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Congress Calling for No Bonuses at AIG; Mortgage Fraud at All- Time High; City of Phoenix Offering $15,000 to Homebuyers; U.S. Navy Cutting Jobs; Making a Living Off Wind; Robert Gibbs Press Briefing
Aired March 16, 2009 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
KYRA PHILLIPS, CNN ANCHOR: In an economy with lots of detours and dead ends, we're pushing forward on the road to rescue. President Obama laying out a map for small businesses recovery, vowing to get loans flowing to fuel their way.
And your path to a paycheck. Pushing forward beyond job fares. We match up a guy who needs help finding work with a guest who can help find some.
I'm Kyra Phillips live at CNN World Headquarters in Atlanta. You're live in CN NEWSROOM.
In a recession, in a recovery, even in prosperity, knowledge is the ultimate capital. That's where the road to rescue actually begins and ends. You're on it with us. A week-long journey only CNN could offer; unprecedented coverage of the economic crisis in all its forms, from the big picture to the most eye-opening detail. Today, our focus is jobs and surviving the terrifying periods between them.
We'll also look at big new help for small businesses, the biggest single source of job creation. If you're struggling to hold on to your house, mortgage fraud is an insult to top the injury. Learn how to not be a victim this hour in CNN NEWSROOM.
Now America's small businesses are the heart of the American dream, so says President Obama, outlining a series of federal measures aimed at helping those businessmen, and women, get the credit they need to survive and employ and spend and expand. You get the idea. Here's what he told a White House gathering of business owners, lawmakers and lenders just a little while ago.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Small businesses are the heart of the American economy. They're responsible for half of all private sector jobs and they create roughly 70 percent of all new jobs in the past decade. So small businesses are not only job generators, they're also at the heart of the American dream. Therefore, as part of my financial stability plan, the Treasury Department will begin purchasing up to $15 billion of SBA loans through the Troubled Asset Relief Program, or TARP. We will immediately unfreeze the secondary market for SBA loans and increase the liquidity of community banks.
(END VIDEO CLIP)
PHILLIPS: And as part of the stimulus, the government also is raising the percentage of small business loan amounts that guarantees against default and cutting the fees that lenders charge borrowers.
Now, what exactly is a small business? According to the Small Business Administration, it's an independent concern with 500 or fewer employees. That covers 99.7 percent of all businesses in America. Small businesses account for roughly half of our private sector jobs and almost half of the private sector payroll. Then over the past 10 years, small businesses have created anywhere from 60 percent to 80 percent of America's jobs.
Now, if you are a small business owner and you're still not sure what resources might be out there, we will walk you through it in just about 20 minutes.
They don't call it "Issue # 1" for nothing. Check out the latest CNN/Opinion Research Corporation poll. No other issue comes within 50 points of the economy on the most important list. Healthcare is a very distant second, but that, too, is part of the economy. The vast majority of Americans hope that the president's recovery plan succeeds and a smaller number, but still a majority believe, that they will.
So when can we put this whole recession behind it? Fed Chairman Ben Bernanke says banks are the key, and a turnaround may be in sight. Here's what he told "60 Minutes."
(BEGIN VIDEO CLIP)
BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: It depends a lot on the financial system. The lesson of history is that you do not get a sustained economic recovery as long as the financial system's in crisis. We have seen some progress in the financial markets, absolutely, but until we get that stabilized and working normally, we're not going to see recovery. But we do have a plan. We're working on it. And I do think that we will get it stabilized and we'll see the recession coming to an end probably this year. We'll see recovery beginning next year and it will pick up steam over time.
(END VIDEO CLIP)
PHILLIPS: Call it a Bernanke bounce, or sheer momentum, after four straight days of gains, blue chips are surging and bank stocks are leading the way. The Nasdaq has been pretty flat. Right now, Dow industrials up 128 points.
When people say it isn't the money, it's almost always the money, but in this case of those eye-popping bonuses, four top execs at AIG, President Obama says it's a question of values.
Suzanne Malveaux joins me with presidential outrage aimed at a company that so far received, what, more than $170 billion taxpayer dollars, Suzanne?
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: One hundred and seventy billion dollars and that's our money, Kyra, taxpayer dollars going to this company and obviously, $165 million in executive bonuses. People are looking to the president to see how he is responding to this, is he reacting the way others are, which is very angry, wanting some sense of accountability.
With the president, what we saw and what heard is a balancing act. On the one hand, trying to express that yes, he gets it, he understands people are angry that their money is being what they feel is wasted. But on the other hand, trying to say that this is not going to happen in the future, that he will hold them accountable. I want you to take a listen.
(BEGIN VIDEO CLIP)
OBAMA: This is a corporation that finds itself in financial distress due to recklessness and greed. Under these circumstances, it's hard to understand how derivative traders at AIG warranted any bonuses, much less $165 million in extra pay. I mean, how do they justify this outrage to the taxpayers who are keeping the company afloat?
(END VIDEO CLIP)
MALVEAUX: Well, when people say that...
PHILLIPS: Sorry, Suzanne, I have no idea where we're going, what we're doing.
MALVEAUX: That's OK.
PHILLIPS: Take it from there.
(LAUGHTER)
MALVEAUX: That's fine. I can explain it to you actually.
The question here is what can the government do? What can the president do, holding them accountable going forward here. When you look at AIG, this is something that happened, they got the money in the fall, so the contracts were already set up with these executives. There may be very little that the president can do. He says he's going to have his Treasury secretary take a look at any kind of legal action they can take, but some people believe that's not really going to work.
There are other members in Congress who are saying let's pass some legislation. There are other people saying let's identify these guys publicly and put pressure on them, public pressure, not to take these bonuses.
