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CNN Larry King Live
Natasha Richardson Seriously Injured; Donald Trump: AIG Bonus Outrage
Aired March 17, 2009 - 21:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
LARRY KING, HOST: Tonight, breaking news -- reports that actress Natasha Richardson is seriously injured after a devastating skiing accident. We've got the latest.
Then, Donald Trump on the AIG bonus outrage.
What does he have to say?
Is our $165 million paying for their greed?
Could we, should we get the money back?
Will the executives be shamed into returning it?
And the economy -- is it on the road to rescue?
Plus, it's a girl for Dr. Sanjay Gupta, next on LARRY KING LIVE.
First, the story of the hour. Natasha Richardson injured in a skiing accident today. We'll try to get as much details as we can for you. On the phone with us is Andrew Chung of "The Toronto Star," staff reporter and Quebec bureau chief.
And here in our studios in Los Angeles, Carlos Diaz, correspondent for "Extra," and Brooke Anderson, CNN entertainment correspondent, the co-host of "SHOWBIZ TONIGHT" on HLN.
Now, Andrew, as I understand it you were -- you were there. You were close by.
What did you see?
Where were you?
ANDREW CHUNG, EYEWITNESS AT HOSPITAL: Well, Larry I was in the waiting area of the intensive care unit in one of the hospitals here in Montreal called Sacred Heart when I saw some attendants wheel a bed into a nearby elevator, followed by some other people that were carrying luggage. So I went down to the first floor where, you know, the entourage had already left the building by the nearest exit.
At that point, I wasn't sure who it was because the patient was completely covered, basically, from head to toe in blankets, except for the face. But the face was obscured by a number of tubes. So, you know, I went outside. They took the bed to the back of the ambulance and I went around the back, as well. And it's then that I saw Liam Neeson, who was already there in the ambulance, crouched down in the back. I mean he, he was -- he just looked devastated. He didn't seem to notice anyone or anything. His -- his eyes were just focused solely on his wife.
KING: Did you ask anyone of the attending people what -- what was wrong with her?
What -- if any prognosis gained at that ambulance site?
CHUNG: Yes. No, they -- they were definitely not interested in talking to a reporter at that point. There were two other people who would not identify themselves who stayed out of the ambulance. But I -- you know, I assumed that they were handlers of some sort. And they were already asking for privacy as -- which is understandable.
KING: Did the hospital say anything?
CHUNG: The hospital has not said anything. They just said that that the family asked the -- that she be transferred. And they didn't say where she was transferred. But I, you know, we now know she was flown to New York.
KING: Do you know where she is in New York?
CHUNG: No, I don't know that.
KING: All right. Carlos Diaz, always on top of the scene with "Extra."
Brooke Anderson of CNN Entertainment, again, likely to be right there when things are happening.
What do you know, Brooke?
BROOKE ANDERSON, CNN ENTERTAINMENT CORRESPONDENT: Well, she was injured Monday at a ski resort in Quebec. And the spokesperson, Larry, for that resort said that she had a fall on a beginner's slope. She was taking a private lesson with a very experienced ski instructor and that she did have a fall on her head. It wasn't a hard fall or a violent fall. And they checked her out. The ski instructor called ski patrol.
And there were no signs of visible injuries -- no blood. She was talking. She was coherent and seemed to be doing just fine. But they followed protocol.
About an hour later, she was not feeling well. That's when an ambulance was called and she was transported to the hospital.
Now, a spokesperson for the hospital in Montreal did tell us, as we just heard, that she was transported to an undisclosed location in -- in the United States.
KING: Carlos, what do you know? CARLOS DIAZ, CORRESPONDENT, "EXTRA": Well, there are several reports now. The A.P. Is reporting that she is, in fact, in New York City. And this is a situation where, you know, it's got to be very sad for the family because she was fine, she was talking. She was even joking after she hit her head. They -- the ski patrol tried to say hey, maybe you should go to the hospital. She denied. She said she didn't need that, went back to her room and she was fine.
And then like Brooke just said a few hours later she's -- you know, she's at the hospital. Liam Neeson was in Toronto, her husband...
KING: Doing a movie there, right?
DIAZ: He was in Toronto doing a movie called "Chloe." And he went up to see her immediately in Toronto -- in Montreal, near Montreal. And they flew back together to -- to New York.
And you have to wonder -- Brooke and I were talking about this before we came on. We have there has not been a definite report of her condition.
DIAZ: But we have heard more negative reports than we have heard positive reports.
KING: But that's all still supposition, right?
DIAZ: There's reports right now in "The New York Daily News" and "The New York Post" saying that she's brain dead. There are other reports that it's just brain swelling and this and that.
KING: Where do these things come from, these kind of reports?
ANDERSON: Sources close to the family is usually what's cited.
DIAZ: Right. Yes, that's...
