Return to Transcripts main page

CNN Newsroom

President Bush Unveils Economic Stimulus Plan; Will South Carolina Anoint Republican Front-runner?

Aired January 18, 2008 - 15:00   ET


KYRA PHILLIPS, CNN ANCHOR: And it's the top of the hour.
We continue to follow a developing story out of Washington, D.C., an armed man in custody now with the U.S. Capitol Police. Apparently, this guy was just walking around with a shotgun out in the open on First Street Northeast between Union Station and the Upper Senate Park area. Police are trying to determine who he is and why he was there. They're interrogating him right now.

His car has also been located. It was near D Street just off of North Capitol Street and Louisiana Avenue, if you are familiar with that area. Police are inspecting his vehicle right now. Don't even have -- we don't have any other details at this point. We're still trying to figure out exactly -- apparently, he wasn't making any threats. He didn't say anything to anybody, but had been wandering around for a long period of time with this shotgun there on Capitol Hill. He is in police custody. We will let you know as we get more information.


And also in Washington today, President Bush says not to worry. He says, if Congress adopts his economic stimulus plan, the country will be just fine. And, so far -- check that out -- Wall Street seems unconvinced, the Dow down 108 points right now. The president wants $140 billion in temporary tax relief for consumers and businesses.


GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: This growth package must be temporary and take effect right away so we can get help to our economy when it needs it most. And this growth package must not include any tax increases. Specifically, this growth package should bolster both business investment and consumer spending, which are critical to economic growth.


LEMON: Democratic congressional leaders say they're willing to work with the president.

There's also reaction from some of the Democratic presidential candidates.

(BEGIN VIDEO CLIP) JOHN EDWARDS (D), PRESIDENTIAL CANDIDATE: We got to stimulate the economy. I came out with a stimulus proposal before anybody else did. And my proposal is that we build green infrastructure and create jobs in the process, that we modernize our unemployment insurance laws to cover more people, that we get help to the states directly, and that we aggressively attack the mortgage foreclosure crisis.

SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: George Bush's stimulus plan, you know, would leave out a whole bunch of hardworking Americans. Most of the Republican candidates don't even have a stimulus plan. They just want to extend the tax cuts to the wealthiest Americans, who don't need tax relief. They just want to continue the same economic policies that got us into this mess in the first place.


LEMON: A new poll in "Fortune" magazine shows three out of four Americans believe a recession is coming this year or is already here. "Fortune" and CNN are both owned by Time Warner.

Tomorrow's Republican primary in South Carolina could launch one of the White House hopefuls to front-runner status. John McCain hopes that will be him. He's spending most of primary eve on the Carolina coast. And our Dana Bash is standing by with us from Myrtle Beach.

Hi, Dana.


And you were talking about the economy. The economy is a huge issue today on the campaign trail, particularly here because South Carolina voters got news that the unemployment rate in this state today rose to 6.6 percent. That was from 5.9 percent. So, it was quite a spike, a continuous loss of jobs here, and that is definitely playing on the campaign trail, particularly among Republicans, as they are reacting to what the president announced, their own Republican president, in Washington.

It's quite interesting, because these Republican candidates are running as anti-Washington candidates. So, Mitt Romney, he's actually not here. He's in Nevada. He called it an important first step. And that's generally what Mike Huckabee said here in South Carolina.


MIKE HUCKABEE (R), PRESIDENTIAL CANDIDATE: The president today has launched a stimulus package. Now, I think he's on the right track. And one of the things is to make the tax cuts permanent. Give people some confidence that they're not going to go out there in the marketplace only to have the government reach deeper in their pockets. And that's a good short-term solution.


BASH: Now, you mentioned John McCain. John McCain obviously is somebody who might have to vote on this stimulus package if it comes before Congress. He's a United States senator. But his message today was it's an interesting first step, but he wants to make sure spending does not go up with it.


SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: I would love to work with Congress and the president, but -- and I believe that we can, and we need to. And, by the way, I still believe in the fundamental underpinnings of our economy as good and strong. And nothing is inevitable. Nothing in this world is inevitable. And, my friends, what we need to do, to start with, before we go any further, is stop the out-of-control spending.


BASH: Stop the out-of-control spending, that has been John McCain's mantra, and it continues to be his mantra and frankly other Republican candidates' mantra as they look at this stimulus package coming out of Washington and as they are trying to convince Republican voters here that they have the best plan for the economy and for fixing the economy. Pork-barrel spending is a big issue here in South Carolina. That's why you hear John McCain hitting it hard and other candidates as well -- Don.

LEMON: Dana Bash in Myrtle Beach -- thank you very much for that, Dana.


PHILLIPS: And you can stick with CNN for all the news that affects your financial security. Just go to for information on money, jobs, and the mortgage crisis.

