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American Morning
Obama Sells Recovery Plan on Leno, Faces Criticism for Special Olympic Remark; Palin Rejecting Almost Half of the Federal Stimulus Money; Banking on Women in Recession; Class Lessons from the First Lady
Aired March 20, 2009 - 06:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Good morning. It's Friday. It's March 20th. I'm Kiran Chetry along with Christine Romans. Good to see you this morning.
CHRISTINE ROMANS, CNN ANCHOR: Good morning. It's Friday and it's the first day of spring.
CHETRY: It is the first day of spring.
ROMANS: First spring weekend of the year. Very exciting stuff.
CHETRY: That's right. Can't wait.
All right. We have a lot going on this morning. We're rolling out a type of coverage that you won't see anywhere else on TV. It's part of our exclusive "ROAD TO RESCUE" series. We're taking aim at the economy and the problems it's posing for the country and your family.
We're jam-packed with stories with guests and tips to help you navigate the financial downturn. And we want to include you in our coverage so you can call our new show hotline, 877-MY-AMFIX. That's 877-692-6349. You can sound off whatever's on your mind or you can ask us a question.
We also will receive e-mail from you and if you want to send in an iReport, we love that as well. You can head to our Web site CNN.com/am.
All right. With that said, let's get right to it this morning. Here are some of the stories that we're going to be breaking down in the next 15 minutes.
President Obama in late night. He sat down with Jay Leno. The jokes were there but also some serious talk about the economy. We'll have the highlights that you missed, and we'll also take a look at whether the White House delivered a message that could give Wall Street a boost of confidence today.
And also this morning, if they won't give it back Uncle Sam will take it back. The House passing a bill that would impose a bruising 90 percent tax on big bonuses paid to executives at companies that were bailed out by the government. We're going to take a look at the new questions that this legislation is raising this morning. We also have more of our exclusive interview with Treasury Secretary Timothy Geithner. He talks about AIG plus a lot more.
And back in the spotlight, another exclusive interview this morning. Former New York Governor Eliot Spitzer talking to CNN about the AIG debate and life after the prostitution scandal that put him out of office.
ROMANS: But we begin with a story that already has people talking this morning, President Obama's appearance on "The Tonight Show with Jay Leno," in what was the first time a sitting president has ever appeared on a late night talk show.
There was talk of life in the White House and finally a time line on the first puppy. He'll arrive after the president gets back from next month's NATO summit. But mostly last night, the president zeroed in on the economy. He praised his embattled treasury secretary, Timothy Geithner, and pushed his economic recovery plan. He also assured viewers America will make it through these tough times.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: What people should not do is forget that what has built America has always been a faith and a confidence in the future. And our future is bright if we take some smart steps right now, and that's what we're working on in Washington and I think if everybody stays focused on getting through these tough times, the future is going to be very bright for all of us.
(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 president really trying to get back on this message that the economy can be turned around, isn't he?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And, Christine, it really was a format that he was very comfortable with. You could tell he was casual. He was trying to use his charm in a way and obviously trying to steer the conversation to talk beyond AIG in this crisis, to quell the concerns of the American people but also kind of to bring back that positive message, the talking points from last week, where he talked about an optimistic view of the economy.
I want to you take a listen.
(BEGIN VIDEO CLIP)
B. OBAMA: I think the most important thing that we can do is make sure that we put in a bunch of financial, regulatory mechanisms to prevent companies like an AIG holding the rest of us hostage, because that's the real problem. The problem is not just what's happened over the last six months. The problem is what was happening for years, where people were able to take huge excessive risks with other people's money.
(END VIDEO CLIP)
MALVEAUX: So, Christine, you can tell and in speaking with White House aides they are very, very eager to get beyond the AIG controversy, to talk about the bigger economic picture. Obviously, that is something that the president was trying to do last night and will continue to do in the weeks ahead -- Christine.
ROMANS: And, Suzanne, some other news developing overnight. The president really sending a video message around midnight directed straight at the people of Iran.
We have it; I want to take a look at part of it.
(BEGIN VIDEO CLIP)
B. OBAMA: On the occasion of your new year, I want you, the people and leaders of Iran, to understand the future that we seek. It's a future with renewed exchanges among our people and greater opportunities for partnership and commerce. The future where the old divisions are overcome, where you and all of your neighbors and the wider world can live in greater security and greater peace.
(END VIDEO CLIP)
ROMANS: Speaking, Suzanne, directly to the people of Iran, what's the strategy with releasing a video like this?
MALVEAUX: Christine, it's really unprecedented when you think about it. The Bush administration normally releases a paper statement saying happy new year to the Iranian people, but essentially, this is a real departure from what we've seen before. It is a sign of respect to the Iranian people and to the Iranian regime.
And you bring up a very good point, Christine, which is this video message really kind of in a YouTube way, it goes around the Iranian regime directly to the people. And so you see what's happening here is that he really wants to move this diplomacy forward with Iran but obviously saying that we're not going to accept nuclear weapons but showing that sign of respect, reaching over to Iran to say look, we are willing to talk. That's a campaign promise that he made. It's something that he's going to try to keep.
ROMANS: All right. Suzanne Malveaux at the White House this morning. Thanks, Suzanne.
MALVEAUX: Sure.
CHETRY: President Obama is also telling Jay Leno that he was stunned by the $165 million in bonuses that AIG was paying its executives.
