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Two Big Banks Reject California IOUs; Ghana's Gain, Kenya's Loss; Black Kids Turned Away From Pool

Aired July 10, 2009 - 14:00   ET

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

ALI VELSHI, CNN ANCHOR: IOU, no thank you. California, the world's eighth-biggest economy if it was a country of its own, perhaps one of the most cash-strapped, started issuing IOUs last week. Now, there's a problem. Two major banks, Wells Fargo and Bank of America, have decided to stop accepting them, showing that they don't have much faith in the state's ability to pay its bills. That gives fewer people places to cash their IOUs, although more than 60 credit unions say they are still accepting them.

California has issued 91,200 IOUs worth more than $354 million. Who's getting them? Well, taxpayers who are owed refunds, social-service agencies, state contractors, local governments, small businesses that do business with the state. California is trying to deal with a $26 billion budget gap, which means $26 billion more in spending than it has in revenue.

Well, if it could happen there, could it bleed over into your state? Well, if you hold one of those IOUs, what do you do about it? Our Kara Finnstrom is in Los Angeles with more on that -- Kara.

KARA FINNSTROM, CNN CORRESPONDENT: Well, Ali, some of California's largest banks are now putting more pressure on the state's lawmakers to come up with a solution to this budget crisis. The banks not feeling they can or should indefinitely cover for the state as they fight over what to do.

Now, here's how serious the problem is. California's state controller, who has been issuing these IOUs since July 2nd, says a continued stalemate over budget solutions would push up California's cash deficit to a projected $3.7 billion in August, and by September to $6.5 billion. But the deficit keeps rising, and partisan squabbling over how to handle it keeps escalating.

FINNSTROM: Here's what the governor had to say earlier this week.

(BEGIN VIDEO CLIP)

GOV. ARNOLD SCHWARZENEGGER (R), CALIFORNIA: I have asked over and over and over the legislators upstairs to just focus on the budget. And here they are, they are debating over the definition of honey. And a week ago, they debated over cow tails (ph). And a few weeks before that, they debated over should we have a blueberry commission.

I think it's ridiculous. I think they should get serious and they should do nothing else but address the budget.

(END VIDEO CLIP)

FINNSTROM: Solving this budget won't be easy, though. The legislature did raise taxes earlier this year, it cut many government programs. Voters now not in the mood for more of the same. It's not clear now whether a hard-line stance by banks will force action.

In the meantime, though, California's credit unions, as you mentioned, Ali, do appear ready to help. At least 60 state credit unions have agreed to redeem those IOUs at face value. Credit unions not hit as hard as banks during the housing meltdown, so they can better afford to sit on these notes. They see it as a business opportunity.

And another option for folks with IOUs, maybe some check-cashing companies, though they are more likely to redeem those IOUs at a discount.

ALI VELSHI, CNN ANCHOR: Yes. In other words, a big fee for doing it.

Kara, thanks very much for doing that.

All right. Some of the big boys, the big banks, are no longer taking IOUs. It doesn't mean you are going to get shortchanged. Or does it?

Just ask "Sacramento Bee" business writer Dale Kasler, who says people might be able to turn to a secondary market to cash their IOUs. Of course, that's little consolation to people like Al McGorry. He's a small business owner and he's joining us now. And he wants his money now. He's done business with the state, he's owed money, and he wants to be able to make payroll.

Let's start with you, Dale. Dale, you're thinking this isn't such a bad thing. It's the state of California, they are ultimately good for the money, and people shouldn't worry about it.

Tell me why.

DALE KASLER, BUSINESS WRITER, "SACRAMENTO BEE": Well, the state has never defaulted, and as low as its credit rating is, there is no expectation that it will default again. I think for most recipients of these IOUs, it's a question of cash flow rather than whether or not they will get paid.

VELSHI: And Al, that's kind of your issue, isn't it?

AL MCGORRY, OWNER, CAPITAL DATACORP: Oh, exactly. It's all about cash flow for us, because we've already gone in debt to provide the products and services that we've delivered. And our creditors are looking to get paid right now, not by October 2nd.

VELSHI: Tell me how this works. Tell me how this works, Al.

You do business with the government. You are a provider of services to the government. They owe you money. They have given you what? What happens? They mail you something, it looks like a check?

What does it look like? MCGORRY: Well, right now, it's called a registered warrant, and it looks like a check. And it says basically you don't get to do anything with it until October 2nd.

And right now, we were fortunate enough that I was able to deposit the ones that we did receive yesterday into Wells Fargo bank. But they said as of today, they are no longer accepting those as a negotiable instrument. And so we have to look for other places to make that happen.

VELSHI: Now Dale, what does that mean? So, if Al is trying to do that, and fewer places are taking that, is there any danger that people with these IOUs who need the cash aren't going to be able to get it?