But looking forward, you will take a look and see regulation of the industry so that this kind of thing doesn't happen again.
PHILLIPS: All right. I apologize for our issues there.
MALVEAUX: Well, it's TV. PHILLIPS: You know how it goes, it's live television.
MALVEAUX: It's TV.
PHILLIPS: But you're fantastic.
Rolling along, what do you think about those bonuses? Well, an iReporter from Sparks, Nevada had a few choice words for AIG Chairman Edward Liddy and other company executives.
(BEGIN VIDEO CLIP)
GARY KUHRY, CNN IREPORTER: To put it in perspective for the upper echelon, OK, that means 18 holes of golf, average par is 72. You guys hit 504 strokes to finish that 18 holes. Damn. You failed, OK? You don't give raises for failure, OK? You don't give bonuses and raises for failure. I would like an answer from Mr. Libby (sic) on these facts and this commentary. Thank you.
(END VIDEO CLIP)
PHILLIPS: Another proud newspaper bites the recessionary dust. The 146-year-old "Seattle Post Intelligencer" will print its final edition tomorrow, and go online only. The owner of the Seattle's oldest business. The Hearst Corporation says it failed to find a buyer for the newspaper as well. Hearst says that the paper lost $14 million last year. It's not clear how many workers will lose their jobs. Last month, Denver's "Rocky Mountain News" published its final edition after nearly 150 years.
People often turn to faith in tough times. More than 50 Catholic churches in Cleveland now shutting down. Diocese will close 29 of its 224 parishes and more will have to merge. Churches in the area have been losing followers and priests, nearly half are operating in the red.
Here's a place where faith and economy meet. Euless, Texas, people are combing their job hunt with religion. Career Solutions is a ministry offering more than just training seminars. People are encouraged to stay confident and trust in God during their job search.
(BEGIN VIDEO CLIP)
VIRGINIA VENIOUS, ATTENDING SEMINAR: Help me not to be depressed about the whole situation, knowing that God has something better for me, something is going to come that's just perfect for me. It really helps so that you don't get into that depression or that funk that a lot of people get into.
(END VIDEO CLIP)
PHILLIPS: Many people are participating are not church goers and they don't have to be. Organizers say anyone can benefit from those seminars.
Well, Larry meet David , David meet Larry. We paired a laid-off employee with a well-connected finance whiz for some real-world job help. That's live right here in the CNN NEWSROOM.
And you have to understand, I guess, that the financial crisis is pretty hard to deal with. We're explaining it all, trying to, at least. Breaking it down for you. We believe knowledge is power. We have five days of unprecedented worldwide reporting on the money meltdown.
Just who can lead us out of the crisis? What do all the numbers really mean? And where are the jobs? "ROAD TO RESCUE: THE CNN SURVIVAL GUIDE" all this week only on CNN.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BEN BERNANKE, CHAIRMAN, FEDERAL RESERVE: It's hard to forecast exactly where we're going. Unemployment is rising, job losses are still very severe and no doubt the unemployment rate's going to go higher than it is. But I think again, that if we do succeed in stabilizing the financial system, that we'll begin to see a slower pace of decline and eventually, a stabilization that will set the basis for recovery.
(END VIDEO CLIP)
PHILLIPS: You know the recession is bad, really bad. Unemployment is soaring, but it still isn't in the ballpark of the Great Depression of the '30s. While the jobless rate is expected to get worse, there are signs to look for that indication of a turnaround. CNN's Christine Romans reports.
(BEGIN VIDEOTAPE)
CHRISTINE ROMANS, CNN FINANCIAL CORRESPONDENT (voice over): The headlines are grim. So how bad is it? 4.4 million jobs lost so far this recession, behind each statistic, people.
OBAMA: I don't need to tell the people of this state what statistics like this mean.
ROMANS: It means a record number of Americans, more than 5.3 million, are collecting unemployment checks. The jobless rate is the highest in 25 years, 8.1 percent. We asked the CEO of a large employment services company how bad could it get?
UNIDENTIFIED MALE: We could easily see 9 percent unemployment, and just by the math, it could go to 10.
ROMANS: Four states are already there, South Carolina, Michigan, Rhode Island and California, all topped 10 percent unemployment in February.
UNIDENTIFIED MALE: We're losing jobs at a very rapid rate.
ROMANS: And you need to create at least 100,000 jobs every month just to keep up with population growth. Instead, we're losing hundreds of thousands. But when will it turn around?
UNIDENTIFIED MALE: When we see temporary employment increase, when we see work week hours increase, when we see professional skills begin to recover. Then we'll -- it will be a clear sign the job market is coming back.
ROMANS: His best guess, sometime in 2010. But economists agree there is no clear sign yet that the job market has bottomed out.
(On camera): So that's what we're looking for, that month or two or three when we see temporary jobs increase and the work week get a little bit longer. Beware, the jobs market is what we call a lagging indicator. That means we'll lose jobs even after the economy starts to turn around. Christine Romans, CNN, New York.
(END VIDEO CLIP)
PHILLIPS: Finding help for your small business, there is a treasure trove of resources online. We will help you sort through them to find out what you need most.
(COMMERCIAL BREAK)
PHILLIPS: Well, time to find you a job. We're targeting real people, giving them real advice in our week-long "Road To Rescue". This is your survival guide. We're talking with you, Larry Hughes.
Larry is a book publicist, laid off from HarperCollins. The day before he lost his job, he actually worked with us to book a guest on our show. Now he's on our show. Larry joins us now along with the man who will help him find the job he wants, David Bach.
No pressure, David.
He's the author, "Fight For Your Money".
