Return to Transcripts main page
American Morning
Wall Street Protesters Return; Coach K Is Number One; Touchdown Jesus?; Penn State Assistant Coach Speaking About Child Sex Scandal; Analysts Debate the Meaning of the Rise of China; China Rising, U.S. Slipping; Newt Gingrich Back from the Brink
Aired November 16, 2011 - 07:59 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
CAROL COSTELLO, CNN ANCHOR: Back to fight another day. I'm Carol Costello. Wall Street protesters returning to the park where it all started without their tents, and they're not happy.
CHRISTINE ROMANS, CNN ANCHOR: Red alert. I'm Christine Romans. A compelling new book argues America is at war with China. Only the Chinese are the only ones fighting and the U.S. doesn't even know what to do. It's an economic war with huge implications. Can America start competing again and win -- on this AMERICAN MORNING?
COSTELLO: And good morning to you. It's Wednesday, November 16th. Ali has the day off. Welcome to AMERICAN MORNING.
ROMANS: Yes, welcome this morning.
Up first, they're back. Occupy Wall Street protesters are back in upper Manhattan's Zuccotti Park. They're not as comfortable. Last night a judge ruled that protesters, who were cleared out of the park in that surprise raid by police hours earlier -- the judge ruled they could come back, but without tents, tarps, generators and camping equipment.
Earlier on AMERICAN MORNING, we spoke to Dan Cantor, executive director of the Working Families Party, and a protester himself, who had a message for the city.
(BEGIN VIDEOTAPE)
COSTELLO: Will this galvanize the movement or kill it?
DAN CANTOR, EXECUTIVE DIRECTOR, WORKING FAMILIES PARTY: We should back up. Two months ago, nobody in America was really talking about the issues of inequality, of the 99 percent. So it's some pleasure, while what the mayor did was quite wrong, there was no reason to go in in the dark of night to trample on the First Amendment rights of the protesters. In fact, in some ways, it doesn't matter. They've already won. They've already changed the conversation in America. It's clearly going to continue.
Many people were saying yesterday, you can evict an encampment but you cannot evict an idea whose time has come. And this idea that we need to have an economy that works for everyone, that the country is seriously on the wrong track, has spread. And there are millions of people who now, who understand this.
(END VIDEO CLIP)
COSTELLO: Deb Feyerick is live in Lower Manhattan.
And, Deb, we're hearing there are new flare-ups in the crowd right now. So, tell us about it.
DEB FEYERICK, CNN CORRESPONDENT: Yes, Carol. There are not a lot of people here, but tensions really are running very, very high. You can see some of the private security guards dressed in the yellow there. Any time anyone tries to set up a tent or put down a sleeping bag, they're immediately taking it down. As a matter of fact, one demonstrator who appeared to be breaking up a fight, in fact, he was arrested by police and taken away.
Protesters are telling me they believe that people are being sent into the park in order to sort of ferment trouble, to just stir things up. They don't know who's sending them. They have their suspicions.
But they say, in two months, tensions weren't like this, but now, it's fewer people, more security guards, fights just seem to be breaking out. One businessman did tell us that, in fact, he stopped by this place many times and had never seen a problem and was very surprised at the level of tension here at Zuccotti Park.
Again, the New York Supreme Court said that people can be here, park is open 24 hours. However, they cannot bring tents and they cannot bring sleeping bags and the security people here, the private security, they are really cracking down on that.
One man tried to put up a string with one of these, sort of, metallic covers for warmth. In fact, that was taken down almost immediately, Carol.
COSTELLO: Thank you, Deb Feyerick, reporting live for us this morning.
So, the victory for protesters north of the border. A judge siding with the protesters that set up near Toronto's financial district. They were all put on notice yesterday. But a last-minute injunction stopped police from moving in at midnight.
ROMANS: But it looks like time is up in Dallas. A federal judge cleared the way for evictions of protesters near city hall in Dallas. Dozens of people camped out there for about a month. City officials will meet today before any action is taken.
COSTELLO: And there are now crackdowns in more than half a dozen cities this week. So, what is the future of the "Occupy" movement? Does it have one?
Here to talk about that is strategist and political commentator Sally Kohn, her latest commentary appears on CNN.com.
Welcome, Sally.
SALLY KOHN, STRATEGIST AND POLITICAL COMMENTATOR: Thank you for having me.
COSTELLO: The big question this morning, if you take the "occupy" out of "Occupy Wall Street" -- is it still a movement?
KOHN: It is, because I think it's an important distinction between the "occupy" tactic and the movement of the 99 percent. In fact, you know, in that case, I think we're just seeing the first percent of the movement of the 99 percent to have true economic opportunity and broadly shared prosperity in this country. It's just the beginning.
COSTELLO: But what form will the protests take now?
KOHN: Well, that's a great question. Unfortunately, my crystal ball was taken from me at Zuccotti last night. So, I can't be sure.
But I think we're going to start to see three trends emerging. So, first of all, you're going to see the occupation tactic fall away. I mean, look, it's really cold outside. They're a pain to maintain and they do bring all kind of problems from folks who are not necessarily supportive for the movement but looking for help and have other troubles that should need to address.
