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Europe Trying to Emerge From Volcanic Cloud; Goldman Sachs Makes $3.5 Billion Profit; Civil Rights Pioneer Dorothy Height Dies
Aired April 20, 2010 - 11:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
T.J. HOLMES, CNN ANCHOR: We will continue here in the CNN NEWSROOM and tell you about the big stories we are keeping an eye on for this Tuesday, April 20th.
(BEGIN VIDEO CLIP)
GARY TUCHMAN, CNN NATIONAL CORRESPONDENT: It's literally raining ash. The ash is going into my eyes, it's on the streets.
(END VIDEO CLIP)
HOLMES: Our correspondents there braving the elements and reporting on the fallout, literal fallout, from Iceland's trouble- making volcano.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: This airport lounge has been the home for all of these people for four days now, and they're hoping it won't be for much longer.
(END VIDEO CLIP)
HOLMES: They're hoping, but we don't have all good news for you this hour. We have got some limited flights that are resuming in Europe. That's great news, but there are some shifting winds that could cause some issues as well. We'll explain.
Plus this --
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Hey, hold on a second! Hold on a second!
We are going to do that. So, what the young man was talking about is we need to repeal Don't Ask, Don't Tell, which I agree with and which we have begun to do.
(END VIDEO CLIP)
HOLMES: The president's not necessarily comfortable at some moments up there. A flash of anger from an unusually cool president as he was heckled, heckled over his commitment to ending the military's Don't Ask, Don't Tell policy. We'll show you more of that exchange he had with the crowd out in California.
But good morning to you all. I'm T.J. Holmes, sitting in for my good friend, Tony Harris.
Those stories and your comments right now, here in the CNN NEWSROOM.
First up, Europe trying to emerge from a volcanic cloud. You see it there. You've been seeing these pictures for the past several days. Now there are concerns about a new plume of ash that's up there. It's spewing from that disruptive volcano in Iceland.
European aviation officials now hoping to get about half of the scheduled flights off the ground. That's something, at least.
Our Paula Newton is at London's Heathrow, which is normally Europe's busiest airport.
Hello to you again. A few flights possibly taking off, Paula?
PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Absolutely, in Europe. We had to take that good news, T.J., and that's some major airports in both France and Germany have opened up, in the Netherlands. That is all helpful. It's going to start to ease some of the backlog.
The problem, behind me, Heathrow Airport. I won't say that you could hear a pin drop, but almost, T.J.
What's going on, two factors, really, here in Britain. That stubborn ash cloud remains above us at about 20,000 feet. Secondly, the weather, those winds, the northeasterly prevailing winds, continue in this weather pattern. And that means that planes here in Britain remain grounded for the foreseeable future, except for Scotland, which is also a bright side. What the airlines are trying to do now is figure out any kind of opening that they have to get these planes on the ground and landed, and then get them up again and taking stranded passengers home -- T.J.
HOLMES: Well, that's something. I mean, we know a lot of people -- are they looking for and being creative still? What are their other options for some of these passengers who are among literally millions around the country -- excuse me, around the world -- being affected?
NEWTON: I think, look, where people see consistent pockets that are open. And if the next 24 hours that turns out to be Amsterdam, Paris, Frankfurt, people are encouraged to give that a try, except those that have run out of money, clearly have run out of medicine. All those people being told, really, to seek to their governments for help, to seek out the airlines and see what they can do.
But we're almost at a week here, T.J. And people are really indecisive. They don't know, should I stay put or should I try to and across the continent and get to somewhere where the skies are actually open? It's an agonizing decision, and a lot of people, I can tell you -- I spoke to some of them this morning -- are starting to get quite desperate.
HOLMES: That's a good point you make there. You're trying to wonder, well, should I just wait it out should I just go another route?
Paula Newton, we appreciate you, as always. We'll be checking in again throughout the day.
And we are hearing about your volcano travel problems out there, by the way, of iReports you've been sending us.
David Fullard is one of them. He was traveling from Australia to the U.K. But why is he in Dubai?
