Return to Transcripts main page
Campbell Brown
The Big Bailout; Honeymoon Over For Sarah Palin?
Aired September 19, 2008 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAMPBELL BROWN, CNN ANCHOR: Hi there, everybody.
We have got a lot to cover. So, let's jump right into it.
Right now, at this moment, Capitol Hill is waiting to get its hands on the Bush administration's financial rescue plan. And we are told the White House is aiming to send it up to the Hill tonight. We now know that Wall Street was even closer to a total meltdown with catastrophic consequences, closer than any of us imagined.
And, yes, what started on Wall Street would have rumbled through every town in the U.S. and, frankly, around the world. Earlier today, Treasury Secretary Henry Paulson gave us an official hint about the price tag of all of this, hundreds of billions of dollars. Some people are even guessing it could approach $1 trillion with a T., a staggering figure. Take a look. That would be 12 zeros after the one, a big deal that we're talking about here, people, and exactly what Wall Street frankly wanted to hear.
The Dow industrials zoomed up at the opening bell, closing with a gain of 368 points. Believe it or not, after all this week's stomach- turning ups and downs, the Dow actually finished the week only 33 points lower than last Friday.
Of course, the rest of us are a lot more unsettled than I think we were at this time last week.
Senior business correspondent Ali Velshi has been with us here all week. He is back again with the very latest on the bullet that we may now have apparently dodged and the massive price tag of putting everything right on this.
And, Ali, a trillion dollars, that's what we're talking about, theoretically, taxpayer money, if it ends up being that much. So, what -- I know we don't know all the details. But what can you tell us...
(CROSSTALK)
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: Well, what we know is, Henry Paulson says it will be hundreds of billions of dollars. Some estimates are that any new money would be about $500 billion and we have already probably spent close to $500 billion on the bailouts.
So, it could be up to a trillion dollars. Here's what else we know. Sources have told CNN that in that meeting on Capitol Hill that we were covering that included Henry Paulson and Ben Bernanke, they both told congressional leaders that this is dire, that a failure to act quickly could lead to disastrous consequences, and that Ben Bernanke may have told them -- and we have not been able to confirm this from Ben Bernanke's office -- but sources have said that he has told them this could lead to a very deep recession, a deep recession.
Remember, a few months ago, they weren't talking about any recession whatsoever. So, this was very close to catastrophic.
BROWN: But expand on that a little bit, because I was frankly stunned when I heard, I think it was Chuck Schumer talking about it, Chris Dodd, on the radio this morning. And they wouldn't specify what it was exactly that they were told in this secret meeting last night with Paulson and Bernanke, but they said they were gasping, that it conveyed to them the seriousness the crisis that we're in.
Give us a sense for that.
(CROSSTALK)
VELSHI: You got a little flavor of it from Henry Paulson today and then President Bush, two very somber deliveries about what's going on.
And what they said is that it will be a substantial amount of money, and Henry Paulson later said hundreds of billions of dollars, but it will be a lot of cheaper than the alternative. And the alternative was waiting around, watching banks fail, having the government decide whether or not they were going to intervene, and then facing the wrath of the public and the fact that jobs would be lost, confidence would be lost and it would take a lot longer to recover.
BROWN: Markets responded well to the deal after we mentioned this sort of roller-coaster ride we have been on all week. I'm asking you to read the crystal ball here, but what's going to happen next week?
VELSHI: Well, it all depends on when this deal comes out, when it's announced and what it actually says.
Markets had a strong day today, but perhaps not as strong as some would have thought. There were other things at play in the market today which may have accounted for some of that gain. So, we're not really -- we haven't seen the market reaction fully yet. We think that this deal will be announced some time between Sunday night and Tuesday morning. And once we see what it is, then you will get a sense of how important it is.
BROWN: OK, Ali, stay with us. We're not done with you yet.
President Bush said today that there will be ample opportunity to debate the origins of this problem, but now is the time to solve it. So, here is the trillion dollar question tonight. Can Washington really put partisanship aside and actually get this fixed?
Kate Bolduan spent the day sampling the mood on Capitol Hill.
And, Kate, we have been watching this unfold on the Hill starting with last night's dramatic meeting. Bring us up to speed and take us behind the scenes. What's going on?
KATE BOLDUAN, CNN CORRESPONDENT: Well, what we're hearing, and I think you mentioned it, Campbell, is we hear from a senior Treasury Department official is that the Treasury is really continuing to push to get that proposal to Capitol Hill this evening.
They really are pushing hard. And what we are hearing here also is from several Republican congressional sources is that Treasury Secretary Henry Paulson and Fed Chair Ben Bernanke, they delivered a dire warning to the bicameral bipartisan meeting here on Capitol Hill last night.
According to these sources, Ben Bernanke said, if the situation were left unchecked, it would quickly lead to a deep and extensive recession, very powerful words here.
But the amazing thing about it is, Campbell, is that bailouts are usually a political lightning rod, but, yet, so far, so far, at least, it looks like most lawmakers are cooperating and really coming together on this. And you could really sense that in the urgency of their voices. Listen here.
