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American Morning

President Obama's Economic CPR; Automakers Survival Plans Due; Hillary Clinton Issuing a Warning to North Korea; California to Send 20,000 Layoff Notices; Michael Moore Targets Wall Street for New Documentary Film; Billions Needed to Upgrade U.S. Chopper Fleet; Warning to North Korea; Secretary Clinton in Asia; Recessionistas on the Runway; The Sky is Falling

Aired February 17, 2009 - 06:00   ET

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


(BEGIN VIDEO CLIP)

KIRAN CHETRY, CNN ANCHOR (voice-over): Breaking news. An urgent search for solutions at home and overseas. Hillary Clinton warning North Korea, don't fire that missile.

HILLARY CLINTON, SECRETARY OF STATE: Our goal remains the same, a denuclearized North Korea.

CHETRY: As the president puts his name to the stimulus and puts more of your cash to save American cars.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Four billion dollars more in loans to keep the company afloat.

CHETRY: Billions more bailout dollars, but is it too late to save Detroit, on the Most News in the Morning?

(END VIDEO CLIP)

CHETRY: Well, good morning. It's Tuesday, February 17th. Glad you're with us on this AMERICAN MORNING.

JOHN ROBERTS, CNN ANCHOR: And good morning to you.

Right now, investigators outside Buffalo racing to preserve the wreckage of Flight 3407. Forecasters expect a snowstorm to be hitting the area tomorrow and that could hamper recovery efforts. Investigators have located key parts that may reveal what happened in the final seconds before that plane crashed, including the steering column, all of the propeller blades and five of the six deicing valves.

Olympic swimming champion Michael Phelps won't be prosecuted for allegedly smoking pot. The South Carolina sheriff says there was not enough evidence to file criminal charges against him. This morning, Phelps is speaking out again, saying the fallout from a picture of him using a bong at a college party taught him a tough lesson.

(BEGIN VIDEO CLIP)

MICHAEL PHELPS, OLYMPIC GOLD MEDALIST: You know, I realized that I have made a mistake and a bad judgment. And I guess this is something that I need to learn from, I will learn from and have learned from. And you know I think from now on, you know, it's for me to try to get a message across to kids, you know. I know that, you know, a lot of people make mistakes, and, you know, the best way to learn from them is changing things.

(END VIDEO CLIP)

ROBERTS: The South Carolina sheriff defended his investigation to Phelps saying that the bong photo put his department in a no-win situation.

And this morning a new iPhone application has casinos on edge. In Nevada, gambling regulators are warning casinos about a card counting program that can help you beat the house of Blackjack. According to officials, the application can go stealth which blanks the screen so it will hide what you're doing. Counting cards itself is not illegal in Nevada but using an electronic device to do it is a felony.

CHETRY: Well, now to a story that's brand new this morning, the latest development for you now.

Secretary of State Hillary Clinton warning North Korea not to test fire a long range missile. Secretary Clinton is in Japan and it's her first trip abroad as America's top diplomat. Clinton said that a North Korea missile launch would be "very unhelpful in moving relations with the U.S. forward."

(BEGIN VIDEO CLIP)

CLINTON: I have said on several occasions that if North Korea abides by the obligations it has already entered into and verifiably and completely eliminates its nuclear program, then there will be a reciprocal response certainly from the United States. A chance to normalize relations, to enter into a peace treaty, rather than an armistice, and to expect assistance for the people of North Korea. So it is truly up to the North Koreans.

But in the meantime, those of us who are parties to the Six-party talks will be coordinating and working together to renew the vigorous outreach that we want to have in order to build on what has already occurred.

(END VIDEO CLIP)

CHETRY: Pyongyang says it has the right to "space development." It's a term that they've used in the past to disguise a missile test as a satellite launch.

ROBERTS: Well here at home, the economy is front and center on President Obama's agenda. In just a matter of hours, he'll head to Denver to sign into law the $787 stimulus bill. It could mean more money in your pocket and in your state's budget but the economic CPR is far from over.

Also today, a massive infusion of cash to General Motors and more details expected on a plan to help Americans facing foreclosure.

CNN's Dan Lothian is the only reporter at the White House this early.

And Dan, what are we learning so far about this plan to potentially help people in trouble with their mortgages?

DAN LOTHIAN, CNN BOSTON BUREAU CHIEF: Well, John, what I can tell you is that the president is not going to spend a lot of time taking a victory lap celebrating the win on the stimulus bill. He will be focusing ahead to the next section of this plan that he feels could really help to jump-start the economy. He will be headed to Phoenix, Arizona, tomorrow, and the focus will obviously be helping homeowners who are dealing with foreclosures there.

This is an area that has just been hammered by the housing meltdown. The median household home price has dropped by about 35 percent over the last year and so what the White House wants to do is to infuse about $40 billion to $50 billion in money from the bailout plan that was passed last fall to help stem foreclosures, home foreclosures. We don't know a lot of details about the plan, but we do know the president does want to deal with home foreclosures and also try to lower the monthly mortgage payments, John.

ROBERTS: So Dan, what's the strategy of the president hitting the road? Is this just to sort get beyond the Beltway, show Americans that he's trying to connect with them one on one?

LOTHIAN: It really is, John. I mean, the White House feels that the president can better sell his ideas when he heads on the road. We saw this when he went to those town hall meetings in Indiana, Illinois. He was also down in Florida, and they felt that he was better able to connect with Americans. He was able to better sell his stimulus plan, so that's the reason they're heading out to Denver to sign this.

