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Holes in the Web; World Economic Forum

Aired January 26, 2011 - 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: Snow, sleet, freezing rain made for a rough morning, but the snow-sick Northeast looks set to have a nightmare evening commute. Yet another storm is blanketing D.C., Baltimore, Philly, New York, and Boston metros.

(WEATHER REPORT)

VELSHI: All right. Washington, as Bonnie says, might be icing up today, but at last night's State of the Union, the mood was practically warm and fuzzy. Members of both parties following through on that call for civility in the days after the Tucson shootings. They intermingled, instead of sitting separately, as they usually do.

Reviews of the new arrangement were appropriately mixed. Some lawmakers loved it, some people didn't. And then there's the take you're about to hear in today's "Sound Effect."

(BEGIN VIDEO CLIP)

REP. BRAD SHERMAN (D), CALIFORNIA: It's not a new experience to sit next to a Republican. It's not like they're from Mars or Uranus. Sitting next to a Republican is pretty much like sitting.

(END VIDEO CLIP)

VELSHI: That was Congressman Brad Sherman of California. It seems like he's a pretty funny guy in general.

In a radio interview yesterday, he admitted that he didn't have the date for the speech confirmed. There's no alcohol available at the State of the Unions, and he spoke glowingly of beer goggles.

OK. Other big stories moving today.

The Dow has pushed past 12,000 for the first time in two-and-a- half years. There it is right there as we -- I've been trying to get this picture for you all day. Every time we go to the Dow, it has moved off of 12,000.

Right there, 12,000. It's been fluctuating around that point a lot. Don't worry about the round numbers, but it is something that hasn't happened in a while.

Things have settled a bit now ahead of the Federal Reserve's policy statement. It should come out in about 10 minutes. The Fed is meeting. They do this every six weeks or so. No major changes are expected from the Fed. We are not expecting any changes in interest rates. But analysts are looking to see how confident the Federal Reserve Board is in the improving economy.

They look at a lot of data in between the meetings, and they come out and tell you, are we looking at inflation, are we looking at economic growth? What are we expecting to see?

We'll keep watching Wall Street for you and we'll update you on any big moves.

And oh, what a familiar feeling for Toyota. The world's biggest carmaker has just announced another huge car recall.

It affects 1.5 million cars in all. Nearly 250,000 of them here in the United States.

The issue is a potentially loose fuel pressure sensor in some Lexus IS and GS sedans. We're looking at model years 2006 to 2009.

So if you own one of these, what do you do? Well, for now you just keep checking your mailbox. Lexus says when it's got all the parts it needs to make repairs, it will send official safety recall notifications. Make sure that the dealership or the company has your mailing address.

And with anti-government protesters swarming the streets of Cairo for a second day, police have started to crack down. Water cannons, tear gas, sticks, fists, everything employed in today's demonstrations. Meantime, the government reports four people guy did, more than 100 security forces were injured in yesterday's huge protests.

And a mine explosion has killed 23 people in northeastern Colombia near the border with Venezuela, according to Colombian national radio. Several others may still be trapped in the rubble. The state government says that a buildup of methane caused the disaster. An explosion, by the way, at this very same mine killed 32 people back in 2007.

All right. Have you ever wanted to hijack a government Web site or a university Web site, or steal some data? You might not need a lot of know-how. You might just need a little cash.

After the break, the world's most famous former hacker joins me with the latest apparent hole in the Internet.

And check this out. There has been very little research on the connection between guns and violence in the last 15 years or so. "The New York Times" wrote a great article on the subject. We want to hear from you throughout the show on gun research.

Head to my blog, CNN.com/Ali, or go to my Facebook or Twitter pages. Give me your input. You'll see discussions going on, on Facebook and the blog. Do you think there needs to be more research on the connection between guns and violence? We'll read your comments a little later in the show.

(COMMERCIAL BREAK)

VELSHI: Anybody can spend a few bucks and put up a Web site, but what if you could hijack someone else's site for less money than it would cost you to actually make your own Web site? The prospects for mayhem are huge, and that's why Internet security experts are losing sleep over this Web site.

