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New Plan Helps Struggling Homeowners; Effects of Health-Care Bill Explained; Mining For the Truth About Gold4Cash; Talking Political Civility With Memphis Tea Party Founder; BackStory: Kandahar
Aired March 26, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: As Tony said, I'm Ali Velshi. I'll be with you for the next two hours and this two hours every weekday as I take every important topic that we cover and break it down for you. I'm going to try and give you a level of detail that will help you make important decisions about your mortgage, your taxes, your health care and your security.
Let's get started. We've got this stuff on the rundown. The administration announcing help, if your mortgage is bigger than your house, but does this reward irresponsibility? Are we bailing out people who don't deserve it? And who gets to decide who deserves it? We'll show you how the new plan affects you.
Your health-care questions keep coming in, so we keep inventing new avatars. Today you'll meet Infertile Irene and Abortion-Rights Annie. Our health-care coverage is getting very personal today. We're not holding back.
That said, there are some people who should be holding back, especially if they're about to raise a fist, hurl a brick, or cock a gun. The health-care battle has gotten downright nasty. Who is fueling the extremists? The political right? The left? The media? Or plain old anger and frustration?
It's hard to conceal. It's hard to have a real economic recovery when so many people still don't have jobs and so many people are still losing their homes. Look, I'm the chief business correspondent at CNN. They pay me for those kind of insights, but the government has tried all kinds of programs to save jobs and homes. And some of them haven't worked very well.
Now comes one more. It's aimed at helping as many as 4 million struggling homeowners avoid foreclosure. Four million, by the way, that would be about 23 times as many people as got permanent mortgage makeovers under the current plans.
The new plan would use about $14 billion from TARP. That's the bailout. That's from October of 2008. You'll remember that big plan. It will use 14 billion of that money to pay lenders to write off some of the principle that is owed to them by underwater borrowers. You may know that name. Underwater means that your home is worth less than the mortgage, the value of the home. Your mortgage is worth more than the house. It's called negative equity. What makes houses lose value? Well, other houses getting foreclosed, for a start. It's a very, very vicious circle.
Let me break this down. I'm going to borrow a technique from my friend and colleague, Elizabeth Cohen. She's been using it to talk about medical stories and health care. I'm going to bring these avatars back, because I really like these ideas.
This is Hard-Luck Harry. Let's talk about Harry. He is underwater, meaning his home is worth less than his mortgage. And he's also -- see the pink slip? He's unemployed. Under the new plan, Hard-Luck Harry could see his mortgage payments lowered to no more than 31 percent of his income for at least three months and maybe longer.
Now let me show you Struggling Sara. Struggling Sara is underwater. Her house is worth less than her mortgage. That's the little house underwater. But she's working, and she's just getting by. She's got a wage-earning job. She, too, could get lower payments. But if she's not delinquent, meaning she hasn't fallen behind on her payments, she might get a reduction in the principle, the actual amount that she owes the bank.
Now, let me show you Responsible Roger. Responsible Roger, also underwater. His house is also worth less than the mortgage on it, but he's employed, and he's been making his payments more or less comfortably. You know what he gets? He gets the government's best wishes. That's about it.
And finally, there is Irritated Iris. We've been hearing from some of you. Irritated Iris is not underwater. Her mortgage is substantially lower in value than her house is. She has no sympathy for her neighbors who bought houses they couldn't afford or took out crazy loans with impossible terms. Guess what? No help for her either, but she may be reap the indirect benefit, because if there are fewer foreclosures, property values in her neighborhood might increase.
And that is basically the bottom line for all of us. You may not like how this works, but you may -- it may have some benefit for you in the end.
I want to bring in some people who know a little bit more about this than I do. Let's introduce my co-anchor from "YOUR $$$$$" Christine Romans. She's a business correspondent at CNN. Peter Morici, he's the international business professor at the University of Maryland. And Stephen Leeb, an economist and investment analyst joining us from New York. These three all have something to say about this. And I will talk to them as soon as we come back.
Stay with us.
(COMMERCIAL BREAK)
VELSHI: Break the cycle, the vicious cycle of home foreclosures and declining property values. Now, besides my avatar friends who you just met a few moments ago -- Hard-Luck Harry, Responsible Roger and the others -- I'm joined by some non-avatars right now to actually have the discussion because we can't really talk to avatars.
Christine Romans is my co-anchor on "YOUR $$$$$." Peter Morici is a professor of international business at the University of Maryland, and Stephen Leeb is an investment analyst, editor of "The Complete Investor Newsletter." He's -- he's also an economist.
Thank you all for joining us.
Peter, I want to -- I want to start with you, because there -- there's surprising disagreement on the value of this program and one that was announced by Bank of America earlier this week. I'm hearing these -- these terms "moral hazard" again, rewarding irresponsible behavior, largely from people who didn't do anything wrong. And not that people who got into trouble necessarily did anything wrong. But a whole bunch of people saying we're helping everybody but those who didn't over-extend themselves in their homes and continue to make payments.
I want your thoughts on this.
