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Issue Number One

Prepare & Protect; Women & the Economy; Answering Your Questions; Quick Vote Results; Hollywood Hit

Aired July 08, 2008 - 12:00   ET


GERRI WILLIS, CNN ANCHOR: Oil is falling a lot. But will your record high gas prices drop, as well?
The "Energy Hunt" is on. We'll take you to a place where the ground is literally soaked with oil.

Worries about a lack of preparation as a major hurricane brews in the Atlantic.

And a big-time guarantee from one of the presidential candidates.

Issue #1 is your economy. ISSUE #1 starts right now.

Hello, and welcome to ISSUE #1. I'm Gerri Willis. Ali Velshi will join us in just a bit.

We're talking oil today, and lots of it. Why prices are down and what it could mean to what you're paying at the pump.

We're starting a great series today on CNN called "Energy Hunt." It's a worldwide search for the future of your energy.

And believe it or not, men and women do not suffer equally through these economic times. We'll tell you who has the edge.

From the ISSUE #1 headquarters to the news room, we are all over the stories that matter to you.

We begin with falling oil prices. And to do that, we talk to Poppy Harlow, who has today's "Energy Fix" -- Poppy.


Certainly the top story today when it comes to the market, when it comes to what Americans are feeling at the pump. Plenty of good news, today, folks, from the oil pits.

For the second straight day, prices are falling dramatically. Today's drop is $5 a barrel, and prices are down nearly $10 in just the last two days.

The bad news, though, the price is still above $136 a barrel, and it's up more than 40 percent this year alone. But over the last two days, a stronger U.S. dollar has helped lower prices, along with fewer concerns about worldwide demand, as well as some easing of tension in the Middle East. Unfortunately, though, many analysts believe this is a just a blip on the radar and that prices will rise again.

Gas prices today holding steady for the first time in 10 days. We're unchanged from yesterday, but still at $4.11 a gallon.

Now, gas prices often, keep in mind, take some time to reflect changes in oil prices. And we may not see lower gas prices until the market senses that these lower oil prices will hold.

So folks out there, the "Energy Fix" for you right now, hope that these prices do hold. Be prepared in case they don't, in case those analysts are right and oil prices shoot right back up -- Gerri.

WILLIS: Well, Poppy, thank you for that fascinating stuff.



ALI VELSHI, CNN ANCHOR (voice over): One-third of the world's known oil deposits are right here in the dirt. So that's where we headed on our "Energy Hunt," from New York to Fort McMurray, Alberta.

(on camera): All right, this is it. We are literally walking on black gold. This is what we came here to see.

This is oil sand. It's sand that's encased in water and oil. In fact, this is about 10 percent crude oil.

(voice over): Large quantities of oil embedded in sand only occur in two places in the world, Venezuela and Canada. Giant shovels scoop up 100 tons of oil-laden dirt at a time. Hundreds of trucks move across the landscape all day and night, every single day.

(on camera): You need a lot of earth to make oil. It takes about two tons of oil sands to make one big barrel of oil.

Now, this big hauler holds 400 tons of oil sands, so once that's all filled up and made into oil, you'll have about 200 barrels of oil.

(voice over): That's right, two tons of oil sand makes one barrel of oil. But at today's oil prices it's wildly profitable. That's why major players like ExxonMobil, Shell, Chevron and others squeeze 1.5 million barrels of oil out of this land every day, and they send most of it to the U.S.

It's costlier than getting it from a simple land well because the tar-like oil has to be separated from the sand. And that uses lots of natural gas and warm water. The result is a heavy molasses-like oil which has to be upgraded into a lighter, high quality form of crude that can then be easily refined into gasoline, home heating oil, and other petroleum products.

Canada produces much more oil than it needs. So the excess oil is sold and sent by pipeline to its best customer, the United States. Notice, there's no pipeline to Canada's west coast. There is one proposed, and it's backed by China. (END VIDEOTAPE)

VELSHI: It's not clear that it will always be that way. If that pipeline to the west coast of Canada does get built, the oil could easily be shipped to China.

Now, as for how much oil we could get from Canada, optimistic predictions are that Canada can easily increase its daily oil sands production to between four and five million barrels per day within the next decade, or about a third of all U.S. imports. Now, a third of all U.S. imports is exactly as much as legendary oil billionaire T. Boone Pickens wants to reduce. But he's taking an unusual approach, especially for an oil man.

He's turning to wind. Pickens is unveiling a campaign today to build bipartisan awareness on energy focusing on wind energy. In May, he announced plans to build the world's largest wind farm in Texas.

T. Boone Pickens is the chairman of the hedge fund VP Capital. He also happens to be the 117th richest person in the country, according to "Forbes." He joins us now from New York City.

Boone, good to see you again. Thank you for being with us.

You have been an oil man for 50 years, and now you're espousing a plan that would reduce U.S. oil imports by 38 percent. Now, I know your plan, and I know it's complex. But in a nutshell, explain to us how you would achieve this.

