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Treasury Secretary Geithner to Announce Drastic Changes in the Financial Bailout; Obama Pushes Back Against GOP; A-Rod Comes Clean, Admits to Drug Use; Will the Stimulus Really Work?

Aired February 10, 2009 - 07:00   ET


JOHN ROBERTS, CNN ANCHOR: It is now coming up to the top of the hour, and here are this morning's top stories. After almost three decades of the diplomatic silent treatment, Iranian President Mahmoud Ahmadinejad says his country would welcome face-to-face talks with the United States if they are done in a, quote, "Fair atmosphere with mutual respect." The remarks come just hours after President Obama said the U.S. is looking for opportunities to talk with Iran. And Mr. Obama said he still has deep concerns with Tehran's actions.

In Australia, one official says the death toll from the scorching wildfires will top 200. Officially, the toll now stands at 181. But official say another 50 bodies have yet to be identified.

Thousands of homes are gutted and more than 900,000 acres burned. Since officials suspect arson, Australia's prime minister calls the disaster "murder on a grand scale."

A story developing right now, your money on the line. Treasury Secretary Timothy Geithner is expected to announce drastic changes to the $700 billion financial bailout. Wall Street helped get us into this mess, he says. Now the Obama administration hopes that it can be part of the solution.

Suzanne Malveaux has got the breaking details on that coming up in just a moment.

In prime time and on the record, President Obama making the familiar walk into the White House's East Room, speaking to the nation, promising four million new jobs saying that we need action now on his $800 billion economic recovery package. It faces a final vote today. The president gave key details of what's in the bill in his first nationally televised Q&A.


BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Last Monday, more than a thousand men and women stood in line for 35 firefighter jobs in Miami. Last month, our economy lost 598,000 jobs, which is nearly the equivalent of losing every single job in the state of Maine. And if there's anyone out there who still doesn't believe this constitutes a full-blown crisis, I suggest speaking to one of the millions of Americans whose lives have been turned upside down because they don't know where their next paycheck is coming from.

And that is why the single most important part of this economic recovery and reinvestment plan is the fact that it will save or create up to four million jobs, because that's what America needs most right now. But as we've learned very clearly and conclusively over the last eight years, tax cuts alone can't solve all of our economic problems, especially tax cuts that are targeted to the wealthiest few Americans. We have tried that strategy time and time again and it's only helped lead us to the crisis we face right now.

The plan's not perfect. No plan is. I can't tell you for sure that everything in this plan will work exactly as we hoped, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans. And my administration inherited a deficit of over $1 trillion. But because we also inherited the most profound economic emergency since the Great Depression, doing little or nothing at all will result in even greater deficits, even greater job loss, even greater loss of income, and even greater loss of confidence. Those are deficits that could turn a crisis into a catastrophe, and I refuse to let that happen. As long as I hold this office, I will do whatever it takes to put this economy back on track and put this country back to work.


ROBERTS: White House correspondent Suzanne Malveaux joins us now live from the North Lawn at the White House.

And Suzanne, the president appears to have three moderate Republicans on board for this afternoon's official vote in the stimulus package but for the rest of them, he didn't have many kind things to say last night. Is he trying to gain back the upper hand here on the stimulus?

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You know, he certainly is, John. And what he's doing is he's saying that the more he's in touch with the American people the more the hope is that he will alienate those Republicans who are not on board with the economic stimulus plan. And he's really trying to take the debate out of Washington here away from this food fight portrayed between the Democrats, the Republicans, to say look, I understand what the American people are going through and therefore, I am the one who has the right answer, the right solution.

We saw this in Elkhart, Indiana. He was able to use the example of that town numerous times last night in that news conference. It almost sounded like an infomercial, but he was talking about the pain that people are feeling. He's trying to show he's in touch.

The same thing is going to happen with Fort Myers, Florida, obviously a place, the highest foreclosure rate in the nation. He, again, is going to say I'm talking to real people. I understand what they're going through. You need to push for it in this economic stimulus package and he believes the Republicans could potentially look out of touch -- John.

ROBERTS: Suzanne, you also broke some news overnight on plans for the second half of that bailout money. This is the original $700 billion bailout, the remaining $350 billion of that. Any significance to the timing of the announcement later on this morning?

MALVEAUX: Certainly, John. Obviously, the White House wants to get in front of all of this. They want to show the American people that, look, despite the $350 billion that was spent before and many people believe averted a financial crisis, there is still no record of where that money went. So they want the American people to have faith and members of congress, quite frankly, who are, you know, holding their nose when they actually vote for the economic stimulus package today, to get a sense that look, they're going to do things differently. There'll be more accountability. There'll be more transparency. Perhaps they'll be able to ease the flow of credit, all these things that people talk about that they're very concerned.

They are trying to at least address this in what they call this multi-legged stool, one being the economic stimulus, the other credit flow. And then finally, of course, dealing with the regulatory system that comes on later on down the road, John.

ROBERTS: All right. We'll be looking forward to your reporting on that a little bit later on this morning, and we will see you again soon here on AMERICAN MORNING.

Suzanne Malveaux, thanks very much.

And by the way, you can see the president's trip to Fort Myers, Florida, live on air on CNN, and also live at That would be at noon today -- Kiran.

KIRAN CHETRY, CNN ANCHOR: All right. Well, Christine Romans joins us now with a look at the bailout changes that the treasury secretary could announce today. This is part two, if you will...


