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The Situation Room
'Astounding' Jobless Rate; Embryonic Stem-Cell Research Reversal; Tips on Finding a Job
Aired March 06, 2009 - 16:00 ET
THIS IS A RUSH TRANSCRIPT. THIS COPY MAY NOT BE IN ITS FINAL FORM AND MAY BE UPDATED.
WOLF BLITZER, CNN ANCHOR: Happening now, astounding job losses. The unemployment rate skyrocketing to its highest level in 25 years, and President Obama struggling to convince Americans that better days are ahead.
Plus, a bill to keep the government running gets stuck in some old-fashioned partisan wrangling. This hour, some Republicans griping about pet projects also are bringing home the bacon.
And here's one way to tell a politician what you think of him -- slime.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
A top presidential adviser says there's no way to spin the newest unemployment numbers. She says they are simply terrible.
Look at this. The jobless rate skyrocketing to 8.1 percent last month, the highest level in a quarter century. And right now, 12.5 million Americans are out of work. That's the most since records started being kept back in 1940.
President Obama hit the road once again today trying to offer a ray of hope to a state that is suffering.
Our White House Correspondent Dan Lothian traveled with the president to Ohio -- Dan.
DAN LOTHIAN, CNN WHITE HOUSE CORRESPONDENT: Wolf, the president won his battle with Congress over the stimulus bill, but he's still on the road, trying to boost confidence in the battered economy.
(BEGIN VIDEOTAPE)
LOTHIAN (voice-over): Far from unexpected, more grim unemployment news. The country lost 651,000 jobs last month. In Columbus, Ohio, President Obama called the latest numbers astounding.
BARACK H. OBAMA, PRESIDENT OF THE UNITED STATES: I don't need to tell the people of this state what statistics like this mean.
LOTHIAN: Confronting a crisis in confidence, the president came to Columbus to prove that the stimulus money is already working to turn the economy around. Twenty-five police cadets who got pink slips in January were saved by the bill. OBAMA: I look at these young men and women, I look into their eyes, and I see their badges today, and I know that we did the right thing.
LOTHIAN: In January, the city of Columbus was forced to cut $13 million from its 2009 budget. That meant the cadets had to go. Shocking news for Josh Vandop, a father of two children.
OFFICER JOSH VANDOP, COLUMBIA POLICE: Initially, it was just kind of shock. We went into a survival kind of mentality.
LOTHIAN: While attending the U.S. Conference of Mayors in Washington, Columbus Mayor Michael Coleman pushed the president and other officials to get stimulus money flowing to his city. He received more than $1.2 million to save the cadets.
VANDOP: It was a huge relief for myself. And I called my wife, and it was just a weight off our shoulders. You know, we had a way to provide for our family.
LOTHIAN: But it's a temporary reprieve. Their jobs are only guaranteed through the end of the year, when the stimulus money runs out.
(on camera): What happens beyond that?
MITCHELL BROWN, COLUMBUS PUBLIC SAFETY DIRECTOR: Well, what happens beyond that, we'll deal with it when we get to it.
(END VIDEOTAPE)
LOTHIAN: The rookie officers say they're hoping the economy will turn around by the end of the year or that more slots open up when older officers retire -- Wolf.
BLITZER: All right, Dan.
Dan Lothian traveling with the president in Columbus, Ohio.
Meanwhile, another attempt by the president to help states cope with this economic crisis. He's inviting state officials to a White House conference next Thursday on how best to spend money from this economic stimulus package. The job losses, though, horrendous once again in February.
Let's bring in our Senior Correspondent Allan Chernoff to tell us how these numbers are breaking down.
A huge number, Allan. How are they breaking down?
ALLAN CHERNOFF, CNN SR. CORRESPONDENT: Well, Wolf, any way you look at it, the numbers are incredibly distressing. We're looking at historic data here, historic declines in employment. Let's break it down, first of all, by age and by sex.
First of all, adult women, 6.7 percent. Not nearly as bad as the general number. The general number, of course, being 8.1 percent, which is exactly where we have adult men.
Teens, it's just miserable. I mean, the teenage unemployment rates always is much higher than for adults, but for teens, look at that, 21.6 percent. So more than one out of every five teens in the workforce is out of work right now, trying to find jobs, can't find them -- Wolf.
BLITZER: What about by race? How do they break down these numbers by race?
CHERNOFF: Right. Well, Asians have the lowest level. That, typical, is 6.9 percent. For whites, 7.3 percent. Hispanics, they represent a lot of people in the construction industry. And that's why you see that number nearly at 11 percent. And for blacks, 13.4 percent, just an awful number.
Now, typically, the unemployment rate for African-Americans is about double what it is generally. It's not quite at that level, but nonetheless, you look at that number, 13.4 percent, incredibly distressing.
