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CNN Larry King Live

Obama Cabinet: Too Many Insiders?; New Vegas Venture

Aired November 25, 2008 - 21:00   ET

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

LARRY KING, HOST: Tonight, his swearing in is nearly two months away, but is Barack Obama already calling the shots?
A lot of people want him to, at least.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D), PRESIDENT-ELECT: We are going to hit the ground running.

(END VIDEO CLIP)

KING: Plus, who gave him the OK to do that now?

(BEGIN VIDEO CLIP)

OBAMA: Budget reform is not an option, it's a necessity.

(END VIDEO CLIP)

KING: Is he moving too fast?

Are his plans too ambitious?

Plus, the man who told him not to run. Vernon Jordan is here.

What was he thinking?

And Magic Johnson, Steve Wynn, and Google's CEO, Eric Schmidt -- between them, they're worth billions and we're not.

What do they know that can help us?

Next on LARRY KING LIVE.

We begin with breaking news tonight.

Sources have told CNN that current Defense secretary, Robert Gates, will remain in that position in the Barack administration -- the Obama administration, rather. He'll stay at the Pentagon for at least a year. Apparently, this is all but a done deal and Obama is reportedly interested in continuity, inheriting two wars. We'll see what our panel thinks.

And the panel is, in New Orleans, James Carville, CNN political contributor and Democratic strategist. He was senior adviser to President Bill Clinton. In Washington is Nancy Pfotenhauer, who was senior policy adviser and national spokesperson for the McCain campaign.

In New York is Congressman Charles Rangel, Democrat of New York and chairman of House Ways and Means.

And in Washington,

Bay Buchanan, CNN contributor and Republican strategist, president of The American Cause.

All right, James, if it's all true, what do you make of Gates remaining?

JAMES CARVILLE, CNN CONTRIBUTOR: Well, I think he's inheriting an economic slump or a recession -- a deep recession, a credit crisis and three wars. And I think that Secretary Gates, by every indication, is a very, very competent guy. And he wants some continuity there. He's a lot of things to focus his attention on. And I think it makes a lot of sense. I really do. And just like everything else he's done so far, man, I really applaud him.

KING: Nancy, how do you react?

NANCY PFOTENHAUER, FORMER SPOKESPERSON, MCCAIN CAMPAIGN: I think it's a very smart thing for him to do. And it will make history here. And James and I will agree. I mean, when you've got a country that is fighting two wars, it's borderline malpractice not to continue to keep this individual in place when he is competent.

I think it's a very important signaling to Republicans on the Hill, who have been wondering whether Obama is going to walk his talk. And so this was the thing that when I was talking to the Senate Republican leadership over the weekend and yesterday, they were waiting to see what would happen with Gates.

So this is a significant move.

KING: And Chairman Rangel, what say you?

REP. CHARLES RANGEL (D), NEW YORK: Well, no matter how much displeasure you get out of us being involved in these wars, you have to give confidence and support to our troops that are there and the continuity and knowing that we haven't forgotten them. You can't just break it off. So we got confidence, continuity. And I still his mission to get out of there as soon as possible will be accomplished.

So I think it's a great choice.

KING: And Bay Buchanan, do you make it unanimous?

BAY BUCHANAN, CNN CONTRIBUTOR: I do, indeed. You know, I agree with everything that's been said. And, in addition, it's a terrifically strong message to the enemy that, you know, America is on sound footing, this transition is going to be smooth, Obama does not have any learning curve, he's got Gates over there that knows exactly what's happened to date and he has the president's ear.

So I think across the board, the president will be focused on the economy. He put Gates over there to keep running things -- continuity critical to this country.

KING: James, now on the domestic side, what do you make of the economic team?

CARVILLE: Well, first of all, I think I want my October back when I was actually sitting there arguing with Bay and Nancy...

(LAUGHTER)

CARVILLE: But, oh, well.

What do I think it's -- what do you say?

Everything about it is terrific. I thought this Peter Orszag appointment today was an absolutely terrific appointment. This guy is brilliant. And he's going to -- he's going to find money in that budget that's wasted that we can only dream of.

And I mean, from Larry Summers, you know, to Tim Geithner, to the whole crowd -- you know, it's very hard to find -- some appointments made to find fault with. Rahm Emanuel as chief of staff, he came out of the shoot very strong.

It really is reassuring to see that they're bringing in not just competent people, but the best people in the country, to do this job. And, man, I hope they can do it.

KING: Nancy, what's your outlook?

PFOTENHAUER: Well, you know, clearly, the folks he's named for his economic team are qualified. You can't -- I don't think you can question their qualifications.