Meantime, Congressional outrage turned to action. House lawmakers passing a bill to get that bonus money back. It's a move that critics say violates the constitution. It would impose a 90 percent tax on bonuses awarded to employees of bailed out companies. Republicans calling it political theater to cover up the failure of the president's economic team to block the AIG bonuses in the first place.
CNN's Stephanie Elam is following developments for us this morning, with more on exactly what the House did yesterday.
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: And there are a lot of questions about this, Kiran and Christine, and a lot of people wondering if really this is a good idea. Let's break it down just a little bit here.
Obviously, they're targeting AIG but this would apply to all of the companies that received TARP money over $5 billion. Also, this would be retroactive to December 31st of 2008. So even if some of the former employees who left earlier this year, they would also be tied into that and would be taxed on this level.
The other point to really point out here, this is for people making $125,000, if they're married, filing single or filing separately, I should say, and $250,000 for an entire household. So that means even someone who's making money at another company would fall into this as well if they're filing jointly.
Former employees would also like to hear this one, current employees, too. When you add in the nearly 1.5 percent tax for Medicare on top of normal local and state taxes, it's possible that the people getting these bonuses could actually end up paying more than they actually got in bonuses. So for a lot of people that's going to cause a problem here because it's going after everybody.
And, you know, some of these divisions were actually making -- making profits. The whole company may have had issues but you got people in there and if you made, you know, $250,000 you'd fall into that. So I think a lot of people are looking at this going let's slow down here. The Senate will look at it next week but obviously it went to the House quite easily.
ROMANS: It moved very quickly through the House. It really moved very quickly.
ELAM: Very quickly.
ROMANS: Thousands of people could be affected so...
ELAM: And also it doesn't mention anything about what happens if these companies pay back the TARP money. What would happen to that then? So, there's more to discuss that.
ROMANS: OK.
CHETRY: Thanks, Stephanie.
CHETRY: Well, pretty incredible how much outrage the AIG bonus story has generated this week. And in the past few days, we've received thousands of calls to our 877-MY-AMFIX hotline. We've also taken in countless iReports and they continue to roll in this morning. People are angry with AIG and frustrated with Congress as well. Take a look.
(BEGIN VIDEO CLIP)
SAL STEELS, CNN IREPORTER: You don't give people who ran their company into the ground billions of dollars. I think it's a little late to ask these corporate executives to grow a conscience. They got away with it and our government helped.
KEITH CALVERT (ph), UPLAND, CA: My name is Keith Calvert (ph) in Upland, California.
And Congress and the Senate and the president unanimously should demand AIG be taxed for every penny that they're stealing from the American people, because it's not their money, and they did not earn it.
DAVID SEAMAN, CNN IREPORTER: Enough Congress. Enough with the AIG thing. We were the ones who are upset about it, the taxpayers, and now you guys are pretending like you had no idea what was going on.
(END VIDEO CLIP)
CHETRY: All right. Some of our iReporters today. We'd love to hear from you as well. Send us an iReport or call our hotline, 877- MY-AMFIX.
ROMANS: The growing AIG bonus scandal turning up the heat on Treasury Secretary Timothy Geithner, who's already on the hot seat because of the economy. In an exclusive interview with CNN's chief business correspondent Ali Velshi, Geithner addressed Senator Chris Dodd's claim that treasury officials pushed for a stimulus loophole that made the AIG bonuses possible.
(BEGIN VIDEOTAPE)
ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Senator Dodd said that he had a clause that was put into the stimulus bill that basically allowed these payments to be made to people at AIG in this particular unit and he says that somebody at treasury asked him to put it in.
TIMOTHY GEITHNER, U.S. SECRETARY OF TREASURY: Let me start by saying that Chairman Dodd has played an enormously important leadership in this as he's doing the right thing in trying to make sure that the assistance we provide don't go to benefit people that shouldn't benefit from these things. And I enormously impressed by the importance of what he's trying to do in this case.
VELSHI: But did somebody, have we figured out who told him to put this clause in?
GEITHNER: On this specific provision?
VELSHI: Yes.
GEITHNER: We expressed concern about this specific provision because we wanted to make sure it was strong enough to survive legal challenge, but we also worked with him to strengthen the overall framework. And his bill has this very important provision we're relying on now to go back and see if we can recoup payments that were made that there was no legal ability to block.
VELSHI: How do we deal with what seems to be tone deafness on Wall Street? How can these announcements come out? How are people so divorced from the reality of how angry Americans are about this?
GEITHNER: It is enormously damaging to everything we're trying to do. You know, all it does is feeding this great loss of confidence in the quality of judgments about individuals presiding over these financial institutions, and you know they're going to have to demonstrate a greater sense of responsibility going forward if they're going to earn back the confidence to the American people. But you're right, it's very damaging and I completely share the basic frustration across America about what's gotten us to this place.
(END VIDEOTAPE)
ROMANS: Some in Congress have called for Geithner's resignation.
And a programming note for you, this weekend Ali Velshi and the CNN Money Team investigate the AIG scandal in a special broadcast, "AIG: FACTS AND FURY" Saturday and Sunday night at 8:00 Eastern right here on CNN - Kiran.
CHETRY: All right. Well, a quick check now on some of the other stories this morning. Some answers now in the death of actress Natasha Richardson.
