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Unemployment Figures Show Losses in Male-Dominated Fields; G-20 Communique Contains Just Enough Substance to be Considered a Success; First Lady Connects with London Girls
Aired April 03, 2009 - 10:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
HEIDI COLLINS, CNN ANCHOR: I want to get to this now, some breaking news to share with you.
The Iowa Supreme Court struck down a state law that bans same-sex marriage in the state. We're going to have more details coming up later on that story in the hour.
Also want to get to some of the other stories happening right now. About 100,000 college basketball fans are descending on Detroit for this weekend's Final Four game. The event could be a $50 million boost to Detroit's troubled economy. As for games, Michigan State plays Connecticut and North Carolina tips off against Villanova.
Michael Vick back in bankruptcy court this morning, he's testifying today about how he plans to change his life and return to the NFL. The former star quarterback was allowed to leave a Kansas prison to attend the federal trial in Virginia. He is serving time for his ties to a dog-fighting ring.
Madonna won't be going home from Malawi with a new daughter. A local judge rejected the pop star's petition to adopt a 4-year-old girl. The judge said he believes the child is being well taken care of in the orphanage and is better served by staying in her native country.
Quickly now, want to take a look at the Big Board, and there you see, Dow Jones Industrial Average is down just by double digits right now, still hovering right below that 8000 mark, so of course we will keep our eye on that for you throughout the day right here.
Meanwhile, the nation's lousy economy hits home for even more American families. New numbers show 663,000 jobs disappeared just last month. That pushes the nation's unemployment rate to 8.5 percent. That is the highest rate since November of 1983.
Want to take a wider view of the jobs picture now. CNN's senior correspondent Allan Chernoff has been crunching the numbers and joins us now from New York.
Good morning to you, Allan.
CHERNOFF: Good morning, Heidi.
What you just said really sums up a tremendous amount. It's been more than 25 years since the employment picture was this poor. Let's break it down.
First of all, by sex, men, women, 8.8 percent of adult men in the country are now unemployed. That's a very, very high number. Women seven percent. And why the big difference. Well the fact is more men are in the labor force, you have more men hunting for work right now. And keep in mind, the unemployment rate is the percentage of people who have been looking for work in the past four weeks. They just look at the people looking over the past four weeks. So that's a very important thing to consider, and the fact is, because of that, the real jobless rate is far worse.
Let's move on to race. Break it down by race. Whites, 7.9 percent, and look at the huge difference over here. This is really sad. Hispanic 11.4 percent. There is a disproportionate number of Hispanic people who actually work within the construction industry and we all know what's been happening over there with housing slumping so much. So a very high rate there. And among blacks you see over 13 percent, an astoundingly high rate there. Heidi.
COLLINS: Allan, it is interesting to break it all down once we got this colossal number to see actually who is affected specifically. But what does it all mean?
CHERNOFF: It all means that the economy continues to be in bad shape.
Now, over the past few weeks, we've started to get a few economic numbers that show perhaps light at the end of the tunnel. However, you look at this, and doesn't seem like there is any light. What's going on? The fact is, unemployment is a lagging indicator. Companies need to feel confident that the economy and business, indeed, are picking up before they have the confidence to go ahead and start hiring again.
So we'll be seeing better numbers for the other economic indicators before unemployment improves. Heidi, that's the story.
COLLINS: All right. Well, we will be watching all of this very closely. Allan Chernoff, sure do appreciate that.
We are going to be talking more about these job numbers, but the former secretary of labor, and also the global financial crisis. There is a lot of talk and some agreement at this week's economic summit. So what's next? At the bottom of the hour, we are going to be talking with former economic advisors to Presidents Clinton and George W. Bush.
If you own a home or are ready to buy one, you'll want to see these numbers. Rates on 30-year mortgages are at the lowest level on record. After falling a second straight week. Mortgage giant Freddie Mac says the average fixed rate dropped to 4.78 percent. Rates are down by more than a full percentage point from a year ago. That has sparked a surge in refinancing activity.
President Obama scored a key victory on Capitol Hill. Both the House and Senate have passed versions of his budget plan for next year. Passage came mostly along party line. The two versions differ only slightly though. The House spending plan runs $3.6 trillion and the Senate budget plan slightly less. Both forecast a deficit of $1.2 trillion.
A feared rocket launch by North Korea may be only a day away. Japan already has its military on alert. South Korea may follow suit today. Today, they are also offering to send an envoy to their northern neighbor in an effort to head off the controversial launch. We'll stay on top of that for you.
North Korea says, though, there is nothing to worry about, unless someone tries to shoot down their rocket. President Obama talked about it earlier this morning, calling the plan launch, "provocative."
CNN's John Vauss takes a look at what is really at stake with North Korea.
(BEGIN VIDEOTAPE)
JOHN VAUSS, CNN CORRESPONDENT (voice-over): North Korea's rocket on the launch pad, and according to analysts, all fueled up and ready to go.
JOE CIRINCIONE, CARNEGIE ENDOWMENT: This will be their third shot, I think the North Koreans are determined to make - to get that rocket off.