I think you could question how much they represent change. Although it's an interesting point. What he's done is he -- I think Obama has very wisely acknowledged what he doesn't know. And that's a very important thing. The toughest person to deal with is someone who doesn't recognize their own lack of strength, if you will, in a certain crucial area.

And so what he's done is he's staffed up. He's brought in people who have unquestionable abilities.

They're a little more middle of the road than most of his supporters. So I wouldn't be surprised if some of the -- the liberal crowd were a little bit unhappy with the folks that he's chosen. They're not change, though. There's nothing new here. And so that's the question. And that's the challenge that Senator Obama, now President-Elect Obama, will have to meet.

KING: Charles, too many Clintonistas? RANGEL: You know, I -- I really don't really see how, with the country facing this financial crisis that we're facing, that we can think in terms of liberals or conservatives. I was frightened to death.

What happens when Paulson leaves?

He's the only one in the administration that the Congress had some confidence in. And it's abundantly clear that he's not certain what direction he's going. And so to have people who understood where he wanted to go, to have the continuity, the understanding, but experienced economists and, at the same time, to have some fresh, new thoughts on it -- but the most exciting thing is that they won't be just talking about getting confidence in our fiscal institutions. They will be talking about real people who are feeling real pain, who have lost their jobs.

I don't see how he could do any better without being a threat to the existing president. It's just working out perfectly for the American people.

KING: Bay, are we practically unanimous again?

(LAUGHTER)

BUCHANAN: I have -- you know, he won the election and he has a right to pick whomever he chooses. And I do believe these are some strong, knowledgeable individuals on the economic team. No question, extremely qualified.

How much new ideas I question.

But I'll tell you where I think Obama made a mistake. And that is when he started talking that -- told Congress look it, we're going to have a spending plan, this new plan of ours, in order to get the economy going, anywhere -- it could be $700 billion.

You know, to send that kind of message to the Congress -- the Democrats up there, who just love to spend, it's like sending a dozen -- a couple dozen cases of booze to a frat house and telling them to be responsible.

Those guys are just thinking Christmas is going to be all year long. They're making plans to spend, spend, spend. I guarantee you there's going to be waste coming in there. There's going to be cronyism. There's going to be corruption, earmarks. You name it, it's going to be in that 700,000. It's not going to be responsible spending.

KING: Let me get a break. When we come back, we'll begin with...

RANGEL: Seven hundred million.

KING: Hold it. We'll begin with a clip from the news conference today about Obama vowing to cut waste.

We'll be right back.

(COMMERCIAL BREAK)

KING: All right, gang. In today's news conference, Obama vowed to cut waste in the federal budget to help offset the costs of that massive stimulus package he wants.

Take a look.

(BEGIN VIDEO CLIP)

OBAMA: We can't sustain a system that bleeds billions of taxpayer dollars on programs that have outlived their usefulness or exist solely because of the power of politicians, lobbyists or interest groups. We simply can't afford it.

This isn't about big government or small government. It's about building a smarter government that focuses on what works. And that's why I'll ask my new team to think anew and act anew to meet our new challenges.

(END VIDEO CLIP)

KING: Jim, do you buy that, it's not big or small government?

CARVILLE: I absolutely do.

And I want to respond to a couple of things. It's -- this change is breathtaking, Nancy. We're going from incompetence to competence, which is quite a sweep in the view of things. And, you know, Peter Orszag is going to find things that Republicans -- waste that Republicans could only dream of.

And, you know, the $700 billion we spend up -- I don't know how to say this, but there's a recession out there. And a lot of people are hurt. And we've got to get this going and make these infrastructure improvements.

So I think -- I think what you're seeing here is change of a -- on a scale that is going to -- people are going to find to be unimaginable. And just when we get competence back in this government and we're going to restore some confidence in people, we're going to get rid of the Alberto Gonzales and the Michael Browns of the world and replace them with people like Larry Summers and Pete Orszag and Hillary Clinton. It's going to be a huge difference out there, I promise you.

KING: Nancy?

PFOTENHAUER: Well, you know, you've obviously got a very strong Clinton imprint on these picks. I do think it's beyond ironic to have the deputy OMB director pick be somebody off Appropriations Committees -- Committee -- and then say that he's going to cut spending, because I haven't met an appropriator yet -- Republican or a Democrat -- who cut spending. Now, I guess you could make the case that he knows where the bodies are buried and therefore could do it. But I mean this idea that somehow Democrats are constitutionally more capable of fiscal responsibility is just not borne out by history.