(BEGIN VIDEO CLIP)
SEN. CHARLES SCHUMER (D), NEW YORK: When I was in that room last night and heard Chairman Bernanke describe the potential fallout from the economy if nothing was done, I gulped, and I think there was a somberness in the room. And sometimes there are times when all the old bad habits of Washington end up being dropped. I think this is probably going to be one of those times. I hope so.
SEN. JON KYL (R), ARIZONA: It was dead serious. The secretary and the chairman were very clear about the nature of the threat to our entire economy if we did not very quickly act to put in place the kind of authority that they were looking for, huge job losses, no more growth in productivity in this country for a while, a disadvantage in trading with people around the world. It could be very, very dire.
(END VIDEO CLIP)
BOLDUAN: Now, in terms of this urgency, we are hearing everything from they could try to pass this proposal, this bill, early next week to the end of next week, or even longer, even further into the next -- the week following, if need be.
But for the leaders' part, they say the big push here, the big key to getting passage is keeping this bill clean. And that means none of those extraneous measures, those add-ons that lawmakers like to tack on to these big bills -- Campbell.
BROWN: Yes, if they can resist the urge. They rarely do.
Kate, one thing lawmakers want to make sure is that it appears that they're not bailing out big business, but rather that this plan is targeting Main Street, middle-income Americans. How is that going to work? BOLDUAN: Well, it really comes down to the language and the detail of the language.
These lawmakers, they really are under pressure, as we keep hearing and getting the sense of. They're under pressure to get something done. They want to get it right. And what I have heard from lawmakers all day today is that they are really trying to stay directly focused on really helping Main Street, these struggling homeowners, not just helping out Wall Street, which they're going to need to do in terms of this package.
But it's going to be a delicate balance that they're going to be focused -- they're going to be squarely focused on as they move forward.
But you also have to remember this is an election year for these lawmakers as well. So, they are going to have to answer to voters very soon. And you can guess that this whole proposal, this whole deal, is going to be part of the discussion, Campbell.
BROWN: All right. Kate Bolduan for us tonight, Kate, thanks.
So, when lawmakers are tossing around words like catastrophe, a trillion dollar rescue, what are the rest of us supposed to think? We have a top panel of financial experts to try to explain this to all of us.
Diane Brady, a senior writer for "BusinessWeek" magazine, is with us, personal finance expert Lynnette Khalfani-Cox. Her Web site, TheMoneyCoach.net, answers financial questions. Joseph Battipaglia, a market strategist for Stifel Nicolaus, a full-service brokerage and investment banking firm, and CNN senior business correspondent Ali Velshi, who is here pretty much 24/7 these days.
That's your life for the moment, Ali.
Joe, let me start with you.
JOE BATTIPAGLIA, MARKET STRATEGIST, STIFEL NICOLAUS: Sure.
BROWN: I think we got to remember this plan, that while many think it's an enormous step in the right direction, it's basically meant to hold the fragile credit markets together. But what's going to happen to the overall economy? Can we think in those macro terms?
BATTIPAGLIA: You can, but unfortunately the plan itself will do nothing for the overall economy. All it's meant to do is keep confidence up, keep the banking system open.
The economy is suffering through a housing contraction. Unemployment is rising. We have weakness. And that weakness will continue while they put this plan in place. So, they're buying time to work through the financial problems, but the economy is going to put more pressure on this plan and future plans for a remedy.
BROWN: And you said future plans. Ali, what are they thinking in terms of changes, real changes, that they need to be made to ensure this doesn't happen again?
VELSHI: Yes. And the thing is, the same thing never happens again in America. We won't see the corporate scandals that we saw in 2001 and 2001, but something else happens...
(CROSSTALK)
BROWN: Or a different version of.
VELSHI: A different version, because things become more sophisticated -- 20 years ago, there weren't these mortgage-backed securities in the way they are now, so you couldn't have had this problem.
Now, here's the thing. If the credit market seized up all the way down -- and the way you know the credit market seizes up is when you try and get a mortgage and you can't or the rate is higher or your credit has to be absolutely perfect. If that seizes up, the chance of a recovery is really diminished, because we need people to be confident. But they also have to buy houses. They have to spend their money.
And if that doesn't turn around -- the only problem is, all those other indicators that Joe just talked about, unemployment lags. So, even if the economy started turning around in two months, you would still see unemployment increase for a few more months. You still haven't got houses coming back. So it's just a backstop right now.
BROWN: And, Diane, I know you agree with that, that you think we haven't even begun to really see the fallout of all of this. What do you predict for the next few weeks or even months down the road?
DIANE BRADY, SENIOR WRITER, "BUSINESSWEEK": Well, people keep tossing around $1 trillion. By our estimates, consumers have essentially overspent and overborrowed by $3 trillion over the last 10 years.
So, one trillion of that, taxpayers will pay. Maybe the financial institutions will fall the other trillion. Consumers are going to have to tighten their belts. We may be looking at higher taxes. And I think the markets will continue to be skittish.