Let's have a look at the breakdown among industries. And some of the big industries, some of the producers that normally pick up jobs, big declines.
Manufacturing, well, that's been a long decline over the past few decades, but down in number, 168,000 over there. Construction, obviously that's been declining dramatically, down more than 100,000. And retail as well, a big hit. Services as well.
Almost every part of the economy losing jobs expect for government employment and health care. Those are the only two sectors where we've really seen any significant job growth.
Now, it is important for people to understand that even as companies are laying off, there are other companies that do continue to hire. Wolf, we saw that yesterday at the jobs fair.
Back to you.
BLITZER: Thanks very much, Allan, for that.
By the way, our own Ali Velshi is hosting another edition of the CNN "Money Summit." It will air tonight at 10:00 p.m. Eastern. The CNN "Money Summit" will take the pulse of the real economy and how it feels to you. That will air tonight, 10:00 p.m. Eastern.
Let's go back to Jack Cafferty right now. He has "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: Wolf, earlier this week, I wrote this in my column on CNN.com: "First Lady Michelle Obama has blown away the stale air in a White House musty from eight years of the Bushes. It's like the sun came out and fresh spring breeze began wafting through the open windows."
Pretty good, don't you think?
The first lady recognizes the White House is the people's house, inviting folks, kids in, to just visit and look around. The nation's first African-American first lady is also making the rounds among federal agencies, and sometimes thousands of government employees line up just to see her. She's visited schools. Yesterday, she volunteered at a soup kitchen.
Perhaps it's no surprise that a recent poll shows Michelle Obama has the highest initial favorable ratings of first ladies going back to Nancy Reagan. An article in "The Christian Science Monitor" points out that one thing is clear about Michelle Obama's post-election rollout -- "She's no Hillary Clinton."
Although both first ladies are Ivy League trained lawyers who came out of high-powered careers, Mrs. Obama has so far avoided the appearance of getting involved in policy. Instead, she's cast herself as the nation's mom in chief, with her top priority getting her girls settled into school and into a daily routine.
And yet, some are wondering if this is just Michelle Obama's opening act, if policy work will eventually become a natural progression at some point. After all, she was a top executive at a Chicago hospital. During the campaign, Michelle Obama held regular women's roundtables selling her husband's candidacy and giving feedback to his inner circle. She has made the needs of military families a priority, both before and after the election.
Raised on the south side of Chicago, in a working class family, Michelle Obama went on to a top-notch education at both Princeton and Harvard Law School.
So here is the question. Does Michelle Obama have a future in politics if she wants one?
Go to CNN.com/caffertyfile. You can post a comment on my blog -- Wolf.
BLITZER: Here's my answer -- yes.
CAFFERTY: I believe so. I believe she does.
BLITZER: Everybody will think that.
By the way, I'm the first on my block to get it...
CAFFERTY: Oh, you got it.
BLITZER: ... and I don't know if you can see it right here, but here it is, Ladies and Gentlemen. This is going to be a new bestseller. It's coming out in the next couple of weeks, "Now or Never: Getting Down to the Business of Saving Our American Dream," by our own Jack Cafferty.
Congratulations, Jack. And thank you very much for the very nice inscription. CAFFERTY: Well, you're most welcome, and thank you for all your support. There's a lot of people in this business that I've worked with over 48 or 49 years, or however long it's been, and I can count the ones on one hand that I enjoy coming to work every day to be with, and you would be one of those.
BLITZER: Well, that's -- and I feel just the same, Jack.
CAFFERTY: There you go.
BLITZER: Thanks very much.
(CROSSTALK)
BLITZER: And you know what?
CAFFERTY: And besides that, you're an attractive man, Wolf.
BLITZER: I just started reading it. I just started reading it, and it's good.
CAFFERTY: Really? You like it?
BLITZER: Yes. This is going to be a bestseller.
CAFFERTY: All right.
BLITZER: I'm predicting it right now.
CAFFERTY: Good. From your mouth to God's ears. All right.
BLITZER: It will happen.
It's the be all and end all for millions of jobless Americans, companies that are actually hiring right now. We're going to tell you how to find them.
Plus, a lot of outrage in Congress over the price tag for lawmakers' pet projects, but some top critics may actually be sharing some of the blame.
And isn't the presidential campaign over? Judging by the president's latest moves, maybe not.
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: The president of the United States about to do something very, very major in reversing a decision from his predecessor.
Let's go to our Senior White House Correspondent Ed Henry to break the story for us.
Ed, tell us what's going on. ED HENRY, CNN SR. WHITE HOUSE CORRESPONDENT: Well, Wolf, CNN has learned that on Monday, President Obama is planning to sign at least one executive order that will overturn Bush-era policy on stem-cell research. Basically, it will overturn limits that the Bush administration had put in on the types of embryonic stem-cell research that can receive federal tax dollars. This coming from two Obama administration officials.