CHETRY: ... 350 billion, right? The second part?

ROMANS: Part two. This is part two.

CHETRY: And hopefully the government's learned.

ROBERTS: Second roll of the dice.

ROMANS: I know and, you know, it's interesting, because it's -- you know, the treasury secretary basically there's a little phrase, you know, you're juggling chainsaws. He's sort of juggling flaming chainsaws here. A lot of different -- a lot of different parts in motion here. It's all very dangerous trying to make sure that all works out.

John loves that. Suzanne --

ROBERTS: It's like juggling flaming chainsaws with bottles of nitroglycerin attached to them.

ROMANS: Suzanne talks about --

ROBERTS: Live tigers around you!

ROMANS: But listen, John, come on. Suzanne keeps talking about the multi-legged stool, you know, I mean, and it says another good way to look at it.

We've got the stimulus. We've got the TARP, the bank bailout. Now, we've got TARP part two, which is trying to figure out to get more transparency, more accountability and try to get the banks to lend the money and find out where the money is going.

A lot of my sources are saying they've got to get accountability to the process and convince the American people that they know what they're doing with that money. Because frankly, we might need more money in the banking system. You know, if it doesn't work, there's a lot of hope going on, about hoping that this is the aim of something but is it really going to work?

Also, we're going to learn more about the foreclosure part of this. What is the administration going to do to try to prevent foreclosures? Timothy Geithner, the treasury secretary, will probably release some details today about that today, and also this public/private partnership. How are you going to get Wall Street to be part of the solution after it was clearly part of the problem?

The president last night saying that Wall Street and its high risks with borrowed money is what drove us into this recession, and now you're going to be asking Wall Street to help with big government and taxpayer support I'm sure to get us out of the problem. So it's a tough situation, it really is.

CHETRY: All right. And you were saying earlier that no one still knows exactly what the problem is, because the problem keeps shifting.

ROMANS: We don't know what the solution is the problem. You know, and they're going to try a comprehensive approach. What I wish more than anything is we could say let's buy $100 billion of confidence. Let's put that in the stimulus. I'd like to buy a $100 billion of confidence. You can't do that. They're trying to buy and do all these other things to restore confidence. We don't know it's going to work.

CHETRY: All right, Christine.

ROBERTS: Not just chainsaws that they're juggling but flaming chainsaws.

ROMANS: Stop. I'm trying to make it easy.


CHETRY: This is the point that we've gotten to, though. We have to try to find new and creative ways to say we're in deep trouble.

ROMANS: Juggling flaming chainsaws on the three-legged stool or the two-legged stool. CHETRY: Exactly.

ROBERTS: Suspended by a very thin wire.

ROMANS: On the edge of a cliff.

CHETRY: Christine, thanks.

Well, the president has been on an aggressive p.r. offensive trying to sell his economic plan. So, are you buying it?

Well, coming up at 7:30, Christine is back. She's going to help us separate facts from fiction in the president's first prime time news conference.

ROBERTS: As the stimulus vote looms in the Senate, the president takes another shot at those on the other side of the aisle. We'll look at the ongoing partisan divide over Mr. Obama's stimulus plan coming up.

It's eight minutes after the hour.

CHETRY: A-Rod comes clean.


SELENA ROBERTS, "SPORTS ILLUSTRATED" REPORTER: I flat-out told him candidly what the evidence is we had, that he tested positive for anabolic steroids.


CHETRY: His legacy questioned. And for many fans, the truth hurts.


UNIDENTIFIED MALE: He should own up to it a long time ago. Why hurt the New York fans and lead them on and then have this happen?


CHETRY: Why baseball's biggest and most expensive star decided to cheat and what lies ahead for the Yankees' third baseman, ahead on the "Most News in the Morning."



OBAMA: What I won't do is return to the failed theories of the last eight years that got us into this fix in the first place, because those theories have been tested and they have failed.

(END VIDEO CLIP) CHETRY: Welcome back to the Most News in the Morning. President Obama pushing back against the GOP for what he calls their resistance to work with him on the stimulus bill. So with the Senate voting on the plan in just hours, can the president get real bipartisan support and does it matter?

Joining me now is Republican strategist and CNN contributor Ed Rollins.

Great to see you, Ed.

ED ROLLINS, REPUBLICAN STRATEGIST: Good morning, how are you?

CHETRY: We had a chance to hear a lot of what he said yesterday and the two points that he brought up. First of all, he said listen, again, these were failed policies for the past eight years. And secondly, you have to remember, I inherited this mess. So he seems to be trying to remind the American people that it was the Republicans that got us into this mess.

ROLLINS: There are also Democrats who controlled the Congress for the last two years and left $1 trillion debt and haven't finished the budget of last year which has the trillion-dollar debt. You know, I think the bottom line is pointing back is not going to matter. What is going to happen is pointing forward.

He clearly has blamed the Republicans and they're going to become his whipping boy which puts them in a perfect position. In their perspective, they don't feel they're a part of this process.

Chairman Obey didn't bring any Republicans in that put the bill together. They have their senators. They have three of them right now. That's enough to give them their 60 votes in the Senate, and the reality is hopefully this program will work.

CHETRY: I want to ask you about that because you said they haven't felt like they were part of the process. Do you think that Barack Obama, as president, his visits to the House inviting some of the GOP leaders in, adding in tax cuts, knowing that it would be something important to the GOP, none of that was bringing them into the process?

