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Bailout Strategy: Government Won't Buy 'Troubled Assets'; Big 3 Automakers on the Brink; Obama Wants Help for Automakers
Aired November 12, 2008 - 12:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: Let's bring in Personal Finance Editor Gerri Willis, here in Atlanta with me, and CNN's Christine Romans at the business desk in New York.
Christine, we begin with you. Why the change of philosophy here, change of approach on the TARP? And maybe explain what TARP actually stands for. For some, this will feel like a bait and switch.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Look, TARP is the Troubled Asset Relief Program. As you say, it was meant to take these toxic assets off the banks' books.
HARRIS: Yes.
ROMANS: TARP -- you know, I keep thinking of, like, a FEMA tarp, a blue tarp in the middle of a disaster. Right?
HARRIS: Yes.
ROMANS: So TARP was meant to do that. And the treasury secretary said he makes no apologies for changing the plan. They asked for broad authorities from Congress. Congress gave them broad authorities, and now they've decided that things worsened so much by the time they finally got all the authority they needed that they had to completely change gears, and this is what they're doing now.
HARRIS: But wait a minute. What changed so dramatically? We're talking about weeks, really, a matter of weeks from the time that the plan was announced -- I remember that news conference -- and the time that the plan was finally worked out.
ROMANS: It's only been five weeks. It feels like a lifetime in five weeks.
HARRIS: Yes.
ROMANS: No, things were changing by the hour, frankly, in the economy, for a couple of those weeks, for about 10 days there. But they say that their initial strategy, the toxic asset strategy, has now changed.
Now they're making these direct injections into banks. Also, AIG, don't forget, got $40 billion of that $700 billion bailout. There's $60 billion left that they have the authority to spend. How will they spend it? Maybe it will be a credit card company. Maybe it will be a bailout for automakers. It sounds like the administration is pretty cool on that though.
Maybe it will be bailouts to people we don't even know yet. And then there's another $350 billion that they can tap next year, the next president can tap, to spend on troubled assets or direct directions, or whatever they want.
HARRIS: Got you. Got you.
All right. Gerri, help me here. This is now an investment plan, this is not a bailout plan. But I want to know what's in this for homeowners who are under siege right now.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Right. Let's talk about silver linings here.
HARRIS: OK.
WILLIS: All right? Because there is a silver lining here, because the treasury secretary talked about how he was concerned about some of these folks who put together asset-backed investments.
HARRIS: Absolutely.
WILLIS: And you know how this works. You have credit card debt, you have auto loan debt, you have student loan debt. That debt all gets packaged together and sold off in pieces, in trenches to investors all over the planet.
Now, when that market isn't working -- and it's not working very well right now, Tony -- it makes it harder for you to have credit card debt and to have auto loan debt. And right now you and I talk all the time about how credit card companies are lowering your limits on debt, they're making it tougher for you, higher interest rates.
HARRIS: That's right.
WILLIS: If they fix this piece, this could help us.
The other silver lining, frankly, that I saw in this is that the treasury secretary said we want these banks to lend. They need to lend.
HARRIS: Well, where's the club? Where's the hammer here? I mean, come on. Where are the conditions?
WILLIS: He is...
HARRIS: Here is the money. Here is the investment. And here are the conditions. A part of those conditions, is there any language that says you have to lend or else?
WILLIS: He's the nation's top regulator in this field. If he says you better be lending, I think there's going to be some pressure here to lend. And, of course, you've seen these new programs coming out for homeowners in the last few weeks -- Bank of America.
HARRIS: Oh, you're talking about JPMorgan and...
WILLIS: About JPMorgan Chase, Citibank, all these big banks saying, hey, we are going to get out there and change some of these loans. Now, a lot of people are saying that those efforts aren't enough, we need to do more, we need to do more federally, really put some of this TARP money in the pockets of homeowners. Clearly, that's not what the administration wants to do.
HARRIS: All right. Christine, appreciate it.
Gerri, you're back with us a little later. Thank you both very much.
The big three, the big three, the automakers in Detroit, in trouble. Now Democrats calling for a lame duck session of Congress next week to help the American automakers.
Here's CNN Gary Tuchman.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT (voice-over): The cars are there. The buyers are not.
(on camera): Could you use a new car?
UNIDENTIFIED MALE: Yes, I can use it, if I don't have to pay for it.
TUCHMAN: An industry that is the backbone of the U.S. economy is in desperate straits. A serious lack of economic confidence and a history of disastrous decision-making has put the Big Three on the brink.
UNIDENTIFIED FEMALE: We certainly have hopes that things are going to turn around. But until you have got more confidence than I have right now, you are just not comfortable enough to do it right now.
TUCHMAN: David Cole from the Center For Automotive Research in Michigan says two to three million jobs could be lost quickly if the Big Three go bankrupt.
DAVID COLE, CHAIRMAN, CENTER FOR AUTOMOTIVE RESEARCH: The bottom line is, is that this industry is at the edge of a cliff. If it goes over that cliff, to the cost -- the cost to the economy is going to be enormous.