LEMON: All right.

We have some new pictures into the CNN NEWSROOM. This is from our affiliate WUSA there in Washington, D.C. This is Capitol Police, as you can see here. They are telling us and telling our affiliate there that they have detained a man who was walking with a shotgun, all of this happening on First Street Northeast between Union Station and the Upper Senate Park.

They're trying to determine who he is and why he was there, but, again, these are the latest pictures coming in. The original response was to a suspicious vehicle located North Capitol and D Northwest. Street closures in that area all around. So, again, they are interviewing that man, trying to figure out exactly who he is, why he was there, why apparently he had weapons with him.

But, again, you can see police on the scene there trying to take care of the situation, this all happening in our nation's capital, and we're on top of it.

PHILLIPS: Mike Huckabee wants to get rid of the IRS and replace it with what he calls the FairTax. But is it really fair? And would it keep the government running? We're going to crunch the numbers.

LEMON: No two economic slumps are the same, but they all have something in common. Some people get rich.


UNIDENTIFIED MALE: Purchasing at least another six houses tonight.



LEMON: We will meet some folks who are willing the roll the dice on the housing market.

PHILLIPS: And enough gloom and doom. Larry King looks at possible upsides to economic uncertainty. You will want to stick around for that.


PHILLIPS: You know, Mike Huckabee gets a lot of attention on social issues, but the Baptist minister, former governor and Republican presidential contender is also making waves with his tax plan. He calls it the FairTax, and it would basically just get rid of the IRS. CNN's Jill Dougherty has been crunching the numbers. She joins us live from Washington.

And, you know, Jill, I can't tell you how many people have said to me, I am just going to vote for Mike Huckabee because I want to see exactly, if he has got the power to take down the IRS and what would happen. So, let's focus on that and explain how this would work, if indeed, he dismantled the IRS.

JILL DOUGHERTY, CNN INTERNATIONAL U.S. AFFAIRS EDITOR: Because it's not that simple. And that's part of it. Part of it -- the basic idea, Kyra, is that you would get rid of the IRS. You wouldn't have to file taxes. There would be no withholding. Corporate taxes would go away. All of that would be very simple at first glance.

Now, what would it be paid with? Where does the government get its money? There would be a tax, what's called a consumption tax -- it's like a retail sales tax -- of 23 percent on every single thing you buy and every single service you buy. So, goods and services would be taxed. It's not like a sales tax, though. So, that 23 percent is in dispute, but let's say 23 percent.

Then, everybody, every household, I should say, in America would get a prebate, and that would be money from the government, a check every month, to pay for the minimal tax that you would pay just to survive, to buy the stuff that you need. So, it's very controversial.


PHILLIPS: OK. So, you're talking about an additional tax to what we already pay on goods and services?

DOUGHERTY: Well, there are state taxes that you pay, yes, but, you know, taxes like that.

But this would be on every single thing, new goods, and the government would have to pay it, too. In other words, all of those agencies, the Defense Department, et cetera, every time they buy something, they would have to buy the -- they pay that tax, too.

PHILLIPS: Oh, interesting. OK, because a lot of things for them are tax free.



So, who makes out the best in the situation like this? Does everybody get a fair shake? Or do some people come out better than others?

DOUGHERTY: Well, you know, that's where the big debate is, because the proponents of this would say it's fair because everybody is treated the same.

Now, the opponents would say, if you look at poor people, for instance, perhaps they would make out better under the system. But they would say that the rich would make out much, much better. And the middle class would be the people who get soaked, as one person said.

So, that's where the big debate is. And also there are questions of, would it actually work? You know, no country in the world has ever tried to get rid of all income taxes -- I should say industrialized in the modern world -- tried to get rid of all income taxes and replace it with just this one retail sales tax.

PHILLIPS: And final question, what about all the thousands of people that work for the IRS, like, what, 100,000 people that work for the IRS? I mean, they're out of a job.

DOUGHERTY: Well, some of them, because you would still have to have some people to look into whether people are actually paying this. You can't just have a tax and pretend it's going to be paid. So, you would have a government agency that would have to check. And, for that prebate, they would probably have to check whether or not you had the four kids that you said you had.

PHILLIPS: Jill Dougherty, great stuff. You are going to have more in "THE SITUATION ROOM" with Wolf Blitzer coming up at 4:00 p.m., right?


PHILLIPS: OK. Jill Dougherty, thanks.

LEMON: All right, let's talk right now about the economy, and especially what's been important, foreclosures.

Josh, we know they are way up.


LEMON: New construction down, but people are still placing bets on the housing market, not everyone, mind you, just folks are willing to take the risk. Josh Levs met people with some people are willing to roll the dice here. Are you talking about these auctions that people go to?

