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American Morning
Independents Backing Republicans; Vaccine Arrives for Troops; Private Questions in Census; Open Enrollment Season; White House Senior Adviser's Friendship with Obama
Aired November 05, 2009 - 08:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KIRAN CHETRY, CNN ANCHOR: Welcome. Glad you're with us on this Thursday, November 5th. Welcome to AMERICAN MORNING. I'm Kiran Chetry.
JOHN ROBERTS, CNN ANCHOR: Good morning to you. I'm John Roberts. Thanks for being with us.
Here are the big stories we'll be telling you about in the next 15 minutes. Anxious Democrats wondering how to win back independent voters and whether to rethink the party's priorities in the wake of a bruising election night. But it's business as usual at the White House, where they claim voters were not making a statement about the president or his policies when they elected two Republican governors on Tuesday.
CHETRY: Also Americans waiting in long lines around the country to get the H1N1 or swine flu vaccine. Well, now the Pentagon is shipping the vaccine to the front lines, but there is not enough to inoculate all of our troops. So what happens if swine flu goes through the ranks and gets out of control? We're live at the Pentagon with more.
ROBERTS: And Congresswoman Michele Bachmann is calling on opponents of the Democrats' health care plan to help defeat, quote, "The crown jewel of socialism." She's asking them to gather for a noon press conference on Capitol Hill and then roam the halls of the House, making housecalls on your member of Congress. We get to ask her first what this is all about when she joins us live, straight ahead.
They call themselves independents for a reason. Now some nervous Democrats are wondering what it's going to take to win them back. Big victories by Republicans in two key gubernatorial races on Tuesday night were made possible in part by Independent voters, the same Independent voters who backed Barack Obama just one year ago. And that has many Democrats wondering if their party is out of step with the people.
Suzanne Malveaux is live at the White House this morning. The White House tried to paint it, Suzanne, as no big deal, what happened on Tuesday night, but are those concerns shared by Democrats who worked there on Pennsylvania Avenue?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: You know, the White House is very clear. They're very much aware of the Democrats who are saying that they are concerned that the White House - and they're privately and publicly saying this to White House aides, that they're out of step, they're out of sync, out of touch here with what the American people want.
They want to rejigger this agenda a bit, focus more in creating jobs, less on reforming health care, less on climate change. But the White House says - they're saying, look, this is all related, and they are also categorically rejecting this notion that those Republican victories are a referendum on this president's agenda.
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): White House strategy, in part, if you can't beat 'em, join 'em. Praise the Republican for being just like you.
This about Virginia's GOP winner for governor, Bob McDonnell...
ROBERT GIBBS, WHITE HOUSE PRESS SECRETARY: He ran a campaign a lot like Barack Obama did in 2008, and that was to appeal to the notion that you can bring people together.
MALVEAUX: Polls show people still like President Obama personally but are worried about his economic policies. That's what Republicans are seizing on.
MICHAEL STEELE, CHAIRMAN, REPUBLICAN NATIONAL COMMITTEE: America does want the federal governor running its health care. America doesn't want the federal government buying its cars for it and telling it what cars to drive. America doesn't want the federal government running its banks.
MALVEAUX: Poll watchers are seizing on a swing by independent voters. They put President Obama in office, but went for Republicans by a two-to-one margin Tuesday. That could give moderate Democrats in Congress cold feet when it comes to towing the administration line.
But the White House says not to worry.
DAVID AXELROD, SENIOR WHITE HOUSE ADVISER: They're going to look at the congressional race that took place yesterday in Upstate New York which was really the only national race of consequence.
MALVEAUX: Of course, the Democrats won that race -- proving again that Washington runs on a constant spin cycle.
AL GORE, FORMER VICE PRESIDENT OF THE UNITED STATES: The off- years in New Jersey and Virginia often turn out to go opposite from the year before, and I wouldn't read too much into it. Of course, if it had gone differently, I would have read a lot into it.
UNIDENTIFIED FEMALE: Yes, exactly.
MALVEAUX: And it's always good to get ahead of bad news. Especially when it has to do with the issue voters are most worried about. GIBBS: The White House has said for quite some time that 10 percent unemployment is a very real concern and probably one that will hit soon.
(END VIDEOTAPE)
MALVEAUX: And, John, we're talking about soon as in perhaps 25 hours from now. That's when the October jobs numbers come out tomorrow, and clearly, they're bracing themselves for potentially reaching that 10 percent mark.
What is the White House doing? Well, essentially, they're putting the president out there to make the case that yes, jobs are being created or saved.
It was just yesterday, I was in Madison, Wisconsin, with the president at Wright Middle School and that is what the president was trying to stress here, about 10,000 jobs created or saved when it comes to education and teachers -- that type of thing. That is going to continue because they understand it's a very tough sell for the American people to feel the recovery actually happening in their lives, John.
ROBERTS: And those unemployment numbers are going to be difficult, no question about that.
Suzanne Malveaux for us at the White House this morning -- Suzanne, thanks.
Also new this morning: A direct pitch from President Obama for health care reform. Sources are telling the "Associated Press" the president plans to meet with lawmakers on Capitol Hill tomorrow. He'll make a final appeal for a Democratic health care reform bill that could make it to the house floor for a vote this weekend.
And stick around, because in just a moment, we'll be joined by Minnesota's Republican congresswoman, Michele Bachmann. She's suggested that Barack Obama had anti-American views while he was campaigning for president. She'll tell us why she plans to walk the corridors of the Capitol today, confronting many members of -- as many members of Congress as she can over health care reform.