The medical examiner is confirming that yes, it was the result of that fall she suffered on the ski resort. They say it was a blood clot between the brain and the skull after she fell on a beginner's slope during a ski lesson in Quebec on Monday.
Meantime in Manhattan, the lights on Broadway were dimmed last night in memory of Richardson. She won a Tony award for her role in "Cabaret." Actor Liam Neeson is her husband, was in the theater district for an emotional vigil for his wife. Neeson was surrounded by Richardson's mother, Vanessa Redgrave, as well as her sister, Joely Richardson, and the family's New York actor friends including Sarah Jessica Parker, Matthew Broderick, as well as Laura Linney.
Well, the top military commander in the Pacific says the U.S. is fully prepared to respond to a possible rocket launch by North Korea next month. Navy Admiral Timothy Keating telling the Senate Armed Services Committee there's a, "high probability they would take down any missile into the U.S."
North Korea is preparing for what the U.S. military believes will be a long-range ballistic missile test in early April. Pyongyang says it plans to launch a communications satellite. And New York's disgraced governor, Eliot Spitzer, speaking exclusively to CNN. Spitzer investigated AIG when he was the state's attorney general. Now hear what he has to say about the government's efforts to keep the insurance giant afloat and his own credibility in the wake of the prostitution scandal that forced him from office.
It's 11 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. Fourteen minutes past the hour. Time to fast forward to the stories we'll be making news later today on CNN.
We're watching these incredible pictures coming in. We showed this yesterday as well.
It's an underwater volcano in the South Pacific and it's really a spectacular eruption. You can see the plumes of smoke in the air, ash shooting up more than 300 feet actually. This eruption happened off of the coast of Tonga on Monday. Authorities say that right now it's posing no danger to island residents.
President Obama is back in Washington holding a White House meeting with California Governor Arnold Schwarzenegger, as well as Pennsylvania Governor Ed Rendell and New York Mayor Michael Bloomberg. They're going to be discussing the critical need to invest in America's transportation infrastructure.
Then at noon Eastern, Federal Reserve Chairman Ben Bernanke delivers a speech on the financial crisis and its impact on local banks. Bernanke will be the featured guest at the Independent Community Bankers national convention in Phoenix -- Christine.
ROMANS: Kiran, this morning, the political storm over insurance giant AIG thrusting former New York Governor Eliot Spitzer back into the spotlight. Spitzer talking exclusively to CNN in his first television interview since he was forced to resign a year ago now over a sex scandal, raising the question, is the one-time crusader of corruption on Wall Street trying to make a comeback?
Here's a portion of the exclusive interview now with CNN's Fareed Zakaria.
(BEGIN VIDEOTAPE)
FAREED ZAKARIA, CNN HOST, "FAREED ZAKARIA GPS": So, do you think that the problems that AIG got into later on stem from some of the same practices that you were trying to get at?
ELIOT SPITZER, FORMER NEW YORK GOVERNOR: They stemmed from an effort from the very top to gin (ph) up returns whenever, wherever possible, and to push the boundaries in a way that would garner returns almost regardless of risk. Back then I said to people, AIG is at the center of the web. The financial tentacles of this company stretched to every major investment bank. The web between AIG and Goldman Sachs is something that should be pursued, and as I have written --
ZAKARIA: Meaning what? Meaning that a lot of the money that we, the taxpayers, gave AIG has ended up being paid to Goldman Sachs?
SPITZER: Precisely.
ZAKARIA: And other companies.
SPITZER: The so-called counterparties to these very sophisticated financial transactions. When AIG initially received $80 billion, the decision that was consequence of a very brief meeting of the New York -- president of the New York fed, the secretary of the treasury, perhaps Chairman Bernanke and arguably some reports say the chairman of Goldman Sachs, $80 billion, virtually all of it flowed out to counterparties $12.9 billion to Goldman Sachs.
Why did that happen? What questions were asked? Why did we need to pay 100 cents on the dollar on those transactions if we had to pay anything? What would have happened to the financial system had it not been paid? These are the questions that should be pursued of bonuses that's real issue (ph). It touches us viscerally.
The real money and that the real structural issue is the dynamic between AIG and the counterparty.
ZAKARIA: You know, there are a number of people watching who are going to say Eliot Spitzer doesn't have credibility to talk about these issues because of what happened over the last year with your own behavior. What would you say to them?
SPITZER: I would say to them that I never held myself out as being anything other than human. I have flaws as we all do arguably. I failed in a very important way in my personal life, and I have paid a price for that. I have spent a year with my family, with my wonderful and amazing and forgiving wife and three daughters, and we rebuilt those relationships and hope to do that as time goes on.
I also feel that to the extent if I'm asked and I can contribute to a very important conversation, I will do that as well. That is our right, arguably our obligation as citizens. I will do what I can and with full awareness and heaviness of heart about what I did.
(END VIDEOTAPE)
ROMANS: You know, it's the first we've heard from the former governor since the scandal erupted last year. And frankly, he's someone who knows better than anyone else how it all works, the Wall Street, the Washington, the bonuses, the derivatives. This whole thing blew up, but he was in the recesses the whole time.
CHETRY: Right. It's interesting and you have spoken about this as well, the concentration of power, the decisions for trillions of dollars and the livelihood of all of us are made by a very small group of people, as he was explaining.
ROMANS: Right. CHETRY: It was what? He said it was treasury. It was a few people from some banks, it was this, and boom.