TUCHMAN: Democratic congressional leaders are pushing for a lame duck session to try to pass legislation to make automakers eligible for help under the already passed $700 billion bailout. So far, the Bush administration has resisted the idea. Some experts say a company like GM hasn't learned from past mistakes.
PETER MORICI, ECONOMIST: If we subsidize General Motors now, so it doesn't go down under 2009, it will go under in 2011. But, when it does, it won't disappear. The factories won't go away. It will go through bankruptcy reorganization, and a new company will emerge that makes the same cars, but with much lower costs and much better competitive prospects.
TUCHMAN: But others say, the immediate financial devastation would be immense and that the Big Three automakers are positioned for future success if they get the infusion.
COLE: I don't like the idea of government involvement, but, when you consider the size of this industry, the importance in the economy, and the fact that the cost of prevention here is much lower than the cost of a calamity, it is the right thing to do, in terms of what's best for this country.
TUCHMAN (on camera): This will give you an idea of what this industry is going through. I decided to visit a well-known GM-Chevy dealer here in Atlanta that has a great reputation for customer service. But, when we got here, the security guard said we couldn't park. I asked her why. And she said, the dealer has gone out of business.
COLE: It is absolutely a special case. And it has been for a long, long time in our economy.
MORICI: The automobile industry is not a special case, any more than the steel industry or the airline industry were a special case.
TUCHMAN (voice-over): A 180-degree difference of opinion, but all agree that, right now, business stinks.
Gary Tuchman, CNN, Atlanta
(END VIDEOTAPE)
HARRIS: Whether to bail out the auto industry, well, that is clearly a topic of discussion between the incoming and outgoing presidents.
President-elect Obama is calling for more federal help for the industry, and an issue he raised during his meeting with President Bush on Monday.
Ed Henry in Chicago, covering the Obama transition team.
Ed, great to see you.
Now, here's the question, do we know what the president-elect wants? Does he want TARP money to go to the automakers or for Congress to provide the funding?
ED HENRY, CNN WHITE HOUSE CORRESPONDENT: Well, he's mostly talking, Tony, about Congress doing this, but there is some question, sort of a semantical, logistical question, if you will, as to how this money gets washed around. And speaking to Democrats on Capitol Hill, they say they're still trying to work that out as well.
Is this sort of existing money that was within essentially the $700 billion bailout? And do you carve $25 billion out of there?
You heard Secretary Paulson a short while ago also talking about that, and essentially expressing skepticism about whether or not there's more money washing around to really move over to the auto industry. In fact, Secretary Paulson saying the only way he would really sign off on it is if there's still what he called viability for the auto industry. And that's a big concern for the White House, that you just write a check.
And as Gary Tuchman's piece pointed out, there's potential for GM and Ford and the others to come back in a year and say, look, we need more money. And so, is this just going to be checks that are written every six months, every year, to keep the industry afloat?
Now, what the industry is saying is that they are in desperate straits, they need this money to stay afloat. And they're pointing out that if one of the big three, GM, Ford, Chrysler, if one of them went bankrupt, it could have a spiraling effect on an already anemic economy.
I spoke to one industry source yesterday who said that -- and he estimated about one in 10 jobs in America is tied up somewhere in the auto industry. Not just manufacturing. The dealers, as Gary was pointing out. The suppliers, the parts makers, et cetera.
And so another thing we're starting to hear from people close to the Obama transition is that President-elect Obama is taking a close look at having a so-called car czar, someone either within his White House or at least in the administration, who would be a direct liaison to the auto industry, who could really try to elevate this issue and get their arms around it from not just the economic standpoint, but moving forward also the environmental consequences. There are some Democrats saying, look, if there's going to be a bailout, there need to be strings attached so that the auto industry will agree to start making more green cars. And again, as Secretary Paulson said, become more viable long term -- Tony.
HARRIS: And Ed, if I could, let's take a big step back here and talk about this operation that you're covering there in Chicago. How vast a transition operation does Barack Obama have?
HENRY: Well, let me tell you, yesterday, John Podesta, the co- chair of this transition, told us that he plans to have about 450 employees when all is said and done. It gives you an idea of the monumental task ahead. And he also said the budget is $12 million. I mean, that's a lot of pencils and file folders, and also obviously has to deal with payroll.
This is a monumental effort, obviously, in all seriousness. Think about 450 employee. It sounds like a lot for a transition, but it's a drop in the bucket when you talk about the tens of thousands of federal employees that this administration will be dealing with in terms of the political appointees. Not just the cabinet that we talk so much about, those senior positions, but many, many positions in the mid to lower levels. And in fact, the president-elect right now is here in Chicago, along with Vice President-elect Joe Biden. They're huddled behind closed doors here in Chicago, essentially wading through this process, figuring out who's going to be in the cabinet.
We're hearing that it's likely to be sooner than it has been in previous years. In the modern era, a lot of these cabinet appointments have come out in December. We're expecting at least some of the cabinet appointments this time to happen this month, in November -- Tony.
HARRIS: And there he is, Ed Henry for us in Chicago.
Ed, good to see you, as always. Thank you, sir.