It purports to sell secret information from or administrator access to a variety of sites. You can see them all there listed on the left belonging to the U.S. military, the Italian government, a Chinese university, the state of Michigan, an eclectic mix. Lots of places that you otherwise -- and look at the prices on the right.

Mark (ph), just show them those prices.

You can get full site administrative control for 88 bucks, 99 bucks, 55 bucks, 33. This is crazy.

One called "level of control"; the other one, "price." These columns, full site administrative control is a popular offering, starting as low as 99 bucks. You can get in there as administration.

Commandeering a U.S. Army site, by the way, is a little more expensive. That will set you back $499 if you believe the seller isn't also a scammer.

The issue now is whether now or in the not-too-distant future anybody with the price of a pair of shoes can buy you, your Web sit site, your passwords, or CENTCOM'S battle plans.

Kevin Mitnick knows a lot about Internet security and its shortfalls, real and imagined. In his younger days he penetrated some of the most complex computer networks in the entire world, and spent five years in federal prison because of it. Those are his bona fides.

Today he's a sought-after expert and consultant. He joins us today from Las Vegas.

Kevin, you know --

Hi, Ali. How are you?

VELSHI: Good to see you.

I have to say, I didn't realize -- I thought that we were concerned about people taking over entire systems and cyberattacks and cyberwarfare. This is much simpler. This almost flies under the radar. I don't think most people know you can buy administrative access and passwords to things that you have nothing to do with.

KEVIN MITNICK, INTERNET CONSULTANT: Yes, it's kind of a new trend. Before it was all about buying credit card numbers and bank accounts and people's Social Security numbers. Now it's gone to military, government, and university Web sites.

VELSHI: Well, first of all, this site says that I can buy administrative access to a military site for 499 bucks.

Is that even true?

MITNICK: It's hard to really tell. There's a lot of misspellings. The guy who drafted this shopping list should have used spell checker.

VELSHI: Right.

MITNICK: So it's really hard to tell if he's a scammer. But he also actually offers other services. Like, he'll hack any site for you for 10 bucks. If it's high-profile site like "The New York Times," it might be a little bit more money.

You know, you'll pick a company, and he'll scan that company's Web site for vulnerabilities for only $2. So, this guy is kind of making it a business to break into major companies and government Web sites, and basically selling it online.

VELSHI: There's a bunch of universities listed here. I could get it for $55, $80, whatever the case is.

What would that get me? Are these sites in danger?

MITNICK: Well, of course. What he's selling is full administrator access.

If that particular site has customer records like people's names, Social Security numbers, e-mail addresses -- e-mail addresses are extremely valuable for spammers -- personal identifying information like Social Security numbers for identity theft. And what he does he actually put in a shopping list. He called it high-value information, and the price would be higher.

VELSHI: Right.

MITNICK: You know, you would sell those for -- at the high end of the road. So, basically --

VELSHI: Right. So you've got for $400, $500 that he's selling, high-value stuff. Is this not illegal, Kevin?

MITNICK: Of course it's illegal. But also, not only does it show that the criminals are able to openly sell illegal access, but it goes to show you that these sites, these government sites, are insecure, because I suspect that this fellow is not that sophisticated. I think he used what we call an automated tool to break into these sites.

VELSHI: Right.

MITNICK: So, you know, why do they have such shoddy security? They really need to --

(CROSSTALK)

VELSHI: Well, OK. So that's the next obvious question. If you're one of these companies, or universities, or whatever, listed on his page that somebody can buy access to for $80 or $90 or $100, how easily can you solve that problem? In other words, how easily can I say if I am the Department of Defense site that he's selling access to, a particular site for $400, how quickly can I stop that from being perpetrated?

MITNICK: Well, it depends. It depends on the vulnerabilities, but I suspect that, again, this kid used an automated tool. So it should be quite easy if they actually audit their security issues.

The problem is with application security. In this case, we believe that there's a language that you use to communicate with databases, and he was able to manipulate this language in such a way to gain illicit access to these sites.

And this a very common technique that hackers use to break into companies. So, if these military -- these -- the Department of Defense, the military, and these businesses actually do a security audit, hire a company, have people that are inside look for these security problems, then hopefully they won't be in the next shopping list that's online.