ANDERSON: And there's even a report that family and friends have gathered for a vigil. But as we said, at this point...
KING: Again, at this point...
ANDERSON: ...that is unconfirmed.
KING: ...this is all we know.
DIAZ: Well, there -- yes...
KING: She's in a hospital in New York. She had a skiing accident. That we know. DIAZ: Yes.
DIAZ: There are no confirmed reports of this is exactly where she's at, this is exactly how she's doing. But like we said, there are more reports -- reports of her doing poorly than her doing positively.
KING: Andrew, she has two young sons, Michael and Daniel.
Were they out and about?
Were they there, Andrew?
CHUNG: Well, I didn't see them personally, Larry. But, you know, there were a lot of other reporters, as you can imagine, in front of the hospital. And when I came back from -- from seeing what I saw, they were -- there were some reporters who thought that they saw the two sons leave the hospital. They didn't say anything. But, you know Larry I cannot confirm that whatsoever.
KING: Would the guess be...
CHUNG: And I...
KING: Would the guess be, Carlos, that she moved to New York because of better hospital situations?
DIAZ: Well, see, but that's the thing, Larry. You have to ask yourself, I mean if she...
KING: Why move?
DIAZ: If she is in any kind of condition where they're still working on her, why would they move her, you know?
I mean I'm no doctor and I know you have doctors coming on later. But they're -- they've talked about "Talk and Die Syndrome," where -- this has been talked about and reported about in a number of different places -- where you're fine and then all of a sudden, you know, a blow to the head...
KING: I'm going to ask...
DIAZ: ...can cause that. Yes.
KING: ...two distinguished brain surgeons how that happens.
ANDERSON: But they also reside in New York, she and her...
ANDERSON: ...their family.
ANDERSON: That's where they reside.
DIAZ: And that's the thing, too. I mean if she is, you know, in a condition where she can be worked on in Montreal, wouldn't you think she would stay in Montreal?
It seems that, you know, with the whole vigil thing that she is in New York under not very good circumstances.
KING: If you don't know immediately, Natasha Richardson -- obviously, you see her picture. She's part of one of the most illustrious acting families. Her mother is Vanessa Redgrave, her aunt is Lynn Redgrave, her sister is Jolie Richardson.
Does anyone know where they are, the Redgraves?
ANDERSON: Not at this time.
DIAZ: Yes, I mean that's the thing, too.
DIAZ: I mean the reports that are coming are coming from family members who are saying that family members are flying in from all over.
ANDERSON: Are gathered in...
DIAZ: They're gathering in New York, you know, to be by her side.
KING: Well, if that's true, that's serious.
DIAZ: Yes. I mean...
DIAZ: ...and that's the thing, too...
ANDERSON: One would think.
DIAZ: And there are no reports that she's in a hospital in New York City.
KING: I'm positive we'll be following up on this tomorrow night. And I thank you. We'll probably see you tomorrow.
KING: Andrew, thank you.
Andrew Chung in Toronto and Carlos Diaz and Brooke Anderson here in Los Angeles.
Two of the most foremost authorities on head injuries join us next. (COMMERCIAL BREAK)
(BEGIN VIDEO CLIP)
NATASHA RICHARDSON: And I suppose you just expect me to go weak at the knees and fall into your arms and cry hysterically and say we'll just figure this whole thing out, a bi-continental relationship, with our daughters being raised here and there and you and I just picking up where we left off and -- and growing old together.
(END VIDEO CLIP)
KING: We're joined now by two of the most distinguished neurosurgeons in America, Dr. Keith Black, chairman of the department of neurosurgery and director of the Maxine Dunitz Neurosurgical Institute at Cedars-Sinai Medical Center and Dr. Neil Martin, professor and chief of neurosurgery at UCLA Medical Center.
Again, neither of these doctors has, of course, seen the patient. All this is sketchy.
She falls on the ski slopes, doctor. She's not wearing a helmet. No external signs of injury.
What do you make of it, that she's up talking and then suddenly, apparently, in this situation?
DR. KEITH BLACK, CHAIRMAN, DEPARTMENT OF NEUROSURGERY, CEDARS- SINAI: Well, one of the things, Larry, we know is that patients that have head injuries can get delayed injuries, which is one of the reasons we like to observe those patients for a period of time, usually 24 hours, even after mild injury.
The things that we worry about that can happen on a delayed fashion, particularly in a situation like this, we know there can be injuries to the arteries in the neck, what we call an arterial dissection, where the arteries can tear on the inside, even with very mild injury and cause a stroke.
We know that there can be delayed bleeding in the brain. A vessel can tear. So those are things that we worry about.
We also worry about -- given the catastrophic event that's been described here as -- from the media, is whether there were any predisposing conditions, such as bleeding disorders or abnormal blood vessels that could have made a situation like this even worse.
KING: Dr. Martin, she was not wearing a helmet.