T. BOONE PICKENS, FOUNDER, BP CAPITAL: OK. Let's hit the problem first.

We are exporting dollars, $700 billion a year, for the purchase of foreign oil. That's what I'm after. I've got to reduce that or we're going to break the country.

OK. The way I propose to do it is that we have an unbelievable wind corridor from west Texas to Canada. It's partially being developed now, but it should be developed faster than it is. And Congress can help us do that by giving us corridors east and west out of the wind corridor to the East and West Coast.

Now, I'm doing a 4,000-megawatt wind farm, which will be the biggest wind farm in the world. Now, what I want to do is to do 200,000 megawatts of wind in the wind corridor.

That would then release the natural gas that's doing the power generation in the overall power generation pie, which is 50 percent coal, 20 percent nuke, 22 percent natural gas. OK. If I can get the wind to replace the natural gas, then the natural gas will -- I can put it in transportation fuel, and there are eight million vehicles in the world today that are on natural gas.

And you could put it right into transportation fuel and reduce our imports by 38 percent. And that would reduce the $700 billion by $300 billion. That would be... VELSHI: So you would take -- you'd take the electricity that's generated by natural gas, replace that with wind, and then take that extra natural gas you've got and use that as automobile fuel or transport fuel. How are we going to get that done? That's an infrastructure change alone, getting cars and trucks to run off of natural gas in America.

PICKENS: Well, you've got GM that builds 19 natural gas vehicles, but all of them outside the United States. So it'd be very easy for the car manufacturers to give you the vehicles.

Then you put in the stations, which would be -- Aubrey McClendon with Chesapeake had a great idea for that, is to do 25,000 stations for $400,000 a piece. That would be an island within a station that was already in existence, which would be a $10 billion deal, which is peanuts compared to the $700 billion that you're paying for foreign oil.

Second, you would need a production tax credit for the windmills, and you'd need it for 10 years. And that would be $15 billion a year.

So all of that's cheap to -- what you need, Ali, is leadership. You need somebody that understands the plan, that somebody has stepped forth and has the position to do so, like the president of the United States.

VELSHI: And you are saying this needs to be treated like a war, at least a national emergency. You want the new administration, whoever's there, to implement some sort of plan within the first hundred days. Is anybody biting?

PICKENS: From where?

VELSHI: From the candidates from the two campaigns?

PICKENS: I haven't heard anything from them. But I sent word that I didn't want to talk to either one of them until I had launched my plan.

And then I'll be more than happy to sit down with both of them at the same time, and let's talk about it. Because you're going to sit down and talk about something like war. It has nothing to do with politics.

And I would like for them to look at my plan. And then, you know, question me on the plan. See if I know what I'm talking about. I'll be glad to do that, and I'll be glad to...

VELSHI: Now, you're a lifelong Republican, but there's nothing in John McCain's energy plan that goes anywhere close to where you want to go. Are you going to make a special attempt to get him to listen?

PICKENS: I'm not going to -- the only way I'll talk to him is if I talk to them together or wait until one of them is president. I'll be glad to talk to them. VELSHI: Boone Pickens...

PICKENS: But I'm not going to have any -- show any preference in this campaign.

VELSHI: You'll work with whoever wants to take you up on your plan.

Boone, thanks for joining us again.

T. Boone Pickens is the chairman of BP Capital, joining us now from New York with his new campaign.

WILLIS: Fascinating stuff.

Well, this show is all about you, and it's time for you to get involved and weigh in on our "Quick Vote."

Let's check back in with's Poppy Harlow for today's question.

Hi there, Poppy.

HARLOW: Hi, Gerri.

Well, you know, whether you're a banker, whether you're an auto worker, the economic slowdown in this country is likely hitting you regardless of your line of work. But the question is, is the pain being felt equally across gender lines? So here's our "Quick Vote" question today.

Who is hurt most by the economic downturn, men, women, or are both feeling the pain equally?

Let us know what you think on We'll bring you the numbers later in the show.

I'm interested to hear what people have to say here.

WILLIS: It's an interesting question. I'm sure we'll get some good answers.

Thank you for that, Poppy.

HARLOW: Sure, Gerri.

WILLIS: Coming up, the presidential candidates are both talking issue #1 -- Obama on bankruptcy, and McCain on balancing the budget. We'll tell you where they stand.

And waiting for the thaw in the mortgage meltdown. How to know when your town is headed for a rebound.

We're all over issue #1 right here on CNN.

(COMMERCIAL BREAK) WILLIS: Presidential candidate Barack Obama today proposing an overhaul of U.S. bankruptcy laws to ease their impact on people unable to pay their bills due to medical expenses or military service.

CNN's Deputy Political Director Paul Steinhauser joins us now from Washington -- Paul.

PAUL STEINHAUSER, CNN DEPUTY POLITICAL DIRECTOR: Barack Obama in Georgia today. And it's interesting. Georgia, that's a state that's voted pretty reliably for the Republicans in presidential contests.

