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American Morning
House Passes 90 Percent Bonus Tax; Spitzer on AIG Outrage; Green Car Sales Stalled; Banking on Women in Recession; Congress's AIG Blame Game
Aired March 20, 2009 - 07:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: All right. The pressure is on. It's 59 minutes past the hour. Checking our top stories that we're going to be breaking down for you in the next 15 minutes.
On our special coverage of the "ROAD TO RESCUE," President Obama becomes the first sitting commander in chief to appear on a late night talk show. He visited "The Tonight Show with Jay Leno." The president pushed his economic recovery plan. He talked about the AIG outrage and he also raised some eyebrows with one particular comment. You're going to hear it just ahead.
And if they won't give it back, Uncle Sam is going to take it back. The House passing a bill that would impose some bruising 90 percent tax on big bonuses paid to executives at companies that took bailout money.
We're looking at the new questions that legislation is raising this morning. Plus, our exclusive interview with Treasury Secretary Timothy Geithner. He talks about AIG and more.
And another big exclusive in his first TV interview since resigning as the governor of New York, Eliot Spitzer speaking only to CNN about hints of a looming disaster at AIG and also the sex scandal that wrecked his career.
But we begin the hour with the president's sit-down on "The Tonight Show." By passing the news media and taking his economic message outside of the Washington bubble, President Obama became the first commander-in-chief to appear on a late night talk show.
And our Suzanne Malveaux is live for us at the White House this morning with reaction.
Good morning, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Good morning, Kiran.
Well, obviously, the president felt very comfortable in this format. It's very casual. He, at times, charming, but, obviously, what he wanted to do was get beyond the AIG controversy and to steer the conversation in the direction that he wanted to go to get back on message.
(BEGIN VIDEOTAPE) JAY LENO, HOST, "THE TONIGHT SHOW WITH JAY LENO": The 44th president of the United States, please welcome President Barack Obama.
MALVEAUX (voice-over): And in front of a crowd of fans and millions of viewers, President Obama played it mostly straight on "The Tonight Show," but did spend a lot of time talking bonuses.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Stunned, stunned is the word. 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.
MALVEAUX: A sense of responsibility that Mr. Obama says needs to extend beyond just AIG.
OBAMA: Who, in their right mind, when your company is going bust, decides we're going to be paying a whole bunch of bonuses to people? And that, I think, speaks to a broader culture that existed on Wall Street, where I think people just have this general attitude of entitlement.
MALVEAUX: The appearance was meant to tout his stimulus plan and ease Americans' concerns about the economy. The commander-in-chief says reform is on the way.
OBAMA: When you buy a toaster, if it explodes in your face, there's a law that says, you know, your toasters need to be safe.
LENO: Right.
OBAMA: But when you get a credit card or you get a mortgage, there's no law on the books that says that if that explodes in your face, financially, somehow you're going to be protected.
MALVEAUX: Sprinkled in with the policy talk, the president's staunch defense of his Treasury Secretary Tim Geithner.
OBAMA: This guy has not just a banking crisis, he's got the worst recession since the Great Depression. He's got an auto industry that has been on the verge of collapse, and he understands that he is on the hot seat, but I actually think that he is taking the right steps, and we're going to have our economy back on the move.
MALVEAUX: Earlier in the day, the president felt the need to defend himself, over the much hyped appearance.
OBAMA: Somebody was saying today, I think, that I shouldn't be on "Leno." I can't handle that and the economy at the same time.
MALVEAUX: It's that kind of scrutiny Obama later told Leno, that takes some getting used to.
OBAMA: It's a little bit like "American Idol," except everybody is Simon Cowell.
(END VIDEOTAPE)
MALVEAUX: Obviously, the White House eager to move beyond the AIG scandal. Really the president emphasizing the broader point here. His economic stimulus package and trying to convince the American people that, ultimately, Kiran, it's going to work.
CHETRY: Suzanne Malveaux for us this morning at the White House. Thanks so much.
And the president's appearance on late night TV may end up being remembered for a gaffe. An attempted humor near the end of the interview. Listen to this.
(BEGIN VIDEO CLIP)
LENO: Now, are they going to put a basketball -- I imagine the bowling alley has been just burn and close down.
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)
CHETRY: All right. Well, the White House was asked about this and said, quote, "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."
So we reach out to the Special Olympics for comment. They said they have no comments on the president's remarks - Christine.
CHRISTINE ROMANS, CNN ANCHOR: Meantime, back in Washington. AIG angst boiling over in the House with lawmakers passing a bill to impose a 90 percent tax on bonuses paid to employees of bailed out companies. It would affect AIG, Citigroup and others.
Stephanie Elam found an angle for us -- Bank of America. It would impact any company that took taxpayer money from the troubled assets...
STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Over $5 billion.
ROMANS: Over $5 billion.
ELAM: If you got more than $5 billion, it would affect you. And, you know, with the case of AIG, here's a company that has access to $182 billion worth of taxpayer money, and they have believed that they've paid out $165 million in bonuses. So it's targeting AIG, but it's going to affect all of these companies. They're saying some of these AIG bonuses, 73 of them, actually, topped $1 million. So that's kind of a lot of money there. But the thing about this legislation here is that it will be retroactive to the beginning of the year.
So even if you left the company in this amount of time so far this year, it would still impact you if you make $250,000 in your household, $125,000 if you're married filing separately.
So that means, if you get a bonus and you make any more money than that, that you will be taxed at a 90 percent rate on that money. Now if you add in taxes for Medicare, if you add in your state and local taxes, for some people, they're actually going to end up spending more than the bonus that they actually received.
ROMANS: We keep talking about this. But I think what a lot of people don't get is that a lot of people in the banks and in the brokerage houses and a lot of the places on Wall Street and insurance companies, they're paid a salary. And then their bonus -- you know, their compensation...
ELAM: That's the incentive.
ROMANS: Their compensation would be two-thirds bonus and one- third salary. So the bonus, it's just the way Wall Street...
ELAM: It's the structure of it.
ROMANS: ...over the past 50 years.
ELAM: Yes.
ROMANS: So we're talking about changing the entire, you know, pay structure.
(CROSSTALK)
ELAM: It would totally affect the tax policy. And that's what some people are looking at it. Some people are worried about, is that this goes into a tax policy issue. It could almost become like the alternative minimum tax, which becomes part of our overall tax policy and it doesn't get amended. What happens if these companies pay the money back to the TARP funds back, how will they be impacted? We need more information.
(CROSSTALK)
CHETRY: And then the question is the legality of it.
ELAM: Right.
CHETRY: I mean, it's a bill right now. It passed the House. The Senate is going to be taking this up as well. It may change shape. But then also, the fact of the matter is, is there could be many legal challenges to this. What would the government then have to get involved?
ROMANS: It's just a mess.
ELAM: And the Congress is trying to make up for the fact that they didn't do this the first time, and now they're trying to go through the back door to do it. But a lot of people are saying it would still be better for them to try to amend their ruling on that instead of affecting tax policy.
So I don't think this discussion is over. I'm sure next week we'll be hearing more and more about this.
CHETRY: Right.
ROMANS: Using the tax code essentially fix up for mistakes made along the way.
ELAM: Right.
ROMANS: All right. Thanks, Stephanie.
ELAM: Sure.
ROMANS: President Obama is standing by his embattled Treasury Secretary Timothy Geithner amid the fury over those AIG bonuses. Senator Chris Dodd, chairman of the Banking Committee, says Treasury officials asked for a change in the stimulus bill that essentially made the AIG bonuses possible.
In an exclusive interview with CNN chief business correspondent Ali Velshi, Geithner defended his department's action.
(BEGIN VIDEO CLIP)
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Do we know who in Treasury had this conversation with whomever on the banking committee.
TIMOTHY GEITHNER, U.S. SECRETARY OF TREASURY: Treasury staff who are working with Senator Dodd's desk throughout this process. Again, that's the part of the legislative process.
VELSHI: But you -- you weren't involved in that directly?
GEITHNER: Oh, I did have with other officials some conversation with Chairman Dodd as he was going through this process but about other provisions.
VELSHI: So not about this particular one. It wasn't you telling Senator Dodd?
GEITHNER: No. But I'm not sure that is relevant, because Treasury staff did expressed concern about whether this provision was vulnerable to legal challenge.
VELSHI: And when do you think we'll start to see a recovery?
GEITHNER: Well, as we said just talking earlier, you know, most economists look at the path of this recession now and they expect to see the economy start to stabilize and start to -- growth start to come back later this year. And again, the important thing is that the government does what's necessary to achieve that.
(END VIDEO CLIP)
ROMANS: This weekend, I'll be joining Ali and the rest of the CNN Money team for "AIG FACTS AND FURY." That's Saturday and Sunday night at 8:00 Eastern right here on CNN.
CHETRY: We look forward to it. And as part of our "ROAD TO RESCUE" coverage, we're also showcasing your opinions and listening to what's on your mind. So here's what our iReporters and viewers are saying about AIG.
(BEGIN VIDEO CLIP)
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.
CORY, NEW YORK: My name is Cory. I'm calling from New York.
I'm a little outraged here at these AIG bailouts that started when Bush was still in office, and everybody is pointing the finger at the Obama administration. I'm kind of think, we need to get Bush back in here and prosecute him.
You don't give people who ran their company into 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.