Gentlemen, great to have you both with us.
LARRY HUGHES, LAID-OFF BOOK PUBLICIST: Great to be on your show.
DAVID BACH, AUTHOR, "FIGHT FOR YOUR MONEY": Glad to be with you.
PHILLIPS: Larry, let's go ahead and start with you. Twenty years in the book publishing business. You have done extremely well. What happened?
HUGHES: What happened was because of the economic downturn, my company decided it had to cut costs. What I didn't see coming was that the way they did that was by eliminating the whole division I worked for. I was, along with a lot of other people, suddenly redundant.
PHILLIPS: So, David , is it about redundancy? Or is it about if you're a senior in the company and you're making a lot of money and you've been there for a while? Boom, you're the first one that's out. BACH: You know, Kyra, it's all of the above. It's interesting because I can speak exactly to his situation. Look, I am an author, for the last 10 years. I have 10 national consecutive best sellers. I was with you last week. "Fight For Your Money" just came out last week. It is an instant "New York Times" bestseller. So that makes 10 best-selling books in a row. Every single book I have done, we used in-house publicity, and we have also hired our own publicity firm on top of that.
But to put this in perspective for you, my book came out last week. We were the number two business book in the country. And we did 50 percent of the sales we would have done a year ago, and we did 75 percent less in sales than we would have done three years ago. So when you look at these numbers, what's happening in the real world is people are not going into Barnes & Noble and buying books like they used to, and publishing firms are being forced to lay off to cut costs.
So when you look at Lawrence's situation - I just met Lawrence in the green room - he's got an unbelievable resume. Now He happened to have his resume on him because he was in the green room.
First thing I said is, Lawrence, do you have a business card? And he said no, not yet.
Lawrence, you need a business card.
PHILLIPS: Larry, where's your business card? You need to be working it.
But here's the deal. First of all, I think Larry should be helping you, David, publicize your book. If you're having issues, you're not selling very well. Guess what, I just made a match, here. Larry, you are not going to go work for David.
But, Larry, you said that you're shy and are having a hard time kind of going out there and connecting and working it. But you're a publicist. How can you be shy?
HUGHES: I wouldn't say I'm shy. But I find that I'm perfectly capable of pitching an author, or pitching or networking on behalf of someone else, but when it comes to doing it for myself, I'm very uncomfortable doing that.
PHILLIPS: Why is that, though? I mean, you're in the business. You know what it means to connect and to link up with people you know in the business, and say hey, I've been really successful. I have a great resume, can you help me out?
HUGHES: I think I have not devoted enough attention to that, perhaps as much as I should have. And, of course, when you start doing it after you've lost your job, you're twice as uncomfortable because your motives are so transparent.
BACH: You know, what, listen....
PHILLIPS: David , what do you advise him? Should he do Linked In, should he do social networking online?
BACH: Here's the thing. People always overlook the obvious. The first thing he should do is call all the authors that he's already worked with. He's worked with some major authors. People like Jack Welch, anybody that he has worked with that he did a phenomenal job for, he should say I just got laid off, are you looking for a publicist?
I'm starting my own PR firm. I'm looking for some clients. I will work cheap for my first couple clients because I want to get my business going, let me help you right now. I can get you on this show, this show and this show. He just got himself on CNN. He's got 20-years of contacts. I will tell you, I have told my publicist, at the publishing firm, who I have worked with for ten years, you ever get laid off, you got a job. I'll hire you as an independent contractor, I'll put you on payroll. I know you're that good. I guarantee you that he's got people he's worked with, he has not called them, and they might hire him right now. Again, tell them you're starting your own business.
PHILLIPS: They are going to be watching you know, Larry. They're probably watching the CNN segment.
Larry, you can have the floor. What do you want to know from David? I mentioned the social networking, but is there something else on your mind?
HUGHES: That's a good question. Everybody advised me get on Linked In and I have done the profile, and I have actually been told that Facebook can be even more effective for finding a job than Linked In. But I guess my question is how? Once you do your profile on Linked In, then what? And is Facebook a good venue for finding a job?
BACH: Let's focus on Facebook. Because I just spent a lot of time on Facebook. We actually hired a PR firm, we built a Facebook site. It's called DavidBachonFacebook.com. You can go on my website. DavidBachonFacebook.com. you can see what I'm doing as a best-selling author to promote my new book. The reason that's important is you need to see what are people -- how are they using Facebook to actually do book promotion or PR.
Here's the key to Facebook. There's 200 million people on Facebook. You can't just build a site. You have to go in and look at the network. Right now on Facebook, there are all kinds of networks specifically geared towards authors and publishing. You have to go where your club is, where your family's already been built. Same thing with Linked In. There are all kinds of networks already built inside of Linked In, specifically around your industry.
People make the mistake of going to these major social networking sites and they just put their name on there. Doesn't do anything for you. If you just put your name on there, nobody even knows you exist. Go into Linked In, go into Facebook, get a Twitter account, go where your network is. Go to the websites that focus on your industry. You know who they are, "Media Bistro" and "Publisher's Weekly". So again, people focus on, you know, they go to Monster.com. What good is Monster.com? You have to go where people in your industry are looking right now, both to hire and to buy from you.
PHILLIPS: David , thanks so much. Larry, you've done a lot of things for a lot of people within 20 years. I don't think anyone will mind getting a phone call from you. We will track your progress.
BACH: You got that right.
PHILLIPS: Definitely. Larry, we will be following your career.
David , thanks.
BACH: You're welcome.
PHILLIPS: David will actually come back tomorrow and answer your questions about surviving the current housing market. What can you do to keep your house, or how can you find a bargain if you're looking for one. E-mail us your questions now at CNNnewsroom@cnn.com.
