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Foreclosures Hit a Record; 'Chalk Talk'; 'Q&A With Velshi and Quest
Aired October 14, 2010 - 14:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ALI VELSHI, CNN ANCHOR: Well, It's a new hour now and that means I've got a new "Rundown" to get you through.
The Internet, another technology. It should be as accessible to American kids as water and electricity. That's the basic theme of our "Chalk Talk" segment this hour. It's the passion of my special guest, CSI actor Hill Harper.
Plus, we're on the money, literally, in "Q&A." My buddy-turned- rival Richard Quest and I will ask about the looming currency war. And as always, we'll have a little battle ourselves.
And have you heard what politicians have to say about legalizing marijuana? We've heard what the pundits have to say about it, what do you have to say about it? Our Pete Dominick hits the streets to find out.
All right. It is a record, and it is not a record that anybody wanted to reach. In September, 102,000 homes were repossessed, taken back by the banks. And those aren't just numbers. Those are people who are out of their homes.
This is the first time ever that repossessions have topped 100,000 in a single month. This isn't going to get much better. Foreclosure auctions also hit a record in the third quarter.
Some of the worst states, well, they're the ones we expect them to be: California, Florida, Michigan, all for different reason.
Nevada, by the way, stands out. It's the highest. It's been the highest for three years. It's so bad, one in every 29 homes in that state received a foreclosure filing. And that, again, was just during the third quarter.
The number probably won't keep growing in the short term, however. That's because of a story we've been telling you about for a while.
Three of the nation's biggest mortgage lenders have frozen foreclosure proceedings, or at least the sales of those foreclosed homes. Plus, you've got the attorneys general of all 50 states, led by Iowa's Tom Miller, investigating improper foreclosure proceedings and what is called robo-signing by the lenders. That's when the lenders had to get through so many foreclosures, that they didn't really check the accuracy of the documents involved. There are allegations that the banks ever made up some of those documents.
Now, this is not going to slow down proceedings. Ultimately, it is not going to stop the tide of people losing their homes. It doesn't have an economic effect on the front end, but it does on the back end. I'm going to talk about that in a second.
One last big number for you, five million. There are currently five million loans that are either seriously delinquent or in the initial stages of foreclosure right now. That's worrisome. Those are big numbers.
Let's bring in my friend Christine Romans from New York to break down the numbers further.
Christine, let's just discuss the effect that this is having, first of all, on the lenders and the banks, and the people being foreclosed upon. What's the immediate effect?
CHRISTINE ROMANS, CNN BUSINESS CORRESPONDENT: Well, the immediate effect is those people who are being foreclosed upon at the very late stages, the sale of a foreclosed home, has stopped. So the banks -- and bank stocks are actually getting hit on this today as people are very concerned about what this is going to mean longer term for the banks.
But the banks are not selling those homes at auction. They've stopped. They've frozen this process. So that means that if you were sitting in that home, and you're already out, it's already out from under you, it doesn't change anything for you right now. But for the bank, they're not selling that house.
VELSHI: OK. Let's talk about two other groups of people affected by this, people who have been involved in trying to buy foreclosures. I mean, it sounds like being a vulture, but the fact is home affordability is there. It's not your fault somebody else is foreclosed upon.
ROMANS: Oh, yes.
VELSHI: You can take advantage of low mortgage rates. If you've got money to buy a house and you wanted to get into buying a foreclosure, what happens to you now?
ROMANS: And look, there are people in Florida, in Nevada, in California, in some of these neighborhoods, Ali, for the first time ever they're actually able to afford a home. These are not speculators and vultures. These, in many cases, are people who are finally able to afford a house.
They're going to buy a foreclosed house. They're ready to go do it. Boom, now they don't know exactly what's going on because they can't buy that house.
So, there's a freeze on that part of it as well. So, some people who were looking for a bargain -- and some investors, by the way, are in this game, too -- they are not getting those homes right now as the banks try to sort out this paperwork.
VELSHI: Right. And that will -- by the way, those prices aren't likely to go up. So, however long it takes to get through this mess, you'll be able to buy it. You just may not be able to close this deal this month, next month, maybe even in December.
VELSHI: Let's talk about sellers, people who are either selling their house now or were hoping to sell their house anytime soon.
ROMANS: Well, so, say that you're not --
VELSHI: You're not in foreclosure, right.
ROMANS: -- foreclosed on. You're not in foreclosure. You're just trying to sell your house.
Now you've got all of this uncertainty in the housing market. Right, Ali? And you've got maybe a house sitting next to you that you thought was going to be sold at auction. Now we don't know when it's going to be sold.
It's going to sit empty for the time being. The bank is still going to own it. Hopefully they're mowing the front yard, but I'm not sure. Maybe you're going to have to mow the front yard so that your house still looks pretty good. And you're going to have to wait.
You've also spoken about the shadow inventory. A lot of people have been waiting for a thaw in the housing market --
VELSHI: Yes. Let me stop you there. This is an interesting word, it comes up, shadow inventory.
So we talk about inventory. We talk about how many new homes and existing homes are on the market right now. And typically, based on how many people buy a home in a month, how many months of inventory.