As you know, you know, any time you have something this big, passing a bill like this, it's usually done right here at the White House but the White House wanted to get outside of Washington to do this and they wanted to highlight some of the areas that will benefiting, getting jobs from the stimulus plan, in particular green jobs. One of the people who would be there at the signing will be the CEO of a solar company.

As you know, the president has been talking about jobs being created through the stimulus plan, 3.5 to four million jobs, and part of that, he says, will be green jobs, John.

ROBERTS: It's a big bill. I wonder what the shipping charges were to get it out there and back, Dan.

LOTHIAN: That's right. You've seen it, a stock of papers.

ROBERTS: Yes, what is it? Fifteen hundred pages.

LOTHIAN: Exactly, exactly. They'll have a big suitcase to carry it.

ROBERTS: Dan Lothian for us. Dan, thanks so much.

And with the stimulus about to start flowing, personal finance expert Suze Orman told CNN's Larry King, America is taking steps to turn the economy around.

(BEGIN VIDEO CLIP)

LARRY KING, HOST, "LARRY KING LIVE": You see anything encouraging?

SUZE ORMAN, PERSONAL FINANCE EXPERT: Yes. Here's what I see encouraging. The stimulus got passed. He has a plan. We now have to give him our support to make this plan help everybody.

I wish everybody would stop saying it is dire, including the president. Stop telling everybody that it's dire, it's this, it's that. We have a plan. Let's see what we can do. Let's deal with the housing crisis now as well. And if we could just keep doing this, little by little we're going to get through it.

Is it going to be easy? No, but we will eventually get through it. We need time, though, Larry.

(END VIDEO CLIP)

ROBERTS: Orman also went on to say that now is the time that Republicans and Democrats need to stop the bickering and get on board with the plan that we have.

And a reminder that you could see President Obama sign the stimulus into law at 2:40 Eastern right here on CNN and CNN.com/live.

CHETRY: Well, this morning, the White House is already deciding to release $4 billion more to keep General Motors afloat. The money comes as Washington waits for GM and Chrysler's detailed restructuring plan.

Stephanie Elam joins us now with more on the story.

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Today is D-Day, you know, Kiran and John. You take a look at it for what's going on with Detroit. Today is the day they have to go before Congress, let them know this is what they think that they can do to stay viable. So they got to prove that they can do that.

Now this $4 billion that Gm is going to get today, this fulfills the Bush administration plan to give the money sort of a stop gap to help them get through so that they didn't file for bankruptcy here.

What's interesting though is that overall GM and Chrysler have asked for a $34 billion. Many think it's going to take much more than that. So the big question here is, when they come today are they going to be asking for more money? That's one thing that everyone wants to see. Also, when they go before the committee today, House Speaker Pelosi and Barney Frank, the chairman of the committee, have already asked to say this is what we're looking for. We want to make sure that you're going to be viable, that you're going to keep jobs alive for a lot of people, that you're going to protect pension benefits and really sell that, you know, with one in ten American jobs really applying to the auto manufacturing industry in some way that you're going to keep this industry alive in some factor.

CHETRY: It's interesting. I mean, they, of course, can outline what they plan to do to make sure that they can continue to operate in the future. But they really have no control over whether the consumer can afford to buy a car, can get credit right now or even wants their cars.

ELAM: Right, and part of the issue, too, they're saying, you know, over the next four years if the car purchasing limit is somewhere around $10 million, if it stays below that for the next four years, it will be very hard for them to stay profitable and that's what they're concerned about, but that's what they're saying could actually happen at this point.

CHETRY: All right. Stephanie Elam for us, thanks.

ELAM: Sure.

ROBERTS: We're following breaking news right now. California warning the 20,000 state workers might be fired and is not the only state dealing with massive economic pains. We'll have live details on that ahead.

And Bristol Palin speaking out for the first time since the birth of her baby. She discussed her pregnancy and had some advice for teenagers. Hear what she has to say.

It's eight and a half minutes after the hour.

(COMMERCIAL BREAK)

CHETRY: Welcome back to AMERICAN MORNING. It's time to fast forward right now to some of the stories we'll be hearing about on CNN today.

It should be a media circus when Alex Rodriguez arrives at the New York Yankees spring training complex in Tampa. He's set to hold an afternoon news conference. He's going to answer questions about his use of performance-enhancing drugs. He says it was just from 2001 to 2003 while playing for the Texas Rangers. Some of A-Rod's teammates are expected to attend.

Well, several hundred TV stations will begin digital only transmission today. They're sticking to that original changeover date from analog broadcast. Congress last week extended the deadline to June 12th, giving viewers more time to get converter boxes because the federal coupon program has run out of money. And tonight, 8:15 Eastern, former-Fed Chief Alan Greenspan will address the economic club in New York. We'll be monitoring it to see how much responsibility he takes for the current economic crisis and what he thinks about our future outlook -- John.

ROBERTS: Breaking news this morning, and another sign of the punishing action that states are having to take in order to deal with the massive budget shortfall in this recession.

California Governor Arnold Schwarzenegger today sending out 20,000 layoff notices to state workers. That's because California is broke, $42 billion in the red.

We're live in San Francisco this morning. CNN's Dan Simon is up early working the story.

