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Middleton's Waist Not That Small; Palin Suspends Bus Tour; Buffett; Tax the Rich More; Gadhafi Forces Fire Scud Missile; Gadhafi Forces Fire Scud Missile; Stocks Step Back; Comparing Perry and Bush

Aired August 16, 2011 - 09:00   ET

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

KYRA PHILLIPS, CNN ANCHOR: Good morning, you guys. We are on the road to the White House.

The president is in the Midwest promising jobs, fighting to keep his, and here is the travels of the Republicans trying to wrestle it away. They are hitting key battleground states today. Rick Perry is in Iowa, Mitt Romney is in New Hampshire, and Michele Bachmann is in South Carolina.

Shannon Travis is shadowing the Perry campaign. Brianna Keilar is following the Obama bus tour. And in Washington, Paul Steinhauser and Mark Preston have the wider views.

Now to that straight shooting Texan who has dominated the headlines on just his second day of campaigning. Rick Perry raising his profile and more than a few eyebrows . And one person who wound up in his crosshairs, Ben Bernanke, chairman of the Federal Reserve.

(BEGIN VIDEO CLIP)

GOV. RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: (INAUDIBLE) pretty more money to play politics in this particular time in American history is almost traitorous - or treason, in my opinion.

(APPLAUSE)

(END VIDEO CLIP)

PHILLIPS: Well, the presidential candidate/Air Force pilot also says the military doesn't respect Barack Obama because he never served. Perry told a military gathering, quote, "I want to make sure that every young man and woman who puts on the uniform of the United States respects highly the president of the United States."

In fact, Perry even seems to question Obama's patriotism. Listen to this.

(BEGIN VIDEO CLIP)

QUESTION: You said you would be a president who loves America. Are you suggesting the current president does not love America?

PERRY: No, you need to ask him. QUESTION: (INAUDIBLE)

PERRY: I'm saying you're a good reporter. Go ask him.

(END VIDEO CLIP)

PHILLIPS: Well, CNN's Shannon Travis is shadowing the Perry campaign in Iowa. Shannon, Governor Perry even had a gem for you, I understand, in your cameras?

SHANNON TRAVIS, CNN POLITICAL PRODUCER: That's right. He did have a gem for me. Kyra, it's important to question whether the newly minted Republican presidential candidate, if this is his Texas swaggering bravado, if he is really trying to make a splash. You know, he had a little bit of ground to make up because he's just getting into this race, got some more established contenders who have been in the race a little bit longer.

But as you just mentioned, he did say a little bit of things to me that of interest probably to one of his opponents, and we'll just say he sealed it with a kiss. Take a listen at this.

(BEGIN VIDEO CLIP)

TRAVIS: Governor Perry, Romney took a swipe at you today saying that he has private sector experience and that makes him better qualified to create jobs.

PERRY: Give him my love.

TRAVIS: What do you think about that, though, sir, that he has private sector --

PERRY: I think oranges and apples. Running a state is different from running a business.

TRAVIS: And he will make that a centerpiece of his campaign.

PERRY: What I would say is, go, take a look at his record when he was governor and look at my record when I'm governor. And then, you've got some apples to apples.

(END VIDEO CLIP)

TRAVIS: So, there you have it, Kyra. Rick Perry essentially kissing off criticism from Mitt Romney.

PHILLIPS: I thought at first he was blowing you a kiss, Shannon, and then you finally got him up to the mike. Great job. You're always the one to get right in there and get the best sound. Appreciate it.

Well, a win in Iowa doesn't always guarantee smooth sailing in the White House. Our deputy political director Paul Steinhauser has the history to prove it, right Paul? PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Yes, the Iowa caucuses don't always pick the Republican nominee, Kyra. Doesn't happen all the time.

Take a look at this. Four years ago, it was Mike Huckabee who won the caucuses. That was a big come-from-behind victory, I guess you could say. But he didn't end up winning the nomination, did he? John McCain did.

Back in 2000, I guess a better indicator. George W. Bush, he did win them. And he went on to win the nomination and the presidency. Back in '96, Dole, yeah, he won Iowa. And then he went on to win the nomination. In '88, Dole won Iowa, but no, he didn't win the nomination. George Herbert Walker Bush did. Go back eight years, Herbert Walker Bush, the senior Bush, did win the caucuses. But guess what? Ronald Reagan won the nomination. in 1980 and then he went on to win the presidency, of course.

What about some of those other candidates today? Well, they're not in Iowa. We'll start with Mitt Romney. He is in New Hampshire a second straight day. He seems to be concentrating more in New Hampshire than in Iowa. Maybe that's his strategy.

And also part of his strategy, try may not to go after Rick Perry. You know, Romney, Kyra, has been trying to run a general election campaign focusing just on Barack Obama. Today he put out another Web video attacking the president's bus tour. But at the same time, it will be kind of hard for him to ignore Rick Perry now he is in the race. The dynamics have definitely changed.