BROWN: And, Lynnette, the government basically said today that they were backed into a corner. They had no choice but to do this. But it's not like this just popped up unexpectedly, or did it?
LYNNETTE KHALFANI-COX, THE MONEY COACH.NET: No, we have been dealing with this problem now for well over a year. A lot of banks started seeing foreclosures in 2006.
The credit markets first dramatically got tightened and squeezed in August of 2007. So, part of my criticism of what's being done right now, while I think it's absolutely necessary, is, why so late in the game? We have known about this problem for well over a year.
BROWN: All right, guys, stand by. We have got more to talk about when we come back.
But, after the break, we're going to have viewers' questions about how they should react to the financial crisis. We have been getting a ton of e-mail, as you can imagine.
And, then, a little bit later on, we will talk about McCain, Obama, their take on what's happening right now. It's a test, a pretty critical challenge facing the country. And we're going to get a measure of which one of these seems to have the best response, today, very different responses coming from both the campaigns.
Our political panel will be weighing in here in the ELECTION CENTER.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
GEORGE W. BUSH, PRESIDENT OF THE UNITED STATES: We believe that this decisive government action is needed to preserve America's financial system and sustain America's overall economy.
These measures will require us to put a significant amount of taxpayer dollars on the line. This action does entail risk, but we expect that this money will eventually be paid back.
(END VIDEO CLIP)
BROWN: President Bush today warning that the bailout plan his administration is working on and Congress will need to improve will be expensive and the results uncertain.
Back with me again, our financial experts, Diane Brady, Lynnette Khalfani-Cox, Joseph Battipaglia, and Ali Velshi joining me now.
And, Joe, we just heard basically the president say, we're putting a lot of taxpayer money at risk here.
What are the risks involved, really?
BATTIPAGLIA: Well, it's hard to know when you have a credit contraction that goes across your whole economy, what the outcome is going to be and how severely are you going to dampen economic activity prospectively.
Secondly, it's not just a U.S. problem. It's a global problem. These situations are arising in European banks as well. Effectively, our trading partners are going to have a derivative fallout from this.
And, lastly, what will be the new regulatory framework and how willing will we be to investigative and to lend in an environment of such constraint? And that's where the risks lie.
BROWN: And, Diane, from what it was -- how it was described by members of Congress, we were days away from a total meltdown, so I'm guessing worth the risk. BRADY: I think this move had to be done, because there was this fear. You had to contain the problem. This will contain the problem, so we have a short-term solution. But, as Joe says, the long term, I think there could be a recession and certainly everybody we talk to is worried that this is not the end.
BROWN: And, Ali, let's talk about the consumers in this, as opposed to what's happening with the government and sort of the big picture on Wall Street. What about people who can't pay their mortgages, who are defaulting on credit card debt or whatever? Is there anything here that...
(CROSSTALK)
VELSHI: There's no substantial change to anything, except that there was a separate announcement that Henry Paulson made while talking about this that Fannie and Freddie will buy more mortgage-backed securities right now and the Treasury will inject more money into the system.
So, theoretically, in the next few days, mortgages should become a little looser. But it's almost immeasurable. Here's the thing. And this is probably what the consumer takes away from this. And that is that it may have been -- my memory fails me -- but it was either December or January was the first time that this administration admitted there was a problem with this economy.
And many economists say, if they had admitted it six months earlier, when everybody thought there was something going wrong with the economy, we would have got that stimulus package out there earlier. This would have cost maybe under $200 billion total to save.
Now you will not, after today, hear the president or John McCain or anybody else saying we have a fundamentally sound economy. They are not going to tell you -- they're not going to trumpet the 6.1 unemployment rate. They are going to get down to business and say we have a problem. And, for Americans, I think that's the message they needed to hear. We have a problem and you're all on it.
BATTIPAGLIA: There was another flash point, too. And that was money market funds were about to break a buck, which would be amazingly detrimental to consumers.
VELSHI: Yes, one of them did.
BATTIPAGLIA: Right.
VELSHI: Yes.
BATTIPAGLIA: And, so, what they had to do was make sure that that was not going to happen, so you would effectively avoid a run on the bank by consumers.
(CROSSTALK)
BROWN: Let me ask you this, Lynnette, because we have been flooded with e-mail from people worried about, what do I do, basically? We talked about some of these issues with you last night.
But let me just read one e-mail we have gotten. This is specifically about homes and mortgages: "My fiance and I have been thinking about buying a house before we get married in September of 2009. We have had a lot of friends tell us, now is the time to buy. However, with all this recent economic news, we're hesitant to buy a house, given this current crisis. Do we listen to our friends or do we go with our gut? Should we wait until things stabilize a bit?"
What do you do?
KHALFANI-COX: Frankly, I think that, for first-time homebuyers, it's actually a huge opportunity. You can never time the market, just like you can't time the stock market and get an exact bottom. The same is true for housing.
