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In the Arena
Avenging Osama bin Laden; "Live Free or Die"
Aired May 13, 2011 - 20:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
ELIOT SPITZER, HOST: Good evening. I'm Eliot Spitzer. Thanks for joining us "IN THE ARENA."
Tonight: massive carnage in Pakistan as the Taliban avenged Osama bin Laden's death in a brutal and cowardly manner. Twin suicide attacks targeting a military academy leave dozens of young cadets dead. We'll have more on that story.
But, first, a look at the other stories we'll be drilling down on tonight:
(BEGIN VIDEO CLIP)
REP. RON PAUL (R), TEXAS: I am a candidate for the presidency in the Republican Party primary.
(CHEERS)
(END VIDEO CLIP)
SPITZER: Ron Paul is running for president again. If he had won the last time, guess what he wouldn't have done about bin Laden?
Then -- remember Japan? Michio Kaku hasn't forgotten.
(BEGIN VIDEO CLIP)
MICHIO KAKU, SCIENTIST: This is a ticking time bomb.
(END VIDEO CLIP)
SPITZER: I'll ask him if the Japanese government has learned from its mistakes.
And, how bad is it in Libya? Over 30,000 refugees crammed into leaky boats, a terrifying journey to safety. Many have made it. Some have not. And more are on the way.
Back to our top story -- body parts scattered across the street. That's how witnesses describe the gruesome scene in northwest Pakistan after the Taliban followed through on it's promise to exact revenge for bin Laden's death.
Two suicide bombers, one on a motorcycle, struck a military training facility, exploding just five minutes apart. They waited until military recruits gathered outside the fort after just completing a nine-month training program. They were heading back home to their villages. And then the back-to-back explosions hit.
CNN's Stan Grant visited the scene earlier today and joins us now from Islamabad. Stan, it must have been gruesome.
STAN GRANT, CNN SENIOR INTERNATIONAL CORRESPONDENT: It certainly was a gruesome scene, Eliot, you know, one that people in Pakistan have sadly grown all too used to. They have seen these attacks in the past and they are certainly ferocious when the Taliban unleashes its might in such a way.
You know, there had been a lot of fear about this since the death of Osama bin Laden. A lot of trepidation just when would the militants strike, where would they strike? We saw it today in a spectacular and violent fashion.
(BEGIN VIDEOTAPE)
GRANT: The Taliban did this?
UNIDENTIFIED MALE: Taliban.
GRANT (voice-over): That one word enough to strike terror into people here -- the militants claiming responsibility for this carnage. Revenge for the killing of Osama bin Laden, they say, and a warning of what is to come.
"Both men were Taliban. One came on a motorcycle. The other was walking," this man says. "We shot him and then he ran and exploded the bomb."
All around debris, a testament to the ferocity of the attack, shattered buildings, blown out cars. Here, blood, visible on the ground.
(on camera): And these are parts of motorcycle. Here, you have the mechanism that's used to kick-start the bike, the strewn wreckage, and this is the badge of the bike itself. The CR-70.
(voice-over): The scores of wounded rushed to the nearby Peshawar hospital, a scene of grief and chaos.
The number of dead counted in the dozens in the hours after the attack rising throughout the day.
Witnesses tell of the moments when dual suicide bombers shattered the morning's peace.
"I heard an explosion and I rushed to the road. Four minutes later there was another one." This man says, "I saw people dead and injured."
(on camera): Even hours after this attack you can see the military is still very edgy. There's a line of them here. They've been pushing back any of the onlookers who were trying to come down to the scene and especially keeping a very close eye on these buildings along here. (voice-over): The attack has targeted this military training center. Members of the Frontier military police just finished a nine- month program. These vehicles lined up to collect them.
This car carrying a prayer that god would make their journey safe.
But it was a journey some would never take, almost all of the dead young recruits -- victims of what some say is Pakistan's double game, killed by the Taliban to avenge Osama bin Laden just at the very time the military here is denying claims it was hiding him.
(END VIDEOTAPE)
GRANT: And this goes to the very heart of the Pakistan paradox. You know, there's been a history here for decades of accommodating, dealing with the militants, on one hand, particularly to provide strategic debt the Pakistan military feels it needs to fend off attack from India -- while, on the other hand, going after other insurgent groups. Now, if that sounds complicated, it is complicated. At the same time, people, members of the military, as we saw today, caught in the crossfire -- Eliot.
SPITZER: Stan Grant, thanks so much for that report.
In the wake of this horrific attack in Pakistan, I got a chance to speak to Imran Khan, a prominent and controversial Pakistani politician. He's been an outspoken critic of U.S. policy in his country. I spoke to him a short time ago and asked him how his government plans to target terrorists on its soil.
(BEGIN VIDEOTAPE)
SPITZER: Imran Khan is in London tonight.
Mr. Khan, thank you for joining me.