As you mentioned, Michele Bachmann, where is she today? The Minnesota congresswoman is in South Carolina today. A couple of days down there. Remember, South Carolina votes first for Southern states to vote in the primaries.

And what about Ron Paul? Listen, we haven't talked about him. He had that close second-place finish out at the straw poll in Ames this past weekend. And didn't get a lot of notice from that. But his campaign is very happy. His aides tell me they're ecstatic about where Ron Paul finished. And today he has new ads coming out in Iowa and New Hampshire.

This race - it's already been heating up, Kyra. The ride is going to continue. We will cover it all for you.

PHILLIPS: Well, as you say, those dynamics are always changing. Paul, thanks.

All right. Let's shift gears to the Obama bus tour, which is also in Iowa today. Brianna Keilar is there.

So, Brianna, the president's approval rating, less than 40 percent now. He didn't have a lot of support in these rural areas to begin with. So, what do you think? What kind of reception is he getting now? BRIANNA KEILAR, CNN WHITE HOUSE CORRESPONDENT: You know, Kyra, so far, a lot of supporters -- that certainly feels campaign-like even though the White House insists this isn't a campaign swing. And actually, President Obama did pretty well in these areas. Of the five counties that he is visiting on this three-day swing, he carried four of them and almost carried the fifth one. He won all three of these states.

But in 2010, you had Democrats really get slammed in rural areas in the midterm elections, and Democrats are very cognizant of that certainly going into the presidential election. So no coincidence, you see an emphasis here on rural issues. The president is going to be where I am right now, which is on the grounds of the northeast Iowa are - pardon -- area community college. He'll be participating in a rural economic forum today. He is going to be meeting with local business owners, small business owners, farmers, and he'll be talking ways to sort of encourage economic growth in these rural areas.

Kyra, he also will be announcing new rural jobs initiative, talking about bringing more technology to these areas. Talking about job training for rural America. And one of the very important thing to farmers in this area, increasing capital, increasing federal loans to farmers in small business owners in rural areas like this, Kyra.

PHILLIPS: He stepped up his campaign rhetoric, yes? No?

KEILAR: Oh, yes, definitely. If you were watching yesterday, he was very fiery. And like I said, the White House saying this isn't a campaign swing, but there was a lot of kind of back and forth going between President Obama and Republicans. He didn't call them out by name, but he was clearly targeting House Republicans, talking especially about this latest debt ceiling battle that we have witnesses witnessed and he has faced a lot of criticism from Republicans on jobs.

Well, he really fired back saying that Congress needs to take action. Listen to what he said yesterday in Decora, Iowa.

(BEGIN VIDEO CLIP)

BARACK OBAMA, PRESIDENT OF THE UNITED STATES: Moving forward, my basic attitude is we know what to do. I'll be putting forward when they come back in September a very specific plan to boost the economy, to create jobs, and to control our deficit.

And my attitude is get it done.

(END VIDEO CLIP)

KEILAR: He said that he would be proposing, Kyra, specifics for a jobs plan when Congress returns in September. And if that doesn't happen, if Congress doesn't move forward with some of his proposals or pass a jobs plan that he said, you know, that is something that he and Democrats could run against.

So, pretty fiery campaign language. He also had words for the entire Republican presidential field. You're seeing a lot of stepped- up rhetoric here in Iowa.

PHILLIPS: Probably see a lot more. Brianna, thanks.

Taking the bus is usually a more cost-effective approach to traveling, but that's not the case for the president and his million- dollar ride. Politico.com reporting the Secret Service told a news Web site that it bought two armored buses for 1.1 million each.

But the president won't be the only one traveling in style. The candidate who wins the GOP nomination gets the other bus.

And this quick note. As President Obama continues his Midwest bus tour, he also sits down with our Wolf Blitzer. The Obama interview with our Wolf Blitzer, today, 5:00 p.m. Eastern.

A man accused of strapping a fake explosive device around the neck of a teenager in Australia is under arrest in Kentucky. Zain Verjee first followed this for us out of London.

Zain, was this a connection between this suspect and this teen who spent 10 hours, I think it was, thinking she was rigged to a bomb?

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Kyra, this story reads kind like an investigative fiction novel. It's unclear whether there were specific links, but what police are saying is some of the links are circumstantial, they may have some kind of business connections.

This is also - it happened in an area that is incredibly wealthy. It's multimillion-dollar homes in the parts of the Sydney suburb where this happened.

Basically, this guys, 50-year-old Paul Doug Peters, broke into a home. The girl, the teenage girl was studying for her exams, and he put this fake bomb collar around her neck and police did take about ten hours to get it off her neck.

Let's take a look at the headline here. "The Sydney Morning Herald" says this: "Collar bomb hoax suspect: 'He was volatile, but he was a decent, smart guy.'" It goes on to quote, Kyra, his school mates that say this: he was "just a rambunctious, aggressive character who was very intellectual." There's another schoolmate who says, "He was a popular boy at school who played rugby aggressively and the sort of guy that was always in for a fight."

