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American Morning
Goldman Sachs Grilled by Congress; New Rules Limit Time on Grounded Planes; White House Goes to Main Street; Cost of a Heart Attack in Different States Uncovered; Fighting Oil with Fire; Wall Street Reform; State of the Air
Aired April 28, 2010 - 07:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
JOHN ROBERTS, CNN ANCHOR: Crossing the top of the hour now. It's 7:00 on the East Coast on this Wednesday, the 28th of April. Thanks so much for joining us on the Most News in the Morning. I'm John Roberts.
KIRAN CHETRY, CNN ANCHOR: I'm Kiran Chetry. Glad you're with us. Here are the big stories we'll be telling you about in the next 15 minutes.
First, it got pretty ugly yesterday in a rare show of unity on Capitol Hill. Both sides taking shots at Goldman Sachs executives who insisted they did nothing wrong in the economic meltdown and nothing to ruin so many lives.
ROBERTS: Tense moments aboard a jet liner. Air marshalls scramble as the flight from Paris to Atlanta is diverted to Maine, and this morning, we're learning more about the man who allegedly said he had a fake passport and explosives onboard that aircraft.
CHETRY: And have you ever found yourselves stuck on a grounded cramped airplane, maybe for hours on end (ph) with no food, no water and no access to a working bathroom? Now, the government is about to lay down the law own airlines. Find out why they say it could have unintended consequences.
Also, the AMFix blog is up and running. Join the live conversation, CNN.com/AMFix. We'll be reading some of your e-mails throughout the show.
ROBERTS: But first, deny, deny, deny. In front of millions of Americans who think they are so smug, Goldman Sachs executives did little to help their cause on Capitol Hill.
Senators spent seven hours piling on, in very colorful fashion from time to time, accusing them of essentially bundling up garbage loans, or another word they used, tied to the housing crisis and telling investors they are awesome.
That was the trigger that caused the financial meltdown, and lawmakers got nowhere, but they did get their shots in.
(BEGIN VIDEO CLIP) SEN. CARL LEVIN, (D) MICHIGAN, CHAIRMAN, SUBCOMMITTEE ON INVESTIGATIONS: June 22 is the date of this e-mail. "Boy, that timber wolf was one (EXPLETIVE DELETED) deal. How much of that (EXPLETIVE DELEBTED) deal did you sell to your clients after June 22, 2007?
UNIDENTIFIED MALE: Mr. Chairman, I don't know the answer to that, but the price would have reflected levels that they wanted to invest.
LEVIN: But they don't know -- you didn't tell them it was a (EXPLETIVIE DELETED) deal.
UNIDENTIFIED MALE: I didn't say that.
LEVIN: No. Who did? Your people internally. You knew it was a (EXPLETIVE DELETED) deal, and that's what your e-mails show.
(END VIDEO CLIP)
ROBERTS: So how did trader Fabrice Tourre fare? You may know him better as "the Fabulous Fab" the name he gave himself in a now infamous email that the SEC sited in the fraud charge against Goldman Sachs.
(BEGIN VIDEO CLIP)
SEN. TOM COBURN, (R) OKLAHOMA: How did it make you feel when they were released publicly?
FABRICE TOURRE, VICE PRESIDENT, GOLDMAN SACHS: You know, as I will, you know, repeat again, Dr. Coburn, I regret these e-mails. They reflect very bad on the firm and on myself. And, you know, I think, you know, I wish I hadn't sent those.
(END VIDEO CLIP)
CHETRY: He wishes he hadn't sent them. Christine Romans is live for in Washington this morning. She got a chance to sit down with Goldman's top CEO Lloyd Blankfein after the hearing.
I just want to quickly ask about Fabrice Tourre. Some of that was probably the most quoted and, at least it seemed, the more electric, where he called himself "fabulous" and joked about selling to widows and orphans at the airport. How did that end with his testimony yesterday?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: He was the part of a five-hour panel of four other people from that mortgage desk. And Carl Levin circled around at the end of the panel and started to hammer him again, saying you stood here and said you were creating Monstrosities according to your own emails that even you didn't fully understand the implications of. Won't you accept responsibility for that?
He said, no, I believe my conduct was proper, even as Carl Levin got him to admit some things he wrote he didn't mean to write or were not true.
So there was a lot of hammering as the "Fabulous Fab" as he's known, Tourre, and it pained him that the e-mails had been released, of course.
And then after the hearing I got a chance to talk with Lloyd Blankfein, which is really rare. This is somebody who we have, I have for more than a year sought to try to talk to about all of the allegations against Goldman Sachs.
And the view from Goldman has always been it's not our style to have Lloyd Blankfein talk to the media. We speak through our clients and results speak for themselves. Now he is talking to the media after ten hours of talking to Congress.
And during that Senate hearing, he was very adamant they didn't do anything wrong. And so I asked him, if you didn't do anything wrong, what needs to change? Why are we here?
(BEGIN VIDEO CLIP)
ROMANS: What will you do to be different? Do you need to be regulated better or more? What were the mistakes?
