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American Morning

Awaiting Unemployment Report; Keeping Calm Under Pressure; Justice Ginsburg Undergoes Surgery; Obama's Stimulus Pitch; USS Cole Suspect Charges Dropped

Aired February 06, 2009 - 08:00   ET

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

JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now. It's 8:00 Eastern. Breaking news today. The economy expected to hit another new low this morning. The government's key employment report is due out in about half an hour's time. It could send the unemployment rate in this nation to 7.5 percent. That would be a 16- year high.

It's something that the president talked about in a very intense speech urging action on his stimulus plan last night.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES OF AMERICA: We are expecting another dismal jobs report on top of the 500,000 jobs that were lost last month, on top of the 500,000 jobs that were lost a month before that, on top of the 2.6 million jobs that were lost last year. And for you, these aren't just statistics. This is not a game.

(END VIDEO CLIP)

ROBERTS: It could be the third straight month that we have lost more than 500,000 jobs. The health scare on the Supreme Court Justice Ruth Bader Ginsburg recovering from pancreatic surgery this morning. She is 75 years old; a Clinton appointee. Concerns for her health are sparking questions about the future of the court.

Our senior legal analyst Jeffrey Toobin, best-selling author on the high court. He authored the book "The Nine." He'll be here at 8:40 Eastern to talk about President Obama's choices if Justice Ginsburg steps down after having cancer surgery.

The octuplets mom speaking out for the first time now since she left the hospital. Her amazing delivery sparking all kinds of ethical questions. 33-year-old Nadia Suleman already had six children before she gave birth to eight more. She told NBC's Anne Couric that her dream to have a huge family stemmed from her dysfunctional childhood. Suleman says all 14 children were conceived through in vitro fertilization all from the same donor.

And breaking this morning, new images of another amazing water landing. Look at this. A plane skidding to safety off the coast of Australia. The pilot being praised for his quick action and heroics much like Captain Chesley Sullenberger of US Airways Flight 1549, which landed in the Hudson River in New York. All five passengers drenched but OK, waiting to the shore. Coming up just a few minutes from now, we're going to take a closer look at this crash and the miracle on the Hudson, and some other crashes to get expert insight about what it takes to make a perfect landing under pressure and why some potentially safe landings go horribly wrong.

First our top story. The latest government jobs report comes out at 8:30 Eastern this morning with forecasters predicting a worsening job market. The unemployment rate expected to hit 7.5 percent today, making it the highest jobless rate in 16 years.

Last night on "LARRY KING LIVE" money expert Suze Orman put our current situation in rather depressing terms saying that it's starting to look like an old news reel out there.

(BEGIN VIDEO CLIP)

SUZE ORMAN, MONEY EXPERT: There are some people, they can't find a job. They're trying to do anything and everything in their power to get by. They've lost their home. They've lost their car. They don't have any money in retirement. They don't have a penny.

And what are they doing?

They're doing food stamps. They're in bread lines. Go by the bread lines, Larry. Look at the people that are standing in soup lines but -- so to speak, bread lines, where they just want food. There are white collar workers in some of those lines. It's absolutely, to them, like a depression.

(END VIDEO CLIP)

ROBERTS: Suze Orman last night on "Larry King Live."

Let's now bring in Christine Romans and Ali Velshi, both "Minding Your Business" this morning.

You know, it's widely held that as goes January so goes the rest of the year. So, if we're getting these terrible jobs report out today, what does that say for 2009?

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: It says it's going to be an uncertain year. No question. And one thing, even if you start to see us slow down the layoffs, you're not seeing people hiring and that's why the unemployment rate is expected to continue to rise.

Also, the jobless rate is a lagging indicator. It's something that continues to even get worse after the economy turns around. So I think that the take-away for a lot of people here is this is going to be a very tough year as we've been saying over and over again. It's not a time to be taking risks with your job. It's not a time to -- this is a time really, really to hunker down and make sure you've got the savings and make sure you're ready to go, because we could see 500,000 people or more lose their jobs again in the month of February quite likely. CHETRY: No, I was just asking to your point also when we talk about the situation. There seems to be a real disagreement still between those on the right and left about what exactly will create jobs now. Is it tax cutting so that businesses can hire or not?

ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: You just heard -- you were talking to Mitt Romney about this. And there are really two schools of thought on this one. You either put money in from the top, where you give it to businesses or wealthier individuals in terms of tax cuts who create demand and create jobs. As some people say even when you give it to lower income people it creates that kind of demand or you create jobs directly like much of the stimulus program does. They are both competing arguments.

The only issue here about tax cuts stimulating job growth is that when you give tax cuts to the people in this kind of environment because of the uncertainty that Christine just talked about, they may hold on to their cash. People know that it will be OK on the other side of the recession. But ultimately the only way you get through a recession as an individual or as a company is with the cash to do so. That's why they are laying people off.

If you can make it to the other side, you are fine. That's why people may not take the money they save and create jobs or create demand right now. And that's why that tax cut argument isn't as solid as it's been in previous recessions.

ROBERTS: Yes. And so many people as you said may be fearful of losing their jobs, not making big purchases.

VELSHI: That's right.

ROBERTS: Everybody is sitting on that.

VELSHI: Or as Christine said earlier, just waiting to build up a little cash pile which they haven't had.

CHETRY: All right. Ali Velshi and Christine Romans, we'll have more from both of you on this throughout the morning. Thank you so much, especially as the news comes in in about 30 minutes.