KASLER: There is a danger. The major banks are saying that they will work with their customers. They'll try and arrange lines of credit, they'll forebear on debts that are owed, but it's going to be on a case-by-case basis. They are not making any promises. So, if you are a holder of an IOU and you need cash now, you might have to go to that secondary market which is starting to burble up.

VELSHI: And tell me where that is, because Kara Finnstrom just discussed that credit unions are doing it, that a lot of these check- cashing places are, but then you are paying a fee for that.

KASLER: Exactly. I mean, credit unions are extending beyond today. About 60 or so credit unions are going to take the IOUs. Many of them, of course, do not take business accounts. It's only good for individuals.

The secondary market consists -- it doesn't really exist yet. But you have people posting ads on Craigslist and eBay offering to buy these notes for less than face value. There is a firm in New York that says it will make a market in these IOUs.

VELSHI: And Al, are you worried about this just yet? You figure right now you can still unload the IOUs you get, but you're worried this is going to stop?

MCGORRY: Well, yes. It's a matter of cash flow timing for us. If we start getting all of our accounts receivables lined up being IOUs, and I have got no place to negotiate that instrument, or I have to negotiate it at a significant discount, that's going to really have an impact on me.

VELSHI: All right. We're all in the rest of the country going to be watching your state very closely to see what happens with these, obviously, because California is not the only state that is in that position. Several other states could be on the brink of a virtual government shutdown. They include Arizona, Indiana, Mississippi and Pennsylvania.

It's estimated the great majority of states have had to face or still face shortfalls in their budgets for the upcoming year. There are varying degrees of urgency in these other states, but it's definitely something to watch if your state has to pay you money in the form of an IOU.

All right. Remember when AIG caused a public uproar over paying out millions of dollars in bonuses, specifically to members of the part of that company that might have been responsible for triggering this financial crisis? Well, the bailed-out insurance companies owes millions more in bonuses, and it plans to pay them out.

But wait a second. Don't get angry all over again. You've already gotten angry about this one.

AIG is set to pay out a new installment of previously promised bonuses, and you're going to see this in the news. The latest installment, $2.4 million to 43 top executives.

AIG is seeking the government's consent to make the scheduled bonus payments. The bigger issue here, how or when will AIG pay $235 million in bonuses still owed to about 400 people in its crippled financial products division?

And it's a leaner GM, and for thousands of soon-to-be laid-off workers, definitely a meaner one. The automaker emerges from bankruptcy with fewer brands, fewer dealers, and fewer plants, and a new majority owner, the U.S. government.

What does it all mean? What does it mean to you? We'll find out this hour?

What do you do when you are the president and you have got some time between the end of the G8 summit and a trip to Africa? Well, you spend some quality time in Rome.

President Obama met up with Pone Benedict the XVI at the Vatican. The two discussed immigration, Middle East peace, and aid to developing nations. And apparently they discussed abortion rights. The pope also met the first family and gave them a special blessing.

Well, next stop on the president's trip, Ghana, on the west coast of Africa. It seems kind of random, but Mr. Obama considers that country a good role model for other developing nations in Africa.

Here is what he said about it before he left Italy.

(BEGIN VIDEO CLIP)

BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: Part of the reason that we're traveling to Ghana is because you have got there a functioning democracy, a president who is serious about reducing corruption, and you have seen significant economic growth. So I don't want to overly generalize it, but I do want to make the broader point that a government that is stable, that is not engaging in tribal conflicts, that can give people confidence and security that their work will be rewarded, that is investing in its people and their skills and talents, those countries can succeed.

(END VIDEO CLIP) VELSHI: Way to go, Ghana, but what about Kenya, the country I was born in and the president has family ties to it? So, if he's in the neighborhood, why wouldn't he go there?

Kenya is feeling kind of snubbed. Here is CNN's David McKenzie.

(BEGIN VIDEOTAPE)

DAVID MCKENZIE, CNN CORRESPONDENT (voice-over): A trip to foreign shores has always been a way for U.S. presidents to reward America's allies. And a visit by President Barack Obama, one of America's most popular leaders, is a very big thing for some.

For his first presidential trip to Sub-Saharan Africa, Mr. Obama has chosen Ghana, saying the country should be rewarded for its stable democracy and political reforms. The visit has generated excitement in Ghana, but it's bitterly disappointing for another African nation, Kenya.

(on camera): It's worth remembering that Kenya is the center of Obamamania. His father, of course, is from the country. His grandmother lives in the west. He has family members all around, including his half-brother right here in Nairobi.

And in the lead-up to the election, Kenya was the center of major parties for the president. So, many had hoped he would have come here.

(voice-over): Some Kenyan analysts believe that President Obama's decision was meant as a message to Kenya's leaders.

