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Main Street vs. Wall Street; Surge of Terrorist Attacks in Pakistan; The President's Next Moves

Aired October 16, 2009 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: The little boy and a runaway balloon. The media chases a thrilling story. Today, questions about the boy's dad and whether he took the media for a ride.

Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.

Let's begin with the growing divide between Main Street and Wall Street. Fifteen million Americans -- 15 million -- out of work. Foreclosures coming in at a record clip. But two of the biggest American banks reported stunning profits this week and plan monster bonuses, and bank stocks are surging. One, 400 percent since the end of March.

If the very intuitions that fuel the recession are doing so well now, why aren't ordinary Americans?

CNN business correspondent Stephanie Elam joining me from New York.

Good to see you, Stephanie. Tough questions here, but let's try to get to some answers here.

The Dow jumped back above 10,000 this week. Unemployment is at nearly 10 percent.

Why is Wall Street in overdrive while Main Street is still in reverse?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Tony, it's one of those things that it's a lagging movement here. While you see Wall Street coming back, that is one of the first things that we do see all of the time when you have a recovery. It's going to be the numbers on Wall Street that's going to come back first.

One of the last things that you see turn around is the jobs picture. That's a longer period of time that it takes for it to all come through, the wash for jobs to go back out there, for people to start spending again, and then leading to more people employed and then, therefore, everyone feeling better.

So, this is normally how it works, and this is also why a lot of people get mad at Wall Street, because they feel like they are just profiting off of their pain, which is not necessarily always the case -- Tony. HARRIS: Well, I've got to ask you, how are these banks and investment firms making all of this money to pay all of this in bonuses? We hear that credit is still tight and, yet, big financial companies are raking in dough.

"I can't get a loan to expand my business or to keep it going. I just got a foreclosure notice." We talked about that yesterday.

So, how are these financial institutions making money? And please don't tell me it's fees, fees and more fees.

ELAM: But these are things you know the answer to. And a lot of it does have to do with fees.

And also, you know, a lot of these banks, there are still people who work there. And there's a lot of people who have been cut there as well. They've been doing their own cutbacks of employees.

So, there's a lot of people who are part of Wall Street who felt a lot of pain here. So, they've streamlined their operations. They also have some divisions that are doing good.

When you take a look at the banking sector, the part of the business that works with consumers, sure, there's a lot of pain there. But there's other parts that are doing fine or have done better because of the strength that we've seen in markets since March.

But keep in mind, even though we've seen these big run-ups, doesn't mean that these stocks have recovered all the way back to where they were in October of 2007, when we hit our highs of the market of above 14,000, like we did in October, 2007. So, there's still some growth that needs to happen here to make things level out, but that's part of the reason we're seeing it.

HARRIS: You know, this is dramatically unsatisfying, Stephanie. And you know what? And that's not a criticism of you. It's just the analysis -- and you may be absolutely spot on with the analysis, and it would still be unsatisfying for folks all over the country. But we're not done with this, right? You agree?

ELAM: It's true. But it's any recession. It is not really me as much as it is the economy, right, Tony?

But these things are not going to be satisfying for people because they look and they say, OK, here's some people who are getting bonuses. No one is crying for the fact that Ken Lewis of Bank of America is giving back his salary for this year, is paying back over i$1 million that he already got in compensation this year. I'm sure people on Main Street don't care about that, but it shows a seismic shift on how things are being done on Wall Street, and that's what we need to pay attention to, to see how that's going to affect Wall Street moving forward.

HARRIS: I think no one is against the Wall Streeters making money. It's this idea that we would like for you to make us whole first through our 401(k)s, through our mutual funds. We would like to feel as though you, A, understand this divide and this disconnect, and that you are making us whole first before you're paying out all of this...

(CROSSTALK)

ELAM: I think a lot of people would understand that. But you also have to keep in mind that a lot of these people who work in these financial institutions are feeling the pain themselves. They're not coming away with the same kind of money that they made, say, in 2007. Their lives have changed a bit, too.

And you would also hear a lot of people argue that we need to keep this top talent here because, while these banks here in the U.S. may have been hurt with this, there's a whole bunch of other banks that are maybe international banks, and they could jump ship, go there, and get the compensation they were making in '07. So, that's part of the issue, too.

HARRIS: Right, but that feels like the least persuasive of the arguments here.

ELAM: But you have to keep in mind that these people are still feeling pain here. The people who work on Wall Street -- not all of them -- you've got that top tier, but you've got the people underfeneath that who are not walking around with their yacht here and their yacht down in Palm Beach. It's not the same. There's the people at the higher levels, and then there's people below that, and they're not all making huge amounts of money.

