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Gas Pumps Run Dry Down South; President Bush Addresses U.N. General Assembly; Billion Dollar Bailout Faces Serious Scrutiny; Financial Crisis Boosts Obama in Polls
Aired September 23, 2008 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: Meanwhile, motorists running on empty. Stations running out. Three southern cities dealing with pumps running dry and long lines at the stations that do have gas. Atlanta, Nashville and Tallahassee, Florida, have been caught in the a supply squeeze. Nine major Gulf Coast refineries that shut down before Hurricane Ike are still off-line. And patience, like many gas tanks, running out.
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UNIDENTIFIED FEMALE: We get punched out. Somebody punched the glass this morning. Luckily it was bullet proof.
UNIDENTIFIED MALE: Yesterday I had to have my truck towed home. And I'm looking for gas now to get to work.
(END VIDEO CLIP)
COLLINS: Analyst says the gas shortages should disappear in the next week once refineries resume their normal production level. For the rest of the nation, an improved gas outlook. Prices fell for the sixth straight day. The average price of a gallon of regular unleaded now around $3.73.
A chunk of your paycheck riding this hour on Capitol Hill. The bailout plan and the people who came up with it facing tough scrutiny in lawmakers. CNN's Brianna Keilar is on Capitol Hill for us this morning.
Brianna, we have yet to hear Treasury Secretary Hank Paulson's opening statement. But certainly already some pretty powerful words from those in charge right now on Capitol Hill.
BRIANNA KEILAR, CNN CORRESPONDENT: Yes, some harsh words and some words that show really just show how serious the situation at hand is, Heidi. We heard from banking committee, Senate Banking Committee Chairman Christopher Dodd. He said it's the responsibilities of the banking committee to move quickly. But he said we're going to move and move quickly if we can. He said there was more important to move prudently. He said basically this is our one shot to do this and we need to make sure that we're doing it right. Some of the really harsh words coming from a Republican, a ranking member on the Senate Banking Committee, Richard Shelby.
He basically said look government regulators were asleep at the wheel here. He was clearly very incensed. We've seen him actually yesterday he was conspicuously absent from a photo opportunity between Democrats and Republicans in the Senate who were talking about a solution there. So Shelby slamming regulators there. He said that in his opinion the Treasury has really done a really ad hoc job about bailing out these financial institutions. And he says that this $700 billion proposal to him is just the Treasury Department taking this ad hoc strategy on a much grander scale.
Meantime, as we are watching this hearing and we await testimony from Treasury Secretary Henry Paulson and Fed Chairman Ben Bernanke who you see there on the upper right-hand side of your screen, Senate Democrats are circulating a proposal right now. What they're talking about is requiring the government to receive an ownership stake in any corporation that the federal government bails out, and that it would also include foreclosure protection program for homeowners.
Another item, that it would limit executive pay so those executives from corporations that are bailed out maybe wouldn't receive as big a severance package or annual salaries as they normally would. And also something Democrats and Republicans really want, and that is oversight of how the Treasury is going to spend these hundreds of billions of taxpayer dollars. Let's take a listen to Senator Dodd in the introduction of this hearing.
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SEN. CHRIS DODD (D), BANKING COMMITTEE CHMN.: We need to move carefully and prudently and to make sure that what we do is right. I understand speed is important. But I'm far more interested in whether or not we get this right. There is no second act to this. There is no alternative idea out there with resources available if this does not work.
(END VIDEO CLIP)
KEILAR: Now we've heard similar sentiments coming from Republicans and Democrats, Heidi. At this point obviously Congress still pressing to get this done perhaps by the end of the week. But we heard from that man himself, Senator Dodd, that this could take a few more days than that.
COLLINS: Yes. And some of the other things that we heard from Senator Shelby as well. The thing that stuck in my mind was, he said, we could very well spend $700 billion and not resolve the crisis. So obviously those are exactly some of the questions that the Fed Chairman and the Treasury Secretary will be hearing a little bit later on. We will be watching all of that for you. Live pictures still coming out of Capitol Hill there. We will keep our eye out for you. Brianna Keilar, thank you.