This move, of course, will be hailed by advocates for people suffering from Parkinson's Disease, Alzheimer's Disease, Diabetes. They'll say that increasing federal research -- stem-cell research is going to lead to all kinds of medical breakthroughs.
As you know, there are a lot of critics, specifically conservatives, though, who say that they object to this because they say the destruction of human embryos is a destruction of a human life. But we're told that on Monday, President Obama is moving ahead with this executive order, overturning Bush policy -- Wolf.
BLITZER: It's an interesting development, not that anyone should be all that surprised, because he made it clear during the campaign, he opposed those restrictions on embryonic stem-cell research. But he did tell our own John King only three weeks ago, or not that long ago, that he would have preferred that Congress pass legislation that would ease these restrictions on embryonic stem-cell research so the next president, if the next president opposes such research, wouldn't be able to reverse it simply by signing an executive order.
Do we know, Ed, why he's decided now to go with an executive order easing these restrictions, as opposed to seeking legislation in Congress?
HENRY: It's a good question. He did tell John King that during the presidential transition.
What officials here are saying is they want to move forward on the executive order in the short term. They don't know how long it's going to take Congress to move forward on legislation, but they do hope that the Democratic-led Congress will still, in the months ahead, move ahead with legislation that could actually provide the federal dollars, the federal research dollars. So they see this sort of as a multistep process.
So their thinking may have evolved to the point that they believe that an executive order, in the short term, is a good step forward, in their eyes, despite the criticism they're going to face on Monday. And then that down the road, Congress will back it up with federal tax dollars, with legislation to, as you say, make it so that the next president, whoever it is, can't just overturn this with one stroke of the pen -- Wolf.
BLITZER: Ed Henry, doing some great reporting for us, as he's been doing lately.
Ed, thanks very much.
HENRY: Thank you.
BLITZER: And there's another story developing now. Let's go right to Zain Verjee. She's working this story for us.
What's happened, Zain?
ZAIN VERJEE, CNN ANCHOR: Wolf, we're hearing of a small plane crash in Ocala, Florida. We understand that it crashed into an RV park on Gainesville Road.
These are some pictures coming into us live from our affiliate, WFTV. It's unclear what caused this crash. We don't know if there are injuries or fatalities. But we know that investigators were on the scene and many worked to put out a fire that was sparked after this crash -- Wolf.
BLITZER: We'll watch this story with you, Zain. Thanks very much.
Employers are slashing jobs by the thousands, but some companies are actually hiring.
Our CNN Personal Finance Editor Gerri Willis is over at the jobs center in Yonkers, New York, working this story for us.
Tell us what's going on. There are jobs out there, but you've got to look very closely, don't you, Gerri?
GERRI WILLIS, CNN PERSONAL FINANCE EDITOR: Yes. That's absolutely right, Wolf. We are losing a lot of jobs, but I found some places that are still hiring.
BLITZER: Gerri, when we look at where the jobs are going right now, I want to be precise, because we heard earlier from Allan Chernoff, there are jobs in health care, for example. The government has some jobs, they're hiring. But beyond that, are there any sectors folks should be looking at?
WILLIS: Well, absolutely. You know, technology is a big place that people are hiring in. I want to show you a map if I can of where these jobs are really coming from.
If you look at this geographically, for example, you can see in the South there's job creation in the South, and it tends to be in health care because you have boomers retiring there. And also, Texas has a lot of oil and gas jobs. That area still growing.
Now, when you go out West, the jobs are totally different there. Technology in California is growing. And what's interesting there is we have the boomers retiring, and so you see all these software engineers that are going to be hired out there, and it's largely because you're losing a lot of talent each and every year to retirement. So technology very big there.
You go up the coastline a little bit to Washington State and it's biotech. Go back to the East Coast for just a second. You mentioned government jobs. Washington, D.C., a very big area of course for government jobs, but also Virginia is big as well, and Maryland.
Go up the coastline to New York, and you may think, well, New York can't be having job creation, right, because Wall Street is dead? But in fact, there are financial jobs that are being created right now, and it's in insurance and collections. Collection agencies are hiring as well.
Go right up north to, say, Boston, and you see hiring in that area as well, mainly because of what's going on at the schools and universities there. They're continuing to grow.
So there is some job creation here. It's not what we're used to seeing, but if you are unemployed, if you position yourself right, you can find something -- Wolf.
BLITZER: And I know you're going to stay all over this, Gerri. Thanks very much.
WILLIS: My pleasure.
BLITZER: Gerri Willis reporting.
And don't forget to check out her show over the weekend, right here on CNN.
He's accused of one of the biggest financial scams ever, but could Bernard Madoff be set to make a plea deal? Wait until you hear what the alleged scammer's lawyer did today.
