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American Morning

Human Cargo Bust; 401(k) Not a Piggy Bank: Vicksburg Submerged; Floods Threaten Louisiana Oysters; Obama's Mideast Speech; Men Behaving Badly; FDA Making Easier to Understand Dosing Instructions for Toddlers and Children

Aired May 19, 2011 - 07:00   ET

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

ALI VELSHI, CNN ANCHOR: Breaking news. Stepping down, but will he be stepping out? The IMF chief resigns over sexual assault charges hours before a bail hearing in New York City.

And crash and burn. Take a look at this. A military jet hauling fuel erupting breaks into pieces in California. All that on this AMERICAN MORNING.

KIRAN CHETRY, CNN ANCHOR: Good morning to you. Thanks so much for being with us on this "American Morning." it is Thursday, May 19th. A lot going on today.

CHRISTINE ROMANS, CNN ANCHOR: Let's begin with breaking news, the late night resignation of Dominique Strauss-Kahn. The move effective immediately comes hours before a bail hearing set for later today here in New York.

VELSHI: We're seeing his mug shot for the first time this morning. The former IMF chief is accused of the attempted rape of a maid in his Manhattan hotel room. He says he's not guilty.

CHETRY: Here is part of the statement he released. Quote, "I think at this time first of my wife, whom I love more than anything, of my children, of my family of my friends, I want to say that I deny with the greatest possible firmness all of the allegations that have been made against me. I want to protect this institution which I have served with honor and devotion and especially, especially I want to devote all of my strength, all of my time and all of my energy to proving my innocence."

ROMANS: Susan Candiotti is tracking the developments this the case.

SUSAN CANDIOTTI, CNN CORRESPONDENT: The question is will the district attorney agree to these terms? Ultimately it's up to the judge to decide. Right now the D.A. says no comment about the particulars of this bail offer, which we now have. A judge will figure it all out. Are the conditions good enough to make sure that Strauss-Kahn shows up in court?

He wants out of Riker's where he's been two nights under a suicide watch that's been set protectively. If he makes his case, no more cot, no more cell, no more guards looking in on him every 15 minutes or so. He would get to live in a comfortable home, possibly his daughter's in Manhattan.

Here's the deal his attorneys are proposing, $1 million in bail. That's the same amount he offered in Monday's court appearance. It was rejected by a different judge. He'd be confined to home 24 hours a day, seven days a week, be under electronic monitoring, likely an ankle bracelet, and have to call in every day. He's already turned over his passport and would have to hand in the United Nations travel I.D.

The internationally renowned financier is also offering to put up the deed on his $4 million home in Washington, D.C.'s Georgetown. He also has a home in Paris. The alleged victim's lawyer says the 32-year-old mother is scared to death at the thought of him possibly making bail.

(BEGIN VIDEO CLIP)

JEFFREY SHAPIRO, LAWYER FOR ALLEGED VICTIM: She's very concerned about her security. She's very concerned about what has happened, what this man is capable of and the fact that he would be free I'm sure would be something that would -- she would be very alarmed about.

(END VIDEO CLIP)

CANDIOTTI: Strauss-Kahn's lawyers say he'll plead not guilty and told the court they have a defensible case. Strauss-Kahn's DNA and other forensic evidence collected at the scene of the alleged sex attack in the hotel suite will be considered by a grand jury, and the hotel maid is also to testify in these secret hearings.

CHETRY: Also new information coming out of law enforcement that could help the prosecution. And this involves the positioning of the door and her cart when she was in that room.

CANDIOTTI: That's right. A law enforcement source tells us that the door to the hotel suite was propped open with the maid's cleaning cart. This is required by hotel policy, and, in fact, evidently the law enforcement sources that did take place.

So the prosecution could argue really would an attack have taken place -- would consensual sex have taken place if the door was propped open? Now, part of the charge indicates that Strauss-Kahn allegedly shut the door in the middle of this attack as she was -- she said she was trying to run away from him and get away from him.

CHETRY: The interesting thing is that they have that electronic key. So that door, it can hold some evidence as to when it was open, when it was shut.

ROMANS: Unless there was somebody leaving the room. There's other -- we're trying to find out if there are other people coming and going out of that room as well. If the door was already open, if she propped it open with her cart, all that needs to be determined.

CANDIOTTI: That's correct, still gathering all that evidence.

VELSHI: Also this morning military jet crashes and burns in southern California. It happened late last night at the air base in Ventura county. The jet crashed on takeoff sliding off the runway and erupting into flames. Three crew members on board the 747 aircraft escaped with minor injuries. It belonged to omega air refueling which is a Navy contractor. It is said to be carrying 150,000 pounds of jet fuel.