The politics of money. With only 40-some days left before the presidential election, the nation's money crisis adds a new sense of urgency and a lot of anger and worry. Let's check the political landscape now with Paul Steinhauser, CNN's deputy political director.
Paul, good morning to you. Some new numbers out? PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes. Some new numbers from CNN and the opinion research corporation. We talked about this bailout. It's going on right now in Capitol Hill. We asked Americans are you worried if the government doesn't take any action, will things get worse? And yes, four in 10 Americans, 40 percent are very worried. An equal amount say they are somewhat worried. And only about one in five Americans not too concerned right now about this major financial crisis that is spreading across the country.
Also you've heard a lot about golden parachutes for some of these executives from some of these companies that are in trouble. We asked -- we asked just about that, worried that if this financial crisis, if these companies get bailed out, are you worried that these executives are going to get these golden parachutes? Yes, look at that 36 percent said they are worried. And another 41 percent said they are somewhat worried. You're hearing a lot of Democrats saying these companies, these executives were partly to blame. They say they should not be getting golden parachutes.
What about who's to blame overall. Take a look at by party. It's almost two to one Americans think that Republicans are more responsible for this financial crisis than the Democrats. What about the candidates themselves, the two for president. Who would do a better job handling the economy? Right now it's the other way around -- it should be John McCain 43 percent and Barack Obama 53 percent. So by 10 points more Americans think Obama would do a better job.
And Heidi, what does that mean for the race for the White House? Is there an impact? Take a look at our latest numbers right here, 51 to 46 right now, a five-point advantage for Barack Obama among registered voters. That is up from about a dead-even split at 48-48 earlier this month. So it does appear that this economic crisis is having an impact at least on the national numbers, Heidi.
COLLINS: All right. We'll be watching all the numbers and will bring you a lot more of them too before this election is over, obviously. CNN's Paul Steinhauser. Thank you, Paul.
STEINHAUSER: Thank you.
COLLINS: With the election just six weeks away, in fact, presidential hopefuls are not wasting a single moment. Senator Barack Obama stumping in Wisconsin yesterday. Today he's in Tampa, Florida. Meanwhile, his running mate, Senator Joe Biden is greeting supporters in Virginia.
As for the Republican ticket, Senator John McCain's first stop, Strongsville, Ohio, from there he goes to Middleburg Heights. His VP pick, Governor Sarah Palin is in New York for the opening day of the United Nations general assembly.
So who's to blame for the financial fall out? According to a new CNN opinion research poll, Americans say Republicans are more responsible than the Democrats for the crisis. Is it having an impact on the race for the White House? We'll take a closer look coming up later in the hour.
President Bush meanwhile expected to talk economy among other issues when he addresses the United Nations General Assembly. That is happening within the hour. CNN's White House correspondent Elaine Quijano joining us now with what we can express.
Good morning to you, Elaine.
ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Good morning to you, Heidi.
And the economy will be the topic when President Bush makes that address in about 20 minutes or so. We're expecting the President to again press the Congress into getting legislation done on this plan immediately. Now the president told Congress in a statement yesterday that the world is watching what happens with this financial crisis and how the United States handles this situation.
Well, now, the president will have the backdrop of world leaders actually in the room as he tries to further drive home that point. Now, earlier this morning in a meeting with Pakistan's President, Mr. Bush tried to keep up that pressure.
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GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: I've assured them the plan laid out by Secretary Paulson is a robust plan to deal with a serious problem. And now they're wondering about our Congress. And I've assured them as well that having spoken to the leaders of the Congress from both political parties there is the desire to get something done quickly.
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QUIJANO: President Bush there talking about the message that he has given to other world leaders who are meeting in New York. Now, the Bush administration, is of course, as we've heard, is facing some bipartisan criticism from Capitol Hill. It's really trying to push back against the notion that this plan crafted by the administration is something limited only to the fat cats sitting on Wall Street. Instead, the message we're hearing, and we heard this on Friday as well, is that this is really designed to help mom and pop stores on Main Street as well.
In fact, this morning in a conference call, a White House aide was asked what happens if lawmakers on Capitol Hill don't come to some kind of an agreement and they aren't able to get legislation done on this quickly? Well, this aide said we should think of that as unthinkable. He said essentially because businesses big and small really rely on the flow of money and credit, not only to expand, but even just to stay open, Heidi. So the administration really trying to paint some dire predictions of what could happen if there is no action here in Washington -- Heidi.