And the most recognizable items from an historic figure. Gandhi's glasses, sandals and other items sold at an auction that sparked a controversy. You're going to find out what will happen to them now.
Stay with us. You're in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Congress was forced today to pass a stopgap spending bill to keep the government running for the next five days. That's because a sweeping measure to fund federal agencies for the rest of the fiscal year is now stuck in the Senate. Republicans put the brakes on the bill last night, complaining it's filled with thousands of pet projects. So who's responsible for fattening it up?
Let's go to our Senior Congressional Correspondent Dana Bash. She has the answer for us -- Dana.
DANA BASH, CNN SR. CONGRESSIONAL CORRESPONDENT: Well, you know, it really was an embarrassment, Wolf, for Senate Democratic leaders when they had to abruptly delay this vote last night because they did not have the votes to keep the spending bill going. But Republicans have been really successful in painting this as filled with wasteful spending and pork barrel projects, but the reality is, earmarks aren't just from Democrats.
(BEGIN VIDEOTAPE)
BASH (voice-over): Republican Senate Leader Mitch McConnell rails against the $410 billion spending spree of taxpayer money.
SEN. MITCH MCCONNELL (R), MINORITY LEADER: This approach to spending represents business as usual in Washington.
BASH: Yet inside the spending bill, McConnell asks for 53 earmarks totaling $75 million for his home state of Kentucky, according to Taxpayers for Common Sense, a budget watchdog group. A spokesman for McConnell says the requests were made last year, and notes he voted for an amendment to strike all earmarks, which failed. But McConnell just won a tough reelection battle, campaigning in part on bringing home the bacon.
NARRATOR: Mitch McConnell is helping build a new Kentucky, securing $280 million for Kentucky universities.
BASH: The second ranking Senate Republican, Jon Kyl, has been slamming the spending bill, too, even saying this during debate...
SEN. JON KYL (R), ARIZONA: I was surprised to learn that this bill includes earmarks totaling about $7.7 billion, 8,750 earmarks, allegedly.
BASH: But some of those earmarks, $25 million worth, were his requests, like $4.2 million for a bypass at the Hoover Dam. Though Kyl's name is next to that earmark and nine others in the bill, a Kyl spokesman insists they're not earmarks because Congress has already approved the projects.
Here's another member of the Republican leadership, John Ensign.
SEN. JOHN ENSIGN (R), NEVADA: The one place that seems immune for cutting wasteful spending is the federal government. And the people responsible for that are right here in this chamber and in the chamber across the Capitol.
BASH: He, too, has earmarking in the bill totaling $52 million. An Ensign spokesman called the process flawed and lacking enough public scrutiny, but defended sending projects back home, saying, "Earmarks are a way for smaller states like Nevada to compensate for the disproportional funding that comes from the federal government."
(END VIDEOTAPE)
BASH: And GOP senators argue it's not such the earmarks, but the spike in overall spending in this bill that they oppose. They point out that there is an increase on average of about 8 percent to fund government agencies, which they also point out is way above inflation -- Wolf.
BLITZER: All right, Dana. Thanks very much.
Dana doing some good digging for us, a good report.
(NEWSBREAK)
BLITZER: He's only been in office a little over a month, but President Obama has been looking a lot like a candidate. At least that's what some people are suggesting. We're talking about his travels. What do they say about the political climate right now?
And slime time, why one disgruntled woman didn't think a letter of complaint to a politician was enough.
Watch.
(BEGIN VIDEO CLIP)
UNIDENTIFIED MALE: Get away.
(END VIDEO CLIP)
(COMMERCIAL BREAK)
BLITZER: To our viewers, you're in THE SITUATION ROOM.
Happening now, even as the president touted his stimulus plan, in action today, America learned its jobless rate hit a 25-year high. Ahead, the future that Mr. Obama says he sees for our country.
Also, Sarah Palin is making some conservatives do a double take. The move she made could be signaling she's changing her hard-core Republican conservative ways, and why. We'll explain.
And planes rerouted to steer clear of a threat, where some airlines coming to the U.S. won't fly right now.
I'm Wolf Blitzer. You're in THE SITUATION ROOM.
President Obama's not happy with the dismal new job market. No one is. He's defending the economic stimulus plan, though, as helping to reverse the job loss tide.
Let's get some more now on our top story.
The president spoke to a graduation ceremony for new Columbus, Ohio, police officers. He says some of them now have jobs directly because of the stimulus plan.
(BEGIN VIDEO CLIP)
BARACK OBAMA, PRESIDENT OF THE UNITED STATES: You know, just this morning, we learned that we lost another 651,000 jobs throughout the country in the month of February alone which brings the total number of jobs lost in this recession to an astounding 4. 4 million -- 4. 4 million jobs.