MICHAEL TIAMPATI, POLITICAL ANALYST: Anybody of above-average intelligence would know that he's trying to make a statement that he may not be happy to be identified with Kenya because of the situation that is prevailing, whereby we seem to be yo-yoing. We are moving forwards and backwards, and we're not getting anywhere.

MCKENZIE: The prevailing situation is that of endless political bickering. And like Ghana, Kenya recently conducted disputed elections that led to violence. And despite calls from the U.S. and others for reform, this proudest African nation seems stalled.

Ordinary Kenyans are in two minds about Mr. Obama's decision.

UNIDENTIFIED FEMALE: I think he should have come to Kenya first as the place of his homeland, of his origin. He didn't come. Maybe he had his own reasons.

UNIDENTIFIED MALE: I think it's better to go to a country, the African country that has maybe the same character like him. The leaders should have the same character like him.

UNIDENTIFIED FEMALE: The fact that he's -- he has some roots in Kenya doesn't mean that he's bound to do anything for Kenya.

MCKENZIE: Whatever the Obama administration's reasons for not coming to Kenya first, Kenyans are unlikely to bear a grudge against their favorite son. And should the U.S. president hit these shores, the party will surely just start up again.

David McKenzie, CNN, Nairobi, Kenya.

(END VIDEOTAPE)

VELSHI: McKenzie's right, we Kenyans are a forgiving bunch.

Don't miss "AC 360" Monday night, 10:00 Eastern, Anderson Cooper with President Obama in Africa. It's an historic trip. Exclusive access. You don't want to miss it.

Well, the nation's most prominent civil rights group gets ready for its 100th annual convention. We'll talk about some key issues facing African-American in a live issue with the NAACP's president.

(COMMERCIAL BREAK)

VELSHI: A sailor murdered at his guard post has been laid to rest in Houston. Seaman August Provost III was attacked last week at Camp Pendleton, near San Diego. He was shot multiple times. Then the gunman set a fire to destroy evidence.

The Navy has got a person of interest, another sailor in custody. The victim's family thinks this was a hate crime, that Provost was targeted because he was gay. The Navy says there is no evidence of that. Gay rights groups demanding a thorough investigation, however.

Near Chicago, they're finding more graves dug up at that historic African-American cemetery. Now they found Emmett Till's original casket at a garage at the cemetery. Till's death 50 years ago helped spark the civil rights movement. The sheriff says people are coming in droves to check on the remains of their loved ones.

(BEGIN VIDEO CLIP)

SHERIFF TOM DART, COOK COUNTY, ILLINOIS: With the over 2,000 families that we've had so far, we've had at least 30 or so cases already that have newly come to us, where another crime scene has been -- is obvious now, and it's apparent. People have gone to gravesites where the headstones are gone, people have gone to a gravesite where a different person is there now. People have gone to gravesites where it's clear that something has been removed.

(END VIDEO CLIP)

VELSHI: Four people, an office worker and three grave diggers, are accused of digging up the graves and disposing of the corpses so that the plots could be resold, and then they pocketed the money.

Another story we've been following, a private Philadelphia area swim club turns away dozens of African-American and Hispanic children. Was it simply because the pool was overcrowded, or was it outright racism rising to the surface? CNN brought you the story yesterday. And today we're hearing from the president of that swim club. As a matter of fact, he started talking to reporters just as our Susan Candiotti was on with us live last hour.

Susan, you turned around and put your mike right in his face. What did he have to say?

SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Actually, Ali, he even spoke with us at length for another 15 minutes before he began speaking with the other reporters. And this is the first time Mr. Duesler has broken his silence since this controversy broke in the main.

He said he wanted to make an effort to explain exactly what happened. In his words, "I'm deeply sorry for the unfortunate situation. I and we never intended to offend anyone."

Those were his words.

And then he went on to explain that, yes, there was an agreement. He did accept $1,900, roughly, from a daycare center to use the pool once a week for about an hour and a half. But he said in the end, the pool simply couldn't handle it.

Here is what he said in part.

(BEGIN VIDEO CLIP)

JOHN DUESLER, PRESIDENT, THE VALLEY CLUB: This thing has been blown out of proportion. In fact, because of the summer pools that were closed in Philadelphia, we invited these clubs to use our facility. But we severely underestimated the number of children and our capacity to handle these groups.

We were not prepared for it. And that's the only reason it was a safety issue. And that's the only reason that the children -- we felt it was not safe for them to be here.

We spoke with the board. We had a number of camps, actually, that were interested in the club that we did invite to our facilities.

And we have never done this before. This was the first time. We invited them. We reached out to them.

And it's terribly, terribly unfortunate that our facility is just not capable of handling the large number of kids, most of whom can not swim. They were packed into a very small section of the pool, the shallow section of our pool, and it's just really unfortunate. And we apologize.