The bottom line here, Kyra, it seems as though what police say this was all about extortion. There was a note attached to this fake bomb collar basically asking for money. And then there was also an e- mail address of this guy, too. So they managed to track him. He just left that behind.

The one other strange element -- I don't know if you've ever read this book, "Tai-Pan." It's a pretty famous one. It's about Hong Kong, by I think James Clavell and there's some kind of reference in that note that he makes weaving in the story of "Tai-Pan." So, it's all a little bit weird, but police did manage to track him down to Kentucky. PHILLIPS: Yes, 9,000 miles later. Zain, thanks.

Coming up, the Americans suspected in the disappearance of his friend will be cooling his heels in an Araba jail cell a while longer. The latest on the case, live from the island.

And one-by-one, they just keep coming. Swarming a 7-Eleven, stealing stuff off the shelves. More on the so-called flash mob robbery next.

(COMMERCIAL BREAK)

PHILLIPS: All right. Let's check news "Cross Country."

Cops calling it a flash-mob robbery. A crowd of about 30 people rushed this 7-Eleven store, grabbing stuff off the shelves, in and out in just about a minute. If you can identify anyone in this video, Maryland police say please, give the police a call.

Not a fun afternoon at the water park in Sacramento. Twenty people had to be taken to the hospital after a chlorine leak. Witnesses say that the wave pool turned green and starting bubbling. Authorities suspect some kind of a mechanical problem with the chlorine system.

And a homeless man is being called a hero today after helping save an injured driver's life.

(BEGIN VIDEO CLIP)

TOM MACDONALD, RESCUED CRASH VICTIM: Heard this smash. Seen a cloud of dust. Went down there and cut the woman out of there and pulled her out of the car.

(END VIDEO CLIP)

PHILLIPS: That homeless man waited with the injured drive until the EMTs got there. Last we heard, she was in serious but stable, condition.

Gary Giordano's lawyers still say there's no evidence against him. But an Aruban judge begs to differ. The American, arrested in connection with his friend's disappearance, is being held over on the island.

Martin Savidge joining us live. So, Martin, did this ruling come as a surprise?

MARTIN SAVIDGE, CNN CORRESPONDENT: Well, it was hoped by the prosecution this is what they would get, but they surprised by the fact it wasn't just an eight-day extension as they initially requested. It's 16 days. That gives them a great deal more time to try to make a case if there is a case to be made at this particular point.

And that's the real question. Robyn Gardner, the 35-year-old missing American woman; she's now been missing for exactly two weeks. According to Gary Giordano, they were snorkeling off of Baby Beach, which is this beautiful, pristine kind of beach. He comes out of the water. He does not see her. The fear is he reports that she has died drowning.

But here is the point that the prosecutors have been investigating. They've been a number of women in the United States have come forward and made allegations of domestic abuse on the part of Gary Giordano.

You add to the fact that there has been no trace of Robyn Gardner, no indication that she actually was snorkeling. No body that has surfaced. They have no idea what has really happened to her except the word of Gary Giordano and they are not satisfied with that. So, they're wanting to investigate more.

They have enlisted the help of the FBI. And this is key here. This is probably what led to getting that extra time is the fact that the Arubans are saying, look, the FBI and the United States is assisting us and we are waiting to hear from them what they found of the search of Gary Giordano's home. We need the time.

He's been moved to the KIA, they call it, which is the correctional institute of Aruba. It's a very large prison that actually overlooks the ocean not far from the beach where Robyn Gardner was last seen -- Kyra.

PHILLIPS: Martin Savidge in Aruba -- Martin, thanks.

You remember Kate Middleton's impossibly small waist -- well, forget it. A fashion mag admits it doctored the photos. We'll get the details after the break.

And being mean apparently comes with some perks. A new study says that mean people make more money. We'll crunch the numbers right after the break.

(COMMERCIAL BREAK)

PHILLIPS: All right. Let's hit some showbiz headlines for you.

Michael Jackson fan clubs aren't thrilled about the band KISS being a part of the late pop star's upcoming show in Wales. Band member Gene Simmons once talked about a suspicion that Jackson was a pedophile. So, the fans don't want him as a part of the October show.

TLC now minus "Kate Plus 8." The network won't renew the reality show's star, 36-year-old Kate and her eight kids. But it does expect occasional specials with them in the future.

And they've been -- there's been rumors rather that a fourth "Austin Powers" is in the works. And according to entertainment Web site Hit Fix, it's a go. Mike Myers publicist says they are still in talks. Last time we saw Powers, Dr. Evil and the cast of characters was nearly 10 years ago in "Gold Member."

Yes, she is still very beautiful. But a fashion magazine admits to doctor the wedding cover photo of the woman who could become Britain's future queen.

Zain Verjee, say it isn't so! It's such a controversial issue right now.

ZAIN VERJEE, CNN INTERNATIONAL ANCHOR: Darling, it's so. That's what happened, Kyra.