Turmoil in the housing market. What could be worse? How about mortgage fraud. Personal Finance Editor Gerri Willis joins us on the "ROAD TO THE RESCUE" with new information that could help you keep the swindlers away.
(COMMERCIAL BREAK)
PHILLIPS: "ROAD TO THE RESCUE" is a journey only CNN could undertake. It's a whole week of unprecedented coverage of the economic crisis in all its forms. We're out to leverage the capital we know best, knowledge itself, in helping you survive the storm and thrive on the other side.
Mortgage fraud, it's the crooks that are out there, and knowledge on your part could ruin their day. That's exactly what we want to do. Our Personal Finance Editor Gerri Willis has new details on a report that was just released - Gerri.
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: That's right, Kyra.
You know, this study was commissioned by the Mortgage Bankers Association and here's its surprising finding. Mortgage fraud is at an all-time high, more prevalent now than it was in the heyday of the mortgage boom.
Now, if you take a look at these annual numbers it shows that there are more desperate people out there, and more fraud detection. There are some more surprises in this report.
Let's take a look at where the fraud is occurring. The number one state for fraud is Rhode Island because of the joblessness in the economy there. It beat out Florida for the number one position. Here's a ranking of the states. You can see Rhode Island, Florida, Illinois, Georgia, Maryland, New York, Michigan, California, Missouri and Colorado here, Kyra.
PHILLIPS: All right. Let's talk about some of the most common mortgage fraud schemes that are out there. We've heard about a lot. People have been e-mailing in, asking you about a number of alleged schemes.
WILLIS: That's right.
PHILLIPS: What do we know about for sure?
WILLIS: Well, you know, this is fairly complicated. The easiest, simplest and most common kind of fraud is application fraud. That's 61 percent of all fraud. You may think this is folks who are filling out a mortgage form, just lying, right? That's not necessarily the case. Sometimes it's the case that the application is taken back by the mortgage broker or mortgage banker and filled out there, and that's where the fraud occurs.
There is fraud all over the place. It's not just people who are filling out the applications. It's also people taking the applications. Many frauds are related to appraisals, tax returns, financial statements. You name it, any kind of information that's going out there to the banks themselves, some of that information is simply mishandled, or it's untrue.
And of course, we also have seen predatory lending when it comes to minority groups as we talked about last week.
But at the end of the day, what this report was really looking at and focusing on was the pervasiveness of fraud and how surprising it is that when the mortgage boom is well over, we're continuing to see more and more of this fraud occurring and that's mostly because there are a lot of desperate people out there who either want to close the deal or they want to get the loan.
And if you have a money question, send it to us, send us an iReport to ireport@CNN.com/issue one.
K. PHILLIPS: Thanks, Gerri.
WILLIS: My pleasure.
K. PHILLIPS: Money for nothing? Well almost. If you live in Phoenix or are thinking of moving there, consider buying a foreclosure. After all, the city is sweetening the pot to the tune of 15,000 bucks.
Details now from Tim Vechner (ph) of our affiliate, KNXB.
(BEGIN VIDEOTAPE)
TIM VECHNER (ph), KNXB REPORTER (voice-over): This central Phoenix home has been empty for months. The weeds have grown taller than some of the landscaping. Gina Curtis lives across the street.
GINA CURTIS, RESIDENT: I think what scares us the most is the fact when you have empty properties, it's sort of a magnet for potential crimes.
VECHNER (ph): Gina has hopes a new city of Phoenix program will finally result in the house and others coming off the market. Phoenix plans to give $15,000 to any home buyer who buys a foreclosed property.
CHRIS CAMPBELL, REAL ESTATE BROKER: Well, I had already heard about it. And I think a few of my buyers have heard about it because I have five buyers right now who are first time home buyers, in escrow.
VECHNER (ph): Home buyers can use the money to put towards a down payment or closing costs. The catch is that the home buyer needs to repay the city if they ever sell or refinance. Homebuyers must also attend an eight-hour counseling session on home ownership.
CAMPBELL: For the buyers who are buying under $150,000 or under $200,000, it probably means a lot to their taxes. They are probably renters and they probably file short form and have very few tax credits at all.
VECHNER (ph): Gina thinks the new program may bring her something she has waited a long time for now, more neighbors and fewer foreclosures.
CURTIS: We have a lot of foreclosures so if it helps individuals and incentivizes them to buy in, why not?
(END VIDEOTAPE)
K. PHILLIPS: Well, we know the economy is still issue number one and worries about your job tops the list of concerns. In our CNN Opinion Research Corporation poll, 36 percent of you say that unemployment is the most important economic issue facing the country today. That figure has nearly tripled since last spring. Jobs outranked inflation, the mortgage crisis and the stock market.
So which states are being hit the hardest by unemployment? Here's a look at them. Michigan at 11 percent. Rhode Island, 10.3 percent for the month of January. And then California and South Carolina, 10 percent.
Things are really tough in rural South Carolina. Allendale County has the highest unemployment rate in the nation at a staggering 23 percent. Unemployment went up when a nearby plant shut down, wiping out more than 200 jobs. The mayor of Allendale says that the county has trouble attracting new industry, though he sees few signs of rampant joblessness.
(BEGIN VIDEO CLIP)
MAYOR RONNIE JACKSON, ALLENDALE, SOUTH CAROLINA: We all have employment problems, but I don't think it's got up to be 23 percent. I admit that we got some problems, but I don't think it's that high.