LEVS: Yes. It's a reminder, no matter what is going on in America, no matter what kind of economic challenge you might be seeing at any time, there's always someone who feels that she or she can benefit in some way, right?

LEMON: Right.

LEVS: So, honestly, what's happening in America in general with this mortgage crisis is affecting everyone. And overall you're seeing a lot of negatives to people all over the entire country. You're seeing job losses. You're seeing property value expected to go down by more than a trillion dollars.

But I went to this that you're looking at right now. It's an auction from last night. And what I found is that there are a lot of speculators there who feel that they can actually gain a lot. Now, I spoke with one of the organizers there from the site that runs the auction. He told me business is booming.


LEVS: Your industry, is it one of the very few winners in the mortgage crisis?

DAVE WEBB, CO-OWNER, HUDSON & MARSHALL: Well, yes. I think that there's a lot of people getting into the game right now. There's -- you know, you have got everybody from appraisers that are gearing back up. You have got agents out there doing the broker price opinions on all these units.

So the banks are really having to do a lot of work on all these assets. Selling them is just the end of it. And then you have to close them. So, you have closing and title companies out there that are very, very busy as well.

LEVS: So many foreclosures, right, record numbers. Should we expect to hear about auctions like this in our neighborhoods every month from here on out?

WEBB: I think maybe not in your neighborhoods, but in the big cities, I think definitely through the next two to three years, you're going to see large real estate auctions taking place.

(END VIDEOTAPE) LEVS: And when you look at how these auctions actually work, there's generally 18 months between something being foreclosed and hitting the auction, which means all these foreclosures, we're going to see tons and tons of auctions. Don, I know this sounds cheesy. I'm thinking of it as the new realty reality.


LEVS: Because the truth is, auctions, foreclosure auctions, are in a large way taking over the realty market.

LEMON: Oh, not good for realtors...


LEMON: ... if there's auctions.

LEVS: Yes. Right.

LEMON: OK, so where are these people getting the money? Where are these investors getting all this money if the economy is bad?

LEVS: I know, good question. That's what I wanted to know, because my theory is -- let's say you are an investor, right? Well, if you are going to buy a bunch of homes, don't you have to sell your previous ones in order to have the money to buy new homes?

LEMON: Right.

LEVS: And it's not a seller's market. So, where are you getting the money to buy all -- people are buying a dozen houses there. Well, it turns out, what some of these bidders told me is that the money is right there.


JOHN SEPE, INVESTOR: And you can get the money. As long as you have credit and establishment with the bank, there's plenty of money out there to buy them.

LEVS: So, how many properties do you own?

SEPE: Five.

LEVS: And how many you looking to buy?

SEPE: I would like to buy ten this weekend.


LEVS: And, Don, you know, you actually see that with a lot of properties and a lot of the bidders who show up at these things. They are there to bid not on one, not on two, not even on a property they want to live in, but on a series of investment properties, some of them, if they go for the cheaper properties, buying five, six, seven.


LEVS: Some people, like that guy, looking for ten. Some people told me they want 15 homes in the next few months.

LEMON: I could go on and on and lots to talk to you about.

LEVS: Yes.

LEMON: But we got to get to some breaking news.

Josh Levs, thank you very much for that. Very interesting story.


LEMON: I want to tell you about now those two suburban Atlanta officers that were gunned down earlier in the week.

There has been a fourth arrest. We're being told by the U.S. Marshals Service that the suspect, fourth suspect, Mario O'Brian Westbrook, has been located. Just earlier today, a third arrest was made in the shooting deaths of those two suburban officers, Atlanta officers, this week. Let's check in with James Ergas from the U.S. Marshals Service to give us the very latest information on that.

Mr. Ergas, how did you find them, and where did you find them?

JAMES ERGAS, SUPERVISORY INSPECTOR, U.S. MARSHALS SERVICE: It was a concerted effort. We were provided information from the DeKalb Police Department. The DeKalb Sheriff's Office, the Atlanta Police Department, and the United States Marshals Regional Fugitive Task Force worked together collectively over the last several days. Most of the investigators had been up for more than 30 hours straight.

Working together, they were -- we were able to locate one of the suspects this morning and do a felony vehicle stop on him. Those same officers continued to work through the day until this afternoon, when we were able to locate the last suspect. And, again, together, with all of the multiple agencies involved, we were able to safely locate the house, locate the subjects, and surround the area, identify him, and arrest him without anyone being harmed.

LEMON: OK, so he was in a house, and do you know which area of -- was he in the Atlanta area still?

ERGAS: Yes, sir. He was in an area probably a half a mile from the Georgia Dome, off of Martin Luther King.

LEMON: So, he was right in downtown Atlanta. Are you still there?