Obama thinks he can do well there. And there he was today in Powder Springs, which is suburban Atlanta, talking about personal bankruptcy.

He wants to change bankruptcy laws in order to fast-track the process for military families. And he's got some new proposals that would include reforming the agenda, covering people in financial distress due to medical bills, as you mentioned. And it would also -- some of his proposals would allow homeowners going through bankruptcy to renegotiate the terms of their mortgages.

Obama also talked about having a friend in Washington for average Americans.


SEN. BARACK OBAMA (D-IL), PRESIDENTIAL CANDIDATE: Washington should be there for you. And yet, instead of standing up for you, Washington's been standing up for big banks, for credit card companies, for mortgage companies. For too long our bankruptcy laws have protected the special interests, the big banks and credit card companies, instead of struggling families.


STEINHAUSER: And he wasn't only criticizing Washington as you heard right there, Gerri. He was also criticizing John McCain. He says that John McCain is also one of those in Washington who has been siding with the big banks rather than with the average Americans.

WILLIS: Well, Paul, when you look at this bankruptcy issue, it's been very controversial. What do you expect McCain to say about bankruptcy laws?

STEINHAUSER: Well, John McCain responds by saying that he, in fact, has been one of the bipartisan leaders on bankruptcy reform in the Senate, and that he's not the partisan one, Barack Obama is. John McCain, of course, today speaking out here in D.C. to a Latino organization. And we expect him to talk about issue #1 -- Gerri.

WILLIS: Paul, thank you for that.

VELSHI: And let's go to that event that Paul is talking about. John McCain is speaking to the United Latin American Citizens in Washington, D.C. Let's listen in.

SEN. JOHN MCCAIN (R-AZ), PRESIDENTIAL CANDIDATE: Increasing the tax burden on Americans impedes job growth, discourages innovation, and certainly makes us less competitive. Small businesses are the biggest job creators in our economy, keeping individual rates low. It isn't intended as a favor of wealthy Americans.

Twenty-three million small business owners pay those rates. And taking more money from them deprives them of the capital that they need to invest and grow and hire.

If you believe -- if you believe you should pay more taxes, I'm the wrong candidate for you.


Jobs are the most important thing our economy creates. When you raise taxes in a bad economy, you eliminate jobs. I'm not going to let that happen.


I'll keep current rates low. And I'll cut them where I can.

For those of you with children, I'll double the child deduction from $3,500 to $7,000 for every dependent in every family in America.


I'll reduce the estate tax to 15 percent, so parents who have spent long years working hard to build a business and provide a decent living to their employees can leave the product of a lifetime of labor and love to their children.

My health care plan is careful not to impose greater burdens on small businesses. A pay-or-play health mandate on small business would add a crushing $12,000 to the cost of employing anyone with a family. That would not only prevent them from creating new jobs, but it'll force them to cut jobs and reduce the wages of current employees to pay for.

I intend to make health care more available to more Americans by making it more affordable and portable. The answer is to get health care costs under control by creating real competition among insurance companies, reforming the way medical treatment is billed, and helping American families make their own health care decisions with a $5,000 refundable tax credit.

VELSHI: That's John McCain in Arlington, Virginia.

We -- I just want to correct that, I said Washington, D.C., going into this.

He's speaking to the United Latin American Citizens there. He's talking about the economy and his economic plan. We, of course, will continue to follow this at CNN.

Allan Chernoff has been following this for us.

John McCain says that if he is elected president, he would balance the federal budget by the end of his first term. Is this realistic?

Well, Allan's been doing some analysis.

What have you found, Allan?

ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Ali, let's think about it. You know, in theory, anything is possible. But in practice, experts are saying let's not count on this happening.


CHERNOFF (voice-over): John McCain claims he can balance the federal budget.

MCCAIN: American workers and families pay their bills and balance their budgets, and I'll demand the same thing of our government, which you're not getting now.

CHERNOFF: Is there any way it can be done? The nonpartisan Congressional Budget Office says yes, even predicting a surplus by fiscal year 2012 under current law.

How? Because the Bush tax cuts are scheduled to expire in 2010. And the alternative minimum tax introduced in the '70s to ensure the wealthy pay income tax is due to affect more middle income households. But that is not what John McCain has in mind.

MCCAIN: American families need tax relief. And I, not my opponent, will deliver it.

CHERNOFF: McCain pledges to extend the Bush tax cuts. And protect millions of Americans from paying the alternative minimum tax. Those promises, some experts say, would dramatically increase the budget deficit.

BOB GREENSTEIN, CENTER FOR BUDGET AND POLICY PRIORITIES: The chance that he would really balance the budget by the end of his first four years, near zero.

CHERNOFF: On the spending side, John McCain says he won't back down in Iraq or Afghanistan. But the wars are costly, budgeted at $188 billion this coming fiscal year.

