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American Morning
Detroit's Big Three Returns to Congress; When Pirates Attack; A Look at Obama's "Rahmbo"; Spitzer's New Gig; College Coasts Soar; Unbelievable Story of Forgiveness; Senator Reid's Comment Causes a Stink
Aired December 04, 2008 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
KIRAN CHETRY, CNN ANCHOR (voice-over): Begging for 34 billion. The big three come back to Capitol Hill today as the union bends so the car industry won't break.
UNIDENTIFIED FEMALE: Anything that happens to General Motors, Chrysler or Ford can have a (INAUDIBLE).
CHETRY: But are they making suckers out of you?
Plus, troubled waters.
UNIDENTIFIED FEMALE: It was a surprise attack.
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED FEMALE: And they did fire shots.
CHETRY: Pirates fire on a floating city. A desperate situation on land sends terrorists out to sea. Whether your cruise ship could become the next 30,000 ton target on this AMERICAN MORNING.
(END VIDEO CLIP)
CHETRY: And welcome. Thanks for being with us on this Thursday, December 4th. I'm Kiran Chetry.
JOHN ROBERTS, CNN ANCHOR: Good morning to you. I'm John Roberts. Probably something that not everybody who takes a cruise thinks about, whether or not they'll be attacked by pirates.
CHETRY: Yes. Exactly.
ROBERTS: But it's happening.
CHETRY: Yes. And we saw yesterday that one of the ships took evasive measures, actually speeding up. But there are a lot of real concerns out there. Can you go on a cruise and feel safe?
ROBERTS: Yes. That's one of the stories we'll be covering for you today.
Meantime, our top stories today. Pakistan's president says he will "take strong action against the terrorists behind last week's deadly attacks in Mumbai. His promise came during talks with Secretary of State Condoleezza Rice who is right now on an emergency mission to cool rising tensions between nuclear Pakistan and India. Following her meeting in Islamabad, Rice said Pakistan understands the need to act against extremists in its country.
This morning Wal-Mart says it plans to beef up security in the wake of last week's deadly stampede at one of its stores in New York. The new safety measures come as relatives of the man trampled to death have sued the retailer blaming it for whipping customers into a fatal frenzy.
The man who orchestrated Barack Obama's election victory is writing a book about the historic campaign. David Plouffe was Obama's campaign manager. His book is an inside look at Obama's victory run and a guide for running an organization. The tentative title of the book, "The Audacity to Win."
CHETRY: Well, we begin with breaking news and what could be much needed relief for homeowners struggling with mortgage payments. How about a 30-year fixed mortgage with a rate of 4.5 percent. How does that sound?
Well, right now, the Treasury Department is batting around a plan that could do just that. It's all aimed at breathing life back into the battered real estate market. The story is brand new this morning, and CNN's Christine Romans is "Minding Your Business" with more details on really what could be a lifeline for many people.
Hi, Christine.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It could be a lifeline, but keep in mind this is just a plan at this point and the Treasury Department but none of the government officials are talking publicly about what this looks like. This is according to people familiar with the matter, and this is what they're telling us.
They're telling us that the treasury is actively considering a plan that would drive down mortgage rates perhaps 4.5 percent. This will be the treasury buying up securities backed by 30-year mortgages.
The idea here you take those off the market, you buy up those. You have demand for those that drives down the underlying mortgage rate and that would help the housing market. That would help people who are looking to buy a home and people who are refinancing.
Industry lobbyists are very keen about this because they would like to revitalize the housing sector. We know that last week we told you right her on this program that the Fed was buying mortgaged-backed securities, a lot of them. And after that happened, the 30-year fixed-rate mortgage declined to just under 5.5 percent on a 30-year fixed. When that mortgage rate declined to 5.5 percent, we saw refinancing skyrocket in the last week.
Even on a holiday week, people went out at that lower interest rate and refinanced their mortgage. That puts more money in their pockets and that's good for the economy overall.
So who does this help? This would help if this is something that comes to fruition. This would help people who are out there looking for a home to buy.
This would help people who have good credit and can refinance and have their job and want to refinance. This does not help someone who just lost their job. This does not help anybody who is already in default because it's very hard to refinance a mortgage if you are already in default.
So for the people who are struggling on the verge of losing their home, not a lifeline. For the people who want to lower their cost of their home, it could be -- it could be a lifeline and it could be good for people who want to get in the market. It could stimulate the market. So, we are expecting maybe some kind of announcement maybe next week.
Again, this is preliminary. It's still a plan. We're not hearing publicly from the agencies about this.
This is still people familiar with the matter saying look, they're talking a lot about this. And they're trying to do something, especially after last week when the Fed said it was going to buy a bunch of mortgaged-backed securities and interest rates and those mortgage rates went down. And it did spark a lot of refinancing activity.
ROBERTS: Yes. It certainly could help a lot of people if they went ahead and do that.
Hey, stick around because we want to get your thoughts on the bailout.
ROMANS: Absolutely.
ROBERTS: Coming back to you in just a couple of minutes. So much for that.
ROMANS: OK.
ROBERTS: In just a few hours, the top men of Detroit's big three automakers will again go before lawmakers with an urgent cry for taxpayer dollars. But this morning, a bailout is not looking like a likely prospect.