ROLLINS: Well, obviously, he's reached out and the tone has been very important. I mean, he certainly -- he certainly has talked to them. But it's a philosophical difference and to basically go back and blame everything that's happening in America on the policies of the last eight years, including last night he talked about entitlement. The difference here and where there was no transparency last night, he basically said the federal government is the only entity that can fix this thing. He didn't say the federal government only has the credit line to go borrow from the Chinese a billion dollars or trillion dollars in order to basically bail out states and what have you. I think that's the fundamental issue here.

CHETRY: Is this true opposition because you're a straight- shooter in terms of the core feelings of fiscal conservatism? Or is part of this on the GOP a political opportunity looking ahead to 2010, saying, you know what, if we're not out of a rut in 2010, this is a great way for us to get (INAUDIBLE) up?

ROLLINS: I don't think anybody wants to continue down this path. I think Republicans, Democrats alike are hurting. I think it's clearly an approach though, and I think the approach is that Republicans have always felt that letting you keep your own money, spending it, investing it, helps stimulate the economy, not giving it to Washington to redistribute.

CHETRY: I know that there have been competing plans. I know Senator McCain put one out. I think that the House GOP also had a plan. But despite -- in addition to just opposing what's on the table right now, what do you think if the Republicans had their wish list they would want to do in terms of helping us get out of the rut?

ROLLINS: I think they would focus really on small business. How do you create jobs on small business? One of the things that the president threw down last night is he want to create four million new jobs, most of it, 90 percent in the private sector.

That's a worthwhile goal but there's really not much in this bill that people see that's going to do that. There's nobody explaining how that happens. What is the formula? How does it make it happen?

There's a lot of government jobs and a lot of government spending, but there's not anything that basically makes me go out and start a small business and hire people and put people back to work.

CHETRY: And what about the foreclosure situation, as more and more people lose their jobs?

ROLLINS: That's critical. And part of that is once again, people overborrowed, can't make their foreclosure. Now, the federal government is going to overborrow. We have a $10.7 trillion debt today. $4 trillion has been given by the Federal Reserve to the banks in the last two months. The banks are the ones that have to loan. They're not going to loan and basically the federal government has to do something to make that happen.

CHETRY: All right. We'll hear what Treasury Secretary Tim Geithner says today about that very issue as well. Always great to get your take.

ROLLINS: Thank you. Thank you.

CHETRY: Ed Rollins, thanks.

ROLLINS: My pleasure. Thanks so much.


ROBERTS: The a-bomb from A-Rod. The man who could one day own every big time record in baseball history admits even more than he needed to about performance-enhancing drugs. What that could mean for the player, the future of the game, and for the kids who wear his number 13.

Plus, from Motown to movie town. "Dirty Harry" trying to drag Michigan out of a depression. How the state is sweetening the deal so more stars will follow.

And like escaping from hell, a wall of flames moving too fast to flee. We're live on the scene as stories emerge from the ashes of an unthinkable disaster in Australia.


UNIDENTIFIED MALE: It's on fire. It's gone. Look, she's going. Everyone has lost everything.

There's our house, baby. It's gone. Everything's gone.




OBAMA: If you're a fan of Major League Baseball, I think it tarnishes an entire era to some degree. The thing I'm probably most concerned about is the message that it sends to our kids.


ROBERTS: White Sox fan President Obama even weighing in on the latest bombshell in the Major League Baseball steroid scandal, and this one could hurt the most.

Alex Rodriguez, the game's brightest star, admitted that he took a banned substance for three years while playing with the Texas Rangers in an exclusive interview with ESPN's Peter Gammons.

Jason Carroll has got the highlights for us this morning. This is kind of a real shocker because people thought that, you know, if you broke Barry Bonds' record, the record will finally be clean. And now people are wondering if there's going to be an asterisk beside it.

JASON CARROLL, CNN CORRESPONDENT: Yes. It looks like there very well might be. It's going to be very interesting to see what kind of reception he gets during opening day here for the Yankees in April.

Rodriguez says he's still not sure what kind of steroid he was taking. What he is sure of is why he did it. Rodriguez says he gave in to pressure to perform.


ALEX RODRIGUEZ, ADMITS USING BANNED SUBSTANCE: I did take a banned substance, and you know, for that, I'm very sorry, and deeply regretful.

CARROLL (voice-over): He was widely known as one of the clean players, an athlete who rose to greatness without using illegal performing enhancing steroids. Now, Alex Rodriguez says he's coming clean.

RODRIGUEZ: When I arrived in Texas in 2001, I felt an enormous amount of pressure. I felt like I had all the weight of the world on top of me, and I needed to perform and perform at a high level every day.

Back then, it was a different culture. It was very loose. I was young. I was stupid. I was naive. And I wanted to prove to everyone that, you know, I was worth, you know, in being one of the greatest players of all-time.

CARROLL: Rodriguez admitted using steroids over a three-year period, beginning in 2001, while playing for the Texas Rangers. In 2007, in an interview with "60 Minutes," he denied ever using steroids.

KATIE COURIC, CBS ANCHOR, "60 MINUTES": For the record, have you ever used steroids, human growth hormone or any other performance- enhancing substance?


CARROLL: This past weekend, "Sports Illustrated" released a story alleging he was one of 104 players who tested positive for steroids in 2003.