You know, Kate Middleton looks so fabulous in her wedding dress. You know, she was slimming down. Her waist looked really small,.

But on the cover of "Grazia" magazine, her waist was pretty much gone and it wasn't there. The public was outraged when they saw this. A lot of people raised questions and said this shouldn't be. The image has been doctored and the magazine "Grazia" said, yes, we did it.

Now, specifically, what they clarified is that the problem is, there was no solo shot of Kate Middleton in her wedding dress. She was always arm in arm with Prince William. So, what they did was they say in a statement: we asked our reproduction house to remove prince from the picture, but that would have left the duchess, Kyra, with only one arm.

And so, they copied the picture and by mirroring her other arm, they are saying effectively that her waist slimmed down and was almost nonexistent in that picture. They say, "We did not purposely make alterations to the Duchess of Cambridge's images to make her slimmer and we are sorry if this process gives that impression. We take the issue of body image seriously and would never slim down a picket of a female role model."

That's in their statement. And remember, Kyra, there was that whole other controversy over Julia Roberts, remember?

PHILLIPS: Oh, that's right. And the airbrush.

VERJEE: Right, the air brush fiasco. And they said, you know, this is not what should be out there. This is not what role model should be like. It's misrepresenting what Lancome products can do. Lancome said it's not misrepresenting it, Kyra.

So, let's go out and get us ourselves so Lancome so we can look like that every day even when you wake up.

PHILLIPS: Oh, exactly. Exactly what I look like. And you never need air brushing. Let's make that point. You're a natural beauty.

Zain, thanks.

VERJEE: I love you.

PHILLIPS: All right. Another beautiful woman to go to. Alison Kosik at the New York Stock Exchange. She doesn't need air-brushing either, but she is talking about a new study actually about being mean. It actually pays off, right?

ALISON KOSIK, CNN BUSINESS CORRESPONDENT: It really does. And it turns out that nice guys, you know, they may not finish last but they definitely finish behind the meaner guys. There's a study that was published in the "Journal of Personality and Social Psychology" that says it actually pays to be ruder in the workplace.

These researchers found that men who show low levels of what they call agreeableness made on average almost $10,000 a year more than their colleagues who were more agreeable.

Now, this also -- this concept also works for women, though, they didn't earn as big premium as their men guy counterpart. Mean or rude women made about $1,800 more.

The study also found that disagreeable people were more likely to be considered for promotions. I don't get that.

So, it doesn't mean you have to be disagreeable all the time, but saying no once in a while, that could help boost your personal bottom line. That's the lesson in all of this. You got to be mean sometimes, right, Kyra?

PHILLIPS: I don't know, Alison. I believe in karma. What goes around, goes around. You know? You got to treat people well, no matter what.

KOSIK: That's true.

PHILLIPS: All right. Well, how about agreeing to a quick market check?

KOSIK: You know, at the risk of losing my raise, I'm going to agree this one time but this is it. No more nice girl after this, OK?

So, let's talk about stocks. Much of the focus that Wall Street has this morning is actually on Europe and news confirming that growth in the Euro zone is slowing down. Here in the U.S., we also got some reports on home construction fell in July. It shows no end in sight for the housing slump.

But we also got a better than expected report on industrial production that is tempering the losses at least for futures. I'm going to be back in about 20 minutes with a check on the opening market numbers.

Kyra, back to you.

PHILLIPS: All right. Alison, thanks.

Well, coming up, Warren Buffett paid $7 million in taxes last year, and he says it's not enough. The billionaire wants chronic Congress to raise taxes on him and his healthy friends.

But Sarah Palin, big crowds, big support and now a big announcement. We'll tell you about this undeclared Republican suspending her bus tour.

(COMMERCIAL BREAK)

PHILLIPS: Checking top stories now.

President Obama's Midwest bus tour rolls on. Today, he meets with farmers and small business owners in Iowa. White House bills the tour as an opportunity to talk about the economy and hear what is on rural America's mind.

A British lawmaker says likely James Murdoch will be called again to testify before parliament. Lawmakers are trying to determine if the younger Murdoch misled them last month about phone hacking at the now closed "News of the World."

And police in California have found the stolen Rembrandt. It was located in Encino, California -- not far from where it was stolen. Police say they received a tip from an informant. Right now, no suspects are in custody.

Well, President Obama is sharing the road with a lot of Republicans. But one big name is parking her bus. Sarah Palin who's not even a candidate says her tour is suspended -- at least for now. And one Republican who has declared could be seeing the end of the road.

Senior political editor Mark Preston is following it all for us out of Washington.

Let's go ahead and start with Sarah Palin. Do we have any idea why she ended her bus tour? Besides the speculation here?

MARK PRESTON, CNN SENIOR POLITICAL EDITOR: Well, Kyra, she said she had to get back to Alaska because of the beginning of the school year. You know, she does have children who are of school age, so she wanted to get back and get them off to school. We do expect her back to Iowa at the beginning of September. She's going to appear at a Tea Party rally.