UNIDENTIFIED CALLER: I just had a question. I wonder if Obama is willing to give back his $100,000 back to AIG that they gave him?
(END VIDEO CLIP)
CHETRY: All we want is to get you involved and keep you involved all morning long. Let us know what's on your mind. Call our hotline with your questions and comments. It's 877-692-6349.
ROMANS: All right, other stories new this morning.
An autopsy reveals actress Natasha Richardson died from bleeding in her skull. It was caused by the fall she took on a beginner's ski slope in Quebec on Monday. Tragically, doctors say Richardson might have survived with the blunt trauma if she gotten immediate medical treatment. She didn't go to a hospital until four hours later.
Somali pirates have struck again seizing a Greek-owned cargo ship off the Coast of Somalia. Government officials in Greece say the ship and its crew of 24 was on its way to South Korea with a load of iron when it was attacked last night in the Gulf of Aden.
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 efforts to keep the insurance giant afloat and his own credibility after the sex scandal that forced him to resign. It is 10 minutes after the hour.
(BEGIN VIDEO CLIP)
VOICE OF UNIDENTIFIED FEMALE: This goes out to all the millionaire, billionaire, and trillionaires. You make me sick. You have more than enough money to last you, your kids and your grandkids a lifetime.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
CHETRY: Welcome back to AMERICAN MORNING special coverage of the "ROAD TO RESCUE."
And 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 over a sex scandal.
Raising the question is the one-time crusader of corruption on Wall Street trying to make a comeback? Here is a portion of the exclusive interview 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 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. 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)
CHETRY: And you can catch the full interview this Sunday, "FAREED ZAKARIA GPS" 1:00 p.m. and 5:00 p.m. Eastern right here on CNN.
ROMANS: All right. Hybrid sales down almost 30 percent. Seems the green cars everyone wanted a year ago are now just -- you know what, they're sitting on the dealer's lot. What's behind the stall?
It is 16 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: And welcome back to the Most News in the Morning.
Remember those long waiting lists for the popular Toyota Prius? The green cars everyone wanted a year ago are now sitting on the lot with few takers. Kara Finnstrom shows us why hybrid sales are down almost 30 percent.
KARA FINNSTROM, CNN CORRESPONDENT: Kiran and Christine, President Obama wants to see at least one million of the next generation of green cars that was plug-in hybrids on America's roads by 2015, but if the slumping sales for current hybrids at dealerships like this one are any indicator, it could be a tough sale.
(BEGIN VIDEOTAPE)
FINNSTROM (voice-over): Remember hybrid fever?
KENNY BURNS, TOYOTA OF HOLLYWOOD: You've had a waiting list up to 220 people deep that have all left deposits.
FINNSTROM: That was May of 2008. Gas prices were rising. There were federal tax incentives to buy hybrids. And in California, more incentives like free street parking. But now in 2009, with gas under two bucks a gallon, most incentives phased out and recession crippling all car sales. It's a different story at that same dealership.
UNIDENTIFIED MALE: You could come in and within a day or two, pretty much have a Prius that you would like.
FINNSTROM: Hybrid car sales nationwide are down almost 30 percent.
RAY MONTES, SHOPPING FOR CAR: People aren't looking for something that's going to push, you know, you into a technological age.
FINNSTROM: Ray Montes plans to buy a car within the next three months and is not looking at hybrids.
MONTES: I'm just looking for a car that can get me from point A to point B.
JESSICA CALDWELL, EDMUNDS.COM ANALYST: Right now with gas prices where they are, it doesn't make a lot of sense for many consumers to buy a hybrid, so it takes quite an incentive financially for people to really take an interest in hybrids again.
FINNSTROM: Industry analyst Jessica Caldwell says car dealers are now offering all kinds of unprecedented cash back, low APR deals on hybrids like Priuses which run on gas and batteries. That's helping sales. But Caldwell says it will take much more to get Americans buying the next generation of green vehicles -- electric plug-ins.
CALDWELL: People are usually resistant to change especially one that's so radical.
OBAMA: And because these cars won't leave the showroom unless consumers buy them --
FINNSTROM: This week, President Obama laid out new incentives for consumers. OBAMA: A new tax credit of $7,500.
FINNSTROM: He's hoping to build on the enthusiasm of people like Gina Zimmerman who's now leasing her second Prius.
UNIDENTIFIED FEMALE: An environmental choice, and also, I liked it.
FINNSTROM: And who says she's waiting for the green car of tomorrow.
(END VIDEOTAPE)
FINNSTROM: Big hopes, big plans, but also big challenges. A year ago, this dealership couldn't keep a Prius on its lot. But now, even with all those dealer incentives, 28 Priuses waiting to be bought - Kiran, Christine.