HARRIS: All right, Stephanie. Don't get angry. I love you.

ELAM: I'm not. I'm just saying...

HARRIS: OK.

ELAM: I love you, too, Tony. We've just got to be real about where our anger goes in this debate. That's all.

HARRIS: All right, Stephanie. Appreciate it. See you next hour. We're not done with this topic.

ELAM: Sounds good.

HARRIS: Stephanie will be back with me, and we'll ask if Wall Street is back to business as usual while everyday Americans struggle. My guest will be Ryan Mack, the head of Optimum Capital Management, in New York.

Let's check now our wire for some other stories making headlines this hour.

New questions are being raised about the bizarre story of a runaway balloon that authorities believed carried a 6-year-old boy across northern Colorado. The family of young Falcon Heene captured this video of the homemade device as it floated away yesterday. The balloon landed nearly two hours later in a dirt field, but there was no boy inside. Falcon was at the home the whole time, hiding inside a box in the attic of his garage.

This morning, Richard Heene told CNN's "AMERICAN MORNING" this was not a hoax. Heene sought to explain a questionable comment his son made last night on CNN's "LARRY KING LIVE."

(BEGIN VIDEO CLIP)

FALCON HEENE, BOY THOUGHT TO BE IN BALLOON: We did this for a show.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

RICHARD HEENE, FALCON'S FATHER: Right when he answered, I've got this thing in my ear. I can hear you. I couldn't real hear what he was saying.

So, it was asked to us again. Then I heard it more clear. But Wolf was asking us.

So, anyway, after the first set of interviews in the front yard, I told everybody to come in, my wife, the kids. I thought that they were behind me. And I ended up walking into the garage, opened up the garage door, and Falcon is climbing in the joist, showing the media the garage door is wide open. And now there's 30 guys out there with cameras showing -- somebody had asked him if he would show them how he got up for some TV show.

So, he told me that that's what he was referring to when we were talking about it.

(END VIDEO CLIP)

HARRIS: Now a spokeswoman for the Larimer County sheriff says the sheriff is considering re-interviewing the family about the entire case.

We want to hear from you. What do you think about this story? Pretty straightforward question there.

Go to our blog and leave us a comment, CNN.com/Tony, and we will read some of your comments on the air a little later here in the CNN NEWSROOM.

A new warning out today about treatments for H1N1 flu. The FDA says you should avoid buying flu medication over the Internet. This warning comes after the agency analyzed flu products it bought online. It says the drugs may be impure, contaminated, or have too little or too much of the ingredient to battle the virus.

Four more U.S. troops killed in Afghanistan. They were hit by a roadside bomb yesterday in the southern part of the country where the fighting has really raged.

The military says two died instantly. The two others dying later of their wounds.

Meanwhile, NATO confirming an Afghan woman and child were accidentally killed during a raid on militants.

Just across the border in Pakistan, militants launch another brazen attack aimed directly at police. Suicide bombers killing 13 people at police headquarters in Peshawar, the main city in Pakistan's volatile northwest.

Live now to CNN's Reza Sayah in the capital, Islamabad.

And Reza, this is the latest in a string of recent terrorists attacks killing more than 150 people. What are we to think here? Are the Taliban gaining strength?

REZA SAYAH, CNN INTERNATIONAL CORRESPONDENT: Well, I mean, if you look at what's happened in the past couple of weeks, you have to question who is winning this fight against extremists here in Pakistan. And certainly Washington has to be concerned with this wave of attacks.

You have one today, a suicide attack targeting a police station. This attack following five attacks yesterday.

The one today, according to officials, a suicide car bomber tried to race through a police compound. Police personnel opened fire. Moments later, you had an explosion. Thirteen people killed in that explosion. Among them, three police officials. One child was also killed in the attack.

Local residents obviously frustrated, looking for their government to somehow put an end to these attacks. Here's what one witness had to say.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE (through translator): It was a white color car and it was a very, very severe explosion. The government must contain this and change its policy. I mean, how long will this keep on happening daily?

(END VIDEO CLIP)

SAYAH: Obviously there is an acute security crisis Pakistan is facing. That's perhaps why tonight, Pakistan's prime minister called a high-level meeting calling on the army chief, General Ashfaq Kiyani, to brief all political party leaders on the security situation and the recent wave of attacks.

Also on the agenda, this much talked about, much hyped major ground offensive targeting the Taliban leadership in south Waziristan, in the very restive and dangerous tribal region along the Afghan border. The Pakistani government is well aware that with these wave of attacks, the Taliban has made a very emphatic statement declaring their power. They believe they can't look weak, they need to hit back, and they say they're going to hit back with this ground offensive coming up -- Tony.

