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Report From Inside Bangkok; Understanding Recent Supreme Court Rulings; Green Buildings Around the World; Primaries Reveal Voters Want Change; Hot Issues Facing U.S. & Mexico; Stocks Struggle as Euro Flounders
Aired May 19, 2010 - 13:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
TONY HARRIS, CNN ANCHOR: We had a good time with you today. We'll see you back here tomorrow. CNN NEWSROOM continues right now with the man, Ali Velshi.
ALI VELSHI, HOST: Tony, have a fantastic afternoon. Great to see you.
I'm Ali Velshi, as Tony said. I'm going to be with you for the next two hours, today and every day, taking every topic we cover and try to take it a step further. I'm giving you a level of context that's going to help you put your world, I guess, into context.
Let's get started with that right now. Here's what I've got on the rundown. A big wrench is thrown into the political machine. Established politicians are getting a taste of antiestablishment voters. Three primary races in three states. They've all got one clear message.
Plus, the heart of Thailand looks more like a war zone than a capital city right now. Parts of Bangkok are burning as government troops swarm. Media blackouts are in effect, but we'll give you a look inside a country that is tearing itself apart.
And the wealth gap between black and white families is more like a chasm; it has grown exponentially larger. We're going to find out why, and we'll talk solutions with voters.
This is our big story. Voters had some solutions of their own last night. Three primary races. There were four Senate primaries yesterday. Three of them were particularly challenging and important. And while they all did something different, there was a big similarity between all of them, an antiestablishment vote turnout.
Let's talk a little bit about that. For that I've got Paul Steinhauser, political editor, and deputy -- I'm sorry, our deputy political director, and Mark Preston, our CNN political editor.
Before I go to these two guys for their analysis, though, let me tell you a little bit about what happened last night. The one that the country was watching was the Senate primary, the Democratic Senate primary in Pennsylvania. This is where Arlen Specter, running in his first primary, was -- was defeated by Joe Sestak. A very interesting story because Arlen Specter, a very long-serving senator, transferred over from the Republicans to the Democrats last year. The Democratic candidate who was going to run against him decided to stay in the race.
The White House backed Arlen Specter, but guess who won? Joe Sestak, the opponent. Fifty-four percent to 46 percent.
Let's take it over to Kentucky now. This is where Rand Paul, the son of Ron Paul, defeated Trey Grayson. Rand Paul was running for the Republican nomination but with the backing of the Tea Party. Look at that trouncing: Paul over Grayson.
And let's go to Arkansas where sitting Senator Blanche Lincoln -- this is a Democratic primary again for Senate -- did about as well as she could do. She got herself a runoff. Well, she beat Lieutenant Governor Bill Halter who she referred to as being more liberal, referring to herself as being more moderate. She has to now -- you have to get more than 50 percent of the vote in order to get the nod for the Democratic seat there. So she is going to have to run in a runoff. Very, very interesting.
You know, in the case of Rand Paul in Kentucky, this is a guy who is -- comes from a libertarian background, really feels that government needs to be smaller and less involved. Let's listen to what he had to say about his victory over the establishment Republican candidate in Kentucky.
Listen to this.
(BEGIN VIDEO CLIP)
RAND PAUL (R), KENTUCKY SENATE NOMINEE: I have a message, a message from the Tea Party, a message that is loud and clear and does not mince words: we have come to take our government back.
(END VIDEO CLIP)
VELSHI: OK. That's Rand Paul talking about taking government back. But he's back, he's a Republican candidate backed by the Tea Party movement.
Now listen to Joe Sestak, who is a Democrat who ran against -- against a Republican who had become a Democrat in Pennsylvania. This is somebody from inside the Democratic Party. Not somebody backed by the Tea Party movement. Listen to what Joe Sestak said after his victory last night.
(BEGIN VIDEO CLIP)
JOE SESTAK (D), PENNSYLVANIA SENATE NOMINEE: A win for the people, over the establishment, over the status quo, even over Washington, D.C.
(END VIDEO CLIP)
VELSHI: Ha, a win for the people, over the establishment, over the status quo, even over Washington, D.C. Two guys, two different parties, couldn't be more apart in terms of their politics, sounding exactly the same about their victory. A win for the people.
Let's bring the two guys in that I told you about: Paul Steinhauser, CNN's deputy political director. Mark Preston is CNN's political editor.
Guys, you were here yesterday telling us that this was going to be the flavor of these elections. Three different states, three different stories but this was the flavor.
Mark Preston, let's start with you. What message do we take away from this after seeing these victories of antiestablishment candidates over establishment candidates?
MARK PRESTON, CNN POLITICAL EDITOR: Well, you know what we're seeing, Ali, is the fact is that we see a trend line now. Arlen Specter is the third incumbent to lose in recent weeks. We saw Bob Bennett get drummed out of the primary out in Utah by the Republicans. We saw Alan Mollohan, a Democrat in West Virginia, lost his primary big. We saw Arlen Specter last night lose his primary bid in Pennsylvania.