(BEGIN VIDEO CLIP)
DAVID FULLARD, IREPORTER: When they told us this was canceled, people all over the airports were going mad. There were kids screaming because they wanted to go home, and parents telling them that they couldn't. People were really outraged. The airline had put us up in a hotel overnight until the volcano stops spewing ash all over the U.K., but we don't know how long that's going to be for.
(END VIDEO CLIP)
HOLMES: Well, check out this group of ladies from England. They traveled to Texas. They're going to show the Texans how to put on a proper tea down there.
They were doing this for a church group, and now their flights home have been delayed because of the volcano. So they had some time on their hands to, of course, have the tea, but also to send us some iReports. This is out of Fort Worth at Trinity Episcopal Church.
Well, other big stories we are keeping an eye on today.
Toyota followed by the word "recall." You've been hearing that a lot over the past weeks and months. Well, here's another for you.
They're recalling the 2010 Lexus GX 460. Technicians will upgrade the SUV's stability control software. A week ago today, it was "Consumer Reports" that rated the GX 460 a rare don't buy. Its test, which are now confirmed by Toyota, show the SUV could tip over in certain situations.
Well, a sweeping immigration bill is now on the governor's desk in Arizona. She is expected to sign it.
The legislature gave final approval Monday for this. The bill requires police to stop anyone they suspect is in the country illegally and check for documentation. Critics calling it mandatory racial profiling.
(BEGIN VIDEO CLIP)
AL MELVIN (R), ARIZONA STATE SENATE: Our number one obligation is government. It's not the education or the health or other aspects of our daily lives, but it's the protection of life, liberty and property.
LEAH LANDRUM-TAYLOR (D), ARIZONA STATE SENATE: You will have neighbors perhaps turning against neighbors, friends against friends, maybe even family against family.
(END VIDEO CLIP)
HOLMES: Well, Tony Harris, he was talking to both sides in this Arizona immigration debate. You can see that debate on the blog, on CNN's blog. Go to CNN.com/newsroom, and you can watch that interview. Then have your say, let us know what you think about Arizona's tough new standard when it comes to illegal immigration.
Well, Senate Democrats plan to start debate this week on new financial reforms, but Republicans are against the current plan, arguing it will lead to more bank bailouts. Democrats say the legislation will correct problems that led to the country's financial meltdown. The chief economist on the president's Economic Advisory Board says it will help prevent future bailouts.
(BEGIN VIDEO CLIP)
AUSTAN GOOLSBEE, CHIEF ECONOMIST, ECONOMIC ADVISORY BOARD: What this bill does is bring derivatives out into the open so that they're transparent and there will be oversight; separate through the Volcker rule some of the speculative investment that banks are doing for their own accounts; and put in place a system that we can "resolve these financial institutions," which means either liquidate them or break them into pieces and sell them off, firing the management and wiping out the shareholders. That's not a bailout. This bill is about giving the government the tools so that there don't ever have to be any more bailouts.
(END VIDEO CLIP)
HOLMES: Goldman Sachs getting grilled by analysts over fraud charges. The SEC accuses Goldman of misleading investors about that complex mortgage-backed securities scheme that were expected to fail. In a conference call with analysts today, Goldman executives denied misleading anybody and vowed again to fight the charges that are now coming at it from the SEC.
At the same time, Goldman Sachs released first-quarter earnings today.
Let me bring in Stephanie Elam, my dear friend.
Goldman Sachs had been in the news with these SEC charges, this fraud allegation here, and that sounded terrible. But, boy, it sounds like they got good news in this profit report. STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: And it couldn't have come at a better time for them, T.J., because they need some good pub at this point. And it's a lot of money that they made here. In fact, Goldman's second most profitable quarter since going public back in 1999.
But we did have an idea that this was coming. This was not all of a shock.
In the past week, three other financial firms reported earnings of similar size. You heard from Citigroup, you heard from JPMorgan, we heard from Bank of America as well. All of them putting in some really strong numbers. Take a look at that screen there.
Now, like them, Goldman made out because of more trading activity. And that is Goldman's bread and butter.