HARRIS: OK.

CNN's Reza Sayah for us in Islamabad, Pakistan.

We will look closer at the surge and militant attacks and how it could affect the U.S.-led war in that region. I'll be joined live by CNN national security analyst Peter Bergen. That's at the bottom of the hour, right here in the CNN NEWSROOM.

Is help on the way for millions of uninsured Americans? We take a closer look at President Obama's push for health care legislation.

And let's look at the Big Board, New York Stock Exchange right now.

And the Dow down triple digits. A lot of selling going on. We're below, as you can see, the 10,000 mark. But it's been a good week so far.

We will check these numbers throughout the day with Susan Lisovicz, right here in the CNN NEWSROOM.

(COMMERCIAL BREAK)

(WEATHER REPORT)

(COMMERCIAL BREAK)

HARRIS: OK. Our senior White House correspondent Ed Henry is on the air now with his weekly radio show. And there he is, "44 With Ed Henry."

Ed, good to see you, doctor.

ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: Good to see you, Tony.

HARRIS: A couple things we're going to try to get to here.

First, let's talk about President Obama, Wall Street, and maybe if we have some time, the push for health care reform.

Is the president, to your knowledge, feeling any pressure to put more pressure on Wall Street firms to rein in these bonuses?

HENRY: Well, you talk to top White House aides, they acknowledge in private that this is a big problem, a big challenge ahead. Because, I mean, think back to the first 100 days. I think it was early February when there was a report that came out of Wall Street about the bonuses that some of these firms were handing out last year as everything was crashing. And you'll remember the president, just a couple of weeks into the job, really lit into Wall Street and said they need to clean up their act.

HARRIS: Shameful. Yes. HENRY: It was shameful, and he used every word in the book. But here we are, deep into October, several months later. He's been on the job, and it appears now that we look at earnings season and some of the bonuses that are being reported, that some of these Wall Street companies appear to be going back to the same old dance.

And Robert Gibbs this week acknowledged on camera that it's a problem and that some of the people on Wall Street cannot be basically rewarded for ridiculous risk. And that's the big thing that needs to change. But here we are deep into October, and something that the White House has not made a lot of progress on is Wall Street reform, cleaning up some of these financial regulations.

In fairness to them, they've got two wars that they're waging right now. They're dealing with the jobs picture, not just the bonus picture. And the president is in the middle of this monumental fight over health care reform.

But the fact of the matter is, with Congress spending so much time on health reform, if they go home this year without getting anything done -- and it seems like it's very much up in the air right now -- without getting any real Wall Street reform done, it's going to be even harder to get it done next year, in a midterm election year, when the parties really split up even more and really go into their partisan camps. But that's going to be a real problem for this president if the public does not feel that he's cleaned up Wall Street so many months later.

And you've got this disconnect as well, where now people on Wall Street are getting bonuses, things seem to be returning to relative normal. On Main Street, people are not feeling that.

HARRIS: Yes. Stop sending me foreclosure notices. Answer my phone when I call. And modify my doggoned loan. Give me some breathing room here, you know, you Wall Streeters who are making all of this money.

And I'm hearing it, Ed. I know you're hearing it, and it sounds as though the administration is hearing it as well.

HENRY: Yes. And I think this is yet another reason why this president was happy to see some momentum on health care on Capitol Hill this week with Max Baucus' bill getting out of committee, at least. It's still got a ways to go, but it is making progress. Because the sooner he gets health care off the books with what he hopes to be a victory, he has got to turn the page and get back to the jobs situation.

There's going to be a big report coming out at the end of October that Vice President Biden will be putting out about what everyone across the country, the states and localities, are reporting about how the stimulus has worked or not worked. And that's going to be a big deal at the end of the month of October. And getting back to Wall Street reform, some of the things they've been pushing in the administration, but until health care is done with, that's sort of sucking up all the oxygen. HARRIS: Right. Hey, I've -- I can't read that font. The font size is too small. What's the number for folks to call you?

HENRY: We've got to get you some glasses there, doctor -- 1-877- 266-4189. In a couple of minutes, we're going to have a health care debate between Ralph Neas on the left, of the National Coalition on Health Care. And on the right, Rick Scott. He's the person who's been leading this ad campaign against the president, and he's with Conservatives for Patients' Rights

People can call in, 1-877-266-4189. We've got a lot of e-mail already. People have a lot of questions about how this Baucus bill will really work. We're going to delve into the details -- Tony.

HARRIS: Good to see you, Ed.

HENRY: Thanks, Tony.

HARRIS: Our senior White House correspondent Ed Henry on the phone right now, "44 With Ed Henry."