PETER MORICI, PROFESSOR, UNIVERSITY OF MARYLAND: Well, the people that are going to get the largest benefits from those -- this program are people with a mortgage that they're underwater, because they borrowed everything they can; and on top of that, they have a second mortgage.
Those are very often the people that bought a new SUV every other year, have a big home theater and so forth. And they were very calculating and borrowed up to the limit. Now they're struggling, but they're making their payments, so the president is going to buy them down? What are they going to do? They're going to go get in doubt again.
And there was another avatar you didn't show. And that's Newlywed Nelly and Ned. They can't afford a home, but they qualified for a mortgage because prices are still too high.
VELSHI: Right.
MORICI: By keeping these -- Irresponsible Harry in his house, it keeps the value of that home from falling to the level that they could afford it. There's no such thing as a free lunch.
VELSHI: This is an interesting point, Stephen. I want to go to you about this. Because for all those people who have told me, "I don't know why they're being rewarded," and I'm telling them, "Well, bottom line is, would you like it if this program causes your home prices to increase?" They say yes.
So Peter is saying, we're going to be artificially inflating home prices. A lot of other people are saying, "At least if my home prices go up, that's good for the economy, isn't it? It's good for me; it's good for the economy." STEPHEN LEEB, INVESTMENT ANALYST: Well, Ali, that's exactly the point. I mean, we're all in this together. And you know, it doesn't really pay to think vindictively.
I mean, yes, a lot of people did things that were silly. And reasons that they did things that were silly ranged from being talked into it by unscrupulous sellers of these mortgages, to any number of other reasons.
But I think these people have paid a tremendous price. You know, how would you like to sit around day after day for a couple of years, wondering whether or not you're going to be able to buy food? To me, that's enough of a price.
But even more telling, is that we are all in the same soup. And it's a very complicated soup. And in order to help this economy recover some of those lost -- some of its lost wealth and get us on a stronger footing, we are going to have to try and help the people that most need help. Even if you want to argue, well, they could have avoided it in the first place. I mean, that's just a non sequitur; has nothing to do with it.
VELSHI: Christine, let me ask you this.
LEEB: We're all in this together. I mean...
VELSHI: There are -- there are two issues here that we need to confront. One is the government says we're not going to impose any new taxes as a result of this, but it is using money from TARP, the bailout, which is money that was all ours in the first place.
And the second issue is the effectiveness. We have tried this. It's been a year since the government first introduced its "making home affordable" program. And we've learned that it has not helped as many people. So is this effective and what does it cost us?
ROMANS: We haven't got this right yet. Here's the thing. It's a disaster out there for the people who are -- who are facing foreclosure, people who are underwater. It is an utter disaster. They haven't gotten this right yet. A hundred seventy-thousand people have had permanent modifications.
One thing that we're watching is, even if you get people in a program and start to help them out, Ali, 30, 60, 90 days down the road they fall behind again. That's because you're trying to keep some people in homes that they are never, ever going to be able to afford.
It is taxpayer money. It is TARP money, bank bailout money. But that's your money and my money to begin with. That is -- that is taxpayer money. So make no mistake: this is taxpayers trying to find a way out of this solution. So we are all exposed. This story is about everybody.
I want to bring in one more avatar, Ali, and that's -- you had Responsible Roger. I've been hearing from a lot of retired Responsible Rogers who bought their home 20 years ago, who have also suffered from a decline in their home value, but they're not underwater because maybe they've paid off their house.
Well, they want to know, "Well -- well, you know, I'd like something, too. You know, why is it that taxpayer money is going to be going to help people who are -- who maybe bought at the peak or who are leveraged to the hit? Maybe I should get some of that to compensate me for the decline in home value."
So everybody is looking around at, quote, unquote, "free government money" and wondering how it's going to affect them. So it is actually tearing neighborhoods apart in some cases where, you know, some people are fighting to keep the homes. Some people are walking away and some people are saying it's not fair.
VELSHI: All right. I'm looking for some money, too. So I've got to take a commercial break. But I want to just ask Kelly (ph), stay there. All three of you stay here, because I want to have this discussion between Peter and Stephen.
Do we have that Facebook comment that we have up there? Can I just show that before I go out to the commercial? And I want to discuss it when we come back. This is one of the comments I've asked people for on Facebook. We're going to bring it up for you. Here we go. All right.
This comment is from Scott. He says, "I have made my payments on time for the past ten years. I have my own business. I pay tons of taxes. Now with the health-care reform, I have to pay more and provide health insurance or get fined." Scott continues to say, "I hate to say it, but the only people hurting are the ones still trying. I should just give up and let everyone else take care of me."
I want to hear Stephen Leeb's response to that as soon as we come back from this commercial. Stay with us.
(COMMERCIAL BREAK)
VELSHI: Again, breaking down the latest attempt by Washington to break the vicious cycle of home foreclosures and declining property values. Let's be joined by our real-life friends, not just our avatars. Christine Romans, my -- my co-anchor on "YOUR $$$$$"; Peter Morici, the professor of international business at the University of Maryland; and Stephen Leeb, an investment analyst, the editor of "The Complete Investor" newsletter and an economist.
