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Stocks Surge on U.S. Bailout; Elena Kagan Nominated for Supreme Court; British Prime Minister Gordon Brown to Step Down

Aired May 10, 2010 - 12:00   ET

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

TONY HARRIS, CNN ANCHOR: Hello again, everyone. I'm Tony Harris. Top of the hour in the CNN NEWSROOM where anything can happen and usually does. Here are some of the real people behind today's biggest stories.

Elena Kagan rises to become President Obama's pick for the U.S. Supreme Court. He calls her a trail blazing lady, but she's one with no judicial experience. Is she a nominee?

Plus, with hundreds of thousands of gallons of oil gushing into the Gulf of Mexico each day, what's it doing to coastal communities? Residents speak out this hour. We know a lot of you are online right now, and we are, too. The top stories at CNN.com right now, the death of the awesome Lena Horne, cleaning up the oil spill, and the U.S. stock market reacting to Europe's bailout. Let's do this. Let's get started.

I need to get to our chief business correspondent. Ali Velshi is in the house. So many issues to talk about with you, sir.

ALI VELSHI, CNN CHIEF BUSINESS CORRESPONDENT: Yes.

HARRIS: First of all, this run-up to date in the marker. 400- plus points. What do you think?

VELSHI: Well, listen, first of all, we've taken a beating over the last several weeks because of what's been going on in Europe.

HARRIS: Yes.

VELSHI: But think back to September, October of 2008 when things going on in the U.S. financial system where wrecking worldwide markets.

HARRIS: Yes.

VELSHI: Think of this as payback. See, now the problem is going on in another part of the world, and we see how connected we all are.

So, basically, Greece was in a lot of trouble. It has spread to other parts of Europe, where some of these economies are not as strong as -- their banking systems are not as strong. And basically, the European Union and the central banks around the world have said we will back you no matter what in order to stop people from taking their money out of the system. HARRIS: So, we get a plan today from the EU, right?

VELSHI: Yes.

HARRIS: And that leads markets to just -- we've got an explosion.

VELSHI: Right, but remember the losses we took last week.

HARRIS: That's where I was going. Talk to me about, was it the uncertainty as to what the EU would do that led to the big sell-off last Thursday and all this talk of fat-fingered trading?

VELSHI: Well, I think the fat-fingered trading isn't going to be the case. But something triggered markets in the 2:00 hour last Thursday to do something very dramatic which led to that almost 1,000- point drop, which then recovered.

But even before that, if you recall, even during your hour on TV, the market was suffering. And that was because of Greece.

So, Greece was already -- and Europe. That was already causing problems in the market. Something happened that they're investigating this morning.

The SEC is meeting with the New York Stock Exchange and Nasdaq. They're trying to get to the bottom of this.

Very strange that we haven't got a solution. We haven't figured out what the problem is. But that's not Europe.

But we had taken these 100-point, 200-point drops for a few weeks now. So, today, we've got a 400-plus point gain on the Dow, we haven't even really made up ground.

HARRIS: So, Ali, make the point that I've been making -- and you'll make it better than I have -- that what is happening in Greece now is important to the United States.

VELSHI: It absolutely is. This is a look, a window at what could happen to the United States if we were to become more fiscally undisciplined and someone were to say, we don't think you really have the ability to pay your debts back.

Now, Greece is a very different situation for very different reasons. It's not the U.S., but the reality is, it should make us think about debt and our deficits, and why it's important to not be in a position where somebody can just downgrade your debt and say you're not a good credit risk, increase the amount of interest you pay on it, and get you into trouble.

Again, I want to be careful. There are structural reasons why what happened in Greece could only happen in Greece and not in the U.S.

HARRIS: And there are similarities. VELSHI: There are similarities.

HARRIS: That is an aging population. We have an aging population.

VELSHI: That's correct.

HARRIS: Greece has made a lot of promises to older folks, right?

VELSHI: What a great way to put it. That is right.

HARRIS: OK.

VELSHI: Now, their proportion of people to whom they've made promises in their population is even greater than ours, but that's exactly a reality. We have a whole lot of people who will be retiring and expecting a check from the government. And we're writing checks that we can't pay at the moment.

HARRIS: Yes. I've got one more.

Give me time for one more with Ali. He was gone all last week, so I've got to talk to him.