If that person's credit is good, if they have been able to save, they have a lot of advantages working in their favor, the new $7,500 tax credit just for first-time home buyers, the fact that interest rates are relatively low, 6 percent, just under that, that kind of level. You can write off your property taxes. You can write off your mortgage interest.
I think, frankly, if you're in a good position, it's a great time to be looking.
BROWN: But, beyond home buyers, you look at student loans, you look at credit cards, and we hear tightening credit overall, people are going to feel the credit generally, yes?
BRADY: Very much so.
(CROSSTALK)
BRADY: And I think, one thing, when you're buying a home, is people are now asking for 30 percent down.
But the big risk is that people do not want to lend, banks do not want to lend to people right now. They're trying to ease that problem, but it's still out there. People are nervous.
KHALFANI-COX: And, frankly, another risk to this whole bailout package is that we don't know yet the size that it will be. But it is possible that it couldn't just be us. It could be our kids and grandkids paying for this.
We had the Congressional Budget Office say last week the deficit was $407 billion, twice as much as it was a year ago. And all of these bailout packages that have already come forth, none of that is included in. So, what the ultimate deficit will be remains to be seen, but that is a real concern.
(CROSSTALK)
BATTIPAGLIA: Yes.
BROWN: Quickly.
Part of the great success of the American economy was that the government had a cabinet full of things they could do to help us along. Unfortunately, they have used a lot of what was on the shelf.
BROWN: Right.
BATTIPAGLIA: And now we're concerned that they may not have anything else to help the economy when needs its next injection. And that is part of the issue.
BROWN: All right, guys, appreciate it.
Diana, Lynnette, Joe, Ali, as always.
And Ali, we're going to mention, will be back a little bit later, because we're still tracking what's happening between the White House and Capitol Hill, a lot of that expected to come down tonight. So, we will continue to update you with moment-to-moment coverage, Wall Street, financial crisis, the government bailout, all weekend long, as well.
Also, be sure to join Ali and CNN's Christine Romans tomorrow for a very special "YOUR MONEY," emergency edition, because it's all we're thinking about and talking about right now. They're going to be taking your calls and questions. That's live at 7:00 p.m. tomorrow night.
So, the financial crisis is so big, the stakes so high, John McCain and Barack Obama have put politics aside, right? Uh, no, not happening. Well, we're going to sort through the blame game, the name-calling over who comes across as more presidential than the other with regard to the proposed bailout.
And can you believe it? It's been only three weeks since McCain chose Sarah Palin as his running mate. Coming up, why some are already asking, is the honeymoon over?
Stay with us.
(COMMERCIAL BREAK)
BROWN: We have never seen a financial crisis this big happen so close to an election, just 46 days away.
And, as we have been reporting throughout the campaign, the economy has been a top priority, issue number one for Americans. Now it is really the only issue in the campaign. And with a bailout worth at least hundreds of billions of dollars on the horizon, John McCain and Barack Obama today had very different economic prescriptions.
Candy Crowley live in Washington with that part of the story for us.
And, Candy, today, we saw that Obama met with a very high-profile economic team, lots of familiar faces from the Clinton administration, but he was pretty careful in what he said not to lay out sort of specific prescriptions to the current economic woes. Let's listen to what he said.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D-IL), PRESIDENTIAL NOMINEE: This is not a time for fear, it's not a time for panic. It's a time for resolve and a time for leadership. I know we can steer ourselves out of this crisis because we have done it before. That's what we do as Americans. Our nation has faced even more difficult times. And each moment, when we have, we've risen to meet the challenges as one people and one nation. I'm confident that we will be doing the same in this circumstance.
(END VIDEO CLIP)
BROWN: Candy, I was struck by this, because when we talked to you last night, it really did look like this campaign was going to lay out a bullet-point economic plan today. But they seemed to dial it back. Take us behind the scenes. What's the strategy?
CANDY CROWLEY, CNN SENIOR POLITICAL CORRESPONDENT: Well, I think first, it is a little bit of what you heard Obama say, which is, listen, I'm going to wait, look at the details of this. I'm not going to put out a detailed plan of my own until I see what this is all about, but I understand the need for it.
Now, having said that, you watched all those Democrats on Capitol Hill and all those Republicans saying, whoa, this is -- we have all got to come together here. We have got to lay partisanship aside. This is really serious. We need to do something.
I was told that in that meeting last night with Bernanke and Paulson, that, in fact, they were told, listen, you guys come up with a plan and then send it up here. The Democrats do not want other plans out there, competing plans, any of that. They want this to be the administration's plan.
So, obviously, all those signals were out there. And, so, what you got here from Barack Obama today was a set of principles, while they kind of watch and see what comes out from the administration.
BROWN: All right, McCain, though, taking a very different approach. At least it sounded like it today. Let's listen to what he said.
(BEGIN VIDEO CLIP)
SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL NOMINEE: I have proposed and will sign into law an economic recovery plan for working Americans that is directed to the middle class.