In his first post-election interview, President Bush talks about his White House meeting with President-elect Barack Obama. Mr. Bush sat down with CNN's Heidi Collins for this exclusive interview. He reflected on Obama, the family man.
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES OF AMERICA: It was interesting yesterday.
You know, one impression I can share with you is that one of the things that President-elect Obama was really interested in after we had our policy discussions was his little girls, how would they like the White House? And it was interesting to watch him go upstairs, and he wanted to see where his little girls were going to sleep. And clearly this guy is going to bring a great sense of family to the White House.
(END VIDEO CLIP)
HARRIS: OK. Are you searching for a job and getting a bit frustrated? I am going to get some tips from a couple of the countries's top experts. That's next.
(COMMERCIAL BREAK)
HARRIS: Boy, we're just getting this news into CNN of a second school collapse. This time in Haiti. You'll recall there was a horrible school collapse just outside of the capital of Port-au-Prince just on Friday past.
And that collapse, 90 people were killed. Many of them students, children. One hundred fifty were injured in that school collapse on Friday. Now a second collapse, we're just getting word of today here, in central Port-au-Prince.
Our David Mattingly is on the ground, and we hope to raise him in just a couple of minutes and get the details on the second school collapse in central Port-au-Prince in just a couple of moments.
Senator John McCain says his former running mate has a bright future. In his first TV interview since the election, McCain told NBC's Jay Leno he was proud to have Sarah Palin on the ticket with him. McCain says she will play a big role in the future of the country and he downplayed reports of Palin going rogue.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R), ARIZONA: Did you expect mavericks to stay on message? I'm sure that -- but what she was -- look, we did a lot of things together, a lot of these rallies. The people were very excited and inspired by her. And that's what really mattered.
(END VIDEO CLIP)
HARRIS: All right. So how is Sarah Palin doing in the polls? In a new CNN/Opinion Research Corporation survey released this hour, 49 percent of Americans say they have a favorable opinion of Palin, compared to 43 percent who say they have an unfavorable opinion.
Men have a slightly more favorable view of Palin than women. Fifty-one percent of men, compared to 48 percent for women.
Palin is less popular then Vice President-elect Joe Biden. He has a 64 percent favorable rating. Sixty-one percent of those surveyed had a favorable opinion of Senator John McCain.
Sarah Palin is front and center in a meeting of Republican governors in Florida today. They're discussing the future of the party, and Palin is one of the main speakers. Her role at the Republican Governors Association Conference highlights her newfound status. Palin was little known outside of Alaska before John McCain picked her as his running mate.
You have two chances to see Governor Sarah Palin on CNN this evening. Wolf Blitzer will have an interview with Palin on "THE SITUATION ROOM" at 6:00 p.m. Eastern. And Palin will be a guest on CNN's "LARRY KING LIVE." That's coming up at 9:00 Eastern tonight.
OK So you're out of work and you're tired of hunting online until your eyes are a bit blurry and bloodshot. You're not alone. Millions of Americans are doing the job hunt thing right now.
So how can you be the most effective in your search?
We have got two giants in the online job-hunting world for you right now. And with us, Tom Musbach is the managing editor of Yahoo! Hot Jobs. And John Challenger is CEO of the outplacing firm Challenger, Gray & Christmas.
Good to see you both. Thank you both for being here.
Who wants to start on this? What jobs right now -- if you're out of work, what are the jobs that are hot right now for job seekers? Who wants to take that one on?
JOHN CHALLENGER, CEO, CHALLENGER, GRAY & CHRISTMAS: Well, some of the hottest jobs right now are in health care and energy. Those sectors have been strong, really the bulwarks of this economy, this down economy. And a lot of people now leave, say, industries that aren't doing so well, automotive, banking, housing and construction, and take on roles in those growing areas.
HARRIS: Tom, take that on.
TOM MUSBACH, MANAGING EDITOR, YAHOO! HOT JOBS: Yes, we're definitely seeing health care is a juggernaut right now in terms of hiring. But also, technology's pretty strong, as well as government and military. We're seeing a lot of people getting hired in those sectors as well.
HARRIS: OK.
So, John, let's say you're 40 years old, you lost your manufacturing job, like one of the jobs at Ford or GM. You need a job that's going to give you another 20, 25 years, maybe more, before you get to retirement. What are you thinking about and what should you be thinking about right now?
CHALLENGER: Well, one of the first things is to recognize you're probably not going to find one company that you can stay at for the rest of that time. Today, people change jobs about every five to seven years. Companies especially.
And so what you're trying to do is prepare to find a solid place to continue building your skills, to continue really contributing. Your surest chance of long-term success is that every company you go to work for says this person's accomplishments are visible, makes a big difference in our company.
HARRIS: Tom, take that on. I mean, you found yourself now in a situation where you've been with a company for 20, maybe 25 years, and now you're out of work. And now you're being asked, well, because you have to for your family, you have got to retool yourself. Give us some guidelines, some tips to move forward in that area so that you can get your life back on track again.