Stephen, you heard just before we went to the break this issue. It's two issues. We call it moral hazard, the idea that you're rewarding somebody for behavior that might have been irresponsible. But Scott, who was writing in to Facebook, wasn't even talking about that. He was talking about the fact that there appears to be no reward for doing the right thing, for not buying more house than you could have afforded. And I know you say it's a non sequitur and it's passed, but how do we answer that politically?
LEEB: Well, I think you -- people have to point out to Scott, again, Ali, that, yes, it is unfair. And I certainly sympathize with Scott. And it's unfair to, you know, a lot of people that are doing reasonably well in this economy.
But there's never been, at least in post-Depression history, we've never had an economy in which there are more people doing absolutely terribly.
And the point I would make to Scott, if I were a politician, I would drum into Scott's -- into all the Scotts, I would really make it clear to them, that if you lift this economy up -- I mean, we're really just sort of pedaling along bottom right now. But if you lift this economy up, Scott as a businessman is going to benefit.
And unfortunately, I mean, you can't lift the economy up by giving, you know, someone who's making $100 million, $200 million. But you can lift the economy up by giving people that are destitute the wherewithal to buy food, buy goods, et cetera. And if you do that for enough people, Scott will, in the end, be a winner. He just has to be a little bit more patient. And you know, realize that we don't live on separate islands in this world. We live together. And I think what we're doing now will make all of us safe together.
It's not going to do Scott any good if we had a financial crisis that, you know, in which we bought the ranch, the entire economy just collapsed onto itself.
VELSHI: Peter, what do you think of that? Because it does sound like a reasoned argument that we -- we're all going to do better if the economy does better.
MORICI: Well, I disagree on two points. First of all, the people that are going to be helped are not destitute. They're making their mortgage payments, but they find it uncomfortable, because they borrowed too much in the past. They're not going hungry.
The second thing is that previous programs have failed -- failed to help more than a couple of hundred thousand people. We have an overhang of millions of homes that are underwater. We have too many homes that have been built and so forth. We just have a glut on the market.
And so this program is not going to lift the price of housing. It's not going to save the housing market. It's arbitrarily going to take some people and reward them for being very poor spenders, very poor savers.
The lesson of all of this is, if you work hard, pay your bills and save your money, you're a loser with this president, because he's not taking care of them. Responsible Roger is correct to be angry.
VELSHI: Christine, what do you think?
LEEB: Well, Peter, would you just round up all these people and put them in jail? I mean, come on.
MORICI: I didn't say that. You keep creating false arguments. They're neither destitute nor do I want them to go to debtors' prison.
LEEB: Well, of course they're destitute, Peter. When you have a country....
MORICI: Let them make their payments.
LEEB: When you have a country -- Peter, when you have a country in which...
MORICI: You're not talking about helping the destitute.
LEEB: ... the median family income is about $40,000, how do you send your kids to college?
ROMANS: OK. I want to make a point.
VELSHI: Let's let Christine talk for a second.
ROMANS: Stephen, hold on. I want to make a point here. Every situation is different. So you can't make generalizations, first of all, because you've got 7 million people, 6 or 7 million people who aren't paying their bills right now.
Some of these people are just losers. Some of these people have really lost out by the economy. Some of these people made -- had a perfectly fine loan, and we know the fastest rate of defaults right now are people who have prime credit histories. These are people who did nothing wrong for many, many years, paid their bills on time, and now they're defaulting because of a job loss, a job loss that's caused by the economy overall.
So we can't make generalizations.
But one thing that I can say about how -- how scary this is for policymakers and for the banks and for homeowners and consumer advocates who are trying to help people and financial counselors. More people are getting a foreclosure notice in the mail than are buying their first home. And that means there's something wrong in America with the housing market. That means the American dream has become the American nightmare. And it's imperative that they figure out what to do.
Everyone disagrees about how to do it. Some people say we're just tinkering around the edges, we're rewarding people for bad behavior. But I think we can agree here that this is something that stuck with us. We're talking about recovery in the economy. But it's 2010, maybe 2011, and we still have a major foreclosure issue that we have not figured out how to handle and even philosophically how to handle it.
I mean, Ali, should we just let the whole thing blow up and start all over? I mean, remember, it was government intervention, many people argue, that helped drive so many people into homes, and now it's government intervention trying to keep them in their homes.
VELSHI: Right. Well, let me approach that with...
ROMANS: How are we going to handle it? VELSHI: Peter, give me the 30-second view on this, because I know we could do an hour on this. But what's the 30-second view on what degree of government intervention is necessary to help out this housing market? Absolutely none? Or should something be done to help stabilize this housing market and stop some of those foreclosures?
MORICI: I think we should do what we did during the Savings & Loan crisis and use the TARP as intended to create a resolution trust corporation which would basically work out the paper on the books of the banks, put it all in one place. It would be possible to work out many more mortgages that way than with this scattershot approach.
The basic problem here is these programs working for the banks indirectly don't work.