It will grow this economy, create millions of jobs, and bring opportunity back to Americans. You will get a tax policy that creates family prosperity and allows you to save for the future. I won't raise your taxes on income or investments. And we will simplify the tax code, so people can understand it and do their tax returns themselves. Wouldn't that be wonderful?
(END VIDEO CLIP) BROWN: That was this morning, a speech in Wisconsin. And he basically said, this is my plan. I mean, he's being much more clear in terms of laying out specifics.
CROWLEY: He said what he wanted was to have a mortgage and financial institution fund, where -- that could identify problems early on, that would also be there for homeowners that run into foreclosure problems because of financial institutions being in trouble.
He also said that he wanted more openness in the books of these companies, so that people could see what's really going on inside, because it looks as though nobody on the outside knew that all of these companies were really on the verge of failure.
He also wants tighter regulations and better enforcement. But what's interesting here, I think, for both of them, first of all, John McCain, I think even his campaign would tell you, stumbled in the early part of the week. He needed to get out there and sort of take control of this. And, so, you saw that they put on this speech.
Just yesterday, I think, or the day before, they decided to have this, so that he could lay this out in a presidential way. But both of them are walking a really fine line here, because they know this has to be done to bail out these financial institutions, but they also have to say, I understand that the middle class needs help.
So, that's where all their rhetoric is going, even as we're pointing together this multibillion-dollar, almost trillion-dollar, bailout of financial institutions.
BROWN: Yes, interesting to watch, for sure.
Candy Crowley for us tonight -- Candy, thanks.
And, as we mentioned, this week's financial crisis, as it unfolded, the political maneuvering by these both camps fascinating to watch. When we come back, three members of the best political team on television will discuss what to make of John McCain sort of becoming this populist, Barack Obama's newfound momentum on this issue, plus the very latest on the changes in our Electoral College map -- that coming up.
This is the ELECTION CENTER.
(COMMERCIAL BREAK)
CAMPBELL BROWN, CNN ANCHOR: Wall Street's meltdown is a huge political challenge for Barack Obama and for John McCain. Today both were jockeying for a position as the real economic leader. Take a listen.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: What led us to this point was years and years of a philosophy in Washington and on Wall Street that viewed even common sense regulation and oversight as unwise and unnecessary, that threatened consumer protections and loosened the rules of the road.
SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I will hold accountable those responsible for the oversight and protection of consumers, taxpayers and homeowners. And I will hold them accountable, my friends. And if that means that some people leave their cushy job, they should leave and leave now.
(END VIDEO CLIP)
BROWN: So who is making the better sell here? Our political panel is here with me now to talk about that. Bay Buchanan, CNN political contributor, Republican strategist and a former senior adviser to Mitt Romney's campaign is with us. Roland Martin, CNN political contributor, syndicated columnist and a national radio commentator who says he is voting for Barack Obama.
ROLAND MARTIN, CNN POLITICAL ANALYST: I vote.
BROWN: And Jeffrey Toobin, CNN senior political analyst and columnist for the "New Yorker" magazine. Welcome everybody.
MARTIN: Glad to be here.
BAY BUCHANAN, REPUBLICAN STRATEGIST: Thank you.
BROWN: So two very different approaches, guys. I think we heard today John McCain being more into laying out specifics, wants this new agency to keep an eye on the banks, still calling for the firing of the SEC commissioner.
On the flip side of that, Roland, Obama is playing it a little cool saying he's going to wait and see what happens. Who do you think has the smartest strategy?
MARTIN: Well, first of all, I think you have to play it cool because nobody knows what's going on. I mean, there have been no specifics as to how deep and dire this financial crisis is. And so, for somebody to jump out and say, well, I'm going to take these steps when you don't even have the full facts, to me that's dangerous. And so, I think we need to understand how deep this is before you start saying here's what my strategy is.
JEFFREY TOOBIN, CNN SENIOR POLITICAL ANALYST: I don't think the plans matter this much at this point. This is a moving target. What matters is, who's the Democrat and who's the Republican?
This is a crisis that has taken place while there is a Republican president, and the buck stops with the Republican Party here. Barack Obama simply has to show up to work, and he's going to benefit from this situation. And you look at the polls, he is benefiting.
BROWN: And, Bay, that's probably the reason he's not doing anything. He does just have to show up on this issue. Is that why it's incumbent upon John McCain to say something different than what we're hearing from the White House because of that issue? BUCHANAN: Well, there's no question conventional wisdom is exactly what Jeffrey said, that, you know, you have a crisis whatsoever, you blame the incumbent. But the key here is I think the American people are so angry with Washington as a whole, and what they see this week is a Congress who is certainly as much responsible for oversight as anyone else here. And what is Congress constantly doing? There's no leadership there. They're heading home as fast as they can. Let someone else solve this.
They did the same thing with the energy. And so my point is this, I think the American people really are looking for leadership, somebody who can say, look it, let's figure out what to do. We can't wait around. Things are happening fast.
MARTIN: Bay, Bay, Bay --
BROWN: Hold on, Roland.