COSTELLO: And by that you mean it attracts --
KOHN: It attracts people who have drug issues
COSTELLO: Perhaps homeless people --
KOHN: And certainly. No one wants to see people getting hurt. That's counterproductive to the message of what the protesters are trying to achieve. So, they're going to start experimenting with new tactics. I think it's going to be messy at first. We're going to see a lot of misses and a few hits.
But we're going to see them start to find other ways to engage the broad majority of Americans who support what they are doing but aren't necessarily going to go sleep under a plastic tarp. So, that's the first.
And, then, second, we'll start to see some leaders emerge.
COSTELLO: And who might those leaders be?
KOHN: Well, again, you know, I lost that crystal ball and I don't think we know and I don't think, frankly, they know. You have to know -- remember that social movements, this is one, they take a long time. They take a long time to develop.
You know, early on, it's not clear who, you know, what the issues are necessarily going to be and the movements or the tactic. But leaders will, in fact, emerge. This is not a leaderless movement, it is a leader-ful movement. There are thousands of potential leaders, and I think it's going to be a mix of opportunity and serendipity that some of these people will emerge to be spokespeople to bring the conversation to the larger.
COSTELLO: And I guess the third thing that might happen is they will finally embrace politician, something the movement has loathed to do.
KOHN: Well, I actually think the third thing that will happen is a faction, a sort of a breaking off of the more, for lack of a better word, militant groups. The ones that are still, for instance, trying to hold the ground at Zuccotti Park and who still have been more confrontational with police, et cetera, versus people who see that this is a broader movement.
You know, the vast majority of Americans support it. It includes people not just in New York City, but people in Idaho, and Iowa and Indiana; and find ways to move from the occupation tactic to a much broader movement that, indeed, does things like look at the political system. How are we going to change that, how are we going to undo the campaign finance laws that have allowed corporations to buy our politics. That's where they're going to move.
COSTELLO: OK. So, let's talk about the message. And I think there have been many messages and the big criticism of this group is like they're all over the place. Has one message emerged, despite the fact that so many people are talking about so many different things?
KOHN: Yes, there's no question. It's true. You know, two months ago, we -- in this country, we were talking about debt. We were talking about how to slash Medicaid and Medicare in order to give more tax breaks to the rich.
And, now, we're talking about creating jobs. We're talking about run away inequality and we're talking about the fact that Americans are working harder and harder for less and less money. So, they've changed the conversation. That wasn't easy and that's a sign of their success.
You know, going forward, I think that there is a question about the political system as you raised -- how do you actually get the corrupted influences Wall Street out of our politics and give our politics back to the people. So, you'll start to see more specific issues around issues, but in general, the -- look, inequality is wrong and un-American. They got that message out loud and clear.
COSTELLO: So, you don't believe the movement has been hurt at all by some fair criticisms that have been out there. You know, that, you know, confronting police when you didn't really have to and some of that element moving in. That criminal element moving in, that made the protesters look really bad and you have to admit that some on the right have painted the occupy protesters as not very nice people, as crazy people, as people who should just go away.
KOHN: Yes. And two reactions. So, first, you know, when early Americans were throwing boxes of tea from private corporations into the Boston Harbor, they were initially labeled as criminal elements, too.
So, history does tend to look more favorably on protests and see the protesters as justified and as patriots rather than problems, number one. But number two, it's also a little bit more complicated. Yes, there are some few people inside, a few yahoos at the protest who just want to make trouble, who want to confront the police, et cetera.
Some of the violence we've seen has to deal with police provocation and in places in Oakland, it's had to do with the fact that, look, the occupy movement was layered on top of a very deep and very justified problematic relationship between communities of color and the police in Oakland who have a history of overuse of force. So, it's a little more complicated.
COSTELLO: Sally Kohn, thanks so much. If you'd like to read more on Sally Kohn's commentary, just head to CNN.com/opinion. It's a great article.
KOHN: Thank you very much.
COSTELLO: Thank you so much for being here.
ROMANS: All right. Forget about Wall Street for a second, what about China? We're going to speak to authors Stephen Leeb and John Doggett. Are we already at war with China? An economic war? And why is the U.S. so clueless about it?
COSTELLO: And developing right now, we're hearing reports a bullet hit and smashed through a window at the White House. Actually, it smashed through part of the window because it was stopped by a second layer of protected glass and an additional round of ammunition was also found outside the window yesterday.
The Secret Service has not confirmed whether this is connected to reports of gunfire near the White House on Friday. Witnesses said they heard shots and saw two speeding vehicles in the area. An AK-47 style rifle was also recovered. We're also hearing reports that the Secret Service, Park Police, FBI, ATF and the D.C. Police Department are working together to find a man who is believed to be connected to last weekend's incident.