Meanwhile, President Obama will meet with members of -- family members of the victims of the bombing of the USS Cole and September 11th at the White House today. And this comes after the Pentagon's judge overseeing terror trials at Guantanamo Bay dropped charges against an al Qaeda suspect in the Cole bombing that killed 17 U.S. sailors. This move upholds President Barack Obama's order to freeze military tribunals there. Now terrorist victims groups are now asking if the U.S. has abandoned its quest for justice.

Suzanne Malveaux is at the White House with more.

Good morning, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Kiran. One of the most controversial decisions President Obama made in his first couple of days is closing Guantanamo Bay Detention Center. Now, I had a chance to talk to Jim Riches. He lost his son in the 9/11 attacks and he won a lottery ticket from a families of the victims to go to Guantanamo Bay to see for himself, and he says he disagrees with the president on his decision to close Guantanamo Bay and he is going to tell him so this afternoon.

(BEGIN VIDEO CLIP)

JIM RICHES, LOST SON IN 9/11 ATTACKS: Well, I'd like to tell him, you know, I was down there picking up the body parts and I saw the results of what these terrorists did. And I sat down in Guantanamo and they stood up there and they bragged that they were the ones that did it. That they killed my son, that they killed all the others, they were proud of it. They called for Jihad. And, you know, we can't go backwards but we'd like to move forward and see this -- this justice that has been delayed for so long. In seven years, we'd like to see how he is going to project this forward and bring these men to justice.

The issue is what are we going to do with these Gitmo detainees, who are all mostly very violent evil men. And I think there's mountains of evidence against them and I just don't feel like going back. I mean, it's up to them if they want to close Gitmo and the detention center, but we want to know what plan they are coming up in these 120 days, and what will give us justice because we're waiting eight years and nothing has happened.

And, you know, I would like to see these men who are up there bragging that they brought America to their knees, you know, suffer the fate that they deserve.

We are glad that he is meeting with us. And we would like -- you know, we're glad and we want our voices to be heard, and that's all anybody can ask of government. We think that's just the way it should be done. And hopefully, he'll hear our message, and you know, we'll move on and we'll have a fair and speedy trial for them, and America will stay safe and strong.

(END VIDEO CLIP)

MALVEAUX: Rich is, obviously, is grateful for the invitation, Kiran, and a White House aide saying that's exactly why President Obama wants to see these families today to explain his decisions and to offer some comfort and some direction.

Kiran?

CHETRY: And, again, it's important to note, the Pentagon saying that new charges could be brought again later, and that the suspect in the Cole will stay in prison for the time being but again, you know, understandable that there are questions surrounding it. Suzanne Malveaux, thanks so much.

John?

ROBERTS: Well, keeping calm in dire situations can sometimes mean life or death. Captain Sully Sullenberger, the pilot of The Miracle on the Hudson, landing saved 155 passengers by staying cool. Here's how Jay Leno described Sullenberger's demeanor last night.

(BEGIN VIDEOTAPE)

JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Tape of Sully Sullenberger, you know the hero pilot? OK.

(APPLAUSE)

Now this is a tape of him just before the plane landed in the Hudson River safely. Remember this guy is under the most -- I'm going to make a point. There is a point to this. This guy is under the most intense pressure imaginable. Figures, got a 150 lives, no engines, he's above the most populated city in the world and there is no place to land. Listen to how calm he is. Now listen.

(BEGIN VIDEO CLIP)

CAPT. SULLY SULLENBERGER, US AIRWAYS: Ah, this is cactus 1539. Hit birds, we lost thrust in both engines, we're turning back towards LaGuardia.

TOWER: If we can get it to you, do you want to try to land runway 13.

SULLENBERGER: Unable. We may end up in the Hudson. What's over to our right? Anything in New Jersey. Maybe Teterboro.

TOWER: OK, which runway would you like at Teterboro?

SULLENBERGER: We're going to be in the Hudson.

(END VIDEO CLIP)

LENO: OK, here is my point. Here is my point. You see how calm he was? OK, let's go to Hollywood now and an actor under pressure.

(BEGIN VIDEO CLIP)

CHRISTIAN BALE, ACTOR: I want your (BLEEP). Don't be sorry. Think for (BLEEP) one second! What the (BLEEP) are you doing?

(END VIDEO CLIP)

(APPLAUSE)

LENO: That's between Hollywood and real life right there.

(END VIDEOTAPE)

ROBERTS: Well, from disbelief to decision time, Captain Sullenberger didn't have a whole lot of time to figure out a plan.

Joining us now is John Lucich. He is a license commercial pilot who's flown out of the New York City area. He's here for just a little bit of insight on what goes on in the cockpit.

I mean, when you see that comparison, an actor going crazy on the set and a pilot in a life or death situation, most likely death is going through his mind -- so calm, cool, and collected. How does he keep it together like that?

JOHN LUCICH, LICENSED COMMERCIAL PILOT: You know, that just comes from experience. I always tell people if you want a safe flight, choose a guy with a lot of white hair on his head. This guy was so cool, and he made the right decisions at the right time. And Remember, he had literally seconds to make those decisions because if he had taken a whole new path and gone down to Teterboro, he need to overshot that runway or undershot that runway, it could have been a disaster. He did the right thing at the right time.

ROBERTS: Yes. I mean, he would have to fly over Frank Sinatra's old hometown of Hoboken actually in the way in to Teterboro. And you know, how populated that is. There's no place to put a plane down. So if he not made that -- had he not made that split second decision to say the biggest runway I can see at this moment is the Hudson River, what do you think might have happened?