Think about stocks, think about bonds, and think about what the market has been doing. So the economic recovery really helping them out here. Last year was a very tough comparison, so that was a bad year, so it makes it easier for this period.
Now, Wall Street is still worried about those SEC charges, so Goldman shares under pressure today. They're off about 1.5 percent right now.
Overall, the Dow has been doing a little flat-line dancing here, a little soft shoe. But the Dow up right now 24 points, 11,116. NASDAQ, better by 11, at 2,491. So we're in the green for now -- T.J.
HOLMES: All right. Not familiar with that dance you were talking about, but I get the idea.
But on the Goldman front, the SEC charges they're facing, does this kind of put everybody else on notice that the SEC might be coming after you?
ELAM: That is exactly the fear on Wall Street, is that if they're looking this deep to find anything, are they going to go after other financial firms? And that's why we saw financial stocks really plunging on Friday, and that's what brought the markets down on Friday, when the SEC charged Goldman Sachs with this fraud.
But putting together a case against such companies is really hard to do, and that's because Wall Street firms are complex. They have these complex products that they offer.
And another problem, the government bears the burden of proving that fund managers intentionally -- intentionally misled shareholders. That's another very difficult task.
There was a case against former Bear Stearns hedge fund managers. It was a sole criminal case that came out of the credit crisis, but the fund managers were found not guilty because they argued that they had no way of knowing where the subprime mortgage market was heading. So it was a completely complex process, and that's why we haven't seen many cases against these Wall Street firms.
As for the markets doing the flat-line dance, you do know a little bit about soft shoe. I've seen it.
HOLMES: OK. I didn't even know what I was doing.
All right then. Stephanie, always good to see you, dear lady. We'll check in with you again.
ELAM: You too.
HOLMES: Well, we're going to be remembering the civil rights leader Dorothy Height, described by President Obama as a hero once serving as the only woman at the highest levels of the civil rights movement, if you want to stick around as we look back.
Also, Rob Marciano in the Severe Weather Center, which is also the severe volcanic ash center as of late. He's keeping an eye on things. We're going to check in with him here in just a moment.
Stay with us.
(COMMERCIAL BREAK)
HOLMES: Civil rights pioneer Dorothy Height has died at the age of 98. She was called the godmother of the women's movement. And our Joe Johns now looks back at the words and work of this iconic figure.
(BEGIN VIDEOTAPE)
UNIDENTIFIED MALE: Dr. Dorothy L. Height.
JOE JOHNS, CNN CORRESPONDENT (voice-over): At the funeral of Coretta Scott King in 2006, presidents stood to honor Dorothy Height. And at the age of 93, as she celebrated the life of Mrs. King, she might have been talking about her own.
DOROTHY HEIGHT, CIVIL RIGHTS PIONEER: There are some people who live their lives not just for themselves alone, but for others.
JOHNS: And she had a message for the generations that followed the pioneers of the civil rights movement.
HEIGHT: Many times when people are going through open doors now, I wish that they could hear the stories of how those doors got opened.
JOHNS: Dorothy Height opened doors for thousands. For four decades, she was president of the National Council of Negro Women. She helped organize Freedom Schools in Mississippi at the height of the battle over segregation in the South, bringing women of different races and backgrounds together for what became known as "Wednesdays in Mississippi."
She knew and worked with figures such as Rosa Parks, whose defiance sparked the Montgomery bus boycott. HEIGHT: It was as if she could hear a soft voice saying to her, "Rosa Parks, you're a child of God. You can make a difference." I think she would want to say that there's a lot of work for us to do to make freedom and equality a reality, and that each of us can make a difference.
JOHNS: She was close to Dr. King and fond of quoting him.
HEIGHT: Dr. King always said the black man needs the white man to free him of his fear, and the white man needs the black man to free him of his guilt. We need each other.
JOHNS: Dorothy Height was awarded both the Presidential Medal of Freedom and a Congressional Gold Medal for her public service in one of America's most turbulent eras.
Joe Johns, CNN, Washington.
