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Hurricane May Touch on East Coast; Obama Speaks to Nation about Economy; Fixing America's Schools; Arne Duncan's Education Bus Tour;
Aired August 30, 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: Good times today. Let's get you to the man, Ali Velshi, and CNN NEWSROOM continues right now.
ALI VELSHI, CNN ANCHOR: That was way too much fun. We need to spend more time together, Tony. You have a fantastic afternoon.
As Tony says, I'm Ali Velshi. Think of me as your news guide. We're mapping out the important information of today and tomorrow. We're going to break down ideas, and we're going to seek out innovation. We're about access and understanding, and let's get started, because there's a lot to get access to and a lot to understand.
Here's what I've got on the rundown. Hurricane Earl might have its sights set on the East Coast and on Labor Day weekend. We don't know exactly where the storm will go, but as you know, Chad is on it, and it's getting stronger by the minute.
Plus, fix our schools. We're dedicating CNN's resource to those three words this week, but we are not just going to show you what's broken. We're going to talk about solutions, as we do all the time on this show in "Chalk Talk."
And Chile starting a long and pain-staking effort today to save those 33 trapped miners. It's going to take a lot of planning, a lot of expertise, a lot of patience, and unfortunately, a whole lot of time.
But first, everybody is talking about the economy. It seems to be that when you pick up a newspaper or a magazine, there's a lot of concern about a double-dip recession, a very slow recovery. So the president now coming out and tackling issue No. 1.
After a lot of criticism that the administration has not been out in front of that, which is concerning so many Americans, President Obama, we are awaiting comments from him live from the Rose Garden. After today's weekly economic briefing, a decision was made that the president would come out and talk to the nation about it.
We have no idea how long it will take. We have no idea how long he'll speak for or what he'll speak on. I would suspect, however, that what the president is going to do is send some sort of message that the administration understands how concerned people are.
Latest polling by CNN and the Opinion Research Corporation shows that the majority of Americans are very, very concerned about the economy right now, and a lot of people are talking about a double-dip recession.
I want to talk to my control room here, and ask if I should have a conversation with my guests right now. Let me do that while we wait for the president. If the president comes out, we'll go right to him.
But with me to hear the president speaking, Richard Quest, host of "Quest Means Business" on CNN International, and Chrystia Freeland, Reuters global editor at large, two good friends of our show.
Richard and Chrystia, thank you so much for being here.
Chrystia, you and I have been discussing this almost daily, and that is this concern that so many people have that this economy, after appearing to be on the road to recovery, started sputtering again. What does the administration -- what can the administration say that can help the situation?
CHRYSTIA FREELAND, EDITOR AT LARGE, REUTERS: Well, I think that's obviously an excellent question, Ali. I think that one thing that the administration can do, and I hope the president will do that, is acknowledge the severity of the problem.
You know, I think with hindsight, the whole notion of Recovery Summer, which we saw rolled out over the past couple of months, was really ill-conceived and didn't play well. Because you can have a great slogan, but if people know from their daily lives that it's just not true, that's not going to work.
So I think that there 's a very fine line the president has to tread today. He has to not make us all really depressed, because then, you know, we'll go home, we won't spend money. If we own a business, we won't hire people. But at the same time, I think he has to really honestly say, "The economy, the U.S. economy, the world economy, is in a really difficult situation. No one has a magic solution. But I'm taking it really seriously."
VELSHI: Richard, let me ask you this. The -- part of the concern here is that there are a number of people saying that if consumers are not stepping up and spending, if businesses, who, by the way, have some cash are not going out and spending, the government may have to continue spending, i.e., more stimulus. And that is not politically palatable right now.
And where you are in London, the British government has been very clear about the fact that the day of government spending to -- to take up slack is over. So there's a real -- there's a real issue there.
RICHARD QUEST, CNN INTERNATIONAL ANCHOR: The issue is really very clear-cut in the U.K. and in France and other European countries. And not only has the stimulus packages worn down, but the governments are now embarked on massive austerity measures, including, of course, the U.K., which is having a spending review.
If you take the U.S. position, Ali, and I heard you talking about it earlier, there really are only two options. You know, the government spends more, or the Fed does more quantitative easing. There isn't a lot of middle ground in the middle to negotiate over with that ground.
And the other thing to bear in mind, as Ben Bernanke said on Friday, this is now a question of confidence. They have so frightened everybody about what might or may or will happen, that people have just stopped spending...
VELSHI: Right. That's a very good point. Yes.
QUEST: ... on both sides of the Atlantic. And that's the big issue.
