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American Morning
Citi Circles the Drain; Republican Governors Turning Down Stimulus Cash; Arrest "Imminent" in Chandra Levy Case; Obama Taking on Economy; The New Face of Food Stamps; Gold in the Sewer; Youth of America Strapped with Stimulus Bill
Aired February 23, 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): Crunch time -- President Obama making decisions about your money. The next 48 hour, critical.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Investing in what we need, cutting what we don't and restoring fiscal discipline.
CHETRY: The plans to slash the federal deficit and the big changes for your paycheck. We're watching every dollar.
Plus -- stool's gold. White ash, literally the color of money. Discarded waste also flecked with gold. The raw sewage plant that's getting rich by mining in the muck on this AMERICAN MORNING.
(END VIDEO CLIP)
CHETRY: We won't linger on the raw sewage.
CHRISTINE ROMANS, CNN CO-ANCHOR: Yes, please.
CHETRY: It is a Monday morning after all. Welcome, it's February 23rd. I'm Kiran Chetry. John Roberts has the day off, and Christine, fresh from her vacation in Mexico, is here with us this morning.
ROMANS: I know. I'm so excited to be here this morning. Thanks for asking me.
CHETRY: Well, I'm glad you're here because we have a lot of financial news to get to.
ROMANS: That's right.
CHETRY: And, of course, you're an expert on that. But first we have to talk a little Oscars. Some of the Oscar parties just wrapping up this morning, and a lot to celebrate. A huge night for the underdog "Slumdog Millionaire," This is a movie that almost went straight to DVD because of the changes, you know, in some of those small art house studios and last night, in fact, it was a big hit. But some other winners as well.
Sean Penn scored his second actor, Best Actor award for "Milk." And six-time nominee Kate Winslet finally had her moment. She won Best Actress for "The Reader." And one of the most moving moments, the late Heath Ledger won Best Supporting Actor for his role of Joker in "The Dark Knight." Ledger's father, mother and one of his sisters accepted in behalf of his little daughter Matilda. And as we mentioned, "Slumdog Millionaire" hit the jackpot taking home eight statues including Best Picture.
(BEGIN VIDEO CLIP)
CHRISTIAN COLSON, "SLUMDOG MILLIONAIRE" PRODUCER: Together, we've been on an extraordinary, an extraordinary journey. When we started out, we had no stars, we had no power or muscle. We didn't have enough money really to do what we wanted to do. But what we had was a script that inspired mad love in everyone who read it.
(END VIDEO CLIP)
CHETRY: And from Hollywood to Bollywood, really an emotional reaction. That's from Mumbai. This is where the movie was set. Coming up, we're going to have more on the winners and also some of the most memorable moments from Hollywood.
ROMANS: A little movie with a lot of heart.
CHETRY: Yes. They were so excited there.
ROMANS: I know, I haven't seen it. Have you seen it?
CHETRY: It was wonderful.
ROMANS: I know John Roberts has seen it like twice.
CHETRY: Yes.
ROMANS: So, excellent. Good news for all of them.
All right, wonderful.
Turning now to the morning's other top stories. Reports that U.S. efforts to secretly train Pakistani troops in their fight against al-Qaeda and the Taliban are larger and more ambitious than previously thought. According to "The New York Times," more than 70 military advisers and specialist are providing the Pakistani army with terror intelligence and advising them on combat tactic. But military officials tell "The New York Times" Americans are not taking part in any fighting. The Pentagon had previously acknowledged about 30 Americans were training troops in Pakistan.
Secretary of State Hillary Clinton will make her first trip to the Middle East next week. That, just coming in from Palestinian sources this morning. She's expected to visit Israel and the West Bank. It will be her first official visit to the region in her new role as America's top diplomat, and it could be where she focuses most of her time over the next four years.
For the eighth straight day, gas prices have dropped. The national average according to AAA is now $1.91. That's down a little less than a penny overnight. Right now, just nine states and Washington, D.C. have gas prices over $2.00 a gallon.
CHETRY: We're also watching a developing story that could impact your bank and your money. The ""Wall Street Journal" reporting that Washington is in high level talks with Citigroup to take a larger ownership stake in the bank. Now you'll remember Friday, the Dow spiraled dangerously close to an 11-year low over fears that banks are in such bad shape the government may have to take them over essentially. Fears about nationalization of banks.
So what could this latest news mean for the markets and for your money this week? CNN's Stephanie Elam is "Minding Your Business" this morning and she joins us now with more.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: So you're flanked this morning by two business people.
ROMANS: I know.
ELAM: You should get all the information you need here. But this is something that we've been looking at. And yesterday -- not yesterday, Friday -- Friday, we saw that the markets tanked because there's such concern over this nationalization idea. But now, this morning in Europe and in Asia, stocks are rallying because of this nationalization idea. Let's take a look at it.
Citigroup is the main one that we're talking about here. Some speculate about Bank of America but the real target here being Citigroup that the government would step in and increase their stake in the bank. There's some discussion whether or not it would be 25 to 40 percent. Obviously, the "Wall Street Journal" reporting that the Fed could possibly take up the 40 percent stake in there.