VELSHI: All right. Gentlemen, and Christine, thank you very much. It's always a passionate discussion. I'm glad you brought everything to it, because this is exactly the discussion that's taking place in America right now. Some people think this is great. This is the cavalry coming to the rescue. Others think it's the wrong thing to do.
Stephen Leeb, always a pleasure to talk to you. Stephen Leeb, an investment analyst and an economist.
Peter Morici, a business professor at the University of Maryland and an economist.
And my co-host on "YOUR $$$$$," Christine Romans. If you want to see more of this discussion, tune into Christine and me Saturdays at 1 p.m. Eastern and Sundays at 3 p.m. Eastern. We'll be getting more into this discussion this weekend.
All right. Covering a few top stories for you here at CNN.
In Washington a major agreement to slash the number of nuclear weapons in the United States and Russia. The strategic arms reduction treaty builds on another one that expired in December. It requires the U.S. and Russia to get rid of about a third of their nukes. President Obama and Russian President Medvedev will sign it on April the 8th.
In Richmond, Virginia, police say the bullet shot into the campaign office of House Minority Whip Eric Cantor was random gunfire. There was some speculation that this was related to the threats that several lawmakers have received over health-care reform. Cantor already said he received threatening messages. No one was hurt at his office.
And across the country, 27 states are reporting a rise in unemployment rates in February. While that might not sound great, it is down from 30 states the month before.
All right. We're going to take a break. When we come back, I am going to hear from Elizabeth Cohen. I've been using some of those avatars that were really her invention. But she's actually bringing them back for the purpose for which they were invented.
You've heard the broad strokes. We are getting into specifics about health-care reform and how it affects you, now that it's a done deal. And the avatars are back. Come back and join us in a minute.
(COMMERCIAL BREAK)
VELSHI: OK. Normally in this business in the commercial break I go to the next person I'm talking to. I go to the next place and I get some sort of a head start before we come out of a commercial. I deliberately didn't come here, because Elizabeth Cohen is here and I'm not quite sure whether she's mad at me or not. Because I don't know if you saw. I used your -- I took the whole avatar concept to describe the mortgage business.
ELIZABETH COHEN, CNN CORRESPONDENT: I'm honored.
VELSHI: OK. Good. As long as you take it as flattery; that's what meant. Because I love the avatars, as you know. And again, we are doing this every day because you have been asking us at CNN about how health care affects you.
So you've got some more avatars about how health-care reform is affecting people.
COHEN: That's right. We've got a couple more people here.
Let's take a look at Infertile Irene. She's unhappy because she is having trouble conceiving. Now, she's both happy and unhappy about health-care reform. She's happy, because she has a pre-existing condition...
VELSHI: Right.
COHEN: ... which is her infertility.
VELSHI: OK.
COHEN: And now health insurance companies can't say no to her or charge her ridiculous amounts.
She's unhappy because insurance companies won't have to cover her infertility. They will have to cover her if she gets cancer or heart disease or whatever. But infertility is not in the long list of things that insurance companies will have to cover.
VELSHI: So they can't deny her insurance for health care generally, because of her pre-existing condition, but they don't have to cover the infertility that she was suffering from before she gets insurance?
COHEN: Right, exactly. They have to cover all sorts of other preexisting conditions, all sorts of other things but not that.
VELSHI: Right. How interesting. OK. That's why this is useful because we don't know about things like that. COHEN: Right, exactly.
VELSHI: You've also got Part-Time Patrick.
COHEN: We do. We have Part-Time Patrick. Let's take a look at him.
VELSHI: He does not look happy either.
COHEN: No, because he's at a -- works at a restaurant that serves only water.
VELSHI: Right.
COHEN: So that might be part of the problem here.
But Part-Time Patrick is unhappy, because he is only working part time, and employers do not have to give him health insurance.
VELSHI: Right.
COHEN: There is no employer requirement there. So I'm going to write down "no coverage," because if he were full time and working for a sizable company...
VELSHI: Right..
COHEN: ... they would, but he's part time.
VELSHI: But under the system of insurance exchanges, in theory, he might be able to buy insurance for himself at a better rate than he could today, for instance?
COHEN: Well, not necessarily a better rate, because he will get subsidies starting in 2014.
VELSHI: Right.
COHEN: So in 2014 he'll get some money.
VELSHI: I see. I see, OK.
COHEN: Yes. There's money coming to him.
VELSHI: It would be better -- it would be less money that he puts out, but it's not that the insurance is necessarily at a better rate.
COHEN: Right. In 2014...
VELSHI: OK.
COHEN: ... he's going to get some money from the government...
VELSHI: Right.
COHEN: ... that will help him buy insurance.
VELSHI: But for now, he's...
COHEN: From now until 2014 he's just going to have to dig deep and find that money.
VELSHI: Or hope he gets full-time work.
COHEN: There you go. Maybe they'll start serving something other than water. And then...
VELSHI: Well, let's -- hopefully. Well, that's part of the economy. Right?
COHEN: Right, exactly. There you go.
VELSHI: He wants that tray to be full of stuff.
COHEN: That's right.