CANDIOTTI: And Mrs. Duesler also added that ever since these stories began running in the local media here, as well as on national television, that she said their phones, they have had to take them off the hook, that they have been receiving, they said, threatening messages themselves. And she said that she was going to defend her husband from top to bottom.

VELSHI: Worthwhile, while Mr. Duesler continued to say he invited the clubs, they took $1,900 from this one particular club. It wasn't an invitation to come and swim for free. We had not heard the safety business before either.

You spoke to a little boy who overheard people making comments about having black children around. Somebody was uncomfortable with that.

CANDIOTTI: Yes. I asked him about that. And by the way, we did hear about safety issues before they were referenced in a written statement that was put out by the club yesterday.

But in direct response to the little boy and to racial comments that were allegedly made, Mr. Duesler said he personally, he says, did not hear any of those comments. And he says he doesn't know of any other club members that did.

However, he acknowledged that he doesn't say that they weren't made. And he said, "I apologize if they were." He and his wife both said, "We didn't raise our children that way, but if people make comments like that" -- and he said they do make comments like that -- "and unfortunately, we can't control it."

Ali.

VELSHI: Yes. Unfortunately, Susan, if this thing -- if they had been a little more forthcoming a little earlier, it wouldn't be on CNN to be sending you to do the investigation that you have had to do into this whole thing.

They were avoiding our questions. They did throw a CNN crew off and tell them they couldn't answer questions. And he didn't give a statement until today. I think it's important while he's giving those statements to remember that they were not all that forthcoming about it initially.

Susan, thank you very much for continuing to cover this story. There is still more to learn in this one in Philadelphia.

The NAACP is condemning the swim club's decision. The civil rights group's president, Benjamin Todd Jealous, says, "The NAACP deplores the recent incident of racial discrimination at the Valley Swim Club in Philadelphia in which a group of black day camp children were told to leave a pool because they changed the complexion and atmosphere of the facility."

Mr. Jealous joins me now as the group gets ready to hold its 100th annual convention in New York.

Mr. Jealous, thank you for being with us.

Before we go on too far down that road, I just want to tell our viewers, as Susan has done, we do not know yet -- we do not have evidence yet that this was racism. We have some people telling us they heard comments that sounded racist being made. The club officially saying that's not why it was done, it was overcrowding. They canceled an engagement with two other daycares as well, and those were white children.

So we don't have evidence that this was racism. What does it sound like to you?

BENJAMIN TODD JEALOUS, PRESIDENT AND CEO, NAACP: Well, the quote, that word...

VELSHI: Complexion.

JEALOUS: ... was used by them. And that's the important part. And that's part of what we're responding to.

They said, "This would change the complexion of our pool." It's also the fact that these kids showed up at the pool. And as a parent, it's just very hard to stand by and to hear about kids being mistreated and humiliated, and hearing people say things like, "We don't want those black kids at this pool."

And then to hear the pool, itself, come out and say that we asked them to leave because it would "... change the complexion of our pool," I mean, this is 2009. A black man can get on Air Force One, but our kids still have to worry about going to the pool. And that's just crazy.

VELSHI: Are you prepared to have -- we still haven't been able to make a determination. Could it be that this president just chose bad words?

JEALOUS: Well, you know, I think -- I think that that question should be given to a psychiatrist.

VELSHI: Right. All right.

Well, listen, you've got a lot of other things on your plate right now, the 100th anniversary of the NAACP. You've got a big convention coming up, and you're going to have some mighty important guests attending it.

JEALOUS: Yes. No, that's right. We're going to have Holder and Obama -- I'm sorry, this earpiece just fell out.

VELSHI: Sure.

JEALOUS: Holder and Obama. We'll have the first black governor of New York, Paterson. We'll have Chaka Khan and Patti LaBelle. I mean, it will be a great convention.

VELSHI: All right. So you've got all of these people who you were naming who hold remarkable positions of authority in the United States. We have black governors. We've got a black president. We've got an attorney general.

What do you say when people tell you that we might be living in a post-racial world? JEALOUS: Well, you know, we can't get post-racial until we are post- racism. I mean, that's just -- you know, people right now -- it is possible for a person to get through some of the big barriers in our society, but entire groups can't get through. You know, again, one candidate can get through, but then the kids can't get to the pool, or folks get stopped on the highway and profiled by the comps.

I mean, unfortunately, in this country, it's still harder for a black man with no criminal record to find a job than a white man who has one. I mean, that's what we are dealing with each day.

VELSHI: Well, let's talk about jobs. That is probably one of the most serious issues right now.

We have a growing unemployment rate, almost 10 percent in the country. For African-Americans, it is significantly higher than that. It's 50 percent higher for African-Americans. For African-American men, it's higher than that yet.