Senate Majority Leader Harry Reid suggesting that the votes just aren't there. Not enough lawmakers support it and apparently, neither does the public.
A new CNN/Opinion Research Corporation poll shows 61 percent of Americans are against the bailout, but President-elect Barack Obama says Detroit must show that it is serious about changing its ways.
(BEGIN VIDEO CLIP) BARACK OBAMA (D), PRESIDENT-ELECT: We should also make sure that any government assistance that's provided is designed for a -- is based on realistic assessments of what the auto market is going to be, and a realistic plan for how we're going make these companies viable over the long term.
(END VIDEO CLIP)
ROBERTS: CNN's Brianna Keilar is live on Capitol Hill for us this morning.
Brianna, the Senate majority leader says he doesn't have the votes to give automakers a lifeline. Is there any chance that he can get enough votes between now and the time that he put that on the floor to actually pass something?
BRIANNA KEILAR, CNN CORRESPONDENT: Well, John, no one here on Capitol Hill is going to tell you that automakers trying to plead their case today are not doing the uphill climb. But this really is their last chance or one of their last chances to try to sell these plans that they put out on Tuesday and also to try to redeem themselves in the eyes of Americans and lawmakers after that whole jet fiasco.
You know, the White House is saying let's see what happens today at the hearings. President-elect Obama is saying let's see what happens at these hearings today and tomorrow before he puts his specific stamp on any sort of proposal.
No doubt it's a tough road ahead. Democrats may have to throw their arms up in the air and say we're just going to have to wait until there's an increased Democratic majority until there's a Democratic president. But publicly at least, John, they're not to that point where they're saying that yet.
ROBERTS: You know, Brianna, in addition to the, you know, the main impact of one of these companies going under would have. There are about three million jobs tied broadly to the auto industry. Some 700 car dealers have already gone out of business. It's expected that as many as 900 will go out of business by the end of this year.
If lawmakers don't bail out these car companies and they do go bankrupt, and they take an entire industry with them and maybe pull the economy into depression as some people are warning that it might, are they worried about payback at the polls?
KEILAR: Well, sure. There's a tremendous amount of pressure that you're going to see just today. Not only is the president of the United Auto Workers going to be before Congress pleading his case as well, but there's also going to be a rally, representatives from auto suppliers who are going to be here on the Hill putting pressure.
So this is not lost on Congress. This is not lost, of course, on Democrats who are, you know, really the party of unions. But we've heard House Speaker Nancy Pelosi say look, bankruptcy is not an option saying the bottom line -- that the bottom line here, though, John, is there is disagreement on this, not just if there should be a bailout but also on where the money would come from.
ROBERTS: All right. Brianna Keilar for us on Capitol Hill this morning. Brianna, thanks so much.
CHETRY: And Christine Romans once again with us with some reaction to this. And what do -- what are you hearing in business circles about this ripple effect that John alluded to -- these three million jobs tied in some way to the auto industry?
ROMANS: What I'm hearing most from people is that if we didn't have that $700 billion bailout, it might have been easier for the carmakers to go to Washington and get their own -- and we say bailout. Let's keep in mind these are low interest loans. These are loans as most bailouts are.
They might have had a better time, but a lot of these people in Congress are being slammed at home by their constituents about the $700 billion bailout, where is that money going. And people are tired of lending a lifeline to some of these industries.
So what I'm hearing a lot is that the timing is really tough right now on a lot of -- on a lot of levels for the automakers and where you pay for it.
Brianna said, you know, where is the money going to come from? Is it going to come from that $700 billion bailout? They have to do some fancy footwork on things to get that, which is meant for the financial system to get that money for that. Would it be a separate, a separate kind of a legislation? They have to -- you know, where is that money going to come from?
Ultimately it comes from us. And how do we get it? We borrow it from somebody else.
ROBERTS: Nobody likes the idea that two weeks ago it was $25 billion, now it's 34 billion.
ROMANS: Right.
ROBERTS: Where will it end up? Christine, thanks for that.
ROMANS: Sure.
CHETRY: President-elect Barack Obama signing up another former rival to his new team of rivals at the White House. New Mexico Governor Bill Richardson is his choice for commerce secretary. Obama says that he's a perfect fit to be America's leading economic diplomat. And Richardson took some ribbing from his new boss for losing the beard.
(BEGIN VIDEO CLIP)
BARACK OBAMA (D), PRESIDENT-ELECT: I think it was a mistake for him to get rid of it. I thought that whole western rugged look was really working for him. For some reason --
(END VIDEO CLIP)
CHETRY: There you go. You be the judge. There's the before and after. Although, that one, correct me if I'm wrong, John, he has a goatee there. For a while, didn't he have a full lawn or was it always a goat (ph)?
ROBERTS: No. It was always a goat as far as I know. But you know, this is much talk about beard or no beard as there is about tie or no tie. You know it's like, people focus on sometimes just the wrong things.
CHETRY: That's right. Don't change your part. You'll really throw everyone for a loop.
ROBERTS: There you go.