BUCHANAN: And I think my point is...
BROWN: Let me --
BUCHANAN: Let me just finalize, the point is, if they're looking for experience, if they're looking for somebody who really has some leadership skills and really is ready to be president, I think John McCain will benefit as a result.
BROWN: But let me look at how he has sort of morphed I think this week from your small government anti-regulation conservative to this raging populist demanding the head of the SEC chairman, Chris Cox. That didn't sit well with the editorial board at "The Wall Street Journal," the conservative editorial board at "The Wall Street Journal," Bay.
They wrote this morning, "This assault on Mr. Cox is both false and deeply unfair. It's also unpresidential. In a crisis, voters want steady, calm, leadership, not easy misleading answers that will do nothing to help."
Now, Bay, this is "The Wall Street" editorial page. "Wall Street Journal" editorial page, the bible of fiscal conservatives.
BUCHANAN: Yes. Well, you have to be careful there because what they are, they're very much into free trade, and no question. But they're also very into these great trade agreements.
I think a populist is a much more conservative position these days, someone who says, look, we have to balance budgets. We can't just spend crazy. We can't let Wall Street just be uncontrolled and do what they want, because we do have orgies like this that lead to this kind of crisis.
UNIDENTIFIED MALE: Bay and Campbell --
BUCHANAN: So I think that is -- I don't think Wall Street is the guideline here. MARTIN: Bay, I love you, Bay, but come on, you're looking like Ginger Rogers dancing around this. You said we need leadership from the people who are born to be president. The president gave a two-minute speech last week, a nine-minute speech this week. He's in office. Bernanke, Fed Chairman; Paulson, treasury secretary, that's their job to lead. And so when you say they can initially, no.
How about the guy sitting in the White House right now who is a Republican? He might want to lead.
(CROSSTALK)
BROWN: All right. Let me let Jeff jump in.
BUCHANAN: But --
TOOBIN: One of the things that I think is going to be interesting looking back at this presidential campaign is how Republicans and conservatives are splitting on a lot of issues. The Republican Party used to be the party of deregulation. Now we have the secretary of the treasury taking over huge parts of the American economy. The Republican Party used to be the party of isolationism.
We have the party that's trying to bring democracy to the Middle East. What the Republican Party means is really very much up for grabs today. And frankly, I don't know how that's going to turn out.
MARTIN: Right. If John McCain says he wants to talk with somebody? Call Phil Gramm.
BROWN: Roland, come on.
BUCHANAN: Jeffrey is correct about the split in the Republican Party. There's no question that we really have some serious concerns of the direction the party is taking us. John McCain is trying to split from that in many ways. Otherwise, he can't be successful. But I think you have to come down to one thing.
Right now, my instinct is as a voter, as a mother, somebody as a single person who's worried about your own future, I think voters are going to come and say, who can I -- who is the person I can trust here?
BROWN: Right.
BUCHANAN: It's not time for some new fresh faces.
(CROSSTALK)
BROWN: You know -- all right.
MARTIN: (INAUDIBLE) Phil Gramm who wrote the bill.
BROWN: We're out of time, Roland.
MARTIN: Come on. BROWN: We're out of time, Roland. But I think it's fascinating that frankly this time last week, we were talking about "lipstick on a pig" and it was Barack Obama who seemed to be stumbling a little bit. McCain had all the mojo, and it shows you how an external issue...
BUCHANAN: Absolutely.
BROWN: ... can come in and completely change the dynamics of the race.
BUCHANAN: Sure.
MARTIN: Also bill (ph) issues.
BUCHANAN: We have some more times expected until Election Day.
BROWN: Yes. There you go. A good point, Bay.
OK. Stay with me, guys. A lot more to talk about.
When we come back, Sarah Palin, remember her? Well, the honeymoon may be over for John McCain's running mate and the voters. Polls show her support dropping a little bit. Are people having second thoughts about Sarah Palin? Details when we come back.
(COMMERCIAL BREAK)
BROWN: It is no secret that women could hold the key to the White House this year, and John McCain is counting on Sarah Palin to win them over. The Democrats want to make one thing clear, Sarah Palin is no Hillary Clinton. Just listen to Maryland Senator Barbara Mikulski firing up the crowd at a rally this afternoon.
(BEGIN VIDEO CLIP)
SEN. BARBARA MIKULSKI (D), MARYLAND: Women, Democratic women, we wear lipstick too. We need somebody that gets it -- that gets it. And what we don't need to get is four more years of a George Bush sound alike. And we don't need another George Bush in earrings be in the number two spot.
(END VIDEO CLIP)
BROWN: OK. Bluntly put there, her feelings on that.
(CROSSTALK)
BROWN: A good jumping off point to discuss whether Sarah Palin, the phenomenon, is losing a little bit of her punch, especially with women. I want to bring back our panel now -- Bay Buchanan, Roland Martin, Jeff Toobin.