Ultimately, if you have to do things for the African-American community, one of them is going to have to be figuring out how the unemployment rate for African-Americans can be brought back into line with that of the national population.

JEALOUS: No, that's right. And at this moment, when we are putting hundreds of billions of dollars into this economy, it's not enough to just bail out Main Street. We also have to fix back street. These are taxpayers dollars, and we need to take care of some of the structural problems that keep some taxpayers from being able to access the great land of wealth that this country can be in ways that their neighbors really don't have to worry about.

VELSHI: Benjamin Jealous, good to talk to you. Not enough time, but we'll do it again.

Thank you very much for joining with us.

Benjamin Todd Jealous is the president and CEO of NAACP.

Well, helping kids one pound at a time. Our CNN Hero is in a heavyweight fight battling in her brother's memory.

(COMMERCIAL BREAK)

VELSHI: We're learning that Bob Dole has been in the hospital since last week. The former senator and presidential candidate is being treated at Washington's Walter Reed Army Medical Center for what's being described as a serious leg infection.

A statement from his office says the 85-year-old is recovering after surgery and hopes to be out of the hospital by his birthday, on July 22nd. Dole was initially hospitalized for a rapid heart beat. Doctors determined his heart was OK but found open sores on both of his legs.

(WEATHER REPORT) VELSHI: Americans have gotten fatter over the past year, unfortunately. A study by two advocacy groups shows that two-thirds of Americans are now either overweight or obese. Adult obesity rates now exceed 25 percent in 31 states. Perhaps most alarming, childhood obesity rates in the U.S. have more than tripled since 1980.

Well, eight of the 10 states with the highest rates of overweight children are in the South. This week's CNN Hero is attacking this epidemic in one of those states, right here in Georgia.

(BEGIN VIDEOTAPE)

ANNOUNCER: This is CNN Heroes.

MALIK, PARTICIPANT IN FITNESS AND NUTRITION PROGRAM: My life feels not that great. It was not easy to carry around this weight, so I wanted to get healthy and fit.

PAMELA GREEN-JACKSON, MEDICAL MARVEL: Where did we go wrong as a country where P.E. in schools is no longer a priority, or children's health is no longer a priority? Something had to be done, and I just decided to be the one to do it.

My name is Pamela Green-Jackson, and my organization is a physical fitness and nutrition education program for elementary and middle school youth in my community. My brother Bernard died at age 43 at the weight of 427 pounds. He didn't have to die, and so I promised myself that I would do whatever I could to make sure that another child didn't suffer like he did.

MALIK: You've got another 10 seconds.

GREEN-JACKSON: So, what we've done is converted vacant classrooms and turned them into health clubs.

This is a free program. We have personal trainers, dietitians that work with them. And we allow each individual child to set their own goals.

MALIK: Miss Pamela is my hero because she is always helping me to do things that I never thought I could do.

GREEN-JACKSON: We instill these habits in them early. Then they will grow up and become healthier adults. That's what it is all about, saving the lives of children.

(END VIDEOTAPE)

VELSHI: You can find out more about Pamela's work and you can nominate a hero of your own on our website, CNN.com/heroes. July is the last month to get your nominations in. If you know a hero, don't wait to tell us about them. Go to CNN.com/heroes right now.

She'll be on the hot seat come Monday. Supreme Court nominee, Sonya Sotomayor gets ready for her confirmation hearings. We will find out what she is likely to face as she appears before the Senate Judiciary Committee.

(COMMERCIAL BREAK)

VELSHI: We are following news out of Illinois with the gravesite developments. We've got political news out of Illinois, as well.

The Associated Press now reporting what we've been hearing around, and that is that Senator Roland Burris of Illinois is not going to seek re-election when his term comes to an end. That's what we are hearing from the Associated Press right now.

CNN is working to get more information on this, that Roland Burris deciding not to run for re-election when his term expires. We are also hearing that Roland Burris may be having a press conference at 3:00 p.m. Eastern. If that is the case, we will bring that to you here on CNN.

As I get more information on that, I'll bring that to you. Roland Burris of Illinois, quite possibly, a press conference at 3:00 p.m. But the Associated Press says he is not planning to run for re- election.

Now, for Judge Sotomayor, the practice sessions end, and the real thing begins three days from now. For weeks, President Obama's Supreme Court nominee has been prepping for her Senate court confirmation hearings, and on Monday, they'll get underway. What can she and what can you expect? Joining us from Washington, CNN deputy political director Paul Steinhauser.

Paul, we've got some good, fresh numbers on this. What are we seeing?

Yes, brand new polls, Ali, from CNN/Opinion Research Poll Corporation. This was a national survey. Right off the bat we asked, "Do you think the Senate should confirm Sotomayor?".