MUSBACH: Well, I think one of the things you're going to have to do is network, both online and off. Networking is key to finding a job today. But in terms of additional tips, I would also say you have to commit to action.
If you are out of work right now, you need to make your job search your full-time job and be persistent. And then after you send out resumes, you know, wait an appropriate amount of time, perhaps a week, and make sure you that follow up with a call to make sure -- you know, to see if they're still interested and to demonstrate that that's a job you're interested in.
HARRIS: And John, I'm seeing a tip here that suggests that you should tailor your resume. That one size, it doesn't fit all anymore.
CHALLENGER: Well, it's so easy today to take your resume and apply accomplishments to the particular job that you have at hand. But remember, often your resume is more like a brochure that you're carrying in with you that you want the person, ideally your next boss, to remember you by. So you're not going to be able to tailor too much for that person. You could sit online all day and constantly change your resume for every ad you see, but you'd probably be sitting too much at your computer, and you do have to get out and see people in person.
HARRIS: And Tom, this idea of being open to changing industries, finding a new line of work.
MUSBACH: Yes, you've got to be open to changing industries because you might be in an industry right now that is suffering. And so it's really important to make sure that you focus on the marketable skills that you have, perfect them as best you can, and then parlay them perhaps into a new industry. Don't restrict yourself to one particular industry.
HARRIS: That's outstanding.
Tom, John, thanks to both of you for your advice and your tips today. We really appreciate it, particularly in this market right now. Thank you so much.
CHALLENGER: Thanks, Tony.
MUSBACH: All right, thank you.
HARRIS: Let's get to our David Mattingly right now. He is on the line with this from Port-au-Prince in Haiti.
The scene now, David, of another, a second school collapse.
DAVID MATTINGLY, CNN CORRESPONDENT: That's right, Tony.
Very distressing to hear about this so close that huge tragedy we saw on Friday when more than 90 children were killed in a collapse of a school. This time, however, we don't -- it doesn't look like we're going to see a repeat of that tragedy. I've been speaking to U.S. AID which is coordinating the rescue team from the United States here. They have a reconnaissance team on the scene. They tell me, that, yes it was a school building, and, yes, there was some type of collapse, but at this point, there are no fatalities to report. They believe that only seven -- seven people, possibly children, were only slightly injured when -- in this particular collapse.
So this building, we haven't seen it yet, we're on our way to look at it for ourselves right now. You could have any number of types of buildings here in Haiti that call themselves schools. They could be very small. We're going there to look. Again, at this point, there are no fatalities or actually search teams on the scene with cameras and they're reporting back they don't see that they're in the rubble and that there are only seven likely injured people, possibly children, to report from that scene.
So, it's always distressing to hear of a school collapse, particularly what we've had here recently, but this does not look like any stretch of the imagination, a repeat of the tragedy that we saw here on Friday.
HARRIS: Well, take a moment, if you would, David, and let's talk about Friday's collapse, if you can still hear me. Has a cause for that collapse been determined yet?
MATTINGLY: The teams that went inside said that the -- when they were looking at the debris, everything was very brittle. They may not have used the proper materials when they were putting the blocks together to build that building. At one point a Haitian official was speculating that there may not have been enough steel reinforcement for the building for the number of people that were inside of it.
Again, all of this was just speculation, and there has been no full investigation launched into that building. They are taking it apart right now with heavy equipment as they go in to try to recover the remaining bodies that were inside of that building. But there seems to be the general perception that that building was not built properly, that something of an investigation will be conducted. But the owner of that school is in custody with the police.
And at this point, we're looking at a second school that I'm sure there will be an investigation there as well to see what type of structural failure there was this time.
HARRIS: Gotcha. All right, David Mattingly on the ground for us in Port-au-Prince, Haiti.
David, appreciate it. Thank you.
Growing demand around the world will mean less fuel to go around here at home. What can be done to get us out of this energy fix?
(COMMERCIAL BREAK)
HARRIS: Eight days left to vote for your favorite CNN hero. Go to cnn.com/heroes to see their stories and vote. Then join Anderson Cooper Thanksgiving night to find out who will be CNN's hero of the year. Vote now at cnn.com/heroes. Only eight, eight, eight days left.
You know, oil prices are below $57 a barrel. Way down from where they were last summer. But one agency is predicting $200 oil down the road. Are you kidding me? More than triple the current price. CNNMoney.com's Poppy Harlow has our Energy Fix.
What is -- who is this person -- wow, Poppy. Fill us in on this.
POPPY HARLOW, CNNMONEY.COM: You know what, Tony? I think we're all surprised when we saw this report this morning. The report comes out once a year. It is from the highly respected International Energy Agency. And it does say, as you said, oil prices will hit $200 a barrel by the year 2030. That is up sharply from the previous prediction last year that was $108 a barrel.
And that's not the only scary prediction in this report. The IEA says demand for energy around the world will increase 45 percent over that same 21-year period.
The good news, Tony, that number is down from last year due to the global economic slowdown -- Tony.
HARRIS: Well, all of the alternative energy sources will have come online then, so we can throw this prediction --
HARLOW: Maybe.