VELSHI: And Bernanke spoke on -- he spoke on Friday, and he said that, you know, consumers, Chrystia, holding 6 percent savings in the United States, almost an unheard of sum in recent years.
Businesses, large businesses, have cash. They're not deploying it, because they're concerned that there isn't demand. So why build the factory, why hire all sorts of people if people won't buy? It's become a chicken and the egg situation.
QUEST: Yes.
FREELAND: I think that's true. But I think particularly with the consumers, what we do have to remember is U.S. consumers for a decade have been spending more than they were earning. And so they are really in a deep hole.
That has been exacerbated by the fact that people's houses aren't worth as much as they thought. And a year of savings is not going to get people's -- it's not going to get people's domestic finances out of that hole. So actually, consumer behavior is really rational and in the medium term, really healthy.
VELSHI: Right. That's the problem, isn't it, Richard? It's rational consumers are actually doing the right thing. They're not being irresponsible, and it's grinding our economy to a halt.
QUEST: In economic speak, consumers are deleveraging, and Bernanke talked about that, as well. That is the plus side of it.
The reality is, on both sides of the Atlantic, look, we have had the most dramatic and drastic surgery done on the global economy, particularly the transatlantic economy. It is unreasonable to expect that we're going to be roaring off to the races again. What we are seeing is a long, slow painful recovery.
Now, this is to be expected. Unfortunately, like making -- like any form of recovery, it's very painful, as you're going through it. And unfortunately, again, I'm coming up with lots of "unfortunately"s today, Ali.
VELSHI: Yes.
QUEST: There is very little wiggle room for state, for federal, for local and for monetary policy...
VELSHI: And...
QUEST: ... to actually make things move faster.
VELSHI: And in politics, because we're headed into a midterm election here. Let me show you...
QUEST: Absolutely.
VELSHI: I must have shown this thing several times in the last week or so, but it's a fairly new poll from the CNN/Opinion Research Corporation, ranking how things are important.
Chrystia, you have been involved with our coverage, which we call "Issue No. 1" on CNN for years, because for coming onto three years now, the economy has been the No. 1 issue for Americans.
Heading into this midterm -- look at that, economy, 56 percent, unemployment, 48 percent. Deficit, 48 percent. Terrorism, ties at 48 percent. The reality is that something has to be done about this. And there does seem to be some craving that this administration owns that a little bit. If you ask me, Chrystia, there's been a whole lot of attack on what this administration is or is not doing right. But I'm not hearing the pushback from them.
FREELAND: Yes, well, and I think that's why it's really important to have the president speak today.
I do think also there is a big ideological question, which he has to come out on. And your survey points to that, which is, you know, is he -- is the U.S. going to go for one more round of stimulus, or are they going to go the European route and go straight into austerity?
The one, you know -- Richard was talking about how he's saying a lot of "unfortunately"s. I will say one sunny thing from the American perspective, which is America does have more wiggle room than any other country in the western industrialized world right now, because the American dollar is the reserve currency. And people are rightly concerned about deficits in the medium term.
In the short term, though, the world can't get enough U.S. bonds. The world can't get enough U.S. debt. So there is some wiggle room, and I think the big issue for the president is, does he believe he will get enough bang from an extra stimulus...
VELSHI: Right.
FREELAND: ... to be worth what looks like the politics...
VELSHI: Yes.
FREELAND ... around more government spending is negative.
VELSHI: And the economic bang out of something like that never materializes fast enough for the -- for the political needs that they have.
All right. Both of you just stay there for a second. And by the way, we'll come back and talk more about this when we hear the president speak. But it's not all bad news out there. We'll show you some things that are going on that actually are reason for some hope about this economy.
We're going to take a quick break. We're watching. See that bottom corner of your screen? Watching very closely. When the president comes out to speak, we'll be on it. Chrystia and Richard will be with me. We've also got a lot of other news today. So stay with us. We're coming right back.
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VELSHI: Hey, we're going to stay on the -- we're still waiting for the president to come out and speak. And we're going to talk to Richard and Chrystia when he does. Going to talk about the economy.
But another big story that we're following right now is the weather. Chad is on top of that story, because this -- this hurricane looks like it could skirt the East Coast.
CHAD MYERS, CNN METEOROLOGIST: It refuses to make the right-hand turn.
VELSHI: Right.
MYERS: We saw this on Friday. You know what? Every new model run, and we think that the newest model run should be the most accurate.
VELSHI: Right.
MYERS: Because it has the most new info.
VELSHI: Sure.
MYERS: Right? All the models last week had it turning way over here and up the sea.
VELSHI: Right. We talked about maybe Newfoundland.
MYERS: Yes. It didn't do that. And you know what? Models don't know what the computer -- this hurricane is going to do.
