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Cashing in on Obama Merchandise

Aired December 12, 2008 - 14:00   ET

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

(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: Is there any senator in the chamber who wishes to vote or to change their vote?

BETTY NGUYEN, CNN ANCHOR: Hit the road Big Three. After the bailout breakdown in the Senate, a White House U-Turn may be Detroit's last hope.

Forensic teams searching for secrets in a bag of child's bones. Is it Caylee Anthony? The latest developments from the scene and the courtroom.

And they wish you a "Barry" Christmas and Marketers pump out presidential paraphernalia to put under the tree.

(END VIDEO CLIP)

NGUYEN: Hello, everybody. I'm Betty Nguyen in for Kyra Phillips, today, live at the CNN World Headquarters right here in Atlanta. And you are in the CNN NEWSROOM.

Up first, Illinois Governor Rod Blagojevich won't quit on his own, so his top law enforcer is now trying to force him from office. We are following breaking news out of Chicago. Illinois Attorney General Lisa Madigan has filed a motion with the state supreme court urging it to declare Blagojevich unable to serve and temporarily remove him.

The governor, as you know, is accused of trying to sell Barack Obama's empty Senate seat to the highest bidder. And we have heard from the attorney general, just last hour in a news conference that you might have seen right here on CNN. Take a listen.

(BEGIN VIDEO CLIP)

LISA MADIGAN, ILLINOIS ATTORNEY GENERAL: Good afternoon.

This morning, my office filed pleadings with the Illinois supreme court requesting that Governor Blagojevich be temporarily removed from office. In the alternative, we have asked that the Illinois supreme court declare that he is prevented from filling the U.S. Senate vacancy, acting on legislation, directing contracts, directing the activities of the Illinois State Finance Authority, directing the activities of the Toll Highway Authority, and directing the disbursement of state funds. I have asked the supreme court to appoint the lieutenant governor as the acting governor pursuant to the Succession Act. I recognize it is an extraordinary request, but these are extraordinary circumstances.

(END VIDEO CLIP)

NGUYEN: Our Susan Roesgen was at that news conference and she joins us now live. Well, Susan, this news just keeps coming. We are now hearing that Governor Blagojevich is losing his top aide?

SUSAN ROESGEN, CNN CORRESPONDENT: Yes, his top aide John Harris, Betty, was also named in that federal criminal complaint. He is also accused of federal corruption charges. And so he has stepped down. The question is, will the boss step down? So there we saw the state attorney general here in Illinois say that she is going to move right away to push for a temporary restraining order to restrain the governor from continuing to act as the governor of this state.

She wants to get that in place first, and then she wants the Illinois supreme court to rule on whether or not he is fit to continue to be the governor, whether he can continue to legitimately and effectively, she said, lead the state. What is at issue here is the term "disability" as we mentioned in the last hour, the governor is physically OK. He is not disabled from doing his office. He is on life support politically, he is not on life support physically. So the state supreme court has to make a decision and determine whether or not he is able to continue to lead this state.

And one of the things they'll have to consider, Betty, of course is the constitutional right to a presumption of innocence, just because he has this criminal cloud hanging over him, he is presumed innocent until found guilty -- or not guilty. And so the state supreme court has to really think about this now whether they do indeed want to set a precedent here, and remove him by saying he is unable to continue.

At the same time, the state legislature, on Monday, is going to begin impeachment hearings, and that will take longer. And the big thing here, the big reason why they want to do this so quickly, is because everybody wants to know who is going to fill formerly Senator Barack Obama's seat now that he is the president-elect.

The governor still has the right to appoint a successor. The governor still could, even today, appoint himself to that seat, legally. And everybody wants -- that is around him, these political figures that are around him want to get him out, so that someone else can choose the successor.

Now, here is the rub, Betty. This is juicy political insider baseball for a lot of us here in Illinois, but for the country, the real key here is who is going to replace President-Elect Barack Obama's seat? And if this goes the way that the state attorney general has put forth that she would like it to go today, then the lieutenant governor, Pat Quinn would take over. He is also a Democrat, but the back story on that, Betty is that in this state they do not run together. The lieutenant governor and the governor don't run on the same ticket.

By all accounts, Pat Quinn despises Governor Blagojevich. He, then, would become at least the temporary governor and he says, and this infuriates the Republicans in the state and probably Republicans around the country, he says he will go ahead and he will appoint a successor to Barack Obama. And the GOP here in the state says, hey, wait a minute. We want an election and we want the Illinois voters to choose a successor. But Pat Quinn maintains, no, if he is put in this spot to be temporarily the governor, he will appoint someone because he says that Senate seat is far too important to be left open - Betty.

NGUYEN: My goodness. It is more interesting by the second, it seems, as the days continue on with this. All right. Thank you for trying to lay all of that out for us, Susan.