CHETRY: Kara Finnstrom for us. Thanks so much. The president leaves Washington taking his economic plan to late night TV. So, was that the way to go? We're getting the political perspective from both sides of the aisle. We have James Carville and Ed Rollins. They join us live. It's 22 minutes after the hour.
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.
(BEGIN VIDEO CLIP)
VOICE OF UNIDENTIFIED FEMALE: This is going to be fun.
FEMALE CARTOON CHARACTER: It's all good. It's all good.
(END VIDEO CLIP)
CHETRY: Ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
CHETRY: And welcome back to a special "ROAD TO RESCUE" edition of AMERICAN MORNING.
It's our commitment to help you make sense of what's been happening in the recession. And if you turn on the TV, you may have noticed that 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 and sell products. CNN's Carol Costello joins us live in Washington with more.
Hey, Carol.
CAROL COSTELLO, CNN CORRESPONDENT: Hi, Kiran. You know, it's not a big secret. We've always known women wield incredible economic power. Women decide what food to buy, what clothes to buy and what office supplies and what cars to buy. So in a recession, it's smart to target who controls the purse strings, even if that means excluding men.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Look at the difference in styles between the two.
COSTELLO (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: You know, Kiran, there is a danger to some companies going too girly. I mean, imagine if you're going to buy a Ford truck. You don't want the Ford truck to be pink and to be marketed to women because it's clearly a male product.
But companies like Frito-Lay know the benefits of packaging, because although men will buy anything that says Doritos or potato chips on the front, women won't. That's why they're marketing these kinds of products to women. You can see they're Doritos. You see the word "baked" is very prominent. You can see this green seal on the side of the bag that says there are no trans fats in this bag of snacks. And that's what women want to see. So women are more likely to pick up this product over plain old fattening Doritos.
CHETRY: Exactly. We just want to feel better about it -- about eating the junk food.
COSTELLO: Exactly. We don't want to feel guilty about anything.
CHETRY: It says it has fiber in here somewhere, so I'm cool. All right. Thanks, Carol.
COSTELLO: Sure.
CHETRY: Twenty-eight minutes past the hour. Let's check the top stories this morning.
Congress taking action to get some of the AIG bonus money back. Yesterday, the House passed a bill that would slap a 90 percent tax on bonuses paid out to any company taking more than $5 billion in bailout money, a move critics say violates the Constitution.
And earlier, I spoke with Congressman Ron Paul who voted no on the bill. He says it's a disgrace.
Let's hear more from him.
(BEGIN VIDEO CLIP)
CHETRY: You also called this bill that was quickly put together because of all the outrage a disgrace. What were you saying to your fellow congressmen and women about what was going on?
REP. RON PAUL (R), TEXAS: Because they -- in Congress, they panic and they react minute-to-minute, whether it's passing the Patriot Act or doing all these things. They react in emotional ways. So when the banking crisis hit, instead of dealing with, over the last decade, which I've been begging and pleading for them to do, they wait and, oh, there's a financial crisis. Oh, it came from too much spending, too much taxes and too much printing of money.
So what do they do? They spend more. They blindly appropriate this money and I just think the whole process is outrageous and we're on the verge of a major crisis.
(END VIDEO CLIP)
CHETRY: That was Congressman Ron Paul. And just in to CNN this morning -- President Obama reaching out to Iran on the first day of the Iranian New Year with a new video, and in it, the president signals a willingness to speak directly with Iran about its nuclear program and its hostility towards Israel. The White House says a Farsi subtitle version of the video is being given to select news outlets across the region.
And the global economic crisis has led to this. In France, youth mobs throwing bottles, stoning police officers and actually setting fires in Paris. Hundreds face off with riot police after more than a million people held demonstrations across the country, demanding the government do more to help them. Christine.
ROMANS: Kiran, President Obama making both political and television history. He is the first commander in chief to sit down on a late night talk show, taking his economic plan straight to Jay Leno. The president says when it comes to the AIG fiasco, he'll take the heat.
(BEGIN VIDEO CLIP)
OBAMA: Ultimately, I'm now the guy who is responsible to fix it and one of the things that I'm trying to break is a pattern in Washington where everybody is always looking for somebody else to blame.
(END VIDEO CLIP)
ROMANS: Joining me now for more is democratic strategist James Carville and republican strategist Ed Rollins, both of them CNN contributors.
Gentlemen, both of you are veterans of this political process. And I'm wondering, is the president, by going on Jay Leno and by changing the backdrop, going somewhere else away from Washington, is he, Ed, changing the conversation now? Getting it back to what he wants to talk about and not what Washington is in a feeding frenzy over?
ED ROLLINS, REPUBLICAN STRATEGIST: Well, it's always important the president set the agenda. This is a very capable communicator. Obviously, you saw his great personality last night on the show. And I thought he very effectively explained a lot of the problems that AIG and others have faced.