VELSHI: What they're thinking, yes.
MYERS: The hurricane doesn't know what the models are saying.
VELSHI: Right.
MYERS: So it's saying, "The heck with you." This thing has continued just really, basically, right off toward the west-northwest. And under here, that would be the British Virgin Islands, and then part of the Barbuda and Antigua area here, and then that right there, that is San Juan, Puerto Rico.
VELSHI: Wow.
MYERS: And the winds around the middle of that, 125 miles per hour. Here's kind of a representation from San Juan.
VELSHI: Wow.
MYERS: So that would be s San Juan right there. Here's the Puerto Rico radar. And even a tornado warning for parts of western Puerto Rico here, but that's -- we're not worried so much about that.
VELSHI: Right. Yes.
MYERS: We're worried about -- look at the size of the eye here.
VELSHI: Yes, but we're still looking at -- it still looks like the eye is going to skirt Puerto Rico?
MYERS: It's still going to miss Puerto Rico.
VELSHI: Good.
MYERS: I do not see it hitting Puerto Rico whatsoever. But the issue here is...
VELSHI: Right, right, right.
MYERS: ... from Storm Pulse. You look at this all the time, because they can put all of the models...
VELSHI: Right.
MYERS: ... on one map.
VELSHI: Right.
MYERS: And although every one misses so far...
VELSHI: Good.
MYERS: .... that little -- we'll call it the cone...
VELSHI: Right.
MYERS: ... still clips the U.S.
VELSHI: So Boston, New York, Philly?
MYERS: So here's New York. There's Cape -- and Cape Hatteras sticks out there all the time...
VELSHI: That's right.
MYERS: ... and maybe saying, "Hit me, hit me, hit me."
VELSHI: Yes.
MYERS; And so it's going to be pretty close. We're going to watch it.
VELSHI: All right. We'll stay on top of this, as you always do. Thanks very much, Chad.
We're waiting on the president. He has decided at the last minute he's going to come out and talk about the economy, because everybody is so worried about it. We've got full coverage. Stay with us.
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VELSHI: We're waiting on the president. There's a picture of the Rose Garden. This is supposed to be 12:30. Then it was 12:50. Then it was 1 p.m. Now it's 1:15, 1:16. We still haven't heard from the president yet.
They have a weekly economic briefing in the White House on Mondays, and -- well, you know what? I'm told there's the president right now. You can see him. Let's listen in to what the president has to say, and then we'll talk about it a little bit on the other side.
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Good afternoon, everybody. I just finished a meeting with my economic team about the current state of our economy. And some of additional steps that we should take to move forward.
It's been nearly two years since that terrible September when our economy teetered on the brink of collapse. And at the time, no one knew just how deep the recession would go, or the havoc that it would wreck [SIC] on families and businesses across this country. What we did know was that it took nearly a decade -- what we -- how are we doing on sound, guys? Is it still going to the press? OK.
What we did know was that it was going to take nearly a decade in order -- can you guys still hear us? OK. Let me try this one more time.
What we did know was that it took nearly a decade to dig the hole that we're in, and that it would take longer than any of us would like to climb our way out. And while we have taken a series of measures and come a long way since then, the fact is that too many businesses are still struggling, too many Americans are still looking for work, and too many communities are far from being whole again.
And that's why my administration remains focused. Every single day, I'm pushing this economy forward, repairing the damage that's been done to the middle class over the past decade, and promoting the growth we need to get our people back to work.
So as Congress prepares to return to session, my economic team is hard at work in identifying additional measures that could make a difference in both promoting growth and hiring in the short term, and increasing our economy's competiveness in the long term.
Steps like extending the tax cuts for the middle class that are set to expire this year; redoubling our investment in clean energy and R&D; rebuilding more of our infrastructure for the future; further tax cuts to encourage businesses to put their capital to work creating jobs here in the United States. And I'll be addressing these proposals in further detail in days and weeks to come.
In the meantime, there's one thing we know we should do, something that should be Congress's first order of business when it gets back. And that is making it easier for our small businesses to grow and hire.
We know that, in the final few months of last year, small businesses accounted for more than 60 percent of the job losses in America. That's why we passed eight different tax cuts for small businesses and worked to expand credit for them. But we have to do more.
And there's currently a jobs bill before Congress that would do two big things for small business owners: cut more taxes and make available more loans. It would help them get the credit they need and eliminate capital gains taxes on key investments so they have more incentive to invest right now. And it would accelerate $55 billion of tax relief to encourage American businesses, small and large, to expand their investments over the next 14 months.