STEPHEN BIDDLE, COUNCIL ON FOREIGN RELATIONS: To the extent that it becomes possible to draw troop levels down in Iraq, there's going to be a tremendous demand not to bring them home, set them down and not use them but to swing them or at least some significant fraction of them to Afghanistan. CHERNOFF: Even if U.S. troops in Iraq were cut by 80 percent, the Urban-Brookings Tax Center says McCain would still face a deficit of nearly $450 billion. To balance the budget, McCain would have to make cuts as severe as chopping Social Security by 50 percent, or slashing Medicare by 70 percent.


CHERNOFF: We all know that is not going to happen.

Now, here's one more important note. John McCain says that balancing the budget will depend upon reasonable economic growth.

Given the lousy state of the economy right now, it's reasonable to assume that growth may still be sub-par when the next president takes office. That, of course, Ali, means less tax revenue, not more.

VELSHI: Right. If this is less in the control of the president than one might be led to believe from John McCain's comments, is this a change of policy for him? Is this any kind of turnaround?

CHERNOFF: There's been quite the shift over here. Back in April, he was saying balance the budget by the end of the second term. Now, what's happened to the economy since April? It's gotten worse, not better. But here he is saying, I can do it sooner. Well...

VELSHI: In shorter time. Interesting.

CHERNOFF: ... there's a real battle going on within his economic advisor pool. And this is the latest.

VELSHI: All right. We'll stay on it. We'll stay on the speech that he's making today, as well, and bring you anything you need on that -- Gerri.

WILLIS: Ali, still ahead, what's the state of your housing market? Could things look up? Will they get worse? We'll tell you how to gauge where your local market is headed.

Then, it's the battle of the sexes. Why men and women aren't equals when it comes to the economy. We'll explain next.

You're watching ISSUE #1. Stay with us.


VELSHI: More gloomy news on the housing front. The National Association of Realtors say the number of homes under contract to be sold fell more than expected in May. The group's seasonally adjusted index slipped to 84.7. That's down nearly 5 percent from an upwardly revised reading of 88.9 in April. The index was 14 percent below the 98.5 that it measured in May of last year.

WILLIS: Well, let's be honest for just a minute here. The nationwide housing market, well, it's not in such great shape. But there is a beginning to the turnaround coming someday, but what should you look for to tell you it's coming?

Amanda Gengler from "Money" magazine is here, and she's got a story all about it. She's going to tell us about it.

You know, normally when people talk about real estate rebounds, they're looking at jobs. But you've got other indicators you're looking at, starting with inventories. And I understand inventories have been about 11 months of product just sitting on the shelf waiting to be bought.

How do I read inventories?

AMANDA GENGLER, "MONEY": Well, you need to understand, again, that real estate is a local game. So, yes, the nationwide number is about 11 months worth of inventory, and we need that to come down. But your region could be very different.

So you want to ask either the local association of realtors, or a competent agent should be able to give you inventory numbers for your area, either the months of inventory that are on the market right now, maybe the number of days that they will sit for, or even just the number of homes. And you want to look for that number to return to the pre-boom levels, say, in year 2000. Typically, it's about six months' worth of inventory that's a healthy level.

WILLIS: That's a great rule of thumb. I love that.

OK. Let's talk about prices, because that's all homeowners really care about. And we've been seeing prices fall in some markets.

How do I know that prices are leveling out? What am I looking for?

GENGLER: A key sign that your local -- again, your local area's beginning to heal is for the rate of price drops to begin to slow. And again, ask the local agent that you're working with. The National Association of Realtors also has some quarterly price data that you can look at.

And again, you want to look for that. Compare it to a year-over- year -- you have to understand that sales are very seasonal. They vary a lot by the weather. So you want to look at sales to increase, compared to what they were, say, a year ago and not last month.

WILLIS: Makes a lot of sense. There are lots of uneven movements in the market. And you've got to get rid of that noise to make sense of it.

Let's talk about rents for a minute, because you say there's something critical to rents that you want to watch to know that your market's in recovery. What is it?

GENGLER: People are willing to pay a lot for a house because, of course, they want to decorate it as they please, but also because they're going to get that guaranteed appreciation. But people are not going to pay significantly more than it will cost for them to rent a similar property.

So it's called a price-to-rent ratio that you want to look for. Find out what you would pay for the type of home you want in your area today, and then also what it would cost you to rent for a year a similar property. That's the price-to-rent ratio.

You want that typically to be under 15, then you can consider buying again. In Miami, it went from 12 to 30 from 2000 to 2006.

WILLIS: So you're talking home price to rent. It's just a simple ratio, a simple fraction, really. And you're looking for something in the 15 area or something like that?

GENGLER: Exactly.


GENGLER: If it drops below 15, you can begin to consider buying again. But again, look at what it was in your area before the boom, because that's the key. Not looking at the national numbers, but at your area.

WILLIS: Amanda Gengler, great information. Thanks so much for your help today.

GENGLER: Thanks, Gerri.

VELSHI: Well, a major department store and a discount airline cutting jobs. We'll have details on that.