So any vehicle that you can use today is not the old, you know, you go on CBS or NBC or what have you now, cable plays such a role. These talk show plays a role and the comedians play such a role that I think was a very important thing and I think he did it well.
ROMANS: James, is it risky, because some people this morning are already talking about this small - I don't know if it was a gaff or it was just a cringe word aside about the Special Olympics, like he's in a special Olympics. You know what was that? Anything?
JAMES CARVILLE, DEMOCRATIC STRATEGIST: Well, I think it was a mistake and the president acknowledged it even before it aired. He called the head of the special Olympics and said that - he shouldn't have said that and I think any of us - I think Ed will agree with this on television live, you know you're going to say something frankly that is not the smartest thing in the world. And that happened.
And it was pretty impressive the way he called and dealt with it. But I agree. You know, Ed and I were older, and you know, we saw in this business, it was a lot different now. People get their news in a lot of different sources. And I think this is just a reflection of the White House reacting to that.
ROMANS: James, let me ask you about taking the blame for the AIG fiasco. I mean, he just stood up and say look I take the blame, I'm the commander in chief but then he also said I didn't write these contracts. And I don't want to be - Is he saying I take the blame but it's not my fault and does that kind of feed into people, boy, you can take the blame but you have to take the blame?
CARVILLE: Yeah, a little bit.
ROLLINS: I think - go ahead.
CARVILLE: No. A little bit. And you know, I think what he was talking about the sort of bonuses that were in there. Obviously, it was the Treasury Department. It obviously wasn't his fault that AIG was completely unregulated and selling these credit default swaps and went under. But every now and then, everybody likes to have it a little bit both ways.
ROMANS: Yes. You know, let me ask you quickly. I want you guys to listen to this, you know, Geithner is under - Timothy Geithner, the Treasury Secretary, is under a lot of heat about all of this stuff. The fact that, you know, just everything about the bonuses and the fact that the Treasury Department was actually actively helping legislation to make sure that these bonuses could be paid out.
I want you to listen to what Timothy Geithner said in an interview with Ali Velshi about these calls that maybe he shouldn't have his job.
(BEGIN VIDEO CLIP)
GEITHNER: You know, I, again, I think this just comes with the job. If this was not challenging, it wouldn't be consequential. And I feel there's deep personal sense of responsibility and obligation and really opportunity to work with this president and this Congress to try to make this economy stronger and make sure the financial system never goes through this again.
(END VIDEO CLIP)
ROMANS: Ed, on the one hand, people are just furious. On the other hand you can't just be calling for people's heads to roll in the middle of the worse financial crisis of our lifetime. I mean, is he secure, you think, in his job?
ROLLINS: Well, I think he is secure because he serves the president and the president obviously has reinforced his confidence in him. I think the key thing though is he can't make any more mistakes. And part of the problem is they are all rushing to Congress, the administration in a crisis that they've never had to face before. And I think the key thing here is not to try and do politics. You need to make good public policy. And I think to a certain extent like the quick passing of legislation yesterday or the stimulus, a lot of times you end up with bad public policy.
ROMANS: You know, James, I was surprised how quickly that went through the house, this idea of taxing these bonuses. And there seems to be this sort of we hate rich people. I mean I hear it in our iReports and in some of our, you know, viewer calls. You know, all of these - is there some class warfare that is rising up here and is it the responsibility of the president and the White House to try to tap this down and get, you know, get a little more clear-headed out there?
CARVILLE: Well, first thing we have to remember is that in the last eight years, productivity has risen wages haven't.
ROMANS: Right.
CARVILLE: That frustrates people, frankly.
And they want to know, where did this actual productivity go? In the essence of AIG, the real frustration is that they got government money.
Now, whether or not this is the greatest public policy in the word, we will wait and see but we are already hearing reports that a lot of these people are refusing the bonuses or turning part of it back. But the truth of the matter is, it is never going to be business as usual on Wall Street again, probably not in the next 50 years.
And they're going to have to adjust to that reality. And, you know, a lot of people, are having difficulty doing that. But you can't do what happened in this country and have one institution like AIG, hold the entire financial system hostage and not have people angry about it.
ROMANS: Quickly. One - for both of you, do you think that this administration is handling this incredible sea change then? Are they handling it well, James?
CARVILLE: Well, I think that given everything they are doing, they're doing pretty good and I think they are getting better at it but it's a little expecting too much for them to do it perfectly.
ROMANS: Ed, you get two words.
ROLLINS: You know, it's 60 days in our administration. They had a crisis. I think they are doing the best they're going to improve.
ROMANS: Pretty good and the best they can. James Carville, Ed Rollins, thanks so much - Kiran.
CHETRY: All right. Christine, thanks.