You know, in the last two years, the Democrats have spent notably more than the Republicans were spending. And so it's just -- it's a disease that is part and parcel of Washington. And Barack Obama has appointed people who are used to running Washington to run Washington again.

KING: Congressman Rangel, you want to get in on this?

RANGEL: Yes, because, you know, when the country is broke and we have a president like Barack Obama, who's saying that we've got to get rid of the fat and the waste, what an appropriate time to do it. We Congressmen know where the fat is. We all try to do what is best for our constituents.

But it's abundantly clear now, during this crisis, with a leader like Barack Obama and to have the leadership of Speaker Pelosi, that we have to think about what is best for the country.

I mean it's -- you take a look at the health care delivery system, agriculture, defense and certainly the tax code. There's enough fat there that we all can do better, in a nonpartisan way.

I'm looking forward to the change.

BUCHANAN: But, you know, Larry...

KING: Bay?

BUCHANAN: What -- this is what I don't understand. I would say that the $700 billion spending plan -- stimulus plan -- might be appropriate, if, indeed, it was built up. Some -- you know, if somebody said, OK, we're going to use this for this, this for this. And so it adds up. We think in order to do it right, it's going to cost $700 billion.

But he just took this number out of the sky and said hey, you guys, here's one. It's 700.

How's that look?

It's ridiculous. Maybe it should be 450.

RANGEL: Let me tell you...

BUCHANAN: Maybe it should be 900. Just don't throw numbers at the Congress of the United States...

(LAUGHTER)

RANGEL: Let me tell you where he got the number.

BUCHANAN: ...who would just love to spend it.

RANGEL: Let me tell you where he got the number. He got the number from Secretary Paulson.

CARVILLE: Yes.

BUCHANAN: Oh, OK. Well, we've been spending well, Charlie, as you know...

CARVILLE: We've got...

BUCHANAN: And we aren't a strong economy out there, are we?

BUCHANAN: Well, it's just -- I think it belies belief to think that the Democratic Congress -- I mean I do want to applaud Senator Obama -- or President-Elect Obama -- for emphasizing the need to go through program by program and reduce spending. That is absolutely worthy of applause.

CARVILLE: Well...

PFOTENHAUER: And I hope he does it.

CARVILLE: Can I just point out that when a Democratic president left office, there was a $5 trillion surplus there. There's a Republican president leaving office with six years of Republican confidence in a country that's el busto.

I mean please don't even pretend that the Republicans are even close to Democrats in fiscal discipline.

BUCHANAN: Yes. Yes. Wait...

BUCHANAN: If you...

CARVILLE: Don't even pretend that. We can't have it.

PFOTENHAUER: Oh. OK.

How about, James, instead of pretending, how about we actually cite rates of spending, OK?

CARVILLE: Right.

PFOTENHAUER: How about we actually look at the current rate of spending?

KING: OK, how about we get a...

(CROSSTALK)

KING: How about we get a break and...

CARVILLE: Try (INAUDIBLE)...

KING: How about we get a break and come back? El busto. That's new.

What's John McCain saying now?

We'll find out in 60 seconds.

Don't go anywhere.

(COMMERCIAL BREAK)

KING: Today, John McCain had his first press conference since his November 4th loss.

Here's what he had to say about Obama's team.

(BEGIN VIDEO CLIP)

SEN. JOHN MCCAIN (R-AZ), FORMER PRESIDENTIAL

(END VIDEO CLIP) CANDIDATE: It's time for Americans to join together. It's time for us to work together. It's time for us to sit down together and address the enormous challenges that we face.

I think that -- frankly, that Senator Obama has nominated some people to his economic team that we can work with, that are well- respected and they -- I approve of many of them.

(END VIDEO CLIP)

KING: Nancy, could McCain become an important Senate ally for Obama?

You were one of his main cogs.

PFOTENHAUER: Well, you know, I think that Senator McCain always is crucial whenever there is a slim majority, whether it's Republican or Democrat, because he's a very independent thinker. And his focus is on solving problems.

And so whether you agree with or disagree with him, he is a blessing or a curse. I mean because -- because he is going to work with whomever, in his opinion, is pursuing a principled solution to the problems confronting this country.

So I think that, of course, he's going to sit down and work with President Obama when and if he believes what Senator Obama is proposing is the appropriate solution for the country. And we know that he is an enthusiastic supporter of reducing federal spending, particularly eliminating the pork.

And that -- that press conference that President-Elect Obama gave today could have been a statement that was -- that was written and given by John McCain.

KING: By the way, McCain also said today that his former partner, Sarah Palin, has a bright future in the Republican Party. Back with more of this panel when we come back.

(COMMERCIAL BREAK)

KING: Back with our panel.