And Dan, the governor really has become the terminator.

DAN SIMON, CNN CORRESPONDENT: Yes, that's one way of looking at it, John. It is a crisis in every sense of the word. The layoffs that we've seen across corporate America almost on a daily basis might soon extend to state government.

In Sacramento, you talked about this 20,000 layoff notices. It does not mean that 20,000 people per se are going to lose their jobs. What it does mean is that the state is facing a huge problem and there is the potential of that and it's essentially telling workers to be ready that these layoffs could happen.

Now, how did we get in this mess? How did California reach this point? Well, the state, as you know, is facing a $42 billion deficit and right now, lawmakers are trying to come up with a budget to sort of bridge that deficit. And right now, they need just one vote in the Senate, just one vote but that vote needs to come from a Republican and the problem is this budget contains $14 billion in tax increases and most Republicans have signed anti-tax pledges and they fear that if they vote for this legislation that it will cost them at the polls come re-election time.

A lot of people also ask why is the budget so high? Why is it $42 billion? As you can imagine, it's quite a complicated answer but the bottom line, the state is experiencing a 15-year unemployment high. Unemployment figures right now at 9.3 percent and that has had a tremendous ripple effect and this is just the way it ripples, John.

ROBERTS: For some people, Dan, there's the "read my lips" pledges tend to box them in just a little bit. What has this done to the governor's approval rating?

SIMON: Well, we could tell you he's a lot more popular across the country and in the world than he is in California right now. His approval rating has dipped well below 50 percent, standing at about 40 percent. About a year and a half ago, it was at 60 percent so this is really costing him politically. But we should note the governor is going to be out of office in 2010, when term limits show him the door, John. ROBERTS: All right. Dan Simon for us this morning up early in San Francisco watching the pending story there. Dan, thanks so much. We'll hear back from you a little bit later on this morning.

California not the only state with money problems. Here's more in an AM Extra.

According to a report by the National Conference of State Legislatures, only seven states had a balanced budget for the year 2009. In Kansas, money is so short that the state has stopped payments on tax refunds until lawmakers can agree on how to fix the cash flow problem.

And in New York, Governor David Paterson has proposed a state tax on downloaded porn, music and movies to help bring in more revenue. Sign of hard times ahead.

Fifteen minutes after the hour.

CHETRY: He's back. Michael Moore, on the attack.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: Well, I think any time Michael Moore targets you, you should be worried.

CHETRY (voice-over): New target, Wall Street. Fat cats beware.

LEAH ROZEN, "PEOPLE" MAGAZINE: This is a perfect topic for Michael Moore.

CHETRY: You're watching the Most News in the Morning.

(END VIDEO CLIP)

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: So this is where people come to pay their bill when they're done staying in the hospital.

UNIDENTIFIED MALE: No, this is the NHS hospital, so you don't pay the bill.

UNIDENTIFIED MALE: Why does it say cashier here if people don't have to pay a bill?

UNIDENTIFIED MALE: Those who have which means they get their traffic expenses reimbursed.

UNIDENTIFIED MALE: So in British hospitals, instead of money going in to the cashier's window, money comes out.

(END VIDEO CLIP)

CHETRY: All right. Welcome back to the Most News in the Morning.

That was a scene from the Michael Moore documentary "Sicko" which took on America's health care industry. Now the controversial filmmaker is setting his sights on Wall Street. He's actively recruiting people who worked in the financial sector to expose what he calls the biggest swindle in U.S. history.

CNN's Jason Carroll is following the story. He probably has a wrapped audience at his point...

JASON CARROLL, CNN CORRESPONDENT: Oh, yes.

CHETRY: ... because everything that's happened with this financial crisis and a lot of people are blaming Wall Street.

CARROLL: Absolutely, you know, and also they loved that gotcha kind of filmmaking and Michael Moore does it better than no one else and he's about to do it again.

Michael Moore says he's looking for a few good men and women to spill the beans and help him take on Wall Street. He's already taken on the health care industry, the auto industry and the gun lobby in his films. Now his Web site says, "Will you help me with my next film?" The "you" Moore is referring to, is anyone who works at a bank, brokerage firm or insurance company to come forward and share what he calls the real deal about the abuses in the financial industry. Some critics are already looking forward to it.

(BEGIN VIDEO CLIP)

ROZEN: Do I want to see Michael Moore spank Wall Street? Yes, I want to see Michael Moore spank Wall Street.

JOSHUA ROTHKOPF, "TIME OUT" MAGAZINE: Michael Moore represents part of the chorus that should be there. I think if all documentaries were sort of like Michael Moore movies that might be a little much, but at the same time, I personally am excited about the idea of Michael Moore taking on Wall Street.

(END VIDEO CLIP)

CARROLL: Moore is asking Wall Street workers to spill the beans, if they have information they think the American people need to hear. The question is, will Wall Street want to help? We asked some workers and got some mixed reaction.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: I think that he'll put everybody on the spot and keep everyone on their toes.

UNIDENTIFIED MALE: His opinion is, his viewpoint is so slanted that it's really difficult to believe anything that he puts on film.

UNIDENTIFIED MALE: I just think his whole mind-set is very anti- American, and I don't think he's the right person to ask about anything, quite honestly.

UNIDENTIFIED MALE: Well, I think any time Michael Moore targets you, you should be worried.