CHETRY: Well, he is the man who will drive the president-elect's agenda. Rahm Emanuel known as a tough political insider. But there is more to this guy than you may know, and we're uncovering the new chief of staff.
Nine minutes after the hour.
Cruise ship alarm.
(BEGIN VIDEO CLIP)
WILL GEDDES, SECURITY SPECIALIST, ICP GROUP: That emits a very high, loud frequency that disrupts the pirates from coming close to the ship.
(END VIDEO CLIP)
CHETRY: Pirates taking on new targets. How passengers on vacation can still stay safe on the high seas.
You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Surprising development in the wake of pirate attacks in the waters off of Somalia to tell you about. Pirates releasing a Yemeni cargo ship without receiving any ransom. Officials say Somali tribal elders helped secure the vessel's release. Pirates have attacked nearly 100 ships this year in the Gulf of Aden and successfully hijacked almost 40 of them. They're currently holding more than a dozen ships and their crew's captain.
Pirates have mainly targeted cargo ships and oil tankers, a big one until now. High seas bandits are now hunting for richer prey. This week we saw a failed hijacking of the cruise ship Nautica. And now, maritime experts say the cruise ship industry could be bracing for more of these attacks.
CNN's Jason Carroll is here. He's following that for us this morning. You know, when you're aboard one of these cruise ships, you think about maybe bad weather or sea sickness. You don't think about piracy.
JASON CARROLL, CNN CORRESPONDENT: Or maybe bad food, but piracy? You know, this doesn't seem to be a problem that seems to be going away any time soon. These bandits are desperate, well organized and armed. It makes for a dangerous combination. Security experts say the international community has to do more to stop them.
(BEGIN VIDEOTAPE)
CARROLL (voice-over): Pirates latest target, the cruise ship MS Nautica. Bandits fired on the luxury liner, the captain outmaneuvered the attackers by revving the engines and speeding away.
UNIDENTIFIED FEMALE: The captain says they were suspicious. They're following us, but we're all just going to the corridors or into our cabins.
UNIDENTIFIED FEMALE: It was a surprise attack, you know.
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED FEMALE: And they did fire shots (ph).
CARROLL: Security experts estimate bandits have attacked about 100 ships off the Somali coast this year, claimed millions in ransom, taken more than 200 hostages. Pirates say Somalia is so poor they will not stop.
UNIDENTIFIED MALE: We work together and our ranks grow because there's more hunger and more skills. That is what causes more people to join piracy. The world cannot do anything about it.
CARROLL: So will cruise companies change course to avoid trouble waters? Cunard, which owns two liners scheduled to sail near the Somali coast next March says, "We continue to monitor the situation in the Gulf of Aden closely. We have not made any changes to our ship's itineraries. We continue to belief that there are adequate security measures in place."
Security experts say powerful water cannons are effective defense tools. So too are long-range sound devices.
WILL GEDDES, SECURITY SPECIALIST, ICP GROUP: That emits a very high, loud frequency that disrupts the pirates from coming close to the ship.
CARROLL: But Will Geddes, like other security experts still discourages ships from hiring armed guards.
GARY NOESNER, RETIRED CHIEF FBI CRISIS NEGOTIATION UNIT: Whenever you put armed individuals on a ship, it's upsetting to people who are hoping to take a leisurely vacation cruise.
CARROLL: Gary Noesner, a former FBI chief hostage negotiator, says a greater international military and naval presence is needed in the Gulf of Aden. NOESNER: Only government has the capabilities through their naval forces or other military components to effectively deal with this very violent criminal enterprise.
(END VIDEOTAPE)
CARROLL: And security experts say there needs to be a new U.N. resolution that will enable military and naval forces to more actively engage these pirate forces. Those same experts worry the pirate attacks could spawn copycat attacks which could be used by terrorists.
A spokesman for the Navy is advising ships sailing through the region to go through the international corridor which is an area of water patrolled by military forces.
ROBERTS: I mean, since we saw in years past, you know, with the Aquili Lauro (ph), of course, cruise ships were the target of terrorists so --
CARROLL: They are vulnerable.
ROBERTS: Perhaps everything old will be new again.
Jason, thanks for that report.
CHETRY: Thanks, Jason.
Well, a daunting warning, America at risk for a nuclear attack in the next five years. Vice President-elect Joe Biden just got the details, and this morning he's speaking out. We'll tell you what he's saying.
And also Barack Obama's new point man, Rahm Emanuel, often described by some as a foul-mouthed pit bull. But there's more to this guy than just his tough exterior. We're going to get some insight from those who know him best.
It's 16 minutes after the hour.
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(BEGIN VIDEO CLIP, "SATURDAY NIGHT LIVE")
ANDY SAMBERG, PLAYING RAHM EMANUEL: Hello. I'm Rahm Emanuel, one-time congressman of Illinois's fifth district and now White House chief of staff designate for President-elect Barack Obama.
I should say to anyone thinking about crossing me, I will (beep) end you. You will never even see it coming. One day you will be here and the next day you will (beep) disappear.
I'm sorry. Did you (beep) say something? Are you (beep) sure? Yes. You better be (beep) sure.
