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American Morning
Mayor of Oakland Apologizes for Violent Clash Between Police and Protestors; Ruth Madoff Claims She Attempted Suicide; NYPD Union Threatens to Sue Protesters; Boy Pulled From Rubble Alive; "Occupy Nashville" Deadline to Leave; Oakland Mayor Sorry for Tear Gassing; Exotic Pets Remain Quarantined; Never Say Die Cardinals; Too Soon to Celebrate?; "Zombie Rob"; Haunted Attraction Industry Earns Big Bucks; Complications from New Forms of Birth Control; Aspirin May Reduce Risk of Colon Cancer; Science Explains Difficulty of Losing Weight
Aired October 28, 2011 - 06:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
(BEGIN VIDEO CLIP)
ALI VELSHI, CNN ANCHOR: Occupy Oakland protesters are back after police cleared them out with tear gas on Tuesday night. The mayor of Oakland apologizing this morning after the violence landed a marine in the hospital.
CAROL COSTELLO, CNN ANCHOR: Not buying it this time. Bernie Madoff's victims telling the con artist and his wife they can keep their sob stories to themselves.
VELSHI: And a winter wonderland minus the actual winter from record-breaking snowfall in Texas to the white Halloween that could be ahead in the northeast.
COSTELLO: And it's not heaven. It's St. Louis. It was a field of dreams for the Cardinals last night sending the World Series to a winner take all game seven on this AMERICAN MORNING.
(END VIDEO CLIP)
VELSHI: Good morning. It is Friday, October the 28th. Welcome to AMERICAN MORNING. Christine is off today.
COSTELLO: Yes. Happy Friday to you.
Up first this morning, the damage control after the crowd control. Oakland's mayor now apologizing after police tear gassed Wall Street protesters and put an Iraq war veteran in the hospital. She also says city officials have started an investigation into the use of force. Dan Simon live in Oakland this morning. It's kind of surprising that the mayor apologized.
DAN SIMON, CNN CORRESPONDENT: Well, it's a total flip-flop. Let me tell you where we are first of all, Carol. We're here at the hospital where 24-year-old Scott Olsen, the Iraq war veteran is recovering. You know, what happened to him has really been a rallying point, provided a rallying point for protesters here in Oakland and across the country. In the face of the negative PR that Oakland received, the mayor completely reversed herself and is now saying those protesters can know go back to that plaza in front of city hall. She issued a statement last night, gave a little news conference. I want you to listen to some of what she had to say.
(BEGIN VIDEO CLIP)
MAYOR JEAN QUAN, OAKLAND, CALIFORNIA: I am very deeply saddened about what happened last Tuesday. It clearly didn't turn out the way we wanted it to. People were hurt. And I am the mayor, so I take responsibility and I apologize to those who were hurt.
(END VIDEO CLIP)
SIMON: So one thing the mayor is saying is that she doesn't want those protesters to camp out overnight, but those calls are apparently being ignored. Once again we're seeing a tent city being set up in front of city hall.
But, Carol, this really raises the question, why did the city of Oakland take this action in the first place only to reverse itself a few days later, now letting the protesters back in. Back to you.
COSTELLO: The other question, is she saying that the police were in the wrong here?
SIMON: She's not saying that. What she is saying is that she's going to investigate the tactics. It's not really clear who authorized that use of force, what kind of arrangements or planning was done in advance. Clearly the perception is that the police was overhanded in its efforts to get rid of those protesters and take them out.
I should also tell you that there's been a ripple effect across the San Francisco Bay Area. San Francisco was also set to remove its protesters where they had been peddling over the past couple of weeks, and police officers were set to remove the protesters there. And then they called things off as well. So apparently this negative attention that Oakland has received has caused San Francisco to rethink its policy as well, Carol.
COSTELLO: The same thing is happening in many parts of country. I know in Baltimore, the mayor asked the protesters not to camp out at the inner harbor. But they're still there and police haven't moved in to act. So sort of a ripple effect because of what's happening in Oakland. Dan Simon, live in Oakland, thanks so much.
Coming up at 10:00 eastern, we'll talk to Keith Shannon. He's the injured marines roommate who's been at his bedside at the hospital. That comes your way in an hour on AMERICAN MORNING.
VELSHI: Bernie Madoff's victims are saying don't buy the latest con. People who lost everything in the $60 billion scheme, retirement and college funds, saying that they're having trouble finding sympathy after Madoff said he's happier in prison and his wife told "60 Minutes" the couple tried to kill themselves. Susan Candiotti sat down with some of the victims. (BEGIN VIDEOTAPE)
CYNTHIA FRIEDMAN, PONZI SCHEME VICTIM: I think anything that comes out of their mouths is self-serving and are lies.
SUSAN CANDIOTTI, CNN NATIONAL CORRESPONDENT: Richard and Cynthia Friedman lost their life saving to Bernie Madoff, so did Eileen Kent's parents. So when they heard Ruth Madoff talk about a failed suicide attempt in a new "60 Minutes" interview --
RUTH MADOFF, WIFE OF BERNIE MADOFF: I don't know whose idea it was, but we decided to kill ourselves, because it was -- it was so horrendous, what was happening. We had terrible phone calls, hate mail.