(END VIDEO CLIP)
K. PHILLIPS: With jobs scarce in the private sector, many of you are lining up in military recruitment offices, but if you think your road to rescue could include a walk down a Navy pier, you might want to think again. Swabies aren't safe from layoffs these days. Pentagon Correspondent Chris Lawrence joins us now.
So Chris, what's going on with the Navy?
CHRIS LAWRENCE, CNN PENTAGON CORRESPONDENT: Well, Congress is cutting the size of the Navy. About 3,000 sailors have to go this year with another 3,000 to follow after that. At the same time, more sailors want to stay in the service. They don't want to go out into the private sector right now. So what the Navy is doing is putting in some tougher new re-enlistment requirements and for some sailors, that is a career ender.
Now I spoke with one young sailor who has been in, she's come to the end of her first term. She has been training to work with aircraft weapons and she just absolutely loves it. The thing is, her job is so overmanned, the Navy has already cut the re-enlistment bonus for it and yet, she tells me she would still re-up if she could.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Because the bonus is supposed to be an issue for somebody to re-enlist. I already have that. I already want to re-enlist and serve my country for another four, six, eight, ten years. It doesn't matter. And the money has nothing to do with it. I want to serve my country. And I can't.
(END VIDEO CLIP)
LAWRENCE: Kyra, at some levels, at certain levels, some of these Navy jobs are so overmanned, you've got two, three, even four sailors for every one that the Navy needs. Some sailors look at these new rules, these cuts, and say it's going to clear a path for advancement a lot better for some very ambitious sailors.
K. PHILLIPS: So are the layoffs, you know, bad news for everyone in the Navy? I mean, is there, I guess, a silver lining anywhere within this?
LAWRENCE: Well, that's it. It's some of these sailors who are here ambitious, who have risen up the ranks quickly, they say, you know, there's been this logjam and, you know, I met a chief who told me, you know, he's looking forward to these new rules.
K. PHILLIPS: All right.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: It's a corporation. We have a budget. If we're over our budget, we have to get to our limitation. Right now, we're well over our limitation. It's a pipeline that's being clogged by people that are not performing at the jobs they are being paid to do.
(END VIDEO CLIP)
LAWRENCE: Yes, and again, you know, we spoke with Navy officials and they told us, the thing is they've got the highest retention rate they've seen in about ten years, and they've got to get down to these numbers Congress has required them to do. What they're doing basically right now is - what Congress is doing is they're taking numbers away from the Navy, but at the same time they're adding numbers to the army and marines to fight those wars in Iraq and Afghanistan. Some of these Navy folks have the kind of skills that can cross over. A lot of them don't.
K. PHILLIPS: All right, Chris Lawrence, we'll keep tracking it. Appreciate it.
Shopping for a car but worried about keeping up the payments? One automaker says it's got your back.
(VIDEO CLIP, HYUNDAI COMMERCIAL)
Wait a minute. Is Hyundai doing this out of the goodness of its heart? We will get a reality check.
(COMMERCIAL BREAK)
K. PHILLIPS: Well, saying they deserve a chance, President Obama lays out new measures to help small businesses. OK, that sounds good and all, but you probably need some good specifics, right? A great resource is the Small Business Administration's website, sba.gov.
Let's go ahead and take a look. We found two things that were interesting with regard, if you go to the front page of this website and come down, you've got all these options here - scam alerts, contracting, loan programs. Pop on loan programs right there, and right there, you can actually register to see if you qualify for a loan to start a small business. Even one of my producers did this awhile ago when she thought about opening up a B&B and she found out if she qualified or not.
All right, something else we found that was interesting to push it forward, right here, online business chat. Asking you to get involved, the host is associated administrator for the Office of Capital Access at the U.S. Small Business Administration. It's happening March 19th, that's this Thursday, at 1:00 p.m. You can tap in the recovery act in your small business. You'll be able to get involved in actual online chat to answer all your questions if you're thinking about starting a small business. Once again, sba.gov.
Well, we've got five days of unprecedented worldwide reporting on the money meltdown. Just who can lead us out of the crisis? What do all the numbers really mean? And where are the jobs? "ROAD TO RESCUE, THE CNN SURVIVAL GUIDE," all this week only on CNN.
(COMMERCIAL BREAK)
K. PHILLIPS: Well, you need a new car but are scared you might lose your job? One company actually has a way to reassure buyers. Is it too good to be true? Next, we go to CNNmoney.com's Poppy Harlow to take a look.
Usually it is too good to be true, so tell us something, Poppy.
POPPY HARLOW, CNNMONEY.COM CORRESPONDENT: Usually, but this time it doesn't look like it. We are talking about the Hyundai Assurance Program. Reluctant buyers worried these days if they buy a new car, they're going to be stuck with a set a wheels that they can't afford. And if they lose their job Hyundai is trying to capitalize on it. They have this program called the Assurance. It came out about a month ago. We did some digging here.
Now here are the facts. First, if you lose your job within 12 months of buying the car, you can return it and Hyundai will reimburse you for the value of that vehicle at the time you return it and it will absorb up to $7500 in terms of the depreciation because cars lose a lot of their value in that first year, when you drive them out of the lot.
Now, the auto experts we talked to say this is for real. There is no catch. Of course, a few things here. You've got to prove that you lost your job. There is some paperwork involved in that. But you should know, your credit score, that won't be affected at all, apparently.
Also, there's no telling, Kyra, how long this process is going to take because, believe it or not, Hyundai says no one has returned a car yet since they launched the program in January. We talked to one Hyundai dealer in New Jersey who said his business has exploded because of this. Sales have jumped 30 percent and showroom traffic is up 45 percent, Kyra, just out of this program. Silver lining in a really struggling industry.
