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Illinois Governor Accused of Corruption; Barack Obama's Reaction; Auto Bailout Loan Bill

Aired December 10, 2008 - 11:00   ET

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

TONY HARRIS, CNN ANCHOR: It is Wednesday, December 10th. And here are the top stories we're following for you this hour in the CNN NEWSROOM.
Busted and out on bail. Illinois Governor Rod Blagojevich accused of a stunning corruption scheme, which brings us to our e-mail question. Do you trust your local leaders?

Deal or no deal? Congress could vote today on bailout loans for the automakers.

And weather watch. A huge system moving from the Deep South to the Northeast. Heavy rains, severe storms and snow.

Good morning, everyone. I'm Tony Harris. And you are in the CNN NEWSROOM.

He may be down, but he is not out. Illinois's embattled governor, Rod Blagojevich, back at work just last hour, just one day after his arrest on corruption charges. The governor denies any wrongdoing, but the evidence seems damning. Prosecutors say they have him on tape clearly talking about how he can benefit from filling Barack Obama's vacant Senate seat.

(BEGIN VIDEO CLIP)

PATRICK FITZGERALD, U.S. ATTORNEY: The most cynical behavior in all this, the most appalling, is the fact that Governor Blagojevich tried to sell the appointment to the Senate seat vacated by President-elect Obama. The conduct would make Lincoln roll over in his grave.

The governor's own words describing the Senate seat, "It's a (EXPLETIVE DELETED) valuable thing. You just don't give it away for nothing." Another quote, "I've got this thing, and it's (EXPLETIVE DELETED) golden. I'm just not giving it up for (EXPLETIVE DELETED) nothing."

"I'm not going to do it, but I can always use it. I can parachute me there."

Those are his words, not our characterization.

SHELDON SOROSKY, GOV. BLAGOJEVICH'S LAWYER: Truly upbeat and very sad and disappointed that this occurred. He feels he didn't do anything wrong. REP. DANNY DAVIS (D), ILLINOIS: I was devastated. As a matter of fact, I thought immediately that, you know, this is a terrible day for the citizens of Illinois. But more importantly, it's a terrible day for the institution of government. And it undergirds and erodes confidence that people have in the government, and it's so unfortunate.

(END VIDEO CLIP)

HARRIS: Well, the long list of charges against Blagojevich includes conspiracy to commit mail and wire fraud, as well as solicitation of bribery. A 76-page FBI affidavit says the Democratic governor was caught on court, authorized wiretaps over the last month. Blagojevich is still governor, however, so he still has the power to fill Barack Obama's now vacant Senate seat.

Live now to our Susan Roesgen. She's in Chicago.

And Susan, I'm just sort of curious, what are the local papers saying about all of this? And might the governor still appoint someone to fill Obama's Senate seat?

SUSAN ROESGEN, CNN CORRESPONDENT: Well, the local papers are saying, shame on you and resign. And as far as that Senate seat goes, Tony, there's been a lot of talk about that, because as you pointed out, he is still our acting governor here in the state of Illinois. And yet, the state attorney general says that he should not have the right at this point now to appoint someone to fill Barack Obama's Senate seat. So there's a lot of controversy here on whether they should do that or not.

Now, we are here in his neighborhood. You know, Tony, he was arrested in his pale blue jogging suit yesterday. The neighbors here are used to seeing him jogging. I talked to one neighbor who said she remembered seeing him at Halloween this year taking one of his daughters around trick or treating.

Most of the neighbors we talked to here this morning, Tony, said it's a nice family, they're nice people, but what's happened here is awful.

(BEGIN VIDEO CLIP)

MARY MALONE, NEIGHBOR: I walk my dog by his house several times a day. They're great neighbors, but I think what's happened is deplorable. And the citizens of Illinois deserve better. They deserve better in every governor, and I don't know why we can't seem to have honest government in Illinois.

SHERRY ROSENBLUM, NEIGHBOR: It's depressing to see all the cameras here for this reason. It should be for a good thing instead of a bad thing.

It should be because we just elected a president from here. And now to have this happen with the governor -- and, you know, we were enjoying something good about our city. We want our city to have a very positive image, and to have something like this happen makes it more -- more negative. And you don't want people to view us as that.

(END VIDEO CLIP)

ROESGEN: And, in fact, this is the governor's house here right behind me. One of the newspapers, Tony, had a shot of a tourist taking a picture of the governor's house. And certainly that plays to the fact that Obama has had so much positive publicity.

HARRIS: That's right.

ROESGEN: I did a story on people taking tours of his neighborhood, taking pictures. And now we have -- I guess you go from famous to infamous.

We do have a short statement from the governor's office, just a couple sentences. "The allegations do nothing to impact the services, duties or function of the state of Illinois. Our state will continue to ensure health, safety and economic stability for the citizens of Illinois."