Now, this would not cost taxpayers any more money. This would basically take money that they've already invested, the $45 billion from the $700 billion Wall Street relief plan that came out last fall. Take that number and basically take that money and convert it into common shares, which means they'd have more ownership in the company. I know it's a little confusing but the idea being it won't cost taxpayers any more money, but it would have them more say in the bank and shored up.
Some people think that the bad idea, nationalization, because, obviously who's running it is no longer the private sector. The Obama administration says they do want it to remain in the private sector. But on the other hand, people are saying, if there is a problem, you're not going to let it fail like Lehman Brothers.
ROMANS: Right.
ELAM: And actually shore up this problem and get the banks working again.
ROMANS: (INAUDIBLE) keep talking about it. What point is taking a bigger ownership stake, something that is the same thing as nationalization? I mean, where is that bright line where you're suddenly, the government ownership or control completely over the banking sector and where you just have the government taking a big stake in and trying to shore up?
ELAM: This shows you just how much this is an uncharted territory because you're looking at a conversation where before, you know, Friday nights after the market closes you'll hear the small bank in some state has been taken over by the feds, right?
ROMANS: Right.
ELAM: That is truly being taken over by the feds. Whereas investing money in, maybe take some of these toxic assets may not be as much. So that's the discussion that many people are having but it just shows you how much we're in at this place that we haven't been in before.
CHETRY: Right. And this other interesting because we didn't we do this with AIG, right? I mean, the government pretty much has an ownership stake in the works.
ELAM: Yes.
CHETRY: But the other - and with the billions of bailout, AIG got a huge chunk of that. But the other question is this stress testing of the banks. And this is interesting and I was just reading a little bit more about it today, that basically the Treasury Department is going to take a look and see the nation's biggest 15 banks how healthy are they and what is their potential to be able to weather future storms. And it's going to be interesting what they find out.
ELAM: And in what they do.
CHETRY: Right.
ELAM: What they do find it out if they decide that this bank cannot keep it on its own, how are they going to take care of making sure that more of these issues don't trickle down throughout because you can't just keep throwing money at a plan (ph) that's not going to rise. If it's not going to work out, it's not going to work out.
ROMANS: I think that stress testing starts this week, right?
ELAM: Yes, it has.
ROMANS: I think we're going to start hearing about that this week.
ELAM: Yes.
ROMANS: All right.
CHETRY: All right. Stephanie Elam, thank you.
ELAM: Sure. CHETRY: We'll be checking in with you throughout the morning.
ROMANS: And issue number one taking priority in Washington today. It's day 35 of the Obama administration and with five weeks under his belt, the president is honing in on the economy.
Today at the White House, a summit on fiscal responsibility with lawmakers, scholars and advocacy groups. Tuesday night, Mr. Obama will address a joint session of Congress about his agenda in primetime with the public watching. Thursday, the president will outline his priorities for next year's federal budget. That's just as the White House official says Mr. Obama plans to cut the nation's soaring deficit by half by the year 2013.
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OBAMA: On Thursday, I'll release a budget that's sober in its assessments, honest in its accounting, and lays out in detail my strategy for investing in what we need, cutting what we don't and restoring fiscal discipline.
(END VIDEO CLIP)
ROMANS: CNN's Suzanne Malveaux is the only reporter live at the White House this early in the morning.
And, Suzanne, the White House talking up an ambitious plan to cut the deficit. You know, what's behind that deficit given everything else on their plate right now?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Christine, obviously, they want to hit back hard and the criticism, withering criticism over the last couple of weeks. We're going to talk about the bailout plans, this rescue plans.
You talk to folks in Wall Street. We talked to a lot of folks on Main Street and essentially they believe that it's a black hole that they may just be pouring more and more money, that there's not a sense of accountability. SO obviously, the president wants to address that.
The other thing that he is trying to do is he's reaching out to moderate Republicans, kind of picking them off one by one. We saw the divisions over the weekend. The National Governors Association, you have them one side.
California Governor Arnold Schwarzenegger who was for the stimulus plan. On the other side, you had Louisiana Governor Bobby Jindal. Obviously, he's going to try to capitalize off of that split within the party, try to get more Republican support. And Christine is actually going to be meeting with those governors here at the White House later this morning - Christine.
ROMANS: Suzanne, how long can this -- I don't know, help in the long term, what he's planning here?
MALVEAUX: Well, certainly the hope is in the short term that there'll be some sort of turnaround, at least Republicans will be a little bit more amenable to listening to what he's doing here. But long term, think about it, there are big entitlement programs that the president really is trying to reform.
You talk about healthcare. You talk about Social Security. And ironically we heard from Senator Judd Gregg, the Republican who turned down that commerce secretary position, over the weekend praising President Obama saying I think we can work with you on Social Security reform. So that's one of the things that they're trying to do, establish those relationships and get the Republicans on the other side when it comes to those really big ticket items.
ROMANS: Big ticket items that are tricky and dangerous politically and have been for years.
MALVEAUX: Absolutely.
ROMANS: So that will be certainly interesting to see what progress can be made there.
Suzanne Malveaux at the White House. We'll talk you later. Thanks, Suzanne.