Well, your future is at stake. Your job, your home, your savings. We're taking your questions. The CNN Money Team giving you answers. The "ROAD TO RESCUE" continues just ahead.
It's 36 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning.
And the official first day of spring, by the way. It's snowing here, though.
ELAM: We'll take it still.
CHETRY: Exactly.
Well, we're continuing our special coverage "ROAD TO RESCUE," taking your calls and giving you some answers that you can use.
Our first one is from Denise. Let's listen.
(BEGIN VIDEO CLIP)
DENISE: Hi, my name is Denise Frazier.
I'm a postal employee and I'm just wondering if it's a good decision to pay off my mortgage with my retirement account? Currently the interest rate is 2.87 but my mortgage is six percent and I only owe $46,000.
(END VIDEO CLIP)
CHETRY: Should she pay it off using her retirement savings? You know, it's a tough call.
ELAM: It is. But the thing is she didn't say how much she has in her retirement account and that what gives me concern. You know, the average amount people have is $15,000 in their savings account...
ROMANS: Which is not enough, boys and girls...
ELAM: It isn't going to cover it. For some people in certain cities like New York, it's definitely not going to cover it. But it's one of those things that you don't want to take away from your future right now.
You don't have a lot there. It seems like you're fine and comfortable. I would say leave your retirement money there so that when you retire, you've got it and you can enjoy your home.
CHETRY: And also it depends where you are in your mortgage, right? Because if you're coming up to the end of it, you're probably only paying principal at that point.
ELAM: And she says she only has $46,000 left on it. She should just...
(CROSSTALK)
ELAM: A lot of information we don't know.
ROMANS: But you want - I hear this a lot of people are, look, I want to take my money and pay off my mortgage. You want the bank to be taking the risk with the money. Like you know, you need to have your money if you have your retirement savings growing or you have money in the bank...
ELAM: It's just much safer to just go ahead and keep paying. She didn't make it sound like she's having difficulty paying off any problems, so just making her monthly payments. Leave it alone and let it grow.
ROMANS: A lot of the questions about their money. Everyone...
ELAM: I'm glad that people are asking. I'm glad hearing people asking about savings.
CHETRY: Yes.
ELAM: That's encouraging.
ROMANS: Stephanie Elam, thanks.
We want you to get involved. Let us know what's on your mind. You can call our hotline with your questions and your comments. We'll try to get to as many as we can. 1-877-MY-AMFIX; 1-877-692-6349.
The financial crisis takes brothers on a journey across the country through 55 cities in 45 states far away from Wall Street. We'll find out whether they think Americans can pull through this financial mess.
It's 41 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. We're on the "ROAD TO RESCUE" this week here on AMERICAN MORNING.
Our next guest really did hit the road capturing just how the recession is affecting average Americans for a new film called "The Recess Ends."
Joining us now, brothers Austin and Brian Chu. Thanks to both of you for being with us. So Austin, you were laid off and you looked at this as an opportunity as opposed to a setback. Why did you decide to take on this project?
AUSTIN CHU, FILMMAKER, "THE RECESS ENDS": I realized that when I got laid off, I had to do something, whether or not I was getting back to work, whether it's finding a new job. I realized that this is something that I wanted to do. I love to travel and I might as well make a film and make a difference out of it.
CHETRY: And Brian, what were you doing at the time? You quit your job for this documentary and decided to go on the road with your brother. What made you decide to do that?
BRIAN CHU, FILMMAKER, "THE RECESS ENDS": Well, my brother called me on the phone and told me he got laid off. I mean, that's always a bad news. You know, but I immediately just fell in love with the project and took it as an opportunity to travel and figure out and learn more about the recession to travel as well.
CHETRY: So when you guys talk about your project, where were you going and what were you hoping to capture on film?
A. CHU: Well, we're going to every state and what we're capturing is we're capturing the heartbeat of America in the next four months. We have a new president. We have two new stimulus programs and it's a very unique time. And America has not gone through this in quite a while and we want to capture those stories.
CHETRY: We also have some video right now that you guys shot Sherri Gori (ph) and her family. She bought a house. She and her sister. They lived in it with themselves and their two kids and now they have a total of ten people including relatives and friends. A bunch of pets. This phenomenon of people needing to turn to their friends and neighbors and their family in times of need. This is a story that you guys have seen play out in many different cities across country?
A. CHU: Yes, in Albuquerque, New Mexico, one of my coworkers, they just feel like, you know, if they have a big house and they have the space, they are always willing to take people in if they need it.
CHETRY: And how are they making it work?
A. CHU: Well, this family here, they came and put food in the refrigerator but they just somehow found a way at the end of the week to feed everyone, to keep everyone warm, and to keep everyone safe. And you know, one at a time. This is how they do it.