(END VIDEOTAPE)
(COMMERCIAL BREAK)
HOLMES: A British Royal Navy ship is on a rescue mission of sorts. The vessel arrived in northern Spain today to pick up 500 British troops returning from Afghanistan and also 300 vacationing civilians. They had been stranded for days after that volcanic ash from Iceland shut down airports.
And that ash is affecting the evacuation of U.S. troops wounded in Afghanistan. The disruption of European air traffic means some of the wounded are being taken to Iraq instead of Germany.
Our Pentagon correspondent, Barbara Starr, joins us with these details.
And Barbara, that's something to hear, that guys wounded in Afghanistan, yes, you're on your way to Iraq.
BARBARA STARR, CNN PENTAGON CORRESPONDENT: It really is, T.J.
You know, for families, for the wounded, they get wounded in the war in Afghanistan, they think they're on their way home for medical care. But think again.
First, you're going to make a little stop in the other war zone. What we now know, what we have been told today, is that U.S. troops wounded in Afghanistan are actually being taken to a military hospital in Iraq.
Let's look at the map. They're picking them up in Afghanistan and taking them to Balad, Iraq, which is north of Baghdad, for intermediate medical care to get them stabilized, then flying the southerly route across Spain, finally home to the United States.
Why are they going to Iraq? Well, we got a briefing about that today. Here are some of the key reasons for this very crucial change. (BEGIN VIDEO CLIP)
BRIG. GEN. STEVEN KWAST, COMMANDER, 455TH AIR EXPEDITIONARY WING: It is not about the amount of care, it's about the capacity and it's about making sure that we triage, if you will, that we make sure that we have capacity for the unexpected events of a battle space like this. We have to be prepared at a moment's notice for something like a (INAUDIBLE), or a devastating attack by the enemy. To have that capacity ready at our hands means we have to move those wounded soldiers, and we have to move them in a way that allows us that capacity to be prepared for the unexpected.
(END VIDEO CLIP)
STARR: So, basically, T.J., they've got to get them out of Afghanistan as fast as they can. They can't have them stacking up in the hospitals there. But they can't send them on to Germany. So the only place they can send them for this critical stabilization care, essentially, is to the U.S. military hospital in the other war zone, in Iraq.
So that's the outgoing flow out of the war zone. The volcano is still having an impact on those coming into the war zone.
The military confirming some number of troops delayed getting into the Afghan theater. Some cargo, some supplies also delayed. Just like everybody else, the military coping as best they can -- T.J.
HOLMES: Yes. They're making the adjustments they need to make as well.
All right. Barbara Starr, thank you so much, as always.
Well, still on the subject of that ash cloud, it's dark, dirty, it's dismal. We're going to take you inside the volcano zone where all you see for miles is ash.
(COMMERCIAL BREAK)
HOLMES: Some of the stories making headlines this hour.
Airlines resume limited flights in and out of northern Europe today, but shifting winds could bring new concentrations of ash over Europe, ,forcing controllers to shut air corridors possibly again.
After six days, some stranded flyers are running out of patience, of course, but also, they're running out of money.
(BEGIN VIDEO CLIP)
CHERISE GOULD, STRANDED TRAVELER: We can't afford anything, and I'm going to start crying. Sorry. It's thanks to generous people in America that have helped us.
(END VIDEO CLIP) HOLMES: Also, on Capitol Hill right now, a House committee dissecting the collapse of Lehman Brothers. And listen to this lineup of people that are going to be testifying there -- the treasury secretary, also the Fed chairman. Then later, Lehman's former CEO will be testifying. In a prepared statement, Richard Fuld blasts a court-appointed examiner's report on the collapse as a distortion.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Main gear touchdown. Pilot Jim Dutton (ph) now deploying the drag chute.
(END VIDEO CLIP)
HOLMES: And that's Space Shuttle Discovery returning to Earth. This happened just a couple of hours ago. A flawless landing in Florida after a 15-day re-supply mission to the space station. Three flights remain. Only three shuttle flights remain on NASA's schedule before they retire the shuttle program.