MALVEAUX: OK, thanks.
ROMANS: As for today's White House meeting that Suzanne just talked about, here's more in an "AM Extra."
It will actually operate like a group project in your kids' classroom. The meeting will kick off with some opening remarks, then a report on the state of the economy. Everyone in attendance will then break into small groups led by a senior administration official and they'll brainstorm on ways to fix things. Topics will include taxes, Social Security, healthcare and the budget. The groups will then meet again as a whole and report back to President Obama.
CHETRY: Well, no surprise that money is also the topic of conversation among the nation's governors. They're in Washington right now for their annual meeting. It wraps up today. And now some Republican governors are insisting that they will not take the stimulus money.
CNN's Jim Acosta is following this for us. A political move or in some of these states does it make fiscal sense to say no?
JIM ACOSTA, CNN CORRESPONDENT: Well, Kiran, it sounds as if some of these governors have opened up the stimulus menu. There are several governors who say there are parts of the stimulus they will take and parts they won't. Meanwhile, there are other governors who say they're here to go back for seconds.
(BEGIN VIDEOTAPE)
OBAMA: The last thing I want to do is hold up the food.
ACOSTA (voice-over): The highlight of the winter meeting of the National Governors Association, dinner at the White House. But some governors sound like they bellied up to the stimulus buffet, turning up their noses at parts of the plan they don't like, as if the package is government a la carte.
GOV. BOBBY JINDAL (R), LOUISIANA: We're going to look at every provision, see what's good for the state, see what's not, see what strings are attached. But the reality is the bigger philosophical point is this, I just have a fundamental disagreement with this package.
ACOSTA: Six Republican governors are hinting they may reject parts of the stimulus worth billions of dollars. Three of them hail from the poorest states in the nation.
GOV. MARK SANFORD (R), SOUTH CAROLINA: At times it sounds like the Soviet headquarters (ph) in Stalin's time.
GOV. HALEY BARBOUR (R), MISSISSIPPI: There are some we will not take in Mississippi.
ACOSTA: Mississippi's Haley Barbour says the plan's money for the unemployed could lead to a tax increase on some businesses.
BARBOUR: I mean, we want more jobs. You don't get more jobs by putting an extra tax on creating jobs.
GOV. CHARLIE CRIST (R), FLORIDA: It's not a matter of bucking the party, it's a matter of helping the people.
ACOSTA: Other Republican governors say this is no time for getting picky.
GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: If have you a team where half of it splits off, if it's a basketball team or football team, you would never win a game.
ACOSTA: Some state leaders talk as if there may be leftovers.
GOV. JENNIFER GRANHOLM (D), MICHIGAN: The governors who are trying to decide whether they're going to accept the stimulus money or not, we'll take. We'll take your money. South Carolina, I'll take your money. Louisiana, we'll take it.
ACOSTA: New Orleans Democrat Mayor Ray Nagin accused his Republican governor, Bobby Jindal, of political posturing.
JINDAL: We are still a center right country.
ACOSTA: Hailed as the future of the GOP in 2012, Jindal spoke to a Christian conservative group in Iowa after the November election.
MAYOR RAY NAGIN (D), NEW ORLEANS: And I told the governor personally, any dollars he does not want, we will take them gladly.
(END VIDEOTAPE) ACOSTA: No governor has said he will flat out reject all of the stimulus money precisely because doing so creates a major political problem. If the stimulus works, any opposing governor could be out of a job, Kiran.
CHETRY: Very interesting stuff. All right, thanks so much, Jim.
Well, a White House welcome for some culinary students. First Lady Michelle Obama inviting six aspiring chefs from my hometown, by the way, Gaithersburg, Maryland. Yes, it was the L'Academie de Cuisine in Gaithersburg, and they're learning about preparing official dinners.
Well, they arrived yesterday just hours before the Obamas had their first official dinner with the nation's governors. And the first lady was asked about her favorite dishes served from the White House kitchen.
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MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: There hasn't been anything that I don't like. There are some mean waffles and grits that are made in the morning that become a regular staple for some of us. I don't eat waffles every day.
(END VIDEO CLIP)
CHETRY: As for the president, he's a fan of the scallops and, of course, pie. The event was part of the first lady's ongoing mission to meet the local community. What a thrill, I'm sure, for those chefs.
ROMANS: Absolutely. Absolutely.
All right. Eight years later, still waiting for an arrest, the mother of Washington intern Chandra Levy says police has their man and the evidence to convict. The latest developments and a look back at this notorious case.
And Hollywood honors the best in the movie business. We've got the winners and memorable moments from the night. But first, a little Earth, Wind and Fire from last night's governor's dinner at the White House.
It's 12 minutes after the hour.
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CHETRY: Welcome back to the Most News in the Morning. It's 15 minutes past the hour.
Time to fast forward to the stories you'll see on CNN and CNN.com today.
There are new polls being released showing just how worried Americans are about the economy. In fact, the big headline from the CNN/Opinion Research poll out nearly this weekend, eight out of ten are now saying that things are going badly in the country.