All right.

You know, all this week CNN personal finance editor Gerri Willis and I have been looking at health care and open enrollment topics. Today, we're taking questions on how current plans may be affected by a health care overhaul and one on long-term care insurance.

Good to see you, Gerri. Do you want to dive into the e-mail bag?

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Let's go, Tony.

HARRIS: OK.

The first question comes from Keagan. "I haven't heard much about consumer-driven health care plans or high-deductible health care plans. Will these types of plans, with the health savings account feature, have a place under a new health care bill?"

WILLIS: Well, great question. And the answer is, yes, these types of plans will be around, but there could be a new requirement that could make these policies even more expensive.

Let's say that right now you have a high-deductible plan that picks up 60 percent of your medical bills. After you meet that deductible, well, under the new bill all consumer-driven health care plans, including high-deductible plans, will have to pick up at least 65 percent of your costs.

So, since the company will be taking on more risk, you will likely have to pay more in premiums, right. So, that could make these health care options much less attractive.

Another change under this bill -- and this has not been talked about a lot -- the caps on how much you can put into your flexible spending account will be reduced to $2,500 from the $5,000 cap that's on it today. So, that's something to really take note of as we are in open enrollment season.

HARRIS: Yes. Yes.

Second question from Nell, Gerri, in Kentucky, who writes, "My husband and I are 75 and 77, and we are on Medicare and supplemental insurance. What is going to happen to us if they pass this health care bill and the premium means we can't go on vacations?"

Well, you know how this goes -- can't go on vacation, can't go to movies, can't eat out.

WILLIS: Yes. You know, this is such an emotional issue. And the bottom line here is that there will be no changes to Medicare as far as you're concerned.

You won't be paying more in co-payments, no new fees. However -- and this is a very big "however" -- under this plan, payments from the government to doctors and other health care providers will be cut. So, over time, you may find fewer health care providers willing to take on Medicare patients.

HARRIS: Got you.

WILLIS: That's a very big change.

HARRIS: Yes, it is.

And our last question, "Long-term care insurance, is that mystery to be solved? Should I get it?"

I love that question.

WILLIS: I think it's great. But, you know what long-term care insurance is. It's there to protect your assets in case you need to pay for assisted living, home care or nursing home stay.

Now, Medicare pays for only some medically related home care and short-term stays in a nursing facility, and nothing at all for long- term care if you have a considerable amount of money yourself. The downside to these plans, the long-term care plans, is that they can be expensive since you might be paying for it for decades before you use it.

If you have a net worth that's below $250,000, it's probably not worth it to get these because you will be able to rely on government programs any way. Many financial planners advise you to make sure you have life and disability insurance instead of paying for long-term care.

And if you have any questions, send them to me at Gerri@CNN.com. We love to hear from you.

And, of course, Tony, before I go, we've got a big show coming up at 9:30 a.m. on Saturday.

HARRIS: Yes, "YOUR BOTTOM LINE." WILLIS: We're going to be talking about open enrollment again. We've been following this very closely. It's important to people. We will cover that.

But I have great story to share with you. It's one family that wiped out $123,000 in debt in four in a half years. They never filed bankruptcy. We're going to tell you how they did it.

HARRIS: How the heck did they do that?

WILLIS: I'm telling you, they scrimped and saved. Everything in their house is generic, and they got extra jobs. What can I say? They really tightened the belt.

HARRIS: Yes, I saw your note on it. Maybe it was earlier this week that this was coming up. I can't wait to see that.

Gerri, appreciate it. Good to see you. Have a great weekend.

WILLIS: You too.

HARRIS: Let's get you caught up on our top stories now.

The Coast Guard is searching the Atlantic for an Air Force pilot today. Two F-16s collided during nighttime training off South Carolina. The other pilot managed to land in Charleston and wasn't hurt. The two pilots fly out of Shaw Air Force Base.

The deaths of two people inside an Arizona sweat lodge last week now being investigated as possible homicides. Self-help guru James Arthur Ray was leading the retreat where the deaths occurred.

President Obama at a Democratic fund-raiser last night in San Francisco. And the next hour he heads to Houston to address a community service forum at Texas A&M University. The event is being hosted by former president George H. W. Bush and the Points of Light Institute.

The Taliban a growing threat in Afghanistan and Pakistan. And we will take an in-depth look at U.S. efforts in that region.

(COMMERCIAL BREAK)

HARRIS: In January, we asked you to nominate CNN Heroes for 2009. We received more than 9,000 nominations from 100 countries. An independent blue ribbon panel selected the top 10 CNN Heroes, and we would like to introduce you to one of them.