I don't need to tell the people of this state what statistics like this mean because so many of you have been watching the jobs disappearing long before this recession hit. I don't need to tell this graduating class what it's like to know that your job might be next because, up until a few weeks ago, that is precisely the future that this class faced, a future that millions of Americans still face right now.
Well, that is not a future I accept for the United States of America.
(CHEERING AND APPLAUSE)
OBAMA: That is why...
(CHEERING AND APPLAUSE)
OBAMA: That is why I signed the American Recovery and Reinvestment Act into law.
(CHEERING AND APPLAUSE)
OBAMA: Now, there were those -- there were those who argued that our recovery plan was unwise and unnecessary. They opposed the necessary notion that government has a role in ending the cycle of job loss at the heart of this recession. There are those who believe that all we can do is repeat the very same policies that led us here in the first place.
But I also know that this country has never responded to a crisis by sitting on the sidelines and hoping for the best. I know that, throughout our history, we have met every great challenge with bold action and big ideas. That's what's fueled a shared and lasting prosperity.
I know that, at this defining moment for America, we have a responsibility to ourselves and to our children to do it once again. We have a responsibility to act, and that's what I intend to do as president of the United States of America.
(CHEERING AND APPLAUSE)
OBAMA: So, for those who still doubt the wisdom of our recovery plan, I ask them to talk to the teachers who are still able to teach our children because we passed this plan. I ask them to talk to the nurses who are still able to care for our sick and the firefighters and first responders who are still able to keep our communities safe. I ask them to come to Ohio and meet the 25 men and women who will soon be protecting the streets of Columbus because we passed this plan.
(CHEERING AND APPLAUSE)
OBAMA: All together, this recovery plan will save and create over three and a half million American jobs over the next two years. Because of this plan, those who have lost their jobs in this recession will be able to receive extended unemployment benefits and continued health care coverage.
Because of this plan, 95 percent of working Americans will receive a tax break that you will see in our paychecks starting on April 1. (CHEERING AND APPLAUSE)
OBAMA: That's the work we must continue in the days and months ahead. That's why my administration is also moving quickly and aggressively to restart lending for families and businesses, to help responsible homeowners pay their mortgages and refinance their homes, to address the major economic challenges of our time, the cost of health care, our dependence on foreign oil, the state of our schools.
All of this takes time, and it will take patience. It will entail great effort and cooperation. But most of all, it will require a renewed sense of responsibility from every American, a responsibility to ourselves and one another, a responsibility that's already been demonstrated by the men and women who are sitting behind me here today.
(END VIDEO CLIP)
BLITZER: President Obama in Columbus, Ohio, today.
Just about six weeks in office, is the president, though, already running for the 2012 election? Some are suggesting that.
Let's bring in our senior political analyst, Bill Schneider. He's joining us.
Has the next political campaign, dare I ask, Bill, already -- has it already started?
WILLIAM SCHNEIDER, CNN SENIOR POLITICAL ANALYST: No. The last campaign never really ended.
(BEGIN VIDEOTAPE)
SCHNEIDER (voice-over): February 9, President Obama goes to Indiana, February 10, Florida.
(CHEERING AND APPLAUSE)
OBAMA: It is good to be in Florida.
(CHEERING AND APPLAUSE)
OBAMA: Especially in February.
SCHNEIDER: February 11, Virginia, February 12, Illinois -- well, that's where he lives -- February 17, Colorado, where he was nominated last summer.
OBAMA: It is great to be back in Denver.
SCHNEIDER: February 18, Arizona, where the mortgage crisis has hit hard.
OBAMA: I'm here today to talk about a crisis unlike we have ever known, but one that you know very well here in Mesa and throughout the valley.
SCHNEIDER: February 27, North Carolina, March 6, back on the trail to Columbus, Ohio, where he addresses critics who doubt the wisdom of his recovery plan.
OBAMA: I ask them to come to Ohio and meet the 25 men and women who will soon be protecting the streets of Columbus because we passed this plan.
SCHNEIDER: Wait a minute. Back on the trail? What trail? He already won the election.
STUART ROTHENBERG, EDITOR AND PUBLISHER, "THE ROTHENBERG POLITICAL REPORT": Politics never goes away. Even though we just had a president election -- presidential election a few months ago, politics defines everything.
SCHNEIDER: Take a look at the eight states President Obama has visited since he took office. In 2004, seven of those states, all but Illinois, voted Republican. And, last year, seven voted Democratic for Obama. Six switched from red to blue.
The holdout? John McCain's home state of Arizona. With its fast-growing Latino vote, Democrats believe Arizona may be the next battleground state. President Obama has been in office less than two months. Is he already running for reelection?
ROTHENBERG: The White House didn't make decisions on presidential visits by chance.
(END VIDEOTAPE)
SCHNEIDER: Remember, midterm elections are coming up first. And, as it happens, seven of the eight states the president has visited have either a highly competitive Senate race or a highly competitive race for governor, like Virginia, which has a very hot race for governor this year -- Wolf.