Well, Pope Benedict XVI just named the next archbishop of New York. The pontiff has picked Milwaukee's archbishop, Timothy Dolan. The New York's archdiocese is made up of two and a half million Roman Catholics, 400 parishes, making it the second largest in the country behind the archdiocese of Los Angeles.
And Congress is back in session. All eyes would be on the lookout for Illinois Senator Roland Burris. He reportedly met with federal authorities over the weekend as part of their corruption investigation of former governor Rod Blagojevich. Burris is also accused of lying when he testified that he had no contact with Blagojevich staffers -- Christine.
ROMANS: Kiran, new details emerging in the eight-year mystery surrounding the murder of Washington intern Chandra Levy. Levy's mother says police told her an arrest is imminent. A source tells CNN it's Ingmar Guandique, an immigrant also serving 10 years for assault.
Our Susan Candiotti is looking back at this case and the victim's notorious connection to former Congressman Gary Condit.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Kiran and Christine, most Americans had no idea who Congressman Gary Condit was before Washington intern Chandra Levy disappeared. That quickly changed.
(BEGIN VIDEOTAPE)
CANDIOTTI (voice-over): Gary Condit became a household name as whispers grew louder and louder that Miss Levy herself had talked about, having an affair with a married politician from her home district. And for weeks after Levy vanished, news cameras followed Condit's comings and goings. The question kept coming, was the congressman holding back? Police never called him a suspect but seemed to leave themselves an opening.
CHIEF CHARLES RAMSEY, WASHINGTON POLICE (RET.): We have nothing at this time to connect him with the disappearance of Chandra Levy.
CANDIOTTI: At first, the congressman sidestepped personal questions about the case.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": Did you have a relationship with Chandra Levy.
REP. GARY CONDIT (D), CALIFORNIA: You know, we're not going to go into that. I had nothing to do with her disappearance. But all this attention on me and it takes away from the seriousness, just the seriousness of this tragedy. It's about a missing person and somebody knows. And somebody knows what happened.
(END VIDEO CLIP)
CANDIOTTI: Condit eventually admitted to an affair and the notoriety sank his political career. He lost in a Democratic primary.
CONDIT: I want to thank the voters of the 18th congressional district for allowing me to serve in Congress for 11 years. It will be 12 years when I finish.
CANDIOTTI: Police had also questioned Ingmar Guandique who was already charged for attacking two other women in the same park not long after Levy vanished, but was never charged in her case.
Nearly eight years later, a source tells CNN, Guandique is the key suspect. Some now question whether the early focus on Condit let the trail run cold.
HAROLD COPUS, RETIRED FBI SPECIAL AGENT: It wasn't proper. It wasn't fair, but that's what happened, and it does happen in a case. And it happened really big time in this one.
(END VIDEOTAPE)
CANDIOTTI: In a statement, the former congressman described "an insatiable appetite for sensationalism" blocking what he called a search for real answers. Now, Condit says he plans to tell his side of the story -- Kiran and Christine.
CHETRY: Big news from Oscar night. We're behind the scenes with the winners, the glitz, the glamour, the surprises.
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KATE WINSLET, OSCAR BEST ACTRESS WINNER: It really is a dream coming true.
(END VIDEO CLIP)
CHETRY: On Hollywood's biggest night ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
CHRISTIAN COLSON, "SLUMDOG MILLIONAIRE" PRODUCER: As you can see, our film was a collaboration between hundreds of people. I'm so happy that so many of them could be with us here tonight to share this moment. Together, we've been on an extraordinary, an extraordinary journey.
(END VIDEO CLIP)
CHETRY: Well, it was a fairy tale ending for a movie that almost never made it to the theaters with "Slumdog Millionaire's" producer Christian Colson. The film swept almost every category it was nominated for including the coveted "Best Picture," but there were still plenty more Oscar gold to go around.
Here's CNN's Kareen Wynter with the night's most memorable moments.
(BEGIN VIDEOTAPE)
KAREEN WYNTER, CNN ENTERTAINMENT CORRESPONDENT (voice-over): With tongue firmly in cheek, host Hugh Jackman kicked the big show with a low budget opening number that fit in a funny way these hard times.
In a new twist this year, groups of previous winners presented the major categories. First up, supporting actress where Penelope Cruz won for her feisty performance in Woody Allen's comedy, "Vicky Cristina Barcelona."
PENELOPE CRUZ, OSCAR BEST SUPPORTING ACTRESS WINNER: Has anybody ever fainted?
WYNTER: Yes, perhaps the evening's most poignant moment was the late Heath Ledger winning the Supporting Actor prize for his riveting turn as the Joker in "The Dark Knight." Ledger, whose family accepted the award, becomes only the second actor to win a posthumous Oscar.
SALLY BELL, HEATH LEDGER'S MOTHER: Tonight, we are choosing to celebrate and be happy for what he has achieved.
WYNTER: After five tries, Kate Winslet finally won that Oscar nabbing Best Actress for her role as the Nazi prison guard in the World War II drama "The Reader".
WINSLET: Thank you so much. My God.
SEAN PENN, OSCAR BEST ACTOR WINNER: You commie homo-loving sons of guns.