(BEGIN VIDEOTAPE)

ANNOUNCER: This is CNN Heroes.

TEA LEONI, ACTRESS: Hi. I'm Tea Leoni.

As one of CNN Heroes' blue ribbon panelists in 2007, I helped recognize the extraordinary work of everyday people who are changing the world. As both a board member and Goodwill ambassador for the U.S. Fund for UNICEF, I advocate for the world's children and work to increase awareness and funding for their needs. I see clearly just how much the world needs heros.

Now I am thrilled to help CNN introduce one of this year's top 10 honorees.

BRAD BLAUSER, CNN HERO: Disabled children, they're really the forgotten ones in this war.

I came to Iraq as a civilian contractor. There were a lot of children that either dragged themselves on the ground or have to be carried. There were so many people willing to reach out and touch the lives of these kids.

My name is Brad Blauser. I bring pediatric wheelchairs to Iraqi children in need. People donate on my Web site. The wheelchairs are brought over, and I distribute them to the different military units and help fit these children into the wheelchairs.

There's no paycheck. It's not really safe here, but I made a difference in the life of these families. Definitely, the sacrifice has been worth it.

(END VIDEOTAPE)

HARRIS: And you can help select the CNN Hero of the Year. You have until November 19th to cast your vote at CNN.com/heroes. The heroes will be honored at an all-star tribute Thanksgiving night on CNN, hosted by our Anderson Cooper.

(COMMERCIAL BREAK)

HARRIS: Militants hit Pakistani police with deadly precision. Suicide bombers killing at least 13 people today at police headquarters in Peshawar, the main city in the volatile northwest frontier. It is just one of several attacks this month that have left some 150 people dead.

Most of the attacks targeting the Pakistani government. Meanwhile, Pakistan's military stepping up its own bombings, launching air strikes on militant hideouts in the tribal region near the Afghan border. Officials say the air assault is aimed at softening up targets before ground troops move in.

The military offensive not stopping militants from striking with relative impunity inside Pakistan. That is raising new worries about the Taliban threats.

Our Pentagon correspondent Barbara Starr reports.

(BEGIN VIDEOTAPE)

STARR (voice-over): The nearly daily chaos is raising more questions about the ability of Pakistan's security forces to maintain control. The last two weeks of attacks are largely the work of an increasingly powerful Taliban organization. It's all impacting the White House discussion about how to proceed with the war.

BRUCE RIEDEL, BROOKINGS INSTITUTION: One should have no doubt about the relationship between al Qaeda and the Pakistani Taliban.

STARR: Experts say as the White House struggles to decide whether the priority is fighting al Qaeda or the Taliban, it must first understand it's facing a web of interconnected networks in Pakistan.

JOHN NAGL, PRESIDENT, CENTER FOR NEW AMERICAN SECURITY: It's impossible, I think, to separate the Taliban in Afghanistan from the Taliban in Pakistan. They're both gaining strength, and they present a real threat to the security of this entire region, this nuclear- armed region. So it's enormously worrying.

STARR: Remember Mullah Omar, the one-eyed Taliban leader who fled the U.S. invasion of Afghanistan for Pakistan? He's back big time.

RIEDEL: Mullah Omar has presided over one of the most remarkable military recoveries in our time. An organization which was thoroughly defeated and discredited at the end of 2001 is now, in its mind, on the eve of victory.

STARR: Another Taliban faction known as the TTP also growing in strength. One senior U.S. official says recent intelligence suggests the group aims to launch attacks beyond Pakistan, perhaps even sending suicide bombers abroad.

The Taliban factions are benefiting from al Qaeda's inability to launch significant attacks. Financial backers are seeing a surging Taliban and an al Qaeda on the run.

RIEDEL: Donors, particularly those rich donors in the Persian Gulf states, have been sending their money to those who have been successful in the business of terrorism.

STARR (on camera): Why is this so important? Well, of course, Pakistan is a nuclear power, and the surging Taliban appear to have the goal of destabilizing the government there, if not outright overthrowing it.

Barbara Starr, CNN, the Pentagon.

(END VIDEOTAPE)

HARRIS: The bottom line here, the Taliban gaining power. Live to CNN national security analyst Peter Bergen in Washington.

Peter, good to see you. I want to hear your thinking on this. How do you view the threat to Pakistan and Afghanistan from Pakistani Taliban and al Qaeda?

PETER BERGEN, CNN NATIONAL SECURITY ANALYST: Well, I mean, you know, I think what we have seen in Pakistan over the last ten days speaks for itself. I mean, this is a group that can launch attacks on the equivalent of the Pakistani Pentagon as they did a few days ago. This is a group that can attack the United Nations as they did a few days ago. This is a group that can attack police stations at will, as they've done over the last few days.