K. PHILLIPS: Sure, OK, so Hyundai's offer's for real. Are there others to look out for? Could other companies be following suit here?
HARLOW: Yes. There's a lot to look out for. One ad that I have seen a lot, I bet folks out there, this buy an SUV or a truck and get a car for free, that deal. You need to read the fine print on all of this. You can't choose any vehicle you want. There are only certain ones that apply. Most likely, you're going to have to pay thousands of dollars above the sticker price for one of those already highly priced SUVs or trucks in order to get that quote unquote, "free car." You probably won't be able to apply any of the rebates that are being offered right now which are pretty lofty rebates.
And also, some experts say if you really need two vehicles, if you really need two, you can probably buy two separately, Kyra, and pay less than you do for the expense of one and then the free car. So that one I think is too good to be true.
K. PHILLIPS: Yes, I agree with you on that one. Poppy, thanks.
Well renewable energy sources empowering some laid-off workers to shift careers for a high wire job. On "THE ROAD TO RESCUE," Ted Rowlands is in Tehachapi, California, where green jobs are equaling greenbacks and they are welcoming paychecks.
Now, are you wondering where Ted is? Hoping to god he's on a safety harness.
Hello, Ted.
Well, we can hear Ted's producer. That's Paul Vercamen (ph) obviously making new friends up there on the windmill.
Ted, you hear me OK, pal?
As you know, folks, at windmill farms, it gets a little windy. Sometimes you can't quite hear.
Oh, wait I heard an, oh.
TED ROWLANDS, CNN NATIONAL CORRESPONENT: Sorry.
K. PHILLIPS: Ted, are you with me?
ROWLANDS: Yes, I am with you. It's just a little bit windy up here. We didn't hear you there.
K. PHILLIPS: Making new friends, Ted?
ROWLANDS: We're high up in the sky. Basically, I'm so petrified, I'm holding on to this thing so tight, I don't think I can hear anything. I can't see, hear or think.
Basically now, I'm part of this wind turbine which is what we're talking about is this industry that is basically, according to the folks here, on the verge of exploding. And there's a lot of excitement in the industry because of the Obama goal, basically, to expand not only wind, but wind and solar, to the point where it's going to turn 20-fold what it's now producing.
And one of the guys that's been in the industry a little bit is John Phillips. He's a wind tech. He's huddled back in the middle of this one wind turbine, way above the sky here in Tehachapi, California.
And John, we were just talking, this is pretty exciting time for you and everybody else in this industry. Is there a real sense that you're on the verge of really exploding?
JOHN PHILLIPS, WIND TECHNICIAN: Absolutely, with all the stuff that's been in the news lately, all the renewable energy companies are really taking off and wind is no exception.
ROWLANDS: John works for Air Streams, which is a company that basically trains wind techs. It's a private company here in California, but people from around the country come here to learn the trade.
And John, this is not an easy job. So if I'm sitting home without a job thinking I'm going to be a wind tech, what does it take?
J. PHILLIPS: Well, you can't be afraid of heights. Other than that, a real sense of adventure and a strong willingness to learn. Pretty much what you need to come to the table with.
ROWLANDS: People run the gamut that have gotten into this. We talked to a cabinet maker last hour. There are electricians that have gotten into this, construction workers. The jobs moving forward in this industry are going to be a lot of construction jobs, jobs erecting these turbines, and then a lot of people like John, who maintain them.
What is it - you come up here daily, I mean, you're up and down, up and down. What is - specifically, what do you do and what is the starting wage for something like this?
J. PHILLIPS: As far as what we do every day, just basically greasing bearings and trouble shooting and making sure everything's running right. As far as the starting wage, I would say it's...
ROWLANDS: Not that great, is that what you're saying?
J. PHILLIPS: No, it's very good. I'm hesitant to say what I make.
ROWLANDS: No, no, no. In the industry, we were talking to Jeff, who is actually behind us right here, holding on to me. It's about...
UNIDENTIFIED MALE: I'm holding Ted up.
ROWLANDS: About $15.00 to $18.00 an hour, but there's a lot of room to move up, if you prove your mettle.
The bottom line, Kyra, is there's a lot of excitement in wind right now because of the investment that is being made in it and the plans for further investment. And if you got what it takes, it is something to pursue. A lot of community colleges are now offering classes on how to learn the basics in this industry.
I think my dreams have been foiled, though. These guys have basically told me to keep my day job as I hold on.
K. PHILLIPS: There's one issue, that you're afraid of heights. That could be one problem. But it will be interesting to see if there's a payoff and if indeed that grid can expand and they can hold more of that type of or if they can hold that type of energy, more of it.
Ted Rowlands; thanks so much, Ted.
Well, don't make a federal case out of it. Just bring your own paper. An Ohio court says, don't bother coming without a box of letter or legal.
(COMMERCIAL BREAK)
K. PHILLIPS: As always, "Team Sanchez" hard at work on the next hour of CNN NEWSROOM.
Rick, where are you? RICK SANCHEZ, CNN ANCHOR: "THE ROAD TO RECOVERY" will be coming to you live from Georgia State University in beautiful downtown Atlanta today. We're so happy to be here.
What do you guys think?
(CHEERING & APPLAUSE)
SANCHEZ: We're going to be checking the market. We'll be letting you know what's going on with AIG. Should AIG officials get their bonuses? That's always a tough question. We will be taking that to some of our experts.
We're also going to be talking to some of the best minds here at Georgia State, including one of the professors here who happens to be one of the best forecasters in the country. Referring to Rajeed Bellwan (ph). Professor, thank you so much for being with us here as well.
By the way, you guys think these guys should get their bonuses?
CROWD: No.
SANCHEZ: I thought they might say that.