At that news conference today, Obama was asked what kind of mandate he thought he'd gotten.

Watch.

(BEGIN VIDEO CLIP)

OBAMA: We had, I think, a decisive win because of the extraordinary desire for change on the part of the American people. And so I don't think that there's any question that we have a mandate to move the country in a new direction and not continue the same old practices that have gotten us into the fix that we're in.

(END VIDEO CLIP)

KING: Let's take a call for our panel.

Rosemont, Minnesota, hello.

UNIDENTIFIED FEMALE: Hi.

My question is, after listening to President-Elect Obama today, it was a breath of fresh air being a small business owner. But one of my concerns is still he is addressing quite a big -- large corporations rather than small businesses like us, who employ about 32, 50 people. We are still dealing with health insurance issues. And, you know, basically getting our business off the ground.

KING: What's the question?

UNIDENTIFIED FEMALE: I'm just wondering what kind of a plan President-Elect Obama has.

KING: All right, James, when does he get to those folk?

CARVILLE: Well, I think, by and large, he's going to.

I mean, first of all, the credit system, when -- as they work through their plans to get some more liquidity in this system, you're going to see credit free up, which is going to mean a ton to a lot of small businesses. And once he gets his health care stuff into place, it's going to, you know -- as you know, health care costs are enormously burdensome to small businesses.

And I think Gates there are a lot of small business that are dependent on -- you know, particularly in the Michigan/Ohio/Indiana area -- are dependent on these car makers.

So there's a lot to do. But I think -- I think what you make a very valid point, that it does seem like of late that we're all about Citicorp or General Motors or something like that -- and somehow or another forgetting about the small businesses, which generate most of the stuff in this economy.

But I think his -- I think you'll be pleased as his program unfolds. But the main thing that small businesses need now is they need access to credit.

BUCHANAN: And (INAUDIBLE)...

KING: Orlando, Florida.

I'm sorry.

Go ahead.

BUCHANAN: In fairness, James, those bailouts -- as much as I may not agree with all of them, which is trying to free up that credit market, are coming under President Bush and his administration. So let's make certain that Obama doesn't get the credit for those if, indeed, this credit market is freed up as a result of that policy.

CARVILLE: Right. Right.

RANGEL: One of the exciting things...

KING: Orlando, Florida.

All right, yes. Hold it, Charles.

(CROSSTALK)

KING: Orlando, hello.

UNIDENTIFIED MALE: Yes. My question is to the panel. He made a statement today that they're going to trim all of the fat.

Isn't that going to be a mere pittance, like $20 billion, as compared to the $2 trillion we'll probably need?

KING: Charles?

RANGEL: There's no question about that. I think that taking the fat out of it will be nothing compared to what we will have to do.

Someone said, where do you get the monies?

Where did Paulson get the money? We're talking about investing in America. We're talking about an infrastructure. We're talking about education. We're talking about research. We're talking about competition.

And I wanted to say, the best thing that you can do for the middle -- for the small business people is to make certain that the middle class has enough disposable income to buy so that they will succeed, besides the tax provisions that he wants. But there's no question that we'll have to borrow money to do a lot. But it will be borrowing for an investment and not just to stabilize our fiscal institutions.

KING: Nancy, are you surprised at apparently how well the transition team and the Bush administration are doing -- are getting along?

PFOTENHAUER: Well, I don't think so. I mean, remember, particularly in the economic -- in the economic area, whether you're talking CEA or OMB or NEC. And I'm sorry for the alphabet soup, but that is emblematic of Washington, D.C. . These folks all know each other. I mean they've read each other's articles over the last 10, 20 years. They've worked together in the past.

Again, President-Elect Obama is not selecting really new people. He's bringing back old people, if you will, or folks who have served in similar positions in the past. And, you know, there's a couple that he's named that I'm pretty -- you know, I'm a pretty big fan of, as far as from the standpoint of for folks associated with Democratic administrations. They have, by and large, in their academic lives, advocated for the correct proposals for lower taxes.

They've recognized, for example, that -- that unionization can lead to higher prices that hurt consumers. They've added -- they have talked about the fact that federal spending that is -- that runs amok ends up costing taxpayers money. So they've said some sensible things in the past. And I hope they will in the future.

KING: All right.

Thank you all very much.

It was great having you with us.

CARVILLE: Thank you.

KING: We'll be calling on you again.

The man who told Barack Obama not to run for president, an old friend, is next -- Vernon Jordan.

Don't go away.

(COMMERCIAL BREAK)

KING: He wrote the major best-seller, "Vernon Can Read." His new one is "Make It Plain

Standing Up and Speaking Out." There you see its cover.