B. CHU: It's also joint income as well. So you have multiple adults living under one home so they can work together for one thing.
CHETRY: What are some of the themes you saw people most concerned about?
A. CHU: People are definitely concerned about, you know, sending their kids to school, you know, paying the bills and just making the mortgage payments. And at the end of the day, it's people really coming together. In Raleigh, North Carolina, towns are coming together. You know, buying locally and you know helping produce income within the city. CHETRY: We've been talking about a lot of the anger that is out there because of the AIG bonus fiasco, I guess you could say. But on the larger scale, did people that you talk to, was there anger? Was there a feeling that they had somebody to blame?
B. CHU: I definitely think there's anger and there is always - they have every right to be angry. But if you think about it, you know, like to be optimistic and something good has to come out of something bad. So if you look to the future, things can only get better.
CHETRY: So you guys, this is - are you guys done with it now? Is the "Recess Ends" or you're still working on this?
A. CHU: Yes, we're still filming. We won't be done traveling until like May 15th, end of May. We still have to go to Alaska and Hawaii.
CHETRY: Wow.
B. CHU: So there's definitely a lot to do.
CHETRY: You poor things! You have to go to Hawaii? Oh, no! Must be terrible. All right. So when do you think the film is going to actually come out?
B. CHU: The film is going to be done in September and we're still filming as we go along. So we always encourage people to send us an e-mail of stories that they think we should cover. We are going up the east coast, the northern states and we're going back down the west coast. So there is still a lot that we still have to see.
CHETRY: OK. "The Recess Ends," Austin Chu and Brian Chu, brothers and now filmmakers here. Good luck with this and thanks for joining us.
A. CHU: Thank you
CHETRY: Right now, it's 48 minutes after the hour.
ROMANS: With so many men losing their jobs, what being unemployed is doing to their egos.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It starts eroding my confidence.
(END VIDEO CLIP)
ROMANS: The emotional impact of a job loss on a man. What is a guy to do?
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's my job to be things at the club and drag them home and dress them and serve for dinner. (END VIDEO CLIP)
ROMANS: The jobless men behind closed doors.
(BEGIN VIDEO CLIP)
LOLA OGUNNAIKE, CNN ENTERTAINMENT CORRESPONDENT: What does that mean for sex life?
(END VIDEO CLIP)
ROMANS: Ahead on the Most News in the Morning.
(COMMERCIAL BREAK)
ROMANS: You know, the numbers are startling of the nearly four million people who have lost their job since the start of the recession, roughly 80 percent of those jobs are jobs that men have. So you know, what does unemployed do - being unemployed do to a man's ego, especially when his partner is working?
Lola Ogunnaike has got some candid answers.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: You know, I start questioning my self-worth and it starts eroding my confidence.
UNIDENTIFIED MALE: The hardest part is reaching out. The judgment of my family and everybody around me.
OGUNNAIKE (voice-over): Voices of men feeling the sting of the recession and unemployment. Anger. Grief. Self-doubt. These members of the Santa Monica Men's Circle in California are talking about a range of emotions.
UNIDENTIFIED MALE: Quitting has been there. It's a chatter that hangs around in the background.
OGUNNAIKE: Of the nearly four million who have lost their jobs since the recession began, 78 percent are men and sociologists say they are hurting more than women.
OGUNNAIKE (on-camera): Men are evolved now. Men get manicures. Men cry. They are not these hard charging Neanderthals.
MICHAEL KIMMEL, AUTHOR "GUYLAND": And not only do they get manicures and cry and do all those sort of metrosexual sorts of things, but their wives work!
OGUNNAIKE: Right.
KIMMEL: And, yet, the idea of being a man, being a provider, being a bread winner is still the sort of anchor that most men have for their masculinity.
OGUNNAIKE: Jonathan Steuer can relate. He lost his job as a media researcher last October.
You want to be the one who is out there slaying the dinosaurs while your wife is hovering in the cave?
JONATHAN STEUER, LAID OFF MEDIA RESEARCHER: Yes, it's my job to beat things at the club and drag them home and dress them and serve them for dinner. So you know, it's the extent that I'm not doing that right now, that's a bit of a frustration.
OGUNNAIKE: And it's not always easy on their partners.
MARJORIE INGALL, HUSBAND WAS LAID OFF: I still sometimes wake up in a cold sweat in the middle of the night thinking about, well, we're OK now, but what happens if he doesn't get a job?
OGUNNAIKE: For some couples, that's not the only concern. Men losing their jobs often leaves to feelings of being emasculated. What does that mean for a sex life?
KIMMEL: It could go either way, couldn't, Lola. You can imagine a guy saying I'm not feeling the most powerful in the board room but here in the bedroom, I'm still the champ. You could imagine that. Or you could imagine since I'm feeling so much less powerful in my job, I don't quite have the energy, the virility, et cetera, to perform in the bedroom either.