ROMANS: That's right. And there are very few people right now who are in the position to try to fix it, too, Kiran.
CHETRY: So are we just, you know, are we just -- do we just have this impotent rage when we say oh, we need all of these bills to see the light of day. I mean, in Congress, that's not really -- that's not really what's driving the ship here, is it?
ROMANS: What's driving the ship here right now are the treasury, the fed, a few people in Congress but you're right. I mean, we have all of this rage but this thing is moving and a lot of things are happening in a lot of different levels and very few people are actually in charge of doing it. And gosh, you know, Eliot Spitzer is somebody who knows how that all works better than anybody.
You can watch this full interview Sunday on "FAREED ZAKARIA GPS" at 1:00 p.m. Eastern right here on CNN.
CHETRY: That's what makes the job of all these reporters, you know, that much more crucial.
ROMANS: It absolutely does.
CHETRY: All right. Well, show me the stimulus. New Jersey has a checkered past when it comes to the use of public funds. You'll meet the man in charge of keeping billions in new stimulus spending above-board.
Also, President Obama making his economic pitch at town hall meetings in California on "The Tonight Show." Well in Washington, the AIG's bonus scandal blows up. We have two political experts with us to talk about the fallout.
Twenty minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to our special "ROAD TO RESCUE" coverage here on AMERICAN MORNING.
The Web site recovery.gov is designed to let taxpayers track how stimulus dollars are being spent and then to report possible misuse of funds. Well, that's been a problem in New Jersey where pay-to-play politics some would say is something of an art form.
CNN's Candy Crowley is in the Garden State where she talked to the man who is going to be in charge of making sure that no stimulus money gets used the wrong way.
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Good morning, Kiran and Christine.
You know, right here in New Jersey, they'll be getting about $17 billion in stimulus funds. And let's face it, this is not a state with a stellar reputation for the use of public money. So with that sort of reputation and that kind of money, who are you going to call?
(BEGIN VIDEOTAPE)
CROWLEY (voice-over): Matt Boxer.
MATTHEW BOXER, COMPTROLLER, NEW JERSEY STATE: It's a bit like three-dimensional chess. It is a -- it is a bit of a puzzle.
CROWLEY: New Jersey's independent comptroller, the guy with two versions of the stimulus bill in his office.
(on camera): You read it?
BOXER: Most of it. Most of it.
CROWLEY: It's really exciting stuff, right?
BOXER: It will keep you up at night, no doubt about that.
CROWLEY (voice-over): There's a lot about this task to keep him up.
JOSEPH MALONE, NEW JERSEY STATE ASSEMBLY: We've seen a half a dozen state legislators go to jail in the last year for corruption and fraud and mismanagement.
CROWLEY: There's that, and a byzantine process which has the money coming in to the state in 100 different streams, different pots of cash to different coffers with different federal guidelines and suggestions.
JOSEPH BIDEN, VICE PRESIDENT OF THE UNITED STATES: A little hint. No swimming pools in this money.
CROWLEY: So new to the job his office has no nameplates, Boxer was tapped a year ago to clean up New Jersey. It made him a natural to follow the stimulus money.
BOXER: Does it present unique challenges with eliminating all fraud? It does. It does. We're working hard to deal with that as an issue, but to believe that it will easily be conquered is -- would be naive for anybody.
CROWLEY: The state transportation office has picked the projects it wants to fund, but first, there were questions.
BOXER: How did you arrive at this list in ensuring that the projects were arrived at using merit-based appropriate criteria so we don't end up with the swimming pools?
CROWLEY: Armed with a team of auditors and former FBI investigators, Boxer is in for the duration. $17 billion is at stake, and more. MALONE: And I said this directly to him, this will shape your career, Matt. If there's any cloud of suspicion that there's any fraud or abuse or any kinds of malfeasance and use of this money, you'll live this thing in your entire career.
CROWLEY: Yikes. And just last week, Boxer put on his new hat and came to Washington for a pep talk, kind of.
B. OBAMA: If we see money being misspent, we're going to put a stop to it, and we will call it out and we will publicize it.
CROWLEY: No pressure here.
(END VIDEOTAPE)
CROWLEY: Still, even if every project is given a clean bill of health from start to finish it won't be over. That's when state officials here in Trenton will begin to look how many jobs were created? Was it worth the money? - Kiran and Christine?
ROMANS: Thanks, Candy Crowley.
President Obama standing by his embattled treasury secretary, Tim Geithner. We're going to take a look at what the president is saying, as well as Geithner's exclusive sit-down with CNN. We have a couple of great political minds here to break it all down with us.
It's 26 minutes after the hour.
(BEGIN VIDEOTAPE)
(BEGIN VIDEO CLIP, "BACK TO THE FUTURE")
MICHAEL J. FOX, ACTOR: Wait a minute, what are you doing, doc?
CHRISTOPHER LLOYD, ACTOR: I need fuel.
(END VIDEO CLIP)
UNIDENTIFIED MALE REPORTER (voice-over): Like the movie "Back to the Future," we may soon be picking through our garbage to fuel the family car.
TOM QUINN, E. FUEL CORPORATION: It's a crime what we throw away in our garbage cans that are energy. Our lawn clippings, things we throw away can now be traded into fuel.
UNIDENTIFIED MALE REPORTER: Tom Quinn's new invention, the E- Fuel 100 MicroFueler makes homemade ethanol.