BLITZER: We will see what happens. Good point, excellent political report. Thank you, Bill.
Some of the executives blamed for America's mortgage crisis have found a new way to make a profit. Are they helping people or just helping themselves?
And some people throw shoes. Others throw custard -- just ahead, slime as a form of political protest.
(COMMERCIAL BREAK)
BLITZER: Former executives with a firm at the center of America's mortgage debacle are now back in business, and they're making a profit. Some watchdog groups say, that stinks.
Here's CNN's Kara Finnstrom.
(BEGIN VIDEOTAPE)
KARA FINNSTROM, CNN CORRESPONDENT (voice-over): Countrywide will be remembered for the risky loans that made its executives rich, but then defaulted in vast numbers, causing the company to collapse and, some say, contributing to the nation's mortgage crisis.
Now, about a dozen former Countrywide executives have formed a company called PennyMac. They're buying up delinquent home mortgages on the cheap. For so much less than face value, PennyMac can renegotiate the loans and still make a profit.
PennyMac says it's helping families avoid foreclosures. The company also stands to make millions.
ADLAI WERTMAN, USC MARSHALL BUSINESS SCHOOL: It's perfectly legal. It just doesn't seem to pass the smell test.
FINNSTROM: Financial analysts and consumer groups are speaking out.
JAMIE COURT, PRESIDENT, CONSUMERWATCHDOG.ORG: It's outrageous that the executives that created this mess, knowingly putting people in loans they couldn't afford, are now poised to make a fortune cleaning it up.
FINNSTROM: Stanford Kurland, a former second in command at Countrywide, heads PennyMac. Kurland left Countrywide more than a year before it collapses. He's now named in numerous lawsuits against Countrywide for its lending practices.
Kurland declined our interview request, but told "The New York Times" he left Countrywide before the company began making its riskiest loans and should not be blamed for what happened as a result.
As for his new company, PennyMac released this statement: "PennyMac's business model depends on our ability to help borrowers stay in their homes. And we have put together a team with the experience to do that. With this goal, we have developed loan programs that avoid foreclosure by addressed the borrower's ability to pay their mortgage. We have offered help to hundreds of families in the past year. And we are eager to help as many as we can."
WERTMAN: The question is, how do we feel about trusting them?
FINNSTROM: USC business professor Adlai Wertman and many other experts believe companies like PennyMac that buy up bad loans, service them, and keep taxpayers from footing the bill may turn out to be an important part of solving this housing crisis.
WERTMAN: It's exactly what we should be doing and what the private sector should be doing. We just have to make sure that they're doing it in a manner that is fair manner to all parties involved.
FINNSTROM (on camera): How to ensure that and whether there should be greater oversight or perhaps new regulations for companies like PennyMac is now a growing debate.
Kara Finnstrom for CNN in Los Angeles.
(END VIDEOTAPE)
BLITZER: Look closely. What -- what do you see? The Obama administration wants you to see your tax dollars at work on economic stimulus projects. Others, however, point out what you might not be seeing.
Plus, more on our breaking news this hour, a very important story -- President Obama poised to reverse a Bush era policy on embryonic stem cell research. Donna Brazile and Mary Matalin, they next in our "Strategy Session."
(COMMERCIAL BREAK)
ANNOUNCER: This is CNN breaking news.
BLITZER: Let's get to breaking news.
Once again, our top story, right now, we have learned that President Obama is set on Monday to end the ban on federal funding of embryonic stem cell research.
Let's talk about this and more with Democratic strategist and CNN political contributor Donna Brazile, and Republican strategist, the former senior adviser to Vice President Cheney, Mary Matalin.
What do you think, Mary? He's going to be reversing a decision that President Bush made early on in his administration eight years ago that would impose these kinds of restrictions? And now he's saying, you know what? The research is vital.
MARY MATALIN, FORMER ASSISTANT TO PRESIDENT BUSH: Well, it's said. And it's really sad that this whole issue has been so politicized, because it masks the fact there are 72 known, current, working adult stem cell therapies and treatments. And there are zero stem cells, embryonic stem cells, treatments or therapies.
And the tests that they have had, the research that they have done shows that they're unstable. So, this has become a -- the 21st century abortion issue, if you will. And it's not true that Bush banned all the funding or any of the federal research on it.
And I hope we can get out of the politics of this and pursue -- continue to pursue some of the advances that have been made with adult stem cells.
BLITZER: But a lot of scientists say, as you know, Donna, that embryonic stem cell research holds a great potential out there.
DONNA BRAZILE, CNN POLITICAL ANALYST: Wolf, I agree with Mary that it's time for us to put science over politics.