ROMANS: President Obama is in Australia right now meeting with Prime Minister Julia Gillard. The two leaders announcing a plan to widen the U.S. military presence there. That means 25 Marines will be stationed at a base in northern Australia by 2013. The president also warning China to start playing fair when it comes to free trade.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: The main message that I've said not only publicly, but also privately to the Chinese is that with their rise comes increased responsibilities. It's important for them to play by the rules of the road. There are going to be times when they are not, and we will send a clear message to them that we think that they need to -- they need to be on track in terms of accepting the rules and responsibilities that come with being a world power.
(END VIDEO CLIP)
ROMANS: The president said the U.S. doesn't fear China and welcomes a rising peaceful China. It's a brief trip to Australia. The president leaves later tonight.
COSTELLO: It's coming down to the wire. Live pictures now from Capitol Hill. Seven days and counting until the so-called supercommittee has to reach a deal to come up with at least $1.2 trillion in budget cuts. If there's no deal, we're talking across the board spending cuts.
ROMANS: Can they make a deal? A brand-new poll shows Americans aren't very confident that they can do it, according to a CNN/ORC survey. Seventy-eight percent of Americans say it's unlikely the committee will get a deal on time.
COSTELLO: Still ahead, we're tracking severe storms right now and a possible tornado this morning. Jacqui Jeras will have a live update for you, next.
ROMANS: And another big story this morning -- a Penn State assistant coach fighting back. Mike McQueary who reportedly saw Jerry Sandusky molest a child now says he stopped the attack and he went to police.
COSTELLO: And it's worth about $600,000, but we're looking into reports this morning, Joe Paterno sold his home to his wife for $1.
And fans of Denver Broncos quarterback Tim Tebow created custom jerseys in honor of the proud Christian football player. Are they brilliant or blasphemous? You decide.
It's 10 minutes after the hour.
(COMMERCIAL BREAK)
COSTELLO: This song makes me sad.
(LAUGHTER)
COSTELLO: Good morning, Atlanta. It's cloudy, 67 degrees. Thunderstorms expected later today with a high of 74.
ROMANS: Sad, Carol. Two more days until Friday. You got a lot to get through.
Jacqui Jeras is in the extreme weather center.
Good morning, Jacqui.
JACQUI JERAS, AMS METEOROLOGIST: You guys just totally relaxed me.
COSTELLO: I know. I feel like going to sleep now.
ROMANS: Come on, the day is starting. Ramp it up!
JERAS: It can get stormy in Atlanta later today. Looks kind of nice out there now, little bit on the gloomy side. At least you can see the tops of the buildings, once again.
And you know with those low, overcast conditions, you'll probably have some delays at Atlanta Jackson-Hartsfield airport. None right now, though. Glass half full, right?
To the west, we do have some strong to severe thunderstorms. We have four reports of tornadoes already this morning. Some southwest of New Orleans and then, also, one around Laurel, Mississippi.
We do have one warning still in effect right here in Alabama. This is for Marengo and Sumter Counties. This is a Doppler radar indicated tornadoes, but we have some touchdowns and some damage today.
So, really take these very seriously. Get to your safe place, the lowest level of your home away from doors and windows.
There you can see, the one warning that we do have in effect. And there, you can see the one moving up towards Demopolis in that area. Now, we do expect that threat to spread eastward throughout the day. So, we'll be watching Atlanta. We'll be watching Columbia. We'll be watching Raleigh, as well as Charlotte for that threat, and that's probably not going to happen until after the noon hour here.
So, damaging winds will be possible along with large hail, and a few tornadoes are going to be possible, as well, for today. Now, we've got a big storm front here all across the east coast, and we're going to be getting wet in Washington, D.C., Philadelphia, New York. It's already been sprinkly there on and off for today, but we don't expect the thunderstorms here to be severe.
All the energy coming in with an upper level disturbance across the southeast. So, that's why we have the severe threat here. Not to mention we have so much moisture and so much humidity in place. Man, it's feeling more like springtime conditions here with as moist as it is. Now, on the back side here, we have some very cold conditions. Our temperatures are going to be dropping big-time here.
So, say good-bye to the above average temperatures as that cold air moves in. Only in the 30s for you today in Minneapolis, and out west, we've got a very strong cold front here and that's going to bring wind gusts up to 60 miles per hour along the Oregon Coast, and in the cascades, we could be talking about one to two feet before all is said and done.
Forty-nine in Seattle, 35 in Philly, 37 in Minneapolis, 63 in Dallas and that cold front moving through here and check out the 85 degrees in New Orleans. I've got some pictures I want to show you from the Indiana area. A town called Paoli, Indiana. The same storm system that hit Louisiana and Mississippi today, well, this hit Indiana yesterday. It was likely a tornado. We're waiting to hear back from the National Weather Service as to whether or not they're going to confirm that, but you can see a lot of damage. You know those long span buildings, those roofs go right away. It's why we tell you to get into a strong, sturdy structure. That those are in good places to be.
And now, you can see they're already cleaning up from that system. So, another ugly day of severe thunderstorms. We'll continue to track it. Back to you guys.
ROMANS: All right. Jacqui Jeras. Thank you so much, Jacqui.
COSTELLO: Duke basketball coach, Mike Krzyzewski, making history. Last night, he set the record for the most wins via division I coach. The win, number 903 of his coaching career, breaking a tie with his former mentor, Bobby Knight.