(END VIDEO CLIP) CHETRY: That was "Saturday Night Live" impression. Andy Samberg playing Rahm Emanuel, the president-elect's hard charging and blunt chief of staff. And since Emanuel became a power on Capitol Hill, we heard a lot about his tough tactics but there's, of course, more to the man than meets the eye.
AMERICAN MORNING's Alina Cho is here with more on that.
ALINA CHO, CNN CORRESPONDENT: You know the first -- he's the first to say, you know, I have a colorful language. And so do his brothers. It's a bit of a problem in the family.
Good morning, Kiran. Good morning, everybody.
You know he's been called a street fighter with a killer instinct. But talk to his rabbi and he'll tell you that Rahm Emanuel is really just a nice guy, intensely spiritual, even polite. His congressional colleagues say he's the kind of guy who will chew you out then send you a cheesecake.
All of this critical knowledge when you're talking about the man who's about to become the president's gatekeeper.
(BEGIN VIDEOTAPE)
CHO (voice-over): They don't call him "Rahmbo" for nothing.
BARACK OBAMA (D), PRESIDENT-ELECT: There are only so many ways to say I'm going to rip your head off.
CHO: Barack Obama's chief of staff is famous for being in your face. But there's another side to him.
UNIDENTIFIED MALE: He is a very polite, well-liked, beloved person.
CHO: Rahm Emanuel? The man who reportedly sent a dead fish to a pollster? His rabbi says the Rahm he knows is different. So devout that during the Jewish new year, one of the holiest days when Orthodox Jews can't make phone calls, Rahm Emanuel asked for a pass.
UNIDENTIFIED MALE: Am I allowed to be on a conference call to help pass the bailout, the $700 billion bailout? And I told him, I asked him is that, is it a serious as we, you know as it's made out to be? So he said yes, it is serious.
UNIDENTIFIED FEMALE: I think that's your phone.
CHO: On the hit show, "Entourage," character Ari Gold is based on super Hollywood agent Ari Emanuel, Rahm's brother. And this character on "The West Wing" --
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: I have to work.
(END VIDEO CLIP)
CHO: ... is said to be based on Rahm. In fact, the only Emanuel brother without a TV likeness is Zek (ph), a Harvard-educated top oncologist at the NIH.
(BEGIN VIDEO CLIP, PBS/CHARLIE ROSE)
EZEKIEL EMANUEL, RAHM'S BROTHER: If you had looked at us in grade school and high school, you would not -- you know, you would not have predicted our success.
RAHM EMANUEL, WHITE HOUSE CHIEF OF STAFF DESIGNATE: You would not have (INAUDIBLE) on the Emanuels. You would not get a gun (ph) short.
CHO: Before taking on politics, Rahm Emanuel studied ballet.
OBAMA: He learned to leap. He learned to spin, and learned to sway his hip to the left and to the right so no one knows which direction he's heading in.
CHO: He also made $16 million as an investment banker after he left the Clinton administration.
UNIDENTIFIED MALE: He gets the big picture but he also sweats the details. And he is absolutely relentless.
(END VIDEOTAPE)
CHO: And those contacts he made as an investment banker will serve him well as he helps to shape economic policy. And speaking of policy, those who know Rahm Emanuel well say he not only understands policy, he understands the politics as well. And one person said he gets the big picture but he also sweats the details and he will be very effective as chief of staff because of that, Kiran.
CHETRY: All right. A good inside look. Good to know he's not exactly like the caricature outside the headlines.
CHO: Oh, they say he gets a bit of a bad rap, that he softened over the years.
CHETRY: Haven't we all. All right. Alina, thanks so much.
CHO: You bet.
ROBERTS: The CEOs from Detroit's big three automakers go back before Congress today hat in hand. They're looking for cash to keep them from going under, but is there bailout plan already a bust? We're talking with economist Jeffrey Sachs straight ahead.
And it's been months since we've heard a peep from disgraced former New York governor, Eliot Spitzer. Well, guess what? He's got a new gig. We'll tell you what it is, coming up.
It's 23 minutes after the hour. (COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
DAVID J. WHITE, WASHINGTON: Many Americans are sick and tired of investing their money on vehicles that end up with a Flintstone transmission. You know what a Flintstone transmission is, don't you? It's this. We don't like walking when we're paying for a vehicle.
(END VIDEO CLIP)
ROBERTS: Welcome back to the "Most News in the Morning." That's i-Reporter David White expressing his frustration with Detroit's automakers.
Leaders of the big three are cruising into the nation's capital in their fuel-efficient cars for a second round of congressional hearings on their bailout request. They're asking now for $34 billion in emergency federal money, but it's a tough sell to lawmakers. Don't forget they originally asked for 25 billion.
Our next guest is going to testify at the House hearing in the auto industry tomorrow. Jeff Sachs is director of the Earth Institute at Columbia University, also a special U.N. adviser. He joins us now.
Jeff, it's great to see you again.
JEFFREY SACHS, DIR., EARTH INSTITUTE AT COLUMBIA UNIVERSITY: Thanks.
ROBERTS: What are you going to tell Congress tomorrow morning?
SACHS: We better do this. If we don't, the economy is really going to take a very steep plunge. And the auto industry I've reviewed their plans carefully. They've come through with what they were asked to do, which is a plan forward, deep consolidation. Very tough, asking all of the key stakeholders, the unions, the bondholders, everybody. They've got to be part of it.