But there is more. This case is full of big names and among them Illinois Congressman Jesse Jackson, Jr., who is dealing with new allegations involving the governor. Our own Don Lemon spoke to the congressman in Chicago just a little bit earlier. He joins me by phone. So, Don, what are these allegations about?

DON LEMON, CNN ANCHOR: Well, the allegations are about two Chicago area Indian businessmen, who were contributors to Jesse Jackson, Jr.'s campaign, but not only his, but other politicians here as well.

And Jesse Jackson, Jr., said he wanted to make that abundantly clear. That these men not only contributed to him but also contributed to other people as well. And there is a "Chicago Tribune" investigation - that is what the congressman woke up to and people here in Chicago, woke up to this morning -- questioning the relationship, Congressman Jackson's relationship, and Rod Blagojevich's relationship with these two Indian businessmen. As well as, as well as Congressman Jackson's brother, Jonathan.

Now, I spoke with Congressman Jackson just -- I left his home just about 30 or 45 minutes ago. And we sat down and talked at length, probably about 30 or 45 minutes, and his wife, who, you know, we wanted to show the human side. And to make sure she had his support and believed in him as well. She sat there for the interview and she talked very frankly about the entire situation here as well as him.

They are saying that they have nothing to hide when it comes to any relationship like this, and there was no emissary, that Jonathan Jackson, Congressman Jackson's brother is not an emissary and was not working on behalf of anyone in his campaign, or anyone in the office to try to secure a senate seat by raising money for them in order to get Governor Blagojevich to appoint him as senator.

I also talked about his conversations he had -- in the first meeting and had spoken to Governor Blagojevich for the first time in about four years on Monday, when he went into interview for the job, or to at least what he says tout his credentials. I asked him about what took part - what was that conversation about? He told me it was about strategy, about winning, because whoever holds on to -- whoever gets this seat has to be able to hold on to it in two years when it is time for the general election. They talked about that strategy, talked about his history in the Senate, and -- excuse me, in the Congress, and being in the Congress for 13 years.

He said he walked out of the meeting feeling confident and then after the governor was arrested in the criminal complaint came out and he started to hear all of the information, he does not feel at any point that the governor took him, at least, him - and many other people as well -- as a serious candidate. Not just the congressman's alluded to it, and he couldn't go into specifics about it, but other sources here I have spoken to believe that the governor may have wanted to appoint himself and maybe just going through motions just to do it, to make sure he had the ducks in a row.

NGUYEN: Well, Don, what does he say about senate candidate number five, the allegations that were made, the words that were said by the governor while under that wiretap?

LEMON: They were shocked by the words of the governor, and as most people are, and by the words of his wife as well, Patti Blagojevich. What they say about that -- the congressman at least, and other people here as well, that they are not sure if any of this is true, that the governor is talking about. If in some way some of this may have been made up in order to sort of broker some sort of deal or to use it as leverage.

You know, we know that it is Chicago. It's no secret in Illinois, it has history of some very shady politicking. But governor Blagojevich is, if you have ever covered this area, is in a league all of his own. And has been under suspicion for years and years and years, but never has anything been brought out to this magnitude. So they are shocked by that, but in some ways, some people are not surprised at least that there may have been something going on, some negotiating behind the scenes.

And just real quickly, Betty, I want to say much has been made about Patti Blagojevich and about her language and the tone of the conversation on that transcript from -- that everyone has been reading. And Congressman Jackson's wife who, is also a politician, had some very interesting things to say about Patti Blagojevich, and how she feels about this.

NGUYEN: Well, we are looking forward to seeing that interview air right here on CNN. Don Lemon, joining us by phone. Thank you, Don.

LEMON: Thanks, Betty.

NGUYEN: Well, hours after the U.S. Senate slammed the door on crisis loans for GM and Chrysler, a U-turn from the White House. Until now the Bush administration had refused to use the $700-billion Troubled Asset Relief Program, or TARP, as it is called, for anything other than financial companies. Now officials say they may tap the TARP, after all.

Stock markets, they plunged around the world when the loan package, crafted by the White House and Democratic lawmakers collapsed. Republicans, they wanted a quick and deep pay cut by the union autoworkers. But in a news conference, that you may have seen live right here on CNN, the UAW president said that he could not let labor, quote, "shoulder the entire burden of restructuring." Well, many supporters of government aid for the Big Three thought it should come from the bank bailout money, anyway. For the White House, though, it has been quite a reversal. CNN's

Kathleen Koch is there today and joins us. So, what led to this turn around?

KATHLEEN KOCH, CNN WHITE HOUSE CORRESPONDENT: Well, Betty, obviously, the White House is very concerned about the state of the U.S. economy right now, about the huge number of Americans out of work. And with Congress not passing the legislation last night, the Detroit is out of options and the White House is backed into a corner.