WYNTER: A good-humored Sean Penn accepted the second Oscar of his career, Best Actor for the biopic "Milk," about assassinated gay political leader, Harvey Milk.
STEVEN SPIELBERG, OSCAR PRESENTOR: "Slumdog Millionaire."
WYNTER: What a night for "Slumdog Millionaire." The rags to rupees tale of a young guy from Mumbai led the field with eight Oscar wins, including Best Picture and Best Director for Danny Boyle.
DANNY BOYLE, "SLUMDOG MILLIONAIRE" DIRECTOR: Most of all we had passion and we had belief. And our film shows that if you have those two things, truly anything is possible.
WYNTER: Kareen Wynter, CNN, Hollywood.
(END VIDEOTAPE)
ROMANS: I love Kate Winslet. I really always have loved her.
CHETRY: She's great.
ROMANS: But that -- the story "Slumdog Millionaire" really, really has a hot of heart. It really took them by storm.
CHETRY: I love how the two little kids that played the young Jamal and Latika (ph) were also brought in from where they live in Mumbai. So it's really, I mean, can you imagine to be swept up...
ROMANS: I know.
CHETRY: ... flown to L.A.? I mean L.A. is just, you know, sort of a whole planet on its own let alone, you know, coming from India.
ROMANS: And then look at the reaction in Mumbai, too. I mean, we, of course, Oscar fever here in this country but in Mumbai, home of Bollywood, look, I mean, amazing.
CHETRY: They're so proud. Yes.
ROMANS: A lot of pride.
CHETRY: And rightfully so.
There was actually, you know, split opinion in India. A lot of people say you're portraying sort of the worst of our country, and there's so many other rich and wonderful parts of our country.
ROMANS: It's just one part of a very, very big diverse and amazing country, a real magical country. So, congratulations to everybody, really incredible.
All right. Citigroup could be in big trouble. So will the government step in and take a bigger stake? Could that change the president's next move at the beginning of a busy week for the economy? We'll ask a pair of experts.
And surviving on food stamps. We'll check in with our Sean Callebs who's finding out how hard it is to do firsthand.
It's 25 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: Welcome back to the Most News in the Morning.
A live look out at New York City where it's 27 degrees right now. Going up to I think 35. A little cloudy today.
It's 28 minutes after the hour. Here's a look at your top stories.
North Korea has deployed new medium-range ballistic missiles, an expanded special forces training all last year, according to South Korean officials. Seoul military told local media it thought these missiles can travel around 1,900 miles and that could put U.S. military bases on the island of Guam at risk. The South Korean report calls Pyongyang's military an immediate and grave threat.
The top Republican on the Senate Foreign Relations Committee says it's time to rethink U.S. policy towards Cuba. Indiana Senator Richard Lugar says the strict trade embargo started by President Kennedy in 1962 has failed to push the communist country toward democracy. President Obama is promising a fresh look on restrictions toward Havana.
Former Secretary of State Condoleezza Rice has nabbed a three book deal from Crown Publishers reportedly worth at least $2.5 million. Her first offering is set to be a memoir about her years at the State Department under President Bush. Rice's book is planned for the year 2011.
CHETRY: Christine, thanks.
Well, the White House has a busy economic agenda on its hand right now, plans to cut the federal deficit in half by 2013. Also, a new budget to launch and today's economic summit taking place in Washington. All of this comes as reports surface that the government could end up having to take a bigger stake in Citigroup as the troubled bank circles the drain.
For more, I'm joined now by managing director of the Economic Cycle Research Institute, Lakshman Achuthan, and also Harvard economist, Jeffrey Miron.
Thanks to both of you for being with us this morning.
UNIDENTIFIED MALE: Thank you.
CHETRY: So, I'm going to ask you, guys, some questions. Feel free to jump in. Lakshman, I'll start with you.
The report out this morning about the high-level talks with Citigroup to take a larger ownership stake. Apparently, the Dow tanked Friday amid some of the speculation, but what is the concern about nationalizing large banks and really how is it any different than what we've seen the federal government do in terms of these big bailouts with AIG for example?
LAKSHMAN ACHUTHAN, MANAGING DIRECTOR, ECONOMIC CYCLE RESEARCH INSTITUTE: Right. Well, there's -- I mean, there's a whole host of issues here. The concern on nationalizing it is, you know, it goes against the free market nature of, you know, the U.S. And so, fundamentally, there's always a worry whenever this starts to happen. However, you can't afford to have a run on the bank. You can't afford to have a large institution especially something that's so important to consumers like Citibank actually failed.
And so when the share price goes below the cost of withdrawing money out of an ATM of theirs, you have to wonder where things are headed. And here, you know, what will be very important is how the government goes about continuing to shore up Citibank. If it's in it for the long haul that's going to raise a lot of eyebrows. If it's kind of, you know, we're going to help you get through this recession and then -- and then, you know, have you fully private again, that's another thing.
CHETRY: Jeffrey?
JEFFREY MIRON, ECONOMIST, HARVARD UNIVERSITY: I think that they may well be on the verge of doing what people are calling nationalization, but it should be called something else. It should called receivership and it should be thought of us basically taking it over temporarily with a purpose of selling it off once its books have been cleaned up and once the shareholders' value has been basically zeroed out.