COLLINS: All right. Elaine Quijano, watching all of that for us from Washington. Sure do appreciate that, Elaine. Thank you.
Also want to let you know that we are watching all of this very closely here on CNN. And we will stay with it for you.
Meanwhile, new details coming in right now about that early morning college shooting in Finland. Nine people shot dead at a trade school about 180 miles from Helsinki. There are reports this hour the shooter is a student there. His name Manny Jinani Sari.
According to Finnish news reports, he shot himself in the head after the rampage. He is alive but in grave condition. We're also following developments on images posted on youtube.
Finnish police investigating right now if this man seen at the shooting range is the suspected school shooter. The story still unfolding this hour. We will bring you the very latest just as soon as we get it.
Again, back to the story we're watching very, very closely. On the left of your screen we have Senator Chuck Hagel. And that of course is the Senate Banking Committee and then we have a live shot of the United Nations where President Bush will be addressing the General Assembly within, we believe, about the next hour or so. We'll be watching both of those pictures very closely. A quick break here.
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COLLINS: I want to take you to New York and the United Nations for President Bush at the podium.
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BUSH: I'm pleased to be here to address the General Assembly. Sixty-three years ago representatives from around the world gathered in San Francisco to complete the founding of the charter of the United Nations. They met in the shadow of a devastating war with grave new dangers on the horizon. They agreed on a historic pledge, to reaffirm faith and fundamental human rights and unite their strength to maintain international peace and security.This noble pledge has endured trying hours in the United Nations history and it still guides our work today.
Yet the ideals of the charter are now facing a challenge as serious as any since the U.N.'s founding. A global movement of violent extremists, by deliberately murdering the innocent to advance their aims, these extremists defy the fundamental principles of international order. They show contempt for all who respect life and value human dignity. They reject the words of the Bible, the Koran, the Torah or any standard of conscious or morality. They imperil the values of justice and human rights that gave birth to the United Nations. Values that have fueled an unprecedented expansion of freedom across the world.
To uphold the words of the charter in the face of this challenge, every nation in this chamber has responsibilities. As sovereign states we have an obligation to govern responsibly and solve problems before they spill across borders. We have an obligation to prevent our territory from being used as a sanctuary for terrorism and proliferation for human trafficking and organized crime. We have an obligation to respect the rights and respond to the needs of our people.
Multi-lateral organizations have responsibilities. For eight years the nations in this assembly have worked together to confront the extremists' threat. We've witnessed successes and setbacks and through it all a clear lesson has emerged. The United Nations and other multi-lateral organizations are needed more urgently than ever. To be successful we must be focused and resolute and effective. Instead of only passing resolutions to crying terrorist attacks after they occur, we must cooperate more closely to keep terrorist attacks from happening in the first place.
Instead of treating all forms of government as equally tolerable, we must actively challenge the conditions of tyranny and despair that allow terror and extremists to thrive. Acting together to meet the fundamental challenge of our time we can lead toward a world that is more secure and more prosperous and more hopeful. In the decades ahead the United Nations and other multi-lateral organizations must continually confront terror. This mission requires clarity of vision. We must see the terrorists for what they are, ruthless extremists who exploit the desperate, subvert the tenets of a great religion and seek to impose their will on as many people as possible.
Some suggest that these men would pose less of a threat if we'd only leave them alone. Yet their leaders make clear that no concession could ever satisfy their ambitions. Bringing the terrorists to justice does not create terrorism. It's the best way to protect our people. Multi lateral organizations must respond by taking an unequivocal moral stand against terrorism. No cause can justify the deliberate taking of innocent life. And the international community is nearing universal agreement on this truth.
The vast majority of nations in this assembly now agree that tactics like suicide bombing, hostage taking and hijacking are never legitimate. The Security Council has passed resolutions declaring terror unlawful and requiring all nations to crack down on terrorist financing.
Earlier this month, the Secretary General held a conference to highlight victims of terror where he stated that terrorism can never be justified. Other multi-lateral organizations have spoken clearly as well. The G8 has declared that all terrorist acts are criminal and must be universally condemned. The Secretary General of the organization of the Islamic Conference recently spoke out against a suicide bombing which he said runs counter to the teachings of Islam.