CHETRY: In just a few hours President Obama will deliver what's being described as a major speech on the Middle East. The president will outline new goals for the region and he's expected to defend new sanctions against Syria after the violent crackdown on anti-government protesters.

Also said to be in the speech, unveiling of the $2 billion aid package for Egypt as well as the announcement of a new trade partnership with the region and a fund for helping to stimulate investment. CNN will carry the president's speech live. It's happening at 11:30 eastern time.

ROMANS: More than two weeks after he was killed by a team of Navy Seals we're hearing what Al Qaeda claims to be the voice of Osama bin Laden. The 12-minute-long message contains what would be his public reaction to the recent uprisings in part of the Arab world. Stan Grant is live in Islamabad, Pakistan, with more on this.

Until now we have not heard bin Laden's response to what was happening throughout the Middle East in the spring because many analysts said that Al Qaeda was searching for a message because the Arab spring had passed it by.

STAN GRANT, CNN INTERNATIONAL CORRESPONDENT: Yes, precisely. You know, this was always the aim of Al Qaeda, to attack the far enemy, that is the United States, to bring down the near enemy, which he saw as some of the Arab regimes that he was really butting against. Of course, events had overtaken him, because we had seen students and other protesters take to the streets and make a real difference in countries like Tunisia and Egypt.

But this statement recorded about a week before his death he directly addresses that uprising, calling it a great and historic uprising. He calls it a revolution there that was fated by god. He only mentions Tunisia and Egypt, actually, by name, but he's calling for more Arab leaders actually to be toppled.

Now, as you say, this is an attempt to try to get some relevance, to try to get some traction with those events in the Middle East. He certainly didn't have to search for relevance here in Pakistan because two weeks after his death we have a statement from the Taliban, the second in charge of the Taliban here saying that they are vowing to continue bin Laden's work to finish his work. He says that the U.S., NATO and, quote, "the Jews," are their enemy, and they're going to step up their attacks.

We have seen more attacks over the past week. Dozens of military have been killed. A lot of insurgents killed as well in suicide attacks and other attacks throughout Pakistan. The thing to remember here as well is that Pakistanis are caught in the crossfire. The Taliban here may have other enemies but the Pakistanis are the ones dying in these attacks.

ROMANS: Stan Grant, thanks, Stan.

VELSHI: New details about the scandal that has torn apart California's former first family. This is our first glimpse of Arnold Schwarzenegger since the news came out about his affair with another woman. The scandal is the peg for "TIME" magazine's latest cover story.

CHETRY: Take a look at it, "Sex, Lies, Arrogance -- What makes powerful men act like pigs." The asterisk next to the little pigs, it says "no offense."

ROMANS: No offense to the pigs because pigs are innocent and cute as opposed to the people profiled in this story. We now know who is other woman is. "The New York Times" is reporting she is Mildred Patricia Baena.

(BEGIN VIDEO CLIP)

WHOOPI GOLDBERG, CO-HOST, "THE VIEW": The gasp is that -- this is not the first time I've heard it, you know. And people go, oh, my god.

JOY BEHAR, CO-HOST, "THE VIEW": Don't you remember years ago when Clinton was doing his thing with Monica Lewinsky, we had the same response. Well, people did. She was overweight. What does he see in her? How come he would take a chance with a girl --

UNIDENTIFIED FEMALE: If she'd been a drop dead gorgeous beauty, then we'd be like, oh we hate her, but at least she looks good.

(END VIDEO CLIP)

VELSHI: Interesting discussion. This woman has found herself in the middle of a lot of publicity right now. Thelma Gutierrez live outside Mildred Baena's home in Bakersfield, California. Good morning, Thelma.

THELMA GUTIERREZ, CNN ENTERTAINMENT CORRESPONDENT: Good morning, Ali. I can tell you that Bakersfield is about 100 miles away from Brentwood, Ali. And that's where Mildred Baena actually worked for the Schwarzeneggers for 20 years. We know that she moved here. She just recently retired. She moved here with her 14-year-old son. She's 50 years old, a native of Guatemala. Moved here. Neighbors say that this is a very nice family so far. Here's what they had to say about his son.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They seem to be very pleasant neighbors. And the boy, he's very well liked. He seems very, very polite. Very polite. He also has a little dog he plays with a lot and he rides his bike. Not a whole lot, but you know once in a while I see him, but not a whole lot.

(END VIDEO CLIP) GUTIERREZ: Now, CNN obtained the child's birth certificate and what we have learned is that this boy was born just days after Maria Shriver gave birth to her youngest son. We've also obtained the divorce documents, Baena's divorce documents and we learned that the couple separated just three weeks after she gave birth.

CHETRY: Do we know anything more about the timing of this coming out, why all of this emerged right now? There seems to be some conflicting reports on that.