So they came through this week. We have to come through now. Congress a little bit disorganized, the administration going out. No one can agree on anything. But if we don't do this, we're going to face a calamity out here.
ROBERTS: There's a divergence of opinion here. You say we better do this or we're facing potential calamity. Some people say catastrophe. Other people, on the other hand, Mitt Romney among them say, hey, the best thing for the auto industry would to go into Chapter 11 Bankruptcy protection. It would force this sort of dramatic reorganization that he doesn't believe that they can do, yet they don't go into Chapter 11.
SACHS: Every expert that looks at this says it would force liquidation and trigger a financial calamity because all of the credit default swaps that are linked to the bonds that would go into default would go kaboom. You know, his dad's company, American Motors, after his dad left, went out of business entirely. That's what we see on the big three.
I don't know what they're talking about. That is a reckless gamble in my view, this idea of Chapter 11 as a solution. It's the end, and this is to be avoided. So we're playing with an explosion right now and Congress is, at least, they got to get their act together.
ROBERTS: But yet at the same time, 61 percent of Americans according to a new CNN/Opinion Research Corporation poll, say don't give them the money. They engaged in bad business practices. You're just rewarding them for making mistakes.
SACHS: It's understandable that they say that, but people here are not going to like 10 percent unemployment, 11 percent unemployment, 12 percent unemployment. They're not going to want to see this economy go into an unbelievable downward spiral. People need to see the link between this step and the calamity that we're right now on the edge of right now.
ROBERTS: These concessions that apparently the UAW is prepared to make, will that help in the overall business recovery plan?
SACHS: What the industry is saying is they're going to cut models sharply. They're going to cut employment sharply. They're going to get concessions from the unions. They're going to get concessions from the bondholders. Everybody is going to be part of this thing.
And it's a very tough road that they've chosen but that's the survival road and it's going to be the one that's going to stop this economy from spinning into a real collapse.
ROBERTS: Jeff, another big story today which we get you to ring in on this idea that the Treasury Department may back mortgage securities with federal bonds and keep interest rates to a maximum like 4.5 percent, I think, for a 30-year mortgage. Is that a good idea? Is that a way to put some more liquidity into the mortgage market, boost housing sales?
SACHS: There's going to have to be something for homeowners. That's what the president-elect has been saying over and over again. So something like this is coming.
ROBERTS: All right. You think it's a good idea?
SACHS: I think we need something like that...
ROBERTS: All right.
SACHS: ... whether it's that one or something related. But we got to take urgent steps because the economy is teetering on a real collapse right now.
This isn't our normal slowdown. This is the worst we've seen in 75 years. And if we're just arguing among technical details right now rather than getting in with the auto industry, getting in with homes and the rest, we're going to face a collapse here.
ROBERTS: Jeff, it's great to see you. We look forward to your testimony tomorrow. Thanks for dropping by with the preview.
SACHS: Thanks a lot.
ROBERTS: Kiran?
CHETRY: Well, it's just about half past the hour now. A look at the top stories.
Down, down it goes but where it stops who knows. AAA says that the national average for a price of regular gas now $1.79 a gallon. It's the 78th straight daily decline in gas prices, and gas has not been this cheap since January of '05.
Vice President-elect Joe Biden insisting the government must do more to prevent terrorists from using chemical or biological weapons on American soil. He was briefed yesterday by members of a government panel on weapons of mass destruction. A report from the group warned terrorists are likely to launch an attack in the next five years. Barack Obama's Homeland Security secretary nominee Janet Napolitano was also at that briefing.
And Eliot Spitzer has a new gig. The disgraced former governor of New York will write a by weekly column for slate.com called "The Best Policy." Spitzer once known as the sheriff of Wall Street during his days as New York's attorney general. He will focus on financial issues. His first entry criticizes the recent bailout in Washington. Spitzer resigned from his post in March after being implicated in a prostitution scandal.
Well, this morning the cost of a college education is becoming more expensive and more out of reach for most Americans. In fact, according to a new report, college tuition fees have soared in the past 25 years. In fact, in many cases outpacing most family incomes.
Zac Bissonnette joins me now from Boston. The editor of AOL's walletpop.com and a contributor with thedailybeast.com.
Zac, thanks so much for being with us this morning. You know, you write about this situation and about how in a way there could be a silver lining to the recession for young people. But first of all, when you talk about this bleak news as it relates to being able to afford college education for many young people, how worried should young people be about being able to afford an education?
ZAC BISSONNETTE, EDITOR, AOL'S WALLETPOP.COM: Well, I think it's prudent for young people to be worried right now. College education expenses as you just are rising. It's somewhere between two and three times the rate of inflation, in an environment where economic growth is stagnant and wages are not growing. So I think kids should be very worried about paying for college.
CHETRY: You say there is a positive side of the recession, where in it could actually be a good thing for your generation -- used to being able to live on credit, used to being able to buy what they want when they want it. So what's the bright side, if you will, the advice to people saying, look, I'm in a bad state right now.