He's Vernon E. Jordan Jr. , an old friend. He was president and CEO of the National Urban League, a long time civil rights activist, my New York breakfast partner.

And is it true, Mr. Jordan, that you told Barack Obama some two years ago you didn't think it was his time?

VERNON JORDAN, SERVED ON PRESIDENT CLINTON'S TRANSITION TEAM: It is -- it is true that I said if you are contemplating it, it is my judgment that this is not your season. I have never been so wrong in my life.

KING: And in retrospect, then, looking back, why were you wrong?

What changed?

JORDAN: He won.

(LAUGHTER)

JORDAN: It's very simple.

KING: And something you obviously didn't expect.

JORDAN: It doesn't mean that I'm unhappy about it. I am excited about it. I am in a state of incredulous disbelief, almost. But I am happy about it. And I think that this election says that it's springtime in America.

KING: You supported Senator Clinton, did you not?

JORDAN: Yes, I did.

KING: Were you surprised at how that whole thing went?

JORDAN: It did not turn out as I had expected. But I've been a political observer for a long time and things don't always work out like you think they will.

KING: Yes, you're not kidding.

What do you think of her appointment as secretary of State?

JORDAN: I think it's a very exciting opportunity for Senator Clinton, for the country and for the world.

KING: What's the concept, Vernon, of "Make It Plain?"

JORDAN: The concept of "Make It Plain" is that I have been privileged in my career, whether I was at the Urban League or at my law firm, Akin Gump, or at Lazard, where I now work, to be invited, to have the opportunity to address issues of importance to me and to America.

And given the fact that most black history is oral, I wanted to put down what I thought were the best examples of my advocacy so that my nine grandchildren, their friends and young people all over this country could have some assessment of my thoughts and my stewardship.

KING: I am half way through it. It is brilliantly written.

The question is obvious then, why is black history mostly oral? JORDAN: Well, simply because we were slaves. We -- we did not have the tools, the mechanics with which to make our life in this country plain. And the spoken word has historically been the vehicle for inspiring our people and for teaching white America.

KING: By the way, Vernon Jordan is the recipient of over 60 honorary degrees. You ran Bill Clinton's transition in 1992.

JORDAN: Right.

KING: How do you rate how Obama's doing?

JORDAN: Excellently.

KING: Any surprises?

JORDAN: No surprises. And I think it's -- I think it's going very well. And he's doing it with the same coolness that he ran his campaign.

KING: I think that's one of his most amazing traits, don't you? He remains cool. Nothing ruffles him.

JORDAN: As one of my grandsons tells me, he says, Barack is cool.

KING: What's the toughest part in running a transition?

JORDAN: I think the toughest part, certainly in my time, was saying no to persons who aspired, worked hard and desperately wanted certain positions. And as chairman of the transition, it was my responsibility on behalf of the president-elect and the vice president-elect to deliver the bad news. That's the hardest part.

KING: What will Bill Clinton be doing for the next four years? Vernon Jordan knows him and he'll talk about it right after the break. The book is "Make it Plain." Don't go away.

(COMMERCIAL BREAK)

KING: We're back with Vernon Jordan. The book "Make it Plain, Standing Up and Speaking Out." You know Bill Clinton so well. What's his role going to be in the Hillary secretary of statesmanship?

JORDAN: First of all, he would have the exalted status of former president of the United States, and that cannot be taken away from him. I hope that this is going to result in the opportunity for us, he and I, to play more golf together. I suspect that given the nature of the role of the secretary of state, that some aspects of his stewardship around the world may have to be tampered down. That will be worked out, or I assume it's being worked out now. That does not, however, bar him or limit him in his advocacy for health care around the world, for -- to do something about poverty the world over, and to pursue the interests that he has pursued since he left the White House. KING: The new book here, "Make It Plain," includes speeches that you have given. What do you look for -- you're a great speech maker -- what do you look for from Barack Obama in that historic inaugural address?

JORDAN: A great speech, a memorable speech. If you think about it, from the time that he started this candidacy, his advocacy, his speeches have gotten better and better. And I look for a great inaugural speech from President Obama.

KING: With all you have lived through, Vernon, the ups, the downs, the hardships, what's it going to be like when that family moves into the White House?

JORDAN: It is going to be --

KING: -- for you?

JORDAN: -- an extraordinary moment for all of America and the world.

KING: I gather you will be at the inaugural.

JORDAN: I will be somewhere around.

KING: Thanks, Vernon. Vernon Jordan, "Make It Plain, Standing Up and Speaking Out." And we'll be back in 60 seconds with your blog comments.