As you mentioned, the White House has long said that the Troubled Asset Relief Program was for the financial sector, and that automakers were responsible in large part for their own problems, but now this about face. Press Secretary Dana Perino, in a statement, saying, quote, "a precipitous collapse of this industry would have a severe impact on our economy and it would be irresponsible to further weaken and destabilize our economy at this time."

There is some $15 billion out of the initial $350 billion in TARP that is still out there and accessible to the White House if it choose to got that route. Lawmakers are saying whatever the White House decides to do, it needs to take action soon.

(BEGIN VIDEO CLIP)

SEN. CHRIS DODD, (D-CT) CHAIRMAN, SENATE BANKING CMTE.: I spoke with my auto dealers in Connecticut this morning, the head of them. We have banks literally calling the mortgages on dealerships as we speak. We have -- so the bottom is falling. Banks were watching last night, what happened. Credit is completely gone. One my major banks in New England, who has been providing credit to dealers has already announced, there will be no more credit. So there is a cascading occurring as you and I are talking, so I am hopeful that this day, before the day ends, the White House will make that decision. Send that signal the markets needs to hear before even more damage is done.

(END VIDEO CLIP)

KOCH: Perino says that late last night President Bush was briefed on the results of the vote. Obviously, that the White House was disappointed. Today, the president though, he did travel to Texas for a commencement speech. She says he his being briefed by his economic advisors, talking with them. They are weighing their options. And that the TARP Program is just one of those options.

Despite the pressures, though, from Congress and despite the fact that Perino says they have talked about the urgency of the situation, the White House, right now, has no time frame in which to act, Betty.

NGUYEN: All right. CNN's Kathleen Koch joining us live from the White House. Thank you for that. The president-elect says that he is frustrated that the Big Three are in such a bind, but disappointed that the Senate could not help. To Chicago now, and CNN's Elaine Quijano.

Elaine, what is the incoming administration asking for with this frustration and disappointment?

ELAINE QUIJANO, CNN POLITICAL CORRESPONDENT: Well, hello to you, Betty.

The incoming administration really is basically reiterating what we have heard before. Barack Obama, the president-elect, said earlier this week, that he would like to see conditions attached to any kind of short-term assistance for Detroit.

Now, he released a written statement, first of all, in response to the developments in Washington. He said in that statement quote, "I'm disappointed that the Senate could not reach agreement on a short-term plan for the auto industry. I share the frustration of so many about the decades of mismanagement in this industry that has helped to deliver the current crisis. Those bad practices can not be rewarded or continued, but I also know that millions of American jobs rely directly, or indirectly, on a viable auto industry, and that the beginnings of reform are at hand."

Now, his statement went on to commend lawmakers, as well as members of the Bush administration, who really worked very hard to try and forge some kind of compromise. But, again, Betty, what the president-elect would like to see in his view, if there is any kind of short-term financial assistance provided to the Big Three, he very much wants to see long term restructuring taking place at these companies - Betty.

NGUYEN: All right. CNN's Elaine Quijano joining us from Chicago. Thank you, Elaine.

Few people know the ins and outs of the auto business than Csaba Csere; he is editor-in-chief of "Car & Driver" magazine and my guest at the bottom of the hour, right here in the CNN NEWSROOM. Don't miss that.

In the meantime, though, it is a tough job, even under the best of circumstances, now the nation's men and women of blue are really feeling the pinch as the recession drags on. We find out what police departments across the country want incoming President Barack Obama to do about it.

(COMMERCIAL BREAK)

NGUYEN: Well, law enforcement agencies across the country are feeling the pinch of the recession, and they are turning to President- Elect Barack Obama for help. Here is CNN's Justice Correspondent Kelli Arena with a "Memo to the President".

(BEGIN VIDEOTAPE)

KELLI ARENA, CNN JUSTICE CORRESPONDENT (voice over): Mr. President, the police want to talk to you.

CHUCK WEXLER, POLICE EXECUTIVE RESEARCH FORUM: They really have felt as though the Justice Department has been out of sync with what they have need.

ARENA: National crime rates are still down, but that overall drop masks the serious problem in places like Philadelphia, where more than 300 people have been murdered this year. Even in tiny Naperville, Illinois, calls for help are becoming more frequent.

CHIEF DAVID DIAL, NAPERVILLE, ILLINOIS POLICE: There are frauds, narcotics violations, disturbances, and misdemeanors batteries, those crimes are up nearly a 1,000 this year.

ARENA: The boys in blue see bigger problems ahead, with the economy forcing major cutbacks in personnel, overtime, and training. And the FBI's focus of fighting terrorism since 9/11 means that many federal resources are no longer available.

MIKE MASON, FMR. FBI EXECUTIVE ASST. DIRECTOR: For instance providing training to state and local police departments; providing resources, either investigative resources, or technological resources, in support of investigations they were conducting.