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Take a look at these numbers from our survey. Overall, 47 percent says yes. Forty said no. But look, we did a breakdown by party, Ali. Obviously, Democrats, almost seven out of ten, say she should be confirmed by the Senate.

Independents, Ali, you can tell they are split. And Republicans, only one in four are in favor of her being confirmed. Ali, look at that number in the lower right. Sixty-five percent of Republicans, according to our poll, say she should not be confirmed.

Our polling director, Keating Hollins (ph), said that number is higher than the number of Republicans who felt that Judge Ginsburg, Ruth Bader Ginsburg, should not be confirmed in the '90s. It's also higher than the number of Democrats who felt that Alito and Roberts should not have been confirmed four years ago.

VELSHI: Our polling broke it down a couple other ways, too. There was a question about her qualification versus her stand on issues.

STEINHAUSER: Let's go to that one. That's very interesting. Americans are pretty split here. If the senators feel that Sonya Sotomayor is qualified, well, the Americans are split on whether senators should vote against her because of her stand on the issues.

Now, that hasn't changed. Remember, back in the old days, the common fault was if a nominee was qualified, the issue shouldn't get in the way. But that's changed, obviously, this town has become a lot more partisan, Ali.

VELSHI: We are going to be watching to see how -- the interesting thing is how public opinion can have an impact on what the senators do next week. Am I right?

STEINHAUSER: Public opinion can definitely have an impact on that. It all starts on Monday. There are 19 senators on the committee. Twelve Democrats, 7 Republicans. And I think Republicans will have tough questions for her, probably on her stances on affirmative action and gun rights, Ali.

VELSHI: All right, Paul. Thanks very much. Our deputy political editor, Paul Steinhauser, ni Washington.

Let's talk about jobs. One of the biggest concerns in the economy right now as we consider a turnaround to this economy is jobs. Where are jobs available if you are looking for one or you are worried about yours? What can you do to prepare yourself for a turnaround in this economy?

Stephanie Elam joins us now from New York with more on that. Hi, Stephanie.

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Hi, Ali. If you take a look at the Bureau of Labor statistics data, it shows that education and health services are stars in this session. In May, which happens to be the most recent month that we can find data for, there were 537,000 openings in that field. 468,000 were hired.

That sounds like a lot, I know. It's a big number, but the Bureau says that's the lowest number of hires in this category since September of 2004. Though education is still a standout overall, teachers are being let go as the recession drags on. That's because states and districts are being hurt by a loss of revenue. So, they are cutting where they can.

Meanwhile, professional and business sources came in second with 525,000 openings. So, there were 795,000 separations in the month. So that's a net loss. Just to explain, separations, that's a term that really refers to people that have been laid off, people who have been fired and those that quit their jobs. Same story that you will find in trade, transportation and utilities...

VELSHI: Here is the issue, Stephanie. When one is considering what to do at the end of this recession or as things turn around, there are some things that are gone and they are gone for other reasons, like manufacturing jobs, whereas right now, there might be teachers being laid off or nurses being laid off in some parts of the country. But long-term, these look like growth areas. ELAM: Long-term, this is one of the better sectors out there. If you listen to what teachers are saying, especially those that were laid off, they will tell you, "When I went into this profession, I was saying, 'This is my dream job,' and I would get in it and I'd be there and be safe." Now, you are hearing it is not the case. A lot of school districts trying to find different ways to make cuts. At the end of the day, they are trying to do it without losing jobs, but they may have to eventually do that...

VELSHI: I hate to make that comparison. But 15 years ago, that's what autoworkers would have said, too, right? "I have got a job and I can keep it forever."

ELAM: One would hope that there would be a little bit more security with educators. But it is not ever guaranteed, for sure.

VELSHI: Listen, we have had a lot of mixed -- you've followed this -- we both followed this closely. The jobs picture has been mixed in the last few weeks. It's not been obvious which way it's going.

ELAM: Yes, that is true. And if you take a look at yesterday's reports, our jobless claims falling to the lowest level since the beginning of the year, down 52,000 to 565,000. Weekly claims do tend to be volatile during this time of year, because you have auto shutdown and closures at other manufacturers as well.

But take a look at that continuing claim number, and you can see, it's still a lot of pain out there. You have a record 6.9 million people who are still out of a job since the start of the recession. We are talking about 6.5 million people losing their jobs.

So, huge numbers but, you know, what's really interesting. If you take a look at the unemployment number, right now, it's at a whopping 9.5 percent. But in ways, that number is kind of misleading because it doesn't talk about the people who are underemployed...

VELSHI: Underemployed, or those who have fallen off.

ELAM: And they are not looking for a job at all. So the Bureau of Labor Statistics says that number could be as high as 16.5 percent. Really rough time out there.

VELSHI: Stephanie, good to see you. Thanks very much.