ROMANS: It was unanimous. Detroit Tigers' pitcher, Justin Verlander, took home the American League Cy Young Award last night. He won the pitching Triple Crown last season, leading the league in wins, strikeouts and earned run average. He could also make on the first starting pitcher to win the league MVP since 1986.
COSTELLO: He deserves it, too. Go, Justin Verlander!
Some fans of Broncos quarterback, Tim Tebow, wearing their faith on their shoulders. Check this out. They've made custom Tebow jerseys that replace Tebow's name with the name Jesus. Tebow, who is very vocal about his faith, has legions of loyal fans, but critics are saying the jerseys are blasphemous whether they're meant to be or not.
(CROSSTALK)
ROMANS: Speaking of Tim Tebow, just in to CNN, "People" magazine has named the sexiest man alive.
COSTELLO: Tim Tebow?
ROMANS: No, but Tim Tebow is sexy, too. It is actor Bradley Cooper, who came by here earlier this year and I couldn't talk. We're asking him questions, and we actually stopped talking. He was a little disconcerted, actually.
COSTELLO: As were you.
ROMANS: I know. Actually, yes. So, sexiest man alive, Bradley Cooper. There you go.
COSTELLO: I'm going to dig up that tape and watch it.
(LAUGHTER)
ROMANS: Oh, it's so embarrassing.
All right. Investors a little nervous this morning. A check of the early markets, next. Plus, Apple names a new chairman of the board filling the vacancy left by the death of Steve Jobs. We're going to show you who. It's 18 minutes after the hour.
(COMMERCIAL BREAK)
ROMANS: It's 22 minutes after the hour. "Minding Your Business" this morning.
Greece's new prime minister and his government are expected to survive a confidence vote in parliament this morning. Lucas Papademos has reported three-quarters of the Greek people.
Tensions pretty high, running real high after union workers cut off power to the government health industry to protest a new tax.
Right now, U.S. stock futures pointing to a lower open this morning. Today, investors looking at new reports on inflation and industrial production.
Farmland, wow! What a good investment that's been. Prices for Farmland in this country up 25 percent in the third quarter, the biggest one-year jump in 30 years. The higher land prices are fueled by higher corn, soybean, cattle and hog prices.
Approaching D-Day in Detroit. Today, the city's mayor, Dave Bing, will speak about the city's financial crisis. That speech tonight comes just days after a report revealed that the city, it might go broke by July 2012, unless, immediate and drastic cuts are made in Detroit.
Facebook says it's working to identify and shut down the accounts responsible for this coordinated spam attack that caused pornographic and violent images to appear in some people's news feeds yesterday. According to Facebook users, they were somehow tricked into copying malicious codes into their browser bars and then that allowed hackers access to their accounts.
And Apple names a new chairman, the board's co-director, Arthur Levinson, will steal (ph) that position previously held by the company's co-founder, Steve Jobs. Apple also announcing Bob Iger, Disney's CEO, will join the board.
And google is expected to unveil its long-awaited music store today. According to the "Wall Street Journal," songs will sell for about a dollar. And you may also be able to let your friends on Google Plus listen to the songs you buy.
Up next, more confusion in the Penn State scandal. Assistant coach, Mike McQueary, who told the grand jury he saw Jerry Sandusky rape a boy in the shower now says he stopped the attack and he did talk to police. AMERICAN MORNING back right after the break.
(COMMERCIAL BREAK)
(BEGIN VIDEO CLIP) UNIDENTIFIED FEMALE: This is the guy that is the key witness for all three cases. He's a key witness against Jerry Sandusky because he was an eyewitness to a sexual assault and he is really the soul witness against two Penn State officials charged with perjury and was failure to report.
COSTELLO (voice-over): New question this morning about the Penn State assistant who had blew the whistle on Jerry Sandusky as Mike McQueary speaks out for the first time on this AMERICAN MORNING.
(END VIDEO CLIP)
ROMANS: And welcome back to AMERICAN MORNING. Top stories.
New flare ups at "Occupy Wall Street" this morning after a rude awakening early yesterday. Wall Street protesters were allowed back into their home base at New York's Zuccotti Park, but without all of their stuff. A judge saying no more tents or generators allowed.
COSTELLO (on-camera): President Obama finally making good on his pledge to visit Australia after canceling two previously scheduled trips. Earlier this morning, he announced an agreement to expand America's military presence in that country. By 2013, 2,500 U.S. marines will be stationed at a military base in Darwin, Australia.
ROMANS: We're hearing reports this morning a bullet hit a window at the White House before it was stopped by a second protective glass. The secret service hasn't confirmed whether this is connected to reports of gunfire near the White House on Friday. Witnesses say they heard shots and saw two vehicles speeding in the area. An AK-47-style rifle was also discovered.
COSTELLO: And A live picture of Atlanta where severe storms are moving through the area right now, and throughout the day, heavy rain is expected across the southeast. We've already had reports of one tornado in Louisiana.
And in Indiana, people are still cleaning up after a line of strong storms moved through last night, damaging homes and businesses.