(CROSSTALK)

HARRIS: Yes.

So what happened in the April jobs report? It was a good --

VELSHI: It was a good report.

HARRIS: It was a good report, right?

VELSHI: It was a good report. In fact, people were looking for criticisms. Bottom line is it was good. I'll tell you why it was good.

Number one, real jobs being created.

Number two, most of those jobs were in the private sector. We never want it when the government is creating most of your jobs. That's what happens in Greece. We wanted that. So they're in the private sector.

The criticism that comes out is that in order to get back to where we were before the recession, we would have to have much more of this for many years. We know that already.

The bottom line is we want it going in the right direction, every month more jobs than the month before, and the right kind of jobs. We even created jobs in manufacturing, which hasn't happened in a very long time. This was a good jobs report.

VELSHI: Good to see you. Welcome back.

HARRIS: Thanks, buddy. I like your new set.

HARRIS: Well, come on. Been around.

VELSHI: You mind if I borrow it for a couple hours later?

HARRIS: Absolutely. All yours.

VELSHI: All right. Good.

HARRIS: We'll get catering up here for you as well.

VELSHI: Very good.

HARRIS: So, with the European Union bailing out Greece and other nations in a deal worth more than $1 trillion, we want to know from you, does this alter your view on the necessity of U.S. bailouts -- oh, boy, start it up with this one -- such as the auto, banking and housing rescues?

If you would, just go to CNN.com/Tony and leave us your comments. We will read a few of them later this hour.

The next justice. President Obama announced today he wants Elena Kagan to serve on the United States Supreme Court.

Kagan currently is the U.S. solicitor general, arguing cases on behalf of the government before the Supreme Court. She is the first woman to hold the solicitor general's job.

If confirmed, Kagan would be the third female justice serving on the current court. Three women have never been on the high bench at the same time.

Kagan is 50 years old. That would make her the youngest member of the court. Kagan was dean of Harvard Law School from 2003 to 2009, the first woman to hold that job.

You may have noticed something missing from the Kagan resume. She has never been a judge.

White House Correspondent Dan Lothian is here.

And Dan, is this a potential problem in the Senate confirmation hearing for Elena Kagan?

DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Well, on the one hand, people might argue that because she has not been a judge, she does not have that kind of experience. On the other hand, it could work to her advantage, because she doesn't have a paper trail.

As you know, when past judges, their cases are put under the microscope of a nomination process, simple elements of those cases can become quite controversial. So, it may really work to her advantage.

But I can tell you, the president has done a lot of back time, or work behind the scenes, trying to look into every aspect of his nominee, looking into her writings and her speeches, and ultimately coming to his decision which he announced this morning, calling Kagan, "an intellectual heavyweight and a consensus builder."

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Elena is respected and admired not just for her intellect and record of achievement, but also for her temperament; her openness to a broad array of viewpoints; Her habit, to borrow a phrase from Justice Stevens, of understanding before disagreeing; her fair-mindedness and skill as a consensus builder.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

ELENA KAGAN, U.S. SUPREME COURT NOMINEE: I have felt blessed to represent the United States before the Supreme Court, to walk into the highest court in this country when it is deciding its most important cases, cases that have an impact on so many people's lives. And to represent the United States there is the most thrilling and the most humbling task a lawyer can perform.

(END VIDEO CLIP)

LOTHIAN: Tony, I can tell you that the White House worked very hard to keep this decision under wraps. Reporters, of course, had been digging for quite some time. And, in fact, one point that was quite surprising is that some of the lawmakers who will be involved intimately in this nomination process up on Capitol Hill, some of the key lawmakers, did not find out about the president's decision from the president until this morning -- Tony.

HARRIS: Well, that begs the question then, Dan, when did the president exactly make up his mind and pick this nominee?

LOTHIAN: Well, we are told that the president did not ultimately make up his mind until sometime yesterday. And then he did not reach out to Kagan until 8:00 last night.

And then shortly after that, he began making a round of phone calls to the other runner-ups, if you will, to tell them that they would not be getting the nod. So, perhaps the president waiting until the last minute to reach out, so that way it would make it much harder for the news to get out.

HARRIS: Yes, sounds like it to me.

LOTHIAN: Sure.

HARRIS: All right. Our White House correspondent, Dan Lothian.

Dan, appreciate it. Thank you.