IMRAN KHAN, CRITIC OF U.S. POLICY IN PAKISTAN: Pleasure.
SPITZER: Do you believe that your military and intelligence leadership is doing everything it can to root out every terrorist who resides in the nation of Pakistan?
KHAN: Well, put it this way -- more Pakistani soldiers have died than NATO soldiers put together in Iraq and Afghanistan. The Pakistan J2 (ph) has been attacked by terrorists. Generals have died. The ISI, the security agency has been attacked. The commando center has been attacked.
So, would Pakistan army be patronizing terrorists who are attacking them? I mean, to me as a Pakistani, I'm bewildered by all this. You know, after the Osama incident, we don't know what to believe anymore.
And that's why I believe it has to be now homegrown policy. Pakistan should own up the war and not behave as a set of fighting America's war because America is giving Pakistan the money, because as I said, it is impeding our efforts in this war. It is increasing radicalization in the society and Pakistan is in a nutcracker situation. On one hand, you have extremists hitting us and U.S. is pressure Pakistan to do more in our tribal areas where blowback is on the cities with more bombings and more suicide attacks.
I don't think Pakistan can last much longer. I don't think the country can take this much longer.
SPITZER: Mr. Khan, we have spoken many times in the past. You know, I'm sympathetic certainly to some arguments about what is instigating the rising radicalism in Pakistan.
But I think you did not answer my question directly and I hate to push you on this. But, yes, you are correct. The Pakistani army has been attacked. The ISI has been attacked. The Pakistani people have suffered terribly.
But is it not the case that there are elements within both the military and the intelligence services who are favorable, who have helped, who have assisted certain of the Taliban and even al Qaeda elements within Pakistan for very subtle and important reasons in terms of your dynamic with India?
KHAN: Well, let me just say one thing. I mean -- I'm speculating here because I'm an outsider. I'm not in the government. But don't forget that not very long ago, the same mujahidin, same Osama bin Laden, al Qaeda, were closely affiliated to the ISI, in fact, CIA, when they were fighting the Soviets.
And so, when Pakistan changed after 9/11 -- remember, Pakistan recognized the Taliban government. So, suddenly, after 9/11, Pakistan reversed this policy. It's possible that there are members of the security forces who would have still kept connections with them, you know? Just because the government changes policy, it's possible that within security forces, there would be elements that would not have changed or might kept the contact.
But the fact of the matter is the country is going down. I mean, we cannot sustain this much longer.
SPITZER: Mr. Khan, I --
KHAN: And so, therefore, a change of policy.
SPITZER: Mr. Khan, I am sympathetic to your argument that something must change. It is not working now. But what you just said is critically important. There may in fact be, I think we believe it's almost a certainty that there are elements of ISI and military that have been helping and assisting al Qaeda and the Taliban.
In that context, was it not reasonable for President Obama to act as he did to get rid of Osama bin Laden, to get rid of a terrorist who we now know was continuing to plot attacks against the United States?
KHAN: Looking at it from the Pakistani point of view. Surely, here's a country which has sacrificed far more than Americans. Remember 34,000 dead here. Now, should this -- after all these sacrifices, should not Pakistan have taken him out? Now, if the ally for which Pakistan is fighting this war, if it does not trust Pakistan -- where does that leave us?
I'm talking now as a citizen of Pakistan. Where does that leave Pakistanis? What are we? Are we friends or enemies? Who are we giving these sacrifices for?
We did not have any suicide attacks in Pakistan before 2004. We had no militant Taliban in Pakistan. And here is a country which had 500 bomb blasts last year. So, where do we go from here?
I as a citizen of the country ask myself the question: can the country take this much longer? Your point is that you think Pakistan is not a trustworthy ally. I'm saying that it's about time Pakistan had a government which made its war, told the Americans we don't want any aid. We'll deal with it ourselves. We will ensure there's no terrorism from Pakistani soil.
We have a much better chance of dealing with the terrorism if it's a sovereign credible Pakistani government rather than a puppet government which is what it is perceived -- a government that is not sovereign. It's not -- doesn't have any credibility either with the U.S. or the militants. It doesn't have a chance of engaging with certain elements amongst the terrorists who it can talk and disassociate from the real terrorists, al Qaeda.
Remember, most of the people who are fighting today, 95 percent of the people who are fighting are own tribal people who are neither terrorists nor religious fundamentalists. They are finding as a result of Pakistani military operations in the tribal area.
SPITZER: Mr. Khan --
KHAN: So, a credible should have peace talks with them and then isolate al Qaeda, which is worry to the West.
SPITZER: Mr. Khan, as you know, I'm sympathetic -- as I've said -- to certain of your arguments about how this is imposing enormous costs upon the Pakistani government and Pakistani people and a change in strategy is necessary.
And just to clarify: I did not say Pakistani government could not be trusted. I said there are elements within it, within the ISI and military, as you almost conceded earlier, that could not be trusted. And hence what the president did was absolutely right and justified.