GUTIERREZ: It's all very curious because she had worked for the family for 20 years. Lots of unanswered questions as to how this kept quiet for so much time. After all, this was the governor of California, a very high profile family. Yet this family maintained this secret for so long, then all of a sudden, you know, becomes this explosion of information. And so that is a question that's yet to be answered.

But what we do know is that Maria Shriver has retained a very high profile Hollywood attorney. Her name is Laura Wasser. "People" magazine has reported that Laura Wasser is now going to be representing Maria Shriver. This is a person who is known in her office by the acronym of L.A.W., which stands for Laura Allison Wasser. So she's a person who is very well known. She's represented Angelina Jolie, Britney Spears, and Mel Gibson's wife Robin Gibson.

VELSHI: Thank you very much. Thelma Gutierrez outside this woman's house in Bakersfield, California.

(WEATHER REPORT)

VELSHI: We'll be coming back in a few minutes. A lot of news stories that we're covering.

ROMANS: This one is interesting. A record number of people are borrowing from their 401(k)s just to make it through. A new Senate Bill would prevent people from using their 401(k)s as a piggy bank for loans. It would also make it easier to pay that money back, a really important move on this. We'll tell you about it.

CHETRY: The FDA wants to change the dosing information and instructions trying to make things clearer when you're giving your kids medicine like Advil or acetaminophen, which is Tylenol. We'll talk more about that.

VELSHI: And a human smuggling operation has been busted using x-ray machines at the Mexican border.

CHETRY: Those are people.

VELSHI: That's unbelievable. We'll show you that when we come back and have more a little more detail on that.

(COMMERCIAL BREAK)

ROMANS: Welcome back to AMERICAN MORNING. In a shocking case of human smuggling, Mexican authorities sent 400 migrants back to Guatemala yesterday. They were discovered packed into two tractor trailers at the Mexican border on Tuesday.

Here are still -- some are still being held until their countries are notified. Mexico has very strict policies about returning people immediately back to their countries of origin. The operation busted by checkpoint x-ray machines. Officials say the migrants paid $7,000 each for the trip to the U.S.

VELSHI: Look at that.

ROMANS: Those are the x-ray machines.

CHETRY: So this -- what they're saying is -- I mean, can you imagine, they apparently had these rudimentary straps and things like that. People were having to ride standing, squatting in some cases so that they could all fit in there on these extremely rugged roads.

VELSHI: That's unbelievable.

All right. New legislation aimed at your 401(k). Lawmakers are looking to limit you from tapping into retirement funds saying that many people are using their 401(k) as a piggy bank and they cannot repay those loans. So they're coming up with new rules and here's what they're going to look like.

You can't take out more than three loans at one time. The rollover period for repayment after leaving a job is going to be extended. And finally, you can continue to make elective contributions during the six months after you have taken a hardship withdraw.

ROMANS: We know a lot of people have been doing that, taking money out of their 401(k)s.

VELSHI: Yes.

ROMANS: But it really does rob your retirement later on.

VELSHI: It does, yes. It's an absolute last resort.

CHETRY: I know. And I know this is not the smartest argument but there are some people who say this is why I'm loathe to do this because my money is tied up. I put money in there, it's my money. But if I need it, I can't take it out.

VELSHI: Right. Well, then --

CHETRY: The government is letting me take it out.

VELSHI: It's one or the other. When people don't have to keep the money -- I mean, it used to be pensions. You didn't have any choice over the money.

CHETRY: Right.

VELSHI: But it is -- it is a fact that if you are left to save for your own retirement, people don't do it.

ROMANS: Yes, that's right.

VELSHI: So then what happens? Then your money runs out at the end.

CHETRY: I know.

VELSHI: In some ways it's better for your money to run out when you're 50 than when you're 80.

ROMANS: And the bottom line is that taking money out of your 401(k) before you retire is an absolute last resort.

VELSHI: Yes.

ROMANS: And it's a sign of absolute economic desperation. You shouldn't do it for any other reason than --

VELSHI: Then you can't survive.

ROMANS: Then you're not going to survive.

CHETRY: All right.

Well, after capturing the prestigious players championship this weekend. PGA Tour golfer K.J. Choi is now donating $200,000 of his winnings to tornado victims in the southeast. The South Korean star took home $1.7 million with his playoff victory Sunday. He says he wanted those who are suffering right now to know that they're not being ignored.

ROMANS: Also, mortgage, your mortgage application. If you looked at your mortgage paperwork or your mortgage application, it's very, very difficult. We're going to show you the new rules to make it readable.

VELSHI: This is unbelievable. I'm telling you this may be the single biggest advance of the last decade if this actually happens.