(END VIDEO CLIP)

CARROLL: Well, Moore says it's up to anyone with information to "step up and be an American and do your duty to help shed some light on the financial collapse." He also says any correspondence with him will be kept confidential, that is, of course, unless you agree to participate in his film and if you've seen some of his past films you know that you're going to be there.

CHETRY: Right. It's very interesting, a very controversial figure. You heard some people think he's very anti-American and it comes, you know, with a point of view.

CARROLL: Yes.

CHETRY: And there are others who say I can't wait to see what he does because he does shed light on some things.

CARROLL: Yes. You heard from the critics. They're looking forward to it.

CHETRY: Yes. Exactly.

All right. Jason Carroll, thanks so much.

CARROLL: All right.

CHETRY: John?

ROBERTS: New mom Bristol Palin says that she wants to be an advocate against teen pregnancy. Bristol spoke to FOX News yesterday saying that teens should wait ten years and that she hopes people will learn from her story. But she also went on to say that stopping teen sex is "not realistic at all," which is interesting considering her mother supports abstinence only education.

Governor Sarah Palin showed up during the interview with her grandson Tripp. She and Bristol spoke about the pregnancy and the media's coverage.

(BEGIN VIDEO CLIP)

GOV. SARAH PALIN (R), ALASKA: A little surprise. Let me put it this way and this is -- I think Bristol is kind of an example of truly it can happen to anybody.

Bristol is a great athlete, great student, great aspirations that she had for herself, plans, that didn't include a baby, of course, but it did happen to her, and now, again, less than ideal circumstances, but we make the most of it.

BRISTOL PALIN, GOV. SARAH PALIN'S DAUGHTER: My family is strong and it doesn't matter what the -- like what tabloids say or anything like that.

GRETA VAN SUSTEREN, FOX NEWS ANCHOR: Did you read any of the tabloids?

B. PALIN: I've seen some of them, and I think people out there are just evil, because they don't know what was going on at all.

(END VIDEO CLIP)

ROBERTS: Now Bristol also said that she has no immediate plans to marry her boyfriend, Levi Johnson, which I thought they were going to get married quickly.

CHETRY: Yes. And she -- well, she also said that he's a very hands-on father and that she gets a lot of help from Sarah Palin's mother, whom she calls "mom mom." She said that, you know, she's with the baby when she's not in school and when she's in school her family watches him. So, she's pretty candid about the whole thing.

ROBERTS: It's curious to know that divergence in opinion though. Her mother supports abstinence only education.

CHETRY: Yes.

ROBERTS: And she says there's no way you can stop teens from having sex.

CHETRY: That's right.

ROBERTS: I think mom and daughter will be having a chat.

Twenty-three minutes after the hour. Stay with us.

How much is too much for a fleet of presidential helicopters? How about $11 billion?

(BEGIN VIDEO CLIP)

CHRIS LAWRENCE, CNN CORRESPONDENT: It's possible these helicopters could save his life.

(END VIDEO CLIP)

ROBERTS: Controversy over the super high price of Marine One.

(BEGIN VIDEO CLIP)

RICHARD ABOULAFIA, TEAL GROUP: This helicopter assumes that money is no object in ensuring the safety of the president.

(END VIDEO CLIP)

ROBERTS: You're watching the Most News in the Morning. most news in the morning.

(COMMERCIAL BREAK) ROBERTS: Welcome back to the Most News in the Morning.

The fleet of presidential helicopters is about to get a very expensive makeover, and this morning it's creating a pricey dilemma for President Obama. That's because the new fleet consists of 28 helicopters at a cost -- you're ready for this -- of $400 million each.

CNN's Chris Lawrence is looking into this for us this morning.

LAWRENCE: John, Kiran, the decision could cut down to safety versus spending.

(BEGIN VIDEOTAPE)

LAWRENCE (voice-over): President Obama may have to put a price tag on his own safety. The current fleet of presidential helicopters is old. The replacements will be safer, fly farther, faster but the new fleet is years behind schedule and the cost is nearly double to $11 billion.

RICHARD ABOULAFIA, TEAL GROUP: This helicopter assumes that money is no object in ensuring the safety of the president.

LAWRENCE: It has to be more up-to-date than this current equipment shot inside the cockpit by "National Geographic." It has the jam tracking devices and deflect missiles. It's got to have Internet, phones and faxes, the kinds that still work despite low-level radiation or after an electromagnetic pulse from a nuclear blast. Sixty-four feet of armored technology for relatively short flights.

ABOULAFIA: This is basically a niche machine, 15 minutes here, 30 minutes there.

LAWRENCE: The new helicopters cost $400 million each. That makes Marine One one of the most expensive aircraft in the world, and President Obama must decide if the high price is worth the political cost.

ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: Concerns that, in terms of what that means for the taxpayers, as well as what that means for the military and I think those are many questions that have to be addressed.

LAWRENCE: Critics say during the Bush administration the Pentagon rushed to give the contract to Lockheed Martin. The company had never built helicopters before and having to add all those features sent the price soaring.

(on camera): It's possible these helicopters could save his life. But after President Obama criticized corporate executives for flying such high-priced jets, buying such a pricey fleet of his own may not fly.

(voice-over): The contract's been frozen while the Pentagon reviews it. Some Connecticut Democrats see a chance to move the project to a company in their state.

REP. ROSA L. DELAURIO (D), CONNECTICUT: What are the alternatives? What's more cost effective and still maintaining national security?