ROMANS: A key figure in the Penn State child sex abuse scandal speaking out for the first time, and, apparently, fighting back. Assistant coach, Mike McQueary, said he did act when he witnessed Jerry Sandusky's alleged rape of a young boy in 2002. In an e-mail obtained by the "Allentown Morning News," McQueary says, quote, "I did stop it. Not physically, but made sure it was stopped when I left that locker room."
And McQueary claims in that e-mail he went to police. He also writes, "No one can imagine my thoughts or wants to be in my shoes for those 30 to 45 seconds, trust me." The e-mail seems to contradict McQueary's grand jury testimony or at least the summary from the grand jury of that testimony. McQueary Also made his first public comments since the scandal broke. These are comments he made to CBS.
(BEGIN VIDEOTAPE) ARMAN KETEYIAN, CBS NEWS: Do you have any idea when you think you might be ready to talk?
MIKE MCQUEARY, PENN STATE ASST. FOOTBALL COACH: This process has to play out. I just don't have anything else to say.
KETEYIAN: OK. And then just one last thing. Just describe your emotions right now.
MCQUEARY: All over the place. Just kind of shaken.
KETEYIAN: Crazy?
MCQUEARY: Crazy.
KETEYIAN: You said what? Like a --
MCQUEARY: Snow blower.
(END VIDEOTAPE)
ROMANS,: McQueary has been placed on administrative leave from the university.
COSTELLO: Of course there are still many unanswered questions about the Penn State sex scandal and perhaps chief among them what Penn State officials knew about the claims against Jerry Sandusky and when they knew them. Turns out the university is exempt from Pennsylvania's open records laws and protected, in effect, by a legal wall of silence. Drew Griffin has more in a CNN exclusive.
(BEGIN VIDEOTAPE)
DREW GRIFFIN, CNN INVESTIGATIVE CORRESPONDENT: Carol, it's the type of information would normally get in the United States from a public institution, especially a police department -- the records the incident reports, all the information you rely on to get the facts to know who knew what, when, and where.
But Penn State will you not find that, because Penn State got itself an exemption from this state's open records act. At the same time in 2000, 2008, when the legislature was discussing this new law, Penn State's president personally went to the legislature and asked to be exempt to make sure the records were kept private.
TERRY MUTCHLER, EXECUTIVE DIRECTOR, PENNSYLVANIA OPEN RECORDS: What that means in essence is that while every other commonwealth agency, governor's office, police department, townships, school districts, are subject to this law and would be required to provide public record, Penn State is exempt. That came as a result of a series of lobbying efforts through the House of Representatives that was taking a look at rewriting Pennsylvania's right-to-know law, which was really among the worst in the nation. And at that juncture, the president of Penn State was one of the key lobbyists testifying before the house committee on, I believe it was August 7, 2007, seeking an exemption for Penn State. GRIFFIN: Carol, we did try to reach Graham Spanier at his home. We did not get an answer from the former Penn State president, but we know what he told the legislature when he was seeking this exemption. He said he wanted Penn State to be exempt from the records because he needed to protect the competitiveness of the university, that he was concerned about the cost of compliance, and that a huge bureaucracy would have to be built to answer questions and open those public records. Looking back on it now, it has a whole different look. Carol?
(END VIDEOTAPE)
COSTELLO: Thanks, Drew.
Mike McQueary's new e-mail notwithstanding, he's been heavily criticized for not taking immediate action to protect the child after apparently witnessing Jerry Sandusky's sexual assault. Earlier on AMERICAN MORNING we asked clinical psychologist Jeff Gardere why someone who sees something so horrific might not act.
(BEGIN VIDEO CLIP)
JEFF GARDERE, CLINICAL PSYCHOLOGIST: It's traumatic. You better believe it's traumatic to the child what's going on, and there's also, and I'm not making excuses for this individual, McQueary, but there's also a trauma in seeing something so horrific and heinous going on that you're frozen and you're not doing what you should be doing.
(END VIDEO CLIP)
COSTELLO: And Gardere says McQueary has to live with the fact that if he had done more, other alleged victims would have been spared.
ROMANS: Meantime the "New York Times" is reporting that former Penn State coach Joe Paterno transferred full ownership of his home near the campus to his wife, Suzanne, for a dollar, "plus love and affection" it says on the deed. "The Times" says the 84-year-old Paterno did it in July months before the child sex scandal that led to his firing.
The couple previously had joint ownership of the home, which they bought in 1969 for $58,000. The fair market value today is more than $594,000. It's unclear why they chose then to transfer the ownership or why they transferred that ownership, Carol, but the man is 84- years-old and he likely has estate planning and a trust. So, these may have been moves into and out of that trust. We just don't know.
COSTELLO: Also, Paterno's replacement, interim football coach Tom Bradley, is denying rumors that the team would decline a bowl bid at season's end. Bradley says they have been assured that is not the case. He also said the possibility of Penn State not playing football next year has not come up. The Nittany Lions have an eight and two record in the Big Ten and are still in contention for the conference title. ROMANS: Still ahead, forget protesting Wall Street. Our next two guests are warning that China is owning us. It's China has occupied the United States. But it's not too late if America can get in gear and start to compete. We'll talk about the relationship between the U.S. and China and how the U.S. can get its act together. It's 35 after the hour.