LOTHIAN: OK. HARRIS: The government says the man accused of attempting a terrorist bombing in New York's Times Square was most likely working with the Pakistani Taliban. Eric Holder says he expects evidence will show the Taliban helped finance Faisal Shahzad's alleged plot. The president's assistant for counterterrorism and homeland security, John Brennan, says the group is closely tied to al Qaeda.

CNN National Security Contributor Frances Townsend calls it another wakeup call for the United States.

(BEGIN VIDEO CLIP)

FRANCES FRAGOS TOWNSEND, CNN NATIONAL SECURITY CONTRIBUTOR: I think what we take from this is, these small regional groups that share this sort of ideology and the tactics of al Qaeda have got to be taken serious as threats directly to the United States' homeland security.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

PETER BROOKES, FMR. DEP. ASST. SECRETARY OF DEFENSE: We have to understand that we have this new threat vector, the tactics are evolving and changing, and we have to be ahead of those tactics, on top of those tactics, on top of the people that might be perpetrating terror attacks. So, in other words, the threat is evolving and the threat is expanding.

(END VIDEO CLIP)

HARRIS: OK. Terrorism experts say the Pakistani Taliban has pledged to carry out attacks against the U.S. since the U.S. military increased its drone attacks.

Attempts to stop the oil leak in the Gulf have failed so far. We're live from the Louisiana coast with what might be Plan B. What might that actually look like? And how anxious residents are responding.

We're back in a moment.

(BEGIN VIDEO CLIP)

UNIDENTIFIED MALE: A serious crisis? Sure enough. But what do you do, just stick your head in the sand? No. We get out and clean our sand up and keep going.

(END VIDEO CLIP)

HARRIS: First, though, our "Random Moment." That comes your way in 90 seconds.

(COMMERCIAL BREAK)

HARRIS: He is Mr. Perfect in our "Random Moment of the Day." Oakland A's pitcher Dallas Braden threw a perfect game yesterday against the Tampa Bay Rays. That's 27 down. Only the 19th perfect game in Major League Baseball history, young man.

Braden actually gave the game ball to his grandmother, who raised him after his mom died. It turns out grandma calls them like she sees them. She ripped Yankees' third baseman Alex Rodriguez for cutting across Braden's pitcher's mound. That happened in a game a couple of weeks ago.

She told A-Rod to stick it. Love it. Maybe grandma should be our "Random Moment of the Day."

(COMMERCIAL BREAK)

HARRIS: More than 200,000 gallons of oil a day still gushing into the Gulf of Mexico. Imagine that for a second here. And BP's efforts to cap it with a large dome not working.

So what's next?

CNN's David Mattingly has been following the oil leak since it started gushing almost three weeks ago. He joins us live now from Venice, Louisiana.

And look, David, what's next?

DAVID MATTINGLY, CNN CORRESPONDENT: Well, Tony, when they lowered that big dome down, they were able to get it close to the spot where they were supposed to land it. Unfortunately, it started filling up with gas crystals.

They anticipated this, but not nearly at the volume that they encountered. It created sort of a slush inside the dome and clogged it up.

So they had to set it to the side, and now they're looking at using a smaller dome. They're connected to a pipe that will be able to push these crystals out of the way and land that smaller dome in the exact same spot they were aiming for before. And they're hoping that that eventually will be able to solve this problem with the larger leak. And they're putting that in place, they hope, by middle of this week.

HARRIS: All right. And David, can I ask you something? I haven't heard much recently about a plan for a second platform drilling down and across to sort of head off and tap into that first open wellhead.

Is that still a plan that's being worked on?

MATTINGLY: Well, here's the good news. That drilling is under way, and they're a little bit ahead of schedule right now, we're told.

They're looking at that, taking, though, a couple of months before they drill to completion on that. And then they're going to pump in the cement and seal off this well. That's the final solution, but that's months away. What they're working on right now is the temporary fix to stem the flow of oil into the Gulf of Mexico until they get that well dug.

HARRIS: Yes. OK.

David Mattingly for us.

David, appreciate it. Thank you.

Got to tell you, despite the giant oil slick heading their way, some residents of one Louisiana (sic) town say oil companies and coastal companies can peacefully coexist.

CNN's all-platform journalist Sarah Hoye brings us their story.