Unfortunately, this bill has been languishing in the Senate for months, held up by a partisan minority that won't even allow it to go to a vote. That makes no sense. This bill is fully paid for. It will not add to the deficit. And there is no reason to block it besides pure partisan politics.
The small business owners and the communities that rely on them, they don't have time for political games. They shouldn't have to wait any longer. In fact, just this morning, a story showed that small businesses have put hiring and expanding on hold while waiting for the Senate to act on this bill. Simply put, holding this bill hostage is directly detrimental to our economic growth. So I ask Senate Republicans to drop the blockade. I know we're entering election season, but the people who sent us here expect us to work together to get things done and improve this economy.
And no single step is the silver bullet that will reverse the damage done by the bubble and bust cycles that caused our economy into this slide. It's going to take a full-scale effort. A full-scale attack that not only helps in the short-term, but builds a firmer foundation that makes our nation stronger for the long haul.
But this step will benefit small-business owners and our economy right away. That's why it's got to get done.
There's no doubt we still face serious challenges. But if we rise above the politics of the moment to summon an equal seriousness of purpose, I'm absolutely confident that we will meet them. I've got confidence in the American economy, and most importantly, I've got confidence in the American people. We've just got to start working together to get this done. Thank you very much.
VELSHI: OK. President of the United States making an unscheduled or -- it was unscheduled until this morning, an unscheduled set of remarks about the economy. Maybe answering a growing concern that we have been talking about in the last couple of weeks about the possibility of a double-dip recession.
Let me just tell you something of what he said, and I want to go back to Friday, where the Fed chairman, Ben Bernanke, made some comments. Ben Bernanke said that businesses are spending on some things. They're buying computers. They're buying equipment. They're just not hiring people right now.
The energy industry is actually expanding. They're building things. But the rest of the economic world isn't.
Here's the interesting thing, though. This is what President Obama just talked about. Big businesses, represented by the big building on the left. Big businesses can get credit. They don't have to go to banks for it. They have a different system through which they get credit. They're not spending the money that they've got, but they're actually, in most cases, hoarding some cash, waiting to see what happens next. There are some mergers and acquisitions going on.
But on the right, small businesses. Small businesses have to borrow money from the bank the way we do. And that is not happening that effectively. That is part of what the president was just talking about, indicating that there is a bill before the Senate that will allow small businesses access to more money through a tax change, not through the banks.
But when it comes down to it, small businesses are the entity in this country that hire workers and grow the economy. And that's where this stoppage is in many cases.
I want to go back to my guests. Chrystia Freeland is the global editor at large at Reuters. Richard Quest is the host of "Quest Means Business" on CNN International.
Chrystia, let me start with you. It seemed a little light. It seemed a little bit about politics. It did not have that sense of, OK, the whole country is talking about a double-dip recession, and here's how we're coming out to fight it.
FREELAND: No kidding, Ali. I mean, you know, this was unscheduled until this morning. I think people are getting incredibly terrified about the economy.
And the president comes out and says, "I really want the Senate and Congress to pass this bill on tax breaks for small business." It's incredibly underwhelming, and that was a political statement, not an economic statement.
Small business is sort of milk and motherhood and apple pie. Everyone is in favor of it.
VELSHI: Sure.
FREELAND: No sensible political person is against helping small business. But no sensible person is going to believe that measure is going to be enough to fix the economy.
VELSHI: Richard, what's your sense of it? Because I think Chrystia put her finger on something. The last few days, maybe the last couple of weeks, there has been some momentum growing about concerns about the economy. And I think some of it's a little overstated, but the reality is, it's permeating the populus.
From your perspective, a global business perspective, from the other side of the pond, does America look like it's on this precipice of a double-dip recession as I heard -- I heard an economist say this morning?
The United States, from this vantage point of 3,500 miles across an ocean, looks as if you are careening down a slalom slope back towards recession. Now, whether that's justified or not, the academics can argue until -- until kingdom come.
Alan Greenspan calls it a quasi recession. Ben Bernanke says he'll only move a farther trigger of his nonconventional activities when there is a deterioration -- a significant deterioration.
But I was writing down the president's comments as he says -- he talks about wanting to go for additional measures. And then goes into a whole obscure list, except for extending the middle-class tax cut. He then says there are serious -- he wants a full-scale attack, but he doesn't tell us what the ammunition for that attack is going to be. And serious charges to rise above the politics of the moment.
So Chrystia is right. It was a political statement we heard.
VELSHI: Yes.
QUEST: If the markets were looking for something concrete, I think they're going to be very disappointed.
VELSHI: Well, in fact, and the Dow is down further than it was when we started this discussion.