The message behind these statements is resolutely clear. Like slavery and piracy, terrorism has no place in the modern world. Around the globe, nations are turning these words into actions. Members of the United Nations are sharing intelligence with one another, conducting joint operations in freezing terrorist finances. While terrorists continue to carry out attacks like the terrible bombing in Islamabad last week.
Our joint actions have spared our citizens from many devastating blows. The brutal nature of the extremists increasingly clear, the coalition of nations confronting terrorists growing stronger. For the past seven years, Afghanistan and Iraq have been transformed from regimes to actively sponsored DTFT, Democracies That Fight Terror.
Libya has renounced its support for terror in its pursuit of nuclear weapons. Nations like Saudi Arabia and Pakistan are actively pursuing the terrorists. A few nation, regimes like Syria and Iran continue to sponsor terror. Yet their numbers are growing fewer and they're growing more isolated from the world. As the 21st century unfolds, some may be attempted to assume that the threat has receded. This would be comforting. They would be wrong.
The terrorists believe time is on their side. So they made waiting out civilized nations part of their strategy. We must not allow them to succeed. The nations of this body must stand united in the fight against terror. We must continue working to deny the terrorists refuge anywhere in the world, including ungoverned spaces. We must remain vigilant against proliferation by fully implementing the terms of Security Council Resolution 1540 and enforcing sanctions against North Korea and Iran. We must not relent until our people are safe from this threat to civilization.
To uphold the charter's promise of peace and security in the 21st century, we must also confront the ideology of the terrorists. At its core the struggle against extremists is a battle of ideas. Terrorists envision a world in which religious freedom is denied, women are oppressed and all decent is crushed. The nations of this chamber must present a more hopeful alternative. A vision where people can speak freely and worship as they choose and pursue their dreams and liberty. Advancing the vision of freedom serves our highest ideals as expressed in the U.N. charter's commitment to the dignity and worth of the human person.
Advancing this vision also serves our security interests. History shows that when citizens have a voice in choosing their own leaders, they are less likely to search for meaning and radical ideologies. When governments respect the rights of their people, they're more likely to respect the rights of their neighbors. For all these reasons, the nations of this body must challenge tyranny as vigorously as we challenge terror.
Some question whether people in certain parts of the world actually desire freedom. The self-serving common sense has been disapproved before our eyes. From the voting booths of Afghanistan, Iraq and Liberia to the orange revolution in Ukraine and the Rose Revolution in Georgia, to the Cedar Revolution in Lebanon and the Tulip Revolution in Kyrgyzstan, we have seen people consistently make the courageous decision to demand their liberty.
For all the suggestions to the contrary, the truth is that whenever or wherever people are given the choice, they choose freedom. Nations in this chambers have supported the efforts of dissidents and reformers and civil society advocates in newly-freed societies throughout the new United Nations Democracy Fund. And we appreciate those efforts.
And as young democracies around the world continue to make brave stands for liberty, multilateral organizations like the United Nations must continue to stand with them. In Afghanistan our determined people are working to overcome decades of tyranny and protect their newly free society. They have strong support from all 26 nations of the NATO alliance. I appreciate the United Nation's decision this week to renew the mandate for the International Security Assistance Force in Afghanistan.
The United Nations has also an active civilian presence in Afghanistan where experts are doing important work helping to improve education, facilitate humanitarian aid and protect human rights. We must continue to help the Afghan people defend their young democracy so the Taliban does not return to power, and Afghanistan is never again a safe haven for terror. In Iraq the fight has been difficult. Yet daily life has improved dramatically over the past 20 months. Thanks to the courage of the Iraqi people, a determined coalition of nations and a surge of American troops.
The United Nations has provided the mandate for multinational forces in Iraq through this December, and the United Nations is carrying out an ambitious strategy to strengthen Iraq's democracy, including helping Iraqis prepare for their next round of free elections. Whatever disagreements our nations have had on Iraq, we should all welcome this progress towards stability and peace, and we should stand united in helping Iraq's democracy succeed.