HARRIS: Yes, maybe.
So perhaps something good is coming from this slowdown. What do you think, Poppy?
HARLOW: In terms of energy demand, yes. That's true, there are two sides to every equation. The IEA is worried, however, about energy supply. It says we will need about $1 trillion a year around the world to keep the supply up with the demand for energy. An amount it believes will be difficult to find, especially in the current economic environment.
Here's a quote. Take a look at this. It says: "Current trends in energy supply and consumption are unsustainable environmentally, economically and socially. They can and must be altered." The report continues on, "...the era of cheap oil is over."
Tony, that's hard to believe when oil is below $60, but this is a very respected agency.
HARRIS: Well where is this increase in demand coming from, if worldwide economy are slowing? Are we still talking about the usual suspects in China and India?
HARLOW: You're exactly right. It's not coming from us, it's not coming from the developed world. The agency says the gains in the developing world, that is what will have a dramatic impact.
Take a look there. As you can see, China leads the way. 40 percent -- over 40 percent of the demand growth will come from China alone. Here's a surprise, though, in that report. The Middle East also expected to be a big user. We think of the Middle East as a big energy supplier. It is expected to be a big consumer in the coming years, and most of these countries will use energy that comes from coal. That means it's expected that will account for 75 percent growth in the amount of greenhouse gas emissions that we have to double by the end of the century.
Just in from the Energy Department, as well, in just the past few minutes, the U.S. Energy Department is cutting its forecast for our oil used in our consumption in the fourth quarter of this year, and next year. It says gasoline will average, everyone will be happy to hear this, $2.37 a gallon next year.
But that's just on our end, Tony. This is a global issue and this is about worldwide demand -- Tony.
HARRIS: Yes, like what we're doing here in the states, that's for sure.
All right, Poppy, good to see you. Thank you.
HARLOW: You're welcome.
HARRIS: As Barack Obama prepares to take office one of his stated priorities remains tracking down Osama bin Laden. What will it take to accomplish that?
(COMMERCIAL BREAK)
HARRIS: Let's see. Three hours until trading today now. Let's take a look at the New York Stock Exchange. The big board. The Dow Industrials, you can see, down 234 points. Off of session lows. But it has been a rough day so far for the Dow. We will get a market check. Let's see, Nasdaq. The Nasdaq down 44 at this hour. A market check coming up with Stephanie Elam in just a couple of minutes right here in the NEWSROOM.
Iran says it has successfully test fire a new missile. State TV today showing this video of the launch. The country's defense minister says the surface-to-surface missile is more accurate than its predecessors and has a range of about 1,200 miles. That means it could easily reach Israel. Iran calls its new weapon part of a defensive strategy. In response, the White House said Iran should refrain from further tests if truly wants to gain the trust of the world.
Hunting Osama bin Laden. National security advisers say President-elect Barack Obama wants to renew the commitment to capture the FBI's most wanted terrorist. But finding him won't be easy.
CNN's Kelli Arena has this advice for the incoming president.
(BEGIN VIDEOTAPE)
KELLI ARENA, CNN JUSTICE CORRESPONDENT, (voice over): Mr. President, Osama bin Laden's trail has run cold. U.S. officials say they haven't had a solid lead since late 2001.
ROBERT BAER, FORMER CIA OFFICER: I talked to a dozen CIA guys that have been on the hunt for him, and half of them told me they assumed he was dead. The other half said they assumed he was alive. But the key word here is assumed. They don't know.
ARENA: They also assume that Osama bin Laden is hiding in the tribal areas of Pakistan. An area that's isolated, mountainous and difficult to navigate. U.S. predator drones have been firing a lot of hellfire missiles, but drones cannot replace on the ground intelligence.
ROBERT GRENIER, FORMER CIA PAKISTAN STATION CHIEF: One individual who may have access to the families and the clans in a particular valley, if he goes to the valley next door and starts asking questions, he's probably going to end up dead pretty quickly. ARENA: Cultivating informants is dicey. So what about using force? Most experts agree deploying troops in Pakistan is a no-go. Those hellfire missiles have killed several al Qaeda leaders, but innocent civilians as well. And that's a big political problem. Dalton Fury (ph) was the commander of special forces near Tora Bora, Afghanistan, in 2001.
DALTON FURY: It doesn't matter if you've got al Qaeda number three or one of the senior Taliban leaders. They're going to put on national television the people that you killed. So that's the strategic risk you take every time you launch that.
ARENA: What about Pakistan's military? Can it get him?
GRENIER: They won't do it. They've got much more important fish to fry.
ARENA: Terrorism experts say the U.S. does, too. But catching bin Laden remains symbolically important.
Unfortunately, each strategy to catch bin Laden relies on the terrorists making a mistake to reveal his location, which is not the greatest position for a superpower to be in.
Kelli Arena, CNN, Washington.