And Hurricane Bertha churns in the Atlantic, but are we ready to deal with the economic impact of a major hurricane? And are you prepared?

This is ISSUE #1. We're coming right back after this.


VELSHI: Well, American companies aren't the only ones battered by a slumping economy. Germany-based Siemens says it's slashing more than 16,700 jobs. That's 4.2 percent of its global forces. On top of that, the industrial conglomerate is also cutting nearly $2 billion in costs. Siemens chief executive says that in today's environment, it is imperative to become more efficient.

Well, chalk up another airline scrambling to keep flying in the face of soaring fuel prices. Discount carrier Airtran says it's cutting 480 jobs, or more than 5 percent of its workforce. Expected to get pink slips are 180 pilots, 300 flight attendants and flights will be reduced in September. Officials warn of more possible job cuts in the future. All this on top of word last week that employees can expect pay cuts of about 10 percent.

And next, how to protect your family and your home from a hurricane and other strong storms. But first, let's get you up to speed on the latest headlines. Don Lemon is in the CNN "Newsroom." Hello, Don.

DON LEMON, CNN CORRESPONDENT: Hey, Ali. I mean, can you imagine, would you want to be part of the airline industry right now? I mean every day we're doing a story on just how serious it is, right?

VELSHI: I'm surprised, given that how much I fly, that they are still as polite as they often are to me given how tough it is for them. It's a tough gig right now.

LEMON: And considering it's you, as well.

VELSHI: And considering it's me. That's the other thing.

LEMON: I can't believe anyone is nice to you.

OK. Let's move on to some seriousness. We'll chat after this cut-in.

I want to tell you about leaders of G8 nations today expressing serious concern over Iran's nuclear program. This morning they urged the Mideast nation to obey United Nations resolutions on the issue. Iran says its nuclear program is for peaceful purposes, but some others disagree about that.

New fire warnings to tell you about and evacuations in California. People are leaving their homes in a couple of communities in Butte County. Firefighters called in to rescue residents trapped by a shifting wildfire, pushed by what officials are calling substantial winds. Thousands of homes are threatened. As many as 5,000 people may be forced to get out. There are 330 active fires in the state right now. The most destructive are in Big Sur and Goleta.

Chad Myers checking it out for us.

Chad, we always ask this question, any help for these people on the way?

CHAD MYERS, CNN METEOROLOGIST: No, the exact opposite. Red flag warnings today, Don, all the way from Oregon, all the way back down south, south of San Jose. Anywhere that you see this color here, that's bad. That means low humidity, high heat, and even the potential for a little bit of wind.

Well, when's the first time you've heard of a hurricane -- here's Bertha out here -- actually getting people excited? Well, I just talked to Ron John's Surf Shop down in Coco Beach and the surfers are ready for the waves. They're thinking Thursday night, maybe into Friday. By the time the waves that are generating now finally get onshore here into Florida. Now that's great news for surfers if you know what you're doing. That also could really make some rip currents as those big waves crash over basically these sandbars that are offshore and then rush offshore.

This is not going to hurt a bit. This it's even going to be a fish storm. This is so far away, there aren't even any fish out here. I mean . . .

LEMON: I know, do you . . .

MYERS: Nothing for them to eat out here.

LEMON: I asked you about that last week. I said, what about this Bertha. You said, Don, if you're on the QE2 (ph) maybe, you know, way off the coast or something. But otherwise . . .

MYERS: The first hurricane people are happy about.

LEMON: Yes. All right, Chad, we'll see you at the top of the hour. We'll update you on all the weather conditions throughout there country.

Airline layoffs. You heard Ali and I talk about it at the top of this cut-in. Price hikes and baggage fees. How will troubles in the skies affect your travel? Will you be able to afford your next trip? An airline industry insider, someone who really knows his stuff, he's going to join us straight ahead in the CNN "Newsroom."

I am back in the "Newsroom" at the top of the hour. Now back to New York and ISSUE NUMBER ONE.

GERRI WILLIS, CNN ANCHOR: Preparing and protecting your home from the elements. If you wait for that hurricane siren to sound, it's already too late. CNN's John Zarrella is in Florida and he's checking in with folks there to see if they are ready for this hurricane season.


JOHN ZARRELLA, CNN CORRESPONDENT, (voice over): This impact test shows what happens when a projectile hits a sheet of half-inch thick plywood.


ZARRELLA: The two by four goes right through it. Bottom line? If you plan on using plywood to cover your windows, experts say try to get 5/8 inch thickness. That should work. And to do it right, you need to get started now.

MIKE RIMOLOI, BUILDER: By the time you cut your plywood, you get it sized, you get all your holes marked, you're still looking at an hour per window.

ZARRELLA: If you do it right.

RIMOLOI: Yes, exactly.

ZARRELLA: Builder Mike Rimoloi, a consultant for the Federal Alliance for Safe Homes, demonstrated for us the proper way to board up. For this window, Rimoloi drilled studs into the masonry around the window. RIMOLOI: We need to stay at least two inches in from the exterior side of the wall and that prevents blowing out the concrete block or the masonry. And we're at a maximum of 12-inch intervals.