In Kentucky we didn't have an incumbent but we had a candidate that was backed by Senate Minority Leader Mitch McConnell, the most senior Republican in Washington in the Senate. That candidate didn't win; Rand Paul did. What we saw last night, antiestablishment, anti- Washington. We saw Democrats say it; we saw Republicans say it, Ali.
VELSHI: Now, these are primaries. These are things that are voted on by people who are card-carrying members of a political party. There was another race late last night that the White House wants to point to, and that was a general election race for a seat that was vacated by Jack Murtha when he died. He had held that for a very, very long time. This was the 12th Congressional District in Pennsylvania.
Take a look at this result. The White House was trumpeting this. Mark Critz, who was sort of an aide to Murtha for a long time, defeated the Republican challenger, 53 to 45. Paul Steinhauser, the White House is saying that was the race that mattered last night because it was regular voters going to the polls bringing a Democrat back into the House.
PAUL STEINHAUSER, DEPUTY CNN POLITICAL EDITOR: Yes, that was the only contest from last night, Ali, where you had the Democrat versus Republican, and Democrats, the White House are pointing to this.
It kind of got overshadowed in a way by all those big-name Senate primaries, but this race could be telling. Remember, the Republicans need 40 seats to take back the U.S. House. So we were all looking at this one. This was a seat, as you mentioned, Democrats have held for a long, long time. But it's a socially conservative district. If the Republicans could grab this seat back, it could be a sign that maybe they really can take the House in November.
Democrats now are saying the Republicans couldn't do it last night. They feel confident they'll be able to hold the House in November, Ali.
VELSHI: All right. Mark, let's talk about this. We look back at other times in our history where there's been remarkable dissatisfaction according to polls to -- with what Congress was doing. In that case, in 1994, for instance, satisfaction ratings for the House of Representatives was at 30 percent and the governing party, then the Democrats, lost 53 seats.
In 2006, the satisfaction ratings were higher, 35 percent, and the Republicans lost 30 seats. They were the president's party at the time.
Satisfaction ratings for -- for Congress right now are at 27 percent. What do we think this is going to mean?
PRESTON: Well, if you're a Republican you're talking wave, wave, wave. They're saying that this is going to be 1994 all over again. They're going to take back the House, maybe take back the Senate. Talk to Democrats and say that that's a little bit over blown.
You know who it comes down to, though, Ali? It's going to come down to President Obama. Can President Obama get on the campaign trail over the next couple of months? Can he energize an electorate that helped push him into office? Can he get youth voters to come out and vote Democrat? Can he get these first-time voters in 2008 to come back to the polls and vote Democrat? A lot of this was in President Obama's court, Ali, and we'll have to see what he does over the next couple of months.
VELSHI: Hey, Paul, quick question to you. What happens when antiestablishment forces actually become the force to be contended with? How long can you be on the outside when you're the Tea Party or you're -- you're an organized wing of the Democratic Party and your candidate actually wins? You're not the outsider anymore.
STEINHAUSER: Yes, it's a good point. Joe Sestak, who ran as on outsider against Arlen Specter, remember, he's been here in D.C. for four years. But he was able to paint himself as the outsider in this race.
As for the Tea Party right now, you know, they -- the rest of this campaign season will definitely be able to stay the outsider element. But if Tea Party candidates start coming into Congress, it may be tough. They may lose their outsider edge. We'll have to see.
VELSHI: All right. Great discussion, guys. Thanks very much for being on top of it for us. CNN's deputy political director Paul Steinhauser; CNN political editor Mark Preston.
OK. Drug wars, guns, Arizona's new immigration law, trade. Burning issues between the United States and Mexico. All if them are on the table today at the White House. We'll have a report straight ahead.
And by the way, if you play by the rules, you're supposed to do well. Well, even if you play by the rules, everything you're doing, everything you're supposed to do in society, you can still get set back. A lot of African-American families are finding that out. We're going to talk solutions this hour, and I'll share some thoughts on it in my "XYZ."
(COMMERCIAL BREAK)
VELSHI: All right. Today's key summit between President Obama and Mexican President Felipe Calderon taking place at the White House. President Obama is setting an optimistic tone, but the issue is how, exactly, are we going to solve this problem?
I'm joined by Rafael Romo, who's a senior Latin American affairs editor here at CNN. And by Ed Henry who is standing by at the White House.
Ed, first of all, this has -- this has sort of tones of what happens with Afghanistan for instance. The president goes out on his way to say that we are -- we are supporting Mexico. We want to solve the problem that creates the gangland warfare, but the reality is, it's just not that easy to do.