VAUSS: The North Koreans say they have every right to put a satellite into space while officials in Washington, Seoul and Tokyo argue the same technology could be used for an armed ballistic missile, which means the North is in clear violation of U.N. security council resolution. But that resolution was passed without an enforcement clause. And there are doubts anyway about just what can be done to a country which has routinely been hit by international sanctions.
DREW THOMPSON, NIXON CENTER: Kim Jong-Il has proven to be extremely resilient. The North Korean regime have been very resilient. They have resisted a great deal of coercion.
VAUSS: The bigger picture in all of this could be the on going but stalled negotiations aimed at ending the north nuclear program. The so-called six-party talks involving the two Koreas, the U.S., China, Russia and Japan. The north has warned any sanctions because of this rocket launch would kill those talks once and for all.
SELIG HARRISON, CENTER FOR INTERNATIONAL POLICY: So for that reason, the U.S. has not been building this up into a big threat. And I don't think it's clear whether they're going to be -- is going to be a serious effort to get sanctions.
VAUSS: And complicating any U.S. response, two American journalists currently being held in Pyongyang , and reportedly soon to be tried after allegedly illegally entering North Korea.
THOMPSON: They will certainly - the North Koreans will try to use them as part of yet another bargaining chip in their ongoing negotiations with the United States.
VAUSS (on camera): Unlike previous launches, this time the North Koreans have been open and up front, announcing a time frame, warning, international aviation and shipping. And so analysts believe only a mechanical or technical problem could delay or prevent this launch from going ahead. John Vauss, CNN, Beijing.
(END VIDEOTAPE)
COLLINS: President Obama's power of persuasion may be put to the test. He is visiting Germany and France, because those countries are hosting the annual NATO summit. President Obama is hoping to convince NATO allies to commit new troops to fight the Taliban in Afghanistan. President Nicholas Sarkozy praised the importance of that mission.
(BEGIN VIDEO CLIP)
NICOLAS SARKOZY, PRESIDENT OF FRANCE (through translator): Totally support American. New York was crucified. This could have happened in any other capital city. But it was New York that was being targeted. We as a democratic - must stand by our - in the face of extremists, terrorists. That is what is at stake there.
(END VIDEO CLIP)
COLLINS: So what is NATO? Here is a quick look for you.
The North Atlantic Treaty Organization is an alliance of 28 members, central to the membership, the pledge that each member will respond to an attack by an outside force. But that response would not have to be military. Its headquartered in Brussels, Belgium and tomorrow marks its 60th anniversary.
President Obama getting the rock star treatment in Europe today. His next stop, Germany. There he is to meet with the German Chancellor Angela Merkel. It may be hard to match President Obama's public reception, though. In Strasbourg, France, the president, Nicolas Sarkozy at his side, people pushed and shoved to shake hands with the American president.
Then, Mr. Obama held a town meeting. It wrapped up just a little while ago. We were there for you live, and we will continue to follow what happens next.
Again, the president heading to Baden-Baden, on his way to meet with German Chancellor Angela Merkel.
Finally, a day to clean up here in the south. Reynolds Wolf standing by now to let us know more about all of this storm damage and the way people are going to kind of dig out.
If you will, Reynolds.
REYNOLDS WOLF, AMS METEOROLOGIST: Certainly some rough stuff. I tell you, the top half of that system is moving through parts of the Midwest and moving into the northeast. The bottom half of the system is south is all clear for the time being, but now parts of say Pennsylvania back in Ohio, even West Virginia under the gun. So too is Michigan.
Coming up in just a few moments, I'm going to let you know what this is going to mean for millions of people, and your weekend travel. It's moments away. We'll see you in a few.
(COMMERCIAL BREAK)
COLLINS: President Obama in Europe today. As you know by now, his next stop, Germany. There he is getting ready to meet with German chancellor Angela Merkel. But it may be pretty hard though to match president Obama's public reception in Strasbourg, France. Mr. Obama held a tow hall meeting there. It wrapped up just a few minutes ago.
CNN's White House correspondent Suzanne Malveaux joining us now with all of the highlights. Hi there, Suzanne.
SUZANNE MALVEAUX, CNN WHITE HOUSE CORRESPONDENT: Hi, Heidi. It really reminds me somewhat of the campaign when you see these huge crowds and the kind of enthusiasm that President Obama generates. Obviously, he's hoping to use his popularity and that enthusiasm to really put pressure on European leaders to move forward on a couple of fronts.
He says this is a renewed partnership that he is going to listen and learn, but that Europeans have to accept some of the responsibility and the burden. Well, what is he talking about? There are two things he says he envisions, a world without nuclear weapons, and that that is something the United States and Russia will be looking to reduce their nuclear arsenals.
With he is also, Heidi, talking about Afghanistan, he wants more contributions from these European allies, not talking about troops, necessarily, although that would be the ideal. But he is talking about resources, money, helping civilians out. Those are the kinds of things that he wants. And it is going to be a tough sell. Take a listen, Heidi.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: We stand here in a city that used to stand at the center of European conflict, only now it is the center of European Union. We did that together. Now we must not give up on one another. We must renew this relationship for a new generation. In a new century, we must hold firm to our common values, hold firm to our faith in one another, together, I am confident that we can achieve the promise of a new day.
