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IN THE ARENA

Debt Deal Passed; Man Jumps White House Fence; FAA Shutdown Leaves Thousands out of Work

Aired August 2, 2011 - 20:00   ET

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


DON LEMON, CNN ANCHOR: Good evening, everyone. I'm Don Lemon. Welcome to the program.

That beautiful building you're looking at is deserted tonight. You can hear a pin drop inside. All the senators and congressmen have gone home after finally passing the debt deal.

And that big mess they just put us through, that was supposed to bolster the markets, right, solve our -- solve our economic problems? Not so much.

I want you to take a look at this. That jagged line is as bad as it looks. All day long the Dow headed south until it finally closed down an ugly 266 points. On Wall Street, 4:00 couldn't come fast enough.

We've had eight straight days of losses, first time that's happened since the global financial meltdown in 2008.

It is a scary picture, and we're going to walk you through it all in just a moment. But first a look at the other stories that we're drilling down on tonight.

(BEGIN VIDEO CLIP)

LEMON: It's Ramadan in Syria. Instead of peace, more bloodshed. Graphic new images of bodies dumped like garbage as the death toll rises. Can the world look the other way?

And Japan's endless disaster. Radiation levels at their highest since the earthquake and tsunami in March. You won't believe what they're testing now.

Then, with grim news on Wall Street, everybody is talking about transparency. But these folks did something about it, striptease for social protest. The bears rule in more ways than one.

(END OF VIDEO CLIP)

LEMON: Now back to the bad news on Wall Street. We finally get a debt deal and the market tanks. But at least one fear was alleviated.

Moody's, one of the leading ratings agencies, decided not to downgrade America's credit. We're still AAA, folks, but, well, not with every credit agency. I'm going to explain.

Sean Egan is president of Egan Jones Ratings. His company has downgraded the U.S. rating to AA and he says everyone else should get on board. Sean Egan joins me now.

Sean, that is troubling. We're going to get to that in just a moment. But first let's talk about the stock market today. Shouldn't the debt deal have helped to pump it up?

SEAN EGAN, PRESIDENT, EGAN JONES RATINGS: No, it wasn't a panacea because there's some other factors that are weighing on the market. One thing, probably the overriding concern, is growth. Growth was supposed to be or should be relatively robust when we're coming out of recession.

It's far from that. First quarter growth was 0.4 percent, which is essentially no growth. Then the second quarter is 1.3 percent, and that might be revised downward. There's some other concerns such as in Europe. Spending was weak. Then there's, lastly, the concern about how to fix our problems.

I refer to it as a clash of ideologies in terms of whether or not we should cut debt quickly, which is what the Tea Party is looking to do, versus the neo-Keynesians which would prefer that there'd be some stimulus.

LEMON: All right. So two different philosophies. But here's the question. So what happened today on Wall Street, is it solely because of the debt deal or are there other factors at play here?

EGAN: Could you repeat the question please?

LEMON: I said, are there other factors at play here? Because it's not just, I would imagine, what happened on Wall Street today, what happened with the debt deal that affected Wall Street today. There are other things at play here, there are other factors.

EGAN: Yes, the major factor is whether or not we're going to get growth going again. The debt certainly does weigh on the country. In fact, we're approaching 100 percent debt to GDP, which in general causes about 1 percent decline in the overall growth.

But the concern is that the growth isn't going to be sufficient to reduce unemployment and a lot of institutional investors are concerned that they're not going to get the value from the stocks and therefore have pulled back and have been pulling back over the last week and a half.

LEMON: I guess what I'm asking you here, Sean, is we're not just in this alone. The economy -- obviously the American economy is in trouble, but also the global economy as well. Does that factor into this equation?

EGAN: Don, in fact, the EU, which happens to be the biggest buying bloc globally, is in tough shape. You see a lot of the periphery countries, Greece, Ireland and Portugal, having difficulties. Now it's extending to Spain and Italy whereby their cost of funds has risen to that critical 6 percent level.

Both those economies are not growing and when you're having to pay 6 percent, it's a huge drag on the economy, and both Italy and Spain are much, much bigger and much more difficult to bail out than relatively small Greece or Ireland.

LEMON: All right. Thanks for that explanation. So let's get to the credit rating now, Sean. You're a ratings agency, already downgraded the U.S. to AA from AAA. So I want to visualize this. There are only 17 countries now with a AAA rating, and among them are Canada, Australia and Germany.

If we are downgraded, all right, to a AA, we're not in bad company, Sean. Countries in that group include Japan, China and Saudi Arabia. So there are still some very sound countries with AA ratings. So what does that mean really for people at home, the people who are watching this program? What does that mean?

EGAN: You know from one perspective -- and by the way, we cut it -- we put our rating on negative watch as of March 1st. We cut it to AA plus as of July 16th.