And if this can provide scientists and others with the needed research, so that we can have the appropriate cures for diabetes and Parkinson's and other diseases, this is -- this is a great decision. And I applaud the president for opening up these new lines of research to -- for scientists to see if they can discover some cures.
BLITZER: Listen to this exchange that our own John King had with the president not that long ago, the president making it clear he wanted to end this ban on embryonic stem cell research, but he wanted to do it with new legislation. Listen to this.
(BEGIN VIDEO CLIP)
JOHN KING, CNN CHIEF NATIONAL CORRESPONDENT: You will have the power at the end of that parade to, at the stroke of a pen, lift the federal ban on embryonic stem cell research. There may be the votes to do it in Congress now, but you don't have to wait, you could do it in your first few minutes in office, will you?
OBAMA: Well, if we can do something legislative, then I usually prefer a legislative process because those are the people's representatives.
And I think that, on embryonic stem cell research, the fact that you have a bipartisan support around that issue, the fact that you have Republicans, like Orrin Hatch, who are fierce opponents of abortion, and yet recognize that there is a moral and ethical mechanism to ensure that people with Parkinson's disease and Alzheimer's can actually find potentially some hope out there, you know, I think that sends a powerful message.
So we're still examining what things we'll do through executive order. But I like the idea of the American people's representatives expressing their views on an issue like this.
(END VIDEO CLIP)
BLITZER: Donna, he's clearly had a change of heart since then, because he's going to go forward with an executive order.
How do you explain that?
BRAZILE: Well, I -- I'm sure the president decided that this is the most effective way to get this done immediately, because, look, every day that we lose, every year that we lose, we're getting further and further behind in finding cures for these -- these incredible diseases.
And, so, I -- I applaud him for taking this step. Yes, it will be controversial, but, as the president said, that there's a lot of bipartisan support out there, including former first lady Nancy Reagan. So, I look forward to those who are supportive of this president to speak out on Monday and to say that this was a great move.
BLITZER: Is this going to be a big issue when it's done on Monday, Mary, or is it going to just move on -- people are going to move on? MATALIN: Well, if one were cynics, one would say the reason that the president is reversing course and doing this via executive fiat, as opposed to legislatively, is because the country is deeply divided on this, and he knows that.
And if he left it up to the people's will, it would be a big -- there would be a big political fight on this. It's not a passing thing. And it's not, as the Democrats have described it, as a lack of confidence in scientists.
It's quite the contrary. It's a very tough ethical issue. There are cures, there are research, there are current adult stem cell treatments, as I keep saying. And if we put it to the legislative body and the people had a say in this, I'm not sure it would pass.
BLITZER: Well, right now, he's going to move forward with the executive order.
Mary, listen to this. This is Newt Gingrich, the former speaker of the House, a prominent Republican right now. And he said this not that long ago. Listen to this.
(BEGIN VIDEO CLIP)
NEWT GINGRICH, FORMER SPEAKER OF THE HOUSE: There's a Bush-Obama continuity in economic policy which is frankly a disaster for this country and cannot work.
(APPLAUSE)
(END VIDEO CLIP)
BLITZER: Are you surprised by that Bush bashing, not by Democrats, but by Republicans?
MATALIN: Well, you know, whenever we lose, we tend to circle the wagons and shoot inward. We liked to do herd management and weed out the weak.
But we're getting close to a Jonestown massacre here. That is neither substantively true, nor strategically helpful right now. What -- instead of talking about yesterday's Republicans, we should talk, particularly Newt, who brought those Republicans to the majority, he should be getting them, right this very moment, to extricate themselves from this omnibus package, which 40 percent of the earmarks are attributable to the -- to Republicans.
That's what we should be focusing on. We lost because we went into this profligate spending. We got -- we redeemed ourselves. Eric Cantor and -- and the group are uniting against the earlier wasteful stimulus, non-stimulative stimulus.
And that's what Newt should be focusing on now, getting us to unite, pull out our pork out of the omnibus, and go back to our original principles.
BLITZER: We have got to leave it there, guys.
Mary, thanks for coming in.
Donna, I know you wanted to weigh in, but you know what?
BRAZILE: Of course. I know.
BLITZER: You have all of next week to weight in as well.
BRAZILE: Thank you, Wolf.
BLITZER: All right, guys, thanks very much.
President Obama's borrowing an idea from corporate America. He's using a logo -- yes, a logo -- to send a message. We will explain.
And a new and very real threat from North Korea could put Americans in danger.
And a global symbol of nonviolence becomes a source of big profit. What would you pay for Gandhi's sandals? There are new developments. We will tell you about it right here in THE SITUATION ROOM.
(COMMERCIAL BREAK)
BLITZER: Supporters of President Obama helped make his campaign famous with logos like these. Now the administration is rolling out more graphic designs to help its causes. But not everyone's giving them rave reviews.
We asked our Samantha Hayes to take a closer look.