We must stand united in our support of other young democracies, from the people of Lebanon struggling to maintain their hard-won independence, to the people of the Palestinian territories who deserve a free and peaceful state of their own. We must stand united in our support of the people of Georgia. The United Nations charter sets forth the equal rights of nations large and small.
Russia's invasion of Georgia was a violation of those words. Young democracies around the world are watching to see how we respond to this test. The United States has worked with allies in multilateral institutions like the European Union and NATO to uphold Georgia's territorial integrity and provide humanitarian relief.
Our nations will continue to support Georgia's democracy. In this chamber are representatives of Georgia and Ukraine and Lebanon and Afghanistan and Liberia and Iraq and other brave young democracies. We admire your courage. We honor your sacrifices. We thank you for your inspiring example. We will continue to stand with all who stand for freedom. This noble goal is worthy of the United Nations. And it should have the support of every member of this assembly. Extending the reach of political freedom is essential to prevailing in the great struggle of our time, but it is not enough.
Many in this chamber have answered the call to help their brothers and sisters in need by working to alleviate hopelessness. These efforts to improve the human condition are honored the highest ideals of this institution. They also advance our security interests. The extremists find their most fertile recruiting grounds in societies trapped in chaos and despair, places where people see no prospect of a better life.
In the shadows of hopelessness, radicalism thrives. Eventually that radicalism can boil over into violence and cross borders and take innocent lives across the world, overcoming hopelessness requires addressing its causes -- poverty, disease and ignorance. Challenging these conditions is in the interest of every nation in this chamber.
Democracies are particularly well positioned to carry out this work because we have experience responding to the needs of our own people. We're natural partners in helping other nations respond to the needs of theirs. Together we must commit our resources and efforts to advancing education in health and prosperity.
Over the years many nations have made well-intentioned efforts to promote these goals. The success of these efforts must be measured by more than intentions. They must be measured by results. Our nation has placed assistance in results at the heart of our foreign assistance programs. We launched an initiative called the Millennium Challenge Account which directs our help to countries that demonstrate their ability to produce results by governing justly in fighting corruption and pursuing market-based economic policies as well as investing in their people.
Every country and institution that provides foreign assistance, including the United Nations will be more effective by showing faith in the people of the developing world and assisting on performance in return for aid. Experience also shows that to be effective we must adopt a model of partnership, not paternalism. This approach is based on our conviction that the people in the developing world have the capacity to improve their own lives and will rise to meet high expectations if we set them.
America sought to apply this model in our emergency plan for aids relief. Every nation that receives American support through this initiative develops its own plan for fighting HIV/AIDS and measures the results. So far these results are inspiring. Five years ago 50,000 people in (INAUDIBLE) Africa were receiving treatment for HIV/AIDS. Today that number is nearly 1.7 million. Taking a similar approach to fighting malaria. So far we've supported local efforts to protect more than 25 million Africans.
Multilateral organizations have made bold commitments of their own to fight disease. The G8 has pledged to match America's efforts on malaria and HIV/AIDS. Through the global fund, many countries are working to fight HIV/AIDS, malaria and TB. Lives in the developing world depend on these programs. And all who have made pledges to fight disease have an obligation to follow through on their commitments.
One of the most powerful engines of development and prosperity is trade and investment which create new opportunities for entrepreneurs and help people rise out of poverty and reinforce fundamental values like transparency and rule of law. For all these reasons many in these chambers have conducted free trade agreements at bilateral and regional levels The most effective step of all would be an agreement that tears down trade barriers at the global level. An impasse in the Doha round is disappointing, but that doesn't have to be the final word. I urge every nation to seize this opportunity to lift up economies around the world and reach a successful Doha agreement as soon as possible. Beyond Doha, our nations must renew our commitment to open economy and stand firm against economic isolationism. These objectives are being tested by turbulence in the global financial markets. Our economies are more closely connected than ever before, and I know that many of you here are watching how the United States government will address the problems in our financial system. In recent weeks we have taken bold steps to prevent a severe disruption of the American economy which would have a devastating effect on other economies around the world.
We promoted stability in the markets by preventing the disorderly failure of major companies. The Federal Reserve has injected urgently needed liquidly into the system. And last week I announced decisive action by the federal government to address the root cause of much of the instability in our financial markets by purchasing illiquid assets that are weighing down balance sheets and restricting the flow of credit.