Now, what we don't know this morning is whether or not when the governor went to his office in downtown Chicago the staff said, "Happy birthday, Governor," because it is, you know, his 52nd birthday today -- Tony.

HARRIS: Boy. OK. Susan Roesgen -- some kind of a birthday present the last couple of days here -- in Chicago for us.

Susan, good to see you. Thank you.

There are no allegations against President-elect Obama in the Blagojevich scandal, but the governor's troubles are an unwelcome distraction, as you can imagine.

Elaine Quijano is covering the Obama transition in Chicago.

And Elaine, good to see you.

What is the president-elect saying about all this?

ELAINE QUIJANO, CNN WHITE HOUSE CORRESPONDENT: Well, good morning to you, Tony.

Well, President-elect Barack Obama made it a point to talk about this yesterday after a meeting that he had with former Vice President Al Gore to talk about climate change issues. During that session, at the end of it, he was asked a question about whether or not he had any contact with or was aware at all of what was happening with his Senate seat. And here is how the president-elect responded.

(BEGIN VIDEO CLIP)

SEN. BARACK OBAMA (D-IL), PRESIDENT-ELECT: I had no contact with the governor or his office, and so we were not -- I was not aware of what was happening. And as I said, it's a sad day for Illinois. Beyond that, I don't think it's appropriate to comment. (END VIDEO CLIP)

QUIJANO: Now, what he said there seems to contradict something that his senior adviser, David Axelrod, told a local TV reporter here in Chicago a couple of weeks ago, that Obama had had a conversation with Governor Blagojevich about his Senate seat. Well, late yesterday David Axelrod issued a statement correcting what he said a couple of weeks ago, saying, "I was mistaken when I told an interviewer last month that the president-elect had spoken directly to Governor Blagojevich about the Senate vacancy. They did not then or at any time discuss the subject."

Now, I should make clear once again that U.S. attorney Patrick Fitzgerald said there are no allegations about the president-elect contained in the federal complaint filed yesterday. However, it is not clear yet, still very much an open question, Tony, who exactly on the Obama team may have had a conversation with either the governor or someone in the governor's office. Tony, we still don't know the answer to that question at this point -- Tony.

HARRIS: Yes. And Elaine, that just drives home the next point here. How much of a distraction really is this story, has this story been for Barack Obama? We're just 41 days until the inauguration and he's knee deep in transition.

QUIJANO: Right. Well, clearly, this is a huge headache for the Obama transition team. Yesterday, of course, the message of the day was to have been this high-profile visit by the former vice president, Al Gore, to talk about green jobs as a way to help boost the U.S. economy. Of course, this is all happening against the backdrop of the ongoing economic crisis in this country.

So the message yesterday was really supposed to be about the economic recovery plan and the green jobs, and sort of pushing that idea forward. Instead, of course, transition officials having to deal, and even the president-elect himself feeling compelled to answer a question as the story developed yesterday of Governor Blagojevich's arrest. Certainly not what the transition team or the president-elect had hoped or planned to deal with just 41 days out from inauguration -- Tony.

HARRIS: Yes. Exactly.

OK. Elaine Quijano in Chicago for us.

Elaine, good to see you. Thank you.

What does the Illinois governor scandal say about politics in America? We are certainly looking for you views on this.

Josh Levs is tracking that for us.

Josh, good to see you. Good morning.

JOSH LEVS, CNN CORRESPONDENT: Yes, good to see you too.

You know, this gets right at what we were just talking about in our morning meeting...

HARRIS: Yes, that's right.

LEVS: ... actually today, the relationship between Americans and the people who represent us. The people that we pay and elect to represent us is so frayed.

What does this kind of thing say? Do you trust your elected leaders?

Let us know. Think about the people that you are electing them, whether you voted for them or not. Do you trust them?

E-mail us, cnnnewsroom@cnn.com. Also, you can send us an iReport, ireport.com. We ask you to please include your name and the city where you live.

I actually called downstairs to the fine folks at iReport, and they set this up as the top assignment right now.

Do you trust your leaders?

And when I get off the air here, I'm literally going to walk to the computer, start taking a look at your e-mails, your iReports.

And Tony, I'll be back later this hour to show you what people are saying.

HARRIS: Can't wait. All right, Josh. Appreciate it. Thank you.

LEVS: Thanks.

HARRIS: And we're just getting some -- a new report from The Associated Press that the White House and congressional Democrats have come to a deal on the big three bridge loan. We'll get to Brianna Keilar in just a moment on this, but here are the major provisions of that agreement now.