Shadow inventory is stuff that's not on the market because it's somebody who wanted to sell a house, who is thinking about selling a house, not sure if they should list it in this market.
ROMANS: And they've been waiting to see when things are going to get a little bit better before they step into the market to list their house for sale. We think that there may be a million of those people, maybe even more, 1.2 million by some estimates I've seen. So now they're still waiting to get in.
All of this uncertainty just delays a healthy recovery in the housing market. Right? I mean, because you have to get through this foreclosure mess and get some kind of clarity in the situation, clear out some of these bad loans, clear out some of these properties that were way, way overpriced for too long, before you can find a bottom and find the real value in housing. And we're just not there yet.
VELSHI: All right, Christine. Thanks for breaking this down for us. Always a pleasure to see you. ROMANS: Sure. Bye, Ali.
VELSHI: Christine Romans is my co-host on "YOUR $$$$$." You can see us Saturdays at 1:00 p.m. Eastern, Sundays at 3:00.
She's also the author of a brand new book, "Smart is the New Rich." It's on bookshelves now. We'll be talk a lot about the stuff that she's written in that book on this show and on our weekend show, because there's some stuff in there that can really make a difference to your life and your prosperity.
OK. You probably know him from one of my favorite TV shows, "CSI New York." Hill Harper, though, he is on a mission to provide social media to all school kids. He'll tell us why this is so important not only to kids, but to society as a whole.
You're going to hear from Hill Harper, live on this show, in just a moment.
(COMMERCIAL BREAK)
VELSHI: What do you think when I mention the name Hill Harper? Around here at CNN, I hear, "Oh, he's so dreamy."
Hill Harper, the first thing that may come to mind for most of you -- that's what came to mind for me -- is that he's the star of the hit TV show, one of my favorites, "CSI New York."
Maybe, though, you've read one of his several books. Harper is not just an actor. He is an author. He is an activist. And he is a guy on a mission.
There he is. You've all seen him.
He is urging corporations, schools, and other movers and shakers to open the door to broadband and Internet technology to minority and under-represented groups like African-Americans and Hispanics. The reason, he argues, is that there is a correlation between these groups and their access and current unemployment rates.
Hill Harper joins me now from New York.
Hill, good to see you, my friend.
I was at this event in Charlotte, the Alliance for Digital Equality. You weren't able to be there, but you had your presentation. You broadcasted in.
And, you know, I have to tell you, if you're not involved in this discussion about access to Internet, access to what's on it, it may not occur to you. It's like telling me about a community somewhere in the country that doesn't have electricity or doesn't have running water. I don't even know that it exists. I don't know how big this problem is.
HILL HARPER, ACTOR: It's a huge problem, and particularly because of the opportunities that exist. You know, we talk about a divide, whether we're talking about a educational divide, and then we talk about jobs. I mean, everyone is talking about jobs right now obviously.
VELSHI: Yes.
HARPER: Technology is it. It's the -- it's the elixir to how -- access to technology and broadband should be our number one conversation, whether it's an education-based conversation or whether it's a jobs conversation.
VELSHI: But how should I think of this? How should my viewers think about this? Because I suppose there's an assumption that most kids in school, as bad as those schools may be, either at school or at home enjoy some access to the Internet and what it offers. That is simply not true.
HARPER: No. It's absolutely not true.
You look at most of the community or urban school systems that are public school systems. There are computers in the school. Most of them are in the libraries, but they're not actually being used in the classrooms.
And if you look at the data, I mean, there's so many studies. There's an Apple study that Apple did, "Apple Classrooms for Tomorrow," where they found that just incorporating 25 percent or 25 minutes a day of computer-assisted learning and computer-assisted instruction created such an astounding result in terms of math scores, literacy, writing skills.
And so these are things that can have a profound effect. I mean, the documentary "Waiting for Superman" is out now and very popular. You guys are having this great segment on CNN, "Fixing Our Schools." Everyone is talking about the education system, but what they're leaving out is the idea of talking about, how are we going to fix this problem?
Unfortunately, in the documentary, in my opinion, I think Davis Guggenheim does a great job, but he really vilifies teachers and teachers unions. Listen, teachers and teachers unions aren't the problems in our schools. Even in right to work states, we have failing schools.
What's going on, though, is it's a systemic problem. Now, how do we deal with it? What are the answers? I think technology is the key.
VELSHI: And you're very involved in this. You're not some kind of spokesman who happens to be an actor on TV. You're very, very involved in this. You have got a foundation that you're actually doing some work for.
HARPER: Yes.
VELSHI: Tell us about that. HARPER: Well, my foundation is called the Manifest Your Destiny Foundation. And we created is a summer empowerment academy.
And what we try to do is catch 8th graders who may be falling through the cracks and create a summer program for them as they're going into 9th grade. Most of the studies show that you can basically tell, based on an 8th grader's scores in 8th grade, if they'll make it through high school or not.
VELSHI: Yes.
HARPER: And so we want to catch them. But we just don't want to stop there. We want to use technology.