ROMANS: Yes. Too bad this didn't happen in 2005 before --

VELSHI: You'll all going to understand your mortgages.

Lady Gaga. You know, I told my wife about a year ago I thought she's going to be a flash in the pan.

ROMANS: Your wife or Lady Gaga?

(LAUGHTER)

VELSHI: No, no, Lady Gaga. My wife -- my wife is timeless and will be with me for eternity.

Lady Gaga, on the other hand, she's teaming up with Starbucks -- also not a flash in the pan.

CHETRY: Yes. VELSHI: So we're going to talk about what they're doing.

CHETRY: Also, eternity made him Saturday for Ali and his wife. We'll find out as well.

Twenty minutes past the hour.

(COMMERCIAL BREAK)

ROMANS: It's 23 minute past the hour. "Minding Your Business."

Wall Street snaps a three-day losing streak. Energy stocks help pushed the market into positive territory. The Dow gained 80 points Wednesday. The Nasdaq was up 31 and the S&P up 11.

Sony testing the patience of gamers. The PlayStation Network has been taken down again after it was discovered PlayStation accounts could still be compromised. Sony had just restored service with improved security.

A watchdog group taking steps to make it easier to comparison shop for a mortgage. The Consumer Financial Protection Bureau unveiling designs for a new simple mortgage disclosure form that will help borrowers compare loan terms. A mortgage form you can actually read.

And Starbucks teaming up with Lady Gaga, now the world's most powerful celebrity according to "Forbes." She'll be the face of the coffee chain's scavenger hunt promotion that coincides with the release of Lady Gaga's new album.

Those are the morning's business headlines. AMERICAN MORNING is back right after a quick break.

(COMMERCIAL BREAK)

CHETRY: Twenty-seven minutes past the hour right now. Welcome back to AMERICAN MORNING.

The Mississippi River crested a day earlier than they expected in Vicksburg, Mississippi. It reached an all-time record high of 57.1 feet yesterday. That's 14 feet above flood stage. And as you can see from the pictures, hundreds of homes under water this morning. The roads are still impassable except by boat. Our Martin Savidge found one Vicksburg resident who knew trouble was coming and literally rose above it.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: They come in and they did it in a day's work.

MARTIN SAVIDGE, CNN CORRESPONDENT: What day was that?

UNIDENTIFIED MALE: Mother's Day.

SAVIDGE: So you raised the house on Mother's Day?

UNIDENTIFIED MALE: Yes, sir. And that --

SAVIDGE: It's probably a good day to do it.

UNIDENTIFIED MALE: Oh, yes, it was.

SAVIDGE: I mean, considering now the fact that this house is one of the few that's still dry in the neighborhood.

UNIDENTIFIED MALE: Yes.

SAVIDGE: Mom got a pretty good present.

UNIDENTIFIED MALE: Oh, yes, she loves it. Best Mother's Day present ever.

(END VIDEO CLIP)

CHETRY: There you go. So a little planning for the worst and it turned out well for that family at least. That man's home doesn't have a single drop of water in it. The plumbing and electricity also still working.

ROMANS: All right. Right now, thousands of homes are flooded, though, and three million acres of farmland are not in such good shape. They're under water in the south, and that's just the damage that we can see.

VELSHI: Now in Louisiana, beneath the surface of the water, sensitive oyster beds are now threatened. One oysterman says it's like Mother Nature is waterboarding us. Now what is this all about?

Rob Marciano is live in Port Allen, Louisiana, this morning.

What's the issue with oysters, Rob?

ROB MARCIANO, AMS METEOROLOGIST: Fresh water. And you know, guys, it's just hard to believe that a flood that originated a thousand miles away is impacting an area really that's been in a drought. Hurricanes, last year's oil spill and now this. Oystermen certainly feel like they're going to take it on the chin again.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: We're going to pull some oysters up right off the reef. Here we go.

MARCIANO (voice-over): Greg (INAUDIBLE) family has been farming oysters here for more than a hundred years.

UNIDENTIFIED MALE: This is basically where the fresh and the saltwater meet.

MARCIANO: Perfect for oysters, but get too much fresh water like during a historic flood and the oysters die.

UNIDENTIFIED MALE: Being out on the water, there's a lot of unexpected. And it's very, very similar to harvesting any crop, out on the -- in the land or out on the water so --

MARCIANO (on camera): But it's been a lot of back-to-back, Katrina, Gustav, oil spill. Now this flood.

UNIDENTIFIED MALE: Ike.

MARCIANO: Ike.

UNIDENTIFIED MALE: You missed that one.

MARCIANO: How do you survive this one? It's been tough for you guys.