But the big question is: is Sarah Palin really considering running for president?

You know, that could be answered maybe by the fact that Rick Perry has gotten into the race. If he is very successful in wooing voters over the next few weeks, one has to really think, is Sarah Palin then going to decide not to run? They would be fishing from the same pond of social conservative Tea Party voters.

So, Sarah Palin is telling us she is undecided, or at least telling us she's undecided about running for president. You have to wait and see what happens, Kyra.

PHILLIPS: All right. And now, what's the word on Jon Huntsman? Not looking so good.

PRESTON: Yes, not looking good in the national polls. Of course, he did terrible in the Iowa straw poll, but the fact is he didn't participate in the Iowa straw poll. Jon Huntsman, I spent sometime with him on Saturday. I asked him what his campaign plan was.

He told me this -- he will focus on New Hampshire. He will spend the next couple of months meeting and greeting voters in the retail politics that New Hampshire has come to known. That means have you got to go to coffee shops, you got to go to hardware stores. That's what he was doing on Saturday, talking to people one-on-one. He wants to get his name ID up to about 60 percent. And at that point, Kyra, he is going to start running TV ads up in New Hampshire.

The path for Jon Huntsman to try to win the Republican nomination is if Mitt Romney falters. Then, of course, we'll have to see what happens between Mitt Romney and Rick Perry, will the campaign get very negative, could Jon Huntsman be the alternative? That seems to be the strategy -- Kyra.

PHILLIPS: Mark Preston out of Washington -- Mark, thanks.

Well, billionaire Warren Buffett says he has been coddled long enough by Congress and he actually wants them to raise taxes on him and all of his wealthy friends.

Poppy Harlow -- she's spoken to Buffett a number of times. He's a big fan of Poppy's and she's actually -- he's going to sit down and talk with her even more.

But tell us what he's saying now about this.

POPPY HARLOW, CNNMONEY.COM: Well, you know, Kyra, he has been calling for years for higher taxes. He's always famous for saying I'm taxed more than my assistant, than anyone else in the office.

I mean, take a look at what this man pays in taxes and still asking to be paid more. We'll pull it up. Last year, 2010, $6.9 million paid in taxes. Sounds like a lot of money. That's only 17.4 percent of his taxable income. That's because he makes most of his money off investing. And investments are taxed at a lower rate than your paycheck for everyone watching right now most likely.

What's different in his plan, Kyra, is that unlike President Obama, he does not think the taxes should be raised on individuals making $200,000 or more. What he says is that taxes should be raised on what he calls the uber wealthy. A lot of his friends, people making $1 million or more, they should have an additional hike and especially people making $10 million or more a year, they should see an additional hike.

Now, he spoke to Bloomberg, to Charlie Rose last night. He said, look, this is not going to affect 99.7 percent of American people. It's only going to affect 0.3 percent of the population.

Here is what he would change and I'll explain why. Take a look -- he would increase taxes on long-term capital gains. That's what people make from the stock market, from carried interest, that's how a lot of hedge fund managers get paid. Also dividends, what you're paid in dividends from your stocks.

Right now, Kyra, those are all taxed at 15 percent. And the way he explains it, he says, look, if you make money off of money, you are not taxed very highly. If you've already got a lot of money you're investing, you're not taxed highly. If you make money off of muscle, your hard work, your sweat, you are taxed highly. And he wants that to change.

And he does admit, look, this isn't going to fix the debt problem we have in this country. But this is going to be a significant portion of this.

Now, his critics come out and they say, well, look, if you raise taxes on investment income, that's going to discourage people from investing. He points to the '80s and '90s when the percent of taxes you paid on the money you paid in the stock market or hedge funds paid was a lot higher and he said, "No one stopped investing." He said, "Not one of my friends is going to stop investing because you tax us a little higher."

So, that is his point, it is controversial, obviously. But he is calling for this for years.

What's significant, Kyra, is right now, for the first time he is outlining that people making over $1 million really need to step it up in how much they pay, Kyra.

PHILLIPS: Well, you bring up an interesting point. And you know him well. You have sat down with him a number of times.

HARLOW: Yes.

PHILLIPS: You know, what's your take? The fact that, OK, he's talked about this before, but as you mentioned, he is now laid out specifics. So, you tend to wonder, OK, did someone ask him to do that? Does he have somebody's ear? Why is he doing that now?

HARLOW: Yes. It's a good question. I have no idea what conversations he has or hasn't had with people in politics.

But Buffett really sort of goes his own way, Kyra. This is a man who was a supporter and outspoken supporter of President Obama, but he is calling for a different tax plan than what the president is calling for. This is someone who, I think, sees the country in such peril right now, that he believes something significant needs to change.

And when Warren Buffett talks, people listen. He does go out on a limb when he needs to and obviously writing the op-ed in "The New York Times" on Monday morning, saying this, outlining what he thinks should happen, really taking a position that lawmakers, he believe, should be taking is different than he has. I think he sees this country in a crisis right now.