ED HENRY, CNN CORRESPONDENT: It's not. And to use your Afghanistan model with President Karzai just here last week, you know, sure, would the U.S. want President Karzai to be doing more to crack down on corruption in his own administration in Afghanistan? Sure. But this is a leader they have to work with, and they've got to push and work as best they can.
Likewise, President Calderon, they would like to see the Mexican government doing more to stop the spread of guns and drugs across the border. U.S. working with the leader they have, first of all, while also insisting, as President Obama just did that a short time ago in the Rose Garden, that we're putting unprecedented resources at the border to shut it down.
The president saying illegal immigration is down, not up. And also pointing out he that is taking a close look at this new Arizona law to make sure it doesn't foster discrimination.
VELSHI: All right. Rafael, let's talk about this a little bit. What can Felipe Calderon do? He, first of all, has said he doesn't like this Arizona immigration law. President Obama said the same thing. There's no disagreement between them there.
But really, if you peel this back, it does all stem back to problems in Mexico, the warfare that has spread into some border states in the United States. What can they actually do other than show up at the White House and play nice with each other?
RAFAEL ROMO, CNN SENIOR LATIN AFFAIRS EDITOR: Well, the argument of President Calderon is that the reason why we have so much violence in Mexico is because the drug cartels are acting like a wounded bear, and what happens when you wound a bear? It lashes out and attacks you. So they say they are weakened. Our strategy is working. And it's just a matter of time, which is keeping doing the same thing before we can defeat them. Obviously, in Mexico it's an argument that doesn't fly very well with the opposition parties. But that's what the administration will tell you.
VELSHI: But what can -- does Mexico have some strategy whereby they can deal with this wounded bear?
ROMO: They have a strategy, and the strategy has been for the last three years to deploy 50,000 troops throughout the country. But the problem, according to President Calderon, what he's been saying is that it should be a shared solution because we -- the problem of drug violence in Mexico is fueled by demand in the United States. And if the demand doesn't change, drug cartels are likely to continue operating the way they have.
VELSHI: And, Ed, is there some sense that the U.S. and Mexico can work together on solving the demand side as well as the supply side?
HENRY: Well, they certainly hope that they can. And the president, as you noted, President Obama was trying to strike an optimistic tone but was also gently prodding and saying that there's got to be more development on the Mexican side of the border so that people don't want to be making money on these illicit drug and gun trades, and also to try to crack down on illegal immigration.
But let's face it. We've heard this before, not just from this administration but the previous administration and the one before it, as well. This has been a long-term problem. The U.S. government hasn't done a good job, long-term, of really shutting it down, Ali.
VELSHI: So Rafael, have we moved any distance forward on this whole thing? I mean, this is going to be a state dinner tonight, obviously. These are two countries with remarkably close historical relations. But in terms of the problems that face the Mexican- American relationship, and that is -- that is drugs; that is violence; that is immigration, are we any closer to it as a result of the summit?
ROMO: Most definitely. There's a lot of cooperation between both presidents. For example, since President Calderon took office, more than 300 Mexican criminals have been extradited to the United States, and there have been operations against drug cartels that have been done in a joint manner. So there have been significant victories, three top drug cartels that have been arrested within the last six months alone.
But again, is this enough? And will President Calderon have enough time in the 2 1/2 years that he has left in his administration to really tackle this problem?
VELSHI: And when you say is it enough, is it -- does it show some sort of trend where we're seeing an attack on the violence in these Mexican border states?
ROMO: Not necessarily, no. The violence specifically in places like across the border from El Paso, Texas, is worse than ever. Last year we had 2,600 deaths there. This year is more than 800 so far. So it's not getting any better, but like I said before, the argument of the Mexican government is that the cartels are desperate then, so they have become more violent than ever.
VELSHI: All right. Rafael, thanks very much. Rafael Romo is our senior Latin affairs -- American affairs editor. Ed Henry at the White House, our senior White House correspondent. We'll, of course, be checking in with him a little later on.
All right. There doesn't seem to be any quick fix for Europe's debt crisis. Investors know that more than anyone else. Once again, they are showing it. We'll take stock of that situation right ahead.
(COMMERCIAL BREAK)
VELSHI: Take a quick look at how the Dow is doing. Off about 80 points, 10,430. Why do you care? Because that's your 401(k), your 401(3b), your IRA. Christine Romans joins me from New York with -- with more on why this market is continuing to go down.
Two weeks ago, Christine, we had this flash crash in the middle of the afternoon, triggered initially by fears about what was going on in Greece and the rest of Europe. And then a couple of days later we had this agreement that we were bailing out Greece. The European governments and central banks had agreed to do this, and markets soared. Why are we back here again?
