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Politics and the Economy; Talking to the Taliban; Two Incomes vs. One; Adult Services Barred on Craigslist

Aired September 05, 2010 - 19:00   ET

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

TOM FOREMAN, CNN GUEST ANCHOR: It's the top of the hour. I'm Tom Foreman.

In the top of the news, President Obama has a new plan to boost the economy, especially small businesses. And administration officials tell our Ed Henry that this proposal will be unveiled Wednesday in Cleveland and will include the extension of a tax credit for business research and development cost.

This comes amid other breaking news. A new CNN Opinion Research Poll showing how desperate Americans are for answers. Eight out of 10 Americans now think economic conditions are poor. And here's who's blamed -- blamed for it, 44 percent chose Republicans, 35 percent say it's the Democrats and 16 percent blame both.

President Obama's small business jobs plan has one of the backing of a key group over this weekend, the National Small Business Association. Today on CNN's "STATE OF THE UNION" NSBA head Todd McCracken said the bill will free up a lot of credit for small companies at a very low cost to the government. But McCracken also criticized President Obama for not acting earlier. The president of the AFL/CIO does not agree.

Candy Crowley asked both men to weigh in on how President Obama is handling the economy.

(BEGIN VIDEO CLIP)

CANDY CROWLEY, CNN HOST, "STATE OF THE UNION": What has the President from your point of view done right, and what has he done wrong?

TODD MCCRACKEN, PRESIDENT, NATIONAL SMALL BUSINESS ASSOCIATION: He really has focused on the lending stuff for small companies. So I think that's a really productive thing. He seems sort of -- sort of get the need to really -- to inject credit capital into small companies and how it's really the life blood of what they do.

What he's done wrong I think he's not really focused on that nearly early enough. I mean, we're talking about small business lending from now and in September into the end of a recession. This should have been on the table a year and a half ago. And things like this should have been on the table a year and a half ago.

And now they're also talking about a payroll tax holiday. Or some -- of some such -- we were talking about that also a year and a half ago. We think something like should have been in the first stimulus package, and things would have been -- we would have been in better shape than we are right now.

(END VIDEO CLIP)

(BEGIN VIDEO CLIP)

RICHARD TRUMKA, PRESIDENT AFL-CIO: Let's remember what he inherited. He inherited a banking industry or an economy that was about to fall off the end of a cliff. He inherited a recession. So he's brought us back, he brought sanity back to the financial system here. He has brought the economy back somewhat. He has created more jobs in this recession than George Bush did in eight years as president with a surplus.

(END VIDEO CLIP)

FOREMAN: Mr. Obama is going to spend a lot of time talking about the economy this week. It's part of a big push by the Democrats and by all politicians out there, frankly, because this weekend, kicks off the final stretch into the midterm elections, which are so important at this point.

The President will be spending Labor Day in Milwaukee. And Wednesday he'll be in Cleveland, plus he has a news conference on Friday. And he has his work cut out for him.

I mentioned that CNN Opinion Research poll a minute ago. It gives the President just a 40 percent approval rating on his handling of the economy.

That's the lowest for him on this issue since he took office. Let's bring in our senior political editor, Mark Preston to talk about all of this.

Mark, this is just a dreadful time for the Democrats. Republicans aren't much better off. But they are not the ones in charge right now.

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: You're right. Tom. And this is very much an anti-incumbent election. When you look at those numbers there, you know, voters out there still lay blame about the economy at the foot door, at the foot step anyway of Republicans.

But the anger is about incumbency right now and Democrats control the House, they control the Senate and of course President Obama is a Democrat himself. So when we're looking ahead towards this midterm elections its Democrats right now Tom who are on the defense.

FOREMAN: Mark, what I'm struck by among other things is that the Democrats nationally seem to have no unified message whatsoever. Was the stimulus good? Was the stimulus bad? Have we spend too much, have we spent too little. You've been working the phones here on Washington. What are people telling you? PRESTON: Well, I mean, for -- there's two different tactics right now at play. Let's talk about the Republican tactics first. They want to nationalize this election. You know, one strategist told me tonight Tom, it's an 80-20 formula; 80 percent of this election is about Democrats and their failure to turn the economy around. The other 20 percent is about Republicans and what Republicans need to do is to really try to become the viable alternative.

Democrats on the other side are really trying to localize this election, they're trying to say look, do you really want to vote me out of power? The fact is I've been in Washington trying to fight for the past couple of years for issues that are important to you such as health care reform or Wall Street reform.