(COMMERCIAL BREAK)
(WEATHER REPORT)
HOLMES: Well, stay with us. Gay rights activists showing some impatience with President Obama.
You're in the CNN NEWSROOM. Stay here.
(COMMERCIAL BREAK)
HOLMES: Well, planes are flying once again over northern Europe, even though there's still that volcanic ash cloud in the air. The European Air Traffic Agency expects, rather, more than half of the flights scheduled for today to go ahead, but not out of London necessarily. Scientists say the winds are pulling the ash cloud that was drifting over the North Sea back over Britain now.
As for that volcano, it's still erupting right now actually, and our Gary Tuchman is right there. He's going to take you, now, inside the volcano zone.
(BEGIN VIDEOTAPE)
GARY TUCHMAN, CNN CORRESPONDENT (voice-over): At the base of the Iceland volcano, the day is cold and very clear. But up the road a short distance, what looks like a big gray curtain, that very quickly closes on us.
There is nothing gradual about it. Visibility drops to near zero as we drive through the volcano's giant ash plume. The view out the side window looks like something we might see from a window of a submarine. You could see virtually nothing.
(on camera): Only 10 minutes away from here, it's sunny. There are almost no clouds in the sky. But now it feels like nighttime. It's literally raining ash. The ash is going into my eyes. It's on the streets.
We are south of the volcano, this is the way the wind is blowing. And the western part of Iceland, Reykjavik, the capital, where most of the people live, life is completely normal. The winds haven't headed west. But south of volcano, east of the volcano, the farm owners, the landowners, the people who live here who are suffering. The properties are getting destroyed because of these ash storms, and we don't know yet how bad the health effects are.
(voice-over): We asked the helicopter pilot -- a very good one at that -- to get as close to the volcano as he dared. He took us within several hundred feet. It looked like an out of control fireworks show with bottle rockets going haywire. Shooting what looked like rocks, but were actually boulders out of the crater. The steam kept changing colors and shapes, towering thousands of feet in the air.
I asked the pilot his first impression.
PILOT: This looks like the gates of hell.
TUCHMAN: And this is what happens after the ash lands. Olafur Eggertson is a farmer who is now dealing with a 2,500-acre farm consumed by ash that has turned into muck and mud.
He tells us, "This has been in my family for three generations, me, my father, my grandfather. That's why it hurts so much."
His family has owned the farm near the volcano for 104 years, but the volcano had been quiet for about 190 years.
"Why would this happen to such a beautiful place? What are we being punished for?"
Our visit with Olafur was on Sunday. We thought we would see how he was doing on Monday, but the visibility made it difficult to find his farm because for the second time in three days it was getting pummeled by ash from the eruption up above.
Gary Tuchman, CNN, Kosvalur (ph), Iceland.
(END VIDEOTAPE)
HOLMES: And all that ash has forced airlines to ground about 100,000 flights since Thursday, and that has left an estimated 7 million international passengers either scrambling to find other means of transportation or waiting for the skies to clear.
Our Diana Magnay is in Amsterdam.
(BEGIN VIDEOTAPE)
DIANE MAGNAY, CNN INTERNATIONAL CORRESPONDENT (voice-over): It feels like a field hospital right in the middle of Amsterdam's Schipol Airport. Fourteen hundred transit passengers stuck behind passport control. (on camera): How have the last few days been for you?
UNIDENTIFIED FEMALE: The first two days we were very upset. We have -- and we haven't had any food, any bath. We sleep on the lounge on a chair.
MAGNAY (voice-over): That's changed now, though, there are camp beds with blankets, showers and movies. Plus, something to bring a smile to people who haven't had much to smile about.
(on camera): This airport lounge has been the home for all of these people for four days now and they're hoping it won't be for much longer. But the funny thing is that actually they can leave, it's just that most of the people here have chosen not to.
(voice-over): Temporary visas for the visa-less are possible, say airport authorities.
AD RUTTEN, COO, SCHIPOL GROUP: Our immigration officers have told that they will been very cooperative in issuing time-limited visa for those people.