I can assure you that my administration and our Congress are working together to quickly pass legislation approving this strategy. And I'm confident we will act in the urgent time frame required.
The objectives I've laid out for multilateral institutions confronting terror, opposing tyranny and promoting effective development are difficult. But they are necessary tasks. To have maximum impact, multilateral institutions must take on challenging missions. And like all of us in this chamber, they must work toward measurable goals, be accountable for their actions and hold true to their word. In the 21st century the world needs a confident and effective United Nations. This unique institution should build on its successes and improve its performance.
Where there's inefficiency and corruption, it must be corrected. Where there are bloated bureaucracies, they must be streamlined. Where members fail to uphold their obligations, there must be strong action. For example, there should be an immediate review of the Human Rights Council, which has routinely protected violators of human rights. There should be a stronger effort to help the people of Burma live free of the repression they have suffered for too long. And all nations, especially members of the Security Council, must act decisively to ensure that the government of Sudan upholds its commitment to address the violence in Darfur.
United Nations is an organization of extraordinary potential. As the United Nations rebuilds its headquarters, it must also open the door to a new age of transparency, accountability and seriousness of purpose. With determination and clear purpose, the United Nations can be a powerful force for good as we head into the 21st century. It can affirm the great promise of its founding.
In the final days of the San Francisco Conference, the delegates negotiating the U.N. Charter received a visit from President Harry Truman. He acknowledged the enormous challenges they faced and said success was only possible because of what he called, "an unshakeable unity of determination." Today, the world is engaged in another period of great challenge. And by continuing to work together, that unshakeable unity of determination will be ours. Together we confront and defeat the evil of terrorism. Together we can secure the almighty's gift of liberty and justice to millions who have not known it. And together we can build a world that is freer, safer and better for generations who follow.
Thank you.
(APPLAUSE)
COLLINS: There you have President Bush addressing the General Assembly, the United Nations there, speaking about a variety of topics. Mentioning the economy and what's happening on Capitol Hill right now very briefly.
Also want to let you know, Iran's president, Mahmoud Ahmadinejad, will address the U.N. General Assembly as well. That will happen later today.
And then, watch CNN tonight, a "LARRY KING LIVE" exclusive. You can see his explosive interview with the Iranian leader. Again, "LARRY KING LIVE," CNN, tonight, 9:00 p.m. Eastern. .
Well even when stocks get hit for a big loss, the game goes on. And maybe you shouldn't stay on the sidelines at this point. Our Gerri Willis with some investment advice.
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COLLINS: Quickly want to get a look at the big board now. There's a plus sign. We, of course, always like to see that. Dow Jones Industrial Averages up about 94 points right now, resting at 11,110.55.
The nation's financial crisis -- over the past few days we've heard an awful lot of ominous references to the Great Depression. Well this is nothing according to older Americans who actually lived through the nation's worst economic collapse.
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UNIDENTIFIED MALE: Everybody ended up broke. The banks was closed. No money. People was starving.
UNIDENTIFIED FEMALE: I can remember my father coming home and telling me everything had crashed.
UNIDENTIFIED MALE: My folks helped furnish beef -- meat -- to feed the poor people here in Denver.
(END VIDEO CLIP) COLLINS: There is no question that times today are also tough. But what lessons can we actually learn from history? Personal finance editor, Gerri Willis, joining us now with advice on how to invest in a down market.
Boy, those people have seen this before, obviously. What investments do really well in hard times overall, Gerri?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Well, Heidi, you know those people are actually right. This is not the Great Depression. In fact, it's really difficult to compare today to the Great Depression because times are really different. In fact, during that period of time there was a lot of deflation rather than inflation. The stock market lost 90 percent of its value.
So to make some comparisons, we went back and looked not at the Great Depression, but at previous recessions to find out what kinds of stocks did well, what sectors did well. We consulted Standard & Poors, and they gave us a fantastic list of the top performing sectors during a downturn. Tobacco leads the list, as you can see right here -- alcoholic beverages, household products, foods, beverages.