LUCICH: Well, it would have been a disaster. There's no doubt about it. And he knew that. It took him, literally, I think less than 20 seconds to make that decision. He knew he was going in the Hudson, and once that he made that decision, he didn't communicate because now he is flying the airplane and getting the crew ready to do their stuff in the back, which I think did a great job.

When you take a look at one of the flight attendants who thought to -- she saw the engine on fire, she now grabs a fire extinguisher just in case there was a fire at landing. She was ready to do battle against that fire.

ROBERTS: Yes. You know, there's a couple of other incidents that we wanted to get you to comment on to. 2005 Air France Flight 358 landing in Toronto International Airport after what had been an otherwise uneventful flight. It ended up in the ravine off the end of the runway on fire. Everybody on board survived. What were the critical moments during that particular incident?

LUCICH: The critical moment was the decision to land. He stayed -- you know, a lot of pilots will actually hold more than an hour. This guy made the decision after 15 minutes. And anything I say is not meant to double-guess this pilot, OK?

I had the benefit of reading the TSB report from Canada on what was possibly the cause of this. This guy came in in brutal, brutal weather, he had raging storms around him, lightning strikes all around the airport. There's nothing to come -- to come into, but he saw that other airplanes were landing before him successfully.

He came in about 40 feet above the glide slope, which is an instrument landing system that keeps you on target for the airport. He came in 40 feet and he came in a lot faster than he should have, which placed him 3500 feet down the runway. But he made a decision to continue to land. Once you make a decision, you got to stick with it. Good or bad. You got to stick with it. He did that. And everybody walked out alive.

ROBERTS: Right. Certainly, they didn't get there the land that they expected to.

LUCICH: No. But they all got there, and that's the important part. And thank God that happened.

ROBERTS: John Lucich, thanks very much for your insight this morning. Appreciate it.

LUCICH: Thank you.

ROBERTS: And don't forget that the hero captain of US Airways Flight 1549, Chesley "Sully" Sullenberger is going to be our guest here on AMERICAN MORNING next Wednesday. That's after he appears on Tuesday evening with Larry King on "LARRY KING LIVE."

Kiran?

CHETRY: All right. Well, after the president's feisty speech yesterday, is he fired up and ready to go? Does that the persona from the campaign trail coming back? We're looking at the commander-in- chief style change.

Also the jobless numbers are on everyone's mind. New numbers coming out in just about 20 minutes. So where do you find a job if you don't have a college degree? There are jobs out there, and we're going to show them to you. 13 minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: This is not a game. This is not a contest for who's in power, and who's up and who's down. These are your constituents. These are families you know and you care about. I believe that it is important for us to set aside some of the gamesmanship in this town and get something done.

By necessity, we are moving quickly. We are not moving quickly because we are trying to jam something down people's throats. We're moving quickly because we're told that if we don't move quickly, that the economy is going to keep on getting worse. And we will have another two or three or four million jobs lost this year.

And then you'll get the argument, well, this is not a stimulus bill; this is a spending bill. What do you think a stimulus is?

(LAUGHTER)

That's the whole point! This package is not going to be absolutely perfect, and you can knit and you can pick and you know that is the game that we all play here. We know how to play that game. What I'm saying is now we can't afford to play that game. We've got to pull together. There are going to be some things that don't get included that each of us would like to see included. All of us are going to have to make some sacrifices.

(END VIDEO CLIP)

ROBERTS: An energized and fired up President Obama there rallying fellow Democrats to pass the stimulus bill. The president delivered a frank assessment of the economic challenges the nation faces while also urging both Republicans and Democrats to work together for the good of the country.

CNN's senior political correspondent Candy Crowley joins me now from Washington.

There is a sign of what his management style looks like it's going to be going forward, very similar to language that we heard in the campaign during the fall, Candy.

CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Absolutely. For now and in that forum. You know, like I used to tell my kids, there is like the locker room where you talk to your posse and then there's the dinner table where you talk to your grandmother, and that's two different things.

And I think here what you see is President Obama with House Democrats who have already passed a stimulus bill, part of which actually he doesn't like and has said so in private. And it was not a speech aimed at Republicans. It was a speech aimed at those Democrats and at the greater audience watching him on television.

There is still going to be and has been, in fact, the White House had signaled to Capitol Hill. Give this group of moderates up there trying to figure out a bill, give them another day. Don't force this to a culture vote. Give it. So there is on the one hand, on the other hand, and that's part of what the bully pulpit is.

ROBERTS: You know, part of what he said there in that address is this plan is not perfect, but people are wondering, well, if this plan is not perfect and it doesn't work, what then? And many Republicans are saying, hey, you've got completely the wrong idea here in this long-term spending, it's got to be short term and they're really on this idea of tax cuts and they are beginning to gain in the court of public opinion the upper hand here. If you look at recent Gallup Polls how support for this particular bill has slipped in recent weeks, their argument is gaining traction.

CROWLEY: It is. And I think that's why you saw the president out there talking to House Democrats. I think it's why you saw him talking to all the networks. I think it's why he is having a press conference on Monday. That's why you have the bully pulpit. And he's going to continue to push this. But you're absolutely right that there has been a slippage in public support, not for the president, but for this package. So he's got to figure out a way to take his popularity and move it into popularity for this package.

ROBERTS: How much political capital do you think he is willing to spend to get this particular plan passed?

CROWLEY: Oh, a lot. I mean, this was his -- this is not only the issue of this year, next year, the decade, however you want to look at it. This was his issue on the campaign trail. This is what he promised to deliver, a turnaround in the economy. I don't think he can spend too much capital on this. I think they intend to spend as much as it takes.