But the underlying issue Tom comes down to the economy. And the fact is the economy continues to be very stagnant, and Democrats are really trying to fight against that in trying to say we have an -- we have answers, Republicans don't have answers.

So that's what we're looking at heading into November.

FOREMAN: And I guess, one of the huge problem for the Democrats right now Mark, is that when they say we have answers, people are going to say, where is the evidence? And that's where they have trouble because all these numbers are running so hard against them.

PRESTON: You're absolutely correct. And as far as Republicans go, the argument then is that Republicans haven't put up the answers, so to speak. But within a couple of weeks we'll see a blueprint that will be set forth by Republican leaders here in Washington that will have the answers. Or at least that's what they're telling me here in Washington. That will lay out a plan to try to help revive the economy.

Democrats again, on the defensive Tom and look, they are very vulnerable to losing the House of Representatives. The Senate is a little bit more on their column but they could lose the Senate. And if you were to talk to analysts across the country, Republicans will pick up more governorships in this election.

So again, not shaping up to be a great year for Democrats -- Tom.

FOREMAN: Mark Preston, we want to hear a lot more from you in the next eight weeks. It's a very important election coming up and from the whole political team up in D.C.

As you just heard, times are pretty tough for many Americans. So we're also asking another question tonight. In this economy, on your personal level, beyond all the politics, "Is two incomes still better than one?" We have some surprising answers coming up.

Plus, can the Afghan government really reintegrate Taliban militants back into Afghan society? President Hamid Karzai has created a peace counsel to pursue talks with the Taliban. The question is will it work? I'll talk with "The New York Times" reporter who was kidnapped by the Taliban and escaped. (COMMERCIAL BREAK)

FOREMAN: In Afghanistan this weekend, President Hamid Karzai announced the creation of a peace counsel to pursue talks with the Taliban. It is the latest step on the part of the Afghan government to try to reintegrate some militants back into Afghan society.

The question is, how realistic is this idea that such staunch enemies can ever be won over and trusted? Just today the "Times of London" ran an investigative report that said Iran has set up dummy corporations in Kabul to finance Taliban militants; the going rate for killing a U.S. soldier, $1,000.

Joining us via Skype from Springfield, Massachusetts now, is "New York Times" reporter David Rohde. He was captured and kidnapped by the Taliban and held captive in Pakistan for seven months before he escaped.

Let me ask you about this David. How much faith do you have in this idea? Is this a real possibility, or is this a pipe dream?

DAVID ROHDE, REPORTER, NEW YORK TIMES: I would say most analysts think that it's -- it's a sort of small step forward. There may be many local Taliban commanders inside Afghanistan itself that might broker agreements and so you know it's -- these analysts say it's ok for President Karzai to go ahead with this -- this approach, but the real issue is the Taliban safe havens that exist inside Pakistan.

And unless the Pakistani Army is willing to pressure the Taliban that they are using safe havens inside Pakistan to launch cross border attacks against American soldiers, it'll be impossible to defeat the Taliban.

So it's a small step forward. But without Pakistan doing more, it's not going to solve the situation.

FOREMAN: And with that said, I keep thinking about how in Iraq the awakening movement was a big turning point there, and clearly there are some sense that can be replicated in Afghanistan. But it seems to me the circumstances are different enough that to expect that kind of 180 turn like we had in Iraq would be a bit problematic.

ROHDE: Well, again, I think it's worth -- and I think most analysts would say it's worth trying. There are -- there is still in public opinion polls, most Afghans did not support the Taliban. Now, they are very frustrated with the Afghan government which they see is very weak and there's a lot of corruption allegations.

So it's definitely worth trying to -- to win over some Taliban to the Afghan government side. But you are correct that Afghanistan and Iraq are very different. And it's -- it's in a sense the key thing is the regional players here and will the -- you know the surrounding countries help the U.S. effort; will Pakistan help? Will Iran help?

So this is part of a solution but not the whole solution. FOREMAN: You were held by the Taliban. Do you think that the people once you get beyond just that very base level are even susceptible to this kind of agreement, or will they simply say, no, we're here for the long haul and we're going to win?

ROHDE: I think that there probably are local Taliban inside Afghanistan that would be willing to. Many of them are fighting for power frankly in their own districts. And if they could get, you know, posts there, they might be willing to reconcile with the government.

Another group of Taliban -- and these are the people who kidnapped me -- they are known as the Haqqani (ph) network. They are based inside Pakistan's tribal areas. They are much more hard line, they work with foreign fighters including Arabs and are reported to shelter al Qaeda members as well. That second group of hard line Taliban, the ones based in Pakistan will not, I think, agree to this sort of reconciliation program.