DR. NEIL MARTIN, CHIEF OF NEUROSURGERY, UCLA MEDICAL CENTER: Well, you know...
KING: What does that say to you?
MARTIN: Well, first of all, Larry, she was a beginner and so I don't think she was expecting to be involved in any aggressive skiing. But even a -- even a relatively minor fall can cause a brain injury.
When I go skiing, I wear a helmet. My kids wear a helmet. And more and more I see people wearing a helmet. You know of the 50 or so people who die every year skiing, most of them die from head injuries.
KING: They do.
What did you bring with you?
MARTIN: Well, this is a model of the brain, Larry, that shows its position inside the head and the blood vessels on the surface of the brain. And so any of these structures can be damaged in -- in trauma.
But the real problem -- the real problem is the skull is hard, the brain is soft and when you fall, your brain bangs back and forth on the inner surface of the skull. And that can cause serious damage to the brain. That can cause bleeding on the surface or deeper in the brain.
KING: From what you know, Dr. Black, sketchy as it is, what, at this point, would be your biggest concern?
BLACK: Well, I think that what the physicians that are caring for her now are trying to do is to rule out, you know, whether there has been an injury or a tear to some of the arteries in the neck, which can occur even with very mild injury. They want to evaluate whether there's been bleeding into the brain which is causing a problem.
If it's in an area that's critical, like the brain stem, that's more devastating than in a less eloquent area. We obviously -- they would obviously want to treat the things that are treatable. If there's swelling, they want to control the swelling. If there's a blood clot that can be removed with surgery, you want to take care of that. If there's been a stroke you want to, obviously, you know, try to treat that and prevent any further injury.
KING: Dr. Martin, what do we mean by brain dead when you get sketchy reports like this?
But that was one of them.
MARTIN: That's the complete and irreversible lack of any brain function. And brain dead is dead. Because when the brain is gone -- we can keep the heart beating indefinitely with heroic measures -- ventilators, mechanical assist devices. So the real -- the real hallmark, the real, real marker of -- of survival is functioning of the brain.
KING: So we can say, can't we, that this doesn't look good?
BLACK: Well, I think that...
KING: As sketchy as it is.
BLACK: ...if the reports are correct, if the physicians are actually presenting a diagnosis of brain death, then that is an irreversible condition.
KING: We'll probably have you both back soon.
Thanks for coming by.
MARTIN: You're welcome.
KING: Dr. Keith Black of Cedars and Dr. Neil Martin of UCLA.
We'll talk money next, that issue that's making everyone, it seems, really angry -- bonuses.
KING: Our friend, Stephen Colbert, thinks he knows how to deal with the AIG situation.
Take a look at his rational approach.
(BEGIN VIDEO CLIP FROM "THE COLBERT REPORT," COURTESY COMEDY CENTRAL)
STEPHEN COLBERT, HOST: Nation, I am enraged. AIG announced this week that they are giving executives $165 million in bonuses.
That's our bailout money. It is supposed to be used responsibly in ways we never see to prop up businesses we don't understand.
COLBERT: Well, the government can't stop them, but we can, folks. Nation, our founding fathers knew that when the rights of the people get trampled, we must become a torch and pitchfork wielding mob empty of all thoughts, an injured, vengeful animal lashing out blindly at shapes and colors.
COLBERT: Let's go get AIG!
(END VIDEO CLIP)
KING: It's important that we add calmness to this setting.
Want to know what Donald Trump thinks about the AIG bonuses?
So do we. We'll ask him next.
KING: Joining us now on the phone, Donald Trump, chairman and president of The Trump Organization, the star and executive producer of NBC's "Celebrity Apprentice."
Donald, as always, thank you for joining us.
We have public anger over the AIG bonuses.
Is it justified?
DONALD TRUMP: Well, it's unbelievable anger, Larry. I heard people saying things that you wouldn't even believe. A very major senator saying that the people that did this should commit suicide. That's a pretty strong statement, I would say.
It is a -- it is very bad politics in terms of what AIG did. They took $165 billion in money from the government and now they're going around giving out bonuses and giving people bonuses that really, in many cases, did not do a very good job and, in many cases, took the bonus and left right after the bonus. And the bonuses were supposed to hold these people together and hold them into the company -- hold them in the company.
So I think it's a very, very foolish thing that they did. And certainly should have used a different name if they had to do something.
KING: We -- the collective we -- we the people, own 80 percent of AIG.
Should we allow it to fail?
TRUMP: Well, Larry, now that you're in for $160 billion, it's a lot harder to walk away. I think AIG has the politicians right where they want them. Whether or not you could have let it fail originally and let some insurance policies -- frankly, I think letting Lehman fail was far worse than letting AIG fail.
But it's at a point now, a hundred -- think of this, Larry. The car companies want $35 billion. These people got $165 billion already and they're going to get a lot more.
I don't know. It sounds, to me, just absolutely insane.