VELSHI: Yes. Well, you said it used to be credit card stuff. And boy, we've all been through this experience where somebody's lost our credit information, somebody we subscribe to. But now I'm worried, what if my company is one that he can sell access to for $80 or $100 or $200?

That means that my information that my employer has, or anybody I'm a member of, that information can disappear for less than a few hundred bucks.

MITNICK: Yes. But you've also got to look at it. This guy is advertising a shopping list. If your company is on that shopping list, you're probably going to find out very quickly and you're going to be able to close that loophole.

VELSHI: Yes.

MITNICK: So, you're going to have to look at what is the real window of exposure? Well, you were hacked, but now how quickly are you going to find out about it because this guy is trying to sell access to your company's assets online?

VELSHI: Yes. All right. Well, everybody should go check it out and make sure your company's not on it. And if it is, get it fixed real fast.

Kevin, good to see you. Thanks very much for being with us.

Kevin Mitnick. MITNICK: A pleasure.

VELSHI: All right. Innovation, education, infrastructure -- President Obama said those are the keys to job creation, and he talked about it in his State of the Union Address last night. Maybe you heard it.

Do the titans of business agree? We'll tell you, next.

Taking the lead. That looks like Davos, Switzerland, to me.

(COMMERCIAL BREAK)

VELSHI: As we mentioned earlier, it is day one of the World Economic Forum in Davos, Switzerland. Thousands of CEOs, world leaders and economists are there to solve problems facing the world. And one of the biggest issues on their minds worldwide is job creation.

My good friend, CNNMoney.com's Poppy Harlow spoke with some of the world's most influential leaders today in our "Taking the Lead" report.

POPPY HARLOW, CNNMONEY.COM: Hi there, Ali.

Well, it's actually here in Davos, Switzerland, a tiny town in the middle of the Alps, where a number of lawmakers from around the world and CEOs from companies literally across the globe are gathered to talk about the economy, about what they're deeming the new reality. And a very big part of that, as you know, Ali, is jobs.

It is hiring not only in the U.S., but also in Europe. Still, clearly a jobs crisis in the United States.

President Obama addressing that as the key point, the focal point of his State of the Union Address on Tuesday night, saying we need three things for job creation. He spoke about innovation, the need to be the best innovators and the most educated, and also the need for infrastructure.

Well, the companies here, their heads are the ones that need to do that hiring. The private sector needs to hire in a substantial way. And when you look at the latest numbers, it's astonishing.

Private companies have about $2 trillion in cash that they are sitting on, waiting to hire with. We wanted to know, when will they hire? What's the jobs outlook?

Ali, take a listen.

(BEGIN VIDEOTAPE)

BEN VERWAAYEN, CEO, ALCATEL-LUCENT: You hire if you see opportunity. That's why I think opportunity is so important.

Jobs, of course, is the currency for politicians, but also for companies. If you look to what is a healthy environment, cohesive societies in which you can operate and experiment and do new things, job is a currency we need to take seriously.

MUHTAR KENT, CEO, COCA-COLA: We invested, for example, last year $3 billion in the United States in 2010 in our infrastructure, in our brands. That investment invariably leads to job.

KEVIN KELLY, CEO, HEIDRICK & STRUGGLES: Every time I talk to a CEO, it's about yes, we need to add individuals, we need to upgrade our talent, we need to focus on retention.

HARLOW: Do you expect a job pickup, a meaningful one, this year?

KENT: I think we will see an improvement compared to the past 12 months.

NOURIEL ROUBINI, CHAIRMAN, ROUBINI GLOBAL ECONOMICS: I expect that the U.S. is going to create about 150,000 jobs per month this year, but 150,000 is just increasing the labor supply, so it's not going to lead to a significant reduction in the unemployment rate. So unemployment is going to remain a significant problem for the U.S. economy for many years.

KELLY: I would say it's going to be a lot better than 2010. But, you know, we're seeing that trend come in to 2011, so I'm pretty optimistic about this year.

(END VIDEOTAPE)

HARLOW: And Ali, I thought it was very interesting when one of those executives said jobs is a currency that we need to take very seriously. It certainly is.