ARENA: Mr. President, the heat is on from the cops to Congress.

SEN. CHARLES SCHUMER, (D-NY) JUDICIARY CMTE.: That is something that we can't afford to backtrack on.

ARENA: So what do the police want? Restoration of millions that had been slashed from crime fighting grants to help fight serious and violent crime, bring back the ban on assault weapons, and even a revival of the Clinton era COPS program, to put more police on the streets.

CHIEF JOHN TIMONEY, MAIMI POLICE: It also allowed us to purchase technology, and in some respects the advancements in technology have outpaced our ability to keep up with them.

ARENA: Mr. President, everybody has got their hand out for budget dollars, and crime may seem like a low priority.

(On camera): But the police are issuing a warning. If he doesn't pay attention to it now, it won't be a low priority for long. Kelli Arena, CNN, Washington.

(END VIDEOTAPE)

NGUYEN: New clues, will they bring closure in the search for Caylee? After six months of searching and questioning, remains turn up minutes from the little girl's home. We have the latest developments in a suddenly fast-moving case.

Also, a tragic ending to a school picnic; we will tell you what happened when a bus carrying a group of school children in Nepal tried to avoid a collision. (COMMERCIAL BREAK)

NGUYEN: Even without the DNA results and even without a confession, it looks all but certain, those remains found yesterday are Caylee Anthony's. Lawyers for the girl's mother, Casey, said this morning that they have told measurements and hair color match the little girl. Investigators searched the Anthony home overnight, taking boxes and bags of items with them.

Police say that the medical examiner found evidence with the remains apparently linked to the house.

(BEGIN VIDEO CLIP)

SHERIFF KEVIN BEARY, ORANGE COUNTY, FLORIDA: There are certain things they want to be looking for, and some of those clues came from the crime scene yesterday, and a lot of items were taken into our custody for review.

UNIDENTIFIED FEMALE: I know you can't go into detail, but there was something that was found that made you want to search the grandparents' home?

BEARY: Absolutely.

(END VIDEO CLIP)

NGUYEN: Caylee Anthony has not been seen since June and Casey Anthony was charged with her murder in October. She has pleaded not guilty. Tonight, Larry King has an exclusive interview with Caylee's grandparents, Cindy and George Anthony. They will talk about all of these new developments. "Larry King Live" tonight at 9:00 Eastern.

In the meantime, 9 to 3 that is where things stands with the divided Brian Nichols jury. The judge has sent them back for a fourth day of deliberations on a sentence for the Atlanta courthouse shooter. Prosecutors are seeking the death penalty. It requires a unanimous jury though.

The foreman did not tell the judge how the 9 to 3 vote broke down. Nichols was on trail for rape in 2005 when he escaped from custody and killed four people.

The storm that dumped snow on parts of the Southeast did not stop there. We are going to show you the trouble it caused as it moved Northeast.

(COMMERCIAL BREAK)

NGUYEN: Take a look at this, the big storm that dumped snow on the Deep South did not stop there. The impact is being felt today in the Northeast as well. Tens of thousands of people woke up in the dark after the storm knocked out power across the region. Ice, snow, high winds and flooding, they are all part of the mix there today. It is so bad that in Massachusetts, the governor has declared a state of emergency. Well, snow this time of year is real rarity in the Deep South, parts of Mississippi, though, got up to 10 inches, Louisiana up to eight inches.

(BEGIN VIDEO CLIP)

GERARD BRAUD, MANDEVILLE, LOUISIANA: This is Gerard Braud coming to you from Mandeville, Louisiana, which is 30 miles north of New Orleans. And as you can see here, we have lots of snow coming down, which is outrageously unusual. So far several inches and several more inches to come.

(END VIDEO CLIP)

NGUYEN: It is not over. Our Reynolds Wolf is keeping track of what is happening with this storm system. He calling it outrageous, but some folks say, hey, it's Old Man Winter, it is that time of year.

REYNOLDS WOLF, CNN METEOROLOGIST: Yes, I know, he's a mean old man, isn't he? Old Man Winter, that is who I am referring to, of course.

NGUYEN: Yes, right.

WOLF: You know, it's funny you have the ice in parts of the Northeast, you had snow in the Southeast. And if you had to have a choice between those, I'm telling you folks, you'd rather have snow any day of the week than the ice. The ice causes all kinds of damage with power lines, with trees, just a huge mess that they are still going to clean up today, in parts of the Northeast.

(WEATHER FORECAST)

NGUYEN: Well, bravery on the battlefield. Some American troops surrounded by insurgents in Afghanistan are getting silver stars for the heroics. We are going to show you what happened.

(COMMERCIAL BREAK)

NGUYEN: Thirty one past the hour and here are some of the stories that we are working on in the NEWSROOM.