KING: Can we get the bonuses back?
TRUMP: Well, it's pretty tough because supposedly they have iron clad contracts and some of the people got their bonuses and already left. Larry, they took millions of dollars. The following day they left. And the reason for the bonus was to keep them in the company, supposedly. So they took the bonus and they left. I don't think those people are going to be giving the bonuses back, Larry.
KING: Do you give bonuses to your people?
TRUMP: Yes, I do.
KING: Based on?
TRUMP: Competence. Based on doing an unbelievable job -- doing, you know, so -- and not all people. I mean I give bonuses sometimes -- some years I'll give a bonus to somebody and some years I won't to the same person. It depends on how they do. And I watch it very closely.
KING: A new CNN/Opinion Research poll -- 45 percent of the public believes another depression is likely within the next year.
TRUMP: Well, you know, I was one of the first ones that said depression and used the word depression a couple years ago, because I have a lot of experience with banks and I see how incompetent some of the banks were. And I was very, very strong on -- you know, on your show and other shows, to be honest with you.
Now what's happened is the government really has stuffed the banks with money. They've stuffed them. The banks aren't loaning the money. The banks should be ashamed of themselves. The banks have taken all of this money -- billions and billions. They don't loan 10 cents.
But the fact is because of that and some other moves, I don't believe you'll have a depression, but it could get a little bit worse before it gets better.
KING: What's your read on how the president is doing?
TRUMP: I think he's really trying. He inherited a mess. Mr. Bush gave him a total mess. But he's really trying hard. And I think he's doing as well as can be expected thus far. And I think, ultimately, he will be successful.
KING: Is there anything he isn't doing he should do?
TRUMP: Well, the word stimulus is probably not used in its fullest, Larry, when he's -- you know, certain of the things that were given weren't really stimulus. They were pork, as we call it, or they were gifts to certain people.
But overall, I think he's doing very well. You do need stimulus and you do have to keep the banks alive.
KING: All right. We have an e-mail question for you, Donald from Charles in Palm Springs, California: "Mr. Trump, if you were in charge of distributing federal bailout money, how would you prioritize it? Who would you allocate it to?"
TRUMP: Well, you know, I've always liked the fact that when you give money to the taxpayers -- to everybody, like whether it's $1,000 a head, $5,000 a head -- those people will, to at least an extent, go out and spend the money. In a way, that's more direct stimulus than the kind of things we're doing, which are very complicated, very, very political and really very dangerous and very costly.
So I've always liked the idea of either a tax decrease or just handing out checks to virtually everybody based on what they've been paying over the years.
KING: How are you doing personally, my friend?
You've been sued by people who bought units in the Trump Ocean Resort Baja and were then told the project has been scrapped and no money to refund them...
TRUMP: Well, Larry, that was an interesting case because...
KING: What's the story?
TRUMP: ...as you probably know, I had nothing to do with it other than licensing. I licensed the name Trump. They want out and they sold the project out. And then I guess they were unable to get financing because the market collapsed. And we're actually looking into it.
I wasn't the developer of the job. I licensed the name out. They paid me substantial fees. And then after they paid me, I mean, frankly, we terminated that license because they were in default.
So we're looking into it very carefully. But I wasn't the developer of that job, as you probably have heard.
KING: What about your interests in casinos in Atlantic City?
TRUMP: Well, the casinos I left. And I left the casinos. I made an offer to buy the casinos. They turned the offer down. I don't love having my name on something that I'm not running, but I didn't manage it. It has virtually nothing to do with my net worth in terms of ownership or anything. But I made an offer to buy the casinos -- those casinos. They turned it down. And then they chaptered the company.
KING: What's hit you the most in this unbelievable turn of events?
TRUMP: Well, I knock on wood as I tell you I've been quite lucky. I finished a lot of major projects like the big building opposite the United Nations -- 90 stories, the tallest residential building in the world, a tremendous success, Trump World Tower.
I just finished one on Park Avenue and 59th Street which was totally sold out and completed and beautiful and very, very successful and others.
So, for the most part -- I sold a house in Palm Beach for the highest price ever paid in the United States for a house. I bought a house...
KING: So nothing has happened to you?
TRUMP: Excuse me?
KING: Nothing bad has happened?
TRUMP: Well, no, it's -- I guess you could say the market would be better if -- you know, if people had more money. They'd be paying me more money as I build things.
But it's a great opportunity. I just bought 800 acres in Washington, D.C. along the Potomac River. I bought a tremendous job in Coltsneck, New Jersey. I'm doing some other purchases that, frankly, two years ago or three years ago I would have never been able to get it for the kind of price that I would have been willing to pay.
KING: Well, we'll get a break and we'll talk about Bernie Madoff and other things.
By the way, audience, have you ever filed for bankruptcy?
That's tonight's Quick Vote question.