He believes and he said this last night on "Charlie Rose," America will make it through. America always makes it through, but it's going to be tough if we don't get our house in order, Kyra.

PHILLIPS: All right. Poppy Harlow, thanks.

And coming up, can a black man really win the Republican nomination? And why aren't people asking Herman Cain that? It's got L.Z. Granderson's attention. He joins us next to talk about it.

(COMMERCIAL BREAK)

PHILLIPS: Herman Cain is not the first African-American to try to win the Republican presidential nod. But he's the only since the country elected its first black president.

Cain has tried to separate his candidacy from issues of race, though. And according to L.Z. Granderson, it seems like everybody else is, too. L.Z. just wrote an editorial about Herman Cain and, quote, "The black elephant in the room."

And, L.Z., that line is definitely getting a lot of people's attention. Explain what you mean.

L.Z. GRANDERSON, CNN.COM CONTRIBUTOR: Well, it seems really counterproductive to me that if you know -- and let's fact it, we all know that the assumption is that the GOP and particularly the element that's the Tea Party seen by minorities as being racist or not being as nurturing for minorities as they are for the white community. If that's the perception that's out there, I think it's counterproductive not to talk about it and not to address it because how are we going to turn the country around, how are we going to talk about entitlements if we don't talk about the perception that the GOP is racist.

PHILLIPS: But isn't it positive to even see a black contender out there right there in the lineup?

GRANDERSON: Yes, sure. It's positive to see it, but just because you see it doesn't mean it's a contributor. I mean, just because you have black people in your office doesn't mean they are involved in decision-making. I mean, those are the kind of conversations that I think we need to be having at this point, not just having a visual but actually having a contributor.

PHILLIPS: OK. So let me ask you this and play devil's advocate.

GRANDERSON: OK.

PHILLIPS: Look at the last -- look how you smile. OK, go ahead!

GRANDERSON: You know?

PHILLIPS: I was looking back at the last CNN poll on Republicans choice for the nominee and Cain only got 5 percent. OK? So, that put him in what, sixth among all of the declared candidates. So, some may say he's not even a contender so we are bringing up anything about him.

GRANDERSON: Well, that's true. But, you know, there are a lot of reasons why he's not a contender. You know, he's never held office. He says some horrific things about Muslims and gay Americans that I'm sure it turned a lot of people off.

But I think it wouldn't be genuine of us to say that race may not be involved, especially what we know of what happened during the 2008 general election and some of the ugliness that we saw come out when President Obama became president. So, I think to avoid the conversation altogether, really isn't serving us well.

You know, I honestly believe that there are a lot of good ideas that the GOP has that could help this country turn things around. But if we can't get past the perception they are racist, then we're going to be able to hear their ideas. And I think it's smart for them to take this opportunity to really talk about race within their party.

There used to be a time when blacks voted Republican a lot and Dr. Martin Luther King, Jr. was a Republican. So, I mean, the history is there. And now is the time more than ever that we talk about it.

PHILLIPS: And Allen West and Tim Scott, they're out there, too.

L.Z., it's always great talking to you.

GRANDERSON: Hey, thank you very much.

PHILLIPS: You bet. You can read L.Z.'s latest piece at CNN.com/opinion. And if you'd like, join the conversation, and leave a comment for him.

Something new in the war in Libya. Moammar Gadhafi's forces have fired a Scud missile like this one at a rebel stronghold. We're going to take a look at the strike and its potential impact right after the break.

(COMMERCIAL BREAK)

PHILLIPS: All right. Let's check the news cross country.

Autopsy results on megachurch pastor Zachery Tims are inconclusive. His body was found Friday on the floor of a New York City hotel room. Tims founded New Destiny Christian Center in Florida in 1996 after personal struggles that included attempted murder charges and drug addiction.

A chaotic evening commute in the Bay Area. Transit police shut down all four BART stations in downtown San Francisco. It was in response to protests against BART officials for cutting underground cell phone service during police brutality protest last week.

And it's not your average police chase. Check out Fort Worth, Texas. Cops following a stolen forklift.

According to witnesses, the driver was veering across traffic and drinking beer and throwing his empty cans at passing cars and oh, and his dog was riding shotgun. Officers caught the guy after he jumped off and tried to run.

It's an ominous new turn in the war on Libya or a mark of desperation by Moammar Gadhafi? The Pentagon confirms to CNN that forces loyal to Gadhafi fired a Scud missile at a rebel stronghold on Sunday.

CNN's Barbara Starr is joining us now from the Pentagon live.

So, Barbara, I guess, first question -- did the Scud hit its target? And how many more do we think that they have?

BARBARA STARR, CNN PENTAGON CORRESPONDENT: Well, Kyra, what officials are telling us is no, it didn't hit the target.

Let's look at the map for a minute. What happened on Sunday, officials say, is Libyan loyalist forces loyal to Gadhafi near the town of Sirte, east of there, fired a short range Scud missile towards the rebel stronghold of Brega. It fell short of Brega and landed in the desert and believed to cause no harm.