So we have them using Google groups. And this is what we found. What was so interesting, Ali, is that 30 percent of the students' parents that we had in our program didn't even have e-mail addresses.
We thought and we made the assumption that you said at the outset, when we started talking, is that, well, I'm sure the parents at least have an e-mail address so we can contact them about their student's progress. Thirty percent didn't.
So we connected them with having e-mail. We have Google Groups. We used -- we used Microsoft-donated laptops. We had Kaplan Test Prep donated online PSAT and SAT things.
There's a lot of different things we can do. We Skype in speakers. Using technology is not just about e-mails or Facebook. It's about actually using it as a teaching tool to sort of decrease the divide.
VELSHI: Yes. Well, let me ask you this. That divide has existed for a long time. Whites in society enjoy a certain unemployment rate. The unemployment for Hispanics is always bigger. And the unemployment rate for African-American is always bigger.
Is this digital divide making that worse? Or, conversely, if you succeed in what you're trying to do, can it narrow the divide?
HARPER: Well, it absolutely can narrow the divide. I don't want to fall into the trap of making this a race-based discussion.
VELSHI: Yes.
HARPER: You know, we know communities that are undeserved. And oftentimes, you're right, they tend to be African-American, Latino, Native American oftentimes. But listen --
VELSHI: But not always.
HARPER: But not always. There are a lot of poor white folks out there that don't have broadband, that are living in situations where they don't have access. So this really has nothing to do with race. It really has to do with service. Now, the question is, what can we do? We have to get private corporations together with public entities like my foundation as just an example and work together to say, everybody wins if we fix this. Let's take jobs really quickly, for instance, so we're not just talking about education.
I have a dear friend that has a retail store in California. And what she has done is she sells over the Internet. OK? The only reason she's been able to keep her doors open in this economy is her Internet sales.
Now, if we increase the number of people who have access to broadband, more people can purchase from her, therefore she can pay the rent and her landlord doesn't get hit. She can hire more people. And even her suppliers that are making the retail goods can hire more people.
VELSHI: Yes.
HARPER: So, it's across-the-board win here. If we think smart, we can win.
VELSHI: I love it. Yes, I love the way you're thinking about this, because it's public policy and it's private policy. And it's basic economics and it's jobless rates.
Hey, Hill, I'm a big fan of yours. I watch the show all the time. And it seems to me it's on TV a lot.
How is it you fit writing books and this social activism and like a fairly big acting career into your life?
HARPER: Well, you know, I'm blessed. I'm from a family where they told me that I had to work twice as hard and be twice as good. So I just try to work hard.
And I'm not married yet, so hopefully, you know, once I'm married and have kids, I won't be doing all this stuff. And I have got to fill my time somehow.
And I dressed up, Ali, because you always talk to Ed Henry and you talk about his ties and things. So, usually don't wear a tie. But I wore a tie for you, but you didn't actually mention it.
VELSHI: I love the tie. I love the tie.
HARPER: Thank you.
VELSHI: No, but Ed and me, you've got to wear a fancy tie, because the viewer has to have something to look at. With you, you've got your face. It's all --
(CROSSTALK)
HARPER: Well, thanks so much.
Like you said, "CSI New York," we moved to Friday nights. And we're so proud that we're doing well on Fridays. And I'm excited.
There's a film called "For Colored Girls" that I'm a part of. It's coming out November 5th, that I think they're saying it has Oscar potential.
VELSHI: Great.
HARPER: So I'm so proud to be a part of that film as well.
VELSHI: Great to see you, Hill. It's our honor to have you on the show.
HARPER: Thank you so much.
VELSHI: And thank you for the excellent work that you're doing.
HARPER: I appreciate it. Thank you.
VELSHI: Good to see you. And that is a nice tie.
Delaware Senate candidate Christine O'Donnell locks horns with opponent Chris Coons. A sample of their feisty debate coming up next.
(COMMERCIAL BREAK)
VELSHI: By all accounts, there was no knockout punch. Sparks did light up the stage of the University of Delaware during last night's debate between Republican Senate candidate Christine O'Donnell and her Democratic opponent, Chris Coons.
Going into it, Coons enjoyed a 19-point lead in the latest polls. The big question for many, would O'Donnell fall on her face? This is the same O'Donnell who began a recent campaign ad by stating, "I am not a witch." She's also gone on record as saying evolution is a myth.
But last night, no major gaffes by either side, and both of them managed a laugh or two. Listen in.
(BEGIN VIDEO CLIP)
CHRIS COONS (D), DELAWARE SENATE CANDIDATE: They jokingly called me a bearded Marxist. If you take five minutes and read the article, it's clear on the face of it, it was a joke. Despite that, my opponent and lots of folks in the right-wing media have endlessly spun this. I am not now nor have I ever been anything but a clean shaven capitalist.
(LAUGHTER)
CHRISTINE O'DONNELL (R), DELAWARE SENATE CANDIDATE: Well, I would stand to disagree, because, first of all, if you're saying what I said on a comedy show is relevant to this election, then, absolutely, you writing an article -- forget the "bearded Marxist" comment. You writing an article saying that you learned your beliefs from an articulate, intelligent Marxist professor, and that's what made you become a Democrat, that should send chills up the spine of every Delaware voter, because then if you compare that statement to your policies --
COONS: If it were true, I would agree. It's not accurate and it's not true.