The governor of Illinois is losing his top aide and gaining another court fight. Chief of Staff John Harris is quitting three days after he and Rod Blagojevich were busted by the FBI. The state attorney general is asking the state Supreme Court to declare Blagojevich unfit to serve.

The brand new U.S. Capitol Visitor Center is back in business after a small fire, apparently caused by welders. Nobody was hurt and visitors -- they were back in within an hour.

And the White House says if Congress won't help U.S. automakers stay out of bankruptcy, it will. In the wake of last night's Senate defeat of a short term loan deal, officials may tap the $700 billion bailout fund for banks. Well the White House says letting one or two or all of the Big Three collapse would be irresponsible. But critics of federal aid, some of them anyway, say a few months of bankruptcy might do auto workers a world of good. Csaba Csere has chronicled the industry's ups and downs for many years. He is editor and chief of "Car and Driver" magazine and joins us now from Ann Arbor, Michigan.

Csaba, all right, so bankruptcy is a painful remedy, or fate, worse than death? Which is it for these automakers? And can they afford bankruptcy?

CSABA CSERE, "CAR AND DRIVER" MAGAZINE: I don't think they can, because it is something that has terrible implications for buyers. Buyers have a lot of alternatives other than General Motors, Chrysler and Ford products. And if those car companies go bankrupt, buyers are going to be very concerned that they're not going to get warranty protection or parts for what is a very expensive, long term purchase. And they are likely to go elsewhere, and that isn't going to help these companies one bit.

NGUYEN: Well, help us to understand the trickle down effect. Because we've talked about the blue collar workers, we talked about the Big Three; what about the white collar workers? What about all the others in between that would be affected if, for some reason, these automakers fail?

CSERE: Well, there is a huge number of them. Obviously, all the engineers at the car companies who are designing these cars, you know, they are going to lose their jobs, and they are probably less likely to be picked up by other companies and other carmakers than even the blue collar workers are.

Then you've got all of the people at the supplier companies. The supplier network is pretty creeky right now, because with the Big Three having had financial problems for several years, the suppliers are also beaten down. So No. 1, the notion that if the carmakers go bankrupt they can get a better deal from their suppliers is ludicrous because the suppliers are hardly making any money on the parts today.

And No.2, if that supplier network goes down, that is another huge number of jobs, both blue collar and white collar, that are lost. And that are also going to affect a lot of the other carmakers, even the healthy ones, because they share a lot of these suppliers. And if, say, a seat supplier goes down, and a Honda plant can't get seats anymore, they can't just get another seat from a different car; it's going to take several months to find a substitute.

NGUYEN: All right. But is bailout really the answer? Because hasn't GM been losing market share for -- what -- some 30 years? Is a bailout -- is that going to be the answer?

CSERE: Well, the bailout, itself, doesn't solve the problem.

GM has been restructuring for some time. They have quite a good product plan in place now, most of the new products over the last two years have been quite attractive. And they have a whole rollout program that can transform the company. But they need to stay alive for next four or five years to do that, and what the bailout does is it helps them stay alive.

But without new product and good product, the company can't be saved. The bailout just gives them the opportunity to bring that good product to market.

NGUYEN: And they -- GM says -- it needs that money by the end of the month, and more in the beginning of next year.

What about Ford and Chrysler? What do they need to do?

CSERE: Well, Chrysler is in about the same state as GM. They need the money. They are essentially broke now and need the money immediately.

Ford is financially in much better shape and can probably make it through 2009 without getting much money.

But keep in mind all of this talk of bankruptcy is a self- fulfilling prophecy. Already, you have -- there's rumors that some parts makers are going to Chrysler and saying, we're not going to give you the parts and wait 45 days for payment, we're going to demand cash up front. And if that picks up steam, that even accelerates how quickly they run out of money.

NGUYEN: All right. So the answer then lies where? I mean, we couldn't come up with a solution this past week, so where do we go now?

CSERE: Well, the only solution left now is for the administration -- for President Bush and his people -- to tap into some of those T.A.R.P. funds.

NGUYEN: But is that a real solution?

CSERE: Well, there is no quick solution. Anyone who thinks there is a quick solution is -- doesn't understand the industry.

The problem didn't come about simply. The problem was a long time in making, and the solution is a long time in making.

What the car companies need is some help to survive these bad economic times. And if they don't get the help, they are going under. If they get the help and survive these economic times and can stay in business for a few years, their new products will be the solution.

NGUYEN: All right. Csaba Csere, editor-in-chief of "Car and Driver" thanks so much for your time and insight today.

CSERE: Happy to be here.

NGUYEN: All right. Well, the news about the auto bailout bill's collapse took a toll on Wall Street earlier in the session. But at the moment, taking a look, it's just down 34 points. We're not actually seeing too much movement. Stephanie Elam is at the New York Stock Exchange with more on where the market stands, with about -- what -- 90 minutes left in the session today?