Cash-strapped automakers GM and Chrysler would get $15 billion in emergency loans. The president would then appoint a so-called car czar to be in charge of the process. That person would set the terms for the bailout loans and oversee the restructuring of the auto companies.

CNN's Brianna Keilar is on the story. She's on Capitol Hill for us.

And Brianna, it looks like, at least according to The Associated Press, there is some kind of a deal and agreement in place between the White House and congressional Democrats.

BRIANNA KEILAR, CNN CORRESPONDENT: Well, I think you could say, Tony, that things are certainly moving along. But you know how Capitol Hill is. Basically, there are a whole lot of cooks in the kitchen.

So if you're talking about the House side of things, they definitely appear to be moving along there. House Majority Leader Steny Hoyer saying that Democrats in the White House came to an agreement scrapping a provision that was really a deal-breaker for Republicans in the White House, and that was prohibiting automakers from suing states that set their own emission standards. This is something that the Democrats gave up in these negotiations.

According to Hoyer, this bill will be filed in the House, here in the next half-hour. So movement in the house.

We're hearing there could be a possible vote today there, but we're not sure. It's very unclear at this point exactly what time that would be.

But the Senate is very much a different story. Listen to Senate Minority Leader Mitch McConnell.

(BEGIN VIDEO CLIP)

SEN. MITCH MCCONNELL (R), MINORITY LEADER: As of this morning, we still haven't seen a final version of the bill. Once we do, we'll review it and see if it meets our standard for support which will be the taxpayers' standard for support. But as I understand indicated, and the majority leaders already picked up on that, there cannot be a vote on the legislation today because we don't know what it looks like.

(END VIDEO CLIP)

KEILAR: And Senate Majority Leader Harry Reid opening the door really to talking about -- or discussions in the Senate on Thursday, on Friday. He's even left open the possibility of a weekend, of the Senate being here for the weekend, Tony, to discuss this. So you can see some movement in the House, but this is not a done deal. A lot of Republican senators who are still very much in opposition to this plan.

HARRIS: OK. And Brianna, if I could, it seems CNN has confirmed that there is at least an understanding, an arrangement, an agreement between the White House and congressional Democrats. But to your point, there is still a lot of opposition to this arrangement among GOP Senate Republicans.

Brianna Keilar on Capitol Hill for us.

Brianna, thank you very much.

And we want to get you to the White House now, where Joel Kaplan is talking about where we are in this process right now. Let's listen.

(JOINED IN PROGRESS)

JOEL KAPLAN, DEP. WHITE HOUSE CHIEF OF STAFF: ... to individual senators to try to win their support. We've also got the chief of staff, Josh Bolten, going up to address the Senate Republican conference in a couple hours.

So, you know, we understand that this is a very difficult issue for everybody involved. We think we've come up with the right solution and we're going to try to persuade members of Congress from both sides that that's the case.

QUESTION: How about President Bush? Is he going to get personally involved?

KAPLAN: I expect you'll see the president talk to various members as he thinks it's necessary or the staff advises him. This is an important measure and we're going to try to get it passed.

Yes, sir?

QUESTION: What are the executive compensation restrictions?

KAPLAN: There's a whole bunch of them and they're very significant. They track what you've seen in the TARP legislation and its implementation.

There's a lot of them. And they apply to the top executives in the firm to make sure that they're not receiving bonuses that are not commensurate with the performance of the firm, especially while they're getting these loans. There's -- we can get them for you afterwards, what was in the TARP legislation, but I think everybody over the last few months has understood how important it is that there be very serious executive compensation provisions when the taxpayers' money is involved and the American people are being asked to support firms that up until now have not made meaningful, necessary, tough decisions.

HARRIS: And there you have it, the White House essentially saying we think we have come up with the right solution on the auto crisis. And I suppose the news there from Joel Kaplan is that the president will work for passage of this legislation.

We will continue to follow this story throughout the day for you in the NEWSROOM.

Your money, your life, your tough economic times. We're watching all the developments very closely.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: I don't know what we're going to do, how I'm going to be able to take care of my kids.

(END VIDEO CLIP)

HARRIS: This mother's despair as her financial debt gets bigger and bigger.

(COMMERCIAL BREAK)

(BEGIN VIDEO CLIP)

ROBERT D. GRANT, FBI AGENT IN CHARGE, CHICAGO OFFICE: I got here four years ago. A lot of you were in the audience, asked me the question of whether or not Illinois is the most corrupt state in the United States. And I didn't answer that question yes or no, and I can't answer that question today.

I don't have 49 other states to compare it with. But I can tell you one thing, if it isn't the most corrupt state in the United States, it's certainly one hell of a competitor.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

REP. JAN SCHAKOWSKY (D), ILLINOIS: The disrespect I think that he's shown for the people of Illinois, for the United States Senate, and the seat, seeing this seat as a prize that he could barter, I think it is -- it warrants his not being governor any longer of the state of Illinois. It seems that all of these things that he was plotting for have to do with personal gain.

