 - 22:00   ET

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

CAMPBELL BROWN, CNN ANCHOR: Hi, everybody. A lot of breaking news tonight. As President-Elect Obama prepares to announce the economic team to lead us out of this financial mess we are in. So let's get right to it.
Bullet point number one. Tim Geithner, not a household name, to be sure. But today he's the man sources tell CNN is on track to become the next treasury secretary. Geithner was the Fed's point man in the Bear Stearns, the AIG deals this year. He was also involved in a controversial decision to let Lehman Brothers fail which could be an issue in his confirmation hearings. That brings us to bullet point number two.

Wall Street's big comeback today. Take a look at this chart of the day. The Dow Industrials took off like a rocket late this afternoon when the Tim Geithner news began to break, a nearly 500-point gain. More than wiping out yesterday's scary 445 point loss.

Isn't just the Dow, just about everything did go up. Overall stocks gained $500 billion in value today. Not bad. But we have been warned to expect a lot of volatility.

Speaking of on track, though, there is bullet point number three. This afternoon Hillary Clinton's office said discussions about her becoming secretary of state are quote "very much on track." Even though an event for young people last night, at this event for young people last night the senator was still being a little bit coy. Let's take a listen.

(BEGIN VIDEO CLIP)

QUESTION: Senator the young people want to know if you're going to be secretary of state.

SEN. HILLARY CLINTON, (D) NY: Somehow, somehow i don't think that's on a lot of young people's minds.

(END VIDEO CLIP)

BROWN: Speaking of young people, check out bullet point number four. Let's be friends. CNN has learned that the Obamas have decided to send their daughters to one of Washington's toniest private schools Sidwell Friends. You may remember Chelsea Clinton also went there.

Before we get to that and the other news of the day, we are cutting through the bull. Much has been made of the car companies' CEOs showing up for congressional hearings in private jets to ask for a tax-funded bailout. There is an argument that can be made about why a CEO might need a private jet. Those of us fly commercial know what miserable experience it is. Flight delays are the norm. If have you a really important meeting, you end up going the night before. One could argue that the CEO of a billion dollar company, who is managing a crisis like the one we are having now, whose decision-making impacts millions of jobs doesn't have time or can't afford the risk of cancellations and delays that go along with commercial travel.

But don't you CEOs get the optics? This was a PR debacle. Your belated statements about needing jets for security reasons just doesn't cut it.

With each passing day it becomes a more legitimate defense as people get angrier and angrier. Frankly, you should have said we are trying to save literally millions of jobs right now and every second counts. Well, today GM did announce that it is giving up two of its corporate jets and looks like GM is finally starting to get that appearances do count and that shared sacrifice is the message of the day. Let's hope the other CEOs take heed. This stuff matters. You are not taking to shareholders or staff members. You are talking to congress. Congress doesn't work for you. It works for millions of Americans who are struggling and getting desperate for a way out. You need to figure out how to speak their language. Your credibility is on the line. And so is your business. You blew it once. Now Congress is giving you a second chance. Even though plenty of people think you don't deserve one.

Millions of jobs and millions of people's futures are on the line. For the moment, park the jet. And put yourself in the shoes of that Michigan factory worker who is scared to death now and rightly so. And don't blow it again.

Now to tonight's big story. We have been waiting to find out who will be president-elect Obama's point man for cleaning up this economic mess. Tonight it looks like New York Fed President Tim Geithner will get the job. We want to go first to White House correspondent Ed Henry.

He is in Chicago and he has been getting all the transition details for us fromOobama's transition headquarters. And Ed, start us off and tell us about it. Who is this guy?

ED HENRY, CNN CORRESPONDENT: Well, good evening, Campbell. Highly respected on Wall Street, Tim Geithner is. That's the broad point that Barack Obama wants to send to the markets. There was a good reaction today. Barack Obama himself, we saw him in public here in Chicago. We haven't seen a lot during this transition. He went to a local deli, Manny's, where you get great corned beef sandwiches, his way I guess to stimulate the economy ever so slight.

But as you know, the real work going on behind closed doors. It is not just about Tim Geithner. Two sources close to the transition also say that New Mexico Governor Bill Richardson is being seriously considered for the commerce secretary job. And he may be rolled out next week along with Tim Geithner and some other top economic officials. The point of rolling it out next week is that they want to send on a message to the markets.

The bottom line is that Barack Obama, his team is starting to realize there is bit of a leadership vacuum now. President Bush, lame duck. Secretary Paulson at Treasury, under fire. Facing a lot of criticism.

But Barack Obama keeps saying there's only one president at a time. He doesn't have the authority and he can't step in right now. There is a leadership vacuum. They need to send a signal to the markets that look, we have a team that's getting into place. It is not going to start just yet. But they can hit the ground running on January 20.

They were elected to deal with the economy and say they have got a plan. They have to get this team in place. They want to send a message to the markets early next week, Campbell.

BROWN: All right, Ed. Let me quickly ask you about the other big transition news. Hillary Clinton, "New York Times" reporting that she has accepted or is accepting Obama's offer to be secretary of state. But tonight her spokesman put out a statement telling us they are still in discussions. What's going on here?