Go to CNN.com/larryking right now and tell us. While you're there, send us a blog and we'll read it some time later in the show.
More with The Donald, next.
KING: We're back with Donald Trump.
And now we discuss Bernie Madoff.
In the interests of full disclosure, rather (ph) like many other people, I lost money investing with Mr. Madoff. And fortunately, the loss was not substantial enough to kick me out of my home, but I did lose money, as many other people did.
Prosecutors now, Donald, are trying to say some $100 million in assets, most of it listed in Ruth Madoff's name -- are fruit of her husband's crime and should be forfeited.
What do you think?
TRUMP: Well, first of all, I'm very disappointed in you, Larry, that you lost money with Bernie Madoff. I would have thought you would have known a con artist. I mean you've certainly interviewed a number of people over your life.
KING: Well, a good friend recommended him. It was nine years ago. And he never...
TRUMP: Is he still a good friend?
Is he still a good friend of yours?
KING: Yes, a great friend.
KING: And he never had a down month.
TRUMP: Well, he never had a down month, but in retrospect, he never had an up month. But you just didn't know that.
The man is a total disaster. You know, I was in Palm Beach many times when I got to meet Mr. Madoff. And everybody thought he was like the cat's meow. It was very interesting. So many people invested with this guy.
I'd say who do you invest your money with?
They'd say Madoff and they'd stick their chest out like they went to the Wharton School, right?
They'd just stick their chest -- I'm with Madoff.
KING: Oh, you didn't -- you didn't like him?
TRUMP: I didn't know him. I would see him. He would say hello. He would be at Mar-a-lago a lot, because I have most of the events in Palm Beach a lot. So he'd be at Mar-a-lago a lot. He'd be at my gold club, Trump International, a lot, because he liked to play golf.
There was an interesting story, as a golfer he only shot between 80 and 89. They went to one of great golf zones and they said, is this possible? And they said, unless he is the most consist golfer in history. In other words, he never had in the 70s. He never had in the 90s. That was the same way he ran his crazy returns to people.
That is a bad guy, a sick guy. His family absolutely knew what was going on, in my opinion. There is no question in my opinion that his wife knew. She was the book keeper. She was his confidant. She had 100 million dollars in the bank.
KING: How did he get away with it, Donald?
TRUMP: Well, the economy kept him going. Because people were stupid enough or foolish enough to just keep pouring money into his accounts. So, as other people wanted their money, he would take the new money coming in. It was the ultimate Ponzi. They'll probably change the name of Ponzi to Madoff. It was really the ultimate scheme.
But, you know, I hear so much about he was the only one -- he had 16,000 clients, Larry. He is the only one that knows. I would imagine not only his sons and not only his wife, but many of the people in the firm had to know.
KING: Latest report, housing up in the last month, in February. And it was up in units that were apartment buildings. What do you make of that?
TRUMP: I think it is the beginning of a positive trend. Real estate has been absolutely beaten down. And this is a great -- as I told you before, I am buying a lot of real estate now. This is a great opportunity to buy real estate. It is a great opportunity for somebody, even with not a lot of money, to go to a bank and buy a beautiful house, better than they ever thought they would buy.
The bank will take back financing. They won't give you financing. But if they have a house, they will take back financing.
You understand the difference. If you go to the bank and say I want financing, I have the greatest credit rating, they won't give you 10 cents. But they will take back a lot of paper. And that is -- this is now the greatest time maybe ever, maybe in history, to buy a house.
KING: Really? The greatest time ever to buy a house?
TRUMP: I think so.
KING: Will the bank help you buy the house?
TRUMP: You must buy the house from a bank, and they must take back virtually 90 to 100 percent paper. If they've don't, you have no interest in buying a house. You go to the bank; you look at one of their thousands and thousands of houses. You buy that house, but they have to take back financing.
KING: Are you bullish?
TRUMP: Well, I think it is going to get worse. I think it is then going to get better. I think, ultimately, we are the greatest country. I think we have a president who is working very hard and trying very hard. He inherited a mess. And I really believe that it is going to get very good, and I think within two years it will be like the old days, but with some restrictions.
KING: In "Celebrity Apprentice," the men's team has lost three times in a row. What is going on?
TRUMP: Well, they're getting killed by the women. Joan Rivers, Annie Duke and so many others. They have really played tough. They have really played smart. The show has been amazing. The men are getting beaten.
KING: Finally, Donald, what do you make of the smack down between John Stewart and Jim Cramer?
TRUMP: Well, I really like both of them. I respect both of them. And I was amazed that Jim Cramer, who I know quite well, wasn't more aggressive in defense of himself and also in defense of CNBC. I was really amazed. I watch Jim. If I know that I am going into a lion's den, which necessarily you don't want to do, but if you know, you don't start off by saying, I really love your show. Because, you have to go in to fight.