CHETRY: Well, the H1N1 vaccine has arrived for troops in the war zone, but not enough of it. Those on the front lines are first in line for swine flu vaccine, but the Pentagon is still taking some heat for a plan to give terror suspects the shots.
Our Barbara Starr has the latest developments live from the Pentagon.
And for people that don't understand -- why is it so crucial, especially for soldiers that are serving in Iraq and Afghanistan, to get the swine flu vaccine?
BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kiran, it is very crucial, because, of course, they live in close quarters. Keeping good hygiene practices in a war zone is very tough. You know, Defense Secretary Robert Gates has received his swine flu vaccine, but as you say, most of the troops still waiting for theirs.
(BEGIN VIDEOTAPE)
STARR (voice-over): As Americans wait in lines across the country to get the H1N1 vaccine, the Pentagon this week finally began shipping limited vaccine supplies to troops fighting in Afghanistan and Iraq. Under Pentagon guidelines, tens of thousands of troops on the frontline and those headed to war are the top military priority to receive the vaccine. Even so, suppliers are severely limited. Only half of what is needed is now on the way.
GEOFF MORRELL, PENTAGON SPOKESMAN: Right now, we don't have enough to even take care of all of them.
STARR: The Pentagon is defending plans to offer the vaccine to detainees at Guantanamo Bay as well as those in Iraq and Afghanistan. Prisoners are considered to be high-risk but a lower military priority than troops, health care workers and civilian personnel.
(on camera): I haven't heard an assurance that detainees will get it after civilians in this country.
MORRELL: I -- but Barbara, Barbara, Barbara, you're presuming that I have the knowledge or wherewithal to tell you the protocols that are being used for the general population here. All I can do is speak to what the priorities are in this department.
STARR (voice-over): Troops at home also a priority because they will be called upon to help in towns across the country if the crisis grows. The military's top homeland defense commander has teams that could move it into action.
GEN. GENE RENUART, COMMANDER, U.S. NORTHERN COMMAND: And it would be to provide things like, potentially, logistics movement of supplies, maybe additional health care providers that could assist in immunization.
(END VIDEOTAPE)
STARR: You know, right now, the Pentagon can't even say how many troops have come down with the H1N1 flu because they stopped counting back in July when international health authorities declared it a global pandemic. But privately, military sources tell us, Kiran, hundreds of troops have come down with it and there is a good deal of concern that this is going to spread throughout ranks -- Kiran.
CHETRY: All right. Barbara Starr for us this morning -- thank you.
ROBERTS: Also new this morning, Kellogg's says it will pull a label claiming that Rice Krispies will improve your child's immunity. The company began adding extra antioxidants to its cereal last year and advertised that with a big yellow banner right near to Snap, Crackle, and Pop. The San Francisco City attorney called out the company over the labeling, expressing concerns that it was playing into recent fears about swine flu.
CHETRY: There are new questions this morning about some of the deals that were made under the government's "cash for clunkers" program. The AP found that some rebates for new cars or trucks got worse or the same mileage as the trade-ins, which violated the program's requirements to get more fuel-efficient models. The National Highway Traffic Safety Administration says it's reviewing the reports, and any dealers that submitted invalid trade-ins could have to give back the government rebate.
ROBERTS: In their first year at the new Yankees Stadium, the New York Yankees brought home their 27th World Series title last night, beating the Phillies in six games. They were cheering in Times Square and also in Tokyo, where World Series MVP, Hideki Matsui, Godzilla, as he's now known, hit a two-run homer, a two-run double, and a two-run single in the clinching game. There will be a parade at Broadway and the Canyon of Heroes tomorrow morning.
Well, she is urging people to come to Capitol Hill to make a house call. Why is she doing it? It's Minnesota Congresswoman Michele Bachmann coming up next on the Most News in the Morning. There she is. We'll talk to her -- coming right up.
It's seven and a half minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning.
Congresswoman Michele Bachmann wants opponents of the Democrats' health care bill to help shut the measure down. She is asking them to join her for a noon press conference on Capitol Hill today. She's calling the plan "socialized medicine" and the "crown jewel of socialism."
She's live for us this morning for the "A.M. Breakdown" on all of this.
You were urging protesters, supporters of your position on health care reform to roam the halls there of Congress today in a house call. Why is that necessary?
REP. MICHELE BACHMANN (R), MINNESOTA: Well, because it seems like the lessons of August when members of Congress went home and the American public let their views be known, which is: let's not have the government take over our health care -- that message was very loud. And it seems like in the last several months, members of Congress have forgotten those lessons.
So, I think what we're going to see is the town hall coming to Washington, D.C., just to remind members of Congress, we're the ones that we would like you to pay attention to, not lobbyists, and we don't want the government to own our health care.
ROBERTS: All right. Let me -- let me ask you about some of the things that you just said, Congresswoman. You said government takeover of health care, our government-owned health care, you've also called it socialized medicine, the socialization of America.
What in any of the bills that are making their way through Congress right now would come even close to being socialized medicine or a government takeover of health care?
BACHMANN: Well, for instance, look at page 92 of the bill. That says, after the year 2013, an individual can't purchase private health insurance anymore. So, there's an expiration that private health insurance will expire.