HENRY: Yes. Some of the reporting may be getting out there a little far because squaring with what the Clintons' office said about this is moving forward but it's not quite there yet. That's what the Obama people are saying, too. And the bottom line is that the major hurdles that could have been there because of Bill Clinton's charitable dealings and other things have been lifted according to Obama aides. This is on track in their words. This should happen right after Thanksgiving.

And I think that once this drama moves on to next big drama will be who will be the defense secretary. A lot of speculation. Barack Obama may actually keep on President Bush's defense secretary, Robert Gates. You think there was drama with Hillary Clinton, it will be interesting if he keeps a Republican on. Lot of drama there as well, Campbell.

BROWN: All right. Ed Henry for us tonight from Chicago. Ed, thanks very much.

And we want to go back to the announcement about Geithner and treasury secretary judging from Wall Street's reaction this afternoon. It appears to be love at first sight. We will see about that. The Dow Industrials posted their fifth biggest gain on record just under 500 points. Chief business correspondent Ali Velshi here to tell us what Wall Street knows that we don't.

ALI VELSHI, CNN CORRESPONDENT: Pretty much the name of Tim Geithner not a household name. Virtually nobody knows him. But he is very well known on Wall Street. Young guy. He is 47 years old. He has not worked for Goldman Sachs ever but did work in the Treasury under Bill Clinton. She the president of the New York Federal Reserve. The Federal Reserve has various branches. And the New York Federal Reserve is really the one that has been on point with respect to all of these bank failures and bank discussions. He is very well known to Wall Street. But because he is not from Wall Street, he is thought to have credibility on both sides.

Now, Ed talked about the absence of leadership. Absence of leadership or vacuum of leadership at most times can be questionable but at this point with the wheels coming off the economic bus, the fact we are talking about an auto company failure, 50,000 people laid off at Citigroup and we saw those unemployment numbers, harbinger for the employment rate serious, there was a real sense that the Bush administration sort of walked out on this one so far. Henry Paulson is kind of running things but he said he is not going to spend that extra money in the bailout program until the new administration comes in so we need some presence from the Obama administration.

BROWN: Put a name and face out there as soon as possible. You mentioned he has been involved in a lot of what's going on on the AIG decision, to save AIG and Bear Stearns. Also, the very controversial decision to let Lehman Brothers fail. That could come back to haunt him in confirmation hearings.

VELSHI: I would think that would be the main set of questions in the confirmation hearings. Lehman Brothers Failed and then AIG was bailed out. I don't think most people expected A, Lehman Brothers to not bought in that weekend session he was involved in. I don't think that they expected that that would tip off everything else going on. Some people flaw him for being, you know, responsible, being there when Lehman Brothers failed. And other people don't like the AIG bailout. He is going to have a tough road to walk on this one.

BROWN: Finally, what would -- after confirmation, assuming it goes well, assuming he gets through, what do you think first order of business has to be?

VELSHI: He'll have a few things to deal with. One is that the $350 billion remaining in the bailout package, what happens to that. Number two, the auto industry bailout. That will probably still be in front of him when he starts. And number three, which really is the biggest problem, the jobs issue. What will happen?

And again, we have to watch out to see who President-elect Obama looks into the job of employment and, you know, jobs department and the issue of energy because those are two big issues. So the labor secretary and the energy secretary will be the other two pieces of the pie for the economic puzzle.

Ali Velshi for us, as always, appreciate it.

VELSHI: A pleasure.

BROWN: Well, see you next week.

All right. Tim Geithner, just the tip of the iceberg for us on the Cabinet news front from the Obama transition team. Coming up next, is Hillary Clinton a done deal for the State Department or what? With so many Clinton connections in the Obama Cabinet how can the new president call that change? In a minute we will compare notes with three of the best connected political observers around. And then a little later, a NO BIAS, NO BULL look at where the auto crisis really hits home. These are not the people who zip around in the private jets, bartenders and factory workers wondering what they will be doing come January.

Plus new details on a court case that will floor you. How a young girl's suicide in Missouri set the stage for a trial in Los Angeles and could affect any child who goes online.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

QUESTION: Senator, the young people want to know whether you are going to be secretary of state.

CLINTON: Somehow I don't think that's on a lot of young people's minds.

(END VIDEO CLIP)

BROWN: Hillary Clinton, if you heard there, she was asked by someone that young people were wondering if she's going to be secretary of state. Playing it coy, as you saw, possibly about joining Barack Obama's cabinet. But the president-elect's team says that the nomination is right on track.

Joining me tonight to talk about the emerging Obama Cabinet, three of the best connected political observers the country, CNN contributor Steven Hayes, a senior writer with "The Weekly Standard." Our senior political analyst Jeffrey Toobin. And "New York Daily News" columnist, Errol Louis, also morning host for WWRL Radio in New York.

Errol, let me start with you. "The New York Times" says this is a done deal. Hillary is accepting this. It has been all but put to bed. But then you have Clinton spokesmen saying they are still in discussions. What's going on and why is it playing out so publicly?