MAGNAY: Many say they don't want to chance it though, in case the planes start flying suddenly.
UNIDENTIFIED MALE: When I go outside, I am worried about I can't fly. I can't -- I am waiting for the news.
MAGNAY: News that's beginning to turn in their favor. First, three long distance flights flying out on Monday evening. And then there are some who don't want to leave.
UNIDENTIFIED FEMALE: Forever I'm going to stay here. I love them, I'm going to miss them.
MAGNAY: Diana Magnay, CNN, Amsterdam.
(END VIDEOTAPE)
HOLMES: Well, even if you haven't been affected by this ash cloud, this might have you thinking right now about travel insurance. A lot of people are now taking a second look at that. Is that right for you? We'll have a few tips on what to buy and when to buy it.
Stay here.
(COMMERCIAL BREAK)
HOLMES: Some of the stories making headlines this hour.
Air travel to and from Europe still reeling from that erupting volcano in Iceland. A lot of stories around the world really about people who are stuck, people stranded. And one of those stories is of ten Rhode Island high school students who are trying to wait for those skies to clear. They had a trip to Paris this Thursday that is on hold for now. (BEGIN VIDEO CLIP)
ELLE BARNE, STRANDED STUDENT: I didn't really think anything of it because I was, like, no, we're definitely going on this trip, it's going to happen. But now that I'm hearing more about it, I'm kind of worried.
(END VIDEO CLIP)
HOLMES: So will they get their money back? Are the tickets refundable? Well, they didn't buy travel insurance so they could lose the money they spent on their travel plans. It was about $2,000 each.
Turning to Arizona now where there are protests over a bill that was passed by state lawmakers that requires police officers to determine whether a person is in the U.S. illegally. The ACLU says this promotes racial profiling. The bill is expected to be signed by the governor.
We want to know what you think about this tough new measure. Go to CNN.com/newsroom.
And the woman called "The Godmother of the Civil Rights Movement" has died. Dorothy Height died in a Washington hospital of natural causes. During the civil rights era, she marched alongside such pioneers as Dr. Martin Luther King Jr. She led the National Council of Negro Women for 40 years. Dorothy Height dead at the age of 98.
(COMMERCIAL BREAK)
HOLMES: Well, we're used to weather disrupting your travel plans, but who would have thought that an ash cloud would disrupt so many travelers across the world? Ines Ferre here with how you can protect yourself from such an event.
Ines, we all, when we book a flight or travel, we hear about the travel insurance, a lot of us just skip right over it and think we'll be OK. But in this case, this probably helped a lot of folks out who did get it.
INES FERRE, CNN CORRESPONDENT: Actually, T.J., it has helped folks out who bought the travel insurance for Europe before April 13th. They were able to get non-refundable costs reimbursed, and depending on the policy they can get $150 to $250 a day for meals and accommodations. Now, generally policies will cover these costs up to five days.
Now if you do have a trip scheduled to the affected area soon, though, and you don't have insurance, you won't be able to get it now because policies don't cover events that are either in progress or have already happened.
Also travel insurance is not cheap. It's generally 4 percent to 8 percent of the cost of your trip, T.J.
HOLMES: But I guess it certainly can be worth it sometimes. So who can or who should and who shouldn't? What type of trips are you talking about?
FERRE: You'll want to think about buying it if you made down payments in advance to a cruise line or tour operator and there would be a large penalty for cancelling.
And if you're on Medicare and you're going overseas, you may want to think about getting extra medical insurance coverage. Also, Medicare doesn't cover medical expenses abroad.
Also, travel insurance is a good idea if you're going to a developing country or you're booking an adventure vacation where the chance of getting sick or injury are greater.
But it's probably not in your best interest to buy travel insurance if you can cancel your plans without penalty. And remember, you may have some automatic protections when you're traveling. For example, many homeowner's policies provide coverage for theft or other losses away from home and your medical and auto insurance may be valid in other countries, too, T.J.