SELENA ROBERTS, "SPORTS ILLUSTRATED" REPORTER: I flat out told him candidly what the evidences we had, that he had tested positive for anabolic steroids. He said, you know, "You'll have to talk to the union."

CARROLL: Rodriguez went public with his apology after a number of nasty headlines calling for him to come forward and set the record straight.

RODRIGUEZ: It was such a loosey-goosey era that I'm guilty for a lot of things. I'm guilty for being negligent, naive, not asking all the right questions. And to be quite honest, I don't know exactly what substance I was guilty of using.

CARROLL: Rodriguez is on course to break nearly every major offensive record in Major League Baseball, including Barry Bonds's home run record. Now, his record in question as well.

UNIDENTIFIED MALE: We all make mistakes. I'm, you know, I'm a fan of A-Rod, so I'm going to say we should just forgive him and move on.

UNIDENTIFIED MALE: He should own up to it a long time ago. Why hurt the New York fans and lead them on and then have this happen?


CARROLL: Rodriguez is considered by some in baseball to be one of the best all-around players of all-time. Now there is always going to be that question mark by his record. We'll have to see.

ROBERTS: What a shame. Jason, thanks so much -- Kiran.

CHETRY: Right. As well with the Senate set to vote on the stimulus in just a matter of hours, what could the bill mean for your bottom line? Were the president's claims accurate? Our Christine Romans is dissecting some of the remarks from the president's news conference.

Hey, Christine.

ROMANS: Kiran, can we save or create three to four million jobs over the next couple of years? And is it really the worst economy since the Great Depression? We'll tell you right after the break.



OBAMA: Despite all of this, the plan is not perfect, no plan is. I can't tell you for sure that everything in this plan will work exactly as we hoped, but I can tell you with complete confidence that a failure to act will only deepen this crisis as well as the pain felt by millions of Americans.


ROBERTS: Welcome back to the Most News in the Morning. The president defended his stimulus bill during his first prime time news conference last night but also admitting there that certain parts of it may not work out as planned. So how much of this $800 billion plan is really just a roll of the dice?

Joining me now with more on this and other things regarding the stimulus is White House Press Secretary Robert Gibbs.

Robert, it's great to see you this morning.


ROBERTS: What the president said there last night, "I can't tell you for sure that everything in this plan will work exactly as we hoped," how much of this is a crapshoot?

GIBBS: Well, look, John, economists say that we've got to have a plan that meets the size and scope of the challenges that we face. That's what this economic team put together, and that's what's moving through Congress.

We know that if we invest in infrastructure it will create jobs. We know that if we put money back in the pockets of middle class families, that they'll spend that money and hopefully get this economy moving again. But obviously, there are a lot of moving parts to this. We have to have a financial stability plan that Secretary Geithner is going to outline. We have to deal with the home foreclosure crisis. We've inherited a lot of big challenges but we're meeting those big challenges with some big ideas to get this economy moving again.

ROBERTS: I want to ask you about Secretary Geithner's plan in just a second, but let me ask you about the test vote last night. You barely made it across the finish line. You had three moderate Republicans, Collins, Snowe and Specter on board. Why couldn't you get more Republicans to support this plan? I mean, your initial target was to have 80 senators on board.

GIBBS: Well, I'm not sure who said 80. You've never heard, John, the president say that we wanted 80 votes. Look, we got more than three-fifths of the Senate last night to support a plan to get this economy moving again.

Our test, though, John, isn't how many votes we get in the Senate or how many votes we get in the House. Our test is how many jobs we can create for the American people. That's what they care about.

When we visited Elkhart, Indiana, yesterday, which has watched the unemployment rate triple in just one year, they weren't worried about committee ratios or vote counts, they're worried about how this help is going to help them and whether it's going to create jobs that will put their families back to work.

ROBERTS: However, this administration had made a point about trying to seek a broad bipartisan consensus on this plan and you didn't get it.


ROBERTS: But the president last night --

GIBBS: Well, look, you know what, John, as the president said, "Old habits in this town tend to die hard."


GIBBS: He's not going to stop reaching out to Republicans as well as Democrats to listen to their ideas to solicit their support to get this economy moving again but we're happy that last night, Republicans did join with Democrats to move this process forward.

ROBERTS: So despite the somewhat strident tone that he took last night in the press conference, this is not the end of your bipartisan outreach programs?

GIBBS: Look, John, we understand if we're going to get stuff done in Washington, we've got to change the way it works and that means bringing Democrats and Republicans together. He wasn't doing that outreach just for a photo-op. It's something that he means and something that he'll continue to do.

ROBERTS: You know, Paul Krugman, columnist in the "New York Times" wrote a column earlier this week about the perils of bipartisan outreach in which he said, "Many people expected Mr. Obama to come out with a really strong stimulus plan reflecting both the economy's dire straits and his own electoral mandate. Instead, however, he offered a plan that was clearly both too small and too heavily reliant on tax cuts trying to get support from the other side."

He says you got nothing in return. The suggestion that you compromised your initial instincts and that the plan didn't turn out as well as it could have and you just said, we're going to go for a straight party line vote here, try to pull off a couple or three moderate Republican senators and get this thing across the finish line.

GIBBS: Well, John, as you saw that if we just went party line vote we wouldn't get what we needed to through the Senate. I've seen people --

ROBERTS: That's right, peel off of, you know, two or three moderates.