(COMMERCIAL BREAK)
ROMANS: Good morning, New York City. It's cloudy and 57 right now. You're going to get another degree, 58 and full on rain later on. So, take that, Lady Liberty.
Welcome back. As America sits in a sluggish recovery, China is really throwing its money around becoming a major player in the world economy, becoming many of the places, the place that some of our allies turn to when they're in trouble.
Our next guests are warning that the U.S. better watch out, but it's not too late at the same time. Stephen Leeb is author of "Red Alert -- How China's Prosperity is Threatening America's Way of Life." John Doggett is a professor at the University of Texas-Austin, the author of "When We are the Foreigners -- What Chinese Think about Working with Americans." Both of you are experts on China and have been there and know this subject better than anyone. Thanks for both of you.
I want to start first with Stephen. The president making his first trip to Australia, announcing an increased military presence for the United States there, widely seen as something of a counterbalance to China in the region. How badly does the United States need to counterbalance China in its own backyard, Stephen?
LEEB, AUTHOR, "RED ALERT": I think that China -- I think the United States absolutely has to counterbalance China. I think China, Christine, has basically seized control of vital industries. And what they're doing right now is to make sure that they continue to control those industries.
And among those industries are solar. They've gone from nowhere to controlling 60 percent of solar energy. They have absolute total dominance in wind by virtue of their control of rare earth. They basically have access to copper, which right now doesn't appear to be a scarce commodity, but I'm just quoting Goldman Sachs which said that copper is likely to be an unimaginably highly priced commodity within the next couple of years. That means that it is becoming ever scarce. China gets it.
ROMANS: You say that we're at war with China, only China is the only one that knows we're at war. We're kind of sitting back.
LEEB: That's exactly right. My analogy, and I know it sounds tough -- this would like in the 1940s being fully aware that Germany is developing an atom bomb and we put the Manhattan project on hold. That's what's at stake for us in our opinion. If we don't have access to copper, to wind, to solar, desalinization -- they're on the verge of taking control of desalinization which is going to be critical for fresh water -- we're finished.
ROMANS: The U.S. needs to put together major investments and have a refocus on the American economy.
John, let me bring you in. How many times have you been to China?
JOHN DOGGETT, PROFESSOR, UNIVERSITY OF TEXAS-AUSTIN: Oh, probably about 15, 20 times in the past decade.
ROMANS: So, does the United States need to completely reboot and start competing again and we've lost this economic war? Where are we?
DOGGETT: We absolutely need to compete. But I disagree completely with Stephen that China is taking control of stuff. Good grief they are doing what they need to do to improve the quality of life for their people. And if we're sitting around doing nothing, it's not their fault. The idea that they're taking control of the sun, of the wind, of the ocean, it's just absolute garbage. What they're doing is competing. And what we're not doing is competing. And we're blaming them instead of blaming ourselves. We need to get of our butts and learn how to compete more and stop whining.
Stephen, you've come up with some very good data about what's going on, but to blame the Chinese instead of blaming us just doesn't make sense.
LEEB: I did blame us. If you listen to exactly what I said, I said it would be like knowing that Germany's developing an atom bomb and we're doing nothing. The Chinese are doing -- wait, hear me out, because you totally misunderstood what I'm saying. I love the Chinese
DOGGETT: I am looking at the title of your book, and the title of your book says they're threatening America's prosperity. It's like we're at war with them.
LEEB: You're making a fight out of no fight. I am saying the Chinese are doing exactly what they should be doing to secure their own prosperity. They have absolutely nothing against us. And if we were the same -- in the same position, that's exactly what we should be doing, get off our butts, I agree with you, and be doing exactly what they're doing. They don't have anything against us. They're not aiming for hegemony over us. They're not aiming to beat us militarily. China cares about only one group of people, and guess who that is? It's China.
ROMANS: John, let me ask you something. You have China with its first aircraft carrier. You have China spending all this money to modernize and update and upgrade its military with the stated goal of controlling its own backyard. China has economic interests and political interests around the world that don't really completely mesh with American interests, and a lot of money, American dollars, to be frank, to push its own agenda. So, should the United States have a more, a more intertwined, economic, and defense policy towards China?
DOGGETT: You know, I believe what we need to do as Americans is that we have to be competitive. We have to grow our economy more actively. But in terms of defense and China, how would we feel if the Chinese opened up a base in Mexico? I think we need to understand that the people who need to be concerned about the defense of Asia are the Japanese, the Koreans, and the Indians, not us.
ROMANS: The Chinese are -- I will tell you something, the Chinese are buying up Chinese owned companies, state-owned companies are buying up huge shipping ports, the chokeholds and different places around the world. Yes, you could see the strategy around the world.