LLOYD BLANKFEIN, CEO, GOLDMAN SACHS: I think on the mistakes, we were part of a system that introduced too much credit and too loose credit and -- which served to create and build up the bubble. And we played a role in that.
We financed companies that were perhaps a little bit too leveraged, and we did real estate transactions that may have been too leveraged, and that played a role in creating the bubble, which ultimately broke, and the consequences of the last two years bear that out.
(END VIDEO CLIP)
ROMANS: So it's an interesting point, Kiran, that he's accepting responsibility for being part of a system that was part of a bubble, but he's not accepting responsibility for any of the specific charges, the SEC charges against him, of creating financial monsters and monstrosities that actually created risk and created problems in the economy.
So on one hand, saying, yes, we bear burden and we have a credibility gap, and on the other hand to Congress saying we didn't do anything wrong.
CHETRY: I wonder how the American public feels about that after watching that whole entire spectacle unfold. Christine, we'll also have more of your interview with Lloyd Blankfein coming up later in the newscast. Thanks.
ROBERTS: New details this morning about the man detained after making what are described as "alarming statements" onboard a trans- Atlantic flight. The jet on its way to Atlanta from Paris was forced to land in Bangor, Maine.
According to federal officials, Derrick Stansbury, who served in the U.S. Air Force, claimed to have explosives and a false passport with him. He was detained by federal air marshals. No explosives were found and passengers say the crew was calm and professional.
(BEGIN VIDEO CLIP)
CHARDE HOUSTON, ON DIVERTED DELTA FLIGHT: Nervous, yes, of course, especially when the pilot comes on and tells you the plane has to divert. So that's definitely something to wonder about. But ultimately I felt like they handled it very, very good. They didn't make everybody rattled. They could have but they didn't.
UNIDENTIFIED FEMALE: The stewardesses and the attendants did a great job. I'm glad to be back on the ground.
(END VIDEO CLIP)
ROBERTS: So far no charges have been filed against Stansbury.
CHETRY: Also new this morning, a 40-mile wide oil slick is now within 20 miles of the Louisiana shore. The coast guard is considering a controlled burn, possibly today in an attempt to eliminate as much as 90 percent of the slick before it reaches the coast line.
The robotic subs that we were talking about yesterday have failed to shut off a leaking valve where the oil rig exploded and sank last week, and 40,000 gallons of crude are still pouring into the ocean every day.
ROBERTS: A two-alarm fire now contained in Norfolk, Virginia. It broke out overnight in the town's marina. CNN affiliate WABY reporting that firefighters were crawling on their hands and knees to get past the fire and to the boats on the other side to make sure no one was in danger. Witnesses say they heard an explosion before the fire started.
CHETRY: In Nevada strong winds clocked at more than 100 miles per hour uprooted trees, brought down power lines, all happening in the Reno area. More than a dozen flights had to be canceled at Reno's International Airport.
(WEATHER BREAK)
CHETRY: This sounds like a great choice, either wait on a plane for hours on a tarmac or lose your luggage. Airlines will face big fines starting tomorrow for keeping you stranded on the runway, and they are saying that means things could back fire on passengers big time.
ROBERTS: On 7:18, what main street really thinks about Goldman Sachs. Do they blame the banks or was Washington asleep at the switch? CHETRY: And at 25 past the hour, what does a soda and a movie theater, a beer and a baseball game, and open heart surgery all have in common? The mark ups. We'll show you the states that put the biggest price tag on your health.
(COMMERCIAL BREAK)
CHETRY: Welcome back to the Most News in the Morning. It's 11 minutes past the hour right now.
We've all heard the horror stores and some have lived the horror stories of being grounded on a plane for hours without food or water.
ROBERTS: The best part about that is when the toilets when they overflow. Starting tomorrow, three hours and you're out from a stuck airplane, anyway. Our Jeanne Meserve live in Washington with detail of the new airline passenger bill of rights that takes effect tomorrow.
And Jeanne, people are talking about unintended consequences associated with this bill.
JEANNE MESERVE, CNN HOMELAND SECURITY CORRESPONDENT: That's right, John and Kiran. If you haven't heard it, you have lived it. The horror stories, hours of sitting in a plane on the tarmac because of bad weather or flight congestion or bad scheduling.
The new rules are supposed to help but some say they could have unintended and even more unpleasant consequences.
(BEGIN VIDEOTAPE)
MESERVE: Videos posted on YouTube reportedly capture the discomforts of hours of waiting on a plane on the tarmac.
UNIDENTIFIED MALE: We've had people vomiting and passing out. There are infants on the plane.
UNIDENTIFIED FEMALE: Oh, God. This is a nightmare.
MESERVE: Passenger rights advocate Kate Hanni believes incidents like this may happen as many as ten times a day.
KATE HANNI, FLYERSRIGHTS.ORG: Airline passengers have less rights than a prisoner of war per the Geneva Conventions, and to think otherwise is defying what we've seen over and over again.