ERGAS: Yes, sir, he was.

LEMON: Yes. OK, now, you mentioned a vehicle stop there, the vehicle stop, as opposed to -- this was the third suspect you're talking about?

ERGAS: Yes, sir.

LEMON: OK. And this fourth suspect was found in a home. Was he being aided...

ERGAS: No, sir. Yes, this is the fourth suspect.

LEMON: Yes, the fourth suspect.

Was he being aided by anyone in that home?

ERGAS: We're still -- that is still under current investigation. I believe that's determined by the agencies holding the warrants and doing the investigation, that murder investigation.

LEMON: There was a $65,000 reward for information leading to the arrest of all four of these suspects. Did you -- was it a tip at all? I know you mentioned the different agencies involved. Was there any citizen or anyone who called in saying that they saw one of these people or something suspicious happen?

ERGAS: There has been a lot of information and a lot of public information received. It was such a great outcry that two officers were killed the way that they were, we received a lot of information.

And we -- all of that information has been put into our system, and everyone developed that information. And that led to some of the leads that led us to where we were, where we are now.

LEMON: All right.

James Ergas from the U.S. Marshals Service, thank you very much for joining us.

And just so you know, this is all about those two officers who were killed. And if we can get their pictures back up, just so you know, these two officers both married with four children. They were moonlighting and trying to get some extra money from their family providing overnight security at an apartment complex in DeKalb County.

And according to their chief, he said they were responding to a call about a suspicious person. Someone fired on them. And this is a quote from him. He said, "Both these officers never had a chance." Now all four suspects are in custody. At least some of the families now know who killed their family members.

PHILLIPS: Well, enough gloom and doom. Larry King looks at possible upsides to economic uncertainty. You will want to stick around to listen to what they had to say.

LEMON: Same state, same party, same race, but, when it comes to African-American Democrats, there's a big generational divide. We will tell you who is voting for whom and why.


PHILLIPS: New pictures coming in on that developing story out of Washington, D.C., right now.

You can see the bomb squad. Actually, the camera's kind of catching this a little bit through the branches there, but they have actually used -- they are using the robotic arm on a car that has been connected to a man that was seen actually walking up to the Capitol Building just a short time ago with a shotgun.

As we monitor this new -- oh, it's actually new video. It's not live pictures. I apologize for that. But this is the suspect's car, we are told, not far from the Dirksen Senate Building. Basically, what happened, this man was wandering around the Capitol Building with a shotgun. He got close to the police barricade, which is just a few hundred yards from the Dirksen Senate Building. And that's at First and C Street, if you are familiar with that area.

Here we go. Now we have got live pictures. You can actually see the bomb squad's robot there checking out that car underneath the hood, trying to make sure that that car is not a threat. Obviously, they have to check everything out before they approach the vehicle.

But while we're watching these live pictures to see what could happen, what could possibly be inside this suspect's car, police have this man in custody, this man that was wandering around with a shotgun near the Capitol Building. As he approached, apparently police said he didn't make any threats. But officers drew their guns, got him on the ground and arrested him immediately. They are interrogating him. They were able to locate his car here just a few blocks away. And now the police dogs and this bomb squad are on the scene checking out this suspicious vehicle.

You never know what's going to happen, so we're going to kind of hold on these live pictures until I get the signal that we're going to move on. But police right now not sure who the man is, why he was there, why he had a shotgun, who he was going after, if he was going after anybody.

But, right now, the bomb squad and the Capitol Police using their technology there to check out not only under the hood, but now in the driver's seat of this vehicle. It looks like a truck of some sort, possibly a Bronco, SUV, not far from the Dirksen Senate Building there on Capitol Hill, where they just arrested a man within the past 45 minutes that had been wandering around with a shotgun. Police drew their guns, got him on the ground, took him into custody. Now they are checking out his car. We will let you know how this all goes down.

LEMON: The president and Congress are working on an economic booster shot, but it won't come overnight.

In the meantime, experts appearing on "LARRY KING LIVE" say, you and I should fend for ourselves. Bottom line, be smart.


KIM KIYOSAKI, AUTHOR, "RICH WOMEN: A BOOK ON INVESTING": I don't think the government has any way to bail us out of this. I really think it's a perfect storm of oil prices -- energy prices going up, the whole subprime mess, the weakening dollar, unemployment going up, the retail sales are dropping. So it's a perfect storm that's really causing it all. And it's a global problem, not just a U.S. problem.

LARRY KING, CNN ANCHOR: Jean, are we in a recession or, if you feel it, is it -- don't matter?

JEAN CHATZKY, AUTHOR, "MAKE MONEY, NOT EXCUSES": It really doesn't matter, as long as you feel it. And I personally do think that we happen to be in one right now. The question is, what can you do to shore up your personal balance sheet?