I think it isn't too big to fail. I think that's really exactly what they need to do rather than putting more taxpayer money into it.
CHETRY: Well, yes.
MIRON: Of course, that's bad news for Citigroup shareholders, but I think it's better new for the taxpayers.
CHETRY: Well, it's bad news all around for Citigroup shareholders at end of the week and $1.95 a share.
Another big headline this morning, President Obama is taking aim at the U.S. deficit.
MIRON: Right.
CHETRY: By the end of his first term, he wants to have the deficit, why now and how realistic is this? Jeffrey, I'll start with you on this question.
MIRON: Well, I think now is a good time, because he's just announced these huge increases in spending and people are worried about the future fiscal position of the U.S. So saying that he's paying attention to the long-term deficit situation is a very good idea.
In terms of what he's proposing, I suspect that it's wildly optimistic. First, the tax increases will probably not produce as much revenue as it being forecast. And second, he hasn't really touched the two really important programs that account for a huge fraction of our future liabilities on that social security and Medicare. Unless he does something about those, he's just kicking a can down the road. Down the road.
CHETRY: And Lakshman, what he's referring to, of course, social security, Medicare, entitlement program, all of that -- he aims to do this he says by letting the tax cuts expire on people making $250,000 or more, and also for stopping the spending in the Iraq war. Is that enough?
ACHUTHAN: No, I mean, look, all of this, you know, there's a lot of political, ideological debates that are longer term debates that have nothing to do with how we're going to get out of this recession or quite frankly balance the budget in the next few years. It really depends on where the business cycle goes.
If this is a short recession with a strong recovery, you'll make that target the president's target, you might even beat it. However, if this recession drags out or if you have a weak recovery, you could forget about it. It's not going to happen.
So, it really does depend on where we are headed in this business cycle and some assumption that we're going to have a recovery towards year end or it's going to be strong enough to lift all boats is just that. It's an assumption. It's not an objective read of where things are headed.
CHETRY: Well, you two probably have studied this much more than the average person. So I want to ask you because people have been making comparisons of this stimulus to FDR's new deal. We've heard the comparisons being made over and over again. Now, some economic analysts, though, were pointing out that FDR's efforts to balance the budget in 1937 backfire and ended up triggering a new recession within the broader depression.
Are there lessons to be learned here and are these things that the Obama administration should maybe being paying attention to this morning, Jeffrey?
MIRON: Well, I think that, overall, there were certainly some big missteps with respect to fiscal policy and the depression. We did raised taxes a number of times, which is clearly counterproductive thing to do both in recession and perhaps longer term.
I think there are also other missteps as part of the new deal that just confused markets and made it harder for them to get on the path to recovery. I don't think we're repeating any of those missteps so far, but raising taxes now, even if it's not going to kick in for two years is a bad signal for the taxpayers affected may cause them to reduce their spending now. So I'm sort of surprise to see that part of the proposal.
CHETRY: Right. And quickly, last word, Lakshman.
ACHUTHAN: Yes, it goes beyond taxes. It's also spending. Government sitting in here trying to smooth out the cycle by stepping in and spending money here, and in doing that, it's very important not to pursue too harshly a balanced budget initiative until you have a sustained recovery going. We've got that lesson from the 1930s, and we also have it from the 1990s in Japan where they triggered a recession in 1997 that really hurt cut that economy off at the knees.
CHETRY: Great discussion this morning from both of you, gentleman. Lakshman Achuthan, as well as Jeffrey Miron, thanks to both of you.
UNIDENTIFIED MALE: Thank you.
CHETRY: Christine.
ROMANS: Kiran, a couple of quick programming reminders. The economy will be the big focus on President Obama's address to a joint session of Congress. That's tomorrow night. You can see it live here on CNN and cnn.com starting at 9:00 Eastern. And the president's address also seems to have like a pretty good time to take stock of things through the eyes of African-Americans. Tune in Wednesday and Thursday at 8:00 Eastern for "BLACK IN AMERICA," a provocative in-depth look at a subject most networks won't touch. It's 35 minutes after the hour.
The surprising new face of families on food stamps.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: You know, this is pretty much a meal for like a stew or a gumbo.
ROMANS (voice-over): Who they are and how they eat when the money runs out.
UNIDENTIFIED MALE: Everybody's hurting. It's not just -- not just the lower class people.
ROMAN: Ahead on the Most News in the Morning.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ROMANS: Welcome back to the Most News in the Morning.
Programs like food stamps are a saving grace for many families though feeding a family on just a few dollars a day is no easy task.
CNN's Sean Callebs is finding out firsthand what it's like to try to survive on food stamps. And he joins us now live from New Orleans.
How's it going, Sean?
SEAN CALLEBS, CNN GENERAL ASSIGNMENT CORRESPONDENT: Well, Christine, I start at $176 at the start of the month. I'm down to just $16.10. But I do have a lot of food on hand. I'm doing pretty well.