So Kyra, we will be taking you through "THE ROAD TO RECOVERY." And I think it's going to be interesting to watch the perspective from what these guys here at the university, by the way, these are economics students and political science students, so this is going to be a fun hour beginning at 3:00.
K. PHILLIPS: Well, I bet they'd have some questions for Robert Gibbs. We're going to take it there now, to the White House, and listen in on the briefing. Rick, see you in a little bit.
ROBERT GIBSS, WHITE HOUSE PRESS SECRETARY: Let me just make one quick announcement before we get started with questions.
Today, Mexico announced its intent to take retaliatory actions against a range of U.S. exports. This is in response to the termination of a cross-border, long-distance trucking demonstration project that allowed a small number of Mexican trucks to enter the United States beyond the -- beyond the border commercial zones and provided reciprocal access to U.S. companies in Mexico.
The 2009 omnibus appropriations bill terminated the project. Congress has opposed the project in the past because of concerns about the process that led to the program's establishment and its operation.
The administration recognizes these concerns. The president has tasked the Department of Transportation to work with the U.S. trade representative and the Department of State, along with leaders in Congress and Mexican officials to propose legislation creating a new trucking project that will meet the legitimate concerns of Congress and our NAFTA commitments.
Senator Dorgan, the sponsor of the amendment that ended the program, has written to us to express his willingness to work with the administration in good faith to address this issue.
So with that, let me take some questions.
QUESTION: Couple on AIG. The president said he wanted Treasury Secretary Geithner to look at a legal way to stop these bonuses, but it seems to be the conclusion of the company and the administration that there really isn't a way to stop the bonuses required by contract. (INAUDIBLE) do you guys have any sense of what you can do?
GIBBS: Well...
QUESTION: Then a broader follow-up.
GIBBS: Well, obviously, the president has -- has asked the secretary of treasury to go back and reexamine any possible way to ensure that the bonuses that the president described as being outrageous and excessive, to see if there's a way to block those.
Obviously, Treasury also possesses ways in which it can make the taxpayers whole based on its commitment in finalizing the $30 billion that was committed to the company, I think within the past two weeks, in looking to add provisions to that, that address the excessive retention bonuses that Treasury finds unacceptable.
QUESTION: So you don't know of a way yet that you...
(CROSSTALK)
GIBBS: Well, that's what the president has tasked members of the administration with examining.
QUESTION: And all this talk yesterday on the shows and then today by the president himself, should this be construed as some sort of public pressure on the company or the bonus recipients to say they wouldn't accept the bonuses, for example?
GIBBS: Well, obviously, I think -- I mean, I think you've heard the president, now, a number of times, both addressing excessive compensation for CEOs, having Treasury outline rules going forward as to how to deal with some of that excessive compensation. You've seen the president address the way taxpayer money is spent -- TARP money is spent on travel and extravagance related to that.
I think that is -- this is certainly part of that. Obviously, I think the president, in his remarks, spoke to this; that this isn't just outrageous and doesn't just sort of violate your sense of common sense, but it offends our values. Certainly, any person that is subject to these bonuses would have to, and should have -- should think long and hard about whether, given the performance of the company, this is either warranted or appropriate.
QUESTION: (OFF MIKE)
GIBBS: It's a long way of saying that, yes. QUESTION: Robert, a follow up on the I.G.
GIBBS: Yes?
QUESTION: Would -- as you're looking at ways to claw back those bonuses, is there a legislative option that the White House might seek? And secondly, I was struck by the fact that the president called out CEO Liddy as being -- as coming after those contracts had been established. Was that a way of voicing support for him? Does the president want to see CEO Liddy stay?
GIBBS: Well, I haven't talked directly to him about CEO Liddy. Obviously, I think it's important to understand, in the course of events, these are contracts that were negotiated -- as I understand it -- April 2008. Obviously, help for AIG came even outside of regulations governing TARP because this was help that came prior to the legal existence of, or creation of TARP.
So, look, a lot of people are dealing with situations that they inherited. I think what the president spoke firmly and clearly about is the sense that, as, you know, hundreds of millions of Americans are dealing with these tough economic times, that this is just another example of an activity that, as I said, offends our common sense, offends our sense of value, and seems completely misplaced, given what all that we're dealing with.
QUESTION: OK, and there were two questions in there...
GIBBS: In terms of the legislation, again, I think the administration has -- the president's asked the administration to look into this. I don't know the answer to a legislative remedy going backwards. But we can certainly look into that.
Again, I -- you know, I think the important thing is that the president has asked the secretary to take steps to look into this and other options.
QUESTION: You guys first found about these bonuses last week?
GIBBS: I think that's true, based on what I read in the newspaper.
QUESTION: But you gave money to AIG two or three weeks ago?
GIBBS: Um-hmm.
QUESTION: How could you not know that they have these millions -- hundreds of millions dollars...
GIBBS: Well, again, there's -- there's -- according to the news reports, there's existing contracts, some of which the -- or of which the president has asked the secretary to examine going forward.
I think you also heard the president speak today about having a resolution authority that gives the government and taxpayers far more flexibility in dealing with the disposition of AIG in a way that gives taxpayers protection and flexibility -- disposition that we don't currently have, but steps that we would like to see taken in order to deal with AIG as a whole.
QUESTION: Why didn't you attach it to the $30 billion you gave a couple weeks ago?
GIBBS: Again, Jake (ph), the...
QUESTION: You're looking to retroactively attached it to the new $30 billion.
GIBBS: Well, they're looking through contracts to see what can be done to wrest these bonuses from their recipients.