MESERVE: But starting Thursday, new rules from the Department of Transportation. Airlines are prohibited from keeping passengers on grounded planes for more than three hours with exceptions for safety and security.
After two hours, they are required to provide food and water. And if airlines don't comply, they could face fines of $27,000 per passenger, fines that could add up to as much as $3.7 million per flight. The transportation secretary is taking the step because he says airlines have been ignoring their passengers.
RAY LAHOOD, U.S. SECRETARY OF TRANSPORTATION: We're fed up with it. We're not going to wait for some law to be passed because sometimes that takes a long time. We have the jurisdiction other the airlines. We felt it was incumbent upon us to pay attention to passengers.
MESERVE: The airline industry says it will comply with the rules, but because carriers will not want to risk the massive fines, it could mean more cancellations, more missed connections, more lost bags, and more headaches for travelers. Kate Hanni isn't buying it.
HANNI: I think it's laughable that they actually think they can scare the flying public into thinking that the conditions with our rule are going to be worse than the conditions we already have.
MESERVE: And those conditions can be grim, indeed.
UNIDENTIFIED MALE: There's a long line going for the runway.
(END VIDEOTAPE)
MESERVE: Kate Hanai is already ready to wage another battle against the airlines. She is outraged that some carries are considering charging passengers to use restrooms and she's promising to fight that tooth and nail.
ROBERTS: You could imagine how much money they would make? A 50 cent lavatory when you're stuck on the runway for three hours, that would add up.
CHETRY: And what do they do when it stops working. Jeanne, also some creative ways for passengers to keep track of the tarmac delays themselves.
MESERVE: They say there's an app for everything, there's an app for this you can put on your phone and you can time out. And when the three-hour mark is hit, it plays the theme from "Jeopardy!" that you can hold up for your flight attendants. So you'll be able to track whether the plane has indeed pulled away from the gate for the three- hour wait.
But with the fines at risk here, you can bet airlines themselves will be keeping very careful track of the time.
CHETRY: Ironically, your iPhone battery would die before the time was up for the plane. Oh, man. That's cool, though. Thanks, Jeanne.
MESERVE: You bet.
CHETRY: Well, still to come on the Most News in the Morning, President Obama bringing his Wall Street reform message to the nation's heartland. We're going to get reaction of the Goldman Sachs hearing from people there.
Fifteen minutes past the hour.
(COMMERCIAL BREAK)
ROBERTS: Welcome back to the Most News in the Morning at 18 minutes after the hour.
Senate Democrats will try again today for a vote to begin debating new rules to reign in Wall Street. They failed twice already to break a Republican filibuster. As he tours the Midwest, President Obama is blasting the GOP. He says Americans deserve an honest debate on the reform bill.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Senate Republicans unanimously blocked efforts to even begin debating reform. I'm not even asking them to vote for the bill. I just want to let them debate it. And you know, you've learned these Senate rules are complicated. So they won't even let it get on the floor to be debated. It's one thing to oppose reform, but to oppose just even talking about reform in front of the American people and having a legitimate debate, that's not right.
(END VIDEO CLIP)
ROBERTS: Just ahead at 7:30 Eastern, we're going to speak with Connecticut Senator Chris Dodd about his efforts to get on the same page with Republicans and move financial reform forward.
CHETRY: President Obama likely to get an earful again today as he talks about Wall Street reform. He'll be in Illinois and in Missouri, the homestretch of his latest White House to Main Street tour. And White House correspondent Suzanne Malveaux is traveling with the president. She joins us from Iowa this morning.
And it will be fascinating to hear what people who were watching this miles and miles away from Washington thought of the Goldman Sachs grilling yesterday, Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: And, Kiran, one of the points is some of the people were not watching. It's one of these things when you go outside of Washington to see if people are paying attention. Here in Iowa, 58,000 people have lost their jobs since the recession, about 30,000 in the manufacturing industry alone. The president visiting three different counties in Iowa, those really hard hit by the recession, one of them 9.5 percent unemployment in Ottumwa. That's where he had his town hall meeting.
I had a chance to pull people aside, outside of that environment and ask them, are you paying attention to the hearings on Goldman Sachs in Washington? And who do you blame? How are you doing in your lives? Here's what they had to say.
(BEGIN VIDEOTAPE)
MIKE WITT, IOWA RESIDENT: It's hard to make ends meet, you know, when you're trying to live on unemployment and, you know, you got kids and bills and everything else. It's just hard to make, you know, the ends meet any more.
MALVEAUX: Do you think that people in Washington understand that you think the politicians understand how hard it is right now?
WITT: I think some of them do, but most of them don't. Most of them I don't think. Most of them haven't had to struggle like that. You know, they don't know what it's like to be on the bottom.
MALVEAUX: Are you paying attention to Goldman Sachs and they've got hearings today on Capitol Hill?
AMANDA BETTERON, IOWA RESIDENT: I haven't followed that too much. Not too much.
MALVEAUX: Do you blame them? Do you know what that's about?
BETTERON: No.
MALVEAUX: Does it matter to you?
BETTERON: I thought it was an investment thing, so not really.