From one perspective it's not a huge deal. That it's only cutting it one notch. It's still relatively high rating. From another perspective, and that is more or less crossing the Rubicon, it's huge.

The U.S. has had a AAA rating by most of the rating firms since 1916 or so. And therefore, the fact that we took the action -- by the way, we are paid solely by institutional investors, we're not paid by issuers. The fact that we took it is an indication that the credit quality isn't quite at the pinnacle. It's still very strong but it's not at the pinnacle that a lot of people would like to see.

LEMON: All right. So you stand by your downgrade. And I believe you say it's only a matter of time before everyone else will follow suit. So then why should we have stock in the people who rate our credit, if you are all going to have different ratings?

EGAN: Institutional investors look to rating firms to assess credit quality. We were fortunately named as one of the top firms warning about the credit crisis, in fact, number one by "Fortune" magazine.

And so institutional investors want to allocate their capital, if they see some difficulties, they lighten up on positions and they use groups like us to help figure out what investment decisions to make.

The U.S. remains very strong. What we're much more worried about, actually, is Europe because Europe doesn't have the so-called fire brigade to address the problems quickly.

LEMON: OK. All right. I don't want to get too in the weeds, but this is -- this is a very serious question here and it's just in to CNN. We're getting word that the Tokyo stock market just opened down 1.5 percent. Is that of concern to you? What does that say to you?

EGAN: It says that there's a lot of uncertainty globally, that people don't -- they're worried. They -- there isn't any clear path to get out of the problems that they're in. And by the way, Japan's debt to GDP is near 200 percent.

This is a highly unusual time when a lot of heretofore fairly strong countries are having difficulty in terms of their credit quality. Basically the problems -- the credit problems of a lot of these countries with their financial institutions was taken over by the governments and now the government's debt to GDP has grown quite a bit and they're not struggling with it but they're having to deal with it. And it's going to take time to correct the problems.

LEMON: Sean Egan, thank you very much. We appreciate you tonight.

EGAN: Thank you.

LEMON: Up next, a Democratic congressman who said he'd vote for the debt ceiling bill. That is until he read the fine print. We'll have that story in just a moment.

But first, one more comment on the debt deal from, of all people, Vladimir Putin. The Russian prime minister says Americans are -- get this -- parasites because we don't pay our bills. He says we live beyond our means and the rest of the world suffers for it.

As I recall, Russia has been known to have an economic crisis or two. But lately things are looking up for them. Their market hit a three-month high today.

We'll be right back after this.

(COMMERCIAL BREAK)

LEMON: Well, after weeks of wrangling in Washington, President Obama today signed a deal to raise the debt ceiling. Didn't look too happy about it, though. Of course, getting to this deal was not a cakewalk for the president, to say the very least. And my next guest was a yes vote on the debt deal before, but at the 11th hour, he suddenly became a no.

And he happens to be the top Democrat on the House Financial Services Committee. Congressman Barney Frank. I spoke to him earlier this evening.

(BEGIN VIDEOTAPE)

LEMON: Congressman Frank, yesterday morning you endorsed this deal. Now granted, you weren't 100 percent on board, but you did endorse it on national television. I want you to listen to this.

(BEGIN VIDEO CLIP) REP. BARNEY FRANK (D), HOUSE FINANCIAL SERVICES COMMITTEE: Every dollar spent in Afghanistan, every dollar spent in Iraq is going to come out of highway construction and health care and education and local police and fire so that I found attractive.

More than that, though, I think there was this sense of -- you know, one of my favorite philosophers from the 20th century was the great Henney Youngman. And he had one very great line. How's your wife? Compared to what? And I think that's the -- that's the central maxim that is driving people.

(END OF VIDEO CLIP)

LEMON: All right. So you go from quoting Henney Youngman, it appears to be on a positive note there. Yet when it came time to vote last night, you voted no. Why the change of heart, Congressman?

FRANK: Because what you just quoted me as saying turned out to be inaccurate. I had been given bad information. Actually, I had heard a description and I should have realized you've got to actually read the bill.

LEMON: Yes.

FRANK: I was told that Iraq -- in fact, here's the deal. On Saturday I enthusiastically voted for Harry Reid's plan because Senator Reid said he was going to save $1 trillion by winding down the wars in Iraq and Afghanistan. And that money would have been a large part of the savings.

When I got to my caucus on Monday, my colleague Mike Capuano would (INAUDIBLE) this, and some others, Dennis Kucinich, and I saw the actual language. It hadn't been available to me when I spoke in the morning. And it explicitly exempted spending in Iraq and Afghanistan from any cap.