CHRISTINE ROMANS, CNN ANCHOR: Because now we are all second- guessing, or investors, at least, are all second-guessing what the next path is, is for Europe. After that big, big gain, you're right on the trillion dollar bailout, now there's been second-guessing ever since then. And you've got the Dow back below that level again, Ali.
In fact, the Dow is now negative on the year. And from that 18- month high it hit back in April, it's down 6.2 percent.
VELSHI: Wow.
ROMANS: As you know, 6.2 percent move, I mean, that's something that's real money for people's 401(k)s and for anybody who's invested in the stock market.
Today the Dow down about 54 points. What's the trigger today? Still looking at the euro at a four-year low.
Interesting development out of Germany, Ali. The German banking authorities putting restrictions on something that's called naked short selling. And no, it has nothing to do with shorts or being naked. It has to do everything with keeping speculators from selling things they don't have to bet against the debt of some of these Euro Zone countries and the banks in the Euro Zone countries.
They're trying to limit the speculators who some say the speculators are making it worse in Europe. And then there are others who say it's kind of a chicken and egg, actually. Others who say no, Europe got itself in a whole bunch of hurt because of the way that it budgets -- the way it was spending money it didn't have, and it's the markets who are perceiving that and trading on it.
So that -- that short sale band in Germany actually shook confidence a little bit. Actually having the opposite effect, I think, the German authorities would have liked.
VELSHI: Yes.
ROMANS: And now you've got -- you've got people still saying wow. This is not the European summer vacation many people thought they were going to have this summer.
VELSHI: Yes, this is -- think back to when we...
ROMANS: Watching the euro is their summer vacation.
VELSHI: Think back to when we had that bailout in the United States in 2008, how every little piece of perceived bad news hit the markets. And we're seeing a little bit of that again.
Christine, you're going to be back a little bit later on with a very, very interesting story...
ROMANS: Yes.
VELSHI: ... about the -- the gap in wealth between white families and black families, how it's accelerated and why it's happening.
ROMANS: Sure.
VELSHI: Christine Romans is my co-anchor on "YOUR $$$$$." You can watch it Saturdays at 1 p.m. Eastern or Sundays at 3 p.m. Eastern right here on CNN.
All right. I want to bring you up to speed on some of the top stories that we're following here on CNN.
You paid less for things in April. Government numbers out today. The Consumer Price Index dipped slightly last month. That's inflation. It is up, by the way, about 2 percent compared to last year. It's not too much of a change, which is a good thing, because as long as inflation is under control, the interest rates that you pay can stay low. Don't know how long that will last, but for now, it's a good thing.
In the Gulf of Mexico, oil continues gushing. Scientists are trying to guess where currents are going to take that oil and how much of a catastrophe it's going to be when that oil starts moving out of the Gulf of Mexico. Today they found tar balls that floated ashore in the Florida Keys. Well, they tested those and found out they're not linked to the oil spill.
And at least ten insurgents are dead after attacking the Bagram Air Face in Afghanistan. That, as you may know, is the main U.S. base. Small groups of suicide bombers tried to get inside while others fired rockets, grenades and guns over the walls. The base sustained minor damage. The Taliban has claimed responsibility.
All right. We've got severe storms expected to hit parts of the United States any time now. CNN is tracking them. We'll tell you if you're in the path of those storms when we come back.
(COMMERCIAL BREAK)
VELSHI: OK, I'm here with Chad. We were expecting we were going to have some severe weather in the Midwest. It got a little more serious. We're looking at things getting a little more serious. You can see it on your map here.
CHAD MYERS, CNN METEOROLOGIST: There is an area that we call high risk. We get maybe three or four of these areas a year.
VELSHI: OK.
MYERS: Centered literally all the way across from almost Stillwater, Oklahoma City, back up to Woodward and across all of Oklahoma, basically. This is in Oklahoma City event right here.
And I don't want to start singing, but this is Oklahoma mezzonet (ph).
VELSHI: A what?
MYERS: There are just so many weather stations. There are a hundred or so weather stations in Oklahoma. Because they have so much severe weather, they want to know when everything is going on.
And this is incoming solar radiation. I won't sing, but here comes the sun right here. And the sun is the number here. These are watts per square foot.
VELSHI: Right.
MYERS: Whatever it is. All you need to know is that it's not sunny in Oklahoma City just yet.
VELSHI: Right.
MYERS: So it's cool air. It's going to take a while for severe weather to pop. But when you get this heat with the sunshine, and it's here now, we are going to see a significant severe weather day into parts of Oklahoma City.
VELSHI: All right. When we -- when we talk a little later on, we're going to talk about oil and tar balls...
MYERS: Yes.
VELSHI: ... and where these tar balls come from. We've been trying to have this conversation for a couple of days.
MYERS: And why the ones in Key West weren't from this.
VELSHI: That's right. That's got people very confused. All right. We'll get more on that a little bit later.