Chrystia, this has been growing for a few weeks, but it's going to hit fever pitch on Friday, because we get the mother of all reports, and that is the unemployment report for August, and it is going to indicate that we have lost jobs yet again. The unemployment rate of 9.5 percent might actually go up.
Ultimately, this is a massive problem, because a year ago it was stimulus. The government said that's going to change. The unemployment rate is going to go down. There is evidence that jobs have been created by stimulus. In fact, some economists say possibly 3 million jobs. Why does this feel so bad, and how does Barack Obama and team address it?
FREELAND: Well, because even though jobs were created, it wasn't enough. And 10 percent -- close to 10 percent unemployment is really dreadful, more painful in the United States than in any other industrialized economy, because the social safety net is so slight.
I think that the president and his economic team need right now to really take stock again, and they need to decide if they are going to push for some fresh, new measures to get the economy going again.
I think the hope had been at the start of the summer, that they were going to sort of muddle through, period. And if they just sort of hung on, the economy would heal itself. I think there's a lot of evidence that that healing is happening too slowly. And there's a risk that, you know, to use -- continue the health metaphor, the patient will get sick again.
I think they need to talk seriously about more stimulus, and something that we haven't discussed, which is the whole global context. Because what still hasn't been resolved is, the whole world economy prior to the financial crisis basically was powered by the U.S. consumer.
VELSHI: Yes.
FREELAND: Well, the U.S. consumer is broke. And so the world economy has to find a different sort of engine.
VELSHI: All right. Thank you to you both. Chrystia Freeland, Reuters global editor at large. Richard Quest, always a pleasure to see you. CNN's "Quest Means Business." We'll talk to you both later on. Thanks very much.
All right. Our goal on this show, as you know, is to get your kids a better education. All this week, we're going to look at different ways to fix our schools. We're hitting the road with Education Secretary Arne Duncan on the other side of this break.
(COMMERCIAL BREAK)
VELSHI: Fix our schools. Those three words will drive much of what you see on CNN this week, because as America's children return to school, CNN has a mission. We've sent reporting teams across the country to document the education crisis in America. Most importantly, we're going to shine a light on success stories that can empower us to offer our children much more than they're getting now.
Let's take a closer look at the problem. The education crisis is a much bigger issue than you might realize. 7,000 people drop out a day. 7,000 students a day. That's one dropout every 26 seconds in America. Why do you care about this? Because it plays right into our economy, the situation we've just been discussing. Dropouts are much more likely to be unemployed, in fact, twice as likely as the rest of the population.
Where we once excelled in education, we are now struggling to keep pace with the international community. On the latest standardized global test, American teens placed 17th in science, 24th in math, and that's out of 30. So consider this a wakeup call. It's time to fix our schools.
Right now, the Education Secretary Arne Duncan is taking this to the streets. He's on a bus tour, visiting schools, talking to teachers, and meeting with parents and students.
CNN's Graham Flanagan is on board the Courage in the Classroom bus. He joins us on the phone now
Graham, where are you at?
GRAHAM FLANAGAN, CNN PRODUCER: Ali, how are you doing? We are in between Albany, New York, heading to Springfield, Massachusetts currently.
VELSHI: And what's going on? What is happening on this tour?
FLANAGAN: Well, we started in Albany this morning at an event where Arne Duncan, along the governor of New York, David Paterson commemorated New York's success as being one of the 10 schools to win in this race to the top competition which awards a lot of grant money to states that are willing to change their systems around in order to promote reform.
VELSHI: And we've talked a lot on this show about the race for the top program. What does the education secretary getting on this bus and going into different communities do for anybody? Is he meeting teachers, is he meeting educators?
What's going on, on the trip itself?
FLANAGAN: That's correct. We just left an event in Latheham, New York, outside of Albany, where he participated in a roundtable discussion with a number of teachers and various administrators and representatives of teachers' unions, just trying to get out there, do some outreach, hear what they have to say and then get back to work.
As a matter of fact, we're on the bus right now, the secretary had to step away from the press gaggle to take care of business, get on the phone, catch up on whatever he has to do.
So one of the main things that struck me so far this morning, like you said in your intro, talking about the dropout rate, which he said was 25 percent. 25 percent of the students in the United States are dropping out. And actually, we have a little sound from the event in New York this morning where he stresses this problem.
VELSHI: Let's play that.
BVC
ARNE DUNCAN, U.S. SECRETARY OF EDUCATION: We have to do a much better job of giving every single job a chance to fulfill their true academic and social potential. There are no good jobs out there for high school dropouts. None. There are almost no good jobs out there for someone just with a high school diploma. Some form of higher education, four-year universities, two-year community colleges, trade, technical, vocational training, that has to be the goal for every single child in this country.