(COMMERCIAL BREAK)

KING: Hey, folks. You have been busy on the blog and our own David Theall is here to tell us what you're saying. David?

DAVID THEALL, LARRY KING LIVE PRODUCER: Larry, the entire staff here at the world headquarters of the LARRY KING LIVE blog had, frankly, shopping on our minds today. So with that in mind, we asked this question on the blog: will you spend money on the after- Thanksgiving sales this weekend?

Now, we heard from people who will mostly make retailers happy this upcoming holiday season, upcoming holiday sales season, but we also heard from some who probably will not make those retailers happy. Erica says yes, she is going to take advantage of the sales because "it's the only way that she can afford to have what she calls a modest Christmas."

Tucker also will take advantage of some of those after- Thanksgiving sales. He say that he thinks black Friday can help the economy recover.

We told you we heard from some people who probably won't make a very happy holiday season for retailers. Mami was one of them. She says, no, "you simply can't spend what you do not have." Sam also came in on the blog with this warning for everyone: "we are in the worst financial crisis since the Great Depression and all people can think about is materialism." Says Sam, "quit spending beyond your means." Ten to one, Sam is a father because he sure sounds a heck of a lot like mine.

Larry, we're going to continue this conversation, of course, throughout the evening on your blog, CNN.com/LarryKing. Look for the live blog link. Click it. Come on in, join the conversation. We're having this under your question of the day.

KING: Thanks, David, as always. Magic Johnson, Steve Wynn and Eric Schmidt, they myth all know something about money. Actually, they know a lot about money. See what they're doing in uncertain financial times next.

(COMMERCIAL BREAK)

KING: We're in a financial crisis. Yet, we have three extraordinarily successful men with us. Here in Los Angeles, Earvin "Magic" Johnson, the sports legend, one of the best players in NBA history, entrepreneur, philanthropist, and author of the new book, "32 Ways to be a Champion in Business." In Mountain View, California, Eric Schmidt, CEO of Google. He's also, by the way, a member of President-Elect Obama's Transition Economy Advisory Board. And in Las Vegas, Steve Wynn, chairman of Mirage Resorts. He's credited with spearheading the resurgence and expansion of all of Las Vegas.

We'll start with Steve, something amazing. In the midst of a downfall and Las Vegas doing very poorly, you're going to open a new hotel. How are you doing well in the face of chaos?

STEVE WYNN, CASINO DEVELOPER: Well, we'll see whether I'm doing well. How do you like my timing, Larry? It's Wynn Resorts now.

KING: Not Mirage?

WYNN: Yes, that's right.

KING: What is your look at all of this?

WYNN: When things are complicated like this, I think back to the advice I got from my dad, which is stick with simple things that you're sure of. This is a time we happen to be very fortunate. Our company is quite healthy financially. We have a capital structure that's quite different than everybody else's. We don't owe much money. We have lots of cash and that sort of thing.

But what really matters at a time like this, if you're talking about a business man, it's about people. And we tend to get bogged down now about money and things like that. And we forget that the real essence of what's happening and the way out of this is to think about the people. I concentrate on my staff. I talk to them. And I remind them that this is an opportunity for us to stretch our lead over our competitors, because we don't change, you know.

So it's about human resource engineering. And so, for me, I spend most of my time every day thinking about the staff, especially when you're opening a new hotel and you bring on 5,000 new people. You know, this sort of thing becomes front line.

KING: What is the name of the hotel?

WYNN: Encore. Makes sort of sense when you think about it.

KING: Eric Schmidt, you're on the president-elect's Transition Economy Advisory Board. What do you make of this emphasis on people idea?

ERIC SCHMIDT, CEO OF GOOGLE: I love it. People are how everything happens. In our case, we believe you focus on innovation, because innovation will power us out of almost everything. Everything gets kind of stuck, and everybody gets kind of negative, and everything sort of shuts down. But the way you power out of these things is by inventing new businesses, like Steve just talked about, and you make new things happen. People get excited and it takes off and the rest is history.

KING: Magic?

EARVIN "MAGIC" JOHNSON, FMR. NBA BASKETBALL PLAYER: Yes, I think they're both right. And what I'm concerned about is really the small business owners. You know, when you think about it, small businesses make America go. And so, we bailed out the banks. Now, the banks have made it awfully hard for tough -- and tough for small business owners. So now with the regulations on the banks, is the Obama team going to make sure that small businesses be able to get loans, so that they can create these new job that both of the gentlemen were talking about. Because small business owners have been hurt by this economy and we've lost a lot of small business owners.

KING: Steve, what do you make of the bail outs?