Listen, let's take this over to Thailand for a second. There are bodies in the streets. There's chaos; there's fear in Bangkok. This after a powerful Thai army offensive tries to crush weeks of antigovernment protest. A city and a nation in chaos. We'll tell you about it after the break.
(COMMERCIAL BREAK)
VELSHI: Every day we take your around the world in our "Globe Trekking Segment."
Again trouble today in Thailand. We've been reporting on this for a few days. In Bangkok, the capital city of Thailand, the Thai Army has launched a major offensive against antigovernment protester. Bangkok -- observers say it looks like a battleground. Several people have been killed, numerous billing in the heart of the capital are on fire. Protesters, however, are still resisting.
Now we can't bring you a live report because the government has imposed a curfew. But we do have people in Thailand keeping us up to date on what's going on. One of them is our correspondent Dan Rivers. He filed this report, and I have to warn you it contains some graphic images.
(BEGIN VIDEOTAPE)
DAN RIVERS, CNN CORRESPONDENT (voice-over): It's before dawn. Hundreds of soldiers move into position ready for the crackdown the government has been threatening for days.
We watch as squads fan out across Lumphini Park engaging armed protesters on the barricades. The protesters fired back and then set light to the southern barricade, turning the May sky black.
Armored personnel carriers moved in. The bamboo and Thai walls were no match for this military vehicle.
For some seven hours, soldiers fought protesters. Journalists were among those caught in the crossfire. And all around, people who had nothing to do with this protest, cowering in fear.
(on camera): You can see how vulnerable the local residents are here. This family are crouching with us on the roof of their building and the bullets are literally flying right beneath where we are.
(voice-over): During a brief lull we find another resident, a British expatriate.
(on camera): How do you feel towards the protesters? Are you angry with them for causing all of this disruption?
DAVID QUINE, BANGKOK RESIDENT: Yes, I think a lot of people are angry at the disruption, of course, but who is to blame and the complexity of the politics --
(GUNSHOT)
QUINE: -- here is not easy to --
RIVERS: Let's go inside.
QUINE: OK.
RIVERS: You go in.
QUINE: OK. See you then.
RIVERS: Thanks.
QUINE: Bye.
RIVERS: Bye.
(voice-over): This was the aftermath of an M-79 grenade attack by protesters who seriously wounded a soldier and a Canadian cameraman.
Elsewhere, the body of a man. The government brands these hard- line protesters terrorists. While some were captured alive, it's not clear how many escaped.
But after hours of fighting, it was clear the army was unstoppable. And finally, the Red Shirt leadership surrendered.
PANITAN WATTANAYAGORN, GOVERNMENT SPOKESMAN: The areas are now stable. We are still facing with a few in pockets of trouble in several places in Bangkok. We would like to ask for your cooperation to remain in your own household.
RIVERS: As the clear-up began, a nighttime curfew was announced. It became clear the Red Shirts were operating a scorched earth policy, setting more than a dozen buildings ablaze, including Thailand's biggest shopping mall.
The incendiary politics of Thailand have entered a new and grave phase. The government implies ousted Prime Minister Thaksin Shinawatra is to blame for these scenes. Thaksin's denials sound hollow to many in government who fear more violence is about to be unleashed in this British Kingdom.
Dan Rivers, CNN, Bangkok.
(END VIDEOTAPE)
VELSHI: And as I mentioned, our reporters are under curfew but we will continue to get you reports and keep you posted as to what is going on in Thailand.
OK. You can't send a teenager to prison for life unless he or she has killed someone, but you may be able to keep offender in prison indefinitely. Two decisions by the Supreme Court this week, we'll talk about the crimes and the consequences.
(COMMERCIAL BREAK)
VELSHI: Every day here on the show we talk to you about "Crime and Consequence."
Crime is something -- and consequence, that the Supreme Court deals with. We did learn today that hearings for Supreme Court justice nominee Elena Kagan will begin on June 28th.
Meanwhile, the Supreme Court handed down two major rulings this week about sentencing. Let me tell you what I know about this. Juveniles who are sentenced but haven't killed anybody cannot be sentenced to life without parole. Meanwhile, sex offenders can be held after their sentences end.
Very interesting cause one argues for shorter sentences, the other one argues for longer sentences. I don't know what the connection is between the two, but that's why we have senior legal analyst Jeff Toobin joining us now to give us a little more sense of what this means.
Jeff, welcome to the show. You there? There you are.
JEFFREY TOOBIN, CNN SENIOR LEGAL ANALYST: Hi, Ali, yes.
VELSHI: OK, first of all, are these two rulings connected, because they sort of seem to send a different message?
TOOBIN: They're not really connected. They are decided under different provisions of the Constitution. But these are areas that the court always struggles with. Both of these decisions were divided decisions, with major dissenting opinions. It is true that the court is contradictory, although in this case, I don't think there's a direct contradiction.