(END VIDEO CLIP)

HARRIS: A reaction there following the arrest of Illinois Governor Rod Blagojevich. Federal prosecutors accuse him of conspiring to sell or trade Barack Obama's Senate seat to the highest bidder. The governor denies any wrongdoing.

So many questions still left unanswered. If the charges are true, how can a public official be so blatant about disregarding the law? And how long did others know this was actually going on? Then there's the question of Chicago's culture of public corruption.

Here to answer all of this hopefully -- I don't know how many time we have -- the "Chicago Sun-Times" Washington bureau chief, Lynn Sweet.

Lynn, good to see you. Good to talk to you. Good to see you today.

LYNN SWEET, WASHINGTON BUREAU CHIEF, "CHICAGO SUN-TIMES": Good to see you.

HARRIS: Lynn, honestly, based on what you now about the complaint, including the governor in his own words from the wiretaps, do you believe he should step down?

SWEET: I think that he's ineffective as a practical matter. Whether or not he steps down or impeached, I think is just a question that time will resolve in a very short time. The legislature is going back into a special session next week, Tony, to strip him of his power to pick his replacement. So one way or the other, I think his days as a functioning governor are basically over.

HARRIS: Stripping him of his power is one thing, impeaching him is another. Should the legislature move forward with proceedings to impeach him?

SWEET: Oh, I think it's in the works right now. So the reason this complaint is so stunning is that there had been talk of Blagojevich's impeachment even before this.

HARRIS: Really? SWEET: The stuff that is the most sensational, having the selling of the Senate seat, is just the top of the iceberg here. There has been investigations of the governor for years. That he wasn't more careful in his conversations is especially surprising, because in Illinois, in Chicago, people have been wired and tapped all the time because there's so much public corruption that goes on. And the stuff that got him in the most trouble is some things that happened just in the last few weeks, when he knew or had to know or should have known he was under intense scrutiny.

HARRIS: I'm going to take a big step back here. I wanted to go in another area, but your comments just a moment ago makes me want to go in this area.

Will you please talk to us about the shakedown culture in Chicago? Help us understand this for people who are watching this from other parts of the country and are shaking their heads at even the notion that this pay-to-play culture exists to the extent it does in Chicago and in Illinois.

SWEET: Well, I'll try and explain it. It's pay to play, and its cousin, pinstripe patronage. And it goes like this -- Illinois has wide open finance laws.

Most state officials -- now remember, that's different than a federal official, so we're talking about state and local officials -- can take as much money, as often as you can give it. So it's not unusual for -- in Blagojevich's case, he had $100,000, $200,000, $250,000 contributions. It's not untypical in these races.

We have an alderman in Chicago that has a multimillion-dollar war chest. OK?

So here is what has happened, and it's a deplorable situation. I've been reporting about it for years, is that basically public officials have gone to people who they do business with as public officials and asked them to help do their fund-raising.

So it's packaged in a pretty veneer. You know, if you're a contractor who does business with a city hall or a state agency, you want to do it because you really want to be supportive of the good programs. But people know what the game is. That's why they call it pay to play. It's not pay to govern, it's pay to play.

HARRIS: Right. So Lynn, here is the question -- if I don't ask this question, people around the country are going to be on my case about it -- does any of this, from your reporting, any of this stick to the president-elect or to any of the members of team Obama that you're aware of at this point in time?

SWEET: I think it would be useful just to have the answers, and it would be hard since there's an ongoing investigation, just to know if there were any conversations with any members or any emissary that the Obama team had with Blagojevich. This would not have been wrong. It wouldn't have been illegal. It probably would have been politically, you know, astute. I'm sure President-elect Obama has an interest who his replacement is. I think now we might not know these answers because there's an ongoing investigation, and prudent people usually don't talk during that. And certainly this team is prudent. I think that what this episode shows is how reluctant people are just to speak out on the culture of corruption until you have kind of like the most outrageous example of it that you have with Governor Blagojevich.

HARRIS: And now more people feel free, presumably, to talk about it?

SWEET: Well, this is a little over-the-top stuff that's in the complaint. So this is more than our garden variety.

But you don't have good public officials in Illinois getting together. We don't have real tough ethics laws. We don't have campaign contribution caps.

So for all the talk about the cleaning up Illinois has tried to do, it still has a long way to go. This culture of corruption and tolerance for pay-to-play politics tied up in political contributions is at the root of a lot of what is happening.

HARRIS: Lynn, thank you so much.

Lynn Sweet with us this morning.

Good to see you, Lynn. Thanks for your time.