So, I mean, but are they a threat? I mean, can they overthrow the Pakistani government? That's impossible. I mean, the Pakistani military has 500,000 soldiers. The Pakistani Taliban are a relatively small group.

But can they create a great deal of chaos? Yes. Al Qaeda similarly. On the other side of the border in Afghanistan, you know, the Taliban is certainly unfortunately gaining ground, but are they about to take Kabul or any big city or even small city? The answer is no.

HARRIS: So, Peter, Reza Sayah reporting just minutes ago on this much-talked about military offensive on Taliban militant leaders, we believe in Waziristan. Our understanding is that the major ground offensive has not begun. And clearly this type of offensive carries a great risk to the civilian population. But at this point is it a fight that has to be taken on?

BERGEN: Well, I think the Pakistani military and the Pakistani government believes that this is the case. Because Waziristan, where this offensive is going to take place, is the home area of the Pakistani Taliban, and its now-dead leader, Baitullah Mehsud, who, you know, launched a huge campaign against the Pakistani state and that continues.

So, I think the Pakistanis for their own purposes, for their own strategic interests, think this is very important. And that's a big difference, Tony, from other offenses there in the past. Sometimes Pakistani population has felt that the Pakistani military is doing something because the Americans want it. Well, this time, they're doing it for their own reasons.

HARRIS: You mentioned that the Pakistani Taliban working with al Qaeda is not a threat to necessarily overthrow the government of Pakistan. But the question is, can Pakistan handle these increasing attacks on their own, or at some point does the government have to ask for more direct U.S. help?

BERGEN: Well, there is a fair amount of U.S. help already, and some of it is acknowledged, and some of it is not acknowledged by the Pakistani government. But I mean, one thing is which is a relatively new development is the drone strikes that go into Pakistan against the Pakistani Taliban, that's something that the Pakistani government is privately kind of encouraging.

They used to be very critical of these strikes, but now that the strikes are taking out people who are attacking them, they are -- you know, the criticism is muted. And of course there's been a big, you know, the Kerry-Lugar bill, $7.5 billion of the -- President Obama has just signed, that's a fair amount of aid that's going to flow towards Pakistan and not towards the Pakistani military, but towards the Pakistani civilian population. HARRIS: How does this what's going on in Pakistan complicate the decision that the president and his national security team are weighing right now in terms of a strategy and then resourcing that strategy?

BERGEN: I think that's a very good question, Tony. I think that, you know, obviously if you waved a magic wand over Afghanistan, and it turned into Belgium overnight and you still had a problem in Pakistan, you wouldn't really have solved Afghanistan at all.

But there are some -- you know, even though we've seen all these suicide attacks, there are some things that are happening in Pakistan which are, you know, kind of helpful. The Pakistani population has really turned against militants. We've got the Pakistani military doing serious operations against the militants.

And that does change the calculus a little bit because it, you know, the Pakistanis really understand for themselves that these militants are a problem. People that they once in part supported.

HARRIS: Yes. In the final analysis, what do you think the decision is going to be from this administration? More troops, maybe not 80,000, maybe 40,000, maybe something less than that? What do you think?

BERGEN: I have no idea, Tony.

HARRIS: Yes, well, that's an honest answer. Peter, appreciate it.

Peter Bergen for us. Peter, thank you.

BERGEN: Thank you.

HARRIS: Let's do this. Let's get a quick check of top stories right now.

That's Tennessee -- you'll see it in a second here. Tennessee resident Christopher Savoie, behind that door right there, is flying back to the states after being freed from a Japanese jail without charges. He was accused of trying to snatch his two young children from his ex-wife in Japan. She fled there with the kids in August. It's unclear when or if Savoie will see them again.

The FDA is warning against buying treatments for H1N1 flu over the Internet. Officials say online medicines could be inadequate, contaminated or counterfeit.

Secretary of State Hillary Clinton says she expects Afghan President Hamid Karzai will remain in office despite a second round of voting. Clinton made the comment in an exclusive interview this morning with CNN foreign affairs correspondent Jill Dougherty.

(BEGIN VIDEO CLIP)

HILLARY CLINTON, U.S. SECRETARY OF STATE: We're not positive what the election commission will recommend, but clearly, whatever their recommendation is I believe should be followed, and if that requires a second round, that is what should happen. I think that the president is well aware of all the permutations of what can happen in the election.

It is likely that they will find that President Karzai got very close to the 50 plus 1 percent. So, I think one can conclude that the likelihood of him winning a second round is probably pretty high. But I think the ballots have been printed, and certainly the military through NATO and through our own troops is looking at how you would secure such a second round.