EVC
FLANAGAN: Now, Ali, he said this twice today at two of the events. He said that this dropout rate is not economically sustainable for the United States. And I mean, you're the expert here, you could speak to this better than I could. That if this continues, it's going to hurt America economically in the long run.
VELSHI: Is there some sense -- and it is true - I mean dropping out of high school really puts you at such a massive disadvantage in terms of getting a job and that puts the nation at a disadvantage.
Is there some sense, Graham, that something is happening? In other words, in these conversations is he garnering suggestions from people?
FLANAGAN: He is. It's a lot of listening, because obviously there's a laundry list of problems that are affecting the system at large. So far it's just been a lot listening.
A lot of people are happy with this Race to the Top program. They like what it's doing, they like that it's motivating people to get better now instead of just sitting around and talking about it.
One thing I really want to drill down on if we continue the tour is another thing you mentioned, how we've fallen behind in the worldwide rankings. Why nations like Finland and China are ranking number one in math and science but yet we're still lagging behind.
VELSHI: Yes, I do drill down on that. We'll talk about it some more.
Some people are making the argument because those countries are actually doing better relative to us, meaning that they had some room to grow. But it's an interesting topic.
Graham, good to talk to you. Graham Flanagan, producer with CNN on the road with Secretary Arne Duncan.
Be sure to join us next hour. Our commitment to education continues with Fix our Schools. I'll be talking to superstar Mary J. Blige. She's working on a new venture to get girls more interested in math and science. Coming up, 2:00 p.m. Eastern, right here on this show.
The U.S. formally ends combat operations in Iraq this week. But does that mean an end to the violence? That's not likely. We'll have a look on the other side.
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VELSHI: Just want to bring this to you. CNN has learned President Obama is headed to Walter Reid Army Medical Center today, this afternoon, to visit veterans who were wounded in Iraq. This it, like his comments on the economy, were not on the schedule. But he wanted to make this visit because tomorrow night he'll be delivering an Oval Office address to the nation marking the end of U.S. combat operations in Iraq.
Remember that night? That was Operation Shock and Awe. It's been nearly seven and a half years since that night of shock and awe that started the U.S. led invasion of Iraq. Tomorrow night, President Obama will announce from the Oval Office that the U.S. combat role in Iraq is officially over.
Since the fighting began in March of 2003, Saddam Hussein has been tried and executed, the Iraqi people have struggled to overcome ethnic violence, they voted in national elections. But along the way, more than 4, 408 U.S. Military troops have lost their lives. The number of U.S. casualties has dwindled as the U.S. combat role has been winding down.
At one point in the war, there were more than 160,000 U.S. troops on the ground. But today about 50,000 remain. The name of the mission was Operation Enduring Freedom, it now becomes Operation New Dawn. The U.S. formally hands over combat duty to Iraq. Those 50,000 remain as advisers and to assist the Iraqi army. But the Iraqi army still has a long way too long and work to do.
Let me just read this quote from White House Press Secretary Robert Gibbs. This is not everything is over. We still have people there, and we still have violence there. That's how White House Press Secretary Robert Gibbs puts it.
No one knows the situation there better than CNN's Michael Holmes. He is in Bakuba, Iraq. We're going to take a quick break. On the other side of it we're going to hear from him about how things are changing on the ground in Iraq.
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VELSHI: Well, we can give you all the facts and figures about things going on in Iraq, but nobody knows it better than our Michael Holmes who's over there right now. He's in Bakuba to tell us what it feels like to be on the ground in Iraq -- Michael.
MICHAEL HOLMES, CNN CORRESPONDENT: Hey, there, Ali. Yes, now we're back in Baghdad now, we were up in Bakuba for a couple of days. That's up in the northern end of the country. We actually weren't far from the Iranian border.
It's fair to say that even with this drawdown, this end of the combat mission, if you like, there's a certain level of anxiety amongst Iraqis about what now? And whether this could be just a little bit too soon, whether another year of U.S. soldiers staying here might have been a good idea.
They're worried about their own security service and their ability to look at them. So we hit the marketplace in Bakuba, a place that was a hot bed of insurgent and sectarian violence, to see what the locals had to say. Check it out.
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HOLMES: This market has got a lot of activity now down here. But the security is enormous. We're, in fact, being followed by Iraqi police to look after us in a way. So while people may feel a little bit more secure, it's probably because of this, as well.
Now, in '06-'07, this place was run by al Qaeda. It's also a place where the U.S. lost a lot of soldiers fighting al Qaeda. It was the insurgency and the sectarian violence, though, that took so many lives here. Sunni, Shiia, as well.