VELSHI: And then he gets more hours every week. OK, very interesting. Part-Time Patrick.
Stay with us. We're going to take a quick break. We're going to come back and talk about some more people and how they are affected by health-care reform with Elizabeth Cohen. Stay with us.
(COMMERCIAL BREAK)
VELSHI: I promised to you here is that we break down the issues that are important to you. And Elizabeth Cohen is like getting a Christmas gift every day because that what she's doing, she's making this very understandable to specific people with specific circumstances.
Gary and Gabe?
COHEN: Gary and Gabe are partners, and I don't mean business partners. They have been a couple for many, many years now. Fill in that heart. Here's the deal.
VELSHI: I got -- sort of clear to say, opposites attract.
COHEN: I think so. They don't look like a very likely couple.
VELSHI: Not meaning to editorialize or anything.
COHEN: They do look like an unlikely couple.
But Gabe has been getting his benefits from Gary's job. Gary has a job and Gabe doesn't, so he gets his benefits from him. But here's the catch -- for forever, basically, Gary has to pay $1,000 in taxes because those benefits that his partner is getting are treated like income.
VELSHI: OK. COHEN: Now, that's not the case. Like my husband gets benefits through me but I don't have to pay taxes on that, it's just a benefit that I get for working here. And there was some hope that health care reform would change that and get rid of that tax, but didn't happen.
VELSHI: So they are going to continue to have to pay that. So things don't change fundamentally for them. They're still going to have to -- and Gabe is going to have to watch that little paunch that's there. Because I know from what Elizabeth tells me, you've got to exercise and eat vegetables.
I do, again, I'm very suspicious about who does your artwork. If I don't watch out that could be me a little bit.
COHEN: Already is a little bit.
VELSHI: Is it a little bit me, right exactly.
All right, Elizabeth is going to keep on doing this. Please keep sending us your questions about these things, because every one of these specific circumstances allow us to understand a little better who gets coverage and what changes.
All right, listen, when you do have, if you do have other questions, Dr. Sanjay Gupta tomorrow morning is going to be taking your calls live, 7:30 a.m. Eastern time on a special edition of "SANJAY GUPTA MD." You'll want to tune for that.
(COMMERCIAL BREAK)
VELSHI: Gold is at one of the highest levels it's ever been at. Need cash? Put your gold into an envelope and sent it to -- you've probably heard some kind of an ad like that. That's got some people a little worried about what exactly they're supposed to do with their gold and whether or not they should be selling it by sending it to someone they don't know anything about.
Let's check in with Poppy Harlow from CNNMoney.com. She's been looking very carefully into this story. It can be very attractive at times when people are short of money to put it into some kind of a pouch and send it off and get a check in return.
POPPY HARLOW, CNNMONEY.COM: It can, especially if you're the pitchman, Ali. You did a good job there enticing people.
But, yes, a few months ago we hit the streets trying to sell our gold jewelry in different stores. And what we saw is it's really easy to get ripped off. But a lot of people are mailing in their gold. You've all seen those commercials. And some say, hey, it's a great opportunity. Others say, take a look at this more carefully first because it's really not necessarily a quick financial fix.
Take a look at what we found out.
(BEGIN VIDEOTAPE)
MC HAMMER, CASH4GOLD SPOKESMAN: I can get cash for this gold medallion of me wearing a gold medal.
HARLOW (voice-over): Their ads are pervasive but some Cash4Gold customers say they are getting a raw deal.
FRANK POINDEXTER, CASH4GOLD CUSTOMER: They slap you in the face with an absurd amount.
REP. ANTHONY WEINER (D), NEW YORK: A golden opportunity to be fleeced.
HARLOW (on camera): You know, there are just a lot of people selling their gold right now. And there are some people that say they're getting ripped off. There's actually a class action lawsuit against Cash4Gold right now. And they invited us down to their headquarters here in Florida, so we came and we can't show you the outside of the building for security reasons, but we really wanted to come in and see exactly what was going on.
UNIDENTIFIED FEMALE: I'll make sure that everything is here is what I received.
HARLOW (voice-over): The gold is tested --
UNIDENTIFIED FEMALE: We just simply just scratch lightly.
HARLOW: -- appraised --
UNIDENTIFIED MALE: We add it up.
HARLOW: -- and an offer is made and customers have 12 days to decide whether or not to accept it.
UNIDENTIFIED MALE: That will get 1800 degrees inside.
HARLOW: If they do, their gold is melted down.
UNIDENTIFIED MALE: We melt constantly.
HARLOW: But "Consumer Reports" finds mail-in companies, including Cash4Gold, sometimes pay out as little as 11 percent of the gold's value.
(on camera): I think some concerns are, whether they're valid or not, that maybe more gold is getting processed here that someone sent in than they are getting paid for.
JEFF ARONSON, CEO, CASH4GOLD: I know exactly what comes in is weighed up, is -- a value is assigned to it right from the computer. My people don't make more money off of it.
HARLOW (voice-over): Cash4Gold says it pays 20 percent to 80 percent of the gold's value, but that's not what Frank Poindexter claims he got.