So what I said, namely, that under the plan I thought I was going to be voting for, money for Iraq and Afghanistan would be competing with others. There's now --

LEMON: What you thought was there was not there.

FRANK: No. Exactly -- it was exactly opposite of what I thought was there.

LEMON: OK. So listen. So you took the time to read it. Nancy Pelosi said on Sunday night she wasn't sure, she wanted to read the bill before she supported it. She came out and supported it. But do you think your colleagues actually read the bill?

FRANK: I think that a large number of people this time read if not the whole thing, the most significant parts of it. This was a very important issue, and yes, I do -- let me put it this way. By the time people voted I do not think there were any pieces of it where people were under the misimpression I was under Monday. It wasn't available to me on Monday. It was obviously to the leader. But I think -- and that caucus, it was a very useful caucus. Joe Biden was there to his credit, and Jack Lew, the head of the Budget Office, and they answered a lot of questions. And people passed around sections. So I believe that this bill was frankly probably better understood when we voted on it than most.

LEMON: So -- listen, I have to ask you this. A veteran like Barney Frank who knows his way around Washington and through legislation, why would you endorse something that you hadn't read?

FRANK: The answer is this. As you said on Monday, I didn't absolutely say I was for it. I was giving an indication because I try to be open with people of my current thinking. And I was explicit as to what I had in mind. And when I learned later that it wasn't there, I changed my mind.

No harm came from my having said that at the time.

LEMON: OK.

FRANK: What happened was -- and at the caucus I specifically said to the members, you know what? I spoke for this on Saturday. It was a different bill. I thought it looked good, it didn't. So the answer was, I respond to people who ask me what I'm currently thinking. I made it very clear on Monday morning that I hadn't made a definite decision. And once I read the bill that was the answer.

LEMON: Let's talk about this committee of 12. What do you think of the idea of a committee to work this out? Because if -- you know if people will say, if you guys can work it out, how is a committee going to work it out?

FRANK: I don't think much of the idea. I don't like it. I am also in agreement of those who criticize it. I don't think it's the Democratic way. And again, it's one of the violations. You know the Republicans made all these promises when they were going to take over about how open they were going to be.

We were going to have 72 hours to read the bill. That's part of the confusion we had of what was in this bill. There was no Republican promise for procedure fairness that remains unbroken. And I think this kind of a super committee, it can't be amended up or down, I think that's a very bad idea.

LEMON: Do you want to be on the committee? Would you accept the job?

FRANK: No. I think that my own responsibilities, frankly, as chairman of the Financial Services Committee, ranking member now, wishful thinking, I have a Republican group in the House that's trying to dismantle financial reform, undermine the independence of a consumer bureau, re-deregulate derivatives and that's a major commitment of my time. So I'm going to have to keep working on that.

LEMON: There's a part of the country that's happy with what the Republicans have done, and especially the Tea Party members who they believe held Washington's feet to the fire when it comes to spending. But there's another part of the country who believes that those people, those same people, brought the country to the brink of default, as you did by voting no and that you're no different than a Tea Party member.

How do you respond to that?

FRANK: That is very silly. I voted twice to raise the debt limit. The change here was the people who took something that had been routine, like paying your bills, your mortgage, your credit card, for years from Ronald Reagan and even before and used it to hold people hostage.

So no, I don't think there is an equivalence here. And in fact, we had people that said, we're going to board up the government over this, I reject the notion that once people have threatened to do that, those of us who don't want to see it happen, should vote for anything.

That's the logic of that kind of analysis. But once these people are going to board it up, you should vote for anything. I think that's a great mistake.

LEMON: Thank you, Congressman.

FRANK: You're welcome.

(END VIDEOTAPE)

LEMON: Breaking news now here on CNN. Some drama playing out at the White House. Just a short time ago, a man breached the White House perimeter, jumping the fence onto the lawn. And you can see here, the man was quickly apprehended by White House security.

We're joined now by CNN's John King who was anchoring his show just before this incident began.

And John, I am told that he was approached by Secret Service officers with guns drawn before taking him into custody. What drama going on there?

JOHN KING, JOHN KING, USA HOST: It was high drama, Don. And we're still in lockout here at the White House because of the backpack left over. It's about 44 after the hour of 7:00 here in the East Coast.

This gentleman jumped the fence at the White House. He had a backpack with him. I covered this building for 8 1/2 years. And the Secret Service as always responded like that. The uniformed Secret Service coming out. Some of the CAT team, that's a more heavily armed team, coming out as well.

It is very rare, you see the Secret Service on the grounds sometimes with the guns drawn including the long automatic weapons. So they came out, it was a clear risk. The man was in custody within seconds. They shouted at him, lay down, don't move, hands above your head, what you would expect. He was taken into custody.