We've been calling it not too bad. I guess that has been the motto today.

STEPHANIE ELAM, CNN CORRESPONDENT: Yes, it's not too bad right now, but it's been all over the place. We've been up, we've been down. So, thankfully for investors, Betty, the White House seems to have stepped in to salvage what was expected to be just a brutal trading day.

Shortly after the markets open, the Treasury Department released a statement saying it would consider using T.A.R.P. funds to help out the carmakers to prevent -- quote -- "imminent failure of the companies."

Nothing of course is set in stone. We know that. That is what we are waiting to hear. But still, stocks have managed to stay pretty much afloat here dancing around the flatline. We are well off of our lows for the day. The Dow right now off 30 points, 8541 there. So much better than we expected. We are off about 200 points out of the opening gates this morning, but have obviously come back. Nasdaq up right now 12 points at 1519.

Now, even with the Treasury support, bankruptcy still remains a very real possibility. General Motors and Chrysler in particular danger as Detroit scrambles to decide what its next move is going to be.

Ford, which is healthier in terms of cash flow, is not totally out of the woods just yet. A failure of either of its two rivals would send a ripple effect through the entire industry and through its suppliers. At the moment, shares of GM off 5 percent and Ford is actually on the upside by about 4 percent, Betty.

NGUYEN: Well, you know, the troubling thing is if any of these automakers go under, just like we were speaking with Csaba Csere, that we are not just talking about a small impact, we're talking about a large one, especially in the Midwest.

ELAM: Yes, because a lot of people think, Betty, when you hear the automakers, you automatically think Michigan, you think Detroit, but that is not really just the end of the story. The Big Three employ workers in every single U.S. state, more than 2 million people in all from big manufacturing plants all the way down to the smaller part makers. And even if a relatively small portion of them find themselves out of work it's going to spell trouble for the entire country.

So it is not an isolated issue. You can't say it is a Michigan problem. It is an American issue.

NGUYEN: Stephanie Elam, as always, it's a pleasure. Thank you.

ELAM: Thanks, Betty.

NGUYEN: Well, federal regulators call it a massive fraud orchestrated by a former Nasdaq chairman. Bernard Madoff is free on $10 million bond right now after being charged with one count of securities fraud. He bail allegedly operated a multibillion dollar Ponzi scheme from a sideline business which he ran separately from his securities firm. Ponzi schemes lure investors with big returns but the money comes from other investors, not actual revenue.

A criminal complaint says the scheme racked up $50 billion in losses and Madoff allegedly admitted to employees at his securities firm that the sideline business was, "one big lie" -- I'm quoting there.

Well, a bank, a toolmaker, a baker, a toymaker, four different companies with one sad fact in common today: and they are all bleeding jobs. Bank of America has plans to slash 35,000 jobs over the next three years, including some from Merrill Lynch, which it agreed to buy. Tool company Stanley Works plans to cut 2,000 jobs and shutdown three factories. Sara Lee cutting some 700 jobs as it outsources parts of its business. And KB Toys is back in bankruptcy and will have going out of business sales at hundreds of stores.

Well, if you are out of work, chances are you are not rushing to the mall. The government says retail sales fell for the fifth straight month in November. And as you know, November is a key sales month, marking the start of the holiday shopping season. Also, combined sales for November and December sometimes make up half of merchants' annual sales and profits.

(COMMERCIAL BREAK)

NGUYEN: In Nepal, a school trip takes a tragic turn. Take a look at this. A bus carrying a group of students and teaches home from a picnic skidded off of a bridge, rolled over several times and then plunged nearly 100 feet. At least 22 people were killed, and most of them were students. Around 60 other people were hurt. All of the students were girls between 9 and 15 years old. Authorities say the accident happened when the bus driver tried to avoid a collision with a truck.

For the seventh straight day rioters are on the march in Athens, Greece. They've been smashing windows and clashing with police again today in central Athens. The violence erupted after a police officer killed a 15-year-old boy last Saturday. The teen was shot while he and other young people were throwing rocks at a police patrol car. The two officers involved in that shooting are in custody and awaiting trial. One is charged with manslaughter and the other with being an accomplice.

It is an absolute inferno. Look at this. Exclusive video of Monday's fighter jet crash in San Diego shows the plane in flames and a home just demolished. Four members of a family that had just moved in were killed. The Marine pilot safely ejected after the second of his two engines failed. At a community meeting last night, residents took exception to the Marine's insistence that -- quote -- "proper protocol was followed."

(BEGIN VIDEO CLIP) RICK RAMIREZ, RESIDENT: It included sending a doomed machine over a highly populated zone, not over a cleared crash zone.