And the thing that these have in common, Heidi, is that these are what they call noncyclical industries. They are ones that -- people have to buy household products whether the economy is doing well or doing poor. These are things that people buy on an ongoing basis no matter what's going on in the economy. They are safe havens.
But I have to tell you, Heidi, if you actually look at the performance numbers of these stocks, tobacco may gain 9.6 percent during a recession. And that's a fantastic return compared to other sectors. But beverages lose 6.2 percent -- that's still a good performance considering. So you get a picture of just how poorly equities can perform during a recession. It's all relative, these comparisons.
COLLINS: Yes, and hopefully people aren't drinking too much in all of this.
WILLIS: Right.
COLLINS: What is the closest comparison, though, to this time that we're experiencing right now?
WILLIS: We talked to the folks at Morningstar yesterday. And they said the closest comparison is probably the S and L crisis, starting the clock ticking (ph) in August 1989. I want to show you -- this is important, there's lessons here -- show you how the stock market recovers in the wake of a crisis, such as the S and L crisis.
This was pretty serious stuff. Look at this -- the turn around comes. After three years the stock market is up 30 percent. Now what do we take away from a graphic, a chart such as this? Well, you can't really time the market. Everybody is calling me and sending me e- mails saying, shouldn't I pull everything out of the stock market right now? And I keep saying, if you're going to be -- if your retirement is decades and decades off, you want to stay in the market -- guess what -- because you can't really time the recovery, the turn around. It's very hard to see it coming. And when it does come, it comes very quickly.
So moral of the story here is that the recovery could take a while, but it happens quickly when it does recover. So you have to be prepared for that -- Heidi.
COLLINS: Yes, no question about it. You've been saying the same thing all along, Gerri -- don't panic, don't take everything out except if you are in your retirement and then you can do some different options.
WILLIS: Yes, exactly. If you're on the cusp of retirement, if you're in retirement, obviously, I'm hoping that your asset allocation was already different and more conservative so that you're not exposed to the gyration in the stock market we're seeing today and over the past few weeks.
COLLINS: Yes, and that's the key too.
All right. CNN personal finance editor, Gerri Willis. Thanks so much, Gerri.
WILLIS: You're welcome.
COLLINS: Just want to let you know a couple of things. You can follow your fortunes at CNNMoney.com. We've got all the days market news and numbers, expert analysis and much, much more. You can also watch the U.N. General Assembly. You saw just a moment ago a little box there, on CNN.com. You can watch that live.
We're watching this live for you right here. This is, of course, the Senate Banking Committee. They're still taking statements right now. We have not yet heard from Treasury Secretary Hank Paulson. We will bring all of this to you just as soon as it happens.
We're back in a moment.
(COMMERCIAL BREAK)
COLLINS: Quickly want to let you take a look at this, live shot of Senator John McCain. He is in Strongsville, Ohio, right now. First off, as we said, Strongsville, as we said. From there, though, he will go to Middleburg Heights. We want to let you know you can of course watch him live on CNN.com.
Meanwhile, investors are zeroing in on Capitol Hill where two of the nation's most powerful financial players are set to testify before a Senate committee. Susan Lisovicz is at the New York Stock Exchange now with more on that and, of course, how investors are reacting to all of this.
Hi there, Susan.
SUSAN LISOVICZ, CNN CORRESPONDENT: Hi, Heidi. Well, things are kind of quiet, and that's a headline in and of itself. But we are looking at a modest rally right now, a little bit more than an hour into trading. And of course, you know, all eyes are -- continue to be focused on Washington, the new center of the U.S. financial industry with testimony from both the chairman of the Federal Reserve and the U.S. Treasury secretary.
Right now the Dow Industrials after a nearly 400-point drop, are up 50 points. The Nasdaq is up 19 points, or about 1 percent.
Both Hank Paulson and Ben Bernanke are urging Congress to take immediate action on the Treasury's $700 billion bank rescue plan. The pair want a vote by the end of the week with Bernanke saying urgent action is need to avert -- quote -- "very serious consequences" -- end quote -- for the market -- Heidi.
COLLINS: Yes, and the Fed chairman and the Treasury secretary both pushing very hard for quick action here. But not all of the lawmakers are really ready to do that. In fact, we heard some really strong comments from some of them. And in fact, that's still what we're listening to, in case people are wondering, on Capitol Hill. Lots of questions and statements today, saying, is this thing really going to work?