I think we will have to continue this conversation down the road. Clearly, we need a new strategy. We need a way to confront terrorism. We need a way to confront the militancy that is rising and we are sympathetic to the costs that have been upon the Pakistani people.
So, sir, why do you not want $21 billion of U.S. aid? I think we could agree that rebuilding the Pakistani economy, bringing it into the modern era, spreading education, and all of the things you can do with foreign aid, will only assist the Pakistani population. Why do you not want this money?
KHAN: The people of Pakistan are dying under this war on terror. This aid is being given to us to fight this war. And, unfortunately, if Pakistan is considered a hired gun of the U.S., it reduces its capability to win this war on terror. If this becomes Pakistan's war, I think Pakistan will win the war. But if it's perceived that Pakistan army is a mercenary army of the U.S., we have no chance of winning.
SPITZER: Mr. Khan, I clearly agree the scale of human tragedy is beyond words. We all share the concerns about that. But something you just said I am troubled by. You said if it is the Pakistani war against terror, you will win. At the same time, the leader of your military is refusing to pursue the leaders of al Qaeda, the Haqqani tribe and some of the most violent terrorist groups in Pakistan.
Why should we in the United States have confidence that the Pakistani military is going to do everything it can do to pursue terrorists?
KHAN: Well, this is why I'm saying -- the fact U.S. thinks that Pakistan military is playing a double game can only be because they want the U.S. money and at the same time they are patronizing terrorists. I guess that's what the Pakistan army is being accused of.
That's why I believe that if we don't take any aid, if we have a credible government, what is U.S. interested that there should be no terrorism from Pakistani soil. A credible government should guarantee the U.S. that look, this is your concern. We will make sure there's no terrorism from our soil. But we don't need your aid because the moment we get your aid, we are perceived as agents of America, as the jihadi organizations call Pakistan. They target Pakistan because Pakistan is perceived as U.S. agents, America and its agent, so, jihadist against.
That's why you see the sort of carnage that is taking place today. That's why 34,000 Pakistanis are dying and extremism and radicalization is increasing in our society. So, if a credible government gives U.S. undertaking, there won't be any terrorism from our soil, U.S. should be happy with that. And then Pakistan should isolate the real terrorists. That is the ones who have threatened U.S. or al Qaeda. Not the tribal people of Pakistan.
SPITZER: All right, Mr. Khan, as always, thank you for fascinating conversation.
KHAN: Thank you.
(END VIDEOTAPE)
SPITZER: Coming up, how would presidential candidate Ron Paul handle the bin Laden raid differently if he were president. The answer might shock you.
Stay with us. (COMMERCIAL BREAK)
SPITZER: Ron Paul's presidential campaign in 2008 was a grassroots phenomenon that turned him from a curiosity into a serious political figure. Today, as he announces candidacy for the 2012 Republican nomination, some views may startle you. He joins me now.
Welcome back, congressman.
REP. RON PAUL (R), TEXAS: Thank you. Good to be with you.
SPITZER: First, congratulations on your announcement. And good luck. I want to say that to everybody who gets into the fray of politics. So, I wish you all the best.
PAUL: OK. Thank you.
SPITZER: Look, I want to begin by quoting back to something you said about the raid that captured and then killed Osama bin Laden and this is a direct quote from what you said. You said, "I don't think it was necessary. No. It absolutely was not necessary. I would suggest the way they got Khalid Sheikh Mohammed. We went and cooperated with Pakistan."
Are you really suggesting, sir, that we should have just said to the Pakistanis, work with us, we now know that bin Laden was sitting there plotting additional attacks and you don't think this was the right thing to do?
PAUL: No. I think -- you know, we don't know all of the details. From the information I have I think it could have been done better. We cooperated before and if you don't recognize that a sovereign nation is important, then all you do is build enemies.
So, today, there was retaliation and a lot of people were killed. The hatred is being built up. I think we're working toward a stage that the resentment will be so strong that we'll be invading and occupying Pakistan. The last thing in the world we need.
But it isn't like Pakistan has refused to help us. They have cooperated with us before.
SPITZER: Congressman --
PAUL: Just a sec -- we've captured quite a few who have been brought here. The people involved in the first bombing of the towers. They were brought to trial and some were executed. I don't know what's so terribly wrong with that.
And what would be so terribly wrong with saying that maybe we ought to interrogate bin Laden. Is that such a horrible suggestion?
SPITZER: Congressman, I want to make it clear. If you had been sitting there in the Oval Office, in the Situation Room with the same evidence that was presented to President Obama, you would not have ordered the raid that he ordered? PAUL: I would have said just what I got done telling you. I would have worked with the government of Pakistan.
SPITZER: I want to switch gears here for a minute. You said and again, I'm going to quote you directly. "I'm on the Gulf Coast. I have a house on the beach or had one recently. I don't think someone in New York or New Hampshire or Iowa has to pay for my flood on the Gulf Coast."