I also had a chance to speak with Tom Donohue. He's the head of the Chamber of Commerce in the U.S. He is the voice for U.S. businesses. And he was very clear on his point, Ali. And that is that this administration, he thinks, is still over-regulating with Wall Street reform, with health care reform. He says that creates uncertainty, and that is a big reason why he says we are not seeing the hiring at the levels that we need to in this country right now.

But a lot of opinions here on jobs and hiring. Our full coverage from Davos, our interviews, you can see them on CNN Money -- Ali.

VELSHI: Poppy, thanks very much.

Hey, listen. Let me bring you up to speed on some of the stories that we're following right now.

The Federal Reserve just wrapped up its first open market committee meeting of the year and issued an updated policy statement. We're expecting to get it any moment now.

Analysts and investors have been waiting to see how confident the Fed seems in the improving economy. The markets are pretty confident ahead of the policy statement. The Dow topping 12,000 for the first time in nearly three years.

In other business news, new home sales jumped 17.5 percent last month, to their highest levels in eight months. That is much better than analysts had expected.

Compared to a year earlier though, December sales were still down more than seven percent. The Commerce Department says the median sales price, the price at which half of all new homes were sold -- higher than and half were sold lower than -- rose $26,000 last month to $241,500.

But very few of the houses traded in America are new houses. Less than 10 percent.

We've got an official cause of death in the Elizabeth Ennen case. This is the 15-year-old Texas girl reported missing three weeks ago.

Her body was found on Monday. According do her autopsy, Ennen died as a result of asphyxia and strangulation. Police already have their suspect in custody. So far, just charged with kidnapping. He's a family friend and the father of the kids who Ennen was babysitting the night she disappeared.

The Northeast getting hit with yet another round of severe storms. Travel already a mess. We'll check the weather situation with Bonnie Schneider when we come back.

Stay with us.

(COMMERCIAL BREAK)

VELSHI: Hey, we've got this just in. Before the break, I told you the Federal Reserve coming out with its news.

As we expected, interest rates are remaining unchanged. That means the Fed rate is between zero and quarter of a percentage point. That means the prime rate is three percentage points higher than that. Three percent to 3.25 percent, that will affect what you pay on your loans.

Let me tell you what the Fed did say. They studied all the economic data, and they have said right now that progress towards its economic objectives is disappointingly slow, that the economic recovery is continuing, but it is insufficient to change labor conditions.

That's their way of saying not enough is going on fast enough to get that unemployment number down, to get more people employed. So, a bit of a pessimistic review. Just looking at the market, it's dropped a few points on that news, because everybody kind of expected that's what they were going to say.

(WEATHER REPORT)

VELSHI: All right. There's been a change in the condition of Congresswoman Gabrielle Giffords. I'll tell you more about that right on the other side of this break.

Stay with us.

(COMMERCIAL BREAK)

VELSHI: If you are just tuning in, here is what you missed. President Obama is taking his jobs message to Manitowoc, Wisconsin today. He toured a solar energy center there, touting the business as the type of innovation America needs.

(BEGIN VIDEO)

OBAMA: We need to get behind clean energy companies like Orion. We need to get behind innovation. That's how we'll meet the goal I set last night and make sure 80 percent of America's electricity comes from clean energy sources by 2035.

(END VIDEO CLIP)

VELSHI: The president is vetoing - I'm sorry, visiting -- two other businesses that he says promote the type of innovation that he was promising in the State of the Union speech last night.

Congresswoman Gabrielle Giffords is now in a rehab facility in Houston after being released from intensive care earlier day. Eighteen days after she was shot in an assassination attempt. Doctors have upgraded her from serious to good condition. Congresswoman Debbie Wasserman-Schultz, a friend of Giffords, reports that she was well enough to watch some of the State of the Union speech on TV last night, and that Giffords' husband, Mark Kelly, called the development exciting.

Parts of the Northeast, as we were just telling you, are bracing for another winter storm already starting and raging until tomorrow. The snowstorm is already causing major delays at some airports. The FAA Web site reports New York's LaGuardia airport and Newark International are both seeing delays averaging about five hours, while Philadelphia International is seeing delays of about two-and-a-half hours. If you've got plans to travel north or from the Northeast, check your airline first or you'll be spending a lot of time at the airport.