SWEET: Good to see you. Thank you.

HARRIS: And of course we want to hear from you this morning. Following the Blagojevich arrest, do you trust your elected leaders?

Send us an e-mail. Do it right now, cnnnewsroom@cnn.com.

And are you ready for some real irony here? In 2002, while running for governor, Rod Blagojevich put out this ad...

(BEGIN VIDEO CLIP)

ROD BLAGOJEVICH (D), GUBERNATORIAL CANDIDATE: Illinois is the land of opportunity. Family, community, patriotism are the values that make us strong. But over the last several years our state has been adrift, corruption has replaced leadership.

I'm running for governor because I believe Illinois can do better.

(END VIDEO CLIP)

HARRIS: How about that?

All right. Still to come in the NEWSROOM, making sure you get the most out of your money this holiday season. Should you give gift cards?

There she is, our personal finance editor. Gerri Willis has top tips for you. That's next.

(COMMERCIAL BREAK)

HARRIS: Sagging sales, liquidation, bankruptcy, it is the perfect storm hitting retailers this season, and you, if you're not careful.

To help you avoid shopping mistakes, Personal Finance Editor Gerri Willis is here.

Gerri, good to see you.

GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Hello, Tony.

HARRIS: Let's start with -- you know, you want to start with gift cards and what we need to know?

WEBSTER: Yes. Easy here. Bottom line, avoid buying cards from financially distressed retailers.

Look, Tony, so far this year, consumers have lost millions in gift card value to bankruptcies. If a retailer goes bankrupt, your gift card, well, it may be honored and it may be stuck in a bankruptcy court, along with other creditors. So you want to make sure that you're only buying these at retailers that are in really good shape.

And the headlines are in the paper. You can find it out.

HARRIS: Yes. It doesn't sound like we would be the first in line to get the money from the bankruptcy proceedings. Yes.

WILLIS: No, no. You're right.

HARRIS: How about the bank-issued cards? Are they any safer?

WILLIS: Well, no. And more importantly, it's still not the best deal out there.

Look, ,in November, the FDIC expanded its insurance to include bank- branded prepaid gift cards, but only if your name and information is registered and attached to your card purchase. And you just don't do that, right?

HARRIS: Yes.

WILLIS: It's not often that grabbing a gift card off the shelf you do that. So, if your bank goes under, then you're unlikely to have any insurance, according to the FDIC. Plus, bank cards, hey, look, they're saddled with fees and expiration dates. Consumer groups have asked the FDIC to insure that gift card proceeds held in banks, whether for the bank itself or for retailers, are insured.

We'll keep you up to date, but it's not my first choice either.

HARRIS: Well, what are you learning about return policies?

WILLIS: Hey, there's some good news. HARRIS: Oh, good, we'll take it.

WILLIS: I little tiny silver lining here.

This year a little more than half of retailers polled by one retail group, they say holiday return policies are more lenient this year, hallelujah. Some stores have streamlined and increased the time you have to return items by as much as three weeks in some case. Other stores like Sears are easing restocking fees. Of course it hasn't happened across the board. Best Buy has shortened the time you have to return your stuff by a week.

That said, you should still make sure you understand exactly what the return policy is. And Tony, Tony, Tony, if you go to a store and buy something that's in liquidation, what do you think?

HARRIS: Yeah. Look, you're not going to be able to return it. You own it.

WILLIS: No. Use your brain. OK. Send your questions to gerri@cnn.com. We love to hear about you. Tell us what you're seeing out there when you're shopping during the holiday season, any special deals.

HARRIS: Awesome, awesome, awesome.

All right. Gerri, good to see you. Use your brain. That's the line of the day. Turn to cnnmoney.com for advice and answers. Check out our special report. "America's Money Crisis" at cnnmoney.com.

HARRIS: People everywhere, everywhere feeling this economic pinch. Even the kids.

(BEGIN VIDEO CLIP)

UNIDENTIFIED FEMALE: They want to go see Santa, and I don't want them to not go see Santa, but at the same time, I don't want to give them false hope.

(END VIDEO CLIP)

HARRIS: Time is running out for this mother's holiday wish. Plus let's see some live pictures. Is he behind the mike working? Wiping the brow because the questions are hot. Correspondent Ali Velshi on the radio. Will someone let him know he's on the air?

We'll talk to him in just a couple minutes.

ALI VELSHI, CNN CORRESPONDENT: Oh, I am!

(COMMERCIAL BREAK)

HARRIS: Just how is the Treasury Department spending $70 billion of your taxpayer dollars? That is the focus a hearing going on right now on Capitol Hill. Live pictures now.

The House Financial Services Committee questioning how the financial rescue program has been implemented so far and whether it is working.