HOLMES: Oh, well, a lot of us are novices at this. A lot of people don't have a lot of experience in buying a trip insurance. So what should we be looking for? Do you shop around?
FERRE: Yes. Here are some of the things that you should know before you sign up.
Shop around, definitely ask check out sites like insuremytrip.com, quotewright.com, and squaremouth.com. These sites will let you compare prices and policies and you don't have to buy from the travel agent or cruise line operator.
Also, if you're going to buy it, do it within seven to 21 days of booking your trip to get the most out of your coverage. After 21 days, you won't be able to get protection if the airline or tour operator goes bankrupt so you'll want to check that out.
HOLMES: So there's a lot to keep in mind there. But man, I'll bet some folks who did buy that insurance are happy right now.
FERRE: Are happy, they're glad they did.
HOLMES: All right, Ines Ferre, thanks as always. We'll see you again here in a few minutes, I do believe. Thanks so much.
Well, gay rights supporters vent their anger at the president and he vents back a bit.
(COMMERCIAL BREAK)
HOLMES: There's been a lot of talk, a lot of debate, a lot of anger out there about government here in the U.S. being a little too intrusive. You don't like government tinkering with anything in your life a lot of times, including your health care. Well, consider this, at least the government doesn't supervise your haircut.
CNN's Shasta Darlington now from Cuba.
(BEGIN VIDEOTAPE)
SHASTA DARLINGTON, CNN CORRESPONDENT (voice-over): Expert hands trim hair and shape sideburns in Old Havana. Here, a simple haircut appears to be communist Cuba's latest attempt at free market reform as employees take overstate-run barbershops and beauty salons for the first time since Fidel Castro nationalized business in the 1960s.
"I like this system more because I can charge what I want," says Orlando Vargas. He's one of a handful of Havana barbers who now rents his shop from the state for nearly $40 a month, instead of a $12 salary he sets his own price and pockets the profits. "I think it's going to work well," he says.
But allowing barbershops to go private is just a drop in the bucket in a country where the state still controls 90 percent of the economy. In a recent speech, President Raul Castro said government payroll was hugely inflated.
RAUL CASTRO, PRESIDENT OF CUBA (through translator): There are hundreds of thousands of excess workers, some analysts calculate the excess jobs exceed 1 million.
DARLINGTON: A full fifth of the official workforce.
(on camera): Economists say the inflated payroll helps keep unemployment low, but those state workers often don't have a lot to do, one reason you can find so many people on the street at 11:00 a.m. on a work day.
(voice-over): State salaries average just $20 a month.
We asked Cubans if they were worried about layoffs. This woman said people are nervous. "They've been cutting payroll for a while now, some places 20 percent, others 40 percent and sometimes even 60 percent," she said.
Many Cubans resort to the informal economy or black market to make ends meet. Roberto, a self-employed construction worker says he stopped relying on the state years ago. "With five kids, a state salary will only buy you food and a pair of shoes," he said, "and you have to save all year for the shoes."
Even so, some barbers and stylists are wary of change, afraid to give up a guaranteed salary no matter how low and face the unpredictable free market.
Shasta Darlington, CNN, Havana.
(END VIDEOTAPE)
HOLMES: Well, I want to turn back to our Rob Marciano, who is keeping an eye on the skies over Europe for us and also which way the winds are blowing. But there we go, that gives an idea of just how many planes are up and not up in the skies. (WEATHER REPORT)
HOLMES: Rob, appreciate you. We'll check in with you once again. And now want to tell our viewer what's we're working on for the next hour of CNN NEWSROOM.
Shocking and really disturbing case in Mexico that's adding to the country's heated abortion debate. A pregnant 10-year-old girl allegedly raped by her stepfather. The law says she's too far along for an abortion.
Also, Arizona passes one of the toughest immigration measures in the nation. Critics are concerned it will force racial profiling. The story plus your comments from our blog.
Stay here.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: She's passionate about fighting for California's families.
AUDIENCE MEMBER: Repeal "Don't Ask, Don't Tell"!