What did you find, Sam?
SAMANTHA HAYES, CNN CORRESPONDENT: Wolf, you know, companies do this. They like to have a brand, send a message, even perhaps elicit emotion, with a logo or an emblem. So, now the Obama administration is using one to identify projects associated with the recent $787 billion stimulus package.
(BEGIN VIDEOTAPE)
HAYES (voice-over): President Barack Obama wants you to associate this logo with one thing.
OBAMA: Let it be a reminder that our government, your government, is doing its part to put the economy back on the road of -- of recovery.
HAYES: The White House tells CNN the O-shaped American Recovery and Reinvestment Act emblem speaks to investments in green energy, infrastructure, and health care.
UNIDENTIFIED FEMALE: I like that he just actually took the time out and broke -- broke it into three categories, instead of just having one logo, to show everybody that he cares about more than one issue.
UNIDENTIFIED MALE: He's trying to get people back to work.
UNIDENTIFIED MALE: I can see other people saying, well, why are you spending so much time on creating the logos, you know? I mean, it might have created jobs.
HAYES: Rob Frankel has written a book on branding. He says the emblem is missing something.
UNIDENTIFIED MALE: Unfortunately, it lacks any type of inspiration. And, in these types of economic times, inspiration is almost all you have got.
HAYES: He compares it to FDR's Works Progress Administration logo and this one from President Gerald's Ford's Whip Inflation Now campaign.
UNIDENTIFIED MALE: I think an important aspect here is that this logo comes across as simply just another government service. And that sets up the expectation of, again, here's what the government is going to do, as opposed to, here's how you can get involved.
HAYES: It's been hit or miss with Mr. Obama's logos. The O logo during the campaign was seen everywhere, but he came under fire last June for this one displayed during a meeting of Democratic governors. Critics said it looked an awful lot like the presidential seal, a presumptive move by then candidate Obama.
But, as president, he continues to push his brand. And, right now, that's job creation, green energy and health care.
(END VIDEOTAPE)
HAYES: Now, the Chicago firm that designed the O also did the stimulus logo. And the company declined our request for an interview.
BLITZER: Everyone needs a logo.
HAYES: Yes.
BLITZER: We have got a SITUATION ROOM logo.
HAYES: Even a presidential campaign.
(LAUGHTER)
BLITZER: That's right.
Thanks very much for that, Sam.
Let's go to Jack Cafferty. He's got "The Cafferty File" -- Jack.
JACK CAFFERTY, CNN ANCHOR: You know, it just occurred to me when I watched that speech. When it comes to marketing, this guy's doing all right. I mean, he got elected, you know? (CROSSTALK)
BLITZER: His -- his numbers are pretty good.
CAFFERTY: Not too bad.
The question: Does Michelle Obama have a future in politics if she wants one?
Tripp in Pennsylvania writes: "Michelle Obama is the genuine article, perhaps even outshining Princes Di. She could be our nation's first queen, if she chose. As for politics, I think Michelle is far above the madding crowd and will always place her first family first."
Susan in Idaho says: "Funny you should ask. I started turning that thought over in my mind about a month ago. If she and Barack are to be elected to two full terms, it would equate to 16 years of common sense, morality and brilliance. We sure could use all of those qualities."
Frost writes: "I think she has a big enough job now. She calms us like no other first lady. We admire her as the first mom and first lady. She is setting the standard of the great American mom. And that's a huge job. Both of them hit the ground running every day, and they reach out and touch a part of American long forgotten about."
Frank writes, "God, I hope not."
Brielle in New Jersey writes: "She could, but I doubt she wants it. I would just like to say, though, all those people who called her an angry black woman during the campaign are now eating their words, because she has shown herself to be bright, poised, down-to-earth, and deeply committed to the issues of the middle class."
Kevin in Nebraska: "I feel the country still wants a female president. And, when that time comes, she could set the standard on how to do that -- if she wants to. Who would be her competition? Sarah Palin?"
(LAUGHTER)
CAFFERTY: "That would be another Super Bowl blowout."
Marie in Ontario writes: "In most modern countries, Michelle Obama would likely be a shoo-in with her high level of intelligence and charisma. But I think being a woman and being black would be just too much for the United States to handle at this point in time. On the other hand, if she ever did manage to get elected, it would be lots of fun to watch the likes of Rush Limbaugh, Sean Hannity and Bill O'Reilly's heads explode on the air."
If you didn't see your e-mail here, you can go to my blog, CNN.com/caffertyfile. Look for yours there, among hundreds of others.
I promise to stop gushing about Michelle Obama next week. BLITZER: I know you -- you heart her.
(LAUGHTER)
BLITZER: And -- and we all know that, Jack. Thanks very...
CAFFERTY: She's great.
BLITZER: Yes, of course.
Stand by.