ERROL LOUIS, "NEW YORK DAILY NEWS": Well, if you think about it, we all knew that Hillary was going to drop out at one point. As I recall, it was about a week of is it going to be today, tomorrow? Things have to be worked out. This really is part of her style. She and Bill rely on the counsel of many, many people and they think things through and play three-dimensional chess. And it is never all that easy. It's a plus for them. It is kind of a minus for everybody else. On the other hand what's the big hurry? A day or two later, it does not really change it.

CAMPBELL: Steve, the big hurry may be to try to tamp down some of the drama which we know that the Obama camp hates. I mean, Peggy Noonan writes in the "Wall Street Journal" today "to invite the Clintons is to invite in to summon drama that will never end. Ever."

I mean are we seeing that play out now. If she does go to work for Obama, is he going to be able to keep her on message? Will he be the boss? STEPHEN HAYES, "WEEKLY STANDARD": Seriously. This is hilarious. We are now on like day nine of this drama. This is a simple transaction. In theory. Will you accept the job? Yes, I will accept the job. No, I won't accept the job. I mean it should be as simple as that. Maybe I need the take a day or two to think about it. I will get back to you. Instead, what we have seen, Campbell, you point out in the last 24 hours, you have seen, yes, she's going take it. No, she's not that's premature. It is on track. Maybe it is not on track.

This is exactly, I think, the problem with picking Hillary Clinton. As much as I am relieved as a conservative that she is a good choice for people who believe what I believe and in terms of foreign policy, she is better than a lot of other options, this is, I think, a logistical disaster for the Obama administration.

BROWN: Jeff, what -- what are these quote, unquote discussions about? What do you think they are negotiating? What are the sticking points?

JEFF TOOBIN, CNN CORRESPONDENT: They are discussing certainly Bill's finances. To call this a disaster is such a total overstatement. It matters not at all whether she accepts this job on November 21st or December 1st. That's of zero significance. Barack Obama isn't even going to be president for two months yet. This is a total fake non- controversy of no consequence to anyone.

HAYES: I'm sorry. It is not -- it is not a fake non-controversy. It is not as much what is happening today, yes, fine. She could have accepted it a week ago and it doesn't change it. It is what it says about what's likely to come. To deny that is just frankly naive. If you think this is not a preview for what we will likely see as a Hillary Clinton secretary of state in the Obama administration, I think it is naive.

TOOBIN: There are a bunch of conservative journalists who hate the Clintons with such a passion that everything that they do they find offense at some level. And taking a few days to decide ...

BROWN: In fairness, it is not just conservative journalists. Look at that time way the media in general, we are all guilty of this, covers the Clintons. I mean, every little up and down is a story like it or not. That comes with choosing her. Don't you think that ...

TOOBIN: I think it is -- it is much more ...

BROWN: It's a story just by virtue that she is there.

TOOBIN: I think it is a journalistic obsession more than a public obsession. I really don't think there are a lot of people out there that care what day she accepts this nomination. She's either going to be a good secretary of state or not.

LOUIS: It is curious. I mean, even something simple like opening an office in New York for Bill Clinton, remember that? It couldn't be this place or that place. He goes to Harlem. You know, drama is the right word. I think that you are right. Drama may not mean that much. But you are always going to get the drama. TOOBIN: You are. We love drama.

BROWN: Right. Quickly, we are almost out of time. I just want to get your take. Jeff, very quickly. You jump in on the announcement of Tim Geithner and this economic team. We will see them and have faces, names come Monday. How important was it for Obama to roll this out now given the uncertainty everyone is feeling at the moment?

TOOBIN: The striking thing was that the stock market went up 500 points as soon as the name came out. I think that just shows how much of hunger there is for leadership on this issue. Now he has to come up with a plan, of course, with President Obama to do something but obviously there's this huge vacuum now and people want some answers and perhaps he will have some.

BROWN: Unfortunately guys we have to end it there. Because Hillary Clinton took up all the time.

You knew that was going to happen. Steve, Errol, Jeff, thanks very much. Appreciate it, guys.

The government is ready to give a break to homeowners who are three months behind on their mortgages. Is that an incentive to skip those payments to take advantage of this plan? Some people are thinking about it.

And then later, the Obamas pick a school for their two girls. Which school is it? And the Obamas' explanation of why they made that choice. Coming up.

(COMMERCIAL BREAK)

BROWN: Tonight General Motors announced it will meet Congress' deadline and deliver a real plan for spending its bailout money to revive the slumping auto industry. But even if the cash comes through and that's by no means certain, it would come too late for the people of Moraine, Ohio. A gm plant there and the supplies part are both closing by Christmas. Tonight Gary Tuchman went to a restaurant there. It's been local watering hole for decades, where everybody is wondering what they are going to do.

Gary?

GARY TUCHMAN, CNN CORRESPONDENT: Campbell, this is the huge general motors truck plant, tiny town of Moraine, Ohio. GM is closing the doors and will have a huge effect on this town and on the businesses. This is the Treasure Island Supper Club. It has been here 47 years. It is an institution in this small town. Friday night has always been the busiest night here at Treasure Island.