(END VIDEO CLIP)
VELSHI: Well, by the way, the seat that Coons and O'Donnell are fighting over is the one that was formerly held by Vice President Biden.
(NEWSBREAK)
(COMMERCIAL BREAK)
RICHARD QUEST, HOST, "QUEST MEANS BUSINESS": Welcome back to the CNN NEWSROOM and to "QUEST MEANS BUSINESS" across the United States and around the world.
Hello, Ali.
VELSHI: Hello, Richard.
Each Thursday, Richard and I will join you at this time around the world to talk business, travel and innovation. Nothing is off limits. We take your questions.
And today we're tackling a question on currency.
QUEST: It's a possible war that's brewing over the real value of money.
Ali, last time I went first, so now "The Voice," give us 60 seconds on the clock.
VELSHI: All right. Let's start.
China maintains its currency, the yuan, at a level that some say is unnaturally low. Now, that makes Chinese goods cheaper than some say they otherwise would be.
America says a low yuan hurts U.S. manufactures and costs American jobs. Letting the yuan rise could create new demand for U.S.-made goods and help rebuild the decimated U.S. manufacturing center.
Well, the Chinese response? You've got to be kidding, America.
The loss of American manufacturing and exports is self-inflicted. China says the U.S. can't simply manufacture as efficiently, meaning as cheaply as China can, and that blaming the yuan is a red herring.
China says that Americans should save more, spend less, get out of debt. And for good measure, china accuses the U.S. of the same offense, keeping the U.S. dollar low. Now, keeping your currency low encourages exports and boosts your country's manufacturers, creating jobs and prosperity at home. How does a country actually keep its currency low? If you're China, you buy up U.S. dollars, keeping them strong by reducing the available supply. If you're the U.S., you basically print more money, you increase supply, and you decrease the value of your currency -- Richard.
QUEST: That is a very good explanation. Give me 60 seconds, and I'll tell you what really it's all about when you talk of currency wars.
Whether it's the euro or the dollar or the pound sterling, or even the Hungarian forint, currencies do battle against each other, all trying to try and force the other one down. Because if you look, the Brazilian real is up 14 percent against the dollar. The Japanese yen up 15 percent. The euro, 13 percent.
It's known as a classic beggar thy neighbor policy.
The real currency war happened in the 1930s, around the Great Depression. And then, after the Second World War, managed currencies -- the Plaza Accord, the Louvre Accord. And now we're in this difficult situation when the world has to come together once again.
But can they do it? So far, the IMF has failed, the G-20 hasn't got much further. Whether or not they can avoid the question of a big currency war depends on your job and on mine because in a currency war, everybody loses out.
(BUZZER)
VELSHI: I must say, I think my bills are bigger than yours.
QUEST: Boasting again, as always, Ali. I think it's what you do with it, not how big it is.
VELSHI: Excellent.
And on that, let's find out how much we both know about this stuff. It is time for the quiz, the battle between Richard and me. Let's introduce "The Voice."
Hello, Voice.
THE VOICE: Hello, gentlemen.
Now, I know you're both G-20 experts, so, gee, I sure hope you get this first question right.
Which of these countries is not part of the G-20 which meets next month in South Korea; A, Argentina; B, Turkey; C, South Africa; or D, Spain?
(BELL RINGING)
THE VOICE: Richard with a decisive ring and a decisive answer.
QUEST: Spain.
THE VOICE: And you're exactly right, Richard. Spain is the most populous country not included in the G-20. But South Korea has invited Spain to attend as a guest nation.
Richard on the board early, 1-0.
Question two. According to the Federal Reserve Bank, how long does the standard U.S. dollar bill last before it wears out? And yes, it does wear out. A, 12 months; B, 22 months; C, 25 months; or D, 18 months?
(BELL RINGING)
THE VOICE: Ali?
VELSHI: Twenty-five months.
THE VOICE: I'm sorry, Ali. You are not on the money.
Richard, care to make it 2-0?
QUEST: Twenty-two months.
(BELL RINGING)
THE VOICE: Richard is on the money. Twenty-two months is right.
The dollar bill actually lasts six months longer than a $5 bill. So if you have any old 5s laying around at home, just send them to "Q&A."
Question number three.
Ali, it's time to redeem yourself.
VELSHI: All right.
THE VOICE: According to CNNMoney.com's currency converter, which currency right now is worth more when converted to U.S. dollars or euros: A, the Indian rupee; B, the Russian ruble; C, the Mexican peso; or D, the Chilean peso?
(BELL RINGING)
THE VOICE: After a pregnant pause, Ali, that's you.
VELSHI: The Chilean peso?
(BUZZER)
THE VOICE: Wrong, Ali.
Richard, care to make it a 3-0 round? QUEST: I'm going to go for the Indian rupee, but it's a guess.
(BUZZER)
THE VOICE: Richard, I'm going to say that's wrong.
VELSHI: Wow.