But make no mistake -- the firing of a Scud missile is not inconsequential. They're notoriously inaccurate and they could in fact land and injured a great numbers of civilians. So, this is not inconsequential.

The Pentagon calls it an act of desperation on the part of the Gadhafi regime. But I think it's safe to assume they are watching very closely. They may not have a good idea of that very question you asked -- how many more does Gadhafi have, how much launchers does he have? Does he have the forces and the capability to really engage in now a potential Scud campaign against his own people, or was this just a single incident?

PHILLIPS: So, Barbara, there are still U.S. or NATO troops or ships in range?

STARR: Yes. Since March, NATO troops have backed up with support from the United States have been patrolling the skies. Ships offshore engaged in striking at Gadhafi military targets by NATO almost every day since then really trying to get at his military infrastructure.

You know, again, this week, we see a lot of sort of rumor coming out of Libya that maybe the regime is finally feeling the pressure, maybe finally going to crack. But, so far, after weeks of bombardment by NATO, they haven't yet -- Kyra.

PHILLIPS: Barbara Starr at the Pentagon. Barbara, thanks.

STARR: Sure. PHILLIPS: Three happy endings in a row for Wall Street but how is the Dow doing today? We're going to live to the stock exchange next, for the reasons behind those numbers.

Plus, it's 30-second pitch with a twist. We're trying to find work for a disabled military vet and her small business. That's coming up just a little later.

(COMMERCIAL BREAK)

PHILLIPS: All right, Alison Kosik at the New York Stock Exchange with a check on the early action. Alison, not looking so good?

KOSIK: No. We're back on that roller coaster up yesterday, down today especially after three days in a row of triple digit gains on the Dow. We are watching stocks fall today, down 100 points on the Dow. You know it's the harsh reality of -- of the economic situation, both here and globally.

What -- what Wall Street is really focused on today is on Europe. There are reports out of the Euro Zone showing that the economies there are slowing down. And the thing here is Wall Street cares about what happens in Europe because the global economy is so interconnected. The problem -- the concern here for Wall Street is that the problems there can spill over here to the U.S., especially possibly to U.S. banks here.

You often hear the saying that when Europe gets it cold, the U.S. starts sneezing. This is -- this is one of those cases.

There is some good news I can tell you about. Fitch, that's one of the credit rating agencies, had affirmed the U.S. credit rating of AAA. This happened just before the opening bell today. It also upped its outlook to stable from negative saying the U.S. has exceptional credit worthiness.

Obviously though, rival Standard & Poor's feels differently standing by its AA plus rating for U.S. debt.

Kyra back to you.

PHILLIPS: Ok, Alison, thanks.

And checking stories that are making news later today, a Latino group is sponsoring protests against President Obama's immigration policies around the country today. The first is in Atlanta, 11:00 Eastern.

Also President Obama speaking at the opening of a rural economic forum in Iowa that's at 12:50 Eastern Time.

And 1:00 Eastern, attorneys for the man convicted in the death of three people in a sweat lodge argued for a new trial in Arizona.

All right. We're following lots of developments in the next hour of the CNN NEWSROOM. Let's go and check in first with politics with Shannon Travis in Iowa -- Shannon.

SHANNON TRAVIS, CNN POLITICAL REPORTER: Kyra, Shannon Travis in Iowa. Rick Perry and Mitt Romney, no hugs, Kyra, just kisses. Wait until you see how the Texas Governor dismissed Romney and sealed it with a kiss. We'll have more on that at the top of the hour.

MARTIN SAVIDGE, CNN CORRESPONDENT: I'm Martin Savidge in Aruba where the FBI has now arrived on the island, to aide in the investigation to try to find missing American Robyn Gardner's and try to help Aruban authorities to determine is her disappearance an accident or something else? We'll have an update.

ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: I'm Elizabeth Cohen in Atlanta. Can watching TV shorten your life? Gosh, I hope not, but I'll have the results of the new study at the top of the hour.

PHILLIPS: All right, thanks guys.

And a flash mob turns criminal. A bunch of people hit a 7-Eleven at the same time. They go on a stealing spree and then they hit the bricks. Next we're going to talk with the police captain who's trying to catch them all.

(COMMERCIAL BREAK)

PHILLIPS: A home run hitter reaches a clear milestone and not a whiff of steroids.

JEFF FISCHEL, HLN SPORTS ANCHOR: No, never -- never once has anyone talked about this guy in his long successful career if you talk about anything bad because Jim Thome, is considered one of baseball's good guys. And last night he may have made good on the ultimate career achievement, the Hall of Fame.

Thome had already homered in the game against the Tigers, then in the seventh, deep and gone, career home run number 600. The eighth player in Major League history to do it. He is the first guy ever to hit number 599 and 600 in the same game, consecutive with a bat. His teammates congratulate him, then his family comes down.