(END VIDEO CLIP)
MALVEAUX: Heidi, we saw both President Obama with the French president Nicolas Sarkozy, very excited, it seems, enthusiastic about working with President Obama. He actually said after their meeting together that it feels really good to work with a U.S. president who wants to change the world and who understands the world. We heard from Sarkozy saying that, in fact, he would take one of the detainees from Guantanamo Detention Center as a symbolic gesture to try to help close that base. He did not commit however on a symbolic gesture. He did not commit, however, U.S. troops. That is not something that France is planning on doing, but obviously contributing in other ways. We will also look forward to a meeting, president Obama with the German chancellor, Angela Merkel.
Now it was just last year that their body, their parliament voted, yes, they'll do a troop increase to 4,500 or so in Afghanistan, but it's not really a safe portion of the country, a relatively safe, not taking some of the same risks that other NATO members are. So he is going to be sitting down with her and talking about ways that they contribute as well. Obviously, trying to push forward to get folks to do not necessarily what they want to do, but what the United States needs them to do. He emphasized it's not just a U.S. mission but it really is a world and a NATO mission, Heidi.
COLLINS: All right. CNN's Suzanne Malveaux for us, coming to us from France today. We sure do appreciate it. We will watch the president go on to Baden-Baden. Thanks so much, Suzanne.
Quickly, we are looking at those pictures actually right now. You saw there, we'll good back to here now the German chancellor Angela Merkel there. In Baden-Baden, we'll be talking with her, as you just heard, Suzanne say about a variety of topics, specifically their commitment to Afghanistan as just one. And we will get the very latest on those meetings in just as soon as they are complete. We will follow that story for you, of course, throughout the day right here in the CNN NEWSROOM.
Meanwhile, this also just into the CNN NEWSROOM. The Iowa Supreme Court has overturned a ban on same-sex marriage, and ruled is unconstitutional. Same-sex partners sued Iowa, claiming state laws prevented them from marrying, violated their rights. Today's decision upheld a 2007 district court judge's ruling that the law violated the state constitution. Iowa becomes now the third state in the nation to allow same-sex marriage after Massachusetts and Connecticut.
The Vermont house passed a bill that would allow same-sex marriage, but the governor he plans to veto it. The vote came late yesterday after five hours of debate. Supporters need additional votes now to over ride a veto. If they succeed, Vermont would then become the fourth U.S. state it allow gay and lesbian couples to marry.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Everything was flying in the air. The trees were falling. I mean, everywhere.
(END VIDEO CLIP)
COLLINS: The people who live in this part of northern Alabama say they think a tornado did all of this. But that has not yet been confirmed. The weather service is looking into a number of sightings across the southeast. It's been a wild few days, that's for sure, Reynolds. It's always interesting that we got to wait for National Weather Service to actually determine whether or not it was indeed a tornado.
WOLF: I know. The thing is we always get caught up, was it a tornado or not.
COLLINS: Yes.
WOLF: The thing is, damage is damage. They got a huge clean-up.
COLLINS: Exactly.
WOLF: You know what, you're seeing images right here. This is actually from parts of Tallahassee, where they had over 3.4 inches of rainfall, and you see, when all that rainfalls at a very quick time, it begins to stack up and you've got widespread flooding. You're going to have to wait a while, even though it's not raining at this time for that water to recede. And when it does, they will also have a mess to clean up. Switching gears, we show you some video there, too, Heidi, of Nashville.
COLLINS: Look at that.
WOLF: Yes, I mean it's hard to believe. You know, this is the reason we often tell people that before you even have severe weather outbreak, you need to have a plan in your head as to what you're going to do in times of a tornado warning, or severe weather.
COLLINS: Yes.
WOLF: Because this kind of stuff happens very quickly. And it is a devastating effect, no doubt. But certainly not the only places in the world that dealt with some rough weather yesterday in the southeast. Alma, Georgia with over three inches of rainfall. Savannah, same deal, Macon, Georgia, 2.78. We're not seeing much of the rainfall now moving well to the north. The top half of the area of low pressure bringing in scattered showers in places like Detroit where, we have live images of Detroit right now, and folks, take a look at this, kind of hard to see, you can see the back drop of the city, the city skyline, a lot of rain drops there.
This camera shot is actually taken in Windsor, Canada, looking across the Detroit River to the north and that's what you see. Just a rainy day there. Farther to the north along parts of 75, you're going to be dealing with not just rain, but possibly a touch of snowfall, and if you want to talk about some serious snow, you got to have to head on towards the west. We have winter storm warnings and watches that are in effect, especially the central plains back into portions of the Dakotas. And with all of that, the rain and the wind and of course the snow, we're going to have some widespread delays.
No surprise, we got them in New York, La Guardia, a three hour fifteen minute wait. Washington, D.C. about half an hour and certainly same deal with Teterboro, White Plains about an hour and fifteen. Newark, two hours and 55 minutes. Four hours at JFK. You know, when you're in the terminal, just enjoy your coffee, be patient, wait for the weather to get better and stay tuned to CNN. We'll be talking to you all day long.
COLLINS: Yes. Maybe six or 10 coffees.
WOLF: Absolutely.