KING: Correct.

CHATZKY: And when we hit these times of low interest rates before -- and the Fed has indicated that it will be cutting interest rates again -- half of America took the opportunity to really shore up their finances. They refinanced their mortgages down to lower interest rates. They consolidated their credit card debt. They focused their student loans and they really put themselves in a better situation.

The other half of America sat there and spent money. And the question that you have to ask yourself right now -- again, as Gerri said, if you get that $600 tax rebate check in the mail, what are you going to do for you -- to make this ride a little built easier?

KING: Dave Ramsey, the average person, when he gets something or -- he doesn't say I wonder what my neighbor is doing, does he? He does what he thinks is best for him or her.

DAVE RAMSEY, AUTHOR, "THE TOTAL MONEY MAKEOVER": Well, absolutely. And Jean is exactly right. I think if you sit around and wait on Washington to come up with a program to solve your problems, you've got a long wait. I'm from the government and I'm here to help -- that's a scary thought.

And I think we do need to stop just a second, though. When I was in economics class, the definition of a recession is six consecutive months -- two consecutive quarters of a shrinking gross domestic product. We have not had one month yet of a shrinking gross domestic product. We have a slowed growth rate.

KIM KIYOSAKI, AUTHOR, "RICH WOMEN: A BOOK ON INVESTING": Well, I think President Bush is looking for kind of a quick fix, to be honest, and I don't think there is one. When you talk about a recession, the definition of a recession is when your neighbor loses their house. But a definition of depression is when you lose your house.

And right now I think there's a lot of people that are very scared, are very worried. They're hearing recession, recession. We're hearing all the negative news. And so my advice to people if you are scared, if you are worried, is take a deep breath. Don't panic. And this is the time now more than ever to really truly get smarter about your money and get smarter about -- learn about it, pay attention, be actively involved and don't wait for somebody else to take care of you. Because the only one -- as you say -- the only one that's going to take care of your finances and be concerned about your money is you.

KING: Is you.


PHILLIPS: We want to take you back now to live pictures out of Washington D.C. This is the robotic arm that is being used by the bomb squad to check out this truck that's not far from Capitol Hill.

If you're just tuning in, here's the situation. A man was wandering around with a shotgun. He had actually got been right up close to the Dirksen Senate Building to the police barricade. He didn't make any threats, but police saw the shotgun, they drew their guns, got him on the ground and took him into custody.

Now the bomb squad is checking out their car -- or his car, rather -- lifting the hood going inside the passenger's door. They just lifted something out, some sort of blue box, blue bag. We're not quite sure what it is. But it's going in there and inspecting and looking to see if possibly there's anything that could be a threat to anyone in that surrounding area.

Those robotic arms are pretty, pretty cool technology. It's got a camera inside there, so the bomb squad is able to maneuver this robot around a vehicle or a package and actually pick it apart look at it. It's got sensors on it. It can detect if there is anything that could be a threat, specifically a bomb.

So we're following these live pictures to see if, indeed, anything is in that car that could be a threat. Once again, police do have this man in custody. We don't know why he was there close to the Senate building -- the Dirksen Senate Building with a shotgun. He didn't make any threats. But police are interrogating him and now checking out his vehicle, which is only a few blocks away. We're tracking it for you.

LEMON: Yes, we're going to continue to follow this developing news happening there.

And we're not done with Larry's panel of financial experts. Hear their tips on weathering the storm. That plus our breaking news next in THE NEWSROOM.


PHILLIPS: The economy needs you to spend, spend, spend. But that may not be the best thing for your budget.

Larry King talked with his panel of experts about knowing what you've got coming in, knowing what you've got going out and maybe just making some adjustments. Here was the advice.


KING: John Q., live viewer. He makes $50,000, $60,000 a year. What does he do?


You want to make sure that you've got enough money in the bank in case you lose your job. You want emergency savings. You want to make sure that you've got a safety net -- maybe even take out a home equity line of credit so that if you do lose your job, you can pay your mortgage for the next two or three months until you get a new one.

KING: In other words, take care.

WILLIS: Take care. Take care. And then take advantage of the opportunities out there, because there are many.

KING: Kim, what would you tell our friend?

KIYOSAKI: I would say if you've got -- if you're living on just 50,000 a year -- and understandably, the number one thing is, again, this is waking people up to say hey, I've got to pay attention. So it is about taking charge of your personal finances.

And what I would do is I would sit down and I would take a good honest look -- and I mean honest, because it's very easy to lie to yourself about no, I really don't spend that much money. But how much have I got coming in? How much have I got going out and what do I need?

Because so many people are worried or confused because they don't know where they are. So the first step is find out where you are and then take action to where you want to get to.