You then went on, I understand, you don't think FEMA should be there to help out folks who suffer in the tornadoes, the floods, these natural disasters that wreak havoc and have wreaked havoc recently along the Mississippi and elsewhere through the Southeast?
PAUL: No, I don't think so. There's no authority for it.
SPITZER: No authority for it -- where?
PAUL: There's no constitutional authority. It's bad economics especially. And people --
SPITZER: Can I stop you one second?
PAUL: Well, let me answer.
SPITZER: No, no, we'll take this sequentially. No constitutional authority -- just so we understand, we'll get to economics in a second. No constitutional authority to set up FEMA is what you're saying?
PAUL: That is what I'm saying. Let me answer my question.
No, there's no constitutional (ph) to set up an authority that you take money from one state and give it to somebody else because they've been injured. But let me make the important economic point is if you want -- if I want to build my house on the beach and I can't get insurance, why should I get subsidized insurance to build my house in dangerous area. When you can't get private insurance because it's so expensive, it's telling you something.
Why should people build there and pass on the penalty to somebody else who don't get to live on the beach? See? That makes no sense whatsoever.
This whole idea that we have this moral obligation -- what about the moral obligation to allow people to keep what they earn and assume responsibility for themselves? So, this is precisely a program that is very similar to so many others that has gotten us into this mess.
SPITZER: Let me read to you something else that you said. You said, "The government, they have nothing. Everything they get and they want to give to someone else, they have to steal it from somebody. That's called taxation."
Is taxation theft in your mind?
PAUL: Yes, it is. You steal from a productive individual and give it to somebody else. So --
SPITZER: It is theft -- I just want to understand this. We've had lots of conversations in the past. I always enjoy them. But I just want folks to understand your notion that taxation that is there to pay for things such as national defense or environmental cleanups or FEMA, that is theft in your view?
PAUL: When you take the income from other people, it is. The Founders didn't believe in it. It was not an income tax. That's a recent event. It's not even 100 years old. It hasn't served us well.
All it has done is give us a government out of control -- a warmongering government that has an entitlement system that there is no way they're going to pay for it. So, it's all based on an immoral principle that government takes and they can't produce anything. They have to take it from somebody else and that's a moral issue.
SPITZER: But, Congressman, wait a minute. We can agree -- taxation was embedded in the very foundation of the Constitution.
PAUL: But not income tax.
SPITZER: But the income tax merely related to whether it would be apportioned on a per capita basis, or whether it would vary based upon the magnitude of one's income. Now, there was an amendment to the Constitution that was passed, duly ratified. So, it is part of the Constitution.
So, why is that now theft?
PAUL: Well, because you are taking money unfairly -- in the way, we enforce the income tax is highly abusive because we don't honor and respect --
SPITZER: Why?
PAUL: Because you're guilty until proven innocent. You have to prove yourself. You have to keep records. You have to testify against yourself.
I mean, you are a lawyer. You should understand that.
SPITZER: You're not guilty until proven innocent.
(CROSSTALK)
PAUL: Sure you are. You have to prove your innocence before the IRS --
SPITZER: Wait a minute, Congressman. I'm no fan of the IRS any more than anybody else. But I pay my taxes and pay them with pride because it pays for our education, our national defense, the things that we do around the world. That's what being a citizen and being part of a community is about, isn't it?
PAUL: Good. You're a good volunteer. SPITZER: Congressman, look, as I said at the top. Congratulations. Even though my income tax what you view as theft are used to pay your salary, I'm proud to pay 'em. I got to tell you.
PAUL: Oh, boy. Yes, once it was said that taxes were what we pay for civilization and look at our economy, and what we're doing today. I don't think we've gotten a very good deal. Not a good deal.
SPITZER: All right. Congressman Paul, thank you for your time. And good luck.
Coming up: Japan's nuclear crisis turns out to be worst than we originally thought. The details when we return. Stay with us.
(COMMERCIAL BREAK)
SPITZER: A new report out of Japan says damage to reactor number one was much worse than originally thought and it was leaking water, most likely leaving those dangerous fuel rods exposed. And yet, some residents were recently allowed back in to the evacuation area to gather personal belongings.
This is the latest in a string of what seemed to be conflicting information and actions out of Japan.
To help us cut through this double talk, famous physicist and author of "Physics of the Future," Professor Michio Kaku is here.
Professor Kaku, thank you so much for joining us.
KAKU: Glad to be on the show.
SPITZER: So, first, let's begin with where things are. You still think this is a dangerous and unstable situation.
KAKU: This is a ticking time bomb. It is stable but only until we have another earthquake or another pipe break. At that point water levels could drop, exposing the core and accidents start up all over again. The nightmare is not over yet.