(BEGIN VIDEOTAPE)

SARAH HOYE, CNN ALL-PLATFORM JOURNALIST (voice-over): On the surface, the city of Gautier, Mississippi, looks like any small-town USA. It's the lunch rush at Michael Majure's Petit Bois Cafe. But instead of talking about the weather, folks around here are talking about the oil spill.

MICHAEL MAJURE, PETIT BOIS CAFE: It's devastating to me, because I'm raising three children here in Mississippi. My wife and kids love to go out to the islands and enjoy the islands, and that's going to being taken away from us. So I'm livid right now. I'm mad.

HOYE: The Gautier family has lived here since the 1800s. Two of the Gautier brothers run an ice and seafood business. And they say they can coexist with oil companies.

UNIDENTIFIED MALE: Just because something of this nature happens in the oil industry, it's not a black eye on the entire industry. It's really not a black eye on BP. It was an unfortunate accident, and we're going to have to learn from it.

UNIDENTIFIED MALE: We have to drill. There's no way we can get off of oil in this country within the next 25, 30, 50 years. Green is great, but we can't just turn off the spigot.

We have to have the oil. Everything that we touch. I mean, I can't name hardly anything that's not tied to the oil industry.

BP's got a problem. They're going to fix it. And Chevron's a great neighbor. I mean, we love having Chevron here. I say let them drill.

HOYE: The mayor says the city will tough it out.

UNIDENTIFIED MALE: It's a serious crisis sure enough. But what do you do? Just stick your head in the sand? No, we get out and clean our sand up and keep going.

HOYE: Unlike a hurricane, there's no evacuation route from oil. UNIDENTIFIED MALE: I think the city of Gautier has to rule (ph) along the coast. Spend the economy, make sure our economy, our environment is taken care of. Bill BP.

I mean, that's -- you know, we didn't do this. They did.

(END VIDEOTAPE)

HARRIS: OK.

New developments in the leadership of Britain's government. We are taking you live to London for the latest.

We're back in a moment. You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: You know, we just received this a couple of moments ago. It looks like British Prime Minister Gordon Brown is prepared to step down -- OK -- as part of a deal to keep his party in power in the aftermath of last week's elections that left no party with an absolute majority. That would appear to clear the way for Conservative Party leader David Cameron to become the next prime minister.

But let me not get ahead of the story. Let's get you to London now and CNN's Paula Newton.

Am I close there, Paula?

PAULA NEWTON, CNN INTERNATIONAL CORRESPONDENT: Unfortunately, Tony, no. I wish any of us were close at this point.

It's been an incredibly confusing day. But let's start with the headline.

Gordon Brown has said that he will resign as head of the Labour Party. What does that mean? It means now, as prime minister -- he's a caretaker prime minister -- he's stepping aside, saying the voters have decided they don't want me as prime minister. That leads the way for someone else to step in that role if, and only if, Labour, a third party called the Liberal Democrats, and a coalition of other parties can get together a coalition government.

The bottom line, Tony, we are four days out from this election. We still do not know who the next prime minister of Britain will be. And I can assure you, the White House is watching closely.

HARRIS: Well, wait a minute, Paula. Now, is there a front- runner here? Am I wrong in even suggesting that David Cameron, the leader of the Conservative Party, is the front-runner?

NEWTON: He won the popular vote.

HARRIS: Yes.

NEWTON: And he has the most number of seats. But he did not win a majority.

What does that means? It means, basically, we had an election of losers in this election. And that includes David Cameron.

He's been trying to negotiate with this third party to try to clinch a deal. But what the Labour Party is offering on the table right now may seem a bit more tantalizing to that third party. It's really changing here by -- literally by the hour, Tony. And that's not an easy thing to take in the financial markets, and certainly given the financial crisis throughout Europe right now. At the same time, everyone here is saying, look, give us a few days, we'll be able to sort this out.

I can tell you another person who's watching this closely is the queen, remembering that anyone who resigns as prime minister, as Gordon Brown will have to soon, will have to go to the queen first. Anyone who wants to form a government will then have to follow that up and formally tell the queen, ask the queen if they can form a government.

Oh, what a cliffhanger.

You know, I've been following this election now for two weeks. I thought by now we would have figured something out.