(APPLAUSE)

(END VIDEO CLIP)

NGUYEN: In a briefing with members of Congress, Marine generals defended the emergency flight path over that neighborhood and they said double-engine failure is incredibly rare.

Well, U.S. special forces surrounded by insurgents in a rugged Afghan valley, that is the scenario. And we have gripping images of the intense battle that is earning some of the troops a silver star.

CNN Pentagon correspondent, Barbara Starr, with the story behind it all.

(BEGIN VIDEOTAPE)

UNIDENTIFIED MALE: Hey, I'm hit. I think I'm hit. I'm hit.

Roger. I'm trying.

BARBARA STARR, CNN PENTAGON CORRESPONDENT: April 6th this year, Afghanistan's Shok Valley north of Jalabad, U.S. special forces and Afghan commandos on an assault mission to kill or capture insurgents.

UNIDENTIFIED MALE: I think we just got hit. We are going south.

UNIDENTIFIED MALE: Adjust fire. Adjust fire.

UNIDENTIFIED MALE: I hit it.

STARR: 50 U.S. army special forces troops landed along with more than 100 Afghan commandos.

CAPT. KYLE WALTON, U.S. SPECIAL FORCES: Many of these soldiers were wearing up to 60 pounds of equipment, and jumped off of the helicopters into jagged rocks, running water and 40 degree temperatures at approximately 10,000 feet.

UNIDENTIFIED MALE: (INAUDIBLE)

STARR: Captain Kyle Walton is one of 10 commandos being awarded the silver star for what happened in these mountains when the U.S. troops suddenly found themselves pinned down by 200 insurgents.

WALTON: We were completely surrounded on 360 degrees and were taking heavy enemy sniper, machine gun and RPG fire from all around us.

UNIDENTIFIED MALE: For the medevac. Over.

UNIDENTIFIED MALE: Roger, I confirm nine casualties. Over

UNIDENTIFIED MALE: We're starting to uh, take ... (INAUDIBLE) fire.

STARR: U.S. machine gun and missile fire rocketed insurgent positions.

UNIDENTIFIED MALE: Roger, I copy.

UNIDENTIFIED MALE: Impact.

STARR: As he pulled the wounded to safety, Walton called in air strikes to keep his men from being overrun. That decision bought the Americans just enough time to carry the wounded down a 60-foot cliff to waiting Blackhawk helicopters.

WALTON: At one point, we had a soldier missing his leg, continuing to apply pressure to one of his comrades' wounds, not concerned about himself. During the daring rescue that some of the soldiers conducted to get these guys off the mountain, John Wayne Walton (ph) carried his own leg down the mountain.

STARR: The battle would rag for more than six hours as these men fought to save each other before saving themselves.

Barbara Starr, CNN, at the Pentagon.

(END VIDEOTAPE)

NGUYEN: That is just remarkable.

All right, so what happens if there is a Big Three bankruptcy? The ripple effect, domino effect, whatever you want to call it, it's not going to be pretty. One man who knows the industry well will tell us just how ugly it could be.

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NGUYEN: Well, the man at the helm of the country's biggest car dealership is speaking out about what might happen if the U.S. auto industry went under. Let's check in with CNNMoneycom's Poppy Harlow.

I imagine his story is not a pretty one.

POPPY HARLOW, CNNMONEY.COM: It is not a pretty one. It is very bleak.

I talked with Mike Jackson. He is the CEO of AutoNation. His company employs about 25,000 people at 245 dealerships. He says the collapse of the investment bank Lehman Brothers would pale in comparison to a failure of the Big Three. Take a listen.

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MIKE JACKSON, CEO, AUTONATION: There would be cascading bankruptcies through the supplier system, other manufacturers and through the retailer organization, the loss of millions of jobs in a relatively short period of time. And that would be a nice day compared to Lehman Brothers. (END VIDEO CLIP)

HARLOW: Strong words. He also outlined the ripple effect he sees if one, just one of the Big Three went under.

(BEGIN VIDEO CLIP)

JACKSON: Their revenues collapse. Now it is already at the depression levels with the lack of credit for our customers. Consumers have told us unequivocally that they will not buy a vehicle from a bankrupt manufacturer. They do not want to take the risk on residual value and on the warranty.

Therefore, you lose thousands of suppliers across the United States who are also supplying other manufacturers. So if GM goes first, you then lose Chrysler and Ford because of the cascading bankruptcies.

(END VIDEO CLIP)

HARLOW: That is a terrifying thought. Keep in mind, though, the lifeblood of his business is a viable U.S. auto industry. We are already, though, seeing, ripple effects that he just described today. Honda and GM announced more production cuts right here in North America.

We're following all of it right on CNNMoney.com, of course, Betty. But really, an interesting inside look. He's in this industry. He's been in it for a long time -- Betty.

NGUYEN: Yes. It is frightening when you think about all of it. And as you call it the domino effect. Because there's so many different points to it.