ROBERTS: All right. Candy Crowley for us this morning from Washington. Candy, thanks so much. Good to see you this morning.

CHETRY: Well, as we know in this current economy, finding a job right now is hard enough. But what if you don't have a college degree? Well, believe it or not, there are jobs out there for those with just a high school diploma, and good ones. Our Gerri Willis is going to be showing us where in a minute. It's 19-1/2 minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

OBAMA: I think it is important to make sure that the recovery package is of sufficient size to do what's needed to create jobs. We lost 500,000 jobs each month for two consecutive months. And things could continue to climb and we'll know the number tomorrow.

Every economist, you know, even those who make quibble with details and the makeup in the package will agree that if you've got a $1 trillion in lost demand this year and a trillion dollars lost demand next year, then you've got to have a big enough recovery package to actually make up for all of those lost jobs and lost demands.

(END VIDEO CLIP)

CHETRY: That's President Obama last night bracing, along with the rest of us, for the latest economic numbers that are due out in about seven minutes. And they're expected to show unemployment at a 16-year high.

So, with the economy bleeding jobs, is there hope for someone who doesn't have a college degree to fall back on? Personal finance editor Gerri Willis is here with some advice.

You've been showing us jobs that are out there for varying levels of education, but if you're concerned because you're saying...

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Right.

CHETRY: ...you know what, all I have is a high school diploma, is there something that I can support my family on out there?

WILLIS: Absolutely. You know, the reality is that 44 percent of this economy's jobs go to people who only have a high school diploma or its equivalent, believe it or not. So, that's a very big number that you should pay a lot of attention to. What's more -- these jobs may pay more than you expect. The average pay here, some $41,600, and that compares with $52,000 for somebody with a bachelor's degree. That's about $11,000 difference.

Now, obviously, if you get more education, you get paid more, but you might be surprised by how much high school folks get paid. Compared this to crossing guards who only make $21,000. So, the devil's in the details, picking the right job.

Right now, in demand, if you have a high school degree -- you know what it is right now where they want to hire people?

CHETRY: Health care -- health care industry?

WILLIS: Health care is great, but right at this moment, tax preparers and satellite TV dish installers because of the conversion to digital.

CHETRY: Oh, yes.

WILLIS: So, big demand there. But let's take a look at high-paying jobs. Here's where you can make a lot of dough if you have a high school degree, and most of these are management jobs. Take a look. Margin department supervisor. This is somebody who's involved in collections in a company. They're managing -- they're managing bill pay. So they're involved with the money, so they get paid a lot of money. Service station manager, $72,000. What do you think about the Web surfer there, Kiran?

CHETRY: A lot of people do it anyway. At least you get paid, right?

WILLIS: Right. Exactly. So, it's like looking at user experiences and reporting back to companies. Lead carpenter you can see here.

CHETRY: We're not talking about a four-year college degree, but you do need some sort of specialized training for many of these?

WILLIS: You would probably get it on the job because you're actually supervising people who are doing this kind of work. Let's take a look at some more. Home health care aides. We talked about health care. You mentioned that. $56,000. But this is somebody who is supervising the aides, who's probably already been an aide. Collection supervisor. This is obviously somebody who is collecting bad debts. You know what a flight service manager is? This is somebody who manages flight attendants.

So, as you can see, you got to look to those management jobs if you want to make a little bit more money. But there are jobs out there for people with only high school diplomas. That's the good news. We're always looking for the solutions out here in this tough economy.

CHETRY: Yes. A little ray of light in what's been really dismal reporting lately. Thanks so much, Gerri.

WILLIS: My pleasure. CHETRY: John?

ROBERTS: We're just a few minutes away now from the highly anticipated employment numbers. See if the government's figures for January are higher or lower than expected.

Then Supreme Court Justice Ruth Bader Ginsburg undergoing surgery for pancreatic cancer, sparking speculation on possible nominees for the Supreme Court should she step down. We'll talk about it with CNN senior legal analyst Jeffrey Toobin just ahead. It's 26 minutes now after the hour.

(COMMERCIAL BREAK)

ROBERTS: 28 minutes after the hour now. Breaking news this morning. The government's key employment report due out in just minutes. It could be the third straight month that we have lost roughly 500,000 jobs. That could send the unemployment rate to a 16- year high.

President Obama referred to the large number of layoffs in a tense speech that everyone is talking about this morning. It was a serious effort to sell his recovery package. The president saying that America is running out of time and patience.

(BEGIN VIDEO CLIP)

OBAMA: The American people are watching. They did not send us here to get bogged down with the same old delay, the same old distractions, the same talking points, the same cable chatter. You know, I mean, -- aren't you all tired of that stuff?

(END VIDEO CLIP)

ROBERTS: The Senate ended debate late last night without a vote or compromise in the stimulus bill. A vote could come, though, before the beginning of the weekend.

The Pentagon dropping all charges against a suspect in the USS Cole bombing. Abdul-Rahim Al-Nashiri is accused of planning the October 2000 attack that killed 17 American sailors. The move done to comply with President Obama's ruling to shut Guantanamo Bay. The charges can be reinstated, though, once President Obama's four-month ban on all court proceedings at Gitmo expires.

The so-called father of Pakistan's nuclear program suspected of selling secrets to nations like Iran, Libya and North Korea is a free man today. The Pakistan government ended A.Q. Khan's five-year house arrest today. But officials say that does not mean he can leave the country.