CANDIOTTI (on camera): Do you believe it?
RICHARD FRIEDMAN, PONZI SCHEME VICTIM: I don't believe it. If it's a Madoff, you cannot trust anything they say.
CANDIOTTI: Assuming that she's telling the truth about taking pills, do you feel badly about that?
ILENE KENT, PARENTS VICTIMIZED: I just can't assume it. I think anything that they say is extremely self-serving. Ruth has been quoted in the past as saying that she's very concerned about the victims and she feels awful and she feels terribly. Well, why reopen the wound three years later?
CANDIOTTI (voice-over): Victims scoff at Barbara Walters description of her ABC Bernie Madoff interview. He says he's happy in prison, because he feels safe there.
BARBARA WALTERS: For 16 years he has lived in fear that he was going to be found out, and now he's not in control of his life, and so he is happier there than he was on the outside.
KENT: I was very much against sending him to a -- a maximum security prison, because I felt that would be revenge and not justice, but he's really just snubbing his nose. He's snubbing his nose at the system. He's snubbing his nose at us.
CANDIOTTI: Then there's Stephanie Madoff, whose husband Mark committed suicide last year, depressed over his father's crime.
STEPHANIE MADOFF: If I saw Bernie Madoff right now, I would tell him that I hold him fully responsible for killing my husband, and I'd spit in his face.
CANDIOTTI (on camera): So every time you hear an interview, every time you read an article involving an interview, what goes through your mind?
CYNTHIA FRIEDMAN: I had a visceral reaction. I really feel sick to my stomach.
KENT: I wish we could get that kind of publicity so people understand who the victims are. They're everyday people.
CANDIOTTI: You're hearing people ask them a lot of questions. Do you have any questions that remain in your mind that you'd like to ask them?
KENT: If I knew that Bernie Madoff would actually tell the truth for a change, I would say, why? How? And, who helped you?
CANDIOTTI: For victims there are many questions they feel will never be fully answered. Prosecutors have not charged Madoff's children nor his wife. She's living in a borrowed home in south Florida.
Susan Candiotti, CNN, New York.
(END VIDEOTAPE)
COSTELLO: To politics now and GOP presidential candidate Newt Gingrich saying President Obama is pulling a Madoff with his latest student loan plan. Gingrich at an education forum in New York went after part of the plan that would forgive outstanding student loans after 25 years of payments.
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NEWT GINGRICH (R) PRESIDENTIAL CANDIDATE: I'd like to see the Department of Education become a research and information center. I'd like to see us reprivatize the student loan program before the president bankrupts the entire country by promising to every young person you will not have to pay your student loan as a student, however, you will later on have to pay off the national debt as a taxpayer. But I'm being good to you. So by the time you figure out you're paying it off as a taxpayer, I'll be gone, but you'll reelect me because of your gratitude because you won't be paying off your loan as a student, which is a Ponzi scheme even by Governor Perry's standards.
(END VIDEO CLIP)
COSTELLO: At that same forum candidate Rick Santorum took a dig at Texas governor Rick Perry after Perry's campaign suggested he may skip some of the remaining GOP debates. Santorum suggesting it's a sign of weakness of Perry's part, and he's going to be in every debate.
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RICK SANTORUM, (R) PRESIDENTIAL CANDIDATE: I would never skip a debate. I never skip the opportunity to let the American public know what I think about these issues.
(END VIDEO CLIP)
COSTELLO: Perry took a nosedive in the polls after a series of stumbles onstage. Right now Perry is committed to a November 9th debate in Michigan, but none after that. As many as 18 more GOP debates are in the works.
VELSHI: Perry's loss has been Herman Cain's gain. Cain is surging in the polls and now he's surging in the bank. Cain's chief of staff Mark Block, the guy from this commercial you've probably seen, told our Erin Burnett the fundraising really picked up this month. Cain raised $3 million in October.
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MARK BLOCK, HERMAN CAIN'S CAMPAIGN CHIEF OF STAFF: We've actually doubled in a little over a month, and that's what we're seeing in our grassroots activism growth.
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VELSHI: Cain now finds himself at our near the top of all the latest national and state polls, right up there with Mitt Romney.
COSTELLO: Also new this morning, another miracle rescue from the rubble in eastern Turkey. A 13-year-old boy is found alive after being trapped five days. More than -- isn't that amazing? More than 500 people were killed in Sunday's 7.2 magnitude earthquake.
VELSHI: Six exotic animals in Ohio will stay put. The widow of the man who freed 56 wild animals before killing himself wants custody. The state of Ohio will keep them quarantined. Animal conservationist and director of the Columbus Zoo Jack Hanna says the animals are just now recovering and they should by no means should go back into the conditions in which they were living.
COSTELLO: The statue the liberty welcoming the huddled masses again on the 125th anniversary of her dedication. There will a special naturalization ceremony to welcome 125 new citizens to America. There will also be a Macy's fireworks show and brand new web cams installed on the torch. Could that happen during Libby's facelift? It will give viewers a stunning look at New York Harbor.