QUESTION: I'm sorry, just -- I don't understand, so maybe I'm just not understanding, but President Obama said in early February, right when he gave his speech on executive compensation, these kinds of compensation packages in the midst of this economic crisis isn't just bad taste, it's bad strategy, and I will not tolerate it as president. We're going to be demanding some restraint in exchange for federal aid.
Since that time, he gave tens of billions of dollars in federal aid to AIG without demanding restraint.
GIBBS: Well again, Jake (ph), we've got existing relationships, contracts, as I just mentioned, that were negotiated a year ago, assistance that was granted outside of the legal authority prior to the creation of the troubled asset relief program.
The president has asked the administration to go back and look at what remedies are possible to block those bonuses.
QUESTION: But why didn't he do that before?
GIBBS: Well, again, the excessive compensation rules that you'd noted, and I think somebody asked this at the background briefing that we had, obviously are prospective based on some limitations that we have in looking backwards.
The president has asked Secretary Geithner and members of the administration to exhaust all legal remedies in looking backwards to see what steps could be taken to block these bonuses.
QUESTION: No, but since -- and I'm sorry to belabor this point -- but since President Obama gave the speech, you guys gave more money to AIG. Why wasn't it attached...
GIBBS: Again, this is...
QUESTION: ... to the new money?
GIBBS: Because it's, again, it's part of the...
QUESTION: Part of the old contracts.
GIBBS: Right. It's part of...
QUESTION: But you're looking to now retroactively see if you can attach something to that old money.
GIBBS: That's what we're looking at.
QUESTION: But why didn't you do it at the time, if you're looking to retroactively do it.
GIBBS: The administration is taking the steps today to go back and see what can be done, as Jeff (ph) said, to claw those bonuses back.
QUESTION: But, Robert, to follow up on Jake's point, did Secretary Geithner make a mistake by not reviewing these contracts that were a year old before he cut a new check to AIG? Why didn't he do it then?
GIBBS: I -- we'll certainly ask the Treasury -- I'll ask the Treasury that. But, again, to some degree there are -- there are legal instruments and contracts that predate this administration, that predate the legal founding of the TARP program. The president has asked this administration to exhaust all legal avenues to see what can and should be done going backwards.
QUESTION: When the president gave that speech on January 29th, I think it is, about excessive compensation, the next day you came in here and said, quote, "I think you will see the president and his economic team outline a plan to deal with what he found irresponsible yesterday."
Where's that plan? Because it's now been about six weeks, and you're acknowledging from your -- Jennifer's (ph) question there's not really that much you can do legally, it appears. So why in late January...
(CROSSTALK)
QUESTION: ... did the president and you tell the American people...
GIBBS: No, no...
QUESTION: ... we're going to stop...
GIBBS: ... let's be fair. Let's -- let's be fair, because...
QUESTION: But you said...
(CROSSTALK)
GIBBS: No, hold on, hold on. Let me -- let me answer your question, before you ask another one.
I think if you go and look at the background briefing that we did here -- I'll be happy to provide you the transcript -- it was specifically -- there's a specific question about moving forward on executive compensation.
Look, we deal with things every day that are not of our own making, that we have, for whatever reason, fallen on to our plate and been given the amazing responsibility of dealing with. Some of that are contractual obligations and responsibilities that we found when they gave us the key to the front door.
Our job is to do all that we can to protect the tax payers going backwards, and, as I've said and as the president has said and as each economic member -- team member has said, to change the rules of the road going forward.
That's why we changed the rules of the road in how money could be spent in an economic recovery package. We changed the rules of the road in addressing the home foreclosure crisis by, for the very first time, giving help to those that had played by the rules.
We will change the rules of the road going forward as it relates to financial regulation to ensure that this type of activity doesn't happen again.
We can't change everything in the past. We will do all that we can. The president has asked the administration to look and see what possible remedies there are. But we're also focused on ensuring that the actions we take are consistent with changing the way we do business here in Washington.
QUESTION: One quick followup: Former Vice President Cheney was on "State of the Union" yesterday. He had a lot -- a lot of criticism of this White House.
To boil it down, on national security, he said the president's policies were making the country less safe. And on the economy, he was charging that the president is taking advantage of the financial crisis to vastly expand the government in all kinds of ways -- health, education, energy.
How do you respond to those kind of allegations from the former vice president?
GIBBS: Well, I guess Rush Limbaugh was busy...
(LAUGHTER)
... so they trotted out the next most popular member of the Republican cabal.
I would say that the president has made quite clear that keeping the American people safe and secure is the job -- is the most serious job that he has each and every day. I think the president saw over the past seven plus years the delay in bringing the very people to justice that committed terrorist acts on this soil and on foreign soil.
That delay in seeking swift and certain justice was what he decided to change through his executive order in changing the legal architecture by which these terrorists would finally be brought to justice.
I think the American people will in this administration see those actors brought to the swift and certain justice that was not brought to them in the previous administration.
QUESTION: On the economy, are you trying to take advantage of this crisis?
GIBBS: I think there are -- I think not taking economic advice from Dick Cheney would be maybe the best possible outcome of yesterday's interview.
QUESTION: Has the president read the Red Cross report on terrorism? And (INAUDIBLE) ban on torture -- I mean, on torture -- (INAUDIBLE) ban torture apply also apply to Bagram (ph), Abu Ghraib, (INAUDIBLE) outside of Guantanamo?
GIBBS: I will -- I should ask those guys specifically about your second question. I have not talked to him about the Red Cross report. Obviously, Helen, as you know, the president -- as I just said -- to add -- the president took steps the very earliest of his administration to examine and change..
SANCHEZ: There you have Robert Gibbs dealing with that contentious situation involving AIG.