GIBBS: Right. Right.

But look I've seen people say that we put tax cuts in our plan to get Republicans on board, the tax cuts that were originally in our plan almost all of which we campaigned on, and I don't remember John McCain thinking those tax cuts were such a good idea last October and last November. But what I can tell you is that the economic team put together a plan that they think is most likely to get our economy moving again, get jobs created, get money back into people's pockets. That's what we're trying to work through Congress. We've had some unprecedented action in just three weeks of this administration, and I think with a little luck we'll get something through here pretty quickly...

ROBERTS: Robert --

GIBBS: ... that will get people working again.

ROBERTS: Sir, we're running out of time. I really do want to ask you about Secretary Geithner's plan today. One of the most intriguing things that we're hearing about is this $50 billion to $100 billion in mortgage foreclosure relief. Can you give us the details of that?

GIBBS: Well, John, I don't want to get ahead of the secretary on this. It's a big speech for him but I do know that, for instance, the place we're going today, the president's going to visit Fort Myers, Florida, had the greatest rate of home foreclosure of any area in the country last year. We can't get our economy moving again if two, three, five or ten million homes are being foreclosed on. You'll see that as a big effort of this administration to ensure that people --

ROBERTS: Can you give us a hint of how it will work?

GIBBS: I'm going to let the secretary do that a little bit later this morning.

ROBERTS: All right. Robert Gibbs from the White House this morning. Thanks for talking with us.

GIBBS: Thanks, John. ROBERTS: Great to have you on the program. It's the first time since you become press secretary and hopefully it won't be the last.

GIBBS: We're happy to do it. Thanks, John.

ROBERTS: All right. See you soon.

GIBBS: Thank you.

CHETRY: Coming up on 7:30 here in New York, the president hitting the road again today. He's heading to Fort Myers, Florida with his stimulus sales pitch, and President Obama is also making a lot of claims about what the bill will do. So, are they all accurate?

Well, our Christine Romans is doing some fact checking and she joins us now with more.

Hi, Christine.

ROMANS: Hi there. Good morning.

CHETRY: Thanks for joining us.

So a lot was said yesterday.


CHETRY: And so you're taking a look at some of them. One of them was save or create four million jobs. How realistic is that and how will this plan do it?

ROMANS: The president has again and again and his team have said that they want to save or create three to four million jobs over the next couple of years and it's outlined very specifically where they think all of those jobs are going to come from but a couple of things to keep in mind here. You need to have 100,000 to 150,000 jobs created every month just to keep up with the working age population.

So some folks are saying three to four million jobs is really underpromising. They really need to over deliver on that. They need to come up with even more than that. How do we even know if they can do it? How do you measure whether you saved any jobs? Even the president's own team in its big report on how it was going to create these jobs said you know there is considerable uncertainty in our estimates, both the impact of the package on GDP and the relationship between higher GDP and job creation are hard to estimate precisely.

They went on to talk about a significant margin of error for trying to predict job creation. So the president is predicting three to four million jobs but it's going to be very difficult to pinpoint exactly how many jobs are saved.

CHETRY: Is that considered a stimulus when we're losing, I mean, January alone we lost nearly 600,000 jobs.

ROMANS: It's considered stopping the bleeding. I think three to four million jobs is considered stopping the bleeding.

CHETRY: All right. He also talked about the importance of modernizing our health care system saying that will save billions of dollars and also countless lives.

ROMANS: I've done actually a lot of work on this over the past few years, and this is something that people in I.T. and also people trying to hold down health care costs talking about for at least 10 years, one thing I know that is certain, that a lot of people say that they will be able to save countless. They will save thousands of lives if they can modernize health records because the problems and the mix-ups with human health records and the wrong prescriptions and the like, it kills.

CHETRY: A lot of medical mistakes.

ROMANS: Medical mistakes. Will it save money? That's a little less clear right now.

CHETRY: Yes. And the third one that we want to highlight is what the president said yesterday when it comes to inheriting the most profound, as he put it, economic emergency since the Great Depression. And we heard this tossed around a lot out there, in political circles, this is the worst we've seen since the Great Depression. How do we know and how do we measure that?

ROMANS: Well, one thing, many economists say it's the most uncertainty since the Great Depression and it's the most sort of global pain for the economy in 60 years. But when you look at how it feels, sort of the misery of it all, when you look at the jobs market that's a really big component of this and it's the worst jobs market since the 1980s.

Back in 1982, you had an unemployment rate of 10.8 percent. So this great debate among some people about how it feels to us about whether it feels the worst right now since the Great Depression or if we go back to the '80s, and that's what it feels like. A lot of economists tell me what we're trying to do with all of these different measure is we're trying to prevent the worst thing since the Great Depression.

CHETRY: And we're also looking ahead later today to Treasury Secretary Tim Geithner. He is going to be outlining how the second bailout, if you will, is going to happen, the next $350 billion. You jokingly referred to it as trying to juggle chainsaws?

ROMANS: I'm not sure if he'll have flaming chainsaws there. I would think John did a very good job trying to get Robert Gibbs to give you more details on the foreclosure. We found some pictures that actually - it might be John Roberts. Actually -

CHETRY: Is that Toronto?

ROMANS: But you know people he's only got one chainsaw that's flaming. You know, I think it's more like three flaming chainsaws but still this is the closest we could get to what the Treasury Department is trying to do right now.