Also very key here, while we were bringing you news about the auto bailout loan moments ago, the Treasury's bailout chief was responding to the committee's concerns.

(BEGIN VIDEO CLIP)

NEEL KASHKARI, INTERIM ASSISTANT TREASURY SECRETARY: We're in an unprecedented period. And market events are moving rapidly and unpredictably. We at treasury have responded quickly to adapt to events on the ground. Throughout the crisis we have always acted with the following critical objectives. One, to stabilize financial markets and reduce systemic risk. Two, to support the housing market by avoiding preventable foreclosures and supporting mortgage finance. And three, to protect the taxpayers.

(END VIDEO CLIP)

HARRIS: Well, committee members also challenging the Treasury Department's reluctance to use the money to reduce foreclosures.

On Wall Street, a wave of job cuts dragged stocks down yesterday as you'll recall despite a batch of similar announcements today, the market is staging a bit of a comeback, triple digit territory here. Susan Lisovicz is at the New York Stock Exchange with the latest companies to lay off workers. Susan, good morning.

LISOVICZ: Good morning, Tony. Unfortunately this is a daily roundup. It's been happening with increasing frequency. And these are steps a lot of companies feel they need to take either proactively or as a result of what they're already seeing. And really what Mr. Kashkari was talking about, these unprecedented times that we're living in. Two tech companies the latest to reduce their company. Electronic Arts, if you don't know the name, you know the products. It's the company behind "Madden NFL", "Need for Speed" and the "Rock Band" series. Well, it announced an unspecified amount of staff reductions before the opening bell this morning and cut its earnings guidance for next year.

Yahoo! also begins handing out pink slips today. The Internet giant following up on previously announced plans to cut 1,400 employees or 10 percent of its workforce. Meanwhile, Rio Tinto will cut 14,000 jobs worldwide to cope with the global recession, the miners witnessed weakened demand for its iron ore and other metals.

It shares that trade here at the NYSE, right now they have, actually they're up 22 percent. Sometimes volatile here, Tony. I have to take a double look. For the broader market, we've been higher from the open, the Dow right now just shy of those triple digits, just shy, up one percent as is the NASDAQ and S&P 500, Tony.

HARRIS: Susan, another company that a lot of people really see as an American icon is taking some drastic steps?

LISOVICZ: Eastman Kodak, the photo pioneer, withdrawing, Tony, its full year operating and sales forecast, it says it will deny salary increases for management next year. We've been seeing that with increasing frequency, as well as suspend its 401(k) match. So that's something that a lot of folks are going to be seeing. It's the slowdown in consumer spending. Kodak says the action is prudent giving the likelihood of a prolonged recession.

Meanwhile, Office Depot is closing more than 100 underperforming stores in North America over the next few months and an additional 14 when their leases expire next year. So a lot of downsizing from all sectors, Tony.

HARRIS: Susan, thank you. See you next hour.

Well, where do the lay-offs end? More than half a million people lost their jobs last month, just heartbreaking news. And unfortunately for many of the unemployed, the luck seems to be getting worse. Here is CNN's Lisa Sylvester with the story of an Ohio factory worker.

(BEGIN VIDEOTAPE)

LISA SYLVESTER, CNN CORRESPONDENT (voice-over): Tina Stiffler of Mansfield, Ohio, has known hard times before, but never like this. Friday was her last day at the Albico Uniform factory. The plant which has been making uniforms for police and firefighters for a century is shutting down. Stiffler has five young children. And her husband was laid off from his job four months ago.

TINA STIFFLER, UNEMPLOYED FACTORY WORKER: I don't know what we're going to do, how I'm going to be able to take care of my kids. The ladies that I worked with, I was scared for them because most of them have worked there their whole lives.

SYLVESTER: Stiffler thinks about others as her own situation is dire. She and her family moved in with their mother-in-law after they couldn't afford to pay their rent. Now her mother-in-law's home is in foreclosure. She's tried to keep her kids shielded from what's going on.

STIFFLER: I can't even buy them winter boots right now because every penny I've got has got to go either in groceries or in the gas tank. So right now it's just so unbelievably hard.

SYLVESTER: She will receive about $115 a week in unemployment. But that's barely enough to pay utilities. And the bills keep piling up. Christmas is around the corner, but not for their household.

STIFFLER: They want to go see Santa. And I don't want them to not go see Santa, but at the same time, I don't want to give them false hope. The reality is things -- I don't even want to think about Christmas.

SYLVESTER: Stiffler says at a time when congress has bailed out insurance companies, automakers, she could really use the bailout.

(on camera): Tina Stiffler and her family have been told by the sheriff's office that they have to be out of the home they're living in by the end of this week.

Lisa Sylvester, CNN, Washington.