CHETRY: It's just in to CNN right now. The Agriculture Department says that peanut products might be contaminated with salmonella and that they're being used in school lunches in three different states. Now, we know -- we've been reporting on this widening scope of the recent outbreak that was tied to a peanut plant in Georgia. In fact, earlier this week, CNN broke the story of a FEMA worker -- FEMA victims. They were storm victims in both Arkansas and Kentucky. They ended up getting emergency relief packets that also contained peanut butter packets that potentially could have been contaminated. They were told to get rid of those. Again, now we are learning that potentially contaminated peanut products were sent too school lunches in three states. We are following the fall out and seeing where this ends up and what the Agriculture Department is saying about this.

So we'll update you as soon as we get more information.

JOHN ROBERTS, CNN ANCHOR, AMERICAN MORNING: And we're breaking news now on the economy. Christine Romans and Ali Velshi both here to talk about the numbers that are about to be released. It's the employment rate, the January jobless numbers, employment numbers.

Christine, what are we expecting today?

CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT: We are expecting 7.5 unemployment rate, maybe 525,000 jobs lost to the month of January.

You know, we know that January was a tough month. Every day we've been reporting to you company after company who have been losing jobs and slashing more than 1,000, 2,000 or 3,000 jobs. Ali is getting the numbers in right now.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes, I just go these numbers. It's worse than we expected.

The unemployment rate is 7.6 rate for the United States. Higher than expected. Here is the bad part. The United States economy lost 598,000 jobs in January. That puts it in the number two spot in history. The only other month where we lost more jobs was in July -- September of 1945, right after World War II when the industrial complex that was used to fight the war was shut down. In that month, we lost 1.9 million jobs. Today, we are learning that in January, the United States lost 598,000 jobs. That makes it the second worst month in history for the U.S.

ROMANS: Actually, the third worst, because in July 1956 --

VELSHI: Sorry, the third worst. My --

ROMANS: We lost 629,000 jobs. I think when you look at the pace of the decline over the past four months, we lost 1.9 million jobs before here. So just in five months, we've lost well over 2.5 million jobs. I think that tells you that the deterioration in the labor market is very difficult here.

ROBERTS: So here is the question that some people might have. Is this a clearing out? Is this corporations across America saying this is what we need to do during the month of January because we're expecting a very bad first quarter? Let's clear the decks right now?

VELSHI: Might be too much though, clearing out. ROBERTS: Or could this be acceleration process?

VELSHI: Well, I think it's a reaction that is a clearing out. I think reaction might be stronger than it needs to be, by a lot of companies saying it could get really bad, so let's clear the decks. Let's make sure we are as nimble as we can. We talked earlier about preserving cash. The problem by doing this, it could actually worsen the situation.

ROMANS: Right.

VELSHI: Because that's not 598,000 people that is possibly 598,000 families, who live in places where although supporting businesses and services like hairdressing and teachers and shops then don't have that business. It tends to multiply. Every lost job has a greater effect than just one person being out of work.

CHETRY: Because if you don't have a job you're clearly not spending.

VELSHI: That's right.

CHETRY: If you don't have a job you have much higher danger of your home going into foreclosure. We talk about the ripple effect. But are we worse than some of those times in our history, where we said this is as bad as we've seen in a generation?

VELSHI: I think it's different. I think our economy is structured different. It's hard to compare. First of all, for most people, does it matter whether my recession was worse for your recession? If you don't have a job and income and you could be losing your home right now, it doesn't really probably help you that it was worse in 1982 or 1935.

ROMANS: Let show you something about the numbers, too. Government added 6,000 jobs in month. We know we're expecting the government to add an awful lot of jobs if the stimulus goes through. When the government is adding jobs in an economy, I mean, to a person, economists say that is not a sign of a strong economy; when the government is the driver of all the economic growth.

Education health services, added 54,000. We've been talking about health care jobs and teachers. These are jobs that there is still a demand for. But you look elsewhere. Construction jobs 111,000 jobs lost. Manufacturing, another 207,000 jobs lost. Retail trade, this is people, you know, the people that you deal with at the retail stores down 45,000. And professional and business services down 121,000. You're seeing a broad different expanse of jobs lost here and that is showing you that it's hitting all different kinds -- all different parts of the economy and it's dangerous.

Now, are they cutting too much? Usually, usually when you see big jobs lost, there is always economists are saying they are cutting too deeply. But what they are telling me is that companies are paralyzed. They are paralyzed because the credit markets are paralyzed; they can't see very far out. What they can see out, is all very dismal. ROBERTS: Yes, the hiring freezes is as big a problem as the number of jobs being shed. But when you look at the sectors, where there have been the most - the greatest number of job losses, how long will those jobs be lost for?

VELSHI: Well, first of all, in manufacturing and construction, we've been -- in manufacturing losing jobs 50 or 60 straight months. I don't even have the number. But it's been going on already for a long time. Construction we've been losing jobs since about the middle of 2007 when the housing boom started to stop. So, we've already been - I mean, if you're in those industries, you've been out of work in many cases, or had very little work for a long time.

Now, how long? That all depends because the stimulus program shows the greatest growth in those areas that we've actually seen the biggest losses in; so construction and manufacturing have seen the biggest losses of all, in the last couple of years. And those are the areas that show some of the biggest gain under the stimulus plan as the White House presents it. We'll have to see what that stimulus plan is. And, by the way, because of the demand that will be created you'll see more jobs, they say, in retail and hospitality and leisure.

CHETRY: The reason I ask you about - have we seen it worse? There because there is still a big debate going. Even our lawmakers cannot agree on what the answer is to get us out of this. Is it tax cuts, is it spending? What worked before?