The interesting part now is what they brought out a bomb-sniffing dog to the bag and the dog had some kind of a reaction that gave the Secret Service some pause. So they pulled back and they put the building in lockdown. They asked us to leave the public grounds and to come inside.

There's a lot of equipment here including robotic equipment that can test things for bombs. We have no indication that's what it is. I want to be very, very clear about that.

We usually don't give these things any coverage, Don, because political stunts can happen, people trying to make a political statement, who want to be on television, jump the fence. Because we were on live television, from the White House, what had happened we did show it.

And again the Secret Service responded in a nanosecond. We're trying to get more information. There is indication of any threat, no indication that the president was at risk at any moment in time. But you did have somebody jump the fence at the White House.

There was a swift and a dramatic response from the Secret Service. The backpack is still on the grounds. I'm inside now so I can't see from the outside as to how those tests are proceeding. But it's a routine protocol here at the White House. This happens sometimes. But of course it's not routine when you watch it -- Don.

LEMON: Where are you now? Are you in the briefing room now?

KING: Inside the briefing room. We were asked to come in here. Again that's the protocol to get everybody out.

LEMON: OK.

KING: Just in case something is out there.

LEMON: Do we -- where was the president at the time? Do we know?

KING: I do not know the answer to that question. He was in the building earlier today. I do know that. I have no indication of whether he's out of the building or not. I hate to tell but I just -- I don't know the answer.

LEMON: Are you getting any indication that this was possibly more than a political stunt? Because as we look at this, you said there was a backpack, it was thrown over the fence of the North Lawn, and then of course you guys were on lockdown. Secret Service approached him with guns drawn.

Any idea if this is possibly more than just a political --

KING: No. I want to be very careful. Again, I covered this building for 8 1/2 years. And you have people from time to time who would jump the fence. Some people do it to streak, some people do it for political statements, some people do it because their friends have dared them to do it. Some of them do it essentially to get on live television just like people who jumped out of the stands on a sporting event. And that's why you never see it during a sporting event.

So we're always reluctant to show it. Because we were broadcasting live here, we obviously unfolded it. You could hear the sirens and you could see people playing it out. So we did cover it.

I was here once when a man tried to fly a plane into the building. I was here once when there was gunshots through the windows of this briefing room. It is very hard to say, and in 99 out of 100 cases it turns out to be a stupid stunt by somebody who decided to jump the White House gate.

We're trying to get more information from the Secret Service.

Again, Don, to watch their reaction should give not only the president a great sense of comfort but anybody in America watching. They reacted in a nanosecond, jumped out. This guy is now being questioned and we'll waiting to find out what's in that backpack.

LEMON: And no indication of who this guy is, right?

KING: Nothing at all. We were -- it was an African-American gentleman. We saw him being taken into custody. That's all we know. You have the video. Our photojournalists here, by the way, did a spectacular job as this played out. You have the video, you have the video of the backpack, and I believe we have pretty good video of the dog coming over to the backpack.

And I was watching because I've seen this play out before. The dog had a reaction that just gave those -- the handlers enough pause to say, you know what? Let's leave this to the next level, which is normally either one of the robots or they come out with some other technical equipment to check it out.

LEMON: All right. CNN's John King, the video that you were -- exactly what you were talking about is playing out on the video that we just had up.

And again, John -- as John said here, we want to reiterate, we don't know what's behind this. And he says sometimes these things happen, and usually it's just a political stunt or maybe a disturbed person and everything is OK.

But again, a man now breaching the perimeter there at the White House. Our John King moved from outside to inside in the briefing room as he was anchoring his show.

John King, thank you very much. We appreciate it. If something happens, we'll get back to you.

Just ahead here on CNN, in Washington again, we're going to go a budget battle, you may not have heard of this one. A showdown over FAA funding leaves thousands of aviation workers without a job and it's casting taxpayers, you, tens of millions of dollars every single day. We'll tell you why.

(COMMERCIAL BREAK)

LEMON: If you're mad at Congress for how it handled the debt deal, and many Americans are, wait until you hear this one. They've now gone on their summer vacations but what they left behind is thousands of federal employees who are suddenly out of work.

It's yet another congressional standoff. This time over the funding for the FAA, some 4,000 aviation workers have been furloughed indefinitely. Air traffic controllers remain on duty but all airport construction has stopped, leaving thousands of other workers without paychecks and no taxes on airline tickets can be collected now.

The cost to the government an estimated $25 million a day. And by the time Congress reconvenes in September, that total could top $1.2 billion.

So joining me now from Washington with the very latest on this stalemate is a former FAA chief of staff Michael Goldfarb.

Thank you so much, Mr. Goldfarb, for joining us.

MICHAEL GOLDFARB, FORMER FAA CHIEF OF STAFF: My pleasure, Don. My pleasure.