ELAM: Good to see you, Ali.

VELSHI: Stephanie Elam at the New York Stock Exchange.

General Motors, another big story out there. It has less debt. It's actually got less of everything, including a workforce. The automaker has emerged from bankruptcy. Where is it heading now?

(COMMERCIAL BREAK)

VELSHI: General Motors is officially reborn today. It's not 61 percent government owned. The troubled automaker is leaner after exiting bankruptcy in just six weeks. Can GM really reinvent itself?

CNNmoney.com's Poppy Harlow just spoke with the CEO, Fritz Henderson. She joins me now from New York. What do you know?

POPPY HARLOW, CNNMONEY.COM: Ali, I mean, yes. The bankruptcy process, they may be a new company out of bankruptcy, but this is really the beginning of the work for this company. A daunting task ahead for Fritz Henderson.

What is going to matter to you folks is that this company is going to be a lot smaller. They tell us they're going to be a lot more efficient, and they are going to produce the cars that you want to buy more so than you do right now. What we are going to see, Ali, is a number of dealerships closed - thousands -- 16 factories, 20,000 more people at GM will lose their job.

But what this really gets to the crux of it. How does the company change? Because bankruptcy is a financial thing, it is complicated, it's financial, it really gives GM a clean slate and wipes away most of their debt.

However, what they also get is a new chance to emerge as a company with a new culture. But bankruptcy doesn't really change your culture. So I asked Fritz Henderson that exact question. How can you ensure the U.S. taxpayer, who owns 61 percent of this company? Does the culture that led you into this bankruptcy is really going to change? Here is how we answered that, Ali.

(BEGIN VIDEO CLIP)

FRITZ HENDERSON, CEO, GENERAL MOTORS: I have always been a believer that culture is about how you act and perform and where you spend your time. Where we are going to be spending our time as a leadership team, from me on down, is great cars, customers being singly focused and making sure we have a culture which is faster, leaner, and has accountability embedded in it. It is all about winning. That's where as the president of the company, I am going to be spending my time.

(END VIDEO CLIP)

VELSHI: You know, Poppy, GM got it wrong a lot of the time. I worry about what Fritz Henderson said about the culture of winning. This is a company that for many years was all about being number one for many, many years. Is that going to be the GM that we see going forward?

HARLOW: You know, it's interesting. I asked him, how important -- you are no longer number one in the world. Toyota took that title from you last year. How important is it that you hold off Ford and Toyota in the U.S. and you remain the number one selling automaker?

He said it is not really about that number one spot, Poppy. It is about profitability -- he wanted to make cars that make big profit margins -- and getting people excited about your brand, coming in and buying the cars.

They have sold well on some of the new vehicles, Ali, but a lot of people look at GM vehicles and they have a perception. And some people won't even look at them. Take a listen to what he said about why it doesn't matter to be the number one spot anymore.

(BEGIN VIDEO CLIP)

HENDERSON: We do sell close to one in every five vehicles in the U.S. market. We are very grateful for that. Second, we have a chance, actually, with the products we have to go back out to the four out of five that were considering our products in the future to try to get them to reconsider our products.

I do thing that we can be very strong in the U.S. market. I measure performance. I measure success in terms of are we profitable, do we create value for shareholders? We do that through great products, great marketing and sales and revenue. I think certainly we anticipate we are number one. We have been for some time. Actually, just fixating yourself on being number one in the market is not the key.

(END VIDEO CLIP)

HARLOW: All right, Ali. And just quickly here. He did say - well, I said, "You need more taxpayer money?" You know, they've got fifty billion. He said no. Definitively no, Ali.

VELSHI: All right. They have some great cars out there. The Corvette is beautiful, the Escalade. Bob Lutz did a great job of making Cadillac an important name. Their Silverado truck is fantastic. The Malibu won Car of the Year. It competes against cars out there that are like it.

Do you get the impression that they have the culture to lead them to success again like Ford has been able to change its culture and way of thinking?

HARLOW: Right. Alan Mulally has been able to do that in Ford. They didn't have to take taxpayer money. I really do, Ali. I was in Detroit a week ago with Fritz Henderson. He was showing off a bunch of the new Buick crossovers. He seems to love these cars.

But what convinces me that they're pushing ahead is how quickly this leader moves. He makes decisions based with 80 percent of the information. He said, "I don't need 100 percent. Give me 80 percent of what I need to know, I will make a decision and move forward."

They are proving that. They are cutting back the top executives by 35 percent, Ali. They are doing what the government is doing with regulatory bodies. They are doing what we are seeing across a lot of sectors. They are cutting away the fat and really focusing and they want to move fast. We will see if they can do it. We'll see if people want their cars. That's the big question, Ali.