(END VIDEOTAPE)

HARRIS: So the next generation may inherit this economic crisis. With that in mind, I spoke with a group of high school kids in Atlanta recently who really had a lot of sharp comments on all of this. It is part of my Friday series, "Class in Session." Take a listen.

(BEGIN VIDEOTAPE)

TAYLOR FULTON, GRADY HIGH SCHOOL STUDENT: Our parents made these decisions, and our leaders, our past leaders made these decisions. It's not me blaming them. It's me taking what they've done and saying I'm going to fix it later.

CAROLINE MCKAY, GRADY HIGH SCHOOL STUDENT: Our generation in America in the future is going to have to have a decreased standard of living. We're going to have to spend more carefully, not spend as much. But I think that that's just the natural cycle of things.

HARRIS: Yeah?

MICHAEL ROBINSON, GRADY HIGH SCHOOL STUDENT: I feel like it's going to fall on us, and I feel like the previous generations of this country, especially the baby boomers, have really left us with a nasty pile of something to deal with.

HARRIS: A nasty pile?

ROBINSON: Yeah.

(END VIDEOTAPE)

HARRIS: You can hear more of my conversation with these really smart kids on Friday at noon. That's when Class is in Session with the doctor, this Friday at noon Eastern.

Damaged but no injuries from tornadoes that touched down in Louisiana. Forecasters say at least three twisters hit Alexandria, Louisiana. Look at these pictures. The storms knocked down trees and scattered debris. Two tornadoes touched down near the Red Cross headquarters. The third toppled the wall of a local business. Let's get to Rob Marciano in the severe weather center. Rob, is this the classic case of warm air colliding with cold and when that happens, we get some really bad results?

ROB MARCIANO, CNN METEOROLOGIST: Yeah. Considering what's going on in the atmosphere, I think the damage that we've seen, it could have been a lot worse. That said, look at the difference in temperatures.

(WEATHER REPORT)

HARRIS: All right, Rob. Appreciate it. Thank you, sir.

The arrest of Illinois Governor Blagojevich has a lot of you saying it's nothing new. All politicians are corrupt. We've gotten a ton of e-mails. We'll share some with you next in THE NEWSROOM.

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HARRIS: Out on bail and back at work, Illinois Governor Rod Blagojevich ignoring calls to step down one day after being arrested on federal corruption charges. He's accused of trying to sell Barack Obama's senate seat for campaign cash or lucrative jobs for himself or his wife. Earlier on CNN, John Roberts and senior legal analyst Jeffrey Toobin pointing out the evidence is shocking even for Illinois politics.

(BEGIN VIDEOTAPE)

JOHN ROBERTS, CNN ANCHOR: We've seen lots of things happen in that state, but nothing like this.

JEFFREY TOOBIN, CNN LEGAL ANALYST: That's true, John. Three governors have gone to prison since the 1970s in Illinois. So it is not exactly shocking to see political corruption in Illinois. But the brazenness of this, the cynicism, the delusional nature of the guy on these tapes is extraordinary.

I used to prosecute political corruption cases here in New York. I never saw anything like this. And the fact that the FBI felt that this guy was so dangerous to Illinois that they had to arrest him in his house at 6:00 a.m. yesterday tells you how extraordinary this case is.

(END VIDEO CLIP)

HARRIS: And that brings us to what we're asking you today. Do you trust your elected leaders?

Our Josh Levs is following that story for us. And Josh, what kind of responses are you getting?

JOSH LEVS, CNN CORRESPONDENT: About 95 percent no.

HARRIS: Yeah.

LEVS: I'll tell you. I think by asking this question, we really opened the flood gates. And it's interesting, the cynicism and frustration so many Americans feel with your elected leaders. We want to zoom in on the board. We grabbed e-mail straight off the computer. We're going to show them to you. Check this out.

Starting off with John. "I do not trust any elected official in this day and age. That's why I do not vote. No one is trustworthy."

Let's go down a little bit. "Not for a second." This is from Greg Skipper, that's why they seek these jobs. The jobs don't pay that much money. They make up the rest with bribes and kick backs. Everybody gets their palm greased."

We've got time for one more. Let's take a look at this one here. "I think if they aren't crooks when they get into office, they're surely crooks by the end of their first term."

That one is from Illinois. Carolyn Binion, Springfield, Illinois.

Let's show you a graphic that shows everybody the question, also where you can send your information. cnnnewsroom@cnn.com. Do you trust your elected leaders? Include your name and city when you write to us today.

Also another way for you to do it, check out the board behind me right here, ireport.com is asking this. Do you trust your elected leaders? Keep the conversation going there. And Tony, I'll tell you, there's been very, very few people who are saying anything positive. We want to hear all sides.

HARRIS: Particularly the day after you're going to be hard pressed to say, eh, I trust them, I love them. Let's see if we can do it next hour, Josh.