So it's again, it's going to be sort of a two-pronged approach that -- that will lead to reconciliation potentially inside Afghanistan but it -- it may take military pressure on other Taliban groups that are based in Pakistan.

FOREMAN: And we'll see how it plays out then. From "The New York Times," that's David Rohde. Thanks so much for joining us via Skype.

Millions of Americans are struggling in this economy as we started this broadcast out, but is the age-old standard of two incomes still better than one? It's a tough question, but one that produces some surprising answers. That's coming up.

And Craigslist is censoring itself, or so what it appears, the adult service section is gone. Are the critics satisfied? We'll tell you.

(COMMERCIAL BREAK)

FOREMAN: On this Labor Day holiday weekend you may notice we're doing a lot of stories about jobs, especially in this bad economy.

We want to turn now to a common perception that families have, especially when times are bad: the need for both partners to work. There's a question about that. Are two incomes always better than one?

Joining us is Jennifer Openshaw. She's the CEO of the Family Financial Network.

And Jennifer, let me start. It seems like a no brainer. You need more money, get two jobs. That's good. Is it always good?

JENNIFER OPENSHAW, CEO, FAMILY FINANCIAL NETWORK: It does seem like a no brainer. And for many families it does make sense Tom. And that's because a second income can provide some additional job security at a time when there is so much insecurity about jobs and concerns about health care benefits. A second income can also mean possible even better benefits than the other spouse has.

And a lot of families also use a second income to maybe save for a specific goal, like college or maybe even financing a business.

FOREMAN: Let me interrupt you there. But there are also a lot of hidden costs with a second income. If you're not making enough, it can actually be a problem.

OPENSHAW: Well, you're right and that is the issue of becoming the victim of the dual income trap, if you will.

Let's take a look at this example. Let's say this second person earns $50,000 in income. But you have maybe $10,000 to $15,000 off the top going to taxes and that leads you with $35,000.

But then let's not forget that we have clothing cost. We have transportation, maybe a car to get to our job. Maybe we've got child care expenses. And if you take those combined, those can easily come up to $15,000. And that can whittle that $35,000 net pay down to something $20,000. And then, of course, maybe you're thinking about, gosh, does it make sense to have somebody at home raising my kids versus me? Those are some very real questions that the couples need to ask themselves.

FOREMAN: So this is something where people have to, on an individual basis, really do the math here and not make an assumption here because I'm guessing, you mentioned some of the obvious costs. For any given family, there may be all sorts of hidden costs. Like if you have a big yard and you're working so much that you have to hire someone to mow the lawn or something like that.

OPENSHAW: You bet. If somebody is going to decide to stay home, Tom, it may make sense if they're going to sort of take over those services that could be mowing the lawn or taking care of the kids or even doing the accounting, which so many women do increasingly at home.

So there are times when one income does make sense maybe you're picking up those additional costs. Certainly if you have a job that's very secure with strong health care benefits -- and that's a big one for a lot of families. And if you have low debt, you certainly don't want to be relying on one income if you have a fair amount of debt that you have to be paying off every month.

FOREMAN: You have sort of a rule of thumb that people can apply if they look at the cost of their living space, their home or apartment. Tell us about that.

OPENSHAW: That is you don't want your housing cost -- if you can have somebody stay home -- to be more than 25 percent of your monthly pay before taxes. The example there Tom would be if one person's income is $4,000 a month, they should not have ideally more than $1,000 going to rent or the housing payment. That's for all sorts of reasons, including making sure that they can pay off the debt but also have room in case they face some financial crisis down the road.

FOREMAN: There's so many people too though who simply worry about stepping out of the workplace. They may say right now I have young children at home. This is the right time to step out and do this. It would make financial sense for my family. But I'm so afraid three years from now that I'll not be able to get back in or I'll have to come in at a much lower level. Is there a good way to go about this if you want to go back?

OPENSHAW: Yes, and that's a very real issue. One terrific is idea is that if you leave your employer see if you can create an agreement to continue working for them as a contractor, maybe on a very part time basis. It keeps your skills honed. It maybe keeps a little income in. It avoids you having some big gap on your resume.

The other thing you can do is to participate in some non-profit or community organization. Maybe something your kids are involved in as a way to build that relationship and have that presence with your kids but also to be able to add something else to your resume.

The key thing is to be able to take on an accomplishment where you can show some tangible results and build some good networking relationships that are going to build that resume and again, keep you current in those skills. That's very important.

FOREMAN: That's real food for thought on this Labor Day weekend. Thanks so much. Jennifer Openshaw from the Family Financial Network. We appreciate you joining us here.