Jeff, you look at the "New York Times"/CBS News poll that came out and her favorables dropped, 44 percent down to 40 percent. That's a four- point drop. This is over the course of the last week. And then, 47 percent a week ago thought she was prepared to be vice president. This week that number dropped by five points. Doubt beginning to seep in a little bit here?
TOOBIN: I think she's really suffering from the problem now of being John McCain's running mate because she is suffering from the same thing McCain is. The Republican Party is having a terrible week. I don't think Palin ultimately is going to matter that much because vice presidential nominees rarely matter.
This week has had news of such magnitude that, you know, whether she wears lipstick, whether she could butcher a moose, all that stuff is becoming irrelevant. And the issue is, can she do the job? And there's not a lot of evidence or at least new evidence that she can.
BROWN: Has that been an issue, Bay, that this crisis has taken the focus away from her, you know, generally her personality, which was very appealing to a lot of women because she was so relatable?
BUCHANAN: No question. The key here is you have to remember when she was first announced, there's all kind of excitement because there's this fresh face, all interest looking at who is this woman. And then she had three weeks of just assault after assault, vicious and angry people yelling for no good reason, and all she was doing is she took the position on the ticket of the Republican ticket here.
But I think she's done a remarkable job. She's held up. She's been very classy, poised. She doesn't respond with resentment or anger.
And so, I think she's been an enormous plus. And now, things are going to settle in and we're going to see a McCain/Palin ticket, and I think she'll be a huge asset going into Election Day as well.
BROWN: But you have had -- let me just follow up with Bay on one thing -- you have had this conservatives coming forward and expressing concerns about her. Senator Chuck Hagel, another Republican maverick, hasn't endorsed a candidate in this race, but he had a pretty harsh assessment of Palin this week.
He said, "I think it's a stretch in a way to say that she's got the experience to be president of the United States. You get a passport for the first time in your life last year? I mean I don't know what you can say. You can't say anything."
And Hagel is not alone in that. There have been a number of conservatives, columnists, especially voicing real doubts about her as a choice.
BUCHANAN: Sure. There's people that didn't like that choice as other people that even Biden himself questions the choice of Biden. There are people who don't agree here. But you look at the polls. Look what she's accomplished. It's been enormous. We were going out.
Obama was going to be running this show completely. They put Palin on the ticket, the entire party, our energy is there. Our grassroots are excited. She accomplished that. She put John McCain back in this game, and I still see women and working people, working men moving over to John McCain and Palin is the reason.
MARTIN: So I guess, Bay, she's sort of like Jesus. She blew some breath at Lazarus, and now Lazarus is back from the dead. Look, here's the deal with Palin. This all changed I think when women went after John McCain.
This race changed on ABC's "The View." When they began to call out McCain on those ads, they also began to criticize her for (INAUDIBLE) state the same. They began to say, wait a minute. You were against the bridge, but you're actually for it. When they went after her record, all of a sudden you saw the numbers changed until people saw a different view of Sarah Palin versus the one that she presented. That's why I think it has a role (ph) why numbers are going down.
(CROSSTALK)
BUCHANAN: But you know what happened, Roland --
TOOBIN: And you also have -- you also have her continue to be very well protected. She's not out there giving interviews. She spoke to Sean Hannity, which is, as we say in golf, kind of a gimmie. Other than that, there's just been that one interview with Charlie Gibson.
BUCHANAN: But the thing that happened --
BROWN: OK. Quickly, Bay, last word.
BUCHANAN: Yes, sorry. The thing that happened here is everybody discussed the qualifications of Palin, and that drew the attention to the qualifications of none other than Obama. And it's very clear that she's even more qualified. And the polls now show that 45 percent, only 45 percent of American people think that Obama is ready to be president. John McCain is at 65 percent...
MARTIN: But the numbers are going down, Bay.
BUCHANAN: ... that you can credit Palin for.
MARTIN: But, Bay, the numbers are going down.
BROWN: All right, guys.
BUCHANAN: But --
MARTIN: I mean, come on.
BUCHANAN: She did a mighty good job in those first two weeks.
(CROSSTALK)
BROWN: Still a lot to play out here. OK, guys, stand by. We've got both candidates with long-term plans to fix the economy. But can we afford either of them? We're going to put them to our "No Bias, No Bull" test when we come back.
(COMMERCIAL BREAK) BROWN: There are a few things besides the economic crisis happening in the world, and Tom Foreman is here with tonight's "Briefing" -- Tom.
TOM FOREMAN, CNN CORRESPONDENT: Campbell, one week after Hurricane Ike, 45,000 Galveston evacuees may soon go home but not for another week or so. There's still a lot of debris, not a lot of basic services. One gas station is open. Tonight, more than 20,000 Texans still in shelters.
It's case closed for former Florida Congressman Mark Foley. Prosecutors announced today they cannot prove a crime after Foley sent sexually charged e-mails to teenage Capitol Hill pages. Foley resigned from Congress two years ago. He said today he continues to pray for forgiveness -- Campbell.
BROWN: All right. Tom, we'll see you back in a few minutes.