Thank you, Poppy. Do appreciate it.

And as always, Team Sanchez is back there working on the next hour of the NEWSROOM. Rick joins us know.

I see that your Twitter board out here is all fired up. What are you working on?

RICK SANCHEZ, CNN ANCHOR: Fired up and ready to go. I'll tell you what we're working on. This is a story that's become captivating. And it's also going to have some legs, as we like to try and say in the news business.

Blagojevich -- was he arrested by Fitzgerald? Because he was this close to offering Barack Obama's Senate seat -- follow me here -- to Jesse Jackson, Jr. I mean, was that the reason they moved in? Because usually when they're investigating you, they're watching you. They don't necessarily have to jump unless they fear that something's about to happen.

It's a good question, one that's going to be posed. Some of the folks at the "Chicago Tribune," they're all over this story. Several angles of this broken today, in the Trib. And we're going to be talking to the reporters who are breaking these elements in the story, as we speak.

And obviously, Robert, go ahead to show her, -- we were just looking on the monitor over there. I think it's finally done. They've been feeding -- thanks, Chris. Thanks for trying, I should say.

They've been feeding the interview that our own Don Lemon has been doing with Jesse Jackson, Jr. Fascinating to see how passionate he is about the response, his need to talk to the media at this time.

And one other thing, Betty. We've got a forensics expert, Larry Koblinsky, he's one of the best in the business and John Jay College of Criminal Justice, up in New York. And he's going to be taking us through the Caylee situation. Whether it is her body or not, that they have found, depending upon what the officials are saying out there right now. Which is, looks like it may be. We're all over that story, as well.

All of this and a lot more coming up at 3:00.

NGUYEN: You know, without DNA evidence, they're saying that it does indeed look like it might be Caylee Anthony.

SANCHEZ: Well, why would her lawyers -- why would the mother, Casey's lawyers, all of a sudden be racing down there to hold news conferences?

NGUYEN: All right. You know --

SANCHEZ: It's a good question.

NGUYEN: We'll see what they have to say.

All right, Rick.

We've got some other news to tell you about, breaking news in fact. Take a look at this.

Live pictures from Seattle, compliments of our affiliate KIRO out there. We understand that a worker is trapped under a backhoe in Seattle. Emergency crews are on the scene. They are trying to rescue this worker. The circumstances really unknown at this point. All we know is that a worker is trapped under a backhoe. We'll get the latest information just as soon as it comes into CNN. And we'll bring it to you.

In the meantime, there's a lot more information to provide you right here in the CNN NEWSROOM, so don't go away.

(COMMERCIAL BREAK)

NGUYEN: Well, cashing in on the next president. That is what a whole lot of retailers are doing this holiday season. And you might be amazed at the amount of Barack Obama stuff that you can actually find out there on the market.

Here's CNN's Susan Candiotti.

(BEGIN VIDEOTAPE)

SUSAN CANDIOTTI, CNN CORRESPONDENT (voice-over): How about a cup of Obama joe? .

UNIDENTIFIED MALE: It's really good.

CANDIOTTI: Or an Obama apron? A doggie coat, an American Gothic Michelle and Barack Obama clock? Even, if you have the audacity, they hope you wear it underwear.

When it comes to Obama marketing, retailers seem to be offering every imaginable gift-giving (INAUDIBLE).

UNIDENTIFIED FEMALE: I've never noticed a president with so much stuff before.

CANDIOTTI: A Christmas tree ornament for about $20. Framed photos of Obama as Superman street art. How about a mouse pad for a computer? A New Jersey coffee shop owner even figured out a steaming hot way to cash in on the Obama name.

UNIDENTIFIED FEMALE: That's pretty neat. I like that. Yes, that is cool.

CANDIOTTI: Bruce Gil created his special Obama Blend, right after election day. And says his in-store and internet sales are doing well.

(on camera): How much of a shelf life do you think this will have? One term, two terms?

BRUCE GIL, OWNER, LONGFELLOW'S COFFEE: Oh, I think this is going to be for two terms, plus.

CANDIOTTI: Why do they call it the Obama Blend? Well, the beans comes from three of the best known coffee-growing regions of the world. And where Obama has a connection. His father was born in Kenya, and Indonesia and Hawaii, where Obama grew up.

But, how does the stuff taste? That's what's important.

(voice-over): But not everyone is caught up in the spirit of giving or getting Obama.

UNIDENTIFIED MALE: It seems kind of silly to me.

CANDIOTTI: (on camera): Have you considered sending a sample to the White House?

GIL: I'd love to.

CANDIOTTI: So if you'd like to put Barack Obama in your Christmas stocking, in a manner of speaking, there are a lot of marketers out there saying, yes we can.

Susan Candiotti, CNN, New York.

(BEGIN VIDEOTAPE)

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