Tony, it has to say that this is uncharted water for people here as well. It's decades since they've had this kind of political chaos here. They have had strong leaders here in the last few decades, not any longer in the sense that those leaders will be hobbled by a lot of backroom deals being made right now.

HARRIS: Well, wait a minute. One more quick one here for you, Paula.

This man who leads the Liberal Democrats, this man Clegg, he looks like the king-maker here. Any indications where he's leaning?

NEWTON: Absolutely not. And that's part of the problem.

Here you have a guy who actually -- the outcome for the election wasn't as good as hoped for him, and he actually did not do as well as he had done in the previous election. And yet, he's been dealt, really, the kind of hand that one would only wish for. He can now decide who the next prime minister will be. That's where we are right now.

HARRIS: All right.

Paula Newton in London for us.

Well, it's intriguing, at least, if not a little bit nerve- racking.

All right, Paula. Appreciate it. Thank you.

Your top stories right now. Afghan President Hamid Karzai is flying to Washington today. He will attend a series of intense and closed-door meetings with Secretary of State Hillary Clinton tomorrow. On Wednesday, he will meet with President Obama.

Utah Senator Robert Bennett was eliminated from seeking re- election as a Republican. At the state party convention, Tea Party critics focused on his vote for the financial bailout known as TARP.

And the volcano in Iceland that has disrupted air traffic in Europe is causing disruptions again today. The ashes delaying transatlantic traffic and threatening flights over parts of Ireland and Portugal.

(WEATHER REPORT)

HARRIS: Republicans speak up about Elena Kagan's Supreme Court nomination. We will take you live to the Capitol to gauge some reaction.

We're back in a moment. You're in the CNN NEWSROOM.

(COMMERCIAL BREAK)

HARRIS: President Obama calls his latest Supreme Court pick a trailblazing leader and a consensus builder. Solicitor General Elena Kagan must be confirmed by the Senate.

Last hour, I talked with Alabama Senator Jeff Sessions, the ranking Republican on the Senate Judiciary Committee, about Kagan's nomination.

(BEGIN VIDEO CLIP)

HARRIS: Is never having been a judge a disqualifier for you?

SEN. JEFF SESSIONS (R), ALABAMA: No, it's not. But I do think a person who's had very, very little legal experience in terms of -- I think about two years of private practice, and no judicial experience. Mainly, her career has been in academics. Even as dean at Harvard, where you certainly don't have time to practice law, you're more of an administrator, that kind of experience is weak in her case, there's no doubt about it.

(END VIDEO CLIP)

HARRIS: Senior Congressional Correspondent Dana Bash live now from Capitol Hill.

And Dana, tell us a bit more about the nominee's reception there on Capitol Hill.

DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well, it's very interesting. You know, you had 31 Republicans who voted for Elena Kagan when she was nominated to her current post, which is solicitor general. But Republican after Republican after Republican has said today that it is very different when you're talking about a lifetime appointment to the Supreme Court.

And it's also interesting in seeing some of the e-mails that are just flying around today, especially by conservative activists. There's a lot of pressure on Republicans to really try to put Elena Kagan's feet to the fire in these hearings and prove that they are not just going to let her go through, even though it does seem at this point -- at this point -- that it is unlikely that she is going to be blocked.

And I say that because I spoke to the number two Republican, Jon Kyl, who is not only a member of the Judiciary Committee, he also is the official vote counter. He acknowledged it is very early, but he said even early on, it is unlikely that Elena Kagan would be filibustered.

Take a listen.

(BEGIN VIDEO CLIP)

SEN. JON KYL (R), ARIZONA: Obviously, we want to do our job of due diligence. Who knows what we might find in her record once these things are sent up to the Senate and we begin to read them? I doubt that there's anything there that would occasion a filibuster, but I'm not going to commit anybody. I think it highly unlikely that her nomination would be filibustered, however.

BASH: And why do you think that is?

KYL: Well, because she's nominally qualified. And by that, I mean, she's obviously very intelligent, she's a very charming individual. She has a background in the law. She knows the law. And those are basic requirements for a Supreme Court justice. (END VIDEO CLIP)

BASH: So, right now, it's time for senators to comb through her records. But it is important to note that there isn't much for them to comb through, especially if you use history as a guide. History, meaning that most of the nominees that they have seen have been judges in the past, and they have officially -- they have official rulings for the senators to comb through to get a sense of what their judicial philosophy is and where they stand on various positions.