I got some fresh fruit I just got the other day. Some vegetables here. I'm going to make an omelet this morning. A lot of pasta, rice, enough to keep me going easily I think through the end of the week, February 28th, but, boy, this is a tough time of the month for a lot of people all across the country.
We went to a rural area in Louisiana to see how people there fare as the month winds down and the cupboard gets a lot more bare.
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CALLEBS (voice-over): For Jimmy Allen it's back breaking work, repairing tires for 18-wheelers, one of two jobs he holds down that brings in $500 a week. As the end of the month creeps up and the cupboard becomes bare, Jimmy and his wife Karlena often worry about feeding their four children and two other children in their care. KARLENA ALLEN, MOTHER: This is just mostly odds and ends and stuff, and stuff I just didn't use yet.
CALLEBS: They've been depending on food stamps for years and receive about $580 each month.
K. ALLEN: It's never enough. By the third week of the month, I'm completely out. My wallet completely out.
JIMMY ALLEN, FATHER: I don't want to be on food stamps. You know, it's a put down -- I won't say a put down, but it's a let down for me to know that I have to ask somebody else for help.
CALLEBS: They live in rural Louisiana near the town of Houma, where the economy is tied to the fortunes of the oil and gas industry.
J. ALLEN: Everybody is hurting. It's not just -- not just the lower class people. Everybody is hurting.
CALLEBS: To stretch a dollar even further, the Allens order from Angel Food Ministry. The Georgia-based nonprofit says about half a million families order food online from them each month.
In this area, the boxes of food are distributed through the Allens' church. For $30, they receive about $90 worth of groceries.
K. ALLEN: This is pretty much a meal for like a stew or a gumbo or something like that.
CALLEBS: Jimmy Allen says there is a fine line between feeding his family and not having enough to go around.
J. ALLEN: One bad month and then I don't eat because my kids are going to eat.
(END VIDEOTAPE)
CALLEBS: Well, we've been getting just hundreds and hundreds of emails on the blog site for the AMERICAN MORNING site, and people saying, look, $176 for one person, that's a fortune to live on for an entire month.
I've got to admit. I made a lot of mistakes early on shopping, like I bought these prepackaged items, things like this. I mean, they're fine, but they're not nearly as economical as you can. You know, when you go out shopping, you can certainly save a lot more money by buying in bulk.
And we've had some good news, too, Christine. Big stores like Sam's didn't take food stamp cards at the start of this project, but now they have started. They said they've had a whole lot of calls from people all across the country. So, they're going to reach out in this tough economic time to help people out.
ROMANS: And Sean, at my Farmers Market that I go to, they do accept food stamps at my Farmers Market, which is -- which is great because, you know, the processed food is not as good for you and it is more expensive. But what have you learned overall?
CALLEBS: Well, I think that you can (OFF-MIKE) $0.28 a day, (OFF-MIKE) even the state, the DSS folks that I spoke with ahead of time. But you can live like that. You just have to -- you're always thinking about what you're going to eat next, how much money you have, what's in the cupboard, what's in the fridge, it's just constantly on your mind. That, I think, is the biggest thing I'm taking away.
ROMANS: All right. And you get to -- when you're done, you're done. The problem is so many millions of Americans aren't. They still are going to have to rely on this for some time ahead. And there are people who are going to have to be signing up as we go forward.
Sean Callebs. Thanks so much for that, Sean - Kiran.
CHETRY: Well, still ahead, former President George W. Bush meeting the neighbors. Find out where he was spotted and the job that he was offered.
Also, the new black gold. Why some are searching sewage in hopes of striking it rich.
It's 43 minutes after the hour.
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CHETRY: Welcome back to the Most News in the Morning. It's 46 minutes past the hour.
Taking a look right now at Austin, Texas. Thanks to our friends at KVUE. It's 37 degrees right now in Austin, but, hey, it's going to be 72 and sunny. Wish we were there.
Meanwhile, former President George W. Bush out on the town in Dallas. He actually stopped by a hardware store that had offered him a job earlier in the month to work as a greeter. Well, the former president joked that he was looking for a job. No working papers were exchanged. Instead, the former president picked up some flashlights, some batteries and a can of WD-40, which has many uses besides just de-squeaking things.
Forty-six minutes after the hour.
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CHETRY It's 48 minutes past the hour.
Hidden treasure in the most unlikely of places -- gold in the sewer.
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KYUNG LAH, CNN INTERNATIONAL CORRESPONDENT: When you look there, do you see gold?
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CHETRY: Who's getting rich from sewage. It may sound gross but it's worth a fortune -- ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
ROMANS: Welcome back to the "Most News in the Morning." As household budgets get tighter, people are taking desperate measures to make ends meet. They'll do anything and look anywhere to find the resources they need to stay afloat. Well, workers in one Japan town literally struck gold in the unlikeliest of places -- the sewer. Could the answer to America's crisis be just underneath the manhole?
CNN's Kyung Lah has more.
(BEGIN VIDEOTAPE)
LAH (voice over): This is a tale about hidden treasure in just about the last place you'd think to look. The waste -- sewage, to be exact.
(on camera): When you look there, do you see gold?
(voice over): "You can't see it," says sewage plant supervisor Yoshida Nakayama, "but it's there." "It's everywhere in our sewage treatment plant," Nakayama explains.