I know Jim is a fighter. He is a smart guy. Top of his class at Harvard, all of that stuff. I was just amazed that he allowed Jon to really beat him up. I don't know why. It's not him. I don't understand it.
I like both of them. I think they're both terrific. I just don't know what happened that night.
KING: Donald, always great talking with you.
TRUMP: Thank you, Larry, take care.
KING: See you soon. Donald Trump. Ben Stein and Arianna Huffington will mix up on the money front when we return.
KING: Joined now by two of my favorite people, Arianna Huffington, the co-founder, editor in chief of HuffingtonPost.com. By the way, she has a masters degree in economic from Cambridge University. And Ben Stein, the "New York Times" columnist. He's economist as well, of course, and a former White House speech writer. Are you ticked over AIG? Are you mad?
ARIANNA HUFFINGTON, HUFFINGTONPOST.COM: Well, I am mad. You are mad. Ben is mad, he told me earlier. Everybody is mad. But what is more important is what is the administration doing? It is not enough for them to be mad. They actually have to act and have the capacity to act.
KING: Take away a contract that delivered the money?
HUFFINGTON: That line by Larry Summers shows that really he is not in touch with what is happening.
KING: Do you think the administration is doing poorly?
HUFFINGTON: The administration is doing poorly. The administration right now is appearing impotent.
KING: You are a big supporter of them?
HUFFINGTON: I am. But right now they are actually missing the point of the need to act and take the money back for the taxpayers.
BEN STEIN, "NEW YORK TIMES": This is a situation where AIG is extorting money from the taxpayers, saying give it to us or we'll blow ourselves up. They're like a kid who says, I'll hold my breath if you don't give me something or other.
The government can break the contracts. But there used to be a law allowing people to own machine guns in this country. The government abrogated that. There used to be laws allowing people to own slaves. The government abrogated that. They can abrogate the contracts. Or as the Democrats in the House suggested, they can put an excise tax on those bonuses. They can put a 99 percent excise tax on.
What the AIG employees are doing is incredible. There's a piece in today's Times saying some of those employees said, if you don't give us the bonuses, we'll take the inside knowledge of the books of AIG, speculate against AIG, and drive it down even further. That is criminal. People are in Walter Reed with life threatening wounds for saving this country. And these people are extorting this country.
KING: If they're not doing well, what do you make of it, Arianna? You had such hopes for this administration.
HUFFINGTON: I do. They are doing well in many other areas. But when it comes to the way they're dealing with banks and Wall Street, they are not doing well. They have not done well from the beginning. I think one of the reasons is that the people in charge, Larry Summers and Tim Geithner, were really there from the beginning of the unraveling.
Just think of it, Larry Summers was there in 1999 when the deregulation began, when they ended Glass-Steagall, which was basically what FDR put in place to avoid exactly what happened, to avoid the kind of institutions that became too big to fail.
And Tim Geithner, head of the New York Fed, supervising Citibank and completely missed what was happening.
KING: Geithner, Ben, when he was proposed was the darling boy of everybody, Republicans included.
STEIN: Not my darling boy. Look, there are three people responsible for the disaster of letting Lehman Brothers fail, which pushed the economy off the cliff. One of them was Geithner. He is still there. Bernanke was the other one. He is still there. The only one who is gone is Paulson.
Mr. Geithner, I'm sure, is a fine man, and a charming diplomat. He doesn't know what he is doing there. He is a creature of Wall Street, just like so many others before him.
HUFFINGTON: You see, Larry, the problem is not just the toxic assets. The problem is the toxic thinking. You cannot change what is happening if the people in charge are really products of the system. Their view is entirely Wall Street-centric. Right now, the interest of the banks, the interests of these institutions are not aligned with the interests of the public, because the problem is not liquidity, the problem is solvency. These institutions are not solvent.
The essence of capitalism, that if you have made all of these series of wrong decisions -- AIG had actually paid a fine in 2006 of 1.6 billion because of all the fraud that they had committed, especially in terms of their accounting practices.
KING: How, Ben -- neophyte here -- how did this happen?
STEIN: AIG made an incredible number of very bad bets on what are called credit default swaps, essentially made itself into a casino, and said to people, we will take your bets on whether or not the subprime mortgage bonds pay off. We think they're going to pay off. If you don't agree, we'll take your bet. We will make these bets to the tune of several hundred billion dollars. They lost the bet. Essentially, tax payers are paying off the casino's losing bets. It is outrageous. I don't think they should be paying these bonuses. That's 100 some million. I don't think they should be paying off on the credit default swaps. That's over 160 billion. Why don't they stop that payoff too? The world won't stop.
But the idea that a taxpayer from Duluth is working hard to pay taxes to pay off a hedge fund arbitrager in Zurich, that is insane. That's crazy.
KING: We'll be back with more. We'll have other guests join us. Arianna and Ben will remain. Your blogs in 60 seconds. Stay with us.