CHETRY: That's right.

ROMANS: Or John Roberts.

CHETRY: Perhaps you could be seeing that same video except out of Washington, D.C..


ROMANS: John, is that you? It says crazy comedian juggler.

CHETRY: Of course, it's not him. His biceps are way bigger than that. Christine, thanks.

ROMANS: You're welcome.

ROBERTS: There you are. Well, the assembly lines, to lights, camera, action. Some Michigan natives try to bring Hollywood home with them. Can Dirty Harry save the worst economy in the country. We'll find out. It's 34 minutes after the hour.


ROBERTS: Welcome back to the most news in the morning. Air traffic slowly starting again this morning out of the French capital. Authorities in Paris had to shut down the city's three airports for 14 hours because of dangerously high winds. The wind storm could keep air travel backed up across Europe.

Meanwhile officials in Australia say the death toll in the inferno across the southeastern state of Victoria will top 200 people and even this entire town still burns, survivors are sharing their harrowing stories of utter loss and devastation.


VOICE OF BRAD PRICE, RESIDENT OF KINGLAKE, AUSTRALIA: The fire front pass (INAUDIBLE) the yard, everything's gone. I'm over at Collins's house, which is next door. Every house around is burnt down. There's Trevor's house over there. This is out the back. I've burned all my face, trying to fight the fires. I did as much as I could outside. I saved my dog.

That's all. We've lost everything. I lost my grandparents, I've lost everything. I've lost everything. This is next door. It's gone, completely gone. We got nowhere to live anymore. Here's the other house gone.


ROBERTS: Just incredible, saved his dog but lost his grandparents. CNN's John Vause is live for us this morning in Whittlesea, Australia. It's just north of Melbourne. And John, what's the scene like where you are? JOHN VAUSE, CNN CORRESPONDENT: Well, John, this is a staging area. This is where the fire brigades have been marshalling and many fire crews are coming here before heading out to fight those fires which are in fact still burning tonight.

And even now authorities and some residents only able to get into some of the hardest-hit areas. By far the biggest loss of life was in the town of Kinglake. There authorities say at least 35 people are known to have died. It was once home to 1,500 people but today it was just a scene of utter devastation, house after house destroyed, car after car burned out and inside those cars police found many bodies. They were victims who perhaps decided to flee at the very worst possible moment, when the fire was at its most intense, when the flames were moving incredibly quickly, somewhere between 60 and 70 miles per hour. Those people in those cars simply couldn't outrun the flames and they were caught dead.

Officials continue to warn that this death toll will rise. One reason for that is because emergency crews have yet to make proper thorough searches of many villages and towns which are isolated, high up in the mountains, and a worst case scenario, a temporary morgue has now opened in the capital of Melbourne. It has a capacity for up to 300 bodies and now police have declared many of these areas a crime scene. They're convinced that at least one fire, perhaps many more, were, in fact, deliberately lit and officials from the Australian Prime Minister on down are warning those responsible, if caught will face multiple counts of murder. Prime Minister Kevin Rudd describing what happened here in recent days as mass murder. John.

ROBERTS: Just an amazing, extraordinary to see how many people died in those fires. John Vause for us this morning from Whittlesea, Australia. John, thanks. It's 20 minutes now to the top of the hour.


ROBERTS (voice-over): While one industry is on life support, another is thriving.

CLINT EASTWOOD, ACTOR: Michigan will be the next capital of the world.

ROBERTS: Even Clint Eastwood is doing it, making movies in Michigan.

JEFF DANIELS, ACTOR: What are you doing to, you know, make Michigan a better place, to make, you know, to create jobs. Oh, nothing? Then shut up.

ROBERTS: Betting on films to finance the future, ahead on the most news in the morning.


CHETRY: An industry that drove its economy for 100 years is vanishing. In Michigan, they are already talking depression, not recession. The state has the highest unemployment rate in the nation, already in double digits and climbing fast.

Now some local boys who made good on the West Coast are coming home, and they're using their star power to pump up the economy. Carol Costello joins us now with more on this. Hey, Carol.

CAROL COSTELLO, CNN CORRESPONDENT: This is a good story about Michigan and it's about time, right. Because you know, we know Michigan is bleeding jobs, but there are many people there who say enough crying in your beer. It's time to do something about it. And the solution is the stuff made in Hollywood.


COSTELLO (voice-over): Dreams, they're made here, and if all goes well, here, too. Hollywood, Michigan, really?

COSTELLO (on-camera): You hear things like Michigan, Hollywood of the north, Hollywood of the Midwest, and people go, oh, come on!

JEFF DANIELS, ACTOR: And your idea is what? What are you doing to, you know, to make Michigan a better place, to create jobs? Oh, nothing? Then shut up.

COSTELLO: Jeff Daniels is a believer, raised in Michigan and the star of dozens of Hollywood films. He says Michigan can reinvent itself, turning auto factories into dream factories, autoworkers into movie set makers.

DANIELS: I think people in the Midwest, in the heartland, understand what it means to do a good day's work, an honest day's work. They're not afraid of work.

COSTELLO: Or of new kinds of creative work. Remember, before Detroit meant the Big Three, it meant these three from Motown.