COLLINS: All right. Reynolds, thank you. We'll check back with you later on. Meanwhile, there's this, two down power lines, maybe blamed for a ferocious fire that destroyed dozens of homes in Texas. It happened in the small town of Lagardo, in the southern part of the state. The fierce winds that downed the power lines also made it harder for crews to contain the fire. About 34 homes were destroyed in the 175-acre blaze. And a firefighter was also injured.
Brain injuries and kids. We answer your e-mails. It is vital information you need to know. And once again, we want to show you these pictures also in to us, live pictures for you. President Barack Obama now in Baden-Baden, Germany. Having bilateral meeting with the chancellor there. We'll keep an eye on it for you.
(COMMERCIAL BREAK)
COLLINS: Well, it's been a bad week for big tobacco. Wednesday, a new 62 cent per pack federal tobacco tax went into effect. And yesterday, the House approved a new bill that would allow new government regulation of the tobacco companies. The bill gives the FDA the power to control advertising and ingredients for cigarettes. The bill still needs to get through the senate.
Well, it's empower me Friday. Every week, we turn our Friday medical segment over to you, our viewers, and ask what you are interested in learning more about. I am interested in learning how to talk. CNN senior medical correspondent Elizabeth Cohen is joining us now. So last week, we were kind of talking about a brain injury. And I understand that people really responded to that.
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: Oh, we got such incredible response. You might remember, Heidi, that we were talking about a little girl named Morgan McCracken, the seven-year-old who got a head injury, a brain injury -
COLLINS: So scary.
COHEN: Just a day after Natasha Richardson, and she is alive today because her parents knew to act quickly, because of Natasha Richardson.
COLLINS: Yes, because...
COHEN: And they are forever in debt.
COLLINS: Yes, it was such a great story. She had hit her head, and then, you know, they really didn't know how serious it was, didn't to overreact, and thank goodness that they sought medical attention. COHEN: Thank goodness.
COLLINS: So in reaction to that, we've got several questions. I want to get to the first one here. This is from Bruce. He asked this. What about babies and toddlers? Young children frequently fall and hit their head. It's especially hard to diagnosis symptoms when the children are too young to talk. Great question. When do we go to the E.R.?
COHEN: It is. Every parent I'm sure has wondered, well goodness, you know, just hit his head on the coffee table, what do I do? Kids fall and hit their heads a lot. Luckily, they're small, so not coming from a high altitude, so that's a good thing. What you want to look for is there any change in the way your child is behaving -
COLLINS: Sure.
COHEN: Do they seem weak? Do they not want to play anymore? Are they vomiting? That's another sign to look for. And really use your mommy and daddy instincts, if something seems not quite right, that's enough to warrant a trip to the E.R.. It's OK to overreact than under react.
COLLINS: Yes, mommy and daddy instincts when you're a new parent though, I mean, seems like -
COHEN: It's scary, just go. But if they seem different - if the child seems different in any other way, that's the first key.
COLLINS: OK. Very good. Our next one comes from Cindy. She wants to know this. Does severity of exactly where on your head you are hit matter? My nine-year-old son flipped backwards off his four- wheeler and hit the back side of his head on the pavement this past Sunday.
COHEN: Oh, sounds like it hurt. The problem with the back of the head, you fall backwards, is you can't protect yourself -
COLLINS: Right.
COHEN: Your arms can't break the fall. That's the problem with the back of the head. But there is an area that is particularly vulnerable. It's not good to hit your head anywhere, but the area just above your temple, which is where Morgan McCracken hit her head, that is particularly vulnerable, pause the bone is relatively thin and if it cracks, it could pierce an artery or it may even cause a big bleed. So this area of the head, it is particularly vulnerable.
COLLINS: OK. All right. Very good. So I know you've got a whole lot of questions, mainly on this. How long should you worry if somebody falls, your child falls, how long do you watch them?
COHEN: Right. That's the question we got most often. People said oh, my child fell two weeks ago. Should I still be worried?
COLLINS: Yes.
COHEN: Two weeks ago, the neurosurgeons told us, that's far enough away. You shouldn't be worried. The time that you really want to keep a watch on anyone after with a brain injury or a head injury is 12 hours. Those first 12 hours are key. It can even be further along than that, but still those first 12 hours are key.
COLLINS: OK. Very good. This is great. Very good. We look forward to it again next Friday. Empower me Friday. Make sure you get your e-mail -
COHEN: That's right, empoweredpatient@cnn.com if you want to send any questions, send them our way.
COLLINS: All right. Very good. Thank you, Elizabeth.
Progress at the G-20. World leaders take the first steps toward global recovery. But what does it really accomplish? We're taking a look.
(COMMERCIAL BREAK)
ANNOUNCER: Live in the CNN NEWSROOM, Heidi Collins.
COLLINS: There are grim new unemployment numbers. The national jobless rate now 8.5 percent, the highest since November of 1983. A short time ago on Capitol Hill a I bit more illumination. Very little encouragement.
(BEGIN VIDEO CLIP)
REP. CAROLYN MALONEY (D), JOINT ECONOMIC COMMITTEE CO-CHAIR: Do you have any good news? Are there any positive economic indicators? Are there any bright spots in this month's job report?
KEITH HALL, BUREAU OF LABOR STATISTICS COMMISSIONER: There are very few bright spots in this month's job report.