This bar area according to the employees who worked here used to be jam packed. You would have to stand at this hour to get close to the bar. Lots of empty seats. The reason the business is already suffering, the GM plant used to have 4,000 workers. Over the years because of economic problems it dwindled down to a thousand. You can see tables here empty. They used to be full at dinner time. A thousand employees now. As of December 23, down to zero employees. No more GM workers whatsoever. People are very scared and concerned.

Kathy Miller (ph), I want to ask you a question. Kathy Miller has been here for how many years?

UNIDENTIFIED FEMALE: Twenty eight years.

TUCHMAN: You know what it is all about. What has happened to this establishment. How crowded would this restaurant have been on a Friday night five years ago?

UNIDENTIFIED FEMALE: It would have been people standing here waiting to get seats.

TUCHMAN: How concerned are you for the future of the restaurant which is an institution here in Moraine?

UNIDENTIFIED FEMALE: Extremely concerned.

TUCHMAN: Will you be able to stay open with the plant closing down? I mean, 7,000 people live in the town. There used to be 4,000 workers just in the plant.

UNIDENTIFIED FEMALE: I certainly hope so. You know, this is where we all make our living. I hope it stays open. I don't know. It is scary.

TUCHMAN: Now many of the customers here either work for gm or are retired from GM. Joe and Carol (ph), our GM family. Joe is retired from GM. How was dinner, by the way?

UNIDENTIFIED MALE: Dinner was fabulous. It's a great place to eat.

TUCHMAN: It's a good question, but the second question I want to ask you, what happen after this plant closes?

UNIDENTIFIED MALE: I think that it is over with, to be honest with you.

TUCHMAN: Is the town in trouble?

UNIDENTIFIED MALE: I would say yes. They are going to have to get some business in here to revitalize the area.

TUHCMAN: Thanks for talking with us. Have a nice dinner. Sorry to interrupt you. One thing to keep in mind, the Big Three go out of business, there could be many towns across America going through what Moraine is going through right now. Campbell?

BROWN: Right about that. Gary Tuchman for us tonight. Gary, thanks.

And as he said what we just saw in Ohio may be repeated all over the Midwest. If these car companies do go bankrupt. No place will be harder hit than Michigan which already is in bad shape. A little earlier I spoke with the state's governor, Democrat Jennifer Granholm.

(BEGIN VIDEOTAPE) BROWN: Governor Granholm, welcome to you.

GOV. JENNIFER GRANHOLM, (D) MI: Thank you.

BROWN: Your state I don't have to tell you is ground zero for the auto industry and you have already been hard hit.

If one or more of the big tree automakers goes bankrupt, it is going to be devastating for your state. How are people feeling there now?

GRANHOLM: People are very, very anxious. We just got our study, our economist telling us that next year, even with the Big Three all intact we will lose another 100,000 jobs because of the crisis in consumer confidence and overall financial meltdown.

So there's no doubt people are feeling it. They are not just feeling it in Michigan. Obviously they are feeling it across the country. And if one of those automakers or all of them go down if we are somehow allowing them to fail, it is going to mean millions, as you know, of jobs across this country and communities from coast to coast.

BROWN: You know the CEOs of these car companies, Ford, Chrysler, GM. They go to Capitol Hill to beg for a bailout. And they show up in private jets. They open themselves up to ridicule and to criticism. Are you disappointed at their performance in Washington? What should they be doing to make their case for help?

GRANHOLM: Well, Congress has said they want a plan. And I think that this is a second chance and another opportunity for them to come forward and say what the auto industry is going to mean to America. How the auto industry is going to make us independent of foreign oil. How they are going to electrify, make the car based -- make it run on electricity. That's so important inform the future of the nation so we are not reliant on foreign oil and we are not reliant on batteries that come from other countries.

CAMPBELL: What do you say though those people that say domestic car makers, I mean, look at their record. They are unprofitable and aren't innovative. They need to be allowed to go bankrupt if they are going to be able to compete or if they can't compete.

GRANHOLM: The point is they have to come with a plan to show us how in three years, in two years, in five years, they are going to lead this nation in becoming energy independent.

This industry is critical to the future of the nation. It is a critical national need.

BROWN: A lot of those manufacturing jobs aren't coming back. They are never coming back. What do you do as governor to try to develop these good paying jobs in your state if manufacture sing no longer in the economic base it once was?

GRANHOLM: That's the whole thing, Campbell. I don't concede manufacturing is permanently gone. If we say as a nation we are not going to manufacture anything, then we will have given away our strength as a nation. This is why for us as a nation, as a national need, it is critical to have a vibrant auto industry. They have a chance to come back to Congress December 2nd and say exactly what that plan is to lead our nation in energy independence.

BROWN: But finally, given some of the credibility issues that automakers have right now, the CEOs of the companies have, are you confident, are you feeling optimistic they are going to be able to come back to Congress with a plan, with a viable plan that will actually work?

GRANHOLM: Well, knowing what they have in the works, I am confident. I know they weren't able to express and did not express it this past week. But I know they will come back and have a plan to lead rather than follow. What they need to do is demonstrate they have a viable plan to have a viable industry and that industry is going to lead the nation in becoming independent of foreign oil.

BROWN: Governor Jennifer Granholm with us tonight. Governor, appreciate your time. Thanks.