This man is telling us that he left when his uncle was killed, went to Syria for two years, came back. When he came back in 2008, somebody threw a bomb in here and his brother lost his leg.
UNIDENTIFIED MALE (through translator): I am concerned for the innocent people that die on a daily basis. I don't care about myself. Because life and death is the same to me. But I am concerned for the people because thousands of people are dying in vain.
UNIDENTIFIED MALE (through translator): It's up to the politicians now. But if they come together the country will be stable. The crisis is because of them.
HOMLES: It seems one of common threads we're finding so far is concern, yes, about the violence that still continues. But it's political, as much as anything. There's still not a government here six months after the election was held. And people here are telling us that that's creating a lot of instability. They want this thing sorted, politically.
RAED ABU ALI, STORE OWNER (via translator): We hope that the government will be formed as soon as possible. The delay has harmed us.
ALIA HUSSEIN (via translator): Of course, the most important thing is the government. And there isn't one.
HOLMES: People are telling us that they feel secure in the marketplace, but that's because of all the security that's around the place. Some have been complaining about the security making it difficult to do business, but they're saying that outside of Bakuba, it's still very dangerous.
AHMED SALMAN, STORE OWNER (via translator): The security situation right now is not stable. But when the government will be formed, I believe the situation will be better.
A. HUSSEIN(via translator): Nobody is thinking about the future right now. Most Iraqis don't think about the future right now, because there's no government. And no order. So the future is unknown to us right now.
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HOLMES: You know, in many ways, Bakuba, Ali, is a microcosm of Iraq. What goes on there filters down to Baghdad and beyond. And there still a lot of fear there. Two car bombs last week. Drive-by shooting on a checkpoint. Four guys killed there.
And the political message that came through constantly is what struck me. Politics and violence go hand-in-hand here, and with the instability that exists now, that can so easily be exploited by insurgents and al Qaeda, and there is just a sense that things could so easily just be ignited again if they don't sort this out soon, Ali.
VELSHI: All right, Michael, thanks for that story. Gives us some sense of exactly what's going on on the floor. Michael Holmes for us in Baghdad.
And as I mentioned, tomorrow night, President Obama will deliver a major address on Iraq from the Oval Office announcing the end of combat operations. He'll also discuss Afghanistan and the broader war on terror. Watch live right here on CNN, followed by analysis with Wolf Blitzer in Washington, Anderson Cooper in New York and Dr. Sanjay Gupta in Pakistan, all starting at 8:00 p.m. Eastern.
Parents grieving the loss of their young children, victims of what was Pakistan's lifeline, the Indus River. With water levels finally starting to recede, they face months, maybe even years of recovery. We're going to the trekking - we're "Globe Trekking" to the flood zone when we come back.
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VELSHI: Hi, it's time now to go "Globe Trekking." Let's go to Pakistan. It's been a month since the monsoon rains triggered deadly and devastating flooding on the Indus River. This map sort of tells part of the story of the horrendous suffering and destruction.
Ravishing floodwaters gushed over the banks of the Indus River in the northwest of the country, see? Near Islamabad. But the flooding subsequently went further south down into the southern Sindh province, which really has a lot of towns and farmland in it. These pictures that we're going to see show relatives praying and mourning for their drowned loved ones. A fisherman says his life now involves not catching fish but pulling bodies from the floodwaters. Now yesterday, one of them -- wow -- was his own son.
So far, more than 1,6 00 people have been killed. More than 17 million people, however, have been affected. After weeks of staggering misery, water levels in the south are now beginning to recede.
But officials will say it will take ten to 12 days for the rivers in Sindh to flow normally. And the U.N. says tens of thousands of children are suffering severe malnutrition and face potentially deadly waterborne diseases, like cholera, diarrhea and typhoid.
CNN's chief medical correspondent, Dr. Sanjay Gupta, is in southern Sindh province. He's been touring flooded areas, talking with victims still in dire need of food, water and a roof over their heads.
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DR. SANJAY GUPTA, CHIEF MEDICAL CORRESPONDENT: Here's how it works. You see police vehicles like this actually coming through the streets telling people to leave. They say that this particular area, this town of Bela will be under water in the next several hours, certainly by tomorrow. People are listening. This town would normally bustling, thousands of people milling around, shops open. Now, that is happening now. But most people actually are leaving like this, by foot, in the hot sun, walking for kilometers with no real idea of where exactly they're going or what they'll going to find there. It is easy to see why they're leaving. We are literally surrounded by water and they're worry that that water is going to get higher and higher. So, they're fleeing the floods with the thing, the priority that they value the most, their livestock, and just starting to walk.