UNIDENTIFIED MALE: It's not an identity recession. It's just a recession.
OGUNNAIKE: These guys are trying to look past the recession and to what will define them in the future.
PAUL BOB VELICK, COACH, SANTA MONICA MEN'S CLUB: We need to get to work, whatever it is. Whether it's the inside job or the outside job. We need to get to work.
(END VIDEOTAPE)
OGUNNAIKE: You ladies look shocked!
ROMANS: No. Never thought I see a man jobless in bed. I love it! I mean...
CHETRY: You think for people dealing with this type of situation, it seems that it's different if the man of the household is laid off versus the woman in the household. How do women deal with it?
OGUNNAIKE: It is a little different and women are supposed to be sensitive, understanding, but you also have to hold your man accountable. Men cannot get away with just sitting around at home while these women are out in the workplace busting their tail and the house is in shambles. It can't happen. There has to be a redistribution of power in the household and men are going to have to chip in, especially if they are at home all day.
ROMANS: But is it really different for a woman...
CHETRY: That's what we want to hear, Lola.
OGUNNAIKE: That's what you want to hear.
ROMANS: Exactly!
CHETRY: I'm sorry you lost your job, now scrub the toilet.
ROMANS: Yes, exactly. Well, no, it's really different for men. A woman loses her job she doesn't have the same reaction and the feeling of impotence? Or you know - I mean...
OGUNNAIKE: The sociologist is saying that the woman's self-worth is not necessarily tied into what she does. And women also have a built in support system. They have their girlfriends. They have their mothers. They have their sisters and their relatives. And they feel better about talking about their issue. Men with the exception of these men in Santa Monica who clearly had no trouble talking about their issues. Most men tend to internalize it and tend to keep it bottled up. So they don't have a place to just let go.
CHETRY: Give your guy a break, too. Don't blame him for losing his job or say you're not trying hard enough...
ROMANS: Yes. That's not good.
OGUNNAIKE: Don't beat him up but you do have to hold him accountable. He can't be playing Wii and Nintendo all day long and not helping around the house if he doesn't have a job. Come on.
CHETRY: See, Lola's husband is out of town, she can say whatever she wants.
ROMANS: We're both being careful because we don't want to get in trouble.
CHETRY: We're not getting in trouble...
OGUNNAIKE: My man is not here so I'm talking and talking. But when he gets back in the town.
CHETRY: Thank you, Lola.
ROMANS: All right. Lola, thanks.
CHETRY: Well, meet a hero to the hungry. A man who gets up at the crack of dawn every single day to feed strangers. They call him an angel. Why does he do it? It's 56 minutes after the hour.
(COMMERCIAL BREAK)
CHETRY: For many the "ROAD TO RESCUE" includes a stop at a local food pantry or soup kitchen. With food banks struggling to keep up with skyrocketing demand and cost, this week's CNN hero is doing his part to feed the hungry every single day. (BEGIN VIDEOTAPE)
ANNOUNCER: This is CNN heroes.
UNIDENTIFIED MALE: There's no money to eat.
UNIDENTIFIED MALE: It's hard to find a job.
UNIDENTIFIED MALE: I live on the street.
JORGE MUNOZ, COMMUNITY CRUSADER: When you're hungry, you're hungry. That's it. Four years ago, I see those guys standing out there. They are desperate. They need to eat. My name is Jorge Munoz. Every night I bring food to the hungry.
I'm born in Colombia. I'm a citizen by now. I'm school bus driver. When I get back home around 5:15, my second job starts. Prepare the meal and pack them up. It's like a family project, seven days a week.
I go to the same corner every night around 9:30 and they're waiting for me. [ speaking in foreign language ] the economy is really bad right now. Day by day, their numbers increased. Two months ago, it was a 100 and now it jumped to 140. It's a lot.
UNIDENTIFIED FEMALE: He's awesome. I mean, they call him the angel of Queens.
UNIDENTIFIED MALE: It's through him that many of us are fed.
MUNOZ: In the beginning, it was just Spanish. But now I see different nationalities. I help anyone who needs to eat. Just line up.
Everyone. Come on. The best part is when you see their smile. I want them to eat every night. For me, it's easy. Compared with them, I'm great.
ANNOUNCER: Tell us about your hero at cnn.com/heroes.
(END VIDEOTAPE)
CHETRY: All right. That's going to do it for us. We're out of time today. But thanks so much for being with us on this AMERICAN MORNING. It was great to have you in for John Roberts.
ROMANS: Thank you.
CHETRY: Hope to see you back Monday, "Minding Your Business."
ROMANS: Yes.
CHETRY: And right now here's "CNN NEWSROOM" with Heidi Collins.