RAMSEY: The good news is that...

KING: Jean, what would you add? I'll come right to you, David, in a second Dave.


KING: Jean, what would you add?

CHATZKY: I would add don't panic. Right now is not the time to stop investing in your 401(k). It's not the time to stop putting money in your kid's 529 accounts, because, as Dave said, I'm not sure that we are in Kmart and the blue light is exactly on yet, but I can't tell you when it's going to go on. And so we want to be...

KING: Should you buy stocks?

KIYOSAKI: Absolutely. I buy them all the time -- every single month, dollar cost averaging in.

KING: Dave?

RAMSEY: Jean, I think that's excellent advice. I totally agree. I made an investment in a growth stock mutual fund today. And the reason is I'm investing thinking with a five year, a 10 year, a 20 year mind set. The same as the Kiyosakis do in real estate. And I buy some real estate, too. Tampa, Florida, the real estate is pretty crummy right now.

Is it going to be crummy five years from now? No. You buy it right now, five years from now you're going to be a genius. If you own a home there, hold onto it and do what Gerri said. Keep that good grandma's rainy day fund because, hey, we're in the middle of a rainstorm. That's the bad news. The good news is it makes people get their umbrellas out and pay attention.

RAMSEY: Well, the government doesn't have a program right now to bail out subprime mortgages. There has not been a government bailout. And the stimulus package that Bernanke has got all over the news today doesn't involve the subprime bailout at all.

The only subprime bailout that there was -- and it was misnamed a bailout -- was just the government actually talked the mortgage companies into doing something that was smart, which was not taking back houses that they didn't want right now and freezing interest rates so that they didn't force people into foreclosure.

And these are people that shouldn't have had a mortgage in the first place. They're high interest, rip-off mortgages with big time prepayment penalties. And these are folks that weren't ready -- they didn't have that emergency fund. They were still deeply in credit card debt. They had messed up lives. And they weren't ready to buy a house. And when they bought a house, they made themselves, the bankers and now, a segment of our economy, into a mess.

KIYOSAKI: If I can add, you know, I own a lot of apartment buildings. And it wasn't rocket science to figure out when I was turning down prospective renters because they didn't qualify to rent my place, but then they'd go across the street and they qualified for a home loan. At that point, you know something's wrong.

RAMSEY: Koo-koo. Exactly. Koo-koo.

KING: How much of this can be placed, if any, blame, Jean, on President Bush?

CHATZKY: I think you have to look at the economy as a whole. You know, we're throwing around a lot of blame here. Your caller wanted to put the blame...

KING: Well, Hoover got blamed for the Depression. What part does the president play?

CHATZKY: I think that the president plays some part. But I think that Wall Street is culpable. I think that individuals were responsible, to some degree, for reading the paperwork that was put in their lap.

KING: A plague on all their houses?

CHATZKY: Well, not exactly. But I think this is an -- this is a time when everybody is going to come together and we're going to have to all work together individually and the government in order to right this ship.

WILLIS: You know, there were no regulations about this. You know, the cops were off the beat, clearly. So that it wasn't just people with poor credit histories that ended up getting subprime loans. They were sold to everybody. And I think there are big problems with that.


PHILLIPS: And lots of good advice from Larry's experts. And those were only little snippets. You can see that entire show, tomorrow, midnight Eastern, 9:00 Pacific.

LEMON: All right, "Golf Week" magazine moved quickly to deal with extreme negative reaction to its latest cover. The magazine replaced the editor responsible for putting a noose on the cover and apologized for causing offense. The illustration and the headline "Caught In A Noose" dealt with the story about Golf Channel anchor Kelly Tillman, her use of the word lynch and comments about Tiger Woods.

She was suspended for two weeks for her joking reference that Woods' young challengers might have to "lynch him in a back alley if they hope to beat him." "Golf Week" says the cover deeply offended many people. These a short time ago from the magazine's new editor Jeff Babineau.


JEFF BABINEAU, EDITOR, "GOLF WEEK": It was a very difficult story to illustrate. You know, I mean do you run a picture of Kelly Tillman smiling on our cover, possibly with strong verbiage?

Or do you find a symbol that we thought attached to the predicament that the Golf Channel was in. We weren't thinking racial overtones so much as the fact that the Golf Channel was in a pinch with Kelly Tillman, one of their stars, and the future of her career.


LEMON: Well, the magazine's move comes one day after PGA tour executives threatened to pull their advertising.

PHILLIPS: A big percentage -- almost half -- of the Democratic voters in South Carolina are African-Americans. And the current campaign has revealed a telling fact -- younger black voters are tilting toward one candidate while older African-Americans are leaning toward a different one.

Suzanne Malveaux is in Charleston, South Carolina with more on the generational divide.