GRANHOLM: Thank you, Campbell.

BROWN: Whether it is car czars or bank barons, there's not lot of love for gazillionaire executives these days. Tom Foreman brings us back to the NO BULL test. Find out how much the CEOs are making compared to what you are making.

Also tonight, PDB, "The Political Daily Briefing." He was one of the nation's most powerful governors. Tonight the call girl at the center of the scandal that forced him out finally tells her story.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

NIKLAS SCHNAKE, MARRIOTSVILLE, MARYLAND: Dear President-Elect Obama. I am Niklas Schnake from Marriotsville, Maryland. I go to West Friendship Elementary school. I am in fifth grade and I'm 10. Are you really going to produce 60 billion gallons of biofuel a year? I think that's a great idea. It would help my family because we could drive in a car without polluting. I then would want to stop the financial crisis. Will you bail out GM, Chrysler and Ford? My family would cutback on Christmas gifts.

But if you didn't, then over 800,000 people would lose jobs. It would mean a lot if you respond to the answers to each question. Sincerely, Niklas Schnake.

(END VIDEO CLIP)

CAMPBELL BROWN, CNN ANCHOR: Tonight's "Dear Mr. President" letter as you heard there comes from 10-year-old Niklas Schnake of Maryland. A lot of grownups would like to hear the answers themselves.

Send us your letters to the next president. Look for the iReport link on our Web site CNN.com/Campbellbrown. Now, if you really want to get average Americans mad, just say these two little words -- CEO pay. Well, now, big business says its top executives are worth every one of the millions upon millions they get paid. But is that really true? Tom Foreman tonight puts it all to our "No Bull Test."

(BEGIN VIDEOTAPE)

TOM FOREMAN, CNN CORRESPONDENT (voice-over): At the big three automakers, the workers roll out cars and the CEOs roll in money.

Ford's Alan Mulally has a total pay package of about $22 million, according to Securities and Exchange Commission reports. It's unclear what Robert Nardelli makes at Chrysler which is privately held. But when he bailed out of Home Depot, he had a $200 million parachute. So his deal now is believed to be gold plated, too.

And General Motors' big boss, Richard Wagoner, has a package worth about $15 million a year. That's $41,000 a day, $1,700 an hour. All three men say they've taken voluntary cuts in recent years, but their pay is a sticking point in the whole bailout saga.

REP. BARNEY FRANK (D), FINANCIAL SERVICES CHAIRMAN: I do not think any of the three CEOs before us will show up on the unemployment line no matter what happens.

FOREMAN: Pay packages for CEOs and industries across the board had skyrocketed so high that surveys have found the average CEO in America's larger companies now gets around $10 million a year. That's 250 times as much as the average worker.

Companies defend the pay by saying that's what it takes to get the best talent. But Forbes list of the top five 500 best paid CEOs shows several with companies in the middle of the current financial chaos.

NEIL WEINBERG, "FORBES" MAGAZINE: I don't have any problem with people making a lot of money. The problem is this is not pay for performance. This is pay for showing up. And the fact of the matter is that many of these guys will receive a multimillion dollar bonus just for taking the job.

(END VIDEOTAPE)

FOREMAN: So many lawmakers say they want to see dramatic cuts in those big pay packages from any company that shows up wanting a bailout from taxpayers. But then, they tried this before and so far, the CEO gravy train is still rolling -- Campbell.

BROWN: Tom Foreman for us tonight. Tom, thanks.

And now, I guess it's no surprise that "People" magazine chose this guy as one of its sexiest men alive. After all, he is handing out $700 billion right now. But we've got somebody else in mind and we're going to tell you who tops our list in the PDB, coming up next.

And then later, more on the Obama girls. Where they are going to spend their Washington school days.

(COMMERCIAL BREAK)

BROWN: Time now for our PDB, the "Political Daily Briefing." The sampler of troubles and nut clusters from the political world is assembled by hand especially for us by CNN contributor and "Washington Post" national political correspondent, Dana Milbank.

Dana, quite a big endorsement today for the Democrat in Georgia still running for the U.S. Senate. Tell us.

DANA MILBANK, CNN CONTRIBUTOR: True enough. I mean, the way Barack Obama has been out of sight lately, you'd think he's in the witness protection program. But he is going to do some campaigning for Jim Martin down in Georgia, who's in a Senate runoff against Republican Senator Saxby Chambliss. Bill Clinton has already been down there. John McCain, Mitt Romney was there today.

But Obama's going to be kind of careful. He's only going to do a radio ad for Martin. I think this may have something to do with the fact that actually Obama lost the state of Georgia to John McCain.

BROWN: Dana, OK. So for anyone thinking of getting into politics, we have more proof today that being a politician isn't quite as lucrative as playing one on TV.

MILBANK: This is true. Now you recall Fred Thompson is not perhaps the most energetic man in all of politics. There was the old "Saturday Night Live" skit when he was running for president, said that his interest in running for president on a scale of one to 10 was about a six.

Well, the latest rumors whether he was going to come and run the Republican National Committee decided against that. He'll go back to Hollywood, do some more TV acting there. The money is a bit better, and I think the other side benefit is he'll get to sleep late in the morning.