(MUSIC PLAYING)

VELSHI: You've heard of him. You might have seen him as the emcee on the Golden Globes award ceremony. But wait until you see Ricky Gervais back in the 1980s. You are not going to believe your ears.

(COMMERCIAL BREAK)

VELSHI: OK. We've seen some remarkable pictures coming out of Egypt today, the second straight day of protests calling for President Mubarak, who's been the president for 30 years, to step down. Heavy police crackdown, water cannons, batons, Egypt is the Arab world's most populous nation. Look at the streets there. Protesters say they're inspired by demonstations in Tunisia, which forced that country's longtime leader out of office and to flee the country.

Michael Holmes from our sister network CNN International here with us now. Michael, you have covered this extensively, not only from here and for CNNi, but you've been in the region.

MICHAEL HOLMES, CNN INTERNATIONAL ANCHOR: Yes.

VELSHI: Here's the tricky question, not what's going to happen and what's happening. That is a remarkable sight in and of itself, but the U.S. has a tricky situation. Do they support popular uprisings, which you think that Americans would support, or do you support the government in power because they're allies?

HOLMES: That's exactly right. And it's a very dicey situation for the administration.

What's interesting -- and as you say, I've spent a lot of time in the Arab world. And what they'll say to me in various countries around there - I go to Iraq or whatever they'll say, the U.S. pushes democracy in Iraq, we want to see free and fair democracy here. And then in Tunisia there's an encouragement for the popular uprising that was going on there.

But when it comes to our allies, those who serve our foreign policy interests, they're not part of the conversation when it comes to the spreading of democracy, having the free and fair elections--

VELSHI: Which is what makes people think America can be inconsistent sometimes in its foreign approach policy.

HOLMES: Absolutely. When the U.S. wants to be taken seriously in that part of the world -- I've had friends in Iraq say, you say that about us. But look what's happening there, look at the Saudi Arabia, the other regimes that don't get pushed towards the same thing.

VELSHI: Let's talk about Tunisia for a second. Because you must have had the same reaction as I did when I saw this uprising and the fact that it actually got this leader was forced to flee. Remarkable. That is unheard of in a dictatorial Arab nation.

HOLMES: It is. It's a first.

VELSHI: What's happened to this leader now?

HOLMES: Well, he's fled. He's off in Saudi Arabia at the moment. And actually, a lot of his family has fled, we've seen the villas they lived in, the opulent lifestyle. They basically pillaged the economy themselves to live their lifestyle. He's gone to Saudi Arabia. Some of the family is in your homeland, up in Montreal, actually, in Canada.

And what happened is the interim government, if you like, has issued arrest warrants Ben Ali, the former leader and members of his family, for precisely those things. For economic things. And some odd ones like carrying weapons and fermenting violence on the streets. And so, those arrest warrants are out there. Interpol is it involved. We'll see what happens.

But of course, on the streets of Tunisia, there's a gained mistrust of the interim government because it's formed, by and large by the old guard. So, they're saying this is the same government we had before by a different name.

VELSHI: Let me ask you a quick question. Last night in the State of the Union, the president talked about Iraq. He spoke about Afghanistan. Let's talk a little bit about Afghanistan for a second. General David Petraeus has come out and issued a letter basically to the troops with a fairly positive picture.

HOLMES: Yes, he has. You know, the idea of -- I talked to a general yesterday actually in theater there, and what they're saying is the idea of drawing down, being out by 2014, that is fanciful stuff. The mission will not be done by then. It's just not going to happen in that timeframe. There's too much to do.

And from the -- winning hearts and minds is not up to the U.S. military. It is now up to the Afghan government. That trust on the street does not exist. The government is seen as corrupt, it's seen as full of cronyism. There's warlords for goodness sake in the government.

Last time I was there, I was talking to a policeman commander actually in Kandahar. And he was saying one of the problems he's got is he gets guys to join the police force, they go in to put their papers in, and they're told there's a fee of $500. There's not! There is no $500 fee. That's the sort of grassroots corruption that's endemic.