VELSHI: And a night to remember in St. Louis. The Cardinals twice down to their final strike scored two runs in the ninth inning, two more in the tenth inning to tie the Texas Rangers, and then won it on David Freese's homerun in the 11th. Incredible.
COSTELLO: There it goes.
VELSHI: Look at it go. It sets up a seventh and deciding game between the Cards and Rangers tonight in St. Louis, the first time since 2002 that the World Series has gone to a seventh game, and there is nothing in life more fun than a seventh game in the World Series.
COSTELLO: Yes, but what could beat game six? Game seven couldn't possibly.
VELSHI: That's right. I guess there's nothing more fun than a series that gets to seven games. That was the way to do it. Game six was really fun.
COSTELLO: It was awesome.
Still to come this morning, the cold front that took Texas by surprise, and why people in the northeast may have to get out their shovels this weekend. It's going to -- in fact, it's snowing in some parts of Connecticut already. It's crazy. Rob has the forecast up next.
VELSHI: And newer is not always better, at least when it comes to birth control. A new warning about one of the most popular forms of the pill in the world.
You're watching AMERICAN MORNING. It's 10 minutes after the hour.
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COSTELLO: It is 14 minutes past the hour. Welcome back.
After seeing what happened in Oakland, a New York City police sergeant is looking to protect 5,000 officers in his union. He says you're not hearing the whole story about the violence in Oakland or in lower Manhattan, and he is threatening to sue any protest who injures an officer.
Joining us now is Sergeant Ed Mullins, president of the Sergeants Benevolent Association in New York. Also speaking on behalf of the protest is Dan Cantor, executive director of the Working Families Party in New York. Welcome to both of you.
SGT. ED MULLINS, PRESIDENT, SERGEANTS BENEVOLENT ASSOCIATION: Thank you.
DAN CANTOR, EXECUTIVE DIRECTOR, WORKING FAMILIES PARTY: Thank you.
COSTELLO: Let's start with what happened in Oakland, because one of the protesters was injured there yesterday. The mayor of Oakland apologized for what happened, although she did not place any blame on police. From your perspective as a police officer, what went down in Oakland?
MULLINS: Well, I don't know her reasoning behind giving the green light, so to speak, to have the police take action. My understanding of what happened was that, you know, specific laws, conditions were created and being broken, and protesters were basically being asked to, you know, move and clear - clear out. That didn't happen, and then police took action, and it escalated.
COSTELLO: At what point did police decide to use tear gas, let's say?
MULLINS: Well, that's an interesting decision to be made. You know, tear gas would be used in, you know, violent crowds. We see it all the time on TV. Particularly in a lot of foreign countries, where crowds are being disbursed. COSTELLO: But in this particular instance in Oakland, I mean, there were reports that protesters were throwing things like rocks and paints at police - at police officers. Do those actions in themselves warrant the use of tear gas?
MULLINS: They could. Absolutely could.
COSTELLO: And, Dan, from your perspective, what happened in Oakland?
CANTOR: It seemed that the police overreacted, that the amount of force was used on an overwhelmingly peaceful group of demonstrators. There were just some outliers. The police have a tough job. They've got to keep order and respect the first amendment rights of protesters. That's not a trivial balance to keep and we count on the police to uphold the rights of protesters to petition their government, so to speak, and to assemble freely.
In Oakland, it was terrible. This young Iraq vet is in critical condition, maybe serious now.
COSTELLO: He's better now.
CANTOR: He's better now, good. Regardless, it's terrible that in - in such a situation somebody's back from Iraq gets hit in the head and is in the hospital. So it's good that the Oakland mayor apologized. We see many police departments around the country dealing much better with the protesters than in Oakland. Much more respectfully. And that's how it should be, because this is a very serious amendment to we're trying to uphold.
COSTELLO: But even you have said that police are in a tough position, right? And tell us about that, because --
CANTOR: Why they're trained.
COSTELLO: -- do police feel they're in the middle and they're being used in a way?
MULLINS: Well, authority can be used. I mean, our job, police across the country, their job is really to hold the constitution, when you think about it, and when violations occur, laws are broken, there becomes the issue of conflict. This is a decision that has to be made whether action is taken, and, you know, everyone understands the right to free assembly and protest. We get that.
But there are also rights of other person who are on their way to work, live in the area, who need to get in and out of traffic and, you know, walk around their particular city.
COSTELLO: And you say officers have been injured in Lower Manhattan, 20 officers. Tell us about that?
MULLINS: That's right. There's approximately 20 officers, maybe a little bit more than that right now who have received injuries, minor injuries. No one has been put in the hospital like, you know, in the case of this veteran in California.
You know, they've received injuries in the course of making arrests or being assaulted, and what I'd like to see is that not happen. I'd like to see nobody get injured. And, you know, we talk about the veteran in Oakland who was injured and, you know, yes, he's an Iraq veteran, but it could be anyone have gotten injured and that wouldn't be a good thing either.