LAWRENCE: During the campaign, candidate Obama said, "We should be spending a lot more money trying to figure out how to get our energy policy right than we should on helicopters for the president."

Well, now they're his helicopters. Better watch the overhead.

(END VIDEOTAPE)

LAWRENCE: The White House says it's going to look at this program and the bigger issue of how the Pentagon buys its equipment -- John, Kiran.

CHETRY: Chris Lawrence for us, thanks.

Well, it's just about 28 minutes after the hour right now. We take a check of the top stories.

The White House says President Obama will decide shortly on sending more U.S. troops to Afghanistan. Press Secretary Robert Gibbs telling reporters the president is consulting with military leaders as well as his foreign policy team as the administration continues to review its Afghanistan policy.

Now Gibbs would not put a definitive timetable on any decision but says it shouldn't involve weeks. Defense Secretary Gates last week said that the president was just days away from announcing a decision.

Well, a woman in Stamford, Connecticut, is fighting for her life this morning after she was mauled by her friend's pet chimpanzee. Police say the attack on 55-year-old Charla Nash was unprovoked. They say the owner stabbed the 200-pound chimp named Travis trying desperately to stop the attack on her friend. Police who responded to the scene shot the chimp dead when he tried to get them.

Back in 2003, Travis's escaped from his owner's home. He ran free for a couple of hours before he was captured but beside that, he's been a loving family pet for the past 15, 16 years.

Also this morning, a Facebook face-off after the popular social Web site quietly changed their terms of service agreement. Under the new terms, many users became concerned that Facebook owned anything you posted, and could use if they see fit, as they see fit, whenever, even if you cancel your account.

Now the Web site's chief executive officer says that is not true and that Facebook does not own their information. This morning we want to know what you think about it. Send us an e-mail or an iReport, CNN.com/am.

Secretary of State Hillary Clinton is meeting with Japanese leaders in Tokyo this morning, and she's offering a word to the wise in North Korea, amid rumblings that Pyongyang is planning a nuclear missile test.

(BEGIN VIDEO CLIP)

CLINTON: I would underscore that the North Koreans should in no way be mistaken. President Obama on his inauguration during his address made it clear that the United States will reach out a hand to those with whom we have differences, so long as they unclench their fists. But the decision as to whether North Korea will cooperate in the six-party talks and provocative language and action is up to them, and we are watching very closely.

(END VIDEO CLIP)

CHETRY: CNN's Jill Dougherty is traveling with Secretary Clinton, she joins us live from Tokyo.

Thanks for being with us this morning, Jill. So, is the North Korea situation right now overshadowing some of the other highlights of this trip?

JILL DOUGHERTY, CNN FOREIGN AFFAIRS CORRESPONDENT: You know, in a way it is, Kiran, because although the secretary was totally prepared to talk about this, it was on the agenda. She was going to be speaking with the leaders of all of the countries that she's visiting on this trip. But it's the unpredictability of what North Korea might do. After all, there have been indications that they might launch a missile and that it could happen even while she is here in Asia.

So it's that note of unpredictability and what it would mean that's really causing her to focus even more so far on that subject. She had to warn them today not to do it. And then also she met interestingly with families of these abductees. Those are the Japanese here who were abducted by the North Koreans. Several of them are still missing. Nobody knows where they went. It's a very emotional issue, and Hillary Clinton met with some of the families today -- Kiran.

CHETRY: And also, Jill, as we say, you're traveling with Secretary Clinton. Take us behind the scenes, what are people saying, how are people weighing in on her overseas trip --- her first overseas trip as secretary of state?

DOUGHERTY: Well, you know, we're on the plane with her, and relatively small plane, you could say. She has a bed and an easy chair, but it doesn't look as if she's using it very much, because she continues to get briefed.

There are a lot of very sensitive issues, and you know, I traveled with the secretary when she was Mrs. Clinton back in the Clinton White House back in the early '90s. And she used to go on these trips that we're called the Hillary trips, went to many of the countries that we're going to now, and it was a different story at that point. Now, everything that she says is parsed for exactly the right words, exactly what has to be said, so it's very complex. But people are saying that she's doing very well. She really does. Everyone, I think would agree, she knows the brief.

CHETRY: Yes, absolutely. You could see her speaking very slowly and deliberately, and of course diplomatically, because that's -- she's a top diplomat now. Jill Dougherty for us traveling with Secretary Clinton, thanks.

ROBERTS: The White House warning the economy that it might get worse before it gets better. But one investment banker is a bit more optimistic. He'll tell us why.

And it's fashion week in New York City. And we're taking you inside to see how the recession is forcing designers to re-think the runway. It's 33-1/2 minutes after the hour.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

DR. JAY PRAG, CLAREMONT GRADUATE SCHOOL: I think the government would be at this point more economically efficient. It would be cheaper to just take over the banking system and let the Federal Reserve be the nation's banking system and restore confidence that way. It would allow them to take all the bad assets and loans and things off the books because they'd own them. There would be one giant bank, and then --

(END VIDEO CLIP)

ROBERTS: That was Dr. Jay Prag, an economics professor with his fix to revive the ailing financial system. And we want to know your solutions to kick-starting the economy. Send us an iReport at cnn.com/am.