POINDEXTER: About a week and a half, I think, after I sent the package off to them with the gold in it, I received a check. HARLOW (on camera): How much for? How much was the check for?
POINDEXTER: I was astounded. It was for 15 cents.
HARLOW: Fifteen cents.
POINDEXTER: Fifteen cents.
HARLOW (voice-over): Fifteen cents for what he says was more than a dozen pieces of gold, appraised at roughly 200 bucks. But Cash4Gold's internal documentation says just this single gold earring was in Frank's packet.
(on camera): Are you saying he lied to you?
ARONSON: I'm just telling you the facts.
HARLOW (voice-over): In the end, Cash4Gold settled with Frank for $150.
(on camera): And you know, Frank Poindexter is not alone. He's joining that lawsuit against Cash4Gold which alleges among other things that the company sometimes melts down the gold before the 12- day return period has ended and sometimes blames the post office for losing items in the mail.
ARONSON: The class action is -- is meritless. There are three main complainants on the class action suit, three.
HARLOW (voice-over): After numerous complaints about several companies, New York democrat Anthony Weiner introduced the Gold Act, pushing for more stringent regulation of the industry on a national scale.
WEINER: Basically, when you put that gold in that envelope you're sending it off to the wild west.
(END VIDEOTAPE)
HARLOW: All right. And, Ali, if that Gold Act becomes law, what it would require is that consumers accept any offer before their gold is melted down. Companies would be fined if they don't comply. It would also make sure that companies insure any jewelry they send back to consumers for the same value it was insured at when they sent it in.
But, Ali, this is a big problem. You see stricter regulations in Florida, but not nationwide right now, Ali.
VELSHI: Very interesting story. Poppy, thanks for joining us for this. And listen, Poppy can be seen on CNNMoney.com. She's an anchor there and she's got some great stories like this.
Thanks, Poppy. Good to see you.
All right, what do these things have in? Condoms, bricks, violence, shredded American flags? That wasn't a slip of the tongue, I meant to say condom, because all of these things have been sent to lawmakers in protest of health care reform. We're going to talk about civility, a conversation that affects us all when we come back.
(COMMERCIAL BREAK)
VELSHI: Check out some top stories for you this hour.
Some help for homeowners who are under water. The Obama administration has announced some new initiatives including refinancing millions of mortgages into government-backed loans with lower monthly payments and temporarily reducing mortgage payments for those who have lost their jobs.
In Washington, a major agreement to slash the number of nuclear weapons in the United States and Russia. The Strategic Arms Reduction Treaty builds on another one that expired in December. It requires the U.S. and Russia to get rid of a third of their nukes. President Obama and Russian President Medvedev will sign it on April 8th.
And tense times in Seoul. South Korean officials are calling an emergency cabinet session today. One of their Navy ships sank near the disputed maritime border with North Korea. It's not clear why, but North Korea recently warned it's boosting the military defenses in the area. We're following that story closely and we will take a look at that. We will bring you any news that we have.
All right, we've been talking about political incivility or civility over the last few days. Let me just tell you, if you haven't been following very closely, some of the things that have been going on. Obviously, threats sent to various lawmakers. We had seen a gas line cut at a home that was believed to be congressman's home; it wasn't actually his home. We've seen bricks. A brick thrown through one office of a congressman. We've talked about a coffin that was placed on a lawmaker's lawn. Can you believe that? A coffin.
And here's one I told you about this before the break. An unwrapped condom was sent to the office of a democratic representative with a phrase attached to it that we can't talk about here on CNN. A shredded American flag was sent to a lawmaker doused in gasoline.
And one of the scariest incidents involved the number two republican in the House of Representatives, Eric Cantor. Yesterday, he told reporters that he was receiving threatening messages and that a bullet was shot through a window in his campaign office in Virginia. Authorities came out today and preliminarily quoted -- called it a, quote, "case of random gunfire."
Richmond police say the bullet was fired in the air and struck the window in a downward direction landing on the floor a foot from the window. The round struck with enough force to break the window pane, but didn't penetrate the window blind. So again, we don't know whether it was directed at Eric Cantor's office or whether it was random gunfire. Hard to know, there's are a lot of facts here that are not clear.
I want to bring in Mark Skoda, he is with the Memphis Tea Party. He's been on our show a number of times, you've seen him on CNN.
Mark, thank you for being with us.
MARK SKODA, FOUNDER, MEMPHIS TEA PARTY: Ali, thanks for having me on the show today again.
VELSHI: Mark, you and I have talked a lot on TV. We're going to talk as friends here.
This is ridiculous. I think you have to agree.
SKODA: We've actually stated that.
I mean, first of all, let me say this. A lot of these commentaries that are going on with respect to all these incidents want to lay the blame at the foot of the Tea Party. With all due respect, there is not any proof of that, first of all.
Secondly, we absolutely reject this kind of behavior. I mean, we've made press releases with respect to this action. We've indicated we do not support any kind of violence or violent acts.