ZARRELLA: Those are critical points. Again, the anchors need to be two inches off the edge of the frame and you've got to have enough of them.

RIMOLOI: If you just have ones in the corner, like a lot of people want to do, that's not going to provide you any strength.

ZARRELLA: There are anchor kits for wood-frame homes as well. Installation is basically the same. There's one simple way to lessen the risk something will hit your windows -- bring all loose objects inside. Hanging baskets, bird baths, lawn furniture. And if you've got extra time and attic access, you can reinforce your roof.

RIMOLOI: We're just going to put a liberal amount here and run it the whole way down.

ZARRELLA: Using construction adhesive, run a bead along the joint where the truss meets the roof decking. Tests have show this can significantly strengthen your roof. But keep this in mind. RIMOLOI: When the storm's already off the coast of Miami, or the coast of Cape Canaveral, it's too late.


ZARRELLA: Now, of course, you know, one thing also to keep in mind is that if you're going to do that plywood, do it now. Don't wait. Because the 5-inch that you need is going to be gone. You won't have time to precut it. And that's just part of the equation. We've got a basket full of stuff here that we've accumulated. And, of course, it's the NOAA weather radio that you absolutely have to have. You know, you have to have a first aid kit, a tarp in case you have roof leaks, extension cords for running your generator, some visqeen (ph), more plastic liner, flashlights.

And, of course, you know, people always forget simple things like, you've got to have a hand can opener because the electricity will be out and your electric can opener's not going to work. So, Gerri, lots of things to consider. But now is the time to do it, now when we actually do have a hurricane on our doorsteps.


WILLIS: Great advice, John Zarrella. You know, I am amazed by these pictures of the destruction that's done by wind. But the stuff you're showing there, it's actually good for anybody to have even if you're not, you know, in an area where hurricanes typically make land fall. Tell us a little bit about how much that costs to have on hand?

ZARRELLA: Yes, you know, absolutely you're right because, if you're in a tornado zone, you can certainly use this kind of stuff and flashlights and your gas can. We've actually got some water under here. Of course you know they tell you three day's supply of water and food. So remember, folks out there, three day's supply.

This stuff here cost us $239 is what we paid. And some of the things you may have on hand and not really need. So and add your food to that. It's going to be a little expensive. You know, Gerri, real quickly, one thing that's concerning emergency managers is, that because of the economy, people are not going to go out and spend the money on this stuff ahead of time because they're going to say, well, we may not get one. Well, you know, penny wise, pound foolish. You don't want to do that either. If you can afford it, go buy the stuff now.

WILLIS: Hey, John, great information. Thanks so much for that. We really appreciate it.

VELSHI: Yes, if I'm going to take advice from somebody on hurricanes, I'll take it from John Zarrella. He certainly has seen enough of them.

Well, coming up, Mars and Venus and the economy. Just who is having the easier time dealing with these tough times, men or women? We're going to check it out for you.

And we want to know how you feel. Who does have it better? Log on to right now and vote in today's Quick Vote. And, by the way, while you're there, check out the rest of the site. There's good stuff there at

Stay with us. You're watching ISSUE NUMBER ONE right here on CNN.


WILLIS: Critics were quick to slam the G8 plan to cut greenhouse gases in half by 2050. The leaders of the major industrialized nations meeting in Japan aren't making any binding promises, but they are urging major polluting countries to consider their ambitious goals. The World Wildlife Fund calls the action a wasted opportunity that falls dangerously short of what's needed to protect people and nature from climate change. President Bush says it's essential for China and India to come on board. The leaders of those two countries sit down with summit members tomorrow.

VELSHI: Well, pretty much everybody's feeling the effects of this tough economy, but are women feeling the pain more than men? Our next guest says they are. Heidi Hartmann is the president of the Institute for Women's Policy Research and joins us now from Washington.

Heidi, welcome to the show. Tell us what you found.

HEIDI HARTMANN, INSTITUTE FOR WOMEN'S POLICY RESEARCH: Well, in general, women are more vulnerable to an economic recession than men, but it's primarily because they have lower family income. They earn less than men. They're more likely to be raising children on their own. They live longer than men. So, for all these reasons, they have a lower family income. So if prices are rising, as they are now, or people's hours are being cut, or the recession is affecting them in other ways, they're going to have a harder time adjusting their family economic standards to what's going on.

VELSHI: Although in this recession, I mean one of the things that's interesting, whether we're in a recession or not, is that there are some people in this country who will tell you we're not in a recession. This is not effecting everybody equally. So do we really have evidence that women are getting harder hit than men are?

HARTMANN: Well, yes, we do. I mean for six months we've had job losses. Men and women have lost jobs. And, in general, in this recession, more men than women have lost jobs just as common . . .

VELSHI: Right, because men have been in the jobs that have been largely lost, the manufacturing and construction jobs.