MALVEAUX: What do you think of what's happening in D.C. today? Goldman Sachs, are you paying any attention?
UNIDENTIFIED MALE: I do. I just think that people are totally fed up and angry, striking out and, of course, it's easy to criticize. I don't think any of us have many answers. I think all of the incumbents are in a lot of trouble, whether Republican or Democrat.
MALVEAUX: Do you know anybody who has lost their job or who's seen things go for the worse?
UNIDENTIFIED FEMALE: Yes. Yes, my brother did. Yes. Well, he works for the airlines and they've been cutting back his hours and giving him less pay.
MALVEAUX: Is it difficult?
UNIDENTIFIED FEMALE: It's very difficult because he just had a kidney transplant so -- two small children and his wife has to work. So yes, it's been difficult for him.
(END VIDEOTAPE)
MALVEAUX: And, Kiran, what was fascinating, I talked to a lot of folks. And many of them say, look, you know, I asked them who do they blame? They said partly responsible, Wall Street, Goldman Sachs, the Obama administration, but also themselves. They're looking for answers. They're looking to the president, but they all say that they believe it's a shared responsibility.
The president is going to be heading to some other small towns today. We're going to be following him along the way, in Missouri, as well as Illinois. Obviously pushing forward financial regulatory reform but also trying to make his case, Kiran, that he is doing the best that he can in dealing with some of these real economic troubled times that folks are talking about -- Kiran.
CHETRY: All right. Suzanne Malveaux for us this morning. Thanks so much.
ROBERTS: Well, coming up next on the Most News in the Morning, ever consider how much it might cost if you had to go to the hospital with a heart attack? Elizabeth Cohen takes a look and the results, well, might just give you the big one.
I'm coming, Elizabeth, I'm coming.
(COMMERCIAL BREAK)
ROBERTS: Twenty-five and a half minutes after the hour. We're back with the Most News in the Morning. Top stories just about four- and-a-half minutes away. But first an "A.M. Original," something that you'll see only on AMERICAN MORNING.
CHETRY: Yes. Would you shop in a store where they charge three times more than their cost for everything they sell? Not likely. But that's what thousands of Americans actually do every day when they check into a hospital.
ROBERTS: Hospitals in this country on average charge 180 percent above costs for their services, except in Maryland, where state regulation means hospitals charge a whole lot less.
Our senior medical correspondent Elizabeth Cohen now with part three of her "Prescription for Waste."
(BEGIN VIDEOTAPE)
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I'm here at Johns Hopkins Hospital in Baltimore, Maryland. Now let's say that they brought someone in here who just had a heart attack. It cost a certainly amount of money to treat that person. The drugs, the nurses, all of that.
Now, Hopkins, like other hospitals, on top of that charges a profit margin, a markup, if you will. And now to talk about these markups, I'm here with Professor Gerard Anderson. Now tell me how much of a markup does Hopkins and other hospitals in Maryland charge?
GERARD ANDERSON, JOHNS HOPKINS BLOOMBERG SCHOOL OF PUBLIC HEALTH: Twenty-one percent.
COHEN: Twenty-one percent.
Now, other hospitals and other states in the country, do they also charge a 21-percent markup?
ANDERSON: No, it's only Maryland that does it. Other states' markups are much higher. COHEN: Much higher. OK.
Well, I'm going to go take a tour of states around Maryland to see how much it cost there to have a heart attack.
Now, I've just crossed the line into Delaware where they markup prices by 85 percent. And remember, in Maryland, they only mark up prices by 21 percent. But Wait. It gets even worse.
Just cross the line into Pennsylvania, and they have a 277 percent markup. This heart attack is getting very expensive, but wait, we still have one more state to go.
In New Jersey, hospitals hike their prices higher than any other state in the country, 326 percent. I wanted to understand why hospitals mark up their prices this way. So I've come here to ask the president of the American Hospital Association.
Nationally, markups are 180 percent we're told. That just seems -- to most consumers that just seems like a huge markup.
RICHARD UMBDENSTOCK, PRESIDENT, AMERICAN HOSPITAL ASSOCIATION: You'll find markups in every walk of life. And it depends upon the variables, the cost of providing that particular service and the factor of how much do you actually, in fact, then get paid.
COHEN: Other states right next to Maryland charge so much more than what they charge in Maryland.
UMBDENSTOCK: Everyone doesn't have the same type of payment system that Maryland has.
COHEN: So Professor Anderson, how does Maryland keep its markup so low?
ANDERSON: Well, there is the state government and they establish the rates for each hospital in Maryland.
COHEN: So Maryland takes care of patients more inexpensively. So let's not forget about the patient here. Does that hurt our patient that Maryland is spending less money on him?
ANDERSON: No, in fact, the quality of care at Johns Hopkins, the quality of care in the hospitals in Maryland is all quite good.
(END VIDEOTAPE)
ROBERTS: No doubt, Elizabeth, that if you get sick, Johns Hopkins Medical Center is a great place to go to get treated. But if the state of Maryland --
COHEN: Exactly.