VELSHI: All right. We'll change tact a little bit right now. Before you go, I want to leave you with lighter fare. Ricky Gervais, you saw a little bit of this. His stint as a rocker.

HOLMES: Channeling David Bowie.

VELSHI: Back in 1980.

(BEGIN VIDEO CLIP)

RICKY GERVAIS, ACTOR/COMEDIAN (singing)

(END VIDEO CLIP)

(COMMERCIAL BREAK)

VELSHI: Time now for the big breakdown, and I do mean big! Today, the nonpartisan Congressional Budget Office revised upward, sharply upward, its budget deficit forecast for 2001. The new figure, $1.5 trillion. Almost all of the increase comes from the tax cut deal that the White House signed with Congress in the last days of 2010. As you know, it extended for two more years the Bush-era tax cuts that were supposed to go up this year and added unemployment benefits and a payroll tax cut on top of it. Here's an even bigger breakdown for you. Take a look at this number, $14.3 trillion. That's the U.S. government's credit limit as set by law and habitually raised as our accumulated debt rose even higher. It's due to be raised again in the next few weeks, and that's why politicians are racing to see who can cut more spending faster.

But here's the catch. By law or by choice, they are focused on a very small slice of the total budget. 76 cents out of every dollar the federal government (AUDIO GAP) spends goes for things that can't be cut. Medicare, Medicaid, Social Security and so-called entitlements, plus interest on the money we borrowed before. What is left is called discretionary spending. And most politicians want to exempt part of that for defense and homeland security. Some Tea Party lawmakers are targeting the Education Department, the Energy Department, Transportation Department, Justice Department.

If you really want to lose your sleep, check out another forecast. This one by the Government Accountability office, the GAO. This one is fascinating. Put together on our site money.com by Jean Sahadi (ph), senior writer. The GAO predicts that by 2020 when you take everything out that you can't cut, the slice of cuttable spending, including defense, will be down to eight cents on the dollar. The government is going to have to run on eight cents on the dollar. Entitlements and interest will take up 92 percent of federal spending. That's why this is an issue that we have to confront.

On Capitol Hill today, in the chamber where President Obama addressed the very problem just hours earlier, Republican lawmakers are trying to cut a sliver of discretionary spending that they say we would never miss: public funding for presidential elections. This was a post-Watergate reform designed to keep the so-called special interests at bay. Nowadays, many office seekers reject public funding because they can raise more money on their own and they don't have to stick to specific restrictions if you don't take the public money. Listen to a bit of today's debate.

(BEGIN VIDEO CLIP)

REP. AARON SCHOCK (R), ILLINOIS: Earlier this month, I read articles about President Obama's reelection campaign plans. On raising upwards of three-quarters of a billion of dollars. There is no system of public financing that can accommodate anywhere near that level of spending. That is why I believe the president's strong opposition to legislation abolishing a system the president himself found unworkable in reality is profoundly hypocritical.

REP. DAVID PRICE (D), NORTH CAROLINA: Mr. Schock, talk about having it both ways. He comes on to this floor to condemn President Obama for opting out of the system, and then he proposes to abolish the system so that everybody has to opt out. Neither President Obama nor anyone else can participate. The logic of that is just totally, totally escapes me.

(END VIDEO CLIP)

VELSHI: Now, how much money would cutting the presidential election fund save? $617 million. Million with an m, not billion with a b, over ten years. Even if all of those savings came in one year, it would be 0.02 percent of the federal budget. This is why the president said last night, let's not get too carried away with some of the things that don't make too much of a difference if we cut. Doesn't mean we shouldn't take care of them. It just means understand the impact.

OK. Let's talk about guns and violence. Did you realize there has been very little research on guns and violence in this country in the last 15 year? There's a great article in "The New York Times" on the topic. I posted it on my blog, CNN.com/ali as well as my Facebook and Twitter pages. We received, remarkable -- the feedback we got from you, got a ton of responses from you on this topic. Here are a few.