BROWN: Excellent point. OK, so now it has been eight months since New York Governor Eliot Spitzer resigned from office. Today, for the very first time, we are hearing from the young woman who is at the center of the prostitution scandal that drove him out.

MILBANK: That's true. We are. Ashley Dupre is not, shall we say, a student of state politics. In fact, in an interview with "Good Morning America," she said she didn't know exactly what kind of work her famous client did when he actually had his clothes on.

(BEGIN VIDEO CLIP)

ASHLEY DUPRE, PROSTITUTE: He looks familiar, but I was 22 years old. I didn't -- I wasn't reading the papers. I was so involved in my life and I was so selfish and -- and caught up in my life. And I didn't know who he was.

(END VIDEO CLIP) MILBANK: Well, she said she didn't know because she hadn't been reading the newspapers. So this is a public service message to all those prostitutes out there listening tonight, you want to avoid embarrassment in the future, read your newspaper.

BROWN: You're so tawdry tonight. And then that blame (ph), let me ask you --

MILBANK: What do you mean, tonight?

BROWN: Let me ask you -- you're right, in general.

Question number four, "People"'s sexiest or "People" magazine's new sexiest man alive list just came out and we have to talk about one of the men on the list.

MILBANK: We do indeed. It has a lot of the sort of usual suspects, Hugh Jackman and George Clooney and Johnny Depp. But there is one fellow we weren't exactly expecting to see and that's Neel Kashkari. He's the Treasury Department official in charge of the $700 billion financial rescue package. And he -- this is a great moment for bald guys everywhere, financial whiz kids. And I think --

BROWN: OK, OK. So let me stop you. Let me stop you right there, because it is a great moment for bald guys and financial whiz kids. So we have a -- we think we have a better choice than Neel Kashkari. Let me just put up the photo.

Come on. Come on. I mean, what do you think, Dana?

MILBANK: I think it's true. You know power is the ultimate aphrodisiac.

(LAUGHTER)

And I think there you see two men of great power and influence.

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: And only $700 billion separating us.

BROWN: Oh, really. OK. You'll get there. You'll get there. You'll get there.

VELSHI: I could show up at the bar and, you know, just start banter about what I would do with $700 billion. Try and trick people.

BROWN: Yes, go for it.

Dana Milbank for us tonight. And CNN's own sexiest man alive, Ali Velshi as well, coming back for a little comeback moment.

Thank you, Ali. Thanks, guys.

VELSHI: Thanks.

BROWN: So why would some responsible law-abiding people skip their mortgage payments for a few months? We're going to ask money expert Jean Chatzky about a strange wrinkle in the government's plan to help homeowners in trouble. Is it a good idea for you? Stay tuned.

And next, a trial that's unlike any other. The cyber bullying case that drove this young girl to suicide. A sobering story for parents everywhere.

(COMMERCIAL BREAK)

BROWN: There's a trial that's under way right now in Los Angeles that is unlike any other frankly, in history. It centers on the death of a young girl, 13-year-old Megan Meier. But the charge is not homicide. The charge is fraud. Fraud and computer abuse.

Prosecutors argue that Megan was driven to kill herself after being tormented on the social networking site MySpace by a boy named Josh Evans. Only as Joe Johns reports, there is no Josh Evans and never was.

(BEGIN VIDEOTAPE)

JOE JOHNS, CNN SENIOR CORRESPONDENT (voice-over): This is Lori Drew, the woman whose trial began yesterday in Los Angeles. Prosecutors say Drew conspired with another woman to invent the character of a teenage boy, so they could discover whether Megan Meier was spreading unkind rumors about Drew's 13-year-old daughter.

For a month, their fictitious boy, Josh Evan, charmed Megan Meier. His instant messages saying things like lucky me and lucky you because you're my number one. And then suddenly, he turned on her.

TINA MEIER, MEGAN'S MOTHER: It was a whirlwind. It was Josh saying horrible things to Megan. Megan saying things back to him.

JOHNS: Nasty messages, says Christina Meier, from a boy who just days before meant everything to her lonely daughter. According to Megan Meier's father, one message cut particularly deep.

RON MEIER, MEGAN'S FATHER: It would be a better off place without you and have a [bleep] the rest of your life.

JOHNS: Megan was distraught beyond words.

T. MEIER: You're supposed to be my mom. You're supposed to be on my side. And she took off running upstairs.

R. MEIER: Tina left, walked upstairs. I didn't really pay much attention to it. And then I just heard a blood-curdling scream.

T. MEIER: I just saw her hanging from her closet.

R. MEIER: When she just screamed, I was right there. I -- I held her and I -- I yanked the whole closet thing out of the wall. And Tina ran and got a knife so I could cut the belt from around her neck and then started performing CPR.

T. MEIER: She had tears the entire time running down the side of her face, the entire -- until she passed away.

R. MEIER: It's like please -- please, Megan, breathe.

JOHNS: Now, Lori Drew stands charged with conspiracy and three counts of accessing a computer without authorization to obtain information for the purpose of inflicting emotional distress. She's not on trial for playing an active part in Megan Meier's death, though the jury can take the girl's suicide into consideration when it considers the case.