UNIDENTIFIED MALE: Yes. We just have -- you know what? There's a little bit of pirate in each one of us. And I think we just kind of -- you just figure you wade through it.

MARCIANO (voice-over): We tie up to a working boat to check on his crop.

UNIDENTIFIED MALE: Come on up, Rob dog.

UNIDENTIFIED MALE: Once everything is on the table, these guys go to town and they start working the oysters.

MARCIANO: They're going to town all right. Look at this harvest so far and we're not even mid-morning. What kind of take do we have on a day like this?

UNIDENTIFIED MALE: Probably end up with about 50 sacks which is about 5,000 pounds.

UNIDENTIFIED MALE: These break apart.

MARCIANO: Time to sample the product.

UNIDENTIFIED MALE: Stick your lips on the meat and slurp. And get all the yummy goodness.

MARCIANO: Wow. Somebody shut the floodgates! Save the oysters! Freshwater does not affect the taste, which keeps him motivated to get through what will be another tough year.

UNIDENTIFIED MALE: You still have that flavor in your mouth of that oyster and you can taste it. And that's what keeps me going in this business is what we just did.

(END VIDEOTAPE)

MARCIANO: That's the tastiest lunch I've had in a while, I can tell you that. The river, Mississippi River flowing at 45 feet here, across the river from Baton Rouge and Port Allen, the lock has been closed for two days creating a shortcut between here and the Gulf of Mexico by about 120 miles.

Every day that's closed to commercial shipping and it costs commerce about a million dollars and they estimate that the oyster crop next year will be down about 100 million pounds because fresh water -- too much fresh water like taking too much aspirin to thin your blood, eventually it will kill you.

It does not affect the taste of the oysters, I could tell you that and those oysters are definitely safe to eat. But it limits the numbers that they can harvest. And that will happen for the second year in a row. Guys -- VELSHI: Rob, thanks for that. Rob Marciano in Louisiana for us. Let me bring you up to speed with some of our top stories.

The head of the International Monetary Fund resigned last night right before his bail hearing, which is happening today. There he is. Dominique Strauss-Kahn accused of sexually assaulting a hotel maid in New York City. In a statement, he said he needed to devote all of his energy to proving his innocence.

And President Obama will give a major address this morning on the future of U.S. policy in the Middle East and the recent uprisings and political change in the Arab world. He's expected to defend new sanctions against Syria for its violent crackdown on anti-government protesters.

CHETRY: Our next guest is an expert on the Middle East. Daniel Kurtzer, the former U.S. ambassador to Israel and Egypt and in fact, just back from a trip to Egypt.

He joins us from Princeton, New Jersey this morning. Mr. Ambassador, great to have you with us.

DANIEL KURTZER, FORMER U.S. AMBASSADOR TO EGYPT: Hi. Good morning, Kiran.

CHETRY: So does have a little bit of a challenge, the president, especially when it comes to articulating the U.S. view on the Arab spring. What are you looking to hear in his speech this morning?

KURTZER: Well, he's got to hit three home runs today. Number one, the region is waiting to hear his views about what the U.S. will do both in terms of political support and, more importantly, in terms of financial support to try to bolster the democratic revolutions in Egypt and Tunisia.

Second, the region's going to want to hear why it is that we've got a NATO-led bombing campaign in Libya, but only unilateral sanctions so far in Syria. What's the difference between these situations? And third, there's a great interest in what the president will say about the Middle East peace process. The president met this week with King Abdullah of Jordan.

We'll meet tomorrow with Prime Minister Netanyahu of Israel. And there's an expectation that he's going to say something that spurs these negotiations to resume.

CHETRY: So let's take piece by piece some of what you talked about first when it comes to support of the Arab spring. He is expected to announce a $2 billion multiyear economic aid pack just for Egypt. Also some aid to Tunisia as well. At the same time, are we comfortable with delivering that money if, let's say, the Muslim Brotherhood gets majority in parliament. How do we deal with democracies that we may not necessarily like?

KURTZER: Well, I think that's the challenge for the president. My guess is that he will lay out a policy approach that says that we're looking for free, fair and democratic elections within a system in which basic rights are protected.

If that's the case, I think we would accept the elections even if it includes the election of some Muslim brothers to parliament. The United States, I think, hopes that other parties emerge so that the Brotherhood does not become a majority, but I don't think the president will hold our aid contingent upon the Brotherhood being kept out of the political scene.

CHETRY: You also had a changing landscape that the Middle East peace negotiations appear to hit a road block. You have the resignation of George Mitchell who was supposed to be helping this as the special envoy helping this along. How much does that hurt?

KURTZER: Well, I think it was a setback for the president who has devoted considerable time and attention during the past two years to try to get these parties back to the negotiating table. And the resignation of his chief negotiator sent a signal that perhaps we had reached the end of the line.