Hey, Suzanne.

SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hey, Kyra. You know, it's a lot less straightforward than what we it's a lot less straightforward than what we thought and what the polls suggest. We were in a bible study, a pizza parlor, the local college. We've been everywhere talking to young and old.

Their issues are very similar -- they want a better life for themselves, a better economic situation. But it's really those intangibles -- things like loyalty and faith -- that really determine which way they're swinging.


MALVEAUX (voice-over): In South Carolina, where nearly half of the Democratic voters are African-American, there's a fierce fight for their support. Polls taken last month suggest there is also a generational divide -- older black voters going for Hillary Clinton, younger black voters backing Barack Obama.

We went to see for ourselves and found 17-year-old Joseph Davis squarely in Obama's camp.

JOSEPH DAVIS, OBAMA SUPPORTER: We had opportunities and chances and sometimes we blew it. But I feel that, you know, Barack Obama is going to set a trend for more African-Americans, maybe myself or one of my family members, maybe one day will be in the same position.

MALVEAUX: Grandmother Sheryl Mack backs Senator Clinton.

SHERYL MACK, CLINTON SUPPORTER: I see her as my sister and also as a peer. But I also think that she has a broad appeal.

MALVEAUX: Hillary Clinton's appeal, many older African-Americans tell us, comes from their appreciation of her work in the civil right movement and her husband, President Bill Clinton's, policies supporting the black community.

SAMUEL ROBINSON, COUNCIL MEMBER, AWENDAW, SOUTH CAROLINA: It is true, on the one hand, because the older people remember. As the Jewish people say, we never forget.

MALVEAUX: Forgetting what the Clintons did, some say, is like betraying an old friend.

UNIDENTIFIED FEMALE: I need to tell them they need to go back 12 years ago to see what that administration did. And because of that administration, that is why they're in colleges and universities today.

MALVEAUX: But some young people like Joseph see their elders' message as too cautious.

DAVIS: We only know what is either being told to us -- we wasn't there a long time ago. So what the older generation tells us as young kids is that the blacks can't do this. We don't have to pay attention to what our grandmothers or our grandfathers said and we believe that it can happen. MALVEAUX: And the more people we talked to, the more we discovered older voters also believe it can happen -- an African- American could be elected president. The church elders at St. James Presbyterian all talked about their deep affection for Clinton, but are supporting Obama.

CHARLOTTE DUNN, SUPPORTS OBAMA: Some of the struggles that we as black women face, I don't believe that she can speak to them.

CAROL SMALLS, SUPPORTS OBAMA: Like these ladies say, a change. Hillary's been in the White House.

MALVEAUX: Some see an Obama win as a civil rights victory after years of personal struggle.

ROBINSON: It's a little more than Obama at this point. It's becoming bigger than him.

MALVEAUX (on camera): Is that a good thing?

ROBINSON: It's a very good thing.


MALVEAUX: Kyra, it's a complicated thing for many voters, who say they are struggling between these competing loyalties -- whether or not to go to Barack Obama or Hillary Clinton.

One thing that is happening that we hear from young and old is that many are saying at least give Obama a shot, give him a chance. But as we know, in Iowa and as well as New Hampshire, you really can't predict these type of things and how they're going to go -- Kyra.

PHILLIPS: Suzanne Malveaux live from Charleston, South Carolina.

Good to see you, Suzanne.

LEMON: It's an incredible act of heroism. Two Iowa police officers ignore huge flames and put their lives on the line to try to save an injured driver.


PHILLIPS: More on that situation now out of Washington D.C. This is live pictures of the suspect's car. The man that owns this car, was driving this car, is now in Capitol Police hands, being questioned as to why he was roaming around Capitol Hill with a shotgun. This was just a short time ago. The bomb squad's robotic capability going up to that car, pulling out some sort of bag obviously trying to figure out if there is a bomb threat inside that car. We don't know if that came from the suspect or not.

But we didn't -- we still don't know exactly why he approached the Dirksen Senate Building. He didn't make any threats, but police drew their guns, took him into custody. And Sergeant Kimberly Schneider with the Capitol Police, just recently -- or just moments ago, described the suspect for us.


SGT. KIM SCHNEIDER, CAPITOL HILL POLICE: At approximately 1:00 this afternoon, the U.S. Capitol Police observed a man who appeared to be in possession of a shotgun. He was arrested, apprehended and is currently in Capitol Police custody. There are few details available about this individual at this time, other than he is a white male. There also is a vehicle that is associated with this individual. That's located in the area of North Capitol and B Street in the Northwest.

Capitol Police are currently searching the vehicle. There are items of concern that Capitol Police have discovered. Therefore, the immediate area is restricted and vehicular and pedestrian traffic will not be allowed into the area until this is cleared.