KING: I'm guessing there is plenty of anger on the blogs tonight. Let's check in with David Theall and see what you are saying about AIG. David?
DAVID THEALL, CNN BLOG CORRESPONDENT: Larry, this probably does come as a surprise to you, but there is a lot of anger happening on the blog tonight, directed at AIG and these bonuses being paid out. We are seeing words like financial terrorism. Somebody suggested a class action lawsuit, American taxpayers versus AIG.
Here's somebody else; we thought this was an idea worth sharing. They said, "maybe pay them in U.S. savings bonds or some other annuity and let them wait for the maturity date."
We are also just now getting in the comments between -- with the debate between Ben Stein and Arianna. Any time we put those two together on set, we definitely hear about it on the blog. Those comments are just starting to come in.
We also have two comments, Larry, we're going to share with you tonight. Some that -- two of them that we thought were worth sharing. One from Debbie. She asks this: "Is AIG hiring?" She says "I can sell worthless contracts with a bit of in-house training. I learn fast. Now, may I have my million dollar bonus, please."
We also heard from Chris, Larry, who says this -- he is alone, almost alone in sort of not expressing just outright outrage at AIG. Chris says, "I may be alone in my thinking, but I am no more outraged over AIG using taxpayer dollars for bonuses than I am about members of Congress who are just as guilty for this mess using money for their high flying lifestyles and perks."
We're going to continue the conversation as we always do, CNN.com/larryking. Look for the blog link, click it. Jump into the conversation. We look forward to hearing from you. Larry, back to you.
KING: Ben and Arianna, big on the blog tonight. More on money and issues of the day with Arianna, Ben and others after the break.
(COMMERCIAL BREAK) (NEWS BREAK)
KING: Arianna Huffington, Ben Stein remain. We are joined in Washington by Congresswoman Michele Bachmann, a Republican of Minnesota, member of the Financial Services Committee, and Congresswoman Jackie Speier, Democrat of California, member of that same committee. A subcommittee of the House Financial Services Committee is holding a hearing on the AIG situation tomorrow. Chairman and CEO Edward Liddy is scheduled to testify. He's obviously going to have a troublesome day. What would you ask him, Congresswoman Bachmann?
REP. MICHELE BACHMANN (R), MICHIGAN: I want to know what our exit strategy will be for getting the American taxpayer off the hook for having to infuse more money into AIG. We have already invested 173 billion into a very black hole. It doesn't look like we are going to be able to get the taxpayer out time soon.
I'm hoping we can. We need to unload AIG. They need to stand on their own, because we don't think it looks very pretty what's coming out of AIG.
KING: Congresswoman Speier, what would you want to know?
REP. JACKIE SPEIER (D), CALIFORNIA: I want to know what legal expert he talked to in his quest to make sure these bonuses were paid off. Everyone I talked to today suggests there are a lot of ways that these contracts could have been renegotiated, that they should have been rescinded. And truly, if they are in any way a part of a fraud, then they should be totally wiped out completely.
KING: Ben, is the bailout more angry to you than the bonuses?
STEIN: The bailout is far worse. The bailout is 1,000 times worse. The bailout involves paying, as I said before, gambling debts. Imagine a Mississippi River Boat gambler making a bet for tens, hundreds of billions of dollars and when the river boat casino loses the money, the casino says we don't have the money, but we're going to make the taxpayer pay for it. That's exactly what's happening now.
KING: Do you agree, Arianna?
HUFFINGTON: What's happening right now is you have an amazing bipartisan agreement that what we're doing with banks and Wall Street institutions is not working, that basically, we, for example, with AIG -- we, the taxpayer, own 80 percent of AIG. But we are not in control of what is happening. That is not capitalism. You know, that is really having --
KING: What is it?
HUFFINGTON: That is absolute stupidity. And it really -- the reason for that is that, as I said before, that the Marie Antoinettes of the meltdown -- that's what I'm calling these Wall Street guys. Like Marie Antoinette, who said, let them eat cake. They're not getting it. KING: Do you agree?
HUFFINGTON: If they were getting it, they would have returned the money in the last 48 hours.
KING: Congresswoman, do you agree?
BACHMANN: Well, I think we need to take a look at who is responsible. And I think Congress takes a lot of responsibility here. The United States government set up the scenario for this failure. Never forget there were regulators looking over the shoulders of AIG. This happened under government's watch. We need to reform this system and get the American taxpayer out of bailing out private businesses and private banks.
We can't be the insurer of last resort. We certainly can't be the banker of first resort.
HUFFINGTON: I'd be delighted to hear to have Congresswoman Bachmann come out in favor of regulation. That's certainly a headline.
KING: Do you agree, Congresswoman Speier?
SPEIER: I do. And this is a bipartisan moment that we should remember. The truth of the matter is that the Fed has had extraordinary authority to go in and act independently of anything Congress does. And that's what happened initially with AIG. The Fed went in, along with Secretary Paulson, and bailed them out, took 80 percent interest in the firm.