BISSONNETTE: I think the bright side is a lot of people are watching their parents or their friends' parents making, you know, a lot of big mistakes with money. People using their homes as ATM machines. You know, racking up a lot of credit card debt. And those chickens are coming home to roost right now. And I think young people now are going to be a lot less likely to make mistakes. You know, there's going to be kind of a depression era mentality and a lot of older people who survived the depression are extremely frugal. And I think young people may develop somewhat that mentality now.
CHETRY: You make an interesting point. I tend to agree with you about this. You write, "One of my theories about money is that the way people handle a bit of it while they are young is the best predictor of how they will handle more of it when they are older."
BISSONNETTE: Absolutely.
CHETRY: So as you said, this depression era, frugality seems to be lost on a lot of young people these days. So how do you instill that as opposed to people just saying, you know what, I'll weather this, and then when I do, I'll be back to my spending ways?
BISSONNETTE: Well, I think it's kind of a baptism by fire for kids right now. It's very difficult for young people to get jobs right now, both in high school and kids were coming out of college. One of the reasons it's hard for high school kids to get job is that, you know, retail and restaurant have been two of the hardest hit sectors and those are the two biggest employers of young people who are in high school. And you're seeing that in curb scene spending.
You know, "The New York Times" just had a piece on the (INAUDIBLE) economy. You know, kids, Abercrombies, same store sales are down 20 percent. Aeropostale which is cheaper but similar. (INAUDIBLE) store sales up about one percent. So there's evidence that young people are getting it.
Plato's Closet which sells gently used clothing aimed at young people. They are doing very well right now. Thrift shops are doing really well. So there is a flight to more budget conscious stuff by young people. And in fact carries over into their spending habits later in life. You know, they will do very well because of that.
CHETRY: So that is the silver lining. But the real -- you know, harsh reality for some as well, though, is that they are leaving college in some cases with debt, and it's harder to find a job right now. So what is your advice, when they are competing against people who had been laid off or seeing companies decide to contract as opposed to expand. And so, job prospects especially for the young are harder to come by.
BISSONNETTE: Right. You know it's funny. The other day I had a friend who was a junior in college at UMASS with me, and she said to me that she was worried. She wants to work in P.R. when she's older. And she's worried about the job market. You know, if you look at the headlines, it's scary. And she wanted to know, you know, what she could do to make herself attractive to employer.
And I said, well, you know, one thing that we could do is we're going to go to library together one night and we're going to e-mail ten P.R. firms. We're going to say, you know, what can I do to make myself attractive to your company, and then she's going to go ahead and do that. You know, follow whatever they tell her and then she will be well-positioned hopefully in a year or two when she goes look for a job.
So I think that young people have to be much more aggressive than they did in previous market cycles. And I think that in a way that's good, because they're going to develop interviewing skills, they're going to, you know, do resumes more so than they used to, need to. And those are skills that are going to lead to long term success when the market rebounds.
CHETRY: Some good points. Zac Bissonnette, thanks so much for joining us. Great to talk to you this morning.
BISSONNETTE: Thanks so much. Appreciate it.
ROBERTS: Well, snow is moving across parts of the country. Could it slow down your travel plans? We'll head to the Weather Center for an update. That's coming up.
Forgiving her child's killer.
(BEGIN VIDEO CLIP)
CHRISTIANE AMANPOUR, CNN CHIEF INTERNATIONAL CORRESPONDENT: Iphigenia was preparing a plate of food and serving it to Jean-Bosco Bizimana, one of the men who murdered five of her children.
(END VIDEO CLIP)
ROBERTS: Breaking bread with the enemy. Christiane Amanpour with an unbelievable story of forgiveness. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the "Most News in the Morning." The world's most heinous crimes, an amazing story of forgiveness. A woman sitting down for lunch with a man who murdered her husband and children. Our Christiane Amanpour was there for that remarkable event. And the exchange is part of her CNN special tonight, "SCREAM BLOODY MURDER." Take a look.
(BEGIN VIDEOTAPE)
AMANPOUR (voice-over): I met Iphigenia on a beautiful Sunday morning in church. After mass she invited me home. There in her unadorned hill top house, no electricity and no running water, I saw something extraordinary. Iphigenia was preparing a plate of food and serving it to Jean-Bosco Bizimana, one of the men who murdered five of her children.
(on camera): It's amazing for us to sit here and share food with families who have been through so much.
(voice-over): Jean-Bosco is married to Iphigenia basket weaving partner, and after seven years in prison, he returned to face the woman he had all but destroyed.
(on camera): And what did you say to her? You looked her in the eye and what did you say to her?
JEAN-BOSCO BIZIMANA, KILLED IPHIGENIA'S CHILDREN (through translator): The first time we spoke, we discussed the horrible things we did to them without holding anything back.
AMANPOUR (on camera): And did you expect Iphigenia to forgive you and give you mercy?
BOSCO BIZIMANA (through translator): I felt that they would forgive me.
AMANPOUR: How did you find it in your heart to forgive?
IPHIGENIA (through translator): In my heart, the dead are dead. They cannot come back again. So, I have to join myself with the others and forget what has happened.