SPITZER: But what does it mean that when they went in recently, they found water was lower than they expected, possibly meaning that the rods in reactor one have been exposed. What does that mean in terms of radiation leakage and how close we were to a meltdown?
KAKU: The problem is we have firemen and brave workers putting water on top of the cores. But the cores are not filling up. There's a leak some place. Water is actually spilling out, meaning that there's damage to the containment structure.
And if water keeps coming out, it means more contaminated water that's building up thousands of tons of water being stored in tanks. Some of that as you know was released into the ocean, causing an international scandal and incident with Korea and China.
SPITZER: Do we know what the perimeters are, and how far has that water gone? Is it going into tanks or is it contained in some way?
KAKU: So far, it's contained. They brought in extra tanks and they had to, of course, bleed some of the radioactive water into the ocean to make room for more water.
So, think of it. Every time they put water in, it's coming out. There's a leak which means damage to the containment may be more severe than originally thought.
SPITZER: And how about the rods themselves? The fact that the rods have been exposed, does that mean that they are hotter than they would have been since the water is not absorbing heat or energy?
KAKU: That's right. The tops of the reactors are permanently uncovered. So, we're not talking about water being many, many feet above the core. We're talking about water levels dropping actually below the top of the core themselves, causing damage. And that's dangerous because we don't know the amount of melting that is taking place -- a huge question mark.
There are debates among physicists exactly how much melting has taken place.
SPITZER: Now, one of the things I saw, they're going to put polyester tents over the reactor. Now, look, I've heard they are polyester suits, polyester in toys -- does polyester that stop radiation?
KAKU: It does not. Gamma rays will go right through radiation suits, right through plastic. All it does, it keeps some of the particulates in. So we're building this gigantic tent hoping that some of the cesium, iodine particles don't escape because if that gets into the food chain and then we have the problems with milk. The problems with sushi being contaminated. And so that's why they hope to contain the particulates and the dust from getting into the environment.
SPITZER: One of the things that has been notable, the Japanese leadership has not been forthright with the public. It has not been transparent in any way, shape or form. And you have accused of them of not being honest about what they're telling the public. Have they gotten better over the course of this crisis?
KAKU: I don't think so. The bottom line is they're trying to protect their investments and, you know, to try to salvage the reactors. Those reactors cannot be salvaged. They're pieces of junk right now. So the workers -- I have the ultimate respect for the workers. But the managers, their incompetence, they've lost -- the people have lost faith in them. You get this mental image of Homer Simpson operating a nuclear power plant.
SPITZER: Does the public there have any confidence remaining in the government?
KAKU: It's dropping like a rock. People are saying that first, they're going to evacuate us, they're going to take us back, they're going to evacuate. It goes back and forth, and the government and the utility are even fighting. And so we had a situation where there's no united front. People are losing faith and people are saying who is in charge here? I mean, who really knows what's happening? In fact, American engineers have contradicted the statements of the Japanese government making the Japanese government look like foolish.
SPITZER: And how long will it be until the people who live in the area surrounding these plants will be able to go back and live in those houses?
KAKU: Well, at Chernobyl, there's a dead zone that 25 years later is still off-limits. The reactor will take about 30 years to clean up. Hitachi Corporation --
SPITZER: Thirty years?
KAKU: Thirty years. That's the estimate of the Hitachi Corporation. The major estimate is 30 years to clean up that operation. Three Mile Island took 14 years and there was no breach of containment at Three Mile Island. It was only one unit. Here we have three reactors, one spent fuel pond, possible breach of containment. Thirty years is about accurate.
SPITZER: Wow. Wow. Thank you for that report.
Michio Kaku, thanks for being here. Not good news I'm afraid to say.
Up next, 300 nautical miles the distance from Tripoli to a tiny Italian island. The difference between life and death. The story of a desperate journey when we come back.
(COMMERCIAL BREAK)
SPITZER: As the war rages on in Libya, thousands of refugees trying to flee are being forced to resort to treacherous, even deadly ways to escape. CNN's Ivan Watson joins us now from Lampedusa, Italy.
Ivan, who are these refugees and why are they so desperate to leave?
IVAN WATSON, CNN CORRESPONDENT: Well, these aren't really Libyans, Eliot. These are for the most part Sub-Saharan Africans, Ghanaians, Senegalese, Sierra Leoneans desperate to escape the fighting in Libya and resorting to a dangerous journey across the Mediterranean Sea to escape that grinding conflict.
(BEGIN VIDEOTAPE)
WATSON (voice-over): They come by sea, leaky wooden fishing boats jammed full. Some women and children all desperate to escape North Africa. All willing to risk their lives to get to this tiny island on the edge of Europe.
IBRAHIM COOPER, REFUGEE FROM SIERRA LEONE: The sea is very difficult. Some people are in command. As for me, I (INAUDIBLE) so much. I'm happy I'm not here.