So what we need to do moving forward is to make sure that no company, no entity is too big not to fail.
KING: There's good news for Dr. Sanjay Gupta tonight, by the way. He'll tell us all about it and her later in the next segment when we come back.
KING: The appropriate question for all of you is where do we go from here? Ben?
STEIN: I think we should have a very serious excise tax on those bonuses. And I think probably even more important, we should rescind them and rescind the credit default swap wagers, unless they're actually real hedges. Let's not have wagering which the government has to pay off if we lose the wager.
KING: Rescind, break the contract.
STEIN: Absolutely, governments do that all the time.
HUFFINGTON: The president, tomorrow, not the day after tomorrow, needs to make it very clear that if AIG does not do that, does not return this bonus money, it's not going to get the 30 billion dollars which is the last installment in the bailout.
KING: But if they've got the bonuses and gone already, how can AIG tell them what to do?
HUFFINGTON: They can rescind those contracts. They can demand that the money is returned. Otherwise Congress is right. But I think it's important for the president to act, because that is really his defining moment.
KING: Congresswoman Bachmann, what's next?
BACHMANN: Government needs toe get out of AIG altogether. We've already spent 173 billion of American taxpayer money, a large tranche of that money went over out to bailout foreign investors. That's not what American taxpayers should be doing. We need an exit strategy out of AIG. We need to get out of the business of the federal government running private businesses.
KING: Congresswoman Speier, what do you think?
SPEIER: We have to get out of running private businesses, but I want to make sure the taxpayers of America are made whole again. And I think there is much we can do in terms of rescinding those contracts, or there's a number of bills being introduced to tax those bonuses at 91 to 100 percent.
KING: I want to thank both Congresswomen. Just a couple quick questions for Ben and Arianna. Thank you, Congresswoman Bachmann, and thank you, Congresswoman Speier. It's always great seeing both of you.
KING: Are you optimistic, Arianna?
HUFFINGTON: Well, I'm not optimistic with what we're doing with the banks. Right now, it is absolutely key to bring real transparency and accountability. We're not doing that. It took Andrew Cuomo demanding that AIG release the names. The names have not been released, at least the numbers of who has received.
I'm not optimistic about the banks. Here's basically my prediction: sooner or later the president will have to get rid of Geithner and Summers. The sooner he does it, the better off he'll be.
STEIN: And naked short selling, and mark to market, if banks are going to hold the assets to maturity, and bring back the uptick rule, stop the speculators and the leeches from running this country.
KING: Thank you, both. Always stimulating. Arianna Huffington and Ben Stein.
Well, good news, CNN's own Dr. Sanjay Gupta and his wife Rebecca welcomed a baby into their family last night. Sole (ph), happy and healthy. She joins big sister Sage and Sky. And we've got Sanjay on the phone right now. Sanjay, congratulations.
DR. SANJAY GUPTA, CNN CHIEF MEDICAL CORRESPONDENT: Thanks, sir. We're so delighted. There's a picture of her there. Three girls now, Larry. Not sure if I'm being punished or rewarded, for sure, but we could not be happy, that's for sure.
KING: Everything healthy?
GUPTA: Yes, it went very well. Our third child, we're now going to have three children that are three and under. My wife, she did really well. It was a relatively short labor. She -- the baby came out looking beautiful. Everything's fine. You see the two sisters, older sisters are -- they can't wait to get her home.
We're still in the hospital. Just one day after the birth. We'll be here until tomorrow. But everything's going super.
KING: Were you present at the birth?
GUPTA: I was, Larry. And I actually delivered my second daughter. I delivered Sky.
GUPTA: Sole I did not deliver her, but I've made it to all births. And another thing, I've made it to almost every ultrasound that my wife has had, as well.
GUPTA: Which is something in this business. We travel all the time. But it's been a priority for me and I'm delighted.
KING: What's the difference between cutting the cord and doing brain surgery?
GUPTA: The cutting the cord part was a lot more personal. And you'll appreciate this as a journalist, Larry. I was able with my left hand flip cam the cutting of the cord and with my right hand cut the cord with a pair of scissors. That's a video I don't think you'll want to see, but we're keeping that.
KING: Congratulations, Sanjay. We'll see you soon.
GUPTA: I'll tell my daughters you shouted them out. They'll love that one day, Larry.
KING: Hey, thanks. Sanjay Gupta, another baby at home. We've got a couple of great web exclusives at CNN.com/LarryKing. The London Bridge School Fund Raising Franchise, trying to set a world record, raising money for a great cause, our schools. And Dr. Drew talks about the mirror effect, how celebrity dysfunction threatens to affect everybody. Check it out at CNN.com/LarryKing.
Right now, "Anderson Cooper," on the road in New Orleans, with "AC 360." Anderson?