Joe Johns, CNN, Washington.

(END VIDEOTAPE)

BROWN: And just before she took her own life, Megan Meier reportedly sent a message to Josh, "Josh," saying that, "You are the kind of boy a girl would kill herself over."

In the latest twist of this pretty shocking story, the judge is now considering a defense motion to dismiss the case against Lori Drew. Her lawyers claim she cannot be held responsible for violating the MySpace service rules because she never read them.

Here now to try to make sense of the whole thing is Attorney Lisa Bloom, anchor of "In Session" on truTV.

And, Lisa, let me just sort of go big picture here because -- and this seems like one small case. But we're talking about something that could really set major precedent. This is about how we're going to police the Internet, isn't it?

LISA BLOOM, ANCHOR, "IN SESSION": Well, that's right. I mean, when we all sign up for Facebook, MySpace, any major site, there's that big "terms of use" page most of us just click agree and move on. Really what Lori Drew is being prosecuted for now is violating the "terms of use" which say you can't harass someone, you can't commit fraud on the site.

This could have much more far reaching implications. I mean, let's say teenagers sign up as many of them do with fake names and post fake pictures of themselves, are they all going to be prosecuted now? Probably not.

BROWN: So it's probably fraud, theoretically.

BLOOM: Technically that would be fraud. It would be violation of "terms of use." Probably they wouldn't be prosecuted because prosecutors exercise discretion. No one is really harmed. In this case, there's a very real harm. That's why they're going after Lori Drew.

BROWN: And I read that the law they're actually using to try to prosecute her is the Computer Fraud and Abuse Act that normally they use to prosecute Internet hackers.

BLOOM: Right. BROWN: It's an anti-hacking law. That's really what she did, though, in creating this Josh figure was essentially hacking on to MySpace. That's the way the law sees it, creating a completely phony identity and doing it in a way to inflict harm on another person. In this case, a 13-year-old girl.

BROWN: So, as we pointed out before, her lawyers asked the judge to dismiss the case saying that, you know, listen, she didn't know the rules.

BLOOM: Right.

BROWN: I guess she didn't read the page.

BLOOM: Right.

BROWN: How can she ultimately be held accountable? How tough is it ultimately do you think to prosecute and what -- what kind of sentence are we talking about if she actually were to be convicted? Given what the prosecution is -- prosecuting her for, which is, I guess hacking.

BLOOM: Well, sentence is up to 20 years, but nobody really expects her to get that much if she's convicted. I assume she has no criminal record, so she's probably looking at only a few years if she's convicted of some of these charges. But the real question is what's going on here? Why isn't she prosecuted for homicide? Why isn't she prosecuted...

BROWN: But why isn't she?

BLOOM: ... for harassment or stalking? Well, back in her home state of Missouri, prosecutors looked at that in 2007. They said, "We don't have enough evidence."

Campbell, I have gone over the evidence to do step this trial the last couple of days. I think a lot of new information has come out that the prosecutors were not aware of in 2007 in Missouri.

If they take a close look, for example, the testimony of Lori Drew's assistant who says that Lori Drew knew what she was doing. She was intending to harm this child. She was almost enjoying afterwards the fact that this poor child committed suicide, had a very flippant attitude about the whole thing. If prosecutors go back and look at the testimony now, they may very well bring state charges.

BROWN: So this may not be over any time soon.

BLOOM: That's right.

BROWN: Lisa Bloom for us tonight as always. Lisa, thanks.

BLOOM: Thanks.

BROWN: Coming up, with the housing market turned upside down, does it make more sense for you to stop paying your mortgage? It sounds kind of crazy but some money gurus say it may be the way to go. Financial expert Jean Chatzky weighs in when we come back.

(COMMERCIAL BREAK)

BROWN: This just in to CNN. An Arizona judge has just dismissed one of the two first-degree murder charges against an 8-year-old boy.

This is the case that made national headlines not only because of the boy's age, but because there is this videotape, you're seeing it there, of him telling authorities he shot his father and another man. Now, prosecution and defense attorneys are not saying why the charge was dropped. We're going to stay on top of this for you and we'll bring you any updates as we have them.

"LARRY KING LIVE" is coming up in just a few minutes. Two big stories tonight, the economy and the White House transition. John King in for Larry -- John.

JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: Campbell, how are you tonight?

We're going to talk the pros and cons of Hillary Clinton at the State Department and the other names. The new names we are hearing from our reporters about the new emerging Barack Obama cabinet. We'll go through the names, the pros and cons of them, and as you mentioned, the economy as well.

How do Americans as they get ready for thanksgiving, Hanukkah and Christmas, stay in the holiday spirit when the economy looks so bleak? We'll go through that with some economic experts and also some motivational experts to try to get Americans in the holiday spirit despite what they see in the markets, Campbell. All that in a few minutes.

BROWN: All right. Thanks, John.

Are you stressing over next month's mortgage payment? Well, some homeowners are seeing the economic bailout plan, doing the math and thinking that it pays not to pay. I'll ask financial guru Jean Chatzky if they are right when we come back.