(END VIDEOTAPE)
ROBERTS: That's just an extraordinary story. You would wonder how Iphigenia could ever find it in her heart to forgive. Why she wouldn't just the second that she saw that man lash out and attack him.
AMANPOUR: It is extraordinary. This is Rwanda 1994, 800,000 to a million people were stored in a space of a hundred days as the Hutus went on a rampage against the Tutsis. And the international court system has not been able to process all the murderers and all the accused.
So, what's happening is a local policy of reconciliation from local courts, where, as you've seen, the victims face the perpetrators who apologize and beg forgiveness. And that's what seems to be happening around Rwanda today.
ROBERTS: And we see -- actually have seen programs like that here in the United States. But the level of that -- you know -- of the violence that was associated with the genocide -- they literally wipe out a person's entire family and then be able to sit down and break with bread with them.
AMANPOUR: It's really extraordinary. But it's the policy of the president. And these are really some of the heroes, these victims, who've lost everything and yet for the future, for the good of the country, for their own heart and soul, and they're religious. They've said, well, we have to move forward and we have to reconcile. ROBERTS: Just unbelievable.
AMANPOUR: Yes.
ROBERTS: It's going to be a really interesting documentary tonight. Christiane, thanks for dropping by.
AMANPOUR: Thank you.
ROBERTS: And you can see the full story on Christiane's special, "SCREAM BLOODY MURDER," tonight at 9:00 Eastern right here on CNN.
And if you have a video question for Christiane, send it to us at iReport.com. Christiane will do a live interview on CNN.com just ahead of tonight's documentary premiere. This, absolutely, is must- see TV tonight.
CHETRY: Well, once rivals now teammates, some of President-elect Barack Obama's closest advisers and appointees have disagreed in the past. So, will they really all get along in the White House? We'll take a look. It's 43 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: And you know, if anyone knows anything about living the good life, it's definitely Knut, the famous polar bear. He used to be the world's cutest and cuddliest celebrity, but, man, times have changed, apparently, because of this worldwide economic crisis. The Berlin Zoo now says it cannot afford the bear's extravagant expenses, which have reportedly ballooned to nine million euros. It's more than U.S. $11 million. But not to worry, poor Knut because zoos in Sweden and Norway say they would love to give that polar bear a home.
Rob Marciano is off today. Reynolds Wolf is in the Weather Center in Atlanta.
It's polar bear weather in many parts of the country as well, Reynolds?
REYNOLDS WOLF, CNN METEOROLOGIST: Absolutely, absolutely. What's so extravagant about his lifestyle?
CHETRY: I don't know.
WOLF: It's not like Knut's wearing a Rolex.
CHETRY: Exactly.
(WEATHER REPORT)
CHETRY: All right. Reynolds Wolf, thanks so much.
WOLF: You bet.
ROBERTS: Is this any way to talk about your tourists?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You can smell the visitors. You could literally smell the tourists.
(END VIDEO CLIP)
ROBERTS: Big stink over what the senator said. And the tourists are really steamed up now. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
ROBERTS: It's coming up at 10 minutes now to the top of the hour. Welcome back to the "Most News in the Morning." It took four years longer to build than originally planned and blew the budget by about eight times over. But the new Capitol Visitor Center is finally open. And, as our Jeanne Moos reports this morning, it truly is a breath of fresh air in Washington, D.C.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT (voice-over): Memo to Senator Harry Reid. When you start a sentence this way...
SEN. HARRY REID (D), MAJORITY LEADER: My staff has always said, don't say this.
MOOS: ...chances are you're going to cause a stink.
UNIDENTIFIED MALE: It's disgusting.
UNIDENTIFIED FEMALE: I have to admit, it's kind of odd thing to say.
UNIDENTIFIED FEMALE: It's kind of a crazy statement.
MOOS: It was the opening ceremony for the new air conditioned capital visitors center. No longer will sweltering tourists visiting the capital have to stand outside in long lines.
REID: Because the high humidity and how hot it gets here, you could literally smell the tourists coming into the Capital.
MOOS: Like a stink bomb reaction wafted across the Web. "Dirty Harry," conservative bloggers called him. "It's not the tourists that stink," "you reek." "You, sir, are the one who stinks."
We sniffed around outside the new visitor center.
UNIDENTIFIED MALE: I think the people will -- probably a little bothered by it. I mean, I felt so bad this morning I actually took an extra bath before I came out here.
MOOS: Even the CBS Evening News gently mocked the senator's comments.
UNIDENTIFIED REPORTER: The brand new Capital visitor center, $621 million not having to smell sweaty tourists, priceless.
MOOS: Senator Reid was accused of treating the public like The Great Unwashed.
(on camera): Critics are making no secret of their disgust, suggesting that people who want to stick it to Harry Reid send them their stick deodorants.
(voice-over): But the senator spokesman says the only point that he was making was that this beautiful new facility will make coming to the Capitol so much more enjoyable.
MOOS: Senator Reid made the same comment once before.
REID: The people who work here joke about you can always tell when it's summer time because you can smell the visitors.
UNIDENTIFIED MALE: I was born and raised here. I've never smell a bad tourist.
UNIDENTIFIED FEMALE: I did not smell nor did I have a problem smelling anybody.