PHILLIPS: So what did the bomb squad find inside that vehicle and who is this man and why was he making -- or why was he wandering around Capitol Hill with the shotgun? We're working those details still. We'll bring them to you when we get them.

LEMON: It is an incredible sight -- a car engulfed in flames, a man trapped inside. But the flames weren't enough to keep two Iowa police officers from a dramatic rescue.

Reporter Angie Hunt, of CNN affiliate KCCI, in Des Moines has the amazing story.


LT. JEFF BRINKLEY, AMES, IOWA POLICE DEPARTMENT: When I got there, the vehicle was fairly well engulfed in flames, at least on the upper rear half of the vehicle. It looked to me like somebody stole it and maybe wrecked it and walked away from it or -- it was kind of hard to tell.

ANGIE HUNT, KCCI CORRESPONDENT (voice-over): Not knowing if anyone might be trapped inside this burning car, Lieutenant Jeff Brinkley knew he had to get a better look.

BRINKLEY: The thing was just filled with smoke and I couldn't see anything in all.

HUNT: So Brinkley started breaking windows, hoping to vent the car, but still couldn't see through the thick, black smoke. It's all captured on the dashboard cam inside Brinkley's car.

UNIDENTIFIED MALE: I don't know if there is anybody here or not, but I think there might be.

HUNT: That's when officer Clint Hertz arrived. He immediately rushed to open the passenger door and quickly realized someone was inside. OFC. CLINT HERTZ, AMES, IOWA POLICE DEPARTMENT: I guess I wasn't really thinking too much other than just there's somebody in there, we've got to get them out.

HUNT: It took a few seconds for Hertz to free the driver, 21- year-old Justin Hallberg, from his seatbelt and drag him from the car. Hallberg was unresponsive, but alive.

BRINKLEY: One of the doctors that treated the patient up at Mary Greeley said that he estimated he had 30 on 60 more seconds before he would have succumbed to the smoke inhalation.

HUNT: After pulling Hallberg to safety, Officer Hertz went back to see if anyone was still in the car. Watch closely as Hertz puts his head back inside the vehicle and you see a small burst of flames right in front of his face.

HERTZ: I never even noticed how much the car just went into a ball of fire after we got him out. It was real quick. Another 20 seconds and it was completely engulfed.

BRINKLEY: When I went back and looked at the tape, from the time that I got out of my car to the time that that little poof kind of went over Clint's head, it was like 62 seconds start to finish. To go back and look at it from kind of that third person perspective was really kind of sobering to me in that we were really close -- knowing full well that there was some risk to us, as well, at that point.


LEMON: Well, the driver of the car was treated for smoke inhalation but he wasn't burned. Meantime, Officers Hertz and Brinkley are being recognized for their courage. They'll receive the Award of Valor next week -- the highest honor an officer can receive.

PHILLIPS: A legend who shocked the world dies in his adopted land. We're going to look back at the exotic life of chess master Bobby Fischer.


LEMON: His personality came to overshadow his genius. But Bobby Fischer's place in history is still guaranteed. The former world chess champion has died, reportedly of kidney failure, at a hospital in Iceland, his adopted country. He was 64-years-old.

PHILLIPS: One of our I-Reporters, Susan Polgar, of Lubbock, Texas, sent us this photo of Bobby Fischer playing chess with her. Polgar is a former women's world champion. She calls Fischer a genius on the chess board. If you want to share a photo or condolences about the passing of Bobby Fischer, just go to

Well, the closing bell and a wrap of the action on Wall Street is straight ahead.

(COMMERCIAL BREAK) PHILLIPS: The closing bell is about to ring on Wall Street.

LEMON: Susan Lisovicz -- probably a sigh of relief. It's not -- it's not been a good week, man.


Kyra and Don, can I just say this? TGIF.



LISOVICZ: And I think that...

PHILLIPS: more ways than one.


LEMON: What does that mean, TGIF?

LISOVICZ: Thank goodness it's Friday.

LEMON: I know.

LISOVICZ: And, you know, we're going into a three day weekend and I think investors are going to need a little bit of a break because the three major averages are down at least four percent this week alone.

Why is that? Well, we had another steady drumbeat of bad economic news this week. And despite the fact that three of the most important people in the global economy -- never mind the U.S. economy -- were speaking about economic stimulus -- the president and the Treasury secretary and the chairman of the Federal Reserve -- markets aren't buying it.

Why? Well, for one reason, we've got a poll out from our own corporate cousin, "Fortune" magazine, saying three out of four people -- consumers polled -- believe that the U.S. economy is either in a recession or going into one this year. And half of those people polled say they're going to pull back their spending. So investors have been pulling back, too.