UNIDENTIFIED FEMALE: And you know how many times I cried -

COSTELLO: Daniels is actively working with Michigan to lure Hollywood north. He pushed officials to grant an enormous rebate on the Michigan business tax, up to 42 percent for film companies. That means that if you spend $1 million making movies in Michigan you could get $420,000 back. So far, it's worked. 32 movies were shot in Michigan in 2008 alone.

EASTWOOD: Get off my lawn.

COSTELLO: Including Clint Eastwood's "Gran Torino."

EASTWOOD: Michigan will be the next film capital of the world.

COSTELLO: Maybe. Michigan's governor just announced two huge projects to make that dream a reality.

GOV. JENNIFER GRANHOLM, MICHIGAN: Wonderstruck Animation Studios will invest $86 million to build a new studio in Detroit.

COSTELLO: And a $54 million sound stage is also being built at a former GM plant in Pontiac. Critics say well it all sounds great, it does come with a price, that 42 percent tax rebate is overly generous they say and will cost Michigan in the long run.

Daniels doesn't buy it, though, saying other states have done the same thing, and are thriving.

DANIELS: I have yet to see a state to go backwards, to go whoa, whoa, what a huge, foolish mistake because we were desperate. I have yet to see a state do that. Show me where it's lost money or show me where a state has gone manic bankrupt and we're so sorry we did it.

COSTELLO: Maybe. Maybe dreams do come true.


COSTELLO: Michigan is banking on it.


COSTELLO: Certainly is -- 3,000 jobs were created in 2008. Of course, the state is hoping for more, Michigan is also offering special classes in its universities to train or retrain workers to take jobs in the entertainment industry. Make no mistake though there is a lot of competition, Pennsylvania, Connecticut, New Mexico and a host of other states are luring Hollywood, too, and at least one, Rhode Island, is thinking of rolling back some incentives because it didn't turn out exactly as planned.

CHETRY: Wow, all right. I mean, at least as Jeff Daniels said, we're trying here. We're trying.

COSTELLO: You got any other ideas, then shut up.

CHETRY: Exactly. Right.

ROBERTS: Any idea what happened in Rhode Island?

COSTELLO: Rhode Island was giving so many incentives out it wasn't getting enough money back to really be profitable. So it's thinking of rolling some of those incentives back but it's certainly not cutting out the program. It still wants Hollywood to come and shoot films there.

ROBERTS: Got you.

CHETRY: So it's a fine line with being, you know, competitive but not giving away too much.

COSTELLO: Exactly.

CHETRY: All right.

ROBERTS: Good to see you this morning, thanks. After baseball star Alex Rodriguez' admission about using steroids what, does it do for baseball's image and for A-Rod's career? We've got some expert analysis coming up.

And sitting across the table, face-to-face with Iran. Both sides now saying it might be time to do it. What that could mean for the stability of the entire Middle East.

And how does Israel feel about it? Christiane Amanpour shares her expert insight just ahead. It's 48 minutes now after the hour.


ROBERTS: Welcome back to the Most News in the Morning.

As more and more people find their jobs on the chopping block, they are also finding out if you're out of work. Well, you're not alone. To that end, we meet three women who are using their own misfortune to try to help others. Our Alina Cho has their story for us this morning. You got me intrigued here.

ALINA CHO, CNN CORRESPONDENT: That's right. Turning lemons into lemonade as I've been saying, John. Good morning. Good morning, everybody. You know, these three women formed a Web site. It's called, really an on-line community for the unemployed, a growing community, of course.

Now these women really know what that is like so they put their heads together and they said we are going to capitalize on what everyone is talking about. The recession.


CHO (voice-over): Recently lost a job? You're not alone. Just ask these three women, the founders of

LYNN PARRAMORE, CO-FOUNDER, RECESSIONWIRE.COM: People are commiserating. They are so excited just to have a place to vent.

CHO: The Web site is the brainchild of Sara Clemence, Laura Ridge and Lynn Parramore. Sarah and Laura were recently laid off as editors of "Portfolio Magazine's" Web site. Lynn, a freelance writer saw her work dry up, too. So they teamed up to talk about the one issue on everyone's mind.

CHO (on-camera): Not too long ago, it seems, it was taboo to talk about losing your job.

SARA CLEMENCE, CO-FOUNDER, RECESSIONWIRE.COM: When I was laid off, one of my initial reactions was I'm not the person this happens to, this happens to somebody else and does happen to somebody else but it actually happens to a lot of people right now.

CHO: It happened to Sara twice in the span of a month.

CLEMENCE: I got laid off before I even started my job. CHO: The same day you got hired, you got fired?

CLEMENCE: We started calling it pre-fired around here, which we did as a recession lexicon post.

CHO: Rich material for a growing community - the unemployed. What is the overriding emotion that you sort of hear played out amongst your readers?

PARRAMORE: We're not hearing as much panic as you would think.

And we need ideas. We need to figure out how to cope.

CHO: The founders call the site a place for lively, but not snarky discussion. Here, you'll find features called lemonade makers, Screwed, and recession concessions. Also the cure for Aeron chair withdrawal, an exercise to help your posture.

CLEMENCE: You move your arms up and down against the wall.

CHO: Does it work?

CLEMENCE: It totally works.

PARRAMORE: It's hard.

CHO: Some ideas are still a work in progress.

CLEMENCE: One of the things we were talking about at lunch was having a regular feature, signs of the recovery which we like, only we don't have any.