VELSHI: OK. So let's start with this business about juvenile sentences. If a juvenile is sentenced in a case where they've killed someone, they can get a life sentence without parole. But other than that -- is that the change, that if they have not been convicted of murdering someone they can't be sentenced to life without parole?
TOOBIN: Right. This is part of a series of cases that the court has been dealing with over the past decade about how juveniles can be treated in regular criminal courts.
Earlier, Anthony Kennedy had written an opinion that said juvenile offenders, people who commit murder before the age of 18, cannot get the death penalty. This case expanded on that decision and it said, if an individual is convicted of any crime short of murder, they can't get life without parole. That's what today -- earlier this week's decision was.
VELSHI: And the thinking behind that?
TOOBIN: Well, the thinking is that juveniles are less responsible for their actions. There is more hope of rehabilitation with juveniles. We offer them a little more consideration, a little more hope for the future than we treat adult offenders. So we are going to impose slightly stricter requirements in terms of how badly the system can treat them. You can't execute them and you can't hold them for life if they didn't commit a murder.
VELSHI: Now, here's the interesting part. The other ruling, the other decision about sex offenders being able to be held indefinitely, beyond their sentence. So if they're sentenced to X-number of years, how does this work? They can just be -- they can be kept in prison?
TOOBIN Well, you know, this is, again, an attempt by Congress. Congress changed the law not too long ago and said, look, sex offenders, particularly sex offenders of children, are such a problem in our society, are so dangerous, are so prone to recidivism, that we are going to set up a system that rather than just release them when their sentences expires, the government can go back into court and argue that this person is still dangerous, that they are not rehabilitated enough and can be held.
And the government -- and the Supreme Court this week said, this week, that procedure, that law is constitutional. It's not a violation of the sex offender's rights.
VELSHI: Where would this be practiced? Have you seen instances where someone has tried to keep a sex offender kept in prison? Who would make that decision?
TOOBIN: It would be back in federal district court. It would probably be in front of the very same judge who held the trial.
It's a relatively new law, so it hasn't been in effect. It was challenged by five individuals the government was trying to hold after their sentence. But it's just a handful of people whose cases have come up so far.
But now, it's going to be up to the government every time a sex offender is coming up for release to decide whether to allow the release to proceed or to have this procedure where they try to persuade a judge to hold him even though the sentence has been completed.
VELSHI: Jeff, thanks very much for clearing these up for us.
Jeff Toobin is our senior legal analyst.
TOOBIN: OK, Ali.
VELSHI: Buildings that are built into the earth to save on energy. They give a whole new means to the word green. Wait until you see the pictures of this building I'm going to show you on the other side.
(COMMERCIAL BREAK)
VELSHI: Every day I bring you "The Big 'I'," big ideas that could change the way you live. A lot of them have to do with science and technology and obviously one of the big themes of the future is going to be kinder to the environment.
I want to show you two green buildings under development. These ones are really neat. All sorts of neat green buildings, but these ones are interesting. This one is called -- bear with me, as I pronounce these -- Auditorium Ciutat d'Elx -- I have no idea how this is pronounced. It's in Elche, Spain. Let me just tell you what this is all about.
So it is a big thing like a wedge that comes out of the earth. There you go -- you can see it. It's a wedge a comes out of the Earth. The top of it and the sides has greenery and grass and things like that. It's an auditorium on the inside. Now, it sinks into the ground so you can also use the top area of it for concerts. The front of the building is grass and trees. In the winter, the windows that are around it will let light and heat into the building. You can see those windows along the side. In the summer, the shades are drawn to keep it cool inside. It's got a geothermal cooling system. It gets the heat and energy from inside the earth. Nifty thing. Auditorium on the inside or use the topside for concerts.
Now that's the one in Spain, let me take you to another one called volcano Buono, which means "good volcano" in Italian. This is in Nola, Italy, inspired, they say, by Mount Vesuvius. Check it out, it's sort of a big thing with a center of it. Now, you'll see these are all renderings, this is what it's going to look like. This outside area is a theater, market, and a sloping pine forest. You can sort of see it on the edges there. It's a whole forest that slopes toward the ground. Inside has shops, a supermarket, a movie theater, restaurants and a hotel. So it's taking this idea of green buildings which use -- which is greenery, actual greenery, shrubs, trees and grass on the outside of the buildings, combing them with bases you can work in or in these cases shop or get entertainment in.
Very interesting idea. That's our "Big 'I' Segment" for today.
Now, we all know the American dream, right? If you work hard and you play by the rules, generally speaking, you will build a better life for your children and hopefully, their children. But for a lot of black families, that dream is out of reach and we're going to find out why when we come back.
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VELSHI: OK. Work hard, invest your money and you'll build your wealth. That's the way the American dream is supposed to work. But a new study from Brandeis University suggests it doesn't work very well for African-Americans.