QUINN: Ethanol is compounded with every combustion engine, even works on diesels.
UNIDENTIFIED MALE REPORTER: It works like a washing machine, mixing sugar and yeast with water, then it ferments for a day, followed by low heat distillation. QUINN: It's basically press one button and it does the rest.
UNIDENTIFIED MALE REPORTER: Priced under $10,000, it sounds like a more high-tech version of a moonshine still. This grain ethanol is only safe for your car to drink.
QUINN: You have a DOT-approved pump nozzle that allows to you take the hose, put it into your car and start to fill up.
UNIDENTIFIED MALE REPORTER: The price at your own personal pump may give you cause to celebrate, about $1.20 a gallon. But the cost could be mere pennies if you tap discarded beer and wine at restaurants and bars and at the source.
According to Quinn, it's millions of gallons of potential energy literally going down the drain. This brewery owner thinks homemade ethanol is a winning solution.
JIM STUMP, OWNER, LOS GATOR BREWERY CO.: Absolutely, drink more beer, make more fuel, sounds good to see.
(END VIDEOTAPE)
ROMANS: And welcome back to our special "ROAD TO RESCUE" coverage right here on AMERICAN MORNING.
Checking our top stories, President Obama's historic appearance on late night TV spanned a range of topics from the economy to bowling. But while joking with Jay Leno about his less than stellar bowling skills on the campaign trail, the president made this remark.
(BEGIN VIDEO CLIP)
JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": Now, are they going to put a basketball -- I imagine the bowling alley has been just burn and close down.
B. OBAMA: No, no, I have been -- I have been practicing all day.
LENO: Really? Really?
OBAMA: I bowled a 129.
(CHEERS AND APPLAUSE)
I have...
LENO: Oh, no, that's very good. Yes, oh, that's very good, Mr. President.
OBAMA: It was like -- it was like Special Olympics.
LENO: No, that's very good.
OBAMA: No, listen, I'm making progress on the bowling. Yes.
(END VIDEO CLIP)
ROMANS: Even before the program aired last night, the White House issued this statement: "The president made an off-hand remark making fun of his own bowling that was in no way intended to disparage the Special Olympics. He thinks that the Special Olympics are a wonderful program that gives an opportunity to shine to people with disabilities from around the world."
Alaska Governor Sarah Palin rejecting almost half of the federal stimulus money available to her state. She says she only wants funds without strings attached. That breaks down just 55 percent of the estimated $930 million allocated to Alaska.
Gas prices slowly approaching $2.00 a gallon. AAA reports the national average price for unleaded regular now above 94 a gallon, up another penny from yesterday. At the moment, 11 states and Washington, D.C. have gas prices above $2.00 a gallon - Kiran.
CHETRY: All right. Well, Christine, thanks.
President Obama wanted to push his economic plan in his two days of town halls. He ended up having to play a lot of defense, though, over the AIG bonus outrage. Last night, he capped it off with a late night pitch on the "Tonight Show with Jay Leno." Here's a little bit more of that.
(BEGIN VIDEO CLIP)
B. OBAMA: I do think, though, that the American people are all in a place where they understand, it took us awhile to get into this mess.
LENO: Right.
B. OBAMA: It's going to take awhile for us to get out of it, and if they have confidence that I'm making steps to deal with issues like health care and energy and education, that matter deeply to their daily lives, then I think they're going to give us some time.
LENO: Let me ask you about this...
(END VIDEO CLIP)
CHETRY: All right. So he's the first sitting president to appear on a late night show. Joining us now is John Avalon, the author of "Independent Nation" and the columnist for the dailybeast.com. Also, Errol Louis, a columnist for "The New York Daily News".
Great to have both of you with us this morning.
So as we heard from Christine, he had to go out and issue an apology before it even aired, which probably isn't what you're looking for when you're trying to get your message out to people. But what did you think of him choosing "The Tonight Show" late night venue to sort of talk to the American people about the stimulus? JOHN AVLON, REGISTERED INDEPENDENT: I think you need to reach out to the American people by any means necessary. He is a pop culture president, and he should use the means at his disposal. There are folks who are watching Jay Leno that aren't reading the newspaper every day. And you want to reach them and create a message. Part of the power of the presidency is symbolism. You're setting a tone, defining an era. It's all part of that effort, and everything goes.
CHETRY: Errol, are you setting yourself up, though, as president to appear too light-hearted, too jovial when a lot of people are struggling.
ERROL LOUIS, COLUMNIST, "THE NEW YORK DAILY NEWS": You know, I've been thinking about this. Ronald Reagan was accused of not doing enough, going out to the western White House a little too much. George W. Bush was accused of going to Crawford, Texas, too often.
But I don't think any president has really ever gotten in trouble for being a little too jovial. I mean, this is somebody who is attacking grave problems on a daily basis. You get a flurry of press releases every day about all kinds of really important things that come out of this White House. You can stick him on a lot of different problems, but I don't think you can stick him with being lazy.
CHETRY: President Bush was hammered for appearing too jovial in the face of the Iraq war and everything else. But --
AVLON: So was Lincoln during the Civil War. I mean, you got to set a tone.
CHETRY: All right. I want to ask you guys about the situation as well. AIG aside, Barack Obama is facing criticism that he as president right now is trying to do too much, that he's doing too much too quickly. Let's listen to what former Massachusetts Governor Mitt Romney told Larry King last night.