So, you know, my method was to put everybody on notice -
COSTELLO: Who is injuring these police officers?
MULLINS: What happens in a demonstration, when - when there is a need to take action, to correct a violation, a law, or correct an obstruction of, you know, pedestrian traffic, two things can happen. Either the protesters comply or they resist. And we've seen peaceful demonstrations in the past. We've seen sit-ins where people just get arrested, and that's the end of it.
In cases where conflict comes about and violence comes about as a result of it, we now have a situation that escalates to a whole different level, and - and that expands into other people or people that want to -
COSTELLO: So you're saying that protesters in the Occupy Movement have injured police officers in the course of arrests?
MULLINS: Yes. That's how it generally happens.
CANTOR: Well, in general, these have been overwhelmingly peaceful protests all over the country. Unfortunately, New York, the most prominent example of unfortunate action was the pepper spraying by a police captain of one of the protesters.
Listen, that - that happens and there are outliers we count on the police to exercise restraint and we count on the protesters to be non-violent. There's an irony here, of course. It becomes the decision about this, as opposed to what protesters are really about, which is why the Oakland thing was so upsetting.
It's even ironic. My favorite sign down at Occupy Wall Street, one of my favorite is, "Police join us. They're destroying your pensions, too." And I know this is, you know, on the minds of Sergeant Mullins and his members. Their pensions were undone by some of the gambling that happened on Wall Street.
So it's important to keep in mind what this is really all about, and not turn it into a battleground.
COSTELLO: Well, let me ask you this question. Why is it important that these protesters camp out? Why can't they go home at night and come back in the morning?
CANTOR: Well, you might have asked the same to the protesters in Tahrir Square in Egypt. You have to be there physically to make your point. COSTELLO: All night long?
CANTOR: Sure. Why do the protesters stay in Resurrection City on the mall when King - after King died?
There's a long, historic tradition. It's not the only way protests happen, but it's a long and historic one and it's a way of saying this is so important we're going to upset our normal routine and be here overnight.
This crisis - this unemployment crisis, this housing crisis are so important to people that they're willing to do that and they have to be respected for doing it.
COSTELLO: And just your thoughts, your final thoughts, Sergeant, on these protesters camping out overnight, would you rather they not?
MULLINS: I would, and I, honestly, I believe that they have an impact to other businesses in the area, to the community in the area, and, you know, they're arguing for pensions, but public safety has to come before money. And that seems to be the big issue in this country. It's always about money.
We lost touch with public safety, values and things that affect the everyday working person. If we're all for the working person, then we would be doing orderly protests, we would be doing (INAUDIBLE) - we've had many protests in this city on a daily basis. We've had sit-ins. We've had peaceful demonstrations here.
For the most part this has been a peaceful demonstration, but there has to come a point where the people, the residents and the business people in Lower Manhattan also have rights that are enforced. And how do you survive when you're paying $20,000, $30,000 a month in rent? And that's a big number, but that's the American dream - ultimately that's the American dream.
COSTELLO: Thank you both for coming in. Sergeant Mullins -
MULLINS: Thank you.
COSTELLO: Dan, thank you so much.
CANTOR: Thank you.
COSTELLO: Ali?
VELSHI: Great discussion, Carol. Thank you for that.
It's time to check on the weather. Twenty-two minutes after the hour. Let's go to Rob. Rob, you've got a lot to report on, say, in terms of the weather. We got snow in the south. I'm getting tweets now from Connecticut and some just around New York saying that there may be snow very close to where we are.
ROB MARCIANO, AMS METEOROLOGIST: Yes. There's been snow in many spots and there's more to come, Ali. First off, we start you off with what happened in the Texas Panhandle. Amarillo reporting a significant snow over the past 24 hours, enough to at least coat the roadways and the grassy areas. Two to three inches of it, as a matter of fact. This - we didn't think they'd get this much snow and they're certainly take the ongoing drought, any sort of precip is welcome. But this is early in the season and that is certainly a shocker.
Also seeing snow across parts of New England, as Ali mentioned, upstate Connecticut, upstate New York, Western Massachusetts and just outside of Boston also seeing significant snow and Vermont, too. Anywhere from four to seven inches from the system that rolls through yesterday, and it's kind of prime things up, setting the stage for what's about to come over the next 24 to 36 hours.
The storm system down across the south is bringing some rain across the Tennessee Valley and the mid-south. That will be making its way towards the East Coast. As it does so, it will be winding itself up like a nor'easter would do. Memphis back to Nashville seeing a little bit of rain. It's getting into Huntsville now, not terribly strong but it will strengthen as it gets towards the coastline. A little bit of rain across Florida from what's left of Rina.
All right, here's our storm system towards the Carolinas, towards the Delmarva, winding itself up during the day tomorrow and throughout the overnight period tomorrow night. And we will see it looks like significant snow in inland areas. Ocean temperatures still kind of warm. So as long as you get that breeze off the water it's going to keep the temperatures just warm enough so that we don't see a significant accumulation, but could see a dusting (ph) - maybe an inch, maybe two inches in places like New York City or Boston.