The sewage flows in. And gets burned down to into industrial waste. Nakayama had heard the old tales like this gold square made from the soil in the ground. So, one day, he checked. He couldn't believe his eyes. This white ash literally the color of money, barrel after barrel of it contained grams of gold at a concentration 40 times higher than one of the world's leading gold mines. This hardened glaze also flecked with gold. And today's high-priced gold market, the waste equals nearly $200,000 a year. The town of Suwa, not to be confused with sewage, in Nagano Prefecture had struck gold.
"We were throwing this away before, paying to get rid of it," says Nakayama. "But we're making money out of it now, all thanks to local resources."
(on camera): You've heard the phrase, there's something in the water. Well, Nagano has an abundance of these natural hot springs and in the water are a number of minerals, among them, gold.
But gold is also used here at this manufacturing plant to coat electronic parts. The city says now that they think about it, it only makes sense that some gold might end up going down the drain.
(voice over): Suwa's mayor says that at a time when city budgets worldwide are struggling, this is a gift. "We found gold where we would never expect to find it." He suggests to other mayors, "maybe you should look closer at your junk, too."
At a time of recession, there's not a lot of good news going around. UNIDENTIFIED MALE: Happy.
LAH (on camera): Happy?
UNIDENTIFIED MALE: Happy.
LAH (voice-over): The town of Suwa says maybe, just maybe, it also comes down to where you look.
Kyung Lah, CNN, Suwa, Japan.
(END VIDEOTAPE)
CHETRY: On campus and worrying and not just about grades.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: To master this semester. That's pretty much how I'm living.
CHETRY (voice-over): The whole new meaning of financial aid.
UNIDENTIFIED MALE: It's always in the back of my mind when I'm in class or taking a test or something.
CHETRY: AMERICAN MORNING investigates.
UNIDENTIFIED FEMALE: We've got to invest in our young people.
CHETRY: Plus, "Slumdog" sweeps up at the Oscars, but as the child actors celebrate, their parents still home in the slums. We're live in Mumbai.
You're watching the Most News in the Morning.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
ROMANS: The youth of America helped create the swell that got President Obama into office, but now many young voters are worried about footing the stimulus bill for decades to come. It's something Senator John McCain and some other Republican lawmakers referred to as generational theft.
Joining us now live from Philadelphia is Yoni Gruskin, founder and executive director of Concerned Youth of America.
Yoni, welcome to the program.
YONI GRUSKIN, EXECUTIVE DIR., CONCERNED YOUTH OF AMERICA: Thank you.
ROMANS: You're supposed to be in college and be in this bubble, right, where you're studying and you're building for your future and you're sort of insulated from what's going on, the ins and outs of the economy outside. You're an economics major, I think, too. Are you insulated there? Are you insulated from what's happening?
GRUSKIN: We haven't. But this economic downturn is affecting everybody and most people on the college campuses are very concerned about the job prospects coming out of college. You know, a lot of people this time last year had jobs set up. The seniors this year aren't so fortunate. And although I'm just a sophomore, I know that three years from now, the economic situation isn't supposed to look much better. So, you know, this economic downturn that's affecting all sorts of people of all ages, but definitely people on college campuses are very worried, very concerned about the future going forward.
ROMANS: I was in college during a recession. And I can remember people weren't even getting like the obligatory form letter back when they return their resumes or when they tried to get an interview somewhere. I mean, it was almost as if, you know, we didn't exist. And really, people were terrified about it. You add on top of that, the cost of the stimulus, the cost of the bailout, the cost that, as Senator John McCain called generational theft. I mean your generation will and our grandchildren, frankly, will theoretically be paying for all of this.
GRUSKIN: As concerned as we are about this economic downturn, we're a little bit more concerned about what's out there on the horizon for us. As you know today, President Obama is having a fiscal stimulus -- or rather a fiscal responsibility summit. We're hoping that lawmakers and congressmen and the president will look forward to the bigger dangers that are out there on the horizon.
Right now, the government has something like $56 trillion of unfunded liabilities. This is going to affect the type of -- the quality of life that our generation is going to inherit. So, we want to make sure that the government can do two things at once -- that they can chew gum and talk at the same time.
ROMANS: And the president on the campaign trail, of course, said that you can be focused on more than one thing. So, they're focusing on both spending money to get us out of this economic malaise and at the same time, also talking about spending less money eventually so that we can get out of the huge deficit that we're building.
Do you find your classmates and people around campus, do they understand there's this twin, twin, very serious problem?
GRUSKIN: Right now, people are focused on the short-term issues facing the economy. You know, the goal of our organization, Concerned Youth of America, is to educate our fellow peers about the looming problems ahead and to make sure that not only do they understand these issues , but they're mobilized and they're willing to pressure their lawmakers, their local congressmen, to act on these issues because until there's some kind of political reconciliation on what needs to happen, we're not really going to make the right step towards the solution we need.
ROMANS: All right. Yoni Gruskin, thanks so much for joining us here. Great to talk to you. GRUSKIN: Thank you.
ROMANS: Kiran.