Well, with all the doom and gloom out there, is everyone hunkering down preparing for the worst? Well, not some members of America's entrepreneurial class. Investment banker Dave Maney wrote an article recently, quoting, Ted Kennedy's 1980 speech that "Hope still lives and the dream shall never die." And he joins us now live from Denver this morning.

Dave, it's good to see you. Let me quote a little bit more from your article in where you say, quote, "The president thinks that we're teetering on the edge of catastrophe, but in this cold, dark February morning of our economic retreat, I feel the reassuring turning over of the economic starter, and the slow, low, strained rumbling of the engine as it prepares to warm up and hit the road again." Most people think that the worse is yet to come. But you seem pretty optimistic this morning. Why?

DAVE MANEY, INVESTMENT BANKER: I am optimistic. I've spent a lot of time out on the road with my client base, which is America's entrepreneurial companies. Kind of main street companies, not fortune 500 guys. And I've spoken to a bunch of groups of entrepreneurial CEOs over the past three or four weeks. And what's interesting is everyone has begun to talk about what am I going to do now, what opportunities does this downturn present itself? It almost seem like there was a turn after the holidays where people went from the sky is falling, I got to get out of the way to suddenly kind of saying, gee, this is a meaningful and maybe even historic set of opportunities, and I'm an entrepreneur and what I do is make the most of opportunities. So what can I do now?

ROBERTS: Yes. You really put this article in colorful language. You also say the entrepreneurial America is responding to its Pearl Harbor but the emotional depression brought on by economic hard times seems to have somehow eluded America's entrepreneurial class. You talk about opportunities. In your article you say once in a lifetime opportunities in this economic downturn. Where are the opportunities? What are they?

MANEY: Well, I think the opportunities are to consolidate and make industries more efficient. I mean, what you see in this kind of downturn is a burning off of excesses and there certainly were those. But when you look at, you know, lumber, one of my friends, who is an entrepreneur told me the other day that he got into the lumber business in 1970 and he said two by fours are selling for the same price wholesale today that they were in 1970.

Now, if you're any kind of, whether you're a speculator in lumber or whether you're a home builder and you look and say gee, the whole world's on sale, those are the kind of things where people start to look and say I think I can make something. There's a lot of dry powder, a lot of tinder on the ground, and that's what entrepreneurs do.

ROBERTS: So you spend a lot of time with the young president's organization. At the same time, we've got Wall Street looking for billions of dollars in bailouts, the automobile industries dipping its hand in the public trough for another $4 billion today. Retail is having a huge problem with those big department stores. What can those industries learn from smaller business?

MANEY: Well, you know, it's funny. I got a ton of e-mails from people from these organizations after sending this out. One of them that I got last night was from someone who said, you know, it's time that the mainstream media and that the public at large realizes that not everybody went and over levered themselves and not everybody went and now comes forth and says I need to get bailed out of this situation.

There's a lot of entrepreneurs who run their businesses actually with a fairly conservative financial footing who are now finding that their balance sheet is now a source of strength. They can go out. They can hire people cheaply. There's great people on the street to be had. They can -- they can acquire other companies that got over levered.

These are the things that I would hope that our government would learn because the same thing can happen to the government, and that the major corporations would learn. You've got to be -- you sort of have to be ready for this kind of downturns if you run -- if you operate a company in a capitalist economy.

ROBERTS: Dave Maney, an island of optimism in a sea of sorrow. Let us -- we'll leave our viewers with one more quote here. You say, quote, "We're not going down in flames. We're just getting started. All great economic successes are built on the ashes of a previous conflagration." Food for thought this morning.

Dave Maney, good to see you this morning. Thanks.

MANEY: Thanks, John.

ROBERTS: All right. Take care. Forty-one minutes now after the hour.

CHETRY: Designer dilemma.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: It is going to be the survival of the fittest.

(END VIDEO CLIP)

CHETRY: The trendy fashions in a terrible economy.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: Panic. It's insecurity. It's stress. And then you realize, oh, no, it's beautiful.

(END VIDEO CLIP)

CHETRY: Recessionistas on the runway. You're watching the Most News in the Morning.

(COMMERCIAL BREAK)

CHETRY: Welcome back to the Most News in the Morning. The spotlight hitting the catwalk here in New York City once again. This year, though, the economy is forcing many designers to make some pretty big alterations to their runway shows. CNN's Alina Cho is "Minding Your Business," and, of course, she's our resident fashionista here. But now she's...

ALINA CHO, CNN GENERAL ASSIGNMENT CORRESPONDENT: Oh, you flatter me every time.

CHETRY: ...having to learn how to be a recessionista in these times. A lot of people are.

CHO: That's right.

(CROSSTALK)

CHO: You know, everybody is having to learn how to be a recessionista, and it is New York Fashion Week, Kiran. Good morning, everybody.

You know, every other industry is taking a hit because of the bad economy. Why wouldn't fashion? Well, it is, but the truth is, it's hard to think of fashion that way. Beautiful clothes scream luxury, which got us thinking -- if that's the case, how do you design for a recession?

(BEGIN VIDEOTAPE)

CHO (voice-over): New York Fashion Week showcasing some of the flashiest and costliest clothes on the planet. But when times are tough, the tough don't go shopping. So what's a designer to do?

UNIDENTIFIED FEMALE: Two ways. Either they design up or they design down.

CHO: Naeem Kahn designs up, making his ornate gowns even more special but he cuts corners by choosing fabrics that look good and cost less.