Instead of focusing on income, this study focused on wealth accumulation. The money and prosperity that you acquire minus what you owe. It's what allows people to buy homes and start businesses and send their kids to college. The study compared the wealth accumulated by white families, with the wealth accumulated by African- American families and found that the wealth gap -- the difference between them -- has increased over the last quarter century four fold.
CNN's Christine Romans has been looking at the figures. Tom Shapiro is one of the study's authors. He's from Brandeis University. Welcome to both of you.
Christine, let's kick it off. Tell us a bit more about this study.
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Basically what the researchers found, Ali, that by 2007, the average white family had $95,000 more in wealth than the average black family.
You're absolutely right that wealth is what you own, minus what you owe. And when you look back at to 1984, when they started following this particular cohort, this particular group, you could see in 1984, that gap between black and white was $20,000. And over the course of that generation it has grown and grown and grown disproportionately, quite frankly, to the point where you can't see the graphic, I guess it's not up. There you go. To see, in 2007 that difference was 95,000.
Now, from 1984 to 2007 African-American families doubled their debt. One in ten owed $3,600. At least a quarter of African-American families had no assets whatsoever. In fact, the study found, Ali, that high-income African-Americans accumulated less than middle-income white families.
VELSHI: Wow.
ROMANS: And it goes on to point out a host of reasons including discrimination, including a deregulation of lending that actually in the end hurt -- hurt African-American families, but it poses an awful lot of economic and policy questions for policymakers going forward, if you have such a disproportionate gap as you're trying to come into a recovery here, Ali.
VELSHI: All right, let's bring tom Shapiro. Professor Shapiro is at Brandeis University. He's one of the authors of The Wealth Gap Report. I should point out, by the way, this was done until 2007, before the current recession that we're in, so we don't know what the effect of the recession has been. It could have been disproportionate, it could have made that wealth gap worse.
Dr. Shapiro, Professor Shapiro, what are the implications of this? Tell me what this leads to.
PROF. TOM SHAPIRO, PROFESSOR OF LAW AND SOCIAL POLICY, BRANDEIS UNIVERSITY: I think there are a number implications. One is that what the data demonstrates is what I could call a broken chain of achievement, especially if we're looking at high-income African- American families in 1984, and their inability really to gain much traction in terms of financial assets or wealth over a generation, over the 23 years.
And let's remember, that this is a group of high-achieving, high- earning African-Americans. In many ways it's the best-case scenario. And they lose touch with their comparable group. VELSHI: Are they doing worse off or are whites doing better? What's the root cause of this?
SHAPIRO: Well, I think there are a number of drivers. One is the old saw, which is actually accurate here, that wealth begets wealth.
So, what the data tell us is that in 1984, that high-earning white family on average had about $68,000 in wealth, compared to the $25,000 for the high-earning African-American family. And that's a big difference to start with. And those are financial tools and stocks and bonds and potentially businesses that in turn create more wealth for those higher-earning families. Much more so for the white families than the African-American families.
VELSHI: Christine, let me ask you something. You mentioned the fact that credit rates -- it has been in many cases more expensive for African-American families to borrow money and that --
ROMANS: Right.
VELSHI: -- has over time eroded wealth. I mean, this is something you're now seeing with this credit card stuff where you look at how long it takes you to pay if you pay the minimum payments. The bottom line is just a little difference in what you pay on your mortgage or your car loan can make all the difference in wealth creation in the end.
ROMANS: Oh, absolutely. You actually saw not only some people being steered into products that were higher mortgage rates and less terms or higher interest rates and less terms. But there have been numerous studies that have shown that African-Americans were actually targeted for some of these products when they could have qualified for products for much lower interest rates. So that saps their wealth.
One thing that I think is fascinating, Ali, that Professor Shapiro points out in here is that gap in 1984, was basically the equivalent of three years of college for one kid. That gap, by the time you're talking about 2007, it's full tuition at a four-year public university for two children.
VELSHI: Wow. OK.
ROMANS: Wealth is important because it's money that you could invest in your future.
VELSHI: Very interesting point.
Professor Shapiro, let's go back to it. You said, wealth begets wealth. So now you're taking away -- I mean, look, one of the biggest challenges we have now is the cost of education. This can have a multiplier effect because if you're taking away the ability to send your kids to college, that could have implications for further generations.
SHAPIRO: That's correct. I think the point here is that if you are fortunate enough to come from a family that has some financial assets, the chances are that your adult children who go through college, then, are going to end up with a degree and not have $120,000 loan that they're starting to pay back. Which is much more likely to be the case for all families, not just African-Americans, but whites, as well, that don't come from those well-off families.
So it's a difference between starting that first paycheck and having to pay $300 in student loans, versus, not having to pay that.