(BEGIN VIDEO CLIP)
MITT ROMNEY, FORMER GOP PRESIDENTIAL CANDIDATE: He's, you know, posing for the cover of magazines and doing a number of things. He's putting together a health care plan. And frankly, if you're doing too many things, a couple of important things can slip by, and one of them that slipped by was the AIG legislation that allowed AIG executives to get these bonuses. It was put in a specific bill.
(END VIDEO CLIP)
CHETRY: Is he just playing politics or is there some feeling among the American people and independents that perhaps, you know, this White House needs to hunker down a little bit more and tackle this crisis?
AVLON: Well, I think Mitt Romney is playing politics, but there's legitimate criticism beneath it. One of the things, for example, that got Jimmy Carter's presidency into trouble was doing too many things. No clear sense of priority. The clear priority for the American people right now is the economy. But as Obama said yesterday in the town hall in California, you know, if the American people can't choose to pay their mortgage or their medical bill sometimes you got to multitask. But the overall emphasis needs to be the economy.
LOUIS: That's right. And it's surprising to me that Romney would say that. As a management style, when the president speaks, hundreds of thousands of people are put into motion. So it's not as if he personally he's got to review the AIG contracts. You know, he sets a direction, and he empowers people to go out and do what they need to do. That's how you run a national government.
CHETRY: Yes. Very interesting. All right. Thanks to both of you for being with us. We didn't have time to hear from Tim Geithner, but of course, we're going to hear that a little bit later on the show.
John Avlon and Errol Louis, always great to have you with us. Thanks.
AVLON: Great to be here.
LOUIS: Thanks.
ROMANS: All right. From guys to gals, with consumers spending less, saving more, companies are now shifting their sales pitch hoping to harness the purchasing power of women. We'll tell you why.
It's 35 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: OK, welcome back. All day today, we're taking aim at the economy, and the big part of that is answering the questions that you have. We have gotten hundreds to our new show hotline 877-MY- AMFIX.
Here's one of them. Take a listen.
(BEGIN VIDEO CLIP)
BILL, CHICAGO, ILLINOIS: This is Bill from Chicago.
On mortgages, why aren't we doing a better job on trying to institute mortgages on a two-week program matching up with people's paychecks, and it would knock off on a 30-year loan. It would knock off 13 years, and thus saving the homeowner a lot of money.
(END VIDEO CLIP)
ROMANS: That's an interesting idea, like so you pay your mortgage, you know, every two weeks like you pay your paycheck. I guess that's an interesting idea.
ELAM: It's an interesting idea. But that's the thing. I think for most people, it's a liquidity issue.
ROMANS: Right.
ELAM: You've got to have money to pay every two weeks. So, basically, I think what Bill is getting at is that every time you get a paycheck, which for most of us would be every other week, right, that you would pay your mortgage. And therefore, you're paying so many more times a year, instead of once a year, you're doing it every couple of weeks.
ROMANS: And you would knock as it's like thirteen years...
(CROSSTALK)
ELAM: You would knock a few years off. I think for most people, though, it's a cash issue. I don't think that they can afford to do it. If you can, great. Paid off early. But...
ROMANS: And some of the personal finance experts for the first time ever, I've heard them saying don't pay the 13 payments a year. You know, because you can...
ELAM: Right.
ROMANS: ... you can pay up your mortgage earlier, just pay 12, and put that money in a savings account, because you need money right now.
ELAM: You need to have access to it. I just think it needs time. So it's very difficult for some people to do that. But if you can, more power to you. Knock it out.
ROMANS: True.
ELAM: Cut it down.
ROMANS: True.
CHETRY: All right.
Well, Stephanie, we're also hearing from a lot of parents. They're wondering about where they should keep their kids' money safe, where they should go to make sure they do that. Let's hear another call to our hotline.
(BEGIN VIDEO CLIP)
BRIDGET, GEORGIA: Hi, my name is Bridget from Georgia.
I'm calling -- I have three boys. I wanted to know how I can start saving for them without anything happening to their money in the future.
(END VIDEO CLIP)
ROMANS: Good for her.
ELAM: And this is good because she's saying, basically, I don't want to take a lot of risk, my boys are young, I want to just make sure they're safe.
So there are a few things you could do. You could go ahead and just get a savings bond. It's safe. It will grow slowly. It's backed by the government.
You can also do a 529 plan. We talked about those a lot because they're just a great investment vehicle. It's putting away money for college. You're investing this money so that by the time your boys are ready to go to school, you got money to give them. And you could start it off really cheaply. You can even put out as little as $25 a month...
ROMANS: Right.
ELAM: ... to keep funding it. It doesn't cost a lot.
CHETRY: It's tax free that's why it's better than a regular savings account.
ELAM: Right. And so you can put it away and just this is fine. And then you get it out, it's grown and tax free and you don't have to put a lot to it every month. That's what I think -- I think a lot of people think they have to put at least $100, $150 to it every month. You don't have to do that.
ROMANS: But the point, Bridget, is to save the money and keep...
ELAM: Put it away, yes.
ROMANS: Put it away for the kids. That's really, I mean, it's a great advice.
OK. We want to you be involved all morning long. You can call our hotline, 1-877-MY-AMFIX. OK. For those of you who don't know how to use the letters on the keyboard like me, that means it is 1-877- 692-6349. It is...