VELSHI: Well, a lot of these are both done. Spending was done in the recession after the Depression, in the '30s, but there are a lot of people who say that's not actually what did it. That is not actually what got us out of the Depression. It was a war that got so much spending in there. So, in that case the spending did it. So, you can use any argument, any environment.

ROMANS: Every downturn is different. That's the problem. We look at past downturns, but everyone is different.

VELSHI: After Ronald Reagan came into office, when he came into office, tax rates, the marginal tax rate was 70 percent. He cut it to 29 over a few years. Not it's 35.

ROBERTS: We have to take a quick break here. Stay with us, both Ali Velshi and Christine Romans.

Again, the numbers -- number of jobs lost 598,000 during the month of January. The U.S. national unemployment rate now 7.6 percent. In just a moment we're going to take you to a place where the unemployment rate is 3 points higher than that, Lansing, Michigan. We'll talk to the mayor there and find out how he is going to cope with these serious job losses and what lies ahead there.

It's 36 and a half minutes after the hour. We'll be right back.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN BREAKING NEWS. ROBERTS: We continue our breaking news coverage this morning. A new sign the recession is getting worse by the second. A jobs report out minutes ago, sending the unemployment rate across the country now to 7.6 percent, a loss of close to 600,000 jobs. The exact number is 598,000 during the month of January. The fourth worst month in our nation's history.

Joining us now on the telephone is the Democratic mayor of Lansing, Michigan, Virg Bernero, where the unemployment rate is already much worse. And, Mayor Bernero, a lot of people say if you want to see how bad things can get in this country, just look to Michigan. How bad is it there?

MAYOR VIRG BERNERO, LANSING, MICH.: Well, look, it's tough. I mean, we're a GM town, proudly so. But we're working hard. We're digging in. We're reinventing government. We're working harder, faster, smarter. We're trying to go green as quickly as possible. We've got a lot of retraining of our workers going on. We've engaged the faith community. I mean, as mayor, I've pulled together the entire community, and they've responded. We are trying to take care of our neighbors.

And we're leveraging our assets. We have a great, world-class university here, Michigan State University. We're blessed to have Cooley Law School. So, you know, we're leveraging all of our assets. Our community college is involved. Their enrollment is busting at the seams. So, you know, we're trying to make sure that people have the resources to go to college. We just launched a new effort to expand our Hope Scholarship program to help all of our kids in Lansing go to college. We know how important that is.

But look, we need help. We need this stimulus package. We need reinvestment in America and in the American people. The little guy on Main Street has been left behind. You know, I don't blame folks for being suspicious of what happens in Washington because they've seen the bailouts. They've seen the bankers and the Wall Street interests get theirs. The little guy needs help in this country.

ROBERTS: Yes, you know, we should point out, too, that while the unemployment rate across the country is 7.6 percent, there in Michigan it is 10.6 percent. Some economists suggesting that nationwide, the unemployment rate could go to 10.2 percent if the stimulus package isn't written exactly correctly. But if the national rate were to go to 10.2 percent, what would happen there in Michigan?

BERNERO: Well, John, look, this is what we're saying. We're not saying pity us in Michigan. But look, take a look at what's happening here. We have sold out manufacturing. We've sold out the working people and outsourced our standard of living with these trade policies. You know, I think it's admirable that people are going line by line through this bill. They ought to go line by line through the trade agreements and look for fairness for the American worker. You know, there's a reason why the textile industry, the steel industry, the auto industry, industry after industry is being decimated. Furniture-making, all of it going overseas. It's these trade agreements, and we need fair trade for the American worker, because this is a picture of the rest of America. We need to invest in American industry. We better decide if we want any advanced manufacturing in this country. We need a new strategic partnership. These other countries invest in their industries. They invest in R&D. Look at -

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Mayor, hold on a second. Mayor, it's Ali Velshi here. Good to have you here this morning. Ultimately, it's not necessarily trade agreements that lost those jobs. It's the fact that those things are made more cheaply in other parts of the world, which has in a lot of cases helped many other Americans in their standard of living. They've been able to buy cheaper goods. Ultimately, is that going to be the solution, solving trade agreements? What do you need right now?

BERNERO: Let me make it clear, I disagree. I disagree vehemently with you.

VELSHI: I know you do. I got that. I got the fact that you -

BERNERO: It is the trade agreements that put the American worker...

VELSHI: Mayor, let's have a conversation about it.

BERNERO: ... at a disadvantage. We are victims of currency manipulation...

VELSHI: He's verging on an infomercial, Mayor (ph).

BERNERO: ... and the fact that they have health care policy - I'm glad to hear the Obama administration's going to address health care. Because, look, I've been to Korea. I've seen the Hyundai plant. Those workers aren't working any harder. They're wonderful people, the Koreans, but they're not working any harder, any better than American workers...

VELSHI: All right, they're working cheaper, sir.

BERNERO: ... but they have the advantages on their side. Hyundai does not have to pay the legacy costs, the insurance costs that our industry does. They don't have the health care costs, because their government pays for health care. If you don't think that's an unfair advantage, you're kidding yourself.

CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: I think what we know is that it's incredibly complicated. I mean, there are trade policies. There's also issues - I mean, other countries don't have the same labor and environmental standards that we do, you know...

BERNERO: Exactly.