And clearly, in any kind of action where we've had this health care bill jammed down the throats of the people of the United States, unfortunately that anger is spilling over into these kind of events. And so it's not clear to me that any of this has to do with the Tea Party. And in particular, we haven't had any evidence it does.
VELSHI: Well, here's just a statement from the press release that you're referring to. I want to read this to you.
"The Tea Party movement is a peaceful movement. We denounce all forms of violence, this includes racial attacks. We do not condone, accept or encourage such behavior and fully understand that while no evidence of such behavior has been offered we believe it is important to condemn it nonetheless."
And, Mark, I congratulate you for that. I have been to Tea Party rallies where you have got some people there, you and I have discussed this in the past --
SKODA: Right.
VELSHI: -- who it might be in instances like this better to have been disassociated with. We've seen pictures of President Obama in a coffin. We've seen pictures of the president with a bone through his nose and a loincloth. We have seen signs that do seem on the fringes to attract violent or extremist behavior.
What do you have to do to sort of say this isn't who we are?
SKODA: Well, I think it starts by really having a dialogue. I think, first of all, the press has frankly amped this up. Congress has amped this up. What is truly regrettable is a use of race as a fundamental issue that is trying to separate the Tea Party movement from a, what I'll call, reasoned dialogue. And I think, Ali, the leaders I speak to and the people I've been associated with clearly reject any kind of behavior that borders on these kinds of threats and these kinds of actions. So that's first and foremost a key element.
I will tell you that people are concerned about this nation. We are going to have a revolution, but it will be at the ballot box. And I think relative to disassociating people and ostracizing those who would perhaps use the Tea Part movement and their association with the Tea Part movement to make such actions evident would be clearly in no one's interest.
And I will tell you this much, there are people on our side who clearly will disassociate themselves, begin to try to tone down the rhetoric. But we also ask the left to do the same, because we recognize a lot of that has come from the democrats and, in fact --
VELSHI: Well, here's a perfect point for us to leave it at. We're going to come back in a second, so I want to stay there because I want to take this away from the Tea Party and I want to talk about civility in politics and how we get this dialogue going in a way that makes a lot of sense.
Mark Skoda with the Memphis Tea Party. We're going to take a break and we're going to have this conversation on the other side about civility.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP, "ANIMAL HOUSE")
STEVEN BISHOP, SINGER/SONGWRITER (singing): I gave my love a cherry that had no stone. I gave my love a chicken that had no bones. I gave my love a story that had no end. I gave --
JOHN BELUSHI, "JOHN 'BLUTO' BLUTARSKY: Sorry.
(END VIDEO CLIP)
VELSHI: All right, some of you will be old enough to remember "Animal House" John "Bluto" Blutarsky not being all that civil.
I got Mark Skoda with me from the Memphis Tea Party, we're having a conversation about civility and the tone we've seeing in Washington, the threats, the violence that we've heard accusations of, the things that have been sent to people and thrown through their windows.
Mark, you know, a great discussion ensued here at CNN this morning about who really fuels these people who do these kinds of things. Is it media? Is it frustration? Is it -- what is it? What do you think fuels these people to do things like that? Because that's not part of the dialogue, it's not part of the dialogue of reformers like yourself, it's not part of the dialogue that want to change the way things were done.
SKODA: Well, you know, I grew up during the Vietnam War and the protestations that occurred there. I think we look -- there are times in history, whether it's Vietnam, whether it was the 2000 election of President George Bush versus Al Gore, I think when we look at the Iraq War, I think there are times in the history of our nation when people get very excited, very animated about issues.
I think today we have the culmination of not only the problems with jobs and the economy itself, which breeds a lot of fear and, frankly, a lot of concern with what I think people believe their government not listening to them. I think we saw that in terms of even this health care legislation. We can be vociferous and anxious about legislation, about issues, and that's what we'd prefer to be attacking, not individuals and not people.
VELSHI: But this is the beauty of this country and a movement like yours, that it can start, and you can go to the ballot box and you can vote people out. I mean, don't we as Americans realize that that can happen? Why would there be a need to resort to violence, because no matter how powerless you feel, you go to the ballot box. We don't do that as much as we should, do we?
SKODA: Indeed, and I think, you know, this is something I cover all the time in our group and particularly on my radio show is that, look, if you cannot perform the basic civic duty of voting, then please don't get anxious about the rest of the outcomes.
And I think to your point, look, there are always going to be fringe people that take advantage of movements who perhaps use this to their own means o15 minutes of fame. I think, frankly, it is cowardly when people take the actions anonymously. I think the government should expose the people and if they're part of a particular group or if they are part of a particular Tea Party, we'll be the first to ostracize and support prosecution of these people.
However, I also think that the means for politicians sometimes to use this to besmirch an entire movement like the Tea Party movement is completely inappropriate. Using the race card, frankly -- and I was there on Saturday where people walked through the crowd and the Congressional Black Caucus who marched while they were taking videos of their actions, hoping, I believe, for some activity that would have besmirched the actual rally is also part of the problem.
And then, add on top of the 24x7 news cycle which arguably gives us chances to have these kinds of conversations of civility, but also amps up, if you will, the actions of some of the outliers.