And that's why the speech today has got to set a new course. The president is likely to lay out some ideas for bringing the two sides back to the table although I doubt that he will lay out a full plan or a full set of parameters. I think we're going to try to find some comfort zone between that.

CHETRY: The other question, he's expected to talk today about the killing of Bin Laden, but how does it change things especially in Afghanistan?

I mean, we've seen a growing chorus, the calls getting louder and louder for us to bring the troops home, U.S. troops in Afghanistan, faster than planned. What does he say today about that?

KURTZER: Well, I think he needs to explain to the American people why it is that we need to be there for a while and maintain the timetable. There will be political pressures back here to accelerate that timetable.

But I think the president will want to make sure that we don't leave behind a situation that may in fact require us to go back in at some point. So it's a delicate balance that he's got to achieve in dealing with the aftermath of Bin Laden's death.

CHETRY: Certainly a lot of challenges as you laid out. We'll be hearing from him at 11:30 Eastern time this morning. We'll, of course, carry it live. Ambassador Daniel Kurtzer. Thanks so much for joining us. Great to talk to you this morning. KURTZER: Thanks, Kiran.

VELSHI: OK, coming up, ahead on AMERICAN MORNING. You've been talking about this. "Time" magazine is talking about a brand new cover story. It asks why powerful men act like pigs. One of the questions we're having is it about power, is it about access, is it about just men? The executive editor of "Time" is joining us to talk about it.

ROMANS: And stop buying that fancy coffee every morning. Our question of the day, what do you waste money on and why? You can e- mail us, tweet us, go to our blog or find us on Facebook. Your comments, coming up. Fancy coffee fine, if it makes you better at work.

VELSHI: There you go.

ROMANS: But I don't know, what could you give up?

VELSHI: It's 37 minutes after the hour.

(COMMERCIAL BREAK)

ROMANS: Welcome back to the Most News in the Morning. It's the sex scandal everyone is talking about today. Arnold Schwarzenegger's other woman, his housekeeper and their secret son.

VELSHI: It's just the most recent example of powerful men behaving badly. Our corporate cousin "Time" magazine made that a cover today. Take a look, "Sex. Lies. Arrogance. What Makes Powerful Men Act Like Pigs."

And when you get close to it, there's an asterisk, apologizing to the pig. Joining us now is the executive editor of "Time," Nancy Gibbs.

Nancy, two major high profile incidents across the country this week, but very, very different incidents. In New York, Dominique Strauss- Kahn, the head of the IMF accused of attempted rape.

In California, Arnold Schwarzenegger, the disclosure that he fathered a child with a woman not his wife. Two different cases. How did you come around to deciding that this was the topic everybody is talking about and that you can do more on it?

NANCY GIBBS, EXECUTIVE EDITOR OF TIME MAGAZINE: I think it's important that we make the distinction. Only one of these men is currently sitting in a jail cell. What Strauss-Kahn was accused of is a violent crime.

But what they have in common is not just that they have to do is sex, but more importantly they have an abuse of power. In Strauss-Kahn's case an extreme and violent abuse of power in attacking a chambermaid.

But in Arnold's case, I think what concerns people was apart from this being a private tragedy for his family, this was an employee of his who was economically dependent on him. And that theme is one of the ones that have been most disturbing in many of these cases that have run through our political debate for years.

CHETRY: Former President Clinton as well, it was an intern that had people sort of wondering about that inequality when it comes to stature.

And you actually cite a study that says a higher a man rose in business hierarchy, the more likely they were to consider or commit adultery. That's astounding.

GIBBS: It is astounding. I would say it's true of men and women.

CHETRY: But we don't hear these cases about women. We struggle to find cases like this about women.

GIBBS: Partly this is -- partly this is just the numbers. There are many fewer women in the highest levels either in politics or in private industry. So you tend to have many more men who have the opportunity.

What social scientists say is with opportunity comes inclination to act on it. That the muscles of monogamy that ordinary men develop of self-denial and self-restraint weaken when sex is constantly available to you.

ROMANS: I want to make an important point about the difference between those two cases as well. Arnold Schwarzenegger admitted this and Dominique Strauss-Kahn is saying that he did not do it.

So, you know, we better make that distinction as well. He is still innocent until proven guilty. But as a case studied for this subject, it shows you that there's a different way that these men in power think than the rest of us.

Is it partially because you have to be a risk taker to get to these elevated levels and this is a very big risk. Both of these were very big risks. You say why would somebody so smart do something so stupid?

GIBBS: We always ask that. So one theory is that willingness to take risk is part of what often accounts for success. But also with success comes a kind of confidence and with that confidence comes a sense of sexual entitlements.