ROMANS: ... and that's a big problem. That's something that people like to talk about when they want to talk about how to do trade agreements going forward. But there's also the other camp that is worried about protectionism at a time when the global economy is also suffering. How do you -- BERNERO: You know what? We have - protectionism - please. We have bad trade agreements badly enforced. And the American worker is suffering for it. I've heard from workers all over the country. Furniture-making, textile, steel, you name it. The American worker has been left behind, and it's the trade agreements that did it, because we - and Wall Street and Washington got away with it. It's an unholy alliance between Washington and Wall Street...

ROMANS: Mayor, are you hearing from -

BERNERO: ... and the American worker's been left behind. And that's why they have questions about this stimulus package.

ROMANS: Let me ask you, are you -

BERNERO: It's about time we put the American worker first.

ROMANS: Are you hearing what you want out of the discussion in Washington as they're talking about trade agreements and talking about the playing field for American workers around the world...

BERNERO: No, no...

ROMANS: ... or do you think that's a conversation that's not happening?

BERNERO: ... I'm hearing a lot of partisan bullcrap is what I'm hearing. All right, I'm hearing a lot of partisan bickering, more of the same...

VELSHI: All right, of what you are hearing, Mayor...

BERNERO: ... and it's about time we see some bipartisan leadership...

VELSHI: Mayor.

BERNERO: ... that put the American people first.

VELSHI: Mayor, excuse me for a second. Of what you're hearing, of what you're hearing, the idea of the debate between stimulus through spending or stimulus through tax cuts, what of those two choices would help Lansing more?

BERNERO: We need both. We need both. We need tax cuts delivered directly to the American worker. We need re-education and retraining. I want to hear more about education and retraining, because these workers need it and we need stimulus right now. Look, I had to borrow $3 million, and Lansing is not alone. We had to borrow $3 million to make our roads just barely passable. We need major infrastructure investment in roads and bridges, but we also need investment in the technology of the future. But then we need fair- trade agreements so that our wonderful productive workers can be effective and efficient and productive.

I'm tired of hearing the American worker beat up upon and people told, you need to be competitive...

ROMANS: Mayor.

BERNERO: ... you need to be competitive. What they're really talking about is, cut your wages, cut your benefits, work for nothing like some peasant somewhere else in the world. Well, I'm sorry. I'm tired of seeing the American standard of living brought down to the lowest common denominator. We need fair-trade agreements fairly enforced.

KIRAN CHETRY, CNN ANCHOR: What about the fact that people just simply aren't buying your cars? You have Chrysler down 55 percent, General Motors sales tumbling 50 percent, For 42 percent. I'm not saying it's much better right now out there, but people can't afford to buy new cars, so where does that leave Lansing?

BERNERO: Well, there's a credit crunch - part of that is Wall Street is killing us. They've brought this credit crunch. I've talked to car dealers. Believe me, I'm on this subject, and the credit crunch is killing the auto industry. Most people buy cars on credit. Think about it. Most people don't go in there with cash. Well, they can't get the credit. That's killing the auto industries. We're making better cars than ever before. The Motor Trend Car of the Year in 2008 was the Cadillac CTS made right here in Lansing, Michigan. Don't tell me we're not making cars that people want. And these industries, we're transitioning into the greener cars of the future when they were dealt this walloping blow by Wall Street. And it needs to be fixed.

And I'm telling you, we better make a decision. It's not just about cars. We better make a decision if we want to have any advanced manufacturing in this country. And when you give up advanced manufacturing, you are giving up a lot. I think you're mortgaging your future. You're giving it away. We need a new strategic alliance between the federal government...

ROMANS: But you know what, Mr. Mayor?

BERNERO: ... and manufacturing concerns in this country if we're going to have any manufacturing prowess left.

ROMANS: You will hear from a lot of decision-makers, though, that manufacturing is very twentieth century, and this is a service economy, and that we have to innovate, and we have to come up with the next thing that's going to move the economy forward. How does that square with Michigan and its labor base?

BERNERO: With all due respect to you, that, what you just said, I've heard it before. I'm not saying this about you. That is absolute bull. That has been perpetrated by Wall Street, the idea that we could be a service economy, it is absolute nonsense. What are you servicing? How can you service? What, are we going to serve each other hamburgers? That is total, utter nonsense that Wall Street has been spewing for years. That's part of the unholy alliance. We need manufacturing in this country. Manufacturing is at the apex of the economy. When you give up advanced manufacturing, you are giving up your future.

(CROSSTALK)

BERNERO: What we need is a new strategic partnership to build the green cars of the future. We should be building the green cars of the future for export to the world.

ROBERTS: Well, let me ask you this question, Mayor. It's John Roberts back again. You know, in terms of this idea of retraining and all of that, there are many people who believe that the jobs in the auto industry, many of them are gone forever. So, in terms of retraining, and particularly people there in Michigan, which has been not just a company town but really a company state, and let's just, if we could just for a second leave the argument about trade agreements out of this, what are you retraining people for in Michigan, help people out who are out of work? What are the jobs of the future there?

BERNERO: Well, even while Michigan was losing jobs, we gained, under Governor Granholm's leadership, we gained about 50,000 jobs in the new green economy. Our community college, our great community college, Lansing Community College, where they have about 30,000 students, record enrollment, they are training people. They have a new alternative-energy curriculum, where they're training people to do energy audits. They're training people in the new future. You know, we're building photovoltaic systems and the turbines, the wind turbines. And so, there needs to be training. If we're going to retrain autoworkers into the green economy, it's that type of training that can take place. And that's a burgeoning industry in Michigan.

Now, I read an article in "The New York Times." I understand that even that industry, the green industry, is now facing a downturn with the rest of the economy. But look, that's where the future is. We know that we've got to convert a lot of our buildings, including our building here, City Hall. We've got to convert a lot of our buildings to more green geothermal and reduce our carbon footprint. So, that's a big part of the future.