Thome said afterwards he felt like his late mother was watching from above. A great moment on a future hall of famer. He is truly one of the great sluggers of all time.

The Milwaukee Brewers turned a triple play against the Dodgers. Watch this, Josh Wilson backhands, it starts to double play over to Yuniesky Betancourt, then there's first fielder and he throws to home in time. That's one, two, three outs.

Matt Kemp, you're done, that scored 4632. I don't know. Brewers also won the game. They lead the NL Central by six.

(CROSSTALK)

FISCHEL: Marcus Ambrose won -- I want to watch them all the time. Marcus Ambrose won the sprint car race at Watkins Glens, what they call road rage. But everyone is talking about this crash the last lap. Boris Said knocked David Ragan's car, starting a crash that wiped out two cars including Ragan's.

Some say it's Nascar (INAUDIBLE). After the race, Greg Biffle and his teammate took a swing at Said while Said was still in the car. Biffle's crew surrounded him, first the back. Said called Biffle out.

(BEGIN VIDEO CLIP)

BORIS SAID, NASCAR DRIVER: He comes over and throws a few little baby punches. Then when I get out he came and hides behind some big guys. But he won't hide from me long. I'll find. I won't settle it out in the tracks; it's not right to wreck cars. But he'll show up at a race with a black eye one of these days. I'll see him somewhere.

(END VIDEO CLIP)

FISCHEL: First of all he calls out Biffle for some baby punches, and then the moral code is clearly, don't wreck a car but get in a fight.

PHILLIPS: Yes, no problem. I'll hunt you down in an alley.

FISCHEL: There you go. Now we know how it works in Nascar.

One more thing. Can you consider watching a movie directed by Shaq? Yes, you could see that credit rolling on the big screen. The former NBA star is studying directing school in Hollywood. Yes.

Of course he does like being in front of the camera most of the time, doesn't he. Of course, people are concerned he might choose acting instead. We all remember "Kazaam." Or tried to forget, really.

PHILLIPS: To be continued --

FISCHEL: Shaq can do whatever he wants.

PHILLIPS: That's true. He's got the power, doesn't he?

FISCHEL: You bet.

PHILLIPS: Thanks Jeff.

FISCHELL: Ok.

PHILLIPS: So, how does the latest candidate running for president remind folks of President George W. Bush? CNN's Jeanne Moos reports on the touchy, feely, macho guy with the Texas twang.

(BEGIN VIDEOTAPE)

JEANNE MOOS, CNN CORRESPONDENT: He came toting a fried pork chop, a corn dog and an egg on a stick. There's a new Texan in town, swigging water like it's mouth wash with his leg on a bale of hay spouting "y'alls". RICK PERRY (R-TX), PRESIDENTIAL CANDIDATE: You all holler out a question.

MOOS: Dropping his Gs --

PERRY: Messin' around, farmin' and ranchin' people. What are they thinkin'?

MOOS: We're thinking that Texas talk sounds mighty familiar.

PERRY: I told him. I said dad gum it. I said I was looking forward to gettin' out there.

MOOS: Some critics are saying that Rick Perry is the mirror image of another famous Texas politician.

The "New York Daily News" even concocted a photo illustration showing Perry looking into the mirror and George W. Bush squinting back out. The accompanying column called Perry W2 with much better hair. Hair, by the way, that's looked pretty much the same since his day in the corps of cadets at Texas A & M University.

In his first presidential campaign video --

UNIDENTIFIED MALE: He wore the uniform of our country as an Air Force captain.

MOOS: He sure reminds us of President Bush in a flight suit on a farm. But Perry dismisses similarities saying --

PERRY: We're not all carbon copies in Texas.

MOOS: No less than (INAUDIBLE) even Bill Clinton said of Perry --

BILL CLINTON, FORMER PRESIDENT OF THE UNITED STATES: He's a good-looking rascal.

MOOS: When "Politico" asked Perry whether he's armed today, he declined to say adding "That's why it's called concealed."

He sure doesn't conceal his touchy, feely side. In a typical encounter, he put his arm around an Iowa voter, then proceeded to pat, then slap and squeezed her before giving a final good-bye tap. He loves to tousle the hair of kids. Collin here not only got his hair mussed, he got his cheeks rubbed.

Hey, even a CNN producer got the cheek treatment.

UNIDENTIFIED MALE: Governor, what are your thoughts about what appear on TV --

PERRY: Back in the pen.

MOOS: And a photographer got a leg pat. Perry has that down home charm that you know who had. Remember all that winking. President Bush even winked at Queen Elizabeth. Well, don't blink or you'll miss Perry's wink.

And guess how Perry pronounces this --

PERRY: I am a supporter of nuclear energy.

MOOS: They both support nuclear pronunciation.

GEORGE W. BUSH, FORMER PRESIDENT OF THE UNITED STATES: Nuclear weapons program.

Moos: And Rick Perry even winks while he drinks.

Jeanne Moos, CNN, New York.

(END VIDEOTAPE)