LEMON: You know, this standoff already 10 days old. Why is funding the FAA suddenly a partisan issue here?

GOLDFARB: Well, it has been for the last 20 attempts to get a bill. I mean, they've had 20 short-term resolutions to keep the government going for six weeks or two months or three months. This is really, you know, watching the last few days and talking about trillions of dollars, this brings it home to the traveling public when real lives are affected.

We're not only talking about the 4,000 FAA employees, 70,000 construction workers, but more importantly aviation -- airport safety inspectors and the technicians that maintain all of our navaids and our radars, many of them have been furloughed. It's pretty disgraceful to be in this situation with a highly intense operational agency like the FAA.

LEMON: Mr. Goldfarb, House Republicans insist it's a question of government subsidies, specifically they want to cut off money to three rural airports in states with Democratic senators --

GOLDFARB: Right.

LEMON: -- including Nevada, the home of senator -- Senate majority leader Harry Reid, of course. The others are in Montana and West Virginia. So how much money -- how much money are we talking about here?

GOLDFARB: Well, to put it in perspective, you mentioned 25. I thought it was $30 million a day of lost revenues. The subsidies for these 13 rural airports which was part of the deal in 1978 when we deregulated we felt that the bigger airlines were not going to serve these places.

These places have been served through subsidies way before the current congressional members were representing them. We're talking about $16 million. So half of one day's loss is the entire amount that we're fighting over that's bringing an agency to jeopardy in its ability to serve the public.

LEMON: So before we talk about the paychecks here, you mentioned -- you said some of the technicians are out of work.

GOLDFARB: Right.

LEMON: Some other people are out of work.

GOLDFARB: Right.

LEMON: Is this becoming a safety issue?

GOLDFARB: It is a safety issue. You know, it's interesting. We say the essential employees, the air traffic controllers, they're on the jobs. But that's a term of art. I mean, essential includes technicians and people who go to the airfields and have to basically inspect runways and lightings.

Most of our accidents now are runway incursions and are on the airfield. So it is a safety issue. I think the administrator said yesterday that these people are working free. That they're paying their own way, they're funding their own travel, they're not going to necessarily get reimbursed until Congress reaches a deal and given you last week of what we watch. Who knows when that's going to be.

LEMON: Can I jump in? Air traffic controllers are still on duty and the FAA has repeatedly said, Mr. Goldfarb, that this is not a safety issue.

GOLDFARB: Right. There's no reason to scare the public to think it's unsafe to fly. Obviously all members of Congress are getting home to their districts safely. The men and women of the FAA are extraordinary in carrying out their safety mission.

But where it begins to bleed into safety is when we start looking at the impact of this furlough, when we get into September and when the general treasury, which is funded the air traffic controllers, not the ticket tax, that's how they're staying on the jobs, becomes strained.

So all of these things in aviation are safety issues, you know, we always say in accidents it's a combination of things from little maintenance of a runway to large kind of concerns of how a plane is controlled.

So in aviation this is all safety. It's incredible that this agency is being held hostage to this kind of ideological bickering at this stage. LEMON: Let's talk about how this affects the American public. If you're sitting at home and you're out of a job you understand. Thousands of workers, Mr. Goldfarb are out of work and without paychecks. It goes beyond just the 4,000 employees who have been furloughed. Who else is hurt by this shutdown?

GOLDFARB: The 70,000 construction workers at airfields around the country who are building new towers, new runways, and the like. They're affected and then it ripples through the economy and also affected all contractors who trying to transition from a radar-based old antiquated technology to a satellite based system to help deal with some of the delays.

All of those projects are on hold. Don, could you imagine Boeing or Airs Bus having to build a wing of an airplane and only having a six-month authorization. Aviation is a long lead item. It takes many years to do these projects and the last three years, FAA has had gone in fits and starts three months funding with no certainly. It's no way too run an agency here.

LEMON: We talked about the air traffic controllers and some of the air safety instructors. You said it affects some 70,000 jobs, but some of these people are actually working at their own expense? Explain that to me.

GOLDFARB: Yes. Well, I mean, that's the dedication of the FAA. I mean, they don't have to do that. They literally are furloughed. But nonetheless they are paying, going to travel.com, getting their tickets, funding their own salaries, and going in an inspecting these airfields.

So that speaks to the dedication of the federal worker. We've had much discussion about the size of government and government service. FAA is exemplary in that regard around the country with how they stick to their mission and step up to their service.

LEMON: Imagine going to work and not getting paid for it. I'm not sure a lot of people would do that. Listen, you know, we've been talking about the debt deal, the budget, economy here in the United States, lack of growth. All of that, jobs. The U.S. government is losing some $25 million a day in tax revenue. What's it going to take to break this impasse?