(COMMERCIAL BREAK)

BROWN: Millions of Americans are struggling to make monthly mortgage payments, but somehow they manage. And then there are other homeowners who are falling 90 days behind and that actually qualifies them to get their mortgages modified and their payments slashed. So, could it be a smart move for you to intentionally fall behind in your mortgage payments?

Well, earlier I spoke to personal finance expert Jean Chatzky about this. She's, of course, the author of the best seller "Make Money Not Excuses." She also writes a column for "The New York Daily News." And we asked her if trying do the right thing is sometimes the wrong approach.

(BEGIN VIDEOTAPE) BROWN: So, Jean, isn't this creating an incentive for some people to purposely miss payments?

JEAN CHATZKY, AUTHOR, "MAKE MONEY NOT EXCUSES": I have to tell you I've been hearing the words "moral hazard" quite frequently over the past couple of days, and that's because the answer is yes. If you are on the fence, if you could, if you really pushed it pay your mortgage, but not for that much longer, you have a real incentive to not pay for the 60 or 90 days it's going to take to get you into this program.

And let me just point out also, a lot of the programs are very different. So some of them forced delinquencies. Some of them are 60, some of them are 90 days. You really have to deal with your own servicer.

BROWN: But if you're somebody who, as you say, is struggling with your payments and you hear about this, I mean, it seems like there's nothing really stopping you from taking advantage of it.

CHATZKY: No, there absolutely isn't. You want to think about, though, whether once you go through streamlined re-fi, once your loan is modified, will that actually make the difference for you?

BROWN: And how damaging if you do something like this, could it be for your credit score?

CHATZKY: Well, I assume that for most of the people who are entering this process, their credit score is already shot. And that's why I don't think the decision is particularly hard. If you are choosing between trying to keep your home, possibly keeping your home and keeping your credit, you keep the home 100 percent of the time.

BROWN: And, Jean, finally, bottom line this for us. What's the number one thing people can do right now to make sure they're going to be able to weather this financial storm?

CHATZKY: You really have to be sure you're living on less than you make. Going into additional debt or signing up for a payment that you still can't afford may solve the process -- problem for you in the very, very short term but long term it's going do you absolutely no good.

BROWN: Jean Chatzky for us tonight. Jean, appreciate it.

CHATZKY: Sure.

(END VIDEOTAPE)

BROWN: With two months to go before the inauguration, President-elect Obama has a lot of tough choices to make. But today, he made a big one, an important personal choice. He and his wife chose a new school for the first daughters. And you've heard of it before. We'll have the details next.

And a teacher from Georgia hits our "Bull's-Eye" tonight after hitting the jackpot. (COMMERCIAL BREAK)

BROWN: Wondering about the Obama girls' new school in Washington? Want an advanced peek of what could be Michelle Obama's inaugural gown? Well, all will be revealed in "Welcome to the White House," our nightly wrap-up of all things Obama.

Our own Tom Foreman is back with the 411 (ph) tonight. Tom, what have you got?

FOREMAN: Campbell, exciting times on the Obama watch. For one thing, the Obamas have chosen a school for their daughters, Sasha and Malia. Like the song says, I can tell we're going to be friends.

They will go to Sidwell Friends, a private Quaker school that Chelsea Clinton attended. Michelle Obama visited Sidwell with Sasha and Malia on Tuesday. A spokeswoman says, "The Obamas selected that school that was the best fit for their daughters' need right now."

Meanwhile, it's been ten days since we've had more than a fleeting glimpse of the president-elect. But today, Obama finally emerged from his code of silence to visit Manny's Cafeteria and Deli in Chicago. They made lunch and he made some news telling one woman that he and his family plan to hold on to their Chicago home. Always a good idea on these days when re-election is not assured.

The president-elect is using his influence to try to win a plum for his hometown as well. The 2016 Summer Olympics. He made a taped pitch to the International Olympic Committee meeting in Istanbul. Listen.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENT-ELECT: I deeply believe in the Olympic mission and have long supported hosting the Olympic and Paralympic games in my home city of Chicago. Over the past two years, I've spoken often about my belief that while we may come from different places and backgrounds, there are certain --

(END VIDEO CLIP)

FOREMAN: There you go. Back in Washington, everyone is counting the days until the inauguration. For the record, there are 60 to go. Already the city is running out of space for all those inaugural balls that are in the works. But of course, there's plenty of room for the rumor mill to keep turning and every fashionable Washingtonian is in the mix right now asking what will the first lady wear. Our friends at "Inside Edition" have some ideas, sketches from the designers Luca Luca, Kevin Hall and Banana Republic -- Campbell.

BROWN: All right. Thanks, Tom. Tom Foreman for us tonight.

Well, Washington not the only place with the raging case of inauguration fever. At Ivy Preparatory Academy outside of Atlanta, sixth grade girls were dreaming of going to the swearing in for Obama. Well, now, their principal, Nina Gilbert, is making that dream come true. She won an education award worth $10,000. She's using it to take the girls to Washington. Nina Gilbert, our "Bull's-Eye." Well done, Miss Gilbert.

Have a great weekend, everybody.

"LARRY KING LIVE" starts right now.