Pete from Facebook says, "It's not about guns. They are only the tool. The problem is attitudes and a system that allows us to deflect responsibility." Danny says, "Yes, there is such a knee-jerk reaction, and then everybody start screaming about rights. Let's do real research and figure this out." Tim from Facebook. "No, there needs to be more research on the mentality of society. It isn't the guns that kill. It's the people that pull the triggers. If that's the case, then every person that drinks alcohol needs their right to own a vehicle taken away." James writes, "Guns do not cause violence. People do." I've heard that somewhere. "A gun is like a hammer. Nothing will happen until someone picks it up and uses it."

Malita posted this to my blog. "The right to bear arms was referring to the rifles available at the time of the writing of the Bill of Rights. I very much doubt that today's multiple use of a variety of automatic assault weapons was meant to be included." Alvin says, "Absolutely. I believe if we modify laws and put further restrictions nationwide, we can possibly save some lives."

Robert posted this to my blog. "As a criminologist, I can tell you more research about guns is a waste of time and money. Guns are inanimate objects. The focus of our research should be on criminality and criminal prevention. Yes, I said criminal prevention. Quite frankly, we need to focus on growing better people, not on restricting their rights."

Ross replied with this comment on Twitter. "I think the continued rise in violence with guns is a direct reflection of our nation's families struggling to keep things together."

And Katherine said this on Facebook: "No, we don't need more research. We need more common sense and a society that cultivates civility and respect rather than offensiveness and disregard."

Coming up in just a few minutes, I've got a great panel of guests who take issue -- are going to take sides on the issue of guns and research about guns and violence.

All right. We know many of you are watching us with your laptop or smartphone. We want to hear from you right now. This is a new part of the show called "You Choose." I'll give you three headlines. Then you go vote at my blog, CNN.com/ali, on which story you'd like to here more about.

First, porn found by a child on a Nintendo DSI game system. We'll show you how it was found.

Also, how about a basketball game with a final score of 108-3? It happened in Utah and I've got details.

Or your choice, some incredible -- and I mean incredible video -- of a 31-legged race by children in Japan. When I say 31-legged, I want you to think of some of the biggest three-legged races you've seen times ten. So, o vote on my blog right now. CNN.com/ali. We'll bring you the winning story in ten minutes. Once again, go vote on my blog, CNN.com/ali.

(COMMERCIAL BREAK)

VELSHI: Breaking news coming into the CNN NEWSROOM. CNN national security contributor Fran Townsend has confirmed that the Department of Homeland Security is ending its color-coded terror alert system in April. In its place, DHS will move to a system that focuses on specific threats in geographical areas. It will be called the National Terror Advisory System. DHS secretary Janet Napolitano will officially make the announcement tomorrow. They are ended the color- coded system.

Well, in the wake of the tragedy in Tucson, we heard the inevitable talking points on both sides of the gun debate. You have heard them all before. I have no need to repeat them. But if you remember your high school science classes, the way to figure out who is closer to being right in any particular argument is often scientific. You make an educated guess, you do a controlled experiment and you come up with a conclusion.

But scientists in the field of gun safety research -- when I say gun safety, I mean guns and violence -- say there is no longer money for such work and they blame one group in particular. The National Rifle Association. Let's go straight to my stream team to discuss this.

Rachel Sklar is joining us now from New York. Hey, Rachel, let me ask you this question. This is not about whether you think there should be more gun control or less or there should be more guns or fewer guns. This is an article that was in "The New York Times" saying that scientists say that they are prevented from doing research into this because the NRA thinks that kind of research is politicized, that it's all meant to back up one perspective, and that is gun control.

RACHEL SKLAR, EDITOR-AT-LARGE, MEDIATE.COM: Well, the NRA has one perspective, and that is to advance the interests of the NRA. So as between the NRA, which is a lobby organization, and scientists trying to study a specific sociological pattern, I'm going with the scientists.

I think the NRA didn't like the results, and so in that respect, said it was political. I didn't actually see any indication that a separate third party body said that actually there was political bias in the research by the scientists on guns.

But what's clear is that without research it's very difficult to answer those complex questions about, you know, does a firearm in the house make a family more or less safe? And studies have indicated that clearly that a firearm in the house actually is a cause of more danger to family members for gunshot problems.