GOLDFARB: Well, you know, had the controllers been unable it to perform it would have been dealt with in one hour. The head of the Transportation Subcommittee and head of the Senate Committees, if they couldn't get back to where they wanted to go, believe me this deal would have been done.

There's some discussion that there's going to be a deal, but we've witnessed this before. Twenty short-term funding resolutions since 2007, Don, without any long-term authorization. So I think the jury is out on this in terms of when it will be solved.

LEMON: So the linchpin -- the agency of the group holding it all together are really the safety workers, the FAA safety workers. GOLDFARB: Right. It's not bureaucrats in Washington sitting behind desks pushing paper. It's people out in operational jobs, engineers, technicians, mechanics and safety inspectors. The 50,000 or 55,000 people of the FAA those are the real people being affected by this furlough.

LEMON: Amazing. Thank you, Michael Goldfarb, we appreciate you joining us tonight.

GOLDFARB: My pleasure.

LEMON: Up next, remember when they said radiation levels at Fukushima were no big deal? Well, this week they were measured at one million times the normal exposure, and now they're even testing the rice there.

(COMMERCIAL BREAK)

LEMON: As if it couldn't get any worse, more scary news out of Japan. It's been almost five months now since the tsunami damaged the Fukushima nuclear reactors, but after countless reassurances of safety, they've now detected lethal radiation levels in the plant, capable of killing a person within a few seconds of exposure. So what lies ahead?

We welcome back Michio Kaku author of the book, "Physics of the Future" and professor of Theoretical Physics at the city University of New York. That's where I went. Thank you very much for joining us. Is this radiation new, or have they been measuring the radiation wrong all along?

MICHIO KAKU, AUTHOR, "PHYSICS OF THE FUTURE": This is a leftover from the original accident. Remember we had multiple hydrogen gas explosions, which blew the roof off these reactors.

Well, as a consequence, it contaminated the ventilation shaft, but cleanup has been really slow. We haven't really even begun cleaning up the operation. It's not stable yet. Maybe next year it will be stable. That's where they're picking up the hot spots.

LEMON: What does it mean for the cleanup efforts? I mean, can workers even go in there now?

KAKU: A few seconds you're going to get several million times normal dose of radiation. It's a horrible death. Radiation burns over your body, hair falls out, multiple organ failure, nausea.

You don't want workers to go there at all. This is inevitably going to impede cleanup operation because there could be other hot spots.

LEMON: That means no, they he can't go in basically. They can't clean it up is what you're saying.

KAKU: They can't go into these areas however, they can still clean up the bulk of the damage to the reactors. But the ventilation shaft, you have to stay away, it's no-man's-land.

LEMON: I want to ask you this. Is this a job that a human has to do? Can some sort of robot possibly go in and do this work?

KAKU: You've seen the robots there. They're pathetic. They're almost like toys, computers on treads with little TV cameras with a joy stick controlling them. It's pretty sad.

LEMON: If they had more sophisticated ones then they could?

KAKU: We don't really have sophisticated robots that can make repairs and turn screwdrivers and stuff like that. That's beyond our capability.

LEMON: We're talking decades here?

KAKU: It was estimated 30 years to clean up. In other words, perhaps up to 50 years. Three Mile Island took 14 years to clean up. Chernobyl after 25 years is still not cleaned up. It's still melt into the ground.

LEMON: It's kind of hard it to keep track of where the radiation has been found. They've detected the radiation in the water, in the seafood, the beef and dairy. But now they're testing rice for radiation. So what does that mean for the food supply there?

KAKU: Rice and also tea leaves. We're talking about radiation sailing 200 miles from the site and Tokyo is only 150 miles from the site. Now, to be sure, radiation levels are still low.

Radiation levels at site, of course, means that the food has to be impounded. But it does mean that you have to exercise caution, and people are buying dosimeters and Geiger counters on their own. They don't trust the utility figures anymore.

LEMON: That's what I was going to ask you. Remember in the beginning when Tepco was giving out these numbers and the IAEA and people here in the United States were, like, we're not sure if they are giving us the right numbers. Can the people there feel they're sure?

KAKU: Yes, they feel you cannot trust utility. Either they were incompetent during the whole accident or they were lying during the whole accident.

If this is in the United States, we use our computer models. We knew what was happening more than what they were saying. We know they were lows balling, giving low estimates of the radiation damage because we could simulate the accident with our computers independently.

LEMON: With all the plants shutdown, what was it like for people for comfort there, for the average person? Were they able to get the electricity they needed, the air-conditioning or whatever they needed?

KAKU: People in Tokyo are melting right now. The government -- LEMON: Hot summer.

KAKU: Yes, the government had has said that everyone has a patriotic duty to reduce electricity consumption by 20 percent. Try that in the United States.