MALONEY: Are there any anywhere?
HALL: To be honest, no. In fact, the decline has been remarkably consistent. This month we lost 663,000 jobs. Over the past five months, we've averaged losing 657,000 jobs.
(END VIDEO CLIP)
COLLINS: Here are a couple more sobering numbers, too. For the first three months of this year, two million jobs have disappeared. If you go back to the beginning of last year, 5.1 million jobs have been lost. So those new unemployment numbers pretty tough. But on Wall Street, investors are taking it in stride, it seems.
Susan Lisovicz on the floor of the New York Stock exchange this morning to help us understand all of this. Hard to really attribute, Susan, any one factor when we look at numbers like the Dow. SUSAN LISOVICZ, CNN CORRESPONDENT: That's right. I mean, you know, well, Heidi, I'm going to give you a bright spot, OK? And it's a little distorted, I would imagine.
COLLINS: That's my girl.
LISOVICZ: The bright spot is that the numbers didn't come in worse than expected. And we may - I mean, there is hope that we may have hit the bottom, because January was revised lower. January's numbers were a whopping 741,000 jobs lost in the month. These numbers for March came in as expected. They're terrible. No question about it. The unemployment rate is terrible. But everyone on the street here was - knows that the first quarter of this year may be the worse of this recession.
And so the numbers coming in as expected is kind of a relief. And that's your bright spot. Having said that, Heidi, two million jobs have been lost in the first three months of the year. And you know, there was a private payroll number earlier this week that prepared the street for worse, and it did not come in worse. And that's why you see the market handling it pretty well. The Dow is down 42 points after three days of gains, the Nasdaq is down just modestly -- Heidi.
COLLINS: Digging deeper into the job numbers, if we really want to do that. I'm not sure. But important to know, who's really getting hit the hardest here?
LISOVICZ: Well, men are getting hit harder than women, substantially, by about two percentage points. And why is that, Heidi? When you look into the sectors that are hardest-hit, you look at construction and manufacturing, and there are just simply more men in those fields.
Where women -- there are a lost women in education and health care, and those are the sectors that have been holding up in this recession.
COLLINS: Need to have more women in the workplace, sounds like to me, but I guess that's a different study. What about the level of education, though? How does that...
LISOVICZ: We need to talk about the difference in pay, as well.
COLLINS: Yes, yes, yes. Hey, let's start our own show, right here, right now. How does that factor...
LISOVICZ: Let's air our grievances.
COLLINS: ... into unemployment, though, education in particular?
LISOVICZ: OK, well, education is something really critical, and you can see the numbers. If you don't have a high school degree, I mean, the average -- you're seeing double-digit unemployment. So, you know, everything that Michelle Obama was talking about yesterday in England, education makes the difference. Boy, it really plays out in these numbers here. If you are a high school grad, still higher than the national average unemployment rates, 9 percent. You have some college or an associate's degree, 7.2. So, you see that number coming out. And a bachelor's degree or higher, 4.3 percent.
So, really makes a difference. And one of the things we've seen, growth in education, people are going back for their degrees. That is an area of growth. People can't find jobs, so they're just getting another degree or studying for a trade or something like that, so they're in a better position to get work.
COLLINS: All right. Susan Lisovicz, watching it all for us. We sure do appreciate it. Thank you, Susan.
LISOVICZ: You're welcome, Heidi.
COLLINS: Through the protests and photo ops, there was some work getting done at the G-20 summit in London. The world leaders agreed on steps to help lessen the economic crisis.
CNN's Paula Newton takes a look at what they did accomplish.
(BEGIN VIDEOTAPE)
PAULA NEWTON, CNN INTERNATIONAL SECURITY CORRESPONDENT (voice- over): Through the usual blasts of rhetoric and fog of proposals, the G-20 leaders seem to have pulled something for this summit, but only just. There is no epic new deal that some were banking on months ago, but enough substance to label this summit a qualified success.
OBAMA: I have no doubt, though, that the steps that have been taken are critical to preventing us sliding into a depression. They are bolder and more rapid than any international response that we've seen to a financial crisis in memory.
UNIDENTIFIED MALE: Be ready to begin in just a minute. Thank you.
NEWTON: On the details, the summit's ambitious host was categorical: new money for the IMF, world trade and a crackdown on rogue banking will produce a more stable world economy, changing the nuts and bolts of how capitalism works.
GORDON BROWN, BRITISH PRIME MINISTER: This is the day that the world came together to fight back against the global recession. Not with words, but with a plan for global recovery and for reform.
NEWTON: The communiques sketched out a compromise that was months in the making. No,promises on a new global stimulus package; a half trillion-dollar boost for the IMF to rescue countries in financial trouble; a $250 billion fund to bankroll exports and jump- start world trade; and a comprehensive crackdown on financial institutions around the world, including executive pay, hedge funds and, crucially, tax havens. French President Nicolas Sarkozy, who says this summit had to be about more than platitudes, claims and he other leaders delivered, especially on his key demand to wipe out tax havens.
SARKOZY (through translator): The era of bank secrecy is now over. This is a principle, ladies and gentlemen, a principle subscribed to by the 20 countries represented around the table.