(END VIDEOTAPE)
HARRIS: Well, here's a question for you. Who will lead the nation's military under Barack Obama's presidency? Current Secretary of Defense Robert Gates has been mentioned as a possible holdover. He's been in that post for two years after leaving what he called his dream job as president of Texas A&M University. Before that, he was a veteran of the Central Intelligence Agency. Another possible candidate is Senator Jack Reed, a Democrat from Rhode Island. He serves on the Senate Armed Services Committee and traveled with Barack Obama on a trip to Iraq. Like Obama, the former congressman opposed the use of military force in Iraq.
So what was really going on at that big AIG meeting at an Arizona luxury resort?
(COMMERCIAL BREAK)
HARRIS: The CEO of insurance giant AIG says it was a legitimate event, but a financial planner's conference hosted by AIG at a posh Arizona resort is raising new questions. AIG was already under fire for splashy outings after accepting a government bailout that has grown to $150 billion. Investigative reporter Josh Bernstein of affiliate KNXV reports on the latest event.
(BEGIN VIDEOTAPE)
JOSH BERNSTEIN, KNXV REPORTER: The three-day convention was held here at the Pointe Hilton Squaw Peak Resort, where the palm trees and pools seem to outnumber the guests. Is this registration for the all-secretive AIG?
UNIDENTIFIED FEMALE: Yes, it is.
BERNSTEIN: AIG went to great lengths to keep the conference a secret.
Why don't you just post a darn AIG signs and the like?
UNIDENTIFIED MALE: No, no, no, no, no.
BERNSTEIN: They tell you guys not to post it.
UNIDENTIFIED MALE: We can't even say the word.
BERNSTEIN: According to the signs and brochures, it's the 2008 Asset Management Conference. Training for independent financial planners. But the guest list includes a who's who of AIG's senior management. There they are sitting pool side drinking coffee while other people attending the conference were in meetings. That's adviser group CEO Larry Roth, senior vice-presidents Bruce Levitus and Stuart Rogers. Here's company president Art Tambaro after working out at the spa walking back to his room, a private two-story villa.
So they're like hotel rooms.
ART TAMBARO, PRESIDENT, AIG: Hotel rooms.
BERNSTEIN: The higher end ones?
TAMBARO: Yes.
BERNSTEIN: This is video of a private cocktail party where AIG's top brass were working the crowd. Here are the top executives moments later, climbing into a Lincoln Town Car, shuttling off to the Biltmore area restaurant McCormick and Schmidt, where they spent more than $400 on dinner and drinks.
Mr. Roth, Mr. Tambaro, Josh Bernstein from ABC 15. You mind if we ask you a few questions about the conference?
UNIDENTIFIED MALE: We absolutely do, yes.
BERNSTEIN: Despite the financial crisis, congressional hearings and an $85 billion taxpayer-funded bailout.
Do you think this is an appropriate use of taxpayer's money after the bailout?
AIG executives Larry Roth and Art Tambaro declined to talk.
Mr. Tambaro, you were staying in one of the two-story townhouses, weren't you? One of the private villas?
A company spokesperson says it's part of a group rate at no additional cost. This spokesman admits AIG is footing the bill, picking up the entire $343,000 tab, but expects 90 percent of the bill to be reimbursed by participating product sponsors. This spokesperson confirms NFL legend Terry Bradshaw was scheduled to speak at the conference and get paid for signing autographs and taking picture. But at the last second, AIG decided to cancel the appearance, but Bradshaw will still get paid.
(END VIDEOTAPE)
HARRIS: Wow. AIG officials say the event has been miss characterized. On CNN's "Larry King Live" last night, company CEO Edward Liddy tried to set the record straight.
(BEGIN VIDEO CLIP)
LARRY KING, HOST, "LARRY KING LIVE": Did you realize, Ed, that this meeting would create a public uproar?
EDWARD LIDDY, CHAIRMAN, CEO, AIG: You know, we thought there was a good chance that it would be received poorly. It certainly was. But, Larry, I'd really like just the opportunity to explain what it was. It was not an executive retreat. It was 150 independent financial planners, they're not AIG employees. They could sell any products they wants. Any of our competitors. The purpose of this is to do education and training so they would understand our products, how to sell them, and who they should sell them to. If mortgage brokers had done more of this with subprime mortgages, we may not have been in the mess that we're in. So this is an educational seminar for the tens of thousands of independent brokers and financial planners that AIG works through. This was 150 people. It wasn't AIG executives. It wasn't AIG employees.
(END VIDEO CLIP)
HARRIS: OK. And there you have it. Both sides of that story.
You shopping for the holidays yet? Yes, it's that time already to start looking at the most popular holiday toys and the safety issues surrounding them. A big announcement today on what the biggest dangers are this year. CNN's Josh Levs, there he is, he joins me now with this story.
Good to see you, Josh.
JOSH LEVS, CNN CORRESPONDENT: Yes, good to see you too.
We were keeping a close eye out for this. We're getting close to -- by Friday a couple of weeks from now, right, the day after Thanksgiving.
HARRIS: That's right.
LEVS: So let's take a look at this. You know, the Consumer Product Safety Commission just today released this list. This is the number one place people go to to learn about what the toys are that they should be concerned about. What hazards to watch out for. Let's get straight to this. We have a graphic for you here. This is the first thing that they say to be careful about this year. Scooters and riding toys. That's the top hazard they're talking about. They say skateboards, in-line skates, those kinds of things. Make sure helmets and safety gear worn at all times.