ROBERTS: If the state of Maryland, though, can cap what hospitals can charge, why can't every state do this? COHEN: You know, it's interesting, John. Back in the '70s and '80s, various states did try it. They said, OK, let's try what Maryland is doing. And you know what, they went right back to the old system. And I bet you can guess why. Hospitals don't make as much money when you do what Maryland is doing. And those hospitals said, forget it. Let's do it the old way.
CHETRY: So New Jersey hospitals, for example, that you showed us, do they usually get paid all of the extra charges that they ask for?
COHEN: You know what, they actually don't. They don't usually make that full, full markup. They negotiate a price with an insurance company that's lower than that, but still significantly higher than what they get in Maryland.
Now, you might want to ask, well, what do hospitals in New Jersey and elsewhere get? We don't know because all of those negotiations between insurance companies and hospitals are kept secret.
ROBERTS: You know, when you get your bill, though, you can see how much they got paid for certain things. And typically it's a fraction of what they really want.
COHEN: That is true.
ROBERTS: Yes. Elizabeth Cohen for us this morning. Elizabeth, thanks so much.
CHETRY: Very eye-opening series that you've been doing, Elizabeth. And tomorrow on AMERICAN MORNING, a medical clinic where a bold experiment is now panning out. Doctors are happier. Patients and bottom lines healthier. Elizabeth Cohen profiles what could be a prototype for health care of the future. An "A.M. Original" tomorrow on AMERICAN MORNING.
ROBERTS: Crossing the half hour now. It's 7:30 Eastern and time for this morning's top stories.
Coast Guard officials are considering setting fire to a 40-mile wide oil slick off of the Louisiana coast. It may be the only way to keep it from damaging the environmentally sensitive shoreline along the coast there. Every day, 42,000 gallons of crude continue to leak into the ocean where an offshore drilling platform exploded and sank last week.
CHETRY: The Justice Department may sue Arizona over a new law that allows police to check the status of those they believe are in the country illegally. Attorney General Eric Holder says the bill could pit law enforcement against those they are supposed to protect. Meanwhile, Homeland Security secretary Janet Napolitano says the southern border is "as secure as it has ever has been and warns against redirecting federal dollars use to hunt down dangerous immigrants.
ROBERTS: A reflection of Main Street's anger coming out on Capitol Hill. Senators slamming Goldman Sachs executives for their alleged role in the worst recession since the Great Depression.
(BEGIN VIDEO CLIP)
LEVIN: Don't you also have a duty to disclose an adverse interest to your client? Do you have that duty? Do you?
DANIEL SPARKS, FMR. HEAD OF MORTGAGES, GOLDMAN SACHS: About --
LEVIN: If you have an adverse interest to your client, do you have a duty to disclose that to your client?
SPARKS: The question about how the firm is positioned or our desk is positioned --
LEVIN: You have an adverse interest to your client when you're selling something to them, do you have the responsibility to tell that client of your adverse interest? That's my question.
SPARKS: Mr. Chairman, I'm just trying to understand --
LEVIN: No, I think you want to understand but I don't think you want to answer it. I don't think you want to answer it.
(END VIDEO CLIP)
ROBERTS: The traders all denied over and over again that they were part of the problem that caused the financial meltdown.
CHETRY: Well, they tried twice and twice they failed. Now Senate Democrats are going to try again today to break a Republican filibuster of a financial reform bill.
ROBERTS: While touring the nation's farm belt, President Obama is attacking the GOP for blocking the bill that would create new rules for Wall Street. He says Americans deserve an honest debate. And I think Senator Chris Dodd has been negotiating with Republicans on a bipartisan solution and he joins us now in an exclusive interview from Capitol Hill.
Senator, great to see you this morning.
SEN. CHRIS DODD (D), CONNECTICUT: Good to see you.
ROBERTS: My first question is if you're still trying to hammer out an agreement with the Republicans, and you have said yourself you think a deal is close, why do you keep having all of these votes? Is it political theater? Are you hoping that maybe if you vote enough a couple of Republicans might peel off and join you?
DODD: We got to get to the debate. Look, this is a bill that already reflects bipartisan work over the many, many months. We introduced a bill in November, and there was objections to various parts of it. So we put it aside, it did not go to the floor of the Senate then and frankly had been working for almost six months, producing this product. Look, the headlines this morning, you heard about Goldman Sachs. Yesterday, you got Greece that's been downgraded. The market fell two percent. Europe is on the brink of a financial crisis. We need to get about the business of putting this bill together.
Now we're sitting down and talking on some aspects of this bill, but 98 of the colleagues have ideas they'd like to bring to this debate. And the idea that two senators are going to resolve all of this is -- it just isn't how the Senate functions. So we need to get to the debate and allow amendments, we'll discuss various aspects of the bill.
But once again, not even allowing us to move to the bill, not voting for the bill. You're not voting on amendments, just bringing up the bill for debate. Frankly, we need to get to this. The American public wants some answers and they deserve them.