VELSHI: The problem -- Pete Dominick joins me now. Pete, the problem is, this isn't like breast cancer. It's not like AIDS. It's not like something where we one day will find cures and they will advance how we deal with this. There are people who say this isn't scientific. Guns don't kill people. They sit on tables. I just heard -- took comments from my twitter board and Facebook page.

So, how do you make the argument that there should be bodies who research the relationship between the presence of guns and violence?

PETE DOMINICK, SIRIUS/XM RADIO HOST: Well, first of all, I'll tell you this, Ali Velshi. I've never been that into the whole gun issue because I carry two lethal weapons with me on a regular basis, as you personally well know, not to mention my razor because you know you have to do a little touchup.

But Ali, listen, there are studies and you're right. It's not science like breast cancer, that's a good argument. But I'm sorry I'm going to have to agree with our other guest, Rachel Sklar. I think studies are important and, yes, we have studies to show how dangerous having, say, a pool in your backyard is.

There are things that we can do, like put gun locks and lock away guns. There's a whole lot of things that we can learn. But this country, we are so obsessed with our guns and so afraid that somebody is going to take them away -- Ali Velshi, I know a guy who knows a guy who owns 150,000 bullets. That's right. I don't need them. I've got these.

But I do like the studies. I think they matter. And the gun lobby and the NRA, they're in the top ten of interest groups in terms of lobbying Congress. You can't get any legislation passed.

VELSHI: Rachel, that then takes us to the larger issue, and that is that this is a taboo subject to a lot of people. There are a lot of people - and on both sides. There are people who believe in their second Amendment rights, and they say that allows them to carry a gun, in some cases to protect them even against the government. And there are those who think you don't need guns anywhere. Is there any room, Rachel, for this debate to be anything other than polarized?

SKLAR: I don't think it's a taboo subject. I think that the NRA has so much power that it's become an unwinnable subject. It was one of the most depressing things come out of the tragedy inTucson was hearing a roundtable of political experts on a Sunday show sort of sit around and wonder, is this going to change anything with gun control? Will gun control get tackled? And five political pundits said no, no, no, no, no. And you know, it's because it's perceived as a third rail, it's -- you're not going to win it in the red states. There seems to be this unwillingness to even address it.

VELSHI: yes.

SKLAR: The Constitution doesn't guarentee absolute freedoms. It's absolute freedoms within the parameters of working within a larger society. And you know, a small abridgement of the freedom to -- the right to bear arms, it seems like very reasonable trade-off for preventing serious tragedy in society.

VELSHI: Hey, guys, I got 30 seconds. I want to just ask you for a quick response. Pete, a lot of criticism about CNN's decision -- and some support for it -- to air the Tea Party response by Michele Bachmann last night. Your thoughts, good or bad idea? Quick.

DOMINICK: Number one, we've got to get ratings. Number two, listen. Anytime you can get Michele Bachmann on television, put her on television, Ali.

(LAUGHTER)

VELSHI: Rachel?

SKLAR: She's a fringe member. She's not a national leader. This was the State of the Union address. You can report on her response without giving it time as though she is an official elected representative. The Republicans picked their person, and until the Tea Party is a complete separate party, you know, on the ballot, I think that that was a mistake on CNN's part to glorify them.

VELSHI: Rachel, Pete, great to see you both. Thanks very much for joining us. We'll have this kind of conversation every day on topics you're buzzing about.

Hey, your choice on the final story of the day. You voted on my blog. I'll tell you what your choice was right after this.

(COMMERCIAL BREAK)

VELSHI: Now back to the story you picked on my blog, a story you wanted to hear the most about. It's a brand new segment on the show called "You Choose."

Here's the winner. A family in Ohio was in the market for a used Nintendo DSI game system for their six-year-old son. They found one at a Game Stop in Springdale, Ohio. They also found pornographic photos inside the console. The kid's mom believes the pictures were taken by the previous owner with the unit's built-in camera. The Game Stop swapped out the game system for a brand-new one at no additional charge.

Moral of the story, check all used game systems or any of your electronic stuff before handing them off to your kids. That's what I do! I check my show to make sure it's safe before I do what I'm about to and hand it over to Brooke Baldwin for more NEWSROOM. Brooke?