WYNN: I've expressed myself in the past, Larry. Our government is good at certain things and not good at others. Today, I think President-Elect Obama was discussing 50 million dollars that went to the wrong place in government subsidies for people that shouldn't have received those subsidies. The government is very good at certain things. Regulation is a good thing.

The restraint of governmental power can sometimes be very dynamic. For example, if you wanted to change education in America tomorrow, all you'd really have to do to get the right people to go into education is to say that if you're an educator and you stay for five years, you'll be tax free for the first 75,000 of your income. If you stayed for ten years, you would get 100,000 dollars in tax free income. Those kinds of things, the restraint of federal power, very often is more dynamic.

KING: OK.

WYNN: And so I think that President-Elect Obama is a thoughtful -- I think we got a very bright guy as president of the United States.

KING: Eric, you agree? SCHMIDT: Absolutely. This team is unusually sharp. And if you look at his appointments, people he's putting in, these are people who can deal with the ambiguities that we are all facing now. The good news is they have responded to financial crisis. Now they have to work on Main Street. This is what Magic was talking about. Jobs are what is needed here. Without customers, businesses don't do so well.

WYNN: And government, Larry -- government doesn't really create a better standard of life for people. Governments create environments in which a better standard of life can be achieved. That's why most people, like Eric and Magic, because I happen to know both men, spend an awful lot of time on education. If we don't have an educated electorate, an educated population, then no matter how much innovation we come up with, the kids growing up and the people in the society won't meet those opportunities and get the jobs.

KING: Yes. It seems simple, Magic. It's what he said first, right? It is simple.

JOHNSON: Well, you know, both gentlemen are making great points. Education is the key. And especially when I think about the minorities in this country, where in urban schools we are suffering in a big, big way. And so I know President-Elect Obama wants to change that definitely for everybody, not just for minorities.

But at the end of the day, if these banks do not allow these small business owners to get the loans necessary, if minorities are not allowed, which they haven't been in the past -- so I don't know how we're going to get loans now, because the banks have been in so much trouble. How do Latino business owners or people who want to be in business, Asians, African-Americans, who want to put people to work -- how are they going to be able to get loans now?

KING: Every big businessman needs banks. Steve, you still have to call on banks. Are they there with it or are they not there with it?

WYNN: When the bailout first came up, you remember, Larry, there was an awful lot of talk about Uncle Sam was going to buy all the lame paper coast to coast, bring it to Washington and somehow reprice it. That, in my opinion, would have been a catastrophe. The government is not well suited to do that.

The credit crisis we're facing is a result of a loss of focus by everybody in society, borrowers, lenders, the government. There are no innocents in this game. But what's happened is in order to solve this problem, what we have got to do is solve the problem where it happened. The government can regulate banks. And they can inject money. I'm glad to see that the secretary of the treasury has changed the policy and they're stiffening the balance sheets of these banks. They're going to relieve some of the tests that are frightening these banks, because the banks think they're going to go out of business.

The government can put in, like Warren Buffett did with his preferred shares in General Electric, preferred shares with teeth. Get the banks back in business, so they're not afraid to lend. KING: Right.

WYNN: And put rules in.

KING: How, Eric, does the CEO stay above the fray -- how does Google stay above the fray?

SCHMIDT: From our perspective, we're just running our business as well as we can. You figure the recession is going to be a year, maybe a year and a half. We don't really know. Then we're going to recover. From the standpoint of taking a long view, which is how CEOs are supposed to look, take the long term view.

Also, all of your guests here are optimists. We believe in the future. We believe in American creativity. We believe in all the great things that got us as far as we have now. Those haven't gone away. We just elected the first African-American president 40 years after Martin Luther King's assassination. We should be proud of what America has done. So let's get on with it. Let's get through this disaster, and get back to business.

KING: Would you agree, Magic, all successful people are optimistic?

JOHNSON: Eric and Steve are true people who have passion about what they do. They've built incredible businesses and companies. The thing about it is nobody should be really concerned right now. What they should be is excited about President-Elect Obama and where he's getting ready to take the country and the economy.

(NEWS BREAK)

(COMMERCIAL BREAK)

KING: Let's take a call for this terrific panel. Dallas, Texas, hello?

CALLER: My question is for Magic. Magic, with your theaters closing in some of the inner cities, are you going to put businesses back in the inner cities?

JOHNSON: No question about it. I have businesses in 22 states, 91 cities, all in urban America. I will continue to grow my businesses in urban America and put people to work. That's what we're talking about today on this panel, just how do we get the economy going and putting people to work. And that's what I will continue to do in urban America and working with whoever is running President- Elect Obama's urban policy. I will be working with them.