CHETRY: When you say all men were pigs and that was tough one in the front of your --

GIBBS: No, I know, but --

CHETRY: Right. You said what makes powerful men act like pigs. There are a lot of guys who say, you know what, I take offense to that because I do the right thing. Look at our current president, look at our prior president. Regardless of what you think about them politically, these were people that were the most, perhaps, powerful men in the world and there's never been a whiff of anything having to do with infidelity.

GIBBS: I think, you know, these men are just as appalled at the misconduct of other men as women are. I don't think that women are any more sort of righteous about it.

VELSHI: You tackled something right at the top. You said one of the things that motivated you was this question of power, inequality men in a higher position of the women.

But haven't we worked for decades to eliminate the idea that people can only partner with, sleep with or marry people in their own socioeconomic position.

GIBBS: Absolutely. Absolutely except, you know, when you have, like the case of John Ensign where if he's accused of having an affair with a woman not only worked for him, but whose husband was his chief of staff.

In that case, both people are economically dependent - of course, people should be able to consensually relate to anyone else. The problem is does it compromise the very idea of consent if one person works for another, if it's a professor with a student.

VELSHI: And that's why companies rules about this sort of thing.

CHETRY: The other fascinating thing, though, is they're not running to divorce themselves from their current situation, you know, in the case of Arnold Schwarzenegger and Maria Shriver, a power couple where she had as much power and prestige, perhaps even more, as he did. He wasn't trying to get out of that to be with the maid. You know, so it's different. It's a side thing, it's not what they're choosing as their life.

GIBBS: And I think one of the things about that case, also, that bothers people is that at a crucial moment in his political career when more than a dozen women had come forward to accuse him of being an aggressive, harassing character, that she was the one who came forward as a character witness and Maria Shriver has a strong reputation as a feminist and she testified to his good conduct and that was very persuasive to people.

VELSHI: Nancy, good to see you. Thanks very much. It's a great issue. Nancy Gibbs, executive editor at "TIME" magazine.

ROMANS: And no offense to the pigs. No pigs were harmed in the writing of this article.

CHETRY: Or the good guys.

ROMANS: That's right. That's right.

CHETRY: Thanks, Nancy. ROMANS: We all have them and they are bad money habits. Cheap things you don't really need and boy they really add up.

CHETRY: Yes. If you stop to think about it in a week how much do you spend on things, like ATM fees on, you know, your coffee, your mocha latte extra hot. Anyway, it's our question of the day this morning.

What do you waste your money on and why?

And we asked our people and they wrote to us.

Sarah Ahmed from Facebook writes, "Coffee and cocktails. Gets me every time."

VELSHI: Coffee's a big one on the list.

ROMANS: Yes. And you need cocktails after too much coffee and you need coffee after too much cocktails.

CHETRY: How about this one? You think you're saving money.

"I waste money on Groupons. I know I'm saving money, but am I?"

VELSHI: I have three sitting in my wallet that are not going to get used before they expire. So, it's a good deal if you use them.

I got a couple here.

One on Twitter writes, "Video games. But is it really wasted? It gives me countless hours of entertainment."

That's an interesting point.

And Michelle writes on our blog, "My husband was wasting $15 to $20 a week on ATMs. I haven't paid an ATM fee in over three years. Every time I go to any store that allows me to get cash back when I pay, I get an extra $20 to $50 in cash. I hoard it at home for him to grab when he needs it. It really helps when he travels. The ATMs at the airport are the worst.

That's a good one.

ROMANS: Yes, OK.

Loree on the blog says, "One of the most wasteful -- movie snacks, overpriced popcorn, candy and sodas, what a waste. Going out to eat. I used to eat lunch out every day. Wow, thousands wasted."

And Sarah on Facebook says, "ITunes. I spend way too much on music and movies on iTunes."

You know what, a lot of people say this. It's so easy to just click and let it pile up.

CHETRY: Exactly. VELSHI: I hear you. Keep them coming. Send us an e-mail, a tweet. Tell us on Facebook. We're going to read more of your thoughts. Some really creative ones, a little bit later.

AMERICAN MORNING coming right back. It's 47 minutes after the hour.

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VELSHI: A lot going on this morning. Here's what you need to know to start your day.

The jailed chief of the International Monetary Fund resigns. Dominique Strauss-Kahn is accused of assaulting a hotel maid in New York City maid last weekend. A bail hearing set for later today.

An investigation under way into the fiery crash of a military jet in California. The Boeing 707 exploded into flames at the end of a runway at the Point Magu Air Naval Station. The three crew members are OK.

Police out in full force at Dodger Stadium last night. Officers on foot, horseback, bikes and Segways. The San Francisco Giants were in town for the first time since the vicious attack on a fan, Brian Stow, on opening day.