Also, employers will be offered the choice of paying an 8 percent tax or -- and folding their employees into a public plan, or offering the insurance that is in conformity with what government demands. That means, according to the Lewin Group, about 114 million Americans will be dropped from private insurance and put into that public plan. That will collapse private insurance, John, and what will happen, ultimately, down the road is a single-payer -- in other words, the government will be the provider of health insurance.
ROBERTS: Well, you know, there are a number of people who would dispute a lot of what you just said there, particularly the number of people who would go into a public plan, under the Lewin Group's analysis. But, you know, even if people did opt for a so-called public plan, what is there in a public plan that comes anywhere near socialized medicine? It's not set up as, let's say, the British National Health Service is. The government would simply be providing health insurance for people in a private system.
BACHMANN: Well, there's -- there are boards that are set up. Over 110 new boards are set up in this bill. One of which is the Comparative Effectiveness Council. And they will set the rules and regulations.
Again, all private health insurance plans have to be in conformity with what these national boards say. So you may have several different private health care plans, but they all have to look the same. And at the end of the day, when government controls the shots on all aspects of the plans, then government controls the outcome.
ROBERTS: But, again, those would only be the plans that were in that umbrella that the government would set up. People would still be able to have their own private insurance, you know, outside of the confirmations of a government system, correct?
BACHMANN: Well, that's -- actually, there's dispute there about that, because the private plans will have to be in conformity with what government says that they have to be.
ROBERTS: That's if they're part of that exchange.
BACHMANN: You won't be able to keep -- well, you won't be able to keep your current benefits; your current plan will have to conform with what government says. So that -- that's why they all will look the same. At a certain point, they'll converge.
ROBERTS: That's, again, if they're part of that exchange, correct?
BACHMANN: No, all private plans. On page 92 of the bill, it says all private plans. That means every plan in the United States will have to look the same.
ROBERTS: Kristie Greco, who's the communications director for the House majority whip, James Clyburn, said this of you and what you're saying, quote, "What's scary is that Representative Bachmann will go to any length to protect the profits and abusive tactics of the insurance industry by working against meaningful health care reform."
What do you have to say about that, that you're merely trying to protect the health care industry here?
BACHMANN: Well, the very first bill that I introduced in Congress was the Health Freedom of Choice Act. And it's very simple. Rather than businesses being the only one that can deduct their health care expense, I want to level the playing field and allow all Americans access to the tax code, too -- so they can set aside tax- free money to purchase their health care, but also fully deduct all of their health care expenses, their premiums, their copays, purchasing hearing aids, whatever it is they need.
I want people to be able to do that, and own their health care. Not government owning health care, not your employer, but individuals owning their health care, having their control, their ownership, so that they can make the decisions that they want for themselves and their families.
ROBERTS: Let me ask you about a couple of other things that you've said recently. Of course, the 2010 census is almost upon us and you said regarding questions that would go beyond how many people are in the actual household, you said, "For my family, the only question that we will be answering is how many people are in our home. We won't be answering any information beyond that because the Constitution doesn't require any information beyond that."
Do you stand by that statement? Because PolitiFact.com did a fact-check on that. They actually call that a "pants on fire" mischaracterization of what the Constitution says about the enumeration of people. Does the Constitution really say that?
BACHMANN: The Constitution requires the number of people to enumerate or number the people that live in the district. Beyond that, the Congress has passed laws about the census and what people need to do. The essence of my comments had to do with the invasive personal nature of the questions.
Now, the questions have gotten out of control. There's a new survey that's over 28 pages long and that goes every year to about 3 million households. It's very invasive, very personal questions, and on the form, it says, this is mandatory. Americans are required to answer these questions under penalty of fine.
I just don't think Americans should be compelled to answer personal questions that the federal government mandates that they answer. I think people have a zone of privacy that the government should respect.
ROBERTS: But, but isn't that, isn't that an argument to be had there in the halls of Congress? Because what the constitution does, it empowers Congress to make the laws for how the census is carried out and it's the congress over the years...
BACHMANN: Well, certainly, that's right.
ROBERTS: So instead of citing the Constitution, should you not be coming down on Congress and say, look, I don't like the way that congress has dealt with this. We need to change that.
BACHMANN: Well, I wish more members would cite the Constitution. I think that would be a good thing. Because the Constitution limits the authority of the United States Congress. We can only act within the enumerated powers of the Constitution. So I would like, if we could observe and look to the constitution more to direct our actions. And I think, yes, of course, the discussion needs to be here, as it has been, and I'm working with my colleagues here to try and reform the United States census, but the census does have a lot of problems and it seems like it has morphed into becoming a justification for growing big government programs. And that's really not the purpose. The fundamental purpose, as stated in the constitution, is the enumeration of the citizenry within the various states.
ROBERTS: All right. But we should point out, though, that congress' use of the census to ask questions beyond the number of people in a household has been upheld several times by the Supreme Court.
BACHMANN: Yes, and that's, you are right. That's true.
ROBERTS: Obviously, you have got a big fight in your hands there. Congresswoman Michele Bachmann, great to catch up with you. Thanks so much.
BACHMANN: Good to see you, John.
ROBERTS: All right -- Kiran.
CHETRY: Well, still ahead, it's open enrollment season, that's where workers at many big companies have to sign up for their health coverage and other benefits for the next year. But this year there are some big changes in open enrollment and also what you may be paying for health care. Our Gerri Willis is going to be joining us to tell us what we need to know. It is 18 minutes past the hour.