CHO: That's right. Now all good things do come to an end. That's the saying, right? And so will, eventually. The founders call it a pop-up site, much like a pop-up story. So when the recession ends, so, too, will the Web site but just in case things take a turn for the worse economically, John. They have already secured the rights to another Web site, another domain name,

ROBERTS: Well, if they really want to plan ahead they would also get in their little hands. Are they making any money doing this?

CHO: Not yet. You know, they just launched yesterday. And you know, obviously, they want to get a little bit of time but they are hoping to generate ads and they say there has been a new economy formed on this Web site. You know, a recession economy whereby there are companies that are going out of business, they are liquidating they want to form partnerships and actually sell those products on the Web site. You know, it's a growing community, sadly. You know, thousands of layoffs are reported every day. Now they have someplace to go to sort of vent.

ROBERTS: You know, the key is to keep your mind open and try to be innovative.

CHO: They say that and to be flexible, you know, in this environment.

ROBERTS: There you are. Growth minded. That's what you do. All right. Alina, thanks very much. Great little story. 54 minutes now after the hour.


CHETRY (voice-over): Recession town U.S.A..

Try living here.

OBAMA: Elkhart is a place that has lost jobs faster than anywhere else in America.

CHETRY: Now the town's mayor on AMERICAN MORNING live.

Plus, bad banks. Toxic assets. Details of Treasury Secretary Tim Geithner's plans to fix Wall Street's money mess. And what it means to you. You're watching the most news in the morning.




ALEX RODRIGUEZ, ADMITS USING STEROID: I was young. I was stupid. I was naive. And I wanted to prove to everyone that, you know, I was worth, you know, and being one of the greatest players of all time. And I did take a banned substance and, you know, for that, I'm very sorry and deeply regretful.


ROBERTS: It's a huge black eye for America's past time and a career damaging admission for A-Rod after years of denying. Alex Rodriguez confessed to using performance-enhancing drugs for three years between 2001 and 2003 when he played for the Texas Rangers.

Joining us to talk about the potential impact of A-Rod's revelation and the game and on his Hall of Fame future, Roy S. Johnson, veteran sports reporter and the editor-in-chief of "Men's Fitness." Roy, it's good to see you back here again.

ROY S. JOHNSON, EDITOR IN CHIEF, "MEN'S FITNESS": Thank you. Good to be back.

ROBERTS: So he really came clean fairly quickly after that "Sports Illustrated" report came out. He never admitted to "Sports Illustrated" but went on ESPN yesterday and said, yes, it was true. JOHNSON: He really almost had no choice. The only thing that we were missing yesterday was the requisite tear coming out during the apology. But he did what he had to do. Everyone said that A-Rod had to come out and admit what he did because the evidence was so damming for him. So that was the first step.

Now he has to do other things. He has to face a group of reporters that may not be as friendly as the interview was yesterday. He also now has to perform on the field. Not just during the season, but also in October which is something he has not quite been able to do here in New York.

ROBERTS: He is such a great natural player. You would think why would he ever have to turn to steroids to enhance his performance. But he said he felt all of this pressure right after he signed a contract with the Texas Rangers. We know they were paying him a lot of money.

JOHNSON: Yes, a lot of money. $252 million. So that was a lot of pressure on him. Even though, at the time, he was already considered the best player in baseball so it shows just how fragile -

ROBERTS: Does that buy him an excuse? Can he be forgiven because he felt the pressure?

JOHNSON: I don't know if it's an excuse. He puts it up as a reason. Now he has told us why he did it. It wasn't like he was recovering from an injury as other players have done. And so now he has to try to look forward and prove that those years were an aberration. Those were great years and now they are going to be tainted. But he really has another 10 years probably to try to win back, not just the American public, but as you eluded to in the introduction, voters who will be deciding whether or not he goes in the Hall of Fame.

ROBERTS: That may, though, be a very tall mountain for him to climb. Because here you got a guy who is a three-time American league MVP. He could surpass Barry Bonds as the home run champion. A lot of people are saying he could break every record that's out there in baseball.

You saw the press yesterday here in New York City. You know, front page of the "New York Post," A"-hole, that cover, throw him out of the game," "Get rid of him, cut him" in the "Daily News." He has got a lot of people here really who aren't very fond of him.

JOHNSON: There's no question. A lot of voters have already said they will never vote for anyone who is tainted by a steroid so that means whether it's Mark McGuire, Roger Clemens, Barry Bonds and now Alex Rodriguez. So there are some people who have very long memories but 10 years is a long time as you know, If he continues to perform, if he continues to show that he is sorry and he does the right thing whether he starts talking to young people about the dangers of drugs, he might have a chance. Because he probably will end up maybe as the best player of all time. ROBERTS: I will pick up on the last point that you made there. Young kids, they are looking at Alex Rodriguez, saying he is the guy I want to be. One of the best all-around players that has ever lived. And now, whoa, he was tainted.

JOHNSON: Yes, that totally changes particularly for young Latino kids, young kids from the Dominican. I've heard from a lot of them who say, wow, this really hurts us because, for them, he was truly a role model and a standard as the best in the game. So for a lot of young people, this is very damaging to them.

ROBERTS: Difficult to put anybody up on a pedestal.

JOHNSON: Absolutely.

ROBERTS: Roy Johnson, good to see you this morning. Thanks for joining us.

JOHNSON: Thanks for having me.