And not so for Elena Kagan. Not much at all. That is why these senators, especially on the Republican side, say that they are going to push very hard for as specific as they can when it comes to the answers that she will give at these hearings.

HARRIS: Hey, Dana, those who were with us last hour, and maybe saw our interview with Jeff Sessions, may be wondering, how is it that "Don't Ask, Don't Tell" may factor into the hearings going forward?

BASH: When it comes to the issues, I mentioned that she has a very thin record. But this is something that has already exploding, Tony. This is by far, so far -- and I say "so far," because you never know what's going to come -- the biggest issue flash point, especially among Republicans. And the issue that we're talking about is when Elena Kagan was dean of Harvard Law School, she very actively opposed and tried to block the idea of allowing military recruiters on campus because of the "Don't Ask, Don't Tell" policy of the military. She participated in an amicus brief against that policy at the Supreme Court, and then she lost.

So, that is something that already Republicans are bringing up, saying that it's proof that she is an activist, not necessarily somebody who has a history of being impartial. Jeff Sessions, who I spoke to after you did, Tony, said that he thinks it shows that she's out of touch with reality. He says he thinks she made a big mistake. He said is it disqualifying? I don't know, but it's a significant issue.

And at the same time you have Democrats trying to downplay it that Judiciary Chairman Patrick Leahy is saying. Well, eventually, they were allowed on campus and what's the big deal, she's nominated to be Supreme Court justice, not Secretary of Defense. Just the beginning of this particular issue.

HARRIS: Boy, all right. Our Senior Congressional correspondent, Dana Bash for us. Appreciate it. Thank you.

She's just 50 years old and if she is confirmed, Elena Kagan could help shape the Supreme Court for many years to come. CNN Senior Legal Analyst, Jeffrey Toobin joins us now with some insights into Kagan's nomination.

Jeffrey, good to see you. You know, you have been on the record, sir, for some time now with your thought that Elena Kagan would be the president's choice to fill the Stevens seat. What led you to that conclusion?

JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Well, she politically looks a lot like Barack Obama and presidents try to replicate themselves on the bench. Most presidents do a very good job. There's a mythology out there that Supreme Court justices tend to surprise the president who appointed them. That's very rarely true.

If you look at recent history, if you look at John Roberts, Samuel Alito, appointed by President Bush, if you look at Steven Breier and Ruth Ginsburg appointed by Bill Clinton, these justices reflect the politics of the president.

And if you look at Elena Kagan, certainly a Democrat, certainly someone who is proud to have worked in the Clinton and Obama administrations, but someone who has not been especially confrontational, who has been a consensus builder in her career, she looks a lot like Barack Obama in a political profile.

HARRIS: And Jeff, you've also said that the fact that she's never been a judge might be a point in her favor. Tell us why you think that?

TOOBIN: Well, certainly it is with the president. HARRIS: Yes, yes.

TOOBIN: You know, this has really changed in recent history. As of 2005, all nine justices are former federal appeals court judges. The court that decided Brown V. Board of Education in 1954, eight of the nine justices had never been judges of any kind before. That's what it was like throughout most of the Supreme Court's history.

You had governors, senators, attorneys general. You had private lawyers. People who came from diverse backgrounds, not just former judges on the Supreme Court. This is a tradition that President Obama has said he'd like to go back to.

This is why Janet Napolitano has been considered for the Supreme Court. Jennifer Granholm, the governor of Michigan. Elena Kagan comes out of legal academia, which is sort of like being a judge, but it's different. She's never been a judge. I think that's a tradition that the president may well go back to in subsequent appointments if he gets them as well.

HARRIS: Well, I don't know if you had a chance to hear the conversation we had last hour with Senator Sessions. But I asked him basically, where do you go to find the material to find an argument if you're heading down that road? That she could be an activist judge. I'm asking you, anything in her writings as solicitor general, anything in her paper trail that could potentially be problematic that we're aware of at this point?

TOOBIN: Well, certainly as Dana mentioned, the issue of gays in the military will be a focus of Republican questioning. But in terms of a smoking gun, in terms of a big problem that might actually get Kagan defeated, I certainly haven't seen it. Yet, though it's fair to say, it's very early in the process.