(COMMERCIAL BREAK)
CHETRY: Twenty minutes past the hour. Welcome back to the Most News in the Morning. You know, if you work for a big company, then you know what time it is. It's the open enrollment season, as they call it, where you sign up for your health benefits, your coverage, and other benefits you want for year. It happens every November. But personal finance editor Gerri Willis says that this year it is going to be more important than ever. Good morning. And, you know, there is...
GERRI WILLIS, PERSONAL FINANCE EDITOR: Good morning.
CHETRY: You have got to read the fine print this time around, because there are a lot of changes.
WILLIS: I'm telling you. There are a lot of changes; 159 million of us get our coverage this way. In the past, if you didn't sign up for health coverage during open enrollment, your employer would just give you whatever plan you had last year. You can't count on this this year. Open enrollment is mandatory at some companies. Some 10 percent are saying, hey, if you don't participate, we're not going to give you any coverage. Others are saying, we'll default you into a plan that we choose.
You don't want to have that happen to you. You want to make sure that you get the coverage that you choose. Other changes that are coming, your costs are rising. Let's take a look at some of these numbers from PricewaterhouseCoopers. They report 42 percent of employers plan to reduce their contribution to health insurance premiums. That means you're going to pay more. According to Hewitt associates, your premiums and out-of-pocket costs for health care will rise 10 percent this year.
And many employers are offering what they call these consumer- driven health plans. These are high-deductible plans. You might have to pay up to $10,000 out of your own pocket before your coverage kicks in. Now, these plans make your monthly premiums dead cheap. This is why a lot of people pick them. Young people in particular don't want to pay the money, they choose them. But, let me tell you, it really puts you at risk if you need help.
CHETRY: And so, you're talking about why some young people may choose that. What if you're somebody - you're the only person in your family that gets health insurance, and you want to make sure that your family and children are covered.
WILLIS: This is getting trickier and trickier. A lot of companies out there are auditing people who cover family members on their health coverage. I just got this this week myself. My insurer called me and said, hey, is your husband, does he have any other coverage we can call on at this time? You may be getting these calls or these letters as well. Some companies are requiring spouses to complete those health risk assessments and some are charging higher premiums for spouses who have access to health care coverage through their own jobs.
There is some good news, here, though, thankfully, wellness incentives. You know they're doing more and more to help employees today stay healthy. Some preventative visits are going to be free under these new plans. You won't have to pay anything at all, not co- pay, not co-insurance. They are also giving out little bennies if you participate in these risk assessment surveys. So you can get a little something for your money, a little extra. But let me tell you, bottom line here, we'll all going to be paying more.
CHETRY: That's right. And also you can't just do nothing, you have to act.
WILLIS: That's right. Make sure you attend the open enrollment sessions, make sure you know what's going on.
CHETRY: All right. Gerri, thanks so much. And meanwhile Gerri is going to be hosting a special live edition of "Your Bottom Line" on Saturday, all about open enrollment. She is going to take your phone calls and your e-mails about some of the important decisions that you are going to have to make, regarding your healthcare as well as your families'. It's Saturday 9:30 Eastern right here on CNN.
ROBERTS: Valerie Jarrett, she's probably one of the people closest to the President and his wife. How does she like being friends with the man that she works for? You know, her boss. The President of the United States. We continue our special look at the President's Brain Trust coming up next. We'll have that for you. It's 231/2 minutes after the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning. So what's it like when one of your closest friends is also your boss and the President of the United States? That's life for Valerie Jarrett, a senior adviser to President Obama. Suzanne Malveaux has part four of our AM original series, "The Presidential Brain Trust."
(BEGIN VIDEOTAPE)
MALVEAUX (voice-over): Valerie Jarrett has called her relationship with the president a mind meld.
VALERIE JARRETT, SENIOR WHITE HOUSE ADVISER: We're good friends, as you know, Suzanne. We've known each other for a very long time. You get a pretty good sense of them.
MALVEAUX: They met 18 years ago when Barack Obama was a young law professor in Chicago. Jarrett was interviewing his fiancee, the future First Lady, Michelle Robinson, for a job in the mayor's office. Obama was making sure Jarrett was on the up and up.
JARRETT: When she was speaking, he would just look at her with this adoring look, and -- but he was really tough on me, in the nicest possible way.
MALVEAUX: The three became fast friends. Now, President Obama says he runs every important decision by Jarrett, trusts her completely, considers her family.
JARRETT: I hope, because, you know, obviously, he would trust me the way he would a close friend, he knows I have his best interest at heart.
MALVEAUX: She laughs when I suggest, perhaps, she is his consigliere. She doesn't like talking about herself.
JARRETT: Can you see I'm really kind of comfortable with this?
MALVEAUX (on camera): I could see. You're pushing me back here.
MALVEAUX (voice-over): She prefers to talk about the team and paints a picture of being in the Oval Office with the President.
JARRETT: When everyone's done talking, if there have been a couple of people who have been quiet, he'll say, well, Suzanne, what do you think about this issue?
MALVEAUX: She can also read the President's body language, when he's heard enough talk.
JARRETT: When he's finished with the debate, then he's finished and he's ready to move on.
MALVEAUX: Skeptical newcomers would pull Jarrett aside and ask her for her take.
JARRETT: Well, what did he really mean? I know he said this, but what was he really thinking? And I have such delight in being able to say, he meant exactly what he said.