Coming up next, can we afford the presidential candidates' economics plans? We'll talk about that when we come back.
(COMMERCIAL BREAK)
LARRY KING, HOST, "LARRY KING LIVE": Good evening, I'm Larry King. Is the media tired of Sarah Palin? Our voters' polls indicate that the Palin factor might be wearing off. And what does that mean for John McCain?
We'll talk to political observers and a hockey mom to see what they think the Sarah Palin report card is saying. That's all next on "LARRY KING LIVE."
More with Campbell Brown right after the break.
(COMMERCIAL BREAK)
BROWN: Time now to listen to what the presidential candidates have been saying today and put their words to our "No Bias, No Bull" test. Both John McCain and Barack Obama boasting that they have emergency plans to fix the economy and to help the middle class. Their promises sound good, and what they're saying sounds remarkably similar. Listen closely.
(BEGIN VIDEO CLIP)
SEN. BARACK OBAMA (D), PRESIDENTIAL CANDIDATE: I'll be asking Senator McCain and President Bush, Republicans and Democrats to join me in supporting an emergency economic plan for working families, a plan that would help folks cope with rising gas and food prices and spark job creation through repair of our schools and our roads and our bridges, and help states avoid painful budget cuts and tax increases, and help all voters stay in their house and provide retooling assistance for the American auto industry. That's the kind of help that folks need right now, and we should be acting and not just talking. SEN. JOHN MCCAIN (R), PRESIDENTIAL CANDIDATE: I have proposed and will sign into law an economic recovery plan for working Americans that is directed to the middle class. It will grow this economy, create millions of jobs, and bring opportunity back to Americans. You will get a tax policy that creates family prosperity and allows you to save for the future. I won't raise your taxes on income or investments. And we'll simplify the tax code so people can understand it and do their tax returns themselves. Wouldn't that be wonderful?
(END VIDEO CLIP)
BROWN: Tom Foreman is here to put the candidates words to our "No Bias, No Bull" test. And, Tom, wouldn't it be wonderful if we could afford everything that they're promising? Can we?
FOREMAN: It would, indeed. Campbell, the number one response of economic analysts to all these ambitious plans being pushed by the candidates is show me the money, especially in light of federal officials saying it could take hundreds of billions just to get the economy back on course.
Before all this latest turmoil, Barack Obama said he would find the money for his plans by taxing the windfall profits of oil companies, hitting wealthier Americans up for more taxes, to cutting wasteful spending. John McCain is looking a lot closer to his office in Capitol Hill. He likes the idea of first going after wasteful federal spending, cutting down on pork projects, which actually aren't that much of the federal budget, and balancing the budget. And he, a bit more than Obama, seems to talk about reinvigorating foreign trade.
But look at what has already been taken out of Uncle Sam's piggy bank. The economic stimulus package, $150 billion. The bailout of Bear Stearns, about $30 billion. Freddie Mac and Fannie Mae, another $200 billion. AIG, $85 billion. That adds up to almost a half trillion dollars. And federal officials are now suggesting that the total tab for all of this could be a trillion, maybe a trillion and a half, and any of that hundreds of billions more.
Some of that money could come back into federal accounts if assets from these companies can be sold off at a good price which is what they hope for. But even if that goes well, in this environment, many economic analysts seriously doubt if McCain or Obama can pay for their programs without badly inflating the national deficit.
The Concord Coalition, a bipartisan group, that studies such things told me today it comes down to a basic idea, cutting taxes and increasing services which is what both men are still promising is a very tough trick that rarely succeeds -- Campbell.
BROWN: All right. Tom, as always, thanks to you. Appreciate it.
After all we have been through this week, what is ahead for next week? In a moment, senior business correspondent Ali Velshi is back with a look at what we can expect next week. Stay with us.
(COMMERCIAL BREAK) BROWN: It's a cliche, of course, but hey, it works with our graphic. A scary financial roller-coaster ride this week, white knuckles all over America if not the world and yes, it's not over.
Tonight, have we come back from the brink? Our moneyman Ali Velshi back to wrap it all up for us. What a week it has been.
ALI VELSHI, CNN SENIOR BUSINESS CORRESPONDENT: I feel like if I button this up for you, I can go home this week, and just don't have to deal with business news for another couple of days. But we will be. We're back tomorrow night taking phone calls from people because Americans are concerned.
We saw the biggest drop on the stock market in one day since September 17, 2001. It is going to be another exciting week next week.
If we get this federal rescue plan, maybe Sunday night maybe Monday, we're going to have to see how markets react to that. But we have come back. This was a thousand-point swing in the Dow in one week, and we end the week 30 points lower than we started.
Wow. Campbell, it's been a roller coaster.
BROWN: It could have been a lot worse.
VELSHI: It could have been a lot worse.
BROWN: Ali Velshi, OK, I'm assuming we're going to see you back here on Monday night. Of course, we are.
Ali, thank you. Have a great weekend. Have a great weekend, everybody.
That is it from the ELECTION CENTER.
"LARRY KING LIVE" starts right now.