VELSHI: Poppy, great to talk to you. Great work on all the stuff you've done in Detroit. Go to money.com and check out what Poppy has done. They're some fantastic stories. Poppy, stick around and watch this one. You have a great team there at money.com, but you might need some team building. In fact, General Motors might think about this. We have found one of the most unusual team building ideas out there. Potentially, one of the most unpleasant. It's called Naked Friday. Need I say more? Stick around.

(COMMERCIAL BREAK)

VELSHI: 2:51 -- 2:52 p.m. Eastern time. That means it's naked time here on CNN. Wake up. In case you were dozing off, naked time is a great idea if you work at a modeling agency. Otherwise, I don't know. A British company, trying to boost morale, decided that nudity was the way to go.

Enter Naked Friday. When employees did business in the buff. Of course, the whole "clothing optional" thing was actually optional. Surprisingly, though, pretty much everybody dropped true. We don't actually have any pictures of the dropped trough -- I'm sorry. I don't do a lot of naked -- stuff. So, it's all foreign to me.

Any pictures? We don't have pictures. It's probably better that way.

Sanchez. Team Sanchez likes to do things differently, unlike the rest of us, who work out in a big newsroom, Sanchez has his own room. So, your team could be having naked time all they want, if you wanted.

RICK SANCHEZ, CNN ANCHOR: I suppose. I think the thing that I -- look at this, my son is calling me in the middle of a darn thing. Issues at home. Anyway, listen, first of all, I'm somewhat perplexed that you gave that whole story and probably said naked 52 times and never once showed a picture of anything...

VELSHI: I didn't show a picture of anything or anybody naked.

SANCHEZ: It is like, where is he going with this?

VELSHI: I can try and spice it up for you now, if you would like.

SANCHEZ: Shut up. It's Friday and you are being a little nutty, so it's OK. Oh, you are going to do that. You're going to do that.

VELSHI: Take your best shot. (ph)

SANCHEZ: You know what you just did? You just threw your microphone away.

VELSHI: I'm new to this.

SANCHEZ: Ali Velshi, ladies and gentlemen. Ba-dum-bum.

Let me tell you a couple things we are going to be doing. Speaking of things that sometimes can be a little -- crazy, Chicago politics.

VELSHI: Yes. SANCHEZ: Let's do that. Roland Burris is about to speak, about to hold a news conference. We think what he is going to say is, Ali, that he is not going to be able to run again. There may be a couple of reasons for that. Some of which we have kind of drilled down on.

Nonetheless, when Roland Burris speaks and holds a live news conference, one never knows what's going to happen. So we are going to go to that live and let you see it for yourself to see what this Chicago politics extravaganza is all about.

Moving out West toward Nevada, this scandalous situation with Senator John Ensign. There are new details that now involve his parents, another congressman -- pardon me, another senator -- this one from Oklahoma, and the possibility that there could be some criminality in this.

We are talking to the one guy who has probably gotten the most information on this story of anybody else. He works for the "Las Vegas Sun." He recently did an interview, which you will see on my show, with the husband of John Ensign's mistress. There you have it.

VELSHI: That continues to be a fascinating story. We will stay tuned for that. I will give our viewers a little more on that story right now to whet your appetite for what Rick's got.

Ninety-six thousand dollars for your son's mistress. That's what the parents of Nevada senator John Ensign paid. They say it was just a gift, but the woman's husband, well, she thinks there is more to it.

(COMMERCIAL BREAK)

VELSHI: Allegations of a cover up being made against Nevada senator John Ensign. He admitted to an affair last month with a staffer. Now, that woman's husband is saying he was paid off.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: He paid severance to your wife out of his own pocket?

DOUG HAMPTON, WIFE HAD AFFAIR WITH ENSIGN: To my knowledge, that's correct.

UNIDENTIFIED MALE: And how much?

HAMPTON: That I don't know.

UINDENTIFIED MALE: You would know. She's your wife. Was it more than $25,000?

HAMPTON: Absolutely.

UNIDENTIFIED MALE: A lot more?

HAMPTON: Yes.

(END VIDEO CLIP)

VELSHI: Ensign denies any wrongdoing, but he acknowledges his parents sent nearly $100,000 to Doug Hampton, his wife, Cindy, and their two children. He says those payments were made out of concern for longtime friends during a difficult time.

New calls for South Carolina governor Mark Sanford to resign. A few dozen people gathered at the State House yesterday, taking part in a so-called "resign or impeach" citizen's rally. It came two weeks after Sanford returned to work after disappearing for six days. The governor revealed he was on a rendevous with his mistress in Argentina at the time. The protesters say that while the affair is a private matter, the governor should resign for abandoning the state without passing authority to the lieutenant government.

That's it for me. Thanks for having me here for the last few weeks. Let's take it over to Rick Sanchez. He's got your "National Coversation" starting right now.