MALVEAUX: Jarrett is a liaison to the business community and conducts outreach with African-Americans. But it's her role as confidant to the president that makes her the ultimate insider. She has the office once used by Karl Rove and the former First Lady, Hillary Clinton. She is often the only woman in meetings with the president, but dismisses any talk of tension with the boys, as some of the male power players are referred to in the White House. Jarrett's challenge is separating her friendship with the President from her job.
JARRETT: If we're in the oval office, I call him Mr. President and it's very formal. I really try to compartmentalize our friendship and what we do outside of the office from my role as his senior adviser.
MALVEAUX: When they're hanging out, it's as friends, indulging in their favorite pastime.
JARRETT: Well, we like to eat.
(LAUGHTER)
JARRETT: We have a - well he's a very healthy eater. I'm not so much the healthy eater, but we have a lot of wonderful conversations around the dinner table.
(END VIDEOTAPE)
MALVEAUX: And John, the dinner table she's talking about now is clearly behind me, the residence of the White House. It doesn't get any better than that when it comes to access. She also told me his favorite dessert, pecan pie. That's also my own dad's favorite there. One of the things she also mentioned as well, the stories about the all-male pickup basketball games being some sort of center of power.
She called that completely bunk. She says that really, all the responsibilities that she gets as well as many other women in the White House, that that is really where the power is and she should know, she has a lot of responsibilities and what makes her also unique from all these other guys who are in those inside meetings is that she's the only one who really knows Michelle as well as Barack Obama. So she works with the East Wing, the West Wing, making sure that it's a seamless interaction, she says. John.
ROBERTS: Nothing, nothing to not like about pecan pie. That's for sure. Does Valerie Jarrett think that Mr. Obama has changed since becoming president?
MALVEAUX: It's a great question, John. She actually says, this is the one thing she likes about him, is that he has not changed, that he's grounded, he has a sense of self. She even calls him downright predictable. What I found fascinating, and I've known Valerie Jarrett the last several years, gotten to know her, interviewed her several times throughout the campaign, and she's the one who has changed a little bit. She's a bit more guarded.
The reason why, she hates to talk about herself. It is a very difficult thing. But she's also, you know, one of the president's BFFs. She's not going to be spilling any beans here. She's very loyal and protective of him as well.
But she was able to give us some really good nuggets in terms of her relationship and how the president deals with others.
ROBERTS: A fascinating look behind the curtain this morning. Suzanne Malveaux for us at the White House. Suzanne, thanks so much for that.
Tomorrow we look at Melody Barnes. She's in charge of the president domestic policy council, helping the White House shape its message on everything from education, taxes, and health care. That's tomorrow in our special in-depth series, "The Presidential Brain Trust."
And we're crossing the half hour. Here are this morning's top stories.
The major retail chains are reporting on October sales, and so far the results are mixed. Shoppers opened their wallets a bit more last month, but were still restrained by a tight credit and a weak job market.
The United Nations is moving some 600 people out of Afghanistan after last week's deadly Taliban attack on a U.N. guest house in Kabul. Five U.N. workers were killed. A spokesman says the 600 nonessential staffers will be temporarily relocated to more secure locations in and outside of Afghanistan for several weeks. And the Senate offering help for house hunters. Lawmakers not only voted to extend the $8,000 tax credit for first-time homebuyers, they expanded the program to include a $6,500 credit for people who have owned their current homes for at least five years.
To qualify buyers in both groups have to have a contract in place by April 30th of next year and close by the end of June -- Kiran.
CHETRY: Well, it was the biggest bailout in government history, as we know, and now as the economy starts to recover, many have been asking why does it feel like Wall Street is back to business as usual while Main Street is still hurting?
And also, has anyone learned any lessons from the bad bets that helped to begin the worst recession in a generation?
I'm joined by business reporter Charlie Gasparino who has a new book out, "The Sellout, How Three Decades of Wall Street Greed and Government Mismanagement Destroyed the Global Financial System."
Charles, good morning. Thanks for being with us. It's interesting because you were researching this book before the collapse of Lehman Brothers.
CHARLES GASPARINO, AUTHOR, "THE SELLOUT": Oh, before the collapse of Bear.
CHETRY: Before the collapse of Bear Stearns.
GASPARINO: I had the book deal in January. Bear Stearns blew up in March, 2008, because I thought 2007 was really bad. Every firm on the street, it was known then, took these huge, immense bad debts on these toxic mortgages. They held them on their balance sheets.
They were selling out pieces of them to foreign countries, to foreign sovereign wealth funds.
But then it kept getting worse. Right after Bear, you had Lehman and then you had the grand finale. And you don't have this finale like w had last year, which is we're still feeling it without many years. This didn't happen over two years. This happened over 30 years.
CHETRY: Right. But are we out of the crisis part of the banking problems?
GASPARINO: Maybe. You really don't know.
A lot of this depends -- listen, here's the thing. The banks still have on their balance sheets and "The Sellout" talks about this, trillions and trillions of this stuff that could turn increasingly toxic depending on where unemployment goes.
If unemployment hits 11 percent, I believe a lot of people I talked to this, and this is in the book, believe that you could have another banking crisis. CHETRY: And the other question, too, though, is why are we seeing and why are we hearing about record bonuses, record profits at places like Goldman Sachs if we're still possibly a step away from a crisis?