(on camera): You're saying, let's make the dollar stretch.

NAEEM KHAN, DESIGNER: Of course. And it's also the competition between designers. You want to look better than the other.

CHO (voice over): He's cutting costs in other ways, too. Instead of staging a runway show that can run hundreds of thousands of dollars, this season Khan is showing his fall collection at his show room.

KHAN: I almost double my business every year. I opened five years ago. This year I'm expecting a flat one and for me flat is the new double.

CHO: Nanette Lepore is saying yes to the runway but she's cutting back. Instead of 50 looks, this year 25. Pressure is on to make every look count.

(on camera): And that must make things super crazy for you.

NANETTE LEPORE, DESIGNER: Yes, it's panic. It's insecurity. It's stress. And then you realize, oh no, it's beautiful.

CHO (voice-over): Other designers like Marc Bouwer are taking their collections to the Web, staging virtual shows online.

FERN MALLIS, SENIOR VICE PRESIDENT, IMG FASHION: This is a Darwinian time if there ever was one, you know. And it is going to be the survival of the fittest, and it's also a survival of the smartest.

CHO: And recessionista chic doesn't necessarily mean basic black. That pose is showing leopard because women buy leopard even in tough times. Calvin Klein is putting out racy ads, hoping shock sells. Retailers say in a bad economy, shoppers buy things they won't find in their closet. JIM GOLD, CEO, BERGDORF GOODMAN: The worst thing that designers can do today is to water down their collections, to take the safe road.

CHO: Khan says give a woman color and creativity in good times and in bad.

KHAN: Glamour is never going to die. Even during depression, when you look at it, people wore glamorous clothes. Glamour makes you happy. These are happy clothes and you want to be happy.

(END VIDEOTAPE)

CHO: Amen. Everybody wants to be happy. Now, keep in mind the clothes you see on the runway right now won't hit the stores until the fall. The spring collection in stores now were actually bought by retailers last year, before the economy took a turn for the worse, Kiran.

Now, those same retailers say they will be watching the bottom line much closer now. So don't be surprised if the racks are a bit thinner in the fall because in some cases retailers say they're cutting back by a lot, up to 40 percent in some cases, and that puts tremendous pressure on the designers, as you saw, Nanette Lepore say panic, panic, you know, insecurity...

CHETRY: And also, you get a lot of deals, right, because not everything that gets bought gets sold, so you're not going to find those deals as much.

CHO: That's right. For instance, Saks Fifth Avenue was 70 percent off at the beginning of December. That was unheard of. And now, the consumer doesn't have tolerance to pay full price anymore. 60 percent off, 70 percent off is the new full price.

CHETRY: The only good news, they're not spending money on food, judging from some of them on the runway.

CHO: No, they aren't.

CHETRY: They're still saving in that department. Alina, thanks so much. Forty-right minutes after the hour.

ROBERTS: Altered states.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: And if I ever record an album --

(END VIDEO CLIP)

ROBERTS: From the kid after the dentist --

(BEGIN VIDEO CLIP)

UNIDENTIFIED CHILD: Why is this happening to me? (END VIDEO CLIP)

ROBERTS: To the former president playing around.

(BEGIN VIDEO CLIP)

GEORGE BUSH, FORMER PRESIDENT OF THE UNITED STATES: We're strategizing.

(END VIDEO CLIP)

ROBERTS: Jeanne Moos with a toast to the "not so clearheaded."

(BEGIN VIDEO CLIP)

JEANNE MOOS, CNN NATIONAL NEWS CORRESPONDENT: Cheers.

(END VIDEO CLIP)

ROBERTS: You're watching the Most News in the Morning.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (SINGING): Make money, money, make money, money, money...

AUDIENCE (SINGING): Make money, money, make money, money, money...

UNIDENTIFIED MALE (SINGING): Say make money, money, make money, money, money...

AUDIENCE (SINGING): Make money, money, make money, money, money...

WILL FARRELL, ACTOR: We're going streaking! Yes! Oh, sorry. Sorry, we're going streaking through the quads and into the gymnasium. Come, everybody! Come on!

(END VIDEO CLIP)

ROBERTS: It's Will Farrell getting a little crazy in the movie "Old School." A little impairment can be a big risk when there's an open microphone around. Take Japan's finance minister. He bombed in a news conference last week where he appeared to be bombed. He claimed it was a combination of cold medicine and jet lag, but now he's stepping down.

CNN's Jeanne Moos is looking at the hazards of TWI, talking while impaired, caught on tape.

(BEGIN VIDEOTAPE)

MOOS (voice-over): Falling asleep at your own press conference is bad. But maybe it's worse to wake up and slur your speech.

Drunk, cried critics of Japan's finance minister. But he says it was just too much cold medicine.

(on camera): When it comes to examples of people apparently drunk at the mike, our cup runneth over.

(voice-over): With former Russian leader Boris Yeltsin, you could never be quite sure whether he was soused or just jolly.

But sometimes there's no denying...

UNIDENTIFIED MALE: I want to kiss you. I couldn't care less about the team struggling.

MOOS: From Joe Namath to Anna Nicole Smith...

ANNA NICOLE SMITH, ACTRESS: And if I ever record an album...

MOOS: She made French president Nicolas Sarkozy seem sober -- and maybe he was.