Next, small balls and other toys with small parts. For kids under age three, avoid these because they can cause choking.
Third now, balloons. Kids under eight can choke or suffocate on uninflated or broken ones. Fourth, they say magnets. For kids under age six, avoid building or playing sets with small magnets. We've heard these horror stories before, if a kid swallows magnets, they could cause injury or even death.
Finally, they point to this. Watch out for chargers and adapters. They should always be supervised by adults. They can pose thermal burn hazards to kids.
Now this list is obviously not shocking. You probably have heard about these hazards before. The key here is that they're saying it's easy to be lax about some of these things. The CPSC is saying make sure to take this very seriously. Also keep a close eye on how toys are marked when you buy them at the store. Needs to be appropriate for the age that you're buying them for.
And keep the CPSC list handy. You can print it out here. It's easy to get to, cpsc.gov. It's at the very top. It will makes it easy for you to find now, Tony.
HARRIS: Yes, that's good. And the CPSC had some pretty grim stats from last year, is that correct, Josh?
LEVS: They did. Yes, they're saying now what it was like last year. Let's zoom way in. I made the text huge here. They're saying for 2007, the commission has reports of 18 toy-related deaths and CPSC staff estimate about 170,000 hospital emergency room treated toy- related injuries to kids under 15 last year. So, obviously, that's a lot.
But I also want to take a moment to say, you know, we don't want toys to become depressing or a depressing subject. Obviously we have to talk about the safety. But toys rock. They're fun. And I just think kids should get them. Just be careful. I know I'm Captain Obvious, but I've got to say that.
HARRIS: There you go, Josh. Thank you.
LEVS: Thanks, Tony.
The U.S. military has told its troops to stay away from YouTube. But now they have an alternative.
(COMMERCIAL BREAK)
HARRIS: OK. So here's a story that will get your attention. A Texas pastor is sending his married parishioners to bed early, and not for sleep. You get where I'm going with this?
(BEGIN VIDEO CLIP)
PASTOR ED YOUNG, ED YOUNG MINISTRIES: And I'm going to challenge you to have sex with your spouse for seven straight days.
(END VIDEO CLIP)
HARRIS: Was there more to that? That sermon was delivered on Sunday. Pastor Ed Young says he hopes it will help couples reconnect.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: I think it's a great idea. Yes. Because I know that it brings an intimacy with the couple when you're together.
UNIDENTIFIED FEMALE: It should be happening already in your relationship. You shouldn't have to do it every day.
(END VIDEO CLIP)
HARRIS: Pastor Young says he believes the church should speak more openly about sex because the scriptures do. And he says he plans to, you know what, he plans to practice what he preaches. Yes.
Every segue I can come up with is awfully uncomfortable. Chad Myers and the -- is this what goes -- passes for marriage counseling these days?
(WEATHER REPORT)
HARRIS: Videos for the troops overseas. The military has launched an online video destination for the troops and their friends and family.
Veronica De La Cruz joins us now with details -- Veronica.
VERONICA DE LA CRUZ, CNN CORRESPONDENT: Don't do that, Tony.
HARRIS: No, no, no, I wouldn't dream of it.
DE LA CRUZ: That's terrible. How dare you. How dare you.
HARRIS: Of getting a guy in trouble. Come on, I need him here.
Good to see you.
DE LA CRUZ: Nice to see you. Let's talk about trooptube.tv. You might remember, Tony, about 18 months ago the military cut access to YouTube. They were citing security concerns. Bandwidth issued. Well, they've been working to address those issues. They've launched this new site. It is called trooptube.tv. It's an online video sharing place dedicated to those overseas who do want to keep in touch with their friends and family.
And just like YouTube, Tony, it is arranged by category. The video's broken down by Army, Navy, Marines. You can search under different themes. Maybe holidays, pets, friends, family. And right now we're looking at the most watched video on the site. It is a message from General David Petraeus.
(BEGIN VIDEO CLIP)
GEN. DAVID PETRAEUS, U.S. COMMANDER: Hey troopers, this is General Dave Petraeus saying thanks for your tremendous work in Iraq, Afghanistan and around the world. You really are the new great generation. Army strong.
(END VIDEO CLIP)
DE LA CRUZ: All right. So there we saw a message from Petraeus from a conference in Washington, giving a shout-out to the troops. And then other popular video postings look like this, Tony.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Hey, we want to give a shout-out to 3rd Brigade 8 Troop 133 CAB (ph).
UNIDENTIFIED FEMALE: Go (INAUDIBLE).
UNIDENTIFIED FEMALE: Thank you for all that you are doing and we can't wait to see you. We'll see you on the airfield.
UNIDENTIFIED FEMALE: Be safe and come home fast. We love you!
(END VIDEO CLIP)
DE LA CRUZ: Oh, and that was Kris Invalvere (ph) and Joy Osma (ph). They were giving a shout-out to their husbands currently deployed with the 3rd Brigade 8 Troop 133 Cavalry.