GASPARINO: "The Sellout" talks about this. In 2007, the Dow was at almost 14,000. Then you know what happened next. I mean, I would just be really careful about these short-term gains on Wall Street.
What's going on right now is the government is essentially subsidizing Wall Street's profit-making. They did it for every year, every blow up in '86, in '94, in 1998, we had dry runs of what happened in 2008. Every time the government came in and threw money at Wall Street.
They're essentially doing the same thing right now, a little different. Goldman Sachs is called a commercial bank right now. You can't get an ATM card, you can't set up a checking account. By being declared a commercial bank, Goldman Sachs can go out and borrow cheaply and do its trading.
CHETRY: And have little exposure to consumer debt and the people that need money for their debt.
GASPARINO: But what this book shows and what other books haven't showed yet is what government is doing now. I mean, they're doing it now in a more massive way then they have in the past.
CHETRY: So explain to people what you're talking about when we say that government has sort of had a hand in all of the reasons why we were led up to this point.
GASPARINO: Well, it's something called moral hazard. Every time wall street has blown up, and it blew up in '86, as I showed, '94, in 1998 when a massive hedge fund almost took down a lot of Wall Street firms, the government threw money at it, they made life easy, they tried to bail them out of their profits.
How'd they do that? Lower interest rates, direct government bailout, as they did in 1998. They basically tried to paper over the losses of Wall Street to save them.
When you do stuff like that, people come back and they think logically, if the government's behind me win can take more risk in the future. And they took so much risk after the last time in blew up in 1998, 10 years, in 2008 you had the mother of all implosions.
And by the way, Lehman Brothers, you talk about Lehman Brothers, they were going to blow up in 1998. They were saved by the federal government.
CHETRY: Now, I want to ask you about this, because when Congress did give out the billions in bailout money, there were also promises, and we've heard them all the time, that what they were going to do is enact reforms to make sure this wouldn't happen again, yet we still haven't seen any large-scale reforms. Are we going to see things change?
GASPARINO: The bottom line is I'm dubious about regulation. There were lots of regulations even when all this stuff occurred, believe it or not. I don't think the pay caps really get at it.
The problem is that Wall Street doesn't learn unless you smack them around a little bit. 1998, we should have let some firms go under. 2008, we couldn't let them go under because if they did, I think they would have taken down the whole system.
I think at this point, you have to stop giving them the bailout money. Goldman Sachs being declared a commercial bank so it can borrow easy is absurd. You should basically pull that plug right now. They're on their own. If they want to be a hedge fund, if they want to take risks, you're on your own.
And by the way, if you lose this time, we're not there to help you.
CHETRY: The book is very interesting. It's called "The Sellout," and it explains a lot of this in very good detail, some stuff, as you said, that we haven't seen before. Charles Gasparino...
GASPARINO: And some racy stuff -- pot-smoking CEOs.
(LAUGHTER)
CHETRY: Actually that's now the excerpt that we have, but we do have an excerpt from your book at CNN.com/amfix. Charles Gasparino, thanks so much.
GASPARINO: Thank you.
CHETRY: It's great to see you -- John.
ROBERTS: So they help to put a lot of food that you eat on your table, but that's a crackdown against them that may affect the farmers who try to feed you. Our Jason Carroll is taking a look at this problem. It's a big one, let's tell you that. Stay with us.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. It's 39 minutes past the hour.
You know, we literally eat the fruits of their labor, immigrants who do the dirty work for farmers that many Americans won't or don't do.
ROBERTS: In this a.m. original report, though, our Jason Carroll found out a new focus on the people who hire illegal immigrants is threatening to put some farms out of business.
(BEGIN VIDEOTAPE)
JASON CARROLL, CNN CORRESPONDENT: They're the backbone of the agriculture industry, workers toiling in apple orchards like this one in Yakima, Washington, climbing, picking, bagging thousands of apples on this chilly morning, earning little more than minimum wage.
The orchard's owner Rob Valicoff oversees all 1,200 acres.
ROB VALICOFF, FARMER: Come on, guys, we don't need to pick this green crap.
I guess I'm done ranting and raving.
CARROLL: Done ranting? Not for a minute.
CARROLL (on camera): And you can't find domestic U.S. workers or U.S. citizens to come out and do this work?
VALICOFF: No. We've had some out here, but they don't last.
CARROLL: Valicoff says he relies on migrant workers, many of whom comes from Mexico. He checks their paperwork, but that's no guarantee that they're here legally. He suspects up to 70 percent of his workforce may not be legal, and he says he's not alone.
VALICOFF: You think on the farms this size in the state of Washington that I'm the only farm that doesn't have somebody here that's illegally here? We all have them. We don't know who they are, because we can't by law ask them, are you a legal worker, are you a legal citizen?
CARROLL: Immigration and customs enforcement chief John Morton says the agency has sifted under the Obama administration, the focus not just on workers here illegally, but on the employers who hire them.
But in an interview this past August, Morton told me the agency still wants to work with employers trying to do the right thing.
JOHN MORTON, ASSISTANT SECRETARY, DEPARTMENT OF HOMELAND SECURITY: The only way we're going to make headway is to enter into a focused partnership with employers, and so there is going to be a bit of a carrot and a bit of a stick.
CARROLL: Valicoff knows agriculture and wonders, where's the carrot? As for the stick, he's facing thousands of dollars in fines for his workers' documents not being in order.
VALICOFF: Very frustrating, very.