LEEB: But look at this as an example. China's infrastructure in Africa is so strong and they have so much control that when a barrack comes in and buys a major copper company in Africa, the Chinese company didn't bid. You know why? Because all that copper has to go to China anyway. We're fighting a war in Afghanistan. We're fighting a war in Afghanistan and they're mining copper in Afghanistan. Get real. I mean --
DOGGETT: Yes, you know. It is real. But the point is, whose fault is it?
LEEB: Ours.
DOGGETT: We were in Africa way before they were.
LEEB: We're green.
DOGGETT: You have a great book, but the problem I have is your title. I mean, you have your doctorate in psychology so you know the value of words. "Red Alert -- How China's success is Threatening America's Prosperity." That is so inflammatory. That's your title.
LEEB: That's exactly true.
ROMANS: I think where you both agree, though, and John, you tell me if I'm wrong, we're at a point here where America needs to up their own game. John, I know you like to use sports analogies a lot. In this country we're talking about spending money around the edges for unemployment benefits or a payroll tax holiday. In China they're spending half a trillion dollars a year to invest in infrastructure, right?
DOGGETT: And we are borrowing $1.2 trillion from the Chinese to subsidize our deficit spending. We're borrowing $1.2 billion from the Chinese right now, according to the U.S. treasury. That's insane.
LEEB: John, in defense of my title, this is about the third or fourth topic I have written on resources and our crucial need to develop things, and they made no impression. If we realize America needs someone to focus on. And, yes, you're absolutely right. The Chinese have nothing against us.
And I like, I love the Chinese. I think that they're an absolutely brilliant civilization. That is not the point. But the point is by building up their own country by providing a 21st century for them, there will be nothing left from -- for us unless we get off our haunches and really start Manhattan Projects for this, Manhattan Projects for that. That is the point.
ROMANS,: Guys, last -- last quick thought, John.
DOGGETT: We agree.
ROMANS: OK, you agree on that. Both of you I know are students of the relationship and the way the U.S. is going and the amazing strides that China has made. It's growing at eight percent and U.S. is growing at only two percent. So they're certainly doing something right in terms of driving their economy.
John Doggett professor at the University of Texas, Austin and also Stephen Leeb, the book is "Red Alert: How China's Prosperity is Threatening America's Way of Life."
Gentlemen, thank you. We'll have this debate, again.
"Morning Headlines" next; 46 minute after the hour.
(COMMERCIAL BREAK)
COSTELLO: Thirteen minutes until the top of the hour. Here are your "Morning Headlines."
Markets open in about 45 minutes and right now U.S. stock futures are pointing to a lower open as investors brace for more political developments out of Europe.
Motor City's money mess is front and center. Tonight, Detroit Mayor, Dave Bing will talk about the city's financial crisis. The speech coming just days after a report revealed the city could possibly go broke by July 2012, unless immediate and drastic cuts are made.
Americans apparently are not very confident in the so-called super committee. According to a new CNN/ORC poll, more than three- quarters of Americans say it's unlikely the committee will get a deal in on time.
President Obama meeting with Australian Prime Minister Julia Gillard. The two leaders announcing a plan to widen the U.S. military presence there; 2,500 Marines will be stationed at a base in northern Australia by 2013.
We're hearing reports a bullet hit and smashed through a window at the White House before it was stopped by a second pane of protective glass. A second bullet was found yesterday on the grounds near that window. Officials won't say if the case is connected to reports of gunfire outside of the White House Friday night.
In an e-mail, Penn State Assistant Coach Mike McQueary said he did act to stop Jerry Sandusky's alleged child rape in 2002 and he said he did talk to police, not just Joe Paterno. McQueary writes, "I did stop it, not physically but made sure it was stopped when I left that locker room." That seems to contradict his grand jury testimony. Duke basketball Coach Mike Krzyzewski making history. Last night he set the record for the most wins by a division one coach. The win number 903 of his coaching career breaking a tie with his former mentor, Bobby Knight.
And after all the speculation, "People" magazine has finally announced actor Bradley Cooper as the sexiest man alive. The 36-year- old actor telling "People" quote, "I think it's really cool that a guy who doesn't look like a model can have this title" end quote.
That's the news you need to start your day. AMERICAN MORNING back after a break.
(COMMERCIAL BREAK)
ROMANS: All right, welcome back.
If Herman Cain becomes President, he says, Henry Kissinger would have been his top choice to be Secretary of State. Kissinger served under Nixon and Reagan. But Cain says the 88-year-old Nobel Peace Prize Winner turned him down when the two had breakfast a few weeks ago. The former secretary of state told Cain he is perfectly happy with what he's doing right now.
COSTELLO: And he's 88.
The Iowa caucuses are just seven weeks away and they're up for grabs. Take a look at the new Bloomberg News poll. Republicans in Iowa were asked to pick a nominee and Herman Cain finished on top with 20 percent of the vote. Ron Paul, Mitt Romney and Newt Gingrich all within three points of the lead making it a statistical four-way dead heat.
ROMANS: So, who saw that coming?
After Rick Perry's flubs and the Herman Cain scandal, former House Speaker Newt Gingrich back in the mix. Will voters buy what he's selling? The new Newt.