NEWTON: The U.S. president, like others here, didn't get all he wanted. Specifically, more global cash propping up the world economy. But in the lighter moments of this summit, there was a sense that the world's biggest players were capable of pulling together in a crisis.
These leaders haven't saved the world economy or even reformed it. Not yet. These agreements are lifelines for people in countries now trying to claw their way back from the brink.
Paula Newton, CNN, London.
(END VIDEOTAPE)
COLLINS: The world leaders walked away from the G-20 on a positive note with some new policies and ideas in their pockets. But we want to know what comes next. Joining me now from Washington is Keith Hennessey, former chief economic adviser under President George W. Bush; and from brkeley, California, former Secretary of Labor Robert Reich.
Let's go ahead and begin on the West Coast this morning. Secretary Reich, so we have this communique, and you've heard some of the details, I'm sure. But a lot of people are wondering, now what? I mean, is there any sort of guarantee that this has really stopped the downturn of a global economic crisis?
ROBERT REICH, FORMER U.S. SECRETARY OF LABOR: Heidi, absolutely no guarantee at all. I mean, the good news coming out of the G-20 is what did not happen. Nobody walked out. The global leaders did not say, we're going to resort to protectionism, we're going to protect our own jobs and our own companies instead of joining together.
And there was a commitment to a trillion dollars for poor nations to help their economies. Look, we never expected -- nobody ever expected the G-20 was going to be the turnaround for the global economy, but it was a step in the right direction.
COLLINS: But didn't it have to be different this time around? I mean, that was certainly the run up to it, and it seems like kind of low expectations to say, well, you know, it went OK because nobody walked away from the table.
REICH: Well, I can tell you as somebody who has been at international conferences and cabinet ministers, these things are so big, so unwieldy, it is so difficult to get different leaders with different political agendas together on the same page, marching in the same direction. It's a miracle they came out with something actually quite positive.
And I don't want to understate how positive it was. This trillion dollars for developing nations is very important. But the big action is going to be back in individual nations in terms of stimulus packages and getting the banking systems actually working again, and that means the leaders go back home, and then the work really starts.
COLLINS: Yes. How do you guarantee that the work is going to get done at that point, when they are away from the collective bargaining table?
REICH: Well, the real work is going to happen now that the leaders are back. They are facing electorates that are suffering from increasing joblessness here in the United States. We just got the reports...
COLLINS: We sure did.
REICH: ... on March's job numbers. Absolutely awful. And I think that Barack Obama's going to come back and maybe even -- I don't have any inside knowledge on this, but maybe even go back to Congress, asking for an additional stimulus package. Because there is such a huge gap globally and in the United States and in every other nation between what could be produced at full employment.
And now, where we are right now, one out of six Americans is either unemployed or underemployed. This is -- it's not a depression officially, Heidi, but it's pretty close to what we might call a depression.
COLLINS: Yes. And as we've been saying this morning, boy, it's the worst number since 1983, so we're going to be talking about that more with you in just a moment. But I want to take a moment to bring you now Keith Hennessey now, former White House chief economic adviser under President George W. Bush.
You know, Keith, you served, just so we set this up correctly here, in the same position that Larry Summers is serving in right now for President Obama.
KEITH HENNESSEY, FORMER WHITE HOUSE CHIEF ECONOMIC ADVISER: That's right.
COLLINS: Do me a favor and listen with me to President Obama's brief assessment now of this G-20 communique.
(BEGIN VIDEO CLIP)
OBAMA: I think the steps in the communique were necessary. Whether they're sufficient, we've got to wait and see.
(END VIDEO CLIP)
COLLINS: Wait and see. Keith, do you see anything in this communique that will guarantee or at least really move in the direction of stopping or turning around the downturn in the global economy?
HENNESSEY: Well, Heidi, I think it's important to distinguish between the short term and the long term. In the short term, I think that the statement to push back on protectionism, I think is really important in the short term. I think that the continued statements that the various nations need to take actions to strengthen their banking sectors, I think that's important over the next three to six to nine months.
I agree with Secretary Reich. The important thing now is how the national governments go back and act on those things. I think a lot of the progress that was made, some of which I support, some of which I'm not super-excited about, was actually on longer-term measures about restructuring the financial system for the future. That's important, but I -- what I would hope leaders would do right now is focus on the urgent situation.
COLLINS: Yes. What about this $1.1 trillion, though? I mean, you know, let's face it. We've been throwing around such large numbers, it really just seems like another big fat number. But isn't that supposed to specifically make more capital available and really encourage greater international trade here, getting away even further from the idea of protectionism?
HENNESSEY: Yes, that's a nice headline number. From the way that I've been reading about it in the press and from my read of the communique...
COLLINS: But?
HENNESSEY: ... I'm not sure I would actually say that there's a trillion dollars of oomph that's been put into the system. I think the trade credits there are the unquestionably good thing, because I think while individual nations are taking action back home, the most important positive short-run things that the G-20 did was they agreed that they need to keep open trade and investment, and they've put in some money to make sure that happens.
COLLINS: All right. Let's get back to that idea really quickly with you, to the U.S. economy and regulation and reform. We've seen a whole lot of that going on, you know, out in the press, as well, the idea of this super-regulator. And then we also had the president of the United States asking for the resignation of a CEO.