CARROLL: Though not required, ICE says employers like Valicoff should use their system called e-Verfy to validate a worker's Social Security number.
However, immigration attorney Tom Roach says ICE doesn't require e-Verify because they know the reality of the workforce.
TOM ROACH, IMMIGRATION ATTORNEY: If e-Verify was required, the farmers in America would go broke because they would find out that 70 percent of their farm workers are illegal, period.
CARROLL: Valicoff think e-Verify is the answer for farmers either. He says immigration reform is.
CARROLL (on camera): And in the meantime?
VALICOFF: Same old, same old. Look the other way.
(END VIDEOTAPE)
CARROLL: Well, a spokesman for the Department of Homeland Security Secretary Janet Napolitano says they've been holding roundtable discussions around the country for several months with law enforcement and officials who work along the border to hear their ideas for immigration reform.
The president wants to see some movement on reform by the beginning of next year. And you know there are a lot of farmers out there who say it cannot come soon enough.
ROBERTS: Did you ask the orchard owner why he doesn't use e- Verify?
CARROLL: Absolutely. And he says the current program that he uses right now, which is a program where he uses guest workers, works for him. And I think it's a bit of, if I use e-Verify, I know what the reality is going to be, and I'm going to lose that big chunk of my workforce.
CHETRY: It's interesting, though. There's a big debate over really who's to blame for all of this. You, me, and Christine Romans were all going back and forth on this.
She's basically say if there's such a demand, that it should cost more. If they need these workers, then they should get paid more for those types of jobs.
CARROLL: And there is the argument for that -- pay a lot more for the workers who are out there doing the work. But the reality is, are you going to be willing to pay more for an apple at the grocery store?
CHETRY: Five bucks for four apples, the organic ones.
ROBERTS: They're already expensive enough.
Jason, thanks so much for that.
CHETRY: Great piece, Jason, thanks.
Coming up, are you ready for the CNN challenge? This is a little bit of fun that we're having here at CNN today. And John and I had a chance to test out our news knowledge. Hopefully you were sleeping for that part and you can wake up now.
ROBERTS: I think the news knowledge was good. It was the math knowledge that was lacking just a little bit.
(LAUGHTER)
CHETRY: We have a new Web site to show you, so we want to warm you up for a question.
ROBERTS: Yes. When you're sleep deprived the first thing that goes the computational capabilities of the brain.
Here is the question for you. What company filed for the fifth largest bankruptcy in U.S. history, was Chrysler, CIT, General Motors, or Thornburg Mortgage? When we comeback, we'll give you the answer. Stay right there.
(COMMERCIAL BREAK)
ROBERTS: Twelve minutes to the top of the hour. Welcome back to the Most News in the Morning.
It is time for the CNN Challenge. Before the break, we asked you this question. What company filed for the fifth largest bankruptcy in U.S. history? Was it Chrysler, CIT, General Motors or Thornburg Mortgage?
CHETRY: All right, well, we have the answer for you. If you listened to Christine Romans last week, you know it's CIT Group. This is a company that's responsible for providing small business loans to a lot of small and medium size business and last week, yes, the news that they were filing for bankruptcy.
ROBERTS: So here is the site, it's CNNChallenge.com.
CHETRY: All the news junkies listen up. This is how you get to test out your news knowledge and see how it stacks up. You can basically either, compete against yourself, to try to get a better and better score. You can bring your friends into it, or you can actually play with people from all around the world.
ROBERTS: There are three rounds of news trivia, five questions per round.
CHETRY: And you get to pick your favorite CNN anchor as your own personal host. So of course, I'll pick mine. There we go.
(BEGIN VIDEO CLIP)
ROBERTS: I used to be a deejay. I've got some sweet skills, pick me as your host.
(END VIDEO CLIP)
ROBERTS: Yes, and if you don't want to pick me as your host, you could always pick the fabulous Kiran Chetry as your host.
(BEGIN VIDEO CLIP) CHETRY: I have been vented (ph), I'm on the air earlier than most of these other anchors so I've been chugging Red Bull since 3:00 a.m. pick me.
(END VIDEO CLIP)
CHETRY: There you go.
ROBERTS: And you can imagine Kiran on Red Bulls.
CHETRY: Here it is.
ROBERTS: I'm excited.
CHETRY: Who are we going with then?
ROBERTS: Let's go with Wolf.
CHETRY: Wolf Blitzer, OK. So Wolf Blitzer.
(BEGIN VIDEO CLIP)
WOLF BLITZER, CNN ANCHOR, "THE SITUATION ROOM": Happening now, you, picking me to host your quiz.
(END VIDEO CLIP)
ROBERTS: All right.
CHETRY: All right, so let's get it started.
ROBERTS: So, so far, so far we have Kiran's done the quiz and I've done the quiz. So let's bring in a couple of members of the quiz. Philip and Bruce, do you come on in.
CHETRY: All right, come in.
ROBERTS: Come on, come on. Hurry up because the clock is running here.
CHETRY: The clock is ticking, get in here, guys. Who was awarded major league baseball's 2009 Roberto Clemente Award for Community service and excellence in the field?
Is it Cal Hamilton, of the Phillies, Gerald Jeter, Orlando, Houston or Albert.
CREW: Jeter, Jeter.
CHETRY: They're Yankee fans. They're right. You got it.
ROBERTS: Just made it, OK.
Next question. Here we go. What is the name of NASA's new rocket, flight tested for the first time on October 28th?