I was very struck by the comments to you of Senator Sessions, and the other comments of Senator Kyle, two very important Republican senators when it comes to judicial confirmations. They were pretty unconfrontational. They were not loaded for bear about Elena Kagan. They certainly didn't say they were going to vote for her.

But the comments were very much in the realm of, we're going to take a hard look at it. We're not making any promises. But if you want to defeat a Supreme Court nominee the way Democrats defeated Robert Borke in 1987, you need to come out firing the way Ted Kennedy did and say if Robert Borke is on the Supreme Court, you'll have segregated lunch counters, women dying in backyard abortions. You need to fire people up. Republicans are not yet trying to fire people up and time's are wasting if they want to do it.

HARRIS: Yes, Jeffrey Toobin as always, great to talk to you, sir. Appreciate your time.

But, Dow is keeping the points positive today. What about that almost 1,000-point freefall last Thursday? New details on this money mystery when we come back.

(COMMERCIAL BREAK)

HARRIS: Come on, Mark, want to get everyone to CNNmoney.com, the best financial website on the web right now. You can see here, drowning in debt. The real estate bust left a held backs and many Americans underwater on their homes. That's for sure. Also, the impact of the oil spill on commercial fishermen and the Greek crisis.

Boy, let's get to the New York Stock Exchange now. Three hours into the trading day, right and we're still in positive territory of 410 points. Imagine that? NASDAQ is up 101 for the NASDAQ?

OK, we're following these numbers throughout the day with this lady, Felicia Taylor at the New York Stock Exchange.

Felicia, look, a lot of finger-pointing last week. Last Thursday when we saw that steep sell-off, right, in just a couple of minutes, close to 1,000 points and now Washington is looking into all of that. What are you learning?

FELICIA TAYLOR, CNN BUSINESS CORRESPONDENT: Well, the latest news here, Tony, is that indeed, in Washington right now, members of the Securities and Exchange Commission, the head of the Commodity and Futures Trading Commission, among some of the other regulatory boards, are meeting with the heads of the New York Stock Exchange, the NASDAQ, some of the other exchanges to discuss and uncover exactly what went wrong last Thursday to precipitate that 980 point drop.

Just this morning, Senator Chuck Schumer has issued a letter suggesting that perhaps there should be some kind of a market-wide circuit breaker. In other words, when that kind of precipitated selling begins, a market circuit breaker takes hold and can prevent any further accelerated drops.

The problem basically here, Tony, is that there is not a unified ruling system across all of the exchanges. When the New York Stock Exchange was able to halt trading or slow down trading, basically inputting the human factor back into the element, the other exchanges maintained their electronic positions.

So that was part of what accelerated the downfall. That's what they're taking a look at right now in Washington. And again tomorrow there will be the hearing.

HARRIS: Well, any idea of how long it's going to take for the officials to figure out exactly what happened here? I mean, you know, you've got a lot of investor confidence riding on it.

TAYLOR: Yes, Tony, as you and I well know, when something happens in Washington, it doesn't necessarily happen very rapidly. Certainly isn't going to be concluded by the end of tomorrow let alone by what I consider this week. It may be weeks, if not even months before we see actually any implementation of changes. So, it's a working progress.

HARRIS: All right, Felicia, appreciate it. Thank you. Still to come with the European Union bailing out Greece, and other nations, in a deal worth more than $1 trillion, we want to know, does this in any way alter your view of the necessity for U.S. bailouts, such as the auto, banking and housing situations, the rescues of those sectors? Go to CNN.com/Tony and leave your comment if you would. We will read a few of them later this hour. We're back in a moment here in the CNN Newsroom.

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HARRIS: The legendary Lena Horne used her sultry voice to wow nightclub, movie and stage audiences. She also used it to fights racial discrimination. The great Lena Horne died last night at New York Presbyterian Hospital. She was 92. Our Brooke Anderson looks back at her amazing career.

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BROOKE ANDERSON, CNN CORRESPONDENT (voice-over): In movies like "Cabin in the Sky" it was clear that what singer Lena Horne got was beauty and talent. After a nomadic childhood, and over her family's objections, she became a performer first during the 1930s on Broadway and the New York clubs and later in Hollywood where she appeared in musicals, like "Stormy Weather "and "Words in Music."

Horne was one of the first African-Americans to get a long-term contract with a major studio signing with MGM in 1942.