A security warning for Android users. A flaw in the smartphones allows hackers to access your calendars, photos and contacts through Wi-Fi networks. Google says they're working on a fix.

And you may remember that wacky hat from the royal wedding? Princess Beatrice of York wore the pretzel like headpiece. The hat now being auctioned on eBay has reached $30,000.

Tiger Woods losing his spot among the top 10 golfers in the world, the title he has held for 13 years. But a small comfort. Forbes says he's still the number one sports celebrity.

You're caught up on the day's headlines. AMERICAN MORNING is back in 60 seconds.

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VELSHI: Time for your AM House Call.

The FDA is pulling the controversial diabetes drug Avandia from store shelves because of heart attack risks. Beginning in November, Avandia it will only be available by mail order at select pharmacies and patients must be informed of its risks. Studies have found the drug increases the chance of heart attack or stroke by nearly 40 percent.

CHETRY: Well, you know, there's nothing more important than your kids' health and when it comes to giving them medicine, a lot of people say sometimes it feels like a guessing game and it shouldn't be that way, which is why two FDA advisory panels want some dosing information for toddlers and babies to be easier to be understand, especially on medicines containing Tylenol or acetaminophen. ROMANS: Our senior medical correspondent Elizabeth Cohen joins us now from Atlanta.

Elizabeth, what does -- why is the FDA so concerned about something like children's Tylenol?

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: All right. You know what, I bet you ladies have probably been in this situation.

It's 3:00 in the morning, your one-year-old has a fever and you go and reach for the bottle of Tylenol or acetaminophen and you go -- well, if you're over 40 you go like this, and you go, OK, under two years of age, dosage, ask a doctor. Ask a doctor? It's 3:00 in the morning and it is so incredibly unhelpful and pediatricians and parents have been complaining for years.

VELSHI: What are they going to do about it? Are they taking out the ask your doctor? Are they actually going to tell you what you should do?

COHEN: Yes. They are actually going to tell you what dosage you should give your child. I mean, this is so simple. You would think they should have done this years ago. But they are finally -- this advisory committee is saying that the FDA should put a real dosage there, because it's very hard to be an empowered patient at 3:00 in the morning.

ROMANS: For Kiran and I, I know Kiran -- I'm sure you, too, is it the age or is it the weight of a child?

CHETRY: The weight?

ROMANS: Because that's -- this is something you go through all the time with this medicine.

COHEN: Right, exactly. And, you know what, ladies, that's a really smart question and the answer is, it's much more the weight. The weight is what you want to pay attention to. You can have a huge three-year-old who's more like a five-year-old or a little three-year- old who's more like a two-year-old. The weight is what's important.

VELSHI: How much of an issue is this, Elizabeth, if you got it kind of wrong?

COHEN: You know what, it is a big issue. I mean, if you're wrong by a little bit that's not such a -- that's not a gigantic issue. But if you're wrong by quite a bit that's a problem because this can be toxic to the liver. Acetaminophen can cause real problems and sadly, some parents have overdosed their children. So, this is a real problem.

CHETRY: And, you know, acetaminophen, they're talking about this now again, because of the concern with the liver. But, you know, this can happen. There was talk and I remember you covering this, as well, about cold medicine and overdosing on the cold medicine and everything along those lines. I also find it interesting, why do they make the dosing charts -- I mean, they're clear. So you can't -- the numbers are clear and the dosing chart is clear.

ROMANS: You can't read it.

CHETRY: So you're sitting there trying to figure out, is this one teaspoon, is this not? I mean, I imagine it could be a lot easier.

COHEN: Right. It could be easier and that's another thing that the FDA, these committees are talking about is that sometimes the instructions will be in, say, milliliters. Give your child two milliliters. But then the dosing cup is in teaspoons, which really doesn't make any sense at all. Or it'll say give your child 2.5 milliliters but there's no 2.5 marking. So they really need to get themselves together and do a better job with the markings and they really are moving towards that.

ROMANS: My pediatrician's office -- my pediatrician, they give you the little cup and they put the name of the one kid on it, they take a Sharpie. They write the line where you're supposed to fill. They write the other kids name on it and those are the two cups that sit on the kitchen counter so you can't screw it up, you know?

CHETRY: That's smart, except at 3:00 in the morning. I would never be able to find those two cups anyway.

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ROMANS: It could be so much easier. You're right. So we'll see what the FDA comes up with.

Thanks, Elizabeth.

COHEN: Thanks.

VELSHI: All right. Your top stories are minutes away. We're going on the job hunt putting America back to work. We're going to try and figure out how to make that work when we come back.

It's 56 minutes after the hour.

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