CHETRY: I want to dig into some of the particulars about that bill in a moment. But first, I just want to get your reaction. I mean, I'm sure you saw your colleagues, yesterday, the oversight committee, grilling Goldman Sachs executives, including the man who was behind some of those questionable CDOs, Lloyd Blankfein, the CEO of the company.
I mean, as you just pointed out. The Dow down 200 points yesterday. However, Goldman Stocks up a dollar. Was anything accomplished, in your opinion, yesterday?
DODD: Well, I think highlighting the issue here and again, as you know, there's a legal matter, the SEC has brought against Goldman Sachs. So I want to be careful about drawing conclusions on the realities of what's involved in this. But Carl Levin was asking about the ethics of these issues.
Here, where an industry or a company is actually engaged in the business of marketing certain products, that they themselves think are very, very risky, and are taking bets against those. What are the ethics in all of that? Should there be better rules to govern those kind of activities?
And frankly, there should be. As you know, a lot of the activities that occurred, that brought us to the financial brink were in the unregulated sector of our economy. And I think most of us believe that we need to have as Carl and I have said, cops on the beat in that unregulated area of our economy. That's one of major features of the bill that we're bringing before the Senate.
ROBERTS: So Senator, let's get to the meat of the legislation here.
DODD: Right.
ROBERTS: What will your financial reform bill do to protect investors against the Fabulous Fabs of this world?
DODD: Well, it does four things, basically four things. One is we end too big to fail, and anyone who has looked at this objectively will tell you we have accomplished that with this bill, never again should taxpayers be asked to bailout a major financial institution because they have an implicit guarantee that the government will step in and help them when they mess up. That's number one.
Number two, we believe that these exotic instruments, the $91 trillion in 1998 that jumped almost $600 trillion in derivatives need to be regulated, need to have transparency, need to be in a situation where people actually know what's going on. That was a major cause of the problems as well.
Thirdly, consumer protection. This is the 21st century, whether it's credit cards, mortgages, other financial instruments, there is no place that on a regular basis as a top priority protects the American consumer for financial products that could ruin them as many of them did.
And then, lastly, of course, we need to have an early warning system. We need to be able to identify much earlier than we did the problems that are looming. And today, I mentioned, you could have a problem today in Greece that poses risk in Europe and here. We need to have a systemic radar council, as I call it here, to watch early on and to avoid the kind of huge problems that can emerge. We'll have our economic crises, but they shouldn't metastasize into the problems we're living today.
CHETRY: You know, you mentioned this early warning system and I know a lot of people would like to see that as well but there have been many critics, not only of Wall Street but also of the Congress. In fact, in "The New York Times" op-ed piece Bethany McClean wrote that Congress was warned and that they "sat idly by as consumer advocates warned that people were getting loans they'd never be able to pay back. Congress refused to regulate derivatives despite ample evidence of the dangers they pose and it was Congress that repeal the Glass-Steagall Act, which separate investment and commercial banking but failed to update the fraying regulatory system."
How can you assure the American people that you guys will get it right this time?
DODD: Well, you do the best you can and obviously, again, I started -- I became chairman of the banking committee about 38 months ago. The very first hearings we held were on the mortgage crisis, all of 2007, even into 2008, for a year, raising the issue of what was going on and what we're doing and what steps were we taking by the fed or the Treasury Department that time to step in.
You may recall that in 1994 Congress actually passed a law, instructing the federal reserve to promote regulations that would stop the abusive and deceptive practices, fraudulent practices in the mortgage market. They didn't promote one regulation. Now, Congress should have, you're right, stepped in and say why aren't you doing this? That didn't happen. Glass-Steagall, you're also right now. steps were made but in those days people were looking for efficiencies and frankly we need to correct that in this bill.
ROBERTS: You were one of the champions of the repeal of Glass- Steagall, senator, was it a mistake to do that?
DODD: I think it was. I think at that time we believed the argument, it was overwhelmingly adopted. The debate on that bill was about the community reinvestment act. Most people believe that by providing firewalls that you could separate commerce and banking and that people wanted efficiency. They wanted one-stop shopping and they didn't want to go to different places. That was the argument of the day and obviously, it didn't work very well.
ROBERTS: So what do you say now to people who are suffering so badly because of the near collapse of our financial system, about your vote on Glass-Steagall?
DODD: Well, that was one aspect of it. And obviously, look, I wish we could go back and redo that. But the issue is now before what are we doing about this? Can we get to a debate that will allow us to make those corrections? We have everyday now, a whole week being wasted here because people don't even want the issue to be brought up. Who are they working for when they are doing that?
I'm not suggesting our bill is perfect. But we've spent a lot of time working to produce this legislation. And when the other side just refuses to even begin the debate and discussion, you have to raise the question of what's going on.
CHETRY: But it is interesting, it seems to me that when you talk about the Glass-Steagall as well. I mean, Wall Street found yet another way to outsmart the government, right? I mean, nobody knew if you could look back and first of all these complex financial exotic instruments that were being traded, the casino-like atmosphere, that's making more and more money. That's not how you guys envisioned separating investment and commercial banking, right?