THE VOICE: The actual answer is C, the Mexican peso. The Mexican peso is valued at roughly eight cents. The Russian ruble, three cents. And the Indian rupee is worth only two cents when exchanged for U.S. dollars.
But, gentlemen, "The Voice" would not exchange either of you for anything.
VELSHI: You are too kind, Voice.
And Richard, you are once again in the lead.
QUEST: Modesty forbids me from saying anything, but that will do it for this week.
Remember, he's here, I'm there, Thursdays, on "QUEST MEANS BUSINESS," 18:00.
VELSHI: And in the CNN NEWSROOM, 2:00 p.m. Eastern.
Keep the topics coming on our blogs, CNN.com/qmb and CNN.com/Ali. And tell us each week what you want us to talk about.
Richard, see you next week.
QUEST: Have a good week.
VELSHI: An American shot and killed while jet skiing. The lead investigator, beheaded.
Are they victims of the deadly Mexican drug war? We'll tell you the latest in "Globe Trekking."
(COMMERCIAL BREAK)
VELSHI: Time now for "Globe Trekking." First, a stop on Falcon Lake, a vast reservoir that straddles the Texas/Mexico border. Still no sign of the body of American David Hartley. His wife, Tiffany, said he was shot and killed while the two were jet skiing on Falcon Lake last month. It happened on the Mexican side of the lake.
Now, this is just a blip in the media for a country struggling with a deadly drug war. American officials say they are doing all they can to find Hartley's body and bring in the apparent killers, but there's little they can do because they have jurisdictional issues on the Mexican side.
Now a stunning twist to the story. The lead Mexican investigator on this case has been killed. His severed head delivered in a suitcase to a local Army post on Tuesday. The sheriff in Zapata, Texas, a town on the lake, suspects drug cartels. He says the killing of the Mexican government investigator was a message to all concerned to back off.
Tiffany Hartley says all she wants is for her husband's body to be returned to her. Give us that, she says, and we'll go away.
Now to Chile and the extraordinary rescue of those 33 miners who were trapped underground for more than two months. Here you see them with Chile's president. All of Chile and the rest of the world rejoiced yesterday when the last miner was hoisted to the surface. Miner 33, supervisor Luiz Urzua, who volunteered to stay behind until all his men were safely on the surface. He spoke face-to-face with Chile's president, urging him to make sure this type of accident never happens again.
OK. Coming up next, Proposition 19 has the whole country is talking about toking. Pete Dominick, host of "What the Week" joins me to talk about what you think about legalizing marijuana. We'll be right back.
(COMMERCIAL BREAK)
VELSHI: You put your weed in it.
This is CNN, the place for politics. And just 19 days until the midterm elections. But in addition to electing governors, senators, Congressmen, hot-button issues on the ballot. One of the most talked about, which does surprise me a little bit, but it is. California's Proposition 19, which could potentially legalize marijuana for regulated sale in the state. Hot issue all over the country.
Pete Dominick, host of "What the Week," hit the streets to find out what people are saying about it. Listen.
(BEGIN VIDEO CLIP)
UNIDENTIFIED FEMALE: Reefer.
UNIDENTIFIED MALE: Budda.
UNIDENTIFIED MALE: Ganja.
UNIDENTIFIED FEMALE: Herb.
UNIDENTIFIED MALE: Mary Jane.
UNIDENTIFIED MALE: Mary Jane, sir!
UNIDENTIFIED MALE: Salad?
UNIDENTIFIED FEMALE: That's what my dad calls it.
(LAUGHTER)
UNIDENTIFIED FEMALE: Bud.
UNIDENTIFIED FEMALE: Pot.
UNIDENTIFIED MALE: I'm here in an unnamed city in an unnamed store where they have a section that sells products solely for smoking tobacco.
UNIDENTIFIED MALE: Show of hands. Who knows what Prop 119 is? Does that ring a bell?
Would you vote to legalize marijuana?
UNIDENTIFIED MALE: Probably not.
UNIDENTIFIED MALE: I would vote yes.
UNIDENTIFIED MALE: I would probably be against it.
UNIDENTIFIED MALE: They say it will save $8.7 billion in law enforcement.
UNIDENTIFIED MALE: I just think it's silly how many people we have in prison because of that.
UNIDENTIFIED FEMALE: Everybody does it.
UNIDENTIFIED MALE: Might as well legalize everything. Let these people do what they want to do. They're going to do it anyway.
UNIDENTIFIED FEMALE: Tax it. I mean, yes, people are going to do what they want to do anyway.
UNIDENTIFIED MALE: That's just crazy. Because people are smoking it, that's no excuse to continue to do wrong.
UNIDENTIFIED MALE: Marijuana messes up your brain for two or three days. I worked for the railroad.
UNIDENTIFIED MALE: Please don't smoke marijuana ever, sir, if you're driving a choo-choo.
UNIDENTIFIED FEMALE: There's nothing wrong with it. It doesn't kill you. It doesn't give you cancer. It's a leaf. It grows out the ground. It's a plant.
UNIDENTIFIED MALE: All right. What does America look like if the whole country had legalized, regulated, taxed marijuana?