Is it the Ares 1-X, the Athena K-12 or Hercules X-1, or the Jupiter 120?
CREW: Ares 1-X.
CHETRY: That means you guys were awake for the last hour when Reynolds answered it correctly. All right.
ROBERTS: Or they remember it from last week.
CHETRY: All right, let's check it out. Here we go. All right, former Bosnian Serb leader, guest pronouncer (ph) John.
ROBERTS: Biljana Plavsic.
CHETRY: Was released from prison recently. When did she come to power? Guys.
ROBERTS: 1992, 1995, 1999 or 2003?
CREW: 199...
ROBERTS: 19 what?
CHETRY: Somebody answer.
CREW: Boom.
CHETRY: All right, oh, my finger slipped. I'd been hitting -- all right.
ROBERTS: Next question.
CHETRY: Here we go, all right. Let's get this one. A crew member aboard the "USS Rammage" accidentally fired a machine gun into which port city? Was this in Yokuzuka, Japan; was it in Poland, Dakkar, Senegal or Durbin, South Africa?
CREW: Buy a vowel.
ROBERTS: No, no, you cannot buy a vowel. Hurry up, which one was it?
All right. Next question here. My goodness.
Why did Hamas Prime Minister Ismail Haniyeh appear in public in Gaza recently? Was it to attend a Hamas political rally, to refute allegations in the U.N. report, to present a soccer trophy, to broker peace with rival Fatah Factions?
CHETRY: Come on guys, nine seconds. Soccer trophy?
ROBERTS: Soccer trophy.
CHETRY: You're right.
ROBERTS: Yes.
CHETRY: Good job.
ROBERTS: They think, they got the signal in my voice the way I asked the question. The way I downplayed it.
All right, so how did we do here?
CHETRY: You guys actually get to go on to the lightning round so it means you did pretty well.
ROBERTS: Yes, all right, so then Wolf was helping you out there. And that's the CNN Challenge, that's the way it works.
CHETRY: Pretty cool, if you want to try it yourself go to cnnchallenge.com.
Right now, it's 52 minutes past the hour. Good job, guys.
CREW: Yes.
(BEGIN VIDEO CLIP)
BLITZER: Happening now...
(END VIDEO CLIP)
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. It's viral video time. Did you ever bring someone a bottle of wine and that person then says, "I don't own a corkscrew?"
ROBERTS: You can try using a screwdriver or coat hanger, but if you don't have any of the gear that you need to do, it's very difficult to try to get the job done.
So our Jeanne Moos takes a look here this morning at people who might even try using their shoe to get the cork out of the bottle.
(BEGIN VIDEOTAPE)
JEANNE MOOS, CNN NATIONAL CORRESPONDENT (voice-over): He may not be the world's greatest wine connoisseur, but this Frenchman sure knows how to pop his cork, and we don't mean the usual way. We mean without a corkscrew. Call it the cork shoe technique.
He's the toast of the Internet for his sure-footed effort to open what surely wasn't the first bottle of the night. Go ahead and laugh, but 20 seconds later, this Frenchman had that bottle uncorked.
His feet is the subject of Internet instruction.
UNIDENTIFIED FEMALE: How to open a wine bottle without a corkscrew. Step one: stick a screw into the cork.
MOOS: Ranging from using a screw and a hammer, to a hammer and beater from a mixer, although that method ended in the cork being shoved inside the bottle. Others recommend using a sharpy (ph). This method is best if you're planning on polishing off the whole bottle.
If caught without a corkscrew, a wine professional might resort to a tree.
(on camera): Or you could try using the phone book. Who says the Internet has made the phone book obsolete. Try doing this with a laptop.
You know, a nice red goes very well with the yellow pages. Funny, when they did it, it looked so easy. Do you think because it's cheap wine?
UNIDENTIFIED MALE: Nada.
MOOS: I'm exhausted. So my producer, Richard Davis, took over.
(voice-over): Champagne corks are much bigger and easier, even sword play works.
UNIDENTIFIED MALE: Hey.
MOOS: But here's a method that leaves you more screwed than a corkscrew. We tried whacking the floor. We tried the bottle in boot technique. But the cork wouldn't budge.
UNIDENTIFIED FEMALE: Eighty-five percent of the world's wine corks come from Portugal.
MOOS: Yes, well, ours was the cork from hell.
RICHARD DAVIS, CNN PRODUCER: This is really frustrating.
MOOS: Jeanne Moos, CNN, New York.
(END VIDEOTAPE)
CHETRY: A good way to get out aggression.
ROBERTS: Yes. They better hope that those walls are thick too, by the way.
CHETRY: They're doing that in her office, by the way. I was thinking that as well.
ROBERTS: I can open a beer on a picnic table, but...
CHETRY: I can do that too.
ROBERTS: Yes. I mean that's easy.
CHETRY: It's all about the angle, right?
ROBERTS: Yes. There you go. Just whack it down.
I don't know. We'll have to try to wine bottle one of these days. CHETRY: All right.
ROBERTS: But the important thing is this morning, continue the conversation on today's top stories, go to our blog at cnn.com/amfix.
That's going to wrap it up for us. We'll see you back here bright and early again tomorrow morning. It will be Friday which is always a good thing.
CHETRY: Absolutely.
Meanwhile, the news continues now with "CNN NEWSROOM" with Heidi Collins. Good morning, Heidi.