But if you go a little bit further inland, we got winter storm watches that are posted as far south as Virginia to, of course, as far north as parts of Maine. Three to six inches potentially.
And you may be saying, well, it's that time of year? No. This is unusual if we get this much snow to fall this time of year. We still have leaves that on the tree branches. It's going to weighted down by the snow. We're going to see a significant power outages especially you get away from the I-95 corridor.
So for some folks, Ali and Carol, we're going to see maybe a bit of a white trick-or-treat scenario.
VELSHI: I love it. I got - we got people tweeting that their kids are going to wear their snowsuits for the first time before their Halloween costumes. But, you know, I'm like you, Rob. I love the snow.
MARCIANO: Bring it on.
VELSHI: Carol, on the other hand, would rather like it to be a little warmer.
COSTELLO: Man, I was born to live in a tropical climate. I'm sorry.
MARCIANO: You're welcome here anytime, Carol.
VELSHI: See you, Rob.
MARCIANO: You bet.
VELSHI: Still to come this morning, everybody's favorite airline fees, they're still going up. We'll have details for you after the break.
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VELSHI: Twenty-seven minutes after the hour. "Minding Your Business" this morning.
A big rally on Wall Street. News of that eurozone debt deal and a relatively strong report on economic growth here in the United States pushed markets higher yesterday. The Dow gained 2.8 percent. The NASDAQ was up 3.8 - 3.3 percent and the S&P 500 closed 3.4 percent higher. At this rate, we are looking at the best month for U.S. markets in nearly 40 years, since October of 1974.
Two more days of trading left to go in October, though, and that optimism over the eurozone deal is losing a little bit of steam. Right now, U.S. stock futures are trading lower ahead of the opening bell. A lot of criticisms out there that that Euro deal doesn't map out a clear path to recovery and may not be enough to help Europe avoid a recession.
The nation's largest airlines collecting a bucket load on fees. $1.5 million in April, May and June says the government. It's up one percent from the same time last year and more than eight percent from the previous quarter.
Don't forget, for the very latest about your money, check out the all-new CNNMoney.com.
AMERICAN MORNING back right after this break.
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COSTELLO: It is 30 minutes past the hour. Good morning to you. Here are your top stories.
Grief giving way to a moment of joy in Turkey, more than 100 hours after a powerful 7.2 magnitude earthquake killed more than 500 people. A 13-year-old boy has been pulled from the rubble alive.
It may get violent this morning in Nashville, a deadline today get "Occupy Wall Street" protesters off the legislative plaza. Yesterday, the state imposed a curfew on protesters and told them they'll need a permit if they want to stay. But after a meeting last night, the occupiers said they're going anywhere.
Oakland's mayor now apologizing after police tear gassed Wall Street protesters including an Iraq war veteran in the hospital. She also said city officials have started an investigation into the use of force. The injured Marine said to be improving in the hospital after suffering a fractured skull.
The six surviving animals from 56 exotic pets freed in Ohio are staying put in the Columbus zoo for now. The widow of the man who freed them before killing himself wants custody of those animals. The state of Ohio isn't allowing it saying the animals are deceased and malnourished and could cause a public health threat.
Twice, the Texas Rangers one home strike away from winning the World Series, but the St. Louis Cardinals refused to lose. They tied it up on Davis Freese's two-run triple at the ninth inning.
Then tied it up again on Lance Berkman's two run single in the tenth and finally, they won it for good on Freese's walk-off home run in the 11th inning. Game seven that's tonight in St. Louis.
VELSHI: What a great series it's turning out to be, Carol. Game seven doesn't come along very often.
All in all, Thursday was a very good day for the U.S. economy. Europe had a deal to ease its debt crisis, and America's economy is growing. The market is rocking. We're looking at possibly the best month since 1974.
The S&P 500, which may look a bit like your 401(k) is up 13 percent in one month. You'd be lucky to get 13 percent in most years. But is it too soon to start celebrating?
Jay Powell joins me now. He's the former undersecretary of the Treasury under President George Herbert Walker Bush. He's a visiting scholar at the Bipartisan Policy Center, a good friend of our show. Jay, good to see you in person.
JAY POWELL, VISITING SCHOLAR, BIPARTISAN POLICY CENTER: Great to be here.
VELSHI: Jay, you run these numbers a lot. You look at 2.5 percent GDP growth. We grew 2.5 percent from the second to the third quarter, biggest measure of our economy that we have.
Some people criticize it, but it's what we have. Where does 2.5 percent growth stand in the world of booming economy versus a recession?
POWELL: It's all compared to what? So 2.5 percent is good and the good news is it's much better than numbers earlier in the year, which were less than 1 percent and then 1.5 percent for the second quarter. So 2.5 percent is pretty good.
It's also not a recession. It signals strongly that we're heading away from a recession, which it was a real concern a month ago.
VELSHI: Right. POWELL: The issue is it's not really -- it's not large enough to make unemployment go down. We need to be 3 percent, 3.5 percent, 4 percent coming out of a recession to make unemployment go down.