UNIDENTIFIED MALE: Again, I think it would be better.
UNIDENTIFIED MALE: I don't think we need to legalize any intoxicant. Our bodies are so marvelously made by the creator that we don't need to create anything else into our bodies anyway.
UNIDENTIFIED MALE: God says that he gives every green bearing (ph) seed to mankind, which means every green bearing seed, every seed.
UNIDENTIFIED MALE: What else does God say? Can you give me anything else that God says that doesn't have to do with green bearing seeds?
UNIDENTIFIED MALE: Yes.
UNIDENTIFIED FEMALE: (SPEAKING IN SPANISH). I don't like it.
UNIDENTIFIED MALE: What's the Spanish word for marijuana?
UNIDENTIFIED FEMALE: Marijuana, too!
(END VIDEOTAPE)
(LAUGHTER)
VELSHI: At least a little news in there. The Spanish word for marijuana is marijuana.
PETE DOMINICK, "WHAT THE WEEK": There you go.
VELSHI: Pete Dominick, host of "What the Week." You see him on "Pete on the Street." What is your radio show on Sirius?
DOMINICK: On Sirius XM, it's "Stand Up with Pete Dominick."
VELSHI: This is the second best-looking bald guy at CNN. And a close second, I would say.
DOMINICK: How dare you talk about Wolf.
(LAUGHTER)
DOMINICK: He's not bald, is he? I don't even know.
Hey, first of all, I think we should just -- when we talk about marijuana, legal or illegal, can't we use the word prohibition? And I think Ali Velshi should always use that word, seeing as you're dressed like a 1920s gangster. A lot of people don't know that Ali Velshi has a Tommy gun and a barrel of moonshine under the desk.
VELSHI: This look is back in after that Boardwalk Empire thing.
DOMINICK: Exactly.
VELSHI: Yes, everybody dresses like me on that show.
DOMINICK: Exactly. They're dressing like you.
VELSHI: Here's my thing. As you know, I come from Canada. Some of the debates that happen here in the U.S., we had a long time ago in Canada. Almost kind of over it. I'm a little perplexed about how big of a discussion this continues to be. But clearly, there's no shortage of commentary on this. On Facebook, on Twitter. Every time we do something on marijuana, the page explodes. DOMINICK: One of the reasons why it's come up and it's raging debate now is not only because we're progressing in this country about drugs, etcetera, but the economy. You know about this a lot better than I do. One town in the Northwest legalized all drugs. Not legalized them. They're not arresting for them. And in California, we know they're cash-strapped -
VELSHI: The ability to tax it.
DOMINICK: There was a Cato Institute study that said it would bring in $8.7 billion for the whole country, not California, if it was taxed and regulated, and it would save $8.7 billion in law enforcement. And, you know, it -- it seems like kind of a silly argument, but young people are supportive of it. Some of the older people - you know, reefer madness. It'll kill you. It'll drive you crazy. You'll jump off a building. There is a discrepancy, I think, in age.
VELSHI: I've heard criticism that the bill in California doesn't necessarily put some of the safetys in place that when you're legalizing things like alcohol or -- well, alcohol in particular, there are things in place about what you can't do under the influence of alcohol. This Proposition 19, critics say doesn't go far enough to answer that.
DOMINICK: Well, nobody does anything under the influence of marijuana. They just sit there and watch cartoons and eat pretzels.
Of course, I'm joking. But you know, it's interesting who's funding the anti Prop 19 ballot. It's half funded the movement against it, alcohol. Alcohol industry is spending a lot against it. They don't want people making that switchover.
I think most people generally agree. At least when I talk to people on the street and my radio show, which one is more dangerous? I haven't seen too many marijuana-induced fights over someone looking at someone else's girlfriend.
VELSHI: Is there -- the snack food industry supporting --
DOMINICK: The snack food industry is a huge lobby. All the chip companies, the pretzel companies, the cookies, the Nachos, especially, they're very, very into this. Absolutely.
VELSHI: Love your show.
DOMINICK: Thank you.
VELSHI: "What the Week." You just got a great approach. Stand up for a second.
DOMINICK: Yes, I bought this shirt --
VELSHI: How does he get away from this?
DOMINICK: I bought this shirt. I want. VELSHI: Looks like you rolled out of bed. The shirt looks like it's brand new.
DOMINICK: It is. I bought it this morning at LaGuardia. And I'll be bringing it back as soon as we're done with this show next week. I don't have that Ali Velshi --
VELSHI: You can keep the jeans, though.
DOMINICK: I can keep the jeans?
VELSHI: Those look like you've had them on for a while.
DOMINICK: It's a Saturday show. It's casual. I can do that, right?
VELSHI: I have a Saturday show, too. Maybe I'll try it. I'm wearing jeans under this, by the way. In fact, I'm wearing shorts.
(LAUGHTER)
VELSHI: All right. Counting down to Election Day, Democrats are bringing out the big guns. So, we're going to bring out our big guns. Ed Henry is standing by to tell us about a campaign duo with some pretty big success the last time around.