MOOS: But some who work on The Hill have. Watch heads nod in the audience.
REID: You can literally smell the tourists coming into the Capital.
(LAUGHTER)
MOOS: Whether true or a joke, critics say the remarks sure wasn't suave and repeating it should be banned.
UNIDENTIFIED ANNOUNCER: Won't wear off as the day wears on.
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Letting to people who are hoping to take a leisurely vacation cruise.
(END VIDEO CLIP)
CHETRY: What if pirates hijack your dream vacation. Staying safe with pirates on board.
Plus, school fundraising shocker.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: If you really disagree with what I'm doing, then you need to get your wallet out. (END VIDEO CLIP)
CHETRY: Selling ads on the science test.
And who hangs up on Obama? Who hangs up on Obama twice? The congresswoman and the crank call that wasn't. You're watching the "Most News in the Morning."
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING. Top videos right now on cnn.com. Our most popular. You saw it here yesterday on AMERICAN MORNING. How much is too much? A new study says middle-aged women won't have a higher risk of heart problems from alcohol as long as they stop at two drinks a day.
How about this? A life of a teen in the Congo saved by a text message. Doctors in England used a cell phone to pass step by step instructions on having to amputate the boy's infected arm. Without the operation, they say the teen would have died.
And some school kids hoping to perform their Barack Obama rap at the president-elect's inauguration, after their non-partisan rapping about the virtues of voting became a YouTube hit. The kids are now talking about the issues through song. They say the hardest part is to try to find something to rhyme with Ahmadinejad.
John?
ROBERTS: They'll have to work on it, but I bet they will come up with something.
Well, with all the talk of bailouts for banks and the big three has the little guy lost the most of all. Washington lobbyists are leaning on the Treasury Department now to lower mortgage rates for homeowners to 4.5 percent. And some banks are now stepping in to freeze foreclosures. But is it too little too late? Certainly for many people it might be. Our Deb Feyerick has been looking into things for us. She joins us now.
Good morning, Deb.
DEBORAH FEYERICK, CNN CORRESPONDENT: Good morning, John. Well, you know, for some people it's definitely inevitable. They're going to be losing their homes. But there is a plan that has so far saved 30,000 houses. So why don't more people have access to it?
(BEGIN VIDEOTAPE)
EDDIE MORRISON, HOMEOWNER: Yes, that was you.
FEYERICK: When Eddie Morrison heard about the government's $700 billion bailout his first thought was --
E. MORRISON: Can anybody help me, there?
FEYERICK: Behind on his mortgage payments, Mars, a truck driver making $65,000 a year was sure the foreclosure letter was in the mail.
CORINTHIA MORRISON, HOMEOWNER: I was getting nervous to the point where I started packing.
FEYERICK: Instead, IndyMac, the bank which had given the loan was seized by federal regulators and its new administrator FDIC chairman Sheila Bair put a freeze on foreclosures, giving people like the Morrisons a chance to modify their loans to rates they could afford.
SHEILA BAIR, CHAIRMANWOMAN, FDIC: Foreclosures keep going up and home prices keep going down. And we've got to stop this spiral.
FEYERICK: Bair has publicly taken on the Treasury and Federal Reserve, saying it's critical to tackle the root of the problem by helping homeowners, not just big institutions.
(on camera): Based on the model you created with IndyMac, how many homes do you think you could save right now?
BAIR: We could prevent 1.5 million foreclosures from occurring.
FEYERICK (voice-over): Under her plan, people who are 60 days late paying would get a chance to reduce high interest rates and extend the length of their loan if they qualify. So why isn't it happening?
BAIR: I've been watching it for a long time, and why we haven't been able to garner the political will to tackle this problem more aggressively at the borrower level has been somewhat a mystifying to me.
FEYERICK: Critics call Bair's proposal a subsidy for troubled borrowers.
BERT ELY, CATO INSTITUTE: In many cases, they would actually be better off giving up the home and renting for a while, restoring their financial health.
FEYERICK: Bair estimates her problem would prevent 30 percent of foreclosures expected over the next two years.
BAIR: We think it works. We think we've got the data to show it works. And so I just really wish we can all make a decision and move forward with it.
(END VIDEOTAPE)
FEYERICK: Now Chairman Bair says there are other programs out there, but they're all over the map. She believes that homeowners need a single program, and the IndyMac model has been successful. In fact, 40 to 50 percent of borrowers with that company ask to modify their loans and that's really high when compared to the response to other programs. If she gets the money she believes she can get this program going and give it out to people or at least make it available to people in less than two months. John?
ROBERTS: What about people who deliberately go into default to take advantage of the system?
FEYERICK: And that's a big question. And a lot of people say, well, a lot of people are going to try to gain this system. But Chairman Bair is very clear on that. She says don't game the system. There's a mathematical analysis that's done and you will risk foreclosure if you try to purposely go delinquent to qualify.
ROBERTS: Well, you know, no question, something has got to get done and got to get done quickly, because there are a lot of people out there who are on the brink of collapse.
FEYERICK: Absolutely.
ROBERTS: Hope for something for them. Deb, it's good to see you this morning.
FEYERICK: You, too.
ROBERTS: Thanks.