KING: Steve, obviously, this wasn't the fault of the guy on the street. Let's say the average American worker makes 50,000 dollars a year. He drives a bus, lives in Chicago. It wasn't his fault.

WYNN: He'll take the brunt of the punishment.

KING: What advice do you give him? WYNN: At this point, stay cool, save your money, don't jump into anything strange. It's OK, once in a while in life, not to know what to do. It's OK to be stumped every once in a while. I think it's all right to admit that. I think this is a good time to sit back and let things play out. There's too much change happening too fast for most people. That's probably a good time to cool it.

KING: Eric, what will you tell them?

SCHMIDT: We're in this bizarre period between the current president and the next president, and I think everyone is doing what Steve said; everyone is sort of waiting. The sooner we can get going, the better. Personally, I think the investments we're going to do with infrastructure -- the president talked about the two-fer idea, the notion of a stimulus package that would fix things, like roads and bridges, invest in our schools and work on our new energy infrastructure. That's where the growth will be. So that's where I would focus my energy if I had time to think about it.

JOHNSON: Also, that's what creates jobs.

SCHMIDT: Absolutely. In fact, couldn't we just solve everything at once? Couldn't we fix our energy infrastructure problem, get gas prices low, get people back to work, do insulation in our houses, make ourselves less likely to end up with wars over oil if we invest in getting our infrastructure right. I know it sounds boring, but we depend on it. If we get that platform right, it creates jobs, exporting jobs. It's a big opportunity for us in America and it's right in front of us.

KING: Do successful people like you -- do you always get along? You have a common thread that you're financially successful.

JOHNSON: We do. We understand -- we don't panic during times like this. We're all winners. We're used to winning and we know how to win even in tough times. And that's why all three of us will continue to win. But our whole focus right now is helping America get back being strong, putting people back to work, and also the belief back into the country again. I think that President-Elect Obama will bring that to all of us.

KING: Will Las Vegas come back, Steve?

WYNN: Sure. Human nature is like when you tense a muscle. You can only hold it so long. Human nature will get deflected, but will always eventually return to its normal behaviors.

I think that was well said, Magic. We're buddies and I was glad to hear you say that. Interesting to hear Eric talk about it, too. I think we'll be OK.

KING: When does it open?

WYNN: Four weeks from yesterday. Encore and its 5,000 new jobs will hit the sunshine Monday, the 22nd of December, and have a nice long healthy life. And we'll take good care of our help. We'll have no layoffs, no bad news. We'll just power through.

KING: Eric, does Google own the world?

SCHMIDT: I don't think we own the world, but we're doing our best to be part of the Internet. What's interesting about this is the Internet continues to grow very nicely. People use the Internet for everything now, and more and more, it's a part of our daily life. That's good for government. It's good for information. It's good for government. It's good for democracy. And it's also good for Google, of course.

(CROSS TALK)

KING: How does it feel, Eric, to run a business that people have now -- you're a dependency?

SCHMIDT: It's great because people care. We get all this wonderful criticism, you should do this better or that better, and it makes us stronger. From my perspective, it's wonderful to be in the scene, to be part of our future.

KING: Do you use Google, Magic?

JOHNSON: Yes.

KING: Who doesn't? Do you use it, Steve?

WYNN: Yes. I was going to say, if Eric's going to own the world, I think that's a great idea. Just don't do it on borrowed money.

SCHMIDT: We don't actually. And again, good businesses are careful about money, too.

KING: All three of you remain optimistic?

SCHMIDT: Absolutely.

WYNN: Yes.

JOHNSON: America is coming back and it is going to come back stronger and better than ever.

KING: This should make everybody feel good. Thank you so much, Earvin "Magic" Johnson, Eric Schmidt, the CEO of Google, and Steve Wynn, chairman of Wynn Resorts. Encore opens in four weeks. Good night guys. Thanks to all of you who are reading Kings Things. It's my two cents. It's on our blog, and it will be a feature, probably every Monday at CNN.com/LarryKing. Joy Behar and Alec Baldwin are here tomorrow night. He's going to talk about his marriage, his divorce and fatherhood, and weekly star turn on "30 Rock," a show I'll be on in February.

Thanksgiving we'll be on at a special time, 8:00 p.m. Eastern, with a special show, a night for heroes. Christina Applegate, Bill Maher, Will.I.Am, Sheryl Crow, Alicia Keyes and others are here with incredible, uplifting stories, powering the positive. It's a night for heroes, 8:00 Eastern Thanksgiving night.

Now Soledad O'Brien and "AC 360." Soledad?