DODD: Exactly. But here's. That's one of the aspect -- one of the issues that will be raised.
CHETRY: So, how do you know that they're not going to outsmart you again? After --
DODD: Well, the idea you don't, but obviously what you do is by having more than just one regulator, that's the systemic risk council, as we call it, looking over what's occurring out there and then not only having the ability to advise but actually insists that the Federal Reserve go so far as to even break up this institutions if they pose systemic risk. Nothing like that exists today in the federal government.
So you're right, we're going to have another economic crisis. There's no question about it. That will happen. The issue is can we respond early and quickly enough to avoid the kind of problems that we've seen emerge from this crisis?
ROBERTS: Senator, can I just ask this question? Eleven years ago with Glass-Steagall, you got it wrong. How do you know you've got it right this time? DODD: Again, you learn from your lessons going back. At that time as you recall, those votes were adopted almost unanimously by the Congress, Republicans and Democrats voted for that. Here we believe we've hopefully learned and again by setting up the system as I described here, consumer protection, seeing you have an early warning system, seeing to it that you're going to have transparency on these exotic instruments.
So they have to go through the clarity of people knowing what's actually being bought and sold. We think you can minimize those problems. Hopefully, we can get the bill done. I think it's a strong bill. It's been recognized as such. Others have amendments, we'll add to this and we'll at least put up a major reform effort when it comes to the financial sector of our country.
CHETRY: All right. Well, it's great talking to you this morning. We appreciate it and best of luck out there today. Senator Chris Dodd --
DODD: Thank you.
CHETRY: -- from Connecticut, thanks.
Well, it's 40 minutes past the hour. What's hot on the blogs? What has you riled up this morning? What do you like to weigh in on? We would like to hear from you, CNN.com/amfix. We'll be reading your comments in a couple of minutes.
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ROBERTS: Well, lots of comments coming into our live blog this morning about a number of different topics. Let's take a look at a couple of them. You got something there?
CHETRY: Yes. We have Mark (INAUDIBLE) who writes, "the double talk and the double dodging done by Goldman Sachs and others is completely offensive. They need to be held accountable for their actions and share the financial burden that they inflicted on the nation. " Then there are others who say, you know, "the American people are tired of the inaction in Congress." Bob in Florida writes that, "it's time for us to say no", he says to the GOP.
So, you know, a lot of people weighing in on what they saw yesterday about whether or not, you know, Main Street is just getting the raw end of the deal, no matter how hard they were grilled on Wall Street as we said. Goldman Sachs ended up a dollar up when the markets tanked yesterday.
ROBERTS: It was a fascinating hearing to watch and of course, a lot of people are focusing in on the fact that people said the word a lot --
CHETRY: Yes, they did.
ROBERTS: Which you don't normally hear in Congress. But when it comes down to who actually got anything done, it looked like more of a stalemate than anything.
CHETRY: Yes. But it was interesting that it out there for people to see. Two and half hours of testimony. Fascinating stuff. We'll see if any changes come because of it.
ROBERTS: You can join the conversation right now at cnn.com/amfix in our live blog. Let us know what you think about all of this or any of the other news during the day. Join us this morning.
CHETRY: Also, we're going to check in with Rob Marciano. There are some high winds, major problems yesterday in some parts of the desert southwest. Now high winds headed to the east coast as well as some travel delays. Rob will be along with more. 44 minutes past the hour.
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CHETRY: There's a live look this morning in Green Bay, Wisconsin, home of the Cheeseheads, Packers, sunny and 32 degrees. A little bit later it's going to be 62 and sunny, zero chance of precipitation.
Looking good today, not so great over the next two days, but, hey, take what you can get.
ROBERTS: Yes, and, you know, if you live in Upstate New York or the northern part of Vermont, you might get some more snow today? Rob, what's up with that?
ROB MARCIANO, AMS METEOROLOGIST: Check out some of these video, John. You mentioned it kind of earlier, snow on top of daffodils, the tulips --
CHETRY: Oh, the tulips. The tulips are getting snowed on.
ROBERTS: That looks very pretty, but that -- that's a scene we'd like to see in December, not late April.
MARCIANO: Yes, exactly.
Well, they get it just about, well, almost all year round in Vermont. These pictures coming at you from Montgomery, Vermont. That's extreme Northern Vermont.
In some spots -- and just checking this, you got some of the totals now, you just got one report of 20 inches in Nashville, Vermont. I don't know why there's so many southern state names that are -- southern city names that are out there in Northern Vermont. But, nonetheless, that's what's going down.
Still snowing right now, not only there but in Upstate New York where some spots have received over a foot as this very, very slow moving system, which by the way is the one associated with all the severe weather that came through over the weekend. It just refuses to go out to sea and now the snow getting all the way down to, says, Bennington and through parts of Southern Vermont. But winter storm warning still posted. I guess I got to change this forecast. Eight to 18 inches total was the original forecast, but we already received one isolated report of 20 inches.