But I also think the green cars. You know, we're looking forward to the Chevy Volt, the new electric car by GM. There'll be battery technology with that. And so, again, we want to build the cars of the future, the greener cars that are and will be in demand. But that's going to take a strategic partnership. I assure you that China - they sold 10 million cars last year - I assure you the Chinese government is part and parcel of that. They're involved in their industry. In Korea, the government is involved in their industry. We need to have a government - we need a strategic partnership...

(CROSSTALK)

BERNERO: ... that builds the future of this green technology and this green industry.

ROBERTS: Mr. Mayor, we've got to run, but thanks very much for talking to us this morning.

BERNERO: My pleasure. Thank you very much.

ROBERTS: Obviously, there is an indication of some of the problems facing this nation right now and some of the problems that will continue to grow -

ROMANS: And the passion.

ROBERTS: - as this economy continues to go down the toilet.

CHETRY: I admire his passion.

ROBERTS: And the passion, too.

CHETRY: He is fighting for his constituents.

ROMANS: That's right.

VELSHI: There's a lot of information in there that the mayor would do better to see a broader view on. He may be speaking to his constituents, but the rest of the world manufacturers things cheaper and that makes it cheaper for me to buy in the United States. So, I think we have to take a broader view than the mayor's taking.

ROBERTS: And we have to take a break. We will be right back. It's 10 minutes now to the top of the hour.

ROMANS: Ali and I are going to duke it out in the break.

VELSHI: National security issues?

(LAUGHTER)

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN BREAKING NEWS.

CHETRY: It's 52 minutes past the hour. We are having a vigorous and lively conversation this morning.

(LAUGHTER)

ROBERTS: It's a good thing that you and I are sitting between these two this morning.

CHETRY: Yes, because there is a lot of passion. The news broke, within the last 20 minutes about employers; government saying that employers slashed payrolls by nearly 600,000 just for the month of January. This is the most we've seen since 1974. And the unemployment rate is now at 7.6 percent. That was actually worse than the economists were thinking.

So a lot of questions as the Senate is taking up the stimulus bill. What is the best move? And where do we need to go to turn this economy around?

ROMANS: And what do we do now? We know that these numbers are ugly. We know -- Ali was pointing out that December's number was even uglier than thought. We know that throughout the recession now we've lost 2.6 million jobs and about half of them in just three or four months. That shows you that the deterioration is pretty rapid.

We know the president wants to save or create 3 million to 4 million jobs. Folks, put that into context. The last week of January, 626,000 people lined up for unemployment benefits for the very first time, and creating 3 million jobs is a little dent in what is happening here.

ROBERTS: You said something earlier that Ali took issue with. And you said economic security is national security.

ROMANS: Yes.

ROBERTS: I fully believe that as well. You don't. Why?

VELSHI: I believe economic security is national security. I don't think sustaining a manufacturing base that hasn't worked for the United States is national security. If we need the ability to manufacture things we can do that. The issue is that it is national security, but I think it is so because we owe the rest of the world money and they hold our debt, so we have no leverage over anybody. When we ask China to do something they will say, you know what, we don't really like your debt that much so it will cost you a lot more.

I think in a very broad sense it absolutely is. I think the mayor of Lansing was arguing that if we don't have manufacturing plants for things like cars is a danger. And I think that is fear mongering and unnecessary in this environment.

ROMANS: I think there needs to be some level of healthy manufacturing in any advanced economy. It is just - you must have that in case of the unforeseen event. You also don't want other countries to be able to hold you hostage should the need --.

(CROSS TALK)

CHETRY: All right. We're going to take a quick break because we have to squeeze it in. And we're gong to continue this conversation in just a moment.

(COMMERCIAL BREAK)

ANNOUNCER: This is CNN BREAKING NEWS.

ROBERTS: Three minutes now to the top of the hour. Bad jobs report: 598,000 jobs lost during the month of January. Rising the U.S. unemployment rate to 7.6 percent.

We were talking about manufacturing. I just want to make a quick point before we wrap up. That I have long argued with a good buddy of mine that the hollowing out of the American manufacturing industry is something that will come back to haunt this country and we may, in the end, be as the in the words of Christian Bale --

VELSHI: You're not trying to make a point, but trying to make a fight with me. But that's OK. Let me tell you -

CHETRY: Stimulus, stimulus, stimulus.

VELSHI: Right, OK. So the jobs that we have lost in the last few -- here is something we can agree on. The lost we've lost the last few years have construction and manufacturing. Under the stimulus plan, the White House says, and this is up to you whether you believe the or not, there will be growth in construction, there will be growth in manufacturing, growth in retail jobs and growth in the hospitality sector. Think about that if you're looking for a job or looking to retrain.

CHETRY: 15 seconds, Christine, last point.

ROMANS: In the stimulus there is going to be a little help for people losing their jobs and a lot of people are. There is going to be $25 more in your unemployment check and there is going to be a longer term you can get benefits. That is something that is in both version of the stimulus.

ROBERTS: Great discussion this morning, folks. Thanks so much for that.

VELSHI: We'll continue this after the show.

CHETRY: All right. See you back here next Friday.

ROBERTS: Good show, put up your dukes.

CHETRY: That will do it for us. Thanks so much for being with us on this AMERICAN MORNING. Have a great weekend.

ROBERTS: CNN NEWSROOM and Heidi Collins takes over our breaking news coverage, right after this break. We'll see you again on Monday.