WATSON: For years, most of the boat people coming to Lampedusa were Sub-Saharan African migrants fleeing poverty and unemployment. But now, there's a new driver, the grinding war in Libya.
COOPER: It's very dangerous. Maybe not so -- let me say, the government should (INAUDIBLE) I don't know. I can't say. Look, I have to escape.
WATSON (on camera): It's only noon and this is already the third fishing boat crammed with migrants and refugees to land here in Lampedusa in just one morning.
(voice-over): On Friday, more than 1,200 refugees from Libya landed in a single day.
LAURA BOLDRINI, UNHCR SPOKESWOMAN: We have experienced this reality everywhere in the world. Every time you have a war, you have civilians who tried to escape.
WATSON: The United Nations says more than 30,000 migrants and refugees have landed here in just the last three months.
BOLDRINI: This is a Russian roulette. You know, you really don't know at this point if you can reach the other side of the Mediterranean. It's terribly risky.
WATSON: Look what happened last Sunday. One of the overloaded boats hit the rocks off the coast. Italian rescue workers struggled to save hundreds of people but not all made it. Italian villagers held a funeral service for three passengers from that doomed boat. No one even knows their names.
In the past few months, the U.N. estimates hundreds of boat people died attempting this journey across the Mediterranean. Faceless victims of a dangerous voyage who never got a funeral.
(END VIDEOTAPE)
WATSON: Eliot, just today, more than 1,270 people landed on this tiny island here in southern Italy. And if you can only imagine the population, the total population of this island, a little bit less than 6,000 and tens of thousands of people like this have been flooding this place over the course of the last three months. And in a foreseen consequence of the Arab spring revolts that we've seen that have rippled across North Africa and brought down governments and challenged governments and as a result brought down the border controls that help stem the tide of illegal migration across the sea.
SPITZER: You know, Ivan, what is going to happen now with these tens of thousands of refugees on the small island of Lampedusa. Clearly, it cannot accommodate them. Where do they go and who will take them?
WATSON: Well, the island was completely overwhelmed just a month ago by migrants. There's thousands of them sleeping on the streets here along the jetties, along the beachfronts and it was a big crisis for Italy. Now, they're putting a system in place. They're moving them to basically a processing center in Lampedusa and then they're moved on. For instance, to date, more than a hundred minors under 17- year-olds were taken on a commercial ship to other centers around Italy.
Some of the Tunisians that have come by the tens of thousands. There's a new agreement that has been repatriating some of those people back home. But this is an ongoing challenge and it's creating friction between Italy and some of its neighbor states in the European Union. Italy saying it needs more help to deal with this crush of humanity coming up through its southern borders.
SPITZER: You know, I can only imagine this is going to be a dicey political matter within the E.U. as you mentioned. Immigration always a tough issue there, increasingly tense because of migration from North Africa in particular. So what is going on? What pot is being stirred by this within the E.U. in terms of the politics of immigration?
WATSON: The island has become a symbol for some right wing parties that campaign on the immigration issue. And what you've actually had is some European Union governments at least partially trying to suspend a fundamental rule of the European Union which is you're supposed to be able to cross borders here if you're a citizen without having to show a passport, without any passport checks. Just this week, Denmark saying that it wants to impose some border restrictions and many of these politicians, these right wing politicians say to the crisis that unfolded here as an excuse for trying to stem the movement particularly of illegal immigrants around the European Union. This is a big challenge for this continent right now.
SPITZER: Indeed it is. It's going to be interesting to watch to see how this plays out. Ivan Watson, thanks for that report.
Coming up, health care is called the third rail of American politics. So why do so many Republicans keep electrocuting themselves? I'll ask James Carville and Rick Lazio when we come back.
(COMMERCIAL BREAK)
SPITZER: They call it the third rail of American politics. I'm referring, of course, to health care. It's an issue that can bring a campaign or a presidency to the brink of disaster.
Obamacare, as the Republicans like to call it, has divided Washington and indeed the whole country. Yet in the last few days, Republican Mitt Romney and others have come out with health care plans that sound suspiciously like President Obama's. Huh?
A short time ago I sat down and tried to untangle the whole mess with CNN political contributor James Carville and former GOP Congressman Rick Lazio.
(BEGIN VIDEOTAPE) SPITZER: Gentlemen, welcome. Thanks for joining us.
JAMES CARVILLE, CNN POLITICAL CONTRIBUTOR: Thank you.
RICK LAZIO (R), FMR. NEW YORK CONGRESSMAN: Thanks, Eliot. Great to be on. Hi, James.
CARVILLE: Hello. How's everything going?
SPITZER: Rick, I just got to start with you. I listened to Governor Mitt Romney's speech in which he tried to run as far away as he could from Obamacare, what you guys call Obamacare, and all I heard was him make the best defense of the individual mandate I've ever heard. The piece of the health care plan you Republicans pretend to hate. He made a perfect defense of the obligation of every person to be in the plan. Did you hear the speech and hear the same thing I did?