NICHOLAS SARKOZY, PRESIDENT OF FRANCE: (SPEAKING FOREIGN LANGUAGE)

President Sarkozy later explained: "I was not drunk, just out of breath from racing up stairs."

There's something mesmerizing about watching another human being in an altered state. Take the latest kid sensation -- David, after the dentist. His dad taped him as the anesthesia wore off.

DAVID DEVORE, YOUTUBE SENSATION: Is this real life?

MOOS: One viewer admitted to watching this 36 times.

D. DEVORE: I feel funny. Why is this happening to me?

MR. DEVORE: It's OK, bud. It's just from the medicine, OK?

D. DEVORE: Is this going to be forever?

MR. DEVORE: No.

(LAUGHTER)

MOOS (on camera): Oh, it's going to be forever, all right -- captured forever on YouTube.

(voice-over): But before you say how could his dad exploit the poor kid that way, the poor kid seems thrilled with his fame and expresses gratitude.

D. DEVORE: Thank you for watching David at the dentist.

MOOS: But don't believe every slur you hear. CRAIG FERGUSON, HOST, "THE LATE LATE SHOW WITH CRAIG FERGUSON": There are rumors in this country that President Bush is drinking again.

MOOS: An altered state might just be an altered tape.

BUSH: I thanked the leaders...

(LAUGHTER)

BUSH: Listen, when I call them on the phone...

(LAUGHTER)

BUSH: We're strategizing.

MOOS: Jeanne Moos, CNN, New York.

Cheers.

(END VIDEOTAPE)

CHETRY: Burning and falling.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: When I look up, I know it was something burning in the sky.

(END VIDEO CLIP)

CHETRY: The mystery blaze, new video, new questions.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: You don't see something like that during the day.

(END VIDEO CLIP)

CHETRY: Plus, GAP commercial chimp on a rampage.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: This is, to a large degree, her child. Who is now dead.

(END VIDEO CLIP)

CHETRY: And he's attacked before. Reports say he drank his tea, mauled his neighbor, then turned on police. You're watching the Most News in the Morning.

(COMMERCIAL BREAK)

CHETRY: Wow, that's a beautiful shot of our studio this morning with all those monitors, and bet you can guess what we're talking about this morning. Welcome back to the Most News in the Morning.

This video, by the way, of a fiery flash over the skies of Texas is sure to get the conspiracy theorists blogging. Many thought it was wreckage from two colliding satellites. Experts are now saying it was likely in their opinion a meteor, about the size of a pickup truck actually. But it is worth asking with so much stuff flying around up there is there any danger from this so-called space junk?

Well, Derrick Pitts, chief astronomer at the Franklin Institute Science Museum in Philadelphia joins me live this morning to talk more about it.

You know, it is -- it really is fascinating when you think about it. We have some 18,000 objects in orbit that the military tracks, and these are active satellites, as well as pieces of garbage, as well as other things flying around. What are the biggest concerns with all of that, that we have up there in orbit?

DERRICK PITTS, CHIEF ASTRONOMER, FRANKLIN INSTITUTE SCIENCE MUSEUM: Well, Kiran, the biggest concern of what we have up there in orbit really is two-fold. Number one the concern is, is there any possibility that these objects can collide with each other, which I think we found out the answer to that. Is there any danger that's posed to some of the articles that we have in space that actually are human rated like international space station? You know, we have humans up there flying around all the time.

CHETRY: Right.

PITTS: And the other one is what's the possibility that any of this can fall down to earth and cause some damage or injury.

CHETRY: And that is I guess the biggest concern and a real possibility. The debris from the "Columbia" shuttle disaster spread all over Texas, we remember when it came back down to earth. Sky Lab, of course, famously fell back in the '70s, parts and pieces falling. You know, oftentimes, because we are -- what -- 75 percent water, it does land in bodies of water in the ocean, but what are the real concerns, and what can we really do about it if the space junk is falling from the sky in more populated areas?

PITTS: Well, as you see, you know, this is the first time in a very long time that -- it's the first that two satellites have actually collided in space, unintentionally. And it's -- it's one of the few times that we've ever had to really worry about the possibility of anything striking a location on earth, or someplace or someone, but the real issue here is that the risk of this happening gets greater and greater and greater as we add more objects to low earth orbit.

Now some objects could stay in orbit for a very long time. Some things 10,000 years or more, but other objects might fall out of orbit earlier. And the risk of course is that some of these objects in some uncontrolled manner of re-entry could strike a populated area. And that's the real problem. Now, although, the risk of this is not necessarily all that great. We actually stretch the risk out and say that, you know, this is going to be in orbit for a long time so we don't have to worry about it. There's still the possibility that something like this can happen. And again, the more we put up there, the more we'll have to be concerned about this. So what do we do?

Well, one of the things we have to do is figure out how do we plan for the intentional demise of these objects in a safe way? In other words, can we plan to bring them down over an ocean area where there won't be much issue about this?

CHETRY: Right.

PITTS: Or can we actually figure out a system to collect some of this stuff so that it doesn't happen in the future?

CHETRY: All right, those were a lot of big concerns as well, what happens when you run out of space. You know, there's really no way to sort of track or govern what goes up there, so it's almost like a first come, first served, at least for now. But, you know, this is the future. We're going to be launching more and more of these.

Derrick Pitts, chief astronomer at the Franklin Institute Science Museum, thanks for joining us this morning.