HARTMANN: That's right. But even in those industries, women are also losing jobs. And then there are some industries where women are much more effective than men. An example is financial services, women have lost many more jobs than men. And in real estate, women have lost twice as many jobs as men.

So there are certain sectors of the economy where women work that are being disproportionately affected in this particular recession because of the leading problem basically is leading in the banking and financial services and real estate. And those are areas where women are disproportionately employed.

VELSHI: OK, no time like the present. We're in the middle of an election campaign and candidates should have their ears open to these sort of things. You're suggesting that there are some structural changes that can be made that can at least spread the pain around a little more evenly between men and women.

HARTMANN: Absolutely. One thing, of course, is always to extend unemployment benefits wherever we have a recession. And really with six straight months of job losses, I think most economists would agree we're now in recession, even though we haven't yet seen that downturn in total economic output. But extending unemployment benefits to those who have been employed longer.

And, you know, for women, many states don't actually cover them. If you're working part-time in a regular job, but part-time, you may not be covered in some states. If you're a lower-wage worker, you may not have earned enough in the last quarter or the last five quarters to get unemployment benefits. So these are the kinds of changes that policymakers at the state and national level can make.

And if we're thinking about job creation, which, believe me, the political leaders will certainly be thinking about now because we've lost nearly 500,000 jobs since January, you know, we usually think in terms of building roads and bridges. Well, what about improving schools, educational services, health care services? These are the areas that women work in. And state budgets are going to really face the crunch because they rely so much on property taxes.

VELSHI: And those property taxes have gone away.

Heidi, we have to go, but it's a great topic. Thank you very much for being with us.

WILLIS: Fascinating topic.

Well, coming up, we'll take you behind the glitz and glam and into the lives of those in Hollywood who are struggling in this economy.

And the Help Desk is standing by to answer your money questions. Send us your e-mails to You're watching the home of America's economy, CNN.


VELSHI: Well, Southwest Airlines is going international. The discount carrier announced today that it's teaming up with Canada's West Jet. Travelers will be able to use Southwest's web site to book tickets for both airlines and miles will be interchangeable. West Jet flies all over Canada, the U.S., Mexico and the Carribean.

WILLIS: Well, it is time now for the Help Desk. Anya Kamenetz is a columnist with Yahoo Finance and the author of "Generation Debt." Stephanie Elam is a CNN business correspondent. And you just saw Amanda Gengler from "Money" magazine.

Good to see all of you. Let's get right down to it.

Ana in Texas asks, "how is the economy going to affect student loan applications for this fall? Would we be better off applying for these loans in our name or in our son's name with us as co-signers?"

Anya, what do you think?

ANYA KAMENETZ, AUTHOR, "GENERATION DEBT": Well, don't panic, first of all. There has not been any reports of people not getting the student loans they need. Go to your college financial aid office. Secondly, very important that you max out those federal student loans. You fill out the FAFSA application. Max out those loans. And I would say, look at the plus loans as well. Those parental plus loans in preference to a private, student loan. Your credit score is not going to figure into the federal student loan application.

WILLIS: Lots of problems with these private loans. Lots of lenders not making those loans, so you really have to work on getting those federal dollars.

All right. Let's move on to Paul from Georgia who asks, "what are the key indicators" "of a recession? Is there anything that makes this period different from other recessions?"

Stephanie, what do you think?

STEPHANIE ELAM, CNN BUSINESS CORRESPONDENT: Well, you know, when you take a look at a recession, it begins when we hit the peak in economic activity and it ends when we get to the trough in activity. So that's why we tend to look at it backwards.

But it tends to be widespread across the economy that we're looking at here and it lasts for more than just a couple of months. So the things we look at are the Gross Domestic Product of the country. We look at employment. We look at things to come.



WILLIS: That's the big measure of growth.

ELAM: The big number. What are we making and putting out? What is the country putting out into the rest of the world. So we look at that. Industrial production. Retail sales. These are all the metrics that we used to look at, whether or not we have a recession. The other thing is, there are some people who say there are some similarities to the 2001 recession that we had based on business activity. And that's the most recent recession that we had. But again, it's one of those things that after we get through it and we look back and we can dissect it.

WILLIS: It's hard to know right now. Until it's over, you don't really know what's going on. ELAM: Yes. True.

WILLIS: All right. Let's move on to Rick in Alabama who says, "what is the best way to protect myself from the possibility of an economic collapse? Should I keep cash on hand or should I invest overseas?"

I want to open this up. Let's start with you, Amanda. You know, I listen to this and I say, economic collapse? Who think there's going to be a wide scale economic collapse?

AMANDA GENGLER, "MONEY": It does seem unlikely that there is going to be an all out economic collapse. But that does not mean that you should do nothing. So you want to do a little bit of both.

First, you do want to shore up those emergency funds because, if you are laid off, it's going to be harder to get a new job. And generally we say a two-income household should have at least three months of living expenses saved in a high-interest savings account or money market. In a downturn, we say at least six months. If you're self-employed, probably even more. And especially if you're in one of the hard hit industries, say construction or financial services, you're going to want to possibly have a little bit more.