LEVS: You got it.

HARRIS: Appreciate it. Thank you.

This just in, we've been listening to Joel Kaplan at the White House about the auto bailout agreement between Democrats and the White House. I want you to listen in and we're going to bring on our Kathleen Koch.

(BEGIN VIDEO CLIP)

QUESTION: ... is saying that you have, quote, "finalized a deal." Is that the conceptual progress that you talked about at the beginning?

JOEL KAPLAN, DEP. W.H. CHIEF OF STAFF FOR POLICY: AP is sitting right over here, and they've got what I know. If somebody else at the AP has better information than the reporter in the press briefing room I can't do anything about that. I've not seen final legislation or agreed to it.

(END VIDEO CLIP)

HARRIS: All right. Let's bring in our Kathleen Koch here and see if we can and clear this up a little bit. That was a nice little light moment. But the AP is reporting there's been an agreement and CNN has been able to match that as well. What's your understanding here, is this just a bit of a semantics debate?

KATHLEEN KOCH, CNN CORRESPONDENT: Tony, basically has we believe happened here, you've got White House negotiators who are talking with Hill negotiators. They have finalized their agreement, but obviously, Joel Kaplan, the deputy chief of staff, was in the press briefing room with us and has not seen what they have agreed to on paper and has told us as much. And he had told us as much.

CNN had e-mailed out to everyone, yes, they've reached an agreement and I e-mailed back to them. Because only minutes before he said that he said in the briefing room we've not seen a version we've agreed to and have not reached that final stage yet so I e-mailed that out immediately to everyone. They say we have a deal, but he says no yet. So basically, it is just a little bit of a time delay here that we're seeing. Apparently this agreement has been reached on the Hill, and, again what it would involve is a car czar being appointed. An auto czar by the president who would accept these plans from the carmakers sometime before March 31st of how they would restructure and that person would determine whether or not the plans went far enough, viable, would they lead the company to viability? If they didn't, they would come up with their own plan for automakers, and that could indeed include Chapter 11 bankruptcy.

The way Kaplan put it today was that either they fundamentally completely restructure to where they are completely viable or bankruptcy. Those are really the two choices they have here.

Again, now, they're hoping that if this passes, that these companies would have access to some $15 billion, Tony in a matter of days.

HARRIS: You can let us know when the White House and congressional democrats are singing from the same songbook.

KOCH: We'll do that.

HARRIS: Doesn't happen at all. Appreciate it. Thank you.

Our chief business correspondent Ali Velshi is taking your calls right now at cnn.com and on the radio we will check in with him. We'll talk about the economy that is coming up next for you in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: Chief business correspondent Ali Velshi on the radio right now. Let's find out what his callers are talking about this morning. Ali, Ali!

VELSHI: Hello, my friend.

HARRIS: How are you, doctor. Good to see you.

VELSHI: We have been going through dozens and dozens of calls. It's all about the bailout. That's all everybody is calling in about it.

HARRIS: What are they saying to you? Is anyone in favor of it?

VELSHI: Yeah, yeah. There's a good split here. A lot of people in favor of it.

HARRIS: Can I stop you for a second?

VELSHI: Yeah.

HARRIS: We're not calling it a bailout.

VELSHI: A bailout - a loan.

HARRIS: We're talking about a loan package ... VELSHI: A loan package. But I think that's part of it. Tony, it's interesting, what's happened, people have listened to whether it's our coverage or other people's coverage, our callers. They are coming in with some very informed views, how do we tackle this? How do we know the money will be spent the right way? Can we trust they'll do it that way? Look what the banks did when we gave it to them. I have people on both sides of the issue, Tony, it's not crazy rancorous opinion. It's really refined ideas, and real concerns about what will happen if we let the auto industry fail and what will happen if we bail them out. Will they be back online?

HARRIS: Because the auto industry says so much of the middle class of this country, do you think that's part of it? And you know, we've done so much to sort of -- it feels like a top-down way.

VELSHI: Yeah.

HARRIS: Do you get that side of it as well?

VELSHI: Yeah. There are a lot of people critical of the auto companies and their leadership, there are a lot of people concerned about the ripple effect of any of these automakers going bankrupt. There are people concerned generally about how jobs are lost in the country. How much more and people are making the connection, if you have millions of people unemployed, that's going to be a problem.

HARRIS: That's right. Ali, we'll let you get back to your calls. Good to see you, as always. Let's do it again real soon, my friend.

VELSHI: Thanks, buddy.

HARRIS: My pleasure, man.

Your elected officials could decide today if there's a rescue loan, your tax money and your jobs in the next hour of the CNN NEWSROOM.

(COMMERCIAL BREAK)