What's happening here? Are we moving in the right direction?
HENNESSEY: Well, I think that the senior policymakers are making the best decisions they can when all of the options in front of them are bad. I think that we're -- with a lot of these situations, we're dealing with institutions that they are judging to be too big to fail.
If you have a large institution that you're afraid of the consequences of a sudden failure, a sudden and disorderly failure, then you're in a situation where you've got no other alternative but to put taxpayer funds in. The one thing that concerned me about the past week were reports that the decision to fire a CEO was actually made in the West Wing of the White House.
When the Bush administration was dealing with these questions, we tried to make sure that those decisions were made by regulators or by people who were a bit more separated from the politics.
COLLINS: All right. Understood. I want to bring both of you in now together just for a moment here, because there has been so much talk about free markets and free trade being in jeopardy. Let's listen for a moment together to President Obama, just this morning.
(BEGIN VIDEO CLIP)
OBAMA: We can't give up on open markets, even as we work to ensure that trade is both free and fair. We cannot forget how many millions that trade has lifted out of poverty and into the middle class. We can't forget the part of the freedom that our nation stood for throughout the Cold War was the opportunity that comes from free enterprise and individual liberty.
(END VIDEO CLIP)
COLLINS: Secretary Reich, to you first. Free markets, free trade going to suffer here?
REICH: Well, they already are suffering, Heidi. I mean, even giving extra money to General Motors and to Chrysler and not to the Japanese automakers in the United States who are hiring American workers is a form of protectionism. Deciding that we're going to have "Buy America" provisions in our stimulus package, while I don't oppose those provisions, that is a form of protectionism.
And every other government around the world right now is also having enormous pressure, coming under enormous pressure from its own companies and its own workers to protect them and to favor them, with regard to all kinds of subsidies and tax credits.
COLLINS: OK.
REICH: So protectionists have -- you know, protectionist pressures are inevitably growing.
COLLINS: Quickly, Keith, your thoughts on that.
HENNESSEY: I love that he used the word "freedom" so many times.
COLLINS: You guys kind of seem in agreement here today. What's going on?
HENNESSEY: Hey, it's a bipartisan agreement here. I love that he used the word "freedom." One of my biggest disappointments with the new G-20 agreement is it dropped the word free out in front of "markets." November's said that free markets, private property, rule of law and efficient investment are important. All of those concepts seem to have dropped out of the latest communique, so it's great that the American leader is talking about freedom.
COLLINS: Quickly, last question for you both. Keith, I'll start with you. You know, we just patched this budget yesterday, as you heard last night, $3.53 trillion. You know, I know I'm not alone when I think about the deficit. My kids, their kids and so on and so forth. Your thoughts there.
HENNESSEY: The first rule of holes is when you're in one, you stop digging. We've got a big deficit. A lot of that has been forced upon us because of the financial situation. My big problem is massive increases in spending and massive increases in taxes. I just think it's bad in the short run, and I think with the long-term entitlement spending trends we've got, we've got to deal with spending. We've got to start getting it under control now.
COLLINS: Secretary Reich, your thoughts.
REICH: Well, here's where I would disagree with Keith. I think right now, when consumers are not spending and businesses are not spending and export markets are dead in the water, there is only one spender left, the spender of last resort, and that is government. If we want people to get jobs back, if we want the economy to get actually back on track, there's no substitute for government spending that stimulates the economy. My big fear is that the stimulus package we have now may be just too small. COLLINS: All right, thanks to the both of you for a gentlemenly discussion. We sure do appreciaate that. Secretary Robert Reich and also Keith Hennessey. We appreciate your time. Thank you.
REICH: Thanks, Heidi.
HENNESSEY: Thanks, Heidi.
COLLINS: Instead of cutting back, a CEO in New Jersey is giving his employees money to stimulate the economy.
(COMMERCIAL BREAK)
COLLINS: Finding fault at AIG. The man who built up the insurance giant and was CEO until 2005 has no problem doing that. At a congressional hearing yesterday, Maurice Greenberg blamed the company's downfall on executives who came after him. Greenberg says they recklessly abandoned proper risk procedures to make more money.
(BEGIN VIDEO CLIP)
MAURICE GREENBERG, FORMER CEO, AIG: AIG's business model did not fail, its management did. AIG's business model has a long track record of success over many decades. AIG can recover from its immediate crisis, continue to be an employer of tens of thousands of hard-working Americans and repay the assistance it has received from the American taxpayer. But only if both the government and AIG's management change their approach in dealing with its future.
(END VIDEO CLIP)
COLLINS: A spokesman for AIG disputes Greenberg's claim, saying the former CEO approved of selling risky credit default swaps.
Several banks that received bailout money have already repaid millions to the government. The Treasury Department says five banks returned a total of $353 million. The banks are located in Louisiana, Indiana, New York, California and West Virginia. They were the first to repay the government in order to avoid tough restrictions that go with bailout cash.
The housing crisis is forcing thousands of Latinos in North Carolina to return to their homes south of of the border. They call it the exodus. Fourteen buses a week leave Winston-Salem bound for Mexico City. Officials say with the decline in new home construction and landscaping jobs, many Hispanics who work in those industries are being forced to return home. And local businesses are suffering.