(END VIDEO CLIP)

HARRIS: And what do you think the secretary said about the Bush administration's approach to Afghanistan? Well, stick around. You'll want to hear that. We will have Jill Dougherty's full interview with Secretary of State Hillary Clinton in our next hour.

Now, for a little levity, something to ponder. The topic something that affects everyone -- well, except me these days: good hair. What does good hair mean to you? It's our "What Matters" segment coming up in about 45 minutes. And our guest, actress Nia Long.

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UNIDENTIFIED FEMALE: Hair is a form of self-expression, a fashion statement.

UNIDENTIFIED FEMALE: I love my short hair.

UNIDENTIFIED FEMALE: Your hair gives you different looks. It gives you different feelings.

UNIDENTIFIED FEMALE: I used to have long hair, and now it's short.

UNIDENTIFIED FEMALE: Hair is an accessory.

UNIDENTIFIED FEMALE: It is what it is. It's hair.

UNIDENTIFIED FEMALE: If you like it, then we love it.

UNIDENTIFIED FEMALE: I tell people you wouldn't wear the same shirt every day, so why should you wear the same hair?

UNIDENTIFIED FEMALE: Everyone wants what they don't have. I would love to have, like, wild curly hair, but my hair is not naturally wild and curly.

(END VIDEO CLIP)

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HARRIS: OK, we're getting some local reports from Myrtle Beach, South Carolina, that an 11th-grade Carolina Forest High School student is dead. And here's the story as best we have it so far. It appears that the student approached a school resource officer and stabbed that resource officer and that the officer defended himself with gunfire.

Let me see if there's more here. Yes -- a male student approached a student resource officer in his office, and a fight ensued. The student, age 16, allegedly stabbed the officer, who returned the gunfire.

We understand that the campus is safe, secure, and that school will continue with its regular schedule. The resource officer is being treated right now at an area hospital. We will continue to follow developments in this story.

As you know, these -- some of the details change from time to time from the initial information that we get, but that's what we have so far, that an 11th-grade Carolina Forest High School student is dead after a confrontation with a school resource officer. That resource officer shooting the student and killing that student, and the resource officer, after having been stabbed, we understand, is being treated at an area hospital.

Today we're devoting much of the two hours to the disconnect between Main Street and Wall Street. Fifteen million Americans -- think about that for a moment -- 15 million Americans are out of work right now. Foreclosures continue at a record pace.

But the Dow jumped back above 10,000 this week, fueled by bank stocks that are up as much as 400 percent since hitting bottom in March. Also rising, airline ticket prices. Thanksgiving travel is getting more expensive with each passing day. Of course, all this comes at a time when many people are struggling to pay their bills.

Here to look at the disconnect for us is Susan Lisovicz, as she is on the floor of the New York Stock Exchange with details. Good morning. Good to see you. Susan, talk me back off the ledge here.

(LAUGHTER)

SUSAN LISOVICZ, CNN CORRESPONDENT: No, it's OK, Tony. I will hold your hand, as I have been over this past very difficult year.

Well, the thing about airfares, though, that is tough to take, because Bing Travel says the average fare -- airfare over Thanksgiving -- the Thanksgiving period has gone up 10 percent from the year before and in many instances much beyond that. Check out New York to Cleveland, for instance. This is a 60-minute flight.

HARRIS: Right.

LISOVICZ: Typically goes for $250. Now the cheapest fair is at 300, ranging all the way up to $800. On top of that, there's the more of the nickel and diming, a surcharge. You want to travel the Wednesday before Thanksgiving, extra $10. You want to travel the Sunday after Thanksgiving, an extra $10. That's in addition to all of the other fees that we have grown uncomfortably used to. Why is this happening, Tony? A year ago, there were lots of last-minute deals because demand fell off a cliff, as did the economy.

What's been happening over the past year is that airlines have been eliminating flights.

HARRIS: Yes.

LISOVICZ: There are just fewer seats. It's simple as that. And so, we're paying more. They can't afford to ask more because there are just fewer flights. The hardest-hit cities where you're going to find the least amount of deals, second-tier cities like Cincinnati, Hartford, Tampa, St. Louis. Just less competition -- Tony.

HARRIS: But you have another price war to tell us about. And it's one that could actually work to our advantage, Susan?

LISOVICZ: That's right. This is a war on the Web, Tony Harris. I know the scholar that you are, you like to read.

HARRIS: Come on, come on.

LISOVICZ: Wal-Mart offered 10 books for $10. Amazon.com followed suit. Then Wal-Mart went to $9. Amazon followed suit.