Again, the Web site is trooptube.tv. It is in beta testing. Pretty good, right?
HARRIS: Yes, that is awesome. Keep us posted on it. It's being tested right now?
DE LA CRUZ: I will.
HARRIS: I like that.
DE LA CRUZ: Excuse me.
HARRIS: It's in testing?
DE LA CRUZ: Yes, it's in beta testing right now. So we're going to see how it does. And I also want to let you guys know what we're working on for tomorrow.
HARRIS: Nice.
DE LA CRUZ: We're talking about social networking sites and issues that could occur with them. Maybe scams, viruses. Namely Facebook. So it's something that we're discussing on our Facebook group. And, of course, you know where to find us. Just search Veronica De La Cruz in the CNN NEWSROOM with Tony Harris.
HARRIS: Awesome.
DE LA CRUZ: I'm also on Twitter these days, veronicadlcruz. And so is Tony.
HARRIS: I am?
DE LA CRUZ: Yes, I created an account for you. We'll talk about it during the break.
HARRIS: All right. Well, we'll discuss -- hmm. Veronica, thank you.
How about this? Grandma's going to the White House.
(COMMERCIAL BREAK)
HARRIS: So eight days left to vote for your favorite CNN hero. Let's get this done. I mean you're in the habit of voting now, right? Go to cnn.com/heroes to see their stories and then vote. Then join Anderson Cooper Thanksgiving night to find out who will be CNN's hero of the year. Vote now. Here's the address again, cnn.com/heroes. Only eight days left.
How about this. When the new first family moves into the White House, will grandma come too?
CNN's Alina Cho take as look.
(BEGIN VIDEOTAPE)
ALINA CHO, CNN CORRESPONDENT, (voice over): No final decisions yet on whether she'll be living at 1600 Pennsylvania Avenue, but we do know that Marion Robinson will be moving from Chicago to Washington at some point soon. And all the talk is she'll likely be moving into the White House. Now remember, this is Barack Obama's mother-in-law. Michelle Obama's mother. And beloved grandmother to Malia and Sasha.
So who is she? She may be the one person in the Obama family who keeps the whole operation running.
(BEGIN VIDEOTAPE)
CHO: Call her the first baby-sitter. Seventy-one-year-old Marian Robinson is grandma to 10-year-old Malia and 7-year-old Sasha. For nearly two years, she's been the primary caregiver when mom and dad have been away, taking the girls to school, piano and tennis lessons. Now she, too, may be moving to the White House. The Obamas not only want her, they need her.
MICHELLE OBAMA, BARACK OBAMA'S WIFE: There is nothing that makes me rest more now that I have to work than to know that my kids are being loved and cared for by someone who is teaching them values and discipline and giving them a little extra candy every now and then.
CHO: Not just candy. Her fried chicken with Ritz crackers in the batter. Famous. The girls love it. Close family friends call her wise, even keeled and fun. And she freely admits she sometimes breaks the rules. At home, she makes sure that Malia and Sasha are in bed by 8:30. But at her house, the girls can stay up late, play games and watch as much TV as they want.
MARIAN ROBINSON, MICHELLE OBAMA'S MOTHER: I'm doing it, but I really want to do it. It's not even a job. It's like -- if somebody's going to be with these kids other than their parents, it better be me.
CHO: Robinson wouldn't be the first, first grandma to live at 1600 Pennsylvania Avenue. Perhaps the most notable, Madge Wallace, mother-in-law to President Harry Truman.
UNIDENTIFIED MALE: Harry Truman was deeply in love with Bess Truman. He called her, the boss. Well, the boss' boss was Bess Truman's mother.
CHO: And the boss' boss never liked her son-in-law, the commander in chief.
UNIDENTIFIED MALE: The truth is, the mother-in-law never considered Harry Truman worthy of her daughter, even after he become president.
CHO: By all accounts, the Obama family dynamic is different.
UNIDENTIFIED MALE: If it all works out, it could be great PR for mothers-in-law.
CHO (on camera): Barack Obama had made it clear that he loves his mother-in-law. But one political historian we spoke to says, you know what? If there's any tension we're not going to hear about it until after the books are written. That's when the juicy stories come out of course. One thing is certain, though, everyone we spoke to believes Marian Robinson moving into the White House is a good thing, not only for the Obama girls, but for the first couple, too.
Alina Cho, CNN, New York.
(END VIDEOTAPE)
HARRIS: See now, Kyra always has a great guest on her show. And you've got Michelle Obama's biographer coming up?
KYRA PHILLIPS, CNN ANCHOR: I do. I've got all kinds of scoop on the upcoming first lady.
HARRIS: I can't wait.
PHILLIPS: And by the way, I'd love to have my mom in the White House with me. That would be fantastic.
HARRIS: Look, Barack, don't veto that. Don't do it. Please.
PHILLIPS: That could be his first stamp. Boom, keep her. Just keep her in the White House.
HARRIS: The next hour of CNN NEWSROOM with this lady, Kyra Phillips, starts right now.