All right, elsewhere it's obviously chilly across this part of the country, cold enough for snow, cold enough for frost and freeze warnings across parts of the Ohio River Valley and parts of the Great Lakes region. So this may be the last time we see, hopefully, temperatures below freezing.
Nice across the south today, and then this powerful storm has brought winds, damaging winds to California and Nevada last night, over 100-mile-an-hour winds getting there. Some people without power in Reno, and this system heading towards the Plains.
John and Kiran, back up to you. Take care of your tulips.
ROBERTS: Yes. We definitely would.
It's interesting, you know, Rob, we had better weather at the beginning of the month than --
CHETRY: We did.
ROBERTS: -- we had at the end of the month. So, what's up with that?
CHETRY: Yes.
MARCIANO: It's that time of year. We just roll with it.
CHETRY: The tulips -- the petals fell off all the tulips already. Yes.
ROBERTS: Snow gets inside, freezes it and --
CHETRY: All you have is like a little stem. Oh, man.
All right. Thanks, Rob.
ROBERTS: So, what's the dirtiest, most polluted air in the country? What's the cleanest?
The state of the air in our cities coming right up. The American Lung Association's got a new report. We'll tell you where it could be hazardous to your health to live.
Forty-nine minutes after the hour.
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ROBERTS: Fifty-two and a half minutes after the hour. A live look at the Capitol building this morning where it's sunny and 46 degrees. Later on today, sunny with a high of 65. Nice looking day there. How safe is the air where you live? The American Lung Association's state of the air report card is out today. Cheyenne, Wyoming, and Honolulu top the ranking and many cities have improved air quality. But a staggering number of Americans, staggering number, still live with dangerously dirty air.
Joining us live from Washington this morning, Janice Nolen. She is the assistant vice president for National Policy for the American Lung Association, to talk more about this.
Janice, great to see you this morning. Give us the good news first.
JANICE NOLEN, ASSISTANT VICE PRESIDENT FOR NATIONAL POLICY AND ADVOCACY, AMERICAN LUNG ASSOCIATION: Thank you.
Well, we've made great improvements over the last few years, John. We've been able to track these pollution levels because we've been doing these reports now for 11 years. And the improvements, especially this year's report, are really striking.
It tells us that we're doing good things about cleaning up air pollution. It also tells us we've got a long way to go, but it's always good to know that the things that we put in place, like cleaner diesel fuel, have been actually coming out with cleaner -- less pollution.
ROBERTS: Well, we've talking about the long way to go. Let's quantify that for folks at home.
In your report you found that 175 million people, that's 58 percent of the population, still live in areas where the air is downright dangerous to breathe.
NOLEN: Absolutely. That means almost 6 out of 10 of us live in areas that can either cause an asthma attack or send people to the hospital because they can't breathe well or because they have a heart attack or a stroke, or can actually shorten their life by even months to years.
These are very serious levels of pollution, and while we've made, again, great progress, and people don't always think of this still being a problem, it remains a big problem. And the more we learn about the science about air pollution, the more we learn how much harm it can do to our bodies.
ROBERTS: Well, let's take a look at the top five worst cities across America. And this is -- this is when it comes to particulate matter, the small, little particles in the air that can cause so much damage when you breathe them in.
Phoenix-Mesa-Scottsdale, that -- that area is number one; followed by Bakersfield, California; Los Angeles-Long Beach-Riverside; Visalia-Porterville, California; Pittsburgh-New Castle, Pennsylvania. That -- that particulate matter, as we said, is -- is very, very harmful and it can lead to a lot of those diseases. But -- but I noticed from your report, Janice, that five of the top worst cities, when it comes to particulate matter, in California, when it comes to ozone pollution, 8 out of 10 in California. Cars and trucks still a big problem, I take it.
NOLEN: Absolutely. And it's not just that. We're seeing a lot of pollution coming from things like the diesel exhaust, some of the raw ingredients in particle pollution come from big trucks, it come from the ports, the ships that come in, the trains.
It also is coming from the agricultural processes. When you've got farming and -- and some of the -- the programs that they run, the various measures that they take to reduce weeds or things, those can all contribute to a big part of the problem from ozone.
We've got lots of sources, and many of us are adding to that problem when we choose to drive instead of take public transit or turn on electricity when we should be saving the power.
ROBERTS: You know, one of the --
NOLEN: Those are the things that can make a big difference in pollution.
ROBERTS: One of the things that I was fascinated by was for the very first time you looked at socioeconomic groups in terms of this pollution. What did you find?
NOLEN: We know from a lot of different research that people who have low income have much higher risk of pollution. And so, we looked and found millions of people in communities around the country who have low income and because of where they live or because of their diseases, may be at higher risk from breathing the pollution we have.
ROBERTS: Wow, and some of those people are the ones who can least afford medical treatment for their problems as well.
NOLEN: Absolutely.
ROBERTS: Janice Nolen from the American Lung Association. Great to see you this morning. Thanks for stopping by to talk about your report.
NOLEN: Thank you.
ROBERTS: Top stories coming up right after the break. Stay with us.
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