LISOVICZ: Well it's a massive, massive plan. Lawmakers are being asked to pass it very, very quickly. And yes, some are hesitant. They feel like they can't ask taxpayers to step in and rescue Wall Street without making some changes, or at least asking a lot of questions, including limiting executive bonuses and giving more help to homeowners with bad mortgages. Others simply don't trust the administration's warning.
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REP. JIM MCDERMOTT (D), WASHINGTON: They used fear to go to war. They used fear to take away your civil rights and spy on you. And now they're using fear of financial collapse. And they are just trying to scare you into getting them to do whatever they want.
(END VIDEO CLIP)
LISOVICZ: On the other hand, some say it's too risky to wait. Republican senator, Mitch McConnell said yesterday -- quote -- "When there's a fire in your kitchen threatening to burn down your home, you don't want someone stopping the firefighters on the way and demanding they hand out smoke detectors" -- end quote. You obviously want them to put the fire out before it burns down your home.
So you have a big debate, a fiery debate, if you will, to play on that metaphor, Heidi. And it's an awful lot of pressure because, obviously, this is an election year, too.
COLLINS: Yes, and we are not far off. That's for sure. All right. We are watching all of that out of Capitol Hill today, of course still, again, waiting for Treasury Secretary Henry Paulson to get to the microphone there. CNN's Susan Lisovicz, thanks for that.
So who is to blame for the financial fallout? Well according to a new CNN Opinion Research poll, Americans say Republicans are more responsible than Democrats for the crisis.
Is it having an impact on the race for the White House?
(COMMERCIAL BREAK)
COLLINS: Hard to find anybody who is not talking about the economy. What's happening? Who is to blame? And what's being done to fix it?
So how is it affecting the presidential race? Our senior political analyst, Bill Schneider, takes a look.
(BEGIN VIDEOTAPE)
WILLIAM SCHNEIDER, CNN SR. POLITICAL ANALYST: Two weeks ago the presidential race was tied. And now? Obama has opened up a five- point lead among all registered voters, and a four-point lead among those likely to vote. Two core McCain constituencies, men and seniors, have flipped from McCain to Obama. The financial crisis has a lot of men worried about their jobs.
Obama promises --
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: Five million new jobs that pay well and can't ever be outsourced.
SCHNEIDER: While McCain warns --
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: A vote for Senator Obama will guarantee higher taxes, fewer jobs and an even bigger federal government.
SCHNEIDER: Seniors are mostly retired. They're worried about Social Security.
OBAMA: If my opponent had his way, millions of Americans would have had their Social Security tied to the stock market this week.
SCHNEIDER: McCain denies it.
MCCAIN: My friends, I will not privatize Social Security, and it's not true when I'm accused of that.
SCHNEIDER: The financial crisis is having a powerful effect on the vote. Two-thirds of voters say the economy is not fundamentally sound. They're voting nearly 2 to 1 for Obama.
OBAMA: They have run this economy into the ground.
SCHNEIDER: Both Obama and McCain support government intervention in financial markets. Both blame the Bush administration for not taking action.
MCCAIN: Two years ago I called for reform of this corruption at Fannie Mae and Freddie Mac. Congress did nothing. The administration did nothing.
SCHNEIDER: But government intervention is an issue on which Democrats have more credibility. 62 percent of voters think the federal government should intervene in the crisis, and 62 percent of those who feel that way are voting for Obama.
(on camera): Voters blame Republicans more than Democrats by nearly 2 to 1 for the problems facing financial institutions. And the impression is growing that McCain's policies would be the same as those of President Bush.
Bill Schneider, CNN, Washington.
(END VIDEOTAPE)
COLLINS: Quickly want to take you back to Washington, Capitol Hill. We are watching right now the Senate Banking Committee chairman, Chris Dodd. We heard him earlier with some of his opening comments. We also heard from ranking member, Senator Richard Shelby. And then they sort of went around and the room and we heard an awful lot of statements being said, before this man, Treasury Secretary Paulson, came to the microphone.
So let's go ahead and listen in now. We think it's just about to happen.