If everyone had to turn down their air conditioning by 20 percent, you'd have a revolt in this country, right? That's the kind of sacrifice that the Japanese people are undergoing right now, massive restructuring of the energy structure of the country.

LEMON: So we talked about Tepco. What about the government? Can the people of Japan trust what the government is saying about this?

KAKU: Well, even the government was given incorrect numbers by Tepco, and the government right now, by the way, is looking at alternatives, perhaps natural gas, perhaps fossil fuels, more conservation, none of the above look very attractive at all for the future.

LEMON: I don't think -- do they realize the damage and the repercussions of this? Because I'm wondering, maybe they didn't know, let's give them the benefit of the doubt, the readings, they were reading them wrong. Is there a lesson for Japan and for the United States, but for the rest of the world when it comes to this type of energy?

KAKU: There's a big lesson. President Obama right now has to make huge decisions about the future of nuclear energy in this country. Germany, Switzerland have thrown in the towel. No more nuclear power plants. They're going to be phased out. Italy is now tottering. So the question is, what will the United States do? That's going to be the big question because people are wondering about the next 10 years.

LEMON: Getting off of fossil fuels and all that. Of course, one of those things would be nuclear energy, correct?

KAKU: That's right. Remember that President Barack Obama canceled the nuclear waste dump in Yucca Mountain. So even if we build more nuclear power plants, there's no place to put the nuclear waste.

LEMON: Very interesting. I wish you'd stay after the show and let's talk for a couple of minutes. I love it. Thank you, Michio Kaku. Thank you for joining us tonight.

Up next here, the deadly violence in Syria. In a horrific war of words, the government and protesters are arguing about who's more brutal. That story is up next.

(COMMERCIAL BREAK)

LEMON: I want to warn you off the top the video you're about to see is very disturbing. The protests in Syria have become a lot more bloody in the past few days. One hundred thirty seven Syrians have been killed since Sunday, with almost 2,000 dead since the crackdown began.

The Syrian government has banned reporters so CNN's Arwa Damon is following the story from Beirut where she's looking into a disturbing video that surfaced on Youtube just today. I'm going to show the video to help understand this complicated story.

But a warning again, it's quite graphic and may not be appropriate for children. Let's look at it. According to antigovernment forces, we see bodies of protestors thrown from a bridge by fighters loyal to President Bashar Al Assad. They're shouting brother of a whore and dogs as the bodies hit the water.

You know, the Syrian government tells a very different version of this story. While CNN can't verify the authenticity of the video, based on Arwa's reporting it appears that the government's story may be closer to the truth. I spoke with Arwa moments ago.

(BEGIN VIDEOTAPE)

LEMON: Arwa, boy, this video we just saw, what do you know about this incident?

ARWA DAMON, CNN INTERNATIONAL CORRESPONDENT: Yes, Don, it is incredibly difficult to watch. And there are, again, as there always are when it comes to Syria competing narratives as to who was responsible for that atrocious act.

Now, the posting on Youtube says that it was government thugs that were tossing the bodies of residents of Hama into this river. But Syrian state television ran the same images. It was blaming these armed gangs saying that they had attacked and killed members of the Syrian security forces and that they were the ones who were responsible for this violence.

Now, two activists who we spoke to say they were doubtful about the video's authenticity. They were looking into it, but one prominent activist was laying the blame on this group that he identified as being a fundamentalist fringe element of Syrians who had actually fought in Iraq.

And they were the type of people that would take pleasure from these actions and from displaying these images, but this most certainly, no, we cannot independently verify any of these claims or the authenticity of this vide. This most certainly just an indication of how complex and how brutal the uprising in Syria has become.

LEMON: Arwa, listen, Ramadan started yesterday, and dozens of people have been killed since the holiday began. Does this mark a new phase in the government crackdown?

DAMON: Well, Don, what it is marking I think is a new and more complicated phase in the standoff between the opposition and the government. Ramadan most certainly a very holy month for Muslims, meant to be a time of peace, of reflection, of introspection and of compassion. Activists have been planning and in fact have been holding large- scale demonstrations every single night and they say that they're able to do so because they tend to use the mosques as points of gathering.

And every single night after the breaking of the fast there are nightly prayers. So activists heading out had into the streets after this. Many of them saying that the violence we saw that began on Sunday and then continued is the government's direct response because it is trying to undertake this last-ditch effort to try to regain control over areas. Send out a very, very severe violent warning and that is do not dare take to the streets.

LEMON: I have to ask you a real sense of fear there on the streets as you just mentioned, but is violence going to dampen the protests?

DAMON: You know, Don, when we look at what's happening in Syria from the outside, we automatically think about the sense of fear that people must be living in, and we do also hear about it. But coupled with that fear is an equally strong sense of defiance.