Overseas, don't be tempted. They've had great returns. You never want to chase performance. So we say about a quarter to a third of your equities can be in international stocks.

WILLIS: But dial it back a little bit.

Anya, if you're, you know, a young person out there and you're worried about the economy and what's going on, what do you do? KAMENETZ: I think the most important thing is to learn how to save and live within your means. I mean Amanda's talking about building up that emergency fund, making sure you are hitting the 401(k) contributions, not worrying too much right now about your overall portfolio as much as the behavior of living within your means and saving.

WILLIS: All right, Anya, Stephanie, Amanda, thanks so much for your help today. We appreciate it.


VELSHI: Tanks, Gerri.

Still ahead, even life in Hollywood is taking a hit. We're going to take you there.

And Poppy Harlow will be back with the results of today's Quick Vote. Who is having a harder time in today's tough economy, men or women? Log in now and cast your vote.

You're watching ISSUE NUMBER ONE on CNN and we are coming right back.


VELSHI: All right. Who's hurt most by the economic downturn? That's today's Quick Vote question. Let's check back in with CNN "Money's" Poppy Harlow for the results.

Poppy, what are they saying?


Well, most people think it's split. They think men and women equally are feeling the pain. Seventy-two percent there. Fifteen percent say men are getting hurt the hardest. Thirteen percent said it was women. So a majority of people think we're both feeling it, Ali. I know you and I are feeling it equally like everyone says (ph).

VELSHI: We're feeling it equally. Absolutely.

All right, Poppy, thank you very much for that.


WILLIS: Well, that's very even-handed.

OK. When it comes to the tough economy, Hollywood seems to be largely immune to it. At least if you're a star. But it's a very different picture for those who work behind the scenes. Many live paycheck to paycheck. CNN's Brooke Anderson explains.


DAVID ABBOTT, BELOW THE LINE WORKER: I'm a make-up artist, second generation.

BROOKE ANDERSON, CNN CORRESPONDENT, (voice over): There's a good reason why David Abbott calls himself a multi-tasking dad. He's a Hollywood make-up artist, father to four special needs adopted kids, his wife Fran receives daily chemo treatments and they've already reared three biological children.

D. ABBOTT: The two boys are electricians and local 728. My daughter, my older daughter, is a make-up artist as well.

ANDERSON: David and his grown kids are known as below the line workers. Hollywood's behind the scenes skilled labor. For thousands in this workforce, the tanking economy and recent writers' strike have been a devastating one-two punch.

FRAN ABBOTT, WIFE OF BELOW THE LINE WORKER: We had to sell our home. A short sell. We did a short sell. We lost money. We sold our RV.

D. ABBOTT: You're selling everything you can just to make sure you're keeping above water.

LESLIE SIMMONS, "THE HOLLYWOOD REPORTER": It's the people that live paycheck to paycheck that can't really plan for that loss of money.

ANDERSON: "The Hollywood Reporter's" Leslie Simmons says the Abbott family is far from alone. And things could get a lot worse with another strike brewing.

SIMMONS: They would definitely be the ones most impacted by an actors' strike.

ANDERSON: Without the bank accounts of the industry's a-list or second jobs, standard for many actors, it's the below the line workers who could lose the most if the Screen Actors' Guild strikes.

F. ABBOTT: Well, obviously, it could kill me.

ANDERSON: In the case of the Abbotts, if David doesn't work a minimum number of hours, he and Fran will lose their health insurance.

F. ABBOTT: I've had lupus for several years but maintained control of it. With the economy and the strikes, it came out of remission and it now is affected my brain.

ANDERSON: Where they lack in finances and health, the Abbotts admit they have been rich in love and support. Besides family and friends, they have received assistance from the Motion Picture and Television Fund. A social service agency for out of work artists.

F. ABBOTT: More than just a safety net. This is a safety net. They're just unbelievable people that have come in and just provided all kinds of services.

ANDERSON: Brooke Anderson, CNN, Hollywood. (END VIDEOTAPE)

VELSHI: It is kind of interesting. You don't think of that side of Hollywood, you know.

WILLIS: No, you don't.

VELSHI: You think of glamorous lives and lots of money and . . .

WILLIS: It takes lots and lots and lots of people to put together a movie or a TV show.


WILLIS: Exactly.

VELSHI: A lot of folks who are making this ISSUE NUMBER ONE. And the economy is issue number one. So . . .

WILLIS: We here at CNN, we want to inform you on the issues of the day, particularly when it comes to the economy. ISSUE NUMBER ONE will be back here tomorrow, same time, 12:00 p.m. Eastern, right here on CNN.

VELSHI: Not just us, the whole team.

Time now to get you up to speed on other stories making headlines. CNN "Newsroom" with Don Lemon and Kyra Phillips starts right now.

KYRA PHILLIPS: John McCain, Barack Obama, both say yes we can