By the way, I just found out Hill Harper from "CSI: New York," big Ed Henry fan. We're going to talk about that when we get back.
ED HENRY, CNN SENIOR WHITE HOUSE CORRESPONDENT: He loves "The Stakeout." That's cool.
(COMMERCIAL BREAK)
VELSHI: Every day around this time, we bring in our senior White House correspondent for something we call "The Stakeout." Ed Henry - sometimes he's at White House -- he goes wherever the news is.
Your name came up a little earlier in a conversation I was having with "CSI: New York" superstar Hill Harper. The dreamiest guy I've had on TV today. So say some of our producers.
HENRY: Yes. And he said he's a big fan of "Stakeout." He said he wore a tie only because you give me grief about my tie. So, he wanted you to comment on his.
VELSHI: Yes.
HENRY: He wore a tie and then -- but I'm disappointed that you kind of didn't tell him the truth. You said you loved his tie, but it's a solid blue tie. I wore that very tie last week, and you told me it was boring because you like these wild polka dots. Exhibit A being today. Pinstripes, cube stripes, and polka dots.
And then you tell him, hey, it looks great. You're sucking up to Hollywood again. You want to be in another movie. VELSHI: I'm a big fan, you know.
HENRY: Since you want to be in another movie.
VELSHI: I do want to be in another movie. Or I could guest star in "CSI: New York."
HENRY: Oh, are you angling for it? It sounds like you're angling for it.
VELSHI: You know.
Hey, you've been traveling around the country.
(LAUGHTER)
VELSHI: Nice to see you back at the home base. I heard something that you know about who is running with President Obama as vice president on his ticket in 2012.
HENRY: Well, this was actually revealed not so much by a secret source but by Vice President Biden himself. There had been all that speculation that maybe Hillary Clinton would be on the ticket in 2012 instead of Vice President Biden, and maybe they'd switch jobs. All kicked off on "JOHN KING USA" when Bob Woodward, the author basically said this was on the table.
Well, Vice President Biden just told "The New York Times" a couple of days ago, look, the president came to me and asked me if I wanted to be on the ticket again, and we're going to run again in 2012. Interesting because it shoots down the Clinton thing once and for all, which never really had a lot of legs, number one. And number two, it's funny because Robert Gibbs at the podium is constantly saying we're not thinking about 2012. We don't spend any time thinking about that.
Now, the vice president is saying they spent at least enough time to formulate the ticket, and they're running again. Now, a White House official told me look, they spent about ten seconds talking about this and they moved on. Basically it's a non-story for them. They've always thought they were going to run again. So, it's interesting. The scoop comes from the vice president himself saying, look, I'm running.
VELSHI: Smacking down the Washington spin machine. That is pretty effective. Ten seconds to do that.
Hey, listen. You were in Chicago, one of my favorite towns, as you know. You were there covering Michelle Obama, who is injecting herself into this campaign a little bit.
HENRY: Absolutely. I mean, she was there fighting for the Democratic candidate Alexi Giannoulias who is in a tough battle right now in President Obama's old Senate seat. Today, she's on to Denver. Senator Michael Bennett having some trouble there. And real fascinating, this weekend for the first time since 2008, she's actually going to be campaigning with her husband. They'll be in Columbus, Ohio. I'll be there on Sunday evening. And then after that, she's going to California for Barbara Boxer, going to Washington state for Patty Murray. A couple of her advisers told me they're planning to do even more than what's already on the books. They're just trying to figure out which states she'll be most helpful at.
And I've got a story on CNN.com right now about her as an asset for Democrats. When I did the research, I found this quote from the 50s. You won't believe this. "Mamie Eisenhower once said, quote 'Ike runs the country. I turn the lamb chops.'" and I thought, wow, it's kind of interesting how far we come that you've got the first lady not turning the lamb chops but maybe saving the president's bacon in these important races. Sort of just to switch the metaphor ever so slightly.
VELSHI: But it's a delicate situation.
(CROSSTALK)
HENRY: -- told me look, you should ask the first lady about whether or not she cooks lamb chops here. I said, Kyra, I don't really think that's a good idea. She might hit me with a frying pan. Just to completely kill the metaphor.
VELSHI: There you go.
It is delicate, though, with the first lady because she is well regarded, and part of why she may be well regarded is that she's not been in the fray of the controversy about this presidency.
HENRY: You're right. Her approval rating is at 65 percent. Her husband, 45 percent. So, she's 20 points above.
Same exact scenario in 2006, I remember, with Laura Bush and President Bush. It was about a 20, 25-point spread. Part of that, though, we have to acknowledge, is that the first lady in a way, has it easy as her own advisors acknowledge. She picks a couple of issues, like healthy eating, military families, she stands up for them. Those are pretty popular. There's no downside to that, really, whereas the president, everything that comes on his desk, he takes responsibility for it. He's going to get hit.
And I think the bottom line is that she may -- they realize inside the White House she's going to risk a little bit of that approval of 65 percent approval rating by going out and engaging in politics. There's a reason why she's popular. She's not a political figure. Now she may spoil that ever so slightly. But they say, look. She's going to be positive. You're not going to see attacks. You're not going to see negative campaigning from her. At the end of the day, they think it won't really hurt her. If anything, it will help Democrats.