OBAMA: She is -- we are going to do that. Hey, hold on a second. Hold on a second. We are going to do that. So --
AUDIENCE: Yes, we can! Yes, we can!
OBAMA: What the young man was talking about was we need pass -- we need to repeal "Don't Ask, Don't Tell," which I agree with and which we have begun to do.
It would make more sense to holler that at the people who oppose it.
(CHEERING)
(END VIDEO CLIP)
HOLMES: Well, the president, President Obama, may be a bit frustrated there responding to hecklers demanding a repeal of the "Don't Ask, Don't Tell" policy on gays in the military. The president was speaking at a Los Angeles fundraiser for Senator Barbara Boxer who the president said opposed "Don't Ask, Don't Tell" in the first place.
Goldman Sachs today reported first quarter profits of $3.5 billion. That was better than some expected and welcome news for the investment bank facing fraud charges filed by the SEC. The case against Goldman is adding to calls for financial reform and that was a topic of discussion on "AC360" last night.
(BEGIN VIDEO CLIP) ANDERSON COOPER, CNN ANCHOR: The regulation that's being debated now with Chris Dodd, what exactly is it proposing? I mean, how will this change it?
ALEXIS GLICK, FINANCIAL JOURNALIST: You see, Michael brings up a very important point and that is, how were these instruments put together? What was the regulatory framework like that?
A lot of these derivatives have been trading in what you'd call a black market, a shadow market. They have not been trading on an exchange where people have been able to see the trading and the activity.
And that is one of the biggest movements down in Washington, D.C., in terms of financial reform, is that there's some transparency behind these complex instruments. So that is probably the biggest feather in the cap for the financial regulatory framework here.
But it's also Mary Schapiro and the SEC who fell down on Madoff. This is a big feather in the cap for the likes of the SEC. It shows that they're doing something about it; they're maybe getting a little bit deeper into these complex instruments and understanding who was behind it and why.
COOPER: There's no doubt, David, they've been asleep now for a couple of years. And so maybe this is them waking up. But this will definitely -- I mean, from a PR standpoint, this definitely helps the Democrats in terms of getting some kind of regulation.
DAVID GERGEN, CNN SENIOR POLITICAL ANALYST: Anderson, listen, there's no question this helps the Democrats. That's why President Obama is coming to New York on Thursday and to beat up on Wall Street.
And, you know, Chris Dodd, Barney Frank, they've all jumped on this. And they're going to use that. It does add fuel to the question is, did the SEC move at sort of a convenient time?
But I think the other thing, what we also learned today was at the SEC itself, there were five votes. There were three Democrats who voted to bring the charges and two Republicans who opposed that.
Now, when the market heard that today, they began to think, "Well, maybe these charges won't stick." And what I would suggest tonight is -- I think Michael is right. There is something about this that smells. But until we know the facts, until we really get down and deep and understand more of the facts, I think it's unfair to either vilify or to judge Goldman Sachs totally or the whole transaction until we -- we need to know more than we know now.
MICHAEL LEWIS, AUTHOR, "THE BIG SHORT": Well, Anderson, one really obvious thing that needs to be addressed is why on earth should a Wall Street firm be making bets for itself on bonds that it's advising its customers to buy and sell? That the problem in the middle of this is -- is that once they can make money by creating things that can explode, they're going to create things that explode. And so these functions need to be separated. COOPER: Yes.
LEWIS: They should not be taking place under one roof. And that's, you know -- this is essentially what the Volcker rule gets at. I think, you know, it's -- I'm all for -- for wisdom and dispassion and -- and making this whole discussion nonpartisan.
But the fact is that this -- that reform is going to be an act of violence, because you're going to be reforming a culture that has not -- that has not -- essentially, has grown up over the last 30 years. And it's a pretty dramatic social change.
GLICK: And where were the rating agencies? Why aren't we talking about them?
COOPER: The rating agencies were being employed by the --
GLICK: They're being paid by the firms. The firms are paying them to rate them AAA debt.
LEWIS: That's right. It's absolutely right.
GLICK: It's a disaster. Where is the culpability there?
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