(BEGIN VIDEO CLIP)
MIGUEL QUADRA, STORE OWNER: Now it's slow, you see, because many people go back to Mexico. It's difficult to find a job or something to do.
(END VIDEO CLIP)
COLLINS: The Department of Immigration reports more than 140,000 Latinos returned to Mexico and South America in 2008.
While many companies are laying people off and shying away from giving bonuses, a CEO in New Jersey surprised his employees with extra cash. Jack Windolf gave 434 workers at Bollinger Insurance Solutions $1,000 from his own paycheck. He says it's a mini stimulus package.
(BEGIN VIDEO CLIP)
JACK WINDOLF, CEO, BOLLINGER INSURANCE SOLUTIONS: When the economy went the way it was going, and there was all this bad news, and I thought, you know, this would be a really good thing at this point in time for our employees, and maybe it could kind of jump-start the economy a little bit.
(END VIDEO CLIP)
COLLINS: The employees found the envelopes in their mailboxes on St. Patrick's Day. Windolf's only request was that they spend it on themselves or loved ones.
A woman is accused of plotting to get her teenage daughter pregnant against her will. The horrifying allegations in the girl's own words.
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COLLINS: A robbery suspect who took his nine-year-old daughter on a stick-up is still at large, but the outrage over his actions still apparent in the store clerk he robbed.
(BEGIN VIDEO CLIP)
ERIC OWENS, CLERK: Why would you commit a crime with a child next to you? Why would you do that?
(END VIDEO CLIP) COLLINS: We now know the suspect is a recently unemployed optician. He told the clerk he need the money to help his daughter survive. The man and the girl left the store, driving from Washington to south California. He was staying with an acquaintance, who learned the man was wanted and called police. The man took off, leaving the girl. Her mother was on her way to pick her up.
In Pennsylvania, a woman is accused of an unthinkable act. Police said she teamed up with her boyfriend to try to get her teenage daughter pregnant against her will. Here's Kimberly Easton with our affiliate WPXI.
(BEGIN VIDEOTAPE)
UNIDENTIFIED FEMALE: And he grabbed me by my wrist, and he had a firm grip on my wrist, and he drug me into his living room. And I'm fighting him to get off of me.
KIMBERLY EASTON, WPXI-TV CORRESPONDENT (voice-over): Police say this 13-year-old victim, who we cannot identify, says her mother's boyfriend, 40-year-old Dwayne Callaway (ph), is the one who tried to get her pregnant after she refused to obey her mother's unconscionable request.
UNIDENTIFIED FEMALE: She said, I want you to have his baby. And I said, no.
EASTON (on camera): For her?
UNIDENTIFIED FEMALE: Yes, "for me. " And I said no. And then when I told her no, she got upset, and she had said everybody else can be happy but her.
EASTON (voice-over): The girl says her mother wanted Callaway to get her pregnant because she could no longer have any children of her own. Police say when the girl continued to refuse their requests, the two sunk to an all-new level.
DET. DONALD GMITTER, UNIONTOWN POLICE: They attempted to intoxicate the daughter to the point where she was incoherent as to what was going on.
EASTON: I asked the girl's mother myself.
(on camera): Did you really try to get your boyfriend to get your daughter pregnant?
(voice-over): The girl's step grandmother says this alleged behavior is unacceptable.
UNIDENTIFIED FEMALE: I can't fathom what kind of a mother would do this to their daughter. A mother does everything they can to protect their kids, not exploit them.
(END VIDEOTAPE) COLLINS: While in London, first lady michelle obama surprised students at an all-girls school. Why she got choked up during the visit.
(COMMERCIAL BREAK)
COLLINS: First lady Michelle Obama is in Germany now, but while in London, she was a surprise guest the at an all-girls school in an impoverished area. Mrs. Obama talked to the girls and got a little choked up.
(BEGIN VIDEO CLIP)
MICHELLE OBAMA, FIRST LADY OF THE UNITED STATES: I wasn't raised with wealth or resources or any social standing to speak of. I was raised on the South Side of Chicago. That's the real part of Chicago. And I was the product of a working-class community.
My father was a city worker all of his life. And my mother was a stay-at-home mom, and she stayed at home to take care of me and my older brother. Neither of them attended university.
My dad was diagnosed with multiple sclerosis in the prime of his life. But even as it get harder for him to walk and get dressed in the morning -- I saw him struggle more and more -- my father never complained about his struggle. He was grateful for what he had. He just woke up a little earlier and worked a little harder.
And my brother and I were raised with all that you really need, love, strong values and the belief that with a good education and a whole lot of hard work, that there was nothing that we could not do. I am an example of what's possible when girls from the very beginning of their lives are loved and nurtured by the people around them. It is important for the world to know that there are wonderful girls like you all over the world. All over the world.
(END VIDEO CLIP)
COLLINS: Before leaving the school, Mrs. Obama spent several minutes trying to hug as many students as she could, including each of the 24 members of the choir who shared the stage with her.
The NATO summit continues, President Obama arriving in Germany a short time ago for a meeting with German Chancellor Angela Merkel.
I'm Heidi Collins. CNN NEWSROOM continues our coverage of President Obama's first trip abroad with Tony Harris. It starts right now.