VELSHI: Is it truly strong enough to say maybe that double dip talk can go away for a little while?
POWELL: I think we can put that on the shelf for the time being there. There are other straws in the wind, too. There are significant other data that show that the economy returning to a path of modest growth consistent with a strength in the economy.
VELSHI: Polling and some of the things that are going on in the Republican presidential nomination debates are giving people the impression that so much of what is wrong with the economy or not fixed in the economy has to do with Washington.
In truth what Washington today or in the past has done is almost marginal compared to the effects of the whole world on our economy.
POWELL: Yes. I think that's right. I think Europe is incredibly important. That's why this deal reached is very, very important, and it's not -- it's a long way from being a done deal.
They did the three things they freed to do, which is to reduce Greek debt, strengthen their banks and put together a facility to keep Italy and Spain in the markets as a reasonable price.
So they started down all three of those roads. That's a very, very positive long way to go on that, but that helps our economy, helps the mood here in the economy and the markets a lot.
VELSHI: Sure, it does and in fact, those two things combined I think is what led to that market gain that we saw yesterday.
POWELL: Right.
VELSHI: You ran a simulation yesterday, your organization, to sort of see what would happen if a major bank were to fail right now. Tell me why you did that and what you found.
POWELL: Well, the reason we did is that it the Dodd-Frank law really ended too big to fail and ended the possibility of taxpayer money being used in bailouts of banks.
That's not very well understood among the public or among financial market participants. So we put together a cast led by Larry Summers and other famous financial regulatory people, former secretaries of this and that.
And we failed a big bank under Dodd-Frank and showed exactly what would happen, how it would be dealt with.
VELSHI: And it wouldn't be dealt with the same -- not that the government would simply intervene to protect that bank? POWELL: The rules are completely changed under Dodd-Frank. The rescues done in 2008 of big banks could not be done without Congress stepping in. The regulators don't have that authority.
VELSHI: So what would happen?
POWELL: What would happen is the bank would be closed. The senior most management if responsible for this would be fired and perhaps have pay clawed back and the bank put to a resolution process.
It would be returned to the private market, but not until creditors actually lose money and that would be the process, which is completely different from what went on before where banks remained open and management stayed in place. And the equity holders did just fine and were bailed out.
VELSHI: A lot of people say that's just fine. If banks fail, let them fail. The fear that we have, of course, after Lehman what we didn't necessarily --
And what a lot of smart people didn't expect to happen, it would put this freeze on lending between banks, which again, a lot of regular folks say why do I care that big banks don't lend to each other. But it ended up causing a financial crisis that the world had never seen before.
POWELL: Well, that's -- the issue is the contagion issue with banks. Banks, their liabilities are very, very liquid. Their deposits largely and they can all flee. When they do that, the banks will fail and when the banks fail, the economy will fail.
There is no example of a modern economy that works at all without a healthy banking system. So banks present a special problem and the Dodd-Frank resolution system is meant to walk a fine line between bailouts, which nobody wants, including the big banks don't want and you know, failures.
So we've got to sort of a middle ground where we resolve the bank, return to the private sector, in a humbled form, and hopefully we've found that middle ground. That's what the simulation was intended to do.
VELSHI: Well, at risk of scaring our viewers off, one of the things that was important in this euro deal was that banks in Europe need to have something called core capital, a minimum of 9 percent.
So a minimum of 9 percent of their assets have to be fairly liquid, solid things that they can depend on. I wonder if you asked 10 people on the street how much they think a bank should have in something like core capital.
I think most would think it would be substantially higher than that or need to be substantially higher than that?
POWELL: Yes. You know, if you run the number, if you look at simulations, 9 percent of capital, which is really common equity. It's the excess of the assets over the liabilities.
VELSHI: Right.
POWELL: For a bank, it's really a pretty good number and that will eliminate a very, very large percentage of failures and losses. That seems to work. If you don't put any leverage, the banks make no money, they aren't profitable and they can't serve customers.
VELSHI: It may work. People are surprised banks have less money in that sort of equity than you think they do, but that's the fact. Jay, good to see you. Thanks very much for joining us.
POWELL: It's my pleasure. Good to be here.
VELSHI: Jay Powell is the former undersecretary of the Treasury under President George H.W. Bush and a visiting scholar at the Bipartisan Policy Center -- Carol.
COSTELLO: Core capital. I've learned something this morning. Thanks.
Still ahead, progress made. Lengthy NBA labor talks are offering a glimmer of hope this morning. Could handshakes be next?
And no more of spaghetti for brains. Haunted houses have become more sophisticated and more successful than ever. Our own Rob Marciano goes zombie on us to show us what's scary this year. It's 38 minutes past the hour.
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COSTELLO: You did that really well.
VELSHI: Thank you. Thank you very much. Voice-overs for haunted movies.
COSTELLO: Did you know there was a haunted attraction industry? That's what it's called, "A Haunted Attraction Industry." Anyway, it's scoring big bucks these days everything from corn mazes to spooky houses. It generates an estimated $300 million in ticket sales each year in the United States.