VELSHI: Mark, always a pleasure to talk to you. Thank you for being with us and we appreciate your group's condemnation of these kinds of actions.
Mark Skoda is with the Memphis Tea Party, joining to us talk about political civility.
All right, coming up, take a listen to this --
(BEGIN VIDEO CLIP)
PHIL BLACK, CNN CORRESPONDENT: Right, Kandahar, we traveled here from Kabul because this is now the part of Afghanistan that everyone is talking about.
(END VIDEO CLIP)
VELSHI: And we'll be talking about it, too, Michael Holmes and "BackStory" up next.
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VELSHI: I love "BackStory."
There's a brand new CNN/Opinion Research poll out today on Afghanistan. It seems that Americans are feeling more optimistic about the military campaign there, now we need to hear from Afghans and the folks on the ground.
CNNI's Michael Holmes is heading there in about two weeks, you were just telling me, to swap out with one of our other correspondents. Michael is here now with a "BackStory" on Afghanistan.
MICHAEL HOLMES, CNN INTERNATIONAL CORRESPONDENT: That's right. Our other correspondent who is in there right now -- in fact, Chris Lawrence is there at the moment and Phil Black just came out. When Phil was there, he actually did a road trip down to Kandahar. Which, as you know, we just did Helmand Province and Marjah, Kandahar is going to be the next focus of the campaign there, the NATO and the U.S. campaign. It's sort of the spiritual home of the Taliban if you like.
VELSHI: Right.
HOLMES: It's been known that way.
Phil went down there, hit the streets, did not embed, which is unusual these days. Went out there, deemed that it was OK to go down and have a look on the streets, which is always a bit risky in a place like Kandahar.
VELSHI: Sure.
HOLMES: But off he went with the crew. Did a great story down there, but he also, as he always does, did the "BackStory" as well of how they operated there.
Here it is.
(BEGIN VIDEOTAPE)
PHIL BLACK, CNN CORRESPONDENT: Right, Kandahar, we traveled here from Kabul because this is now the part of Afghanistan that everyone is talking about. The American's international forces have said Kandahar is next. They're going to clear this place next, it's going to be their next offensive. The Taliban have already responded with a big, coordinated bomb strike in this city that killed 35 people just the other day. So, we've come here just to get a sense of what it's actually like here on the ground. This is Kandahar hospital, we've come to talk to some of the people who were injured in last Saturday's explosion. We just heard that a police unit was struck by an IED just this morning.
(voice-over): "He's over there, and he is dead," this man cries. His son was a police officer whose unit had already found and disabled four roadside bombs that day; the fifth detonated.
(on camera): Yes. Kandahar -- it's all right, go.
Kandahar can be a dangerous place to work, so we are taking precautions. We've got a security team. We're mixing up our routine. We never stay in one place for very long. The whole idea is to keep a low profile. It's why we're dressed like locals. We haven't shaved for a few days. And it generally works. You can generally move around and not get noticed too much, until you take out the big, shiny camera, and then that attracts a little bit of a crowd.
It's probably time to go.
We just spoke to this U.S. military patrol. They're initially a little bit nervous when they saw us dressed like this with a big camera. We explained that we were CNN, and things got cool pretty quickly after that. But they gave us some interesting insight to the security situation here on the ground.
Can I get your full name, mate?
SGT. AARON THOMAS, U.S. ARMY: Aaron Thomas.
BLACK: And title, rank?
THOMAS: Sergeant.
BLACK: How would you describe the mood in Kandahar right now?
THOMAS: The mood in Kandahar right now, it's kind of -- it's kind of weird cause you can tell their mad. It's getting hot. It's getting real hot right now.
BLACK: Yes, I think that kid's about 5 years old. Not more than that.
He's having a very good time. There's nothing -- our guys keep saying this is Kandahar.
Remember I said we hadn't shaved for a while. Well, I want you to rate who's got the best beard.
This is after a few days. This is what I got. Take a look. Check out Dave's fluff.
Get sideways, that shot.
You, too.
(END VIDEOTAPE)
VELSHI: Wow. That kid driving the car.
HOLMES: That's amazing, isn't it? You see the most amazing things.
The last time I was there, too, we went out and we pulled up at the money exchange. This kid came out to the side of the car, must have been 8 years old, held up a baseball-sized, wrapped in plastic lump of hashish and said, "Mister, Mister, $10." I'm like, "Are you kidding me?"
VELSHI: As a business guy, I'm not really going to comment on whether or not it was a deal.
HOLMES: Unbelievable.
VELSHI: Wow.
HOLMES: That's Afghanistan for you. It's pretty crazy. It was a great report by Phil. It's a hard place to report from.
VELSHI: And you're going in a couple weeks.
HOLMES: A couple weeks. Hoping to get down there, too.
VELSHI: All right. Well, we're going to hear from you. You will do a "BackStory."
HOLMES: I better, or I'll be in trouble.
VELSHI: All right.
If you want to see more of Michael and the BackStory team, check out CNN.com/BackStory.