(CROSSTALK)
UNIDENTIFIED FEMALE: (INAUDIBLE) do you have a BlackBerry or iPhone, MY-AMFIX doesn't help you.
ROMANS: I know, I know.
(CROSSTALK)
ROMANS: It's 41 minutes after the hour.
CHETRY: Watch out women. They're targeting you.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: You can take this into the dining room.
(END VIDEO CLIP) CHETRY: As more and more men lose their jobs, companies are changing their marketing tactics. The sales pitch? They're going girly.
Ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
CHETRY: Welcome back to a special "ROAD TO RESCUE" edition of AMERICAN MORNING. It's our commitment to helping you make sense of what's happening in the recession.
And if you turned on the TV, you may have noticed the fight over your money is shifting from the wallet to the purse and with good reason. Women make up more than 80 percent of household purchases. And with that type of power, it's forcing companies to change the way they design but also market products.
CNN's Carol Costello has the story.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Look at the difference in styles between the two.
CAROL COSTELLO, CNN CORRESPONDENT (voice-over): There has been a seismic shift at OfficeMax.
UNIDENTIFIED MALE: Toy store for us big kids.
COSTELLO: Once a company that targeted mostly male consumers, today it's gone positively girly.
OfficeMax isn't alone. Volkswagen and Frito-Lay have gone girl- crazy, too. Frito-Lay launching webisodes called "Only in a Woman's World." These webisodes talk to women as women instead of moms or wives in order to sell women on the idea snacks are for them, too.
NATALIE ZMUDA, ADVERTISINGAGE: Women were once considered a niche market but we are no longer a niche market, absolutely. We are a market to be reckoned with, and it's good that advertisers are finally paying attention to that.
COSTELLO: OfficeMax is paying attention. It says 80 percent of its customers are women. That's a very good thing, especially now. Of the nearly 4 million who lost their jobs in the first year of the recession, nearly 78 percent were men. So companies like OfficeMax are changing the way they sell products.
JULIE KRUEGER, OFFICEMAX V.P.: The industry in general, the office supply industry, has all been going along the same kinds of lines, which is just, you know, provide stuff for business. And really what we realize is that women have higher expectations, and they're really setting the bar higher for us, because they want more.
COSTELLO: Raising the bar means in addition to quality, women want variety.
UNIDENTIFIED MALE: You can take this into the dining room.
COSTELLO: It's too soon for any of these companies to know if their new strategy is working, but expect to see more companies go girly as the recession deepens.
VOICE OF UNIDENTIFIED FEMALE: This is going to be fun.
FEMALE CARTOON CHARACTER: It's all good. It's all good.
(END VIDEOTAPE)
COSTELLO: And you know, Kiran, it's fascinating. Frito-Lay has even changed its packaging to attract women, like for example, Baked Doritos. Women like to see things like, you know, this little green "smart choices made easy" symbol in the corner, where it says how much fiber is in the product, because women eat snacks for different reasons than men. Men just go buy, like pick up some Doritos and eat them, but women want to know that they're going to get some nutritional value and they're not going to get fat.
CHETRY: That's right and we saw that uproar when they changed the Tropicana packaging, right? We can't take it.
All right. Thanks so much, Carol.
It's 47 minutes after the hour.
ROMANS: Circle time with the first lady.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: My name is Michelle Obama, and I'm the first lady of the United States of America.
(END VIDEO CLIP)
ROMANS: Her makeup, her clothes, personal questions from curious high school kids.
(BEGIN VIDEO CLIP)
M. OBAMA: This is just a little jacket -- jacket and pants.
(END VIDEO CLIP)
ROMANS: Inside class with Michelle Obama. Ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
ROMANS: Welcome back.
Michelle Obama has been remaking the role of first lady in her own image. She was at it again Thursday, talking to everyone from students to celebrities.
CNN's Joe Johns has that for us.
(BEGIN VIDEOTAPE)
JOE JOHNS, CNN CORRESPONDENT (voice-over): If you want a snapshot of how different the White House is these days, take a look at this picture, First Lady Michelle Obama and a cast of amazing American women. Musician Alicia Keys and Sheryl Crow, Phylicia Rashad of "The Cosby Show" and her sister Debbie Allen from "Fame," Olympic gymnast Dominique Dawes preparing to fan out around the Washington area as part of national women's history month.
For her part, the first lady popped in almost unannounced at Anacostia High School, well-known here s a pretty tough school in a tough part of town.
M. OBAMA: Are you all excited?
UNIDENTIFIED GIRLS AND BOYS: Yes.
M. OBAMA: So, do I need to introduce myself?
UNIDENTIFIED GIRLS AND BOYS: Yes.
M. OBAMA: OK. Well, my name is Michelle Obama and I'm the first lady of the United States of America.
JOHNS: The formality of the self-introduction was, of course, a joke which became clear as this decidedly informal conversation continued.
UNIDENTIFIED BOY: What do you guys do for fun?
M. OBAMA: What do we do for fun.
UNIDENTIFIED BOY: As a family, with your kids?
M. OBAMA: Fun is different when you have kids. It's all kid stuff. It's like, I haven't been to a grownup movie and I don't know how long.
UNIDENTIFIED GIRL: Do you do all your makeup every day?