This is where so many of them ended up. They were just walking for kilometers and kilometers down that hot road, looking for high lands, anything that could protect them from the flood waters. And look at what their lives are like now. Thousands of people, literally, they have this little barrier here, it is so hot outside, anything to try to keep and themselves cool. But this is the new normal life for lots of folks over here. This family, for example, (SPEAKING FOREIGN LANGUAGE), he says about 15 miles kilometers, they're saying. And look, small children. They walked here again in this very hot weather, very, very difficult.
He's telling me, they really haven't received any kind of help at all. (SPEAKING FOREIGN LANGUAGE). They're saying, they really have no food at all. All they have is this bag of sugar here which they use to make tea. This is how it is. This is what's happening here in the middle of this evacuation. There's also been no water here, they tell me for three days. In fact, a woman died in this area from dehydration just last night. There's no question that relief is slow coming here but even as we're filming today at the camp, this army helicopter comes over and drops parcels of food. But this is just one camp. There are thousands of camps like this, there are more than 20 million people displaced. A fifth of this country is under water.
(END VIDEOTAPE)
VELSHI: That's Sanjay reporting on the devastating aid and refugee situation now developing in Pakistan.
Half a mile underground, a ray of hope for the 33 trapped Chilean miners, however. For the first time since the accident, they speak to their loved one. Plus, the latest on the attempts to save them coming up right after the break.
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VELSHI: It was a day full of love and hope for the 33 Chilean miners trapped 2,300 feet underground. For the first time since they were trapped by a cave-in back on August 5th, they spoke to family members. A phone line was threaded through that lifeline tube to the miners. One person per family was given 20 seconds each to talk roughly. Some got a little bit more. Similar cords are being used to get supply and air to the miners, and today, crews plan on starting drilling a rescue shaft, an operation expected to take three to four months.
Take a look at this animation, which shows the situation as it is right now. This gives you some sense of what this looks like. Those are the paths down into the mine. That's the borehole that they can connect to the miners in. Thirty-three hundred of them -- 2,300 feet underground, in an area the size of a living room.
As we mentioned, three tubes are being used for communication, supplies and ventilation. That's the rescue -- that's the one that they're looking to -- those are the three, supplies, communication and ventilation. They're looking to drill another one, obviously, a much bigger one in order to get the miners out.
Karl Penhaul is at the site. He joins us right now. You spoke to the guy in charge there - or the people in charge there. What did they have to say?
KARL PENHAUL, CNN INTERNATIONAL CORRESPONDENT: Yes. The mining minister himself, Laurence Golborne, in fact, Ali - what he said was the operation to begin the drilling, to drill this rescue hole - now, remember, the rescue hole, as you say, is substantially bigger than those boreholes.
The rescue hole is going to be about 28 inches, about shoulder- width. Or to you and I as well, if you were to get a bicycle tire, that's about the diameter of a bicycle tire. If you can fit through a bicycle tire, you would get through that rescue hole.
Now, drilling is expected to begin, due to start in the wee small hours this morning. But there's been a delay in bringing a power unit in from Germany. But still the mining minister believes drilling could start today.
Now, on top of that, of course, the miners have to be kept fit and well in body and in spirit. And so imagine, for the next weeks and up to three or four months ahead, everything that they live, eat and breathe has to be delivered down those boreholes four inches in diameter. That big, Ali. They have to live their lives through a whole that big.
But the good news is yesterday, through one of those holes they dropped a phone line and for the first time, family members were able to talk for a few brief seconds to their loved ones.
Now, there's a very special story in all of this. One of the ladies, one of the women, received a very special proposal from her man. A couple called Esteban Drollas (ph) and Jessica Yanyes (ph). Now, they've been together as a couple for more than 25 years. But they never got married in a church wedding. And in one of the letters that was sent up earlier last week, Esteban Drollas (ph) proposed to Jessica Yanyes, that once he gets out, they're going to have a full Catholic wedding, a full-on white wedding at the church.
And yesterday, they talked again about that wedding and Estaban said to Jessica, he said, darling, start choosing the dress, start looking for the dress. And then when I get out, we will organize things together and we will have that full catholic wedding. So, a love story flourishing again even amid all this anxiety, Ali.
VELSHI: Beautiful that they can keep positive about it. We'll check in with you a little later on. Karl Penhaul in chile on this remarkable, remarkable story.
The economy, you are talking about it. The president's talking about it. Certainly, we're talking about it here on CNN. What does the administration need to do? What do you need to do? And is there a silver lining to this cloud of bad news that we've been hearing lately? I'm putting it all in perspective for you on the other side.
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