That is what the activists are telling us. So the more violent it becomes, the more hardened and resolved they become to then take to the streets because they say they have reached a point of no return.

They quite simply cannot allow Syria to go back to the way it was, and that is why they are literally willing to risk their lives to go out there. But there is also a growing realization that the path ahead is going to be an incredibly bloody one, especially as the situation escalates.

The government is in a very tricky position as well because it is trying to both play the violence and political cards. But doing this simultaneously, quite simply, is not working.

LEMON: Arwa Damon, thank you.

(END VIDEOTAPE)

LEMON: And from Arwa to Nadim Houry. He works with Human Rights Watch, researching crimes by the Syrian government against its own people. I spoke with him by Skype earlier tonight.

(BEGIN VIDEOTAPE)

LEMON: Nadim, welcome. Your organization alleges that the Assad regime has committed crimes against humanity. What do you base that on?

NADIM HOURY, HUMAN RIGHTS WATCH: You know, we've been documenting human rights violations in Syria since the beginning of the antigovernment protests. We've been interviewing people who have escaped Syria to neighboring countries.

We've spoken to more than 15 defectors. We've reviewed footage, spoken to innocents inside Syria and all of that information, when we look at it and particularly what happened in southern Syria, shows a pattern of committing gross human rights violence against civilian.

And shows that there is an intent to harm the civilian population be it by shooting on the protesters, be it through the systematic arbitrary arrest and torture of protesters, be it through holding people in detention, effectively disappearing them for long periods of time. All of that shows a picture of what's happening inside Syria today.

LEMON: The Assad government alleges that armed terrorist groups are responsible for the violence. Is there any truth to that allegation, Nadin?

HOURY: No. You know, the overwhelming movement after five months remains peaceful. Have there been incidents of protestors taking up arms or injuring security forces? Yes.

But those, according to our information, our research, have been isolated incidents, often committed by protestors who have either been injured by the security forces or have seen someone close to them injured and have decided to fight back.

But it is incredible that after five months this movement remains overwhelmingly peaceful in spite of the fact the Syrian security forces have deployed tanks, armed vehicles, all sorts of weapons against civilian population.

LEMON: Is this worse than -- I should say, has it escalated to a point where it hasn't been before? Because some of these reports of violence we're hearing about is just horrific. Is this worse than before?

HOURY: What is different today is that Hama is Syria's fourth largest city. So you have an army deploying and encircling a very large city, and you have these stakes that are deploying. Because it is closer to the center of Syria, you're getting more and more reports of what is happening there.

So is it actually worse? I would say it's in the same category of overwhelming use of power against unarmed protestors. And in terms of human rights violations it fits within the same pattern except that now we're seeing it after weeks and weeks and months and months of this.

LEMON: Nadin, is there anything that the international community can do to stop the violence? Sanctions sometimes hurt the least of these, as they say. So what can be done besides boots on the ground anything to stop the violence by the international community?

HOURY: Sure. The international community has a bunch of options. First, it's important to the Security Council to condemn the violence. To show Syria that it's actually beyond the veil, it has no friend at the Security Council.

Two, in addition to the sanctions it should push for access to independent observers, journalists, human rights activists, but also U.N.-mandated -- convention. Three, they need to exert more pressure on countries that are friends with Syria to tell Syria to stop killing immediately.

Countries not only Turkey, but also Arab countries, countries who are allies of the west, Egypt, Saudi Arabia and others who have so far remained silent despite the fact that more than 1,600 people have been killed in Syria so far.

LEMON: Nadin Houry, thank you.

HOURY: Thank you.

(END VIDEOTAPE)

(COMMERCIAL BREAK)

LEMON: We avoided default, but we're not in the clear, not by a long shot. While the world has been watching the market, guess what the street has been watching? Naked people. That's right, I said naked.

(BEGIN VIDEO CLIP)

LEMON (voice-over): Early Monday morning, some 50 people dressed like office workers and other Wall Street regulars started stripping down to their birthday suits. They said it was all in the name of -- you guessed it -- transparency.

The NYPD had another word for it - exposure and made three arrests. Part protest, part performance art, it was the brain child of a guy whose mother lost her life savings in the economic meltdown of 2008.

Zefrey Troel, the guy you see crawling on the ground was the creative genius behind it. He posted bail for everyone, but point made. In a city where nobody's shocked or at least pretends not to be, for a few brief moments, OK, briefless moments, the center of the financial universe had to stop and see itself exposed.

(END VIDEO CLIP)

LEMON: Boy, well, that's it for us tonight. Thanks for joining me "IN THE ARENA." Good night from New York. I'm Don Lemon. "PIERS MORGAN TONIGHT" starts right now.