M. OBAMA: I didn't today because it was special. But most of the time, I do. When I do something special, I have somebody do my makeup, but I do my makeup on my own.
This is just a little jacket -- jacket and pants. Nothing special.
JOHNS: Some of the questions were what you'd expect.
UNIDENTIFIED BOY: (INAUDIBLE)
M. OBAMA: We still -- you know, as normal as it can be living in the White House with Secret Service.
JOHNS: She was surprisingly candid at times. She talked about her experiences going to school.
M. OBAMA: I wanted an "A," you know. I wanted to be smart. I wanted to be the person who had the right answer. And I didn't care whether it was cool, because I remember there were kids around my neighborhood who would say, ooh, you talk funny, you talk like a white girl. I heard that growing up my whole life. I think I don't know what that means but, you know what, I'm still getting my "A."
JOHNS: On peer pressure.
M. OBAMA: You don't worry about what anybody else thinks about you. You don't worry about the teacher that you think is not treating you fairly or what your friends are saying, you know. That all that matters is where you are and where you want to be. JOHNS: And even a nudge about postponing parenthood.
M. OBAMA: I don't understand why kids want to rush and have kids and get married.
JOHNS: Then, as if things had not gotten personal enough, the cameras were ushered out, leaving the kids to some more private time with Michelle Obama.
Joe Johns, CNN, Washington.
(END VIDEOTAPE)
CHETRY: A direct connection to you.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Not their money and they did not earn it.
(END VIDEO CLIP)
CHETRY: Your questions answered, and your calls played.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: They got away with it and our government helped.
(END VIDEO CLIP)
CHETRY: On our special "ROAD TO RESCUE.
Plus, Ron Paul shocker. He called the 90 percent tax on AIG bonuses a disgrace.
(BEGIN VIDEO CLIP)
REP. RON PAUL (R), TEXAS: This is a distraction. This is an outrage. (END VIDEO CLIP)
CHETRY: He's live to tell you why. You're watching the Most News in the Morning.
(COMMERCIAL BREAK)
ROMANS: From a sitting president sitting down on late night TV to a case of mistaken identity on Capitol Hill. A lot of buzz inside the Beltway this morning.
"Washington Post" reporter and CNN political contributor Dana Milbank joins me now in a segment we call "In Case You Missed It."
Happy Friday. How are you?
DANA MILBANK, CNN POLITICAL CONTRIBUTOR: Good morning, Christine.
ROMANS: Let's talk about some of the things President Obama on Jay Leno last night, the first time for a sitting president. Sort of a salesman-in-chief here promoting his economic recovery agenda.
Let's take a listen quick.
(BEGIN VIDEO CLIP)
B. OBAMA: The immediate bonuses that went to AIG are a problem but the larger problem is we've got to get back to an attitude where people know enough is enough and people have the sense of responsibility and they understand that their actions are going to have an impact on everybody, and if we can get back to those values that built America, then I think we're going to be OK.
(END VIDEO CLIP)
ROMANS: In the midst of an economic crisis, is it a good idea for him to go on late night TV? Did he get his message across and was he knocked off message by any cringe-worthy comments that you heard?
MILBANK: Well, I would say he was bowling a solid game through the first nine frames and then came the gutter ball at the end of it. Yes, he got the economic message out. He got to make some cute jokes about the puppy, about Air Force One.
But then he makes this off-hand thing about his bowling looking like the special Olympics. And sure enough, on Air Force One, on the way back, they're on cleanup patrol trying to get this out of the way. So that's the danger of late night TV.
On the other hand, he did bowl 129, up from 37 in an abbreviated round during the campaign, so this should be a matter of some national pride, I think.
ROMANS: Let's talk a little about a case of mistaken identity you witnessed this week in Congress. Fascinating stuff. The president of the Georgia Farm Bureau was actually mistaken for the AIG CEO, who's going to be grilled on Capitol Hill. I mean, I think we can see what they look like. They don't look that much alike, Zippy Duvall and Ed Liddy. I mean, maybe they do. That must have been -- you were right there when it happened.
MILBANK: Yes. It's sort of the mob mentality that takes over. Dozens of cameras all around. Somebody shouts out, "It's Liddy!" And everybody, of course, not CNN, they were much too restrained for this, but everybody else chases after Zippy Duvall. You'd think the peanuts on his tie and the farm bureau pin would have given it away.
He was pleased as punch with all the things. Said he would have gotten a haircut had he known he'd get all of the attention. But really, this is like the AIG story itself. Everybody is furious. Everybody is in a frenzy, but nobody knows exactly who to go after.
ROMANS: And meanwhile, the Alaska Governor Sarah Palin, she is going to turn down, like some of her other counterpart Republican governors, she's going to turn down some of the stimulus money. A good idea? A statement of other aspirations beyond the governor's mansion?
MILBANK: Yes. I think it's safe to read this as an early announcement for 2012. She's not totally pure in this. She's keeping something like 70 percent of the money, but she is infuriating folks at home because this is -- the money she's turning away is for special needs kids, some poor kids. So she's taking a huge risk with this.
And, you know, Alaska was built on sort of federal giveaways. So I have a feeling as far as Alaska goes, she's probably on a bridge to nowhere with this one.
ROMANS: Dana Milbank, in case you missed it, thanks for dropping by.
MILBANK: Thanks, Christine.
ROMANS: Kiran?
CHETRY: All right. Thanks so much.