HARRIS: All right!

LISOVICZ: What they're trying to do here is just bring in customers. They can afford to do what is called in the industry a loss leader. Because people -- customers rarely order one thing, so they take a loss on that, hoping that you'll buy some other things. Puts a lot of pressure, though, on rivals like Barnes & Noble, independent booksellers for the few that remain in business. That's something we're watching.

We are seeing a price war on Wall Street, my friend. Right now the Dow is below 10,000. We're seeing triple-digit losses. Why is that? We heard from two big companies, Bank of America, GE both talking about loan losses. Not surprising when you have 15 million people...

HARRIS: That's right.

LISOVICZ: ... who are out of work looking for a job.

HARRIS: Look, keep holding my hand. I don't want to jump. Hang on, don't let go.

Susan, see you next hour.

LISOVICZ: Never.

HARRIS: Have illness, will travel. An estimated 2 to 3 million people seek medical treatment outside their own country each year. Some 750,000 Americans did so last year.

CNN's Dr. Sanjay Gupta takes a look at the pros and cons of medical tourism.

(BEGIN VIDEOTAPE)

DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT (voice-over): It's 10:00 a.m. in San Diego, and Sharon Howell is just arriving on a flight from Atlanta. But she's not here for vacation. She's heading south to Tijuana to have laparoscopic banding obesity surgery.

SHARON HOWELL, BARIATRIC TOURIST: Well, I attempted to have the surgery back in the states, and the insurance company made it extremely difficult.

GUPTA: So, Sharon decided to become a medical tourist.

HOWELL: We all looked up the facility, the physician, saw that he was highly credentialed.

GUPTA: Her experience, so far?

HOWELL: Incredible.

GUPTA: And the price tag, about $6,000. That's less than a third of the cost in the United States without insurance.

PAULO YBERRI, DIRECTOR, HOSPITAL ANGELES TIJUANA: It's a different economy, different cost structure. Insurance costs for the facilities, for the doctors. So, a bunch of different factors that if you add them up, sum up to lower costs, but it does not in any way affect the standards of quality.

GUPTA: But there can be risks when seeking care abroad. So says Emory University's Dr. John Sweeney.

DR. JOHN SWEENEY, CHIEF OF BARIATRIC SURGERY, EMORY UNIVERSITY: The issue is the long-term follow-up and continuity of care that is going to be difficult to achieve.

GUPTA: Also, it is important to research the types of certifications both the hospital and the surgeon hold. And patients should be prepared to pay out of pocket for complications that may arise once they return home. Those who receive poor or damaging treatment abroad often have no legal recourse.

But Sweeney does note, just because a hospital is outside U.S. borders doesn't mean it's bad.

SWEENEY: We tend to be very closed-minded and not realize that, hey, there's companies outside the United States that do this as well as we do, or better.

GUPTA: As for Sharon, she says all the travel has been worth the cost savings.

HOWELL: I work at a hospital institution, and this is very well run.

GUPTA: Dr. Sanjay Gupta, CNN, reporting.

(END VIDEOTAPE)

HARRIS: And this weekend on "HOUSE CALL WITH DR. SANJAY GUPTA," new explanations of near-death experiences and tracking the H1N1 vaccine from production to your doctor's office, Saturday and Sunday, 7:30 a.m., Eastern, only on CNN.

(COMMERCIAL BREAK)

HARRIS: Boy, you really got to listen to this story. Stay with me here. Civil-rights activists are demanding a Louisiana justice of the peace resign. Terence McKay, who is black, and Beth Humphrey (ph), who is white, wanted to get married. But justice of the peace Keith Bardwell refused. He claims the vast majority of interracial marriages end in divorce.

(BEGIN VIDEO CLIP)

TERENCE MCKAY, GROOM: He's saying 99 percent of it wind up into divorce. But how many people getting married winds up in divorce, you know, white or black?

(END VIDEO CLIP)

HARRIS: The justice of the peace says he is not a racist, but, quote, "I just don't believe in mixing the races." Bardwell says he has, another quote here, "piles and piles of black friends, and they use my bathroom."

Another justice of the peace married the couple. The newlyweds are filing a discrimination complaint with the U.S. Justice Department.

And here's what we're working on for the next hour of CNN NEWSROOM.

Tough choices for the Obama administration from Afghanistan to Iran and beyond. An exclusive interview with Secretary of State Hillary Clinton on the challenges facing the president.

Plus, talking with actress Nia Long on a subject close to her and nearly all women. It's hair. Yes, hair, the root of the issue. That and more next hour, right here in the CNN NEWSROOM.

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