LAZIO: No, but I know what he believes in. And, you know, what he's doing is he's getting ahead of this issue. He's explaining that he was involved hands-on in Massachusetts overwhelmingly a Democratic legislature, brings people together, solves a problem. There are things he learned from this, things he'd do again, some things he didn't like, some corrections he'd make. And what he's talking about is a fundamental difference between what President Obama signed into law, which is a Washington-based health care program, and one which prizes individual responsibility, individual choice, and state control where there's going to be a lot more innovation and experimentation.
SPITZER: But, Rick -- Rick --
LAZIO: And another fundamental difference I would say, Eliot, is that there is no new taxes with the plan that Mitt Romney is advancing right now as opposed to under the bill and the law now that President Obama signed you have a massive new tax increase. So there was some fundamental difference.
SPITZER: Rick, with all due deference, I hear that. The public doesn't care whether Washington tells them to buy it or the state capitol tells them to buy it. What Governor Romney said was that he believed in the plan he passed which that everybody has either got to buy insurance or be subject to a penalty because that was individual responsibility. That is exactly what Obamacare, your word for it does.
And, you know, James, am I right? Isn't the White House going to hang this around the neck of Mitt Romney?
CARVILLE: I don't think they have to do anything. I think the other Republicans are. But interestingly enough, we found out that former Speaker Newt Gingrich along with then Senator Hillary Clinton came out for an individual mandate in 2005. So it must be -- you know, maybe we're stealing a Republican idea. Maybe President Obama, the Republicans ought to take credit just like they should take credit for the auto bailout. This thing has worked brilliantly.
SPITZER: You know --
CARVILLE: Credit for what they did on TARP. We saved the financial system.
SPITZER: James, I want to put you on the hot seat for a minute. Right now, I think the president is enjoying what I would call, you know, the bin Laden bump. OK. He's clearly up in the polls. He's enjoying a real good ride here. How long will that last?
Back in '92, somebody you may know said it's the economy stupid.
CARVILLE: Right.
SPITZER: When does the economy come back to drive this thing?
CARVILLE: Well, first of all, I don't know yet but the job growth seems to be picking up. If that continues, the bump will last longer.
I mean, and by the way, you know, look at the GM thing is working better than anybody thought. Looks like the Libya thing might be working a little better than we thought. I mean, certainly the bin Laden thing is a big part of it. He demonstrated a lot of leadership, a lot of courage. But if it goes back to creating 50,000 jobs a month, it's not going to last long.
SPITZER: Rick, your candidate who's got the single best idea to get jobs going?
LAZIO: If you ask me about who do I think has got the plan? You've got to say Mitt Romney given his experience as a CEO of turning the Winter Olympics around, a disastrous situation, somebody who understands the real economy, somebody who has got strong advisers, somebody who understands that we've got to become much more competitive.
Listen, as a nation, I don't care who the president is and which party. Our major struggle is going to be to become competitive with Asia which is a growing competitor in almost every area. And the fact that if we think that we have an entitlement to innovation and growth and into leading a value added economy globally, we're sadly mistaken.
SPITZER: Rick --
LAZIO: We really need a fundamental change in direction.
SPITZER: Let's deal with numbers here. Rick, let's deal with numbers here for a minute. The reality is there have been more jobs created under President Obama and we're seeing more jobs per month now than under President Bush. So, I mean, this is now --
LAZIO: But you lost so many jobs. We're growing at half the rate of what we need to add net new jobs, Eliot. Half the rate. 1.8 percent. We need to increase growth by 3.5 percent in order to add net new jobs.
When Reagan was turning around the economy, the economy was growing by 67 percent.
SPITZER: Rick --
CARVILLE: In the modern words of Brendan Sullivan, am I a potted plant here?
SPITZER: You never looked like a potted plant. James, you jump in here.
CARVILLE: Excuse me, but let me just say a simple thing so you can understand this because sometimes people get confused. Obama has created more jobs in the last -- in two years and something than Bush created to date. So what's there to argue about? Under Clinton, 22 million jobs were created. Under Bush, a million. We're not going to really argue that Republicans know anything about the economy because there's no fact to base that on.
LAZIO: Unemployment rate is nine percent. It was never anywhere near -- it was four and five percent under George Bush. It was half. There's more people. There's more people.
CARVILLE: Can I repeat?
LAZIO: The population is growing.
CARVILLE: Let me explain it to you. You all don't know anything about the economy. What you know is how to run it in the ditch, how to deregulate it and undertax it and run it right in the ditch.
Get out of the way. Let Obama bring us out of it. It's what Democrats do is get the country out of Republicans messes.
SPITZER: Rick, welcome to James Carville. You just met the real James Carville. That's why he wins elections.
All right, guys. Thanks for participating.
CARVILLE: OK.
LAZIO: All right.
CARVILLE: Thank you.