VELSHI: Well, our Rob Marciano went undercover in one of the most popular haunted houses in the country to show us just how much things have changed.
ROB MARCIANO, AMS METEOROLOGIST: Yes. Ali, we could use that voice. Absolutely.
VELSHI: All I've got is the voice. You've got the whole operation going.
MARCIANO: Well, thanks to a team of makeup artists and then wardrobe people. It is a huge operation. These haunted houses have really gone over the top in recent years. Here's another look at my hard-hitting investigative report. (BEGIN VIDEOTAPE)
MARCIANO: I always enjoy meeting new friends at Halloween and there are some of the creatures visiting haunted houses. Do you mind if I take a look inside? I'll take that as yes.
New friend, new friend. I'm here with Ben Armstrong, one of the owners of Netherworld. Ben, this place is massive. It's got to be a year-round operation?
BEN ARMSTRONG, CO-OWNER, NETHERWORLD HAUNTED HOUSE: Yes. We work on this absolutely all year long. We conceptualize it. We work on all the creatures and begin construction as early as February.
What we're going to do now, though, we're going to make you into one of the creatures. We're going to transform you into a monster that even your mother would be proud of.
All zombie's up. I'm going to go scare some kids. Come on. So this is our spot.
UNIDENTIFIED MALE: This is it?
MARCIANO: What's the call? What's the game plan?
UNIDENTIFIED MALE: You use the dark to your advantage. Come out through the door. You're a dead man rising from the grave.
MARCIANO: Yes, I love it. I just had my first scream. It felt good. Every night they line up around the block at haunted houses like these across America bringing an estimated $300 million a year.
ARMSTRONG: The haunted house industry changed dramatically in the last 15 to 20 years. So you really need to deck it all out, 360. Everything's got to be good. And technology is increasing.
We have a lot of animatronics, sophisticated characters that move. We use a lot of projection and illusion. So we're constantly upping the ante to give the customer more than just a guy jumping out and scaring them although that is the core of what we do.
MARCIANO: Well, that is sensory overload. Working at a haunted house is an adrenaline rush. Now back to my day job.
(END VIDEOTAPE)
MARCIANO: Who doesn't like a good scare and a good haunted house for sure? There are over 100 actors that work that deal. They're not making a whole lot, but I know how they feel now. Once you get your first scream, once you see the terror in their eyes -- there's nothing like it.
VELSHI: What's wrong with you people?
MARCIANO: By the way -- take a look what I sent my dentist earlier this morning. Not -- not happy. I spent 24 hours scrubbing my face and brushing my teeth to get back on set here.
(LAUGHTER)
COSTELLO: Gosh. Really, you were so excited --
(CROSSTALK)
COSTELLO: -- for your first scream. What did that feel like?
MARCIANO: It's hard to describe. It's much like any other sort of adrenaline rush I've gotten doing other things that are a little more physical. That seeing the fear in some of these eyes, and seeing the first kid drop to his knees --
COSTELLO: Oh!
MARCIANO: -- in terror. He'll live. He'll be fine.
(LAUGHTER)
VELSHI: Rob --
MARCIANO: Hey, they pay -- they know what they're getting. They pay money. They pay over 20 bucks to go into these places, in haunted houses across the country. They know what they want, and they're getting it.
VELSHI: That's right. Well, a business story. A Halloween story.
(LAUGHTER)
VELSHI: Good story all around.
Good to see you, my friend.
MARCIANO: Happy Halloween.
VELSHI: Morning headlines are next, including a nasty mold infestation, forcing hundreds of college students to evacuate campus. And you'll never believe where they're going now. Just -- let's just say they're about to get a crash court in aquatics.
(LAUGHTER)
COSTELLO: Also ahead, our "Talk Back" question of the morning. We asked this question: Should cities prevent Occupy protesters not from protesting but from camping out overnight? We'll read some of your responses later.
It is 26 minutes past the hour.
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COSTELLO: Thirteen minutes until the top of the hour. Welcome back to AMERICAN MORNING. Here are your morning headlines. A major shake-up in the U.K. this morning. Commonwealth leaders approved a change to a 300-year-law law of succession, giving princesses an equal shot at the throne.
The big rally on Wall Street losing some of its steam this morning. Right now, U.S. stock futures are trading lower ahead of the opening bell.
Oakland's mayor apologizing after police tear gas Wall Street protesters and put an Iraq War veteran in a hospital. She also said city officials have started an investigation into the use of force.
Six exotic animals in Ohio will stay put. The widow of the man who freed 56 pets before killing limbs will not get custody of the surviving animals for now. Ohio's governor says they should stay in quarantine until they recover.
Students at St. Mary's College in Maryland will be cruising through the rest of the semester, and I mean that literally. Starting today, 240 students will be relocated to a cruise ship because the school is dealing with a mold problem.
There's no deal, just cautious optimism as NBA owners and the players union plan to meet again this morning to try to end the lockout. The first two weeks of the regular season have already been cancelled, and the rest of the November schedule is now at risk.