LENA HORNE: I think the black boy that cleaned the shoes and me were the only two black people there. Except for maids that were working for the stars, you know and it was lonely. And I wasn't very happy, but I'm grateful, because they gave me the name. The name in "Stormy Weather" and "Cabin in the Sky." And every soldier, every troop, white and black, saw those pictures. And it was good for me in that way. But after I realized that I would go only so far, I went on the stage.

ANDERSON: After her Hollywood heyday, she recorded top-selling albums and returned to doing what she loved best, performing before live audiences.

HORNE: I'm always happy when I'm surrounded with people to react and feel and touch.

ANDERSON: Her signature tune was "Stormy Weather." And in her life, Horne had her share of that. She fought bigotry throughout her career and had to endure the deaths of both her husband and her son. In her later years, though, Horne found peace.

HORNE: The best thing in my life, I guess, is now, because I'm quiet, and I -- I'm logical. And I accept without flying off the handle. Sometime I do.

ANDERSON: Brooke Anderson, CNN, Los Angeles.

(END VIDEOTAPE) HARRIS: More on Lena Horne's other role in the civil rights movement. We will talk with Reverend Jesse Jackson right after a break. There's the man.

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HARRIS: The Reverend Jesse Jackson joining me now from Greenville, South Carolina. He and the legendary jazz singer and activist, Lena Horne, go way back.

Jesse, it's great to see you, as always. First of all, I'll give you a moment to wax here a little bit, poetic, on Lena Horne. First of all, talk to me about why she was so unique.

REVEREND JESSE JACKSON, RAINBOW/PUSH COALITION: Well, she was a queen with a conscience. She was a social transformer. I knew her as a kid seeing her on covers of magazines. She was on stage and movies when we couldn't get in the movies, except in stereo typical roles. She had had this dignity. She was amazing and attractive and talented, they wanted to make her an exception, other than she refused to accept that role.

Early on, think about this, in 1942, during the war, taking positions about supporting the victims of the bombings in Nagasaki and Hiroshima. She was put on the Communist red list and she fought back. She related to Paul Robertson in 1960. She worked with Harry Belafonte. She had the dual role as an activist. She had to bring down barriers we now all benefit from.

HARRIS: Remind us of the America she grew up in, and that she was trying to build, working to build a career as a performer. And we're talking about Lena Horne's America in the '40s and "50s.

JACKSON: You're talking about fortitude. This is 11 years, 12 years before the Supreme Court decision, the ruling about segregation. This is 23 years before the right to vote in 1965. Her performing in hotels, but she could not stay in the hotel. She could only perform on the stage and come in the back door and leave out the back door.

We know her for her achievements today. We don't know what she could have achieved, because given being an actress for a time, she was a dancer, a singer, as an interpreter, as a poet, but somehow she refused to negotiate away her sense of dignity for a higher personal status. That's what sticks out in my mind the most.

While she used her -- like Queen Esther, she used her appeal to get access to the king, then used her power to speak for the people who had no voice. This was before the king was known, number one, before dr. King had stages. She had stages, she and Belafonte had the stage. She was a huge force at the height.

She was a huge force in the '64 civil rights bill, of the voting rights act of 1965. I remember in my life, she was not present, lending her voice to make things happen. For women, she was the model. She was a trail blazer.

HARRIS: I knew you would bring it. Good to see you, sir. Thank you.

JACKSON: Thank you.

Remembering the great Lena Horne, the Reverend Jesse Jackson.

We're back in a moment.

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HARRIS: I asked you earlier if the bailout deal for Europe changes your view on the necessity of U.S. bailouts, such as the auto, bank and housing rescues. Let's go to our blog page at CNN.com/Tony.

The first response comes from T.D., who writes, "Bailouts are like putting a bandage on a problem and kicking the can down the road to be dealt with later without attacking the fundamental problems underlying the issue, the problem is not -- tore, bailouts are detrimental to a free market. Awarding failure is not going to allow the nature of supply and demand to take its course."

Time for one more here. This is from Chris who writes, someone will eventually pay for all of the poor financial decisions made by the world's biggest players. Increasingly, the answer to the question of "who" is simply "all the rest of us."

Again, if you'd like to continue the conversation, just go to our blog page, CNN.com/Tony. We're back in a moment you're in the CNN Newsroom.

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