(END VIDEOTAPE)
SPITZER: We'll be right back.
(COMMERCIAL BREAK)
SPITZER: President Obama is experiencing what I've called a bin Laden bump, but Americans are still facing the reality of a weak economy, high unemployment and record budget deficits. We've gotten a level economist IN THE ARENA to help us understand just what that reality is and what if anything we can do about it. Harvard Professor Gregory Mankiw.
Professor, thanks for joining us.
N. GREGORY MANKIW, ECONOMICS PROFESSOR, HARVARD UNIVERSITY: It's nice to be with you.
SPITZER: Now, look, you literally wrote the book on economics. I don't think there's a college kid in America who doesn't use your case book. You're teaching us how to understand the world of economics. I'm going to turn it back at you.
We've got unemployment at nine percent and long-term unemployment that's a crisis. Monetary policy has run its course because the interest rates are so low. Fiscal policy has run its course because Congress can't spend any more money. What do we do? What's the answer? What is your prescription to get this economy going?
MANKIW: Well, unfortunately, there's no simple answer. The sad truth is that economists don't always have a magic bullet that's going to solve all the problems. Any pundit who comes on TV and tells you so is probably pulling the wool over your eyes. So I think we're in for a hard slog ahead. And the good news of the economy is recovering.
We do have positive growth. We are creating jobs but at a much slower pace than a normal recovery, a much slower pace than the Obama administration predicted when they came into office in 2009. And the evidence is at least so far is that we're not going to see something much better going forward. It's going to be growth of 3.5 percent range but nothing dramatic.
But, of course, I could be wrong. Economists are not good at forecasting and I'm no better than the typical economists.
SPITZER: But here's the problem. Are we defining a new normal in our economy where we see very slow job growth? Unemployment that used to be down into four, five percent range, now we're going to have to be comfortable with it in the seven, eight, nine percent range. Is that what the economy looks like because of globalization?
MANKIW: Well, I'm not sure it's because of globalization but I think there is a question as to whether the new normal level of unemployment may be different from the past. If you look at the data on the average duration of unemployment is how many weeks people have been unemployed, of those who are, the average duration now is about twice what it has been other recessions recently. So the data we have goes back after World War II. So we have more than half a century of data. We're in now is at unprecedented levels of long-term unemployment.
And now the question is, what does that mean long-term? To what extent are those long-term unemployed losing job skills, losing attachment to the labor force, becoming basically unemployable? To some extent that's probably the case. That's probably going to leave some permanent scars in the economy and the new normal may not be the five percent we saw a few years ago but might be higher. And we don't really know what the answer to that is because we're in uncharted water here.
SPITZER: Let's come back to the deficit, though. Because I think how we get our arms around this is really one of the fundamental issues confronting our economy. If you could craft the policy that Congress would pass, would you have any revenue enhancements, tax increases for lack of a more polite word? Would you raise revenue?
MANKIW: I would raise revenue along the way that Bowles and Simpson did. I mean, Bowles and Simpson proposed in their commission report was to raise revenue through broadening the tax base by eliminating what they call tax expenditures rather than raising income tax rates. You can raise a fair amount of revenue that way if you're willing to do it but it's not politically easy because the tax expenditures are quite politically popular. Things like the mortgage interest deduction, the deduction of state and local taxes, the exclusion of health insurance as part of taxable compensation. These are the hard things to get rid of. You can make a lot of revenue that way without raising marginal tax rates. They propose reducing marginal tax rates and still raising revenue by broadening the base sufficiently.
SPITZER: Look, you're exactly right. Every time I raise the issue with elected officials, they embrace Bowles-Simpson. They say let's lower marginal rates, get rid of the loopholes which is what they call them. And I said, OK, name the loopholes you want to eliminate. And as soon as I suggest those individual loopholes, they said, oh, no, we can't do that. Would you actually eliminate the specific loopholes you just mentioned? Do you think as a matter of economics that would be good policy?
MANKIW: Absolutely. Let's take the mortgage interest deduction. I benefit from it. I'm a homeowner. I've got a big mortgage that's subsidized by the government. But if you think about it from the standpoint of fairness, typical poor persons are renters so mortgage interest deduction really is a subsidy to middle and higher income taxpayers. From a standpoint of equity, it's not particularly equitable. And from the standpoint of efficiency, it's not particularly smart either because it means that too much of the capital goes in the form of housing and not enough in the form of corporate capital that can create jobs and productivity. So I think the mortgage interest deduction is one of those loopholes that's been there for a long time because it's politically popular. But if you really think about it from the standpoint of equality or from the standpoint of economic efficiency, it really doesn't make a lot of sense.
SPITZER: All right, Professor, thanks so much. And let's hope the students keep reading your book.
MANKIW: Thank you very much.
SPITZER: Thank you for watching. Enjoy your weekend.
"PIERS MORGAN TONIGHT" starts right now.