Oh, and the World Series going to a game seven after a comeback for the ages. The St. Louis Cardinals beat the Texas Rangers on a David Freese walk-off homerun in the 11th inning. It came after the Cards were down to their last strike, twice, once in the ninth, again in the tenth, but rallied to tie. Game seven tonight in St. Louis.
That's the news you need to start your day. AMERICAN MORNING, back after a break.
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VELSHI: There you go. Happy birthday, Statue of Liberty. 125th birthday in New York City here. It's crisp this morning, by the way, 37 degrees. It's going to be mostly sunny today, getting up to 51. But a whole lot of people commuting into New York complaining about the snow on the ground before Halloween. It's happening.
COSTELLO: It's going to snow tomorrow.
VELSHI: Yes, it's going to.
COSTELLO: Maybe three inches.
VELSHI: Like real snow.
COSTELLO: Crazy.
Welcome back to AMERICAN MORNING. "House Call" now. A new warning about an extremely popular form of birth control. A new study of almost a million women released by the Food and Drug Administration shows women who are on the drug Yaz, made by Bayer, had a 70 percent greater chance of experiencing a blood clot than women taking older birth control drugs. The FDA also finding complications with newer forms of contraception from Johnson & Johnson and Merck. The FDA is holding a meeting in December to discuss the findings.
VELSHI: If you have a family history of colon cancer, listen to this. Another new study says taking two aspirin a day may reduce the risk of colon cancer by more than 60 percent, if you're at risk of inheriting the disease. All the patients in the study suffered from Lynch Syndrome, the genetic condition that predisposes people to other types of cancer.
COSTELLO: Losing weight is not easy and keeping the weight off is even tougher for many people. And now there may be a scientific explanation for that.
VELSHI: Excellent. That's what I've been waiting for.
(LAUGHTER)
COSTELLO: Senior medical correspondent, Elizabeth Cohen, who would like to tell me to exercise and eat my vegetables, may have some contradictory evidence this morning -- Elizabeth?
ELIZABETH COHEN, CNN SENIOR MEDICAL CORRESPONDENT: That's not true.
VELSHI: All right.
COHEN: I'm not going to say anything contradictory to that. What am I going to say, Ali, is this study in the "New England Journal of Medicine" this week is yet more evidence that your body sort of turns against you when you try to lose weight. What the study shows is that when you try to lose weight, it kind of, for want of a better term, whacks out the hormones in your body because your hormones are what tells you, hey, Ali, you're full, stop eating, right?
The problem here is what they're finding is when people diet, those hormones don't do that job very well. You start to lose weight and you're taking in fewer calories and your hormones say, eat, eat, eat, you're hungry, even if you're not hungry. It's sort of as if your car was saying, I'm running on empty even when you're full.
VELSHI: I totally agree with that.
COHEN: People --
(LAUGHTER)
VELSHI: That happens to me all the time. That's exactly the problem. I start exercising and I eat more and I get fatter. That's why I stop exercising all the time.
COSTELLO: Oh, geez.
(LAUGHTER)
COHEN: You're not letting him get away with this, are you, Carol?
COSTELLO: No, I complained to him all morning about his diet. I tell him he should exercise and he probably doesn't like me for that but that's too bad.
COHEN: Right. The thing is this doesn't get anybody off the hook. All it lets you know is that if you're experiencing this, if you feel like you're getting hungrier and hungrier when you diet, there may be biological basis for that.
VELSHI: What do you do for that?
COHEN: I'm here to say that there is no magic bullet. I wish I had something incredibly new and exciting to tell you. But really, what you're going to see is that there isn't anything new and exciting. All you can do is remember in your head, look, I may be feeling like I'm hungry, but am I really hungry because I just ate.
COSTELLO: OK.
COHEN: So, all the stuff that you knew before, which is watch what you eat and exercise. And, of course, it really helps not to gain the weight in the first place.
COSTELLO: Here's what I've discovered, because I don't usually eat junk food. And since I don't usually eat it, I don't have a craving for that kind of food. So, does the biology -- I mean, does something in your body change that makes you less likely to crave? I know what you just said, but I do find that's true with me.
COHEN: I don't think there's necessarily science behind it, but I do know, for example, people who have become vegetarians, that they say they just don't crave meat.
VELSHI: Right.
COHEN: In the very beginning they might, but after a couple months, meat is distasteful to them. And I've heard people say what Carol said. When they stop eating junk food, they just stop wanting it. You have to get over that hump, but it's certainly something to try.
COSTELLO: See?
VELSHI: Definitely requires some more study. I'll be looking into this a lot more.
(LAUGHTER)
COSTELLO: Thank you, Elizabeth Cohen.
COHEN: All right, thanks. COSTELLO: Up next, outrage over Scott Olsen, the Iraq War veteran, seriously injured during a battle with police during the Occupy Oakland protests. We're going live to the hospital where family and friends are holding vigils.
VELSHI: And Pentagon chief, Leon Panetta, is ready to collect on a bet with a friend for tracking down Osama bin Laden. What is the reward? It's pretty nasty actually. We'll tell you about it on the other side.
Fifty-six minutes after the hour.
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