That's why she's going to all of these key battles. Illinois, Colorado. These are all Senate races that Democrats have to have to keep control of the chamber, Ali.
VELSHI: Hey, you know, I've just -- I know you're a bit of a gym rat. So I thought I'd tell you, I started working out again with a trainer. I started yesterday.
HENRY: You're looking pretty good.
VELSHI: He said there's a lot of work ahead.
(LAUGHTER)
HENRY: It could be years, not months?
VELSHI: Yes, well, pretty soon -- now that I've added working out to my regimen, it's like of like "Jersey Shore." You know, they have this regimen, GTL. Gym, tan and laundry. I'm pretty tan, I do laundry. So, all I needed was the gym. GTL.
HENRY: You know, like I've always said, I learn something new about you on this show everyday.
VELSHI: That's what you got to do. Ed, always a pleasure to see you, my friend. Ed Henry, our senior White House correspondent at "The Stakeout." And Hill Harper from "CSI: New York" watches him.
All right. One Democrat forced to go it alone, trying to carry on now that the party has packed up their checkbook. Your CNN political update, coming up next.
(COMMERCIAL BREAK)
VELSHI: There are just 19 days until the election for these critical midterms. We want to get you updated on some hot topics from the campaign trail. CNN congressional correspondent Dana Bash, part of The Best Political Team on television, joining us from New York. What's up, Dana?
DANA BASH, CNN SENIOR CONGRESSIONAL CORRESPONDENT: Hey there. Well, this is something that we just put on the ticker. Ohio Democrat Steve Drehouse is trying to turn losing his party's financial support into a winning message, Ali. The freshman Democrat learned this week that the Democratic Congressional campaign Committee - easy for me to say - the DCCC -- was pulling the resources out of his reelection campaign. It's a sign that national Democrats consider his campaign a losing battle.
But in a really unusual and kind of remarkable move, Drehouse set up a web video saying that the DCCC, his own party, is walking away, so he asked voters to send him campaign money. He's in a conservative district. He's in a rematch with the Republican he beat two years ago.
Next up on the ticker is an advertisement that made us stop in our tracks. One of the most fascinating dynamics, Ali, of this election year is the way Democrats have really stayed away from campaigning on health care reform. Well, New York Democratic congressman Scott Murphy is bucking that trend. He's got a new ad that goes after his Republican opponent for wanting to repeal the health care law. Now, Evan Tracy is somebody who's a great guy who helps us with tracking campaign commercials. He tell us that this is the first TV ad he has seen that comes close to defending the health care law, Ali.
And last on the ticker is an item that we have about money flowing into this year's election from outside groups, those groups who are not directly working with the campaigns or the political parties. We've heard a lot from the president and other Democrats complaining about it, especially those groups who don't have to disclose their donors.
But you know, Democrats do it, too. They're outspent. They're not as big, they're not as wild, but they're out there. And they're trying to compete with the Republicans. Right now, the outside groups are outspending, Democrats -- Republicans to Democrats, 9 to 1.
VELSHI: Yes, I think there's the story. It's not who - to me, it's not as much who is doing it on what side. It's the fact that this is how our elections have changed. I mean, there are a lot of people that thought too much money was spent on elections, but now it's money not from directly interested parties. I mean, they're obviously interested parties. I think that is remarkable, how that is going to affect now elections go in the future.
Dana, you followed it for so long. It really makes you wonder whether somebody who has just got good ideas, there's just no way they can run. They can't compete with that kind of money.
BASH: You have to have good ideas, and you have to have a lot of money right now. That's really the bottom line. The watchdog groups whose job it is to try to monitor all of the money flowing through the elections, they can't even track a lot of this stuff. That's how hard it is. They call it the wild west right now. That's how our election system - that is what is going on right now.
VELSHI: Dana, good to see you. Thanks very much.
BASH: You too, Ali.
VELSHI: Hey, be sure to stay with CNN for complete coverage of the key races and the key issues that are heading into these midterm elections. Your next CNN political update is just an hour away.
"Wordplay" is coming up next. We talked about today's word earlier this hour. Now, we'll have a broader discussion, if you know what I mean. Stay with me.
(COMMERCIAL BREAK)
VELSHI: Time for "Wordplay." We're going to break down something that we talked with actor Hill Harper about earlier in the show. I'm talking about broadband. The term has been around for a while. It actually originated in radio systems engineering. It refers to a telecommunications signal of greater bandwidth or capacity for traffic than the standard signal. Now, in the Internet age, it's come to be shorthand for high-speed Web access. Remember when we all had dial-up and web pages were maddeningly slow to load? Broadband Internet technology more than doubles the speed. The processing rate of dial-up.
Now, there are different broadband technologies out there. You might have DSL or direct subscriber line, which uses your phone line to get you on to the Web. Cable internet uses your cable TV lines. Your cell phone might use one of the broadband standards like evolution data optimized or EVDO for short.
All right. That's it for us. My good friend Don Lemon is standing by with more of the NEWSROOM. Don?