CNN's political correspondent, Jim Acosta caught up with Newt Gingrich on the trail.
(BEGIN VIDEOTAPE)
JIM ACOSTA, CNN POLITICAL CORRESPONDENT (voice-over): Meet the GOP's latest fresh face, Newt Gingrich.
NEWT GINGRICH (R), PRESIDENTIAL CANDIDATE: Yesterday afternoon in Jefferson, Iowa, someone introduced me as the frontrunner.
ACOSTA: Yes, the same Gingrich who was once a dead candidate walking now has a shot at the GOP nomination, drawing big crowds in Iowa he is candid about his near-death political experience when his entire senior staff abandoned him all at once last summer.
(on camera): Did you feel dead? GINGRICH: No I felt desperate. But I didn't feel dead. I have done this for 53 years and the two hardest months of my career were June and July.
I am the only candidate running who has actually led at the national level.
ACOSTA: But with Gingrich, humility has its limits. In assessing what initially went wrong with his campaign, he compared himself to two conservative giants.
(on camera): And where did you go wrong?
GINGRICH: Oh, I think that it was a big mistake on my part to try to bring in conventional consultants because I am much like Reagan and Margaret Thatcher. I am such an unconventional political figure that you really need to design a very unique campaign that fits the way I operate and what I'm trying to do.
ACOSTA (voice-over): Gingrich has climbed in the polls by outshining many of his rivals at the GOP debates and by selling ideas that sometimes veer from Tea Party doctrine. For example Gingrich would spend billions on a new federal brain science project to find cures for Alzheimer's and Parkinson's.
GINGRICH: The best way to control the cost of Medicare is to defeat the diseases so people stay healthy.
ACOSTA: But in nearly the same breath, Gingrich rails against the Washington establishment.
GINGRICH: The Washington establishment model is pain and austerity.
ACOSTA: Despite being a creature of the capital -- for nearly three decades.
(on camera): You're not a creature of Washington.
GINGRICH: No.
ACOSTA: How long have you lived outside of Washington since your days as Speaker?
GINGRICH: I haven't. I mean, I lived in McClain, Virginia, for practical reasons. I do work -- I did work at the Central Intelligence Agency and I did work at the Pentagon.
(CROSSTALK)
ACOSTA: But critics might say you are a creature of Washington; that you've spent all of these years --
(CROSSTALK)
GINGRICH: You can -- you can call me anything you want to. All right. None -- none of my policy proposals represent the Washington establishment.
ACOSTA (voice-over): Ultimately, Gingrich wants voters to judge him, not on his past, such as his previous marital difficulties, but on what his campaign Web site calls the New Newt.
(on camera): But because this is the new Newt that we're seeing here? The New Gingrich?
GINGRICH: Go back and get the "Time" magazine cover in 1994. Where they had me as Scrooge holding Tiny Tim's broken crutch. And the title was "How mean will Gingrich of America be to the poor?"
I mean one of the things elite media did was it created a caricature of me so that when people finally saw me in debates, they said, that can't be Newt Gingrich because, in fact, I'm very different from the media imagery.
ACOSTA: Another telling sign of Gingrich's sudden surge, he plans to open up his first campaign office in Iowa next week. And he has an infusion of campaign cash to work with after raising nearly $3 million in just the last month.
Jim Acosta, CNN, Sheffield, Iowa.
(END VIDEOTAPE)
COSTELLO: And a reminder for you, CNN is hosting the next Republican debate on Tuesday, November 22nd at 8:00 p.m. Eastern. Wolf Blitzer will be the moderator with the folks on national security. That's live at 8:00 p.m. Eastern Tuesday night on CNN.
It's five minutes until the top of the hour. We'll be right back.
(COMMERCIAL BREAK)
COSTELOO: Good morning to our friends in Atlanta. It's going to be a nasty day. Severe thunderstorms moving through the area, maybe right now, maybe later today. But at least it will be warm, 74 degrees.
ROMANS: I know. But you know what; in Hawaii it's always beautiful weather. Finally this morning, must-see video. Hillary Clinton getting a little surprise trip on her trip to Hawaii. Check this out.
(BEGIN VIDEO CLIP)
(HILLARY CLINTON IN HAWAII)
(END VIDEO CLIP)
ROMANS: Ok, so, that was a guy holding a tiki torch holding only a loincloth sprinting behind the Secretary of State and Hong Kong's Chief Executive during a photo op. It really cracked her up. We're not sure who that guy is or what he was doing there. Maybe he was just going to light the tiki torches. I don't know.
COSTELLO: Maybe he had a special message for our Secretary of State.
ROMAN: It's unclear whether it said, you know, occupy aloha on his loincloth. We couldn't get that close.
COSTELLO: It's a funny picture, though.
ROMANS: It sure is.
COSTELLO: I just like looking at it.
That does it for us this morning for us. Let's head to Atlanta, and throw it to T.J. Holmes. Good morning T.J.
ROMANS: Good morning T.J.
T.J. HOLMES, CNN ANCHOR "CNN NEWSROOM": Good morning, ladies. Good to see you both. You all have a good day.