VELSHI: Yes. Big important difference. Thank you for the study. Professor Tom Shapiro, one of the authors of the Wealth Gap Report from Brandeis University. And, of course, my co-anchor Christine Romans.
SHAPIRO: Thank you.
VELSHI: You can watch us every day seven days a week, including on the weekend. Saturdays at 1:00 p.m. and Sundays at 3:00 p.m.
Listen, we need to find solutions to these wealth gaps. For some people it might be right in your own hands. We're going to talk about starting your own business, next.
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VELSHI: All right. We just had a great conversation about the wealth gap between African-American families and white families.
This week we happen to be part of an aspiring entrepreneurs conference here. A lot of them are gathering in Atlanta for the Black Enterprise Entrepreneurs' Conference. One of the main goals of that conference is to help black business owners survive during tough economic times. And a lot of the reason why people want to run businesses is so that they can provide better for their families.
Felicia joy is with me now. She's an entrepreneur, she's a business coach. You're from here. You live in Atlanta. But you've been at the conference, as well.
FELICIA JOY, ENTREPRENEUR/BUSINESS COACH: Yes, I live in Atlanta and I've been at the conference for the last few days.
VELSHI: All right. So, listen. You heard the conversation we were just having about this gap in accumulated wealth. This is the reason that people start businesses. To try and accumulate some wealth, pass it on, keep it for their families. One of the things that the professor who co-authored the study said is that wealth begets wealth.
What we're doing is we're starting with a low base with a lot of African-American families. So they've got to make up, they've got to get ahead of that. They've got to get ahead of their debt and get into a place where they're building wealth.
What's the best way to do that? JOY: Business ownership, absolutely. Wealth does beget wealth, but I think of wealth of knowledge can take you to a wealth in terms of finances. That begins building the business with the knowledge that you have, which is why I'm encouraging people to become hybrid entrepreneurs which when you have a full-time job and a part-time business on the side.
VELSHI: What kind of businesses lend themselves to being a hybrid entrepreneur? Because so many small businesses take up so much more of your time than a full-time job does.
What are the things that you can have a job and create a business on the side?
JOY: I think service businesses are absolutely phenomenal as hybrid businesses. But really, any business can work if you have the right team. Get other people to work with you and really make sure you have a plan getting out of the gate.
VELSHI: a lot of people want to start businesses. They've heard that the end of the recession is a great time to start a business. There are all sorts of opportunities. Costs to rent places are lower, interest rates are low.
Where do you get the information to take the first step to run a business? Because it's intimidating.
JOY: There are so many sources and right now there are a lot of free classes online for entrepreneurs. You can go through the Small Business Administration. On my web site, feliciajoy.bis (ph), I list resources for people to go and find out how to get free information to start a business.
VELSHI: All right. One of the biggest things with starting small business these days is access to credit. So, money's cheap but you can't get it that easily. You mentioned the Small Business Administration. They will often back a loan that you take from a bank, they'll stand behind it.
Generally speaking what's the best way to finance the small business?
JOY: Like you said, you can take loans. But also, I'm encouraging people -- in my book, I explain to use creative means of financing your business. There are web sites now like, prosper.com, where everyday Americans can lend to one another. "Forbes" magazine says that we spend $40,000 average per household every year. I'm encouraging people to take some of that money, 10 percent, $4,000, and invest it in other people's businesses. Help your community get off the ground.
VELSHI: All right. What's the -- the thing you have to contend with starting a business is some degree of failure. I mean, the reality is, it's part of doing business. A lot of very successful business people do fail.
How do you equip people for that? Because right now we're all a little risk averse. Having come through this recession, I don't want to do something that's going to cost me money but starting a business could cost you in the beginning.
JOY: Right. You really have to define failure because to me, failure is when you quit. If you fall down, you pick yourself back up and you figure out how to move forward. Also, Ali, entrepreneurship is not quite as risky as it used to be because a lot of people have done it now. There are clues out there. There's information out there to help you not make the same mistakes as other people.
VELSHI: And not reinvent the wheel.
So a little bit of studying on this really makes a difference. There are great books. There are great web sites. But you're absolutely right. Every time we talk to a small business owner where something has failed, it's failed for the same reason someone else failed.
JOY: Exactly.
VELSHI: So learn that lesson.
JOY: And you can figure out what makes those succeed, succeed so you can do the same thing.
VELSHI: This is a great gathering you're having in Atlanta. What's the mood there amongst African-American entrepreneurs?
JOY: Phenomenal. The energy was amazing. This is absolutely one of the best conferences I've ever been to. People are motivated despite the economy. People are ready to get back out here and make it happen for themselves and their families.
VELSHI: Great. Thanks for being there and helping them out. I appreciate it.
JOY: Thank you.
VELSHI: Felicia Joy is an entrepreneur and a business coach.