OPENSHAW: You bet.

Coming up in ten minutes, a special CNN cover story: "Washed away"; Dr. Sanjay Gupta takes us to Pakistan where massive flooding has devastated millions of lives there. More than 1,700 dead, millions displaced; acres and acres of crops destroyed. Some unforgettable stories coming up -- you don't want to miss that.

Plus Craigslist has been under pressure to make some changes to its site. Now some state attorney generals are a step closer to having it their way.

(COMMERCIAL BREAK)

FOREMAN: Advocates to protect women and children against sex trafficking are noting a major switch on the Web site many consider Americans' bulletin board. The adult services section of Craigslist list was shut down this weekend in the U.S. in what appears to be a response to allegations it promoted prostitution. We say appeared because the folks at Craigslist aren't giving us an exact reason yet, but they say they'll release a statement later on.

Seventeen state attorneys general called on Craigslist to take just this type of action, including Connecticut's Richard Blumenthal, who helped lead the charge.

Richard, let me ask you, what is your reaction to this step by Craigslist?

RICHARD BLUMENTHAL, ATTORNEY GENERAL, CONNECTICUT: I'm very pleased by this very solid and significant apparent step in the right direction. I say apparent because we have received no definite or definitive word from Craigslist itself that the shutdown is permanent and complete. But it certainly is welcome.

If it remains shut down it will be a model for other sites, we hope because Craigslist is by far the biggest. Its scope and scale are unmatched by any others. And it's a good step. But a continuing battle has to be fought.

FOREMAN: You raise an interesting point there. You said there are other sites, there are also weekly newspapers; there are all sorts of places where these sorts of ads appear. Is it natural that your group of attorneys general would then pursue further these other sites and say now let's put the pressure on them?

BLUMENTHAL: We have other sites in our sights, so to speak. And we will pursue this problem because remember that these prostitution ads lead to other very serious criminal activity. They are not victimless crimes; assaults on women, human trafficking. We have been joined by strong and forceful advocates in the private sector like the National Center for Missing and Exploited Children is a very good ally.

And our coalition of attorneys general actually is growing on this issue. We are in excess of 20 now and I'm very privileged to lead it. But every one of them has been a leader in his or her state.

FOREMAN: Let me ask you beyond this country, because the Internet is a global phenomenon. Some of the advocacy groups out there had said there also needs to be a way to take this beyond the U.S. borders because so much trafficking occurs internationally. Is there anything your group can or would attempt to do on that front?

BLUMENTHAL: Very good question. In terms of our reach and our ultimate goal, certainly beyond the borders of this country since the Internet reaches beyond our borders, very important that human trafficking, for example, which can be an international activity be stopped beyond the borders.

But right now our focus really is on Craigslist. We're taking it one step at a time. We want to verify and confirm that Craigslist is in fact shutting down because our focus really is on law enforcement within our borders and victims within the reach of this country's law enforcement activities.

But I would say to you that we also need to think about changes in the law which right now give these sites virtually complete immunity, they claim, from any accountability for these prostitution ads. In other words, Craigslist itself says it cannot be held legally responsible for anything advertised on its site.

And my belief is, strongly -- and it's my personal belief, I can't speak for other attorneys general on this issue -- that we need to change that law to hold the sites more accountable than they are now. And that also would have a reach possible beyond our borders.

FOREMAN: And speaking of changing the law, I should mention you are running for the U.S. Senate against Republican Linda McMahon. President Obama's going to be campaigning for you up there later on. We asked the Republican candidate Linda McMahon to join us as well. We hope she will in the future to talk about this and other issues.

Best of luck to both of you in your campaigns and how it works out, but thanks for joining us Mr. Blumenthal.

BLUMENTHAL: Thank you.

FOREMAN: An immediate threat to the young people of this country through sex trafficking is what attracted the concern of CNN's own Amber Lyon. When she began reporting on this, she turned up the pressure on Craigslist to help make a lot of this happen. She investigated the practices on Craigslist and confronted founder, Craig Newmark, about the site's safeguards.

Coming up at 10:00 p.m. Eastern, we will show you the report she filed just a few weeks before the adult section shut down; some important reporting that you ought to see.

Another threat to human lives: weeks after massive floods devastated parts of Pakistan, more than 1,700 people are dead. Millions of acres of crops destroyed and many people may have to depend on food aid for some time.

Our own Dr. Sanjay Gupta has journeyed through Pakistan's flood zones. He brings us some unforgettable reports in a special CNN cover story, "WASHED AWAY". That's coming up next.

(COMMERCIAL BREAK)